The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Margaret Warner sorts through Netanyahu's stunning defeat in Israel. Phil Ponce and Jan Greenberg explain two Supreme Court decisions. Elizabeth Farnsworth looks at legislation that would change the ways of going bankrupt. And Spencer Michels reports on a poetry slam in California. It all follows our summary of the news this Monday.

NEWS SUMMARY

JIM LEHRER: Israeli voters swept Prime Minister Netanyahu out of office today. He conceded to Labor Party Candidate Ehud Barak after television exit polls showed the Labor Party winning a huge victory. Nearly 80 percent of Israel's eligible voters cast ballots. We'll have more on the story right after this News Summary. Jordan's King Abdullah said today he will push for the resumption of peace talks between Israel and the Palestinians. He spoke in Washington at the State Department, where he was meeting with Secretary of State Albright. It's his first official visit to the US since becoming king. He spoke of the process fostered by his late father, King Hussein.

KING ABDULLAH: After the elections we, will as always, be there to support the Israelis and the Palestinians to move forward. But I think we must point out that the core issue is the Palestinian-Israeli peace process, and that is what needs to be moved in the right direction. And Jordan will always be there to stand by our colleagues to make sure that stability and peace is realized in our region.

JIM LEHRER: On the Kosovo conflict today, bad weather caused most NATO bombing runs to be scrubbed, but by tonight the skies cleared and the pace quickened again. Earlier, Yugoslav media reported explosions and showed damage in Belgrade suburbs. Residents said they heard planes and aircraft fire over the capital. NATO said again Serbs were using ethnic Albanian refugees as human shields, placing them under bridges and at other targets. Pentagon Spokesman Ken Bacon commented.

KENNETH BACON: Obviously, when you're dealing with an opponent who has no respect for the lives of Kosovar Albanians and is willing to sacrifice them, essentially murder them, it complicates our military operations. But we're proceeding as carefully as we can to try to avoid that. And I think we're making very significant progress against the forces on the ground, despite this type of complicating factor that's being thrown up by Milosevic.

JIM LEHRER: Bacon said from one-third to one-half of the civilians killed by NATO missiles were put in harm's way by Yugoslav forces. The US Supreme Court handed down important welfare and redistricting decisions today. It ruled states must grant equal welfare benefits, no matter how long a recipient has lived in the state. The 7-2 decision invalidated a California law. The Justices said it violated the constitutional right to travel. On redistricting, the court raised the bar for federal judges who throw out reapportionment plans that appear to be based on race. It said a three-judge court in North Carolina was wrong to strike down a redrawn district without holding a trial. We'll have more on these two rulings later in the program tonight. A former Australian intelligence official was charged in Washington today with attempted espionage. The FBI caught Jean-Philippe Wispellier in a sting operation. He's accused of selling more than 700 classified US defense documents to an undercover agent in Bangkok, Thailand. He was arrested over the weekend at Dulles International Airport outside Washington. There was another bad storm in the central US Sunday. Violent tornadoes hit western Iowa, killing two people, injuring at least sixteen. The storms destroyed six homes, damaged farms, and dropped golf ball-sized hail and eight inches of rain. The weather front moved northeast overnight, and caused power outages in Wisconsin and Illinois. And that's it for the News Summary tonight. Now it's on to the Israeli elections, two Supreme Court decisions, new bankruptcy laws, and a poetry slam.

FOCUS - ISRAEL VOTES

JIM LEHRER: Margaret Warner has the Israeli elections story.

MARGARET WARNER: The voting places had barely closed tonight when Israeli Television reported their exit polls, indicating that Labor Party Candidate Ehud Barak had won the prime minister's job with a sweeping 57 percent to 58 percent of the vote. Cheering broke out at Barak's headquarters, though Barak himself wouldn't claim victory until the final count was in. Prime Minister Benjamin Netanyahu, however, appeared at his headquarters to concede defeat. In a surprising move, he also resigned his leadership of the Likud Party. Later tonight, crowds thronged Rabin Square in downtown Tel Aviv to celebrate. The 57-year-old Barak, one-time chief of Israel's defense forces, is the most decorated officer in the country's history. He's portrayed himself as heir to the late Prime Minister Yitzhak Rabin, who was assassinated in 1995. The divisive five-month campaign for Israel's top job began last December when Netanyahu's coalition government collapsed, in part over differences over the outcome of the October Israeli-Palestinian peace talks at the Wye Plantation in Eastern Maryland. Netanyahu faced four major challengers, and since a winner must gain an outright majority, many observers expected a runoff election in June. But in the final days of the campaign, three long-shot candidates unexpectedly pulled out of the race. Last Friday, it was Israel's first-ever Arab candidate for prime minister, 42-year-old Azmi Bishara, who had run, he said, to give Israel's one million Arab citizens a greater voice in their country's politics. Then yesterday, two others withdrew: Ultra-nationalist legislator Benny Begin, son of the late Prime Minister Menachim Begin, and former Likud Party member, now head of the center party, Yitzhak Mordechai. Mordechai was fired as defense minister by Netanyahu earlier this year, and was bidding for the support of other disenchanted members of the prime minister's party. The three withdrawals ensured a head- to-head contest today, dashing Netanyahu's hopes for a runoff. Turnout was heavy, after one of the hardest-fought campaigns in Israel's history. It's only the country's second direct election for prime minister. The candidates engaged in what observers viewed as an American-style war of words and images, using American political consultants to produce ads and spin issues to Israel's 4.3 million eligible voters. Israelis also elected a new 120-seat parliament, choosing among more than 30 different parties.

