The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Thursday, the House voted for Pres. Bush's proposed cut in the capital gains tax, the President and the nation's governors ended a two day education summit. Former Philippines President Ferdinand Marcos died in Honolulu. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, we examine the results of the education summit with Education Secretary Lauro [Focus - Education Summit], Governors Ray Mabus of Mississippi, and Tom Kean of New Jersey, High School Principal Deborah Meier and Ernest Boyer of the Carnegie Foundation for the Advancement of Teaching. Then come excerpts [Focus - Capitol Gamesmanship] from today's House debate over cutting the capital gains tax, and we close with the problems at FHA as seen by Comptroller General Charles Bowsher. NEWS SUMMARY

MR. LEHRER: Pres. Bush got his way with the House today on capital gains. The House voted 239 to 90 in support of cutting taxes on profits from stocks, bonds, real estate, timber and other assets by up to 40 percent. 64 Democrats voted with the President and against their leadership, which had claimed the plan was a giveaway to the rich. It now goes to the Senate. Today's vote drew this reaction from House Minority Leader Bob Michel and House Speaker Tom Foley.

REP. THOMAS FOLEY, Speaker of the House: If this should become law, and I underline "if", because it's not clear that it will by today's vote, if it should become law, I think it will become budget agreements more difficult and will have a negative effect on the deficit, and I think that's one of the reasons we strongly opposed it.

REP. BOB MICHEL, House Minority Leader: This was a watershed for us to have won on a very key issue here that really marked the division of philosophy as I tried to portray it certainly on the floor of the House and to have 64 discerning Democrats to come join us on this issue is a really good benchmark for us right now as we go through the balance of this session on a number of key issues.

MR. LEHRER: We will have an extended excerpt from the pre- vote debate after the News Summary. Robin.

MR. MacNeil: Pres. Bush and the nation's governors ended a two day summit on education in Charlottesville, Virginia, with calls for new national goals to upgrade American schools. The President told the Governors the American people were ready for tougher standards, more competition, accountability, and tests of student and school performance.

PRES. BUSH: Business as usual is not getting us where we need to go. So when hallowed tradition proves to be hollow convention, then we must shatter tradition. The polls show what every PTA board member already knows. The American people are ready for radical reforms. We must not disappoint them.

MR. MacNeil: After the News Summary, the education summit will be our principal focus. The White House announced today that Pres. Bush will be in South Carolina tomorrow to survey damage from Hurricane Hugo which struck there a week ago. Much of the coastal region remains without electricity and some areas still have no drinkable water. Congress today passed $1.1 billion in disaster relief for South and North Carolina as well as Puerto Rico and the Virgin Islands, which also sustained heavy damage.

MR. LEHRER: Another federal housing program is in trouble. Comptroller Gen. Charles Bowsher told congressional committees yesterday and again today that the Federal Housing Administration lost$4.4 billion last year. He said half of it was due to fraud and mismanagement. The FHA insures home mortgages. Bowsher was reporting on the findings an audit by the General Accounting Office which he heads. We'll have a News Maker Interview with him after the News Summary.

MR. MacNeil: Braniff Airlines filed for bankruptcy today for the second time in seven years, saying it wanted to operate a smaller and more efficient airline. The petition for Chapter 11 protection from creditors was filed at 2 in the morning in Orlando. Braniff laid off 2700 employees and canceled most of its flights, leaving hundreds of passengers stranded. The airline says it wants to reduce the number of cities it serves from 36 to 11. Braniff lost more than 30 million dollars in the first half of the year.

MR. LEHRER: There have been firing range accidents at two U.S. army bases. Two soldiers died and 23 were injured when a round from an artillery howitzer overshot its target at Ft. Sill, Oklahoma. The shell exploded in the middle of a formation of troops. The other accident was at Ft. Stewart, Georgia. Two soldiers also died there. It involved a 4.2 inch mortar. No more details are available.

MR. MacNeil: Colombia's embattled Pres. Virgilio Barco was in Washington today to ask the U.S. for further help in his war with drug cartels. Under heavy security he met with Drug Czar William Bennett at the Colombian Embassy. Bennett said Barco discussed possible U.S. help in promoting Colombian exports, issues they were to take up again at a late afternoon meeting at the White House. In Bogota, two people were killed and six hurt in an overnight bomb attack. Earlier today, another bomb exploded at a bank, injuring one person.

MR. LEHRER: The former prime minister of Greece was ordered to stand trial today on corruption charges. The Greek parliament voted the order against Andreas Papandreou. He is accused of participating in a $200 million bank embezzlement scheme. Papandreou said the evidence against him was weak. He made a personal appeal to the parliament before the indictment. The 70 year old Papandreou was a socialist who served eight years as prime minister. His party was defeated in elections last June.

MR. MacNeil: Finally in the news, former Philippines Pres. Ferdinand Marcos died today in Honolulu at the age of 72. He died of cardiac arrest after a long battle with heart, lung, and kidney ailments. He died without standing trial on U.S. charges that he looted the Philippines Treasury of billions of dollars. His wife, Imelda, who is free on bail, was at his bedside. The couple fled to Hawaii in 1986 after Pres. Corazon Aquino charged that Marcos was behind the murder of her husband. Today while saying she would not allow Marcos's body to be returned to the Philippines, Mrs. Aquino had this reaction.

CORAZON AQUINO, President, Philippines: Speaking for the nation I represent, I can say that this man touched the life of every Filipino who was his contemporary as no other Filipino leader did before him. His rule changed our country beyond recognition. In what ways he changed it, I leave to others and to history to describe. For such a loss must transcend for his family mere politics and history and the mere opinions of men and women. No one should dredge on the dignity of this painful moment in the life of a family. I personally condone deeply with the family he leaves behind, with all sincerity, for I and my children know the pain of such a loss.

