captioning sponsored by macneil/lehrer productions >> woodruff: battling over budget issues took center stage on capitol hill today, with lawmakers fighting over how to avoid a federal government shutdown and a debt-limit crisis. >> ifill: plus, pope francis declared the catholic church's moral authority could fall like a house of cards, if it doesn't stop obsessing about issues like abortion and homosexuality. >> woodruff: and hari sreenivasan reports on a california town's unique plan to stem the damage from the housing downturn, by taking control of underwater mortgages.

>> the city may invoke eminent domain, seizing the loans, and then working with owners to try to refinance their homes at today's lower price. >> woodruff: good evening. i'm judy woodruff. >> ifill: and i'm gwen ifill. those are just some of the stories we're covering on tonight's "pbs newshour." >> major funding for the pbs newshour has been provided by: ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial

literacy in the 21st century. >> and with the ongoing support of these institutions and foundations. and... >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> ifill: our lead story tonight: republicans and democrats were locked in a standoff over the president's health care law and federal spending. the test of wills played out, with just eleven days until a potential government shutdown. >> we'll deliver a big victory in the house tomorrow, then the fight will move over to the senate, where it belongs. >> in case there's any shred of doubt in the minds of our house counterparts, i want to be absolutely crystal clear: any bill that defunds obamacare is

dead. dead. >> ifill: on capitol hill today, neither side ready to blink. the president is digging his heels in too, vowing to veto any attempt to eliminate funding for the health care law. but house republicans plan to try to kill obamacare tomorrow anyway, as part of a spending bill that would keep the government running past october 1. speaker boehner said the house will pass the bill, and his counterparts across the capitol should too. >> i expect my senate colleagues to do everything they can to defund this law, just like the house is going to do. >> ifill: whether they will, remains unclear. texas republican senator ted cruz, a driving force behind the effort in the house and the senate, said he will not back down. >> i will do everything necessary and anything possible to defund obamacare. >> filibuster? >> yes. and anything else.

any procedural means necessary. >> ifill: but some republicans are reluctant. tennessee republican bob corker dismissed the entire strategy via twitter. he wrote: democrats were happy to highlight republican disagreement. majority leader harry reid: >> there's really some wrangling among the ranks. not orepublicans in the house, but now we have battles going among republicans in the house and republicans in the senate. so let's just wait and see if they have a stomach for closing the government. >> ifill: after tomorrow's vote, house republicans are preparing to move right on to the next fiscal fight-- this time over raising the national debt limit. this time, they are working to link its passage to implementing a one-year delay in the health care law. but white house press secretary jay carney suggested any such proposal is not worth discussing.

>> it's unconscionable to imagine that there are those in the congress-- and now apparently because he couldn't persuade them otherwise, the speaker of the house has joined them-- who believe that it is the right thing to do to threaten another recession, threaten economic calamity in this country and the globe over their desire to defund or delay the affordable care act. >> ifill: the treasury now estimates the government will reach its borrowing limit, which would mean defaulting on its debts, sometime between late october and early november. >> woodruff: and, in the other news of this day: a warning from pope francis that the roman catholic church's moral authority is likely to fall like a house of cards, unless it becomes more welcoming. he told an italian jesuit magazine that, "the church sometimes has locked itself up in small things, in small-minded rules." the pontiff said doctrines against abortion, gays and contraception must be balanced against the need to be more merciful.

we'll have more on this, later in the program. the u.s. house of representatives has debated a bill to slash food stamps by some $40 billion over the next decade. republicans argued today the measure provides much-needed reforms to a program that's expanded to one in seven americans. democrats countered with pictures of hungry americans, and argued the cuts would do great harm, as the two sides battled on the house floor. >> these $40 billion in cuts go against decades of bipartisan support for the fight against hunger in the united states. they will hurt our economy and they are, in a word, immoral. if this cruel legislation were to become law, at least four million of the nation's poorest citizens would lose access to the food that they need. >> republicans aren't trying to take food out of babies' mouths or make our seniors go hungry. don't believe the scare tactics from my colleagues who oppose

the bill. this is a common sense reform that cuts waste, fraud, and abuse leaving more money for the americans who truly need help in time of need. >> woodruff: the democratic-run senate opposes the house bill, and the white house has threatened a veto, if the measure ever makes it to the president. a texas appeals court today tossed out the money-laundering conviction of former house majority leader tom delay. in 2010, he was found guilty of illegally channeling $190,000 in corporate donations to republicans running for the state legislature. the appeals court ruled the state never proved the money was illegally obtained. prosecutors plan to appeal. j.p.-morgan chase will pay one of the largest fines ever, for one of the largest trading losses ever. the fines total $920 million. u.s. and british financial regulators said the bank is also admitting that weak oversight allowed london traders to lose

