The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, the Washington showdown and shutdown. Kwame Holman has a report. Elizabeth Farnsworth talks shutdown specifics, and four freshman House members debate. Campaigning in cyberspace. John Dickerson of "Time Magazine" reports, and the struggle for the ideological soul of the Democratic Party. Margaret Warner interviews Al From and Robert Kuttner. It all follows our summary of the news this Monday. NEWS SUMMARY

MR. LEHRER: The Washington stand-off over the budget remained in place today. The Senate sent the stop gap spending bill to the White House where the President vowed to veto it, and if he does, the government runs out of money at midnight and a partial shutdown of government services begins tomorrow. The President already exercised his veto power once today. This morning, Mr. Clinton did it to legislation that would extend the debt limit. The veto was prompted by add-on provisions he did not like. Here's what he said at the morning veto.

PRESIDENT CLINTON: Congress has said it will pass emergency legislation to keep the government going and paying its bills only if we increase Medicare, cut education, cut the environment, take other acceptable steps--unacceptable steps. I know the American people want us to balance the budget with common sense and without bitterness, to drop the extreme proposals and get to work.

MR. LEHRER: Republican Congressional leaders stuck to their guns too. Senate Majority Leader Dole told reporters this afternoon the President cared more about keeping spending levels high than reducing Medicare costs. House Speaker Gingrich claimed Republicans were ready to talk to the President.

REP. NEWT GINGRICH, Speaker of the House: If they do veto it tonight, we'll be in late, we're going to try to find a way to be helpful. We would like to keep the government open. Again, our goal is to get to a balanced budget and keep the government open simultaneously. But, frankly, this kind of negotiating in the press is not a very helpful way to try to solve the problem.

MR. LEHRER: The Senate and House will be standing by until midnight to take any further action. Thousands of federal workers will be furloughed if no stop gap spending bill is approved. We'll have more on the story right after this News Summary. A bomb killed six people and injured at least sixty others in Saudi Arabia today. Five of the dead and more than half of the injured were Americans. The blast destroyed a building housing American and Saudi military personnel in the capital of Riyadh. Two groups have claimed responsibility for the attack. The U.S. ambassador to Saudi Arabia said neither claim could be verified. President Clinton said the U.S. would devote an enormous effort to find those responsible for the bombing. He offered his condolences to the victims' families during a speech to the Democratic Leadership Council.

PRESIDENT CLINTON: Our thoughts and prayers are with the victims and their loved ones at this time of their loss. We owe it to them and to all of our citizens to increase our efforts to deter terrorism, to make sure that those responsible for this hideous act are brought to justice, to intensify and pressure the isolation of countries that support terrorism.

MR. LEHRER: The President has dispatched federal bomb and evidence experts to Saudi Arabia to investigate the attack. Israeli troops pulled out of the West Bank town of Janine today. Crowds cheered Palestinian and Israeli police exchanged control. Janine is the first West Bank town to come under self-rule by the accord signed by Yitzhak Rabin and Yasser Arafat in September. The handover was supposed to take place next weekend. It was moved up to signal Israel's commitment to its agreements with the Palestine Liberation Organization. Also today, Israel banned Jewish immigrants identified with Jewish terrorist groups from settling in Israel. A Nigeria Airways plane crashed and burned in Northern Nigeria today. One hundred and twenty-nine people were on the plane, seventy-seven are presumed dead, fifty-two escaped before the jetliner exploded on the ground. This is the fourth crash of a Nigerian airliner since June. Sec. of State Christopher will return to the Bosnian peace talks in Dayton tomorrow. A State Department spokesman said he will stop for a one-day meeting with the Balkan leaders on his way to an economic summit in Japan. On Sunday, and its rebel Serbs agreed to the peaceful reintegration of Eastern Slavonia. The much-contested strip of land is located on the border between Croatia and Serbia. It has been controlled by insurgents since 1991. And that's it for the News Summary tonight. Now it's on to the big Washington stand-off, campaigning in cyberspace, and what now, Democrats? FOCUS - HIGH NOON

MR. LEHRER: Neither the President nor the Republican Congressional leadership blinked. The result is a budget stand-off and a likely government shutdown, among other things. Kwame Holman begins our lead story coverage.

MR. HOLMAN: This morning, it appeared lawmakers in Washington didn't have a prayer of resolving their budget impasse, but in a sense, that's all they had.

DR. LLOYD OGILVIE, Senate Chaplain: Almighty God, we ask you to bless the negotiations of this day, help the President and the leaders of the House and Senate to combine confrontation and compromise as they work together to find a solution to the present deadlock.

MR. HOLMAN: And it appeared nothing short of divine guidance would do the trick. President Clinton set the tone early in the day when he flatly rejected the Republicans' proposal for extending the debt ceiling. That legislation would allow the government to borrow money and ensure it wouldn't default on upcoming loan obligations.

PRESIDENT CLINTON: It would allow the United States to pay its debts for another month, but only at a price too high for the American people to pay.

MR. HOLMAN: The President said he was rejecting the legislation because it would prevent the Treasury Secretary from using government trust funds to avoid future borrowing crises. He said he also would veto a second piece of legislation that would fund the government past midnight tonight because it contains a provision cancelling a reduction in Medicare Part B premiums scheduled to take effect January 1st.

PRESIDENT CLINTON: This legislation is part of an overall back- door effort by the Congressional Republicans to impose their priorities on our nation. Here is what is really going on. Last Spring, Speaker Gingrich said he and his new Republican Congressional majority would force me, the Congressional Democrats, and the American people to accept their budget and their contract by bringing about a crisis in the Fall, by shutting down the government and pushing American in default unless I accepted their extreme proposals. In this way, the Congressional Republicans sought to get around the United States Constitution, which gives the President the power to veto measures not in the public interest. They are now implementing the strategy Speaker Gingrich told us about last Spring, and because I refuse to go along with it, they say I am refusing with them to solve these short-term problems.

MR. HOLMAN: House Speaker Newt Gingrich did not respond directly to the President. In fact, he sounded somewhat optimistic when he spoke this afternoon at a Washington conference.

