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Analysis, background reports and updates from the PBS NewsHour putting today's news in context.

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    The USS Arizona burning after the Japanese attack on Pearl Harbor on Dec. 7, 1941. Credit: U.S. National Archives

    World War II veterans and survivors were among the estimated 3,000 people gathered on Saturday to commemorate the anniversary of the Japanese attack on Pearl Harbor in 1941.

    At 7:55 a.m. local time, a moment of silence opened the solemn ceremony marking the exact time the attack began 72 years ago, which killed nearly 2,400 service members.

    A Navy destroyer will pass by to honor the USS Arizona and its crew, the hull of which still lies in the harbor.

    Former U.S. Sen. Max Cleland of Georgia, a Vietnam veteran and current secretary of the American Battle Monuments Commission, delivered the keynote address at the ceremony.

    Related: Remembering Pearl Harbor with a poem (1998)

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    Pearl Harbor ceremony marks 72nd bombing anniversary: http://t.co/Ph02ICAZiypic.twitter.com/oOCZM0Mxir

    — Yahoo (@Yahoo) December 7, 2013

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    President Barack Obama earlier this month in D.C. Credit: Andrew Harrer/Bloomberg via Getty Images


    WASHINGTON (AP) -- President Barack Obama said Saturday he believed the chances for a comprehensive nuclear agreement with Iran are 50/50 or worse, yet defended diplomacy as the best way to prevent Tehran from acquiring atomic weapons.

    During a question-and-answer session with a pro-Israel audience, Obama was asked to provide the prospects for a final agreement between world powers and Iran next year, building on the recent six-month interim deal.

    "I wouldn't say that it's more than 50-50," Obama answered.

    The president's reply was somewhat startling. Obama has tried to allay the fears of many Israelis and some Americans that his administration last month promised to ease economic pressure too much in return for too few Iranian concessions.

    The comment nevertheless pointed to the difficult talks that await as the U.S. and its negotiating partners -- Britain, China, France, Germany and Russia -- work toward a final pact next year. The goal is to eliminate the possibility of Iran assembling a nuclear arsenal, even if any deal might let Iran continue enriching uranium at lower levels not easily convertible into weapons-grade material.

    Obama said the six-month interim agreement halts and rolls back central elements of Iran's nuclear program, compelling Tehran to eliminate higher-enriched uranium stockpiles, stop adding new centrifuges and cease work at a heavy water reactor that potentially could produce plutonium. It also provides time to see if the crisis can be averted through negotiation.

    "What we do have to test is the possibility we can resolve this issue diplomatically," Obama said.

    "If at the end of six months it turns out we can't make a deal," Obama said, "we are no worse off." U.S. sanctions against Iran will be fully reinstated and even tightened if Iran fails to uphold the agreement, he pledged.

    Obama's appearance at the Brookings Institution forum appeared directed as much at an Israeli audience as an American one. The discussion was broadcast live on Israeli television, with analysts there viewing it as an effort to patch over Obama's public differences with Israeli Prime Minister Benjamin Netanyahu.

    Netanyahu has called the nuclear agreement in Geneva the "deal of the century" for Iran. In an appearance Friday at the same forum, his foreign minister, Avigdor Lieberman, repeated Israel's objections.

    Obama acknowledged some "significant tactical disagreements" with Netanyahu, but said U.S. and Israeli bottom-line goals were the same.

    Secretary of State John Kerry was to speak later Saturday, and Netanyahu was on the agenda for Sunday.

    Beyond Israel, Sunni Arab countries have expressed concerns about what America's Iran engagement might mean for the balance of power in the region with Shiite-dominate Iran. Saudi Arabian officials even have talked about their own potential nuclear ambitions.

    Echoing Obama's effort to reach out to concerned allies, Defense Secretary Chuck Hagel renewed a U.S. push for the sale of missile defense technology and other weapons systems to U.S.-friendly Gulf nations to counter the threat of Iranian ballistic missiles.

    In a speech Saturday in Bahrain, Hagel made clear that any final deal on Iran's nuclear program wouldn't end the threat posed by a country the U.S. considers the world's leading state sponsor of terrorism.

    On Mideast peace hopes, Obama echoed an optimistic assessment provided by Kerry during a trip to Israel and the Palestinian territories this past week.

    The president said his administration had spent much time working with Netanyahu to understand Israel's security needs as part of any two-state solution.

    "I think it is possible over the next several months to arrive at a framework that does not address every single detail but gets us to the point where everybody recognizes it's better to move forward than move backward," Obama said.

    Still, he said tough decisions await both sides, including the Palestinians' understanding that a transition period will be necessary so no situation arises similar to Hamas' takeover of the Gaza Strip after Israel's 2005 military pullout.

    "The Israeli people can't expect a replica of Gaza in the West Bank," Obama said. "That is unacceptable."

    Associated Press writer Lolita C. Baldor in Manama, Bahrain, contributed to this report.

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    It's 5 p.m. EDT -- where are you getting your news? PBS NewsHour Weekend is streaming live on our UStream channel.

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    ALISON STEWART:  In his weekly radio address today, President Obama urged Congress to extend unemployment benefits for more than a million long-term unemployed Americans. The federal benefits kick in once state benefits expire. Caring for the long-termed unemployed is one challenge… So is finding jobs for those young workers -- those between 16 and 24 years old.

    Despite the improving jobs market, their unemployment rate is still stuck in the mid-teens.  And it's even higher than that among young minorities. For more about all this, we are joined by Victoria Stilwell of Bloomberg News. Victoria, thanks for being with us.

    VICTORIA STILWELL: Thanks for having me.

    ALISON STEWART: There was a recession in the early 70s, huge stock market crash in 1987 and jobs were scarce.  What makes this situation so different for young Americans, as opposed to those times of other economic hardship?

    VICTORIA STILWELL: Well, the great recession was unprecedented so it took trends that were already in place prior to them and exasperated. So, like you said, we’ve been seeing unemployment for people ages 16 to 24 high – it’s been high, it’s always been higher than the national average, but right now that spread has really widened out. 

    So in the last recovery the spread between unemployment for young people and for everyone else was about 5-6 percentage points, now it’s widened out to about 7 percentage points. So we have an unemployment rate for young people that’s double the national average. That’s a problem.

    ALISON STEWART: One of the things that’s interesting about this is we’re not just talking about low income, starter, part-time jobs, we’re talking about people who are getting ready to start their careers. They’ve been to college and grad school. What’s the long-term implication of those people being out of work?

    VICTORIA STILWELL: So if we have people that have put in all this money into getting an education, who’ve made a real investment in trying to secure better careers and their stuck with a waitressing job or a retail job there’s a lot of implications that come along with that. So they may have student loans that they may not be able to pay off as a result. That increases their probability of being delinquent or defaulting on those loans. They also lower their lifetime earnings potential.

    Center for American Progress did a study on what happens, what are the long-term implications of this and they found that for the one million Americans who are young and were unemployed because of the great recession, we’ve probably lost a collective $20 billion in earnings over the next 10 years.

    ALISON STEWART: With that in mind, what are the implications for the larger economy?

    VICTORIA STILWELL: Well one of the most important components of our economy is the housing market. So if we have young people that are living with relatives, living with friends, you know, couch surfing, renting, instead of buying a home because they don’t have the money to do that, or they don’t have the credit built up to do that, or they have bad credit because they’ve been delinquent on loans or credit card bills. That pushes back the timeline when they can build a home , if they do it at all.

    It also has big implications for consumer spending, which is the biggest part of our economy. If people are earning less over their lifetimes they’re going to be buying less they’re going to be consuming less.

    ALISON STEWART: So they can’t begin their economic lives so everything gets pushed back down the line?


    ALISON STEWART: I’m wondering if the way we’ve thought about these jobs for young people, that it’s over, that these jobs have been taken by people who have maybe two or three of these jobs to make up for a salary that they had once. They’re family people, they’re taking care of their families with these  what we once thought of as kids jobs. Is this a new normal?

    VICTORIA STILWELL: Well, so the hope is that as the economy improves, as we get higher demand, as companies see a need to take on more workers they’ll do exactly that and it will open up some of those entry level jobs for the people that have typically have had them.  Like you said, the great recession caused a lot of ripple effects and one of those is that people who were making 50, 60, 70 thousand dollars a year had to settle for flipping burgers or hanging up dresses on a coat rack. So the hope is that as things get better, like they are, that we will be able to get young people back into more of those jobs so they can add skills, add experience, and get on the track that they need to be.

    ALISON STEWART: Victoria Stilwell from Bloomberg, thanks for being with us.


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    GWEN IFILL: Next: a troubling account of the consequences of overprescribing addictive painkillers to veterans.

    The death rate from overdoses of those drugs at Veterans Affairs hospitals is twice the national average. But data shows the VA continues to prescribe increasing amounts of narcotic painkillers to many patients.

