The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, Pres. Gorbachev told East Berliners to be patient for change, a final train load of refugees fleeing East Germany arrived in the West, Pres. Bush defended his Panama coup behavior as criticism continued in Congress. We'll have details in the News Summary in a moment. Judy Woodruff is in Washington tonight. Judy.

MS. WOODRUFF: After the News Summary we begin with the ongoing tangle in Congress over who pays for catastrophic health care for the elderly. We have an update on today's happenings, then get an assessment from Congressional expert Norman Ornstein. Then we look at that and the other Washington developments of the week with our regular Friday analysis team of Gergen & Shields. Then a documentary report on Soviet Pres. Gorbachev in East Germany. Our Justice Correspondent Nina Totenberg fills us in on a rift brewing in the highest ranks of the judiciary and finally essayist Amei Wallach discovers a most unusual garden in Minnesota.NEWS SUMMARY

MR. MacNeil: Soviet Pres. Mikhail Gorbachev told East Berliners to be patient today and said he had complete confidence in East Germany's ability to solve its growing problems. He arrived to help celebrate 40 years of Communist rule at the end of a tumultuous week in which thousands of East Germans fled from the system. He was greeted by the 77 year old East German leader, Eric Honecker. Thousands of East Germans lined the route of his motorcade. After laying a wreath at the tomb of the unknown soldier, reporters asked Gorbachev about pressures for reform. He said, "We know our German friends well. They're specialists in thinking things over and making corrections if necessary." Some in the crowd called "Gorby, Gorby", and some shouted, "We're staying here." As his began, the last train load of East Germans fleeing the Communist regime arrived in West Germany. The 700 people on board brought to more than 45,00 the number who have fled in the past month. They said the train had been sent along minor routes to stop more people from coming aboard. We'll have a fuller report on Gorbachev's day in East Berlin later in the program. Judy.

MS. WOODRUFF: Pres. Bush said today he does not regret his decision not to intervene militarily in this week's attempted coup in Panama. The President said reports that the rebels offered to hand over Panamanian Gen. Manuel Noriega to U.S. authorities were untrue.

PRES. BUSH: I want to see Noriega out of there. I think the record will show that there was never a chance to have him handed over to us. I think that was one of the things that caused concern, because there was a report he was offered to our military and they wouldn't take him. That simply is not true. I'm not just being stubborn but as I look at all the information, I wouldn't today have made a different decision then. And I think that'll get clear when people understand the fact.

MS. WOODRUFF: The President's defense of his administration's actions came as members of Congress from both political parties continued to be critical. After a closed door briefing on the matter, Senate Armed Services Committee Chairman Sam Nunn of Georgia said he was concerned by the administration's lack of advance planning.

SEN. SAM NUNN, [D] Georgia: My concerns at the hearing testimony was that I do not believe that there was clear policy guidance. I do not believe the people on the ground had clear policy guidance had clear policy guidance from Washington. We had a definite and longstanding policy in this country of encouraging a coup. The President, himself, said that. This was not something that was covert. It was overt and declaratory in terms of policy. But there were no real plans as to how the people on the ground should react to a coup if it occurred. Sometimes you have to consider the fact that your policy might succeed.

MS. WOODRUFF: The President's comments today came as he left Walter Reed Army Hospital after successful surgery to remove a cyst on one of his fingers. Before the outpatient procedure, Mr. Bush made a little history when he took a walk on the floor of the U.S. Senate. Although Presidents have given formal addresses in the Senate chamber, a Senate historian said there was no record of a previous sitting President making an informal visit to the floor.

MR. MacNeil: Democrats in the Senate proposed to drop what they call extraneous matters from the bill to cut the federal deficit, including the President's capital gains tax cut. Majority Leader George Mitchell said the legislation known as the reconciliation bill had been cluttered with hundreds of provisions that had nothing to do with deficit reduction.

SEN. GEORGE MITCHELL: Last night I indicated my belief that the purpose of reconciliation was to achieve meaningful deficit reduction, and that the best way to obtain that objective was to have a stripped down bill which would in the most direct fashion provide the revenues and spending reductions necessary to achieve the targets of this year's budget.

MR. MacNeil: But Pres. Bush said he did not consider the tax cut an extraneous matter and Spokesman Marlin Fitzwater said they opposed stripping it from the deficit reduction bill. Meanwhile, the Senate debated the catastrophic health insurance program repealed by the House this week. It defeated an attempt endorsed by the Senate leadership which would have saved part of the plan. Excerpts from the debate follow after the News Summary.

MS. WOODRUFF: The nation's unemployment rate edged up .1 percent in September according to government figures released today. Data showed that most of the increase to 5.3 percent was due to a loss of some 100,000 jobs in the manufacturing sector. The report was weaker than many analysts had expected, with several economists expressing particular concern about the cutbacks in manufacture and payrolls.

MR. MacNeil: In Norfolk, Virginia, fire struck a nursing home last night, leaving nine people dead and almost a hundred injured. Fire investigators said today that careless smoking was the cause. The fire was mostly contained in the room where it began, but smoke spread throughout the 172 bed, Hill Haven Rehabilitation & Convalescent Center, and most of the injuries were due to smoke inhalation.

MS. WOODRUFF: Israel today rejected an Egyptian plan for a dialogue with Palestinians. Egypt had proposed talks in Cairo between Israelis and a Palestinian delegation over the future of the West Bank and Gaza Strip. The vote in the Israeli cabinet was split along party longs. The six members of Prime Minister Shamir's Likud Party voted against it. The six members of the more dovish labor party voted for it. The tie vote meant the plan was defeated.

