walked away from this package. what we agreed to wasn't that grand. but it was a start. roughly $1 million in cuts to domestic and defense spending. everyone knows we have to do more than a special joint committee of congress is assigned to find more deficit reduction, so today, i'm laying out a set of specific proposals to finish what we started this summer. proposals that lif up to the principles i've talked about 23r the beginning. it reduces our debt by more than $4 trillion. by asking everybody to do their part. so that no one has to bear too much of the burden on their own. all told, this plan cuts $2 in spending for every dollar in revenues. in addition to the $1 trillion in spending that we've already cut from the budget, our plan makes additional spending cuts that need to happen if wee to solve this prop.

we reform agricultural subsidies, subsidies that sometimes pay large farms for crops they doept grow. we make modest adjustments to federal retirement programs. we reduce the billions that goes to fannie mae and freddie mac. we also ask the largest financial firms, companies saved during the financial crisis, to repay the american people for every dime we spent and we save an additional $1 trillion as we end the wars in iraq and afghanistan. these savings are not only counted as part of the plan, but as part of the budget plan that nearly every republican on the house voted for. finally, this plan includes structural reforms to reduce the cost of health care and programs like medicare and medicaid. keep in mind, we've already included a number of reforms in the health care law. which will go a long way towards

controlling these kos, but we're going to have to do a little more. this plan reduces wasteful subsy d dis while changing some incentives that often lead to excessive health care costs. it makes prescriptions more affordable. we'll work with governors to make medicaid more efficient and accountable and we'll change the way we pay for health care. instead of just paying for procedures, providers will be paid more when they improve rumts. and such steps will save money and improve care. these changes are phased in slowly to strengthen medicare and medicaid over time because while we do need to reduce health care costs, i'm not going to allow that to be an excuse that turns it into a voucher program. i'm not going to stand for balancing the budget by reducing health care for poor children or

those with disabilities. so, we will reform medicare and medicaid, but not abandon the fundamental commitment this country has kept for generations. that includes our commitment to social security. it is not the primary cause of our deficits, but it does face long-term challenges and both parties are going to need to work together on a separate track to strengthen social security for our children and grandchildr grandchildren. so, this is how we can reduce spending. by scouring the budget for every dime of inefficient, by reforming and making adjustments to medicare and medicaid. but these will not solve our fiscal problems cht. we can't just cut our way out of this hole. it's going to take a balanced approach. if we're going to make spending cuts, many of which we wouldn't make if we weren't facing such

large budget deficits. then it's only right that we ask everyone to pay their fair share. last week, speaker of the house, john boehner, gave a speech about the economy and to his credit, made the point we can't afford the kind of politics that says it's my way or the highway. i was encouraged by that. here's the problem. in the same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever. he said, i'm quoting him, there is only one option. and that option and only option relies entirely on cuts. that means slashing education, surrendvey rendering the researo keep america's technology edge and allows our highway, bridges and airports to get worse. it would cripple our come

pettiveness and our ability to win the jobs of the future and it would also mean asking sacrifice of seniors and the middle class and the poor while asking nothing of the well well thinkest americans. so, the speaker says we can't have it my way or the highway and then basically says my way. or the highway. that's not smart. it's not right. if we're going to meet our responsibleties, we have to do it together. now, i'm proposing real serious cuts in spending. when you include the $1 trillion in cuts i've already signed into law, these would be among the biggest cuts many spending in our history, but they've got to be part of a larger plan that's balanced. a plan that asks the most fortunate among us to pay their fair share just like everybody else.

