PBS NewsHour; December 27, 2010 3:00pm-4:00pm PST

WE'LL SEE YOU ONLINE, AND AGAIN Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Brown: GOOD EVENING. I'M JEFFREY BROWN. THE DIGGING OUT WAS UNDER WAY TODAY AFTER A POWERFUL BLIZZARD CRIPPLED THE EAST COAST.

>> Warner: AND I'M MARGARET WARNER. ON THE NEWSHOUR TONIGHT, WE HAVE THE LATEST ON EFFORTS TO GET STRANDED PASSENGERS TO THEIR DESTINATIONS AFTER MORE THAN 5,000 FLIGHTS WERE CANCELLED.

>> Brown: THEN BETTY ANN BOWSER REPORTS ON CHALLENGES TO THE NEW FEDERAL HEALTH CARE REFORM LAW IN ONE MIDWESTERN STATE. ON NOVEMBER 2 REPUBLICANS HERE IN WISCONSIN TOOK OVER EVERYTHING FROM THE STATE HOUSE TO A NUMBER OF U.S. CONGRESSIONAL DISTRICTS. WE'RE HERE AT THE CAPITOL IN MADISON TO SEE HOW LAWMAKERS INTEND TO USE THEIR NEW INFLUENCE TO PUT THE HEALTH-CARE REFORM LAW ON PAUSE.

>> Warner: AND WE GET PERSPECTIVE ON WHERE HEALTH CARE REFORM STANDS NATIONALLY AND THE BATTLES AHEAD FROM JULIE ROVNER OF NPR.

>> Brown: PLUS, WE EXAMINE POLITICAL DISSENT AND THE LAW IN RUSSIA, AS OIL TYCOON MIKHAIL KHODORKOVSKY IS FOUND GUILTY OF EMBEZZLEMENT.

>> Wanrer: WE BEGIN A WEEK OF ENCORE REPORTS FROM PAUL SOLMAN ON THE FORECLOSURE CRISIS. TONIGHT, TROUBLES IN FLORIDA AS BUYERS SNAP UP DISTRESSED HOMES.

>> Brown: AND RAY SUAREZ LOOKS AT PROPOSED PRIVACY RULES FOR INTERNET PROVIDERS, AND WHAT THEY MEAN FOR THE REST OF US ONLINE.

>> WHEN IT COMES TO COMPANIES SURREPTITIOUSLY COLLECTING INFORMATION ABOUT YOU AND SELLING IT TO OTHER COMPANIES, YOU OUGHT TO BE ABLE TO MAKE A CHOICE TO OPT OUT.

>> Brown: THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: MOVING OUR ECONOMY FOR 160 YEARS, B NSF, THE ENGINE THAT CONNECTS US.

>> OIL COMPANIES IS HAVE CHANGED.

>> OIL COMPANIES HAVE CHANGED MY COUNTRY.

>> OIL COMPANIES CAN MAKE A DIFFERENCE.

>> WE HAVE THE CHANCE TO BUILD THE ECONOMY.

>> CREATE JOBS, KEEP PEOPLE HEALTHY AND IMPROVE SCHOOLS.

>> AND OUR COMMUNITIES.

>> IN ANGOLA CHEVRON HELPS TRAIN ENGINEERS, TEACHERS AND FARRS, LAUNCH CHILD'S PROGRAMS.

>> IT'S NOT JUST GOOD BUSINESS.

>> I'M HOPEFUL ABOUT MY COUNTRY'S FUTURE.

>> IT'S MY COUNTRY'S FUTURE.

>> AND BY THE BILL AND MELINDA GATES FOUNDATION. DEDICATED TO THE IDEA THAT ALL PEOPLE DESERVE THE CHANCE TO LIVE A HEALTHY, PRODUCTIVE LIFE. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Brown: FOR THOUSANDS OF PEOPLE TODAY, THE TRIP HOME FOR THE HOLIDAYS TURNED INTO AN ONGOING BATTLE WITH A BLIZZARD. AIRPORTS BEGAN REOPENING AFTER THE BIG STORM THAT BLEW UP THE EAST COAST ON SUNDAY, BUT THE DAMAGE WAS DONE. IN AIRPORT AFTER AIRPORT, ACROSS THE NORTHEAST, THE SCENE WAS THE SAME. STRANDED PEOPLE WHOSE PLANES WERE SNOW-BOUND.

>> WE THOUGHT WE MADE IT, WE THOUGHT WE WERE GOING TO BE THE LAST PLANE OUT BUT THEN, YOU KNOW, IT TURNED SOUR.

>> Brown: BY THE HUNDREDS THEY SPENT THE NIGHT IN AIRPORT TERMINALS FROM THE CAROLINAS TO CANADA, AS FLIGHT CANCELLATIONS SUNDAY AND TODAY CLIMBED ABOVE 5,000.

>> WELL, OUR FLIGHT WAS CANCELLED. AND THEY'VE GIVEN US A FLIGHT FOR 8:00 TOMORROW MORNING BUT SAID DON'T COUNT ON IT.

>> Brown: TRAVELERS AT BOSTON'S LOGAN INTERNATIONAL AIRPORT COULD ONLY WATCH TODAY AS PLOWS STRUGGLED TO CLEAR THE RUNWAYS. ALL THREE MAJOR AIRPORTS IN THE NEW YORK CITY AREA WERE FORCED TO SHUT DOWN SUNDAY. BUT ALL PLAN TO BE OPEN BY THIS EVENING. EVEN SO, WITH HUNDREDS OF PLANES OUT OF POSITION, WOULD-BE PASSENGERS WERE LEFT WAITING IN CHICAGO AND AS FAR WEST AS CALIFORNIA. AN AIRLINES WARNED IT COULD TAKE MUCH OF THE WEEK TO FIND SEATS FOR EVERYONE AT A TIME WHEN FLIGHTS WERE ALREADY BOOKED FOR THE BUSY HOLIDAY SEASON. MEANWHILE, TRAIN TRAVEL OFFERED LITTLE RELIEF.

>> WHEN WE GOT HERE WE HAD HEARD THAT THEY WERE ALREADY CANCELLED. CANCELLED THE TRAINS.

>> Brown: AMTRAK SERVICE WAS HALTED FROM NEW YORK TO BOSTON YESTERDAY. AND SLOWLY BEGAN RECOVERING TODAY. EVEN UNDERGROUND TRAVEL HAD ITS PROBLEMS. PASSENGERS IN NEW YORK CITY SPENT A COLD NIGHT IN AN UNHEATED SUBWAY TRAIN AFTER IT GOT STUCK.

>> NO, NO HEAT, NO NOTHING. WE NOT GOING NOWHERE.

>> Brown: OUT ON THE STREETS OF NEW YORK, BUSES WERE STILL STRANDED ON SNOW-ED-IN ROADS THIS MORNING AS WINDS OF 50 MILES AN HOUR OR BETTER BLEW THE SNOW INTO DEEP DRIFTS. IN ALL THE CITY GOT NEARLY 20 INCHES 6 SNOW. BY AFTERNOON MAYOR MICHAEL BLOOMBERG SAID THE RECOVERY WAS UNDER WAY.

>> IT WAS A VERY HEAVY SNOWFALL. AND AS YOU KNOW IT WAS ACCOMPANIED BY INTENSE WIND. BUT THAT SAID, THINGS COULD HAVE BEEN FAR WORSE IN A NUMBER OF FACTORS ARE WORKING IN OUR FAVOR.

>> Brown: CENTRAL AND NORTHERN NEW JERSEY GOT 2 TO 3 FEET OF SNOW IN PLACES. AND THE STORM ALSO DROPPED A FOOT DEEP BLANKET ACROSS PHILADELPHIA. WORKERS LABORED TODAY TO CLEAR THE CITY'S FOOTBALL STADIUM FOR THE EAGLES AND THE MINNESOTA VIKINGS TO PLAY TOMORROW NIGHT. THE GAME WAS POSTPONED FROM SUNDAY NIGHT. FARTHER NORTH IN BOSTON, STREETS WERE MOSTLY EMPTY THIS MORNING AS PEOPLE HEEDED APPEALS NOT TO VENTURE OUT.

>> WE ASK EVERYONE TO STAY HOME. STAY OFF THE MAIN THOROUGHFARES.

>> Brown: IN ALL EMERGENCIES WERE DECLARED IN SIX STATES AS FAR SOUTH AS THE CAROLINAS. THE STORM HAD CROSSED THE DEEP SOUTH BEFORE ITS PUSH NORTH AND ATLANTA SAW ITS FIRST WHITE CHRISTMAS SINCE 1882.

>> Warner: STILL TO COME ON THE NEWSHOUR, CHALLENGING THE HEALTH CARE REFORM LAW IN WISCONSIN; JAILING A TYCOON IN RUSSIA; BUYING FORECLOSED HOMES IN FLORIDA; AND TRACKING CONSUMERS ONLINE. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN IN OUR NEWSROOM.

>> Sreenivasan: U.S. DRONE AIRCRAFT FLYING OVER PAKISTAN REPORTEDLY KILLED 18 SUSPECTED MILITANTS IN MISSILE ATTACKS TODAY. PAKISTANI INTELLIGENCE OFFICIALS SAID THE STRIKES WERE IN THE NORTH WAZIRISTAN REGION, NEAR THE BORDER WITH AFGHANISTAN. AND OVER THE WEEKEND, THE FIRST SUICIDE BOMBING BY A WOMAN IN PAKISTAN HIT A U.N. FOOD DISTRIBUTION SITE. IN RESPONSE, THE WORLD FOOD PROGRAM SUSPENDED OPERATIONS WHICH FEED MORE THAN 300,000 PEOPLE LEFT DISPLACED AND HUNGRY AFTER THE FLOODS EARLIER THIS YEAR. IN ITALY, BOMB SQUAD EXPERTS DEFUSED A PARCEL BOMB DELIVERED TO THE GREEK EMBASSY IN ROME. POLICE AND FIREFIGHTERS SURROUNDED THE BUILDING, WHILE EMBASSY STAFF WAITED OUTSIDE. LAST WEEK, SIMILAR BOMBS EXPLODED AT THE SWISS AND CHILEAN EMBASSIES, WOUNDING TWO PEOPLE. AN ITALIAN ANARCHIST GROUP CLAIMED RESPONSIBILITY FOR THOSE BLASTS. POLICE IN BRITAIN HAVE CHARGED NINE MEN WITH PLOTTING BOMB ATTACKS ACROSS THE COUNTRY. THEY WERE AMONG A DOZEN TERROR SUSPECTS ARRESTED LAST WEEK. AND AUTHORITIES IN THE NETHERLANDS INVESTIGATED SEVEN SOMALI MEN ROUNDED UP IN ROTTERDAM ON CHRISTMAS EVE. FIVE OTHERS WERE LET GO SUNDAY FOR LACK OF EVIDENCE. GOVERNMENT TROOPS WERE ON PATROL IN NIGERIA TODAY AFTER 32 PEOPLE DIED IN CHRISTMAS WEEKEND VIOLENCE. NEARLY 130 OTHERS WERE WOUNDED. MOST OF THE TROUBLE WAS CENTERED IN THE CITY OF JOS, DEEPLY DIVIDED BETWEEN CHRISTIANS AND MUSLIMS. ON CHRISTMAS EVE, MULTIPLE EXPLOSIONS WENT OFF THERE, TWO AT A LARGE MARKET WHERE PEOPLE WERE DOING LAST-MINUTE CHRISTMAS SHOPPING. SOME AUTHORITIES BLAMED A RADICAL MUSLIM SECT. THE U.S. SENATE RACE IN ALASKA IS FINALLY ALL BUT OVER. LAST NIGHT, REPUBLICAN JOE MILLER ANNOUNCED HE WILL NOT TRY TO BLOCK OFFICIALS FROM CERTIFYING INCUMBENT LISA MURKOWSKI AS THE WINNER. SHE FINISHED FIRST AS A WRITE-IN CANDIDATE AFTER LOSING IN THE REPUBLICAN PRIMARY. THE STATE SUPREME COURT REFUSED LAST WEEK TO OVERTURN THE RESULTS. MILLER SAID HE WILL CONTINUE A CHALLENGE TO HOW THE VOTE WAS COUNTED. WALL STREET HAD A QUIET DAY, AS IT BEGAN THE FINAL TRADING WEEK OF THE YEAR. THE DOW JONES INDUSTRIAL AVERAGE LOST 18 POINTS TO CLOSE AT 11.555. THE NASDAQ ROSE A POINT TO CLOSE AT 2667. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO MARGARET.

