outsmart the threats. see how at cisco.com cisco. time for one quick e-mail. what are they saying? >> two snowy white birds mating outside my window. >> there's no greater sound than that. "morning joe" starts right now. i have asked leaders of both parties and both houses of

congress to come here to the white house on thursday so we can build on the work that's already been done and drive toward a final agreement. it's my hope everybody is going to leave their alt may tums at the door then we are going to do what is best for our economy and our people. >> look at that beautiful sunrise over new york city. good morning, everyone. it is wednesday, july 6th. welcome to "morning joe." with us on set, we have msnbc political analyst pat buchanan back with us on the set. we have stephen rattner with us. he's going to break down each deficit plan for us. >> it's coming. it's coming. >> veteran of the u.s. army, wes moore back with us this morning. hello, willie. we saw that. >> you know what's weird?

>> what? >> barnacle is over there. >> just put him on at some point. it's so embarrassing. all right. well -- can we -- >> he is. he's sitting over there. >> we can put him on. that's a shame. >> it's sweet, though, isn't it? >> we'll bring him on in the next hour. make it look like he was supposed to be here. okay. we have a lot to talk about. big news over the budget and deficit reduction. president obama is rejecting calls for a short-term hike. he made a rare appearance in the press room. he's challenging them to seize the moment and cut a deal. >> i don't think the american people here sent us here to avoid tough problems. it's, in fact, what drives them nuts about washington. when both parties simply take

the path of least resistance. i don't want to do that here. i believe right now, we have a unique opportunity to do something big. to tackle our deficit in a way that forces our government to live within our means. still allows us to invest in that future. >> all right. sounds good. sounds hopeful, it does. maybe something will get done, like everyone is going to come in. less than an hour after the president's invitation, john boehner missed the discussions saying a deal won't pass in the house, if it includes tax increases. he said, i'm happy to discuss the issues at the white house, but the discussions are fruitless until the president recognizes economic and legislative reality. >> that doesn't leave a lot of doors open, does it, pat? >> the president changed his

tone. we didn't hear about corporate jets and millionaires and billionaires in the country. it's late for the president. mika, they have to drop the taxes off the table unless they talk about dropping rates. they are not going to get it. there's no sense in talking about it and talking about it. i think they can get a short term deal. my guess is we are almost beyond the point to get a long-term deal. >> they are not going to get a deal from the democrats without something on the tax and revenue side. >> something. >> you cannot address the budget problem only on the spending side. the numbers don't work. >> i don't think they are going to get anything on the tax side. i bet they get something on the spending side. barack obama is staring down the gun barrel at default. >> well, the american people, the country is staring down the barrel of default. the poll you had blames the

republicans for the problem more than the president. >> john boehner can't go home again if he signs on to higher taxes. he's dead. >> i think people need to be cautious on overstretching. >> we have a situation where spending has been 20%, it's now 25%. revenues have been 18%, they are now 15%. we are hitting an impasse. at the same time, if a deal is not done, if at the end of the day we start having these effects in the economy and the president, you have a blue collar worker, a medicare recipient saying the president was willing to give on medicare and medicaid but because of the tax issue, it won't get done, it will backfire. >> the president of the united states runs the american economy. if it goes into a recession or

depression, boehner isn't hoover, obama is hoover. >> all right. >> i want to ask about the tax increases and revenue raises. eric cantor saying house republicans aren't objecting to this loophole or that, we oppose raising taxes on families and small businesses at a time we should be focused on job creation. >> there's clearly not going to be an increase in tax rates. pat articulated that clearly. nobody is talking about that. what they are talking about are revenue enhancers or other ways to raise revenue. the $6 billion a year we spend in ethanol, things like that. there's a consensus to cut that. that is limited. the biden talks identified $1 trillion worth of stuff, including medicare cuts that are acceptable. you are not going to get to the

numbers you need to without increases. wall street journal agrees with. bill clinton said a corporate income tax rate increase. the highest in the world, drop the rates of corporate rates down at the same time we get rid of the loopholes. you can get a republican deal on that. a short term deal on that. if you go for straight increased revenue. >> you are not going to get revenue for that. >> senator john cornyn says republicans will not agree to raising taxes. in direct ways, such as closing tax loopholes and ending certain subsidies. >> let me be as clear as i know how. we are not for raising taxes during a fragile economic recovery. it will make unemployment worse, not better. it's the bottom line as far as i'm concerned.

>> the back door is closing loopholes. >> he's closing the back door as well. i do not believe we can get a budget deal, anything more than trims around the edges without increase on the revenue side. wherever you want it to come from, i don't think you will get democratic support without it. >> aside from changing promises, put aside the constituents, is there a reason why republicans can't give in some way, shape or form on taxes. >> they don't believe you raise taxes when you have 9% unemployment. it's not only politics, it is principle and philosophy. they think it's the wrong way to go. i think it's the wrong way to go. you don't do it because somebody says wouldn't it be nice if somebody gave something. isoing to help jobs? i don't think so. >> on the principle issue, the

u.s. is taking in the lowest taxes -- >> you know why it is? an economy of 9% unemployment. at 5%, the revenue goes up. w tax rates lower than we can afford. we cut taxes and raised spending. it's why we are in this problem. with respect to the recession, i agree with you. we don't want to shrink the deficit. that is the least of our problems at the moment. if that's your objection, have them phase in two and three years. i'm fine with getting past the recession. you cannot address it without more revenues. it's not possible. >> i'm inclined to, frankly, you have to do it. you aren't going to get the revenue increases. there's a political reality, based on the fact republican parties made a commitment, they

believe in principle and philosophically it's wrong. why do it for the president of the united states who has been accusing them of behaving worse than sasha and malia. >> oh, my goodness. here we go again. >> look, my own view is the default -- did you read lawrence the other day in the wall street journal? >> i didn't read it. >> here is what he says. obama is under stating the fed interest rates. he's overstating the growth. both of them are normal. 9 trillion more. we are headed down the road to default because of what we have done. >> part of what we have done is cut taxes while we increase spending under the bush administration. it does not work. lower your income and raise your expens expenses. >> more than half the country,

51% pay zero income taxes on wages and salary. >> that is not true. >> that is not true? >> you said that yesterday. it was true in 2009 because it was a recession. in a typical year, 40% of americans don't pay taxes. however -- let me finish. people with incomes of $40,000 and less, they all pay social security taxes of 10%. the bottom half of that 40%, the lowest 20%, you know what their income is? >> lowest 10%? >> 20. >> under 20,000. >> about $20,000 a year. you want them, the poverty line, by the way. you want them to pay more taxes than the social security taxes and the state sales taxes they are paying? >> i think everybody in a country like this, a democratic republic, everybody pays something.

everybody pays taxes. every man should be will be to fight in the military as wes did. every man should vote. >> let them pay $1 of taxes. it's not going to solve the problem. >> the point is, you are not going to solve the problem by the president saying we have to have more tax revenue when we have told them we can't get it through the house. >> if we repeal the bush tax cuts, it raises $4 trillion. >> there's a lot of talk here. what are you going to do when the republicans say we are not going to give you a tax increase. >> if republicans want to play gutsy politics, fine. i think the president stares them down. >> ultimately not be able to go home, either. i could be wrong. off longer track record than me, pat.

>> obama will fold. who is talking about jonestown yesterday, using the language and rhetoric? >> obama can't fold. he cannot fold and have a serious budget deal. >> he's going to have a short-term deal. >> if the deal doesn't get done, it's not going on obama. >> want to put money on that, wes? >> you bring up an interesting part of shared sacrifice. we have a point, over the past decade, we have not been engaged in one, but two wars. three wars. we have given tax cuts. the idea of shared sacrifice is real for the american people. we are sending off, adding revenue in terms of what we are spending. $120 billion alone in afghanistan. alone. that doesn't include aid. 47, 000 troops still in iraq and

we have tax cuts in place. >> the united states is strategically overextended worldwide. what are we doing borrowing money from japan and europe and persian gulf. we are overextended. >> exactly, pat. >> the country is overextended. you can't start fighting wars and not raise the revenue. >> maybe you ought to end the war. >> here we go. we have to do a little bit of everything. >> let's do one plan. we talk about both sides in broad strokes. walk us through what is actually inside the deficit reduction plan on each side. >> fair enough. >> simpson sets the standard. they came out with $4 trillion in deficit reduction. the paul ryan plan got about the

same amount of deficit reduction, $4 trillion. the obama plan is $2.5 trillion of deficit reduction. the biden talks that have been going on are at zero, really, but they are talking $1 trillion spending cuts, maybe. by the way, even if the plan were adopted, we have $6 trillion more debt ten years from now and the gdp ratio goes up. let's look at where the cuts come from. 70% of cuts from spending. $2.8 trillion. ryan cut by more. obama $1.7 trillion and biden at maybe a trillion. if you look, all simpson had $1.2 trillion of tax increases in the plan.

ryan 6$600 billion of tax cuts. very quickly, lastly, if you look at where is the deficit reduction coming from, under simpson, 30% comes from revenue increases. ryan negative 15%, he's cutting taxes. obama 30% and biden zero for all the reasons pat said. the president is already playing the game from the 30-yard line. the most he's going to get is 30%. right now, it's zero. we'll see how it comes out. the simpson, is $4 trillion over ten years. it's a big number, but over ten years doesn't pack in what we have to do. >> it's a thoughtful plan. it balances revenues, gets rid of loopholes and garbage.

