>> steve: speaking of good stuff, we'd like to thank you for playing today and, of course, the famous dave's for the barbecue. >> thanks for the barbecue. >> gretchen: they're going to play more in our after the show show, so log on! have a fantastic weekend, everyone! bill: what a morning this could be. debt on the doorstep on is a compromise on the brink? house republicans may try for the third time to pass the debt ceiling vote. republicans falling short of the necessary vote late last night. now we are look for another round of closed door meetings on capitol hill, and here we go. the mac attack is back today. martha: it will be an exciting morning. it's wonderful to be here. we are four days away from what we are told is the default

deadline on this thing. we are getting word that things right now are nowhere. it's intense between the leadership on capitol hill. the failure to pass speaker boehner's bill has had a huge ripple effect. bill: boehner says he still has faith in his plan. >> never received it was perfect. -- i never said it was perfect. nobody in my caucus thinks it's perfect. but a sincere, honest effort to end this crisis in a bipartisan way to send it to the senate to receive action. where are we now? sir, good morning to you. you were a no vote yesterday. are you a yes vote today? >> i'm a no to speaker boehner's

bill in its current form. i emphasize in its current form. if there is something add to the speaker's bill that is transelection cycle systemic i would embrace it. bill: what has to change for to you go into the yes column? >> the 75th time we raise the debt ceiling has to be the last time we raise the debt ceiling. i can go back to the people i work for and say we accomplished something despite having one-third of government. i think the speaker has done a remarkable job. i can't vote for something that is not transelection cycle and transformative. i need a balanced budget, i need something where i can look at the people i work for and say we are not going to have this conversation in america again. we solved our addiction to

spending. bill: i was given a note an houring a that you are a yes vote if you get to the changes and you predict passage today. is that accurate? >> we made a lot of progress last night. i don't know who passed you the note. i'm a no to the bill in its current form. we made progress last night. and i think -- i don't speak on behalf of anyone other than myself, i don't speak on behalf of the south carolina delegation. but we want to get to the place where we can support the speaker. bill: you are a freshman, you are not a member of the tea party caucus, and there are many from the state of south carolina who are. what did john boehner and eric cantor say to you last night? >> it wasn't them talking to us. it was a conversation. the speaker and the leader have been phenom ma'am through this process. they know south carolina is a

conservative state. they realize that. so if they want the five votes in south carolina they will have to give us something that is closely approximates cap, cut and balance as they can. i have to have something i can go back to my state and say the 75th time we did this is the last time we did it. bill: the south carolina delegation have been holdouts. thank you for your time. martha: it's fascinating. they are saying south carolina against the world is the feeling in the house of representatives. it is remarkable. that's the group that went in and prayed together over this decision. one group of house gop freshmen say they are supporting the boehner plan fun it gives them a bit of quote heartburn. the tea party house members say

they are disafoinltsd with the bill but they will not go against the speaker. here is wisconsin congressman sean duffy. >> is this as big as wanted to go? heck, no. we ran and going bigger. but this is the only proposal on the table that accomplishes the goals we set out to do. martha: that defines what's going on. duffy says he will vote for the bill because he believes it's the best one out there. bill: if you were able to follow everything last night in the house. in the senate some conservative republicans are not supporting the deal boehner has on the table. kentucky senator ranlds paul talking with sean hannity ex -- nor rand paul explaining why he would vote against the boehner plan. >> it will add $7 billion to the debt. it doesn't change the course we

are on. if we froze spending. if we didn't spend any more money next year than we spent this year. washington would count that as a $9.5 trillion cut. why? because we are going to add $9.5 trillion to the debt. when they tell you they are going to cut a trillion, it's from proposed increases in the debt. it isn't meaningful. bill: paul says there are perhaps as many as 14 republican senators who will vote no on the boehner debt deal fit makes it out of the house. martha: it has been a tough week for investors if you looked at your 401k or the market. the dow has been down for five consecutive days losing nearly 500 points. that's a decents chunk. that's almost 4% of the market value for the dow jones industrial. it puts it on track to be the

biggest weekly loss in more than a year. and there is more bad news on the economy. let's bring in stuart varney. the gdf number pretty ugly. >> there is no panic selling because of the debt mess. but there is going to be more heavy selling because of these terrible economic numbers. the economy is barely growing. up 1.3 percent. that's all we have got. if you go back to earlier in the year, fresh government figures show there is barely any growth at all. so as of this morning we are not on a track towards a solid recovery for the under lying recovery. we are on track to go towards a recession. the result? the dow industrials will open at least 100 points lower. that's not panic selling or the debt mess. that's the economic mess. but here is the interesting parts. interest rates we thoughts would go up because of the debt mess

this morning, interest rates are going straight down. so there you have it. on the markets at least the bigger news today is the bad news on the economy. martha: it feels like that remains the big story. that what investors are looking at here. it's almost like it's noise coming from washington. they want to know what s ann p and moody -- they want to look at s & p and moody's. >> reporter: invest yrs say we think we'll be downgrade. we don't think we'll default on our debts. wore very worried about the economy and the trend in the economy. that's coming to the surface today. martha: what about in terms of the next few weeks? what is the outlook for corporate earnings? >> reporter: corporate profits are very strong.

companies are making more than half their money overseas. that's where the growth is. that's where the profits are coming from. here in america we are sliding maybe towards recession. but corporate profits are still from overseas. martha: that's the bigger story. thank you so much. bill: some people think we never came out of the recession in the first place. we have got an important lineup of guests throughout the morning weighing in on the debt matter. first we heard about a possible plan b. is there a plan c? we'll ask republican senator jon kyl about that. neil cavuto is here. the democratic congressman who says the president will have to push for a clean debt ceiling vote in the house if we see no deal.

does that have a chance? martha: those are a few of the stories. we have a lot of angles on this story of we want to cover for you in america's newsroom. but there are many stories we are covering outside of this. there are other things we want you to know about. where is presiden -- where is pt obama on this issue? a huge story from peggy noonan we'll get to. juan williams will weigh in on how he thinks the president is handling this. bill: are you a hobbit or a troll? republicans caught up in a nasty name-calling game 15-minute with john mccain has that has tea partyers like sharron angle all fired up. martha: it's also shark week. we'll take to you a hot spot for great white sharks, folks.

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bill: a fox news alert. in one hour president obama will talk about this debt matter. the critics say he has been absent from a big responsibility. here is senator john mccain with gretta on that. >> the president of the united states is elected to lead. the president of the united states has been not only active in the process but led in the process. that's the job of the president. bill require's juan williams.

author of the brand-new book muzzle. the assault on honest debate. check that out. you and hannity last night were signature on each other. put a cage between the two of you. what do you think about john mccain. has he abdicated his responsibility? >> john mccain hasn't, the president arguably has. the argument coming from republicans is the president should have put something on the table. there is no plan from the democrats in the senate or from the white house. the president has been negotiating republicans in good faith. republicans, eric cantor in the house said there were two trillion in cuts on the table. the relationship cans stay write out the plan and put there it so you can be subjected to scrutiny. bill: a week ago he was taken out of the negotiations and members of the congress said we

could probably get a lot more done with each other than with the white house. >> from a purely an polical point of view is boehner walked away from president obama. john boehner felt what was going on with the white house was jell-o. they kept moving around their offer that was on the table that was never fully written out and presented to them. they would shift in terms of how much tax revenue they were requiring of the republicans to make a deal. the white house position is, listen, you guys are not willing to negotiate in good faith and guess what? because john boehner can't get his troops lined up behind him -- bill: the white house strategy for weeks was to use the bully pulpit and it has not worked. kraut hammer writes this today in the "post." obama is desperate to share ownership of his failure. if the republicans play along,

the perfect out. those crazy tea partyers ruined the recovery. blame them? >> i think charles krauthammer, and senator mccain has said it's time to make a deal. right now the republican party is in a position whereas we approach this four-day deadline, august 2, the republican party looks in the polls as if it's subjecting itself to the greater share of the blame. by right now politically heading towards 2012 you have got to ask yourself why wouldn't republicans who have pushed the democrats to the point where they are fighting among themselves. why wouldn't they claim victory? bill: you brought up 2012. 41% want president obama reelected. that's down 11 points since the month of may. how much is this crisis hurting him? >> i think it's starting to hurt them all.

