at 5:43 p.m. washington time, the president concluded yet another meeting with the congressional leadership with no resolution of the problem at hand. the eric cantor problem. >> we're not going to raise the debt ceiling if we don't have cuts. >> eric cantor is now the man to blame for bringing us to the brink of economic catastrophe. >> are you the reason why there will not be an extension in the next few days? >> this is not a game. >> we don't want to raise taxes. >> he's not going to back down. >> let's play global thermonuclear war. >> no sign he's really willing to negotiate. >> now is not the time to play games. >> the clock is ticking. >> nevertheless, the clock is ticking. >> hurtling towards a huge financial calamity. >> dire consequences. >> that is a bad scenario. >> gloom and doom scenario.

>> some are now asking if cantor is hurting the debt talks. >> it was childish. >> called him childish. >> once wrote in his high school year book, quote, i want what i want when i want it. >> quote, he's all about eric. >> boehner and mcconnell are trying to lead a party that doesn't even understand the problem. >> even speaker boehner and minority leader mcconnell seem to understand -- >> we have been in this fight together. >> i think mitch mcconnell frankly has lost his mind. >> i think that we have plenty of money to service our debt. >> all those people are lying and you've got the truth? >> it's so horrible, there's no way they could be so stupid. >> now is not the time to retreat. it's the time to reload. >> and don't expect anything better from the republican presidential candidates. >> the balanced budget amendment. and that is the answer. >> you don't care if we get downgraded? >> we won't. >> michele bachmann as far as i can tell just hasn't done the math.

>> that is how you earn the title balloonhead. >> the president doesn't want to be confronted with priorities in spending because he has a lot of chutzpah. >> wow. >> the new show talking about federal budget negotiations, just cheap salacious viewer bait. >> good evening from new york. breaking news, president obama will hold a news conference from the brady briefing room at 11:00 a.m. tomorrow, his second news conference in five days. the president met with democrat and republican leadership for a little over an hour today to continue to find a way to avert the worldwide economic catastrophe that is looming on august 2nd if the president and congress have not agreed on a way to increase the debt limit of the united states government. before the meeting today, there was a flood of criticism of eric cantor's performance throughout these discussions and including yesterday's meeting. >> house majority leader eric cantor has shown he shouldn't even be at the table.

and republicans agree he shouldn't be at the table. one republican told politico last night, the hill publication, quote, he lost a lot of credibility when he walked away from the table. it was childish. end of quote. and he walked out on the meetings, with the vice president of the united states. it was childish. another republican said cantor is putting himself first. he said this. quote, he's all about eric. end of quote. >> cantor, who caused trouble for john boehner, led a rebellion against john boehner, when the speaker returned from the negotiations with the white house over the july 4 weekend with a package of tax revenue increases that boehner was willing to consider. today, cantor desperately tried to tie himself to boehner in an attempt to restore some shred of credibility. >> the speaker and i have consistently been on the same page.

and leader reid is i imagine frustrated as we all are, and the fact is we are going to abide by our principles. and that's how it is. and i'm sure the speaker joins me in that. >> so what does boehner do when the guy who tried to stab him in the back reaches out for his help? boehner did what all smart politicians do. you especially do it with a colleague who has tried to stab you in the back in the past. boehner publicly stepped up. >> that's how it is. i'm sure the speaker joins me in that. >> let me just say we have been in this fight together. and any suggestion that the role that eric has played in this meeting has been anything but helpful is just wrong. listen, we're in the fox hole. and i'm going to tell you what. this is not easy. >> and with that embrace and

that lie about cantor being helpful in the negotiations, john boehner now owns eric cantor. jay carney pointed out today how absurdly politicized the debt ceiling has become, something that previously had always been a routine vote. >> collectively, the republican negotiators in this room with the president have voted to raise the debt limit 25 times. speaker of the house has voted six times. the majority leader of the house has voted to raise it six times. senator mcconnell voted to raise the debt limit eight times. senator kyl six times. >> reports of today's meeting indicate that no progress was made, that republican senate leader mitch mcconnell's plan for a three-vote plan to raise the debt ceiling over three months was not even discussed. and by all accounts, eric cantor did not say a word. there is no meeting scheduled for tomorrow, but the president

