The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After the News Summary this Monday we update the new tensions caused by Iraq's incursions into Kuwait, then we hear three new views of the budget deficit problem from President-elect Clinton, his budget director- designated, Leon Panetta, and from Ross Perot. We have excerpts from the confirmation hearing for EPA administrator Carol Browner, and finally Roger Mudd takes us on Thomas Jefferson's route to his inauguration. NEWS SUMMARY

MR. MacNeil: The United Nations Security Council met tonight in a closed-door session on the recent incursions by Iraq into Kuwaiti territory. This morning about 150 Iraqis crossed into Kuwait to dismantle weapons warehouses there. It was the second such incursion in 24 hours. The Security Council was also considering action on Iraq's refusal to allow planes carrying U.N. weapons inspectors to land there. Before tonight's meeting, the Japanese ambassador to the U.N., who's also the Security Council president, was asked if he expected the U.N. to use force.

YOSHIO HATANO, U.N. Ambassador, Japan: I do not foresee a use of force by the United Nations, immediate fear as a result of this flight ban nor border incursion. I think we should keep on pressuring Iraq by other means.

MR. MacNeil: We'll have more on the Iraqi situation right after this News Summary. Jim.

MR. LEHRER: Heavy fighting was reported today in Sarajevo and elsewhere in Bosnia. It came as leaders of the warring parties met in Geneva to consider a U.N.-sponsored peace plan. It calls for the division of Bosnia into ten autonomous provinces overseen by a central government. Serbian President Milosevic attended the conference for the first time today. He said he would support the plan. The Bosnian Serb leader, Radovan Karadzic, said he would no longer insist on a separate Serb state within Bosnia. Afterwards, a U.N. spokesman had this to say.

FRED EKHART, Conference Spokesman: Discussions that have taken place so far suggest, suggest that the Bosnian Serb side is getting closer, is getting more comfortable with the proposal put forward by the co-chairman.

MR. MacNeil:Somali warlords began a second week of talks today in the Ethiopian capital Adis Ababa. The 15 factional leaders agreed to an immediate cease-fire. They also agreed to disarm their militias of all heavy weapons and turn them over to the United Nations peacekeepers. Meanwhile, in the Somalia capital, Mogadishu, U.S. Marines staged a raid on the country's biggest weapons market. We have more in this report narrated by Vera Frankel of Worldwide Television News.

MS. FRANKEL: On the same day that the official cease-fire was due to stop, American troops were preparing to raid the country's biggest weapons market. The Marines are on full alert. Sniper fire is still common. Weapons are plentiful and easy to get. The most important task now is to round up the ones that are still on the market. Nine hundred Marines were involved in Operation Nutcracker, the largest contingent so far. Inside they found a large cache of small weapons and ammunition. There was no resistance. American soldiers also seized a large sum of cash in what appeared to be a well organized and profitable business. The confiscated weapons were loaded up and taken away to be destroyed. With a cease-fire in place, America says it's taking steps to end the war but admits that most weapons may never be found. At the entrance to Mogadishu's main port, stones and insults were hurled at troops trying to secure the root for aid supplies. Unrest is a daily ritual but far removed from the full scale civil war of a month ago.

MR. LEHRER: President-elect Clinton worked on his health care reform plans today. He and Vice President-elect Gore met with top health care advisers at the Governor's Mansion in Little Rock. In an interview with Judy Woodruff Sunday, he said bringing health costs in line with inflation would help determine how much he can cut the deficit. Clinton's choice for budget director, Leon Panetta, testified at Senate confirmation hearings today. He said the country should be prepared for tough choices involving spending cuts and possibly new taxes to reduce the deficit. Carol Browner, who was nominated to head the Environmental Protection Agency, also faced confirmation hearings. She said she would try to ease the adversarial relationship between the EPA and business. We'll have excerpts from both hearings and the Clinton interview later in the program.

MR. MacNeil: Former Presidential candidate Ross Perot today launched a membership drive for his political watchdog group called United We Stand, America. He said the organization would monitor efforts by the White House and Congress to cut the federal deficit. He spokes to workers in Dallas.

ROSS PEROT, United We Stand, America: We never had time to do this during the campaign, but we will really get organized in every community and neighborhood in the United States so that the people do have an effective voice. After we get everybody organized, we will implement the electronic town hall to keep the voters fully informed of the issues. There's great enthusiasm about that and to give the voters a voice so that they can let their Congressman know by a congressional district how the people in each district feel. What are our priorities? We want to recreate a government that comes from the people, not at the people. We want to reform the federal government at all levels.

MR. MacNeil: We'll have extended excerpts from the news conference later in the program.

MR. LEHRER: The National Commission on AIDS issued a report today saying the disease was spreading rapidly in minority communities. It attributed the situation to poverty, discrimination, and a shortage of health care services. According to the report, nearly half of all Americans infected with the HIV virus are African- American or Hispanic.

MR. MacNeil: Another blizzard hit Utah today. This latest storm dumped a foot of snow on top of the two to three already on the ground. Highways, schools, and government offices were shut down as were many businesses. The way to the snow has caused several roofs to collapse.

MR. LEHRER: And that's it for the News Summary tonight. Now it's to the latest Iraq aggravations, thoughts on deficit cutting from Mr. Clinton, the OMB Director-Designate Panetta and Ross Perot, another confirmation hearing, and Mr. Jefferson's trip from Charlottesville. UPDATE - PROVOCATION?

