gown middleton wore except it has a zipper, not buttons up the back. thank you for watching. "erin burnett outfront" starts now. we are in washington, d.c., today. the super committee is charged with a super failure. they are charged with accomplishing nothing. 30,000 people taking to the streets, demanding the recall of governor scott walker. he's our guest tonight and the nypd arrests a lone terror suspect just before he built his first bomb. let's go "outfront." i'm erin burnett. out front tonight we're live from washington as ee get ready for the big debate tomorrow night.

there's a super failure tonight. such failure that the leaders of the super committee didn't even face the press. they issued a statement. which read in part, "despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed." they didn't say by someone else. but they kind of did. they agreed on one thing that they who had the mandate to do a deal with a simple majority would all kick the can down the road. even though we are in a crisis. that is pretty audacious. super committee, you had the power as they say, if not you then who? if not now, then when? the super committee was told to cut 2.6% of the budget over ten years. that's it. 2.6%. and they couldn't do it. the president did approach a camera to say he would veto what john mccain had suggested, which was to halt the automatic

spending cuts. >> i will veto any effort to get rid of the automatic spending cuts to domestic and defense spending. >> while the credit rating agency, standard & poors says it won't downgrade america so long as the automatic cuts stay in place, the nation's biggest bond investor says, that's just luck that will run out. bill gross of pimco telling me this after noon, that cowardly lions need to find courage or give their franchise to the market wizards. unlike a lot of people, we were hoping against hope that the super committee would succeed. because quite simply, the pain of cuts now would be better than the pain later. it's going to be like losing a finger versus having both your legs cut off. well, until the last minute this afternoon, i thought the elected leaders in washington would ultimately do the best thing for their country and make a deal. john kerry saw this coming. listen to what he said on "meet the press" on sunday.

>> there is a real threat that not only will there be a downgrade but the market on monday will look again at washington and say you guys can't get the job done and just the political confusion and gridlock is enough to say to the world, america can't get its act together. >> he was right. but he didn't do anything about it. today's markets just a taste of the long-term consequences that the partisanship and bickering in washington. u.s. stocks fell as you can see, 249 points, 2.1%. i say just a taste. when the day of reckoning comes and that day may not be immediate, we may get a sense that nothing in washington matters. but that's not true. it does matter. and when the day comes, markets and our retirement nest eggs will be smaller. interest rates will be much higher. experts say 18-plus percent. america's standard of living

will be lower. so instead of listening to 12 super committee members blaming each other, the nation needs to hold them to account. everyone in this country needs to fight back and do exactly what howard behl said in the movie "network." >> i want you to get up right now, go to the window, open it, and disk your head out the window and yell, "i'm as mad as hell and i'm not going to take it any more." >> i'm mad as hell, and i'm not going to take it any more. >> i'm mad as hell and i'm not going to take it any more. >> i'm mad as hell. peter, someone said to me, if there had been the surprise of a deal that we could have seen a true market surge, what do you think? >> probably. because the market last week got a taste that there was unlikely to be one. today was a strange market day

because yes, the stock market was down 250 points but the u.s. treasury market, which is the ultimate arbiter of the creditworthiness rallied. u.s. government borrowing, the cost went down today. so yes, someone -- it was european issues and problems and concerns that actually bailed out the u.s. treasury market today in the face of what should have been a sharp sell n-off in treasuries and rise in interest rates. >> so explain how this happens. people are going to look at that and say, okay, fail, fail, fail, and still borrowing costs in the united states dropped. if that's the case why should we worry about washington ever getting the fiscal house of the united states in order. >> right now that is fair. again, the u.s. treasury market

is benefiting from the problems in europe. industries around the world want cash and cash equivalents. that's dollars and treasuries. the demand for the note was the greatest in 20 years. scratch your head in light of what happened and wondering why is there this demand? that is problems outside of the u.s. be sure this is coming back to us when europe is somewhat calm and our politicians are not going to be off the hook as a result. >> we'll come back and it will bite, and it will bite badly. appreciate your taking the time. let's go to david gergen. senior political analyst here at cnn and john avlon, contributor and columnist for "newsweek" and "the daily beast." thanks to both of you. you were here on friday. we were all angry and upset and hopeful that thereby a breakthrough. but there wasn't. >> no. this is a profile in cower did he say, this is a new low for this government and people should be furious. they put party over country and now we're going to have a lot of trouble ahead. they had the power to do something about it. the fact that they put out a statement saying they still hope we can deal with our fiscal crisis and shouldn't pass this to the next generation, that's just incredibly insincere,

