gloria borger is along with us tonight. the tone of the conversation, the substance of the conversation in washington is very, very different. >> it's very different. and i think you would have to say that the tea party has had the impact that it wanted to have. these members came to congress wanting to be transformational. i think in much the same way that barack obama wanted to be a transformational president. they've had a lot of success, they have changed the debate. don't forget when thor u of the debt ceiling first came up, the president said, i want a clean debt ceiling, i don't want anything attached to it. guess what, he got a lot attached to it. he got a lot attached to it that they didn't like. and they managed to take their republican leadership and say, this is what we want. now, john boehner, i would argue, was trying to do a bigger deal but the deal that he was trying to do, the $4 trillion deal he was trying to work out with the president had almost a

trillion dollars in revenues, and in the end he had to pull the plug on it, because that wasn't going to fly with his conservative republicans. >> and yet eric ericson, there is on the right, some grumbling, you among those saying is we should have gotten a better deal. there are those that say, why can't you say yes? you're getting at least a down payment on what you want here, are you not? >> yeah, i think we are to a degree. i just think the possible outcomes of this joint committee far outweigh what could come out of it. very to say, if tea party activists had said yes earlier, they wouldn't have gotten what they got. the role of the tea party movement all along has been to push as hard as they could, to get asp as they think they can out of republicans, not out of democrats. i would say as well as -- a majority of the tea party caucus in the house voted for boehner's plan. we're not giving credit to americans in november of 2010

who sent them overwhelmingly to the house of representatives because they really thought washington spending had gotten out of control. >> david gergen, i believe you're still with us. one of the questions last week when the speak he was having trouble was his leadership is somehow undermind? is that the case or would this vote tonight, does john boehner prove he's in control of his caucus and the house? >> he had a near death experience over the last couple weeks, but i think he survived it and he strengthed that he got his plan through and he got this compromise while eric and a lot of other conservatives are not happy, there are going to be a great number of conservatives around the country who are going to think, absent john boehner this may not have happened. the tragedy will be -- if the president and john boehner had not been able to cut that deal that they were willing to talk about a $4 trillion deal, it would have included some tax revenues i thought were fair,

more than that, it would have been $4 trillion in one fell swoop, we wouldn't have this uncertainty now sur rounding a congressional committee and what's still coming, which i believe is going to cause containment on the investment community at a time we need to light a fire. >> how much of this in the economy is uncertainty in washington? you mentioned earlier, new manufacturing data this morning that is downright depressing. gdp that shows the economy is anemic at best. we're going to get another jobs report this friday that most people think will look like the june report and we'll have an anemic economy there. how much of that is uncertainty about the tax environment, or how much is that in india and china and the global factors that are changing so fast and rapidly, the u.s. economy is having trouble getting back on its feet. >> it's a little of both. to break it down by%, i think

you're right in that part of it is regulatory uncertainty in washington. but that goes beyond this debt ceiling. i think it's important to note that the ceo's in this country, the business people, the investors, they didn't think this should be unsent. they had a lot uncertain the when it came to financial reform, regarding atm cards and mortgages. the debt ceiling was something they thought would get increased and we could move along. this was an unexpected piece of opportunity on top of the others that were out there. i think we have a long way to go before we get the clarity that the business community needs. creating jobs goes beyond that. no one knows how to do it. government isn't great at doing it, and they don't know how to get to that job creation number. that's the problem that's going to face the president in the election season as well. >> huge problem. the president says this plan will help at least. we'll see as that plays out. live on capitol hill tonight.

special coverage will continue in a moment. still to come, more details on the big senate vote. more on that, and the liberal angst, the rumblings, the grumblings. how will that play out. be kind to your eyes with transitions lenses. transitions adapt to changing light so you see your whole day comfortably and conveniently while protecting your eyes from the sun. ask your eyecare professional which transitions lenses are right for you. ask your eyecare professional for your transitions certificate of authenticity for your chance to win instant monthly prizes or our $20,000 grand prize!

