fireworks come early, let's play "hardball." good evening. i'm chuck todd sitting in for chris matthews. leading off tonight. can't we all just get along? government in minnesota shut down. lock outs in the nfl and nba. democrats and republicans aren't remotely close to an agreement on the debt ceiling and cats and dogs still aren't living together. we don't seem to be able to agree on anything. democrats and republicans are waiting for the other side.

blink on raising the debt ceiling and the mere prospect of result has real life implications for the rest of us. interest rates and economic recovery. are the two parties really willing to play roulette with the u.s. and global economy? if the u.s. even come close, it could open the door to a serious run by an independent. not since ross perot have we seen anything like it. so on this independence day we ask, could we see a real run by a third party candidate. plus, did mitt rommy put on the flip-flops again? talking about president obama handing the economy, romney said i didn't say that things are worse, except that he did just days early. quite a few times. we have it all on tape. we put it together in an independence day panel of experts to look ahead at the republican field, all those money reports and everything else and the president's chances of reelection. and we mentioned, the nba lockout added to this nfl lockout. is it possible? we could be looking at autumn

and winter with no football, no basketball, at least on the professional level, because the millionaires and billion airs can't agree on how to divide billions of dollars. finally, what's wrong with this picture? nothing if you're mitt romney. what candidate's son is posing with him? here's a hint. not romney's son but the son of another presidential candidate. we will have it all on the side show. we start with the state of the country. chairman of the dccc and democrat from new york. he joins me now. congress there's a lot of he said, she said going on. yesterday senator chuck shumer speculated that republicans are trying to sabotage the economy to see president obama fail. let's listen to it. >> we need to start asking ourselves an uncomfortable question, are republicans slowing down the recovery on purpose for political gain in 2012. now, it's clear, insisting on a

slash and burn approach may be part of this plan. it has a double benefit for republicans. it's tidy and it undermines economic recovery, which they think only helps them in 2012. if the public comes to believe that republicans are deliberately sabotaging the economy, it will backfire. >> that is a harsh charge. it's a member of the democratic leadership, arguably the second most powerful senator in the democratic controlled senate. do you agree, congressman? >> well, look. the fact of the matter is, republican economists, john mccain's adviser said today, if the republicans do not come to the table and engage in a fair and balances negotiation that extended the debt limit in a fair way that increases revenues and increases spending, we'll be

thrown back into a recession. credit card interest rates will be going up. the fact of the matter is, the progress we have made on the economy will be lost. failing to negotiate fair and balanced way where the sacrifice is shared and not born by the middle class. one other thing, look at eric cantor who quit on the economy, quit on the talks. he's the number two guy. eric cantor is the number two guy in the house of representatives. he quit on the talks and on the economy. that tells me everything i need to know about their negotiating. >> it doesn't sound like you are ready to sign on to senator schumer's theory here. >> i'm more interested in outcome than input. what we need is what they go through. we need to reduce debt. the way to do that is decrease

spending. democrats are willing to tighten our belts. we have come up with a trillion dollars in cuts. people making over $1 million need to do their fair share and increase revenues. >> have a good fourth of july weekend. we'll see you -- >> big mets-yankees series in new york tonight. >> i'm always rooting for the national league. you have to stick it to the big guys. congressman, thanks. >> thank you. all right joining me now, chief congressional correspondent for the national journal. doesn't want to kick the can down the road. >> right. >> sounded like a guy who, if that's the deal that's cut and there's a temporary deal, right now, that's what smells like is coming. >> yes. >> he did say i will vote against that. what they say and don't say matters. he didn't say i will vote against them.

it's going to have to be against the house leadership to agree to a short term resolution to this absent huge deal. >> eric cantor told me this week, there's a great column on this, a great column about eric cantor. if we look in five pots here, the white house, senate republicans, not democrats house democrats, all reluctantly support the short term deal. the one who wouldn't, house republicans. >> they don't want to vote twice. there's a number of the house majority that total 239 that want this to be the moment of decision. they don't want a moment of indecision. they want this, all of this to come to a head now, with all the implications that come with it. the only way i see a short term agreement passing is if implied in that, written in blood, that the short term is all spending cuts, no revenues, zero.

