The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight a look at the various tax cut proposals now on the Washington table; the new image and function of public housing in Chicago; some thoughts about a passing era of movie stars; and a Betty Ann Bowser report on the memorial to the victims of the Oklahoma City bombing, it all follows our summary of the news this Thursday.NEWS SUMMARY

JIM LEHRER: The nation's unemployment rate was 5 percent last month. The Labor Department reported today that .2 percent jump over the main number triggered a Wall Street rally. The Dow Jones Industrial Average went up 100 points to close at another record high, 7895.81. Analysts said the unemployment figure was read as a sign there was little inflation in the U.S. economy. Another major merger was announced today. Lockheed Martin, the nation's largest defense contractor, will buy Northrop-Grumman for $11.6 billion. The resulting company would have a combined work force of 230,000. Just two days ago federal regulators approved a merger of Boeing and McDonell-Douglas. The Lockheed deal should be completed by the end of the year, pending approval from shareholders and the federal government. The state of Mississippi reached a settlement today with the tobacco industry. Attorney General Mike Moore said Mississippi will get $3 billion to compensate for public funds spent to treat ailing smokers. Mississippi and cigarette makers were to go to trial in five days over that issue. Moore said the deal would stand even if federal legislation to implement last month's national settlement is not enacted. He spoke at a news conference in Jackson with other lawyers who worked on the deal.

MICHAEL MOORE, Mississippi Attorney General: The deal that I have achieved for Mississippi will be the deal no matter what. We'll get to keep this money whether the national settlement passes or not. But I have to tell you, there's a little hollow space in my belly, even with a settlement this large, the largest settlement in American history, that tells me that if we don't achieve for our children and for the public health in this country what we have fought so hard to get in the negotiated settlement, we'll never, ever get an opportunity to do this. That's why I'm pleading to the President of this country and to the Congress to please pass this bill.

JIM LEHRER: The Senate Judiciary Committee is scheduled to hold hearings on the national tobacco settlement later this month. Thirty-four U.S. veterans groups today endorsed extending NATO's membership to three countries: Poland, Hungary, and the Czech Republic. They joined President Clinton for a ceremony in the East Room of the White House. The President has said he would not support including Romania and Slovenia at this time. French leaders said they would push for all five to be included next week at a NATO summit in Madrid. Mr. Clinton said enlarging NATO will strengthen Europe.

PRESIDENT CLINTON: NATO will now help Europe to come together in security, not be kept apart in instability. NATO's doorswill remain open to all those willing to shoulder the responsibilities of membership so that we do not replace an old division in Europe with a new one. And this is also critically important. The decision the NATO allies will make in Madrid must not be a one-time decision.

JIM LEHRER: Admitting Poland, Hungary, and the Czech Republic to NATO is expected to cost the U.S. at least $150 million a year for ten to twelve years. Bad storms moved through parts of Michigan, Ohio, and Indiana late yesterday. At least seven people were killed. In Grosse Point Farms, Michigan, three children and two adults died in a park near Lake St. Clair. They had taken shelter in a gazebo that was blown into the lake. At least 12 tornados touched down, damaging buildings and lifting homes from their foundations. Trees were uprooted. Power lines were snapped, leaving thousands of people without electricity. The governor of Michigan declared a state of emergency for the city of Detroit. The Mir space station suffered another setback today. The gyroscopes that orient the craft and its solar panels toward the sun shut down for the second time in two weeks. The Mir crew used backup steering engines that run on fuel that is in limited supply on Mir. Russian space officials said the problem is serious but fixable. In Japan today authorities said they overestimated the size of the oil spill in Tokyo Bay yesterday. Only about 400,000 gallons of crude oil, not 4 million, leaked from the supertanker Diamond Grace after it hit a reef. The Japanese Coast Guard was blamed for overreacting. They were criticized in January for not responding fast enough to an oil spill by a Russian tanker. And that's it for the News Summary tonight. Now it's on to cutting taxes, public housing, the changing face of movies, and the Oklahoma City memorial. FOCUS- TAXING PLANS

JIM LEHRER: Economics Correspondent Paul Solman of WGBH-Boston begins our coverage of the taxes story.

PAUL SOLMAN: To begin with, there are three competing tax cuts on the table: President Clinton's plan, the House plan, and the Senate plan. They're similar in that they each cut taxes by about the same total amount as agreed to in the balanced budget deal. But they differ when it comes to the four major specifics of the plans: Child tax credits and college tax credits, capital gains tax cuts, and estate tax cuts. Now, to illustrate how the plans differ for real people we came up with three families at various levels of income: a low income household, a divorced mother with two young kids, a middle income family, a self-employed husband of a working wife may have a five-year-old, and an anonymous composite high-income stereotype, since we couldn't get a real family to appear on camera. Finally, to make sense of all this, we recruited a tax expert, Michigan economist Jim Hines to apply each of the plans to each of our families. Okay. Let's start with our low- income entrant, Linda. We're using first names only to try to provide a measure of privacy.

LINDA: I make $22,000 a year as a cost analyst for Century Protective Systems, and I have two children. My daughter is 11. My son is nine and a half. I live basically off a credit card because I don't have the cash to make purchases.

PAUL SOLMAN: Linda had given her income numbers to Professor Hines , who crunched them for us and calculated her tax bill. After getting an earned income tax credit, she pays $100 in federal income taxes. So, first, the President's plan.

