sot--from eastabrook pkg) ...right now, profits aren't >> lehrer: good evening. i'm jim lehrer. stocks rose early today after weeks of decline. but the market then evened out later over worries of a slowdown. >> ifill: and i'm gwen ifill. on the newshour tonight, we get an assessment of the nation's economic outlook from treasury secretary timothy geithner. >> lehrer: we look at today's white house meeting between president obama and israeli prime minister netanyahu. >> ifill: betty anne bowser reports on a new program for the hard to insure.

>> if you're one of those millions of americans who is uninsureable because of a pre-existing condition like heart disease or cancer, help may be on the way this summer. >> lehrer: margaret warner talks to global post reporter jean mckinsey about u.s. efforts to build up local security forces in afghanistan. >> ifill: and geoffrey brown talks to artist chuck close and his biographer christopher finch about art and overcoming adversity. >> i have a great deal of difficulty recognizing faces. especially if i happen to... if i've just met somebody, it's hopeless. >> brown: you are known for portrays of faces. >> i was driven to make them. i'm absolutely positive. >> lehrer: that's all ahead on tonight's newshour. >> major funding for the pbs newshour has been provided by major funding for the pbs newshour has been provided by:

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 >> lehrer: the stock market rallied for the first time in more than a week. the dow jones industrial average was up more than 170 points before doubts about the economy took hold again. the dow finished with a gain of 57 points to close at 9743. the nasdaq rose two points to close near 2094. market fears have been magnified by weakness in job creation and housing and investors remain nervous about financial reform. we talked about this earlier this evening with treasury secretary timothy geithner. mr. secretary, welcome. good to be here, jim. >> lehrer: as the... has the economic recovery taken a sudden return for the worse? >> jim, the economy is healing. it's getting stronger.

i'm very confident we're going to continue to grow and continue to make progress not just repairing the damage caused by this crisis but build ago stronger economy that is going to create better opportunities for all americans. >> lehrer: it doesn't seem that way. all the current things, the stock market, jobless rates, we'll go through these specifically in a moment. there's a feeling that there might even be a double-dip recession coming. you don't feel that. >> it's important to recognize that the scars of this crisis cut very, very deep. just remember what it was like a year-and-a-half ago. you saw people across the country saw their savings fall by more than 40%. thousands of businesses were closing their doors. millions of americans lost their jobs. in january alone of 2009 the economy lost three quarters of a million jobs. we've now had six months of sustained growth in jobs by the private sector. ex-pours are doing relatively well. investment is increasing. you can see companies across this country in high tech and lots of other industries doing very well because we are a

very resilient country, very strong country, and this president acted with enormous political courage to rescue the economy, took some very tough steps, not popular steps to rescue the economy, fix the financial situation early and take on the tough reforms. because he did that, we're going to emerge from this stronger. >> lehrer: if it's going so well, then why do so many people feel it isn't going so well? >> again the scars of this crisis were traumatic. you know, people experienced something they hadn't experienced in their lifetime which was to see their savings plummet, terrible blow to basic confidence. you are still seeing lasting effects of that damage on business confidence and how people feel about their basic lives. people feel understandably a little cautious and tentative. we've seen a little concern about europe wash across the american economy. no recoveries are even and steady. what you can say today with confidence is we're in a much stronger position today than we were

18 months ago, much stronger position to deal with our challenges ahead. we're going to continue to work and make sure we make progress in repairing what was damaged, restoring a basic sense of confidence to the american businesses and the american families. >> lehrer: everybody would agree that the biggest concern everybody has is their jobs. their job and other people's jobs. seven million jobs have been lost since the crisis and only 600,000 have been recovered thus far. >> no, we've got a long way to go absolutely. again it just shows again how deep the hole was, how bad things were. we're making progress. economy is growing. you need growth before you get job creation. the economy has been growing now for a year. we've had six months of sustained increase in job growth. incomes are rising again. people are working longer. that's going to continue to get gradually better. again, we're going to keep working at it trying to make sure we're doing everything we can to make sure this economy is is growing. people have more opportunities. you know, better confidence

they're going to have a chance in the future. >> lehrer: speaking of confidence. as the downward moves of the stock market in the last several days and weeks, does that trouble you? >> again, you had a... we had a long run of improving markets. home values more stable. the value of people's savings increasing again. that's very good. it's a sign of greater confidence again. again, you've seen, you know, recoveries are never even, never steady. you see a little bit concern coming from europe about their capacity to manage through these problems. i think they will manage through their problems in europe. i think they're taking the steps they need to take to get growing again. if you look across the rest of the world, china, india, brazil, mexico, emerging markets are very strong now. america is very good at producing the things that those countries need. we have the most productive workers in the world. our great companies operate at the frontier . that's one reason why we came out of this crisis more quickly than other countries