    Our story comes from the Center for Investigative Reporting.

    The correspondent is Aaron Glantz.

    AARON GLANTZ: U.S. Army Specialist Jeffrey Waggoner received a funeral with full military honors. He was medically evacuated out of Afghanistan in 2007 after he sustained a groin injury when a rocket-propelled grenade exploded during a house-to-house search.

    But that's not what killed him. Waggoner survived his deployment. He died back home in this motel, just hours after being discharged from a Department of Veterans Affairs hospital in Oregon. While recovering from his wounds, Waggoner's mental state deteriorated. He became addicted to painkillers. And the Army sent him to the detox center at this VA hospital in Roseburg to get clean.

    But the hospital continued to give him narcotics. And after two months, they released him with a massive cocktail of drugs, including 12 tablets of the painkiller oxycodone. Since Jeff's death, his father, Greg, has been trying to piece together what happened.

    GREG WAGGONER, father of U.S. Army Specialist Jeffrey Waggoner: I couldn't believe the amount of medications that was being prescribed to him.

    AARON GLANTZ: After he left the hospital, Jeff went to a nearby motel.

    GREG WAGGONER: He picked up a six-pack of beer. He checked into a room, has a couple beers, decides he's hungry. He goes next door to a restaurant, orders up a plate of nachos and another beer, and then becomes very groggy,

    AARON GLANTZ: The surveillance footage shows what happened next. Jeff fumbles with the keys to his room, barely able to stand. He nods, then lurches forward and collapses.

    Waggoner lay on the floor for an hour until the paramedics arrived. They tried to revive him, but it was too late. The state medical examiner concluded that, in addition to the two beers, Jeff consumed eight oxycodone pills, along with tranquilizers and muscle relaxants that he got from the VA.

    Greg Waggoner has never watched the video. He believes the VA was complicit in his son's death.

    GREG WAGGONER: The last thing you would think is that you have a child in the hospital trying to get care, that somebody would call at your door and tell you that he passed away.

    AARON GLANTZ: Since Waggoner's death five years ago, the Roseburg hospital's narcotic prescription rate has continued to rise. We tried to interview the hospital director, but our request was denied.

    Last year, doctors in Roseburg wrote more opiate prescriptions per patient than at any VA hospital in the country, according to data obtained by the Center for Investigative Reporting. The center analyzed 12 years of prescription data from the VA and found that prescriptions for four highly addictive painkillers have surged by 270 percent since the war in Afghanistan began, far outstripping the increase in patients.

    AARON GLANTZ: Dr. Stephen Xenakis is a psychiatrist and retired Army brigadier general. He says the data shows the agency is overmedicating patients as it struggles to keep up with their need for complex treatment.

    BRIG. GEN. STEPHEN XENAKIS, retired M.D., U.S. Army: They're working in these clinics. They're very busy. They have got time constraints. They have got pressures, and giving a prescription, which they know how to do and they're trained to do, is almost a default.

    AARON GLANTZ: Xenakis says that prescription opiates actually hurt most veterans, rather than help them.

    STEPHEN XENAKIS:If you have been exposed to a number of blasts and are already feeling the effects of the blasts, and then you add a medication for pain like an opiate, that's going to make your thinking problems even worse. And not only that -- you're going to feel more depressed.

    AARON GLANTZ: The VA has known about this problem for years. In 2011, VA researchers published a study showing the fatal overdose rate among VA patients is nearly double the national average. And four years ago, the agency adopted regulations designed to get doctors to use alternatives to prescription opiates.

    We spent a month trying to get someone from the VA to go on the record about prescription painkillers, but no one would talk to us.

    MAN: I want to get back to overmedication.

    AARON GLANTZ: The issue is drawing interest on Capitol Hill. In March, Dr. Robert Petzel, the VA's undersecretary for health, testified before the Senate Committee on Veterans Affairs.

    DR. ROBERT PETZEL, Department of Veterans Affairs: Let me deal first with opioids, which is the most dangerous, in my mind, of our overmedication issues.

    AARON GLANTZ: Petzel says the VA uses opiates only as a last resort.

    ROBERT PETZEL: When you're not able to manage the pain in any other way, it's opioids. And then there are very careful protocols about how that prescribing should be done.

    AARON GLANTZ: But the data shows the rate of prescriptions for opiates continues to rise. And, across the country, we found veterans addicted to painkillers they got from the VA.

    In Newport, New Hampshire, Tim Fazio is trying to stay clean. Fazio is a Marine Corps veteran who served in Iraq and Afghanistan. Two years after he came home, he went to the VA for help. Since then, VA doctors have provided him with nearly 4,000 oxycodone pills.

    TIM FAZIO, Marine Corps veteran: I thought the painkillers were OK because a doctor was prescribing it to me. If the doctor is giving this to me, I'm going to take it, you know?

    And [EXPLETIVE DELETED] if it makes you feel good, I'm going to take 15 of them, you know what I mean?

    AARON GLANTZ: Fazio deployed to Fallujah, and he survived a three-day firefight in Afghanistan. He wasn't severely wounded in the war. He says he took the pills to blot out the guilt and shame of surviving, when so many of his fellow Marines died after coming home.

    His medical records show the VA knew he was an addict, yet continued to dole out more opiates. At Tim's family home in Western Massachusetts, his father, Mike Fazio, has built a basement shrine to his family's military legacy.

    MIKE FAZIO, father of Tim Fazio:This is my son Tim. When he -- this is when he got out of boot camp. He was so proud.

    AARON GLANTZ: Fazio says his son's life started spiraling out of control after Tim's best friend from the Marine Corps died. He encouraged Tim to get help at the local VA hospital. The doctors loaded him up on painkillers.

    MIKE FAZIO: That was the beginning and the end for him.

    AARON GLANTZ: Tim was hooked, and overdosed again and again. His parents kicked him out, and he moved in with Eric Demetrion, another former Marine. The two fed each other's addictions, and when they ran out of pills, they bought heroin. Eventually, Tim realized he need to move out.

    Three months later, Demetrion died of an overdose. Today, Fazio is living with his girlfriend. He's been clean for six months now, but staying off opiates hasn't been easy. In July, after a violent confrontation landed him in a VA emergency room, he was shocked when an agency doctor again prescribed oxycodone.

    Tim says he filled the prescription, and then stared at the bottle.

    TIM FAZIO: I opened it a couple of times a day for probably three or four days to try to take one out. I said, if I take this, I'm not going to be -- I'm not going to be living where I am right now. I'm going to be off and running again. It's going to send me on my way. So, I flushed them.

    AARON GLANTZ: With his mind no longer deadened by opiates, flashbacks and anxiety make him angry and explosive. And, so, despite that recent history, Fazio still turns to the VA for help.

    He's up early this morning, waiting for a shuttle to take him to the VA.

    TIM FAZIO: My goal is to figure out where this rage, anxiety and all this is coming from, when I have been sober. I got to figure out where that comes from and how to cope with that, I guess.

    AARON GLANTZ: The Department of Veterans affairs remains a refuge for Tim. He says it's a place where he can surround himself with other veterans, men and women who have survived war, only to battle addiction at home. 

    GWEN IFILL: That story was originally part of a new investigative radio pilot called "Reveal." That airs this week on many public radio stations. "Reveal" is produced by the Center for Investigative Reporting and PRX. You can find a link to their related online material on our website.

    Visit the Center for Investigative Reporting's site for more information on the investigation's findings.

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    A child holds a candle during Sunday service on a national day of prayer for Nelson Mandela on Dec. 8, 2013 in Johannesburg, South Africa. Credit: Photo by Dan Kitwood/Getty Images

    Across the rainbow nation Sunday, South Africans poured into churches or took the time to privately commemorate the life and legacy of Nelson Mandela.

    South African officials had called for a national "day of prayer" to honor the late anti-apartheid icon.

    At the Bryanston Methodist Church in Johannesburg, several members of Mandela's family, his ex-wife, Winnie Madikizela-Mandela, and President Jacob Zuma attended a prayer service.

    PHOTO: Winnie Mandela Madikizela prays during a mass in memory of Nelson Mandela in Johannesburg #AFPpic.twitter.com/kfH8SSWP0F

    — AFP Photo Department (@AFPphoto) December 8, 2013

    In Soweto -- the town where the 1976 anti-apartheid uprising took place, the Regina Mundi church was host to hundreds of worshippers. Father Sebastian Rossouw described Mandela as "our light in the darkness."

    Zimbabwean Virginia Sibanda told the New York Times that Mandela "was a leader not just for South Africa but for all Africans, and the world."

    Outside of South Africa, commemorative services were held from London to Ramallah.

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    One month after super typhoon Haiyan tore through the Philippines killing thousands, many of the worst-hit areas remain in ruins.