>> Warner: THIS PAST YEAR, THE STRUGGLE TO ENACT HEALTH CARE REFORM WAS FOUGHT BY THE PRESIDENT AND THE CONGRESS IN WASHINGTON. NOW WITH THE LAW ON THE BOOKS, THE BATTLEFIELD TO SHAPE IT HAS EXPANDED TO STATES AND THE COURTS. THIS WEEK WE REPORT FROM TWO STATES THAT ARE TAKING SHARPLY DIFFERENT APPROACHES SINCE THE ELECTION. FIRST, WISCONSIN. NEW RESISTANCE THERE IS AIMED AT MANY ASPECTS OF THE LAW, ESPECIALLY AT A PROGRAM THE LAW AIMS TO EXPAND TO COVER MORE PEOPLE, MEDICAID. NEWSHOUR HEALTH CORRESPONDENT BETTY ANN BOWSER HAS OUR REPORT.

>> .

>> EVERY DECEMBER CHILDREN FLOCK TO THE CAPITOL BUILDING IN MADISON TO SEE WISCONSIN'S STATE HOLIDAY TREE AND ITS SEA OF DAZZLING COLORS. BUT INSIDE THE HALLS OF POWER THESE DAYS THERE'S ONLY ONE COLOR THAT RESONATES, RED. THAT'S BECAUSE ON NOVEMBER 2nd REPUBLICANS MADE A POLITICAL CLEAN SWEEP, TAKING THE GOVERNORSHIP, THE STATE LEGISLATURE, TWO U.S. CONGRESSIONAL SEATS AND A U.S. SENATE SEAT AWAY FROM THE DEMOCRATS. AND ONE OF THE ISSUES THAT TURNED WISCONSIN FROM BLUE TO RED WAS HEALTH CARE.

>> WE ALL LIVE IN WISCONSIN TOGETHER.

>> Reporter: WITHIN DAYS OF HIS ELECTION GOVERNOR ELECT SCOTT WALKER MADE IT CLEAR HE'LL GO TO COURT TO CHALLENGE THE NEW FEDERAL HEALTH-CARE REFORM LAW. THE INCOMING LEADERSHIP IN THE LEGISLATURE IS BEHIND HIM 100%. 46 YEAR OL REPUBLICAN SCOTT FITZGERALD IS THE NEW MAJORITY LEADER IN THE STATE SENATE. HIS YOUNGER BROTHER JEFF WILL BE SPEAKER OF THE WISCONSIN ASSEMBLY.

>> WE NOW HAVE OBVIOUSLY WITH THE REPUBLICAN GOVERNOR THE ABILITY TO ALLOW OUR ATTORNEY GENERAL TO JOIN IN ON THE NATIONWIDE LAWSUIT.

>> Reporter: THEY EXPECT THE STATE TO JOIN 20 OTHERS IN A FEDERAL COURT CASE IN FLORIDA. THAT SUIT CHALLENGES THE CONSTITUTIONALITY OF THE PROVISION IN THE NEW LAW THAT REQUIRES MOST AMERICANS TO BUY HEALTH INSURANCE.

>> WHAT IT WILL DO IS, YOU KNOW, KIND OF CHANGE THE DEBATE HERE. AND SO FAR THAT DEBATE HAS BEEN ABOUT HOW WILL IT BE IMPLEMENTED, HOW WILL WE ADAPT, WHAT EFFECT WILL IT HAVE ON THE PROGRAMS THAT WE ALREADY HAVE IN PLACE.

>> UNDER YOUR TONGUE, PLEASE.

>> BOTH BROTHERS FEAR THE NEW LAW WILL MEAN HIGHER HEALTH-CARE COSTS. AT A TIME WHEN WISCONSIN HAS A $3 BILLION BUDGET DEFICIT, HIGH UNEMPLOYMENT AND A BALLOONING MEINGD CADE POPULATION.

>> WE'RE SCARED TO DEATH ABOUT WHAT'S COMING DOWN THE PIKE AS WE STILL TRY TO GRASP EXACTLY WHAT IMPACT OBAMACARE WILL HAVE ON WISCONSIN.

>> WHAT ARE YOU SCARED OF?

>> WE HAVE A PROBLEM WITH THE COST OF HEALTH CARE. THAT'S THE REAL PROBLEM AT HAND. AND THERE'S NOTHING IN THERE THAT'S GOING TO CURB COSTS. WE WOULD LIKE TO SEE A MARKET-DRIVEN HEALTH CARE ECONOMY PUT SOME STUFF INTO PLACE THAT WILL MAKE IT CONSUMER-DRIVEN AGAIN. AND UNFORTUNATELY WHAT WE SEE IS JUST MORE BUREAUCRACY.

>> MY LEG IS VISIBLY SWOLLEN.

>> Reporter: ONE OF THE PROGRAMS REPUBLICANS WANT TO CUT IS MEDICAID. IN WISCONSIN IT'S CALLED BADGER CARE. JASON STEIN COVERS THE STATE HOUSE FOR THE MILWAUKEE JOURNAL SENTINEL.

>> MEDICAID IN WISCONSIN IS A MULTIBILLION-DOLLAR PROGRAM, ONE IN FIVE PEOPLE IN WISCONSIN ARE ON SOME FORM OF MEDICAID, WHETHER THEY'RE IN A NURSING HOME OR THEY'RE RECEIVING LONG-TERM CARE AT HOME OR THEY'RE RECEIVING HEALTH CARE. WHAT WE WOULD TYPICALLY THINK OF HEALTH CARE AT A DOCTOR AT A CLINIC, AT A HOSPITAL. RIGHT NOW THIS PROGRAM HAS EXPANDED DRAMATICALLY SINCE 2007.

>> Reporter: THE RECESSION HAS DRIVEN THOUSANDS OF THE UNEMPLOYED TO SIGN UP FOR THE FIRST TIME. DRAMATICALLY INCREASING THE SIZE OF THE PROGRAM.

>> IT IS A VERY CHALLENGING THING FOR POLITICIANS TO TAKE A AWAY HEALTH-CARE COVERAGE FOR PEOPLE.

>> Reporter: BOBBY PETERSON IS AMONG A GROUP OF HEALTH CARE ACTIVISTS WHO THINK REPUBLICANS WILL MAKE IT HARDER FOR PEOPLE TO QUALIFY FOR MEDICAID.

>> THEY'VE ORGANIZED SAVE BADGER CARE BRINGINGING IN ADVOCATES FROM ALL OVER THE STATE TO LOBBY AGAINST CUTS.

>> MISTAKES ARE MADE AND CERTAINLY WE WOULD WANT YOU TO-- WOULDN'T WANT TO YOU FALL THROUGH THE CRACK.

>> Reporter: THE NEW RECIPIENTS ARE CHILDLESS ADULTS, A CATEGORY NOT COVERED IN MOST STATES. BUT UNDER A WAIVER ON THED-- OBTAINED FROM WASHINGTON LAST YEAR BY OUTGOING DEMOCRATIC GOVERNOR AND HEALTH-CARE REFORM SUPPORTER JIM DOYLE, BADGERCARE WAS EXPANDED TO INCLUDE THEM. 64,000 NEW PEOPLE QUALIFIED FOR THE PROGRAM. TODAY ANOTHER 80,000 ARE CURRENTLY ON WAITING LISTS.

>> THEY'RE GOING TO INCREASE THE HOOPS AND HURDLES FOR PEOPLE WHO ARE TRYING TO GET THROUGH THE PROGRAM.

>> Reporter: LIKE WHAT?

>> MORE ADMINISTRATIVE BARRIERS. SO INSTEAD OF SAYING, YOU KNOW, WE CAN LET YOU SIGN UPJOHN LINE ON THE INTERNET, WE'RE NOT GOING TO DO THAT ANY MORE. YOU HAVE TO GO TO THE COUNTY OFFICE TO SIGN UP. INSTEAD OF PAYCHECK VERIFICATIONS FOR THE LAST TWO PAYCHECKS, WE'LL SAY THE NEXT FOUR PAYCHECKS.

>> Reporter: MATT VOGEL IS A CHILDLESS ADULT WHO SIGNED UP LAST SUMMER. HE SUFFERS IT FROM CHRONIC PANCREATITIS AND HAS BEEN UNABLE TO HOLD A STEADY JOB. BEFORE HE QUALIFIED FOR THE PROGRAM, HE HAD NO INSURANCE.

>> I DON'T HAVE TO WORRY IF I HAVE TO GO TO THE ER BECAUSE I'M HAVING AN ATTACK. I CAN LOOK HIM IN THE EYE AND I KNOW THEY WILL GET PAID. I KNOW AND THAT'S A BIG HELP. I DON'T FEEL LIKE A PARIAH.

>> BUT VOGEL AND THOUSANDS LIKE HIM COULD BE DROPPED FROM THE PROGRAM NEXT YEAR IF HE MAKES TOO MUCH MONEY.

>> HOW YOU HAVE BEEN?