and again we're going to continue to make progression, jim. >> lehrer: but at the microlevel, at the human level, some of the congressional oversight people on housing estimate or say that there's going to be a million more foreclosures every year for the next several years. >> housing is still very tough. it's still very tough. >> lehrer: what really matters to people plus their jobs. everything else is kind of secondary to that. >> for people who own a house in many ways it's still their most important financial asset. they'll still have savings in the bank that matter to their financial security but the value of their house is still very important. when the president came in, most forecasters thought house prices could fall another 30%, but in fact we've seen almost 18 months of basic stability in house prices because of the actions the president took. it's much more affordable now to borrow to finance a house, to refinance, and the president has put in place a series of programs to give more americans a chance to keep their home if they can afford to do that. these programs are helping to lower their monthly payments

but again housing... the housing market is still very hard. very tough out there. a lot of challenge still ahead, but that basic measure of progress which is a little more stability is enormously important. >> lehrer: there again on the individual level, there are ... you mentioned some of the federal programs. $50 billion set aside for... to help people with foreclosure problems. that was started 15 months ago. yet only $200 million of that money has been spent. >> this is a very important program. again, what the president did right away was to take a variety of steps to try to make sure we bring interest rates down to make it more affordable for people to keep their house. that's very important. as you said, that's one of the most important financial assets a family has. but he also put in place this program that has given more than a million americans a chance to stay in their house. those programs lowered monthly payments very substantially.

an average of $500-$600 a month for people who benefiteded from those programs. we're going to continue to work to make sure those programs reach as many people as they can. we've announced a series of programs for states. the ten states most hit by falling home prices, high unemployment to make sure they have more resources to help homeowners that are unemployed or suffer some other financial, unanticipated financial problem. we're going to keep working to make sure these programs reach as many people as we can. >> lehrer: isn't it correct to say that it really hasn't touched that many people. >> the stability in house prices and the lower interest rates touch millions and millions and millions of americans. everybody who has a house benefits from those things. and the president's programs again have given more than a million americans a chance to stay in their homes and take advantage of the lower monthly payments. these programs are frot not going to be able to reach all people hurt by this crisis. they won't benefit investors who speculated in house prices. they don't go to the most fortunate americans that bought very, very expensive homes or a second home.

they're not going to reach people who lied about their income, were unable to prove that they had income, weren't able to prove they're eligible but they are reaching and have made a very big difference in the lives of more than a million homeowners giving them a chance to stay in their home. >> lehrer: the financial reform legislation. any question in your mind it will eventually pass the senate and be signed by the president. >> it should pass and looks like it will. all americans have a stake in this financial reforms. 18 months ago people saw worse financial crisis in generations. the value of their savings fell by 40% on average. millions of people lost their jobs, lost their homes, saw businesses fail. this crisis touched everybody and it demonstrates why all americans have a stake in reforms that are going to give better proceed techs for americans and make sure that the finances go back to the main street businesses get access to credit so they can borrow to invest and expand. >> lehrer: it's a very complicated bill. we don't have time to go through the whole thing. one of the things that causes

the financial crisis was this too big to fail idea particularly among the banks. most of the analysis, the current situation is these banks are not only as big as they were but some of them are bigger than they were when the financial crisis hit. so how is anything going to change? >> two most important causes of this crisis, jim, were we allowed a bunch of financial activity to operate in the shadows. firms take on enormous amounts of risk without the financial cushion capital to back those investments. we let millions of americans be taken advantage of. vulnerable to fraud and abuse. that's what causes this crisis. now what this bill does though is extend to all americans, consumers and investors, much better protections against fraud and abuse and predatory practices and will limit risk taking by these large institutions so they can never put the economy in a position where the mistakes they make put the economy at risk as a whole. >> lehrer: if this bill becomes law, does that mean

you no longer at risk on a similar financial crisis? >> we will have a much better chance to prevent future crises and limit their damage, act much more effectively and much earlier and not leave the tax payer exposed to bearing the burden of these crises. these are very tough and strong reforms. they will help restore trust and confidence in the system. think back, jim, to the great depression. it took this government four years after the great crash of 1929 to put in place basic protections for banks and the securities laws. those reforms laid the foundation for decades of the most impressive record of investment, innovation and growth any major economy had ever seen. we allowed risk to operate in the shadows, the market outgrew these protections and the damage caused by that failure was catastrophic. but what these reform dozen is prevent that from happening again. they'll extend these protections across the economy and make sure banks can't take risk on a scale that they can damage the economy as a whole.

