standard & poor's that says even if we raise the debt kreeling if we do not get at our deficit, we could see our aaa credit rating reduced to aa credit rating. so there's pressure to both do something, raise the debt kreeling so we don't default and cut our spending so that we can be on fiscal financial firm footing. >> with that kind of tough talk and that kind of hard stance, where does that leave the democrats? >> mike lee is still talking about cut, cap and balance and is probably the single most radical piece of legislation that i've seen in my lifetime. i think john boehner if he had his way would make a deal of some kind to raise the debt kreeling. he's talking to wall street. he can't educate those republican freshmen. they will just not be educated about this.

>>> questions about the debt kreeling are relentless for the republican presidential candidates. some are cagey, dodging the question whenever they can. others are insistent that they would never vote -- they would never do anything to raise the debt kreel on their watch. -- ceiling on their watch. it's interesting how they're dealing with it. >> that's right. it's easy to make those kinds of statements when you're not in the seat of government, having to make those decisions. but from drawing lines in the sand, wolf, to campaign video slamming any talk of compromise. the republican field for 2012 is jockeying at this point to see who can take the toughest line on the debt ceiling. >> accused by democrats and a few of his republican rivals of taking a low profile on debt talks in washington, mitt romney has now hit the kreeling. -- ceiling. >> the president to agree to cut federal spending cap federal spending and put into place a balanced budget amendment. that's the answer. that's the line in the sand.

it's a deal that would raise the debt kreeling. >> the united states of america doesn't running out without paying the tab. we pay our bills. we meet our obligations. we have never defaulted on our debt. we're not going to do it now. >> this isn't about punishing wemt, it's asking the people who have benefited the most over the last decade to share in the sacrifice. this isn't some wild-eyed socialist position. i mean, this is a position that's being taken by people of both parties and no party. if we only did cuts and did not

polling whether they want the debt kreeling to rise or not they are against a rise in the debt ceiling. >> we are following it. if anything big happens then i will come in. but i think that you have got to be careful here in how you parse this. and we can -- we the american people can strengthen the nation which is of course should be everybody's goal, by being smart. by surgical revenue enhancers and at the same time drastic spending cuts. it can happen if both sides step back, take a deep breath and say we have to get this. president obama every single day $4 billion more debt. every day during his administration. $4 billion more debt. bill: our debt is bigger than

) >> jon: jason, why can't we just in this time of crisis, why can't we just raise the bull (beep) kreel something. >> jon, this isn't an arbitrary figure like the debt ceiling. this is real. and if we can't cut the bull (beep), then there's only one solution. we as a nation need to start replacing (beep) with farts from our butt. >> jon: come on, jason. >> factual assess manys of reality-based truths or farts. we need politicians and journalists willing to call bull (beep) on the bull (beep). >> jon: but you said the farts would come from our butt. >> yes. bold, uncompromising truth telling. butt. why, what did you? oh, farts from our butt. jon, grow up. >> jon: a young man with ambition met an old man at the top asked him if he had a secret and the old man stopped and thought and said: free 'cause that's how it ought to be my brother credit 'cause you'll need a loan for one thing or another score 'cause they break it down to one simple number that you can use dot to take a break because the name is kinda long com in honor of the internet that it's on put it all together at the end of t

may, we would hit the debt kreel, we did, on may 16. since then he's been able to take extraordinary measure, the kinds that other treasury secretaries have been able to take to prolong our provide our borrowing authority. but his capacity to do that is august 2. there's no jaump ramp, no way around that reality. we need to get this done by then. >> if it's not done by then and congress were to pass a stop-gap measure for an extra week, two weeks or even a month, i assume the president under those circumstances to avoid default would accept such a short-term resolution? >> if we have a deal and need to cross the a's and dot the i's and just process things to get legislation through congress, then he would, obviously as he did during the cr negotiations, sign a very short-term extension of the debt ceiling. that is different from what the

