The MacNeil/Lehrer NewsHour

Intro

JIM LEHRER: Good evening. Leading the news of this day, the Reagan administration denounced the Soviet filming of Andrei Sakharov. The Nobel Peace Prize was awarded despite protests about one of the winners, and budget-cutting legislation moved another step toward enactment. We'll have the details in a moment. Judy Woodruff is in Washington tonight. Judy?

JUDY WOODRUFF: After the news summary we have these focus segments on the NewsHour tonight. First, a debate over whether the Nobel Peace Prize should have been given to the group that won it; a report on what's behind the growing high school dropout rate in this country; charges and counter-charges about whether the break-up of AT&T has been good for consumers or not; and, finally, a closer look at those little stick'em note pads that are sprouting in offices everywhere. News Summary

LEHRER: President Reagan joined the fray over those films of Andrei Sakharov and Yelena Bonner. His official spokesman, Larry Speakes, today said the films were designed to deflect attention from Soviet mistreatment of the Soviet dissident and his wife.

LARRY SPEAKES, White House spokesman: We deplore the Soviet practice of releasing self-serving film clips of Dr. Sakharov. The films are clearly designed to deflect attention from Soviet mistreatment of Dr. Sakharov. They do not provide credible information about his state of health. We find particularly odious the Soviet practice of filming Dr. Sakharov and his wife, Mrs. Bonner, without their knowledge during medical examinations and consultations in violation of basic medical ethics.

LEHRER: The films were broadcast last night by ABC News, which acquired them from a West German newspaper. In Oslo, Norway, the Nobel Prize was awarded to a Soviet doctor, despite protests he signed an anti-Sakharov letter in 1973. Dr. Yevgeny Chazov, the Soviet deputy minister of health, shared the award with a fellow cardiologist, Dr. Bernard Lown, of Harvard University. We have a report from Peter Vickers of Visnews.

PETER VICKERS, Visnews [voice-over]: Once the two doctors, one a Soviet, the other an American, had received their awards, they lost no time at all in calling on the United States and the Soviet Union for an immediate moratorium on nuclear weapons testing.

Dr. BERNARD LOWN, U.S. Laureate: A moratorium is verifiable; it is free of risk to either party. It's simple in concept yet substantive. It has wide public support, and it's conducive to even more dramatic undertakings and breakthroughs.

VICKERS [voice-over]: But Dr. Chazov was unable to conceal his feelings to the many critics of the organization.

Dr. YEVGENY CHAZOV, Soviet Laureate: The five years of international opposition towards the prevention of nuclear war were not all roses. We had to cope with mistrust, skepticism, indifference and sometimes animosity.

VICKERS [voice-over]: And more animosity was made clear outside, where a number of people protested at the detention of Soviet dissident Andrei Sakharov.

LEHRER: There was good news today about the Soviet journalist who received emergency treatment from Doctors Lown and Chazov for a heart attack suffered yesterday during a news conference. He was taken off the critical list today at an Oslo hospital, and a spokesman said doctors believe he will definitely survive.

And there's one more Soviet item tonight. President Reagan said more trade and commerce between the United States and the Soviet Union was essential. Commerce Secretary Malcolm Baldrige delivered that message for the President at a joint U.S.-Soviet business group meeting in Moscow. Later at a Kremlin banquet in Baldrige's honor, Soviet leader Mikhail Gorbachev also called for increased trade between the two countries, saying the obstacles were political ones laid down by the United States. Baldrige was in Moscow with a group of 400 American businessmen who went for an annual meeting with representatives of 130 Soviet trading organizations. Some of the Americans are weapons manufacturers, but Gorbachev welcomed them by saying their presence in Moscow showed good sense.

WOODRUFF: Early this evening a House-Senate conference committee approved a final version of the Gramm-Rudman deficit reduction bill. The conferees adopted the balanced-budget bill despite concerns voiced by President Reagan this morning that the measure could force deep cuts in military spending. Mr. Reagan endorsed the original version of the proposal to require a balanced budget by 1991, but he and his advisers have since grown worried about its implications for the Pentagon. The measure is expected to clear both houses of Congress tomorrow.

Meanwhile today, Mr. Reagan continued to lobby Republican members of the House to support the tax reform measure as rewritten by House Democrats that's expected to come to a vote later this week. But their reluctance to go along was obvious in an exchange outside the White House today between House Republican Whip Trent Lott and his Democratic counterpart, Tom Foley.

Rep. THOMAS FOLEY, (D) Washington: I'm the Democrat, Mr. Lott is the Republican.

Rep. TRENT LOTT, (R) Mississippi: I'd glad you clarified that.

Rep. FOLEY: I'm supporting the President's position on tax reform. If a majority of Republicans do not support the bill, the bill has a serious problem in passage.

REPORTER: If it doesn't pass, whose fault is it?

Rep. FOLEY: We'll wait and see what the results are, but I would say again, if it doesn't pass with a very strong Republican opposition in the House while a majority of Democrats support it, you have to draw your own conclusions.

Rep. LOTT: Well now, I'd like to make a statement on that if I could, too, because I think I should make the record clear that I am opposed to the tax reform package that was reported by the Ways and Means Committee, the Rostenkowski bill. I think that a good concept has been twisted into a pretzel and then therefore we shouldn't just buy the title, tax reform.

WOODRUFF: The House did take action today on a bill to rescue the $70-billion federal farm credit program. It was by an overwhelming vote. And in Houston a federal judge upheld the largest civil damage award in history, ordering Texaco to pay $10.5 billion to Pennzoil for breaking up its proposed merger with Getty Oil.

LEHRER: A consumer group charged today the breakup of AT&T has not paid off for consumers. A report from the Consumer Federation of America said nearly two years later customers are paying from 35 to 52 percent more for local service, and said the new local phone companies are reaping huge profits from rate increases.