MARGARET WARNER: For more on today's outcome, we turn to Yitshak Ben-Horin, the Washington bureau chief for the Israeli newspaper, "Maariv;" Robert Satloff, executive director of the Washington Institute for Near East policy -- he just returned from a three- month visit to Israel; and Thomas Friedman, foreign affairs columnist for the "New York Times." He covered Israel and the Middle East for the "Times" during the 1980's, winning two Pulitzer Prizes. His latest book is "The Lexus and the Olive Tree: Understanding Globalization." Yitshak Ben-Horin, how do you explain these stunning results, this huge margin?

YITSHAK BEN HORIN, Maariv Newspaper: First of all, I don't think that anybody can really right now in the middle of the Russian revolution, second Russian revolution can really comment on what happened. And what I can say this election not like the previous ones, that basically it was about peace and security. This one was on the character of the prime minister of Israel, and the second one was the secular Russian immigrants that make this revolution happen that now they fall out of balance of power, the religious party. That's basically about it.

MARGARET WARNER: Tom Friedman, do you basically agree this is a referendum on Benjamin Netanyahu and his character?

THOMAS FRIEDMAN, New York Times: I think it was, but I it is something more, Margaret. I think this election is broadly about two things. I thinkit's a statement by the majority in Israel that they want to move on with the peace process. They want to get on with it. And they want a serious peace process, led by someone who is not going to give things away or give things away easily, but who will not go out to create obstacles. And when the process meets obstacles, he will try to solve them, not to build them. I think that's really what they want. And I think other thing is that it is about a reapportioning of the pie inside. Again, it's the majority with a key swing vote by the Russians saying that from now on we want money to be apportioned, not by some tiny majority in the West Bank or the ultra orthodox. They should get their share, but not more than their share. And there should be real proportionality for the majority secular Israelis.

MARGARET WARNER: How do you see it, Rob Satloff, in terms of the size of this victory?

ROBERT SATLOFF, Washington Institute for Near East Policy: I think the victory was mostly because the Israelis didn't want Netanyahu to lead them any longer. I think it was primarily a referendum on him. Netanyahu came into power in 1996 by forging a coalition of all the disparate groups, Russians, Jews from the Middle East, the underclass, the people who feel downtrodden, the anti-elite. He couldn't keep that coalition intact while in government. It came apart. And the coalition split and splintered, precisely because they all wanted a larger piece of the pie. I would disagree slightly with Tom. For the last three months, I didn't hear a single debate really in Israel about the peace process. This wasn't over foreign issues, security issues. There really is a great legacy that Netanyahu does leave, which is a national consensus on how to make peace. Labor and Likud today are closer than they've ever been before on the need to make peace with security; concessions, yes, but security-mind positions at the same time. This election was over the person and the leadership of Netanyahu and what he did and didn't provide.

MARGARET WARNER: Tom, would you want to respond on that point about really how important -

THOMAS FRIEDMAN: I think it was about his character, what he did and didn't provide, though, I think was a sense that he was really committed to taking this peace process to its final conclusion and could put it together. I don't think you can say it was about his leadership but it wasn't about the peace process. It's about his leadership about what? I think is a sense that people want to move on with it. I couldn't agree more that Netanyahu broke down the wall between labor and Likud on the security issue. I've written this myself. But having broken down that wall and really helped forge a sort of core in the center, a majority for Oslo, he wasn't really ready to lead that core to its final conclusion, and I think that is part of this vote.

MARGARET WARNER: Do you agree?

YITSHAK BEN HORIN: Netanyahu try hardly to push forward the issue of security -- try to tell the Israeli people that Barak will divide Jerusalem, try to tell them that with Barak they will give back more territories for less. The Israelis didn't buy it because eventually they know Barak. Barak is the most decorated Israeli soldier. He was the chief of staff. He was the guy that posing to a woman in '73 went to Beirut to kill the assassination of the Israeli sportsman in the Olympics. He was the one who operated the rescue of Israel in Entebbe. So nobody believed that Barak is going to give up very easily on land.

MARGARET WARNER: So Rob Satloff, is it fair so say that some of the things that worked for Netanyahu in '96 just didn't work this time?

ROBERT SATLOFF: That's right. Netanyahu ran a brilliant campaign in '96 as an opponent -- as running for from the outside.

MARGARET WARNER: And bringing together other outsiders.

ROBERT SATLOFF: Bringing together everybody on the outside. The problem is he didn't so a good record to run on as the incumbent. You can't run as an incumbent on fear. You have to run on achievement. And he tried to rehash the same campaign in '96, and it didn't work anymore because people wanted -- what have you done for me lately? And lately unemployment is up, the peace process is stalled, the economy is stalled, and he had no record to run on in the last six to 12 months.

MARGARET WARNER: So Tom Friedman, what do you think people thought they were voting for in Ehud Barak?

THOMAS FRIEDMAN: I think they certainly don't think they're voting for a dove. I don't think this man, Ehud Barak, I don't think he's doing -- I think he's going to be a serious, tough, negotiator, but I think they were voting for again I would say two things, someone who really will be committed to taking this peace process as far as it can go, and who knows how much farther it can go, whether it will achieve the conclusion. But I think he will be seriously committed to it. And I think he will be seriously committed to reslicing the Israeli pie and no longer hostaging, you know, inordinately-sized pieces for an ultra orthodox and ultra nationalist minority.

ROBERT SATLOFF: Just on this last point, it's very interesting to look at the parliamentary results, because the two parties that made the biggest jumps in their votes were the two parties at loggerheads over the issue of secular and religious. Out of nowhere, a party that had -- that stands only for anti-clericalism now has six seats. And a party that is the most clerical party, the Sephardic Ultra Orthodox Shafs Party now goes up to 15 seats, almost as many as the Likud itself. It's absolutely remarkable. The two at the loggerheads of the secular-religious divide both boost, and the Likud, the governing party virtually collapsed -- less than 20 seats. Now they're truly out in the wilderness for a period of time.