>> it will be the deficit will be far higher than that. >> what does that tell you? >> it tells me -- >> tells you to do more. >> you mean like when you have to raise taxes. it doesn't tell me that. >> the problem is 25% of gdp the feds are spending and the 15 state and local are spending. 14% of gdp used to be called socialism as we were kids. >> it's not about the point of leverage, but where we are going forward. this question is about are we going to pay for our obligation. >> yeah. coming up, we are going to talk to former national security adviser, dr. brzezinski and senator jim demint will be on set. up next, will joe biden be on

the 2012 ticket? who will replace the vice president? first, let's go to bill karins with a check on the forecast. what do we call him, haboob? >> haboob is a term. it's an interesting weather phenomenon. it happens in desert areas. we refer to them as dust storms, but it's not fun. this was phoenix yesterday. this was rolling in at 70 miles per hour. it was 15 miles wide. knocked out power to thousands of people. the visibility went down to zoe row. you had to pull over and wait for it to blow through. the clean up, a quarter inch of dust through the phoenix area. as far as the forecast, we don't

expect a lot of bad weather. a warm day. we are going up into the 90s, today. a few scattered storms. 100 degree heat continues. scattered thunderstorms for our friends in the southeast and also florida. haboob, word of the day. you are watching "morning joe" brewed by starbucks. ♪ [ male announcer ] what is the future of fuel? the debate is over. ♪ lexus hybrid drive technology is designed to optimize any fuel source on the planet. even those we don't use yet. because when you pursue perfection, you don't just engineer a future-proof hybrid system. you engineer amazing. ♪

time to look at the morning papers at 22 past the hour. we start with the san francisco chronicle. leaders took steps to cut spending. hundreds of the workers saved six-figure earnings. republican employees -- don't point at rattner, pat.

they were making at least $240,000. i think he saw the opportunity to cut. >> wall street journalist, tim pawlenty would be the first president to never live outside the state he was born. he plans to doubledown on the narrative in iowa. he's been campaigning for nearly a year. republican voters ranked him sixth among eight gop contend s contenders. more on that in politico. >> google is offering access to a social network iing site that could challenge facebook. the most popular profile is facebook's ceo, mark zuckerberg. interesting. >> all right. politico, now. >> joining us is patrick with a

look at the playbook. >> i got rid of it, patrick. >> you got rid of your second cat? where? >> he's just a little kitty. >> a farm up state. >> we found it a loving family. we'll be able to see it from time-to-time, i promise. >> all right. >> let's move on from cats. >> we are foster parents. >> pawlenty snagged a huckabee. what is the story? >> sarah huckabee was instrumental in his 2008 campaign. tim pawlenty is trailing in iowa. he's trying to make that what is going to save his campaign. i think a lot of eggs are in that basket. i think he hopes mike huckabee's daughter is going to help.

it could result in huckabee's endorsement, himself. there's a transient policy. she knows a lot of reporters. she's going to spearhead it. she knows how to do that. the reality, between tim pawlenty and michele bachmann, they are going to duke it out. there's a big battle going on for who can latch on to the 2008 huckabee magic. >> put up the iowa poll. if you look at the percentages among the des moines register voters. top tiered cant. the poll was taken a couple weeks ago. what does he have to do to break into the upper echelon. >> he's got to break into the

threshold. where is he at, do you think in the straw poll? who looks good to you. michelle bachmann got in late. she's got tremendous fire and energy. >> i think you are right. michelle bachmann has steam going into it. there's an interesting post looking at tim pawlenty saying his old colleagues don't really recognize him in a sense, they don't think he's gotten his sea legs back or used to the national stage. it's different than the more beloved reputation he had in his home state. he's got to find what is going to appeal to the iowa voters. bachmann latched on to it. >> pat, tracing its origins, rumors about a possible replacement for vice president biden on the 2012 ticket.

where did it start and what are we talking about? >> it started in the new york post alluding to the fact that cuomo would replace biden. we have heard hillary clinton replacing biden. the reality is biden keeps on disproving doubts and exceeds expectations as more than a guy with a big grin. he's been instrumental in budget talks and foreign policy talks. he's a great campaigner, which barack obama is going to want. he wants biden on the ticket in 2012. >> appears in the new york post -- >> thanks so much. >> thank you patrick. >> coming up, a great finish at fenway. you have to see this. decided by a play at the plate.

did the umpire make the right call? the umpire says yes. the rest of the world says no. highlights when we come 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!

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32 past the hour. a live look at times square. a quick look at the news. a french writer formally filed a suit against dominique strauss-kahn. the woman claims he tried to rape her in 2003. attorneys are set to meet with the manhattan attorney today. they hope to have the assault case dismissed after the accu r accuser's credibility is kreed. the maid is suing the new york post for reporting she was a prostitute. the united nations is worried farmers will need to double the amount they produce.

food production must increase by up to 100% by 2050 and focus on greener methods. an expected population of 9 billion people. the u.n. goes on to say the food crisis of 2007 and 2008 had deep structural problems in the global food system. that's a look at the news. now, time for sports. tiger woods pulled out of the british open. he's been advised not to play because of an injured knee. tiger says he will return only when he is 100% ready. he's missed two majors and played only nine holes of golf since the masters in the april. he seems to be getting back into the endorsement arena, kind of, anyway. he scored his first deal with a

japanese company for a heat rub product. >> oh. >> heat rub. we now have the tv ad. >> oh. [ speaking foreign language ] >> i'd buy that heat rub. >> do you think he's doing it to his back? >> he had a friend do it. an old friend. no idea how much he's getting. it's a start. >> it's all right. >> part of a program. >> hi mike barnicle. i just saw your name on the schedule. >> yeah. nice to have you here with us. >> red sox, great game. hosted the blue jays.

john lester was strong early. striking out encarnacion early. he had to leave the game in the fifth because of a strained lat muscle. batista hits a home run. here is the play of the game. a two-out base hit in the ninth inning. boston up one run. this would have tied the game. encarnacion waved home. did he tag him? >> yes. he never touched the plate. >> what? >> he did not touch the plate. >> he did. boston -- they called him out. boston wins on a walk-off throw, 3-2. >> you bitter young person. >> here you go. watch the right foot.

>> i can't tell. >> right foot, right there. he blocked the plate. >> boom! >> all of you get real. you may not like it, casey anthony is not guilty and enk s encarnacion is out. >> derek jeter, an american hero, icon, leader of men. what a shot to third. a base hit. this one, he gets lumber on in the second. two runs scored. puts the yankees up, 3-0. jeter is four hits away from

3,000. he got two hits last night. granderson, two-run home run. he wasn't done there. in the fourth inning, a second home run. 25. yankees win big, 9-2. a game and a half up on the red sox. no further questions? >> we have a lot of injuries. >> so do we. the cardinals, albert pujols, six to eight weeks with a broken rib. last night, activated with the disabled list a month earlier than expected. the cards didn't need him. bottom of the first, matt holiday delivered the shot. the resurrection of lance. back-to-back home runs. 452 feet. >> oh, my. >> matt holiday does it again.

pujols expected to play tonight. a game and a half up on the pirates. >> above 500 for the first time in 15 years. >> they have to be happy. >> maybe the best new ballpark in the major leagues. go pittsburgh. >> he was out. >> out west, the pitching dual between justin verlander, this got weird. verlander looks into first. no tolerance from the home plate umpire. he runs them. what? he throws another pitch. doubles to right.

1-0, angels. look at this. third base umpire calls verlander to use a different ball because he wiped his mouth. leeland gets run out of the game. meanwhile, spectacular. nine strikeouts in the eighth verlander pulled out of the game. gives the ump a piece of his mind. everybody gets thrown out. angels win, 1-0. 100th career win. >> surprised you haven't tried to throw me out. >> you weren't supposed to be here. we are trying to be nice. >> make the wish thing. >> isn't that nice of us. give him the opportunity to live his dream. >> that's good. thank you. still ahead, mika's dad, dr.

brzezinski. >> up next, mika's must read opinion pages. [ man ] they said i couldn't win a fight.

but i did. they said i couldn't fight above my weight class. but i did. they said i couldn't get elected to congress. but i did. ♪ sometimes when we touch ha ha! millions of hits! [ male announcer ] flick, stack, and move between active apps seamlessly. only on the new hp touchpad with webos.