>> lehrer: putting all this together now, mr. secretary, after these many months and here we are now. do you understand why there are still millions of americans very angry about what's happened to them as a result of the financial crisis and the economic crisis that has followed and so many of these things have yet to be fixed. >> absolutely. people are still incredibly angry and frustrated that they, who were responsible, careful, were damaged by the actions of people who were irresponsible, by the failures of washington to provide basic protections against financial crises. again, the scars of this crisis cut very, very deep. they're going to last for a long time. that's why all of us in washington have such a great responsibility and obligation to make sure we are working every day to make sure we have an economy that is creating jobs at a faster pace. we've fixed what is broken. again, we restore confidence in the basic strength of america and providing opportunities to those who work hard.

>> lehrer: mr. secretary, thank you very much. >> thank you, jim. >> ifill: still to come on the newshour, mending u.s.-israeli relations. ensuring high-risk patients. building up afghan forces. and painting huge portraits. but first with the other news of the day here is hari sreenivasan in our news room. >> sreenivasan: the u.s. census department... block the new immigration law. the department filed suit today in phoenix. it charged the state statute encroachs on federal authority over immigration. the law in question makes it a state crime not to have an alien registration document, something no other state has done. it is due to take effect on july 29. oil stained more of the u.s. gulf coast today. officials reported crude in various forms has penetrated deep into the sensitive waterways of lower louisiana. two-and-a-half months into the gulf spill there were fresh signs that its reach is still spreading. oily sheens and tar balls were spotted in lake ponchartrain,

the giant salt water to the north of new orleans. an eight-mile water way that passs from the gulf into the lake. crews put a barge in place to try to slow the spread. >> it won't stop the oil entirely. we get very strong currents through the rigolets. you need to actively skim it. >> sreenivasan: tar balls have been found on texas beaches near galveston. that means all five gulf states are now oil affected. in houston today retired coast guard admiral thaad allen said the first of two relief wells is now within 265 feet of the damaged well. >> right now they have what they call a depth to distance time graph. they are about seven days ahead on that graph right now. the last part of this is the slowest, most meticulous part. they don't want to inadvertently nick that well on the way down. they want to have this be a controlled entry into the well bore. i'm sticking with mid august. i learned in dealing with you

people over the last 70 plus days it's better to underpromise than overdeliver. >> reporter: out in the gulf efforts continue to burn the leaking crude. b.p. said the operation accounted for nearly a million gallons over the last day and a third ship was brought in to begin capturing oil. b.p. said that will enable it to double its collection capacity to more than two million gallons per day. it's estimated up to 2.4 million gallons a day are blasting from the sea floor. the heat wave gripped much of the country today. stretching from maine to texas and breaking records, the worst of the heat and humidity was concentrated on the eastern seaboardment temperatures topped 100 degrees in washington d.c. and philadelphia. 14 north eastern states were under heat advisories. electric uwe tills reported spotty outages but said they had taferm capacity overall. the price of mailing a letter may be going up again next year t postal service today announced a rate increase of two cents to offset growing losses. the price of a first class stamp would rise to 46 cents. if the independent postal rate

commission approves the increase will take effect in january. queen elizabeth ii addressed the united nations today for only the second time during her long reign. she last made an appearance at the u.n. in 1957, just four years after she was crowned. today she appealed for world unity and peace. >> for over six decades, the unite nations has helped to shape the international response to global dangers. the challenge now is to continue to show this clear leadership while not losing sight of your ongoing work to secure the security, prosperity, and dignity of our fellow human beings. >> sreenivasan: later the queen paid tribute to victims of the 9/11 with a stop at ground zero in lower manhattan. a government minister led hundreds of protesters in a siege of the u.n. compound in sri lanka today. they demanded that u.n. officials stop an investigation of alleged

abuses during sri lanka's civil war. protesters burned effigies of u.n. secretary general ban-ki moon who established the investigative panel. up to 200 u.n. staffers were trapped in the compound for much of the day. in lebanon thousands of people marched in south beirut for the funeral of the country's top shiite claire i can, the grand ayatollah. the sea of mourners filled the streets as the ayatollah's coffin was carried from his home to a mosque for burial. he died sunday at 75 after a long illness. he had denied being a spiritual leader of the militant group hezbollah. those are some of the day's major stories. now back to gwen. >> ifill: inside the white house, two allies try to patch up their relationship. israeli prime minister benjamin netanyahu and president obama had a full agenda on tap for today's oval office meeting. but after months of public disagreement over settlement construction and the blockade of gaza, fences had to be mended first. >> the bond between the united states and israel is

unbreakable. it encompasses our national security interests, our strategic interests, but most importantly the bond to of two democracies who share a common set of values and whose people have grown closer and closer as time goes on. >> reports about the demise of the special u.s.-israel relations ... relationship aren't just premature. they're just flat wrong. there's a depth and richness of this relationship that is expressed every day. >> ifill: the last time netanyahu came to the white house, no coverage of the meeting was allowed. mr. obama appeared to snub the israeli leader. that was shortly after israeli officials surprised the u.s. by announcing additional settlement construction in east jerusalem.