MARGARET WARNER: How important do you think this secular-religious divide was in these results, and why has it become a of growing importance?

YITSHAK BEN HORIN: Imagine all the British islands, 50 million people in ten years, in a decade coming and spreading all across America. It would change the American politics all over. That's what happened in Israel. One million Russians in one decade came to Israel, thus, they're in a way on security issues, they're more Likud guys, they're Republicans.

MARGARET WARNER: Which is why they went heavily for Netanyahu in '96.

YITSHAK BEN HORIN: Yes. And another thing, four buses explode in downtown Tel Aviv and Jerusalem. That was the brilliant Netanyahu campaign. What happened now that those Russians toughen on security, but they come up with the conclusion that Barak also, as Israeli soldiers, can do the job, as well. But for the other end, there are more labor, more democrats on civic issue of secular and the religious. That's the reason it's come out in one point of the election, one Russian party put out a slogan about the entire internal ministry -- Shafs Control, nyet - nash control -- which means no Shafs will control - - we control the internal ministry. And that's all about the election.

MARGARET WARNER: Tom, you've been writing about this divide for a long time. Do you think it's more pronounced now?

THOMAS FRIEDMAN: The secular-religious divide?

MARGARET WARNER: Yes.

THOMAS FRIEDMAN: There's no question about it for several reasons. One is simply the rise in numbers of the religious communities in Israel.

MARGARET WARNER: Explain briefly what you mean in terms of what their agenda is. I don't mean a 12-point program, but what, they want the state run as a theocracy?

THOMAS FRIEDMAN: I mean, I think that would be their ultimate dream maybe, but I think in realistic terms, they really want to use the state's resources to support their schools and institutions as much as possible. I don't think they have too many illusions that the state of Israel will be run as a theocracy, but they certainly want it, as I say to draw on its resources. It's also been sharpened, Margaret, because as the walls around Israel have fallen, as Israel has integrated into the Arab world and into the Middle East, it's meant an influx of everything from 500 cable stations to smut pornography, pizza hut and McDonald's and cable television. And as a result, there is a deep concern among the ultra orthodox not wholly without cause, that as Israel integrates into the Middle East, what if what happens to Israeli Jews is what happens to American Jews when they assimilated into America, and I think there has been a concern within other religious communities of -- you know -- when these walls fall, what's going to happen to us? And that has, I think, sharpened their own desire to put up some internal walls. So you have got both the regional and international factors as well as simply the local ones working.

MARGARET WARNER: And Rob Satloff, you got back yesterday. What was the tenor of this campaign is this there's been a lot of discussion about American political consultants were heavily involved for Mr. Netanyahu and for Ehud Barak. Did it make a difference? How?

ROBERT SATLOFF: Well, it's sort of sad to say. The two candidates succeeded in creating an issue-free campaign. It was almost totally personality driven. Two months ago they stopped talking in any serious way about Lebanon, about future relations with the Palestinians, about relations, strategic ties with the United States. And this goes equally for Barak and Netanyahu. The last two months have been almost totally about wooing the Russian vote through appeals to Russian nationalism, through every candidate going to Moscow. It used to be you had to go to Washington to get a picture with the president. In this campaign, you went to get a picture with Primakov. It was remarkable. And there was the Sephardic, Middle Eastern-Jew, Russian divide -- very slick media consultants. You could see very slick media campaigns every night on television, but the level of discourse had really gone down. Ironically, only the fringe candidates, the far right candidate, Benny Begin, and the far left candidate, the Arab candidate injected ideas into this campaign because Israelis are now thinking about more basic issues like apportioning the pie than big picture issues like the future relations with the Palestinians.

MARGARET WARNER: Would you agree, kind of a debased political debate?

YITSHAK BEN HORIN: Talking about --

MARGARET WARNER: This current campaign?

YITSHAK BEN HORIN: Talking about American influence, for me, in a way, maybe Netanyahu is a kind of a Richard Nixon guy, a -- guy, well-educated, but self-destructive, paranoia. He distance every talented guy from himself and a lot of lies - for my country.

MARGARET WARNER: All right. Thank you gentlemen all three very much.

FOCUS - COURT WATCH

JIM LEHRER: Two Supreme Court rulings, and to Phil Ponce.

PHIL PONCE: They dealt with two important issues of the term: Whether states can limit welfare benefits for new residents, and how race can be used in drawing the boundaries of congressional districts. Here to explain these decisions is NewsHour regular Jan Crawford Greenburg, national legal affairs correspondent for the "Chicago Tribune." Jan, let's start with the welfare case first. It came out of California. What is it that the state of California wanted to do?

JAN CRAWFORD GREENBURG: Well, in this era of welfare reform, California wanted to limit the payments it would give new residents, people who had been in the state less than one year, to the amount they would receive in their original state, in the state that they came from.

PHIL PONCE: And so, for example, one of the Justices cited an example of what it would mean to a family of four moving from Mississippi to California.

JAN CRAWFORD GREENBURG: Right.

PHIL PONCE: What would the difference be as far as how much monthly payments they got in welfare benefits?

JAN CRAWFORD GREENBURG: In the court's ruling today, Justice Stevens, who wrote the majority, showed the extreme impact that this scheme could have. Like you said, a family of four from Mississippi would get $144 in the state of Mississippi. When they moved to California, a similar family in California would be getting $673. But the family of four from Mississippi for the next year would only get $144, even though it costs them the same to live in California.