    According to the Associated Press, in the city of Tacloban, signs of rebuilding are underway amid the rubble.

    Destroyed buildings and debris line the shore, but in amongst the piles of rubble is a hive of activity.

    The air is filled with the sounds of hammers hitting nails and metal sheets, shovels scraping pavements, and trucks hauling debris as residents work hard to recover from the catastrophe.

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  • 12/08/13--10:17: #KIEV
  • PHOTO: A riot policeman stands guard in front of the Ukrainian parliament in Kiev, by @vasilymaximovpic.twitter.com/Z1EKem63nS

    — Agence France-Presse (@AFP) December 8, 2013

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    CAMP LEATHERNECK, Afghanistan (AP) -- U.S. Defense Secretary Chuck Hagel on Sunday offered troops a rare glimmer of hope on the department's financial woes, saying a possible budget agreement back home could ease the automatic spending cuts that have hit the military hard.

    Wrapping up a two-day visit to Afghanistan before stopping in Pakistan on Monday, Hagel told Marines at Camp Leatherneck that an emerging deal would restore some money to the Pentagon this budget year.

    Hagel's time in Afghanistan was perhaps most notable for something he did not do -- meet with President Hamid Karzai, who has rankled the U.S. by refusing to sign a bilateral security agreement before year's end.

    The visit to Pakistan will be significant, too -- the first by an American defense secretary since Robert Gates in early 2010. Relations between the two countries have seesawed over tensions about drone strikes and military operations along the Afghanistan-Pakistan border.

    Service members repeatedly have quizzed Hagel about the budget and the potential effect on the military. But his response to a questions Sunday sounded a more optimistic tone than he has used for months.

    At the same time, he said that whether or not the deal goes through, insuring that troops are ready for combat will continue to be a priority.

    The automatic spending cuts, if they continue unchanged, would slice $52 billion from the department's budget in the fiscal year that began Oct. 1.

    Officials have said U.S. lawmakers are negotiating a deal that could restore between $10 billion to $25 billion each year, for the next two years, to defense spending.

    Hagel said the possible deal could give the department two years of budget certainty. Defense and military officials have complained often that the past two years of congressional wrangling over the across-the-board cuts has made it difficult for the Pentagon to plan or handle contracts.

    "I want to reassure you that we will take care of our troops first, our families, we will fund completely the priorities of our missions and you will get everything you need to do your mission," Hagel told the Marines.

    Hagel traveled to southern and southwestern Afghanistan, meeting with commanders and local Afghan leaders for updates on the fighting season and the transition of the nation's security to Afghan forces.

    He spoke to about 150 troops at Camp Leatherneck and to about that many soldiers at the huge U.S. military base in Kandahar.

    Karzai visited Iran on Sunday, but he was in Kabul, the capital, when Hagel arrived Saturday. The slight by a senior U.S. official made clear the Obama administration's pique over Karzai's unwillingness to sign the stalled security agreement.

    Karzai is holding up a pact that Washington and NATO officials say is critical to the plan to keep thousands of forces in Afghanistan after 2014 for a training and counterterrorism mission. He says he wants his successor to decide after Afghanistan's April elections.

    Explaining his decision, Hagel said he did not think there was much he could add to what is already a straightforward U.S. message. The U.S. wants the agreement signed by year's end, although Hagel suggested a cutoff date could come as late as February when NATO ministers gather for a meeting in Brussels.

    According to a senior defense official, Afghan leaders and military commanders told Hagel during his Sunday meetings that they want the agreement signed promptly because they need continued U.S. and coalition assistance.

    The Afghans now conduct the bulk of the fighting missions, with the U.S. and coalition troops watching, giving advice and training and providing needed logistical and medevac support.

    The Afghan leaders told Hagel that while they have much of the equipment they need, they rely on the coalition to provide the training and infrastructure for repairs and maintenance, said the official, who was not authorized to discuss the private meetings publicly and spoke only on condition of anonymity.

    Karzai tentatively has endorsed the agreement and a council of tribal elders, the Loya Jirga, has said it should be signed by Jan. 1, as the U.S. has demanded.

    Without a signed agreement, all U.S. troops and foreign forces would leave at the end of next year.

    Associated Press reporter Lolita C. Baldor wrote this report. Follow her on Twitter @lbaldor.

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    ALISON STEWART: And now we return to Iran, where, today, UN inspectors visited a site used to produce plutonium that could be used in a nuclear weapon.

    For more about this, we are joined from Washington by David Albright. He is a physicist and is founder and president of the non-profit Institute for Science and International Security. He is a leading expert on Iran's nuclear program.

    Mr. Albright, the inspectors today are visiting a heavy water production plant.  What are they looking for specifically at this plant?

    DAVID ALBRIGHT: Well this is a visit by the inspectors so they are looking for very simple things. Is the plant operational? How much heavy water has it produced? They'll try to find out what it's purpose is, I imagine. Iran has already said it's made enough heavy water for the adjacent heavy-water production plant. So is it going to export it? Is it planning to build more heavy-water reactors?  It's also. the heavy water production plant is part of the two facilities, including the reactor,  that the UN Security Council resolutions have asked to have their operations suspended. What that means is that this plant is also on the list of plants that the United States is likely going to want to see shut down if there is a final deal with Iran.  And this kind of visit creates a baseline of what's going on there and will help establish is that plant is actually needed. 

    ALISON STEWART: Today is a one-day event at one place. How many inspections will actually take place?

    DAVID ALBRIGHT: For the agenda of the International Atomic Energy Agency this is just a small, albeit important, step. They are going to have to visit military-related sites that have been linked to past and possibly ongoing nuclear weapons work. The Parchin site has a facility that's linked to old work on nuclear weapons and the IAEA has asked to go there for over 18 months and been denied.  And in that period of denial, Iran has essentially rebuilt the site and its going to make the IAEA's job harder to verify what happened there in the past. That means the IAEA are going to want to talk to people.  They are going to want to go to other sites linked to nuclear weapons allegations so it's going to be a long, difficult process.  And it's going to depend very much on if Iran is going to be cooperating with the inspectors.

    ALISON STEWART: What is the likelihood that Iran is concealing it's nuclear program?

    DAVID ALBRIGHT: Well I think it hasn't done a very good job.  The evidence gathered by many members states is that they had a nuclear weapons in the past and parts of it may have continued. The problem has been that Iran absolutely denied it. They call the information fabricated, misinterpreted, and has taken the position that they have never had a nuclear weapons program. So I think the evidence is pretty good that Iran is going to have to change its approach and start to address the IAEA's concerns. Now it can do it in secret. This doesn't have to be a public discussion. They are many ways for Iran in essence to come clean and put to rest these IAEA concerns but it can't escape it. It's going to have to address the IAEA's concerns and the recent joint plan of action, negotiated between the P5 and Iran reiterates that the IAEA's concerns are going to have to be addressed if there ever is going to be a final deal. 

    ALISON STEWART: How  much is today's inspection a gesture or a test of Iran's cooperation going forward?

    DAVID ALBRIGHT: I think its a good gesture by Iran. I mean they haven't allowed the inspectors into the plants since 2011, the inspection before that was 2005. So I think it's a good gesture by Iran and it sets up a what you have to look at as a very difficult process but a very positive process. And that Iran appears to be willing to open up. It's going to be sorely tested in the next several months but you have to view today's success as giving hope for the future. 

    ALISON STEWART: David Albright thank you so much. 

    DAVID ALBRIGHT: Thank you. 


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    JUDY WOODRUFF: Now: trading in Ben Franklins for Norman Rockwells.

    Economics correspondent Paul Solman visits one New England county that prints its own money.

    It's part of his ongoing reporting Making Sense of financial news.

    PAUL SOLMAN: The Berkshire Mountains of Western Massachusetts, home to the historic Red Lion Inn in Stockbridge, operating continuously since 1773, back when the tab might have been settled with newly minted so- called Continentals, revolutionary currency; 240 years later, I can pay by United States dollar, of course, or credit card.

    Paul Solman. What's my bill?

    WOMAN: Right now, you have an outstanding balance of $148.10.

    PAUL SOLMAN: One-forty-eight-10?

    WOMAN: Yes.

    PAUL SOLMAN: But the inn offers another option.

    But I'm going to get BerkShares to pay with.

    WOMAN: Oh, perfect.

    PAUL SOLMAN: That's OK?

    WOMAN: Absolutely.

    PAUL SOLMAN: BerkShares, an alternative, small-is-beautiful local currency born in 2006 and now accepted by some 400 businesses in Berkshire County.

    The process begins at five area banks, one conveniently right next door to the Red Lion Inn. Among them, the banks have about a million BerkShares in their vaults, circulated only when someone like me steps up to the window.

    Can I trade dollars for BerkShares here, just no questions asked?

    No fuss, no muss, and you buy BerkShares at a 5 percent discount, getting 105 BerkShares for every $100.