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i believe we need a balanced approach. we need to take on spending in domestic programs, in defense programs, in entitlement

programs and we need to take on spending in the tax code, spending on certain tax breaks and deductions for the wealthiest of americans. this will require both parties to get out of our comfort zones and both parties to agree on real compromise. >> okay. here we go. big meeting at the white house, pat. >> he's being very sweet now. >> i have a feeling it's going to be quite a fight there. we are going to start on our must reads with frank from new york magazine. everyone is talking about how he got here and what are the reasons behind our problems. obama arrives at his re-election campaign not merely with a weak performance on wall street -- one is the consequence of the other. the failure to pushback sparing any responsibility.

he is come across as favoring the financial elite over the stranded middle class, even if, in his heart of hearts he does not. steve rattner. >> anybody can perceive what they want. whatever was done with wall street has nothing to do with joblessness. they are two separate issues. it's a tough problem. the president has been doing what he can to protect them. >> is there anything to do with financial reform saying we created the situation we got into. we haven't moved the meter at all. >> the president can't wave his wand at all with congress in the way. dodd frank was the best. it's not a perfect bill. it's not even a great bill, in my opinion. no thanks to pat's friends and others who tried to block it. >> the financial industry made

out like bandits. they got bailed out. they are getting money at a low rate of interest and charging a higher rate of interest. i agree with steve on this. i don't see the connection between the two. i think the president tried on joblessness. the problem is, his policy's simply haven't worked in terms of dealing with the 9% unemployment. he's tried them in good faith. they have failed. >> i think it shows the limitations of policies being able to move. a lot of this is about productivity. the reason we saw it is businesses are able to gain revenue and capital doing it with your people. i think the larger idea of how to increase productivity. >> i think, in a way, both parties have failed. clearly the bush administration and what it did by the time you got to the end of the decade, fewer jobs than in the

beginning. the republicans did not succeed that well. >> well -- >> you want to say the president failed, you can say along the way he folded on taxes, too. >> how would raising taxes get more guys -- >> we'll go back to that. let's talk about the wall street journal. >> the editorial this morning, a debt limit break out where there's political self-interest there's a way. a reprieve of a month or two with spending cuts everyone agrees on. it gives them time to deal -- it makes everyone look bad. perhaps mr. obama wants a crack up. republicans should call his bluff and answer demands for fewer tax deductions in turn for

lower rates. >> if you want to trade off lower tax rates for the deductions, don't raise revenue. at the end of the day, you have to raise revenue. >> he was an incredibly thoughtful job. by partisan support from republican senators and included $4 trillion of deficit reduction. over $1 trillion comes from revenue increases. i don't understand why both parties can't embrace it, say it's great. it doesn't solve a problem but move on. >> the main problem a lot of people feel is we are not focusing on it right now. the main problem is enduring 9% unemployment and low growth 1.8% for the greatest economy in the world. no side is coming back. where is the program to get the economy moving and get these guys back to work to pay taxes and get going. when you tell me we are going to

raise taxes, it doesn't answer that question. how does the economy get going? >> there have been policies. in fairness -- >> they haven't worked! >> i don't think that's fare. >> i don't, either. there's been a lot of movement from what we see from the department of education. there's been more movement than we have seen in generations. it's targeted to the long-term improvement of the economy. in terms of the short-term solution, certain things have not been put in there. part of that has been a consequence of the economy. moat agree, what is needed now is a form of stimulus, a push from the government. with the economy where it is, it's off the table. >> look, if it's off the table, what is going to energize this economy to get back up off its butt and get moving and rolling and creating millions and

millions of jobs and people come back and say republicans are against tax increases. of course we are. we don't believe it will work. it will hurt. >> it's a small part of the package. what will do more to get the country back on track is for washington to get their act together, show there's leadership in washington and a path forward that is not going to end up in fisc ruin and give businesses confidence to hire teem. that's what's missing now. >> why don't they adopt bowles-simpson. they got close to adopting it. with all due respect to pat, the republicans dug their heels in on the revenue issue. in fairness, the democrats are not willing to take spending cuts. both parties are at fault here for not bellying up to the bar.

there's pain. get on with it. >> the president didn't embrace it, either. >> right. the president's plan was $2.4 trillion. he fell short. he said they had good ideas, but wouldn't embrace it. >> paul ryan had to stand-up first, put in a proposal and they trash him. >> it was fantasy. >> where is obama's budget? >> he has budget. 2$2.4 trillion -- >> is that with one with no support in the senate. >> ryan's plan was fantasy. >> that's fair. the republicans were all over the place with the ryan plan. you pounded him as demagogues. obama had nothing.

it's why he's sitting there two weeks before the end of the game trying to get a deal he isn't going to get. >> if the republicans walk out of the white house tomorrow not giving at all on revenue, don't you think it's going to hurt them? >> that is the point. >> come on. >> they have been doing it for six months. why wouldn't they do it two more weeks. >> before this is over, the republicans agree to revenue enhance. >> how much? >> a quarter? >> now, how much revenue. we're talking $40 trillion, or $500 trillion and you talk a quarter. tina brown will join us. more "morning joe" in a moment. ♪

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sxz mika, this is about as big as it gets. >> it is. >> tomorrow on "morning joe," we are going to get him out of bed,

larry david. >> oh, lordy. is he going to be in a bad mood? >> bad mood is an unfair way to put it. not a bad mood, cranky. you can see the enthusiasm here. he's going to be with us tomorrow. larry david, tooif tomorrow. we'll be right back. hey can i play with the toys ? sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with an endless automated system. you can talk to a real person 24/7. it's just the right thing to do.

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the first time the united states of america stands at the brink of defaulting on our financial obligations. unless we take action, the reputation will be released of our concerns. we no longer have months or weeks to avert this catastrophe. we have days. this week we have to beat the crisis. >> compromise has become a dirty word. now, the two ends of the spectrum don't want to see compromise. they voted for the savings. they voted for the things that put us in this deficit position. it's like they bought a new car and don't want to make payments. we will default on obligations. it's like people getting a social security check or military pay or the debt we have to pay. all those things.

we have serious consequences. people need to quit trying to win elections and start solving the problem. >> thank you. >> is compromise a dirty word, pat? >> no. republicans are going to increase debt ceiling and spending cuts. pat buchanan and mike barnicle with with us. tina brown, you have a good article in the dailey beast and what you think the president should do. >> he writes a good piece today. he says -- hijacking of our constitution to close a view. i wonter if it isn't what we need? he thinks it should be a watershed moment where he forces discussion. >> didn't he try that?

>> i think nixon tried that. president obama is now rejecting the latest calls for a short-term hike to the debt ceiling. he made an appearance yesterday. during the briefing, he invited leaders to meet with him thursday challenging them to reach an agreement. >> we need to come together to reach a deal that reduces the deficit and upholds the faith and credit of the united states government and the credit of the american people. it should not come down to the last second. it's important for us to show the american people and leaders we can find common ground. we know it's going to require tough decisions. it's better to take them sooner rather than later. it's my hope everybody will lead their ultimatums at the door and

do what's best for our economy and people. >> less than an hour after the president's comments, john boehner dismissed the talks. he said a deal won't happen if it includes tax increases. i'm happy to discuss the views at the white house. they are fruitless until there's economic and legislative reality. >> you described it a hostage situation. who is the hostage taker? >> the president of the united states can get an increase in the debt ceiling and will get one from the republican house. you will get cuts. what they are saying is we don't believe in tax increases. we don't think they will work. they are against us. be an adult. >> that eegs my answer. >> you are getting spending

cuts. you have to veto the increase in the debt ceiling and shut down the government yourself. >> what's accommodating about that? if the president accommodated them, they should accommodate him. >> spending cuts are going go away. maybe in defense, they will go along with spending cuts and compromise. they say this is the wrong way to go. we don't believe in it. mr. president, you are asking us to break our word. we are not going to do it, sir. >> the president has no credibility if he did not demand it. >> he's going to demand it. he ain't gonna get it. >> what was the answer to my question about who the hostage taker is in. >> sounds like pat is holding them hostage. >> i think they are standing on principle and doing what they think is right.