PHIL PONCE: As people getting the full, the higher amount, Californians who had been there a while.

JAN CRAWFORD GREENBURG: Right, more than one year.

PHIL PONCE: And why did the state say it was in favor of this scheme? What was the reason behind it?

JAN CRAWFORD GREENBURG: They said it was very important for them to keep the costs of welfare under control. This was their most expensive welfare program, the temporary assistance to needy families. It costs $2.6 billion. And they said that this would be a good way for them to save about $11 million that they could use that money, that savings, to put into new programs as they're trying to reform welfare, for example job training. That would be something they wanted to reallocate these funds toward.

PHIL PONCE: And was there also a concern that states that had "generous welfare payments" might attract people from other states where the welfare benefits were not quite as "generous"?

JAN CRAWFORD GREENBURG: Some people made that argument that California would act as a welfare magnet, but certainly the evidence was conflicting on that issue. And there was other evidence that showed that people never, you know, shop around to find a state where they can get the most in welfare. So that was really unclear. Of course, as I say, California said that this was, you know, very important for them to save money. Now, the people who were hard hit by this program say, that's not really the reason. They wanted to keep us out because we are poor. And in the opinion today, Justice Stevens noted that California could save the same amount of money simply by cutting about 72 cents a month for every beneficiary.

PHIL PONCE: Because, ultimately the Supreme Court looked at that scheme and said -

JAN CRAWFORD GREENBURG: Today's scheme was unconstitutional and that California could not do that, and if they wanted to save $11 million a year, they could just cut 72 cents off the payments that every beneficiary got. It would amount to the same thing.

PHIL PONCE: So the court said this was unconstitutional based on what reasoning?

JAN CRAWFORD GREENBURG: The right to travel, which is as the Court said today, deeply embedded in Supreme Court jurisprudence, though nowhere mentioned in the text of the Constitution.

PHIL PONCE: There is a constitutional right to travel?

JAN CRAWFORD GREENBURG: Yes. And the Court has held that for decades and decades. Justice Stevens today said that the right to travel is very important. It stems from notions of personal liberty and the concept of the United States as a federal union. He stressed that the right to travel really encompasses three areas: For example, it protects the right of people to travel through a state, to go from one state to another, on the interstate. And a state couldn't erect a barrier to keep people from traveling through. The right to travel also protects the temporary visitor, ensures that the temporary visitor to a state won't be treated as the court said today, like an alien. And finally, the right to travel protects the person who wants to become a more permanent resident. And that is what the case centered on today, people who want to become more permanent residents. And for them, and this was a key part of the holding, the right to travel also encompasses another right found in the Constitution, and that's in the 14th Amendment. The court said today that the right to travel also means that newly arrived citizens will get the same privileges and the same immunities that people who are already established in the state get. And that constitutional clause, that privileges and immunities clause, which is in the 14th Amendment, is rarely invoked. And today the court invoked it. And Justice Stevens used very sweeping and strong language. And he got the support of six other Justices.

PHIL PONCE: So what's the impact?

JAN CRAWFORD GREENBURG: The impact in the short term means California and 14 other states cannot implement these kind of programs.

PHIL PONCE: Because 14 other states also had the same kind of rule where if you moved to this state, the old benefits level will hold for a year, not the new "higher" level?

JAN CRAWFORD GREENBURG: That's right. And those states included Illinois, Pennsylvania, you know, quite a few large states. But it also means that other states grappling with welfare reform can't do this. They won't be able to implement these programs.

PHIL PONCE: So it is back to the drawing board for those states then, as for as the level of benefits for newcomers?

JAN CRAWFORD GREENBURG: Under this scheme, yes.

PHIL PONCE: Jan, let's go to the second case. It's out of North Carolina and it's a redistricting case. Tell us about that. What were the facts in that case?

JAN CRAWFORD GREENBURG: This case shows how complex and convoluted some of the redistricting efforts have been on the Supreme Court as it's tried to come to terms when states, when they're seeking to draw legislative districts, can ever take race into account. Some states have sought to add more minorities to increase minority representation in Congress, and have drawn districts that do take race into account to increase --

PHIL PONCE: This is a congressional district, the 12th District in North Carolina.

JAN CRAWFORD GREENBURG: Right.

PHIL PONCE: Where -- what was the characteristic of how the state tried to draw the boundary lines there?

JAN CRAWFORD GREENBURG: They tried to encompass, initially, and this again is a convoluted history and quite complex procedurally, it's the third time the court has taken up this district, and the state keeps going back to the drawing board, but it's a long, squiggly district that goes down the interstate. And it draws in a lot of African-Americans and a lot of Democratic voters, the district.

PHIL PONCE: So it had been challenged because race had been used as a predominant factor, which the Supreme Court has said you can't do that.

JAN CRAWFORD GREENBURG: Right. The court in 1993 said white voters could challenge some of these districts as reverse discrimination. And since then, the court has been pretty hostile to efforts to create these kind of race-based districts.

PHIL PONCE: But today the court ruled?

JAN CRAWFORD GREENBURG: Right. Today the court issued a pretty rare victory for civil liberties groups and others that support them and said that federal judges should not be so quick to invalidate these districts if evidence shows that there were other factors involved in creating them. For example, simply because a lot of African-Americans are in the district doesn't mean that it's necessarily drawn based on race. Justice Thomas, who wrote the opinion today, said, "African-Americans often are very loyal Democrats." And that's a legitimate reason for drawing a district to, try to get in as many Democrats as possible.

PHIL PONCE: So as long as the predominant factor might be politics -

JAN CRAWFORD GREENBURG: Something other than race.

