PBS NewsHour; November 30, 2010 6:00pm-7:00pm PST

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Lehrer: GOOD EVENING. I'M JIM LEHRER. THE MILITARY'S BAN ON GAYS SERVING OPENLY CAN BE REPEALED WITHOUT A RISK TO READINESS, SAID A PENTAGON STUDY RELEASED TODAY.

>> Woodruff: AND I'M JUDY WOODRUFF. ON THE NEWSHOUR TONIGHT, WE GET THE DETAILS FROM THE REPORT'S AUTHORS, AND LOOK AT HOW THE MILITARY CAN PREPARE FOR AN END TO THE "DON'T ASK, DON'T TELL" POLICY.

>> Lehrer: THEN, KWAME HOLMAN REPORTS ON PRESIDENT OBAMA'S MEETING WITH CONGRESSIONAL LEADERS.

>> A STATED AIM OF TODAY'S WHITE HOUSE MEETING WAS TO RESOLVE MAJOR ISSUES IN THE LAME DUCK CONGRESS. IT WAS AN EARLY BAROMETER OF HOW THE PRESIDENT AND THE OPPOSITION WILL GET ALONG IN

>> Woodruff: WE HAVE A NEWSMAKER INTERVIEW WITH WHITE HOUSE SENIOR ADVISOR DAVID AXELROD.

>> Lehrer: MARGARET WARNER EXAMINES THE DECREASE IN SCHOOLS KNOWN AS "DROPOUT FACTORIES" AND THE RISE IN HIGH SCHOOL GRADUATION RATES.

>> Woodruff: AND GWEN IFILL TALKS TO MARCIA COYLE ABOUT TODAY'S SUPREME COURT ARGUMENTS OVER MOVING INMATES OUT OF CALIFORNIA'S CROWDED PRISONS.

>> Lehrer: THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Lehrer: THE LONG-AWAITED PENTAGON STUDY ON THE EFFECTS OF ENDING "DON'T ASK, DON'T TELL" WAS RELEASED TODAY. IT CONCLUDED THERE COULD BE INITIAL DISRUPTIONS FROM DROPPING THE BAN ON GAYS SERVING OPENLY IN THE RANKS, BUT THERE WOULD BE NO LONG-LASTING PROBLEMS. THE PENTAGON STUDY BEGAN TEN MONTHS AGO. THE QUESTION: WHAT HAPPENS IF CONGRESS REPEALS THE POLICY THAT FORCED MORE THAN 13,000 PERSONNEL TO LEAVE THE MILITARY IN THE LAST 17 YEARS. SOME 115,000 TROOPS RESPONDED TO A MAILED QUESTIONNAIRE. 70% SAID ALLOWING GAYS AND LESBIANS TO SERVE OPENLY WOULD HAVE POSITIVE, MIXED OR NO EFFECT. ON THE OTHER HAND, 30% PREDICTED NEGATIVE EFFECTS. AMONG COMBAT TROOPS 40% WERE OPPOSED TO THE IDEA. THAT FIGURE CLIMBED TO 46% AMONG U.S. MARINES WHO ANSWERED THE SURVEY. DEFENSE SECRETARY GATES AND THE CHAIRMAN OF THE JOINT CHIEFS ADMIRAL MIKE MULLEN FAVOR LIFTING THE BAN AS DOES PRESIDENT OBAMA. AT A BRIEFING TODAY, GATES ADDRESSED THE COMBAT UNIT CONCERNS.

>> PART OF THIS IS A QUESTION OF UNFAMILIAR YARD, PART OF IT IS STEREOTYPES. AND PART OF IT IS JUST SORT OF INHERENT RESISTANCE TO CHANGE WHEN YOU DON'T KNOW WHAT'S ON THE OTHER SIDE. SO I THINK THAT THE CONTRAST BETWEEN THE SIGNIFICANT LEVELS OF CONCERN FOR THOSE WHO HAD... WHO SAID THEY HAD NEVER SERVED WITH SOMEONE WHO WAS GAY AS OPPOSED TO THOSE WHO HAD IS AN IMPORTANT CONSIDERATION.

>> Lehrer: IN FACT, THE REPORT FOUND THAT 92% OF TROOPS WHO HAVE WORKED WITH A GAY COME RAID SAID THE EXPERIENCE WAS GOOD, VERY GOOD OR HAD NO IMPACT ON OPERATIONS. AND REGARDLESS, BOTH GATES AND MULLEN SAID EVERYONE IN UNIFORM KNOWS ORDERS MUST BE OBEYED.

>> FRANKLY IF THE CONGRESS OF THE UNITED STATES REPEALS THIS LAW, THIS IS THE WILL OF THE AMERICAN PEOPLE. AND YOU ARE THE AMERICAN MILITARY. AND WE WILL DO THIS. AND WE WILL DO IT RIGHT. AND WE WILL DO EVERYTHING IN OUR POWER TO MITIGATE THE CONCERNS THAT YOU HAVE.

>> THIS IS WITHOUT QUESTION A COMPLEX SOCIAL AND CULTURAL ISSUE. BUT AT THE END OF THE DAY WHATEVER THE DECISION OF OUR ELECTED LEADERS MAY BE, WE IN UNIFORM HAVE AN OBLIGATION TO FOLLOW ORDERS.

>> OUR PERSPECTIVE IS A UNIQUE ONE.

>> Reporter: BACK IN 1993 THEN JOINT CHIEFS CHAIRMAN COLIN POWELL HAD PUBLICLY OPPOSED PRESIDENT CLINTON'S PUSH TO LET GAYS SEARCH OPENLY. THAT LED TO DON'T ASK DON'T TELL. PUBLIC OPINION WAS ON POWELL'S SIDE THEN BUT IT HAS CHANGED MARKEDLY SINCE. A PEW RESEARCH POLL OUT YESTERDAY FOUND 58% OF AMERICANS NOW FAVOR OPEN SERVICE BY GAYS. STILL MANY REPUBLICANS POINT TO OPPOSITION FROM THE INDIVIDUAL COMMANDERS OF THE ARMED SERVICES. IN FACT, SOME LAWMAKERS WHO SAID THEY WERE WAITING FOR THE PENTAGON'S STUDIES' RESULTS ARE NOW CALLING FOR FURTHER INVESTIGATION. SOUTH CAROLINA SENATOR LINDSEY GRAHAM APPEARED ON FOX NEWS SUNDAY.

>> THERE'S NO GROUND SWELL OF OPPOSITION TO DON'T ASK DON'T TELL COMING FROM OUR MILITARY. THIS IS ALL POLITICS. I DON'T BELIEVE THERE'S ANYWHERE NEAR THE VOTES TO REPEAL DON'T ASK DON'T TELL ON THE REPUBLICAN SIDE. I THINK WE'LL BE UNITED IN THE LAME DUCK. AND THE STUDY THAT I WOULD BE LOOKING FOR IS ASKING MILITARY MEMBERS SHOULD IT BE REPEALED NOT HOW TO IMPLEMENT IT ONCE YOU AS A POLITICIAN DECIDE TO REPEAL IT.

>> Lehrer: THE HOUSE HAS ALREADY PASSED REPEAL WHILE A SIMILAR MEASURE HAS SO FAR BEEN BLOCKED IN THE SENATE. SECRETARY GATES WARNED TODAY AGAINST INACTION BUT HE ALSO SAID THE MILITARY WILL NEED TIME TO ADJUST.

>> THOSE THAT CHOOSE NOT TO ACT LEGISLATIVELY ARE ROLLING THE DICE THAT THIS POLICY WILL NOT BE ABRUPTLY OVERTURNED BY THE COURTS. NONETHELESS I BELIEVE IT WOULD BE UNWISE TO PUSH AHEAD WITH FULL IMPLEMENTATION OF REPEAL BEFORE MORE CAN BE DONE TO PREPARE THE FORCE. IN PARTICULAR THOSE GROUND COMBAT SPECIALTIES AND UNITS FOR WHAT COULD BE A DISRUPTIVE AND DISORIENTING CHANGE.

>> Lehrer: SENATE DEMOCRATS HAVE PLEDGED TO BRING UP REPEAL AGAIN IN THE CURRENT LAME DUCK SESSION. THE SENATE ARMED SERVICES COMMITTEE WILL HOLD HEARINGS THIS WEEK ON THE PENTAGON REPORT. BUT IF THE FULL SENATE DOES NOT ACT, THE ISSUE WILL LIKELY DIE WHEN REPUBLICANS REGAIN CONTROL OF THE HOUSE NEXT YEAR.

>> Lehrer: AND WITH US NOW ARE THE TWO CHAIRMEN OF THE "DON'T ASK, DON'T TELL" STUDY GROUP: JEH JOHNSON, THE PENTAGON'S GENERAL COUNSEL, AND GENERAL CARTER HAM, THE COMMANDING GENERAL OF U.S. ARMY FORCES IN EUROPE. GENERAL, PRESIDENT OBAMA SAID LATE TODAY THAT YOUR STUDY PROVES THAT DON'T ASK DON'T TELL CAN BE IMPLEMENTED RESPONSIBLY. DO YOU AGREE WITH THAT?

