the security. all of that information is right there on the web site, including q&a for those that want to understand the process. start with the treasury's website and keep navigating around. within an hour he will have more than you want to know about it. host: jay powell, thank you so much. coming up next, we will go to the house of representatives. the floor is about to get under way with business. on today, c-span 2, the senate will be in business at 10:30. they will go into recess at 11:00 to hold party meetings. they will explain to their members the details of this debt ceiling framework, allowing rank-and-file members to weigh in. at 12:30 they will resume. you can watch that on c-span 2. now, the u.s. house of representatives will go to the

floor. that is all for this morning. thank you for being with us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] .

the speaker: the house will be in order. pursuant to the order of the house of january 5, 2011, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate . the chair will alternate recognition between the parties with each party limited to one hour and each member other than the majority and minority leaders and the minority whip limited to five minutes each, but in no event shall debate continue beyond 11:50 a.m. the chair recognizes the gentleman from oregon, mr. blumenauer, for five minutes. mr. blumenauer: thank you, mr. speaker. for weeks now, we've faced the artificial republican debt crisis which was a crisis of choice, and now with an agreement coming forward we

should ask the question, is this worse than the default scare? well, it's hardly clear. what about a government on autopilot locked into a slow downward spiral? first, this empowers the most reckless and extreme elements, not just in the house republicans today, but a blueprint for mischief for either party in the future. next, we are starting down a path of budget cuts that all the experts assure us will weaken the economy at exactly the time we need to strengthen economic growth, not reduce demand. clearly, it is a step backwards from reforming how the country does business. the fixation on triggers, formulas and supercommittees will make it easier for congress to duck the difficult policy work and harder to do it

if congress wants to try. even as it would appear, we avoid outright default. this agreement casts a long-term shadow on our nation's reasonableness and our reliability. for the next two years and beyond. and remember, the drama over the continuing resolution earlier this year. remember, there is two potential government shutdowns over the next 14 months that will invite more legislative blackmail over an extreme agenda since it's clear that recklessness works. this is all the more frustrating because the path forward is clear. the public strongly supports a balanced approach which would include tax reform that would raise money while making the tax code more fair and simple. everyone knows we must deal

with health care costs and until recently there was bipartisan agreement as to how to do that. we should accelerate the health care reforms which are already enacted into law but do it faster to improve care and lower costs. we should require a commission -- do we need to require a commission to implement bipartisan suggestions to right size the military, both its mission and its budget? absolutely not. there are ideas floating around and support on both sides of the aisle to do that now. most important, perhaps we should revitalize the economy by rebuilding and renewing america financed by modest increases in user fees. and one of the things that must -- that is actually i think most simple would be to

implement bipartisan suggestions to reform agriculture, to save money while helping people who farm and people who eat by reducing massive unnecessary subsidies to large agri business. this agreement delays the important work while it weakens both the economy and the decisionmaking process. government on autopilot in a slow downward spiral is not a victory. the speaker pro tempore: the gentleman yields back. the chair recognizes the gentleman from oregon, mr. defazio, for five minutes. mr. defazio: well, here we are after a long weekend of hyperbole and back room deal cutting at the white house and here's the product right here.

to look through it is pretty interesting. there is no balance. there are no revenues. god forbid as we ask the millionaires and billionaires to pay anything toward further supporting our country, close some of the tax loopholes and allow hedge funds managers to pay taxes at half the rate of their clerks. you know, things like that, that would be a reach too far to ask them to share in the sacrifice. well what we do see here are cuts and very few are specified, but strangely enough, this one that the republicans always go after, because, you know, they hang out at the country club and at the country club no one is worried about putting their kids through college. the one specified cut here is in graduate school financial assistance. now, that's kind of peculiar. we have a doctor shortage looming and medical school is

phenomenally expensive, but i guess it's just going to be the rich kids who are going to go to medical school in the future. not the middle class kids, not the struggling kids, just the rich kids. that's the one specified cuts. the rest we don't even know. where's that trillion dollars of cuts going to come from? not one penny in revenues. and the grand result is about $2.5 trillion of deficit reduction. if we just let all the bush tax cuts expire, if we went back to the bad old days of the clinton tax rates that the republicans claimed would destroy the economy. actually, what happened we had 3.8% unemployment and paid down debt with the clinton tax rates but, yes, the job creators had to pay a little bit more. that was -- that was really bad times, republicans would have us believe.

so we don't want to go back there. we want to stay in the current day. we've been cutting taxes of bush tax cuts. three as obama as a co-conspirator on the bush tax cuts. where are the jobs? well, let's just keep doing it and maybe it will create jobs. it's not going to create jobs. there are no jobs. there are no jobs in this package. at the least, at the least they could have extended the federal aviation administration authority. now, most people say, what does that mean? well, a week ago last friday authority to run the federal aviation administration expired. now, the air traffic controllers are working under emergency provisions and they're being paid out of the trust fund which is being drawn down. but all the taxes went away. so we're walking away from $200 million a week. that is in taxes that would come from users of the system. most of the airlines are -- have raised their ticket prices

to capture that money. 4,000 federal employees have lost their jobs or laid off, collecting unemployment. republicans don't care about federal employees. let's put that aside. but 90,000 private sector construction workers and small businesses are also unemployed because we brought all of the safety and security improvements across the entire system to a screeching halt because we're not collecting taxes which the airlines are now capturing for profits. could that be in here? that would put 94,000 people back to work. nope. that's not in here. that's too much to ask. there isn't a single job in this package. the biggest problem in america, the greatest deficit we have is in job creation. if we could get back to around 5% unemployment, guess what, those people are working, they're not drawing unemployment benefits, they're not drawing food stamps because they're desperate to put food on the table and the unemployment is not enough and a quarter of the deficit would go away with people working. how about transportation infrastructure?

150,000 bridges are crumbling, need to be replaced or rehabilitated. $70 billion backlog in critical investment in our transit systems across the country. all made in america. manufacturing jobs, engineering jobs. nope. can't do those sorts of things in this bill. we can't make investments because republicans think everything government does is bad. so we can't even make investments. we can't discriminate between wasteful spending, consumptive spending and investments that will put people back to work because they claim government can't put people back to work. who built our national highway system? i don't think it was the private sector. i don't think it was the billionaires and millionaires who are escaping any meaningful taxation at this point and seeing the lowest level of taxation on their incomes since, you know, forever basically. we can't ask them to do anything. we can't invest. we can't create jobs and we're going to cut student financial

aid for sure and a few other things. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentlewoman from texas, ms. jackson lee, for five minutes. ms. jackson lee: i thank the speaker. we will be gathering this morning in a number of conferences and caucuses to assess the work over the weekend that addresses a procedural process that most americans were never made aware of for the last 100 times since 1917 that we raised the debt ceiling. it is tragic that these two words have become such dastardly words in the american psychic and the american vocabulary. and it has been characterized as reckless spending in

washington. more than what it is which most americans do at the end of the month and that is to pay their bills. i had the privilege of joining in a balanced budget process in the 1990's and frankly it was a joy. it was good to do good things in a bipartisan manner on behalf of the american people. out of that process came something called the children's health insurance program that helped insure over these last couple of years millions and millions of children and, yes, we had a balanced budget. in the course of it, of course, in the rush of doing that budget we skewed the reimbursement for physicians, the doctors that you see in your villages and counties and cities and states. the doctors that many of you send to medical school who happen to be your children, the doctors who take an oath to care for the american people.