PHIL PONCE: -- Democrat allegiance as opposed to race than it might be okay.

JAN CRAWFORD GREENBURG: Right.

PHIL PONCE: And the impact of this case?

JAN CRAWFORD GREENBURG: The impact of this case means that lower courts now will have to look at these districts a little more closely. They can't just toss them out if the evidence is in dispute. And it also could give some more guidance to legislators who are trying to draw these districts, particularly after the next election in the 2000 Census.

PHIL PONCE: Because after the 2000 Census there will be reapportionment, in other words, states might get different shares of how many congressional districts they're entitled to, soy they'll have to go through this exercise.

JAN CRAWFORD GREENBURG: Right. And they'll redraw those districts all over again. That's what redistricting is all about.

PHIL PONCE: Jan Crawford Greenberg, thank you very much.

JAN CRAWFORD GREENBURG: Thank you.

PHIL PONCE: Still to come on the NewsHour tonight, reforming the bankruptcy laws, and a poetry slam.

UPDATE - BANKRUPTCY REFORM

JIM LEHRER: Our bankruptcy update begins with an excerpt from a Tom Bearden report last year.

SHIRLEY NICHOLS: [moving] Yeah, that comes out, and then, this is the side that comes loose right here.

TOM BEARDEN: Shirley Nichols is moving to a house where she'll have six roommates to help pay the rent. It's not the kind of living situation that most 40 year olds who make a pretty good living would find themselves in. But Nichols can't afford to have a place by herself, because she was forced into bankruptcy last October.

SHIRLEY NICHOLS: I had worked entirely too hard and became ill, and then once I was ill, my doctor essentially told me to quit my job or consider dying. And those were pretty tough options. So I quit my job.

TOM BEARDEN: Nichols was out of work for 14 months. During that time she had no health insurance and many of her medical bills were charged to high interest credit cards. She found a less stressful job in public relations, but it pays a lot less. She tried to keep up, but interest on the $30,000 worth of debt she built up kept compounding. Finally-

SHIRLEY NICHOLS: I spoke withan attorney, and he gave me my options, and I agonized over that for a month. And I went back to him, and I said, I don't really feel that I have another alternative, so I filed for bankruptcy. And here I am.

TOM BEARDEN: Shirley Nichols is far from alone. Last year a record 1.3 million Americans filed for personal bankruptcy. That's a more than 350 percent increase since 1980, when just under 200,000 bankruptcies were reported. In a complete reversal of past trends bankruptcies are rising, in spite of an extremely healthy economy. Why this is happening has become a matter of considerable debate. Iowa Senator Chuck Grassley.

SEN. CHARLES GRASSLEY, [R] Iowa: There is no shame anymore with bankruptcy. Some people use bankruptcy for financial planning, and that's wrong.

TOM BEARDEN: But others, like Bankruptcy Attorney Bob Weed, who represented Nichols, paint a far different picture.

BOB WEED, Bankruptcy Lawyer: The credit card companies say that the stigma is gone from bankruptcy. What's gone on is they've spent the last 20 years getting rid of the stigma against debt, and if debt continues to rise explosively, bankruptcies have to follow, because people get into a situation where they can't pay.

TOM BEARDEN: Under current law people have a choice as to how they file for bankruptcy. Under one section, called Chapter 13, they get to keep most of their assets, but must agree to a repayment plan for any remaining debt. Under Chapter 7, most assets are converted to cash, and the money is used to pay off secured debt, like mortgage and car loans. Unsecured debt, like credit cards, is simply erased. About 70 percent of those who file for bankruptcy, like Shirley Nichols, use Chapter 7. [hearing] That brings them to hearings like this one in Alexandria, Virginia. A federal trustee reviews the case and if he or she determines that nobody is trying to hide assets and if no creditors object, the debtor gets a fresh start. But at congressional hearings, lobbyists representing retailers, banks, and creditors say all this is far too easy. Mallory Duncan, with The National Retail Federation, says that hundreds of thousands of people, who can afford to pay at least some of their debt, are walking away scot-free.

MALLORY DUNCAN, The National Retail Federation: There are a lot of high-profile bankruptcies. You see people like Kim Basinger or Burt Reynolds or Tony Braxton filling for bankruptcy. Was it-a year ago People Magazine had a cover story called "Going Broke on $33 Million a Year," and basically featuring a number of celebrities who decided to wipe out their debts, who were having problems with debts. And people who might have been on the edge, who might have thought, well, can I make it or not make it, when they see someone like that and they continue to be celebrated afterwards, they say, well, maybe this is the approach to take.

TOM BEARDEN: So credit card companies have gone to Congress for relief. Two bills have been introduced that would make it harder for people to discharge their debt under Chapter 7.

JIM LEHRER: Elizabeth Farnsworth in San Francisco takes it from there.

ELIZABETH FARNSWORTH: The bills Tom Bearden mentioned are back again this year in slightly different form. Last week the House passed its version by a vote of 313-108. The Senate may vote on its bill this week. There are some differences, but under both bills an income, or means test would make it harder to file under chapter 7, which erases debt after liquidation of assets. More people would have to file under chapter 13, which would require more debt repayment. For more, we turn to two professors of law. Todd Zywicki of George Mason University School of Law in Virginia testified before Congress in favor of the House and Senate bills. And Karen Gross of New York Law School is the author of "Failure and Forgiveness: Rebalancing the Bankruptcy System." Todd Zywicki, besides the Hollywood cases we just heard about, what's wrong with the current laws? Why is this new legislation necessary in your view?

