The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. I'm Robert MacNeil in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Friday, we have a debate about the conservative Democrats' alternative to health care reform, Mark Shields joined tonight by Paul Gigot looks at the politics of that and other events of the week, Lee Hochberg reports on the Pacific Northwest on two different approaches to panhandling, and Jeffrey Kaye tells the story of what the California earthquake did to some kids. NEWS SUMMARY

MR. MacNeil: The nation's economy showed unmistakable signs of vigor in the last quarter of 1993. The Commerce Department reported Gross Domestic Product expanded at a 5.9 percent annual rate during the period. That was the best growth in six years. Consumer spending was the main impetus behind it. Laura Tyson, chairwoman of the President's Council of Economic Advisers, was just one of several administration officials who attributed the expansion to the President's policies. At a White House briefing, she talked about the factors behind it.

LAURA TYSON, Council of Economic Advisers: Growth was entirely generated by the private sector. Government spending continued to shrink. At the same time that we've had the strong growth performance, inflation remains low. Indeed, we are now enjoying the lowest inflation in a generation. If you put all of these things together, the report suggests the economy is clearly on a path of sustainable growth. Our deficit reduction initiatives have contributed to a sharp decline in long-term interest rates, and those lower interest rates, in turn, are bolstering private spending. With inflation remaining low and continuing improvements in the deficit, we expect long-term interest rates will remain relatively low and help to sustain our economic growth.

MR. MacNeil: The director of the National Economic Council, Robert Ruben, said 1994 economic growth would not match last year's fourth quarter which he said was something of an aberration. The administration predicts growth will be in the 3 percent range during the current quarter. Jim.

MR. LEHRER: The U.S. Conference of Mayors called today for passage of a comprehensive crime bill. San Francisco Mayor Frank Jordan said nothing else works unless you have public safety in place. The Mayors were in Washington for a two-day meeting. At the White House this afternoon, President Clinton asked them to visit members of Congress and push for a tough crime bill.

PRESIDENT CLINTON: So as you come up here to lobby, I ask you to give us the benefit of your ideas, your experience, and make sure we get the best possible bill. But the main thing is we do not need to fool around with this for six months. There's already been a crime bill pass the Senate. There's already been a number of bills pass the House. We, we know now how we're going to pay for this and within range how much money we can spend on it. We have it paid for, and our administration's budget tight though it is, actually, you know, provides the funding for it. So let's do it, and let's do it with benefit of the mayors and chiefs of police who know what it is to do it right.

MR. LEHRER: Earlier, Vice President Gore told the mayors the administration also wanted to address the social causes of crime. He said, "We cannot look at a single problem in isolation."

MR. MacNeil: Bosnia's civil war appeared on the verge of a sharp escalation today, and there was a new threat to the relief operation. The country's Muslim prime minister said thousands of troops from Croatia and Serb-led Yugoslavia had crossed into Bosnia. He claimed they were preparing to act jointly in a major new offensive against Muslim troops. In Southern Bosnia today, three members of an Italian television crew were killed by shell fire. More than 30 journalists have been killed so far in the 21- month-old civil war. And Britain suspended its participation in all Yugoslav humanitarian aid convoys after a British truck driver was killed in an ambush on aid workers. Kevin Dunn of Independent Television News reports.

KEVIN DUNN, ITN: The three aid workers, all ex-army men, were driven to a deserted riverbank after being hijacked by unidentified gunmen in Muslim-controlled territory. One of the two survivors, Simon King, described what happened next.

SIMON KING, Aid Worker: Forced out of the car at gunpoint, took us off to the side, and up to the base ground, and took our coats and wallets off us, and then told us to get down by the riverbank, where they told us to squat down, facing the river. I heard a shot, quickly looked up, and saw that Paul had been shot and decided to jump for the river. As I jumped for the river, I felt a round hit my arm, and as soon as I hit the water then it was so cold I lost all feeling, then swum underwater, I don't know, as far as I could. Then further down the river, I found out that Mike, he had also survived, although he'd got a chest wound. We scrambled out onto the bank and managed to make it back up towards the road. A local family -- we sort of got to their house, saw the lights on, and they just bandaged our wounds and sent for an ambulance.

KEVIN DUNN: The government suspended all aid operations today because of the shootings which have again raised serious concerns over how long British aid workers and soldiers should stay in Bosnia.

MR. MacNeil: The parliament of the former Soviet Republic of Belarus elected a former Communist as head of state today. He replaces a liberal who was ousted earlier this week and who had pressed for economic reform during his two years in power. Belarus has an official policy of neutrality, but the new leader has vowed to align the country more closely with Russia.

MR. LEHRER: The prime minister of Japan made a deal today to save his reform program and his government. The parliament rejected the reforms last week. The prime minister had indicated he would step down if he was unable to get the anti-corruption measures approved. Tonya Sillem of Independent Television News reports from Tokyo.

TONYA SILLEM, ITN: It was an 11th-hour meeting between the Japanese Prime Minister Morihiro Hosokawa and the leader of the opposition, Yohe Kono, that appears to have saved the government. The last ditch talks seem to have averted the crisis. Earlier in the day, cabinet ministers arrived for their twice-weekly meeting not knowing whether their shaky coalition would survive the weekend. This was Prime Minister Hosokawa's last chance to rally support for his reform program before its parliamentary deadline on Saturday. The striking of a deal was just as crucial for members of the Liberal Democratic Party, now in opposition for the first time in two generations. At LDC Party headquarters, pro and anti- reformers spent the day horse trading in adjacent rooms causing confusion for the politicians and intrigue among the journalists. At issue is the notoriously corrupt system which kept many Liberal Democratic Party politicians in power for nearly 40 years. The unprecedented instability of Japanese politics is delaying much- needed measures to revive the economy now in its third year of recession. In the '80's, most people here took full employment and low inflation for granted. Now, the jobs-for-life system is a thing of the past and the confidence of a new generation of Japanese voters has been severely shaken. Whether today's deal will satisfy an electorate weary of a corrupt political system is open to doubt. Most people seem to think that Japanese politicians are currently doing less to clean up the system than mess it up altogether.

