captning sponsored by wpbt >>aul: when it comes to foreclosure preventionthe administrationays there's too much foot dragng. now it's phing the nation's biest mortgage servicers to do bettery working out half a million troubledoans by november. >> suzanne: reforming alth care and fding medicare will go hand in hanon capitol hill. tonight, we talk micare and health reform with theaiser familyoundation's tricia neuman. >> pl: i.b.m.'s doing it. sprint and amazon to but does the recent jump in deals mean m&a is ck on wall street? yes,nd no. >>uzanne: then, we head to china where motorola'saking its cues dectly from the

consumer and trying to boo its share of the cell one market. >> pl: i'm paul kangas. >> suzanne: and m suzanne pratt. susie gharib is off tonit. is is "nightly business reportfor tuesday, july 28. "night business report" is made possible by: th program was made possible by contributionso your pbs station from viewersike you. thank you. >> suzanne: good eveni, everne. the beatenown u.s. housing rket may be showing signs of stilization. the s&p-case shier index of home prices rose hala percenta point in may from april.

th's its first monthly increase sincehe summer of 2007. still, home pres were down 17% om a year ago. while a stabilization inome prices cou help stem the foreclose crisis, the white house says not enough borrers are being helped by it$50 billion foreclosure preventi program. today, it called executis from 25 mortgage seicing firms to shington to find out why. as stephanie dhue reports,hose servicers have now agreed toet busy modying half a million loans inhe next four months. >> rorter: the admistration's foreclosure evention plan is off to a sl start. inhe lt three months, 200,000 mortgages ve been modified, ile there have been twice as many foreclosures scott talbt of the financial services roundble says kinks are ill being worked out. >> what we'd like to sees having aommon set of documents. there's diffent forms you have to fill out, dending on which ogram you're going into and there isn't a cleadefinition of alley relevant terms. >> reporter: one of the most

confusing terms ismminent deult. what's unclear ijust when borrowers are at rk, if they are still current wi their payment. keith ernst the center for responble lending says borrowers are geing mixed signal >> there's a lot gng on in this program, servicerare largely overwhelmed and it's easy for misinformatioto get into the system. borrowers should have chance to corre that before their home is ken away. >> reporter: stabilization in home prices may give lenrs more leeway to work out a lo for a borrow who could still fault down the road. but analt andy laperriere says many mortgagesade during the boom can't be worked o. >> one of the big prlems is at a lot of people had loans they couldot even come close to affording and so justhe economics just don work, even if you get some support fr the governmentn terms of subsidizing the lender for lowering the payments,he person's debt to ince is so gh, it just doesn't make any sense, it makemore sense to foreclose. >> reporte 13 million foreosures are expected over the next five years, kping the pressure on nders to work out troubled mortgages.

the admistration will also keephe heat on lenders, with plans to make publicow many lo modifications each of the 25 companies in thprogram have done stephanie dhue, "nightly business report," washgton. >> suzanne: u.s. and cnese leaders say the acon's they have taken havhelped pull the world's finaial system back from the edge. as they wrappeup two days of high level talks in waington, both countries are promisingo continue making prress on financial and onomic reforms. china says it will connue to boost demand ahome in order to reduce reliance on eorts to the united states. the u.s. is promisinto rein in our budg deficit and tighten financial gulations. >> paul: wall street got o to a slow and lower startmid some corporatearnings that, unlike threcent trend, were not bett than expected. u.s. steel, ofce depot and crane company were amo the examples. additional selling wasriggered by aigger than expected decline in july consumer confidence. at noon, the dow wasown 81 points with the nasdaq o 16. stocks spenthe afternoon

considating recent gains and ded narrowly mixed. the dow fell 11.79 pois to 9,096.72. but the nasdaq cposite rose 7.62 pnts to 1,975.51. the s&p 500 index slped 2.56 points to 979.62 in the bond mark, the 10 year note rose 10/32 to 913/32 putting the yield at 39% suzanne: president obama sa today medicare benefits coulbe at risk withouhealthcare rerm. the presidensaid the medicare trust fu will be out of money within a decade unle lawmakers overhaul the system. ining me now with a discussi

