>> thanks for watching, see you tomorrow. the president of the united states getting ready to address the nation, indeed, the world from the white house. momentarily, we'll hear from president obama. he'll make the case on how the united states can avoid default. there are some democrats suggesting the united states right now is in imminent threat of default one week from today.

the country will not have enough money to pay all of its bills. tough decision also have to be made. the stakes right now are enormous. the president will lay out his case within a minute or so. two minutes after the president features -- finishes what's expected to be about a 15-minute speech to the nation, two minutes after that, we'll hear a separate speech from the house speakeren. >> boehner. he's up on capitol hill. he'll make his case why the president right now is wrong. why the republicans are right. both of them presumably will say the stakes for the united states are enormous right now and the country must do everything possible. everything possible to avoid default. they've been negotiating publicly and privately now for weeks and weeks and weeks. and unfortunately, for the country and indeed, for much of the world, unfortunately, the negotiations collapsed over the past few days. still possible, they might be able to work out a deal.

the stakes are enormous and you see the president walking up to the microphone. let's listen. the. good evening. the debate that directly affects the lives of all americans. for the last decade, we spent more money than we take in. and in the year 2000, the government had a budget surplus. but instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation's credit card. as a result, the deficit was on track to top $1 trillion the year i took office. to make matters worse the recession meant there was less money coming in and it requires us to spend even more. on tax cuts for middle-class families to spur the economy and unemployment insurance.

these emergency steps also added to the deficit. every family knows a little credit card debt is manageable. but if we stay on the current path, our growing debt could cost us jobs and do serious damage to the my. more of our tax dollars will go toward paying off the interest on our loans. businesses will be less likely to open up shop and hire workers in a country that can't balance its books. interest rates could climb for everyone who borrows money. the home own we are a mortgage. student with a college loan. the corner store that wants to expand. and we won't have dmuf money to make job creating investments and things like education and infrastructure or pay for vital programs like medicare and medicaid. because neither party is blameless for the decisions that led to this problem, both

parties have a responsibility to solve it. over the last several months, that's who we've been trying to do. i won't bore you with the details of every plan or proposal but the debate has basically centered around two different approaches. the first approach says -- let's live within our means by making serious hoirk cuts serious cuts in government spending. let's cut defense spending at the pentagon by hundreds of billions of dollars. let's cut out waste and fraud and health care programs like medicare. and at the same time let's make modest adjustments so medicare is there for future generations. finally, let's ask the wealthiest americans and biggest corporations to give up some of their breaks in the tax code and special deductions. this balanceed approach asks everyone to give a little without requiring anyone to

sacrifice too much. it would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. and the cuts wouldn't happen so abruptly but they would be a drag on our economy or prevent us from helping small businesses and middle-class families get back on their fight rigfeet rig now. this is bipartisan. while many in my party aren't happy with the painful cuts they make they will be willing to accept them if the burden is fairly shared. while the republicans might like to see deeper cuss and no revenue at all, there are many in the senate who have said, yes. i'm willing to put politics aside and consider this approach because i care about solving the problem. and to his credit, this is the kind of approach the republican speaker of the house, john boehner, was working on with me over the last several weeks. the only reason this balanced approach isn't on its way to becoming law right now is

because a significant number of republicans in congress are insisting on a different approach. a cuts only approach. an approach that doesn't ask the wealthiest americans or biggest corporations to contribute anything at all and because nothing is asked of those at the top of the income scale such an approach would close the deficit only with more severe cuts to programs we all care about. cuts that place a greater burden on working families. so the debate right now isn't about whether we need to make tough choices. democrats and republicans agree on the amount of deficit reduction we need. the debate is about how it should be done. most americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her medicare before we ask a corporate jet owner or the oil companies to ghif up tax breaks that other companies don't get? how can we ask a student to pay

more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? how can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for. that's not right. it's not fair. we all want a government that lives within its means but there's still things we need to pay for as a country. things like new roads and bridges. weather satellites, food inspection, services to veterans and medical research. keep in mind that under a balanced approach, the 98% of americans who make under $250,000 would see no tax increases at all. none. in fact, i want to extend the payroll tax cut for working families. what we're talking about under a balanced approach is asking americans whose incomes have gone up the most over the last