>> I DO. I THINK WE CAN IF THE LAW CHANGES I THINK THE UNIFORMED MILITARY CAN EXECUTE AND IMPLEMENT THE CHANGE TO THE LAW WITH LOW RISK TO THE FORCE.

>> Lehrer: DO YOU AGREE?

>> YES, SIR, I DO. I THINK THAT OUR STUDY WHICH WAS THE MOST COMPREHENSIVE ENGAGEMENT OF THE FORCE ON ANY PERSONNEL-RELATED ISSUE DEMONSTRATES THAT MOST SERVICE MEMBERS SIMPLY DON'T REGARD THIS AS AN ISSUE AT THIS POINT. MANY ACTUALLY SEE POSITIVE EFFECTS OF REPEAL IN TERMS OF UNIT COHESION AND THE ABILITY TO WORK TOGETHER.

>> Lehrer: GENERAL, THE STUDY, YOUR STUDY, COMES UP WITH JUST THE OPPOSITE OF WHERE THE MILITARY LEADERSHIP HAS BEEN FOR YEARS INCLUDING SOME OF THE THE LEADERS NOW. THE OTHER MEMBERS OF THE JOINT CHIEFS OF STAFF HAVE SPOKEN OUT ON THIS. WHY THE DIFFERENCE BETWEEN HOW THE LEADERS FEEL AND THE HOW THE TROOPS FEEL.

>> ONE OF THE INTERESTING THINGS IN OUR REVIEW IS AS FAR AS WE CAN TELL THIS WAS THE FIRST REALLY ANALYTICALLY RIGOROUS REPRESENTATIVE AND OBJECTIVE ASSESSMENT OF THE ATTITUDES OF THE FORCE WITH REGARD TO DON'T ASK DON'T TELL. SO RATHER THAN HAVING ANECDOTAL INFORMATION WE REALLY WANTED ANALYTICALLY RIGOROUS INFORMATION. WE THINK WE HAVE THAT.

>> Lehrer: I'LL ASK YOU, MR. JOHNSON. WHY DO THE GENERALS THROUGH THE YEARS HAVE BEEN OPPOSED TO THIS AND HOW DOES YOUR STUDY... DOES YOUR STUDY INCLUDE THE HIGH-RANKING OFFICERS OR IS IT MOSTLY TROOPS, ENLISTED PERSONNEL OR WHAT?

>> THE STUDY INCLUDED ALL GRADES. I WOULD SAY IN RESPONSE TO YOUR QUESTION THAT WE HEARD FROM A NUMBER OF GENERALS AND ADMIRALS THAT THEY WERE PREPARED TO FOLLOW WHATEVER THE WILL OF THE CONGRESS AND THE PRESIDENT WAS. IN THE BASIC MESSAGE WAS IF THE LAW IS REPEALED, WE ARE PREPARED TO LEAD. JUST GIVE US THE TOOLS, GIVE US THE EDUCATION AND TRAINING TOOLS TO DO THAT. WE HEARD THAT A LOT.

>> Lehrer: WHAT ABOUT SENATOR GRAHAM'S QUESTION YOU ALL DID NOT ASK THE TROOPS IN YOUR STUDY IF IT SHOULD BE REPEALED? WHY DIDN'T YOU?

>> WE DON'T CONDUCT REFERENDUM OR POLLS WITHIN THE MILITARY ABOUT MILITARY POLICY. WE DON'T POLL THE FORCE ABOUT WHETHER WE SHOULD SEND ADDITIONAL TROOPS TO AFGHANISTAN, FOR EXAMPLE. OR GO INTO IRAQ. WE DID ASK VERY SPECIFIC QUESTIONS TO TEST THE EFFECT OF REPEAL ON UNIT COHESION AND THE LIKE. OUR STUDY WAS COMPREHENSIVE ENOUGH THAT WE IN EFFECT GOT AN ANSWER TO THE QUESTION OF CAN WE DO THIS? AND THE SURVEY RESULTS REVEAL A SIGNIFICANT MAJORITY OF THE FORCE BELIEVES THAT WE CAN DO THIS.

>> Lehrer: CAN WE DO THIS IS NOT THE SAME QUESTION THOUGH AS SHOULD WE DO THIS. IS IT, GENERAL?

>> VERY CLEARLY DIFFERENT QUESTIONS. BUT AS A CAREER SOLDIER, I THINK THAT THE APPROPRIATE QUESTION TO US IN UNIFORM IS WHAT WOULD BE THE EFFECT, WHAT WOULD BE THE IMPACT OF REPEAL SHOULD IT OCCUR AND HOW WOULD YOU IMPLEMENT IT? WE ARE HOPEFUL THAT OUR STUDY WILL INFORM THE DISCUSSION OF SHOULD THE LAW BE REPEALED. BUT IT IS CONGRESS'S RESPONSIBILITY, IN MY VIEW, TO DECIDE SHOULD. WE HAVE TO DECIDE HOW.

>> Lehrer: BASED ON YOUR EXPERIENCE WITH THIS STUDY GROUP, DO YOU THINK IT SHOULD BE REPEALED?

>> THAT'S NOT A QUESTION FOR US IN THE MILITARY. I AM FIRMLY CONVINCED THAT IT CAN BE REPEALED.

>> Lehrer: YOU BELIEVE IT SHOULD BE, MR. JOHNSON?

>> I'M GOING TO BE THE GENERAL COUNSEL OF THE DEFENSE DEPARTMENT HERE FOR A MOMENT AND NOTE WHAT SECRETARY GATES SAID THIS AFTERNOON WHICH IS THAT THERE IS CLEARLY INCREASED ACTIVITY ON THIS ISSUE IN THE COURTS. WE HAD AN EXPERIENCE IN OCTOBER WHERE A JUDGE TOLD US LITERALLY OVERNIGHT TO STOP ENFORCING THIS POLICY. WHICH IS NOT THE WAY TO MAKE A MAJOR PERSONNEL POLICY CHANGE WITHIN THE MILITARY IN A FORCE AS BIG AS OURS. SO WHAT SECRETARY GATES IS SAYING TO US IS THAT WE CAN DO THIS IN AN ORDERLY FASHION, CONSISTENT WITH OUR RECOMMENDATIONS AND HAVE THE CONGRESS BRING ABOUT REPEAL. IN THAT WAY. OR WE CAN DO THIS IN A VERY ABRUPT WAY OVER WHICH WE HAVE VERY LITTLE CONTROL. WE SAW A TASTE OF THAT LAST MONTH IN OCTOBER WHEN WE WERE ENJOINED FROM ENFORCING THE POLICY. FROM MY LEGAL POINT OF VIEW, I THINK THAT THE BETTER COURSE IS TO DO THIS IN AN ORDERLY FASHION AND NOT DEAL WITH... HAVE TO FACE WHATEVER THE COURTS ARE GOING TO HAND US.

>> Lehrer: YOU SAID THERE WILL BE SOME INITIAL DISRUPTIONS, WHAT KIND OF DISRUPTIONS, GENERAL?

>> I THINK IF THE LAW IS REPEALED AND THE POLICY CHANGES, SOME OF OUR FORMATIONS, BECAUSE IT WILL BE SOMETHING NEW, IT WILL BE A NEW DYNAMIC. SO, FOR EXAMPLE, IN A SMALL UNIT, A SERVICE MEMBER MAY REVEAL THEIR SEXUAL ORIENTATION, TO BE GAY OR LESBIAN WHEREAS TODAY THEY WOULD CONCEAL THAT. THAT MAY CAUSE OTHERS IN THE UNIT TO BE UNCOMFORTABLE. WE CLEARLY RECOGNIZE THAT SOME NUMBER OF SERVICE MEMBERS HAVE STRONGLY HELD RELIGIOUS AND MORAL VIEWS ABOUT HOMOSEXUALITY. THOSE KINDS OF DISDISRUPTIONS I THINK ARE LIKELY TO OCCUR IN THE NEAR TERM.

>> Lehrer: YOUR STUDY GROUP SAID THAT EDUCATION AND TRAINING CAN DO THIS. WHAT CAN GET BY THESE KINDS OF DISRUPTIONS, WHAT KIND OF EDUCATION? HOW DO YOU EDUCATE AND TRAIN PEOPLE ABOUT THIS?

