captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. supreme court justice john paul stevens announced today he will retire this summer. >> brown: and i'm jeffrey brown. on the newshour tonight, we look back at stevens' legacy, and ahead to possible candidates to replace him with marcia coyle of the "national law journal," plus law professors kathleen sullivan and john mcginness. >> lehrer: then, we return to the financial crisis commission. they heard more apologies, including from former executives of mortgage giant fannie mae. >> i want to be clear, i was the ceo of the company and i accept responsibility for

everything that happened on my watch. >> brown: we continue our look at what members of congress are hearing about the new health care law. betty ann bowser follows democrat tom periello home to his virginia district. >> health care is not my fight t was about economic relief to working it in middle-class families. seniors who are struggling. if we can save them a little money, that's a really big deal for people. >> lehrer: and we get the analysis of david brooks and ruth marcus, filling in for mark shields. that's all ahead on tonight's newshour. major funding for the pbs newshour is 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. >> lehrer: the oldest member of the u.s. supreme court is stepping down after 35 years. justice john paul stevens had been the leader of the court's liberal wing. judy woodruff has the story. >> woodruff: justice stevens informed president obama of his resignation in a one-paragraph letter this morning. it read: "my dear mr. president: having concluded that it would be in the best interests of the

court to have my successor appointed and confirmed well in advance of the commencement of the court's next term, i shall retire from regular active service as an associate justice, effective the next day after the court rises for the summer recess this year." hours later, in the white house rose garden after returning from europe, the president thanked justice stevens for his service, >> he has stood as an impartial guardian of the law. he's worn the judicial robe with honor and humility. he has applied the constitution and the laws of the land with fidelity and restraint. >> woodruff: the retirement of the court's longest-serving current justice came 11 days before he turns 90, but it was no surprise. he'd hinted at it for months. stevens' time on the court began after president gerald ford nominated him in 1975. over the years, he became a reliably liberal voice. he voted to limit the use of the

death penalty and to broaden the scope of abortion rights. in 2000, he led the dissenters in "bush v. gore," the five-to- four decision that sealed george w. bush's election as president. and later, stevens won support from justices anthony kennedy and the now-retired sandra day o'connor-- the court's swing voters-- to rein in key bush administration policies. in 2006, he wrote the majority opinion in "hamdan v. rumsfeld," holding that using military commissions to try terror suspects at guantanamo bay was unconstitutional. stevens was asked in 2007 what his legacy might be. >> i suppose on the basis of the opinions i've written. there's an awful lot of them. they'll have to pick and choose between them. but you leave... you leave your record on what you've had to say over the years. >> woodruff: today's resignation now gives president obama his second high-court nomination.

the chairman of the senate judiciary committee, democrat patrick leahy, appealed today for civility in the coming confirmation fight. he said, "i hope both sides of the aisle will make this process a thoughtful and civil discourse." senate republican leader mitch mcconnell said, "americans can expect senate republicans to make a sustained and vigorous case for judicial restraint." confirmation hearings are expected to begin in mid-summer. and we get three views now on the retiring justice from john mcginnis, a professor of constitutional law at northwestern university school of law. he served in the office of legal counsel in the justice department during the first bush administration. kathleen sullivan teaches constitutional law at stanford law school. she has argued numerous cases before the supreme court. and newshour regular marcia coyle of the "national law journal." thank you all three for being here.

i'm going to start with you,ing kathleen sullivan, what does it mean for the court to lose john paul stevens? >> well, judy, this is the end of one of the great tenures on the court. justice stevens served 35 years through seven presidents and three chief justices. and he's become really the liberal leader of the court. a statesman who perhaps moved left as the court moved right. but because he has been for 15 years the senior most justice on the liberal side of the court, he's been able to sometimes eke out five to four liberal victories on a conservative court. for instance, as you mentioned in ham dam versus rumsfeld, saying to the bush administration, no you cannot make up new military commission procedures that violate the geneva conventions to try the guantanamo detainees. or in another case he lead the court to a 5-4 ruling that said the bush administration had to against its will look at greenhouse gases, that maybe

causing climate change. so he was able through the force of his gentle, courtly, civil expertly professional demeanor on the court to sometimes round up five to four liberal victories through his seniority. so we may see a new vote that comes on to replace a liberal vote on the court. but the junior most justice won't have the senior leadership power that justice stevens will leave behind. >> woodruff: john mcginness explain to us the appointee of a republican president gerald ford who did become the liberal standard-bearer on the court, still calling himself a republican. >> two things happened. one i think it is fair to say that the republican party of justice stevens day has changed. i think it's become more interested in social issues than the republican party of justice stevens day. but it's also true that he moved considerably to the left on issues during his time on the court. and i mentioned two of those.

one of those is the death penalty which he said was unconstitutional at the end of his tenure, having voted to uphold it at the beginning. and then perhaps even more dramatically having prepare prepare-- prepared racial preference laws affirmative action to the nuremberg laws at the beginning of- -- a strong vote to uphold them. and there i think we see the general problem for republicans in changing the court. that because the opinion makers in law, both in academics and to some extent the media, i think we can imperically show very much leaned to the left. only justices who have been tested in washington like justice alito or justice roberts tend to stay faithful to the vision of the presidents that have a appointed them. so i think there is a story there as well. >> marcia coyle you observed him regularly almost every day, every day the court was in session. you saw him, talk about his influence on the court.

