are saying on the campaign trail. i expect we will be hearing a lot more over the next year approaching the election. >> about an hour on the political news, go to our website. that's does it for us. see you back here tomorrow morning. >> taking over. see what the guys in washington are going to do today. let's get to it. it is monday, august 1st. i'm live in studio. 7 as we call it here. we are following every development going on in this nail biter in washington. hours before the deadline to raise the debt limit. the house and senate expected to vote on a deal announced by president obama and the leaders last night. we are going to be watching the white house briefing. that happens later this hour. the big question is will congress approve this deal? >> we are luck to come up with this agreement within 48 hours of the deadline and i hope we

can pass it in the next day or two and avert the first default on our national debt in history. >> i am worried about the size of defense cuts that may be contemplated, but that doesn't mean i'm therefore rejecting the agreement. i'm just worried. >> this is a head scratcher. stocks take a tumble after the debt relief rally that happened earlier this morning. the dow surged more than 120 points, but a weak manufacturing report, just sanction the market. stocks posting the worst weekly performance in more than a year in a debt stalemate last week. the dow is at 12:07. down 70 points. >> new reports of gunfire after what's described as a nationwide offensive against government

protesters. sunday's clash killed more than 70 people in that country and at least 50 of them in the city. security forces were responding to armed groups who terrorized citizens by firing from the roof tops of buildings. that's according to government there. egyptian security forces shut down protests in cairo. they boat those who didn't leave voluntarily. villains have been camped out on the square since early last month and voicing frustration over what they see as slow pace of change after the ouster of long time president ma bar action. >> new video of an air jet that caught on fire at the airport on friday. look at the smoke poring out of the jet after passengers boarded. it was an electrical short in the cockpit. all 291 passengers evacuated.

>> the two american hikers in iran find out if they will be released. they said they are innocent of spying charges. their com pan jon sarah shourd was set free last september for medical reasons and has been pushing for their release. >> i would ask the iranian authorities to show shane and josh the same compassion they showed me. they deserve it as much as i do and they really have been suffering so long. i would also if i could seek to shane and josh, i would tell them that it's because of them that i'm standing here today. >> mexican police say notorious drug cartel leader confessed to ordering the deaths of 1500 people. officers detailed the accusations against this guy, jose antonio hernandez. el diego. a day after they announced his capture.

he was one of the country's most wanted drug suspects. the drug the government is requiring companies to require free birth control without copays. >> about 40% of all pregnancyings in the country are unintend and when they are not intended, they tend to get the moms with less prenatal care. the babies tend to not do as well. the doctors and others got and said hey, obviously we want births in this country to be wanted. >> the big story, they had a deal, but it's not a done deal until congress r proves it. the cliff hanger is playing out and leaders are scrambling trying to sell the deal to the rank and file members. here are the highlights of the agreement.

in the short-term, it includes close to $1 trillion in spending cuts and raises the debt ceiling by about the same amount. a bipartisan committee would be formed to recommend additional deficit reduction that would total about another $1.5 trillion. if that panel can't agree, it's going to trigger across the board cuts. the deal requires congress to vote on a balanced budget amendment. let's bring in kate baldwin of the money team. give us a time table here. when it will begin in the senate? >> the time table is a little squishy at the moment. we are hearing that the debate over the bill and votes, hopefully happened shortly after both parties and both the house and the senate are meeting with the rank and file members. the meetings are starting now and continue over the next couple of hours. we could see debate continuing

after 12:30 and maybe in the 1:00 hour. it's also not clear that the house or the senate will be taking up this compromise bill first. it seem that is the leaders are trying to work it out as we speak. if everyone cooperates as you know which can be a challenge, i'm told they could have this compromise bill passed with both the house and the senate by the end of the day. that is of course if party leaders can do what they are trying to do. these meetings to sell this compromise to their members to show them while there is definitely something for everyone to dislike this in this, this is the best deal they are going to get. we did get an update from the white house to the schedule that vice president biden is coming over here to meet with house democrats and senate democrats. he will be in the meetings and making the pitch there at this moment. >> thanks. a long day just beginning. it's already a long day on wall street. christine romans is there. christine, what is going on?

they have seemed to passover the debt deal and now they are on to another crisis they are dealing with. >> i know. a near term crisis that is the economy. a manufacturing report that was disappointing that shows you that the economy is not on strong footing. even as you had hopes in world markets and u.s. markets that it would perk up, huh a reality set in on the manufacturing number. don't forget, we have known that this week it could be complicated for the markets for a couple of reasons. we need to know where the cuts will be coming from and what impact they could have. there is a fight going on with economists. these cuts were not big enough to really, really bend the curve for a long-term deficit. that's a problem and there those who say no, the economy is great because even cuts of 917 billion will hurt job creation. that will be hard in the short-term. it's not expected to show a lost

job creation. you have difficult waters here in the near term. >> we will be checking with you as this day progresses. thanks. bl >> do we get the government we want or the government we deserve? joining us to explain. i will have to keep my mouth shut. >> that's probably a good idea. standing up on principal. that political courage is a rarity these days. john mccain once voted against the bush tax cuts because he thought they hurt the middle class in the military. oh, yeah. that was 10 years ago. in 1998, then democrat joe lieberman called out president clinton for his immoral sexual behavior. george hw bush joined democrats in a deal even though he promised he would not. remember the now famous speech?

>> read my lips. no new taxes. >> bush did raise taxes for the good of the country and americans rewarded him for voting him out of office. in the mid-term elections, we elected 60 tea party congressman. americans voted for mr. obama because they wanted change and hope. you can bet that right now a lot of voters are scratching their heads. the fact is we voted for these people. congress will punish itself if it doesn't come up with a bipartisan agreement. that's not governing. as university of universe professor said if james madison were alive, he may reconsider the checks and balances.

power is divided in too many ways. you go through hell it get things done. the talk back question, do we get the government we want or the government we deserve? facebook.com/carolcnn. i will are the more later this hour. >> here's a run down of the stories ahead. a deal on the debt ceiling includes cuts in defense. we will have reaction from troops returning for the frontlines. a collective sigh from the u.s. and how news of a debt deal is ilpacts markets and the u.s. was not the only country faced with the debt ceiling. about the move today and other countries. the fbi has a new lead in a 40-year-old case of d.b. cooper, the only unsolved airline hijacking in american history. family gets this hissing slithering surprise. [ male announcer ] to the seekers of things which are one of a kind.

