captioning sponsored by macneil/lehrer productions >> ifill: new home sales are down, as are home prices, troubling signs that the housing market is still unstable. good evening. i'm gwen ifill. >> woodruff: and i'm judy woodruff. on the newshour tonight, we explore the aftermath of the mortgage meltdown as we launch a new series called "after the fall: what's happened since the financial crisis." >> ifill: then, we examine efforts to woo young voters this election year by both president obama and mitt romney. >> woodruff: we have two takes on immigration: from arizona, tom bearden reports on the state's tough new law facing a challenge at the supreme court tomorrow.

>> i wouldn't object to someone asking me if i was a u.s. citizen. >> i don't think there's any question that there will be vrabel profiling. >> ifill: and margaret warner looks at a new study showing fewer mexicans are entering the u.s., legally or illegally. >> woodruff: plus jeffrey brown talks with sculptor, dancer, and performance artist nick cave about his wearable art. >> i'm always sort of looking for a project that i can send in the world. i want to make people think in a magical, fantastical way. >> ifill: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: ♪ ♪ ♪

♪ ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> citi turns 200 this year. in that time, there have been some good days and some difficult ones. but through it all, we persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. >> 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. >> woodruff: the signs of strain were evident again today in the u.s. housing market. the latest numbers highlighted how tough it's been to fix a vital economic sector. tonight, we look at the housing news as we begin a series, "after the fall," on how wall street, the economy, and financial regulation have changed since the crisis of 2008. builders have been cutting back on housing construction, but in march, there were still more new homes for sale than people wanted to buy. the national association of realtors reports sales last

month fell over 7%, the most in more than a year. overall, some 328,000 homes sold, less than half the rate in a healthy market. and a closely watched index found home prices fell 1%, as well. they've been falling for six months in a row. overall, the data underscored just how much the housing market continues to struggle, four years after the mortgage meltdown. the bush and obama administrations both created programs to stem foreclosures, but they have come up short. one program designed to help four million homeowners refinance has led to just about 900,000 permanent loan modifications so far. president obama acknowledged the shortcomings in february. >> i'll be honest-- the programs that we put forward haven't worked at the scale that we hoped. too many families haven't been able to take advantage of the low rates, because falling prices lock them out of the market.

they were underwater, made it more difficult for them to refinance. >> woodruff: the republican presidential nominee-apparent, mitt romney, has dismissed the idea of a separate plan to fix housing. >> there's an effort on the part of people in washington to think somehow they know better than markets how to rebalance america's economy. the right course is to let markets work, and in order to get markets to work and to help people, the best we can do is to get the economy going. >> woodruff: meanwhile, a new wave of foreclosures is building. in february, about half of the 50 states reported sharp increases in foreclosure activity. with more than four million homes foreclosed on since 2007 and the housing market struggling, we assess efforts by the government and lenders to deal with the problem. andrew jakabovics is head of research at enterprise community partners, an affordable housing non-profit. he was, until recently, an advisor at the department of housing and urban development,

mark calabria is a former republican staff member for the senate committee on banking, housing, and urban affairs. he's now at the cato institute. and gentlemen, it's good to have you both with us. >> thank you. >> woodruff: mark calabria, let me start with you. did the programs that were instituted by the government under both president obama and president obama... president bush, did they address the problem? how much and how it will >> well, i'd say this is non-partisan because i do think the obama administration largely continued the same thing of the bush administration which to my extent was to put off the problem, to kick the can down the road in a lot of ways. i look at the fundamental issue of our housing market is a combination of weak demand and excess supply. so some of these things were aimed at keeping foreclosures off the market which would lower supply but ultimately they drove out the problem. you know, i'm of the opinion that if we had taken the 30% decline in six months rather than four years we'd be in a much healthier spot today.

so ultimately market fundamentals asserted themselves whether you wanted them to or not. it was really a matter of the speed of adjustment. >> and you're station measures taken by the government made the problem worse? >> in many cases i think they did. you encourage people to stay in place. i like to use my stylized example of if you're a carpenter in tamm be, you're not going to find a job there any timesoon, that market is way overbuilt but if you have a situation where you can be in that house for potentially two years or more without paying rent and getting unemployment insurance you have very little incentive to maybe move to austin or atlanta or dallas or somewhere creating jobs. so to some extent these programs have put our labor market in limbo and i think that's been detrimental. i also think you've kicked the can down the road. almost half of foreclosures today are people who were previously in foreclosure at some point in the past. so i think you need to separate out the home buyers we can help from those who we can't help and speed that process along. >> woodruff: andrew jakabovics,