MR. MacNeil: Iraq's latest showdown with the United Nations and coalition allies is our lead story again tonight. Yesterday and again today scores of Iraqis flooded into the de-militarized zone between Iraq and Kuwait. They retrieved four Silkworm missiles and other equipment. The United Nations Security Council was called into special session and is expected to condemn Iraq's action as a violation of the United Nations' cease-fire terms. White House Spokesman Marlin Fitzwater said Iraq was trying to cheat wherever possible on Gulf War cease-fire resolutions. Our coverage begins with a background report from Nik Gowing at Independent Television News.

MR. GOWING: The target of the armed Iraqi aggressions was a dozen or so operational Silkworm anti-ship missiles of this type stored a quarter of a mile inside what is now Kuwaiti territory, weapons on the point of being destroyed by United Nations teams. When the Iraqis tried to take the weapons 18 months ago, the U.N. stopped them. This time the U.N. troops failed. Iraq seized four missiles.

ABDELLATIF KABBAJ, UN Spokesman, Kuwaiti City: Within 90 minutes, the Iraqis had ordered the contents of four bunkers onto trucks and returned onto to Iraq, and during this incident one United Nations vehicle was damaged when it was rammed by an Iraqi truck. However, thank God, we didn't have any casualties.

MR. GOWING: It now appears the U.N. monitoring force knew Iraqis had been in the area for at least a week. Iraq said it was retrieving assorted military equipment as it is entitled to do by a January the 15th deadline. The U.N. says that Iraq had to get their agreement first. This, the U.N. claimed, the Iraqis did not do.

BOUTROS BOUTROS-GHALI, UN Secretary General: They hope that Security Council will have a very stiff answer. We cannot admit this kind of violation and this kind of threat to a member state of the United Nations, which is Kuwait.

MR. GOWING: These incursions were into an area which until recently was officially still part of Iraq in a long-disputed desert area. A United Nations border commission recently decided the 125-mile Kuwaiti border with Iraq should be shifted northwards to include the Iraqi Naval base in the port of Umm Qasr, including military stores, some of which were raided yesterday and today but not the Iraqi town, itself, or Iraq's only major offshore terminal. The U.N. finding also gave Kuwait a greater proportion of the Rumaila Oilfield, including six big wells, one of the issues over which Iraq went to war two years ago. Two hundred and fifty Iraqi farmers south of Safwan have been forced to move. Kuwait has already announced plans for a Berlin-style wall fortification along its new border. Iraq, meanwhile, has formally rejected both border decisions and made clear several months ago it would contest them. After last week's brinkmanship over Iraq's surface-to-air missile batteries inside the no-fly zone, then the recent shooting down of an Iraqi MiG and a new Iraqi refusal to allow in a new team of U.N. inspectors, there is now speculation Saddam Hussein is pushing issues to a new more ominous level. Western analysts are united that Saddam Hussein, here seen meeting air defense commanders, is upping the stakes in his cat and mouse tactics with the West in order to strengthen his domestic authority, faced with increased political and economic pressures. Tonight, with Iraq even putting Iraqi airline staff onto the streets of Baghdad to protest against the U.N. flight embargo, Washington said there will be no more warnings and Whitehall said the West is losing patience.

MR. MacNeil: We turn now to two reporters covering the latest developments. James Bone reports at the United Nations for the London Times. Melissa Healy covers the Pentagon for the Los Angeles Times. James Bone, the Secretary General's statement made this sound a very serious step by Saddam, these incursions. What do you think the reaction of the Security Council will be?

MR. BONE: Well, the Security Council has the problem that there are already a comprehensive set of sanctions in place against Iraq, and there's nothing much more to do against Iraq short of military action, so the situation has to be susceptible to an easy military response, or they can't really do anything. It seems in this case they'll probably do nothing. They'll probably war again for about the half dozenth time of serious consequences, and leave it at that, possibly reinforce the border guards, the border monitors on the Iraq-Kuwait frontier.

MR. MacNeil: So when the Secretary General -- we just head him in that clip calling for a very stiff answer, is that what he thinks of as a very stiff answer?

MR. BONE: Well, there is some discussion about a possible resolution, and a reinforcement of the border force would require a resolution. That won't happen today. That seems to be the lines along which Boutros-Ghali is thinking.

MR. MacNeil: I see. Melissa Healy, the Fitzwater statement from the White House made the U.S. Government sound really at the end of its patience, particularly after the series of provocations. How seriously, these two latest incursions, are they being taken in Washington?

MS. HEALY: Well, the Bush administration is taking them very, very seriously and seems to want, once again, to in a sense spin its allies for yet another, into crisis mode once again, and the problem seems to be that after having just stood down from last week's crisis, the allies have some reluctance to do that. Now they are, the United States is in this case getting a lot of help from Saddam Hussein, who, who in both of these cases has seemed to have violated Security Council resolutions in a much more egregious way, a much more clear way, than was the case last week.

MR. MacNeil: How is this incursion seen in Washington as a clearer violation than moving the surface-to-air missiles into the no-fly zone?

MS. HEALY: Well, remember, there are two apparent violations here. One is the suggestion on Iraq's part that the United Nations inspectors can no longer use any but Iraqi aircraft to make its, to make their inspection in Iraq, and secondly, of course, this incursion into the de-militarized zone, which was, which was just plain, again, it's not so clear that that was illegal by the Security Council resolutions but what it was, more than anything else, was brazen. I mean, they practically carried the, the motor homes out from under the United Nations force.