yes, we skewed their reimbursement so now every year we have to confront the unfairness of how we reimburse our doctors. the doctors who work in public health institutions, county hospitals, clinics. this is what happens when you rush to do something that should be ordinary. so today i rise looking toward the meetings that will go on today, many of them we will huddle together to try and do the right thing. i asked months ago for us to raise the debt ceiling as has been done 17 times for the president of the united states. president reagan. and other presidents who have asked to have that done. and then begin to look long term as mark sdemrandy has indicated, -- zandi has indicated, many economists have said cuts will be damaging to this economy. but i rise to speak of the vulnerable persons who really can't speak for themselves.

many think seniors have lobbyists and one of the major, largest, if you will, lobbying groups for seniors and they do a great job. but i know seniors who really are huddled in small apartments and old, old homes left to them by their deceased spouse, something they paid for but has deteriorated over the years and because we are not helping seniors with their rehab any more and many of them got reversed mortgages that really took them to the cleaners and left them with nonperforming contractors that did a poor job on their homes, these are the seniors who don't have voices. or many the vulnerable families in latino and african-american communities where the wealth distinction is showed, where the majority of americans, white americans have a wealth fact of $113,000 and respectively african-americans have $5,000 and hispanics or

latinos at $6,000. now, that doesn't cover it all. there are people in appalachian and other places around the nation where that disparity is very, very strong. but it does mean there is a population of vulnerable americans. . the the question is whether the approach we are going to take today as simple as raising the debt ceiling to pay our bills has atardly part to it that causes the laying off of hundreds of thousands of meshes because there are no job creation. when you cause us to stop spending money to encourage the economy to move such as the three million jobs created with the american recovery and reinvestment act, then there are no job creation. our private sector is not moving as fast as we would like. we hope this will spur them on. but i have heard that before. i have heard during the tarp and bailout of banks that just give us a chance. and you ask any small business around america whether they are able to access capital to build

their structure, their business, small businesses that i truly believe are the backbone of america, small businesses if we did nothing on the floor but every day do something, give a gift to small businesses and health care, give a gift to them in tax relief. give a gift to them in incentives to grow their business, you would see americans being hired. small businesses are as small as one individual sitting in front of their computer. that is what we should be doing. so, mr. speaker, i am very concerned about going forward with a complex approach to the debt ceiling while thousands of americans are out of jobs, where airlines are taking money they should not take. while the f.a.a. is shut down. we have many other problems to take care of while construction jobs are at a stand still, mr. speaker. what about the vulnerable americans? that's what my concern will be about as we go through these meetings and approach this floor today. i yield back. the speaker pro tempore: the the gentlelady's time has expired.

pursuant to clause 12-a of rule 1, the chair declares the house in recess until 12:00 noon >> here is a look at what we can expect -- the house will be back

at noon for legislative business and there will be a number of meetings taking place. the senate could be voting on this measure as early as this evening. the house could then take up tomorrow and that is dependent on some procedural votes that could take place, the 60-vote threshold in the u.s. senate. we learned that vice president joe biden will travel to capitol hill and meet with members of the democratic caucus in the house and senate as the white house tries to sell this bill and democrats meeting in about 45 minutes. the house democrats will meet at noon and house republicans as well. first up is a viewer from florida, on the democrats' line, go ahead. caller: i am trying to see what we can do to stop this bill or stop the pay for the government and the soldiers.

host: what do you mean? caller: we are talking about suspending -- say no to the bill that would stop pay to the soldiers and everyone else is ridiculous. the country is in debt but that will hurt the soldiers. host: we will get a call from mary in new jersey, republican line. caller: thank you for cspan. the bill that should have been moved forward, most americans realize, was the cut, cap, and balance. the reason harry reid took off quickly was he was afraid it would pass in the senate. the other issue i want to point out to the american people and they should be getting on their phones and calling about this -- when they keep talking about cutting entitlements like social security and medicare, they

should not be concentrating on that. they keep saying everything is on the table so they should keep considering benefits that are being given to people that are in this country illegally. this is not right. we have worked hard for these benefits and even though they are -- we are getting more than we put in, at least we have made an effort here. people that are here illegally should not be getting any of these benefits. host: thank you for calling. getting your reaction to the agreement as details continue to come out utah, our line for independence. caller: to the last lady that just called, if she is worried about the illegal immigrants, i respect her for that, but she needs to understand that back in the 1980's when they had a shortage of people that did not want to do the jobs the americans had then, remember, it was the republicans that brought

in the immigration program under the green card that brought these people in. don't sit there and think it started recently. it was the republicans that started that. as far as the agreement we came to on the debt ceiling limit today, it is fine and dandy and everybody has to sacrifice. i am in agreement with that. my approach to it is to make it more fair is there will be cut and everyone will have to sacrifice over 10 years. they need to make an amendment to this bill today that all senators in the senate and all congressmen in the house of representatives need to donate 50% of their wages over the next 10 years. they will complain about everything and they want to have so security and medicare but they will have to be part of disparate bacon give up half of their wages.

they made $170,000 per year. everybody has to be involved. host: thank you for that call. the president has a private schedule most of the day. it is unclear whether we will hear from him. we heard from him last night. those comments are available on our website, c-span.org. he announced the framework of an agreement between congressional leaders. the congressional leaders will be selling the package today to their respective members and we heard earlier from congressman steny hoyer say he could guarantee about 60-70 democratic votes, possibly more. he is hoping to get 150 from john boehner and republican caucus. there is a lot of attention on what is happening in the u.s. senate for a the senate could be voting on this potentially late this afternoon into the evening or late tonight depending on a number of procedural votes in

the u.s. senate. we did see a vote in the u.s. house of representatives by tomorrow. next is pennsylvania, republican line. caller: good morning. the government said most recipients of -- sent most recipients of so security a letter from cpi, consumer price index. they say the consumer price index is what is preventing them from getting people on social security and disability a cost- of-living adjustment. host: that is in place in a -- as inflation, essentially caller: someone brought up about how much food is costing today. this went out to all the recipients. i just want to say that is not

right. the grocery store cost more and goods across the board that we use every day cost more. host: next is john joining us from south dakota, independent line. caller: good morning. host: what do you think of this package as outlined last night? caller: i think the democrats need to wake up and smell the coffee. as an independent contractor, i have to place bids almost a year or more in advance and they raised minimum wage which i cannot afford because i had the contract in place. they need to wake up. host: what specifically do you mean to wake up? what do you want changed? caller: i want them to realize we cannot have the largest increase in wages because we

have to do contracts one year in advance. democrat, brendan, line from tennessee. caller: give me one minute. you had a congressman on there by the name of tim ryan and he is a democrat from ohio. i am end steve collins the district. he a representative from tennessee. i'm a disabled veteran and i served in the marine corps almost 10 years. they are cutting veterans' benefits like crazy. they're doing everything in their power to disable all of us, the lower class people because i consider myself lower class. the little money that we are getting through our benefits are not enough with the rising prices of groceries and everything.

