exit strategy. sarah palin out of office tonight. what's next? scorched earth. running out of water in the grip of an historic drought with no end in sight. on a roll. does the rally on wall street mean goo news for the rest of the economy? and reel to reel. hollywood's new plot twist. >> i borrow all the money i want and the house gets stuck with the bill. >> hitting a little too close to the bill. >> hitting a little too close to home.

captions paid for by nbc-universal television goodevening. there'a changing of the guard in a high-profile corner of american politics. sarah palin of alaska officially steps down as governor and steps into an uncertain future where she plans to speak out politically whileachiing etcs probes and her own shrinking populari popularity. she's raised a lot of money and her schedule suggests we haven't heard the last of the former vice presidential candidate. norah o'donnell is in fairbanks with the latest. >> reporter: after tonight, sarah palin will no longer be governor of alaska. it's a job that earned her a spot on john mccain's presidential ticket and national prominence. she's giving up that power, she says, to be free to do what she wants. sarah palin chose pioneer park in the crowded annual governor's day picnic in fairbanks to say

farewell. she thanked her constituents as she served up free food. she won't say what's next but her husband, todd palin, tells nbc news she's not going to disappear. >> as far as running for national office, i mean, that's not in her future right away. >> reporter: that was a big strain on your family. >> that was a great time. the positives outweigh the negatives. >> reporter: still, even her own brother and father have no idea if sarah palin wants to be presesident. >> wdon't talk about politics, we talk about family and sports. >> reporter: people here have strong opinions about what sarah palin should do next. these three women here are from mississippi. >> i want her to get back in the ring. >> i'd like for her to run for president. >> reporter: there were also protesters here happy to see palin go. >> yeah, thanks for quitting. >> she will have plenty of money for political travel and activities. nbc news has learned sarah-pac, her political action committee, has surpassed $1 million in

donations. advisers say she banked more than $300,000 since she stunned the political world by announcing she would resign just three weeks ago. >> among republicans she has 70% favorable ratings and the polls show she's in the top tier with former massachusetts governor mitt romney and former arkansas governor mike huckabee. >> reporter: sarah palin has never said if she wants to run for president. today, another woman who sought the job, hillary clinton, spoke on nbc's "meet the press." >> does she have what it takes? >> that's up to theoters to determine. putting together a presidential campaign is an extremely complicated enterprise. so i'm just going to leave it at that. and i will be an interested obser observer. i do want to see a woman elected president. i hope it's a democratic woman. >> reporter: for now, sarah palin is expected to make her first political speech in two weeks at the ronald reagan presidential library. she's also been invited but has

not accepted an invitation to speak in iowa, site of the first presidential caucuses. this is the week the white house had hoped congress would vote on a health care bill. and while that is now a long shot at best, the administration today argued a potential bill is still making progress. to the white house with the latest on that. >> reporter: negotiations continue throughout the week and behind closed doo on that health care bill. as the house prepares to leave for a one-month break, it's becoming clear they will not meet president obama's deadline for a vote before they go. white house officials today on message and speaking as one. >> we've got about 80% agreement. >> there's agreement on probably 80% of these issues. >> reporter: but plans for health care reform are off track. >> the only thing bipartisan about the measures so far is the opposition to them. >> reporter: the president had put down his marker, insisting on votes before the

congressional recess. >> if you don't set deadlines in this town, things don't happen. >> reporter: today, aides upd that message. >> we're less interested in hard deadlines than in moving the process forward. >> reporter: the president's party i is for now splintered. >> look. there are not the votes for democrats to do this just on our side of the aisle. >> reporter: but still, there is bold talk of ultimate success. >> i'll take this bill to the floor. it will win. but we will move forward. this will happen. >> reporter: also today, talk of a new way to help pay for it all. >> this is a new proposal that surfaced to put an excise tax on insurance companies on high-end policies such as the $40,000 policies. >> reporter: a tax on the so-called cadillac plan. >> you should not be able to force your fellow taxpayers to subsidize your choice of these super luxury plans. >> reporter: also today, encouragement from a veteran of the fight, hillary clinton, now the secretary of state.