and that's why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations. tax breaks that small businesses and middle class families don't get. and if tax reform doesn't get done, this plan asks the wealthiest americans to go back to paying the same rates they paid during the 1990s before the bush tax cuts. i promise, it's not because anybody looks forward to the prospects of raising taxes or paying more taxes. i don't. in fact, i've cut taxes for the middle class and small businesses and through the american jobs act, we cut taxes again to put more money in the pockets of people, but we can't afford these special lower rates for the wealthy. rates by the way, they were meant to be temporary. back when these tax cuts in 2001, 2003 were being talked

about, they were talked about as temporary measures. we can't afford them when we're running these big deficits. now, i am also ready to work with democrats and republicans to reform our entire tax code. to get rid of the decades of accumulated loopholes. special interest carve outs and other expenditures that stack the deck against small business owners and families who can't afford fancy accounts. our tax code is more than 10,000 pages long. if you stack up all the volumes, they're almost five feet tall. that means that how much you pay often depends less on what you make, and more on how well you can dwane the system. and that's especially true of the corporate tax code. we've got one of the highest corporate tax rates in the world, but it's riddled with exceptions and special interest loopholes, so some companies get out paying a lot of tacks while

the rest of them have to end up footing the bill. this makes our entire economy less competitive and our country a less desirable place to do business. that has to change. our tax code shouldn't give an advantage to companies with best connected lobbyists. it should give the advantage to companies that invest in the united states and we can lower to carp rat rate if we get rid of all these special deals. so, i am ready. i am eager to work with democrats and republicans to reform the tax code to make it simp simpler, fairer and make america more competitive. but any reform plan will have to raise revenue to help close our deft sit. that has to be part of the formula. and any reform should follow another simple principle. middle class families shouldn't pay higher taxes than millionaires and billionaires. that's pretty straightforward.

it's hard to argue against that. warren buffett's secretary shouldn't pay a higher tax rate than warren buffett. there's no justification for it. it is wrong that in the united states of america, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. anybody who says we can't change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out. they should have to defend that unfairness. explain my somebody who's making $50 million a year in the financial markets should be paying 15% on their taxes when a

teacher making $50,000 a year is paying more than that. paying a higher rate. they ought to have to answer to that. and if they're pledge to keep that kind of unfairness in place, they should remember the last time i checked, the only pledge that really matters is the pledge we take to uphold the institution. we're already hearing the usual defenders saying this is just class warfare. i reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or teacher is class warfare. i think it's just the right thing to do. i believe the american middle class who have been pressured relentlessly for decades believe it's time that they were fought for as hard as the lobbiests and some lawmakers have fought to protect special treatment for billionaires and big corporations.

nobody wants to punish success in america. what's great about this country is our belief that anyone can make it and everybody should be able to try. the idea that any one of us could open a business or have an idea and make us millionaires or billionaires. this is the land of opportunity. that's great. all i'm saying is that who have done well, include iing me, sho pay our fair share in taxes to contribute to the nation that made our successes possible. we shouldn't get a better deal than ordinary families get and i think most wealthy americans would agree. if they knew this would help us grow the economy and deal with the debt that threatens our future. it comes down to this. we have to prioritize. both parties agree that we need to reduce the deficit by the same amount.

by $4 trillion. so what choices are we going to make to reach that goal? either we ask the wealthiest americans to pay their fair share in taxes or we have to ask seniors to pay more for medicare. we can't afford to do both. either we gut education and medical research or reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don't get. we can't afford to do both. this is not class warfare. it's math. the money's going to have to come from some place. and if we're -- if we're not willing to ask those who have done extraordinarily well to help america close to deficit, and we are trying to reach that same target of $4 trillion, then the logic, the math says

everybody else has to do a whole lot more. we've got to put the entire burden on the middle class and the poor. we've got to scale back on the investments that have always helped our economy grow. we've got to settle for second rate roads and bridges and airports. and schools that are crumble. that's unacceptable to me. that's unacceptable to the american people. and it will not happen on my watch. i will not support -- i will not support any plan that puts all the burden for closing our deficit on ordinary americans. and i will veto any bill that changes benefits for those who rely on medicare, but does not raise serious revenues by asking the wealthiest americans or biggest corporations to pay their fair share.

we are not going to have a one sided deal that hurts the folks who are most vulnerable. look, none of the changes i'm proposinging are easy or politically convenient. it's always more popular to promise the moon. leave the bill for after the next election or the election after that. that's been true since our founding. george washington grappled with this problem. he said, towards the payment of debts, there must be revenue. that to have revenue, there must be taxes and no taxes can be devised which are not more or less inconvenient and unpleasant. he understood that dealing with the debt is, these are his words, always a choice of difficulties.

but he also knew that public servants weren't elected to do what was easy. they weren't elected to do what was politically add venn ta jous. it's our reasonability to put country before party, to put what's right for the future. that's what this debate is about. not about numbers on a ledger. not about figures on a spread sheet. it's about the economic future of this country and it's about whether we will do what it takes to create jobs and opportunity while facing up to the legacy of debt that threatens everything we've built over generations and it's also about fairness. it's about whether we are in fact in this together. and we're looking out for one another. we know what's right. it's time to do what's right. thank you very much. thank you.