>> i think first as a person if you only knew him from watching him on the bench you would see somebody who is unfailingly polite. even to the point of apologizing when he interrupts a lawyer's statement to ask him a question. someone who asks very direct questions, no agenda , incredibly smart hypotheticals that can find a lawyer's weakness in his argument very quickly. and very modest person. i remember, for example, chief justice rehnquist once coming down very hard on a lawyer who represent referring to the justices as judges. and when justice stevens finally had a chance to ask a question, he prefaced it by saying he believed the constitution referred to them as judges. that's on the bench. but he also is a voice inside the court and in a way that will be missed. he's the only justice who has his clerk go through on a regular basis the petitions that the court will decide whether to take

or decline. whereas the other justices rely on a pool memo from clerks. that's an important check. and he's also the only justice who continually dissents when the court brings the bar down, the band down on what i call frequent filers at the court because they're frivolous filers. he feels the court has an obligation and it's not a big burden to go through these competitions. >> kathleen sullivan picking up on what marcia just said, i think he used the term gentle persuader. fill that out a little bit more for us. how did that work with justice stevens. >> well, justice stevens had a particularly close relationship with justice kennedy who is so often the swing vote on the court. and for example in the environmental case he was able to get justice kennedy a strong supporter of states rights to say that massachusetts had a right to compel the federal government to regulate greenhouse gases. so i think he had a way of figuring out what each justice cared about in bringing them to his team. but i think in terms of his legacy we should remember he

made a great contribution to freedom of speech, often siding with the freedom of speech whether it was of jehovah's witnesses to profilatize door-to-door or using the internet. he may have been the oldest just at this but was the first to say the intermet made everyone with a personal computer effectively a town crier who could communicate to all the world. he wasn't always for freedom of speech rights. he didn't believe that flag burners had a right to burn the flag in protest. and that reflected the fact that he was the only person on the court with military experience. he served in the navy in world war ii and he didn't think flag burning was a form of protected speech. and he didn't think corporations should have speech rights in contributions to issue ads in political campaigns. he went out with a very pointed dissent from the citizens united case. but one last point is he really believed in the rule of law and that was another way he was able to unite justices. in his decisions that justice kennedy and justice o'connor joined saying that the bush administration

couldn't improvise new detention procedures or new commission procedures. he was really appealing again to his military service, to the notion that rule of law is important. i once was at a conference with him and he said that the most important thing judges in other countries say about our court is our court gets its decrees obeyed. we follow the rule of law. and that was the principles that enabled him to be the gentle persuader. >> he is the last veteran to serve on the court. john mcginness what will he be most remembered for. >> i think if you looked at it, i think his opinions on executive power. he had an abiding suspicion of presidential power. and i think this was true of any president. we've already mentioned the hamdan case in which he said the president could not set up military commissions unilaterally. but i would mention two other very important cases. one clinton versus jones. he was the author of the case which says that president clinton could not delay the lawsuit of paula jones. and of course that almost

brought down president clinton's presidency. he also struck down the line-item veto. congress decided to give the president a line-item veto because of problems which were coming to again of fiscal in discipline in congress. and i think justice stevens thought that went too far. that that could be given for the president. so that would be, i think, his greatest legacy on the court. and most long-lasting to be the suspicion of presidential power. and i think that may have gone back to his republican roots, to his suspicion of people like franklin dell a nor roosevelt. >> what could-- what would you add. >> i think i would add as well his ruins in the death penalty. he did strike down the death penal for juveniles and the mentally retarded. and as was pointed out he completed his evolution from supporting the death penalty to the most recent case involving lethal injection. his conclusion that it

ultimately was not worth the cost. there's one other major power he had, or inflauns that he had on the court. as the senior justice, when the chief was in the minority justice stevens had the-- and justice stevens was in the majority, he could assign opinions. and that was also how he was able to get some influence by picking certain justices like justice kennedy. he kept them on his side in those opinions . >> woodruff: and that's a skill that developed over time. >> oh, definitely. he was able to pick out what interested other justices. we saw it in the sentencing revolution that he launched in 2001. he realized that justice scalia, not a normal ally, really cared about the role of juries in criminal trials. and he used that to engender more fairness in sentencing, criminal sentencing. >> just a few seconds from all three of you, if you would.

