we will reduce some of the major stories over the past 12 -- review some of the major stories over the past 12 months. some are happy, some are sad, but >> china has become economically and politically confident. that holds the future to this nation. but the confidence should start from the bottom up. that is why the chinese leadership got on line to get the pulse of the nation. >> chinese people have a lot on their minds. housing, bahia inflation, employment, here. -- healthcare, food safety, and much more. these concern the top leaders, and just before the people's congress met in march, premier

wen jiabou when online to find out what the people think. >> i may not answer the questions completely or solve the problems of everybody, but it gives me a chance to get help from the of people. >> the web site of china's largest news agency set up a chat in this room. did the premier started by telling them he brought with them a whole heart. he also seems to be unrehearsed. the answers were all in his mind. he picked questions to fit public concerns. >> most were complaints and suggestions. the west has got 13 million hits.

our recent survey indicates -- the web cast doubt 13 million hits. many of them go online to voice their views. >> when they formulated a plan, they are more and more willing to listen to what we have to say. they then discuss suggestions to make changes to the draft. there have been many such examples. >> the premier's online exchange has been an example to lower- level expand balls -- officials. almost one-half use the internet occasionally. >> on-line communication between the government and internet users is providing a convenient channel for decision makers to hear people's voices. on the other hand, it shows

people growing sense of participation in national and regional development. the decision makers in there for use the people's wisdom to formulate policies in a more scientific way to reduce costs and increase in efficiency -- increase efficiency. >> they organize many on-line chats on hot topics. this is the lead transcriber of the on-line chat. >> the premier promised he would come back next year. we even link our pinkies to seal the deal. >> that means the dialogue is far from over. more and more chinese officials are using the internet to explain policies to an increasingly vocal in demanding public. it is part of broader efforts by

the government to be more responsive and accessible. this interaction means better inclusion of people's voices. >> joining us for this program is the vice chairman of the china institute for innovation and development strategies. . mu -- mr. wu, chinese leaders acknowledge that they get online to hear people's grievances. how much you think it affects their decision making and was marching and i think it affects a lot the way that chinese officials govern the chinese people. it is also the people -- the way people get information. people communicate with one another.

certainly the way the chinese government gets information from the people is much more direct. i think in two ways. from people -- they get the information much more easily. on the other side, the people also getting information from the government much more easily. it changes the way that the government works. >> many are wondering which path china will pursue in the coming decade? will we be economically better off? will we have politil reform? >> these are very important. china has allowed the feudal regime more than 2000 years. i think it is opening up to the outside world and we adopt some

many good relations, and that is democracy. democracy is china's gold. it will make china populous and a civilized country. democracy -- we need more democracy within the chinese party. then democracy will make more headway in our part of china. >> thank you.

>> this is where 115 men were dug out alive in march. they were among the 153 miners trapped underground. the remaining 38 did not make it. the mining industry is still a deadly business. that is why the rescue astonished the world and moved so many. and from here, the entire industry has started to reduce -- a review of regulations to get things right.

>> this is the rescue that capture the heart of a nation. >> surviving eight days and nights, drinking filthy water, 115 miners person. during the darkest moments of their lives. they held on until rescuers finally arrived. >> he was among the first group of miners found on april 5. eight months later, we meet him again in his home village. there was the thought of his family did help him get through the grueling ordeal.

>> he may look like many other guys in the world china. but by talking to him, we learn that the trauma entered in march has taken a heavy toll. every now and then, his nightmares of being trapped in a cave even in the daytime is often the pressing him with near-debt illusions. chronic pains remain with him. >> 500 kilometers away, the mine responsible for the worst nightmare of his life remains largely sealed off. and evacuation system is the only item under construction. nine people including a project manager and the chief engineer were arrested for negligence of

duty. after the massive rescue operation, they have put in place stricter regulations. and accountability system has been set up this is it you are the owner of a mind, if you have to go down a shaft with your minor or you will be severely punished. >> the owner of the facility says that he has ordered all staff members to study the new regulations over the past eight months. the only recourse is the way for approval from state authorities to reopen the site. >> we fired those responsible for the incident in march. we ordered everyone to study new safety rules. we tried to identify potential safety loopholes. we did a lot of soul-searching in the last few months. >> many believed the soul- searching process throughout the mining industry could not be more timely. in spite of significant safety

improvements in recent years, china's coal mines rank among the most dangerous in the world. this man has been without a job for eight months and he doesn't know if he will ever work again , and his constant pain does not allow him to perform able -- manual labor and longer for just 29 years old, is not sure what the rest of the life holds in store. there's one thing he is sure -- he will never set foot in another coal mine. >> on that topic, we're joined by my colleague. 115 men were saved, what is behind the rescue of the operation was a margin we're impressed by the perseverance of the minors. they were under brown for eight nights and 8 days. they went through to survive the

blast to the shaft. to stop their starvation, they ate tree bark and eventually coal. in the sense, the miners save themselves. on the other hand, the rescue operation was well-organized. on top of the large number of rescuers, we have to wait for winter about could talk directly to authorities. -- for whinge about -- when about -- wen jiabou could have directly to authorities. this was a well coordinated rescue. you have missed -- visited many of the rescue operations. what you think of the relief efforts and the response system here in china? >> oftentimes people frown upon

the fact that china is a top- down society where major decisions are made by the inferior executing orders from the superior. but this is effective in a disaster relief situation. it was also the case in the earthquake in march. it was the case in the mud slide in august. it was also the case in numerous flooding across chinese provinces this summer. all these disasters had the chinese media. we have all relate -- all the access to these sites, interviewing the officials as well. it would be fair to say that in the past years, from the earthquake until now, china's emergency response systemas come a long way. >> thank you. china has seen more than its

fair share of natural disasters. an earthquake in april, and it change the lives of residents there forever. >> hello. this april, it was hit by two strong earthquakes. thousands were killed and even more people left homeless. after eight months, i contacted the site to see what the current situation of their lives are. this man is running a small shabby grocery store to earn a living after the earthquake. her nine year-old daughter is on winter vacation and helps her mother takes care of business. it is cold here, and she wants a real home. she does not want to recall the earthquake and she never mentions her husband. she just says her priorities is to raise her three daughters alone.

in this whether, coal is expensive and so was cow dung. she does everything she can to make the room warmer. temperatures here can reach -20 degrees celsius. she worries that the kids cannot handle the cold. this winter is tough for the thousands living on this ravaged land. but their support for them to get through. they believe that government can rebuild their homes and keep them safe from other disasters. this is the largest coal mounted -- collection of serbs and the world. the temple was damaged in the earthquake's a say because the believers never collapse. every day thousands of worshipers visited this historic

site. circling around and praying to god. >> the government has allocated the money to repair. the work can be finished in two years. then it will be even bigger. >> the like of the local peasants changed dramatically after the earthquake. ♪ they say the only thing they have now is hope. >> i really think the government helping us recover from the disaster. next year we can move into new houses. >> although the reconstruction

is temporarily halted, the market has sprung up beside the rubble and debris. commodities are available, including meat, fruit, vegetables, and even birthday cake. local residents believe their future is bright, and this is the first half. -- the first step.

>> ifhis cannot sustain- stanford change in china, nothing can this is the largest city in china. a center of finae and ideas. in the 2008 beijing is olympics, the world expos' starting here is conant trauma. packed houses and a massive impact, and one message above all -- china will concentrate on innovation. >> this was the hottest

destination in china. countries around the world presented their cultural identities. most of the visitors at a chance to visit all these places, but the world came to shanghai. it received 50,000 visitors every day. it began hundreds of miles away where she worked as the head of a school record torture. for her and the team, the design took time. >> visitors say yet like an official at, all born, or even the table. the china pavilion is designed to be a permanent structure. it is elevated for mark public space and easily integrates with the environment. >> it points toward a futuristic

lifestyle. the largest application of solar panels to generate electricity, 30% less energy. when towers and hybrid cars, these low carbon technologies will go clean. they will shape the future of chinese cities. >> one of the lasting legacies of the expo will follow carbon technologies displayed through in inside the pavilion. the experts showed if we can do when we think about living in cities and creating places people want to live. you are money isn't sustainable living as at the core of these events. for many local people, the most tangible legacy will be the two decades of infrastructure investment. new domestic airport was opened.

shanghai is seen as a growing city, a city that is transformed itself. >> people say that the expo has pushed for shanghai's modernization by 10 years. the infrastructure upgrade and improve city environment is going to benef everyone who visits the city. to and the expo has changed the lives of working shanghai as well. faces up -- they are passing on the experience to their students. some politicians will say that others will be dismantled in the months ahead. but the main buildings of the world expo will remain. it will become the most treasured assets. the physical and spiritual legacy it leaves behind will encourage people to carry on and

create an even brighter future and the post-expo era. >> on that topic, we're joined by dr. kohn. how much as it change shanghai and china? >> one could always look at creativity, technology, as improving specific things. all of that was wonderful. but even beyond that, if we look at the grand overview ofxpo, we have two emerging things that come toghe the first ifocused on cities, on bringing the world's best technology to cities, and the second is the emergence of china. so for the first, the whole world's creativity's comes together to give china on chinese sold the best way of thinking about cities and new

technologies, and the second is that these countries have recognized that china is a merchant in the world as one of the great powers, and one of the great responsible powers, because expos showed that indeed the peace and prosperity of the 21st century will be to a large degree depended upon china and china's continuing emergence as a great and responsible country. this brings burden as well as benefit to china. china now has responsibility to do its share of the world in many different spheres. expo 2010 shanghai was the beginning of china's contribution to the world, as well as the world's contribution to china. that is a great legacy.

>> the central leadership takes this into account. this year, a new communist official took the helm of the western region. he came with a new set of policies to set the course of

the western region for years to come. >> traditional architecture and a simple life of the pillars of this province is culture. now all the sprawl of cities embracing progress in moving forward into is brand new era. it does happen here with great changes. it has become a pearl in western china with an impressive past and bright future. >> much of this has been driven by range of government policies drafted in the central conference in may. it was nominated as the newest economic development zone. it was given stay level approval has was china's first economic development zone. the people originally took this seriously. but it is a key part of the next

five-year plan. the local people are making their plans by reaping the benefits of the transformation. this business owner tell me about his plans. >> it does so many opportunities now. they're more tourists visiting here. i am planning to open two more. >> previously tourist would seldom visit in winter. this year has been different. no one is more aware of this growth in visitors could the secretary general of the tourism office. >> this is resulted in hotels, too. the number of tourists in 2010 increased 8% year to year, while local income was up 40% over the same period.

council hassiness in the upsurge. >> it that involved and had increased 25 fold over the past few years, it is exceeded everyone's expectations. she added that it is boosting this benefit from preferential trade events and policies. despite the city's rapid makeover as an economic hub, there are shortcomings that still need to be addressed. did the big problem is transportation policy, not good for this kind of country, but the people do not have no heavy use these policies. >> action must be taken in the short-term for its rise from its economic infancy.

that would pull trade in business from neighboring countries. this means the new frontier. it is dealing with its o ecomic delopment known -- zone. if you can take a bandage of the government's support, there's no telling how much can be added. >> you may wonder what is behind china's fast economic growth. 10% annually, the most vibrant work force in the world. this is the tiny part of their life -- the chinese worker, hundreds of millions of their own, willing to give their all. and to provide better pay and strong protection has been a challenge for the country.

