the land kicks off a marathon showdown over the president's health care reform act. we look at what's at stake for you and talk with the ceo of the cleveland clinic about what it means for health care providers. >> tom: on wall street: the bernanke effect. stocks soar as the chairman of the federal reserve signals he thinks interest rates should stay at historic low levels to help the job market. it's "nightly business report" for monday, march 26. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

captioning sponsored by wpbt >> susie: good evening everyone. a legal showdown today for president obama's healthcare reform law. the supreme court began the first of three days of historic hearings on the controversial law. tom, this case is getting incredible attention all across the country. >> tom: a key issue before the court, susie, is whether congress has the right under the constitution to require all americans to buy health insurance, whether they want it or not. almost 50 million americans do not have health insurance and 26 states are challenging the law's requirement. in today's opening arguments, lawyers made a case the insurance mandate doesn't take effect until 2014, arguing the high court shouldn't rule until then. >> susie: the court's decision

could have far-reaching implications for the economy and many businesses as well as you. darren gersh was at the supreme court and filed this report. >> reporter: even for the supreme court, today was historic. outside, protesters for and against testified to the importance of this case. but inside, the court began with a narrow legal question: to avoid frivolous lawsuits from interfering with the government's ability to raise revenues, the law requires taxpayers to first pay a tax before fighting it in court. since the individual mandate doesn't take effect for two years, lawyer robert long told the justices they should wait to decide this issue. they could take it up after someone pays a fine and sues the government claiming its unconstitutional. >> there is no reason to think that congress made a special exception for the penalty imposed. >> reporter: but justice antonin scalia said any limits on a courts ability to consider a case like this should be narrow and clear. >> and i find it hard to think

this is clear. whatever else it is, it's easy to think that it's not clear. >> reporter: the debate today hinged on whether congress is taxing people who do not buy health insurance or whether congress is slapping a penalty on people without health insurance. if it's a penalty, justice ruth bader ginsberg argued there was no legal reason the court could not decide this case now. >> this is not a revenue raising measure because if it's successful, there will-- nobody will pay the penalty and there will be no revenue to raise. >> reporter: but chief justice john roberts said the point of the lawsuits challenging the president's health care law is to prevent the collection of taxes, an issue tied directly to the mandate to buy health insurance. >> a mandate is a command, now, if there is nothing behind the command, its' sort of a what happens if you don't follow the mandate, and the answer is nothing. it seems very artificial to separate the punishment from the crime. >> reporter: in an odd legal twist, the obama administration

agrees with those suing it in court that there is no reason for the supreme court to wait to rule on the merits of the individual mandate. though at times, even solicitor general daniel verrilli seemed to trip up over penalties and taxes, as he did here with justice stephen breyer. >> if they pay the tax, they are in compliance with the law. >> why do you keep saying tax? >> if they pay the tax penalty, they are in compliance with the law. >> tom: darren joins us now. microphone as lawed in the high court but no video camerasment darren, does this all boil down to an argue over a tax which is used to a fund a government versus what i want to call a penalty which would be an economic punishment? >> it does. because they want to make sure that basically, you know, if you are unhappy with your tax, you are not going to sue the supreme court. you're to the going to end up in the supreme court. this is their way to kind of narrow the exemption to this

law that is designed to protect our tax system. >> tom: so we can call it a penalty hear and if we do that does the court seem inclined with what you heard today to rule that they don't have to wait until 2014 to decide the fate? >> this is their march madness. i really thought that they were going for it they really seemed to think that, and this is the kind of case if you are a just fis you live for it it's got everything. it's a huge constitutional issue. it is a national issue that needs to be resolved. sow i think they're trying to clear out the kind of technical underbrush. but they look like they'll go for did by late june we'll have a decision. >> tom: assuming they do why is today's focus so important on the technicallities here, tax versus penalty. >> well, this is really gets to the heart of this kind of abstract, it's called the anti-injunction act it is important because it keeps people from suing before they pay a tax, gaming the system. they had to get to this. and so it also determines

whether or not the courts can take the issue. and as you know, you get nine lawyers in a room. the first thing they're going to argue is whether they have authority to do something. >> tom: what role about economics could play as we hear more arguments tomorrow and wednesday. >> yeah, economics will be important. the government is going to argue look, we need the individual mandate because it prevents cost shifting. cost shifting is a critical issue. and that's the reason congress wanted to do this. and the cost shifting gets to the swhool of why congress is regulating which has to do with interstate commerce and the whole sort of underpinning of why congress could act to do the economic regulation. but if they pull out the individual mandate, then the economic gates become this more difficult. and also the justice will have to decide whether the rest of the law makes economic sense, whether it can survive without the mandate. that will be critical.

