>> warner: spencer michels looks at how the nation's most populous state is moving ahead on the new federal health care law. >> california is pushing hard to implement health care reform. but at this busy hospital in fresno, the administrator is worried that it could cost the facility money. >> ifill: judy woodruff begins a series of interviews with lawmakers facing involuntary retirement. up first: defeated virgina democrat tom perriello on how the next congress should break through partisan gridlock. >> i think that what you need is people who are interested in getting in this to solve problems and not to survive the next electoral wave. >> warner: and we continue our encores of paul solman's reports on the foreclosure crisis. tonight: what happens when a government program to help homeowners misses the mark. >> ifill: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> well, the best companies are driven by new ideas. >> our history depends on new ideas. we spend billions on advanced technologies. >> it's all about investing in the future. >> we can find new energy-- more cleaner, safer and smarter. >> collaborating with the best in the field. >> chevron works with the smartest people at leading universities and tech companies. >> and yet, it's really basic. >> it's paying off everyday. >> this was me-- best ribs in nelson county. but i wasn't winning any ribbons managing my diabetes. it was so complicated. there was a lot of information out there, but it was frustrating trying to get the answers i needed. then, my company partnered with united healthcare. they provided on-site screenings, healthy cooking tips. that's a recipe i'm keeping. >> turning complex data into easy tools. we're 78,000 people looking out for 70 million americans. that's health in numbers. united healthcare. >> and by bnsf railway. and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. 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. over the northeast today as >> ifill: jets took to the skies over the northeast today as major airports got up and running again. but the snowstorm's ripple effect still left many thousands of weary would-be travelers wondering whether they will ever take off. a snow plow labored today outside newark liberty international airport in new jersey while, inside the terminal, stranded travelers waited and waited. two days after the christmas weekend blizzard, all three of new york city's regional airports had resumed limited operations. a few "on-time" departures even appeared on flight boards. >> i think they've added a lot of flights to the airline to accommodate for yesterday's misses. that's what we've heard. hopefully. ( laughs ) >> ifill: but, thanks to the logistics of getting passengers up in the air, thousands on the east coast and well beyond were still trying to complete their holiday travel today. >> i phoned the airport, and i was told to come here from my hotel in new york, which i did. and then i'm told the flight has been cancelled. >> ifill: the newark liberty terminal and others doubled as open-air hotels, with people trying to grab sleep as they waited. airlines were already booked solid for the holidays. that made it harder to rebook when flights were cancelled. >> we are supposed to go on tonight. we were supposed to go on yesterday's flight, but all the passengers from the day before went on that flight and we were bumped out, and we have to wait for this flight to go. >> ifill: with 7,000 flights were wiped off schedules over two days, airlines also struggled to get their planes where their passengers were. the ripple effects were felt nationwide, from cleveland... >> i came from milwaukee to cleveland, and my flight got cancelled after i came here so now i'm waiting on a flight to providence, rhode island. >> ifill: ...to atlanta, the major hub for delta, which cancelled more than 850 flights due to the storm... >> domino effect, tick, tick tick. >> i had a flight to laguardia two days ago, then i had another flight yesterday, and then a flight this morning to white plains that got cancelled. >> ifill: ...and as far west as southern california. at los angeles international airport, the line at the continental counter went hundreds of people deep. >> there's an eight- to ten-hour wait to get to an agent. the ticketing agent then tells you can't fly out till january 1st or 2nd. >> ifill: adding to the frustration, some airline web sites went down even as phone systems were overrun with callers. >> thank you for calling continental airlines. we're unable to take your call right now. >> ifill: the troubles at airports spilled over to ground travel, especially in new york city, where cars and buses were buried. >> in the past, we've had help from airports with equipment. but not this time. the airports are still digging out. when the airports finish digging out, we would expect that some of the equipment that's being used there will be made available to us to work on the streets. >> ifill: but that could be a while, both for the plow crews slogging away at the airports and the tired crowds hoping for relief and a way home. so how is it that a two-day-old east coast blizzard is still managing to tangle air travel tonight? ben mutzabaugh covers the aviation industry for "u.s.a. today" and writes a blog called "today in the sky." so it seems to me the only question i can ask you is what gives. >> this is a big mess for anyone traveling. that's obvious from what you've seen. a very complex aviation system in the united states. throughout the world actually. but when you get a snowstorm like this, it really can, like the woman said, it can really start the domino effect. that's exactly what we've seen happen with this storm. we operate with hubs in the united states so the airlines generally tend to operate with a bank of flights coming in. they sit on the ground for about an hour. then bank of flights goes back out. that allows passengers to exchange from one plane to the next. that works well most of the time. when you get a storm like this weekend, remember it's an historic storm. so that the airlines are on the hook but they're really dealing with a lot of snow. >> ifill: is it too much to expect that there would be a back-up plan for an eventuality like this. >> for the travelers who are stuck, unfortunately, what we did see was the back-up plan. they knew it was coming. holy cow this forecast is accurate. we are actually going to get two or three feet of snow in some places. what they had to do is decide do we want to risk having our passengers stuck at the airport, hoping