>> they are not serious on both sides. the country is verging on being ungovernable. these people think in two-year increments. not one of them has gone into a store saying one day only, sneakers $19.95. they buy them for $29.95 and say it's an increase. no, it's not an increase. before the bush tax cuts, it's not a tax increase. it's just not. they claim it is! it's not! >> if the sneakers are up from $19 to $29, it might be because the federal reserve tripled the money supply to all over the world where brazil says you are destroying our economy by

shedding these dollars out. >> you know what this is doing? it's building a barn fire. people are looking at these clowns in washington unable to meet half way on anything. larry david couldn't make this stuff up. get them out of there. >> i was four term limits and they had four term limits and they were tore out. i'm all for it. i'm all for it. >> my man. see, compromise. >> if that can happen? no. pat, it comes back to dozens and i'm not going to try to sound super liberal, but they have to give. you know they have to. >> you can defeat them. if i'm in a marginal district and i may lose, i told my folks

this is what i believe and i'm going to go vote that way. if you want to take me out in november, you take me out in november. i don't think so because i'm standing up. >> the country is better for it? they are not doing history because of it. >> wait for the bone fire, which is coming soon. >> you overestimate the steal and time of your man in the white house. he's always moved back and compromised. >> it's a fantasy in some ways. it would be great to see him take these strong traditions. >> i think in this instance, he is more than they are. >> you want him to bring the country down, veto the thing. i don't understand that. >> instead of bringing the country down, how about the president of the united states going on television and saying

listen, a lot of confusion about what this means about the debt ceiling. let me explain to you a, b and c, what happens -- what happens if the debt ceiling is not raised. a, b and c in plain english. it takes four minutes to do it. if it's allowed to happen, it's on the other guy. >> here is what obama does. he takes mike's four minutes, terrifies the country of what is dpoung to happen and the republicans send him an increase in the debt sealing and raise it. all hell is going to break loose. i'm vetoing it and we are not going to raise the debt ceiling. >> you can't terrify the country. they are too worried about today. >> how come the stock market soared 650 points if everybody

is terrified. >> i don't think the giants are terrified. >> wall street is not ter fied. >> people are putting $30 of gas into the car instead of filling up. >> people not traveling too far on vacation. >> i need a tax increase. >> no, we are not talking that. we are talking taxes on the well think t maybe. you are giving a lot. >> you are not answering the question. the whole country is going to go over a cliff. >> yeah. >> the republicans are going to say here are $1 trillion in tax, spending cuts. i agree to it. we are putting them on the debt ceiling. you said disaster is going to happen. we don't want that. you are telling me, barack

obama, down in the white house after telling us he's going to take it over the cliff? no, that's the hostage situation. >> oh, my lord. here we go. >> your point about the intractability, pat, not just raising taxes, but closing loopholes under john cornyn speaking yesterday, we are not going raise revenue through the front door or back door. >> let me be as clear as i know how. we are not for raising taxes through the front door or back door during an economic recovery. we think it would make unemployment worse. >> the back door meaning closing loopholes? >> why not tell the truth. we went to a war in iraq without paying for it. you can't do it. you can't have a tax cut, then wage war. millions of families in this country, they paid the price.

we have these weasels in washington saying we have to pay the bill. >> it's how it is. it's the sense that one crop is making out like bandits and people are just paying a terrible price. >> why is it one class -- and i agree 100%. why do all the guys on wall street get bailed out. why did all the wall street guys get bailed out? how could it happen in bom bom's washington. >> when did the bail out begin? >> under bush. >> george bush. >> i'm not a bush republican, mike. >> you're kidding? >> the senate is postponing a

vote on military operations in libya. president obama will face questions from twitter users all over the country today in a first-ever tweet home hall. the president is going to finish. >> come on. what's wrong with you. larry david is here tomorrow, mike barnicle. >> two crazy guys tomorrow. >> i think it's a great idea. he can't express himself on anything. >> i believe the questions are from twitter. >> good. i would love to see that. >> good point. >> you may not be the two best representatives of the social media. >> i tweeted last year.

. one more time, one more chance. the steve rattner challenge. >> yes. >> how do you make the math work and balance your book without new revenue. >> we have all this debt, no doubt about it. door for dloor futu-- that's wh we are spending 25% of gdp. it's going up. we used to spend 20% of gdp. the weight of government is entirely too large. it is sinking the american economy. it's not producing the jobs. >> you repealed the bush tax cuts, right? >> repealed them? we were down at 28%, mike. >> all right. coming up. a blow up. >> yeah. i have to tell you -- they love

the crisis. sorry. >> you know what a crisis is? no jobs. >> republicans are going to stand there. if we are a minority, we have political courage. coming up, doctor brzezinski will join the conversation. jim demint will be here to weigh in. nbc news chief white house correspondent chuck todd will be with us. bill karins has the forecast. a lot of people off for work it's vacation weather. the lake, the pool, the beach is the place to be. more humid up in new england and mid-atlant mid-atlantic. you are talking heat. think of big. in the desert, it's always hot. more 100 degree days in austin

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this recovery has been anemic. it is way underperformed. the president i think has deepened the downturn, made it last longer and what should have been a strong and robust recovery by now has not

occurred. you can try to blame george w. bush. we are three years later. we are in the third year of this president's four-year term. you can't keep blaming president bush. this is the obama economy. this president owns this economy. >> there we go. >> welcome back to "morning joe." joining us from washington, the host of ""the daily rundown," mr. chuck todd. we'll get to mitt romney in a minute. what was the idea inside the white house. we heard from him a week ago at the press conference in the east room where he had a hostile tone toward republicans. what was the strategy to put him out yesterday? >> the number one goal was to try to nip in the bud the idea of a short-term deal.

there was fear, not just among those in the white house, but those on the house republican side that the senate, both democratic leaders and republican leaders were warming up to a six to nine month solution of small amount of spending cuts. guess what? there are two groups of people that don't want that. one is the president and two are members of the house who don't want to do two votes on this before the next time they face voters. very easy for a bunch of senators who face voters to kick the can on this front. but the two folks sitting on the ballot in 2012, house republicans didn't want to do that. that was the number one goal. the second, you wanted to see an opening, the hint of that there's going to be a busy two weeks behind the scenes. whether we see the meetings or not is unclear.

there were some meetings over the weekend that included the president and some republicans on capitol hill. no one else will confirm who they were. you can figure it out. there's something going on that we are seeing from the process movement. >> the president comes out, let's have a meeting on thursday. work on a deal. less than an hour later, speaker john boehner says we are happy to come to the white house, but we will not talk about tax increases. where does the president or democrats go? how do you negotiate with a position like that? >> there's a little bit of a concern that nancy pelosi is included in the deals. some folks say, at the end of the day, it's about boehner, the president first, then after that, reid and mcconnell have to figure out where the votes are.

there's concern. is the meeting too big? are too many people involved? i think there's a good argument, it's possible you have window dressing on this thursday meeting that the real action is taking place in one-on-one meetings. you may need the number two in the house to find democratic votes. there's not 218 in the vote. you need eric cantor there. he's involved in the votes. that's the thinking as to why there are eight people showing up on thursday. in washington, the more people that show up, the less they get done, is the rule. >> chuck, your reference to speaker pelosi, within the white house, what do they figure is a bigger liability to get a deal done? the house republicans fear of the tea party or the democrats left tendency to follow speaker

pelosi and no cuts to social programs. the deal is in the republican house on frens. it's not that they feel pretty confident they can bring a majority of their house with them, if they have to. approval among democrats will be fine. they have more control, not the right word, but they have more of an ability to bring their base along to an unhappy deal right now the fear is john boehner does. look, mike, if they can cut this deal among the leaders, it would be done. it is the basis of the party that is concerned. >> chuck, that's what i want to ask you. we have been talking act the republican days, boehner and cantor. do you see boehner in the last analysis if there are revenue enhancements, increased taxes, do you see boehner leading slice

of the republican party into a compromised deal with the hoyer democrats to get a deal done or is boehners job on the line to such an extend that he just can't do that? >> tell me how many of the tea party kau sus walk. if it's 50, they can cut the deal. if it's 80, i don't know if he can cut the deal. it's the math i have heard in folks familiar with this. we are in a situation where you have mitch mcconnell and john boehner diverging in what they need for november, 2012. john boehner is trying to get reele reelected. mitch mcconnell is trying to get elected. if washington isn't gridlocked, it might not be good for republicans in the house. it's what you are seeing a

little bit here, too. keep an eye on that. boehner and mcconnell have been in wrong steps. you tell me how many walk. i think boehner can let 40 or 50 walk. if it's up to 80, i don't think he cuts the deal. >> it's a story. an interesting testimony. >> i think that the speaker's office would say the tea party is the energy here. that's who got us the majority. they deserve to have a large voice here. i think they might take issue with that, with putting it that way. that's been the balancing act for boehner the whole time. >> chuck, we all know that speaker boehner played golf with

president obama a couple weeks ago. does he play golf with eric cantor? what is that relationship like? >> everyone likes to speculate on that relationship. you know the office space where they work together, normally, the majority off sis is the big one. by picking where he picked, he gets to see everybody meeting with the speaker. there's a joke, cantor gets his peek at everybody coming in now. >> it's my face-to-face rit piece. who knows how much truth there is. you can make the argument that the number one and number two are co-mingled. hoyer and pelosi didn't sit so close. >> we'll talk a bit about the