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vo: geico 15 minutes could save you 15% or more on car insurance. try capzasin-hp. it penetrates deep to block pain signals for hours of relief. capzasin-hp. take the pain out of arthritis. >> congress, would you guys please remember the golden rule? do unto others as you would have them do unto you? it's not do unto others before they do unto you. please go back to sunday school. >> i want to tell you what's happening in washington, d.c. the senate is in a break going into the respective caucuses, getting the deal explained to them. at the white house, the

president is sending over the vice president to try to get a deal through. we are watching it all as the pieces are now on the table. the next 24 hours will be a scramble to put it together. not everybody is happy with what's emerging the. the senate is set to vote on the bill from 2:00 p.m. eastern. that's what we are told. with time running out, will there be enough votes to pass? part that has people talking is potential defense cuts. members of the california national guard are returning home from iraq. sandra? >> reporter: yes, a happy homecoming here. friends and family members are gathered to welcome their loved ones after a year long deployment, but with the deal in place in washington, which potentially could blow a 350 billion dollar spending cut to the defense budget over 10

years. it's a hard time for a lot of family members to really take in this new information. they have a lot of concerns. i'm here with the white family. you are waiting for jacob, your husband. you are hearing about this deal in washington. we don't know the specifics about what will be cut to the budget, but so far what do you think of the deal that was dealt in washington? >> it's incredibly frustrating and sad that the men and women who make such a big sacrifice for their country and families have to worry about where they will sleep and eat if they don't have a strong support system and have to worry about paychecks being cut and support and all that. >> because there was a deal struck yesterday, they will vote on it today obviously. the paychecks will come, however there could be potential spending cuts for 10 years to the military which was the first in a long time, since 1990. what do you think about that when you know that your husband has to go out there and fight for the country?

>> it's upsetting. he gives so much. he to say goodbye to our baby girl a year ago. it's frustrating that all his hard work and everything he does and he has to worry about 10 years from now, the huge sacrifice he made. the people in washington didn't have to say goodbye to anybody and they will be fine. >> jerry, you are a veteran and you are watching this play out. what do you think of the deal? >> i see the way things are at home for the families that get assistance from the government and i know that there a lot veterans out there and we have been watching this debacle over the last month and a half between congress and the president and it's about time that they understand that there is going to be a backlash in washington, d.c. in about a year or two when all of those in office might find themselves out of office. i'm sick and tired of listening

to the six-figure retirements and all these other privileges and now they will cut out of the best of my knowledge ets of the veterans and the active duty military and reserves? to me if they don't want to fight for their country, they ought to leave those people alone and keep those people going and those of us who have served in our country in an honorable situation, we depend on federal funds to pay for our disabilities and for our retirements and we gave the most and get the least and it's always coming dun to the fact that everything is on the back of veterans and those who have served and those that get assistance. >> we don't know exactly where these cuts are going to take place in terms of the military budget, but the fact that $350 billion will be cut over 10 years. do you think there is room for savings? >> always room for savings. we give out a lot of money to a lost other people and

situations. they don't deserve our money. we have been fighting two wars on two fronts. we have been fighting for people to keep them free and those of us who fought over the years to serve our country find out that we are the ones who are going to pay. bring our money home and to our people and don't worry about building mosques and all this other stuff. >> thank you so much. we look forward to meeting your son when he comes back. definitely strong opinions here at this day of homecoming in california. >> as you have been trying to point out, strong opinions and not a lot of facts. a lost assumptions being made. >> absolutely. we are just trying to find out the details out of washington. obviously this is all very new because of the deal that was brokered last night. everyone waiting to find out the details. all of us are here waiting and

devil is in the details. we are waiting to hear more from lawmakers in washington as well. >> okay. thank you so much. some of the stories and affiliates are coming across the country. the fourth anniversary of the minneapolis bridge collapse. they are dedicating a memorial with the names of the 13 people who were killed when the bridge collapsed. 13 will be released. 145 people were injured when the bridge span broke up. it happened during evening rush hour, dropping cars into the mississippi river. the fbi said it's investigating a credible lead in a 40-year-old hijacking mystery that has been the stuff of legend. that man known as d.b. cooper hijacked a flight and parachuted out of the back of the plane with $200,000 in ransom money. they are looking at a new suspect and checking an item

forever fingerprints. it's not snakes on a plane. it's snakes on a car. a family in memphis watched a snake slither from under the hood of their suv and on to the windshield. the stock market surged on news of the deal and then tanked. what's driving the markets now? a live report is coming up. [ vending man ] hi there!

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>> the drama is happening behind the scenes where the republican and democratic parties are trying to sell this debt ceiling deal to their respective parties. the white house involved with this.

the briefing today at the white house is expected to start in about 25 minutes or so. we will have live coverage. on cnn, money.com. the lead story is the debt ceiling, not just what's going on, but the devil is in the details to see what's going on. what is going on on wall street is not good. the dow down 63 or 64 points after a bump on the deal. there was more bad news. markets surround the world overnight on news of the deal. cnn is at the new york stock exchange joined by a trader. maybe you can explain what's going on. >> i am. i can give you an idea of what's going on. the dow goes up as much as 120 points on the debt deal. then immediately after we get a manufacturing report, we saw the dow fall. the other way the dow is down about 62 points and a weak manufacturing report showing that we are getting dangerously

close to a level that shows no growth in manufacturing. wall street not taking it well and getting more perspective with me. the trader at the new york stock exchange, is this a little too little and a little too late? >> definitely confidence has been tested, but the deal came down to the wire and everyone thinks the deal is going to happen as much as they say the drama is happening. at the end of the day, people expect that the legislators will vote for the deal. is it a deal that wall street likes? partly the market is saying no. the market is also saying that the number which was very weak logically it makes sense because the number was just off the charts. other reports we got have been really benign to negative. it makes sense. the market doesn't like it. clearly the market will focus on the fundamentals again. once the deal is considered to be done. >> what are about a downgrade? it's possible with the credit

rating at aaa right now. >> it's going to happen. it's almost too late not to happen. the s&p is threatening and if they don't do it now, they didn't get what they said they wanted. they wanted $4 trillion in cuts. $900 billion that doesn't start until 2013 and 1.2 trillion if the legislators come up with a deal in november. a lot of uncertainty to the deal. if we do get a downgrade? will we see a hit? >> i don't think it turns much lower. they are taking a hit, but the market settles in here and the line is 1260. i expect that will be the low. >> a little bit of breaking news and this is a different deal. 5.9 quake in japan. not that big on japanese

standards. no tsunami warning yet has been issued, but they felt this in tokyo and we will continue to follow that. i wanted to pass that on. from wall street to washington, the debt deal is what we are watching today. that's the big news. we will go on a quest to see how the deal is playing overseas. richard quest joins us ahead. hang in there, richard.