yesterday rasmussen had the approval rating for the congress at 6%. it's never been lower. the american people are saying throw these bums out. we are sick of these guys, they are not leading. thebill: the republican freshmae heard out of south carolina. you may get significant movement today. >> for john boehner his whole career is at stake. bill: congratulations on the book. what does the new possible debt limit mean for you? at our web site foxnews.com, click on the debt calculator link. you can enter your annual gross income. tell us what you're share of the federal debt would be. and you shall be stunned to hear the predictions. there you go. martha: we have chilling details

in this alleged plot to attack fort hood soldiers again. we are hearing from the person who raised the red flag about the suspect and may have prevented another national tragedy. >> the first red flag was the question about the powder. if you don't know what it is, why are you buying so much. labored breathing ]

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bill: it was around midnight east coast time when we found out there will not be a vote in the house on the current boehner bill. now the house is in recess. the republicans will get together behind closed doors in 8 minutes. also 30 minutes from now a freshman republican tea party member from the state of south

carolina who has been a no from the beginning will be in our program and we'll find out whether he is a yes today or not. stay tuned. martha: this awol soldier in a texas jail at this hour is awaiting federal charges of an alleged plot to kill american soldiers on u.s. soil. this as we are learning where this came from. a man in a gun store alerted the police that he thought this soldier was acting suspiciously. listen to what this man says. >> i spoke with one of the lieutenants down there and expressed my concerns. and i prefaced it, i didn't want to be a nuisance to them, but i felt uncomfort and with this kid's demeanor and thought it would be prudent for them to at least know about it. martha: that man did exactly the right thing this case. kris gutierrez is live outside

the jail in texas. where is this suspect this morning? >> he's being held in the kileen city jail behind me. this morning we are learning new information about that alleged plot. the information is coming to us from texas congressman john carter hotels us the alleged plot includes setting off at least two bombs in a crowded restaurant. a restaurant that would have been packed with fort hood soldiers and their families. and as people ran for cover allegedly ab -- o wanted dabdo wanted to shoot at them. he didn't aallegedly attack fort hood because he wasn't familiar with the army post. it spans 350 square miles.

we should point out that ab - ao requested and obtain conscientious objector status. >> i don't want to deploy -- >> reporter: he was arrested on a warrant out of kentucky for allegedly having child pornography on his computer and now faces bomb making charges. martha: what are the people in kileen saying about this. >> reporter: i spoke to a retired sergeant from the u.s. army. he was at fort hood when nadal hassan allegedly opened fire and killed people at post there. he tells me this community

really got lucky. listen here. >> every american has to be aware that these kind of people are around. they are just as vigilant as the most village lent of us. and -- they are looking for opportunities. >> reporter: he tells me his concern moving forward is who or what is next. martha: great work by that man. when you feel something isn't right. he did exactly the right thing. you want everyone to be that responsive. bill: in new york they drill it into your brains every day, see something, say something. bill: just when you thought it was safe to get back in the water, there is this. >> nothing is more terrifying than the thought of being bitten by a great white shark.

we think of great whites as living far out into the ocean distant from people. it make us feel safe. but nothing can be farther from the truth. bill: i feel better. it's "shark week" at the discovery channel and now it's in hd. martha: so many plans. there is so little time on this whole thing it's make our head spin. we'll be joinedly jon kyl who has been there a long time. we'll get his assessment on how this will all end up. premiering the revolution by lg.

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martha: we are awaiting a house gop meeting. the members are going to get together at the top of the hour, put their heads together after a very rough night last night. so let's go over to the senate side and take a look at this. south carolina senator lindsey graham sat down with gretta and here is his take on all of this. >> we haven't taken the case to the american people. we have had behind the scenes negotiations that ended and everybody is look around with the august 2 deadline. let's get some time to construct the balanced budget amendment and cut and cap program and take it to the american people and see if some of our democratic colleagues will acknowledge if you raise the debt ceiling we

are going to become greece. martha: let's bring in arizona senator and minority whip jon kyl who was in on the earlier negotiations. always good to have you with us. good morning, sir. you know, lindsey graham was very interesting when he was talking to gretta. i'm curious what your thoughts are on this. he we need to put something in this deal. it has to say that contingent upon it is addressing the balanced budget amendment and taking it to the states and seeing if the states would indeed agree to some kind of balanced budget amendment. as part of this deal. what say you, sir? >> my colleague lindsey graham is always interesting and i don't equitable with his desire to get a balanced budget amendment passed and the need for the american people to express their will to members of congress about it.

they overwhelmingly support a balanced budget amendment. my problem is my democratic colleagues in the house of representatives say no to a balanced budget amendment and we have a deadline approaching of tuesday. so i'm not sure how realistic it is to demands our democratic colleagues that they change their position on a balanced budget amendment. it may take a while for american public opinion to persuade them to support a balanced budget amendment. martha: it feels like from conservatives if you don't get something baked into a compromise that forces this discussion to happen within the next three months. that all will be lost basically for any gains that the tea party might have gotten in terms of putting this whole issue of this nation's debt crisis on the map and basically it will be seen as a democratic victory and will pave the way for a presidential

victory as well. >> this is why it many important for those supported by the tea party -- i have had a lot of support from tea party folks in arizona to think realifically where we are. -- to think realistically where we are. we can't dictate the results. the republicans only control the house of representatives. the democrats never having come up with a budget, never having passed anything out of the senate have been in the position of saying no to every republican idea. the question is what can be crafted that senate democrats will say yes to? they are half of the legislative equation. then you have the president in the white house also a democrat. so my tea party friends, i'm sure appreciate this. we don't control the government. conservatives are not in charge. and therefore we are not going to gets exactly what we want. we have to craft something that leads us in the right direction. one thing about the boehner approach is it does put in a

couple ways forward after achieving the immediate savings. it doesn't concede the debt kreeling will be raced through the next election. it says that's depend dent on a committee moving forward for additional savings and what they might have decided last night, though we'll see, is to add something about the balanced budget into that equation. if you add that the balanced budget amendment has to pass, that's a bridge too far in the senate. martha: there is an indication from capitol hill that the creation of a plan "c," a compromise deal that harry reid and john boehner and mitch mcconnell can agree on is no longer happening this morning. is that your understanding or, you know -- are things shaping up or falling apart? >> don't read too much into

people talk or not talking at a particular time of day. there are always conversations going on. and the media tend to put it into sting categories. the talks occurred, the talks are off. it's not quite like this up in capitol hill. you bump into people in the hallway and you talk for a minute, then you make a phone call to somebody. things up here happen differently than in the sort of rigid way people think. martha: i want to know what your take is. you have been there a long time. you are retiring after this term. is your gut telling you this is didn't this time? are you feeling there is going to be a deal? and if so what is the time frame on wit many going happen? >> my gut tells me we are in a different position we were in a week ago when i was optimistic that we would avoid the august 2 deadline. but i'm less optimistic.