pathetic and folks should be furious and mad as hell. all that rhetoric about deficit and debt, they put tax cut theology over dealing with that. i'm just furious. >> david gergen, i'm furious too. in the deafening silence that was today and max baucus said maybe there's a last minute idea and all we got was a statement. they didn't even come to the cameras and a lot of them it appeared to have already gone home. then we get 15 statements from all kinds of people coming into the e-mail of blame game. it is shocking. >> erin, it's hard to capture in words just how angry the american people are going to be. i think most people look at this and say, those folks in washington have gone nuts. they're out of their minds the way they're conducting things. this is -- nobody can be quite sure as we just heard what's going to happen in the marketplace.

but this is a reckless gamble. coming in the midst of all the problems in the euro zone, to throw this on top of it, is going to increase nervousness in the markets. there's no question about that. we know it will haunt you. look at the kind of interest rates now. france and spain and italy have to pay. they've risen dramatically because of the deficit problems. you're going to find consumers in this country, their optimism was rising a bit. it will go back down. you'll have fewer shoppers in the store. the bigger question is where do we go from here? what can you do? i do think that the way people have to show disgust is through voting. maybe there are -- may the sen centrists can get a petition going, or a referendum. i think there are a lot of people that would sign a petition saying, i'm going to vote against you unless you cut the deficits before the 2012 elections. >> john avlon, what do you think about that 1234 we're going to talk about a recall effort in the state of wisconsin. people coming forward and saying what they think in a more vocal

way. it is -- because this is shocking. and by the way, we have to remember, you had, what, 130, 140 members of congress come out and sign a piece of paper saying they wanted spending cuts and revenue increases on the table. that includes democrats and republicans in congress. >> that's exactly right. we had that gang of 150 telling them to be bold, go for 4 trillion. at the end of the day they couldn't deal with $12.2 trillion. it is for us to straighten our civic backbone and call it out. you've seen the strategists tell people, you know, what, if it fails it's okay. democrats, we can run as the saviors of social security and medicaid, because we didn't agree to put forward any entitlement reform. republicans can be pure, saying they upheld their pledge to

never raise taxes. but americans, two thirds of them were okay with raising taxes on the wealthy, significantly cutting spending, and a growing number were willing to deal with entitlement reform. this is a lost opportunity. the only way to get their attention is to vote them out of office. >> david gergen, will this be put off until the election or do you think the president will be forced to use his veto when it comes to the automatic spending cuts, which we should make clear don't take place until after the election either? >> it does seem to me, erin, i'm trying to figure this out. the president has a couple of things to get done before the end of the year. he does want to extend the payroll tax cuts. that's very important for the economy. he does want to extend unemployment benefits. that's important for a lot of people who are hurting out there. he has to somehow get this organized. he's been extremely passive in this process. he put out a proposal and left town and sort of like, did he still have his hand on the tiller. it does seem to me that when the congress comes back after thanksgiving, he does need to call in the leadership and say, we've got to come up with some

action to get things done before the election. i do not think it's permissible to wait for the election to sort some of these things out. it's in the president's and frankly, their interest to get some kind of action going before the elections, not just simply leave this until november a year from now. >> all right. thanks very much to both of you. i'm sorry, it was such a depressing conversation. hopefully it will motivate people, right? i'm not going to take it anymore. that's how we all feel. thanks to you both. still "outfront" 30,000 protesters taking to the streets of madison, wisconsin. why? they want the recall of their governor. scott walker is with us next. the nypd arrests a terror suspect allegedly going to attack veterans and the police. actor hugh grant testifies in a phone hacking story saying, well, the press was bullying citizens. we'll be back. opens its doors... or creates another laptop bag, or hires another employee,

