india cozies are made to believe the movie going to joy see the children's movie that's the gateway to the grand imperial college it's all western coromandel new china let's not tell the socialist a joke it's a duty to go and. read this in the kernel was hotel as used to retreat. the eyes are seventy four in the nays are twenty six emotions and courage in the house amendment to senate bill three sixty five is agreed to sell their your happened but the question still remains with all the politicking to get to this point in this play the system actually supposed to work or is it broken and as tea partiers gained ground are progressive now working to play catch up if so what would that mean for the president. shouldn't take the risk of default. the risk of economic catastrophe to get folks in this town to work together and do

their jobs but it did so who are the winners and losers of the budget negotiations and doesn't even matter as the clock just keeps getting around. it's tuesday august second four pm in washington d.c. i'm christine friends out there watching our team. well let's start out the day with the way we have been starting out most days lately with a look at the very latest in the battle over the debt ceiling default and all the other strings attached to this debate and this deal that have dominated our national discussion for the last several weeks and within the bill a plan to cut budget deficits by two point one trillion dollars in the next ten years yesterday we saw this deal pass in the house with two hundred sixty one voting for it one hundred sixty one voting against today the senate also passed the bill seventy four to twenty six and shortly after president obama signed the bill

another four he said this voters may have chosen divided government but they sure didn't vote for dysfunctional group. so did the governments in this case solve the problem or did it simply create new ones to help answer that question i am joined now by c. motley president of less government here in our studio and in our studio in los angeles dr carolyn hellman professor of politics at occidental college thanks so much for being here you know i have a feeling you'll have some widely differing views when it comes to this topic but i think we can all agree this was not a celebrate story day to day for the president he spoke about the importance of getting this done of compromise but also sound a little bit disappointed and scolding about the results caroline it did the president lose this battle. absolutely he lost this battle actually back in december when he capitulated to republicans and extending the bush tax cuts without

having any other concessions such as the debt ceiling raise he lost the battle again with a government shutdown a few months ago and he certainly lost it here when he allowed those representing ten percent of the american public tea party members to essentially hijack the process this was a compromise but it was a compromise between boehner and reid it had almost nothing to do with what democrats wanted this is a clear loss for the president unfortunately but at the same time seeing the president got trillions of new money and borrowing authority and he also got to push this back and tell after the two thousand and twelve election do you think the president last also. if you want i think he got two point four trillion in new spending which is patently absurd he got we only got a trillion in cuts over ten years that's one hundred billion a year most of that is in the out years which means we probably won't happen because i'll be three in four congress is from now this is a huge government bill cut by d.c. insiders in backrooms to the detriment of the taxpayers i'd like to correct

a number of the my colleagues here just the tea party represents a little bit more than ten percent of the population given the eighty seven freshmen house republicans that exist additionally for the third year all a poll just came out forty one percent of americans identify as conservative twenty one percent identify as a liberal i think the tea party message is a little more mainstream and she's giving it credit well all right then well according to i was i heard from the university of washington finds that ten percent of americans actually identify as tea party members and that's going to college faculty. plus those numbers and i think the tea party is having a very i'm like ok i'm pour the tea party stands for varying issues though and certainly some people can agree with some of our spending and repealing obamacare that's the main those are the main two all right so here's my question for both of you. i think i'll start with you twenty seconds or less i'm giving you this pen to write the bill what does it include that. different where you cut where you add dramatically more codes of front because that's the only thing they can control of

this congress that's the only thing they can control i would also tied the debt ceiling to advance a budget amendment with a two thirds super majority to raise taxes all right caroline your turn. well if we hadn't seen dysfunctional government this time around we'd certainly see if we had a super majority for a budget but what i would do is get rid of our structural deficit problem by a sound like that the federal government can negotiate with prescription drug companies over drug prices which jacked up our structural deficit problem and president bush passat a few years ago the i would get out of the wars in iraq and afghanistan and see i would restore tax rates on the wealthiest americans which would contribute three trillion dollars over the next ten years all of which would address this issue which is nothing three trillion dollars over ten years it is three hundred billion a year that is one component of three it has addressed all of our structural deficit also is one of them is it that had we done that ten years ago we thought that well that's not true because the economy would have grown and i would have lost money from a small reply the economy didn't grow it was the slowest growth rate in seventy

