co-chaired by erskine bowles.d by alan simpson, former republican senator from wyoming. they put together a plan that reduced the deficits over ten years by about $4 trillion. 2/3 to 3/4 on the spending side, 1/3 on the revenue side. and the gang of six is really an outgrowth. some of the people who served on the deficit commission with erskine bowles and alan simpson. >> we have received -- we have word from the white house that this plan, so far of just six, moves forward, that the president is now willing to agree to a short-term extension on the federal debt ceiling. we listened to him before, what was it, last week in the daily briefing where he derided the whole plan. he said i don't want to kick the can down the road. i want a long-term fix. what is your reaction to the turn around? what do you think, senator, changed the president's mind? >> well, the president sat in negotiations with john boehner in the house and senate, he wanted a big deal, wanted to try to get to $4 trillion in deficit savings. a demo

one erskine bowles. erskine bowles. who is is he e?er skin was chief of staff for president clinton. and he was asked by president clinton to negotiate a deficit-reduction package with the republican house and senate. at that time the republicans were in the majority in the house and senate during those years. and president clinton saiderskine, go out and negotiate a deficit-reduction deal, some on the spending side, some on the revenue side so we can follow up -- an early package was adopted in 1993 with only democratic votes. he said let's see if we can't actually balance our budget. we hadn't done it since 1968. god bless erskine bowles and the folks he negotiated with. he went to work in 1997, came up with a deficit-reduction package, 50% revenues, 50% spending that had everything on the table. long story short, we ended up with a balanced budget not one, not two, i think at least three years in a row at the end of the clinton administration, and handed it off to a new administration. balanced budget surpluses as far as the eye cou

erskine bowles, he had the opportunity to give it some oxygen. the president.hoose some leadership. he turned his back on his own fiscal commission. he select a budget that he later repudiates and every member of congress from both parties votes against. these were all missed opportunities where he loses credibility on dealing with this budget deficit issue and the debt issue which obviously is what we're talking about now in terms of the cap. so there's a long line of missed opportunities. >> very fair critique. let's deal with the current crisis. a bunch of cats clawing at each other. when do the grownups emerge. we had a week of clawing at each other. now it's time to sit down. >> i would like to see the president give a final offer and give an address to the nation. we have a lot of national speeches about terrorism, about foreign policy. but this is something that affects people's lives, affects their livelihood and the white house has to draw a line. >> if he does give that speech does he have to do a lot more than he did in the press conference. speak to

decision of the bipartisan deficit commission report under republican senator allen simpson and erskine bowles, but under the leadership of todd coburn, the gang of six proposal is even better than what the bipartisan deficit commission laid out. >> you just came from the house. you are a member of the house. explain the difference between -- is it easier being against something in the house than it is in the senate? in your mind? >> no. >> explain some of the differences? >> it's exactly the opposite. i've been a senator, junior sfo senator all of 200 days but i served in the house for the last ten years. in the senate it's very easy to be against everything and everything grindses to a halt. there's growing alarm on both sides about the future of the country. i do believe the nuance you just picked up, house members say they are against mcconnell. they have concerns about the gang of six opens up the door and as we approach the deadline, we remember 1996 when, as the government shut down, speaker gingrich's forces very quickly collapsed. this is a way for us not to collapse. this is a way fo

and don't forget, you had the deficit reduction commission, erskine bowles and senator simpson talkedillion over projected levels for the next decade. >> in terms of the bin laden raid, obviously immensely politically consequential, and assuming it would be consequential in terms of national security concerns. that was a small operation in a country where we don't have ground troops, using special operations forces. how much does the success of that particular operation factor into the budget discussions? can i have i guess a long -- i guess a wide understanding of the different budget discussions that a raid like that affects? >> well, for example, the budget for the special operations command, the command that got bin laden, is about $11 billion in a $700 billion budget. and i think what this shows is you don't have to invade, you know, countries, try and overthrow the regimes, transform the societies, to protect our security. and i think that really is the lesson of getting, you know, bin laden. even secretary gates has said, you know, any secretary of defense who would recommend t

