captioning sponsoreby macneil/leer productions >> lehrer: good evening, i jim lehrer. on the "newshour" this wednesday: the lead story is the dl between the white house d hospitals health care reform. then,he other news of the day: an update onhe unrest and etnic clashes in china; the latest on internet aacks that hit the white house, thstock market a elsewhere; a paul lman report on ex-convicts a ex-executives looking for wk; antwo takes on stimulating the ecomy. margaret warner othe economic

summit intaly, and the debate on the need for a second stimulusackage. major funding for the newsur with jim lehreis provideby: ♪ >> oil, energy, the vironment, where are the ansrs? this isn a liberal or a coservative issue. it's human issue. as an ener company, chevron has areat responsibility, so we'vimproved our own energy efficiency 27since 1992.

and now we ask you join us in one of the most impoant eforts of our time: using les will you join us? chevron, human energy. and thwilliam and flora hewlett foundation, working solve social andnvironmental probms at home and around the world. and with the ongoing suprt of these institutions and undations. d... his program was made possle bythe corporation for public broadcaing. and by contributions tyour pbs station from viewers like u. thank you. >> lehre major hospital oranizations joined the effort today to cut medical costs. itas the latest move to help pay for sweeping reform of the health care system. betty ann bowser haour lead story report. >> reporter: vice presidentoe bideannounced the deal in

washington todawith admistration officials and leers of the nation's three largestospital groups by his side. >> those o don't have insurance because they' lost their jobs or havbeen denied coverage becaussomeone in the family has a preexistg condition are throwin themselves at the mercy the peopleho represent the major hospitals in this-- inhe united states of america tay. and, as a result, ouhospitals are crackinunder the weight of providing quality heah care for amicans who lack iurance. >> reporter: under t reement, the catholic healt association of the united states, the american hpital association, and the federion of american hospits would give up $155 billionf future medicare and medicaid paents over ten ars. the vie president had few details on exacy how the savings would be aceved, but he outlined the bac plan.

>> these reduions will be achieved through combination of livery system reforms, additional reductions in hospital and additnal reduions in the hospital's annual d inflationary updates. as r system becomes more efficient thks to innovation, technology and electron recos, we'll show increases-- we'll sw, i should say, increases in medicare an medica payments to hospitals. as more people a insured, hospitals will bear less the inancial burden of caring fo the uninsured and t underinsured, and 'll reduce payments toover those costs in tandem with that reducon. >> as more people are cered than hospitapayments can go own in wif category.

but that there has to be link between t two. we'reery hopeful that this is the first stepoward helping the nation get to full corage f all of our ericans and as we do that, more uncompented care f hospitals will be compensated under thisew coverage,so we can thentart to cut some of e payment elements. we will be reimbursed aower ra than wld have been otherwise expectedor projected. but overall we'll receive more revenues becauseore patients ve coverage. >> reporr: according to the a.h.a, the nation's hospils lost an estimated $34 billn in 07, caring for those who cou not pay. today's agreements about half ofhe amount of savings inially proposed by president obama last month. the deal wasorked out under thguidance of senate finance committeehairman max baucus who's trying to crafa health

reform bill. two weeksgo, the montana democrat and the white hse reached a separateeal with the phmaceutical industry. under that agreement, drug manufacturers would ctribute $80 billion doars over ten ars to cut the costs of dru r the elderly and help fund reform bill. and last weeretail giant wal- mart announced would support a requiment that all employers provide health care fotheir employees. all of which l to today's announcement. the aeement may give the president some momentum on health care reform aa time when lawmers are still feeling the sting of high eimates on the oveaul from the congressional budgetffice, and are struggling tpass legiation that would not increase e deficit. >> th is exactly the kind of dealmaking at underlies any great efforat legislative reform.

>>eporter: sara rosenbaum chairs georgeashington university's health picy department. >> what the white hou and the congress gets out ofhis is the tremendous appeance of oodwill, momentum, willingne to bpart of this vast effort at reform this fling that sort of all hands on deck for refo. nd this inexorable movement towardshe goal line. and i thi that becomes as importa in this kind of a climate as the actu savings. reporter: house minority leader johnoehner wasted no timeoday in leveling criticism of the biden announment saing, "the administration a congressional democts are literallyullying health care groups into cuttg backroom deals to fund a governme takeover of health care." at the same time, therwere questions about whether t savings will reay be as significant as the administration says.

