compromise on the other end and have some kind of spending reduction. not in the major stuff, not in the most crucial stuff, but we have to make cuts and take losses >> do you think the republicans, steven moore, will be able to agree to something, anything that will allow them to keep their pledges not to raise taxes? that's going to be the political problem for republicans. >> christine, by the way, it is very appropriate you're addredr in red for this discussion. i think the republicans when i talk to them and interviewed the ways and means committee chairman that writes the tax laws in the house and says, look, we're willing to raise revenues, we just want to do it in a way that fixes the tax system in a broad based way and one just slight correction on what you saw earlier, christine, all of of these government agencies will take pretty deep cuts under the sequester and remember one of the problems with sequester is what we all know, the big problem with the budget is these entitlement programs and the welfare program, social security, medicare. >> they're left out? >> they don't get a dime of

cuts. >> and appropriately so, stephen. we have to think about the social safety net. we have to think about the long-term consequences of cutting program that is protect the most vulnerable citizens. we pay now, we pay later. >> also, mark, we have to think about the long-term consequences of not living within our means, one other big problem we have. if you don't go over the fiscal cliff you still have to have a congress that's not good as compromising figure on out to have to deficit reduction and debt control. >> and you would think something like that would create such anxiety in people they would come to a compromise. >> they can't. why? >> everyone is digging their heels in and know if they wait long enough they will probably win. i think that's what the republican strategy has been. >> the other issue, this delay, at some point they probably will reach a compromise. the question of when is that going to happen, when i talk to people on the hill they say it is going to happen after the election which is some time late november or december. what that means, christine, think about it. this is a personal finance show. it means people aren't going to know what their tax bill will be

next year, investors and businesses won't know what the tax code is going to look like. that's just not a very good way to run a country. >> and there are laws for how much time you have to give people to notice them and give them notice you will lay them off and that means right around election time companies will have to be telling people whether they will be laying them off and how many of them. i want to talk about defense in particular. it is taking a disproportionate amount of cuts. i think it is 20% of the budget and taking half of these cuts. the u.s. military also spends as much as the next 14 countries combined. we have a which rt that shows us. tell me where we can afford this military. >> it is a good question. first of all, i do think that the military, the defense budget can take cuts just like i think every agency is going to have to and by the way we'll have to make cuts in the welfare and medicaid and medicare programs or we'll never make any progress. when even the president's own national security advisers and defense secretaries say that this is dangerous, it could be

catastrophic for a national security, that worries me. so, yeah, we can make cuts. to make such a disproportionate amount of those cuts that have to come on the defense budget, i don't think it is very wise. >> i think much of it has to do with political calculus. it is never politically wise or popular to say you're cutting defense spending even when there is fat and waste everywhere. >> yeah, there is. there is a lot of waste. what leon panetta is saying, we can get rid of a lot of the waste but we'll have to cut vital missions. we'll are to cut aid for the troops and things like that. it is still a dangerous world. that's all i am saying. >> the point is this is supposed to be done with thought, not because they couldn't get their job done last year and this was the -- this is the sort -- >> it is so frustrating. >> you're not going anywhere. coming up, both presidential candidates say they're the best choice for the middle class. how many americans are really in the middle class? the number might surprise you next on the bottom line. jñ

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oh yeah? well i'm watching you, watching him. [ male announcer ] try the e-trade 360 investing dashboard. are you in the middle class? chances are you think you are. 95% of americans consider themselves middle class according to a "washington post" abc poll. by definition not everyone can be in the middle. most people clearly identify with middle class values, but let's take a look at the numbers. what does it take to be middle class in america? the white house chief economist defines middle class as householding earning 25 to $75,000 a year. the president calls families earning up to $250,000 middle

class. the median household income, right in the middle, $49,455. feeling middle class really depends on where you live. a family with a median income right near in manhattan, kansas, would need $115,000 to maintain that same standard in manhattan, new york. in ann arbor, michigan, they need to have 52,000, almost $53,000 and in seattle they need to earn more than $61,000 a year to feel the middle, middle class. if everyone feels like they're in the middle, knots surprise president obama has built his campaign around defending the middle class. defending it from whom? republican senator jon kyl says president obama should stop talking about class because it turns middle income americans against the wealthy. the wealthy who he calls the michael jordan's of the middle class. >> i don't think there is anything called middle class values. that are different from the

values of other people in this country. tell me what's different about the values of someone who the president identifies as middle class? >> now, mark, senator kyl says his success was good for the whole team. are the wealthy the success of theful middle class or different about their values. >> the values aren't different. let's use the p word, poor people. poor people also have good value. we're scared to say it in the election cycle. everyone has good values. the rich aren't doing it any better than anyone else. they have had a set of advantages and also work hard and have had a set of experiences we to want replicate. the problem is whenever you trim taxes just for the wealthy they will continue to look like michael jordan where the middle class won't. >> i heard conservatives say this president and his policies want to give people, all people, a middle class life without necessarily having them earn it. >> yes. >> expanding the safety net. do you buy that? >> i don't think it is about