decade. millionaires and billionaires, to share in the sacrifice everyone else has to make. and i think these patriotic americans are willing to pitch in. in fact, over the last few decades, they've pitched in every time we've passed a bipartisan deal to reduce the deficit. the first time a deal was passed, a predecessor of mine made the case for a balanced approach by saying this. would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share? or would you rather accept larger budget deficits, higher interest rates and higher unemployment? and i think i know your answer. those words were spoken by ronald regan. but today many republicans in the house refuse to consider this kind of balanced approach. an approach that was pursued not only by president regan but by the first president bush, president clinton, by myself and by many democrats and

republicans in the united states senate. so we're left with a stalemate. what makes today's stalemate so dangerous is that it's been tied to something known at "the debt ceiling." a term most people outside of washington have probably never heard of before. understand, raising the debt ceiling doesn't allow congress to spend more money. it simply gives our country the ability to pay the bills that congress has already racked up. in the past, raising the debt ceiling was routine. since the 1950s congress has always passed it and every president signed it. president regan did it 18 times. george w. bush did it seven times. and we have to do it by next tuesday, august 2nd with or else we won't be able to pay all of our bills. unfortunately, for the past several weeks, republican house members have essentially said, the only way they'll vote to

prevent america's first-ever default is if the rest of us agree to their deep spending to pay all of our bill, bills that include monthly social security checks, veterans benefits and the government contracts we have signed with thousands of businesses. for the first time in history, our country's aaa credit rating would be down graded, leaving investors around the world to wonder whether the united states is still a good bet. interest rates would skyrocket on credit cards, on mortgages, and on car loans, which amounts to a huge tax hike on the american people. we would risk sparking a deep economic crisis. this one caused almost entirely by washington. so, defaulting on our obligation is a reckless and irresponsible outcome to this debate. and republican leaders say they agree, we must a avoid default,

but the new approach that speaker boehner unveiled-to-which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. in other words, it doesn't solve the problem. first of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all americans would have to pay as a result. we know what we have to do to reduce our deficits there's no point in putting the economy at risk by kicking the can further down the road. but there's an even greater danger to this approach. based on what we've seen these past few weeks, we know what to expect six months from now. the house of representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach. again, they will refuse to ask

the wealthiest americans to give up their tax cuts or deductions. again, they will demand harsh cuts to program like medicare. and once again, the economy will be held captive unless they get their way. this is no way to run the greatest country on earth. it's a dangerous game that we've never played before and we can't afford to play it now, not when the jobs and livelihoods of so many families are at stake. we can't allow the american people to become collateral damage to washington's political warfare. congress now has one week left to act and there's still pass forward. the senate has introduced a plan to avoid default which makes a down payment on deficit reduction and ensures that we don't have to go through this again in six moments. i think that's much better approach, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and

tax reform. either way, i've told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of congress and a compromise that i can sign. i'm confident we can with reach this compromise. despite our disagreements, republican leaders and i have found common ground before and i believe that enough members of both parties will ultimately put politics aside and help us make progress. now, i realize that a lot of the new members of congress and i don't see eye to eye on many issues but we were each elected by some of the same americans for some of the same reasons. yes, many want government to start living within its means, and many are fed up with a system in which the debt seems stacked against middle class americans in favor of the wealthiest few. but do you know what people are

fed up with most of all? they work all day long, many of them scraping by just to put food on the table. and when these americans come home at night, bone tired, and turn on the news, all they see is the same partisan three-ring circus here in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they are offended by that. and they should be. the american people may have voted for divided government, but they don't vote for a dysfunctional government. so, i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. america, after all, has always been a grand experiment in

compromise. as a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding, that out of many, we are one. we have engaged in fierce and passionate debate about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that jefferson once wrote. "every man cannot have his way in all things. without this mutual disposition, we are disjointed individuals, but not a society." history is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed, but those are not the americans we remember. we remember the americans who put country above self and set personal grievances aside for

the greater good. we remember the americans who held this country together during its most difficult hours, who put aside pride and party to form a more perfect union. that's who we remember. that's who we need to be right now. the entire world is watching, so let's seize this moment to show why the united states of america is still the greatest nation on earth, not just because we can still keep our word and a meet our obligations, but because we can still come together as one nation. thank you. god bless you. and may god bless the united states of america.

