whites, black, latinos, we're marching again. we've got to finish the trip. so the kimberlys of the world grow up in a fair and equal society for everyone. thanks for watching. i'm al sharpton. "hardball" starts right now. right wing dictatorship. let's play "hardball." good evening. i'm chris matthews in washington. leading off tonight -- the republicans on the verge of victory. looks as if the tea party already won. last night president obama argued the wealthy should be asked to pay their fair share in taxes, but taxes aren't even in

the boehner plan, and they aren't in the reid plan. it's all spending cuts. and there's serious talk about a short-term deal eric cantor would force the president to debate entitlements, taxes and spending all over again in six months. what exactly has president obama won in return? plus, watching the obama/boehner face-off last night, it was hard to believe what we were watching. the republicans are on the brink of winning the battle, in which the very rich will be asked to contribute nada. nothing. and everyone else will be asked to contribute everything. how did we get here? also, silence of the lambs. where are the republican candidates for president? michele bachmann, of course, mindlessly doesn't want the debt ceiling increased under any circumstance. other than that, where is everybody? and we learn today no group has been hit harder by the recession that continues than latinos or also may be the most important voting block for president obama come next november. can you hold them if things get worse? finally, finish tonight with a

way out of the debt showdown. we start with the debt fight itself. jay carney, white house press secretary, joins us right now. thank you for joining us. it seems to me if you watched the fighting today, the state of play is the republicans under boehner want a two-round fight, they want a second round during the presidential election next year, and another fight over the debt ceiling next time. president wants to have it all out now. is that the difference? >> i think it's the difference, although i view it a little differently. the reason why we believe and the president believes so strongly that we have to extend the debt ceiling, increase our borrowing authority for a significant amount of time is because it creates this cloud over the economy. it creates uncertainty, and as any businessman will tell you, or businesswoman, uncertainty is a a drag on the economy.

it forces businesses to make decisions that inhibit growth, inhibit job creation and we can't have that, and if you think this situation that we've seen in these last several weeks have been chaotic and cast doubt on whether or not the united states will for the first time in history fail to live up to its obligations, imagine what it will be like in six or eight or ten months if we go through this again. the president thinks that's bad for the economy. it's not about politics. it's bad for the economy. the american people overwhelmingly support his approach, a balanced approach. democrats, independents, even republicans by large majority supports the approach he has put forward. >> so if it comes down to it, sometime sunday morning at 4:00 in the morning, and he's handed a bill that says, we have to go after this again with some kind of mechanism next year, six months from now, he will veto it? >> we've made clear, the president's made clear, the chief of staff daley made clear, we issued a statement of administrative policy today,

that senior advisers recommend that the president should veto a specific bill the speaker's put forward, should it get to his desk, but that's a moot point. that bill will not get through the senate. we believe senator reid, the majority leader said it will not pat pass the senate. so it's really irrelevant. the fact is, we are in a stalemate. that's why the president spoke to the american people last night to explain where we are and why we need to break that stalemate. we need to break the logjam, and willingness on both sides to reach compromise. accept you're not going to get your maximalist and do it for the american people. >> right now it looks you've lost on the issue of revenue. not even the democrats in the senate are pushing for a revenue hike. >> i disagree with that. >> you're still fighting that fight? >> look, the big grand bargain is still on the table. that deal is there if the speaker wants to return to the table and negotiate it. we came very close. the president and the speaker did.