of the nation's medicarerogram isuest tricia neuman, director of the kaiser family fountion's medicare policy project. icia, welcome. >> thank you very ch. >> suzanne: ll, medicare as you know rns 44 th week and iuess birthds are always a goodime to take stock so i want to as you, let's gin with, do you think the dicare progm is successful? >> i think dicare has been enormouslyuccessful. if you thinkbout the start e program, athat time, less thanalf of all seniors had health insurance. so today, all niors have heth insurance they can g coverage witht regard tany health pblems or thout regard to their income and by and lar, senis are very satisfied wi the program. it's a very popar program, s, yes, i do thinkit's beenuite succesul. >> suzanne: early, funding is one of the major chlenges facing the program. what are some of t other challenges, though, thathey're going to be dealing with? >> well, actually benefits a a real probl. dicare is aually ls

geneus than most large employer plans. so one of the issues is finding a way to improve benefitsso thateniors getheenefits th they need a a gat example ofhat is the drug benefit that has a coverage gap or a doughnutole. >> suzanne: so how does medicare fit into the whole debate of health car reform? w is it possible or possibly going to be addressedith health care form? >> well, medicarefits in in a number of ways. probably a major way would be th medicare is helping tofund some of the improvemen in the health reform package. there are significant medicare vings, many of which are in areathat are sort of rig for cuts. a great emple of thais cuts in paymes to medicare vantage plans for wch there have been overpayments ov the pa several ars. ese savings are going to be used t he fund cerage expansionsor other people.

medicare is also a driver of alth systems reform, and i know that people on the hi and in t administration hope to use medicareo prove the delivery system to helpake ality of care better andto managecare bettefor people with chronicconditions, both on medicare and more generally in the health care syst. >> suzae: what about the fundin challenge though? how is the healthcare reform likely to address the proem of funding dicare? right, the funding challenges are very real, but actually, the health reform pla that is moving throu the house would significany improve medicare's scal status adding five years of le to then medicare trust fund which is currently scheduled toe insvent by 2017. so aually, medicarcould be the self-nner ofealth reform becausit could contribute to medicare's fiscal streth over a period of time. d that would be a great thing. >> suzannenow, we can't talk about mecare without talking about part d wch is the prescription drugportion of

medicare. now, will health care reform and the types of reforms that we're talkg about address the problems of part d? >> well, um,t's a possibility. it's too ely to know. the drugenefit as you know has been in effect for littlebit morehan three years and one of the issueshat isust real problem is the coverage gap. the bill that is moving through the house does try to close this coverage gap wch would provide real relief to seniors en they get that point when their drug benefit doesn't pay any of their prescription drug costs and theyave to pay full freight. sof that provision stays in the package and if the health reform plan passes, then that could providereal help to seniors in the nearerm. >> suzanne: uh-hu we only have a few seconds left let me sort conclude by scug generally, would y say that mecare is an efficient program? is it something we canse as a model when talking abouhealth care reform? >> medicare self is quite

efficient. when you look at admistrative expenses, medicare's administrative costs are about of the total. you'd be hard-pressed to fd a privatinsurance plan with such low overhead. one way medicare really is a model is in th way of operati fairly efficiently in rms of low overhe and th coul could -- thamodel and that level of efficiency could bring greasavings into the overl system. >> suzanne: thank u. i think w have to leave it there. thank you r educating me toght. >> you'reuiteelcome. >> suzanne: my guest ts eveng, tricia neuman of t kaiser family undation. paul: big blue is getting a little bigger.

