ptioning sponsored by wpbt >> paul: when it comes to foreclosure prevenon, the administraon says there's too much foot draggi. now it's pusng the nation's biggt mortgage servicers to do better bworking out half a million troubled lns by vember. >> suzanne: reforming heth care and funng medicare will go hand in hand capitol hill. tonight, we talk medicare and health reform with the kser family fndation's tricia neuman. >> pau i.b.m.'s doing it. sprint and amazon too. but does the rect jump in deals mean m&a is ba on wall street? yes, a no. >> sanne: then, we head to china where motorola's ting

its cues dirtly from the consumer and trying to boostts share of theell phe market. >> pau i'm paul kangas. >> suzanne: and i'suzanne pratt. susie gharib is off tonigh th is "nightly business report" r tuesday, july 28. "nightlyusiness report" is made possible by: thisrogram was made possible by contributions tyour pbs station from viewers le you. thank you. >> suzanne: good evening everyo. the beaten dn u.s. housing maet may be showing signs of stabization. the s&p-case shill index of home prices rose half

percentageoint in may from ril. that its first monthly increase since t summer of 07. still, home pric were down 17% fr a year ago. while a stabilization in he prices couldelp stem the foreclosurcrisis, the white house says not enough borrows are being helped by its 0 llion foreclosure prevention program. today, it called executivefrom 25 mortgage serving firms to waington to find out why. as stephanie dhue reports, tse rvicers have now agreed to g busy modifng half a million loans in t next four months. >> repter: the adminiration's foreclosure prention plan is off to a slow start. in the lasthree months, 20 0,000 mortgages ha been modified, whe there have been twice as many foreclosures. scott talbotof the financial services roundtae says kinks are stl being worked out. >> what we'd like to see i having a cmon set of documents. there's differt forms you have to fill out, depding on which prram you're going into and there isn't a clear finition

of all k relevant terms. reporter: one of the most confusing terms is iinent defat. what's unclear is st when borrowers are at ris if they are still current withheir payment. keith ernst ofhe center for responsie lending says borrowers are gettg mixed signals. >> there's a lot goi on in this program, servicers e rgely overwhelmed and it's easy for misinformation get into the system. borrowers should have a ance to correcthat before their home is tan away. >> reporter: atabilization in home prices may give lende more leeway to work out loan for a boower who could still default down the road. but alyst andy laperriere says many mortges made during the boom can't be work out. >> one of the biproblems is that a lot of people had lns they cld not even come close to affording and so st the economics juston't work, even if you get some supporfrom the governnt in terms of subsidizing the lenderor lowering the paymes, the person's debt toncome is so hi, it just doesn't make any sense, it makes re sense to foreclose. >> reporter:3 million foreclures are expected over the next five years, keeng the pressure on leers to work out

troubled mortgages. the adminiration will also keep t heat on lenders, with plans to make public h many loanodifications each of the 25 companies ithe program have ne. stephanie dhue, "nightly business report," shington. >> suzanne: u.s. a chinese leaders say thaction's they have takenave helped pull the world's nancial system back from the edge. as they wrped up two days of high level talks iwashington, both countries are proming to continue makinprogress on financial d economic reforms. china says it willontinue to boost dema at home in order to reduce reliance exports to the united stas. the u.s. is proming to rein in our dget deficit and tighten financl regulations. >> paul: wall street g off to a slow and lower srt amid some corpate earnings that, unlike the recent trend, were not tter than expected. u.s. steeloffice depot and crane company weremong the examples. additional sellingas triggered a bigger than expected decline in july conser confidence. at noon, the dowas down 81 points with the nasd off 16. stocks snt the afternoon

nsolidating recent gains and ended narrowly mixed. the dow fell 11.79oints to 9,096.72. but the nasd composite rose 7. points to 1,975.51. the s&p 500 indeslipped 2.56 points to 9762. in the bond rket, the 10 year note rose 10/32 95-13/32 putting the yield 3.69% >> suzanne: president obamsaid today medicare benefits uld be at risk wiout healthcare reform. the present said the medicare trusfund will be out of money within a decade less lawmakers overhaul the system.

joining me now with a discsion of the nation's medire program is guest tricia neuman, direor of the kaiser family undation's medicare policy project. tricia, welcome. >> thank you vy much. >> suzan: well, medicare as you know turns 44this week an i guess bihdays are alwa a od time to take stock so i want task you, let's begin with, do you thinkhe medicare ogram is successful? >> i tnk medicare has been enormously successful. if you think about the stt of the proam, at that time, ls an half of all seniors h health insurance. so tod, all seniors have health insurance. they c get coverage thout rega to any health problems or without regard to their inme and by andarge, niors are very satisfiewith the program. it's a veryopular program, so, yes, i do thi it's been quite suessful. >> suzan: clearly, funding is one of the maj challenges facing the program. what are some the other challenges, though, that they're going to be dealing with >> wel actually benefits are a real pblem.

