[cheers and applause] >> jon: that's our show. join us tomorrow at 11:00. here it is your moment of zen. >> folks will realize this is just the first step in a captioning sponsored by comedy central captioned by media access group at wgbh access.wgbh.org clubhouses have resorted to allowing girls. [laughter] and my guest, al hunt, is a 42-year veteran of washington journalism. i'll ask him if he thinks brangelina has a baby bump.?;ñ [laughter] a woman was arrested turning tricks out of a donut shop -- the perfect place to avoid detection by the cops.

[laughter] this is "the colbert report." captioning sponsored by comedy central ( theme song playing ) ( applause ) [cheers and applause] [cheers and applause] >> stephen: thank you very much. [crowd chanting stephen repeatedly] [cheers and applause] thanks so much, everybody. [cheers and applause] welcome to the report. thank you for joining us. folks, the 2012 election is upon us, and i love a good horse race. i like to go with the candidate

who looks like he's been gelded. [laughter] that's why i'm saddling up newt gingrich. i really think he's the guy. and though some of the members of the lame-scream-meania -- [laughter] -- have counted him out, newt knows he's got something the other candidates don't. saying, quote: "i have six times as many twitter followers as all the other candidates combined." [laughter] yes, newt has won the coveted voting bloc of bored people at work. newt's got 1.3 million followers, while bachmann's has only 66,000, mitt romney has÷fh÷ 63,000, and ron paul has "what's a twitter? is this how i ebay?" [laughter] forget polls, this is the most important indicator of an electable president.

that's why before newt got into the race, i was throwing my weight behind president kutcher. [laughter] he already knows how to please our nation's seniors. many[laughter] [laughter] looking good. [laughter] but folks, scandal is rocking newt's tweet-o-verse. >> a former staffer claims newt gingrich paid an agency to artificially pump up his twitter followers to show more than a million followers.ñr >> stephen: what? [laughter] his twitter followers aren't real? are you telling me today's youth don't fancy a 68-year-old, semi-employed, former politician who tweets such gems as "had great lunch at mabe's pizza." [laughter] and "stopped in for lunch at the pizza shack." [laughter] he's speaking their language, man!

kids love hearin' about the 'grich eatin' 'za. [laughter] the former staffer alleges that 80% of newt's followers are inactive or dummy accounts. oh come on. are you trying to tell me that devoted newt follower "at 41113846806103" is not a living, breathing person who just happens to have no photo, no profile and has never tweeted? [laughter] now, newt insists his twitter followers are legit, and i have no reason to doubt the word of a man who cheated on two wives. [laughter] but let's say he did hire a firm to create his twitter followers. well, i say, making up fake people could be the key to keeping newt's campaign alive. he should make up some fake staffers to replace the real ones who quit. [laughter] and how about some fake donors to replace all the ones who've abandoned him? [laughter] make 'em look real rich. give 'em a monocle and a top

hat. [laughter] and while he's at it, he should also create a fake newt gingrich because the current one's not doin' too good. [laughter] nation, today president obama signed the debt ceiling compromise. and america narrowly avoided a catastrophe: giving the democrats anything they want. [laughter] because the only way this bill was two-sided was that the dems had to take it at both ends. [laughter] got that image in the old mind, don't you? got that image right up here. [laughter] just look how this defeat has broken harry reid. >> i have a home in nevada that i haven't seen in months, my pomegranate trees are, i'm told, blossoming and have some pomegranates on them. i have some fig trees and roses and things that i just haven't seen.

[laughter] >> stephen: oh my god. how's obama gonna tell harry reid that he also gave the republicans all his pomegranate trees? [laughter] but now that it's done, all americans are breathing a sigh of relief because it may have been a painful process, but at least the economy is saved! >> the dow today down 265 points on the day. >> stephen:ym what? [laughter] this is what happens when you give the republicans only 98% of what they want. see, the market was afraid that even with a deal, america's credit rating was going to get downgraded by agencies like moody's and standard & poor's. america is currently rated triple-a, which means we're a very safe investment. plus, i believe we get free roadside assistance and discounts at participating hyatts. [laughter] countries less likely to pay back their debt have lower grades.

