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os december the 13th. >> chairman ryan knows i'm not going to vote for his budget. i know he's not going to vote for mine. we're going to find the common goals that we can both vote on and that's our goal. >> our goal is to get the debt under control and grow the economy and get people back to work. >> the conference comes in the wake of a 16 day government shutdown and a debt default close-call. the 29 member house and senate group includes a wide range of recent and democrat caucus. first round table open october the 30th. but voter skepticism remains

high the gesture will amount to anything. 19% of americans say they trust washington to do the right thing most of the time. that's in comparison to 80% of americans who say they largely don't trust the government to do anything right. congressional analysts are wryly calling the conference a reunion, facing the ticcing time bomb the 2011 group was tasked with writing a bipartisan plan to slash the nation's deficits by $1.5 trillion. >> our national debt is our biggest national security thre threat. that is why we all stand here often this poad -- on this podium. we must do something to start paying down the debt. >> led at the time by senator murray and jed henserling, it

led to deep sequestration cuts months later. this year's budget conference is expected to discuss spending cuts, tax reforms and the future of entitlements. as republicans rally behind represent ryan' ryan's potentiao reach across the gop potential divide, all eyes will be on democratic divisions. republicans are expected to call for replacement cuts in programs like social security, those cuts are acceptable to centrists but will never fly with progressives. setting the stage for adramatic battle in the coming months. >> president obama has been searching for a grand bargain, a long range plan on taxes and spending that would by

definition tackle social security and medicare. we want to look at the short term and the budget negotiations that start next week. joining us is zack carter. thanks for being part of our program. where do things stand now and what needs to get done in mid december? >> the if democrats and republicans don't go to agreement in mid december, the government will run down once again. the government has been running on these informal continuing resolutions for some years now. we actually haven't had a real formal budget. for the democrats if this is the best chance they have for getting away with the sequester, or get the deal to cut medicare or social which they have been gunning for for several years now. >> the leader is senator patty

measurey, give up the social insurance spending? >> there's been a lot of discussion between patty murray and paul ryan about how they want to cut spending, they're being nice to each other, the aggressive campaigning has been taken behind the scenes. long term entitlement cuts for short term spending increases and you've seen harry reid say to us this looks like you're asking you to increase defense spending to lift the sequester. that doesn't sound like a good deal for us. we'll see how much twar actual freedom they have to cut a deal. >> fair to say the best bargain would be the democrats, given michigan mcconnell said he doesn't want to go through

another threat of shutdown. they don't have to give that much in order to avoid that cries you again. >> if you are michigan mcconnell, the government could shut down, after this budget deal potentially falls through. he says he thinks this deal will probably fall through. but then a cr battle where the government will shut down because you want to cut social and medicare by insisting you don't do that. that doesn't seem like a viable position to put themselves through. not just what happened at the beginning of october. >> it seems like they're kicking this over to the senate democrats to lead the negotiations and the president is simply taking a wait-and-see approach to see what they come up with. >> i think the president is kind of the wild card. a lot of unpopular stuff with democrats like changing the inflation index, he's low

pressure endorsed those things, he's pushed those again and again to the chagrin of the democrats in the house and senate. if he said let's really do something it would be difficult for senate leaders to hold the line so far. basically, he's said let's let this play down. the democrats did very good, it didn't go well for republicans. i don't know why president obama would want to deal with this, especially with the affordable care act. >> whether we come back we'll return to the american social safety net and the coming fight within the democratic party. this is inside story. >> how old are you? >> nine. >> how old were you when you first started working out here? >> seven. >> fault lines how children are

hired by us agriculture to help put food on america's tables. >> in any other industry kids need to be 16 years old to be able to work. you don't see any of that in agriculture. >> they don't ask, "is she 12?". they just want their job done. >> how many of you get up before 5 o'clock in the morning?

