The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. In the headlines this Thursday, the unemployment rate went down in June. President Reagan expressed new hope for a summit. And another bomb went off in South Africa. We'll have the details in our news summary in a moment. Charlayne Hunter-Gault is in New York tonight. Charlayne?

CHARLAYNE HUNTER-GAULT: After the news summary, here's the News Hour line up: two economists disagree on where the economy is heading. We have a newsmaker interview with new World Bank President Barber Conable. We debate the fairness of child support laws. And essayist Jim Fisher tells us about some proud Americans who didn't get here by way of Ellis Island. News Summary

LEHRER: Unemployment went down in June. The Labor Department said today the drop was .2% -- from a 7.3 to a 7.1% rate. Many economists had predicted an increase as a sign the economy was sluggish, so today's decrease was not fully expected. White House spokesman Larry Speaks said it was good news for the economy and showed it was still growing. Others disagreed. Private economist Lawrence Chimerine, for instance, said it was meaningless, because the rate had been mostly stagnant for the past two years. Charlayne?

HUNTER-GAULT: Prospects for a summit between President Reagan and Soviet leader Mikhail Gorbachev appeared to brighten today. The President was quoted as saying that a letter from Gorbachev delivered last week was quite a packet and worthwhile. That packet was said to include proposals on arms control, regional conflicts, human rights and immigration. In the interview, published in USA Today, the President said he was preparing a response that he hoped would lead to a summit meeting this year.

LEHRER: North Carolina Congressman James T. Broyhill was appointed to the U.S. Senate today. He will take the seat of the late James East, who died last weekened. We have a report from Time Kent of WRAL in Raleigh.

TIM KENT: Friends and family assembled for an announcement which came as no surprise. Twelve term Republican Congressman Jim Broyhill has been appointed to fill the vacancy in the United States Senate.

Gov. JAMES MARTIN (R) North Carolina: I have, as you know, admired Jim Broyhill for a long time. And both as a citizen and as a former colleague, I have profound confidence in his ability to get things done while serving his constituents.

KENT: The 55-year-old Broyhill is the GOP nominee for the Senate election this November, and he takes over the seat previously held by John East. East, who suffered from several health problems, committed suicide four days ago.

Rep. JAMES BROYHILL, Republican senator-designate: I look at this as a challenge to work and to represent all of the people of this state, And I'm not looking on it as a political stepping stone.

KENT: Governor Martin says Broyhill was the most qualified person for the job. Meanwhile, Democratic candidate Terry Sanford told reporters that today's appointment won't influence the fall election.

TERRY SANFORD, Democratic Senate candidate: Nothing has really changed. The campaign goes on. The election will take place. Senators in the end must be elected.

KENT: Congressman Broyhill will assume his new job in less than two weeks, when the Senate reconvenes.The governor has not yet decided when to schedule a special election for Broyhill's Congressional seat.

HUNTER-GAULT: In what appeared to be an escalation of urban guerrilla warfare in South Africa, a bomb exploded at a Cape Town police station today, wounding two white officers slightly. It was the 11th urban bombing since the state of emergency June 12 -- the first of a security force installation. The bomb, apparently planted in a flower box next to the station, exploded during the morning rush hour in Cape Town's Mowbray suburb, sending glass and rubble from a low wall across a main street. Nobel Peace laureate Bishop Desmond Tutu yestarday condemned the previous bombings in other parts of the country, saying they would not help end injustice in the country.

LEHRER: The trouble continued in Chile today. Army troops patrolled downtown streets in the South American nation's capital city of Santiago. Thousands of shopkeepers and truck and bus drivers remained on strike. Three persons have died in clashes between police and strikers in the last two days. The government today said charges will be filed against 17 civic leaders involved in the strike. It also banned opposition radio news programs.

HUNTER-GAULT: The final countdown for Lady Liberty's four day birthday party has begun in earnest. Part of the preparation for this phase includes more than 22,000 New York City policemen, plus members of an elite military anti-terrorist force, joined by hundreds of federal law enforcement agents. From early morning, hundreds of people have been streaming into Manhattan from nearby states on trains and buses. Officials are predicting that their numbers will swell to as many as 13 million people. Among those preparing for the trek; President and Mrs. Reagan, who left the White House this afternoon for the short trip to New York. Tonight, the President, joined by French President Francois Mitterand, will officially open the celebration by throwing the switch that relights the statue, a century old gift from France.

[voice-over] The first formal ceremony of the weekend began at noon today on the steps of St. Patrick's Cathedral, where Cardinal John O'Connor and other dignitaries struck 100 chimes on a model of the Liberty Bell. And all day the harbor was in a flutter of sails and a bustle of ships in all shapes and sizes. They moved through the harbor under all forms of propulsion -- some under sail, a big British aircraft carrier driven by huge turbines, and some propelled in the old fashioned way. More than 30 warships from the U.S. and 13 foreign countries were taking station in anchorages where President Reagan will review them tomorrow. Nearly 200 sailing ships from all over the world came into port to take part in a parade of sail to be led by 22 of the tallest vessels in the world. And the spectator yachts were out looking for any mooring with a clear view amidst a fleet that may come to as many as 40,000 boats, great and small.

[on camera] That completes our news summary. Still ahead, two economists argue over where the economy is heading. New World Bank President Barber Conable is our newsmaker interview. We hear a debate about child support laws. And essayist Jim Fisher has some Liberty Weekend words about proud Americans who didn't come here by way of Ellis Island. What's Ahead?