MR. MacNeil: That's our News Summary. Now it's on to the education summit, the capital gains debate, and new HUD revelations. FOCUS - EDUCATION SUMMIT

MR. LEHRER: We go first tonight to the education summit. The governors of the 50 states and Pres. Bush met for two days in Charlottesville, Virginia. They ended it today with a joint call for tougher new goals and standards for America's schools. Here's an excerpt from Mr. Bush's closing remarks.

PRES. BUSH: The spirit of our summit is not who will get the credit. The spirit of this summit is how can we get results. We are here to put progress before partisanship, the future before the moment, and our children before ourselves. I see the day when choice among schools will be the norm, rather than the exception, when parents will be full partners in the education of their children. Too many parents have come to see education as a service we can hand over to the school boards, in much the same way we expect our cities to provide electricity or water. But education is not a utility, not something to be delegated. Education is a way of life and education reform is an urgent responsibility for every parent, every student, every community. Some offer a completely different answer, spend more money alone, and at the federal level we have asked Congress to provide nearly $1/2 billion in new funding for 10 worthy programs. Your states may also choose to spend more, but to those who say that money alone is "the" answer, I say that there is no one answer. If anything, hard experience teaches that we are simply not getting our money's worth in education. Our focus must no longer be on resources; it must be on results.

MR. LEHRER: Now some other summit assessments. First those of two of the governors, Republican Tom Kean of New Jersey and Democrat Ray Mabus of Mississippi, and the Secretary of Education, Lauro Cavazos. He joins us from the Old Executive Office Building of the White House. Gov. Mabus is in Charlottesville. To you first, Gov. Mabus, the comments today of William Bennett, former Education Secretary, current drug czar, he said that you governors spoke pap at this summit, standard Democratic pap or standard Republican pap, is he right?

GOV. RAY MABUS, Mississippi: I think he's absolutely dead solid wrong. I was at these meetings. Every governor came prepared, every governor was ready, every governor is on the front line of education. And I think frankly that Sec. Bennett ought to be ashamed of himself for the way that he trashed a process that a whole lot of people, including his boss, took very seriously. I'm confident after hearing Pres. Bush's speech that the administration doesn't share those views and I don't think any governor does.

MR. LEHRER: Gov. Kean, what's your view of what Mr. Bennett said?

GOV. THOMAS KEAN, New Jersey: I think Bill was wrong on that one. It just was an extraordinary process. I don't know in my lifetime if a President of the United States has spent so much time on any subject. I mean, we got over 24 hours of the President's time. He was in every session. He was participating. He was asking questions. He was showing knowledge and trying to get more knowledge. I mean, it was an extraordinary event to me.

MR. LEHRER: But Mr. Bennett's criticism was of you all, was of you governors. He said that you didn't come with knowledge of what works in education. He said you spoke from prepared notes that other people had written for you -- I don't mean you personally -- but you governors. What's he talking about?

GOV. KEAN: I don't know what he's talking about because I don't think we were at the same meeting, at least it doesn't sound like we were, because I've been at this a long time, this education reform business, and it started maybe with a few governors being interested, and then grew after the Nation at Risk and three years later The Time for Results. I've seen the interest of governors grow. We had 50 governors there who were education governors, 50 who were knowledgeable, 50 who were concerned, 50 who cared, and 50 who were not going to do it on a partisan basis. They weren't there as Democrats, they weren't there as Republicans. They were there as people to work with the President and improve schools, and I thought it was extraordinary.

MR. LEHRER: Gov. Mabus.

GOV. MABUS: Fifty governors who have been on the front lines for years and years now, fifty governors who have been taking the lead in education reform, and like Gov. Kean, I don't know what meeting Sec. Bennett went to because it was an extraordinary thing in terms of the knowledge that was there, in terms of some of the programs that were talked about that are working out around the country. Mississippi, for example, was the first state in the union to pass an education reform act in 1982, six months before A Nation at Risk came out. We're in the process of doing it again, of meeting a lot of the goals that we talked about here, and for him to come in and denigrate this whole process with a couple of real cheap one liners for a 30 second sound bite on TV I think was just not appropriate and I hope he doesn't do it again.

MR. LEHRER: Sec. Cavazos, was Mr. Bennett speaking for the administration?

LAURO CAVAZOS, Secretary of Education: Absolutely not at all. I think that that was one of the finest sessions with the governors, the President, sitting there and addressing perhaps one of the most critical issues that we face in America today and that's that of education. I thought it was an excellent meeting. We addressed the issues. The governors were knowledgeable. Certainly the President presented his viewpoints in a most realistic and knowledgeable way. I was delighted with the whole session.

MR. LEHRER: As Secretary of Education, did you come away from this two days with anything that you didn't already know? Did Governor A or Governor B or Governor C have anything to say that was news to you about education?

SEC. CAVAZOS: I think all of us have been talking about roughly the same thing over the past year that I've been in this office. We've been addressing restructuring many many times, accountability, flexibility. We've talked about choice at great length and measuring our goals. Certainly these are very very positive things that comes forth. I think that the most important thing is coming together as a nation to address those issues and getting all of those viewpoints. In the sessions that I participated in, I thought they were remarkable sessions, a lot of candor. Good work was done. So if you say did anything new come from it, I think that the thing that really came from it was that the nation focused on education and that to me is I think a major step.