$6 billion. more on this, in a moment. the death toll in mexico's disastrous flooding hit 97 today, amid major new destruction. a massive mudslide buried much of a village, located deep in the country's southern mountains. officials said 58 people are missing there. one survivor told a harrowing story. >> ( translated ): i was walking down the street, near a store, when i heard a loud noise and i just stood there. i saw how the dirt and dust began to billow up. it was like black smoke and it turned like a windmill. when i saw that it was coming down to the field, i left running. i didn't see anymore. >> woodruff: the flooding and mudslides were triggered by a pair of tropical storms that struck last weekend. one devastated acapulco, then grew into hurricane "manuel" and battered the northwest state of sinaloa today. new fighting has erupted in syria between islamist gunmen and western-backed rebels.

activists confirmed today that an al-qaeda offshoot seized a northern town near the turkish border, driving out fighters with the free syrian army. it was the latest sign of growing infighting in rebel ranks. u.s. senator john mccain fired back today at russian president vladimir putin. last week, in "the new york times", putin strongly criticized the u.s. and its policy on syria. today, on a russian news website, mccain wrote that putin rules, quote, "...by corruption, repression and violence. he rules for himself...." the arizona republican also accused putin of siding with a tyrant in syria. in egypt, security forces stormed an islamist stronghold near the great pyramids, on the outskirts of cairo. they went door to door, hunting down armed supporters of ousted president mohammed morsi. the soldiers were backed by armored vehicles and helicopters

as gunmen fired down on them from the rooftops. the egyptian security chief vowed today to keep up the pressure. >> ( translated ): the 55 people who were arrested are those who burned the churches, paraded with the bodies of the policemen, scared the people and formed the criminal hideouts in kerdasa. this is just the beginning and we will continue our operation. >> woodruff: islamists seized the town after security forces cracked down on pro-morsi protesters in cairo, killing hundreds of people. the washington, d.c. navy yard reopened today for the first time since a gunman killed 12 people there on monday. the 16-block walled complex had been closed to all but essential personnel as the f.b.i. investigated. as thousands of employees streamed back to work, vice admiral william french said there's counseling for anyone who wants it. >> to the people that are in the military, and buy things so

we're interested in opening people up and making sure we can get to them and get them the help they need >> woodruff: the navy yard's building 197, where the shootings occurred, remains closed. wall street mostly took a breather today after wednesday's rally. the dow jones industrial average lost 40 points to close at 15,636. the nasdaq rose five points to close at 3,789. the man who spent more than 50 years at the helm of video-game pioneer nintendo has died. hiroshi yamauchi ran the japanese company from 1949 to 2002. during that time, it grew from a playing-card maker to one of the most popular gaming companies in the world. yamauchi died today of pneumonia at a hospital in central japan. he was 85 years old. >> woodruff: still ahead on the "newshour": good-will gestures to and from iran; over a billion dollars in penalties and refunds levied on j.p. morgan; a unique approach to help troubled homeowners; the

pope faults the catholic church for being obsessed with abortion and homosexuality and what will healthcare reform mean for the premiums you pay. >> ifill: now to iran and what looks like a charm offensive not seen in more than three decades. ever since hasan rouhani was elected president of iran in june, he's been sending signals that he is more open, more moderate than his predecessors. perhaps his most overt olive branch was delivered last night during an interview with nbc news, in which he signaled a possible diplomatic opening on his country's disputed nuclear program. >> ( translated ): we have never pursued or sought a nuclear bomb, and we are not going to do so. in its nuclear program, this government enters with full power and has complete authority. we have sufficient political latitude to solve this problem.

>> ifill: rouhani also said he'd had a positive and constructive exchange of letters with president obama on the issue, which the white house confirmed. the iranian leader has already transferred responsibility for nuclear negotiations from iran's conservative military to the foreign ministry. and, on monday, the country's new atomic energy head pledged increased cooperation with u.n. inspectors. during an interview on telemundo this week, president obama said he welcomes the apparent diplomatic thaw. >> there are indications that rouhani, the new president, is somebody who is looking to open dialogue with the west and with the united states, in a way that we haven't seen in the past. and so we should test it. >> ifill: other signs of defrosting: iranian authorities unexpectedly released 11 prominent political prisoners yesterday, including nasrin sotoudeh, a prominent human rights lawyer. and earlier this month, in a