>> -- economics of debt new met you heard him say the american people should not be collateral damage in political war from washington. a couple of quick points in terms of practical nextel, you heard a report behind harry reid clan and the senate, dodd has boats to become law, it still needs to go forward. your him make clear he is an support of the plan that is not a cap for. he did something interesting. he said john boehner and said he has been working with me and i am not sure that was a helpful thing to do, causing a distance

from president obama, his action of republicans, we will see how that goes over. >> we were waiting for the speaker of the house, barry quickly, your thoughts. >> the president clearly wants people to go over the heads of congress. he basically said let your member know, called or members of congress and let them know we have to get this resolved, of course, he quoted ronald reagan is one way to win the war. >> e-mails to congress, this was a personal speech that may have helped the president, to get people to get a lot of support. >> in a different perspective from the speaker of the house. john boehner, once the president informed us he would be addressing the nation tonight, it didn't take care long for the speaker of the house to make a similar announcement. let's go to capitol hill. the speaker of the house.

>> good evening. im john boehner. i served as speaker of the house, the members of both parties say you will like. these are difficult times in the life of our nation. millions are looking for work and have been for some time, the spending binge going on in washington is a big part of the reason why. >> served in congress are ran a small business. i was amazed at how different washington, d.c. and every other business in america. most american businesses make the hard choices to pay their bills and live within their means. in washington, more spending and more dead as business issues will. i've got news for washington. those days are over. president obama came to congress in january and requested business is usual. another increase on the national debt, and the house said not so fast. he was the president asking for the largest increase in american history on the heels of the largest spending binge in american history.

here is what we get for that massive spending binge. a new health care bill of most americans never ask for. stimulus bill was more effective in producing material for late night comedians and was in producing jobs. and a national debt that has gotten so out of hand that sparked a crisis without precedent the united states cannot in my lifetime are yours. defaults on the debt obligations. the jobs and savings of too many americans are at stake. what we told the president in january was this that the american people will not accept an increase in the debt limit without significant spending cults and reforms. and over the last six moment, we have done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country, something that will boost confidence in our economy, renew a measure of faith in our government, and help small businesses get back on track. last week, the house passed such a plan and with bipartisan support. it's called the cut, cap and balance act. it cuts and caps government spending and paves the way for a

balanced budget amendment to the constitution, which we believe is the best way to stop washington from spending money that it doesn't have. before we even passed the bill in the house, the president said woe veto it. i want you to know i made a sincere effort to work with the president, to identify a path forward that would implement the principles of cut, cap and balance in a manner that could secure bipartisan support and be signed into law. and i will tell you, i gave it my all. unfortunately, the president would not take yes for an answer, even when we thought we might be close in an agreement, the president's demands changed. the president has often said we need a balanced approach, which in washington means we spend more and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant that we cannot make fundamental changes to our entitlement programs.

as a father of two daughters, i know these programs wouldn't be there for them and their kids unless significant action is taken now. and the sad truth is that the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. you see, there's no stalemate here in congress. the house passed a bill to raise the debt limit with bipartisan support. and this week, while the senate is struggling to pass a bill filled with phony accounting and washington gimmicks, we are going to pass another bill, one that -- the support of the bipartisan leadership of the u.s. senate. obviously, i expect that bill can and will pass the senate and be sent to the president for a signature and if the president signs it the crisis atmosphere that he has created will simply disappear. the dealt limit will be raised, spending will be cut by more than $1 trillion and a serious bipartisan committee to of the congress will begin the hard but necessary work of dealing with the tough challenges our nation faces. the individuals doing this work will not be outsiders, but

elected representatives of the people doing the job they were elected to do as outlined in constitution. those decisions should be made based on how they are going to affect people who are struggling to get a job, not how they will affect some politician's chances of getting re-elected. this debate isn't about president obama and how republicans. it isn't about congress and the white house. it's about what's standing between the american people and the future we seek for ourselves and our families. you know, i've always believed the bigger the government, the smaller the people. and right now, we have got a government so big and so expensive, it's sapping the drive out of our people and keeping our economy from running at full capacity. the solution to this crisis is not complicated. if you're spending more money than you're taking in you need to spend less of it. there's no symptom of big government more menacing than our debt. break its grip and we begin to liberate our economy and our

