gene spurling, is it too much to ask, for the president to support a balanced budget amendment if he seven, or eight or ten-year path to get there? >> first of all, john, i won't be nearly as good at my "lord of the ring" analogies as senator paul was. but what we've been pushing was compromise. what you heard was senator paul giving his heartfelt views of what is a very, very conservative perspective and i know he believes it sincerely. the president has put forward his plan, too, which we would like to get letter for letter. but that's not how we're going to break this logjam and break the stalemate. we're going to do that by compromise, and i think everyone has seen that president obama has been willing to compromise on -- in a variety of ways, and if we can just get a good down payment on deficit reduction, you know, right now we're willing to do quite a lot in spending cuts on the down payment. come back and do entitlement reform and tax reform that will help bring down the deficit in the more significant way that president obama wants to and make sure we're not allowing the clo

this hour president obama's top economic advisor gene spurling. senate budget committee chairman kent conrad, and who will get the last word, the man himself, lawrence o'donnell. as american's wondser what is washington thinking, people are getting angry out there. ♪ raise the debt ceiling >> good day, i'm andrea mitchell live in new york. all eyes are focused on washington where the speaker of the house is being whip sawed today between his tea party caucus opposing any compromise and the congressional budget office now downgrading john boehner's revenue projections. where does the president factor in as time runs out? joining us from the white house gene spurling. gene, what happens next? now we know that both the harry reid plan and john boehner's plan have been downgraded, if you will by the congressional budget office. neither would produce the amount of money expected. will the president at this point sign a short-term deal if a 30-day emergency extension, whatever, just to keep things going while these issues are resolved? >> you know, andr

>> absolutely. >> gene spurling at the white house, thanks for your time tonight. david walker the former u.s. comptroller who is the ceo of the america comeback initiative. david, i want to start with you. from what you hear from the white house, more diplomatic rhetoric in recent days and more from republicans open on the loophole question, not on tax rates, do you see the the beginning of the move toward a deal, or do you see the beginning of getting two weeks from now where lindsey graham says he don't think there will be a deal. >> i'm cautiously optimistic there will be a deal. they have a short-term deal in the election. in my view you have to have defense spending on the table, medicare, medicaid, and tax expenditures. tax expenditures represent back door spending. our revenues now are below 15% of gdp. taking on some of those tax expenditures as part of a comprehensive deal is a reasonable approach. we also have to have some budget controls that will frankly get us to much more than $2 to $4 trillion in spending cuts. >> david mentioned the tax expenditure

. >> gene spurling just said if the president does not want to raise taxes on the middle class. a lot of people are criticizing the republicans for just taking too hard a line on these negotiations. >> so here is the problem, maria. look at what current law already does. the top tax rate, which is what most small businesses pay, locs, the effective tax rate under current law because of president obama goes up 44.8%. so if you're living in a state like wisconsin, you throw state income tax on that, we are taxing our small businesses at over 50% in 2013. that's already coming in current law. 50% of americans get their jobs from these kinds of small businesses. one in four americans get their jobs from chapter s corporations alone. and we're already bringing their tax rate to about 45%. and that's already occurring. and what president obama wants to do is raise it even higher than that. that is going to kill jobs and economic growth. what we simply want is more growth and economic -- more jobs and growth and spending cuts. >> let's talk about your plan, congressman, and the cuts th

. >> and also gene spurling. we can get important perspective from sperling. check your local listings for the time. >> some people worry about the deadlock in washington could wreck our credit rating. making it less likely for other countryy to take on our debt. that could mean interest rates spiking. standard and poors making serious threats this week to lower our triple a score. the senior economic writers for the wall street journal which is the parent company. steve, how could we see the interest rates go up how long? >> i don't think they go up a lot. but i think that consider america has always had a triple a bond rating and president obama would be the first president in history to see a downgrading of our debt. it would negatively put america's standing in the world . i think we lose statue in the world. but the most important thing is what global inveors think about the credit worthiness was our debt and if you look at the last number of weeks, investors are buying bonds and not selling bonds and the interest rates have remained level. there is not a

tomorrow some of the president's aides are going out on some of the sunday morning shows, i know gene spurlinggoing to be on "state of the union" tomorrow morning with gloria borger. we'll hear what they have to say. so far it's weird in the sense that the white house is being at this critical moment in these negotiations thunderously silent, and we don't really understand, you know, what's going on. my own sense is they're moving in the right direction, though. because they simply can't afford default. >> yeah. and mitch mcconnell certainly calling on the president saying the president, the buck stops with him. if he agrees to something, then the democrats, he says, will most likely fall in hine. that was his -- that's what he said on the floor not long ago. wolf blitzer, thank you very much. enjoyed your coverage just last hour. make sure you stay with us because we're going to be all over the story throughout the show. democratic senator ben cardin is going to join me at the half-hour for more perspective on these very fluid debt talks. i want you to listen to this -- >> stepped back, pulle

> reporter: well, you know, they are preparing here, as you pointed out in that interview with gene spurlingg for the emergency, you know, deciding who would get paid and who would not get paid. so that is ongoing. but beyond the scenes, we are told by sources, that democrats and republicans are still engaged in discussions. again, they are not embracing the plans put out there publicly, but they are hoping they can find some kind of proposal that is in the middle somewhere, that is more moderate, that perhaps they can get something done. but, you know, you're bumping up against that august 2nd deadline and it's unclear if there is anything that they can get done in time before august 2nd. >> you know, so interesting. dan, thanks so much. we have these debt commissions every few years. we know we have a debt problem and never given any problem. here we are again. >> a bunch of elder statesmen and women in a room and try to figure out a an answer, get a nice report and then here is what happens. >> the problem is what makes sense and what is expedient are not the same thing and we are in an e