LEHRER: The unemployment rate came out today. It was down, and that is good news for the economy. But yesterday factory orders were reported down, which is bad news. But Wall Street is bullish, which is good. But the Federal Reserve is worried, and that, of course, is bad. And so it goes these days, the end result being a bag of mixed and confusing signals about the economy. We sort through it tonight with two economists who usually disagree on what's good and bad. They are Gary Shilling, who runs an economic consulting firm in New York, and Richard Rahn, chief economist of the U.S. Chamber of Commerce here in Washington.

Mr. Rahn, how do you read today's unemployment figures, first?

RICHARD RAHN, economist: Well, I think it shows the economy is still perking along at a pretty good rate. We have a record number of Americans at work, a record high percentage of our adult population at work, the stock market is at a record level, interest rates are down, oil prices are down, and there is virtually no inflation.

LEHRER: Mr. Shilling?

A. GARY SHILLING, economist: Well first of all, the unemployment numbers were really misleading. What's important is the employment, particularly using the count of people at work at various establishments -- and that actually showed a decline. The consensus thought it would increase, but it declined almost 100,000. And that's even more than you would expect, given the strikes at AT&T and Alcoa. I think it shows that we're seeing tremendous cost cutting in the American industry. We're seeing not only blue collar people laid off. We're seeing cuts in wages in the copper industry. We're seeing white collar layoffs. And you put that on top of the myriad of other weak statistics. I think it says the economy, at best, is going to just mosey along. And the prospects of it stumbling into a recession are certainly high.

LEHRER: We'll get back to that in a moment, Mr. Shilling, but the unemployment rate went down, right?

Mr. SHILLING: Well, the unemployment rate as measured by the household survey. But that is regarded as being not nearly as good satisfically as the establishment data, which is not simply asking people, "Are you employed or not?" but rather, counting actual people on the job. And that showed a decline of 89,000 people.

LEHRER: Okay. Mr. Rahn, to the broader picture. As Mr. Shilling said, the figures the rest of this week -- earlier this week -- were not good. But you still say that everything looks good to you generally for the economy. Is that right?

MR. RAHN: Well, the economy has been more sluggish than any of us had wanted. But we expect that the economy will grow much more rapidly the second half of the year. We've had several problems. The first has been the uncertainty about tax reform.

LEHRER: And you think that's a cause of the sluggishness?

MR. RAHN: Oh, it's a major cause. Businessmen have not been investing. The investment figures are woefully weak. They've been worse they have in years. And the main reason is businessmen do not know how they're going to be taxed on their new investment. Hopefully, we'll get the tax bill out of the way in the next month or two, and then that will give people certainty again. I expect to see investment pick up. I expect to see consumers starting to spend more once they know how they're going to be taxed.

LEHRER: Let's ask Mr. Shilling about that. You agree that the uncertainty over the tax reform law is causing this sluggishness?

Mr. SHILLING: It's a minor factor. Capital spending is moving down anyway. There's massive cuts in the oil patch because of the collapse in oil prices. We've seen an end of the overbuilt office building boom, which has also involved hotels and shopping centers. The whole capital spending boom was -- occurred much earlier in this cycle because of the 1981 tax advantages, and it's been -- it's been working down ever since. So the uncertainty over the tak bill, I think, is really a minor event. Capital spending has had it regardless.

MR. RAHN: Well, I disagree with that. We have done some surveys of U.S. chamber members. And we find about 42% of them have postponed investment. Also, if you take a look at the normal business cycle that has lasted this long, you find capital spending much higher than it is in this particular cycle.

Mr. SHILLING: Well, that's right, but you found the boom took place in the first year of the cycle, as opposed to beginning at the end of the second year, if you examine --

Mr. RAHN: But we had a deeper cut last time. The bottom was deeper because of the very restrictive federal reserve policy. Now, this shows the importance of getting those tax cuts just as quickly as possible. I think the tax writers are making a mistake by postponing the rate reduction. In my judgement, they'd be best off moving a rate reduction up to the immediate time, rather than waiting until the middle of next year.

LEHRER: What would be the end result of that?

MR. RAHN: What that would do is give the economy an additional kick, get us going at a much higher real rate of economic growth, and we'd all be better off. We'd probably have another million people employed than otherwise will be employed by postponing the rate reduction.

LEHRER: Mr. Shilling, you don't think that that is a major cause of the problem. What do you think the problem is, then?

Mr. SHILLING: Well, I think the problem really stems from three factors, and it's almost as though you had a beast of burden with three huge rocks on his back. The first rock is the massive debt that has been run up throughout the American economy, not only by the federal government -- state and local governments, corporations with all the leveraged buy outs and takeovers, mortgage debt, and most of all consumer debt. Consumers are borrowing heavily in order to just maintain their spending growth. That debt is wearing out the beast. There's only so much that can be incurred. The second rock is the still very high interest rates which are necessary to pay for that debt. And even though rates have come down, if you adjust for inflation, inflation's come down as fast, and adjusted rates are still as high as they were. And that's what the ultimate borrower has to pay. That's what he can't pass on through higher prices or wages. And the third rock is the tremendous deficit on our trade account. $150 billion each year leave this country. And that means that doesn't go to support domestic production, job creation or incomes. We're just wearing out this economy. Unlike most cycles, it's ending with a whimper and not a bang. It isn't a blow off of capital spending and inventory exuberance; it's simply too much of debt, too high rates, and a draining of purchasing power going to the rest of the world.

MR. RAHN: I really disagree with that. If you look at the asset side of the ledger -- and you have to look at debt in relationship to assets -- again, we have record high stock market. Those are real assets for people. Housing values have increased. Corporate cash flow is at very high levels. And so you've had a consummate growth in the asset base of the economy. This debt we have is not something that's unmanageable. In terms of a foreign trade deficit, we have to remember that for the first 100 -- 400 years of this economy -- since 1607 to 1898 -- we ran a trade deficit. Many poor countries run trade surpluses, and many wealthy countries run trade deficits. And that trade deficit can only be brought down with faster economic growth than the rest of the world without us putting ourselves into a recession. What that shows -- that trade deficit -- is that foreigners want to put their money in the United States and invest in the United States. That's what that deficit shows.