erskine bowles, he had the opportunity to give it some oxygen. the president.ose some leadership. he turned his back on his own fiscal commission. he select a budget that he later repudiates and every member of congress from both parties votes against. these were all missed opportunities where he loses credibility on dealing with this budget deficit issue and the debt issue which obviously is what we're talking about now in terms of the cap. so there's a long line of missed opportunities. >> very fair critique. let's deal with the current crisis. a bunch of cats clawing at each other. when do the grownups emerge. we had a week of clawing at each other. now it's time to sit down. >> i would like to see the president give a final offer and give an address to the nation. we have a lot of national speeches about terrorism, about foreign policy. but this is something that affects people's lives, affects their livelihood and the white house has to draw a line. >> if he does give that speech does he have to do a lot more than he did in the press conference. speak to e

ten years, but certainly as you know, simpson bowles, senator simpson and former chief of staff erskine bowles, in their report they proposed making substantial cuts, raising revenues and across the board with all items of expansion. but they said in the near term, meaning the next year of so, we need to be very careful that we did not have the opposite effect by dampening down the struggling economy, obviously, as we saw today, which will decrease revenues and make the problem worse, not better. so in the short term, i agree with the bowles/simpson suggestion that we be very careful in the short term. there's no doubt, however, in the white house yesterday, or thursday -- yesterday -- there was a clear agreement that this was a serious, serious challenge that confronted us and it demanded at all of us try to come together and reach an agreement whereby we will certainly over the next 10 years and 20 years bring this deficit town and bring the debt down because it's not sustainable. >> do most of the members in your caucus agree that this is an urgent matter, that this is not a kabuki dance, t

today and former senator alan simpson who served on the president's budget commitment along with erskine bowles told you earlier today, and i'm quoting here, the agencies are looking at united states congress are on a mountain and about to give birth to a mouse. in the end, it's the little guy will be hurt if the downgrade takes place. is it the little guy that gets hurt? >> yes, i do notice when we look for signals coming up here, you played some bites, among them the president earlier, who has now changed his talk away from the risk of default to the risk of a credit downgrading because i don't think we're going to be looking at a default. a default would be a nonpayment on a bond holder, some of these extended through social security and medicare beneficiary. i don't see that happening and the president was among the early sort of warners, if you will, saying, look, you don't move on this, we're going to default. so, now they've taken that talk off the table and dialed it down a bit to say the risk of a downgrade is imminent. i think, kelly, that regardless we're going to get downgraded, bec

erskine bowles, a co-chair of the commission, bowles-simpson, does that name make sense to anybody? jeff, what do you think? >> well, if you believe the job of the current administration is to cut entitlements, which is generally that commission was supposed to do, then it makes sense. but if the democrats intend on winning in 2012, i don't see why associating themselves with the single least popular idea, cutting medicare and social security, is a good thing. so sure, he's a competent, honorable person, but he's associated with an idea that seems to me a substantive and political loser. >> that's why i say the hardest or worst thing for the white house is it opens up the whole political or ideological debate. jessica, has anybody at the white house come back to you saying it's absolutely not true, we're denying it and pushing back on the story? >> no, no one was walked it back. the most i've gotten is be clear this is an idea, not a plan, there is nothing imminent. >> once again the distinction between idea and plan, the meta physical distinctions only washington can care about. th

you back all of about 18 months to that fiscal responsibility commission that he set up with erskine bowles and alan simpson. they were broadly in line with each other. at the same time he's saying we're running out of time. keep the momentum going and we'll look for the bigger deal. whether the two things match up, whether you can come up with the sketch, an agreed sketch of this bigger deal in time for the debt ceiling is an open question here. even if the hope can be kept alye. it's not clear that you can get all of these things together to go in $4 trillion of cuts over the next decades. they're obviously feeling much better about this whole process many the white house. >> of course, the mcconnell, he said that mitch mcconnell and harry reid's proposal is a fail safe if they can't get this all done. when the books on this and you're one of the prime authors, when the books are written on this, richard, we may go back to why the president, why this white house did not fully embrace simpson-bowles back when they had the opportunity and whether we would have had a very different outcome a