>> DR. IAN GILLSON IS AN INTERNIST WHOSE BEEN SEEING A RASH OF NEW BADGER CARE PATIENTS LIKE VOGEL. HE SAYS MANY OF THEM HADN'T BEEN TO A DOCTOR IN YEARS. ALTHOUGH THEY SUFFERED FROM SERIOUS CONTINUES-- CONDITIONS LIKE DIE BEAT EENSD HYPERTENSION.

>> WE GOT THESE PEOPLE FOR THE MOST PART STRAIGHTENED OUT. WE GOT PROPER LAB TESTING, WE GOT THEM ON THE PROPER MEDICATIONS. THEIR DIABETES IMPROVED, THEIR BLOOD PRESSURE CAME DOWN, IN SOME RESPECTS THEY'RE ACTUALLY FEELING BETTER. WE WE ALSO KNEW AS WE WERE DOING THIS WE WERE PREVENTING DISASTERS DOWN THE ROAD RD GOVERNOR ELECT WALKER IS NOT SPECIFIC ABOUT WHAT CUTS WE MAKE TO BADGER CARE BUT HE GAVE A HINT AT ONE OF THE GUBERNATORIAL DEBATES THIS FALL.

>> WHICH THINK IT'S APPROPRIATE OVER TIME TO MOVE PEOPLE INTO JOBS SO THAT THE DOLLARS WE HAVE FOR MEDICAID CAN BE SPENT ON THE NEEDY IN OUR STATE.

>> Reporter: THE NEWSHOUR TRIED REPEATEDLY TO GET A ONE-ON-ONE INTERVIEW WITH THE GOVERNOR ELECT BUT A SPOKESMAN TURNED US DOWN CITING SCHEDULING PROBLEMS. AND ALTHOUGH WISCONSIN REPUBLICANS COMPLAIN ABOUT THE GROWING MEDICAID POPULATION, FEDERAL STIMULUS MONEY IS HELPING PAY FOR MUCH OF IT. THAT MONEY PROTECTS FAMILY COVERAGE SO STATES CANNOT CHANGE ELIGIBILITY STANDARDS RIGHT NOW. BUT WHEN THE STIMULUS MONEY RUNS OUT NEXT JULY, WISCONSIN THEN WOULD BE ALLOWED TO CHANGE SOME CATEGORIES OF ELIGIBILITY. POTENTIALLY ENDING COVERAGE FOR ABOUT 70,000 PARENTS AND CHILDLESS ADULTS. THEN IN 2014 WHEN KEY PARTS OF THE FEDERAL HEALTH REFORM LAW KICK IN FEDERAL MONEY IS EXPECTED TO COVER NEARLY ALL OF THE NEW PEOPLE WHO QUALIFY FOR MEDICAID IN MOST STATES FOR THREE YEARS. UNTIL THEN, STATES ARE STRUGGLING TO CLOSE LARGE DEFICITS AND THEY MUST FOLLOW THE RULES TO CONTINUE RECEIVING THEIR CURRENT AND NEW FEDERAL ASSISTANCE.

>> ONE OF THE BIG ISSUES THAT WE HAVE HERE IN WISCONSIN IS MONEY.

>> Reporter: DEMOCRATIC STATE ASSEMBLYMAN JOHN RICHARDS WHO'S ABOUT TO LOSE THE CHAIRMANSHIP OF THE ASSEMBLY'S HEALTH COMMITTEE TO A REPUBLICAN SAYS THERE'S A LOT OF MONEY ON THE LINE FOR WISCONSIN. $4 BILLION A YEAR IN FEDERAL-MATCHING FUNDS THE STATE COULD LOSE IF IT TAMPERS TOO MUCH WITH MEDICAID.

>> WE'RE RUNNING A HUGE BUDGET DEFICIT. AND EVERY TIME THEY TALK ABOUT TURNING BACK FEDERAL HEALTH CARE LAW, THEY'RE TALKING ABOUT BLOWING A HUGE HOLE IN OUR BUDGET THAT THEY'RE GOING TO HAVE TO FILL BECAUSE OUR CONSTITUTION REQUIRES TO US HAVE A BALANCED BUDGET.

>> Reporter: BESIDES MEDICAID, STATES LIKE WISCONSIN WILL ALSO BE ABLE TO CONTROL HOW THEY SET UP HEALTH INSURANCE EXCHANGES. PLACES WHERE PEOPLE CAN GO ON-LINE COMPARE INSURANCE PLANS, AND BUY AFFORDABLE COVERAGE. PAM HURD IS AN ASSOCIATE PROFESSOR OF PUBLIC AFFAIRS AT THE UNIVERSITY OF WISCONSIN.

>> SCOTT WALKER MADE IT PRETTY CLEAR THAT HE WANTS A VERY, VERY LIMITED REGULATION OF PLANS THAT PARTICIPATE IN THE EXCHANGE. AND THE STATE DOESN'T LOOK LIKE, AT LEAST, WILL GET REALLY INVOLVED IN TERMS OF NEGOTIATING ON BEHALF OF CITIZENS FOR THINGS, FOR BENEFITS AND THE COST OF THE PLANS.

>> Reporter: THE FITZGERALD BROTHERS WANT THE EXCHANGES TO BE FREE MARKET-DRIVEN WITH A MINIMAL AMOUNT OF STATE GOVERNMENT INVOLVED.

>> THE SLOWER WE CAN PROCEED AND KIND OF GET OUR DUCKS IN A ROW, THE BETTER OFF WE'LL BE. IF THE EXCHANGE IS DRIVEN BY, ULTIMATELY, YOU KNOW, GOVERNMENT BUREAUCRATS MAKING THE DECISIONS THAT ARE CURRENTLY MADE BY SOME OF THE PRIVATE SECTOR HEALTH INSURANCE CORPORATIONS, IT'S GOING TO PUT US IN A BAD POSITION.

>> Reporter: AND BROTHER JEFF DOES NOT WANT TO SEE WISCONSIN HAVE TO DO WHAT SOME SAY THE FEDERAL GOVERNMENT WILL HAVE TO DO, HIRE MORE PEOPLE TO ADMINISTER PORTIONS OF THE LAW.

>> JUST THE FIGURE THAT'S STAGGERINGING TO ME IS JUST TO, YOU KNOW, FROM THE IRS STANDPOINT, 15,000 NEW EMPLOYEES HAVE TO BE ADDED JUST TO, YOU KNOW, ADMINISTER OBAMACARE AND LOOK AT THE TAX IMPLICATIONS.

>> Reporter: DEMOCRATS IN WISCONSIN SAY THEY WILL FIGHT EFFORTS TO TURN BACK HEALTH-CARE REFORM, INCLUDING CUTS TO MEDICAID. SO THE WINTER ICE MAY BE LONG GONE BEFORE THE FUTURE OF THE STATE'S MEDICAL PLAN IS CLEAR.

>> TOMORROW NIGHT WE'LL LOOK AT HOW CALIFORNIA IS TRYING TO ACCELERATE IMPLEMENTING THE NEW LAW THERE. TO HELP PUT ALL THIS IN A NATIONAL PERSPECTIVE, I'M JOINED BY JULIE ROVNER, WHO COVERS HEALTH CARE FOR NPR. JULIE, WELCOME BACK. SO BROADLY, WHERE ARE WE NOW IN IMPLEMENTING HEALTH-CARE REFORM? HOW MUCH GOT DONE, KICKED IN IN 2010?

>> WELL, I THINK WHAT CONGRESS WANTED TO DO THAT FIRST YEAR WAS REALLY DO SOME SMALL BENEFITS THAT AFFECTED A LOT OF PEOPLE. SO WHAT YOU SAW WERE THE PATIENTS BILL OF RIGHTS BEFORE INSURANCE CHANGES, LETTING PEOPLE KEEP THEIR ADULT CHILDREN TON THEIR HEALTH PLANS UNTIL THEY TURN 26, NOT HAVING INSURANCE COMPANIES RESCIND PEOPLE'S PLANS FOR MINOR MISTAKES. AND FOR MEDICARE PATIENTS HAVING THEM-- OR.

>> Reporter: OR PREEXISTING CONDITIONS.

>> RIGHT-- WELL NO, NOT PREEXISTING CONDITIONS NOT YET. PREEXISTING CONDITIONS FOR CHILDREN. THEN FOR MEDICARE PATIENTS THEY GET A $250 CHECK IF THEY FALL INTO THAT NOT ORIOUS DOUGHNUT HOLE IF THEY SPEND TOO MUCH ON THEIR DRUGS. THIS COMING YEAR 2011 SOME MORE INCREMENTAL CHANGES. HEALTH INSURANCE COMPANIES WILL HAVE TO PAY A CERTAIN AMOUNT OF EACH DOLLAR, SPEND EACH DOLLAR ON MEDICAL SERVICES, 80 CENTSOR 85 CENTS OF EACH DOLLAR, IF THEY DON'T DO THAT THEY HAVE TO GIVE REBATES. THE REAL CHANGES DON'T START UNTIL 2014 AS WE SAW IN THE PIECE. THAT'S WHEN PEOPLE, INDIVIDUALS, UNINSURED ADULT WAS CHILDREN WILL BE ELIGIBLE FOR MEDICAID. THAT'S WHEN MOST PEOPLE WILL HAVE TO HAVE INSURANCE. THAT'S WHEN THE INSURANCE EXCHANGES WILL BEGIN. SO THAT'S ANOTHER THREE YEARS AWAY.

>> Reporter: SO THAT'S WHERE, IF THEY ARE GOING TO INSURANCE 26 TO 32 MILLION MORE PEOPLE, THAT IS WHERE THE BULK WILL COME IN.

>> THAT IS WHERE THE PUTTING OF THEM WILL COME IN. ALONG THE WAY WE'VE GOTTEN SOME PEOPLE COVERED.

>> Reporter: SO IF TODAY YOU ARE THE-- ONE OF THE CLASSIC KIND OF AMERICANS FOR WHOM THIS WAS DESIGNED. YOU ARE A WORKING PERSON, YOU MAY MAKE I DON'T KNOW 50 OR 60,000, BUT YOUR EMPLOYER DOESN'T OFFER HEALTH INSURANCE, YOU MIGHT EVEN BE MARRIED AND YOUR HUSBAND MAKES THE SAME AMOUNT AND THAT'S STILL NOT A LOT OF MONEY, ARE YOU STILL IN THE SAME FIX, YOU ARE STILL IN THE PRIVATE MARKET TRYING TO FIGURE IT OUT YOURSELF.

>> YOU PROBABLY ARE. THIS IS THIS HIGH RISK POOL FOR PEOPLE WHO HAVE-- DO HAVE A PE EXISTING CONDITION AND COULDN'T GET INSURANCE. SO THAT'S ONE SMALL PIECE. THOSE PEOPLE WERE ALLOWED TO GET INSURANCE THIS YEAR. BUT THE PEOPLE YOU WERE TALKING ABOUT, THEY'RE GOINGING TO HAVE TO WAIT UNTIL 2014.