    Seven hundred.

    For my $700, to cover our crew costs for several nights at the inn, 735 BerkShares.

    I'm back.

    WOMAN: Hi.

    PAUL SOLMAN: Hey, with BerkShares.

    And, thus, you get a discount at every place that accepts the local currency, because at the bank, it takes 105 BerkShares to buy back $100.

    The main purpose, then:

    BRIAN BUTTERWORTH, Red Lion Inn: BerkShares is just a way to keep money within the community.

    PAUL SOLMAN: Brian Butterworth is the Red Lion Inn's director of sales.

    BRIAN BUTTERWORTH: We don't make money off of it or lose money off of it.

    PAUL SOLMAN: But wait a second. I just got a 5 percent discount. That's not good for the Red Lion Inn, is it?

    BRIAN BUTTERWORTH: We take your BerkShares at the same value as U.S. dollars, and we spend them as U.S. dollars. And it stays in our community, because there's a geographical limit to where you can redeem BerkShares.

    PAUL SOLMAN: And in keeping with the small-is-beautiful philosophy, the limit is about 10 miles outside Berkshire County's borders.

    ALICE MAGGIO, Schumacher Center for New Economics: But we don't enforce who can take BerkShares and who can't.

    PAUL SOLMAN: Alice Maggio runs the BerkShares program out of the Schumacher Center for New Economics in Great Barrington. E.f. Schumacher was the author of small is beautiful. But Maggio admits small can also be parochial.

    ALICE MAGGIO: You can see local currencies as isolationist and secessionist.

    PAUL SOLMAN: Protectionist?

    ALICE MAGGIO: Or protectionist.

    PAUL SOLMAN: But she hardly thinks BerkShares represent a threat to global trade.

    ALICE MAGGIO: We used to have this system in this country. We used to have local currencies everywhere.


    ALICE MAGGIO: That's what we’d like to see again, is this regional currencies that work for their region and then a national currency. Why not?

    PAUL SOLMAN: In a remarkably apt application of the phrase think globally, act locally, there's a mini-boom in local currencies worldwide, especially in Europe, the Chiemgauer in Southern Germany, in France, the Basque Eusko, and Toulouse Sol-Violette, the Bristol Pound and the Brixton Pound in the U.K.

    But, while thinking globally, we too were acting locally, and thus more interested in the currency of Berkshire county. So, Alice Maggio took us for a tour of our options, first stop, The Magic Fluke, a local ukulele manufacturer.

    ALICE MAGGIO: Hello.

    PHYLLIS WEBB, The Magic Fluke Company: We make a great solid-body ukulele, where we actually took the trees down and kiln-dried the wood.

    PAUL SOLMAN: Co-owner Phyllis Webb, a woman some might describe as from an earlier era.

    PHYLLIS WEBB: Right here in Sheffield, we have been able to find some wood for our fretboard, and in our new violin, we will be using an injection molder right here in Pittsfield, so not far away.

    PAUL SOLMAN: Ideally, The Magic Fluke pays in BerkShares for the parts to make its instruments.

    PHYLLIS WEBB: We do sell all over the world, but we hire local people. It's good for our country to keep manufacturing here. It's about community support. It's about shopping local. It's about sustainability right here where we live and where we work.

    PAUL SOLMAN: Now, the Berkshires are known for a certain kind of lifestyle, which attracts what you might call cosmopolitan locals.

    JEAN FRANCOIS BIZALION, Bizalion's Fine Food: I came on a July 4 weekend 25 years ago and fell in love with the area. And it took me 10 years to move here full-time.

    This is Francois. How are you?

    PAUL SOLMAN: Jean Francois Bizalion, a native of Arles in the South of France, used to be a fashion editor, now runs his own gourmet shop in Great Barrington.

    JEAN FRANCOIS BIZALION: We take BerkShares from our customers when they purchase food or items off the shelf, and we also pay some of the vendors locally with our BerkShares.

    PAUL SOLMAN: So, is it more a political act on your part or a self-interested act, in the sense that you will get more business if there are more people circulating or owning BerkShares?

    JEAN FRANCOIS BIZALION: It's a bit of both. We're trying to encourage local industries and possibly put a stop to big formula stores who might be coming in and not having the same effects when they do business here as a small enterprise would. So, in that sense, it is political.

    PAUL SOLMAN: I assume you mean liberal political, or sort of left-wing political. That fair?

    JEAN FRANCOIS BIZALION: Yes, it is fair. Left-wing, maybe, liberal, yes.

    PAUL SOLMAN: And so it went everywhere we visited, at establishments that have been doing business with BerkShares since day one and with recent converts that Alice Maggio was just signing up.

    ARI ZORN, Zorn Core Fitness: My name is Ari Zorn of Zorn Core Fitness. I signed up for BerkShares today. And I think it's a beautiful thing.

    PAUL SOLMAN: A locavore latte lover's liberal dream come true? This isn't partisan, says Brian Butterworth, a Republican.

    BRIAN BUTTERWORTH: It -- also a conservative appeal as well, because of some concerns with the money system as it is right now in the United States.

    PAUL SOLMAN: Tom's Toys also fails to fit the stereotype.

    Anything that's made locally?

    TOM LEVIN, Tom's Toys: Local New England local or USA, but not in Great Barrington or Berkshire County, no.

    PAUL SOLMAN: In fact, most of the toys Tom Levin showed me for my grandkids, like most toys everywhere, were, yes, made in China.

    Still, Levin sees himself as doing his part to save Main Street for tourists and locals alike.

    Is BerkShares the answer to the threat to retail from the Internet and chain stores?

    TOM LEVIN: I would say it's part of the answer. The answer is also to create awareness among people that, if they shop online, 100 percent of what they spend goes into the same cyberspace that they're sending their order. If they shop at a big box store, 65 percent of what they spend leaves the community.

    PAUL SOLMAN: But, in the end, do consumers really care? Legend has it the very first BerkShare transaction took place across this counter at Rubi's Coffee shop. Owner Matt Rubiner says the BerkShare movement was something of a fad at first. Then:

    MATT RUBINER, Rubi's Coffee & Sandwiches: It went through kind of a fallow time, but now we're beginning to see more and more.

    PAUL SOLMAN: And Alice Maggio is working hard to add even more businesses, is eying a scheme to issue more BerkShares as so-called productive loans to local businesses by fronting them the currency to start up or expand.

    Ultimately, she also hopes to untie BerkShares from the U.S. dollar.

    ALICE MAGGIO: That is our goal, is to create a currency that holds its value, as opposed to a currency like the dollar that's inflating constantly. So, and at that point, people will want to use BerkShares.

    PAUL SOLMAN: And for folks in places like Berkshire Country, under the cloud of both de-industrialization and globalization for decades now, the hope is that here comes the sun once more.

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    Rep. Paul Ryan listens to Sen. Patty Murray during a Nov. 13 budget conference meeting on Capitol Hill. The two are tasked with finding a compromise spending plan to fund the government by Friday. Photo by Alex Wong/Getty Images

    Members of the House and Senate on Monday will be in the same place at the same time, starting the clock on an intense week of necessary action on Capitol Hill.

    Friday is the most critical deadline, with Budget Chairs Sen. Patty Murray and Rep. Paul Ryan tasked with presenting a compromise spending plan to fund the government and avoid another shutdown.

    The Morning Line

    Last week, the two met in secret while their staffs prepared for a formal rollout. The Washington Post's Lori Montgomery notes the deal in the works appears to amount to "little more than a cease-fire" between the two parties:

    [A]ides said Ryan and Murray are likely to bypass the committee and take the deal, if finalized, straight to the full House and Senate. Congressional leaders hope to finish work quickly and leave town for the holidays as soon as Friday.

    Senior aides familiar with the talks say the emerging agreement aims to partially repeal the sequester and raise agency spending to roughly $1.015 trillion in fiscal 2014 and 2015. That would bring agency budgets up to the target already in place for fiscal 2016. To cover the cost, Ryan and Murray are haggling over roughly $65 billion in alternative policies, including cuts to federal worker pensions and higher security fees for the nation's airline passengers.

    David Rogers of Politico has more here on the possible pension proposal.

    Politico's Burgess Everett and Ginger Gibson have been hearing griping about the private negotiations, and how the closed-door talks are making some lawmakers "antsy" they won't like the final deal:

    Despite their worries, there may be little that Senate Republicans and House Democrats can do to stop a budget deal being crafted by Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.). The House and Senate Budget committee chairmen want to reach a deal before the Dec. 13 deadline, when the House is expected to recess for the year.

    In order for a deal to pass, Senate Democrats will need to win over only five Republicans, which aides in both parties predict is a strong possibility. And most House Democrats would likely join Republicans in passing a deal, fearful of being tagged with an obstructionist label often pinned on the GOP.