>> americans can no longer wait for health care reform. >> reporter: but then as first lady. and author of the health care bill that fell apart in congress. >> it's different because i think everybody's now convinced there's a problem. back in '93, we had to keep making the case over and over again. >> reporter: as for republicans, a deadline isn't a concern. >> most of us believe the decision as to mor reform how americans get their health care in this country deserves at least as much time and deliberation as it would take to select a puppy to reside in the white house. those deadlines are likely to be missed, the president is not letting up. he's planning public events this week in north carolina andnd viinia. >> thank you very much for that. john harwood is cnbc's chief washington correspondent. he joins to us talk k about at e broad level here, john, if this does noto through, how much of a loss is that for the president? what exactly is at stake here? >> well, it's a delay for the

president. but we don't know yet whether or not this health care bill is going to falter in the fall. the president wanted to get it through the house and senate to try to have negotiations early in the fall but there's still time and they do have substantial agreement. the toughest strategic call for the white house may be whether or not to cut bait on those bipartisan negotiations between republicans and democrats and try to do this with democrats alone. of course, that course has risks as well. >> it's been pointed out back in the '30s, whether it was social security, medicare in the '60s, there's been few big democratic initiatives that didn't happen without the help of the gop. can this go forward without votes from republicans? >> president obama would rather have votes from republicans. but getting that kind of bipartisan support we've seen historically is more difficult now because the parties are further apart ideologically and less diverse internally than they used to be. that makes it a huge challenge to get some republicans on board without causing democrats to run away. >> i want to get your take on sarah palin's resignation, effective tonight as you know.

some of a argued her ambitions are still unclear, but that aside, is she a legitimate contender at this point for a national party office for the republicans in 2012? >> she can be a force within the republican party if she wants to be. as you heard from norah o'donnell, she can raise money, she can make money. her performance in the campaign last year raised doubts about her capacities and her decision to resign her office before she's even finished her first term has only added to those doubts. >> john, thanks so much. it's been a weekend of wild weather. a tornado on florida's east coast left more than 150 homes damage ed in three subdivisions south of daytona beach. trees uprooted, power lines down, at least one person injured by broken glass. two tornados touched down in western new york, damaging homes, closing highways and leaving a big cleanup job. in texas, the problem is a killer drought. take a look at this. the u.s. department of agriculture's map tracking

drought conditions across the country. and it's practically off the charts in south texas. that red zone of extreme to exceptional drought. texas has taken some extreme measures to respond to that crisis. nbc's janny shamlian is there. >> reporter: the texas drought has gone fm critical to one for the record books. >> there's probably more water missing from the lake right now at full than what is left in the lake. >> reporter: near austin, lak travis has dipped so low cars and motorcycles dumped long ago at the lake's bottom are now at its top and being towed out. >> the lower the lake levels get there's possibility we could get more major cases. you know. that's only for mother nature to reveal i think at this point. >> reporter: most launches are osed and dozens of docks are sitting on rocks. landlocked in the sweltering heat. for agriculture it's been devastating. parched andwithering, texas has lost at least half of its corn

crop. >> all through this field, you see ears that don't have anything on them and they're dead and dying. >> reporter: the drought has ripped cattle country. with little to graze on, ranchers have been forced to sell herds early. >> our pastures are dry, yellow, it looks like winter to me. >> reporter: in dallas, houston, san antonio, and other cities, officials or the lookout for illegal watering. residents can even rat out their neighbors on a 24-hour hotline. >> looking back at the historical record, we really haven't seen a drought like this, this severe, since probably the drought years of eat 50s. >> reporter: 77 texas counties are in extreme or exceptional drought. no other state has a region in either of those categories. there's no relief in sight. >> we still have many, many weeks to go through and we think the drought is only going to be getting worse before it gets better. >> reporter: a scorching summer

as drought reigns? a state thirsty for relief. janet shamlian, nbc news, houston. wall street will get a lot of attomtig wonroeror aft t last week's rally carried a the dow over 9,000. dow's been onl aol r fou months, gaining mnha 30%. look at this, that gain has simply made up for ground lost since january. the last time the dow was at that level. what's next for the market and what does it manner for the rest of the economy? joining me to talk about that is my colleague rebecca jarvis. good evening. on a broad level, what exactly has pushed stocks higher? why the rally? >> in a word it's a matter of stabilization here. things were so, soad at the beginning of this year. and into the spring. what we are now beginning to see is signs of life. in the housing market, as far as manufacturing is concerned, month over month comparisons are beginning to show a little bit of growth. while it's not back to the levels prerecession, it is certainly looking like

