The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Kwame Holman and Elizabeth Farnsworth cover day one of the Senate debate over cutting taxes; World Bank President James Wolfensohn discusses the rebuilding of Kosovo; Jim Compton tells the story of homeless in Seattle;, and Terence Smith examines the discovery of how healthy cells become cancerous. It all follows our summary of the news this Wednesday.

NEWS SUMMARY

JIM LEHRER: The Senate today began formal debate over tax cuts. Most Republicans pushed an $800 billion bill similar to the one passed by the House last week. Most Democrats favored a version supported by President Clinton that contains $300 billion in cuts. A $500 billion bipartisan compromise plan was also in play. We'll have full coverage right after this News Summary. Federal Reserve Chairman Greenspan spoke about the tax cut issues today before the Senate Banking Committee. It was part of his twice yearly economic report to the Congress.

ALAN GREENSPAN: My first choice, as I've indicated previously, is to reduce the debt. My second choice is to reduce taxes basically because if we find that we cannot prevent ourselves in one form or another from spending the surplus, we are going to end up with rising spending, which will require rising taxes as a percent of taxable income, and there is a limit before that can go before it impedes economic growth.

JIM LEHRER: Greenspan also repeated his inflation vow that the Fed would act quickly to head off any sign of it in the U.S. economy. Most of the nation remained caught in an oppressive heat wave. At least 49 deaths have been blamed on temperatures in the high 80's, 90's and 100's. Central plains states from Montana to Texas expected the worst. The upper Midwest and Northeast looked for relief from showers. Temperatures in the 60's and 70's could be found only along the Pacific Coast, in the Rocky Mountains, and at the Northern Tip of Maine. Scientists announced today they had determined how normal cells turn cancerous. The research was conducted at the Massachusetts Institute of Technology, and was published in the journal "Nature." Experts said it could eventually lead to breakthroughs on prevention and treatment. We'll have more on this story later in the program tonight. The Surgeon General of the United States today declared suicide a serious public health threat for the first time. Dr. David Satcher called on a cross-section of the public, from school counselors to hairdressers, to watch for warning signs. He commented at an event in Washington also attended by Vice President Gore's wife, Tipper.

DR. DAVID SATCHER: We must reduce the stigma associated with mental illness that keeps so many people from seeking the help that could save their lives. The problem of depression, for example, is common in this country, and it is very common throughout the world, perhaps the leading cause of disability. So people should not be afraid or ashamed to seek help so that one can continue to be a productive person.

JIM LEHRER: Suicide is the eighth leading cause of death in the united states. 30,000 people took their own lives in 1997, the last year for which records were available. Doctors and patients are frustrated with managed health care, according to surveys released today. One in four patients said they had trouble obtaining the care they needed; nine in ten physicians said their work was hindered by HMO regulations. The surveys were commissioned by the Kaiser Family Foundation and the Harvard School of Public Health. It was a safe landing for the space shuttle "Columbia" just before midnight at Cape Canaveral, Florida. Electrical problems and a hydrogen fuel leak did not affect the touchdown. While in space, the astronauts launched the world's most powerful x-ray telescope into orbit. Air Force Colonel Eileen Collins was the first female commander of a space mission. She spoke to reporters at a news conference early this morning.

COL. EILEEN COLLINS, Commander, Space Shuttle Columbia: The space shuttle orbiter is just an amazing flying machine. It's -- it's a rocket, it's a spaceship, it's an airplane. It is just so versatile, and it's just such a wonderful ship. And as soon as we went subsonic, I took manual control and the shuttle flies so nice. It is just very smooth, it's very responsive. I was actually quite pleased. This is the first time I've actually flown the shuttle in the atmosphere. I've flown it on orbit but it's a very different machine on orbit.

JIM LEHRER: Still, Collins said she and her crew were eager to investigate what caused the problems during the flight. NATO's commander, Wesley Clark, will retire next April, two months early. The U.S. Army general confirmed the news today on a visit to Lithuania. He led the NATO air campaign against Yugoslavia. White House Spokesman Joe Lockhart said Clark was not being pushed out. There had been reports of his disagreements over strategy with the Clinton administration. Clark said an early departure would ease the change of command.

GEN. WESLEY CLARK: This is just a routine end of tour. I mean, people serve at the direction of their governments, and when a soldier's tour is over, it's over. I'm very happy to be wearing the uniform. I'm very proud of being in uniform, and I love my job and I intend to do it until the day I leave.

JIM LEHRER: Clark will be replaced by U.S. Air Force General Joseph Ralston, now the vice chairman of the Joint Chiefs of Staff. The bodies of 14 Serb farmers were buried today in their Kosovo village. Residents claimed the men were murdered last week by ethnic Albanians. We have more from Andrea Catherwood of Independent Television News.

ANDREA CATHERWOOD: A silent procession of tractors and tears. The Serbs of Gratsko buried their 14 dead -- the tractors bearing coffins of the farmers rounded up and shot in a field as they harvested wheat. The whole Serb community in Kosovo feels under threat. Theyfiled into the tiny graveyard under heavy British army presence, 100 soldiers now protecting the Serbs. Today the military police detained four Albanian men in connection with the massacre. At least one is from the same tiny village of Gratsko. This afternoon I met his brother. He tells me their Serb neighbors beat them and burned them out in April. They returned two weeks ago. He said their brother didn't kill the farmers, but they deserved to die. At least half, he says, were former Serb police responsible for murders and rape. All, he says, had blood on their hands. Whether the men buried today were farmers or killers, their murders heap hatred on top of hatred.

JIM LEHRER: And in Colombia today, rescuers finally reached the wreckage of a U.S. Anti-drug plane in a remote mountain area. They recovered four bodies. Five American and two Colombian soldiers were on the plane when it crashed last week. And that's for the News Summary tonight. Now it's on to the Senate takes up tax cuts; World Bank President Wolfensohn; homeless in Seattle; and news on cancer.

