>> schieffer: today on "face the nation," washington tied in knots as the nations slides closer to default. >> i cannot guarantee those checks go out on august 3rd if we haven't resolved this issue, because there may simply not be the money in the coffers to do it. >> he was talking about social security and veteran benefits but congress remains unable to resolve the debt crisis. >> for those who interested in political careers than fixing the real problems in front of our country. >> schieffer: that is tom coburn of oklahoma and joins dick durbin one of the leading democrats and senator marco rubio the tea party favorite as we try again to get answers to the questions, are we on the verge of an economic disaster

and why for all of the bluster does congress seem powerless to do anything about it? it is all ahead on "face the nation." captioning sponsored by cbs "face the nation" with cbs news chief washington correspondent bob schieffer. and now from cbs news in washington, bob schieffer. >> schieffer: and good morning, again, senator durbin is in springfield, illnois this morning, senator coburn is in muskogee, oklahoma, senator rubio will be along later in the broadcast, gentlemen welcome to all of you. well, the administration says unless something gets done by august 2nd, the nation will slide into default and the term backed by the full, faith and credit of the united states, the best guarantee the world has ever known won't mean what it used to mean. and who knows what impact that will have on not just our economy, but economies around the world. so we will stipulate everyone hopes that it won't happen, but senator durbin, have you seen

any hope that a deal can be made to avert that? the president said he was giving everybody 36 hours to come up with something, i think 36 hours is up. >> listen, the president has done his job, he called us together and had six separate meetings and put about 12 hours of his time in this week listening patiently to both sides discuss this. and he told us when we left it is time to roll up your sleeves and work this out between you. the good news is that majority leader harry reid and senator mitch mcconnell are sitting down and working out an approach that we are going to try to tackle this week in the united states senate. there will be a debate on the balanced budget amendment but no one believes 67 votes for any version of that and secondly we are going to be working toward a way to escape the crisis that would come if we default on america's national debt. these are all good things, but they don't get the big job done. the president said he is committed to a big deal, $4 trillion over ten years i am committed to it, harry reid is committed to it we need some

bipartisan buy in here ai think we can do it. >> schieffer: let me ask you, senator durbin that begs the question you said you are going to spend this week debate ago balanced budget amendment that you say everyone knows has no chance of passing so why are you debating that. >> because the republicans are insisting the debate takes place before anything happens we lived in a divided congress, the house of republican is under republican control and the senate 53 democrats, a nominal majority but not the 60 you need for big decisions so we have to check the boxes. one of them is to engage in this debate. it is interesting to me if you look back in history,. bob, and you will remember this when we had the biggest run up in america's debt in president reagan that was the hottest debate about a balanced budget constitutional amendment we don't need an amendment, we basically need to accept the responsibility to do this job and to lead. >> schieffer: all right, well, senator coburn, let me turn to you. the president said this week

that if congress -- and timothy geithner the treasury secretary said on this broadcast last week if you didn't begin to put the components in place to get something done on a big deal, this week, there wouldn't be time to get it done by august 2nd, when he says the government is going to run out of money. is there time, do you see any hope that anything will be done this week? >> well, i think first of all, i think there is time, without a doubt, to any agreement, even if we come to an agreement next week there is still time to get it done. that is not an excuse for not having the rigorous debate that we should have. two points i would make, bob, is number one, the president has said he is for $4 trillion but won't lay out in details what he thinks we ought to do, that is number one, number 2 is, why in the world isn't there the votes for a balanced budget amendment in the u.s. senate is the question americans ought to be asking, 67 votes to say we ought to live within our means when we are borrowing 43 cents out of every dollar we are spending

today? i think the american people would like to see us do that. that doesn't mean we have to make those decisions. dick durbin has worked real hard to try to build a consensus around $4 trillion and we have to have something at least at $4 trillion or $4.5 trillion if, in fact, we are going to send a signal that we understand our problems and that we are going to continue to reward those who invest in us by paying the bills, but we have to do it in a way that will allow us to continue to borrow the money until we get out of this problem. >> schieffer: well, senator coburn, whether or not we ought to have the votes in the senate for a balanced budget amendment when you talk about a constitutional amendment, you are talking about something that could take years to get passed, because it also has to be ratified by the states and all of that. >> sure. >> schieffer: the problem we have right now is right now, the government is on the verge of running out of money here, and being unable to pay its bills, so why, why shouldn't that part of it be put aside for a while and concentrate on doing something to get this debt

