The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. President Reagan changed his tune with the Soviets today, claiming his policies had lessened the dangers of nuclear war and made the U.S. strong enough to seek a constructive and realistic relationship. We will be analyzing the speech for the message it sends to Moscow and the message it is intended to send to American voters. Also tonight, which Democratic candidates benefited from the marathon debate in New Hampshire last night? Jim Lehrer is off; Judy Woodruff is in Washington. Judy?

JUDY WOODRUFF: Also tonight, some new evidence about the upturn in the economy and an update on a different sort of business story -- a computer superstar calls it quits in the high-tech big leagues. And we report on the sudden fame of Helen Santmyer and the media blitz that followed.Reagan's Peace Speech

MacNEIL: President Reagan, adopting a new, milder tone, today called on Moscow to join in establishing a constructive and realistic working relationship. In a White House speech timed this morning to hit evening television news programs in Europe, Mr. Reagan said fears of nuclear war are understandable but mistaken. He said 1984 is a year of opportunities for peace, arguing that his policies had put the United States in its strongest position in years to establish a constructive and realistic working relationship with the Soviet Union. He said the U.S. military buildup might account for recent strident rhetoric from the Kremlin that had led some to speak of heightened uncertainty and an increased danger of conflict. He added, "This is understandable, but profoundly mistaken." The President's advisers told reporters that the speech was intended to dispel impressions that the President was warlike in the face of concerns that his political standing could be damaged in an election year. Here are excerpts from the President's speech.

Pres. RONALD REAGAN: America's deterrence is more credible and it is making the world a safer place. Safer, because now there is less danger that the Soviet leadership will underestimate our strength or question our resolve. Yes, we are safer now, but to say that our restored deterrence has made the world safer is not to say that it's safe enough.

We are witnessing tragic conflicts in many parts of the world. Nuclear arsenals are far too high, and our working relationship with the Soviet Union is not what it must be. These are conditions which must be addressed and improved. There is no rational alternative but to steer a course which I would call credible deterrence and peaceful competition. And if we do so, we might find areas in which we could engage in constructive cooperation.

I propose that our governments make a major effort to see if we can make progress in three broad problem areas. First, we need to find ways to reduce and eventually to eliminate the threat of use of force in solving international disputes. Our second task should be to find ways to reduce the vast stockpiles of armaments in the world. We must accelerate our efforts to reach agreements that will greatly reduce nuclear arsenals, provide greater stability and build confidence.

Our third task is to establish a better working relationship with each other, one marked by greater cooperation and understanding. Cooperation and understanding are built on deeds, not words. Complying with agreements helps. Violating them hurts. Respecting the rights of individual citizens bolsters the relationship. Denying these rights harms it. Expanding contacts across borders and permitting a free exchange or interchange of information and ideas increase confidence. Sealing off one's people from the rest of the world reduces it. Peaceful trade helps, while organized theft of industrial secrets certainly hurts.

I have openly expressed my view of the Soviet system. I don't know why this should come as a surprise to Soviet leaders who have never shied from expressing their view of our system, but this doesn't mean that we can't deal with each other. We don't refuse to talk when the Soviets call us imperialist aggressors and worse or because they cling to the fantasy of a communist triumph over democracy. The fact that neither of us likes the other's system is no reason to refuse to talk. Living in this nuclear age makes it imperative that we do talk.

Our strength is necessary to deter war and to facilitate negotiated solutions. Soviet leaders know it makes sense to compromise only if they can get something in return. Well, America can now offer something in return. Our policy toward the Soviet Union, a policy of credible deterrence, peaceful competition and constructive cooperation, will serve our two nations and people everywhere. It is a policy not just for this year but for the long term. It's a challenge for Americans. It is also a challenge for the Soviets. If they cannot meet us halfway, we will be prepared to protect our interests and those of our friends and allies, but we want more than deterrence. We seek genuine cooperation. We seek progress for peace.

MacNEIL: In Moscow the President's speech was dismissed as election-year propaganda. The major news organizations accused him of using peaceful rhetoric to disguise warlike policies, and they made it clear that President Reagan's shift to a more conciliatory tone will not be matched by the language coming out of the Kremlin. Soviet Foreign Minister Andrei Gromyko did not refer to the speech when he arrived in Stockholm for the European disarmament conference. He said his country will do all it can to make those talks succeed, but the result also depended on other nations. Gromyko will meet Secretary of State Shultz, who arrived with a message from the President.

GEORGE SHULTZ, Secretary of State: The United States hopes that the conference will achieve measures limiting the dangers of surprise attack and miscalculation in Europe by rendering military activities more open, more observable, more predictable and more subject to verification.

WOODRUFF: Back in Washington, the President's foreign policy critics on Capitol Hill gave the speech mixed reviews. Illinois Democratic Congressman Paul Simon suggested if the speech had been made three years ago we could have avoided what he called "three years of mounting tension and more danger," and Minnesota Democrat Jerry Sakorski called the speech a political ploy; in his words, "such an obvious reversal speaks more to the upcoming campaign than it does to U.S.-Soviet relations." Other Democrats were not as harsh.

Sen. CLAIBORNE PELL, (D) Rhode lsland: I liked very much the tenor of the speech and most particularly its lack of rhetoric. While I regret that no specific thoughts as to how our differences should be resolved, I would hope that specific proposals would be forthcoming. My prayer, my hope, is that it shows a certain change of outlook.

Rep. LES ASPIN, (D) Wisconsin: What he was trying to do was to establish kind of a middle ground between being conciliatory but hanging firm on his own positions of the past. And I thought probably, at least in the short run, that he succeeded with that speech.