>> up fatal suicide. many junk to their debt in the span of just a few months. of the company plans they are not a sweat shop, many people blame the high intensity of the work. whats like that foxcamm like? we talk to one worker used to work there. she told us that that job was a tiny part of a mobile phone 500200 out -- 502 and p thousand times a day. -- i can understand the pressure. they're really depressed personality. the work may be tougher for them. to invest spate of suicides sparked some workers into the spotlight. people are worried about that working conditions, their lives,

and their dreams. china's manufacturing workers powered this economic growth. [unintelligible] things are changing. the new generation of manufacturing works as a living standards improving. they are demanding the right to barter openly. after the spate of suicides, the company offered 30% salary increases to its workers, the biggest ever. the company is also offering aid for those who needed. one person still working at foxcamm said that things improved after of the wage increase. one of the biggest electronics maker, less than 100 kilometers from a major city. she earns more than 200 yuan

ath. mon now shere r shated room with helatives. e orking on this assbly line in china. e says her life is happy and she has hope. suspensor spare time learning graphic design in hopes of getting a more sophisticated, better paying job in the future. she told us her plan is to save enough money and then go back to her home town to maybe start her own business sunday. >> my goal is to save 100,000 yuan. i have about a quarter of that. i hope i can make it in the future. >> it is never been more evident that low-cost labor is coming to an end. increasingly costs in china is

in the manufacturing industry. the changing chinese work force is going to be a part of the chinese economic transformation in the years to come. >> earlier in november, abc news covered the country and its economy. now we're joined by an abc news correspondent from the york. >> thank you for having me. >> your network has broadcast a series of reports on china. what difference has it made on them american understanding of this country and its people? >> as you know, i traveled to china with our anchorwoman, diane sawyer, a useless it's here at this desk. one of the things that we took with us in our audience likely will remember is how similar we are. when we talk to some many chinese families, particularly the parents to work as those ctories -- chaell from

shanghai all t w dowsouth -- they just want a better future for their children. ma of them leave their children to be raised by their grandparents as they work hard in the factories to make the wages. they said much of that money back home so that the child has a better future, a better education further down the rd. the american audience learn from that that that is a very simar to dream to what we call ith country the american dream. >> both economies face challenges. let's ta aut employment. the chinese were aboutheir jobs just as americans do. as they work longer hours and they're earning much less, what you make of this? >> i think that was something that was very telling. the factory workers in china make lower wages than factory workers would generally make here in the united states. that has been a huge concern here in america. factory jobs back, if theirwn

factory workers overseas making less. it is more competiti for companies t set up their backers and hire workers if they can pay them less in china. that is the fear, the argument that has been made here. but you make an iortant point -- one of that is that we learned is that the chinese are concerned about their job just like americans are. we're dealing withnempymt near 10% and has been for qte some time w. i was on thetree and beijing and i will not forget the woman that i talked to who it is, of a job interview. she says she survived a first interview but you have to go back for the set at one and she hoped that we would wish her well. we did. that's what we come across when we go out in america an interview families about their job search. they are hoping for the same kind of well wishes as they look for work here in this country. again, instead of pointing out the stark differences, we were able to find similarities between workers in china and here in america, who just won a good paying job and a good future for their family.

>> there is no economies that are closer than the chinese and the american. on one side, the american consumer by the low-cost chinese products, but some of the american jobs get shipped to china. what is the feeling ofhe americans about the chinese economy? >> that is the great paradox. it is so iortant to point that out. a lot of americans recognize that people can walk in and buy goods that are a lot cheaper here because they are made in the factories in china. a lower wages for workers, a cost less to produce these products, they are able to buy them for much cheaper price here in america. on the other hand, as you pointed out earlier, that sets up a competition for jobs in these factors. the jobs are over in china. some of them have left this country for china. that set ups and in balance in the mind of many american workers who said that we can get cheaper goods but what we would rather have the jobs back in

this country. it is a bit of a push-pull. our country is very concerned about jobs. that is the number-one issue jewel era when u.s. about americans and our relationship with china -- how we strike that balance of a straight -- of a great relationship keep some of those jobs here in america? >> thank you for your report from new york. >> thank you for inviting us to china. >> china and diary -- top-10 memories of the year. policies, tragedies, and spectacles. told by people at the heart of the stories. china diary, a review and reflection of 2010, only on cctv news. >> there is some new thinking on china forum policy. some say china has become it reflects the times.

chinese diplomats say that china will remain a peaceful power. >> there ino placeike home, evenf it is a small set fishing vil that oer comfort in coziness in the absence of modern furnishings. this captain made international headlines when his fishing vote collided with the japanese coast guard vessel off the islands. he was detained by japanese of far do you and only returned home after more than a week of protests by the chinese government. >> the islands are part of chinese territory. it is those who detain me the broke the law. >> its spiral sino-japanese relationships to a lower level. >> public opinions and those --

in both countries do not favor each other bird it is a direct result of a change in the international environment. to get less than two months after the collision, japan pinpointed china as its main rival in the region. >> it has aroused of vigilance and the jealousy of its eastern neighbor, and it lacks experience in dealing with china and engages in political gambling on this issue. the u.s. remains the biggest downside influence. >> just a few minutes' walk from the home village, fishermen are busily preparing for their next voyage coinciding with the peak harvest time. but this man was not among them. he is still haunted by his ordeal after the collision and unable to summon the resolve to head back out to sea. the fisherman's troubles are only one of many challenges

facing china's diplomacy. rolling challenges are coming from almost all surrounding waters, from the cult china seas to the jealousies. complications test arise from the u.s. determination to maintain its influence in asia. relationships between south korea and north korea threatened conflict. washington urged china and to exert pressure on north china. -- north korea. >> china has always played a constructive role in promoting peace on the korean peninsula. negotiations of the only way to achieve that goal. and the fact that northeast asia still enjoys peace has given the world a sigh of relief. to china's unwillingness keep in step with u.s. goals has made you -- america wary.

and >> it is a relations with the united states that we certainly do not agree with that. china has become more confident over our economic growth goals. but china remains a del faux pas to a developing country -- in the fishing vote cost more than 4000 u.s. dollars. but it is the lifeline for these fishermen and their families. their biggest hope is for called seas and a good harvest. diplomacy,foreign we're joined by a former ambassador to germany. mr. ambassador, china has been blamed for its assertiveness. japans a dispute with over the islands. as the rest of the world become

more critical or china become more assertive? is servingdiplomacy not only domestic of world peace and stability, but it is true that some countries are showing muscles. by conducting large-scale operations, everyone sees who are doing that. looking around the world, i do not think that the world has become more critical toward china. it is true that some people in the western psychologically out of balance because of the strength of china and because china done what a independent foreign states could do and must do. >> their expectations that china

can play leadership in national affairs. but we note that china's diplomacy serves its own domestic agenda. do you that a strong foreign policy will be more proactive and aggressive in the future? constructive and responsible -- china plays a constructive and responsible role. i do not think that china will adjust its foreign policy to be more aggressive. i think china will be more cautious and will do everything possible in order to service domestic agenda but also to serve the world peace. >> thank you, mr. embassador, for taking our interview.

>> the house registration system is unique around the world. it separates people living in cities from those in the countryside. with a chance buoyant economy,

it passed over all of that system. the reform happens in september. now people are asking, who in my and what can i be? they want the reform to go even further. and faster. this person comes to the hospital twice weekly for dialysis. this is the only way she can survive. each treatment costs at least 300 yuan. it is more than their migrant income. >> i feel better this way both spiritually and mentally. >> but how can someone in her position filled better with that data of several thousand yuan? after working in the city for five years, she and her husband found permanent residence a month ago.

it gives the medical insurance which will cover most of the cost of treatment. >> it is all the big problem for us. otherwise my family whenever for such a huge expense. i'm quite relieved now. at least financially. >> the couple are not the only ones benefiting from medical insurance. so are hundreds of migrant workers have been brought into the medical insurance system. >> in the last four months, billions have become urban residents. most of them are my co-workers and college students around the countryside. they will have equal opportunity to find jobs for security and education. their dream of being urban residents has come true. but the policy is not welcomed by everyone. his plot and has beea skept.

>> i do not want to give of my farm l i think this is more reliable. >> nowadays farmer gets more government subsidies once their fields are used commercially. the compensation is considerable. another worthy is where that the marker workers can afford to live in the city and whether being unemployed there will be more difficult. >> whatever policy is made, especially a policy involving the millions of people, it would definitely lead to some debate while improving the policy. the farmers need time to understand how they will benefit from the policy in the long run. >> the ultimate goal is to put 10 million farmers and urban residents by 2020.

it profoundly affects a society where the urban and roll residents are separated by a household registration system for a decade. the designers of the policy have described it as a wonderful future. but it is obviously too early to tell what the result is a good or bad one.

>> the chinese ambition is not just underground. they moved on unsettled space. china's in its first man into orbit. this october, the country launched a probe that circled the moon. it's no doubt that the endeavor will take it even further into the cosmos. >> on monumental moment for this. another step closer to realize chinese dreams of flying to the moon. the first time the chinese probe is sent to the lunar transfer orbit from so many kilometers away from earth. >> this marks the beginning of our work. [unintelligible]

>> this is one of the chief engineers from the organization. she has been working in space exploration since graduating from university at 14 years old. sis says that working in the space industry needs extreme patience and hard work. the equipment and payloads -- >> the most intense moment was the satellite position readjustment at 1,600 kilometers. even the slightest this calculation could result in challenge. it happened when it was on the far side of the month. -- of the moon. china had to rely not on automatic control system. we had preset the programs.

>> on november 8, they unveiled of total of the moon. it was taken with a high resolution of within one and a half meters. it was a high spot for the chandler mission. now they are doing another that is expected to launch later this year. she explained the graphics on the big screen represent the actual three-dimensional movement. 2011 will also be the launch of a spacecraft that what all ultimately with the item already in or red. to end this will be another leap forward for chinese space technology.

i call the previous missions, it will be another challenge for us. >> it will helphina set up a lunar base. the countr's big dream is to go beyond the moon toars and venus. the state of the art aviation command center has already better -- directed china's three manned spacecraft. this excess is paving the way for an unman the landing for the next mission, and eventually landing a man on the moon.