how do you see it? >> i think mark's analysis, that the problem is oversupply and weak demand is right. but i think that the efforts that have been made to date certainly have fallen short of what i think have been needed to really restore the market to its normal health. but by and large we're better off today with those programs available than had we let the markets fault. i think we've had overcorrection and the spillover effect. a foreclosure doesn't just impact an individual it impacts their neighbors; it impacts their communities and understanding what that does to the prices more globally on a single foreclosure and then concentrated foreclosures, those impacts are significant. >> woodruff: what are a couple examples of where you think it's worked? >> i think fact... we haven't really talked about policy much. we talk a lot about the modification programs. we talk about the refinancing opportunity.... >> woodruff: making it easier for people... >>... to make their mortgage payment. reducing the home modification program. borrowers who apply have to

demonstrate hardship but an ability to make payments at least at 31% of their income so it's not a freebie by any stretch of the imagination and unfortunately the way it's been execute leaves a lot to be desired. it's hard for folks to get the assistance. >> woodruff: but on balance you think it's better having had these programs. >> judy, if i could make two points. one is the simple question of did we stop more foreclosures than we would have had otherwise? this is not a difference between whether we had this foreclosure, we just don't know the answer. my suspicious is the vast majority of foreclosures were going to happen otherwise. but what concerns know go back to my supply question is what... when a home is 30%, 40%, i remember these stories where people were like "i'm going to build underneath the foreclosure point." my point is if you put efforts to keep prices up, you encourage more construction by builders which actually in the long run adds to the glut so you end up with more supply than you would

have. you want prices to get below construction costs so you can encourage those and i they in recognition that constructions have been at historic lows but they've still been quite positive. >> woodruff: what more... do you want to respond to that? >> i think we are at historic lows and it's a correction whereof the construction has been taking place. not all markets have been hit equally. there's no new construction because the supply of unsold newly constructed homes as well as just the available property that have been through foreclosure or individuals who want to just put their home up for sale to take advantage of low interest rates or move some place else as well. >> woodruff: what have you mean? the behavior of banks and with lenders. what's changed in the last few years? >> i certainly think that when the crisis hit the way they approached borrowers who were delinquent was one of just debt collection. borrowers were deadbeats. the language has significantly changed. it used to be about how do we squeeze every last drop out of a

borrower and now the mind-set is loan modification how to work with the borrower to keep them in their home. the consistent theme, at least the way the administration has rolled out its programs has always been with the sensitivity to what the value of the property is at the end of the day, the value to the investor. so i'd love to have seen greater assistance to homeowners but within recognition of the fact that at the end of the day there are existing contracts and we need to respect the investors. >> reporter: for example writing down the principle. that wasn't talked about until much more recently. >> right. i would have liked to have seen that far earlier on in the policy conversation. i think it's a very powerful tool that can right-size the mortgage market, squeeze out the excess pricing and really to the extent that it encourages people to stay in hair homes and make their payments can be a powerful tool. >> i fully agree that our system prior to crisis was really set up to be a foreclosure system. it was not a loss mitigation system.

originate a loan, sell it to the mortgage backed security. so it was not set up in that way. if you go back to pre-the s&l crisis when you had a deposit based system, you went to your local lender and got a loan, you talked to them, they weighed your situation, sometimes you got a modification so i think one of the things we need to keep in mind going forward when we look at what our mortgage finance system should be is that the advantages of the deposit system give you more flexibility to do modifications than the securitization system we've embrace sod i think we need to question whether we want to have a mortgage system so reliant on securitization in the future. >> woodruff: let me ask you both just to conclude by looking ahead. where do you see the housing market headed right now? mark calabria, do you see people want who want to buy a home having the option of buying their home? >> caveat that. if you have good credit and you can put a down payment, otherwise f.h.a. is the only other option for low down payment and they have increased

their standards so at this point in time i think that there's a lack of creditability for marginal borrowers and some of the credit.... >> woodruff: but we see that changing. >> not a lot, honestly. i think credit availability is going to be a problem. i think it's going to moderate a bit. i also think we're getting close to hitting bottom in prices. we have another like maybe two or three percentage price over the year but i think we're getting near bottom. >> woodruff: andrew jakabovics, how do you see the future? >> we're bouncing along the bottom but the issue of credit availability, particularly in places that have been hard hit by foreclosures, there's not a lot of ability for someone who wants to buy to come in simply because of the tight credit. folks who can get the credit can choose places where prices have fallen significantly and get k get into fancy houses at much lower costs than they could have. sow so the places really hard hit are continuing to struggle. >> woodruff: i have a feeling people are going to be hanging on every good poll positive

syllable. >> and keep in mind that despite the comments of the federal reserve, mort garage rates are as low as they're going to get. they're not going to stay low forever. >> woodruff: mark calabria, andrew jakabovics, thank you. >> thank you. >> ifill: our series, "after the fall," accompanies a four-hour "frontline" investigation into the financial crisis called "money, power and wall street. " the report examines, among other factors, how the housing bubble and bust helped trigger the crisis. a case in point-- the sudden collapse of the investment bank bear stearns, and the government's decision to help save it. here's an excerpt narrated by will lyman. >> reporter: they've become known as toxic assets. >> they were big in mortgaging them, packaging them, creating securities out of them, buying them. >> the road to riches for bear

