fineman, thank you very muchç r joining me tonight. >> thank you, lawrence. >> coverage of the president's address to the nation and the response of the speaker of the house starts right now. good evening from new york, the president is about to address the nation on the ongoing negotiations and stalemate over the debt ceiling increase that's being proposed in washington. president obama is expected to speak for about 10 to 15 minutes. he will surely seek to reassure the country, reassure financial markets that the debt ceiling must be raised and somehow will be raised by the august 2nd deadline. two minutes following the conclusion of the president's remarks, republican speaker of the house, john boehner, will address the nation from the

speaker's ceremonial office on the house side of the capitol building. msnbc will have live analysis after both speeches. i'll be joined by chris matthews, howard fineman, and melissa harris-perry, as well as white house senior advisor david plouffe and tea party freshman republican congressman joe walsh. president obama tonight will likely reiterate his positions that he has taken in these negotiations, including his politically sensitive offer, revealed last week, to make changes to medicare and social security in exchange for a republican compromise on an increase in government revenue. here now, the president of the united states. good evening, tonight i want to talk about the debate we've been having in washington over the national debt. a debate that directly affects the lives of all americans. for the last decade, we've spent more money than we take in.

in the year 2000, the government had a budget surplus, but instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts while two wars and an expensive prescription drug program were simply added to our nation's credit card. as a result, the deficit was on track to top $1 trillion the year i took office. to make matters worse, the recession meant that there was less money coming in, and it required us to spend even more on tax cuts for middle class families to spur the economy, on unemployment insurance, on aide to states so we could prevent more teachers, firefighters, and police officers from being laid off. these emergency steps also added to the deficit. now, every family knows a little credit card debt is manageable, but if we stay on the current path, our growing debt could cost us jobs and do serious

damage to the economy. more of our tax dollars will go towards paying off the interest on our loans. businesses will be less likely to open up shop and hire workers in a country that can't balance its books. interest rates could climb for everyone who borrows money, the home owner with a mortgage, student with a college loan, the corner store that wants to expand, and we won't have enough money to make job creating investments in things like education and infrastructure or pay for vital programs like medicare and medicaid. because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it. and over the last several months, that's what we've been trying to do. i won't bore youç with the details of every plan or proposal, but basically the debate has centered around two different approaches. the first approach says let's live within our means by making serious, historic cuts in

government spending. let's cut domestic spending to the lowest level it's been since dwight eisenhower was president, let's cut defense spending at the pentagon by hundreds of billions of dollars, let's cut out waste and fraud in programs like medicare and at the same time let's make adjustments so medicare is still there for future generations. finally, let's ask the wealthiest americans and biggest corporations to give up some of their breaks in the tax code and special deductions. this balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. it would reduce the deficit by around $4 trillion and put us on a path to pay down our debts, and the cuts wouldn't happen so abruptly to prevent us from helping middle class families get back on their feet right now. this approach is also

bipartisan. while many in my own party aren't happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. while republicans might like to see deeper cuts and no revenue at all, there are many in the senate that have said yes, i'm willing to put politics aside and consider this approach because i care about solving the problem. and to his credit, this is the kind of approach the republican speaker of the house john boehner was working on with me over the last several weeks. the only reason this balanced approach isn't on its way to becoming law right now is because a significant number of republicans in congress are insisting on a different approach, a cuts-only approach, anç approach that doesn't ask e wealthiest americans or biggest corporations to contribute anything at all. does nothing as asked on top of the income scale, such an approach would close the deficit

only with more severe cuts to programs we all care about, cuts that place a greater burden on working families. so the debate right now isn't about whether we need to make tough choices, democrats and republicans agree on the amount of deficit reduction we need. the debate is about how it should be done. most americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her medicare before we ask a corporate jet owner or the oil companies to give up tax breaks that other companies don't get. how can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? how can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for. that's not right. it's not fair. we all want a government that