in what do you expect president obama to look for in a replacement. and how will that shape the court to be different from what it is now. that's a lot to ask. but just in a few seconds, kathleen sullivan? >> brilliance, youth and confirm ability. the administration has a number of excellent candidates to choose from and whatever happens in the political drama that nominee will go through. >> woodruff: john mcginness. >> i think confirm abilit ability-- confirm i believe will be very high. the president has a lot on his agenda. i think it is very unlikely to want something that causes a firestorm through his nomination in the court. >> woodruff: and marcia. >> well, i would second all of those. i think it is important to remember that even though he will be replacing someone among the four on the left, that every justice does have an impact in some way on the rest of the court. and you may not get another

john paul stevens but you may not realize you have another john paul stevens after you have that person for a number of years. >> woodruff: marcia coyle, john mcginness, kathleen sullivan, thank you all three. >> thank you. >> brown: still to come on the newshour: fannie mae, freddie mac and the financial meltdown; health care on the minds of virginia voters; and brooks and marcus. but first, the other news of the day. here's kwame holman in our newsroom. >> holman: rescuers struggled again today in their efforts to search a west virginia coal mine. four men have been missing there since an explosion on monday that killed 25 others. smoke and signs of fire this morning pushed the rescue teams back for a second time in as many days at the upper big branch mine. west virginia governor joe manchin: >> we ran into some problems, and were notified this morning and the teams worked around the clock and got up into the section again, and ran into some bad conditions, and again had to

pull the teams out for their safety. >> holman: the missing miners were not in one chamber where they might have sought refuge, but the search was halted just before the rescue teams reached a second chamber. later, kevin stricklin of the federal mine safety and health administration said they've now managed to smother the fires. >> we know that we flushed this area out with nitrogen and we should not have any smoke or fire. >> holman: in washington, president obama said the country is praying for a miracle at the mine. he spoke in the white house rose garden. >> it's a profession that's not without risks and danger, and the workers and their families know that. but their government and their employer know that they owe it to these families to do everything possible to ensure their safety when they go to work each day. >> holman: in fact, published reports said the mine owner, massey energy, escaped closer enforcement by federal officials, despite an increasing number of violations. the company promised its own extensive reviews of the upper

big branch explosion. it said it does not condone any safety violation. meanwhile, funerals began today for some of the victims of the mine disaster. late today, the rescue teams again re-entered the mine. in kyrgyzstan, thousands of mourners honored at least 76 people killed in this week's political violence. the crowd gathered outside the presidential palace in the capital of bishkek. many blamed president kurmanbek bakiyev for ordering troops to open fire during mass protests on wednesday. separately, the interim government offered safe passage for bakiyev into exile in a bid to quell further fighting. e will not let it happen. we will do everything possible not to allow civil war to happen. before you came, i already said that we are controlling the situation here. we are mobilized alert. we have the means, the resources and the possibilities. we have the people's support.

>> holman: the interim leader also said a major u.s. air base in kyrgyzstan will continue operating for at least a year. the base funnels supplies to u.s. forces in afghanistan. u.s. officials sought today to ease tensions with afghan president hamid karzai. they've been rising amid a series of critical remarks by karzai. but today, president obama's national security adviser jim jones said, "we have gotten through this period." he said a karzai visit to washington next month is still on. in afghanistan, a u.s. air force osprey went down, killing three u.s. troops and a private guard. there was no word on the cause. pope benedict xvi faces new questions about his role in handling sexual abuse cases. the associated press reported today on a 1985 letter he wrote as head of a top vatican office. it said any decision to dismiss an accused priest must consider "the good of the universal church." the vatican has said the pope played no role in blocking removal of such clerics. in south africa, hundreds of people turned out for the funeral of white supremacist

leader eugene terreblanche. mourners sang the apartheid-era national anthem as the coffin wheeled past. it was escorted by members of the afrikaner resistance movement, the group that terreblanche led. two young black farm workers have been charged with beating terreblanche to death. his followers said today they're on their guard. >> we are arming ourselves and let me clarify this once and for all. we are arming ourselves to defend ourselves. we are not importing rpg-7s. we are buying pistols and buying revolvers so we can protect ourselves. >> holman: white militants claim a top member of the a.n.c. incited the murder of terreblanche with a song that calls for killing white farmers. a michigan congressman who helped push through health care reform has announced he's retiring after nine terms. bart stupak and other anti- abortion democrats supported the health care bill after winning a

presidential order that federal funding of abortion is still barred. stupak faced strong opposition from tea party activists, but he said today, "the tea party did not run me out." on wall street, the dow jones industrial average traded above 11,000 for the first time since september of 2008. it finished just short of that mark, gaining 70 points to close at 10,997. the nasdaq rose 17 points to close at 2,454. for the week, the dow gained just more than half a percent; the nasdaq rose 2%. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's web site. for now, back to jeff. >> brown: yesterday, citigroup executives were on the hot seat. today, top officials from housing finance giant fannie mae got their turn before the financial crisis inquiry commission. the panel looking into the causes of the financial meltdown. how did things go so wrong? former fannie mae vice president robert levin.