YITZHAK RABIN, Labor Party: I believe that the peace initiative of the Government of Israel suffered today a setback by the mere fact that the Egyptian proposal to bring about such a meeting between Palestinians and Israelis was rejected.

ARIEL SHARON, Likud Party: I believe that that decision will contribute to the peace. Now it's clear that the Israeli Government got one plan and that is the Israeli Peace Initiative.

MS. WOODRUFF: The Israeli Peace Plan mentioned by Sharon calls for elections in the occupied territories for the purpose of choosing Palestinian representatives to negotiate with Israel. In the Egyptian plan, Egypt chooses the Palestinian representatives. After the Israeli vote today, Secretary of State Baker called the Israeli and Egyptian foreign ministers to try to keep the peace process alive. In Lebanon, two Swiss Red Cross workers were kidnapped today, there has been no claim of responsibility. This raises the total number of Western hostages in Lebanon to 19.

MR. MacNeil: There was a hijacking drama today in Burma, where two students commandeered an in country flight, ordered the pilot to fly to a military base in neighboring Thailand and threatened to blow up the plane unless their demands were met, including an end to their country's harsh military rule. After eight hours, the students had released all 83 people on board and had apparently given up on their demands. That's it for our summary of the day's news. Just ahead on the Newshour, Congress wrestles with catastrophic health care, Gergen & Shields, Gorbachev in East Germany, a legal problem for Chief Justice Rehnquist, and an Amei Wallach essay. FOCUS - POLITICS AS USUAL?

MR. MacNeil: Tonight we go first to politics. We'll have our weekly wrap-up with Gergen & Shields, but first we turn to Congressional politics. Budget matters were at the center of attention on Capitol Hill today. As reported, the President went to the Senate topush for legislation cutting capital gains taxes. Meanwhile, Senate Democratic leaders worked on crafting a budget bill without the capital gains tax cut and hundreds of other provisions that have nothing to do with reducing the deficit. While all this maneuvering was going on behind the scenes, the Senate began debate on whether to repeal the catastrophic health program. And that's where we begin tonight, with a report from Kwame Holman on today's floor action.

MR. HOLMAN: The Senate today moved to undo work it was so proud to have accomplished just a year ago. Protecting senior citizens against the costs of catastrophic illness seemed like a good idea back then. But when some seniors got a good look at how the program was going to be financed, they started a fire storm of protest. And when some members of Congress saw powerful House Member Dan Rostenkowski being chased down a Chicago street by a group of angry seniors, those members were forced to admit they had made a mistake.

SEN. PHIL GRAMM, [R] Texas: For the first time in history, we provided an entitlement that people paid for directly and the net result is they hate it.

SEN. CONRAD BURNS, [R] Montana: I think when I first come here in January, I didn't think anybody else could write letters other than our senior citizens. That's all I got, by the buckets full. So we knew we had to come up with some sort of a plan to revamp this thing called catastrophic health.

MR. HOLMAN: Earlier this week, the House of Representatives simply repealed the entire catastrophic health care bill. The Senate had to decide if there were any parts of it worth saving.

SEN. JOHN HEINZ, [R] Pennsylvania: What the Senator from Massachusetts and I propose to do is very simple, is to address every single one of those issues that is of great unfairness. Namely we eliminate the supplemental premium, the surtax, the tax on the tax, as some people call it. We get rid of the part [B] cap so called and we keep the benefits that the people of this country, our senior citizens, and their children, know are absolutely essential to staying out of a nursing home, to avoiding institutionalization. I'm referring to the I'm referring to the long-term care benefits for home health, the preventive care, mammography. I'm referring to the hospital catastrophic. But above all, Mr. President, I'm referring to the fact that the Kennedy-Heinz amendment retains coverage for prescription drugs.

SEN. EDWARD KENNEDY, [D] Massachusetts: And when we are talking about the catastrophic nature of medical bills, it is in this area more than any other area that our seniors are affected.

MR. HOLMAN: Some Senators proposed for paying for all the benefits through a new tax on the richest 600,000 people in America.

SENATOR: It is unfair to require the senior citizens of this nation to bear the full cost of the benefits they receive under the program. We don't do this to the recipients of any other government program. Farmers don't bear the benefits or the entire cost of the farm programs. Students don't bear the full cost of their guaranteed student loans. And under the basic Medicare program, itself, the elderly don't shoulder the entire costs of benefits. Sen. Levin and I are saying in our motion to recommit is simply to extend the same tax rate as middle income Americans are paying to those 600,000 Americans that are making over $209,000 a year, and at the same time reduce, cut taxes for over 14 million Americans.

SEN. CARL LEVIN, [D] Michigan: We're going to substitute for an unfair surtax a very fair extention of the 33 percent tax rate, the marginal tax rate, on families over $204,000 of income that now actually pay a lower marginal tax rate than do families with less marginal income.

SEN. CONNIE MACK, [R] Florida: I don't believe that this is a good amendment. The reason I say that is because it keeps in place a program that was ill conceived, it keeps in place a program which the seniors of my state are telling me they didn't want, they don't want to pay for it, they don't need. In fact, what they're telling me is that roughly 90 percent of the seniors in this country have already gone out and purchased some form of protection against catastrophic illness.

MR. HOLMAN: A plan by Republican David Durenberger of Minnesota had the backing of Senate leaders of both parties.

