on our broadcast tonight -- drastic measures in the state of california. no money, huge cuts. the state is going to have to sell off merchandise to make money. this could happen where you live. can they do that? credit card companies finding new ways to separate customers from their money. buyer beware. what happened? a world famous professor at harvard is confronted by police in his own home, was it because of his race? new orders, some thoroughly modern monks doing good by doing well. an example of what works. wheel of fortune, cycling legend. lance armstrong back on the bike. what is the one thing that could slow him down now? what is the one thing that could slow him down now? "nightly news" begins now. captions paid for by nbc-universal television good evening. california is our biggest state in terms of population and it

long ago ran out of money. they have got nothing to pay the vendors they owe and they have struck a deal for more cuts. and these are going to hurt. they're going to allow offshore drilling for the money it will bring in. the l.a. times reports, tens of thousand of seniors and children would lose access to health care. prisoners will spend less time in prison. and the governor is going to sell cars and furniture and office supplies and autograph some of it he says to raise more money. an unbelievable turn of events. we are live in los angeles tonight to start us off. good evening. >> reporter: good evening. thursday, legislators are expected to pass the budget. it is a compromise, what some characterize as shared pain and sacrifice. >> reporter: a done deal, that's what california's top legislators say about the state budget. >> it was like a suspense movie. >> reporter: played out like a

long drama with midnight negotiations and an ending long overdue. >> this is an emergency. if you are in a fiscal crisis, economic crisis, and we did things that needed to be done. >> reporter: facing a $26 billion budget deficit, california was so broke it began issuing i.o.u.s and worries the state would go insolvent. >> if california had gone insolvent there would have been no money to pay for services. to pay vendors. >> reporter: the plan to pull california out of the red includes cuts across the board -- $1.3 billion from health care, more than $500 million from welfare, $1.2 billion from corrections which could allow inmates out early. >> shame on you! >> reporter: the biggest cuts from education affecting students from college to kindergarten. and it is not just the young, but also the old. san diego's hope adult day-care center will eliminate health

care service two days per week. >> if we lose the two days and they end up in a hospital institution it could cost the state well over $500 a day per patient. >> reporter: counties and cities aren't happy either. san diego balanced its budget, but the state money it was counting on won't be coming. >> that is real in terms of police officers on the street, fire fighters on the rigs, potholes in the roads. >> reporter: to generate cash, the expansion of oil drilling near santa barbara, a move not seen off the golden state's scenic coast in 40 years. brian, while the state may have a budget deal, some local cities and counties may sue california to get their earmarked money back. starting us off tonight, miguel, thanks. the senate vote to save a lot of money by cutting off spending on a fancy fighter jet, the f-22. its critics charge it requires 30 hours of maintenance for every hour in the air. they say an estimated $44,000 is

spent every hour it is aloft. so the senate said no to $1.75 billion for just seven more jets. john mccain and president obama both agree on this. they oppose the f-22. the president said today he will veto any more money for the advanced fighter. the context for awful this, of course this gathering storm in washington this week, over what the president has made his number one priority. health care reform. our chief white house correspondent chuck todd has the latest from the front lines tonight. chuck, good evening. >> reporter: good evening, brian. well for the eighth day out of the last nine, the president publicly used the bully pulpit to push health care. his angle today was populous rhetoric. take a listen. >> time and again we have heard excuses to delay and defeat reform. time and again, the american people have suffered because people in washington played the politics of the moment, instead of putting the interests of the american people first.