where is the black caucus and the hispanic caucus? if they don't vote no for this thing now, i don't know how i will vote for the president. host: we heard from congressman cleaver yesterday. he referred to this in his words as a satan sandwich. caller: tim ryan, nancy pelosi speak to our president. this is ridiculous. there is no increase in the taxes. they are not trying to get taxes or anything. they are trying to destroy our country. host: that debate is over because this is the agreement on the table. caller: the democrats have not voted for this. please don't vote, democrats. stand with the veterans and i thank you so much host: last

call is from bowie, maryland, good morning. , democratic line. caller: i don't like this a vote at all. i think they have to vote for it because seniors like me depend on this and if they don't it means we would not get our benefit. people call in and saying they should vote for cap and balance, cap and balance would cut medicare and social security worse than the ryan bill did. i'm glad they didn't. anyone who votes republican this time should not be complaining. the last time they voted them in and they almost destroyed our country. they are laughing at us and around the country because they could not get together and

compromise. it took them all this time to compromise. it hurt us. it brought down -- people did not go buy things because they were afraid to spend their money. it was hurting us. senior citizens, if you want your social security and medicare, you better vote for the democrats this time because ryan and the republicans are coming after our medicare. get out there and vote. if you have to crawl on your knees. i am from west virginia and i know the people down there, the seniors need their money. we know make much and i want to cut it. at the end of the month, we don't have money to buy food and medicine. please, seniors, please remember to vote for democrats this year. if you vote for republicans,

ryan will get his way we will not have a check or be able to eat. host: thank you for that call. the agreement that was announced last night by the president essentially is about $1 trillion in initial cuts that will allow congress to raise the debt limit another $1.4 billion but fate super-committee will work this out in the fall and the recommendations have to be in place by september -- november 23. a final congressional vote is due by november -- december 23 which is christmas which is before christmas eve. six democrats and six republicans will be on the committee to come up with these recommendations. if congress fails to act, there is a trigger mechanism that would result in some cutbacks for medicare providers and also on defense benefits. you can read more on all of this from our website on c-span.org.

we will monitor what is happening with senate democrats and republicans. they will be holding individual caucus meetings at 11:00 eastern. congressional democrats and republicans will meet at the noon hour. the house was in for morning business and is now recessed until noon. we'll have live coverage here on c-span and c-span 2. right now, from this morning's "washington journal" our roundtable. continues. host: carrie budoff brown is here, and larry lerer is a bloomberg news staff writer, both joining us to talk about the debt compromise that was reached. where were the two of you last knit as this was being worked on? guest: i was at the white house waiting all day, figuring that something would happen a little bit sooner than it did. we were held up for quite a bit of time. lisa can actually speak to this. you might have been on the other d. guest: i was on the hill

waiting all day as well. and, you know, sort of a lot of waiting for them to come out of meetings and seeing who was going into whose offices and where wajohn boehner and sort of watching the final negotiations as they racesed to hash it out. caller: carrie, the president came out and gave comments after 8:00 lasnight. was that really the first moment that it seemed like progress had been made, so to speak, that a deal was really in the works? guest: honestly, it was definitely earlier in the day when we started hearing that the leaders, every leader exetcht john bane her signed off on this deal. we thought that maybe mid-afternoon. but i think we would have expected something to happen just a little bit qcker, so once a couple of hours had passed and the speaker still had not signed on, there was still not a conference call, there was some concern that was raised within the west wing th something was holding it up. and then, you know, maybe only around half an hour before it came out was it clear, harry

reid saying he supported it, that, you know, we would be hearing from the president pretty quickly. host: and herere pictures that describe the scene you're talking about. here's mitch mcconnell walking to the senate floor talking about a deal, and he's surrounded by reporters. we have other pictures from "the washington post," i'll throw this one up, that shows a similar scene here. senator dick durbin, democrat of illinois, surrounded by reporters as he's going through the capitol hill. so there must have been a sense of a lot of interest. and how are you getting information about what was going on? was it when people were coming out of meetings? how were you learning about deals or tngs happening and in the works? guest: well, it wasn't all that different from any kind of reporting. it was just faster and more condensed. i was talking to aides or getting reports from the meetings, grabbing lawmakers as they came in and out so. people were let i tight-lipped about what exactly was going on, and i think it's for the

reasons that carrie was pointing out, that they were all waiting until things were finalized. because i think this is a high-stakes political game for both parties, and i think both democrats and republicans knew that there would be a bit of a backlash from their own members, and they want to make sure they had all their ducks in a row before they confronted that wave of anger. host: lisa lerer has this piece today, party leaders confront skepti among the ranks in the debt deal. you say the leaders in the democrat and republican ranks have finally reached an agreement, but now they must sell it to their parties and quickly, recognizing there's plenty of members -- rather, there's pleasant that i members won't like about the plan. who is it going to be hardest to sell this to? guest: i actually think it might be hardest for democrats. i think republicans went into this stage of the debate saying, ok, there's a certain number of our members that we know we're just not going to get, guys who are really, you know, strong tea party folks. people like michele balkman who don't want to vote for any

increase in the debt ceiling. it's hard to find a deal that she's going to support when she doesn't to want raise the debt ceiling. for democrats, there's really a sense among liberal groups and among democratic lawmakers that they got a bit rolled on this deal, and that president obama didn't quite go to the mat for them as hard as they would like, and their big gripe, of course, is the deal includes no taxevenues. that's a big problem. i think carrie can certainly speak better to this than i could, but i think the president is really going to have to sell this. guest: he is, and part of yesterday, democrats were coming out very strongly against it, and the white house aides were saying this is based on incomplete information, faulty reporting, really, from some information that had come out the night before. and they they felt when they briefed us last night that once democrats learned the details of this, they would become more comfortable. and there are certain things we're going to hear them talking about. they're going to say, we protected social security,

medicaid, any programs for low-income families. if there is a trigger that kicks in for automatic cut for medicare, it will hit providers, not beneficiaes. that called some nerves yesterday on the hill, the fact it was not going to be beneficiaries. and they'll argue there's equally -- the tax cuts expire for the wealthy around the same time that the cuts, if they're triggered, those would hit. the administration thinks there's an incentive there that forces congress to look at this as a global problem when the committee convenes later this year. he'll still have a lever to use. thunderstorm their rationale. even though, this is a tough road selling this. guest: yeah, certainly by the reonse to the plan by nancy pelosi in the house, she released one statement, or maybe a two-statement response, it was pretty terse and didn't seem all that happy. this is right after harry reid had come and mitch mcconnell had said everyone's signed

occupy this, and she comes out with a two-sentence response. i think there will be griping, and we'll be there to get it. host: carrie budoff brown wrote this in a piece. at 4:45 this morni, that's when it was file you guys have been burning the midnight oil, you wrote that obama appearing sunday night in the white house briefing room seemed more disgusted than delighted. let's take a listen to president obama and the comments he made last night. >> despite what some republicans have argued, i believe we have to askhe wealthiest americans and biggest corporation toss pay their fair share by giving up tax breaks and special deductions. despite what some in my own party have argued, inning we need to make modest adjustment toss medicare to ensure they're ill around for future generations. host: that was president obama speaking last night. carrie, what was it about the president's demeanor that made

