you don't have to take politician's word for it. take any economist today who will tell you that within two- three years, there will be a debt crisis in this country. we should fix the amount and a real way and not just tinker around the edges. we should actually fix it so we don't have this big problem which everybody knows is coming. the virtual consensus among economists is that we will have a debt crisis comparable to what greases having today. we want to do something bold that fixes the country and this is that rare opportunity. >> what about the $4 trillion plan that lawmakers have been talking about this week? it does not sound like that would satisfy the criteria? >> we don't know what the $4 trillion is. we hear about that over so many years. we don't know any of the details. that may be part of the cuts and the cap as we go forward.

we think you have to look at this away a normal american family would look at this. cuts in the short term and cuts to make sure we are doing a dump and on this problem and the cap means we go forward and don't exacerbate the problem in coming years and then the real fundamental process requiring the federal government to do what every family has to do and every business has to do, have a balanced budget. we think that makes the most sense. >> does that have to be part of this deal? can it be done as a separate vote later on? >> good question, you have to do it as a separate vote but it would have to pass before -- passing a debt ceiling increase would be contingent upon a

budget resolution. what is wrong with passing a balanced budget amendment that 90% of americans agree with? what is wrong with letting the states decide? the constitution is set up which free -- which it is -- which does not require the president's signature. a supermajority vote is required and it goes directly to the states. 38 states have to ratify it. can you imagine what would take place across this country if we sent it to the states? this would become the issue. tea party groups and citizens out there would ask their state representatives or state senator where they stand. i think we could actually get it done and make a part of the constitution. >> do you think we should get it done before august 6?

>> it have to use -- you have to try to get it done now. this is one of those moments where we have a chance to dramatically change the gravity of the situation is so big and so clear to the american people that you have to take this opportunity. i think we are not doing the job the people elected us to do last year if we don't to everything we possibly can to get this done in the context of this debt ceiling debate. >> democrats said they will not agree to any cuts to social security and medicare and they have said any cost savings that come about as part of this process should be fed back into those programs as opposed to being used to pay down the debt. are those non-starters for you? >> but just ignores the facts. we have run the highest deficits in years.

we have a $14 trillion national debt. when your debt to gdp ratio is 1:1, you cannot sustain that. we are currently paying $200 billion per year in interest to service that huge debt. tell me something about interest rates. they cannot get any lower. they will go up. sometime within the next decade, we will be paying more in interest in currently spend on national defense. when you are a country spending more to service the debt then you are in defending the country, that as a model that cannot be sustained. it has to change. the idea that we cannot fundamentally change entitlement programs and pay down the debt is ridiculous. it ignores mathematics and the

time value of money and it ignores the fact for it for them to say that is irresponsible. >> are you concerned about the political fall out for your party if you are saying that medicare, medicaid and social security needs to be looked at? >> i am much more concerned about the fiscal health of the nation. if we don't change things, we will have a debt crisis and we will go broke. politically speaking, the better -- the bigger political concern is if we don't do something to fix the budget crisis -- if we don't do something -- if you just passed the debts and increase and tinker around the edges, there are political ramifications for doing that as well. the focus has to be on what is best for the nation, what is best for the country. i know that means not just kicking the can down the road. means fundamentally changing things in washington. >> does it mean tax increases in the way you close loopholes

and tax subsidies for corporations? >> there is no way the republican party will be in favor of raising taxes. that is the wrong approach to take. even the president understood this last december when he decided not to raise taxes. he knew it was the wrong thing to do when we are trying to get the economy growing and trying to get a job creation and economic activity. the last thing you want to do is bird in small business owners and families with additional taxes. it is a non-starter for us and we think it is bad economics and bad for job creation. >> what a bit -- what about a plan that would close loopholes to lower rates? >> you have to look at that but we will not raise taxes. i will not support a tax increase and members will not. our leadership in the republican conference -- speaker john boehner and leader eric cantor have been very clear