REPORTER: What about the long run?

Rep. ASPIN: The long run will depend on events. It's really tough to predict this world because things happen very unexpectedly and very quickly. So the long run -- how Ronald Reagan is perceived in the long run, both internationally and domestically, really will depend on how events go from here.

WOODRUFF: The Republicans were predictably kinder, praising the President for throwing the burden of reopening arms talks on the Soviets. Senator Orrin Hatch of Utah said, "He's extended the olive branch; let's see if they take it."

In the past, President Reagan has used a tone different from the one he used today to describe the Soviet leadership and its motives. Last March he harshly characterized the Soviet system as immoral. That type of comment has been a constant in Mr. Reagan's statements about the Soviet Union. Soon after taking office in 1981, he talked at a news conference about how the Soviets pursue what he said was their goal of world domination.

Pres. REAGAN [January 1981]: -- and as long as they at the same time have openly and publicly declared that the only morality they recognize is what will further their cause, meaning they reserve unto themselves the right to commit any crime, to lie, to cheat, in order to attain that, and that is moral, not immoral. And we operate on a different set of standards. I think when you do business with them, even at a detente, you keep that in mind.

[March 1983] Yes, let us pray for the salvation of all of those who live in that totalitarian darkness, pray they will discover the joy of knowing God. But until they do, let us be aware that while they preach the supremacy of the state, declare its omnipotence over individual man and predict its eventual domination of all peoples on the earth, they are the focus of evil in the modern world.

WOODRUFF: For more on the Reagan administration's view of today's speech and what it says about changing policy toward the Soviet Union, we talk with the number-two man at the State Department, Deputy Secretary of State Kenneth Dam. Mr. Secretary, was there a change in policy signaled by today's speech?

KENNETH DAM: Well, certainly there is a comprehensive policy toward the Soviet Union set out in today's speech. I think it's not at all inconsistent with the policy articulated by Secretary Shultz last July before the Senate Foreign Relations Committee. I think it is in keeping with the posture that we've had for some time.

WOODRUFF: Well, how would it compare then to what the President himself has said? You just saw the two excerpts from his speech from just earlier last year and then from 1981, the news conference. There is very definitely a difference in tone.

Sec. DAM: I think there's a -- you could make a difference of tone if you present certain excerpts. I'm not saying that those are not accurate of some of the things the President said. At the same time I think that the President has been somewhat thrust into that posture, or appearing to have that posture, by some of his critics. There seems to be a great demand for these harsh statements by the President, and the proof of that is that they are shown over and over again, referred to over and over again in writing. I think the President's overall position has been fairminded and straightforward over the years since he's been in office.

WOODRUFF: So are you saying that we misrepresent his position when we use excerpts like that?

Sec. DAM: I'm not saying you misrepresent it, but here we have a comprehensive statement of his position in which he has referred to the fact that we have different systems and that we have to recognize that, in which he has talked about the necessity for strength because of the Soviet arms buildup and so forth. So when yue take his entire position I think you get a much fairer view of where he is. I'm not criticizing the use of excerpts from the past.

WOODRUFF: But I think some people may wonder why the President didn't repeat some of the phrases he used earlier, like "focus of evil" and like "the Soviets reserve unto themselves the right to cheat" and so forth.

Sec. DAM: Well, there's been a lot of complaints about the President's rhetoric. You heard Senator Pell say that he felt this speech was free of rhetoric -- rhetoric about both the harsh side and the peace side. So I think the President was trying to provide something that was very straightforward, very clear and unemotional so that the Soviets would hopefully listen to what he has to say.

WOODRUFF: Has there been, though, a change in the world situation, in the international situation that would warrant a change like this in the President's tone?

Sec. DAM: Well, that's one point I want to make. I think that there has been a big change, and the big change has been that the United States has become stronger. We have a much larger defense budget. We're better positioned both to deter and to negotiate. And that's important in providing the opportunity for continued negotiations.

WOODRUFF: Whom was this speech aimed at?

Sec. DAM: I would say it was aimed primarily at the Soviets. Of course, we recognize that the whole world listens, but it was aimed at showing the Soviets that we're prepared to negotiate. We're still at the table and we want to have a better, more constructive relationship with them.

WOODRUFF: But, of course, it was timed for European news audiences too.

Sec. DAM: Well, that's true, but I think that is just part of the fact that this is a very important issue for Europeans.

WOODRUFF: Does the administration have specifics now planned to follow up the speech with? Specifics in the way of an offering to the Soviets to entice them back to the arms talks?

Sec. DAM: We are going to have the talks between Secretary Shultz and Foreign Minister Gromyko. We will see what comes out of that. The President referred to the possibility of future talks, but we think we have good positions on the table in the various arms control negotiations, and they are flexible. We're prepared to meet the Soviets halfway and to deal with their problems.

WOODRUFF: All right, thank you. Robin?

MacNEIL: As we've heard, the initial Soviet response has been negative, but to look further at how the speech will be read in the Kremlin, we turn to Arnold Horelick, director of Soviet-East European studies at the Rand Corporation in California. Before joining Rand, Dr. Horelick was national intelligence officer specializing in the Soviet Union at the CIA. He joins us tonight from the studios of public station KCET in Los Angeles. Dr. Horelick, how do you think the Soviet leaders, after the initial response through their news outlets, will read this new tone?