years under george w. bush but he really did a large number of things so it's a totally fraudulent number one bush ran for reelection in two thousand and four the aggregate unemployment rate for the year of two thousand and four was four point five percent i think we'd love to get back there at this point the problem is you guys worry about obsolete i think you're talking about something different i'm talking about the growth of the economy guess what you have to you again you're taking you know you're playing with the numbers for seven and a half years economy was very good and it crashed at the u.n. because of freddie and fannie mae and freddie mac. and government regulation of the housing industry if you take now we has because wall street started acting like a casino yes you could be related. president clinton they were forced to buy a gun but i started looking president clinton and close finish starting with what they were for you know and this is the r eight i guess i can finish they they they were for sale again if you're going to bring up alive because computers are a good candidate to reinvest in iraq as are you guys the community reinvestment act forced these the banks or sense of of the orders that are as it were in the economy

with all these forced at gunpoint bad mortgages packaged up in other mortgage with other mortgages. there were poison pills all throughout the world so that when the housing market went down the government forced mortgages destroyed the global economy i know there's a lot of people that would disagree with that scene and that was it was not enough regulation that really really forces our forces but. i think that those are egos team because they're all interesting point let's move on i want to talk about you guys are bringing up former presidential bring up lawmakers what about the american people i mean if you look even at the latest washington post pew research poll and the way people looked at the negotiations over the past few weeks these are the words that they're using they're using words like stupid ridiculous disgusting so the thetic and it looks like nationwide seventy two percent describe them in negative terms with just two percent using positive terms and eleven percent being

neutral on this caroline what does this say about the system here i think that there's if there's anything that you two agree on it's that this process was a little ugly these lawmakers were elected to represent the people and it doesn't appear that's what's going on. well i would argue that on many counts certainly the system is dysfunctional this is the first time where we were able to politically cause our manufacture a crisis with the debt ceiling since one nine hundred seventeen this is the first time that it has been aligned with a debt deal there's no magic debt ratio to g.d.p. ratio we have seen it this high post world war two so all of this you know the crisis that we're supposedly dealing with it is a manufactured one and unfortunately it's one that may now have an effect on our rating not because of the debt but because of the wrangling and launching to know what it means for a broken system of government that's totally fraudulent or says the reason the credit rating is going to go down is because they said we need four trillion

dollars of cuts over ten years we did we've barely got one it's not about the debt ceiling it's not about the wrangling in washington it's about spending more money you don't need to again we're not spending we're not spending way too much money we're not cutting enough and that's where we're going to lose or i think you know this is an interesting point because you know you see we look across the ocean we look to you know great britain where this conversation has also been had about austerity measures and what to implement it seems like when we bring that conversation up here in the u.s. that sometimes it's a little too nancy or a little too non politically correct for people to talk about actual cuts at least until they're forced carolyn what do you think about that. well i would agree with scene that we do have a structural deficit problem however the big difference between great britain the united states and great britain cannot coin the euro and have a have almost no effect they we have that ability to do that that's why couldn't god so angry at us because we are the big economic bully but we don't actually use

that when we talk about the u.s. government being like a household we don't have to balance our budget in the same way and it is dishonest to say that we do and it's generally done in the service of trying to get wealthy people tax cuts which is precisely what we just saw i can't believe you're still sticking to the the rootless notion that we don't have to balance our budget that is just patently absurd of course we have to but we haven't for that for many years where that's why we're in the situation we're in i don't situation are we and what situation for can i remember and what situation we're fourteen or fractured situation we're fourteen and a half trillion dollars and get on a fourteen trillion dollar g.d.p. that's terrible no stabiliser terrible tell me the magic number seen please some of the because every dollar we. because every dollar that the government borrows is from the same pool of money that entrepreneurs would otherwise perl from it which would create jobs create wealth and actually grow the economy i mean there's so

many instances of some of these big companies getting tax breaks and some of the mid-size companies getting tax breaks with under the notion that they're going to create jobs and they don't but now there are a lot of but the other side of the coin is the regulatory and goals of barack obama's dropping all over the economy grabbing control of the internet with net neutrality and regulating the. applying cap and trade as if it were passed even though it wasn't viewed the e.p.a. applying carjacked by the n.r.a. be even though it hasn't been passed but a lot of these situations these are regulatory assaults on the private sector the close people to be uncertain and not hire people but i think the last two years that he was happening that's out of the last three are there at the end of that regulation when it's when things become the regular. added that's when no. other reason nothing to add ultimately it was regulation that caused the crisis in the first place anywhere you say because it was allowing the law you were going to look at lending institutions thinking institutions was as crazy yes well i think everyone knows you're not going to do this or that you are just under