UPDATE - TAXING DEBATE

JIM LEHRER: Kwame Holman begins our coverage of the tax debate.

SEN. TRENT LOTT, Majority Leader: Mr. President, this morning as I came into the Senate chamber, the words to a song came to mind: "Oh, happy day." I almost feel like singing. This is a happy day.

KWAME HOLMAN: Senator Trent Lott obviously delighted in his role as majority leader today. This morning, he set the Senate on a course to do what the House did last week: Push through a package of tax cuts totaling $7 billion over ten years. The specifics of the cuts, however, are not identical. The House cuts include a 10 percent across-the board reduction in tax rates over the next ten years. The Senate plan reduces the bottom 15 percent tax bracket to 14 percent, and would phase into the bracket some income now taxed at 28 percent. The House plan phases out inheritance taxes; the Senate bill simply reduces them. The House plan reduces the so-called marriage penalty tax; the Senate plan eliminates it. And while the House package includes a reduction in the capital gains tax rate, the Senate plan does not.

SPOKESMAN: Distinguished Senator from Delaware.

KWAME HOLMAN: Finance Committee Chairman Bill Roth kicked off the debate explaining the need for tax cuts in its simplest terms.

SEN. BILL ROTH, Chairman, Finance Committee: Mr. President, I don't think there's any parent who hasn't had the experience of sending a child into a store with a $20 bill to buy a carton of milk, a loaf of bread or perhaps a dozen eggs, and the child returns with the few essentials, and in a demonstration of maturity and responsibility, returns the change to his or her parents. And there's no question who the change belongs to. Now like the child returning change for the $20, we must hand back the money, and we must do it in a broad-based way that is fair to those who provided the funds to Washington in the first place.

KWAME HOLMAN: Senate Republicans are expected to support the tax cuts overwhelmingly.

SEN. PETE DOMENICI, (R) New Mexico: Chairman Roth has produced a tax cut that starts small, ends up larger, reflecting economic conditions. He's produced a tax cut that targets help to those who really need it: Those with children in school; those with elderly and ill parents who need long-term care; those who are trying to save their own retirement independence instead of government reliance and many more items of that nature and that significance.

KWAME HOLMAN: The sheer size of the Republican tax cut, however, had Democrats lined up overwhelmingly in opposition. West Virginia's Robert Byrd displayed a Herb Block political cartoon to make his point.

SEN. ROBERT BYRD: Back for an indefinite run, "Rosy Scenario," whoopee. We've heard of her, haven't we -- Rosy Scenario and her long line of stunning surplus sugarplums. These are dollar bills -- Rosy Scenario throwing them all around.

SEN. PAUL WELLSTONE, (D) Minnesota: I cannot believe that with record economic performance I cannot believe surpluses that the Republican Party can come to the floor of the United States Senate with a proposal that calls for $800 billion of tax cuts, most of them flowing to our wealthiest and high- income citizens, with also a proposed 38 percent cut in Head Start, child care, community policing, cleanup of the environment.

KWAME HOLMAN: In fact, many members have acknowledged publicly the Republican tax cut package has little chance of becoming law. President Clinton has restated several times in the last two weeks his promise to veto any tax bill totaling more than $300 billion.

SEN. JOHN BREAUX, (D) Louisiana: We are headed for a financial train wreck that can and must be avoided. We are faced with a problem that most countries would only wish that they would have, and that is what to do with a $1 trillion surplus.

KWAME HOLMAN: This morning, a group of Republican and Democratic moderates gathered in front of the Capitol Hill press corps to introduce a compromise package of tax cuts totaling $500 billion over ten years.

SEN. JOHN CHAFEE, (R) Rhode Island: This bipartisan alternative is a good, solid package, which includes broad-based relief for middle-income taxpayers and families, incentives for savings and investment, targeted relief to encourage improvements in education, health care, the environment, housing and transportation. If we're serious about passing a tax cut this year, I believe this alternative is the right way to go.

KWAME HOLMAN: Whatever the plan, the Senate expects to complete work on tax cuts by Friday.

JIM LEHRER: Elizabeth Farnsworth takes it from there.

ELIZABETH FARNSWORTH: And we have four perspectives on tax cut legislation. Two Senate Republicans, Phil Gramm of Texas and Olympia Snowe of Maine; and two Senate Democrats, Richard Durbin of Illinois and John Breaux of Louisiana.

Senator Breaux, is this process headed for a financial train wreck, as you put it, or can a compromise be reached that the President could sign?

SEN. JOHN BREAUX: Unfortunately, Elizabeth, right now I think it's headed for the train wreck. But there's always hope and optimism that we can come together somewhere between my colleague on my left, Phil Gramm's $800 billion tax cut, and my colleague on the right, who would support, Dick Durbin, who would support an approximately $290 billion tax cut; there's got to be that middle ground. Both parties cannot continue to say my way or no way. If we continue to take those positions, we will have a financial train wreck, and I think it would be bad for the country.

ELIZABETH FARNSWORTH: Well, Senator, is the arithmetic against you? The Republicans have the vote to -- the votes to defeat the compromise that you favor, right, this bipartisan compromise?

SEN. JOHN BREAUX: And the President has the right to veto it, so under that scenario, we could pass the Republican bill and it would not get signed into law by the President. I think what we ought to do is go ahead and pass the Republican version but not go to conference, hold back, let us go to our respective states in August and listen to thepeople, come back and do Medicare reform, and then combine real Medicare reform with prescription drugs, with a reasonable tax cut that the President could sign that package.

ELIZABETH FARNSWORTH: Senator Gramm, what's your view on the possibility for a compromise?