him seem more disgusted than delighted? guest: this was not an easy process for him. today give out a lot along the way. he had to renege on some things, and i really think he was very disenchanted by what happened with speaker boehner a few weeks ago with the grand bargain, how they weren't able to close the deal. this is as good of a deal they could have gotten, but this is not where the president in august the year before re-election, where not the issues, this is maybe going to help him with independents, but he knows the blowback he's going to receive from democrats, the selling job he has to do. officials will indicate he will have to travel, try to sell this beyond washington. it's been a difficult road for him. you could see it on his face last night. host: let's hear from richard

from act con, ohio. good morning. caller: good morning. how you ladies doing? host: we're well, thanks. go right ahead. caller: awesome. the reason why i'm calling is to let the american people understand that president obama is really trying to get it right. and e republicans are just showboating and shame on them. because where were they when -- they were trying to get fiscally correct now. where were they when president bush was spending like crazy? they weren't financially responsible then. what makes the difference now? host: richard is saying who wins and loses politically in this? what is the white house's concern of how the president learning? guest: the caller speaks to the frustration the white use has had, which is they feel -- even though they've contributed to

this debt, accruing this debt the last few years, george bush bears equal burden,nd they've been frustrated that he's the one that is now having to deal with this. in terms of who wins and loses, i think the president, politically for him, it is -- the conventional wisdom is that it's a win for him. deficit reduction plays well with independents, and getting -- being fiscally responsible plays well with independents. less him to a certain extent in the november election, this may help them bring that back. however, you know, there's a real threat of disenchantment with the liberal base and the fact that there's still murmurrings of a primary challenger to him. nobody knows who that would be, how that person would fare. no one thinks that person would actually beat barack obama, but it's enough that -- you have examples from history, jimmy

carter and ted kennedy weakening the candidates and the white house has been furiously trying to lock down their base in recent weeks, paying more attention to them private until conference calls, outreach, hoping to tamp down any kind of blowbacks they're going to leave. host: lisa, what is the political calculation on the hill as far as who are the winners and losers? guest: this debate over who's responsible is definitely going on, and we did a piece at bloomberg that shows that if you take the wars, the bush tax cuts, tarp, and the changes to prescription drugs, republicans contributed $3.5 trillion to the deficit. republicans, of course, democrats love that number. they jumped all over that number. republicans, of course, argue that, if you look at the percentage of spending under president obama, it went up dramatically. so the truth is both sides are to blame for this increase in the debt, this dramatic increase in the debt. i think people realize that. if you look at polling numbers for congress, really nobody

comes out ahead, and congress' approval ratings, which were already pretty low, are lower now. i don't know that anyone looks particularly good on capitol hill when these negotiations stretch out and take them to the very last minute. and certainly from an investor standpoint, investors i've been speaking with have said, well, you know, we expect that something will get done, we just know how congress operates and we think it's going to be happening at the very last minute. they were pretty much right. i think that that kind of way of handling these crises, and there seems to be one every couple of months, i think people are getting pretty fed up with that. host: e winners, the republican party on substance, they won this debate. they came, you know, if you just look at what the president said, six months ago he wants thvote, he has to have tax revenue, john boehner says i want dollar for dollar for the cuts and debt limit increase. republicans changed the debate. earlier the president wanted to talk about job creation, investment.

that's not happening. it's on the republican terms. they really did change that debate in washington. and, you know, probably for the next year and a half. host: let's go to san francisco, where tim is on our independent line. go ahead, tim. caller: hi. thanks for taking my call. i was actually going to say very similar points to what you were just saying about how the republicans came out on top on this one with no tax revenue and then, of course, the increase in the debt limit. i was just kind of confused by the whole argument. i feel like e media missed the idea that the size of the u.s. economy is going to keep growing and that the debt iling will have to be lifted in the future again, where it's at the same point as far as percentage to g.d.p. i think it's definitely an inflexion point. i think it's a time for the u.s. to kind of rehash the way that it collects taxes and sets up its codes, and i think in the future we're going to get back to the same point and

probably end up with another boiling point as far as trying to cross another consensus as far as the debt limit and trying to appeas our world veors. host: let's go to lisa. caller: that's definitel people on capitol hill have been talking about, it's the new normal. the debt ceiling has been raised many, many times, without this much drama and conflict surrounding it. is this what we're going to see every time? because we are going to have to raise the debt ceiling again. a lot of issues tim is pointing out, the hill is anticipating tax reform or something like that. but on the republican point, what's interesting to me about that, certainly a lot of people view this deal and say the republicans came out ahead, and i think that's right. i think they have changed the conversation here in washington. but what's intesting is that many in the base don't think so. there's a lot of republican groups and republican voters, tea party groups unhappy with this deal. i think that's because this

class came in with such big promises and such big expectations. we'll have to see whether voters feel they meant that, even though democrats are very unhappy with the deal. host: let's go to the latest news from the a.p. john mccain says he'll vote for compromise legislation averting a government default, although "i'll probably have to swallow hard." the arizona republican says he's concerned about the impact of the deal on defense spending. tell us about defense spending, lisa. guest: this is a major, major issue for the republicans, and it's in part what held up the deal for those last few hours yesterday. speaker john boehner was really worried about the level of defense spending. defense spending cuts are a trigger in this, so if the committee that's set up can't get the deficit reductions that they have required in order to raise it again in the fall, if that doesn't happen, they'll make deep cuts. and that concerns a lot of

people, particularly on the house, a lot of republicans. guest: and that will be a big issue on the senate side, too. the one thing that the republican party -- there is a faction in the republican pay that is willing to make defense cuts. so it's not as much of a sacred cow as it was 20, 30 years ago. there's a lot of folks who think the's a lot of fat in the defense department, in the pentagon. there's some concern with democrats yesterday that is defense really the kind of trigger that's really going to scare republicans back to the table like it would have 25 years ago? i think the reaction and the holdup yesterday in the house republican conference kind of answer that is question to a certain extent. republicans do view it as something they have to go to the mat for, so it may have been the right trigger, at least to get conservatives back to the table and cut a deal. host: let's look at some of the details of this debt deal that was hammered out yesterday, and this is coming to us from the white house, a fact sheet from the white house.

it would increase the debt limiby at least $2.5 trillion. sources are saying that number could be $2 trillion. nearly $1 trillion in cuts over a decade, and that includes defense andondefense spending. it creates a committee to find $1.5 trillion more in either savings cuts, including entitlements and tax reform. the committee has to rereport the legislation by thanksgiving. if the committee fails, the enforcement mechanism kicks in, triggering reductions in 2013, and that would be half of domestic and half defense spending. what is prected, not on the table at that point if this mechanism kicks in, social security, medicare, and low-income programs. tim, republican in alabama. good morning. caller: how y'all doing? i've been watching this show and i've been trying to get in on this show a whole lot, and i watch a lot of people say

things such as, oh, how bad the tea party's done. y'all,y really been impressed with them boys. they finally got things brought out, they finally got things done. you can actually see -- and even though the bunch that's been there so long don't like change worth a crap, i've been impressed with them. i like what they're doing. i hope everybody's up for election in 2012 and gets ousted by somebody like them. it's the best thing that's happened to this country. host: tim, did you want to see the debt cling raised or were you willing to let default happen? caller: i was really affected more by what's happening in the stock market than i am by a job. you hear me saying this right here.

