partisan deal and isn't going to solve anything. anyone who believes the balanced-budget amendment would do us any good, would anybody agree with the economy already weak it would be smart to cut federal spending by a trillion dollars? to cut from 25% of the gdp, which we're spending now, down to, say, 18% when the balanced-budget amendment would require? i wonder what this street theater will accomplish, except for us waste one more week fiddling around, waiting for the fire to start. that's "hardball" for now, thanks for being with us. more politics ahead, with al sharpton. republicans play a game of chicken i call it cut, cap and crackup. tonight the republicans' waste of time in primetime. a political vote that ignores that we are a country on the verge of default.

rupered murdoch used to be the most feared media boss in the world. today he says he wasn't responsible for what happened at his own company. yeah? and denial is a river in egypt. plus bill clinton's smash-mouth advice for president obama. but does the president have a better plan of his own? we'll have that hot story. welcome to the show. i'm al sharpton. tonight's lead, i think we may have found the answer to what's happening to the republican party. they've been drinking so much tea, i think they may be dizzy. at this hour, house republicans are debating and are expected to vote for the most extreme budget plan in years. it's the tea party's cut, cap and balance bill. earlier today, president obama

set it was a political effort, not a serious one. >> that is not an approach that could pass both chambers, not an approach i would sign and it's not balanced. we don't have any more time to engage in symbolic gestures. we don't have any more time to posture. republican leaders are holding this vote in a desperate attempt to stop a civil war within the gop. the tea party and its corporate backers have declared open season on any gop lawmaker who supports another budget alternative. mitch mcconnell's plan to raise the debt limit, sending a warning letter to every republican in congress saying, quote -- we will refrain from backing any member of consequence who supports the mcconned/reid/pelosi run-and-hide plan. the few remains grownups in the

gop know they have to raise the debt limit in order to avoid an economic disaster, but the new kids in the party are refusing to play along. joining me is republican congressman mo brooks from alabama, a tea party freshman, an original co-sponsor of the cut, cap and balance bill. congressman, this bill is being debated on the floor now. it would roll back spending to 1966 levels, i believe. it's so extreme that even the ryan budget would be unconstitutional, and it protects tax cuts for the rich and corporations. how is that a balanced approach, if your view? >> i respectfully disagree with your characterization of it. quite frankly, in fy-12, all it cuts is roughly 11.5 billion dollars. that means it's only addressing 7% of the problem in fy-12. we would all like to spend money

on programs, but in order to do that you have to have the money in hand. >> no question about it, congressman. >> we simply do not have the money to spend on all the things -- >> i think you're doing a great job of telling us the budget, but why don't you answer my question. how do you protect the rich and corporations in the bill and call that shared sacrifice or balanced approach? >> well, i disagree with your characterization that they're being protected in the bill. >> what is being cut from corporations and the rich? >> first, let's talk about the people you call rich, i call job creators. the top 1% of wage earners, they are paying 34% to 38% of the entire federal government income tax bur. >> you call rich people job earners. >> job creators, absolutely. >> you feel, therefore, by protecting them, you're protecting giving people jobs?

>> well, i'm not saying we're protecting them or not protecting them. what we have to do is look at the economics of tax increases. we have seen the effects of high taxes, and what high taxes do is reduce the ability of people with capital, people who own businesses who wants to create new businesses or expand their businesses. if they don't have the revenues in order to do that, then they are not going to be able to create the jobs that everybody needs in america. >> but congressman, we have seen the effects of tax cuts. let's be serious. you had a tax cut in 2001, then 2003, when we had to higher taxes under bill clinton, low unemployment. when we've had these years of tax cuts, what are you talking about? we're not crazy here. where has your theory worked out when we've seen these tax cuts since 2001? >> well, i don't want to get into your mental state, but let's talk about the bush tax cuts. they occurred in 2003 -- >> we're not talking about my mental state, we're talking