the democrats on the senate side said we'll oppose it no matter what it is. that does not inspire confidence that they will agree to anything. martha: there is senator harry reid and moments ago while we were talking to senator kyl, harry reid said the boehner plan is flawed. we don't know how much we can read into that this hour. senator speak on the floor. bill: all the sharks are out on the hilda. they are lean, they are mean, they are eat magazines and they are coming in -- they are eating machines and they are coming into your homes this weekend. the discovery channel bringing us as close as we wants to get to the great white. >> curly stops feeding and heads right for the cage. she attacks the orange buoys,

the only thing keeping the cage from plummeting to the bottom with gregg and nick inside. then sheep gets trapped on top. 2 tons of great white breaks one of the bars and springs the door open. gregg struggles to choice. curly slams down on the weakened cage again and again. bill: and again. jeff, nice to see you. i think this is amazing stuff to watch. i have grown up with a phobia of sharks. and i think it's because when you get into that water -- what you can't see you have no control over and that's where the phobia manifests itself. but now it's shark week on discovery channel. you have technology like hd cameras that can take us to a place we have never gone before. how does that change for you in

your job? >> when we started 20 years ago, i have been doing "shark week" since 1991. the cameras were primitive compared to what we have today. the cameras shoot at 1,000 frames a second which slows down a 1-second attack. the way they bite seals and fly out of the water and use their body. bill: what can you learn from that? you think this is an education for us. >> filming sharks and seeing them in this detail tells you how they hunt seals. we found out they are learning how to hunt seals. they grow smarter as they get older. they learn where to launch attacks, when to launch attacks. people write them off as dumb fish but they are very intelligent. bill: one thing you were telling

me during the commercial brakes they are starting to hunt in more shallow water. this is the host and jeff is on camera. >> he's right in front of me. >> i nearly lost my balance. >> that is one big shark. >> the shark is swimming straight towards me. it would have been interesting if i had fall in the water. bill: you think this shark story is a success story for biologists. how so? >> you hear how sharks are being overfished, 70 million a year being taken out of the waters. by great whites are increasing in population close to our coastlines mainly due to good management. they are being protected. their prey source is being protected. but don't be afraid with that.

because they get along with people pretty well. bill: jeff, terrific to have you on today. you filmed all over the world for this. you can see sit on the discovery channel. it runs through august 5 which is the best day on the camera. my parents celebrate their 50th wedding anniversary on the 5th of august. martha: we are listening to who is basically saying the -- he's going forward with his own senate bill as things are stalled over on the house side. >> because it's the only option. something on table will never give everybody what they want. john mccain, the republican senior senator from arizona has asked this party to compromise. he did it here on the senate floor. he received it is not fair for the american people to hold out and say we want to agree to raising the debt limit.

he called the radical republican approach unfair and bizarreo. it's time we hissen to the markets and his to the american people and sit down and seriously negotiate. former senator fred thompson asked members of his own party to come to their senses. quote, i respectfully suggest you rake in your chips and stuff them in your pockets. that was his quote. he believes they already won. halt discretionary spending. no new revenue. i hope my friend senator mcconnell will come to me bits end of the day. my door is open. i'll listen to any idea that is done in a way that prevents a default and dangerous downgrade to our country's credit rating. time is short and that's an understatement. too much is at stake to waste even one more minute.

the last train is leaving the station, and this is our last chance to earn a default. a vote on this compromise will determine whether when earn the frightening world of default. a vote for the senate compromise. i ask my republican friends break away from this thing going on in the house of representatives. 9:30 they finally quit. rumors flying around, mr. president. the "wall street journal" said they put too much money in for pell grants. rumors they needed a balanced budget amendment. rumors the speaker was seen in my office. all these rumors, mr. president. it made no sense. and the scariest thing is late last night, leader cantor said from the house, he said, you have three choices.

boehner, cut, cap and balance or default. that's the second-ranking member in the republican leadership said that. we need to honor the financial obligations we have as a country. so a vote against a compromise that i talked about -- listen to what x compromise is, mr. president. no revenue, congressional budget office scored 2.4 trillion which will take us to march of 2013. it can do the country's business. there is a giant committee we set up to see if we dock to good work on a more long term approach. and get back to doing our country's business. i repeat, cbo, omb has scored our bill with $2.4 trillion.

dollar for dollar as the speaker says he wants to reduce the debt. so a vote against this compromise will be a vote to default on the full faith and credit of the united states. i repeat to everyone within the sound of my voice, we have the framework of a bill. we are going to change it. anyone has any other ideas, come to me. by the time has come to make a decision. time factors are very clear. there is no more time. would i like to wait until tomorrow to see if there is some goodwill that comes from the republican side? of course i would. but i would suggest to my friend on the other side of the aisle, this is a pretty good deal. as fred thompson said they have gotten everything they want,

they should put their chips in their pockets and walk away and declare victory. there will be no time left to vote on another bill and consider another option in the senate. this is our last best chance to preserve the character and credit of our great nation. >> our leader yield for a question? i thank our leader. and leader has outlined it well. martha: here we are, folks. senator basically stand and says, it is time for the republicans to stop worry being the fringe in their party. we need to get this business done. i would love to give it another day. but the deal on the table harry reid is saying has been scored by the cbo at a $2.4 trillion spending cuts. this is what republicans said they wanted all along. it would be a better than dollar for dollar exchange in the at the debt ceiling is raised.

raised. what you will hear from the other side is the $2.4 trillion cut includes money that has not yet been spent but was budgeted on the iraq and afghanistan wars and a number of things conservatives will say don't add up to significant real spending cuts. the concern for conservatives is as this bill moves forward other things will be tacked onto it once the house has to vote on it and they do a final conference on this bill, it's possible you could see things snuck in there that would lead to revenue increases as well. lots of speculation about what this bill would look like says time has run out. it's time for everybody to stand and vote for his bill. we'll see where this goes from here. this is a big development in many sways that was push by what we saw last night. and it brought us to this stage

of the game. let's listen to that sound bite we had from harry reid, then we'll talk more about this. >> the republican plan is not a solution. as experts say, all too soon we would be back in the midst of partisan rankling with our economy once again held prisoner by extremists in the republican party led by the tea party. martha: he's calling the pea tarty extremists. as you well know, he said several of the congressmen elected strongly by tea party support have said this is a difficult vote for them and john boehner did not get the votes he need to pass this bill, anywhere from 2-5 people have not come over to support the boehner bill. bill: one of the words he used was bizarro. that came from senator john mccain. it took a lot of heat from tea party members across the

country. sharon angle is one of them. she'll react to that. house republican members meet in private to talk about the debt ceiling bill. the house this recess for the moment. south carolina republican congressman tim scott will be in that meeting. he will be with us before he goes into that meeting. up to now he has been a no. will he change his mind? you will find out right after this. ma where do you go to find a busess backed by the superguarantee®? only& suonline.s®. on your phone. or in the book. go to superpages®. and let the good guys save the day.

