>> production assistance for "inside washington" was provided by all written communications and politico. >> they are here to represent us, not to bicker and fight. >> this week, more bickering and fighting over the nation's debt. >> a number of republicans in congress are insisting on a different approach. >> i gave it my all. unfortunately, the president would not take yes for an answer. >> the giant game of chicken coupled with bad news on the economy gave wall street the worries. senator john mccain lashes out at fellow republicans who

refused to bend. >> that is not fair. that is not fair to the american people. >> i completely, totally, 100% disagree with senator mccain. >> and if nfl owners and players can compromise, why can washington? -- why can washington not? one-bedroom first, let me brighten up your weekend with more allows it is about the economy. turns out the recession was even worse than we thought and economic growth for the first six months of the year has been the slowest since the recession ended. of course, we have the debt crisis. at the conclusion of the nfl locked up, the owner of the new england patriots at they hope they give a listen to the people in washington because the debt crisis is a lot easier to fix then this deal was. as we put this program to gather at week's end, we are faced with

the same problem we had last week -- we do not know how this will end, so let's stop -- let's talk about what has happened. what will happen if congress fails to raise the debt ceiling? >> interest rates would skyrocket on credit cards, on mortgages, and on car loans, which amounts to a huge tax hike on the american people. >> the president has often said we need a balanced approach which in washington means we spend more and you pay more. >> the house speaker will fall of the president's prime time tv address with one of his own -- he has been traveling -- having trouble with his own people, so much so that he was forced to postpone a vote on his debt reduction plan. charles, you write that trying to force this issue, turning a blocking minority into a government authority is not just unconstitutional in spirit but self-destructive practice. what is your message to that blocking minority? >> you have gotten as much as you can.

it is quite remarkable. the boehner plan achieves a lot of the republican goals. it has no taxes, all cuts, and it establishes a principle of cutting spending if you want to raise the debt ceiling. you have achieved that. there is no way you can achieve more, holding only one house of the congress. take it because otherwise the republican chances in 2012 will be deeply damaged, and that is the only way next year's election in which republicans can change the structure and the ideological trajectory of the country. >> media folks for the past few days have spent a lot of time on boehner's problems with house members who refused to budge, but an unnamed operative is quoted as saying that ever offered a four liberals is a loss at this point. we may win on the politics, but the policy battle is lost. do you agree? >> yes. the move has been totally to the

republican position on taxes. the fact that we have a better plan -- boehner plan that is the centerpiece of deficit reduction that continues to tax a firefighter in new york and emergency nurse at twice the rate as a hedge fund manager and nobody even objects to it in any way and to do so would be the third rule of politics. the biggest element in our deficit today, according to the congressional budget office, is the $2.60 trillion hole left by the bush tax cuts. that is it. we do nothing on the revenue side, so, yes, republicans have won. >> two columnists both right this week about the perils of central some. one right that americans have lost track of what the president is really for. you wonder if he has lost track of himself. has the president lost track of

himself in this debate? >> i do not think he has lost track of himself. i think he has allowed so much ground now that he is not a major player in this. he can pretend that he is, but when he agreed to link the debt ceiling with deficit reduction, the game was over. >> do you think congressional democrats trust the president to do what they believe is the right thing in this? do they believe he will sign whatever comes his way? >> they already know he is not protecting democratic principles because he was willing to give away so much in his negotiations. he gave everything in the grand bargain. all he kept was some revenue increases. he put social security and medicare on the table. there is no reason for congressional democrats to think he is representing their interests, but they are saying, as opposed to members of the republican caucus, they will blow up the place, so

congressional democrats are going along with the president in order not to have the country to fall. >> let's put this in perspective -- first of all, this is a precedent-shattering. we have never had the economy hold the nation's economy and destiny ransom on a debt ceiling bill. if anybody thinks this is the only time it will ever happen, they are kidding themselves. they are delusional. republicans have laid down a predicate now that every party will now follow. i do not care if it is a republican president and democratic house. there will be the same sense of extortion and ransom in the future. that is a perverse development. >> the reason is unprecedented is because the level of our debt is unprecedented. under this administration, the obama administration, publicly held debt -- that means the debt that the chinese, the saudis are holding, which has to be paid, or we become argentina -- has risen from about 40% of gdp to

