The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. Americans and Soviets had their first high-level meeting in seven months. Soviet Foreign Minister Gromyko and Secretary of State Shultz met for nearly three hours in New York. A House panel passed emergency aid to improve security for U.S. embassies. Congress passed a bill requiring tougher health warnings on cigarettes. A census report said one in three Americans gets some form of government support. Jim Lehrer is off; Charlayne Hunter-Gault's in Washington. Charlayne?

CHARLAYNE HUNTER-GAULT: On the NewsHour tonight, we look at the following stories. As the United States and the Soviet Union start talking with each other once again, we have a profile of the man who's doing the talking for the Soviet Union, not only today but for the past 40 years. That's Soviet Foreign Minister Andrei Gromyko. We go once again to Madison Avenue experts to give us their views on a new batch of presidential campaign ads. From Weirton, West Virginia, we get an update on what's happened in the year since workers took over their company rather than see it close down. And two experts on poverty give us different views on the poor: just how many there really are, who's to blame, and what can be done.

MacNEIL: Secretary of State George Shultz and Soviet Foreign Minister Andrei Gromyko met for nearly three hours in New York today, the first high-level meeting between the two governments since January. Before the business part of the meeting began, Shultz and Gromyko sat posing for photographers in the office of Jeane Kirkpatrick, the United States ambassador to the United Nations. Their moods seemed to be cordial, and as they chatted briefly, both of them smiled from time to time. The atmosphere was much different from the stony mood of their last meeting in Stockholm, Sweden. The first one to leave the meeting was Gromyko, apparently in a good humor. He told reporters many questions were discussed, but he said he would say no more until he met President Reagan in Washington on Friday. The same theme was repeated a few minutes later when Secretary Shultz spoke to the reporters. He said today's meeting was broad and comprehensive, but only a background talk for the meeting with the President. Gromyko has kept his own counsel since President Reagan's speech to the U.N. on Monday calling for a fresh approach to reducing international tensions. Mr. Gromyko sat stone-faced through that speech, but foreign diplomats have told U.S. officials they found Gromyko in a softer mood after the speech. President Reagan talked about his meeting with Gromyko on the campaign trail in Ohio today. Answering questions from students at Bowling Green State University, Mr. Reagan said his goal will be to open up a dialogue about the suspicions that exist in both our countries. The President said that although the Soviets had walked away from the bargaining table, the U.S. remains prepared to negotiate on nuclear arms reductions tomorrow, if the Soviets so choose. But the President also said his willingness to negotiate was based upon American military strength.

Pres. RONALD REAGAN: The world is a dangerous place. We try to be a good neighbor, but we must be strong enough and confident enough to be patient when provoked, but we must be equally clear that past a certain point, our adversaries push us at their peril. Uncle Sam is a friendly old man, but he has a spine of steel.

MacNEIL: Soviet president Konstantin Chernenko had talks today with the president of Finland, Kalevi Sorsa. Afterwards the Finnish leader said Chernenko is very worried about superpower relations. Chernenko said contacts are few and produce very little results. The Finnish president added that Chernenko's attitude towards Washington was neither optimistic nor fatalistic. Charlayne?

HUNTER-GAULT: Extra money to beef up U.S. embassy security around the world was approved today by the House Foreign Affairs Committee. By a voice vote the panel supported an administration request for $366 million to upgrade security. The approval came after some tough criticism was leveled against the State Department over the security at the U.S. Embassy annex in Beirut, which was hit by a truck bomb attack last week.

Rep. ROBERT G. TORRICELLI, (D) New Jersey: This is the third time they've killed Americans. There's nothing new about this. Can you tell me anything different about this than the previous bombings? Have you learned something that I haven't learned?

RONALD SPIERS, State Department: Well, you know, I think that what I have learned from this is that the situation is even more urgent. So that I would like to get some of these things going earlier than we would if we went through the regular process.

Rep. TORRICELLI: Let me tell you my reaction, and one thing that I have learned after listening to the report from General Accounting Office. I'm going to vote to give you the $100 million you need for more security preparations, but I'll tell you, I think you need more than a hundred million dollars; you need a hundred good managers. Because when I hear about security apparatus that we voted for previously being sent to embassies and sitting on the ground, iron gates that people aren't putting in place after this Congress has voted for them, materiel that's not being shipped; far more than you need money is you need some good personnel.

Rep. STEPHEN SOLARZ, (D) New York: I recognize that it's easy to second-guess, but how this could possibly have happened a third time really boggles the imagination. There's kind of folk wisdom in this country which tells us, "Fool me once, shame on you; fool me twice, shame on me." I'm tempted to add, fool me a third time, and maybe the time has come to take the people who are responsible for this and give them some other responsibility.

Rep. MEL LEVINE, (D) California: I don't think that there's any doubt, and I don't think anybody in this room has any doubt, that you are going to get everything that you have asked for, and you should get everything that you ask for in terms of anything that you feel that you need with regard to security and dealing with terrorism. What frustrates me sitting here is my worry that we're going to give you everything that you want, which we should, but that it still isn't going to be administered or implemented in a way that will protect American lives.

Rep. SAM GEJDENSEN, (D) Connecticut: I think we are at a point where we are either capable of protecting our people, or we get 'em out of there, because the example of leaving Americans in Lebanon that continuously die in assaults is a far more dangerous example than removing our people from a dangerous area.

Mr. SPIERS: There is a conceptual problem here. An embassy is a public building. To do its job, access to it, access from it, is required. If it's a fortress it really doesn't do its job. This is not something that I or any of my colleagues take lightly; these are our friends, they're our colleagues that we're worried about, and this is not, you know, something that we trivialize or trifle with.