REP. NEWT GINGRICH, Speaker of the House: Over the next few weeks we are going to get this government back on the right track, and we're going to give our children a better country, with lower interest rates, with lower taxes, with more jobs, with greater take-home pay, and with better opportunities. That's what this is all about, and we need your help to get that message across. Thank you, good luck, and God bless you.

MR. HOLMAN: Despite the doomsday predictions of a government default, Treasury Sec. Rubin says he's taken interim steps that will allow the government to meet $102 billion in interest payments due Wednesday and Thursday, but as of this evening, it appeared that a midnight shutdown of some government operations is inevitable. On the Senate floor late this afternoon, Republican Leader Robert Dole said the President keeps adding to his list of objections.

SEN. ROBERT DOLE, Majority Leader: It seems to me we have no other choice. We passed the resolution. I want to thank my colleagues on the other side for clearing the resolution, and we would hope that as we speak, it's on the way to the House and will soon be on the way to the White House, and if the President should deem it necessary to veto it, that then he would be willing to sit down with us. We are the leaders, and we would be happy to try to work it out before midnight to avoid a shutdown.

SPOKESMAN: The House will be in order.

MR. HOLMAN: And on the floor of the House, members tried their best to show they were on the side of the people.

REP. THOMAS DAVIS, [R] Virginia: Mr. Speaker, I'm as frustrated as members, I think, on both sides of the aisle with the impasse we're currently facing between the President and the Congressional leadership. They have an old saying that when the elephants fight, the grass gets trampled. In this case, people getting trampled are your federal employees who've been out there every day, doing the job that the President and the Congress have asked them to do. And in no way should they be the ones to pay the price, just because we in the Congress and the President can't get our acts together and get on with the business of governing.

REP. PATRICIA SCHROEDER, [D] Colorado: This is tragic. This makes me terribly angry. But, of course, members of Congress will get paid. That is outrageous too. I mean, I can't believe that the leadership of this House has not stopped that nonsense and done it fast.

REP. RICHARD DURBIN, [D] Illinois: I've got a solution to this problem, and the solution is very simple. It's HR 2281, doesn't even take up two pages. It's a bill I introduced in the House, Sen. Barbara Boxer introduced in the Senate. It's very simple. It says, no budget, no pay. It basically says to members of Congress if you can't keep government in operation, if you want America to default on its national debt, why should you be paid? You have failed in your responsibility as members of Congress elected to this body.

MR. HOLMAN: Meanwhile, federal workers in Washington and around the country left work this evening knowing they're expected back tomorrow morning but understanding they might be asked to turn around and go right back home.

MR. LEHRER: What exactly happens after midnight tonight is the next question. Elizabeth Farnsworth pursues the answers.

MS. FARNSWORTH: I'm joined by John Koskinen, the deputy director for management in the Clinton administration's Office of Management and Budget. Thanks for being with us. How did you decide who should be furloughed and who shouldn't? Do you have any guidelines you follow?

JOHN KOSKINEN, Office of Management and Budget: The determinations were made by the agencies, depending on their own circumstances. They looked at the guidelines presented by the attorney general in an opinion about who is an excepted position and who is going to work. Those plans were then submitted to OMB, and we reviewed them primarily to make sure that there was consistency across the government, but the plans, themselves, are specifically designed and adopted by the agencies.

MS. FARNSWORTH: But this is something that's actually provided for in the Constitution, is it not?

MR. KOSKINEN: Yes. The Constitution provides that the government will make--shall make no expenditures or incur any obligations without an appropriation having passed. So that's the requirement. Then there is a statute, the Anti-Deficiency Act, that to protect the government and the Treasury against over-obligation of funds specifically provides that without an appropriation, there shall be no action at all taken by the government.

MS. FARNSWORTH: So can you give us a sense of who will be furloughed and who won't. For example, let's talk about some specifics, federal courts.

MR. KOSKINEN: Well, courts will operate under their Article III of the Constitution, rights to continue to function. The Anti- Deficiency Act makes the determination that everyone is, in effect, furloughed unless they are involved in--and there is an exception for those involved in emergency actions to protect imminent threats to life or property. So that's the standard that the agencies had to apply. Now, if you look at across-the-board, the obvious people in protecting life or property obviously the police, so the FBI, various law enforcement agencies of the government will be functioning. Those managing prisons will function. The Customs Department will continue its work at the borders, as will the INS.

MS. FARNSWORTH: And what about state parks?

MR. KOSKINEN: On the other hand, state parks will be closed. State monuments will be closed. And a wide range of government services will not be provided.

MS. FARNSWORTH: Give us a sense of how many civilian federal employees there are and how many are likely to be furloughed, of course, if there's not some agreement tonight. There could be an agreement. We're assuming that at this moment--

MR. KOSKINEN: That's right.

MS. FARNSWORTH: --for this discussion there's no agreement.

MR. KOSKINEN: There are about a million, slightly over a million, nine hundred thousand federal civilian employees. Of those, the expectation is approximately eight hundred thousand will be furloughed. Another 200,000 have funding. The Agriculture Department Appropriation Bill was enacted, so the Agriculture Department will continue to operate. And there are other programs, specific programs that have forward funding. But that means that almost a million federal employees will be in the excepted class, because they will be providing emergency services. So it's 800,000 furloughed and about 1,100,000 who will be working.

MS. FARNSWORTH: And if we're in Denver or somebody in Topeka, Kansas, or in some other city, will they notice this right away, or it really won't be noticed for a couple of days, will it?

MR. KOSKINEN: Well, everyone's in a different situation. If you're in Denver, obviously, if you work for the federal government, you'll be affected directly. Even if you're working, as opposed to be furloughed, no one will be paid until there is an appropriation. If you work, we have incurred the obligation to pay you, but the time remains to be seen. So if you work for the government, or you're in the family of a government worker, or you actually have government workers as your customers, you will notice it immediately. Similarly, if you work for a government contractor or are part of a family of someone working for a government contractor, even if the contractor has a contract and continues to work, again, payment will not be made until there is an appropriation. Beyond that, if you are a young person, a man or woman, who wants to join the armed services, those applications will not be processed. If you happen in Denver to turn 65 this week during a shutdown, your application for Social Security will not be processed. If you're a veteran applying for new benefits this week in Denver, those applications will not be processed.