>> the republican plan is not a solution. as experts say, all too soon we will be back in the midst of partisan raging with our economy being held prisoner by extremists in the republican party led by the tea party. martha: there you have it,

calling the tea party extremists. we are awaiting 10:00 a.m. meaning the capitol hill. you can see the live shot on capitol hill. very 10 this morning there. joined now by south carolina congressman tim scott. he is a freshman elected with strong tea party support. we do appreciate that congressman scott. good to have you with you this morning. it has been said that it is this group of south carolina congressmen versus the world. you are a very tight group. you have been holding firm to your tea party values on this. is there anything that's going to happen that is going change your mind and will this vote on the boehner bill go forward today? >> i hope we do have boehner 2.0. as the bill stand today i'm simply a no. it has everything to do with saving the american dream for the next generation. there is very little we are doing do that will pass on to

the next generation the american dream. i was born in a single parent household with a mother who had to work 16 hours a day at times. i'm thinking about her. i'm thinking about those who work at the factory 12-14 hour a day in the heat so their children can go to college and have a better future. martha: i have a couple quick questions. boehner 2.0, what would that look like to you? >> we have no balance. i'm hoping we have something thatter than currently today. i'm hoping for more than what we have today. whatever we send to the senate, senator reid already said it will be dead on arrival. so we to make yourer. >> in the strongest negotiating position. martha: are you thinking no matter what you send will be dead on arrival so that why you are sticking to your guns and saying it doesn't make any

difference. i want to be true to what the people elected me from south carolina to do so i don't care if the boehner passes. is that where you stand? >> what we do care about is our leader. we are very much in the corner making sure our speaker has the opportunity to have a victory on a bill that leaves the house. we want a bill, though, that is not only a good bill, but we need the best we can possibly have. no one like this bill. boehner himself said this bill has challenges. but the question we are asking is the senate has done nothing. the white house has done nothing and this is our second attempt. martha: you have got a lot of people out there, congressman boehner included and senator jon kyl and political thinkers like charles krauthammer who are telling you you are fighting the wrong battle right now. you already won this battle. you achieved something that has been never achieved before. there are no revenues added.

and you have made this ground, you need to sort of move towards the next election and think about what you can get in the big picture. why does not not hold any water with you, congressman? >> i think it does hold water. the on question is. you look at a & p and mood yims, the virtual certainty of downgrading our debt is the current plans we have on the table do not address the long-term spending. if we find ourselves in this position at the end of this year we are not going to be able to look our constituents in the face and say what we did was good enough. that is unacceptable. martha: congressman tim scott, very good to talk to you. good luck to you all. bill: everybody around the world watching this. the dow is down triple digits. it's since come back. we expect premarket trading to be down 140 points. it went that way. but we are seeing a little bit

of a recovery. watch that. and senate democrats taking heat for their own debt plan. paul ryan calling harry reid's proposal a bunch of gimmicks. back to the floor of the senate after this. motorcycles, boats, even rv's. nobody knows where he got his love for racing. all we know is, it started early. casey mears, driver of the number thirteen geico toyota camry. geico, saving people money on more than just car insurance. like many chefs today, i feel the best approach to food is to keep it whole for better nutrition. and that's what they do with great grains cereal. see the seam on the wheat grain? same as on the flake. because great grains steams and bakes the actual whole grain.

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...or problems passing urine. other side effects include dry mouth and constipation. nothing can reverse copd. spiriva helps meeathing with copd is no small thing. ask your doctor about spiriva. martha: a "fox news alert," folks, it is this. there are more delays this morning, still getting more information on that, we're awaiting the president 20 minutes from now and the g.o.p. is gathering and they walked into the room a while ago and we are getting word the senior house g.o.p. leadership says we will pass a bill today. as they try to pull that off, we're watching all of that as we get rolling with the second hour of "america's newsroom." welcome, everybody, i'm martha maccallum. bill: who? martha: martha maccallum. bill: great to see you again. martha: great to see you.

bill: almost look like each other. good morning, i'm bill hemmer. and you thought the big vote was coming last night and, so were we, it was postponed and, we are four days away from the threat the treasury department says of a potential default on august 2nd, raising the risk of all of the talk of economic catastrophe. and the white house press secretary, jay carney was asked about that late yesterday. >> the measure the speaker of the house put forward, would almost certainly require this -- all of us to go through this again before the end of the year and the most important economic season in the country, and at a time when people don't want to worry about whether or not their interest rates will go up... martha: you heard that from jay carney and we need a deal so people's interest rates will not go up and neil cavuto joins us live, and, look where he is, in the middle of all of the action this morning on capitol hill. he's senior vice president and anchor and managing editor of

the fox news channel and fox business network. and he's a very important person! good morning, neil, good to see you. >> i wish that were true, martha. martha: you know it is, sir. >> how are you. martha: i'm doing great. but we're watching this and you are watching it from right there and it is quite something to see how dense thintense things are feel like one second they'll get somewhere and then it is falling apart an jay carney reminds everybody the latratings agenci may have a different take, even if we get a deal. >> and we have spoken to a number of s&p ratings analysts over the last week who said, if it is a bad deal, the downgrade is still a distinct possibility. and, it is interesting to note, though, if we see such a calamity coming, the markets have a funny way of showing it. i know we have focused on the 94-95 point drop off on the dow now but i want to move people's eyes to the treasury market without getting too arcane we have not seen a huge sell off in

people who own treasury bills or treasury notes and if anything the securities, if you believe it, the prices have gone up and when the prices go up the yields, rates actually go down and that anomaly has been going on today. in the face of much weaker than expected news, i think you guys got into this, we have a very depressing read on gdp in the latest quarter, 1.3%, much weaker than thought and the prior quarter, a gain of 0.04%, and, very weak, very, very bad. so we have really, this slowdown, moving the stock market, and, prompting people to seek out a safe haven and ironically that is still our treasury market. which is, again, kind of defying what you would think would be conventional wisdom. martha: neil cavuto once said, we stink but not as bad as everybody else. >> no, no, martha... i think that that is it, martha. look at greece and italy and what is going on, with any kind

of unification to everyone's -- sang from the same choir book for the euro and, disintegrating before our eyes and we are lucking out here and i don't mean to dismiss a nearly 500 points fall off in the dow over the last five-plus days. the fact of the matter is, though, it would be a lot worse if they didn't stink so much abroad. martha: you know, it is so interesting to me, neil, you have this on two levels. and, it feels like the treasury market is watching you know, to the extent they are watching this debt crisis issue, they are kind of betting that some deal will be made, and that we will be able to pay our creditors, and that that will be sustained. so that may be what we are seeing in the bond market, and, the stock market, you see, i think, perhaps, tell me if i'm wrong, reaction, really, to the more fundamentals of what is happening in the u.s. economy and that is a very sort of organized word over the last five sessions, the reaction to the fundamentals of the market.

>> you are right. i mean, stocks trade on the moment and, at the moment when you hear companies like merck are set to lay off 13,000 folks, and, juniper networks, earlier in the week sayings, look, we don't see robust demand and a number of other companies have said the same thing and they are seeing this as a much more pronounced concern than washington and, even though it could be quite damaging. but, the thing to keep in mind, is what the treasury is going to say later today. probably, more important than the president, more important than harry reid. more important than the speaker, because they are the folks who will decide who gets paid and how much, when and if we face that brink. martha: all right, well said. neil, thank you so much. and we'll be watching neil while we're, you know, sort of watching all of this unfold from home and he'll be working all weekend, he's a very hard worker and will be on capitol hill today, 4:00 p.m. eastern, "your world" and 6:00 p.m. eastern on fox business, and he'll have all of the breaking news and there

will be a ton of it, looks like over the course of the weekend, our thanks to neil for joining us this morning, we'll be watching. bill: big business block on saturday morning, too, "fox news alert" on the debt debate here. republican lawmakers heading into a closed-door meeting at the moment. chad works the hill for us, senior producer, covers matters of the house and good morning, what is your sense of where republicans are now? >> reporter: well, it seems that ostensibly they are still stuck and there does not seem to be an obvious avenue out of this but i was exchanging e-mails with a senior house leadership aide on the republican side who says that we will pass the boehner bill, today. and, then, send it back over to the senate and, nobody quite knows, what the mixture looks like and how they alter the bill, if they change it from the bill, on the floor yesterday, one thing we are hearing about is a provincial of a balanced budget amendment which is important to a lot of these tea party conservative lawmakers, particularly, freshmen and would have to go back to procedural