70%. this is in three years. >> if we hit 80% or 9%, we become greece, and that is exactly where we are headed on the obama budget -- if we hit 80% or 90%. that is why republicans decided this is a time in which we have to decide which way to go. we ought to have this debate. we have to have it. it will pass now, but it has to be the central argument in the next years. otherwise, we are headed over a cliff. >> fair enough. what about the downgrading of our bonds? >> you initially said why don't republicans take the victory? it is because there is a nihilist caucus, which is, "we want to burn the place down." they have strapped explosives to the capital, and they think they are immune from it. the tea party caucus once this crisis. do we want to do this again six months from now?

they like the trauma. they want to do it again. >> i thought we were not supposed to accuse our political opponents of being terrorists. >> the debate is, as we're saying, " -- could and political ally against the bill -- political ally peer let's talk about that. >> to hold out and say that we will not agree to raising the debt limit until we pass a balanced budget amendment to the constitution -- it is unfair. it is bizarro, and maybe some people who have only been in this body for six or seven months or so really believe that. others know better. >> folks like senator john mccain have been in this town for too long, and they are the ones who have gotten us into this mess year after year after year. i'm glad i have only been here six to seven months because i reflect where a lot of the american people are. >> that is congressman walsh of eleanor responding to the

criticism of senator john mccain. a politico columnist, roger simon, wrote the congress has become a fantasy baseball camp in which amateurs role in the hall pretending they are major leaguers. >> i am sympathetic with the objectives of the conservatives who are rejecting this deal, but they are shooting themselves in the foot. two examples -- friday morning, the president steps out and says we are going to go for a deal coming out of the senate. by not giving boehner the victory thursday, the center of gravity and leverage shifted from the house to the senate. second, friday, you got these catastrophic economic numbers showing that the economy has grown at less than 1% in the first half of this year, which is utterly -- it was not only a slow rate of growth in the spring, but a revision of the

growth in the winter and disastrous. yet, all of the talk in town instead is about the debt ceiling and about the damage republicans may do if they stop the raising of the ceiling. the republicans are achieving huge objectives in the boehner plan, and yet, they are giving away the political advantage and the leverage and the attention. >> could boehner lose the speakershipped over this? >> john boehner is the victim of keep your friends' clothes and your enemy closer -- keep your friends' clothes and your enemies closer. erick kanter has been joined at the hip with him -- eric cantor. john boehner brought a different style of management to the speakership. nancy pelosi -- her moment of truth was the health care bill.

she leaned and muscled and pushed and persuaded. a majority of democrats, overwhelming, past the health care bill three different times. john vander promised not to be that kind of a speaker. but when a speaker loses a vote and the perception of power is power in washington, it is a weakened speakership. >> charlie cook said many house and senate members in the 2012, 2014, 2016 are going to lose their seats because congress has become a laughingstock over this. >> to pick up on what marks -- what mark said, john boehner -- the blandishments that worked in the past do not work anymore. you cannot do earmarks. what they worry about, some of these younger members, is a primary on their way. they are happy to snatch defeat from the jaws of victory because for them, it i ia personal

victory. >> who is in trouble? orrin hatch maybe? >> absolutely. >> that is the hornets' nest of john boehner's existence. freshman of south carolina who went into the house chappell and came out and said they had collectively agreed after seeking higher power and instructions, to oppose john boehner. >> south carolina has been here before. [inaudible] they are prepared to do it again. >> that was 1861. >> do you have a statute of limitations on south carolina? >> but it is not just republicans. sanders, the independent senator, liberal. he is suggesting a primary