>> we, like everyone else, were surprised by the unprecedented extent of the economic crisis. >> brown: his colleague, former chairman daniel mudd, who was ousted after fannie fell, said he was ultimately responsible. >> i was the ceo of the company, and i accept responsibility for everything that happened on my watch. >> brown: fannie mae, and its sister organization freddie mac, were government-chartered but private companies, set up to buy mortgages from lenders and package them into securities sold to investors. and by 2008, the two agencies owned half the country's $11 trillion in mortgages. but when the housing market collapsed, so did fannie and freddie, and the government was forced to step in-- a move that's, so far, cost taxpayers $126 billion. today, mudd said the g.s.e.s-- or government sponsored enterprises-- were legally barred from making non-housing investments, leaving them especially vulnerable to a downturn. >> unlike other financial

institutions, this left the g.s.e.s unable to diversify and, therefore, to avoid losses stemming from any u.s. housing finance crisis. and 2007 to 2010 was not merely a housing crisis-- we witnessed a market collapse, a collapse of the only market that the g.s.e.s were in. >> brown: but commission chairman phil angelides said fannie mae's eagerness to compete with wall street led it to take on too much risk. he cited a 2008 report recommending the government takeover. >> it's a pretty damning document in terms of its assessment of fannie, and i'm just... it refers to members of the executive management team "made imprudent decisions, many of the decisions were unsafe and unsound." >> brown: what's next? the white house has promised to restructure fannie and freddie, for more on this, we turn to andrew jakabovics, associate director of housing and economics for the center for american progress; and edward pinto, a long-time

consultant to the financial services industry. he was chief credit officer at fannie mae in the late 1980s. welcome to both of you. >> thank you. >> let's start with the what went wrong question. to what extent were fannie mae and freddie mac vehicles for the subprime debacle? >> they were actually not as responsible as a lot of people would think. i know that ed disagrees with me. i think that the real problem here was the creation of an unregulated mortgage market. wall street was funneling trillions of dollar -- dollars through unregulated channels into private label securities. these were largely where the subprimes were. and what ultimately happened was the gse, fannie mae and freddie mac were losing market share. they are government chartered but they were also shareholder owned and so they basically put short-term profits ahead of long-term safety and soundness responsibilities. and they basically sort of followed everybody else down the rabbit hole. >> what is your view, victim orville an here? >> my view is mohr villain. it goes back to the early 1990s.

and a number of federal housing policies that were put in place that pushed very low down payment lending and other loosening of underwriting. fannie and freddie were leading that charge starting in the early 1990s. and that eventually, along with all the advantages that they had, lead to a tremendous disruption of the market which koul minute ated in 2004 with the subprime market really ballooning. and following the lead, the low down payments and higher risk. >> another way of addressing this is hoping people understand what these entities are. as you both said they are government but private. so they were set up as-- to do a public good in a sense, right, to help foster home ownership. >> well, they were there actually to funnel credit, ultimately for the purpose of homeownership. you look back to their original purpose back before banks could be national. you had a problem, you had a growing area without a lot of depositors. and yet you wanted to funnel

money so that when people wanted to move into those places could buy houses in those communities. and so that's really what the original intent was, was basically to say to other banks well, if you buy loans, we'll buy your loans, that why you will be able to sell them off to somebody else. and so people for 75 years had no problem with sort of the fannie mae structure. it was ultimately privatized, largely because the interest to get them off the government balance sheets for reasons of the vietnam war. so for a very long time they've been doing exactly what they did. their bread and butter was actually guaranteeing these mortgages. only when they sort of decided to chase wall street and chase the profits that they really got into problems. >> and you are saying something went wrong with that original model. >> something went wrong with the original model. in 1992 congress hard-wired the amount of capital they needed. and they were tremendously overleveraged and that is really what drove the market off a cliff. >> so the government comes in at the end of 200. what has happened since? what shape are these organizations in. what are they doing in terms of lending now?