MR. LEHRER: Do you agree with that, Gov. Kean, that the accomplishment of the summit was more the fact that it was held than anything specific that came out of it?

GOV. KEAN: Well, that's one big accomplishment. It's not just that the governors were there, but because the President was there, we didn't have just a good program like this, we actually had the anchors from the networks there. We actually had, we moved from page 40 up to the front page of major newspapers. There were news weeklies there which will be headlining this in the coming week. Because of that, the nation has focused on the need to reform schools. That's very important. But beyond that, everybody thought that would happen, and everybody was excited about that, what happened beyond that is we reached certain goals, we agreed on a number of things. Given the fact of the regions and the parties and everything else, there was an extraordinary agreement on things like choice and alternate certification and things which people have thought to be controversial and yet governors said hey, we've got to change these things, let's move ahead.

MR. LEHRER: Which of those goals, there were seven of them altogether, preschool education, educators more accountable, keep drugs out of the schools, on job education for older folks, do something about literacy, reduce state and federal regulations and reduce the dropout rate, which of those is the most important to you, Gov. Kean?

GOV. KEAN: For heaven's sakes, they all go together. I mean, you can't not do any of those things and have a successful education system, and there were some more that we talked about that weren't even in that final list, about higher education and the needs there. All of those things have got to be done, they hang together, the system hangs together. The most important I think is restructuring. I mean, the schools were designed for an agrarian economy. They don't work. We've got to restructure the schools in a meaningful way to educate children.

MR. LEHRER: Gov. Mabus, do you agree with the President when he said in that excerpt that we ran and Gov. Kean has just echoed it in different words, that the American people are ready for radical reform, radical reform of the schools?

GOV. MABUS: I certainly do. I think that the American people know that we can't stand for the status quo anymore. I think they're tired of schools that they don't have enough control over, that teachers don't have power to teach, that they've spent a long time training to do. I think they know that we don't compete against each other anymore, that we don't compete state to state, that we compete with the world now, and I think that they know that the one thing that is going to make our economy go is our educational system and that the most important thing that we is our children and that we've got to make that our first priority and that we can't stick with a traditional school anymore. We found that education doesn't start with the first school bell. It doesn't end with a diploma or with graduation, that it's a life long process and it's got to be an innovative process, that the decisions have to be made where the teaching is being done, and that we've got to concentrate on outcome, on what our students know and on how well they can think, not so much on input, not on what textbooks are being used or class size or things like that, but on how our students do when they get out, can they compete in the world, because today students from Mississippi and New Jersey are competing with people from France and England and Japan and Korea, and we're going to have to meet that challenge. The world has changed, the stakes are a whole lot higher, and I think that's one of the things that really came out of this summit, it's a thing that governors and legislators and parents and teachers have been saying for a long time, and I applaud the President for putting a focus on it as only a President can do, raising the sense of urgency, raising the sense of need that so many governors and so many legislators and so many parents and so many teachers have felt for years.

MR. LEHRER: Sec. Cavazos, what happens now? As Secretary of Education, the President has held an education summit, the 50 governors were there, he was there, you were there, a lot of other people were there, now what do you do as Secretary of Education?

SEC. CAVAZOS: Well, next really starts the groundwork to move these ideas ahead. No question that we have a game plan. It's going to be up to the Department of Education and certainly the White House and working with the governors to lay out the strategies that we must have to bring people together. We have to also gather viewpoints from educators, from parents, from the business community, we need to listen to all of these as we develop these goals, and so that what happens next is a lot of hard work to implement these ideas, but I want to make one thing clear. This is not going to happen overnight. Sure we could set these goals, have a direction, but I really believe to change the system and to set back the educational deficit we have in America today we're talking about at least a decade.

MR. LEHRER: Mr. Secretary, let's be -- one specific -- at the top of the list on the goals is the preschool aspect and many of the governors I know spoke up specifically about this. On the Head Start Program, they want more funds put in Head Start and yet the President seemed to indicate that he did not support that. What then will happen with Head Start, and why is at the top of the list?

SEC. CAVAZOS: Certainly, Head Start is a critical program. Any program that you start in terms of early childhood education is vital and I think it's going to pay off down the road. A lot of studies have demonstrated that it will and the President has also supported increased funding for the Head Start Program, has proposed that for the coming year, but let me point one thing out. We really must look at this as a long-term investment, and we really cannot come in there and say we're going to move a lot of money immediately. It's not available. The budget cannot stand that kind of effort. Now certainly we recognize that it's an outstanding program and the best that we can do is to work in concert with Health & Human Services, that's the department that Head Start is in, the Department of Education and working with the governors of the states to really try to fund early childhood education, not only in Head Start but a variety of other areas that we need to look at as well.

MR. LEHRER: Gov. Kean, what do you want Sec. Cavazos and the President to do now? They've had a big summit. Now what?

GOV. KEAN: Well, I want them to work with us. I think first of all the President was the first one I think to come out for expanding Head Start and the President has taken the lead in saying this is what we should do and I think he's come out for a program that will fund Head Start for all four year olds, which is great news for the governors and exactly what we were talking about in this summit. What we want right now is for the White House and the administration to work with as governors.

MR. LEHRER: What does that mean?

GOV. KEAN: Well, keep the dialogue going, keep the conversation going, work on the kinds of the things we started on, because see the exciting thing is these were 50 elected people and a President. They agreed not only to set goals but to be judged by those goals. You have for instance the world's report on economic statistics when they come out. We're now going to have educational statistics. We have agreed to be measured against what's going on in Japan or Great Britain or France. We've agreed to be measured against each other and how we've reduced dropouts and what we've done for early childhood education and all the other things on the list. We will now how we're doing and we'll be judged on that. That is an amazing step forward, I think.

