The NewsHour With Jim Lehrer : WETA : July 21, 2009 7:00pm-8:00pm EDT; The NewsHour With Jim Lehrer

Captioning sponsed by MacNE/LEHRER PRODUCTIONS > Lehrer: GOOD EVENING. I'M JIM LEHRER. ON THE NEWSHOUR IS TUESDAY, THE LEAD STORYS THE TUG OF WAR OVER HEALTH CARE REFO, AS SEEN BY FOUR MEMBERS OF CONGSS; THEN, WE HAVE THE OTHER NEWOF THE DAY: THE STA OF THE ONOMY, ACCORDING TO FEDERAL RESERVE CHAIRMAN BERNANKE; E BATTLE OVER FUNDING FOTHE F-22 GHTER JET; A REPORT ABOUT GROWING TRENIN SCHOOLS, TECHING CHILDREN TO EXPRESS TIR FEELINGS; AND THE LATEST ON THE DEAL TO RESOLVE CALIFORNIA'S BUDGET CRIS. MAJOR FDING FOR THE NEWSHOUR WITH JIM LEHRER IS PROVED BY: AT THE WORLD NEEDS NOW IS ENERGY, THE ENERGY TO GET T ECONOMY HUMMINGGAIN. THE ENERGY TO TACKLE CHALLENGES LI CLIMA CHANGE. AT IF THATENERGY CAME FROM AN ERGY COMNY? EVERY DAY CVRON INVESTS $62 MILLION IN PEOPLE A IDEAS, SEEKING, TEACHING, BUILDING. FUENG GROWTH AROUND THE WORLD TO MOVE US ALL AHD. THIS IS THE POWER OF HUMAN ENERGY. CHEVRON.

>> INTEL. SUPPORTING MATHND SCIENCE EDUCION FOR TOMORROW'S INVATORS. THE ATLAIC PHILANTHROPIES. AND WITH THE ONGOING SUORT OF THESE INSTUTIONS AND FOUNDAONS. AND... THIS PROGRAM WAS MADE POSBLE BY THE CORPOTION FOR PUBLIC OADCASTING. AND BY CONTRIBUTIONS TO YOUPBS STATION FROMIEWERS LIKE YOU. THANK YOU.

>> Lehrer: PRESENT OBAMA PRESSED AGAIN FOR NSENSUS ON HEAH CARE REFORM TODAY. IN A SERIES OF APPEARANS, HE APPEALED FOR ACTION IN THE FCE OF MOUNTI RESISTANCE. NEWSHOUREALTH CORRESPONDENT BETTY ANN BOWSER HAS OUR AD STORY REPORT.

>> ITHINK THIS HAS TOE DONE. >Reporter: THE PRESIDENT PICKED UP WHERE HEEFT OFF LAST NIGHT I HIS INTERVIEW TH THE NEWSHOUR.

>> GOOD AFTERON,EVERYBODY.

>> Rerter: IN THE WHITE HOUSE ROSE GARD WITHOUT NAMING NAMES MR.BAMA TOOK ON REPUBLICANFFORTS TOKILL THE KIND OF LEGISLATION WANTS.

>> I KNOW THAT THERERE THOSE IN THIS TOWN W OPENLY DEARE THEIR INTENTION TO BLOCK REFORM. IT'S A FAMILIAR WASHINGTON SCRIPT. E'VE SEEN IT MANY TIMES BEFORE. BUT THERE ARE MAN OTHERS WHO ARE WORKING HRD TO ADDRESS THIS GROWIN CRISIS. I KNOW THATHERE IS A TENDENCY IN WASHINGT TO ACCEUATE THE DIFFERENCES INSTEAD O UERSCORING COMMON GROUND. MAKE MISTAKE, WE A OSER THAN EVER BEFORE TO THEREFORM THATHE AMERICAN PEOPLE NEED. WE'RE GOING TO GET THE JOB DO.

>> Reporter: SLL REPUBLICANS HAVE STEPPED UP EFFTS TO STOP THE PRESIDENT'S PLAN AND DERAIL HIS PUSH R SPEEDY ACTION.

>> THE OWE BARACK OBAMA THEIR FUTU WITHOUT EVEN KNOWING IT.

>> Reporter: THE G.O. IS USINA NATIONAL ADVERTISING CAMPAIGN TO TARGET THE DEMOCRATIC INITIAVE.

>> A RISKY EXPERIMENT WITH OUR HEALTH CA. BARACK OBAMA'S MAIVE SPENDING EXPERIMENT HASN'T HEALED OUR ECOMY. HIS N EXPERIMENT RISKS THEIR FUTURE A OUR HEALTH.

>> Reporter: REPUBLICAN NAONAL COMMITTEE CHAIRMAN MICHAEL STEELE WENT TER THE HOUSE DEMOCRATS' PROPOSALO IMPOSE AURCHARGE ON FILIES EARNING MORE THAN $350,000 A YEA

>> THE DEMOCRAT PLAN DS NOT CONTAI COSTS. IT SHIFTS THEMTO THE TAX PAYER. TO OUR CHILDREN. AND TO FURE GENERIONS THAT WILL HAVE TO COPE WITH THIS CRUSHING DE BY IMPLEMENTING UGE PREMIUM SUBSIDIES AND ESTABLISHING A GOVERNMENT- CONTROLLED HEALTH RE PLAN.

>> Reporter: LA NIGHT HOU SPEAKER NCY PELOSI SUGGEED ANLTERNATIVE TH WOULD AFFECTEWER PEOPLE. IT WOULD RAISEHE LIMIT ON THE PROPOSED TAX INCREA TO $500,000 A YEAR FOR INDIVIDUALS AND1 MILON FOR FAMILIES. A PROPOSAL TO TAX THE WEALTHY HAS RECEIVED A FROSTY RECEPTI IN THE SENATE. ONCE AGAI MEMBERS OF THE KEY NANCE COMMITTEE MET BEHIND CLOSED DOORS IN THE OFFICEF COMMITTEE CHAIRMAN MAX BAUCUS TO TALK OUT WAYS TOAY FOR HEALTH CA REFORM. ONE IDEA FLOATED TODAY WOULD HAVE INSURCE MPANIES PICK UP A SIZABLE PORTION OF THE TAB. TH AFTERNOON, SENATE MAJORI LEADER HARRY REID SAID FAILURE IS NOT AN OPTION.

>> WE'RE CLOSER THAN ER IN GETTING IT DONE. TH AMERICAN PEOPLE, DCTORS, HOSPITS, PHMACEUTICAL INDUSY AND MANY OTRS WA US TO CROSS THE FINISH LINE. BUT T PARTY OF "" IS HOPINGHAT WE'LL IP AND FAL. ND THEY'RE SAYING IT PUBLICLY.

>> porter: RPUBLICAN SENATORS INSIST EY ARE N OPPOSED TO REFORMING HEALTH CARE. THEY JUST DON LIKE THE DEMRATS' APPROACH. MINORITY LEADERITCH McCONNELL.

>> IF YOU THINK OF ALL THE ISSUES WE CARE ABOUT OBVIOUSLY HEALTH CARE IS RGHT AT THE TOP OF THE LIST BAUSE IT DEALS WITH ECH OF US I A VERY PERSONAL WA SO L ME REPEAT AGAIN THIS IS NOT ABOUT WINNG OR LOSING. THIS IS ABOUT GETTING IT RIGHT. WE SAW WITH THE STIMULUSTHE FORT TOUSH AND SPEND.

>> Reporter: TH AFTERNOON THERESIDENT SUMMONED HOUSE DEMOCRATS ON E HOUSE ERGY AND COMMERCEOMMITTEE TO THE WHITE HOUSE. CONSERVATIVES IN THE GROUP LED BY ARKANSAS'SIKE ROSS SAY THE RE THAN $1 TRILLION PRICE TAG I TOO HIGH.

>> THERE'S AUT TEN ISSUES THAT WE'RE CONCEED WITH. OBVIOUS COST-CUTTING IS FIRST ON THAT LIST TOY THE REHAN... FOR MORE THAN AN HOUR WE SNT WITH THE PRESIDENT TAY FOCUSED SPECICALLY ON COST CONTAINMENT. THE'S A LOT OF IDEAS OUT ERE. A LOT OF GOOD NEGOTIATIONS. IT W PRODUCTIVE. NO FINAL DECISIO A YET MADE ON COST CONTAINMT ASURES BECAUSE QUIRANKLY WE HAVE TO WAIT FOR T C.B.O. TO SCOREHE BILL AS WELLAS E POTENTIAL COSCUTTING MEASURES.

>> Reporter: AND HOU JORITY LEADERSTENY HOYER WAED TODAY MANY OTHER DEMOCRATS HAVE VOICED CONCERNS TOO. HE'S SUGGESTED ACTION ON A HOUSE BILL MIGHT HAVE TO WAIT UNTIL AFT THE AUGUST RCESS. >>ehrer: JUDY WOODRUFF PICKS UP THE STORY FROM TRE.

>> odruff: DIFFICULT NEGOTIATIONS ARE EECTED TO CONTINUE IN THE HOUSE,HE SENATE, A AT THE WHITE HOUSE THROUGHOUTHIS WEEK, AND LIKELY RIGHT UP TO THE AUGUSRECESS. WE GET FOUR PERSECTIVES ON SOME OF THE KEY DIVIDES OVER HEAL REFORM ON CAPIT HILL. NATOR CHRIS DODD IS A DEMOCR FROM CONNECTIT, AND CHAIR OF THE HEALTH, EDUCAON, LABOR AND PEIONS COMMITTEE, HIS COMMITTEE PASS THE ONLY BILL INHE SENATE SO FAR. REBLICAN SENATOR LAMAR EXANDER IS ALSO A MEMBER OF THAT COMMITTEE. HE VOTED AGAINST THAT BILL. REPRESENTIVE PAUL RYAN IS A REPLICAN MEMBER OF THE HOUSE WAYS AND MEANS COMMITTEE;NE OF THREHOUSE COMMITTEES VOTING ON HEALTH REFORM SO FAR AND REPRESENTATI JIM COOPER IS ONE OF THE SO-CALLED BLUE G DEMOCRAT HE'S FROM TENNESSEE. GENEMEN, THANK YOU ALL. SENATOR DODD, I WANT TO STAR WITH YOU. I WANT TO FOCUS MAINLY IN THIS CONVERSATION ABO THE COST BECAUSE THAT SEEMS TO BE THE BIG HANG-UP. ATHIS POINT, WHAT D YOU SEE AS THE WAY TOAY FOR THIS, THE PLAN TO PAY FOR THIS THAT HAS THE BEST PROSPECT OF SURVIVING THE CONGRESS?

