>> tom: new proof that an economic recovery remains out of reach: a record number of americans are living in poverty. >> i think, really, the fundamental question for you is not how we got here, but where you want the country to go. >> susie: it comes as congress' super-committee gets a dose of reality at its first public hearing. it's "nightly business report" for tuesday, september 13. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. nearly one in six americans, or 46 million people, live in poverty. that startling number comes from a census report released today. it's more than 2.5 million more people than in 2009. >> susie: tom, that's the fourth straight increase, and the largest number of people living in poverty since record-keeping began 52 years ago. the report is also a reminder that all the efforts to jumpstart the economy are not helping the nation's poorest people. today's number represents just over 15% of the country.

that's a nearly 1% jump from 2009. the government defines the poverty line as income of $22,000 a year for a family of four, and $11,000 for an individual. >> tom: when viewed all together, the numbers represent the severe and widespread financial strains in the u.s. steven ullman of the university of miami says the data has all kinds of ramifications for the economy. >> it means people are going to have growing history associated with making ends meet, and being able to afford rent in terms of housing for their families. being ability to afford to put food on the table and access to health care becomes that much more problematic. >> tom: the same census report shows millions of americans are going without health care coverage. nearly 50 million americans do not have medical insurance. that's more than 16% of the population, statistically the same as the year before. congress passed a health care overhaul last year to deal with rising numbers of uninsured,

though many of the main provisions won't take effect until 2014. >> susie: a one-two punch on the deficit as the so-called super committee held its first public hearing in washington. first, data out today shows the federal budget deficit reached more than $1.2 trillion last month. that number adds pressure on washington lawmakers to reach agreement to trim government spending. the second came from the head of the congressional budget office. he warned the super-committee that the federal deficit threatens to cripple the u.s. economy over the long term if it is not dealt with soon. darren gersh reports. >> reporter: the lawmakers charged with coming up with $1.2 trillion in deficit reduction held a public hearing today on the history and drivers of the deficit. the star witness gently suggested that was not really the issue confronting the so-called "super committee." >> i think, really, the fundamental question for you is not how we got here, but where

you want the country to go. >> reporter: douglas elmendorf, the director of the congressional budget office, said the deficit problem really comes down to what role the federal government should play in the economy. >> and if you want a roll that has benefit programs like the ones we've had in the past and operates the government like the ones we've had in the past, then more tax revenue is needed than under current tax rates. and the other hand, if one wants those tax rates, then one has to make very significant changes in spending programs for older americans or other aspects. >> reporter: members of the committee largely seemed locked in the same debates they have been having for the last nine months. republicans pushing to cut spending... >> a path to credible deficit reduction is a jobs program, and we should not be deterred in that mission. >> reporter: ...democrats to preserve spending, blaming much of the current deficits on bush- era tax cuts. >> we need to ask ourselves, was it the senior citizen, the student, or the wall street banker who received the benefit of the spending binge?

>> reporter: the c.b.o. director offered a compromise way forward. his agency says the best medicine for the economy is clear. >> the combination of fiscal policies likely to be most effective would be policies that cut taxes or increase spending in the near term, but over the medium and longer term, move in the opposite direction and cut spending or raise taxes. >> reporter: but no signs today that either side is willing to compromise to get there. darren gersh, "nightly business report," washington. >> tom: shares inched higher as investors kept an eye on the latest developments regarding europe's debt worries. german chancellor angela merkel is rejecting the notion that a greek bankruptcy would provide a quick solution to the eurozone debt crisis. the possibility was raised yesterday by her deputy. the dow added nearly 45 points, the nasdaq rose 37, and the s&p 500 up ten points. big board volume continues to hold firmly above a billion shares while nasdaq volume

slipped below two billion. >> susie: july 2012 is d-day for the nation's biggest banks. that's the deadline for giving regulators a plan on how they would break up and sell off their assets if they are in danger of failing. the federal deposit insurance corporation, or f.d.i.c., approved the rule today. bankers are calling these plans "living wills." under the new law, the largest banks and financial firms, like citigroup, j.p. morgan and goldman sachs, would be required to outline liquidation plans so regulators could shut them down in an orderly way to avoid damage to the financial system. so what kind of shape are the nation's banks in? our next guest is a long-time banker and c.e.o. of bank united, john kanas. >> nice to have you on the programme again. >> susie: let me start off with asking you. how would you describe the health of the banking system. wherther it's the super big banks or smaller banks.