MR. LEHRER: Do you agree that's a big step forward, Gov. Mabus?

GOV. MABUS: I do. I think that what happens after this is a whole lot more important than what happened here. To put it in the language of students, we've got to walk it like we talk it. If all we do is have photo op and agree to some things and then go back and forget it, we haven't done a whole lot. States aren't going to wait. Mississippi is pushing the second phase of education reform with a program called Mississippi's BEST, Better Education for Success Tomorrow. We have a lot of these same goals that we set several months ago for ourselves to reach by the year 2000. It's exciting to see the whole nation doing this, to have a partnership, to make sure that everybody is judged. We've been out there, legislators, school people, governors, being judged on education for a long long time, and it's nice to have a national goal and it's nice to be in a partnership to do that, and it's nice that the President has committed to the historic federal role particularly of early childhood education. In states like Mississippi, and in a lot of states we have children that show up at school that have never seen themselves in a mirror, that don't know their colors, don't know up from down, and never played with another child, and the only thing that little fellow wants to do is go home. Now he's not going to go home when he's five year old, but he's going to go home. He's going to drop out. You're going to have a dropout at fourteen or fifteen, and we're all going to pay for it. He's not the only one that's going to, and we've got to make sure, states and the federal government, that that five year old has the same opportunity as every other five year old, that it doesn't matter where you live or who you are, and I think it's important that we've agreed to be judged, that we're going to have a national report card, that the federal government is and the state governments are, Mississippi students can compete against anybody in this world, and I welcome the chance to be measured and to have school districts and schools measured so that parents and government and the business community can know how individual schools are doing and that they are improving. Every school ought to improve every year and I think that's a major step forward and I'm happy that we came out with that today.

MR. LEHRER: Mr. Secretary, can you devise, or is there already a system in place that can judge and compare the schools of New Jersey say with the schools of Mississippi in a way that politically and educationally makes sense?

SEC. CAVAZOS: I think that that's a very very good question. At the present time we do not have that kind of system, however, we have already created within the Department the center that would be gathering the national statistics in terms of education. We've put that in place very recently. We also are having assessment, national assessment for educational progress that we compare state to state. I've asked for a real quantitation of our efforts in education. You must have the quantitative aspect into this. We can no longer guess or estimate or say about. We must have some firm data, otherwise, we're going to set our goals but we know whether we're achieving those goals unless we do some very very good evaluation and have the statistics, and we're going to get them.

MR. LEHRER: And are you prepared, Mr. Secretary, to keep the heat on the Gov. Mabuses and Keans of this world?

SEC. CAVAZOS: I guarantee they're my friends, we work well together, we share the same enthusiasm for education, but we really, all of us will work hard together to move this thing ahead. As far as we're concerned, it's the vital issue for America.

MR. LEHRER: All right. Thank you. Robin.

MR. MacNeil: We get some reaction to the summit now from two people with hand on experience in education. Deborah Meier is the principal of Central Park East High School in New York City's Harlem. Ernest Boyer is the President of the Carnegie Foundation for the Advancement of Teaching and former Commissioner of Education in the Carter administration. He joins us from Raleigh, North Carolina. Mr. Boyer, all these three gentlemen sound awfully upbeat about the summit. Do you feel that way?

ERNEST BOYER, Carnegie Foundation: I do, Robin. I knew that this would be a success in terms of the symbolic value that it would send to the nation. It would tell America that the President with all of the governors put education at the top of the agenda, so I was optimistic going into it, but I must tell you the report that I've heard just this afternoon, and now reinforced by the governors and the secretary, caused me to be convinced that this has been a remarkable, I know it's a thread bare term, but I'll use it, perhaps historic achievement.

MR. MacNeil: Why? What has made it an historic achievement?

MR. BOYER: Well, first of all, as you just heard, for the President to devote this much time to a single issue, joined with all 50 governors, who I agree, as Tom Kean said, have been the leaders in this crusade from the very first, has to be remembered as some important footnote to history. I also think we should put this in some kind of historical perspective. Up until World War II, this nation really did believe in local control of schools and we thought our schools were working, but then came Sputnik, when we were threatened we thought militarily, and then the Japanese put a Toyota into orbit and we thought were threatened economically. And suddenly the attention of the nation shifted from local control to the issue of national results, and I think if you look at the recent Gallup Poll, our people are saying we want to demonstrate that these schools are working, they're saying we're not willing to put $180 billion into schools and not have some evidence that there are results. Now I think that this is both an important opportunity and a dangerous moment. We do not want a Federal Ministry of Education, nobody wants that. On the other hand, we now believe 83,000 schools can't do it all alone. Our job is to develop a national agenda that then frees up the vitality of the local schools which perhaps brings me to the most important point I want to make, and that is if all of this effort doesn't convert into giving teachers more authority, more creativity at the local school, and in the end, providing of course, parental involvement with their children, then I think we have built a suffocating system that does not achieve the outcomes that we, indeed, which to accomplish, so what we're struggling with now in fits and starts is to develop a national agenda, at the same time wanting to free up vitality at the local school. I'd like to also underscore what the President said about parental partnership. Truth is we can't have an island of excellence in a sea of indifference. And if we don't find a way for parents and communities and churches and corporate America, as well, to give reinforcement to the local schools, no matter how hard we try, principals and teachers can't do the job alone, but my reaction, to come back to your initial question is, this has been a truly remarkable two days. I think symbolically it's been significant, but I think the substance has been unusual too and I celebrate the President and the governors for what they've accomplished in Charlottesville this week.