>> well, in terms of what shape they're in, they have losses that are for the foreseeable future based on the business that they did in 2004, 5, 6, 7 and 8. recently they are the secondary market along with fannie and freddie. along with beginie mae. they account for 95% of all the lending in the united states is guaranteed by the federal government. so we have a nationalized market in terms of housing finance. and the challenge is going to be how to undue-- undo that. but right now that's the role that they are performing. they have been turned into public policy vehicles. >> before we get to where we are going, but so how would you define where we are now. there is still huge and still big players. >> they are. and in parts's because of the absolute disappearance of the private sector in lending and the conduit, the wall street conduit that exist, basically disappeared overnight. >> basically because of the economy. >> the housing market, these guys saw the writing on the wall and a lot went belly-up. guys were relying on the

flow of these mortgages coming through the small independent lenders, the mortgage brokers, who really were basically originating for the purpose of securitizing them through wall street. and so those guys are out of the market so the only guys left standing, basically, are the gses. and even the large banks are basically funneling their loans whereas in the past they were sending some to wall street and some through fannie mae. at this point fannie mae and freddie mac are the only game in town. >> that commission we are watching today this relooking at what happened. there is a lively debate about what to do with these entities now. what do you think should happen? >> well i think should happen is there needs to be a plan to bring private capital back into the housing market. and that needs to be done by slowly phasing fannie and freddie out, reducing their -- >> out all together. >> out all together. how that gets replaced with a number of private sector and other alternatives, is going to be a point of discussion.

i think the key is not to have the federal government guarantee explicitly or implicitly this housing debt. >> just get the government out of that kind of -- >> and whatever the government wants to do do very transparently, on budget through fha and beginie mae and let the private sector handle the rest. >> i think you can't just sort of turn a switch and suddenly these guys disappear. there is nothing to replace them at this point. i think the conversation is really centering around how you would transition them in to some new ownership structure, some new institutional structure. there is still tremendous amount of mortgage capacity. the analytics, the risk analysis, the conduits, the relationships, all of those that exist inside fannie mae and freddie mac today. you need to figure out where they are ultimate leigh going to end up. and i think that investors who are ultimately the buyers of the securities which allow the money to flow back for making more mortgages. you need to have a system and i think transparency is absolutely right. people need to understand exactly how the system works.

part of the problem now is that, or part of the crisis is that need were black box. these securities originated without any sort of oversight. the types of loans being made were often very exotic. we talk about subprime but interest only. there were all sorts of weird loans made for a variety of reasons largely because they were profitable for the people making them. and i think that you need to ensure that the market as a whole is appropriately regulated. so there isn't any sort of regulatory arbitrage between the wall street guys and fannie mae and freddie mac. >> because particularly at a moment like this when the country is still in a housing crisis, you have to figure that into this debate, right, in terms of role for a fannie mae. >> absolutely. although the general view is, and this is what was the problem as we got to this crisis, there were calls for requiring fannie and freddie to have more capitalment fannie and freddie fought that. many of the industry participants fought it. it's not the right time. we can't do it now. and it seems like it's never the right time. and so i think we need to

start figuring out how we reintroduce the private sector back into the process. it is going to be a slow process. we've really sort of almost destroyed the system in bringing it back. there is not going to be -- >> and it is part of a political process. >> it very much a part of a political process. and i think there's a fair view that having the federal government really in control of this process is not all bad. i mean that was how fannie was set up in the first place was it was really a politization of the housing finance process and i think there is a fair view that if we can figure out a way to keep that by some members of congress, they wouldn't be against it. >> just a brief last word on that process that we see. >> i think it's going to be a slow process. and i think the administration is going to be coming out with a set of questions. i believe next week, asking for inputs too where people think that this process should go, in part because they need to move slowly because this is a tremendous amount of money at stake. there's confidence in institutions as well as in the federal government at stake. and i think particularly

from a perspective of foreign investors, a lot of money comes into this country through the mortgagebacked securities. and to suddenly turn that offer to create new entities that people don't have comfort with, i think would be incredibly problematic. and so if you have a political process that kind of takes lurchs to the right, lurchs to the left, that leads to spooking the markets and that is the last thing we could afford. >> andrew jakabovics and andrew pinto, thank you very much. >> thank you, jeff. >> brown: now to our second look at how voters see the new health care law. last night, spencer michels reported on what a republican house member is hearing in his northern california district. tonight, newshour health correspondent betty ann bowser follows a virginia democrat. >> reporter: charlottesville business owner mimi hyde is glad her congressman backed the new health care reform law. in fact, she recently

volunteered to be his poster girl for the overhaul because of her skyrocketing health insurance costs. >> for me, it is really just getting insupportable. i really could have put two kids in college, what i paid in policies versus what they paid out for me. >> reporter: hyde, a single mother of four, is self- employed. she runs a knitting and needlepoint store on the historic downtown mall. >> for myself and four kids, all healthy, it was $400 a month. three years later-- nobody's sick, nobody's chronic illness, no medicines, it was $1,300 a month. >> reporter: what is it now? >> $1,500 per month. >> reporter: what do you think about this new health care reform law? >> i would have liked to see it go a little further but, you know, i am happy to have a beginning. i think... i am tired of hearing everybody talking about how they don't want the government running health care. well, anthem has been running my health care for eight years and doing a lousy job of it, and