SEN. PHIL GRAMM: Well, first of all, let me say that John Breaux and I are together on Medicare. We both were on the Medicare commission. We agreed on a proposal. Unfortunately, Bill Clinton killed it. In terms of a compromise we have a trillion dollar surplus that is not Social Security money. The President has proposed spending one trillion, thirty-three billion dollars. Somehow he thinks that by giving back $800 billion that we're jeopardizing the economy, whereas, if we let him spend every penny of it, we're not. So I'm willing to listen to any proposal, but the bottom line is that we have a total accounting of Social Security of a $3 trillion surplus -- giving 1/4 of it back to working people in tax cuts is not unreasonable. We're talking about a 3.5 percent tax cut over 10 years. It seems to me that it's the logical thing to do; it's the right thing to do. I'm sorry the President is not for it. But basically I wish he would say, don't give it back, let me spend it. But that's what his proposal is, but he doesn't quite ever fess up. So we have a distorted debate as if he would reduce debt, rather than spend the money. And so it makes the debate harder, but in the end I think people will get the facts straight.

ELIZABETH FARNSWORTH: Senator Snowe, you said today we must not let political posturing turn the discussion in to a "my way or the high way fight." Is that what you think has happened?

SEN. OLYMPIA SNOWE: Well, I think it's certainly moving in that direction; it's sort of what Sen. Breaux has just indicated about the train wreck, sort of like the good news is you see the light at the end of the tunnel, the bad news is, is the oncoming train. And that's sort of what we're facing right now because of the statements, the ultimatums, the veto threats that have been issued by the administration. We all agree on a tax cut, but it's a question at what level. So why not preserve the middle ground, the viability of a tax cut, rather than going to conference and the President vetoing the legislation, see what can be worked out so that the American people can get I think a well deserved tax cut. And so that's what we're trying to do with this bipartisan compromise, to demonstrate that we can achieve a consensus. We want to keep the door open to compromise and consensus, rather than saying it's an "all or nothing" proposition, and that we can't do anything about it. We'll each vote our own way, send it to the President, veto it. Well, what does that do for the American people? And I think a $500 billion tax cut is a great middle ground between the President's proposal and the Republicans' proposal and frankly, more prudent, given the fact we don't know whether or not these surpluses will materialize. After all, they're just projections. Somebody once called them a hypothetical jackpot. So I think we have to be more cautious in our approach in terms of how much we do for tax cuts and spending.

ELIZABETH FARNSWORTH: Senator Durbin, what do you think about that $500 billion compromise proposal? You back the $290 billion Democratic alternative.

SEN. RICHARD DURBIN: Well, it's amazing that I end up being the conservative on this panel, because I'm the one who believes that most of the surplus, if it ever materializes, should be spent on reducing the national debt and making certain that we invest it into Social Security and into Medicare. My colleagues here are anxious to give it away in tax cuts; many of them are good and some of them I could never support, going to the wealthiest in America. When Senator Gramm says that President Clinton wants to spend money, I think he ought to finish the story. The President wants to spend some of the surplus on Medicare, so that we don't end up raising premium prices and cutting services for the disabled and elderly. He also wants to make sure that we keep up on education on things like education, something which the Republicans have made no promise that they're going to do. And still the President says that we can have a targeted tax cut that will help working families, middle income families. I think you ought to consider that aside from all of the political figures who have spoken on this issue, the one person who is not political, who really has been credited with a major role in bringing about this economic recovery, Chairman Alan Greenspan, says that the Republican strategy of an $800 billion tax cut is exactly the wrong thing for the economy. It'll create inflation, raise interest rates, and make it tougher to pay home mortgages and business loans.

ELIZABETH FARNSWORTH: Senator Snowe --

SEN. PHIL GRAMM: Elizabeth, I'm sorry, but Alan Greenspan was before the committee I chair today. He said nothing of the sort.

SEN. RICHARD DURBIN: Last week he did.

SEN. PHIL GRAMM: He said the best thing is pay down debt. The second best thing is cut taxes, and if you believe that the surplus is going to be spent, you ought to give it back in tax cuts. And when the President has proposed 1 trillion, 33 billion dollars' worth of new spending and the surplus is $1 trillion, so he would actually have to plunder Social Security, you have got to conclude that this money is going to be spent if we don't give it back.

ELIZABETH FARNSWORTH: Senator Snowe, you touched on this a little already but why do you think it's been so difficult to come to a compromise bill? You know, some people have suggested that many in the House and Senate don't want -- and the White House -- a tax cut because it makes a campaign issue for everybody. Is that the main reason, do you think?

SEN. OLYMPIA SNOWE: Well, I hope not. You know, I'm sure that there are those who are interested in making a political statement, scoring political points as opposed to achieving good policy. That was one of the reasons why we decided to get together on a bipartisan basis to demonstrate that there is support for a tax cut. In fact, we're all agreeing that there should be a tax cut. I mean, the President is, Democrats are, House and Senate, both bodies have indicated support. So, you know, what is the difficulty in sitting down and negotiating a compromise? We're not even that far apart, frankly, on the policy issue so -

ELIZABETH FARNSWORTH: What's the answer that? What is the difficulty?

SEN. JOHN BREAUX: Well, Elizabeth, let me join in because I really think this is a key point. I mean, if we can't figure out what to do with a $1 trillion surplus, well then a pox on both our parties. I think there are a few in both parties who would rather have a political issue for elections in the fall than accomplishing something and arguing about who did it. I'd much rather be arguing about success and who did it rather than failure and whose fault it. I mean, there's got to be enough room for two parties to agree on what to do with a $1 trillion surplus. It's not an either/or situation.

ELIZABETH FARNSWORTH: Is that right, Senator Durbin? Can you see that?

