The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. In the news today, Iran stopped two Soviet merchant ships in the Persian Gulf and detained one. South Africa imposed new, tough restrictions on press coverage. The death toll in the California air crash may rise to 91. We'll have the details of these stores in our news summary coming up. Jim?

JIM LEHRER: After the news summary, FAA head Donald Engen responds to air safety questions raised by the California midair collision. John Merrow's education series continues with a report on adult illiteracy. We look at Iran's seizure of a Soviet freighter. And Elizabeth Brackett reports on the financial crisis facing the government of Texas.News Summary

MacNEIL: In the Persuan Gulf, Iran stopped two Soviet merchant ships yesterday, firing warning shots at one and taking it into custody. The Soviet foreign ministry confirmed today that a Soviet freighter had been detained. Shipping sources said Iranian gunboats intercepted the Pyotor Yemtsov northwest of Dubai and forced it into port, where its cargo was unloaded. The other ship, the Tutov, was stopped and inspected, but allowed to continue. Iran has intercepted many ships in the gulf to prevent military supplies reaching Iraq, its enemy in a prolonged war. Yesterday's intercepts were the first incidents involving ships of the Soviet Union, which has good relations with Iraq and is reported to be its chief arms supplier. The Kremlin has recently been trying to improve relations with Iran and has offered to help negotiate a settlement in the war. Jim?

LEHRER: The Soviets added a new wrinkle to the detention of American reporter Nicholas Daniloff. Daniloff's wife Ruth said in Moscow today that a smuggling case may be prepared against the Daniloffs. She said a Soviet official notified Daniloff's office of the possibility, saying some family jewelry had been found among his property that had not been properly listed on customs declarations. In Washington, State Department spokesman Charles Redman commented on the new change.

CHARLES REDMAN, State Department: I see that Mrs. Daniloff has said, "It's all just so stupd." We couldn't agree more.

Questioner: It is your view that there should be in East-West relations at this point, business as usual while this journalist is being detained?

Mr. REDMAN: This is not business as usual. This is an outrage. It certainly could affect our relationship. There are some meetings going ahead as scheduled; yes, that's true. But I come back by saying the bottom line is that we're going to do all we can to insure his release. But I'm not going to speculate on the possible consequences of his continued detention nor as to what options we might have.

LEHRER: The Baltimore Sun reported today the United States was working on a semi-swap plan to secure Daniloff's freedom. Daniloff would be permanently released to the U.S. ambassador in Moscow while a Soviet employee of the United Nations facing spy charges in New York would be turned over temporarily to the Soviet ambassador to the United Nations until a trial is held. The Associated Press reported late today unnamed U.S. officials had confiemd the offer, but there was no indication the Soviets have bought or will buy the deal.

MacNEIL: In Los Angeles, officials are now saying the death toll may be as high as 91 in the collision between a Mexican airliner and a light plane. The revised figures indicate that as many as 24 people might have been killed on the ground, instead of 18. Sixty-seven were killed aboard the two planes, and today National Transportation Safety Board investigators said the air control tower at Los Angeles Airport was receiving radar signals from the transponders on six or seven light planes, and another plane was in the area but not sending out radar signals from a transponder.

IRA FURMAN, National Transportation Safety Board: It was indicated there were six targets, in addition to the Aeromexico and the pop up target which was assigned a different transponder frequency. So there were at least six other aircraft, and there was another target that does not appear on the radar track, which therefore leads us to presume it's what is called a primary target -- that is, one without a transponder.

LEHRER: John Lewis and Julian Bond said today their bitter campaign for a Georgia Congressional nomination has not destroyed their friendship. Both appeared on morning network TV programs to say time will heal the wounds. The two longtime veterans of the civil rights movement opposed each other for a Democratic nomination. Lewis, the underdog, won with 52% of the vote.

In other key Congressional nomination races yesterday; in Florida, Republican senator Paula Hawkins was nominated, as was outgoing Governor Bob Graham, to be her Democratic opponent in November. In Nevada, the fall line up for the seat of retiring Senator Paul Laxalt will be Republican Jim Santini against Democrat Harry Reid. Both won primary races yesterday.

MacNEIL: The South African government today tightened restrictions on press coverage of scenes of unrest or action by security forces. The curbs were withdrawn last week because of a legal technicality, but reimposed today with added new restrictions.

In the black township of Soweto, near Johannesburg, some blacks said they would defy a police ban on a mass funeral tomorrow. Twenty-one people were killed in clashes with security forces last week, and opposition members of parliament said they feared fresh violence.

In Washington, the Reverend Jesse Jackson, just back from a tour of neighboring black nations, called for a radical change in U.S. policy.

Rev. JESSE JACKSON: South Africa's more than a state. It is an empire -- an evil empire. South Africa is an octopus with legs in all front line states, an evil empire. Our approach to the apartheid system must be regional. We need a new USA Africa policy. We need to divorce the destructive engagement with South Africa, from a constructive engagement with the front line states, end apartheid, and assume our rightful place as leader of the free world.

MacNEIL: France denied that it is coordinating policy on hostages held in Lebanon with the United States. Yesterday the Islamic Jihad, which holds both French and American captives, claimed that a plan to release French hostages had been blocked on orders from Washington. The French foreign ministry said today France was acting independently in trying to obtain their release.

LEHRER: American Motors joined the cut rate interest parade today. It reduced its rate to zero, announcing it would finance car loans for 24 months interest free if the customer puts down a 20% down payment. Ford chairman Donald Peterson was asked in Washington for his reaction.