>> it's definity real money in that you can see tt hospitals are going to get paid ss over the next ten years tn they otherwise might get pd. but, at the same ti, there are two aspects to ts that make thmoney someone less real, which raises the skeptics. ones, that some of the tradeoffs that thhospitals might have gotte or that pharma might have gotten, ar worth monein their own right: "you know, we n't cut you here but we will cut you he." the other tradeoff is that, d this is an artice of the problem of h legislation moves in washingtonsome of the most important savings are to e healthcare systems as whole-- they're not necesrily savings tohe government's bottom li. >reporter: the white house an democrats are continuingo work on other possible agreemts to cut costincluding one with doctors.

>> lehrer: in other news toy: ousands of chinese paramilitary tros moved to stop ethnic blooded in the country's nohwest. least 156 people have been killed in shin-jahng provin since sunday. the violence pits hahn chine-- the country's majory group-- ainst the uighurs, a muslim minority. we have a report fromindsey lsum of independent televisi news. >> reporr: marching through th streets of urumqi, the people's liberation my-- their job now, to restore peace inhe xinjiang capital. troop carrier after trp carrier drove beten the high- rises, a huge show of fce meant to quell even ththought of further unrest.

people looked on as a rorted 20,000 soldiers, paramilaries and ri police, many fully armed, fanned outcross the city, guarding buildingsnd intersections. they blocked roads, ready use ovrwhelming force to stop groups of ethnic uigrs and han, armd with makeshift weapons, from confronti each other foa fourth day. surity forces gathered on peop's square in the centre of the city. thchinese government sees the trouble xinjiang as a threat the stability not just of t oil-rich region but t entire nation. punishnts will be severe. predent hu jintao abandoned the "g8" suit in rome, flying back to ijing this morning. unprecedented move for a govement which carefully

nuures its international image of stability. more than thousand people have been injed, some now covering at the urumqi people's hospital. this han woma beaten by a uighur mob, sayshe's lost her husband. >> translated ): my ats have een going round all the hospitals searchg for him. he must unconscious, 's not amongst those o are conscious. they've been the emergency wards b can't find him. >> reporter: in the uigur quarter, the walking wounded the government sn't said how many oeach ethnicity were killed or inred. people were showinreporters video fooge of yesterday's attacks by han agait uighurs. >> ( translate ): they came to kl people, i was wounded. thy came to our neighborhood looking f uighurs, they hit and cpped. people are dea we didn'to anything. peop were here studying, some were in this mose. what they meant was: l uighurs should be kille >> reporter: the heavy secity presence may enforce ca, at least for the moment.

but the ethnic rifts in ina's far westave been exposed and it's not clear if thgovernment has any other licies to deal with the anger anresentment which have been ignite >> lehrer: in addition to sending inroops, chinese authorities have sharply curtaid cell phone and inrnet service in the riot zone. goverent censors are also deleting videos and text dates on the vionce from social networkinweb sites. north korean leader kim jongl has appeed in public again for the first time sie april. it was onlthe second time ince he apparently suffered stroke last year. kim is 67 years d. he looked fraias he marked the 15tanniversary of the deathof his fatr, kim il sung. the elder kim found the communist nor korean state. inakistan, intelligence officialreported u.s. missile strikes-- by one aircraft -- killed at least militants.

it was the latest barrage in south wazirista near the afghan border. the region is a strongholof th pakistani taliban leader. and in afghistan, a u.s. soldier s killed in the western part of the couny, and a british soldr died in the south. seven british troophave been killed in theast week. policin iran have now released most the people arrested during protests la month. the announcement came toy. at least 1,000ranians were detained aftr a disputed presidential election. overnight, presidt ahmadinejad insisted his w government is legitime. he gave h first nationally televed address since the vote >> ( tranated ): in the recount of the votes, no fault w discovered and bacally those who had claims couldn't even provide one documenas a proof of fraud in the election. the whole nation undstood this, although we don't expe ornary people to provide

proof, but it is not acceptae from those who cim to be policians. >>ehrer: while the speech was underay, people across tehran took their rooftops to shout defiance. such prests have become a ghtly ritual in the iranian capital. in u.s. economic news, t price of l dropped sharply again. it's down 18% just over a week. today, oil cled just above $60 a bael in new york trading. that's aft the government ported growing supplies of unus gasoline. and on wall stree the dow jones industrial avera gained more th 14 points to close at 8,17 e nasdaq rose one point to close at 1,747. president obama has nominat dr. francis collins thead the national institutes ofealth. collins led t human genome pject that helped map the human genic code. a white house announcement tay called him "one othe top

scientists the world". his nomition is subject to senate confirmati. btish scientists claimed a breakthrough today creating human sperm froembryonic stem cells. the researchers reportedhe advance in the journa"stem cells and development". they said it couldead to helping infertile m have childre a number ofther scientists challenged the fdings. they id it's unclear normal spermells were actually created. >> lrer: and still to come on the "newshour" tonig: searchingor a job; the italy summit; d the stimulus debate that follo a look at those cyber attacks hitting jor u.s. government agencies. jeffre brown has our report. >> brown: the attackbegan july 4th weekend targeti computers at the white hous pentagon, the statetreasury and homeland security departments.