MS. FARNSWORTH: This is not the first time this has happened. Can you give us a sense of the precedence for this. How long has the government shut down when it shut down before?

MR. KOSKINEN: There have been several cases in the last 15 years. The government has never shut down for more than two working days, so that we are--if we get beyond--first, if we have a shutdown and we get beyond two days, we'll be in uncharted territory.

MS. FARNSWORTH: What do you think is going to happen? What's your best guess at this moment?

MR. KOSKINEN: I think there's no way to predict. We have fundamental questions being debated in this country right now. As the President noted this morning, the problem is that the Congress has tried to attach a couple of those fundamental questions onto the continuing resolution and, in effect, the entire government will have to shut down if he does not, in fact, concede to the House and the Senate. And he's made it clear that he will not.

MS. FARNSWORTH: What is the cost of the shutdown? It's not cheap to close these agencies.

MR. KOSKINEN: No, it is not. There are millions of dollars of expenses just in the closing expenses, and then historically, the workers who are furloughed have been paid retroactively as a result of a special appropriation. And the House and Senate leadership last week noted that they would propose that same principle this time, and the administration strongly supports that. But at that rate, if we actually furlough 800,000 employees, that costs us about a billion dollars a week in wages for people who will have been furloughed.

MS. FARNSWORTH: Can people volunteer to work? Let's say there's an agency and somebody feels very strongly that it's important that the work go on, can that person volunteer to work?

MR. KOSKINEN: That's an important question because my experience in the year and a half I've been in the government is that the federal work force is dedicated, committed to the missions of their agencies. And so left to their own devices, I'm sure that literally thousands would volunteer to work, but the statute is clear. The agencies cannot accept voluntary work by otherwise employed government officials who have been furloughed, so there will not be volunteers available in any of the agencies.

MS. FARNSWORTH: Mr. Koskinen, thank you very much for being with us.

MR. KOSKINEN: Thank you. FOCUS - CAMPAIGNING IN CYBERSPACE

MR. LEHRER: That reference just now to state parks was an error, of course. It's national parks that would be affected by the federal government shutdown. We had hoped to get a battlefield reaction now from four freshman House members, but they've been held up by some votes on the stop gap spending bill, so we turn to two other political stories now, campaigning on the Internet and the debate over the soul of the Democratic Party. The Internet is first. The reporter is John Dickerson of "Time Magazine."

JOHN DICKERSON, Time Magazine: It's February 27, 1995, in Maryville, Tennessee, and Lamar Alexander is announcing his candidacy for the Presidency of the United States. Only he's doing it where no one has done it before--on-line.

LAMAR ALEXANDER, Republican Presidential Candidate: This is the first time anybody's ever done this, the first time anybody's ever announced for President by, by cyberspace, by computer.

MR. DICKERSON: Alexander is chatting electronically with hundreds of potential supporters who want to know who he is and what he believes in.

LAMAR ALEXANDER: The last question was: What ideas do you intend to use in order to win over Bill Clinton? And my answer was, my major goal is to move decisions out of Washington. President Clinton seems to want to reinvent America in Washington. I trust people here in Maryville to make their own decisions.

MR. DICKERSON: Three months later, Alexander opened a campaign headquarters on the World Wide Web, that part of the Internet where users can browse and download text, sound, images, and video.

LAMAR ALEXANDER: I invite you to join me. This will be a different campaign. But if you believe that the arrogance of Washington is the problem and the character of our people is the answer, then I invite you to come on along.

MR. DICKERSON: Alexander was the first candidate in cyberspace, but he wouldn't be the last.

SPOKESMAN: It is my pleasure to introduce the next President of the United States, Bob Dole.

MR. DICKERSON: Every presidential candidate is expected to have a so-called "home page" on the World Wide Web. Typically, what voters can get there are the candidates' speeches, their biographies, their positions on the issues, press releases, campaign schedules, and information on how to support the candidate or contribute money to the campaign. And the voters can also talk back directly to the candidates' campaigns with E-mail or on-line polling. Mike Murphy is chief consultant to the Alexander Campaign.

MIKE MURPHY, Chief Consultant, Alexander Campaign: You can pull down pictures here from his walk across Tennessee as governor, him playing the piano, anything you want to know about him in this box, and it's a lot more effective way for us to get the information out. And the people who go looking for it we know are interested enough to go through that effort, we know they're probably going to vote. It would cost us millions of dollars to mail all this stuff out. Instead, we have this big electronic file cabinet people can look at.

MR. DICKERSON: People on the Internet can look into those big electronic file cabinets anytime they want, getting more information than they ever could before. That's beginning to change the way political campaigns are run.

MIKE MURPHY: The old days, you'd have TV commercials. We're going to have them too, they're very important; radio, phone banks, newspaper ads, all the standard things you do in a campaign. But in those, you pretty much polish your message down to the core, but the Internet allows us to give people in-depth speeches they can look up on Bosnia, metric system, any topic they want they can get a lot more information that they can look at than we can give them in the normal way you communicate a campaign, the two minutes you get on the Nightly News or the thirty seconds you get in a political ad.

MR. DICKERSON: Most campaigns are well aware of the benefits of going directly to the voter, bypassing the press and controlling their own message. A case in point is the campaign of Sen. Richard Lugar. His son, Mark Lugar, manages his father's home page.

MARK LUGAR, Volunteer, Lugar Campaign: We can, in essence, craft the message, put the candidate's viewpoint, stances there, for you to take in when you want it. Now where else can you hit twenty to thirty million users, which is growing approximately, I think most estimates are about two million users a month, with a message that is from your campaign, from your wording, your message to your voters?

MR. DICKERSON: The campaign's press secretary, Terry Holt.