ceiling either raised and the deficit down now? >> well, i think the reason why that ought to be concentrated on is we have a terrible track record, republicans and democrats alike, of promising to do something to get our spending under control, but yet never doing it. and that is a bipartisan problem. we spend money we don't have on things we don't need, and we continue to do that, because that is in the benefit of the politicians not to, not the benefit of the country. >> schieffer: well let me go back to this plan that is under mcconnell is working on and he is talking to senator durbin basically it would give the president the authority to raise the debt ceiling and then give congress the right to disapprove it, and it would then be passed over a presidential veto, because the thinking is, that there are not enough votes in the senate, republican votes, to override a veto, isn't that really just a way of raising the debt ceiling by giving the people that don't want to take responsibility for that, just

giving them a way out, a cover story, and why is congress concentrating on cover stories for people? why don't -- that seems to be kind of the height of hypocrisy to me. >> bob, that is exactly what it is. let's get it straight. the fact is, what we are voting for in a debt ceiling is to borrow the money to pay for what we have already spent. so those who have voted time and again for us to go to war or stay at war or stay longer at war have to pay the bills for the men and women in uniform to keep them safe. that is one example. what we need to do is accept responsibility. the president sat us down at the first meeting and went around the table the eight congressional leaders and said how many of you are committed to a big deal, i am talking about $4 trillion, i am prepared to put on the table things that democrats hold sacred, social security and medicare and medicaid, let's look at them honestly and keep the programs alive, make sure they have a

good strong future but let's talk about them in honest nest terms, he went around the table with only one notable dissent and said we are ready to do the big deal .. that is what i think we should be doing right now, tom and i have been involved in this in a commission and been involved in another group of bipartisan group of senators, we know what we need to do. the president doesn't need to spell it out, we need to have the political will to do it. >> senator coburn you yourself have said and we quoted you at the top of the broadcast what is missing here is the political courage to take responsibility for these votes. how does the congress get itself out of the mode that it is in now? >> well, a couple of things, number one, senator durbin talked about, we funded wars, but we borrowed the money instead of cut spending here. i mean, we have to change that behavior. that is why the balanced budget amendment is so important. we rationalize that we can borrow the money to fund wars rather than make the hard decisions when we should have,

now we are going to make the hard decisions and if we don't make the hard decisions, you know, a $2 trillion package will do nothing to reassure the world economic community that we get it. it has to be, whatever we do, and harry reid and mitch mcconnell are planning on putting $1.5 trillion worth of spending cuts, it doesn't do it, it doesn't send -- it doesn't fix the problem. the problem is, and dick durbin is right, unless we get to a really of about 4 trillion to buy us some time for the second half of this decade, we are going to have significant interest rates that will markedly impact us and for every one percent in rising rates it is $150 billion that we are going to spend, so unless you do $4 trillion or $5 trillion, if you have a 1% or 2% rise in interest rates, we are actually worse offer than had we done nothing. >> schieffer: well, senator, does that mean that you would not support the mcconnell plan yourself? >> i think the mcdonnell plan is more of washington not taking

responsibility, it is a great political plan, it takes the pressure off all of the politicians but allows us to pass a debt limit without making the hard choices that this country has to make. you know, bob -- >> schieffer: so let me just interrupt. so does that mean you won't support it yourself? >> i don't have -- i haven't firmly decided, but i am unlikely to support it at this time. i am only going to support something that actually solves the problem, and if we don't solve the problem -- and not the political problem. i don't care about the politics anymore. if it doesn't solve the policy problem for this country, i am not going to support it. >> all right. you are going to unveil a plan i think tomorrow that you say could save $9 trillion over the next ten years. how could there be my hope of something like that passing when so far they are not willing to support plans that call for cutting much less, senator? >> oh, i wouldn't expect it to pass, but i would expect people

to look at it. we have spent thousands of hours going through every program in the federal government. we have $9 trillion worth of savings that are achievable over the next ten years. pick half of them. half of them solve our problem. >> schieffer: give me a couple. give me a couple of points that you are going to make. >> okay. >> schieffer: what is the big news in your plan? >> well, we can save a trillion- dollar at the pentagon over the next ten years, not hard. it is difficult, but it is not super hard. it is common sense. discretionary spending we can save over a trillion-dollar, other got agencies we can save $500 billion, we can increase revenues by adjusting the tax code and lowering it, dick durbin is very familiar with this and save over a trillion- dollar doing that. we can fix medicare, we can fix medicaid. we can fix social security, where they are viable and still provide what seniors need and save trillions of dollars so, and if we do all of that we will

save a trillion dollars in interest just in the next nine years. >> schieffer: okay. let me ask senator durbin. >> i am just saying people, choose, choose what you want. >> schieffer: senator durbin let me ask you quickly, do you think they are going to be able to meet this deadline and get something in place by august 2nd? >> let me tell you when the doors close and the cameras are off, every leader sitting down with the president said we cannot default on america's debt. if we call into question the full faith and credit of the united states for the first time in our history, interest rates will go up and this recession will get worse. we will lose jobs and businesses will fail. now when you open the room, people, you know, make all kind of statements before the cameras but i tell you this, the bottom line is we can do it, with he need to do it on a bipartisan basis, tom and i are committed to a long-term solution. there are some hard choices here. let us not default on america's debt for the first time in history and cause this economy to go further downhill. >> schieffer: gentlemen, thanks

both of you for bringing some insight from your respective point of views we will talk to marco rubio and get an entirely different take, i suspect, when we come back. back. i have a drug problem. 10% of the world's medicine is counterfeit. affecting over a billion people a year. on a smarter planet, we're building intelligence into things. so we can follow this medicine from the factory to the distribution center... to the pharmacy... and know it's the real thing. keeping counterfeits off the shelves.