medicare is actually less nerous than most large employer plans. so one of the issues i finding a way to improve benefit so that seniors get the benefits that they need and a great examplof that is the drug benefit that has coverageap or a doughnut hole. >> suzanne: so how do medicare fit into the wle debate healthare reform? how is it possibler possibly going to be addreed with health ce reform? >> well, medica fits in in a number of ways probably a mar way woulde that medicare is helping to fund some of the improvents in the heth reform package. there are significant medica savings, many of which are in eas that a sort ofight f cuts. a grea example ofhat is cuts in pments to medicare advantage plans for which there ha been overpaymentover the past several years. these savings are going toe us tohelp fund coverage expansns for other people.

medicare is also a driverof health systems reform, and i know that people on thehill and the administration hope to use medire to improve the delivery system to help make quality of cre better and to manage care bter for people with chron conditions, bh on medicare and me generally i the health care stem. >> zanne: what about the fuing challenge though how is the health care refo likely t address theroblem of fundg medicare? >> right, the funding challenges are very real, but actually, the health reformlan that is moving tough the house would signifantly improve medicare's fiscal status adding five years life to then medicare trust fund which is curreny scheduleto bensolvent by 2017. actually, medare could be the sf-winner of health reform beuse it could contributeto medica's fiscal srength over a period of time and that would be a great thing. >> suzne: now, we can't talk aboumedicare without talking about part d which is the

prescription dg portion of medicare. w, will health care reform and the types of reforms that we're lking about address the problems of par d? >> well, um, it's a possibility. it's too early to kno the drug benefit as you know has been in effect for a little bit re than three years a one of the issues that is just real problem is the coverage gap. the bill that is moving through the house do try to close this covege gap which would provide real relief to seniors when they get to that pnt when their drug benefit doesn'tay any of their prescription drug cts and ey have to pay full freight. so if that provion stays i the package and ifhe healt reform plan passes, then that could provide real help to seniors in the ne term. >> suzanne: uhuh. we only have a w seconds ft. let me st of conclude by scug, generally, wou you say that medicare is an efficient program? is it something wean use as a model when talking out health care refm?

>> medice itself is qui efficien when you look atdministrative expenses, medicare's administrative costs are about 2% of the total. you'd be hard-pressed to find a prate insurance plan with such low overhead. one way medicare really is a model is ithe way of opeting fairly efficientlyn terms of low ovhead anthat coul could --hat model and that level of efficiency could bring eat savings into the erall syst. >> suzanne: thk you. i thi we have to lea it there. thank u for educating me tonight. >> you're quite welcome. >> suzanne: my gue this ening, tricia neuman of the kaiser famy foundation.

>> paul: big blue is getti a little bigger. i.b.m. todayaid it's paying just over a billion dolls for business analytics software maker s.p.s.s. softwar the $50 a share alcash deal has ny on wall street hoping for a retu to the boom days in the m&a market. but as scott gurvey ports, the ju in deals may be just a case of opportunity knockg. >> reporter: i.b. gobbles up s.p.s. sprintwallows virgin mobile. agilent gulps down vian, and that's just o days of headline a activity. from amazoand zappos-- to bristomyers squibb and merex-- mergers and quisitions seem to be breaki out all over wall reet. thas burnett of wall street access says that's a sigof a change in outlook >> corporate board rms are beginning to see tt we're through the worst of t overall economic receson and that going forward looks like we can envision gwth. it may not be this quarternext

quarter or earlyn 2010, but going forwd we're through the worst and thin are going to start to get better. >> reporter:ut if confidence returning, it's cautionary best. the value of the deals year date is only 35% of end july last year. rich peterson of s&p ss if you are looking for a turn to a trillion-bucks-a-year m&pace, don't holdour breath. >> that's t to say there's a buyer's strike. there's deals thatre going on. buin terms of the large mega- als that we saw back in 2006 2007, in the hey-day oprivate equity, the are not on the horin any time near. >> reporter: one reason currt deals e relatively small is that prite equity money, which used to fundbout half the m&a activity, has almostompletely dried up. that won't change until th creditarkets improve. foinvestors looking to buy into companies tt could be takeer targets.

burnett says small energy companies will be attractivef e price of oil continues to rise. and smaller alth care providers may be bout by laer firms seeking econoes of scale as they ada to new health care reforms. >> it's gog to get more mpetitive. you're goingo perhaps be competing th the federal government oone hand. you're going to be tappi into all these uninsured people whatever the number is. and to get thereit's going to be difficult for t smaller coanies. so we're expecting probabltwo or three deals maybe as manys lf a dozen deals in the h.m. space. >> reporter: burne says he's t looking for health care deals until d unless a reform package isigned into law and the details are known. scott gurv, "nightly business report," new york. >> suzan: regulators want to turn up thheat on the energy market. the head of the mmodities futures tradg commission says his agency must riously consider tough limits spulative energy trading. gary gensler says the idea ito curb excessive tradingnot eliminate speculation l

together the agency tnks too much paul, asou know, last year that same agency said supplynd demand not sculators 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