MR. MacNeil: Ms. Meier, as somebody who's really in the trenches, are you as euphoric as these gentlemen are?

DEBORAH MEIER, Central Park East Secondary School: I've been trying to think what does it really matter back in the school, and I think the part, I wasn't there, and I spent the whole day in school, so I haven't really read with great care everything that went on, but the assumption that it would be a radical reform to put on a national scale some of the things that have not worked on a local and state basis worries me. We've had decades of tougher standards talk, and we've even instituted a lot of tougher standards. We've instituted a lot more assessment, at least it pretends to be very accurate. Kids find out they're 4.2 or 3.6, every city is inundated and has been for a very long time as long as I've been in teaching with a great deal of very precise measurement. I don't think you can accuse us of fuzzy language about how our kids were doing. In fact, I think we've been pretending to have an enormous amount of statistics and data and I think it's not, I love the national attention. I think there's no question that there's a great deal of agreement about goals. I think that agreement was with teachers and parents for a long time. I don't think any of us have doubted for a long time we want our kids all to be good readers, to be writers, to be thinkers, to be problem solvers, to know how to work with other people, but if kids have forgotten the date of the civil war, it wasn't because we weren't tough enough in our standards and it wasn't because we forgot to teach it, it was because we forgot that we haven't designed schools to be user friendly to parents or kids, and I agree with the comment that I think Gov. Kean made about the importance of the restructuring.

MR. MacNeil: So in other words, putting the tough standards that people like you have been trying to implement over the years onto a national level and trying to encourage all the states and all the school districts to rise to those standards, that is not going to do it?

MS. MEIER: I think that misses the point that as teachers and parents we've been trying to do that desperately. I have two children of my own and one teaches -- and I apologize to use this as an example -- but one of them teaches in a very nice, very affluent community and one teaches in a very tough city with an enormous amount of housing and employment problems. They both teach elementary school. They both have believed in high standards and being tough and caring a lot and all that stuff since they started teaching, and I think the teachers in their schools are equally dedicated and one of them is getting terrific results and one of them is getting very poor results. One of them has 33 kids in his class and one of them has 22. One has an assistant, one has an art teacher, a music teacher, lots of time for a teacher to do that stuff we talked about, being a parent takes time. Teachers need the time to talk with each other. They need some freedom to develop their own assessment. They need to be able to stop and think how can we really assess our work, and the answer may not always be in 4.2s and 3.6s.

MR. MacNeil: So what is the answer? If it isn't setting national standards --

MS. MEIER: I think it's setting, I don't, I'm not objecting to saying we want all our kids to be good readers and writers. I think we've been saying that a long time. I don't think that's new, except that we're giving it more attention. That's good. I think we need a crusader in helping people think about the purpose of education, its democratic functions, its civic functions as well as its economic functions, and then I think we need to focus on the kinds of radical changes both in mind set because in effect there's a lot of schizophrenia in this country. On the one hand, we say we want teachers and parents to really work out the diversity of solutions to a problem. On the other hand, we want to hold them to I think a single way of measuring them. And if there are many ways of going about it, there are also many ways of measuring it. You can't measure my family's success on the same terms I can measure your family's success. They're both legitimate. There is one problem facing us and more than one good answer facing us. And I think that we need to look at, there is more than one good solution, and those solutions need to be, we need to work with the people in their communities and in their schools to examine and carry on this debate. The debate is what's so important and what I appreciate about this is that it's made this debate about the purposes and meaning of education and about people starting to look at their schools, and ask questions about them, ask them questions they have a right to ask. How am I doing? But there isn't a single answer to how I'm doing.

MR. MacNeil: Gov. Mabus, what's your comment on what Ms. Meier has been saying?

GOV. MABUS: I think Ms. Meier is right. I think decisions ought to be made down at Ms. Meier's level in the classroom, with the principals.

MR. MacNeil: Well, let me interrupt you and say how is --

GOV. MABUS: You've got to bring parents in, you've got to make sure that the whole community is involved in education. We've looked at teachers for too long for all the answers and they don't have them and schools don't have them. Parents have to be involved, the business community has to be involved. All of us have to be involved because we've all got a big stake in this and I think she's absolutely right when she says there may be a thousand ways to get there. There are. There are programs that are working all over this country. There are programs that are working in Mississippi today. There are programs that are working in Tom Kean's New Jersey today that may not work somewhere else, but they ought to be rewarded where they are. We ought to reward the Ms. Meiers of the world for innovation. We ought not punish her. We ought to make sure that that innovation gets spread around. We ought to make sure that people know about it, that people understand what causes success, but I do think when you do that, when you empower people at the local level, when you tell Ms. Meier it's your class, it's your students, teach them the way that you know will help them learn, teach them the way that you know they will be good citizens when they get out, that you have to measure it some way, that you've got to keep score some way or the other, because if students are coming out of school in Mississippi or New Jersey or New York, they're all competing in the same world, and they've got to have the same basis, they've got to be able to succeed, and I think it's the analogy to a football game. If you took down the scoreboard, nobody's going to pay much attention. And I think that this will keep the national debate on education, it will keep the national focus on there, and I know, as she said, that that's one of the things that educators and parents and a few governors and legislators have been out front for a long time, is making this the first priority, making this a matter of national defense, because it is, and it's our defense. It's what's going to make America strong.

MR. MacNeil: Let's discuss it in a context like that. National defense is at the center of a continuing debate about resources and it gets very larger resources. So does education. Mr. Boyer, the President said the focus must no longer be on resources, it must be on results. Can with all this new enthusiasm, can the nation move to a higher level of excellence simply by redistributing the resources it has now, or does it need larger resources in there?