>> our red-hot economy is the envy of the world. but how to maintain fast growth and stability will always be a challenge to it that chinese success story to continue. >> they run a small apartment in western beijing for slightly more than 2000 yuan a month. they do not earn month. inflation makes it increasingly difficult to make ends meet. >> we made 5000 yuan a month.

there is a little after expenses. if income continues to run -- if it continues to rise, we will look for cheaper place. we do not think we can afford to raise a baby, not by half. >> many ordinary chinese are feeling the pinch of inflation. in november, at china's consumer product in six it its highest in over two years. -- consumer product index hit its highest in over two years. curbing inflation is a key government task for next year. they need to shift the monetary stance from relatively loose to prudent. it had growth of 9% this year, but inflation poses serious threat. >> if inflation becomes very high, or deteriorated, we have

no time, we have no way to maintain that growth to promote the change of the gross model. in the government has taken a combination of both its and illustrated and monetary policy measures. this year the people's bank of china has raised requirement ratios six times while hiking benchmark interest rates twice. experts can see more monetary tightening in 2011. in the meantime, inflation is making it more important to reduce the income gap. >> the longer advantage is income distribution producing not only economic problems but

also social problems. i think in the next five years or 10 years, our government will take up very serious to aress the proble of income disparity by reporting that fial structure, byeforminghe taxation structure, by improving the health care, the social systems, and a few other measures. >> they ould be odew for is couple because they will be direcbeneficiaries o government support. chinese policy makers say debt rating in inflation without improving economic growth is a big challenge. and allow people to choose benefits from the country's economic miracle. experts predict senate will maintain growth of the next one

or two decades. -- china will maintain growth of that -- over the next one or two decades. >> on that topic, we're joined by the chief economist from ubs securities. it seems that the chinese economy has been doing pretty well this year. the concern over inflation has been growing. how much of a threat is it? >> indeed, this year growth is better than most of us expected. at the same time, crises have increased quite a bit and monitor supply has started to increase more rapidly. there is concerns about quantitative easing outside of china as well. i think at this moment, normal citizens posset inflation expectation has increased right a bit and is rising. even though we think inflation is controllable next year, the risk is quite a. >> the chinese government has

done a lot for domestic consumption. but people do not have enough money in their pocket or enough good feeling about the future to spend. what is lacking in our economic policies? >> i think the key word going forward is the change of an economic growth model. the government has identified that as a key objective in the next five-year plan. to increase household income is the most important thing domestic consumption. that means more employment so that graduates from college can find jobs, so my parents can find jobs, so they have more income to spend. -- migrants can find jobs, so that they have more income to spend. also housing prices need to be more stable. i think that government has a lot to do on that front. we have seen some progress, but more needs to be done in the next few years.

>> that you indeed. -- thank you in deed. >> we are about to enter the second decade of the 21st century. it will be key for this country. chinese future is built on its past. the record has been strong, but it is also a promise.

that closes this year's china diary 2010. thank you for watching. happy new year. >> tonight a debate among those wanting to run the republican national committee, including current chairman michael steele. that is at 8:00 eastern tonight here on c-span. tonight on "the communicators," how policies affect high-tech companies. with rey ramsey, president and ceo of technet. the 112th congress gavels in this wednesday with both the house and the senate coming in at noon eastern. the house will elect a new speaker, john boehner.

the new house is made up of 242 republicans and 193 democrats. live coverage on c-span. and in the senate, alive quorum to bring all senators to the floor for the swearing in of the newly elected senators. democrats and independents will hold 53 seats, republicans 47. the senate is live >> now, courtesy of canadian television, an interview with canadian prime minister stephen harper. topics include the economy, u.s.-canada relations, and afghanistan. stephen harper, the leader of the conservative party in canada, has served as prime minister since 2006. this is about 45 minutes. >> the following is a ctv news special presentation.

conversation with the prime minister. >> canada is emerging from this recession in a strong position. canadians solutions are leading the way globally. it is not enough for nations to make promises. we must get results. we are looking at a non-combat mission that will occur. >> we are not going to win or lose the war. this is about nation-building. i have never seen flooding like this. we do not intend to leave at this time until the job is done. >> conversation with the prime minister. >> welcome to our annual conversation with the prime minister pierre during the next 60 minutes, my colleague and i

will be chatting with the very honorable stephen harper about the kind of year we have had in 2010 and what we might look forward to for 2011. you may have already noticed we are in slightly more casual mode this year because we moved north of ottawa to harrington lake, the prime ministerial country retreat. it is a beautiful piece all times a year, but especially here at christmas with the candles and windows, the fireplace is going in sides. decorations all around. this is a special occasion for us because later in the broadcast, we will be joined by mrs. harper, the wife of the prime minister, and this is her first time, her first conversation ever on television. prime minister, thank you for joining us. >> thanks for having me again. >> top of the agenda, as always, we seem to be coming out of the recovery. is there a danger of a double dip? where are we from your point of

view? >> we try to be straight with the canadian people throughout all of this. there is a global recovery. that recovery remains extremely fragile. we had the g-20 summit earlier this year. everybody decided what we needed to do was in some cases, keep delivering some stimulus, start to wind that up, have near-term plans for countries to reduce their deficits and debts. our anticipation is at this point, we remain optimistic that there will be a slow, gradual recovery, but, obviously, we have to remain extremely flexible, extremely ready with options. we are consulting with canadians right now basically in a pre- budget mode to see what they think we should do next. we have had some major stimulus programs the last couple of years. those are winding down, and we're looking at the next steps, that we can keep pushing the recovery forward and make sure

our deficit continues to fall. >> the bank of canada is clearly worried about the indebtedness of canadians overall, and the banks are saying they cannot do much about that, that it is up to the government to make some changes on mortgages. >> indebtedness levels to concern us. canadians debt levels have risen during the recession, which is quite the opposite than most other countries. part of that has been because canadian income growth here remained pretty strong. canadians have taken advantage in many cases of low interest rates, but we are looking at that carefully. if we have to do that -- we have tightened mortgage rules before, and if we have to do that again. as much as these things are a concern, the real things for us are and said the border. these are the real big storm clouds we have to worry about. and why myself and the minister of finance engage so regularly with the international counterparts on the issue. >> speaking of the subject, very

real risk of a european banking crisis. the u.s. unemployment rate almost 10%. they had a huge deficit, growth very slow. that is our biggest trading partner. what is your prospect for the u.s. economy turning around? because we do run that risk of a double dip. >> on the european situation, our european friends continue to manage those issues. they are difficult issues. there are not easy solutions. mr. flaherty, he says the same thing i do, and the more quickly he can deal with that, the more forcefully, the better. the u.s. economy -- i do think that the latest agreement made between the president and congress will in the short term assist the recovery in the united states. the question of the united states deficit debt problems, which as you know are really astronomical, they remain a

serious concern. at the g-20, we all agreed we should have targets to have our deficits by 2013 -- to halve our deficits by 2013 and eliminate them by 2016. we stabilize our ratio, so canada is going to achieve those benchmarks by next year, but other countries like the united states need to have an interim plan. >> unemployment almost 8% in this country. it would probably be higher if it were not for the fact that a lot of the young people and some middle-aged people have sort of given up looking for work. i know governments are not always the solution, but surely, you must be looking at some ways to get these people working. maybe it is retraining programs or something, because they need some help. >> first of all, i think we should be clear about the canadian job situation. i'm not going to claim it is all rosy, but the canadian economy has created close of 450,000

jobs. we now have more people working in canada today than were working before the recession, so there has been some significant job recovery, unlike most other advanced western nations, and some of that is due to the kinds of programs you mentioned. infrastructure programs. we have had enhance labor market programs. canadian for dissipation rates in the labor force remain quite solid. they do not think there is a lot of this garage workers, but we will be looking going forward at things we can do to continue to prod the economy to create jobs and do so in a way that is affordable as we move forward. >> we had a very big deficit. you have been talking about how we want to get this deficit under control, but we are in a minority government situation. are you willing to take the painful cuts that may be necessary in the upcoming budget

or run the risk of losing your government? >> let's be clear about canada's financial situation. our financial situation is far better than anyone's. our deficit levels compared to other countries are a fraction, 1/3, 1/2, 1/4 of what we see in other countries. what we have said and what we have been very consistent on is that we have to control our spending. stimulus programs are ending. we have wound most of those up. going forward, we have to make sure that any spending we do is targeted on the economy and on job creation. we are not going to be cutting health care and education and some of the things that were done in the past, but we have to make sure our spending is in priority areas and is not growing. if we do that in the next few years, we should see enough

economic growth to close the deficit gap. that is what we need to do in canada. it is not a matter of dramatic draconian cuts, but it will be a matter of discipline over some time. >> you know that there are huge political expectations surrounding your budget. are you prepared for a defeat? >> we are a minority parliament. there is always that risk, but i think the canadian public has been clear. they think that ourselves and all parties in parliament should be focused on the economy and jobs. i do not hear anyone saying they want an election. they want a focus on the economy. that is what the government's focus will be. i do not think canadians want an opportunistic election for anyone. the government will do what is in the best interests of the canadian economy, and that will be our focus in the budget, and that is why we are consulting extensively with individual families and businesses across the country. >> we will be right back with more in our conversation with

the prime minister. >> still to come, a very special guest. >> mrs. harper, thank you so much for joining us. >> in our private life, that is what we do. >> one conversation with the prime minister continues. >> we now return to conversation with the prime minister. >> i'm originally from canada, but i have lived a lot of time in the united states, and i want to know why canadians stock up to the united states so much and in general have a lot of resentment towards them. is this a big contradiction. >> yes, that is the age-old contradiction, probably inexplicable because we have been talking about for so long, but you and americans are developing a new vision for the border. it is called the continental

security perimeter. the title. what exactly does that mean? >> first of all, if i could maybe respond to the question or the comment. i know there is always an ambivalence in our relationship. i have to tell for leaders that the americans are our best friends, whether we like it or not. i do not actually think that is the way canadians actually think. i think most canadians understand that the united states is a great friend, a great neighbor, and we are very fortunate to have the relationship with the americans that we do. at the same time, canadians do not want to be americans. we are proud of our own country, but at the same time, our economies are widely integrated in the post-cold war era, and we face tremendous security threats. those threats are largely the same. they are largely shared. obviously, we are trying to work with our american friends to see

how we can strengthen our security and economic range in a way that protect our interests and sovereignty but also protect canada's vital access to the american market. >> the border has been hampered since 9/11, as we all know, so are we doing this for american'' concern about security or to get our goods flowing more freely? >> we're looking at ways we can enhance both our mutual security and economic access we have to each other. i think all canadians are concerned about the security of the country but also access to the american market, even an american market that is having its challenges. the first questions the come to a lot of people's minds are william b. harmonizing our refugee and immigration policy? this has been a whole question of sovereignty. is that on the table? >> we are not talking about

harmonizing those kinds of policies, but we are talking about making some changes to them ourselves. i think canadians are pretty concerned when they see boatloads of people being smuggled into this country from overseas, just landing on our shores, queue jumping, violating all of our immigration and refugee rules. i think canadians are pretty concerned about that. i do not think we need the united states to tell us we need to be concerned about that. that is why we have legislation. we have seen things change before. i think canadians views are pretty clear on this, and we are going to continue but the legislation forward. >> are you going to make that a confidence vote? >> one of the things i have tried to do, like to try to make this minority situation work a little better is i'm not the one who goes around making threats. i do not think that is helpful, but i would say this --

canadians understand that this is a serious threat to our country. i think they think it is a serious threat to our sovereignty, to have boatloads of people coming here, queue jumping, violating all of our rules, and i think they expect parliamentarians to take it seriously. if they see more boats coming, i think the pressure to move this legislation forward will only increase. >> coming back to the perimeter for a moment, apparently, you have been having talks with president obama on this whole issue. i have seen a draft copy of it. are you looking like we are going to have an agreement signed in the new year between you and the president? >> i cannot tell you. i can only tell you we continue to talk, and we are looking at a range of ways we can secure access to the american market and protect our own security interests. we have been on the attack, in

fairness, since mr. marchand signed the economic and security partnership with the united states and mexico. that was a framework that was set up back in 2005. what we are trying to do, we have a special relationship with the united states that is not similar to the problems of the american-mexican border, so we are trying to restore that -- the management of that relationship in a way that secures our privileged economic position and also our economic security, but we still have a ways to go. >> obama has seen this document, of course. it was leaked, and he has talked about it. >> i did not think i have seen the elite document myself, but i know we are having this discussion, and i do not think it is a secret that this government wants to enhance its relationship with united states.

anything that ultimately involves change to canadian law or change to canadian practice would require parliament. >> is there a possibility the government could be defeated on something like that? >> you would have to talk to the opposition. there's all kinds of possibilities the government could be defeated in minority parliament. but the canadians want us to focus on jobs, and they have given that message to all parties. that will be this government's focus. it is one of the reasons we are looking at this particular mission. >> prime minister, welcome to the conversation, right after we take this brief timeout. >> still to come, there are some very aggressive americans. >> are we popping up across regimes? >> we will not give any money to any element of the government. >> when conversation with the prime minister continues. we now return to conversation with the prime minister.

