everyone has skin in the game and half of the people who pay no income taxes at all don't have skin in the game, yet they want stuff from the government. that just is. so when you are talking about whether the rich are taking advantage of the system, you owe it to everyone listening to you in the country, many of them admire you congressman saying he's not being fair. when you say the rich has to do more, you have to acknowledge the fact that more than half of the people in this country don't pay and they have to do more. >> everyone has to do more. but people who afford to do more should do more. >> i think spending ought to be cut. >> hey, 70 percent of the taxes. i think they can rightly say we are busting our ass. quit squeezing us. >> are they making 70 percent of the total income. they are doing well. >> charge more for the honor of doing well.

>> no, i am saying that in order to bring the deficit down, we need to spend less, and we need to make >> address the spending, sir. address it first and get that under control. >> no. @ same time. >>reporter: do it first . continue that mirage. that's not progress, congressman. that is a joke and that is what has us on brink of financial collapse. >> do you think, neal we should subsidize big oil. >> no. i don't believe it. >> good. >> but what i believe in. everyone has skin in the game and your plan has take skin from the few percent who could give more . ignore more than half that don't give anything. >> no, not at all. >> i said both have to be done in the same time. >> no, you didn't say that, congressman. you left it alone. >> i have said that a lot.

>> congressman i like having you on. you infuriate. >> the feeling is mutual. you infuriate me. >> we'll have more after time

house speaker jone boehner not agreeing to more . standard and poors threatened to downgrade the country's rating. president obama accusing them . one of the guys making that decision will be here . gang of six members telling me we will not default and we will pay our debt. he and other top gop leaders

insist that the president and leaders playing a dangerous game of hard ball. chris turner has been up part of the night working her sources. what are you hearing right now. >> at the moment, i think the best thinking i can offer you and your viewers most republican aids think we will walk away with all of this a short-term extension of the debt deal. the president will not accept 30 60 or 90 days. but they will have to buy them time. what you are seeing right now, everything is spilling out all over the place and so messy, they will chem to a realization that they need to buy time or they need to get realistic about the cuts . shrink the size of the debt ceil match the spending cuts. but we are headed to a short-term agreement maybe six months or longer. but i think that is where we

are headed. >> they are trying to jump. i think you are scored in the political ways than i will be. they are trying to jump the one venue. the financial community. and broker it ahead by monday morning. if there is a debt downgrade we'll have a huge sell off and they don't want that, right. >> that's right, neal. the reason my blackberry is full of republican aids saying we are not going to depefault. stop being so hysterical. everybody is talking calm. we are not defaulting on the debt . that's why you will see on the very least more talk about short-term extension. that calms people down and reassures them and they are not going to default and they are working toward a deal. >> real quickly. when the president not making that august 2nd is equivalent

to defaulting, they must get angry because that is wrong, right? >> it is unclear, right. certainly the ratings agencies are up here and briefing members. i never heard of that . it is extraordinary and the chamber of commerce is applying pressure and the members are getting pressure from all ends and i think what we are hearing the speaker say, look. we might not understand what is going to happen, but we are in unchartered territor yeeveryone is saying we are running out of time because they don't know what is going to happen. i would take exception that they didn't know something would happen before august 2nd. everyone is talking about that. markets could react and react much sooner. i have been in several briefings with the senator from new york who is in touch with wall street . they warned us we might get to august 2nd or july 25th and the marks may react.

we don't know. unchartered territor yethey need to get a deal on something. >> chris turner thank you so much. we'll go back to our freeze frame shot, gary, you still have that. speaker boehner was drinking tea. what a great metaphor. the president dissing a tea party. was he making a another statement. what do you make of the talks. >> they are unfortunate because the talks should be occurring on the senate floor and house floor. earlier this week. house of representative passed a cut, cap and balance act that contains an addition before we raised the debt limit. it was passed with bipartisan