>> there we have it. president obama throwing the gauntlet down in the white house rose gourd garden saying the budget shouldn't be balanced on the backs of the middle class. he called on congress to step up to the plate to get americans back to work. hi, everybody. good monday morning cht a lot to talk about from washington. we're going to go over the details right now. a recap basically over 4 trillion in cuts over the next decade with cuts to medicare and savings from troop withdrawals in iran and afghanistan as well as tax reform. then the buffett rule. shifting tax rates for millionaires and billionaires closer to what the middle class is doling out to uncle sam and there's more to come from the white house. tim geithner and the director of the omb director will speak along with press secretary carney minutes from you, but let's go to kristen welker. she is joining us to talk more about what we just hard.

kristen, president obama putting these proposals on the wealthy, sure to please the president's base, but about half the tax savings would come from letting the bush tax cuts on the wealthy expire. how critical of a moment is this for the administration? >> it is critical, thomas, because the president's approval ratings are at an all-time low. the unemployment rate had been stuck above 9% for some time. one thing that i found really interesting about the speech. we heard him repeat the term class warfare twice. he said, this is not class warfare. that's of course something that the republicans have said. that the president is in fact engaging in class warfare with this plan. the president had been on the defense there saying, no, this is not class warfare. the speech not very heavy on specifics. but more heavy on basically drawing the line between the president's vision and republican's vision. you heard him talk about the fact that he will veto anything that doesn't include entitlement

reform and new tax revenues. you also heard him talk about the buffett plan essentially saying that people who make $1 million shouldn't have a lower tax rate that middle class americans, so really, in essence, drawing the battle lines here, thomas. >> kristen welker at the white house. thanks so much. want to talk more about the president's plan with tara, a democratic strategist and the founder of the tara group as well as ron christie, republican strategist and ceo of christie strategies. tara, as we are sitting here together, i'm giving you some looks as wer watching this speech go down and here we have the president really throwing down the gauntlet to fire up the base about the policies and especially when it comes to rev news. the president also talking about the buffett rule. the fact warren buffett's secretary is paying more within the tax rate than what he pays

as a billionaire. but the phrase, one sided deal that hurts the folks the most vulnerable. he's not going to go for that. i thought, walk off. then go into apology about it. i know this hurts people politically and all this other stuff. people don't want to see that right now. they want to know, this is what i think, what i feel, this is how it's going to get done and how we're going to grow as a coun country. why do you think we get the apology on the back end of the statement? >> i think the president has been under fire lately and he wants to make very clear where he stands and the reason and rationale behind the decisions he's making. i agree with you, he probably should have just cut it short. he had me at shared sacrifice. >> he had you at hello. come on. >> keep asking wealthy people to sacrifice. middle and working class people have already sacrificed.

their jobs, their retirement accounts. so, it's time to ask everyone else, the wealthy, to step up, too. >> ron, we have heard from republicans are having to say. take a listen to this. how they're responding to the buffett rule as we heard yesterday. >> we don't want to stagnate this economy by raising taxes. it went just hit individuals. >> the tax code should be reformed for one purpose. to generate more revenue to run the government. when you pick one area of the economy and say we're going to tax those people because most people are not those people, that's class warfare. >> class warfare may make for really good politics, but makes for rotten economics. >> not even going to bring up the cw term, but the middle class the frustrated with the income despairty. we see the protests along wall street over the weekend. why is it good politics to push back against fair tax rates for millionaires and billionaires?