>> we would obviously like to see some form of support continue. >> many of our allies would like us to send a combat mission. >> janice kelly from montreal, and i would like to know when are all our boys going to come home from afghanistan? >> when will we be able to bring our troops home? it looks like it is a never- ending situation. >> are we propping up the corrupt regime? >> you can tell that canadians are beginning to look at this as a lost cause. even though combat troops are coming out in 2011, there will be a non-combat mission extending to 2013. what prompted you to change your mind on that, to extend the presence to 2014? >> to be clear, i know you did say the combat mission is ending next year, and 2/3 of our forces will be coming home that point. i looked at the situation on the

ground and became convinced that to really honor and ensure the value of the sacrifice that has been made, we needed to do it for the transition phase to help further drain the afghan security forces. this does cost some money, but the risk to canadian lives relative to what we had at this point is relatively small. all things considered, i think this is the best way to go forward. several in the opposition of parliament agree with us. i think most analysts agree with us. i think the military themselves are very comfortable with this position. so i think this is the best way to go forward. you did hear use of the term lost cause. i think that is an unfair categorization of the situation. afghanistan remains a very challenging country, but we should not underestimate gains that are being made. i just talked to our ambassador yesterday. gains being made in terms of education, immunization,

irrigation, all things that we are focusing on to improve people's lives. the afghan security forces, particularly the military, are becoming more robust. while i know it has been very difficult, and there is a temptation to say that we are never going to fix this, let's just forget about it, we know that if we just leave afghanistan to fall into chaos, we know it is going to come back to haunt us, so i think we are all determined, all the allies are realistic, determined to insure that will not happen, that afghanistan will be a place that can manage its own security sufficiently to not allow it to again become a threat to global security. that is our objective, and i think that is a very achievable objective that everyone is working on it. >> we use the phrase lost cause because that is the way canadians seem to be responding to it. are you confident that you can bring people along with it? when i think polls have shown a majority of the canadian people support this direction.

to not cause the immediate collapse, that continues to make sure that the afghans are taking greater control of their own security. >> red cross, a pretty credible organization, is saying that it is worse than it has ever been in afghanistan. are we not looking at world leaders, yourself included, with blinders on to what we ourselves can see, that violence is far worse than it has ever been? aid workers are frightened. the taliban seem to be in greater control. >> i do not think the way you are quoting the report is exactly what it says. they are certainly saying that there is a conflict in some regions of the country higher now than what it has been. part of that is because there has been a very aggressive american surge pushing back on the taliban, but that should not blind us to the real improvements that have been made. there are millions of afghan

children going to school, getting basic health services. there are farmers and others seeing the beginnings of some economic activity. these are gains. it is not rose colored. there are lots of problems, lots of security risk, lots of problems in the afghan government itself that as you know i have been very unspoken on, but to suggest the situation is anything like it was 10 years ago i think would be a mistake. >> talking about games, the kerrigan family has gained a lot. we have seen that the karzai family has caught the brother in kandahar where where are fighting. quite rightly, canadians are saying, as this gentleman said, are we propping up the corrupt regime? >> first of all, there is no doubt -- i do not think we have never been silent about the fact we are concerned about corruption in afghanistan. that is not to say that

everybody in the government of afghanistan is corrupt. there are ministers, officials, people who have returned from the west. the governor kandahar is a guy who taught for a while at canadian universities. there are lots of people who are not corrupt, and this government, when we give assistance in afghanistan, we make sure our assistance goes to agencies that are not corrupt and that canadian funds are used for the purpose to which they are given. we will not give any money to any element of the government we believe is corrupt, and that has been a pretty clear policy. >> we have seen that karzai's brother muscled in on the group we had been funding. >> there is some security work. security is essential around construction work, but certainly, all of our construction contracts, these things are done according to government of canada guidelines. we do not allow them to go to a group of individual.

>> we have been kicked out of dubai. largely because uae wanted to have additional landing rights in canada. this apparently is going to cost several hundred millions of dollars extra trying to get our equipment out. is there any possibility we are working on with the united arab emirates to see if we could come to some compromise with additional lending rates? >> the lease, as you know, expired. the uae came to us with a proposal for the renewal of the lease, which was not in our best interests. we had been prepared to make some compromise, but that is it. i do not think we could be in a position as a country where part of doing our part of an international mission, we have men and women in uniform putting their lives on the line -- we then cannot use that to have our airline interest and airline jobs threatened in canada.

that is not a reasonable situation. i did not think we would ever want ourselves in a reasonable situation again where we would be subject to that kind of pressure, so i think it is reasonable that we find other arrangements. >> other arrangements mean we get our material in there somehow. it will be much more difficult in other ways, as you know, so what is the plan? >> the military has had and has already put into affect its other options. there are other routes through which we are moving. it is the cost of military mission. as i say, we are not in afghanistan so we can start negotiating how the canadian airline industry functions. that is not a reasonable demand. >> how do we get our heavy equipment out, our heavy combat equipment out? we are sure not going to try to take it through pakistan, are we? >> the military has plans for that. we have equipment to do it.

one of the first things our government did was purchase heavy lift aircraft, so we have the capability. >> finally, in this segment, then, let's ask about the measure of success that you will be looking at two in 2014, which is a hard and fast date, we take it, the measure of success that is going to get canada out -- >> de measure for all nato countries has always been an afghanistan that is sufficiently capable of managing its own security, that it cannot become a safe haven for global terrorism. we are building up the security forces in that direction. i think everybody believes this is an achievable goal by 2014, but as you know, we are phasing out already pretty steadily, and americans have said they are going to start to do the same thing next year. is afghanistan going to be a model western democracy in 2014?

i do not think anybody believes that, but our objectives are much more practical and concrete than that. and longer term, we are not going to leave them without a military presence. we will continue to be there in each and development capacity to assist the development of good government and help ordinary people who have pretty terrible lives in that country. >> we will be right back with more in our conversation with the prime minister after this break. >> still to come, the woman behind the prime minister. how have you had to adjust your life to be the wife of the prime minister? >> maureen harbor -- harper, when conversation with the prime minister continues. "conversation with the prime minister" continues. >> they want us to be in this house at work. >> this one gun registry is wasteful. >> $16 billion without

provocation. >> mr. prime minister, i'm asking you if you plan on decreasing the deficit by raising everyone's taxes. >> i would like to know what you are going to do to win my vote for the next election. >> there is the essence of it, right there. the media are getting excited about the next six months. parliament resuming on january 21. will there be an election, will there not be an election, will you be shuffling your cabinet? what do we look forward to? >> we have a good forward- looking agenda now for some time, and i look forward to seeing parliament on january 31. earlier in the new year, i will be making some cabinet changes. i think i told you already, do

not ask me about elections. you can ask the opposition coalition, the guys who keep threatening us. i think canadians understand that it is not the time for political gains the rigid political games. we are focused on the economy. we are doing relatively well, but we could throw that away with the wrong decision, so we are going to bring forward a budget that will be focused on the economy and jobs and also make sure that our deficit continues to be manageable going forward. >> have to ask you about this year -- no seats in newfoundland, and danny williams has stepped down. he has not closed the door to politics. have you thought about picking up the phone and asking him to run in the next election and putting him in your cabinet and sweeping newfoundland? >> i talked to danny. you should know, i congratulated danny in spite of our differences, and they are kind of legendary. i think premier williams has

really done a historic job and is greatly appreciated for that. i do not think he has any interest in continuing in politics. he had a great run, a great career, and i think he identified for himself that this is a time to move on. >> michael saying this parliament has run out, and he will do everything he can to bring down the budget. >> the problem is he has been saying that since spring of 2009. but i think for other canadians, they are not looking for opportunistic elections. they are looking for canadians to keep focusing on the economy and jobs. if he has some realistic things he would like to see in the budget, we would be happening here his ideas. >> if he says he is taking it down, and you want us to continue governing, that means

you have to work out some kind of arrangement, and that negates your whole story line, which is this coalition of opposition parties that you want to run again in the election. been position, since i've prime minister, nearly five years now, is we do not go and cut deals to govern with particular opposition parties. certainly not a party dedicated to the breakup of the country. we do not make deals with people like that to run the country. we listen to everybody's ideas. we are open to hearing their ideas, and we come forward with what we believe is the best for the country, and then parliament has to make its own decisions based on that. but i have said all along, i am, as you know now, riding along this minority government in canadian history. the reason that is the case is not because we make deals with the opposition. we do not make deals with the opposition. we make sure we serve the needs

of the people. that is how we stay in office. >> we are not going to get you to say whether you are going to -- >> i'm not going to call an election. we are not bringing forward some kind of poison pill to promote an election. we are committed to governing. we do not need any election. we are in a fragile global recovery. canada is in a good position for the long term, but we need to stay focused on that and not score around with a bunch of political gains. >> we still have this electoral gridlock. >> you are not there, not kissing 4% of politicians most people still you have to get close to, so how are you going to break through and get 40%. >> we will worry about that when an election comes.

polls were saying for years that i was never going to be prime minister. i remember the polls before -- before i ran in my first election, the polls said we could not go over 10%. when we ran in elections in 2004, 2006, they said we could not go over 20%. when we did win, they said we could never go over 30%, so knows. >> give us your best guess, are we going to have an election in 2011? >> i have said this before. i spent some years being a political analyst. i know now i'm not a political analyst. i'm an advocate, and i'm not i'm dating for an election. >> what do your instincts tell you? >> we are always ready, but it is not in the country's business, and we will not be provoking it, and the opposition gets together to provoke an election because they think they can hold us to a minority, i

think the public will punish them for that. >> if you fall deeper into minority or lose the election, would you stay on as leader? >> we have not had an election yet. >> all right, prime minister, it has been a great talking to you. in our next segment, we will be joined by maureen harper in her first-ever television conversation. >> it is hard to keep secrets in the sun. >> the children? >> it does not affect them very much. >> when "conversation with the prime minister" continues. we now return to "conversation with the prime minister." >> where it begins, i cannot begin to knowing future generations must never

forget the heroism of our ancestors. we know all about the sacrifice it takes to have a family member in politics. >> mrs. harper, thank you so much for joining us. you have been right up front, as indicated in the video with your charities and causes this year. how do you choose which charities you want to support? >> a lot of it is random. people i mean, people i talk to. for instance, last year, i was at a friend's ranch in alberta, and she showed me a beautiful letter that she got, and they get together and make blankets for soldiers that are injured. they are given a blanket basically right on the battlefield. the soldier loved his blanket. they do not put their name on it. they just send these blankets off and hope they are given. this mother wrote a letter. she found out from a tag that

had been sewn on the blanket, and she contacted the town, and the mother was just thankful. i look at the letter. it was just wonderful. she lived in ottawa. we invited them for coffee. we took some pictures and send it back to all these people, and there's many groups like this across canada, little groups of people doing things for no glory, and i just love that, to be able to let the people back in the small town novak their work was appreciated. -- know that their work was appreciated. that is the work of love, shining a light on people coast- to-coast, doing a charity work who get no recognition. >> we understand also that you have been quite instrumental, if

i may say that, in helping the prime minister move forward with his musical career. prompting him to step up there in the national arts center. this latest performance, which everyone is talking about at the conservative party christmas party -- do you actually talk to him about this kind of thing? >> he plays all the time at home. anybody that knows us, knows him, any time we have a party, he gets on the piano. we have a drum set in the corner, guitars, so we are always doing that in our private life. that is what we do. pretty much every night. anyway, so i think that this is personal side, and israel, and it is who he is, and i think he is happiest playing the piano, and he loves music, so i just wanted him -- like, i like surprises.