it's expensive and i get less and less for it. >> reporter: hyde's representative in washington is democrat tom perriello. the 36-year-old yale-trained lawyer from ivy, virginia, won one of the closest congressional races in the nation in 2008, winning virginia's fifth congressional district by just 727 votes. voters here have mostly leaned republican in recent years. they backed republican senator john mccain in the presidential election. perriello has found himself the target of conservative ire in the health care reform debate. there have been small protests at his charlottesville office, and vandals attacking his brother's home shortly after he cast his vote in favor of the overhaul package which became law last month. perriello says the new law will help many of his 700,000 constituents like mimi hyde. >> health care, for some of us,

was not an ideological fight. it was about economic relief to working and middle class families, seniors who are struggling. if we can save them a little money, that's really a big deal for people. >> reporter: perriello's district is virginia's largest it stretches from the liberal city of charlottesville in the north, east to the edges of metropolitan richmond, and south to the more conservative and economically-challenged areas like danville, near the north carolina border. opposition to the new health care law among conservatives in the fifth is so strong that seven republicans have lined up to run against perriello this fall. and political observers suggest it could be a tough race for him. >> a small but vibrant crowd here in charlottesville... >> reporter: so while home from washington, he's set out to explain to voters what he thinks are the overhaul's good points. >> we are extending the solvency of the medicare trust fund by about a decade. we're closing the prescription donut hole. we're trying to further

reimburse primary care doctors for being part of the system. and we want to reduce some of the out-of-pocket expenses that our seniors pay. >> reporter: while many seniors in nationwide surveys have expressed concern about the new law, perriello didn't have to work too hard at a town hall meeting at the senior center in charlottesville. it's a city where 80% of the voters backed him in the 2008 election. >> a real step in the direction that we all need to go. >> reporter: as perriello fielded questions-- some over the telephone-- it was clear many simply didn't understand how they would be affected by the law. >> we run a small business of six to eight or ten employees. where are we going to gain anything from our new health care plan? >> start retroactive to january 1 of this year, your company would be eligible for a 35% tax credit to cover the premiums that you're paying for your employees.

>> reporter: head south outside of charlottesville, and the political landscape changes dramatically. much of the fifth congressional district in virginia is made up of areas like this, rural areas, and as you move away from the population centers in the north like charlottesville toward the north carolina border, the new health care law becomes increasingly unpopular. along the banks of the james river in lynchburg, thomas johnson has plans to expand his furniture company, in spite of the economic downturn. >> so the big plan is that i want to establish a manufacturing industry at a time when that industry is dying. >> reporter: johnson, who settled in the u.s. from ghana nearly 20 years ago, currently employs about ten full-time workers. but he does not offer health insurance because he says its too expensive. he thinks the new law will hamper his plans to hire 100

workers. >> we are today in global market system, which means that somebody else is doing somewhere very cheap and sending it to the united states. so if i am going to compete on a global market, we are going to have to level the playing field and make it in a way that i can make profit to afford health care. but if i am going to be forced to provide health care with no profit margin, i think the company will be crushed. >> reporter: and johnson says he's not happy his congressman voted "yes" for health care reform. >> if he listened to his constituents, i think he would have made a better judgement. >> reporter: perriello's theory is that the political left and right are no longer so engaged on health care as they were during the debate. >> i think that those who are really passionate on either side have faded a little bit, and now the people in the middle are getting their turn to say, "all right, walk me through it." this is the law of the land now, and people get pretty excited

when you go through things like extending the medicare trust fund and bringing the cost of drugs down, allowing people into these exchanges to get cheaper healthcare, tax credits for small business. so what you see is sort of a revival of the moderates in this debate, and i think people are liking what they see so far. >> reporter: that remains to be seen. but perriello has his sights set squarely on motivating what he thinks is crucial-- the political middle. >> lehrer: and to the analysis of brooks and marcus-- "new york times" columnist david brooks and "washington post" columnist ruth marcus, filling in for mark shields. david, do you think, do you detect a return of the moderates on health care, on the health-care bill? >> i haven't heard from them recently. no, i think it's a tough road for people in districts like that, it is a tough road. the gallop organization has been asking people of their view of the democratic party for the past 18 years. and the democratic and republican party, and the democratic party is now at an historic low. it's never been as poorly thought of in the american

people as it is right now. and that's partly health care, it's partly a lot of things. but-- but if you look at the recent polls after health care passed, a little boost in its popularity. but now it's again quite unpopular. so whatever the merits of the bill, its he not gok a political winner. >> lehrer: do you agree. >> not a-- it's to the going to be a pit call winner this year for sure. and i think that the best case that the congressmen could make is revival of the moderate bus i wouldn't go to the bank on that one. look, for the president and for his party, it really hinges on the economy. and the moderates are not going to feel revived. and the extremes, particularly the extremes on the right who are very worked up are not going to feel calmed down until the economy starts to revive. and the truth is that the effect of health care is so far off, the health-care reform is so far off that it's to the going to be motivating people who are looking for the benefit it