future. we are up to the tax and i hope that president obama will join must this work. god bless you and your family and god bless the united states of america. >> speaker of the house john >> we are staying on top of the story, this is an historic highs in washington, d.c. one mike from tomorrow, the nation will have a default crisis unless there is a

compromise, some sort of deal is worked out. i am wolf blitzer washington, special coverage continues right now with "piers morgan tonight." >> thank you for chain with us. >> bible start with you, the talk of compromise, it seems cheat me that both of the equivalent of the bay of pigs, who will blink first? >> the president doesn't have to say because he doesn't have a boat. it was a moment to isolate the republican speaker of the house and urge him to try to change pass and find out to compromise. we heard him hawed speaker peter tight and say you work with the president. i am not sure politically that was the best way to help john boehner get words to compromise with some of his hard-line members. my also point out you that the president did not in this speech

repeat his veto threat. we heard him repeat he would get a short-term extension on the debt ceiling. he did not do that. i will find out what to read into that. in essence, the president tried to rally the american people to pressure congress into a compromise, and we have seen that hasn't worked. this is unprecedented. no u.s. president has never defaulted. is it conceivable that we could get to august 2nd and the default happens. >> it is conceivable and i am calling me about the prospects because there are significant differences. they have tried for weeks, dare i say for months, to get some sort of solution. i assumed in what happened a few weeks ago. i didn't think it would go down to the final week. in the end they may have a deal but i am not by any means condensed that it is possible

and come next tuesday, there won't be a deal, the federal government will have to decide which checks to right and which checks not to write and that would cause serious dislocation. i assume, if it does happen, their reaction would be so angry out there that interest rates would go up, there would be fears of markets collapsing, the value of the dollar going down. with a few days, cooler heads will prevail, but it is definitely possible that between now and next tuesday, there will not be a deal. i hope there will be. >> gloria, republicans have been calling today for a possible impeachment of president obama if we go into default in america. these are extraordinary times. can you envisage that kind of scenario? >> no, you know, i think people understand in washington this is a moment of truth. i have people say that to me. what strikes me about tonight is you listen to both of these

speeches, it is as if we have not made any progress in this heated debate that we have been covering for most of the last month. it still comes down to the issue of tax increases versus spending cuts. each party is living in a parallel universe and while they have been working to get beyond that, i think we have heard some very political speeches tonight. at the end of his speech and the president wanted the country to join together, call congress, led to know how you feel, john boehner kind of made a plea that they would all get together, when you listen to them, there are nowhere near close to a deal, it seems. >> keith baldwin, let me come to you. while president obama was putting his arm around john banner saying we're great pals, john boehner was quick to say your hands off me, that, wasn't it? >> he sends a town of compromise

and house speaker john boehner's speech. tough talk coming from the speaker this evening saying the president wants a blank check and we're not going to give it to him. he is trying to lay the blame on the president for creating this crisis atmosphere, a one level what you are seeing is that house speaker john boehner is trying to make a case. this is why you give us the majority in the house this past election. he wanted us to get this house in order and you wanted us to cut government spending and that is what we're doing, it is noted you don't sense that these two men are closer to compromise this evening even though they have been talking for weeks. at the same time, we're hearing from senators that while they're working on divergent paths on two different bills on capitol hill, there are people still working behind closed doors to try to find a way to compromise, to try to work this out, to try to bridge the divide, in the end

it does not sound like either bill that has been proposed and unveiled as a way of passing the opposing chamber of congress at the moment. >> david, cut through all the washington speak and analyze these two speeches, what do they really mean. >> pierce, have these been given three four weeks ago, they would be welcome as part of the discourse, each side presses his point of view, it appeals to the american people, to be given on the eve of a possible default, both individuals gave partisan speeches. both individuals were given political speeches and each was intending to rally his own base, president obama was trying to rally his democratic base, to back the democratic plan and to bash the republicans. john boehner was trying to do just the opposite. to have that happen and on the