while vice president biden was in the country. in may, the u.s. also joined other nations in questioning israel's decision to intercept turkish ships headed toward gaza. nine protesters were killed. but today as the two met for their fifth meeting since taking office, mr. obama said any notion that u.s. and israeli ties have frayed is wrong. >> i believe that prime minister netanyahu wants peace. i think he's willing to take risks for peace. and during our conversation , he once again reaffirms his willingness to engage in serious negotiations with the palestinians. >> ifill: netanyahu affirmed his support for face-to-face talks with the palestinians. his cabinet endorsed the move on sunday. >> israelis are prepared to do a lot. to get that peace in place. but they want to make sure that after all the steps they take that what we get is a secure peace. >> ifill: still the question of settlement building remains

a major sticking point. a temporary moratorium on new housing construction in areas palestinians claim for an independent state ends in september. and israeli human rights group reported today that jewish settlements now control more than 42% of the west bank. palestinian negotiators spoke today in jericho. >> the key to the negotiation s is in the hands of prime minister netanyahu. it's up to him. he has the choice. we want that negotiation. >> ifill: prime minister netanyahu also faces pressure at home. from israeli voters. yesterday thousands brought tel aviv to a standstill demanding the government do whatever it takes to free israeli soldiers. he's been held by hamas militants in gaza for four years but those tensions took a back seat today in washington where the two leaders turned their attention to refreshing an old alliance. joining us now to assess the stakes and the undercurrents

at today's meeting are robert. until last month the head of mission for the international group working on the peace process. a former deputy assistant secretary of state under george w. bush, he's now a senior fellow at the council of foreign relations. and robert malley who was special assistant to president clinton for arab-israeli affairs. he's now the middle east program director at the international crisis group. mr. malley, stephen hadley the former national security advisor to president bush was quoted last week as saying this meeting between these two was doomed to success. he's speaking about the atmosphere of it. is that right? >> that is right. i think both president obama and prime minister netanyahu had one overriding objective which is to overcome what had been a very troubled relationship in the past. they paint a very different picture. they had different reasons for doing that. in the case of president obama, the fact that he reached the conclusion that the months of tension over the issue of settlement construction between

his administration and mr. net netanyahu's government had not been particularly beneficial to the u.s., a fight that the u.s. administration picked perhaps at the wrong time on the wrong issue. this was a meeting that was , as steve hadly said, doomed to succeed because both sides wanted it. >> ifill: did that work? >> by all accounts it has. they clearly evidence new friendship, a new desire to move forward. this is a prerequisite for being able to make serious progress together. >> ifill: did you detect any movement in many of the key issues on the table. let's start with one of them. this movement toward direct talks. benjamin netanyahu has been saying for some time that's what he wanted. this is now met with and embraced from the other side. did you get any sense today there was movement or was it just more talk? >> i think on the one hand the two leaders managed to bury or to hide their differences. they didn't manage to resolve them. the main difference is not over whether there will be direct talks or not.

the main issue which we're going to confront if not today in a few months down the road is what the two parties, what the u.s. and israel believes is right for the peace process, how far israel is prepared to go and at what pace. on that issue both sides at this point are prepared to say let's sort of ignore our different substantive views and address a very different issue. that will confront them either in september if direct talks begin or down the road. but ultimately they're not going to be able to ignore what is at root what the reason for the disagreement in the past which is they don't have the same vision about how quickly and what direction the peace process needs to go. >> ifill: the president said today of the question of the settlement moratorium that someone asked him whether they would extend the freeze. he said, well, these talks will probably solve all that. we won't have to deal with it. is that a realistic possibility? >> i think when the moratorium expires on september 26 prime

minister netanyahu will be in a difficult position. he's going to have to make a very difficult choice. either he's going to have to decide to renew the moratorium in which case he's going to be he's going to mobilize right wing opposition in israel. people will criticize him for having said that he would not renew it when he did initiate it the first time. and then they'll say he went back on your word and you did so or he's going to choose not to renew the moratorium in which case the international pressure will be tremendous. if they've already.... >> ifill: a rock and a hard place. >> very much so. very much so. if the talks with the palestinians, the direct talks, have begun already, it will be a real challenge to see whether or not they can be sustained with that moratorium lapsing. i don't think they can. >> ifill: do you think they can? >> i think it's going to be very hard for president obama. he himself, the palestinian president is between a rock and a hard place. on the one hand i think it's true he wants direct talks. my conversations with palestinians suggested they understand that indirect talks will have a better chance of