about your math. >> you brought up whether you were crazy or not. >> no, i said we, americans. you said when they're high, they provide jobs. the facts say that is not true. explain to me how you can say with these tax cuts in 2001 and 2003, why unemployment has gone up. >> i was explaining it before you interrupted me. will you give me time to continue? >> yes, sir. >> thank you. in 2003, when the bush tax cuts were implemented one of a roughly 5.8% unemployment rate. it had dropped to 4.5%. during that same period of time you had 7 to 8 mill jon jobs created in the united states of america, so the bush tax cuts did exactly what they were supposed to do. unfortunately everything went awry when nancy pelosi took over the house of representatives with her philosophy of government and senator harry reid took over the suns senate, and with the threats that those two and their philosophies posed to the job creators in america,

you saw our unemployment immediately start to go the wrong direction, but the facts are there, look at the department of labor statistics. >> sir, sir, i need to get to the -- >> the deficit declined during this same period of time. >> i need to get to the debt ceiling. the fact is those tax cuts are still in place, so the fact that anyone got in office didn't change the tax code at all, which is not the statement you made. >> in january of 2007. >> so the fact that congress changed has nothing to do with the tax cuts, they're still in play and unemployment is 9.2, so we can have different opinions, we can't have different facts. the tax cuts did not change with pelosi and reid went in. >> in january of 2007, a radical anti-jobs agenda was put into place by the house and by the senate. that radical agenda was magnified after the election of barack obama, where business was no longer a friend, where job creators were no longer friends, where they were foes. there were places to go to tap more money to pay for programs

we cannot afford. >> the tax cuts remain in place. my question was since the top 1% needed this protection, or needed this because they were the top job creators, that has not changed. >> if america will give us the white house and -- >> the law is still there. >> if america will give us the white house in november of 2012, and will give us the united states senate in november 2012, and with conservatives, and we can reverse the damage that has been done by this congress -- >> let me go to another fact. >> you'll see unemployment get better and jobs created. >> the facts speak for themselves. let's go to another fact. you're saying that the debt ceiling doesn't matter -- >> no, i've never set that it does not matter. it does matter. so this same that you were quoted as saying, about a "the washington post," there should be no default on august 2nd. in fact, our credit rating

should be improved by not raising the debt ceiling. you didn't say that? >> well, it does matter. >> so you did say it? >> well, no, let's talk about what you're talking about here. >> i'm talking about what you were talking about. >> that's right. what i was talking about was in the context of whether an increase or a lack thereof in the debt ceiling would have an impact on the credit rating in the united states of america. that's one thing. it's another thing to say whether it would or would not have a impact on the economy, or some of the programs of the united states of america. it definitely will have an impact on the economy of the united states of america. it definitely -- >> it will affect the credit rating, but that doesn't affect the country? >> it should not affect the credit rating, because we will have plenty of money to pay every single creditor the amounts of money owed under our contractual obligations to those creditors. >> how will it make it better? >> how you will it make it better? >> yeah. >> it will show the world we are engaging in the kinds of

austerity measures now being asked of greece and others in the same spots we are in, and as long as we pay or creditors -- >> if we default and we show we can pay even defaulting, you think that's progress? >> there should le no default, because we have over $2 trillion in revenue and our credit obligations are roughly $200 billion. there should be no default unless the president of the united states abuses the trust we have placed in him. >> you don't feel we need to raise the ceiling then, because you again feel it doesn't matter, we should just go ahead through august 2nd? >> no, that's not what i said. >> i'm asking. >> i said there would be an adverse effect on the economy when you suddenly withdraw from the economy $1.5 trillion that is now being spent. unfortunately there will be a greater adverse effect on the economy if we continue to incur dead loads we cannot sustained that can result in an insolvency

and bankruptcy. that's the major threat. >> do you believe we should avoid going into default by raising the limit august 2nd or before? >> my position is very clear, if we have a balanced-bullet constitutional amendment that will correct the long-term danger of the federal government going into an insolvency and bankruptcy. under those circumstances i will vote to raise the debt ceiling, however reluctant i am to do it. >> whether you get the big or not, you know this won't pass the senate. >> i don't know if it will or won't. >> do you believe we should raise the ceiling? yes or no. >> if the senate is responsibility, then cut, cap and balance will pass. >> let me ask you a question -- do you agree with the president that we need to raise the ceiling, president obama? >> i will vote to raise the debt ceiling if we address the long-term issue of federal insolvency caused by -- if we do not address the long-term issue, the risk associated with piling on higher and higher debt loads,