eve -- >> bad for the country, what? let me just finish, it is good politics in the traditional sense because in terms of getting a national answer in the next days, i think it left us farther away from getting an answer. it will further divide the country. >> i was going to ask you, was did anybody benefit from the house tonight, did anybody, way better than they did half an hour ago, the thing? >> i think possibly a fellow came out better with his base, but the country is tired of the political posturing and people really want leadership and fine dancers and get this off the edge of the cliffs. >> the debate we had today seemed to move beyond the tax increases and the short term, nobody talking about tax increases except for barack

obama, who still talk about that. the plan by harry reid contains no tax increases. in the short term. the plan by john boehner contains no tax increases. >> let me ask you about this, wolf, clearly the tea party factor here is significant. they have made it absolutely clear not tax increases, that's it. can such an intangible position be helpful to the republicans right now? >> i think there is no doubt that it had just been john boehner, and the more established republican leaders, let's not forget the arminius that john boehner was willing as part of an agreement to go ahead with $800 billion in tax revenue, increases in various forms of taxes by eliminating deductions, subsidies, $800 billion. debt deeply angered the tea party activists and so many of

his republican base because in that fact, it was a tax increase. he was willing to do that and risk the wrath of his base at the same time the president of the united states is willing to deal with entitlement cuts, social security, matter car, medicaid, deeply ingrained the democratic and liberal base of his democratic party. he was throwing out ideas of means testing, poor people we get more medicare benefits them retirees or change the cost of living tax. pulling the rug out from some democratic politicians who thought paul ryan, the chairman of the house budget committee, his plan was simply an opening for democrats to score political. both of these men, the president and john boehner, were willing to enter their respective bases. tmi you didn't get any of that sense in the course of these two speeches. >> thank you. we want to bring in a statement. he is a senior adviser for the

white house. david, is seen to meet the president saying when the compromise, we can make this work, a direct appeal to the people of america. speaker boehner made it clear forget it, as things stand, we are not budging, let's not compromise. >> it is my way or the highway approach and that will not help us solve our deficit problems and it will not allow us to a boy the double crisis. in the next few days we need the republicans and house to understand they're going to get a lot of luck in what, a lot of spending cuts. washington has committed to reducing the deficit. we can't have it my way or the highway. it would just be reasonable here and compromise, and that is one of those things, we will get through this crisis, make a big down payment on the deficit and then have the discussion the country needs to have over the next five or six months about balancing the budget. not asking everything of college

students and middle-class families are senior citizens, but also asking something of the wealthiest corporations we are enjoying, special tax treatment. >> let me ask you, you were with the president as you watch the speech, would you make of his golfing partner's comments? >> we were walking out of the room so i did not get to hear his speech. i read the transcript. the point is this, they had a great discussion and i think as wolf blitzer said before i came on, speaker boehner was willing to do some things that many in his party what happened objectionable and the president was willing to do some things that some in his party would have trouble with. about democrats would have supported that that we could have had a deficit reduction package for the american people. the question is clearly it is my way or the high we approached digging in, not willing to compromise. that will not get the job done. as the president said tonight, in a bad days if we don't solve this, the country will fall.

if the house republicans are this compromising, and do what is right for the country, we will be able to get through this. most important, we will then get to continue to come back and reduce the deficit because any of the short term solutions on the table right now to get us through the problem of the moment will not finish the job. we will have to do tax reform and things the president is looking forward to working with congress on. >> qwest system worst-case scenario, no compromise comes. we get to what is first, is the president prepared to invoke the 14th amendment and unilaterally raise the debt limit and simply overall everyone and a 1? >> listen, there are no offense. there are no exit's. congress has to do his job. it is unfathomable that over the next five or six days, maybe sooner, if sanity prevails, there will be a compromise. it will have make sure that he

country make sure it pays its obligation. we have put on credit card, congress has put on the credit card, spending that they have to pay for. in this effort to reduce the deficit, what we are saying is let's stop putting so much on the credit-card. if you want to be an optimist, there are huge consensus that we need to reduce the deficit. actually, we all generally agree by how much to reduce it. we are debating on how to do it. most sensible people and most deficit reduction plans, whether republican or democrat, have a balanced approach and that is what the country needs to make week comp down the fiscal path. >> we're watching the ultimate aim of political brinkmanship. what happens if no, we don't compromise, take-it-or-leave-it. what does the president did? >> we're going to keep making the case privately and publicly. compromise is the only option.