>> statistically they're in better shape than they were four or five years ago. all the metrics used have improved. capital is higher. reserves against non-performing loans are higher than they were in 2007. >> so in terms of sheer strength of capital they're stronger than they were. since the flagging economy is having trouble, banks are having difficulty expanding balance sheets and finding opportunitys to make loans. and so those who worry about such things worry that bank's profitability will be under pressure in the near future. >> your bank recently bought a small new york bank. do you think all the of the consolidations are good or bad for the economy? >> it just depends? >> some consolidation is essential as we go into the next decade.

given the relatively slack performance of the economy. where i think consolidation will cause difficulties is in the small towns of america where there may be only one or two institutions, neither of whom may survive. it the put further pressure on as the economy tries to recover. >> susie: and we hear from so many banks, small and medium size businesses, that it's very tough to get loans from their banks. why do we keep hearing this? >> those comments are sporadic and geographic. if you run a business in a town where two or three of the banks are in trouble and operating under agreements by regulators that frankly don't

allow them to make loans you could be suffering the consequence of that. to be frank, the large banks and most of the regional bank that is have healthy balance sheets are desperately trying to make loans in this environment, because whether we like it or not, banks can't make mon fethey can't make loans and certainly we're not going to make money investing in government securities yielding one or two or three percent. so we desperately need to make loans in this industry and are seeking opportunitys to do so. >> susie: i want to ask you this, john, you've lived through so many recessions in your working career. is the u.s. headed for another one? from what you've seen in the past, how bad -- what kind of shape is the economy in? how bad is it compareed to what you lived through before? >> some argue that it never fully recovered from the last recession, and frankly, i'm not sure whether being in recession or where we are

today is different. the classic definition is two calendar quarters of negative gdp may or may not be reached. but frankly, no one in my banking circles, and no one in business circles, at least in the southeast and the north east where i'm familiar are looking forward to significant growth over the next two quarters. whether we return to recession or not, i think it will feel like it. >> susie: we have to leave it there. john thanks for coming on the program. we appreciate your time. >> thank you. >> susie: we've been speaking with the ceo of bank united. >> tom: still ahead, target hits the bulls eye with bargain shoppers. we'll show you how it's new designer collection is red hot on its first day. james murdoch is being recalled for another grilling before britain's parliament after former news corp. executives raised serious doubts about his role in the country's tabloid phone hacking scandal. two former executives have contradicted murdoch's testimony that he did not know the extent of the hacking. james, along with his father,

rupert, appeared before parliament earlier this summer, apologizing for the scandal. so far, the date for james murdoch's appearance has not been finalized. >> susie: a lot of uncertainty in the market. we didn't see much movement today, tom. >> tom: really trying to digest all the news out of europe, and trying to discern

the direction of the u.s. economy. let's go with it with tonight's market focus. >> tom: while the major stocks averages were able to move higher for the second session in a row, oil continues to see the tug of war between worries about lower demand in the u.s. and europe and a growing thirst from emerging economies. crude oil jumped more than $2, closing just above $90 per barrel. it's at the top of its trading range since the stiff sell-off in stocks and commodities in late july. helping push prices up today was a reported drop in supplies due to tropical storms last week in the gulf of mexico. oil is at a five week high tonight. while oil prices have risen lately, the transportation sector continues around the low end of its range over the past year. this is the exchange traded fund following the dow transport index. it saw a nice 3.5% rally today. worries about economic growth have pushed this fund down 20% from its july high.