they're spending way too much money. they talk about bush. bush spent $1.37 trillion, that's a heck after lot of money, a that's something the ordinary person couldn't fathom as far as looking at that much money. guest: i think the caller speaks to the point that i was making earlier. the change in the conversation in washington is just -- it's so stark from where it was eight months sexag where the president was when he gave his state of thenion address, he did not enforce the official recommendations. i did the story a couple of months ago, talking to white house aides, explaining they were not explaining the report. this is back in march. they were saying, listen, americans are concerned about jobs, washington is concerned about the deficit. we're going to say concerned on what americans are focused on, jobs. well, the two things -- they couldn't sustain that line of argument, in part because there's a block of republican in the white house and in the senate who ran on not raising

the debt limit. they stuck to it. and that's what they ran on, people knew what they were coming here to do, and they did it. so that forced the president. united states to change tack and embrace deficit reduction. unless the tea party was there saying what they were doing, i'm not sure that this deal would have happened in the magnitude it did. join joe wtes, he thinks it's crazy they're not expiencing a tax raise as part of this deal. they just make more money and don't pay taxes. really odd. guest: lisa, taxes are not on the table with this. how big of a blow is at to liberals and to the prospect of seeing that happen at any point in the neck couple of years? >> well, liberal are certainly treating it like that. the's a lot of outcry by that particular issue.

they felt the president had say from the beginning that he thinks that we need to raise revenues and it has to be part of this equation. that was something that republicans, particularly the tea party members, really united against. it's been a big blow for them. the question is what happens when the bush tax cuts expire, and that will give the white house an opportunity to raise taxes and to get the revenue increases that they've been seeking. it will be after the election, expires after the election. guest: there was some debate several weeks ago as to whether the committee would even be able to tax reform or brakes. there are no restrictions, tax t this could be part of the equate, and the presint has been clear privately, as follows publicly,hat he's not happy about the tax revenue being not being a part of it and feels as if he needs to have tax revenue sooner or later. so, i mean, this debate over taxes is like in no way settled

today. it is only going to continue, and it is going to be a hug huge, huge issue as this committee works through. you're going to have democrats who are going to double down, and it's going to be a clash just like we've seen. guest: the bush tax cuts are set to expire right after the 2012 election. if they expire, it would raise taxes for a lot of americans, like last year, letting them expire for a certain bracket or perhaps that would be a negotiating point for taxing the wealthiest. guest: it's something republicans had a lot of concerns with. when john boehner last night briefed his members on a conference call -- and this was something that came up quite a bit. a lot of people asked, well, what if this committee decides to look at revenues, and they anticipate that's something democrats willant to do, and republicans don't want to be put in a political position of either voting for the tax ref

that he says recommended by this committee or facing the deep defense cuts. they feel that would be tough. so they were not very happy about that outcome. host: robert on our line, good morning. caller: yeah, good morning. go ahead, sir. caller: people better wake up and see what's going on. this republican party is not interested in nothing but one thing, holding taxes down in order to try to make obama look bad come 2012 so they can get re-elected, because they got on tv and lied during the 2010 election, but they going to pull the plug, force you to go to some other dock, and where are the fogs? they fish long enough that the republican party going to get in there and create jobs, but they are notntending to create any jobs until the election time. and then here we go again all over again, same identical thing, and people are dumb enough to fall for their tricks. caller: carrie?

>> yeah, the jobs issue, this is a big reason which republicans spoke to, it's a big reason why the president was so adamant about gting this done tuesday. i mean, talk of the 14th amendment, invoking that, short-term extensions, it was just not where the white house is wanting to go, because quite frankly, they needed to get this over with so he can move on to talk about swrobs and the economy. the wall street reform bill, it was the year anniversary two weeks ago. the alleged miss couldn't even talk about it. they didn't even try to talk about it. that was considered a big win for them, and they couldn't even talk about it. so that's the kind of stuff that has been preventing this president from kind of moving on. so, like, tuesday was just so important to them to get to that becau of exactly what the caller is talking about. his re-election next year will depend on whether jobs are being created, the economy is moving along, and there are a lot of people who don't believe

what happened today is necessarily going to help with that. guest: i do think he's in a tough positi on jobs, but for republicans, and although there's no question that they won this debate and the tea party came out as a pretty potent force, there is a question how that plays in the elections. when you look at polling, people say, oh, we want cuts, we want to c government spending, we want to reduce the deficit. but when you ask what types of reductions, they would like to see, people don't want entitlement programs like social security or medicare cut. they don't want funding for alzheimer's cut. they don't want regulation of food and drugs cut. so i think there is going to be this question of whether people really want the results of this. when their schools start falling down, bus service, local jurisdictions can't afford to keep street let's on, who's going get blamed for that, and could that backfire? that's something that everyone's watching to see when they get to the elections or close to them.

>> she has covered campaigns in congress. she also worked for forbes dot com. she also worked for political covering health care and national politics. her experience includes time at the philadelphia inquirer. when you have been talking to members of congress over the last week or two, what about reaching the debt ceiling and a not going over the debt limit? and who are you hearing from? some republicans are very concerned that they were

separating themselves from the tea party message a. guest: the democrats are concerned. some members feel that it does not have to be raised. some felt that you could go a week or so beyond the deadline and everything would be ok. there were some mbers wh a very strong financial services industry that it did not want to go past this deadline or be at risk. it was tough for speaker boehner to get the votes.

and john mccain on the floor of the senate quoted an op ed. host: there is an op ed piece in the "washington post" today. he says what a difference a week and makes. he says it is winning the battle of ideas. how does the white house fight against that? guest: they have gone in full fighting mode. they have their officials out. look at the record.

he looks at the detai of the agreement. the social safety net not being damaged, so security, medicare. democrats have had an issue with the way this debate has developed. the economy is fragile. it is sputtering along. state governments will be hit hard as the stimulus retracts. it will only get more gramm in the view of democrats, now that we have this package in place. host: florida, independent line. caller: i am 77 years old.

i was a lifelong democrat. i am an independent now. i am wondering why the writers and even c-span, but when they re tobama's speech on thei support this and not one reporter went behind that with his speech he made in 2006 condemning george bush for raising the debt limit. that is why we do not trust anybody in washington, d.c. anymore. guest: i do not know anybody that looks at this debate and thinks it is good. people are frustrated.

it went down to the wire. it is not looking very good. i heard this last weekend. [inaudible] peop were blaming washington in general. maybe there were more frustrated with republicans oremocrats, but everyone was frustrated. people are really struggling out there. they are losing their jobs. they are not saying congress and this president deal with that. the frustration will come even louder. guest: especially with the 2006 vote. the white house said it was a mistake and he voted against the

debt limit. is this the new normal in washington? if a republican to expect the white house in 2013 -- i do not think anybody should be surprised if the democrats use that as leverage in a similar way. it is a tit-for-tat town. this may be the new normal as long as spending is a concern and job recovery is a concern. they may use the debt limit to extract things out of it. guest: it is sad for both parties. there are many people on both sides of the aisle that flip- flop. guest: when the democrats are in power, republicans vote against it and vice versa.