SEN. RICHARD DURBIN: I've been around politics long enough to understand that we're probably headed for some sort of a compromise. But, keep in mind we're guessing on the economy and the state of the budget over a 10 year, 20 year, 30 year period of time. The economists who advise us frankly have trouble remembering their own Social Security numbers and yet they're telling us what it's going to look like in America eight or nine years from now. The people I speak to in Illinois and others really want us to focus on the bottom line, keep this economic recovery moving forward, creating good jobs and opportunities and pay down the national debt, make those your two first priorities. Tax cuts run a distant third.

ELIZABETH FARNSWORTH: Senator Gramm, do you think that Senator Durbin is right? Are you sensing that some kind of compromise is in the wind, or could this all be for naught? Could you pass a bill that the White House - that the President won't sign and this is just for naught?

SEN. PHIL GRAMM: I don't know in the end but I think it's important to remember that with the tax cut the Republican budget reduces the debt $200 billion more than the President's budget by CBO. Those are not my numbers. That's the non-partisan Congressional Budget Office. If I could do this my way, I would simply wait, have a presidential election and then have a tax cut, if people voted for one. The problem is, Elizabeth, we're already $21 billion over the spending caps in spending this year. The House is $30 billion over. Unless we give some of this money back, it's going to be gone by the time we have a new President because it's being spent. Dick talks about buying down debt. We are buying down debt with Social Security surplus, and everybody agrees on that, but there isn't any evidence we're going to buy down any debt with this general $1 trillion budget surplus, and if we're going to spend it, I'd much rather give it back to people because unlike Dick I don't believe government can spend it better than families can.

ELIZABETH FARNSWORTH: It sounds like, Senator, that there's not much wiggle room in your position.

SEN. PHIL GRAMM: Well, look, I'm willing to listen to any proposal but I'm not willing to listen to a President who while he's saying to us don't give this back to working people, it would be the end of the world. Yesterday it was going to be bad for the health of women, maybe today it's the black death is coming back if we give people a tax cut. But I could bear that if he were really reducing the debt. But knowing that he's trying to spend every penny of it, I just think he's disingenuous. I just think he's not telling the truth.

ELIZABETH FARNSWORTH: Senator Breaux, do you think this could all be for naught, that there really won't be any bill in the end?

SEN. JOHN BREAUX: Well, Elizabeth, I certainly hope -

ELIZABETH FARNSWORTH: Any law in the end?

SEN. JOHN BREAUX: -- I certainly hope that that's not the case. I think the American people are pretty tired of hearing both political parties blame each other for failure in Washington. They sent us here to get the job done and they understand that getting the job done means compromising and working out our differences, not just blaming each other for a failure. We can never say that it's my way or no way. And I think many times both parties are put in that position today. There's a reasonable compromise that can be worked out here, and a group of us have I think offered something in that direction.

ELIZABETH FARNSWORTH: And, Senator Snowe, what message would be sent it the American people, in your view, if something isn't worked out? I mean, some people might say that's the way the political system works; if there's no bill, it's just because there's not the support for it.

SEN. OLYMPIA SNOWE: I would like to surprise them and demonstrate the fact that we can agree on a major issue that is so significant to America's working families. I mean, that's what this is all about, to help them with their health care, with child care, with education, eliminating the marriage penalty. So this would help average working families. And that's what we want to do. I can't see where there should be political differences on that issue. I can see where it could differ on the size of the package in which we do so that we're more prudent, but frankly, we're not that far apart. So I hope that we can avoid the political posturing and do what's right for this country in this Congress, not wait until after the election.

ELIZABETH FARNSWORTH: And finally, Senator Durbin, any wiggle room in your position?

SEN. RICHARD DURBIN: Well, of course, there is, but keep in mind here, people want bipartisanship, but the 1993 Clinton budget plan that really turned the corner away from deficits and got the economic recovery moving was a partisan vote, not a single Republican supported it and it really has done a great deal of good for the country. I hope we can find a bipartisan way to come out of this and be able to say to the country, this economic recovery will continue.

ELIZABETH FARNSWORTH: And, what's your response to the question if there isn't one, it's just the way it's meant to be that the politics aren't for it now?

SEN. RICHARD DURBIN: Well, let's face it, the American voters will then have the choice in the next election. They will decide which party offered the best recipe for the future.

ELIZABETH FARNSWORTH: Okay. Well, thank you all very much for being with us.

JIM LEHRER: Still to come on the NewsHour tonight, World Bank President Wolfensohn, homeless in Seattle, and some cancer news.

NEWSMAKER

JIM LEHRER: Rebuilding the Balkans. Today the World Bank and the European Union announced pledges of $2.1 billion for more than 50 nations for the rebuilding program. I talked with James Wolfensohn, the president of the World Bank, this afternoon. He visited that area last week and will return for the Balkan rebuilding summit in Sarajevo with President Clinton and other leaders on Friday.

JIM LEHRER: Mr. Wolfensohn, welcome.

JAMES WOLFENSOHN: Good evening.

JIM LEHRER: Is it really going to be possible to rebuild Kosovo?

JAMES WOLFENSOHN: Well, it's going to be really possible to rebuild the physical aspects of Kosovo. I was there recently and you get a sense of the destruction of homes; infrastructure and the countryside is relatively untouched. I think the biggest problem will not be the physical reconstruction, it'll be the emotional and mental reconstruction.

JIM LEHRER: And is that the international community's responsibility too?

JAMES WOLFENSOHN: If you want peace, you've got to deal with people; you don't just deal with objects. And whether they take it as a responsibility or not, the success or failure of Kosovo is going to be the success or failure of building first economic help and then trying to heal the damage that's been done.

JIM LEHRER: Well, the economic help, there's this meeting today in Brussels, the first of series of meetings designed to raise the money to do the economic part. Were you pleased with the results today?