HUNTER-GAULT: Elsewhere on Capitol Hill it was a busy and active day as Congress moves to finish up its work before the October recess. The House approved a compromise version of the defense authorization bill. The bill calls for the spending of some $297 billion. It requires that the fate of the MX missile be decided next year by votes in both the House and the Senate. Also in the Democratic-controlled House last night President Reagan's anticrime bill was a surprise winner; the House voted to include parts of the administration's anticrime package in an emergency money bill. The House also approved compromise legislation on child abuse. The new law sets up a program to deal with the problems of family violence and provides medical care for severly handicapped infants. Also approved today in the House was a bill authorizing $4 billion for programs for the elderly. The money will be spent over three years on a variety of health, food and medical research projects. And, both the House and the Senate approved new warnings for cigarette packages. The four new warnings will toughen up the Surgeon General's message now on cigarette packages. Robin?

MacNEIL: In another campaign stop in Ohio today, Mr. Reagan toured a new steel plant under construction in Canton. In a speech to employees he denounced what he called "a blunderbuss approach" of quotas and trade barriers to protect the ailing U.S. steel industry. Last week Mr. Reagan rejected restrictions which Walter Mondale favors on steel imports. Instead the President said he would negotiate with foreign countries to reduce imports. He said today there are those who call for protectionism and quotas which are short-sighted and temporary at best, and which will make all of us a lot worse off in the long run. Meanwhile Walter Mondale was in Cleveland, Ohio, speaking to 3,000 members of the Steelworkers Union, which has endorsed him. Mondale said Reagan economic policies had sent American jobs overseas and damaged basic industries here. He said unemployment in the steel industry had doubled as imports increased, and that Reagan's policy for the steel industry was "to let it rust."

Vice Pres. WALTER MONDALE, Democratic presidential candidate: Four years ago, when he was running for president, Mr. Reagan went to Youngstown and he said, "I won't forget you." Well, he didn't, until just after the election, and he has forgotten you for four years. Well, he forgot you, now it's your turn to forget him on November 6. We meet at a time, hard times for steelworkers and the steel industry. But we also meet at a time when in just 42 days, we can change the presidency and put someone in that White House who will make a difference. Packaging Politicians

MacNEIL: Last week we began what we intend to make a regular feature of our coverage of this campaign, a frequent look at the TV commercials both sides are using. There have been some new commercials issued this week, and we're going to examine them with two Madison Avenue professionals. Tony Schwartz has made, thought and written about political commercials for more than 20 years. In 1964 he made the famous "daisy petal" commercial attacking Barry Goldwater's ideas on nuclear war. Bill Taylor is vice president and creative director of the firm of Ogilvy and Mather. Twelve years ago he was part of a group doing commercials for Mr. Nixon's reelection. Before we get their analysis we're going to look at some of the latest batch of commercials, starting with two from the Reagan-Bush campaign.

Pres. REAGAN [TV commercial; voice-over]: In my lifetime, we faced two world wars, a war in Korea, and then Vietnam. And I know this, I want our children never to have to face another. The President's most important job is to secure peace, not just now, but for the lifetimes of our children. But it takes a strong America to build a peace that lasts. And I believe with all my heart that working together we have made America stronger and prouder and more secure today. And now we can work toward a lasting peace for our children and their children to come. Peace is the highest aspiration of the American people. Today, America is prepared for peace.

[on camera] We will negotiate for it, sacrifice for it; we will not surrender for it now or ever.

Pres. REAGAN: Just across the hall here in the White House is the Roosevelt Room. Draped from each flag are battle streamers signifying every battle campaign fought since the Revolutionary War. My fondest hope for this presidency is that the people of America give us the continued opportunity to pursue a peace so strong and so lasting that we'd never again have to add another streamer to those flags.

MacNEIL: Mr. Taylor, what do you think of those as effective political commercials?

BILL TAYLOR: Well, I'm sure they're quite effective. I don't think there's much doubt about that. They use Mr. Reagan, he uses himself really to this best possible advantage. He's a wonderful voice-over, a wonderful professional, wonderful on camera. I suppose if you were cynical in the second one you might even say you'd be surpised when he turned that around, you'd almost think in the middle of the commercial he was going to say, "I can't wait to add another banner to the streamers." But he does a lovely job. The first one with children, dogs -- it's a very professional and very slick, perhaps a little too slick, perhaps approaches the type of advertising we do for our packaged goods products.

MacNEIL: Could you sell packaged goods products?

Mr. TAYLOR: Yes, we do, and this -- I won't argue with the selling --

MacNEIL: Does that detract from the effectiveness of this out there in the marketplace, the political marketplace?

Mr. TAYLOR: I think it could. I do think if people are sophisticated enough if they could really equate it to Coca-Cola commercials that they might think that that's getting a little too silly. But I think Mr. Reagan's sincerity and his wonderful acting ability overcomes that, over that hurdle.

MacNEIL: What do you think, Tony Schwartz, as a maker of commercials? Is that first one especially was almost on the same issue as you were addressing in 1964 in a very different way. It was focused on children and war and the desire to keep them out of war.

TONY SCHWARTZ: Well, the first one -- or the second one was. The first one I think is -- well, firstly, I think that he deserves an Academy Award for his work here. He never got it in the movies, but he certainly deserves it as a commercial maker for the presidency. I think that it's in conflict with the lives of many people. In yesterday's Times you see the story that the Mayor's Conference announces that the increase of over 70% in homeless and hungry is something that contradicts this, and I think that these again, as our last week guests said, are prickable, can be -- the balloon can be deflated, when you compare it to certain aspects of life in our country.

MacNEIL: The polls would suggest, however, that so far no balloons are being pricked, or --

Mr. SCHWARTZ: I agree with you. I don't think that the other campaign is going at this right.

MacNEIL: And you yourself have written in your first book, as I recall, which is called The Responsive Chord, that with the purpose of this kind of advertising is not to persuade people of ideas they haven't had before, but to somehow evoke in them a response to something they're already thinking. Is that what this is doing?