i.b.m. today saiit's paying just over a billion dollars r buness analytics software maker s.p.s.s. software. the $50 a share all-ca deal has manyn wall street hoping for a return tthe boom days in e m&a market. but as scott gurvey repos, the jump ideals may be just a case of opportunity knocking. >> reporter: i.b.m. bbles up s.p.s.s. spri swallows virgin mobile. agilent gulps downarian, and that's justwo days of headline m&a activity. from amazon anzappos-- to bristol-mys squibb and medare- mergers and acquitions seem to be breaking out all over wall stre. omas burnett of wall street access says that's a sn of a change in outlook >> corporate boardooms are beginning to seehat we're through the worst ofhe overall economic recsion and that going forwarit looks like we can envisionrowth. it may not be this quart, next quarter or ear in 2010, but

going foard we're through the worst and thgs are going to start to get better. >> reporte but if confidence is returning, it's cautionarat best. the value of the deals yeato date is only 35% of enof july last year. rich peterson of s&pays if you are looking for return to a trillion-bucks-a-year a pace, don't ho your breath. >> that'not to say there's a buyer's strike there's deals th are going on. t in terms of the large mega deals that we saw back in 20, 2007, in the hey-dayf private equity, ose are not on the hozon any time near. >> reporter: one reason cuent dealare relatively small is that pvate equity money, which used to fu about half the m&a activity, has almo completely dried up. that won't change until e cred markets improve. r investors looking to buy into companieshat could be taover targets. burnett says smaer energy

companies will be attracti if the price of oil continues t rise. and smallehealth care providers may be bght by rger firms seeking ecomies of scale as they apt to new health care reform >> it's ing to get more competitive. you're goi to perhaps be competinwith the federal governmentn one hand. you're going to be tapng into all these uninsured peop, whatever the number is. and to get the, it's going to be difficult forhe smaller mpanies. so we're expecting probay two or three deals maybe as ma as half a dozen deals in the h.o. space. >> reporter: burtt says he's not looking for health care deals untiand unless a reform package signed into law and the details are known. scott guey, "nightly business report," new york. >> suzne: regulators want to turn up e heat on the energy market. the head of thcommodities futures tring commission says his agency musseriously consider tough limiton eculative energy trading. gary gensler says the ideas to curb excessive tradi, not eliminate speculatioall togeth.

the agencyhinks too much paul, you know, last year that same agency said supp and demand notpeculators drove prices higher. >> paul: suzanne, the chicag mercantile exchange is also favor limiting energy contras. now let's take a look at o stocks in the ne tonight.

>> suzan: as we mentioned earlier,hina said today it will expand demando help reve its economy. it must get chinese consums buyinggain, and that's a challenge for telecom coany motoro. the mpany's marketshare there has tanked over the last f years. so motorola is working to tu things around. as shannon van sant reports,he mpany's focusing on consumers: the y to a much-needed turnaround. >> reporte for more than a decade, motola dominated handset sales in china.

duncan clark, chaian of b.d.a., a telecom adviry firm in bjing, says motorola was once an ic for u.s. investment in china but in recenyears motorolas sales have fallerapidly. >> we've seen a tremdous fall from grace for this coany. the speed of motora's decline in cna has surprised many, including many of its chines employee reporter: according to b.d.a. anthe chinese market research firm c.c.i.d., morola's market share for mobileevices in china has fall from 22% at the beginning 2007 to just over 6%his year. rt of the company's problem habeen under investment in research and developme. nokia and samsung arbringing new models io the market quickly, and motorola has d trouble followinup its success with the razr phone, launcd in 2004 one of the bigge challenges here for motorola keeping pace with demand. in china, bile phones are a status symbol and peop change their phonesrequently. clark sa motorola has been late to thmarket with