>> a white house briefing minutes away and the latest on the debt ceiling. experience spread in orange, new jersey where seniors are kind november a panic about social security checks. workers dreading the possibility the city may have more layoffs. do we get the government we want or the one we deserve? the chance to talk back with the question that carol is asking. the drama over the debt deal has most of us worried about the 401(k)s, mortgages and car loan

rates. the stalemate rattled global marks and investors and cnn's richard quest joins us from this side of the atlantic to talk about overseas reaction. they step you out on the mall on one the hottest days you can pick. miserable. >> it's 96 or something degrees. i'm in a hot suit. they say that this debt deal is a dog of a deal. so we found the dog. this is emily who is going to have an opinion on the deal. emily may not have an opinion, but her owner does. your name is? >> glen. >> from? >> connecticut. >> sir, the deal has been reached. how worried were you and what do you think of what's happen something. >> it took way too lock. the market was affected by the length of time it took. hopefully it will work. the people are ultimately going to pay, our children if we don't

get out of this. >> your children are over there somewhere. are you worried that they are borrowing the money and leave them with the bill? >> that's what's going to happen. >> where are you from? >> wales. >> the uk? >> that's correct. >> as somebody who has been looking from afar, what would you say? >> i agree. it's an impact across the world. it's a major effect on the euro. the dollar weakened a lot. >> in the uk, we have taken a dramatic amount of austerity and the government as taken criticism. >> that's correct. what they did is do it positively and immediately where as here they vacillated too long. >> wait and vacillated too long? is that fair? >> i agree. you prepared to take the misery of cuts that he's taking back home? >> i don't think we have a choice. the cuts have to be made. >> there is no doubt. he's right. the cuts have to be made. what is sad really is the

bankers got away with everything. >> i agree. the bankers got their bailout and it's our turn to pay for their mistakes. >> the welsh view and the connecticut view. as for the dog's view. what do you think about the pay out so far? i think that's the most intelligent thing we will hear from this congress so far? >> richard quest on the mall. appreciate that. members of congress, they need physical therapy after all the arm twisting. some on both sides are not relationship. barbara lee of california, thanks for joining us. i don't know if you have gotten all the details that you want before you decide how you are going to vote on this, but you did say this was similar to the boehner deal and that's a deal you voted against. >> reporter: it's similar to the boehner deal and with the

footprints and fingerprints of senator mcconnell. of course that means that i worried more about social security and medicaid being at risk. i was reading actually some of speaker boehner's talking points and his power point presentation. let me refer to you one. he said it requires base line to be current law effectively make it impossible for joint committee it increase taxes. we know what this means. if in fact there these huge cuts now, we know discretionary cuts that will impact the most vulner low income working poor and little income individuals. without any enhanced revenues on the table, this opens the door for cuts in medicare and social security and medicaid. that is just totally unacceptable. we also know the joint

committee, let me say the committee that will be put together, i'm on the appropriations committee, i know the deadlocks that take place. the tea party members were elected to congress to dismantle government. that is what they are doing. we are going to see this debate again in december. it's really a tragedy because we could have raised the debt ceiling last year. we must raise it. we cannot allow the country to default. we could have done it in a different way. we are in the process now of reviewing this. we will be meeting with the vice president at noon. the congressional black caucus will meet. we are in the process of analyzing and determining who is going to be hurt the worst. >> first, i don't think anybody in the tea party is elected to dismantle the government. >> it appears that because when you look at the type of proposals and their agenda, it's all about saying no to anything that would allow for opportunities and job creation

and for investments in people. >> congressman -- >> we will not put forth any job agenda. >> let me stick to your party, the party that controls the senate and the white house. the vice president is on his way to talk to you and other democrats in the house to try to get you to approve this deal. let me ask you flat out. did the president and the democrats in the senate sell you guys out? >> i would be very interested to hear what the vice president says. the president was dealt a terrible hand as you know as a result of the bush economic policies. we have to remember that. secondly our leader, nancy pelosi and senator reid have been stars in making sure that senior citizens and mare care and medicaid are protected. we are members of congress and have to look out for constituents. the american people are hurting

and we want to make sure once we turn the page that jobs are created. you didn't hear that discussion take place much at all. this was a deal that was driven by the tea party and speaker boehner and senator mcconnell. it should have been a deal that was not associated with any debt ceiling debate or discussion. we raised the debt ceiling many times under democratic and republican presidents and it has been a clean debt ceiling. i voted for that in the past and we should have done that this time to begin to look at how we create jobs because so many people are unemployed. you have people who have been unemployed over 99 weeks who can't even apply for unemployment. we need to figure out how they get taken care of and how we create jobs. deficit reduction is important, but the greatest way to reduce the deficit is to create jobs. consumer spending.

most economists say that's what we should do. >> right now you are a no on this? >> sounds like right now that speaker boehner put together the frail work for a deal that was similar to the proposal he presented and that is what he presented to his republican caucus. he said no tax enhancements and no revenue increases. that to me is very wrong. billionaires and millionaires and corporate tax loopholes and the two wars that did not need to be fought, we have a way to raise revenue. this is not a balanced approach. i want to hear what the vice president has to say. i will ask the questions as are many members of the democratic caucus. we will see what they have to say. i think this is a pathway that opens the door to begin major cuts in medicare and medicaid. that is unacceptable in these discreationary cuts i know will hurt the poor and the most vulnerable and that is

unacceptable. >> we will look forward to see how you will vote. next hour we get a view from the other side of the aisle. joe walsh of illinois joins us to talk about his version of the debt deal. the folks in washington said they do have a deal, but what does it mean for your hometown? besides the u.s., what is the only other developed country in the world with a debt ceiling? take your pick. denmark, germany or australia? [ male announcer ] millions of men 45 and older

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. so what is the only other developed countly in the world with a debt ceiling desides us. denmark. the debt ceiling there is set so high they will likely never hit it. there is the answer. live pictures from the white house and a breasting beginning any moment now. we are waiting for jay to come

out and the clock ticking. there is meetings going on in the senate. we have senators arriving there for the various deals and meetings. there is senator reid who has to try to sell it to democrats and get a deal passed. we are told that john boehner will have a news conference. that will be at 1:30 today. all these events happening live within the next couple of hours and of course you will catch them all live here on cnn. what does the new budget deal mean for state governs? felicia taylor in orange, new jersey. this is a cash-strapped state that has a lot riding on what happens next with the plan. what has people worried there? >> what people are worried about is whether or not they will get social security checks and whether or not they will get the medicare they deserve and worked for years to receive. that's what the spending cuts are about. will there be the entitlement programs down the road? i am joined by two residents of

orange, new jersey. howard, you are a senior citizen and you have begun collecting social security. are you worried it won't be there down the road? >> worried is not the word. this is something that not only i must address, but hundreds and hundreds of people should get involved in this. those who have not received it have immediate concern. i'm not saying i don't have concern here either, but who knows. i'm not certain whether i will start cutting it immediately. i am deeply concerned. you worried about making ends meet and the money is not going to be there for the senior citizens in the country? >> absolutely. the rent increases and all these things, the budget, those things i'm concerned about. my wife and i are concerned about where i'm living now and the reason for the increase and

i can afford it. those are my concerns at this point. i know right now the rent is going up and the pay with social security, i am concerned about the near future. i am. >> you grew up in this town of orange, new jersey. how frustrated are you about what's happening in washington? >> very frustrated. i worry all the time. i work 40 years and you are going to tell me when i'm 66 and two months because i can't leave at 65 now that there is not going to be any money for me to retire on? if you put money away in 401(k)s and individual iras, the way they are handling everything in washington, the market is going to drop and the money drops and i have not recouped what we lost the last time the market went drastically down. i'm concerned. most of all, not only for myself, but the next generation. i have adult children.