people not earning it. people earn it every day. they earn hard for less money, taxes are going up, insurance rates are going up and all the challenges are building up and everyone works hard and needs it. what we're trying to do is create a space for people to work hard and have it rewarded. that's all. >> stephen moore, depending who you talk to wealthy people are the michael jordan's of the economy or have a bad image problem, maybe both. >> i say the only people you can legally discriminate against in the country anymore is rich people. you know, i love that statistic that 95% of americans think they're in the middle class. i think donald trump thinks he is middle class guy these days. i disagree a little bit with what you guys were saying earlier. i think most people who are rich get there the old-fashioned way. they do work really hard. they take risks. they do all the kinds of things we want people to do. they work long hours. they put their sweat equity in their businesses and goes back to a little bit about what barack obama said that you didn't build that business. these are people who have done all the right things. >> what about inheriting stuff?

>> you know what, there was a great book out ten years ago or something like that about the millionaire next door and found that the vast majority of people with million dollar assets did not inherit their wealth. they made it the old-fashioned way and worked for it and i think another big issue that is brewing with the middle class is the fact that we really have expanded the welfare states so dramatically over the last few years. >> you buy this idea the middle class is not as big as it thinks it is and we have social programs that allow people to feel middle class even though they aren't. >> i think the welfare state is out of control when you have 45 million people on food stamps, when you have the president trying to gut the work for welfare requirement, when you have 99 weeks of unemployment. >> that's the way to stimulate the economy, by giving out more welfare benefits. >> when you say welfare, i am assuming welfare for the poor and the working poor. the reality is that we have a welfare state that benefitted corporate america forever. >> i agree with that.

>> somehow welfare talk always ends up being about poor people. >> i am for getting rid of all of those unearned benefits. we should get rid of the corporate welfare, too. >> you said something really important. you said unearned benefits. my point is if people work every day in a democracy and a capitalist democracy and the month is lasting longer than the money and can't afford education, housing and health care, it isn't unearned. we need to support them because it want supports all of us. >> this is a backlash against the middle class. people who are working, 40, 50, 60 hours a week to feed the family and make ends meet and getting angry there are so many americans that aren't working and that aren't doing their part and that they're getting these benefits >> i thought we found middle ground and then you both just separated back to your corners. >> no middle fwround, like the middle class. >> i know, i know. >> i am in the middle class. >> so am i. >> it is middle class values, guys. i feel like most of the country

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the housing market has hit bottom. that's the bold call from real estate website zillo. they found home values are up for the first time in five years after losing a quarter of their value, the first little signs of bottoming there. i want to take a look at where they're calling the bottom, anything green on this map is where they said the bottom has already been hit. look here, california, look at arizona, big, big gains for phoenix and colorado and look at the metropolitan areas and down here in florida and up the east coast. take a look at the red.

those are the areas zillo says there is not a bottom now and there won't be a bottom in the next 12 months. they say all real estate like politics is local and you can see it is different fedependingn where you live. robert schiller is founder of the s&p home price index that saw the first uptick in seven months in april. bob, have we finally hit the bottom? i know a bottom can be a big, long dangerous place to be. >> well, christine, the people have been asking me that for some years now. there has always been a feeling maybe we're at a bottom. this looks a little better. still, the report that you referred to made it sound more dramatic news than we really have. they talked about a u-shaped recovery in some cities and u-shape suggests to me like we're going all the way back up. i don't think so. >> you even worry about more

declines and more home think the home price declines in some places. >> you have to remember that we had some big price increases in some cities between 2009 and 2010. san francisco went up 20%. and then it fell again. so, these things -- also, we're entering the summer season, which is normally strong. so, it's a little bit ambiguous. i think zillow might be right, we might be heading for substantial but not as big as the last time, price increases. on the other hand, it might go down. and nobody knows. that's the thing to recognize, there's no expert -- >> nobody knows. >> -- who knows the answer. >> and you're absolutely right. a lot of this is driven by what people are doing in their lives, and i feel like there are two housing markets. there's one housing market that's opportunity for people with savings, there's another housing market. >> people are moving more toward renting, and that might be a new trend, and if that's a new

trend, that speaks poorly for the home prices in the suburbs, i think, or the detached single-family home. and a lot of the new cotruction lately has been on multifamilies. there's a sense now that we're becoming more of a renting nation. so, it's positive for the rental district downtown, negative for the suburbs. >> negative for the suburbs. we need a real jobs recovery to come with a real housing recovery, too. you need those two things, i think, really together. the jobs picture still isn't that great. bob shiller, really nice to see you. thanks for coming by. have a great weekend. >> my pleasure, christine. yahoo's new ceo has shattered the glass ceiling, but some women worry she's also shattering their work-life balance. why marissa mayer's climb to the top may not be such a good day for working women. [ ding ] oh, that's helpful! well, our company does that, too. actually, we invented that.

