possible to get through the house they believe because it fits more closely with what they had passed previously. no word on what democrats think of this in. the white house they don't want any short-term solution. this is a slerm solution because it would bring this whole issue back up again heading into the winter of 2012. >> a couple of other points, it is similar to the mcconnell-reid or reid-mcconnell plan in that there was a bicameral up and down vote in a committee that would address future cuts and tax issues. there's some similarity there. the balanced budget amendment, is this a balanced budget amendment a clean balanced budget amendment or would it include the supermajority that raised the objections? >> it would be the clean one, andrea. it wouldn't have other things attached to it that other democrats thought there were political poison pills put in there by republicans. when you talk to folks around capitol hill they think there's a strong appetite for a clean way. you remember back in the '90s,

had there been one vote it would have passed the senate. they come close before they think there's appetite for it to try to run it again. >> we want to explain to our viewers that the president is speaking at la razza. we will have more on that throughout the rest of the day and throughout this hour. the pool feed and it is an organization of all the networks, all the television networks who cover the president there is some technical problem there. there's nothing editorial about it. we've had a technical problem with what is being put out from the white house coverage plan today. continuing luke russert, you've been covering this allç weeken and for the last couple of weeks. as you see the two sides shaping up, it's clear that john boehner and the president both want some sort of solution. they're saying they're flot going to let the debt ceiling lapse. it's not just positioning. it seems to be they were the grown ups in the room. there's a lot of resentment in the white house from what

boehner walked away from what they thought because deal. they're claiming the president didn't change the terms he just suggested raising the tax side. he didn't say it was a take it or leave it deal. how did it break down? how did it fall apart on friday night? >> it's your classic washington he said, she said. on friday night spaker boehner was emotional and gnat in the briefing room said we had a deal. it was for $800 million billion in revenue. there's speculation that speaker boehner spoke to folks on capitol hill and realized this type of tax increase was just very difficult. this was personal. i think if you look at the way in which this broke down there was sniping from both sides. president obama saying he couldn't get a phone call returned. speaker boehner angry the deal had fallen apart. even asked by reporters if he trusted the president? he said he did. i asked him if the relationship

was beyond repair? he said no. they've been talking over the week. it took a gigantic step back. it is central around this tax issue. within the republican conference of aides there have spoken to me and said the media has not done a good job portraying how big the taxes are to them. a lot of the member haves a religious fervor that any type of tax increase is not acceptable. boehner going from $800 billion in revenue could beç explainedo go up to $1.2 trillion which is white house suggested that wasn't a number is still open to debate was something is that boehner saw it as one aide told me impossible, a dis, they couldn't move it at all. >> one of if big issues is what are the markets saying and how are they reacting? it's been muted so far. i've talked to people, finance people who basically say that wall street is looking at this and saying both sides are talking about cutting spendsing and reducing the overall debt. so the conversation is at least

focused on what they want to see and there's still a belief that they'll get it done before this is all over. i wanted to play a little bit of hillary clinton. she has been traveling throughout the world in asia, in hong kong today. this was her attempt tory assure the markets. >> very interesting choice of words from her. >> as i have traveled around the region a lot of people have asked me about how the united states is going to resolve our debt ceiling challenge. well, let me assure you we understand the stakes. we know how important this is for us. and how important it is for you. the political rangeling in washington is intense right now. but these kind of debates have been a constant in our political life throughout the history of our republic. >> so that's a very interesting attempt atry assurance by the secretary of state who doesn't usually speak on economic

matters or domestic politics for that matter. >> i'm sure she remembers going through this in the '90s to some degree. i think the point she's hitting on is trying to calm saying this is washington, d.c. we do this all the time. there's always an 11th hour agreement. that's really what the princi l principals here areç thinking. it's similar to the government shutdown. both sides are going to position themselves to the bitter end to try to get the best deal possible. it's now become a dangerous game of chicken. if the senate fully rejects the house approach, and the house wholly rejects the house approach, what is the way forward? that is still being discussed you brought up the markets. john boehner mentioning in an interview this past weekend how bad tarp was. there's a lot of folks who remember that, not just the newly elected house republican markets. a lot of folks remember that market drop in 2008, they don't want to replicate that. the older folks who remember what happened during the shut down of 1995, they don't want to replicate that. a deal will get done, but there is still a very long way to go.