groups and take some time and they are meeting in the basement of the capitol and congressman mike kelly, freshman from pennsylvania says we're down to the two-minute drill now and he says this is it, we're up against the wall. bill: you need 217 votes, current house... >> reporter: 216, actually, bill, because you have two vacancies and we are anticipating two absences, obviously, gabrielle giffords and a representative from new york, out with health reasons. bill: duly noted. this is my understanding at 6:00, 22 house republicans are either planning to vote no or leaning against the package. and, more than two dozen republicans are undecided. now is that a repeats number or do you have a firm idea for how many republicans, must flip to get to 216. >> reporter: we keep hearing the numbers and they are hard to pin down, bill. i mean, certainly the number of

undecideds is definitely in the mid 20s or so. it would be a little hard to believe they were that far away. i mean, when they bring a piece of legislation to the floor the idea that you sort of roll the vote sometime in the hours leading up to it and do horse-trading and cajoling and so on and if the number is up in the 40s, that is a real problem and the 20s is within striking distance. bill: you have known john boehner 20 years-plus. >> reporter: yes. covered the first race in southwest ohio. bill: there's a lot on the line for him. does he pull it out? >> reporter: one thing i've noticed about john boehner over his career, that he has nine lives and i've seen him come back from the absolute brink a few times and the first race when i covered him at the college, in 1990, he was down against two other candidates, and rallied to win. and one of his aides described to me he is like captain kirk, you remember, in "star trek"

lore, he gained the system at the academy because there was an unwinnable situation they'd put him in and john boehner is like that but i will tell you it might be his toughest challenge and we said yesterday it would be perhaps the toughest day in his political career and i'll amend it, perhaps, today will be the toughest day in his political career. if they can pull it off. >> there was a prediction from trae galley. >> republican freshman, south carolina. bill: an hour ago, he said they will get it done today. and, he didn't say how but he changed from last night to today, and it was a note of optimism. >> reporter: and he talked about doing something transformative and i think that was the word he used and the thing that a lot of these freshmen tea party-backed members see is transformative is a balanced budget amendment. and, again, here's the problem, though, you can move that through the house, and they want is the strict version, that would require a 2/3 super majority to raise taxes and that does not stand much of a chance in the united states senate, at least that more extreme version.

bill: and the other thing they say is we already voted on cut, cap and balance and it had a balanced budget amendment in it and you are asking us to vote again. thank you, i know your fingers are raw from work the blackberry and we appreciate the information you can give us, okay? >> reporter: thanks, bill, any time. bill: will be another long day for him and others. martha: there goes mike pence as he walks by. the underbelly of the buildings you are seeing there, they go down through the tunnels to head to the meeting and we are waiting to hear from the president as well who got criticism being absent in the process and now he's ready to step out in front of the mics as well and house republicans, we'll hear from them after the meeting and we'll follow all of this, folks, this is an important moment in our country's history. and, does speaker boehner have a plan that can pass? that is the big question, right now. bill: that is clearly the biggest story of the morning, and there is more to talk about, though, alarming new information that al qaeda might be plotting

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martha: this is a "fox news alert." that shot is -- we have been watching the republicans as they head into the conference and have a closed door meeting that is going on right now, and, this is what it is coming down to, folks, because on the other side the senate majority leader, harry reid spoke and he said, look i have no choice, except to go forward with his deal and try to get the senate side reid deal done. listen to this: >> why am i fighting tonight on

my bill? why? there is no more time, i have to do it. would i like to wait to tomorrow and see if there is good will that comes from the republican side? of course i would. i would suggest to my friends on the other side of the aisle, this is a pretty good deal. they in effect as fred thompson said have gotten everything they want and should put the chips in their pockets and walk away and declare victory. martha: there you have it, harry reid says, look, this is a pretty good deal, guys. and, then you have rush limbaugh talk about this and he says, look we are being played, folks, if you sign onto the reid deal, you are going to get not what you think is in the package and angela joins us, and dug shone, political contributor and -- and doug schoen, fox news contributor. >> boehner has a job ahead of him and the fact he cannot whip his members in line to vote for his measure, and that he has to delay the bill, shows weakness in leadership and i talked

yesterday to several grassroots tea party leaders, and, they don't like the boehner plan, and they told me if any tea party member of congress -- part of the tea party caucus votes for the boehner plan they'll vote them out in 2012 and they say, we put you in and we and take you out and that is the rub. martha: we remember when tea party folks were elected they were told they were on probation and they would be watched closely and that seems to be what is still guiding them, doug schoen and this is an amazing action we are watching unfold here. night is, because what harry reid said was basically correct. there is a clear ability of both sides to come together, there is no new taxes, in either plan, and there is somewhere between a trillion and $2.5 trillion in cuts and both sides should come together and what angela was citing is the real problem. john boehner doesn't have control of his caucus and the tea party effectively hijacked the republican party and we

cannot get bipartisan agreement at a time of national crisis, to resolve a problem that puts our financial conditions at peril. >> and martha, i respect the tea party and i respect their principles, i respect -- and i have gone to several tea party events, but, working in washington, d.c. as a former lobbyist and i was a candidate for congress, you have to compromise in washington, d.c. you have to cut a deal, but, the tea party grassroots folks, they don't want to cut a deal, they believe that smoke and mirrors are happening, and, they want major cuts. martha: i'm curious, doug, you think -- the idea that john boehner does not have, you know, the leadership over this sort of whole unruly group, right? and people look at that and they say, this is democracy, and it is messy, and people are entrenched and this is the way it is supposed to look and other people say that he doesn't have control over them because he didn't help them get into office. you know, maybe senator jim demint who has ownership of the group, they feel loyal to, and they don't feel loyal to john

boehner. >> and it is democracy and it's messy and i understand that but the larger view is that we're all americans, and we are all in this together, and, if we can't do what angela described, and put politics aside, and come together for the greater good, what are we about as a people? because, we're not tea party republicans, democrats, we are americans. and there is a clear compromise here and a clear way to go forward and, sadly we are putting our nation at risk for politics. that is sad. martha: in a couple minutes we expect to hear from the president and his name has not come up so far in this conversation and some people say that that is because he has not connected on the issue. with the american people. that he has not gotten everybody, all the folks walking down the hall way, at least some of them, into a room where he has been able to communicate with them and his relationships are not strong enough with the people on capitol hill to have influence over the process and i want your reaction. angela, first. >> and martha, that is the reality, what you are stating but the bottom line is this:

obama and his administration, they are out of touch of what the american people really want. and are in danger in 2012 as well that's washington, d.c. establishment and they think they are ruling and running things and the american people pay their salaries. martha: doug? >> sadly, i have to agree with the premise of your question. the president who had a budget defeated 97-0, and who has been insisting on higher taxes, when that is a nonstarter. has not commanded the loyalty, respect, and indeed, support of either republicans or democrats. to craft a compromise, because, at this point we need leadership, we need agreement, we don't need rhetoric and political blame-game. martha: one quick question. what happens, angela, if the deal passes and they get a compromise, and, then, you know, the republicans feel like they start to lose control of the process, right? and somehow revenue starts to sneak back into this, as well... folks believe may happen once the bill is recrafted.