MR. LEHRER: The compromise program still must be formally approved by parliament which holds its next session Monday.

MR. MacNeil: A mistrial was declared today in the murder trial of 26-year-old Lyle Menendez after six months in court and twenty- five days ofjury deliberations. The jury in Los Angeles said they were hopelessly deadlocked. Another mistrial was declared two weeks ago in the case against his twenty-three-year-old brother, Erik, for the same reason. The brothers shot their parents to death in their Beverly Hills home in 1989. The defense contended they did it after years of mental and sexual abuse because they feared for their lives. Prosecutors said they will be retried.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to the Cooper alternative, Mark Shields and Paul Gigot, panhandling in the Pacific Northwest, and kids in the California earthquake. FOCUS - COMPROMISING POSITIONS

MR. MacNeil: During his State of the Union Address, President Clinton lifted a pen in the air, promising to use it to veto any health reform bill that does not guarantee every American private insurance coverage that, as he put it, can never be taken away. His veto threat was aimed at a more conservative health bill sponsored by Congressman Jim Cooper, a Tennessee Democrat. Despite the President's tough talk, some in Washington are calling for a marriage between the two bills. And on Wednesday, Treasury Sec. Bentsen hinted that the administration was willing to compromise with the Cooper approach on some points. The Cooper Bill, like the President's, embraces managed competition which in theory would force insurers to compete on the basis of cost and quality. Consumers would be able to switch plans once a year. Unlike the Clinton health plan, the Cooper Bill would not mandate universal coverage but supporters claim it would improve access by advancing these reforms, creating a national commission to define a uniform set of health benefits, establishing purchasing cooperatives to bargain with insurers on behalf of individuals and small businesses, controlling health costs by favoring the growth of managed care organizations like HMOs and encouraging competition among all health care providers. In addition, the Cooper Bill would discourage discrimination by insurers against people with preexisting conditions and expensive illnesses. It would subsidize health insurance for the poor and near poor, and it would institute malpractice reform. Yesterday, Charlayne Hunter-Gault discussed the pros and cons of the Cooper Bill with its author and a leading critic, Ron Pollack. Mr. Pollack is executive director of Families USA, a consumer group campaigning for health reform.

MS. HUNTER-GAULT: Gentlemen, thank you for joining us. Congressman Cooper, let me start with you. The President this week, rather dramatically, said that he would veto any bill that didn't meet the test of universal health coverage. Does your bill meet that test?

REP. COOPER: We really think it does. We support the President's goal of universal coverage, and we support his timetable. He didn't say it in his speech, but that timetable is 1998. We want every American in this country covered. The only debate is how best to achieve that goal. But we think we need a comprehensive reform bill passed this year by this Congress. We think, in fact, that change is long overdue.

MS. HUNTER-GAULT: But what is the difference between what you're proposing as universal coverage or the way to get it and his proposal?

REP. COOPER: Our bill is really closer to the President's bill overall than any other bill in Congress, but there are some key differences.

MS. HUNTER-GAULT: On distance, yes.

REP. COOPER: And this is one of them.

MS. HUNTER-GAULT: Now what is this?

REP. COOPER: We agree with the President there should be user- friendly experience so that any American who wants health coverage can get it at affordable prices and keep that coverage no matter what happens to them, no matter where they work, no matter whether they work, no matter how sick they are. In fact, we go one better, because we allow the individual to detect the purchase of health coverage for the first time. We also agree with the President we have to help the poor and near poor afford coverage. We would cover four times more folks than the -- than have been covered today, just as many as the President would, we think. So we think those two steps will solve the vast majority of the uninsured problem in America. I wish we knew how to complete the job. I'm worried that the employer mandate won't do it. That's a tax on jobs.

MS. HUNTER-GAULT: All right. This is all getting much too complicated. We're getting way ahead of the story. So let's just come back to the employer mandate in a minute. But let me go to you, Mr. Pollack, and see if you've understood based on what the Congressman says, and you can tell us where you see how this bill doesn't meet that test because you don't agree with him, right?

MR. POLLACK: There's no question this bill does not provide coverage for all Americans. There's a basic conceptual difference between the Clinton Bill and the Cooper Bill. See, both of them understand that there's got to be some limitation on the skyrocketing spiral of health care costs. The difference is where they place the limitations. Under the Clinton Bill --

MS. HUNTER-GAULT: But now let's don't go through everything.

MR. POLLACK: No, but I'm going to --

MS. HUNTER-GAULT: Let's just go with the universal coverage.

MR. POLLACK: You're absolutely right. I'm going to get to that. Under the Clinton Bill, what the Clinton Bill does is it places a limitation on what insurance companies can charge us and thereby it saves us money so that we can cover everybody and we can provide them with comprehensive coverage. The Cooper Bill does not place those limitations on the insurance company and, rather, it places limitations on the security and the coverage we're going to receive. It doesn't cover everybody.

MS. HUNTER-GAULT: All right.

MR. POLLACK: And it doesn't even tell us what benefits we're going to get.

MS. HUNTER-GAULT: Okay. I want to pursue all of those nitty gritty details, but just on the test that the President has said must be passed or he will veto it, the universal access, tell me where this bill doesn't meet that test.

MR. POLLACK: Well, it simply doesn't reach people who currently are worried that they're going to lose coverage or don't have coverage today. There's no mechanism in the Cooper Bill that's going to provide coverage for those people today who don't have that coverage but more importantly for those --

MS. HUNTER-GAULT: You mean people who now don't have any insurance at all?

MR. POLLACK: Right. But more importantly, we've got more than 2 1/4 million Americans who lose health insurance each and every year. They lose it when they switch jobs. They lose it when they're laid off of a job. And under the Cooper Bill, there would be no provision to make sure that those people would have coverage.

MS. HUNTER-GAULT: So that there are three classes of people right there who you say would not have the coverage?

MR. POLLACK: Now if Congressman Cooper is now saying that he does want to guarantee coverage, then we've got a real news story here.