JAMES WOLFENSOHN: Yes, I was.They raised $2 billion in terms of commitments, and more important than that, they got an understanding of the needs immediately to take steps before winter to deal with the humanitarian questions and to get money into the hands of the U.N. administrator so that he can get the fabric of government starting.

JIM LEHRER: And is that where this money goes? I mean, you - the World Bank and the European Union are raising the money.

JAMES WOLFENSOHN: Yes.

JIM LEHRER: And what do you do with it?

JAMES WOLFENSOHN: Well, first of all, we have to get the final assessment of the damage, and then it's the wish of the people who give the money that we should try and restore the country both in terms of its physical aspects and to give it some sort of economic future because what you're conscious of when you get there is the fact that the country in a sense stopped, first of all, the people left and they're now coming back, but what we have to do is try and help them regain their lives. And the cause of the need for the immediate money is to establish some system of government. You must remember that Kosovo was never self-standing, and so we have to create that government structure, and that's in fact, what Bernard Kushner is doing on behalf of the secretary-general.

JIM LEHRER: I read also that we all need to remember that there is no economy in place in Kosovo, is that correct?

JAMES WOLFENSOHN: Well, it's an agricultural economy, particularly. It also has a couple of good power stations that exported power. And the big cooperative which they had there in the mining field is no longer functioning. So there is no immediate employment available for people in the industrial sector. All that needs to be going. But you will remember that it is part of Yugoslavia, and much of its trade and its dependence was on Serbia and Montenegro. So we're taking a small part of the former Republic of Yugoslavia and trying to imagine it as a self-sustaining country; that's not easy.

JIM LEHRER: What struck you the most on your --

JAMES WOLFENSOHN: The single most visible thing to me was the fact that as I flew over the country in a helicopter you were aware of damage, but it's an eerie sort of damage - 68,000 homes were destroyed but you don't see any marks as you saw in Bosnia of shellfire or bombing. This is the representation of homes where people have been thrown out individually, where it's as though people came in, get people out of the houses, torched the houses, but the streets are left untouched. The light fittings are still there on the streets. The countryside is unaffected. So it's very eerie. You get a sense that people have been singled out, but that it has been hand-to-hand destruction. And I found it very uneasy as I went through the destructed areas.

JIM LEHRER: Several people on the program - U.N. officials and others - have said from the very beginning once the bombing began and there was peace again that the Kosovars, themselves, in other words, the ethnic Albanians themselves are really ready to do the bulk of the work in rebuilding their country. Did you get that feeling as well?

JAMES WOLFENSOHN: Well, they not only are, but they're already doing it. I went to the former camps in Macedonia and Albania. And as they leave the country, they're given plastic sheets and they're given stuff that can help them survive for a month. And now if you go to the homes that I visited, in many of them you have a tent outside, people are living in the tent, and you see them already using the plastic sheeting, reconstructing their homes, trying toget themselves ready for winter. This is a - I'm told by people who did the same sort of work in Bosnia that there is a distinct difference between the way the Kosovars are reacting in a highly positive and self-reliant way.

JIM LEHRER: It's one thing to raise the money, which is what the World Bank is doing. It's another to give it to somebody. And who is going to make sure it is spent properly, in other words, that the guy that's got the plastic tent who wants to build something behind the plastic tent -- how is that going to be managed?

JAMES WOLFENSOHN: Well, we're going to be very dependent on the U.N. special representative and the five governors that he has in the region. And so we will be working with him. KFOR, which is the force that is there, is already doing a terrific job and needs some assistance in terms of the reconstruction and the work that it's doing. But broadly it'll be through the U.N. representative and on individual projects, which will be individually managed in the way in which we did that in Bosnia. And in those cases we had audit procedures and procedures for tendering and that sort of thing. And I believe that we will try and do the same sort of thing in Kosovo.

JIM LEHRER: I want to come back now to what you said earlier. The physical, the economic thing is one thing, but there's also mental damage. And you said that when you were on your trip, in fact, when you were there last week. What in the world can be done about that?

JAMES WOLFENSOHN: Well, we can't right centuries of distrust. But the damage of this recent period is palpable. I was in the streets with a number of people that I was talking to, and I went in the schools. In the schoolroom that I went into, 20 percent of the kids looking happy had a sort of fearful look in their eyes in relation to us as strangers coming in. I was told 20 percent of the kids in the class didn't know where their parents were. This is a dreadful problem in this particular classroom with these particular kids. A woman that I was with, a doctor, had seen her house destroyed and her uncle who was a professor taken out and shot. She's there, anxious now, trying to build relations with the Serbs and said that she was trying to do this. But she was underlining how difficult it is with these images in your mind. And I think that is what has caused this terrible bloodshed that occurred just days ago in relation to the Serbs that were shot. I think that there is a need for a period of healing, the number of people that are being killed or tortured is clearly down, but the residue of that terrible experience is still there.

JIM LEHRER: Did you leave there after your trip and all the things you have read and all the briefings you have had - and from the very beginning the World Bank has been involved in this -- are you hopeful that - particularly after you left there that this thing can be put back together, that all of those mental things, as well as the physical things can be healed?

JAMES WOLFENSOHN: Well, I think you have to be hopeful because one needs to be hopeful, and there will be a meeting in Sarajevo tomorrow that will deal with trying to give some form of support from the donor countries. But I think you have to say it will take time. This is not an instant fix. This is not something where you write a check. This is something that will require meticulous work over a period of time. And it'll require time itself for the healing. And I would say it will require economic activity, because in the absence of economic activity, in the absence of hope, it is extremely unlikely that people will come together and coalesce. So I think we have quite a job to do, but we need to have understanding, and I think we need to be very sensitive to the fact that help is required for those kids, help is required for many people that have been damaged. And this is as much a human crisis as it is a financial crisis.

JIM LEHRER: Now, the Sarajevo meeting, you're going with President Clinton and the other world leaders to this --

JAMES WOLFENSOHN: Yes.