and that opportunity still exists. secondly, the helpful proposal senator reid put out does not include up front the tough issues of entitlement reform or tax reform, it creates a committee that would look at those issues on a fast-track basis by the end of the year. that's not possible, we prefer one that does it all at once. however this turns out if we don't get the tough issues addressed because they're essential to address the deficits and long-term debt we're going to return to the debate. because the public supports a balanced approach. it's not the right way to do this if we don't ask sacrifice from everybody. not just one sector or a limited number of sectors from the society. >> let's listen to what the president said last night, to voight support for a bipartisan deal. let's listen. >> 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. >> is boehner being pulled down by his right wing? is that the white house view? >> well, look. we certainly believe while we're not, probably, the best experts on house republican politics, it's evident that there is a faction with the house republican conference that is a, basically no compromise faction. we don't think that's where the american people are. we believe that the president and the speaker came a long way towards reaching the kind of bipartisan compromise that could achieve significant deficit reduction in a balanced way and we believe that that opportunity still exists, if there's a willingness to accept that we are associated with it, but not

every republican will vote for it, just like not every democrat will vote for it. you know how this work, the kind of compromises the president is willing to achieve something here and that will exact political pain. he's willing to do it because he feels that's what the american people are insisting that washington does. when you go outside of this town and talk to people, half the time they're asking, what's wrong with people in washington? why are they always yapping and not getting stuff down? this is a perfect example of the dysfunction in washington. it tends to dominate, and in this case, the stakes are too high to let it pertain. >> the white house position is, to clear this up, jay, if we don't have a deal in time for the president to write into law and to release the funds with a debt ceiling increase by august 2nd, if we don't have that on time it's your position at the white house that that fault lies with the republican party? that the blame game is simple, you're setting it up this way. i heard the president speak last night. many believe what he said last night was, i may not be able to meet the deadline and if i don't i want you to know whose fault it was. i was for a grand deal. they were basically for scorched earth. is that the clear message? it's their fault?

>> no. i want to be clear. >> whose fault is it, then? >> i want to be clear. the president believes, i've said numerous times again today, we believe we'll get a deal. we do not believe the united states will default on its obligations for the first time in history, forsake the gold standard, aaa rating this country held for so long that's made it the safest investment around the world. because, in the end, saner heads will prevail in washington and we will get this done. >> that surety you just have given me, since you're sure when is he sure it will happen or doesn't he know when it will happen? because you can't have it both ways. you can't be sure there will be a deal in time to deal with this, but not be able tell me when this time comes? this friday? this sunday morning? monday morning? when the time limit? >> look, the time limit is, the last moment when congress can act, before we no longer have

the -- borrowing authority. >> when's that, jay? >> you know, the deadline set by the treasury department, by the career analysts there, in terms of when we lose our borrowing authority is august 2nd. >> when do you have to act -- >> we believe that congress will act and do the right thing. >> in other words, a bill that comes to the president's desk by the morning of august 2nd is in time? >> as i understand it that would be the case. i don't know if it's august 1st or august 2nd depending on the hour of the day, when this eventuality might come to pass. we don't think it will get to that. we this that -- again, we -- make no mistake. conversations continue. obviously, between leaders of both parties on capitol hill. between those leaders and members of the administration. we are seeking a way out of this impasse, this balanced and can be supported by democrats and republicans, and that can be signed by this president. we think that can happen. it's not pretty. as you know, this process in washington is as ugly as making sausage can be sometimes, but in

the end, there is no alternative to doing the right thing. which is why we think, in the end, the right thing will be done. >> appreciate it, jay, my friend. i've known you a long time, as journalists, both sides of the world we live in. i have to tell you, i've never seen anything like this. never seen one party so clearly willing to take this country into serious trouble because of an inability to keep its right wing and its ranks in line and i do worry. you say the bell rings the morning, the day of august 2nd. i don't think they're willing to go sooner than that because they want to push this to the very end. they don't want to help this country make it. i don't think they're on the same team as you guys. i mean big picturewise. >> i think in the end, we all root for america. we disagree significantly on a lot of policy issues but in the end all root for america. we all root for america. america's economy. and that sentiment i think will prevail. i really believe that. you're right, chris, you've been here -- >> i read in the paper, they don't talk like that. they don't talk like that.