tweet, rouhani wished the world's jews a happy rosh hashanah. rouhani's change in tone, at least, stands in stark contrast to the heated rhetoric of mahmoud ahmadiniejad, the previous president, who routinely attacked the west and denied the holocaust. but israeli government leaders remain deeply skeptical about rouhani's nuclear plans. >> ifill: although rouhani will attend the u.n. general assembly next week, there are no announced plans for him to meet with president obama. so, what do president rouhani's overtures to the united states mean? and how much change is actually happening inside iran? for those answers, i'm joined by haleh esfandiari, director of the middle east program at the wilson center. and karim sadjadpour, a senior associate at the carnegie

endowment's middle east program. what is rouhani up to, karim sadjadpour. >> as you said, queen, this is the most significant event they have launched since 1979 and it has been significant. i think the big question is whether this is merely a tactical compromise in order to stave off economic pressure and reduce sanctions 0 is this a strategic shift by iran to alter its relationship with the outside world, in particular with the united states, and i think only time will tell. we're going to have to test that as president obama said. >> what do you think about that, haleh esfandiari. >> i think it's strategic. i think that the economic shardship that the people of iran are feeling and have been sensing for the last eight years finally res natured with the supreme leader. >> because of the sankions. >> because of the sankions, of

course, and i think that's why he gave at least a lot of leeway to president rouhani to see if he can do something that -- you know, he can sense that he has quite a lot of authority to be able to at least start a set of negotiations. >> ifill: when president rouhani won and was installed in office there was much discussion about how he was a moderate or centrist. what dud that mean in iran. >> with the bar of public diplomacy was set very low by the previous president so as long as rouhani comes in and doesn't deny the holocaust and call for israel to be wiped off the map he is seen as a moderate. but historically he has been a constant regime inside ever. but his foreign policy and national security focus, in that respect he has shown himself as

someone putting iran's national interests ahead of revolution or ideological interests and for the obama administration which is looking a the middle east and every country seems to be unraveling, syria, egypt, bahrain, a lot of negative examples there, and i think that iran, ironically, is perhaps one of the few sources of hope for obama to leave a positive diplomatic regularly. >> ifill: so so curious about one part of ann curry's interview at nbc about whether he denied the holocaust. his answer was i'm a politician not a historyion. that seem like a missed opportunity. >> yes, i know. i think he felt he could not come out straight and say, no, i think my predecessor made this horrendous mistake by saying that. so he got away with this answer because he thought that his foreign minister who is equally a savvy politician had already

taken care of the holocaust issue when he left on his facebook or in his twitter in answer to a question that happened to be from -- daughter that the people of iran never denied the holocaust and the person who -- that person is no longer president. so i think rouhani that that that took care of the holocaust so he tried to wiggle his way around sphwhriefl he is a politician. >> he is a politician, compared to his predecessor and the others. >> karim, what do you say to people who wonder if all of this olive-branch waving isn't a ploy to get sankions lifted? >> anything is possible, gwen, but we won't know until we test it. i don't doubt rouhani's desire

to pursue de taunt with the united states. what is in question is whether he has the authority to carry out that da taunt with the united states. and we really don't know. i have to say i'm someone who didn't allow for rouhani to be elected in the first place. and the supreme right has looked at resistance towards america as one of the strategic pillars, idealogical pillars for three decades and i'm confident that he is prepared to abandon those pillars? i don't think so. but i think we won't know until we try to test it. >> ifill: against that backdrop, in 2007, haleh esfandiari, you were released from being held in iran. and you watched this prisoner released yesterday with special interest. how significant is it? >> i think it's very significant and i felt very emotional when i saw the reunion of the young woman that was freed.

but there are a whole list of people that were released, by the foreign minister and i think it was very significant because it happened also on the eve of the trip of president rouhani, who i'm sure would be asked about the other presenters, political prirches, including -- so at least we have something to show. >> ifill: but there are dozens of others? >> there are numbers, they say, you know, around 800 political prisoners and different degrees but maybe that is the first step. but just to give you an example that nothing is as simple as one sees in iran. already today, if you see the press comments that say, well, these people had served their terms and had nothing to do, which is ridiculous.