TODD ZYWICKI: Well, Elizabeth, America has one of the most generous bankruptcy systems in the world currently, and it's always been one of the most generous, but in the current atmosphere, what we see is 1.4 million bankruptcies, this in a time of 5 percent or less unemployment, rapid economic growth, a roaring stock market, 1.4 million bankruptcies has caused a lot of people to question. That's more than the entire decade of the Great Depression put together. Now, as I said, we have one of most generous bankruptcy systems in the world, which is good. It encourages risk taking and it provides a safety net for people who fall on hard times, but the problem is that there are too many people who are preying on that generosity or taking advantage of that same generosity, abusing the system, walking away from debts that they can afford to pay. This bill is targeted at those people. It leaves people who truly needs bankruptcy relief completely unaffected. It's only aimed at those high-income debtors who have a significant ability to repay their debts but choose instead to walk away by filing chapter 7 rather than chapter 13.

ELIZABETH FARNSWORTH: Karen Gross, do you think the system is too generous and new legislation is necessary?

KAREN GROSS: I absolutely do not believe the current system is to too generous. Indeed, Todd misunderstands, I think, what's been happening in our economy. The growth in our economy has not filtered down. It has stayed at the top. And most debtors are real people with real debts and real problems. And for them, the bankruptcy system is a very important safety net. It would be like saying, if more people suddenly went to the emergency room because they were ill, we ought to shut down emergency rooms. Instead what we ought to do is figure out why so many people currently need to access the bankruptcy system.

ELIZABETH FARNSWORTH: Okay. Mr. Zywicki, your response to that?

TODD ZYWICKI: Well, I agree completely with Professor Gross that most of the people in the bankruptcy system should be in the bankruptcy system. That is who the bankruptcy system is designed for. The problem is that there are an identifiable group of high-income debtors who should not be in the bankruptcy system. I'll give you an example. Dr. Robert Cornfield of New York. His income plummeted we'll say from $400,000 to $300,000 a year. He was spending $53,0000 a year on private school tuition for his kids; he was driving a Range Rover; he was spending $1200 a month on food. He filed for bankruptcy. These are not the people -- Dr. Robert Cornfield is not at the bottom of the economy. Dr. Robert Cornfield is at the top of the economy. This bill says, "Dr. Cornfield, you have the ability to repay your debts. You should repay what you can pay." We're not going to deny you the ability to file bankruptcy. All we're going to do is say that you should repay your debts as a condition for filing bankruptcy. I don't see what could possibly be wrong with requiring somebody making $300,000 a year to pay back some of their debts.

ELIZABETH FARNSWORTH: What's wrong with that, Karen Gross?

KAREN GROSS: Well, let's start with the fact that the people who favor this legislation always talk about the rich and the famous debtors. But the rich and the famous debtors are a very small proportion of the debtors who access the bankruptcy system. So what they've done is created an enormous piece of legislation that's very expensive that will cost all debtors, including those who need it, a lot of money and time to, capture a very few who may be abusing the system.

ELIZABETH FARNSWORTH: Excuse me for interrupting, but why will it cost them money and time?

KAREN GROSS: Well, first of all there are lots of reasons why it will cost money and time for these people. The new test has lots of hurdles and a number of people go into the system who do not have lawyers. So there's going to be a number of steps that have to be taken before these individuals can access the system.

ELIZABETH FARNSWORTH: And by the hurdles you mean the means testing, right? Just explain that briefly while we're here.

KAREN GROSS: Well, the means testing is a test, and it's drafted differently in different versions of the legislation. But it's a threshold requirement that debtors have to meet before they can go into the bankruptcy system. And the Congressional Budget Office has recently done an economic study, which demonstrates that this effort will be very expensive for all debtors, not just the ones we're trying to capture. It seems to me the new legislation is much like using a cannon to kill a gnat. Are there some people, a small number, who are abusing the system, yes. But what we're doing is we're hurting the vast majority of very good people, needy people, in the effort to deal with a very, very small number of debtors who are bad actors.

ELIZABETH FARNSWORTH: Mr. Zywicki, before we go any further, explain a little about how this works. How much discussion would a judge have, for example, under this income or means testing?

TODD ZYWICKI: Well, Elizabeth, the way it works is, and I think that Professor Gross may not have told the full story, there's three requirements to meet the means testing, as she said. There's a little bit of variation. But the primary requirement is that means testing simply doesn't apply to anybody who makes less than the national medium income, which, for example, is $51,000 for family of four.

ELIZABETH FARNSWORTH: So if you don't make that much, you would not be forced to go into chapter 13.

TODD ZYWICKI: Exactly. 80 percent of those who file bankruptcy will be dropped out right at that point. Then you have to show that you have an ability to repay a certain percentage of your debts under the current draft of the House bill, say $6,000 over the next five years. And then you also -- but there's also relief in case you have some sort of extenuating circumstances that say, "look, I don't have the ability to repay this. I've got medical expenses or I've got a relative I need to take care of," something like that. Now, everybody agrees pretty much everybody, I'm not sure if Professor Gross agrees, but everybody agrees that if you have the ability to repay your debts, a substantial portion of your debts without significant hardship you should be required to do so.

ELIZABETH FARNSWORTH: And just explain how that would work so we understand that.

TODD ZYWICKI: Well, under current law, it's completely open to the discretion of the judge, and the current system in an attempt to police that is complete chaos and complete confusion. The CBO study that Professor Gross refers to does not take account of that. Under this new law, what theydo is they give essentially a guide to the judge and to the trustee on the front. And they say, "look, here is a guide of expenses that a person living in this region of the country should be able to use for food, for clothing, for housing, all these sorts of things." In addition to that, they would be allowed to keep their car, keep their mortgage. They'd be allowed to keep all of what the setup piece referred to as secured debts. And that would be part of their budget also. So essentially once you add up all of that, subtract it from what the person's ongoing income is, and then determine is there a sufficient amount left over for somebody to be able to repay a certain amount of their debts. So essentially what it does is takes the current system which is chaos, confusion, judges willy-nilly making decisions and gives the judges some guide but not a straitjacket, because the person can still at the end show look, Your Honor, this -- I have extenuating circumstances here.