if we don't address that, then, no, sir, i will not vote for the debt ceiling. >> ronald railinger, who was someone i'm sure you admire, let me show you what he said about the dead ceiling, maybe you should tell your colleagues this. >> i'm familiar with this quote. >> congress consistently brings the government to the edge of default before facing its responsibility. this brinksmanship threatens the holders of government bonds, those who rely on associate security and vet ran benefits. the united states has a special responsibility to itsself and the world to meet its obligations. it means we have a well-earned reputation for reliability and credibility, two things that set us apart from. >> in the name of ronald reagan, i hope you go back and do the right thing. >> if we had had a r07b8d reagan-type president in the white house right now, we would not be facing these circumstances. >> i think a president in the

white house right now sounds more like ronald reagan than you do. >> i respectfully disagree. thank you, mr. sharpton. >> ronald reagan's quote is much more in line with what you're saying -- >> ronald reagan i suspect would differ. >> thank you for your time. >> have a good evening. robert reich is joining me now, he was labor secretary under president clinton. he recently wrote that the tea party kids have trashed the stage. thank you for being with us, profe professor. 9 guy i spoke with, the congressman, doesn't look like a child, but what he said to me does not make a lot of adult sense. can you help me here, professor? >> i was listening as well. frankly i was disturbed by what

he said. one thing i do agree with is the long-term debt does have to be tack many. the health care costs are what's pushing up most of the big expenses we have. hopefully we'll be doing that, but much of what he said, honestly did not make sense. bill clinton ended his eight years in government with $22 million net new jobs, and a budget surplus. what did george bush do? he turned that into a gigantic deficit. he didn't find a spending bill he couldn't resist. he created 8 million new jobs. well, in eight years, you know, bill clinton created 22 million net new jobs, george w. bush created 8 million. 8 million new jobs is nothing to

crow about. the medians wage in the united states after the bush tax cuts went into effect continued to drop. the first time we've seen the median wage dropping in any administration at any recoveries. the top 1% of were the job creators. he tries to tell us the trillion nairs and billionaires at the top were the job creators, and that's why we have to protect them. >> al, i heard that, i've heard it over and over again. they're all reading from the same script. it's a republican script they've got down and honed it very well, but it doesn't make sense. it's contradicted by the facts. defense never below 70%, yet the

economy grew faster between 1950 and 1980 than it has grown since then. bill clinton as marginal tax rates on the very wealthy 39%, higher than george bush's highest, and then the economy did better under bill clinton than george bush. so the idea that you have to cut taxes on the wealthy in order to get trickle-down benefits, it hasn't happened. it is average worker is worse off today after the bush tax cuts than before. everybody knows that. i mean, when the republicans try to mouth this republican script, i don't understand how they can do it with a straight face, knowing that americans know that they are not telling the truth. that's the good thing. i want them to tell the american people that they are fantasizing the economic condition.

>> but here's what worries me. >> the more you tell people that, the more people understand who is having the fantasy here. >> this is called the big lie. george orwell understood this. if you say the same thing over and over again, even though people at first know it can't possibly be true, but if you say it over and over and over and over again, if you use your own network, fox news, and all of your other outlets, and it's said over and over again, eventually you might start believing it. i think that's what the republicans' playbook. >> but i also believe that one match, you strike it in the dark, you start breaking through the darkness. that's what we're doing. professor robert reich, thanks for your time this evening. amazing testimony today. rupert murdoch proved that denial is a river in london. can he continue as head of news corp? >> plus michelle bulk imagine surges.

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i didn't know, and it wasn't my fault. that's what we heard from rupert murdoch today. he took no responsibility. i'm not buying it. that's next. ♪

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son and heir apparent james, but the politicians were downright polite, compared to the rogue activists who snuck into the hearing. thanks in part to rupert's wife wendy who jumped up to defend murdoch. while the hearing gave up humble and pie, we didn't get any answers. >> was there anyone else at your organization investigate this at the time? >> no. >> can you explain why? >> did anyone bring this fact to

your attention? >>.blackmail charge, no. i can't answer. i don't know. i don't know anything about that. >> i don't know. >> you are responsible -- you're not responsible? >> no. >> the people i trusted to run it, and then maybe the people i trusted. >> can a man who knows so little and blames everyone else continue to run a media empire? joining me now to answer that question, from london, msnbc's martin bashir, and "vanity fair's" contributing editor sarah ellison. she's written extensively on news corp. and the phone hacking scandal. thank you both for being with me. i've read your piece. let me start with you, sara.