SEN. GEORGE MITCHELL: Further, it retains the concept, albeit in a very modest manner, of a supplemental premium. Further, it keeps the crucial Medicaid improvements that helped provide an absolutely necessary safety net for the low income elderly and the disabled. The amendment is secondly sensible in its benefit structure. It retains benefits needed during a medical catastrophe such as extended hospitalization, and it places a realistic cap on physician-related expenses.

SEN. ROBERT DOLE: I think the Durenberger reflects good health policy and good fiscal policy. It protects those we should care the most about, and the people we ought to care the most about are the sickest of our elderly.

MR. HOLMAN: But throughout the day all amendments failed. And tonight the Senate appeared to be moving toward ending the controversial surtax on seniors' incomes cutting back the benefits of the catastrophic health care program, or joining the House in simply repealing it altogether.

MR. MacNeil: Joining us now to help sort through the various political and budget maneuvers unfolding on Capitol Hill is veteran Congress watcher, Norman Ornstein, resident scholar at the American Enterprise Institute in Washington. Norm, first on the catastrophic health insurance, it's evident that the Senate isn't quite as repeal minded, as simply repeal minded as the House, how do you read the difference?

MR. ORNSTEIN: Well, of course, what the House did was extraordinary, Robin. The Senate is moving in a slightly different direction. To repeal an entire major social program the year after it was enacted has never been done before. It's a reflection of extraordinary skittishness in Congress in general, in the House in particular. The House has had a terrible year. They've started out with the pay raise and saw a fire storm of criticism from their constituents. They've had a terrible time with leaders being thrown out, with members getting caught under ethics probes. They don't know quite what to do. We're not going to stand up to any group of constituents that is determined to see something change. And when they had this group of well off seniors to gather around the country, an extraordinarily powerful group politically, they're active, they're sophisticated, they've got time on their hands, and they've got resources.

MR. MacNeil: Although a minority of the age group.

MR. ORNSTEIN: Clearly no more than 1/4 are paying the full surtax in this case. Those were people who did have supplemental insurance, were getting from their perspective nothing and having to pay a great deal for it, when they stood up and said you cannot do this, basically the House said we don't even want to begin to explain why we should keep some parts and not others, let's do away with the whole thing. They did it by almost a 6 to 1 margin. The Senate is not as quite as insecure right now as the House is. But after that huge House vote, it's going to be difficult to do more than retain a few shreds of this program and undoubtedly the surtax, itself, will be done away with entirely. But of course this issue also gets caught up with the budget debate because this is being considered not as a separate provision, but as far as an overall budget proposal. It may get taken out, the passions may die down a little bit. We may see it taken up again when there's a little more rationality here.

MR. MacNeil: Let's move on to that budget debate. There is another element which is attached to that, and that is the capital gains tax cut, which the President wants so much and where he got a victory in the House. Now Sen. Mitchell said, we heard him say he wants to strip that and everything else away from this reconciliation bill, the deficit reduction bill. Explain to us in simple terms what's happening here, because it's very complicated.

MR. ORNSTEIN: It is and it's the usual budget mess and more, Robin. The new fiscal year began October 1, happy New Year by the way. Presumably all of the budget elements that would reduce the deficit under the Gramm-Rudman provision to $100 billion in this fiscal year of 1990 should have been in place. They are not. We have this overall package that orders all the other committees to get in line. We have got all the appropriations bills that are not yet passed. And we have a deadline now of October 15th, if we don't meet that target, they have $10 billion cushion built in to 110, then we'll get across the board budget cuts known as sequestration, what amount to perhaps 17 or 18 billion dollars, half from defense, half from domestic programs, it would bring some chaos to the process. They're trying now because they are nowhere near being completed. THe House has passed this overall budget package called reconciliation with all kinds of bells and whistles attached. It's the only train going out of the station. Everybody who wanted something threw their baggage on board it. The Senate has already added a number of additional elements, a tax bill very different from the one that the House put on that basically loses revenue because it's all kinds of tax breaks. Now as we approach this deadline with the possibility of air traffic controllers being eliminated and hospital costs suddenly going up, loans being recalled and a variety of other chaotic things occurring, members of Congress and both parties are getting some cold feet. They'd like to streamline this process. The process of negotiating House and Senate differences would be enormously complex, would take us well past the 15th. Sen. Mitchell is proposing something which has been met with receptive ears by Republican leaders in both Houses of Congress, which is to say let's deal with capital gains, with catastrophic health insurance, with child care, all of which were added on by the House, afterwards. We'll deal with them separately, we will promise to deal with them, but right now let's just get to the point where we can come under that Gramm-Rudman target so that we don't have to go over the cliff with the sequestration.

MR. MacNeil: Before we come back to that, it's hard to understand such a short time after the much praised tax reform that Senators and Congressmen are in there putting ornaments on the Christmas tree again with all their favorite tax loopholes and introducing all kinds of things again. One of the things I read was a tax break for tuxedo rental institutions or something like that. How does the psychology change so rapidly?

MR. ORNSTEIN: Thank God the black tie wearers will be safe. Well, of course, this is a traditional thing in American politics. With tax reform in 1986, we expected we were going to scrape the decades of barnacles off the hull and it would stay relatively clean for a while. But when the capital gains issue came up, which was a central part of the overall tax reform process in 1986, we're going to eliminate a lot of special provisions and preferences, including special rates to lower all the rates, when that came up again, as Pres. Bush pushed it very hard earlier this year, and it suddenly began to move forward, it opened up the process. Democrats who saw they didn't have the votes on this issue said, well, if you're going to do that, we're going to raise the top rate, we're going to bring in a new benefit for Individual Retirement Accounts which were also taken out in large measure in 1986, and then once you've opened up that process, it's very difficult to resist other special importuning. Senators got up on the floor yesterday after passing a set of provisions that ranged from small ones for tuxedo rental owners to huge ones for ethanol producers and timber companies and very large people who had passed their fortunes on to their heirs, and said we're ashamed of ourselves, things got out of hand here, let's try and step back a little bit. Pres. Bush though wants that capital gains cut very badly. He'd rather see us go at this point to a sequestration, if he can hold onto it, but it's not at all clear that he'll be able to.