was simple: buy hundreds of thousands of subprime mortgages then bundled and sell them to investors. but now the party was over and bear was spiraling out of control. >> it was nothing short of surreal. you're watching on cnbc, et cetera, they're talking about where you work. >> the only bank in the read, bear stearns, although it's dragging other financial markets down as well. >> the stock was in freefall and the cash reserves were shrinking. >> stocks started to go down, more and more people called up and said "i want my money out" or "i won't trade with bear stearns" and they completely unwound. >> nearly bankrupt, the top brass at bear called wall street superlawyers. >> it became clear that they were having serious funding difficulties and it had very

clear to me 6-that an investment bank has a very short life span after it loses its liquidity. >> he made an emergency call to tim geithner, the president of the new york federal reserve. >> geithner understood that it was a vulnerable situation he said something like "believe me, i'll be on it." and that was really the phone call. >> geithner's was bear's last chance. >> tim geithner is at the federal reserve bank of new york. it's the epicenter of the financial system. he is supposed to be the fed's front line general, field marshal in the financial markets >> he's 47 years old, looks like he's about 32. extremely smart, extremely aware of the stuff. very discreet, controlled.

>> geithner realized he needed to know how bad bear's books looked. he dispatched a swat team of investigators of the federal reserve to bear's headquarters. >> tim geithner is frantically involved in trying to figure out what's going to happen if bear melts down and how you need to prevent it from going into freefall and dragging down the rest of the financial sector with it. >> by midnight, by 1:00, 2:00 in the morning everybody and their mother has teams at bear. morgan, the fed, the s.e.c. and they find out bear is stuffed to the gills with toxic waste. >> bear was party to complicated financial deals. >> nobody understood how subprime mortgages had proliferated through these things called credit default swaps and nobody understood how they'd gotten into the blood of the financial system.

>> geithner learned bear had made credit default swap deals worth trillions of dollars all over wall street and around the world. >> because bear stearns was so indebted to so many other people their failure to repay their debt or pay their debt would cause a cascade of other failures. >> geithner saw what central bankers fear most: systemic risk bear was frighteningly interconnected with other banks up and down wall street. >> no one knew what would be the ramifications which other institutes were exposed. which other institutions would suffer runs. >> bear stearns, geithner concluded, was too big to fail. a bankruptcy could underheine confidence in every major wall street firm:. >> woodruff: "frontline" airs tonight on most pbs stations.+ w0 35 ]] c2.5 g 0 [[

>> woodruff: still to come on the newshour: courting the youth vote; assessing arizona's immigration law; reversing a trend on border crossings; and melding art, dance and fashion. but first, the other news of the day. here's kwame holman. >> holman: three more secret service agents have lost their jobs over a prostitution scandal. the secret service announced late today said two agents have resigned, and one was fired. in all, nine have now been forced out and three have been cleared. they allegedly got involved with prostitutes in colombia before the president's recent trip there. today, mr. obama blamed what he called "a couple of knuckleheads" for the scandal. wall street turned in a mixed performance today. blue chips fared well, as at&t, verizon and others posted strong profits. the dow jones industrial average gained 74 points to close at 13,001. the nasdaq fell nearly 9 points to close at 2961. the justice department filed the first criminal charges today related to the 2010 gulf oil spill. a former engineer with b.p. was

arrested on two counts of obstruction of justice. he allegedly deleted more than 300 text messages with sensitive information on failing efforts to cap the well responsible for the spill. u.n. special envoy kofi annan leveled new accusations today against the government of syria. an annan spokesman said the regime has failed to withdraw heavy weapons from cities, as promised. and he said, authorities are subverting the efforts of u.n. observers. >> they are entering areas where there has been conflict like homs and hama, and when they go, the guns are silent. we have credible reports that when they leave the exchanges start again, that these people who approach the observers may be approached by security forces or syrian army and harassed or arrested or even worse. perhaps killed. >> holman: meanwhile, the syrian state news agency said three intelligence officers were

killed across damascus today. the reports also said a bomb hidden in a syrian army truck exploded in a main square in the capital, wounding three people. a pro-government tv channel blamed "armed terrorists". the ruling military in egypt has barred top officials who served president hosni mubarak from running to replace him. the decision today ruled out ahmed shafiq, who was mubarak's last prime minister. another top mubarak lieutenant and the two main islamist candidates already had been disqualified. the election is next month. the son of media mogul rupert murdoch faced a new grilling today in a media ethics inquiry in britain. james murdoch claimed again that subordinates kept him in the dark about hacking into cell phones when he headed the family's british newspaper chain. the inquiry also unearthed evidence that senior conservative lawmakers helped the murdochs' bid for a satellite broadcaster. the bid was withdrawn when the scandal erupted. those are some of the day's major stories.