>> THERE'S A BASIC EDUCATION ABOUT WHERE GAYS AND LESBIANS FIT IN TO THE FORCE, IF THEY ARE ALLOWED TO SERVE OPENLY. ONE OF THE UNDERLYING THEMES THAT WE'RE RECOMMENDING FOR EDUCATION AND TRAINING IS TREATMENT OF ALL SERVICE MEMBERS ON A FAIR AND EQUAL BASIS. EVERYONE SHOULD BE TREATED THE SAME. NO PREFERENTIAL TREATMENT FOR GAY AND LESBIAN SERVICE MEMBERS. IN OUR ENGAGEMENTS WITH THEM, WE HEARD MUCH THE SAME THING. WE DON'T WANT SPECIAL TREATMENT. WE DON'T WANT TO BE TREATED ANY DIFFERENT FROM ANYBODY ELSE. JUST ALLOW US TO LIVE BY THE SAME RULES.

>> Lehrer: NO DIFFERENT LIVING QUARTERS, ANY DIFFERENT RULES OF ANY KIND AT ALL FOR THEM?

>> NO DIFFERENT LIVING QUARTERS, NO SPECIAL CONSIDERATIONS. JUST ALLOW US TO LIVE BY THE SAME RULES AS EVERYBODY ELSE. IF SOMEBODY... ANOTHER SERVICE MEMBER MAKES A REFERENCE TO HIS FAMILY OR HIS SIGNIFICANT OTHER OR WHAT HE'S DOING FOR THE WEEKEND, A GAY AND LESBIAN SERVICE MEMBER SHOULD BE ALLOWED TO DO THE SAME.

>> Lehrer: GENERAL, PUT ON YOUR COMBAT HAT. YOU'VE SERVED IN COMBAT MORE THAN ONCE. AND THE COMING BAT... COMBAT SOLDIERS MARINES WERE THE MOST OPPOSED TO THIS. WHAT'S YOUR READING OF THAT? WHAT DO YOU THINK IS THE REASON FOR THIS SOME.

>> I THINK THERE ARE A NUMBER OF FACTORS THAT ARE AT PLAY. AS THE SECRETARY OF DEFENSE INDICATED, IT'S ALSO THE SEGMENT OF THE FORCE THAT PROBABLY HAS THE LESS... THE LEAST ACTUAL EXPERIENCE OF SERVING ALONGSIDE GAY AND LESBIAN SERVICE MEMBERS. WE FOUND A DISTINCT DIFFERENCE IN THE ATTITUDES OF SERVICE MEMBERS WHO HAD THAT EXPERIENCE AND THOSE WHO HAVE NOT.

>> Lehrer: THE ONES... AND THEY KNEW THEY WERE SERVING WITH GAYS AND LESBIANS, AND THEY HAD A BETTER EXPERIENCE THAN THOSE WHO HAD NO EXPERIENCE. IS THAT WHAT YOU'RE SAY SOMETHING.

>> IN GENERAL, THAT'S CORRECT. WE FOCUSED SPECIFICALLY ON MARINE AND ARMY COMBAT ARMS UNITS IN COMBAT AND ASKED QUESTIONS ABOUT, DID YOU KNOW SOMEONE IN YOUR UNIT WHO WAS GAY? WHAT EFFECT DID THAT HAVE ON UNIT PERFORMANCE? AND THOSE WHO HAD THAT ACTUAL EXPERIENCE REPORT THAT THEIR UNIT PERFORMANCE WAS QUITE GOOD.

>> Lehrer: EVEN THOSE WHO HAD COMBAT ASSIGNMENTS, LIKE MARINES, SAY, OR INFANTRY TROOPS IN THE ARMY, THEY HAD RELUCTANCE ABOUT CHANGING THE POLICY BUT THEY HADN'T HAD A NEGATIVE EXPERIENCE?

>> THOSE WHO HAD AN ACTUAL EXPERIENCE, PARTICULARLY IN COMBAT, OF SERVING IN AN ORGANIZATION WITH SOMEONE IN THEIR UNIT THAT THEY KNEW WHO WAS GAY, THEIR UNIT PERFORMANCE WAS QUITE GOOD. THERE IS A VERY REAL DIFFERENCE BETWEEN THOSE ASSESSMENTS AND SERVICE MEMBERS IN SIMILAR CIRCUMSTANCES WHO HAVE NOT SERVED WITH SOMEONE THAT THEY KNEW TO BE GAY.

>> Lehrer: FINALLY, MR. JOHNSON, IN A WORD, ANY DOUBT IN YOUR MIND THAT THIS IS GOING TO EVENTUALLY HAPPEN? AND IT WILL BE DONE SUCCESSFULLY?

>> WELL, I THINK THAT ONE WAY OR ANOTHER, WE'RE SEEING THE TWILIGHT OF THIS LAW. WHETHER IT'S THROUGH THE CONGRESS OR THE COURTS. AND WE OBVIOUSLY WOULD PREFER THAT IT BE DONE IN AN ORDERLY WAY WITH THE CONGRESS, WITH THE HELP OF THE CONGRESS.

>> Lehrer: GENTLEMEN, THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> Woodruff: A BIPARTISAN MEETING AT THE WHITE HOUSE.

>> Woodruff: STILL TO COME ON THE NEWSHOUR, A BIPARTISAN MEETING AT THE WHITE HOUSE; OBAMA ADVISOR DAVID AXELROD; HIGH SCHOOL DROPOUT RATES; AND SUPREME COURT ARGUMENTS ON PRISON OVERCROWDING. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN IN OUR NEWSROOM.

>> Sreenivasan: THE WIKILEAKS STORY TOOK NEW TURNS TODAY. THE WHISTLEBLOWER WEB SITE RELEASED A SECRET U.S. DIPLOMATIC MEMO CRITICIZING AFGHAN PRESIDENT HAMID KARZAI. IT SAID HE FREED DANGEROUS DETAINEES AND PARDONED DRUG DEALERS BECAUSE OF THEIR TIES TO POWERFUL PEOPLE. WIKILEAKS BEGAN RELEASING 250,000 STATE DEPARTMENT DOCUMENTS OVER THE WEEKEND. BUT TODAY, DEFENSE SECRETARY GATES PLAYED DOWN THE OVERALL EFFECT.

>> THE FACT IS GOVERNMENTS DEAL WITH THE UNITED STATES BECAUSE IT'S IN THEIR INTEREST. NOT BECAUSE THEY LIKE US, NOT BECAUSE THEY TRUST US. AND NOT BECAUSE THEY BELIEVE WE CAN KEEP SECRETS. MANY GOVERNMENT... SOME GOVERNMENTS DEAL WITH US BECAUSE THEY FEAR US. SOME BECAUSE THEY RESPECT US. MOST BECAUSE THEY NEED US. WE ARE STILL ESSENTIALLY, AS IT'S BEEN SAID BEFORE, THE INDISPENSABLE NATION.

>> Sreenivasan: ALSO TODAY, THE STATE DEPARTMENT CUT OFF A U.S. MILITARY COMPUTER NETWORK FROM ITS DATABASE OF DIPLOMATIC CABLES. THAT NETWORK IS BELIEVED TO HAVE BEEN THE SOURCE OF ALL THE DOCUMENTS THAT WERE FUNNELED TO WIKILEAKS. U.S. CONSUMER CONFIDENCE HIT A FIVE-MONTH HIGH IN NOVEMBER. THE CONFERENCE BOARD, A BUSINESS RESEARCH GROUP, SAID IT SUGGESTS A MEASURE OF OPTIMISM ABOUT THE FIRST HALF OF NEXT YEAR. BUT WALL STREET LOST GROUND TODAY OVER CONCERNS ABOUT THE ONGOING DEBT CRISIS IN SOME EUROPEAN NATIONS. THE DOW JONES INDUSTRIAL AVERAGE DROPPED 46 POINTS TO CLOSE AT 11,006. THE NASDAQ FELL JUST UNDER 27 POINTS TO CLOSE AT 2498. THE EUROPEAN UNION WILL INVESTIGATE WHETHER GOOGLE IS MANIPULATING ONLINE SEARCH RESULTS TO STIFLE COMPETITION. THE ANNOUNCEMENT TODAY FOLLOWED COMPLAINTS BY OTHER ONLINE SEARCH COMPANIES. EUROPEAN OFFICIALS SAID THE PROBE COULD TAKE "AT LEAST A FEW MONTHS," WHILE GOOGLE SAID THERE'S NOTHING TO INVESTIGATE. THEY SPOKE SEPARATELY, IN BRUSSELS AND PARIS.

>> I THINK IT IS IMPORTANT TO KNOW THAT WE ARE AT THE VERY BEGINNING OF AN INVESTIGATION. BASICALLY BY OPENING THIS INVESTIGATION TODAY WHAT WE ARE SAYING IS THAT THE ALLEGATIONS THAT WE HAVE RECEIVED MERIT FURTHER INVESTIGATION.

>> WE THINK THAT THERE'S LOTS OF COMPETITION. I MEAN, YES, WE'RE A BIG PLAYER IN ON-LINE SEARCH. BUT IF YOU'RE LOOKING FOR BOOKS, YOU CAN LOOK FOR AMAZON FIRST BEFORE US. IF YOU'RE LOOKING FOR TRAVEL, YOU MIGHT GO TO EXPEDIA. THERE'S LOTS OF WAYS OF GETTING AND FINDING INFORMATION ONLINE.