we can operate but then find out we can't or at least let them know ahead, a day ahead of time, stay at home, wait until storm passes and we'll go from there. >> ifill: if you were u.s. airways and you had a plane in phoenix that was supposed to be flying for the next day's flight out of newark you just stayed in phoenix. >> some of those planes may have been in buffalo or portland. there were places where it's not easy for them to get back into the network. the flight attendants and the pilots on that flight. they missed their first flight and maybe the flight to houston or phoenix. when the next morning's flights are going to start, you know, those flight attendants or pilots may have found a way back or maybe not. one flight an airline can manage that. delta with 850 cancellations. manage that playing out 850 times, 850 sets of crews that are one city off. >> ifill: not just equipment but crews as well. >> very, very complicated for them. it really reverberates very quickly through the system. >> i remember there was a big debate in washington about tarmac delays, the stories about being people being trapped on the tarmac on planes unable to return to the terminal. there was a new rule put in place that was supposed to end that. did that have some effect? the airlines trying not to create tarmac dlases didn't let people get on the planes at all. >> the jury is still out on how big a role that did play in this. i think even in past snowstorms some airlines would try to operate through until they couldn't. others did similar to this storm. they canceled proactively. we've seen both reactions. it is safe to say, however, that this three-hour tarmac delay may... these are hefty fines. the tarmac delay rule essentially fines an airline if passenger is stuck on the plane for more than 3 hours. it can be up to a million dollars per plane if the airline does this. this is something they don't want to fool around with. >> ifill: are are passengers repaid for this inconvenience in general? >> good news, a sliver of good news. yes, they are options here. almost every airline operating to the east coast has issued a weather waiver that allows customers some options. they can make a change for free without facing a penalty or a fare increase. they can get the value of their ticket and apply it towards another flight within a year or by federal law any flight that is canceled a customer can request a refund for their flight. there are some options. of course if you needed to be in forth lauder dale to catch your crews or you had to be with friends in l.a. for new year's, that won't do you much good at all. >> ifill: three airlines announced fare increases. they picked an incredibly interesting day to do that. was that scheduled or just incredibly poor p.r.timing? >> airlines tinker with their fares all the time. it's been no secret for the past year that they've been doing everything they can to put fares up. but whether it's legitimate or not, whether we agree with their need to do it or not, boy, it just really isn't good for anyone stuck at hotel laguardia. >> ifill: you'd hate to be looking at your pda and sitting on the floor at the terminal realizing you have to pay more. >> this will cost $25 more next time i do it. >> ifill: ben mutzabaugh, thank you so much. >> my pleasure. >> warner: still to come on the newshour: an iraqi future without u.s. troops; health care reform in california; outgoing congressman tom perriello; and modifying mortgages for underwater homeowners. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> reporter: thousands of russians were stranded again today at two major airports in moscow. they chanted and clapped in protest of the conditions after being stuck since an ice storm knocked out power on sunday. many blamed russia's flagship airline, aeroflot, for the chaos. >> we've been waiting here since early morning and not a single plane has left. they are always postponed. they are cheating us. there is no information in the book office and not at the information desk. on tv they say that our airline flies. it is a sheer lie. >> reporter: there were also reports that some people charged ticket counters and beat up aeroflot workers. russian president dmitry medvedev has now ordered an investigation into the airport delays. in india, the government declared a nationwide terror alert amid threats of a new year's eve attack. officials ordered more police patrols and ramped up security in the financial capital of mumbai. the city of ahmedabad was also affected, along with the resort area of goa. the home ministry said the threats are coming from the same pakistani-based group behind the 2008 attacks in mumbai. the nato death toll in afghanistan reached 700 today when two more soldiers were killed in the south. that's up nearly 200 from 2009, and it makes this the war's deadliest year. meanwhile, intelligence officials in pakistan reported u.s. drones fired missiles that killed 17 people near the afghan border. there have been well over 115 missile strikes this year, more than double last year's total. in economic news, consumer confidence slipped in december even though holiday spending surged. the business research group conference board said americans are still worried about jobs. that news kept wall street mostly in check today. the dow jones industrial average gained 20 points to close at 11,575, but the nasdaq slipped four points to close below 2,663. those are some of the day's major stories. now, back to margaret. >> warner: the iraq story is next, with a new vow from that country's leader that all american troops will be gone in a year. throughout the past year, the american military force in iraq has been shrinking. a year ago, there were 110,000 u.s. troops in country. by august, it was down to 50,000, and all u.s. combat missions were ended. now comes the last deadline. by the end of 2011, all american forces are supposed to be withdrawn. in recent months, u.s. and iraqi officials have said privately they expected iraqi prime minister nouri al-maliki to seek an extension of the deadline. it's part of a schedule laid out under the 2008 "status of forces" agreement, or "sofa," with the bush administration. but in an interview published today in the "wall street journal," maliki appeared to nix that expectation. "the last american soldier will leave iraq," he said. "the agreement is not subject to extension, not subject to alteration. it is sealed." it was maliki's first interview since finally announcing a new governing coalition last week, nine months after the national