economic sabotage, let's play "hardball." good evening, i'm chris matthews. in washington, there's news tonight that some on the american right are plotting the global explosion of a default on the u.s. national debt this fall. the plot is to tie the regular vote to extend the debt ceiling to the obliteration of the affordable care act. according to the plans leaked to right-leaning news organizations, any measure to finance the health care act would detonate a refusal to make

good on american debt. the first time this has happened in the country's history. and the repercussions could explode the economic order. do the leaders of the republican party tend to go this far? dare to sabotage the american economy and much of the world economy in order to defund a program, the affordable care act which is the law of the land? and will they go to this drastic extreme to intimidate the u.s. congress or the president or both? if so, is this the extreme case where it trumps the most minimal loyalty to the common national interests where anything goes, where the ends justify whatever means there are to be had no matter how menacing to the country or the world? alex wagner is the host of "now" weekdays on msnbc. we've got a number of news resources out tonight, the "washington examiner" which is a bit to that with new source stories saying the people on the

republican right are planning to step back from a government shutdown in september but to proceed to an escalation of this fight to basically defaulting on the national debt. that would be their threat. if the congress moved to fund the affordable care act which is the law of the land, they would cut off if they could any vote to extend the national debt and therefore, of course, default. what do you think of this? >> bad to worse, chris, i don't know. if you thought holding the debt ceiling hostage, if you thought a continuing resolution was a bad idea, you'll hate this one. republican elders came out very reasonably and said we cannot hold the country hostage, we cannot hold the budget hostage on defunding obama care, it's never going to work. the debt ceiling is a worse idea. house leadership is engaged in political wink wink theater where they effectively have to entertain every single harebrained idea that the right

flank has to placate them. the question is, at the end of the day, can they bring them back from the brink? we saw john boehner fail there. his grasp seems to be loosening. . you would think that something would bring them back from the precipice, but i think the country, we get less and less convinced by the day that anybody's in charge here and that anybody has their hands on the captain's wheel. >> support for government shutdown is evaporating over the weekend. tea party, rand paul stated it plainly. shut down is a bad idea he said and we'll take a listen to him. >> i don't think shutting down the government is a good idea. but i do think we were elected, conservatives were elected to stop this overreach, this government takeover of health care. we should use the leverage of controlling part of government

to get the law more to our liking. >> well, that strikes you as reasonable and it does at that point, there are several reports the republicans are looking to drop the threat of a shutdown this december. instead, they're looking at an approach that would result in something far worse, something like economic armageddon. and one of the reports comes from robert costa in the national review who writes, quote, sources tell me the house gop will probably avoid using a shutdown as leverage and instead use the debt limit and sequester fight areas of trades. negotiations over increasing the debt limit have been used to ring c wring concessions out of the administration. delay obama care in exchange for an increased debt limit. we were asked by hardball about these reports and using the debt ceiling limit. a spokesman from house speaker john boehner's office says no decisions have been made. we're looking at all the options to reach our ultimate goal of

repealing this law that is causing premiums to soar and full-time jobs to disappear. we've got other sources, we'll go to them later, the "national review" one source, "the washington examiner" points to another. for a while we thought sanity was coming to your party and from the far right, the libertarian right. and now we find the new strategy is, in fact, an escalation. they're talking about using the debt ceiling, which means you don't extend. is it extreme politics? >> we will not default on our debt. we will not default on our debt. >> he didn't. he said we're looking at all options, including default. >> we're not going to default on our debt. >> explain to me what the right is up to here. >> i think what the right wants to do is to hobble as much as possible, which is obama care. they're worried about the subsidies going into effect. they know we'll have fiscal

meltdown in this country in the long-term and they're worried about that. they're trying to find a way to pick at this unpopular law and they're going to use all their negotiating tactics they can. the interesting thing about robert costas explanation was sequestration. some sort of bigger deal on the budget deficit on the continuing resolution -- >> i'm missing -- you're missing my point. is there a threat here from people like rand paul and ted cruz and mike lee of utah from the right of your party, no the the center of your party, but the hard right, to basically play such "hardball" they're willing to face default or threaten default on the united states dollar, basically, in order to get their way to kill the law of the land which is the affordable care act? >> no, they're not going to default. >> what are all these reports about? >> they're going to push the fight, which they understood was not a good fight to have, to a bigger fight on the bigger fiscal realities facing the country. we are not -- >> okay.