report and should have proceeded in the senate . then an amendment processed and if it was subject to an amendment process it could have passed the senate. why is it a good idea to break off a few members or four or five and negotiate it behind closed doors in the final hour is beyond my ability to understand and beyond my ability to understand why the one legislative proposal that would have addressed the issue couldn't come up for a up and down report. >> cres turner is right on capitol hill that they are going to coddle together a temporary deal to keep the lights on so to speak. what would you think of that it is unfortunate. we don't know what will happen. this is a ticking time bomb of sorts and if the market jets

jittery and react negativity and look back and said we could have averted it and allowed thing to move through congress and debate and negotiate and amend as members of congress are supposed to do. the process was short circuited and taken over to 1600 pennsylvania avenue and countless talks have failed in the same series and at the end of the day, this problem is not fixed whether a short-term extension. it is all short term when you think about it . until we structurally and -- i explain in my book. we can't do it without a balanced budget amendment, this process is not going to be fixed and we'll be back to the same well every few months. >> it is a good one when you can work your book into it. >> that is good. >> i thought so. >> senator, thank you very

much. white house battling the republicans over the debt report . standard and poors may downgrade our credit rating sooner than later. here's the big say. he's the credit analyst . what do you think, david? is the administration seems to set its sight on you guys for potentially moving sooner than later . what do you think of that? >> they are entitle to their opinion and we have ours . when is how are we getting the debt ceil changes in the underlying fiscal policy of the country is going to be as part of that deal. >> would you move prior to august 2nd. that would be unusual and you would wait for the deadline or would you? >> if we thought that there was a material chance that the u.s. government would default

on its debt we would have to move. it is not just about the debt ceiling, we think at this late hour, some agreement will happen where by the debt ceiling is increased . what we are saying all along is there an underlying issue and increase in the debt burden of the u.s. government and that's what we are looking to see if an agreement is possibly to change the rising conjectory of rising u.s. government debt. >> there is a lot of critics. no offense to you. you didn't see the last melt down coming and see what is going on in real estate and who are you to lecture anyone. >> we are not lecturing anybody. our job is to provide an opinion on the governments that we rate and the u.s. government is one of them. >> your opinions have been wrong before? >> i think our critics are not

familiar with our tract record on and that is good . you know, in terps of the job that we do which is to relate our rating to a default risk. >> we talk about the threat. it is always out there and quite right to say it is out there. attention investors and moodies . i like to think that it is a whole other leap to do it and everyone is linked to s&p 500 and they led to potential armageddon. does that ever come in to play. >> we have lowered sovereign governments with ratings before. it is the u.s. . we rate 126 other government downgraded japans. >> but i said this is the united states. >> i got it, it is the u.s.. we are a global eamings and we take a global view and we made

our position very clear. we compare the rising conjectory with the u.s. with other triple a sovereigns that we rate and observed many times that that conjectory is, that gap is opening up. >> understood. >> and it will continue to open up until the government changes the fiscal policy. >> you are saying you don't have to wait for august 2nd for a potential downgrade and that is not a factor here and things look like they are going no where fast and nothing looks fruitful you could decide way prior to august 2nd on a potential. >> yes, we could. >> monday morning. potentially, this is a fast moving story. with remaining twists and turns. we made it clear in our public statements that we could potentially move before the end of the month.

>> monday morning; is that possible? >> i can't beyond that. >> 8:29 or 9:29. >> you will be one of the first to know. >> thank you very much for coming. that is very, very interesting. prior to august 2nd. you could see the u.s. downgraded and i have liz claman joining me and tobi smith . adam,i am sorry it is one of these. what do you think they could move to prior to august 2nd . david berse is correct and a lot of s&p 500 people telling us. at fox business we are asking when could this happen? they don't have to see a default before they will downgrade our debt. >> would they do it and david is a good guy. we do it with japan and sovereign governments. the united states is different and you know the agency

responsible for doing that. they would trigger what would be financial panic. >> they can't look at it that way. they lost credibility in the financial led up to the bubble and explosion. they have to tune all of that out and potential of massive market gyrations and the bond and the u.s. dollar and stock . everyone is worried about the 401 ks and does it line up with what constitutes the need for a downgrade of the quality of our debt and how we run this nation fiscally and economically. >> adam, we had the guest on earlier that was saying yes, focus on stocks and focus on the treasuries. the panic of treasury markets i guess. or big auction august 4th . so that interest rates sky rocket and all hell to be paid. is that a great are concern