MR. MacNeil: Let's talk about the sequestration, the automatic cuts that occur as you've described by October 15th, under Gramm- Rudman, if they haven't arrived at some agreement. Who stands the most to lose, the White House or the Democratic leadership if that happens?

MR. ORNSTEIN: Politically probably the country is not going to blame Pres. Bush. The blame for the deficit issue has been so diffuse in the past, which is part of our problem. That's not likely to change. What we've had here is a very difficult game of chicken though between the White House and the Democrats in Congress. One part of it is Democrats saying we'll go for the sequestration, the car going over the cliff, and we'll handle it with our domestic programs, you won't be able to take an 8 or 9 billion dollar across-the-board cut in defense when already you're facing difficulty figuring out how to pay for programs.

MR. MacNeil: That would be on top of cuts that have already been made.

MR. ORNSTEIN: On top of all the cuts that have been made, at this point about $8.5 billion mindlessly done, not by picking out individual programs, cutting across-the-board with some exceptions like personnel, which make the cut even more difficult for weapons, for example. The White House has said we can handle that, you aren't going to be able to handle a cut in those domestic programs that you like so much, leaving aside entitlements, most of which are pretty much removed from this, and you're the ones who will blink. It's gone on in this fashion and at this point neither side has really blinked. The Congress has tried to get the President to back down here a little bit here as it's getting more skittish about things. The chances are, Robin, we have seen a couple of these sequesters occur before, one in the first year that Gramm- Rudman had existed with a limit placed on it of $11 1/2 billion, another one in 1987 after the market crash, but it lasted only a month or so. People saw the horrors created in the short-term, which, of course, are to some degree pushed by people who are bureaucrats with programs to make it look worse than it actually is, and then Congress and the President recoiled from this and cobbled something together quickly. But we could go through a month where the big losers are going to be students who are pushing for loans where all of a sudden from the short-term origination fees will go up, people wanting to take airplanes in different places because in the short-term we'll lay off air traffic controllers, we won't be able to pay for all of those things. There will be a lot of discomfort for a lot of people out there in the country and then we'll probably come to our senses. Much of this is a generation of an artificial crisis, because we can't agree on priorities and the responsibility is so diffuse once we get that crisis generated, many members of Congress hope it will happen so that we can perhaps jump start the process and come to an agreement here. Once again the budget process has simply gotten out of hand here and now as we see what's happening in the House and Senate, we're seeing some modest attempts to rein it back in, but we're careening towards some sort of modest crisis.

MR. MacNeil: Norman Ornstein, thank you very much for making it so clear. Judy. FOCUS - GERGEN & SHIELDS

MS. WOODRUFF: We get more now on this week's political activity from our regular team of Gergen & Shields. That's David Gergen, Editor at Large at US News & World, and Mark Shields, Syndicated Columnist with the Washington Post. David and Mark, we just heard Norm Ornstein talk about only a few shreds remaining of this catastrophic health care plan that was passed last year. How do you see it? What do you think is going to happen?

MR. GERGEN: Mark and I thought last week that it would very likely be repealed. This week the House has acted decisively. Norm is right there. The Senate is now on the verge of either repealing it or cutting it way back and this has historically been, this is the first time in decades, in fact, I think the first time in modern history that Congress has undone a New Deal type program. And I think it has profound implications for health programs in the future, particularly those aimed at the elderly.

MS. WOODRUFF: What do you mean?

MR. GERGEN: I think the Congress has been so burned by this experience, when they thought they were passing a program that would be accepted and, in fact, appreciated by the elderly, and then they got this deluge of letters, that they're going to be very reluctant now to go forward with other kinds of health programs for the elderly, particularly long-term nursing home care. That of course is a much more expensive program than catastrophic health care, the kind they've passed, and they're not going to want to do it now, I think furthermore they're not going to be wanting to do any positive I think, Mark, for the elderly. But it seems to me they're also going to be very reluctant to take on the entitlement programs and to remove some of the Social Security benefits that only a couple of years ago people thought they would do.

MS. WOODRUFF: Mark, is this as big a deal as some people are saying it is?

MR. SHIELDS: It's as big a deal as David says it was, Judy, and he's some people to me. No, this was an attempt by the Congress to enlarge a benefit program by putting the cost on a recipient group, in other words, the more affluent among the elderly, but as one congressional leader said to me, any time to have to take 30 minutes to explain to a constituent what you are doing, because everybody immediately because of the scare tactics employed thought they were going to get socked $800 a year, although that's a very small percentage of the elderly, the affluent elderly, who are going to face that kind of a burden. But I think David is absolutely right. The prospect of extended health care suffered a serious body blow with this. There is resentment on the part of members of Congress that they were forced into it, that they were pressured into changing their bill, changing their position, changing their votes.

MS. WOODRUFF: Does anybody come out of this a winner, I mean, is it just everybody ran for cover and that was the end of the story?