MS. HUNTER-GAULT: Congressman, do you want to make news here?

MR. POLLACK: Because the Cooper Bill simply does not provide that coverage. And I'd be delighted to see the Congressman change that.

REP. COOPER: First of all, Ron needs to read my bill. Secondly, I've said for months --

MR. POLLACK: I've got it right here. It's very clear.

REP. COOPER: You need to read the bill, Ron. Secondly, we've said for months and months that we support the President's goal of universal coverage and his timetable of 1998. The only question is how best to achieve it.

MS. HUNTER-GAULT: And what -- let me understand this -- what are you saying is the best way to achieve it? Because I want to know what you think is wrong with that, because he's just said that you're not going to get -- you heard the categories of people he said wouldn't be covered under your plan.

MR. POLLACK: We disagree with his analysis. We think we're closer to the President's goal than any other bill in Congress. For example, the Chafee Bill that some people talk about would not promise universal coverage until the year 2005, seven years after we're interested, and the Chafee Bill is considered close to the President's bill. Ours is a lot closer. What the President said was he wanted to guarantee every American private health insurance. We agree with that, but I don't think the President meant a give away program. I don't think he meant free lunch. I don't think he meant government coercion. I don't think he meant health care police. What we want is a voluntary, friendly system that Americans can feel comfortable with, because most Americans today are pretty satisfied with their coverage. They just want to make sure they can keep it at affordable prices.

MS. HUNTER-GAULT: And by voluntary you mean so that -- you mean not compelling business to pay for insurance -- insurance coverage for its employees. Is that where you're critical?

MR. POLLACK: And, Charlayne, what the President said to members of Congress on Tuesday night is he said, you know, all of us in this chamber have employer-paid health care coverage. Congressman Cooper has employer-paid health care coverage. We, the taxpayer, who are the employers, we provide it. But when we want to get that same kind of protection, unfortunately, the Cooper Bill does not provide us with that protection. So it really creates two standards; one standard for members of Congress and those in the government, and they receive employer-paid coverage. And we, when we're looking for a job and we want to make sure that our job is going to provide coverage, unfortunately, the Cooper Bill does not provide us the same protection that he gets right now.

MS. HUNTER-GAULT: All right. Just answer that question. How does the Cooper Bill do that, if that's his problem with the Cooper Bill?

REP. COOPER: Ron is misleading us again. Our bill shares the federal system with the whole public. The Congressmen, federal employees are not treated any differently than the American public.

MR. POLLACK: You have employer-paid coverage, don't you? You have it today.

REP. COOPER: There's no employer --

MR. POLLACK: But you wouldn't guarantee the American public that?

REP. COOPER: There is no employer mandate in America today. Even the White House has said the employer mandate could cost as many as 600,000 jobs. We need to be creating jobs in America, not killing them off.

MR. POLLACK: And what the Clinton Bill would do is it would provide relief for most businesses. Now the reason it provides relief for most businesses is most businesses in America provide health care coverage today, but when they pay for health care coverage for their employees, they're also picking up the costs of those people who don't have coverage. And so if one business doesn't provide coverage, every business that provides coverage is not only paying for its employees, but it's also paying for the employees of those businesses that are not providing coverage.

MS. HUNTER-GAULT: All right.

MR. POLLACK: The Clinton Bill would level the playing field. The Cooper Bill would still allow businesses to shirk that responsibility and --

MS. HUNTER-GAULT: How would you answer that, Congressman? How would you compel businesses that decided for one reason or another they didn't want to -- they didn't want to provide or didn't, you know, on their own -- would that not leave lots of people vulnerable?

REP. COOPER: Ron just made a valid argument. There is cost shifting in the system today, and we're trying to end it, but we can't end it overnight. I wish we could. We want the same good deal for insurance to be available to all Americans, whether they work for a small business or a large one, whether they work for a rich business or a poor one, or whether they're unemployed. We can empower the individual American so they get affordable quality health coverage. That's the exciting thing about health care reform. And that's where the President and I agree on health reform. This is a win-win situation for the American people. What we're taking are successful examples around the country, including the Federal Employee Health Benefits System, and sharing them with the public.

MS. HUNTER-GAULT: All right. Let me ask you this, because we're not going to have a lot of time. One of the problems with health insurance is that the premiums are often too expensive. Why do you reject the President's limits on insurance premiums? Explain what's wrong with that.

REP. COOPER: This is the bureaucratic price control element of the President's plan. We think markets do a better and tougher job of holding down costs. Bureaucracies, they just feed themselves. They make prices higher, not lower. Price controls have never worked.

MS. HUNTER-GAULT: All right. Can you explain --

MR. POLLACK: Now --

MS. HUNTER-GAULT: -- why he's wrong on that?

MR. POLLACK: -- unfortunately, unfortunately, we've got a choice here. The choice is to stand up to the insurance companies and to say they cannot continue to raise our premiums at two to three times the rate of inflation, meaning we've got less money left in our pocketbooks. The President is going to stand up to the insurance companies, and as a result it saves us money, and, therefore, the President can deliver on coverage for everybody, and he can make it comprehensive coverage. On the other hand, since the Cooper Bill does not stand up to the insurance companies, and they can continue to charge us at two to three times the rate of inflation, there isn't enough money left available so that all of us can gain coverage and that we get decent coverage. That's the basic difference between the two bills.

MS. HUNTER-GAULT: Brief response, because the New York Times said that if you didn't put a cap, a family earning $30,000 a year would end up spending $5,000 a year on insurance premiums.

REP. COOPER: The New York Times endorsed our bill. The New Republic endorsed our bill.

MR. POLLACK: The New York Times was very critical that you did not provide coverage for people --

REP. COOPER: Only one element -- it was only one element they were critical of. They endorsed our bill. What Ron is talking about is really having the government run our health care system, at least the payer aspect. Many Americans are worried about that, because the government can do some things well. We do some things very poorly. The federal government has consistently mishandled health care estimates. We've always gotten them wrong. We need to be very humble and very careful in this are, and we need to be bipartisan so that Democrats and Republicans and independents feel comfortable with the new system. That's what's lacking in the President's plan. There's only one Republican in America who supports the President's plan. We need a genuine bipartisan approach.