LEHRER: What about the stock market? Amidst all of these things, the stock market is really -- just set a couple of records, in fact, this week. What do you attribute that too, Mr. Rahn?

MR. RAHN: Well, the stock market has been a good leading indicator over the years. And I think it shows the people that have the money who will put the money on the line have faith in America. And they expect this economy to continue to grow, and more rapid growth next year in 1988.

LEHRER: Does that run counter to your theory, Mr. Shilling?

Mr. SHILLING: Not at all. The stock market is really celebrating the end of inflation and mirroring the decline in interest rates. It's strictly a matter of lower interest rates leading to higher price earnings ratios for stocks. As a matter of fact, if you look at last year -- and this has been true throughout this market rally starting in 1982 -- but if you look as last year, long term treasury bonds on a total return basis -- and that means the yield plus the price appreciation -- were 31.56%. The S&P 500 stock index --

LEHRER: That's Standard and Poor, right?

Mr. SHILLING: Standard and Poor on the same basis -- total return, yield plus appreciation -- was 31.57% -- 100th of one percentage point different. It's been an interest rate decline led rally, and earnings have been consistently disappointing. Security analysts have consistently overestimated earnings. In 1983, '84, '85, and again in '86.

MR. RON: This illustrates my point that people buy stocks on expected earnings, not current earnings. You're right.Current earnings have been down. But somebody does not pony up the money for a stock if they don't believe that company's going to do far better in the future.

LEHRER: Well, gentlemen, there are many, many cliches about getting two economists on the same television program and asking them the same question and getting different answers, and you've proved true every one of them. Mr. Rahn, Mr. Shilling, thank you both very much. Charlayne?

HUNTER-GAULT: The United States is not the only country with uncertain economic prospects right now. Next tonight Judy Woodruff has an interview with Barber Conable, who took over this week as president of the World Bank.

JUDY WOODRUFF: With 20 years in the House of Representatives under his belt, Barber Conable takes over the World Bank at a time when it is under increasing pressure from the Reagan administration to expand its role in the world economy. The World Bank was founded 40 years ago to make loans to countries suffering from the devastation of World War II. The loans were primarily for development projects such as dams, roads, schools and hospitals. But the growing debt problems of third world countries have propelled the bank into a role that was previously the responsibility of the International Monetary Fund -- lending money to help heavily indebted countries escape economic collapse. Up to now, third world countries have seen the World Bank in a much kinder light than the IMF, which has demanded tough belt tightening measures in return for its loans. While Barber Conable does not have a great deal of banking experience, he built a reputation in Congress as a master of complex economic issues. For more than a decade, he was the most prominent Republican member of the powerful House Ways and Means Committee.

Mr. Conable, thank you for joining us.

BARBER CONABLE, president, World Bank: Nice to be with you, Judy.

WOODRUFF: As we just mentioned, the Reagan administration is pushing the World Bank to take more of a leadership role in solving the world's debt crisis. Do you think that's the right direction for the bank to move in?

Mr. CONABLE: I think it is, yes. I'm pleased that we can have a central role. The World Bank is a complex institution, but it has a great many highly motivated and very skillful people. I think a stronger role for the bank is possible -- will be desirable for the future stability of the world.

WOODRUFF: Specifically, what would you like to see the bank do that it's not doing now?

Mr. CONABLE: I'd like to see it expand its lending as much as is consistent with the needs of the developing world and the resources of the developed world. I'd like to see the bank serve a much larger coordinating role than it has traditionally held. That's necessary because there are so many actors on the international global front now -- the commercial banks, the IMF, as you mentioned, the bilateral lending agencies, the international investors. In fact, it's a very complex world. And you need a complex institution like the World Bank to handle the problems of that -- of development in such a world.

WOODRUFF: But doing the extra lending you're talking about is going to cost more money. How much more money, and where are you going to get the money from?

Mr. CONABLE: Well, much of the lending by the World Bank is lending that has been -- it's money that's been raised through the issuance of bonds which are backed by guarantees of the member countries, rather than putting the money in through appropriations -- taking it away from the taxpayers as such. Now, obviously, money raised through bond issues costs somebody something.But it is by no -- by no means as expensive a type of aid as the bilateral lending, for instance, that would have to be appropriated by the individual countries that gave such aid.

WOODRUFF: But still, you might very well have to go to the Congress to your former colleagues in the Congress for more money at a time when they are tightening their belts in this era of Gramm-Rudman. How receptive do you think they're going to be to that?

Mr. CONABLE: Well, I hope they'll be receptive. They are, of course, interested in a stable world. And they contribute a great deal to the cost of a stable world through defense appropriations, through bilateral aid, through things of that sort. It seems to me they'll have a very cost effective way of doing it through the World Bank.

WOODRUFF: By the way, it's been reported that the staff at the World Bank is not all that anxious to see this change in direction that we've just been discussing.How do you cope with that?

Mr. CONABLE: Well, it obviously is going to be difficult to reorient a large bureaucracy which has been dedicated to project lending -- that is, to lending for specific things -- and to change the lending approach to one of adjustment lending -- lending to encourage economic growth. And that's the direction in which the Reagan administration and the rest of the developed world is trying to push the bank at this point. I think it's a desirable change, because you can't just go on lending money -- putting more good money after bad, if that's the case -- indefinitely, without a plan that would permit the developing world to earn its way out of its debt difficulties. It's a -- it's, I think, much more hopeful to be approaching it the way it is now being recommended.

