captioning sponsored by macneil/lehrer producti >> woodruff: house republican leaders back the new budget deal, despite grumbling from both parties on ways it falls short. good evening, i'm judy woodruff. >> ifill: and i'm gwen ifill. also ahead this wednesday, the most popular pontiff in decades is "time" magazine's pick for person of the year. how pope francis has altered the image of the church around the world. >> woodruff: plus, lessons at night, and homework during the

day? one michigan high school tries flipping things around. >> it gets teachers asking, "what are the best ways for me to use my time and then what are the kinds of direct instruction that i could provide that could be digitized so that people could watch it again." >> woodruff: those are just some of the stories we're covering on tonight's "pbs newshour." >> major funding for the pbs newshour has been provided by: ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century.

>> and with the ongoing support of these institutions and foundations. and... >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> ifill: the new budget deal in congress drew support and criticism today. party leaders on both sides generally backed the agreement. but tea party conservatives said there's still too much spending. and democrats grumbled there's no help for the long-term unemployed. we'll report the details and hear much more reaction right after the news summary. the government's latest enrollment numbers for health care coverage showed signs of improvement today and the cabinet officer overseeing the effort urged the public to give it another try. >> to those who have been frustrated with the experience so far, we are asking you to come back.

>> ifill: health and human services secretary kathleen sebelius went before a house committee this morning with an appeal for those who've tried unsuccessfully to shop for a plan on healthcare.gov. >> i don't think there's any question that the flawed launch of the website put a damper on people's enthusiasm about early signup. we had a lot of visitors early on who got very frustrated and have not re-engaged. we have been inviting them back to use a newly improved site, and we're seeing some very, very positive trends in that direction. >> ifill: those trends include an h.h.s. report today that more than 364,000 people signed up for private coverage as of november 30. that's more than three times the number who enrolled by the end of october. but it's still far below the 1.2 million that the administration projected for the first two months. and, time is growing short. individuals must sign up by december 23 and pay premiums by december 31 to receive coverage by january first.

republicans at today's hearing argued the real story remains the number of people losing coverage they thought they'd be allowed to keep. committee chairman joe pitts of pennsylvania: >> some news reports have indicated that as many as 5.6 million individuals have had their policy cancelled. isn't it the case that on january 1, more americans will have their coverage cancelled than will have enrolled in an exchange? >> well, sir, i don't know where the five million number comes from. i know people have been told that their health plan doesn't necessarily match the a.c.a.- compliant plans; they are not in a grandfathered plan. >> ifill: sebelius did announce today that she's asked her department's inspector general to investigate what led to the massive problems with the launch of healthcare.gov. in ukraine, security forces withdrew from a protest camp today, after failing to rout demonstrators from kiev's independence square.

the protesters cheered as riot in buses. they're demanding the government reject russian pressure and improve ties with the european union. assistant secretary of state victoria nuland also visited the square. later, she met with president viktor yanukovych as well. >> there is a way out for ukraine, that it is still possible to save ukraine's european future and that's what we want to see the president lead. that's going to require immediate security steps and getting back into a conversation with europe and with the international monetary fund >> ifill: later, yanukovych offered to hold talks with opposition leaders, but they rejected the invitation and insisted again that he resign. the u.s. and britain have suspended non-lethal aid, including night-vision and communications gear, to rebels in northern syria. they acted after islamic front fighters, linked to al-qaeda,

seized bases and warehouses from the western-backed free syrian army. deliveries of humanitarian aid will continue. the body of nelson mandela is lying in state for first of three days, in pretoria, south africa. thousands of people joined the procession to view his remains today, so many that some will have to wait until later this week. we have a report from rohit kachroo of "independent television news," who's in south africa. >> first there was silence, then cheering as south africa's hero was driven through the streets, his coffin draped in the national flag. today his death seemed real. >> there will never be someone like nelson mandela. he has done a lot for us. >> and this is how much he is loved. a rush to see his body today.

others told to return tomorrow. at the seat of government o the patient procession of the pan della family, inside his widow touched his casket. supported as she walked away. world leaders had to wait in line. they were just mourners today. the the man who freed the man who freed south africa. >> i'm very sad. yesterday he was a day for celebration. today is a day for mourning. >> reporter: then the gates were opened for everyone to seeman della's body. 19 years ago this is where nelson mandela was sworn in as president. now and for the next three days he will lie in state on

presoisly the same spot. there is not enough space for the people who want to be here. many who traveled through the night, after four hours of waiting, getting the chance to see pan della. >> when i walked past madiba, all that anger just goes away. because i know he is the father that doesn't want to be angered with anybody. he wants to love his kids. >> a-- of course many didn't get to see their icon. today has been a long walk for mandela. but his country has walked much further before. >> ifill: in >> ifill: in a related story, advocates for the deaf charged the sign-language interpreter at mandela's memorial service yesterday was a fake. they said there was no meaning to the hand movements by the unidentified man. a government official said the matter is being investigated. prosecutors in central florida will not file domestic violence

charges against george zimmerman after all. that's after his girlfriend recanted her claim that he pointed a shotgun at her. zimmerman has had several scrapes with the law since he was acquitted last summer, in the 2012 killing of trayvon martin. broad-based selling hit wall street today after a series of disappointing earnings reports. the dow jones industrial average lost 129 points to close at 15,843. the nasdaq fell 56 points to close at 4,003. still to come on the "newshour": the compromise to end the fiscal fight in congress; turning the traditional school day on its head; pope francis, person of the year; the fall of bernie madoff five years later and a nobel prize winner in economics.