everybody knew the sentence. but they want to try and cover it up. >> ifill: this mutual outrage going on between the u.s. and iran, does it help the president of the united states to square the circle on syria at all? >> possibly. at the moment, the u.s. and iran are basically embroiled in a zero sum game in syria, bashar al-assad's biggest backer is iran and obviously the u.s. wants us to go. the irony is, they're locked in the game but when there's a fault there's going to be an overlapping interest between washington, iran and syria which is mutual concerns about radical islamists who hate shi'ites as much as the united states. >> what do you think will happen at the u.n. general assembly, is this all a build up to that moment? >> i believe so. but my sense is that he is going

to give a speech which is very moderate in terms and showing that he is a man of compromise and a con silltary turn but he will also insist on the right of iran. he is not going to compromise that, and he will explain what iran thinks is its rights when it comes to nuclear issues and then what i think is interesting to watch is histone on issues that have been always important for the palestinian issues, for example, how is he going to formulate that, and that is something to watch. >> ifill: we will be watching all of that. haleh esfandiari, the woodrow wilson center. and karim sadjadpour, carnegie endowment. thank you very much. >> thank you. >> woodruff: and we return to j.p. morgan-- the huge investment bank hit with two sets of penalties today.

first, s.e.c. officials criticized the bank's top leaders for how they handled trading losses last year that eventually topped $6 billion. the sec said: no top executives were charged. for more on this and another federal penalty, we turn to dawn kopecki with bloomberg news. she joins us from new york. welcome to "the news hour." remind us what jpmorgan is charged with and then what is it admitting that it did wrong? >> well, the bank has been charged with basically having such bad and lax internal controls that it led executives to give shareholders, regulators and their own board of directors really bad information, inaccurate information.

they didn't correct the information in a timely way. and basically miss lead, you know, very important, you know, regulators and share shoulders that are investing in their company. >> woodruff: and the bank in, i gather, what is taken as unusually in these kinds of arrangements, jpmorgan is admitting that it broke the law? >> it's something new that the securities and exchange commission is trying to force companies to do. because investors are getting tired of banks being able to pay a large fine and then not admitting any wrongdoing. so what they're doing so getting them to admit that they at least violated securities laws but it didn't say specifically what they violated, so this is new, it's new under mary jo white, the new chairman of the commission, had to recuse herself from this case because she used to represent jpmorgan in private practice but they still came down very hard on the company today. >> woodruff: how does this compare, dawn, with other penalties leveed against other

banks in the last few years? >> it's huge. it's tremendous. it's definitely in the top 10, perhaps the top five, for a single bank to absorb, and it's not done. it wasn't just the fcc today, it was the financial regulator and the united kingdom. it was the office of comp controller the currency and the federal reserve. their got hit by four different regulators today but there are many other people, many other agencies still investigating this, so this 900 billion today is not the end of it. by the time it's over, you may see this -- you will probably see this go well over a billion dollars. the commodity futures trading commission is conditioning whether or not they manipulated various trading indexes and that's another sign that will be probably coming down the pike in maybe a few months or so. >> woodruff: and i gather there's a criminal probe by u.s. prosecutors? >> yep. they're looking at the traders involved. and right now, they have filed charges and indictments against

two of the low-level traders. ironically, they haven't charged the london wail, bruno etsel because he is cooperating with them. but in these cases they start low and try to work their way up the food chain. no one noes how high it will go. it may stop with these three traders but the goal is to see if they can implicate executives higher up the food chain at jpmorgan and that could be a big headache. >> woodruff: is it clear why the government -- you mentioned three regulatory agencies in the u.s. and a british agency, why they went ahead and did a joint finding today and yet there are still these other investigations under way? >> well, the securities and exchange commission k. financial conduct authority, i'm told they often act in unison and the fed as well. so the company was really trying to get as many fines charged off against the third quarter earnings which closed on

september 3rd, so that's coming up in a week or two. so they were really rushing and probably paid more than they would have, had they fought it longer, just to try to get it off their books this quarter. >> now, separately we know today it was announced that jpmorgan is being asked to pay hundreds of millions in refunds to customers. >> yep. woodruff: tell us about that. >> they were charged by the office of the comptroller of the currency who was joined by the consumer federal protection bureau, who fined them $80 million together and then forced him to refund about $300 million in charges to consumers that bought identity theft protection. it was because the protection wasn't really there. it was kind of a scam, a little bit of a dupe of consumers and they got slapped for that as well today. so today cost jpmorgan over $1.3 billion. >> woodruff: all together when you add it all up. what affect does this have on jamie diamond who has been

heralded as one of the wonder kids of bank leadership? >> this puts a lot of pressure on jamie diamond. he was challenged very hard last ring to keep his chairmanship. he is chairman and c.e.o. and there was a big push to get him to step down as chairman. ircan't imagine that investor groups won't do that again with the next proxy season. that comes about in april or may of next year so this will probably put more pressure on him. i mow investor groups are not happy with him still, and so this is really going to make it difficult for him to keep his chairmanship. i don't know about his c.e.o. position. some people have called for resignations but it's kind of early for that. >> woodruff: dawn kopecki, watching it for us tonight. thank you, with bloomberg news. thanks. >> thank you. >> ifill: next, a second story about government officials