that guy up in scranton, that new tea party guy kelly sounds like he's in loony land. he says they got a bill passed. that's all they got to do. they have cut, cap and balance is good enough. they all go home. they're living on their own planet. >> i believe the very good people of scranton, pennsylvania, will be telling him and others about the right thing to do. >> thank you. jay carney. you're keeping hope alive. thank you, jay, for coming on "hardball." >> thank you. i only have a few minutes. i used up all that good time, jay. let me ask you this -- is this true? are we all on the same team or is there a real banded operation going on in the right in the republican house? >> i don't know who is on whose team, but i'll say there's deep divisionxd inside the republican pardyq a bloc led by presentative jordan and other conservatives who campaigned and won elections in 2010 on this who don't want to increase the debt limit unless they know absolutely they're getting precisely what they want on capping federal spending. others, john boehner, mitch mcconnell.

some of the presidential candidates, some of the chairmen, who feel strongly the last thing you can do is default. they want some sort of deal. that's why speaker boehner's been negotiating with the president on this. there is a deep divide, in essence, republicans should be happy they're winning the debate. the end deal will be all about cutting spending. the precise issue they ran on in 2010. unfortunately, they're not satisfied with the victory they have to date. >> these guys on the right are still insisting on a balanced budget amendment to the constitution. they want to begin the changing of our constitution, and by the way, they say they love the founding fathers, but they want to correct them here. they want to do something new they never thought of apparently in the 18th century. they want to correct those guys back then, and they want to do it under this emergency situation. so obviously, holding out for drastic structural change in this country. >> they are. i want a hell of a lot of things in life too. some things you can't get. they don't have the votes in the senate, period. they won't get the amendment they desire.

the question, can you find a middle ground? can speaker boehner find a place where they get big enough cuts to satisfy conservatives? that's a big question right now, even this plan that john boehner has on the table. you have conservatives saying they're not going to vote for it. there are not enough republican votes to pass it. you have outside conservative groups saying they're going to punish members who do end up voting for it, which scares a lot of republicans, who could be subject to different primary races. still, again, a deep division. the question is, can they pull it together? i think they do. i don't think either -- not a single leader in the republican or democratic party or in the white house that wants to default. they will get a deal. might be a short-term deal, but eventually they'll get a deal. >> but -- boehner -- boehner is reading -- reading speeches written by the far right. the other night, last night on the international television, in fact, he came out and said they had had a bipartisan passage of a bill to cut, cap and balance. it wasn't partisan. it was a partisan bill with five democrats aboard. he's using -- >> he's not the first politician

to claim bipartisan support because they get a couple -- >> that's malarkey. why are they talking like that? >> everybody's posturing. everyone want to seem like they're the the adults at the table. the line the white house likes to use. these republicans have authentic concern, looking for details from the white house on what the plan might actually be. seemed like a big fight inside the press room today between jay karney, who you just had on, and reporters who just wanted details. he seemed offended they wanted to do their job and get details on what the white house actually wanted. >> well, i got some news out of him. he said august 2nd is august 2nd. no more do it by july 22nd to get the ball rolling. no more last friday. now it's next tuesday and they're saying this can go down to the wire. sounds like nothing's getting done until tuesday morning now. once the deadline is clear. >> right. seems to be inconceivable anything is done before the weekend or monday because it doesn't look like the boehner plan on the table can make it through the senate. so once it's defeated in the senate, even if it's on a fast-track legislative

process, which it will be, there will have to be a compromise. that can't happen until thursday or friday. once you get into the voting process, looking at the weekend. it's going to be monday. the clock will be ticking. there is going to be a potential of default. i think think at the end of the day, the very least a short-term extension to work out a deal. they're not that far apart. it's all about cutting spending now. >> thank you, jim. by the way, the people in boehner's office. boehner's spokesman tweeted contrary to what karney told us, the grand bargain is not on their table, at least not on their table. coming up, the republicans are on the verge of winning a major ideological fight. how did that happen? you're watching hobby, only on msnbc. i had a student the other day that said... "miss stacy, this class is changing the way that i look at things." sparking that interest

and showing them that math and science are exciting... it's why i teach. ♪ i know they can, even when they think they can't. how's this for screwball -- republican congressman steve king of iowa is suggesting obama would be impeached if the crisis people like him created pushes the