>> ifill: in less than a year, pope francis has shaken up some of the images and public perception of the catholic church. "time" magazine selected him today as its "person of the year." his remarks and actions have captivated catholics and non- catholics around the world, whether washing the feet of prisoners on holy thursday or, when asked about the status of gays and lesbians in the church, telling reporters, "who am i to judge" or decrying the problems of economic inequality. the ripple effect has been remarkable. we assess his impact with patricia mcguire, president of trinity washington university and robert royal, president of the faith and reason institute. welcome to you both. let's start av with that, who am i to judge question, because that struck me, some people could have said, if not the pope, who. is that what caught your attention? >> that absolutely caught my attention. it caught the attention of catholics every where. and i think the people of the world.

and it parallels what he said in his america interview when he was asked who are you. and he said i am a sinner was the first way he described himself. he's very humble. he does not assume to have the power of an office that makes him better than everyone else. he is a real human being. and i think that's what people like about him. >> ifill: but robert royal what doors did he open or at least appear to open in terms of interpretation by saying things like that, which might be in contrast with doctrine. >> i think it's not in contrast with doctrine t was read to be that way, he said over and over again i am a man of the church and he is clearly not going to be changing dogma in matter of faith and morals. what he meant by that though is something that every christian ought to understand. that is we don't judge other people. so he was just restating a classic catholic truth when he says that. the difference here it is important to understand exactly what he said on that flight back from south america. he said if somebody has a same-sex attraction and is trying to struggle with it,

and is trying to move toward god, who am i to judge that person, in that respect. so the teaching hasn't changed. but the way he reaches out to human beings, the way he respects human beings, whatever secretaries you will orientation that they may be, that is most-- . >> ifill: it's not just about that, it is about so many issues, is it a matter of emphasis, is the pope now talking more about what the church can give rather than what it ought to forbid? >> i think absolutely, he is talk more about how we should be of service to the world. it's less about rule it's in terms of what he has been saying so far, if you read his most recent statement, it is about finding joy in the gospel message, by serving others. and in serving others we find our salvation. and of course the rules are there. he will not change the rules. the expectation that he will is i think a little naive. but we should live a life of spirituality and justice with joy and with hope. and that's a breath of fresh

air. >> when he talks about social just fis and inequality and though issues as he did in these most recent statements, does that cause concern for most doctrine heir or traditional catholics that he is straying into politics? >> i think the popes always tend to emphasize the fact that we ought to tend to the poor. an if you look at apostolic exertation there are many different pieces in the way he-- that question, he urges people that there are many poor people still in the world in spite of the fact that the world grows richer and rich never a variety of ways so it is not so much that i think it is liberal or conservative t may even be a little bit misleading to try and fit him into an american context, is he more in favor of state intervention or more in favor of capitalism. what he is doing is putting the spiritual and the human focus on the fact that people are poor and are hurting and that all christians and all human beings have a responsibility

to take care of the people who are most hurting among them. >> let's talk about what the pope has not said. he has not said that women should be ordained or even considered as priests. he has not said that priestley celibacy should not be observed even though people around him may have suggested that. he has not said that noncatholics or that catholics who violate the tenets of the church should be denied communion there are so many things which he has not said yet he is greating-- getting credit for being some of more open. >> what he has said is the teaching of the church, though, so let's not say what he is not said. he is reinforcing the gospel teachings of the church, the social justice. and in being a champion for the poor, he is being a champion for human life. so in fact, he is not departing from church teachings at all. the checklist you just i mum rated is a very easy possible list sort of secular checklist. is the pope going to say it's okay that i can do what i want to do? well, no, the pope is to the going to do that he pay say who am i to judge because he

wants me to judge myself. and he wants me to knows what's right and wrong. and he wants me to be of service to others. he wants me to be less preoccupied with me. and more preoccupied with you. and i think that's a really important stylistic change. >> there are catholic cafeteria catholics who say i will take this from column a and this from column b, who find him very appealing. they shouldn't take comfort. >> i don't think there is a way to look at him that way. the catholic church is a 2,000-year-old tra dismingts you can even argue it goes back into juddaism and back into the myths of prehistory. so we have an established set of teachings about a variety of things. the way i like to describe what i think he's doing is this. he's a bit like a doctor bo comes in to a sick person. he has actually used this metaphor. the world is like a battlefield. and we have to go out and help the people that are wounded. but if a doctor comes and he's got a good bedside manner and he's a nice