>> WELL, FIRST OF AL YOU LIKE TO HAVE YOUR PLAN, THE HOSPITAL, THE DTOR YOU HAVE, YOU G TO KEEP THAT. WE DON'T WANT TOOU CHANGE ANY OF THAT. WE WOULD LIKE YO TO HAVE AL THE FREEDOMS YOU HAVE. BRING DOWN COSTS NOT ONLY INVOLVE THEPRICE OF THE HEALTH CARBUT ALSO THE SAVINGS WEVE TRIED TO INCORPORA IN YOUR BILL, A BILL THA ENDED UP WITH PRICE TAG OF ABOUT $611 BILLION OVE TEN YEARS. THAT WASAR LESS THAN THE EARLIER PRECTIONS OF TWICE THAT COST AS A RESU OF SOME OF STATEMENTSTHAT WE DIDIN THA BILL: PREVENTION, QUALITY CA, INFORMAON TECHNOLOGY FOR ITANCE WILL DO AN AWFUL LOT TO BRING DOWN COSTS SO YOU NEED TO BE DOING EVERHING YOU CAN TO REDUCE THE COST OF HEALTH CE, THE STUDIES THAT HAVE BE DONE, A PIECE BY A DOCTOR IN THE EW YORK ERA FEW WEEKSGO POINTING OUT SOME OF THE PROBLEMS. CLEARLY TH REQUIRES EFFORT. THE CONGRSIONAL BUDGET OFFICE DON'T GIVE YOU MUCH CREDITOR SAVINGS. ONLY THE COST OF RIOUS INGS OF DOING RIOUS THING UNDERSTAND THAT. WHEN YOU HAVE FAMILIESODAY, WHE YOU HAVE 62% OF BANKRUPTES THE COSTF THAT AMILY OF A HEALTH CARE CRISIS PUTS THEM IN NKRUPTCY. 50% OTHE FORECLOSUES IN THE UNTRY ARE CAUED BY A CRISIS, A HEALTH CARE CRISIS IN THAT MILY. THOS COSTS CBO DOESN'T TALATE. WHEN WEE TALKING ABOUT ALTH CARE. WE' LOOKING AT 50% OF A AMILY'S INCOME IN 8-10 YEARS THAT CANE CONSUME BY HEALTH CARE PREMIUMS IF WE DON'T ACT. $1100-$1500OF THOSE PREMIUMS YOU'RE PAYING TODAY ARE COV THE UNSHOORED TH NUMBER OF 45 MILLION. 30 MILLION AMERICS ARE UNERINSURED, OUT OF POCKET PENSES RISING. ALL OF OSE COSTS THAT WE DON'T TALK ARE PAROF THE HEALTH CARE POBLEM TODAY. I'M HOPEFUWE CAN GET TO STRONG LL, A GOOD BIL, LOVE ABIPARTISAN BILL IWE CAN GET ONE. IT'S MO IMPORTA WE GET A GOOD OPLE FOR THE AMERICAN PEOPLE.

>> Woodruff: BACKTO MY QUESTION OUGH. IF YOU COU JUST ANSWER WHAT DO YOU THINK IS THE METHOD OF PAYING FOR AT'S OVER AND ABOV THE SAVINGS THAT HAS THE BT SHOT OF PASS SOMEING.

>> WHATENATOR JOHNERRY HAS RECOMMENDED TOY. YOU MENTIONEAT THE OUTSET OF THE PROGRAM. THAT'S THE SUBJECT OF CONVERSATIONS IN THEINANCE COMMITT. IT HAS RE POSSIBILITIES. SHARING THAT COST WAYS THAT THENDUSTRY ITLF COULD HELP PICK UP. IT SEEMS TO ME THAT PLUS THE SAVINGS THAT DOUG MENONED BY THE WAY IN THE BUDGET COMMITTEE WH SHELDON WHEHOUSE RAISED THE ISE ABOUT SAVINGSHE ACKOWLEDGED AT THAT COULDELP REDE THE CTS SUBSTANTIALLYMENT DON'T DISCOUNTT POINT.

>> Woodruff: SENAR DODD IS NO MENTIONING SOME OF THE OTHER INGS THAT ARE GETTING A LOT OF ATTENTN: TANG THE WEALTHY OVER AERTAIN INCOME LEL, DOINGWAY WITH THE OR RATHER CHGING THE DEDUCTION LEVEL THAT WOULD BE TAXED AGAIN FOR WEALTHY AMERINS. WHAT DO YOU INK, SENOR, FROM YOUR PERSPECTIVE IS THE ST WAY TO PAY FOR WHAVER EMERGES FROM CGRESS ASSUMING METHING EMERGES?

>> WELL, I THINK SHOULD START OVER. EITHER WH SOMETHING LIKE THE BIL WHICH 14 OF US SENATORS IN A BIPARTISAN WAY HAV SPSORED OR SEVERAL OF THE REPUBLICAN PROPOSALS. THE BILL DOESN'T ADD A PENNY TO THE DECIT. IT TAKES THE SUBSIDIES THAT WE'RE NOW GIVG TO AMERICANS FOR HEALTH CARE AND REARRANGING THEM A FAIR WAY SO THAT EVERYBODY COULD HE A POLICY, COULD AFFORD A POLICY THAT WOULD BE ABT LIKE WHAT CONGRESSIONAL EMPLOYEES HE. BUT WHAT W HAVE INSTEAD IS A BILL, SENATORDODD SAID AED $63 LLION TO THE DEFICIT ER TEN YEARS. BUT HE DIDN'T COUNT ALL THE OPLE WHO WILL BE DUMPED INTO MEDICAID A THAT WOULDMAKE IT RE LIKE $2 TRILLIONVER TE YEARS. IF THE PROGR IS FULY IMEMENTED. YOU'RE RHT. HE DIDN'T MTION THE EMOYER TAXES AND CUTTING GRANDMA'S MEDICAREAYMENT AND SPENDING IT ON SOMETHING ELSE. AND THE DEMOCRATIC GOVERNORS ARE UP IN MS OVER SHIFTG MEDICAID COSTS TO STATES AND THE MAYO CLIN IS SAYING WE'RE HDED IN THE WRONG DIRTION. I THINKWE OUGHT TOSTART OVER.

>> Woodruff: LET'S TURN ER TO THE HOUSE A HEAR FROM YOU REPRESENTATIVE OPER. YOU DO OR DO YOU SUPRT WHAT NATOR ALEXANDER WAS JUST SAYING AND AS A DECRAT DO YOU SEE AWAY OUT OF THIS DILEM BECAUSE RIGHT NOW THERE ARE SO MAN DIERENT PERSPECTIS WE'RE STILL HEARING

>> JUDY, BELIEVE IT OR NOT THERERE BIPARSAN SOLUTIONS TO THIS PROBLEM. SENATOR ALEXANDER MENTIONED ONE THAT BOTH HE AND I SUPPORT. WE CA FIGURE OUT SOLUTIONS THAT BRING AFFRDABLE HEALTH CARE TO ALL AMERICANS. I THINK WE CAN DO THAT THIS YEAR. BUT IT'S GOING TO TAK A LOT MOREONGRESSIONAL WORK. THE LEGISLAVE PROCESS IS REAL NOW JUST IN IT FIRST DRAFTTAGE SO WE SULD NOT BY ANY MEANS LOSE HOPE I KNOW THERE ARE SOM REPUBLICANS WHO WANT T KILL THE WHOLE THING. WE CAN GET THIS DONE FOR THE AMERICANEOPLE. WEE BEEN WAITING A LONG TIME FOR THIS. MOST AMECAN FAMIES ARE REALLY WRIED ABOUT THEIR HEALTH COVERAGE. WE CAN MAKE IT MOREFFORDABLE ANDMPROVE THE QUALITY TOO.

>> Woodruff: CAN YOU IN ON RASE, CONGRESSN COOPER, SAY WHAT ISTHE BEST PAYMT METHOD THAT'S GNG TO WORK HERE?

>> YES, JDY. WE NEED TO GET ALLHE PAYMENT FRO SAVINGS FROM THEURRENT SYSTE WE'RE ESTIMATED TO WASTE AUT 00 BILLION A YEAR IN PAYMENTS THAT T ONLY DON'T IMPROVE OUR HLTH T ACTUALLY SOMETES HARM OUR HEALTH. WE SHOULD GO AFR THOSE SAVINGS. DATA HAV PRETTY MUCH PROVEN THE $700 BILLION.

>> Woodruff: ALL IN SINGS. I THINK THAT'S REALISTIC?

>> ABSOLUTY.

>> Woouff: REPRESENTATIVE RYAN, PUBLICAN IN THE HOUSE. THE DEMOCRATS WERE ABLE TO DO THAT, IF THEY WERE ABLEO GET IT ALL FROM SAVINGS, WOULD THAT WORK?