elections. tellingly, his new government now includes supporters of the anti-american shiite cleric moqtada al-sadr. sadr has long called for all u.s. troops to leave. at a meeting of his new cabinet ministers last week, maliki said the new government has much work to do. >> ( translated ): difficult tasks require exceptional effort. the previous phase was difficult, a phase of big challenges. but we are still in need of an exceptional effort to develop all the sectors that need to be developed. >> warner: one of those sectors is iraq's newly rebuilt military and police, which the u.s. is helping equip and train. under the 2008 agreement, some u.s. personnel would remain at the huge american embassy in baghdad to oversee those efforts. and for more on prime minister's maliki's comments and where things stand in iraq at year's end, we turn to two people who've followed events there closely: joost hiltermann is deputy program director for the middle east and north africa at the international crisis group; and michael gordon is a military correspondent for the "new york times." he's working on his third book on the iraq con flikt. welcome to you both. joost hiltermann beginning with you. how do you read this maliki interview? does this mean that u.s. forces will be a year from now? >> prime minister maliki has made clear that current agreements between iraq and the united states need to be implemented. by those agreements, american troops need to be out by the end of 2011. however, he has left himself an escape clause by saying unless this government, this parliament decides to have a follow-on agreement he's left that open but for a prime minister who would want the american troops to stay he certainly is not giving any indication that he does. >> warner: how do you read it, michael? >> similarly, but i think iraq is clearly going to need some american military assistance after next year. it's going to involve training because they're fielding m-1 tanks. they want f-16s. it's going to involve control of their air space. it's going to involve intelligence sharing. there are a whole host of needs that the iraq has from a security standpoint so i suspect these tasks will be taken up in a subsequent agreement, a framework agreement of some kind. there won't be tens of thousands of combat troops in iraq in the future, but i would expect there would more likely than not there will be some sort of military presence. >> warner: are you both saying you think that this was kind of posturing for political effect? or was this driven by the fact that now he's got sadr in his coalition and he really has to sound hard nosed about getting the americans how. >> i think maliki has been fairly consistent in saying that current agreements have to be implemented and then we'll see what happens later. but there's no doubt that maliki's government came about thanks to or due to iranian pressure which brought the sadrists into his government. without that he could not have formed a government. so that means he is somewhat beholden to them. it means at least if he wants to get an agreement through parliament they could block it. i think this is a particularly sensitive agreement that they would want to block. so i think he's laying the ground work for the argument that maybe iraq will not need u.s. troops on the ground beyond 2011. >> warner: did i read today that he said that if anything such as the follow-on agreement happened-- and i don't know that he used that phrase-- that it would have to be approved by the parliament? >> well, there's already... there are really two agreements. the so-called sofa which was signed by president bush after all which requires that all american troops leave at the end of next year. and then there's a sort of framework agreement which is supposed to spell out ways in which we can cooperate with iraq. but maliki said in that same interview that the framework agreement will involve some kind of security cooperation which maybe he implied involve training. >> warner: michael, i'll start with you because you really follow the military here. particularly closely. how equipped are these iraqi security forces to protect the country? >> well.... >> warner: what do they still need the u.s. to do? what can't they do for themselvess? >> if you left this issue up to the security officials in iraq and the security officials in the united states, there would be an ongoing military support relationship which would involve training, intelligence sharing, we'll be selling military equipment which might even involve some select deployments of special operation forces to go against terrorist threats. you know, the previous minister of defense in iraq talked about requiring american military help to 2016. and beyond. because what iraq can do now with contend with militias. it can't provide for its external defense. he has no air force. it wants to have an air force with american aircraft. when you put that into the equation i think it suggests that, well, i think iraq will want to have a credible military. it's going to almost certainly turn the united states. >> warner: how with that jibe with the political pressures on maliki at home? i mean all of us who have been to iraq know that iraqis at least many iraqis are now taking pride in the fact that their own military is at least visibly the ones in charge. >> you know, we have an agreement in place now that runs out at the end of 2011. there can be a follow-on agreement. if maliki decides not to go that way he will have to work out a military partnership with the united states that does not involve a number of ground troops. then he made need to use civilian contractors or work through the embassy office for security cooperation. but he's not going to have american troops on the ground. that means he will have to postpone certain issues like logistic support while for other issues like satellite... sorry, intelligence support he will have to rely on the american system without having troops on the ground. >> warner: meanwhile he has this new government finally. how stable is it? how equipped is it to deal with the challenges that still haven't been solved there. >> that's two different issues. it is fairly stable because it is broadly inclusive. this is the great advantage of this government but because it is so inclusive and everybody is at the table it will be very difficult to reach decisions especially on major issues so this government was necessary in this form in order to prevent a recurrence of civil war. at the same time, it's not going to be the best