    Due to the nature of one-on-one talks between Ryan and Murray, hundreds of members of Congress have been largely excluded from the information pipeline, including some members of leadership in both parties. Senate Republicans who may staunchly oppose the emerging deal have been loath to criticize the ongoing talks in a show of loyalty to Ryan. They also want to avoid the ugliness of the October shutdown debate, when the GOP was divided hopelessly on strategy for weeks.

    CQ Roll Call's Adriel Bettelheim writes in his morning newsletter that Ryan and Murray kept talks up over the weekend in hopes of having something to present to the conference by Tuesday. GOP House leaders are prepared to move a budget agreement this week, he writes, "[b]ut talks are being complicated by Democrats' insistence that an agreement be paired with a $25 billion extension of emergency jobless benefits to the long-term unemployed." The plan allowing people to get up to 47 weeks of additional benefits expires Dec. 28.

    Senate Minority Whip Dick Durbin said on ABC's "This Week" that Democrats are not showing a "take it or leave it" attitude on extending unemployment funds, but think they are important.

    The president made the case for those benefits in his weekly radio address.

    "[I]f Members of Congress don't act before they leave on their vacations, 1.3 million Americans will lose this lifeline," Mr. Obama said. "If Congress refuses to act, it won't just hurt families already struggling - it will actually harm our economy. Unemployment insurance is one of the most effective ways there is to boost our economy. When people have money to spend on basic necessities, that means more customers for our businesses and, ultimately, more jobs. And the evidence shows that unemployment insurance doesn't stop people from trying hard to find work."

    Watch here or below:

    Republicans used their Saturday morning video to keep after the administration on the Affordable Care Act. Rep. Renee Ellmers of North Carolina kept the focus on women, telling stories from her district she said show the Obama administration is hurting families.

    "If you want to talk about a war on women, look no further than this health care law," she said.

    "These families wouldn't be in this boat if those who wrote the law had listened to hardworking taxpayers instead of relying on insurance companies and big businesses. Even now, these same entities are the ones getting special delays, breaks, and workarounds from the White House," Ellmers said. "We're also going to keep pressing the president to do the right thing. If the president won't scrap this law, isn't it time for him to delay it for all Americans before it does further harm?"

    Watch here or below:

    In a statement over the weekend, Minority Leader Nancy Pelosi called the address a "profound insult to the intelligence of women across this country."

    Senators return to their chamber after a two-week recess, which began just as Majority Leader Harry Reid muscled through a rules change that will make it easier for President Barack Obama's judicial nominees, top appointments and Cabinet selections to win passage. Reid is expected to set up votes this week on a series of Mr. Obama's picks for the D.C. Circuit Court of Appeals, beginning with confirmation of Patricia Ann Millett Monday evening.

    Alan Fram of the Associated Press writes that both sides intend to use the procedure to flex "muscle." He tees up the coming days:

    Over the next two weeks, Reid plans to push five more major nominees through the Senate.

    They include Janet Yellen to lead the Federal Reserve, Jeh Johnson to head the Department of Homeland Security and Rep. Mel Watt, D-N.C., to lead the Federal Housing Finance Agency. There are also two more Obama picks for the remaining vacancies on the D.C. court -- attorney Cornelia "Nina" Pillard and U.S. District Judge Robert Wilkins.

    There is little doubt all five will be approved. But time-consuming GOP delays are possible, especially against Watt. Some Republicans say he is not qualified to run an agency that oversees federally backed home lenders Freddie Mac and Fannie Mae.

    Also on the agenda this week is a measure authorizing defense policy. Iran sanctions and new proposals for curbing sexual assault have delayed the process, with lawmakers considering a scaled-back piece of legislation to ensure the bill passes this week.

    If members of Congress had hoped to get Mr. Obama's attention on the busy to-do list or other matters Monday and Tuesday during the annual holiday parties at the White House, they are out of luck. The president and First Lady Michelle Obama head Monday to South Africa to attend services for Nelson Mandela. The soirees will continue as planned, with Vice President Joe Biden now tasked with hosting.


    A White House official told reporters the health care focus Monday will be about Medicaid expansion in the states.

    The New York Times' Campbell Robertson and Jeremy Peters look at three incumbent Democratic Senators trying to hold off Republicans in the South.

    Ryan Lizza writes for the New Yorker about the push on Capitol Hill to rein in the Obama administration's surveillance activities.

    The Hill's Kate Tummarello takes a look at technology giants teaming up to try to reform National Security Agency programs.

    Mississippi Sen. Thad Cochran will seek a seventh term, setting up a primary contest with GOP state Sen. Chris McDaniel, who has support from tea party and other conservative groups. Roll Call's Kyle Trygstad has more on Cochran's tough test.

    Politico's James Hohmann attended a gathering of Virginia Republicans over the weekend and found little soul-searching over last month's electoral losses. Hohmann also reports that former Republican National Committee chairman Ed Gillespie is weighing a potential challenge to Democratic Sen. Mark Warner in 2014.

    Roll Call's Meredith Shiner looks at the prospects for minimum wage legislation on Capitol Hill.

    Mr. Obama spoke Saturday to the Saban Forum, saying that his pursuit of a comprehensive diplomatic deal to end Iran's development of a nuclear weapon is as likely to fail as succeed. Still, he defended the move as the best option to protect U.S. and Israeli national security with respect to the issue, Zachary Goldfarb reports for the Washington Post.

    The Washington Post had a major report on sugar over the weekend.

    In Politico's new magazine, Susan Glasser asks if Hillary Clinton was a good secretary of state, and if that even matters.

    Time's Jay Newton-Small sees a shift for Clinton toward wooing young women if she runs in 2016.

    The president welcomed this year's Kennedy Center honorees to the White House on Sunday. The recipients include musicians Billy Joel and Carlos Santana, pianist Herbie Hancock, opera singer Martina Arroyo and actress Shirley MacLaine. Stay tuned to the NewsHour this week to see Jeffrey Brown's conversation with Santana.

    Mr. Obama made a video for Computer Science Education Week.

    Heard on the Hill wonders if perhaps this Christmas card is taking beauty a step too far.

    The Washington Post's Chris Cillizza (aka The Fix) awarded Sunny Obama the worst week in Washington. Come on! Throw her a bone.

    NEWSHOUR: #notjustaTVshow

    Mark Shields and David Brooks spoke Friday with Judy Woodruff about Nelson Mandela's legacy and the president's pledge to make income inequality a top focus of his remaining time in office. Watch the full discussion here or below:

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    Poet Michael Collier grew up in Arizona, but he hadn't lived there for a while when he wrote "At the End of a Ninetieth Summer." His father was celebrating his 90th birthday, but Collier couldn't return to his home state to participate.

    "I felt sort of disconsolate that I couldn't be there for it and give him my love and wish him well. So I created a moment that I imagine must have happened knowing where the gathering was and who the people were."

    Collier writes poems about moments. During a conversation with Art Beat, Collier explained the importance of looking closely and "(describing) it as accurately as possible, because if you can do that, sometimes what happens is you kind of pass through the surface of the scene to get to something behind it."

    While the scene in "At the End of a Ninetieth Summer" is fictional, Collier still captures careful details. The "robot vacuum" for example is "coming out and spraying water and breaking the stillness of the moment. It doesn't have a particular meaning, but it seemed to have a huge symbolic meaning."

    At the End of a Ninetieth Summer

    They drink their cocktails in the calm manner of their middle years, while the dim lights around the swimming pool makes shadows of that world they've almost fully entered.

    Like Yeats's wild swans their uneven number suggests at least one of them is no longer mated. Added up, their several ages are short of a millennium. This means the melting ice cubes are silent music beneath

    their slow talk, and slow talk is how gods murmur when eternity comes to an end. The way it feels for these friends who amaze themselves with what they remember -- no the small details --

    but how long ago lives happened and how fast. Occasionally, usually from the wives, there's a mention of the War, as if they'd endured before waiting like this, except now there's no uncertain homecoming,

    no life to be beginning and nothing to complete that doesn't wear already the aura of completion. Listen, they are laughing. One eases himself up to refill his drink. His wife, in a wheelchair, wants one, too.

    Another makes a joke about making it a double and gets up to help. They are gone so long, or not long enough, that someone asks, "Where's Bob and Jim?"

    Now and then a tentacle of the robot vacuum submerged in the pool breaches the surface, squirts a welcome spray of water then retracts where it continues its random sweeps,

    until it breaks into the air again. Bob and Jim are back, the drinks get passed, even so Jim's wife asks, "Where did you go?" Instead of answering, he raises his glass.

    Collier doesn't always imagine scenes. Sometimes he describes moments from memory, as in "Grandmother with Mink Stole, Sky Harbor Airport, Phoenix Arizona, 1959," a poem about his grandmother's visits for the Easter holiday during his childhood. In that poem, Collier reminisces about the moment his grandmother walks off the plane with a mink around her neck, unprepared for the Arizona sun.