JIM LEHRER: -- in Sarajevo. What's the point of that? What is the bottom line for it?

JAMES WOLFENSOHN: Well, there is a so-called stability pact, which has been agreed to by the countries in Southeast Europe with a number of other - the European Union and other countries that are interested -- in order to try and develop a cohesive network of countries and a framework of peace and economic security in the region. And the purpose --

JIM LEHRER: Not just Kosovo but the whole --

JAMES WOLFENSOHN: These are all the countries in the region.

JIM LEHRER: Yes.

JAMES WOLFENSOHN: The adjacent countries. And the purpose of the meeting is to demonstrate in a very visible form the support of the community for that and to indicate, as I believe they will, to the former Republic of Yugoslavia that with democratic leadership they will, of course, be much welcomed into that stability pact.

JIM LEHRER: Do you support the U.S. position that there will be no aid to Serbia, to the old Yugoslavia, as long as Milosevic is in charge?

JAMES WOLFENSOHN: Well, I believe that's a sensible approach. As president of the bank, I'm not supposed to have a political view. I am concerned about the humanitarian aspect about how many people will be facing the winter without heat, about how many refugees there will be in Serbia. But there is already an indication in the communiqu s that for humanitarian assistance there is some flexibility, how much flexibility we will need to know, but you'll remember, Jim, that when this started, there were already 500,000 refugees from the Bosnian situation. And the Russian estimates, I gather, are now that there's something more than a hundred fifty, two hundred thousand additional refugees. This is a situation which will need to be watched very carefully, because with the approach of winter, whether you're Serbian or whether you're Kosovar, you can freeze. And that certainly causes humanitarian problems we need to deal with.

JIM LEHRER: As a practical matter, though, can the World Bank step away from that -- the political part of that thing and step in and try to help the Serbs, who may be freezing?

JAMES WOLFENSOHN: Well, we can't do that without the approval of our shareholders. But I believe the shareholders are looking at the - at a very difficult decision in terms of the humanitarian. They want to go only to the level of humanitarian and not to the issue of reconstruction. And I think that they do need to keep the pressure on Milosevic in terms of ensuring that there is a return to a more democratic form of government.

JIM LEHRER: But, as a practical matter, can there be a real reconstruction of the Balkans without a reconstruction too of Serbia?

JAMES WOLFENSOHN: I think it's essential, and I think that's one of the reasons for the Sarajevo conference, that Yugoslavia, Serbia, return to the family of nations because enduring peace can only come when you have Serbia within that framework.

JIM LEHRER: Mr. Wolfensohn, thank you very much.

JAMES WOLFENSOHN: Thank you very much.

FOCUS - HOMELESS IN SEATTLE

JIM LEHRER: What Seattle is doing about the homeless. Jim Compton of KCTS-Seattle reports.

JIM COMPTON: Californians Mike and Angela Driskell parked their battered camper just a block from Seattle's new half billion-dollar baseball stadium, which is due to open in July. While they look for jobs, they live beside railroad tracks in a dangerous part of the city with their two-year-old son and infant daughter. How old is Elizabeth?

ANGELA DRISKELL, Homeless Mother: Six weeks.

JIM COMPTON: Six weeks. How's she doing?

ANGELA DRISKELL: She's doing wonderful.

JIM COMPTON: Though they found housing two days later, their story symbolizes Seattle's frustration. The city estimates that there are about 5,500 people homeless in Seattle and that no more than half of them find beds in emergency shelters. That means that at least 2,000 people sleep out every night. The city spends $8 million a year on services to the homeless, mostly for shelter. The lobby of city hall and the basements of county buildings are opened in cold weather. But homeless numbers are mounting, and merchants complain their presence hurts business. For several years, the city attorney has confronted street people with firm enforcement of laws banning aggressive panhandling, sitting or sleeping on sidewalks and sleeping in parks.

MARK SIDRAN, Seattle City Attorney: We have a lot of people who -- on the street who are addicted to alcohol or drugs or are mentally ill, and these people need help, not just shelter. We need to be able to offer them treatment and services and if necessary, I think, intervene in their lives.

JIM COMPTON: But now a municipal judge has challenged Seattle's policies, saying that she will not allow convictions of the homeless under trespass or nuisance laws until the city provides them with a place to live.

HON. JUDITH HIGHTOWER, Municipal Judge: What I said was when the city can provide enough shelters, then the city can prosecute the homeless.

JIM COMPTON: Judge Judith Hightower has called the aggressive enforcement a campaign to drive the homeless from the city.

HON. JUDITH HIGHTOWER: We keep pushing homeless people out of areas that they have found shelter in. We keep destroying or, you know, in the name of progress and, you know-- I understand, you know, new business, new housing developments, I mean, the bell town area-- we keep moving people further and further out of areas where they had space.

JIM COMPTON: But city attorney Mark Sidran rejects her approach.

MARK SIDRAN: Judge Hightower is one judge, and she's entitled to her opinions.

JIM COMPTON: Sidran says that in some cases the law must be used to intervene in the lives of street people.

MARK SIDRAN: I'm the city prosecutor. I'm not the mayor and I'm not the county executive. So my primary responsibility and span of control has to do with these law enforcement issues. I believe very much that the criminal justice system also has opportunities to basically try to coerce people into doing what may be in their best interest to do.

JIM COMPTON: Homeless advocates like Anitra Freeman say battle lines are being drawn between helping or arresting the homeless.

ANITRA FREEMAN, Homeless Advocate: People are being ticketed in the parks just for being homeless. If you walk through the parks with a backpack and a three-piece suit, you will probably not be ticketed. If you walk through the park looking ragged and wearing a backpack, you will probably be ticketed for camping, whether you were doing it or not.

MAYOR PAUL SCHELL: These are our urban refugees and how can we not help them?