>> even if it passes the house which i believe it will, the tea party will get what they want it will die in the senate and if it passes the senate the president will veto it. so, it is like ground hog day, over and over again. martha: we have breaking news, doug, thanks so much. >> thanks. martha: great to see you, as all wis. bill: we'll get a deal in the end. fearless prediction. "fox news alert," here's the podium at the white house, where we will see the president in a matter of moments. remarks about the debt, the debate, and what happens next. as we await on the president, want to bring in our senior white house correspondent, ed henry, our chief white house correspondent. welcome to the fox news channel, ed. good morning to you. i know you were up late last night as we all were trying to see whether or not they'd get a vote and in the end that did not happen. and this pat has come to the microphone many times as you know over the past three weeks and, we are still where we are now. how does the white house believe it can influence what is happening in the house,

specifically, this morning? >> that is a good question, because, frankly, the white house is saying they don't really care about influencing what is going on in the house because they believe the boehner bill, even if it gets the votes, to get through the chamber, is immediately dead on arrival in the senate, and, that is why you see the senate majority leader, harry reid saying a few moments ago, he'll move ahead with his legislation, rather than waiting around for the house legislation, and, now move ahead later today with his legislation. his version of the debt bill, with tweets and we'll have to take a close look. what are those modifications, and will that bring along some senate republicans that could give this a little bit of momentum? i think the bottom line for the president, he's heard criticism as you talked about, maybe he has been out there too much and that it has not had an impact. and the white house laughs, because on one hand, critics say he has been out there too much and divides the parties further and other critics saying he is invisible and has not spoken out since monday when he gave the primetime address.

we will not see a specific plan from the president next couple of minutes, will not give you three bullet points, but his aides say we should expect him laying out, what are the stakes if there is inaction and we slip into default, number one and number 2, what he thinks the country can do by coming together, what would be the benefit of a compromise, and i can tell you, there are officials here, who believe that while everything appears to be in disarray, in some ways, it is now, they actually think we're closer to a deal than a lot of people even in washington believe. bill: what would suggest that, ed? >> that is a good question, on paper, the boehner and reid bills have a lot of overlap and similarities. and everybody focuses on the differences, but they have similar spending cuts and the fact both of them want to have special committees of congress set up, in order to come back in a few months, with a second round of suggested spending cuts, and, the key difference, though, it is a big one, why we're in disarray here, stalemate, if you will, is the

fact that they cannot agree on what would be the trigger. what would be the mechanism that makes sure that the special committee is not just some washington commission, as we have seen so many times before. that studies the problem of entitlements, and studies the issue of taxes, and, makes recommendations, but, walks away without actually doing the hard work... bill: if they came around and made recommendations, congress would have to give it a yes or no vote. >> right. bill: and see whether or not those recommendations live another day or whether or not they are signed into law. and i know what they told you at these briefings, saying the president, though he has been out of public view for days now, all week, as i recall, are -- on this topic, anyway, has been privately, at least in conversations, with members on the hill? have they told you specifically with whom he is talking and is john boehner one of them? >> reporter: they've suggested the president has not spoken to speaker boehner in a few days and you are right, the public posture is, look, the president

is very actively working the phones but i can tell you we are picking up reporting that raises questions about how active the president really has been on the phone. you know, a democratic conservative democratic senator joe manchin this morning said he thinks the president needs to be more active and has not talked to him and this is the kind of conservative democrat the president needs to sway if he gets a compromise in the senate, one of our producers on capitol hill, chris turner called around trying to find moderate republicans who have spoken to the president an reached out to senator susan collins, moderate from maine and her office said she had not spoken to the president. had not heard from vice president biden but got a call from the small business administrator, urging her to come along to the president's ideas here. pretty far down the food chain. bill: what does that suggest to you? it tells me they've taken a back seat, clearly. >> it tells me the president may be on the phone with harry reid and maybe with mitch mcconnell, key leaders who, no doubt will

have an important role in bringing it to an end game but if the president is really going to effect an outcome he has been pushing for for weeks and weeks and weeks now he's also going to have to reach out to moderate republicans, like susan collins who have to deliver a vote for harry reid's plan to get it done. and that is where the rubber meets the road, not just the conversations with the leaders. it is which key rank-and-file people in the middle will actually force this to a compromise. bill: and, stand by there, okay? we expect the president in a moment and when he comes out we'll take our viewers to the comments. and, in the meantime, the chief deputy whip and member of the congressional progressive caucus, the democratic congressman now from the hill, is with us as well, congressman welch, sir, good morning to you. >> good morning. bill: where are we from your view? >> well, it is a mess. you know, there's a reason ronald reagan, who was a fierce fighter of budget and tax issues, kept the question of the debt ceiling completely separate and that is because america pays

its bills an linking these things up when we are up against the wall is the worst time to try to have a long term fiscal solution the country needs. bill: i apologize to interrupt but no one is understanding suggesting the united states would not pay its bills and there would be revenue in washington, august 3rd. >> well, you know what? i actually think that is a hopeful theory. i hope you are right. but if we default on august 2nd, and it is looking more and more like the whole spectacle is contributing to a likelihood of a downgrade, it is very regrettable and if we have to pay $100 billion more in debt service that will be bad for the republican point of view and bad for the democratic point of view. so, bottom line, we have to get somewhere to a compromise. bill: my comment was not just borne out of hope, it is borne out of fact. $200 billion a month in revenues to washington, you use that

money, prioritize your spending, and who gets paid, and that is how... >> that is a theory. and it is how the bills are paid and if you are prioritizing, it means some people will get paid and some will get stiffed and the credit markets are going to punish the bond holders, will pistol-whip us into ultimately raising that debt ceiling, so that all of the people to whom money is owed will be paid when they are supposed to be paid. none of us are operating on the principle that if we, august 2nd comes and go, we can prioritize and it will be a painless way forward... bill: i know the one principle you are operating on, you will propose a clean debt ceiling lift and you have 100 co-sponsors at the moment? that is a long way from passage. and you will need republicans to get it through. does it stand a chance. >> no, it has to be a backup plan, bottom line, the boehner

plan, we expected it would pass and mr. boehner has his hands full, and it is not passing. and what i wanted is, if boehner doesn't pass, if we are still deadlocked, and august 2nd comes, and the question is, do we default or raise the debt ceiling i want members of congress to be required to go on the record and say we are for default or for raising the debt ceiling and paying our bills. americans should be able to hold us accountable for the clear vote and whether we have the vote is entirely up to mr. boehner. bill: peter welch, thank you for your time. democrat from vermont with a proposal to raise the debt ceiling, clean. which is something i think the white house wanted several weeks ago and if not months ago, peter welch, thank you for your time, we are waiting on the camera, as you can see, with the camera at the white house. martha: we are hearing from chris turner, tim geithner has been speaking out about the financial peril that is already in his opinion, starting to ensue to some degree, that the international community

according to the treasury secretary is starting to get unnerved by what they are seeing as us pushing perilously close to the default line and the serves the administration, because, they are clearly pushing to get this situation handled and quickly, and henry -- ed henry is standing by with us. i wonder if the president still strike the same note we hear from tim geithner who may be the warm-up for the president who we'll hear from moments from now. >> absolutely, some version of "can you hear me now" because the president has been saying days and days and days, it could be a full scale calamity and one of the president's top aides, dan pfeiffer said, we could have a financial depression if in fact the u.s. defaults next tuesday. and, so, a lot of republicans on the hill have been saying, look, these are scare tactics and is not true and they are exaggerating the situation and trying to maybe even manufacture a crisises. but, when you have tim geithner,