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back live on capitol hill, the house has passed a

compromise plan to raise the debt ceiling, the government's credit line to enact some spending cuts over the next ten years. the senate will vote noon tomorrow on that plan. the president of the united states expects to sign it by the time the sun sets tomorrow, ahead of a midnight deadline when the government would run out of its ability to borrow more money. as this played out the former speaker of the house, now the democratic lead he, nancy pelosi, liberals in her caucus do not like this plan. they think it could lead to social security cuts and medicare cuts. she's a partner with the democratic president who wanted this compromise. listen to nancy pelosi as she outlined what she didn't like. >> on the other side of the grid we have problems with no revenue in the bill when we are having severe cuts. and we need to make some cuts, severe cuts and initiatives that impede the education of our children, clean air, clean

water, food safety, you name it, from that one red cent from the wealthiest people in our country. we have to weigh this. that's what they're doing right now. >> our democratic contributor paul begala is with us. they're raising not one red cent. that's what has many liberals angry. they're saying the president was not tough enough. the president is not talking at the moment, but he's a happy man tonight after getting this plan through the house 269 to 161. back to the woman who once was speaker, who had to hand the gavel to john boehner in january. they don't think the president was tough enough, he fought enough on the revenue side. you hear some people grumbling, we should have a liberal challenge to the president. i think that's just sour grapes. in a 2012 election which will be much more competitive than 2008 if liberal downturn is down just

a bit, if liberal turnout is down just a little bit, can you say, adios, virginia, bye-bye north carolina, let's see what happens in colorado zm or ohio. i saw you interviewing sherrod brown. you're right, not even the notion revenue, and these silly and loopholes of the corporations get for corporate jet or oil companies and even that was off of the table and not a penny of revenue and enormous win for republicans and enormo enormously bad for the president. bill clinton, when he balanced the budget and put together the economic plan it was 50% revenue and 50% spending cuts which was seen by independents who bill clinton was focused on like a laser beam as you will e careca john, independents like that sense of shared fairness and the president has a difficult hand dealt to him frankly, but i

don't know that he played it very well. if you look at the last eight months, john, has been extraordinary and back of december 10th, if the memory serves the president agreed to a bipartisan deal to cut the taxes and enormous amount straight to the debt, $858 billion to pass a tax cut seen as republican priority and then in april, spending cuts were passed to continue the operations of the government and the continuing resolution and now up to $2.5 trillion perhaps all in spending cuts. if you ask me who is winning this thing, it seems to me that the party who wants lower taxes and less government spending is winning in a rout, and maybe not my party, but as an analyst, it is looking like a rout to me. >> and erin burnett, if the they winning in a rout the republicans it is not the super committee but the reform and tax changes and possible revenue increases, but some say a sweeping reform lowers the rates for everybody and gets rid of the loopholes and others say, no, they will tinker around the

edges, because it is washington, but the climate of the exercise after the divided government is what? >> well, not very good. john, if we don't get past the point of getting rid of a loophole is seen as an increase in taxes, we have a long way to go. most of the ceos that i have spoken to are in favor of eliminating the loopholes and some would hope it leads to overall lower tax rates and many acknowledge it is not for everybody, but loopholes is a big issue and something we have to get beyond, but no expectation for overwhelming tax reform as long as there is intransigence in terms of raising the taxes at all or eliminating the loopholes. >> and as that conversation plays out in washington, it plays out in the 2012 presidential election and erick erickson back into the conversation and the republican candidates for president were asked how they would view this deal and would they support this deal and we know you are not run, and we know erick erickson is against it and mitt romney, no, and newt gingrich

effectively no, and he would like his own plan, and that means he does not like this plan, and jon huntsman, yes, and tim pawlenty no, and ron paul, no, and the texas governor rick perry who may get into the race said he supported the first plan and gary johnson of new mexico no, so, a resounding expression of no except for jon huntsman and you say what? >> well, i say that the republicans see this and they are boxed in with this deal come 2013 should they win and the bush tax cuts will expire on january 1, 2013, and the spending cuts and the sequestration goes into effect january 1, 2013 and see the republicans in congress boxing them in, but i have to disagree with at love the statements that the republicans and the dems and including paul are making. i see this as a win for barack obama maybe not on policy, but on politics. he is now managed to get the debt ceiling fight gone and managed to get tax reform taken

up before january, and if the republicans were to block it through this committee, he could go out to say they are willing to cut defense and senior citizen's medicare and not do tax reform and in effect, he can push it off and if he does get re-election, he has secured locked in funding for the health care plan and lock in getting rid of the bush tax cuts and if he wins in 2012, he has a huge liberal policy win there and for right now it looks like he is playing politics better than most people are giving him credit. >> and talking about changes in washington with erick erickson saying it is a win for president obama, and paul begala saying not so much. we will come back, and see how the play of the vote on the house of representatives played out, there was a huge personal drama as well. more on that in a moment. [ man ] natural gas vehicles are used somewhere...