>> and no predicting how quickly it can turn. it can turn on a dime and then it is gut wrenching. trust me on that. thank you, luke russert. >> take care. in norway investigators say that the man accused of killing at least 76 people most of them teenagers at that island retreat may not have acted alone. oslo residents are holding a vigil today. 100,000 people have turned out for a march. they are grieving the tragic and terrifying loss of friends and loved ones. we see a picture here of the man. he was arraigned in a closed door hearing even though the suspect had hoped for a public event. he wanted to read a prepared speech filled with anti-muslim rhetoric. one of the survivors recounted the island nightmare on the "today" show with ann curry. >> i had a woman lying over my body. and i lied under her to police come to the main building.

>> she is 16 years old. today norway's royal family led a moment of silence. earlier a heartfelt tribute to the fallen. nbc's jay gray is live live in oslo with the latest. this is an sbroird turn out of people. we're talking about a relatively small country. this was a very high death toll. the worst of course since world war ii. >> reporter: well, andrea, if you consider this for the last several decades the total number of people murdered in all of norway is 40 a year. that's the average. 40 a year. they nearly doubled that in the span of two hours here. you talk about the emotion and the outpouring of support for those victims and for this country. i want you to take a look around. things have changed dramatically here in the last hour. we had a couple of hundred people here at a memorial that is building outside the main cathedral. now more than 2,000 have packed into this area and you talked about the vigil tonight there was supposed to be a march through the center of the city.

people holding candles held by the prime minister and former prime minister. that has been cancelled because they know over 150,000 people have made their way to oslo to be a part of this. they will meet at the town hall. as we move back around, i want you to see how far this memorial has stretched. sunday when we came for the initial service here, the day of mourning there was about a 12 by 12 grouping of flowers and candles. now it goes for more than a city block. it is out into the middle of the roadway. it's blocked the tram rail line here. and again, people continue to pour in. we see more than 2,000 right now and more on the way from every direction to the center of the city. it's amazing to stop and pause for hours some for a few moments. a lot of tears still. a lot of emotion. >> jay, i can't even imagine what it's like to be there. just watching it is so painful. thank you so much, jay gray. . up next, republican senator rob

portman of the senate budget committee joining us. and the politicians of the debt ceiling. send me your thoughts on twitter. this is "andrea mitchell reports" only on msnbc. this is larry. whose long day starts with arthritis pain... and a choice. take tylenol arthritis and maybe up to six in a day... or choose aleve and two pills for a day free of pain. happy chopping.

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in the debt ceiling debate, how are senate republicans dealing with their brothers and sisters in the house caucus? that could be an interesting issue for senator rob portman who serves on the smath budget committee and was the budget director under president george w. bush. thanks for joining us today. the debt ceiling was raised when you were budget director presumably it's been raised so many types over the past couple of years. it was never done with all of this fuss.ç why now? why has this become such a big deal?

>> i think it's for the same reason you see in the credit agency comments from standard and poors and fitch and moody's, the underlying problem, the high levels of debt, record deficits must be addressed. even if we weren't having this discussion about to raise the debt ceiling or not, we would have to address this problem. this will have happened again at the end of september if it's not resolved here, that's when the continuing resolution ends for this year's funding. this is the underlying issue that has to be addressed. >> senator i wanted to play a little bit of the president's comments at la razza, we think maybe even the thunderstorms interrupted our coverage of that. this is what he had to say. he was very combative. he said we had to deal with taxes in some fashion. we can't deal with spending cuts alone. let me play a little bit for you. >> neither party is blameless for the decisions that led oour debt. but both party haves a responsibility to come together and solve the problem and make