lives within its means, but there's still things we need to pay for as a country, things like new roads and bridges, weather satellites and food inspepgs, services to veterans and medical research. keep in mind under a balanced approach, 98% of americans who make under $250,000, would see no tax increases at all. none. in fact, i want to extend the payroll tax cut for working families. what we're talking about under a balanced approach is asking americans whose incomes have gone up the most over the last decade, millionaires and billionaires, to share in the sacrifice everyoneç else has t make. and i think these patriotic americans are willing to pitch in. in fact, over the last few decades, they've pitched in every time we passed a bipartisan deal to reduce the deficit. the first time a deal was passed, a predecessor of mine

made the case for a balanced approach by saying this, would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their share or would you accept larger deficits, higher interest rates, and higher unemployment, and i think i know your answer. those words were spoken by ronald reagan. but today many republicans in the house refuse to consider this kind of balanced approach, an approach pursued not only by president reagan, but by the first president bush, by president clinton, by myself, and by many democrats and republicans in the united states senate. so, we're left with a stalemate. now, what makes today's stalemate so dangerous is that it has been tied to something known as the debt ceiling, a term that most people outside of washington have never heard of before. understand, raising the debt

ceiling does not allow congress to spend more money, it simply gives our country the ability to pay the bills that congress has already racked up. in the past, raising the debt ceiling was routine. since the 1950s, congress has always passed it, and every president has signed it. president reagan did it 18 times. george w. bush did it seven times, and we have to do it by next tuesday, august 2nd, or else we won't be able to pay all of our çbills. unfortunately, for the past several weeks, republican house members have essentially said that the only way they'll vote to prevent america's first-ever default is if the rest of us agree to their deep spending cuts-only approach. if that happens and we default, we would not have enough money to pay all of our bills, bills that include monthly social security checks, veterans benefits, and the government

contracts we've signed with thousands of businesses. for the first time in history, our country's aaa credit rating would be downgraded, leaving investors around the world to wonder whether the united states is still a good bet. interest rates would skyrocket on credit cards, on mortgages, and on car loans, which amounts to a huge tax hike on the american people. we would risk sparking a deep economic crisis. this one caused almost entirely by washington. so defaulting on our obligations is a reckless and irresponsible outcome to this debate, and republican leaders say they agree we must avoid default, but the new approach that speaker boehnor unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts would force us to once again face the threat of default just six months from

now. in other words, it doesn't solve the problem. first of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all americans would have to pay as a result. we know what we have to do to reduce our deficits. there's no point in putting the economy at risk by kicking the can furtherç down the road. but there's an even greater danger to this approach. based on what we've seen these past few weeks, we know what to expect six months from now. the house of representatives will once again refuse to -- again, they will refuse to ask the wealthiest americans to give up their tax cuts for deductions. again, they will demand harsh cuts to programs like medicare, and once again the economy will be held captive unless they get their way. this is no way to run the greatest country on earth. it's a dangerous game that we've

never played before, and we can't afford to play it now. not when the jobs and livelihoods of so many families are at stake. we can't allow the american people to become collateral damage to washington's political warfare. congress now has one week left to act, and they are still pass forward. the senate has introduced a plan to reduce default which ensures we don't have to go through this again in six months. i think that's a much better approach, although serious debt reduction would still allow us to cut entitlement and tax reform. either way, i've told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of congress and a compromise that i can sign. i'm confident we can reach this

compromise. despite our disagreements, republican leaders and i have found common ground before, and i believe that enough members of both parties will ultimately put politics aside and helpç us ma progress. now, i realize that a lot of the new members of congress and i don't see eye-to-eye on many issues, but we were each elected by some of the same americans for some of the same reasons. yes, many want government to start living within its means and many are fed up with a system in which the deck seems stacked against middle class americans, in favor of the wealthiest few. but you know what people are fed up with most of all? they are fed up with a town where compromise has become a dirty word. they work all day long, many of them scraping by, just to put food on the table, and when these americans come home at night, bone tired and turn on the news, all they see is the same partisan three-ring circus