WOODRUFF: The man named by President Reagan to take over the Department of Health and Human Services hasn't taken office yet, but is already proposing a major change in the health care program for the elderly. Otis Bowen, a physician and former governor of Indiana, appeared at his Senate confirmation hearing this morning and said his first priority is to make the Medicare system cover catastrophic illness.

Dr. OTIS BOWEN, Secretary-Designate, Health and Human Services: We can solve the problem of the acute catastrophic care by adding an actuarially sound premium to Part B of Medicare. For about $12 a month annual premium added you could get unlimited number of hospital in-patient days. The reason that this could be done as relatively cheap as it sounds is that the cost of the catastrophic care would be spread clear across the 28 or 30 million people who are enrolled in the Medicare program.

WOODRUFF: Bowen is expected to be confirmed easily, and would succeed Margaret Heckler as HHS secretary.

In other health news, the American Medical Association's House of Delegates voted to go along with the recommendation to urge a ban on the advertising and promotion of cigarettes and smokeless tobacco. The AMA resolution also urged a 21-year-old minimum age for cigarette buying and a ban on vending machine sales.

LEHRER: There were three news items from South Africa today. The government extended its freeze on repaying foreign debts for another three months. A spokesman said it was to allow for more negotiations with creditor banks. The wife of jailed black nationalist leader Nelson Mandela reported he was in very good health but being held in isolation. Winnie Mandela visited her husband today for the first time since he was returned to prison 17 days ago after undergoing prostate gland surgery. And police reported the death of three blacks in violence near Johannesburg; one of the victims was a police constable.

WOODRUFF: Just ahead on the NewsHour, a debate over whether the Nobel Peace Prize went to the right people; a report on the growing school dropout problem; a debate over whether the breakup of AT&T was a good thing or not; and finally, the real story behind Post-it. Peace Prize Furor

LEHRER: We go first tonight to the dispute over the Nobel Peace Prize. It was awarded in Oslo today to an organization called International Physicians for the Prevention of Nuclear War. The dispute is over one of the group's two co-founders who accepted the honor today, a Russiannamed Dr. Yevgeny Chazov. Critics charge he is unfit for the award because in 1973 he signed a letter criticizing Soviet dissident Andrei Sakharov. One of those critics is Edward Lozansky, executive director of the Andrei Sakharov Institute in Washington, founded in 1980 to promote the ideals of Dr. Sakharov. On the other side of the controversy is Dr. Robert J. Lifton, professor of psychiatry at the John Jay College of the City University of New York and a founding member of the anti-nuclear war physicians group.

Mr. Lozansky, did the Nobel committee make a mistake?

EDWARD LOZANSKY: I believe it did. I think that never before award of Nobel Peace Prize created such controversy, and what we saw in Oslo proves this point.

LEHRER: Why was it a mistake?

Mr. LOZANSKY: Well, I think that by name itself, the Nobel Peace Prize, this prize has to go to groups or people who make some contributions to cause of peace. Now, we don't believe that this particular award serves its purpose, and main reason for that is the fundamental question, how we can preserve world peace. And Andrei Sakharov said, and our institute is pursuing this policy, that there's fundamental link between preservation of world peace and human rights. Weapons themselves are not dangerous. People who control the weapons are dangerous. So if Soviet Union doesn't allow their people to participate in political process, if they put in jail or mental institutions people who speak for peace, but independently from the government, then it means that the award of this peace prize to people who actually do that doesn't serve purpose of preservation of world peace.

LEHRER: And it is your position that Dr. Chazov participates in that kind of activity?

Mr. LOZANSKY: Well, I have this letter with me which was written by Dr. Chazov and actually several other members of the same Soviet committee which blasts Dr. Sakharov. And actually Dr. Sakharov was one who advocated immediately to stop testing nuclear weapons. And this guy is now -- because of this he lost his security clearance and sent to exile. And this group even refused to discuss -- I mean, the American group, even refused to discuss Dr. Sakharov's situation during the meeting in Helsinki when Andrei Sakharov was on hunger strike.

LEHRER: Dr. Lifton, what do you say to that?

Dr. ROBERT J. LIFTON: Well, I have enormous sympathy for what he just said. I myself am a strong supporter of Soviet dissidents, and I criticize and have, for instance, publicly opposed the Soviet abuse of my profession, psychiatry, for their incarceration of heretics. But I also strongly support the international physicians group because it is an attempt to avert human extinction. I think that we have to balance the issue of nuclear restraint with the issue of human rights and attend to both of them, but we cannot reject this extraordinary effort on the part of physicians throughout the world to enlighten humanity in general about the dangers of nuclear war.

LEHRER: What about Dr. Chazov, though, specifically?

Dr. LIFTON: Well, I think it's very important that the award has been given, not to Dr. Chazov but to the International Physicians for the Prevention of Nuclear War. I regret, and I think Dr. Chazov was wrong to write that letter, but I don't think that the award in any way should be withheld because of that mistake and that wrong act that he made. Dr. Chazov and the other Soviets have contributed to international peace by their cooperation with us, the American, and the other international physicians on behalf of this effort. We've got to livein a world now in which we have to deal with a Soviet society that does this to heretics, precisely what we're talking about, and at the same time has to be approached in terms of necessary arrangements for international peace.

LEHRER: Mr. Lozansky?

Mr. LOZANSKY: Well, I would say there are enough people in the Soviet Union besides Dr. Chazov who would like, who would be happy to cooperate with American physicians, and they are physicians themselves. For example, there is a group called the Trust Group --

LEHRER: The what group? Trust?

Mr. LOZANSKY: Trust Group, right.

LEHRER: Trust Group.

Mr. LOZANSKY: This is a group which was founded by Soviet physicians, including, who want to talk to Americans, who want to build some trust between our two countries because they believe that the way to preserve peace is to build mutual trust. Now, those people are arrested, they're put in mental institutions, they are prosecuted, they go to jail and never I heard any statement by group of American counterpart in their defense. And this is a little bit surprising. Why in this case this group chose Dr. Chazov and Dr. Vartanyan who actually administers abusive psychiatry, instead of another group, independent group from the government. Dr. Lown and his group is independent. Why they're dealing with Soviet official organization, not independent organization?