amo other government agencies and several prite organizations, including e new york stock exchange. the other major target: sth korean agencies. today, that country's naonal inteigence service reportedly told wmakers there that it believes noth korea or nor korean sympathizers we behind the attacks. we getore now, from randy sabett, aormer analyst at the national security agen which was also a target of the these attacks. he now workon cyber-security issues as a lawyer in prive practice and rod beckstro president of the internet corration for assigned namesnd numbers, and foer director of the national ber-security center at the department of homelnd security, r beckstrom. rod,irst, simply, wt exactly is a cyberattack and specifically what are these atcks itended to do? >> sure. thank you. a cyr-attack is when hacker, somody who writes computer code writes somethg malicious to attack and infest either one

machine or network omachines and thathat network can either be use to commit an act of crime and steamoney or to attack government webses as in thcase of whate've seen here where itppears that hacker wrote some codthat was prbably mounted on weite in south korea, spread to somewhere betwee 30-50,000 machies and then send out all these maliciousequests to governme servers in the u.s., core radio and so companies. >> own: these kind of attacks e not all that uncmon. what d the links, t breadth of targets of the attacks tell you about this case? >> think the nature of the attack and the specific target, is that were chosen, some of the initial speculati was that this waserhaps a nation back as you pointed outype of attack. but isome of the folks that i've been talng to today and in some ofhe later reports that have co out it appears in some cases th this may not

nation state backed, but maybe simply a hacker ting to ge attentio if you think about wha a nation-state attack could wt to accomplish,imply disrupng a number of u.s.government websites wouldn't be the main target. on the other hnd, there is a ssibility that an attack like this coul be used as a distraion. so whi theisruptive nature of thisattack against these websitessimply bringi them down is not necessarily gaining access to ssitive information, there maye, because of the distraction may other attacks going on tha we don't know about. >> brown: how much disruption ere was? what did they actually accomplish this case? >> well, this is a disibuted servicesttack which has -- brown sathat again? >> distributed deni -- >> ofervice attack. >> brown: whicheans? >> whicheans there are a number of compers, personal computers corpore compers,

any number of cputers th have been infected with what's called malware or software at the attackers then use asob pointed out they launch this code that'seen put on tse computers, that th cause a number of essentially bogus requests to be launch t agait these websites. there by notllowing legitima requests to get through essentially the websit are flooded wit requests. the analogy would be in the lephone world, theld ashioned tephone world you have someone'shone being called by severalundred or several tusand people all at the same time so legitimate call can't get through. >> brown: rob beck stroms there a world of pontial perpetrators out there, randy ss maybe it wasn't a government, maybe it's a hacker, can a lone hackero something ke tis? hodo you find out who did i >> absolutely.

this is not a sophisticated attachere as ray talked abut, in fact this islike a scud missile attack. ts is old technogy that was ed in this atta that's been around since 2004. it could be as simp as somebody who want to make this potical statement, or harass the two countries and their governments and few other rivate parties, just paid a cybermercenary. there are mercenary hacrs how to what will take a cash payment. that he have been a $10,000 inestment or $50,000 investment by somne who base you canly want to over lad all the government mail boxes i the systems. randy talked about the telephone system, anothernalogy is the mail syst where you are receiving letters and ckages you mailbox can take maybe 20 let a day then 20 milon then a lot of flying down on theground nogoing to get to you. that's wh it is, an over ld at the mailbox point. one person could hae done this, he question is, were they dgruntled or sponsored by a state act. it's hard to get to the ttom that hav >> brown: ho hard is it to

get to the bottom of who done it? >> well, y know this attack probably came off of a cple of bsites in south korea were pbably hacked by the hacker who plante the code in the photoson the webses, maybe ideos or something else inwhat we ll the html page. en, users went too look a those webpages, ey didn't even knowt, but they were downloadg thisalicious code randy was talkg about on to their machine. and then it goes to work. now, first ideify those machines that a infested, tt process is going on right now. then youad to fure outhich websites did they go to where they downloaded it from see whetr the bad code sill there or i may be cleaned up it's there, the you got to go scroll back try to figure out whohad access to that or brokenñ[ in to theystem that have site t plant the code. it's a bit of what we ll, forensics work. to try to get to the fingerpnts, digital fingerpnts figure out where this might ha come from. >> brown: randy, what kind of defenseshere are? ar dfensesn place or do