WOODRUFF: Speaking of those debt difficulties, some of your former colleagues in the Congress have been arguing that the lenders, like the World Bank, ought to take a more lenient stand on the third world debt -- that some of the stringent measures that have been imposed have created real havoc, that what we ought to have are, frankly, some write offs of some of these loans. Do you think that's a good idea?

Mr. CONABLE: Well, I don't know how you write off loans for some countries and not for others. If a country -- for instance, would you write off a loan for a country that had tried very hard and had had something beyond its control go wrong with its particular debt situation? Or would you write it off for a country that hadn't tried at all, but in fact was in as serious trouble as the other country? You know, it's very difficult to be selective. And you've got to have a stable and predictable continuity of payments, or you're going to get into trouble in a hurry.

WOODRUFF: All right, specifically, Mexico. Here's a country that's got, what, a $98 billion debt that it's trying to deal with. Recently there's been a lot of frantic talk about what do we do about Mexico, Mexican officials saying they may not be able to live up to meet the payments on their loans. There's talk now of some sort of rescue package that would involve imposing some pretty tough conditions on Mexico.

Mr. CONABLE: Yes, and there are going to be a great many actors with respect to Mexico. Ultimately, the prime actor has got to be Mexico itself. Mexico has to want to work out its debt problems. The IMF -- the International Monetary Fund -- is trying to get Mexico to reduce its deficit at this point. The World Bank is contributing by having negotiated -- it already has negotiated -- a package relating to trade that would be helpful to Mexico's economy in the view of the bank staff. Now, that will all have to be put together ultimately, but it's going to have to be put together on the basis of Mexico's willingness to accept conditions that will permit economic growth -- not conditions that will cause such stringency that you would have the kind of reaction you mentioned from Congress -- that we were simply imposing austerity on the rest of the world.

WOODRUFF: But what if Mexico isn't willing to go along with these kind of conditions?

Mr. CONABLE: Well, that's -- it will be a very serious problem for Mexico if it doesn't, because obviously the Mexican government wants to have a stable economy itself. And if they can't solve their debt problem, their economy will not be stable.

WOODRUFF: Well, specifically, if Mexico is not able to keep up the interest payments on its debt, what are the implications of that?

Mr. CONABLE: Well, ultimately it could result in default. The default could result in nobody being willing to help Mexico in the future.

WOODRUFF: Do you think that's going to happen?

Mr. CONABLE: I don't believe so. I believe Mexico has the capacity to work its way out of its problems, and I think -- but I think that ultimately that desire has to come from Mexico itself. And we have to create attractive --

WOODRUFF: Is the desire there now?

Mr. CONABLE: What?

WOODRUFF: Is the desire there now?

Mr. CONABLE: There are negotiations going on, and I would certainly hope there will be, yes.

WOODRUFF: But I mean, can you say right now that --

Mr. CONABLE: I can't say right now that there's a solution. But I can say that it's very much in Mexico's interest to have a solution worked out with the various agencies like the World Bank and the International Monetary Fund who must be actors in this in order to provide Mexico with the tools it needs to earn its way out of its difficulty.

WOODRUFF: A quick last question: there was a study done recently that recommended that countries like Japan, with a huge trade surplus, get more involved in the World Bank lending -- that Japan be more responsible for taking care of some of these third world countries. How do you feel about that?

Mr. CONABLE: Well, I would hope that the Japanese would pick up more of the burden. They call it burden sharing at the bank. It -- of course, Japan will want to do so under terms which will give her additional clout at the bank as well. And that requires some rather complicated negotiating. But Japan, with her large trade surplus, would be a natural to carry more of the burden at the World Bank. They do not have a heavy defense burden. And for that reason, they should be interested in contributing to world stability through multilateral lending of this sort.

WOODRUFF: Are the Japanese willing to do that, do you think, at this point?

Mr. CONABLE: I hope so, but obviously they'll want to impose their own conditions. They're a sovereign nation, just like any of the other nations of the world, and they'll hope to improve their situation as a -- relative to the World Bank -- as a condition for additional burden sharing.

WOODRUFF: Well, Mr. Conable, we want to wish you luck in your new position.

Mr. CONABLE: It's a very challenging job, Judy. I'm looking forward to it.

WOODRUFF: Thank you for being with us.

Mr. CONABLE: Thank you. Tug of War

HUNTER-GAULT: A different kind of economics now -- who really pays for child support? Judges may have been ordering fathers to pay, but since it's usually the mother who gets custody, it's often the mother who ends up paying. The problem had gotten so bad that two years ago Congress was persuaded to pass a law that makes it easier to collect back payments. But that didn't end the problem. Fathers' rights activists condemned the law from the beginning, and women's groups are now saying that it hasn't worked out the way they had hoped. In a moment we'll be hearing a debate we recorded earlier about the child support laws. But first, we look at what's happened to some families since the law was passed. Our correspondent is Kwame Holman.

KWAME HOLMAN [voice-over]: Cheryl Narkgraf does other people's laundry in order to support her four children. This two day a week job pays only $4 an hour. Before she divorced her husband, a building contractor, life was much more comfortable.

CHERYL NARKGRAF: We had a five bedroom house. We had seven and a half acres. The kids had horses, rabbits, dogs, cats. They were able to go to movies, do fun things with kids, go to a birthday party because they could afford a gift. Now they can't do any of that.They don't do anything, period.

HOLMAN: [voice-over]: Cheryl Narkgraf's divorce was three years ago. Today she depends on food stamps to help feed her children. Her friends helped her pay the initial cost to rent this apartment. But now she is two months behind in her rent. She is fearful of being evicted. The last time they were evicted, they ended up living in a motel until Narkgraf had to sell her blood to put food in her children's stomachs.