here in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they are offended by that, and they should be. the american people may have voted for divided government, but they didn't vote for a dysfunctional government. so i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. america, after all, has always been a grand experiment in compromise. as a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test the proposition at the heart of our founding that out of many, we are one. we've engaged in fierce and

passionate debates about the issues of the day, but from slavery to war, from civilç liberties to questions of economic justice, we have tried to live by the words that jefferson once wrote, every man cannot have his way in all things. without this mutual disposition, we are disjointed individuals, but not a society. history is scattered with the stories of those who help fast to rigid ideologies and refuse to listen to those who disagreed, but those are not the americans we remember. we remember the americans who put country above self and set personal grievances aside for the greater good. we remember the americans who held this country together during its most difficult hours, who put aside pride and party to form a more perfect union. that's who we remember. that's who we need to be right now. the entire world is watching, so

let's seize this moment to show why the united states of america is still the greatest nation on earth. not just because we can still keep our word and meet our obligations, but because we can still come together as one nation. thank you. god bless you, and may god bless the united states of america. >> that was the president speaking from the east room in the white house. two minutes from now we will be taking you to the ceremonial office of the speaker of the house, just off the floor of the house of representatives for a statement by speaker john boehner of ohio in response to the president's remarks. the president did not make any new news tonight in the speech, he began with a outline of the deficit history, our current deficit history, and how we got to here. how he entered office with a deficit of over a trillion

dollars, it has now risen. he said it's the responsibility of both parties to solve that deficit, anfç he outlined his balanced approach, his balanced approach being one of spending cuts and tax revenue increases and then made the case for his balanced approach. ending with a pitch, in effect, to viewers and listeners to if you agree with his balanced approach, please, let congress know. ultimately, that was the only action the president suggested taking -- that anyone take, coming out of this speech is viewers who support his position on the balanced approach that includes tax revenue increases should let washington know. he pointed out that many republicans in the senate have come to the agreement that we need the balanced approach that includes tax revenue increases, and then said that the only reason, the only reason that we are stuck is because of a

faction in the republican house of representatives that seemingly will not compromise on anything. he's pointed out that speaker boehnor had come to a personal agreement with the president that the balanced approach that included tax revenue was something that could be done in a compromise. he quoted thomas jefferson towards the end of the speech on the matter of compromise, since this is a speech seeking compromise, every man cannot have his way in all things. the speaker is expected to speak for approximately six to seven minutes. here he is now. >> good evening. i'm john boehner. i serve as speaker of the whole house, of the members of both parties that you elect. these are difficult times in the life of our nation. millions are looking for work and have been for some time and the spending bing in washington is a big part of the reason why. before i served in congress, i ran a small business in ohio.

i was amazed at;h$ow different washington, d.c. operated than every other business in america, where most american businesses make the hard choices of paying their bills and living within their means, in washington, more spending and more debt is business as usual. i've got news for washington, those days are over. president obama came to congress in january and requested business as usual. he had another routine increase in the national debt, but we in the house said not so fast. he was a president asking for the largest debt increase in history on the heels of the largest spending increase in history. here's what we got from that massive spending binge, a new health care bill most americans didn't ask for, a new spending bill that's more useful for producing material for late night comedians than jobs, and a debt that sparked a crisis without precedent in my lifetime or yours.

the united states cannot default on its debt limitations. what we told the president in january was this, the american people would not accept a debt limit without spending cuts and reforms. over the last eight months we've asked the president to partner with us to do something dramatic to change the fiscal trajectory for our economy, renew a measure of faith in our government, help small businesses get back on track. last week the house passed such a plan and with bipartisan support. it's called the cut, cap, and balance. it cuts and caps government spending and pays the way for a balanced budget amendment for the constitution, which we believe is the best way to stop washington from spending money it doesn't have. beforç we even passed the bill in the house, the president said he'd veto it. i want you to know i worked to