>> Sreenivasan: THIS MARKS THE FIRST TIME A MAJOR REGULATORY AGENCY HAS OPENED A FORMAL PROBE INTO GOOGLE'S BUSINESS PRACTICES. MICROSOFT AND INTEL HAVE ALREADY FACED INVESTIGATIONS BY EUROPE'S ANTITRUST REGULATORS, AND BEEN FINED BILLIONS OF DOLLARS. THE SENATE TODAY EASILY PASSED FOOD SAFETY LEGISLATION, GIVING NEW POWERS TO THE FOOD AND DRUG ADMINISTRATION. THE BILL INCLUDES $1.4 BILLION TO PAY FOR INCREASED INSPECTIONS, STRICTER STANDARDS ON IMPORTED FOODS, AND MANDATORY RECALLS. IT HAS TO BE RECONCILED WITH A HOUSE VERSION, BUT PROSPECTS OF FINAL PASSAGE DURING THIS LAME DUCK SESSION ARE UNCLEAR. IN OTHER ACTION, SENATORS AGAIN REJECTED A BAN ON EARMARKING MONEY FOR HOME STATE PROJECTS LIKE ROADS AND SEWER LINES. MOST REPUBLICANS PUSHED FOR THE BAN. MOST DEMOCRATS VOTED AGAINST IT. ON THE HOUSE SIDE, LAWMAKERS GAVE FINAL APPROVAL TO SETTLEMENTS FOR BLACK FARMERS AND AMERICAN INDIANS. THEY'LL RECEIVE $4.6 BILLION FOR CLAIMS THEY WERE WRONGLY DENIED FARM LOANS AND CHEATED OUT OF ROYALTIES. THERE'S NEW EVIDENCE THAT TAKING HIGH DOSES OF VITAMIN D AND CALCIUM SUPPLEMENTS DOES LITTLE GOOD. THE RESULTS CAME TODAY IN A STUDY BY THE U.S. INSTITUTE OF MEDICINE, AN ARM OF THE NATIONAL ACADEMY OF SCIENCES. IT FOUND THE AVERAGE AMERICAN GETS ENOUGH VITAMIN D THROUGH SUN EXPOSURE, MULTI-VITAMINS, AND A DIET RICH IN FORTIFIED FOODS. IT ALSO FOUND NO PROOF THAT "MEGA-DOSES" OF VITAMIN D CAN CUT THE RISK OF COLON CANCER, AS SOME HAVE CLAIMED. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: FOR THE FIRST TIME SINCE REPUBLICANS WON CONTROL OF THE HOUSE OF REPRESENTATIVES FOUR WEEKS AGO, PRESIDENT OBAMA SAT DOWN WITH THE CONGRESSIONAL LEADERS FROM BOTH PARTIES TODAY TO PLOT THE PATH FORWARD. NEWSHOUR CORRESPONDENT KWAME HOLMAN BEGINS OUR COVERAGE.

>> Reporter: THE POLITICAL SUMMIT LASTED TWO HOURS, TWICE AS LONG AS PLANNED. AFTERWARD BOTH SIDES STRUCK A CORDIAL TONE. THE PRESIDENT CALLED THE SESSION PRODUCTIVE.

>> I THOUGHT THAT PEOPLE CAME TO IT WITH A SPIRIT OF TRYING TO WORK TOGETHER, AND I THINK IT'S A GOOD START AS WE MOVE FORWARD. THE AMERICAN PEOPLE DID NOT VOTE FOR GRIDLOCK. THEY DIDN'T VOTE FOR UNYIELDING PARTISANSHIP. THEY'RE DEMANDING COOPERATION. THEY'RE DEMANDING PROGRESS. THEY'LL HOLD ALL OF US-- AND I MEAN ALL OF US-- ACCOUNTABLE FOR IT.

>> Reporter: INCOMING HOUSE SPEAKER JOHN BOEHNER AND OTHER REPUBLICANS SOUNDED A SIMILAR NOTE WHILE ACKNOWLEDGING THEIR VIEWS DIFFER SHARPLY FROM MR. OBAMA'S.

>> WE HAD A VERY NICE MEETING TODAY. OF COURSE WE'VE HAD A LOT OF VERY NICE MEETINGS. THE QUESTION IS, CAN WE FIND THE COMMON GROUND THE AMERICAN PEOPLE EXPECT US TO FIND?

>> Reporter: A STATED AIM OF TODAY'S WHITE HOUSE MEETING WAS TO RESOLVE MAJOR ISSUES IN THE LAME DUCK CONGRESS. BUT IT ALSO WAS AN EARLY BAROMETER OF HOW THE PRESIDENT AND THE OPPOSITION WILL GET ALONG IN THE NEXT CONGRESS. RESURGENT REPUBLICANS WILL CONTROL THE HOUSE COME JANUARY AND HAVE A STRONGER PRESENCE IN THE SENATE. TWO ISSUES TOOK TOP BILLING TODAY. FIRST, EXTENDING THE BUSH ERA TAX CUTS SET TO EXPIRE AT THE END OF THE YEAR. THE PRESIDENT WANTS TO MAINTAIN THE CUTS ONLY FOR THE MIDDLE CLASS. G.O.P. LEADERS HAVE CALLED FOR EXTENDING THE CUTS FOR ALL TAX PAYERS INCLUDING THE WEALTHIEST. THERE WAS NO AGREEMENT ANNOUNCED TODAY, BUT LAWMAKERS ACCEPTED AN OFFER TO WORK WITH TREASURY SECRETARY TIMOTHY GEITHNER TO FIND A COMPROMISE.

>> I THINK REPUBLICANS MADE THE POINT THAT STOPPING ALL THE LOOMING TAX HIKES AND CUTTING SPENDING WOULD, IN FACT, CREATE JOBS AND GET THE ECONOMY MOVING AGAIN. SO WE'RE LOOKING FORWARD TO THE CONVERSATION WITH THE WHITE HOUSE OVER EXTENDING ALL THE CURRENT RATES AND I REMAIN OPTIMISTIC.

>> Reporter: THE OTHER MAJOR ITEM WAS THE PRESIDENT'S PLEA FOR THE SENATE TO RATIFY A NUCLEAR WEAPONS TREATY WITH RUSSIA BEFORE THIS CONGRESS ENDS. BUT REPUBLICAN LEADER MITCH McCONNELL SAID THAT IS SECONDARY TO ECONOMIC POLICY.

>> IN THE SENATE WE'RE WRESTLING WITH A LOT OF OTHER MATTERS THAT MAY HAVE SOME LEVEL OF IMPORTANCE BUT AREN'T IN THE SAME CATEGORY AS DECIDING WHAT EVERYBODY TAX RATES ARE GOING TO BE AND DECIDING HOW WE'RE GOING TO... I HOPE WE CAN RESHUFFLE OUR PRIORITYS ON THE SENATE SIDE AND GET THEM IN LINE WITH THESE TWO BIG ISSUES AND HOPEFULLY WRAP UP THE 111th CONGRESS.

>> Reporter: IT REMAINS UNCLEAR WHETHER LONG-TERM JOBLESS BENEFITS WILL BE EXTENDED. THEY EXPIRE TOMORROW FOR SOME TWO MILLION AMERICANS. IN THE MEANTIME, THE PRESIDENT MADE CLEAR HE WANTS MORE SESSIONS WITH CONGRESSIONAL LEADERS FROM BOTH PARTIES. THAT INCLUDES AN INVITATION TO THE PRESIDENTIAL RETREAT AT CAMP DAVID, MARYLAND AT A DATE TO BE DETERMINED.

>> Woodruff: A SHORT TIME AGO, I TALKED WITH PRESIDENT OBAMA'S SENIOR ADVISER DAVID AXELROD. HE JOINED US FROM THE WHITE HOUSE. DAVID AXELROD, THANK YOU FOR TALKING WITH US.

>> GOOD TO BE WITH YOU, JUDY.

>> Woodruff: YOU WERE IN THE MEETING TODAY. DID IT ACCOMPLISH THE GOAL THE PRESIDENT HAD SET OUT?

>> I THINK IT REALLY DID. YOU KNOW, WE'VE HAD AN ELECTION. I THINK THE AMERICAN PEOPLE WANT US TO WORK TOGETHER TO TRY AND SOLVE SOME OF THE BIG CHALLENGES FACING THIS COUNTRY. THIS WAS AN OPPORTUNITY TO SIT DOWN AND TALK THINGS THROUGH, AND THE TONE WAS VERY GOOD. IT WAS POSITIVE. IT WAS CONSTRUCTIVE. I THINK STRIDES WERE MADE. AND, YOU KNOW, WE'LL SEE WHAT COMES OF IT. BUT IT CERTAINLY WAS FOR THE KIND OF MEETING THAT IT WAS, THE FIRST MEETING AFTER THE ELECTION OF ALL THE LEADERS, IT WAS A GOOD ONE.