ARNOLD HORELICK: I don't think that the Soviet leaders on reflection will react much differently to this speech than the initial reaction by the press. I don't think they regard this speech as marking a major turning point in U.S. policy toward the Soviet Union, and I doubt very much whether they will reciprocate the moderation in the tone of this speech by playing down or reducing the stridency in their present rhetorical posture toward Washington. The Soviets right now are interested in building pressure, not in relaxing it. The purpose of this speech as they will see it is to allay concerns and anxieties in Europe, and to some extent also in the United States, that the breakdown of the arms control talks that followed on the deployment of U.S. intermediate missiles in Europe is getting out of control and is dangerous. They have no interest in helping the President allay those concerns. On the contrary, they want to increase them still further. Secondly, from the Soviet point of view, there is no change in current U.S. positions. That was laid out in the President's speech, and judging from the reports of the conversations between Secretary Shultz and Prime Minister Thatcher in London on the eve of the Stockholm talks, it is not likely that there will be any important change in the U.S. position, and the Soviet objective, of course, is to get those positions to change.

MacNEIL: But Mr. Dam has just said that the world situation has changed to this extent -- that the United States is now stronger and therefore better able both to deter and to negotiate. And Mr. Reagan said similar things in his speech, that the harsh Soviet rhetoric of recent days was probably because of the recent American buildup.

Dr. HORELICK: I think that's quite right. I do think that the American position to negotiate and to bargain with the Soviet Union is probably better now than it has been for a long time. That doesn't make it a better position or a better bargaining situation from the Soviets' point of view. I think our position, the American position, is improved. I think theirs has deteriorated sharply, and at the present time they are still smarting from the INF defeat. I think the fact is that they're just not yet ready --

MacNEIL: The INF, or the intermediate-range missiles in Europe and the fact that no agreement was reached in Geneva and they were -- the U.S. ones were deployed there.

Dr. HORELICK: Yes. They either wished to have an agreement on their own terms or they wanted to turn the deployment off by getting the European host countries that would be receiving the missiles to reject them. They failed. The failure was a consequence, it seems to me, of their own miscalculation, their own expectation that their own deployments of these SS-20 missiles would not be countered or that they would be able in the end to turn back the U.S. deployment by increasing concerns in Europe. So the bargaining situation is better for us; it's worse for them.

MacNEIL: But is it not an historic moment in the cold war, if not a turning point, when a President known for his harsh rhetoric with the Soviet Union and his appearance of being unyielding suddenly changes his tone, whether the substance -- isn't the change of tone in itself substance in the cold war climate?

Dr. HORELICK: I think it could be, but I am persuaded at this point, not only from what the Soviets have been saying publicly, but from what so many of them say to American counterparts privately, that they have a very deep conviction that this administration is not interested in and will not, as a matter of deliberate choice, negotiate with them on terms that they are likely to find acceptable. They will interpret this speech, as I believe they have interpreted this administration's policy all along, as designed primarily to build up, to maintain allied and domestic support for the priority goal of the administration, which is to improve what the administration regarded as deteriorating military balances with the Soviet Union, to contest Soviet gains in the Third World of the last decade or so, and in general, if possible, to isolate the Soviet Union internationally. For them to respond positively to what the President has said today would in effect be cooperating with him in what they regard as generally a U.S. effort designed to sustain domestic support for basically anti-Soviet policies. So I don't look for a positive Soviet response, not only in the short run, but probably not for the next few months.

MacNEIL: Well, Dr. Horelick, thank you. Judy?

WOODRUFF: Mr. Secretary, what about Dr. Horelick's comment? Was the speech just an effort to build up American domestic support here for a continued anti-Soviet policy?

Sec. DAM: I don't think so because you see the Soviets can take us up on it if they choose to do so.

WOODRUFF: What do you mean?

Sec. DAM: That is to say they can work toward a more constructive, better working relationship with us. We are prepared to negotiate; we're at the bargaining table. They have to decide whether they want to continue the kind of tactics that they used at Geneva, which was essentially to stonewall the negotiations with the hope that there would be a collapse in the NATO effort to reach agreement or deploy.

WOODRUFF: Well, what about Dr. Horelick's point, though, that the United States has really not yet offered the Soviets a real incentive to come back to the table? What are we now giving them as inducement to sit down and talk with us?

Sec. DAM: I don't think he put it quite that way. He would have to speak for himself. But I understood it a little differently. I understood him to say that their situation, bargaining situation, was deteriorating; ours was strengthening. At some point they're going to feel -- I believe they're going to come to the conclusion -- I'm not predicting this, but I would think that they would -- that they're better off negotiating than continuing to stay away from the negotiating table.

WOODRUFF: Dr. Horelick, do you agree with that?

Dr. HORELICK: I think that's not unlikely, and I think it's the most hopeful scenario for the long run. I think, however, it's premature to expect that they will do that now. I think there are still some arrows in their quiver on the INF issue. I believe that instead of trying to conciliate us in the next few months, on the contrary, I think the Soviets will try to build the pressure up even further and at some point perhaps propose a moratorium on deployments of intermediate nuclear forces on both sides, the moratorium to remain in force while the negotiations continue in order to put the monkey on our back. That is to say, to cause a cessation in the U.S. deployment until such time as there is a satisfactory conclusion of the negotiations. They know it will be very, very difficult to get those deployments started again if, in order to get them started again, we would have to walk out. Now, whether this works or not is another question. If it doesn't, then they may draw the conclusions that Secretary Dam has suggested and find that there is no better alternative than to go back to the table.

WOODRUFF: Well, Mr. Secretary, is that a plausible scenario that he just outlined?

Sec. DAM: Well, it is one possibility. If the Soviets are willing to sit down and discuss things with us, we will be having a negotiation at the table, including whatever they want to propose. But if the idea is that we would have to agree to a moratorium simply to be able to negotiate with them, it seems to me that would be unwise. It's unwise, in my view, to try to buy the Soviets back to the table. We're there, we're flexible, it's up to them to decide that they want to negotiate too.