Ms. NARKGRAF: We used the trunk of the car as a refrigerator. We couldn't cook in the motel, because it wasn't a kitchenette. We are peanut butter, plain bread, dry cereal, things like that. I drove the kids back and forth about seven, eight miles to get them to school. The principal one time gave me $20 to feed my kids breakfast because they were so hungry -- it had been a couple days since they had eaten.

HOLMAN: [voice-over]: When the divorce was made final, Narkgraf's husband was ordered to pay her $1,200 a month in child support. He never has. Instead, he gives her a few hundred dollars every year. He now owes her over $20,000 in back support payments, or arrears. Cheryl Narkgraf's situation is not unique. Nationwide, over half the women who are supposed to be receiving child support payments don't get them. An estimated $4 billion in child support payments are outstanding.

BETTIANNE WELCH, child support activist: Okay, folks. We just hit an all time high. You know what her arrearages are? $66,350.

HOLMAN: [voice-over]: Bettianne Welch is determined to help women like Cheryl Narkgraf. When her ex-husband stopped paying his child support, Bettianne Welch found that the system could not help her recover the money. So she started organizing to change the system.

Ms. WELCH: I became very angry, and I began to get a group together of other parents who were equally angry. And we decided that, obviously, the system was not working. And so what was needed was legislation.

HOLMAN: [voice-over]: After an extensive lobbying campaign in Washington D.C., Bettianne Welch prodded Congress to act. In 1984 Congress set minimum standards for child support enforcement. The states then were supposed to pass enabling legislation, putting these new federal standards into effect. The government offered states financial incentives for putting into place mandatory collection procedures -- procedures that would benefit all custodial parents who were not receiving their child support payments. The states were given until the fall of 1985 to conform their laws to federal policy.

Colorado, which is Cheryl Narkgraf's home state, passed such legislation last summer. The bill provided for mandatory automatic wage withholding once a delinquent parent was 20 days behind in his child support payments. The act also allowed the state to file liens against his property, garnish his bank accounts and tax refunds, and to report his delinquency to credit rating bureaus. On paper, the legislation sounds strong.But the problem is that, although the legislation is almost a year old, it hasn't helped very many people yet. In fact, most people in Colorado -- even the people who are supposed to be enforcing the law -- have never heard of these new enforcement tools.

MAYNARD CHAPMAN, Colorado Social Services Department: We're talking about a strong enforcement tool that is in the process of being implemented and is mandatory. That has come as a surprise to some of the participants in other training sessions that we have conducted.

HOLMAN: [voice-over]: Maynard Chapman is trying to spread the word to those who work in child support enforcement offices. He admits there has been a long delay between the law's passage and its implementation.

Mr. CHAPMAN: The wage assignment enforcement tool was included in Senate Bill 170, which became effective July of 1985. Then the State Department of Social Services -- the child support division -- began to draft regulations after that legislation became effective. We are late in getting the training to the counties. We felt like it was important to understand the enforcement tool as thoroughly as we could understand it before training others.

HOLMAN: [voice-over]: Cheryl Narkgraf has no idea that help is available. She doesn't know that the state now will act as her agent in recovering her support payments. She doesn't know that mandatory wage withholding is the law of the land. In fact, attorneys she's consulted have told her that the only way to recover her child support is to spend more money.

Ms. NARKGRAF: They said, "Well, it takes money to do these things, for one thing." To get a private investigator, to get garnishments, anything costs money.

HOLMAN: [voice-over]: A frustrated Cheryl Narkgraf decided to take some action on her own. On morning before sunrise she and her eldest daughter borrowed a car and staked out her ex-husband's house. She hoped to find out where he was working as a contractor so she could hire and attorney to garnish his paycheck.

Ms. NARKGRAF: If he just started this job, there's good chance we could get that check.I don't think my nerves can take much more of this though.

Daughter: Mine neither.

Ms. NARKGRAF: Keep in mind living in those sleazy motels when we didn't have money to live anywhere else. Remember the times we went for days without food and think about that every time we want the check. That way we won't feel guilty.

HOLMAN: [voice-over]: When the sun came up, Cheryl Narkgraf and her daughter still were waiting.

Ms. NARKGRAF: It's real hard for me to understand why any man wouldn't care enough to support his kids. I really don't understand it. If he'd even pay $20 a month to show he's trying -- yet, the more women I talk to, I find that so many of these men, once they're divorced, they all turn into the poorest men on earth once they get a divorce.

HOLMAN: [voice-over]: After two and a half hours, the ex-husband finally left for work. Despite their disguises, he recognized his ex-wife and daughter and tried to elude them.

Ms. NARKGRAF: Watch now. If he goes this way, he's going to be looking. He's looking. Shoot. There goes my stomach.

Daughter: God dang it. You think he saw us?

HOLMAN: [voice-over]: They managed to find him again.

Ms. NARKGRAF: I can't believe we're getting somewhere.

HOLMAN: [voice-over]: But he just led them to a former job -- a job he'd already been paid for, so that check was safe from attachment.

Ms. NARKGRAF: You know something, when I think of it, this is not fair. I don't understand. He's in contempt of court and everything else. Why they just -- a cop doesn't go out and just arrest him, period -- put him in jail. Why do we have to do all this stuff?

HOLMAN: In Colorado, the state has begun to make up for lost time -- begun to help women like Cheryl Narkgraf. Colorado now aggressively pursues parents who haven't made their child support payments. In fact, here in Denver alone collections are up some $50,000 in one month this spring. Colorado also has made the nonpayment of child support a felony and is considering publishing a ten most wanted list of delinquent parents.

[voice-over] But despite this effort, it will take time for the new law to filter down to the people who need it.