pushing back against banks and other lenders, this one focused on the aftermath of the mortgage meltdown. in northern california, a town is on the verge of taking unprecedented action to help underwater homeowners. will other cities follow suit? hari sreenivasan has our report. >> reporter: jazz musician morris legrande spends a lot of time jamming in the small recording studio in the back of his richmond, california home. he and his wife luajuana, both 57, were first-time homeowners when they bought their place in 2004 for $310,000. several years later, when the property was appraised at nearly half a million dollars, they refinanced and used the money to do some home repairs. >> this was on sale. >> reporter: but the legrandes dream of paying off their home one day was shattered in 2007 when the housing bubble burst, and, like so many families across america, they found

themselves underwater-- owing more than their home was worth, much more. >> we're currently $270,000 underwater. it weighs on me heavily. i've had some sleep issues over the years. >> you only get what you absolutely need. every now and again you can splurge and get some ice cream. >> reporter: their street has been hit hard, too. >> this white house down there was lost to foreclosure and resold, this house here that was lost twice. >> reporter: the couple is current on their mortgage payments, due to help they receive from the federal government's home affordable modification program which cut their ballooning monthly payments nearly in half, but they say foreclosure is a very real possibility unless they can reduce the amount they owe. >> i don't see staying here, pouring more money into this

house, knowing in the end im going to have to say here you go. you can have it back. >> reporter: but the legrandes and other families in richmond who are on the brink of foreclosure say they now have hope of keeping their homes, thanks to this woman. >> they say, "no, we can't." we say, "yes, we can!" ( cheering ) >> reporter: richmond mayor gayle mclaughlin, a former teacher and member of the green party is on a crusade to stop foreclosures she says have devastated her working class, predominantly minority community. despite rising home prices in many areas of the country, half of all richmond homes are currently underwater; meaning the homeowners owe more on the property than it is worth, and nearly 20% of homeowners have gone through foreclosure. >> when we have these vacant blighted homes, you know that they're really attractors of crime. they really lower the overall value of property for the entire neighborhood. >> reporter: mclaughlin has put forward a controversial and novel plan using eminent domain

to seize underwater mortgages from wall street firms and investors in hopes of keeping residents in their homes. eminent domain is usually invoked by governments to take private property for big projects like railways which are designed to serve the public good. but richmond is on the verge of being the first city in the nation to instead use the power to help refinance homes. richmond's city manager took the first steps in july, sending letters to financial institutions that manage the mortgages of 624 underwater homes, including the legrandes offering to buy the loans at what the city considers current fair market value. that's considerably less money than what is owed on the mortgages. if the offers from the city are refused, mclaughlin says the city may invoke eminent domain, seizing the loans, and then working with owners to try to refinance their homes at today's lower price, restoring some equity to the homeowner.

so far, not a single financial institution has accepted the city's offer. >> we have moved forward with this option to utilize eminent domain as a last resort, because no solution to this housing crisis has been brought forward by either the banks, or the federal government. >> reporter: it is an unprecedented approach which has garnered national media attention and has sparked a huge debate among richmond's residents. >> people didn't complain when they signed the paperwork. now they've made a bad call, they are looking to you to bail them out! >> reporter: at a contentious city council meeting last week, mclaughlin sparred with two of the council members opposed to the eminent domain plan. >> i can not in good conscious put this city at risk. >> reporter: passionate residents on both sides of the issue lined-up to speak into the wee hours of the morning. >> if we don't cancel this program, then it is going to be

impossible to get credit here in the city of richmond and believe me there's not going to be a job created in this city, there's not a house improved. >> bought my home for 420 and now worth 125. if program doesn't pass, we move. >> reporter: vice mayor corky booz, who is strongly against the eminent domain plan, said the city could face serious legal consequences if it moves forward. >> we are the guinea pig. is 110,000 people worth fighting wall street? >> yes! >> that's fine, but when we have a multimillion dollar suit and your tax dollar has to pay it, i hope you are still there hollering and saying, "yeah, yeah, i want to pay that bill." >> reporter: local real estate agent jeffrey wright is also opposed to the use of eminent domain. he is part of a campaign, funded by the california association of