having the u.s. on their side hopefully as they see it putting pressure on israel. on the other hand, president abbas faces his own domestic constituency, people he has been told will not direct talks unless there's a complete settlement freeze, unless we have an agreement on what the final destination is going to be. he could come back partially on on his word and i think he will. he can't simply ignore what he said in the past and tell his people, "forget what i told you. we're now moving on to direct negotiations." >> ifill: as interested as the president seemed today in talking about direct talks and getting the peace process back on track, prime minister netanyahu seemed interested in talking about iran and about the threat to israel's security from iran. was that them talking past each other or are they working towards some sort of an agreement about what to do? >> i thought that was interesting today was both sides seemed to go out of their way toe try to address the concerns of the other. both sides went out of their way to point out, for example, prime minister netanyahu talking about the importance of peace and wanting peace. president obama speaking about

iran. and prime minister netanyahu praising the president for what he's done on iran. clearly , they have different priorities. that cuts to the core of their difference. for president obama, moving forward on israeli-palestinian peace is a strategic interest. and national priority. for prime minister netanyahu, the priority is iran. they tried to come to some understanding today or at least to come to a agreement on this. >> ifill: they both seemed to set back. maybe this happened on the question of the blockade of gaza. there have been interim steps taken which have eased... which have allowed some goods to go across the board he. check points have opened. >> i don't think gaza has moved past the problem. it's not so much the availability of goods but the problem of redevelopment. gaza has been suffering from the lack of economic life for many years.

even before the blockade. my fear is that people are quite happy. there will be more goods going to go into gaza but the real problem today is not that goods aren't available but that people don't have the money. people don't have the economic life. people can't export or travel. that's what's really going to condemn gaza not just the poverty and the non-non-development. it could be a recipe for confrontation in the future when ha has tries to govern gaza and they say this gnt going anywhere. time to go back to the gun. >> ifill: as both sides, israel and the united states, you say they're on the same side, as they try to work out something in the next few months, how is president obama viewed by this israeli administration? >> i think this administration has viewed the ... this administration with a certai degree of indecreed you'llity. they've been confused. they came back a few times from washington. they said we're not exactly sure what

the united states wants from us. i think this has been symptom atic of a real problem, the fact that the two leaders haven't come to an understanding with each other, that they can spend as much together h time together in the oval office and still not really understand each other. today was about trying to current temperature to a new understanding. >> ifill: there was something that prime minister netanyahu said that was interesting at the very end of the meeting today. he said we are both two leaders who (inaudible) is this a case in which they can con found the cynics? >> they certainly could. if they were able to reach a peace agreement the one who confounded the cynics would be netanyahu. people are judging him or misjudging him. the perception is he's not going to be able to go as far as his pred sezors and his pred sessionors didn't go as far as the palestinians wanted him to go. it's pretty hard to see how they're going to get there which under scores the fact that this meeting was about projecting the image that things are back to normal. i don't think we really know

where the two leaders are going to go in months or perhaps years ahead when they confront the real dilemma of what does it mean to reach a peace agreement? what kind of compromises are you prepared to make? >> short of reaching a peace agreement, can they con found the cynics? >> we'll know in the next few weeks. the president made it very clear that he expects movement on the ground in the next few weeks and the prime minister affirmed that you would see steps in the next few weeks. >> ifill: he did say that. >> i think the test will be rather short. >> ifill: we'll say and see what is that. thank you both very much. >> thank you. >> ifill: now a health reform update on coverage for the uninsured. new programs are taking effect in states this summer to provide insurance for some who have not been able to get coverage at all. but there are questions about just how effective they will be. newshour health course betty anne bowser reports our health

unit is a partnership with the robert f wood foundation. >> reporter: on the outside 58-year-old looks like the picture of health. she eats right and keeps in shape by taking daily walks with her dog mischa near her apartment in northern virginia. but on the inside, she is fight ago serious heart condition called cardio myopathy that weakens her heart. equally important, it also makes her uninsureable. >> it's frightening. right now because my health is pretty stabilized. the only thing that i'm worried about is if i have a catastrophic event. what if i have a heart attack? i really love this picture. >> reporter: she has had no health insurance since last fall because of her pre-existing condition. the federal government estimates that hundreds of thousands of americans share her dilemma and are denied insurance coverage because of health problems. but starting this summer, they'll be able to apply for temporary coverage through the

pre-existing insurance plan. it's part of the new health care reform law passed in march. the plan is designed to provide coverage until 2014. that's when the broader rules that will forbid insurance companies from denying coverage to all individuals with health problems kicks in. richard popper heads the new program for the department of health and human services. >> the pre-existing condition insurance plan is designed to provide immediate coverage, access to coverage, for people who are blocked out of the insurance market. >> reporter: popper who ran the maryland state high risk pool before he took his post at h.h.s., estimates as many as 400,000 americans may enroll in the new federally funded program. >> you talk directly to the radiation oncologist. >> reporter: 29 states in the district of columbia will run their own high-risk programs using their share of a $5 billion federal pool of money set aside.