for example, greece now has such a low grade, it may be held back and forced to repeat the last 3000 years. [laughter] and lowering america's grade is bad news: >> interest rates could rise, and that could mean that you pay more for your mortgage-- >> the cost of buying a car could rise. >> credit card rates rise as well. >> if the us loses that aaa status, it will be much more difficult for the us to restore growth. so it's unambiguously bad. >> stephen: so these unelected elites get to wave their wall street wand and tank the economy? why? they're not special and rich. they're standard and poor! [laughter] no wonder they're so moody! [cheers and applause] you're welcome. i'll take that one. [cheers and applause]

they are materially harming america. this is nothing more than economic terrorism. and i say we deal with them the way we deal with all terrorists. march marines to their offices, fit them for orange jumpsuits, and whisk them off to gitmo for some enhanced accounting. [laughter] a little number boarding. rough stuff, but it's the only here to tell me other ways we might save our credit rating, please welcome new york times washington bureau chief, david leonhardt. dave, thank you so much for coming. good to see you. [cheers and applause] does it really matter if we have a triple a rating? can't we let the chinese kids get the good grades and we're copy off their financial report? >> it probably matters. >> stephen: why does it

matter? >> not so much because of rating but because the rating reflects a reality. we have a serious deficit. >> stephen: he we just made the hard cuts. >> we didn't make the hard cuts. >> stephen: we made the hard choice to make the hard cuts later. we didn't even do that. that is a small part about the budget. they are not about medicare which is by far the dominant source of the deficit. they are not about new tax revenue which is one way to deal wit. >> taxes are job killers. do you understand that at the tpho *rbgt? >> we don't know whether they are job killers. we were herd that when bill clinton raised taxes. the 1990's turned out to be an okay decade. >> stephen: could have been better if there weren't raised taxes. >> we don't know. >> stephen: let's try not raising taxes and see what happens. >> unless we make big cuts to medicare and social security we get downgraded? >> stephen: is there any way

to avoid getting downgraded. moodies reaffirmed the aaa rating but said we had a negative outlook. >> the rating agencies wanted to see d.l. 4 trillion in cuts. >> stephen: we did $1zv trillion. how much less is that than four? >> three. >> stephen: that's a fair amount. >> yeah. [laughter] >> stephen: what are other countries faced with with this crisis doing right now? who has been downgraded? >> most of the rich world if not all of the rich world which would we us, europe and japan is dealing with some version of this. we have an aging population. fast growing health care costs. they have much lower health care costs than we do. we are not alone in this problem. we have strengths those other countries don't. >> stephen: we have weapons of war. >> weapons of war. >> stephen: if anybody comes to our money we'll drop another

aaa on them. >> we're the country everybody wants to move to. if our politic system continues to be this paralyze and dysfunctional there's real reason to worry about whether we're going to solve this problem. >> stephen: did the tea partyers win this one? >> yes. >> stephen: did they reach the goal of throwing the united states government into boston harbor. >> they didn't reach the ultimate goal but they won this round. the big issue now is there's no way we solve our deficit without bringing down health costs, dealing with social security and probably raising taxes unless we're going to make radical cuts to the first two. this doesn't doesn't do any of that. >> stephen: does the supercongress fix any of that? instead of 535 people trying to come to an agreement it's 12 people in a closed room,. >> right. >> stephen: coming up with an agreement. with that help? >> sometimes closed rooms work because they are not subject to all kinds of screaming and

shouting in public. most of time they don't. >> stephen: what about a superduper congress with six people with an ubercongress above them and then finally just harry reid and mcconnell with knives. >>ç unless tigy are going to ct medicare, cut social security or raise taxes none of it will work. >> stephen: will you please come back if the united states continues to exist? >> i will. >> stephen: thank you so much.

[cheers and applause] >> stephen: thank you very much welcome back. folks, when it comes to losing money in this recession, no one is immune. and this rough economy's even begun to affect our kids. >> check out what a new survey by visa shows. this year the tooth fairy is leaving an average of $2.60 per tooth. that's a 40-cent decrease from last year. [adding] >> stephen: that means the average kid's mouth portfolio will max out at $52! [laughter] just one more reason i've been

urging my kids to diversify into tusks. [laughter] now, it's tempting to blame the tooth fairy. after all, she's the face of the industry. but keep in mind, she's just a broker -- a middle-fairy on the tooth supply chain. what she pays her suppliers is determined by macro-tooth-enomic pressures and bi-cuspid speculators.my but we know baby teeth, like gold, will never be worth nothing -- because baby teeth have so many practical applications. for instance, they are collected and ground up to make fairy dust. also, a major ingredient in meth. [laughter] and the tooth market tanking couldn't come at a worse time for the kid economy. we've all seen the labor department's dismal outlook for summer chores. and early reports indicate this could be a record-low year for quarters found behind ears. but don't despair, kids. this

soft tooth market could work to your advantage if you play it right. to get the price of teeth back up we need to reduce inventory. that's right, kids: stop losing teeth. [laughter] that means no taffy, no caramel apples, and under no circumstances should you let your big sister tie a string to your tooth then tie the other end to the back of her motorcycle and drive off! [audience reacts] it's austerity time! now, before you act on my financial advice, i am obligated to disclose that i invested everything in baby teeth. [laughter] okay. don't worry, some of these are mine. i thought it was a sure thing. i'd just sock them away, let the tooth market rise over time, and once i'm 65, put them all under my pillow and wake up the next morning with $20 million. [laughter] now i am screwed unless my back-up plan works -- planting

these baby teeth in my backyard and grow some babies. i'm pretty sure that's where they come from. [laughter] and those things are worth a fortune on the black market. we'll be right back. [cheers and applause] vo: this is cheryl.