now, back to gwen. >> ifill: as they move to boost enthusiasm for the general election, president obama and likely republican nominee mitt romney have each stepped up their efforts to woo young voters. ( applause ) the president's visit today to the university of north carolina chapel hill was billed as an official white house policy speech. but as the president heads to a string of campuses this week, he is also clearly courting the young voters who rallied for him four years ago. today's message, tailored for his audience, was a pitch to hold down the cost of student loans. >> no matter what it is, no matter what field you're in, you're going to have to engage in life-long learning. that's the nature of the economy today, and we've got to make sure that's affordable. that's good for the country, that's good for you. at this make-or-break moment for the middle class, we've got to make sure you're not saddled with debt before you even get started. >> ifill: unless congress acts by the first of july, tuition loan rates could double for more

than seven million students. republican mitt romney, breaking with some in his party, has also urged congress to extend the lower rates. but campaigning in pennsylvania monday, he said younger voters have broader concerns that extend beyond the cost of college. >> i think young voters in this country have to vote for me if they're really thinking of what's in the best interest of the country and what's in their personal best interest, because the president's policies have led to extraordinary statistics. when you look at 50% of the kids coming out of college today can't find a job, or can't find a job consistent with their skills, how in the world can you be supporting a president that's led to that kind of economy? >> ifill: romney campaign officials say young people have been hurt under the obama administration, with an unemployment rate of 16.4%, double the rate for all americans. polls show the president enjoys a wide margin of support among young voters.

in 2008, mr. obama carried 18- to-29 year olds by almost two- to-one, and a recent nbc news/"wall street journal" poll gave him a 60% to 34% advantage over romney among voters 18-to- 34. but some of that enthusiasm has waned. just 45% say they have a high interest in the fall election, down from 63% from four years ago. a separate harvard university study underscored how youthful support could shift by november. fully 30% say they are undecided. we have two views on how the campaigns reach out to young voters this year and how strategy has changed since 2008. patrick gaspard is the executive director of the democratic national committee. and alex schriver is chairman of the college republican national committee. welcome to you both. so you saw this long gap, alex schriver, how do you close this gap? we're saying president obama leads mr. romney 61% to 33%.

>> well, i think's a misconception out there that the democrats have a lock on young voters. that's not true. republicans have won the youth vote three times in the modern era, tied it twice more. 2008 was an anomaly, obama won the youth vote 2-1. we've seen the number come back in the midterm elections in 2010. there are eight million new voters that have come of age since 2008. these are young people who saw their older brothers and sisters get caught up in hope and change in 2008 and are sitting here three and a half years later not better off. so as this election continues and as our candidates on the ballot can talk about jobs and the economy, as you heard, that i ear 16% unemployment among young people in this country. half of my generation didn't get up and go to a job this morning. those are numbers that affect young people so when they get to that ballot box in november that's what they'll be voting on and we're confident they'll come to our side. >> ifill: does that, patrick gas part, seem to be fading enthusiasm in 2008? i saw only 5% of young voters

showed up on super tuesday, the big election. >> well, of course, super tuesday was dominated by the republican party and there's been a tremendous lack of enthusiasm for that entire field including for the front-runner in the party, mitt romney. i will remind your viewers in 2008 we were in the midst of a historic primary contest between senator obama and then senator clinton and there was an intense reaction amongst young people to the eight years of george w. bush. clearly we're not engaged in such a primary on the democratic side but we are seeing a tremendous amount of enthusiasm across the country in campuses, every time we have conversations about the things that this president has done to help move young people up the economic ladder. for instance, when we go out, young people know that this president doubled the size of pell grants and the number of pell grant recipients in this country. they are rightly proud he made good on his commitment to pull us out of the combat mission in iraq, which was a compelling issue for young people at the time and they are also thrilled that this president has made it

possible for 2.6 million young people to continue to be on the health insurance of their parents which is tremendously important in these tough economic times. >> ifill: what about those unemployment numbers. twice as many young people... >> governor romney and now alex cited a report that has some dubious statistics. i'd remind everybody that for... >> ifill: bureau of labor statistics. >> actually, the bureau of labor statistics made it abundantly clear for college graduates who are 24 years old, unemployment dropped three percentage points for young folks. so i think it's clear that we have a ways to go yet in this country and americans are still struggling through what was the greatest recession since the great depression but we all should remember where we've come from and where we're headed. >> ifill: alex schriver, what about the issue that governor romney and president obama agree on, this issue of tuition costs. we know by all means all these young people we're talking about aren't in college does that resonate? >> there's one trillion of student loan debt in this