TERRY HOLT, Press Secretary, Lugar Campaign: It used to be you'd get on an airplane, you'd fly to Iowa, you'd find your target audience, and you'd go to their neighborhood and knock on their door, hope they were home. In this case, people can log on at their leisure and get a full array of Dick Lugar's positions and his philosophy about the presidency at the touch of a button.

MR. DICKERSON: That touch of a button, according to the former President of Public Broadcasting and NBC News, is beginning to fundamentally change our democracy.

LAWRENCE GROSSMAN, Author, The Electronic Republic: It's a throw- back to the direct democracy of ancient Greece, the small city states. But this time they exercise it through electronic means.

MR. DICKERSON: Larry Grossman is author of a new book on the subject called The Electronic Republic. He outlines a Democratic system where politicians and voters are in direct, interactive electronic contact with each other.

LAWRENCE GROSSMAN: The Electronic Republic is probably the shape of our government for the next century, and it means a republic that's greatly transformed from what we have now based on the introduction of satellites and television and telephone and computers all coming together in a single stream, if you will. It goes back and forth so that the people become the fourth branch of government.

MIKE MURPHY: They don't need to read the paper every day to know what's going on. They can check everybody's Web page and see what we're all saying and judge for themselves. That's the change. And that helps campaigns, because it makes the power of the media less and makes the power of the campaign to get its own story out more.

MR. DICKERSON: The candidates are using the power of this new two-way interaction to reach out to voters, hoping to inform them, but more critically, they want to recruit them into their campaigns. And the Internet allows the return to true grass-roots organizing.

MARK LUGAR: We can in a very quick way identify volunteers in California, Iowa, Florida, and organize them to do things, a very fast manner, far faster than campaigns have done before.

MIKE MURPHY: And I know it's working because we're picking up donors, we're picking up organizers, we're picking up support. People every day E-mail us, I've read your stuff in Internet, I want to help, and so the campaign is growing, and this is in a way our biggest campaign bulletin board.

MR. DICKERSON: But some campaigns, like Sen. Arlen Specter's, are wary about putting too much information out on the Internet, where it spreads quickly, freely, and widely. They're afraid they will lose control of the message they're trying to convey. Charles Robbins is the communications director for Specter's bid for the presidency.

CHARLES ROBBINS, Communications Director, Specter Campaign: It is most dangerous if you're either--if you either contradict what the Senator said, what the boss has said before, or if you put out erroneous information, because there it is for anybody to see, and that includes not just the people who've asked the questions but your critics and, frankly, your opponents.

MR. DICKERSON: What opponents can do on the Internet is another fear. Politics is never immune from dirty tricks, and the Internet provides some unique opportunities for tricksters to change or fabricate information about their targets. That's because once information is posted on the Internet, it's very easy to cut it from one page and paste it somewhere else, distorting its true meaning or masking its true source in the process.

MARK LUGAR: The ability to cut and paste screens, to copy information and bring it up on a site that may or may not represent your viewpoint poses some, some very interesting ramifications for a political campaign.

MIKE MURPHY: It's possible that information could be taken out of what's true in our campaign page here and manipulated and forged and sent around and somebody could have a political agenda of making trouble.

MR. DICKERSON: It's also possible to design a bogus page that looks like official information from the candidate. In fact, there have already been several of them. One clever satirist has pages that look very official. He says he's getting lots of requests for buttons and bumper stickers from visitors to the page who were fooled. More seriously, it's possible for hackers to get into the computers where candidates' official files are kept. These are called file servers. The information stored there can be changed by the hackers. Mark Bonchek conducts a research project on political participation on the Internet.

MARK BONCHEK, Political Participation Project: We may find something where one party breaks in and hacks their way into the system and changes some information somewhere on that Web site. So that's something that the parties are going to have to be very careful about also, cyber Watergate, so to speak. Before they broke into file cabinets; now they're going to break into file servers.

MR. DICKERSON: More than just information for a web site, file servers can also contain private campaign information, information the campaign would like to keep out of the hands of hackers, and out of the hands of their opponents. There are independent pages on the Internet where voters can go for reliable information, ensuring that the messages the candidates put out are truthful. Project Vote Smart is a non-profit, non-partisan voter information service. It uses a traditional phone hotline and a new home page on the World Wide Web to counter the self-interests of the campaigns. Their goal is to give the others information they need to make informed decisions at the ballot box. Angela Twitchell is director of information services.

ANGELA TWITCHELL, Project Vote Smart: People can just look it up at home from their computer, and besides our own data base, we've taken and expanded that and linked into other political sites on the Web so that people can go to us, check our unbiased information, and then go out and see the home pages of some of the candidates and see if they're telling the truth, see if they're manipulating the facts, or if they're being honest.

MR. DICKERSON: Of course, this new Internet political participation is limited to those fortunate enough to have access to computers and modems. Voters that have those also need an active willingness to use those tools to make their opinions known and their votes count.

TERRY HOLT: People on the Internet, or people that have personal computers in their homes tend to be a little bit better educated. They tend to be a little bit more affluent, although certainly not rich. So, you know, we're going after a group of people that we feel has a high propensity to vote in the election.

MR. DICKERSON: That vote is obviously and ultimately what the campaigns wants from the visitors to their home pages on the Internet, but they certainly haven't abandoned going after those votes the old-fashioned way.

MIKE MURPHY: This Internet material is important and very symbolic, but it cannot be the core part of the campaign. The core is still votes in the early stages, but this augments it tremendously. So we're not going to rely on the Internet to win the campaign. What we do think is that hundreds of thousands of people will get more information about us than was possible in other campaigns, and that will make our campaign stronger in Iowa and New Hampshire.

MR. DICKERSON: Technology has always had a large influence on political campaigning. The railroads brought voters face to face with the candidates as they whistle-stopped across the country. Radio and television brought the presidential aspirants into every voter's home. Both those advances in technology changed the way presidential campaigns were run. And now the Internet, the newest technology available to millions of Americans, is also changing the way we choose the President. FOCUS - FRESH VIEWS

MR. LEHRER: Now, a view from the budget stand-off battlefield from four freshman House members who have been with us periodically this session of Congress; two Republicans, George Nethercutt of Washington State, Zach Wamp of Tennessee; two Democrats, Chaka Fattah of Pennsylvania, Zoe Lofgren of California. Congressman Wamp, is this what you came to Washington to do?