JAMES HINES, University of Michigan: Under the Clinton plan with two children you're eligible for an $800 credit in the first year and a $1,000 credit thereafter. For someone who is only paying $100 a year in federal income tax already, it means that you would need to get money back.

PAUL SOLMAN: But Linda wouldn't get anything else, no college taxes, no breaks on capital gains, which he doesn't have, or estate taxes. She neither has an estate nor stands to inherit one.

JAMES HINES: The only other that might help her in this plan is that it's possible for the economy to be improved by this tax reform and, as a result, some day she might get a better higher paying job, but that's pretty speculative.

PAUL SOLMAN: Okay. Now, how does Linda do under the House and Senate tax plans?

JAMES HINES: Under the House plan she gets a child credit, but it's limited to the amount of her tax liability, which is only $100, so she gets a child credit, in essence, for $100. No benefit from the education credit, from the capital gains tax reduction, or from the estate tax reduction.

PAUL SOLMAN: Under the Senate plan, however, Linda will get a child tax credit, in her case because of the quirk involving the earned income tax credit. As a result, she'll get $750 a year, but again nothing for education, nothing for capital gains, and nothing for estate tax cuts. So when you compare the three plans--

JAMES HINES: She does best under Clinton, and so do low income taxpayers, in general. As it happens, do to her special tax situation, she'll do almost as well in the Senate plan, but only a small number of people fall into that category, and she does very poorly under the House plan.

PAUL SOLMAN: We had one more pertinent fact about Linda. Like millions of Americans, she smokes. Both the Clinton and Senate plans, but not the House, would increase cigarette taxes by 20 cents a pack, costing Linda about $75 a year. But it also might get her to stop smoking entirely.

LINDA: And I have just recently bought Nicorette gum because I can't afford to smoke. It's a luxury. It's a bad habit, but it's a luxury, and I hope to give it up. I did make that purchase on a credit card for the gum so that I can do away with that, because that will be more money I can save too.

PAUL SOLMAN: So you consider yourself a typical middle income family?

DAVID: Yes, I do.

PAUL SOLMAN: Okay. On to household number two. David works at home in a very modest neighborhood in very expensive Cambridge, Massachusetts. His wife took the afternoon off to take their five- year-old to the doctor. Household income about $65,000, well above the mid point for American families but considers himself squarely middle income.

DAVID: Well, I mean, the main factor is that the money we make is gone by the end of the month. If you think about it on a monthly basis, the money goes to the mortgage, the insurance, the car, the child care, the food, all the basics, and at the end of the month, there's nothing left.

PAUL SOLMAN: Prof. Hines crunched the numbers of David's family too: $65,000 in wages, another $1,000 each in interest in capital gains; one child, a mortgage, IRA contributions. In all, this family pays about $10,000 a year in federal income taxes, roughly the median in America. David's family, like many in the American middle, does stand to inherit, although only possibly, and who knows how much. Okay. So how do the three plans compare for this family?

JAMES HINES: Under the Clinton plan, these taxpayers are eligible for a child credit, but not all of the child credits, the reason being that they're in the income tax bracket where the credit starts getting phased out. In the first year, instead of getting a $400 child credit, they would get only $300. They wouldn't get any education benefits. They'd have rather modest capital gains and might save $30 a year in capital gains, and don't get any benefit from the estate tax.

PAUL SOLMAN: That's because the president's plan only lowers the estate tax for those with businesses or farms, irrelevant to this family. Now, under the House plan, our middle income family would get $400 in child credits, nothing for education yet, because the kid is too young, about $30 for capital gains, but if they were to inherit a lot, they would get a break. Under the Senate plan they'd get an even higher child credit of $500, nothing for education, $30 for capital gains, the same estate tax break the House has given. The plans didn't knock David out, but he wasn't poopooing the child credit.

DAVID: Yes, that's very nice. That's very nice. We spent over $8,000 last year on preschool.

PAUL SOLMAN: Is that right?

DAVID: Full-time daycare, five days a week, so that we can work. Now that credit is nice. I'm not saying it's not.

PAUL SOLMAN: On to our last family, an anonymous high-income stereotype, remember, featuring a lawyer father, a middle manager mother, a 17-year-old high school senior, a seven year old and a preppy pre-teen. Their income: say $125,000 for dad, $75,000 for mom, $22,000 this year in stock dividends, $37,000 in capital gains, $6,000 in interest income, in which case their total federal income tax bill would be $66,000.

JAMES HINES: Under the Clinton plan their income level is too high to receive any of the child credits. They will, however, get an education credit when their 17 year old goes to college. They'll get $1,500 a year back as a credit for that.

PAUL SOLMAN: And then it goes up after a couple of years.

JAMES HINES: It goes up after two years.

PAUL SOLMAN: They'll also benefit from capital gains tax reduction, though modestly, about $1,000 a year. But no businesses or funds to inherit, so no estate tax break. Owning lots of corporate stock, however, will be a benefit, says Professor Hines.

JAMES HINES: Well, because the tax plan reduces the taxes on capital gains and also includes many provisions that reduce corporate tax plans, it'll increase the value of stocks.

PAUL SOLMAN: Okay. Back to our favorite graphic one last time for the House and Senate plans.