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they get so much of their business from people watching the games. if there are no nba playoffs, sales at restaurants open a year could drop about 3%. just because of the nba. washington is consumed with partisan bickering and finger pointing that makes us mad as hell. budget battles at the state level are like hand-to-hand combat. 30,000 took to the streets in madison, wisconsin to push for the recall of the state's governor. scott walker. governor walker led a very public and messy fight earlier in the year to balance wisconsin's budget by forcing public sector unions to contribute more to their pensions and healthcare and also, well, he cut the collective bargaining process. governor walker joins us now from madison. governor, thanks for taking the time to be with us. this is a story that riveted the nation earlier in the year when you had all the fights going on. now you've got people out in the streets.

you got 60 days. they say they have to get 540,000 signatures to force a recall. they think they'll get a lot of fake signatures. they said 700,000 to be safe. do you think they'll be successful in kicking you out? >> well, i don't think they'll be successful in that regard. i think there's a likelihood that they'll get the signatures. if they pay 10,000 people and activists to get an average of one a day for the next 60 days, that would be enough. that's still just a number reflective of 25% of the people who voted in the last gubernatorial election. a year ago, the majority of the people in the state elected me ultimately to do what i have done and that is to balance the budget, to do it without raising taxes. to still protect core programs. we added a billion dollars more in medicaid to protect needy families and seniors and children. we put more money back in the classroom through our reform. all those are things that unlike the people in washington, we kept our promises and i think the majority of the people in the state still want us to move forward and get the state back on track. >> now, obviously, some of the

democrats on the other side of the aisle would take issue with the way you've raised some of that. you cut $1.6 billion to education. did you make the right choices when you made the decision on where to cut? do you have any regrets in saying hey, wait i did too much here? >> unlike nearly every state, democrat and republican governors cut budgets and many of them cut education, higher education and other things. the difference is, the other states gave the local governments no other option. in our case, many of our schools have been the same or better than they were before because we gave them the tools not only to have a healthcare and a pension contribution, one that i might add that matching your pension and paying 12.6% of premium for health insurance is still less than what the average taxpayer pays in this state. even things like opening the market to compete for health insurance coverage, those have saved hundreds of thousands to in some cases millions of dollars when it came to healthcare. we gave them the tools to put

more money in the classroom to hire and fire based on merit and to pay based on performance. so the best and the brightest in the classrooms and our local government across the state. we did what other states wish they could have done. illinois to our south has been an abysmal failure. they've had to raise taxes, mak multibillion dollar deficit cuts and had to pursue layoffs of public employees and shutting down facilities because they didn't make the changes and reap rewards we did in wisconsin. >> do you think there's anything good that unions do for society? >> there's anything what? >> anything good that unions do for society. >> oh, i think private sector unions without a doubt. private sector unions are a partner in economic development. the difference was that the government level, you was a local official for eight years prior to being governor. i saw repeatedly times it when we had tough budget, we try to make reasonable concessions them. at one point asking for one week a month for a 35-hour workweek to avoid 400 or 500 layoffs.

they said for get it. lay them off. we made changes, saw what was happening in december before i took office. they wanted to ram through a contract that would lock in the higher benefits and ultimately higher taxes. we said no, we've got to respect the taxpayers in our state and respect the economy. that's what we did. >> all right. governor walker, we're going to be watching this very closely. ground zero for the future of our country there. thanks for taking the time to be with us. >> thank you. my pleasure. new york city police say that is exactly the kind of damage that could have happened if al qaeda sympathizer, jose pimentel was not stopped. but he was arrested sunday an hour before police say he was finishing his first bomb. his goal was to attack u.s. military service members, the police and the post office. he is now facing multiple terrorism-related charges.

pimentel is american. that's a profile that's been the case in many recent terror attack attempts. michael bloomberg, the mayor of new york city said the motivation came from overseas. >> the suspect was a so-called lone wolf, motivated by his own resentment of the presence of american troops in iraq and afghanistan, as well as inspired by al qaeda propaganda. >> joining me now is cnn national security contributor fran fregose towsend. we know the terrorism unit had the man under surveillance for about two years, but he was in touch with other radicals before he was killed. what do you think is going to happen here? >> i mean, you know, it will be interesting to see how did they use this informant, erin. why did it go on for two years? what was the turning point? we heard that the killing of al