republican side in 2012 and we have seen the iowa polls that show romney up there with bachmann. tim pawlenty around 6% and jon huntsman with the excitement of his launch, 2%. romney, sticking his economic message and letting the craziness go on around him. >> they have run a very good opening portion of their campaign except one part of it. i'm surprised at the money. it's under $20 million. while it lasts, it's fine in compareson. four years ago, he was less known. you wonder where is the establishment. there's still a pot of money sitting on the sidelines that

has gone to no one. maybe they are waiting for an alternative or say romney is figuring this out, he's on message, fine. all of a sudden, the second quarter number for romney is greater than the first. that could put away the race earlier than expected. that's the one part that surprises me. romney failed to ignite the money crowd around him and he's been flawless on message. >> the twitter town hall, we must clarify, the questions are twittered in. tweeted in. >> and the president doesn't type. >> it's not 140 characters. >> no hash tags. >> all right. what is the point behind it? a new way of reaching out and social networking. it hey, look at the shiny

object. there are going to be 140 people in the room. get it? 140 people in the room. >> that's good. twitter picks the questions. i don't think he's limited to 140 characters in his answer. you know, i'm curious how it's going to work. >> interesting. >> there you go. >> bumper sticker politics at their best. >> with the dodgers in chaos, what do you do sports wise, sir. >> willie, you'll appreciate this. hbo started a series of how the hitters got to 3,000. they have only done it for derek

jeter. wow. >> rode to 3,000 hits. catch it on hbo, coming up. >> who do you have at 9:00 eastern time? >> chairman of the rnc, rice is coming on. they have a new tv ad they are going to be putting on a cable channel near you. >> good to have you back. coming up, dr. brzezinski joins us here from washington. keep it on "morning joe," brewed by starbucks. [ grunts ]

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welcome back, 35 past the hour. former na eer naxal security ad dr. brzezinski. hi, dad, good morning. >> good morning. >> we have had disparity in pay and ceo salaries being up. bonuses are back. we are looking today at the political fight in washington, republicans saying they won't budge on any sort of tax revenue in any way.

if they win this, does that feed into the overall concern you have about the disparity you have in our society that's growing? >> absolutely. it seems to me, if america were really expanding economically, that kind of disparity is palettabl palettable. when you have stagnation and unemployment, the sense of social injustice is demoralizing and in the long run, dangerous. it can politicize social economic issues, create radicalism, class conflict and radicalism. so many of those who made so much money resently produce very little wealth for others. they pocket the money. they are engaged in operations but not enhancing productivity

and increasing employment. >> dr. brzezinski, it's willie geist. you talked about the civil unrest in the country. what, to you, is the tipping point? at what point do you see the kind of unrest you described? >> when the lower middle class begins to be more severely affected and begins to join the ranks of the unemployed and financially threatened. there has to be a significant section of society. right now, the problem is in the realm of social injustice and what is acceptable in a fair society. before too long, if there's a flip in numbers, then there's social political problems. >> dr., here we are. we live in a country where much of the country is exhausted from

fighting three wars. those wars are fought by less than 1% of the people in our country. you are sitting out there and hold a job that you are not sure will exist a year from now. your children are going to public schools. you know to be inferior to the schools the wealthy send your children to. you are thinking my kids have a death sentence on their future compared to the people across town living on top of the hill. governing us are two institutions, the house and senate, throw the presidency in here now, unable to get anything done at all. what do we do about the huge social dilemma we have that seems unsolvable? >> i don't want to be a profit of doom and i don't believe we are approaching doom, but we are going to slide into intensified social conflicts and hostility.

some form of radicalism. from the pure sense, this is not a just society. >> is the tea party -- is the tea party at the beginning of this, do you think? >> the tea party is a reflex reaction against that kind of sentiment. in any case, unintentionally, i think, it's a party that argues for the perpetuation of this injustice. >> venturing into politics a little bit. which party seems responsible for where we are now? can you pinpoint it and what should the president do? >> the president is trying to get a compromise. our system works only on the basis of compromise. it's persuasive. i hope he sees an opportunity

historically. the problem is deeper than that. the problem is that we have slid into a pattern of really drastic social inequality. i wonder if you all know, this country, the united states, the country of opportunity is now the greatest social disparity of any country in the world. worse than china. worse than brazil. the worst in terms of social inequality. it's a problem that can only be endured if we are successful. now, we are not. >> dr. brzezinski, you have a violence, if you will, in greece, where they impose, cut spending and raise taxes. they impose this on the greeks and they are close to overthrowing their government. this seems to be a chronic

condition almost to the west. they have real problems in california, which can't balance their budgets. is this a crisis of western civilization? >> you put your finger on something important. since world war ii, the three greatest source is progress, stability and success has been the united states. then, europe recovery, increasing and reuniting and becoming an attractive and important contributor to global growth and stability. third, last but not least, a democratic peaceful and international involved japan. it is interesting to know that right now, all three of these entities are facing serious crises. you mentioned europe. we know about the problems of

japan and we have been talking the united states. what is the implicit potential of that condition? serious international turmoil. that is a ris that can is down the pike. if we don't get our act together at home, we suffer do mesically. we may find ourselves in the world that is spinning out of control. i don't want to sound like i'm a dooms player, but these are the things we have to think about collectively and responsibility. i'm not sure we are. >> afghanistan. this is an economy 95% dependent on foreign aid and american investment. what do you feel about the plans now for -- all though we are coming out and sticking around longer. what is your view about how that is going to impact all this? >> which, specifically? >> afghanistan. >> oh, afghanistan. i think we are trying to

disengage. that is a sensible policy. i don't think we should proclaim to stay there and win and create a modern afghanistan, i think that has been abandoned. >> i don't think we should pack our bags and just leave. the president is striving at a departure. reinforced by an international umbrella that is yet to be shaped, a kind of regional consensus and in effect, create a situation with the problem of afghanistan, which is also the problem of pakistan, becomes a regional problem in which the country's in the region have a stake in solving and are not -- there's a reasonable chance that can be pulled off. >> dr. brzezinski, you mentioned

pakistan. the focus of policy leaders. turning away from afghanistan, we got reports the journalist who was killed by the isi inside pakistan further out is complicating our relationship with that group. we announced going in to kill osama bin laden. how do we manage this relationship that's been difficult to manage for as far as the eye can see? >> well, first of all, we have to recognize we are dealing here with two sifrl conflicts. one in afghanistan and the one in pakistan. there's a conflict in pakistan. there isn't a foreign intervention trying to resolve it. it is a great internal conflict. what we are seeing in pakistan is a series of contradictory

policies, contradictory engagements and contradictory engagements. the army wants to preserve a stable pakistan that is assured of security and sees the united states as a component of the success in that quest. the military is defective. intelligence service seems to be torn and of course in the country at large, strong fundment list tendencies. it's not a single entity. it's fragmented. we have no choice until we are out of afghanistan to cooperate as much as we can with those pakistanis who see their interest in our success. >> back to the topic of the increasing class and income, we know it's there. you mentioned it's wider now than in country's like china.

what do we think about ourselves given the fact people are lining up at the door to live in the united states of america. a lot of people want to live in china. >> there are two groups of people who want to come here. the first are the educated and the ones with special knowledge, special competence. they have seen america, a country in which they, with the quality indications can be individual successes. then there's the second large group of people who come here willing to do the kind of work most americans are not willing to do. these are the major sources of immigration to america today. it's not the way it was in the early 20th senture wii are huge waves of people coming here. no, i -- we are cutting

ourselves off from the first category. >> i think the trouble is, we need the immigrants to stimulate the innovation. so much of america has been created by this. >> people like you and people like me. >> dad, thanks very much. good to have you back on the show. see you soon. >> thanks. good to be with you. >> coming up, we're joined by republican senator jim demint. up next, we don't have his picture or full name, but details about the cia master mind who tracked down osama bin laden after a decade long pursuit. that is next. ♪

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quick look at some other headlines. a pakistani commission is barring osama bin laden's family from leaving the country until an investigation concludes. his three wives and children have been detained since the may raid. the family members must stay in pakistan on orders from the country's intelligence agency. it comes as the u.s. government reveals new information about the cia analyst that helped hunt and find osama bin laden. john as he is called is standing outside of the frame to protect his identity. he's the man for almost a decade gathered every piece of information on bin laden, following all leads before persuading leon panetta and president obama that he had found the terror head in the

military town of pakistan. little is being released about john. he joined the cia counterterrorism unit in 2003 after the group's failed attempt to locate bin laden. he was promoted and charged with finding the al qaeda leader. previously a member of the balkan and russian department, john made his mark in the agency forming its most accurate profile of vladimir putin. fascinating. incredible work. more "morning joe" in just a minute.