what's going to happen to them? >> the problem is people are worried about down the road. are the problems going to get fixed? what sounds like a victory in washington is not a victory on main street. >> it's interesting because we are talking about the military vets in california. same thing. everybody believes their personal paycheck and the government program is going to be cut. we don't have any other deals yet. even the congresswoman was alluding to the fact that there would be draconian cuts. this seems to be a lost unnecessary fear coming from washington. >> it's all the uncertainty. we don't have any idea about the cuts. there is a deal on the table, but are we going to see grants handed out or will they be deminnished. does it mean firefighters are not going to have jobs or there won't be job creation. that's one of the major concerns in the united states is whether there will be jobs.

9.2%. how frustrate is it that washington can't get it together enough to help the people. what happened to getting it together and having a compromise? >> glad you have given voice to the people in orange. thanks a lot. there is other news going on that involves casey anthony. she has been ordered to serve probation in the county of orange. we have details. you are asking why. this is because of her conviction on a check fraud case. she will serve one year supervised probation. she has to report to the probation office within 72 hours. as we get more details, we will certainly pass them along, but this is casey anthony being released from custody after she was acquitted in her trial. we will continue to follow that. d an electric motorcycle? what if we turned trash into surfboards? whatever your what if is,

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deal through. jim acosta is probably the best team on television live at the political desk in washington. the president finally got his deal. that could help in the polls. some are saying he lost a lot of political muscle in this trade off. what did he have to give up here? >> well, you talked to a lot of here? >> well, you talk to a lot of democrats on the hill today, drew, and they will tell you he gave up the store, gave away just about everything to get the deal done. what the president gains is they won't have to go through this in six months from now. there was some talk in the earlier proposals that there might be another debt ceiling vote that would have to take place in the fall or around christmastime, and that is now out of the deal and not part of the deal, and it gets the president beyond 2012, so he can focus on the re-election campaign. so that is something that they are probably pretty happy about. but, you know, i will tell you, drew, that if you talk to a lot

of democrats on the hill today, they are pretty steamed at this president over the deal that he has cut, and that's why you see the president on the hill today, because they are trying to rally the forces, and until they have votes this deal is not done, drew. >> i was asking barbara lee about this, and reminding her democrats control the senate and the white house. i guess this is more for a political analysts, jim, but it really seems like they got out maneuvered on this? >> well the tea party caucus inside the house really drove the debate? if you talk to liberal democrats like barbara lee, they will say the entire process will being held hostage by the tea party who said you are not getting a debt ceiling, unless we have cuts only and revenues are off the table, and in that kind of environment, it's difficult to extract the deal you would like to have when the other side is

saying we will go past the ceiling debt deadline, and we will be happy to do that unless we get what we want. that's why a lot of people in the town this morning are saying the narrative is the tea party won this one, even though many of them may not vote for it, drew. >> appreciate that. for the latest political news go to cnn.com/politics. kids, going back to school, and a crisis of your own, and you know what it means. shopping. you may be paying more for supplies. alis alis alison? >> expect to spend up to 25% more this year, according to huntington's annual backpack. if you have a kid going to elementary school, kids could

spend up to $530 for supplies, and high school families are looking at an $1,000 bill. >> that doesn't include the clothes, right? >> exactly. shop in your own home first. that's what author of "money smart kid" says to do, take inventory, and you may have a lot of supplies on that list already, and she says a lot comes down to needs versus wants with your kids. if they are old enough have them get involved in comparison shop. and 16 states have tax holidays this year, and many are on clothes, school supplies and computer, and go to the website at staxadmin.org and you could get deals there.

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the white house briefing is under way, and jay carney at the podium talking shop and laying out procedures and some time lines. gloria will watch it with us. what are you expecting from the white house today and what question would you ask if you were sitting in the front row? >> do you have the votes. that would be the question. the response i would presume

would be ask the republicans. i think the big drama here today is of course whether john boehner -- how much of his caucus will he lose. my guess is he could lose 80 members of his caucus, and whether nancy pelosi can provide the votes among her democrats, some of whom are not happy with this to get this over the top, and whether the vice president and president can persuade them to do it, i remember back with the t.a.r.p. vote in the heat of the 2008 election where we were all waiting, and remember it failed. everybody assumed they cut a deal and it would pass and then, of course, it failed and then they came back the next day and passed it after the market dropped over 700 points. do you remember that? >> i certainly do. >> yeah. so i think the question here now is will the democrats get in line behind the president. >> gloria, let's see if somebody asks that question. let's go to the white house. >> it will be bicameral and

bipartisan with equal representation between democrats and republicans, and that committee will be charged with finding ways to reduce the deficit even further. $1.5 trillion further. everything is on the table for that committee. everything including both entitlement reform and tax reform. let's be clear. the president thinks, as you know, that the biggest possible overall accomplishment in terms of deficit reduction is a desirable goal, as long as it's balanced. he looks forward to through the process set up by the committee of having the debate, about what our priorities are, if we need, as legislated through the deal, find another 1.2 to $1.5 trillion cuts. how are we going to do that? by asking only the seniors to

sacrifice, or middle-class families, or are we going to ask corporate jet owners, and that's a debate he is looking for. >> why should democrats be confident you will be able to get those commitments in the special committee if you could not get them up front? >> we came close to achieving a grand bargain with the speaker of the house. belatedly it was conceded in that agreement that was negotiated very pain stakingly, between the speaker of the house and the president of the united states, revenue was on the table. i quote the speaker on that. and that was envisioned by the speaker as part of a grand bargain had that been achieved. secondly, we saw close to 20 republican senators endorse the ideas hbehind the gang of six revenue, and it included $2

trillion in revenue. i think there's an enormous potential for those that work on the committee and then those that consider it with their votes to see that the best possible way to achieve significant further deficit reduction beyond the initial trillions is through a balanced approached. and as you know, the legislation has within it an enforcement mechani mechanism, a trigger, and the well-designed triggers create huge incentive for congress not to pull them. and that is the case here. those cuts that would be mandated if congress failed to act, it would be across the board cuts, split evenly between defense and domestic spending, including entitlements, although i will note social security and medicaid and beneficiaryies