MR. MacNeil: Brazen, Mr. Bone, yet, Iraq's ambassador claims that the Iraqis had permission to send these civilian workers in and, and take certain equipment out before, I think, a deadline of Friday, is that correct?

MR. BONE: Well, the whole suggestion is a lot muddier than it seems at first sight. There is a lot of Iraqi equipment, including the Silkworm, that was left on what became the Kuwaiti side of the border, and Iraq was told that it could remove equipment such as the prefabricated huts that were there, but not the arms, provided that it got the consent of United Nations forces here and Kuwait. Now, Iraq both took the weapons, which it wasn't supposed to take, which were meant to be destroyed this coming Saturday, and went into the Kuwaiti side of the border without prior consent from the United Nations, so although there was an agreement in place through which Iraq could retrieve some of the material by Friday, it didn't do it in the right way, and it took more than it was supposed to take.

MR. MacNeil: Well, among members of the Security Council, are there those who would be saying this evening at the private meeting, who would be saying, oh, look, this is just a misunderstanding, or do you think the Council members are pretty well agreed that this was a deliberate provocation?

MR. BONE: Well, I think that the Council members see this as part of a pattern of provocations. Iraq is always probing the Security Council and the United States in the transition from one administration to another, and there have been several violations of cease-fires and challenges to the Western powers in recent weeks. We mentioned that the ban on U.N. aircraft, although I gather that a U-2 spy plane operated by the U.N. did fly over Iraq on Sunday, there have been killings and harassment of aid workers in northern Iraq, in the area outside government control, and there have been these border incursions. So I think the Security Council's concerned to present a firm face to Iraq so that it doesn't -- it's like in another area now.

MR. MacNeil: Well, go back, Melissa Healy, to the incident over the weekend, or the showdown over the weekend over the missiles in the no-fly zone. It was left a little murky partly because of bad weather and being unable to see. Is the U.S. now satisfied, which has been doing the monitoring, is it satisfied that the Iraqis really have moved those surface-to-air missiles out of the area where they could fire on the planes that are imposing the no-fly zone?

MS. HEALY: Well, by yesterday my sources were telling me that, yes, they had been moved to the north of this 32nd Parallel, and just today we had the, we had Mr. Gates from the Central Intelligence Agency apparently telling these reporters that there appeared, there was some evidence that they had been moved back into the no-fly zone.

MR. MacNeil: Today?

MS. HEALY: Just today. So we're seeing, again, we're seeing more and more reports that add up to, to this pattern and are obviously fueling a lot of concern on the part of all of the allies.

MR. MacNeil: Now over the weekend clearly, or up till the weekend, the U.S. and Britain and France and Russia were backing the use of force if Iraq failed to remove those missiles. Is there any disposition -- having been marched up to the top of the ill and marched down again on that one -- is there any disposition among Security Council members to use force this time do you think?

MR. BONE: Well, force will be used by the Western powers. It wouldn't be used by the Security Council.

MR. MacNeil: I understand.

MR. BONE: And the formula that the Security Council has is that these violations of the various U.N. cease-fires amount to material breaches of the cease-fire which the Western powers argue gives them the right to use the original authorization for the use of force. Now that is again the case with these border incursions. If the Western powers can decide what they want to do militarily, then they will have, they will claim they have the right to do it. The question is: What are they going to do militarily? It's a lot easier to take out some missile batteries south of the 32nd Parallel than it is to respond to the fifth, or four Iraqi Silkworms.

MR. MacNeil: Now, Melissa Healy, Marlin Fitzwater said today no more warnings were needed for military force, which is sort of underscoring what James Bone just said. Is there a feeling, do you think, in the administration that some force is going to have to be used to make a demonstration to Saddam that he can't go on with this sort of thing?

MS. HEALY: Yes, very definitely. I mean, they are saying today they need no, they need give no warning and they need no further authority to do what they're contemplating doing, and they also have no shortage of options. I mean, there are the same options that we saw last week, the possibility of hitting weapons, themselves, maybe the anti-aircraft missiles, certainly their radars, the possibility of airfields from which Iraqi aircraft are operating, and, and further, there's the possibility of sort of punitive strikes on a number of Iraqi units of the presidential guard, the special security forces, and, and the like that are in large concentrations scattered throughout Iraq and apparently are quite vulnerable.

MR. MacNeil: Does the Bush administration see these incursions today and yesterday as grounds in themselves for military action?

MS. HEALY: No. They seem to be, to be portraying all of these things in the context of a pattern. It's a pattern that they are arguing, you know, leaves no ambiguity about what, what Saddam Hussein is trying to do. He's, he's trying to rub the allies' nose in his, in his defiance. And they've said they've had just about enough.

MR. MacNeil: Well, when is the Security Council going to have enough on this issue? And just sort of speculate from your information you have. How much is the Security Council, do you think, waiting until the administration changes in Washington so that you have a new leader, with a fresh mandate, how much -- what do you think is that?

MR. BONE: Well, the Security Council is a strange animal, and it really needs leadership, and there isn't really very much leadership at the moment because the major powers haven't really decided what they want to do. So obviously, people are waiting until somebody with the capacity to do something has an idea about what they want to do. Maybe the Clinton administration will have an idea. It seems to me that there won't be a great deal of difference in some of the way America's allies are looking forward to Clinton taking over in the midst of an Iraqi crisis so there's an early opportunity for him to show the continuity with the Bush administration line.