. >> 53% are in favor of voting against raising the debt kreel >> about 3% of americans admit to watching porn at work. ( cheers and applause ) >> jon: now that we've baffled you with nonsense we return to our regularly scheduled program unlikable people in make up yell at casey anthony. >> jon: welcome back to the program. as we just saw in the first act, the nation clearly is in dire straits with regards to the debt ceiling crisis. for more on its possible impact we're joined by the daily show's senior economist jason jones. jason, thanks for joining us. ( cheers and applause ) . jason, if the experts are to be believed, inaction on the debt ceiling and deficit reduction would be catastrophic. but the negotiations have thus far seemingly brought out the worst in our political and pundit class. >> that's right. and if the conversation continues this way, we could very well hit the national bull (beep) ceiling. >> jon: that would be catastrophic. >> that's right. as you know, jon, the national bull (beep) ceiling or to put it in layman's terms the amount of bull (beep) people are actually

initially he wanted a clean up or down vote on the debt kreeling.could be downgraded for -- >> the fact of the matter is we were in deep financial trouble when he showed up at the oval office. we've got to be honest about that. >> the buck stops with him quite literally. >> i read through the moody's report cover to cover. it's really incredibly disingenuous to try to reverse things on the president and say because of president obama's inaction on the deficit we're looking at a downgrade. we're looking at a downgrade because people who have no experience in government and don't understand the markets are awilling to allow the full faith and credit of the united states to actually be defaulted upon. these are republican freshmen who were ideologues. they're willing to let it happen. >> they're willing to throw the country financially under the bus for their ideology. >> they're not willing to let the nation default. and when you call these freshmen republicans ideologues -- >> they are. >> or as senator harkin did, that is to ignore the results of no

>> 53% are in favor of voting against raising the debt kreel >> about 3% of americans admit to watching porn at work. ( cheers and applause ) >> jon: now that we've baffled you with nonsense we return to our regularly scheduled program unlikable people in make up yell at casey anthony. [ man ] i got this new citi thankyou card

as a short-term increase in the debt kreeling that he has already threatened to veto. even though republicans are saying that actually it's a two-parter. it's not a short-term plan, the president and the white house, they feel that it is because there isn't a guarantee that a second increase in the debt ceiling would go forward. we would end up in the same point that we are right now. a very protracted, chaotic battle. trying to get the debt ceiling increase when the first short-term one would expire around february or march, wolf? >> walk us through if you can. >> avenue after yet another breakdown in negotiations, now the top republican in the ho us, the top democrat in the senate, they've unveiled duelling plans, their solutions for breaking the log jam and raising the debt ceiling.

. >> 53% are in favor of voting against raising the debt kreel >> about 3% of americans admit to watching porn at work. ( cheers and applause ) >> jon: now that we've baffled you with nonsense we return to our regularly scheduled program unlikable people in make up yell at casey anthony. [ man ] i got this new citi thankyou card and started earning loads of points. you got a weather balloon with points? yes i did. [ man ] points i could use for just about anything. ♪ ♪ there it is. [ man ] so i used mine to get a whole new perspective. ♪ [ male announcer ] the new citi thankyou premier card gives you more ways to earn points. what's your story? citi can help you write it. >> jon: welcome back to the program. as we just saw in the first act, the nation clearly is in dire straits with regards to the debt ceiling crisis. for more on its possible impact we're joined by the daily show's senior economist jason jones. jason, thanks for joining us. ( cheers and applause ) . jason, if the experts are to be believed, inaction on the debt ceiling and deficit reduction would be catastrophic. but the

. >> 52% are in favor of voting against raising the debt kreel >> about 3% of americans admit to watching porn at work. ( applause ) >> jon: now that you've sufficiently baffled you with nonsense we return to our so, what are we going to do with this? i don't know. the usual? [ blower whirring ] sometimes it pays to switch things up. my - what, my hair? no. car insurance. i switched to progressive and they gave me discounts for the time i spent with my old company. saved a bunch. that's a reason to switch. big savings -- it's a good look for you. [ blower whirring ] [blower stops] the safety was off. out there with a better way. now, that's progressive. ( cheers and applause ) welcome back to the program. now as we just saw in the first act, the nation clearly is in dire straits with regard to the debt ceiling crisis. for more on its possible impact we're joined by jason jones. thanks so much for joining us. ( cheers and applause ) jason, if the experts are to be believed inaction on the debt ceiling and deficit reduction would be catastrophic but the negotiations have thus far seemingly

that is what would continue if the debt kreeling is raised, wolf.rkets go down drastically. >> yeah, today, the duj went down about 200 points. but let's talk to clarify this allout default. that's different. >> economists do say that there's a parsing here, and you can make the argument that it is very different. an allout default would come if the u.s. couldn't make the interest payments. you know, a lot of banks hold u.s. debt. those banks might become insolvent. if the treasury securities become unstable, that's really when you've got a problem. it's not necessarily what's going to happen right away if the debt ceiling isn't raised by august 2. >> thank you. the impasse on the debt could dramatically affect military veterans. thousands are staging a march on washington without taking one step. we're going to explain what's going on. and a new ad attacks president obama by making a doomsday prediction about the country's futu future. we're going to show you what's going on. >> announcer: this past year alone there's been a 67% spike in companies