REP. ZACH WAMP, [R] Tennessee: [Capitol Hill] Actually, this is where the rubber meets the road, Jim. This is exactly what we came to Washington to do, and that is to force the issue for the first time since 1969 and actually do what people that have run for Congress before said they would do, cut spending and balance the federal budget, never did do. We're here to do it and seriously reduce spending, shrink government, put the country back on solid fiscal ground, and this is where the fun starts. This is not funny; it's serious business. But it is so serious for our children that we've got to follow through on what we've started.

MR. LEHRER: Congressman Nethercutt, do you agree with that, that it was--all those things are worth shutting the government down tonight?

REP. GEORGE NETHERCUTT, [R] Washington: [Capitol Hill] Sure, Jim, this is not fun. But, but it's unfortunate. I didn't come here to bicker. I came here to get some business done and really balance this federal budget. And I think that's what's at stake here. And this is a philosophical difference between the President's plans and the Republican Congress and Senate's plans, and really that's what we're talking about. Aside from all the posturing in politics and excuses, that's really what we're talking about is balancing the federal budget, and what direction do we go? Do we keep spending more, or do we get our finances in line?

MR. LEHRER: And you support the strategy of your leadership to do it this way?

REP. GEORGE NETHERCUTT: Yes, sir. I think there's no choice simply because we, we--with the first continuing resolution that we passed back at the end of September, we've had ample time now to work this out, and there seems to be no cooperation on the other side, and I'm not just going to point fingers down the street, but seriously, I think if people want to get this job done, they will, and we've tried. I feel confident that we've reached out well.

MR. LEHRER: Congresswoman Lofgren, do you support the President's position of vetoing these bills?

REP. ZOE LOFGREN, [D] California: [Capitol Hill] Well, I think it's worth pointing out that he doesn't have a lot of choice, and the reason why we're at the stand-off this evening is because the Congress hasn't done its job. There are 13 appropriations bills that need to be passed. We've only passed three of them. So he hasn't had the, the appropriations bills even sent to him. It's really an argument between Republicans in the Senate and Republicans in the House, and now because they have been unable to get their job done, we're threatening to close the government and I think even more appallingly default on our debt. I don't think it's a fun prospect to bounce the checks after you've gone out and spent the money. And that's what we're looking at. It's--I think the President is doing what he needs to do, which is to play the role of checks and balances that our Constitution provides. We've got these extreme riders on these bills, and the President has a duty and responsibility to play that balance role that he's doing right now, and I just hope that we can get serious about this and keep the country's interests in our minds and hearts.

MR. LEHRER: Congressman Fattah, how do you feel about what the President is doing?

REP. CHAKA FATTAH, [D] Pennsylvania: [Capitol Hill] Well, I think that the American public really deserves better, and that the President, in dealing with the temporary stop gap continuing resolution and the debt limit increase had to veto those bills because they were added on to by the Republicans in the Congress serious substantive budget disagreements that really should be resolved, resolved in the budget deliberations and negotiations, not in these short-term bills. But I do think, and I would encourage the leadership here in the Congress to get serious about working this out. I heard Zach Wamp speak, and I understand his passion. But the point here is that the Congress does not alone make these determinations and the voters' decision in '94 should be respected in terms of electing Republicans to the Congress, but you can't at the same time disrespect the decision that was made in '92 to elect Bill Clinton. So both of them have different priorities and we have to get to the point where there's some sincere negotiations taking place so that we can arrive at an accommodation.

MR. LEHRER: Congressman Wamp, what about that? Doesn't the President have a right to--well, you heard what Congressman Fattah said--to be part of this and in terms of determining the overall budget priorities and not do it in a short-term continuing resolution, as you all have forced him to do?

REP. ZACH WAMP: Well, he was elected 36 months ago, and we were elected 12 months ago, and 12 months ago, the country spoke pretty clear that they wanted a smaller federal government, they wanted to rein in this out-of-control government. We are actually addicted in this country to big federal government, and what you're hearing tonight is actually the pains that an alcoholic would have dropping the bottle and walking away from it. We've got so much more government than we ever should have, this is really a defining moment in our country. And that's why everybody in the country needs to turn on their televisions, plug into the argument, and actually say, do we want to reduce spending and lead to a balanced budget? I don't think the President--if he came down the street-- if he would have come this weekend and said, okay, I will agree to a seven-year agreement to balance the federal budget, I am confident that Republican leadership would have said, okay, take everything else off the table, you can have everything else, if you will agree, sir. I mean, seriously, not just talking about it, don't give a speech about it, do it. That's what this is. This is real live legislation, not a speech, not the Democratic National Convention, not a campaign event. This is serious business. Are you going to do it or not? If you will, we'll agree to take everything else off the table, if you'll just agree, sir, to balance the budget.

MR. LEHRER: Congresswoman Lofgren, why didn't the President do that? Why didn't he say, okay, I'll take the seven years, and then we'll worry about the details later? He just simply didn't want to do it? And you think he was right to do that?

REP. ZOE LOFGREN: I think he's right to say let's keep the budget process in the proper budget context. It's Congress that hasn't done its job. It's Congress that has not sent him the bills that we were required to have sent him by October 1st. And, in fact, on Friday, the Senate hadn't even finished their work. So let's be serious. It's the Congress that's dropped the ball. Secondarily, I think that to say it's going to be, you know, my way or the high way is not the way that our Constitution is set up. There is a process for the Congress to appropriate. There is a process provided for in the Constitution where the President can veto, and then there's a process to come to grips with the difference. And to say that the President must come in and basically do what he's told by Speaker Gingrich is just not the way our Constitution provides. In the plan that the Speaker wants the President to agree to there are large cuts in education, in science funding, in long- term health care for the elderly, in terms of the Medicaid cuts that the President has serious disagreements with. And I think it's important for the President to stick by his principles. I think it's important that we get through this veto round as quickly as possible and then get down to the business of passing a stop gap measure that would not even be necessary had the Congress done its job, and then get to the business of settling our differences and running the country in a responsible manner.