>> that was what was said in public. of course all right work is happening behind the scenes. here is what we know -- the president met with conservative house democrats they seem to have made some progress in trying to figure out how to pay for this bill. a lot of conservative democrats are worried who is going to have their taxes raised, where is the money going to come from? the second thing. the chairman of the senate finance committee he seemed to make progress we are not going to see a bill from him this week. what does that mean? that means that this august deadline of getting a bill through the house and senate that is virtually gone. expect to hear the president talk about just trying to get the committee work done by the august recess. finally, just one point to ponder, brian. the last time a u.s. congress had to vote to raise taxes, that's what is going to happen here with health care, was in 1993. just 29% of the current members of congress were actually around to cast that vote. it's been that long since one of the guys had to cast a tough vote like this. >> we will keep watching it all.

chuck todd our man at the white house tonight. thanks. now a look at why advocates of health care reform say this nation desperately needs to change the way things are done right now. a big and growing proportion of personal bankruptcies in the country are tied to illness. and as nbc's chris jansing reports, even those who have insurance are not immune. >> reporter: the first to tell you she led a charmed life. first as a flight attendant with homes in seattle and london. >> it was a glorious job. >> reporter: then rural postal carrier with a country home. her house went into foreclosure when an accident lefter unable to work. >> i was doing everything i could to hold on to my home. health wise it almost killed me. >> reporter: after a lifetime of working and saving, she was broke. and she is far from alone. >> illness and medical bills are contributing to 2/3 of all bankruptcies in the country. >> reporter: a study in the

american journal of medicine showed out of pocket expenses for major illness or accidents, even with insurance, can ruin finances. for diabetes, injury, stroke, heart disease, average costs top $20,000. experts call it medical bankruptcy, that usually starts when some one gets sick or injured. it sets off a devastating domino effect. they can't work. they lose their job. eventually, lose their insurance. it happened to this woman, after 25 years behind the counter at some of downtown seattle's nicest department stores, mounting bills from diabetes left her with a terrible choice. pay the rent or buy medicine. >> it just snowballed. >> reporter: she went through $6,000 in savings and ended up homeless. >> before the people got sick, they were middle-class americans. these were families who had done everything right that you are supposed to do in america. and yet once they got sick, they were in deep trouble financially. >> it took months and the help of the seattle ywca to help

francine and donna get back on their feet. >> that's what i want people to be aware of. don't think you are immune to this. >> reporter: two women with a message echoed by experts. everyone should know the details of their insurance coverage, and never assume the worst can't happen to you. chris jansing, nbc news, seattle. a professor at harvard university, henry lewis gates jr. perhaps the best expert on african-american history in this country. he got home thursday from china making a pbs documentary and tried to get into his own home in cambridge, massachusetts, his front door was stuck he used his key in the back door. later the cops arrived, responding to a burglary call and he wound up under arrest. the charges have been dropped, but the stakes have just been raised. our report tonight from nbc's mike taibbi. >> reporter: a still photo, the 58-year-old professor in handcuffs, mug shots following

his arrest and charge of disorderly conduct, inevitable headlines and the logical almost unavoidable speculation. >> a person of color one has to wonder whether he was treated as any other harvard professor might have been. >> world renowned scholar, hen reap lewis gates returned home from a week's travel last thursday and found his front doorjambed. he went in through the back door and then, with the help of his driver, also african-american, pulled the front door open. a witness mistook the scene for a burglary in progress and police say when they responded, gates refused to be cooperative and continued shouting, loud, tumultuous behavior and said this is what happens to black men in america. gates told fellow professor that he did cooperate. producing two photo ids to prove who he was and was astonished to see several police officers gathered who placed professor gates under arrest, handcuffed on his own front porch. with the story getting wide circulation, the cambridge police department dropped the

disorderly conduct charge completely in the interests of justice. a statement issued by gates' attorney, walter prince, called the incident regrettable and unfortunate and not one that should demean the character of professor gates or the cambridge police department. >> people thought with the election of barack obama, racism is over. i don't think black people thought that. this proves that. obviously not over. >> reporter: the case may be over. but the incident won't soon be forgotten. mike taibbi, nbc news, new york. when "nightly news" continues on a tuesday evening, banks rush to raise interest rates and fees on credit cards. at a time when customers are struggling. so what is the deal? later the american with the big name, facing a big challenge in the bike race he has won so many times before. i go down to the pool for a swim... get out and dance... even play a little hide-n-seek. i'm breathing better... with spiriva. announcer: spiriva is the only once-daily