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simply raising the debt limit is not enough it has to be accompanied by credible effort to deal with the american's debt problem and if that is hot what we do we are going to have a big problem, perhaps bigger than anything the administration has been talking about. >> schieffer: well, would you support this deal that we were just talking about with the senators just now, that mitch mcconnell is working on with harry reid which basically gives the president the right to raise the debt, raise the debt limit and then allows the senate and the house to vote to disapprove that, basically just a way nobody has to take credit for raising the debt limit, are you going to vote for that. >> not as i understand it, the way the deal is currently structured right now it gives the president the ability to raise the debt limit but as at this said already on the program the debt limit is not really the problem here, the problem here is the debt. the debt limit is actually the easiest part of the problem, it is one vote away from being solved, but if all we do is raise the debt limit and it is not accompanied by a credible solution to america's debt problem, we are in big trouble

and i don't believe this plan as it has been outlined to me is a credible solution to our debt problem. >> schieffer: you have been very, very tough on president obama and especially lately, last week you actually accused him of bringing the government to the brink of default on purpose. here is how you put it on sean hannity's broadcast on fox. >> this is not a surprise. this didn't sneak up on us in the last couple of weeks here, we have known about this since the day i got to washington, i have been talking about i, i think they deliberately let this thing go on because they were hoping to get to a last-minute situation so they could force us into a take it or leave it proposition, like they tried to do with the government shut down earlier in the year, like they did with the stimulus package back in february when he first took over, the reality of it is none of these policy prescriptions the president has written works, every aspect of life in america is worse than when he took over, unemployment is higher, interest rates, everything is worse. >> schieffer: do you really mean all of that literally, senator,

that everything this america is worse? and i take it that it is all barack obama's fault. >> first of all, every president has to be judged by the times in which he lives. this president has now been in charge for two and a half years, okay? he has increased federal spending by 28 percent. washington went along with his prescription for joblessness which was the stimulus package, and unemployment is higher than it was when he took over significantly higher, in fact, we have not had unemployment this high for this long since the great depression with no signs of it getting better, over 20 million americans today as they watch this program are either unemployed or underemployed and none of the things he said we need to do in order to turn that around have worked. as far as waiting longer to deal with us, here are the fact i came to the washington in january we knew this debt limit issue was upon us, nothing happened during the state of the union and proposed a budget that was so ludicrous not even the democrats and the senate would vote for it, a budget that increased the debt, not solved it. months went by, weeks went by and up until very recently the president was completely disengaged from this debt limit

debate and i do think that in the context of politic, there was a strategy to leave this to the last possible moment so there would be would be a take it or leave it scenario like some are painting right now and this is not a good game but a very serious issue, people watching at home they don't care who wins the debt limit debate they want to know why they can't find a job and the answer is until america has a credible solution to its debt problem people will be afraid to invest in america's economy and create jobs here at home. >> schieffer: aren't you going to have to concede, though, senator that maybe the previous administration might have had a little something to do with the bad economy. >> sure. >> schieffer: that the president inherited when he came into office. i mean, and the other part is, when you -- >> when does it start getting better, bob? >> schieffer: let me ask you this, you say this is a surprise to everybody. i mean, the treasury secretary has been warning for months that we needed to do something about this. i am not sure that is factually correct for you to say he surprised everybody. >> so where is the president's

plan is i have never seen a piece of paper with the president's name on it that is his plan to solve this problem. i have seen press conferences. i have seen lectures he has given to the congress. i have seen these press where the camera comes in and takes a bunch of pictures, i haven't seen a plan, where is the president's plan? >> schieffer: well where are the concessions that the republicans is willing to make, i heard the president say he would talk about means testing or people on medicare, i don't hear my concessions from people on the other side. they just say no taxes, and that is their negotiating posture. >> i can only speak for myself i come from a state that has a massive number of retirees and stood before cameras like this and made it very clear if we don't do something to save medicare and social security they will bankrupt themselves and bankrupt our country, that those programs are unsustainable as they are currently structured that we are going to lose those programs until unless we do something to deal with it, did that the capital and everybody told me i lost my minds in terms of talking about these issues so i think as far as i am concerned and many like me, we have stepped up and talked about some of these issues that face