Dr. LIFTON: Well, I have enormous regard and sympathy for the Trust Group, and I've had talks with E.P. Thompson who shares these peace movement endeavors in England, who has approached the Trust Group and believes that we must support them. And I agree with that, but we also must deal with those representatives of the actual Soviet government, because it is the government that has the weapons, and the Trust Group, although they deserve our support, cannot have that influence on the government. We have no choice but to deal with this group, and we must do that. I at the same time support all who seek an independent kind of peace movement. I wish the Soviet Union would permit an independent peace movement that were directly parallel to ours in its universalism to exist, but it doesn't. So we have to deal with it as it does exist.

Mr. LOZANSKY: Have you demanded from them -- in your meetings with Soviets have you demanded that they permit activities of this group? Have you demanded?

Dr. LIFTON: Well, I believe from within the American movement that we should make greater requests of this kind.

LEHRER: Has it been done yet? Have you done that?

Dr. LIFTON: No, it hasn't been done officially. But there have been approaches to the Soviet delegation about Sakharov and about other dissidents and the treatment of them, and we've expressed our deep concern for that. I think we should go further in those efforts, but at the same time continue with our peacemaking.

Mr. LOZANSKY: Well, I'm sorry to say, but a year ago when Andrei Sakharov was on hunger strike, Sakharov family traveled to Helsinki, where you and the Soviet physicians met for a conference, and they requested two or three minutes to speak about Andrei Sakharov. They were even refused admittance to the hall, no one would talk with them, and it was simply dismaying that group which met to talk about peace didn't even want to discuss the fate of Nobel Peace laureate who was dying on hunger strike.

Dr. LIFTON: Well, you know, what I would say to that is, as a matter of fact they did receive those delegates and they did talk with them and even examined Dr. Sakharov's electrocardiograms. I must tell you that I myself attended and supported the Sakharov international hearings in December of 1977, held outside of Rome. So I'm not speaking as an opponent to what you represent. I'm saying we have to combine both these issues, and we shouldn't let our passionate concern with human rights, which we must maintain, interfere with our equally passionate concern about maintaining the human race.

LEHRER: Mr. Lozansky, what about Dr. Lifton's point that the award didn't go to Dr. Chazov; the award went to the organization, which includes a lot more people than just him?

Mr. LOZANSKY: Yeah, it's true, but on the other hand, you know, you always look at the leaders and what the group are doing. I have, for example, in front of me a fundraising piece of American group, and the only thing I see it's blasting American administration. They blast Reagan, Weinberger, Eugene Rostow, and there's a great line, "Because the Reagan administration is now committed to the biggest arms buildup in our history, we, Physicians for Social Responsibility, are compelled to issue this warning." So only because of Reagan. Not because of SS-20, because of Soviet Union. Only because of Reagan. This sounds a little bit strange.

Dr. LIFTON: No, that's really unfair, and I don't think --

Mr. LOZANSKY: Well, this is statement. This is --

Dr. LIFTON: No, I know, but there are many statements we've made, and the statements again and again say we're against arms buildup from any direction. We are universalistic in position. We oppose any kind of arms buildup, and we especially oppose the arms buildup between the two superpowers. That is our position. It has been right along. It will continue to be.

Mr. LOZANSKY: Yes, but what you do by maintaining and giving some credibility to Dr. Chazov, I don't think you help your cause, because only when Soviet people -- and you agree with me -- only when Soviet people like Dr. Brodsky or people, Dr. Khramov, who founded the Trust Group, or Dr. Sakharov, will have opportunity to speak free, then we could talk about trust, about stopping arms race, about nuclear disarmament. Your legitimization of Dr. Chazov doesn't help this cause.

Dr. LIFTON: Well, see, I feel differently. I understand how you put it and how you feel, but I think it's wrong to ignore the acute necessity of dealing with the Soviets on various levels, very importantly on the level of physicians and of physicians who are close to the regime, because it's in the service of world peace. Even President Reagan has made clear he's got to deal with the Soviets on various levels. He may disapprove of many things they do, but he doesn't cut off relations with them. We feel we have to continue, and this movement, when you look at its broad nature, is a beautiful movement. It has inspired idealistic feelings all over the world in terms of nuclear weapons, and the movement itself has been universalistic about the nuclear danger.

Mr. LOZANSKY: Well, when Reagan talks to Gorbachev he talks as president to leader of the Soviet Union. You represent independent group and you should deal with independent people in the Soviet Union. Dr. Chazov's a member of the Central Committee; he is also a member of the fourth directorate of the Kremlin Clinic, which he's in charge of giving so-called "equal health" to Soviet members of Politburo and Central Committee. He doesn't represent Soviet people at all.

LEHRER: There was also a suggestion today by the British Foreign Office that Dr. Chazov has provable links to the KGB.

Mr. LOZANSKY: No doubt about this because to be director of the fourth directorate of the Kremlin Clinic you have to be linked with KGB. There's no doubt about that.

Dr. LIFTON: Well, I have no idea about any links that Chazov may have to the KGB, but I would again assert that we've got to deal with Soviet physicians who indeed represent the regime, and I myself also support the Trust Group. And we have to have a certain set of tactics and arrangements in which we express our moral concerns and our political and tactical arrangements that can help the peace process. And although I sympathize with much that you say, you leave out the all-important dimension of Soviet-American interaction. And we also have to recognize that the societies are different. We have the advantage in our American wing of the international doctors movement, Physicians for Social Responsibility, of being completely free agents, and we speak out universalistically. That isn't the case with this Soviet group.

LEHRER: He's right about that, isn't he, Mr. Lozansky?

Mr. LOZANSKY: Yes, he's right, but I never hear any statements in support of Dr. Sakharov --

Dr. LIFTON: Well, you're hearing it from me right now.