inhaled maintenance treatment for both forms of copd... which includes chronic bronchitis and emphysema. i take it every day. it keeps my airways open... to help me breathe better all day long. and it's not a steroid. announcer: spiriva does not replace fast-acting inhalers for sudden symptoms. stop taking spiriva and call your doctor if your breathing suddenly worsens, your throat or tongue swells, you get hives, or have vision changes or eye pain. tell your doctor if you have glaucoma, problems passing urine or an enlarged prostate, as these may worsen with spiriva. also discuss the medicines you take, even eye drops. side effects may include dry mouth, constipation and trouble passing urine. every day could be a good day to breathe better. announcer: ask your doctor if once-daily spiriva is right for you. discover a smoothie like no other! new activia smoothies. creamy, delicious, and above all, it contains bifidus regularis and is clinically proven to help regulate your digestive system. new activia smoothies. ♪ activiaaa!

(announcer) excedrin pm. relieves pain fast. plus a sleep aid to help you fall fast asleep. excedrin. what ache? where's my car?!!!! where are you?! arghhh... (announcer) dr. scholl's massaging gel insoles give you outrageous comfort, all-day-guaranteed. woah. it's not too far... (announcer) are you gellin'? dr. scholl's. for post party sickness syndrome. cascade all-in-one actionpacs. it has the power to pre-wash... and then rinse the whole mess away. cascade all-in-one actionpacs. for a perfect clean, every time. earlier this year we told you about a law passed by congress intended to protect consumers who are struggling to pay their bills from the

predatory practices of credit card companies. the problem is the law doesn't take effect for months. the companies know that. and our report tonight from our senior investigative correspondent lisa myers. >> reporter: struggling with medical bills and a consulting business, hard hit by the economic downturn, linda and jay gallagher reluctantly downsized last year from the townhouse they had lovingly renovated to a manufactured home. >> one of our major concerns was that we wanted to be able to pay our bills. >> basically said we have to make a really big change. i have to say the was scary. >> reporter: then the notice arrived from chase last month the interest rate on their $5,000 credit card bill was almost doubling to more than 15%. why? to maintain profitability on their account. >> i was really angry because it was an injustice. it was a great injustice to us.

we had worked hard and weren't missing payments. >> reporter: since the president signed a law to crack down on credit card abuses two months ago the big credit card companies, chase, bank of america, and to a lesser extent, citibank have raised costs for consumers. jacking up rates, changing fixed rates to variable, and increasing minimum payments. while it is perfectly legal what they're doing, but i think it does violate the intent of the law. >> reporter: in fact, congress made all this possible. because banks said they needed time to adjust, congress delayed the effective date of most new consumer protections until next february. one important provision of the new law will generally ban rate increases on existing card balances. but, by switching consumers to a variable rate before the law kicks in, banks build in automatic future rate increases as overall interest rates go up. these types of practices can really push a card holder over the edge. >> reporter: the banks say the

changes are needed because their costs are up dramatically. >> credit card companies are losing money because people are losing jobs. and the first bill they stop paying is their credit card. >> reporter: banks note consumers also can opt out. the gallaghers are closing their account and will struggle to pay off their bill as fast as they can. lisa myers, nbc news, washington. tough times continuing for the nation's airlines. continental announced it is cutting 1,700 jobs and raising fees. it will now cost $20 to check a bag at the airport. $25 to book your ticket over the phone instead of online. the head of the consumer product safety commission is putting companies that make children's product on notice. its enforcement powers are strengthened that means fines for producing dangerous toys going up next month. maximum penalty for consumer violations is going to go from under $2 million to $15 million starting in mid august.