WOODRUFF: You're saying the next move is theirs.

Sec. DAM: I think they have to speak as to what their intentions are, and I assume they will be doing so in the Shultz-Gromyko talks. We'll see what they have to say.

WOODRUFF: Dr. Horelick, if you had been advising the President, what would you have urged him to say that he didn't say today?

Dr. HORELICK: Well, I think the tone of the speech was right. I think also that we ought not to expect immediate, dramatic results. I do think that there was a pregnant phrase in the President's speech where he said to the Soviet Union tha they recognize that there has to be something in it for them in order to compromise and to negotiate. He of course didn't spell that out, but he left open the possibility that now that the U.S. is negotiating from a greater position of strength, having made its point both with respect to U.S. defense programs and with respect to the deployment of the missiles in Europe, that the U.S. might be prepared to revise the negotiating framework.

WOODRUFF: Well, let's ask Secretary Dam it there's anything to that. Was the President intentionally leaving an opening there?

Sec. DAM: Well, I would simply say -- and with regard to what Arnold Horelick was saying, that, of course, in every negotiation there has to be some give and take, and that's what negotiation is all about. But it seems to me the negotiation is the place for that to occur.

WOODRUFF: Is there room right now in the American position for modification?

Sec. DAM: We have what we think are good and constructive proposals on the table. We've made it clear that these are not take-it-or-leave-it proposals. The President has said that we will meet the Soviets halfway.

WOODRUFF: All right, thank you, Secretary Kenneth Dam and Dr. Horelick, for being with us. Robin? Democrat's Debate

MacNEIL: Now we turn to the political dimensions of Mr. Reagan's speech, which did not impress his Democratic rivals for the presidency. Senator John Glenn said. "The President has been throwing ice water on our relationship with the Soviets for three years and now wants to make up for lost time." Walter Mondale said, "The problem facing our nation and the world is that Mr. Reagan's policies have contributed to an increasingly dangerous arms race." Senator Alan Cranston said Mr. Reagan had helped create an atmosphere that makes it very, very difficult to effectively negotiate an end to the arms race. George McGovern said the speech was rhetorical. The President should be talking to the Soviet leadership on a regular basis. The Democratic candidates had made known their views on how to deal with the Soviets last night in a three-hour campaign debate in New Hampshire. It was moderated by Ted Koppel and Phil Donahue and broadcast on public television. Here's sample of the Democratic opinions.

Sen. ALAN CRANSTON, Democratic presidential candidate: If I am elected, on January 20, 1985, the day I take the oath of office, I will announce that the United States will not test or deploy any more nuclear weapons as long as the Soviets do not test or deploy. The next step would be that I would, on that same day, get in touch with the Soviet leader, Yuri Andropov or whoever is then in charge there, and suggest a very early meeting between myself and that leader and our top advisers to discuss further steps.

WALTER MONDALE, Democratic presidential candidate: Nuclear arms control is the issue of our time. There's none that compares with it. And one of the things I would like to do is to institutionalize annual summit conferences where we would meet at least once a year with the head of the Soviet Union. We know all of our differences, but to sit down and see if we can't in the name of humanity put some sense in this relationship, freeze those weapons, reduce their risks, and bring some sanity to this ever-increasingly dangerous world.

TED KOPPEL, moderator: Mr. Mondale, let me just follow up on that for one moment. If meeting once a year is good, why not meet once every three months? Why not move in together? What is magic -- what is magic about these meetings?

Mr. MONDALE: I draw the pattern on the annual summit conferences with the industrial nations --

Mr. KOPPEL: Where there is great disagreement.

Mr. MONDALE: Well, but it -- I'll tell you, when you have a president who knows what he's doing, they make a lot of progress.

JESSE JACKSON, Democratic presidential candidate: If you meet, you may not resolve the problem. If you don't meet, you're guaranteed not to resolve it. And so the odds are in your favor by meeting. The leadership must take the risk for peace and make a difference. If you meet with Andropov, if you meet, if you talk, you act: if you act, you change things. So you must -- you must unthaw that relationship before you can then agree to freeze verifiably the weapons.

MacNEIL: To further analyze yesterday's debates as well as the President's speech today, we go to two veteran political observers. First, on the Republican side, is John Sears, former campaign manager for President Reagan; and Fred Dutton, a Democrat who served as an adviser to President John Kennedy and his brother Robert when he served as attorney general. Starting with you, Mr. Dutton, what was the political significance of the timing of the President's speech today, would you say?

FRED DUTTON: Well, it certainly has a political component to it. I think that it would have been more effectively done, to the extent politics is relevant, a little bit in the latter part of last year. I must say I think it was done in relation to the Stockholm meeting, to the urgent need for arms control. But, yes, he is trying to get into the position of the peace candidate; that, and the debates in New Hampshire show that we have turned the political corner and we are deep into the political season.

MacNEIL: What's the political significance of the timing to you. John Sears?

JOHN SEARS: Well, I think as Fred says, it is definitely important for the President to make this kind of a statement before he himself becomes a candidate. One might argue a little bit about the timing, whether it shouldn't have been last year as opposed to now, but he's clearly within the ambit of when he should have done this.

MacNEIL: He's expected to announce on the 29th -- formally on the 29th of the month.

Mr. SEARS: Yes, that's right. And, you know, all incumbent presidents, especially those who are going to tes their own popularity again, I think want to come into the year as, you know, being seen striving for peace with the Russians.