MR. MacNeil: He made a statement again today saying that he was four square behind President Bush on this, on this issue.

MR. BONE: That's right. There's also the fact that the Security Council, which changes its membership at the end of each year, has five new members who just joined, the Western powers again are quite happy thatthese five new countries are immediately confronted with a crisis with Iraq, one of the periodic crises with Iraq, and again have to come line up behind tough action, and stand behind one of these warnings, the second one in four days, of serious consequences.

MR. MacNeil: Let me just ask Melissa Healy briefly, how is the change of administrations in just over a week a factor in how, how the people at the Pentagon you cover, which is still the Bush Pentagon, and the White House viewing the need to take some action? Do they want to wait and leave it all to Clinton? What do you think?

MS. HEALY: Well, I think there is a sense on the part of Bush administration officials that they don't want to so much force Clinton's hand as to make sure that Clinton comes out with, with something that will indicate as strongly as they feel they have that this kind of behavior is not going to be tolerated, and I think there's a sense in which if they go ahead and if they conduct a military strike that Clinton, in effect, will have no option but to stand by and applaud it, and that that will get the message across.

MR. MacNeil: Right. Well, Melissa Healy and James Bone, thank you both for joining us.

MR. LEHRER: Still to come on the NewsHour tonight, talk about the deficit from President-elect Clinton, OMB Director- Designate Panetta, and Ross Perot, the confirmation hearing of the new EPA administrator, and the first presidential trip from Charlottesville. FOCUS - BUDGET CUTTING

MR. LEHRER: Some talk about budget numbers is next tonight. The first talker is none other than President-elect Clinton. Judy Woodruff talked to Mr. Clinton about numbers and other things yesterday in Little Rock for "Changing of the Guard," a pre- inaugural special, which will air later this week on most PBS stations. Judy asked Mr. Clinton whether he would still be able to lower the deficit by half in four years, a pledge he made early on in the campaign.

PRESIDENT-ELECT CLINTON: When I said that in New Hampshire, we had to cut 145 billion off of that or something like that. I think we can cut that much if we, if we -- the deficit is much bigger than it was when I said that. I think we can, I think we can take at least that much out of it, and maybe more. The real answer to that is it depends on two things: One, will the Congress pass a health care program which will really bring health costs in line with inflation? And two, can we --

MS. WOODRUFF: And that's something you're going to ask for early.

PRESIDENT-ELECT CLINTON: Absolutely, absolutely. We have to do something about health care costs, or this, or the deficit will never get solved. The second thing it depends on is whether we can get enough new investment in this economy to grow at a more rapid rate. We simply cannot. No President and no Congress, in my judgment, can deal with this deficit problem solely by raising taxes and cutting discretionary expenditures. I just don't think you can get there. We tried that, we tried that in 1990. The 1990 budget deal, a lot of people didn't like specifics of it, but it was carried out, I think, in good faith by both sides for a good while, and it didn't produce anything like the deficit closing people thought for two reasons: One is the recession went on for so long people weren't paying taxes into the government; the other is there was an explosion in health care costs, which engulfed the government. It is now estimated that between now and the year 2000 and the end of this decade, if we don't do anything about health care, half of the deficit growth willbe in health care.

MS. WOODRUFF: So -- but do I hear you correctly -- you're not sure anymore that you can cut the deficit in half?

PRESIDENT-ELECT CLINTON: We still think we can cut it as much as I said I'd cut it when I put out a budget in June and July, and we may be able to cut it even more, but it depends on those two things. And those two things right now are beyond my ability to predict. It depends on whether the Congress will adopt the programs I recommend. If they do and if the American people cooperate, if all the people in health care really work hard to change the system and to do things that will help us, then I think we've got an excellent chance.

MS. WOODRUFF: Because, you know, mention the deficit cut, people say, well, how in the world is he going to do that and go ahead with a stimulus package of over $200 billion? You've talked about National Service Corps, infrastructure jobs.

PRESIDENT-ELECT CLINTON: See, that's what makes it tougher.

MS. WOODRUFF: And middle income tax cuts.

PRESIDENT-ELECT CLINTON: We're going to have to cut more in other places than we would have thought, than we would have thought otherwise because the deficit's gotten bigger. And we're going to have to move more aggressively on the health care front because, I guess, that's the one point I want to make. You can't -- the deficit has to be dealt with because it will paralyze the ability of our country to deal with other problems, emergencies abroad, needs at home, so it's got to be dealt with. On the other hand, we cannot deal with it the way we've been dealing with it the last twelve years, which is simply to reduce investment in the future. Our country has an investment deficit as well as a budget deficit, and I have to pursue that investment program because that's the only way we're going to grow the economy. So that means that I will have to look at a whole range of things to try to control costs in other areas so that we can invest more and consume relatively less. That is the great dilemma that we face today. If this were just a government deficit, no problem, I think we could solve it rather easily. If we just needed to increase our investment levels in our people, in our economy to grow faster, I think we could solve that rather easily. No one in our history has had to face both things at the same time. For example, President Roosevelt came into office in a more difficult time, when 25 percent of the American people were unemployed. He could balloon the deficit because there was deflation. There was no inflation. There was no problem. He could do that. Nobody's ever tried to do both these things at once. We're just going to see if we can do it.