what was your impression of the temperature today. we saw a man that seemingly didn't know anything, that seemed his age. he's 80, in fact he country stopped them from helping to answer hi -- was this -- the testimony coaching in how to act in front of the grilling? >> i think this is the big question. either that was a brilliant performance, where no one can lay a glove on him, because he didn't know anything and can't speak to any of the details, or he really has lost it. i think that all of my experience with him, and all of the experience of other people who have worked with him say that he is very much in the details of his company and the operations.

>> what were your impressions? do you think that he was being gen wine or not? do you think the members of parliament were convinced he didn't know anything? >> i think for once, reverend al, being 80 years old was deployed to great effect. he looked pitiful and pained, couldn't remember names, places, times. couldn't remember the fact that reporters under his watch in his company blackmailed, paid police officers, illegally hacked people's phones. he didn't know any of it. yet interestingly, whenever it came to answering the direct question, he was absolutely adamant and robust -- no, he didn't know, and it was all the blame of people nameless individuals well below the company line. i think if you reflect on that as a performance, you have to ask yourself what kind of

corporate governance is there invested in a man who is not only the chairman, but the chief executive of news corp. that he can't remember anything that he ever does, has no control over the behavior of his journalists. can you imagine, reverend al, if you and i who now work for nbc, if our president allowed us to say things on air that we couldn't substantiate, we would be on fire, in serious trouble, and he would would stand up and take responsibility for that. >> let me ask you, you wrote the article that was in great detail. one of the things that i noticed in the article, you're talking about, as martin referred to, policemen that were allegedly bribed, monies that were used to do things that were illegal. how does someone give money, cash, to do things and no one ever have to account to higher authorities on where is all of this cash coming from? i mean, i run an organization.

a lot can happen, but when people start handing me, somebody has to explain what are we doing with all these cash outlays? >> i think this gets to the question of willful ignorance, which is what i think we saw in part today. they don't want to be asked about this, they don't want to be told about this kind of criminal activity, and maybe they aren't, but it certainly begs the question, if you are allowing people to pay $2 million worth of hush money for victims of phone hacking, then when is it that you're going to sit up and take notice of those kinds of payments? >> and settling all we're talking about the respond right he here. clearly he can't walk out with the same reputation. what is the effect on murdoch and news corp.?

and what will that have as an effect going into the 2012 election cycle when they had such a huge space in a big megaphone? >> the last ten days can only be described as a cosmic transition. ten days ago every politician off and onned over this man. they kissed his ring. prime minister david cameron had him as his first visitor at number 10 downing street after he successfully built a coalition government last year. tony blair, his press secretary alastair campbell, saying we also invited rupert murdoch in through the back door. he always kay through the back door. that was ten days ago. virtiely every politics is treating him as if he has a cajun like leprosy.

during this period, not only was there this very close relationship between the all-powerful media mogul which could literally swing elections, but members of his staff were paying police officers, who were supposedly charged with representing and protecting the public. so what you have is an have a break down in -- and you know it was absolutely the essential commodity. if you can't trust your politicians and you can't trust the police, and you can't trust the media, you're running out of trust for any kind of institution in your country. that's why the government, the parliament in this country has suddenly risen up and woken up to what's happened. that's why there's an immensz amount to get to this bottom. it's not just rupered murdoch and his empire that's in

trouble. it's actually the nation's essentially trust, the things that glue the elements of -- >> martin, thank you. thank you, sarah. thank you both for your time. ahead, the republican party accuses president obama of a crime. it's today's con job. we'll show you why he's winning the debt fight. now is no time to let up. stay with us. every day, all around the world,