JIM COMPTON: Mayor Paul Schell says Seattle is victim of its own success.

MAYOR PAUL SCHELL: In many ways we are probably the richest city in the country right now on a per capita basis, especially if you include our high-tech center on the East side of the lake, but the fact that we've got longer food lines than we've ever had before, more people looking for places to stay, everybody's paying the cost of success in increased housing prices, increased transportation congestion, and this can't be. We need to find a way to be sure that everybody has a chance to share in the prosperity.

JIM COMPTON: For almost a decade, homeless advocates have been challenging Seattle to create some sort of transitional facility to get the homeless off the streets and into jobs and permanent housing. When the city turned to a consultant to evaluate the problem, he was told there is a homeless emergency. And the consultant reported that the concept of temporary housing was not just feasible, but urgently needed.

DAVID BAMBERG, Architect: Last night 2,000 people slept out on the street; tonight 2,000 will sleep out. And if this were -- if this were, you know, Kosovo or Oklahoma a after the tornado, this is an emergency.

JIM COMPTON: Consultants looked at putting the homeless in surplus cargo containers or under a big plastic tent like a circus big top. Another plan to house the homeless in tents has become known as the tent city option. Because of its overtones of depression-era Shanty Town, the so-called Tent City Plan has become a test of the city's willingness to bend the rules on behalf of the homeless. Architect Jan Gleason, who led the study, said some in city government just can't swallow the idea that Seattle might have some people living in tents.

JAN GLEASON, Architect: It's unsightly. It has bad connotations and memories from other difficult times. I think it's also an issue that cities would like to ignore the fact that there are so many homeless exist.

JIM COMPTON: Seattle has rich history of homeless encampments. At the height of the Depression, Seattle had one of the nation's largest Hoovervilles, a self-policed and self-governed colony of 500 shacks that became a city within a city. Seattle Historian Paul Dorpat says Seattle embraced its homeless.

PAUL DORPAT, Seattle Historian: They had hundreds of people living in these sites and they were -- after there was initial resistance in the early part of the Depression, basically the city accepted it and even helped to service it. They had their own sheriffs, their own mail system, and especially among progressives, it was seen as a kind of noble experiment in self-help.

JIM COMPTON: Six decades later, new homeless encampments have risen in Seattle to demand that the city provide more housing. Seattle's homeless advocates first challenged the city to furnish more shelter in 1990 by camping out in a muddy field near the Kingdome. And in 1998, 40 squatters occupied a vacant field overlooking the downtown financial district and appealed that they be allowed to stay on public property. City officials ordered the tent city bulldozed and five were arrested. Although the charges were dismissed last month, an attorney for the protestors said a potent legal issue is emerging.

STEVE MUELLER, Attorney for Homeless Activists: One of our arguments is the city's pattern of law making makes it so that you could argue that people aren't allowed to be anyplace at particular times. They're not allowed to be in parks, they're not allowed to be on the streets at certain times, they're not allowed to be in other places at certain times. So if you're not allowed to be anyplace, where is it legal to be?

JIM COMPTON: Judge Hightower warn that unless there is shelter available, enforcing trespass and nuisance laws against the homeless is dangerously punitive.

HON. JUDITH HIGHTOWER: This is not an appropriate way to use the criminal justice system. The crime of criminal trespass, being in an area he was not allowed to be in, that is a crime technically. But do you -- do you think the legislature really intended for people to go to jail because they had nowhere else to stay?

JIM COMPTON: City Attorney Sidran says that talk about housing is a red herring.

MARK SIDRAN: We've allowed the issue to be framed as an economics of housing issue and not as the public health issue that I think it is. We have everywhere in Seattle signs in the window that say "Help Wanted" and people on the street holding signs that says "Please Help." Now, there's something wrong with this picture. And I think what's wrong with it is that public policy around the issue of homelessness has been captured by the rhetoric of the economics of housing.

JIM COMPTON: Meanwhile, George Olebar, who has been on the streets for two decades, has an agreement with a Seattle business that he can sleep in their doorway after hours if he leaves it clean. He says he would turn down a free apartment if offered.

GEORGE OLEBAR: Everyone that stays here know this is George's spot. Each of us got a different doorway, each and every one of us that are here. We've all got our certain doorways and if I come here and there's somebody here at night, I just tap him and I tell him, "you're in my bedroom."

JIM COMPTON: Now Seattle's principal homeless advocacy groups have committed themselves to erecting another tent city. Alert to the political timing, they say it will coincide with the World Trade Organization summit here in November when the city will welcome many world leaders. A spokesman for the homeless said they hope the city's support can be negotiated by that time, but they will go ahead in any case.

FOCUS - BREAKING THE CODE

JIM LEHRER: New cancer research, and to Terence Smith.

TERENCE SMITH: That research is being described as a breakthrough in understanding how normal human cells become cancerous. Scientists report in the new edition of the journal "Nature" that after 15 years, they have successfully created a human tumor cell. Researchers took a normal human cell, added genetic flaws, and created a cancerous cell. To explain how and why that's important we're joined by one of the study's authors and head of the lab that did the work, Robert Weinberg. He is with the Whitehead Institute at the Massachusetts Institute of Technology. Professor Weinberg, welcome.

ROBERT WEINBERG: Thank you for having me.

TERENCE SMITH: Tell us, if you will, in layman's terms, what your team discovered.