how can the right defend greed? >> i don't know who's trying to defend greed. i'm very much in favor of defending capitalism. i'm concerned when you have the president of the united states saying he's going to penalize one group of people at the expense of others. >> he says i'm among you. i'm going to get taxed with you more. >> thomas, if hemts to pay more, he can write a check for the internal revenue service and pay what he believes is his fair share. interesting he says, i'm a wealthy guy, i can afford it. interesting he files under the bush taxes and not under clinton. my point is this and tas simple one. 47% of working americans pay no federal income tax. the president says he wants everyone to pay their fair share. no, he's not talking about half of the people who work who pay nothing. if it's truly about getting everybody to pay their fair share. let's have that discussion. >> are you talking about billion

dollar corporations paying nothing? >> no, i'm talking about 47% of working americans pay no federal income tax. >> but sales tax, city taxes. all kinds of taxes. they pay fees. so this notion you said they pay nothing, that is totally not fair and part of the class warfare card that the republicans continue to play. you guys are playing the heck out of that card. >> you cut me off. excuse me. >> that support the job -- >> what you said is absolutely not the truth. i said 47 of americans pay no federal income tax. didn't talk about state. and you said, well that's not true. that is a true statement. >> after that, you said they pay nothing. >> no. actually, i said they paid no federal income tax. going back to what thomas said and talking about buffett rule of wealthy corporations, this is another big line that the president just put out there. warren buffett pays himself an

extraordinarily low salary. why? so he can cash in a 15% capital gains rate -- >> and we want to correct that, ron. >> and i think we should. but the president, well, the president is out dl actually speaking half truths. using the usual obama argument. putting together a proposal. >> the right loves the oracle of omaha. the right loves the oracle of omaha just as much as the left so you can't have it one way when you like him then say a rule that basically breaks it down is showing something false about what's going on with how he runs his business. >> and warren buffett owned up to tharks thomas. >> we're going to talk more about this. we have the mayor of l.a. standing by right now, but tara and ron, thank you, both. and on that point, today's mayors from across the nation

are in washington to tell lawmakers there is an urgent need for job creation. sir, i heard that you were smiling a bit during our last segment there with the panel as you're listening to the back and forth there. i want to start with you though about what the president had to say this morning. what do you think of his remarks and are you a supporter of what the buffett rule means to increase taxes on millionaires and billionaires? >> i wasn't smiling. i was laughing. at the talking heads. look, the number one issue for most americans. at least americans in my city and cities across the country, is that it's the jobs deficit. they want to get back to work. and they want the president and the congress to focus on job number one. i think the president is doing that. unfortunately, the congress and the talking heads are arguing

about things that historically haven't actually created an argument and that is that shared responsibility. fair share. pay your fair share of taxes. that's not class warfare. that's what we've stood for for a very, very long time in this country, that if you make more, you pay more. there's nothing class nature about that and unfortunately, they're focused on the wrong things. people want to go back to work. they want to focus on job creation. on investments and infrastructure. and not on the kinds of sideline arguments that you hear a few minutes ago. >> let's talk more about that because this new push from the president comes as he is asking congress to act on his american jobs bill. we've seen a really lukewarm reception to this plan in our own party, especially those in congress. in your estimation, why aren't more democrats out there

cheerleading as the jobs act may be flailing through washington, d.c.? >> you've seen an antagonistic reception on most in the republican party and you're right, there are some in the democratic party that have been lukewarm. they're both right and wrong. when you're looking a t a deficit of this magnitude, everything's got to be on the table. that means that we are going to have to cut spending. it means we are going to have to look at entitlement programs.reo do that. particularly, democrats are saying no to new taxes. the two have to be connected. if they are, i think we can get bipartisan support for that. it makes sense. you can't completely cut your way out of this program. and you can't raise revenues beyond what's possible in a recession like this. but you can close tax loopholes. you can have a fairer tax code.

you can support the idea that when you make more, you ought to pay more. that's not a revolutionary notion an it's not class warfare. >> sir, thanks for your time this morning. >> thank you for having me. >> any moment, we are expecting the press secretary, the it shallry secretary to brief reporters. we'll have it live for you right here, but we want to know what do you think? should those earning a million do dollars or more a year pay higher income tax than those earning less and do you think that the millionaires tax would help or hurt the xwhi? you can also send mae tweet on your thoughts about this. we're back with more after this. [ male announcer ] this is coach parker...