MR. BOYER: I'd agree entirely, Robin, that it's not money first, I don't think we're going to get there by simply raising the budget. I felt for years that the problem of education was clarifying goals and then the resources I think will follow, but I do have to say, especially around early education, which everyone endorses, that we should be very clear that the Head Start Program can help disadvantaged children, and that if we would agree by the year 2000 we would have all children covered, I think that would be a clear and explicit objective and everyone would endorse. The sad thing is it's been 20 years since Head Start was approved by Congress to help disadvantaged three and four year olds and to this day, only about 20 percent of the children are being helped. That's been the level year after year.

MR. MacNeil: Gov. Kean, you said the President's proposals would cover all children, is that right?

GOV. KEAN: All four year olds. You can't do it all this year because of budgetary constraints, but that is the goal the President has --

MR. MacNeil: Mr. Boyer, do you see that it's going to cover all four year olds?

MR. BOYER: I didn't hear the exact figure. I would say that four year olds would be a wonderful beginning, but three and four year olds should be included so that by the year 2000 all eligible children. I think it's disgraceful to have little children not have availability to a program that we know works and further, if they don't get that Head Start, it's almost impossible to compensate for the failure later on. So it's simply a smart investment. So I would say money isn't the answer of course. You have to have goals, and you have to have inspiration, you have targeted objectives, but I think at least around disadvantaged children there will have to be more resources at the state and federal level, but let's get on with the objective. May I also add to Deborah Meier, who I've admired for years, she runs a wonderful school, my hope would be that as we clarify the goals, we could free up teachers and principals so they aren't covered by paper work, but rather held accountable for objectives. I think Deborah would agree that right now the reform movement is focusing more on process, we're imposing more and more paper work and procedures, and the outcomes are not clear. I'd like to see us agree on some simple outcomes, and then give to schools and principals and teachers freedom around their budgets, around the teacher scheduling, around the calendar, and say, develop creatively your own process, and we'll be checking on the objectives periodically. That would be the vital balance between local control and national results that I think would make a first class education system by the year 2000.

MR. MacNeil: Do you disagree with any of that?

MS. MEIER: It's more complicated than that. The term, the gathering of statistics in schools is partly what I'm spending all my time doing. We have tons of that data on exact measurement but we also know that we, it's conceivable. It's a long time away till I know of any kind of assessment that can answer in simple terms that are very sparse how am I doing. Now we can have a few indicators, drop-out, attendance rates, as to how we're doing, but when you're going to say to me that I can easily assess in measurable terms whether people are becoming thoughtful citizens, that whether people are really doing reading, writing, problem solving, and knowing how to work with others, I don't think that is easily measurable unless we go back to the game we've been doing for years now. We teachers are geniuses, you found out, at getting good statistics. Now the fact of the matter is in most of the cities in this country we've got all the kids above average. And we can play that kind of game or we can recognize that if we have small schools, if we have choice, if we have on-site accountability, to our own community, and if we have diversity, we can have sparser amount of data collection of results, then the results we're held to are the same kind of results that private schools have been held to and that families have been held to and that is how am I doing to my own community.

MR. MacNeil: I have to leave you there, Ms. Meier, and thank you, and former Commissioner Boyer, and Governors Kean and Mabus. Thank you. Jim.

MR. LEHRER: Still to come on the Newshour tonight, the House floor debate on capital gains and another serious problem in a federal housing program. FOCUS - CAPITOL GAMESMANSHIP

MR. LEHRER: Now today's big debate over cutting the capital gains tax. It happened in the House of Representatives as a prelude to a big victory for President Bush. Sixty four Democrats joined the Republican Minority to pass the Bush generated cut. His plan was sponsored in the House by Republican Bill Archer of Texas and Democrat Ed Jenkins of Georgia. The Jenkins Archer Plan would for two years cut the tax on capital gains from its current 28 percent to 19.6 percent. In 1992 the tax rate would go back to 28 percent but profits due to the general inflation rate would be tax exempt. The Democratic Leadership had offered an alternative plan that would expand tax deductions for IRA savings accounts and raise the tax rate for the wealthiest. Here are excerpts from today's floor debate about the two plans.

REP. BERYL ANTHONY, [D] Arkansas: People who invest, people who save their money and put in some type of property that would get a capital gains break are people who care about their future. They want to make their future more secure. They would like to sell that asset and once they sell that asset they would like to take and put more of the money in their bank account rather than the Treasury bank account. Under the Jenkins and Archer proposal that is exactly what would happen.

REP. MARTY RUSSO< [D]: History has proven trickle down never works so what are we doing again? Let's give it to the rich let's make them wealthier and may be, may be the next generation or the next generation will feel the trickle down. This is outright disgusting greed and don't paint it any other way.

REP. DON SUNDQUIST, [R]Tennessee: I deplore those on the other side of the aisle who are trying to make a class war out of it, pitching one group against the other. Today we have a choice that is very simple. We can extend IRAs for individuals, 84 percent of those make more than $50,000, 84 percent make more than $50,000 or we can reduce the capital gains tax where 74 percent make less than $50,000. It is that simple.

REP. BARBARA BOXER, [D] California: There are days when I clearly understand the difference between REpublicans and Democrats and today is such a day. Today is the day we make a choice between helping the average American Family or helping those who earn millions of dollars a year. It isn't difficult for me to make that choice even though I represent one of the richest districts in this country. But my people understand that selfishness does not help the economy. They understand that a good capital gains proposal would have attacked the deficit. Would not have added to it and I would have supported such a capital gains proposal. But this Republican proposal will add to the deficit. We can't afford to do that.