awlaki in a drone strike sent this guy, pimentel over the edge and change it from apparitional to operational. it's interesting, he took inspiration overseas and the he looked at the internet and the inspire magazine to get the materials. he was going to target u.s. military personnel returning from overseas. why wasn't the fbi involved and where were the feds in all had? >> let me ask you this. when this show went on the air, i interviewed leon panetta. he talked about this whole issue of lone wolf. he said his biggest fear, fran, that woke him up in the middle of the night, worrying about a lone wolf blowing themselves up in a public place, a subway or something like that. homegrown terrorism. are you concerned that we just keep seeing more and more american citizens as a perpetrators? >> and they're very difficult to detect. one of the things you see, that's why i say how did they use the informant to get into this guy? we're seeing in the pimentel case, awlaki who is dead, his

ideology lives on. he had sermons that are audiotapes, there is materials on the internet. even when you kill them, their inspiration, ability to recruit americans and inspire them remains. this threat isn't going away. we have to still be able to get into -- we have to watch the organizations and the website and try to trace back to the individual who may be inspired and want to be affiliated with that. >> all right. fran, thank you so much for being with us. >> you're welcome. when we return, a new poll has newt gingrich leading. that's right, the leader now, the newt. so does that hurt him come spog the gop debate tomorrow? actor hugh grant testifying about a phone hacking scandal. you'll hear from hugh in a couple of moments. pakistan's problem with athletes foot. it's a story you can't resist. out front next. [ male announcer ] butter. love the taste, but want to cut back on fat?

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now a story we can't resist. pakistan's telecommunications authority has told the country's cell phone companies to begin blocking text messages which include terms considered obscene. now, the list of almost 1700 phrases. wow. 1,100 in english and 600 in erdu. includes the four letter offenders we won't say and most derivatives but it doesn't stop there. the list also includes words like naked, barf and monkey crotch. and a few, frankly, i'm not comfortable sharing on the air.

the position has been met with opposition. from customers and carriers. they say it's legal. under pakistan's spam law which prohibits people from transmitting messages that are false, indecent, fabricated or obscene. the ban was supposed to take effect today. but it's been deferred. because pakistan's cell phone companies have been asked for clarification. we can't resist doing the story for a lot of reasons. we've learned a not of words and phrases thanks to them. second, it gives us an excuse to play the infamous george carlin routine, seven words you can never say on television. >> the first day in fact, i had a call from an english language purist. some guy -- you know, he got on the phone. he tells me -- >> yeah. so we had a lot of those too. dolphins, weasels and axes combined in certain ways also make the ban list.

check it out. still "outfront," the outfront five. big wig investigator. >> leaving no stone unturned. without any fear or favor. >> hugh on hacking. >> i don't find that lovable and naughty. i find that cowardly and bullying and shocking. >> billion dollar back room deals. even the government to government trade. the so-called clean or formal trade is interdependent with the black trade, the completely illegal trade. >> all this out front in our second half. tdd# 1-800-345-2550 let's talk about fees.

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we start the second half of our show with stories we care about. we do our own reporting. we make the calls and find the outfront five. number one, the united states putting new pressure on iran. the u.s. naming iran and the central bank as a primary money laundering concern. treasury secretary timothy geithner announced that 11 entities have been black listed for helping build iran's nuclear program. they also warned financial institutions to think hard about doing business with iran. >> if you are a financial institution, anywhere in the world, and you engage in any transaction involving iran's central bank or any other iranian bank operating inside or outside iran, then you are at risk of supporting iran's listed activities. >> this comes on the day britain cut all of its financial ties with iran.

china and russia continue to do business with its country and be the biggest buyers of its oil. number two. what's next for the safe al islam gadhafi? he's been on the loose. the interim government wants to put saif on trial in libya and the international criminal court has said saif should be handed over to go on trial at hague. mike newton tells out front one solution is an icc trial which mandates saif be acquitted and transferred to libya for trial. number three. president obama, just a few moments ago announcing the pardon of five individuals, leslie barry, jr. for selling marijuana. ricky colick caught with marijuana plants. another one busted for stolen property. thomas ledford conducting illegal gambling business. and another for distributing cocaine. a lot of pot pardons there. 1.4 in october to a rate of