>> tom: watching and listening to those arguments from washington tonight, our bureau chief darren gersh. >> susie: what will the supreme court ruling mean for big healthcare providers? to answer that we turn to the head of one of the nation's biggest medical institutions: the c.e.o. of the cleveland clinic, dr. toby cosgrove. nice to you have you back on its program. >> thank you very much. nice to be here. >> susie: so what outcome would you like to see coming out of the supreme court from the perspective of the health-care system? >> well, i think the most important thing is that we have rules so we can make our plans, do our planning for the future. but what we really need is we need to change our health care delivery system. we currently have a fragmented system with variable quality and at high costment and we have to assure quality and increase the quality. and we have to decrease the cost. >> susie: and where, where is that cost-cutting going to come from? no matter what happens in the supreme court we still have to deal with this health care economic problem. where is the cost-cutting

going to come from? >> we have to do two things. we have to have an integrated delivery system which will be coordinated and efficient. and the second thing is we have to move away from fee-for-service and start paying doctors and health-care providers for value. and that's a big shift. and those two things are very doable as we go forward. >> susie: do you see health-care organizations, well, first of all i know cleveland clinic has done a lot in this area. it is very self motivated to do that. in terms of other health-care organizations, do you see them moving in this direction. or are they just going to go by the bar minutium of what the government and regulators tell them to do or are they going to go above and beyond. >> the interesting thing is i don't think we're going to see a lot of changes regardless of what the supreme court decisions are. because the train has already left the station. health care is already beginning to change. we're integrating across hospitals. we're seeing increasing consolidation of hospitals coming into systems such as we have in cleveland. and we are seeing

cost-cutting. we're seeing quality going up. we're seeing all these changes in place. and they're driven by a couple of things. first of all the demographics. we have a huge number of people now coming into the health-care system, some 10,000 more medicare patients every single day coming into the system. and that's because of the baby boomers and people living longerment and the secretary thing is the cost is so great that the debt from health care is going to overwhelm all the other things that we can do in the united states, education, et cetera. so we have to make those changes and we are. >> susie: that is a big agenda, a lot of people, 10,000 every day, that is a big agenda. cleveland clinic has done a lot in terms of technology, electronic medical records. what do other health-care organizations have to do to catch up? >> well, i think very importantly is the electronic medical record. we've invested in the last decade a billion dollars in it, 300 million of that is around electronic medical records. so all of our patients are connected by the electronic

medical record and they can have their lords at home and peruse their quality of care and their connection. secondly, we have got to take cost out. we've done a tremendous amount of that. we've driven up quality. we have to have more team work and integration across our system. and i think all health-care systems are coming to these conclusions at the same time we are. we have been working on this now for seven years. one the other things that we have to do is we've got to begin to change from sickness care to health care. and we have to begin to drive wellness. we have to deal with smoking. we have to deal with obesity. >> susie: a long list of things to deal with. we thank you so much for coming on the program tonight. >> my pleasure. >> susie: we've been speaking with have toby cosgrove, c.e.o. of the cleveland clinic. >> coming up, i'm suzanne pratt in new york. parents are worrying not just about report cards but college bills. we'll tell you why it pay's to plan ahead.

>> tom: the job market may be showing signs of improvement lately, but the head of the federal reserve does not seem inclined to raise interest rates anytime soon. speaking to a group of business economists, chairman ben bernanke suggested historic low interest rates are still needed to bring down the unemployment rate. that was all stock investors needed to hear. wall street headed higher after the fed chairman's comments: the dow rose 161 points, the nasdaq was up 55 and the s&p added 19. >> susie: he's michael gapen...senior u-s economist at barclays. hi, mike. >> hi, good evening. >> susie: so what was the message from ben bernanke today? >> well, i think the main message really was that yes, data is getting better. and 9 job market is improving. the private sector has been adding a lot of jobs over the past few months. and all of this is good news. but he also wanted to send

the signal that despite this good news the fed remains committed to the recovery. and that means low-interest rates for the foreseeable future. so just because the data is getting better and the labor market is getting better, doesn't mean the fed is going to be removing its policy accommodation any time soon. >> susie: so ead raing between the lines, the takeaway on wall street from investors was that the federal reserve is likely to pump more money into the financial system, keeping interest rates at this superlow rate, and boosting the economy. is that the right take away? >> that is. in our view it is the right take away. the fed has a conditional commitment in place to keep short-term interest rates near zero through late 2014. and recently with the improvements in data and better job numbers, many investors have thought well maybe the fed will back away from that pledge to keep interest rates low until the end of 2014. and the chairman seemed to be saying today, a little