>> IF ALL THE DEMOCRATS WRE LIKE JIM COL÷R, I THINK WE COULD GET A DEAL. UNFORTUTELY5úx;Z%Bni)E THAT'S THE SORT OF SHED RESPONSIBILITYE'RE GOING TO HA TO HAVE IF YOU'RE GOING TO ACHIEVE ACCESS, IF U'RE GOING TO ACHVE REDUCED COSTS D BRING MORE PEOPLE INTO THE PROGRAM. WITH ALL DUE RESPECT TO MY COLLEAGUES HERE TALKG I THINK JIM COER COMES THE CLOST TO IT, SAVINGS REALLY CAN PAY A TREMENDOUSMOUNT OF THIS. THE IDEA THAT W'RE ALL FOR THESE IDEAS, LAMAR AN I DON'T DISAGREE. HE'S CORRECT ONHE MEDICAID ISSUE. WE HAVE TO DEAL WI THAT. I UNDERSTAND THAT. HE'S RIGHT ABOUT IT. I CAN'T JUST PASS THAT ON. UT THAT'S THE CHALLENGE IN FRONOF US TO GET THAT I'M CONFIDENT WE CAN IT. Woodruff: SENATOR ALEX SNDER, WHAT ABOUT THIS IA THAT SENATOR DODD DESCRIBING O SHARED RESPONSIBILITY THAT YOUUST CAN'T GET THERE. YOU CAN'T THE COVERAGE AT HE IS SAYING THE COUNTRY SHOD HAVE UNLESS SOMEBODY PAYS MORE.

>> WELL, I AGREE WITHJIM COOPE IF WE'RE PAYING TWICE AS MUCH AS MANY INDUSTRIAL COUNTRIES RIGHT NOW OF OUR GSS DOMESTIC POD FOR HETH CARE, TH'S ENOUGH. AND AT TIME WHEN THE PRESIDENT HAS PROPOSEDORE NEW DEBT OVERHE NEXT TEN YEAR THAN AT ANY TIME IN THE NEXT. THAN WE'VE SPENTN WORLD W II, ACTUAY THREE TIMES AS CH AS WE SPE, WE CAN RISK A LOT MORE DEBT. SO I DON'T KNOW WHAT SHAR RESPONSIBILITY MNS. I THINK WE HAVE PROPOSALS ON THE TABLE. I MENTIED ONE. THERE'S SERAL OTHERS THAT COULD COVER ALMOST EVERYE THOUT ADDING TO THE DEBT THE OER WAY TO DO IT-- AND IT'S JUST TO RECOGNIZE WE MAY BE BING OFF MORE TH WE CAN CHEW AND START LOOKING AROUND THE COUNTRY FOR THE PLACES LIKE VANDERBILT AND THE MAYO CLINIC AND SALT LAKE CITY AND DARTMOUTH TT WE ALL TLK, PITTSBURGH, WHERE DOCTORS A HOSPITALS HAVE ORGAIZED THEMSELVES TO THE SYSTEMS THAT HAVE GO RESULTS A LOW COST AND GRADUALLY EX-INTAND THOSE UNTIL WE REDUCE OUR COS AND THEN ADD THE UNINSURE

>> Wodruff: CGRESSMAN COOR, DO YOU SEE SOMETHI, A KERNEL OF SOMETHING ITHE PLAN THAT SATOR DODD IS TALKING ABOUT AND WHAT YOU AND SENATOR ALEXANDER ARE IN FAVOR OF THAT COULD WK, THAT COULD COME TOGETER TO MAKE SOMETHING AT WOULD PASS?

>> I DO, JUDY. THERS A LOT OF GOO IN THE SENATE HEALTH COITTEE BILL. UNFTUNATELY THE CBO "SPORTSDESK"S SAY SPENDS TOO MUCH MONEY. WE CAN TRIM AT BACK SOME. E SENATE FINANCOMMITTEE HAS NOT YET ANNOCED THEIR PROPOSAL. THEY WILL BE THE ONES THAT HAVE TO PAY FOR ATHING. THIS CAN BE DON IS IS JUST A FIRST DRT. THEEGISLATIVE PROCS IS ALWAYS MESSY. WE SHOULD NOT LOSE HOPE HER IT'S GOTTEN OFF TO LITTLE BIT OF A ROCKY START BUT WE CAGET THIS DONE.

>> Woouff: CONGRESSM RYAN, IS IT YOUR VIEWND THE VIEW OF MANY OF YOUR REPUBLICAN COLLEAGUES THAT YOU' GOING TOTOP THIS AT ALL COSTS? THAT YOU JUST DON'T NT ANYTHING LIKE AT THEY'RE TALKING ABO TODAY? >>WE WANT HEALTH CARE REFORM THAT WORKS. HEALTH CEEFORM THAT DOES NOT INVOLVE THE GOVERNMT TAKG OVER. THE EXPERTS ARE TELLING US TWO OUT OF ERYTHREE AMERICANS WILL LOSE THE PRIVATE HETH INSANCE THEY HAVE RIGHT NOW IF THIS PLAN THAT'S GOIN THROH THE HOUSE PASSES INTO LAW. THAT IS N KEEPING IN.. WITH THE IDEA YOU LIKE IT, YOU CAN KEEP IT. SENATOR ALENDER SAID SOMETHING VERY IMPORTANT TOO WE SPENT 2.5 TIMES PER PERSON FOR HEALTHCARE THAN ANYTHER COUNTRY. WRE SPENDING LTS OFMONEY. LET'S SPEND AT MONEY FOR EFFICIENTLY AND MORE EFFECTIVELY THAN BORROWING ALL THISDDITIONAL MONEY TO PUT ON THEOP OF THE $ TRILLION OUR GORNMENT IS EXPECTED TO SPEND ER THE NEXT TE YEARS FOR THE UNDER 65 POPULATION. WE WA TO DO IT. BUWE WANT TO DO IT RIGH WE BELIE THIS THIS BILL, ALL THE EXPES TLING US WILL ACTUALLY CAUSE PPLE TO LOSE THE HEALTH INSURANCE THEY HAVE RIGHT NOW AND WI EXACERBATE OUR HEALTH CARE ST PROBMS NOTONTAIN IT.

>> Woodruff: SENOR DODD, IS PRESIDENT OMA RUSHING THIS O FAST? I WNT TO READ YOU QUICY A QUOTE FROM CONGRESSMAN CHARLIE RANG WHO IS OF COSE INFLUENTIAL COMTTEE CHAIRMAN IN THE HOU WHO SAID THIS AFTERNOON OVERHEARD BY REPORTERS TO S NO ONE WANT TO TELL E SPEAKER SHE'S MOVING TOO FAST. AND THEY, QUOTE, DAMNED SURE DON'T WA TO TELL THE PRESIDENT. > YOU HAVE TO KEEPORKING AT THIS. HOPE WE CAN GET SETHING MOVING THE NEXT FEWEEKS. MIGHT EVEN CONSIDER MAYBE SLOWING DOW THE AUGUST RECESS. 14,00PEOPLE ADAY HAVE LOST HEALTH CARE. BEFORE WE ALL FINISH OUR WORK HERE, EVE DAY 14,000 PEOPLE DO ALONG WI THE 20,000 W LOSE THEIR JOBS AD 10,000 SING THEIR HOMES. I MENTNED THE BANKRUPTCY AND THE FORECLOSURE ISSUED RELAED TOEALTHARE CRISIS. LAMAR IS CORRECT. WE'RE SPENDING TODAY D . CONGRESSMAN RYAN WE'RE SPENDING.5 TRILLION ON HEALTH CARE. WE RANK 37th THE UNITEDTATES IN THEORLD AT OUTCOE. WE'RE AT THE BOTTOM OF INDUSTRIALED OF INFANT MORLITY. A STUDYUT OFENNESSEE DICATES THAT THIS GENERION OF YOUNG OPLE WILL BE THE IRST GENERATION OF AMERICAN WHO DON'T LIVE AS WE OR POSSIBLY AS LONGS THEIR PARENTS. THAT'S NCE THE FOUNDING THE REPLIC. TS ISSUE DEMANDS OUR ATTENTION AND TIME. WHETHER O NOT WE CAN GET IT DONE IN AOUPLE OF WEEKS OR NOT I DON'T KNOW. WE NEED TO KEEP AT IT. IF WEON'T SAYAT THIS I THINK WE'L MISS THIS MOMENT. IT'S EN ALMOST 20 YEARS SINCE THE LAST TIME WE TRIED. AS I SAID MENT AGO IT IS UNSUSTAINABLE FROM AN ECONOMIC STANDPOINT ASELL AS THE NEEDS OF PEOLE ALL ACROSSUR COUNTRY.

>> Woodruff: SENOR ALEXANDER, I KNOW FROM WHAT YOU'VEAID YO DON'T SUPPORT THIS. BUT OF THEROPOSALS THAT HAVE BEEN RAED ON THE DEMOCRATIC SIDE FOR HOWTO PAY FOR THIS, WHETHER IT LIMITING TAX DEDUCTIONS FOR PEOPLE EARNING OVER $250,000 YEAR, WHETHER IT'S TAXING... A HIGHERAX ON THE WEALTHY O WHATEVER, IS THERENE OF THOSE FORMULAS THAT YOU THI FROMOUR RSPECTIVE WOULD HAVE A BETT CHANCE?

>> JUDY, I WANT TO ANER YOUR QUESTION BUT I C'T DO THAT BECAUSE THAT'STHE WRONG PLACE FOR ME TO STAR I DON'T SUPPORTDD TO GO THE DEBT TO PAYFOR THESE BLLS. AS I SAID WE'VE GOT THE MAYO CLINIC, WE'VE GOT THE DEMOCTIC GOVERNORS, WE'VE GOT THE CONGRESSIONAL BUDET OFFI TELLINGUS WE'RE GOI IN E WRONG DIRECTION. WE HAVE BILS BEFORE THE CONGRESS ICH I SUPPORT AND OTHERS DO THAT SAYE CAN DO THIS WITUT ADD TO GO THE DEBT. ABOUT THE ONLY THI BIPARTISAABOUT WHAT WE'VE DONE IS THE OPPOSITION TO I CHRIS DODD I... HAS CONDUCTED A HEIC COMMITTEE SESSIONND AS VERY FRIENDLY. BUT BASCALLY REBLICAN IDEAS AND IDEASROM OTHERS HAVE NOT BEEN INCLUDED INHAT WE'RE DOING. WEHOULD START OVER. OF COURSE WE CANET THIS DONE THISYEAR.