the speaker put forward a plan today, i guess he will vote on it on wednesday. from what i have seen it is clear but not pass the united states senate. we have a stalemate situation. what we will have to do is have a compromise and again, the notion we're going to go through as you have been covering this, you covered it tonight, doing what the country to go through this again in six months? it is a responsible. let's do the responsible thing and make sure that we don't default but also less commit ourselves to a deficit reduction. if we do that, we will have a stronger economy. >> thank you very much. taking a break. when we come back congress at a stalemate tonight with competing republican and democratic plans on capitol hill. can make a deal on time?

[ barks ] ♪ [ cat meows ] ♪

[ whistles ] ♪ [ cat meows ] ♪ [ ting! ] [ male announcer ] travelers can help you protect the things you care about and save money with multi-policy discounts. are you getting the coverage you need and the discounts you deserve? for an agent or quote, call 800-my-coverage or visit travelers.com. [ engine revving ] [ male announcer ] 125 years ago... we invented the automobile. ♪ and 80,000 patents later, we're still reinventing it. ♪ it's no coincidence that the oldest car company has the youngest and freshest line in the luxury class. mercedes-benz. see your authorized mercedes-benz dealer for exceptional offers on the e-class. ♪ comes centrum silver, with vitamins and minerals balanced to support your energy and immune function. everyday benefits from advanced formulas.

discover the complete benefits of centrum silver.

in the right and left make a deal, we now talk to chuck schumer. what did you make of the speeches tonight and in a particular the emphasis on compromise, it didn't sound to me like the republicans are prepared to compromise very much. they haven't panel, we have been willing to entertain large spending cuts, lots of democrats still like that. they have not moved one them of their stand of no revenues words are. the president put the plane squarely on the shoulders of our belongs. a block of extreme right house republicans who just refuse to compromise at all. and it is leading to disaster.

standard & poors, it is reported tonight, said if we did the boehner plan, there is a too strong a likelihood of a downgrade. they said the reid plan wouldn't produce that. that would be terrible for american family and for the american government. what we're really asking, i think, is for speaker boehner not to follow this extreme group, but to lead a little bit. this group, the 80 to 100 house republicans, many of them newly elected who are at the extremes, shouldn't be able to say to the entire country, it is our way or no way themselves don't represent the thinking in most of the country. >> we are face arg financial doomsday here. the american public are watching you guys all squabbling around and saying just get this done. nearly 10% of us are out of work anyway will. >> if one side is willing to reach out and compromise all the time and the other side says no, it is awfully hard to get it done. and to do what they want, which is a short term renewal of the

debt ceiling, raising of the debt ceiling, we'll be back where we started in a couple months and standard & poors is likely to down grade us. much more likely than under our plan. so we're asking senate republicans, many have shown a degree of compromise. 16 or 17 of them signed a statement that would entertain revenues. it is the house republicans holding this up. now that the president has gone on national television, and put the blame where it belongs squarely to their shoulders, that one of two thing will happen. either they will yield, although i doubt it because they're idealogs. maybe the main stream of the republican party will say, look, for the good of the countriering with can't just follow these people. they don't represent a majority. >> there is an option. it is not being tested properly legally nobody seems quite sure if it is a legal option for the president. under the 14th amendment, he basically go alone.

no default has ever happened before. would you encourage the president to take that option if all else failed? >> well, i think we ought to avoid that option if we could. it is unclear how the courts would determine it. it is unclear how the credit markets would regard it. it is something that should be explored down the road, perhaps go but not for this scenario. better, a much better way to go is the reid compromise. it gives the republican what's they've asked for. it has no revenues even though most want revenues. it says amounts of cuts will be equal to the debt ceiling. it is sort of an offer they can't refuse and they won't take yes for an answer. it leads to you wonder what is going on here? when 50 or 60 house republicans say they think it is a good idea not to pay the debt ceiling and default, i think that says it all. the reid compromise answers

every objection they have had. no revenues. an amount of cuts again equal to the amount we raise the debt ceiling. and everyone of though cuts was approved by the bipartisan negotiations led by joe biden. what more do they want? >> thank you. with the clock ticking down, when it come to the blame game, the gop might have the most to lose. 51% of americans said they would blame the republican that's the there is no deal to raise the debt ceiling. far fewer, 3 in 10, said they would blame the president. [ male announcer ] this is the network. a network of possibilities. excuse me? my grandfather was born in this village. [ automated voice speaks foreign language ] [ male announcer ] in here, everyone speaks the same language.