MR. LEHRER: The next talker about numbers tonight is Leon Panetta, Mr. Clinton's choice to head the Office of Management & Budget. He spoke today at his confirmation hearing before the Senate Government Affairs Committee. Panetta is a former California Congressman and Chairman of the House Budget Committee. Among the questioners was Senator John Glenn, Democrat of Ohio.

SEN. JOHN GLENN, Committee Chairman: The federal budget deficit for fiscal year '93, now projected to be some 327 billion, I hear talk of deficit projections for '97 more than 380 billion, maybe approaching 400. And that's just if current services are maintained. President-elect Clinton originally promised to cut the deficit in half by fiscal year '96. Is it still your goal to cut the deficit in half by fiscal year '96?

LEON PANETTA, OMB Director-Designate: Mr. Chairman, we are in the process of presenting a number of options to the President, and he has made no choices or no final choices at this time. I think the key right now is to restate the commitment which he has made which is that we have to achieve multi-year deficit reduction that's real and that we can stick to. And he's also made a commitment to try to make important investments, targeted investments in this country, in terms of areas like education and health care and infrastructure, as well as growth in terms of business incentives. I think the test of credibility when it comes to the deficit reduction process is that you set a deficit reduction goal, a deficit reduction goal that's credible and that you're willing to enforce. I think that was one of the strengths of the budget agreement is that it didn't necessarily say we're going to reach a certain deficit target. It said we're going to achieve a deficit reduction goal, and then back it up with choices and with enforcement. And that's exactly what's happened. So I think that's the real test of credibility. And that's what we ought to focus on, but at this point, I have to tell you that while we are presenting a number of options to the President, he has not made a final choice on that issue.

SEN. GLENN: Okay, so as far as -- you stress a credible goal, and I agree with that. You wouldn't want to say this morning whether cutting the deficit in half by '96 is a credible goal at this point.

LEON PANETTA: I think that's one of the goals and one of the options we're presenting to the President.

SEN. GLENN: Okay. All this is a balance between income and outgo, obviously, and during the campaign, and there has been a lot of talk since the campaign about the likelihood of a middle class tax cut. Do you favor a middle class tax cut?

LEON PANETTA: Well, I have to tell you that I don't know that there's anybody who doesn't want to cut taxes for people, and I'm included, but obviously our first priority, our first priority is to develop that deficit reduction plan, and as I said, make it credible, show that we've made the tough choices and that we're achieving the targets that we want to achieve in terms of deficit reduction, secondly, lay out the investment path that we want to follow and target investments we want to make, and then I think it, dependent on that lies the question of whether or not we can go any further with regards to any kind of further reductions on taxes. Obviously, I think all of us are interested in trying to improve the progressivity of the tax system and trying to improve its fairness. But I think our first priority right now is to do deficit reduction and to do the investments that need to be made. That's the first priority.

SEN. WILLIAM ROTH, [R] Delaware: Now, last July 19th, the Washington Post quotes you as saying with respect to the Clinton clan that it doesn't frankly confront the issues of how we reduce the deficit. I don't see how he can take the level of revenues he's talking about or the spending cuts he's targeted and simply pump all the, all that into added spending. Now, my reading of putting people first is that it fails to address the challenge of a deficit. How is the new administration going to reduce the deficit by half in -- by 1996?

LEON PANETTA: You, basically, you have to look at all key areas in the budget. You've got to look at defense spending and whether or not additional savings can be achieved there, and I think non- defense spending, which is an area that obviously has taken its share of hits during the '80s. Nevertheless, I think you can still get some savings there even though there should be some investments. Thirdly is the whole area of entitlements, which I think is a prime area. If you're looking at an area that's expanded dramatically that's causing a large part of this problem, it's the entitlement area, particularly on health care. We're looking at a tripling of costs with regards to Medicare and Medicaid. You cannot, you cannot do anything about these lines unless you confront the issue of health care and the costs that are expanding in that area. So that's a major challenge. That's 50 percent of the entitlements. In addition to that, I think you've got to look at other areas of entitlements as well, and lastly, you've got to look at revenues. Everything has to be looked at in order to develop the package of deficit reduction that you're serious about using in order to reach the --

SEN. WILLIAM ROTH: Let me ask you a question there, Mr. Panetta. Isn't it true that somehow we've got to get a program together that will create growth in jobs? Isn't that the way to reduce the deficit?

LEON PANETTA: Yes. Yes, you do have to invest in jobs, and yes, you do have to provide incentives, but in doing that, you can't lose sight of what you have to do on deficit reduction. And, Senator, if you have to achieve, and I think you do have to achieve, somewhere between three to four hundred billion dollars in deficit reduction over these next few years in order to achieve any target that you're after, you cannot just do that on a spending side. You've got to look to revenues as well.

SEN. WILLIAM COHEN, [R] Maine: In talking about dealing with entitlements, that's pretty vague and general. Of the entitlement programs that -- I'll give you just 12 -- Social Security, Medicare, Deposit Insurance, Medicaid, Federal Civil Retirement, Unemployment, Military Retirement, Food Stamps, SSI, Family Support, Veterans Benefits, Farm Price Supports -- are there any there that you would exempt from dealing with in terms of curbing the growth of those programs?

LEON PANETTA: As director of the Office of Management & Budget I am going to take the approach that everything's on the table, Senator. Everything is on the table, and I'm not going to start exempting things right now because, frankly, the problem is too great. I think we need to look at all areas. It doesn't mean we don't have choices to make, and obviously, the President will make those choices. But I have to start on the basis that everything is on the table and I'm going to look at every area to make sure that, that -- whether or not savings can be achieved.