and you agree, preemptively that the second stage will include tax reform and the president commits publicly, lower corporate rates and look at the subsidies the democrats are talking about. republicans might sign on to that. we are a long, long way from a deal like that. >> the thing i have never bought into, who the heck, i'm going to fast forward seven months from now. more political courage here. >> unless you figure out and believe as the republicans might, that the president will be more willing to lower rates and do other things because he's debt pratt about the economy. that's a possible scenario. >> who has the leverage, right? we had president obama this week who decided to do something he hadn't done in a while, call them out. it got under the skin of the republicans. they fought back. everybody thinks they have

leverage. >> right. >> not only leverage but entrenched positions that must be defended. republicans believe with a slack economy, if they give in on tax increases, their base, which isn't in love with them in the first place -- >> how fragile is that? you said they are afraid of losing 100 members. >> they lost 57 on the cr deal. >> house republicans? >> yes, house republicans. they have fears of losing 100 to 120. if you lose that many on the biggest domestic deal of the year, it's a borderline crisis. democrats don't believe they can go anywhere farther than where they have gone on spending cuts with no revenues. if they do, their base will defect. when you have that many democratic seats up in 2012 and a base walking away from you, it's a crisis. >> i want to talk about the senate republican stuff. here was their response to president obama. listen. >> maybe if you take a volume

and come and talk to us, it might be helpful. >> it's class warfare and the kind of language you would expect from a leader of the third world country, not the united states. >> you should be ashamed. i respect the office of the president of the united states, but i think the president has diminished that office and himself by giving the kind of campaign speeches he did yesterday. >> i'm surprised they are all shocked. at the end of the day, there's been a lot of shots fired at the white house and the president questioning their leadership. it's only natural a president is going to fight back. >> the president is 48 or 49 in the polls. economic numbers are more shallow. personally, 48 to 49. congress at 17, 18, 19, 20. hello. let's do the basic math there. the press conference is about moving the needle of public

opinion. they are entrenched. >> trying to reframe the debate. >> generally speaking, the american public sees congress defending itself for inaction. they assume they are inactive. the president knows he's got more to gain than to lose by striking this particular contract with congress. the president invited them into the negotiations, they walked away. for seven or eight weeks they have been talking or working. >> they have all watched the movie "dave" too much. why is he pulling a kevin klein and saying every day, come in. let's go, four hours. until that happens, which governor christie has done in new jersey and other presidents have done. until we see that kind of engagement like we did -- it told us it can work. all right? so until we see that level of engagement, we are not moving anywhere. by the middle of this months the

markets will price this and not rationally. they will do it early. when the psychology takes effect, we don't know what it's going to do. >> we'll see what the tea party caucus, how big it really is. we'll find out how many there are. >> great to have you on. thank you. coming up, with the battling over the budget, there may be room for a third party candidate for president, especially if washington continues the gridlock. the opportunity for an independent candidate to get in the race like ross perot did in the '90s?

welcome back to "hardball." voters are unhappy with washington, the president, congress, the economy. could it fuel an actual third party come 2012? we saw it with ross perot. could it happen again? both are msnbc political analysts. good guys to have on this topic. howard fineman, let me start with you. look, the direction of the country, 29% in the poll. we have the president's approval rating on the economy upside down. congress' job rating is sitting in the teens. the idea the republicans brought change to congress, the majority say no or the wrong type of change. it's all there. what's it going to take? >> there isn't a figure or

institution on the landscape. i was in minnesota at a democratic event where they are charging themselves up for the budget fight. i didn't hear anybody say anything particularly nice about barack obama. that's on the democratic side. they didn't attack him, of course, but they didn't say yeah, obama. they are just attacking the president as, you know, the center of all evil. so, what's it going to take? it's going to take somebody with big ego and lots of money. in 1992 that was ross perot. now, the only one that fits that is the mayor of new york, michael bloomberg. >> because he's short? >> no. he's got billions and he's got the organizational gift. these are guys who know how to