has scheduled a press conference. as the clock runs out, the president's hand only strengthens. wall street has instructed the republican leadership that they must raise the debt ceiling by august 2nd. something mcconnell and boehner already knew. and as the negotiating sessions become less productive, it actually increases the chances that the president will get his original wish, a wish that no one seems to remember anymore, a simple, clean bill that does nothing, nothing, other than raise the debt ceiling. a bill that does not impose draconian spending cuts in medicare and other programs that democrats cherish, and a bill that does not include any increase in tax revenues that republicans oppose so relentlessly and irrationally. if congress does try to force something on the president that he does not like, he has plenty

of time left to veto it and force the congress to go back to work. in fact, with the debt ceiling increase, the president can veto it at sunset on august 1st with default looming at midnight, and the congress will still have time to pass a clean debt ceiling bill at the last minute in order to avoid default. something the congress knows how to do and has done many, many times in the past at the last minute. in fact, it's been traditional to wait until the very last minute to try to pass debt ceiling increases because as everyone used to understand in the congress, the debt ceiling increase is what they used to call a must pass bill. no one can tamper with it. they can vote against it as long as, and you heard senator durbin explain this on this show the other night, you can vote

against it, as long as, as durbin put it, you're looking over your shoulder and making sure they have enough votes to pass it. the congress has frequently taken up the debt ceiling at the last minute. the night before default would hit, specifically in order to force members to just shut up and vote. to not use any delaying tactics, no filibustering, no attempts to amend the debt ceiling. in fact, when i was running the staff of the senate finance committee, we wrote and passed debt ceiling increases with ease. here's a typical one right here that i did. it's one sentence long. this is the entire debt ceiling increase bill. it is one page. the one sentence simply says, that this is to raise the -- let's see -- this was a temporary one, so it has a little extra wording in it. during the period beginning on

the date of enactment of this act and ending on september 30, 1993, the public debt set forth in subsection b of section 3101 of title 31 united states code shall be temporarily increased to $470 billion. those are the days. $4 trillion debt. it was a temporary debt increase. the second debt increase that i had to do to back up when this temporary one ran out was this one. okay? a little bigger. this is only by bus reconciliation act of 1993. it's got a lot of stuff in it. in fact, it has funding for the entire federal government in here. here, tucked in here on page 254 is the debt ceiling increase. it is one sentence. just one sentence. there's a lot of other work i'm

proud of in this bill, like the biggest tax increase in history. the only tax increase that i got to do during my time at the senate finance committee. if you're only going to get to do one tax increase in your life, it might as well be the biggest. this bill also includes spending provisions for the entire federal government. so that took more than half of these pages. and it is worth noting at this time that in this bill are a couple of hundred billion dollars in medicare and medicaid cuts that were proposed and supported by president bill clinton, written into law by a democratic congress and passed with democrat votes only. the biggest cuts ever enacted in medicare at that time. that was the very first thing that democratic president bill clinton did with medicare.

actually cut it. to no objections, none, not one word of objection from liberals at that time about cutting medicare. not one person who has attacked president obama from the left for even discussing medicare cuts objected to the clinton medicare cuts, which were supported by every liberal in the united states house of representatives and the united states senate. now i don't know where the newly-appointed protectors of medicare were at the time. it was the middle of the summer. they might have all been at baseball games. but the president didn't hear from one of them. not from one of them. what barack obama has heard from so many about betraying their trust by discussing medicare cuts.