MacNEIL: Now, his aides were telling reporters, for instance, in the Associated Press and others today, saying that this was deliberately made to change the perception of Mr. Reagan as warlike in case that perception was a negative factor in the coming election year. How strong, Mr. Dutton, do you think is that perception out there?

Mr. DUTTON: Well, I think that it's very strong. His own rhetoric and past history -- if Ronald Reagan has a political vulnerability, it's he's trigger-happy. I'd like to say that beyond just Reagan, however, what this also shows is the disciplining effect of the country on our political leadership, that we see the peace issue coming back very strongly after three years; we see that peace is good politics, and I think that's a very encouraging thing.

MacNEIL: How strong a liability was this perception of his being warlike, Mr. Sears, in your view? And how much did it need to be dealt with?

Mr. SEARS: Well, obviously it wasn't a great drawback in 1980. The extent to which Mr. Reagan ran popularly in 1980 would indicate that as far as the people were concerned they didn't feel it quite as much as some of the intelligentsia and some of the experts. I do think, though, it is something that is constantly on the minds of the people at the White House as something that they ought to deal with, and today was an effective first step in doing that.

MacNEIL: Senstor Cranston and Senator Glenn and others said today it's too late to change the tone after three years. Do you agree with that, Mr. Dutton?

Mr. DUTTON: No, I do not. I think the political span in which great movement can be made is substantial, and it's certainly in the interest of the Democratic candidates that they believe that too.

MacNEIL: In other words, Mr. Reagan can change voters' perceptions by making a speech like this now?

Mr. DUTTON: Well, I don't think it's just the speech. I think that is the start. I think that he has to follow through with performance, perhaps the Soviets will blunt it, but if the Soviets give him any chance or play the string, I think Mr. Reagan has to follow through, if he's going to be credible, by late spring.

MacNEIL: Given the political purposes of this speech, as you see them, Mr. Sears, how successful was it?

Mr. SEARS: Oh, as Fred says, I think it was a good first step. Obviously Mr. Reagan will have to follow this up with credible actions and more speeches, but it was a credible first step.

MacNEIL: Well, thank you both. Judy?

WOODRUFF: Yesterday's debate among the Democratic presidential candidates provided some of the liveliest exchanges in that race so far, especially between Walter Mondale and John Glenn.Glenn renewed his attack today and accused Mondale of basing his campaign on vagueness. Their disagreement was sparked more than halfway through the debate after Phil Donahue took over as moderator and invited questions from the audience.

CITIZEN: Mr. Mondale, you said you want to balance the federal budget. Besides eliminating waste, what else will you do to bring that about?

Mr. MONDALE: I would do several things. First of all, I would scale the defense budget to reality. Secondly, I would impose a very strong program of health care cost controls. Thirdly, I would administer the agriculture budget, which has been criminally handled by this administration and now costs some $20 billion or more, when it's never cost more than $5 billion in the past -- I can administer that in a way that it'd bring those costs down dramatically. I think we need to restore revenues, and I have a specific proposal that would increase and restore revenues progressively so that the people of great wealth, the large corporations that have gotten away with murder while the average American's taxes have gone up, would have to join the rest of us. And I would make other cuts, but I would also add something in terms of education and science, in terms of promoting the competitive forestructure and also in terms of restoring some fairness in American life. I've worked this out very carefully. I have worked this out carefully, and I am pledged, and I can achieve it to reduce the Reagan deficits by more than half.

Sen. JOHN GLENN, Democratic presidential candidate: Let me point our that's the same vague gobbledegook of nothing we've been hearing all through this campaign. Let's just get with it. Let me say something here. There wasn't a single figure attached to that except we're going to reduce it by half. I have put out a very specific program. Other people here have oo. This gentleman that just made that statement here -- and I like Fritz, he's a fine man. But when you go before labor and you promise you're going to match foreign governments subsidy for subsidy, dollar for dollar, and the cheapest estimate we can get on that is $50 billion. Reubin Askew, who was special trade representative, estimates it's $130 billion. And then you go before other people and you promise them everything else. Is this going to be a Democratic Party that promises everything to everybody and runs up $170 billion a year -- let me finish -- $170 billion a year that will only help put more people out of jobs. That's ridiculous. If we're going to balance this budget, it's going to come as we do the things that I've proposed where we cut the budget and where we go on a pay-as-you-go system where we have a surtax, where we have -- defer that indexing. That's the way to it, not going out promising everything to everybody and then not even bothering to go through the checkout counter. I'm disgusted and tired of all the vague promises. I wish that the former Vice President would in fact get some figures down so they can be compared with what the rest of us are proposing.

Mr. MONDALE: The first point, Mr. Glenn, is that the reason we have $200-billion deficits is that you and some others voted for Reaganomics --

Mr. GLENN: No, I'll tell you why I did.

Mr. MONDALE: Hold it. Hold it.

Mr. GLENN: I'll tell you why it is.

Mr. MONDALE: Hold it! You've gone first. You voted for Reaganomics --

Mr. GLENN: It's because your administration gave us 21% interest rates, 17% inflation rates -- '

Mr. MONDALE: Who has the floor here? Mr. Donahue, who has the floor?

Mr. GLENN: And that's why we lost the White House and it's why we --

Mr. MONDALE: Who has the floor here?

Mr. GLENN: -- we lost the Senate.

Mr. DONAHUE: Mr. Mondale.

Mr. GLENN: You said it was free floor here.