ELIZABETH FARNSWORTH: Ms. Gross, who will this legislation -- it still has to pass the Senate and go into the Conference Committee and then be signed by the President. If it does pass, if it is signed, who will it help and hurt the most in your view.

KAREN GROSS: In my view, and can I just back up for one second. I just want to say that the new legislation takes away a lot of discretion from the judges. In my mind, that's not a good thing. I trust bankruptcy judges to make thoughtful and reasoned decision. But as to who this bill will hurt, it will hurt women, it will hurt children, it will hurt the elderly and it will hurt minorities.

ELIZABETH FARNSWORTH: Because?

KAREN GROSS: It will hurt them -- just hearing Todd describe the system shows you how complicated it is. And to the extent the bill does provide some protections for women and children, it's women in children in non-intact families. So women and children who are accessing the system as debtors will have a harder time, because somebody is going to review all of these cases. And even if they are in the system, if they get through all of those hurdles, there are a number of other provisions in the course of these bills that do not help, despite what people say, will not help consumers, will not help women, and will not help children. And everybody focuses on the means tests, and they forget that there are hundreds of other provisions that are very detrimental. If we only look at them and unravel them as they happen in practice.

ELIZABETH FARNSWORTH: And very briefly, we don't have much time, who do you think this legislation would help the most?

KAREN GROSS: I think that without question it helps creditors. I think the unsecured creditors think it will help them the most. I think though that the real winners in all of this will be the secured creditors.

ELIZABETH FARNSWORTH: You mean, the mortgage, people that hold the mortgages, the people that sold the cars.

KAREN GROSS: That's right. I think people who took an interest in the debtors collateral will ultimately be the real winners in this. And credit card companies will be partial winners, not as big a winner as they think they'll be, and the losers will be the people that the system was designed to help. That's very sad.

ELIZABETH FARNSWORTH: All right. Well, that's all the time we have. Thank you both very much.

KAREN GROSS: My pleasure.

FINALLY - YOUTH POETRY SLAM LEAGUE

JIM LEHRER: Finally tonight, a war of words and poetry: Spencer Michels reports.

AJA CAVETANO: Who am I? Who am I? I am Mexican, African American, Native American, and Nicaraguan.

SPENCER MICHELS: 16-year-old Aja Cayetano was the leadoff contestant in a competition among two teams of young, street-wise poets held at a San Francisco bookstore.

AJA CAVETANO: Man, remember the 80's? The mayfest dance and pompom girls? Now, that's the time where I was free -- free to be me and walk wherever I wanted to go.

SPENCER MICHELS: Aja's team is made up of women up to age of 21, all affiliated with an agency that helps young women at risk. The other team was all young men from a detention home called Log Cabin run by the San Francisco Probation Department. 15-year-old Djalma Majani Tillett is one of the team's stars.

DJALMA MAJANI TILLETT: The only way you'll find the enemy, man: Stare deep off in the mirror at the enemy plain, and the century insane, in this century insane.

SPENCER MICHELS: These contests, called poetry slams, have become increasingly popular as a way to reclaim poetry's oral traditions. An organization known as Writers Corps saw them as a tool to reclaim kids in trouble. The corps now administers poetry slam leagues in the Bronx, Washington, DC, and San Francisco. Janet Heller is project manager of the San Francisco operation.

JANET HELLER, Writer Corps: Getting interested in writing, being a little bit more introspective, and then having the opportunity to read, like at a slam, just helps kids be more confident in themselves, and they communicate better in groups, their vocabulary increases, and overall they just -- they want to be more directed.

DJALMA MAJANI TILLETT: So I'd sell drugs, I'd rob people, you know, but not that's what I do now. That's the past, and if I dwelt on the past, I would be living in the past.

SPENCER MICHELS: For Djalma, poetry, which he relates to rap, seemed to be a way to channel his thoughts.

DJALMA MAJANI TILLETT: My comrade votes. Some have choked me quote, but I'm the most.

DJALMA MAJANI TILLETT: It's just a good mind exercise. It just keeps me away from thinking the negative things, you know, or doing negative things.

SPENCER MICHELS: It sounds like you think rap and poetry are essentially the same thing.

DJALMA MAJANI TILLETT: It's all the same. It's just with a beat, and, you know, poetry sped up a little, sometimes slowed down a little. It's all the same, but it's all from the heart.

SPENCER MICHELS: Poetry has also become an important part of life for Aja Cayetano. Until recently, she was on the streets in San Francisco's Mission District, a gang member, often in trouble, who dropped out of school, bored.

AJA CAYETANO: I wasn't used to hanging around in a big group of 30 kids sitting at desks no more or stuff like that. So I used to not go to school at all and come straight down to, like, where all my friends be at.

SPENCER MICHELS: Wasn't it dangerous?

AJA CAYETANO: It was dangerous, but something about the danger at that time in me wanted to keep on going after it. Putting fear in people's hearts was what I was doing.

SPENCER MICHELS: In whose hearts were you putting fear?

AJA CAYETANO: Rival gang members. I was putting fear in older people that would see me just walking with my radios and glasses on and stuff.

SPENCER MICHELS: But about a year ago, with help from friends like Stephanie Dunlap, Aja began to turn her life around.