>> CAN I MENTION ONE THING, JUDY. WITH MY GD FRIEND HEREWE ACCEPTED 161 REPUBLICAN AMENDMTS. IT IS A BIPARTISA BIL.

>> NOT AT E WAYS AND MEANS.

>> I'M TALKING ABOUT OUR BILL 160. WE DEALT WITH 800 AMENDMEN OVER 23ESSIONS. 15 DAYS, 60 HOUR ATHE END OF IT I IDENTIFIE EACH OF MY COLLEAGUES, THE CONIBUTIONS SUB STAN TIVE THEY MADE TO THIS BIL BUT IT IS BIPARTAN. THOSE WERE TECHNIL AMEMENTS THAT MADE NO REAL DIFFERENCE IN EXCEPT ABOUT TW CASES. >>Woodruff: LET ME ASK CONGRESSMAN COOPER A RYAN HOW Y SEE THIS AYING OUT OVER THE NE FEW WEEKS. WHAT DO Y THINK IS GOING TO HAPPEN HERE?

>> ITHINK EVERYBODY WILL G MORE REALISTIC IN THEIR EXPECTATIONS. MAY PEOPLE ARE JUST LEARNING ABOUT THESESSUES SOME OF WHICH ARE QUI COMPLICATED THE BOTTOM LINE IS ARICAN FAMILIENEED HELP. VIRTUALLY EVERYONE IS HING A ARD TIME FINDIN AFFDABLE HEALTH SURANCE. WE'RE L GOING TO G SICK OR INJURE SOONER THAN WE REALIZE. THIS HAS TO BE SETHING THAT WORKS FOR ALL AMERICANS REGARDLESS OF LITICS. WE N GET THIS DONE.

>> RATHER THAN SPENDINGNEXT WEEK VOTING ON A BILL NONE HAS READ IN CONGRESS ANDHE CBOSAYS MAKES OUR FSCAL PROBLEM EVENWORSE I THINK WERB TALK TO OUR NSTITUENTS DURING THE AUST RECESS. I'M HOLDING TOWN HALL MEETINGS. WE SHOULD TALK TO TH AND GET THE PUBLIC TO SEE WHAT THIS LEGISLATIOIS ALL ABOUT AND COME BACK IN SEPTEMBER WELL INFORMED TER HAVING TOUCHED BASE WIT EACH OF OUR PLOYERS, THE CONSTUENTS WE REESENT.

>> Woodff: CONGSSMAN PAUL RYAN, CONGRESSMIM COOPER, SENATOR CHRIS DD, SOUNDS LIKE YOU STI HAVE SO WORK TDO TO GET THIS NE AND SENOR LAMAR ALEXANR, GENTLEME THANK YOU ALL.

>> THANKYOU, JUDY.

>> Lehr: ON OUWEB SITE, newshour.pbsrg, VISIT OUR HELTH CARE REFORM PAGE FOR A GUIDE OFERMS AND KEY PLAYERS INVOLVED IN THE DEBATE. IN OTHEREWS TODAY, OVERSIGHT OF T GOVERNMENT'S BANK RESCUE PROGRAM CAME UNDER NW CRITICISM. AT A HSE HEARING, NEW YORK DEMOCRAT EDOLPS TOWNS COMPLAINED THE BLIC HAS NOT BEEN TOLD HOW BANKARE SPENDING THE $700 BILLION. D SPECIAL INSPECTOR GENERAL NEIL BAROFSKY SAID THERE'SIXED EVIDENCE ON HOW THE PRORAM HAS WORKED. >>HE GOALS OF TH TARP HA CHANGED OVER TIME. DIFFERENT FOLKHAVE DIFFERENT DEFINITIONS OF WHAT WORKING AND WHAT'S NOT WORKIN I THINK IFHE GOAL WAS TO REMOVE $7 BILLION OF TOX ASSETS OFF THE BOOKS OF FINANCIAL INSTITUTIONS,HAT CLEARLY HAS NOT HAPPENED IF THE GL IS TO INCASE LENDING, I THINK TH TOO UNFORTUTELY HAS NOT HAPPENED. IF THE GOALAS TO AVOID A COMPLETE SYSTEM ATIC COLLAPSE OF THE FINANCIAL INDURY, THAT MAY VERY WE HAVE HAPPED.

>> Leer: BAROFSKY SAID THE TREASURY DARTMENT SHOULD REQUIREORE INFORMATION FROM BANKS ON WHERE TAXPER MONEY IS GOING. ONALL STREET, THE STOCK MARKET KEPT A WEEK-LONG RLY GOING. THE DOW JONES INDTRIAL AVERAGE GNED MORE THAN 67 POINTS TO CLOSE ABOVE 8915. THE NASD ROSE MORE THAN 6 POINTS TO CLOSE AT 1916. THE SENATEUDICIARY COMMITTEE HAS DELAYEA VOTE ON U.S. SUPREMCOURT NOMINEE SONIA SOTOMAYOR BY ONE WEEK. THE RKING REPUBLICAN, JEFF SESSIS OF ALABAMA, ASKED FOR ERA TIME TO REVIEW THE JUDGE' RERD. THE COMTTEE VOTE IS NOW SET FOR NEXT TUESDAY. THE FULL SENATE IS EXPECD TO VOTE INARLY AUGUST. PME MINISTER AL-MALIKI OF IRA DEPARTED FOR A VISIT TO T U.S. TODA HE WILL MEET WITH PRESIDE OBAMA AND SECRETA OF STATE CLINTON TO SCUSS IRAQ'S NEW SECURITY PACWITH THE U.S., AND POLITICAL RECONCILIATI. AS HE LEFT, A SERIES OF MBINGS KILLED AT AST 18 IRAQIS AND WOUNDED DOZENS MORE. IN AFGHANISTAN, AT LST 14 PEOPLE DIED IN TALIBAN ATCKS IN TWO EASTERN CITI. UP TO 15 INSURGENTSSED SUICIDE BOMBINGS, NFIRE AND ROCKETS. THE TALIBAN ALSO LEASED A MESSAGE ABO A CAPTURED AMERICAN SOIER, ARMY PRIVATE BO BERGDAHL. THE MESSE CALLED FOR AMERICANS TO "MAKEERIOUS AND PRODUCTIVE EFFORTS TARDS ENDING HIS TENTION." THE SDIER WAS SHOWN IN A TALIBAN VIDEOVER THE WEEKEND, AFTER BEING CAPTURED THREWEEKS AGO. NEFIGHTING ERUPTED BETWEEN SECURITY FORS AND MILITANTS IN PAKISTAN. THE MILITA REPORTED AT LEAST 6PEOPLE HAVE DIED IN THREE DAYS IN THE NORTHWEST,N A REGION BORDERING THE STIVE SWAT VALL. OFFICIS SAID NEARLY ALL OF THE DEAD WERE MILITANTS. AND STILL COME ON THE NEWSUR TONIGHT, FIGHTING FOR FITER JETS; LEARNING ABOUT FEELINGS; AND MAKING DEAL IN CAFORNIA. THAT FOLLOWS THE ECONOMIC OUTLOOK, AND TO GW IFILL.

>> Ifill: DERAL RESERVE CHAIAN BEN BERNANKE RETURNED TO CAPOL HILL TODAY FOR HIS SEMI-ANNUAL RORT ON THE STATE OF THE ECONOMY, AND JUST IN ME TO DEAL WITH CONGRESONAL ANXIETY ABOUT THE COSTND REACH OF THE FED'S INTERNTION INTO E NATION'S FINANCIAL SYSTEMS BERNANKE SISTED HE HAS AN EXIT STRATEGY. GREG IP, U.SECONOMICS EDITOR FOR THE "ECONOMIST," JOI US TO EXPLAIN WHAT, EXACTLY,HAT IS. HE SOUNDED LIKE WAS TRYING TO B OP MYSTIC TOY, GREG.

>> I THINK HEAS. HE TALKED ABOUT, F EXAMPLE, HOW THE MARKETS HVE BASICALLY COME BACK T NORMAL IN MANY AREAS FROM THE SITUATION WERE THEY WERE PRACTALLY DYSFUNCTNAL LAST FALL. THE STOCK RKET IS DOING WELL. INVESTS DON'T SEEM TO BE AS FEARFUL. THY'RE BUYING STOCKS AND NDS. BANKS HAD A VERY GD QUARTER. TY'VE RAISED A TON OF CAPITAL. THE SIGNS IN E ECONOMY ARE ALSO GETTI BETTER. ONSUMER SPENDINGSEEMS TO BE STABILIZING AND OUR TRADING PARTNERS OVEEAS ARE ALSO SEEIN TURN-AROUNDS IN THEIR ECONOMIES.

>> Ifill: IN SPITEF AL THAT, SOME OF THE LAWMAKERS TODAY SEEMED TO EXPRESS CONCERN ABOUT WHAT THEY FELT WASAN UNPRECEDENTED INFUSIO OF FED MONEY. BASILLY PRINTING MONEY INTO TH PRIVATE ECONOMY BECAUSE IT MIGHT SPUR INFTION. CHAIRMAN BERNANKE WAS QUESTIONED HERE BY REPUBLICAN BILL POSEY OFFLORIDA.

>> WELL, LET'S BE CLEAR WHAT'S GOING ON. E FEDERAL RESERVE IS N PUTTING MONEY INTO THECONOMY. WHAT WEE DOING IS WE'RE CREATINGANK RESERVES. THAS MONEY THAT THE BANKS HOLD WITH THE FED SO IT'S JT SITTING THERE IDLY. IT'S NOT CHASING ANY GOOD OKA SO AS LONG AS THOSE BAN RESERVES ARE SITTING IDLY, BROADER MEASURES OF MONEY THAT ASURE THE CIRCULATN OF MONEY....