    "If I'm writing a poem that begins with a particular experience that I've had, I feel more tightly connected to that experience and also I feel a responsible towards it. The trick with that kind of poem is to create a distance from the actual event so that you ... can give space and room for the imagination to break out."

    In a poem where scenes need to be created, "the trick there is to create a kind of verisimilitude, to make it seem as if it's not imagined but that it actually happened."

    Michael Collier was the Poet Laureate of Maryland from 2001-2004. He has published several collections of poetry, including "The Ledge," which was a finalist for the Los Angeles Times Book Prize and the national Book Critics Circle Award. "An Individual History," published July 2012, is his latest collection of poems. Collier is a professor at the University of Maryland, College Park, and is the director of the Bread Loaf Writer's Conference.

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    New data from Facebook revealed the year's most talked-about topics and trends on the social network.

    Pope Francis led the list, followed broadly by the word "election" and the Royal Baby. Facebook measured the number of posts in 2013 that "mentioned a specific topic and then ranked those topics based on the overall number of mentions to create each list." Mentions included the term itself and related hashtags, Facebook said.

    The Super Bowl was the most talked-about topic in America, topping the government shutdown and the Boston Marathon.

    Find the most talked-about Facebook topics in your area -- or for your own Facebook page -- here.

    H/T Sam Lane

    Support Your Local PBS Station

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    By Larry Kotlikoff

    Retirement PlanNot understanding what you're inputting to an online Social Security benefit calculator could result in a wildly inaccurate benefit estimate. Photo courtesy of Kick Images via Getty Images.

    Larry Kotlikoff's Social Security original 34 "secrets", his additional secrets, his Social Security "mistakes" and his Social Security gotchas have prompted so many of you to write in that we now feature "Ask Larry" every Monday. We are determined to continue it until the queries stop or we run through the particular problems of all 78 million Baby Boomers, whichever comes first. Kotlikoff's state-of-the-art retirement software is available here, for free, in its "basic" version.

    As I've now done a couple of times, I'm posing a question to myself. This week's question is whether it's safe to use any old online Social Security benefit calculator.

    You might think that online calculators, including the ones that are free, will give you a straight answer. Think again. Some will, but many, if not most, won't. There are two ways online calculators can go badly wrong. They can take in the wrong inputs, and they can make the wrong calculations with those inputs.

    Take AARP's Social Security calculator, for example. The tool gives you two ways to enter your Primary Insurance Amount (PIA), which is the building block for calculating all the benefits you and yours can get on your earnings record.

    The first way is to enter your average earnings. But what's the meaning of "average earnings"? The instructions say, "If your earnings have gone up and down over the years, enter an average salary, even if it's different than your current salary." Okay, but is this an average salary measured in today's dollars or is it an average of the actual dollars you earned each year in the past?

    MORE FROM LARRY KOTLIKOFF: How Poor Advice May Have Denied This Woman Extra Social Security Benefits

    The website doesn't say. But it can make a huge difference to the calculated PIA. And even if you knew whether to enter your past average earnings in actual dollars or today's dollars, that doesn't suffice to determine your PIA. Indeed, if you didn't work for 40 quarters in covered employment, your PIA will be zero because you won't be eligible for any benefits, period. If you do have 40 quarters under your belt and if you enter your average past covered earnings correctly, your PIA may still be miles off. The reason is that the accurate calculation of your PIA requires precise knowledge not of your average past covered earnings, but of each year's separate level of earnings. In other words, when you made what matters.

    The reason is that Social Security takes each year's past covered earnings up through age 60 and then blows them up using its Average Wage Index. It then puts each of these blown up values into a pot, adds to the pot each year's covered earnings after age 60, and then takes from the pot the 35 largest values. Then it averages these amounts, divides by 12 and, voila, it's made your own personal Average Indexed Monthly Earnings (AIME). But that's still not your PIA. Getting your PIA requires running the AIME through a progressive formula with three brackets that ensure that those with lower AIMEs end up with a better deal than those with higher AIMEs. A better deal here means that the ratio of your ultimate PIA to your AIME is larger.

    Great chefs don't take the average amount of different spices called for in each recipe and use that amount for each spice. If they did, they'd be fired. But this is the care with which AARP is "helping" you make what could well be your most important decision regarding your retirement finances.

    Moreover, the AIME calculation only uses past covered earnings, not your total earnings. But the AARP calculator doesn't tell you to enter your average past covered earnings. It just tells you to enter your average earnings, which users will likely take to mean their total, not their covered earnings.

    To understand how bad just this mistake can be with respect to getting a benefit estimate from AARP, we ran a single person -- call him Dan -- twice through a software that incorporates precise earnings histories. In each case, the person's average nominal earnings are $50,000. But in one case, Dan earns exactly $50,000 each year for 40 years. In the other case, Dan earns $100,000 each year for 20 years and zero otherwise. Although Dan's average earnings are the same, his benefits in the first case are one-third larger than in the second case!

    But, hold on, I'm not done fuming.

    How long will you continue to work? The AARP calculator must assume you'll work through full retirement age, but it doesn't say. And if you are only going to work for two more years and full retirement age is eight years away, well, bingo, that's yet another potentially decent-sized mistake entering into your PIA calculation. This is particularly the case for workers who earn above the taxable maximum after age 60. For such workers, their AIME is guaranteed to go up for each year they work after age 60 because each extra year's worth of covered earnings thrown into the pot will always be larger than the other ones in the pot.

    Furthermore, without exactly correct data on your past covered earnings, it's impossible for an online calculator to properly implement Social Security's Recomputation of Benefits, which can lead to larger benefits if you work into your 60s or beyond. It's also impossible to properly calculate Social Security Windfall Elimination Provision, which applies to workers who spent some time in Social Security non-covered employment.

    Understanding these problems with AARP's first way to use its calculator might lead you to say, "forgetaboutit," and proceed to AARP's second way. But the second way to use the calculator assumes you won't work at all in the future. It also takes you to one of Social Security's online calculators, which will provide a PIA estimate that is guaranteed to come back with the wrong estimate of your PIA. The reason is that, as just indicated, it assumes the economy will experience zero growth in average wages and also zero inflation from now until the end of time. That's unreasonable given that we've had both real wage growth and inflation in all but one year in the last half century.

    Now, why would Social Security make these assumptions and, thereby, purposely understate your PIA, with a greater understatement the younger you are? The answer is to prompt workers to save more on their own for their retirements. Specifically, the Social Security Administration doesn't want workers to compare their future benefit with their current earnings and think they will have a high replacement rate in retirement, ignoring, in their thought process, the fact that if the economy's average wages continue to rise, their earnings will likely also rise, leaving them with a higher level of earnings before retirement and a lower replacement rate, when the denominator of the replacement rate is not their current earnings but their pre-retirement earnings.

    Since the AARP calculator is taking in, in this case, a Social Security-produced bogus PIA estimate, the question is whether the underlying code is fixing the problem with the PIA so entered. From running the program, it's clearly not because the annual benefit it shows at full retirement age should be larger than 12 times what you enter. It's actually less. For married spouses, where one partner's optimal strategy depends on what the other does and vice versa, starting off with PIAs that are too differentially biased can easily undermine the calculation of what's best for the couple to jointly do.

    Now you might say, "Well, let me mosey on over to the local Social Security office and ask them for my PIA, but make sure they adjust for future economy-wide real wag growth and inflation."

    This is a step in the right direction, but beware. If you ask for your retirement benefit, the good folks at Social Security may quote your benefit in dollars of the year you will reach full retirement. That could screw up the AARP calculator very nicely. Or they may quote you not your full retirement benefit, but your reduced retirement benefit if you start talking to them about taking benefits early. This too will screw up the AARP calculator since it's looking for the full retirement benefit. Then there's the issue of your Medicare Part B premiums and automatic federal income tax withholdings. You may be given a "benefit amount" that's net of one or both of these things. Finally, if you are eligible for an excess spousal or an excess survivor benefit, it's just possible you'll be quoted a benefit amount that's inclusive of these auxiliary benefits, which will also wreak havoc on your use of AARP's calculator.

    Jason Zafrin -- New Haven, Conn.: My wife and I were together for 15 years before she lost her battle with cancer. We were never married legally but have five children together. I was told that since we were never married legally, I am not entitled to any benefits. Is there anything I can do? We lived in New York the first eight years together then moved to Florida in 2000 until she got sick in 2008 and moved back.

    Larry Kotlikoff: I very sorry for your loss and for having to tell you that there is nothing you can do to receive survivor benefits on your wife's earnings record because you weren't legally married. If any of the children are under age 18 (or 19 if still in high school) or if any became disabled prior to age 22, those children would be able to collect survivor benefits based on your deceased wife's earnings record.