ROBERT WEINBERG: We were interested in how cancer begins, and if one looks at human tumor, one realizes it's a conglomerate of many cells which are growing, multiplying out of control. That focuses our attention on those individual cancer cells and why they're doubling at times when, by all rights, they should be silent and shouldn't be multiplying at all. If you look inside the cells, you'll see that they have a number of damaged genes. And these damaged genes are telling the cells to grow when they shouldn't be growing. These damaged genes or mutated genes, are sometimes called uncle genes or tumor suppresser genes. They're the regulators that orchestrate the proliferation of the cell. For many years, we've been trying to figure out how these damaged genes force a normal cell to become a tumor cell. The problem, however, is that if one looks at human tumor cells, as isolated from patients, these cells have an unknown number of damaged genes, and so we've been hard-pressed to enumerate all of the genetic damage that is required to convert a normal human cell into a cancer cell, into a tumor cell. But now in recent years, we've learned the identities of some of the critical genes and finally, we've been able to transform a normal cell into a cancer cell, shedding light on how cancer originates within the body.

TERENCE SMITH: Why is that important to learn?

ROBERT WEINBERG: Because if we want to cure cancer one day, we need to know how it begins. Without knowing the details of the damage inside the cell, we'll never be able to develop cures that are totally effective. If you don't understand a disease, you can't really cure it effectively.

TERENCE SMITH: Now, there are some 110 different kinds of cancer. Which tumors were you working with?

ROBERT WEINBERG: We happened to be working with connective tissue cells and cells from the kidney. But we believe that what we learned about these two kinds or cells should be applicable to a variety of cells throughout the body.

TERENCE SMITH: You mentioned yourself that scientists have been working on this for years. What made it suddenly possible to break through and get this new information?

ROBERT WEINBERG: The really important breakthrough in this area was a discovery several years ago of a gene called telomerase. That represents a critical ingredient in this cocktail of genes which must be altered within a cell in order for it to become transformed from fully normal to becoming a cancer cell. Without that gene in the cocktail, it would not have succeeded.

TERENCE SMITH: What -- I suppose the most fundamental question here is what makes a tumor grow?

ROBERT WEINBERG: What makes a tumor grow is this suite of damaged genes inside a cell, which tell the cell to grow unrelentingly, in contrast to what happens in a normal cell, where the normal genes tell the cell to remain silent and not to multiply.

TERENCE SMITH: You mention that this has to do with the origins of cancer, rather than specifically therapy for it. But might the information help lead to therapy for it?

ROBERT WEINBERG: No doubt it will, over the next decade. Not right away, but over the next decade, because now we can begin to construct a variety of different cancer cells, each with a different group of damaged genes in it, and begin to understand how these damaged genes allow the cancer cell to respond to certain kinds of therapy, or to be resistant. Right now, we really don't understand the rules that determine whether or not a tumor will be responsive to a specific kind of therapy. In the future, we can begin to lay out a specific set of rules, which tells us in advance, in a predictive way, whether cells will respond or will not respond to the kind of therapy we'd like to apply to the tumor.

TERENCE SMITH: So instead of using a sort of double-barreled shotgun approach like chemotherapy, you would do something much more targeted.

ROBERT WEINBERG: Exactly, precisely. Right now chemotherapy is a bit of witchcraft, in the sense that we don't always know how it works, why it works, and if it does work, exactly what the biochemical basis of that success was. In the future, we hope to convert the whole issue of therapy more into a science, rather than what it is right now, which is bit of an art.

TERENCE SMITH: In theory, I suppose this could open up other avenues of research. It could be replicated with other cancers, et cetera.

ROBERT WEINBERG: Well, in fact, one should be able to make a wide variety of different cancers, and these kinds of cells should learn us -- should allow to us learn about a new area of cancer research that we don't know much about yet, and that is how cancer cells, which start at one point in the body, how they begin to spread elsewhere: The process of metastasis. Right now we don't really understand very clearly how cancers spread, and these cell which don't get spread, the ones we've made, can be used as very useful reagents with which to develop information on the process of metastasis.

TERENCE SMITH: So in very simple terms, once again, if you know how and are able to actually create a cancerous cell, in theory, you can walk back the process in order to learn more about it?

ROBERT WEINBERG: Exactly. We hope to be able to list with great precision the molecular defects inside a cell, which enable it to become a cancer cell, which enable it to grow as a malignant cell. So that one day, maybe a decade from now, we'll be able to look at a cancer cell and say these are the precise biochemical and molecular defects which cause it to grow abnormally. Until now, that's been an unreachable goal.

TERENCE SMITH: You know, we have all witnessed and heard for years about the war on cancer. Put this in that context for me. Is it a battlefield victory? Is that what you'd call it?

ROBERT WEINBERG: Well, it's a step forward. There's still many steps ahead of us. But the fact of the matter is there have been dramatic advances over the last 20 years. It's not as if we know a little bit more than we knew 20 years ago, we know an enormous amount more than we did 20 years ago. Indeed, in the mid-1970's, we really had no clear idea about how cancer begins, and now we have a very clear view of it, in many of its details.

TERENCE SMITH: This must be quite a moment for you and for your team, having worked on it so long.

ROBERT WEINBERG: Well, in fact, this work is the culmination of work from many different laboratories -- the synthesis of research from dozens, indeed hundreds of laboratories across the world, which fed in different ways into this work. It's a step forward, and I believe that it will lead to yet other steps the future.

TERENCE SMITH: Did you find yourselves excited by this notion when you came upon it and when you were able to fully categorize it?

ROBERT WEINBERG: Yes, we did, because it was satisfying to be able to do something that we had failed for so long to do-- that is to create a cancer cell out of a normal human cell, something which seemed impossible for so many years.

TERENCE SMITH: So a step forward, but many more steps to go.

ROBERT WEINBERG: Indeed.

TERENCE SMITH: All right. Thank very much, Professor Weinberg.

ROBERT WEINBERG: Thank you for having me.

RECAP

JIM LEHRER: Again, the other major stories of this Wednesday: The senate began formal debate on a plan to cut taxes by $800 billion. At least 49 deaths have now been blamed on a nationwide heat wave, and suicide was declared a major public health threat by the Surgeon General of the United States. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.