MR. GERGEN: I think everybody ran for cover. I don't think anybody has won this. If I can just disagree in a nice way, Mark on one point, it is often said in this town this week it's the greedy and the gray elderly who are opposing this program. As one of the people who have received a lot of letters on this, I can tell you there are a lot of elderly who are writing in and saying they don't like it who are not all that well off and they point out that this surtax, this tax on a tax that the elderly would be required to pay under this program, starts kicking in at $17,000 a year income. And people who are at $17,000 a year income don't feel wealthy.

MS. WOODRUFF: Even though it's a fairly modest amount at that point.

MR. GERGEN: It's a fairly modest amount, but the fact is that the elderly point out that they're being asked to pay the highest tax rates in the nation. They not only pay the tax rates everybody else pay but they pay a surtax on top of that. And I think that they frankly have had a good argument.

MS. WOODRUFF: All right. Let's move on to the budget and to what Norman and Robin spent some time on. What is it that -- you know, we thought a few months ago that this whole thing might hold, we knew it was going to be tough, and now it's just been blown apart. Mark, what has happened here?

MR. SHIELDS: I think first of all, Judy, in the 1980s, you have to understand American politics is totally money driven. I mean, that used to be what a legislator would come up with ideas. Now all the action or most of the energy expended is in the budget committees at both the Senate and the House, and the definition of a cynic was once given as a man who knows the price of everything and the value of nothing. And we've really reached that point in our politics because it is all about money and whether we're going to make 11 billion here or cut there or whatever, and it really doesn't come down to the programs. And I think we look at especially what Norm was talking, this is a place where the American people just turn off. I mean, listen to the language, reconciliation, sequestration, impoundment. I mean, it means nothing. These are words that, it's almost that they're using language not to illuminate but to obfuscate and obfuscation is what's gone on. Speaking of Gramm-Rudman, which is the enforcing agency here, it was Gramm-Rudman-Hollings, and Gramm-Rudman- Hollings, of course, was not the Andover roommate of George Bush, but it was Fritz Hollings, and he's asking for a divorce now because he says the thing is a sham, and I think there really is a growing recognition and realization of admission of the members of Congress that the thing is a sham.

MS. WOODRUFF: Is it that they realize the public doesn't care as much about cutting the deficit as --

MR. GERGEN: I think some of the heat has gone out of this issue, because the wolf was not at the door. We kept hearing that there was a wolf at the door because of all of these deficits.

MS. WOODRUFF: We've been hearing that for years.

MR. GERGEN: That's right. There's no welfare, there just happen to be termites in the basement, they just happen to be easier to live with. But I think the larger point here and what's being obscured by all this talk about reconciliation and sequestration, is that there is a huge con game going on in this city, the con game is that the deficit is coming down and they're using all these little tricks and gimmicks to make us believe that. The truth is - - it's getting bigger. And we in Washington got all caught up with these words trying to explain all of this, but I think the central truth sometimes is obscured.

MS. WOODRUFF: What did you all think? Go ahead, Mark.

MR. SHIELDS: Just one point. It's just devastating to me. If you took every American living West of the Mississippi in 1988, every single American, that's bartenders, nurses, schoolteachers, lawyers, TV people, every penny of income tax they paid wasn't enough to cover the interest on the national debt. That didn't fill a single prescription, buy a book for any school child, put a rifle in any soldier's hands. That's what we're talking about.

MR. GERGEN: That's right. We're paying $180 billion a year and the cost is rising interest payments on the national debt, and people say well, it is only redistributed among Americans. The fact is we're now sending $30 billion a year overseas to foreign creditors.

MS. WOODRUFF: And if they don't deal with it this year, obviously next year we're talking about a much more --

MR. GERGEN: Much stiffer next year, yes.

MS. WOODRUFF: Let's talk about Panama, what the administration spent a lot of time on this week. Mark, is George Bush and everybody else in his administration telling us everything they know about what happened down there this week?

MR. SHIELDS: If they are, we're scared. I'm scared. It's fascinating. This is the first time that being compared to Ronald Reagan recently has really worked to George Bush's disadvantage. I mean, it's really unthinkable that Ronald Reagan wouldn't have acted at a time like this, even though, the Libyan air fight that he slept through. This is a time that we have said we want, we're with the people of Panama, we love them, we love all the democratic institutions, we believe in it. We think Noriega's an outlaw, an outrage, and all the rest of it, that moment, that chance to carpet a diem and really provide the moral support, we weren't there. There might be good reasons why weren't, but right now in the first blush, you've got Jesse Helms and John Carey, a conservative from North Carolina, a liberal from Massachusetts, somehow united over this fiasco, and I think it's fair to say it's a fiasco right now.

MS. WOODRUFF: Why is it? What happened? What went wrong, David?

MR. GERGEN: I've had the opportunity to talk to a number of the principals involved and I'm convinced now that even though there are a lot of disagreement over aspects of the story that the administration is fundamentally telling the truth. After all, people like Dick Cheney, the Defense Secretary, has a well earned reputation for integrity, and I think he deserves a benefit of the doubt. And there is no contrary evidence to rebut what he is saying. In effect, he is saying, we weren't sure if they had Noriega in the beginning, and then when they did come to us, they said we're not going to give to you and we want more military help. Having said that, I think it's also true that the administration did incite people to rebel. The administration used very tough, the President used very tough language and said we want Noriega out of there and let people believe that we would come there. Whatever the rebels may or may not have told us, and I think the administration is telling the truth, the fact is when the rebels were there, we weren't there --

MS. WOODRUFF: Why weren't we?

MR. GERGEN: I think the administration felt the situation was not only murky, but they lacked international law. I think they felt that there might be a trap. My own personal preference would have been I think they should have used force. I think having led people to believe we would have been, we ought to have gone ahead and blocked the roads.