is going to be motivating opponents. >> lehrer: what about the announcement today by bart stupak, the mood rail-- moderate democrat from michigan who said he is to the going to run again. of course he was very much involved in the apportion issue during the debate. should he be seen as a victim of the health-care reform debate? >> i think so and the evacuation of the moderates. he is a member of congress of whom there used to be many who is economically pretty liberal, socially quite conservative. and that used to be a type. and you would have types lake that. and he sort of stood for them. but there weren't manying through during this debate. and so he has been hit viciously from both sides f from the left from people who were up set because he almost dethroned or got in the way of health care from the right. people who think he stood for pro-life and then became the benedict arnold by signing on. so he has been hit both ways. and i think it was extremely unlikely he was going to win again. he has been there awhile. done a lot of things. >> lehrer: 18 years. >> and so he is someone who is sort of stuck in the middle there and there is little room for that. >> lehrer: do you see that,

ruth. >> exactly, and it was absolutely remarkable that within a few minutes of his announcement you had e-mails from both in my in-box anyway from both the national organization for women and other folks cheering that he was leaving because he was such an opponent of theres on abortion rights. and the tea party was delighted as well. so if there is any sort of particularly terrific metaphor for the absence of space as david said in the middle these days, and for the extreme t is the fact that bart stupak who was in the middle in a sort of odd way, very, not just on abortion, on gun rights and things like that, socially, conservative, economically, liberal/moderate didn't have a place to be in the current political environment. >> lehrer: okay, let's go on to the other retirement of the day. the big one, the retirement of john paul stevens of the supreme court, the announcement he is going to leave after the summer. what are your thoughts about

his depar ture. >> i'm going to say them atically where we have have been. to me when you look at the history it's important, can sort of see recent american political history in the course of his career. first the most exile shall did -- exciting thing for me was at wrigley feel when babe ruth called his shot, for the home run. i have to get that in. he also, in the u.s. navy on december 6th, 1941 which is fascinating to me. but in the early part of his career, sort of republican family considered himself moderate republican worked for a new deal liberal on the supreme court as an intern. and then worked in progressive causes in chicago to reform the city there. and so they had done some things on both left and right when gerald ford was looking for a nominee chuck percenty was the senator from illinois, moderate republican said what about this guy, he's very smart. and in those days a president could think nonideaologically, i will just pick the smartest guy, this guy seems smart, chuck percentee likes him. that was a different era. we don't do that any more. now we run through a million litmus tests on each side

and the idea of a republican picking somebody with that background would never happen, vice versa. and then so he's part of that era. and then we enter a new era. an era where the country and the court have moved it to the right but where ideology has become more sharply divided. the sort of process his successor will go through is 180° from the process we ent through. >> lehrer: do you agree it is going to be a different world for a new person as opposed to what john paul stevens went through. >> it's going to be a different world and justice stevens has pointed out that with the exception of justice ginsburg every-- every retiring justice including him has replaced-- has been replaced by somebody more conservative than the retiring justice was. so this court is shifting. i went back today and looked at "the new york times" in "washington post" stories on the day that justice stevens was selected. >> lehrer: what did they say. >> it was fascinating. president ford picked centrist for court. >> lehrer: centrist. >> centrist. and then-- .

>> lehrer: that is an old-fashioned word if ever. >> and, which tells you that, which was a fairly accurate assessment of him at the time. and he will tell you, he hasn't moved. the court has moved around him. i think one of the interesting legacys of justice stevens' retirement is the odd fact that president obama and look, all of these predictions are fraught with peril. president obama is apt to leave at the end of his first term, to have a supreme court that is more conservative than the one that he inherited. because if you look at justice suitor and justice sotheby's -- soto mayor pretty much a wash is the best guess. that someone as liberal as justice stevens is perceived will be nominated and confirmed. >> lehrer: do you agree that president obama could to the get away as nominating someone as liberal as john paul stevens. >> on the one hand stevens is pretty liberal by our terms these days and i think

he also moved to the left a little as we heard earlier. but so on the other hand, the activist groups in the democratic party want somebody just as lib at least as stefsence. and on the other hand it is an election year and obama is already if trouble in the middle. because he and all the moderates who are going to be running in states like indiana and ohio, do they really want a big ideaological fight. so he's got these ta forces, one that says no, let's pick a fight, get a liberal. another saying no, get a moderate, somebody you can get confirmed. i think if i was sitting in the obama white house, we would say hey, we're going it to lose 6, 8 senators, we'll fever get another shot to nominate a liberal. let's take our chances with this one. >> lehrer: ruth? >> the interest groups that are pushing for liberal nominees are not particularly happy with the judicial nominees they've seen from the president thus far. and if you-- . >> lehrer: you mean in the other court. >> in the lower fed ral courts. they like sotomayor but they're nervous about where