>> Woodruff: YOU SAID IT WAS POSITIVE, CONSTRUCTIVE BUT WE GATHER NO REAL DIFFERENCES WERE BRIDGED TODAY. THE PRESIDENT WASN'T LOOKING FOR THAT?

>> WELL, I THINK THAT THERE WAS... I THINK THERE WAS A SIGNIFICANT DISCUSSION OUTLINING A WAY FORWARD TO SOLVE SOME OF THE THINGS THAT ARE IN FRONT OF US RIGHT NOW. AS THE PRESIDENT MENTIONED AND YOU KNOW, HE'S DESIGNATED HIS TREASURY SECRETARY TIM GEITHNER AND THE NEW BUDGET DIRECTOR TO SIT DOWN WITH MEMBERS FROM THE TWO CHAMBERS TO WORK THROUGH A POTENTIAL SOLUTION ON THIS TAX ISSUE. THAT WOULD BE VERY IMPORTANT FOR THE ECONOMY, VERY IMPORTANT FOR EVERY MIDDLE CLASS PERSON IN THIS COUNTRY WHO WILL SEE THEIR TAXES GO UP BY THOUSANDS OF DOLLARS IF WE CAN'T RESOLVE THIS BEFORE JANUARY 1. SO I CONSIDER THAT PROGRESS, BUT A NUMBER OF OTHER ISSUES WERE TOUCHED ON. THERE WAS A GOOD GIVE-AND-TAKE. I THINK IT WAS A POSITIVE SPIRIT. YOU KNOW, AS I SAID, WE'LL WEE WHAT COMES OF IT. BUT YOU HAD TO FEEL GOOD ABOUT THE MEETING IF YOU WERE THERE.

>> Woodruff: I ASK BECAUSE, YOU KNOW, THE REPUBLICAN LEADERS SAID THE PRESIDENT ACKNOWLEDGED THAT HE HAD NOT REACHED OUT TO THEM SUFFICIENTLY IN THE PAST. WHAT EXACTLY DID HE SAY ABOUT THAT?

>> WELL, LOOK, I THINK IT'S VERY CLEAR THAT COMMUNICATIONS HAVE NOT ALWAYS BEEN THE BEST OVER THE LAST TWO YEARS. WE HAVE SHARED RESPONSIBILITIES NOW AS A RESULT OF THE ELECTION. IT'S VERY, VERY IMPORTANT THAT THERE BE OPEN LINES OF COMMUNICATION. I'M NOT GOING TO BE POLLYANNAISH ABOUT IT. THERE ARE BIG DIFFERENCES. THAT'S WHY WE HAVE TWO PARTIES BUT IT IS IMPORTANT THAT WHERE WE CAN FIND COMMON GROUND WE DO ESPECIALLY ON THESE FUNDAMENTAL ISSUES LIKE THE ECONOMY AND NATIONAL SECURITY. SO HAVING OPEN LINES OF COMMUNICATION IS GOING TO BE VERY, VERY IMPORTANT.

>> Woodruff: ALL OF US IN THE MEDIA, IN FACT THE WHOLE COUNTRY I GUESS IS INTERESTED IN KNOWING WHERE THESE GAPS ARE GOING TO BE BRIDGED BECAUSE THE REPUBLICANS MOST RECENTLY HAVE SAID THEY THINK THAT THE PRESIDENT OUGHT TO BE DOING THE COMPROMISING. IF THAT'S THEIR VIEW, WHERE DO YOU SEE THE GIVE?

>> WELL, LOOK, PEOPLE SAY THINGS, YOU KNOW, AND THEY POSTURE. THAT'S THE NATURE OF POLITICS. THAT'S SOMETIMES THE REQUIREMENT OF POLITICS. BUT I THINK THE FUNDAMENTAL REQUIREMENT THAT PEOPLE HAVE FOR REPUBLICANS AND DEMOCRATS IN WASHINGTON RIGHT NOW IS TO FIND A WAY FORWARD. NOT TO COMPROMISE THEIR PRINCIPLES BECAUSE THEY HAVE THEIRS, WE HAVE OURS. BUT AT THE END OF THE DAY, WE NEED TO MOVE FORWARD ON SOME OF THESE THINGS PARTICULARLY THINGS THAT ARE... THAT AFFECT OUR ECONOMY. WE HAVE A RECOVERY. IT NEEDS TO ACCELERATE. A LOT OF PEOPLE ARE STILL FEELING THE EFFECTS OF THIS RECESSION. THERE ARE THINGS WE CAN DO TO HELP ACCELERATE THAT RECOVERY. WE OUGHT TO DO THEM.

>> Woodruff: ON THE TAX CUTS QUESTION, DAVID AXELROD, WE KNOW THE PRESIDENT WOULD PREFER THAT THEY NOT BE EXTENDED FOR THE WEALTHY. BUT IF THE REPUBLICANS INSIST ON THAT, IS HE PREPARED TO GO ALONG WITH IT?

>> LOOK, THE PRESIDENT'S POSITION IS VERY CLEAR. HE THINKS THERE OUGHT TO BE A PERMANENT TAX CUT FOR THE MIDDLE CLASS. THE MIDDLE CLASS HAS HAD NOT JUST A DIFFICULT TIME IN THIS RECESSION BUT IT'S BEEN BATTERED THROUGH THE LAST DECADE WHERE INCOMES HAVE ACTUALLY DECLINED WHILE INCOMES AT THE TOP HAVE GROWN EXPONENTIALLY. SO THAT MAKES SENSE. WHAT HE'S ALSO SAID IS THAT WE CAN'T AFFORD A PERMANENT TAX CUT FOR THE WEALTHY. IT WOULD COST $700 BILLION THAT WE DON'T HAVE IN THE NEXT TEN YEARS ALONE. WE DON'T WANT TO BORROW THAT MONEY AND ADD TO OUR DEBT. TO DO IT. THOSE ARE THE PARAMETERS HE'S SET. MR. GEITHNER AND MR. LOO ARE GOING TO SIT DOWN WITH THEIR REPRESENTATIVES AND SEE WHERE WE CAN GO FROM THERE.

>> Woodruff: BUT IT SOUNDS LIKE YOU'RE SAYING YOU'RE BASICALLY SAYING WHAT THE PRESIDENT HAS SAID BEFORE. IS THERE GIVE IS WHAT I'M ASKING?

>> NOT ON THOSE ISSUES. I MEAN, WE OBVIOUSLY... WE WANT A TAX CUT FOR THE MIDDLE CLASS. WE HAVE TO HAVE THAT. THE MIDDLE CLASS CAN'T GO INTO JANUARY 1 WITHOUT THAT TAX CUT. WE CAN'T ACCEPT THE PERMANENT TAX CUT FOR THE WEALTHY AT A COST OF $700 BILLION WE DON'T HAVE. BUT WHAT I'M NOT GOING, JUDY, IS ON THIS PROGRAM DO THE JOB THAT THOSE OTHER GENTLEMEN WERE TASKED TO DO AND HAVE THE AUTHORITY TO DO. IT'S GOOD TO HAVE A CONVERSATION WITH YOU BUT NEITHER YOU NOR I ARE EMPOWERED TO RESOLVE THIS. WE'LL SEE WHAT THEY COME UP WITH.

>> Woodruff: WE'LL SEE. I DO WANT TO ASK YOU ABOUT ANOTHER ISSUE THAT WE KNOW CAME UP TODAY. THAT'S THE NEW START TREATY, THE NUCLEAR WEAPONS REDUCTION TREATY WITH THE RUSSIANS. THE REPUBLICANS HAVE SAID THAT IF THE WHITE HOUSE, IF DEMOCRATS, WOULD AGREE TO JUST STRIP THE CONGRESSIONAL AGENDA DOWN IN THIS LAME DUCK TO TAX CUTS AND GOVERNMENT SPENDING, THAT IF THERE'S TIME LEFT, THEN THEY WOULD LOOK, BE PREPARED TO LOOK AT THIS NEW START TREATY. WILL THE PRESIDENT GO ALONG WITH THAT?

>> THE PRESIDENT HAS MADE VERY CLEAR THAT HE THINKS IT'S ESSENTIAL THAT WE TAKE UP THE START TREATY RIGHT NOW BECAUSE WE'RE IN THIS, WE DON'T HAVE THE ABILITY TO SURVEIL WHAT'S GOING ON ON THE GROUND WITH WEAPONS IN RUSSIA. BEYOND THAT THIS TREATY REPRESENTS PART OF A GROWING ALLIANCE WITH RUSSIA ON SOME ISSUES INCLUDING IRAN, HOW WE DEAL WITH NORTH KOREA WHICH IS OBVIOUSLY VERY IMPORTANT. AND IT'S BEEN A PRODUCTIVE RELATIONSHIP OVER THE LAST COUPLE OF YEARS THAT HAS BEEN BUILT. ALL OF THAT IS AT STAKE HERE. WE OUGHT TO MOVE FORWARD. IT'S A MATTER OF NATIONAL SECURITY. WE OUGHT TO MOVE FORWARD. THE PRESIDENT WAS VERY CLEAR WITH MEMBERS OF BOTH PARTIES TODAY THAT THIS IS A PRIORITY FOR HIM.