JAMES HINES: Here, the House and Senate plans are identical. Under neither plan will they get any child credits because their income is way too high for that. They are, however, eligible for the education tax credits. When their 17 year old goes to college, they'll get $1500 a year for the first two years, and then nothing after that. They'll have more generous reduction of their capital gains taxes under the House and Senate plans. They'll save about $3,000 a year under each of those plans.

PAUL SOLMAN: As for estate taxes, their kids may eventually benefit from tax breaks on the parents' estate, as the parents may from anything they inherit. Finally, people with high incomes tend to own a lot of stock. Economists at least think stock prices will go up if capital gains and corporate taxes are cut. They figure to go up more under the House and Senate plans than under the President's because the tax cuts are bigger. Add it all up, and in the short-term, our low-income family does best under the President's plan; our middle income family under the Senate's; our upper income under either the House or Senate. But, of course, the justification for these tax cuts is their effect on the economy in the long-term. And here, the argument is that cuts on capital gains and corporate profits will stimulate investments, and, thus, economic growth, while the President argues that educational investments in people, via larger tuition credits, is a greater key to prosperity.

JIM LEHRER: Margaret Warner has more.

MARGARET WARNER: For further analysis of these tax plans and their potential impact I'm joined by William Gale, an economist at the Brookings Institution in Washington--he served as senior staff economist for President Bush's Council of Economic Advisers; and Lawrence Kudlow, chief economist at American Skandia Life Insurance, a financial services firm. He was a senior budget official in the Reagan administration. Mr. Kudlow, how typical were those three families, do you think, in telling us who's going to do best under which plan?

LAWRENCE KUDLOW, American Skandia: Well, I think they were typical. I think that that was a good rundown. There's an awful lot that's absent from that kind of view. It's a very, you know, personalized view, almost a class view. It doesn't really deal with a lot of issues about the health of our tax system, the health of our economy, and the efficiency of either this tax plan or, in general, our tax system, but it is what it is. And it sounded pretty accurate to me.

MARGARET WARNER: And what did you think of those--in other words, do you agree with the basic conclusion that, in general--this is to Bill Gale--the lower income people would do better under the Clinton plan and the middle class actually under the Senate, and the wealthy better under House or Senate?

WILLIAM GALE, Brookings Institution: I think it was right as far as it went. There were two factors I thought that were left out. One is that households that earn less than $22,000 won't benefit from any of these plans. One of the big problems is the child tax credit does not extend to many low income households in either of the plans. The other factor that I'd like to highlight is all these plans are complicated and all those families will be heading to the tax preparer's office, so some of the money that they save in tax cuts they will turn around and spend at the tax preparer's office.

MARGARET WARNER: All right. And Larry Kudlow, back to you-- and if we could, I'm going to get on to the big picture, but just another final question about individuals--all three sides say they're doing most for the middle class. One, how do you define middle class, and [b] if you're a middle class person out there, what should you be rooting for to come out of the conference? In other words, these three plans are going to be put together somehow.

LAWRENCE KUDLOW: I think that the middle class is to some extent a state of mind, but I suppose in some official Census Bureau sense you might say people earning between twenty-five and sixty thousand dollars a year. That's just a rough guess. That's the 28 percent tax rate bracket in this country. But I think people want permanent tax rate reduction, and I think people would rather spend the money on their own, rather than be told here's target, here's how you spend it, here's how you're supposed to behave. Everybody prefers lower tax burdens, including myself. I think that's the good news. The bad news is this is such an inefficient non-permanent kind of program it doesn't help take-home pay, permanent take-home pay. And what's more--and I think this is really crucial--a large chunk of the American taxpaying population will receive virtually no tax relief at all.

MARGARET WARNER: And why is that?

LAWRENCE KUDLOW: Well, for the simple reason that they may not have children as dependents; they may not have anybody going to college; they don't qualify for various earned or unearned income tax credits.

MARGARET WARNER: As we saw in that setup.

LAWRENCE KUDLOW: Absolutely. Income tax cuts were not undertaken in this program, and I think that's a big problem. Furthermore, a lot of Americans are going to wind up paying more taxes after this bill is passed because those who fly airplanes--there's a huge transportation tax--and, as your segment noted, smokers are going to pay more, and various other corporate and individual classes are going to get nicked. So there's a couple of things in this that I like, but I think this is really an incomplete bill, it's an inefficient approach, and yes, I'm glad some people are going to get relief. I don't think this is a home run, not even close.

MARGARET WARNER: Do you agree, Bill Gale, that a great percentage of people won't get anything, and have you studied this? Do you know what percentage of taxpayers will get anything?

WILLIAM GALE: I cannot give you that number. It's clear that households in the very lowest income groups will not receive benefits from this tax plan. I think Larry Kudlow's right. A substantial proportion of households won't receive anything in the way of tax benefits. But if I were sort of Joe America looking at this tax bill I would think--I would want to know two things--one is I'd like to hear a reasoned justification for why we have a tax cut now when we have these looming Social Security and Medicare deficits in the next ten to fifteen years. And the second is, if we do have a tax cut, why do we have a tax cut that doesn't increase economic growth, that doesn't shut down loopholes, that doesn't cut tax rates, and that doesn't make the tax system simpler?

MARGARET WARNER: Those classic goals usually of tax changes.