person, that's great. but he's not a good doctor unless he knows medical science. and so behind thateautiful charism that he has reaching out to people say strong, deep understanding of how these things fit together. the most interesting things over an above the way he's obviously just energized people to pay attention to the church again, is that they will begin to look deeper. i think that is his ultimate goal. he says the moral question, the hot button cultural questions are secondary. but not secondary in response, secondary in time. they come after an enkouj-- encounter with the person who loves you, who cares about you, who is god. >> ifill: but transformation is not the ultimate goal welch all know, we talked about the problems plaguing the church over the last decade, especially pedophilia, issues like that. is he trying to just change the subject or is he actually transforming the church. >> no, absolutely not. i think he has to deal with the pedophilia issue. and he appointed a commission this week. and i think he will probably have many stronger things to

say. as time goes on, even in the statements he's made so are fachlt you can read his messages to his brother bishops and to priests. but i think he wants to treat the sense of excitement to get catholics back into the catholic thing. and to get christians working together, across all religious demom nation nations-- denominations to be of service to people who need us most who is the poorer. >> ifill: do you think this is a brilliant pr pope or someone that has actually done anything n this less than a year that he has been pope to change anything? >> he's got a way of conveying this spirit that is his. as you may recall, right after he was elected he went back to the religious house he was staying in. and he carried his own bag down and he wanted to pay the bill. and they were shocked that a person who had just been elected pope was going to pay his own bill. the joke in the italian newspapers, i was in rome at the time, oh yeah, i checked in under a different name. look, he's just got this ability to energize people.

and you see that from the very first instance with this man. some of the american cardinals who elected him told me afterwards that in those early preparatory conferences that they had together, several of them just had that's the man that god wants to be the next pope. because he spoke right from his heart. >> we'll see whether he actually affects real change or -- >> i think he's already affecting change. >> ifill: thank you very much patricia mcguire, trinity washington college and robert royal of the faith and-- institute. thank you. >> thank you. >> thank you. >> ifill: here's an idea for improving the learning environment in a low-performing urban school: stand the traditional classroom model on its head. that's the experiment underway in a suburban detroit school. jeffrey brown has the story as part of our american graduate project-- a public media initiative funded by the corporation for public broadcasting.

>> so you see how they are in the same family. >> what if you took to practice decisional school day and flipped it on its head? not literally, of course, but having lessons offered at night at home and homework done by day in the classroom. that's the experiment under way at clintondale high school just outside detroit, an area still reeling from the economic and social ills of the nearby city. the school serves many low income families and faces tight budgets and declining enrollment. >> so what's the number part that i'm-- . >> reporter: just three years ago almost half of clintondale's 9th graders were failing math, science and english. and overall school performance was ranked in the lowest five percent in michigan. >> principal greg green decided to take a risk. >> frankly, we weren't doing very well. and so you know, we had to make a change. i mean we were desperate for change.

>> brown: his aha! moment came while coaching his 11-year-old son's baseball team. having learned to record and post instructional videos for his players to watch outside of practice, he was struck by how much time was then left to focus on individual players on the field. he saw the educational potential starting with the power of videos. >> kids can go back and watch them as many times as they want. and me as an instructor or expert, i don't have to redo it all the time. and i can spend my time with the students in class, in actually assisting them. and so if i could do that with 11-year-olds, imagine what we could do with 15 or 16-year-olds doing math. >> brown: green went all in, flipping the entire school. urging his staff to rethink the use of technology and how it complements traditional teaching. and getting local businesses to help fund the effort. >> the legislative branch makes the laws. >> brown: now lectures are recorded and posted on-line. >> the american civil war

lasted from 1861 to 1865. >> brown: or teachers can assign outside videos from the popular khan academy and ted talks. students watch these videos as homework outside of class. >> why do you say plutonium. >> brown: in class, students to you do what was once considered homework. assignments designed to test learning comprehension. clintondale teachers say this allows more time for one-on-one help. and often encourages students to collaborate in problem-solving. but english teacher rob said it took some convincing. >> when we first did this, it was funny to look around at staff meeting and look at a lot of staff members, especially the ones that have been here 25, 30 years and saying, what are you talking about, what's a blog, you know, what's a google group. >> apostrophe makes a known show ownership or possession. >> for teaching for 20 years i know what lessons kids are

going to have a problem with. but i think with doing this flipped approach, there are problems i didn't even know existed. so you really can't hide back there in the corner and say yeah, i got it, you know, and then the teacher sees later on, well no, you really didn't get it. >> brown: one problem the school faced head on, students who can't afford or don't have access to technology outside of class. they're given extra time in the school's media lab. >> segregation before 1954. >> brown: taking the technology-drive answer approach further, some lesson plans are now tailored to have students use the latest trend in social media. >> thanks to the 19th amendment, us women have the right to vote. >> we deserve the vote, we deserve to vote. >> brown: like this project that required constitutional amendments to be summed up in six seconds for the popular web site vine. green says that taken all together after three years, the flip is paying off. >> our act gains have shown