MS. WOODRUFF: Did they make a decision not to move or was it just a lack --

MR. SHIELDS: That's right. The question is the key, Judy. There wasn't a decision. I mean, there wasn't the coordination. Apparently it never got up to a point where the decision could be made. Now in what is the most nefarious of all Washington intervals, that's the CYA, not CIA, that's cover your own area, and we're getting a lot of that going on right now in Washington. They'll be talking about changing the locks on the Panama Canal and everything else.

MR. GERGEN: Mark, I'm shocked.

MR. SHIELDS: That's exactly what we're going through. But I really do think David's point is worth following up on as far as what we held out to them and the encouragement. It's a decision George Bush cannot return to them now. Noriega had become --

MS. WOODRUFF: He said we ought to get Noriega out of there.

MR. SHIELDS: That's right. And I think ironically one could argue that our policies had worked. I mean, our policies had --

MS. WOODRUFF: The pressure.

MR. SHIELDS: The pressure had built up and encouraged those people within Panama to act.

MR. GERGEN: First of all, there is a disagreement and I think a legitimate disagreement between Senators Boren and Nunn, for instance, say there was no good contingency planning, they'd mishandled it once it happened, and those in the administration who say it's not really true, we were dealing with an entirely murky situation, we did the best we could. And I'm not sure we'll ever know the truth to that argument. But the fact is, Mark, I would disagree that you know that means we should back away. It seems what we ought to do now, the way to recover from this is for the Congress and administration to get together and resolve upon a plan that actually will work.

MR. SHIELDS: I'm not saying we should pull away. I'm saying that George Bush can't make it part of his paragraph insert in the speech, let's get Noriega.

MR. GERGEN: Less rhetoric and more teeth.

MS. WOODRUFF: Is there a lesson in this for the administration in future foreign policy problems as they arise?

MR. GERGEN: The critical lesson here is not to raise expectations and fail to be there when you do. They ought to lower the expectations.

MS. WOODRUFF: That's a public relations problem.

MR. GERGEN: No, not just a public relations problem. This is a great power and when the great power has a President says we want you to rebel and we'll be there with the calvary, when the moment comes, you ought to be there. Otherwise, you're both disappointed and you're embarrassed.

MR. SHIELDS: George Bush has one great advantage in this, and that is that two Democratic leaders in the Congress, Tom Foley, the Speaker of the House, and George Mitchell, the Senator from Maine, the Majority Leader, areboth terribly fair minded and they are bipartisan in an area like this. You'll get no cheap shots. It's interesting, when Jimmy Carter stumbled over Panama, it was not Howard Baker, the Republican leader of the Senate, that went after him. It was Ronald Reagan.

MR. GERGEN: That's a very good point. It's a basis that they may a cooperative understanding how to really do something more decisive.

MS. WOODRUFF: Once again, gentlemen, excellent. Mark Shields, David Gergen.

MR. MacNeil: Still to come on the Newshour, Gorbachev in East Germany, Gorbachev in East Germany, the chief justice in a legal flap and a most unusual garden. FOCUS - PARTY GUEST

MS. WOODRUFF: East Germany is next tonight. Set against the backdrop of thousands of its citizens fleeing to the West, the aging leadership of the East German Communist Party threw a party today to celebrate their 40th year in power. Among the honored guests was the man who most symbolizes change in East Bloc nations, Soviet President Mikhail Gorbachev. Correspondent Nik Gowing of Independent Television News reports from East Berlin.

MR. GOWING: Pres. Gorbachev was walking a political tight rope from the moment he stepped onto East German soil to be greeted by 77 year old Eric Honecker and by midafternoon battle lines were being diplomatically drawn. Mr. Honecker's tight clutching of Mr. Gorbachev's right arm signaled that the East German leader was determined to be seen closely associated to and supported by the Soviet leader who has reformist policies diametrically opposed to his own regimented way of doing things. Even by East German standards this was an effusive welcome, the Soviet zills having to navigate between uninterrupted lines of East Germans. Many are believed to invest great hope in this visit. They were clearly disappointed then when they saw not Gorbachev but the hand of Eric Honecker at the window as both leaders passed by. Others are party officials who ominously view the Gorbachev smiles and the unexpected developments. His visits to an Eastern bloc country always seem to leave in their wake. For this cue of East Germans, at least, either the Gorbachev visit or the celebration of the republic's 40th birthday brought good news, the arrival of the first video recorders ever seen on sale here. But for Eric Honecker, even the emptying of people from Unterdeyne Linden Avenue to the most deserted any seasoned observer had ever seen for a major event and the partial closure of borders with the West did not prevent bad news. The Soviet leader found a way to respond to the cheers of hand picked people nearby to announce his message on what East Germany must do now after the crisis of the refugee exodus in recent weeks. Having laid a wreath to the victims of fascism, he avoided upsetting diplomatic protocol in a set East speech by heading for the Western press. He had carefully crafted words on the lessons for East Germany from Soviet Perestroika. Mr. Gorbachev said it was the Soviets, themselves, who'd realized the chance to change their government. "And we've made changes of our government because of outsiders and not from our own experience," he said. " The changes would not have had any effect." And for that reason, he was clearly not going to tell the East Germans what to do. "I am sure," he said, "that the people of each land will determine what changes are to be made and what they need for their country. I know our German friends well," he said, "and their abilities to think things through and learn from life and determine their policies in advance." And he addedhe had full trust in Mr. Honecker. Did he think the situation in East Germany was dangerous? "No," he said, "I don't think so." "It is," he said, "no comparison to difficulties in our country." "Nothing astonishes me anymore," he said, "we are already as hard as steel. We have survived already. We have learned from that." Then came the heart of his message for the anti-reform leaders of the East German Communist Party. "Dangers," he said, "are only awaiting those who do not react to things." The language was coded but the meaning was clear. Tonight in a one hour speech, Mr. Honecker made no reference to demands for reform. While extolling the achievements of East Germany he once more laid the blame for recent events on West Germany. He warned West Germany not to continue its efforts to promote change in East Germany. But a sense of the intensity of resistance to Gorbachev style reforms came on East German television last night in a speech by the Minister Pres. Vili Stov. "Our state of the workers and the farmers does not need any extra lessons in human rights and social democracy," he said. "Socialism in the GDR," said Mr. Stov, "is not to be questioned or tampered with." During the refugee exodus, Moscow has publicly backed the East Germany line that West Germany is staging a smear campaign designed to destabilize East Germany. But privately, Soviet sources have made clear that the Kremlin holds East Berlin and the inflexible policies here responsible for the conditions which have so far forced 130,000 East Germans to leave this year. FOCUS - UNDUE PROCESS?

