on our broadcast here tonight, a setback for the american president as a deal falls through on the world stage, and it's bad news for jobs back home. tax deal. here at home, why the white house tonight may be ready to keep those controversial bush tax breaks for wealthy americans. home at last. the carnival cruise that became a nightmare, well, they're all back on dry land tonight, and do they have stories to tell. and the spies next door. remember the russian spy ring discovered operating here in the u.s. this past summer? tonight, the plot thickens.

and "making a difference" on this veterans day for american soldiers, home from war. "nightly news" begins now. captions paid for by nbc-universal television . good evening. it's already being called an embarrassing setback and it happened to president barack obama today on foreign soil. the president went on this big asian trip talking about bringing jobs home. he's in seoul, korea at a g-20 summit of world powers, and he went into this thinking he was going to sign a trade deal with south korea today. but that didn't happen. what happened instead on the other side of the world will bounce right back here to the u.s. our own lee cowan is traveling with the president. he too is in seoul tonight. lee, good evening. >> reporter: brian, the backdrop here at the g-20 discussions are getting more tense.

on the one hand, you have the inability of the president to secure that free trade deal with korea. and despite increased tensions with china over their currency manipulation, there doesn't seem to be a lot of movement there either, sparking fears of a trade war. the president began his veterans day with cheers from u.s. troops commemorating the 60th anniversary of the korean war. but it was a decidedly different mood in his meeting with china's president as mr. obama made it clear he thought china wasn't playing by the rules. the white house has complained china is unfairly manipulating currency keeping it low to make exports more attractive and in the process, costing the u.s. jobs. >> if individual countries are engaging in practices that are purposely designed to boost their exports at the expense of others, that can contribute to problems as opposed to solving them. >> reporter: but china made it clear it had concerns over the way the u.s. was handling its own economic crisis, especially the fed's decision to dump $600 billion into the economy, which some say is the same kind of

monetary manipulation the u.s. is accusing china of doing. the president's goal is to double u.s. exports over the next five years. a theme that's been dominant throughout his swing through asia. a centerpiece to that effort was to secure a free trade agreement with korea, a deal the white house says means $10 billion in increased u.s. exports as well as 70,000 u.s. jobs. but that too ended in disappointment as the president, standing with his korean counterpart, conceded their deal came up short, failing to meet a self-imposed deadline. >> we don't want months to pass before we get this done. we want this to be done in a matter of weeks. >> reporter: the sticking points were over u.s. auto exports. and limiting exports of american beef. but when asked about specifics, south korea's president tried to be polite. >> translator: i think that kind of question should be asked to me when president obama is not standing right next to me. >> reporter: in the wake of his losses during the midterm election, the deal was seen as a chance for the president to reach out to republicans who

profess to be free trade advocates, as well as business leaders looking for a break. >> if we rush something that then can't garner popular support, that's going to be a problem. we think we can make the case, but we want to make sure that case is airtight. >> reporter: that tension over china's currency devaluation is certainly expected to come up again. there's going to be a lot more closed door meetings today with 20 of the world's largest economies. but short of something major happening at the last minute, the president seems likely to leave here largely empty handed. >> lee cowan traveling with the president, starting us off from seoul, south korea tonight. lee, thanks. some questions come out of this, of course. our white house correspondent chuck todd is here with us tonight from our washington newsroom to answer them. so chuck, the president is overseas and a big bone of contention between the two parties this election year has been the bush era tax breaks. for mostly wealthy americans. one of the president's men said something about that today, made big news. fill us in. >> reporter: he did.

david axelrod, the senior adviser, basically hinted some sort of compromise is coming. they know it's coming and they may have to accept an extension of all of these bush tax rates for one to three years. now, he had to walk it back in two different publications because it made it sound like they had already capitulated and that upset some democrats. but this is a numbers game. number one, they expire at the end of the year. number two, the democrats don't have 60 senators, they don't have 60 votes in the u.s. senate and the reality is, there's a bunch of democratic senators that don't want to only vote on the middle class tax cut and let the wealthy tax cuts expire and be called tax hikers come the 2012 campaign. so they don't have the votes. and an extension is going to happen. the question is, is it permanent for the middle class, an extension on the wealthy or an just an extension for all of it where they will do this debate all over again in one to three years. >> now to something everybody has a stake in.