♪ in here, forklifts drive themselves. no, he doesn't have it. yeah, we'll look on that. [ male announcer ] in here, friends leave you messages written in the air. that's it right there. [ male announcer ] it's the at&t network. and what's possible in here is almost impossible to say. another good thing about geico so like say you need to report a people wclaim, alright./7.k. a real person will be there to help you. then you can use geico.com to view photos of the damage,

track your claim, print an estimate. you want an english muffin? they literally hand you a toasted muffin with butter and jam. (sigh) whaa. tasty. that's, that's a complete dramatization of course, but you get my point. vo: geico 15 minutes could save you 15% or more on car insurance.

we're back now with senator rob portman. senator, thank you for joining me. you ran budgets for president george w. george w. bush, a lot of people blame the financial crisis on bush tax cuts and expensive wars.

isn't it time you guys took one for the team, the team being america? >> well, if the team is america, the issue is how to get the economy moving again and that's what republican have been focused on. if you take the president's own words of about eight months ago where he said we shouldn't be increasing taxes on a weak economy, that's basically what republicans have saying today, deal with the underlying problem, which is the debt and the deficit. the president seemed to be talking past the congress, because as senator schumer said a moment ago, there are now two proposals in congress, both deal with the spending side, and the president, instead tonight, chose to rehash and relitigate old arguments about tax increases. we're focused on the right thing, which is not hurting the economy by increaing the burden of taxation, moving immediately with cuts, moving to tax reform, which is needed, getting rid of the loopholes the president talks about over the next six months and then making progress. i think the situation is a lot more hopeful than the president described tonight.

he was talking about something that's been decided up on the hill, which is we're going to focus on spending cuts. >> it was interesting the president quoted reagan. would you rather reduce deficits and interest rate busines raising revenue from those not paying share share or accept higher interest rates and higher unemployment? i think you know the answer. reagan was the great republican hero. he had a point, didn't he, the president raising that quote? >> he did. his point, we need to reform a broken tax system. there have been thousands of changes to the tax system since 1986 when reagan worked with tip o'neill and others to reform it. economists agree with this, peers. we could have a more efficient tax system that would encourage investment, growth and jobs and therefore economic activity and revenue. but do it through tax reform. let's not at this time, as our economy is trying to, struggling, to get out of the

recessioning weaken it further by increasing the burden of taxation. that's the issue. what the president said tonight was appropriate, perhaps, a week ago but tonight on capitol hill you have two proposals, one schumer talked about reduce spending immediately over a longer term, giving extension to the debt limit and a republican proposal which has more cuts immediately, cuts like the ones the democrats are proposing, and then a six-month process for deeper cuts. we're not focusing on the hill on raising taxes. we're focusing on doing what the markets have said we must do, including credit agencies you talked about earlier, which is to get the underlying problem settled, which is the growing spending and the deficits and the debts. >> there are millions of americans who are steaming with anger tonight, saying, who are these politicians to put this country in this precarious position, the markets are already reacting very adversely to this, the rest of the world is watching aghast at the

world's number one economy in this meltdown, as you guys all argue with each other. they just want skulls cracked and a deal done. yo are you prepared to compromise, as the president asked, and get the deal done? >> i think it's happening. it's not happening with the president as much as it's happening with harry reid and john boehner, speaker of the house. they're closer than the president would indicate in his remarks and i think it's incredibly important we extend the debt limit. it's absolutely necessary. it's not sufficient, we have to deal with underlying spending problem while we do it or else we won't have addressed the concern that standard and poorer's and the other credit agencies are talking about. they will downgrade the debt unless we deal wit the debt and deficit issue by controlling spending. we're lurching toward the right result, which is extend but do so with spending cuts in place