airline stocks took flight today. delta jumped more than 8% after reporting its third quarter performance is ahead of forecasts. delta also announced it will continue with its plans to cut the number of seats it makes available this year and early next year. united continental will modestly decrease its u.s. seats while slightly increasing its international capacity. the airlines hope to maintain airfares by not having empty seats on planes. and u.s. airways says both bookings and pricing remains strong. shares shot up more than 16% on heavy volume. airline stocks were not the only mode of transportation to see higher prices today. railroad shares rallied. kansas city southern popped almost 6%. citigroup upgraded its rating to buy. short line freight company rail- america gained 5%. it's biggest shipping product is coal, and while traffic dropped, the rate of decline slowed. and genesee and wyoming was up 4% announcing four and a half

years of consecutive month-over- month traffic increases. late today, general electric is going to pay back warren buffett. next month, g.e. will buy back $33 billion of preferred stock from buffett. his berkshire hathaway made that investment in the fall of 2008 at the height of the financial crisis. the pay-back comes with a 10% redemption premium. before the news, g.e. was the biggest gainer of the dow industrials, up 2.7%. the stock was at a 52-week low just yesterday. big tech also helped the market move higher. intel was up another 2.4%. it's at its highest price in a month. intel and google announced a partnership, positioning google's smart phone software, android, to work closely with intel semiconductors. cisco gained about 1.5%.

c.e.o. john chambers hit an optimistic tone during a meeting with analysts, even as the company released a more conservative growth forecast. instead of double-digit growth which had been the norm, cisco predicts revenues to be up 5% to 7% over the next three years. finally, grain prices took a tumble. despite lower harvest estimates this week, both wheat and corn dropped at least 3%. and that's tonight's "market focus." >> susie: best buy is having difficulty living up to its name. the company said today its quarterly profit fell 30% because of rival retailers and weak consumer spending, especially on tvs and smart phones. best buy earned 47 cents a share, falling short of analyst estimates. the retailer also lowered its full-year outlook. it was a much different scene at target stores across the country today. the retailer rolled out its highly anticipated designer line

"missoni for target." to say the items were popular may be an understatement. suzanne pratt reports. >> reporter: this was target in mount vernon new york at 7:45 this morning. everyone there wanted one thing, a piece of sky-high fashion at low prices. customers buzzed through the aisles making a beeline for anything with missoni's signature zigzag pattern. >> oh, my god, it's a fashion steal. are you kidding me? who wouldn't want these at these prices? >> a regular sweater costs about $1,000. >> reporter: there were coveted rain boots, pillows and other bedding, super cute kids' clothes, and yes, that's right, even a missoni neck roll. and i'm still trying to figure out what this is. it's 10:00 a.m., two hours after the store opened, and already most of the women's missoni collection is gone. target managers say they will be

replenishing, but they don't know how much or when. target team leader kyle wilhelmy says he wasn't surprised by the missoni madness. >> we've had a lot of designers do well here in the past. so, we anticipated it. we staffed for it and were ready for it. >> reporter: those who chose to shop online were disappointed-- the site crashed early this morning. target blamed demand for missoni. many retail experts says target does a great job creating a frenzy ahead of its designer launches. this pop-up missoni store in manhattan opened last week and was sold out in hours. analyst jharone martis is impressed by target's know-how. >> we've already seen so many items fly of the shelf that its definitely going to help boost september same-store sales for target. it's a very smart strategy, a very smart partnership. and if target continues to do so, they will continue to succeed in the coming years. >> reporter: and then there are customers who simply can't resist the chance to own even a

tidbit of the iconic missoni design. >> i've never done this before. in fact, i've never been at a store at ten after 8:00 in the morning to shop. >> reporter: guess what? she's coming back tomorrow morning. and, you know, so am i. suzanne pratt, "nightly business report," new york. >> susie: here's what we're watching for tomorrow: we'll see the august reports on retail sales and the producer price index. m.i.t. economist and professor simon johnson joins us to discuss the impact of europe's debt crisis. and hilary kramer is our "street critique" guest. email your questions to streetcritique@nbr.com. microsoft wants america to run on windows. to spread the word, the software giant handed out 5,000 samsung tablet computers today that run on windows 8. that will give users a chance to experience microsoft's next software system that includes features tailored for touch screens and tablets. the company hopes to take a bite

of out consumers switching to apple's ipad. tablet makers are expected to start selling products with windows 8 by the middle of next year. >> tom: h&r block will not offer refund anticipation loans during next year's tax season. the company says its client base is growing and the appeal of those high-cost loans is shrinking. h&r block was unable to offer the loans this year after regulators directed its third- party lending bank to stop funding the project. the tax services giant will continue to let customers use their anticipated refunds to pay for tax preparation.