>> BUT IT WON'T SIT TEREIDLY FOREVER. THE PURPE IS NOT TO SIT THERE IDLYOREVER. WHILE THE MAY BE A TIME LAPSE CERTAINLY UNLESS THAT MON GETS SUCKED BACK IN OUT OF CIRCULATION IT GOG TO CAUSE INFLATION. THERE'S NO DEING IT.

>> THERE'S A WE HAVE SCRIBING WE HAVE WAYS OF SUCNG IT BACK IN.

>> Ifill: WE HAVE WAYS OF SUCKING IT BACK IN. WHAT DOES THAT MEAN?

>> ESSENTIALL THE DERAL RESERVE HAD TO DO PRETTY AGESSIVE THINGS TO CNTER E SEVERITY OF T FINANCIAL CRISIS. THE MADE EMERGENCY LOANS TO FIRMS LIKE AI AND BEAR STEARNS AND EAIER TH YEAR THEY STARTED BYING TREURY BONDSIN AN EFFORT TO G WN LO-TERM INTEREST RATES AND GIVE AN ADDITIONAL BOOST TO THE ECONOM WHEN THEY BUY BONDS WHERE DO THEY GET TH MONEY? EENTIALLY THEY PRINT IT. THAT'S WHA BERNANKE MEANS HEN THEY SAY CREATING BANK RESERVES WHICH IS A FANCY WAY OF SANG PRINTING MONEY. OUR NATURAL CONRN IS YOU PRINT MOY DOESN'T THAT CREATE INFLATN. WHT HE'S TRYING TO SAY IS . F YOPRINT MONEY TO CREATE INFLATION THE MONEYHAS TO BE SPENT. THE MONEY ISOT BEINGPENT RHT NOW. IT'STILL SITTING UNUSED ON THE BOOKS OF T FEDERA RESERVE. AND THE REASON WHY THAT BANKS DO NOT HA A LOT OF PROFITABLE OPPORTUNITIETO MAKE LOANS RHT NOW. THEYSIMPLY DON'T WANT TO LEND. THE MONEY NOT GETTING OUT INTO THECONOMY. E DAY WILL COME WHEN PEOPLE DO WANT TO BORROW AND BANKS WILL BE MAKIN LOANS. THAT'S THE DAY TO START WORRYING AUT INFLATION. BERNAE SPENT A LOT OF HIS TESTIMONY SAYI WE KNOW YOU'RE CONCERNED ABOUTHIS RISK OUT ERE. WE HAVE LOT OF WAYS OF DEALING WITH IT WHEN THAT DAY COMES.

>> Ifill: WHEN THATAY COMES WILL WE ALSO BEGIN TOEE THE INTERESTATES BEGIN TO GO BACK UP?

>> ABSOLULY WE WILL. WE'LL SEE THE TRADITIONAL MEASURES THEED RAISING THE FEDERAL FUNDS RA AND THEN YOU AND I WI SEE THAT IN THE PRIME RATE IN OUR HOME MORTGAGE RATES A SO ON. AT THEAME TIME BECAUSEHEY PRINTED ALL THIS MONY, EY'LL BE DOING AFEW OTHER THINGS IN THE MARKETSHICH WE REALLY SEE MUCH OF IN ORD TO SOAK UP SOME OFHAT MONEY. IT'S A LITTLE BIT O NEW GROUND F THEM BECAUSE THESE POLICIES HAVE NOT BE TRIED BEFORE. SO THEY HAVEN'T D TO EXIT FRO THEM BEFORE. BUT I TNK ONE POINT THAT RISKS GTTING LOST IS THAT THIS IS ALMOST A ACADEMIC DISCUSSION. THERE IS N RISK OF INFLATIO OUT THERE RIG NOW. WE HA UNEMPLOYMENT OVER 9%. PEOPLE AREAKING WAGE CUTS WE E NOT SENG WAGE AND PRICE IFLATION RIGHT NOW. THE KIND OF CONCERNS TH PEOPLE A RAISING RIGHTOW ARE CONCERNS FOR T JUST ANOTHER DAYUT ANOTHER YEAR.

>> Ifill: IST WORTHWLE FOR PELE TO BE NCERNED WITH WHAT IS HAPPENG IN THE COMMERAL REALESTATE MARKET?

>> ABSOLUTY. IN FACTONE OF THE THINGS THAT BERNAN EMPSIZED TODAY IS HAT NOTWITHSTANDING THAT THERE HAVEEEN SOME ENCOURAGING SIG IN THE RESIDENTIAL HOUSING MARKET, THERE'S A WHOLE OTHER CRISIS, IF YOU WILL, IN THE MAKING IN THE COMMERCIAL REAL EATE MAET. WE HAVE PROJECTS THAT WERE UNDED WHICH CAN NO LONGE BE REFINANCE CONSTRUCTIONS BEING STOPPED. ANKS DON'T WANT TO ROLE T LOANS OVE AND AATE LOW OF THE BUILDINGS THEY FINAN ARE WORTH LESS THAN TH ORIGINAL. SOUND FILIAR?

>> Ifill: EXPT IT'S HAPPENING NOW IN THE BUSINESS LEVEL. OKAY. HERE'S E OTHER QUESTION. WHI CAME UP TODAY. ANWHICH PREMABLY WAS THE UNDERCURRENT IN A LOT OF THIS DISCUSSION WHICH WHO OVERSEESHE FED? AND TO WHAT DEGREE CAN CONGRESS IMPOSE ANOTHER ORGAZATION, IN THIS CASE THE GENERAL ACCNTING OFFICE, TO KEEP TRACK OF ALL THIS MEY TT IS NOW SLHING AROUND OUT THERE?

>> IT'S BEEN A LONGVIEW IN THIS COUNTRY THAT MOST PEOPLE HAVE SHARED TH THE WER TO PRINT MONEY AND THE POR TO SPEND MONEY SHOULD REALLY BE KEPT SEPATE BECAUSE IF THE CONGRESS ISLLOWED TO PRI MONEY AS WELL AS E SPENDTHE MONEY WE GET LOTS OF SPENDING AND LOTS OF INFLATION. THE PROBLEM IS IN THE LAST YEAR OR TWO THE FED HAD TO DO LOT MORE THAN S UAL POWERS IN TERMS OF NOT T... JUST RAING AND LOWERING INTERE RATES BUT MAKING LOANS TO PARTICULAR INDUSTRIES AND INDUSTRIES WHICH LOOKS A LOT LIKE PICKING WINNERS AN LOOKS A LOTIKE PUTING THE TAX PAYER'S MEY AT RISK. ISN'T AT THE JOB OF THE CONGRESS AND THE ADMINISTRATION? PEOPLEWOULD SAY TT THESE WERE SKS WORTHTAKING IN ORDER TOCOUNTER WHAT WAS THE WORST CRISIS SINCE THE GREAT DEPRESSION BUTT MAKES A LOT OF PEOPLE IN THE CONESS AND IN THE COUNTRY UNEASY THAT GRP OF UNELECTED PEOPLE WITH RY LITTLE SORT OF INDEPENDENT OVERSIGHTROM THE CONGRESS CAN MKE THESE BIG DECISIONS.

>> Ifill: AIRMAN BERNAN BEING A STUDENT OF HISTO KNOWS IT'S NOT NECESSARILY A GOOD THING WHEN THEED CEDES ITS POWER TO AN ELECTED BODY.

>> YOU KNOW WHAT PPENED WHEN THE CONGRESS GET ITS WAY. THEY WNT LOER INTEREST RATES WHICH OVER TIME LEADSTO MORE INFLION. THERE'S A AL BALANCING AC HERE. THE FED IN TAKG ITS AGGRESSIVE ACTION H DONE THINGS THAT ARE UNPRECEDTED AND MADE PEOPLE UNEASY. PEOPLE WANT MO POLITICAL OVERSIGHT OVER THO ACTIONS. AND THERICK WOULD BE TO FIND A WAY TO GIVETHEM WHAT THEY NT, PERHAPS MORE TRANSPARENCY, PEAPS ASKING FORHE PERMISSION OF T TREASURY BEFORE THEY MAKSOME OF THESE ERGENCY LOANS. ALS GIVINGONGRESS A KUJAL TO BEAT UP THEED EVERYTIME DOING SOMETHINGNPOPULAR LIKE RAISENTEREST RATES.

>> Ifill: ORDE OUT A LOT OF MONEY. W WE KNOW THAT THE PURPO OF THE FED CHAIRM GOING TO THE HILL TODA WAS TO CALM PEOPLE DO AND SAY WE'VE GOT THIMAN. HE WROTE AN OP-ED TODAIN THE ALL STREET JOURNAL TRYING TO LAY THAT OUT. DID IT WORK AER ALMOST A LL DAY OF HEARING WH ALL THESE LAWMAKERS ASKING ETTY TOUGH QUESTIONS?

>> WELL, IF Y LOOK AT THE BAROMETER OF INVESTOR CONFENCE THE STOCK MARKETS SEEM TO BE PREY HAPPY. IT WENT UP TODAY. THERE WERE ACTUALLY NOT MANY SPRISES IN WHAT HE SAID ABOUTONETARY POLICY FOR THOSE WHO HAVE BEEN FOLLOWING IT CAREFULLY. HIS WHOLE STRATEG HERE ABOUT EXPLAINING IN SUCH DETAIL HOW EY WON DAY PLAN TO RAISE INTEREST RATES IS THAT N TO SUGGEST TY'REBOUT TO DOT NOW BUT TO GI PEOPLE THE CONFIDENCE THAT WHEN THE DAY COMES THEY CAN DO I T'S A BIT COUNTERTUITIVE BUT TH ACTUALLYERHAPS GIVES HIM MORE LEEWAY TO REMAIN AGGRESSIVEOW BECAUSE PEOPLE WILL S, WELL, WE KNOW YOU'RE DOINGOME UNUSUAL THINGS BUT WE'RE NOT GOING TO WORRY ABOUT THIS LEADING TO INLATION BECAUSE WE KNOW WHEN THAT DAY COME YOU'LL BE ON THE CASE.

>> Ifill: AT LEASTTHAT'S WHAT THEY' HOPING. GREG IP OF THE ECONOMIST THANK YOU VERY MUCH.