Mr. SCHWARTZ: Well, this will reach many people, and it will not reach other people. It is a perfect example of trying to attach to what's inside people and what they feel. For those who feel this way, absolutely. But they are a -- they're an unreal real world: people are possibly real people, but they're all directed and made up and exquisitely photographed. I don't think these are documentary commercials. If you were to take a person like Gabe Pressman of NBC in New York here, I think I've said this before, and send him out to record the people of the country the way he's done it on his news shows, you would get a very touching, as equally as touching, but very real picture of life in America.

MacNEIL: Let's stop for a moment to look at some of the latest Mondale-Ferraro commercials.

ANNOUNCER [TV commercial]: Mr. Reagan's undersecretary of defense once said this about a nuclear attack: "Everybody's going to make it if there are enough shovels to go around. Dig a hole, cover it with a couple of doors, and throw three feet of dirt on top." Mr. Reagan himself has opposed every nuclear arms agreement since the bomb went off. No wonder he's never achieved one. It's time to think about how deep a hole we're digging for ourselves. Mondale: he's fighting for your future.

ANNOUNCER: The four budgets Ronald Reagan sent to Congress -- his budgets, his signature, his deficits -- $506 billion. [The Washington Post, September 14, 1984] "He has never submitted a balanced budget to Congress, he has never submitted a budget that came close." [Dallas Times Herald, September 12, 1984] "Mr. Mondale has put his cards on the table face up; Mr. Reagan should do the same." [The Hartford Courant, September 12, 1984] "Presidential leadership should be exerted to gain control of the federal budget. Mr. Mondale, the challenger, is showing leadership; President Reagan is ducking it." Mondale-Ferraro: they're fighting for your future.

ANNOUNCER: Where's the plan, Mr. Reagan? Who's going to pay for your deficits? In your first term you cut aid to seniors, the unemployed, students, and the disabled. Where are your cuts this time, Mr. Reagan? You gave tax breaks to the rich and to profitable corporations, then signed one of the biggest tax increases in history. Who gets tax breaks this time, Mr. Reagan? Mr. Mondale has told us his plan to reduce your deficits. Where's your plan? Level with us. Mondale-Ferraro: they're fighting for your future.

MacNEIL: Mr. Taylor? Those commercials.

Mr. TAYLOR: Well, interestingly, they're all negative commercials, and probably they should be. If I were in Mr. Mondale's spot, I would do much the same. I think another interesting aspect is the contrast in the first commercial of -- where he used children. And when you see Mr. Reagan's happy smiling children with their dogs and you see Mr. Mondale's worried, concerned children as they watch a bomb shelter being dug -- in the commercial world, in the commercial sense, it's just the final impression is one of happiness and goodness and greatness, and one of worry, concern and a sort of a down feeling. So I think Mr. Reagan wins hands down.

MacNEIL: Down feeling is not a good selling feeling, even when you're going out to attack somebody else's position.

Mr. TAYLOR: Exactly. I don't think it is, to have a final feeling of downness attached to your campaign. The issues are real and good, and I'm sure he's got some very good points. I do think negative advertising is very easy to do against an incumbent, and --

MacNEIL: And does it work?

Mr. TAYLOR: I do think it works. I think it's probably the most effective type of advertising if you're in trouble.

MacNEIL: How did you feel about these ones? They're a bit different than the ones we looked at last week.

Mr. SCHWARTZ: A little. The first one is a little simpler than the others. I find that the second and third all have the beginnings of ideas in them, but they get very complex. The brain has to go through too many paths to get to the --

MacNEIL: You mean the one quoting all the editorials?

Mr. SCHWARTZ: Yes, the editorials and so forth, those few questions they ask are meaningful in the third one, and so forth, but you find that the slogan at the end, which is repeated on every commercial, just is meaningless in that they could have a slogan relating to each idea unto itself. The idea of having a repetitive slogan each time goes against people's experience in life, which says a man who repeats himself is a bore.

MacNEIL: Is that right? Lots of commercials repeat, are repetitive.

Mr. SCHWARTZ: I find that visually you gain comfort from repetition of a slogan or anything visually, but auditorially, repetition is -- you want to try to say the same thing in a different way.

MacNEIL: What do you say about Mr. Taylor's point that it is not a good selling mood to have a kind of down feeling, comparing the Reagan commercial with the children and the Mondale one with the man digging the hole.

Mr. SCHWARTZ: The question of the down feeling is something else. I think that there are four ways people can vote with two candidates, that's for or against either candidate. And sometimes you can get more votes by being against one candidate, sometimes you can get more votes by being for yourself. I think thatMondale's position at this time has to be to go against Reagan, but the commercial should give you a sense of positive feeling from that attack, I mean, that people who identify with that or get to see it could come away with the positive feeling that insight can give them.

MacNEIL: There's a loo of reporting back in the winter and spring that the Reagan people, with a lot of apparently impetus from Mrs. Reagan wanted to find an agency on Madison Avenue that could create commercials of the style and as good as the sort of Pepsi commercials, with their feeling about America. Is that what they have achieved with these commercials? Do you?

Mr. TAYLOR: I think he has achieved that, yes, he has a marvelous production and wonderful values. He didn't exactly go the Pepsi Cola route of big, hugeness -- that would be a little too much -- but he did the emotional approach that we do so well for so many other kind of commercials. And he is so marvelous --

MacNEIL: What's that?

Mr. SCHWARTZ: For the telephone company and the greeting card company --

MacNEIL: Creating a warm, pleasant current of feeling on which you float your --

Mr. SCHWARTZ: Yes, their exquisite emotional feeling theme, everything is lovely, and again you get this theme of everything is working.