>> welcome back to inside story and our discussion about the divide among democrats to america's social insurance programs. zack carter, senior economy reporter for the hufgto huffingn

post. in part because of the overall budget picture the population's getting older, there's a fear about solvency. but as far as budgets and economies, wouldn't the best way to solve this be to grow the economy as opposed to making any cuts? >> surely, i think growing the economy should be the first thing on lawmakers' minds, to reduce the debt as well. the issue is growth alone is not going to solve our problems. we would need 4% real growth for about 30 years which has never happened in our history. we are going oneed some reforms. we have an aging population and an inefficient tax codes. revenues that are failing to keep up. at some point we are going to need to make changes if we are going to have a sustainable fiscal picture for my lifetime. >> the solution, at least some

progressives are suggesting, instead of reducing the amount people get, let's raise the cap. the first $113,000 tax for social security, you solve your solvency problem. >> that would solve about three quarters of the problem. you could raise the rate from 6.2 to 7.2%, that would more than solve the problem. still make provisions for inflation. it doesn't take into account seniors greater medical and housing expenses. cpe, the consumer price index, i think it's a great idea to raise the cap and increase the tax by one percentage point. that would secure the system for 75 years and still allow to you protect the bftsd from erosion. >> if you are raising taxes at all? >> i think there's sort of a few points in response there.

the first one being that the cpie that he mentions there is completely inaccurate. it has been the congressional budget office and the bureau of labor statistics, say it is completely inaccurate. it is an experimental index that doesn't actually measure the correct things. medical cost. >> maybe we should be doing more to sort of provide a wider safety net than we do currently. >> i think that's fair. i think one of the biggest problems in this country right now is a lack of retirement savings. but i do not think that is all social's fault. right now people retiring today, when they turn 80, they can expect a 20% benefit cut if nothing is done in social. because people are not saving enough for retirement. like your own 401(k), and whatever your individual retirement account is, you want money in your very safe bonds

but you don't want your entire saving in savings bonds. if we need to raise this 12 or 13%, then we can invest that and help folks save for retirement. contribute to the low income folks help save for their own retirement. >> how about we do it in a different way? >> we have a retirement security crisis right now. according to the retirement research in boston college, 58% of low wage americans don't have enough to retire. if you take into account the health care and long term health care in retirement that percentage raises to two-thirds. we have a major retirement income crisis. the amount of income that a typical household can replace in retirement, according to approximates, it is about 95% --

projections, we are projected to be able to replace about 59% of their average working income. and generation x folks like smiestlesmiestlesmyself,. >> no longer being middle class in retirement. i don't think that makes sense. >> the politics, zack, sen trises who feel like okay let's make some adjustments and progressives say no not at all, lift the cap if we do anything. who has got the better standing? you know republicans are going to want cuts. there you have the democratic party figuring out what it's going odo. >> i think now the progressives in the democratic party have the upper hand. it's going to be difficult to go into a shutdown scenario in

january. these are programs that old people don't really want to see cut and old people vote a lot. we have a mid term election coming up. it's very important for the president to his his base and come out -- hit his base and vote for that. raised in taxes not at all clear that republicans will be able to go along anyway. aren't all my beltway tech notictechnocrattechnocratic frit that anyway? >> there was a pew poll out in april said 55% pg support in maintaining social security and benefits. loren is it americans not wanting to look at the coming problem? >> i think that's it but social security and medicare provides opportunity to do something.

the minimum benefit for social security has completely eroded and is benefiting anyone now. has proposed increasing the minimum benefits so that anyone who works 30 years no matter what their wages were, they will at least get a benefit that's say 125% of the poverty level. so we're not leaving anyone who worked a full lifetime out in the cold. i think there's a lot of opportunities like that, they cut benefits mostly for high earners and make the program sustainable so i can retire on social security as well. >> it's one issue whether the program is sustainable. another if it should be related to benefits. the simpson bowles said we needed to cut social security and medicare benefits, the deficits have now shrin shrunk t simpson bowles wanted.

focus on the economy. >> we've enacted $2.5 trillion in deficit reduction. plus our depression has dragged on longer than we'd like, it's nice that our deficits haven't gone up as fast but i'd rather our economy recover and our interest costs go up a little bit faster. >> there's the issue of sociologist ventcy. there has to be something done or else social security will not pay out as seniors hope for. >> over the next 75 years you have about a 15% shortfall over 75 years. that's true, i agree with loren, the 401(k) system and the ira system have not been serving the majority of americans. only about the top third of americans get anything from 401(k)s in income. we've had 30 years to try this private account for retirement

and it maintenance work. as i was talking about today the current retirees get about 19% of their income as a percentage of previous income from pensions. that's projected to go down to 3% for people in my generation. >> you have to -- >> 401(k)s and iras are not going to make up the gap. >> you're suggesting we need to expand benefits. >> that's what i'm suggesting because it's the only part of the retirement income stool that's working. >> i don't know if that's going to fly. the possibility of expanding benefits, again when we come back we'll focus on medicare and also this idea should benefits be expanded? you're watching inside story.