Ms. WELCH: We had thought the law would go in, states would enact it, and things would start catching up. Now the women in the United States are even more frustrated. They are very angry. What I advise them is that the system will work. The legislation will work. It's going to take four or five years.

HOLMAN: [voice-over]: But some critics are not anxious for the new law to take effect.

CARL STONE, former enforcement officer: Fathers suffer tremendously, because everything is stacked for the benefit of the women.

HOLMAN: [voice-over]: Carl Stone worked in a child support collection office in Colorado. Then he wrote a controversial article for Playboy magazine describing himself as a hired gun for the state. Soon after, he left the enforcement unit and returned to college.

Mr. STONE: There's all sorts of laws and help that take the woman's side. She can establish paternity, she can establish the child support order, and she can have that order enforced.

HOLMAN: [voice-over]: But men, he says, get no help from the government.

Mr. STONE: You're supposed to handle your own emotions or your troubles or your griefs or whatever. And so you're supposed to handle whatever comes up by yourself. You're not getting your visitation, you're supposed to go get your own lawyer and take care of it. There is no government agency to take care of that.

HOLMAN: [voice-over]: Karen Jackson agrees wholeheartedly that fathers are the forgotten victims. The second wife of a man who owes child support, she came to this fathers' support group meeting to voice her frustration.

KAREN JACKSON: I told him more than once, "Hell with it. Go. Get out of my life."

HOLMAN: [voice-over]: When her husband Bill was laid off from his job at a steel mill, he no longer could make his child support payments. When he finally got another job at this brickyard, his pay was attached to make up for his arrears. Unlike most creditors, the state can take up to 65% of a paycheck to pay for child support.

BILL JACKSON: Out of a $210 paycheck, I brought home $58. And $58 goes about from the front door to the back door, and that's -- that pays maybe part of the light bill. Working in a brick yard, you -- it's hard work. You earn your money. After four ten hour days, you expect a nice check. When you come up with $58 for a check, you just sort of say, "Why should I come to work? Why should I --"

Ms. JACKSON: "Why should I work this hard?"

Mr. JACKSON: "Why should I work this hard?"

HOLMAN: [voice-over]: When Bill Jackson couldn't pay his child support, his ex-wife refused to let him see their two children. Now that his check is being attached, he again can have them visit. He is bitter that although he's making up his past payments, there is no way to make up for lost visitation. Despite his unhappiness, the new law only allows Bill Jackson to contest the mandatory payments on two grounds -- either by proving that he'd already paid his child support or that it wasn't due. Although the state provides a lawyer free of charge to the custodial parent, the delinquent father has to pay for his own defense.

Mr. STONE: Well, the whole thing is set up so that they don't stand a chance. Because whether you're in the right or the wrong, if 65% of your check is gone, you're not going to get a lawyer. I mean, you walk in the lawyer's office and say, "I'd like to have you represent me." He says, "With what? Your check's already gone."

HOLMAN: [voice-over]: Unable to afford a good lawyer, unwilling to go to jail, the Jacksons paid. But because of the payments, Karen Jackson had to put off having children of her own. She also had to take on several jobs just to make ends meet.

Ms. JACKSON: I was getting up at three in the morning, and I wasn't getting home 'til two in the morning. And you figure -- you think, "Why am I working this long, this hard? Why?" You're grumpy, you're irritable. The new family is not working. The old family is not working. It's all just a miserable environment.

HOLMAN: [voice-over]: There is no relief in sight for the Jacksons. Even after the arrears are paid off, they still will have to make monthly payments until these girls are 18, and Bill Jackson has been laid off again. But delinquent spouses who have not been caught yet may face an even more difficult future, for time is on the state's side. Once a judgement is reached, the state then has 40 years to collect back payments.

Mr. STONE: So if we wait until the child is 17 years and almost 18 to get our judgment, we can becollecting on that judgement until the child is of an age where it can be receiving social security.

Reporter: So it's not like the seven year statute of limitations.

Mr. STONE: No. There is no statute. Unlike love, child support is forever.

HUNTER-GAULT: Here with us to follow up and debate the fairness and effectiveness of the nation's child support laws are Tom McGreevey, a member of the Fathers' Rights Association of New York, and Marsha Levick, a lawyer from the National Organization of Women Legal Defense and Education Fund.

Starting with you, Ms. Levick, just how serious is the problem that the word isn't getting out about the federal child support laws?

MARSHA LEVICK, National Organization of Women: Well, I think that it's important to bear in mind what the issue is here and what the gravity of the problem is. The impetus for the federal legislation was $3 billion or $4 billion in unpaid child support. Every study that has looked at the basis for the lack of payment by fathers has pretty much indicated that fathers who are financially able to pay are as likely not to pay support as fathers who aren't in a financial position to pay.

HUNTER-GAULT: That's not what he just said.

Ms. LEVICK: I understand that. But most studies, I think, will confirm what I've just said. So that if there are other concerns that fathers or mothers have that -- about issues arising out of divorce, such as visitation, I think that those matters can be dealt with separately. Child support is an epidemic problem for this country. The federal legislation is a critical first step forward in trying to resolve that problem.

HUNTER-GAULT: What about that?

TOM McGREEVEY, Fathers' Rights Association: The federal legislation recognized that the importance of insuring that the non-custodial parent feels like a parent by telling the states to form child support commissions which were supposed to look into that problem, and specifically said that they should look into that problem. New York State assigned that job in the New York State Division for Women, which was on record as opposing joint custody. It was on record as being actually a pro-feminist, pro-women group, and we think it should be taken away from that, although it's now dissolved. But it should be given to a group who's going to look at the needs of the children -- not the needs of the women and children, and not the needs of the women.