Mr. MONDALE: Wait a minute now. Mr. Donahue, may I have your -- there's just been about a six-minute speech, all of it baloney, and I would like to have six minutes to answer. Do I -- now, just a minute. Mr. Glenn voted to create these $200-billion deficits that we're suffering from. He wants to add the B-1 bomber; he voted for poison nerve gas, and he tries to attack my specific proposals that would reduce the federal deficit by --

Mr. GLENN: Ah, they're not specific. There's nothing specific about them.

Mr. MONDALE: -- more than half by voodoo -- now, wait a minute now. By voodoo numbers. For example, let me tell you how he gets up to his figures.

Mr. GLENN: His third-grade arithmetic -- his third-grade arithmetic --

Mr. MONDALE: I've proposed $11 billion for education; he says it's $50. I propose to put American back to work; he said, "Oh, you want to hire everybody on the federal payroll." Those are baloney figures. My position is responsible, and -- we're doing just fine.

REUBEN ASKEW, Democratic Presidential candidate: What I'd like to say is you're both right.

Mr. JACKSON: To the right.

Mr. ASKEW: You know, they're both right in what they say about each other. You will have to --

GARY HART, Democratic Presidential candidate: Fritz, John, there you two go again. The fact of the matter is this party will not regain leadership so long as the leaders of the past continue to debate whose policies of the past were the worst. Unless we offer some new ideas and some new leadership and recognize the fact that the decline of American industries occurred before Ronald Reagan -- Ronald Reagan didn't invent deficits, he just compounded them.Our party has made some mistakes. And quarreling between the two of you as to whose mistakes were the worst are not going to win the election or govern this country.

Mr. DONAHUE: And you bring what difference to --

Mr. HART: Mr. Donahue, what I bring to this race is unique, and that is new leadership and new proposals to address the new generation of problems of this country from economic revitalization to foreign policy and arms control.

Mr. MONDALE: Just a moment now.

Mr. JACKSON: You didn't hold up your hand, Fritz.

Mr. MONDALE: My proposals for education are new. My proposals for arms control are new. My proposals for hospital cost containment are new. My proposals to bring down this deficit are new. Across the board I am talking about leadership that restores American competition, leadership that restores a sense of fairness in American life, and leadership that leads to a fair world. It is only leadership that deals with the future, backed up by the experience to get it done, that is worthy of that presidency. And it is by that definition that I seek the presidency, and I believe my record establishes that.

Mr. HART: Fritz, you cannot lead this country if you have promised everybody everything.

Mr. MONDALE: Correct.And I have not. I have promised to educate the next generation. I have promised to put people back to work. I have promised to protect the environment. I have promised to ratify the equal rights amendment. I have promised to stand up for old folks, who have got a right to have a friend in the White House who protects them on Social Security and Medicare, and I have promised to do everything I can to seek a safer world, and I am proud of every bit of it, and America is nothing if it isn't promises. That's what America is about.

GEORGE McGOVERN, Democratic presidential candidate: Can one of the rest of us inject something here? You know, just listening to this argument here, I think it's fine that we air our differences, but all of us jumping on the frontrunner here -- and I didn't expect to come here today to defend Fritz Mondale, but sometimes frontrunners get nominated. And I think -- I think --

WOODRUFF: All right, we're going to continue our political analysis with John Sears and Fred Dutton, and let's look at the debate as a whole. I know both of you watched the entire three hours. Mr. Dutton, who helped himself the most?

Mr. DUTTON: I think the back of the pack did. Gary Hart, Fritz Hollings. Jesse Jackson. The frontrunners always --

WOODRUFF: Now, why? Why, for example, did Hart?

Mr. DUTTON: Well, Hart -- because they got noticed finally. Because they have been below the surface of public awareness, I think, for the most part, and finally they were able to show they were individuals, that they were able to compete on a relatively equal basis on national television.

WOODRUFF: What about Jesse Jackson? You said he had helped himself.

Mr. DUTTON: Yes, I think greatly. I think the perceptions of Jackson beforehand, emotional, let's say a Baptist minister. I think he showed that he had figures, facts, that he had presidential restraint. He -- I think he changed the image of himself in a lot of people's minds, probably more than anyone on the program.

WOODRUFF: Anybody else help himself as far as you're concerned.

Mr. DUTTON: No, I think those were the main ones. I didn't think that, quite frankly, either George McGovern or Askew did, and I think the two frontrunners got somewhat bloodied.

WOODRUFF: All right, would you agree, though, Mr. Sears, with what Mr. Dutton said about who was helped?

Mr. SEARS: Yeah, basically, and I do think that Gary Hart probably, if there is any gain to be made out of this, probably did better than anyone else for the reasons that Fred mentioned. I want to say that as a Republican it's sort of funny to me to be able to sit here and watch the Democrats have a spirited ddbate about who can balance the budget better. We are the party that used to do that at great length for 50 years, and finally have managed not to do it this year so far. So it's sort of interesting from that standpoint.

WOODRUFF: In your mind, who was hurt? Was anybody really badly hurt in this?

Mr. SEARS: Well, frontrunners naturally are hurt somewhat by these kinds of controversies. The debates are not good things for frontrunners. They already have broad support; their only risk or their biggest risk is that they may lose some of it; therefore they tend to come off as either a little, you know, unappealing or a little bland. All the others --

WOODRUFF: Is that what Fritz Mondale did?

Mr. SEARS: Well, I don't think Mr. Mondale helped himself. If you're trying to guess at who gained the most from it, I think Mr. Hart probably did.

WOODRUFF: You said a couple of the others had bloodied themselves. You said the frontrunners. What did you mean?