every couple of years, some important people come forward and say to the american people, this is the time. we've got to get our financial house in order. just yesterday, this panel, republicans and democrats, appointed by the president, deficit reduction, came out with 18 things, 18 recommendations, and they said, no one is going to like anything on this list. where does it stand? could this be the time? where's the political will going to be found to do something real this time? >> the political will is going to have to come from the public in this case. they're frankly looking for cover. in private conversations, you talk to the democratic deficit hawks and the republican deficit hawks and all admit, you know what? what they did in this joint presidential commission was pretty bold and aggressive, and pretty doable. the question though, will there be political will among those publicly and will the public support this idea and that's the big question. if they do and the white house

grabs it, brian, this thing could have legs. >> all right. chuck todd, our chief white house correspondent. in our washington newsroom tonight. chuck, thanks as always. one more note. one man in the news, david axelrod will be among david gregory's guests sunday morning on "meet the press." we go to the west coast in san diego where there are 4,500 people tonight very happy to be on dry land. that carnival cruise liner that became a dead in the water nightmare voyage is now safely tied up at the dock and the passengers are talking. you can say that again. hey, miguel, good evening. >> reporter: good evening. after a fire in the generator room, the "splendor" was afloat without power for three days. 3,3 persons, 1,1 huh crew members with no access to hot food or hot water, and even

without restrooms for some time. now they're all back on shore and they're relieved to share their stories. pulled by tug boats, escorted by coast guard cutters, it made san diego harbor at sunrise after three days adrift in the pacific. passengers raised their arms in victory as family and spectators welcomed them home. on land, they shared stories and home video of a dream vacation sunk at sea. >> the bed started vibrating really bad. >> reporter: the harlans were celebrating their anniversary with their children when they smelled smoke. >> we all went outside and saw black smoke coming out and they sounded the alarm. >> reporter: the ship's crew tried to calm passengers. candas was married saturday and made the best of a difficult situation. >> it was a disappointment on monday. but after monday when we figured we were coming back and everything was over, they were giving us a free cruise, it was great. >> reporter: not everyone shared her enthusiasm. with no power, there was no

refrigeration. marquis says it was a nightmare. >> i'm not sure if i'll ever go on a cruise again. it felt like "gilligan's island" or something. >> i never seen hot dog salad or green bean sandwiches. >> reporter: michael hall planned this cruise for two years, but never expected his food to be delivered by the u.s. navy, canned spam. >> we're going home. but the "reagan" was really cool. i got a bunch of photos of it. >> reporter: for ken king, who turned 42 today, the birthday celebration began last night with warm beer. >> yesterday they opened the bar and were giving everybody free alcohol, which i think helped a lot, made everybody happy. >> reporter: edward, a navy veteran, has been on many ships. he loved every minute. >> i'd go back tomorrow. >> reporter: carnival cruise lines says it's refunding all passengers and offering another free cruise. but tonight, brian, passenger reaction to that offer is mixed. >> miguel, thanks for that.

overseas tonight, there is big news out of iraq where the u.s. has invested so much blood and treasure and still has so much at stake. after eight months of political deadlock, there appears to be a deal for a power sharing government there with shiite, sunnis and kurds, and nuri al malaki remaining in the job at prime minister. our own richard engel told us from overseas today this is a big deal because iraq has been inching toward a new civil war, many fear. still, things got off to a rocky start. only three hours into the new session of parliament, a major political bloc got up and walked out. we'll keep our eyes on it. in pakistan, a massive car bomb destroyed most of a police compound in karachi, killing at least 18, injuring over 100. pakistani taliban says it detonated the bomb. back here at home, this is veterans day. the 92nd anniversary of the end of fighting in world war i. ♪ [ "taps" being played ]