double the national average as far as act gain, our state testing mixed results in that and we've also seen an increase of graduation rates to almost 90%, college accept ans rates 5980%. >> brown: senior darrell is one example. his grades have risen from a 2.5 gpa as a freshman to 3.5 as a senior. and he says the flip has played a big role. he now watches videos on his cell phone while taking the bus home into a rough section of detroit, where he lives with his mother and four sisters. >> i really looked at the videos more because i know i might not have as much time at home. because my sisters are in college and they need the computer so much. i can do it on my phone. and the bus ride is like 30 minutes so i can get half of my assignment done. >> darrell's mother sabrina young also likes the flipped model says there is only so much she can do to help with traditional homework.

>> him doing at school is a plus for him, as well as me. because i just didn't remember the majority of it. >> brown: the popularity of on-line learning has surged in recent years and flipped classrooms have started popping up every why from elementary schools to some of the nation's top universities clintondale is the first u.s. high school to do a total flip. harvard's justin reach has been studying the trend and says he is cautiously optimistic. >> what is exciting to me about the flipped classroom is it gets teachers asking two really important fundamental questions. what are the best ways for me to use my time, especially the very precious time i have in classrooms with my students, and then what are the kinds of direct instruction that i could provide that could be digitized so people could watch it again. >> you will notice that the last set of notes i gave you were for week five. >> brown: but reich says that flipping alone isn't enough. as with any lesson plan t

all dependses on exactly what's being offered. >> if what we see from the flip classroom is that we take bad lectures and uninteresting worksheet problems that characterize a lot of the experience that students have in schools and we simply flip the order of those two things, the odds that we see significant improvement in our schools is pretty low. >> and so now we're going to be taking-- with respect to t. >> meanwhile some individual teachers are experimenting with the flipped classroom on their own. three years ago stacey flipped her upper level math classroom at the private high school outside of washington d.c. where students pay up to $35,000 a year in tuition. >> she says it's been working for her, but that it might not be for every one. >> i think what is the most important thing is that you really think through what your problem is. i wouldn't say that because everybody is doing the flipped classroom it's cool,

you should dot flipped classroom too. my problem was really time, anxiety and perhaps if i went to another school, i would do things completely differently. >> one added surprise for her in structuring her class this way is what she learned about the reach of her on-line lessons. >> it i get thank you letters from students all the time. not even just from the u.s. but overseas too. and that part always amazes me. >> brown: back in clintondale principal greg green's big experiment is getting alot of attention. more than 200 educators from around the world have visited the school trying to draw lessons from the flipped classrooms. >> ifill: s >> ifill: curious how teachers create their video lectures for flipped study at home? watch and learn on our homepage. plus, you can brush up on your knowledge of the constitution with students' short vine videos of the bill of rights. and principal green, researcher justin reich and math teacher stacy roshan will be joining an online chat on this topic next week.

you can sign up for an alert to join the conversation on our website. >> woodruff: it may not be the legislative equivalent of peace in our time, but the budget deal announced last night provides, at the very least, a time-out for lawmakers battling over fiscal matters. "newshour" congressional correspondent kwame holman sums up the agreement. >> by having a budget agreement that does not raise taxes, that does reduce the deficit and produces some certainty and prevents government shutdowns. we think is a good agreement. >> reporter: after weeks of negotiating with democrats, house budget committee chairman paul ryan had to sell the agreement to members of his own party this morning. >> we know that this budget agreement doesn't come close to achieving what we want to achieve on our ultimate fiscal goals. but again, if we can get a step in the right direction, we're going to take that step. and that's why we're doing this.

>> reporter: ryan and senate budget panel chairwoman patty murray announced the agreement late yesterday. their proposal includes: $85 billion in spending cuts and increased revenues. those include higher fees for airline passengers and greater pension contributions from newly hired federal workers. it would also roll back $63 billion in automatic spending reductions that hit defense and domestic programs. some house republicans said they'd support it, including pennsylvania's charlie dent. >> i think it's a good agreement. it certainly provides savings. it certainly protects defense. but most important of all, it provides a level of predictability, stability and certainty about how we go about governing in this place. i think that's perhaps the most >> reporter: the plan avoids provisions that sharply divide the two parties, such as tax increases or cuts to medicare beneficiaries, but there are still signs of dissent from both sides of the aisle. and they were on display today, here at the capitol.