>> she is very opinionated about song selection. >> i think he is pretty good. i like surprises. for a charity event or the christmas party, i think it is fun. >> you certainly, the surprise with some of those. >> and it is hard to keep secrets in this town. >> i'll bet. >> you are involved in two of the most dangerous sports -- politics and motorcycle driving. a lot of people do not know this, but you are walking around the streets of ottawa on a motorcycle all the time. >> it is not that i took it up. i grew up in the country, and we always rode their bikes. that is what we did when we were young. i think i got my first motorcycle when i was 10 or 11 years old, and i have loved them and liked them ever since. it is just people that write

motorcycles, it is the freedom. that is what i like. >> you ever get your husband on a motorcycle? >> just once. he was pretty good. the atv. >> up north. >> my family is always trying to get him on one. so they phoned me after that. "was that stephen?" >> harrington lake, where we are, one of the benefits of being prime minister. how have you had to adjust your life to be the wife of the prime minister? >> well, i had to go from being a working mother and having a business in a town where i knew everybody and had lived for almost my whole life to moving somewhere far away from friends and family, so you have to start again, which people do all the

time. i had never done that, but people who aren't diplomats and soldiers and stuff do that all the time, so we had to do that. it was hard the first year, but after the first year -- i love ottawa. i have lots of great friends here, and we have a great live here. >> the children? >> they go to public school just up the streets. they have their friends, just like every other family in the neighborhood. >> but can they really have a normal life, as kids do? >> yes, they do. they have friends in. there is kids coming and going all the time. you come in the house, and there will be shoes at the door. you cannot get the door open because there is so many issues. it is just like everywhere else. kids come and go all the time. >> also, they have grown up with it. i think it will be difficult to parachute teenagers into this kind of situation. >> they have had the same

friends for years. >> they never come home one day and said they wish you were not prime minister? >> it is their life. but it does not affect them very much. they go to school. they have their friends. they are on the sports teams. they do their music lessons. they do what every other kids do, so that is all they want. they are like everyone else. >> can i ask you what you feel is the most joyful experience that you have as a prime minister's wife? >> that is a tough question. you get to meet very interesting people. that is the one funding, you can invite -- when nickelback played in ottawa, we invited them over for pizza. all -- the kids in the neighborhood were all excited, not to see my husband, but just that nickelback is coming to

town. if you like music and like what these people do, we get to meet these great people. i would say that as the fund. or international leaders. >> you are in a position where -- not everybody, but almost anyone, especially in canada, you would like to meet, you say that you want to meet them, then you have that opportunity. >> last night, the canadian canners came over and sang a song before they went to a concert. wonderful guys, lots of fun. we are just very lucky that way. >> how do you feel about cats and hockey? we have the prime minister a couple of years ago talking about the stray cats that come in, and, of course, the time he spends playing hockey and all of that. are you interested in the subject as well? >> cats more than hockey. i will watch a hockey game like anybody else, especially in the playoffs or something like that.

that was another good -- we had a big party and had the stanley cup come to our house. all the kids in the neighborhood -- i think we had about 80 kids. half the neighborhood was there and got to see the stanley cup. that was fun. the other thing, i love animals. i grew up in the country. we sent them back to the humane society last week, so somebody in ottawa adopted a beautiful little white cat with blue eyes, and they probably do not know, but was fostered at our house. >> how many cats do you think you have adopted ultimately? >> probably closer 150. there's a lot of cats in ottawa. >> if only cats could vote. >> most spouses of prime ministers rely on their spouse for political advice. i wanted to know, when he actually hangs up the shingle

on the pulpit, would you be doing a hillary clinton and the site to run it? >> i know you are never supposed to say never, but i'm going to say never. i do not know how many languages -- i only speak one, but i will say it in whatever. >> could not get a better adviser. >> pretty astute politically, is she? >> she is very as too politically. >> when it finally comes to an end, how will you look back on it? >> it was a great experience. we have a great time. we do lots of fun family things, and -- >> we keep saying to ourselves that when it does end, we are going to do the next thing. you see too many political leaders who, whether it was because it was unhappy or happy, they want to relive it, every analyze it, keep fighting their battles, we keep saying i hope

we are able to win this is go on with the next phase of our lives, but we will never have opportunities like we have now. >> can i ask you a question? has the experience of being the prime minister strengthen the relationship? because it is so stressful, and you are always under the spotlight. >> we have a strong relationship. to be frank about it, the demands are all on maureen. maureen is a very giving person maureenperson -- very giving person. maureen allows me to concentrate as much as i do on the job. she does not put a lot of demands on me. that is one of the reasons i have been successful in this business. without that, in other situations, it would have been much more onerous. i expect when we are all done with this, i will be doing a lot of payback for a lot of years. >> on that note, we want to wish

you, on behalf of all of our viewers, and certainly bob and i, all of our crew year, the best for the holidays. have a wonderful time, and we will see you in the new year. >> thank you. merry christmas, and happy new year to you and your family. >> "conversation with the prime minister" will continue in a moment. we now return to open a " conversation with the prime minister." -- to open a " conversation with the prime minister." >> i can tell you this will be my last conversation with a prime minister, at least in this hourlong ended year format. 21 of the now through four prime ministers. a rare privilege for me. i have enjoyed every year of it. >> it has been an honor for me to have been with you these last five years doing these interviews. you know i'm going to miss you an awful lot. as for 2011, the prime minister

saying he will not anything to precipitate an election campaign, but his fate will be decided by the three opposition parties. >> and anything can happen. have a wonderful holiday. thank you very much. good night. [captioning performed by national captioning institute] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> tonight, a debate among those running to head the republican national committee with five candidates, including current chairman, michael steele. that is at 8:00 eastern tonight here on c-span.

tonight, how the federal government's technology policies directly affect high-tech companies, including taxes, broadband, immigration, and education, with ray ramsey at 8:00 p.m. eastern on c-span2. the 112 congress gobbles in this wednesday with both the house and senate coming in at noon eastern. the house will elect a new speaker, ohio republican john boehner. the new house is made up of 242 republicans and 193 democrats. live coverage on c-span. and in the senate, a live quorum to bring all senators to the floor for the swearing in of the newly elected senators. democrats and independents will hold 53 seats. republicans, 47. the senate is live beginning at noon eastern, this coming wednesday on c-span2.

>> for these children, our children, and for all of america's children, the house will come to order. >> with the start of the new congress this wednesday, look back at the opening of past sessions on line at the c-span video library with every c-span program since 1987. more than 160,000 hours, all searchable, all free. it is washington, your way. >> now, today's state department briefing. among the topics covered, the upcoming referendum in sudan, relations between north and south korea, and middle east peace negotiations. >> the ice was very helpful. >> the ice was very wet.

>> which was helpful. >> i froze. >> good afternoon and happy new year. welcome to the department of state for the first briefing of 2011. the first thing that secretary clinton did this morning was to welcome tom nides as the new deputy secretary of state for management and resources. he was sworn in this morning by pat kennedy and is now getting up to speed on a range of issues from the budget to the way forward on the qddr. but you'll have an opportunity to meet tom nides in the very near future. ambassador steve bosworth is on his way to seoul, and there he will meet with foreign minister kim sung-hwan and special representative for korean peninsula peace and security affairs ambassador wi sung-lac, and then as part of this trip

will travel on to beijing and to tokyo. >> just on that -- >> yes. >> you -- the trip that was -- the last trip that went out there with sung kim and you said -- and kurt campbell couldn't go because he was sick, has that been rescheduled? >> it has not. i checked on that this morning, matt. it has not yet been rescheduled. and i think we will focus first on the consultations that ambassador bosworth has and then make decisions on future travel. and finally, ambassador princeton lyman is on his way to sudan. and general scott gration, our special envoy, will join him later this week as we continue to focus on the referendum coming up on january 9th. i would say at this point that we are optimistic about the referendum this coming weekend. sudan and southern sudan have come a long way over the past

few months, but we also are very sober in that, depending on the choice made by the people of south sudan this weekend, we know there's still a long way to go and a difficult road ahead as we get into negotiations between the north and the south on the post-referendum issues, depending on the choice that the people of south sudan make. >> what does that mean when you say you're optimistic about the -- you're optimistic it will be peaceful? you're optimistic it will be -- it will reflect the will of the people of southern sudan? you're optimistic what? >> i believe that if not yet, there should be an announcement of the preliminary figures on voter registration. i think the observers -- certainly our view and the observers in sudan have viewed the registration process as very credible. and we believe that the right

signals are being sent both in north and south in terms of the upcoming referendum and respecting the results. so the environment, we think, is constructive leading into this weekend, but we understand that there are still many unresolved issues both in terms of dealing with the decision that the people of south sudan make this weekend, but also continuing to work on abyei and also continuing to work on the ongoing situation in darfur. >> which -- >> staying with this? >> no. >> can i go to something else then? can you explain why ambassador bosworth is going to those three countries now? >> well, he's following up on travel that was made last month by deputy secretary steinberg and at the time nsc director jeff bader. again, nsc representative danny russel is with ambassador

bosworth and also ambassador sung kim. it's part of our ongoing consultations to both evaluate the current situation and the way forward. >> do you think you are any closer to achieving a -- first of all, a resumption of some kind of north-south dialogue -- both countries have made public statements lately suggesting that that might be a possibility, and then, to a resumption of six-party or some other kind of multilateral talks? >> i wouldn't want to put the cart before the horse, to draw the first metaphor of 2011. we want to see tensions in the region ease. we have noted public statements about the potential for improved dialogue between north and south.

obviously, that can be important and we'll see whether the north follows through on that offer for dialogue. certainly, intra-communication across the korean peninsula is an essential element of easing tensions, and that will be one step. but obviously, there are a number of things that north korea has to do. >> and does -- last, does north korea still have to take actions showing that it is serious about implementing the 2005 agreement and other -- and subsequent agreements about its denuclearization before the administration would be willing to get into a multilateral conversation with them? >> there are steps that north korea can take. easing tensions with the south is one such step.

ceasing provocative actions is another step, showing a seriousness of purpose and following through on its commitments. so there are things that we will be looking for from north korea that show us that further dialogue would be constructive. >> commitment on denuclearization? you didn't actually use that word, so may be other commitments that you're thinking about -- >> yeah, following through on its 2005 joint statement. >> p.j., on north korea, before the holiday was a very, very tense situation. i mean, they were actually talking about the possibility of war. and then all of a sudden, poof, it seems to be kind of back to a more stable situation. maybe stable is not the word, but it's quite different from what it was before. (laughter.) how do you explain that? i mean, what exactly is going on? >> well, explaining things in

the korean peninsula, particularly in the northern part of the korean peninsula, is challenging. i mean, we did take note of the fact that north korea, having issued some bellicose language, stepped back from that language and did not follow through. so we'll be watching to see what north korea does. so to some extent, what we're hearing publicly is promising. however, words have to be followed by actions, and we will be looking to see what north korea actually does, not just what it says. >> can you enlighten us -- moving on? the secretary's first official business of the year was to fly down to brasilia for the inauguration.

and i'm wondering if you can enlighten us as to the substance of the -- or lack of substance in the conversation that she had with president chavez. >> it was a brief encounter. the secretary and leaders were gathered together on the margins of inauguration of now brazilian president rousseff, and president chavez greeted her. she returned the greeting, and then from there she was with other leaders who joined in, from president santos of columbia to president pinera of chile, prime minister socrates of portugal. so it very quickly went from a brief greeting to kind of a broader, but still informal and brief, conversation. >> was there anything of substance said? did they talk about ambassadors, that kind of thing? >> it was very brief. i actually don't know what was talked about.

