tv Nightly Business Report PBS September 22, 2009 6:30pm-7:00pm EDT
captioning sponsored by wpbt >> pl: federal reserve policymakers are sitting arod this very table bating the healthf the u.s. economy and there's reason for optimm. their 2-day meing comes as stocks hit newighs for the year, on the growing beliethe global econo is on the mend. >> suzanne: calling it an opportunity to make story, the senate finance committeeegan rking up what could become storic health care legislation. but with almost 600 amenents already atched, this reform is a long way from becoming l. >> this year we'reunning about 25% down in terms of renue compared to last year, while hethcare costs, if we kept the same plan, would re by about
30%. >> pau a look at the challenges compani face when designing their employ health plans as o series bill of alth continues. >> suzannethen, lowe's shares get nailed. fallin4% as the home provement retailer offers a cautio outlook and scales back its expansion plans. >> paul: i'm paul ngas. >> suzanne: ani'm suzanne prat susie gharib is on assignmt. this is "night business reportfor tuesday, september 22. "nightly business report" is made possibley:
thisrogram was made possible by contributions tyour pbs station from viewers le you. thank u. >> suzanne: goodvening everyone. one-sih of the economy is getting a make-or today on capitohill. the sete finance committee has taken up an historic rorm of the nation health care system. and before it was even out o the starting gat it was already being changed. senatomax baucus, the author of the bill s agreed to scale back the t on so-called gold- plated health insurance policies. but darren gersh reports, a key concern remains homuch the erage american will have to pay to buy covage. >> reporter:rom the very beginning, the hard work othe senate finance cmittee came down to balaing the cost of panding health care coverage with affordability strikinghat balance is the job of committee chairman ma baucus. >> no one should go bankrupt
cause they get sick. this bill would fix that. >> reporter: todaybaucus added $50 billion over t next decade to help low--moderate income americans buhealth insurance from theew exchanges the bill would createo organize the insurae market. the move w a clear nod in the directn of maine's olympia snow the only republican still on board with e effort. >> there remains a major outstanding ise to make sure that everyon whether in an exchan or an employer-provided an is able to afford a plan. >>eporter: the subsidies in the senate financeill would help filies who earn up to fo times the national poverty rate buy coverage. but health care anyst rick weissenstein says some lawkers think the he doesn't go far ough. >> i think the membe are ncerned that, for a family o ur making $68,000 in most places of the countr you're largely paycheck tpaycheck and the idea thayou might have however much insance for a family ofour might cost $700, $800, %900 a month, i think really questionable. >> reporter: for snowe'sellow
reblican, like arizona's jon kyle, the baucusill is unaffordle because it raises taxes, putti at risk those who now have private insurance. >> at leas85% maybe a little over 90% of americs have good care and insurance and don want washington to mess wi it. >> reporter: in anher nod to affordability, baucus slasd the proposed penalty on milies who don't buy alth insurance fr $3,800 to $1,900. many more changes e ahead. the committee pes to finish this pile of 5 amendments in thnext week or two. darren gersh, "nigly business repo", washington. >> paul: ather big debate is this one among federaleserve policymakers they beganheir two day meeting today and a oming question is whher they could lay the groundwork f a rate hike down the road. at would make it more exnsive for businesses and consumers to borrow moy. anher unknown is whether the fed ll adjust its purchases of mortga-backed securities, a
program helping to stabili the housing market. >> you the consumer arlikely to be high topic of discuss by fed policy makers, as the siaround their big board room table the cmittee is expected tdebate whether consumer spending is enough to fuel economirecovery. some experts think the central bank is boming sghtly more optimiic. we don't expect a large change i the statement. i think ey wil update their growth outlook to someextent, they'll continue to say they don't see inflation pressure and in fact they remain down side risks to inflation. >> reporte but others believe the recoverys so fragile that picy makers will be reluctant to sayuch of anything for fear of upsetting the ple cart. anotheburning question is whethethe fedshould continue its puhases of mortgage relat debt. the program is scheduled to expire at the end of the year, but economist brian fabry thinks the fedill extendt. if they stop buying
mortgage the housing market can collapse all over ain and very fast. so in m judgment what they'll likely do is extend their purchases of mortgages into the firscouple of monthsof next year, giving themselves a little bit of time to see how iminished purchase program will affect spreads between mortgages and treasuries. >> reporter:ut there is one thin nearly everyone agrees on, the fed is likely to keep interest ratesowor a very longime. after years o excess, americans arehanging their wa. payingown dealt, spending less and saving mo. economists say that shift in consumer behavior is creing a ne normal for intert tes. that meanshe federal funds rate is likely to remain near storicly low levels. >> when we talk out the fed noalizing rates, we ty're they're 1.5% by next yearnd if things continu to recover the pe innterest rates might only be 3%204%.