guest: i spoke to one person that said he voted this appleton's not to raise it. is that typical? guest: yes. caller: he played a tape of the president earlier in the show and he suggested that the rich should pay their fair share. i am wondering if you could enlighten us as to what the breakdown is in terms of contributions to the taxes of the federal government's from the different classis. the poor, the middle class, and the rich. thanks. guest: i do not expected to have all of the facts in your head. who are we talking about when

you mention the riches americans? the debate seems to be more about millionaires and billionaires. has the target shifted? guest: the president made a campaign promise that he would not raise taxes on anyone who made less than $250,000. there are towns like new york city, washington, d.c., where two. household incomes made that, but it is not considered rich. guest: the problem is regional in a lot of ways. in metropolitan areas, there are certain promises people are expecting. sending your child to college,

those costs have skyrocketed. buying a home, that was very high for a while. saving for retirement, people to not feel that social security will be there for them. in certain areas, they say it is not that much, but other parts of the country say it is a lot of money. host: do you sense retraction when it comes to taxing the wealthiest americans? guest: a lot of people support that. it is an issue -- democrats struggle. if they have a winning issue, they are reluctant to go down that road.

the president accepted tax cuts to the wealthy and middle-class. he said it clearly that he will not support it for the high- income americans and will veto that bill. why are people supposed to believe you, when he said that the last time? the economy was different back then. it will be different from a year from now. guest: no new tax increase pledge, which put some in a tough spot. if they do, they will be hammered by conservative groups. it is a tough spot for them. host: editor and publisher of the "nation" magazine. the debt ceiling debate has lasted long enough for most americans to start paying

attention and reaze how to force both parties are from basic common sense. this is a liberal magazine. she also writes thawhatever the terms of the original agreement, we know they will be remarkably cool, in the sense that they will cut programs for the most vulnerable in our society. has there been a lot of discussion about where these cuts will come from and what they will look like a ta? gues we have not seen details of the first dollars trillion -- trillion dollars.

it will be right over 10 years. the cuts will not go into effect for a number of years. if we do not really know where thescuts are coming from it will be in discretionary spending. guest: it is a disproportionate amounts for the epa. it is expected to get another hit. host: maria, a democratic caller. caller: i would definitely check for obama. he did not lose s cool.

i could see bush or clinton come out and saying he would exercise the 14th amendment, which probably would have store -- stirred up more drama. they see through the republican party. congress gave them a raise. they can give themselves a $3,000 raise. i think people are beginning to see through, that is why i would vote for obama again. guest: that wanted the president to be portrayed as the adult in the room. he ran on the idea thahe could bring together warring factions

and come out with a compromise. that is his brand. he was unable to accomplish this. it is perceived that way to some people. in the end, he got a deal that is not small but the big. that perception -- it happens politically. guest: he does. tried to rise above the fray. he did not want to get sucked into that for sure.

we will see what happens now that everything had is almost settled. the issue what happens to the democratic space, the people thatoted for you and gave small, but -- contributions. will they still go to grass roots organizing in ohio or florida? that will be a big issue. guest: he runs the risk in what does he stand for? we do not really know what narrative is going to dominate. what will dominate about him. or is he the guy that will cut a deal no matter what.

guest: part of it will depend on the presidential nominee. host: lisa lerer a staff writer with bloomberg news. we are speaking about raising the debt ceili in cutting spending. is this a done deal? we do not know how the house will vote. guest: it looks pretty good in the senate. house republican leaders newt is certain number of their caucus -- it it did not matter the deal. nothing that democrats would

agree to -- the republicans on the democratic side, there are a number that are frustrated and camel while details were emerging. -- came out while details were emerging. i suspect it will come for. in the end, there are enough people in congress worrying about what will happen. the trick is getting half the republicans to vote for it. it will put him in a good spot politically. guest: they do not have many other options. host: utah, good morning. caller: i am 57 years old and

worked in politics for quite a few years. i got out of it about 12 years ago. i feel like the one thing the medium, not c-span. i love this forum, because it gives people a chance to get their ideas out. mainstream media has been allowing senators to go on tv, make charges about this or that and does not make them back it up. i think i remember when i was younger, news anchors have a perspective of history and talked about a bill for an amendment and what happens in a depression when thomas jefferson insisted we pay our war debt or when president lincoln decided to pay a reward debt.

debt.rd deb we have a fraction of the country that believes tt they are just mad because everything caved in 2008. george bush was putting us through two wars off the books. in 2000, when bill clinton was moving his impeachment. and when they passed certain trade with china -- if those things would be reminded daily for the people of ameca -- i

think we would have a better educated society, and we would not have people picking up things on this website or that website. guest: i think the media did the best job they could. it is a pretty complicated debate. people are feeling a lot of stress right now. there is a question about how closely people are paying attention to this. it is something we will have to see. there is no question that people are frustrated and angry about the lack of jobs. it is tough out there for a politician. host: when folks go home for congreional recess in august

and the president goes out to sell ts plan to the american people, what will they meet when they go home? guest: i do nothink we know yet. whenever he was speaking, he gave plans. he was getting applause when talking about closing loopholes and tax cuts for the wealthy. he will not be able to go out there and say that stuff. what he is going out to sell does not necessarily play well with some people.

guest: we have heard a lot about the debt limit. host: what about the level of the education of the american public and is it changing congress as they have to go home and talk about it? i do not know if everyone knew what the debt ceiling meant. guest: i was out with a member of congress last week in illinois. the debt ceiling question dominated the meeting. there is a higher level of education about it. there was a number of people that said i do not believe what the treasury department has said

about what would happen if we went past this. the claim has been pushed out there. host:epublican in hanover massachusetts. caller: you are beautiful. host: what about carry? she does not give a compliment to? caller: [unintelligible] they needed to set the term limits. boehner needs to go.

negotiating is what got us in the mess. we are trillions of dollars in debt, but we are only going to pay one or two over the next 10 years? guest: there is concern in the speaker's office that that concern would be echoed around the country. guest: this is the point where everybody is watching to see if john boehner can have his members behind him. there are concerns about cuts. the speaker and others have come out to say there are a certain number of cuts. the cats were significantly lower.

boehner made a much bigger effort to keep his partners involved and brief. he said he would not have any deal until he spoke with them. guest: he backed the deal before he talked to them. guest: he did, butot publicly. host:he president spoke with the leaders. guest: today were on the call when the president was speaking. we got reports saying, i need to speak with here. your view on this is important. host:ohn, venice, florida.

caller: i am a member of the democratic club. i have seen barack obama twice. [inaudible] i have been on social security. i listen to c-span to very often and bloomberg. i support one person, who is a very good speaker. what is your comments pertaining to social security checks that will be going out on the third of august? what are your comments about

that? guest: there are bills to be paid in the next couple of days. have we averted that now or is there still talk about how this will pan out over the next couple of days? guest: everything will go out. there is a larger debate about entitlements going on. they talked about cutting medicare. people reacted to that. democratsee it as a winning issue. host: how significant is

entitlement reform? guest: it will now be on the table as the committee meets. turenne number of entitlement put on the floor. raising the age you can receive medicare benefits. a number of other proposals, which freaked out a lot of people on the left. and beyond that. it will be a tough issue. democrats will be comforted this morning. it felt like they had a good issue with the ryan budget. they still have a little bit of room to look against republicans. the committee will come out with a cole's laid of reforms in six months. they may take the issue off the table.