governing government. that is going to have consequences as well. i think what we're going to see is an iraq that will muddle through the current period but i don't expect any major violence. no serious internal threats or external threats. in that sense the relationship with the united states is less critical in terms of american ground troops than it has been. >> warner: a muddle-free scenario. is that what you see, michael? >> i agree with that. i think it's a unity government. everybody is in the tent. the big problem is can it govern? i do see another danger though. the iraqi public is broadly dissatisfied with their government. >> warner: hugely. >> they're not doing what governments are supposed to do. they're not more likely to do that because they brought in such a desperate group of politicians, many of whom profoundly dislike each other. >> warner: forgetting whether they're competent at it or not that's one of the problems? >> i think we have to really pay attention to who gets what ministry because in the past the sads were given the health ministry, the transportation ministry, and they used them as platforms to carry out political and really kind of militia activities so we can't just look at the prime minister and the top slots who will be the next minister of defense, the minister of interior. we also have to look at who gets what particular ministry and who these individuals are. >> warner: quick final prediction. do you both predict by this time next year, things will seem stable enough and peaceful enough that most if not all u.s. forces will a able to leave. >> my sense is yes. now we feel we enforce them and we believe things are stabilizing. politics will be unhappy but things will move in the right direction. >> warner: michael? >> if i to predict i would say this sofa will be implemented. the american combat troops will leave. there will be another agreement with a different name that sounds like it's a support agreement. we might have a country like egypt or some other arab nation. but it will be elastic. there will be all sorts of ways to continue to help the iraqis: training exercises, contractors, office defense cooperation. there will be a mechanism to keep some number of american military advisors in iraq. >> warner: all right. michael gordon and joost hiltermann, thank you both. >> ifill: now, how health care reform is playing out in the states. last night, we looked at how the newly-elected republican governor and legislators in wisconsin are working to turn back the new federal law. tonight, the other side of that coin: newshour correspondent spencer michels reports on california's efforts to move ahead. >> reporter: in california, where one out of every four families has no health insurance and the economy is in terrible shape, political leaders here have made implementing the federal health care reform a major priority. california's democratically controlled legislature and its outgoing republican governor have joined forces to push ahead quickly on the state level. kim belche, secretary of health and human services for governor arnold schwarzenegger, has been in charge of making the new law work. >> when it comes to health reform implementation, some states have hit the pause button. some states are actually taking a step back and reconsidering. under governor schwarzenegger's leadership, we really have been leading forward and moving forward. >> reporter: and it's a direction that incoming democratic governor jerry brown has vowed to continue. for the bay area family of two- year-old violet mcmanus, some federal healthcare reforms are already making a major difference. >> where's your nose? where's your ear? >> reporter: violet was born with a genetic disease called epilepsy with mental retardation, and she suffers frequent seizures. caring for her is expensive. before the new law, her health insurance policy had a $6 million lifetime cap. >> which we thought was this huge amount of money. and then we realized... we started getting bills, and it's like $250,000, you know, $100,000. it just seemed crazy. by the time she's four or five, she's going to hit her lifetime limit. >> reporter: as of september, the health care reform law did away with those limits, and violet's bills will be paid as long as she remains on her family's policy. >> she's not going to die because we can't afford the medicine. so it's huge. it means her life. >> reporter: another provision of the federal law which is already in effect bars insurance companies from denying children coverage because of pre-existing conditions. california takes that idea a step further, says anthony wright, a consumer advocate. >> when the federal law said you have to take children with preexisting conditions and some insurers decided, "well, then, we're not going to cover children, period," you know, california came up and said, "well, if you don't cover children, then you're not going to be allowed to sell insurance, period, for over five years," and that... that's going to bring insurers back into the market. >> reporter: and for adults with pre-existing conditions, california is getting the jump on the federal law by providing access to coverage four years before the national law kicks in. moving ahead of most other states, california is already setting up a health benefit exchange where consumers and small businesses can shop for affordable health insurance among competing insurance companies starting in 2014. >> in california, we are the first state in the nation that has established a law for a health benefit exchange under the new federal rules. >> reporter: although enactment of the law was bipartisan, some critics of reform, like john graham at the conservative think tank pacific research institute, worry the exchange will be politicized and will actually limit consumer choice. >> what it does is, it allows the legislature to appoint five political appointees onto a board that will decide what health plan you can get. and that really dramatically reduces choice. >> reporter: but people applying for government-paid health care may be most affected by california's efforts to implement reform. >> in order for you to be eligible, these are some of the requirements. >> reporter: a major expansion of medicaid, which provides health care for low income citizens, is the key to decreasing the ranks of the uninsured. the state recently received $10 billion from the federal government in the form of a waiver to begin that expansion, which is expected to add three million to four million people to the state's medicaid rolls