MR. MacNeil: Next tonight a highly unusual public fight between some of the nation's most prominent federal judges. Fourteen of the country's top judges sent a letter to Congress today challenging Chief Justice William Rehnquist's authority as a spokesman for the 27 member Judicial Conference of the United States. That's the top policy making group in the federal court system. The challenge is over a proposal for Congress to speed up the appeals process in cases where the death penalty has been imposed. Rehnquist sent the proposal to the Senate Judiciary Committee for consideration despite a vote by the conference to delay such action for six months. Nina Totenberg, our special legal correspondent, is here to explain the significance of the action. Nina, go back a little and tell us the background to this dispute. Rehnquist has been unhappy with all the long procedural delays in appeals in death penalty cases.

NINA TOTENBERG, National Public Radio: For years, the Chief Justice and before he was the Chief Justice has fumed about delays in the death penalty, in imposition of the death penalty. There are now over 2000 people on Death Row. Some of them have been there more than a decade. It is a very long process. And last year he appointed an ad hoc committee of the Judicial Conference, a committee chaired by retired Justice Louis Powell to study ways to speed up imposition of the death penalty. And in September, Justice Powell made his report to the Judicial Conference. It was at that point not a public report. The Conference met on September 20th and 21st. These are the top judges in the country, the chief judges of the circuits, the appeals courts, and of the district courts. They met in secret. They considered the report and they decided by an overwhelming vote, I think the vote was 17 to 7, not to vote on the report but to delay a vote until their next meeting in March, because they said since the Powell report had been a secret, they couldn't discuss it with their colleagues on the various courts they represented. The American Bar Association had a similar study going, they wanted to talk to death penalty experts. That was the vote. I'm told by one of those present that the Chief Justice did not look happy, but that was the vote, and they all went home thinking that the report would be made public and that there would be no public action about this report until at least March. The next day the Chief Justice sent to the Judiciary Committees officially this report. And although it sounds bizarre, that single action triggered a whole series of events, because buried in the 1988 drug bill of all things is a provision that nobody seems much to have known about that says once the Chief Justice transmits that Powell Commission report to the Judiciary Committees, legislation to speed up the death penalty will be introduced within 15 days in the Senate and will go on a fast track for Senate consideration on the floor within 60 days, 60 legislative days. Well, that of course meant, Robin, that by the time the Judicial Conference would consider the report and decide whether it was for or against it and what modifications to make in it, the Senate might very well have already acted, in fact, probably would have already acted, so a number of the judges were furious and felt that they had been double dealt. Most of them didn't even know about this law. Those who did thought the Chief Justice would never send the report without consulting the Judicial Conference.

MR. MacNeil: How unusual is it for a Chief Justice to go around this Judicial Conference to begin with? I mean, is that a highly unprecedented thing for him to do?

MS. TOTENBERG: The answer is, the truthful answer to that is, I don't know. Most of the judges that I talked to, and that's a lot of them thought it was extremely unusually. They didn't know any other time that something like this had happened where it would have direct legislative consequences. And when I first talked to them early in the week, they still had not been notified. I then put a series of questions to the Chief Justice on Monday as to why he hadn't notified the Judicial Conference of what he planned to do either before or after the fact or of the existence of this law. And that same day a memorandum was issued to the Judicial Conference explaining what had happened. And then later in the week, the Chief Justice issued a statement to the Judicial Conference telling the judges that he felt he had no choice, that he was required by federal law to send this report.

MR. MacNeil: Does that vote of the Judicial Conference to delay active consideration of it until next March, does that 17 to 7, if that was the vote, does that reflect the sentiment in among those 27 judges pro/con capital punishment?

MS. TOTENBERG: No, not at all.

MR. MacNeil: Maybe I should put the question more simply. Are they angry because a lot of them don't want the process of appeal speeded up and feel this is going to happen, or are they angry because the procedure, the usual procedure, has been violated?

MS. TOTENBERG: Some of them are angry because they don't want the process speeded up and some of them are angry because they think they were double dealt. There were certainly judges who signed that letter that went to Congress this week who are expected to support the Powell Committee's recommendations. I might note that I asked Justice Powell also if he knew that the Chief Justice had sent his report and triggered this law. He did not know either.

MR. MacNeil: Now the Powell committee's recommendations, could you briefly explain them, what has gone to the Congress for them to consider now?