MacNEIL: We'll leave it there, and we'll talk some more as the commercials change. Thank you. Charlayne?

HUNTER-GAULT: Leaders of the United Auto Workers gave their approval to the union's contract with General Motors. The UAW's G.M. council decided today in St. Louis to send the contract to their 350,000 workers for ratification. Union president Owen Bieber said the new contract would provide innovative ways to preserve jobs. Update: Steely Determination

HUNTER-GAULT: Elsewhere on the labor front, it's been a year since we broadcast a report on a landmark development in the steel industry. Eight thousand steel workers at a Weirton, West Virginia plant voted to take over ownership of the plant when National Steel began making moves to close the plant and get out of steel altogether. The deal made the plant one of the country's 10 largest steel companies. The plant is West Virginia's largest private employer and the dominant presence in Weirton, a town of 26,000 people. Recently Carl Swicord of public station WNPB in Morgantown, West Virginia, went back to Weirton to update how the workers were doing a year after the historic deal.

CARL SWICORD [voice-over]: A lot has changed since the days when E.T. Weir looked over his sprawling steel mill in West Virginia's northern panhandle. There was no foreign competition to speak of, and companies like Weirton Steel provided the muscle that made America's economy the strongest in the world. All that has changed now in the past five years, dozens of steel-making facilities across the United States have shut down. And that was the fate that awaited Weirton Steel in 1982, when the firm's parent company National Steel announced that it no longer wanted to operate the mill. But employees at Weirton refused to throw in the towel, and in September of 1983, the workers voted to approve an employee stock ownership plan, better known as an ESOP. In exchage for cuts in benefits and pay, the workers were able to buy the mill, making Weirton Steel the largest employee-owned company in America. Now, one year after the vote, employees are wondering if the plan will continue to work. One change employees have noticed is an increase in communication between workers and management. The company president meets once a week with employees and there are more than 20 employee participation groups that work in the mill. Groups like this one work to identify problem areas, like a lack of coordination among workers in the plant.

STEEL WORKER: Most of the time the reason the job is done twice is because the first time nobody checked to find out exactly what they wanted done.

2nd STEEL WORKER: You should know what the job is before you're sent down to do it anyways, what you're saying. Somebody should have done that and have them know what the job is.

SWICORD [voice-over]: Management has set up the groups to give the worker-owners input into day-to-day operations at the mill. So far, most workers seem to think the increased communication has been a good idea.

SAM LEHINOVICH, mill worker: You're informed more. You know how management is trying to work, you know, and you find out that there are other men in the mill in groups who are doing certain things vis-a-vis newsletters which they send out. And it's being informed, I think someone who is informed is a much better worker.

SWICORD [voice-over]: The company is also counting on workers to help cut costs at the plant. Independent Steelworkers Union president Walter Bish says employees are working like they own the mill.

WALTER BISH, president, Independent Steelworkers Union: One of the big things that they do watch now is waste. I mean, you talk to welders that'll tell you that, you know, when they're welding they use more of the rod than before. You talk to people in the electronics that are very aware of waste in copper; we have scrap barrels and they're very aware that, you know, the money that they could be wasting today is money that could be coming out of their pockets.

WALTER SEBULASEDULA, mill worker: When I come to excess material, something that hasn't been used for quite a number of years, I figure well, I'll put it back in stock and somebody else is going to use it.

SWICORD: Do other workers make those sort of efforts to save money?

Mr. SEBULASEDULA: From all I've talked to, yes.

SWICORD [voice-over]: Gloria LaRue, a steel analyst for The Metalworking News, says the attitude of workers at Weirton Steel may help the company survive.

GLORIA LaRUE, steel market analyst: Number one, you have employees who are genuinely interested in the product they produce, and any steel man will tell you that quality, which is so important to the customer, and so important to maintaining a customer's relationship, is very dependent on employees.

SWICORD [voice-over]: But the formation of the new Weirton Steel has not been without growing pains. Some workers have complained that management has not been receptive to suggestions. But union and management officials claim dissidents are in the minority and Robert Loughhead, who was chosen by Weirton Steel's board of directors to serve as company president, has had to decide how far to take employee participation.

ROBERT LOUGHHEAD, president, Weirton Steel: At the outset, when the whole transaction was envisioned and put together, it was always understood that the place would be run as a business, there would be management and there would be a work force. My commitment is to a participative management style and to employee participation in general, and we'll have that. That does not mean that all 8,200 people can have a voice in every decision.

SWICORD [voice-over]: But keeping the work force happy is now Weirton Steel's only problem. The company must continue to raise money if it hopes to complete plans to spend $1 billion over the next 10 years on capital improvements and pollution controls. The company is also faced with the problem of finding new customers and uses for its tin mill products. Those products have been used to make cans for beverages and foods, but demand for tin mill has been steadily decreasing.

To offset those losses, the company has begun to round up new customers for its automotive and appliance products. Since the split from National Steel, Weirton has formed its own sales force, and so far, the company has been able to round up more than 170 new customers, and Loughhead says Weirton Steel no longer has to rely on National Steel to formulate a marketing plan.

Mr. LOUGHHEAD: We were part of someone else's marketing plan, and now we have our own marketing plan. We've put together a good aggressive sales organization, we've looked at the markets that we think it makes sense for us to serve, and we've concentrated our efforts there.

SWICORD [voice-over]: In addition to it's own sales force, Weirton Steel also has several other advantages over its competitors. Unlike other companies, Weirton does not have to make long-term sacrifices to show short-term profits, because the company's stockholders are also its employees.

Ms. LaRUE: Mr. Loughhead is to make that company viable in the long term, and if that means not making a lot now, but making sure you last longer, then that is what he has to do.