the treasury secretary saying, look, folks, we are getting closer and closer here and starting to see signs around the world, maybe in the international markets, that some of those dire predictions could -- i express could, come true and, frankly we don't know the real answer yet because we have not been through a crisis quite like this. and so a lot of this is just predictions and forecasts the but the fact of the matter is as we get closer and closer, sooner or later we'll find out how bad it might get. martha: it is interesting, the treasury markets have not responded in a way that they are showing fear at this moment, the dow industrials down 99 points now and they have been roughed up by a number of factors including peripherally to some extent, this as well. but, i will be curious to see if the president starts to outline what kind of procedures they would, indeed, take, if we passed over the default deadline, because, you have been very reluctant to do that specifically and tim geithner

was questioned on this by chris wallace and he would not go there and outline the pro,s aces would be and do you think we'll hear them this morning. >> i don't think so, the markets, as you noted, are still only right now, and there has been speculation maybe at the close of business today, before we head into the weekend, looks like we may have a two minute warning there for the president. that basically, after the markets close today, we might hear some of those more details, because then you have the weekend for everyone here in washington and everyone on wall street, but people all around the world, to start digesting what those steps may be in terms of what kind of debt will be prioritized and what bills the u.s. government would start paying, as a priority, would social security checks go out an veterans checks, you name it and there's a lot of things, and, you talked about harry reid saying, look, republicans have really already won in many ways, because they've gotten a lot of spending cuts they wand and were able to take actions off the table and he said, take the victory and the quote was, put

their chips in their pocket and walk away and harry reid is from nevada and knows something about gambling and is trying to pass that along to the republicans but it's not just republicans saying that, the last couple days, republicans like john mccain made the name suggestion, look, republicans have gained a lot of ground here and shouldn't hold out for too much more, or risk all of this exploding. martha: and, he quoted fred thompson as well. as he built his list of republicans who are on board with what harry reid wants and that sent some conservatives in the other direction and let's listen to the sound from the mitch mcconnell and get that into the mix as well, from moments ago. >> what about over here in the senate? the contrast couldn't be starker. we have been working the last few days towards a solution to the crisis the way the republican majority in the house has and the democratic majority in the senate has been wasting precious time rounding up no votes to keep the crisis alive, rather than being responsible and doing their duty to come up

with a bill that can actually pass, they have been busy signing people up for the not good enough caucus. and ginning up opposition to everything else. martha: a lot of frustration from senator mcconnell. >> and maybe harry reid the democratic leader is hearing that, because, as chris turner our capitol hill producer reports, he said on the floor, the senate majority leader he'll move forward later on with the reid bill, not trying to shoot down the boehner bill but move on to an actual piece of legislation, maybe amended, modified in ways that might bring republican votes and while we have talked a lot about speaker boehner as the key player it will shift rather quickly to the key players being not just harry reid but mitch mcconnell, the senate republican leader, because it will be critical the next 48 hours, or so to see how many of this is fellow republicans he can bring along if there is a compromise or there are a lot of conservatives in that -- senate republican caucus who dig in, as we have seen a lot of the house conservatives, affiliated with

the tea party who gave speaker boehner a fit and can mitch mcconnell deliver the republican votes, to of have some sort of a bipartisan compromise, with harry reid, the next couple of days, because, let's not forget, even if they forge that they then have to they can the legislation and go back over to the house, whereas we can see, john boehner is having all kinds of problems with his caucus and you can see a situation where mitch mcconnell and harry reid, pass a deal the next couple of days and then it has to go to the house and is highly unlikely a deal like that would get many house conservative votes and you have to see john boehner go to nancy pelosi the democratic leader, and maybe deliver a small number of house republican votes, and get a lot of house democratic votes, to push it through, and then get it to the president's desk. and, gives you an idea how far away we are. to really getting it done. martha: not a lot of working days between now and then, either. >> reporter: and that tells you the house and senate will likely work through the weekend and that is rare around here. the president will be engaged as

well, and, we saw at the beginning of the process, a couple weeks back, when it was starting to intensify, regular meetings here at the white house, between the democratics republican leaders and the president. and those have stopped and we'll see whether it comes back this weekend, martha. martha: thanks, stand by, two minute warning. bill: the trend in washington the past two-and-a-half years to push it all to the 11th year and go back to the fall of 2008, t.a.r.p. and the way that was ping-ponged back and forth in congress and the health care legislation, a year-and-a-half ago, all of that ran up to the 11th hour before it was passed in congress. and, strong opposition on the republican side. both in the house and the senate. and with an august 2nd deadline declared by the treasury a few months back it is clear it is headed in the same direction, you'll get some sort of deal, perhaps in the 11th hour, maybe on the night of the first of august, where you reconcile two plans between the house and the senate and you get something the

president will not veto but will sign into law. and, as we sit here this morning, that is the trend that we see, both in the house and the senate. as the republican members go into the meeting we watched a short time ago. we were told the president will be out in about two minutes time as we await that, i want to bring in my friend, charles payne from the fox business network. we were told the sky was falling. it hasn't. looking at the dow right now, up 94 points. ... off 94 points, like another day. >> one of the more despicable as sects is pushing by politicians, our elected leaders to actually -- who wanted to see the mark down and you referenced t.a.r.p. and a lot said, remember the t.a.r.p. vote and the time we didn't vote for it and the dow dropped 700 points, do we want to relive that? here's the funny thing, after president bush signed it into law october 3rd, we ended up losing 4,000 points, between then and march of the next year. 700 was nothing. the point is, the important see

yeah... bill: here's the president. >> you got it. >> president barack obama: increasingly urgent effort to reduce the deficit and the house of representatives right now is trying to pass a bill that a majority of republicans and democratics in the senate have already said they won't vote for. it is a plan that would force us to relive this crisis in just a few short months. holding our economy captive to washington politics, once again. in other words, it does not solve the problem and, it has no chance of becoming law. what is clear now, is that any solution to avoid default must be bipartisan. must have the support of both parties, that were sent here to represent the american people. not just one faction. it will have to have the support of both the house and the senate. and, there are multiple ways to resolve the problem. senator reid, a democrat, has

introduced a plan in the senate that contains cuts agreed upon by both parties. senator mcconnell, a republican, offered a solution that could get us through this. there are plenty of modifications we can make to either of these plans, in order to get them passed through both the house and the senate and would allow me to sign them into law. today i urge democrats and republicans in the senate to find common ground on a plan they can get support -- that can get support from both parties in the house, i plan i can sign by tuesday. keep in mind this is not a situation where the two parties are miles apart. we are in rough agreement about how much spending can be cut, responsibly as a first step toward reducing our deficit. we agree on a process where the next step is a debate in the coming months on tax reform and entitlement reform. and i'm ready and willing to have that debate. if we need to put in place some kind of enforcement mechanism to

hold us all accountable, for making these reforms, i'll support that, too, if it is done in a smart and balanced way. so, there are plenty of ways out of this mess. but, we are almost out of time. we need to reach a compromise by tuesday, so our country will have the ability to pay its bills on time, as we always have, bills that include monthly social security checks an veterans benefits and the government contracts we've signed with thousands of businesses. keep in mind if we don't do that, if we don't come to an agreement, we could lose or country's aaa credit rating. not because we didn't that he have capacity to pay our bills, we do. but because we didn't have a triple-a political system to match our aaa credit rating. and make no mistake, for those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher

interest rates on their margins, car loans, credit cards, and that is inexcusable. there are a lot of crises in the world we can't always predict or avoid. hurricanes, earthquakes, tornadoes, terrorist attacks... this isn't one of those crises, the power to solve this is in our hands on and a day we have been reminded how fragile the economy already is, this is a burden we can lift ourselves an end id with a simple vote, a vote the democrats and republicans have been taking for decades. a vote that the leaders in congress have taken for decades. it is not a vote that allows congress to spend more money. raising the debt ceiling simply gives our country the ability to pay the bills that congress has already racked up. i want to emphasize that. the debt ceiling does not

determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up. it gives the united states of america the ability to keep its word. now, monday night i asked the american people to make their voice heard in this debate. and the response was overwhelming. so please to all the american people, keep it up. if you want to see a bipartisan compromise, a bill that can pass both houses of congress, and that i can sign, let your members of congress know. make a phone call, send an e-mail, tweet, keep the pressure on washington, and we can get past this. for my part our administration will be continuing to work with democrats and republicans all weekend long, until we find a solution. the time for putting party first is over. the time for compromise on the behalf of the american people is now. and i'm confident that we can solve this problem, i'm confident that we will solve

this problem. for all the intrigue and all the drama that is taking place on capitol hill, right now, i'm confident... martha: we have lost the signal, temporarily to the house, it appears... there we go. he's back. >> president barack obama: and show leads the leadership the an people expect. thank you. martha: all right, you want to see if he answer one of the question shouted at him and he walked out the door and did not, in this case and, the president establishing the ground that he has been over, for quite some time, here, and, you know, we can talk about whether or not we really heard anything new. bill: not much, this morning. get it done because we're getting close to the day and we are hearing from our fox producer from the hill that we had on the air, 40 minutes ago, reporting something new now, and we'll bring in bret baier, the anchor of special report.

good morning to you. he said house republican leadership aides saying we'll pass the bill today, a quote, no guidance on how they'll get it done or what the path forward is but there's a suggestion, only a suggestion, they would do something similar to cut, cap and balance, which is what they did a week or ten days ago, and has the critical balanced budget amendment in it. which appears to be the sticking point, last night. does that line up with everything you have heard? >> so far, the speaker is in conference with his members trying to get them to move forward and probably looking to try to pick up a couple of votes and let me say a couple things about the president's speech there, i doubt in the part where we lost the connection we got many more specifics from the president. the one thing he mentioned was an enforcement mechanism to a big deal. saying that if it balanced, he'd agree to that and that was a

specific but other than that, it was basically the same type of speech he has given numerous times now. he warned about the credit rating downgrade, and there are already agencies we're talking about, that... before the debt ceiling increased and it will be interesting see how it played out. bill: a great point you threw in there, too, stand by for more in washington, we're trying to pick up more on the quote, we are going to pass the bill today, how they do that and amend what they have on the table so far is... where we are and will be a major headline once we figure it out. bret, thank you. martha has more now. martha: bill said how the g.o.p. members are meeting now and we'll bring you developments as we find out a little bit of a fine point on whether or not they will have a deal, as they are starting to say they will and will step in front of those mic's and we'll take you there, live. >> the door is open, i'll listen to any ideas to get it done in a way that prevents a default and a dangerous downgrade. to our country's credit rating.

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martha: president obama peeking moments ago, saying he thinks a deal can be worked out, listen to this: >> president barack obama: we agree on a process, where the next step is a debate in the coming months on tax reform, and entitlement reform and i'm ready and willing to have that debate. if we need to put in place some kind of enforcement mechanism to hold us all accountable, for making these reforms, i'll support that, too, if it is done in a smart and balanced way. martha: let's bring in byron york, the chief political correspondent for the washington examiner and fox news contributor. byron, the president is saying we need a deal, give me a deal, even if it has a trigger that says i have to get serious about tax reform, and more spending cuts. if it is a good deal, i'll go along with it. >> well, there are a million different enforcement

mechanisms, congress might come up with and the ultimate being a balanced budget amendment, which democrats have opposed and tabled the balanced budget amendment in the senate and said you need a boehner bill, even if it contained one, would be dead on arrival, so it is not entirely clear what the president is talking about. martha: i mean, there has altogether been the speculation about some kind of health care trigger that would be this there and a lot of things he might not find a balanced approach and a lot of conservatives are very concerned that you know, if they sign-off on a deal with a weak trigger in it, we'll be, kicking the can down the road, people have been saying so much. >> each side could insert a poison pill as a trigger. you could propose to republicans that a trigger would eliminate the bush tax cuts or could propose to democrats a trigger would eliminate obamacare, and i mean, you can put in triggers that would be totally unacceptable to the other side and the question is whether there is some kind of trigger they both can agree on, and, apparently they don't have one

yet, why the president was saying that. martha: i want your reaction to the strong editorial, this morning from peggy noonan. about the president and his leadership and his standing and it says he is losing a battle in which he has superior forces, the president and the us senate and, he is not a devil, an alien, a socialist, he's a loser, says peggy noonan and this is america where nobody loves a loser. your thoughts on that, this morning, byron? >> that is a little strong and it could be a little premature and we don't know how it will come out and i think it is clear the president has not been leading in this whole fight but i'll tell you, republicans, a lot of them remember 1995 and 1996, and the government shut down with bill clinton and they remember painfully that they tried to avoid it and got blamed for the shut down. martha: sorry for the time

crunch. thanks. bill: we are waiting hope to republicans and some are coming out of the meeting and, perhaps the meeting is over and we might see them in front of the microphone and we are getting the word from senior republicans, saying, we will pass the bill today. back in a moment. [ jon ] we don't just come up here for the view up in alaska. it's the cleanest, clearest water. we find the best, sweetest crab for red lobster we can find. yeah! [ male announcer ] hurry in to crabfest at red lobster. the only time you can savor three sweet alaskan crab entrees all under $20,

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bill: a lot of things we're watching, the microphone on the hill, we expect republican leaders in the microphone in a matter of minutes and when they do they'll be likely considering a follow number that came out 8:30 a.m. this morning and the number is not good. the gross domestic product for the second quarter, growth was weak. 1.3%, that is the weakest number we have seen in about a year and that brings us to our question of the morning. bya, jeffrey, from concord, north carolina given the various debt reduction plans when can we

expect the debt clock to start it count down, in other words, when will the debt clock go in the other direction? charles payne, fox business network and also the ceo of w3.com, author of "be smart, act fast, get rich." good morning, and we spoke with you before the president came out and the truth is, the debt clock does not go in the other direction. >> absolutely not. they tried to say, everything we borrow we'll cut and if anything we'd be knneutral but a lot of e cuts are down the road and a lot are mythical, for instance the reid plan which asumes cuts if we end the war quickly and don't enter any other wars, who knows. bill: the 14.5 number will stay where it is. >> it will go up. regardless. we are punting on this. bill: the gdp number from the second quarter. you are a believer that we never came out of the recession. >> absolutely. bill: this isn't even a double dip, the same recession we have been in three years.

>> and, the 1.3 number, the first quarter was revised to 0.4%, that is crawling, absolutely crawling and the notion of going into a double dip is a misnomer in the sense we have not come out of it and most people watching the show can tell economists that, politicians that, and we have not come out of the recession. bill: chars, thank you for that and we want to pick up on that point. we hear a lot of different things and if you get outside of new york city you can see a lot of people... affected tremendous, thanks for that and hemmer@foxnews.com is the i mail and twitter, @billhemmer, thanks, charles. martha, what is happening now. martha: you can hear the drum beat from capitol hill now and president obama took to the microphones moments ago and we heard from him and he says any solution to the debt show down needs to be bipartisan, encouraging both sides to get together, how do we get there? that is the question of the moment. we'll be back.

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