>> members of the u.s. marine corps and vice president joe biden were part of a wreath laying ceremony at the tomb of the unknowns at arlington national cemetery. and in new york city, seemed like all 23 million veterans were in attendance, along sparkling fifth avenue. the largest of many of the parades around the nation today. it was an honor to have joined the veterans there today, who included four recipients of the medal of honor. on the other side of the country, two little boys went to a veterans day assembly at their school and it turned into a day they'll never forget. we have the story for you tonight from joe fryer of our nbc station king tv in seattle. >> reporter: at their home in washington, they know even when a soldier is away, heroes abound. >> they're my little heroes, yeah. >> reporter: she was amazed at the bravery of her kids, sam and

nate, and 3-year-old luciana. >> i love to kiss him. >> reporter: all three have stepped up in the absence of their big hero, their dad. he's been serving in afghanistan since last november and wanted to reward his sons with a veterans day surprise at school. >> my name is lieutenant colonel matt katacamo. >> reporter: the video message from afghanistan. >> we live at the edge of a runway. >> reporter: the boys know dad should be home by christmas, or if they're lucky, thanksgiving. >> thank you for everything you've done. we're going to be a family again. >> reporter: at least that's what they think. >> i've got a better idea. just stay right there for a minute. where's my boys. >> dad! >> reporter: some might tell you it's not nice to fool children. those people have never seen a moment like this. >> i'm really, really, really,

really -- >> i think i'm going to go crazy. >> my little heroes got their present i wanted them to have. >> reporter: it's a moment of heroes of all sizes. >> it's no longer surreal. now it's actually happened. the year's over. get back to being a family and a dad. >> reporter: joe fryer, nbc news, washington. >> starting with pancakes? >> yeah. >> how about that. our thanks to our friend joe fryer of king tv in seattle. when we continue here tonight, how you have responded this week to one very simple idea, downsizing your life and getting by with less stuff. also tonight, remember that russian spy ring busted over the summer? now a bizarre new turn in the story and a man on the run for his life. we also bid farewell tonight later on in the broadcast to one of the most recognizable faces in the long history of nbc.

as we mentioned, we're back with a new twist in a story that got a lot of attention when it first broke this past summer. the real-life ring of russian spies, one of them a high profile redhead who had been living right here in the united states among us. they were thrown out of here, sent back to moscow. but tonight, there's more. a reported russian double agent who blew their cover and is now on the run. the whole story from our chief foreign affairs correspondent andrea mitchell. >> reporter: his bond girl was anna chapman, hardly undercover anymore. most recently featured in the russian edition of "maxim" magazine. and selling her own app for people wanting to play poker with a virtual anna. now in a real-life thriller, the spy master in charge of chapman and nine other russian secret agents has reportedly defected to the west. identified in the russian press only as colonel sherbakov. experts say he may have been working for the cia for years.

>> that suggests to me that if the story is true, he was what's called an agent in place. that is to say he was working for the cia and perhaps the fbi, as well, for many years. but nobody knew it. and finally he decided the time was to get out while the getting was good. >> reporter: the ten moles he reportedly planted in the u.s. were traded back to the russians in a spy swap last july. ever since, chapman has been a moscow sensation, posing for photo spreads, an honored guest at the recent russian space shuttle launch, even marketed as an action figure. a former spy himself, prime minister putin told him the spies were caught as a result of a russian traitor. he said sellouts always end up in a ditch, either drunk or drugged, adding the other day one such traitor kicked the bucket exactly like that abroad. tonight, u.s. officials won't comment but don't deny they had a well-placed russian counterspy. if true, it's an intelligence

bonanza. >> he was in a position to know everything that was going on here that the russians were doing. >> reporter: despite talk tonight of russian threats to assassinate the defector, the cia and fbi have a long track record of creating new identities for people who come in from the cold. andrea mitchell, nbc news, washington. we learned today dino delaurentis has died. he was called by one writer one of the last great intrepid producers. he made some hollywood classics in his time. "serpico" was a big one, along with john wayne's last picture "the shootist." "death wish," "three days in the condor." the list goes on and on. dino delaurentis was 91 years old. we'll take a break. up next, doing more with less and how we apparently touched a nerve among so many women.