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. >> i've asked leaders of both parties and both houses of congress to come here to the white house on thursday so we can build on the work that's already been done and drive towards a final agreement. it's my hope that everybody will leave their ultimatums at the door, will leave the political rhetoric at the door and that we'll do what's best for our economy and do what's best for our people. it's 8:00 on the east coast. this wednesday morning as we take a live look at manhattan. back with us on set, steve rattner, pat buchanan and russ more. big news over the deficit. president obama is rejecting calls for short term hike to the

debt ceiling making a rare appearance in the briefing room yesterday, the president invited leaders from both parties and chambers to meet with him on thursday at the white house challenging them to seize the moment and cut a deal. >> i don't think the american people here sent us here to avoid tough problems. it's, in fact, what drives them nuts about washington. when both parties simply take the path of least resistance. i don't want to do that here. i believe that right now we've got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future. all right. sounds good. sounds hopeful, right? it does. it sounds like maybe something will get done. like maybe everyone will come in. except less than an hour after

the president's invitation, john boehner dismissed it said a deal won't pass in the house init includes tax increases. boehner said i'm happy to discuss these issues at the white house but such discussions will be fruitless until the president recognizes economic and legislative reality. that doesn't leave a lot of doors open, does it, pat? >> the president changed his tune. we didn't hear about corporate jets and millionaires and billionaires and oil companies. he did the right thing. it's late for the president and, mika, they have to drop the taxes off the table unless they are talking about dropping rates in return for deduction. they won't get it. no sense talking about it. i think they can get a short the army deal. my guess is we're beyond the point where we can get a long term deal. >> the flip side is true they won't get a deal from the democrats without something on tax and revenue side. call it whatever you want.

you can address this budget problem only on the spending side. the numbers don't work approximately. >> i'll tell you i don't think they will get anything on the tax side and i bet you they will get something on the spending side. the reason back barack obama is staring down the gun barrel at default. >> the american people, the couldn't is staring down the gun barrel of default. if you look at the polls, the polls you had on the other day, the public blames the republicans and congress more for this rob than they do the president. >> take a look at john boehner he can't go home again if he signs on to taxes. he's dead if he signs on to higher taxes. >> i do think people need to be cautious on overstretching this. we have a situation where historically spending has been atro u7b%. it's now 25%. revenues used to be at 18%, now they are at 15%. this is the maximum point of leverage for republicans. but at the same time if a deal is not done, if at the end of

the day we start having these kind of effects in the economy, and the president and you have a blue collar worker who is a medicare recipient who says the president was willing to give on medicare and medicaid but because of the tax issue the deal didn't get done that will backfire on the republicans politically. >> the president of the united states runs the american economy. if this thing goes into a recession or depression, boehner isn't hoover, obama is hoover. >> steve, i want to ask you about this semantic argument between tax increases and revenue raisers. eric cantor talking about loopholes. his office put out a statement saying house republicans aren't objecting to this loophole or that, we oppose raising taxes on families and small businesses at a time when we should be focused on growth and job creation. >> there won't be an increase in tax rays. nobody is talking about that and a good for reason for it.

what they are talking about are what are called revenue enhancers. the $6 billion we send into ethanol, things like that. there's a consensus in cutting that stuff. that stuff is limited. biden talks identified trillion dollars worth of use that would be acceptable. you won get to the numbers that you need to without more dramatic use. >> let's do what president clinton said and "wall street journal" agrees with. bill clinton said 35% of corporate income tax rate it's second highest in the western world. drop the rates of corporate rate down at the same time we get rid of these loopholes. you can get a republican deal on that. a short term deal on that. but if you go for straight increase for revenue -- >> you won't get any revenue from that. >> we have senator john cornyn not leaving any hoop holes.

he says republicans won't agree to raising taxes the. >> let me be just as clear as i know how. we're not for raising taxes through the front door or through the back door during a fragile economic recovery because we think that would make unemployment worse. so that's really the bottom line as far as we're concerned. >> the senator's language the back door is closing these loopholes. >> he's closing the back door as well. i don't believe we can get a substantive budget deal anything more than marginal trims around the edges. whatever you want to call it. wherever you want it to come from i don't think you'll get the democratic support. >> aside from changing their promises, pat, just put aside their constituents any other reason why the republicans can't give in some way, shape or form on taxes?

>> philosophically, they think it's the wrong which to go. i think it's the wrong way to do. you don't do it because somebody says wouldn't it be nice if we gave something. will it help create jobs to hammer a lear jet. i don't think so. >> own on the principle issue, when you look at the fact that the u.s. is taking in the lowest percentage of tax revenues in the past 60 years. >> why is that? you know why? we got an economy of 9% unemployment. at 5% unemployment that revenue will go up to 80%. >> we also have tax rays lower than we can afford. starting from 2000 we cut taxes and raised spending and that's a large part of why we're in this building. with respect to the recession i agree. we don't want to shrink the deficit. frankly we're in no danger of doing that. that's the least of our problems

at the moment. let's have them phase it in at two years, three years. let's get past this recession. you cannot address this budget deficit without more revenues. it's not possible. >> i'm inclined to frankly -- you're going to have to do it because you ain't going to get these revenue increases out of john boehner's house. there's a political reality and based on the fact that republican parties have made a commitment. they believe in principle. they believe philosophically it's wrong and suicide to do it. why do it for a president of the united states who has been accused of behaving worse than sasha and malia. >> but it's suicidal not to have a deal done. >> the default -- did you read the "wall street journal" the other day? >> i didn't. >> here's what it says. the fed, obama is understating the fed interest rate.

he's overstating the growth. 9 trillion more. we're heading down the road of default because of what we've done. >> part of what we've done is cut taxes while we increased spending under the bush administration and you cannot do that. >> let me ask you this. >> my more than you could in your household. >> let me tell you, more than half the country, 51% pays zero income taxes on their wages and salaries. >> that's not true. >> that's not true? >> you said that yesterday. i looked up the numbers. it was true in 2009 because it was a recession. >> now down to 49? >> in a typical year 40% of americans don't pay taxes. however, peoe with incomes of $40,000 or less they all pay social security taxes of 10%, and the bottom half of that 40%, the lowest 20% of this country you know what their average family income is?

>> lowest 10%? >> 20%. >> i would say it's under 20,000. >> about $20,000. so those people who make $20,000 which is the poverty line, you want them to pay more taxes than the social security taxes and the state sales tax. >> i think everybody in a country like this, a democratic republic, everybody pays something. everybody pays taxes, every man should also be willing to fight in the military as wes did and every man should vote. >> let them pay a dollar of taxes. that won't solve our problem. >> but the point is you're not going to solve your problems by the president of united states getting up there and saying we got to have more tax revenue when they have told him we can't get this through the house. deal with it. >> if we simply repeal the bush tax cuts it would raise $4 trillion over the next ten years. >> let me ask you this.

there's a lot of talk here. what your going to do if two weeks from now the republicans say we'll not do any new tax increases. >> if the republicans want to play gutsy politics they can play it. the president stares them down. >> they can't go home either. i could be wrong. longer track record in this business than me, pat. >> they can't go home. obama will fold. who is talk about jones. town yesterday? who is using the language and rhetoric? who is talk about republican extremism. it sounds like a losing man. >> obama can't fold. >> he'll fold. >> he can't fold and have a serious budget deal. no way. >> he'll have a short term deal. >> at the end of the day the deal doesn't get done the blame will go to obama. >> you want to put some money on that, wes? >> you have more than i do. you bring up an issue about this idea of shared sacrifice. we've been at a point in the

past decade, only time in american history we're not engaged but one but three warriors and we've given tax cuts. so this idea of shared sacrifice is something very real for the american people. we're sending off -- we're adding revenues in terms of what we're spending. this year alone we're spending $120 billion in afghanistan. we got 47,000 troops still in iraq. we still have tax cuts in play. >> what you're talk about, united states is strategically overextended worldwide. what are we doing brothering money from japan to defend japan. borrowing money from europe to defend europe. this country is overextended. it's an empire -- the empire is coming down. >> the country is overextended. you can't do a lyndon johnson. you can't start fighting wars and not raise revenues to pay for them. >> you're not going to get the

revenue so you should end the war. >> we'll do a little bit of everything. one plan or what? >> both sides in you broad the rockies. walk us quickly what's inside deficit reduction plans on each side. >> fair enough. bowles-you simpson set the standard. they came out with $4 trillion of deficit reduction over the next ten years. the paul ryan plan that you remember got to about the same amount of deficit reduction, $4 trillion. the obama plan is $2.5 trillion of deficit reduction and now what i call the biden talks they are at zero they have talked about a trillion dollars of spending use. they are a long way from the number that we've seen from others. even if the bowles-simpson plan were adopted we would have $6 trillion more debt than we have now. let's look quickly at where the cuts come from.