what uponed in the treasury market. >> it is one of several of the greatest concerns it was fascinating the way you were pushing him but this is the united states. he's used to situations where government's can't make their obligation and this is a situation where the government is saying it will not make its obligation if it doesn't reach the agreement. it is a fascinating and totally irresponsible one on the part of the politician that triggered an artificial crisis. we can pay the debt and obligation and we need to raise the debt ceiling. there is no need of immediate crisis being triggered and s&p 500 said you are telling us that there is a possibility that you will not be able to do this . so the treasury situation that charlie is talking about is one of the crisis that we could face if we don't resolve it quickly. >> in the fall of 08.

congress rejected president bush's first tarp request to rescue the banks. markets led for change and talk at the time. and the bond market . if this doesn't come true . it will form a speedy and faster decision . is that the right way. who knows. starting tomorrow. i got off of the phone with tony . he is a bond genius. and the guy covered the bond markets and when will see cracks. >> tomorrow, early evening and the s&p 500 start to trade and asian markets open hours before ours do. watch for the futures trading

and so we might get indthat there is real concern about the lack of decision or a lack of clarity on the debt ceiling issue. >> the only market that was up saudi arabia up five percent and they are in a different world i know it is hotter there than it is here. >> barely . is there a sense, but adam is there a sense that you get that you get that wall street is sort of whistling past the grave yard. we were up with 200 points and showing the last month and stuff that is aggressive and we are okay . so assume a deal is done or don't care or what. >> i think what it is, they have ascribed a low probability to a deal not getting done if all of those negatives make sense. there is a consensous that no

deal means financial armageddon for the bond and equities market. but at this point, because everyone believes that. there is still a confidence that something will get done. i am confident it will get done if you think about the reporting. >> i will go the other way. you are confident and i am going the other way. >> i will not take that personally neal. >> liz, you talk to top money folks all of the time. is it their sense as awful as we are with our financial messes that they look at greece and italy and spain and portugal and ireland and say you know what, compared to them. >> we are held to a different and higher standard here in the united states. it is a different feel. you talk to politicians have one belief and everyone is digging in their heels and some saying we don't need to raise the debt ceiling and

others say not . every ceo. we have to deal with this and raise the debt ceiling. honey well and terry mcgraw hill . different businesses all saying this is extraordinarily serious. yesterday the caterpillar ceo said to get dealt with. it adds to the uncertainty of doing business. if we get downgraded or default, our credit is not high quality. like your score going down it costs more to borrow oney and that hurts business. liz, thank you for coming n adapt only joking about going the other way. and we are debating the whole triple a thing. why america no longer rates period? sweetie i think you need a little extra fiber in your diet.

carol. fiber makes me sad. oh common. and how can you talk to me about fiber while you are eating a candy bar? you enjoy that. i am.

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it would be me winning a national fitness award. i wouldn't deserve it and we deserve look at us. trillions in debt and we are still spend even on the brink of insolvencey in a crisis. politician still peddling. a trillion dollars in gimmick cuts that don't matter and they promise the fiscal discipline. is this the consequence of a triple a power or report. you decide and let me report. you decide on a country that can't agree on minor cuts and the growth of spending. you decide if the trillions that spent and you decide whether bail outs that don't meet the grade get the top grade and rescues get top

billing and you decide if it is debt to all and has a great above all. you decide and whether a nation turns in the

what does this shot tell us? in body language terps, something that is tainto . rude. does that tell you that he is not going to listen to the president or that he's had it with the president? after all it was john boehner who decided yesterday that the talks are so fruitless with you mr. president that i am bypassing you mr. president. i will deal with harry reid and the other guy sitting on the other side of the president . in this environment when the two sides are that suspicious and angry at each other and mad at each other can we express surprise at all why we don't have a deal and the world credit markets think that we are a joke? we'll be