organizations and ageies wait for something t start and scramble in? how does that work? >> for the most part, the approach that's taken today is defensive. 's the approach where you ha certain defenses in place, you react in -- depeing on the type ofttack being launched you react accordingly, in this case as rob pointed out there are a number of ways of first of alllooking at where it'scoming from and then reactg to it by -- in this case, with th distributed service attk you have to make certain changes to your setting andbring the websi back up. but becae of the nature of websites, one interesting thgs abut this ttack it's sustaed nature. this stted several days ago, and itcontinues, some of the websites have that were inially he can attacked cam back up then wentown agai froa defense pspective you can put in place counter

measures but ulmately because the nature of the web a the w that the various websites work the attacks could in fct continue. >> brown: isthe defense coordinated? i just ticked off a bunch of u.s. government age seat, new york sck exchange and list goes on. >> re. >> brown: a they working together? ors it st of every ancy for itself trying to debug itself? >> i think t answer there is, a combination. in other wos, we are oking today at a number of different policy are use acro t u.s. government rated to bersecurity policy. on of the issues is coordination within the governnt but then also in termof public-private sector coordination. ere are a number of difrent entitiethat do work together to conv information to ea other, bui do think therare certain commentats out there who view there being a td for greater cooperationamongst the

ifferent entiti. >> brown: rob becstrom where are we in that larger effort to deal withhis? >> sure, there's a number o steps, as randyaid the firsti this do you if you're a company orovernment agency a attacked e of the first things you can do street call your netrk service provider or isp s this is happening, can u plea start blocking and filtering thingshat appearo be malicious. usually they can. the america isps and internationally they'r gtting very sophistated. you make at call then work internally with your i.t staff. then after do you that you start reaching out to your partne in a collaborive fashion wch i was involv with running the tional cyrsecurity center which wasuch a collaboratn center on security. icanas global internature cporation that handles th naming and adress for every mailbox in the internet globally over 200 million, we have relationships with every sine country the world and play somewhat of s low mat particar role when they occur. partularly if they affect the naming and addressinsystem

which doesn't yet but ivolves multiple countrie there's a ole lot of different networking that goes on, ganically as well as in somewhat structured fashion. that can contribu brown efly, randy, the obama administering is trying t come up with its own poli on th well? >> s. the oma administratio in fact has gon further i the area of cybeecurity than any other administration in terms of cusing onthe issues,utting togethe a comprehensive cyber-policy review, e 60ay review as itas known that was compled at the several weeks ago. and we'renow looking, t administration is oking at what to do next from the standpointf- again, ordination or cost of governme, coordination wit private sect, and en some of the oader poly issues related to th defensive and offensive types of issues, a

whole nmber of different things across the government reted to this. >> brown: all rht, facinating. randy sabett and rod beckstrom, thank you very much. >> thank you. >> leer: you can ask jeff's guests questions about he interneattacks and how to protect against themn a forum n our web site. >> hrer: now, some perspective on finding work in a bad jo market. it comes from some peop that o economics correspondent pau solman first introduced uso in a story earlier this mont his latest report another in his series on making sse of financial news. >> reporter: unemplod engineer peter urdivant, convening an executive networking group meeting insuburban chicago. it starts with a report on how much time was snt job hunting e prior week.

>> i had a pretty od week last week. i had 37 hours invested in b search. reporter: john frech lost h auditingob in january; barbara tomak, her human resources job in february 2008. >> for the 20 hours spentn linkedin, i was ableo garner a phone interview out f that and now i actually have face- -face interview scheduled th week. >> i had usual mgood numbers as far as urs were concerned: 65. >> reporter: laid-off ecutives all, inly in manufacturing and banking, they'veeen out of workon average, almost a year, neorking like mad. taped them for a story on t unercounting of unemployment, and were impressed by how candidly they spokebout just how tough iis out there these days. >> the agea item i have is how secure a conversation wih a contact that we've be given. it's just i can break through.

catch them in t parking lot. >> stalk him! that's the idea! that'll work! >> reporter: former i.t. exetive bharath tolappa said he'd honedhis particular craft. exactly what is your stking technique? i could've tried to reh a person through as my as you know a doz people. >> reporter: a dozen ople, and then how ma emails might you have sent? >> probably four doz emails. >> reporter: ur dozen emails and then w many phone messages would y have left? >> probably y know about 24 messag. in many of those cases'm still waiting. >> reporter:ow much more demolizing can you get? or as ex-financial execute chris demaio put i no one's really interested talking with u >> reporter: mnwhile, in downtn chicago, another group of unemployed who are also undcounted. these j seekers are at a more dimentary stage of the process.