4.97 million unit. much more than expected. the number of homes on the market fell to 3.33 million. that's an eight-month supply, the best since january. economists say it was a positive report. housing market has a long, long way to go before recovery. we're still 30% off the highs hit in the summer of 2007. it has been 108 days since america lost the top credit rating. what are we doing to get it back? super committee didn't do anything. s&p won't downgrade america as long as the mandatory cuts remain in place. moody's says the super committee's success is informative but not yet decisive in determining the u.s. credit rating. the super committee a super failure ended all negotiations after failing to reach a deal to reduce debt. the committee has six democrats and six republicans. they didn't publicly address the crisis. they didn't come to the cameras as they usually do. instead, they released a

statement saying "we are deeply disappointed we've been unable to come to a bipartisan deficit reduction agreement. not nearly as disappointed as we're going to be if we don't begin reducing our debt. as we said earlier in the show, this is bad news for the economy. the lack of uncertainty, the gridlock will mean we don't get hiring now. set the market down 250 pints today. that means smaller retirement nest eggs for everyone and overtime when the day comes. one thing we know, we don't know when that day will be. that's the whole problem. interest rates will go a lot higher. what can we do about it right now? joining us from the left and the right side, we have kevin madden, will burton. great to have you both with us. >> thank you. >> your former boss came out and said he's going to veto anybody who tries to roll back the automatic cuts which is an important thing for the credit rating. let me ask you this one question. why was he so quiet until now?

>> i think that the president was working behind the scenes, his white house was working behind the scenes. and as senator kerry said, they asked that the president not be too vocal in how he participated here, because it would politicize the process and stop them from getting a deal. anybody who knows the president knows that he likes to work hard. he likes to dig down deep into the details and there's no shortage of ability there. but if making a deal meant staying away from the limelight, same way from the public viewing of his participation, then he was obviously willing to do it. the fact that republicans wouldn't take yes for an answer on anything that the democrats brought to the table is why we're in the place we are light now. >> something to be said that congress's approval ratings are so low that whatever their political party may be, you get in with the pigs, the pigs have fun and you just get muddy. you should just stay away from them? >> i don't think that as much as the president wanted to get a deal here. he wanted to reduce the deficit. everything was on the table but republicans refused to make a deal. >> kevin madden, what about the republicans?

i didn't see any of the candidates, republican candidates standing up and taking a real stance on this either. they were probably like hey, thank god we don't have to touch this. >> like you said, washington right now, it looks like one big pigsty and everything is dirty in this mess. republicans, in large part, recognize that the contours of this debate are playing out in 2012. regardless of what the super committee does, the deficits, spending, tax cuts, the tax rates, all of those are an important part of the debate. you see many of the candidates on the campaign trail talking about the issues and not encumbered by the partisanship here in washington. and that's a good place to be politically. i think the bigger part of this, i think, which is really hard for the president, is that he right now owns a lot of this, because what's baked into the cake is the performance of the economy. the overall economy is not performing well. you're seeing a lot of uncertainty and you're seeing a lack of confidence right now. particularly in the american public.

i think washington as an entity is going to be judged harshly. but the president will be judged particularly hard. >> how do you deal with the fact, bill, this isn't just the president, this is congress and not the guys that want to come in, but the guy who has the job and the democrats and republicans, dealing with the fact that there seems to be something so inherently dishonest. we have automatic cuts after the election. the bush tax cuts are going to go away after the election. it just doesn't taste good to a lot of people.

>> i tell you what, like i said before the president was there. you talk about who is willing to make big cuts. and the president already made a huge cut to medicare. half a trillion dollars. something that republicans demonized on the campaign trail all throughout 2010. this time around, democrats are willing to make cuts all across the board but they wanted to have a real conversation about it and find a way to do it in a way that made sense. as we all concede, none of this looks good to anybody out there in america. >> i think that's right. people are looking to washington for answers. they're looking for solutions and looking for trajectory in the right direction. and they're not getting it. i think the institutions will be judged harshly in congress. the president has had bully pulpit. this has been a bipartisan criticism. even michael bloomberg said the president has to step in. should have stepped in. and done a better job, taken greater steps to get something done and he didn't. >> i fresh that, but michael bloomberg is a busy guy about i know he has a lot of things going on up there in new york city. maybe he doesn't know that republicans ask that the president not participate in the talks because it would politicize it too much. as the point was made, mitt romney wasn't providing any leadership either. pushing republicans to the table. >> before we go, speaking of mitt romney, newt gingrich is now number one. what do you think?