DONALD PETERSON, chairman, Ford Motor Company: Two year financing in what's being referred -- discussed here. And the monthly payments for the great majority of the people in this country, if they're paying off an automobile in two years, are so high that you really won't find many people opting for that type of financing. It comes so close to being a cash purchase. So there's an awful lot of ype in it.

LEHRER: General Motors started the cut rate war last week with a 2.9% interest rate. Chrysler and Ford followed with rates equal or lower.

MacNEIL: And finally, a medical story. Scientists in California say they've developed a vaccine that's successfully protected laboratory monkeys from AIDS disease. Researchers at the University of California Primate Research Center at Davis said it looked as though AIDS was a disease that could be controlled by a vaccine. They cautioned that it would probably be two to four years before their research could produce a vaccine that could be used in humans.

That's our news summary. Coming up, Federal Aviation Administration chief, Donald Engen; education and illiteracy; the Iran-Iraq war and the Soviets; and Texas grapples with a deficit. FAA: Slow on Safety?

LEHRER: A newsmaker interview with Donald Engen is our first order of business tonight. Mr. Engen is the administrator of the Federal Aviation Administration -- the government agency responsible for making air traffic work and work safely. The FAA has been the subject of increasing criticism since the weekend collision in California between a Mexican airliner and a private plane that killed 91 people. The specific charges include failure to spend money already available for improving safety. We heard them here last night from Congressman Dan Glickman and John Baker, president of the Private Aircraft Owners and Pilots Association.

JOHN BAKER, Aircraft Owners and Pilots Association: The system is safe; it's terribly inefficient. And the reason it's terrible inefficient, the industry -- both the air carrier and general aviation -- in 1982 accepted a tax program putting money into a specialized trust fund for the specific purpose of modernizing the air traffic system so it can accommodate to the increasing demand across the country and the increasing sophistication of both air carrier and general aviation. Into that trust fund we have now pumped billions of dollars from the users -- the airline ticket tax on the airline passenger, the fuel tax on general aviation. Those monies, unfortunately, are being played politics with by the Office of Management and Budget. They're impounding it to make it appear as though the federal deficit is somewhat less than in fact it actually is. We're sitting with an$8 billion surplus right now, even though we have billions of dollars of un-met needs in terms of modernization of the air traffic system, airport improvements and the parallel efforts that are necessary.

Rep. DAN GLICKMAN (D) Kansas: Five years ago today, I held a hearing in Van Nuys Airport in Southern California -- one of the most busy airports in the country -- on the issue of collision avoidance systems. And this followed a crash in San Diego of a PSA 727 that was a midair collision. At that time, the FAA promised us in those hearings that they would move ahead forthwith and expeditiously on a system of developing collision avoidance systems in the skies, where airplanes would have warning devices available to them in order to avoid midair collisions. This would be in addition to ground control from the current air traffic control system. Because of a failure to spend the money in the airport trust fund and because of this great love affair with gadgetry where everybody wants more and more sophisticated technological wizardry, nothing has been done. Five years ago today the FAA promised we'll move ahead with collision avoidance systems. To date nothing has been done.

LEHRER: What is a collision avoidance system? What does it look like and how does it work? Well, the answers from correspondent June Cross.

JUNE CROSS [voice-over]: For four years, the FAA has been developing a system to warn pilots on a collision course. It's called the Traffic Alert and Collision Avoidance System -- TCAS. It's located in the cockpit. The idea: to back up air traffic control. Using weather radar, TCAS tracks the radio signals of nearby aircraft. In this simulation, the airliner is the chevron in the middle. The asteriks indicate planes within a two mile radius. Right now the coast is clear. But another plane 200 feet below is approaching. And amber light warns that plane is too close for comfort. When the light turns red, the pilot needs to take action. TCAS charts the approaching plane's course and an escape route for the threatened plane. It tells the pilot whether to climb or descend and how fast. But there's a problem. TCAS will not track sudden course changes. It can't tell a pilot to turn to avoid collision. One major problem: the system is designed for airliners. Unless small planes carry special equipment, jetliners can't see them on their radar. The Piper plane that collided with Aeromexico flight 498 last week had such equipment, but the pilot had the switch turned off. That's a problem for which there is no technological solution.

LEHRER: Now to Donald Engen, head of the Federal Aviation Administration, who is with us for a newsmaker interview.

DONALD ENGEN, Federal Aviation Administration: Good evening.

LEHRER: Good evening, Mr. Engen. Congressman Glickman said here last night, as we saw, that five years ago your agency promised him that this collision avoidance system would be developed, and he said five years later nothing has happened.

Mr. ENGEN: I think that's an oversimplification. If I could, Jim, let me say that we have certificated TCAS I and II. There are three models of TCAS: I, II and III. Last April we certificated TCAS I and II. This fall, Piedmont Aviation will have TCAS II in place and will be flying it. There are fourteen sets of TCAS II to be produced over this next year. United Airlines, Northwest Airlines and Piedmont will share in the flying of those TCAS boxes.

LEHRER: Why did it take five years to get -- because the system apparently -- the technology was available five years ago. Why did it take so long to get these few in place?

Mr. ENGEN: That's a very complex system, and when we're dealing with human lives, we've got to be sure that that system will perform as it's supposed to. ALPHA --

LEHRER: The Airlines Pilots Association.

Mr. ENGEN: Airlines Pilots Association, and the airlines have been cooperating with the FAA while we have tested the TCAS system. It's working well. We have an up and down TCAS now. One year from today --

LEHRER: An up and down? What's an up and down?

Mr. ENGEN: Well, TCAS II tells the pilot to pull up or push over to avoid another airplane that has a mode C transponder in it.

LEHRER: So if -- using the diagram we just saw in June Cross' report, that in addition to the red light, the pilot would be told, "Turn right, turn left, go up, go down"?