SWICORD [voice-over]: So far this year the profit picture looks good for Weirton Steel. In the first half of 1984, the company reported profits of more than $32 million, and officials believe the next two quarters will also be profitable. All of which is good news for the company's employee-owners, who will share in profits if the company continues to make money. But for many workers at the mill, the full implications of employee ownership and profit sharing have yet to sink in.

Mr. BISH: It's very hard to change overnight from a worker to a worker-owner. The people, employees, myself included, you know, we realize that we bought the place, but I honestly feel until that first stock allocation is made to them, or that first profit sharing check is actually given to them, that then the realization will really hit home that they are actually owners here.

SWICORD [voice-over]: But there are some other realities that Weirton Steel along with other steel makers must face. In the month of July, foreign imports took nearly 33% of the steel market, and while larger companies may get out of steelmaking. Weirton Steel doesn't have that option, because it's in the business to stay. Which may be the company's long-term benefit, because the city of Weirton won't let the mill shut down without a fight.

Mr. BISH: We can't predict exactly what will happen; we're very optimistic that we will be around. If there's going to be one domestic steel company that can survive in the United States, we want it to be the Weirton plant.

HUNTER-GAULT: That report was by Carl Swicord of public station WNPB in Morgantown, West Virginia. Still to come in the NewsHour, two poverty experts offer different views on the poor: just how many there really are, who's to blame, and what's to be done. And Judy Woodruff gives us some insight into the Soviet Union's most durable foreign spokesman, Andrei Gromyko.

[Video postcard -- Salt River Canyon, Arizona]

MacNEIL: In Vienna, the Organization of Petroleum Exporting Countries was advised today to maintain its present prices and levels of production, and that came from the chairman of the cartel's marketing committee, who said it was not necessary to call a full OPEC meeting to discuss the recommendation. And that in all likelihood means oil prices will stay as they are for the immediate future.

In Washington, the International Monetary Fund made public a tentative agreement to refinance Argentina's huge foreign debts, the third largest in the world. If the banks go along, the arrangement calls for Argentina to borrow $4.5 billion next year. For its part, Argentina would agree to reduce its government deficit and cut government spending.

And in Peking, Britain and China initialed an agreement that would return the crown colony of Hong Kong to Chinese control in 1997, if the parliaments of the two major powers approve. Here's a report from Brian Hanrahan of the BBC.

BRIAN HANRAHAN (BBC): For the diplomats, it was time to celebrate the end of a long and difficult negotiation which several times had come to the edge of breakdown. But now they were over, and the secrecy which surrounded them could be lifted. The governor of Hong Kong used a private jet to fly back to the British territory from Peking. Once there he convened a special meeting of the legislative council to tell them about the agreement.

EDWARD YOUDE, governor of Hong Kong: It constitutes a blueprint for a new stage in Hong Kong's development. As such I commend it to this council and to the community at large. With their widely recognized ability to adapt to change and respond to opportunity, I have no doubt that the people of Hong Kong can make it work, and can build for themselves a successful future.

MacNEIL: At the State Department, Secretary of State Shultz issued a statement welcoming the agreement as a solid foundation for the future of Hong Kong. And in the Middle East, assistant secretary Richard Murphy and Yasir Arafat of the Palestine Liberation Organization both arrived in Amman, Jordan, today amid speculation that the United States will mediate a new round of bargaining on the Palestinian problem. The speculation was prompted by King Hussein's decision to resume diplomatic relations with Egypt, which were broken off when Egypt made peace with Israel in 1979. Israel applauded Jordan's decision today, but two hard-line Arab states, Syria and Libya, threatened to take action against Jordan. Charlayne? The Poor: Who's to Blame?

HUNTER-GAULT: The Census Bureau reported today that more than 66 million Americans, nearly a third of the U.S. population, receives some form of direct assistance from the government. The majority of benefits come in the form of Social Security payments or Medicare assistance. The study also revealed that nearly one in five Americans received benefits because they are poor. That finding comes on the heels of two major studies released this week indicating that poverty in America is increasing despite the economic recovery. On Monday, the U.S. Conference of Mayors reported that four out of five cities responding to a recent survey showed an increase in the number of poor people since 1982. Also this week the Congressional Caucus for Women's Issues released a report showing that 17% of American women over 65 live in poverty.

The Census Bureau defines a family of four as living in poverty if it earns $10,178 a year or less. For an individual under 65, the figure is $5,180 or less a year; someone over 65 is considered living in poverty if earning $4,775 or less a year. Robin?

MacNEIL: Overall, the government estimates that more than 35 million live at or below the poverty line. But some analysts say that figure is too low; one of them is Michael Harrington, a political scientist and activist, who's just released his own study, called The New American Poverty. Mr. Harrington is widely credited with inspiring the War on Poverty during the 1960s, after he published an earlier work called The Other America.

Mr. Harrington, you think poverty is greater than government statistics show; what do you base your estimate on, and what is your estimate?

MICHAEL HARRINGTON: Well, not only greater -- greater, yes, but also much deeply rooted, more intractable, more difficult to deal with. I base it on the fact that I think there are areas in which we underestimate the numbers of the poor. We don't count the undocumented people in many of our statistics. There are perhaps six, seven, eight million -- most of them are poor. The Reagan administration even admitted that when they talked about Simpson-Mazzoli and said if we legalize these people, there will be a tremendous welfare cost.

MacNEIL: Simpson-Mazzoli was the bill still stuck in Congress to reform immigration.

Mr. HARRINGTON: Right. And then there are other technical reasons why I think that the problem of poverty has been understated, but more than the numbers, what I think is now happening is new types of people are turning out to be poor. There are blue-collar workers who had relatively well-paid union jobs, who when they lose their job, lose their health care, the value of their house disappears, their savings are really taken away from them. There is a third world within the United States.

MacNEIL: And when they find employment, they find employment at a lower level.