>> Reporter: SO HOW MUCH AUTONOMY DO THE STATES HAVE IN THIS TIME PERIOD? IN OTHER WORDS, TO EITHER SLOW IT DOWN OR SPEED IT UP?

>> WELL, THE STATES HAVE QUITE A BIT OF AUTONOMY UNDER THIS LAW. AGAIN THEY'RE GOING TO BE ALLOWED TO BUILD THEIR OWN INSURANCE EXCHANGES. THEY'RE GOING TO DECIDE WHEN THEY WANT TO EXPAND MEDICAID. THEY HAVE TO DO IT BY 2014 BUT THEY CAN DO IT BETWEEN NOW AND 2014. THEY CAN RUN THE HIGH RISK POOLS OR LET THE FEDERAL GOVERNMENT DO IT. SO THEY CAN DO A LOT OF THINGS. IF THEY DON'T THEN THE FEDERAL GOVERNMENT COMES IN BEHIND THEM TO DO IT. SO THEY HAVE A CHOICE OF HOW THEY WANT TO DO IT BUT IF THEY DON'T THE FEDERAL GOVERNMENT WILL.

>> Reporter: MEANWHILE THERE ARE ALSO CHALLENGES NOW BROADLY IN THE COURTS AND IN CONGRESS. WHAT IS THE LANDSCAPE LOOK LIKE ON THOSE TWO FRONTS FOR 2011?

>> WELL, IN THE COURTS WE'VE HAD ABOUT 20 LAWSUITS FILED. A NUMBER HAVE BEEN DISMISSED OUTRIGHT BUT THE ONES THAT HAVE GONE TO THE MERITS, AS WE SAY, TO HAVE FOUND FOR THE ADMINISTRATION THAT THE LAW, OR AT LEAST THE PART OF THE LAW THAT REQUIRES MOST PEOPLE TO EITHER GET HEALTH INSURANCE OR PAY A PENALTY IS CONSTITUTIONAL, ONE, AS I THINK MANY PEOPLE HAVE HEARD, HAVE FOUND THAT INDIVIDUAL MANDATES BE UNCONSTITUTIONAL. THERE ARE MORE COMING DOWN. EVERYONE ASSUMES THIS WILL ULTIMATELY BE DECIDE BY THE SUPREME COURT THAT WILL TAKE ANOTHER YEAR OR TWO. MEANWHILE THE NEW REPUBLICAN HOUSE OF REPRESENTATIVES WILL TAKE A VOTE CERTAINLY ON REPEALING THE LAW THAT WILL PROBABLY BE APPROVED IN THE HOUSE BUT IT PROBABLY WON'T BE IN THE STILL DEMOCRATIC SENATE. WOULDN'T BE SIGNED IN ANY CASE BY PRESIDENT OBAMA. BUT THERE WILL BE EFFORTS OTHERWISE TO TRY TO DEFUND IT OR SLOW IT DOWN OR DO OTHER KINDS OF WAYS TO THWART THE LAW, THE IMPLEMENTATION.

>> MEANING THAT THE REPUBLICAN CONGRESS MIGHT MAKE IT DIFFICULT FOR THE ADMINISTRATION TO GET THE DOLLARS IT NEEDS TO HIRE THE PEOPLE TO WORK WON THIS?

>> THAT WOULD BE ONE WAY TO DO IT. THAT WOULD BE PROBABLY ONE OF THE MORE EFFECTIVE WAYS TO DO IT BECAUSE A LOT OF-- THEIR HANDS ARE TIED IN A LOT OF WAYS ABOUT HOW THEY CAN ACTUALLY SLOW THIS DOWN.

>> JULIE ROVNER OF NPR, THANKS SO MUCH.

>> YOU'RE WELCOME.

>> Brown: AND NOW TO RUSSIA, WHERE AN UNLIKELY FIGURE HAS BECOME A LIGHTING ROD FOR CONCERNS ABOUT POLITICAL REPRESSION AND THE RULE OF LAW.

>> Brown: MIKHAIL KHODORKOVSKY STOOD IN THE DEFENDANT'S LAST DRB CAGE AS A JUDGE CONVICTED HIM OF EMBED ELLING NEERINGLY $30 BILLION IN OIL OF THE COMPANY HE ONCE RAN. HIS LAWYER REACTED EVEN AS THE VERDICT WAS STILL BEING READ.

>> OF COURSE ONCE THE VERDICT IS FULLY ANNOUNCED WE ARE GOING TO APPEAL AGAINST IT. IRRESPECTIVELY OF THE SUBSTANTIVE PART INCLUDING THE SENTENCE WE ARE CONVINCED THE ACCUSATION IS FALSE. IT IS NOT A MISSION TAKE. IT IS A FAKE, A CRIME.

>> Brown: FOR KHODORKOVSKY IT WAS THE LATEST TWIST IN A SAGA THAT BEGAN IN THE 1990s. AFTER THE OLD SOVIET UNION COLLAPSED, HE TOOK OVER YUKOS RUSSIA'S LARGEST OIL COMPANY AND BECAME ONE OF THE COUNTRY'S NEW OLIGARCHES AND RUSSIA RICHEST MAN, HE ALSO BEGAN TO BRANCH INTO POLITICS FUNDING OPPOSITION CANDIDATES AND PUBLICLY ACCUSING THE KREMLIN OF CORRUPTION. IN 2003 KHODORKOVSKY WAS ARRESTED AND SENT TO A SIBERIAN PRISON FOR TAX EVASION. CRITICS INSIDE THE COUNTRY AND ABROAD CLAIMED AT REST WAS POLITICALLY MOTIVATED. BUT THEN PRESIDENT PUTIN SAID HE WAS CRACKING DOWN ON FRAUD, AND THE GOVERNMENT SEIZED THE OIL COMPANY. PUTIN IS NOW PRIME MINISTER, BUT STILL SEEN AS RUSSIA'S MOST POWERFUL FIGURE. EARLIER THIS MONTH HE COMPARED CODER SCOF SCOFF-- KHODORKOVSKY TO AMERICAN FINANCIER BERNARD MADDOFF.

>> A THIEF SHOULD CITY IN JAIL, IF YOU LOOK AT THE PRACTICE IN OTHER COUNTRIES BERNARD MADDOFF PUNISHMENT IN THE U.S. FOR A SIMILAR CRIME WAS 150 YEARS IN PRISON.

>> Brown: BUT ON CHRISTMAS EVE PUTIN'S CHOSEN SUCCESSOR PRESIDENT MEDVEDEV SEEMED TO PUSH BACK.

>> NEITHER THE PRESIDENT NOR ANY OTHER OFFICIAL PERSON IN THE SERVICE OF THE STATE HAS THE RIGHT TO EXPRESS HIS POSITION ON THIS CASE OR ON ANY OTHER CASE BEFORE THE MOMENT THE VERDICT IS ANNOUNCED.

>> Brown: TODAY PROTESTORS GATHERED OUTSIDE THE MOSCOW COURTHOUSE AND OPPOSITION LEADERS CHARGED PUTIN HAD INFLUENCED THE OUTCOME.

>> WHAT IS HAPPENING HERE HAS NO RELATION WHATSOEVER TO LAW, HUMANITY OR JUSTICE.

>> Reporter: KHODORKOVSKY HAD BEEN NEARING THE END OF HIS INITIAL JAIL TERM BUT THIS NEW CONVICTION COULD KEEP HIM BEHIND BARS UNTIL AT LEAST 2017. IN WASHINGTON TODAY IN WASHINGTON TODAY, WHITE HOUSE PRESS SECRETARY ROBERT GIBBS AND SECRETARY OF STATE HILLARY CLINTON JOINED CRITICS OF THE CONVICTION. THE WHITE HOUSE STATEMENT SAID THE FAILURE TO FOLLOW THE RULE OF LAW IMPEDES RUSSIAN TIES WITH THE U.S. FOR MORE ON ALL THIS, WE TURN TO TWO ANALYSTS, BOTH RUSSIAN NATIVES AND NOW AMERICAN CITIZENS. ANNA VASSILIEVA IS HEAD OF THE RUSSIAN STUDIES PROGRAM AT THE MONTEREY INSTITUTE OF INTERNATIONAL STUDIES. DIMITRI SIMES IS PRESIDENT OF THE NIXON CENTER, A FOREIGN POLICY RESEARCH ORGANIZATION. WELCOME TO BOTH OF YOU.

>> GOOD TO BE WITH YOU.

>> Brown: ANNA VASSILIEVA WHAT IS YOUR REACTION TO TODAY'S VERDICT?

>> WELL, I WASN'T SURPRISED. THE VERDICT, INDEED, WAS PRONOUNCED WHEN VLADIMIR PUTIN SAID TO THE WHOLE WORLD THAT THE THIEVE SHOULD BE IN PRISON. THAT WAS HIS DEFINITION WHAT WAS HAPPENINGING IN THE COURT AND IT WAS VERY DIFFICULT TO IMAGINE ANY OTHER OUTCOME, ANY OTHER VERDICT AFTER WHAT THE MOST POWERFUL MAN IN RUSSIA SAYS.

>> Brown: DEMITRI SIMES, AS I SAID KHODORKOVSKY WOULD SEEM AN UNLIKELY FIGURE FOR THIS KIND OF INTERNATIONAL HUMAN RIGHTS DEBATE HERE. EXPLAIN FOR OUR AUDIENCE A LITTLE BIT HOW HE CAME TO BE THAT. WHAT DOES HE REPRESENT?

>> WELL, HE STARTED AS A TYCOON. HE WAS A RUTHLESS TYCOON. HE TOOK A LOT OF PROPERTY, PAYING VERY LITTLE. AND ACTUALLY USING GOVERNMENT LOANS WHICH HE NEVER REPAID TO BECOME VERY WEALTHY. HE WAS POLITICALLY VERY AMBITIOUS. HE WAS NOT JUST SUPPORTING OPPOSITION PARTIES BUT HE WAS ENTERTAINING THE IDEA OF BECOMING PRIME MINISTER HIMSELF. OBTAINING PUTIN'S POWER. HAVING SAID THAT, ONCE HE WAS ARRESTED, HE PROVED TO BE A MAN OF COURAGE, DETERMINATION, EL CONSEQUENCE, THE GOVERNMENT WAS NOT ABLE TO BREAK HIM. AND WHEN HE WAS ARRESTED FIRST TIME IN 2003 I REALLY LIKED KHODORKOVSKY PERSONALLY AND I WAS SORRY FOR HIM. BUT POLITICALLY I HAD MIXED FEELINGS BECAUSE HE WAS THREATENING THE GOVERNMENT IN A VERY RUTHLESS WAY, USING THE MONEY HE GOT TO MOUNT A POLITICAL CHALLENGE. WHAT THEY ARE DOING TO HIM NOW IS TOTALLY BEYOND THE PEAL. IT IS NOT JUST SELECTIVE JUSTICE, IT'S REALLY NO JUSTICE AT ALL.