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marissa mayer is really smart, really rich and has one of the toughest jobs in corporate america, turning around yahoo. but her rise to the corporate suite has been overshadowed by one thing, she's six months pregnant and plans to take just a few weeks of maternity leave while working throughout. at this yoga class for pregnant women, the conversation turned from prenatal to post natal, now that new yahoo ceo marissa mayer says she'll only take a few weeks maternity leave. >> there's been a big backlash. women are saying, wait, is this what we got into it, to have it all? if you want to be at the very top, you know, your family has to sacrifice. >> i think it's unfortunate, because what is the point of having a child if you're only going to see them for two weeks and then send them off to a nanny? >> squeeze your el yoewz in. >> reporter: yoga studio owner deb flashenberg says she regrets going back to work so soon after her son was born last year. >> i wish i had that time.

>> you regret it. >> i do. i wish i was a little more separate. >> concerned, will mayer's decision derail gains made by mothers? >> is she the new role model or is she ruining it for the rest of us who want a little more time and more flexibility. >> i hope she's not the role model for all of us. >> reporter: but she has supporters. joan walsh from salon.com wrote "not everyone has to approach the birth of a child as a life-changing disruption." another tech titan, facebook's number two, sheryl sandberg, says she believes in flexibility. >> i walk out of this office every day at 5:30, so i'm home for dinner with my kids at 6:00. >> reporter: the u.s. requires many companies to provide 12 weeks of unpaid leave for working mothers. compare that to some other countries. germany afords 14 weeks, canada 50 weeks, sweden 16 months, and that's paid maternity leave. >> it's like we're with countries like saudi arabia and syria. it's really bad. >> reporter: with 16% of u.s. companies offering paid

maternity leave, many women, unlike mayer, return to work sooner than they may want. >> she's an exceptional woman, again, with unbelievable opportunities and resources at her disposal. that's not the reality of most working women who are working-class, middle-class, especially in this economy. >> vacan you have it all? >> you can have it all, but you can't have it perfect. >> we wanted to know how mayer feels about being the most talked about pregnant woman in america. a yahoo spokesperson says she will have no comment because she is focusing inward on the company. here with me, author and journalist gail lemon. gail, why are women so obsessed with how long marissa mayer's going to be out with maternity leave? >> i think people are frightened that this would be the new normal for maternity leave, and i think she's not trying to create that. my sense is, just from talking to people at yahoo, even, is that what she's trying to do is is be a leader who is taking over a public company at a really difficult time, and i think we want more women like that, right? we spend so much time talking about how few women there are at

the top, and here is somebody who's trying to make it work in a very personal way, and we have a really public discussion because everyone is uncomfortable with the range of choices they have. >> and i think what some women are saying is that at a time when they're trying to have more choices. >> yes. >> and trying to have a corporate structure that recognizes that, hey, women can be at the top, so maybe we should be a little more, you know, in tune with what women need and then you have someone who rises to the top, who some women say is just like a man -- she has the child and it doesn't change her work behavior. >> i think she's taking a couple of weeks -- >> a couple of weeks. >> trying to figure out how it works. right, absolutely, but no one knows how it's going to work, including her, right? i mean, the baby's not here. but i think what the point is, is that she's trying to make leadership work alongside a tumultuous time at a place where she's taking over. >> right. is this an elite conversation because most women are taking the two-week maternity leave

because they have to. they have to go back to a job with no protections at all, an hourly job. maybe this can be used to focus attention on that. >> that's what's important. she's not making a public policy statement. the discussion we should be having is what you said, 16% companies offer paid maternity leave and 47% of the workforce is female. those numbers don't square. so, there's this pregnancy penalty, and a lot of people should be talking about the single moms who are working as waitresses who, if they don't work, there's no rent being paid. >> right. >> and we don't talk about that. and i think if we used this conversation as a jumping off point for that, i think it would be terrific. >> i am so sprurprised how the conversation keeps going. i thought it would wind up after a week and people are still talking about it. gayle, thank you for your perspective. >> thank you. >> so, does marissa mayer's decision to take a two-week maternity leave make her a role model for other women or do you think she's ruining work-life balance? i want to know what you think. our handle is @cnnbottomline. i'm @christineromans.

now back to "cnn saturday" for the latest news headlines. have a great weekend. security is in shambles, isn't it? >> i cannot disagree with you. >> reporter: an embarrassing scandal for the london games. how the firm tasked with protecting the olympics failed and what new dangers may be lurking. this morning, we put olympic security in focus. and later, new details on the aurora shooting suspect. we'll tell you what cnn has learned about his mental state before the shooting. threats from paris, pleas from prince, the jackson clan making headlines again, but this time it's a family feud with millions at stake. good morning, everyone. i'm randi kaye.

it is 10:00 on the east coast, 7:00 a.m. out west. thanks so much for starting your day with us. we start in london, where the olympic games are under way right now. a 23-year-old chinese woman nicknamed shooting beauty competing in the 10-meter air rifle competition has won the first gold medal in london. meantime, u.s. swimmer michael phelps will compete against ryan lochte in the 400 individual medley tonight, but phelps narrowly qualified after a slow finish this morning. but it was queen elizabeth who almost certainly stole the show during last night's opening ceremony. take a look. >> good evening. >> good evening. ♪ >> the creative mind behind the ceremony, danny boyle, used his movie magic to show the queen teaming up with james bond actor daniel craig. in the scene, stunt doubles, not actually the queen, jumped