>> did they shake hands? you said he greeted her, and she reciprocated. was it a handshake, a bear hug -- >> it has been described as a handshake. i have no reason to -- i'm sure it was not a hug. (laughter.) >> follow-up. thank you, mr. crowley. do you see this as a positive sign from venezuela to the u.s. or from the u.s. to venezuela, that it could be in any way -- will improve relation between both countries? >> well, we are interested in good relations with venezuela, and obviously that involves, among other things, having ambassadors at posts who can help to manage that engagement. as we said late last year, we regretted that venezuela has withdrawn agrément regarding our ambassador -- our nominee at the time, larry palmer. and as we've confirmed, we've taken action in response to that.

>> but what will be the next step after that? so ambassador alvarez leave washington, so there is no u.s. ambassador to caracas? how do you foresee the future? >> well, that's what we'll be evaluating going forward. we believe it is important to have an ambassador at post, able to engage governments directly, in this case, the government in caracas. we regret that agrément was withdrawn on ambassador palmer. we thought that he would be an excellent interlocutor to help improve relations between our two countries, but we will evaluate where we go from here. >> are you going to think in another possibility, i mean, that the -- no ambassador palmer, but another possibility, another ambassador, another designee? >> i mean, that -- these are issues that we will be evaluating with the new year.

i believe that larry palmer's nomination formally expired with the end of the last congress, so among the issues that we'll be evaluating is what to do in light of that and the step that venezuela unfortunately took. >> so his status is that he's no longer the nominee? >> we will have to re-nominate an ambassador candidate. >> and it didn't need to be formally withdrawn? it just expired? >> no, it just expired. >> yes? can you say what senator mitchell is here today. he is here for it least one meeting. we will be following up on the

working level activity of last month. our focus is engaging the party is and using that as a basis to move forward. the blame squarely on the palestinians for the failure of >> look, we haven't changed our ultimate goal, which is a framework agreement on the core issues. to get to that goal, we will be engaging on the substance of -- behind this effort, see if we can't close the gaps in the coming weeks and months. at some point to get to a framework agreement, the parties have to return to direct negotiations and -- but right now, we will continue our working-level efforts to see -- on the core issues.

>> many other -- >> despite your statements saying that we hold mr. barak -- ehud barak in good standing, the israeli sources insist that there has been, at very high levels in the american administration, an expression of vocal displeasure with mr. barak. could you again address this issue? i know you have, but could you again just -- >> well, i mean, it's not for us to get inside israeli politics. i think it was our view that yesterday's story in haaretz was more about political mischief than real substance. we have the greatest of respect for defense minister barak, and we will continue to engage him on the full range of issues between -- within our relationship. nothing has changed there. >> can you explain -- prime minister netanyahu has said that dennis ross will be traveling to the region at the

end of the week. is senator mitchell going with mr. ross? >> well, regarding dennis ross, any travel plans that he have, i'll defer to the white house. george mitchell has no immediate travel plans. >> i mean, why -- i understand the desire to defer to the white house, but it does seem odd if a senior nsc official is going there that you guys can't even say whether that's right or not, or why mitchell wouldn't go too since -- >> no, i'm not saying it's wrong. i'm just simply saying that on the -- on travel arrangements for dennis ross, i'll defer to the white house. he is on the national security staff. >> okay. but if it's not wrong, why wouldn't, given that senator mitchell has -- is the special envoy and has the responsibility, announced by the president on his first full day in office, to work on israeli- palestinian peace, why wouldn't he be going too? >> well, arshad, there are a

number of people who engage on these issues. george mitchell is one. he is the special envoy. but there are others. dennis ross has middle east peace within his broader portfolio. he has experience with these issues. i wouldn't see this in zero-sum terms. >> were you aware of this protest that happened at ambassador cunningham's house? at his residence in tel aviv over the weekend, a bunch of protestors tried to, quote-un- quote, "return teargas canisters" that were fired at them that led to the death of a protestor. >> i'm not, actually. >> okay. the reason i ask is that the israeli police say that some of the teargas canisters were still active and that they were treating it as an attack on a diplomatic facility. >> and -- >> can you -- >> -- we certainly support the investigation. i mean, i am aware of the

episode in terms of the teargas, but i'm not aware of the protests. but i'm -- we understand it's being investigated. >> do you -- so you -- i'm sorry, you're aware of the protest at the ambassador's residence or -- >> no, i do understand that there was teargas that was led off in conjunction with a protest -- i didn't know the location of the protest -- and that i believe at least one person was killed as a result of that. and i believe it's being investigated. >> well, this was -- this is -- there are two separate incidents. >> okay. >> there's the one where the teargas was fired and then there was this one in front of -- can you -- >> i did not know anything about the other -- >> okay. can -- is it possible to check to see if you guys are treating this as an attack on one of

your diplomatic facilities? >> okay. >> thanks. >> can we go to pakistan? >> can we -- middle east, middle east. >> (inaudible) on the palestinian issue for a second, how do you coordinate, or is it -- how is it normally coordinated between mr. ross and the envoy? i mean, do they work independently of each other, or do they coordinate their travel plans? i know you said (inaudible) i understand that. >> it's very simple. we have a -- we're fortunate to have a significant number of people who have experience in this region. george mitchell is one, david hale is one, dan shapiro is one, dennis ross, and others. and they're all engaged on these issues on an ongoing basis. the team is well-coordinated, and the fact that at one point, one or more figures would be involved and at another point, a different set of figures would be involved -- this is testament to the importance that we give to these issues. and we continue to make it as arguably the highest priority that we have. >> what is the update -- >> just a quick one. >> what is the update -- the

view of the united states on the palestinian resolution that it's going to present to the un on the settlements? >> well, i can't comment on something that hasn't happened yet. we continue to believe that the parties need to resolve these issues through negotiations. >> just a quick one. do you see as the white house taking over the middle east peace process? >> i know there's always a temptation to -- >> let them have it. >> (laughter.) >> whew. (inaudible) questions anymore. >> one should not read -- these are difficult, complex issues. the president is fortunate to have a broad array of officials who have experience in these issues and are fully engaged in trying to resolve them. >> prime minister netanyahu -- >> pakistan, can we -- >> hold on. >> prime minister netanyahu reportedly told his cabinet that the -- he was surprised that the offer for -- the conditions for a three-month extension were

withdrawn at -- was that your understanding before the announcement, that they were willing to accept continual three-month extensions? >> well, i will defer to the israeli government to explain their position. as we indicated late last year, we were focused on a moratorium extension. based on our engagement with the parties, for a variety of reasons, we felt that that was no longer, at this time, a basis to move forward. and we are focused on a different path at this point. >> let's go back to the un resolution for a second. have you told the palestinians that you will veto such a resolution? >> i'm not going to detail our conversations with regards -- >> well, have you talked to the palestinians about their plans? >> this concept is not new. >> right, and have you talked to

-- >> all right, look -- >> have you talked to them about it? >> as i said, this concept is not new. we've talked to the palestinians on these issues for some time. >> right, but in this specific instance, in terms of what they're planning to do in the immediate future, have you spoken to them about their plans? >> have i -- have we spoken to them this week? >> well -- >> i can't say we've spoken to them -- >> -- since they started telling people that they were going to do this. >> the palestinians are familiar with our point of view on this. >> the chinese foreign minister yang jiechi is in town this week -- >> all right, hold on, hold on. you're -- we'll go to pakistan first, and then we'll -- >> are you concerned about the situation in pakistan and what's happening with the coalition government there and especially the timing of it? because it seems like it's very much a big distraction over there when the u.s. would really like to focus on militants -- >> i mean, this is about internal politics within pakistan, which has a parliamentary system, and you have a coalition government, and there are -- there's activity within that coalition, and the government is working to clarify what their support is.

we'll continue to work with the pakistani government. we're building a strategic relationship with pakistan, and -- >> but as the political wrangling continues, don't you find that it's diverting attention away from where the u.s. would really like it focused, which is the battle against militants? >> well, i mean, a civilian government, we think, is essential to the future of pakistan and to building institutions of government that can transform the relationship between the pakistani people and the government. so we continue to support the pakistani government. i can't say at this point that the fact that they have this current political situation necessarily distracts them from what they're -- what else

they're doing. >> will you continue -- >> a follow-up to that. you're asking the pakistani government to do things that are not necessarily very popular in pakistan. one of them is the fight against the militants, which -- in the drone attacks, which are not particularly popular. others are the kinds of economic reforms and particularly tax reforms that they would need to take to keep to their imf commitments. having a pakistani government that appears to be tottering, given that two of its minority coalition partners have bolted from the federal government, surely doesn't make it any easier to win public support for some of the policies that the united states would like to see pakistan take, both in terms of fighting the militants, as kami said, or on the economic front.