identify a path forward to implement the principles of cut, cap, and balance in a manner that could secure bipartisan support and be signed into law. i tell you, i gave it my all. unfortunately, the president would not take yes for an answer, the president's demands changed. the president has often said we need a balanced approach, which in washington means we spend more and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant that we cannot make fundamental changes to our entitlement programs. as the father of two daughters, i know these programs woentd be there for them and their kids unless significant action is taken now. the sad truth is the president wanted a blank check six months ago and wants a blank check today. this is not going to happen. you see, there's no stalemate in congress, the house passed a

bill to raise the debt limit with bipartisan support, and this week while the senate is struggling to pass a bill filled with phony accounting and washington gimmicks, we're going to pass another bill, one developed in support of the washington leadership of the u.s. senate. obviously, i expect that bill can and will pass the senate and be sent to the president for a signature. if the president signs it, the crisis atmosphere he has created will simply disappear. debt limit will be raised, spending will be cut by more than $1 trillion, and a bipartisan committee of congress will begin the hard, but faces. the individuals will be elected representatives of the people doing the job they were elected to do as outlined in the constitution. those decisions should be made based on how they are going to affect people who are struggling to get a job, not how they will affect some politician's chances of getting reelected.

this debate isn't about president obama and house republicans. it isn't about congress and the white house. it's about what's standing between the american people and the future we seek for ourselves and our families. you know, i've always believed the bigger the government, the smaller the people. and right now we've got a government so big and so expensive it's sapping the drive out of our people and keeping our economy from running at full capacity. the solution of this crisis is not complicated. if you're spending more money than you're taking in, you need to spend less of it. no symptom of big government more menacing than our debt. we begin to liberate our economy and our future. we are up to the task, and i hope president obama will join us in this work. god bless you and your family, and god bless the united states of america. >> that was speaker of the house john boehner responding to the president's address to the nation over what the president called a stalemate over the debt

ceiling negotiations. speaker boehnor said there was no stalemate, making the case that there was no stalemate simply because he has been able to pass some bills in the house of representatives only that address this with absolutely no possibility of passing that legislation through the united states senate. ignoring the stalemate, he ignored many of the specifics raised by the president in the president's address. to consider both of these speeches, joining me now, the host of msnbc's "hardball," chrisç matthews and msnbc contributor melissa harris-perry. chris, your reaction to first the president's speech. >> well, i thought the president used a couple of words, fair and balance, fox commercial, interesting, fair, then balance, then fair and balance over and over again to make a case for his position. i thought he came off as the good mother in the old testament story of king solomon who was willing to give the baby to the

other mother, whether the dishonest mother was willing to kill the baby than have the other have it. i think he's leaning towards compromise and the republicans are leaning against compromise. there was a dishonest statement by boehnor, there was no -- as you were suggesting, there was no bipartisan action by the congress on the republican proposal. that vote in the house, i believe, was 234 votes for the cut, cap, and balance bill and only 5 democrats within that 234, which was, in itself, up to republican support in the house. i don't know who's writing his stuff. we had a senator on "hardball" today saying the same thing. must be some, rncc or somebody, but it's not the truth and wrong for the speaker of the house to say something that's not true. there was no passage of a bipartisan or debt ceiling increase measure at all.

he shouldn't have said that, i think it taints the whole statement. >> melissa, the speaker did not address the way the president singled him out in his speech, in the president's speech to say that speaker john boehner was one of the republicans who wassing are to agree to a balanced approach, what the president calls a balanced approach, one that includes some tax revenue increases, and the speaker did not answer this question that the president asked ioç his speech based on that balanced approach, how can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. >> absolutely. look, i have to say it was a little upset or stressed out listening to the president's speech, because when he first started describing sort of the first approach, he said there was two approach and started describing the first approach, i thought he was describing a republican approach, cut, cut, cut.