Mr. ENGEN: There would -- on TCAS II he would be told to pull up or push over.

LEHRER: Push over? What's push over?

Mr. ENGEN: To decrease your altitude, to go below the approaching aircraft. The computer decides what is the fatest way to avoid and advise the pilot.

LEHRER: And that computer is in this thing we're calling TCAS, right? That's in the cockpit.

Mr. ENGEN: It is.

LEHRER: And all the pilot has to do is just react.

Mr. ENGEN: All the pilot has to do is react. And one year from today, I plan to have TCAS III certificated. And hopefully we will be --

LEHRER: Now what -- what's TCAS III do?

Mr. ENGEN: TCAS III will give us the capability of turning right or left, pulling up or pushing over to avoid. So you have movement about all the taxes, and you can control to a much greater degree their separation.

LEHRER: How long will it take -- well, wait a minute. Why not go ahead and put TCAS I and TCAS IIs in while you're waiting for TCAS III?

Mr. ENGEN: We are. We are doing that. And, as I said, Piedmont Aviation will have a TCAS II in operation this fall. And United Airlines, Northwest Airlines and Piedmont will have 14 sets over this next year. We are moving ahead. I just -- I don't want people to think that we're not making movement on this. I'm dedicated to be sure that we get those TCASs out there and let people use them.

LEHRER: How long will it be -- the bottom line question is, how long will it be until every airliner has one of those in their cockpits?

Mr. ENGEN: Well, that's hard to say, because we have upwards of some 3,000 airlines, and it really is airline dependent on how quickly they put them in. But I would anticipate that TCAS could be --

LEHRER: Three thousand airliners.

Mr. ENGEN: Three thousand airliners. Thank you very much. But I would anticipate that TCAS III-- II and II could be pretty well established by the end of this decade.

LEHRER: End of this decade. That's four or five -- another four or five years. So ten years from the time Congressman Glickman got that assurance from FAA.

Mr. ENGEN: But we can't do something that's impossible. You must be -- when you're dealing with people's lives, you must be sure that what's -- the signal you're sending is a correct signal. We want to be sure. We want to be safe. And that's the safety of the system that we've been working on.

LEHRER: Do you agree with -- Henry Duffy is the president of ALPH, the airline pilots union, who was also on here last night, who said if that -- that instrument, the TCAS had been in the cockpit of that Aeromexico plane, it would not -- there would have been no collision.

Mr. ENGEN: I can't agree, because I happen to know that you require a mode C encoding altimeter -- we're going to get very technical now -- in addition to a transponder in order for TCAS to work.

LEHRER: Meaning what?

Mr. ENGEN: Meaning that I don't believe that light airplane had that transponder -- had that mode C encoding altimeter. It did have a transponder.

LEHRER: So if the airliner had had even a TCAS III, unless the smaller plane had the thing you just described, it still wouldn't have avoided the -- still wouldn't have avoided the collision.

Mr. ENGEN: That's correct. The next step is for people to install mode C encoding altimeters or, as I believe Mr. Baker said last night, Mode S.

LEHRER: Mode S. Okay. Now, that brings me to that. He said, and everybody agrees, that for this to work, these have to be in the small planes as well. Is it the FAA's position that all airliners and all small -- all airliners should have TCAS and that all small planes, all general aviation aircraft, should have the mode S?

Mr. ENGEN: Our goal is that we will have the TCAS system in and operating.And I want to do everything I can to help prevent midair collisions. And so we're going to push to get TCAS installed. We must first make a rule which will require those who fly in the system to have either a mode S or a mode C encoding altimeter. That must be another rule which will be made, and we will be moving in that direction.

LEHRER: When? When will you do that?

Mr. ENGEN: Well, it takes a law and it takes -- I would like to say that it really depends upon Congress and our ability to move this through and pass a rule. I'm going to go out on a limb and say that this could be done in 18 months or 24 months.

LEHRER: Would you also not agree that without the second part, the first part is useless, as you just said?

Mr. ENGEN: Well, many people have mode C encoding altimeters right now. And let me assure you that the airlines do, indeed. And the upper end of business aviation -- of general aviation have mode C encoding altimeters right now. So there is a great segment of the airline industry and the aircraft industry that would currently meet the requirements. So we can lose it -- use it at higher altitudes.

LEHRER: They told us here last night, Mr. Engen, that the TCAS system would cost about $45,000 each in each plane. That's the current technology. Mr. Duffy made the point that, my goodness, if you start making a lot of them, you maybe could reduce the cost. Mr. Baker said the mode S would cost $2,500 for one in each -- each. Is the federal government prepared to help the airlines and general aviation pay for this?

Mr. ENGEN: No, I think this has to be borne by the industry itself. It's not the function of federal government to put equipment in airplanes. We put equipment on the ground to provide safe navigation for all people who use the system. This would be borne by the users, and it would be up to the individual airlines and the individual pilots to install it in their aircraft.

LEHRER: It's the -- it is the job of the FAA to develop the technology, and you say that's what you are doing.

Mr. ENGEN: It is.

LEHRER: And it can not be speeded -- as a result of what happened over the weekend in California, you didn't turn to somebody and say, "Hey, let's get this thing done quicker than we had planned. We'vegot to get going, or --"

Mr. ENGEN: Let me assure you that last November, I took a look at the development of TCAS, and I said to my people, "We must move forward immediately. And I would like TCAS I and II certificated by 1 April of 1986." They missed it by 17 days. And they did it on 17 April. We're moving as rapidly as technology will allow. And I want to assure the American public that we want to be sure that TCAS is available for people to use out there.