i want to give you another source. alex, this isn't just the "national review." the plan is to pass a 60-day cr extension, to keep spending at the existing sequestration levels. then house leadership wants to combine democratic desires to roll back sequestration with conservative desires to delay/defund obama care into the debt limit fight. they're leaking this story. they're putting the word out without any fingerprints on it to get the threat out there that they're willing to bring down the dollar. >> can we focus on a moment for how completely absurd this is? it is like literally yelling they're not going to keep the government running unless we establish a colony on mars. obama care is settled law of the land. it is happening. the notion that somehow the white house is going to do deal making onset ld law of the land recently upheld by the supreme court and litigated in the 2012 presidential race and we know

how that turned out, is ludicrous. the idea that there's going to be a deal on sequestration when half of the far right plank thinks that sequestration has been a great thing is also crazy. i don't see where the bargaining happens here. >> well, there's going to be a bargain, a budget deal. we've got to figure out on a continuing resolution, we've got to figure out entitlements. at some point in time, worrying about getting tax reform, we need to fix this government. i think at the end of the day when you have this debt limit fight. it will be a fight. you were in the house of representatives. you know how hard it is to pass any debt limit extension in the house of representatives. i think he's got to cobble together the votes and that requires a bigger deal, there'll be a bigger deal. that being said, there will not be a default on the debt. >> thank you, alex wagner, a pro at this discussion. you're dead right on everything you've said. i'm so glad you're here. >> i'm so glad you're here. >> you can do that too.

coming up, ted cruz, we know he was born in canada, of course. we know he's renouncing his canadian citizenship which had nothing to do with, of course, they threw at it him. where are all the birthers out there insisting you can't be president unless you're born here in the united states. by the way, the craziest of the birthers said he was born in kenya. even if he was born in kenya by an american mother, he would be just as liable to run for president as mr. cruz. would you explain the conundrum here. also, the report lays to rest the lingering doubts about climate change. why are the global warming deniers still at it? what's in it for them to deny what's obvious to the scientists? and the republican governor of maine is being quoted as saying we're going to keep checking this one out, but he's been quoted as saying obama hates white people. you mean he doesn't like his mother?

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you were born in canada. could you -- are you even eligible to be president of the united states? >> my mother was born in wilmington, delaware, so i'm a u.s. citizen by birth. >> i'm a u.s. citizen by birth. and he couldn't be more right. that was texas senator ted cruz telling jonathan carl that he is, in fact, a natural born citizen, therefore eligible to be president. cruz went the extra mile to release his birth certificate to the dallas morning news which reported cruz was born in california to an american

mother, has dual citizenship. and following that report, senator cruz released a statement renouncing his canada citizenship. he says now the dallas morning news that i have dual citizenship, i'm an american by birth and as a u.s. senator i believe i should only be an american. it's odd for me to say about a guy who i disagree with on many points, he couldn't be more right. the irony, of course, it mirrors the phony scenario of those who have been arguing to this day that president obama was born overseas, mostly in kenya and not eligible to be president. he was born to an american mother in the state of hawaii that was actually in america, by the way, but the birthers are all but silent when it comes to ted cruz. cruz has already visited the important presidential primary states of iowa and south carolina and he's headed to new hampshire this month. he's giving every indication he

may be thinking of running for president and is eligible to do so. he's a natural born citizen because he did not have to be naturalized. that's how simple it is. he was an american at the second of his birth. joining me to discuss this, political writer wayne slater and jonathan capehart. wayne, i couldn't be more clear in my complete and utter agreement with senator cruz. he's an american by birth, his mother was american. i don't care if you're flying in an airplane over toledo or toledo's somewhere in spain. if you're born to an american mother, you're an american, and honestly, you don't have to get naturalized. that's what a natural born american means. you don't have to apply for citizenship. you are a citizen. natural born. don't the crazy birthers in that state of texas, which you have to report from, the cross you must carry, defending some of these guys. all that handful of birthers down there, which is the heart of them, don't they get the

irony that accusing obama of being born in kenya, which wasn't the truth, would still make him a natural born american? >> yeah, the real problem for the birthers is that ted cruz really was born in a foreign country and so based on that argument, it really is a real, you know, a real problem. >> don't they get in their head, oh, we've been accusing obama of what this guy did, and we've accused obama by nature of being born in this fictitious notion of being born in ken ka. >> i'm going to propose they absolutely get it, chris. and you know why as well as anyone else who watches this closely. this never really was about obama being born somewhere. this was just say something bad about obama. the black guy in the white house who must be from somewhere else. now they find themselves, especially the folks in texas who i suspect will like to endorse ted cruz if he becomes a serious presidential candidate. now they find themselves in this

conundrum where they can't or will have real difficulty gymnastically working their way around this why is he eligible? it's a problem. >> i'm going to stick to that and not about the ethnic thing. the other thing is obvious in some cases. but, jonathan, i guess i would think in the african-american community, anyone watching in that community would probably say it's obvious to me they look upon canada as a white country and kenya as a black country and even though it's your mother who was white in both cases, it's somehow different. >> well, i don't know if the african-american community is going to go that far. they are probably with you with how you set up this conversation. which is they're accusing -- well, it's senator cruz has done what the birthers accuse the president of having done, which isn't true. >> right. how do they handle this? he's got the hot hand. he and rand paul have the -- >> they don't handle it at all.