oh, okay, he's saying things about the other side, then i realized, oh, no, that's what the president is advocating, all of these cuts, but i was sort of taking a deep breath, he gave boehnor a lot of cover here, he said boehnor is a reasonable guy, there's a portion of the party that wants to do the right thing here, we have an understanding that entitlements are going to have to be reformed, so let's try to move forward, so when boehnor comes on behind that and says as chris just says, a number of things that were dishonest but also, i think, not responding in any kind of honest way to this reality about the need to raise revenues by asking people to pay their fair share. he says look, i'm the father of two daughters, but, you know, i'm the daughter of a mother who relies on social security, and the fact both of these speeches were meant to soothe the markets, but i'm worried about soothing the anxieties of american citizens who right now

are worried they are not going to have their most basic needs taken care of because they are fighting in washington at this point over something that is not real. this is not a real crisis, it could be solved this hour. >> i was surprised the president did not make news. here is the president coming out, asking for network time in the middle of something we've never had before, which is a stalemate over raising the debt ceiling. i understand that he had to teach some basicç things about this to the general public, but he doesn't get another chance at this, does he? the national address over the stalemate on the debt ceiling. if he was going to make news about it, wasn't he going to have done it here? >> i think there's concern in the media -- our media about that. he asked for time in primetime, usually presidents want that if they want to make an announcement. clearly, he did not.

he openly stated this is a debate he's endangered in. i think that's why the networks chose to give the opposition its turn, but it did put the president on an equal level. you saw the advantages of the white house press corp., they know how to put a press together, reported speaker boehnor, once again it was a slim shot operation by the republicans. he was looking off north by northwest somewhere, something up in the air there, i'm not sure what it was, but clearly it wasn't the normal sort of presentation where you look at the camera. and by the way, still don't know why they put a podium up, lek -- stand up in front of a desk like a normal person and talk like a regular person to other regular people, but they continue to try to pretend they are some sort of counterbully pulpit when they are not that.

both sides blew it. president shouldn't have gone on national television to give a political address. >> melissa, the president did have to at some point educate the public, who's not paying attention to every turn here, who doesn't hang on every word in his press conferences, doing a minor sampling of this debate that there is something important at stake here. he said it's a dangerous game that we'veç never played befor. he did everything he could, it seems to me, to get the uninitiated out there to understand the stakes involved in raising the debt ceiling. >> sure, look, his talking points were this is george w. bush's debt, his credit card, bad choices in previous administrations we are still paying for. second point is it's not all the opposition that's the problem, it's this right wing faction represented by the tea party being unreasonable, acting like freshmen, not taking seriously

their responsibility relative to the country, but here's the problem, every -- every element of this that is -- that is technical, that is about how much, that is about how long, all of that gets washed away in one big reality that the american public walks away from after these, you know, 20 minutes. it's that washington is broken. the people who we pay. we talk about this stuff that the government is too big, but the main vision of government we have other than dmv bureaucrats is these guys, in washington, talking to us. and the more that the president helps to create the idea that it is broken, and he simply helps to create the idea it is broken by spending network time, primetime, doing this. it actually benefits the gop, because the gop more than anything else is simply saying government doesn't work. it can't solve your problems, there's nothing about it that, you know, will lead us to job creation.

the president said at one point people are working hard all day and they are not paying attention. people wish they were working hard all day, so i think the issue is the more it looks broken, the better it serves the other side. >> thanks, chris matthews and melissa harris-perry, who will be sitting in forç rachel madd tomorrow night, rest of the week. thank you so much for joining us tonight. >> thanks, lawrence. >> coming up, joe walsh with the tea party reaction to both president and speaker boehnor's speeches. and later, white house senior advisor david plouffe joins us. my doctor told me calcium is best absorbed in small continuous amounts. only one calcium supplement does that in one daily dose.