a cloud was forced forcing loans on things that they didn't want to otherwise mate it's a notch that is so much anger is already advised we're going to agree to six a year this is not things like nobody's mind is going to get changed or you're not i want to hear if i can just add something yes i mean guy can i add something to terrify here sixty one percent of subprime loan holders qualified for prime loans which which means that there was mass fraud in that market which was one of the primary drivers blaming it on the c.r.a. is a red herring since the one person qualified the other forty didn't and that's what destroyed the economy all right hold on guys let's hear that stat but i think you let's move this back to what happened today which is the passing of this deal and i want to take a look at some of the things that the cuts that are here when you take a look at the people who are most vulnerable here who stands to lose the most you know depending on what the supercommittee of course the sides we're talking about and i really don't think that this is a point that they can really be argued the people that are left the most vulnerable

by the cuts in this bill are students there are seniors and they're the core and when you look at the other side of people who it was suggested be made a little more vulnerable oil and gas company that was one that president obama said you know maybe they can have a higher tax we're talking about wall street banks are these people did not get touched by homeowners like untaxed people get tax president raised taxes on oil companies they raised the price for all of us that's not true it's actually there's no evidence of it always all right but hold on let's see what president obama said about this today and then we'll talk about it. i've said it before i will say it again we can't well it's the budget on the backs of the very people who have borne the biggest brunt of this recession so it seems to me in that you are trying to argue that if we if we give boyle and gas companies this tax that they're going to pass that price under some the fact is only gas companies are making more and more revenue for people in the middle and lower class have continued to suffer and

more when when you raise taxes you don't hurt the rich you hurt the people who have as many of you all know that taxes because if you don't tax us right you know for a second let me finish let think that and i'm sorry you should only be doing speaking here and i apologize yes main reason in seattle right now need to get out of the guys if you raise taxes on it doesn't hurt the rich if you took every penny bill gates made this year he'd still be rich what you're doing with the high tax rate is preventing people like us from becoming rich so the gap always widens when the government gets bigger and the taxes get are you all right caroline what do you think about that argument. well i think it's entirely flawed the gap gets wider when we stop taxing the wealthy at the same rate that we're taxing their secretaries that's when the gap widens and what's happening with the oil industry i'm sorry can i finish what's happening with the oil industry is that they have tripled the price of gasoline over the past what four years and they have doubled

their profits have gone up forty percent and refiners have doubled the cut that they're taking and this has nothing to do with increased regulations or increased taxation in fact president obama has released oil petroleum reserves which i disagreed with in order to try to bring the price down and he has taken many steps including issuing many drilling permits and he still hasn't brought the price down he is that i should soon he's not his biggest single permit since the spill but he says that is why the action as he'll you know i'm sort of up on the internet on that is a lie he has not issued a single permit not a single one since the since that is not true and that is not true is it in fact you can look it up easily answered her meds if he hasn't issued more permits then at the end of the bush admin it is a totally for whatever action let me ask you this because you seem to disagree with the fact that for example secretaries of c.e.o.'s these you go to these are taxed at the same rate as their c.e.o.'s one percent pay like fourteen or fifteen or

sixteen percent of the taxes or because they make a whole there's a lot more of it's not first of all on i don't want to hear this i will make a point that equal protection for the law means that a progressive income tax is unconstitutional and it's unfair and unconstitutional to punish somebody with a higher confiscatory simply because they make more money ok what about not punishing people what about the companies that we thought i came out very few months ago companies like bank of america companies like apple they pay zero yes said yes now there is corporate tax reform that absolutely needs to occur because it's a very thirty five percent rate in the world. and there is also not like they actually pay. less and less they actually pay to do everything right all right percent thirty then all these groups google is a friend of obama they paid four percent last year bank of america friend of obama they paid structurally zero percent so what we need to do is we and republicans been calling for this for years dramatically reform both the private individual tax

code and the corporate tax code there is only one democrat that's on board with that that's ron wyden senator from oregon other than that the democrats are opposed to this because they can jigger the system and their friends with it with the complicated multilevel multi-tiered tax code and we should add here that these big companies not just friends of friends of a lot of republican or former presidents and also people running the show here on capitol hill caroline i want to get your reaction to an interesting take on all of this by kentucky republican senator rand paul he did not vote in favor of the deal i want to play what he has to say and get your reaction. decades america has lived beyond her means a nation that lives beyond her means will eventually live beneath her means that day is coming a day of reckoning looms that day was ever aug second that day is when the dollar teeters and falls from its perch that days when prices soar that days when