by 2014. in areas like california's central valley, where agriculture is the dominant industry and unemployment hovers around 15%, medicaid expansion could have a huge impact. it could mean an increased load for community health centers like clinica sierra vista in fresno, which treat medicaid and uninsured patients, many of whom private doctors reject. stephen schilling, its director, sees the changes as a mixed blessing. >> i'm certainly concerned about our ability to meet an increased demand. we're already pretty well slammed with patients all the time, but i'm very excited about healthcare reform. >> reporter: one reason he's excited is that federally funded health centers like clinica sierra vista will receive additional money under the new law to expand his medical resident program and to attract more doctors to work in the central valley. >> clearly, there's going to be a rearranging of where money flows. that will allow me to bring more clinicians into this facility or build more of these facilities, or pay these people better so that we can encourage young people to enter into primary care. >> reporter: but dr. juan carlos rubalcaba says the clinic takes care of basic problems. >> when we get into problems is when we need to refer out people to specialists, do further exams, mris, cat-scans. that's when the trouble comes. >> reporter: the trouble is, many of those providers won't work for what medicaid-- or medi-cal, as it's called in california-- pays. and that includes linda halderman, a doctor from fresno. >> my practice was caring for women with breast cancer. i'm a surgeon, and that practice in the central valley was not sustainable. and the reason it wasn't sustainable is because medi-cal, which covered almost 90% of my patients, does not actually cover as... pay as much as the cost of caring for them. so it would have been cheaper to close my doors, and eventually that's what happened. >> reporter: halderman, a republican, left her medical practice for politics. she was recently elected to the state assembly. she's convinced that health reform's promise to increase payments to providers under medi-cal will never take place. >> california will either be forced to cut services or it will do what traditionally it has done, which is to further cut the reimbursement rates to hospitals and to doctors who accept medi-cal. >> reporter: the new health care reform law is not popular with the people who run fresno's largest community medical center. under the new law, they will lose special funding they now receive from the federal government for treating such a large indigent population. this is one of the busiest trauma centers in the state and serves a population in a huge swath in the center of california. most of its patients are poor. without insurance, they use the emergency room as their primary care provider. emilio inocensio, an out-of-work machinist who hurt his leg playing an interactive video game, couldn't get medicaid. >> can't get it because i'm over 21 with no children. >> reporter: by 2014, he probably will be eligible. but in the meantime, he showed up here at what's called a "safety net hospital," which receives special payments from the federal government for treating uninsured patients. but, under the healthcare reform law, such payments will be phased out. the idea is that hospitals will make up the difference since more patients will be insured. but administrators complain that such cuts could put them out of business. they have made their concerns known to fresno's congressman, democrat jim costa, who is trying to help. costa just survived a tough reelection race where his vote for healthcare reform cost him some support. so today, he is walking a fine line, defending parts of it while promising changes. >> there are a lot of elements of this law that are going to be implemented over the next two, four and six years. and there will be changes with the republican congress, and there will be changes with... as we try to see what's working and what's not working. >> reporter: consumer advocate anthony wright argues that california has to make reform work, especially now. >> we have a budget crisis that is... is potentially forcing additional cuts to our healthcare system and our safety net. >> reporter: while debate and analysis of the law continues, california officials say to comply with its requirements by 2014 in a state this big, they have to move now. >> warner: this week, as the year comes to a close, we begin a series of interviews with congressional democrats defeated at the polls in november. first up, tom perriello of virginia. he was swept into office in the obama wave of 2008, only to be swept out in the republican wave of 2010. judy woodruff recently spoke with the departing congressman on capitol hill. congressman tom perriello, thank you for talking with us. >> thank you for inviting me. >> woodruff: you werey legislatured to congress two years ago but with the narrowest margin in the country. different this time. what happened? >> well, we actually also lost this year by one of the narrowest margins. we outperformed expectations by about 14 points over the national average this year. i think what worked both times in some ways was conviction. i think people appreciate knowing your sense of right and wrong, knowing where you stand. i think two years ago was a time when people were really hoping for great things. i think there's a lot of concern right now but we walk away with our heads held high, very proud of what we did and with a lot of respect even from those who disagreed with us in the district. i don't think that's a bad model for politics. >> woodruff: do you think that the voters in your district changed their minds from 2008? or do you think different voters turned out in 2010? >> i think it was a little bit of both. we actually did have a lot of the 2008 voters show up in our case which is why we stayed closer than in many races. you saw a surge of people who were very concerned particularly about the president and some of the democratic leaders so i think people had hoped perhaps for too much to be accomplished with us coming into power. and, you know, people said, hey, wait a second. maybe we want a little more checks and balances and a little more bipartisanship but i think at the end of the day jobs trumps everything else. i think what people want right now is a job if they don't have one and job security if they do have one. they're still concerned. >> woodruff: is there something the president, democrats, you could have done differently to