    Eva Adams -- Miramar, Fla.: If a resident alien moves back to her own country, can she get Social Security checks deposited in her native country? I heard that the Social Security Administration withholds 25 percent in that case. I have not worked for many years and don't plan to start now. I am 78 years old. How can I convince them of that and avoid the withholding?

    Larry Kotlikoff:I asked Jerry Lutz, a former Social Security technical expert, to weigh in on your question. He wrote the following: "Payments outside the U.S., as well as the Alien Tax Withholding, depend on the country of residence and the various totalization agreements the U.S. has with other countries. SSA has a good pamphlet on this topic."

    And, Eva, I don't know why our country calls people born in other countries "aliens." I always thought aliens were from outer space. But if you're an alien, I'm one too. Well, a third generational alien, anyway. Paul, from personal knowledge, is definitely from another planet.

    Rebecca Slade -- Gosport, Ind.: I have been married two years. My husband receives Social Security disability. I am 54 and still working full time. Am I eligible for spousal benefits? Also I have a minor son whose father is deceased, and he receives benefits from that account. Is he still eligible for benefits from his stepfather?

    Larry Kotlikoff: You need to be 62 to receive spousal benefits. It would actually be excess spousal benefits if you take your spousal benefit before full retirement age. To get full spousal benefits starting at full retirement age, read my column about Social Security benefits for the disabled.

    Former Social Security technical expert Jerry Lutz (Amen for Jerry!) informs me:

    There are potential benefits for stepchildren who are not adopted. However, they need to prove that they have been receiving at least one half of their support from the stepparent in order to be eligible. That's a really involved calculation because you must consider multiple possible periods of support. Here's an example of the math involved:

    Step-father's annual income = $50,000 Mother's income = $19,000 Child's SS income = $6,000 (i.e. $500 per month)

    In this example, the total family income is $75,000, or $25,000 per person. The stepfather would be assumed to be providing $19,000 to the child's support, which is more than half of the total. So the child would meet the dependency requirement and qualify as a stepchild. If the child is under age 16 or disabled, the mother could potentially be eligible under the child-in-care provision. However, she would be subject to the annual earnings test. The child would only receive benefits from the stepfather's account if they were higher than the benefits he receives from his deceased father's account.

    MB -- Fairfield, Ill.: My husband is 71 and I am 60. My husband retired from teaching school in 2000 and began receiving a pension, which now amounts to about $25,000 a year. He also worked in schools for which Social Security taxes were collected on his income, and he receives a reduced Social Security benefit of about $500 a month. He did not apply for Social Security until he reached age 70 (he continued to work as an adjunct teacher paid on a per class basis and was not paid more than his pension in any year of his retirement.)

    We were never advised of the "file and suspend rule." My husband's pension is set up so that I will receive it after he dies. I have 40 quarters of qualifying income for Social Security, though my earnings were never high. I do not have 30 years of "substantive earnings" (re Government Pension Offset and/or Windfall Elimination Provision).

    I received an annual statement from Social Security stating that if I retired at age 62, I would collect $725 a month. If I waited until age 70, the amount would be $957 a month. Can I retire on my own benefit, either at age 66 or 70? Is my personal benefit affected by the GPO or WEP? Does it matter at what age I retire? Or will I not receive any Social Security at all?

    Larry Kotlikoff: I'm going to assume you did not work in uncovered employment -- in other words, that you worked in jobs for which Social Security taxes were deducted. So you won't get hit by the Government Pension Offset (GPO) with respect to your receiving either spousal or survivor benefits on your husband's work record. Also, the Windfall Elimination Provision (WEP) does not apply to the calculation of your own retirement benefit or to the spousal and survivor benefits your husband might be able to collect on your earnings record. This may all sound like good news, but it may mean little or nothing in terms of actual dollars.

    First, you still get hurt with respect to your spousal benefits because they are based on your husband's Primary Insurance Amount (his Social Security full retirement benefit), which is reduced due to the WEP.

    Fortunately, your survivor benefits are based not on the WEP-reduced PIA, but on the standard PIA.

    Second, if you take your spousal benefit before full retirement age, it will be calculated as your excess spousal benefit and may be very small or close to zero. Third, in applying for early spousal benefits, you'll be forced to apply for early retirement benefits. Hence, you'll get stuck with the $725 per month -- if, indeed, this is your age-62 reduced retirement benefit -- as your permanent retirement benefit. A better option may be for you to wait until full retirement age (66), apply just for your full spousal benefit, which will be half of your husband's full retirement benefit, and then, at 70, apply for your own retirement benefit.

    Finally, I want to point out that your husband will be subject to the GPO with respect to receiving spousal or survivor benefits based on your earnings record.

    This entry is cross-posted on the Rundown -- NewsHour's blog of news and insight. Follow @paulsolman

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    New research suggests that affluent Americans are more numerous than government data depict, encompassing 21 percent of working-age adults for at least a year by the time they turn 60. Photo by Craig Warga/Bloomberg via Getty Images

    WASHINGTON -- It's not just the wealthiest 1 percent.

    Fully 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America's economy and politics. This little-known group may pose the biggest barrier to reducing the nation's income inequality.

    The growing numbers of the U.S. poor have been well documented, but survey data provided to The Associated Press detail the flip side of the record income gap -- the rise of the "new rich."

    Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners.

    Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20 percent of earners.

    Companies increasingly are marketing to this rising demographic, fueling a surge of "mass luxury" products and services from premium Starbucks coffee and organic groceries to concierge medicine and VIP lanes at airports. Political parties are taking a renewed look at the up-for-grabs group, once solidly Republican.

    They're not the traditional rich.

    In a country where poverty is at a record high, today's new rich are notable for their sense of economic fragility. They've reached the top 2 percent, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.

    Last week, President Barack Obama asserted that growing inequality is "the defining challenge of our time," signaling that it will be a major theme for Democrats in next year's elections.

    New research suggests that affluent Americans are more numerous than government data depict, encompassing 21 percent of working-age adults for at least a year by the time they turn 60. That proportion has more than doubled since 1979.

    At the same time, an increasing polarization of low-wage work and high-skill jobs has left middle-income careers depleted.

    "For many in this group, the American dream is not dead. They have reached affluence for parts of their lives and see it as very attainable, even if the dream has become more elusive for everyone else," says Mark Rank, a professor at Washington University in St. Louis, who calculated numbers on the affluent for a forthcoming book, "Chasing the American Dream," to be published by the Oxford University Press.

    As the fastest-growing group based on take-home pay, the new rich tend to enjoy better schools, employment and gated communities, making it easier to pass on their privilege to their children.

    Their success has implications for politics and policy.

    The group is more liberal than lower-income groups on issues such as abortion and gay marriage, according to an analysis of General Social Survey data by the AP-NORC Center for Public Affairs Research. But when it comes to money, their views aren't so open. They're wary of any government role in closing the income gap.

    In Gallup polling in October, 60 percent of people making $90,000 or more said average Americans already had "plenty of opportunity" to get ahead. Among those making less than $48,000, the share was 48 percent.

    "In this country, you don't get anywhere without working hard," said James Lott, 28, a pharmacist in Renton, Wash., who adds to his six-figure salary by day-trading stocks. The son of Nigerian immigrants, Lott says he was able to get ahead by earning an advanced pharmacy degree. He makes nearly $200,000 a year.

    After growing up on food stamps, Lott now splurges occasionally on nicer restaurants, Hugo Boss shoes and extended vacations to New Orleans, Atlanta and parts of Latin America. He believes government should play a role in helping the disadvantaged. But he says the poor should be encouraged to support themselves, explaining that his single mother rose out of hardship by starting a day-care business in their home.

    "I definitely don't see myself as rich," says Lott, who is saving to purchase a downtown luxury condominium. That will be the case, he says, "the day I don't have to go to work every single day."

    Meet the 'new rich'

    Sometimes referred to by marketers as the "mass affluent," the new rich make up roughly 25 million U.S. households and account for nearly 40 percent of total U.S. consumer spending.

    While paychecks shrank for most Americans after the 2007-2009 recession, theirs held steady or edged higher. In 2012, the top 20 percent of U.S. households took home a record 51 percent of the nation's income. The median income of this group is more than $150,000.

    Once concentrated in the old-money enclaves of the Northeast, the new rich are now spread across the U.S., mostly in bigger cities and their suburbs. They include Washington, D.C.; Boston, Los Angeles, New York, San Francisco and Seattle. By race, whites are three times more likely to reach affluence than nonwhites.

    Paul F. Nunes, managing director at Accenture's Institute for High Performance and Research, calls this group "the new power brokers of consumption." Because they spend just 60 percent of their before-tax income, often setting the rest aside for retirement or investing, he says their capacity to spend more will be important to a U.S. economic recovery.