improvements. as far as earnings season goes, right now about 80% of companies reporting have beaten what wall street was anticipating. the cover of this week's "newsweek" magazine, declaring the recession is over. that might be an argument on some fronts. is it simply because housing and manufacturing fell so far, so fast? >> that is a really important component of all of this, carl. the fact of the matter is things are improving but they may not be really feeling better for american families for awhile to come. there is still obviously pain in the jobs market and that is going to be a key component wn people look at whether or not to trust the future androwth of this country. >> rebecca jarvis joining us. president sarkozy is in the hospital tonight after complaining of feeling faint and collapsing while jogging. officials say the 54-year-old sarkozy's tests are normal but he will remained hospitalized until at least tomorrow morning.

>>. >> lance armstrong proved he was human today. armstrong came in third in the tour de france, an event he won seven consecutive times befor taking some time off in 2005. armstrong is now 37, more than a decade older than this year's winner, alberto contador of spain. said armstrong after the race, "i did my best." when "nightly news" continues this sunday, making the most of a teachable moment. for the professor and the arresting officer, the next s p stop. the big of a catch. trying to reel in fish before they reach the great lakes. in rtenteennmt ai w th entertainment there's no escaping reality. how real life is coming to a screen near you. d lower both yo. but how close are you to your goals? there may be more you can do. only caduet combines two proven medicines... in a single pill to significantly lower... high blood pressure and high cholesterol.

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massachusetts, about a suspected burglary in progress led to the arrest of a harvard professor in his own home. triggering a national dialogue on race and what the president himself called a teachable moment. with the heat of the moment now past and talk of all parties meade meeting for a beer at the white house, we asked nbc's ron allen to take a look at where things stand in the community tonight. >> reporter: cambridge is known as one of the country's most liberal and progressive communities. home of harvard and mit. a city that embraces diversity. now trying to learn w a dispute between professor henry lewis gates and sergeant james crowley escalated into a national argument about race relations. >> it's again with policemen being rude. >> reporter: harvard sociologist orlando poot patterson says he feels tension with working class whites not used to dealing with accomplished african-americans. in a so-called teachable moment, he suggests everyone learn better racial etiquette. >> the golden rule. relate to other people as you

would relate to your own group. and i think african-americans too will have to learn not to be oversensitive. >> reporter: just next door lives priscilla pick milan, activist and historian. she thinks one problem is that people of different backgrounds still don't have many close, personal relationships. >> i think they just need to see a lot more of each other. because then you know people as individuals and not as stereotypes. >> reporter: cambridge is a city of more than 100,000 people. more than 60% white. just across the river from boston, scene of some of the nation's most contentious disputes about race and bussing children to school. now cambridge has a black mayor, a woman who plans to convene a public forum to talk about what she refers to as july 16th. >> we're going to take this opportunity for july 16th to really talk about those hard issues. we didn't wait until july 16th. we've always talked about these issues. >> reporter: the police department is assembling an

outside panel. law enforcement experts, people from the community. a chance for them to say what they have learned. >> we can't judge people by what we expect them to be like. and we all make mistakes. >> reporter: state senator anthony gallucio has been trying to bring gates and crowley together since the incidence happened. the community, he said, needs that meeting. >> i want the final image of cambridge to be these two guys walking into a room and coming out maybe not best friends but coming out as two vested cambridge community members who want to move the community forward. >> reporter: moving forward and trying to learn why. ron allen, nbc news, cambridge. when we come back, a fish story so big, even the federal government has a role. trying to protect the great lakes.