>> still with us in studio. ben, zack, and loren. we're going to talk about medicare in just a second but just before the break, ben suggested increase benefits. good idea loren? >> i do -- i more think there is a need for private retirement reform or some sort of retirement form outside of social security. my main theme here is in your own retirement reform, i hope folks don't have all of their money in t bills. you want a diverse portfolio. >> isn't there a responsibility of the government to try to make this easier on people? when they try to find the difference between 401(k)s and other -- >> they are making the decision and it's not leaving everyone to make their own decisions and buy high, and sell low. this is a bigger reform. that's a big reform discussion

that's way beyond the scope of what we're talking about now. >> if you do increase benefits ben who is going to pay for it? >> first legality me respond to what loren was talking about. you can take a quarter of the trust fund and invest it in indexed stock fund. form are commissioner, why not do that, then you have the secure retirement but you also have some better returns. to expand benefits you simply have to scrap the cap. people pay particle taxes, on a certain cap.their income, you don't pay anymore that's a simple reform you could do it and that way everyone would pay the same payroll tax. >> that would work for social security but for payroll tax what is the solution for the medicare solvency problem that's coming? >> we focus on budget and programs as a whole are you talking about the income

security of seniors right? if you improve social security by expanding benefits so people have enough to live on that goes a long way towards solving the medicare problem. it's already controlling costs effectively. the affordable care act gives it institutional levers in order to do that. overall, we pay twice as much for health care as our european counterparts. >> loren since medicare has done a more effective job of controlling medical benefits? >> i think that medicare plays an important role in this discussion and i think our entire ahealth care system is very flawed and failing citizens to some degree. right now we have a completely uncoordinated health care system. that you know, try you have to manage your own health care. at 75 years old you have to be managing knowing which doctors which prescriptions you're

taking. that's a very hard task. we pay people for services. the word we pay people for service and therefore you get what you expect. there are more services provided. we need to change the way we pay for care,. >> and move towards efficiencies, saving money down the road. zack as far as the politics of all this for the democrats who are desperately trying to figure out how to protect soarkt and medicare -- social security and medicare, as the population gets older the demographics, the voting block becomes more powerful in protecting these entitlement programs? >> i think in the next couple of months democrats are if a bad spot for discussions. the website for the federal exchange isn't working. that actually risks gumming up the private insurance market for next year or so.

they are going to be back pedaling, they are not going to be expanding health care costs, very entrenched corporate interests, no one's going to be in the position to do that for the next few months i think. for republicans, republicans haven't been clear over the last several years where they stand for medical benefits. look they have been saying, president obama is going to cut your medicare benefits and they did really, really well in that in the 2010 elections. then they implemented the paul ryan budget which was to implement cuts in medicare in the next few years. i think if progressives in congress want to keep medicare from being cut they should do nothing and it seems likely that is what they will do. >> republicans even though they describe these as entitlements and they're philosophically opposed to doling out

provisions, regardless of the impact on the economy we have a specific governing view that the government should be doing less. >> there's nothing wrong with the government doing less? i don't understand the question. in general terms you can say that but we're talking about specific programs. social security shouldn't be viewed as a government program in a limited sense. from the middle ages, 18th, 19th century, when they need money out of disability or retirement they can take the money out. it doesn't have to do with government per se. the budget committee can't touch social security because it is off issue. i'd like to explain with a simple metaphor which is you have a household husband and wife in their 30s and the woman's mother lives with them, in her 50s. she puts 6.2% of her wages in a

picky bank, the younger couple says we need to reduce the amount of money you take out of your piggy bank, you -- we haven't managed our money well, we'll cut your benefits, in exchange of changing our finances. that's what the grand bargain is. it's a regressive tax on everyone in order to fill holes in a budget that's, fundamentally unethical and not the right thing to do. >> i think for all the reasons you just articulated and loren and zack, nothing is going to get done. i think democrats are going to put aside their divide over the social insurance programs, they'll kick this can down the road and try to deal with that later. ben, loren and zack, that's it for today, and for me david shuster, you can send us your

thoughts@aj inside story or to me@david shuster. thanks for watching. vo: visitors to london could be forgiven for thinking they are seeing a quintessentially british town. the imperial architecture. the iconic black taxis and red phone boxes. but behind these picture-postcard images, london is the one of the most multicultural capitals in the world. vo: more t