change this outcome do you think? >> sure. i think there are many things that you could do differently but i think we made a serious attempt. we walked into the worst economic crisis sin the depression. we did something before the president was even sworn in. maybe the only example in legislative history of preventing an economic depression. i believe there was a chance to do something bolder, to really reinvent america's competitive advantage with a ten-year vision of how we're going to outcompete the world. we didn't do that. we actually went partly because of the need to get republican support at the time with a much tamer stimulus frankly that did prevent a depression and has led to 11 straight months of private sector job growth which is somewhat of an economic miracle. so i do think that there's a lot to be proud of in there. what people want is to make sure we're moving forward. >> woodruff: the president flipped virginia in 2008 from republican to democrat. is it... is virginia out of his... you not only lost. there were two other democrats who lost their seats this year. is virginia out of president obama's reach in 2012? >> certainly not. he was actually ahead in the poll that was run the other day. i think voters haven't made up their minds. i think they're concerned with what the democrats did. they're concerned with what the republicans did. evidence shows they're even concerned about what the republicans are continuing to do. as marco rubio in florida noted this was not a mandate for the republicans. they shouldn't overread it in the same way that democrats shouldn't. what i think people hoped for was an era of post partisanship. and i think what they're getting is at best bipartisan there's a difference. this tax deal unfortunately is an example of bipartisanship. let's take the goodies from one side and add them to the goodies for the other side to get something through. post partisanship says what solves the problem? i think we need to have a serious conversation about what that problem is. what i see in a district like mine is that we've been getting outcompeted by the world. too many jobs have disappeared or gone overseas. we need the kind of jobs that someone coming out of community college or trade school can support their family with. >> woodruff: that sounds like a good plan, congressman, but going forward given the hyper partisanship in this city, is that realistic? >> i think it isn't. i'll be honest. i don't come out of a party background. i didn't come out of a partisan background. i was really shocked by the way the republicans acted going back to january of '09. when your country is on the verge of a crisis, when a very popular new president comes in and meets only with the republicans, the joke in january and february when i first came in was the only way to get a meeting with the president was to become a republican. here you were a country in crisis, a new mandate, a rejection of really conservative ideas that had gotten us into this and the response from republicans was, hey, if this works you're going to get the credit. if it doesn't work, we don't want any part of it. that's not statesmanship. that's not engaging with the problems of our country. unfortunately you saw that in this campaign as well an attempt for the republicans to take as few positions as possible get no specifics on the table talk about cutting spending and come in and cut a deal to boil a major hole in the deficit. we need to do better on both sides. >> woodruff: i've seen a poll just in the last few days that said a large percentage of democratic voters are saying they don't want democrats to compromise with the other party. and an even larger percentage of republicans voters say they don't want republicans in congress to cooperate, to compromise. >> well, you know, i think when you look at things like redistricting and the funding of campaigns, we have real structural problems in our democracy right now that does push in that direction. we did make the effort in the last couple of years. there's been a lot of talk about whether the administration wenttoo far to the left. you had a stimulus plan that was supported by the chamber of commerce and ronald reagan's and bush's economists. you had an approach to energy developed by the first president bush and supported by john mccain and a health care proposal that was supported by mitt romney and bob dole's plan back in the day. this was an attempt to actually get beyond the old partisan divisions of either not caring or thinking government was the solution. here were market-based solutions. as we continue to put some of those next generation ideas on the table, hopefully people will reach a point where they say this is the kind of substance that's going to get us there in ten years instead of thinking about the next ten minutes. >> woodruff: it sounds like in the short run you're not optimistic. >> i think it helps to have politicians who don't mind losing an election. history judges on a different time line than the news cycle with all due respect. what you need are people who are interested in getting into this to solve problems and not to survive the next electoral wave. i am not optimistic about this the next two years in terms of the sides working together. i certainly hope people will do soul searching and find that. i hope the president will continue to lead and have a long-term vision. i think we'll see some of these ideas come from the outside. >> woodruff: i've read that the president is talking to you about a position inside the administration. have there been conversations and are you interested? >> you know, i'm interested in serving. there are a lot of ways to serve. i came out of the nonprofit sector where you learned to create big things with very few resources. i've always been interested in the issue of reducing human suffering and increasing human flourishing. done that in africa and afghanistan and here and other places. it's just an amazing thing. this was the first time on the public sector side. i think this administration is incredibly important. i think the next two years are incredibly important. china and india aren't waiting for us to get our act together on energy policy or competitiveness. they are more than happy to move ahead while we continue to fight with each other. if i can be part of that whether it's in the administration, in the private sector, in the nonprofit sector, the question for me is what is going to move us forward? where i see opportunities to do that, i'll jump. but there have been no specific