Ms. LEVICK: Well, I think that, first of all, the whole issue of developing commissions to create guidelines for child support is one that we really haven't seen the end of yet. Those reports aren't really due until 1987. So again, I think it's premature to say it's not working. I also think that the issue of joint custody is really a red herring here. Joint custody is a remedy for many parents. It's also not a remedy for many parents, because a very unique set of circumstances have to be present in order for joint custody to work. Where it doesn't work, there need to be other mechanisms for insuring that support gets paid.

Mr. McGREEVEY: Where joint custody doesn't work, it still works much better than sole custody. You know, we're not saying that the joint custody is going to take away all the problems. But certainly we have to start focusing on what the children need, not on what the mother needs, and not necessarily on what the father needs.

HUNTER-GAULT: But on the child support issue specifically, you believe -- now, Ms. Levick just said that she felt that that should be separated out from all these other things.

Mr. McGREEVEY: The federal government, when they enacted this law, said that it couldn't be separated out. And they directed the states to study reasons why people are not paying child support. Why does a normally law abiding citizen become a criminal after a divorce?

HUNTER-GAULT: Why?

Mr. McGREEVEY: Because they aren't being allowed the access and the input to raising the child. They're being told that --

HUNTER-GAULT: So you -- wait a minute.

Mr. McGREEVEY: -- this is your sole responsibility: to provide money to this person. Not necessarily -- you know, they're saying it's for child support. We don't think it's all for child support.

HUNTER-GAULT: But as the woman in the tape said, she said it's very difficult to understand why any man would not support his children.

Mr. McGREEVEY: First of all, you're -- you showed a woman who's not making ends meet. I didn't see -- you saw -- you showed a man who's not making ends meet either. But you're not showing that men have to sometimes take on three jobs just to live and pay support. They're not having time to see the children. One of the answers has to be that both parents, after a divorce, have to take on that responsibility of raising the child. The mother will also have to get a job.

HUNTER-GAULT: But isn't it the case, thought, that the vast majority of the people who have custody of the children are the women?

Mr. McGREEVEY: Oh, definitely.

Ms. LEVICK: Well, I think it's somewhat ridiculous to suggest that women should be required to get jobs if in fact they're the custodian of young children.Our society doesn't yet make it that easy for women with young children to get jobs. Again, I think that that's somewhat missing the point. I think that where there is, again, a concern about visitation, the fact that the federal legislation envisions and requires commissions to look at both problems together doesn't mean that they need to be dealt with together. It simply means that solutions to all problems need to be provided.

HUNTER-GAULT: But if you --

Mr. McGREEVEY: But the states should look at the problem as directed by the federal government. And certainly New York State didn't do that.

Ms. LEVICK: Yes, but it's ridiculous to require or to assume that a child whose parent may be interfering with visitation -- that that's a legitimate reason to deny that child needed financial support. You're taking away that child's stability.

Mr. McGREEVEY: No, I'm not saying that. I'm saying that there should be a way to enforce -- not enforce visitation, because that's enforcing second class parenting. There should be a way where both parents become involved with the child in other than financial matters.

HUNTER-GAULT: And are you saying that that's the source of the lack of -- of the lack of payment to mothers -- the fact that fathers don't have visitation rights or --

Mr. McGREEVEY: That is a source of it.

Ms. LEVICK: It's not the main source.

Mr. McGREEVEY: It's is a source.

Ms. LEVICK: It's not the sole source.

Mr. McGREEVEY: No, it certainly isn't the sole source, but before you start using punitive measures to get that support, you should be looking at non-punitive encouragement methods.

HUNTER-GAULT: All right, the woman in the taped piece -- one of the women -- says that if you leave the present law alone, it will eventually shake down in a few years and will be seen as fair and equitable and effective. What's your response?

Mr. McGREEVEY: Oh, absolutely not. Because if you don't enforce the rights and responsibility of both parties, you're not -- by definition, it's not fair and equitable.

HUNTER-GAULT: Well, what would you see doing?

Mr. McGREEVEY: I would see changing the other laws to make it so that either parent -- or both parents, preferably -- after a divorce have the right to be involved with the child on a regular and frequent continuing basis.

HUNTER-GAULT: And who's going to see to that that that happens?

Mr. McGREEVEY: They don't see to it now. I guess that they would have to set up something similar to the child support enforcement units. Hearing office -- I'm sorry.

HUNTER-GAULT: That's all right.

Ms. LEVICK: Well, there are mechanisms to deal with that. We have a family court system in every state that is already set up to both develop custodial orders, develop visitation orders and support orders, and also to enforce them. Again, I think that what the federal legislation's doing that we're talking about here is primarily dealing with issues of support enforcement. There are mechanisms for addressing problems of visitation enforcement. And I think that also the point about trying to insure the right of both parents to be involved with their children -- that is a right that currently exists. If there is dispute about the way in which courts are issuing orders, if there is a dispute about the amount of child support that is being awarded, if there is a dispute about the amount of visitation that has been awarded, parents have the ability now to go back into court to seek modification.And they're not using those mechanisms.

Mr. McGREEVEY: They also had the right before to go back into court to enforce child support.

Ms. LEVICK: And it didn't work.

Mr. McGREEVEY: Right. And neither is the other.

Ms. LEVICK: Well, I'll tell you though, the numbers of complaints that most folks see in terms of support and visitation -- the complaints about the lack of support enforcement far outnumber the complaints about visitation. Support is the problem.

Mr. McGREEVEY: Well, by whose definition? A report in Marriage and Divorce Today where they interviewed the children of divorce after a period of time, the children -- 60% of the children -- recognized that the custodial parent was trying to keep the non-custodial parent out of their life. So by whose definition are you saying that?