country. that's more than credit card and auto loan debt combined and how both parties face that will be incrediblebly important. the average student owns $22 you saw governor romney come out in support of a temporary extension on the interest rate subsidy. >> ifill: how do you pay for it? >> that's why you've seen dissension among republicans and the media want toss paint a difference between governor romney's position and house republican leaders. i don't think there is a difference. it's about having a responsible plan to pay for this. this is a $6 billion subsidy and one side of the aisle says we can do that that our job rate is so low that we need to find a way to help young people for a temporary amount of time and another side says let's continue this on and on. this bill in 2007 that then senator obama missed two key votes on. it's only come up in an election year, temporary solution, to get him reelected and that's what we've seen over and over. >> gwen, i think alex is right this is a moment of crisis and therefore an opportunity for real leadership from both parties and it's great to hear

that governor romney supports this extension. however let's also be clear that he's embraced the ryan budget which slashes pell grants and locks in the 6% interest rate for college loans. so i think there's a bit of contradiction in governor romney's current position and to your point, alex, of course senator obama, senator clinton and senator biden and senator dodd all missed that vote in 2007 because they were engaged in that campaign but young people know this is a president who's increased student aid and he's done all he can right now to make certain that they have opportunities. >> ifill: right now you have a lot of young voters saying "i don't know if i'm going to vote at all. i'm not moved by this." what do you do between now and the fall to make numbers break for the republicans? >> it's about coming together hind a candidate at the top of the ticket. we're just getting behind our primary process. it looks like governor romney will be our candidate. i've been encouraged as the leader of the nation's oldest and largest youth political organization, 250,000 members on 1,800 campuses.

to see the efforts of governor romney and other candidates running for senate and house to reach out to young voters. one thing we saw in 2008 was how important the youth vote was. they made up 17% of the electorate in 2008. that's up from 14% in 2004 so this is a demographic that's going to receive attention from both sides and as long as we continue to spread our message of jobs and the economy which, by the way, is the number one issue, 75% of young people, that we're confident there will be enthusiasm, they'll see the effectss of the last three and a half years in this administration, that it's had on them personally and come out enthusiastically for republican candidates and governor romney. >> ifill: so the enthusiasm will cut the other way this time. you pointed out it was a once in a lifetime for a lot of people, historic event four years ago. how do you get people to say "whatever, we tried that, now i feel worse, i feel like i'm still living in mom's basement." >> gwen, as you noted at the top of this report there continues to be quite a gap between support for president obama and support for governor romney amongst 18 to 29-year-olds. that's because young people working with this president have accomplished a great deal from

the repeal of "don't ask, don't tell" to the end of the combat mission in iraq to passing critical health care and the passage of student loan reform. so i believe that young people who have worked with us every step of the way to get us on the path to meaningful lasting reform and change are going to show up in november to reaffirm their own hard work, their accomplishments and... >> ifill: it's what you would like to see. but here's a real world example. ron paul brought a lot of young people out this year. they came to his rallies, they're still coming to his rallies, yet he hasn't won a single primary. are we talking about voters who are excited but not actually voting? >> governor romney was able to win the youth vote in florida and nevada. he's done so since. those are competitive primaries in a crowded field so to say governor romney can't connect with the youth is inaccurate. congressman paul has run a successful campaign in getting new supporters out and we feel they're coming out, listening to the conservative message, listening to republican candidates who will come to us

as well and governor romney, too. >> gwen, in 2008 we had a tremendous amount of youth activity and, as i said, a lot of that was in reaction to eight years of george w. bush but i think that right now young people are going to make decisions based on substantive issues, they care about who's fighting for them on education, health care and on, of course, job creation and i think at the end of the day as they aay says what this president has done and the plans that he's laid forth to grow this economy and instill ago measure of fairness into our economy, they contrast that to governor romney's record in massachusetts and his adherence to the tea party code and the ryan budget that they'll end up making... casting a vote for president obama. >> ifill: we col come back year and see how that's going for either of you. patrick gas part of the democratic national committee and alex schriver, college national republicans, thank you very much.

>> woodruff: and to our two-part look at immigration. on the u.s. supreme court docket wednesday is a tough new law in arizona. newshour correspondent tom bearden traveled there recently and sets the scene for tomorrow's arguments. >> reporter: daniel bell's family has raised cattle on this land along arizona's southern border since the 1930s. but in the past few years, he's had to repair the simple barbed wire fence that separates the u.s. from mexico more and more often, because the steady stream of people entering the country illegally are always cutting it. >> so this is a common occurrence out on the ranch. >> reporter: do you ever get mad about this? >> it gets frustrating, it definitely does. >> reporter: bell says the ranch has become a much more dangerous place, too. do you fear for your life out here? >> yeah. when we're out in places like this where we don't have communications, you're always thinking, "what am i going to do if something happens?" >> reporter: have you ever come across armed people coming across the border?