REP. TOM CAMPBELL, [R], California: Let me speak just a moment about Northern California because Northern California was mentioned by one of colleagues this morning a gentle lady from Northern California and she spoke about that region about which I know a fair degree. Northern California and Silicon Valley is composed of entrepreneurs, risk takers, who are willing to put their effort and their money on the line. Now there used to be a day when there was only place where risk would be rewarded in the World and that was the United States. That is no longer true. If you have a good idea and would like to see it developed you could take it West Germany, you could take it to Japan or you could keep in America. Taking it to West Germany and your capital gains will be taxed at zero percent. Take it to Japan and your capital gains will be taxed at 5 percent or keep it in America and if you are successful you will be rewarded with a 33 percent marginal tax rate.

REP. DAN ROSTENKOWSKI, [D], Illinois: The President and his economic advisors have simply abandoned all their principles. The OMB Director and the Secretary of Treasury give speeches against now nowism and the need for encouraging long term investment but they are actively supporting pulling out all the stops for a proposal that epitomizes short term instant gratification.

REP. ED. JENKINS, [D], Georgia: To those Democrats today that are going to vote for this because you believe in it, because it is good for your district, because you believe it is good for America. I tip my hat to you.

REP. DICK GEPHARDT, [D] Missouri: Back in 1986 there was a bi partisan agreement about tax reform. It was historic and now before the ink on the Bill is barely dry the President comes back to the American people and says let's break the deal. let's have the rate on capital gains again be lower. And so what was a historic compromise is now jeopardized if this proposal which is in the Committee Bill passes.

MR. LEHRER: President Bush called Congressman Archer after the vote to congratulate him. Part of that conversation was on an open press line and it went like this.

PRESIDENT BUSH: Well it sounds good. Were they surprised, was the leadership surprised?

REP. BILL ARCHER, [R] Texas: Well I haven't talked to them yet so I don't know but my guess is that they were surprised by the size of their loss.

PRESIDENT BUSH: Yes I would think so. I'll tell you I am displeased with Gephardt the way he made it so kind of personal.

REP. ARCHER: Mr. President I must tell you that I am in the press gallery right now with a whole lot of reporters. So I think that you should be alerted to that fact.

PRESIDENT BUSH: But just so they can hear you and not me.

REP. ARCHER: Well I am afraid they are hearing you too.

PRESIDENT BUSH: This was not a personal thing but for the Country but in any event well done.

MR. LEHRER: And that drew this response from Congressman Gephardt.

REP. GEPHARDT: I respect the President's motives and his beliefs and I respect the beliefs and motives of all the people that voted on the other side in this issue. But we believe and I think that it was evident from the speeches on the floor, we believe very strongly in what we tried to do today. This was round one and we will continue to fight for the beliefs that we expressed today.

MR. LEHRER: The next stop for the capital gains is the Senate. Next week the Senate Finance Committee is expect to report out its version of the 1990 budget. NEWS MAKER - HOUSE OF CARDS

MR. MacNeil: Next tonight the new charges of mismanagement in the Reagan Administration's Department of Housing and Urban Development. Judy Woodruff has more. Judy.

MS. WOODRUFF: For this story the focus at HUD shifts to the Federal Housing Administration or FHA. It was created during the depression to help financially strapped American's buy homes. The FHA grantees home mortgages financed by private lenders. Over the years over 9 million families have received FHA backed loans. With 900,000 mortgages expected to be guaranteed this year. Yesterday the head of the General Accounting Office, Comptroller General Charles Bowsher told a Senate Sub Committee the FHA faces a 4.3 billion dollar deficit caused by foreclosures on mortgages funded during the Reagan Administration. Comptroller General Bowsher is with us now. Mr. Bowsher I understand this all came out because of an outside audit. Tell us exactly what the audit showed.

CHARLES BOWSHER, Comptroller General: Well the audit was something that we were not able to do for a number of years. We kept pressing HUD to get the accounting systems in place and finally we were able to do this financial audit and so what it shows is that we have a lot of loses in the program.

MS. WOODRUFF: What kind of loses?

MR. BOWSHER: Well the loses come from to many defaults, sometimes in areas where we have bad economic times like the oil states.

MS. WOODRUFF: These are defaults by families who bought homes?

MR. BOWSHER: You have family homes, you have multi family homes, you have hospitals, you have many things being financed here and we also had a big billion dollar loss in what was known as the co insurance program and that was where some people were thinly capitalized, they went under, they were supposed to co insure for 20 percent the federal government was supposed to co insure for 80 percent but now the federal government has to pick it all up.

MS. WOODRUFF: Well how serious is it?

MR. BOWSHER: Well it is serious. In other words we had some of the same problems here that we had in the S&L crisis, mismanagement, some fraud, lack of information that we should have known that the problem was building and I think the other thing that bothers us is that the dollars now. We have to come up with these dollars. We have to get some appropriation and although the numbers aren't anything like the S&L crisis they are as big as some of the other bailouts like New York City, Chrysler and programs like that.

MS. WOODRUFF: Why didn't we know about the magnitude of this, I mean, the FHAsown audit as I understand it, said just recently that their deficit was going to be some eight hundred some odd million which is a lot less than what you have found here.

MR. BOWSHER: Yes they reported an eight hundred and fifty million dollar problem but they were just doing it on the cash basis. In other words once you go in and try to figure out what your real loss is and what this audit shows we had a lot of loses coming down the pike.