>> GOOD TOBE HERE.

>> Lrer: YOU CAN SUBMIT QUESTIONS TO CHAIRMAN BEANKE. WE'LL POST THEM THEM LATER OURSELVES AS PART OF OUR SPCIAL BERNANKE ON THE RECO WHI IS COMING UP LATER THIS MONTH.

>> Lehrer: NEXT TONIGH A NATE SHOWDOWN ON DEFENSE SPENDING. NEWOUR CONGRESSIONAL CORRESPONDENT KWAME HOLM REPORTS.

>> Reporter: THE F-22 RAPTOR FIGHR IS A STEAH AIRCRAF BUILT TO ESURE AMERIN AIR DOMINANCE OVER THE BATTLEFIELD. BUT ON A VOTEF 58-40TODAY, THE U.S. SENATE CALLED A HALT TO FUHER PRODUCTION OF THE ANES THAT COS MORE AN $350 MILLION EACH. THE VOTE TO KEEP THE F-22 FLEET AT 187 AIRCRAFT WAS A SIGNIFICA VICTORY FOR RESIDENT OBAMA AND DEFEE SECRETARY GATES OHAVE LABEL THE F-22 PROGRAM AN UTMODED, EXPENSIV LUXURY.

>> EVERY DOLLAR OF WASTE IN OUR DEFENS BUDGET IS IS A DOLLAR WE CAN'T SPEND TO SUPPORT OUR TROS OR PREPARE FOR FUTURE THREATS OR PROTECT THE AMERIN PEOPLE. OUR BUET IS A ZERO SUM GAME. IF MOR MONEY GOES TO F-22s IT IS OUR TROOPS AND OUITIZENS WHO LOSE. >>eporter: THE F-22 WAS ORIGINALL PLANNED AND DESIGNETO TAKE ON THE SOVIET AIR FORCE. NONE HAS FLOWN IN COMB OVER IRAQ OR AFANISTAN. THAT'SHY SECRETARY TES DECIDED EARLIER THIS YEAR NO MORE F-22s WERE NEED.

>> THEILITARY ADVICEHAT I GOT WAS THAT THERE IS NO LITARY REQUIREMENT FOR NUMBERS OF 22 BEYOND 1.

>> Reporter: BUTHAT LED TO AOM CONFRONTATI WITH CONGRESS. ONE OF THE BIGGEST ON DENSE SPENDING IN DECADES. MARK THOMSON COVE THE PENTAGON FOR "TIME" MAGAZINE.

>> THE F-22AS VERY MBOLIC ISSUE FOR SECRETARY GATES BAS ON THE PEOPLE I'M SPEAKING TO SIMPLY BECSE IT'S EMBLEMATIC OFN OLD- FASHIONED KIND OF WAR THAT MOST MILITARYXPERTS DON'T SEE LOOMING THE HORON. IN FACT THEY DON'T SEE IT FOR THE NEXT 20 TO 30 YEARS AT THE EARLIEST.

>> Reporter: MEMBE FROM BOTH PARTIES ALONG WITH CONTRACTOR COUNTERAACKED AND THE CLIMAX TODAY CAME ON THE SENATE FLOOR. THE FIGHT WAS OVER AN AMENDMENT TO THE DEFENSE AUTHORIZATION BILL OFFERED BY THE TOP SENATORS ON THE ARME SERVICES COMMITTEE CARL LEV A JOHN McCAIN T CUT FUNDING R THE PLANE WHICH IS MUFACTURED OR SUBCONTRTED IN 44 STATES. THE STES WERERAISED BY THE PRESIDENT'S PROMISE T VETO ANY BILL WITHXTRA F-22 MONEY. A MESSAEINFORCED IN STRONG TERMS BY SECRETARY GAT IN A SPEECH LAST WEEK IN ICAGO.

>> WHERE DO WE DRAW THE LINE? AND IF NOT NOW WHEN? IF WE CAN'T GET THIS RIGHT, WHAT ON EARTH CAN WE GET RIGHT? IT IS TIME TO DRAW THE LINE ON DOING DEFENSE BUSINESS AS SUAL.

>> Reporter: GATES VEHENCE WAS ECHOED TODAY BY SENATOR LEVIN.

>> IF NOT NOW WHEN? IF NO NOW WHEN? WHEN WILL WE END PRODUCTION OF AEAPONS SYSTEM IF NOT NOW WHEN YOU HAVE BOTH PRESIDENT OBAMA AND PRESIDENT BUSH TRYING TO END IT, SECRETARIES OF DEFENSE TRYING TO END IT CHAIRM OF THE JOINT CHIEFS TRYING TO ENDHE PRODUCTION OF THE F-22. WE MUST NOW DO THE SENSIBLE THING.

>> Reporter: THE AMENDMENT FIGHT LED TO CROSS-ALE COALITIONS OF SENARS WHO TEN ARE AT ODDS. GEOIA REPUBLICAN SAXBY CHAMBLISS LED THE CHARGE FOR THE FUNDING. LOCKHEED MARTIN WHICHIS THE PRINCIPAL CONTRACTOR BUILDG THE F-22 HAS SIGNIFICANT OPERATIONS IN HIS STE. CHALISS INVOKED AIRMEN AND SODIERS TO WHO LITLE SAY IN THE FUNDING DEBAT

>> STAND UP AND SAY THAT IF YOU CUT PRODUCTION OF THE F-22 OFFAT 187, YOU'RE GOING TO PUT IS COUNTRY AT A HIGH RISK FROMATIONAL SECUTY STANDPOINT.

>> Reporter: CONNECTICUT DEMOCRAT CHRISTOPHER DD ARGUED THAT THOUSANDS JOBS WERE AT STAK

>> FROM BOTH A MANUFACTURING PERSPECTIVE, A JOB LOSST A TIME WHEN UNEMPLOYME RATES ARE SKYROCTING, THIS BOD IS ABOUT TO LAY OFF ANYWHERE FROM 25,000 TO 90,000 PEOPL

>> Repoer: McIN RECOGNIZED THAT POTENTIAL EMPLOYMENT IMPACT BUT IN ARGUING AGAIST THE FUNDI INVOKED A FAMOUS WARNING FROM DWIGH EISENHOWE.

>> I WOULD ON ADDTO PRSIDENT EISENHOWER REWELL ADDRESS TO THE NATION WHICH IS COMPELLINGN MANY WAYS THAT IT SHOULD BE CHANGED THE WORD SHOULD BE CHANGED FROM MILITARY INDUSTRIAL TO MILIRY INDUSTRL CONGRESSIONALOMPLEX. WHAT WE AREEEING HERE ESPITE THE ADVICE AND COUNSEL OF OURPRESIDENT, OF OUR CRETARY OF DENSE,F OUR UNIFOED MILITARY WITH RARE EXCEPTION IS A RECOMNDATION HAT WE STOP WITHHIS AIRCRAFT AND BILD ANOTHER. >>eporter: MARK THOMSON.

>> THE SENSE OFODAY'S VOTE WAS IF THE F-22 PROPONENTS H SUCCEEDED THATTHAT REALLY COULD HAVE DAILED SECRETA GATES'S EFFORTS TO RETL THE PEAGON IN A SIGNICANT WAY. THIS MAY B THE FIRST TIME IN AECADETHAT AN IMPOANT VOTE IN CONGRESS ABOUT THE FUTURSHAPE AND DIRECTIOOF THE U.S.ILITARY S TAKEN LACE. THE PEOPLE ITALKED TO SUGGEST THATHIS VOTE TODAY IS A BIG VICTY FOR SECRETY GATES AND WILL HELP HIM CONTIE TO MAKE THE PENTAGON. >>eporter: TOY'S VOTE APPRS TO BE THE END OF THE LINE FOR THE F-22. EN THOUGH THE HOUSE PRESERVED FUNDIN FOR THE PLNE IN ITS VERSION OF THE DEFENSE BILL. THEWO BILLS NOWWILLBE RECONCIL, AND THEINAL FATE OF THE RAPTOR LIKE DECIDED. LEARNING ABT READING, WRITING, AND FEELINGS. OUR STORY COMES FROM SPECL CORRESPONDENT JOHN TULENKOF LEARNINMATTERS, WHICH PRODUCES EDUCATION STORS FOR THE NEWSHR.

>> MY NAM IS CLAUDIA. WHEN I'M VERY ANGRY, I CRYND SCRM.

>> Reporter: OE A WEEK IN IRLEY'S FOURTH GRADE CLASSROOM, STUDENTS SET ASIDE ACADEMICS TO FOCUS ON A DFERENT KIND OF LEARNING. I FEEL ARY WHEN YOU THER ME BECAU I NEED YOUR RESPECT.

>> I FEEL....

>> Reporter: THE STUDETS AT PUBLIC SCOL 2 IN BROOKL NEW YORK ARE LEARNING TO IDENTIFY THEI FEELINGS AND COMMUNICATE WHAT'S BEND THEM. 'S PART OF A SMALL BUT GROWING MOVEMENT EDUCATION CALLEDSOCIAL AND EMIONAL LEAING. TODAY'S LESSON IS ABOUT SELF-EXPRESSION, USIN WHAT'S CALLEDVe AN "I" MSAGE.

>> NAME IS LIA. EN I'M ANGRY I LIKE YELL AT PEOPLE.

>> AN "I" MSAGE IS BASILLY A WAY TO COMMUNICAT IT HEL KIDS DO EXACTLY THAT, EXPRESS THEIR FEELINGS A AT THEY NEED. WE HAVE TO TALKBOUT WHAT WE FEEL BECAUSE THAT'S THE ONLY WAY THA WE'RE GOING TO SOLVE OUR PROBLS.

>> A LOT OFCHILDREN HOLD IN WHAT THEY'RE FEING. THAT'S WHAT INTERFERES WITH THEILEARNING.

>> WE'RE GOING TO EMBRACE BIANCA BUT WE'RE....