whose non-stop day starts with back pain... and a choice. take advil now and maybe up to four in a day. or choose aleve and two pills for a day free of pain. way to go, coach. ♪ here's what's topping the news now. more developments in the deadly air show crash in reno, nevada.

ten people are are reported dead including the pilot and more than 70 others are and this new video clearly shows the plane losing altitude and ultimately crashing into the ground in front of the audience. meanwhile, new evidence discovered at the site may help investigators trying to piece together what caused the horrific accident there. dominique strauss-kahn is speaking out for the first time since being accused of sexual assault. he denied using violence against the woman, but said he deeply regretted his role in this encounter. once considered a front-runner for french president, he did not rule out a comeback. mitt romney will be the latest gop contender to make what's become a required

campaign stop that is meeting with trump. he is scheduled for a meeting on the 26th in new york city. trump has recently met with rick perry and michele bachmann as well as noncandidates sarah palin and mike huckabee. mahmoud ahminedjad is on his way to new york city. the iranian president will arrive this afternoon in manhattan where he is scheduled to attend the united nations general assembly. before leaving, he told reporters he planned to discuss quote reforms in world management at the u.n. meeting. while skeptics continue to voice their doubts about the president's jobs plan, he still has one major figure in his corner. bill clinton. in a "today" show exclusive, expressed support not only for the plan, but the president's proposal making millionaires pay more. >> republicans in washington always say the same thing. any tax on any upper income

person is bad because they're job creators. it's an insult to those people. they don't mind being asked to pay their fair share. >> the former president is bringing together the top minds in the world of business in new york for his sixth global initiative this week. the question is why aren't more democrats cheerleading the president's economic policies? jared bernstein is a contributor and served as chief economist for joe biden. it's nice to see you this morning. let's get straight to it, talk about the president's new initiatives. republicans are balking, but he's changed the conversation here. at least the major point from families making over $250,000 to millionaires and billionaires and saying they need to pay their fair share. but what would this actually do for the economy? >> it would accomplish what he very much need to accomplish in the median term, which is to

have that debt to gdp ratio stabilize. every year, the budget deficit grows over a certain rate. the debt grows. this is unsustainable. this plan, if you look at the tables at the end of the plan, gets that to a stable place and the only way you're going to do that is to enact the kinds of measures the president introduced today and make sure they don't phase in too soon so they don't hurt the struggling economy. it was interesting you showed president clinton there. if there's anyone who really understands that you can have a flourishing job market that's good for the middle class and lower income people with a different tax structure, it's president clinton versus george w. bush. a real study in contrast there. >> president clinton as you point out, was on the "today" show this morning, but take a listen about what he hears from business owners.

>> they say, demand is weak, they're not sure that -- that if they do hire more people, the products they make will be sold. most of them believe that we should have a more come pettive tax system in america. >> how does president obama give business owners a sense of security when it comes to those fronts and how soon? >> i think the most important thing president clinton said this himself, i heard the same thing from business folks. when they talk about uncertainty, believe it or not, they're not talking about page 207 of the affordable care act. foot traffic in my shop. orders for my goods that i produce. and so, the american jobs act is actually designed to help increase demand. get folks back into the economy, both in terms of fatter paychecks and lower tax. something president stressed

today. but on the business side, he's pivoting as he should, to long-term tax reform and offering the republicans an opportunity to work together and i think with very stark contrasts in the speech today. the idea it's not class warfare, thomas. it's math. he's right about that. >> jared, clinton says don't write the president's obituary just yet, but resistance to his jobs plan is something that's across the board. especially in washington. democrats are panicking roughly about 2012, but what can the president do to get nervous democrats on board with the plan that's out there right now? >> in my view, there's only one thing. this morning was about deficit reduction. he's taking his jobs act to the people. if this is going to work, it's going to come from the bottom up and that's why he stresses how important it is for everyone to hear from their constituents. people have had it with washington bicker ring over this