sure that the american people aren't hurt. if we don't address the debt that's already on our national credit card, it will leave us unable to invest in things like education, to protect vital programs. >> now, to your point of a short-term deal and the fact that the continuing resolution is going to expire in september only a week or so ago eric cantor was against a short-term deal. now the sticking point seems to be that the republicans want to do a short-term deal and revisit this is beginning of the year. whereas the white house says they want it to carry through 2012. isn't there some way to resolve this disagreement? j there is. ersus long-term that gets down to the tax issue that you raise. i'm sure republicans in the house, i know republicans in the senate would be happy to have a longer term decision here because that would mean more spending reductions. but in order to do that, the president has insisted that

there be tax increases now committed to and many of us believe with this weak economy that's not smart. we should be reforming the tax code in which we collect our taxes is the issue and economists across the board tend to agree with that. in other words, they think by changing the code and making it more efficient and focussing more on growth and investment you're going to increase economic activity and therefore increase revenue. that's the difference of opinion not long or short-term. >> the deal that was on the table from the white house perspective, the deal that john boehner walked away from did have an extension through 2013 and the details of the tax, the revenue side were supposed to be dealt with down the road. there was disagreement over the trigger, the enforcement mechanism how to gampbt that that would take place. but that would get to the issue. why can't republicans and democrats sit down and agree on tax reform and obviously takes weeks, months, you know. perhaps as long as a year to get

to that. you know better than i. why not deal with that down the road, what's wrong with extending the debt ceiling through 2013? >> i think if you're going to stick with the formula that seems to be accepted by all parties which you only increase the debt limit to the extent to which you reduce spending that's the $1 trillion about six months. doctors 2 .5 is until the end of the election cycle. then the question is can you do this without raising taxes or not? i think what you're suggesting the that there could be a compromise or there could be a commitment to tax reform manyç the short-term. i think that's essentially what this two-stage process is. let's agree to the $1 trillion which one of us can combine. the groups have come up with $2.6 trillion of spending reductions. let's agree to a trillion. in that time period let's go through the process of real tax reform and looking at the longer term spending problems report back.

i guess the compromise may be what kind of mechanism will there be to raise the debt limit. i think the two-stage process is where we're going to end up because we don't have time to deal with bigger issues like tax reform. historically you know usually the debt limit is for less than a year. 34 of the last 44 have been for less than a year. this notion that short-term is somehow the exception it's actually the rule. >> you know this better than i do, would you want to be going through this again in the spring in terms of the instability, the markets, the slowness of the economy and how stalled this recovery has been? why go through this agony again? >> it is kind of agonizing, isn't it. i think what the markets are look for again are dealing with the underlying problem. if there's a commitment made now to meaningful and credible reductions and a process to come up with further reductions and some structural changes in spending i think the markets boulder than if we extended the

debt limit or used some budget gimmicks to try to make it look good. it's going to depend on the substance of the agreement. and if during that six-month period there's some serious effort through that select committee or some other process to get there, i think markets would react more favorably to that than extending the debt limit. extending it is necessary, but not sufficient. you've got to deal with the underlying problem. >> is senator mccome's proposal still on the table and is that a fall back position for you? mcconnell did with that proposal was two things. one, he's re-assured the markets. second, he focused on spending. i think it's had a good effect. what you're going to see some out of this process over what is sometimes difficult to watch, the political process over the next 24 hours is a serious proposal that reduces spending short-term and then perhaps has a second stage where there is

tax reform and a look at the more structural changes that are needed on our debt and deficit to deal with it. i think -- >> what would you say to some of the house republicans? what could you say to some of the freshman who say this is not such a big deal, let's go past the deadline, default isn't an issue? >> i think it's a risk we should not take. i think it has economic risks because i do think that the rating agencies would then downgrade our debt. -day think there would be the possibility of default not so much on interest and the bondholders which can be paid more when you roll over our debt there might be some issues as interest rates go up. we can't afford that right now. we have a weak economy already. the growth numbers are disappointing. the increase many the jobless rate is very discouraging. it's time for us to come together and not figure out how to make it more risky, but how to create more certainty in the economy. there are a number of things we need to do and expanding exports

and getting energy costs down, let's not get into this post debt limit period. let's instead figure out the spending cuts between us. i think we can get there. again, there seems to be an agreement forming between the house republicans and the senate democrats that we do need to cut spending. let's do that and move forward and avoid that risk. >> former budget director senator rob portman. thank you very much. >> thanks, andrea. up next, the seven term congressman from oregon who oncç emailed colleagues this picture of himself. what has he down without the tiger suit? it could be career ending. it could be career ending. politico briefing us next. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage.