Mr. DUTTON: Well, what I mean by Mondale and Glenn is they had that exchange. Let me suggest though, beyond just the immediate people, I think the process was the winner.I think the Democratic Party was; I think the country was.I think that our polities came alive. The answers sometimes were too short, off the top of the head, but this is the testing process which the campaigns, the primaries do, and I think it was a very good exercise.

WOODRUFF: But does one debate like this make any difference in the scheme of things?

Mr. SEARS: Well, I think afterwards we'll be able to tell the answer to that a little bit better. I think debates themselves are probably overvalued as reasons why people do things, but they are excuses for people to do things.

WOODRUFF: Go ahead.

Mr. SEARS: But I don't know that we sitting here today can quite guage exactly what kind of excuse on behalf of whom the people of New Hampshire will makes this.

WOODRUFF: Did we learn anything new from this debate? I mean, we didn't learn anything new as far as anything I could tell in terms of the issues or where these people stood or stand on the issues. But did we learn anything in terms of how they relate or how they --

Mr. DUTTON: Well, I think the country began to get an insight into these people as human beings. This was not a staff-presented speech or a very carefully calculated kind of a picture situation. This is only the first grain of sand in the picture, but I must say that I think that presidential campaigns are cutting through to the human being to a great extent in a very subjective way. And I thought the country began to get a good feeling for that last night.

WOODRUFF: What does all this do for Ronald Reagan, or does it have any affect on him?

Mr. SEARS: Well, I think to the degree that Mr. Mondale did not come out of this unbloodied, it's a help to Ronald Reagan, and I think everybody expects that Mr. Reagan will be facing Mr. Mondale, and to the degree these kinds of affairs begin to make people question his leadership, well, they're helpful to Mr. Reagan.

WOODRUFF: All right, thank you both, Fred Dutton and John Sears, for being with us. Robin?

MacNEIL: In Washington today President Reagan promised aggressive action on recommendations from a blue-ribbon panel to save the government $424 billion in four years. The panel, chaired by Peter Grace, handed its report to the President today with a list of nearly 2,500 steps for reducing wasteful spending. Mr. Reagan said, "I pledge to you not just talk but aggressive action on your recommendations. We will take it from here and do our utmost."

Meanwhile, leading economists of the West had a warning about the U.S. economy today. They said that economic recovery may begin to evaporate next year if the administration does not cope with the huge federal deficits. The warning came from the OECD or Organization for Economic Cooperation and Development, a group of 24 Western industrialized nations with headquarters in Paris, which issues periodic economic surveys of its members, including the United States. While its figures for U.S. growth, inflation and unemployment were similar to forecasts issued here, the OECD said there were warning lights flashing on large projected government deficits, high interest rates, and a strong dollar -- signs which could bode ill, it said, for 1985.

We'll be back in a moment.

[Video postcard -- Point Marion, Pennsylvania]

MacNEIL: In Lebanon, Christians and MoslemDruse militias fought heavy artillery battles in and around Beirut today and the casualties were estimated as high as 18 people killed and 64 wounded. Fighter bombers from the American task force offshore flew over the city and the nearby mountains, apparently on reconnaissance missions, but there were no reports that any Americans were engaged in combat.

In the south, Major Saad Haddad, the maverick who left the Lebanese army and sided with the Israelis was buried today.He died of cancer on Saturday at the age of 48. Several prominent Israelis attended the funeral, including Prime Minister Shamir, who praised Major Haddad as a great friend, a loyal and devoted Lebanese who kept faith in spite of threats, dangers and temptations.

And King Hussein of Jordan, convening his parliament for the first time in 16 years, hinted broadly that he would welcome new talks with Yasir Arafat of the Palestine Liberation Organization, and called openly for restoration of diplomatic relations between Jordan and Egypt, which has recently become friendly with Arafat once again.

Judy?

WOODRUFF: The Supreme Court ruled today that news reporters who enter private property, even in the process of covering a story, may be prosecuted. The Court sided with the state of Oklahoma, which had convicted six journalists for joining an anti-nuclear demonstration on the grounds of a proposed nuclear plant site. The high court left standing an Oklahoma court ruling that said the First Amendment does not guarantee the press a constitutional right of special access not available to the public generally.

In other decisions the Supreme Court agreed with a New York ruling that airlines may not force stewardesses to take leave as soon as they become pregnant. The Court also refused to free the American Telephone and Telegraph Company from having to pay a $276-million antitrust award to Litton Systems, Incorporated. And it killed an effort by five states to recover from 13 oil companies millions of dollars their citizens spent on inflated gasoline and heating oil prices.

Robin?

MacNEIL: The nation's factories, mines and utilities increased their operating rate last month for the 13th month in a row. The Federal Reserve Board said U.S. industry was operating in December at 79.4% of capacity. Such continued evidence of economic recovery has not caused backers of a national industrial policy to slacken their efforts. For months, leading Democratic candidates and members of Congress have been calling for such a policy to give the government a major role in restoring growth and competitiveness to the nation's basic industries. Today a prominent group of business, labor and government leaders announced the most ambitious and probably the most controversial plan so far. It calls for the creation of a government bank backed by $5 billion in federal funds to make loans to companies struggling against foreign competition. It also proposes a new White House group manned by key labor and business leaders as well as government officials to decide which businesses receive government assistance. The plan was unveiled in Washington today by three of its key backers -- investment banker Felix Rohatyn, labor leader Lane Kirkland, and Irving Shapiro, former chairman of DuPont.

IRVING SHAPIRO, Industry Policy Study Group: If this nation is going to get its industrial act together, the leadership of labor, the leadership of industry and the leadership of government have got to be working together. If you look at Japan, that's the lesson from the Japanese, not MITI, but the fact that the key leaders of government, the key leaders of industry come together on a daily basis; they understand what the ground rules are; they understand what is doable and they work together to make it happen.