realtors, to stop the plan. wright says lending institutions have no legal obligation to negotiate with homeowners, and he fears they will no longer want to do business in richmond. >> if a lender wants to renegotiate, that's between the lender and the borrower. it's not for a municipality such as the city of richmond to become an interloper into someone else's agreement, utilizing strong arm tactics such as eminent domain to force them to have to renegotiate an agreement. >> reporter: wright also believes homeowners, many of whom claim predatory lending forced them into bad mortgages, bear the burden of responsibility, not the banks. >> in my 34 years with the real estate business, at no point in time have i ever seen anyone strapped to a chair, burned with cigarettes, pistol whipped, forced to sign a loan agreement. >> reporter: while emotions are

running high in richmond, there's an even bigger battle underway between the city, supporters of the city's plan, and wall street. >> do i believe that wall street is circling the wagons in any way they can? of course they are. they don't, for whatever reason, they don't like this. >> reporter: steven gluckstern is the chairman of the san francisco private investment firm mortgage resolution partners, m.r.p. he is the one who proposed the eminent domain plan to richmond leaders and he's now working closely with the city to implement it. and here's an important point to understand: gluckstern and the city didn't just randomly pick 624 mortgages to buy. they went after homes with a very specific, complicated loan, known as private label securitized mortgages. now these are mortgages which have been sold from the original lending institution, bundled together with other loans in trusts, and then sold to private investors. they are traded daily, so hundreds, possibly thousands of individuals have a financial stake in them. gluckstern says, unlike a

traditional loan directly between a bank and a borrower, the complicated structure of p.l.s. mortgages makes it very difficult for richmond homeowners and homeowners around the country to know who they can actually negotiate with to reduce their loan. >> there's about four and a half million private label securitization mortgages, half of which are underwater, half of which we know are going to default. that's two and a half million american families. this is a hairball stuck in america's economy right now, and it's got to get hacked up. >> reporter: but one of the most controversial aspects of the city's plan is that gluckstern's company, its investors, and the city of richmond stand to make money if the eminent domain plan moves forward. here's how their plan works. in a hypothetical example, if a home was originally purchased for $400,000 and is now worth $200,000, the city would use eminent domain to seize the loan for $160,000. that's 80% of the current fair market home value.

the city would then help qualified homeowners to refinance, reducing their monthly payments, and giving them $10,000 back in equity. that leaves $30,000 to be divided between the city of richmond, m.r.p. and its investors. >> that's called stealing. >> reporter: scott simon is a former managing director of pimco, one of the world's largest bond funds which invests in mortgage and asset-backed securities. simon says m.r.p. and richmond are taking profits away from average americans. >> the lenders, the investors, its really the same thing in this case, are in a large part your viewers. it's their 401(k), it's pension plans, its firemen, and policemen, and teachers, it's exactly backwards of the way m.r.p. makes it sound, which is that rich people are, you know, wall streets trying to make money. >> reporter: and simon says as the city's move could have very real consequences for all residents of richmond, even those not underwater on their mortgages.

>> why would you ever lend money in an area where the government could just say, we're going to take it? a place like richmond will be cut off, fannie and freddie will all walk away, the big lenders will all walk away, and you want to see something terrible happen? wait until you cant get a mortgage in richmond. >> the fact is you cannot restrict credit to a community. the fact that mortgages would be boycotted, or any kind of, that's an illegal type of action. >> reporter: still, richmond may already be seeing blowback from wall street. last month, the city was unable to sell its highly rated municipal bonds in the open market. and a coalition of mortgages bondholders, which are being represented by trustees wells fargo, deutsche bank, and the bank of new york mellon, have been challenging the city and m.r.p. in federal court. mayor mclaughlin and a group of supporters gathered outside wells fargo last month and demanded the bank and other

lending institutions stop their legal actions and work with the city. >> this is building to be a national movement. there are many cities like richmond that and are suffering big time. >> reporter: at the end of their seven-hour meeting last week the richmond city council voted four to three to move forward with the eminent domain plan. but city leaders, including mayor mclaughlin, say they are still hopeful they can work out some kind of agreement with the banks and bondholders using eminent domain only as a last resort. >> ifill: a postscript: earlier this week, a federal judge in san francisco dismissed the investors' lawsuit against richmond and m.r.p., saying the case had been filed prematurely. but he did not rule on the merits of the case. >> woodruff: now to the remarks made by the pope and the unusually blunt language he used about the state of the catholic church. jeffrey brown has more on the story.