about not raising taxes. >> are they selling a plan that includes elements that people might not like? many folks were disappointed with the outcome. >> this is a much bigger issue for the country. frankly, members understand that politically speaking, this is a bigger issue as well. we have been very encouraged by what both speaker john boehner and leader eric cantor have been saying regarding the tax issue. speaker john boehner gave a speech eight weeks ago now from wall street where he talked about having big cuts as to move forward. the cut park and the cap part is good. as i have indicated, to support this issue, the fundamental game changer is the balanced budget. i think it is important that

speaker john boehner and majority leader eric cantor can talk about the changes. >> is there any where you were willing to compromise? >> we are on the side of the american people. if you ask the american people if we should cut spending, many people would say yes. does it make sense to cap spending? historically, this nation has been -- been between 16%-18%. should we go back in that range? yes. is it appropriate to have a balanced budget requirement will into law? that is like every local government has to do. my guess is that america will say yes to that. we are on the side of the common sense and the american people. we are doing what we told the voters we told them we would do when they sent us here.

>> the democrats would say they are on the side of the american people. the american people don't want you to cut social security and medicare. >> if you look at what happened in the last election, the american people send more republicans here to make the kind of changes i am talking about and that is what we are supposed to do. it is a common sense to do and i think that will save the country from financial collapse. >> do you view the ethanol tax credits and eliminating tax breaks for oil company, is that on the table? >> yes. raising taxes is the bottom line. we will be against raising taxes. if there is a broad tax reform package, that needs to happen for economic growth.

every american understands that. i am not going to be for raising taxes. we're not going to support that. the big reform package that reforms the entire tax code and lowers rates or doesn't raise rates, that is something we can entertain. i said to my democratic colleagues, if someone can show me how raising taxes will lower gas prices -- it makes the sense to me. >> is a enough for you and the members to agree to eliminate the tax breaks we're talking about it in exchange for a deal down the road? >> that is what the american people despise. tax increases now and there will be cuts in the future, raise the debt ceiling $4 trillion over the next few months and

will cut two $2 trillion of the next few months -- you gotta be kidding me. this is lucia and charlie brown and the football. there is no way we'll go for this kind of deal. >> you have strong concerns about tax increases. is there one tax loophole closing that you would agree with? >> in the context of this debate, you cannot raise taxes. if we're going to do a tax reform package that will be tax neutral or lower that is one thing. i'm all for doing that down the road. in the context of this debate, there is no way we will be for raising taxes. >> have you made that clear to leadership? >> you're not the first reporter to ask. >> how many votes do have in your corner on that? >> that 33 members to sign the pledge out of 175 that says we

will not support the debt ceiling unless there is cuts, caps, and a balanced budget. more and more members are signing on to the pledge. it was developed by outside conservative groups. more and more candidates and members of congress are joining each day. all but the two republican presidential candidates have signed the pledge. the cut, cap, balance.com is the website. >> to you think you have left the door open to some of these loopholes eliminations as a way to find a deal with democrats? >> i have complemented the speaker on this. i told our leadership that i would like to see them say the same thing about the balanced

budget amendment that they say about taxes. that have been clear that if you want a debt ceiling agreement, you cannot have tax increases. the next day and i would like to hear is that if he won a debt ceiling increase, you have to have a balanced budget. the budget will be up for a vote in two weeks. it is all but getting the 292 votes we need in the house to pass a balanced budget. >> where are you at? >> my guess is that we have 240 republicans who will both very can get the democrats to come on? >> leader eric cantor said he thinks the lead ceded political grounds to democrats because they would not supported in the senate. is that it productive statement? >> we are in the majority in the house.