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around noon today the democratic leader of the house of representatives nancy pelosi received a call that there would be a special guest on the vote for compromise. and an hour after the vote, speaker john boehner was also notified. take a look at this. that is congresswoman gabrielle giffords, six months ago when she was shot in the head at point blank range and there were questions if she would survive and questions if she would ever recover to the point to return here at the house of representatives and look at smiling and hugging with her colleagues, and gloria borger a

big vote, but a personal moment. >> i kept thinking after a rancorous few weeks and it was so great to celebrate something the triumph of the spirit of gabrielle giffords and seeing the members standing there to applaud their friend and welcoming her back. it was just a wonderful, wonderful moment. >> and to that point, david gergen, you know, the d eas hav been arguing with the rs and to see the entire house as this dramatic vote was finishing up, it was a giant surprise to most of them and pretty remarkable. >> oh, gabrielle giffords provided the most heartwarming moment we have had in months in washington and lifted our spirits just when we needed it and reminded us that despite all of the deep differences there are times when we can come together and celebrate human triumph. >> david gergen and gloria borger thank you for being with

us. and erin burnett and kate bolduan as well through the dramatic night. just to reset for you, the house of representatives have passed the debt ceiling compromise and now it goes to the united states senate, and that vote at noon tomorrow, and a lot of the pieces to analyze and discuss. we will see you tomorrow night after that dramatic vote. our coverage continues "in the our coverage continues "in the arena" which starts right now. -- captions by vitac -- www.vitac.com aanr and welcop and an. moments ago the house of representativrepresentative re historhistoric budget bill that nobody pit was a clebr

leaders, the president of the united states barack obama and the speaker of the house john boehner, and two men who have staked their political careers and their future on the separate visions of how much this country should spend and on what. it has been a fierce battle of wills and tonight, it is very difficult to say who won if indeed anyone did. all day both of the parties have been venting their anger over an unhappy compromise, but during the vote, a rare moment of unity and joy, when congresswoman gabrielle giffords returned to the floor to cast her vote, her first public appearance since she was shot early this year. [ applause ] amazing moment. a standing ovation and lots of hugs and tears all around. gabrielle giffords returning to the floor of the house for the first time, and her first public appearance since she was shot earlier in the year.

meanwhile, we are still staring though at a debt ceiling deadline until the senate votes tomorrow. i will have a lot more on all of this nin a moment, but first a look at the different angles will be drilling down on tonight. >> reporter: everybody loves the gipper, and since we can't ask reagan what he thinks of the debt deal, we will ask his former budget drirector and nobody will like his answer. >> thundering con flag ration. >> and a lot of people are mad at the president, and we are not just talking about the republicans. >> his own party thinks that he caved on a deal that could cost him re-election. and then the committee of 12 -- who the hell are they? deciding trillions in budget cuts? france had a committee of 12 once, and how did those cuts work out? now, for more on the top story, the long-awaited vote to raise the debt ceiling, and kate bolduan is on capitol hill for us, and this budget deal has been going on since may, and it

is august now and any chance to put it behind us say by next year, january? >> well i can promise that the issues relating to the debt ceiling will continue for the coming year, because that is exactly how we have heard from the members that they want to continue the conversation about cutting spending and getting the fiscal house in order, but in the house this evening the republicans and democrats passed it with a healthy margin, 269-161, and the threshold is normally 216, so that is a healthy margin that the debt ceiling deal passed by. right after the vote, i had a rare moment to speak with house speaker john boehner, and he rarely speaks to cameras in the hallway, and or actually speaks to reporters in the hallway ever, but i had a rare moment to speak to him and get his reaction of the vote and the surprise of seeing gabrielle giffords enter on to the floor and listen to this here. >> i feel great. >> reporter: what are you thinking of the vote this evening? >> i thought it was a strong vote, but first step in many steps yet to go.