WILLIAM GALE: Right. Usually when we're talking about improving the tax system and helping the taxpayers, those are the type of things we have in mind. This tax bill I agree with Larry Kudlow-- this tax bill is just completely the opposite direction. It's more loopholes, more of the government sort of picking winning activities, and we've been down that road before, it doesn't work, and we're going to find that out once again.

LAWRENCE KUDLOW: I completely agree with that, and I'll say--

MARGARET WARNER: Let me ask you this. Why wouldn't it stimulate economic growth? I mean, the Republicans are saying, hey, the capital gains tax cut, that will stimulate growth?

LAWRENCE KUDLOW: Well, I think it will. I mean, that is the area that I strongly support. I've held the view for a long time that we need to reward and nurture the risk takers and the investors in our economy. And I think that's especially true today. This is an information age, high-tech, innovation-driven economy, and it's doing very well. We have a lot of prosperity, thankfully, perhaps the best in the world. I'm glad that we're lowering the capital gains tax rate. I think we're going to get good results from that. It's a job creator. The new Microsofts and the new Intels will come from this kind of high risk capital rewards, and, therefore, it'll throw off revenues and help lower the budget deficit. All that is fine, but, look, there is such a mess in the middle of this thing that we need to address, and I think frankly in the next five to ten years, a tax reformer like myself, a flat tax reformer like myself, hopes that most of the rest of this frankly is repealed. We can do a lot better for all categories of Americans if we lower tax rates, simplify the tax code, and really start rewarding everybody, not telling them how to live, how to work, how to this, and how to that. Let's have some more economic freedom. Let's have a less complicated code. Let's relieve the burden of accountants, and let's try to roll back some of the IRS aspects which have become so punitive.

MARGARET WARNER: And briefly, do you agree with Bill Gale that this will complicate the tax codes efficiently to really make it more of a burden on individuals?

WILLIAM GALE: Well, I think Bill's exactly right. I mean, it's so odd to me. We sort of had a tax reform debate during the 1996 election, and yet, we have a 1997 bill that disregards most of the tax reform principles, and I also agree with Bill's other point. Many of the people in all the income categories that you describe are going to have to pay more money for tax compliance and tax accounting. So on a revenue impact sense I'm not sure what their net gain is going to be. It's not going to be very big.

MARGARET WARNER: All right. Bill Gale, this of course came up in the context of the budget--balanced budget deal. Is this tax code- -I mean, this tax cut, if you get an amalgam of the three-- consistent with balancing the budget, and, if so, how far out?

WILLIAM GALE: Well, how far out is the key question. The five year forecast, which they're required to make, it looks like that will be in balance if you believe all the assumptions, and if you're willing to accept all the accounting gimmicks that both sides have put in. In the longer run there's a big difference between the tax plans. The Republican plan is estimated to lose a couple of hundred billion dollars more in the second ten years than the administration plan is. And that's because a lot of the features in the Republican plan like back-loaded IRA's, the capital gains tax cuts, capital gains indexing, are very heavily back- loaded. They're sort of fiscal time bombs in the sense that they don't go off until outside the five-year budget window. So in the long-term I think there's a real problem on both sides. One is on the revenue side if we were to go this route we would under tax revenues; on the spending side, as I mentioned, we have these looming entitlement situations that we need to fix.

MARGARET WARNER: And Larry Kudlow, your view of this in the balanced budget debate.

LAWRENCE KUDLOW: I have a much more optimistic revenue view, I guess, because I believe a lower capital gains tax rate will spur a lot of economic growth and is going to generate a lot of revenues not only through the unlocking effect, where people sell their existing stocks or their existing company shares in order to reinvest, but also because I think we're going to generate a higher rate of capital formation. That's good for the economy, and that's good for creating more jobs. So 10-year estimates, look, I was in that game in OMB. I wouldn't place too much stock in them. I don't think they're really worth the paper they're printed on. But what really bothers me here is principles are being thrown out in the name of targeting, and the government is going to control. Why not- -why not simply tax income once and only once?

MARGARET WARNER: All right. And on that note--

LAWRENCE KUDLOW: And relieve the code of all its complexities--

MARGARET WARNER: All right.

LAWRENCE KUDLOW: --which is a dead weight loss.

MARGARET WARNER: Thank you both very much. We'll leave it there. Thank you.

JIM LEHRER: Still to come on the NewsHour tonight public housing, movie stars then and now, and the Oklahoma City memorial. FOCUS - MOVING UP

JIM LEHRER: Elizabeth Brackett of WTTW-Chicago has the housing story.

ELIZABETH BRACKETT: The wrecking ball slammed into the 16-story high rise in the bright morning sun in Chicago, a building in Robert Taylor Homes, part of the four-mile stretch of the most densely concentrated public housing in the nation was coming down. All around the country the massive, often roach-infested, graffiti- covered buildings are being knocked down, or in some cases blown up, a testament to what many are calling a public housing policy that has failed. Congressman Danny Davis.

REP. DANNY DAVIS, [D] Illinois: It has not been successful, and thank God, we're at a point where people finally realize that it has not been successful, and we're seeing the demolition of buildings like this one and efforts to de-densify areas where people have been too heavily concentrated.

ELIZABETH BRACKETT: Mattie McCoy moved into Robert Taylor Homes when it was built in the early 60's. She says then it was a decent place to live.