kansas republican tim huelskamp and other tea party conservatives complained deficits will actually be higher for the next three years before the savings kick in. >> it's going to increase the deficit, it's going to raise taxes and fees, and it's not going to address the long-term overspending problem in washington, which is we need to reform entitlements. >> reporter: some senate republicans, including rand paul, marco rubio and tom coburn, also rejected the deal. and criticism came from outside conservative groups, but was promptly dismissed by house speaker john boehner. >> they're using our members and they're using the american people for their own goals. this is ridiculous. listen, if you're for more deficit reduction, you're for this agreement. >> reporter: among democrats, there was disappointment that the budget deal does not extend long-term unemployment benefits. house minority leader nancy pelosi: >> we would have preferred something quite different.

but we do recognize the value of coming to a decision so that we can go forward with some clarity on other legislation that we want to see. >> reporter: the senate's democratic majority leader harry reid, said he'd push for an extension of jobless benefits next year. but he called the overall compromise a breath of fresh air. >> in this new agreement, neither side got everything it wanted. but that's how it used to work around here, mr. president. that's how it worked. >> reporter: the agreement could come to a vote in the house as soon as tomorrow. >> woodruff: we have three different perspectives on the deal. they come from steven rattner. he was an economic adviser known as the "car czar" in the obama administration. he's a contributing writer for the "new york times" and is chairman of willett advisors. douglas holtz-eakin-- he served on the council of economic advisers under george w. bush and as adviser to john mccain's presidential campaign. he's now president of the american action forum, a policy think tank. and romina boccia-- she is a heritage foundation fellow on

federal budgetary affairs. welcome to you all, so stipulating that none of you thinks this is a perfect deal, let's talk first about whether congress should approve it. and doug holtz-eakin, i will start with you, you are a republican who thinks on balance this is something congress should approve, why? >> yes, the value of this agreement is above and beyond what's in the agreement. it's addition by subtraction. you don't close the governments. there political value. you don't shake the confidence of people when you shut the government and you don't harm the economy. and there's some policy value. you don't cut 19 billion from defense and then turn around and put it back over the next two years. why do a u-turn for no apparent purpose this is not an ideal agreement from either side's perspective. but taking those bad events off the table is a value that the agreement brings and i think people should pass it. >> woodruff: steve rattner, you're a democrat who as he said doesn't think it's purpose but you think on balance congress should

support it but for different reasons than what we heard from doug holtz-eakin y? >> actually, my reasons aren't that different. i think doug and a agree on this i put it maybe slightly differently. i think the advantage of this agreement is that in the short run it does increase spending by a bit which is what we need both because of the weak economy and because it would increase spend on a number of important dom es vic vick-- domestic problems as well as defense. it sort of provides development in the outyears but frankly i think that is very man mall and does all the other things doug said about certainty, avoiding shutdowns, crises. my problem with it and i think that's probably his problem with it is that it doesn't go nearly far enough. and it does take the foot off the gas a bit with congress in terms of ever producing the bargain that i think many of us believe we truly need. >> woodruff: and we do want to come back to that, but first romina boccia, heritage foundation, you think this is a mistake, why? >> i think it sets a bad precedent. they're busting through the spending caps that were

agreed upon in a bipartisan fashion in 2011. and promise morning savings down the road. but half of the deficit reduction included in there deal wouldn't occur until after 2022. but the higher deficits happen immediately so will we ever see the deficit reduction. plus the deal is full of gimmicks. there aren't any real reforms that help address our debt. i think that congress needs to go back to the drawing board and go that. >> woodruff: doug holtz-eakin, how do you respond to that you looked at this carefully. she's basically saying these aren't real cuts. >> it's far from eye deal. i don't think anyone should say oh this is great. i will vote for it i think they have to ask the question, is it good enough to vote for. and they will meet people who decide it's not. but if you look inside this agreement, not everything is about budget dollars. sometimes its policy that matters. so we are going to ask new federal employees to make higher contributions for their pension. that's a sensible thing to ask them to do. it's not a dramatic increase. but those savings will grow over time. those are permanent policy

changes. i'll take good policy over near-term budget dollars every time. >> woodruff: what about that, romina. >> do we need to trade good policy for higher spending immediately when they could have saved taxpayer dollars, those good policies could go towards deficit reduction. we are looking at about a $7 trillion increase in the deficit over the next ten years. and we have a very high debt that is growing. so more deficit reduction is good but not in exchange for higher spending. that's a wash. >> woodruff: steve rattner, i'm going to bring you in at this point. you're familiar with all this you looked at this. why is her argument wrong? >> i don't think her argument is totally wrong. i just disagree with it i think that-- i think we actually do need more spending at the moment for the two reasons i said before. both because the economy is weak and because the stuff that's being cut is stuff we should not be cutting. so that's just a fundamental policy disagreement between us as to what should happen over the next couple of years. in the outyear, i think all