>> i'll have my secretary contact you in a daor so. >> thank you mrs. bel have a good dy. >> alright. wh you think? >> his gumhewing. >> gum chewing. stickg his tongue out. michael jordan is n in here! >> reporter: ette bell of the safer foundatiointroduces ex- convicts like dimitous johnson to the etiquee of job search. but the odds are a lotonger here thaeven in the suburbs. because it's kind of complicated for us out here,ou knowith the people who are getting laid off, it's ry, very hard for us toet jobs with backgrounds, you now? >> repter: background meaning? >> meaning a record u know, convicted of a cre. >> that's the reas why a lot of people return to the penitentia. >> rorter: larry wohlgemuth d time for robbery. me, i've been back and for, i ca find a job so i go back to my old ys because nobody will hiree. >> reporter: our audiences going to heathat, and i can guarantee y they'll say: what s he threatening us, that he going to go back on to e strts if we don't give him a job?

>> i've tried several tim. i mean i've go, i've filled out applications thinkg that i'm gog to get the job but they won't hire me s soon as they do the backgrod check they know that their opinion of mes just totally chaed. and somemes you have to lie to get in the door and once yoget in thdoor you wait 90 days and then they t you through this process thn they find out that you arehis bad villain and the employer sayyou know you're a great guy but our insurce company - we just can't ve you here becse of your background and they have to let me o. >> reporter: how many pple here feel t same way larry oes? cephas ight did not. >> i think it all about being movated and positive with yourself tonow that you want to, you'rgoing to be that better peon, you're going to be successful. >> i believe he'romanticizing the tuation. i mean w long is it going to take you until you get ur

state mind is going back to, well i might as wello stick sobody up? >> i undersnd larry's point of view because i'vseen people who ve a dejected mind frame but we have pull ourselves out of that by bei optimistic. we have to have some type faith which draws oa higher pow. ether it be above or within >> reporter: listening michael dis (who did time for sexu assault), i had a final question folarry wohlgemuth. you cou say that this is an argument forultivating a certain dege of self-delusion. are you simply unle to do that? >> you probably hit thnail right on the ad when you said that. probly that's basically where its at right now. >> the purpo for us having jo-readiness here so that you guys can fi gainful employment you might geturned down 100 times. it's the 101st time you mit

get your big break. so 's not about you know being discouraged, or ronticizing the situation, bause it is what its right now. the past is exactlyhat it is - it is ur past. we can't change it, buthat you can chae and what you want somebody to see is the n you. you wt that employer to see the person thatou are today and not define youy who you were. >> reporter: whatas so stking, to us at least, was how similarhe psychological ruggle was at the executive network grou >> it's scouraging when you keep hearing and all your efforts don't brg back anythingf value. if you get one yes out of 5 nos, you kn that's a good odd, and thats whapeople have got to internalize in goinghrough the search reporter: manufacturing engineer john leone. >> its sort of like brothers arms. you know re going through a very difficult time in oulives and just to see that re all helping eacother out - it's encouraging.

>> reporter: and yet, at the ex-convi group, the constant battle is with discouragemt in an economyike this one. >> we were all senior execuves in our preous positions and we had authoritywe had people who listened to usnd you know we had a say in w things were done a all of a sudden you know, u're not getting that connection and now itall-- you el like you're adding noalue to anythinthat you're doing. >> reporter: even though y know in this, t great recession, worst since e great deession, that it cant possibly be your fault,ight? >> that's a good exse for me to ma me feel better about myself but you know, ihelps me get thugh the day but i still, i et down because i just don't feel like im beinproductive. >> report: that may be how most of americas many millins of unemoyed feel at the moment. >>lehrer: now, two looks at stimulating the economy. first,argaret warner reports on the international effort

the ecomic summit in l'aquila italy. shealked earlier this evening withudy woodruff from the international press center, where jonalists and officials from dozens of countries ha gathered. >> hi there, maaret. so going to this meeting, t big concern was the economy, the worldwiderecession. ow are these lears addresng that? >> warner: judy, it hangs heavy over this meeting. quite differently i think from the 220 in london april, there was a sense of economic crisis, also the sense o the leaders were gettng together forhe first time taki steps togeth and there was foard momentum. th time there is some sort of sensehat the recovery have stalled or at least momentum has the leaders a wondering about en and whether the stimulus lans will work. in that climate, wejust were told, the stements haven't even come out yet, that today's meeting which is the only major

g8 econoc meeting of the entirehree days realy just rffirmed what they did in london, recommitte everyone to continue withheir stimulus plans, said of course at some point we'll have to unwd from the heavy snding. and pple should -- countries should startlanning for that, but not institute it. thone thing they did do was take steps to help countries who have been hardit by this. the estimates are 20to 90 llion additionaleople have been plungedin to desrate povey by the crisis and th are -- call a security initiativewhere the richer countres will commit i think i's $12-15 llion to help ricultural development in these untries. buton the big picre global ecomic downturn, this is relly a weigh stion between the g20 london and the g20 come upin pittsburgh. i think it's really testament to the recognition he that you