MATTIE McCOY, Robert Taylor Resident: It was nice. It was real nice. It wasn't a whole lot of noise out. Kids--me, myself, we had a curfew. You wasn't allowed on the ground after 9 o'clock. You could--if a person was called to the office at least three times, they would let them know that they had to evict or something of that nature.

ELIZABETH BRACKETT: But as federal funds for maintenance and renovation were cut, the buildings deteriorated. Finally, in 1995, the Department of Housing & Urban Renewal took over the troubled Chicago Housing Authority, but McCoy says even that didn't stop the decline.

MATTIE McCOY: There was a lot of neglect on the Housing part. People got to the place they just didn't care about what it looked like or whatever, and it's basically on the neglect side.

ELIZABETH BRACKETT: There has been so much dissatisfaction that legislation just passed by the House repealed the landmark 1937 Depression era housing law. The new Republican-authored bill revamped housing legislation for nearly 6 million poor Americans. The bill opens public housing to tenants with more moderate incomes and requires unemployed tenants to do volunteer work. There are no funds for new units of public housing, except to replace some units that are being demolished. Whenever public housing goes down, residents worry about what will replace it. The proposed law does not require a one-form replacement of units, but it does promote more cooperation between the public and private sector to develop mixed income housing. Chicago has been in the forefront of developing mixed income housing. Two of the flats on this block belong to the Chicago Housing Authority. Yet, they are virtually indistinguishable from private housing. The HUD administrator, Edwin Eisendrath, says developments like these are changing the face of public housing in Chicago and elsewhere.

EDWIN EISENDRATH, HUD Midwest Representative: You know, it'll take a while, but we're offering opportunities for many, many people to move. We've already moved, not just at Robert Taylor, but at CHA over a thousand families this year. We're trying to move towards a day when we can--in partnership with the private sector- -provide housing opportunities in viable neighborhoods throughout the country. The notion of sort of stand alone, separate, as separate as this I think should be a thing of the past, and both the administration bill and the House and the Senate bill all share that.

ELIZABETH BRACKETT: But there is little agreement over what the income mix should be in either scattered site or traditional public housing. Under the House bill more than 65 percent of families in public housing could have incomes up to almost $35,000 a year. HUD says this would knock out the poorest of the poor from public housing. HUD has proposed that almost 90 percent of the families living in public housing should be poor or working poor families with incomes below $13,000 a year.

ERNEST GATES, Community Development Corporation: A scattered site won't be successful until you deal with the human social development side of the people that will ultimately have to inhabit these units.

ELIZABETH BRACKETT: Ernest Gates's Community Development Corporation developed this mixed income scattered site housing on Chicago's tough West side. Gates has the contract to build 70 units altogether--half for the working poor and half for the very poor. All of the second group must come from public housing that is being demolished. And Gates says that can mean problems.

ERNEST GATES: If they bring the old problems into new units, you haven't begun to address the problem. The problem is not the housing; it's the people in the housing, and the conditions that they've been forced to live under for any number of years. If you have enough bad actors involved, then the working class and the decent people will leave.

ELIZABETH BRACKETT: Even though Dalphine Allen-Jasper is thrilled with her unit in the new mixed income development, she is concerned about her downstairs neighbors.

DALPHINE ALLEN-JASPER, Mixed Income Resident: Some of the residents that's comin' into this transition, they're not ready for it. I think they need to be trained in some areas because some of them, the mentality that they have is they can play their music at 1:30 at night; they don't have to respect their neighbors; they're used to throwing garbage in the front yard-- lawn, but it's a habit. And, with anything, it takes time to train them to change those habits and to learn to respect each other.

ELIZABETH BRACKETT: [talking to Gates as they enter unit] This is nice.

ELIZABETH BRACKETT: Gates is so upset about what has happened to several new units he has told the Chicago Housing Authority he will not turn any more units over to them. Gates is accusing the CHA of failing to properly screen tenants or provide funding for tenant training programs.

ERNEST GATES: Well, we've had an instance where a resident has moved into a new unit just like this and in two weeks' time it was completely trashed; the unit had to be practically totally redone. We had a tenant that moved in that drove nails into the new oak cabinets to hang her clothes over the stove, over an open burner to try 'em. So, I mean, there have been enough instances where it's time to kind of back up and take a look at the people that are moving into the units, so that's the basis for our non-compliance, if you will.

ELIZABETH BRACKETT: Eisendrath denies the charge that units have been damaged. He says the CHA does have a screening and training program and says mixed income housing is working well.

EDWIN EISENDRATH: There haven't really been problems with folks living together. There were a couple of instances where people we moved in--have subsequently, we've taken eviction actions.

ELIZABETH BRACKETT: There are public housing residents who don't want any part of mixed income housing, no matter what the mix. These are residents who want to stay right where they are. Cora Moore is president of the tenant council at the Cabrini Green Housing Development. Moore has watched buildings come down at Cabrini Green, but she doesn't want to leave the place she has called home for the past 30 years.

CORA MORE, Cabrini Green Resident: We still want to live here because our kids grown up--three sets of families--you know--and you feel more comfortable. If you move into another area and they find out you're from Cabrini, you're not going to live comfortable there.

ELIZABETH BRACKETT: And Moore doesn't like another controversial proposal in the House Reform Bill--the requirement that all public housing residents perform eight hours of volunteer work every month.