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if there's one thing the democrats don't need going into 2012 is another sex scandal. this time it's david wu. accused of an unwanted sexual encount we are a teenager.

congressional editor for politico joins us now. martin, hard to get your head around this, but -- what happened? >> yeah. that's the real question. what happened was the oregonian, the local paper there first reported that wuç was getting accused of unwanted sexual encounter. we don't know specifically what that means, what it is. it sounds bad. it sounds very serious. he acknowledged these accusations as being very serious. we don't have nor have we published the victim's name. and what happened over the weekend is behind the scenes democrats started to say, gosh, you need to go. you need to resign. no one's gone public with that. the leaders aren't gone public with that. what they did do is announce an ethics investigation. we know how long it takes for ethics investigations town fold. the house is working on the eric massa investigation. he resigned early last year. this is lot the anthony weiner

scandal. not in terms of what happened, but in terms of how democrats have to handle this. let's have an ethics investigation. that's not going to happen very fast. a lot of folks want wu to resign. you can't force a member to resign. >> nancy pelosi is obviously taking this very, very seriously. she had a conversation with him and referred to the ethics committee and said she wanted to ethics committee to take it up. as you pointed out they take forever to get anything done. he could be in hi next term, although he's not going to run again. >> he said he's not going to run again. there's going to be increasing pressure for him to resign and resign quickly. each day brings a new detail about this. there's a phone message left in -- according to the oregonian reporting left with these accusations. we don't know what's going to happen. what they learned from anthony weiner is if someone wants to stick around regardless of how bad a scandal starts to sound, they can stick around.

even anthony weiner eventually resigned under pressure. call to resign. there's definitely a lot of pressure being privately against congressman wu. >> for the three last presidential cycles this has been a solid democratic district. with redistricting it could become slightly more republican. that could be a seat that's in ply. thank you very much martin from politico. up next, the duelling debt plans. the blame game. what it all means for 2012. first, a record setting fine for antiques road show. a lucky guest at a taping this weekend of the popular pbs show in oklahoma brought in five cups carved out. turns out they are worth a fortune between $1 and $1.5 million. that is the show's most valuable find of all time. find of all time. check our attics, folks.somethie early on, you know,

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topping the headlines on "andrea mitchell reports," the northeast is breathing a bit easier today, but the south isn't so fortunate. according to the weather channel, southern states are steaming with temperatures rising above the 100 degree mark. the sizzling heat will return to the northeast thank you very much by friday. just in time for the weekend. the climate prediction center warns that more than t ever 95% of the u.s. should expect warmer than average temperatures until next week at the earliest. wedding bells were ringing for hundreds of same sex couples in new york city and upstate new york on sunday. the first day that it began legal. new york city mayor michael bloomberg a long time supporter of same sex marriages officiated at the wedding at gracy mansion. the front steps of his home. at least the traditional home for new york city mayors. two of his top aides. it was a rare occurrence. the mayor had previously only performed two weddings. one for his daughter, ema and

one for his predecessor, rudy giuliani. amanda knox was back in an italian court today fighting for her freedom. based on new analysis of the dna evidence that helped convict the american college student of murdering her british roommate. independent experts are testifying today that the evidence used to convict knox may have been contaminated. and arlington national cemetery is getting its annual makeover during the 15th renewal and remembrance project hosted by the professional landscapers organization. hundreds of lawn care, irrigation and tree care specialists are spending the day tending to the area. this the important after fallen care for the graves. most of the talk on the debt ceiling is behind the scenes as boast sides are trying to win support from their caucuses.ç joining me now with the latest lori montgomery and sam stein.