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welcome back to "hardball." two things to consider seriously as this debt ceiling debate plays out. one, catch this. the very wealthy are paying a much smaller share of income and taxes right now than they did a decade ago, and, two, the same wealthy american are not being asked to contribute anything to this deal. anything. the entire debate centers as you've heard on this program how much the middle class and poor will have to kick in. how did we get to this point? joining me, co-host of "squawk box," the great writer andrew ross sorkin, who wrote "too big

to fail," and ezra klein, whose column was brilliant today. take a look. do you want to lead me through this, andrew, about the breakout? "morning joe's" analyst steve ratner, helped put together the following charts which show just how much less as a percentage of income the richest americans are paying now as compared to, say, 15 years ago. according to the irs, the 400 wealthiest americans were paying taxes at a rate of about 18% under president bush in 2008. back in 1993 under clinton, those individuals were paying rates at about 29.4%. that's a drop of ten percent points in 15 years. well what do we make of this now, how they're better off? look at that, seems to me 18% is now about what poor people pay at a much lower percent than middle class people. andrew? >> here's what's happened? the rate has clearly gone down.

in large part, it's actually a function of investment accounts. think of the top 400 individuals in the country and where they're making their money, a lot of it is investment. not paying the higher 35%, obama would like closer to 40% or in the 39% range. that's why you see the numbers where they are. the proposal on the table today has almost no cuts and the proposals that were on the table over the weekend had very few real revenue enhancements, except to go after some of the private equity hedge fund gips paying that 15%. some of the oil folks who were also paying in that range. the real issue, how do you get a sense of fairness? i was struck last night by the president's remarks when he actually invoked president reagan and his comments to say if we're going to cut on all of these other people, we have to have some shared sacrifice. i thought that resonated at least with me. >> it's amazing. your average, 400 top americans in the wealthy category, make an

average income of $270 million a year. wealth well beyond that, and a wealthy person once said to me, i want to get -- i don't like any more earned income want to make money in capital gains. that's how i make money. your thoughts about this, a total inequity that we start this with. and another graph that shows how much the wealthiest are paying in comparison with other american. there you see that. a moment ago, the very wealthy pay about 18%, about what the people, really not at all are paying. 9 middle class, many people make 75k a year paying a higher percentage. the old joke of the high-paid secretary, paying a higher rate,

ezra, than the ceo is true. >> two things going on here. connected, not the same. this fairness, how much the rich pay in normal times and actually the deficit issue, which is part but a lot of what's happened in the last couple of year. when it comes to what the rich are paying, reagan had big structural tax cuts. clinton smaller tax creases than bush had in '01 and '03, of course, very low rates. the last 23 years about tax cuts and for higher income folks. then the financial crisis devastated revenues in this country. dropped by 5 percentage points of gdp. now at the lowest level since the 1950s. put that together and hear the republicans saying we have a spending problem not a taxing problem, i mean, as a simple matter of fact, that isn't true. look at our deficit and our revenues going forward -- >> why does it sell? why do you hear it being played, almost banjo music by the right? i hear it over and over. the troubadours, learned the song. andrew, your thoughts here. why do you keep saying that over and over? we're not taxed enough. it's that we spend too much. >> i don't know if you have the chart. there's a great chart that steve put up this morning that shows that actually revenue has gone down at the same time as the cuts. so you can see it.