SEN. COHEN: All right. Sen. Lieberman said that you should act boldly both on the cutting side and the, the revenue increasing side. Should we be anticipating an increase on the top marginal rate from 31 percent to 36 percent? Is that a bold stroke by the Clinton administration?

LEON PANETTA: Well, obviously, any kind of revenue increases are a bold stroke because of the fact that most members resist doing anything on that front, but obviously you're going to look at a set of options on the revenue side, and clearly, the President-elect has indicated that the first priority is to go after the wealthy, so that some kind of increase in the upper rate will clearly be part of that package.

SEN. COHEN: As well as a surtax on millionaires, should we expect that as well?

LEON PANETTA: I believe that would be part of it.

SEN. JOSEPH LIEBERMAN, [D] Connecticut: During the campaign, the President-elect talked about a 3 percent reduction in all administrative budgets of federal agencies as a wayto mandate increases in productivity, how do you feel about that? Are we going to see that in the first Clinton budget? I have always felt that you could find additional savings, management savings within both the Executive Branch and I might add the Legislative Branches, and I think we ought to look at that very closely as part of any package. I think you've got to say to the American people if we're going to ask sacrifices on the part of the American people in a number of these areas that we've talked about, I think we also have to set the example that we're part of that process.

MR. LEHRER: Somebody else weighed in on the numbers today, somebody named Ross Perot. He ended a two-month political silence by launching a membership drive for his political group, United We Stand, and in doing so, he reminded reporters in Dallas that to him concern about the federal deficit was nothing new.

ROSS PEROT, United We Stand, America: Our great country every working day goes an additional billion dollars into debt. And I love these articles being printed today that say, oh, my gosh, we didn't know we had this extra deficit coming up next year. Go back to the presidential debates. I guess they don't listen to us, but we were covering this in technicolor, and even if you're brain dead, when you realize that Congress and the White House holding hands together delayed appropriating $60 billion for the savings & loans that everybody knew had to appropriate until after the election, when did you think it was going to pop up onto the screen? Everybody knew it was coming. Now we act like, oops!, and I wonder why.

REPORTER: Mr. Perot, I'd like to ask you, in view of these new higher projections by the Bush administration on the deficit growing by more than $60 billion by 1987, do you think that that gives Bill Clinton in any way a valid excuse to back off his pledge to cut the deficit in half in four years?

ROSS PEROT: Yes. I wouldn't call it an excuse. I would just say it's a reality, and here's the problem we have. The American people have to show President Clinton and the Congress that we understand it, and that we're willing to have fair shared sacrifice. The worst thing any President can do is, is not look at the facts and make a good decision for the people, so right now, understandably, when you look at the damage done by "Watch my lips, no new taxes," you could be a little sensitive about changing a campaign promise, right? We, the people, need to display to the President and to the Congress by congressional district not only do we understand it, not only are we grown up enough and tough enough to take it, but if they don't do it in '94, we're going to put people in there that do. And then the President will have some people that are responsive to us. Now our whole purpose in this thing -- for example, we'll be very active in the Texas Senate campaign -- not with a candidate, but to urge the citizens of Texas to be involved, and I treat it as a little special campaign, where a small percentage turn out to vote and so on and so forth. This -- hopefully, we can be a constructive voice in letting the President know we're willing to sacrifice, and the greatest people in the world are the older and retired people, one on one. They're tough; they're resolute; they went through the Depression; they went through World War II. They're more than willing to sacrifice to pass the American dream onto their grandchildren. It's all doable, but we can't leave it up to the special interests roaming around in their alligator shoes and their blow-dried hair. As I have said before, we have got to have a voice, and that's what this is all about. Go ahead, Bob.

REPORTER: Could I ask you to just clarify what you said earlier, that you think that Clinton does now have a valid excuse to back off his deficit cutting pledge? How much time do you give him, and what should Clinton do about the middle class tax break?

ROSS PEROT: I don't want to try to coach and advise the new President. In every possible way we want to be supportive of the President and Congress. He is a very bright person. He's got an incredibly talented group around him. The thing that we can do that's constructive is create an environment that let's them do what they know in their hearts they need to do. Right next to Bob here.

REPORTER: What about a middle class tax break, Mr. Perot?

ROSS PEROT: Anybody that analyzes it knows that it's a, it's a deficit increaser because when you finish, when you finish at the end of the day, the only way out of this hole that we're in is millions of everyday good, decent citizens at work in good paying jobs, paying taxes, while we cut government expenses. It's going to take both. That takes a lot of courage, a lot of courage. To cut expenses we've got to target the industries of the future. We've got to create the jobs of tomorrow. We've got to be very careful about all these trade agreements, and it's -- we've just got to be very, very surefooted to keep our people at work, because the last thing you need with this deficit problem we have is to suddenly have a downturn in the economy that reduces the taxes coming in the door. Everything we need to do it should be aimed at building and strengthening our job base. Yes.

REPORTER: Mr. Perot, some of your critics are saying that why don't you just leave Bill Clinton alone, he hasn't entered the White House yet, that you just can't stand being out of the limelight. The campaign's over.

ROSS PEROT: I haven't heard that from anybody yet. Were was that?

REPORTER: Well, they're saying that.