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the head of the republican national committee accuses president obama of a crime. that's our con job of the day. last month president obama made a video at the white house, a video about a campaign raffle. >> hi, everybody. ivity a pretty big announce wherein about the campaign, where you can join me for dinner. we're setting another place at the table for joe biden. >> desperate republicans smelled a scandal. she said president obama broke the draw, from fund-raising, and he wasn't attorney general eric holder to investigate. quote -- i never expected i would be in this regrettable

position, but the president's conduct and white house staff's stonewalling leave me no choice. >> yes, reince, it's a sad job, so hey, might as well be you. >> the obama administration said it was filmed in the residential part of the white house, so it didn't violate any rules. they point out the president didn't even ask supporters for money. beyond that fact he clearly didn't commit a crime. veechbtly you, reince, forget. someone also used it as a backdrop. >> this country needs a president who clearly needs that. >> the strength, the focus, the characteristics these times demand. >> i'm optimistic about america, because i believe in the people of america. i'm president bush, and i approve of this message. >> the gop logic here is, well,

okay. there is none. when gerb gerb made a campaign video in the white house, it was a good move, great performance, you did it, mr. president, you were simply brilliant, but when president obama does it, it's against the law. another sad chapter in his time as the head of the rnc. the ridiculous double standard is a con job of the day. copd makes it hard to breathe, so i wasn't playing much of a role in my own life,

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is shows 58% of americans back the plan for balanced approach for cuts and tax increases. just 36% agree with the gop's

cuts only proposal. sorry, gop, america's not drinking your tea. in other words, the american public favors the president's vision by 22 percentage points it doesn't stop there. if the only way to get an agreement is to raise taxes, then 62% say the gop should compromise and raise taxes. it's not just the deal itself. president obama has a 47% approval rating. meanwhile, just 25% approve of the way the republicans are handling their jobs. so these numbers say democrats are winning. but are they? let's see. joining mess, former dnc chair and pennsylvania governor ed rendell. he's also an msnbc news analyst,

and bob herbert, a distinguished senior fellow at a think tank. bob, how would you rate the strategy so star? do you think it's wrong or right? >> politically the strategy is very good, and i agree with you, the president is winning this battle, but i think it's a wholly manufactured crisis. there should be no controversy around raising the debt limit. the republicans should have agreed to raise it, as they did several times during the bush administration, just raise it and move on. the real crisis in this country right now is an employment crisis, which is why the economy is in the tank. what the two parties should be negotiating is a way to get americans back to work, and then leave the debt issue, the long-term budget deficits and debt issues into -- into the medium term. deal with the jobs crisis first, and then deal with the debt issues, which are serious, but deal with them subsequently.

>> i had a congressman telling me if we protect the top 1%, jobs will come from heaven, i guess. >> we should be clear that most people in power are happy about the top 1% are doing well, so they don't feel we need radical changes. >> sudden just heard these brand-new polls, nobody has given them because they came out moments ago. politically you've won election, you know what polls means. what does this say from a political step? >> you just heard from bob the most contingent -- we need to deep with it right now. we should raise it in a two-sentence bill, and later on we need to do something -- and that means restructuring entitlement programs, it means a cut in spending, but also

increases in revenue. it's absolutely imperative that we go down that track, but your question, what does the polls mean? the polls means the president is winning on two fronts. he's the adult in the rooms. the republicans look like children who say you have to do it our way or we're going home. the president seems flexible. he's clearly the one thinking about what's right for the nation in the long run. secondly he's winning on the substantive ground. the american people are focused on job crazy, but they can't understand why 38% of corporations in this country pay no federal taxes because of the loopholes. they don't understand why we give the oil companies tax breaks at the time of record profits. yes, he's winning on substance and on the perception.

you and i gray we should be talking about job, but bill clinton said if he was president right now, his advice, he would just go around the congress and he would invoke the 14th amendment and let the court stop him. i would raise it without hesitation and force the courts to stop me. do you think that president obama should do that? or do you think he's playing it wiser, the way he's engaging it and exposing the other side for their political positions? >> you never know what the ramifications are going to be if the president does do that, but the thing that i'm very concerned about and the thing that would make me lean toward former president clinton's position is that what both sides are proposing will hurt the economy and damage the

employment situation even more, because each side is talking about all sister. so do that when the economy is in the tank is really self-geeing. >> one of the things we're seeing here, governor, is a face-off. the poll also tells us that 62% want compromise, but 62% of republicans want their party to stick to its positions. so are the republicans playing to their base, even though it may cost the country? even though it may put us in a default? are they saying my people, my voters, my constituents want me to hold the line, and that's what i'm going to do? >> there's no question about that. and one of bob's former colleagues, david brooks said it beth about ten days ago in "new york times." he said the people in the house of representatives, those republicans, a lot of them they don't care about what's good for the country at all.