they don't handle it. >> how about donald trump. how does he deal with this? >> i think he -- >> here he is. donald trump, loves to talk about it. popular guy in some corridors. and if you have problem following this point of view it's probably because donald trump doesn't want you to follow it. like eisenhower used to do, mix up the syntax a little bit so you don't know what he's saying. take a listen. >> let me ask you this, ted cruz born in canada. is he eligible to be president of the united states. >> i'm not sure where he was born. >> he was definitely born in canada. >> so you'll have to ask him that question but perhaps not. >> ted cruz's mother was an american citizen, he's an american. >> i don't know the circumstances. i heard somebody tell me he was born in canada. that's really his thing. >> that's really his thing. that is what you do when you don't know what to say. it's the first time i've seen him befuddled.

what do you say? you got me. kids growing up playing tag, he doesn't say you got me. >> no, he doesn't. because he's caught. part of that conversation was also a -- a conversation about his birther accusations against the president. >> yes. >> and we might all think that's, you know, done with and we're not talking about it anymore, but it's still happening. people going to town hall meetings around the country saying -- >> let's get to where -- i want to get this from texas. it seems to me there's a very interesting compelling, continuing effort to delegitimatize this president. people on the right say he's a disaster, he's clearly not, look what he's already accomplished in terms of health care and other issues and getting the bad guys and stuff like that. they referred to him not as the president of the united states but a liberal leader. they refer to the health care act of 2010 as a bill. they refer to him as obama. they don't say the president. they don't say a law. they don't even speak the language we normally speak in

civilized political debate. they've changed it so much he's not supposed to be there. and that's the way to put that asterisk next to him like barry bonds. he didn't hit the home runs. i think that's what they're up to. >> i do. i think that's right. i do think that's right. i think there's a sense in everything that's done, not only the normal political give and take where you challenge your opponents' bills, proposals, ideas and initiatives, but the idea that the person himself was never supposed to be there. he was never supposed to be reelected. and now if they just wait it out, the guy who was never supposed to have been there whose signature accomplishment, health care, should be defunded if for no other reason he did it and it has his name associated with it. >> yes, get him off the record books! erase him, erase him in your mind. >> you know, chris, how the birther conversation is morphing into an impeachment

conversation. they don't want to just wipe him off the books, they want to get him completely out of office accusing him of committing a felony by forging his birth certificate. he's there in office illegally and at one town hall forum, a congressman was asked what can be done about this and he willingly talked about, well, impeachment's not really an option because we don't have the votes in the senate. we could convict him in the house and bring up the charges in impeach him in the house but we couldn't convict him in the senate. >> thank you. up next, meet sonny, the first family's newest addition. and this coming monday, you can catch "hardball" exclusively and only at 7:00 eastern. and for those of you watching at 5:00 eastern, starting next week, you'll have to tune in at 7:00. and i'll keep reminding you about this all week long. i know how important this time of night is. it's sort of when we slow down,

it's when i speed up, this is "hardball," the place for politics.

back to "hardball." and time for the "side show." president obama back in washington, of course, after taking a week off in martha's vineyard. and the "late show's" david letterman commemorated with this video last night. >> let's put together a segment about memorable presidential vacations. and we've got it for you tonight, memorable presidential vacations throughout the year. i hope you enjoy this. ♪

>> wow. now i see why he had the big hat. >> well, the president also introduced the newest member of his family and another portuguese water dog named sonny. almost every president has had a pet. there's only been one first dog who has lived in the white house under two different presidents. spotty and then had the good fortune to return again with george w. bush when he became president in 2001. so two presidents for that dog. however, the most famous by far of all the dogs in the white house is fala, the scottish terrier. mgm even made a movie about him called fala at hyde park in

technicolor. it's over near the tidal basin. and that's something for sunny, of course, to aspire to. look at that big dog. that's "hardball" for now. coming up, "your business" with j.j. ramberg. without saying a word... if you have yet to master the quiet sneeze... you stash tissues like a squirrel stashes nuts... well muddlers, muddle no more. try zyrtec®. it gives you powerful allergy relief. and zyrtec® is different than claritin® because zyrtec® starts working at hour one on the first day you take it. claritin® doesn't start working until hour three. zyrtec®. love the air.

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