tax versus that tax. this budget baseline versus that one. they need to hear that we are aggressively targeting jobs. now, the president's laid out a plan for paying for it. but right back to the jobs from the bottom up, from the grass roots up. >> jared, thanks so much. >> my pleasure, thomas. from the bottom of my heart, i wish you nothing but the best for this upcoming season. >> charlie sheen contrite and polite last night, wishing his former cast mates all the best as they start their new season without him. he even tweeted that picture with his replacement on the show, ashton kutcher. saying he was giving the new kid a little advice. another highlight was the pageant spoof during the best actress in a comedy. amy poehler followed by the

other women and it became apparent that the ladies were lining up as in a miss universe spoof, pretended to be awaiting the announcement of this next winner and there was it was. melissa mccarthy. suddenly, real tears and a sight of a shocked mccarthy. well deserved there. some broadway theatregoers are in for a real treat this evening. for one night only, an all-star cast is performinging a staged reading of eight. a new dustin lance black play about the government's challenge to proposition-8. my next guest is one of the performers and no stranger. bradley, it's good to have you onset. >> good to be here. >> let's talk about this. the cast is really incredible. i you've got morgan freeman, john lithgow, yourself.

explain how you all got involved in this? >> this play is an account based on transcripts of the challenge in to the prop 8. law. and i was asked to do it. i have tremendous impatience with this issue. i can't believe with all the problems we're facing that we're still having an argument about whether two people should commit to each other. and this is a great way. they've tried to suppress the television -- they filmed these court proceedings and this is a way to get the word out on what was said. >> last night, i had the great pleasure of being at a book signing party with bruce cohen who said that you have the best part in the play. because in the play, you get to play the part of attorney charles cooper, who argues in favor of banning gay marriage.

and there's a real moment toward the end during the summation basically where it seems he loses his way and this is the character tonight you get to portray. you're not worried about being disliked in this role. >> no. not at all. i think it's very important, all joking aside. when ever we talk about anything that has anything to do with sexuality, it electrocutes people. i had a discussion when the issue was going on in california where somebody in favor of prop 8 was basically saying that homosexual sex in her words, freaked her out. and i said, i agree. i said, my mother's sexuality freaks me out. my sister's. sexuality freaks us out. it's a very difficult thing to talk about. and with a part like cooper,

it's very important not to play it in a condescending way, but yeah, boy, he gets a little curly qed in his logic. >> rob rheiner spoke about this on the issue, how it is the last piece of the civil rights puzzle. do you agree? >> i absolutely do. i think it is the last sanctioned discrimination in this country and i'm offended when i hear words like sanctity of marriage. if we're really concerned with saving marriage, then you know, let's make adultery illegal. let's make it illegal. >> and one night only. why is that? is there the chance it may go on the road? >> i am absolutely positive that this will be done in other places. i'm hoping to get it done where i live in pasadena, california. >> i'm lucky enough to have

tickets for tonight. >> come to the show after. >> i'm going to be there for the whole thing. it's really nice to meet you today. everybody knows one of the favorite characters, now, aimpb sorkin's going to do this whole thing. >> unlike guys who wear makeup, i need ratings. >> just a little bit of powder. great to see you today. president obama heads to the u.n. today for a high stakes vote on palestinian state hood and no matter what he does, he's certain to make one side of this issue very angry. jewish support for the president plumeting and the arab spring complicating matters, what kind of diplomatic tight rope is the president walking? back after this. pollen that mad. but with 24-hour zyrtec®, i get prescription strength relief from my worst allergy symptoms. so lily and i are back on the road again. with zyrtec®, i can love the air®. ♪ hush, little baby