lorry, first to you on the hill. a lot of background sessions, a lot of briefings. what's the latest because of the hearings? >> it's pretty much what we heard yesterday is that speaker boehner is moving ahead in the house with his two-step process that would be tied to an approximately trillion dollar increase in the debt limit to get you through february, march. in the meantime they would create this new 12-member committee to look for additional savings. that committee would have to the recommendations could have to be adopted in order for the debt limit to go up again. then in the house, the senate, excuse me, senate democrats are fixing to brief us on their plan which has they harry reid indicated last night was going to be a $2.7 trillion package of cuts that would be paired with $2.4 trillion increase in the debt limit that gets you through

the 2012 election. >> it's hard to figure out sam, how harry reid is getting to $2.7 without any revenues? >> the going theory, the saufs not confirming it ises they're going to take the trillion dollars save from the drawdowns of wars in iraq and afghanistan, apply that ta the biden framework. i talked to harry reid's office today. couldn't get a yes or no answer on that. i did get out of leadership aides they're not going to impb kblud the entitlement reforms that president obama had offered. there's no raising of the medicare eligibility age. there's no means testing. you're looking at steep domestic discretionary cuts.ç >> sounds as though what harry reid is you can tag about doing is taking the most volatile issues off the table for now. but is he putting up enough that's actually hard wired

because if you talk about notional savings from wars that haven't been drawn down yet, a lot of things can happen between now and then. >> that savings started showing up when president obama presented his first budget it's always been seen as a little gimmicky. the house guys have been very reluctant to count it. it's not money that we're planning to spend. after their guys felt like they were sort of misled during the cr fight about how much was being saved, they're probably not willing to accept this kind of savings. >> it is in paul ryan's budget which is an interesting talking point that depps are putting out today. >> is this the kind of fudge that could actually get both sides to win support from their caucuses and get us past the initial crisis or the immediate crisis, sam? >> that is a great question. we have two conflicting paths. we have democrats saying we will not pass anything with a

short-term extense of the debt ceiling. we have republicans saying we only want something that allows us to make steep cuts. we want a balanced budget amendment. it comes down to how the conference is set. when reid presents his bill, how do they conference that out to get something to pass both chambers? i'm not sure there is the willingness to give the other side a victory, it's to get something done. >> a quick question, the balanced budget amendment proposal if it is a so-called clean balanced budget amendment without the supermajority what would be wrong withç having th come up with a vote in october in that the senate could always be guaranteed it would vote it down. >> i don't think the balanced budget amendment if it's just a vote if it's not included in the act ang it's not a big barrier. i do think at this point they spent the entire weekend working on boehner two-step thing. my understanding is that talks are still proceeding on that even as harry reid is turning to

this other sort of different idea. and i think that people are still trying to figure out is there a way to use this boehner two-stage package so that you can guarantee obama his debt limit increase in a couple of months from now. if there are triggers they're looking at. there are different things they can do. i think we're still not at the end point on that two-step strategy. >> sam stein from huffington post, thank you very much. lori montgomery from "the washington post." thank you both. will republican or democrat leaders come up with plans that can pass both houses, are esolve the crisis and what is the political fallout then? first to you, bob, do you think that the house democrats and the senate can craft something that involves john boehner's two-step approach that could actually get through and get the president out of this mess? >> i'm not sure and i think

anybody who predicts what the ultimate outcome of this is is a very brave person. the markets clearly from the reaction today think that in the end something will be cobbled together. what happened here is john boehner the speaker was reduced in some ways to being a kind of reluctant ventriloquist for the tea party because he was on the verge of a historicç deal with the president. both sides were having to give up things they didn't want to give up. he was forced to back away from that. i think the reason we'll probably get to a deal is baa he and mcconnell feared huge political repercussions of not making a deal. the president now appears to have the upper hand in terms of public opinion. then we go to 2012. we have a fundamental debate. it's not a debate about the debt ceiling. it's a debate about the size of government. it's a debate about whether or not we prefer for example tax cuts for people at the top or whether we want to take the ryan medicare plan and force all seniors to pay $6500 more a