AJA CAYETANO: I decided that I would rather get my job, have a place, a nice good place over my head, and keep clothes on my back, food in my mouth, stuff like that, besides going and getting shot at or going and having people fight with me constantly or going and trying to make my money out on the streets till 7 o'clock in the morning.

SPENCER MICHELS: Today, Aja and Stephanie work together at the Center for Young Women's Development, which is committed to turning around girls involved in drugs and prostitution. They spend their time helping other girls and getting involved in poetry.

AJA CAYETANO: The streets are calling me. They're telling me to look out. There's trouble on these blocks. But do I listen? No. Across the street from me was some gang-banging enemies. I look slightly towards them and saw that they fought. They spoke to each other with the force of fighting in their voices. 'Ay, Charlotte, who's that girl over there?- To be looking like that, she must be from somewhere!'

STEPHANIE: I love that poem. I love that poem. And like Aja was saying earlier, you know, poetry isn't about being -- you know, having an English major. It's not about, you know, ten years of school. It's about what comes from the heart, and it's about what you know, and so if you have that in poetry, then you have everything.

SPENCER MICHELS: Stephanie is 19, and her life was a little different than Aja's. She moved to this depressed, drug-infested San Francisco neighborhood as a child, but because of a supportive mother, she avoided gangs and the rest.

STEPHANIE DUNLAP: I always had my mom there, and she was always exposing me to the positive things of life, positive things about life. You know, it was like when we lived in Potrero Hill, it was like, yeah, you know, yeah, we live in the projects, but we don't have to have that mentality of the projects, you know.

SPENCER MICHELS: Stephanie started writing poetry four years ago.

STEPHANIE DUNLAP: My people are the sidewalk sitters, the one who sits on stoops, writing here. Late-night barbecues, Marvin Gaye, smooth in the air. As I sway down the street, not knowing what tomorrow might bring, I have a flashback, and oh, God, is it mean. My people in chains outside in the rain, crying for freedom, but holding in the pain. Not even hell knows where I'm going.

SPENCER MICHELS: Most of these young poets work quickly under the tutelage of a teacher who comes to the center to guide and encourage them.

TEACHER: Okay, I can write you letters of recommendation.

SPENCER MICHELS: Mayana Minohal is one of seven teachers who spend 15 hours a week with at-risk youth, working on writing and preparing for the poetry slams. Over five years, about 4,000 youngsters have enrolled in these classes. The Writers Corps claims two-thirds of them have improved writing and performing skills.

MAYANA MINOHAL, Poetry Teacher: Poetry is about speaking the truth, and a lot of the students that I've taught, they've been through a lot, and because they're "at risk," their stories don't get heard.

YOUNG WOMAN: I am a woman. I cooked your meals every day. I took care of your kids that weren't even mine. Then you left me. I cried for you a while, and I felt weak, for my lover had left me. But then I thought, 'hey, I'm a woman. And I'm crying over him?' But I'm a woman, a single woman, an independent woman/ a woman with a plan. [Applause]

SPENCER MICHELS: The intense work the youngsters do in class culminates in the energetic poetry slams, which are held monthly. They take on the feel of a sporting event, with a rap band warming up the crowd and a disk jockey leading cheers. The poetry itself is hardly traditional. There's an air of young people discovering how to talk about themselves and the rough world around them in each poem.

YOUNG MAN: I'm in the world against me, dude, two different reasons: Violence, crime, and scandals from the system that we call justice. [Cheers and applause]

SPENCER MICHELS: Aja read one of hers about women.

AJA CAYETANO: I gave birth to lawyers, doctors, fathers, healers, priestesses, Jesus, and many others you might have heard of. I come from the land itself. I come as the messenger. I come for all your souls. [Applause]

YOUNG WOMAN: I am the wild in the animals of Africa. I am the first one on the moon. I am the inventor of all inventors. I am the future of my culture. Thank you. [Applause]

MAN: All right, all right.

SPENCER MICHELS: The highest score of the day went to a teammate, Lateefah Simon, who at just 21 is the director of the Women's Center, a single mother, and now a poet.

LATEEFAH SIMON: I thought I was a little bit different from everybody else in the hood. Well, now I know a little bit more about life. Now I know a score of 620 on the verbal don't mean click when you two dollars short of a pack of diapers. Right, right? I'm a little girl myself. I'm not much different from the girl in the hood. I am the girl in the hood. [Laughter and applause]

SPOKESMAN: Look at that! All tens! [Cheers and applause]

SPENCER MICHELS: With the competition over, it was time to pick the winner.

SPOKESMAN: And the winner is -- Team "A."

SPENCER MICHELS: By a tiny margin, the women's team outscored the young men. Yesterday in Washington, DC, two other youngsters from San Francisco joined four poets from around the country in the finals. They outscored a team of established poets in the poetry slam championship.

RECAP

JIM LEHRER: Again, the major stories of this Monday: Israelis chose a new prime minister, the Labor Party's Ehud Barak. Incumbent Benjamin Netanyahu conceded defeat after exit polls showed him losing. NATO bombing runs increased tonight after bad weather grounded flights over Yugoslavia during the day. And the US Supreme Court ruled states must grant the same welfare benefits to all new residents as they do to all others. An editor's note before we go tonight. As you must have noticed, our set, our place of business here has changed a bit. The blue is bluer. There is some wood paneling and some global graphics. There's a more open feeling. We did it all for the same reason people occasionally repaint their houses, close in a porch, add a bedroom or whatever; it's to give a lift, spruce up, stay fresh, and to always keep moving on. And we will move on to online where we'll see you and again here tomorrow evening. I'm Jim Lehrer, thank you and good night.