>> Reporter:ATCHING YOU YOUR CLASS I THOUGHT SHS TEIR THERAPIST.

>> NO, FAR FROM IT. THAT'S NOT WHAT WE'RE DOING. IT'S NOT ABOUT THERY. IT'S ABOUT GIVING THEM THE TOOLS THEYEED SO THAT THEY CAN DEAL WITH THOSE EMOTIONS SO TH THEY CAN FOCUS ONTHE ACADEMICS.

>> Reporter: DOW THE HALL, A DIFFERENKIND OF LESSON. THE TEACHER ISARTIN.

>> CH, DO YOU WANT TO START?

>> I HAVE A PROBLEM OUTSIDE IN THE SCHO YARD. A KID IS CALLINGE A NAME.

>> MYESSON TODAY WAS ON ACTIVE LISTENING. I WAND THEM TOCTUALLY SEE AT POOR LISTING LOOKED KE.

>> I CAN'T DO STUFF BECAUSE I'M WEAK. ARE YOU LISTENING?

>> YES, I'M LISTENING.

>> IF YOU'RE ACTIVELY LISTENING, Y CAN BETTER UNDERSTAND WHERE ONE PERSON IS COMING FROM,ROM THEIR OWN POINT VIEW.

>> WHAT HAPPENED THERE WHO WOULD LIKE TO SHARE?

>> WE'RE TRNG TO TEACH KIDS HERE HOW TO GET ALONG WITH ONE ANOTHER. HOW TO SPEAK WITH EA OTHER. HOW TO B RESPECTFUL. HOW TO ALLEVIATE CONFLICT. THIS IS A CURRICUL THAT GIVES STUDENTS VOICE. IT GIVES THEM A TIME TO REFLECT. ACTION.

>> Reporr: LESSONS LIKE THESE AREAUGHT THROUGHOUT THE SCHOOL. AND NOW IN OUT 10% OF PUBL SCHOOLS NATIOIDE. STTES ARE GETTING BEHIND IT MAKING SOCIAL AND EMOTIONAL LEARNING AEQUIREMENT. THE MOVENT STARTED WITH TH BOOK "ANOTIONAL NTELLIGENCE" BY PSYCHOLOGT AFTERNOON SCNCE WRITER DANIEL GOLDMAN. SOCIAL AND EMOTIONAL LEARNING IS LFE SKILL TRAINING.

>> Reporter: WHAT ARE E SKILLS?

>> SELF-AWARENESSIS THEASIS OF OD JUDGMENT I LIFE. MANING YOUR DISTRESSING EMIONS IS GOING TO HELP YO IN Y SITUATION. EMPATHY AND SENSNG HOWOTHER PEOP ARE FEELING AND USING THAT TO CRETE RAORT AND CHEMISTRY MEANS YOU'R GOING TO HAVE RCH RELATIONSHS. SOCI SKILL. GETTING ALO WELL. LEARNING HO TO WORK OUT DIFFICULTIESND DISAGREEMENTS IN A WIN-WIN WAY. THESE ARE LIFE SKILLS ANY PARENT WOULD WANT FOR THEIR CHILD.

>> Reporter: INREST IN TH FIELD HAS RISEN AS FAMILIES ANDCHILDREN FA GREATER ECONOMIAND SOCIAL STRAINS.

>> THRE ARE SOME CHILDREN WHO, FOWHATEVER REASON, HAV REAL DEFICITS IN SOCIAL SKI, IN ATTENTION, IN EMOTNAL SELF-CONTL, WHICH IS WHY THINK IS SO HEARTENING THAT THESE SOCIAL-EMOTIONA LENING PROGRAMS HELP THOSE KIDS THE MOST ECAUSE IT HELPS THEM GET A MORE EQUA PLAYING FIELD FOR THE RESTOF THEIR LIVE.

>> Repter: HELPING STUDENTS MAAGE EMOTIONS AND FINDI WS TO GET ALG COULD ALSO LP TEACHERS. IN NATIONAL SURVEYS, THEY' CONSISTENTLY IDENTIFI DISRUPTIVE BEHAOR AND DISCIPLI PROBLEMS AS TOP CONCERN THERE IS A LOT AGGRESSION IN MY CLASSROOM. WHEN WE CVERED A LOT O WHAT TO DO WHEN WE'RE FEENG ANGRY, THAT HELPSHE STUDENTS. THEY KNOW HOW TOHANDLE THE ANGER. THEY KNOW HOW TO STOPAND INK. I THINK SOPPING AND THINKING IS A KEY SKILL TT THEY NED TO BE ABLE TO DO.

>> A HOMEE KNOW HOW TO SOLVE OUR PROBLEMS. Reporter: THESEFOURTH AND FIFTHRADERS AT PUBLIC SCHO 24AY THEY'VECHANGED BECAUSE OF THE THINGS TY'VE LEARNED IN SCHOOL. WHAT DO YOUET OUT OF TALKING ABOUT YOUR FEELING WHEN I SHARE MY FEELINGS OW WITH OTHER PEOPLE, I FEEL SAFE. I FEEL LIKE I CAN T MY FEELINGS O. IT DOSN'T STAY INSIDE OF ME.

>> Rerter: HAS TS CLASS HELPEDOU?

>> I USED TO GET... LIKEF SOMEBODY SAI SOMETHING TO ME, I UD TO GET SO ANY. I LEARNED TO LIKE RELAX FOR A SECOND AND LIKE THINKBOUT WHAT I WAS GOING TO DOEXT. INSTEAD OF JUSTCTING OUT.

>> Reporter: WHAT' DIFFERENT ABOUT SNU.

>> WHENEVER SOONE WANTED TO BE MY FRIE I USED TO LIKE MOVE AWA FROM THEM. NOW IEARNED THAT GET KNOWING PEOPLE IS MUCH BETTER. SOIKE YOU CAN LIKEHARE YOUR STUFF WITH THEM YOU CAN TRUSTHEM.

>> THE MOR RELAXED THEY ARE, YOU KNOW, TE LESS PROBLEMS THEY HAVE. THE LESS NEGATIVE EMOTIONS AT THEY'RE FEELING, THE BETTER ABLE THEARE TO DEAL WITH THE ACEMICS.

>> Reporter: TCHERS AT PUBLIC SOOL 24 SAY TT'S WH THEY'RE SEEING. ST SCORES HERE HAVE RIN. AND THE SCHOOL HAS AN N-RATING FROM THE NEW YORK CITY DEPARTMENT OF EDUCATION. AND AEW REPORT ANALYZED RESULTS FOR SOME 300,000 STUDENTS NATIONWIDEN SCHOOLS THAT TEACH SOCAL AND EMOTIONA SKILLS.

>> 10% LS ANTI-SOCIAL BEHAVIOR. IT MEANS THAT CHILDREN ARE BETTEREHAVED. FEWER KIDS IN MILE SCHO SENT THE INCIPAL BECAUSE THEY'RE FIGING. ALL OF THAT GOESDOWN. THE OTHER THING IS THATHE POSITI BEHAVIORS GO UP 10%. LISTING IN CLASS. NOT CUTTING CSS. LIKING SOOL. ENJOYING MY EDUCATI. FEEL I'M BONDED WITH THE TEACHER. THERE'S SEONE AT SCHOOL THAT CARES ABOUT ME. UP 10%. BOTTOM LINE THIS IS SPECTACULAR. ADEMIC ACHIEVEMENTEST SCORES UP 11%.

>> ReporterAT THE SAME TIME, HOWEVER, GOLDMAN CAUTIO THAT WHEN STUNTS BECOME ADULTS, ACADEMICS M ONLY TAKE THEM SO FAR.

>> HE EDUCATION THAT WE GET IS ESSENTIAL IT'S THE NECSARY PLATFORM. IT'S NOTUFFICIENT FOR SUCCESS FOR OUTSTANDING PERFORMANCE. WHAT DIINGUISHES YOU HOW YOU MANAGE YOURSELF AND HO YOU HANDLE YOUR RELATIONSHIP SOMETHINGOMPLETELY OTHER THAN THE STANDARD CURCULUM IN SCHO.

>> Reporter: TO RAISE TEST SCORES, SCHOOLSAVE PILED ON THE ACEMICS, DEVOTING MORE TIME MATH AND READING AND LESSO THINGS LI SOCIAL AND EMOTIONAL LEARNING.

>> IFTHEY FOCUSN TEST SCORES, THEY'RE FOCUSING TOO MUCH O DATA AND NUMBERS. BUT YOHAVE THIS CLASS WHEN TH BECOME ADULTS, THEY'LL HAVE BETTERKILLS. EY'LL HAVE BETTER RELATIONSHIPS. THEY'LL KNOW WT TO DO WHEN THERE IS CNFLICT. I THINKTHAT'S THE THING WHEN THEY BECOME ADULTS.

>> Reporter: WHILE THEY'RE STILL CHILDREN,HEY'LL BRING OTIONS TO SCHOOL. WHETHER THEY'REEARNING TO NDLE THEM OR NOT.

>> Lehrer: NOW, A CLOSER LK AT THE BUDGET DL IN CALIFORNIA. Y SUAREZ HAS THAT STORY. Suarez: IT'S BEN ALMOST THREE WEEKS SCE CALIFORNIA'S BUDGET CRIS REACHED T TIPPING POINT. THAT'S WHEN THE STATE STARTED PAYING CONTRTORS AND VDORS IN I.O.U.s BECAUSE OF26 BILLION SHORALL. LT NIGHT LAWMAKERS ANDHE GOVERNOR FINAY REACHED A DEAL AND A PAINFUL ONE AT THA IT INCLUDES BILLNS OF DOLLARS IN CUTS STATE SERVICESND BRROWING MON FROM LOCAL GOVERNMENTS. NEWSHOUR CORREONDENT SPENCER MICLS HAS BEEN COVERINGHIS STORY. HEOINS US FROM SAN RANCISCO. SPENDER LAST NIGHT WHE THE GOVERNOR MA HIS ANNOCEMENT OF A DEALITH P STATE LEGISLATORS, HE SAID WE DALT WITH EENTIRE26 BILON DEFICIT. DI HE? AND IFE DID, HOW?