MS. WOODRUFF: Why did it take so long. I read this afternoon that it has been 15 years since there has been an audit of the FHA. Why is that?

MR. BOWSHER: Because they let their systems deteriorate to the point where you couldn't do an audit and we kept after them and finally we did a management review in 1984 and I will say the Administration Leaders finally decided that they had a serious problem they started to get some of their records in shape so we could go in and do an audit?

MS. WOODRUFF: But whose responsibility is it?

MR. BOWSHER: There is no question it is the Secretary of HUD and the leaders of the HUD program there in the last 15 years.

MS. WOODRUFF: Going back to not just the Reagan Administration?

MR. BOWSHER: Not just back to the Reagan Administration it goes back in to the 70s.

MS. WOODRUFF: I wanted to ask you about that because I saw a newspaper article today from last month which quoted you as telling a Senate Banking Committee at that time that FHA was in okay shape now. What were you basing your information on?

MR. BOWSHER: No we didn't say it was in okay shape at that time. What we were doing was giving the history of these problems and they were asking how much of a loss we thought it would be and we said it would be as much as last year and that would allow them to still have a positive equity balance but the loses were really greater. So now we've gone from a positive equity balance into a negative position.

MS. WOODRUFF: And at about the same time I noticed Secretary Kemp. Housing Secretary Kemp, sent a letter to Congress saying that the FHAs program was one of the Government's great success stories, I mean, how could the Secretary of the Department say that while all this was going on?

MR. BOWSHER: I think it was, I think, as your opening remark said there about how many people have been helped in this country by this program. Historically it is one of the great success programs. Secretary Kemp didn't know where things stood until this audit was completed so I think he was giving his best judgement at the time. But we had to complete the Audit to find out where things stood. And now we know where they stand and we have some real loses here.

MS. WOODRUFF: Alright what happens now? You said a moment ago that we have to make up these losses. What has to happen? Do the losses have to picked up now?

MR. BOWSHER: Yes I think now what happens is they have to ask for appropriations from the Congress to make the fund whole again.

MS. WOODRUFF: And how much are we talking about?

MR. BOWSHER: We are talking about four billion dollars which is a large sum of money.

MS. WOODRUFF: Over what period of time?

MR. BOWSHER: Well they can probably do that over a few years , two or three or four years. They will budget it for that but what it means is that is what is going to be required to get this fund in a positive position.

MS. WOODRUFF: Is that going to effect the people who are out there now who are thinking, gee I would like to have an FHA Mortgage?

MR. BOWSHER: I don't think so. In other words I think this is again you have to make good the government contract on the mortgage just like we had to make good the government contract on despite insurance with the S&L depositors. But it is costing the tax payer four billion dollars.

MS. WOODRUFF: What do you think the lesson in this is?

MR. BOWSHER: The lesson is that we've got to get our financial systems in the government in shape so we know when these problems are starting and also when we delegate programs in to the private sector as we were doing here in the co insurance we have to monitor them. We can't just turn them over to the private sector. We have to monitor them to find out how they are working. I think that a lot of our deregulation programs need to be better monitored to make sure that we don't have problems that are getting very large.

MS. WOODRUFF: Why do you think they were not monitored before now?

MR. BOWSHER: I think there was just a confidence that the private sector could handle these with out any trouble and like in the S&L we found that there is people in the private sector are willing to rip off government programs if you don't supervise, audit them or monitor them properly.

MS. WOODRUFF: Are they being monitored now at FHA?

MR. BOWSHER: I think that Secretary Kemp has brought in a first rate team really. I am very impressed by some of those people and I think he is going to try to get on top of this program. Right now they don't have all the systems, they don't have all the things in place. They have to do it.

MS. WOODRUFF: I asked you about the people who were out there who would be thinking about applying for an FHA and what about the people who have FHA mortgages now?

MR. BOWSHER: They have no worries.

MS. WOODRUFF: This is not going to effect them right now?

MR. BOWSHER: No this is really the financing of the fund itself. So it is really the tax payers one more time are going to have to come up with several billion dollars for a bailout that should not have happened.

MS. WOODRUFF: You know a lot about the accounting systems throughout the Government. Are there any more of these little scandals waiting to be exposed?

MR. BOWSHER: I told some of the high government officials the other day that I think we have more of these because we have such poor accounting systems. I have been arguing for several years that we've got to improve the accounting systems and the financial reporting of the federal government and to have annual financial audits on all these departments.

MS. WOODRUFF: You think we have more. Where do you think they are?

MR. BOWSHER: We know like the Student Loan Group we can not audit them because of bad records, we know that the Pension Guarantee. So there are some that we have identified for the Congress and for the Administration.

MS. WOODRUFF: Are there more?

MR. BOWSHER: Well we hope, you know, there are not but we are working on some audits now that we will be reporting now and I think that we are going to have some problems reported. This is the third big one, I think that we've reported this. We had the S&L crisis, nuclear weapon plant, now HUD and these funds.

MS. WOODRUFF: And student loans?

MR. BOWSHER: And student loans coming up. So these are the ones that I think it is just unfortunate that the American tax payers having to pay taxes for all these bailouts.

MS. WOODRUFF: Mr. Bowsher we thank you for being with us.

MR. BOWSHER: Thank you.

MR. MacNeil: Again the main stories of the day. The House of Representatives approved President Bush's Plan to cut the capital gains tax. A defeat for the Democratic Leadership. The President and the nations Governors ended their two day Education Summit calling for new national goals and higher standards in American schools. Former Philippians President Ferdinand Marcos died in Honolulu. Good night Jim.

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