>> yes, i have, on several occasions. most recent one was when we built this fence. we were hauling material in with a mule and came around on a trail that's used by smugglers, and ran right into a group of about ten people. the first one was carrying a long arm, an ak-47. >> reporter: an assault rifle? >> an assault rifle, yes. >> reporter: that massive fence down there is one of the reasons why so many illegal migrants are crossing over the border ranchlands. when the federal government put it up, it forced them to move out into the desert. and what happened after that is one of the reasons why the state legislature passed the law that the supreme court is now reviewing. rancher robert krentz was murdered on his land in march 2010. some authorities suspect he was killed by an illegal immigrant, but the case remains unsolved. >> i'm tired of those folks who simply advocate we don't enforce our laws. i'm tired of those folks who simply ignore the damage to america, and the deaths of folks

like rob krentz. >> reporter: former state senate president russell pearce authored the bill. >> what's coming across that border today is gang-bangers, drug smugglers, human smugglers, child molesters, bad guys. they live in fear of their lives. their water lines are cut, animals slaughtered, dogs throats are cut, their fences are torn down. some of them have their homes boarded. they pray for daylight. if they hear noises, they don't dare come outside. >> reporter: governor jan brewer signed the bill into law two years ago. its often referred to as senate bill 1070. the law makes it a state crime to be in the country illegally or to seek work while here. it requires local law enforcement to verify the citizenship of anyone they suspect might be undocumented. and it gives police the authority to make warrantless arrests in such situations. those key sections were blocked by a federal judge, after the justice department sued, arguing that "for each state to set its own immigration policy would

wholly subvert congress's goal, a single national approach." and that's the question before the supreme court now-- whether federal immigration law preempts the state of arizona from making its own rules. that argument doesn't sit well with phoenix resident connie liston, a supporter of the law. >> i wouldn't object to someone asking me if i am a u.s. citizen. when i come back from mexico every trip, they ask me that question. i don't think it should offend anyone. >> reporter: about two-thirds of arizonans supported senate bill 1070 when it was first passed, and polls show the same numbers continue to support it today. but its a complicated picture, says bruce merrill, founding director of the survey research center at arizona state university. >> there's two very strong components. one is the border itself. 75% to 80% of the people in arizona really want more done to keep people from coming across the border.

but the issue is what do you do with the families who have been here 25 to 30 years? about one-third have children that are u.s. citizens, and should they be allowed to stay here and be given a path to citizenship? 65% of the people in arizona feel that these families should be given an opportunity to gain citizenship. >> reporter: families, perhaps, like sandra's, who spoke to us on the condition we use only her first name. you came across the border without papers? >> si. >> reporter: sandra entered the u.s. illegally 18 years ago with her four children, seeking medical care for a son with special needs. >> ( translated ): not all the illegals are the same. it depends on why were here. many of us come here to work, to study. >> reporter: sandra says s.b. 1070 terrified undocumented workers. you said you lived in fear. what did you mean by that?

>> ( translated ): it's a feeling that's always there. it's a fear that's always there. in the morning, when we go to work, we always say good-bye, thinking that maybe we won't see each other. always, every single day, we leave with that thought, that maybe we won't be back home. >> s.b. 1070 has created ongoing human tragedy. >> reporter: petra falcon runs an immigrant rights group that opposes the law, and works with families like sandra's every day. >> what is happening since s.b. 1070 is that families continue to be stopped on the road, and that leads to incarceration, that leads to separation of families, to deportation. people cannot find work because it's assumed they don't have papers. >> reporter: arizona's undocumented population has dropped sharply in recent years. it's unclear how much of that is due to the law, the downturn in the economy, or some combination. not everyone is sympathetic.

>> the last i heard, coming into the united states happens to be illegal. >> reporter: joe arpaio is the sheriff of maricopa county. he holds prisoners detained on immigration charges in tents, exposed to the extremes of arizona's weather. >> ( translated ): in a little while, the heat is going to average 110 degrees, and the heat accumulates. at night, it's a hellish cold. >> reporter: arpaio is known for his get-tough attitude toward crime, including his color of choice for prisoners. >> the pink underwear, as you can see, it matches the sheets. you know what, you don't like it? don't come to jail. very simple. >> reporter: the 79-year-old sheriff says he'll continue to enforce all of the provisions of senate bill 1070, no matter what the supreme court decides. >> i'm still going to do what i'm doing, i'm still going to arrest illegal aliens coming into this country. i'm still going to raid businesses. still going to crack down on crime suppression operations. >> reporter: arpaio is currently under investigation by the

justice department for alleged racial profiling. that's something president obama has said is a potential risk when it comes to enforcing s.b. 1070. >> suddenly, if you don't have your papers and you took your kid out to get ice cream, you're going to be harassed. that's something that could potentially happen. >> reporter: the sheriff of santa cruz county, tony estrada, shares that concern. they asked me, "will you enforce s.b. 1070 if it becomes law?" my response is, "i will, i have a responsibility to do that." but it's going to be at the bottom of my priority list because i cannot afford it. >> reporter: the administration touts the fact that illegal crossings have decreased on president obama's watch. border patrol agents apprehended some 340,000 migrants in 2011,