Mr. LOZANSKY: Well, it's great. I wish that more people like you --

Dr. LIFTON: But what I want to hear from you then is a recognition of the need for this continuing contact on behalf of peace, and then we'll understand each other.

Mr. LOZANSKY: I agree if contacts are made with people who actually speak for Soviet people. Dr. Chazov or Dr. Vartanyan don't speak for Soviet people. They speak for party and KGB.

LEHRER: All right. Mr. Lozansky in Washington, Dr. Lifton here, thank you very much. Judy?

WOODRUFF: Still to come on the NewsHour, a report on the rising number of high school dropouts in the U.S.; a debate over whether consumers were helped or hurt by the breakup of AT&T; and, finally, a look at those little stick'em notes that are sweeping offices across the country. Dealing with Dropouts

WOODRUFF: Across the nation the school dropout rate is increasing. Today 27% of our youth fail to graduate from high school. That adds up to close to one million dropouts a year. The figures are even more grim among hispanics, blacks and poor whites, and in large urban areas. The New York City schools, for example, admit to a 40% dropout rate, and critics say it's actually much higher. The terms dropping out and quitting school suggest that it's the young man or woman's decision, that they are at fault. But that's not necessarily the case, as we see in this report from correspondent John Merrow on the dropout problem in New York City.

CYRUS DUBOSE, dropout: I wasn't recognized, really. You had to -- you gotta do really good to be recognized.

JOHN MERROW [voice-over]: What happened to Cyrus Dubose is not unusual. It's easy to go unrecognized in an urban high school of 3,000 students, and sometimes it doesn't make any difference whether you're there or not. Cyrus has been to school only once this year.

[interviewing] I talked to the attendance guy, and he didn't know who you were. Does that surprise you?

Mr. DUBOSE: Umhum. It does surprise me. They should know who I am.

MERROW [voice-over]: Cyrus Dubose is typical of the thousands of students who drop out of high school because they don't get the help they need when they need it. Cyrus is an average student, above grade level in reading but poor in math. He was held back once in junior high school, then he went to Park West, a large high school with a reputation for violence.

Mr. DUBOSE: I didn't hardly know anyone, and it was a much bigger -- a lot of people was there, you know? It's just that I messed up by being with the wrong people and, you know, not doing what I'm supposed to do.

MERROW [voice-over]: Cyrus didn't do much homework. He did cut some classes and clown around in others. Nobody paid much attention, and Cyrus failed again in June. Now nearly 18, he still hasn't completed ninth grade. So he just stopped going to school and is looking for a job.

JOYCE L. DUKES, Manhattan Valley Youth Program: We have vocational counseling, educational counseling, workshops --

Mr. DUBOSE: Workshops.

Ms. DUKES: Workshops. You know what that is?

Mr. DUBOSE: Well, really I was looking for a job.

Ms. DUKES: Okay. You know what this is? Vocational counseling?

Mr. DUBOSE: Vocational -- no, not really.

Ms. DUKES: Okay. That's concerning jobs.

MERROW [voice-over]: Cyrus is getting the help he needs from the Manhattan Valley Youth Program, a community organization that's part of New York City's new dropout prevention program. He wants to get his GED, the high school equivalency diploma, so he can get a job. So far he's been able to find only short-term, low-paying, part-time work.

[interviewing] Do they say, are you a high school graduate?

Mr. DUBOSE: Yeah, most of the time, but, you know, I have to tell them, you know, not. No, I'm not a high school graduate.

MERROW: And then what?

Mr. DUBOSE: Then, you know, they cannot -- they can't use me.

ANNOUNCER, school pep rally: Ladies and gentlemen, Patrick Ewing.

MERROW [voice-over]: A high school diploma does make a difference in the job market. That's the message the school system is trying to get across, with the help of basketball star Patrick Ewing.

PATRICK EWING, basketball player: Winning at life begins with staying in school.

MERROW [voice-over]: This year New York City is spending $30 million on an ambitious dropout prevention program. This school, Brandeis High in Manhattan, received $814,000 to hire more counselors and social workers. Several corporations have donated dictionaries, calculators and notebooks, and on the first day of school all students were given tee shirts. Directing the citywide effort is Dr. Victor Herbert.

Dr. VICTOR HERBERT, New York City dropout prevention program: We have reached the point that I believe every other youngster entering high school is likely to drop out unless we do something dramatic, effective and efficient.

MERROW: At the risk of sounding skeptical, your campaign of giving kids tee shirts, a free dictionary and then a visit by basketball star Patrick Ewing, that seems cosmetic.

Dr. HERBERT: When you have a hemorrhage you put on a bandaid and then you get the medical team in and you begin stitching and you begin tying up. You do everything, not just something. And if rewards and incentive are a part of the package, do that. But don't only do that. Do it all.

PHONE MESSAGE: Hello, this is Mr. Smith from the Brandeis High School attendance office with a recorded message we would like you to answer. Your child was absent from school today.

MERROW [voice-over]: This computerized telephoning system is one way the schools are trying to keep students from falling through the cracks.

PARENT, in recorded response: My child wasn't supposed to be absent today, and I have to check with him when he comes home.

MERROW [voice-over]: Careful cross-checking of records is also the order of the day. The system hopes to discover that many students now listed as dropouts actually moved or enrolled in school elsewhere or got a GED. Those changes may lead to greater efficiency, butthey don't address the most common student complaint -- teacher indifference.

1st STUDENT: We were actually just a number, a nine-digit number, or four-digit number to them. They didn't care whether we learned or not. That's the attitude they gave at Fashion, at least.

2nd STUDENT: One of my science classes, my teacher used to write on the board all period, write, write, write, and we used to copy everything down in the notebook. He never used to explain nothing.

3rd STUDENT: I needed a school to go to where I was going to be noticed because if I don't be noticed I'm the scared type, and I just won't get nothing out of it.