♪ too many fish in the sea

if we don't act, medical bills will wipe out their savings. if we don't act, she'll be denied coverage because of a pre-existing condition. and he won't get the chemotherapy he needs. if we don't act, health care costs will rise 70%. and he'll have to cut benefits for his employees. but we can act. the president and congress have a plan to lower your costs and stop denials for pre-existing conditions. it's time to act. in southern california today, surfers are enjoying some more big waves. the national weather service issued a high surf warning. swells there reaching up to 12 feet this weekend.

call this next story the price of good intention. years ago, a fish called the asian carp was brought to american waters to solve a problem. but the big, hungry, and very prolific fish soon became a major problem itself. now the federal government is stepping in, trying to scale things back. our report tonight from our chief environmental affairs correspondent anne thompson. >> reporter: they are big, ugly, and abundant. asian carp. infamous for flying out of the water in hot summer months. a problem to some but profit for ryan briny. >> more fish than we can catch. >> reporter: he sells carp from the illinois river all over the world. for food and fertilizer. making briny o of the few happy to see the asian carp in america's waters. imported to eat the plankton buildup in arkansas catfish farms, in just three decades the asian carp have invaded nearly every waterway in the mississippi river basin, squeezing out native fish from

louisiana to minnesota. now they threaten the great lakes and its $7 billion industry. to stop the carp invasion, the federal government build a $15 million high-tech barrier on this ship canal just south of chicago to keep the fish from entering the great lakes. it doesn't look like much but at the bottom of this industrial canal is what's believed to be the largest electrical barrier of its kind in the world. the last stand of scientists and engineers against those aggressive asian carp. seven years in the making, project manager chuck shea explains how the barrier works. >> electricity will come through these cables, go down through the ground, and then the cables will connect to steel bars on the bottom of the canal. >> repter: those bars send rapid-fire electrical pulses down into the water. five per second. repelling the fish without harming them. randall schmidt says it's all that stands between his chicago fishing boat business and the asian carp. >> i think it will devastate the

sport fishing and recreational fishing on the lake. and it's something we can stop. >> reporter: drawing a line in the water to protect water's waterways from an ecological menace. anne thompson, nbc news, chicago. the international space station now shocked with the shuttle "endeavour" in orbit is as big as a football field and it will again be visible from earth tonight as it passes overhead with its combined crew of 13. more people, by the way, than have ever been together in space at one time. that dot moving quickly across the sky is what it looked like last night. to find out where and when to look tonight, check out our website, nightly.msnbc.com. up next, hollywood discovers the real world. every day, transitions lenses are there to help care for my sight. announcer: transitions lenses adjust to changing light to reduce glare and help protect your eyes from uv damage so you can see better tay... and tomorrow.

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finally tonight, americans like to turn to movies and television for a little escapism during hard times. often there's just no getting away from reality. these days even entertainment is an economic indicator. here's nbc's chris jansing. >> reporter: call it recession tv. >> i had to kick the renters out and move into my parents' house where i grew up. >> reporter: on the new hbo series "hung," the leading man is underpaid, uninsured, and newly divorced. >> now all i seem to do is try not to drown. >> reporter: in a world of bank bailouts, automaker, art rfting

life. >> entertainment at its best is grounded in reality. so, i mean, there's no good writers aren't looking at what's going on today. >> reporter: so "30 rock" has repeatedly mined the financial crisis for laughs. >> i've never fired anybody in my life. >> it's an acquired skill. >> reporter: so has "south park." >> an economic crisis has hit south park and the nation like never fore. >> reporter: and "the simpsons". >> here's your new monthly payment. >> reporter: in a trailer for his movie, michael moore asks for money. >> ushers will be coming down the aisles to collect your donations for citi bank, bank of america, aig. >> reporter: ben affleck's upcoming film is about the aftermath of corporate so downsizing. hollywood and the entertainment industry have produced memorable story lines from times before, from "to kill a mockingbird" to "the waltons."

but where there are reality checks, there is also escapism. the top grossing movies of the year are "transformers," "up!" and "star trek," all in a galaxy as far away from downsizing as you can get. >> it's about finding stories at strch universal themes. that help people deal with tough time busy telling them what are universal values we can always adhere to? >> reporter: the universal theme of love is giving romance novels their best year ever. >> if you're stressed or depressed, bottom line is romance novels are cheaper than therapy. >> reporter: don't expect "dynasty 2" any time soon. these days, even in the high-flying hollywood world of "entourage" -- >> what's wrong? >> what's right? have you seen any stock portfolio. >> reporter: the recession has gone primetime. chris jansing, nbc news, los angeles. >> that's "nbc nightly news" for this sunday. brian