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just take a picture, hit deposit and you're done. open an account today and put schwab mobile to work for you. the only reason this balanced approach isn't on its way to becoming law right now is because a significant number of republicans in congress are insisting on a different approach, a cuts-only approach, an approach that doesn't ask the wealthiest americans are biggest corporations to contribute anything at all. >> that was the president addressing the nation just minutes ago, this is our special msnbc live coverage of the

president's address andç the response to the president's address by house speaker john boehner. joining me now, republican congressman and tea party caucus member, joe walsh, thank you very much for joining me tonight, congressman. >> great to be with you, lawrence. >> congressman, the president said we're left with a stalemate, john boehner said there is no stalemate. how could the speaker say there is no stalemate? >> there is a stalemate, and again, it should come as no surprise that i was disappointed in the president's speech, but let me -- let me comment directly upon it. it was interesting, he mentioned the two approaches, and i agree with him on this, most of the republican caucus does believe we need to cut spending. pure and simple. and the biggest disappointment, lawrence, i had in this speech was i don't think the president knows where large swaths of the american people are. i held three town halls this

weekend, probably 400 to 500 people, and i would poll everybody in these town halls, and lawrence, i come from a swing district, and by far the option that most americans wanted, and it wasn't heck no, don't raise the debt ceiling, it was we know we have to raise it, but cut spending and reform the way washington spends so we never get here again. i think that's where most americans are, and i think that's why they sent us to washington. >> well, congressman, i can't argue with you on the views of your district, and certainly they must have views similar to yours because they voted for you, but we have polling a clear majority of not just all americans, not just democrats, but a clear majority of republican voters nationwide approve of the president's balanced approach that includes tax revenue increases through closing of egregious loop holes and other adjustments in the tax code. let's notç debate what the american people want.

the question is where do we go from here? let me ask you this question, would you rather reduce deficits and interest rates by raising revenue from people who are not paying their fair share like hedge fund managers that pay less than their secretaries or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? >> lawrence, again, a false choice, but it's an interesting one. >> congressman, i want to stop you. when you consider your answer to this, that is the question that president obama quoted in his speech, which was asked by ronald reagan, the single most important hero of the republican party, ronald reagan said he would rather increase tax revenues where they could in order to solve these kinds of problems. >> lawrence, it always slays me when this president quotes ronald reagan. >> because he agrees with ronald reagan, congressman, and you

don't. >> those two presidents, lawrence, had two enormously different visions of this country. one president, president reagan, lawrence, got government out of the way and off the backs of the american people, and we enjoyed a 20 to 30 year growth period. this president, lawrence, respectfully, as put the backs of government on top of the people. the american people are suffocating out there right now, lawrence. you talk about the wealthy, the top 5% of the people in this country pay 60% of the taxes for the first time in our history we have 51% of the american people that aren't paying any income taxes. lawrence, our government is too big. we have a government that spends too much, and we're bankrupting future generations, and we're not going to change that until we change this town. >> congressman walsh, you know that the government got bigger every year under the reagan presidency, so much bigger every year under the reagan presidency that ronald reagan had to ask

you in congress, you weren't there, but congress, he had to ask congress for a debt ceiling increase 18 times, and congress gave him a debt ceiling increase 18 times. would you have voted no on every one of the 18 ronald reagan debt ceiling increases? >> lawrence, i'll give you an honest answer, i don't know. what's interesting to me is -- >> so there might have been a debt ceiling increase you might have voted for, just not a obama debt ceiling increase. >> 20 or 30 years ago, who knows. what i find interesting -- you're right in your history, why is the debt ceiling such a big issue now? and i guess my answer would be is because the crisis is so big, one, this president for six months has ignored the problem, two, and the american people sent people to washington to no longer give this city a blank check. i would argue the american people finally woke up. you keep talking about this tea

party movement, lawrence, i think that movement is a lot bigger than your profession -- or actually, either party understands. >> i'm going to put congressman joe walsh as a maybe for voting for the reagan debt ceiling increases. congressman joe walsh, thank you very much for joining me tonight. >> thank you, lawrence. >> coming up, senior white house advisor david plouffe joins me from the white house.