MR. POLLACK: See. I think what that says, in effect, is let's leave it up to insurance companies. We're going to leave the insurance companies unfettered. We're going to allow the insurance companies to continue to charge us at two to three times the rate of inflation.

MS. HUNTER-GAULT: Well, how do you regulate this?

REP. COOPER: What Ron is really advocating is the single payer Canadian system --

MR. POLLACK: No, I'm not.

REP. COOPER: -- which is the government system.

MR. POLLACK: No, I'm not. I am talking about what the Clinton plan does. The Clinton plan is very clear. It stands up to the insurance companies, and says, we're going to have this managed competition system, but we're not going to allow the insurance companies to continue to have skyrocketing premiums that we can't pay for as families and that businesses can't pay for.

MS. HUNTER-GAULT: All right. Let me just ask you this. I mean, each of you -- you've talked about how close your bill is to your bill, but this week, Sec. Bentsen hinted at a compromise. Is any compromise in the works, or do you see a possibility for a compromise that could bring these two together?

MR. POLLACK: I think there is going to be a compromise sometime down the road.

MS. HUNTER-GAULT: What would --

MR. POLLACK: And I think Congressman Cooper is going to play a very instrumental and positive role in that process.

MS. HUNTER-GAULT: But where do you see the point?

MR. POLLACK: But there are major, major differences that we still haven't even explored. For example, for senior citizens, there is nothing in the Cooper Bill that provides coverage for long-term care, if grandma has Alzheimer's Disease or stroke or Parkinson's.

REP. COOPER: We are for long-term care.

MR. POLLACK: But you don't have it in your bill.

MS. HUNTER-GAULT: Okay. But let me ask you then finally. Shouldn't those who want health care reform go for what is possible as opposed to what is ideal?

MR. POLLACK: Absolutely. Absolutely. We want a practical solution. We aren't going to do the American public any good if we don't pass something in the Congress. Now I think ultimately there will be a compromise, but that compromise is going to make sure that unlike the Cooper Bill in its current form, everybody will be covered, and it will be comprehensive coverage that will be spelled out, and we're really going to get a hold on these prices that the insurance companies charge us.

MS. HUNTER-GAULT: Briefly, do you hear compromise here that you might be able to live with? Briefly.

REP. COOPER: I've been working for three years to get a good agreement that would be good medicine back home for every American. That's what's at stake. Will this policy really work? And we can do it?

MS. HUNTER-GAULT: You can have a bill that the President won't veto?

REP. COOPER: I think we can. I think we can make it happen.

MS. HUNTER-GAULT: Congressman.

MR. POLLACK: We need to make it happen this year.

REP. COOPER: We're for long-term care.

MS. HUNTER-GAULT: Congressman, I'm sorry. We have to go. Thank you both for joining us.

MR. MacNeil: Still ahead, Shields and Gigot, what to do about panhandling, and an earthquake update. FOCUS - POLITICAL WRAP

MR. LEHRER: Now how health care reform and other matters political look to our regular analyst, syndicated columnist Mark Shields, joined tonight by Wall Street Journal columnist Paul Gigot. Mark, on health care reform, do you see compromise, Cooper and the President, et cetera, down the road?

MR. SHIELDS: I think there will have to be compromise, Jim. Right now, or the last time I checked anyway, 70 percent of the members of each House were sponsoring some health care bill. I mean, either Cooper or John Chafee or Bob Michel, the Republican leader, or the President's plan, or the single payer plan, which is the most liberal of all, modeled after the Canadian plan. The -- so -- but none of them has a majority, none of them is close to a majority. So that they have -- if there's going to be legislation enacted, there has to be -- the point is, I think the question is: At what point will those compromises be reached? Will it be Chafee, the Republicans coming over to the President's plan, or will it be the President moving to some version of Jim Cooper's?

MR. LEHRER: It's going to happen you think.

MR. SHIELDS: They can't move too far or the single payer people, the real bulls on the issue, they'll say, hey, wait a minute, pal, this is a sell-out.

MR. LEHRER: Yeah. What scenario do you see, Paul?

MR. GIGOT: It's very, very fluid right now. I think the President helped his case with a speech this week in the very general sense, but health care is different than any other issue we've dealt in Washington with for a long time, and that's because it affects everybody as individuals and it's going to be fought as trench warfare around the country in doctors' offices, just every --

MR. LEHRER: Individuals as distinguished say from collective groups. I got you. Okay.

MR. GIGOT: And I think if you look at the President's bill, he has 101 co-sponsors, that's it, in the House. He needs 218 to prevail. So there's got to be some kind of a compromise. The President's bill right now, I think, as the show illustrated with Congressman Cooper, he's too far to the left of the country, even of the Congress. He's going to have to move much closer to the Senate to prevail.

MR. LEHRER: You mean, the President is?

MR. GIGOT: The President's bill is, that's right.

MR. LEHRER: And then --

MR. SHIELDS: I don't think there is a clear ideological picture yet. I think the argument that -- what's interesting to me is that the split is primarily on the Republican side thus far. I mean, Newt Gingrich, the Republican House leader, has said, we don't want to appear to be out of touch, as out of touch as George Bush, in other words, to let this health care train go right by us, and I'd just say there's no problems. And some Republicans, Dick Cheney, former Secretary of Defense and future Presidential prospect in 1996, Bob Dole, are now denying that there's a crisis, so that there's a real split here among Republicans. I -- you know -- I think, and I think the argument against the President is not from an ideological ground -- it's bloated, it's bureaucratic, it's too complicated. I thought, quite frankly, that the poster that Arlen Specter, the Senator from Pennsylvania came up with was an effective device. I mean, it does look like the road map --

MR. LEHRER: I noticed late this afternoon on the wires that Sen. Dole in interviews today with someradio reporters kind of backed off a little bit. He said, now, wait a minute, it's just the word "crisis" that we have a disagreement on. There's the problem -- he said, everybody -- I haven't got it right in front of me, but he said everybody agrees that we must reform the health care system. Now, that's not what he said the other night, unless I missed something.