>> well, i would say, arshad, that these are decisions for the government to make, and these are decisions that are in the long-term interest of pakistan. so we're not asking pakistan to do something that we do not feel is in pakistan's interest. fighting extremists within its borders that is a threat to pakistani civil society is definitely in pakistan's interest. getting its financial house in order is definitely in pakistan's interest. building and expanding the capacity of civilian-led government in pakistan is definitely in pakistan's interest. but the government obviously has -- is confronting a challenge within its coalition. that -- these things happen in parliamentary systems all the time. >> and you don't think that

makes it harder for them to do those three things that you've just described as being in their interest -- fighting extremism, pursuing economic -- >> no, we are going to encourage -- we are going to continue to work with the pakistani government and provide the support that we've outlined to help expand its capacity, address the challenge inside its borders, and help put its finances on more solid footing. >> but you're not concerned that this is a distraction? >> the -- >> for them? >> by every indication the government is taking steps to deal with this political situation. this is how coalition governments handle these issues all over the world. >> so you see it as a good thing and normal part of the political process -- >> no, it -- >> -- and not something that's going -- that could possibly have any impact at all on what you hope to -- what pakistan's going to do? >> well, thank you very much, matthew. (laughter.) >> well, i mean, it just seems a little bit bizarre to me that -- >> no, no, no, again -- >> -- you're saying that you have absolutely no opinion on what -- no concern at all when the government is in crisis and this is your top -- you need

this government, you need this country as an ally. >> we continue to work closely with this government on the issues that we've outlined as part of our strategic partnership. >> yeah, but i don't understand how -- it doesn't make any sense for you not to be concerned about something like this. >> is that what ambassador haqqani -- >> if you weren't concerned, i mean, that's kind of a -- it would appear that that's some kind of a dereliction of duty if you didn't have any concerns. i mean, if you just think that it's oh this is great -- wonderful, look at how politics is playing itself out in pakistan, i mean, that just -- that doesn't seem to flow. >> we understand that the government is dealing with a political challenge within its coalition. we're watching it closely, but meanwhile we're focused on our long-term partnership with pakistan. >> your statement is exactly the same as the pakistani military which says there is no problem.

so will you be supporting the pakistani military if it steps in to keep the house in order? >> tajinder, now you're -- that's a great lead. >> no, no. they had a statement that there is no problem, and you are giving a statement there is no problem. >> i'm certainly not going there. goyal. >> p.j., just to follow -- let's see -- you had -- you have had many, many challenges as far as pakistan-u.s. relations were concerned -- drones and also terrorism and many other problems in u.s. image. what i'm asking is, as far as recent development in pakistan is concerned, have you, anybody from this building or from the u.s. embassy in islamabad spoken with the current government or the opposition or any parties in pakistan? >> (inaudible) all those conversations going back -- >> yeah. ambassador munter engages the government on a daily basis. he and his staff engage opposition on a regular basis. i have no reason to think that they haven't done so today, just as they would any other

day. eli -- hold on. i know where you're going, so we'll go to china next. >> thank you. chinese foreign minister yang jiechi is in town this week. he is invited by secretary clinton. can you give us some details on his visit, the purpose, and when are they meeting? and also, on north korea, like we just said, suddenly things seem to calm down over there. do you think china has played a key role in helping stabilizing the situation over there? >> well, foreign minister yang is here. he will meet with secretary clinton on wednesday. i'm confident that north korea will be among the topics discussed as -- both here and in beijing, where ambassador bosworth will be later this week. i would say among the topics to be discussed on wednesday would

be ongoing plans for the state visit by hu jintao later this month. but there's a range of issues that i'm sure they will discuss during their time together. >> a follow-up -- yeah, i, tonight, a debate of the republican national committee. this tonight at 8:00 p.m. here on c-span. tonight, on the communicators, how the federal government technology policy affects high- tech companies. with ray ramsey, president and ceo of technet c-span2. the 112th congress doubles in this wednesday with both the house and the senate coming in at noon eastern. the house will elect a new

speaker. members will also boat on house rules for the next few years and a number of motions. the new houses made of put you under 40 two republicans and 193 democrats. live coverage on c-span. in the senate, they live quorum to bring all senators to the fore for the bus to the floor for the swearing in of new senators. the senate is live beginning at noon eastern this coming wednesday on sees them2. -- on c-span2. now i look at social security on today's ". washington "" scholar andrewa at the american enterprise institute, wrote this piece, making the case for raising the retirement age. what economic impact would that have? guest: social secury benefits

you can claim as early as 62, even though the official retirement age is 66. if you claim benefits early, you take a 30% benefit cut. that lasts throughout your life, not just until you reach the full retirement age. when social securty started, we could not claim benefits at 62. the earliest retirement age then was 65. now that is the most common age at which people claim. the problem is, if people have plenty of money for retirement, that is great, but the problem is people do not. the question is, does social security have enough money to support those people? the typical person will live around 82, 83, so they are spending about one-third of their life in retirement. i am not sure that is something

wean afford. if we push the retirement age back a little bit, it will help taxes, but it will also mean a much easier retirement. host: in "u.s. news and record" there is an article talking about the retirement age. they write -- are you saying we should do this immediately, or how? guest: one of the nice things about social security, in general, any changes are likely to be phased in over a long period of time. the normal increase it is from 65 to 67. that was passed in 1983 and did not begin until 2000 and will not be completed until 2023.

so we have this lead time for people to adjust to it. especially today, in a recession, you do not want to say, all of you who are 62 now need to work until you are 65. i think in correcting people to stay in the work force longer will help them, the economy, and the federal budget. host: in the near term, social security is not in trouble phili. phillip moeller writes- he goes on to write this, about rising -- raising the retirement age --

guest: talking about social security's overall plan for help, you are right, the plan is solvent around 27. after that, you would have re cuts. for every retiree, every survivor, every disabled person. it is a pretty big problem, loing out over the long term. the question about thinking about different from mortality, -- what people do not realize is the typical person claims retirement early is not someone who has a serious health problem, not someone who has

lost their job. only about 15% of people cite either poor health or unemployment has reason for claiming early. for most people, it is a choice. we can structure the benefits and policy to protect the people who need it the most by letting people who cannot claim disabilities early, while also encouraging people to work longer. host last phon call. and junior from the low opinion, texas. caller: i have called every senator, congressman, every governor of the state of texas. i can sw them on a diagram exactly how to do everything. there is nobody that will return

my call. if you would, c-span, anybody that is a congressman or senator, please have them call me. all the well educated people up there, all those professors will agree with me 100% -- at least 98% of them will. your ok, so let's get to idea specifically? caller: i cannot explain it over the phone. i can show them on a diagram. host: let's talk about the baby boomers that are set to retire in 2011. this is the first year that we will see the baby boom

generation takes security benefits. guest: the first baby boomers turn 65. this is the first year they can claim that medicare benefits -- claim medicare benefits. we have about 10,000 people leaving the work force per day. that means 10,000 more people collecting benefits, 10 doesn't you're contributing to these -- 10,000 who are n contributing to these benefits. it is really this budget tsunami coming at us. we have to find a way to smooth out these things out. host: what does it mean that one out of three working americans do not have retirement savings beyond social security, and many of them rely totally on social

security alone. guest: a lot of people depend heavily on social security for their retirement income. part of the that is a shame -- as i view it -- it is not just low income people. it is middle and high income people who should be depending less on social security. i think it needs to more generous for those people at the low income end, but middle and high income people will have to save more because we are going into a tighter budget picture in the future. host: next phone call. angela. caller: one thing you do not hear people talking about, he is talking about paying or old people on social security. how about the kids going into

welfare? if people think that being poor is so bad, why do they keep on bringing children into this world? host: how old are youare you taking social security benefit caller: i do not qualify for that yet. i have worked as a waitress, clerk, all of my life. i see the girl next door smoking cigarettes on her porch, talking on the phone. she has four kids. i do not have any kids. we reward them for not doing anything. host: you consider yourself a republican, you have voted republican?

caller: yes, but right now, i am not sure because they could not even give us $250 to have a nice christmas. meanwhile, we are letting the rich people keep more money. host: not a popular option, ising the retirement age. guest: she is saying i have a comfortable job, which i do. there are a lot more people who have physically more demanding jobs. for those folks, working longer is harder. no question. at the same time, in the past, we did work longer. the typical person did not start claiming until the age 68 and a half. these are times when people worked on farms, coal mines,

steel lines. one advantage of having a service economy is it is less demanding on people. if people in the 1950's could work to 68, peoe in 2020, 2030, could probably work until 65. that does not mean there will not be exceptions. disability is there for people who cannot truly work. host: cleveland, ohio. kneel on the independent line. -- neal on the independent line. caller: good morning. i am i diabetic. i had to have my right thumb cut off, my right leg below my knee. my leg, theyant to amputate my left foot because it is black. i am also legally blind with my

vision. i have been on disability retirement social securi for the last eight years and i am afraid these republicans are going to set me out on the curb. i hope obama can negotiate so th i can at least keep my wheelchair. guest: there is 0% chance you will be kicked to the curb. one of the truisms of social security reform -- once people have claimed the benefit we do not kick them off. what we are talking about with reforms is changing benefits over the long term. i mention changing the retirement age. from the time it was passed to implemented, 40 years. what people need to remember is, if you are near retirement, nothing is going to change for you. for younger folks, we need to find different ways of financing the program, benefiting people,

which will target things better, and retain the safety net that people truly need, but encourage people to work longer, saved more for retirement. host: john on the democratic line. delaware. caller: i would just like to know -- hello? host: we are listening. caller: i just want to know how come social security is giving someone like me, 47 years old, a hard time getting it when i really need it? i have no savings. the company i worked at fired me because they did not want to report an injury at work, so they fired me. i need help. the government, all they want to do -- they are not helping. host: an estimated 156 million

workers, 93% of workers, are covered under social security. guest: to touch on john's question, he is in the process of applying for disability. this is slightly different, but the application is difficult, long. when i was at the social security commission, there was a lot of work going on to streamline that. you do not want people waiting for two years for a decision. it is a difficult task. the administration needs to follow what the law says, and the law is somewhat complicated. when we think about retirement, social security was intended to be one leg of a three-legged stool.

you have your pension from your employer and then your savings. more a more, people are relying on social security. we want to encourage people who can save more to do that. so things like universal 401k plans. for the typical person, that makes sense. a lot of people basically forget to sign up. if everybody saves what they should for retirement, that makes social security's john a lot easier, so that it can focus on the poor people who truly can knock afford anything.

guest: the numbers you are siding, availability of pensions. that is completely correct. those are basically going away for a variety of reasons. they are difficult for employers to manage, they can be risky, but also, a more mobile work force th wants to shift from job to job. so a defined contribution is much better for the types of workers. just because people do not have benefit does not mean they havto not have a pension whatsoever. we to make sure people have more savings. host: here is a week from a viewer -- tweet from a viewer --

guest: there is a case to be made. we know that the personal savings rate has dropped a lot over the past 50 years or so. a number of studies have said one of the reasons for that is the increase in social security and medicare benefits. if that is coming through in common programs, rationally, people would save less. -- entitlement programs, rationally, people would save less. so are we filling in the cab for people who cannot work longer? the question is, how do we provide for those people who need it, and are we doing everything that we should? host: next phone call. republican line. john. caller: if a person retires at

62, compared to 65, 66 -- here are some hypothetical numbers. at 62, social securityould be $1,100. if you decided to retire at 66, $1,800. how many more years would you have to live and draw social security to make up for the money that you did not get, if you were 66 -- 62 to 66? guest: i am not sure if i can do the math precisely, but this is a common exercise people go through when they think about retiring, the break-even age? at what age do i need to retard to make up for those lost

benefits? -- retire to make up for those lost benefits? it is somewhere around the age of 78 or so. a person who does the light claiming it is, in all likelihood, going to get that money back. but i think that is a bad way to think about it. at what choice do i get the most money? if you delay from 62 to 66, and you increase your benefits from all $700 to $1,800 a month, that will last for your life. these are non-trivial chances. having that extra $700 a month when you are 90, 95 -- at that point, you do not have the option of going back to work. so going back to work is not a

gamble. it is essentially the protection against pover in old age. caller: i had heard that you would have to live another 10, 12 years to draw your moneyut at 62. it depends on your lifestyle. i smoke. chances are, i will not live to be 80, 90. i always conserve money in my home but it depends on your situation. some people should consider drawing early, if they do not have any outstanding bills, and kind o relax for a little bit. guest: i will just make two points. even for those people with a short life expectancy -- i smoke. i am a man, rather than a woman.