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the new approach that speaker boehnor unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. in other words, it doesn't solve the problem. we can't allow the american people to become collateral damage to washington's political warfare. >> that was the president addressing the nation from the east room, beginning just 45ç minutes ago, he spoke for about 20 minutes, explaining the current stalemate, what he called a stalemate, in the debt ceiling negotiations. joining me now, senior white house advisor, david plouffe. thanks for joining me tonight. >> thanks for having me. >> can you trace for us how the administration went from at the beginning of the year, tim geithner, jack lew, asking for a clean debt ceiling increase, the kind we used to do all the time, a one-page bill that changed a

number in law to this point where the president has been through negotiations on a variety of very big deficit reduction bills of unprecedented size, including those with the tax revenue and now the one today that he's endorsed with harry reid that does not include tax revenue. how does it get from a clean bill to let's do these kind of giant reduction bills attached to a debt ceiling? >> we've always maintained we didn't think the debt ceiling should be held hostage. the president believes it's important for our economy. the numbers don't lie. if we don't begin to live within our means and significantly cut the deficit in the not too distant future, we won't have money for things like college loans, medical research, kids health care, so we have to get our fiscal house in order so that we obviously reduce the deficit and leave a better fiscal situation for future

generations, but also so we have the future to invest in things that will be good jobs and programs for our citizens. >> the president seems to be keep moving to whatever the new legislative reality is. if something gets ruled out as impossible, he moves to something that looksç more possible than whatever became impossible. here's speaker boehnor saying let's do cut, cap, and balance. i mean, that's going backwards. they are moving backwards in these negotiations. >> well, listen, the president, as you mentioned, was working with speaker boehnor to try and do a deficit reduction package that was balanced, that had revenue, had tough spending cuts, ones we thought the country could live with. that was our preferred approach. that broke down, speaker walked away from that, now we have a stalemate. the president said tonight, of the options in front of us, senator reid's option is the best one to get through the default crisis.

we have a lot of work to do on the deficit, but listen, there was a report that just came out on your competitor, cnn, that, you know, one of the ratings agencies is saying that if the boehnor plan is passed, it means a downgrade, that means a tax increase for just about every american and higher interest rates. as the president said tonight, that doesn't solve the problem. we need to do the smart thing in the short-term here to make sure we don't default, but also don't have it hanging over our economy. also get to deficit reduction, going to include smart entitlement reform but also tax reform. six months from now, we know what's going to happen. if they get their way, this committee congress is setting up will hopefully do a good job. but if they don't, that committee sailmates, republicans will say here's our $1.8 in spending cuts, cuts in social security, medicaid, medicare.

we're not going to sign up for that. over the next few days is we need politicians to compromise a bit, particularly house republicans. that's the only way we're going to get out of this impasse. >> the president identified speaker boehnor as one of the republicans, he mentioned republican senators not by name, but speakerç boehnor as one of the republicans who was willing to reach some kind of compromise that would include tax revenue increases, what the president calls the balanced approach. i didn't hear the speaker proudly announcing to the american people he was being so flexible in the negotiations, that he was willing to come to some kind of agreement with the president on that. was that an attempt to politically isolate the speaker from his colleagues in the house of representatives? >> no, it wasn't. i think that the speaker -- i think the president wanted to make clear to the american people that despite our disagreements, we have been able to find common ground, and with the speaker we tried to find common ground on the deficit.

i think his caucus, that is a tough sell. i think had we marched forward, we could have marshalled the votes for it, putting together enough republicans or marshaled votes for it. in the senate, you have republicans of all ideological spectrums saying they would be supportive of a balanced approach. that's what we need to do in the short and long-term. >> david, that's about all the time we have for tonight. i just want to congratulate you on your moment here, participating in history in the white house. the first presidential prime-time address on raising the debt ceiling. >> hopefully the last, lawrence. >> hopefully the last one. david plouffe, thank you very much for joining me tonight. still to come, a look at the policy side of tonight's speech with msnbc analyst howard fineman and ezra klein. ♪ ♪ you are my sunshine