LEHRER: Let's move to the other major area that you got rapped about last night, and that was Mr. Baker's contention -- and it was confirmed by some others too. We didn't run the piece of tape when they said this, but they all agreed that there's roughly $8 billion in this trust fund that is supposed to be spent to improve airline safety or air safety in this country, and that for political reasons the Reagan administration is not spending it.

Mr. ENGEN: Well, that's not really a true statement. Let me just say that there's a lot of myth about the trust fund.For instance, it's a fact that over the last three years, we've expended $3 billion from that trust fund for equipment to improve the system. Over the last three years, we have extended -- expended an additional $3 billion for aiport improvement throughout the United States. It is true that there are $8 billion in the trust fund today. Let me draw a parallel. That trust fund is like a very large checking account. It is a fact that there are $5 billion worth of checks written against that trust fund today. So there is a surplus of$3 billion in the trust fund, and that is a fact. But we have over 80 projects of our national aerospace system plan under contract right now. This is the upgraded system to improve the navigation, the traffic separation. That's being paid from the trust fund. My goal is to use that trust fund.

LEHRER: And you're saying it just can't be spent any quicker? There aren't things to buy? There aren't improvements that need to be made?

Mr. ENGEN: No, I think there are always improvements to be made. And I want to assure the users whose monies are in that trust fund, because they deserve an answer, that we are honor bound to use that. Those$3 billion will be used over the next several years as we buy additional equipments.

LEHRER: In simple, simple language, Mr. Engen, do you deny Mr. Baker's charge that the money is being -- what he said, what he said specifically was, and we saw it on the tape, was that it was being withheld to make the federal deficit look smaller.

Mr. ENGEN: Well, I think that's a matter of opinion, and I think you could draw that conclusion in years past. It's certainly not a goal of the -- of mine. My goal is to use that to improve the system and to expend that trust fund for what it's designed for -- to bring safety in the system.

LEHRER: Mr. Engen, the nonprofessional -- nonflying professionals -- have trouble understanding how there could be an air control system that has such huge gaps in it that could allow to happen what happened over that Los Angeles airport area last weekend. Do you think there's something beyond the air -- the collision avoidance system, but something's wrong in your system that needs to be corrected?

Mr. ENGEN: You're always trying to improve the system that you have. And if you will excuse me, I won't talk about the tragic accident that occurred this last weekend.

LEHRER: Because it's under -- it's still under investigation.

Mr. ENGEN: The safety board is inspecting that. And because I was a member of the safety board, I understand how they work. And I'm looking for them to come up with a probable cause so I can get to work and make sure that that never happens again. But let me tell you that in mid-'60s we became aware that at terminal areas, we had a proliferation of numbers of small aircraft and airliners. At the end of the decade of the '60s and in 1970 we put into place TCAs -- terminal control areas. This is -- these are the most finitely controlled air space that we have in the system to date. There are 23 TCAs throughout the United States. In addition to those, there are some 60 airport radar service advisory areas that we use to separate traffic, so that we can provide positive identification and separation. Aviation is built on trust. Each pilot must fly where he or she is authorized to fly. When you get into flying into unauthorized areas, which occurs from time to time in our system, then the FAA must step in and take certificate action against the individuals.

LEHRER: And you're doing that?

Mr. ENGEN: And we do. For instance, in Kansas City over this last year, we -- there were ten cases in the Kansas City TCA where pilots inadvertently or with intent flew into the TCA. We took their licenses away from between 15 and 30 days in each case.

LEHRER: All right. Mr. Engen, thank you very much.

Mr. ENGEN: Yes, sir.

MacNEIL: Still ahead of the News Hour, John Merrow reports on illitercy in America. We discuss the latest turn in the Iraq-Iran war. And Elizabeth Brackett looks at the struggle of Texas politicians to beat their deficit. Will We Learn? -- A-B-C for Grownups

MacNEIL: Next, it's part three in our week long series on education. Tonight, we focus on a national problem that is beyond the reach of most schools: adult illiteracy. There are an estimated 27 million functionally illiterate adults who can not read even simply instructions. In addition, there are an estimated 47 million marginally illiterate Americans who can not read very well. This month a coalition of major media organizations, including PBS, ABC, newspapers and magazines, begin a campaign to flight illiteracy. Tonight our education correspondent, John Merrow, reports on three individuals who are themselves struggling to learn to read.

Gradmother [reading]: The two little chipmunks looked mighty sad as they watched the acorn float away, but Dale soon brightened. "Look," he cried. Chip looked. On the little island out in the middle of the lake stood a great big oak tree weighted down with acorns of every size.

JOHN MERROW [voice-over]: It's a familiar scene -- reading to the children. But in this family gramdma does the reading. The boy's mother, Pamela Hudson, is barely literate.

PAMELA HUDSON: It's, you know, a little embarrassing when you're reading him story out of a story book and you have to say, "Well, I don't know that world." And skip that word and go to the next one, you know. So, then, therefore, the story really don't make much sense if you have to skip, you know, several words on each page. You know, you feel kind of stupid, you know, at your age, you know. Little kids, you know, they think, "Well, Mom and Dads, they're supposed to be able to, you know, read the story perfect." I'm a high school graduate, but I was in a special grade. And, you know, because I was in a special grade, they just kind o just, even though you don't know how to read well, just to get you out of school, they just kind of move you along each year. You know, pass you each year, even though you don't know how to read as well as you should.

MERROW [voice-over]: Pamela Hudson is one of millions of non-reading adult Ameicans. They're usually school dropouts, though some, like Pam herself, were pushed along and actually graduated. Most -- 53% -- are women. Most were born into poverty and are poor today. But numbers don't tell us how illiterate and semiliterate adults cope. And numbers can't tell us what it's like to go through life without being able to read. Pam is a single parent living on welfare in Cedar Falls, Iowa. For her, illiteracy is a prison: no job, little self-confidence. She used to work in a restaurant, but even that job required reading.