>> reporter: what do you hope that the american people take and the message for the american people tonight? >> on the process works and it may not be pretty, but it works. >> reporter: and your thoughts of the surprise of gabrielle giffords coming on to the floor. >> i was very surprised. it was nice to see her. >> reporter: did you say anything to her, sir? >> i met her when she got off of the elevator. >> reporter: and what did you say to, he sir? >> i said welcome back. >> all right. kate, what was that like? >> well, it was very nice. normally, he walks past here and quite honestly ignorings me every time i try to ask him a question as he does with all reporters and not just me, but it was nice to get a moment to get his reflection on this vote and you know he has invested a lotf of political capitol to g the republicans to push this compromise bill through, and you can see the relief on his face this evening, but of course, all eyes turn to the senate with a vote expected tomorrow, don. >> all right.

we are all awaiting that. thank you very much, kate. now to the white house and the chief white house correspondent jessica yellin and the president turns 50 this week, and does he feel like celebrating this week? >> well, i have to say that 501 not the number that has been on his mind the most lately, don. you know, there is a lot going on, and he will be celebrating also raising money in chicago. i think that they will be maybe not a celebration, but a huge sigh of relief here and you could feel it in the body language and in the mood here at the white house already that they did their heavy lift, and already tonight, people starting to drive home for the first time at a reasonable hour from what people have been working here until midnight and 1:00 and all around the clock here, and so a sense of relief and the president turning 50 in chicago later this week, don. >> i have to ask you this, jessica, what is this incident in which the democrats refer to the tea party as terrorists and tell us about that. >> well, so, earlier today, the

vice president biden went up to capitol hill, because as you know many of the democrats and the liberal democrats have been outraged with the deal and feel that too much of it was a give to the republicans. and he sat there to go into a closed caucus meeting with the house democrats and muttple democratic sources in the room tell me that many of them were venting the frustration and i will look down the quote, but some of them said they felt pick pocketed by the republicans in the deal, and that the country was quote being held hostage and that the republicans were quote terrorists. now my sources are telling me that the vice president said in response at least in part, well, now we have taken away their weapons of mass destruction. and then he subsequently gave an interview to cbs news and he says that he did not use the word terrorists in return, but there is a back and forth whether he actually youed that word, but the bottom line is that obviously, a lot of anger, frustration, and the vice president was there to placate and listen to them vent, and he

heard the fury this morning and then he got the opportunity to see gabrielle giffords on the floor, and so a lot of highs and lows for him in one day. >> very nice moment, and very nice moment to watch it live and witness live as well. thank you very much, jessica yellin. >> thanks. and you heard the anger of the democrats and strong worlds to describe the republicans and the negotiating tactics, but some say that their leadership didn't go far enough. republican joe walsh is one of them who voted against the deal, and he joins me now. good evening, sir. >> how are you? >> great. and before i ask you about your vote, what do you say about the democrats who compared some republicans to terrorists and say that ta republicans held the country hostage? >> again, fairly outrageous, and you know, we see often the media goes after republicans and right wing folks when they use this language. the other side does it as well, and they need to be called to the carpet. that is not at all appropriate, but look, enough with the name calling, and we are all big boys

and girls and doing serious work up here. we should focus on what we have done today and what we need to do. >> and listen, i don't want to get our eyes off of the ball here, because i think that we in the media will do it to both sides if they name-call here and not just republicans here. >> i agree. >> i want to make that clear. >> no, i agree with you, but i do think that, again n the profession, there tends to be a bit of a bias to go after our side, and i mean, that the president, i think said, and i could be off a month and a half ago that those republicans aren't going to put a gun to our head, and i didn't hear anybody in the media, the mainstream media go after him, and again -- >> well, i don't want to get too in the weeds but we did talk about that story and that is your opinion and i will allow it. >> you got it. >> and let's talk about the task at hand and why did you vote no to the deal? >> well, i give my leadership all of the credit in the world. it is amazing to me how these troublesome house republicans of