MR. GIGOT: Well, I think that he was trying to say the other night that everybody wants to reform it, we just don't want to reform it the way the President does. And the problem is if you start out -- Republican pollsters have been telling me that if you start out by saying there's no health care crisis, there is a danger that some voters look at you and say, you don't care. So what they're trying to do is they're trying to say we want to reform it too, but what we don't want to do is blow up the 85 percent of the health care system that is good to fix the 15 percent that has a problem. That's a very delicate line for Republicans, but I think it's the only way -- they have to sell that case if they're going to prevail and knock out some of the worst aspects, from their point of view, of the President's program. They have to make that sale.

MR. LEHRER: How would you score Clinton versus Dole the other night on the State of the Union? How does it look, in other words, three days later?

MR. SHIELDS: If it was a fight, the referee would have stopped it. I mean, I think it's always -- I mean, the President clearly said I want, you know, a technical knockout. Bob Dole has been around. He's done well, but, Jim, it's a tough thing to answer a State of the Union. I mean, it's the toughest position for anybody in the opposition. Just think of the theatrical setting of it. The President of the United States, replete with the applause, the family, the gallery, you know, the faces of heroes, and all the rest of it, I mean, it's a wonderful thing. Every President has been to the Vice President. The Speaker, Mr. Speaker says, Jim Malloy, the doorkeeper of the House, they're all out there, the joint chiefs of staff, the Supreme Court, and then the poor, you know, the opposition leader has to come on in a stark room, no cheers, no nothing, no bunting, balloons, the band, and say, what you've just heard and probably like wasn't true. So that was a tough one.

MR. GIGOT: Well, Mark's exactly right on the problem, but you have a President up there. He was a designer, the visionary, and Bob Dole is making little specific references. He looked like the mechanic, the tinkerer, the naysayer, and it was very hard, very hard to live with in that kind of circumstance. But this is a big advantage for the President because he was sketching out a vision for health care and saying, look, the government can help you again. And I don't think Bob Dole had a comparable vision to answer it. He had specifics, that's too bureaucratic, the employer mandates don't work, and most people don't -- have no idea of what an employer mandate is.

MR. LEHRER: And do you think generally, Paul, that the President did a good job of laying out what his vision is not just on health care but also crime, welfare, tying it altogether? What did you think of that?

MR. GIGOT: I thought he came as close as I've ever seen him. People called it Reaganesque. I thought it was Reaganesque only in the sense of manipulating a symbol, because Ronald Reagan had a very different vision based on individual opportunity and, and --

MR. SHIELDS: Tax cuts. [laughter]

MR. GIGOT: But Bill Clinton, Bill Clinton is offering a vision. And I think it's basically -- it's the security state, the state can do a lot for you, it can protect you in your home, it can protect you in health care. It can get you off of welfare, and I don't know if he can make that sale, but he's beginning to sketch out a broader vision rather than just seeming to be a programmatic liberal.

MR. SHIELDS: It was, I thought the President did very well. It was a pragmatic speech. The President does not deal in an overarching theme. I mean, it isn't there, and he's not a terribly gifted rhetoritician, so I think, I think what he did, instead, has been described, he had a conversation with the American people. He does that very well. What he was able to do in a wholesale setting of a speech on national television was almost to retail it to a conversation. Each was almost a separate, little piece of a conversation. And I thought it was quite persuasive and quite compelling. It's interesting. We always compare Presidents to their predecessors. In May of 1993, Bill Clinton was being prepared with Jimmy Carter. In January of 1994, he's being compared to Ronald Reagan.

MR. LEHRER: Why?

MR. SHIELDS: I mean, that's -- you know, as Paul said, like Joe Montana -- until Joe Montana last Sunday -- he had a great fourth quarter, and he did. And -- right now Republicans are concerned that there's a sense that he's building up momentum, and I don't think it's any longer just going to be that Republicans are going to point out that the train's headed in the wrong direction, but they've just got to figure out some way of stopping the train.

MR. LEHRER: Paul, a fellow named Shields has said on this program more times than either one of us probably could remember, Mark, that, that you can be a great orator, you can have all the symbols right, but if the economy isn't doing well, you're in trouble. Now, there was even more good news today, and that is always good news for the President, isn't it? It doesn't matter who the President is.

MR. GIGOT: I think that's right. To adapt a line from John Kennedy, "A rising tide lifts all politicians." And, and the economy is. It was a terrific fourth quarter. Consumer confidence is, is up. People are buying in the shopping malls, and that can't help but help the President.

MR. SHIELDS: The -- Ann Morrow Lindbergh, Charles Lindbergh's wife, her father, Dwight Morrow, was an American diplomat and politician -- in 1930, the Republicans were being blamed for the Great Depression, and Herbert Hoover, who was the most unpopular figure in the land, said the political party that takes credit for the rainfall cannot be surprised when it is blamed for the drought. And so the Democrats right now are taking credit for, you know, a good and gentle and helpful rainfall.

MR. LEHRER: Yeah.

MR. SHIELDS: There probably will be times in the future when --

MR. LEHRER: And that, of course, influences this positive reaction in the polls and elsewhere to the State of the Union speech. That was the point I was trying to --

MR. SHIELDS: I'll tell you what. I think what happens, Jim. I think the key number was not the amount of growth, the key number was the threshold test of this administration which was the deficit. I don't think Americans trusted the federal government. The burgeoning deficit over the past 12 years had become a metaphor of failed, irresponsible, undisciplined government. And the fact that the deficit, itself, is down to a projected $180 billion I think helps health care. I think it gives us a sense that hey, maybe these guys can get their act together.

MR. LEHRER: Do you agree with that?