>> Woodruff: BUT IF IT MEANS STRIPPING THE CONGRESSIONAL AGENDA DOWN TO JUST TAX CUTS, GOVERNMENT SPENDING AND START, IS THE PRESIDENT PREPARED NOT TO PUSH ON THE OTHER ISSUES?

>> JUDY, THE FEELING THAT I GOT TODAY IN THAT ROOM WAS THAT THERE IS A SENSE OF COOPERATION AND THAT THERE IS AN OPPORTUNITY TO GET A NUMBER OF THINGS DONE IN THE NEXT SEVERAL WEEKS. I'M NOT GOING TO LIMIT THAT. THEY WEREN'T LIMITED IN THAT MEETING TODAY. I'M CERTAINLY NOT GOING TO DO IT. HERE I THINK THAT THERE IS THE ABILITY TO GET... IF THERE IS THE WILL, THERE IS A WAY TO GET A NUMBER OF THINGS DONE THAT NEED TO GET DONE BETWEEN NOW AND THE END OF THE YEAR. THE PRESIDENT RAISED UNEMPLOYMENT INSURANCE, FOR EXAMPLE, IT'S EXPIRING. TWO MILLION AMERICANS ARE GOING TO LOSE THEIR UNEMPLOYMENT INSURANCE. IT IS A DISASTROUS SITUATION FOR THEM. IT'S BAD FOR OUR ECONOMY AS WELL. THAT'S ONE ISSUE THAT WE OUGHT TO DEAL WITH. THERE ARE SEVERAL OTHERS. SO, YOU KNOW, I DON'T THINK THAT ANYTHING THAT HAPPENED IN THAT MEETING PROSCRIBED OUR ABILITY TO TO DO THESE OTHER THINGS.

>> Woodruff: WE HEAR YOU, DAVID AXELROD, SENIOR ADVISOR TO PRESIDENT OBAMA. THANKS VERY MUCH.

>> OD TO BE WITH YOU, JUDY. THANK YOU.

>> Lehrer: NOW, THE HIGH SCHOOL DROPOUT PROBLEM, AND WHAT IS BEING DONE ABOUT IT. MARGARET WARNER HAS THE STORY.

>> Warner: AFTER YEARS OF DECLINE, HIGH SCHOOL GRADUATION RATES IN THE U.S. ARE ON THE UPSWING. THAT NEWS CAME FROM A NEW REPORT ISSUED TODAY BY THE AMERICA'S PROMISE ALLIANCE, A NONPROFIT GROUP FOUNDED BY FORMER SECRETARY OF STATE COLIN POWELL. AT AN EVENT IN WASHINGTON WITH EDUCATION SECRETARY ARNE DUNCAN, POWELL SAID HE WAS ENCOURAGED BUT THERE'S MUCH MORE TO BE DONE.

>> WHAT WE HAVE TO DO IS GET EVERYBODY IN THE COUNTRY-- BUSINESSES, POLITICAL ORGANIZATIONS, NONPROFIT ORGANIZATIONS-- TO ALL COME TOGETHER IN A COORDINATED WAY TO GET INTO THE LIVES OF OUR KIDS, TO GET INTO OUR SCHOOLS AND GIVE THOSE SCHOOLS RESOURCES THAT THE KIDS NEED IN ORDER TO BE SUCCESSFUL IN LIFE. THERE'S NO CHILD THAT STARTS OUT IN LIFE WANTING TO BE UNSUCCESSFUL. NO CHILD STARTS OUT WANTING TO BE A DROPOUT.

>> Warner: AMONG THE GOOD NEWS, THE NATIONAL GRADUATION RATE HIT 75% IN 2008, UP FROM 72% IN 2001. AND THE NUMBER OF SO-CALLD DROPOUT FACTORIES-- HIGH SCHOOLS WHERE FEWER THAN 60% OF FRESHMEN GRADUATE FOUR YEARS LATER-- DECLINED TO 1750 IN 2008, DOWN FROM SOME 2,000 IN 2002. 29 STATES IMPROVED THEIR GRADUATION RATES THROUGH SUCH APPROACHES AS SETTING UP EARLY WARNING SYSTEMS TO FLAG STRUGGLING STUDENTS. RAISING THE COMPULSORY ATTENDANCE AGE, TAKING DRIVER'S LICENSES AWAY FROM DROPOUTS AND GETTING PARENTS MORE INVOLVED. BUT IN 18 STATES, GRADUATION RATES DIDN'T MOVE. AND THREE STATES-- ARIZONA, UTAH AND NEVADA-- SAW THEIR RATES SLIP SIGNIFICANTLY. RESEARCHER ALSO FOUND A PERSISTENT GAP BASED ON RACE AND ETHNICITY. MORE THAN 80% OF WHITE STUDENTS GRADUATED IN 2008. BUT FEWER THAN 65% OF HISPANIC OR BLACK STUDENTS DID. AND FOR A CLOSER LOOK AT THE FINDINGS AND WHAT LESSONS THEY SUGGEST NATIONWIDE, WE TURN TO ONE OF THE REPORT'S AUTHORS, JOHN BRIDGELAND. HE'S WRITTEN OR CO-WRITTEN MORE THAN TEN OTHER REPORTS ON THE DROPOUT PROBLEM. AND HE'S CHIEF EXECUTIVE OFFICER OF CIVIC ENTERPRISES, A PUBLIC POLICY FIRM IN WASHINGTON. MR. BRIDGELAND, WELCOME.

>> NICE TO BE HERE.

>> Warner: TELL US MORE, FIRST OF ALL, ABOUT THESE DROPOUT FACTORIES WHICH ACCOUNT FOR HALF OF ALL THE DROPOUTS IN THE COUNTRY. WHAT DO THEY HAVE IN COMMON?

>> WELL, MARGARET, INTERESTINGLY AND TRAGICALLY THESE ARE PLACES WHERE IT'S ABOUT A 50-50 PROPOSITION WHETHER YOU GRADUATE FROM HIGH SCHOOL. SO IMAGINE BEING A STUDENT IN A SCHOOL WHERE THE EXPECTATION IS SO LOW THAT HALF YOUR CLASSMATES ARE NOT FINDING THEIR WAY THROUGH THE GRADUATION LINE.

>> Warner: ARE THEY BIG, ARE THEY SMALL, IN CITIES, RURAL AREAS?

>> DISPROPORTIONATELY FOUND IN URBAN SCHOOL DISTRICTS BUT ALSO IN SUBURBS AND TOWNS AND EVEN IN RURAL AREAS SO WE HAVE TO KEEP OUR EYE IN SCHOOLS ACROSS THE COUNTRY AND NOT JUST FOCUS ON OUR URBAN SCHOOL DISTRICTS.

>> Warner: YOU'VE ALSO POLLED EXTENSIVELY, TALKED EXTENSIVELY WITH STUDENTS WHO HAVE BEEN DROPOUTS. WHAT DO THEY SHARE? WHAT DO THEY HAVE IN COMMON?

>> INTERESTING, AFTER DECADES OF RESEARCH ON THE DROPOUT PROBLEM WE DISCOVERED THAT NO ONE HAD EVER TALKED TO THE CUSTOMERS, TO THE DROPOUTS THEMSELVES SO WE DID SO ALL ACROSS THE COUNTRY IN BIG CITIES LIKE LOS ANGELES AND BOSTON BUT ALSO IN SMALL TOWNS LIKE ST. CLAIRSVILLE, OHIO. WHAT WE DISCOVERED WAS THAT THESE YOUNG PEOPLE HAVE EXTRAORDINARY DREAMS. THEY WANTED TO BE DOCTORS AND NURSES AND JOURNALISTS. ONE GIRL FROM PHILADELPHIA IN OUR FOCUS GROUP SAID SHE WANTED TO BE AN ASTROPHYSICIST.

>> Warner: SHE WAS A DROPOUT.

>> AT THE AGE OF 16 SHE WAS LITERALLY ON THE STREETS. WHAT WE REALIZED THAT AATE LOW OF THESE YOUNG PEOPLE, YES, THEY HAD ACADEMIC CHALLENGES, YES, THEY HAD EXTRAORDINARY FAMILY CIRCUMSTANCES THAT CAUSED THEM TO HAVE HARDSHIP. BUT A LOT OF THEM DIDN'T SEE THE RELEVANCE BETWEEN WHAT THEY WERE LEARNING IN THE CLASSROOM TO WHAT THEY WANTED TO BE IN LIFE, TO THEIR DREAMS.