down from a peak of over a million in 2005. but russell pearce, who lost his state senate seat in a recall election last november after taking criticism as the author of s.b. 1070, says that's not good enough. >> crossings are down for a lot of reasons at the border. one is that arizona has gotten better. we do have more border patrol there. but the violence is up. and what's going on across america, it's a national crisis. the administration... and i'll tell you, there's a lot of misinformation about what they've done. they've done very little. >> reporter: back on the front line of this issue, dan bell and his ranch hands spend time and money cleaning up the debris left behind by the steady stream of border crossers. >> there's a blanket, water bottles, all kinds of things. and each little canyon we go up, you'll find trash just everywhere scattered out. >> reporter: even so, bell isn't convinced that s.b. 1070 is the answer. >> i think if you're looking at

the metropolitan areas where someone gets pulled over and can't produce a license, that's where s.b. 1070 would kick in. but right here on the border, i don't see where it'd do us any good. >> reporter: justices are expected to issue their decision by late june. >> woodruff: online, you can see an impromptu encounter between sheriff arpaio and one of the inmates in his jail. in washington today, senator charles schumer said democrats will introduce legislation to block arizona's law, if the supreme court upholds it. meanwhile, five states have passed laws modeled after arizona's. federal judges have blocked all of them from being fully implemented, pending the high court's ruling. attorneys general in 11 more states have filed a friend-of- the-court brief against arizona's law, siding with the obama administration. we'll have full coverage of the supreme court arguments tomorrow. >> ifill: the immigration debate cuts both ways. as tom mentioned in his story,

illegal border crossings are actually down. that's one fact documented in a new study. margaret warner has more. >> warner: that new study is from the pew hispanic center, and its findings are surprising. between 2005 and 2010, the wave of mexican immigrants, legal and illegal, into the u.s. was offset by an equal number of mexican migrants returning home. this new equilibrium partly reflects lower mexican immigration into the u.s., from 770,000 at its peak in 2000 to just 140,000 in 2010. but it also reflects an increase in the number of returnees to mexico, some 1.4 million between 2005 and 2010. for more on the numbers and what's behind them, we go to jeffrey passel, a senior demographer at the pew hispanic center and a co-author of the report. welcome. this is a fascinating report. >> thank you very much.

>> warner: now, you've been studying immigration in the united states for decades. headline on this "net migration from mexico falls to zero, perhaps less." did you ever think you'd live to see this? >> it's a real surprise. the numbers have been just steadily going up for 40 years. year after year and that was question of how much we got to over 12 million mexicans living in the united states in 2007, that's the largest wave in history, really. more than we've had for many other countries and more than any other country has immigrants at all. >> pelley: throughout the century. >> yes. >> warner: well, let's look at the trends separately. first, the dramatic drop in the inflow. what's behind that? >> well, we've seen... when we've looked at the numbers year by year we see a lot of relationship between the state of the u.s. economy and the inflow from mexico so the peak

in 2000 was very low unemployment, very large job creation and lots of mexicans were coming into the country. as the economy got better, the numbers went up. we hit a recession; the numbers went down some. in 2007 they started dropping off. >> but is the economy better in mexico? >> in general it hasn't been. they, too, suffered from the recession. but in the last couple years it has gotten better. there are a lot of factors that work here enforcement makes a difference as well. we seif seen the numbers increase over some periods where enforcement went up. enforcement has hit very high levels in the past couple years. when you put the together factors together, it's more expensive, it's more dangerous, it's more difficult to get in

and if you can't get a job in the u.s. thing you may just not try and that seems to be behind these numbers. >> warner: you also pointed out because of the declining birthrate in mexico you also over time are getting a smaller pool of young men. >> we're at the very beginning of that. >> warner: so that hasn't affected it yet? >> it's started a little bit. mexican fertility was seven children per woman in 1970. it's now down 2.4 children per woman. >> warner: boy. >> and as a result beginning in the mid-'90s the number of births each year got smaller. those are now the people starting to enter the labor force so there's not as many next year as there were this year and so on and that's going to play out in the future but we're right at the beginning. >> warner: so let's talk now about the other finding which is the greater number of returnees back to mexico. who are they? something like 1.4 million, i think i said in the intro in the

last five years. who are they and why are they going back? >> well, that was a big surprise to us. it's a result that showed up first in the mexican census. about half of these are entire families moving back. they're not moving back in with amorelloive thes, they're not going back into existing households, they're setting up their own households. so they're families with children. about 300,000 of them are actually children who were born in the united states to mexican immigrants. so those people are citizens of both countries. >> woodruff: so they have every right to stay here yet they're going back. >> well, they're children. they're children. >> warner: oh, i see, grown children? >> no, no, a couple hundred thousand are under five. so it's families going back now. >> warner: how much of the return is driven by deportation-- involuntary return. >> well, some, it's a number that's very hard to tease out of