Mr. HARRINGTON: At a much lower level. You have now in New York City, Los Angeles, all the major cities in the United States sweat shops coming back. In the age of the computer, we have sweat shops now, a third world within the United States. You have an enormous increase in the poverty of women, and in some ways the most frightening of all, the very young are poorer than the rest of us. According to the official government figures, 15.2% of the Americans are poor; 25% of the Americans under six years of age are poor -- over 20%, over one out of every five children in the United States, is poor. And what bothers me about these trends is that I think that they are due to massive macroeconomic changes.

MacNEIL: Let's come to the causes in a moment. What is your estimate? I used the figure 35 million, which is the government's estimate of people below the poverty line; what is your estimate?

Mr. HARRINGTON: Forty to 50 million.

MacNEIL: Forty to 50 million.

Mr. HARRINGTON: In other words, I think, roughly the same number of people are poor in 1984 as were poor when I published The Other America in 1962. The difference is it's a smaller percentage, the population is larger. So there has been some progress. What is very disturbing about the size of the poverty population, is since 1979 every single year poverty has gone up including 1983, a year of economic recovery.

MacNEIL: How? How, including a year of economic recovery, when as the administration points out, so many -- six million new jobs were created.

Mr. HARRINGTON: Well, I think there are a number of reasons. One, the entire world economy is being transformed. The South Koreans now make steel and automobiles, that are going to compete in America. Smokestack poverty, so to speak, comes from there. Secondly, we now tolerate in good times -- these are good times -- we have an unemployment rate of 7.5% -- 8.5-9 million people are of work. That doesn't just mean they have got problems; that means that the whole occupational structure at the bottom, it weighs down, it makes labor cheaper. At the same time there's the phenomenon you mentioned a few minutes ago, which is that some people lose jobs and get new jobs which pay less. They don't necessarily become poor; what I'm saying, in this recovery there could well be an occupational shift downward which at the extreme creates a new poverty, but which also affects a lot of people who are not poor, but find themselves, as the phrase goes, or the word goes, sliding.

MacNEIL: So these are large economic forces involving foreign competition and what else, and actions by the Reagan administration? Are you accusing them of having created more poverty?

Mr. HARRINGTON: No. I think that the problem of the new poverty predates Ronald Reagan. I think he made the very worst of a bad situation. We know from the Urban Institute, which is an organization that has Republicans on its board of directors as well as Democrats, that the poor under the Reagan years have lost about 8% of their income, and the rich have increased their income by about 8%. We know that the President particularly attacked the working poor, ironically; that is to say in America the working poor -- the deserving poor -- they're not lazy, they're not cheats, all of those nonsensical stereotypes that we have. The working poor are hardworking people, yet those are exactly the people that Reagan went after and took Medicaid and food stamps away from them.And I think that has increased the poverty problem of a lot of people. Finally the massive unemployment which the President used as a means of fighting inflation, obviously that is one of the greatest single causes for the increase of poverty.

MacNEIL: Mr. Harrington, we'll come back. Charlayne?

HUNTER-GAULT: For a different view of poverty in America we have Charles Murray, a senior research fellow at the Manhattan Institute for Policy Research, a New York-based think tank. Mr. Murray has just published a book on poverty called Losing Ground: American Social Policy from 1950 to 1980. Mr. Murray, what's your estimate of what's happening with the poor? Is it going up, as Michael Harrington suggests, or is the government undercounting it, just what?

CHARLES MURRAY: I think that Mr. Harrington's description of what's been happening to the numbers of poor is by and large accurate. I'm not going to argue about whether it's 50 million or 40 million; for one thing, poverty doesn't occur when you earn less than $10,278. It's a continuum on a number of dimensions. But the basic contention that poverty has been increasing and thast it's becoming more intractable I think is absolutely correct. There are a couple of noneconomic dimensions that I would like to add to his description. It is not just that people continue to be poor or have gotten poorer in recent years. It is also that a lot of the people who are poor are living in places where the quality of their life has been degraded in a number of other ways. If you are a black parent in the inner city, and you have children, over the last 20 years you have seen the quality of education they receive go downhill. You have seen in the streets where your children have to go out and walk and where you have to go out and walk, crime increase enormously. These are forgotten when we talk about poverty, but if the question is, what is it like to be poor in the United States today, and the statement is, it's much worse than it was years ago, I think is absolutely correct.

HUNTER-GAULT: But you don't want to get into, or you don't want to speak on the point that he was making, that regardless of the things that have happened, the number has remained relatively the same?

Mr. HURRAY: What happened, if you look at the poverty statistics over the last 25-30 years, is that we had a steady reduction in poverty -- more or less steady with time out for recessions in the '50s -- down through about 1968. Now, I want to focus right now on the working-aged poor. We made a lot of progress against poverty among the elderly, and I think a great deal of this progress can be traced to the increases in Social Security, which took place in the '60s and especially in the early 1970s. Among the working-aged poor, some very strange things started to happen around 1968. Reductions which had been continuing quite steadily slowed and then stopped. Moreover, when the War on Poverty started, it was not in order to give people enough money to take them off the poverty line. Instead, it was to get them off the dole period, so that they could make a decent living for themselves independently. If you measure progress toward that goal, it is not just that progress against poverty leveled off in the 1970s, it started to go up. About 1968-69.

HUNTER-GAULT: So what are you saying, are you saying that the War on Poverty do you think was a success?

Mr. MURRAY: No. The legislation, the court decisions, the reforms that transformed, really, our attitudes toward social policy from 1964 to '67, didn't really take hold in terms of budgets until the Nixon years, oddly enough. The budgets for these programs during the Johnson years were much more like those of the Kennedy years than they were of the Nixon administration. And if you plot them, they continue to rise throughout the 1970s in large amounts. No, it wasn't the War on Poverty that was reducing poverty down through 1968, it was a very, very healthy economy -- an unprecedently healthy economy.