all this week here, we've been bringing you a series of reports that have apparently touched a nerve and especially among women. all the viewers who commented to us were women, except for one guy. we've called this "back to basics," it has to do with

getting by with less in life, downsizing your life during this era of downsizing any way in a lousy economy. we've asked you all week to write to us about it and so many did, including a slew of people on our facebook people. amy writes, hooray for this series. i've been preaching the idea of back to basics for years. and trying to get all my friends to live with less. we byway too much in this society, and life is much fuller without. from lidia, like we have a choice? if big business went back to basics, we wouldn't be in this mess. darellyn writes us -- and i really like this series. i have realized i have everything when i have less. judy writes, empty nesters. we downsized our things by numerous trips to good will. if we hadn't touched it in the past two years, out it went. next step, move to a house with no basement or attic. then sherry says, i lost everything in katrina. i learned to live with less real

fast. by the way, we still want to hear your stories, success stories, horror stories, post them on our website, nightly.msnbc.com. or on facebook. but we would love either way to hear from you. when we come back, "making a difference" for america's wounded warriors, one note at a time. ♪

we are thinking of our nation's 23 million veterans here tonight. and as veterans day 2010 draws to a close, we wanted to leave you with the story of some vets who found a way to soothe body and soul and they're sharing it with others who could use a little of the same thing. they're doing it through music. they're finding it's providing a different kind of great escape. nbc's kevin tibbles has the story tonight of how they are making a difference. ♪ >> reporter: the sound of healing. combat veterans who traded in their m-16s for guitars. >> you think you're going for music lessons but it's very therapeutic. >> reporter: derek spent a year

in iraq. he now introduces vets to the six-string, a non-profit called guitars for vets, founded by a milwaukee music teacher and a marine who came home from vietnam with ptsd. >> i can't say medication has ever given me the sense of harmony that i get from the guitar, holding it against my chest. >> reporter: soldiers, many battling the traumatic effects of war, are provided with free lessons. >> i would like to present you with your very own guitar. [ applause ] >> reporter: after six lessons, a gift. an instrument of their own. many donated or provided at a discount. >> it wasn't just an instrument, it was like a medal. >> reporter: so far the program has distributed 800 guitars, putting the healing power of music into the hands of american vets. >> what it really is about here is the positive human interaction and he just so happened to learn guitar along

the way. >> reporter: mike petty says it's helped him regain his memory. he was injured in an rpg attack in iraq. >> i still forget things all the time but when i play the guitar, i don't forget. that's really boosted my confidence. >> reporter: and with each note, individual achievement. but if a student stumbles, someone stops to assist. >> watch me play through it. i think you'll get it. >> just like in the service, you don't leave anyone behind. >> reporter: the camaraderie learned while serving one's country continues with a new band of brothers. kevin tibbles, nbc news, milwaukee. >> great story to end on this veterans day night. that's our broadcast for this thursday night. we want to add a special retirement farewell tonight to a morning television institution and a great friend and co-worker of ours around here, gene shalit. generations of americans would know that hair and that mustache anywhere on the planet and his

critics corners reviews were indispensable. gene shalit worked here at nbc for 41 years. well done, my friend. for now, for all of us, thank you for being here with us. i'm brian williams. as always, we hope you can join us back here tomorrow evening for the friday edition. good night. -- captions by vitac -- www.vitac.com breaking news out of oakland right now. protests have forced the closure of the bart station. there are dozens there upset over a shooting of a local man by oakland cops. they took their march to that station and that has forced the