Ms. LEVICK: Well again, that's no excuse for denying the child support. I don't think we want to encourage --

Mr. McGREEVEY: It's no excuse --

Ms. LEVICK: -- people to violate laws.

Mr. McGREEVEY: Neither is an excuse for the other, but we can't address one side of the problem, and we can't address it halfway and make it unfair and then expect somebody to pay the money that they probably shouldn't be paying.

Ms. LEVICK: Well, if there's a support order, it needs to be enforced, and it needs to be complied with. If there's a second problem, then that should be looked at as well, but separately.

HUNTER-GAULT: Is there any way to lower the temperature -- not of this debate, but of the issue itself? I mean, in the end you are dealing with children. And, as you say, the children recognize what's happening. I mean, would getting it out of the courts and away from the lawyers perhaps be a way of reaching a more equitable solution -- a fairer solution to the problem?

Mr. McGREEVEY: We feel it would be. But I'm sure she has another --

Ms. LEVICK: No, I'm not sure that that's either the solution or not the solution. I think that divorce cases are inherently heated and often very difficult for all of the parties involved. And the issues that we've talked about today are ones that cause everybody a great deal of pain and agony in many situations. I think that they're all issues, though, that do need to be addressed. In some instances mediation, as an alternative to the courts, is a good response. In other instances it doesn't work. In some situations joint custody -- joint physical custody where both parents have equal access to the child -- is a wonderful ideal to be striven for. But in some situations it won't work. I think we need to create systems that can take into account the full range of options and try and create the best solution for both parents and children.

HUNTER-GAULT: But what do you do in the meantime?

Mr. McGREEVEY: We -- well, just to add to what you asked before, we feel that the system is not -- is taking a bad situation and making it worse. There are certainly ways that it can deal with the problems of divorce better than it's doing now. And one of them would have to be to take it out of -- away from lawyers and away from the court system, and hopefully to a mediation type of arrangement.But you have to make sure that when people are going in to mediate, both people are going in as equals. And that's not going to happen until we have joint custody and until we have equitable divorce laws. And we don't have that now.

HUNTER-GAULT: All right. Well, thank you very much, both, for being with us -- Ms. Levick and Mr. McGreevey.

Ms. LEVICK: Thank you. Finding America

LEHRER: Finally tonight, an essay by our regular essayist from Kansas City, Jim Fisher of the Kansas City Times. It's the third in our Liberty Week series of essays on finding America.

JIM FISHER: This is Dalton -- almost smack in the middle of Missouri between Kansas City and St. Louis.Two businesses -- a grain elevator at the west end of town, a post office on the east end. In between are the old general store, the clothing store, the pool hall -- all closed.Ditto the old drugstore, which now leans a little. Rural America: boarded up windows, empty stores. Nothing really new in that. The current farm crisis didn't do this to Dalton. What did was bigger farms, bigger machinery, the people simply moving away. Still, it's a nice little town. Seventy-six people live here.

That's Paul Lee Myer in the post office, which is in the old bank of Dalton. The bank went belly up in the 1930s. Mrs. Myer likes plants -- a homey touch. And on the surface, that's about it. Except a week or so ago folks came back for Ladies' Day at the First Baptist Church atop the bluff. A reunion -- one of two held each year. Men's Day is in the fall. Ladies' Day is always the fourth Sunday in June -- a traditional homecoming for black churches in rural areas. That's right -- black folks. Half of Dalton is black, but 80 people came -- their number swelled by people from Kansas City and Columbia, Brunswick and Keytesville. All come home to Dalton for church, for fellowship, for memories.

You've never met a nicer man than Arnold Thornton, deacon here for years and years. Over there is Roland Hughes. He's been on the town council for 16 years. His brother is mayor of Dalton. And that's Lenora Moore. Ask anybody about her husband Roy. He fixed cars, television sets, radios for just everybody all over Charton County. There a myth now, maybe because of television, that almost all black Americans live in metropolitan areas -- cities. Well, maybe now. But it didn't used to be that way.

Back when farming was the way most made their way, there were black people on the land -- sharecroppers and fieldworkers clearing it, digging potatoes, plowing fields, cussing balky mules. And people, for the most part, got along -- black and white.Nobody says this was a utopia. The central social problem of American history -- race -- existed here. Still, the people made due. Life in rural America, before electricity and paved roads and cars and propane and big farm implements, was hard enough. And Dalton was small town America. It was home.

And on this Sunday it wasn't that much different from other Sundays in other Junes -- a time to listen, to move the humid air with fans, to feel the benediction. And then to walk into the late afternoon sunlight, each knowing they'd been home again.

In a way what happened here in Dalton wasn't that much different than what's going on this week in New York. Oh, there weren't any fireworks, no tall ships, no celebrities, no speeches, no statue in the harbor. But in the context of Dalton, what would those things mean anyway? Ancestors of Dalton folks didn't come through Ellis Island. There was no lifted torch for them, no lady in the bay. Not at Annapolis or Charleston or Mobile. Only long-ago auction blocks.

Yet somehow they survived, with the help of their own and their churches -- a church that here in Dalton stands high on a bluff -- as high as the Statue of Liberty.And then there was the land rolling out seemingly forever -- land that tells all of us, really, what this Statue of Liberty Week is all about for everybody. It's about coming home.

LEHRER: Again, the major stories of this Thursday.The unemployment rate did the unexpected in June. The Labor Department reported it dropped .2% from 7.3 to 7.1%. And President Reagan said he planned to write Soviet leader Gorbachev soon about another summit and expressed the hope it will eventually come off. Good night, Charlayne.

HUNTER-GAULT: Good night, Jim. That's our News Hour for tonight.We'll be back tomorrow night. Have a nice Fourth of July.I'm Charlayne Hunter-Gault. Good night.