LEAD: On and off for 15 years, Sarah Edmunds has lived on the same block near Washington Square Park. Now she is thinking of leaving not only her neighborhood in lower Manhattan, but also New York City.

Metro Matters;   Assessing a Poll: Hints of Flight By Middle Class?

LEAD: Engineers have found a major flaw in the main light-gathering mirrors of the $1.5 billion Hubble Space Telescope that is likely to cripple its ability to view the depths of the universe for several years, the space agency said today.

HUBBLE TELESCOPE LOSES LARGE PART OF OPTICAL ABILITY

LEAD: Czechoslovakia swore in a new coalition Government on Wednesday, dominated by Civic Forum, the pro-democracy movement that swept free elections three weeks ago.

Prague Installs Government To Build Democratic Society

LEAD: In a deal that will almost certainly mean a rate increase for cable television customers in Manhattan, the Board of Estimate yesterday renewed franchises until the year 2003 for the two cable companies serving the borough.

Cable TV Rates Likely to Rise In Manhattan With New Pact

LEAD: It was the last day of the year at Public School 94 in the north Bronx yesterday, and Randee Sacher's second graders began the final entries in their journals.

A Year of Struggles, Successes and Dreams at P.S. 94

LEAD: The international terrorist known as Carlos was given refuge in Hungary in 1979, according to letters and documents made public today by Hungary's new Interior Minister.

Aide Says Hungary Gave Refuge in '79 To Terrorist Carlos

LEAD: In a clear challenge to Saudi Arabian leadership in setting oil policy, President Saddam Hussein of Iraq has warned Kuwait and the United Arab Emirates that they must curb their excess oil production. He has asserted that the two small nations are harming Iraq's vital interests, as well as those of the Organization of Petroleum Exporting

Iraq Seeks Bigger Role In OPEC

LEAD: The Rocky Mountains were summertime green, except for snow on the highest peaks. The sky was bright blue. And the visibility, as the weather forecaster said day after day, was unlimited.

A Child's World, Bettered by Design

LEAD: NO dutiful gardener ever officially recorded the first potted plant, but tomb paintings indicate that plants in containers were around in ancient Egypt and excavations show they were used in early Greece and ancient Rome.

Short of Earth? Gardens Bloom In Jars and Pots

LEAD: The Government's economic forecasting index climbed eight-tenths of 1 percent in May, continuing its bumpy pattern of recent months and confirming, analysts said, expectations that the economy will eke out gains in coming months and avoid a recession.

Indicators Rose 0.8% Last Month

LEAD: Once this city was a place where factories outnumbered telephone booths, longshoremen walked to work, and people sitting on stoops knew it would rain when they smelled the coffee brewing at the Maxwell House factory on the Hudson waterfront.

Hoboken to Lose a Symbol of Industrial Era

LEAD: The American Telephone and Telegraph Company announced yesterday that its second-quarter earnings were likely to be lower than last year's, and that the company might have difficulty meeting its own targets for earnings growth this year.

A.T.&T. Expects Profit Drop

LEAD: The prosecution's star witness in Mayor Marion S. Barry Jr.'s drug trial took the stand today to spin a tale of an adulterous two-year relationship with the Mayor in which she said that she used drugs with him more than 100 times and that he sometimes lapsed into paranoia about being caught.

Ex-Model Testifies To Wide Drug Use With Mayor Barry

LEAD: The Supreme Court ruled today that states may shield victims of child abuse by permitting them to testify on closed-circuit television rather than face in the courtroom those accused of abusing them.

CHILD ABUSE TRIALS CAN USE TELEVISION

LEAD: Under pressure from Latin American countries who fear that Eastern Europe is draining Western aid programs, President Bush today announced an expansion of Washington's debt-relief program for the region and proposed the creation of a free-trade zone for the hemisphere.

President Announces Plan For More Latin Debt Relief

LEAD: Affirming the power of Congress to enact programs that favor blacks and other minorities, the Supreme Court today upheld two Federal affirmative action programs aimed at increasing minority ownership of broadcast licenses.

JUSTICES BOLSTER RACE PREFERENCES AT FEDERAL LEVEL

LEAD:    Tax Battle on Capitol Hill    The President's abandonment of his stance against taxes brought a Republican revolt but also improved the mood of the budget talks. Page A20.       Books or Bats, It's a Living    Jose Canseco, the Oakland A's outfielder, signed a contract worth $4.7 million a year. Page D23.

INSIDE

LEAD: Garfinckel's, which for decades was the department store of choice for wealthy shoppers in the nation's capital, today started its ''going out of business'' sale.

First Altman's, Now Garfinckel's

LEAD: As the Government sells off hundreds of failed savings and loan associations, its biggest customer is right here in Texas, where so many of the problems began.

An Eager Texas Buyer Of Failed Savings Units

LEAD: SOMETHING about cameras makes people nervous. I don't mean the feeling of facing the lens, wondering what embarrassing expression this maker of memories will preserve. I mean the feeling of facing the camera from the other side, fearing that at the instant the index finger descends to stop time's flow, it will come out all wrong, one moment will be forever lost and another that nobody wants forever preserved.

  Divorcing Realism From Photography

LEAD: In a swift, unsentimental session that belied its importance, the New York City Planning Commission ended its 52-year life yesterday, approving land-use changes for a raft of projects, from a huge development along the Queens waterfront to a major biomedical laboratory in upper Manhattan.

It's Farewell For Planners On a Panel

BUSINESS DIGEST

LEAD: Two years ago, when the public was scandalized by reports of governments spending $1,800 a month to put children in tawdry welfare hotels, New York City vowed to end the practice and set a deadline. The deadline is this Saturday, and, to many people's surprise, the city is close to meeting it.

Using Housing Projects for Welfare Angers Tenants

LEAD:    International    A3-16       A terrorist was harbored in Hungary in 1979, according to letters and documents produced by Hungary's new Interior Minister. The international terrorist known as Carlos reportedly received asylum from Janos Kadar, the long-time Communist leader.

NEWS SUMMARY

LEAD: Citing the rapid weakening of the city's financial position over the last two years, Moody's Investors Service today lowered its rating of New Haven's bonds.

June 28, 1990

Headlines from June 28, 1990

Metro Matters; Assessing a Poll: Hints of Flight By Middle Class?

HUBBLE TELESCOPE LOSES LARGE PART OF OPTICAL ABILITY

Prague Installs Government To Build Democratic Society

Cable TV Rates Likely to Rise In Manhattan With New Pact

A Year of Struggles, Successes and Dreams at P.S. 94

Billboard 200

Step By Step

Please Hammer Don't Hurt 'Em

I'm Breathless: Music From And Inspired By The Film Dick Tracy (Soundtrack)

I Do Not Want What I Haven't Got

Poison

Historical Context for June 28, 1990