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unfortunately, for the past several weeks, republican house members have essentially said that the only way they'll vote to prevent america's first ever default is if the rest of us agree to their deep spending cuts-only approach. if that happens and we default, we would not have enough money to pay all of our bills. bills that include monthly social security checks, veterans benefits, and the government contracts we've signed for thousands of businesses. >> that was the president from the east room of the white house in an address that began just a little over an hour ago, addressing the nation in prime-time. the first president to do so on the stalemate over raising the debt ceiling. a subject that has never been and the exclusive subject of a presidential address before. joining me now, msnbc political analyst and senior editor for "the huffington post," howard ç

fineman, along with msnbc contributor and "washington post" columnist, ezra klein. ezra, looking at the two speeches, the president's speech and then speaker boehner's speech, compare and contrast for us the policy positions outlined by each of them. >> obama's going for what he likes to call the balanced approach. and the balanced approach is some level of tax increases. now, remember that the deal obama offered boehner about a week ago now, or maybe a little bit less than that was $1.2 trillion in tax increases for $4 trillion in deficit reduction total. boehner walked from that. but boehner did say he would be okay with an $800 trillion tax increase if there were $4 trillion in debt reduction total. so in some strange way, the two aren't as far apart as you would think, but they can't bridge that final gap. so now boehner's arguing for no tax increases at all, but obama is sort of held to that same deal and is trying to continue to offer it to boehner.

>> let's listen to what the president said about the tea party and the unwillingness to compromise. >> now, i realize that a lot of the new members of congress and i don't see eye to eye on many issues. but we were each elected by some of the same americans for some of the same reasons. yes, many want government to start living within its means, and many are fed up with a system in which the deck seems stacked against middle class americans in favor of the wealthiest few. but do you know what people are fed up with most of all? they're fed up with a town where compromise has become a dirty word. >> howard, he never said the words "tea party." he kept saying new members of congress. i wonder who he was talking about. >> well, i don't know why he didn't just come out and say it, but a couple things here. first of all, i want to say that with the "huffington post," we're reporting that many of the websites in congress, the

members of congress' websites are down, apparently because of traffic, because the president said at one point, you know, let your member of congress know how you feel. and apparently a lot of them did. so the speech was effective in that sense, number one. number two, i have to disagree slightly with ezra here, because what mystified me about this speech by the president is, he gave a great speech for a policy of a few months ago or up to last week that's no longer where the ball game is. and the president slipped into the speech the fact that he's now in favor of the senate plan that is the harry reid plan, which also contains no revenues in it. so after giving a whole speech about the balanced approach that he's supposedly for, the fact is what the white house is supporting now in a last-ditch effort to do something other than what the republicans want to do, that would require another circus like this six months from now is a cut-only

plan that would, though, take the debt ceiling debate past the 2012 election. the president. didn't dare explain that in any detail, because it would undercut everything he just said, and it also would further infuriate the left wing of his own party. that completely mystified me. >> ezra, let's go to that. the reid plan, it seems to me, is a perfect one for calling the republicans' bluff, if nothing else. because it does do, as howard said, the dollar-for-dollar exchange on debt ceiling increase with spending cuts and spending cuts only, no uncomfortable tax revenue increases for republicans. and republicans are opposing ç. >> yes. howard is right, by the way, that the president did endorse the reid plan today, and they're still arguing for revenues after saying he would be okay with the cuts-only bill. the reid plan, what it does, is $1.2 trillion in discretionary spending cuts and then the

so-called congressional super committee to cut spending. it's actually, oddly enough, very similar to the first phase of the boehner plan. the place where the two are on cuts are not all that different. but it's designed to call the republican bluff. it's dollar for dollar, it's beyond the dollar limit you need to actually raise the debt ceiling. and the hope is that you can show that the republicans aren't going to go there. it's because they refuse to raise the debt ceiling without cutting medicare. >> lawrence, that's the speech that the president should have given tonight. i hate to be a monday night quarterback, but, look, they're clearly -- if he's not willing to support this reid plan, which has no revenue raisers in it, and they're saying no, then clearly the only reason that they want to say no is that they want to do this again in six months. and he should have said that. >> howard fineman and ezra klein, thank you very much for your time tonight. howard, you were hired as a monday night quarterback tonight. that's why we want you here. >> okay, lawrence. thank you. >> thank you both, very