>> reporter: policy makers will announce the decision around2:15 eastern te morrow. the marks will not only pay attentioto the statement, but whether there are any dissenters. a signof disagreement. erika miller, "nightly siness report", new york. >> paul: wall stet moved higher ad confidence the fed meeting would pride more optimismbout the economy. stocks were also bolstered ba weaker dollar d stronger commody prices, sending the doup 60 points by noon with the nasdaq rising 12oints. stocks remained high as more buyers aear to be coming off the sidelines afraid of miing out on the ctinuing uptrend in stocks. stro demand for an auction of 2 year t-notes was ather positive, helpg the major avages close at their best levels of the year.
>> pau look for the $75 a barrel to be the new basele price for oil. that's what saudi arabia's o minister ali naimi tolmy co- anchor sus gharib today. susie sadown for an exclusive interview with naimi thi morning, in jedd. he sayhe's seeing signs of recovery from the recessio buhe doesn't see a change in production quotas beeen now and deceer's opec meeting. you can e susie's interview with naimi heron "nightly business report", on fday. >>uzanne: president barack obama says while t u.s. was slow trecognize the threat of climate change h
administration is cing to catch up at a united tions climate change smit in new york, the esident said the u.s. is making i largest ever vestment in renewable energy the idea is to dble america's gerating capacity from wind and other renewable ergy resourcein just three years. the president called on ri and developing nions to follow in our footsteps, butdmitted conqueng climate change won't be easy. >> all of us will face dbts and fficulties in our own capitals as we try to ach a lasting solution to the clime challenge. but diiculty is no excuse for complacency. >> suzannetomorrow, president obama meets with japan's n headf state for the first time. prime minister yio hatoyama takes the helm as japa strugglewith daunting problems including an aging socty, staggering public debt andhe global recsion.
from tokyo, lu craft looks at e challenges he faces. >> rorter: for half a century, japanese policians aligned themselves so intimately with big business, thcountry came to be knn as "japan, inc." but w, the world's second- largest economy is uer new management and prime ministerukio hatoma has put boardrooms on noti that consumers are now at the head of the line >> we're retning power to the people! >> reporter:n other words, le pork barrel projects d corporate tax eaks. more cash r families, like ildcare subsidieand free high schl tuition. >> it's basically a shift demand from the rporate sector, household sector. we do pect positive impact from private consumption. buimpact on g.d.p. is probably nothg in 2010, because public demand wildecline. >> repter: joblessness is at a record nearly 6%. stead of throwing money at
more roads andridges, the usual presiption for unemploynt, hatoyama is taking a page from president obama' environment-centric stimul plan. >> ( transled ): the auto industry used to be the pill of the japaneseconomy, but from now on, newndustries will he drive growth. similato president obama's proposal, weill have our own reen new deal.' >> repter: if hatoyama makes good on hiword, renewables will surgerom 2% of the energy pie, to 10%. >> ( translated ):reating new industries like solar wer, clean energy, hybrid and electric car environmental agrilture and nursing care - these will make it easiefor young people to find worin new industries this is part oour economic stimus plan. >> reporter: the poff for markets like photovoaics, say expert could be huge. >> ( translat ): if japan adopts 'feed-in tari' incentives, that wou
completelyransform the market for clean energy. it wou expand significantly. >> reporter: while theres grt anxiety, especially among e business community, about the inexperienced democrats' ability to gern, some observers say regime chae was >> they'reoing to make a lot of mistakes. it's going to very difficult. but whatever t ups and downs, 's very good for japan. >> reporter: japan has lonbeen written off as a countryn eclips its shrinking, graying popution presided over by a series of weakineffectual leers. japan's fate now depds largely on eves out of its hands, how well the chinese and u.s. economies bounce bac still, some analysts are cautiously bulli that the new government will ushein reforms that a long overdue. lucy craft, "nightly biness report", tyo.
and those are thstocks in the ne tonight, suzanne. >> suzanneon thursday night, nightly business report jos other pbs news and public affairs shows for a special,0- mite prime-time look at health care reform. it's called pbs speciareport: health ce reform." our partners in the specl and pbs stations froaround the nation gatred today in washington dc toalk about health care initiativein their communits. as we lead up to thursdas program "bill of hlth" looks one small business that had to take its health car plan back to the drang board. >> repter: kp studio architect one of many small building design fms around the country. the nine person stf develops the blueprints f commercial and government buildings i central flida.
here, thoroughbred hors roam thopen fields, and retirees roam the golf cours. for years,he partners at kp, ed plaster, and larry krtemeyer, provided a fully- paid 'go-plated' health plan for their employees. t as business slowed, and health plan costs se, they had to te a second look. we found we were paying hig premm and money was leaving our company thatould have been retainedfor hiring additional staff or paying foadditional operating expees. so we found that we d to more closely scrutize the healthcare coverage can offer and pride. >> rorter: things weren't always so complex. in the sond half of the 19th century, railroadsere the growth industrand an early prover of health benefits.