MR. GIGOT: I was talking to a Republican Senator this week who's a close adviser of Sen. Dole and he said, look, popular Presidents get what they want, and that's what they're worried about right now, because if his numbers stay high, health care will be a very, very difficult problem for the Republicans. And it's very hard to say that the economy is good but it good be better, particularly when it's, you know, 6 percent growth. Now the problem is -- let me throw a little caveat here for later in the year -- is with the economy moving this fast, there's an awful lot of money in the system. We're going to see some higher interest rates later in the year, no question about it, and the taxes are going to be hitting in from the last year come April, March, April. That is going to have a dampening effect, no question about it. And we're not going to see the same fourth quarter performance right through the end of this year.

MR. SHIELDS: The good economic news though does one other thing. The principal argument that has been made against the President's plan on philosophical and political grounds is an employer mandate is going to cost jobs. Now at a time of higher unemployment, that is a more compelling and more persuasive argument. As a sense of optimism about the economy returns with numbers like today, that is a less salient and really less compelling argument.

MR. LEHRER: In other words, it makes the counter argument more believable.

MR. SHIELDS: That's right. In other words it --

MR. LEHRER: Doesn't make it right, it makes it more believable.

MR. SHIELDS: That's right. You can persuade people that we can do things if in a sense the economy is improving.

MR. GIGOT: That's true. It can work both ways. I mean, one of the real selling points of health care has been that you might lose your job, and there's a lot of anxiety. If there's no danger of losing your job, then maybe -- let's not blow up the whole system.

MR. SHIELDS: And people -- oh, I'm sorry.

MR. LEHRER: No, go ahead. You have exactly four seconds.

MR. SHIELDS: It was, it was part of the President's mission on the Tuesday State of the Union to revive that sense of urgency about national health care. There is no doubt that it flagged since last fall, and he had to revive it. I think he did a pretty effective job, but we won't know for probably two months whether it's taken.

MR. LEHRER: Okay. Mark, Paul, thank you both. FOCUS - BEGGING THE QUESTION

MR. MacNeil: Next tonight, cities across the country are cracking down on their street populations, prompting accusations of a national backlash against the homeless. Even cities traditionally tolerant of street people say they're being forced to act. Two such cities, Seattle and Portland, are trying two very different approaches. Correspondent Lee Hochberg of Oregon Public Broadcasting has more.

WOMAN: You have a panhandler. He's walking around. He's going up towards 6th. You've probably seen him before. He's a homeless guy around here.

MAN: 180 copy.

LEE HOCHBERG, Oregon Public Broadcasting: They aren't police officers, but James Riley and Joe Koontz have just been dispatched to a Portland street corner where a man is panhandling.

JAMES RILEY: You got family out here?

UNIDENTIFIED HOMELESS MAN: No.

JAMES RILEY: Just came out here to see what it was like, huh?

UNIDENTIFIED HOMELESS MAN: Basically I come out to try and get a job, and when I got here, I got all my stuff stole.

MR. HOCHBERG: Riley and Koontz are Portland guides. They're part of an innovative business-funded program to drive panhandlers and street people away from Portland storefronts.

JAMES RILEY: We will be called upon. We'll be right in front of face, in front of your sign, and it's a no-win situation.

UNIDENTIFIED HOMELESS MAN: Yeah, it is, because I think the city's trying to screw the homeless. When we ain't got nothin', we ain't got nowhere to go, then you guys start comin' down on us.

MR. HOCHBERG: Planting themselves on both sides of the beggar, they hover and annoy him until he goes on his way.

UNIDENTIFIED HOMELESS MAN: You know, I'd better off just ripping some -- [bleep] -- off like they did to me.

RICK WILLIAMS, Association for Portland Progress: We take their business away from them, which we have every right to do. We don't harass them. We simply perform our own business right next to them.

MR. HOCHBERG: The vice president of the downtown group, Rick Williams, says his guides try to influence not only panhandlers but the public as well. He encouraged this woman to offer a beggar 25- cent coupons for food and shelter, rather than money to be spent on alcohol and drugs.

WOMAN: You can't use any of this?

HOMELESS PERSON: Yes. It takes about five of those to get a meal.

WOMAN: I know, I mean, but so if you collect -- four more people come through and give you four more, you still can't do what you have to do?

HOMELESS PERSON: Yeah, okay.

WOMAN: I think it's still worth it.

MR. HOCHBERG: Fewer than 15 percent of the coupons are ever cashed in, but the guides say the discouraged panhandlers at least move on. Since the program began, panhandling numbers are down, streets are cleaner, and foot traffic is up. One hundred sixty miles to the North, Seattle is taking a decidedly different approach. The city just passed new laws that make it easier to throw some of its 2500 street people in jail. City attorney Mark Sidran who wrote the laws says Seattle has simply run out of patience.

MARK SIDRAN, Seattle City Attorney: There is something very jarring about waiting for the walk light while the guy next to you is peeing on your foot.

MR. HOCHBERG: The new laws are some of the toughest in the country. They make drinking, urinating, or defecating in public punishable by up to 90 days in jail and a $1,000 fine. In an attempt to crack down on aggressive panhandling, they also make it illegal for panhandlers to cause fear in pedestrians. Officer Will Cravens says he would cite these men, peaceful but unkempt enough to be scary.

MR. HOCHBERG: Are they a threat all? Do you believe they're intimidating?

OFFICER WILL CRAVENS, Seattle: Well, they may not be a threat to you or I, but they could certainly be a threat to this young gal who's walking up the street.

MR. HOCHBERG: Because why?

OFFICER WILL CRAVENS: Merely because of their appearance or because of their, their language at the time when we're not present.

MAN ON STREET: I don't scare nobody. I just try to be nice and stuff. I help people out. I don't do no aggressive nothing. I just, you know, be a happy camper, because I got to survive somehow.

MAN SITTING ON STREET BY BUILDING: What are you up to, Copper?

OFFICER WILL CRAVENS: How are you doing today?

MR. HOCHBERG: The most controversial part of the law is a section that makes it illegal to sit or lie down on sidewalks in Seattle's commercial areas. The American Civil Liberties Union has sued the city, arguing that it's not fair that those with money can sit at a sidewalk cafe and hold a cup of coffee but those without money cannot sit on the sidewalk and hold a cup out for donations. The ACLU's Jerry Sheehan.