>> susie: is the economy behaving like tennessee williams characters? tonight's commentator thinks so. here's daniel gross, columnist and economics editor at yahoo finance. >> time was, governments bailed out their own troubled companies and citizens came to the aid of their own floundering governments. but today, were in the blanche dubois economy: companies, countries, and sectors imperiled by dint of their own poor life choices are relying on the kindness of strangers. greece is waiting on future bailouts from its frenemies in northern europe. italy, unable or unwilling to take aggressive action to cuts its deficits, is now looking to

the chinese government to plow some of its vast foreign currency reserves into italian bonds. in the u.s., a broken-down chrysler was acquired and recapitalized by fiat, an italian company. and if you're an american stuck with an insanely expensive real estate white elephant, your only hope seems to be selling to a foreigner. a british heiress recently purchased aaron spelling's $85 million hollywood mansion, which had lingered on the market for ages. money is indeed scurrying around the world. >> like a cat on a hot tin roof. >> i'm daniel gross. >> tom: if the greek economic drama hasn't been enough international intrigue, look no further than this year's u.s. open tennis tournament. serbian novak djokovic cranked his winning shot on match point, defeating defending champion rafael nadal of spain last night, bringing with it a double digit increase in tv ratings. tonight's "beyond the scoreboard" looks at the business of tennis. here's rick horrow. >> a slow job market and bad

weather are not ideal conditions for an outdoor game that can take hours to finish. those are the challenges for the tennis industry, and it showcased an event that wrapped up this week. the u.s. open. according to rackets, tennis ball shipments fell during the latter half of the year. more people are spending time watching the sport. television ratings for the u.s. open were up from a year ago. i spoke with ken soloman, the chairman and ceo of the tennis championship. >> the women are more popular thab the men on court in terms of real playing that. doubles the potential scale. >> reporter: talk about the business model generally. you're independent and have to compete with the big boys everybody day. how does that work. >> the season of tennis is like a movie. vu have four blockbusters called the grand slam. those are multihundred million

dollar sequels. everybody know what is they are. >> you have the content model. and the revenue model, the distribution model. was it harder than you thought when you started? >> our distributors are also competitors. many are the same people who control the pipes, like a cob test or cablevision. it's a natural outcropping of business to say if i have golf channel, and a piece of the major league baseball and nhl network and nba network. they're going to get preferential treatment if i'm comcast. and golf channel is in 23 million homes. >> virtually for free with no additional charge. with a 5.99 on >> you do have synergies.

>> how do you make it work. >> we became evangelists for the notion that an integrated web of networks was superior to what had previously been the model which was exclusivity. >> they would buy rights and say whatever i don't put out, i don't want anybody to v. >> we went to the french tennis federation and said they're doing a great job. they have 50 hours. looks like nbc has about 12 to 15. you're doing 400. and they're all good. every one of those minutes on the red clay is great, and you're not seeing the serena match or the roger match or the cloister match. let us do that. and we went to espn and nbc is said let us shoulder the burden of it. let us find a way to share costs on the back end and

promote the whole thing together. our presentation is much more like an olympic presentation. that's two weeks of content morning noob and night like the u.s. open. and their ratings go up, because we're promoting to them, andure on quid pro quo is when you go off and you go to espn and nascar or bull riding or women's basketball, please make sure you don't make the fan unhappy. >> ken soloman with rick horrow. >> tom: that was rick horrow with the tennis channel's ken soloman. and that's "nightly business report" for tuesday, september 13. i'm tom hudson. good night, everyone. you, too, susie. >> susie: good night, tom. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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