chnology chinese consumers look for >> chinese consumersre keen to be seen to carry the most vanced technology. it's a projection ofho they are. it's a brand. it's very important tohem so if they're seen have sothing with slightly lower features or slightlylder, theye losing face. >> repter: ruey bin kao, chairman of motorola chi electronics,ays motorola will continue i investment in research to comb the company's deining sales. 3,00engineers work at the company'research and development center in beijg, wherphones are tested for sound quity and network liability. kao saysotorola's research will eventually pay off th more products like morola's ming sers. >> one othe innovations we have in chinis the p.d.s. series, ming series,n china which is very popular he. and so far whave sold eight million of the pnes. >> rorter: the launch of china's ird generation mobile phone service may prest more opportunities for the mpany. motorola receny secured a $310

miion contract with china bile which includes infrastrture for the transition fm second to third generation network it's not only china'mobile carriers that motorola nee to win over. kao says t company is focused on connecting th mobile phone consumers as wl. >> we're gng to be more focused, understanding t needs of those customers androviding the solutions to meet thr needs. >> reporter: meeting custors needis important for motorola to maka comeback. with 670 million mobile phone sucribers, consumers in china y play a crucial role reversing motorola's worldwi decline in sales. shannon van sant"nightly siness report," beijing. >> paul: tomorrow, seet critique guest hary kramer has stocks for the recovery. she's chief market stregist at grntech research. >> suzanne: the federal serve may need to spruce uits public image. a new poll ranks the fed dea last when it comes to amerans' perceptions onow government agenciesre doing. on 30% of respondents rated the fed's rformance as either

"good" or "excellent." th puts it behind homeland security and the i.r. the centers for disease corol and preventi ranked number one. >> paul: anotherovernment agency is in troub. the u.s. postal service isow on the government accounbility ofce's "high-risk" list. that list cludes agencies and programshat cost tax payers billions iwaste or mismanment. the g.a.o. says thpostal service needs to cutosts immediately to deal wi a rapid decline in mail volume the ency agrees and wants to cut back mail livery to just fi days a week.

>> suzanne: here's a lk at what happening tomorrow. we'll see june orders for durable gos, the fed's beige ok and the weekly report on crude oil and gasoline inventories. night's commentator says the health care refo debate shows why we need more primary ce physicians. he'steven george ullmann director of the health secr management and picy program at the uversity of miam >> nearly 20 yea ago, lee iacocca, former chrysler c.e. stated, and i quote, "heal ca costs are bleeding us white. we have now cracked the $1,0 per unitevel. that's nearly three tis what some of our competitors ha to pay! how can we be competitive?"

today, mr. iacocca dire warnings have me to fruition as binesses fail and services move off shore. we made an attemptt health care reform sixteen yes ago, but that plan faed. and soere we are again. e elements of the health car form we ultimately adopt-- i we do adopt-- may well dtate what happens in terms of our ability to compete and the natu of our economic recovery. coress appears focused on access, apprriately developing a way to allow7 million uninsured to obtaihealth insuranc debate centers around a government health insurae alternativ this debe is a bit off-base as health care has a long htory of simulneous provision of service byor-profit, non- profit and government provids. congress should focus developing a network oprimary ca physicians and nurses to meet the needs of 47 milon additional pple. the government predicta future nursing shortage of 800,000 d only 17% of medical hool graduates express an intest in primary care. unless we address prary care, the law supply and demand

will dictate risg prices for heth care, rising costs and emplers will be affected significantly. economic recovery anglobal competition wi be impacted by the nature of this reform. let's hope we get it rht. mr. iacoa is watching. i am steve ullmann >> pau recapping today's market action: a spl decision for stocks. thdow lost 11 points, while thnasdaq gained seven points. to learn more abt the stories in tonht's broadcast, to watch oustreaming video and to take rt in our daily blog, go to "nightly busins report" on pbs.org. you can also email uat nbr@pbs.or >> suzanne: that's "nightly business repor for tuesday, july 28. i'm suzanne att goodnight everyone and gd night to y too paul. paul: and you as well suzanne. i'm ul kangas wishing all of you the best of gd buys. "nightly busins report" is de possible by:

is program was made possible contributions to your pbs station fr viewers like you. thank u. ptioning sponsored by wpbt captned by media access group at bh access.wgborg