ROSS PEROT: Where did you see that? Did anybody see that? I haven't done anything. All I've done --

REPORTER: They're --

ROSS PEROT: Wait a minute now! All I've done is try to give him plenty of breathing room. We're not -- have I said anything today critical of Governor Clinton or President-elect Clinton?

REPORTER: Several things. You questioned his ethics rules. You questioned his, his stand on --

ROSS PEROT: But didn't I in every single case say that I understand the pressure he's under? And didn't I in every case try to make it clear that one of the reasons we're doing this is to create a counter pressure? Because I think his impulse and desire is to do the right thing but if you're living inside the barrel and the only noise you ever hear inside the barrel is the noise of the special interests, the people lose their voice. That's why we're doing it. Our goal is not -- and believe me -- I would prefer not to have to do this personally. And I have not heard anybody even hint that I can't stand to be out of the limelight. I don't like this personally. And I don't think that's been in print anywhere. If it is, I missed it.

REPORTER: Ed Rollins said that the other day.

ROSS PEROT: Well, I rest your case. Okay. Next question.

REPORTER: I hate to ask this, because I know it's three years away, but would you consider another bid for the presidency if the problems then are as bad as they are now?

ROSS PEROT: I would say that if we get our organization put together and if the American people do the kind of job I saw them do in 1992, andparticularly when they have time to really get organized, see in '92, they just had to scramble from nothing and build a nationwide network, but if we get our act together, get organized, they get their act together, get organized, I don't think we will have the crisis in '96 that we could have if we all just go home and say, oh, gee, they're going to do it to us again. So I -- it's not anywhere on my agenda to -- I would feel that I had personally failed if I have to run again, because we don't have four years to wait. We've got to do it now. FOCUS - ADVISE & CONSENT

MR. MacNeil: Back in Washington, the Senate continued confirmation hearings of the Clinton nominees. Here are excerpts from the appearance of Carol Browner, chosen to head the Environmental Protection Agency. She appeared before the Senate Environment & Public Works Committee. Ms. Browner is a former aide to Vice President-elect Gore and former head of the Florida Department of Environmental Regulation.

CAROL BROWNER, EPA Administrator-Designate: I hope my tenure will mark a new era in communication between the EPA and America's business community, between environmentalists and business leaders. The adversarial relationship that now exists ignores the real complexities of environmental and business problems. It creates damaging delays in the regulatory process and often unnecessarily harms business without significantly aiding the environment. My experience in Florida has shown that we can ease the regulatory burden on business without compromising the environment. EPA must deliver quick, consistent decisions. We must recognize the special problems of small businesses. We must spend more time listening to the particular concerns of businesses and communities affected by environmental problems, and we must recognize the value of state regulators. The EPA should promote and encourage awards for business that take the lead in developing pollution prevention and recycling strategies. I will encourage not only business participation but also community involvement on environmental issues. We must respect the families and communities on whom the effects of economic development and environmental regulation ultimately fall. We must bring these people into the process. We must restore voluntary compliance with the nation's environmental laws by making them fair and efficient, by forcefully executing them, and by increasing public disclosure of environmental practices.

SEN. JOHN WARNER, [R] Virginia: Dave Broder wrote that -- and I'll quote his famous quote -- President Clinton let his super environmentalist Vice President, Albert Gore, a man whom all of us respect greatly by the way, served with him, put a protege, Carol Browner, in as head of EPA, thus ensuring that one interest group will at least dominate its part of the bureaucracy - - end quote. Give you an opportunity to, to answer that. What interest group is he referring to, and how do you propose to allow other voices to be heard in the EPA, in other words, not just the alarmist side but a balanced approach to all voices?

CAROL BROWNER: Well, Senator, I don't know what special interest Mr. Broder refers to. I think if you look at my record in Florida, I have not been dictated to or driven by the alarmists, that we have had a policy of involving all of those not only affected by but interested in the problem we seek to address, and I would certainly seek to continue that in this position if I should be confirmed.

SEN. ROBERT SMITH, [R] New Hampshire: I have not seen your position on it anywhere, and ifyou have one, I'd appreciate knowing it, your position on nuclear power.

CAROL BROWNER: President Clinton has suggested during the campaign that we have dealt with the disposal issue; we need to move away from increased reliance on nuclear power, and I would share the concerns that he has raised.

SEN. ROBERT SMITH: Do you support then the current moratorium that exists on the construction of new plants?

CAROL BROWNER: I am concerned that the future, the construction of new plants without appropriate and adequate disposal can cause us some significant problems.

SEN. DIRK KEMPTHORNE, [R] Idaho: Ms. Browner, how do you intend to deal with regulations and over regulations, and what about what I will call the "cookie cutter" approach that regardless of local conditions, geography, innovation, that everyone must do it the same federal way?

CAROL BROWNER: You raise a problem that I am very well aware of, having been as the head of the State DER responsible for running a large number of EPA programs, also having been, in essence, regulated by EPA. I've sort of been in the middle. I think that there are many things that need to be done. We need to give a great deal of recognition to those states who have taken the time to develop comprehensive environmental programs. We need to respect what they understand about their state. We need to allow that information to come into the decision making process.

MR. MacNeil: Ms. Browner also told the committee she thinks the federal government should consider helping states cover some of the costs created by EPA regulations. FINALLY - PATH OF HISTORY

MR. LEHRER: Finally tonight, the road Thomas Jefferson traveled to the White House. Bill Clinton will enter Washington Sunday in a caravan of buses from Charlottesville, Virginia, the official announcement proclaiming it to be the same route Thomas Jefferson took in 1800 for his inauguration. Our special correspondent, Roger Mudd, did some research and discovered that is not exactly the case.