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in the world of personal finance, it's massmutual. find strength and stability in a company that's owned by its policyholders. ask your advisor, or visit massmutual.com. welcome back, efrk. president obama heads to the united nations tonight where he could issue a veto against a palestinian vote for state hood. that issue has members of his

administration scrambling to keep a tense diplomatic situation from escalating into an internal showdown, or international showdown, in which already shakey relations hang in the blanks. i'm joined by former white house ambassador. good to see you this morning. when president obama addressed the u.n. general assembly, he suggested that the body would celebrate an israeli palestinian agreement in 2011 and that it might lead to a new member of the u.n. what has changed things so drastically in that time frame? >> what essentially has happened is that on the ground, on the west bank, there's been an explosion of illegal settlements. the israelis have not been able to reach over final status negotiatio negotiations. there's also been a breakdown in the capacity of the united

states to orchestrate direct negotiations between the parties largely because of missteps by the administration's own diplomats and resignation of george mitchell a few months ago confirmed how difficult the process this has been and let's just add this. the netanyahu government coalition is not shall we say, right for negotiations with palestinians. >> let's also talk about the role that the revolts in the arab spring territories like syria and egypt has potentially played in the breakdown of relations and how much does this complicate things for president obama on the international front? >> the president already suffers for an erosion of international report since 2009. most arabs deeply disappointed by united states' policy and the president is basically seen behind the course of history here. it's taken him a long time to oppose a crackdown in syria.

there's a great deal of unhappyness in egypt and he's perceived as having not done enough to compel the israelis with two-state solution. >> let's talk more about the two-state solution that seems universally supported just depending on who you speak to about how it's done. a new poll says that the u.s. stance remains a vital issue to voters. what sort of incriminations could the u.s. be up gens, if they are, if palestine independence is actually granted? >> actually, israelis are already deeply concerned because they're isolated in the wake of having their ambassador withdrawn from egypt as well as turkey. if the president vetoes a resolution, the palestinians will probably go to the general

assembly. you have to go through go stages to get stat hood. you need an affirmative vote, then take it to the general assembly. if the united states vetoes that, and that will cause enormous heart ache for the president in the arab world, may still decide to get a vote of two third in those countries. that will not give them full recognition, but grant them observer status similar to what the vatican has rigts now. >> what would it take if your estimation to get both sides back on track? >> boy, that's the $64,000 question. i think what it's palestinians acknowledge israel as a jewish state, for the palestinians to agree that they will not force a right of return on israel and for israelis to stop illegal construction of settlements and to order a freeze on settlements

and to acknowledge that a two-state agreement is evaporating unless netanyahu negotiates. >> the white house press briefing has just begun. we'll listen incarney is starting. >> we'll go right to questions. >> why did the president put forward a plan that includes provisions that the republicans objected to. >> we have a long-term deficit problem and we to bring that down to earth. we agree on the basic magnitude of the cuts. why $4 trillion? that's what you need to bring the deficit down to a level we can sustain over time to a level where the debt and share of an economy as a whole is no longer growing and stabilizing comes down. the debate we're having is how best to do that. what the president laid out is a

balanced package of reforms on all parts of government combined with some modest reforms to our tax system designed to make our country more competitive and make sure that the most fortunate americans are paying a greater share of income in their taxes. this is about a choice. about what you want the government to pay in the economy and how to make it stronger in the future and make us more competitive, preserve room for investments in the long-term and find ways to reform our tax system to make it more competitive and more fair. that's why we propose the changes. they are good policy. good economic policy. they are better than the alternatives. >> could you explain more about how the buffett rule would work? the president made reference to it in the rose garden. none of it spells out revenue

that would be raised or details and it seems like an important part of the plan that the president would emphasize. >> president proposals comprehensive reform. we're not just making the country more competitive but do so in a way that contributes deficit reduction and asks the wealthiest americans to pay their share in taxes. if you are among the fortunate few in the united states, we should make sure you pay as a shared income of taxes more than what a middle class family pays. there are lots of different ways to achieve that principle. how do you it depends on what do you to the broader tax system as a whole. we're not going to give congress detailed proposal for how to meet that specific principle now because there's lots of different ways to do that. we think the basic foundation of tax reform and we're going to fight to make sure that's part

of what congress considers and ultimately delivers. >> why not give a specific recommendation on that bill. you spelled out how much revenue you want to raise, why not specifics on that one? >> in some ways you can say we're having a debate about whether you should try to reform the overall system, corporate and individual to meet the proposals laid out by the president or get more from the current system. the president laid out a detailed set of changes specific changes for individuals and corporates if we try to get more revenue out of the current tax system but the best strategy for the country is to try to reform the overall system so we bring rates down where we can and eliminate the waisteful subsidis and contribute to deficit reduction and make the economy more competitive in the long run and make the system overall more fair than it is today and we think that's the best way to go and again we think it's better than the alternatives.