guest: it is an issue the democrats see is very politically powerful for them. republicans want to cut entitlements. putting it on the table was hard for them. host: one element that we have heard is part of this deal. ke a look at the details on our screen. entitlement reform, tax reform. it could occur by the thanksgiving recess. one person on winter writes this. not pleased by this idea. what is the expectation on behalf of the white house about

what the committee can do? guest: it is a committee of lawmakers. they do not want outsiders telling them what to do. either have one member disappointed by the leadership. the white house has expectations. leadership people are serious about this issue. they are putting a lot of faith into aroup of 12 lawmakers that at a very significant teeth in this. if they do not reach an agreement, there will be triggers.

host: we will be watching over the next few days is a who is on this committee. will congressional leaders follow what they said they were going to do? guest: i think the penalties are pretty severe. guest: it is hard to see the contours' of this debate change drastically. lawmakers are hardening their views. some are skeptic in terms of the ability of both parties to get away from preconceived notions of what this should look like. host: what about the options of having moderates in this program? they do exist in both branches.

[unintelligible] guest: it is an option. we have seen a number of these groups. >> the house will return for legislative work after members

consider four bills concerning the consumer credit commission. the senate could vote on the agreement today. the house, as early as tomorrow. the situation continues to have an lot of moving parts. stephen joins us from "roll call," on capitol hill. >> great to be here. >> physically, where are you located? what is happening right now? hallway outside the said. -- outside the senate. democratic leadership is also pitching the rank and file a deal to drum up support.

republicans are meeting with leadership, getting briefed on the deal. it looks to me, from talking to a number of senators, of the day have significant bipartisan support. the house might be a little more tricky. typically because a lot of liberal democrats do not like this deal. they have cuts up front and no guarantees of any revenue. [noise] >> are you still with us? >> yes. >> vice-president joe biden is meeting with members of the senate democratic caucus at this hour. in terms of the procedure, the series of votes, will the senate vote first? if that happens, when is it

likely to happen? tonight or this afternoon? >> the expectation is that it would be the senate. they have a bill that could easily be amended and sent back to the house. the timing of the vote must depend on how long senators and house members want to talk before they vote. for the senate, any one senator could delay things significantly. many tea party senators have strongly opposed any deal without a balanced budget amendment requirement in it. time on the senate floor for speeches. if harry reid wants to vote on it sometime today, the house and senate both want to make sure

that something is passed before the markets open tomorrow. even some sort of liberal democratic senators, who are not in love with this package, a minimum of $2.10 trillion over 10 years, does not have a guarantee of revenue. avoiding a default, there was a good line a few minutes ago. she felt like she was told by her doctor to go on a diet and do some exercise and she is not happy about it, but she is learning towards doing it.

>> emanuel cleaver call this a sugar coated can be sandwich. the chairman of the congressional black -- black caucus were figuring out their game plan for what they considered to be their game plan without asking for a sacrifice from the wealthy or corporations. there is going to be some repair work that needs to be done by the vice-president. their base is clearly very unhappy. >> the markets were up early this morning and then down as other information came to investors regarding the economy and manufacturing. in terms of the political reaction, is there a chance that the house would reject this proposal? or would enough house

republicans and democrats come through tomorrow to see this through? >> there is a very small chance that it could go down in the hat -- in the house, but it is a very small chance. between speaker boehner giving his strong support for this and a number of house democrats i have already heard from supporting this, it is hard to imagine between the two parties that they could not find the votes they are going to need. i do not think that they will have much difficulty. the votes could conceivably be closed, although many members simply do not want to vote for it. you know, this deal is actually very similar, you've argued, that it is significantly better for republicans than the original bill that the speaker

wanted to put on the floor before he had his result over the budget amendment. he probably had close to 200 votes without a balanced budget amendment. now he has a guarantee of $1.20 trillion in cuts. that would seem to be a better deal. we will just have to see. but i do not think they will have that much difficulty. >> the headline, congressional leaders and the president reached out on the debt deal. one of the procedural questions was about the so-called 30-hour rule meaning that the senate vote could take place tonight? >> our expectation, and we have not spoken to all 100 senators, is that the expectation is the

opponents of this package will require a 60 vote threshold but not 30 hours. i do not think that any senator once those headlines tomorrow with them being for default. we had a similar situation a few months ago. they had a deal on a stopgap spending bill. any senator could have shut down the government for 30 hours, but none of them did. shutting down the government a few months ago, why would you necessarily force people to the fall for the heck of it? >> we have been talking to you a lot. i wonder if you can put in a capstone in terms of the mood this monday after all of the back and forth, news

conferences, releases, meetings at the white house, sessions on capitol hill. what are you hearing out there today? >> this has been such a contentious time. there is just a sense of exhaustion and relief in that it is over. and they would like to feel not democrats and republicans as being the ones coming to a close and that they can move on to other things. a lot of folks in congress have all sorts of under -- other agendas. there is a long list of the country's pressing needs and problems. the debate has ground everything else to a halt. they are happy that at least a resolution has been reached. that there will not be a default

crisis hanging over our heads for the next couple of years. there is a sense of folks saying that even if they do not like the deal, they are happy to have some sort of resolution. that does not mean that there will not be partisan wrangling over this new joint committee, by the way. democrats saying they will insist on revenues and tax increases with all of the republican saying that that is impossible. this will probably be a huge debate for the next year and a half. i would not be surprised if that trigger is attached to the committee in terms of cuts in defense on medicare. the interesting part of this deal, probably the thing that makes democrats most happy, is

that most of these do not take effect until january 23. then you go into the election saying -- hey, republicans were not going to cut a nickel out of the wealthiest corporations. they think that that is a political fight that they can win next november. >> the debate, beginning as they set the stage for the presidential races. stephen, joining us from the senate side of capitol hill, available online, as always we appreciate your time. let's go through the highlights of the package. by the way, this information is available online, c-span.org. the debt ceiling will be raised by $2.40 trillion in two phases. there is $1 trillion in the

fence and discretionary spending cuts over the next decade. a congressional committee, what is being called a super committee, is to find another $1.50 trillion in cuts. equally divided between democrats and republicans. if the committee fails or if congress fails to act on these recommendations, the legislation requires an automatic $1.20 trillion spending cut across the board in 2013, requiring the house and the senate to vote on the issue of a constitutional amendment. again, the senate will be convening in less than one hour. we expect the house to gavel back in at noon. we are keeping a close eye on these party meetings taking place. this is what one of the views looks like. we will hear from congressional leaders later.