n't do an international response to globacrisis without the g20 meers who aren't memrs of this smaller g8, namelychina and india. to start with. we see t other big issue there, addressing is clima change. >> warner: yes, judy again, they're going to be two different statents. theoday th g8hat is industria countries reaffirmed at they said last year. cut emissions in half by 2050. they committ to do it more quickly in the own case, 80% by then. these are all very far away numbers. what president obma had hoped for was to haveomorrow when the lrger group meets, including cina and dia and brazil to have them sign up for thsame goal. weere told tonight that we'll definitely notappen. though they didn't say so, i think the sence of president xhu of chin who i left i think

left this morning go back to china to deal with the ethnic unst there, that thatakes it very hard to break any ki of log jam. and inhe past, fo instance, at the las summit it was presiden obama was president whu at their dinner th night before and ne day theyroke major log m on a related isue. this time esident obama will notave that opportuty, the chinese are reesented but not the leader. >> woodruff: margaret, the summer is taking pce in the same location wheren rthquake hit where there were after shocks as recent as last week. how has that affeing these meetings? >> warner: well, ju, as you said, the g8 summit was moved here by the alian prime minister to draw atention to he devastation in this autiful region north ofrome. i ve to say that the tremors last week certain alarmed

officials here,ne was 4.1 on t richterscale. there e evacuation plans for the lears if one top hit while we're here. they will alle moved ou of buiings, under tents then helicopters out. the rest of us wil somehow be traported by bus back to roe. but, e italian pre mnister if he wted to draw meia tention to the devastation, it certainly hasn' happened with all this med here around me. were with them with theroads are newly paved bilding was built in a month on top, there is alfrse dining wi wineand italian delicacies yo don't have a nse of t earthquake. president obama and other leadersid tour the cenr of the city and thre were caras there, but i'm not sure it's que accomplished the italian government's aim here. >> wdruff: needless to say

we hope thatverybody there inclung you is safe. bu you mentioned the host, itlian prime minister svio berlisconi 's bin the middle of his ownshare of controver, is that hang an affect on these meetings? >> well, that'sard to say. certainly the bz. he's embiled in this scandal, his wife is accused hf cavting with young won underage d aointing former paraurs to the cabinet. been a lot of buzz and kind of kerfuffl,bout it, reports that the spouses didn'tant to be enterained by the female ministers today in fact tey finessed that, michelle obama d spouses were entertained andosted by the mayor's ife. much was madeoday of presiden obama making a pot when he talked tohe presidt, a5@3 different man, 84 year old man saying that, ialian peopl so mired him for his integrity and griousness which seemed

od formulation if you weren making contras this would a be aide show, judy, cept for the factthat it fit in with this criticis by foreign diplomats that they are so distracted with these charges that the preparation substantively fothe summit is not ver good. that the americans h to finally step in and come up wi at security initiativ sort of try to drive the exrt conferences. the americans publicly de it, b last nightin background briefingid say, well, just look at the exustion on the faces of our experts theyill tell you how hard he's been working. wther it's aually affected this summit, th's very hard to say. certainly very ch in the air. >> woodruff: margar warner reporting fom italy. margaret, thnk you. >> warner: thanks, judy. >> lehrer: now, economic stimulus part o: the new

a nuclear secity summit in whington next year. >> hrer: now, economic stimul part two: the new dete. gwen ifill has that ory. >ifill: it's been five months since president obamsigned the $787 bilion stimus bill and somof that money has started making its way to stas and to construction projects. the white house claims t stimulus package has so fa sav or created 150,000 jobs. t the economy has lost six a milli jobs since the recession began in december 27. and given the most recent unempyment report-- another 433,000 jobs losin june-- ce president biden defended the package thiseek. he said the bigger oblem was the deh of the recession. >>and so the truth is, there was a misreading of ju how bad an ecomy we inherited. now, that doesn't i'm not-- it's now our rponsibility. so theecond question becomes,

did the ecomic package we put in place, iluding the recovery t, is it the right package given the circumstans we're in? and we believe its the right packa given the circumstances we're in. > ifill: but republicans don buy that argumenor talk among house mirity leader john boehner made that case th afternoon. i found it interesting over the last couple odays to hear the ce president, vice president biden, d the president mention the ct that they di't realize how difficult of an ecomic ciumstance we were in. now this is thereatest fabrication've seen since i've been in congress. i've sat through the meetings at the wte house with the present and the vice president. trust me, there's not e person that sat in those rooms th didn't know how rious our economicrisis was.