it's almost in parallel. it's an unfair argument 689 unfair argument the republicans have used for a very long time. >> wight it right here. here's the graph showing how much spending, how much spending, increased from 2007 and -- compare it to the increase sharply, right. down to about 24% of gdp going to spending right now, and about 14 -- 15% just below 15% for revenues. >> the argument, inaccurate, but it's not a dumb argument. one thing we know about the starve the beast policy, it doesn't cut the deficit. we've seen that over and over again. it actually tends to increase the definite sis. people think spending doesn't have any cost. what it can do over a long period of time, cut programs. republicans never want taxes to rise at all. over time, spending cuts to meet that. taxes devastated due to both tax cuts and due to the financial crisis and now we're going to have the baby boomers retire and more expenses in the tax code, and then don't allow taxes to

rise, eventually you have to end up having to implement something that the ryan budget itself, simply because you don't have a choice. you can do a lot in this country just by not letting taxes rise, even if you never take the next step and say what the policies have to meet the revenues will be. >> gentlemen, ask you a question. a lot of people who watch the show every night think about this a lot. i want to ask you, now that we have two guys that know what they're talking about here. for the benefit of everybody watching now, why doesn't the american people -- why don't we have a big debate what percentage of our economy want the federal government to spend and are we willing to pay for it? some sort of big picture discussion. okay, the ages of our population requires more spending on health care for people over 65. do we want to meet that commitment or not? do we want to meet a portion of it? help with education at the federal level? do we want to real infrastructure spending? cut down our overseas military operations? what are we going to make -- the households makes those decisions every day. the average household decides, can we afford to buy new shoes for the kids?

can we afford to go to the movies this week? what kind of vacation can we take? travel, stay in the neighborhood? people make these decisions. why doesn't the federal government decide what it's going to spend money on and decide it's going to pay for it? andrew, you first. why not a rational thought here? >> here's the fundamental problem. to have that honest conversation. the conversation we need to have. while we need to raise revenue, that meenz raising taxes, perhaps on the wealthiest, unfortunately, in the end you probably have to raise taxes, the cuts will be deep and painful. conversation unto itself is a painful conversation, ultimately to truly have. it's a conversation we think we want to have but when you actually sit around the table and are having it, it's a very difficult one, because the answers aren't -- >> i've had that conversation my parents had that conversation every week and that's how we lived and got to where we got today. middle-class parents from aspiring cultures make those decisions all the time. ezra, your thoughts.

why can't we as a country -- you don't go to nightclubs and on expensive vacations, you give the kids educations. your thoughts? last thought. >> a tough conversation to have. our political system is not well equipped in any case to have it. we tend to firefight. we're so gridlocked. anything affirmative that isn't forced by a crisis, spend all of our time dealing with these crises that we could have prevented in advance. like the deficit. no reason to have this right now. having prevented a crisis, then have a decent conversation about the future. >> got to go. i read your column. you're great. thank you, andrew. too big to fail. a look at the federal government that way some day. and the criticism of president obama by boehner, may sounded like they took every jab at republicans and turned it back at him. not very original, but it's part of the rhythm of what we're into right now. that's in the "sideshow." you're watching "hardball" only on msnbc.

back to "hardball." now for the "sideshow" tonight. as the debt ceiling debate continues to consume both congress and the white house you may have noticed something about the republican rhetoric. their accusations against president obama sound remarkably similar to what the president himself said angrily about the republicans. here's president obama last week

on the gop's complete unwillingness to budge during negotiations. >> i think that, you know, one of the questions that the republican party's going have to have itself is, can they say yes to anything? >> and here's speaker boehner last night. >> unfortunately the president would not take yes for an answer. even when we thought we might be close to an agreement, the president's demands changed. >> no fluke. here's what the president had to say about both parties getting too caught up in political wear warfare, when they should be focused on solving the debt crisis itself. >> neither party in this town is blameless. both have talked this problem to death without doing enough about it. that's what drives people nuts about washington. too often it's a place more concerned with playing politics and solving special interests than resolving real problems or focusing on what than solving problems of what >> sound like he's reading from the president's playbook. >> i know the president is