MERROW: Of course, maybe it's impossible. I mean, that a school with 3,000-4,000 students --

4th STUDENT: I don't think it's impossible, but it seems like to me they take it and just try to simplify everything. Like, say, for instance, I had a sandwich. Teachers take a slice of cheese, throw it on there, slice of baloney, throw on there, give me the bread and say, "Eat." Nobody don't want to eat like that. You know, you want to see the sandwich with lettuce, tomato. You know, You want something delicious, not just slapping the meat up in your face and say, "Well, eat this." You know, that's how they're taking education.

MERROW [voice-over]: These students left the high schools they're describing, but they were lucky. They found an alternative high school, one of the few in New York City. It's called Schomberg Satellite Academy, and it's set up to be as unlike an urban high school as possible. Only 200 students, no passes, and everyone on a first-name basis.

1st STUDENT: Our school has really put some interest in our learning. I'm not trying to sell our school as a dream, but to me it's like a dream because you get here and everybody is so nice and friendly. Then the teachers, they're always there to help you if you need them, you know.

TEACHER: The history, Mike, of the word is the same.

MERROW [voice-over]: Schools like Satellite cost more, about $500 more per pupil per year, and there are only 5,250 places in alternative schools in a system with 280,000 high school students.

Dr. HERBERT: Alternative education is a wonderful second base for young people, but I haven't given up on the first base. There's got to be a way to deliver education in the traditional school better. One of the big problems we have is that teachers don't feel they're a part of the school. But it's important to note that I'm not only talking about teachers and counselors, I'm talking very much about community people, family assistance, social workers, for a number of reasons, who need to be involved in the lives of young people.

MERROW [voice-over]: Outside help is needed in the schools because young people do not check their personal and social problems at the door. Among female students, for example, pregnancy and motherhood are the biggest reasons for dropping out. Most schools do not provide day care programs like this one, yet some form of child care is desperately needed because most young girls do not grasp the long-term implications of having a baby.

LAURINDA CRUZ, young mother: Half the girls out here have babies because their friends have one or because their boyfriend says they have to have the baby, and then after they have the baby they leave, or something like that, and then she can't deal with it no more. So eventually she's just going to drop out of school because no one's there to help her.

MERROW [voice-over]: Providing help is not an easy thing to do. Laurinda Cruz dropped out of schoolfor awhile, and she had help, a grandmother at home to watch her son while she went to Brandeis High. Still Laurinda found it difficult to concentrate.

Ms. CRUZ: Like school wants you to come and your baby needs you here, and your first priority is your child. So it's like you really have a choice to make, either to go to school or to take care of your child, but if you don't go to school there's not much you can do for your child as they get older.

DOMINIQUE STEINBERG, Teen Choice counselor: This doctor doesn't have Saturday hours, huh?

Ms. CRUZ: Umum. This is Harlem Hospital clinic. They're not open on the weekend.

Ms. STEINBERG: That's one of the really big problems, isn't it, for you?

MERROW [voice-over]: Dominique Steinberg, a counselor in the Teen Choice program at Brandeis is helping Laurinda cope with the conflicting demands of being a student and a single parent. With another child on the way, Laurinda knows that getting a regular diploma will be difficult.

Ms. CRUZ: Sometimes I feel like taking my GED, but it's not worth it because I need the education. I don't want to walk around looking like a fool all my life. I mean, I don't want to live in an old raggedy building or something, living off of welfare. I want to have a job so when my kids get older I show them that I did for them and not welfare.

MERROW [voice-over]: Laurinda may be unusual in her determination to stay in school, but complex problems like hers are not, for the majority of young people in large urban high schools.

STAN FEINGOLD, counselor, Brandeis High School: You know, a very large percentage of our kids haven't got a chance in hell of being a part of what we call the American dream. And I think, or called, the American obligation. And is to bring them from that place over there.

MERROW [voice-over]: To try to do that, Brandeis and other high schools have created what they call mini-schools, separate units inside each high school that pay personal attention to students who've stopped going to school.

Mr. FEINGOLD: You can be here. It's tough in the beginning but it's pay off.

MERROW [voice-over]: Stan Feingold, director of Brandeis' mini-school, believes that low self-esteem is a large part of the problem.

Mr. FEINGOLD: Many have reached a point now, they're 15, 16, 17 years old; they cannot do work of their grade, 9th, 10th, 11th grades. It's very frustrating. The frustration leads to anger, the anger to the hostility that can take place in class. They're dealing with disciplinarians. And their choice is that or stay out. And right now staying out may sound good.

TEACHER: I'm going to ask you a question to show you how we use language. "Where do you live?" Penny?

PENNY: I was going to say my address.

TEACHER: You're going to say your address. Where do you live, Wayne?

WAYNE: Manhattan.

TEACHER: Nicole, where do you live?

NICOLE: 116th and Lenox.

TEACHER: What is she giving? She could have said New York City, she could have said the United States, she could have said North America. The question you are asked and the answer you give depends on a lot of other things.

MERROW [voice-over]: The mini-school's small classes are designed to make learning a satisfying experience so that when the students go back to regular classes they'll be able to succeed. Each mini-school is a small effort in the face of a large problem, not the least of which is persuading young people that getting a high school diploma is worth the effort.

Dr. HERBERT: We know that the possibilities for recognition at the end of the hard job, meaning that the diploma leads to something, is not guaranteed. And so you say to a young person, "Sit through geometry, chemistry and physics and biology, even though you don't know why. Do it." And he says, "But I have a cousin who graduated from high school, maybe even college, and he doesn't have a job. Why should I do it? What's working against me? There must be 50 things working against me."

MERROW: Isn't it possible that maybe we're asking the school to do too much?

Dr. HERBERT: Yeah, it really is possible, but the alternative is that there may be no other place.

MERROW [voice-over]: New York City's dropout prevention program will not be successful overnight, but consider the alternative. We all pay for school dropouts, in higher crime rates and increased welfare and unemployment costs. Victor Herbert believes that schools should not only do more for students, they should also expect more from them.