>> Warner: IN OUR SET-UP PIECE WE DESCRIBED GENERALERICALLY WHAT SOME OF THE STATES TO IMPROVE THEIR GRADUATION RATES DID OR IMPROVE THEIR DROPOUT NUMBERS. BUT GIVE US A SPECIFIC EXAMPLE. PICK A STATE THAT REALLY TURNED THEIR NUMBERS AROUND. WHAT DID THEY DO?

>> LET'S TAKE THE LEADER, THE STATE OF TENNESSEE. THE GOVERNOR AND STATE LEADERSHIP SAID WE NEED 269,000 COLLEGE GRADUATES TO FILL OUR WORK FORCE NEEDS IN THE STATE OF TENNESSEE. SO WITH THAT POOL OF THE ECONOMIC NEED IT HELP GALVANIZE THE STATE. THEN THEY GOT GOOD DATA. THEY FOCUSED THEIR EFFORTS ON THE FIVE URBAN SCHOOL DISTRICTS IN TENNESSEE THAT DISPROPORTIONATELY HAD THE MOST DROPOUTS. THEY MOBILIZED OUTSTANDING EDUCATORS, LEADERS TO HELP PRINCIPALS. MOST IMPORTANTLY PERHAPS THE COMMUNITY-BASED SUPPORTS THAT THESE INDIVIDUAL STUDENTS NEED DAY IN AND DAY OUT TO STAY ON TRACK.

>> Warner: DID THE BLACK STUDENTS OR NON-WHITE STUDENTS IMPROVE AS MUCH TASS WHITE STUDENTS?

>> THE GOOD NEWS IS THAT ABOUT A THIRD OF HIGH SCHOOL DROPOUTS-- THERE HAVE BEEN ABOUT ONE THIRD OF ALL PUBLIC HIGH SCHOOL STUDENTS WHO HAVE DROPPED OUT-- AND ABOUT 50% OF MINORITIES. BUT WE'VE SEEN A GOOD PROGRESS ON AFRICAN-AMERICAN, HISPANICS AND NATIVE AMERICANS. THIS REPORT SHOW CASES THAT GOOD NEWS.

>> Warner: GIVE US ANOTHER EXAMPLE, FOR INSTANCE, A SPECIFIC SCHOOL THAT WAS A DROPOUT FACTORY.

>> INTERESTINGLY, RICHMOND INDIANA, A SMALL TOWN OF ABOUT 40,000 ON THE BORDER OF OHIO AND INDIANA LEARNED IN 2005 THAT IT WAS ONE OF THESE DROPOUT FACTORY HIGH SCHOOLS. THE COMMUNITY WAS OUTRAGED. THEY GOT ORGANIZED. 30 ORGANIZATIONS ACROSS GOVERNMENT SCHOOLS, BUSINESS, COMMUNITY-BASED ORGANIZATIONS WORKED TOGETHER. THEY CREATED SOMETHING CALLED THE WAYNE COUNTY YOUTH DEVELOPMENT PLAN. IT TARGETED THE YOUNG PEOPLE MOST AT RISK. IT MADE SURE THEY ATTENDED SCHOOL. ADDRESSED BEHAVIOR ISSUES. MADE SURE THEY HAD THE MENTORS AND THE TUTORS AND THE SUPPORTS LIKE COMMUNITIES AND SCHOOLS PROVIDE TO MOBILIZE THE MENTORS AND TUTORS TO HELP THESE YOUNG PEOPLE STAY ON TRACK.

>> Warner: ARE THESE SUCCESS STORIES? ARE THESE APPROACHES, CAN THEY BE REPLICATEDED NATIONALLY? HOW REALISTIC IS THAT? SOME OF THEM SOUND EXPENSIVE WITH ALL THIS INDIVIDUAL ATTENTION.

>> INTERESTINGLY IT'S NOT JUST ABOUT RESOURCES. IT'S ABOUT SETTING CLEAR GOALS. WEAVER ENCOURAGED THAT UNDER FEDERAL LAW NOW FOR THE FIRST TIME EVERY STATE, EVERY SCHOOL DISTRICT, EVERY SCHOOL WILL HAVE TO REPORT A COMMON CALCULATION FOR HIGH SCHOOL GRADUATION RATES. IN ADDITION UNDER FEDERAL LAW THEY'LL BE ACCOUNTABLE FOR MEETING THOSE RATES AND ACTUALLY MAKING PROGRESS EVERY YEAR TO MAKE SOMETHING CALLED ADEQUATELY YEARLY PROGRESS UNDER THE NO CHILD LEFT BEHIND ACT.

>> Warner: AMERICA'S PROMISE HAS SET THIS GOAL OF HAVING A 90% GRADUATION RATE OVER THE NEXT TEN YEARS. THIS PROGRESS WHILE IMPRESSIVE ISN'T FAST ENOUGH.

>> WE ACTUALLY HAVE TO ACCELERATE OUR PROGRESS FIVE FOLD FROM THE PROGRESS WE'VE MADE OVER THE LAST DECADE.

>> Warner: HOW DO YOU DO THAT?

>> BASICALLY I THINK WE HAVE THE LEVERAGE NOW OF ACCOUNTABILITY IN THE STATES AND SCHOOLS HAVE TO SET THESE GOALS AND TARGETS. SECOND, WE'RE GOING TO... THE RAPID DEVELOPMENT OF EARLY WARNING SYSTEMS. YOU CAN PREDICT AS EARLY AS THIRD AND FOURTH GRADE STUDENTS WHO WILL DROP OUT FROM HIGH SCHOOL.

>> Warner: YOU HAVE TO START THEN.

>> WE START EARLY. WE GET... WE IDENTIFY THE STUDENTS WHO ARE MOST IN NEED. WE MOBILIZE I THINK THE POWER OF WHAT AMERICA PROMISE IS DOING IS THEY'RE MOBILIZING MENTORS AND TUTORS THROUGH BIG BROTHERS, BIG SISTERS, BOYS AND GIRLS CLUBS ALL THESE COMMUNITY-BASED ORGANIZATIONS THAT CAN PROVIDE STUDENTS THE WRAP-AROUND SUPPORTS THAT THEY NEED. SCHOOLS CAN'T DO IT ALONE.

>> Warner: GOOD LUCK. ON BEHALF OF ALL OF US, JOHN BRIDGELAND.

>> THANK YOU SO MUCH, MARGARET. GOOD TO BE WITH YOU.

>> Warner: THANK YOU.

>> Woodruff: THIS IS PLEDGE WEEK ON PUBLIC TELEVISION. WE'LL BE BACK IN SEVEN MINUTES WITH THE LATEST ON TODAY'S SUPREME COURT ARGUMENTS. THIS SHORT B

>> Lehrer: YOU CAN FIND A LINK TO A LONGER VERSION OF SCOTT SHAFER'S STORY ON OUR WEB SITE.

>> Woodruff: FINALLY TONIGHT, THE SUPREME COURT HEARS ARGUMENTS IN A CASE INVOLVING OVERCROWDED PRISONS IN CALIFORNIA. GWEN IFILL HAS THE STORY.

>> Ifill: SHOULD CALIFORNIA BE REQUIRED TO MOVE THOUSANDS OF INMATES OUT OF THE STATE'S PRISONS TO RELIEVE DRASTIC OVERCROWDING? THAT WAS THE QUESTION BEFORE THE SUPREME COURT TODAY. HERE ARE THE UNDERLYING FACTS. CALIFORNIA PRISONS CURRENTLY HOUSE 144,000 INMATES. IN 2009 A THREE-JUDGE PANEL ORDERED THE STATE TO REDUCE THAT NUMBER TO 110,000 WITHIN TWO YEARS. YET EVEN IF THAT GOAL IS MET, THE SYSTEM WOULD STILL HOLD 30,000 MORE INMATES THAN IT IS DESIGNED TO. MARCIA COYLE OF THE NATIONAL LAW JOURNAL WAS AT THE COURT TODAY FOR THE ARGUMENTS IN THIS CASE. SHE JOINS US NOW. I GUESS TWO QUESTIONS RIGHT OFF THE BAT, HOW DID THE PRISONS GET SO CROWDED AND HOW DID THIS GET TO THE COURT, MARCIA.