challenge to the president. >> not going to happen. there is no way that the democratic party is going to undermine the first african american president in american history. it would be catastrophic. it will not happen. absolutely zero chance. >> his personal ratings remain high enough. >> they are not extremely high. then there is a disenchantment, and it began -- it was always a conflict between a president and congressional delegation of his own party. they know they have different interests. this relationship was really but should last december when the president capitulated on the bush tax cuts at t t end of the session to get the budget agreement. a democratic covers man from massachusetts said at the time, "if i went to buy a new car with barack obama negotiating for me, i would end up paying the sticker price on a car with no

radio." >> the governor of texas finds a balanced budget this week. they can do it in texas, why not in washington? >> we held the line on taxes and balance the budget exactly the way we said we would do. we prioritized. we cut spending. we tighten our belts. just like you all have had to do in your businesses and your personal lives. >> looks like they have cut back on the lighting in taxes, too. texas governor kerrey on signing the state budget. president and and i predict what will happen if they fail to raise the debt ceiling. perry says the federal government should follow the lead of texas. he supports the federal balance budget amendment. by the way, nice little campaign slogan -- we did it right in texas. >> that is what america is looking for, another texas governor. the one place that they can get

marks for his presidency is when comparing who is responsible, and by two to one, people say george bush and his policies. if you close your eyes, rick perry sounds like rich little doing george bush. it really does. i have a role. i remember the bumper sticker of any candidate on my car who uses the words optimize, proactive, or prioritize. i was leading in his direction, but when he said prioritize, that did it. >> you don't like his english. >> he can do in texas what most states can do. they do not have armies. they did not fight wars. they do not have global responsibilities. one aspect of this whole discussion thatt is being overlooked, ignored, whether the

debt ceiling will be raised for two years or for six months, the way this thing is going, given what is on the table now and the possibility that there will be cuts, there will be massive dislocation in this country. children are going to find that their access to hospitals will be cut back. senior citizens will take some hits. there will be -- education will take big hits with the pell grants. to achieve the so-called cuts they are talking about would mean that a lot of people could be severely hurt. >> but we cannot sustain this level of debt forever. >> we cannot, but here is what is wrong -- we have to get control of the deficit, but we do not want to do anything on

the revenue side. all of the pain is coming from the cuts. you are still leaving those tax cuts to the wealthy untouched, still living subsidies in for the oil companies untouched. everything to the poor folks and middle-class folks, they bear the brunt of it. >> met monday this week -- "my view is we should have a president who agrees to cut, cap, and balance the budget" -- mitt romney. >> he does not want to get too far out on a limb in the spirit in the grand bargain, there were revenue increases, closing loopholes that nobody wants to defend, except for grover norquist, who is having an incredible amount of power in this debate. there's a counter intuitive thing here. you have to spend some to get out of the economic morass we are in in order to stimulate the

economy and get jobs and get revenue back into the -- >> as i said at the beginning of the program, it looks like we are shrinking rather than expanding. the numbers for this last quarter are terrible. >> in the long run, the spending that we have is completely unsustainable, and the money is in entitlement. the problem is that one of our two parties has declared that it does not want to see any changes. nancy pelosi has said she will not accept cuts in medicare or social security. when fdr invented social security, life expectancy was 62. today, it is 80. it was intended to make sure that those few people who live beyond 65 did not enter destitution. now it means our adults are spending almost 1/3 of their working lives on retirement. when bismarck invented the pension in the '88 is, life

expectancy was 46. -- in the 18 eighties, life expectancy was 46. he was a genius, not a philanthropist. what we have now is a system that is unsustainable. you see it in europe. that is why we have to discuss this. until democrats yield on structural changes in entitlements, we are hanging over a cliff. >> does that -- didn't the president agree to some cuts? >> raising retirement to 67. in the republican bill, there are reforms medicare that would save $300 billion. they do not want a payment advisory board which will change the payment system and incentives. >> the president of united states is on television every other day. name one structural change in entitlements he has ever enunciated in public. 1. >> raising the retirement age to 67? >>e has not. >> it was part of this negotiation -- >> he was asked about a week ago. "was structural changes will you