would be harmed. and that creates a greater potential for the committee's action to bear fruit. >> when you look at the big picture, the debate was so contentious and partisan, what can the american people expect washington to be able to do, particularly on jobs between now and the election. >> that's an excellent question. there's no doubt the process we have seen in the past seven weeks and months is kind of a mess. the president made clear a week ago today when he spoke to the nation from the residents that while americans voted clearly last november for divided government they did not vote for or choose dysfunctional government. in fact, they expect when they have divided government or one party controlling some parts of the government and another party

controlling others, that they will work together and together find a compromise that is balanced, that is more representative of where the american people want to go. now, this was a mess. there is no question. it was a circus at times. we unnecessarily sent the message around the country, and the globe that the united states might default on the obligations for the first time in its history, but in the end compromise won out, and an agreement that we believe strongly is in the interest of the american people was achieved. so looking forward, we hope to be able to build on that. none of this is easy, because all of the issues are hard, but you do begin to build more capacity for compromise in the future the more you get under your belt. we certainly hope that to be the case, because we will not stop. this is -- this is assuming, as we do and hope, that congress will pass it and the president then signs it.

we then move on to the work of the committee and to all the other initiatives that we need to get going that will help create jobs and drive the economy. we believe fundamentally that there is broad consensus in washington that we need to focus on growth and job creation. >> what is the message to democrats who see this as a bill that reflects more republican priorities than democratic priorities? >> i just went through, i think, a number of arguments that we are making about why this is such a strong agreement and why is it no doubt a compromise, and it's not a perfect agreement or the one that the president or democrats would have crafted if only they controlled all levers the government themselves, but it does accomplish significant things which i just went through with julie. >> why should democrats give their support? >> because it protects key

investments up front in the cuts that are launched initially, and the trillion dollars like the p pell grants, and creates a firewall that insures that savings are gleaned not just from discretionary cuts, and they have a view and it has been expressed that we need to take a balanced approach going further as we seek deficit reduction. that balanced approach would include revenues. >> you spoke about job creating measures, and is the president

still committed to doing that? >> the president is still committed to doing that. the president publicly talked about an eb extension of the payroll tax cut as part of the big deal, and that's not the case in the deal that is short of a grand bargain, but there is no question that he will continue to push for this, and he will make the argument that it's absolutely essential to continue to put extra money in americans' pockets, as they deal with high energy prices and food prices, and we certainly look forward to having that debate in the fall, and he will press very strongly for it. i note that there was broad bipartisan consensus at the creation of the tax cut at the end of 2010, and so we expect there would be broad bipartisan consensus to extend it for next year. yes? >> house republicans seem to think the super committee will

have a difficult time doing tax reform because it's supported by the cbo and the tax cuts are set to expire in 2013. could you comment on that? >> i would simply say the suggestion that it's impossible for the joint committee to raise tax revenue is not accurate and it's false. if the joint committee decides, for example, part of a balance deal should be able to eliminate tax subsidies for gas companies or corporate jets, or deductions for high-income earners, they could do that and raise revenue through doing that. and nothing say the committee operate under any baseline. >> does it apply to the budget act? >> the committee can act according to whatever baseline it chooses. it could act, for example, decide to use -- operate under the fiscal commission, or they

could operate under the current policy baseline, which is what speaker boehner relied on when he agreed to the $800 in revenue. that's simply not accurate that this committee can't consider and act on revenue raises. >> and that includes lowering rates? >> again, i mentioned the bush tax cuts as part of that. and the president has made whatever the result, if congress does not act, on tax reform, which broadly speaking is supported. it will be a balanced committee between republicans and democrats, and they need to produce a product that will then have fast-track authority and be voted on by congress. it's our expectation that that product will include revenue as well as well as finding areas of

reduction. you can be sure that the president will honor his promise to veto any legislation that would extend the push high income tax cuts beyond 2012, which would create $1 trillion in revenue raizoriseraisers whe happens. >> in may and june, casualties are down and civilian casualties are up 50%. why is that? >> you know, i would refer you to the department of defense. i confess i have not studied those numbers of late. but obviously, you know, the situation is -- continues to be a tough one, and fighting continues to occur. but we believe that we made significant progress in

implementing the proposal the president put forward and we're now in the process of implementing the drawdown as he made clear in his address, not long ago in drawing down the forces beginning now. >> was that a concern of the president -- >> i have not looked at the numbers, so i don't have a specific response related to those numbers. obviously we believe very strongly that we are in a position where we can begin to drawdown the forces, and we are continuing to do so. >> could you say this plan would help avoid a drawdown in the credit rating? >> well, we take action and control the things we can control. what is important about this is that we have not simply averted what would have been an absolute disaster, assuming, again, congress acts, which would have

been passing a period beyond which we would no longer have had borrowing authority, and risking or creating the possibility of default for the first time in history, but we lifted that cloud of uncertainty for a sustained period of time, and we think the real reduction which is part of the package and the enforcement mechanisms that guarantee further deficit reduction is taken before the end of the year. we believe that should send a reassuring message around the world as well as around the country, obviously, that washington is beginning to get its fiscal house in order. >> is it fair to say that your concern in that area is much diminished? >> our primary concern was that we reach an agreement a bipartisan deal to insure that we lift the cloud of uncertainty in the debt crisis, and through that we would insure that we

have significant balance reduction, and we hope that sends a signal that washington is getting its act together in dealing with the tough issue. >> do you think it's enough? >> for? >> to avert that? >> i don't have a comment on how the rating agencies make their judgments. all we know is that we in washington, the policymakers and elected officials do the things to make sure that the american economy is going in the right direction, and we are demonstrating getting our fiscal house in order and hope that message is made clear. >> what kind of assurances did the democratic or republican leaders give the president that they can get the votes to pass this? >> it was part of the agreement, it was the expectation that they could get the votes to pass this, and hopefully they will. >> and did you have a signing ceremony? >> i don't have an scheduling announcements to make on that. >> you mentioned the president

and vice president are selling this to get members of congress by saying it's victory for the american people? how is it a victory when it still adds $7 trillion to the deficit over the next ten years? >> it significantly reduces the deficit and addresses some of the drivers or will address the drivers of the long-term debt, and if you are asking if the government continues to function, and do we still owe -- do we still have to borrow money to pay our bills, yes, that has not been eliminated. we will continue to have a debt. the point is to get the growth in our deficits and the growth in our debt under control, and that's what this agreement begins to do very significantly. will all the work be done? absolutely not. that's why the joint committee's work is so important, and i am sure as that occurs and takes place, there will be more work that is necessary. but this is significant and

should not be discounted. the ink has not been printed on the paper yet, and let alone signed into law. we're talking about how it's not substantial enough or what the next step is. we ought to take a step back and remember where we were 24, 48 hours ago, a week or two weeks ago, and the prospect that was hanging out there that america would not honor its obligations for the first time in its history, and the impact that would have on our economy and the global economy, and the fact that while i got a number of questions understandably during briefings and recent days and weeks about why we were optimistic that we could reach a bipartisan compromise because it looks so unlikely, and the fact is here we stand today, less than 24 hours after the compromise was reached anticipating votes in both houses of congress that will achieve something rather significant. that's a victory for the american people. >> you talked about two weeks ago. two weeks ago the president

talked about shared sacrifice and ending subsidies for oil companies, and he talked about this being a fair deal where he was offering 3 to 1 spending cuts. where are the tax revenues? >> well, norah i think we just addressed this. we did not get the grand bargain up front, and we all know why. as the speaker himself said, there was $8 billion on the table of revenue as a grand bargain and tough choices were made by both sides in the potential agreement not reached, and we did not get that done. the speaker decided -- >> he said we gave them everything we wanted and we get nothing. >> i feel like i have taken this question all the time and i have been clear about how that is not the case. we got significant achievements -- well, let's step back, also. the president of the united states believes the deficit reduction is important.