that could be on the table if this committee -- and they differentiate a commission like the erskine bowles, al lan simpson commission. this would be a committee, equal number of democrats and republicans from congress that would come up with the recommendations. there would have to be a take it or leave it up-or-down vote in both chambers. if for some reason it didn't pass, mandatory across the board cuts in the military spending, domestic spending, all sorts of spending would go into effect. >> including entitle ms. the big question we have is where are revenues in all this? we can talk about that in a minute. let's take a quick break. we'll be right back. >> the clerk will call the roll. ♪ ♪ ♪ ♪ look at that car, well, it goes fast ♪ ♪ givin' my dad a heart attack ♪ [ friend ] that is so awesome. ♪ i love my car [ engine revving ] [ male announcer ] that first chevy, yea, it gets under your skin. ♪ >>> we're taking a look at the picture of the senate floor. the senator from maryland is speaking right now. we just heard from the senate majority leader, harry reid, who told us that he beli

fallback plan, because he wanted something like $4 trillion over ten years in spending cuts -- erskine bowles told chuck todd on "the daily rundown" that that might fall well short of what's necessary here. this is what he said. >> the problem is, chuck, that so many people are talking about doing it with just about $2 trillion of deficit reduction. that's not a solution. that's not going to fool our creditors. >> in other words, the markets, our creditors are going to look at that and say that's not a fall back position, that's well short of what they should be doing. >> i think looking at the markets, they're saying two things. first, the united states cannot default. and that is the bare minimum. i say that, again, only because it has to be clear that there are some extreme views in some places that think that's something we can do. we can't. the second is, we need to get our fiscal house in order. i think we've said for some time now, as have most, that we need to do on the order of $4 trillion of deficit reduction over the next 10, 12 years. we would like to get that done now. if that ca

americans, al simpson who was a senator in this very body and former white house chief of staff erskine bowles to head up the effort. i think as we knew at the time and we know even more now these two men are patriots, they brought people together from both parties and they came up with a $4 trillion plan, common sensical, to bring in our -- and rein in our debt problems. we applauded them. coloradans did, americans all over the country did. they brought a commonsense apreach just like we would in our own personal finances. so with we approached our current debt limit this year and faced the possibility of defaulting on our debt, i joined members of both parties in urging us here in the congress to do two things. first, to address our debt limit problem to prevent a first-ever and completely avoidable default so that america could and would pay its bills. and secondly, enact a comprehensive and bipartisan $4 trillion plan based on the simpsons-bowles deficit reduction recommendation so we get our fiscal house in in in or for generations of americans to come but for those of us here today as we

erskine bowles, the cochairman of the deficit commission, coined the situation we face as -- quote -- "the most predictable economic crisis in history" -- end quote. and yet there is no clear path forward to deal with both the short-term need to raise the debt limit and the long-term need to get spending under control. i'm disappointed we have made this discussion about the debt ceiling instead of our ever-increasing spending. when you spend beyond your means, you have to cut back. that's what the 10-year-old said. the plans we are considering at this stage in the debate are plans four the next two years. while there is merit in making the spending cuts these bills make, they are not the ultimate solution. we need more significant action. we need to move forward with something bold. my republican colleagues and i have proposed such plans. i have proposed a solution that would cut just one penny from every dollar we spend for six years and then cap the spending at the historical amount of revenue that we take in during the seventh year. in the eighth year we would have a balanced budge

>> we may recall a year or so ago the president appointed deficit commission co-chaired by erskine bowlesrmer senator alan simpson. 11 out of the 18 commission members recommended a path forward on deficit reduction that added up to roughly $4 trillion over ten years, roughly two-thirds of it on the spending side, a third on the revenue side. they did not call for raising tax rates. they did call for broadening the tax base and eliminating a number of so-called tax expenditures. so it turns out we have about $15 trillion worth of tax expenditures, tax breaks and credits, all kinds of things, add up to about $15 trillion over the next ten years. and if we could find maybe 10% of those to reduce, we could have a deficit reduction deal that did 4, four and a half trillion dollars without raising the rates. jon: what about waste? it's my understanding you're an advocate of reducing waste in the federal budget. how much could you squeeze? >> a lot of people are fearful on the medicare and medicaid side. folks, democrats, republicans and independents are concerned about savaging medicare and me