worried about his next election, but, my god, shouldn't we be worried about the country? >> lastly, how about when it comes from walking away when negotiations become too tough to swallow? how president obama described the breakdown with communication with the republican leader. >> i've been left at the altar now a couple of times. >> and once again, the table's were turned. >> it's the president who walked away from his agreement and demanded more money. >> a pretty transparent strategy by the republicans, i got to say. the big number, this is telling. president obama mentioned the word "compromise" six times, half a dozen times in his speech last night. the word compromise. how many times did boehner use it? he mentioned a compromise a grand total of -- zero times. he doesn't like that word, compromise. it offends his people. ooh, compromise. bad. that's tonight's non-existent big number. zero, think about it, they can't say the word "compromise." up next, why aren't we

hearing anything about the debt ceiling fight from the republicans who want to be president? where's the leadership? other than michele bachmann, the silence of the lambs. that's ahead. you're watching "hardball." only on msnbc. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average.

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what? bundling and saving made easy. now, that's progressive. call or click today. i'm milissa rehberger. president obama visited the norwegian embassy in washington today to sign a book of condolence. and he said he would rye -- the next court date for dominique strauss-kahn has been pushed back to late august, the attorneys say they hope it gets dismissed before then. they have. an international plot to buy military-grade weapons to help arm hezbollah.

and thick black smoke as firefighters try to tame a fire at a plastics manufacturing plant near san francisco. now back to "hardball." i will not vote to increase the debt ceiling. it goes completely contrary to common sense, and how i grew up in iowa. we have to deal with the economic reality. and i have the will and i have the courage to see this through. i'm michele bachmann, and i approve this message. >> i love this, the zeile phone tink on the background. welcome back to "hardball." when it comes to the debt crisis we know where the tea parties stand. michele bachmann, leader of 9 the tea party of the house. you saw in her campaign ad. what about other republicans running in 2012? why haven't we heard from them? a great question.

michael shear writes for the famous "time" magazine and ap definite article, i had to say the "time" magazine. look at romney. his tweet. he's been criticized by some for not saying much about how he would handled the debt ceiling. today he tweeted. not an appropriate method i don't think, talking about this issue. "this is historic failure of leadership from barack obama, not even senator reid is still talking about tax increases." there's the kind of thing you hear from a businessman on a commuter train after two drinks coming from this guy who doesn't drink. not very thoughtful. i'm against taxes. is that the the best you can get out of this guy who wants to be president of the united states? >> wants to be president of the united states campaigning without being a candidate. he's done everything he can over the last six months to stay out of the limelight, keep himself away. whenever he does open his mouth, all he says is barack obama is awful. >> in sports, in the old unc days, you called that corner offense, you just hold the ball.

in other sports, controlling the ball. is that what he's going to do? no attempts to score? >> doing it as long as he can. i think if rick perry gets in, the calculation changes. >> he'll have to fight for it. >> yeah. >> and he's being called the front-runner by his own team acting the front-runner, he won't talk? >> because he is the front-runner, a -- >> but don't leaders have to lead? >> yes, eventually they do, if not being challenged directly. >> irregardless, respond to this, mitt romney asked how he'd solve the country's deficit problems. here he was, and his answer. let's listen. >> the answer for the country is for the president to cut federal spending, cap federal spending and put in place a balanced budget amendment. it's win, in my view, the president's power to say, to his leadership and to the house and the senate, i will cut spending. i will cap the amount of spending.

i'll pursue a balanced budget amendment, and if the president would do those things, this whole deficit issue disappears. >> that was nitwit talk. all he was doing was parroting the house republican bill. he had nothing to say there. that's never going to get passed -- >> july 14th. >> all he's doing is parroting. >> talking about now, president obama, even though he may be losing the policy fight now is winning the center of the country. >> you believe that? >> i do. there's a poll out saying 56% agreed with him. jay carney on early 49 times, in the briefing, compromise, compromise, speaking to independents and midwestern states, where republicans have to start running. >> speaking of the midwest, let's talk paw lenty. bachmann, far out. she wants the house to come down. guess she just doesn't care, and romney playing it safer. pawlenty somewhere in the middle trying to get heard. here he is, pawlenty, earlier in the month, whether he would raise the debt ceiling.