21 others have opted out. in those states h.h.s. will run the pools through a third party administrator. to qualify applicants must be an american citizen, have been denied coverage by an insurer because of a medical condition, and be uninsured for at least six months. for carol, all of this can't come soon enough. right now he's stuck paying out of pocket for her medical care and prescription medication which she estimates totals $8,000 a year. >> for me to see my cardiologist again, i should have another echo cardio gram. that will be $1200. in the back of my mind there's always that fear, you know, if i have a twinge in my heart or one day i might be feeling a little lessener energetic, i'm thinking, oh, god, i hope i'm okay. i hope this isn't the beginning of something that is not going to be affordable to me.

>> reporter: people who sign up can be charged no more than what healthy people pay for insurance coverage in their state. but the federal government will pay the difference between that and the actual cost of the premiums. dollar amounts will vary from state to state. >> the money that we believe that the federal government would provide us to operate the program wouldn't last . >> reporter: virginia secretary for health and human resources, dr. bill hazel, says that's why his state decided not to participate. >> we went to our carriers, our vendors and said, okay, how much would it cost if we were following the new rules if this were to be a high-risk pool? the answer roughly was $500 per member per month which is about $6,000 for every individual in the plan for year. >> reporter: hazel and his staff did projections based on a scenario yo of 10,000 virginians buying in. >> if 10,000 people signed up

for this and if 10,000 sigh signed up at $6,000 a year we would run out of money in 22 months. we didn't need to go any further than that. we felt that that amount of money would not cover even a small number of people with pre-existing conditions coming in to the high-risk pool. what would then happen to virginia when the money runs out. >> reporter: what would happen? >> well, that's what we don't know. >> reporter: running out of money from the federal government is the main reason most states have given for opting out of the high-risk program. so under the new law, it's now up to the department of health and human services here in washington to develop coverage for people who live in those states and are hard to insure. even the non-partisan congressional budget office reported recently that the funding of... available for subsidies would not be sufficient to cover the costs of all olympicants through 2013.

and a.c.b.o.predicted h.h.s.would have to use its authority under the law to limit enrollment in the program. popper says he thinks the $5 billion is adequate. >> we have ways of managing that money to make it less. we can adjust some of the cost sharing. we can shift money between the states because in some states you could have very dramatic enrollment growth. other states not so dramatic because of the nature of the marketplace. we can also take a look at the way the premiums are calculated. >> reporter: but the premiums, even with the federal government paying a substantial part of the cost, may be too high for some people to afford. h.h.s. estimates premiums will run between $140 and $900 a month. deborah chollet is a health insurance expert and senior policy fellow at mathmatica policy research in washington. she says who will be able to afford the program is a big unanswered question. >> there's really no good way to know. i think when people apply to

the high-risk pool even though it will be subs subsidized substantially, even though it is unique and that the premiums will be at market rates for healthy people , i think they will still be amazed at how expensive it is. >> reporter: but h.h.s.'s popper says the program is designed to be a temporary one. >> it's not a solution for everyone because there are still a lot of issues and challenges in the insurance marketplace but it's designed to be a bridge until 2014 when the more significant and larger health reforms take effect. >> reporter: according to a new h.h.s.website the estimated premium for a 50-year-old will be between $440 and $538 a month in virginia. but caroline is not convinced her premiums will be that low. >> i'm really interested in finding out how much the premiums are going to be. what the deductibles are going to be. basically i want to know if

that will be affordable to me. >> reporter: she says she's praying the pre-existing condition insurance plan will get her to 2014. >> next a report from afghanistan on efforts to build up local forces to fight the taliban. margaret warner has that story. >> warner: for years the international community has been trying to beef up the afghan national army and police. with mixed, often disappointing, results. other u.s.-backed afghan security programs have received less attention, but that's what kabul-based correspondent jean mckenzie focused in recent reports on the international website globalpost. her reporting took her to several provinces beyond the capital. jean is in the u.s. now and joins us from boston. jean, welcome. you looked at a couple of these sorts of programs set up