joe biden, meeting with house democrats at noon. senate republicans are also meeting at this hour. "washington journal" continues. larry kudlow, cnbc's "the kudlow report." he joins us from new york this morning. what is your big take away from this whole debate and everything that has been going on the last few weeks? guest: you are witnessing a real change in the policies regarding spending and borrowing. we are moving into the era of smaller government. the magnitude of this bill is not as great as some would have preferred. we need lower spending. the direction is unmistakable. i think the debates of for

continuing resolutions. the debt ceiling debate is unmistakable. washington will spend less and borrow less. can we grow the economy and create jobs? that will be absolutely essential. host: u.s. stock futures are jumping after a deal has been signalled to reach the limit after tomorrow's deadline. what do you make of that and what the expect the market to do today? guest: our market opens at 9:30, and it would not surprise me if the dow were up 150 points. the big relief is no debt default, which would have been catastrophic in some sense. it would not have been a good thing. it begs the question, moody's

and s&p rating agencies will still look at this deal. will there be a downgrade of u.s. treasury debt from aaa to aa? we do not know that yet. my suspicion is that it will not be. the markets will react to this with bleach into relief. the u.s. economy will be part of the story. host: does the market shift now, looking at other factors in the economy? guest: the jobs numbers come out friday. that is going to be a big number. it virtually has been a jobless

recovery. it is going to be a big issue. we have the gdp report friday. the first quarter was revised down to 0.4%. we were in a growth recession the first half. that is a poor performance. i like to be as optimistic as i can. i do not think we are going into another recession. the second piece of good news is companies have recovered from the meltdown of 2008. they have a lot of cash and cushion. there is no real risk taking going on. the expansion going on. we have to grapple with those issues.

host: what about the deal between the president and congressional leaders to raise the debt ceiling? and cut any debt? guest: they will slow down the rate of increase of debt not cut it. the most important years are 2012-2013. i do not know the details of what the appropriations committees will do. judging from the congressional budget office, it looks like $25 billion and lowered the spending otherwise than what would have been the case in 2012. maybe 45 billion in 2013. they will be capped in the discretionary account. i would have preferred it doubling. it is a downward direction. that is better than nothing.

i felt the paul ryan budget about 6 trillion over 10 years. i thought it was some shock therapy that our budget process needed to get it on a smaller growth path and give some relief to taxpayers. get rid of the deductions, flatten the great. we need a regulatory moratorium. i think we need a strong dollar. one of the biggest disappointments in this story and the oil shock, food price shock. much of that comes from the dollar that has dropped 10 or 12% and shows no sign of recovering right now.

whinnied pro-growth economic reforms. -- we need progress and economic reforms. host: take a look at some of the plans. let's go to the phones. pam, minneapolis, in the pan and line. -- independent line. caller: i live in independent

living for seniors. a lot of us are frightened about what is going on. we are wondering what is going to happen from here. host: what concerns you? are you worried about social security check's not going out? growing debt? caller: [unintelligible] not having enough money to live on. what bothers me is the stubbornness of both sides. i think obama was backed into a corner, because republicans said we will not budge or increase taxes. i do not think obama failed for

this. i think he was back into a corner -- backed into a corner. guest: the process worked itself out and always is a difficult process. the tea party back born -- backbone is a very important movement and is not going to go away. they are representative of the new movement in american politics. they want smaller government, lower spending, lower taxes. this may be the best deal that could have been worked out at this point in time.

we are at a great national debate. it is a very important debate. what is the role of government. what do we want the united states to look like in the next 10 or 20 years? do we want to risk the type of ramifications seen in greece, or do we want more free enterprise economy? 31 greater rewards for small business? the tea party want smaller government and the private sector not the government to be in the driver's seat. here is a comment from twitter. guest: windows bush tax cuts

expire, we will have at least $3 trillion drain from the private sector going back into the government and marginal tax rates across the board for all income categories. they will go up. i think it will have an extremely negative impact on the economy. incentives will be greatly weakened. on the other hand, in this super committee embodied in the deal agreed to on the debt, it could have tax reform. i am a strong advocate of tax reform. if the bush tax rates expire but you have tax reform and you bring the rates down air and you have only two brackets for the

middle income that would be terrific tax relief and would be very pro-growth and create a new incentive. at the same time, a lot of the across the board deductions would be eliminated and would help finance lower marginal tax rates. overall, pro-growth tax reform would balance the budget or reduce the deficit. i do not want punitive taxation. i want a fair system that is simple and has plenty of incentive. we will see if the super committee will go to tax reform. host: tampa, fla., welcome. caller: it seems to me that the politicians are way too worried about their next reelection, rather than actually doing the job they are there to do.

it seems to me that all this bill does is take as down the same road again. we will still being $18 trillion in debt. can this be beneficial if we have not slowed down spending all that much? guest: i think i agree with where you are coming from. this is a small step. but i think small steps are important. there is a shift in the direction going on right now as a result of the new congress into a new house. i think it is a good thing. in terms of kicking the can down the road, the reality is we are

not taxing the entitlement reforms. i do not know the debt ceiling bill would have been the appropriate spot for that, but we will have to figure out the social security plan we have, the medicare plan. put more market choice and competition. whatever the details are, i think ryan is right. do we want people to have investment options in social security? what is the right level of taxation for the programs? what are we going to do about medicaid and put pressure on states for financing? we need that conversation. i thought a commission was really splendid. it did not have every answer but

put a lot of important options on the table. we will have to go through this exercise again. the house and senate will pass it. we still have the 2012 budget. we still need a continuing >> house and senate leaders will reduce the budget deficit between 2012 and 2021 over the next decade. here are some of the highlights in a letter sent to speaker john

boehner. first of all, it would establish caps on spending through 2021. it would make changes to the student loan programs. the senate would be required to sign a joint resolution. it would also create a commercial joint committee for deficit reduction. proposing further deficit reductions with a goal of achieving $1.50 trillion in budgetary savings over the next 10 years. finally, the establishment of these automatic procedures if the legislation originating from the subcommittee does not achieve. that is the so-called trigger mechanism in place as a part of this deal worked out by mitch mcconnell and john boehner. right now it is approaching

in washington. there is a meeting going on between joe biden and senate democrats. there is also a meeting going on on capitol hill. we are told that the vice president will travel to the other side of the capital. following that meeting the vice- president is playing a key role behind the scenes by a meeting with mitch mcconnell at the white house and on capitol hill. we will have coverage of that. we know that john boehner and eric cantor will be meeting with reporters at 1:30 eastern time. on c-span 2 we will have the white house briefing getting under way at 11:45 eastern time. the house of representatives will be in session at noon. the debt ceiling, in essence, is what congressional leaders have agreed to.

a $2.40 trillion increase. $1 trillion in cuts over the next 10 years. the commercial committee will find additional cuts. congress will have the ability to vote on a balanced budget amendment. 10:35 eastern time, nothing on the president's schedule. we are told that he is holding a series of closed-door meetings and working the phones. pretty much guaranteeing 60 to 70 votes, saying the speaker guaranteed 150 votes. that was this morning. senate caucuses, we know that the house will vote all of this first. the senate has a 30 hour rule.

it would appear that they have waived that rule. the house could vote sometime tonight. or tomorrow. tomorrow is the deadline. set forth by timothy geithner mayor, promising to act on the debt ceiling. we will take you back to the floor of the house of representatives for additional business as events unfold. we will bring you the briefings as they happen. this is all available online at c-span.org.