unemployment and a declining standard of living foment is discontent and unrest in the street. so caroline talk about this i'm pretty frightening words here sounds like the beginning of a horror movie the way that senator rand paul is talking what do you think about this. well i think that again this is part of the fear mongering of this manufactured crisis we do have an internationally traded currency that we can coin and if we do it responsibly it has very little effect in terms of inflation i think it's the largest transfer of wealth that we've ever had in american history since one nine hundred eighty s. onward that has caused this and i would argue that for some especially the unemployed or the underemployed they're already experiencing these die of these dire circumstances and what we just passed today my goodness had congress spent that much time and energy looking at job creation we would be in a much better place than these draconian cuts that they're proposing on the poor the working class and the elderly all right since we did twenty seconds or less

with what you would have done let's say twenty seconds of less or whatever what you think comes next start with you well comes next is we got to stop spending before because one day we're going to wake up and people are going to treasury notes anymore and that's the day of reckoning that she doesn't run right caroline what do you think what do you say what do you think would. well i would certainly acknowledge saying that that is a possibility i hope that we are responsible enough with our monetary policy policy that we don't get there i think comes next to some really nasty partisanship around thanksgiving and once again around christmas and i think we're headed into the nastiest presidential election campaign in american history safer maybe andrew jackson all right should be interesting we will keep an eye on it hope to have you guys back on to talk about it all fit molly president of less government and in our studio in los angeles dr carolyn hellman professor of politics and occidental college thank you both thank you. all once again we want to turn the discussion away from lawmakers and other people here in washington on to regular people who

live in this country how they feel about what's being decided for them on their behalf and what i think it all means well we're a harvest of the residents on that decided to find out just that and here's what she found. with a looming debt crisis the u.s. is watching the clock tick down to an economic armageddon what is that even mean this week let's talk about that they keep betting dates over and over again and nothing happens just part of the negotiation process so it's idle threats i believe this expect more from the people you like. neither party is going to let that actually happen where they would let it expire and then the united states we go into default i don't think that's going to happen i think that's a bluff but i think what actually is at hand is for real and they're they're using it as leverage to push their respective issues but i think americans if i'm speaking for myself as an american are sick of it representing the viewpoints of

the representing but i don't think you're going to the american people want this merger deal with does. anybody really what they really want or do you want and i want to compromise right now the drama right now is largely contrived there is a debt crisis but will make it through. you know we'll pay the bills and things will be fine so all this drama is just making people crazy why are they doing that now i mean we raise the debt ceiling every year why is this drama unfolding right now well it's largely political because the upcoming election you know it's a good thing it's finally happening i think that people are speaking up and hopefully will go away but sometimes it takes a while to. things really are i mean nobody is giving any ground up so you know you're largely for for many many years and this is absolutely truly amazing and makes me wonder how they ever get anything done in israel or in italy or any place

really of multi portage i would go to portage to an airport if you could and we can't get anything done it's utterly embarrassing this will be ashamed of themselves no matter what happens with the u.s. debt crisis the bottom line is we're bound to be a lot more pasturing from all the politicians in box. all right sticking with this discussion about the debt ceiling you know we've talked about the game about how it's been played and about what people think and it's also important to talk about how this changes the game and what we can expect to see ahead especially in terms of how this plays out for both president obama and for his supporters so joining me now to discuss the plight of the progressives as artie's own tom hartman host of the big picture thanks so much for coming on let's talk about this a lot of people disappointed of course with what was in this bill it's hard to argue that no one was more disappointed you know than the progressives is this the

last straw for them i mean is this where they say sorry president obama we've stuck by you but now we're going to leave i just a three hours of radio talk radio to shorty it was like psychotherapy. people call it into a spear. this is just it's a defeat it's it's a short term to feed. i think that what happened frankly was that barack obama tried to do a bill clinton and try to triangulate he thought that he would cut a deal in fact i think he thought he already had a deal he was asked back in december but a reporter for the national journal a conservative publication what are you going to do why didn't you know when you got the debt ceiling or when you got the extension the bush tax cuts why didn't you get that in the debt ceiling right and and the guy said this is going to give the republicans leverage president obama's answer was how do you give them leverage i mean he did throw in the start treaty and the repeal of don't ask don't tell i remember with the exception of as best as tax cuts but it could have been interesting opportunities that people were calling into a radio show was there