and you had erskin bowles, democrat, he headed up the president's deficit and debt commission.f you just do $2 trillion that is not going to solve the big problem for the markets. it's an interesting problem. jon: yeah, and looking at the building over your shoulder there it doesn't seem like there are a lot of, i don't know, real winners coming out of this at this point. i don't see any real winners in the white house unless, i don't know, maybe somehow they come to some agreement that makes everybody happy, but it seems like nobody is happy right now. who are the winners and losers as this arguing goes on? >> reporter: no, this has not been a profile of courage these past few weeks. and to be honest with you, if you start looking at polls about antiincumbent feeling, this could be the biggest antiincumbent election coming up, throw both of them out, you know, the blame could go both sides -- jon: a pox on both your parties. >> reporter: that's exactly. that's the feeling, if you go around the country and take some polls that is the one feeling you get that is pretty unique. j

when asked when erskine bowles, president clinton's chief of staff said icould be two years, a little before, a little after. so i guess what i'm saying is that these individuals, particularly the ones that just finished a campaign, traveled all over their state, talked to hundreds of thousands, millions of people in their state, got a feel for it. they are bringing new vitality and new insight into what's happening, and what's happening is nothing. six months have gone by and we have had not any hearings, we have had not any votes on the floor, we haven't seen any legislation. so i think that this is an acceptable method. i think it undermines the classic constitutional duty of congress to appropriate money, deal with taxes, it's our responsibility, and we have to ultimately be responsible for it, but have you observed mayors who say i'm not going to present a budget to city council, i'm going to let themecide? do you see governors not present budgets to the state legislatures and then fight for what they believe in? look what's happened to governor christie, governor cuomo in new yo

erskine bowles, bill daily the warehouse chief of staff currently also jacob lou and janet yellen, it all names that we have seen in various circles when it comes to economics. >> exactly. names we have heard over the last two decades when it comes to economic policy making and that is really just under scores how important this role is now and how you can't really have somebody come in who is fresh on the job. they need to have some understanding of the debates that have gone on, at least over the last three or four years relating to the financial crisis, a big job of the treasury secretary will be implementing the new financial regulation laws and also, just figuring out how to get this economy moving forward in a more susta sustainablend stronger direction. because it's not happening. >> time geithner says two roles, selling of the policy and crafting of the policy and he said at least one of his preferences was the crafting of the policy. >> exactly. secretary geithner started out his time in government as a staff member of the treasury department, not a political appointee. he mo

erskine bowles, a very long shot but a name that keeps coming up is jamie diamond, top wall street bankerere we go with the wall street. you're a wall street guy. >> no, you'i'm not. you love wall street. you have a flat on wall street. how do you feel about these guys being so connected to the very system that got us into this mess in the first place? >> ok. you say that the system got us into this mess in the first place. did it, clayton? >> well, in part, let's talk about that. i mean, this is one of the big issues, right? everyone loves to pass the buck. wall street says we didn't have much to do with it. you ride tead the big short and see all of the weird mortgage-backed securities, hiding things in different places, away from the eyes of the sec and then these guys get cushy jobs in the administration. >> you've had your say. let me have my say. you are totally wrong, by the way. what started this thing was politicians shoehorning everybody and anybody into a house that they could not afford and into a loan that they could not repay. that was a house of cards made by politicians an

it doesn't apply with the deficit commission, erskine bowles came out to say. >> around they kickingan down the road further? >> what they're a is we're passing a budget to cut $1.2 trillion from the budget, we're $2 trillion in debt. it's not going to fool anybody like moody's or s&p and every republican from senator lindsay graham considered a moderate by some say we can't vote for this. >> why do we listen to moody's and s&p, they're the same organizations that got us in trouble with the subprime thing, remember? and triple a rating on the mortgage debt the day before, it collapsed. why listen to them? >> ok, that's one thing. but also, the big political question is which party would be held responsible. if the debt talks collapsed, if the august 2nd date comes and goes, if somehow the u.s. inches closer to default, which party is held for responsible? cbs news released a poll yesterday that had some stunning results and that is, apparently, 71% of the respondents and by the way, that's a little suspect which we'll get to in a moment say they would hold the republicans in congress