if the debt kreeling is not raised in time, the u.s. could default on some of the payments. that's the last thing we need, recovering from a recession. >> fomdominique strauss-kahn ma face new sexual assault charges even though the case in new york is falling apart. [ male announcer ] to the seekers of things which are one of a kind. the authentic, the rare, the hard to define. to those always searching for what's pure and what's real from we who believe we know just how you feel. haagen-dazs. i've tried it. from we who believe we know just how you feel. but nothing's helped me beat my back pain. then i tried this. it's salonpas. this is the relief i've been looking for. salonpas has 2 powerful pain fighting ingredients that work for up to 12 hours. and my pharmacist told me it's the only otc pain patch approved for sale using the same rigorous clinical testing that's required for prescription pain medications. proven. powerful. safe. salonpas. >> presidential candidates know this holiday is a terrific star spangled backdrop for campaigning. most of the republican contenders

if the debt kreeling is not raised the u.s. could still afford to pay the interest to u.s. creditors, but it would only have enough cash to run about half the government and that would likely also have a negative impact on the rating. >> of there will no way to avoid defaulting on half of our other obligations. we can't sell additional debt because we're up against the debt limit and there won't be enough money to go around. just any of it 100 people and a lifeboat that seats 50. >> now mes financial analysts do not believe we're going to get to that point. the assumption is that something is going to come out of washington. so markets have been relatively tame. they said if you thought the collapse of lehman brothers was something really significant. they said this is going to be nothing by comparison if the debt kreeling is not raised. >> they better do something to avoid that kind of disaster. thanks very much for that report. casey anthony has serious choices to make when she gets out of jail on sunday. she's getting a lot of free advice about lying low and staying safe

it's a deal that would raise the debt kreeling. >> the united states of america doesn't running out withoutaying the tab. we pay our bills. we meet our obligations. we have never defaulted on our debt. we're not going to do it now. >> this isn't about punishing wemt, it's asking the people who have benefited the most over the last decade to share in the sacrifice. this isn't some wild-eyed socialist position. i mean, this is a position that's being taken by people of both parties and no party. if we only did cuts and did not get any rev view to close the gap between how much money is coming in and how much is going out, then a lot of ordinary people would be hurt and the country as a whole would be hurt. and that doesn't make any sense. it's not fair. when asked this, the president suggested using the constitution to push the debt ceiling higher without using congress would be the easy way out. >> it would mean all of these conversations i've had over the last three weeks, i could have been spending time with malia and sasha instead. but that's not how our democracy works. >> and that's not

here's the question, what does it mean that 42% of americans do not want congress to raise the debt kreeling? go to cnn.com/caffertyfile and post a comment on my blog. the public has had enough, wolf. >> yeah, but i'm not sure everybody fully appreciates the consequences of failure by august 2. and you point out well, jack, what the consequences would be. i write about it on my blog at cnn.com/situationroom. it could cause not only a recession even worse than the last 2008-2009 recession, it could cause a whole lot worse than that. unemployment could go up. there would be a huge hidden tax on every american. the consequences -- i think the republican and the democrat you can leadership of the white house, they all fully appreciate it. that's why mitch mcconnell came up with his complicated desperate plan. we'll see if anything -- >> there are no spending cuts in that plan. >> no, no. >> the public wants the government to stop spending money. >> yeah, he would have -- >> they made it clear over and over again. stop spending money. and there are no spending cuts in mcconnell's plan. >> well, t