Ms. HUDSON: Well, I mean, like, you know, say the waitresses told you to, you know, go down and get something. You have to, you know, read the cans off. And then you come back up and you say, "Well, I can't, you know, read the cans, so I don't know which one to pick." An they've got to go down and, you know just kind of say, "Well, don't you know how to read?" You know, and make you feel stupid.

MERROW [voice-over]: At age 25, Pam is going to try to learn to read. She's enrolling in a program for adults in nearby Waterloo which provides one on one tutoring for 25 adults. It's the biggest program in an area which probably has between 7,000 and 10,000 non-readers.That discrepancy between what's needed and what's available is typical.

Counselor: Do you have any idea what level you're reading at?

Ms. HUDSON: Well, I'd say probably about third.

MERROW [voice-over]: Pam tried once before, but dropped out in frustration. Learning to read is hard work.

CRAIG PAYNE [reading]: Craig Payne is 21 and works as a janitor at a Washington D.C. high school. He used to be a non-reader. In fact, he got all the way to tenth grade without learning how to read. What he did learn was how to cope. Like many non-readers, Craig figures out ways to hide his illiteracy and get by.

Mr. PAYNE: When I went to a restaurant, I went with somebody that I knew could read the menu. I'd look at the menu. I'd say, "Yeah, I might want this, you know?" And then they'd look at it, and they'd say, "Yeah. Oh, you like, you know, chicken salad?" I'd say, "Yeah. Yeah, that sounds goods." And then I'd get it.

MERROW [voice-over]: In school Craig played the cown or sat quietly in the back of the class -- anything to avoid being exposed. But one day a teacher said she would fail him unless he read aloud.

Mr. PAYNE: I was, like, shaking all over, because there were a lot of people. I tried to cover myself up by playing sports and by playing -- doing a little bit of everything else. Tried to keep away from reading. Then, you know, I knew I had to have help.

MERROW: What happened that day when the teacher asked you?

Mr. PAYNE: Well, I got up and I walked out of class, you know.

MERROW [voice-over]: Craig knew he needed help. He found it not in school, but here at this privately funded tutoring program. His teacher was Mike Fox, director of the program.

MIKE FOX: He didn't know why he wanted to learn how to read, except that he did. He wanted to be like other people. He knew he could do it. So they found us. Craig dropped out of the football team, dropped out of high school, and went to a vocational school for a year so that he could be near our program and come four days a week after school.

MERROW [voice-over]: After a year, Craig returned to his old high school and later graduated. He stayed in Fox's program for four years. Most adults who enter reading programs drop out after only six months. He now reads at an eight grade level and, just as important, believes in himself.

Mr. PAYNE: I feel great about myself, because I accomplished a whole lot. And you got to know how to read. To read is the biggest thing in the world that you got to know how to do.

MERROW [voice-over]: Conventional wisdom tells us that non-readers can't even get 'cross town, because they can't read street signs or figure out bus routes. Roger Gage is a non-reader. He has trouble with street signs. Yet, he drove from his home in Waterloo, Iowa, to California and back by himself. That kind of independence, however, is rare. At some time or another all non-readers have to rely on others. For Roger, it's his wife, Becky.

ROGER GAGE: And she always makes out most of the tickets. So all I have to do is get the map out and find the correct spelling. I mean, I can find the street if she spells it right. And I can find the streets and addresses and -- and whenever I get a call and I'm out, I just ask them to spell it.

MERROW [voice-over]: Hawkeye Sewer and Drain is Roger Gage's own company. He started it two years ago, after he and 700 others were laid off by the local John Deere plant. At the time, Roger was making $31,000 a year. He could have been making even more if he'd known how to read.

Mr. GAGE: I think I could have made supervision or close to it if I could have read, because I liked the plant, I liked the company, I liked my supervision and my foreman I had.

BECKY GAGE: He was approached to be a foreman about, what, two or three times? And he just couldn't do it.

Mr. GAGE: It's just too much. You know, I just couldn't take care of all the --

Ms. GAGE: Paperwork.

Mr. GAGE: Paperwork part of it.

MERROW [voice-over]: Roger doesn't hide the fact he can't read, nor does he advertise it.

Mr. GAGE: A lot of our friends --

Ms. GAGE: Don't believe it.

Mr. GAGE: A lot of them that's known me for a few years, you know, and past acquaintances just say they just found out I couldn't read. Their first reaction is, "I don't believe it. You're kidding." Because I'd sit around and play Trivial Pursuit and answer the questions. Course, I'd never read the card, but you had six people sitting there, and everybody wants to read the card, you know. And I just didn't say nothing, so no one ever asked. And I'd answer the questions and stuff. And then when you'd tell them, they don't believe it. "Well, how do you know the answer to that?" Well, you don't have to read to be smart.

MERROW [voice-over]: Roger didn't learn to read, because he had dyslexia, a disorder which caused him to see words and letters reversed. The frustration and anger which resulted led him to quit school in the ninth grade.

Mr. GAGE: I walked out of school and said, "I don't need you. I'll have everything these teachers' got and more. I don't care if I've got to work 24 hours a day; I'll have it just to prove basically to myself that I can do it."

MERerrow [voice-over]: After spending most of his adult life denying that illiteracy is a serious problem, Roger finally admitted that he needed help. Last year he enrolled in a reading program.

Mr. GAGE: I don't think it was so hard to walk in and say that as it was for me to tell myself, "You need help," after 33 years of saying to myself, "I don't need them. I don't need school."