Dr. HERBERT: I think that in some ways we undersell the resourcefulness. You know, I believe you take any one of the kids you've been talking to in the last few days and put him in Paris with no advance notice and no information, and he will know that subway system in five minutes. You don't do those kind of things without having your resources. I'm saying that frequently the resources are channeled in the wrong direction, and that they've got to learn that school, as difficult as it is, and needing all the changes that school needs, is still something they've got to do, that it's worth it in the long run.

MERROW [voice-over]: These young people know that education is worth it in the long run. They left their original high schools but later found this alternative. They resent being labeled dropouts.

KENNY CARTER, student: A teenager, he has a roaming curiosity. He wants to absorb as much of his surroundings as he can. You know, just help him in the right direction once in awhile. When you see him straying, put him on the right track. Don't push him off. Don't call him a dropout. Don't say, "You are a dropout. You're scum in this society. You ain't nothin'. You're a dumb Puerto Rican." I'm not a dumb Puerto Rican. I just made the wrong -- I just took the wrong side of the road for a small time. But I had the sense to come back on the right track.

MERROW: So if I say, Kenny Carter, dropout, what do you say to me?

KENNY CARTER: I'm not a dropout. I'm probably smarter than you. AT&T: Assessing the Breakup

WOODRUFF: It was almost two years ago that the breakup of AT&T revolutionized the telephone industry in this country. The giant corporation was forced to spin off seven smaller regional companies which became responsible for local phone service. In return, AT&T was permitted to keep its profitable long-distance business and branch out into new areas like computers and telecommunications. Today the Consumer Federation of America issued a report calling the breakup a financial disaster for consumers. Here to explain the report is its author, Gene Kimmelman, legislative director for the federation. Many of his criticisms are directed at the regional operating companies, which have asked for, and often received, local rate increases. Here to respond is Jan Stoney, an executive vice president with Northwest Bell, a subsidiary of U.S. West, which is one of the regional companies.

Mr. Kimmelman, let me begin with you. What do you mean, it's been a financial disaster?

GENE KIMMELMAN: Well, we surveyed the nation to see what has happened with local rates since the breakup, and what we found is that the average consumer pays almost $4 a month more for basic phone service today than he did at the time of the breakup. That's a 35 increase in basic phone service at a time when inflation has been very, very modest.

WOODRUFF: You say that's an average. What's the range?

Mr. KIMMELMAN: Oh, the range is anywhere from $7 and some cents in Colorado for basic phone service to over $22 on average in the state of West Virginia -- a big range and an important investment for people who do not have a lot of resources.

WOODRUFF: But at the same time, now, haven't long-distance rates come down and helped consumers?

Mr. KIMMELMAN: Well, we surveyed that as well, and we've found that on average they've come down about 10% since the breakup. So for the average consumer, unless he's making about $40 of long distance calls a month, he's losing money since the breakup.

WOODRUFF: But I know it's been said that if consumers shop around for the best long-distance deal they can get they can come up with some savings that are going to more than off-set --

Mr. KIMMELMAN: There's no question about it. There are definitely ways of saving money, but the big problem is a tremendous shift in costs from new services, fancy services, long distance, into local rates, which is going to cause an increasing burden on middle-income households and has already caused a terrible burden on low-income, fixed-income and elderly.

WOODRUFF: And what are you saying this is doing? I mean, what does that mean for people?

Mr. KIMMELMAN: Well, we're destroying a tremendous system. We've got a potential to bring competition to everyone in this country, make the benefits of competition available to everyone. That's not what's happening. We've got regulatory mismanagement that is skewing the balance. Big business is coming out ahead. The average consumer is coming out behind.

WOODRUFF: All right, Miss Stoney, that's quite a platter full. He says that it's costing consumers a lot more.

JAN STONEY: Well, it's true, there have been some increases in local rates in the last couple of years. However, that's a continuation of what really started in the '70s. I think it's important to put this in perspective. While it's dramatic and interesting to talk about percentage increases in the range of 35 or 40 percent, we're really talking about, on average, somewhere between two and four dollars. In the U.S. West telephone operating companies, for example, it averages $2.29 over the last two years per month per line per customer.

WOODRUFF: And so your point is that it's not that -- it's an increase but it's not that much?

Ms. STONEY: Well, certainly we're concerned about any increase in telephone service. Obviously our objective is to keep our costs down as low as we can. I think one of the things we sometimes tend to forget is we are very interested in the maximum number of customers connected to our network. After all, the more customers we have connected to our network, the more valuable that service is to everyone. So it simply is not in our best business interests to do anything that would do anything that would discourage customer connections from the network. But obviously there has been a complicated breakup of a massive system, there is a huge shift in costs taking place, and there are going to be some discontinuities in terms of how those prices and how those costs are shifted.

WOODRUFF: And you don't deny that local rates have gone up more than long distance rates have come down?

Ms. STONEY: Well, it depends on where you are as an individual and whether or not there are benefits to you, depending on where you are in the scheme of things. For example, local service has gone up, and some of the rates that Mr. Kimmelman comments on are accurate; that's true. Long distance rates have decreased and, at the same time, I think one of the areas that's maybe been ignored in the discussion thus far is the choices customers face. They have more choices in terms of local service options. They have more choices in terms of long distance carriers -- and, by the way, there's been a lot of price competition among those carriers. And then in the equipment arena they can also purchase their sets today where lease was only an option before.

WOODRUFF: So you're saying, even if it does cost them a little more money they've got a greater choice and therefore greater benefit? That's part of the point that you're making?

Ms. STONEY: Yes, it is.

WOODRUFF: All right, Mr. Kimmelman, what about that? It's true, people can pick and choose more now than they could before.

Mr. KIMMELMAN: That's true, they can pick and choose, but the problem is we find the local phone companies are putting profit and expansion ahead of keeping people on the network. There are a lot of choices for a lot of different commodities, telephones, long distance, but when you pick local phone service you've got one local phone company and you either can pay or you've got to give up service. And we're finding that's where the pinch comes in. And local phone companies keep asking for more and more; they're trying to modernize their equipment, they're trying to provide fancy new services -- not for the average consumer, but for the big business customer. We don't want the average consumer to have to pay for all that development in the network through their basic telephone rates.