year. i think that will be a powerful debate in 2012 no matter what happens here. >> michael steele, there's a lot of red meat for you. >> it is. he's laying a lot out there. i think though, you know, just to be serious for a moment and not get into the partisan back and forth on this, the reality of it is that we've watched our leadership in washington behave like children over the last few weeks especially this past weekend. i think people are very angry. folks i talked to in grocery stores and starbucks over the last couple of days are really ticked off right now. they feel that the leadership is losing sight of the bigger responsibility here. and that is making sure that the markets are stable enough to begin to create the jobs that are necessary for folks to get back to work. and i suspect that what you'll see get played out, andrea over the next few days is something that lori touched on at the end there, that is a coalescing around this two-stage process

despite the administration's on again, off again love, hate relationship with it. that's ultimately where the play is going to be in washington because it does allow us to get the debt ceiling done and set aside those bigger more thornier issues that boeb referred toç beat up a little bit later on. >> michael, let me ask you to pick up something else bob threw out there in passing which is john boehner the speaker was acting i think a ventriloquist. >> right. >> the bottom line is boehner no matter how he has tried to work with the president does have a difficult caucus with 878 freshman many of whom said they don't really care about the default. how do you deal with it in temples of practical politics. >> i think the practical politics within the gop is something that i certainly saw looming when i was national chairman. it is the inherent conflict between the establishment and this new generation of leaders

that have watched washington behave same old same old and now they've gotten elected they want to do something different. these guys came to the table and said what they wanted to accomplish and that was to deal with the spending by government. you know, bob and a lot of his friends on progressive side of the aisle can make fun of tea party activists all day long. but they have driven this debate to the point where we're not talking about how much more we're going to spend. but now how much more we're going to cut to streamline government. i think bob is right, the country is ready to engage and be engaged next year into a debate of the size of the role of government when it comes to spending our tax dollars. >> bosh i interviewed barney frank on friday, and he and other members of the democratic caucus were really angry at the white house for having put medicare, medicaid, social security on the table. how does the president deal with his angry base? >> well, i think the base will come around. look, i agree with michael, a

sentence i don't utter all that often. i agree with him that people are distressed about the irresponsiblity and the fact that people aren't behaving like adults in washington. i think the one person who's an exception to that right now pretty clearly in all the polling data is all the presidentç who has been reasonable. who has been willing to take on his own base. and frankly, i think there's a huge difference between saying wealthy people should pay more in terms of co-payments for medicare and replacing medicare with a voucher system where $5600 is year is a new price tag for every senior. i think there's a huge difference. between changing the cost of living provisions for social security and raising the age drastically for social security. so i think what the president put on the table and i wrote a column about this sort of favoring it and got a lot of angry mail from progressives was a reasonable compromise. it wasn't something he wanted. wouldn't be something i wanted. it was a way of giving something. they asked the republicans to give something.

there's been almost no give. you know why the president is right now i think a little invisible in these talks because anything he agrees to it appears will be rejected by the republican party simply because it has the obama stamp on it. not by mcconnell, not by boehner by those folks that michael was talking about who come to the house of representatives and who he doesn't get a lot of gratitude, he helped a lot last year. >> we have to leave it there. to be continued. bob shrum, michael steele. thank you both very much. >> and former clinton budget director joining us next on what happens in the u.s. were to default. but first, the prerace prayer that stole the show at this weekend's nascar nationwide series race in nashville. >> heavenly father, we thank you tonight for all your blessings. you said in all things give thanks. so we want to thank you tonight for these mighty machines that you brought before us. thank you for the dodges and the toyotas. thank you for the fords and most

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call this number or go to selectquote dot com. worthy at this great track in i'm thomas roberts. coming on "news nation", aç mother losing her 4-year-old son when he's struck and killed by a drunk driver. in a twist, the child's mom could face more time in prison than the drunk driver who killed her son. it's today's news nation gut

check. plus homeowners in one neighborhood are trying to evict a man who paid $16 for a home in foreclosure. he took advantage of an obscure law that's being challenged in several steps across the u.s. we're 15 minutes away. how much time is left before the debt ceiling stalemate goes critical? so far marks are betting it will get resolved one way or another. some say they're factoring in the debate has long last shifted to reducing the deficit rather than continuing washington's spending spree. joining us now senior fellow at the brooksings institution, former budget director and former vice chair of the federal reserve among other titles. maybe we can get a reality check from you. these competing proposals first of all, what would be wrong with a two-tier approach with revisits this when the amount of money, whether it's a frl or whatever runs out and we hit the next debt ceiling, revisiting