it is a false setup to suggest that somehow a dollar in deficit reduction is a loss. it's a positive thing for democrats -- >> but what about spending and revenues? >> he fully expect the joint committee will include tax revenue as part of the consideration and product. but as you know throughout the process, there were cuts identified through the vice president-led process in domestic spending, and also in the presidential led process with the speaker of the house. you see that embodied in the first spending cuts as part of the deal. is that not a negative. that's a positive. as the president made clear, progressives need to understand. we think most obviously do that deficit reduction is essential, done in the right way, because we need to get our house in order to insure that we can do the things we need to do to grow the economy and make the key investments that we need to make.

>> can we address the word that new york times used today that the president had been diminished? >> i disagree. i think the president showed enormous leadership through this process. again, he directed the vice president to lead talks with the house majority leader that produce basically the foundation of the initial round of spending cuts that were part of any envisioned compromise, and then he had talks with the speaker of the house, while it did not bear terms on the agreed upon compromise, but they made clear through that process that for significant deficit reduction to be achieved beyond the initial round of spending cuts that are part of the agreement there has to be balance. that was agreed upon and on the table, rather, and put on the table by the speaker of the house, and acknowledged -- it was certainly acknowledged by the nearly 20 republican senators who endorsed the ideas behind the gang of six.

i think a threshold has been crossed here and the beauty is that the elective leaders are catching up to the american public who overwhelmingly support the president's position that balance is essential as we approach the hard choices. so we think the president's leadership has been essential to that process and will furthermore insure that the kind of deficit reduction we get in the future will be the right kind for the american people. >> that's white house press secretary, jay carney, trying to defend the president's deal on the debt ceiling, talking about possible tax hikes when the future committee meets and protecting key investments like pell grants and creating a firewall to protect social security and medicare and medicaid. as that goes on, we continue to watch the drama on capitol hill. expecting both the house and the

senate to take some sort of action on this. we're watching all the angles and waiting for those particular speakers and senate leaders to come out and talk about how they are getting the votes. it looks like congress is looking like -- this is from our producer up on the hill, it looks like it will pass the senate. the question is at the house. democrats may not deliver enough votes to pass that. we're also wondering if enough republicans, particularly those conservative republicans who wanted much more than this deal, will vote for this and get this through the house. understand that congressman joe walsh from illinois is joining us from the capitol. there he is right now. you are one of those conservative, quote, unquote, tea party caucus guys that we're talking about. are you voting for this, congressman? >> i am one of those troublemakers, those house conservative republicans.

thank god we're here. we have changed the entirety bait. jay carney has a tough job because if he thinks the president likes this compromise, he has another thing coming. the president has been dragged, kicking and screaming into this. this is a victory for our leadership. john boehner did a great job. >> i take it you are voting yes? >> i am not sure if you can hear me. >> i lost you there for a moment. look, i think that that the republicans have done a great job of getting the best that they can. and they have had a difficult time dealing with what i would say is another side that just hasn't been serious to the problem. i was one of 22 republicans, though, a couple days ago who voted against the boehner plan,

and this plan isn't even quite as bold as that. >> let's not read the tea leaves here, and i don't mean to say that in gist. are you voting for this or against this? >> no, yeah, i can't vote for this. again, i give leadership great credit forgetting the best they can. it very well may pass out of the house, but there's just too much of a deal here when i really believe we needed a big, bold, solution. we're talking about maybe 2 to $3 trillion cuts in two years, and we'll borrow another 10 to $12 trillion regardless. we're bankrupting the future. this does nothing to change the fiscal disaster that we're in right now. >> congressman, and let me look at reality right here. you say boehner has done a great

job, and your speaker wants you to vote for this. you are telling me you are not going to vote for this, and let's say other members of the tea party caucus won't vote for this, so we have the far right that will not vote for this, and the far left won't vote for this, so this could fail in the house? >> again, yeah, drew, i am not a progress naus tau indicator. there is something in the house that we need to get done by tomorrow. that sentiment may carry the day. i always said don't be obsessed with august 2nd, be obsessioned with the debt crisis. so taking another day or two is the way i recommend. i may be in the minority with that type of thinking. michele bachmann is a definite

no vote on this. are you being pressured by your leadership or have they given up on you? >> i don't know. we will talk to leadership in a few minutes here. we'll go into conference. they have done a great job. john boehner has the toughest job in the world, and he has done a great job of trying to corral all of us. i will tell you, though, i think the band of fiscal conservatives in the house, we have done a great job of moving this debate towards where clearly the president didn't want to go, and where a lot of the politicians who had been in the town for so long didn't want to go, which is spending cuts. we needed spending reform. i voted for cut cap and balance two weeks ago. until we change the way this town spends money, we're not going to solve the long-term spending crisis. >> a solid no vote on this deal, and we'll see what happens later

on in the house. thank you for joining us, congressman. >> thank you, draw. the market continues to tank while this all goes on. down 130 points after rising at the opening bell. we'll be following that as we continue the news. labored breathing ] [ coughing continues ] [ gasping ] [ elevator bell dings, coughing continues ] [ female announcer ] congress can't ignore the facts: more air pollution means more childhood asthma attacks.