MR. LEHRER: Congressman Nethercutt, what about that, that if you all had passed the proper bills, you would never have gotten into a stop gap situation and none of this would have happened, do you agree with Congresswoman Lofgren?

REP. GEORGE NETHERCUTT: Well, I really don't. I do to some extent, Jim, to be fair about it. But, in essence, I don't, because I'm on the Appropriations Committee, and I've heard all the way through 1995, as we've discussed our budget goals and our budget targets, you know, the President say many times, people from his administration, oh, he won't accept that, or he will accept this. So we felt that we couldn't get any reliable information all this year from the administration. You know, you have to remember, the President sent a budget up earlier this year that was denied by the Senate ninety-nine to zero. It projected $200 billion deficits forever. Then he came back and he said, well, I would agree to a 10-year balanced budget arrangement. And then he backed off that, and then he said, well, maybe I'd go for a seven year balanced budget. Then he said well, I think I raised taxes too much in '93, then today, I, I looked at the television and I understand that he says, well, we really don't have a bad budget deficit condition based on our Gross National Product. And so I think--my point is this--I think there's been an unreliable nature to the expressions by the President that he really is serious about cutting down spending and balancing this budget. So, therefore, that's caused a reaction on our part to make sure that we push the full weight to make sure that the President is fully committed. And we haven't seen that signal yet.

REP. ZOE LOFGREN: I've got to say something.

REP. GEORGE NETHERCUTT: Yes.

REP. ZOE LOFGREN: Because we're all freshmen, and we're not necessarily running this show, but the debt ceiling measure, for example, had riders put onto it. I think it's being used as really a political game. I mean, there was a regulatory reform measure that the House Republicans couldn't get passed through the Republican Senate. So that was added onto this debt measure. I mean, it's being used in a very political and very business-as- usual way with these extraneous riders. That's not the way we should do business. It's not why people sent us here to change things, and it's not, it's not something I'm very proud to see.

MR. LEHRER: Congressman Wamp, can you explain to your folks in Tennessee what's going on up here today, and will they understand it?

REP. ZACH WAMP: Well, they do understand it. I had three town meetings in East Tennessee on Saturday, and what I heard overwhelmingly from people that I don't know is stick to your guns, don't back down, follow through on what we elected you to do, and that is shrink the government and cut spending. The only way to get across this bridge is to cut spending. The President seriously has the legislation on his desk to keep the government open tomorrow. So Ms. Lofgren is just simply not correct in her full assessment of where we are. Sure, the Congress has taken on a lot of extra legislation this year. We had the Contract With America. The reason the appropriations process took so long is because we have changed our priorities on how we should spend our money. We've actually cut spending in the Congress for the first time since 1969. It was a historic time for us to pass out all of these appropriations bills cutting spending.

MR. LEHRER: Congressman Fattah, isn't what's going on here in Washington now exactly what the people said in '94 and '92 they didn't want to happen anymore?

REP. CHAKA FATTAH: Well, I think that the public is probably quite disappointed about what's taken place, and I think what's important here is that to deal with what the facts are. The facts are of the three or four bills that we've sent over to the President he has signed a majority of those appropriation bills and only vetoed one. The second fact is that the Congress has not sent a budget bill to the President so that he can either sign it or veto it. And failing to do that, it is something irresponsible of members of Congress not to take personal responsibility for our job and to start blaming President Clinton for not agreeing with the budget priorities of the Congress. Congress needs to send a budget over there. Hopefully once it's vetoed and negotiations can take place, we see the warring factions in Bosnia sitting down at the peace table, they're trying to put their guns away, and I think that whether the President was elected 37 months ago is really not relevant because we have members of the Senate that were elected five years ago who are helping to make budget decisions. The point is that, is that each election has validity, and we need to work towards some accommodation.

MR. LEHRER: Congressman Nethercutt, can you explain this to your folks in the state of Washington? Will they understand what's happening here, do you think?

REP. GEORGE NETHERCUTT: Oh, I think so, Jim. I think--I heard from a lot of people today overwhelmingly say, keep going the direction you're going and please, you know, fulfill your obligations that we sent you to Congress to fulfill, and that is balancing this federal budget. You know, it would take 2700 years of losing a million dollars a day for us to reach one trillion dollars in debt. And we're about $5 trillion in debt. So it's scary.

REP. CHAKA FATTAH: Jim.

MR. LEHRER: We have to leave it. Yes.

REP. CHAKA FATTAH: This budget is going to spend $12 trillion over the next seven years. The question is not about the amount of spending. It's what the priorities are going to be. They want to cut education. They want to cut summer jobs. They want to cut job training. And that's what the President has a problem with.

MR. LEHRER: All right. We have to leave it there. Thank you all four very much. FOCUS - PARTY POLITICS

MR. LEHRER: Now the Democratic Party's story, which grows out of a meeting going on here in Washington. Margaret Warner has the story.

MS. WARNER: The meeting which began today is the annual convention of the Democratic Leadership Council, a group formed in the mid 1980's to try to move the Democratic Party away from big government liberalism. That DLC game plan became more complicated when the Republicans took control of Congress in January. Ever since that Republican takeover, President Clinton and the Democrats on Capitol Hill have been trying to fashion a response. Often, they have not been the same. Capitol Hill Democrats, led by House Minority Leader Dick Gephardt, have attacked the Republican agenda as heartless extremism. The President has followed a different course. He has opposed the most radical Republican legislation, but he has embraced such common goals as balancing the budget, reducing the federal bureaucracy, making savings in Medicare, and reforming welfare. Mr. Clinton also has conceded publicly that he took too liberal a tact during his first two years in the White House. This self-criticism surfaced at a fund-raiser in Houston last month.

PRESIDENT CLINTON: [October 17] Probably people in this room are still mad at me at that budget because you think I raised your taxes too much. Well, it might surprise you to know that I think I raised 'em too much too.

MS. WARNER: Mr. Clinton went into greater in a recent telephone conversation with neoconservative writer Ben Wattenberg.