JERRY SHEEHAN, ACLU: It seems to us pretty clear that the use of the law will be discriminatory and that the homeless who are sitting are the ones who are going to bear the brunt of it and not someone else who is sitting, who looks more presentable.

DEMONSTRATORS: [shouting] Housing, not jail! Housing, not jail!

MR. HOCHBERG: Advocates for the homeless say the crackdown is one more example of penalizing those who've been forced into the streets.

KEN COLE: They flush a lot of poor people out onto the streets, and they're in the way. They're in the way of business; they're in the way of conventions; they're in the way of tourism. I sincerely feel that panhandlers are the scapegoats of the '90s.

MARK SIDRAN: I completely reject that. This is -- this is not aimed at the homeless. It's aimed at the lawless.

MR. HOCHBERG: City Attorney Sidran says Seattle has agreed to fund more beds for the homeless but the real problem is a core group of street people who blatantly ignore the law.

MARK SIDRAN: In the last six months of 1992 we had 800 people who received two or more tickets for drinking in public, consequence of which under the law was then a fine. Not a single one of those eight hundred people showed up, did anything, responded to the citation at all. They are a seriously dysfunctional population that is desperately in need of treatment. And instead of beating the drum of housing, housing, housing, we ought to be talking about treatment, treatment, treatment.

MR. HOCHBERG: If we ought to be thinking treatment, treatment, treatment, then why are we thinking 90 days in jail and a $1,000 fine?

MARK SIDRAN: Because the only way we have to sanction people who will respond to nothing else is to say if you, if you need to go to jail, you need to go to jail.

MR. HOCHBERG: In Portland, business leaders shun that approach.

RICK WILLIAMS: Oh, I think they'll be back on the street. At some point, they're going to get spit out of the funnel. Wherever they're funneled into, they're going to come back out and just end up back on the street.

MR. HOCHBERG: The Portland program discovered that its guides may be a better way to fight alcoholism and mental illness on the street.

RICK WILLIAMS: Our goal was to get the storefronts clean so that the, the cash registers would ring. But as we've evolved the program, we've been able to work with homeless shelter agencies, Mental Health Services West for the chronically mentally ill, and so over time, we've been able to integrate our program into their efforts.

WOMAN: You don't have to come in here.

JAMES RILEY: Well, I'm trying to find out what's wrong, so I can help you out.

WOMAN: There ain't nothin' wrong with me! You go back now! I mean it! If I don't, I'm gonna hit you!

JAMES RILEY: Can I help you out, ma'am?

WOMAN: I don't want you to help me out! I ain't crazy! You're the one that's crazy!

MR. HOCHBERG: Social service agencies estimate up to 80 percent of the troubled people on Portland's streets are either substance abusers or chronically mentally ill. The guides are in constant two-way communication with de-tox units and mental health caseworkers who can immediately come to a scene.

JAMES RILEY: [talking to male caseworker] Tried to talk to the lady in the red dress here sitting on a bus kiosk. She's really mad. She says she's willing to hit you if you even come up close on her.

MR. HOCHBERG: The caseworkers have moved 30 Portland street people to shelter and into mental health treatment in the last three months.

FEMALE CASEWORKER: [talking to James Riley] Well, she hasn't done anything yet that's really hurt anybody. She's just threatening, but she hasn't done anything.

MR. HOCHBERG: This woman refused treatment, and as she hadn't struck any other pedestrians was allowed to go. The program says out of the estimated 7,000 contacts it made with street people last year, it succeeded in steering them to social service agencies about 15 percent of the time. But the experiment has not been without setbacks. Just over a year ago, one of nine armed officers the program employs as back-ups for the guides was shot and killed on duty. A guide was wounded. Williams says public pressure could have unraveled the program then except for the wide support it has among police and the social service community.

RICK WILLIAMS: We have that type of support so when an incident occurs or when a program is evaluated, we don't have to say this is the business community acting alone. I think you need to be integrated, otherwise you don't have all of the legs of the stool in place.

MR. HOCHBERG: The Business Association is now adding a jobs component to the program. About a dozen street people sweep public garages and sidewalks, earning as much as $8 an hour. In Settle, the overcrowded county jail is expecting to receive seven to ten street people per day, about a $50,000 monthly cost to taxpayers. Anecdotally, police report the streets to be somewhat quieter, although that may be related to cold weather. They are not enforcing the sidewalk sitting law until a court decides if it's constitutional. UPDATE - AFTERSHOCK

MR. LEHRER: Finally tonight, Jeffrey Kaye of Public Station KCET- Los Angeles continues his reports on the aftermath of the Southern California earthquake. Tonight our group of students, teachers, and parents put their shattered world back together.

[Bell Ringing]

MORNING ANNOUNCER: [at school] Good morning to all of our teachers and to all of our students. We are so grateful that you have returned to be with us today.

MR. KAYE: On Tuesday morning, the Nobel Middle School in Northridge was finally back in session. Two miles from the epicenter and eight days after the most destructive earthquake in LA history, students and teachers began to reassemble their lives. On campus, students mingled amid reminders of the devastation, taped doorways, a broken arcade, blocked walkways. With city water still contaminated, school janitors turned off drinking fountains. Students were asked to bring bottled water. Outside, structural engineers rechecked the school's cracked walls. In class, teachers sized up their students.

FRANK FERRY, Teacher: Come in, my little rug rats!

MR. KAYE: Frank Ferry and his eighth grade English students seemed glad to get back to the semblance of routine even though their discussion was anything but normal.

FRANK FERRY: You were in that apartment? She was in the Northridge Meadows Apartments. And the first thing this gentleman said, he walks up to me and says, Mr. Ferry, I don't have a home, my apartment was condemned.

MR. KAYE: Instructors put off teaching until they and their students had the opportunity to discuss the traumatic events.

FRANK FERRY: What was going through your mind, Tracy?

TRACY: That I was going to die.