this in the spring, would that spook the marngts? -- markets? >> nobody knows exactly what the markets will do because we've never done this before. the fear is that we do a temporary debt ceiling increase and then we have to go through this whole ugly argument again before the next election. and it can only get worse. it can only get more finger pointy and unpleasant and idealogical. that's the fear. i think at that point markets would beç distressed and we'd l be distressed. it's no way to run a country. so it would be best to get a grand bargain and raise the debt ceiling long enough to get at least beyond the election. it looks like that might not happen. we may have to do it in two stages. if that happens, then it doesn't

have to be a disaster. it depends how it's crafted. if we raise the debt ceiling temporarily and then put in place a really strong set of procedural changes that would force the congress and the president to come together and solve the problem, then we might be okay. i don't think the idea of another commission i've been on two of them in the last couple of years is such a bad idea. we -- when you get people from different parties together really seriously working on the problem then they compromise. >> your committee, your commission with former budget chairman from the senate on the republican side came up with $650 billion, a one-year payroll tax hike, to freeze domestic discretionary and defense spending to cap medicare,

medicaid, to gdp growth 1% which would reduce 40% below projections of the increase to broaden the tax base and lower rates. proposal and long term, you would phase things in and not take it immediately while the economy was in trouble. what would you say to people of the house republican caucus, freshmen members, often tea party members who say this is not a big deal. it is okay, and what if we got downgrade and if the default deadline were pass and which )and ben bernanke could bail us out and the fed could buy treasury bonds, and what is your opinion having been at the fed and the budget congressional office that you helped to start? >> well, my message is they don't understand how serious it s. it is unthinkable for the strongest economy in the world and a nation that has always honored its debts to be facing

default. it is totally unnecessary. we could raise the debt ceiling and figure out how we are going to get our debt sort of coming down, which is important. but, i think that what is lost is how key the u.s. is to the whole world economy and how key the interest rate is to the future of our own economy. if the markets lose faith in us and the interest rates go up rapidly which could happen, it is not just the government that could pay interest, the taxpayer, and it is all of us, and we have more on the home mortgage and the car loan and on commercial loans, and everything goes up and this could throw us into a new recession. so, it is really serious stuff. we have to solve this problem.

>> alice rivlin from the brookings institution, thank you very much. >> thank you. and what political story will be making headlines in the next 24 hours is next on "andrea mitchell reports." [ male announcer ] this is lisa, who tries to stay ahead of her class. morning starts with arthritis pain... that's two pills before the first bell. [ bell rings ] it's time for recess... and more pills. afternoon art starts and so does her knee pain, that's two more pills. almost done, but hang on... her doctor recommended aleve because it can relieve pain all day with just two pills. this is lisa... who switched to aleve and fewer pills for a day free of pain. and get the all day pain relief of aleve in liquid gels. ♪ ooh baby, (what) can i do for you today? ♪ [ female announcer ] need help keeping your digestive balance?

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which political story will make headlines in the next 24 hours? chris cillizza joins us now. chris, we have to be talking about the debt ceiling showdown and whether we will have daylight? >> eight days left before the august 2nd deadline and we will be talking about it over the next 24 hours and i know you have been talking about e. john boehner will release his plan and the details forward and how harry reid and the senate democrats want to move forward. the plans are not that far apart, but the question is where is compromise. sunday night we saw the compromise break down when they

tried to craft a deal, but can they put it together? >> let's hope that monday is better than saturday and sunday combined. that is going to do it for this edition of "andrea mitchell reports," andjoin us tomorrow as thomas roberts is in for tamron hall. he is next on "newsnation." hi, thomas. >> well, we are going to be following every development from capitol hill that you heard andrea cillizza talk about. i will have a chance to talk to pat toomey who sits on the budget committee. and more on the gunman of the mass killings in norway and why he launched this attack. "newsnation" is just minutes away. stick around. ca's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios. make it your favorite too!

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hi, everybody, i'm thomas robertsç in for tamron hall. "newsnation" is following the batt