this is her four-year-old computer she doesn't think she needs to update. so to show her what she's missing, we built a pc store in her house. cheryl: oh my gosh! employee: what do you say we go shopping? cheryl: this one's very cool. cheryl: where's the tower for this? employee: everything is right here. cheryl: oh stop! cheryl: okay... alright... employee: flip that screen around. very light-weight! employee: 500gb hard drive. cheryl: i like the dvr thing... i like this one. vo: new pc in the house. cheryl: i'm a pc, and i'm finally up to date.

>> stephen: welcome back, everybody. my guest tonight is the washington executive editor of bloomberg news. we will talk about the debt ceiling. please welcome al hunt. good to see you. [cheers and applause] how is the good lady? >> she's just fine. she said to say hi to you. >> stephen: al, you are a consummate washington insider. you've been a journalist in washington for 42 years. for 35 of those years you wrote for the wall street journal. for the last five years you've been washington executive editor of bloomberg news. you host the political capital with al hunt and make the appearances on the sunday shows, get out there and give your opinions out there. i just learned earlier that we might get downgraded by moodies

and standard & poor's because of way washington does or does not work. i like conflict, but i don't want higher mortgage payments. can washington work again? >> probably not. >> stephen: thank you so much for coming. al hunt, everybody. [cheers and applause] pithy that's what we want. >> it used to work in a different way. itym wasn't that they avoided he fights. tip o'neil and ronald reagan they disagreed totally. >> stephen: they we like bare chest bare knuckled boxing. >> and they were such a voice of yesteryear but they had a 5:00 p.m. rule. they would fight until 5:00 p.m. and they would have a drink together which they would do occasionally. they would fight over budget cuts, fight over wars but they got things done. they got social security reform. they got a tax reform bill through. >> stephen: what did that

stop? that sounds fun. at night you get together and have a couple of pops and plan what you are going to fight about the next day. >> some people were earlier. >> stephen: and then the fights good get g. when did that stop? >> the late 80s and early 90s. you have the 24/7 media. the people in washington have a fund raider. they are in a constant campaign mode. media plays a role, money plays a role. it's a 50/50 country. >>. >> stephen: was it not a 50/ oak country before? >> for most of the 60s it was a predominantly democratic country. a great civil rights act were passed because of the senator. >> stephen: and he freed the slaves. >> that's right. >> stephen: doesn't mat we're what century still the mid

60s. >> i will never forget that story. >> stephen: you broke that one. [laughter] mitch mcconnell said that this has now set the template for the republican behavior when it comes to negotiating with the president. certainly over the debt ceilingç and about about the budget and anything. how did obama keep his pants up now? [laughter] since they handed his ass to him so severely in this negotiation? [laughter] [ applause ] >> probably should have thrown that golf match. i think obama lost. i think you are right about that. i don't agree that republicans won. if they made this grand bar dbaj which -- bargain but republicans could have tried shrink the

government but they needed to reduce social security. there could have been a deal in that. we're right back where we were april 2. we're fighting over the bush tax cuts. this is no different. we're fighting over medicare, the same fights we had before. >> stephen: who do you think is looking strongest in the republican field? romney has tons of cash but bachmann has crazy power. [laughter] i would not underestimate michel e bachmann particularly if governor perry doesn't get in the race. you think she has a chance to win in iowa, the straw poll in a couple of weeks. the nominee has to win either iowa or new hampshire because that's always the case. >> stephen: do you think obama raised expectations too high for people about what he could or could not do. >> did he. he said he would change the culture of washington. it wassen an almost impossible task. >> stephen: do you think he has raised negotiations about

how fast you can cave in negotiations, unfairly? >> namely you ask them what they want and you give it to them. >> i think he has been injured by. 4lqj"brand has been injured by . they've looked to extreme, and too unbalanced. i don't think it helped republicans. i think it's possible this was a lose-lose for both sides. >> stephen: has it helped anybody? it's giving guys like you and me something to talk about. >> mitch mcconnell was helped a little bit because he stayed into the background. >> stephen: he just retreated into his shell. [laughter] al thank you so much. al hunt of bloomberg