HUNTER-GAULT: So what happened? I mean, I understand that you feel that the War on Poverty was largely to blame for this, whether it's going up or down, you still have a large pool of poor people now.Is that a correct -- yes?

Mr. MURRAY: It wasn't any one program. It's not that if we changed the rules on AFDC we could correct the mistakes we made then, or any other single change of any type. Nor, I would stress, is it just economic. The best way I can put it is, that from 1964 to '67, we changed the rules of the game for poor people. We didn't change them for the middle class, we changed them in terms of education -- if you were a poor youngster going to an inner-city school, the kinds of demands and expectations of you changed. They went down. The toleration of behavior in the classroom which prevented learning -- that toleration went up. In the area of law enforcement/criminal justice, we changed our attitude toward incarceration. In economics we changed our attitude and our incentives that affect low-paying jobs.

HUNTER-GAULT: So the bottom line of that was what?

Mr. MURRAY: The bottom line is, that it made sense, made sense, for people I would say roughly in the age 16-24 to do things in the short term that increased their income and maximized their leisure, if you want to put it in the terms the economists use, and --

HUNTER-GAULT: And eventually created more --

Mr. MURRAY: Locked them in, so that they reached the middle 20s with no recourse.

HUNTER-GAULT:What's your response to that, Mr. Harrington?

Mr. HARRINGTON: I disagree. That is, strangely enough, for Mr. Murray and I agree on a lot of things, that is to say, that the progress stopped about 1968. But I don't think it's because of the programs of the War on Poverty. For example, you look at Aid for Families of Dependent Children -- that plus food stamps are the two main money investments that the federal government made in the poor, in the means-tested program. Aid for Families of Dependent Children has only about 20% of its recipients long-term recipients. More than half of the women who get AFDC receive AFDC for less than two years. They receive AFDC not as Mr. Murray argues, because their incentives to work have been corrupted by the overgenerous War on Poverty, but because a man walks out on them. They get out of AFDC by work.I look at the statistics, I don't find all these disincentives. I'm perfectly willing to agree that for some people, I think a rather small group, there were disincentives to work that were an unintended consequence of some of the federal programs. But I think overwhelmingly what explains the decline in progress against poverty is not the War on Poverty with an unintended effect, it's the fact that the American economy, starting precisely in 1968-1969, began to go on a roller-coaster, ups and downs, and you look at the poverty figures, they follow those ups and downs. I don't think that's the data to prove this incentive thesis.

HUNTER-GAULT: Mr. Murray -- let me just get Mr. Murray to respond to that.

Mr. MURRAY: The problem with that is that the behaviors that led to a lot of the difficulties didn't start when the economic problems started. For example, you take black teenagers. They started to drop out of the labor force, meaning they weren't looking for jobs, in unprecedented numbers historically unheard of, in about 1965-66, when the national unemployment rate was running at about 3.4 or 3.6%. When the economy was overheated.

HUNTER-GAULT: And you think that's because federal programs were doing too much for them?

Mr. MURRAY: No, it's not that simple. It is that when you're poor, and you are living from day to day, you're responding to the world around you, and it changed in a whole series of ways. It -- I can't emphasize too much that we react mechanically from the right, we talk about welfare cheats; from the left we talk about if we only had enough jobs and everybody would go out and be employed and be happy, and that's not what the experience tells us.

HUNTER-GAULT: All right. Let me ask you very briefly, what is your solution to the problem that we have? Regardless of how we got there, we've got one. What in brief would you say would be the approach to dealing with that now?

Mr. MURRAY: The first step, and I guess the one I'm most interested in, is persuading people that the easy explanations don't work, and that a lot of the nostrums that we have relied upon from both sides aren't going to work. If you ask me more extensively what we might do, I would say this: change the rules of the game again so that it makes sense, particularly for young people, to get and hold onto a low-paying job, if that's the situation you're in.

HUNTER-GAULT: You mean, something like a sub-minimum wage or something like that?

Mr. MURRAY: To hold onto a job of any sort. Make it reasonable to do those things in those critical years when you don't think very far ahead, which are going to permit you as you enter into your 20s to be permanently out of poverty.

HUNTER-GAULT: And to take the government more out of it, out of it more than it is now?

Mr. MURRAY: Drastically reduce it, yes.

HUNTER-GAULT: Mr. Harrington, very briefly, your prescription is to have more government involvement as I understand it, is that --

Mr. HARRINGTON: Well, in the sense that I think there has to be full employment, would be the absolute key. You cannot solve the problem of poverty if you take 7.5% unemployment as a success, and I think that will take some rather radical doing.

HUNTER-GAULT: All right. Mr. Harrington, I'm sorry, we have to hear the other prescriptions at a later time. Thank you for being with us in New York, and thank you, Mr. Murray for being with us in Washington. Robin?

MacNEIL: Once again the main stories of the day. In the first high-level meeting of American and Soviet officials in seven months, Secretary of State Shultz and Soviet Foreign Minister Gromyko talked for nearly three hours.

A House committee approved a request for emergency funds to improve security at American embassies.

Congress completed passage of a bill requiring tougher health warnings on cigarettes.

A census report said one American in three gets some government assistance.

Finally tonight, a closer look at the man who's dominating so much of our news this week, Andrei Gromyko, the Soviet foreign minister. Tomorrow, Gromyko gives the Soviet response to President Reagan at the United Nations General Assembly, and he sees Walter Mondale. On Friday, Mr. Gromyko goes to Washington for his much-heralded meeting with Mr. Reagan. Tonight we close with a Judy Woodruff profile of this incrutable man, for whom Ronald Reagan is just another in long line of American presidents. Gromyko: Soviet Point Man

MALCOLM TOON, former U.S. Ambassador to USSR: Now, one of Mr. Gromyko's most annoying traits, and you can talk to Mr. Vance or Mr. Kissinger or any of the others that have dealt with him personally about this, and they will confirm this, is the fact that he always says to you, "Mr. Secretary, I was there.I know what went on. And you weren't there." And in most cases, he's right, he was there. He has attended every important international conference of the last 25 or 30 years. The man's expertise is really very impressive.