severe weather to tell you about in the denver area today. violent thunderstorms in the early hours of the morning brought hail, heavy rain, 60, 70 mile an hour gusts, lightning strikes. some of the damage was major. downed trees crashed into businesses and homes. a big one there. tens of thousands of people were left without power. when our broadcast continues along the way in just a moment, next time you need a credit card, if you told us to see the monks would you think we were crazy? and suvs in america. i don't know if you've heard, but this whole fuel-efficiency thing... kind of a big deal. anyway, ford and lincoln mercury have you covered. in fact, they're your cash for clunkers specialists. they'll recycle your ride and get you a rebate of up to $4,500. how's that for going green? why ford? why now? why not? visit your ford or lincoln mercury dealer. tell 'em mike sent you. if you think it would help.

but with aleve, i don't have to worry about my knees hurting. only two aleve can stop pain all day. aleve works for me. no surprises. no shocks. dulcolax stool softener provides stimulant-free constipation relief that's gradual and comfortable, like nature intended. dulcolax sto softener. feeling free to be. singers: feelin' free.

and i'm joni. we've been best friends since we were two. we've always been alike. we even both have osteoporosis. but we're active. especially when we vacation. so when i heard about reclast, the only once-a-year iv osteoporosis treatment, i called ni. my doctor said reclast helps restrengthen our bones to help make them resistant to fracture for twelve whole months. and reclast is approved to help protect from fracture in more places: hip, spine, even other bones. (announcer) you should never take reclast if you're on zometa, have low blood calcium, kidney problems. or you're pregnant, plan to become pregnant or nursing. take calcium and vitamin d daily. tell your doctor if you develop severe muscle, bone or joint pain or if you have dental problems, as rarely, jaw problems have been reported. the most common side effects include flu-like symptoms, fever, muscle or joint pain and headache. nothing strengthens you like an old friendship. but when it comes to our bones, we both look to reclast. you've gotta ask your doctor! once-a-year reclast. year-long protection for on-the-go women.

we're back. a staggering number of web businesses have sprouted up since the dawn of the computer age, as lots of people have figured out ways to make lots of money. and that would include monks. the monastery kind. in their case, it is an example of what works. and we get the story tonight from nbc's kevin tibbles in sparta, wisconsin.

>> reporter: the our lady of spring bank monastery sits sequestered on 500 acres outside sparta, wisconsin. >> we continue the tradition of gregorian chant, and we also i think in some ways have a bit of entrepreneurial panache. >> reporter: steeped in religious history they're also pedal to the metal into the 21st century. running monksonline.org. while servicing a modern day piece of equipment that father bernard mccoy had his revelation. >> my printer ran out of toner. and in looking online to order one, i said this is way too expensive. >> good afternoon, laser monks -- >> reporter: they became the laser monks a multimillion dollar recycler of printer cartridges and toner, hired a staff, opened a factory and donate the proceeds to charity. >> i can't think of a better place to work. i get to give money away every day to those most in need. >> reporter: the rule of saint

benedicts states the monks must give back, they fund and equip their community center and support this shelter for the victims of domestic violence. just don't try to get them to take credit for it. >> we wanted to give them an award at our candlelight vigil. they refused to take it. >> reporter: giving back means doing it quietly and cloistered. >> we don't live in the past or middle ages we try to bring forth the riches from our tradition and bring them into the modern world. >> reporter: what else for the monks with the divine business sense, they sell coffees, trappist preserves and benevolent biscuits, tasty treats for dogs, all profits to charity, heavenly. kevin tibbles, nbc news, chicago. there has been a collision in the solar system. a big one. scientists say something hit the planet jupiter about a day or two ago. whatever it was it left a hole in jupiter's atmosphere about the size of planet earth which gives you an idea how big

jupiter is. the hole was first spotted monday morning by an amateur astronomer in australia who brought it to the attention of the folks at nasa. not sure what anyone can do about it. when we come back here tonight, does lance stand a chance this time around? high ch. you've taken steps to try and lower both your numbers. but how close are you to your goals? there may be more you can do. only caduet combines two proven medicines... in a single pill to significantly lower... high blood pressure and high cholesterol. in a clinical study of patients... with slightly elevated blood pressure and cholesterol, caduet helped 48% reach both goals in just 4 weeks. caduet is one of many treatment options, in addition to diet and exercise... that you can discuss with your doctor. caduet is not for everyone. it's not for people with liver problems... and women who are nursing, pregnant or may become pregnant. to check for liver problems, you need simple blood tests. tell your doctor about any heart problems... and all other medications you are taking...