three of us probably agree that there needs to be more fundamental budget reform. there needs to be-- we need to address the issue of spending on medicare and social security beyond what the revenues are likely to be. we need to address the fact that you can't hold down domestic spending forever. there are important things like bridges and roads and r & d and education that need to be paid for. i'm sure we would disagree about actually what you do about that but i think we agree that something needs to be done in the long run for the deficit. but right now i think this is the right policy for the next couple of years for the reasons i've said. >> but what gives you, go ahead. >> i think there are two places where i disagree with that. i understand the reasoning, but for policy grounds, not all dollars are created equal. i think it makes no sense to adhere to the budget gaps just because they are there, take 19 billion out of defense, put it right back in. you end up where you started. what did you accomplish. you harmed readiness and capabilities. so the policy does matter. and the second is, we were

never going to get a grand bargain. but what they did do was something i thought was vie will. they figured out what they could agree on. they stuck to trying to get an agreement done and you got a small agreement. but that in itself has value. >> romina boccia, what about that point. that you never were, i mean just about everybody would argue, you never were going to get a grand bargain so why not take something small as a first step, a first installment? >> well wa, we get now is higher spending. so our immediate fiscal situation becomes forced. the deficit goes up immediately. for promises with future spending cuts. the sequester in and of itself was a promise. all the future spending cuts that came about as a trade-off for a $2 trillion increase in the debt limit so now we're just pushing those savings off even further into the future. and if you look at the actual cuts, the biggest cut is a medicare provider cut. there are already very many of those in the affordable care act. and they are unsustainable as they are.

>> we need real reforms. >> those are-- i guess i find it difficult to understand why a bipartisan agreement that sets sequester caps has great virtue but a bipartisan agreement that this would be to have different sequester caps is a sin. i mean this is the same strategy. it says we want to set targets for things which are annual discretionary. but for other things, we want to change the policy whether it's our policy toward the pension benefit guarantee corporation and make people pay a fee or policy to retirees, whatever it might be. policy changes matter. they are the kinds of things we have to do more of. this is a tiny baby step in the right direction. >> you are saying it is worth it because you get the policy changes. steve rattner i want to bring you back in on a question we're hearing from a number of democrats today who are complaining that this is not, this deal does not cover expanding long-term unemployment benefits. what about that? you, you are saying congress should vote for it you've also told us that you think those are benefits that

should be extended. how do you square that? >> because you have to deal a little bit in the art of the possible. this is as doug has said, i think the best deal we're going to get at this moment. i don't want to be too defeatist about the grand bargain. we have to have a grahn bargain at some point. and yes, i would have liked to have seen extending unemployment insurance in here. we still have a high unemployment rate. the biggest problem we have with unemployment is the long-term unemployed, taking way their unemployment insurance is not going to make them go back to work. it's simply going it to make them poorer. and i do think we have an obligation to them. but i think the judgement the democrats reached was that they were to the going to be the ones that were going to shut down the government over that issue. they would live to fight that another day. and this is all the art of the possible, the art of compromise. and the republicans simply weren't going to do it i think it's unfortunate. i am on the other side of that. but i think as doug and i have both been saying, this is better than nothing, better then another crisis, better than another shutdown. >> and you feel the same way

about the trade-off in the fact that this is not a deal that includes new investments in education and research. other things that democrats feel strongly about. >> well, it does include in the short run 65 billion dollars of additional spending divided between domestic programs like the ones you mentioned, and defense. and i think that is a good thichblingt i don't think it's enough. i think that that category of spending should be increased, not simply cut by less. but again, this is the best deal you're going to do at this moment. given that we have divided government and the alternative of shutdowns and crises and all that is worse. my biggest concern about this is it is a two-year deal which i think takes the pressure off of congress for the next two years to do anything substantive. other people may disagree with that. i hope i'm wrong but that's the way i perceive it. >> how do you feel about that, that may be taking pressure off of congress to do something bigger and more significant in the comes years. >> well, the leadership has to come from the white house on these large issues.

and there's no pressure on the white house already. the debt and deficit were stabilized until 2016. president is out of office. i just want-- i saw no effort to make a big grand bargain. so nothing has changed on that front. >> the problem that we do have though is by taking the pressure off and in fact setting a bad precedent that you can get around the spending agreement you agree to and increase spending now for promises of spending cuts later on. will they dot same thing again in 2016 when they are not happy with the sequestration spending cap? meanwhile our deficit and debt problem keeps growing. and those very programs that are causing it are not being addressed. that just means that the changes that we have to make eventually if we wait too long will just have to be much bigger and more painful for americans. and that's unnecessary pain. >> we hear you all three. romina boccia, douglas holtz-eakin, steve rattner, thank you. >> thank you. >> thank you

>> woodruff: now, what's happened to the people who invested their life's savings with disgraced financier bernie madoff? today is the fifth anniversary of his arrest for fraudulently operating a multi-billion dollar ponzi scheme. five years ago the world's media followed disgraced wall street financier bernie madoff wherever he went in new york, from the courthouse to his park avenue apartment. madoff's fall from financial grace came hard and fast. in 2009, he pleaded guilty to running an elaborate, global ponzi scheme-- defrauding investors of $64 billion in paper wealth and $17 billion in actual cash. the victims numbered in the thousands and many were left with nothing. >> this is a man who stole $65 billion. nobody else has ever come close to $65 billion in theft.