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we have been hearing from

joe walsh who is voting against this bill. wow, this thing is far from over. i thought it would have been a done deal. gloria, let's start with you. jay carney at the white house trying to defend his president, and i think the defense and the selling point for the democrats, if i am hearing correctly from jay carney is we will still get the tax hikes down the road. >> yes, and i just was on the phone with somebody very close to these budget negotiations who makes the case to me that we will know the tax increase issue, the minute you see who the republicans appoint to the committee. and that will be one sure sign. the second thing you have to also keep in mind here is that the bush tax cuts which would bring in what, $800 billion of revenue if the bush tax cuts on the wealthy expire, is due to

expire in the new year, and that somehow will play into this debate in one way or another. although it would not be part of the purview of the joint committee. that's a pot of gold, right? it's sitting there at the end of the rainbow there. the question is how does that play into the debate with all of these onerous cuts hanging over there heads. maybe they would decide to dip into the pot. we have to see. i think it's the white house's hope that would be part of the whole negotiation at some point. >> gloria, do you think that that already is a part of this conversation behind the scenes? did the republicans say, look, we will not put a hard line-no tax guy on the committee? >> well, we don't know. for example, the chairman of the house budget committee, paul ryan, was also on the deficit

reduction committee, and he was one of the republicans that did not sign on to the plan, although he is in favor of some kind of tax reform that would lower rates. so you know, it's very -- it's kind of very hard to tell right now. let me also add one other thing. on today's vote in the house, if it does happen today, and one would assume it would, i was told that the legislative folks counting votes for the house feel okay, but i think as you and i were talking about earlier, drew, the fear -- the fear is that unlike the vote on t.a.r.p., there is sort of not a lot of moderates around these days to make these things pass, and so you know, they believe that this is another question of whether boehner's speakership is on the line here because he has to deliver. >> let's get joe johns. joe, you are on the house side and that's where the drama seems

to be taking place. and the house, very iffy, and it's iffy from both sides of the aisle. i am not sure the far left nor the far right will go for this, and as gloria said are there going to be enough in the middle to pass? >> right. this is what i used to call the concerns about a so-called halloween commission or a halloween caucus, when you get people in the far right, people in the far left, all voting against a bill for different reasons, and the question, of course, is whether the center holds. we're actually hearing from a number of democrats on the left who are expressing concerns, and they are saying they are on the fence and they are not sure or convinced yet, and then there is are some republicans as well, s conservative republicans saying the same thing, and then we will

find out sometime this evening, early evening, i am told, at about 1:00 eastern time, here at the capitolcapitol, the rules ce will meet to get this thing on the floor, and then it will be up to the vote counters to go ahead and try to figure out how they push the vote through. it's definitely not a sure thing, drew. >> gloria, the reflection on the speakership you said, but is it going to be a reflection on the president? we have the vice president being sent over to capitol hill to get enough votes. i am wondering if they can get foamer speaker pelosi's vote on this? >> right. i think she is clearly not enthusiastic about this. they are all clearly worried, nervous, and focused on this joint committee. some of them believe it's a trap for democrats, that they won't get the revenues they want.

on the other hand, some of them also believe if republicans refuse -- if you look towards a 2012 election, and let's assume this is political and you are not really -- the debt ceiling issue is not out there. they believe it frames the debate for the democrats because the democrats will say we were for balance, and republicans were for entitlement cuts, and by the way, we don't have the outline of all of the specific entitlement cuts. they believe once the cuts are on the table, these spending cuts, that people will understand how it's going to affect them and that will force congress to work. so that's the kind of argument that -- political argument at least aside from the national argument we're making about raising the debt ceiling that the political argument, that's the argument joe biden will be making in the caucus, which is that you have to do it for your country and by the way, in the end, biden would argue, and the democrats would argue, republicans will be exposed for

only being for cuts, and we're for balance. that's their argument. boehner will make the argument to his caucus, we got most of what we wanted. we did not get tax increase on this bill and you will get a vote on your balanced budget, maybe, and so go do it. there's not much more we can get out of this president. >> so frustrating for boehner. you heard congressman walsh said, he's done a great job, i'm voting no. incredible. >> it helps to be one of a dozen children i think where you have the patience of a saint because you have to learn to work with others. boehner, he is a pro. he has been around the block once or twice before. he knows how to listen and work. look, this measure, by the way, includes extra money in it for moderates, who were complaining they were not getting anything. so he needs their vote, so there is something in there for them,

too. >> all right. gloria, joe, thank you both. drama happening behind the scenes. but on the big board in front of everything, is the dow jones industrial average taking a big hit today. down 1 flaen. leto work full-tim, be a mom, and go to school. the opportunits that i had at the university of phoenix, dealing wh profesonals teaching things that they were doing every day, got me to where i am today. i'm mayor cherie wood, i'm responsible for the largest urban renewal project in utah, and i am a phoenix. [ male announcer ] find your program at phoenix.edu.

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vivint. simply smarter. the debt limit drama going down to the wire on capitol hill. if congress does not approve a deal in the next few hours, we're told the nation may not be able to pay its bills.

the senate expected to take up the bill first and now the house will vote before the senate. that's where the drama is. one democratic official is telling cnn the effort to line up the votes for the deal is very close. we're following the story minute by minute as it plays out on capitol hill. north of there on wall street, it's playing out not so well today. alis alis alison kosik. >> we got this dismal manufacturing reading coming in weaker than expected. that stripped away all the gains we saw. it showed there was almost no growth in manufacturing in june and that's why investors are selling today. many analysts thinks the debt deal is behind them, and wall

street is looking ahead. investors are looking forward at the bigger picture of the economy and it's not a pretty picture, and it's a harsh reality. we had the anemic reading, and that has everybody bracing for the big report coming out on friday. >> we will continue to follow this after this break. ♪ anything for you ♪

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like you deserve. looks really good. call us at... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance. responsibility. what's your policy? scrambling up on cap hull hill right now. the house is where the trouble could be, because folks on both sides of the aisle not yet sold on the deal. vice president biden will meet with house democrats will answer questions and get them in line with the president. the clock is now ticking and he has to get it through congress,

but did the president give up too much in the compromise. a senior columnists for "the daily beast," the press laying into the president thinking he surrendered to this. what is he getting out of this that will be able to sell his party to pass it? >> well, all the folks talking about the imperfecttions of the bill, and they need to ask themselves will they prefer default? and there a great deal of uncertainty on the hill as to whether this will pass. activist groups on both sides, the far left and the far right. if the far left and far right are both complaining, sometimes it's a sign that common sense is actually happening, and the question is whether the center can hold and the president is trying to position himself at the head to bring them together

to move our nation towards bringing down the deficit in the long run. >> this is a complex issue. i can't recall seeing one quite like this before. a lot of people believe the tea party forced this issue, and forced the vote, and forced this deal, and a lot of people in the tea party in the end are not going to support it. i don't know what that says? >> well, it does say that there is a certain strain of all or nothing absolutism in some of these folks, and they approach politics with ideology. the president has tried to meet them halfway with speaker boehner on a grand bargain. one of the frustrations for the president and the bill is we essentially kicked the can down the road to this committee. the question is what are the triggers and who is appointed to the committee. some of the tea parties should ask themselves whether they can take yes for an answer. this is a significant cut in