    In Miami, developers are betting on a growing luxury market, building higher-end malls featuring Cartier, Armani and Louis Vuitton and hoping to expand on South Florida's Bal Harbour, a favored hideaway of the rich.

    "It's not that I don't have money. It's more like I don't have time," said Deborah Sponder, 57, walking her dog Ava recently along Miami's blossoming Design District. She was headed to one of her two art galleries - this one between the Emilio Pucci and Cartier stores and close to the Louis Vuitton and Hermes storefronts.

    But Sponder says she doesn't consider her income of $250,000 as upper class, noting that she is paying college tuition for her three children. "Between rent, schooling and everything -- it comes in and goes out."

    Economists say the group's influence will only grow as middle-class families below them struggle. Corporate profits and the stock market are hitting records while the median household income of $51,000 is at its lowest since 1995. That's a boon for upper-income people who are more likely to invest in stocks.

    At the same time, some 54 percent of working-age Americans will experience near-poverty for portions of their lives, hurt by globalization and the loss of well-paying manufacturing jobs.

    Political fault lines

    Both Democrats and Republicans are awakening to the political realities presented by this new demographic bubble.

    Traditionally Republican, the group makes up more than 1 in 4 voters and is now more politically divided, better educated and less white and male than in the past, according to Election Day exit polls dating to the 1970s.

    Sixty-nine percent of upper-income voters backed Republican Ronald Reagan and his supply-side economics of tax cuts in 1984. By 2008, Democrat Barack Obama had split their vote evenly, 49-49.

    In 2012, Obama lost the group, with 54 percent backing Republican Mitt Romney. Still, Obama's performance among higher-income voters exceeded nearly every Democrat before him.

    Some Democratic analysts have urged the party to tread more lightly on issues of income inequality, even after the recent election of New York City Mayor Bill de Blasio, who made the issue his top campaign priority.

    In recent weeks, media attention has focused on growing liberal enthusiasm for Sen. Elizabeth Warren, D-Mass., whose push to hold banks and Wall Street accountable could stoke Occupy Wall Street-style populist anger against the rich.

    "For the Democrats' part, traditional economic populism is poorly suited for affluent professionals," says Alan Abramowitz, an Emory University professor who specializes in political polarization.

    The new rich includes Robert Kane, 39, of Colorado Springs, Colo.

    A former stock broker who once owned three houses and voted steadfastly Republican, Kane says he was humbled after the 2008 financial meltdown, which he says exposed Wall Street's excesses. Now a senior vice president for a private equity firm specializing in the marijuana business, Kane says he's concerned about upward mobility for the poor and calls wealthy politicians such as Romney "out of touch."

    But Kane, now a registered independent, draws the line when it comes to higher taxes.

    "A dollar is best in your hand rather than the government's," he says.

    Associated Press reporter Hope Yen wrote this story. AP Director of Polling Jennifer Agiesta, News Survey Specialist Dennis Junius, and writers Suzette Laboy in Miami and Kristen Wyatt in Denver contributed to this report.

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    INFOGRAPHIC: Details on the commemoration and funeral ceremonies for Nelson Mandela pic.twitter.com/f5UcavMSew

    — Agence France-Presse (@AFP) December 9, 2013

    The South African Broadcasting Corporation will live stream Nelson Mandela's memorial in the player below at 4 a.m. EST Tuesday, Dec. 10.

    Read more:

    Activist and peacemaker Nelson Mandela dead at 95

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    Photo by Bill Pugliano/Getty Images

    The United States sold the last shares of its General Motors stocks, nearly five years after bailing out the Detroit automaker from near-liquidation to the tune of around $49.5 billion.

    The bailout program, which began under George W. Bush's presidency and was continued by President Barack Obama, saw the U.S. government take an ownership stake in G.M. The government lost a reported $10.5 billion on the bailout.

    Despite the loss, The Center for Automotive Research released a new study that says bailing out General Motors and competitor Chrysler saved approximately 2.631 million jobs in 2009 and 1.519 million jobs in 2010 to avoid the loss of "$105 billion in lost taxes and other payments," the Detroit-Free Press reports.

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    Watch Video | Listen to the Audio

    GWEN IFILL: The deal creating the world's largest airline became official today. American Airlines emerged from bankruptcy to join with U.S. Airways. The new carrier will operate under the American Airlines name. The merger leaves four airlines controlling more than 80 percent of the American travel market. Passengers won't see immediate changes to reservations or frequent flyer programs, and it remains unclear if the deal will mean higher fares.

    Eight of the most prominent U.S. tech companies, including Apple, Google and Facebook, are calling for tighter controls on government surveillance. They sent an open letter to President Obama today, in the wake of revelations that the government collects personal data from their networks. We will hear from Microsoft on what's driving the companies' concerns right after the news summary.

    An icy, snowy mix made its way into New England today after leaving a messy trail in its wake. Ice brought down power lines from Texas to Tennessee to Virginia, and commuters faced hazardous driving this morning. Air travel was also a big problem, with another 1,600 flights canceled today. People were stranded all over the country.

    MAN: Last night, the lines for customer service, you couldn't see the end of them. And they were handing out pieces of paper saying, here, call this number. You call the number, all circuits busy. It was just a nightmare.

    GWEN IFILL: In all, there have been 6,100 flights canceled nationwide since Saturday and hundreds more delayed.

    Eight Northeast and Mid-Atlantic states asked today for new federal curbs on air pollution created by their neighbors. They want nine Southern and Midwestern states to regulate power plant emissions that are carried northeast by prevailing winds. The Supreme Court hears arguments tomorrow in a related case involving 28 states.

    South Africa made ready today for a mass memorial service honoring Nelson Mandela. At least 100,000 people, including nearly 100 world leaders, are expected to attend tomorrow. President Obama and Mrs. Obama left Washington this morning, joined on Air Force One by former President George W. Bush and his wife. Former Presidents Clinton and Carter will also attend.

    There's been more unrest in the Central African Republic, as gunmen refuse to give up their weapons to French troops. The French patrolled the capital city today, trying to disarm rival Muslim and Christian fighters who killed 400 people over the weekend. We will have a report from the CAR later in the program.

    The prime minister of Thailand called for new elections today, in the face of protests against her rule. The opposition has accused her of corruption, insisting again she must go.

    John Sparks of independent television news reports from Bangkok.

    JOHN SPARKS: Protest leaders called it the day of reckoning, a time to do or die. And their call was answered on the streets of Bangkok by more than 150,000 people. And each one seemed determined to topple the Thai government.

    MAN (through interpreter): We have got to get them out. We're playing our last card.

    JOHN SPARKS: They have been at it for weeks, a rolling protest against the government of Prime Minister Yingluck Shinawatra. With demonstrators converging on government headquarters this morning, the Thai prime minister made a surprise announcement. She dissolved the government.

    Ms. Yingluck, who sounded shaken, said, "Let the people decide who governs next."

    Back on the streets, the prime minister's big declaration had little impact. Many here don't want elections. They want something completely different. The leader of these protests wasn't taking questions this morning. He was surrounded by a phalanx of bodyguards. His name is Suthep Thaugsuban, and the silver-haired politician wants to replace the government with a non-elected body of experts.

    Later, Mr. Suthep held court in front of a massive crowd, this his daily address. And he said they would need three extra days to take power. But the protesters have a problem. They don't represent the majority in Thailand. If the elections take place, Yingluck will almost certainly win.

    There seems no easy resolution to all this. And the battle for power will go on.

    GWEN IFILL: In Ukraine, there were signs of a possible crackdown one day after hundreds of thousands of people protested against the government. Riot troops stormed an opposition party office in Kiev today, and police also tore down banners and tents blocking city offices. We will talk to a correspondent on the ground in Ukraine later in the program.

    North Korean leader Kim Jong-un has expelled the country's second most powerful figure, his uncle, from the ruling circle. State TV broadcast images Sunday that showed uniformed guards taking 67-year-old Jang Song Thaek into custody. The unusually public purge happened at a party meeting. Jang is charged with corruption, womanizing and abusing alcohol and drugs.

    Eighteen current and former Los Angeles sheriff's deputies face federal charges in a civil rights and corruption case. The announcement today alleged beatings of inmates and jail visitors, unjustified detentions and conspiracy to obstruct a federal investigation. The probe focuses on the county jail system, the nation's largest.

    Princeton University began immunizing nearly 6,000 students today against type B meningitis. The outbreak was deemed so serious that the Food and Drug Administration authorized use of a vaccine not yet licensed in the U.S. Since March, eight people at Princeton have been stricken by the potentially fatal disease. It's spread through kissing, coughing and other contact.

    The federal bailout of General Motors is officially over. The Treasury sold its remaining shares in the automaker today. In the end, the net cost to taxpayers was $10.5 billion. And on Wall Street today, the Dow Jones industrial average gained five points to close at 16,025. The Nasdaq rose six points to close at 4,068.




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