does your group like what erskine bowles put forward? do, most of the things we put forward we oppose, frankly -- guest: most of the things we put -- they put forward we oppose, both social security and medicare. there are certain things and medicare more acceptable to the american public and certainly our organization. in the prescription drug law that was passed in 2003, the federal government, medicare is specifically prohibited from negotiating with the drug company -- drug companies for the best price for medicare. unlike the va -- why not do that? it is only logical that an entity representing 40 million people would negotiate. the deal was no negotiations. and i think there are a lot of savings that could be made. there are savings that i think are reasonable -- and proving electronic record-keeping. that would not only save money but it could save the lives. host: to many of those go far enough? guest: we need to see what the affordable care act provides in terms of savings. i think negotiating prescription drugs goes very far. i

he chose erskine bowles, who was former chief of staff to president clinton. he chose alan simpson, former republican senator. they submit ad -- submitted a statement to the budget committee. that statement was this country faces the most predictable economic crisis in its history. we've got to act, they told us. and they said when could this crisis happen? mr. bowles said it could happen within two years. not our children and grandchildren. he said two years, maybe a little sooner, maybe a little later, and alan simpson popped up as cochairman of the committee and he said i think it could be one year. in other words, some sort of economic crisis like we had in 2007-2008 or something that could put our economy in a tailspin. it's that serious. and the debt trajectory path we're on is unsustainable, and tomorrow i have to say tomorrow will mark the 800th day that this senate has not had a budget we're spending -- we're borrowing 40 cents out of every dollar we spend and we have gone this long without a budget. there is no plan apparently to present one. a chair

i believe that it endangers the nation because the erskine bowles who chaired the debt commission, appointed by president obama, has told us that we are facing an economic crisis as a result of the debt and written testimony to the budget committee, and he warned that we have to change the course we're on. i certainly believe that's true and i believe the rogoff and reinhart study affirmed by secretary geithner is correct, that it's already pulling down our growth. i'm really worried about the future of our country. senator lee, maybe you will wrap up for us, but you just finished a campaign talking to hundreds of thousands of people in your state. what's your perception of what we need to be doing at this point in time? mr. lee: the american people expect us to stop burying our children and our grandchildren under a mountain of debt, to stop spending money that we don't have, particularly where we are spending about 40 cents out of every dollar that is borrowed. much of that being borrowed from foreign sovereign governments like china. now, obviously, there are times when as a country we ha

committee says this nation has never faced a more projected evolve economic crisis.ef when asked when erskine bowles chief of staff said it could bes two years, a little before coming to laughter. so i guess what i'm saying is al over that these individuals, talked particularly the ones that just finished the campaign travel all over the state, talked to hundreds of thousands, millions their state, got a feel for it. b they are bringing new vitality in new insight into what's happening. and what is happening is nothing. next month have gone by and we t have not had any hearings. ves n floor. we haven't seen any legislations so i think that this is an unacceptable method. i think it undermines the classic constitutional duty of congress to appropriate money, deal with taxes. it's our responsibility and weir have to ultimately bed responsible. but have you observed mayors whl say i'm not going to present a budget to city will? such a to the state legislatureo and fight for what they believe in? look what is happening toovernor governor christie, governor cuomo, governor bentley in alabama. it really h

that's erskine bowles and alan simpson. their ideas inspired the democratic senators who put this out yesterday. it's getting a lot of buzz and support. here's what it's all about. two step plan cut deficits by $500 billion right away and $4 trillion over the next decade. that's part of step two and then they want to strengthen medicare and medicaid keeping those entitlement program structures the same but spending money a little smarter with them and then fundamentally reform the tax code, reducing marginal income rates and totally getting rid of the $1.7 trillion alternative minimum tax known also as the wealth tax and then they want to strictly tighten the government's budget process by basically restricting how much freedom they have when making their budget, setting up spending caps and using the money they have left over at the end of the year to recoup any overspending that they actually do. that's congress and finally this plan would make sure social security is set up for another 75 years. president obama said in a

have to say this -- two true american patriots, former senator alan simpson and north carolinian erskine bowles, instead of getting onto that plan and the substantive proposal it makes, we're debating what looks to be a bumper sticker campaign gimmick called cut, cap and balance. i have a hard time even saying it. but i have got to say i have spent a good deal of time analyzing the budget tools. after all, i was one of the first and one of currently only a few democratic senators who signed onto a balanced budget amendment to our constitution this congress. i have also been fighting for many years for other smart budgeting tools including paygo budgeting, a line-item veto and a ban on earmarks which would help reduce waste and rein in federal spending. but let me be clear that cut, cap and balance is not about balancing the federal budget, because when you read the bill, it becomes clear that it's simply about ideology. while the name of the bill seems -- it seems reasonable enough, it's conveniently designed literally to fit on a bumper sticker, but the language of the bill doesn't represent a