in the end, this is ultimately, if the president of united states understands that for republicans to support the debt ceiling increase, we need a balanced budget amendment to the constitution, the president of united states can weigh in with the party and say he needs them to vote for something that makes sense to american so we can raise the debt ceiling. in the end, it is likely to require president obama saying to members of the house and the senate, democratic members, supports the balanced budget amendment because this is the way we can get a debt ceiling passed. >> you believe that if all sides stick to their guns that the debt ceiling is not raised

and there will be a crisis? >> i would rather have -- the preferred route is to put in place the things that avoid a problem on august 2. and also put us on a path where we avoid a bigger problem coming in two-three years. that is the best route to take. if we're going to just raise the debt ceiling to avoid the first war problem, and not put in place that things that cause the bigger problem, that i would rather deal with whatever crisis is in the bond market now versus just kicking the can down the road knowing we will have a big problem in two-three years. to me, that is the most important. keep your eye on the ball. whether it is david walker

talking 40, is across the country saying that we will have a greek-style debt crisis in the next two-three years if we don't put in place the right kind of things. to me, that is the most important thing. if that means we have to have concerns now, i think it is better to have that now and fix things than it is to keep on doing the same thing and hoping it does not happen. >> do you think we will default? >> the difference between defaulting in not having enough money to meet obligations -- there still will be revenue coming in on august 2 in the treasury. it may require tim geithner to make decisions on who gets paid for spurted i would like to think the administration will s \ - you have to pay the bondholders verse. i assume all of you have some kind of 401k.

local governments have all kind of -- meet bond obligations first and you start going down to social security, our troops, and you make sure that they get paid first. at some point, it may mean that people work and the federal government and bureaucrats who work here have to wait awhile. >> social security payments are made of the third of everybody. the bipartisan policy center did an analysis of august 3 and what happens if the debt ceiling is not raised. we have an income of $12 billion of revenue coming in and $32 billion in committed spending on august 3. $23 billion of that is so security and that assumes you pay the bondholders first. how will you explain to constituents that a bond holder got paid first but they did not get their social carry payments? >> i understand we have social

security payments. some of this plays out on the 15th of the month. it is the day the actual role over the bonds. maybe i have the wrong date. we would have to see exactly when that is. decisions have to be made. never forget the big problem which is the $14 trillion debt and a crisis. that would be tough but i would rather have the difficult situation their purses the really big problem which everybody knows is coming. we have to try to get the plan in place that will fix it long term. we think our plan is the best. >> does your party have the will to face down that reality? >> it is that important to the country. i understand what will happen with so security, remember the history.

tim geithner originally told us back in january saying we have to have this done by the first quarter. then he said we have to have it done by may 16 and now he is saying august 2. you have to keep in context of what the treasury has told us for the last year. all august 2 is the hard data. there is some flexibility in how this will work. the idea that we will default is not an accurate use of the word. there are more obligations the will of revenue for some time in august. >> john banham said on friday that he thought this could have disastrous economic consequences. is he wrong? >> the ideal situation is to avoid any concerns and avoid the big problem coming. the big prom and that is coming is the most important and the american people understand that

we want to avoid both. we need to put in a plan that will address both situations. if we could get a good plan before august 2, i am -- i am for that. but we have to go past that, that is what we need to do. >> we want to talk a little bit of politics. michelle bachmann, what do think of her chances and other folks in the race? is there someone who appeals to you? >> i think we have a lot of good candidates. michelle is a colleague and she is of the same class. she is an individual who can articulate conservative positions very well. congressman mccotter has a unique style.

he has planned speech and cuts right to the chase. one thing i find out there is that i am talking with folks in the fourth district in ohio and across our state back home. the republican side wants somebody who is a credible conservative. we just want somebody who can be president obama. i hear that time and again. we need to have someone who can make sure president obama does not get a second term and that is what republican voters want. >> who has the best chance? >> the one who has the best chance is the one who wins the primary. we don't know who will win. there's always a favorite. sometimes the faber does not win. we will find out -- sometimes the favorite does not win.

we will find out. i like primaries. that is where you find out who is ready for the finals and was ready for the big show and i think it will be a good process for our party to go through. >> michelle bachmann has not signed your plan yet? >> she well. >> is that a problem? >> i think she likes everything in the plan but to wants to include the obama care issue. i need to talk to her and see it we can get her on board. >> is there a difference between an incredible conservative and a strong conservative? >> i think they are the same thing.