or if you experience muscle pain or weakness, as they may be a sign of a rare but serious side effect. how close are you to where you want to be? ask your doctor if caduet can help you go... for both your goals. and maybe some gas relievers in case you're out of beano... disaster strikes and something happens you regret forever. on second thought, just carry an extra beano. take beano before, and there'll be no gas. body wash from olay. tone enriching ribbons. two separate ribbons. the white cleanses. the gold moisturizes and has a touch of mineral shimmer to enhance skin's tone. olay tone enriching body wash. for skin that shimmers. if we don't act, medical bills will wipe out their savings. if we don't act, she'll be denied coverage because of a pre-existing condition. and he won't get the chemotherapy he needs. if we don't act, health care costs will rise 70%.

and he'll have to cut benefits for his employees. but we can act. the president and congress have a plan to lower your costs and stop denials for pre-existing conditions. it's time to act. dr. scholl's back pain relief orthotics with shockguard technology give you immediate relief that lasts all day long. dr. scholl's. pain relief is a step away. discover a smoothie like no other! new activia smoothies. creamy, delicious, and above all, it contains bifidus regularis and is clinically proven to help regulate your digestive system. new activia smoothies. ♪ activiaaa!

advil pm or tylenol pm? with advil pm she's spending less time... lying awake with aches and pains... and more time asleep. he should switch to advil pm. the better night's sleep. finally tonight, in the world of biking he has won the big dance seven times. lance armstrong is as controversial as he is popular. along the tour de france route. he has survived some big challenges in life, and he is back in the big race. but does he really stand a

chance of an 8th victory? our report tonight from nbc's stephanie gosk in france. >> reporter: in the swiss alps today they hike trails, rode bikes and set up camp early to get the best view of a legend. lance armstrong was not supposed to be here. he retired four years ago from racing after winning a record seven tour de france titles. but he said he came back to raise cancer awareness. armstrong survived a deadly form of testicular cancer and to dispel suspicion he used performance enhancing drugs. >> he has been hounded particularly after he retired that he was a drug cheat and that he only achieved what he did because he -- he was doping. and he wanted to show that he could come back and be competitive at the highest level which he is proving. >> reporter: now he is fighting something new, a 37-year-old body. armstrong took on a rigorous

training program and regained his former strength stunningly fast so he could climb mountains like this one. there are four categories of climbs in cycling, one through four, one is the toughest, and then there is a climb like this one, so difficult, it's beyond the categories. but not too hard for armstrong, with less than a week to go on a route that goes through france, spain, monaco and switzerland, armstrong is in second place, 1:37 behind the leader, his young teammate, who is favored to win. still armstrong has the hearts of many along the way like this young swiss boy who scrolled his name in the street though he couldn't spell it. you forgot the "r." . >> ah. >> this couple from south dakota who have never been to europe before but are here to cheer armstrong on. the cheering from loyal fans won't be enough. today armstrong admitted his chances of winning aren't great. >> in year's past i wouldn't have ridden at a consistent

pace, had punch, acceleration, follow and make the moves myself. i can't do that anymore. >> reporter: turns out age is the one competitor even lance armstrong can't stare down. stephanie gosk, nbc news, france. we'll keep you posted. that is our broadcast for this tuesday night. a few things before we go. tomorrow night we'll cover the president's news conference here, live, 8:00 p.m. eastern. tonight, 9:00 eastern, cnbc, a live special report "california in crisis" more on our lead story tonight. for now, for us, thank you for being with us. i am brian williams. we hope to see you right back here tomorrow evening, as always. here tomorrow evening, as always. good night. -- captions by vitac -- www.vitac.com