even for those folks, there is a lot of uncertainty for how long you are going to live. having that extra benefit protect you from runni out of money in old age, if you live a long time. a second point -- what i would ask -- as if you are married. if you delay retirement, that delays the benefits that you might get, as well as the benefits that your spouse might get. even if i knew then i would die one year from today, delaying claiming, that money would go to my spouse. host: sal is a democrain new york. go ahead. caller: why don't we just open up the reserves and sell our own gas and all the money the government makes from gas? they could have plenty of money to fix the deficit and put more

money into social security and we may not have a problem. the only thing that nobody takes into consideration, when you want to buy extra insurance, it is so high you cannot afford it. i just had a lot of dental work and it put me in the poorhouse. it gets extremely expensive. guest: certainly, you want to do everything you can to have a strong economy. there are a variety of things we can do to have the strongest economy we can. that means more resources to support the growing number of retirees without taking money away from #folks. we do not want this to be a zero sum game. certainly, having a strong economy makes sense. i cannot comment on your dental insurance. host: here is an e-mail from

bonnie in texas. guest: no way the disabilit formula is, it is based on the retirement formula. general, you get the benefit you would have received had you claim that the fl retirement age. if we raise the retirement age or increase in early eligibility, that is not going to harm disabled people. they will still that the full benefits they have coming to them. at the same time, it is not true to say that disability will pay more than retirement. people who are disabled 10 to short work careers, often people with lower income. but the disability program, you

would not want to be on disability benefits, if you could avoid it. host: stephen writes -- guest: that is one reason why we could see a natural increase in the number of people who retire. we have already seen that in the past couple of decades. we hav people leaving the work force rapidly and businesses need to fill tse spots. we are not seeing that today because of the unusual levels of unemployment we have, but going over the next 20 years, we will have more demand for older workers. some of this may solve itself. whate want to have is policy complementary to that, that said to older workerswe want you to stay in the work force longer.

the key is to keep people in the work force longer. if people can keep their same job for a few extra years, beverley does pay off. host: south bend, indiana, mary on the independent line. caller: i've been listening to you talking about keeping peopl on the work force longer. i am a 63-ar-old widow on a widow's pension and i would love to go back into the workforce, but i find? social security penalizes the amount of money i'm able -- social security -- but i find that social security penalizes the amount of money and able to make. guest: what mary is referring to is something called the retirement earnings tax. i'm actually glad she brought this up it gives me a chance to dispel some myths concerning social security tax. if you are someone claiming early benefits, there is a certain level of earnings

around $14,000, and if you earn above that in a given year, your retirement benefits are reduced by about 50 cents for every dollar that you learned. people view this as a 50% tax. people worked right up to the $14,000 earning limit and stock. you do not want people to do that. what people do not know is that you lose earnings due to early retirement, once you reach full retirement, your security is raised to make up for that. it is basically a delay in benefits. the argument is that if you are working, you do not need the money so much, so we will put it off to a later time when you really do need it. if you are doing the earnings test, you will get that money back later. once you reach 66, they will raise your benefits to account for it. personally, i think it is so

confusing that they should just get rid of it and tell everyone to work as much as they can. host: andy in chicago says -- guest: the first point that he makes, when one person retires another person is hired, in a certain basic case that is correct. but that implies there are only so many jobs to go round and that we want people to retire so we can get jobs for younger people. this is the debate you had going on in france several months ago where college age people we protesting against the raising of the retirement age. it is not because they work sympathizing with their grandparents so much, but because they thought they were going to take their jobs. this idea is that there's only

so much work to go around. this is not true. the idea that there are only so many jobs to go round, i just cannot think thais true. host: va, derica, republican line. good morning. caller: earlier, your guest said that when a person began paying social security, they can dip to the life of the fund as a trust fund. i wonder if that is a pile of cash somewhere. if they go to reach into that, or will they actually be reaching into? guest: there is no gold in fort knox that is going to be used to pay off the trust. it is essentially bonds that the government has issued to itself. when social security runs a surplus, as it has in the past, that money is given to the

treasury and social security is given a bond in exchange. when social security goes to redeem the bonds in the trust fund, this -- they have to produce the cast -- the cash, which means they have to raise the money. the trust fund is in days of no economic meang. it is not real savings there. as long as there is a balance in the trust fund, social security will legally continue to pay full benefits. once the trust fund runs out, as it is projected to do in 2037, legally, social security cannot pay full benefits. it is not allowed to borrow money to pay you your full benefits. it must cut them. the trust fund has no economic meaning. i cannot think building up a trust fund will help us in the future. it just has a legal meaning. if you to think about your credit card statement, that tells you how much you have

barred from the credit card company. the trust fund says how much of the government has barred from social security. the government has to pay debt back, but it will pay the back by getting money from you. people should not be complacent, thinking that the trust fund will make these problems go away. host: next phone call is from tommy in maryland. caller: i rired about six years ago. january 28 will be six years. i have been waiting all of this time to collect social security. i am only 61 right now. i will be 62 in august. i worked more than 35 years in one job. i worked more than 40 years. to listen t our our politicians to say we should work to an older age, a lot of people cannot do those jobs. you cannot drive a truck if you are not in good enough health. you cannot lay bricks.

some boca not work until they are 65 or 70 -- some people cannot work until they are 65 or 70. guest: i think it is a good question. i guess the point of your question that you have to ask yourself, clearly, we know people that cannot work longer. the question is, how many of them are they? if the typical early retiree is somebody that cannot work lager, the answer to that is basically, no. -- cannot work longer, the answer to that is basically, no. the golden age of american industry, people were to the working in backbreaking jobs. today, mor people working in offices. and are not saying that it is easy work. but to think that someone cannot

work beyond 62 in an office when people used to work in factories, that justice not make sense. i am saying that we need to have policies that account that the typical person can work longer and to try to encourage them to do that. host: here is a tweet from of your thats commenting on our discussion about whether or not someone retires, whether that opens up a job. guest: that is certainly possible. the economy is a big animal. trying to break it down to a very simple case of what is going on is hard to do. to go back to an earlier caller, we want to do is grow the economy, have a strong economy that produces good jobs and good income for as many people as possible. but the idea that we have a zero sum game, only so many jobs to go round, is not only

empirically falls, but it is also damaging to our ability to solve these problems because people see us not as coming together to solve a problem, but it is a fight for resoues. host: but go to an indendent in mount vernon, washington. caller: mr. biggs is reassuring people, and i appreciate that, but recently a friend with the disability who worked all his life, he has diabetes. and the state of washington because of washington's deficit problems send everyone a letter in december that there would be no more foot care, no more hearing aids, no more eyeglasses -- i think there were five thin on the list -- and he was in a major panic. he has been looking in the last few years on whether he will have to have his feet amputated or not. he was in a panic trying to get his eyeglasses before the e of the year because now we are in january and this has gone into

effect. this has happened to everyone in washington state on social security. there are a lot of things out there. a man you're reassurances are nice, but it is coming at us in different -- and if your reassurances are nice, but it is coming at us in different ways. guest: 1 to qualify for social security disability, i believe there is a one-year waiting time for in, but afterhat you are automatically qualify for medicare. that is tru of someon who is below 65 or older. you automatically qualify for medicare. if he has reached that point where he is eligible to medicare, -- billone -- eligible for medicare, that will assist his problems somewhat. i'm not saying that there are not problems with the state in general. host: in tennessee, jackie on the republican line.

jackie? i think we lost her. we will move on to sherry in nsas city. caller: good morning. this really ritates me because social security is basically an easy thing to solve. you raise the caps on fica and there might be some other tweaks. i know 7% of the people would be willing to contribute a little bit more because social security is not insolvent. it is probably the easiest program -- 70 percent of the people would be willing to contribute a little bit more because social security is not insolvent. it is probably the easiest program to fix. guest: when you retire, your benefits are only based on your earnings. someone earning more than that cap is not getting higher

benefits. the idea was that social security should be a limited program and people of higher incomes should be sitting on their own. franklin roosevelt really tried to make the program different than what we call relief, or welfare today. the idea is if you have a very progressive tax structure, people would not see it as 8 -- has an earned benefit, but as welfare. one thing going back to the trust fund issue we touched on earlier, it wouldtill generate big surpluses in the short term, which will get spent on other things. then in the long term you will still have a deficit to make up. the second point, ihink there is a limit on how high a tax can and should be on the earned income individuals. it is effectively going from around 35% of two or around 41%.

the medicare tax for higher earners has increased, i think it is between 5% and 6%. state income taxes can be as high as 10%. if you apply social secuty tax on top of that, you can have individuals in higher tax states, oregon or white, were literally paying off 60 cents of every aitional dollar they earn to the government. at that point, ani personally just think that is too much point. philosophically, i do not agree with that. we have to think of these solutions in context of everything else going on. we have other problems resolved. medicare is aenormous problem. we have not fixed any of it, basically. surely, there will be enormous tax revenues going there.

if we reduce benefits, people will react by working longer and ving more. low-come people, are a bit different. if we cut jürgen affair -- your benefit, it is a lot harder to make up the difference. -- if we cut your benefits, it is a lot harder to make up the difference. it seems to make sense that use of social security more by reducing benefits to free up revenues where you will need them on medicare and medicaid. guest: andrew biggs is a scholar at the american enterprise institute. he also served in several different roles of the social security administration, most recently as the deputy commissioner in 2007. last fall called here for mr. biggs. columbia, tenn., will on the independent line. go ahead. caller: good morning, c-span. we sure appreciate all the c- span does for us, especially the transparency for all three

brches of our government. by the way, i want to compliment you, greta. your the mona lisa on c-span. we appreciate you being -- you are the mona lisa on c-span. do we appreciate you being there. first of all, free enterprise is what built this wonderful nation of ours. from the 1950's all the way up to 2000. this is what the republicans have been telling us, but unfortunately, it is about to destroy america today. capitalism and free enterprise is what got us- got monopolies is so far out of order. and you have trouble with the economy because of what is going on in all three branches of our government. in major reforms, both in immigration and the health and financial reforms, they are all affected the middle class worker. i am so thankful that i have my

social security. i have reached my retirement age and and getting good benefits from it. but for people coming up behind me, they are going to be really crippled for what people like walart has done to all of these small businesses in america. host: let me ask you before andrew biggs response, you said you were able to live on your benefits. have you had to cut back? guest: no, i am very thankful for america and the entitlement programs. because i'm a retired schoolteacher, i have a small pension from that. plus i have my social security, too. they both have made it comfortable for me and my family. guest: if you looked around the world and you look through history, free enterprise and vibrant economies have done more

to pull people out of poverty than anything else. it is a strong economy that pull people out of poverty, provides them with good jobs. it also provides us the resources to have programs to help people who cannot help themselves. certainly, when you go to the specifics of different bills, i think there are issues there. but a broad case, it is free enterprise that helps make the resources, generates the resources, it helps keep people out pay. that is an important thing to barrett -- keeps people out of poverty. that is an important thing to bear in mind. >> thank you very much for talking with our viewers. >> the new congress gets sworn in this week. more about that in a moment. at the end of next week, the