MS. TOTENBERG: The Powell committee, in short, I am really oversimplifying here, recommended that the states be able to severely limit the number of appeals and the time for appeals in death penalty cases if states would supply lawyers to people on death row for their one time federal appeals, and it would limit the appeals to one time and to a six month period. That's oversimplifying it but that's the best I can do.

MR. MacNeil: If that passed and the states accepted that, in practical terms that would mean that these 10 years or longer that people can spend on death row would be reduced very significantly.

MS. TOTENBERG: Very very dramatically. You would see far far greater numbers of executions, far fewer appeals, and some would argue a less fair process, some would argue that finally the death penalty will be as it is intended, an expeditious punishment that would serve to warn people, to warn people of the consequences of certain kinds of crimes and to punish people for certain kinds of crimes.

MR. MacNeil: Where does it stand now? What options do the congressional committees have presented with this report by the Chief Justice?

MS. TOTENBERG: The Senate, as I understand it has to move very very quickly. The House is not under an absolute federal mandate to do that, a legal mandate to do that. So this could still get tied up. It's conceivable that it could get tied up, but most of the folks that I've talked to on Capitol Hill believe that the pressure is mounting very seriously for serious changes in the way death penalty appeals are handled and that this year will finally be the year that some limits are put on those appeals.

MR. MacNeil: So you think that out of all this, despite the unhappiness of some of those Justices at the procedure, that out of all this, some practical changes in the way the death penalty appeals are handled is going to emerge?

MS. TOTENBERG: I think so. There will be some changes. The question that many in the Judicial Conference have voiced is what kinds of changes and how far the Congress is going to go.

MR. MacNeil: Will this lead to a major debate on the nature of capitol punishment and the nature of its appeals in the Congress do you think?

MS. TOTENBERG: It may. It's such an arcane and difficult subject. The word is habeas corpus appeals. Right there a lot of people's eyes glaze over. I don't know. I imagine it will be a major debate that will not get an enormous amount of press coverage because it is a very hard subject.

MR. MacNeil: Nina Totenberg, thank you very much for joining us again.

MS. TOTENBERG: Thank you, Robin. ESSAY - GARDEN OF DELIGHT

MS. WOODRUFF: Finally tonight Essayist Amei Wallach of New York Newsday looks at a civic controversy that blossomed into a most unusual garden.

AMEI WALLACH: When government and the arts don't get along, it's like divorce court, shows get cancelled, funds get cut, epithets get hurled, legislators get pious and apoplectic. But ever so often the marriage does turn out happy. It has here in Minneapolis. In part, that's because there's a populous here that's accustomed to cooperating on high minded civic projects like the Guthrie Theater, the Minnesota Orchestra, the Metrodome, some of the best clinics anywhere for alcoholism and drug abuse, and a trend setting world class museum, the Walker Art Center. Cultural pride runs high in Minneapolis, and so does a great deal of satisfaction with its rambling miles of downtown parks. So itwas particularly dismaying a few years ago when the park superintendent and the Museum director found themselves at loggerheads and all because of a fountain donated by a well meaning citizen. The Parks Department had just the right spot for that fountain on vacant land across from the museum. The trouble was the museum director hated that fountain. Tempers surged, but this is Minneapolis and they thought again. Maybe they could find somewhere else to put the dandelion fountain. They did in a nearby park. All that talk about the vacant land across from the museum had gotten their juices running though. They started talking and out of their discussions grew an idea. What started as a fight ended as in triumph and cooperation. Now Minneapolis as a sculpture garden that's hit a popular nerve. In its first year so many people came to visit from places as far flung as Chicago and Tokyo that they wore cow paths around the sculptures, and it's been necessary to resod this summer. It's a series of rooms, really, sculpture rooms. They are places in which to display a classic called The Nude from the early 20th Century or from our day George Siegel's disconsolate Walking Man.

CHILD: I don't see what they mean by Walking Man.

MS. WALLACH: Or a Mark DeSouvereau Friendly Monolith. Martin Peryear's gates draw you in and promise you more like an ampersand, which is what he calls them. Klaus Oldenberg and Kosha VanBrugen's Spoon Fountain kids the garden's good manners with a slightly tipsy cherry. Morina Marini's Horse and Rider Exult, and Deborah Butterfield's Horse of Bronze Branches watches. People like to congregate at Jackie Ferara's Cedar Shed. This was a garden that was meant to heal and to compensate. It even tries to compensate for the long white Minnesota winters with a greenhouse where you can stroll through topieri arches. There palm trees grow and Frank Geri's gift from California, a flexiglas fish, reflects every available strand of light. Geri's fish is a relative of the carp his grandmother brought home every Thursday and placed in the bathtub to be pounded and eviscerated into gefiltafish for the sabbath meal. Geri's fish began with a ritual purpose. And so does the bridge that Sia Armagani designed with arcs and arabesques clasped in a handshake. The foot bridge has been assigned the task of reconnecting downtown Minneapolis with the museum and theater which were sliced from the city by a freeway in the '60s. Now museum and city are joined, at least symbolically. They had to be for the garden to get built in the first place. If there's a lesson in all this for the politicians and the art types who can't get along, it's to join forces. Look again. It can work. RECAP

MR. MacNeil: Once again, the top stories this Friday, Soviet Leader Mikhail Gorbachev in East Berlin told East Germans to be patient for change. A final train load of refugees fleeing East Germany arrived in the West, and Pres. Bush said he does not regret the decision of not using U.S. military force in the failed Panama coup. Good night, Judy.

MS. WOODRUFF: Good night, Robin. That's our Newshour for tonight. We'll be back Monday night. I'm Judy Woodruff. Thank you and have a good weekend.