for a clor look at the stimulus, how it is ois not fulfilling pectations. we turto members of congress alsto mark zandi, chief economist at moodyconomy.com. he has been coulted with coress and the white house during the curre crisis. house minority ip eric cantor of virginia, cis van hollen of maryland, head of the democric congressionalampaign committe mark i'll start wi you, you were ground zero in all of this when people were taing about a needor stimulus plan. is it working? >> yeah, it'sorking close to what i uld have expeed at his point in time. it's still early days, only four or five months in t the package. but ste governments are getting checks, unempyed workers are gettg more nefits. social security recipients got check in the mail in may, pople who are working ve lower withholding. business tax cu are ltering through, even getting infrastructure spending. everything is going according to

script, at least so f. >> ifillet me ask eric about. thatou've had disagrments on this poin with oher members of yourody. but al with the white house, wh do you think abut how the package haseen gog? youidn't support it, i shou be said. en, ihink one thing we can all agr upon as we heard the majory leader say as well asice president that we're all dispointed where things have turned out as wead hed a lot differtly. cleay the stimulus or so-calledtimulus plan to snd almost 00 billion has not worked. we were promised,he president said weould keep unemploymnt under 8.5%. we're now over.5% on our way to 10%. we have had massive heorrhaging of jobs in tis ecnomy. and the pesident said that we d to act and act quickly. and i ess that's why speaker pelosi said it very nessary to

jam this bill throh the house annow we're seeing that it didn't work. so the question really is, what is the presidt going to do about itas the vice president indicated, its his economy now. and so l's start to do thing a smart way rher than rush to judgmentand then push ou the moy without any result. >> ifill: let me ask kiss van hollen about, th it was in th reading of the ecomy, something t president backed away from alittle bit. maybe you can explain to uswhat it is that vice president mnt by that? >> sur i thi what he meant to say was tt, the economy that presint obama inrited from george bush, t economic dwnturn and recessio inherited from georg bush, turn out to be deeper and declineseeper than peoe, includi many econosts anicipated. but tt's a ver separate queson as to whether or not we'd beetter off today if we did not do the economic revery plan, whic is what eric is proposin that we have done not ve passed th plan.

the fa of the matter is that mk said, we're a whole lot better off todathan we would have been if th had not en pasd. the fact thate're not even betterlace reflection ofhe fact that the economys in very deep tuble. now, the fact is also tt this is a two year economic recery pln, about 200lus billion dollars aready been committed or spent and that ove the next quarter, wenticipate more tlays because one of the things the president wasvery clear about and congress was very cle about is that we want to makesure that these monies are spent wisel that they're not wastd. a that requires greater oversight and transparency. so we're trying to accomplish both goals and we are on track. >> ifill: if i could k you that, cause you said on -- sit on oversight committ that was talking abut this today. there was some concern among oer lawmakers and folks w testied before you that maybe, the money wa't being allocated correctly? >> well,he testimony in font our committee that w we have thre governors, al three talked about the facthat there

had been job creati and jobs sav in their states as a result othis economic recovery packe. they were unimous on that point. theirtates were better offas result of this, people lived in the state were bter off as a result of ts. now they d -- what they said was th because the accountability provisionsome of the moneyasn't gotten out of the door as fastas it might have. but again, we wa to ke sure, in order to maintain the dibility of this pogram, that those moniesare not misspent. and that reques more oversigh andmore accountability and we've asd the govenors to participate in making sure tt they are the taxpayes watch dogs to make sure the smoin we spent. >> ifill: has that moneybeen spent the wa it's supposed to have the accountability provisions thathaslowed the process that it was -- thi was supposed to be a speedy injection and hashat slowed it? >> yeah, i think so degree, sure. i think everyone wants t make sure that the money gs out in prer way.

and that reqres a lot more formation to be provided. that slows thin down. but let me say, i do think thin are getting out pretty close to what i would have excted. the infrtructure spending the money for roads andbridges and otherhings, that is going to takeime. underhe best of circstances i don't ink we wod expect really see that toward the send half of this year in to 2010. all he other parts of the stimulus tax cuts, the tax credit for first time home buyer, nefits to businesses, aid to state gernment that is flowi to the economy. i think it i having imct. here is the most important point,he biggest economic impa from the stimulus i't now, is going to be in the third quart, the q3 in mo importantly inq4 of this ye. we really won't know with any deee of certainty until vy latthis year whether this stimuluplan is workingnd worki well enough. mr. canr, how abo that? is it too soo to say?