>> Brown: SO ANNA VASSILIEVA, WHAT DOES THIS TELL YOU THIS CASE TELL YOU ABOUT VLADIMIR PUTIN, ABOUT WHERE POWER SITS AND RESTS IN RUSSIA TODAY?

>> WELL, WHAT DOES IT TELL ME TELLS ALL OF US IS THAT THE POWER BELONGS TO SOMEONE WHO EXERCISES STRENGTH, NOT JUSTICE, NOT PARDON AS WE WERE HOPING UNTIL THE MOST RECENT-- PHRASE THAT PUTIN ANNOUNCED. WHAT WE SEE IS HISTORY REPEATINGING ITSELF. RUSSIAN RULERS ARE AFRAID TO MAKE COMPROMISES AND OBVIOUSLY ALLOWING KHODORKOVSKY TO BE FREE WOULD BE A COMPROMISE THAT NO ONE CAN AFFORD BECAUSE THEY KNOW THEY WILL LOSE THE TRUST. WE HAVE TO REMEMBER THAT THE TRUST OF THE POPULATION, WE HAVE TO REMEMBER THAT THE HIGHEST RATINGS PUTIN AND MED EF-- MED ED EF OBTAINED WERE IN 2008 DURING THE WAR WITH GEORGIA, AND THERE WAS NO CHANCE THAT THEY WOULD EXERCISE THE OPPORTUNITY TO COMPROMISE. THAT IS WHAT WE SEE NOW AND THAT IS-- UNFORTUNATELY, WE MAY SEE THIS TREND CONTINUING.

>> Brown: BUT SAYING-- STAYINGING WITH YOU, YOU MENTIONED PRESIDENT MEDVEDEV, HE HAS SPOKEN RECENTLY ABOUT TRYING TO CREATE MORE OF A CLIMATE FOR FOREIGN INVESTMENTS, FOR A LEGAL SYSTEM WHAT OF HIM IN ALL THIS?

>> AND THIS IS ALL, HE MEANS THIS, I'M SURE BUT HE ALSO UNDERSTANDS THAT HE CANNOT CROSS THE PATH OF THE POPULATION'S PREFERENCES. AND THE POPULATION STILL TRUSTS VLADIMIR PUTIN MORE THAN ANY OTHER POLITICIAN. THIS IS THE DATA FROM THE INTERPOL OF THIS DECEMBER. THE LATE DEC. SO PUTIN IS THE MOST TRUSTED POLITICIAN. PUTIN IS EXTREMELY POPULAR, 79% OF POPULARITY. AND THERE WAS, AGAIN, NO WAY THE PRESIDENT OF THE COUNTRY WOULD TRY TO CHANGE THAT OR TRY TO CAUSE PUTIN'S-- .

>> Brown: DEMITRI, THE STATEMENTS FROM U.S. OFFICIALS TODAY WERE QUITE STRONG, ACTUALLY, IN TERMS OF, WELL, THE SECRETARY CLINTON SAID THE CASE, QUOTE, RAISES SERIOUS QUESTIONS ABOUT SELECTIVE PROSECUTION. AND HAS A NEGATIVE IMPACT ON IMPROVING RUSSIA'S INVESTMENT CLIMATE. WHAT DOES THAT SAY TO YOU?

>> WELL, I THINK THAT THE STATEMENT, AS YOU SAID, STRONG BUT MEASURED. THERE IS NO QUESTION THAT THERE IS A CAPITAL OUTFLOW FROM RUSSIA. FOREIGN INVESTORS ARE LEAVING RUSSIA. MEDVEDEV'S PROMISES NOTWITHSTANDING. AND WHEN INVESTORS LOOK AT WHAT IS HAPPENINGING TO KHODORKOVSKY THEY ASK THEMSELVE REQUESTS WOULD THEY PUT THEIR MONEY IN A COUNTRY LIKE RUSSIA. WHY NOT IN BRAZIL, WHY NOT IN CHINA, WHETHER THAT ADMINISTRATION LIKES IT OR NOT, WHAT IS HAPPENING TO KHODORKOVSKY HAS IMPLICATIONS FOR THE U.S.-RUSSIAN RELATIONSHIP. LET ME MAKE ONE POINT ABOUT MEDVEDEV. I THINK IS CLEAR THAT PUTIN IS THE PROMINENT LEADER AND KHODORKOVSKY IS TREATED IS BECAUSE OF PUTIN. HAVING SAID THAT MEDVEDEV WANTS TO RUN IN 2012.

>> Brown: FOR A SECOND TERM.

>> FOR A SECOND TERM AND THE LAST THING HE WOULD WANT TO HAPPEN IN MY VIEW IS TO SEE MR. KHODORKOVSKY OUT OF PRISON AS A VICTIM, AS A HERO, AS A COURAGEOUS MAN OF MEANS WHO COULD CHALLENGE MR. MEDVEDEV. SO MEDVEDEV WANTS TO THROW MORE LENIENCY TO KHODORKOVSKY BUT HE DOES NOT WANT N MY VIEW, SEE KHODORKOVSKY OUT OF JAIL BEFORE NEXT PRESIDENTIAL ELECTIONS.

>> Brown: ANNA VASSILIEVA COMING TO YOU ON THE U.S. STATEMENTS, WOULD STATEMENTS, WHAT STRIKES YOU ABOUT THEM AND WOULD STATEMENTS LIKE THAT PROVOKE A BACKLASH FROM RUSSIA?

>> NO, THERE WILL BE NO BACKLASH BECAUSE EVERYONE IN RUSSIA KNOWS THAT THERE IS A SELECTIVE JUSTICE. EVERYONE IN RUSSIA KNOWS THAT THIS IS A POLITICAL-DRIVEN ACCUSATION AND VERDICT. BUT AT THE SAME TIME, WHEN RUSSIA EVER HAD FAIR JUDICIAL SYSTEM, YOU KNOW. ANYONE WHO READ-- BY TOLSTOY IN THE 19th CENTURY, EARL HE 20th CENTURY KNOWS ABOUT THAT, ABOUT THE COMPLETE LACK OF SKRUS 'TIS, ANYONE WHO READ-- KNOWS THAT THE 20th CENTURY NEVER BROUGHT FAIRNESS AND JUSTICE TO RUSSIAN PEOPLE. AND YOU KNOW, FROM THE '90s, NO ONE BOTHERED TO BE BUILDING OR REBUILDING THE JUSTICE SYSTEM SO WHY DID WE DECIDE ALL OF A SUDDEN THAT OVERNIGHT RUSSIA OR RUSSIAN PEOPLE WILL ENJOY AND IN FACT WILL KNOW, WILL HAVE A TASTE OF WHAT IT MEANS TO LIVE IN THE COUNTRY WHERE THE SYSTEM OF JUSTICE IS FAIR. AND IT IS BEING EXERCISED. THEY DON'T KNOW WHAT IT IS. ALL THEY KNOW IS THERE IS THIS STRONG POPULAR LEADER WHO FOUND THE RIGHT DISCOURSE OF COMMUNICATION WITH THE PEOPLE AND THERE IS THE OLIGARCH WHO DOES NOT CARRY MUCH RESPECT OR PITY AMONG THE PEOPLE. 2% OF THE RUSSIAN POPULATION WERE CLOSELY WATCHING THE COURT HEARING, 2% OF THE POPULATION.

>> Brown: WELL, DEMITRI SIMES, WE HAVE HEARD THE VERDICT HERE, WE HAVE NOT HEARD THE SENTENCE YET. IS THERE STILL SOME POSSIBILITY OF SOME KIND OF COMPROMISE OR SOME POTENTIAL LENIENCY?

>> I THINK SO. I THINK THAT IF THEY GIVE KHODORKOVSKY 14 YEARS AS PROSECUTORS HAVE ASKED, THAT WOULD BE A PERSONAL HUMILIATION FOR MEDVEDEV.

>> Brown: FOR THE PRESIDENT.

>> ABSOLUTELY. AFTER WHAT HE SAID ABOUT JUSTICE, ABOUT JUSTICE NOT BEING SELECTIVE, I THINK SOME LENIENCY IS NOT SHOWN TO KHODORKOVSKY MEDVEDEV WOULD REALLY BE POLITICALLY DIMINISHED IN RUSSIA. AND A AGREE THAT NOT MANY PEOPLE IN RUSSIA ARE WATCHING THE TRIAL. BUT THE POLITICAL A LET-- ELITE, THE INFLUENTIAL PEOPLE ARE WATCHING THE TRIAL VERY CAREFULLY. AND IF KHODORKOVSKY GETS WHAT THE GOVERNMENT HAVE ASKED IN TERMS OF SENTENCE, A LOT OF PEOPLE WOULD SAY WELL, MEDVEDEV IS A NICE BOY, HE TALKS BIG, BUT HE'S NOT FOR REAL.

>> Brown: ALL RIGHT, DEMITRI SIMES AND ANNA VASSILIEVA, THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> THANK YOU FOR HAVING US.

>> Warner: NEXT, THE FALLOUT FROM ONE OF THE YEAR'S MAJOR ECONOMIC STORIES, THE CONTINUING FORECLOSURE CRISIS. THIS WEEK, WE'LL AIR ENCORE REPORTS FROM NEWSHOUR ECONOMICS CORRESPONDENT, PAUL SOLMAN. TONIGHT, WINNERS AND LOSERS IN FLORIDA: THE PEOPLE WHO HAVE LOST THEIR HOMES, AND THE BUYERS WHO ARE SNAPPING THEM UP. THE STORY FIRST AIRED IN APRIL.

>> LET'S START LOADING THE BUS.

>> Reporter: THE FORE CLOSURES ARE US TOUR IN CAPE CARL ON SOUTHERN FLORIDA'S WEST COAST. GROUND ZERO OF THE STATE'S SPECTACULAR REAL ESTATE CRASH.

>> A LOT OF YOU THAT STUDIED IN SCHOOL PROBABLY KNOW THIS IS SOMETHING LIKE A BELL CURVE. DECEMBER OF '05 UP HERE, WE HIT 322,000 DOLLARS IS THE AVERAGE MEDIAN SALES PRICE. SINCE DECEMBER '05 IT CAME STRAIGHT DOWN, FOR THE ENTIRE LAST YEAR, WE'VE BEEN HOVERING AT A LEVELING OFF OF BETWEEN 85 AND 90,000 DOLLARS. OVER THE ENTIRE LAST YEAR.