WOODRUFF: Is that what you're doing? Are you taking money away from the consumers and spending it on your big business customers?

Ms. STONEY: Well, what we're doing is, we think that to have a profitable telephone company is a benefit to all of the customers. The modernization equipment and the proliferation of new products and services and the revenues that will be developed from those will serve to the benefit of all the customers. I suspect --

WOODRUFF: Even if it costs them more in the short run? Is that what you're saying?

Ms. STONEY: Well, when we talk about costing more, I'm not sure that we agree in total for all customers that the costs are more. I guess maybe I'd liken this -- we've been -- we're literally less than two years past divestiture. I'm not sure that it's really accurate for us to determine what all of the benefits in the future will be as a result of this.

WOODRUFF: Is it too early to make a judgment, Mr. Kimmelman?

Mr. KIMMELMAN: Well, it's certainly early to make the long-term judgment, but in the meantime a lot of people are suffering. And it's like reducing the price on accessories on cars -- the radios, the chrome -- while increasing the basic sticker price. You've got to be able to afford the car to get the accessories. In telephones you have to be able to afford local assistance, local service, in order to get all the other goodies. And we're finding greater difficulty among a large segment of the population in just affording basic phone service.

WOODRUFF: He says people are suffering.

Ms. STONEY: I think we need to talk about what is actually happening. In our territory we have -- well, let me say in Northwestern Bell we have about 6,000 contact employees --

WOODRUFF: What area do you cover?

Ms. STONEY: Northwestern Bell is Minnesota, Iowa, the two Dakotas and Nebraska.

WOODRUFF: Okay.

Ms. STONEY: We have about 6,000 contact employees who have approximately three million contacts with our customers per year. We listen to what those customers tell us. We also survey those customers in the U.S. West telephone companies every month. We've done special surveys of customers who have disconnected their service, and, frankly, we find no evidence that telephone rates are a significant consideration in customers disconnecting telephone service. So to date we frankly don't see any evidence that the allegation that this is a major factor and it is hindering customer connection to the network.

WOODRUFF: How do you explain that?

Mr. KIMMELMAN: They don't find evidence because they don't look, and the regulators don't find evidence because they don't look. The census data shows that less than 80% of households below the poverty line have a telephone, while 96% of everyone else does. That sounds like a problem to me. As you keep increasing the local charges it just gets worse and worse. It's nice when the phone company does surveys, but it doesn't appear to me that they're really listening that carefully, because the U.S. West companies have been spending more time trying to get deregulated in their states than they have been in taking care of their basic local customers.

WOODRUFF: Why is that a concern?

Mr. KIMMELMAN: It's a great concern because there are tremendous profits to be made in the gadgetry business, in the computer business, but who's going to provide basic, plain old telephone service? We're fearful that the costs are going to rise dramatically, and the phone company doesn't really want to be in that business anymore.

WOODRUFF: Miss Stoney?

Ms. STONEY: I think that simply isn't true. You know, the telecommunications business and the Bell system was founded by women and men in this industry who have a great tradition of service, and anyone who has traveled outside this country knows what a great asset we have built up in this country. That pride and that service still exists with those same people who are still working in that industry. There is simply no motivation for us to want to discourage people from connecting to the network.

WOODRUFF: How do you explain his survey then, the findings of his report and his survey?

Ms. STONEY: Well, first of all, the survey results that he's reporting, I really haven't had a chance to assess those, but one question we might want to talk about is whether or not that's changed over some period of time. The other part --

WOODRUFF: Whether what's changed?

Ms. STONEY: Whether or not the percent of households in terms of the allegations of those are in need of assistance versus those that are not has changed over some period of time. Perhaps that has always been with us.

WOODRUFF: You're saying his information may -- what they found may have always been there?

Ms. STONEY: It may have always been there. But in addition to that let me say this. I think one of the things that Mr. Kimmelman and I will probably be very much together on is we believe in the concept of universal service. We believe that every American who wants a telephone should be able to have one, and we are very much committed to working with the local people in the local arenas to determine where those problems are, where they need attention, how the funds can be developed, and we're commited to making that happen.

WOODRUFF: Let me ask you, Mr. Kimmelman, about something that happened today. The FCC came out with a ruling that leaves the so-called Lifeline program, which is help for low-income customers, in the hands of the states rather than mandating a federal program. How does that fit into all this?

Mr. KIMMELMAN: Well, it's a terrible blow, because we believe it signals the end of a commitment to affordable phone service for everyone. The basic law that governs this area was passed 50 years ago, and it intends to provide affordable service for everyone. We've seen a consistent increase in the number of households with a phone in this country since the 1930s. That has now leveled off. We see important rate increases that are affecting people's livelihoods, and they can no longer increase the number of households on the network. That's a terrible trend, and unfortunately the Federal Communications Commission will not respond to that. They say "leave it to the states, we're not worried."

WOODRUFF: What do you make of the FCC decision?

Ms. STONEY: Well, let me respond first to the trend. I think there's probably a saturation point. I'm not sure that I would agree that 100% of the households in the United States really want telephone service. I think the facts are we really don't know that. So perhaps we've reached a saturation point. But I think the fact here is we may not know why that leveling off has occurred.

WOODRUFF: Let me stop you right there. You heard what she said. Not everybody may want a telephone.

Mr. KIMMELMAN: That's absolutely true, but it's incredible to think that we're at a saturation point. We've got less than 92% of households in this country with a telephone. We've got more households with a television. We had almost 93% of households with a telephone in 1980. We've got 80% of people below the poverty line. The difference between 80 when you don't have much money, and 96 when you've got the money shows that income is a big factor.

WOODRUFF: You get a last word, but it's got to be quick.