bit improvement is good. we're happy with that but not so quick on raising interest rates. we're comfortable with where we are now. >> susie: so that doesn't seem like it's too much different than other messages that he's been making whether on capitol hill on or private speeches. so why the big rally in the stock market today? >> well, indeed it is not a different message. and i think one thing that the fed may have made a mistake on, about a year ago at this time was talking too quickly about what we call the exit strategy or how this accommodation would be removed. by repeating the same message, the chairman is just reinforcing the existing policy stance. low-interest rates in an environment where the u.s. economy is getting stronger is something that ultimately we think would benefit equities. and that's why you saw equity markets hayer today while bond yields remain near historic lows. >> want to get your take on what investors should be doing because in another capacity you advise the

investment strategist at barclays. there's been a move to tell investors put your money more in stocks, less in treasuries. where do you stand on that stocks or bonds. >> that's right. so we took a fairly aggressive position last december thinking that the market had gotten too negative based on events in europe. and we thought it was time to reengage in a more risky strategy. favor equities over treasuries, for example. we have gotten a lot out of equities since then. we still think that there is some room to go. we think ultimately that investors will be rewarded for remaining in equities and in particular in u.s. equities. so where we consult, where we've advised investors is to stay near the u.s. where growth is stronger and in the u.s. equities in particular. >> thank you so much for that. pleasure having you on the program. >> thank you, pleasure to be here. >> and we've been speaking with michael gapen, senior u.s. economist at barclays.

>> susie: movie fans were hungry for "the hunger games." the science fiction action drama dominated at the box office this weekend and that gave a big boost to the studio behind the movie: lionsgate films. the stock jumped almost 5% today to over $15 a share. the movie based on a series of teen novels brought in over $152 million during its opening weekend, making it the third largest opening ever. the hunger games debut was topped only by "harry potter and the dealthy hallows part 2" and the batman drama: "the dark knight." and tom, the box office

wasn't the only place that lion's gate dominated this weekend. its series "mad men" and i know are you a fan of it, returned for a fifth season on a m.c. last night. and that was winning its biggest audience ever 3.5 million viewers. i was watching. were you? >> i was not. hi some other business to take care of. but both of those numbers, the movie numbers and the tv numbers, pretty impressive considering that we had a lot of march madness going on as well, a lot of ncaa basketball still happening. otherwise we did see decent buying. let's look at the market focus tonight because it wasn't necessarily the box office but federal federal reserve chairman bernanke that helped fuel today's stock rally. with the head of the central bank continuing to believe low interest are necessary to help the economy, stocks shot higher. coming off the worst week of the year, the s&p 500 saw buying from the opening bell and steadily climbed through-out the afternoon ending up more than 1%. the pop takes the index up to its highest close since before the great recession. given chairman bernanke's suggestion about continuing low interest rates, it was an odd mix of sectors leading today's market higher. the traditionally defensive

health care sector and the more growth oriented technology stocks were each up by 1.7%. the consumer discretionary sector wasn't too far behind, up more than 1.5% financial stocks also helped today's market tone, partly thanks to a dividend increase. american express led the dow jones industrial average with its 2.5% rally. the buying came after announcing it was boost its dividend and okaying a stock buyback plan. axp shareholders will now get 20 cents per share per quarter, up from 18 cents. meantime, payment processing giants mastercard and visa both settled at new highs tonight. mastercard's came after almost a 3% jump today. visa saw a 1% rally. both came on heavier than usual volume. in health care, it was medical equipment maker edwards life- sciences leading the charge. the company is working on a new kind of heart valve that received some encouraging study results. it certainly got the shares moving, up almost 6% on heavy volume. this new experimental valve

doesn't require surgery, but is delivered using a catheter. a study finds patients receiving it had similar death rates to those having surgery, results interpreted as positive for edward. one more note from health care: arena pharmaceuticals is among the companies racing to develop a drug to fight obesity. its medicine was rejected in the u.s., but european health regulators have okayed the marketing application. shares shot up 25% on huge volume. the stock has been trading below $5 per share since american drug regulators turned down its application in the fall of 2010. that's a decision that will be re-visited in may. we may be in the lull of earning seasons, but we're still seeing a few companies report. for profit education firm apollo became the latest after the closing bell tonight. earnings were much better than expected even though it has been battling against weaker new enrollments. and just those worries continued in tonight's earnings report. enrollment fell, pushing down its revenues.

that sent shares down 3% from this closing price of $43.20. if that selling holds, the stock would fall below prices it hit in february when it first warned of weaker enrollments. meantime, the biggest producer of eggs in the u.s. saw its share price crack. cal-maine foods dropped 6% after reporting earnings with shrinking profit margins. it blamed higher feed costs hurting its bottom line even as sales were up. it was a risk on day with metal prices moving up. copper rallied 2%. silver rebounded 1.5%. and gold closed over $1,685 per ounce. and that's tonight's market focus.