a commonality in terms of the things that seem to really bother people the most well if did he try to triangulate and it blew up in his face you know because he miss misunderestimated the tea party or because he's getting on the job training or is he a stalking horse conservative i don't frankly believe that but there are people who are starting to think that or was he just blind sided you know somehow and and i think frankly that he thought he had a deal with john boehner i think john boehner thought he had a deal with john boehner that included raising revenue and they were both going to get gregg at the end of the day that they succeeded and eric cantor blew it up very very interesting i'm sure if eric cantor were watching him be very pleased to hear that right now. you know in his speech today that president obama was doing anything but celebrating but he did sort of theme to want to make sure that his base knew that he was still fighting for them i want to play a little bit about what he said and i will talk about it and since you can't close the deficit with just spending cuts we'll need

a balanced approach where everything's on the tape yes that means making some adjustments to protect health care programs like medicare so they're there for future generations it also means reforming our tax code so that the wealthiest americans and biggest corporations pay their fair share. and it means getting rid of taxpayer subsidies to oil and gas companies and tax loopholes that help billionaires pay a lower tax rate then teachers and nurses all right so it sounds a little bit like we're seeing candidate obama reemerge and making sure that you know his base his supporters know that he's still on their side he's in full blown campaign mode right now and that's why i think that this was a failed effort in trying to elation and which would have been a good campaign move for him. but you know we'll see where it goes so it's i don't even know if you answered before about do progressives abandon president obama at this point or i don't think so i think there's going to a rough time just not just like after health care just like after the extension of

bush tax cuts there have been a number of times where you know people have to get used to the fact that politics is messy and compromise is involved and nobody on either side ever wants compromise and let's talk about the tea party i mean despite the many members of the tea party and not voting in favor of this bill it was largely in their rhetoric which is you know less government spending less government involvement no revenue no tax increases and it's actually not a tea party rhetoric but they're not at all i mean less government of the party rather and that was what they used during the health care crisis get the government out of my doctor's office that's that's the koch brothers rhetoric that's dick armey is rebel who is responsible partly responsible for the founding of the tea party sure certainly saddening it but last week in st louis there was supposed to be a big meeting of the tea party three people showed up well and she party is as a populist movement is dying if not dead the average person the average the party or was in their fifty's or sixty's and white and middle class they're the people who want social security who are freaked out that they're going to lose medicare so

that's very much not the tea party rhetoric that's dick army's rhetoric and others rhetoric and that's what's being put answer in extent eric cantor is about a lot of power and this is you know just mentioned their message but these people are scrambling aided gulleys a message of leading up to the two thousand and ten elections that that translated into action here in washington i'm wondering what you think if the progressives are looking at this and they're saying you know people even left of the average moderate liberal thing you know what maybe we should learn from this maybe we should mobilize and make sure the two thousand and twelve the house looks a little different in terms of the elections is there anything like that happening a mobilization it's happening hugely and there have been huge demonstrations all over the country that haven't been covered so much by the mainstream media you've covered some of them but by and large they haven't seen van jones who is you going to be rolled out the rebuild the dream dot com the first nationwide. means that they have had more than twice as many people show up for more than twice as many meetings as the tea party at its peak and so it's like you know it's happening and people move out or of all these other organizations they are mobilizing now tom i

know that you've gotten some insider information about what happens next in terms of this it seems just outrageous at least for me living here in washington think that there's another you know big battle up ahead coming up soon but what do you know well there are a number of probable ones one that i'm hearing that may be happening is at the end of september the gasoline tax rolls over and fortune half cents or thereabouts or eighteen point four zero and this is a tax that pays for the guys who are out there we build in the roads for road maintenance and so if the republicans say no we're not going to do the pro forma rollover of this thing if this becomes another put the political arguments another you know we're going to shoot. the hostage taking then the president is going to be in a position of having to advocate for higher gas prices and higher taxes and the tea partiers are going to say oh we're we're in favor or against prices and lower taxes it's going to be a mess and that you know stay tuned that's that's going to be about seven weeks so

if the our lawmakers go on recess they come back and can't get ready to do it all over again in terms of another five weeks they get to real quick just you just take a lot of people today saying you know maybe the system in general the u.s. government needs to be evaluated i keep hearing the word dysfunctional do you think that the government based on what we thought today is the function this is what republicans always do the reason why ronald reagan put bill bennett in as head of the education department was because when bill bennett himself was running for president his primary campaign platform was abolish the department of education and it's why it's why george herbert walker george w. bush put brownie in charge of fame you know putting competent people into government then when government fails thinks of the incompetence and it plays to their narrative and they've been doing it for so long i mean basically since reagan the government is stacked with incompetent people it is certainly interesting the way we think some of these things sort of rehashed themselves congress after congress time and time again always good to have you on great perspective artie's own tom hartman host at the big picture thanks christine.