>> brown: the pope's words came in a wide-ranging interview with an italian jesuit magazine, done in conjunction with a number of jesuit publications around the world, including "america" magazine published in the u.s. its editor in chief, father matt malone, joins us now. welcome to you, father. i wanted to ask you, first, briefly, just how unusually this is and how surprising it is to have the pope speaking out in this way. >> it's actually unprecedented. other popes have given interviews. pope benedict specifically gave two book length interviews to a german journalist but they were highly redacted and highly philosophical. no pope has really given an interview that was this frank, this intimate. >> that's look at some of the language getting a lot of attention. he said we cannot insist only on issues related to abortion, gay marriage and the use of contraceptive methods. this not possible.

i have not spoken much about this things and i was reprimanded which that. the teaching of the church is clear and i am a son of the church but it is not necessary to talk about these issues all the time. he later uses the word obsessed, the church is obsessed with these things. what do you make of it? >> well he is not changing any of the church's teachings per se. but what he is doing is re-ordering our priorities. what he is reminding the church is that the fundamental and most important teaching of the church is that we have a god of love who has treated us and has redeemed us. and only within the context of our relationship with him does the rest of what the church teach make sense. >> brown: so not changing any doctrine or policy. so does that have any practical implication, for example, here in the church and the u.s.? >> it does, i think. because, for instance, you know, in the modern era, the church has always taught officially

that guy and lazy baby people should be welcome with open arms and accepted and their dignity should be respected. that has always been an aspect of what the church has taught. but what the pope told us today is that 1 not only an aspect of what the church teaches about homosexuality but it is the most important aspect. in other words he has not changed the teaching but he has drawn our attention to another aspect of it and said that ought to take priority. >> perhaps the strongest language he used that got some attention, i want to put that up for our audience, he said we have to find a new balance, otherwise even the moral edifice of the church is likely to fall, like a house of cards, losing the freshness and fragrance of the gospel. >> that's right. and what the pope is saying there is that rules only make sense in the context of relationships. rules exist to safeguard relationships. and the most important relationship that the church

has, the most important relationship any of us could have is our relationship with this god of love who has created and redemmed us. and the pope said when we forget that, when we forget that essential truth of who we are, then the rest of it just doesn't make sense and it becomes a very blunt instrument. >> who is he speaking to here? yes, to audiences around the world, is he speaking to foacial rome, the vatican, to folks like you? how strong a message is this? >> well, interestingly enough he is not speaking to the vatican because he largely bypassed the vatd can in giving this interview. it went directly to american magazine and directly to rome ask we published it without censorship with the vatican bureaucracy. he is speaking i think directly to the people of god and he is saying to the people in the pews and saying any reform, any change in the church that is to

come or not to come, it has to begin with a change in our hearts. it has to begin with the reform of our attitudes. and the first way that you begin that change and that reform is by remembering who you are, and the people in this interview is reminding us who we are and in a very candid way revealing who he is. >> yes, i just want to ask you about that briefly because he also mentions some of his loves, mozart, dostoevsky, and that was interesting to hear him talking about his artistic influences. >> and even wagner, he has quite eclectic tastes. that's absolutely true. you know, he is a man of the heart. so he is attracted to -- he is attracted to the affairs of the heart. and you know, the comedy and tragedy of human living. and he finds that in those artists. >> father matt malone of

american magazine. thank you very much of the. >> thank you. >> ifill: finally tonight, understanding the health care reform law. we've been examining the changes scheduled to take effect when online insurance marketplaces known as exchanges open next month. our series of reports, answering some of your more frequently asked questions continues with ray suarez as our guide. >> we again focus on questions about exchanges and insurance rates. tonight, what do we know about what premiums might cost? we received a lot of questions about this and this time we're joined by newshour regular susan dentzer. susan, there's widespread either misunderstanding or confusion about what this is going to mean, even among people who are already insured, they think something is coming to change their lives. we got questions like this one. >> my name is burton ask i'm

from odenton, maryland, and my question for the affordable care act is: will the premiums go up for those who currently have health insurance and if so how much? >> do we even know that yet? >> well, if you have health insurance through your employer, your health insurance is probably only going to be affected by all of the normal things that affect health insurance premiums like the fact that health care costs are rising and even though they're not rising as fast now as they were several years ago, they're still going up 4 percent or more a year. so generally speaking for everybody health insurance premium restining to rise. for people buying coverage through the exchanges or the -- as they're officially called the marketplaces, the premiums will be different from premiums available on plans previously because the plans are different. the plans are coming into the market. they have new requirements on them about what they have to cover. we now know that no pre-existing condition restrictions will be held against anybody and that's

going to affect the price and we also know that things like no more annual limits on what health care insurance payouts can be come into effect, no lifetime limits. so in essence, the coverage is different from what was available previously for people buying coverage in the individual market, and the prices are going to vary, exchange by exchange, depending on how many insurers bid to participate in the program and how heavy a bargain states drove with the health insurers that are coming into the marketplace. so we're seeing a lot of variation in rates around the country. that said, it's also fair to say though in general the rates are lower than many people expected they would be. >> among that first group, the majority of american whose have health insurance coverage and get it through their employer, aren't there any taxes or fees that are going to be added to the premiums they already pay to help implement this new system? >> eventually that's right.