bowles-. simpson would cut spending. ryan would cut taxes by 4.6 trillion. obama 1.7 trillion. biden at maybe a trillion. if you look at revenue increase, bowlesh simpson had 1.2 billion revenue enmeant. obama had 750 billion of tax increase an bid inis at zero for all the reasons we've been debating. very quickly lastly if you look at where is the deficit reduction coming from, under bowles-simpson, 30%. ryan is minus 15. biden is at zero. the president is playing the game from his 30-yard line. the most he'll get the this 30%

number. right now it's zero. >> the bowles-simpson still doesn't hack into it. >> you have 6 trillion more debt, higher gdp ratio. it balances revenues with spending. gets rid of a large of loopholes and garbage. >> if lawrence lindsay is right, deficits would be far higher than that. >> what does that tell you? >> it tells us -- it doesn't tell you not to do this. you have to do more. >> it tells you you got to raise taxes. done tell me that. >> i don't know what it tells you. >> tells me to keep cutting. how long is the 25% of gdp the feds are spending and about the 15 state and local are spending, 40% of gdp used to be called socialism when we were kids. >> you know what's fascinating?

it's not even about the leverage for be the republicans but this is not about going forward. will we bay for our obligations. are we going to pay for what we spent. up next we'll talk to senator jim demint from south carolina on his new book, takes us inside tea party politics and what he says is the most misunderstood fact about the movement. first bill karins has a check on forecast. >> phoenix had a weather phenomenon. it's a haboob, a huge dust storm. this is it, about a mile high. it was rolling in at about 50 to 60 mile-per-hour winds. visibility dropped to zero. a lot of people lost power. there's dust covering everything in the valley near phoenix. pretty cool. back here in the east we're looking nice and warm.

80 in washington, d.c. it's a toasty day. little bit humid. today we'll call for highs anywhere between 90 and 95 in the i-95 corridor. few storms late today but most people will remain dry. better chance of thunderstorms in the southeast and look how hot it is once again another triple-digit debut in dallas. yesterday it was 104 in oklahoma city. you'll do it again today. still a chance for storms from denver up to montana. west coast you're look at a very beautiful day. you're watching "morning joe". we're brewed by starbucks. [ man ] they said i couldn't win a fight.

but i did. they said i couldn't fight above my weight class. but i did. they said i couldn't get elected to congress. but i did. ♪ sometimes when we touch ha ha! millions of hits!

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>> i believe we need a balanced approach. we need to take on spending in domestic programs. in defense programs. in entitlement programs. and we need to take on spending in the tax code. spending on certain tax breaks and deductions for the wealthiest of americans. this will require both parties to get out of our comfort zones, and both parties to agree on real compromise. >> all right. 22 the hour. joining us now republican senator from south carolina, senator jim demint. senator demint is out now with a new book, "the great american awakening" two years that changed washington and me. we'll talk about the book in just a moment. i can't wait to hear about it. but what's going to happen? what side will walk away from this meeting in the white house tomorrow with no resolution, and

neither side giving in on their comfort zone a little bit as the president put it. >> i don't think we'll have any resolution. we've known this for six months. there has not been one debate on the senate or house floor on how to fix it. i know how things work and the president put biden in charge of a task force to burn up the clock because they believe it's all about creating a crisis and then we have to do something urgently and we won't do what needs to be done. the president said we need a balanced approach. what we need is to agree that the states should decide should we have a balanced budget. if we don't stop spending more than we're bringing in none of the rest of this makes any difference. >> aren't we at a point in time in our history in this country we're actually literally everything must be done. everything must be done to accomplish what you, a republican, would want which is a balanced budget, a reduction in the deficit. why then wouldn't it mean maybe stepping out of your comfort zone in terms of your philosophy, in terms of revenue

enhancers. certainly the white house and democrats have done that. >> they put taxes back on the table so they can give something up. for the last five years we had record levels of revenue. next year we projected the highest revenue levels in history. we don't have a revenue problem. revenues have gone up in the last eight years. but spending has gone up 60%. we've seen in history you can raise rates all you want and you might get a little bump in revenue but long term it will stay the same. the only w to get more revenue is to get the economy going again. more tacks work in the opposite direction. republicans want revenues but we just understand history as an increasing taxes on job producers is not going to give us more revenues. >> closing loopholes and other issues? >> what about that, closing loopholes or taking away subsidies from a company like exxonmobil that made $11 billion

in the first quarter. >> we created a whole set of business deductions that all companies take. republicans including myself have introduced legislation for years that would just lower traits, eliminate all the loopholes and you can do that for personal taxes and business taxes. but democrats have never supported a flat rate with no loopholes because they want their loopholes they just want to pick on big oil and raising taxes on big oil is just going raise gas prices at a time they are already high. they will pass along taxes. i guess the bottom line to all of this is you can do everything they are talking about as far as tax increases, the revenue they are projecting from that is so small it doesn't even put a dent in what we need to do. so what we need to do before we argue about taxes and cuts is agree let's let the states decide do we feed to have a balanced budget. six, eight, ten years out we can have a balanced budget. >> whatever you want to call it,

we have this crisis, due date coming up in august, passing a constitutional amendment that takes years. >> all we have to do is pass it and send to it the states. >> doesn't it take years to play out? >> it would take years but part of what we've asked to do is let's have some short term use, caps on spending over the next ten years that will guide us towards a balanced budget and by that time we'll find out if the states ratify it. >> isn't it another way of kicking the can down the term. >> the we've got a pledge and a commitment to the country right now to cut this year, to cap spending on the years going out and to let the states decide whether or not to balance the budget. that would take effect probably six or eight years out. but the cuts we're asking for right now are not draconian. the caps would turn this down towards a balanced budget. then we can argue about revenue increases, we can argue about

the cut. i think republicans are willing to look at the cuts at the pentagon, look at waste. we don't have any problems with putting everything on the table but we've got to agree that we need to stop spending more than we're bringing in. >> can a mormon win the south carolina primary? >> here we go. here we go. >> i think so. i endorse mitt romney the last time. >> are your going to endorse him this time. >> the religion is not an issue. but i think what americans are looking for right now is someone with principle but with courage. that's why you see some of these governors like chris christie or scott walk near spirg the country because they are willing to tell the truth and do what's necessary to save their states. americans need a president right now that's going to tell them the truth and to make those hard decisions to save our country. >> you think mitt romney would do that if he were president of the united states? >> he could. i'm keeping an open mine. i'm not endorsing anyone right

now because i want to know what they do on the debt limit. just about everybody signed our commitment to america. to me that's where the action is. >> did governor romney sign that? >> yes. he our did. >> when you say they signed the commitment to america, the implication in some people's minds the republicans have a commitment to america and the democrats don't? >> well, i have not seen any commitment from the democrats to cut spending. we saw this c.r. debate of a couple of months ago. we ended up with almost no cuts. the president proposed 10 trillion in additional debt over his budget cycle of 10 years. they are not serious about cutting spending. >> did you ever hagel with an auto dealer over the price avenue car. >> every time. i love it. it's sport. >> why don't you do the same sport in the senate? >> we do. we can debate what to cut, how much to cut, when to cut it. we can't argue about whether or not we have to balance our budget.

because we're going bankrupt our country if we keep spending. >> if the alternative to -- the alternative to raising taxes is the country goes into a default and they say, look, it's going into a default unless you guys give us something. would you then resist any increase in revenues? >> first of all we won't default. we may have to cut government programs. but we'll pay our debt as they come due. over 70% of our total expenses come in from tax revenue. if we never raised the debt ceiling we have to go back to 2003 spending levels. we'll pay our debt. it's irresponsible for secretary geithner to suggest we won't. it will be disruptive. i'm not pretending it wouldn't. you would have to begin to cut things that we don't want to cut. >> have you seen this argument where under the 14th amendment the president has got an

obligation to see the debts are paid. if you don't raise the debt ceiling he can go ahead and agent on his executive authority and do it. >> he needs to pay the debts. that's something we've tried to pass in the senate is a full faith and credit bill. >> suppose you don't pass it. >> if we don't pass it we still have to pay our debts. we don't have to keep spending money on the stimulus program and all these other things. but the debt should be the priority because as the constitution says we're obligated to pay it and the president must pay it. >> you used the word irresponsible to describe secretary geithner and you just used several times the word priority. do you think it was irresponsible for those people in the senate and the house to vote to go to war with iraq without a trigger mechanism, to pun intended, to pay for that war, reducing taxes, going war? do you think that's irresponsible? >> i have to agree we needed to have a contingency on how to pay

for that. we have to do that with everything. there were decisions i made ten years ago that are different now. i voted for things ten years ago that we can't on forward today. i'm a recovering earmarker. we're 14 trillion in debt. we're at a different place in time and the priority has got to be to keep our country from going into bankruptcy. this idea and the president agreed last december we have to take tax increases off the table in a down economy. he agreed. the only reason they are bringing it back now is so they can appear to be compromising. >> you think in the end they will say okay we can't get tax revenue let's go with the budget cuts and debt ceiling. >> what they will say is okay we'll give up the tax increase but you give up these cuts and give us an increase in the debt limit with nominal use and everybody should be happy. it's not about what we want or what the president wants it's

really about national snifl now and that's why what the great american awakening is about. people are understanding this debt will kill our country and when they got active it changed things inside of congress and that's what i was writing about because i want to recruit more people, if they get active we can change the way congress works. >> you also write in the book, senator, talking about the tea party, first of all, how isolated you said you felt before the tea party movement. i imagine you're eating alone in the senate cafeteria. very sad. but also you make the argument that the tea party is not a republican movement. >> yeah. >> you say it's an american movement. most people associate the tea party with republicans. >> not at all. they don't like republicans, democrats. they are mostly just a combination of really a diverse group of americans, republicans, democrats, independents, a lot of people who have never been involved in politics before.