with a number of others pushed for a commission on national reform which was then chaired by erskine bowles and alan simpson, a wyoming resident. they did an exhaustive study of what it would take to get our debt under control and last year they delivered a report on how to reduce the debt by over $4 trillion in the next decade, bend the curve back to a much more sustainable federal budget situation. they comprehensively addressed all of the issues that must be on the table -- namely, spending cuts, reasonable entitlement reform, and some new revenues. the plan has already received bipartisan support, including senators from each party who are members of the commission. rather than arguing, we could be acting on these recommendations. and, look, if we don't want to follow those exact recommendations, let's at least agree that everything must be on the table in these ongoing debt discussions. madam president, many of us here simply wnts to roll up our sleeves and get to work. i see some of my colleagues on the other side of the aisle. i know that they share that sentiment. even if our leader

erskine bowles, bill daily the warehouse chief of staff currently also jacob lou and janet yellen, it all names that we have seen in various circles when it comes to economics. >> exactly. names we have heard overthe last two decades when it comes economic policy making and that is really just under scores how important ts role is now and how you can't really have somebody come in who is fresh on the job. they need to have some understanding of the debates that have gone on, at least over the last three or four years relating to the financial crisis, a big job of the treasury secretary will be implementing the new financial regulation laws and also, just figuring out how to get this economy moving forward in a more susta sustainablend stronger direction. because it's not happening. >> time geithner says two roles, selling of the policy and crafting of the policy and he said at least one of his preferences was the crafting of the policy. >> exactly. secretary geithner started out his time in government as a staff member of the treasury department, not a political appointee. he moved up

erskine bowles and mr. alan simpson, the cochairman of the deficit commission appointed by president obama, told us earlier this year in the budget committee that this nation has never faced a more predictable economic crisis. and what he was saying was the spending level we're on is so out of sync with reality that it is inevitable that we will pay the price economically for that. and so, part of the problem, part of reason we're where we are is because we haven't had a budget in over two years. and if you don't have a budget, it makes it harder to, for the american people to ascertain whether you're spending more than you ought to be spending. and the whole process is able to be pursued without public knowledge and full disclosure when you don't have a budget. every president is required by the same budget act to submit a budget. i think there is no president who's failed to comply with the budget act. it does not require that you go to jail if you violate it. probably we'd be better off had that been the

erskine bowles was right. we can't get out of our current debt with growth alone. but i will tell you most certainly that we will not get out of it without growth. and so we have to choose wisely. in what we invest in, and when we invest and how we invest, in what we cut and when we cut and how we cut, which we must do. and in how we increase our revenues and when we increase our revenues and from whom we get those revenues. why not invest in retrofitting buildings when we have so many in the building trades out of work sitting on the sidelines knowing that we can recoup that investment in energy savings within three to five years? let's find creative ways of financing that, like pace financing, which lets families get a loan from their local government pands it back on their property tax. this is how cities pay for street lights and sidewalks. it adds values to homes and when the family moves, the loan stays with the property. we should also create incentives for banks to lend to small businesses for retrofitting commercial buildings. there's a company in minnesot

do was come out and say let's just do all we can on the simpson and bowles and put it back out here. those people, both of them erskine and senator simpson, spent along with the rest of their colleagues an immense amount of time talking about the real pain and the real way to address it. and yet we passed it and we're going to pass something on to another commission. i do think and hope that we will take that out. i perceive it just as dangerous as putting up a balanced budget endment and telling me, mr. chairman, that we're going to have one day to look at something that we don't know what it is and we have been in this room many times. and you on that side and you were on the other side and we've talked about not having an opportunity to see everything. when we hit the wall, whatever that wall is, at some magical hour, a whole lot of stuff wl come over here, however it is that the agreement is being struck. and we won't know many of us that our rank and file members exactly what it is that -- it will be two weeks. before we know much of the substance of what's the measure that ultimately passes. let me make it very