you know the rest of this story. this bill passed. medicare continued to be the best government-run health insurance program in the world. the biggest tax increase in history did not cripple the economy, as every republican insisted that it would. bill clinton took ownership of the economy with this bill. and the economy soared to new heights, especially for the rich, the very rich, the super rich, the ultra rich. they all got richer and richer and richer. living under that horrible clinton 39% top income tax bracket. but i digress. the debt ceiling in this bill, which we slipped in here on page 254, where we wanted it to be, pretty hard to find. in fact, it was so hard to find it took me most of the day today to find where i had put it in

this bill back in 1993. it simply says, as all debt ceiling increases before it have said, with variations on the number at the end, subsection b of section 3101 of title 31, united states code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $4,900,000,000,ooo. i can't tell you how thrilled we were to keep the debt limit under $5 trillion, about a third of where it is now. that's all a debt ceiling increase is. it's one sentence. so the president can hang tough on the debt ceiling right up until literally the 11th hour. he could veto a debt ceiling bill at 11:00 p.m. on august 1,

and the congress would still have time to pass a clean bill, a clean debt ceiling bill, before midnight. the president could write it himself. he could hand write it if he wanted to. he could just take one that we've written before, use the same words. just take the last one that was passed just last year. here it is, right here. in the monitor. all you have to do is change five digits. change the 14,294 to 167,000. that's it. you're done. that's the bill. the house and the senate can vote for it by voice vote in less than ten minutes. that's how far the president can take this if he really wants to put the congress' back to the wall, as the clock continues to tick down. as the republican retreat in

disarray demonstrates the president's power only increases. joining me now is richard wolf, msnbc political analyst and author of "renegade: the making of a president." richard, as we've heard, the president has scheduled a news conference tomorrow. no working session of the group. that doesn't sound like it's going to be a particularly good day for the republicans. when he gets out there on the news conference stage on this subject, things don't go well for them. >> no. and he's told them to go back to their caucuses and figure out what they can do with this deal that he wants. he said he wanted the biggest deal possible. he still made that presentation today. i understand that tim geithner and his chief economist, gene sperling, jack lou were making one more big push for the big cuts republicans say they want. if they turn their back on those big cuts, the president is in the strongest position to say they are not living up to their

rhetoric. let alone their principles. >> and there is no chance of them accepting any kind of big deal at all because the president is insisting that there be tax revenue increases in there. so the president knows that he is pushing something that they absolutely cannot agree to. so at this point, what the president does seem to be doing is what you just said, is making his position appear to be the one who wants to do the big move on deficit reduction and forcing these republicans to back away from big deficit reduction, thereby, he hopes, neutralizing deficit reduction as an issue against him in the presidential campaign. >> well, look. he's talked about deficit reduction all the way through. but remember, it's not just his position here. it's two thirds of the american public. we have a slew of polls here saying that two thirds of the american people want to see some combination of taxes and spending cuts to get this deal done and to put the federal

budget on the right track. that is not just a matter of politics. that's if the republican party is serious about its own survival, they read those same polls. and know where they should go, too. >> nancy pelosi seems to be having fun with this tactic, too. she has come out saying she is for the big giant $4 billion package too, knowing that she couldn't possibly get the votes on the spending cuts side of that in the house of representatives. richard wolffe, thank you very much for joining me tonight. >> you bet, lawrence. coming up, jon stewart cannot help himself. he cannot control his deep desire to make gay jokes about michele bachmann's husband. so he needs a therapist to help him pray away the gay jokes. that therapist is jerry seinfeld. you'll have that latest in the show. don't miss it. and later, when republican house leader eric cantor says he will never vote for a tax increase of any kind, he is forgetting one little thing about his own record on taxes. luckily for him and the political media has also

forgotten it, too. but i'll be reminding him and the political media of the day eric cantor voted to raise income taxes. that's in my "rewrite" tonight. 50 billion network devices will roam the earth. that's seven devices per person. this will change how we work in ways we've never before imagined. what do you need to secure your people, their devices, and your business? a network that can evolve and grow to protect your human network. ♪ [ male announcer ] the davis twins... ...are alike in nearly every way... ...right down to brushing their teeth. so how did only one get gingivitis? well, one in two people do. so i told karen about new crest pro-health clinical gum protection toothpaste. it helps eliminate plaque at the gumline, helping prevent gingivitis. it's even clinically proven to help reverse it in just 4 weeks. and it protects these other areas