>> I'M SURE THERE ARE MANY FACTORS AS TO WHY THE PRISONS ARE SO CROWDED BUT I THINK A MAJOR FACTOR, ALL WOULD AGREE, IS THAT THE UNITED STATES AND CALIFORNIA AS PART OF THAT HAS VERY TOUGH SENTENCING LAWS. TOUGHER SENTENCING LAWS IN THE LAST TWO DECADES THAN PROBABLY EVER BEFORE. I THINK CALIFORNIA MAY STILL BE WHAT WE CALL A THREE STRIKES YOU'RE OUT STATE. THIS CASE THAT CAME TO THE COURT TODAY THAT WAS HEARD TODAY REALLY STEMS FROM TWO LAWSUITS. ONE FILED BACK IN 1990 ON BEHALF OF MENTALLY ILL INMATES. THE SUIT CHARGED THAT CALIFORNIA WAS VIOLATING THE 8th AMENDMENT'S BAN ON CRUEL AND UNUSUAL PUNISHMENT BECAUSE THERE WAS BASICALLY NO TREATMENT FOR MENTALLY ILL INMATES. THE SECOND LAWSUIT FILED IN 2001 WAS OVER SUBSTANDARD MEDICAL CARE IN GENERAL FOR PRISON INMATES IN CALIFORNIA.

>> Ifill: WHEN YOU TALK ABOUT CRUEL AND UNUSUAL, WERE THERE EXAMPLES THAT WERE BROUGHT BEFORE THE COURT ABOUT THE OUTCOME OF THIS OVERCROWD SOMETHING.

>> YES. THERE WERE MANY EXAMPLES. BY THE WAY CALIFORNIA CONCEDES THAT IF THE CONDITIONS WITHIN THE PRISONS ARE NOT GOOD. DURING THE ARGUMENTS JUSTICE BREYER SAID HE HAD LOOKED AT PICTURES THAT WERE SUBMITED TO THE COURT. HE CALLED THE PICTURES HORRIBLE, HORRIBLE JUSTICE SOCIETY MAYOR IMPOSING QUESTIONS TO CALIFORNIA'S ATTORNEY, CARTER PHILLIPS SAID WHEN ARE YOU GOING TO GET AROUND TO THIS IF NOT WITHIN THE TWO YEARS ORDERED? WHEN ARE YOU GOING TO GET AROUND TO PEOPLE SITTING IN THEIR FECES IN A DAZED STATE? IT WAS VERY CLEAR, GWEN, THAT THE COURT WAS VERY MUCH AWARE OF THE CONDITIONS IN THE PRISONS.

>> Ifill: WHAT ARE CALIFORNIA'S OPTIONS FOR REDUCING THAT KIND OF OVERCROWD SOMETHING.

>> WELL, CALIFORNIA, ACCORDING TO ITS LAWYER CARTER PHILLIPS, HAS MADE PROGRESS, HE ARGUED, IN THE LAST THREE OR FOUR YEARS. A RECEIVER WAS APPOINTED BY THE COURTS TO OVERSEE THIS. HE SAID, MR. PHILLIPS SAID THAT CALIFORNIA HAS BEGUN NEW CONSTRUCTION OF FACILITIES AND IT IS LOOKING AT WAYS OF NOT NECESSARILY OP EVANING THE DOOR, THE PRISON DOORS BUT USING, FOR EXAMPLE, IT HAS USED GOOD TIME CREDITS, EXPANDING THE USE OF GOOD TIME CREDITS IN ORDER TO RELEASE PRISONERS A LITTLE EARLIER.

>> Ifill: ISN'T THAT THE FEAR AND THE ARGUMENT IN PART THAT IN ORDER TO REDUCE THE POPULATION THAT MANY PEOPLE ESPECIALLY YOU'RE ESSENTIALLY OPENING DOORS?

>> WELL, THE LAWYER FOR THE INMATES, MR. SPECTER, DONALD SPECTER, HE SAID REALLY THIS ISN'T WHAT YOU THINK IMMEDIATELY OF AS A PRISON RELEASE ORDERS THAT THE DOORS ARE GOING TO OPEN. IT WILL HAPPEN GRADUALLY OVER A PERIOD OF YEARS. AND AS MR. PHILLIPS INDICATED, THERE ARE SAFE WAYS TO DO THIS. BUT I SAW TWO DIFFERENT TRAINS OF THOUGHT EMERGING DURING THE ARGUMENTS. JUSTICES LIKE JUSTICE SOET MEYER, JUSTICE GINSBURG AND EVEN JUSTICE KENNEDY TO A CERTAIN EXTENT EXPRESSED A CERTAIN AMOUNT OF IMPATIENCE. IT'S BEEN 20 YEARS IN THE ONCE CASE JUSTICE GINSBERG SAID. THERE WERE 70 COURT ORDERS IN THE ONE CASE, THE NUMBER OF WHICH HAD BEEN VIOLATED. SHE SAID HOW LONG MUST THE COURT WAIT FOR THE STATE TO MOVE FORWARD, ANOTHER 20 YEARS.

>> Ifill: WHERE WAS JUSTICE ALITO IN ALL THAT.

>> HE REPRESENTED THE OTHER SIDE. HE PRESSED THE INMATES' LAWYER MR. SPECTER ABOUT THE NUMBER THAT THE COURT HAD ORDERED HERE IN TERMS OF THE NUMBER OF INMATES TO BE RELEASED. HE SAID IF I WERE A CITIZEN OF CALIFORNIA, I WOULD BE CONCERNED. AND HE SAID THAT BASED ON EXPERIENCE IN PHILADELPHIA AND THE BRIEFS THAT HAD BEEN FILED ABOUT BY 19 OTHER STATES HE BELIEVED THAT THERE WOULD BE AN INCREASE IN CRIME. HE TOLD THIS LAWYER, EXPERTS CAN ARGUE WHATEVER THEY WANT. HE SAID, I THINK THAT THERE'S GOING TO BE AN INCREASE IN CRIME IF THIS GOES THROUGH. MR. SPECTER THOUGH SAID STATISTICS IN EXPERT TESTIMONY SHOW THAT HASN'T HAPPENED IN OTHER STATES THAT HAVE HAD TO REDUCE PRISON POPULATIONS.

>> Ifill: YOU MENTIONED JUSTICE KENNEDY. DOES HE END UP KIND OF IN THE MIDDLE AGAIN ON THIS?

>> I THINK HE DOES BECAUSE WHILE HE ALSO EXPRESSED CONCERN WHEN HE WAS TALKING WITH THE STATE'S ATTORNEY MR. PHILLIPS, HE SAID AT SOME POINT A COURT HAS TO SAY ENOUGH. YOU HAVE TO DO SOMETHING. THIS IS A VIOLATION OF THE CONSTITUTION. ON THE OTHER HAND, HE SAID TO THE INMATES' LAWYER, I'M CONCERNED ABOUT THE NUMBER HERE. IS THIS NARROWLY TAILORED AS REQUIRED BY FEDERAL LAW TO ACHIEVE THE GOAL?

>> Ifill: FINALLY, ARE THERE OTHER STATES WATCHING THIS AS WELL?

>> I THINK ALL STATES WILL BE WATCHING THIS. I BELIEVE THIS IS THE FIRST CASE TO GET TO THE SUPREME COURT UNDER THE PRISON LITIGATION REFORM ACT TO LOOK INTO THE AUTHORITY OF THE FEDERAL COURT TO ORDER THIS KIND OF POPULATION REDUCTION.

>> Ifill: MARCIA COYLE, AS ALWAYS, THANK YOU SO MUCH.

>> MY PLEASURE, GWEN.

>> Lehrer: AGAIN, THE OTHER MAJOR DEVELOPMENTS OF THE DAY. A LONG-AWAITED PENTAGON STUDY FOUND THE MILITARY'S BAN ON GAYS SERVING OPENLY CAN BE REPEALED WITHOUT A RISK TO READINESS. AND PRESIDENT OBAMA MET WITH CONGRESSIONAL LEADERS FROM BOTH PARTIES TO PLOT THE PATH FORWARD AFTER REPUBLICAN VICTORIES IN THE NOVEMBER ELECTIONS. AN EDITOR'S NOTE BEFORE WE GO: LAST NIGHT, IN THE INTRODUCTION TO OUR STORY ON A FOSSIL FIND IN COLORADO, WE SAID ARCHAEOLOGISTS WERE INVOLVED IN THE DIG. WE SHOULD HAVE CALLED THEM PALEONTOLOGISTS. WE REGRET THE ERROR. AND TO HARI SREENIVASAN, IN OUR NEWSROOM, FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI?

>> Sreenivasan: PATCHWORK NATION HAS MAPPED HIGH SCHOOL DROPOUT RATES SHOWING COUNTIES WITH HIGH AND LOW PERFORMING SCHOOLS. THAT'S ON THE RUNDOWN BLOG. MARGARET BLOGS ABOUT THE TURKISH FOREIGN MINISTER'S REACTION TO ASPERSIONS CAST ON HIM AND HIS GOVERNMENT BY U.S. DIPLOMATS IN THE CABLES RELEASED BY WIKILEAKS. PLUS READ MORE ON THE NEW GUIDELINES FOR THE AMOUNT OF VITAMIN D AMERICANS NEED. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. I'M JUDY WOODRUFF.

>> Lehrer: AND I'M JIM LEHRER. WE'LL SEE YOU ONLINE, AND AGAIN HERE TOMORROW EVENING. THANK YOU, AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org