>> can i ask you a question about the european crisis. you said the europeans have the firepower to tackle this crisis. is there the political will there and how worried are you that this is going to spillover to the u.s. economy at a time when the economy is already very fragile? >> europe is obviously under a lot of pressure and face a lot of challenges. it's affecting confidence here and around the world not just in europe. we have a huge stake as a country in helping them dealing with those challenges. we have a huge economic stake and financial stake and not in the interest of the united states to europe to be weakened. we are working very closely with them and being very supportive and as they try to craft a more effective strategy. you ask the question is there political will there? i believe there is. it's not a question of the financial resources or economic resources of that great continent. it's within our capacity to solve. you'll see the leaders of europe do what they've been doing over

the last several weeks and months to reassure the will they have political will and not just economic capacity to meet these challenges. it's in the interest of the united states for them to do that. >> if the expiring bush tax cuts for the wealthy is seen as a savings of $800 billion, what about the cost of not letting the rest of the tax cuts expire? how do you account for that? >> the way we constructed our approach was to start from what would be the consequence of having all of it be extended and then we said top rate cuts should not be extended. we now projected what the impact on the deficit and the debt is of having the middle class tax cuts continue. a balanced approach will give you the ability to let middle class tax cuts continue and if you enact the entire program that we've proposed and bring our deficit down to the low 2s

like 2.3% of gdp at the end of this period and keep the debt as percentage of gdp in low 70s instead of climbing up into a dangerous range. we've encompassed it by putting in the baseline that it would be extended. it is factored in. >> secretary geithner? >> just a couple questions. one, are you maintaining that $1.5 trillion in tax increases all of which would be on the top two tax brackets as i understand it will have no adverse impact whatsoever on job creation? >> again, our proposal is through a comprehensive tax reform individual and corporate to make the current tax system of the united states better for investment and better for growth and more fair to average americans. and if congress were to meet those basic principles he laid out, i'm very confident that the modest changes we're suggesting in terms of revenues would make the economy stronger in the

long-term and not weaker in the long-term. obviously you want to do it carefully. that's why the president laid out those specific principles. it's very important we find a way to get congress to make this tax system better for growth for the united states and lots of ways to do that but we want to make sure we meet that test. we're a very large economy. we're talking about estimates over ten years. and $1.5 trillion in revenues relative to what would happen if you just extend bush tax cuts is roughly 1% of the entire output of the american economy over that period of time. it is a modest change in revenues and if you do it sensibly through tax reform that strengthens investment incentives you'll make growth stronger and people more confident in the future and more likely to invest here and that's something we should all be working towards. >> i want to ask one more question. there is a book out that i know

you will take issue with your portrayal. there is a memo written in february of 2010 by white house political adviser who talks about a year one review that looks at the economic plans and talks about a number of efforts by in his view, the economic team in the white house to kind of slow roll for the president's orders but it does say once a decision is made implementation by the department of treasury has times slow and uneven and that along with other factors adversely effect execution in the policy process. if you could respond to the book and also what pete said about your execution. >> i disagree with that characterization. i haven't read this book but to borrow a phrase i live the reality. the reports i've read about this book bear no resemblance to the

reality we live together. no resemblance. >> secretary of treasury tim thy geithner talking about a new book that we're going to talk about in just a moment but spent the bulk of that news conference talking about the president's deficit reduction plan. a $3 trillion plan. we're covering the big news from coast to coast. the hot topic today, making millionaires and billionaires pay their fair share. some republicans are calling it class warfare but president obama says the tax code has to be changed. >> if tax reform doesn't get done, this plan asks the wealthiest americans to go back to paying the same rates they paid during the 1990s before the bush tax cuts. we can't afford these special lower rates for the wealthy. rates by the way that were meant to be tpo