ROGER MUDD: What Mr. Clinton will be missing is a slow and evocative trip through some of Virginia's loveliest and most historic countryside along roads once traveled not only by Jefferson but also by two other Presidents, James Madison and James Monroe. Despite the inaugural committee's earlier announcement, the Clinton route will be a far cry from the one Jefferson took to Washington 193 years ago. In the bitter cold, Jefferson left Monticello early in the morning of November 24, 1800. In the stable yards beneath Monticello's north pavilion, Jefferson's slaves harnessed his two-horse carriage. Accompanied on horseback by Davie Bowles, thought to be a freed black man, Jefferson headed down the mountain toward the north. His first stop, about 15 miles from home, was at Thomas Walker, Jr.'s mill along what is now State Route 22. He bought corn for the horses and paid about $1.25. Today Walker's Mill is being reconstructed. Jefferson than turned to the northwest and by late afternoon was approaching Montpelier, the stately home of James Madison. He knew Montpelier well. He had helped design parts of it. At the front entrance, the odometer Jefferson had installed on his carriage read 28 miles. So Jefferson spent his first night on the road here at Montpelier, a house now under restoration. Not only was it the logical place to stop, it was just a day's trip from Monticello, but also Jefferson obviously wanted to talk politics with his old friend, who would later become his Secretary of State. The next morning, November 25th, Jefferson followed the present Route 20 across the Rapidan River and took what was called the Carolina Road to Stevensburg, which was then the cultural center of Culpepper County. Today it's a crossroads village of perhaps 300. Presumably, Jefferson dined at Zimmerman's Cross Keys Tavern, which he called "an indifferent house." The local people point to this pale yellow building as the site. After dinner, probably by 5 in the afternoon, Jefferson reached Fleetwood, where he spent the night. Distance traveled from Montpelier, 31 miles. Fleetwood was the home of his friend, John Strode, a politician and a Revolutionary War arms maker. This house dates from the 1900s, but B.B. Mitchell, who lives across the road, says the foundation is original.

B.B. MITCHELL: Well, as far as I know, the house there now is one that was built around the turn of the century, around 1900, and it is built on the original foundation of the Strode home, built in 1800. The dependencies of the small buildings were built around the same time, probably as the Strode's home. They may have been used as slave quarters. They could have been used for that purpose. In that day and time, they had a great facility maybe as cooking areas, both smaller houses were there, but maybe not the privy. There is no evidence that Mr. Jefferson had privy to the privy.

MR. MUDD: Jefferson left Fleetwood the next morning, setting out east/northeast and fording the Rapihanick River at Norman's Ford, which is considerably deeper and swifter today than it was on November 26, 1800. Stopping at Elk Run Church, now called simply Elk Run, he bought oats for the horses at Shoemate's Tavern. What's there now is the Elk Run General Store, whose owner, Lonnie Neville, his dog, Bandit, and one of his customers are part of the village's population of 150, 150 if you push it. From Elk Run Church, Jefferson headed almost due north, and by nightfall had almost reached Manassas. Distance traveled from Fleetwood 33 1/2 miles. Jefferson's third night on the road he spent near this busy crossroads south of Manassas, at Brown's Tavern. There's no trace of Brown's Tavern now. Jefferson called it a "poor house," but he said it was run by "tolerable people." So poor that the next morning Jefferson waited until he reached George Newman's Newgate Tavern in Centerville to have breakfast. The tavern site is now an empty lot and was last used as a cornfield. And Centerville, less than 25 miles from Washington, is now almost part of Washington, with morning traffic, evening traffic, shopping malls, and in place of Newgate Tavern is Jake's Restaurant. Another 15 miles east along today's U.S. Route 29 brought Jefferson into the little town of Falls Church. Skirting the Falls Church, then only 32-years-old when he passed by, Jefferson stopped a few hundred yards down the pike at Col. John Wren's Tavern to buy a final round of oats for the horses. The family living in the enlarged and remodeled Wren Tavern says the original roof beams are visible in the attic. From Wren's, it was less than seven miles to the Georgetown Ferry, which ran across the Potomac River from the present Rosalyn on the Virginia side to the foot of 34th street in Georgetown. The ferry crossing cost the equivalent of $6.25. From the ferry slip, Jefferson followed what was to become "K" Street, across the newly- built bridge over Rock Creek, and then along Pennsylvania Avenue, past the barely completed White House. The plaster walls were still wet, and President John Adams complained he couldn't heat the place. Over the rough and rutted Pennsylvania Avenue Jefferson turned to the southeast toward Capitol Hill. Distance traveled from Manassas, 34 miles. So Jefferson's trip ended here, quietly without fanfare just two blocks from the capitol at his boarding house, Conrad & McMunn. It's now the Longworth House Office Building. The trip took four days and three nights, total cost, $62.30; $49.55 for food and lodging, $5 for tips, $7.75 for corn and oats. No buses, no Secret Service, no media. RECAP

MR. MacNeil: Again, the main story of this Monday, the United Nations Security Council met to discuss Iraqi violations of U.N. Resolutions. This morning 150 Iraqis illegally crossed into Kuwait to dismantle weapons warehouses there. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.