we need a candidate who can articulate the conservative values of ronald reagan. lower taxes, less spending, traditional values, and a candidate who could take those fundamental principles of the modern republican party and communicate them inarticulate way, that is the one i think wins. i think they will win the general election as well. >> who is best articulating those principles? >> we have eight candidates. they're doing a nice job. >> is it mitt romney? are you concerned with what he did in can massachusetts? >> there are concerns there but that is why we have a primary process. the candidate who can go out there and shake hands and make speeches and do the things you do in this business called politics and get the most votes, they are the ones that deserve to be our. when we find out who the is, i will do my best to help them. >> we will leave it there, congressman jim jordan, thanks for being with us.

we're back with our reporters. we just heard from jim jordan about where the conservatives are on the debt talks. where are the democrats? >> both parties will face a tough time. for democrats, the big divide will be over seoul's security. the administration has signaled some willingness to start addressing social security and may be cutting a program of debt and that is something that many rank-and-file democrats say is a nonstarter for them. >> medicare? >> that is something that a lot of democrats have objections to. they see it as something back and use -- be used effectively for the in the 2012 elections. people don't like those cuts of they are unwilling to give that up as a political weapon. >> what does that mean for getting some sort of deal out of

the house? is the dynamic the same in the senate? >> it is fairly similar in both chambers right now. right now, they're walking a tight line. the more the republicans know that they need 50 or 60 democrats to pass it out of the house. the problem is not anything except they have to give up certain things and push more republicans away. the way to balance losing republicans looking democrats is very difficult for them. you see the minority leader nancy pelosi and steny hoyer feel like this is one of those times where they have become relevant again in washington. they have some power and they are making a lot of demand for it whether they stick to those demands i think is up in the air. they are trying to extract as much as they can.

>> what have you heard about the talks that are happening behind closed doors? is there detailed negotiations and they are giving behind closed doors but then they come out in public and say no? >> in the talks, both leaders realize they will have to make compromises. that is a sense i get from sources inside the room. both parties are under a lot of. pressure the white house and speaker john boehner have indicated great concern over what would happen to the economy if the company -- of the country did not raise the debt ceiling by the deadline. you have 9.2% unemployment that can out on friday. that ratchets up the pressure on both parties since nobody wants to see a down turn. >> the president meets this evening with democratic republican leaders at the white

house. after talks over the weekend, they will try to get closer. what happens after this evening's meeting going forward into next week? >> we will see some more talks. i suspect both sides will try to keep the details as much as possible to themselves to the last moment. republicans and democrats will then try to sell to the members. john boehner will not hand it off and say it has to be done in a couple of hours. his members have been very unhappy. >> this was to keep the government running? >> right, his members felt like they got sold a raw deal. they felt they did not have enough time to read it. they will make sure the motion gets scored and that could be a

big pickup in this whole process. that allows things to die. >> that will give them three days to hate it. dealu don't want to hanging out there so long because hit a pi like anata. you don't want rank-and-file members to feel like it was crammed down their throats striking that balance on the timing will be critical. >> the deadline to get some the to the floor is what? the house republicans announced they canceled one of their work. in their district. >> economists have told me that you will start to seek markets get a little spooked by the end of next week or early the following week.

that is something that will make it from both sides want to avoid. >> does that put more pressure on them? >> absolutely. >> in the week after, they will need a couple of days to debate it in the house and the senate could do it within hours if they have an agreement. if no one tries to filibuster, it will be fairly quick. they should probably start the debate by this week. >> thank you for being part of our program. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> president obama is meeting at this hour with congressional leaders on the deficit reduction plan. the president says a deal with congress needs to be worked out in the next 10 days. the white house has put forward package of four dollars trillion worth of cuts, but late last night, house speaker jon baker said the republicans would not accept that plan. it includes tax increases. they want you to plan that covers between two trillion