the available data. we put a rather wide range on it. maybe as little as 5% but as much as a third of the migration back might be involuntary. the enforcement from the federal government has increased over the last five or six years and larger numbers of people are being deported back. >> i know you're not the prediction business but we saw great waves of german and irish immigration over a century ago tail off. do you think this is long lasting enough trend that it really represents the tailing off of the great we have a of mexican immigration? >> well, the demographic factors we we are talking about are such that as we go into the future there won't be as many potential migrants to come into the united states. i don't think we'll ever get back to the levels we saw in 2000. i doubt that we'll get no immigrants but i'd be very

surprised if it ramped up in the future. >> warner: well, jeffrey passel of the pew hispanic center, thank you very much. >> thank you. >> woodruff: finally tonight, an artist who takes the sights and sounds of his work out onto the streets. jeffrey brown has our story. >> brown: it wasn't your typical texas "stampede" through the streets of dallas recently. these "horses" -- actually, students at the university of north texas-- are the creations of chicago artist nick cave. cave calls them "sound-suits", for obvious reasons... part sculpture and part costume, reflecting his desire to meld art, dance and fashion. >> we tend to want to categorize or put something in its place in order for it to make sense.

i don't think my work can really be put into any particular category. so you're sort of forced to ask, "what is it? what am i encountering at this very moment?" >> brown: you like it when people say, "what is that?" >> you know, yeah. "what am i engaged in?" >> brown: cave's creations have been exhibited all over the world, sometimes set in place as traditional sculpture... sometimes fully alive and in motion, out of museums and into the streets, surprising and provoking passers-by. >> i'm always looking for projects that i can put out into the world and into the public sphere and somehow cause an effect. i want to be able to create projects that are going to make people think in this sort of magical, sort of fantastical way. >> brown: nick cave was raised by a single mother in central

missouri, part of a large family of very modest means. he says that may have actually helped spark his early interest in clothing and fabric. >> growing up with, you know, seven siblings-- all boys one year apart-- when clothing was handed down to me, i needed to somehow alter, change it to where i thought that it was my own. what is the message you're trying to say in the garment? >> brown: he went on to formally study art in kansas city, and dance, including a stint with an alvin ailey training program. he's now a professor at the school of the art institute of chicago, teaching fashion, sculpture, and performance art. as to the sound suits, they came into being first as a response to what cave saw as injustices in cases of racial profiling, the demeaning of people based on how they look. >> i started thinking about the role of identity, being racially

profiled, feeling devalued, less than, dismissed. and i happened to be in the park this particular day, and looked down at the ground and there was a twig. and i just thought, "well, that's discarded, it's sort of insignificant." so i started gathering the twigs, and before i knew it, i had built a sculpture. >> brown: today, the suits are highly detailed and elaborate affairs, fabricated by a team of assistants at cave's studio on chicago's south side. >> these are the artifacts and tchotky's that i use in my work. >> brown: most of cave's creations are constructed from cast-offs. he has a storage room packed with objects picked up at flea markets and thrift stores that are then re-purposed. >> this is a piece that is worn from the shoulders up, and it's

made of noisemaker toys. this is what my head feels like most of the time, ideas coming out. >> brown: the finished products end up museums, but also in schools... >> how does this feel? >> it feels good. >> brown: ...where cave regularly works with high school students like these at stephenson high in the chicago suburbs. cave provides the sound suits, the students create the choreography what was it like when you first put on the sound suit? >> it was an out-of-body experience. >> brown: how's that? >> well, you put on this costume and you become this thing, this animal. >> brown: part of this is about losing your identity, right? >> exactly. >> brown: so, who are you? >> my name is hannah. ( laughs )

>> brown: for cave, the "art" comes precisely from this interaction of personalities, the sound suit and the human who inhabits it. >> i look at it as an open canvas. i'm going into that school, and the entire school is just like a white piece of canvas, and i'm going in to make a project happen through the collaboration and support of the student body. ♪ ♪ >> brown: fresh off the dallas "stampede", cave's next major exhibition of sound suits will be in lille, france, this fall. >> ifill: again, the major developments of the day: there were fresh signs of trouble in the housing market, as new home sales and home prices fell in march. and the secret service announced two more agents have resigned and one has been let go in the wake of a prostitution scandal.

online, there's more on the latest housing numbers. kwame holman explains. >> holman: use our an interactive graphic to find home prices in major u.s. cities. that's on paul solman's "making sense" page. on our world page, our pakistan series continues as we interview an opposition politician hoping to become the country's next prime minister. plus on "art beat," see more of nick cave's sound suits. all that and more is on our web site, newshour.pbs.org. gwen. >> ifill: and that's the newshour for tonight. on wednesday, we'll look at wall street after the financial crisis. plus, the results from tonight's primaries. i'm gwen ifill. >> woodruff: and i'm judy woodruff. we'll see you online, and again here tomorrow evening. thank you and good night. >> major funding for the pbs newshour has been provided by:

>> citi. supporting progress for 200 years. 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