BEN WATTENBERG, Neoconservative: [November 3] He said that he- -that he made some mistakes, and that he had drifted sort of off message, lost the language of the pro-values, no more something for nothing Democratic Leadership Council type Democrats, and the subtext that I was--he didn't say this--but was that he sure wasn't going to let the Republicans walk away with, with those issues, and that he was, in fact, I thought, kind of kicking himself for allowing to be perceived of as a Democratic liberal.

MS. WARNER: This morning in Washington, the President addressed the Democratic Leadership Council, a centrist group he helped form in the mid 1980's. The President reaffirmed his allegiance to the vision he said he and DLC members had always shared.

PRESIDENT CLINTON: We knew that to keep America strong the old ways of governing would have to be abandoned. We wanted a government committed to standing up for the values and interests of ordinary Americans, a government that offers more opportunity with less bureaucracy, that insists on responsibility from all its citizens, that strengthens our sense of community, the idea that we are all in this together, and that everyone counts.

MS. WARNER: What should the Democratic President and his party stand for today in the face of the Republican juggernaut on Capitol Hill? We debate that now with Al From, the President of the Democratic Leadership Council, and Robert Kuttner, the editor of the "American Prospect." Bob Kuttner, do you think the Democratic Party has done what it needs to do toovercome the factors that led to its defeat in the '94 election?

ROBERT KUTTNER, Editor, "The American Prospect": Well, I think the great debate here is whether the Democratic Party needs to become more like the Republicans or less like the Republicans, and I think the problem, as Dick Gephardt has said, is that the Democratic Party often speaks out of both sides of its mouth. Sometimes it sounds like a champion of ordinary working people, and sometimes it sounds like its only problem is that it's not quite close enough to the Republican Party. Listening to the earlier segments of this program, however, I'm tempted to minimize my differences with Al From, because I think both of us have a lot more in common with each other and with Bill Clinton than either of us has with Newt Gingrich. And I think a lot of our differences are tactical. I guess the point is Democrats need to be progressive on pocket book issues. They need to deliver the goods for ordinary working people who are the heart and soul of the party. It's only when you do that that you can also gain a hearing on the tolerance issues that are sometimes controversial. So I think if you move to the middle of the road on some of these divisive social issues without delivering the goods on the economic issues, that's not going to help.

MS. WARNER: Because that's not what the prescription--go ahead, I'm sorry.

MR. KUTTNER: And if you do deliver the goods economically, then ordinary people are going to be more willing to give you a hearing on some of the more controversial civil liberties and civil rights questions.

MS. WARNER: Al From, what do you think of that? Does that sound like a prescription to you?

AL FROM, Democratic Leadership Council: Well, I think that Bob Kuttner and I do probably agree on a lot more than we disagree. I think there are three frustrations that are driving the American people and that have hurt the Democratic Party. The first is the one Bob just talked about. The American dream to too many Americans is slipping away. And we have to be the party of opportunity and upward mobility again. Secondly, I think Americans are very concerned about sort of disorder in society, whether it's breakdown of families, crime. 42 percent of the American people told the "New York Times" recently that they're afraid to walk in their own neighborhoods at night. That's something that our party has to deal with; we have to address that. And the third thing is I think we need to do what the President was talking about in the film clip you just had. We need to fix government. We don't have to be like the Republicans. We don't want to abandon public responsibility. But the American people are frustrated because some of the basic systems of government, education, law enforcement, welfare, don't seem to work very well. What we need to do is have a different kind of government, an activist government but one that I call an enabling government, that equips people to solve their own problems, doesn't try necessarily to have bureaucrats in Washington tell them how to solve those problems.

MS. WARNER: Okay. But I want to ask you both, even though you'd like to agree on these prescriptions, how well you grade the men and women in power from your party now. I mean, President Clinton has been in office nearly three years, and you've got a Democratic Congress trying to respond to the Republicans. How do you think-- let's take the President first--how do you think he's done on this whole set of issues that you say he has to address?

MR. KUTTNER: Who would you like to address that first.

MS. WARNER: Bob Kuttner, I'm sorry.

MR. KUTTNER: That's okay.

MS. WARNER: I was looking at you, but you couldn't tell that.

MR. KUTTNER: That's right. Well, you know, when Bill Clinton ran for the nomination, I was kind of bullish on him and I said to a lot of people, anybody who can get Al From and me both to agree that he's a good guy is either a real leader or a chameleon. And I think some of the time Clinton has been some of each. I think for the last week or two he's really looked like a leader. It's almost like he planned it this way, that, that for about a year he sent the Republicans a signal that he could be rolled and then when the Republicans overreached, Clinton said, enough, I'm going to draw a line in the sand, and lo and behold, it's revealed for all the world to see that the Republican program is not nearly as popular as they think it is. And they've been caught up in their own propaganda. Now, as far as how Clinton is doing, I think the big missing issue that's on the minds of a lot of Americans but has not been addressed adequately by either party is the issue of living standards. Since Roosevelt, the Democratic Party has been a majority party a lot of the time because the ordinary voter feels that the Democratic Party speaks for his or her interest when it comes to raising living standards, defending living standards, defending ordinary people against the ravages of a pure, heartless free market system, and balancing the market with citizenship and public programs like Medicare and Social Security in public schools. I think the Democrats have not been as clear as they could be getting out that message and signaling what they're going to do for the economic concerns of ordinary people. On the other hand, when you compare them with the Republicans, in the defense of Social Security, of Medicare, of EITC, public schools, Democrats are doing a heck of a good job.

MS. WARNER: All right. Al From, is that where Democrats have to make their stand on, as Bob Kuttner just said, standing up for average working men and women against the ravages of capitalism?

MR. FROM: Well, I--

MS. WARNER: Or is that old Democrat thinking?

MR. FROM: I wouldn't put it quite that way.

MR. KUTTNER: I didn't really put it quite that way either.

MR. FROM: And I agree with that.

MS. WARNER: You heard him.