>> Reporter: MARK JOSEPH IS THE SALESMAN IN CHARGE. THE PASSENGERS, SOON TO BE RETIREES AND INVESTORS LOOKING FOR A BARGAIN.

>> THIS IS IN THE SOUTHWEST SECTION OF CAPE CORAL. AND I WILL TELL YOU ALL ABOUT IT WHEN WE GET IN THE HOUSE. PLEASE WATCH YOUR STEP EXITING.

>> Reporter: FIRST HOUSE ON THE GULF OF MEXICO BUILT IN 2006 SOLD WITHIN MONTHS FOR $491,000.

>> IT'S BACK ON THE MARKET FOR 261,000, THAT'S 53 CENTS ON THE LAST MORTGAGE PRICE. FEEL FREE TO WALK AROUND.

>> Reporter: FREE THEY FELT, WALK AROUND THEY DID. AND ENGLISH INVESTOR LOUIS JAMES, AT LEAST, LIKED WHAT HE SAW AT A DISCOUNT OF NEARLY 50%.

>> THIS LOOKS A LOT BETTER CONDITION THAN A LOT OF THE PLACES I'VE SEEN.

>> HOW MANY PLACE DOES YOU HAVE IN ENGLAND.

>> MID 20s. I'M LOOKING TO BUY SOMEPLACES OVER HERE NOW BECAUSE IT'S BETTER WEATHER AND I THINK THERE'S A LOT OF OPPORTUNITY.

>> Reporter: SO IF YOU ARE QUESTIONING IF IT'S THE RIGHT TIME TO BUY, IT IS DEFINITELY THE RIGHT TIME TO BUY. YOU NEED TO LOOK AT THE NUMBERS, LOOK AT THE STATS AND FOR THOSE OF YOU THAT LIKE NUMBERS, NUMBERS DON'T LIE, PROOF IS RIGHT HERE. FRONT PAGE OF THE REAL ESTATE SECTION. RENTAL MARKET RED HOT, GUYS. I'M NOT MAKING THIS STUFF UP. CURRENT YOUR HOUSE OUT.

>> Reporter: ON TOUR, IT'S EASY TO FORGET THE GRIM REALITY, HOWEVER. BEHIND MANY A BARGAIN, A BACK STORY OF DESPAIR. JASON WELSH IS A GOLF PRO ORIGINALLY FROM PENNSYLVANIA.

>> IT'S THE LIVING AREA HERE, YOU GOT THE GREAT ROOM SET UP WITH THE DINING ROOM, KITCHEN.

>> Reporter: WELSH BOUGHT THIS HOUSE TEN YEARS AGO FOR A LITTLE OVER $100,000.

>> TWO KIDS LIVE IN THIS ROOM.

>> TWO KIDS IN THIS ROOM.

>> THIS IS SOMEWHAT OF A DISTRESSED PROPERTY T WASN'T PERFECT, IT NEEDED A LITTLE TLC.

>> Reporter: AND NEEDED MORE THAN A LITTLE FIXER-UPPER REFINANCING.

>> YOU SEE, WE PUT IN, THEY CALL IT RACHET, A TYPE OF ALMOST MARBLE STONE.

>> Reporter: FIVE YEARS AGO HIS EQUITY IN THE HOME UP SEVERAL HUNDRED THOUSAND DOLLARS, WELSH PUT IN THE POOL.

>> IT'S BEEN AN UTTER JOY T WAS A MAJOR UNDERTAKING.

>> Reporter: COST.

>> RIGHT AROUND $42,000 FOR THE POOL AND THE CAGE.

>> Reporter: PUSHING THE TOTAL MORTGAGE TO $240,000. SOON AFTER, THE CAPE CARL MARKET BEGAN TO SINK LIKE A STONE.

>> AND HOW MUCH YOU CAN GET FOR THE HOUSE AT THIS POINT.

>> THE COMPARABLES, $100, MAYBE $120 AT MOST, YOU KNOW.

>> Reporter: THE COMPARABLES BEING --

>> THIS ONE HERE SOLD A LITTLE LESS THAN A YEAR AGO FOR ABOUT $55,000. THAT ONE SOLD MAYBE EIGHT MONTHS AGO FOR AROUND 104. AND THE ONE RIGHT HERE IN FRONT OF US, IS EMPTY. THERE'S NOBODY IN THERE.

>> Reporter: WELSH SAYS HE STOPPED MAKING PAYMENTS MONTHS AGO AND HAS TRIED TO RENEGOTIATE HIS MORTGAGE OFFERING $150,000. THE BANK SAID NO. INSTEAD, THE HOUSE WILL SELL TO SOMEONE ELSE. VIA FORECLOSURE OR SHORT SALE WHICH WON'T HURT WELSH'S CREDIT AS MUCH BUT THE PRICE WILL BE FAR LESS THAN WELSH IS OFFERING.

>> I CALL. I TRY AND GET HELP. THEY JUST SAY I DON'T QUALIFY. AND THEY ARE WILLING TO SELL IT TO SOMEBODY ELSE FOR $100,000 OUT THERE UNDERNEATH ME.

>> DISTRESSED SELLERS BOTTOM-FISHING BUYERS, WITH FEDERAL SUBSIDIES NO LESS. FOR PROPERTIES NOW OWNED BY GOVERNMENT AGENCIES LIKE FANNIE MAE.

>> THAT PARTICULAR HOME BECAUSE IT'S FANNIE MAE, IF YOU WERE TO BUY SOMETHING RIGHT NOW, YOU ARE ACTUALLY ABLE TO ASK FOR UP TO 3.5% CONCESSIONS AND THAT CAN BE FOR APPLIANCES, THAT CAN BE FORECLOSING COSTS, AND THAT'S ALSO AN INCENTIVE IN ADDITION TO THIS $8,000 TAX CREDIT.

>> Reporter: JOSEPH SAYS THE OTHER PLUS OF FANNIE MAE AND FREDDIE MAC WHICH HAVE TAKEN OVER SO MANY OF THESE HOMES BECAUSE THEY INSURED THE MORTGAGES, IS THEIR RECORD OF UPKEEP.

>> THIS PARTICULAR ONE IS OWNED BY FREDDIE MAC. THEY WANT THEIR POOLS BLUE. THEY WANT THE POWER ON AND THEY WANT THE UTILITIES ON. 85 TO 90% OF THE OTHER LENDERS, THEY JUST WANT TO CHURN AND BURN, THEY DON'T CARE ABOUT THE GREEN POOLS. IF IT IS A GOVERNMENT-OWNED PROPERTY THEY WOULD LIKE TO SEE NEW CARPET IN THE HOUSE THEY WOULD LIKE TO SEE THE HOUSE PAINTED BECAUSE WE'RE TARGETED OWNER OCCUPANTS.

>> Reporter: CRAIG AND LINDA HAIL FROM ILLINOIS.

>> WE'RE GOINGING TO RETIRE IN TWO YEARS AND WE'RE LOOKING FOR SOMETHING TO COME HERE PART-TIME.

>> Reporter: SNOWBIRDS.

>> SNOWBIRDS.

>> YUP. ARE WE OLD ENOUGH TO BE SNOWBIRDS.

>> WE ARE.

>> OKAY.

>> Reporter: BILL BUSBY IS FROM MY NECK OF THE NORTHEAST, BOSTON.

>> I WANT TO BUY A HOME FOR MYSELF AND I THINK CAPE CORAL HAS A LOT OF GOOD DEALS AND THAT'S WHY I'M ON THE TOUR TODAY.

>> Reporter: MIGHT YOU MAKE AN OFFER ON ONE WFT THREE WE'VE SEEN SO FAR.

>> IT'S QUITE POSSIBLE. I'M READY TO GO.

>> Reporter: READY TO GO MEANS SOMETHING QUITE DIFFERENT TO JUAN, HOWEVER. BACK ON THE FLIP SIDE OF THE FORECLOSURE STORY, THE DOWNSIDE OF MARK JOSEPH'S JOB.

>> JUAN, FIRST CONCERN I HAVE ON THE WALL RIGHT HERE F I DON'T TAKE THIS OFF THE WALL IT'S GOING TO GET THROWN AWAY, IT IS SOMETHING YOU NEED I NEED TO YOU TAKE IT NOW.

>> JUAN-- .

>> Reporter: LAURA FROM JOSEPH'S OFFICE WAS HERE TO TRANSLATE. MESA BOUGHT THE HOME IN 2002. MORTGAGED FOR TO $80,000, IT'S WORTH NO MORE THAN $20,000 TODAY. MESA CAN NO LONGER AFFORD THE PAYMENTS SO HE'S GIVING UP THE HOUSE.

>> THANK YOU.

>> THANK YOU VERY MUCH.

>> FOR A 1500 DOLLAR RELOCATION FEE.

>> IMPORTANT THAT HE FINISHES THE REST OF THE BACKYARD. THIS IS THE PART OF THE JOB THAT'S TOUGH. IT'S VERY TUCHLT THE END RESULT IS A MAN JUST LOST HIS HOUSE AFTER 7 OR 8 YEARS OF PAYING AND SOMEBODY NEW WILL COME IN AND PAY 20 OR 30,000 FOR IT, WHEN HE MIGHT HAVE STAYED IF THEY WOULD HAVE OFFERED HIM THAT DEAL.

>> Reporter: INSTEAD, MESA WILL NOW BE RENTING A ROOM.

>> HE'S PAYING $300 A MONTH.

>> WOULD THAT COVER A $20,000 PURCHASE.

>> YES, IT WOULD, ABSOLUTELY.

>> Reporter: WHILE MESA ROUNDED UP HIS LAST POSSESSIONS, WE ASKED LAURA HOW SHE FELT.

>> IT'S KIND OF INTIMIDATING AND SCARY THAT SOMEONE WOULD JUST OFFER YOU 1500 TO GET OUT OF YOUR HOUSE, YOUR HOME. IT HITS HOME.

>> Reporter: IT HITS HOME BECAUSE NEGRON'S OWN MORTGAGE IS SOME $150,000 UNDERWATER AND SHE'S IN DEFAULT. HASN'T MADE A PAYMENT SINCE JUNE.

>> MY HUSBAND WAS OUT OF WORK FOR EIGHT MONTHS AND I WAS THE ONLY ONE BRINGING HOME INCOME. AND USING THE CREDIT CARDS TO BASICALLY LIVE AND TRY TO MAKE OUR MORTGAGE PAYMENT, WE JUST GO DEEPER AND DEEPER INTO DEBT. WHEN WE CALLED TO GET HELP, THEY TOLD THAWS WE WERE PROBABLY-- TO GET THIS REMODIFICATION FOR A LOAN. THAT WAS NOT THE CASE.

>> Reporter: DOW FEEL BAD NOT MAKING THE PAYMENT.