they just want to win an idea logically battle. in fact they don't care what's good for their own party. the path they're taking us down is a path that the polls show the nation overwhelmingly rejects. it's going to be bad for their party electorally as well, but most importantly it's bad for the country. the consequences are enormous, not just for bondholders, but they're enormous, because it would throw the country into a second and maybe even more severe rerecession. we cannot risk that. >> i've got to go. governor rendell, thank you, and since i was a kid, and bob herbert was a kid, this is the first time since his daily news days, i got to ask him the questions. >> he is one of the very best we have in this country. >> no question about that. thank you both for your time. ahead, a day of grilling and pies, all over rupert murdoch.

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you get nothing for driving safely. truth: at allstate, you get a check in the mail twice a year, every year you don't have an accident. the safe driving bonus check. dollar for dollar, nobody protects you like allstate. welcome back to the show. now for the hot stories today, we bring on our power panel. joining me in the conversation is sirius/xm.

radio host joe madison. also with me a.b. stoddard, social editor and columnist for the hill, and rory cooper. are they looking for mr. or ms. far right? the new poll shows the tea party queen, michele bachmann is surging in the gop polls. last month she only had a 3% approval rate, but she's shot up, now has 16% of republicans backing her in the gop race. rory, does her rise show continued unle ease? >> i think that examine now and next november you'll hear a lot from all the candidates a lot on

the debt. you'll so i think you'll here a diverse of opinions. that's a good thing, because conservatives are debating the right specific facts, while all we're getting is the status quo from the other side. >> why is michele bachmann surging and the others are not? >> i think if you asked the question for the next two weeks you would have a devil poll number. more taxes, more spending, more regulation on the left, so you're going to have a spirited debate how to fix this economy. >> joe madison, you laughed all the way through that. >> well, the reason i -- michele bachmann is surging, because he

is speaking to the tea party. she is say the kinds of things they want to hear. my audience, for example, thinks she's very shallow, and she's going to blaze out at some point. what i do agree with my respected colleague here today is someone the debate starts and we get serious, i think that's when other candidates will emerge. >> personally i hope she's the candidate. >> let me go to a.b. what are you saying? seeing and hearing in terms of the surge of michele bachmann. is it bothering people on the hill? >> well, michele bachmann does not have a lot of friends in the house republican conference. there's a lot of ill will there toward michele bachmann, but she's doing very well in iowa. she's not the overall front-runner, al, she is still behind mitt romney. if you look at all the polls,

he's still holding up more than people expected when people thought he would be pup meld by the health care liabilities and flip-flops and everything else. >> but she is definitely the front-runner in iowa, set to win the ames straw poll on august 13th. there's a tea party wing and an steam wing. and they're actually bundlers who have sat out this race so far, have not given to romney or others, and some are even talking to rick perry. if rick perry steps into the race, she's got a steal party problem, because he starts to peel votes away from her, from that part of the coalition. so far so good for her in iowa. again, rory is probably right that a couple months from now, we could be talking about someone else. people rise and fall pretty quickly. we'll be right back. i want to get one more issue in front of the panel.

stick with me. we'll be right back with our panel.

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let me pick up where we left off. joe madison, a.b. stoddard and rory cooper. handily defeating the front-runner mitt romney, or dr romney is 48, 35, 50/35 mishl. try to answer the question this time, how do you think any of them close the gap with the president? >> first off, obviously you're selectively choosing polls. >> there's -- >> hold it, rory. rory, you're quoting state

polls, i'm quoting national polls. we vote for president? 50 states, not one. president obama is not in the primary against them. he's in the general. so try again. how do you close the national gap? >> you're asking about general election matchups. if you're looking at president obama because of his terrible jobs report, because of the economic growth, you have president obama coming out there at the press conference every day. jay tapper asked him, can you name one specific on entitlements? he can't name one specific reform he's willing to do. how can you lose all these states? >> it seems hopeless to get a republican on the show to answer the question. why don't you try for me. can you explain how they can try to close this gap? >> the reality is they have to keep doing what he just did. >> avoid the question. >> what gap are we talking about? >> well, and -- well, didn't you