JUDY WOODRUFF [voice-over]: Andrei Gromyko was only 29 when he took over the American department in the Soviety foreign ministry. He later became counselor to Maxim Ligvinov, then Soviet ambassador to the United States. Gromyko succeeded Ligvinov as Stalin's wartime ambassador to the U.S., a boyish diplomat presenting his credentials to President Roosevelt in 1943. He presided over the Soviet embassy in Washington until the war's end. Here, entertaining Vice President Henry Wallace on the 26th anniversary of the Soviet revolution. Next, he was the Soviet's first permanent representative to the fledgling United Nations, then elevated to deputy foreign minister, and ambassador to Great Britain -- even donning unproletarian morning clothes to present his credentials to the queen. Promoted to first deputy foreign minister in 1953, Gromyko steadily became the Soviet Union's primary contact with the West. U.S. secretaries of state came and went; Gromyko stayed on. The cold war years with John Foster Dulles and his successor Christian Herter; eyeball to eyeball with Dean Rusk over the Cuban missile crisis and the Vietnam War.The goodwill era with William Rogers; detente with Henry Kissinger. Detente unravels: the Carter administration's Cyrus Vance, followed by Edmund Muskie. A new cold war with Alexander Haig, and then a showdown with George Shultz over the Korean Air Line disaster. The Shultz-Gromyko meeting last fall in Madrid was also a disaster; no handshakes, just blunt talk in icy intransigence over the KAL incident. Within three months, major arms control talks collapsed, bringing Soviet-American relations to a stall.

In the year since that meeting, Gromyko has proven once again that he outlasts not only American leaders, but perhaps more incredibly, his own leaders as well. Fifteen months after Leonid Brezhnev's death, his successor Yuri Andropov died. He had been out of sight and incapacitated most of his tenure. Konstantin Chernenko replaced Andropov, and in the shuffle, Gromyko kept his titles: first deputy prime minister and foreign minister, remaining the chief architect of Soviet foreign policy. And once again another ailing old man, Chernenko, must depend on Gromyko.

DMITRI SIMES, Soviet expert: He is clearly at the peak of his power.

WOODRUFF [voice-over]: Soviet expert Dmitri Simes talked with reporter David Shapiro.

Mr. SIMES: He's a very influential member of the Politburo, not only chief implementer of the Soviet foreign policy, but the man who really makes major input in formulating it. But certainly it would be a mistake to assume that he is a free agent, that he can conduct any major deals on the spot. He will have to consult Moscow about anything of importance.

WOODRUFF [voice-over]: Gromyko's survival can be ascribed to his steadfast loyalty to the Politburo, the cadre of elders who rule Russia. Over the years, Gromyko remained a technocrat, shrewdly aloof from internal power struggles. Experts say he did the Politburo's bidding for years, until he was made one of them in 1973.

HENRY KISSINGER, former Secretary of State: When he was foreign minister, he was clearly a subordinate. As a member of the Politburo, he more and more would take over a discussion and would not hesitate to break into something that was being said, which would have been unthinkable before he was a member of the Politburo.

WOODRUFF [voice-over]: In a lengthy interview with the NewsHour last year, former Secretary of State Kissinger reminisced about his dealings with Gromyko. He described his former adversary as clever, tenacious, and immovable.

Mr. KISSINGER: We are not comfortable with deadlock. He is not uncomfortable with deadlock. And so, negotiations with him tend to be prolonged, technical, and time consuming. On the other hand, and maybe God will punish me for this, I rather liked him. He has, despite the dour exterior, a rather good sense of humor and I have found on the whole that he kept his promises.When he made one, which was not a very frequent occurrence.

WOODRUFF [voice-over]: President Reagan is not likely to extract any promises or even to want to talk details, as he made clear in announcing Gromyko's visit.

Pres. REAGAN: I think maybe the time has come that anything that can perhaps get a better understanding between our two governments maybe should preceed any resumption of dealings on specifics, if there can be an easing of any suspicion or hostility.

Mr. SIMES: What is important is for Reagan not to be Reagan. No jokes, no constant smiles, no anecdotes. So I think it is important for the President to be tough but tactful, and by being tactful, I mean to be tactful in terms of understanding the Soviet mindset. They are really not terribly interested in American lectures, in American judgments, in American opinions. They are interested inAmerican intentions and American bargaining positions.

WOODRUFF [voice-over]: So far, at least, President Reagan has signaled his intentions: a warm handshake in Sunday night receiving line in New York, unusually conciliatory language in Monday's speech to the U.N. General Assembly.

Mr. SIMES: Well, it is important for Mr. Gromyo to come back to Moscow and to report to the Politburo, "I've talked to talk to Mr. Reagan. He is very tough, he made it clear that there would be no unnecessary concessions on the American part. He added, he is also, a tough bargainer, a reasonable man, a man who is committed to negotiation with us, in short, we don't like to deal with him, but it's still possible." If that is what Mr. Gromyko is going to tell to the Politburo, I would consider the meeting a success.

MacNEIL: As The Washington Post put it yesterday, Gromyko was already in his present job when Walter Mondale was still a fledgling lawyer in Minneapolis, and Ronald Reagan was still hosting General Electric Theater on television.

Good night, Charlayne.

HUNTER-GAULT: Good night, Robin. That's our NewsHour for tonight. We'll be back tomorrow night. I'm Charlayne Hunter-Gault. Good night.