in particular since the obama surge began. these exist outside the formal afghan police and army structure. what was the thinking behind it? why do this? >> well, the thinking behind it was to increase the numbers of security forces as quickly as possible. and to try to get some handle on a situation that is deteriorating quite rapidly. they wanted to use the disaffection of that many communities feel towards the taliban, focus that and direct it in a form that has a chance of counteracting the insurgency. >> warner: let's look at the first one you looked at which was one in a province fairly close to kabul. the road between the two early last year was a no-go zone. marines went in there and also set up a local militia. how did it operate and what were the results? >> it operated by bringing

about 1200 men into something called the afghan public protection program. or ap-3 for short. these men, many of whom had returned from working abroad, some of whom had come in from training the taliban, were given a salary of approximately $180 a month. they were given three weeks of training, a uniform, and powered to carry a gun. and told to protect their communities. they were not formal police. they were not auxiliary police. they were more of a kmoount watch type program. only they were armed. >> warner: now, you reported that actually the province did become more secure. yet this model has not been replicated elsewhere. why is that? >> well, the province did become more secure in part. and many people, including the governor attribute this to the afghan public protection

program. however, it's equally possible that the increase in security is owed to the fact that u.s. marines established a base at about the same time. what they have found is that the program has had very limited success. it has in many ways become a magnet for the taliban. there is a certain amount of coordination and collaboration between the ap-3 and the taliban that people do not understand, that the americans do not seem to understand very well. and the thinking is that there are better ways of trying to do this. >> warner: let's look at another way that you looked at that's in kandahar and a number of other provinces. how does that one work? what's different about it from the other version? >> well , the local defense initiative or what's now being called village stability platforms does not

rely on bringing men in and giving them a salary or a uniform or a gun. rather, it is empowering tribes. these programs are mostly in the pashtun region. empowering tribes who feel that they want to fight the taliban , giving them some training, empowering them to carry guns. and hoping that they will, in fact, keep the taliban out of their communities. >> warner: but you found it actually did cause some violence that was unanticipated or some intratribal violence? >> that has happened in several of the places where this was tried. the problem is that in the first place, the first major program was in nongahar province and a certain tribe, the shinwari were promised up to a million dollars in reconstruction aid. this caused problems with other tribes in the area and also within the tribe itself

when one branch was promised the money the other branch was not. so rather than coming together, rather than providing cohesion for this tribe, the promises and the money caused factionalism that related in violence. >> warner: general petraeus has just taken over command of afghan forces as we know. do the military people you're talking to there think he's going to continue these? >> yes. in fact, we've seen several new areas receiving these village stability platforms just in the past month or so. this seems to be the wave of the future. there's a great emphasis on trying to gear up the afghan national security forces, of course. but also in these less formal type groupings to try anything really to counteract the insurgency. >> warner: you reported though that this is not popular or well regarded among the civilian leadership of the

u.s. effort in afghanistan. i.e., the ambassador, the embassy. >> there seems to be some difference of opinion between the civilian side and the military side. in fact, a little over a month ago, the american embassy issued a directive that no civilians, no american civilians would be involved in this type of programming. the village stability platforms, as they're now known, seem to set in motion forces that we do not understand very well and do not seem very well able to regulate. so i think that there is quite a difference of opinion between the two sides here. >> warner: been quite a lot for general petraeus to sort out. jean mckenzie from globalpost, thank you so much. >> thank you, margaret. >> lehrer: finally tonight, a portrait of artist chuck close

, in work and life. geoffrey brown has our conversation. >> brown: chuck close is best known for his large scale portrait paintings. some strikingly realistic, others a kaleidoscope of colors. he's also known for overcoming serious odds, growing up in working-class washington state with learning and physical disabilities before graduating from yale's graduate school of art and becoming an art world star. and then at age 48 suffering a collapsed final artery that left him partially paralyzed and wheelchair bound. an exhibition of close's print making work is opening at the corcoran gallery of art in washington. a new biography has just come out a companion to an earlier volume on close's art work. joining me is the former curator at the walker arts center in minneapolis and artist chuck close. welcome to both of you. there has been a lot written about this man. a lot said about him.

what were you after in write ago book? >> i had known chuck a long time. i felt i knew a lot about chuck. but what i learned as i was writing this book was astonishing. >> brown: tell us a little bit of that. before we get to the art there is a lot of human drama here. >> most living artists are not suitable subjects of biographies. the moment they die, you can write about them. >> i'm hanging by a thread. >> chuck is is hanging by a thread (laughing) but chuck is very different. even when i wrote the monograph i wouldn't write it without a lot of biographical material because partly because of his childhood and the many problems that he had to go through with learning disabilities and so on in his childhood which he has in common with a lot of other artists like andy war hole and robert rauschenberg and so on. of course there's the central event in his life.