he has absolutely no remorse. you take a look at the people who have committed suicide as a result of this. you have physical suicide, and there's emotional suicide. none of us will ever be made whole, ever. >> woodruff: about $9 billion has been recouped so far by irving picard-- the court- appointed trustee charged with recovering the lost assets. he's suing a number of defendents, including j.p. morgan chase, claiming they should have known about the fraud. for decades, madoff lived a lavish lifestyle and worked to deceive investors and the securities and exchange commission, as heard in this 2005 phone call, released later by investigators. >> woodruff: madoff has claimed he acted alone, but a separate fraud trial began this fall in

new york for five former employees. they include his secretary, investment operations director and computer programmers. madoff himself is serving a 150- year sentence at a medium security prison in north carolina, which he recently said was very laid back and kind of like camp. here to flesh out this story is diana henriques who has been chronicling it from the beginning. she's a reporter for the "new york times" and the author of a book about the madoff case, "the wizard of lies." >> diana henriques, welcome back to the newshour. you've been following very closely among other things the effort to recover as much of the money madoff stole as possible to get it back to people who lost the money. how is that process going? >> well, i think here at year five we can say it has been extremely slow, extremely complicated and

for the victims, extremely frustrating. we're not even halfway through the major compensation program. the one being administered through the bankruptcy court which as you mentioned, judy, has raised about $9 billion, about half of that has been distributed. the rest is being held back in reserve because of a tangled litigation issues that are still pending. there's an entirely separate fund being operated through the justice department that is about $2.2 billion. that just got us an operating last month. the claims period doesn't end until february. so for these victims, many of whom were already in retirement when madoff's fraud was exposed, they are getting older and more up set about the prospects of ever recovering anything, even where they are eligible to recover. an many thousands are not eligible, either because they weren't investors directly with bernie or because they didn't lose

cash principal, they just lost paper wealth they thought was theirs. >> woodruff: what kinds of things are these victims telling new. >> well, the victims who have been sued by the trustee for the recovery of cash that they took out thinking it was their own money but which was actually money bernie had stolen from someone else, those victims are really living a nightmare. they, one victim told me that it was like facing a test in school where you're not prepared. and you know it's coming. they live in a constant state of anxiety, worried about what's going to happen to that litigation. for other victims, many are moving on. they're making a point of finding a smaller and simpler but satisfying life. but we both know that there are a lots of victims for whom the anger and frustration are still souring the years that they have left. so it's very much a mixed bag, i think. but not much of it happy.

>> woodruff: now you're talking to the victims. you've also maintained communication with bernie madoff himself over the years. >> yes. >> woodruff: and you were telling us that you found that his attitude, the tone you hear coming from him has changed since he's been in prison. tell us about that. >> it has. it actually has changed fairly recently, judy. for the first several years of our communications, we were exchanging regular exmails and letters, occasional phone calls. he was very careful to always include a fairly extensive expression of regret. acknowledging his guilt, acknowledging the people he had hurt and the people he had betrayed whose trust he had betrayed. but now in our more recent conversations over about the past year, that rhetoric is gone. he is very bitter towards his victims. beyond irony he sees them as

greedy. he sees them as expecting too much from this compensation process. and his remorse has really shrunk down to the very profound and deep remorse that he feels for the wreckage he made of his family's life. >> woodruff: well, separately from all of this, we know there's a troil going on of madoff's associates. a lot of interesting testimony coming out there, tell us what you're hearing, what you are learning from that that we should know about. >> well, it is a fascinating trial. it is the government's first opportunity to print the evidence it has for proving the proposition that this fraud began long before bernie madoff says it did. he insisted when he pleaded guilty that the fraud began in 1992 and that he was an honest money manager until then. the evidence weren'ted in trial has made that even less believable than it already was. i was very confident in writing the wizard of lies

that the fraud began at least by the mid 80s. the evidence in trial this past week brought it back to the mid 1970s. at least some fake trading, boggus trades were being done even in the mid 70s. so the government has made good on planting its flag on the start date of this fraud. i've also learned the incredible detail that madoff invested in this cover-up. i said to a colleague in court, you know, this is really the faberge egg of ponzi schemes. every tiny detail that madoff paid attention to, making sure that the font, the type face on some of these forged documents was exactly perfect. that web sites that were created were perfect. so it's been quite enlightening. >> woodruff: it's been enlightening. what a story, it just doesn't seem to come to an endment diana henriques of "the new york times", thank you. >> thank you.