Ms. STONEY: Let's assume that that's correct. What I said earlier prevails. We are very committed to assuring that every American who wants a telephone can have one. We agree with the FCC order, and we are more than willing to work with the local jurisidictions to find the means and the funding and identify the problems and deal with those.

WOODRUFF: Well, Miss Stoney, Mr. Kimmelman, thank you both for being with us. We'll have you back for round two of this. Thank you.

Ms. STONEY: Thank you.

WOODRUFF: Now we bring you tonight's Lurie cartoon. The subject is the visit of Andrei Sakharov's wife to the United States.

[Lurie cartoon -- Yelena Bonner wanders out of prison with a chain around one ankle; the guard says, "See, Comrade Bonner? We do let people out from time to time."]

Recapping tonight's news, the Reagan administration denounced Soviet filming of Andrei Sakharov. Despite protests, the Nobel Peace Prize went to a group that included a Soviet critic of Dr. Sakharov. And two late-breaking stories. A House-Senate conference committee approved the Gramm-Rudman deficit reduction bill. Congress is expected to send it to the President tomorrow. And a federal judge in Houston upheld the largest civil damage award in history, ordering Texaco to pay $10.5 billion to Pennzoil for breaking up its proposed merger with Getty Oil. Jim?

LEHRER: In our " nally tonight" category comes now a story from Minneapolis about the creation of those little yellow things called Post-it Notes. The reporter is Fred de Sam Lazaro of public station KTCA-Minneapolis-St. Paul. Stick To It

FRED de SAM LAZARO, KTCA [voice-over]: They didn't even exist five years ago, yet Post-its, as these littleyellow pads are called, are fast catching up with coffee as the biggest addiction for office workers. They're the kind of thing 3M officials say you never knew you missed until they came along. Today they're in practically every office, right alongside the scotch tape, stapler and paper clips. Fifteen years ago, 3M scientist Spencer Silver was working to develop a super-strength glue. One of his early experiments resulted in an adhesive that hardly adhered at all. Silver peddled his unglue to others in the company, but no one had a use for it, not, at least, until four years later when fellow scientist Art Fry had what you might call a divine inspiration while singing in the choir one Sunday at North Presbyterian Church in St. Paul.

ART FRY, 3M scientist: I used to mark the pages in my hymnal with pieces of paper, and often they would fall out and I'd get up to sing and couldn't find my place. And so I thought, what I really need is a bookmark with Spence's adhesive on it that would actually stick to the very spot, not fall out, and yet be removable and not damage the page.

LAZARO [voice-over]: An idea like Fry's would normally have stayed in the choir loft, but at 3M there's a policy called bootlegging. It allows employees to spend up to 15% of their time tinkering with their own innovations, no matter how outlandish or how unlikely they are to succeed. Together with Silver, Fry bootlegged for six years, trying various concoctions to improve the adhesive and the paper. Fry then took the idea to his superiors, seeking the company's support.

Mr. FRY: A large project like this requires a lot of people to work on it, people that are sold on working hard on it. And if you don't have management support you can be severely wounded.

LAZARO [voice-over]: What he wanted was support. What he got instead was little more than a severely wounded ego. 3M may encourage innovation, but that doesn't mean middle management buys every idea. Fry's managers told him to stop pestering them with the Post-it's project. But Fry persisted because, he says, he could see the beauty of his idea.

Mr. FRY: They are like your own kids, you know? You think they're beautiful but somebody else looks at them and they say, actually they're grubby little kids, you know, and sometimes our ideas are like that, too.

LAZARO [voice-over]: Despite resistance from middle management, Fry kept bootlegging. Upper management says it's a major part of 3M's philosophy. Board chairman Lewis Lehr.

LEWIS LEHR, 3M Chairman: We have to provide a climate that says if you fail you're still good. In other words, the opportunity to fail. And I think most of all we have to provide a clear challenge to the people to be innovative.

LAZARO [voice-over]: To further challenge employees, 3M has a goal that a quarter of the company's annual sales come from new products. Similar goals are set by other companies, like Texas Instruments, General Mills and IBM. 3M has had its fair share of innovations that have gone nowhere over the years, but the company has somehow managed to turn around enough of these failures to more than pay for the rest. A good example is the foray into women's underwear. 3M spokesman Don Larson.

DON LARSON, spokesman: 3M was considering many years ago of getting into the lingerie business in that they were designing in our research laboratories cups that could be used as inserts in brassieres. The process didn't quite work out; however, the technology of those cups was taken by those research people and given a little twist and today they are the same kinds of things that you see on the face masks of surgeons.

LAZARO [voice-over]: Art Fry felt that any company that could turn a bra into a face mask ought to give Post-it a try. 3M nally agreed to a test market. It didn't take long for Post-its to be accepted alongside other 3M predecessors on American desks. So 3M took the corporate plunge, and in 1980 Post-its were finally introduced into the marketplace. Since then the Post-it line has expanded to include tape, bulletin boards and even custom printed pads. But the original yellow pad remains the favorite. Why yellow? Fry says market research showed it was the best color. It's neither masculine nor feminine, it shows up well on a white sheet of paper, and it's cheerful. It's proved to be a profitable choice. Americans spent a reported $100 million to scribble not-so-cheap messages on Post-it's last year alone; that's twice as much as they did the year before. But Chairman Lehr says Post-it's have brought in much more than profits to 3M.

Mr. LEHR: Well, in a nearly $8-billion company, Post-it notes are not that significant in total sales and profits. I think what Post-it notes have done is reinforce in this company the idea that failures can turn into successes.

LAZARO [voice-over]: And Lehr speculates that since the idea for Post-its began in church, 3M maybe had a little help with this one.

Mr. LEHR: Though we talk about innovation coming from the laboratory, you can see in this case we had a little divine guidance, which was very helpful.

LEHRER: Good night, Judy.

WOODRUFF: Good night, Jim. That's our NewsHour for tonight. We'll be back tomorrow night. I'm Judy Woodruff. Thank you and good night.