ny built hospitals for injur and sick workersand costs were dected from wages. paul fronsn of the employee benefit research ititute says oviding healthcare, then, as now, was a biness decision. >> theseenefits didn't look likehey did today. therwas no insurance at the time. but emplers were certainly interested in woer health for a businessase, to keep their workers healy and to keep them working. >> reporter: mtgomery ward, is ten credited as providing on of the earliesforms of group heth insurance coverage. the company pa half, the rest from wage deductions. then ce world war ii. with 16 llion men and women in military serce, domestic wartime industries comted for a limitepool of workers. with salars frozen by federal order, companies came up wh generous fringe befits,
including company-paid healthca, to attract workers. e war ended and as you can tell from thisestored operatinroom, medical science has long since moved on. but thtax break for medical benefits remains. and to this da the i.r.s. does not consider t value of company-paid healthcaras taxable inme and companies can deduct the val of employee healthcare aa business expens that's why healthcare befits are still a luntary perk of ployment. only two states:awaii and massacsetts, require coverage. ray stricknd, c.e.o. of florida basebenefit advisors says decisions about corpora althcare programs, were once routine. not anymore. >> in the past they may ve left thaup to the human resources or their c.f.o. most othe companies we deal with today, the presidenor the owners of the company e
acvely involved in finding out what are tir options to provide the best benef, at the most reasonable cost, for eir employees andependents. >> reporter: sickland helped his clients,he partners at k- p, come up with an alternati heal-reimbursement plan. most of the staff opted for at cheaper plan, spite higher out--pocket expenses. it saves money for the fm, and perhaps jo as well. >>he savings we incurred in making this ange in our healthcare amots to one salary sition. and for a ne person firm, one salary position offset wit health savings, a pretty good thg. >> reporte jeff yastine, "nhtly business report", ocala, florida. >> paul: torrow, how some mpanies are halting rising healthnsurance costs one step at a timas we continue our series "bill of health. >> suzanne: general tors is adding newhifts at three plants as it ppares to close otrs.
the automakesaid today that 2,400 works will return to the assembly les, as it boosts production of the buiclacrosse and chevmalibu. the new shifts will start ne year at plts in michigan, nsas and indiana. but beginning in november s.v. production at plant in tennessewill be put on hold. >> paul: ford mor, meantime is trying to catch up to geral motors wheit comes to sales in china. ford is expectedo break ground this week on its third chise plant there. that facilitwill build high- d sedans and s.u.v.'s. currently, goutsells ford 3- -1 in china. separately, ford saitoday it's tting an 886 million dollar loan from e energy department. the moy will be used to develop more fuel-efficient vehicles.
>> suzanne: he's a look at what happening tomorrow. with all the talk about heal care reform tonit's commentator ks what happens if nothing happens? he's steven georgellmann director ohealth sector magement and policy at the university of miami. >> let's contemplate for a moment. what happensf health care reform, whater that reform wod or could have been, fails? whatould actually happen? first off, the nber of unsured will likely grow from our current 47 milli to 67 million by the yr 2018,
putting emendous strain on priders of health care. health care expenditures a growing at a ratof nearly 7% annuly. as such, health re will make upne of every five dollars of economic activity eight years. we will spend over $1200 for every man, woman, d child in the u.s. and, in me cities, $25,000 per person per year. it will take a smarter perso th me to figure out how this country can be competive in a global econo with health care expenditures at these levels we he heard warnings that current rerm proposals involve heth care rationing. but in the absencef health care refm, rationing will, by definition, come about, t as a result of y quote death pals, though that has never been a part any of the current health carreform proposs. raer, rationing will occur as a result of the inility of many firms to affordealth insurance for their employee and the inabily of individuals to affd health care, or the insunce they need to offset those costs. if meaniful health care reform fails, as it did 16 yearago, i fear we will be sitting withur children, woering why more was not done back in 29 to prevent
the collapse of our health ce system, the resultg decline in our nations financial health and, most importantly, the signifant toll on our pulations physical and emotional health. i am steve ullmann. >> suzne: and finally tonight, did you know today wasann day? don't woy if you didn't. storically, it's not a day f celebrating. the late technicalnalyst w.d. gann said that on septemr 22 markets are more likely drop than anyther day of the year. analyst paul macramontgomery says whi the market crashed in october 1987, s downward slide actuallyegan on september 22 of that year. montgomery says the autual equinox coulbe to blame. no word on why stocks gained today. but les not complain paul. a year ago, the dow ll 372 points. goest paul that's why i learned where autumn canlso be called the fall. >> i w wait followg see what you were going to say.
that's "ghtly business report" for tuesday, september 2 i'm suzanne prat goodnight, everyone. and good nht to you, paul. paul: goodnight, suzanne. i'm paul kangas wishg all of you theest of good buys "nhtly business report" is made possible by: this pgram was made possible this program was me possible byontributions to your pbs station from viewers le you. thank u. ptioning sponsored by wpbt caioned by mediaccess group at wgbh access.wgbh.org