MERROW [voice-over]: Roger Gage, Craig Payne and Pamela Hudson are among a small group -- perhaps 2 to 4% of non-readers currently enrolled in literacy programs. Nationwide, there aren't enough programs to meet the need. But enrolling is only a first step. Staying in and actually learning to read are far more difficult. Craig has learned to read. How well Pam and Roger do may also affect their children. Illiteracy is often cyclical. Non-reading parents often produce children who can't read.

[on camera] Do you want Jamie and Jackie to be readers?

Mr. GAGE: Oh, most definitely.

MERROW: Why?

Mr. GAGE: If you were crippled, would you want your kids to be crippled, or would you want them to be able to walk? You always want things better for your kids than what you had. I want him to be able to read, and he knows that.

LEHRER: We first broadcast that report a year ago. Since then, Craig Payne went on to a full time job in the Washington public schools.Roger Gage's business is doing well, but he is no longer in school. Pamela Hudson remains unemployed and on welfare, but it still being tutored. Out week of education stories continues tomorrow with a John Merrow report on education bureaucracies. Iran: Confrontation in the Gulf

MacNEIL: Our next focus, the latest twist on the naval war in the Persian Gulf. The Iran-Iraq war is entering its seventh year, and on the ground it has been a bloody stalemate with as many as 400,000 killed. Iraq has controlled the air war with bombing raids in Iran. At sea, the Iranians have tried to prevent the shipment of war supplies to Iraq and say they intercept as many as 20 cargo ships each day. But yesterday was the first time the Iranians had moved against Soviet shipping, intercepting one freighter and seizing a second off the coast of Dubai and ordering it to an Iranian port. Here to discuss the ramifications of this latest development are Adeed Dawisha, a professor of political science at George Mason University and author of the book The Arab Radical, and Alvin Rubinstein, a professor at the University of Pennsylvania who's writing about Soviet policy in the third world. He joins us from public station WHYY in Philadelphia.

Professor Rubinstein, is the interception of these Soviet ships important?

ALVIN RUBINSTEIN, University of Pennsylvania: Neither the Soviet Union nor -- or Iran has any interest in a confrontation. It seems to me that this is an incident and not a confrontation. Both the Soviet Union and Iran have been trying to improve relations during the past year, and indeed, the Iranians have indicated a willingness to sell natural gas once again to the Soviets, for the first time since 1979. I think that the Soviets have probably been arming Iraq for at least four or five years overland through Jordan and by air, and this may be one of the first times that Soviet ships thought it easy to move into the gulf.

MacNEIL: But the Soviets say that ship that's been seized and its cargo removed was carrying cement. So we don't know yet what it was actually carrying.

Mr. RUBINSTEIN: I find it a little difficult to believe that the Iranians would deliberately hold a ship of the Soviet Union if it were just carrying cement. It could easily be that the Soviets will insist that there were nonmilitary material destined for, perhaps, Kuwait and not for Iraq. But I think that this will be resolved quickly and peacefully by both the Soviet Union and Iran.

MacNEIL: Dr. Dawisha, do you see it that way -- resolved quickly and peacefully?

Dr. ADEED DAWISHA, George Mason University: Yes, I think so. I agree with Professor Rubinstein that neither party really has an interest in prolonging this affair. The Iranians don't want to create a problem with the Russians, particularly now that they're trying to sell them gas. And the Russians, after years of alienation from the Iranians, have recently begun certain moves that suggest that they are trying to improve relations with the Islamic Republic.

MacNEIL: What is the Soviet interest in the war now? I mean, does the Soviet Union want Iraq to win and Iran to lose, or what is their interest?

Dr. DAWISHA: The Soviet Union, for the last six years of the war, has primarily been in a quandary. In the first two years of the war between 1980 and 1982, they held supplies from the Iraqi side, which led to a deterioration in the relations between Iraq and Moscow. The idea was then that the Islamic Republic might at some later date create a situation where the communist party -- the Tudeh party in Iran -- would, if not take power, at least participate in the political process. When this did not happen, certainly by about mid-1982, early 1983, the Soviet Union shifted its allegiance or relations more positively to the Iraqi side. And since then they have been one of the major suppliers to the Iraqis. And without any doubt, something like 80% of Iraqi armory now comes from the Soviet Union.

MacNEIL: But more recently still, as you've both indicated, they've begun to get friendly to Iran again.

Dr. DAWISHA: Yes, absolutely.

MacNEIL: So what do they want in the war, do you think?

Dr. DAWISHA: It's very difficult to know what they want. What I think they want first and foremost is a situation where the United States can not take advantage of the war. That's their first and major objection -- that they don't want to create the kind of conditions which would allow the United States to enter the gulf. Therefore, it is not in their interest to see Iran score a military victory of the kind that will then invite American forces -- the rapid deployment force or whatever -- into the gulf in order to aid countries like Saudi Arabia and Kuwait.

MacNEIL: I see. Professor Rubinstein, given that you both agree that they probably would like to settle it quickly, you don't expect the Soviets to, even if there are arms in that ship and they're discovered and everything else, to take any kind of retaliatory action against Iran.

Mr. RUBINSTEIN: No. I assume that the Iranians will behave correctly and that the Soviets will accept whatever accommodation is reached. The aims, it seems to me, of the Soviet Union are twofold. I agree with Professor Dawisha that the Soviet Union does not want to see Iran win or Iraq defeat it. And in this sense, bot the Soviet Union and the United States share that common objective.

MacNEIL: You mean they both want a stalemate? Both countries want a stalemate?