conversations. >> woodruff: congressman tom perriello, thanks so much for talking with. >> thanks for having me. >> warner: judy next talks with departing south dakota democrat stephanie herseth sandlin. when congress convenes next month, we'll talk with members of the new republican majority. >> ifill: and we return to one of the year's biggest economic stories: the national mortgage foreclosure crisis. all this week, we're taking a second look at a series of stories filed this year by newshour economics correspondent paul solman. tonight's encore: why is a government program that's supposed to get struggling homeowners into affordable mortgages not doing a better job? it's all been part of paul's regular reporting on "making sense of financial news." >> reporter: how to fix the foreclosure crisis? the key answer was supposed to be president obama's $75 billion home affordable modification program, hamp, announced early last year. >> and this will enable as many as three million to four million homeowners to modify the terms of their mortgages to avoid foreclosure. >> reporter: under hamp, mortgage principal usually stays the same, but the interest rate can be dropped to as low as 2%. the terms extended to as much as 40 years. the catch: if your payment still exceeds 31% of your income, you are denied. so far, barely half a million americans have received permanent loan modifications out of several millions the program was supposed to help, and the approval rate is now shrinking. no surprise if you listen to the folks we interviewed, and we had plenty more to choose from. >> it's a nightmare, just trying to get a simple answer from these people. >> you call them at breakfast, and by the time you reach somebody it's time for your midnight snack. >> i can easily understand how people just go bonkers. >> i wish you all the best. >> reporter: hamp aims to prod banks that service mortgages by offering them $1,000 per loan modification. it may not be enough. >> we're at this now 16 months, and our eligibility has not even been determined. >> reporter: sara and lee braun applied to their service chase for a half modification when sarah was laid off, lee's hours cut back. >> the first person who was assigned to our case would not return our phone calls. and since that time, we have had nine different representatives. you try to contact them, you don't hear back from them. you call the general number, you find out you have been reassigned to somebody else. >> reporter: from the get-go, the brauns documented their efforts, some would say compulsively. >> there's been countless numbers of times-- he has them documented-- where we've been told "you're denied because you have not provided the documents requested" when, in fact, we have never received a request. >> reporter: meanwhile, the brauns now make the mortgage with the help of family. >> you think are you getting help. >> reporter: lorraine had nothing to fall back on when she lost one of her two jobs last year. in january, bank of america said she qualified for the standard three-month trial hamp modification. four months later, she called about the permanent mod. >> they said it's still under review. keep sending those payments. so i did. june 27nd, i got a letter from bank of america stating that i couldn't qualify under the making homes affordable. and come july of this year, i hadn't heard anything still as to what my options might be. and i called again. and she said, "well, it's still under review." and i said, "well, i just got a letter from your law firm stating that you are going to auction off my house august 27th. so how can it be under review?" >> reporter: she was able to get the auction stayed until november 26th. but now owes even more in arrearages and fees. >> so i'm roughly i would say approximately about $23,000 behind. >> reporter: turns out she even pays for ads the bank puts in the paper announcing she's in default. >> this is the ad that they charged $700 an ad. >> reporter: "notice of mortgage sale of real estate, $700. bank of america, law offices, you pay for. >> it ends up getting tacked on to what i end up owing the bank. >> reporter: her sister mary helped their brother james apply for a hamp modification through wells fargo after he lost his job. the loan was even backed by the v.a. >> i worked with my brother consistently probably two, three times a week he was at my house. he was sending things certified, faxed. every single week a letter went to wells fargo and to the veterans loan servicing administration. >> reporter: but foreclosure came before modification. >> they began eviction proceedings on him, and he had a move-out date of april 15th. and he passed away. he had a heart attack at the end of february, and after that happened, his widow couldn't get out of bed for about three or four weeks after that. and she was under court order to get out of the house by april 15th. and i said, "look, you can give her another month or two. what's the difference?" they said no. i couldn't believe it. i was floored. >> you are put under a lot of stress when are you trying to... i'm getting emotional. when i think of my brother. you get put under a lot of stress, trying to get help. and it's not there. >> the house is now empty. it's up for sale for about $60,000 less than what he owed on it. they have had a couple of auctions, and they have had no luck. in selling it. and he was willing to work with him and stay there, and right now right off the top they are taking a $60,000 hit. >> reporter: attorney kevin costello represents homeowners in cases against j.p. morgan chase, wells fargo and bank of america, arguing that when servicers drag out the hamp trial process then reject the homeowner, they're breaking a contract. >> i think it's clear that servicers have not invested the time, the energy and the resources in creating an infrastructure within their shops to adequately discharge their duties under the program. it may be that the financial incentive isn't enough. there are all sorts of fees that mortgage servicers are collecting while the limbo for the homeowner drags on and on. >> reporter: according to a recent report by the national consumer law center, servicer fees based on a percentage of outstanding balance provide incentives to increase the loan principal by adding delinquent amounts and junk fees. don madden says he was surprised to see his loan grow after he was rejected from hamp by bank of america. after a six month trial that cut his payments from $1400 to $656. >> now on the mortgage statement that i received it's telling me