ender in entitlements?" he did not mention that. he had every opportunity. he has not. >> mark, you were trying to get a word in. >> you talk about the recession and the numbers, and they are devastating. the number of people unemployed, but that has come with a cost to the federal treasury. we have lost $3 trillion in taxes not paid because of what happened to the economy. in other words, the shrinking of the economy and not growth of the economy. that contributes to it. my point is you could make an ideological case for cutting spending at this point. you cannot make an economic case in a time where we have 9.2% unemployment. you take federal spending out of the equation, and the economy will shrink more going into 2012, and it is a disaster economically. >> we have to be honest about this -- we had two wars that

have been fought and financed by borrowing. we have tax cuts, a huge tax cuts for the wealthy that have been financed by borrowing, and that has added to this economic mess we are in right now. >> this week, it was said this president is the most spendthrift president in american history. >> let me give you one number -- in the eight years in office, the bush adminintration had a deficit that never exceeded 3.5% of gdp. in three years in office, obama has averaged 10%. and pres. in post-war history. >> you will agree also when bush left office, he left a $1.20 trillion deficit in his way? >> absolutely. what we have had as a result of obama policies is the weakest recovery since the second world war. with reagan, you had 6%, 7% of growth in the economy in the

rebound. now, it has averaged under 3%, and in the last nine months, under 2%, and in the first half of 2011, 0.9%. essentially a flat recovery. >> who was george bush's predecessor? was america then flourishing? did we have a balanced budget? did we have growing unemployment? did we have a rising tide? did we really? >> did we had a surplus? >> for goodness sakes, did everybody want to be like america than? is that the case? >> and who squandered that? bush was a big spender. >> i have news for you -- the current democratic president is called obama, not clinton. >> but you are asking him to undo in three years what bush did for eight years.

>> when the president goes on television, as he did on monday of last week, to redress our crisis, and starch with -- starts with "george bush," your eyes will. he has been in office for three years. take responsibility. be a grown up here you have run america on growth and change for three years, and what did you get? a growth rate of under 3%. >> did the bush tax cuts yield anything? >> [unintelligible] >> republicans are still fighting to keep the bush tax cuts. >> the 1984 campaign of ronald reagan in his reelection. in every of the statement, he was running against the kaiser mondale policies. he did not hesitate to run a rerun. the campaign of 1980. you know, the idea that nobody should mention -- george bush has been the most circumspect

for president in our history. he has taken away any target that the democrats might have, much to their regret and chagrin, but i think reality is that this was not the first time a president has mentioned his predecessor. >> we have about a 1-year or maybe two-year statute of limitations of you blaming everything on your predecessor. time is up. >> that is not written into law yet. is the giant collection of egos, the owners of the nfl teams, could make a deal, what with it be like? >> without football, there would have been a lot of miserable people run the country. >> there are any way. i began this broadcast by courting the new england -- quoting the new england patriots owner. they got a 10-year deal.l. >> yet, but it was their money. at what it -- that is what they were fighting over. >> still, it looked like it was

a terrible conflict, and they got 53%. the players get 47%. good deal. >> do you think congress ought to operate on the same principle, that they did not get paid? >> i think we ought to send the nfl negotiators to washington. >> the key here, i think, is that they reached a decade-long agreement with spending caps. [laughter] >> and no revenue increases, charles? >> that is a showstopper. >> we negotiate six months from now. >> charlie dell, the former new york senator. roger goodell is his son. there is political blood. >> if we are making the connection. spending caps. after remember that. and no know what?

>> no new taxes. >> unlike government, they actually sell a product people want. >> i could not disagree more. think about the iowa national security next time. >> on that bipartisan note, we close. thanks. last word. see you next week. >> for a transcript of this broadcast, log onto >> for a transcript of this broadcast, log onto

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