she is going to end up. >> lehrer: because she was a former prosecutor. >> she was a recall foers were cuter and her testimony if you had taken out her name and put in justice, chief justice roberts name you wouldn't have been able to tell the difference between them. and obviously there is and there will be a difference between them in terms of voting record but they want somebody a little bit more, one of the things i think we're going to see from the white house and you heard this a little bit in the president's statement today, is to try to recast the liberal versus conservative debate. to not make it about social liberalism as much as about economic power and trying to even up the playing field between the powerless individual and the powerful corporations and other powerful interests. and i think that may be a way for them to try to-- the tension they face. >> lehrer: somebody might say to ruth, good luck on that, right. >> i think we've been having that argument for the year and as i said in the polls earlier it hasn't gone so well for democrats.

>> lehrer: but the word firestorm was used in the earlier discussion that about at the very beginning where judy ran. the one thing that president obama is going to want to avoid is a firestorm over this nominee. and he can't do a liberal without having a firestorm. >> right, but he could do a liberal mineralist. one of the people without works for him and is actually short listed to be a nominee is sunday stein and he has written about president obama before but he is a liberal but a minimalist meaning he does not brief in judicially activist, getting somebody who will try to rewrite the american society through the court. and so he could choose someone who has sort of a liberal pedigree but not an aggressive personality. i happen to think all of these decisions for politically anyway are done on the basis of personality, not their judicial fuse. >> ruth, what about the suggestion that has come from other folks that maybe it's time to put a real person on the supreme court. in other words, not somebody who is a former appeals

court judge, has a long history on the bench. but a lawyer obviously but somebody even the political -- >> has to be a lawyer. >> lehrer: but a politician. >> the president is extremely attractive to that idea. here is the problem with the real person. first of all the kind of real person that we would be talking about would be a politician person. they have this unfortunate tendency to have enormous paper trails, both voting records and statements. so that which could be mine-- be so much more fun than reading law review articles which pem like me are always stuck doing with the appeals court nominees. the other problem is that you have to worry about if it's a politician, what is the consequence. if you find a senator who looks like she would be young enough, smart enough, interesting enough, whatever. the senator from minnesota somebody who has been mentioned. well, guess what, there is a republican governor in minnesota. so you have to deal with those things also. so as attractive as it is,

it's been very hard to find in practice. >> al franken. >> excellent. >> i don't think he's a lawyer. >> but he has a paper trail. >> lehrer: he does have a paper trail. >> a video trail. >> lehrer: okay. thank you all very much. ruth, good to see you. >> thanks for having me. >> lehrer: you too, david. and again the major developments as we've just been discussing >> brown: again, the major developments of the day: justice john paul stevens announced his retirement from the u.s. supreme court after 35 years. and rescuers in west virginia struggled again in their efforts to search a coal mine where four men are missing. the newshour is always online. kwame holman, in our newsroom, previews what's there. kwame. >> holman: there's more on justice stevens. you can ask marcia coyle about his legacy and what his exit means for the court. on "art beat," jeffrey brown talks to musician brad mehldau about his new album, "highway rider," a mix of jazz, classical and pop music. and a look ahead to a special series starting monday. judy woodruff explains.

>> next week the newshour and the on-line "newshour" will shine a spotlight on central florida. as many people scramble at the last minute to pay their taxes, we'll take a look at what people think about their government. newshour segments will include paul solmon's report about the high rate of mortgage forecloseures in florida. a gwen ivel discussion about a boom gone bust. betty ann bowser looks at how the health-care system is working or not for some tampa bay residents. and the impact of the recently enacted federal overhaul. some people in florida are angry over how their taxes are being spent. i will track the federal money trail here. on thursday i will moderate a town hall meeting on the role of government. and we will wrap up the week with a report on the political anger that is fueling the senate campaign of republican marco rubio whose leading the more moderate governor charlie crist. coverage continues here on-line, including more about the politics of the

state. it's changing economy and demographics. a profile of some tampa bay tea party members. and a round table on thursday on the future of u.s. space exploration. when president obama comes to florida to moderate and host a space summit. we'll also update our patchwork nation site. so that you can access data on foreclosures, on federal spending per capita, and much more. >> holman: that's all coming next week on the newshour and on our website, newshour.pbs.org. jeff. >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> lehrer: and i'm jim lehrer. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice weekend. thank you and good night. major funding for the pbs newshour is 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 captioned by media access group at wgbh access.wgbh.org