MR. KAYE: Lessons were replaced by group discussions designed to heal the emotional quakes.

MALE STUDENT: They were just bringing dead bodies out of the building, and every time we'd drive down there.

FRANK PERRY: And even though you didn't know the people that died, how did you feel watching?

MALE STUDENT: It freaked me out. I hated it.

FRANK PERRY: Why? Why did it freak you out?

MALE STUDENT: Because I couldn't -- any one of us could have been in a building like that.

SECOND MALE STUDENT: My room, you see all cracks, and my ceiling is cut in half. The living room is cut in half, everything.

FRANK PERRY: What feeling do you get when you go into your bedroom now?

SECOND MALE STUDENT: I'm scared. That thing might fall on me, the ceiling. It's all the way across. You can see like the sunlight hits down on the floor.

[Earthquake Drill]

MR. KAYE: Earthquake drills were also part of the recovery process intended to give the students a sense of control and security. With aftershocks ongoing, the drills also served a practical purpose.

FRANK PERRY: Even if the roof partially or came down on you and you're under this desk, you're going to live. You are going to live.

MR. KAYE: Many students missed such reassuring words. Tuesday's absentee rate was high.

FRANK PERRY: We're missing probably half the class, probably a good part of our student body won't be here for at least a week.

MR. KAYE: Ethan Mitchnick stayed home the first two days of school. Even though his mother teachers at Nobel, Ethan was ready to return to his sixth grade class there, and he wouldn't talk about his dramatic experiences during the quake.

ETHAN MITCHNICK: I just try not to think about the earthquake. I just try not to talk about that.

MR. KAYE: On the morning of the earthquake, Ethan's father, Arnie Mitchnick, had rushed to a nearby apartment house to check on his elderly mother. Ethan went along.

ARNIE MITCHNICK: He went with me, and we were looking at one of the buildings, and I was looking at what should have been the laundry room, and it wasn't a laundry room. It was a balcony. And it was hard. It was very, very hard. And it was probably hard on him. You'd have to talk to him.

MR. KAYE: Amid the chaos of the collapsed apartment building, Mitchnick found his mother, Dora, distraught but safe.

DORA MITCHNICK: I heard my name called, and I looked up and I saw my son. It was like -- you want to know what that was like -- it was like the heavens opened when I saw him.

MR. KAYE: For Ethan, the experience was particularly distressing according to his mother, Susan. She let her son stay home from school, because, she said, he had more trouble than his friends recovering from the experience.

SUSAN MITCHNICK: He had gone with my husband to get, you know, his grandmother, so he has different images and visions that they don't have, and it's just going to take a little time. But I really feel, I really want him to get back to some kind of normalcy.

ARNIE MITCHNICK: We'll recover. It just takes time. And it's going to be a lot of time, a lot of time, a lot of hard work, a lot of stress, and a lot of looking at life completely differently.

MARTIN COHEN, Psychologist: [talking to group of teachers] What can you as a group do to help support each other through this process?

MR. KAYE: At a nearby high school, psychologist Martin Cohen helped teachers examine their lives. The conversation was supposed to serve two purposes, as therapy for the adults and as a model to help teachers work with their students. Cohen specializes in post traumatic stress disorder.

MARTIN COHEN: [talking to group of teachers] Nausea, stomach distress. I see people shaking their heads.

MR. KAYE: Cohen listed physical and emotional symptoms that often follow this kind of trauma. Because this disaster occurred when people slept, Cohen said that difficulty sleeping would be common.

UNIDENTIFIED FEMALE TEACHER: It's that sleeping in the night and going to bed at night, I have a hard time with that, because that's when it happened, and that's -- it seems like when there's aftershocks, they seem to come more at night. Maybe it's my mind, but -- and to me, going to bed is hard and settling down.

MR. KAYE: Other teachers expressed additional symptoms, including dread, depression, and anger.

UNIDENTIFIED MALE TEACHER: That all your best laid plans and all the hard work that you do, whether it's at work, or whether it's at home, or whatever, is completely shattered, and in reality means absolutely nothing by something that's so much bigger than we have any kind of control of, so I think that really it's the anger, how could something come through and destroy all the things that you spent all these hundreds and hundreds of man hours trying to do, and it just all kind of falls apart in five seconds.

MR. KAYE: Some teachers said their immediate thoughts during the earthquake were about the welfare of loved ones. Back at Nobel Middle School, students said the quake forced them to examine their priorities.

STEPHANIE THUOTTE: After going back into your house after the quake, it was very devastating because you lost so many material items, but then I got to thinking even though I did lose and my family lost, I mean, it seems like everything, what matters is family and staying together and that you have everyone, and that, you know, even if you did lose everything down to the soil, I mean, your family's still together.

BIANCA RIVERA: I kind of put myself in California or Los Angeles in the level of the people around the world and how you see on the news, you know, hundreds died in a bombing in Bosnia or something, you know, I put myself on that level. I never really thought of it till now.

DAN SNIDER: Like every aftershock I get so up tight and I get so scared that I start crying, and I go to my parents for security, but like the people in the tent cities, you know, it rained last night, I feel so awful for them. They have no place to go. All the homeless people out on the street, all the people who lost families, it's just so sad what Mother Nature can do.

MR. KAYE: On Thursday, Ethan Mitchnick decided he was ready to come back to school. He walked to class with a friend and with his mother. Ethan's first period teacher started the day's lesson with a test.

TEACHER: Ethan, you were absent yesterday. I'm not going to send back a paper to you. This is a homework quiz. There's no way you can take it. However, Ethan, we will make it up.

MR. KAYE: And with that, homework and all, a familiar routine returned to Ethan's life. Ethan and the others who missed school joined the ongoing rap sessions, and teachers strived to bring normalcy back to the lives of students rebuilding their shaken world. RECAP

MR. MacNeil: Again, the main story of this Friday was the surge in the nation's economy. The government reported it grew at an annual rate of nearly 6 percent in the last three months of 1993. It was the best advance in six years. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you on Monday night. Have a nice weekend. I'm Jim Lehrer. Thank you, and good night.