and then setting up a real process to deal with tax reform and the entitlement, structural changes in our important entitlement programs that are necessary because those programs are not currently sustainable. >> north, thank you. some say grover norquist is a man of the middle of the debt crisis, president of americans for tax reform and 250 members congress signed his anti-tax pledge. grover you're the eye of the tiger in all of this, people take their lead from you on the republican side. there will be no tax increases. most impartial observers outside of america say that is crazy, and you have got to change your attitude to this and allow some tax increases. >> well, since the problem that america faces is our government is spending too much money, over the last ten years, certainly it's sped up over the last two

to three years, the only way to solve overspending problem is to spend less. raising taxes is what politicians do rather than reduce spending. so taxes should be off the table for two reasons. one it distracts from cutting spending, it gets the in the way of reducing spending. but also tax reform is something we need to do put some time and effort into it, think it through, over the next couple of years should radically reform the tax code and have lower rates, as reagan moved to do in '86, not a tax increase the '86 tax reform bill, eliminated deductions in credits, reduced rate. we ought to move toward what reagan was proposing. we shouldn't raise taxes, we should shrink bigger government. >> it's a situation that has been pretty well unprecedented. we've had this enormous global financial crisis hit america and americans incredibly hard, and then watching a bunch of politicians squabbling in

washington as their livelihoods are going down the drain and what they want is people in your position to start thinking the unthinkable and as long as you refuse to do that, as long as you say, no, it's our way or the highway, the chances of a deal are dramatically reduced and america could, within a week, go into default with all of the carnage that would cause. >> well, we heard president obama call for tax increases to pay for the size government that he wants. but you also heard republicans and democrats, harry reid's proposal does not raise taxes. you might -- i hope the newspapers tomorrow will write down the budget cuts he's talking about. he saves a trillion dollars by winding down wars that are winding down overseas, those spending reductions might not be real but at least he's beginning to put a list together. we still haven't seen a budget or a proposal from obama for six, seven months now.

if he would put something in writing it would be easier for the american people to look at it and see if it's real. the house has passed both the $6 trillion spending restraint in paul ryan's budget, $2.5 trillion spending restraint in cut -- cut, cap and balancing and again waiting for obama to put anything down in writing. he gave a political speech tonight. it was an essay form. what we need is some arithmetic with numbers written down. obama still hasn't done that for us. >> i mean, it's a very high stakes game, this, isn't it grover norquist, because the american public according to the polls tonight, have made it pretty clear they blame the republicans more than the president at the moment. should america go into default, which would be completely unprecedented, never happened before, if that was to happen. the political fallout could be levelled at your party and not the democrats. so the quaint notion that many republicans seem to have that

this might be bad for president obama, it could be the complete opposite, everyone may turn into fury on the republicans. you don't want that, do you? >> well, i'm opposed to the idea of going bankrupt or hitting the debt ceiling. i believe that we should come up with something as senator -- as congressman boehner put forward, speaker boehner, to reduce spending dollar for dollar with the debt ceiling increase. but your quite correct that, over the last several months, president obama has focused on the politics of this rather than the economics. the republicans in the house have written out budgets and written out proposals and the president hasn't written anything down because he's writing speeches and reading from teleprompters. tonight you got rhetoric, not a single number, not a single real proposal. a conversation about all of the sacrifice he was willing to make. really give us some numbers, write it down so the american people can judge the republican house proposal, senator reid's proposal.

the democrats in the senate have passed a budge net three years. they haven't passed a budget in three years. what do they do with their time? how does the president fill his days when he's not willing to put forward in writing something that you and i and the american people could look at judge. he's playing -- he's giving political speeches and evidently that works a little bit, but the election's a year plus away. people have an opportunity to see that obama's not taking this seriously. the republicans in the housekeep putting proposals, written down proposals in legislative language that actually matter and the president gives the speech with the teleprompters and no actual written proposal that we could even look at. >> finally, finally, grover norquist, some stage, somebody has to hand the baby to the enemy. who is it going to be? >> well, look, the republicans would like $6 trillion in spending restraint over the next ten years. >> a