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their way and they fail to raise the debt ceiling, president obama would be forced to pick which of the roughly 80 million monthly payments the treasury pays and does not pay. according to an independent report led by jay powell, a republican former treasury official, in august the u.s. has an estimated $306 billion in payment obligations but would only take in $172 billion in revenue, leaving $134 billion shortfall for the month of august. in other words, president obama would have to immediately cut 44% of federal spending. as "the washington post" points out, through august, the government could afford social security, medicare, medicaid, defense contracts, unemployment insurance and payments to bondholders. but then, it would have to

eliminate all other federal spending, including pay for veterans for members of the armed services, civil servants, as well as funding for pell grants, special education programs, the federal courts, law enforcement, the fbi. what do they do, close it down? national nuclear programs. housing assistance. it goes on and on. and this is to say nothing of the impact on global financial markets. >> i think it would be a calamitous outcome, create a very severe financial shock that would affect not only the u.s. economy but the global economy. we would destroy the trust and confidence that global investors have in u.s. treasury securities as being the safest and most liquid assets in the world. >> joining me now, "the washington post" columnist and

contributor, ezra klein. thank you for joining me tonight, ezra. >> good evening. >> this report gives lie to this crazy republican notion that has been going around, michele bachmann and the others saying they would be fine, they just wouldn't pay the stuff we don't need, they could pay the social security, the military, be able to pay for the interest on the debt, the bonds, all that stuff, be able to pay for everything that matters. this is a completely untenable position with this study. >> the danger of the debt ceiling is not theory. it's arithmetic. you mentioned it earlier. it's $134 billion. that is 10% of the august gdp for that month. if you do that for any period of time, you cut out 10% of america's gdp for that month. if you do that over any period of time, if it's an instant recession, you shave off 10% of the nation's economy. that doesn't even get into the uncertainty, the fact that every other or almost every other debt instrument, credit cards, mortgages, corporate debt, would jump up because they are all based on treasury debt. the damage to the economy is not

on a scale that we're frankly even prepared to calculate. >> and this is all based on estimations of what the income to the federal government is going to be. there is some late tax filers that tend to come in around now, that they are expecting to come in in early august. but they never really know how much money is going to come in in the first week of august. >> or even how much money will go out. the secretary does not get on the floor of his office and spread out 80 million different checks and decide which ones to pay and which ones not and how much is coming in and how much isn't. it's all programmed into computers. it's all automatic. nobody actually knows. this is the scary part. nobody knows how you would stop paying certain things and not others. there's no program where you just check and uncheck boxes. that is not how the federal government works so aside from everything else, you would have an enormous amount of uncertainty as to how we could do it and who would be paid and who wouldn't be. which means not only would you you have the people in theory not getting paid pulling back the economic activity but a much larger group unsure of being paid would begin to stop putting out money.

and when these people hoard this money, that's what we call a recession. >> whitey bulger is supposed to be on trial. you know, i guess he's not a federal case but federal courts around the country, what happens if there's no money to pay the clerks, the judges, everything that goes on in a federal courthouse? >> we really -- it's amazing. we really don't know. as you know, lawrence, in federal shutdowns, there is legislation governing who stays on and who doesn't. it's people who are vital to national security, vital to protecting people. we actually don't have legislation like that for a debt default. we have never dealt with this situation before. it isn't clear what would be legal and what isn't. it isn't even clear. let's say you're a member of the fbi. you don't want to go home because your work is vital to the nation and you assume you'll get paid eventually. it's not clear you can keep coming to work lawfully. >> "washington post," ezra klein, thank you for joining me tonight, rezra. >> thank you. coming up, the person who did the ads for senator ted

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