>> brown: you called it the event. >> chuck calls ithe event. >> brown: this is a life- changing event where you had to learn a lot of things over again like learning how to paint. >> the interesting thing about having a life-changing event is it was familiar. i had life-long neuro muscular problems, life-long learning disabilities. i've had a life with rocks in my shoes. now all of a sudden it's just some other rocks being inserted in my shoes. my coping mechanisms and the fact that i had these experiences of trying to deal with , you know, really severe learning disabilities including face blindness and other problems that i think stood me in good stead to cope with the problems that came from my spinal artery collapsing and finding out that i was paralyzed from here down and spending eight months

in the hospital and trying to get back to work. >> brown: you just mentioned the face blindness. the name is ... how do you say it? >> pronouncing the name). >> brown: that means that you can't recognize faces. you have trouble. >> it's a sliding scale. i have a great deal of dif difficulty recognizing faces especially if i i've just met somebody, it's hopeless. i will never remember them again. unless it's reinforced over and over and over. even people that i know very well, if i haven't seen them for a while, it's like a bucket with a hole in it. information is coming in but it's pouring out the bottom just as fast. i'm often losing information. >> brown: but, okay, but you are known for portrays of faces. >> i was driven to make them. i'm absolutely positive. >> brown: that's what did it. >> because in real life if you move your head a half an inch to me it's a whole new face i've never seen before.

but if we flatten it out, i have and i take photographs, i work from photographs and i make flat things called paintings and prints. i have virtual photographic memory for anything that is flat. i want to commit them to memory. the only way i can really do that is to flatten them out, scan them, make these drawings and paintings and prints. and then they enter the... my memory bank in a different sort of way. >> brown: i know you don't like the term, the photo realism idea. what is it that you are doing when you paint a portrait of a face? >> well, the reason i don't like photo realists or whatever is that i'm as interested in the artificial as i am in the real. they're made by hand slowly piece by piece not the way a photograph is made or image on an computer screen. and i love that ripping back

and forth. when viewers confront an image that's nine foot high it's hard to see the thing as a whole. they're scanning it. what they're doing is they're doing much the same thing that i do when i paint it which is seeing the journey that i took to build this image. i build them rather than paint them i think. >> brown: when you write a biography of an artist like this, inevitably you're writing about an era of him in his world with other artists. >> yeah. >> brown: what is his role in this world? >> at first it was very much a pioneering role in the days when soho was coming to the fore and people living down in soho basically they were the... they were pry nears down there. chuck was very central to that. >> became more of a mainstream figure. but i think the interesting thing with me with chuck is that he has remained very

relevant for over 40 years now. he is so unique, nobody can copy him. and yet his resonance, the resonance of his work reaches into all kinds of areas, so it's very hard to pin down exactly what that influence is. but that's what makes him so rich and complex. >> brown: let me ask you one last thing. i talk to a lot of writers and artists about the state of the arts today. a world where people might not read as much as they once did. maybe our children in schools don't learn that much about art. where are we in the... what is the state of arts in america today? >> i think the problem with the arts in america is how unimportant it seems to be in our educational system. i went... i grew up in a town that was a mill town, a very poor appalachian-like except it was in the state of

washington. we had a a guarantee right from kindergarten to high school art and music every day of the week. today is considered to be far less important than the three rs. there's teaching for testing. for those of us, especially for those of us who are learning disabled or for those of us who learn differently there was never... we had a chance to feel special . every child should have a chance to feel special. i'm a product of open enrollment. i went to a junior college. that took every taxpayer's son and daughter. if i hadn't had that and hadn't had exposure to art and music and something that i could ex-excel and something i could feel good about, i always said if i hadn't gone to yale, i could have gone to jail. it was a toss-up. it could have gone either way. >> brown: glad it went the way it did. the new book is chuck close: life. christopher finch and chuck close thanks for talking to

us. >> thank you. >> lehrer: again the major developments of this day. the stock market gained for the first time in a week. the dow jones industrial average added 57 points. on the newshour tonight, treasury secretary geithner said the economy is getting stronger despite lingering damage from the financial crisis. and u.s. justice department filed suit to block arizona's new immigration law. the newshour is always online, of course. hari sreenivasan in our news room previews what's there. >> sreenivasan: watch all of jeff's conversation with chuck close on art beat. paul sol upon previews his upcoming report on greece's debt crisis and why the underground economy may be to blame. another economic story dante chinni looks aate what the latest jobless numbers mean for communities across the u.s. on the day west virginia senator robert byrd was buried

art beat remembers his love of music and the love of the fiddle. all that and more is on our website newshour .pbs.org. gwen? >> ifill: that's the newshour for tonight. i'm gwen ifill. >> lehrer: 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: 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. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org