they want less from government. they are conservative. what unites them is this idea of stopping this reckless spending and in debt. so you may have some social conservativis conservatives and democrats. >> it's mostly republicans? >> i think the republican is probably the only place they have to go right now stars elections. but if republicans fail to keep their promises i think you're going to see third parties all around this country because people will not put up with wobbly knees again here in washington. >> senator, if it's not protesting about barack obama, the tea party movement why didn't we hear more from them during the george bush administration. >> the republicans have been booed and were voted out of office last time because of supporting t.a.r.p. and other spending programs and my senator conservative fund that i started people gave, every time we endorsed somebody like pat toomey versus arlen specter they

gave to pat toomey. same with rubio against charlie crist. so, we're fighting for, i guess, some new foundations in the republican party or a return to them, but what i want people to know is if they get engaged they can change washington. we did. it was isolating for me but when i went out across the country people said keep fighting. >> senator mark rubio wrote the forward to the book. senator demint thank you very much. you know the debt ceiling debate is pretty big. you might need to stay around because we have an even bigger debate. was it safe or he was out. a great finish last night at fenway but was it the right call? we'll debate that plus business before the bell with tyler mathison. we'll be right back. [ female announcer ] now you can apply sunblock

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joe". mike will defend the indefensible. >> get over it. >> we start with the division

leaders. never start with the second place. new york yankees cleveland indians, derek jeter. a young man who children every where can look up. leads off with a shock down the third-base line. >> that's a base hit. >> a base hit. okay. now he needs five for 2,000. 3,000, excuse me. a double here. needs four for 4,000. derek jeter will be at 3,000 career hits. gives the yankees a three run lead. the granderson, two-run home run. did it again in the fourth. second home run. he has 25 home runs. >> good for him. >> before the all-star break. yankees went big 9-2. fenway the red sox hosting the bluejays. cheating. no other way to put it. >> bitter young man. >> john lester looked good early. no-hitter through four. pretty good. he threat game before the fifth

inning because a strained muscle. red sox up 3-0. batista hits his league leading 20th homer. 3-2 top of the ninth, two outs, red sox lead, play at the plate. mcdonnell comes up. look at that play by the captain. the problem is it wasn't a forced play. >> he never touched the right foot of the bluejays, gets in clearly. he is out. >> there's the right foot. >> he didn't touch the plate. get over it. >> red sox win on a walk off throw, 3-2. can we see it one more time? >> don't have the right angle. >> here it is. >> where? >> right there. >> no. >> after he's tagged. >> after he's tagged. >> walking back to the dugout. >> here's the right foot.

>> he's already tagged. >> boston propaganda. >> that must have been amaze took there. >> you two guys, cut it out. he's out! . >> look at the foot, mike. >> he was tagged. he's been tagged. >> all right. whatever you need to tell yourself. there it is. foot is in. >> i'll ask tyler. he knows things. let's get a check on business. cnbc's tyler mathison live at the new york stock exchange. what your saying? >> he's safe and dow is going to 30,000 tomorrow. >> tyler i hope that market crashes big time. >> wow. >> this is getting ugly. >> i think the right foot was in. i didn't see the tag. >> exactly. >> let's call in jack welch and ask him. >> tyler, what else? what have you got? >> you guys have been talking about the debt limit debate and

the president's summit on that tomorrow. i think one of the things that's interesting to point out is that at least so far the stock market doesn't seem to be reacting to this debate. but remember back in 2008 when congress was debating the first part of t.a.r.p.. everyone assumed congress would do the right thing and pass t.a.r.p.. whether you agree whether t.a.r.p. was the right thing or is not material right now. everybody had that built in and so did the market. as we watched that vote take place, and it was clearer and clearer that t.a.r.p. was not going to pass, the stock market did this and it did it fast. so, if there appears -- i think the assumption has been that one way or another we're going to not run off the rails here and that the debt limit will be increased. but if things evolve to a way that make people believe that it's not going to get solved watch out for a major selloff in the market on any given day here over the next couple of weeks.

>> tyler, do you think august 2nd deadline is real? we had senator jim demint suggesting it's an artificial date and a date put out by the treasury secretary. what happens if we hit august 2nd without a deal? >> the bond market will tell us, presuming that really is a drop dead kind of date. the bond market is going tell us all kinds of bad things and probably going tell us that well before august 2nd if there's no evidence of some sort of solution and compromise here. one of the thing that was interesting -- so, really on the merits of it i assume the government will have to find a way to pay its bills one way or another but the credit agencies and the bond market will exact a major price if we don't reach some solution before august 2nd. one of the thing that was interesting in today's "wall street journal" editorial was perhaps the outlines of a solution. under which the editorial

writers at the "wall street journal" which sometimes i agree and often don't, here they may have it right and that is the idea that a solution may lie on the republican side in going along with some of the revenue enhancements that are aimed at closing big business tax loopholes in exchange for a reduction in the overall tax rate on corporations from 35% to 25%. read that editorial. it's interesting. maybe there in lies part of the solution. >> up next the oil spill year yellowstone national park. larger than originally fear. we'll have the latest when we come back.

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federal documents now show it took exxonmobil nearly twice as long as it publicly disclosed to fully seal the pipeline that caused an oil smile in the yellow stone river. details about the response comes as the department of transportation issues an order directing the company to bury the duct deeper beneath the river bed in order to protect it from even more damage. surging floodwaters hinds terrifying latest efforts to contain and find the cause of friday's spill. waterway is now above flood stage, stoking fears that currents could push crude into vital areas home to the river's prized fisheries. exxonmobil says the spill extends 25 miles downstream near billings and lurl, montana. george lewis reports on the recovery. >> reporter: exxonmobil expanded its cleanup effort putting more people in the field. there are 360 workers assigned to the spill as the giant oil company tries to figure out what went wrong with its pipeline.

>> i can't speculate on what caused this. it was a very big surprise to us. >> reporter: the roaring floodwaters have sent a lot of trees like this big cottonwood crashing into the river. one theory is soil eroded. montana governor toured the spill area observing the cleanup and promission landowners that he'll keep after exxonmobil to get rid of the oil. >> this clean up is done when the state of montana sauce it's done nobody else. i promise you this. i'll personally be on this until smell on skunk until it's done. >> got a mile of river frontage. >> reporter: bob showed us his flooded home. his land wreaking of crude oil. >> it was a dream home. we wanted to stay here forever. >> reporter: the house will be torn down. they will have to rebuild on

higher ground. the oil stain is the high watermark from the flooding. bob said he was shocked the night he first looked out at the smelly water surrounding his house. >> i shined the spotlight. that river was black with crude oil. >> reporter: despite promises by the governor and exxonmobil to get the spill cleaned up no one knows how long that will take. >> nbc's george lewis reporting for us. congressman ed markey is calling for hearings to investigate the spill and to look once again at the bigger picture of oil pipeline safety. we'll be back with more "morning joe".

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help stop the damage before it stops you by asking your rheumatologist about humira. for many adult patients with moderate to severe rheumatoid arthritis humira has been proven to help relieve pain and stop joint damage. humira's use in patients with ra has been evaluated in multiple studies during the past 14 years. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events can occur

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okay. time now to talk about what we learn. willie geist? >> i learned there was a crime perpetrated at fenway park. >> okay you two. >> roll the tape. the right foot is in. >> stop it. >> i'm a big blue jays fan. i love the jays. foot is in. no tag. there it is. >> mike, what did you learn today? >> learned that there's no end to this young man's bitterness. >> look at that face. it's very entitled too.

look at that smirk. did you learn anything else? >> no. okay. >> pat buchanan what did you learn? >> road to the pennant for the boston red sox rests with the umpires. there's no tag, mike. >> you've been watching the washington nationals. never touches him. >> got pat on my side. you're in trouble now. >> he was tagged prior to that shot. this is like the 1990 red sox game. he's out! >> let me ask the guys in the room. besides you, is he in or out? in or out? safe. >> doesn't matter. it's in the books. >> look it up in the books. red sox win. >> i do love the red sox. >> and jeter. great guy. >> it's "morning joe". we'll see you back