build empires and business and think, some of them, they can build a temporary empire, which is what a presidential campaign is. bloomberg says he's not doing it. >> an gus king, a great name in u.s. politics was on another show this morning, ""the daily rundown"." he brought up a candidate. listen to who he floats as a potential candidate for a third party ticket. listen. >> i think it would be somebody, a guy names chuck hagel, a republican senator from nebraska -- >> who endorsed obama, essentially. >> he's a terrific guy. i could see a guy like that and a democrat coming together to form a team that could change american politics. >> chris, this goes to the idea that because the business community isn't well thought of these days, you are not going to

get a businessman. warren buffett is probably too old to run for president. >> first of all, who was that handsome guy interviewing him? >> bring it on. i know. he's better looking this morning than right now. >> chris, i thought he was going to mention chuck todd. >> yeah, well -- >> you know, you bring up a good point. wall street, business tycoon type is going to wear a little less well after the bank bail out and everything we have seen with the economy, the rich guy spending his own money because he's interested in office. hagel is an interesting idea. the thing that i feel like this and howard touched on it. yes, there is clearly disaffection. in 2010, people voted for republicans in congress but they

didn't like them. they voted for them vn though they disapproved of them. there's an idea out there, yes, we want something different. the people underestimate how powerful the two parties are. there are minute things that matter. getting on ballots in all the states. that's why you need a rich guy, or gal, and i don't see anybody out there. is he going to put in the money? it's too much of a pain. >> howard fineman brings up the battle axes. king talked about the group four years ago, they are trying to get on the ballot. if there's a group that says here you go, we have ballot access, there's a lot of politicians whose egos say there it is. >> i'm unclear as to how the new come pain laws and the freedom

for superpacks and so forth that can spend unlimitly to allow big money people, who if they didn't run on their own could help fund to make sure they get ballot access. when i first started in the '80s, ballot access was almost impossible. it's now possible to do it. you need a lot of money but you can do it. you can get on in all 50 states. that's the way it would have to happen. >> i'm going to put up one more poll. 31% believe the two-party system is so broke we need a third party. 52% say they can work well with the two-party system. the question is, you know, when this happens, when perot rose up, you saw the two parties respond. bill clinton became interested in fiscal issues. you saw the republicans talk

about less government things like that. i don't see the two parties talking act trying to look like they are going to get something done and fix something. >> no. you know, chuck, i think what you point to is it's possible if a third party candidate comes out and drives the discussion. you remember '92. it looked like ross perot could win that thing. >> he won the message war. he shook the race. >> is there space for an independent to do that and if that person gets it, are they okay with shaping the race and losing? that's the question. can you be influential and lose and feel it's okay? i think the two parties would react and try to close you out immediately. take a fight back. >> chris and howard, we could keep talking. it's always fun to speculate

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back to the "sideshow." first up a two for one special. the minneapolis review reports at a wednesday book signing sarah palin fans were told they had to also buy bristol's book to get the x governor's graph. mama grizzly, you betcha. and a college-age son went to a campaign rally. the hitch, it was mitt romney's rally. the tribune snapped this priceless shot of him reaching over to pose with the candidate.

the huntsman camp says, will simply wanted to see another campaign event. he meant nos did respect. to who? his dad or mitt romney? finally, new on the books. it's july 1. that means hundreds of new state laws go into effect. in virginia, dead people can vote. starting today, if someone sends in an absentee ballot and dies before election day, that vote is still good. in maryland, have trouble leaving your dog? good news they are now allowed in restaurants with outdoor tables and patios provided they are on a leash. in new york state, it's mandatory for schools to allow kids to opt out of dissecting frogs in biology. they can watch interactive films. come on now. no dodge ball anymore. you can't get your hands dirty with a frog.

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