Mr. RUBINSTEIN: No, they don't want a victory by Iran. The war has been an embarrassment for the Soviet Union. And, indeed, the Soviet Union has been the main loser of the two superpowers. In 1979, when the Shah was overthrown, the Soviet Union looked forward to good relations with an anti-American Iran. And at that time, it still had very good relations with Iraq, with whom it has a friendship treaty. When the war started -- when Iraq invaded in September of 1980 -- the Soviet Union, and I suppose the United States, expected a quick victory. Because Iran was in disarray, in internal turmoil. But what's happened over the past six years, first of all the Khomeini revolution has become institutionalized, and the leftists have been defeated. And the institutionalization of the Islamic Republic has led to a hostility toward the Soviet Union for a variety of issues, including the Soviet invasion of Afghanistan and interference in Iran.

MacNEIL: Let me ask --

Mr. RUBINSTEIN: And Iraq, I just may say, restored diplomatic relations with the United States as part of its overtures toward the West.

MacNEIL: Okay. You've both said that neither the United States nor the Soviet Union wants Iran to win. Dr. Dawisha, can Iran win? Typically in these fall seasons, there've been huge, new Iranian campaigns. Is there another one on the books, and are they in a position to win now?

Dr. DAWISHA: Well, the conventional wisdom that emerges from the last six months, where the Iraqis have suffered two major setbacks in the war, is that the possibility, at least, of the Iranians winning the war is that much greater now. I must admit I do not subscribe to this conventional wisdom. I think it depends on what you mean by winning. If you mean that the Iranians are going to continue to score these military successes in a variety of battles and probably at the end of which they would be able to gain a few kilometers of land here and there, then that's probably -- that probably will happen. If you're talking about winning in the context that the Iranians themselves define winning -- and that is a major military defeat and the so-called final offensive, which will bring -- which will lead to the demise of President Hussein's regime and the institution of an Islamic Republic -- that kind of winning, I think, is as far today as it has ever been.

MacNEIL: Do you agree with that, Professor Rubinstein?

Mr. RUBINSTEIN: Yes, I do. I would just add, perhaps, a modification or a corollary that I think if Saddam Hussein, the Iraqi strongman, were overthrown, the Iranian government might accept this as a sign of victory.

MacNEIL: I see. Now, why does the United -- what is the United States to fear now in this situation? It's an enormously costly war, and what should Washington be anxious about now?

Mr. RUBINSTEIN: An Iranian victory.

MacNEIL: But you say that's impossible.

Mr. RUBINSTEIN: Not impossible, but improbable. After all, it's very difficult to know what the state of morale is among the Iraqi army. They've paid a very heavy price. It's very difficult to know how much of a price Iran's willing to pay to slog ahead and move slowly, bit by bit, to take Iraqi territory. So it's very difficult to make, it seems to me, authoritative judgement on this question.

MacNEIL: So it looks like continued fighting, but no real sudden climax to this war. Do you agree with that, Dr. Dawisha?

Dr. DAWISHA: Yes. That would be my assessment -- that there will be continued fighting. There's not going to be a very dramatic end to the war. I think the final offensive which they're planning for this autumn will fizzle -- fizzle out. And I think that the United States, even with all these reassuring remarks, will have to be -- to continue to be worried about the area, simply because of the proximity of Iranian forces to the gulf nations, particularly Kuwait, and of course later on Saudi Arabia.

MacNEIL: Well, Dr. Dawisha and Professor Rubinstein, thank you both for joining us. Boom to Bust

LEHRER: Finally tonight, the kind of story non-texans love. It's about what's heppening in Texas now that the money's running dry.The reporter is correspondent Elizabeth Brackett.

ELIZABETH BRACKETT [voice-over]: For years, these Texas oil wells pumped millions of barrels of oil and pumped millions of dollar in state tax revenues into the Texas economy. But things are different now. With oil prices hovering between $10 and $13 a barrel, the Texas economy is on the brink of disaster. Analysts say for every $1 drop in the price of oil, the state loses $100 million in revenue. University of Texas economist Norman Glickman says the drop in oil prices is just the beginning of the economic troubles in Texas.

NORMAN GLICKMAN, University of Texas: The disorder at the border, the fall of the peso, freezes down along the border that have wiped out agricultural crops, near disaster in farming and ranching, a downturn in electronicsd. We never were a rich state to begin with. We've always been below the national average in income.

BRACKETT: But we haven't heard any of this before. Why now?

Mr. GLICKMAN: Because the Texans have a way of bragging about their wealth, and the media has a way of reporting that. And films and radios and television all have pushed that image. It's not a correct image.

BRACKETT [voice-over]: The drop in personal income for Texans has also meant a hugh drop in sales tax revenues for the state. People are simply not spending as much on retail items. In the last two years, receipts from oil and gas taxes have dropped by just over $1 billion, while sales tax revenues have dropped $1,300,000,000. Since the Texas Constitution mandates a balanced budget, all this has left the state facing huge budget deficits. Estimates range from 1.7 billion to as much as $5 billion over the next four years. Texas Governor Mark White called a special session of the Texas legislature to tackle the crisis. His own solution, guaranteed to be politically unpopular in an election year, was to call for budget cuts plus a 1.3% increase in the state sales tax.

Gov. MARK WHITE (D) Texas: Tough times call for tough choices. I'm asking you, therefore, to enact an increase of one and one eighth cents in our state sales tax. This will be a temporary oil and gas replacement tax -- an emergency tax to make up for lost revenues. It will be sunsetted automatically on the last day of this biennium.