>> ABSOLUTELY. I CRIED EVERY NIGHT. HOW YOU CAN I NOT PAY THESE PEOPLE BACK. THIS IS MY HOME. AND IT'S HARD.

>> Reporter: BUT FINALLY YOU HAD NO CHOICE.

>> NOPE. IT'S BEEN HARD.

>> Reporter: WE'RE NOT USED TO DOING INTERVIEWS THAT BRING TEARS BUT GIVEN THE FRUSTRATION OF THE FORECLOSURE CRISIS IN FLORIDA, THERE WAS NO AVOIDING THEM.

>> IT'S JUST UPSETTING, YOU KNOW, THERE IS SUPPOSED TO BE HELP OUT THERE AND THERE IS NONE. OBAMA SAYS HE IS GOING TO HELP, AND DOING ALL THIS STUFF THERE IS NO HELP. NO MONEY IS GETTING TO THE AVERAGE PERSON. WHO HAS CREDIT HISTORY FOR TEN YEARS 6 PAYING ON A MORTGAGE AND YOU DON'T QUALIFY? I DON'T UNDERSTAND IT.

>> Reporter: THE ADMINISTRATION ANNOUNCED A NEW PLAN TO HELP UNDERWATER HOMEOWNERS. ENCOURAGING THOSE WHO HOLD THEIR MORTGAGES TO WRITE DOWN THE PRINCIPAL DUE.

>> IT'S GOING TO BE THE LAST TIME WE'RE GOING TO SEE THREE BEDROOM TWO BATH-- .

>> Reporter: MEANWHILE, THE TOURS GO ON.

>> IT IS LISTED FOR $76,900 DOLLARS MAKING IT 38 CENTS ON THE LAST SALES PRICE.

>> THIS HAS BEEN ON THE MARKET ONE DAY. THIS HOUSE WILL GO FAST.

>> Reporter: TO AN INVESTOR, PERHAPS, OR A SAVVY SNOWBIRD BUT NOT FOR THE PERSON WHO PAID $204,500 IN 2005 AND USED TO CALL IT HOME.

>> COME

>> Warner: COMING UP LATER THIS WEEK, PAUL LOOKS AT THE FEDERAL PROGRAM TO HELP HOMEOWNERS MODIFY THEIR MORTGAGES AND STAY IN THEIR HOMES.

>> Brown: FINALLY TONIGHT, HOW SOME WEB SITES FOLLOW WHAT YOU DO ONLINE, AND A GOVERNMENT RESPONSE TO GROWING CONCERNS. RAY SUAREZ HAS OUR STORY.

>> Suarez: FOR MOST AMERICANS BROWSING, SHOPPING AND MESSAGING ON-LINE HAVE ALL BECOME PART OF THE FABRIC OF DAILY LIFE BUT ONE MAJOR CONCERN HAS GARNERED NEW ATTENTION OVER THE PAST YEAR, THE WAY WEB SITES AND ADVERTISERS ARE REGULARLY TRACKING AND EVEN SELLING INFORMATION ABOUT THE HABITS AND INTERESTS OF CONSUMERS. SOMETIMES WITHOUT THEIR KNOWLEDGE OR UNDERSTANDING. NOW THE GOVERNMENT WANTS TO PUSH FOR MORE DISCLOSURE ABOUT PERSONAL PRIVACY AND TRACKING PRACTICES. THE COMMERCE DEPARTMENT WANTS TO ESTABLISH A NEW WATCHDOG MONITORING WEB PRIVACY AND THE FEDERAL TRADE COMMISSION EARLIER THIS MONTH PROPOSED THE CREATION OF A SO-CALLED DO NOT TRACK OPTION FOR WEB USERS. THAT WOULD ALLOW INDIVIDUALS TO CLICK A BUTTON ON THEIR WEB BROWSE SO THEY COULD NOT BE TRACKED BY SPECIFIC WEB SITES. THE FTC PROPOSAL IS CALLED UNWORKABLE BY THE ON-LINE ADVERTISING STRIING. WE LOOK AT THESE PRACTICES AND HOW THE PROPOSAL WOULD WORK WITH THE CHAIRMAN OF THE FEDERAL TRADE COMMISSION AND THE GENERAL COUNSEL OF THE INTERACTIVE ADVERTISING BUREAU WHICH REPRESENTS ON-LINE COMPANIES THAT SELL TO TYLERS INCLUDING WEB SITES LIKE GOOGLE, YAHOO! AND FACIALBOOK. AND MR. CHAIRMAN, WHAT IS A SURFING COMPUTER TELLING THE SITE IT VISITS? IN OTHER WORDS, WHAT DO WEB SITES AND INTERNET SERVICE PROVIDERS KNOW ABOUT YOUR WEB HABITS?

>> THAT'S A GREAT QUESTION. AND ONE WAY TO SORT OF THINK ABOUT THIS IS IMAGINE ARE YOU IN A MALL. AND THERE'S A GUY BEHIND YOU AND HE'S SORT OF FOLLOWING YOU A FEW PETE FEET BEHIND. HE DOESN'T KNOW YOUR NAME BUT HE SORT OF KNOWS WHERE YOU LIVE AND WHAT KIND OF CREDIT CARD YOU ARE USING AND WHAT YOU ARE INTERESTED IN BUYING. AND HE'S SENDING SORT OF E-MAILS OFF OR CALLING PEOPLE IN FRONT OF YOU AND SAYING HERE IS WHAT WHAT HE IS INTERESTED IN. AND PEOPLE ARE COMING OUT FROM STORES AND ASKING, AND ASKING WHETHER YOU WANT TO BUY, YOU KNOW, A PARTICULAR ITEM. THAT'S SORT OF WHAT GOES ON WITH WEB TRACKING TODAY. WHERE A THIRD PARTY COOKIES SORT OF FOLLOW CONSUMERS AROUND, SURREPTITIOUSLY ON THE INTERNET TO DELIVER TARGETED ADS. NOW WHAT WE HAVE CALLED FOR IS THE ABILITY OF CONSUMERS TO BE ABLE TO OPT OUT OF THAT KIND OF THIRD PARTY COOKIE TRACKING.

>> Suarez: SO WOULD CONSENT BE GIVEN, WHEN IT'S GIVEN, OVERALL, ANY TIME YOU VISIT A WEB SITE, ANY TIME YOU LOG ON. HOW OFTEN WOULD HAVE YOU TO GIVE THIS PERMISSION.

>> THE WAY WE THINK IT WOULD WORK BEST IS THROUGH INTERNET BROWSERS. AND IN FACT WE'RE VERY HEARTENED AFTER WE RELEASED THE REPORT, MICROSOFT AND MOZILLA THE TWO LARGEST BROWSERS OF BROWSERS, MOZILLA RUNS FIREFOX SAID THEY WOULD COME OUT WITH A DO NOT TRACK MECHANISM IN THE BROWSE TORE USE THE BROWSE TORE OPT OUT OF TRACKING. I MIGHT NOT OPT OUT OF TRACKING. I LIKE TARGETED ADVERTISEMENTS BUT CONSUMERS OUGHT TO HAVE A CHOICE.

>> Suarez: MIKE, WHERE DOES YOUR ASSOCIATION COME DOWN ON THAT PROPOSAL?

>> WELL, THERE'S NO QUESTION THAT AS AN INDUSTRY WE AGREE THAT WE FWHEED TO INCREASE CONSUMER TRANSPARENCY ABOUT WHAT DATA COLLECTION PRACTICES ARE ONGOING ON THE INTERNET. WE ALSO WANT TO PROVIDE CONSUMERS WITH THAT CHOICE AND EASY TO USE, REALLY. ONE CLICK IF THEY WANT TO OPT OUT OF THE STATE COLLECTION AND USE THEY SHOULD HAVE THAT ABILITY TO DO THAT. THERE ARE SOME OPTIONS TODAY, BOTH THROUGH INDUSTRY SELF-REGULATORY WEB SITES THAT ALLOW THEM EASILY TO DO THAT. BUT ALSO THROUGH THEIR BROWSER CONTROLS BY FILTERING OUT COOKIES WHETHER THEY ARE FIRST PARTY OR THIRD PARTY COOKIES. SOMETIMES SOME PROPOSALS CAN BE A LITTLE HEAVY-HANDED, WE SAY, THINGS LIKE THE INTERNET EXPLORER OPTION WHICH IS A PROPOSED TOOL FOR CONSUMERS, IT'S NOT A DO NOT TRACK MECHANISM BUT IT'S ACTUALLY A BLOCKING TOOL. AND WHAT THAT MEANS IS IT BLOCKS CONTENT FROM THIRD PARTIES. AND THAT CAN BE THIRD PARTY NEWS CONTENT IT COULD BE PERHAPS EVEN INFORMATION AND WEB SITE NEEDS TO RUN THEIR WEB SITE. IT'S NOT JUST ABOUT ADVERTISING.

>> Suarez: WELL WHACK WOULD CHANGE IF MR. LEEB WIST'S PROPOSAL BECAME THE RULES OF THE ROAD WHAT WOULD CHANGE ABOUT THE USER EXPERIENCE IN THE VIEW OF YOUR INDUSTRY?

>> FRANKLY, AS FAR AS EXERCISING CHOICE, NOT A WHOLE LOT. AS I SAID THERE ARE A NUMBER OF TOOLS OUT THERE THAT CONSUMERS CAN UTILIZE. THEY ARE EMPOWERED IF THEY WANT TO OPT OUT OF THE SYSTEM TODAY. WE AS AN INDUSTRY NEED TO DO A LITTLE BETTER AROUND PROVIDING REALTIME EASILY, DISCOVERABLE NOTICE, SO THEN CONSUMERS UNDERSTAND HOW INFORMATION IS BEING USED AND EASILY CAN OPT OUT IF THEY WANT TO. SO THE CONSUMER EXPERIENCE WOULD NOT BE THAT DIFFERENT TODAY BECAUSE THE INDUSTRY AGREES WITH THE HIGH LEVEL PRINCIPLESES. I THINK WHAT WE WANT TO AVOID AND WHAT WE HAVEN'T TALKED A LOT ABOUT IS THE ECONOMIC VALUE THAT ON-LINE ADVERTISING AND IN PARTICULAR RELEVANT ADVERTISING THROUGH TARGETED MESSAGING REALLY PROVIDES TO CONSUMERS. BECAUSE THERE IS NO SUCH THING AS FREE CONTENT OR SERVICES. THERE'S ONLY CONTENT AND SERVICES THAT ARE FREELY AVAILABLE TO CONSUMERS BECAUSE THEY ARE PAID FOR BY ADVERTISING.

>> Suarez: THEY ARE DOING IT ALREADY, THEY SAY, SELF-REGULATION IS ADEQUATE TO THE TASK.