>> ifill: finally tonight, a conversation with one of the winners of this year's nobel prize for economics. the prizes were handed out yesterday in stockholm. yale university professor robert shiller was one of three americans honored for research on how financial markets work and how assets, like stocks, are priced. our economics correspondent paul solman recently talked with professor shiller about the award. it's part of paul's ongoing reporting: "making sense of financial news." >> how surprised were you at getting the nobel prize? >> well, there were people telling me i would get it reasons really? >> but they're my friends. in fact, i asked others you do friends telling you that you're going get the nobel prize. and they said yeah. so i thought every professor has friends telling him that.

>> you can say in a sentence or two what you got the nobel prize for? >> i don't know. there is a long scientific background paper on the nobel web site and it talks about the three of us gene fama, lars hansen and me as contributors to the same body of literature, which seems a little hard. because gene fama, especially, takes a different view of it all. >> exactly the op opposite in some sense, right, he says the market at any given time reveals what the underlying stocks are really worth. >> the whole idea that the stock market reflects fundamentals, i think, is wrong. it really reflects psychology. the aggregate stock market, it reflects psychology more than judgments. >> are we experiencing to use your phrase from 1996, i think, irrational exuberance in the stock market again? >> well, some people are. it has bubble elements to it. because people see the

market going up and they're regretting the fact that they didn't buy in several years ago. and they're tempted back into it but it isn't the really strong bubble that we saw before. because there are so many clouds and so many issues on people's minds that it doesn't look like the chance of a lifetime now. >> i know you don't like to make prediction and think they're foolish in some sense but i'm not doing my job if i don't ask, what about the housing market, at the moment. >> it's very interesting phenomenon, to me, that there are binls in so many different countries around the world. like brazil. i was just down there a few months ago. and they're going through a huge boom in housing. they've adopted kind of the mentality that we had eight years ago. it's uncanny. when i was in brazil and talking to people, i felt

like i was in the united states of 2005. >> did you start to warn them the way you warned us then. >> i did. although the brazilian home price boom is interpreted by most brazilians as a sign of the country emerging. brazil is joining the advanced countries of the world. and of course if you want to buy a condo you have to expect to pay new york prices, that's where it's going, right? and if i say no, then it just feels bad to say that. >> i can do it because i'm leaving brazil in an hour, in a couple of hours so i am out of here. >> but i mean you're a nobel laureate who won the prize based in large measure on your skepticism about irrational markets, right? >> i mean so you would think the brazilians would go oh pie goodness, bob shiller is calling it a housing bubble?

>> some of them did. but i'm sure it stays as a fringe opinion. it's just the forces-- the patriotic forces. it just doesn't feel good this alternative view. >> and by the way, we have professional economists who could defend any viewpoint or statistic. and they do that. >> everywhere in the world. >> everywhere in the world. >> economics is not an exact science. i wanted to be a scientist when i was a child. i am lamenting, had i go into a field which just can't be exact. and i don't think anybody can. what is the economy going to do next. we just went through the biggest housing bubble in u.s. history. it's off the charts. and now it is starting to go up again. what do make of that. are we going back into another bubble economy? i don't know. and i don't see how anybody knows that.

>> ifill: with you can watch more of the interview on our making sense page. >> woodruff: again, the major developments of the day: the new budget deal in congress drew support, but also criticism. it could come to a vote in the house tomorrow. health care enrollment numbers were better in november, but still far short of projections. and the body of nelson mandela began lying in state, in south africa. and a former new orleans policeman was acquitted of violating the civil rights of an unarmed man he shot and killed during hurricane katrina >> ifill: on the "newshour" online right now, painful budget cuts are on the way as detroit enters into formal bankruptcy. one treasure-- the city museum's collection of van gogh's and picassos-- could be up for grabs. watch detroit public television's documentary on the masterpiece tug-of-war tonight at 9:00 p.m. eastern time. there will be a link to the live stream on art beat. all that and more is on our website newshour.pbs.org. >> woodruff: and that's the "newshour" for tonight.

on thursday, we'll look at sandy hook promise: how parents of two students who died in newtown turned their grief into a call to combat gun violence. i'm judy woodruff. >> ifill: and i'm gwen ifill. we'll see you online and again here tomorrow evening. for all of us here at the "pbs newshour," thank you and good night. >> major funding for the pbs newshour has been provided by: >> my customers can shop around; see who does good work and compare costs. it can also work that way with healthcare. with united healthcare, i get information on quality ratings of doctors, treatment options and estimates for how much i'll pay. that helps me and my guys make informed decisions. i don't like guesses with my business and definitely not with our health. that's health in numbers. united healthcare.

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world news bbc america. reporting from washington, i'm katty kay. offering talks, saying they will not come to the table until he fires the government and reduces all demonstrators. -- releases all demonstrators. concerns about the actions of islamist groups in syria. thousands line up in south africa to pay their respects to nelson mandela as he lies in state in pretoria. welcome to our viewers on public television in america and elsewhere around the globe. tonight, opposition leaders in group