. >> what about about this amendment, okay, we agree to raise the debt kreeling if you say okay, we'llsaid than done. but good news and progress. the president is coming forward, we should be hearing from him in a matter of minutes, the president is saying to both the leaders from the republican party and also leaders of the democrats in both the house and senate sides look, let's all talk about this. let's come to the table this week to negotiate, but to your point, it's like the pacifics beyond the rhetoric, what's going on? >> it's not about the senate. it's what will pass the house republicans. that's where the fiercest opposition is, that's where the sale has to be made. i'm not sure how you get there. in addition, speaker boehner has come out and said august 2, you know, that is a deadline, but it really doesn't mean the sky is going to fall. it means we pick and choose which bills we're paying and we finance interest debt. but the military is still going to get paid. the country will continue to run. however, this is a huge problem that we as a nation have to address. there are

there's still no deal over the debt kreel, but here's what i can tell you.is expected to meet within an hour now with republican leaders, house republican leaders there at the white house. however, there is a proposal floating around that some say could be a game-changer in this entire standoff. but will all sides agree to it before it's too late? i'll ask democratic senator tom harper about the plan and whether there's some arm twisting perhaps going on behind the scenes. don't miss this. check out the miles per gallon. the length of the power train warranty. and the horsepower. only ram delivers this kind of muscle. that'll thin out the herd real quick. guts. glory. ram. -why? -why? -why? [ female announcer ] we all age differently. roc® multi-correxion 4 zone moisturizer with roc®retinol and antioxidants. lines, wrinkles, and sun damage will fade. roc multi-correxion. correct what ages you. [ male announcer ] time to check your air conditioning? come to meineke now and get a free ac system check and a free cooler with paid ac service. meineke. we have the

now, it is worth noting, brooke, that the debate over the debt kreeling is not about authorizing mores about paying for what we already spent. it's like the government went on a big shopping spree and now it's time to pay the bills, time to pay up. time for washington to get its act together. brooke? >> a lot of people i'm tweeting with know exactly what this is. could you te couch sur .ing. please explain. >> it has 2 million members across many countries. it helps you find a local host and you get to stay with them for free. you set up a page like facebook. you don't necessarily have to stay on a couch. you could stay in a room, but i tell you what, it's staying with a stranger. you're basically knocking on a door saying hey, i'm ehere, i'm ready to stay. >> i've heard about house swapping. that's a deal with a perfect stranger, right? you swap homes with them. but walk into a perfect stranger's house and, you know, catching some z's on the sofa. i don't know about that. what's the police saying? >> they're concerned about safety. what if this person shows up at your house, brooke,

it doesn't concede the debt kreeling will be raced through the next election.t says that's depend dent on a committee moving forward for additional savings and what they might have decided last night, though we'll see, is to add something about the balanced budget into that equation. if you add that the balanced budget amendment has to pass, that's a bridge too far in the senate. martha: there is an indication from capitol hill that the creation of a plan "c," a compromise deal that harry reid and john boehner and mitch mcconnell can agree on is no longer happening this morning. is that your understanding or, you know -- are things shaping up or falling apart? >> don't read too much into people talk or not talking at a particular time of day. there are always conversations going on. and the media tend to put it into sting categories. the talks occurred, the talks are off. it's not quite like this up in capitol hill. you bump into people in the hallway and you talk for a minute, then you make a phone call to somebody. things up here happen differently than in th

>> i don't agree with his agenda, but we're playing with this dwet kreeling with the financial similarityons. the republicans believe the if the will cave because he so often does. if he's not going to cave, he has to signal that. nothing, nothing is more dangerous than suggesting you going to cave, inviting people to push you and push you and then saying now i'm ready to fight. and at that point, there's so much momentum, over we all go. >> the fact is even democrats were afraid he was going to cave when he got involved in the debt ceiling. they're still afraid he's going to do that. why hasn't he pushed republicans harder? >> because first of all, they base that upon what we saw when it came to the tax inkress where you get the compromise in december. the nature of this president is not to get involved in what he considers to be the typical d.c. bickering back and forth. even in the campaign, he sort of operated, sort of above all that. during the campaign, people were saying when are you going to get tougher with senator hillary clinton. he said look, i'm playing this my way. and then

boehner would like to raise the debt kreeling in two separate steps, setting up the possibility we couldbt debate during next year's election season. here we are, at a stalemate as the president said last night. that is the final day the white house says the united states will have enough money to pay off its creditors. but let me say this. this is unchartered territory. economists warn that interest rates are unlikely to jump. it could affect you if you have an a.r.m., an adjustable rate morgan gaj. if you're trying to refinance or sell your house, higher mortgage rates would price some potential buyers totally out of the market. if you're looking to buy a car, a car loan would definitely cost you more. also credit cards, you're going to pay more to keep a balance on your credit cards if this whole thing doesn't happen. and the stock and bond markets. the stock and bond markets could drop. and that means your retirement savings, your mutual fund investments would take a hit. and we've been talking to a lot of you across the country today. and a lot of you are concerned about how a failu