>> susie: the number of americans who graduate from college is growing too slowly. that's according to the lumina foundation, a higher education advocacy group. its latest report shows just over a third of americans held college degrees in 2010. that barely budged from the year before. and far short of the foundation's goal, a 60% graduation rate by 2025. the group says the nation is no where near meeting that goal and that impacts economic growth. >> people with college degrees are actually more productive, and more productive workers are a key element in creating more jobs so getting people with more college degrees is going to help us meet our near term economic goals but it will really help power the economic recovery. >> susie: merisotis says the high cost is one of the biggest roadblocks to a college education for most students. that's why it pays to start saving early, if you want your kids to go to college. suzanne pratt reports. >> reporter: long island resident nicole romano became a

mother in a big way just a few months ago. but, already she's worried about paying for college for twins abby and ava. >> i don't want them to have to have student loans or wait too long to where they're ten and we only have seven or eight years. >> reporter: so, right after the babies were born, romano and her husband opened a 529 college savings plan. and, she's not alone, 25% of u.s. parents with college bound children have 529 accounts. the plans allow families to sock away money for higher education costs. those funds can grow tax-free and some states even offer tax incentives. if the romano girls chose a private college like n.y.u., it will cost a small fortune. experts calculate $159,000 a year to be exact. times four years-- that's $636,000 and don't forget to

double that for twins and for a shocking total of $1.3 million. cary carbonaro is the romano's financial planner. she says all her clients with young children have 529 accounts and safety is their biggest concern. and, it's no wonder people worry. after all, many 529 plans got slammed during the financial crisis, just like other investments. >> you could lose money in a 529. a 529 is just an umbrella, just like an ira is an umbrella. it depends on what you're invested on in the inside. >> reporter: for conservative parents, many states now offer options that invest college money in cds or bonds. nervous nellies can even stay in cash. but, without putting at least some 529 money in stocks, it will be tough to cover those college bills. >> college costs go up are currently going up double the inflation rate. so, if the inflation rate is let's say 3% right now, college

costs are going up six. so you want to at least keep pace with inflation in your college accounts. so, if it's six, you're not going to get six sitting in cash, cds or safe investments. >> reporter: and, to benefit from the power of compounding, parents like romano need to squirrel away money as soon as possible and in a big way. >> you have to be a good saver, and you have to plan ahead, especially for time like these, for college. i have to be a good saver now. >> reporter: suzanne pratt, "nightly business report," new york.

>> susie: deadline day for taxes is less than a month away. we're here to help you get through the paperwork. all this week, kevin mccormally editorial director at kiplinger's personal finance joins us with his best tax advice. in tonight's tax tips, kevin tackles deducting points paid on a mortgage. >> i want to try to clear up some confusion about the tax status of points paid to get a mortgage. when you buy a home, the points are fully deductible in the year of the purchase. if you paid two points on a $250,000 mortgage last year, that $5,000 can be written off on your 2011 return. but a different rule applies when you refinance. in that case, the points are deducted over the life of the loan, or just $167 a year in this example if its a 30-year mortgage. yet another rule applies if you are one of the growing army of serial refinancers, who refinanced a loan in 2011 that you had refinanced earlier to score an even lower rate. in most cases, any undeducted

points on the first refinancing can be deducted on your 2011 return, since 2011 was the end of the life of the first refinancing. but wait, there's more: if you refinanced with the same lender who handled the first refinancing, the as-yet undeducted points have to be added to the points on the new loan and deducted over its life. yes, it's complicated, but every little bit helps. when newt gingrich released his 2010 tax return earlier this year, it showed a $19 deduction for a portion of the points he paid to refinance the loan on a place he owns in wisconsin. i'm kevin mccormally. >> tom: that's "nightly business report" for monday, march 26. i'm tom hudson. goodnight everyone and goodnight to you too, susie. >> susie: good night, tom. i'm susie gharib goodnight, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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