i am just sitng here a little bit in disbelief about making thexcuses for the faire of this bill. he president promised that we wou do sothing to stave off the job loss. and if yo are talki about what a estimate knew husband bill should do, it was abo preservin protecting, creating jobs. this bill has failed miserably towards at ed. chris iicates at maybe we, as repuicans, wanted to do nothing. now he knows thats not true. wepresented a plan to the president, thelan focused on e job generatos who were small business people we've got to go about getting investment started ain in this econom that's the oy way that recory will take place. any kind of lasting rebound has to come from inveor confidence f. working families from, small businesses. putng their money ba to work again. this bill has failed in terms of that end. what wee seen now is as you

indicated, emendous job loss. people are losing jobs at about eight jobs a minute. that's eht households no loer seeing their paycck. ndering how they're going t get thugh the end of the month. if you're a fatory workern the midwest, if you haven't lost your job already, you're worried you're going tolose it. if you are retail ses clerk, you know what, you are worried about ur job becse whatdo we have coming nex we've got a wage hik imposed on the force. now what we see in congress is massive attempt to impose a nation energy tax on families. we've got too many things ing n the opposite direction witn we should beabout creating job here. >>ifill: let me ask you abut this, they say the createdor saved 150,000obs so far is ere any argumt to be mde that larryommers and others have made that - that theyth should have ben more money? >> how can you say that when nemployment now is approaching 10%. the president has promised at e were going to sav

unemploymentrom going past 8.%. that's w evacuee needed to act with such urgency chris iicates now, all of a sudden we're realizing that tre's a lot of was involved when you brush hot 800 billn from washington. never des federal government perrm the way that we could sesmall businesses perfo. we've got to go put in confidence back in to our economy, we do that by helping small businses. we ne an investment-ed covery not washington spending our way out. alle're doing is pig up the debt righ now. i think it's reflected in the lack of confidence in t econo and market an certainly in the polling or the last few days. >> ifill: chris, listening to what eric cantorhad to say it's clar no you're not going toget support for second estimate pulus from his sidof the aisle. is the going to be support r another fusion from your si ofhe aisle? >> well, first, i think american people are srter than to think that youan turn ove an conomy or turn it around o a

dime when you've got an economy that is siing quicy. i think i give the arican people more credit than that. numb two, the president obama's recovery plan had big component otax relief for middle income and lower income americans. unlike the republican plan which w essentially a tax relief when fact aing more to the deficit finay, if there's any riticism that can be leveedas you ggest there's some pple sayi that we should have done more by way of investments. if ou had the y my republican colleagues we'd hve done who ot less and been in deeper trouble this is runningp a down escalator. >> ifill: what about second stimulus, is that possible? >> it's premature to talkbout th now. wexpect more of the moneyo be expended in the third quarter. think we're going to haveto wait and see wt impact th has on the ecomy. but again,if you're ruing up an escalator that's going down, if you stand still you're going do fast. and the rson you -- the reason

we're continng to make some progress is tat we continue to take some steps forward, b because we've inherit economy going dow ft, it obviously is difficult to feel. i -- of course people are sufering out there. we inherited qui a mess we're trying to fix it. >> ifill: yore the n-politics, give me the pros d cons whether second sill my husband is dered or even cessary or politically feasible? >> wel, i think it'sremature toonclude one way orthe other. we'll have to wait until t end of he year see highway thiss working then at that pointake determation but ll give you benchmark. we brout .1 -- we lost 12.1 million jobs in the firs 1.3 million inhe second quarter. current quarter w lose three-quarters of million, fourth quarter 400,00 by this time xt year not losing any jobs theny my definition this stimulus worked reonably well. >> ifill: ric cantor, how

minity whip and cris van hollen. thank you all ry much. >> thank you >> lrer: again, the major developments of the day: the nation's three largst hospital groups agreed to ge up $155 billion dollarin medicare and medicaid yments over ten years, it helps pay for sweepg health care reform. and thousands ochinese paramilitary troops moveto stop ethnic bloodshein the country northwest. on newshour.pbsrg, an online- only feature tonight. a slide show from the rican nation of nir. shorterainy seasons there mean severwater shortages and have turnedrazing lands into deserts. he "newshour's" journalism available whener you want it at wshour.pbs.org. we'll see you -line and again here tomorr

evening. i'm jim lehrer. thank you and good night. major fding for the newshour with jim lehrer is provid by: chevron. intel. supporting math d science ecation for tomorrow's innovators. the nional science foundation. supporting educatn and research ross all fields of science and engineering. d with the ongoing support o these institutions and foundations. and... this progr was made possible by e corporation for public broadcasting. and by contributions to ur pbs station from viewe like you. thankou. captioningponsored by macne/lehrer productions

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