>> WELL, I WOULD SAY THAT I THINK MR. ZANAS IS PUSHING HIS ORGANIZATION IN THE RIGHT DIRECTION AND I WANT TO COMMEND HIM FOR THAT BUT WE DO THINK THAT THE SORT OF OPT OUT REGIMES ARE VERY CUMBERSOME RIGHT NOW. I DON'T THINK WOULD YOU DISAGREE WITH ME. NOT EF COMPANY OFFERS AN OPT OUT AND TO HAVE CONSUMER GOES TO EACH SITE THAT THEY DON'T WANT TO BE TRACKED BY AND CLICK A BUTTON IS A VERY, VERY HARD THING TO DO. WE WOULD LIKE TO SEE, AND AGAIN WE'VE BEEN VERY HEARTENED BY THIS. WE WOULD LIKE TO SEE THE BROWSER COMMUNITY DO THIS VOLUNTARILY. THEY SEEM TO BE STEPPING UP TO THE PLATE. WHAT WE'VE HEARD PRIVATELY FROM ADVERTISERS IS THEY ARE VERY SUPPORTIVE OF PUTTING MORE RESTRICTIONS OR ALLOWING CONSUMERS THE CHOICE OF WHETHER TO BE FOLLOWED BY THIRD PARTY ADVERTISERS.

>> Suarez: RIGHT NOW IF YOU GO TO THE CHOICES, ROW OF CHOICES ON THE TOP OF YOUR NAVIGATING PROGRAMMING, CAN YOU DISABLE THAT FUNCTION YOURSELF OR IS THAT SOMETHING THAT IS REALLY HARD TO DO.

>> I THINK IF YOU LOOK HARD ENOUGH, SOME COMPANIES WILL GIVE YOU THE OPTION OF DOING THAT, SO FOR EXAMPLE GOOGLE'S CHROME BROWSER ALLOWS TO YOU TRAVEL INCOG NITTO IT IS HARD TO FIND THAT INCOG KNIT OWE MECHANISM AND WHAT WE WOULD LIKE TO DO IS SEE THAT IT IS CLEAR TORE CONSUMERS SO THAT AGAIN, THEY CAN OPT OUT OF THIRD PARTY TRACKING. BECAUSE PEOPLE OUGHT TO KNOW, PEOPLE OUGHT TO HAVE A CHOICE ABOUT WHERE THEIR INFORMATION IS GOING. YOU KNOW, IT'S DIFFERENT BETWEEN, IF YOU GO ON A SITE LIKE AMAZON, YOU HAVE A FIRST PARTY RELATIONSHIP WITH THAT SITE. YOU DON'T MIND IF THEY COLLECT YOUR INFORMATION AND GIVE YOU, TELL YOU WHAT BOOKS MIGHT BE RELEVANT BASED ON WHAT YOU PURCHASED BEFORE. BUT WHEN IT COMES TO COMPANIES SORT OF SURREPTITIOUSLY COLLECTING INFORMATION ABOUT YOU AND POSSIBLY SELLING IT TO OTHER COMPANIES, YOU OUGHT TO BE ABLE TO MAKE A CHOICE TO BE ABLE TO OPT OUT FROM THAT.

>> THIS INFORMATION HAS VALUE AS MR. LEIBOWICZ IMPLIED. IF I GIVE IT TO YOU F I TELL WHERE YOU I AM COMING FROM OR WHERE I AM GOING TO, BECAUSE MY COMPUTER HAS A THUMB PRINT, SHOULDN'T I GET SOMETHING FOR THAT, FROM YOUR MEMBERS. HERE RAY SUAREZ, HERE SAY COUPON, HERE IS SOMETHING TO RECOGNIZE THAT YOU HAVE JUST GIVEN ME SOMETHING OF VALUE?

>> I THINK THAT'S RIGHT. I THINK WHAT YOU ARE POINTINGING TO IS THE VALUE EXCHANGE, RAY. AND WHAT HAPPENS TODAY TECHNICALLY IS AS YOU GO FROM ONE WEB SITE TO ANOTHER TO ANOTHER ON THE INTERNET, THIS SITE HAS TO THROUGH WHAT IS CALLED A REFER, KNOW WHERE YOU HAVE COME FROM AND WHERE YOU ARE GOING. THAT TECHNICALLY IS THIRD PARTY TRACKING. WE DON'T WANT TO SHUT THAT OFF. I DON'T THINK THAT'S WHAT THE CHAIRMAN IS TALKING ABOUT. AND SO WHAT WE WANT TO DO IS GIVE AROUND BEHAVIORAL ADVERTISING, THAT RELEVANT AD. WE DO WANT TO EMPOWER CONSUMERS TO OPT OUT OF THAT. BECAUSE WHAT WE KNOW IS THAT THE INDUSTRY IS REALLY DEPENDENT UPON SENDING REGULAR VANT MESSAGES AT THE RIGHT TIME. WE KNOW AT THE IEB WE CONDUCTED A SURVEY EARLIER THIS YEAR AND DEMONSTRATED GREATER THAN 80% OF THE ON-LINE AD SPEND WOULD BE EFFECTIVE-- EFFECTED UNDER THE FTC'S DEFINITION. I'M NOT SAYING NEGATIVELY EFFECTED BECAUSE WE DON'T KNOW EXACTLY WHAT DO NOT TRACK MAY MEAN. BUT WE ALSO KNOW THAT TARGETED ADS ARE TWO AND A HALF TIMES MORE EFFECTIVE AND WORTH THAT MUCH MORE REVENUE TO THE PUBLISHERS AND TO THE MARKETERS THAN NONTARGETED ADS WHICH REALLY ARE JUST SPAM.

>> Suarez: WELL, HE'S BRINGINGING UP SOMETHING THAT WOULD THREATEN, WELL, THE VALUE OF COMMERCE. DO YOU HAVE TO TREAD CAREFULLY HERE?

>> I THINK DOW HAVE TOO TREAD CAREFULLY BUT I ALSO THINK THAT THE NOTION THAT THE SKY IS GOING TO BE FALLING DOWN IF CONSUMERS ARE ALLOWED TO OPT OUT OF TARGETED ADS, AND YOU HAVEN'T SAID IT BUT OTHERS HAVE, IS SOMEWHAT EXAGGERATED. SO FOR EXAMPLE IN 2003 BEFORE I CAME TO THE COMMISSION BUT WHEN WE PASSED THE RULE REQUIRING DO NOT CALL, ALLOWING PEOPLE TO JOIN THE DO NOT CALL REGISTRY, PEOPLE SAID AND OT UPON ENT SAID THAT THIS WOULD BE THE END OF COMMERCE AS WE KNOW IT. AND OF COURSE IT TURNED OUT TO BE ONE OF THE BEST PROGRAMS FOR PROTECTING MANAGERS' DINNER HOURS AND GIVING PEACE AND QUIET AT HOME. THE HUMOROUS DAVE BARRY CALLED IT THE MOST EFFECTIVE GOVERNMENT PROGRAM SINCE THE ELVIS STAMP. AND RIGHT BEFORE WE ISSUED THIS REPORT, A VERY RESPECTED WASHINGTON LOBBYIST CALLED ME UP. AND HE SAID IF YOU ISSUED THIS REPORT AND YOU EVEN CALL FOR A DO NOT TRACK MECHANISM T WILL BE THE END OF THE CHRISTMAS SEASON. YOU KNOW THERE WILL BE, YOU KNOW, INTERNET PURCHASES WILL GO DOWN ENORMOUSLY BECAUSE AMERICANS WILL BE AFRAID TO USE BUY GOODS ON-LINE IT TURNS OUT THIS HAS BEEN ONE OF THE BEST CHRISTMAS SEASONS IN RECENT YEARS. AND I THINK THAT THERE IS A WAY TO ALLOW TARGETED MARKETINGING FOR THOSE PEOPLE WHO WANT IT. AND ALSO ALLOW PEOPLE TO OPT OUT FOR THOSE PEOPLE WITHOUT WANT THAT. AND DON'T WANT TARGETED ADS.

>> AND I WASN'T THAT LOBBYIST.

>> YOU WERE NOT THE LOBBYIST, THAT IS EXACTLY RIGHT.

>> BUT I THINK THE CHAIRMAN MAKES A GREAT POINT WHICH IS THAT WE DO HAVE TO BE CAREFUL. BECAUSE WE ARE COMING AUGUST OF A FANTASTIC CHRISTMAS SHOPPING SEASON. AND THE ON-LINE AD INDUSTRY IS ABOUT TO FINISH UP ITS BEST YEAR EVER. AND SO THERE'S NOT A FAILURE OF MARKETPLACE. WHAT WE NEED TO DO IS UNDERSTAND THAT CONSUMERS CARE ABOUT PRIVACY. AND WE NEED TO BE PROACTIVELY. WE HAVE DONE THIS AS AN INDUSTRY THROUGH THE GUIDANCE OF THE FTC'S OWN PRIVACY PRINCIPLESES. WE NEED TO BE RESPONSIVE AND TO CONTINUE TO PUSHOUT SOLUTIONS.

>> Suarez: GENTLEMEN, THANK YOU BOTH.

>> THANK YOU.

>> THANK YOU.

>> AGAIN THE MAJOR DEVELOPMENTS OF THE DAY

>> Warner: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. THE BLIZZARD THAT BATTERED THE EAST COAST LEFT TRAVEL SCHEDULES IN TATTERS AFTER 5,000 FLIGHTS WERE CANCELED. AND A RUSSIAN COURT CONVICTED JAILED OIL TYCOON MIKHAIL KHODORKOVSKY ON NEW CHARGES OF THEFT AND MONEY LAUNDERING. AND TO HARI SREENIVASAN IN OUR NEWSROOM, FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI?

>> Sreenivasan: WE FOLLOW UP ON INTERNET PRIVACY WITH STEP-BY- STEP INSTRUCTIONS FOR UPDATING YOUR OLDER FACEBOOK APPS. FIND OUT WHAT'S HAPPENED TO THE FLORIDA BORROWERS WHO DEFAULTED ON THEIR MORTGAGES ON PURPOSE, AND CAST YOUR VOTE ON WHETHER BANKS SHOULD ADJUST LOANS OR HOMEOWNERS SHOULD PAY UP. PLUS, WATCH A SLIDESHOW OF IMAGES FROM SOUTHERN SUDAN JUST BEFORE THE NATION'S VOTE ON INDEPENDENCE. THAT'S A PREVIEW OF SPECIAL CORRESPONDENT JEFFREY KAYE'S REPORT. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org MARGARET?

>> Warner: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON TUESDAY, WE'LL HAVE THE FIRST OF THREE INTERVIEWS WITH OUTGOING MEMBERS OF CONGRESS. TOMORROW: VIRGINIA FRESHMAN DEMOCRAT TOM PERRIELLO. I'M MARGARET WARNER.

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>> AND WE DEPEND ON THEM.

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