>> WELL, RST OF ALL THE DEFICIT WAS ACTUALLYUCH MORE TH THAT. IT WAS ABOUT $60 BILLION. BUT IT'S BE WHITTL DOWN THROUGHUTS OVERTHE PAST SEVERAL MONS. HE DID DEALITH IT. THE LEGISLURE DEALT WTH IT. BUT THEYEALT WITH IT THE OLD- FASHIONED WAY. THEY MADE DEALS. THEY DE SOME CUTS. A LOT OF BIG CUTS. EY DID NOT PUT ANY NEW TAXES INTO PLAY. BUT THEY MADE BUNCH OF TTLE DEALS THAT TRANSFERRED MONEY FRO HERE TO TRE AND THEY CAME UP WITH WH THEY SAY IS A BALANCED BUDGET

>> Suarez: SIN THISRISIS FIRST BEGAN, THEY'VE PAID STATE CONTRACTORS AND SOME TAX PAYERS WITH MORE THAN 15000 O.U.s. THE STATE IN EFFECT TAKING ON ITSELF HUNDRS OF MILLIONS OF DOLLARS IN FURE OBLIGIONS. WERE THOSE PRT OF THE DEAL? ARE THOSEGOING TO BE PAID OFF NOW?

>> WELL, EVENTUALLY THELL BE PAID OFF. THEY'RE SUOSED TO BE PAID OFF STARTING OCTOBER 2. BUT THAT COULDHANGE. IT DEPENDS... THE STATE COMPTROLLER, I TALKE TO THE STATE COTROLLER'S OFFICE TODAY. THEY SAID IT DEPENDSON WHAT THIS BIG BUDGET DEAL COMES UP WITH. IF IT REALLY DOES MAKE ENOH MONEY FOR THE STTE AND THE CUTS MA THE EXPENSES LESS, THEN TH WILL BE ABLE TO REDEEM THE IOUs, BUT THEY'RE NOT SURE TH'S GOING TO HAPPEN. THEY'RE GNG TO HAVE TO HAVE A BIG PROCESS WHERE TEY DEDE HOW MUCH MONEY THE STATEAS AND IF IT CAN PAY OFF THE Is.

>> Suar: IN THE WHEEN MEANWHILE WHICH CALIFORNIANS ARE GOING TO BE FEELIN THE EFFECT OF THO CUTS?

>> MOSTALIFORNIANS WILL BE FEENG THEM. THE PR OF COUE ALWAYS GET HURT WITH ALL THESE THINGS. A BIG CUT TO WELFAE. THEPEOPLE IN WELFARE AGENCIES ARE VERY UPSET BY THIS. TH THINK THAT IT' A TERRIBLE THING. AT THEY HAD TRIED TO GET PEOPLE ON THE WORK LLS AND THOSE PEOPLE AREOW GOING TO HAVE A HARD TIME STAYING ON THE ROLLS, GETTING ANY WELFARE. PEOE WHO ARE YELLI PERHAPS THE LOUDEST ARE THE CITIES AND THE COUNTIES BECAE CALIFORNIA, THE STATE, INTENDS TO BOOW MONEY FROM THE CITIES AND T COUNTIES AND TAKEOME OF THE MONEY AWAY FROM THEM. THEY CLAIM TY WON'T BE ABLE FILL THEPOTHOLES IN CITIES AND COUNTIESROUND CALIFORNIA. SO THEY ARE THREATENING TOSUE THE STE. THEY SAY THEY ACTUALLY WIL TY'VE ALSO TAKEN MONEY AWAY FROM REDEVELOPMENT PROJECTS. THAT, THEY SAY, GOING TO HURT THE CONSTRUCTIONNDUSTRY BECAUSE THESE REDEVELOPMENT PROJECTS WERE, YOU KNOW, INVOLVED IN CONSTRUCTION AND CHANGING CIES. SOHAT'S ALL GOING TO ME TO HALT. SO THEY'REERY CONCERNED BOUT THAT. EDUCATIO EDUCATN IS, OF COURSE, ANOTHER BIG HIT AREA. THERE WL BE A LOT OF MONEY CHOPPED FM EDUCATION. SCHOOL CSSES ARE GOING TO BE LARGER. THEY'RE GOINGTOE... THERE ARE GOING TO BE TEACHER LAY- OFFS. THERE READY HAVE BEEN. SUER SCHOOLS HAVE ALREADY BEEN CUT. EDUCATIONK-12 AND COMMUNITY COLLEGES ARE HURT. AND THEN SOME OF T UNIVERSY OF CALIFORNIA AND THE STE COLLEG SYSTEM THE STATE UNIVERSITY SYSTE, THOSE BIG, BIG PROBLEM THERE. THE UNIVERSITY OF CALIFORNIA COMPLAINING THAT ITS REPUTATION AS ONE OF E TOP PUIC UNIVERSITIES IN THE COUNTRY IS JEOPARDY BECSE OF THEIG CUTS TH THEY'VE HAD TO MAKE.

>> Suez: DOESN'T THIS DEAL STILL HAVE TO PASS THE LEGISLATURE?

>> IT DOES. THERE'S ALSO A WRANGLING GOING ON RIGHT W. IT'S NOT EVENSURE THAT IT'S GOING TO PASS THEEGISLATURE. THE VOTE IS SCHEDULED FOR THURSDAY BUT THERE'S ALS.. THERE'S ALL SORTS O LOBBYING OING ON. VARIOUS GROU TRYING TO CONTACT TIR LEGISLATORS. AND THEEGISLATORS HOLDING THE CAUCUS TODAY WHE THE LEADERSHIP, WHICH MADE THI DEAL WITH GOVERNOR SCHWARZENEGGER, IS TRYINGO SELL TO THE MEMBERS OF THEIR CAUSES. IT'S NOT SURE... THERE'S ONE MAJOR STATE WRITER WHO IS PRECTING THAT IT MIGHT N PASS.

>> Suarez: ROUGHLY O OUT OF EVY EIGHTMERICANS LIVES IN CALIFORNIA. IT CERTAINLY AFFEC A LOT OF PEOPLE BUT WHAT ABO THE TENSF MILLIONS AMERICANS WHO DON'T LIVE IN CALIFORNIA? DOESHE STATE'S FISCAL CRIS HAVE A DOWNSTREAM EFFECT FOR EVERYBODY EE?

>> WL, THE STATE'S FISCAL CRISIS IS MORE TAN JUST A STATE ISIS. IT A WHOLE ECONOMIC CRIS. CALIFORNIA'S ECONOMY S IS THE 8th LARGEST ECONOMY IN E WORLD. AND CERTAINLY THE LARGEST IN THE UTED STATES. SOIF CALIFORNIAAS A PROBLEM AND IT SEE TO BE HAVING A BIG PROBEM IT AFFECTS EVRYBODY ELSE. IN ADDITION TO THAT, THE BON THAT CALIFORNIA HAS ARE RATED ABOUT JUNK LEVELAT THIS POIN D MAYBE EVEN GOING LOW THAT. SO THAT IST GOOD. THAT AFFECTS THE ENTIRE BOND MARKET. BUT THE OTHER GENERAL IDEA IS THAT AS CALIFORNIA GOES, SO GOES THEREST OF THEATION. WHETHER THAT'S TRUER NOT I'M NOT SURE. BUT IN THIS CA CALIFORNIA COULD SHOW THE RE OF THE NATION WH'S GOING ON. IT ISN'T GOOD AT THIS POINT. SO CALIFORNIA'S PROBLEMS COULD HAVE ANEFFECT THROUGHOUT THE COUNTRY.

>> Suarez: SPENCER MICHELS JONING US FROM SAN FRAISCO. GOOD TO TALK TO YOU >>ICE TOALK TO YOU, RAY.

>> Lehrer: AGAIN, THE OTHER MAJOR DEVELOPMENTSF THE DAY. PRESIDE OBAMA KEPT PUSHING FOR ACTIOON HEALTH CARE REFORM IN HE FACE OF MOUNTING RESISTAN. AND THE CHAIAN OF THE FEDERAL RESERVE, BEN RNANKE, SAID HE'S CONFIDENT STIMULUS MSURES CAN BENDED AS NEEDED WITHOUT FUELING INFLATION. WE'LSEE YOU ONLINE, AND AGAIN HERE TOMORROW EVENIN I'M JIM LEHRER. THANYOU, AND GOOD NIGHT. NEURHONO IM LC 1R ISINDEFOR THE NEWSHOUR WITH JIM LEHRER IS PROVIDEBY: INT. SUPPORNG MATH AND SCIENCE EDUCATION FOR TOMORROW'S INNOVATORS. CHEON. AND BY THE ALFR P. SLOAN FOUATION. SUORTING SCIENCE, TECHNOLOGY, AND IMPROVEDCONOMIC PERRMANCE AND FINANCIAL LITERACY IN THE 21sCENTURY. AND WITH THE ONGOI SUPPORT OF THE INSTITUTIONS AND FOUNDATIONS. AND.. THIS PROAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. ND BY CONTRIBUTIONS TO YOUPBS STATION FROMIEWERS LIKE YOU. THANK Y. Captioning sponsod by MacNEIL/HRER PRODUCTIONS Captioned Media Access Groupt WGBH accessgbh.org FONO THE DEAD"... HISTORY TELLS US THE SPANI EASILYONQUERED THE MIGHTY AZTEC THIS, OF COURSE, IS A VERY ROSE-TINTED VIEW OF THREALITY. Announcer: BUT A GRSOME FIND SUGGESTS HISTORY MIGHT BE WRO. BONES FROM AN AZTEC GRAVE SITE ARE PROVING THAT SPANIARDS WERE CTURED, SACRIFICED, AND EAN. Woman:HE PRIEST WOULD TEAR THEEART OUT AND OFFER ITO THE SUN. Announcer: AZTECASSACRE, ON "SECRETS OF T DEAD."