CORA MOORE: Firstly because they in public housing have to have all the stigma on them where they have to volunteer and if they don't, they will be evicted, you know. This is all residents do anyway--volunteer. You know, it should be a job in there.

ELIZABETH BRACKETT: Anger about the housing bill passed in the House and the fear of being moved brought out hundreds of demonstrators in Chicago. Later this summer many here will join thousands of other public housing residents from across the country for a Washington, D.C., protest against the House bill. The Senate will take up its own version of the bill later this year. FOCUS - AGE OF ICONS

JIM LEHRER: Now, an end of an era at the movies. Charles Krause begins the story.

JIMMY STEWART: ["Mr. Smith Goes to Washington" 1939] Get up there with that lady that's up on top of this capitol dome, that lady that stands for liberty. Take a look at this country through her eyes, if you really want to see something, and you won't just see scenery. You'll see the whole parade of what man's carved out for himself after centuries of fighting.

CHARLES KRAUSE: When Jimmy Stewart died yesterday at age 89, he was hailed by man, including the President, as America's national treasure. His death and that of actor Robert Mitchum earlier in the week marked, for some, the end of Hollywood's golden age--a time when some of America's greatest film stars filled the big screen. Those actors worked for the pioneering film studios and often churned out tremendous numbers of films during their careers, including performances that have lived through time. There was Clark Gable and Vivian Leigh in the epic film "Gone with the Wind."

CLARK GABLE: ["Gone with the Wind"] Scarlet, look at me. I love you more than I've ever loved any woman. And I've waited longer for you than I've ever waited for any woman.

VIVIAN LEIGH: Let me alone.

CHARLES KRAUSE: John Wayne in the classic western "True Grit." Humphrey Bogart and Ingrid Bergman in "Casablanca."

HUMPHREY BOGART: ["Casablanca"] Maybe not today, maybe not tomorrow, but soon and for the rest of your life.

INGRID BERGMAN: What about us?

HUMPRHEY BOGART: We'll always have Paris.

CHARLES KRAUSE: And Katherine Hepburn and Jimmy Stewart in "The Philadelphia Story."

KATHERINE HEPBURN: ["The Philadelphia Story"] Upper and lower, at bat. There are only a few exceptions to that rule, and so they don't want to be put on a pedestal. They don't want to seem larger than life. They don't want to treated the way I think we all regarded the people of Jimmy Stewart's era. And now I think people--there's another difference too, you know. People want to be seen as ironic. They don't want to be seen as heroic. It's strange. Even in the animated "Hercules," the new Disney "Hercules" movie, they kind of make fun of the hero "Hercules" while they're building them up at the same time. It's funny. It's sort of subversive, but funny, and it works, but it's a 90's movie. You wouldn't have had that decades ago. They wouldn't have been afraid to have an out and out hero. Today that's not in fashion, and Jimmy Stewart's kind of heroism isn't in fashion in the 90's, just look at the actors, and you'll see.

JIM LEHRER: Ms. Choy, why is heroism no longer in fashion in the movies?

CHRISTINE CHOY, New York University: Well, because the heroism, you have to take a position, whether it is wrong or right, and it defends particular class, for instance, blue collar class, and this is more issues around, so it--commanding the audience to think, to intelligize, and to absorb, to identify the particular characters was today, I think it's not popular is because I think after the 80's the American audiences are pretty much passive, and they want to be told from the screen rather than an interacted word that the character presented on the screen. And I believe, you know, the person--Jimmy Stewart--who had a very, very clear position that he stood for, and was no longer popular. We were on the fast action. We want caricatures, rather than characters. We want fantasies, rather than dreams. And so it's no longer popular.

JIM LEHRER: But, Mr. Bogdanovich, maybe no longer popular in terms of making new movies but the old movies are extremely popular, are they not? They're showing them in theaters all over the country. Of course, they're on television as well.

PETER BOGDANOVICH: Yes, but I think there's a resistance on the younger generation to the older films. I don't even like to say old films. I just like to say classic films because, you know, we don't say old plays by Shakespeare or old novels by Faulkner. I think there's a lack of film culture among the younger generation, and I think it's unfortunate. I think it also shows in the films. A lot of the younger films look as though they're inventing the wheel every time out when, in fact, the wheel has been invented long ago.

JIM LEHRER: Explain what you mean when you say film culture. For those of us who are not--who are lay people, we look at a movie made today versus say some of the "Mr. Smith Goes to Washington." Explain the difference in culture there from a film standpoint.

PETER BOGDANOVICH: What we really mean, Jim, is just that I feel that the younger film makers don't have a sense of the old films. Here I am, using the expression.

JIM LEHRER: Okay. Caught you. [laughing]

PETER BOGDANOVICH: But I mean classic films, they don't--they haven't seen enough of the older films, films made in the 20's, 30's, 40's, 50's. You know, the real foundation of the art was in the silent era, which was where the image was everything. And most of the directors who directed in the 30's, 40's, and 50's had started in the silent era, and so that idea of the image being the main thing continued well into the talking era. That seems to have been lost as the younger generation has taken over, the younger generations have taken over.

JIM LEHRER: Mr. Maltin.

LEONARD MALTIN: Can I just say something.

JIM LEHRER: Sure, you bet.