america, i mean, senator, i'm sorry, representative ryan, congressman ryan paid a horrible political price for offering a potential solution to some of these problems i am not sure that is a fair assessment. >> schieffer: what is your plan to save social security, senator? are you ready for means testing on social security? raise the premiums? what is it-- >> there are no premiums in social security. >> schieffer: you are correct, i misspoke, what would you co? >> i talk about this on the campaign, first of all, we don't have to do anything for current beneficiaries, people like my mom or people near retirement, i think we do have to look at the retirement age, i do think that people like me, like me, i am just 40, turned 40 a month ago, people like me have to accept the fact there will not be a social security for us, unless we are willing to retire a little bit later, and people in my generation are going to have to accept that. and i am open to other people's suggestions, absolutely i am open to people's suggestions, because i want to save social security and i want to save medicare. as far as our solutions are concerned to the overall problem

i think a credible solution to our debt problem has to have two components, budgetary reforms, a decrease in spending, of at least $4 trillion or more and it has to come with some sort of growth enhancers that helps grow our economy you can't get yourself out of this debt problem at nine percent unemployment with over 24 million americans either unemployed or underemployed. >> schieffer: are you ready to say that you will not vote for anything that lets the government go into default on its debts? are you willing to let that happen? >> well, i think if all we do is raise the debt limit that is exactly what we are doing. the full faith and credit of the united states is in danger if all we do is raise the debt limit and it is not accompanied by a credible plan to begin to deal with this debt issue and it is not me saying it it is the standard and poors saying it, every time they cite these reports they need to read the full report, if you read the full report, yes, we are concerned about the u.s. not voting to raise the debt limit but we are really concerned about the fact that the united states and its government does

not have a credible plan to deal with the debt, and the only credible plan to deal with the debt is not simply raising the debt limit, you must also have budgetary reforms put in place that show how you are going to save money and pro growth strategies that show how you will grow your economy if we don't do that we are in a lot of trouble. >> schieffer: can you have meaningful reform here without increasing revenues in some way closing what some people call loopholes, eliminating what others call deductions, aren't you going to have some, aren't you going to have some way to increase revenues that goes beyond just cutting taxes? >> i think everybody in washington would like to see more revenues, the question is number one how do you get more revenue and what do you do with it? i think more revenue should come from economic growth and it should come from that because i think it is impossible to come from tax increases. none of the tax increases the president is proposing solve the problem, they don't raise enough money, in fact they make it worse and kill jobs and by the way i don't trust washington, because they have shown time and again that my time they get their hands on more money they don't use it to pay or avoid

debt they use it to grow the government so that is what i am in favor of, i am in favor of more revenue that comes from economic growth, the creation of new jobs. and if you talk to job creators, not politicians, not presidents, you talk to job creators, they will tell you what they are looking for is a fair and simpler tax code so i do support tax reform and i think there is a lot of support for tax reform in washington, and they are looking for some regulatory reform as well because they think these inflations that are being imposed make america a more unfriendly place to do business, when people tell you, communist china is a better place to do business than america you know you are in trouble. >> schieffer: well, senator we have to stop it there, the clock has run out. thank you so much for being with us this morning. >> thank you. >> schieffer: back in a moment with some final thoughts. >> this portion of face the nation is sponsored by t. rowe price, understanding the connections of a complex global economy. invest with confidence. confidence.

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>> schieffer: finally, today, well, it has taken a while, but we have finally done it, we have created a congress in capable of doing what it was supposed to do, and that is improve the lives of its citizens. it is as if detroit made a car with a fine radio and piercing headlights and comfortable, beautiful seats, but a car that couldn't do what it was created to do and that is move forward. here is how it happened. the cottage industry that has grown up around congress, the consultants, the commercial makers, the pollsters, have made the cost of running for office prohibitive, so hose who do run must spend nearly all of their day calling people and begging for money. it takes an overwhelming ambition to be in office to be willing to do that, most people want no part of such a life. so the talent pool of candidates has shrunk to not bad people but not always the same kind of people who used to run for office. even worse, in order to raise

the vast sums needed a candidate must sign off with so many special interest groups before getting to washington that once here, their positions are already set in stone. they can't compromise on anything. so we have what we have. a legislative body unable to reach agreement on anything. the founders forged both the declaration of independence and the constitution through ingenious compromises, ingenious compromises and courage. today, compromise is no longer seen as a virtue, but as selling out, and political courage, well, it has given way to schemes to raise the money needed for the next election. so we keep asking, is the system broken? the short answer is, yes. the larger question, can it be repaired? not without a large injection of political courage. right now, i don't see very much of that. back in a minute.

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