BRACKETT [voice-over]: Not surprisingly, White's opponent in the upcoming fall election has come down hard on White's proposal to increase taxes. Former Republican Governor William Clements:

WILLIAM CLEMENTS, former governor: All of the polls clearly indicate that the people of Texas do not want to increase taxes. And why this governor would come out during this high unemployment period, during the time we're having a recession, when we have Texans out of work, and the first pop out of the box, he says we've got to raise taxes. It's absurd. We don't need to raise taxes; we need to think about putting people back to work and creating jobs and attracting capital into Texas and formation of business in Texas. That's what we need to be talking about.

Gov. WHITE: You don't like to raise taxes in any time of the year. But it's so essential, I think, to the future of Texas that I've asked members of the legislature as well as all those others affected officeholders, including myself. We're going to put our jobs on the line. We've got a lot of people in Texas who've already lost their jobs. So we shouldn't worry about it. Just go do what's right. We'll sufferthe consequences.

BRACKETT [voice-over]: The turmoil in Texas is more than a battle between two politicians.It is a battle over the way Texans see their future. Historically, Texas has been a low tax, low service state. Texas still ranks 47th among the states in welfare payments, 48th in spending on mental health care, 29th in per pupil spending on education. State Senator Craig Washington says the choices the state makes now will chart the course for Texas into the next century.

CRAIG WASHINGTON, state senator: If we can get up and dust ourselves off, like we good cowboys do when we get thrown off the horse, we can dust ourselves off and look around and be strong and proud Texans that we are and realize that we have a problem that we can solve and move ahead and solve that problem of broadening our tax base and including more people and delivering more services.

BRACKETT [voice-over]: But so far, this special session of the legialture has been unable to come up with a clear cut solution to the state's financial crisis. Democrats control the House, but remain steadfastly opposed to the Democratic governor's call for a tax increase. Instead, the house insists the budget crisis can be met by cuts in the state budget. The speaker of the house, Democrat Gib Lewis, says a tax increase would be disastrous for the state.

GIB LEWIS, speaker of the house: Well, of course, the worst solution would be to pass some type of revenue enhancement. That could be a tax bill, that could be expanding the tax base. Currently what we're working on are cuts in the budget.

BRACKETT [voice-over]: Following the speaker's lead, the full house passed a bill calling for just over $600 million in budget cuts.

House official: House bill one. All those in favor, signify by saying aye.

Legislators: Aye.

House official: Opposed no.

Legislators: No.

House official: House bill one passes to endorsement.

BRACKETT [voice-over]: The senate, also controlled by Democrats, says house members are engaged in shortsighted, wishful thinking. Senators say the state's money problems can not be solved by budget cuts alone. Unpopular or not, what is needed, say most senators, is some sort of a tax increase.

CARL PARKER, state senator: It is a bitter pill. I would like to serve down here and spend money and give money to various good causes that you can find an unlimited supply and never vote for a tax vill. But I wasn't sent here to be irresponsible. And my constituents are not stupid. And what they do know is, they don't like taxes, but they like unemployment less.

CHET BROOKS, state senator: Raising taxes or proposing taxes in any time is kind of like milking an alligator; it's fraught with danger at both ends. But the one thing that has pleased me most, Mr. President, is the fact that the people of Texas in their correspondence, in the phone calls, in my contacts in my district, an overwhelming majority of those contacts have said, "But I am willing to pay a little more in the form of taxes or even -- or some other form of revenue raising in order to support essential services."

BRACKETT [voice-over]: The two houses tried to resolve their differences in a conference committee, but no compromise was reached. And as the first special session of the legislature ends, Texas is just as broke and just as far from a solution as it was when the special session was called.

[on camera] One solution that is not being proposed here is a state income tax. Texans seem toregard the idea of a state income tax as an assault on their basic human rights, and politicians regard the idea as political suicide.

Gov. WHITE: Look, I'm taking enough risks just asking for increasing the sales tax. I'm not trying to see an overthrow of the government down here.

BRACKETT: What is it about the people of Texas and the state income tax? Many other states have them.

Gov. WHITE: Well, that's true. And I think we don't want to be like many other states. Texans are an independent people. We believe in profits. We believe our people, as well as our companies, are entitled to profits. And we think that this is a way to attract new industry and to build a true broader base that we need to diversity our economy.

BRACKETT [voice-over]: Texas we talked to agreed with their governor -- no state income tax for them.

[on camera] Would you rather see a budget cut or a tax increase?

Texan: Budget cut. I just think it's the wisest thing to do. I live in an agricultural community in North Texas, and I see the bankruptcies and the misfortune that everybody's facing, and I'd hate to see a tax increase for that reason.

Texan: Well, with the current layoffs like they are in the state, I'd hate to see taxes increase and hurt those same people that are getting laid off.

BRACKETT [voice-over]: But one politician, State Senator Washington, says a complete overhaul of the state tax system, including a state income tax, may be the only answer to the state's long range financial problems.

Mr. WASHINGTON: Texans are not accustomed to facing things like taxes.We've spoiled ourselves and lived in the lap of luxury, so to speak, for a good many years. I think the forthright and direct thing to do is to put off the inevitable and go ahead and do it now. And that is to pass a corporate profits tax and a state income tax.

BRACKETT [voice-over]: But Washington does not have an opponent in the upcoming fall election. Those who do are not likely to follow his lead in calling for a state income tax. It is also not likely that oil and gas prices will rebound enough to cool off the state's financial crisis. So Texans are left with lots of rhetoric, few solutions, and a financial crisis that grows deeper every day.

MacNEIL: Finally, once again, the main stories of the day. Iran stopped two Soviet merchant ships in the Persian Gulf and detained one. South Africa imposed tough new restrictions on press coverage. The death toll in the California air crash may rise to 91. Good night, Jim.

LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.