listen to the former governor of minnesota. >> under any circumstances you would not raise the debt ceiling without sufficient spending cuts. >> they've gone through the debt ceiling, went through in may. i'm saying i wish they would raise it, but if they're going to raise it at least get structural reform and improvement so we're on a better trajectory going forward. >> so there he is, fighting for the far right with bachmann. we can see his strategy, like how she says she grew up in iowa, all these references. >> that's on the flank of the party. >> he hopes to win that. >> he can backtrack -- >> this is all retail right now, selling to iowa? >> that's right. >> he's worried about the base, it appears for the moment, bachmann captured in the polls. that's what he's going to worry about right now. so he needed to say something clear and needed to fight this growing reputation pawlenty has for not taking off, not lighting a fire with anyone. >> and every time i see a picture of this guy, even the

background. it looks like it comes down on the republican side to to three heads. bachmann, far right. rick perry, the governor of texas probably coming in somewhere where she is politically, and mitt romney, who will be what he has to be politically. >> right. >> is that it? >> plenty of time for things -- >> those three people? >> right now they are. i think that's right. huntsman and pawlenty on the edges. >> pawlenty's not taking off. huntsman is too new. >> so three people, bachmann -- i don't know, anything can happen. probably won't be elected. probably not a good bet for a general election candidacy. rick perry, unknown. all of a sudden he seems to be talked about running for president. not that he felt he should be president, but romney running for president since he was a kid, probably. so what's new, pussycat? >> huntsman seemed to reached for the middle, suggesting he

would support the boehner -- >> a true middle. >> which for far tea party types, it's toxic. >> he has some experience in business, and certain as a governor, incredibly popular in utah. he's running for a republican party that hasn't existed in 30, 40 years. it's a pre-reagan party. >> it does seems so. >> it does seem so. >> what's he doing? >> exactly the same that obama in his speech was trying to appeal to the invoking ronald reagan. >> romney and who could be the unromney? rick perry mixes it up because he's going to come in with conservative credentials, the >> i still think people think that the former mayor of wasilla might jump in at the last minute. thank you, guys. you think she might? >> i'm not betting on it. >> 50/50. >> see? interesting. especially if joe maginnes' book

makes noise. thank you, michael hirsch and michael scherr. among the hardest hit people during this recession that continues. can the president hold on until things don't get better? will he lose them if things get worse? this is "hardball" on msnbc. emily's just starting out... and on a budget. like a ramen noodle- every-night budget. she thought allstate car insurance was out of her reach. until she heard about the value plan. and saving money with allstate doesn't stop there... kim and james are what you might call overly protective. especially behind the wheel. nothing wrong with that. in fact, allstate gives them a bonus -- twice a year -- for being safe drivers. dollar for dollar, nobody protects you like allstate. dollar for dollar, diabetes testing? what else is new? you get the blood, hope it's enough, it's--

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investigate. latest comes after several aides resigned earlier in the year after a bizarre incident in which he sent a picture of himself, there it is, dress fld a tiger costume. we'll be right back. [ p.a. announcer ] announcing america's favorite cereal is now honey nut cheerios! yup, america'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!

welcome back to "hardball." we learned today, a lot of people knew it earlier, that the hispanic community, a key voting bloc for president obama in 2008, hit the hardest in this recession. look at the chart. median net worth of hispanic households dropped a stunning 66%. that's a two-thirds drop in their worth. black households dropped more than half. 53%, almost as badly. and whites just 16%.