spending. that should be a win. in the long run, the debt needs to involve entitlement reform and tax reform. and the tea party needs to ask themselves, it seems to me, whether their first priority is deficit and tax reduction, or ant anti-taxism. they need to know whether they are interested in primarily grandstanding. >> the president has got one thing out of this, he doesn't have to deal with the debt ceiling until his re-election bid goes to the voters, but does he in the meantime have to deliver a tax hike on those people that the democrats consider rich. is it all or nothing on the tax hike between now and the election? >> i think this has been a real

false dichotomy the whole way around. the republicans want to position themselves against a tax hike. if you go back to the previous commissions they have had, the gang of six, and they looked at revenue increase at looking at tax loopholes. for all of the tea partiers that campaigned against earmarks and removing them, they should identify the tax loopholes they can live with. and i don't think the issue of certainly this commission is going to be the bush tax cuts. they are set to expire at the end of 2012 after the presidential election. the real question is whether we could use the leverage to get the tax reform through, and it is something that excites conservatives, fiscal conservatives, and that's something that should be seized by people that are serious about getting the ball down the field and not simply playing to the base. >> and they are talking about the defense cuts, the potential

defense cuts. and members of the california national guard returning home from iraq, which should be a very happy day, but sandra, nothing is set in stone here, but part of the new deal is that a congressional panel will recommend spending cuts, and if congress rejects the plan, 50% of the cuts automatically come out of the pentagon. what are folks saying to you about that? >> reporter: definitely some concern here, drew, because these men and women who just served over a year now deployed in iraq, just touched down here, a hero's welcome for them joined by family and friends, but coming home to the news, as you mention, potential cuts to the tune of $350 billion over ten years in defense spending, so a little bit of concern here. we're just getting to talk to these soldiers that just touched down here. sergeant herrera is one of them, drew. you just came home and obviously did not pay attention to a lot of news going on in washington,

and you had a mission to accomplish in iraq and now you are hearing world of defense cuts. what goes through your mind when you hear that? >> they talk about cutting people off for national guard and it's short notice to go anywhere in the world. it's critical. it's very critical. but i have to look -- i have to listen to my boss, which is president obama, and deal with it for now, i guess. >> reporter: obviously, sergeant, we don't know all the details, where the cuts will be, obvious obviously, and there's a drawdown, but clearly you are concerned because of the country and also from everything that you have seen over there fighting for this country. >> yes, ma'am. we're in iraq, and we're in afghanistan, and our readiness posture there is all good.

but with all the cuts that they are talking about, i foresee jeopardizing our mission over there. i would suggest to everybody in the congress and stuff like that to reconsider and think out the well plan of how they are going to cut the military, because that's a foundation of the security of the country. >> reporter: absolutely. thank you for your service and welcome home. enjoy your family. a lot of concern out here as people, soldiers and the men and women fighting for the country just touched down to the news of these potential cuts. drew? >> well, i am glad they are reuniting with their families and this is a happy day for them. calling out the politicians, they are making all sorts of claims in the drawn out debate, and we'll put their statements to the test in a truth-o-meter. has custom solutions to make it happen, including mobile payment processing,

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we're hearing a lot of statements, and we want to see if they withstand the truth-o-meter. they have been putting these comments through the truth-o-meter. senator rob portman. he says 34 of the last 44 debt ceiling increases have been for less than a year, so this notion that short-term is somehow the exception is actually the rule. that's the end of the quote. is that true or is that false? >> we have rated this one true. if you dig through the history, you are going back to 1980, and most of the increases were short term. now people say the political climate is different, and we just had the big fight about it,

but looking at the history, the senator is right most of them are short term and we rated it true. >> congressman allen west of florida said this is the first time in history we had the raising of a debt limit also with spending cuts. angie? >> we rated this one false. now, if you look back again, in 1997, newt gingrich and bill clinton came to a budget agreement and that agreement did include spending cuts and a debt ceiling increase. and then, again, in 1990 and 1985, there were also agreements. so this one is not right and we rated it false. >> this is a video sent out by the ohio democratic party, which says that ohio's treasurer supports allowing the united states to default on its obligations. true or false? >> this one got our pants on

fire rating. now, there are a few particulars here that make this statement particularly inflammatory and we get into that on the story on the website. but the main point is, even those who want to see more spending cuts, they don't endorse a default. if you look at the history again, we have seen both parties lodge protest votes and said there should be more concessions this way or that way, but again these protests votes are not an endorsement of default. got the pants on fire rating. >> angie, thanks a lot for keeping them honest with us. thank you so much. we want to bring in tape that we just got in. may be hard to hear. nancy pelosi, the house minority leader was being asked about this debt deal, whether she supports it and whether she will vote for it. let's try and listen in and hear what she said. >> i am consulting with my caucus on the subject. they have had successes in this

in terms of protecting beneficiaries, and medicaid and social security and medicare, and that's important to us. and the 18-month extension, that's important to us. the firewall between defense and domestic spending, and the protection for poor people in the country is important to us. on the other side of the grid, there are problems with other revenue, and we need to make severe cuts -- and the initiatives for clean air and food safety, you name it, we have to weigh these out and that's what we're doing right now. >> that's nancy pelosi. he was also asked whether she will support the deal and apparently i'm trying to see --

this is from deirdre walsh, a reporter up there, and she says i will not make any announcement on that, trying to decide herself whether she will support this or not. well, you have been sounding off on "talk back" question, and carol costello is back with your responses. carol? >> thank you, drew. today's "talk back" question, do we get the government we want or the government we deserve? this is from michael, in 2010, lots of americans voted for republicans out of fear, and instead working for jobs for all, the gop has attacked union rights and abortion rights and social security, medicare and a host of other things. this from joy, if you expect leader to lead with their brains, then voters have to elect folks with brain and that entails voters using brains and not emotions. and this is from matthew, we get

the principals money buys. the days of finding great leaders are over. this from jennifer. i didn't get the government i deserved thanks to a bunch of mo m morons. keep the conversation going. facebook.com. what's this option? that's new.

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let's get you up to speed on what is happening with the debt debate. we're hearing the house will prepare for a vote on the bill soon. it will happen before the senate. the house is where there could be sticking points. a lot of folks on the far left, far right, don't like it. they are not sold on it. vice president biden will meet with the house democrats and might be meeting with them right now trying to get them in line to pass this bill in the house. meantime, over in wall street, markets really got hit today

after a big jump, a big tank. it's down 102 right now on the big board as we are watching that financial information come in. some of the other stories our affiliates are covering across the country, and there is is going to be a service there at the bridge collapse. 13 people killed and 13 doves will be released and more were injured when the bridge span collapsed. do you remember that during rush hour. it dropped cars into the mississippi river. that's the fourth anniversary today. and then a lead in a hijacking legend. he hijacked a flight, parachuted out the back and had $200,000 in ransom money. the fbi says it's now looking at a new suspect and checking a certain item forefinger prints. it's not snakes on a plane, but snakes on a