>> a lot of folks have dpon up and gone down. one of the things, when you ask republicans who is going to win, they say romney. that's in large part because he's been the most vocal and has the best message on the economy, which is the number one issue. he has a lot more growth here in the next six weeks closer to iowa and new hampshire. >> i think that's something you fwoej agree on, he'll probably be the nominee. although, bill you've been preparing for him to be the nominee. you'd prefer someone else. >> hoping and wishing. >> very different reasons. all right. >> process of elimination, eventually comes to an end at some point. >> good to see both of you in person. actor hugh grant went after british newspapers during his testimony today that went on in britain before a government-backed inquiry into press ethics. the probe was launched after rupert murdoch's tabloid shut down this summer. the reason was because it was revealed that reporters were hacking into people's cell phones. it's a vile act. we would never do it. seriously. teenage murder victim and

british soldiers have been victims of the hacks. there were a lot of terrible stories. grant said they've been allowed to get away with intimidation and bullying. now is the time to stand up and put an end to it. >> you see them glamorizing themselves as, well, we might be a bit naughty, but we get the story. when the story has been obtained by hacking the phone of a murdered school girl or the family of a soldier killed in afghanistan, i don't find that lovable and naughty. i find that cowardly and bullying and shocking. >> very well said. grant also said he believed he was the victim of phone hacking accusing the mail, which is a non-rupert murdoch paper, of writing stories about his girlfriend at the time. his accusation, why didn't the scope of the hacking scandal which had mostly involved murdock papers. out front next, jerry sandusky the coach at the center of the penn state scandal,

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protests? >> reporter: erin, this is the worst violence egypt has seen since the uprising nine months ago that overthrew former president hosni mubarak. at least 24 people killed in the last three days. the civilian government has submitted its resignation to the ruling military council. and all of this has put into peril the first round of parliamentary elections scheduled to take place next monday. >> thank you very much, ivan. now to syria. government crackdown an civilians -- the president there warning intervention against his country would lead to dire repercussions. what does he mean? >> arwa damon is following the story from beirut. can international pressure on

the government work or not? >> erin, it would be difficult. not only does the regime still have the support of russia, but also of china which would make it incredibly difficult if not impossible to pass any u.n. resolution. the government also has a strong ally in a regional powerhouse, and that is iran. while some are saying that the syrian regime is feeling the impact of various sanctions imposed by the u.s. and by europe, others say that the syrian government is behaving as if it believes it still has the upper hand. erin? >> arwa, thank you. another investigation has been launched into the handling of the child sex abuse allegations at penn state. one of the alleged victims has been forced to switch schools after being bullying and teased. the man at the center, jerry

sandusky who has been charged with sexually abusing eight boys has been seen around town acting as normal. we have sarah there at penn state. sara, i want to ask you about that. first of all, what can you tell us about victim number one's decision to switch schools and how he was being treated and whether it was linked to this case? >> erin, it was link today this case. basically, students at that school weren't getting any education from teachers and from staff and were pockets of immaturity at the school were lashing out against victim one. calling him names, derogatory names related to the case and

blaming him and bullying him because of the firing of joe paterno. apparently it got so bad that his mother decided that not even halfway through his senior year, she was going to pull him out of school, put him into a different school, somewhere where they were going to have some education for students on what to do if you encounter a victim and how to move forward from this. >> last week we heard his mother say that, you know, she expressed great frustration with the fact that her son has to remain in hiding, while jerry sandusky is walking around as he pleases. what can you tell us? >> reporter: we talked to his neighbors last week, and some of

them said that because jerry sandusky is free, they're living in a kind of jail. because there's a lot of -- it's a very private road that jerry sandusky lives on, it's filled with media, gawkers, who are trying to get a glimpse of this house, where these allegations are said to have happened. it's become a zoo. you go down that road. there's a road closed sign, and there's all these unmarked cars circling. they can't stop, and it's caused this -- it's kind of a situation where the neighbors are afraid to come out of their house, they don't really want to look at that house, because they don't want to be constantly reminded of what's going on. it's caused a lot of heartache for them. >> sara, thank you very much. we appreciate it. now, we want to go to more