how will this economic hit affect the hispanic vote come 2012? maria cardona heading up hispanic outreach for hillary clinton's campaign and belantoni is assistant politics editor at "cq" and leads their 2012 coverage. so we got great coverage here ourselves. give me a sense of how hispanics, their economic life is different, their vul nerkt is different. >> this is a community that has been hit in this recession unlike any other community we have seen. most of it has been because a majority of latinos, big majority live in nevada, florida, california. three states that have seen the mortgage crisis the worst in this country. >> so the value of their prime property, their house, has dropped. >> exactly, and for latinos, as you know, chris, their home has

been the biggest definition of the american dream in this country. >> and some of them overreached. >> well, yes. we can talk for hours as to what the cause was, but then that goes to the politics of it, right? you always vote your pocketbook, and what i think is going to be the reality of this is latinos are going to take a look at this president, take a look at republicans, take a look at democrats, and take a look at policies, which policies were put in place to really help the latino community. >> the destruction of our housing industry did not begin with president obama. that was the burning bed he got into. >> no question about that, and latinos understand that. >> the sophistication of voters grow with their bad circumstances, generally, you pay more attention when you have more at stake. your thoughts about the possibility of president obama not getting as good of vote in '12 as he did in '08 in the latino community. >> latino voters are important

to winning in 2012. that's their strategy, you've seen growth in nevada, arizona as well and florida. i just got a statistic that 50,000 latinos turn 18 in this country every month and the issue the obama campaign is sort of looking at is if the president continues to talk about immigration policy and he has this friendlier policy and pushing the dream act he says he wants passed, even though it's not going to become reality before the election, he's going to bank on republicans demonize immigration. the president believes he'll be the better off candidate for them. >> are they as stupid as sharon a angle, are they stupid -- you're saying they are stupid enough to run those ads? >> yes, they not only are stupid

that way, they really don't understand, i think, the importance of the latino community in this country. they have people like jeb bush and carl rove talking to them behind the scenes because jeb bush and carl rove are nervous they'll never see the white house if they are on this pass. the path to the white house leads through latino communities and they'll never see inside if they don't change. >> let me get to casa blanca. back to christina, this question about the immigration bill, i'm a skeptic either side are listening to that. they want the politics, is that fair? >> absolutely. you saw that play out in 2005 and 2006. you had a comprehensive immigration reform bill that president bush supported and a lot of republicans risked their neck for. that's one reasons republicans lost the house in 2006, it wasn't just a democratic wave.

>> there are three people i trust on that and one of those is lost, ted kennedy. but i think lindsey graham and chuck schumer are good on that. >> i completely agree with that. >> thank you guys so much. maria come back and christina. let me finish with a way out of the debt ceiling, wow. you're watching "hardball." introducing the schwab mobile app. it's schwab at your fingertips wherever, whenever you want. one log in lets you monitor all of your balances and transfer between accounts, so your money can move as fast as you do.

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let me finish tonight with

this dreadful, disspiriting, debasing diatribe over the debt. both sides have the other side pegged, it's why the spanish don't want the fighting bull to fight a second time. you no longer hear the olay's from the stands to catch each of the charges of the bull. it's gotten, dare i say it, dull out there. it isn't, of course, not if you count the stakes and get past the rivalry in the arena to the world at large. the world at large has a lot riding on this, the world at large, meaning america, this country, is ready to go down a notch over this contest among politicians. i know it's important to raise revenues as well as cut spending. only a heart partisan can't see the need to bring down revenue and bring up spending to perhaps 20% of the economy to account for an ageing population,

running up health costs, not even counting the need to do something about education in this country and infrastructure, both of which are deteriorating. i know why it's important to do this debt thing quickly. on both counts, the revenue issue and timing issue. what i don't understand is why it's so important to avoid another debate in 2012 that would permit a second step in the hiking of the debt ceiling. if that's the only rub the president may have to sign on to the deal. would the republicans have to give way and do so immediately is the balanced budget amendment to the constitution. this is no time to be debating something like this. they also have to give way on the right-wing axillary of the debt ceiling. they can vote on michele bachmann's wild version of politics. if she's ready to risk the country take a dive and enjoy the thrill of the dance