MacNEIL: Speaking of business, last October we broadcast a profile of one of the most successful men in the current home computer boom. Jack Tramiel, chief executive of the Commodore company.Under his direction, Commodore grew from a typewriter repair company to a corporation that dominated the low-price home computer market. Last year the company's sales passed the $1-billion mark. When we talked with him, Tramiel had a singular attitude to winning.

JACK TRAMIEL, CEO, Commodore: When you come out with a product or when you are in business, you have to have an attitude that it's war and it's there to win. You have to be the winner.

MacNEIL: On Friday his war stopped. The company said Tramiel was leaving as president. A company spokesman said, "To fight the war Commodore needed a general. Now that the war is won, you need occupational troops." The stock market apparently disagreed. Commodore's stock fell today by 2.5 points to 45 and 7/8ths. Judy?

WOODRUFF: Turning now to a final look at the day's news, President Reagan said the United States and the Soviet Union have much to talk about despite differences in their two systems. He urged Moscow to begin a new effort to ease world tensions.

Tensions were high in the Middle East as Druse and Christian militiamen traded barrages in Beirut. That's where U.S. Special Envoy Donald Rumsfeld met with Lebanese President Gemayel. They are continuing the search for an end to Lebanon's civil war.

Here at home politicians were busy assessing the impact of yesterday's free-for-all debate among the Democratic presidential candidates. Results, as expected, are open to different interpretations.

And the Supreme Court was busy today. It ruled the First Amendment doesn't protect reporters who trespass while covering a story.It held that AT&T must pay a $276-million antitrust award, and denied an effort by five states to recover consumers' money they say was spent on inflated oil and gas prices.

Robin? Helen Santmyer's Debut

MacNEIL: Have you ever daydreamed about what it would be like to wake up one morning and discover that you're famous, that the novel you struggled over in obscurity for years and years has suddenly been recognized as a work of genius, that they're calling from New York for interviews? Well, listen to this.

[voice-over] This is Xenia, Ohio, a town of 28,000 13 miles from Dayton. The last time it hit the front pages was in 1974 when a tornado struck here and killed 34 people. Last week a book written by an 87-year-old nursing home resident was named a Book-of-the-Month Club selection, and the town was hit again, this time by a media storm.

HELEN BRANTLEY, nursing home administrator: Well, when I came to work yesterday morning in that beautiful snow that had fallen the night before, it was just -- the phones were ringing, and the first people who called were the Today show. At that time we did not know the articles on The New York Times. And so we became very aware of what had taken place in New York, and we then realized that she was on the front page and she had taken precedence over all the current news -- worldwide news.

MacNEIL [voice-over]: But NBC wasn't the only oneto call. CBS called.

DAN RATHER, CBS Evening News: In 1920 Sinclair Lewis, who would later win the Nobel Prize for literature, published Main street. The novel took a hard look at what Lewis saw as the severely limiting provincialism and prejudices of small-town life in the United States. A young woman reading that book thought it was unduly harsh. She turned to writing a novel that would show another side of small-town America.

CBS Morning News [interviewing Ms. Santmyer]: Thank you, Ms. Santmyer. We'll read through those 1,300 pages about Xenia, Ohio, . . . And Ladies of the Club.

MacNEIL: So did ABC and crews from local stations and reporters and photographers from Time and Newsweek. At last count, some 25 news organizations had called. We called also, and Helen Santmyer, who wrote . . . And Ladies of the Club, told our reporter, Nancy Nichols, how she felt about all this media attention.

HELEN SANTMYER, author: Well, I suppose it's very flattering. I can't say I enjoy it. Wears you out for nothing, I must say, it seems to me. In can't think that all the critics I have talked to really take the book as seriously as they present themselves as being.

NANCY NICHOLS: Why did you write the book?

Ms. SANTMYER: It was there to do. I don't think I had any great ambition for it. But it was a picture of what the town had been through in the last, you know, more than one generation. What moved the town, really, most? What concerned it? Politics. Business. The things that concern every town, I guess. Certainly every small town.

NICHOLS: What's special about living in a small town like Xenia?

Ms. SANTMYER: Well, for one thing, you know all kinds of people. If you live in the city you know your kind of people, but you don't rub into some of the other kinds. It's more various, I think. People would find that hard to believe, but I think it's true.

NICHOLS: Was it a response to Sinclair Lewis' unflattering portrait?

Ms. SANTMYER: No. I mean, it had nothing to do with why I wrote the book, no.

NICHOLS: Why did you persevere in writing it for all those years?

Ms. SANTMYER: Well, in the first place, it wasn't all those years. It wasn't nearly as long as they've been saying. I didn't start it until, as I said, after I finished Ohio Town, and that was in the '60s.

NICHOLS: People are saying that you've written the great American novel.

Ms. SANTMYER: Well, I haven't heard anybody say that. Don't think so. I don't think seriously that there can be a great American novel. The country is too various. Have a hard time writing a novel that could represent the whole country. After this blows over nobody's going to read it. It's too much of an undertaking.

NICHOLS: Will you write another one?

Ms. SANTMYER: No, indeed. Not at my age. No.

MacNEIL: Even if Helen Santmyer took 20 years to write that book, and she is now 87, she couldn't have begun it until she was 67, which leaves some of us a few more years to make excuses.

Good night, Judy.

WOODRUFF: Well, a few years, Robin. Good night. That's our NewsHour for tonight. I'm Judy Woodruff. Thank you and good night.