that i have six months delinquent mortgage. >> reporter: you are six months delinquent. >> delinquent mortgage. >> reporter: because of the six months in which you paid the $656. >> correct. what they are looking for is the difference between the $656 and the $1400. >> reporter: you had no idea you could be charged retroactively? >> no. it was never stated in any of their paperwork. >> reporter: the main problem, according to attorney costello, servicers haven't been pressured to make permanent modifications. >> what stick is the federal government bringing to bear against servicers who are failing to comply? the data is there that folks are not getting permanent modification was appear to be entitled to them. what is treasury doing to enforce the rules of hamp against servicers? >> we don't, under the law, have the authority to require servicers to be part of the program. and we cannot fine the servicers for not complying. >> reporter: until his recent retirement, herb allison oversaw treasury's tarp program which funds hamp. >> these are voluntary programs. we have to strike a fine balance between getting very tough with them and making sure that they are active and involved in our program. >> reporter: we asked for interviews with the three banks involved in the cases we've reported. bank of america was the only one to grant us interviews on camera. >> it never gets easy. >> reporter: joseph brown came to bank of america last year after a career in carpentry. >> a lot of times we have a lot of different specialty departments that handle various cases. so, i mean, that could lead to the misrouting and of course the frustration. >> reporter: rebecca maron says nationally the bank has added 10,000 loan servicers in just the last year. more than doubling capacity. it now handles 14 million loans, most inherited from an acquisition, countrywide financial two years ago, at 25 locations. this one is in california. two floors the size of football fields crammed with cubicles. >> we have several thousand people here, associates in simi valley center, most of which are working on loan modification sluices for our customers. >> reporter: moreover, she says, the bank has made many of its own modifications after a hamp denial, though the terms aren't usually as good. >> since january of 2008,, we have done over 680,000 modifications for customers. and of that, 80,000 of those are hamp modifications. >> reporter: the numbers as of october: 700,000 modifications including 5,000 more in hamp, which is now up and running. >> but in the early start, building the process, adding new technology, adding new underwriting capabilities and building capacity was challenging. >> reporter: j.p. morgan chase which declined an on camera interview said the industry was taken by surprise at first. taken by surprise at first. once the president announced hamp, they wrote us, our call volume exploded. wells fargo has yet to respond at all. so we asked bank of america trisha who has been modifying loans for four years, was her bank overwhelmed? >> no. we take control of our cat calls and customers and try and get the help they need and be the one point of contact for them. >> reporter: but then, why do so few hamp applicants get modified? for one thing, customers regularly misrepresent their finances when they first apply over the phone, says maron, like the very customers we spoke with. >> you have a discrepancy between what the customer stated up front and what we were able to verify in those documents. >> reporter: we relayed the response to lorraine, awaiting for foreclosure, don madden rejected for hamp. both vehemently denied the bank's claim, saying they can prove they submitted everything in print right away, accurately. >> absolutely. i have the paperwork right here. >> reporter: last week, bank of america told madden his mortgage had been lowered 40%. the brauns, however, got rejected by chase shortly after the bank was told we were reporting their case, 18 months after the braun's first applied. >> warner: for the record, bank of america was a newshour underwriter when that story was produced. paul's reporting continues online, where he's following up on the people featured in this week's series. >> ifill: again, the major developments of the day: the paralyzed air travel system in the northeast slowly came to life, but many thousands of would-be travelers waited yet another day for flights home; thousands of russians were stranded for a third day at major airports in moscow after freezing rain knocked out power on sunday; and the nato death toll in afghanistan reached 700 for the year, by far the highest annual total yet. and to hari sreenivasan in our newsroom for what's on the newshour online. hari? >> reporter: there's more from spencer's interviews on health care reform in california, plus you can watch betty ann bowser's story about the brewing political battle over the new law in wisconsin. on "art beat," jeffrey brown talks to veteran "national geographic" photojournalist william albert allard about a new retrospective of his work. and on "nova" tonight, the search for evidence of ancient climate change in the ice beneath antarctica. scientists must contend with harsh weather and broken drill bits to unpack the secrets of the ocean floor. here's an excerpt. >> unlike drilling through sea ice, which is just 26 feet thick, the ice shelf here is 400 feet. >> we're looking at least doubling or trying to double the capability below the sea floor and penetrate to 1,000 meters into the sea floor. >> but that's only the beginning. >> no one has ever drilled through an ice shelf. they present these challenges. the ice shelves float up and down with the tide so you have to deal with the vertical elevation change. they move side ways. they flow. eventually your drill pipe is going to get bent. >> can the drill bore through a thick layer of ice that is constantly moving without breaking or getting yanged out of the sea floor? to confront this unique challenge head on, the team invents a new tool. the hot water drill. this marvel of engineering is a moving ring of heat that blasts jets of steaming water to melt wide holes so the drill can operate freely through 400 feet of shifting ice. >> reporter: also online, an interview with "nova's" science editor. all that and more is on our web site, www.newshour.pbs.org. margaret? >> warner: and that's the newshour for tonight. on wednesday, we'll have the next in paul solman's reports on the foreclosure crisis. i'm margaret warner. 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