LEONARD MALTIN: You know, I think what's interesting is that, yes, a lot of younger people--I couldn't agree more with people-- they're not film literate, you might say--and yet, I think they still respond to the values of those old films when they turn up in new movies. The problem is that Hollywood doesn't believe it. I think the movers and shakers out here somehow think that it's old-fashioned, or it's not trendy to espouse certain values. And yet, when they do, people respond. A few years ago the two most popular films in America were the "Lion King" from Disney and "Forrest Gump," which were in many ways very old-fashioned movies, certainly built on very solid, old-fashioned foundations of storytelling and character building. And when that happens, it's always considered a fluke. Why is it a fluke? It's not a fluke at all. It's that Hollywood sells the public short or underestimates the emotional power of their own ability to tell a decent, old- fashioned story and have people respond in the 90's, which they will.

JIM LEHRER: So, in other words, if a studio or if a movie maker decided to create a new Jimmy Stewart, they could do it?

LEONARD MALTIN: Sure. Why not?

JIM LEHRER: Do you agree, Ms. Choy, that could happen today?

CHRISTINE CHOY: Absolutely, with the technology, digital knowledge right now anything is possible, including Forrest Gump. You frame Forrest Gump as this decent individual but traced back through the history, he's meeting with the Martin Luther King, meeting with John F. Kennedy, marching the civil rights movement, et cetera, et cetera, and of course, it was very well presented, with a humorous--on the other hand, you have to look at how history is going to be remembered and recorded. By placing him in that kind of context, rather than serious history, reflecting the reality, put in sort of a satirical, you know, situation, anything is possible, for today, you know, with the digital information, digital--that special effects that we are seeing from the "True Lies," or the "Batman," you know, one hand, yes, technology--we must--we have to upkeep the technology, but on the other hand, what does that mean to human relationships from now on, and more and more not only the presentation and end product on the larger screen has been manipulated--a real position in a historical context but also a great deal in terms of the process of making firms. In the past, you have a director who goes on the set, working with an actor, with a camera person, assistant camera, and lighting, and everybody, you know, having a break in the talk and exchanging ideas, and today, especially in the post production, have altered a great deal with the digital technology. The director comes in, no longer sitting with an editor; he will get video tape and may be watching it, you know, right next to his swimming pool, bungalow, and an editor selects the cut, selected the cut, and then the assistant editor normally works from 8 PM to 8 AM digitizing the images. So assistant and editor again have, you know, separate relationships.

JIM LEHRER: So, Mr. Bogdanovich, would you agree that it's the lack of the personal--the movies are no longer personal creations anymore, they're committee, they're made by machines, whether--like in the old days, sorry, the classic days, directors and stars made these movies and writers?

PETER BOGDANOVICH: Well, I think--I think what Leonard said, first of all, about actors is true. Starting with Brando, who was a very versatile actor, but was--happened to also be--had a star personality, but most of the actors today don't want to be stars; they want to be versatile. So you have a problem. The audience is the loser for that. It's no coincidence that many television series run for a long time with the same--basically the same show every week--that shows that the audience likes to have the same person every week. John Wayne wasn't always the same, but he was John Wayne with variations from picture to picture, as was Jimmy, as was Cary Grant, because they had very strong personalities of their own, which then writers and directors would play on. The same thing with directors. You know, Frank Capra made a certain kind of movie, Alfred Hitchcock, obviously, made a certain kind of movie. Today directors want to be versatile as well, or they haven't got a personality particularly. You know, I once bemoaned the state of the movies some years ago to Orson Welles, and he said, well, what do you want; he said, you know, the Renaissance only lasted 60 years. So maybe we're just in a period of decline, and we've got to face it.

JIM LEHRER: A period of decline and we must face it, Mr. Maltin?

LEONARD MALTIN: Well, I guess it's true. I mean, if you've seen the movies that have come out the past month or two, you'd think we are at the end of civilization as we know it. Every now and then, though, something sneaks through and you say, okay, all is not lost, every now and then. "Sling Blade," a film like that comes along and you say, well, if a film like that can still get made and seen by people from coast to coast, not just in two theaters in New York and LA, all right, there's still hope. Of course, there's still talented and creative people with good ideas, good stories to tell, and yes, there are people who are willing to go out and see them, but I think there are an awful lot of people who sell the public short, who think that if they spend more money on the special effects or if they cram it full of this or that, that that's going to make the difference. Well, the last month of movie going has shown that that's not true, and these films, which have come along "Speed 2" and "Conair," they're so quickly digested and forgotten.

JIM LEHRER: All right.

LEONARD MALTIN: Yes, a lot of people go to see them, and they put a lot of money in that box office that first weekend, but can you remember anything about it a month later, two months later, or three months later?

JIM LEHRER: All right. We'll leave it there. Thank you all three very much. FINALLY - REMEMBERING

JIM LEHRER: Finally tonight, the Oklahoma City memorial. Betty Ann Bowser reports.

BETTY ANN BOWSER: For more than two years, this is how people have remembered the victims of the Oklahoma City bombing. They've placed nearly a million and a half individual memorials on the fence that surrounds where the Alfred P. Murrah Federal Building once stood. Three times that many people have come here to read about a father's life cut short, to observe a child's birthday that will no longer be celebrated, and sometimes people are overcome by what they see.

WOMAN: It's just touching.

BOB JOHNSON: Today, we begin anew moving forward and energized by our commitment of preserving such memory and working for a positive future.