very high cost health insurance plans are going to be subject to a so-called cadillac tax. but that doesn't take affect right away. so in general, for the early years of this, if you have employer-provided coverage, you will be subject to the same forces that were driving health insurance premiums up all along. some additional expense related to some of the changes in that coverage. as we know, for example, adult children can now stay on their employer plans that their parents have. so modest effects on that -- on premiums from that, but in general, most of the difference in premiums is going to be seen by people who previously had to buy coverage on the individual health insurance market and now had the ability to buy that through a marketplace. >> some people who are entering the changes are a little worried about what they're going to to find there and what "affordable" means. we got a letter from bill williams of fort collins,

colorado, who writes: "i presently pay approximately $100 a month per person in our household. how come the obama premiums i hear bantered about are $600 for each person? how can this be considered remotely affordable? this takes us from $300 a month to $1,800 a month and $1,800 per month totals to $21,600 per year. what can you tell bill? >> there are going to be a variety of plan available on exchanges including in colorado's, subject to, for example, different levels of covering. they will be rated by so-called medals, bronze level, silver level, gold and platinum. and what this speaks to is how much of a person's total health care cost every year does the insurance plan cover. the bronze plans cover only 60 percent of total costs. and the silver, which many people will buy covers 07 percent and so on.

so, depending on what level of coverage you pick, premiums will be lower or higher. for example, in colorado, a bronze level plan, available for a 40-year-old male can be had for as low as $186 a month. so there's going to be some variation. there also is variation within states, depending on what the county is and how many health care providers and insurers bid to provide coverage. and also it's very clear that in some states and some changes, insurers drove very hard bargains with health care providers to get there emto take lower rates. >> in a case like bill's, he hey not -- may not be comparing his hundred dollar per family member month a plan to an equivalent plan to get this $600 that he has heard about and frankly scares him a little bit. >> that's right. $600 may be a platinum level plan that is potentially more

generous than he is buying now. it will be very difficult for people to make apples to apples comparison because the coverage changed the options have changed and the underlying marketplace has changed. >> susan dentzer, thank you for joining us. >> great to be with you ray. >> woodruff: our series continues online, where you can leave your questions about the new health care law. and we'll try to answer those in the coming weeks. >> ifill: again, the major developments of the day: republicans and democrats were locked in a standoff as they tried to avoid a federal government shutdown and a debt- limit crisis. and pope francis warned the roman catholic church runs the risk of losing its moral authority, unless it balances rules against abortion, gay marriage and contraception with the need to be merciful. and a correction, last night, as part of our series on climate change in the arctic, we got something wrong. point barrow, alaska is the northernmost tip of the united

states, not of north america. that distinction belongs to ellesmere island in canada. and that's only if you don't count greenland, but we'll leave that geography lesson for another day. >> woodruff: online, although reports show that existing-home sales have hit their highest levels in six-and-a-half years, first time homebuyers continue to struggle to get in on the market. we have a report on making sense. and on the rundown, we discuss how hiroshi yamauchi's leadership of nintendo helped turn video games into the highest grossing entertainment business in the world. all that and more is on our website newshour.pbs.org. >> ifill: finally, we remember the lives lost at the washington navy yard. here, in silence, are the names and available photographs of the 12 civilians killed in monday's tragic shooting. gunman aaron alexis also died.

>> woodruff: and that's the "newshour" for tonight. i'm judy woodruff. >> ifill: and i'm gwen ifill. we'll see you online and again here tomorrow evening with david brooks and e.j. dionne. for all of us at the "pbs newshour," thank you and good night. >> major funding for the pbs newshour has been provided by: >> and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. >> and with the ongoing support of these institutions and foundations.

and... >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

>> live from berlin, you're watching me "journal -- you are watching the "journal." >> the syrian president says he needs a year to destroy his country's chemical weapons. >> after the murder of an anti- fascists singer, thousands of greeks take to the streets to protest far right extremism. >> iran is praised for releasing political prisoners, including a human rights lawyer. human rights lawyer.