MR. FROM: But I do think Democrats have to make a good part of their stand on helping ordinary working people get ahead. I think the most important thing our party understand is that we aren't going to rebuild, we aren't going to revitalize our party on Republican failures. Right now, the harshness, the intolerance of the Republicans is coming clear, and that helps Democrats in the short-term, but that's not the basis for long-term revival of our party. The basis for long-term revival of our party is to come up with a pragmatic, progressive reform alternative to what Newt Gingrich and the Republicans are offering.

MS. WARNER: And do you hear that from either President Clinton or Democrats on the Hill now?

MR. FROM: Well, I think that I hear it more from President Clinton, frankly, than from Democrats on the Hill. But I think it's pretty--our party hasn't been quite clear enough. One of the things we're doing in the Democratic Leadership Council is we have a project is we have a project we call the Third Way Project. And the idea is to develop a progressive reform agenda that is an alternative to the Republicans but it's very different than the old bureaucratic status quo that a lot of Democrats support.

MR. KUTTNER: This is where I think Al and I disagree. I don't think you gain anything as a Democrat by repudiating the Roosevelt, Truman, Kennedy, Johnson tradition. Why does there need to be a third way? Why does there need to be the kind of triangulation strategy that Dickie Morris, who's a sometime Republican, sometimes Democrat, is telling to the Clinton White House? Why can't we say the Republicans have this idealized view with a free market where ordinary people are expendable, and Democrats have a more humane view that, that requires the markets to be tempered by government, that, yes, we want to be efficient, and those are the contending philosophies. What good does it do as a Democrat to have a third way?

MR. FROM: Bob, the reason we need a third way is because the country has changed. It doesn't mean we give up our principles. If you had listened to my speech this morning, what you would have heard is me say that progressive, the progressive philosophy of the Democratic Party has been responsible for most of the social and economic progress in this century.

MR. KUTTNER: Well, I'll drink to that.

MR. FROM: We ought to be proud of that.

MR. KUTTNER: Right.

MR. FROM: But we have to modernize it.

MR. KUTTNER: Well, and I, and Al--

MR. FROM: A bureaucratic government is not the way, bureaucratic government is not the way to modernize it.

MR. KUTTNER: Well, and I would agree with that, and I think--I think most people who are good card carrying Democrats would say that nobody likes big bureaucracies for their own sake, that you have to be as nimble and as inventive in the public sector as the private sector is and maybe even more so, so I think we can agree on that.

MS. WARNER: But do you, do either of you--

MR. FROM: The point is--

MS. WARNER: --think, though, that you can make that case to the voters with any credibility?

MR. FROM: Of course, we can.

MR. KUTTNER: Sure. I mean, Medicare--

MS. WARNER: This case for activist government. Do you think the voters are still interested in hearing that message?

MR. KUTTNER: Look, most of--most of "activist government" is bread and butter programs that defend the living standards of ordinary people like Medicare and Social Security and public schools. And yeah, those programs have to be revised with time. But they don't need to be thrown in the garbage.

MS. WARNER: Al.

MR. FROM: I think we can meet the case very effectively. First of all, on economic issues, look where we are right now. Seven and a half million new jobs created in the last three years. Inflation down, interest rates down. The economy is much better than it was when President Clinton took over. All private sector jobs, the bureaucracy is 200,000 people less than it was when this President took over.

MR. KUTTNER: I think what we need to do and I think Bob and I probably would agree on a lot of this is we need to take a hard look at the public systems which are trying--which should be providing opportunity for our people that aren't working very well. I think we need fundamental reform in the public schools. I personally would like to see a situation where by the year 2000, 2005, every parent in this country, whether rich or poor, has a choice of where he or she will send her kids to school.

MS. WARNER: Okay. But can you endorse--could you endorse a position like that and still keep your old liberal base, as well as appeal to these moderates and independents that you're aiming toward?

MR. FROM: Well, I think so.

MS. WARNER: Bob Kuttner, do you think it's possible to marry these two?

MR. KUTTNER: I do, but I think we've got to stop beating up on each other and in order for this not to be too much of a love feast, let me mention one area that I think is an area of difference. I am not in favor of kicking Al out of the party. I think sometimes Al and his friends have been much too hard on the labor movement. I think some of the DLC people have demonized the labor movement. I think the election of Sweeney two weeks ago--

MS. WARNER: John Sweeney, the new head of AFL-CIO.

MR. KUTTNER: The head of the AFL-CIO. The commitment to organize people like nursing home workers and other low-wage workers is one of the most exciting, hopeful things in American progressivism and in the Democratic Party, and I, I think it's a big tent, the party's been a big tent ever since Roosevelt. I think there ought to be room for a strong, vibrant labor movement, rather than seeing big labor so called as an albatross. I think this is a great source of strength. This is the party's grass roots, its ground troops, and I hope Al would agree with me on that, just as I would agree with him that we need to revitalize big public systems.

MS. WARNER: Do you agree with him on that?

MR. FROM: I agree that we need a strong, vibrant labor movement, and it ought to be part of the Democratic Party, because we are the party of working people. But I'm not sure that the future of organized labor or the Democratic Party is simply in organizing low-income workers. If I were Mr. Sweeney, the first thing I'd do is create AFL-CIO University and have regional training centers all over the country and make a commitment that every worker in America and every member of a labor union is going to have world class skills, so we can compete for high-wage jobs and unions can move back into those industries.

MS. WARNER: Gentlemen, I'm sorry. We're going to have to leave it there. We'll be back again, I'm sure. Thanks.

MR. KUTTNER: Thank you. RECAP

MR. LEHRER: Again, the major stories this Monday, Congress sent President Clinton a stop gap spending bill late today. The President has repeatedly said he will veto it. Thousands of federal workers will be furloughed if no spending deal is reached by midnight. This morning, he vetoed a bill to increase the government's borrowing limit. Six people were killed, sixty wounded, in a car bomb attack in the Saudi Arabian capital of Riyadh. Five of the dead were Americans. Two groups claimed responsibility for the blast at a military training center. And we'll see you tomorrow night with full coverage of the expected government shutdown, among other things. I'm Jim Lehrer. Thank you and good night.