on the super committee, senator john kerry joins us now on the phone. joining us tonight. senator kerry, thank you so much for being with us. i appreciate it, thank you for calling in. we've been so very frustrated with the super committee, and so many in america are, can you tell us, when push came to shove at the last moment today, what happened or didn't happen? >> well, what didn't happen is, the job didn't get done for the united states of america. because what was a deficit reduction committee became a tax cutting committee. and we got totally hung up by people who were insisting that not only could they not raise any additional revenue from the wealthiest people in the world, but they wanted to give them an additional tax cut. this is insanity, and what we couldn't get past them was their resistance to doing anything -- we had $1.3 trillion in cuts on the table. we put serious things on the table that we were very, very -- it was very difficult for us. i had thousands of people demonstrate against me for the things we put on there. we also put 1.3 trillion of additional revenue. they said no. that's too much. and then it turned out that a trillion was too much. 900 was too much. 600 was too much. 250 was too much. we wound up not being able to get this because they wanted to know that the tax cut for the wealthiest people in the country was going to be made permanent, protected. and we just couldn't do that in good conscience. you can't ask some senior citizen living on a fixed income or some kid on medicaid or -- you can't ask them to be paying more, when the wealthiest people in the country are going to get a tax cut. it's unconscionable. >> you sound extremely angry, would you say everyone felt that angry? >> i think people are upset. i think everyone in the country is upset. they're looking at congress and saying, why can't these guys get

something done. but it's not enough for people just to say, oh, it's broken. you have to ask, okay, why? what is the matter that it is broken? i don't think it's broken when a lot of people are putting up major cutting.

we just cut $917 billion, almost a trillion dollars of cutting a few months ago. we didn't get revenue in that. there were no additional taxes. so at some point you have to have a fair balance in how you're governing our country. every major group before us, the simpson-bowles commission, the gang of six which includes sitting republican senators. all agreed you need about $2 trillion of revenue. we were just looking for one, let alone a fraction of that. and we couldn't get it, because the republican party wants to guarantee that the wealthiest people in the country are going to get yet another tax cut.

>> i'm trying to understand, because i know a lot of the super committee members have been coming on this show. and some of the republicans had said, look, we're okay with a revenue increase, and we recognize in exchange for what we want, closing loopholes, we are going to end up with -- they wanted a lower tax rate with that. but they said very explicitly, that some of the wealthiest americans would pay more in taxes when done with this committee than before. it seemed like they were willing to compromise.

were they not even willing to do that? >> they did talk about loophole closing and they wanted that in tax reform, and there would have been loophole closing in tax reform. they were unwilling if the total amount that would have been raised from that tax redporm. they were unwilling to do anything -- we call it static revenue. it's the basic revenue that the congressional budget office can measure. they wanted that revenue to be measured by growth in the economy. not by the fact that people were going to pay more at the higher level. you can't eastern measure that revenue. it would not have been the legal way for us to get credit for reducing the deficit. it's easy to come on your show and say, we want to close the loophole s, we want to have tax reform. we all want tax reform. we offered them today expedited tax reform by next december. they could have had it if they would just put the tax cut for the wealthy aside and let it be

decided in that process. but, no, they want it decided up front. >> doesn't it have to be taxes for everyone? when you look at the cbo numbers, you raise taxes on people who make 250,000, you get 60,000 more in revenue. doesn't it have to be on a whole lot of people, not just doing what is politically easy, which is doing it on the wealthy? >> well, you get more revenue faster, but at this moment in our economy, with the recession, and the other problems we have, i don't think you want to do that to the 98% of the americans who have not seen their income growing rapidly over these last years. we just had a study that came out that showed that the top 1% saw their income go up 275%, while the bottom 20% of america saw an 18% increase in 20 years. who are you going to help here? and who are you going to not. it seems to me if people saw their income go up 275%, they ought to be able to help. that's not what the republicans wanted to do. they wants to give a tax cut to that wealthiest top%. and everyone else would pay more in their medicare, medicaid, and their health and education and student loans, you name it. that's just not a fair distribution. what we want is shared sacrifice. a shared effort by americans to all be part of the solution. >> okay. well, senator kerry, thank you so much for calling into the show tonight. appreciate it. >> appreciate, thank you. >> that was senator john kerry as we said from massachusetts. he saw the top of our program and decided to call in and give us his side of the tail as to

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