BETTY ANN BOWSER: Bob Johnson and other members of the Oklahoma City Memorial Foundation are pinning their hope for that positive future on construction of a $24 million permanent memorial that was unveiled this week. They want it to remind people what happened in the Murrah Building on April 19, 1995, and to fulfill the Foundation's mission statement: to remember those who were killed, those who survived, and those changed forever. The memorial will cover two square blocks of downtown Oklahoma City. The focal point will be 168 empty stone and glass chairs, which will be placed over the ground where the building once was. At night, each of the chairs, which represents a victim, will be illuminated, and 19 of them will be made smaller than the rest to memorialize the children. The winning German architectural team said that using empty chairs was the most important part of the design process. Two of the three are Americans. Torrey Buntzer was born in Oklahoma. She and her husband, Hans, studied architecture at the University of Texas.

TORREY BUNTZER: The chair was really a symbol that most people can relate to--an empty chair at the dinner table maybe, or when you see an empty chair that maybe someone could be sitting there. And now we have a field of empty chairs, and these people aren't there.

HANS BUNTZER, Architect: On the one hand, it's a very powerful image of loss. On the other hand, given the image that we had these chairs to glow at night, the light, that it would also start to indicate something about the future, about good that does exist in the world.

BETTY ANN BOWSER: Six hundred memorial designs were entered from twenty-three countries in all fifty states. The winner was picked by a committee made up of families of victims, survivors, and architectural professionals. Like many family members, Kathleen Treanor likes the symbolism of the empty chairs. She lost her mother and father-in-law and her four-year-old daughter, Ashley, in the bombing.

KATHLEEN TREANOR: They each are shown by their empty chair that they're no longer with us. Their names will be in light. Every evening they'll be a beacon to others. Their spirit will still cry out from this spot for remembrance.

BETTY ANN BOWSER: The city street where the truck bomb was parked will become a block-long reflecting pool. The designers wanted to make people look in, see themselves, and reflect on how the bombing changed Americans' sense of innocence forever. At each end of the pool there will be a gate, one bearing the time of day 9:01 AM at the other end the time 9:03 AM. The bomb went off at 9:02.

HANS BUNTZER: The gates for me were a tool to frame, to create edges bound to the moment of where the innocence left off at 9:01 and suddenly the blast, 9:02, and the 9:03 is suggestion of gesture towards the future, moving on, how do we--how do we proceed from here, how were our lives affected by what happened here?

BETTY ANN BOWSER: One of the miracles of the bombing is this tree, which survived, even though it was directly in the bomb's path. It has come to be known as the Survivors' Tree and will be incorporated in the memorial. Susan Walton knows well what it means to be a survivor. She narrowly escaped death that morning in the credit union, where she had gone to cash a check. After 22 operations, she is just now beginning to walk, so she is pleased the memorial will remember survivors.

SUSAN WALTON: Memorials are usually for people who have been killed, but this one includes those who were injured and those that were changed forever. And I'm pleased with that because it affected so many people in so many ways here in Oklahoma, not only myself physically but so many people emotionally and mentally as well. And I'm glad that they're remembering us and are giving us a place to go and reflect on what happened.

BETTY ANN BOWSER: Jannie Coverdale lives in an apartment building across the street from the Murrah site. Her two-bedroom home has become a memorial to Aaron and Elijah, the two grandsons she was raising who were killed in the daycare center.

JANNIE COVERDALE: I don't want to remember death. I want to remember life, and when the kids were alive, the rooms weren't empty.

BETTY ANN BOWSER: When families and survivors met to vote on their final selection, Coverdale walked out of the meeting because she was unhappy with the choice. Even though the family meeting voted unanimously to approve it, Coverdale says it doesn't do enough to remember the children.

JANNIE COVERDALE: I don't like it, and I wanted something that was beautiful, something that was living, something that had life to it, and 168 empty chairs represent death. And me, myself, I'm tired of crying. I'm tired of remembering death. I want to remember the children when they were living.

BETTY ANN BOWSER: Phil Thompson, a father of two daughters, is co-chair of the Memorial Foundation. He says Coverdale's comments about the memorial are the only negative ones he's heard. He lost his mother, Virginia, who worked in the federal credit union in the bombing. Thompson says he's proud of the design's selection and thinks it will speak to those who come to see it in many ways.

PHIL THOMPSON: The one thing that I like about the design is it allows the individual to come and feel their own feelings. It doesn't tell you want to feel. It allows you to feel those feelings for yourself. For me, I do look forward to the day that I can sit by the survivor tree and look across that water to those chairs. That will bring me a sense of peace, and it will allow me to have the opportunity to dream again. And I think this city needs that.

BETTY ANN BOWSER: The Memorial Foundation has already begun the task of raising $24 million for construction, which it hopes will be completed by April 19, 1999. RECAP

JIM LEHRER: Again, the major stories of this Thursday, the nation's unemployment rate jumped to 5 percent, sending the stock market to a record high. Lockheed-Martin will buy Northrop-Grumman for $11 billion, and the tobacco industry agreed to pay Mississippi more than $3 billion to reimburse state funds sent to treat ailing smokers. We'll see you online and again here tomorrow evening with Shields & Gigot, among others. Have a nice holiday. I'm Jim Lehrer. Thank you and good night.