nbc's kricht kristen welker is white house this morning for us.so much going on, but let's start about this decision about president obama to speak now less than 20 minutes from now. what are we expecting to hear? >> reporter: hi there, chris, we're not expecting a large announcement today. we do expect him, though, to put the pressure on here to say that time has run out. we all watched last night the drama that unfolded on capitol hill when speaker boehner tried to wrangle the votes so that he could get his bill through the house. that never happened. they didn't have the vote last night, so he's going to be back trying to wrangle some more votes this morning, but we expect president obama to argue, look, the time has run out. we've got to get something done here. now, because of what happened on the hill last night, a lot of people are arguing that the president and democrats really have the leverage this morning, really have the leverage to say done, and senator reid's plan may just be the best way to do it. as you said, chris, senator reid is

>> kristen welker starting us off at the white house. kristen, thanks. >>> and now again, this deadline is august 2. it's been called the unthinkable, most people think they will somehow hammer out a deal, preventing the government from defaulting on its obligations, but it doesn't hurt to ask at this point, what if they don't? nbc's tom costello is with us from our d.c. newsroom tonight. tom, good evening. >> most financial analysts and economists are in agreement on this issue that if the u.s. were to default on its debt, the fragile economic recovery now underway could be seriously threatened. >> reporter: if the country needed another warning about the risks of not raising the debt ceiling, the nation's top banker today used very simple and direct language. >> i think it would be a calamitous outcome, it would create a very severe financial shock that would have effects not only on the u.s. economy but the global economy. >> reporter: fed chairman ben bernanke warns the shock would immediately cascade from the banking sector and into

nbc's kristen welker is live at the white house with the latest. good evening, kristen. >> reporter: good evening, kate. the race for the white house is heating up on this fourth of july with gop candidates making their case from iowa to new hampshire. former massachusetts governor mitt romney marking independence day in new hampshire, which holds the nation's first primary. he's the current gop front-runner, according to some polls, never hesitating to take shots at the current commander in chief. >> our president has failed us. the recession is deeper because of our president. >> reporter: stumping in the same parade but just a few minutes behind, another former mormon governor, jon huntsman of utah. he's been met with skepticism by some voters for what they see as socially moderate views and for having served as president obama's ambassador to china. today, determination. >> we can win new hampshire. i'm feeling good about this. >> reporter: other gop candidates flocked to iowa, where minnesota representative michele bachmann reached out in clear

nbc's kristen welker was there. good evening, kristen. >> reporter: good evening, brian. president obama said lawmakers need to move out of their comfort zone in terms of dealing with the debt ceiling. he announced he invited congressional leaders of both parties to the white house on thursday to discuss this issue. and he challenged them to get out to leave their ultimatum at the door. >> now, i've heard reports that there may be some in congress who want to do just enough to make sure that america avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit. i don't share that view. >> reporter: now, the president had said that he would agree to cuts in domestic spending with in defense spending and entitlements but said republicans need to come to the table in terms of rolling back tax breaks for wealthy americans and big corporations. to date they said they wouldn't support anything that resembles a tax increase. in fact, this evening, speaker boehner released a statement sayin

joining me now from the white house, kristen welker. do we have kristen welker from the white house? >> hi, there, lawrence. >> hi, there. one of the interesting things the president offered without anyone pushing him to do it is to say i will give you the tick tok. i'm going to give you all the paperwork that shows exactly how this deal is negotiated. we now have a disagreement between the president and speaker boehnor. mr. boehnor saying they had a deal for $800 billion in revenue increases, and the the last minute the president tried to change that to take it to $1.2. the tick tock, the paperwork will tell us who's telling the truth about that. >> that's right, lawrence, a lot of people are anxiously awaiting the paperwork. senior white house officials just briefed us on more reasons why these talks may have broken down. to your point, both sides agreed toer $800 billion in new tax revenue. let the bush tax g cuts expire, then the issue of extra $400 billion. speaker boehnor said that was a new figure, senior white house officials sa

we want to bring in kristen welker at the white house. kristen, jay carney, the white house press secretary says that he does not believe that the default will happen. as we hear from the two sides both agreeing that the debt limit needs to be raised, it is inevitab inevitable. >> it is the one thing that all sides can agree on here, and you are right, the press secretary jay carney says he has complete faith that the debt ceiling will be raised by next week, but the big question that everybody is asking is how is this going to happen, because it seems that all sides are digging in the heels and the white house continuing to insist that the president would veto a short term plan which is that plan put forth by speaker boehner that is as kelly mentioned would increase the debt ceiling in increments for the first time for six months, and press secretary jay carney, again, today saying that the president would veto that if it made it to his desk, and carney saying that bill would doubtfully pass the senate, but the president said in the rema

>> kristen welker at the white house, kristen, thank you. >>> joining me now is republican senator fromissouri roy blunt. sir, great to have you with us today. >> nice to be here, thomas. >> democrats are accusing speaker john boehner of not having control of his own party this, split betweenç the republican party and the tea partiers. take a listen to what senator chuck schumer had to say earlier today. >> instead of leading the house, speaker boehner is being led by a fringe in his caucus that thinks default is okay. well, speaker boehner should not and we cannot let a small block of house republicans lead the whole nation off a cliff. >> sir, we spoke earlier about a letter that's been sent by tea party senators asking their house colleagues not to support boehner's plan. do you have faith in what speaker is putting together in the plan that he wants to present? >> well, you know, that's really up to the house to decide if they can pass that plan or not. i do know when i was the whip in the house, i would have been pretty upset if a bunch of senators sent a letter over saying don't

nbc's kristen welker has more on this from the white house. >> good morning to, you you matt. with less than three weeks to resolve this issue, president obama told congress aol leaders it's decision time. he has given them a day off, told them to talk to their caucuses and figure out a path forward. for the first time this week there will be no face-to-face meetings at the white house today. the talks are stuck. the president wants a big deficit reduction plan that would also raise revenue by rolling back hacked credits for wealthy americans and large corporations. republicans are holding the line say nothing new taxes. >> that's a place where i don't believe a single republican in the house or senate are willing to go. >> reporter: fearing the talks might fall apart, senate minority leader mitch mcconnell and majority leader harry reid are working on a backup plan based on a proposal mcconnell presented earlier this week which would allow the president to raise the debt ceiling in three increments through the 2012 election. >> hopefully we can come up with this big robust de

and it's where we begin tonight at the white house with nbc's kristen welker. kristen, good evening. >> reporter: good evening, brian. well, president obama emerged after talks with congressional leaders saying both sides are still deadlocked but determined to get a deal done very soon. lawmakers will work through the weekend and meet with the president again on sunday. the president and congressional leaders come to the table to hammer out a deal on the debt ceiling. if a deal isn't reached by august 2, economists say the nation will default on its loans. mr. obama called the meeting very constructive but admitted hard work remains. >> i want to emphasize that nothing is agreed to until everything is agreed to and the parties are still far apart on a wide range of issues. >> reporter: administration officials say the president is pushing for a big deal, somewhere in the ballpark of $4 trillion in deficit reductions over the next decade, nearly double the $2 trillion that had been at the center of talks for weeks. >> everybody acknowledges there's going to be pa

>> kristen welker at the white house for us. thanks. >>> joining me now is republican committee national chairman reince priebus, and kristen is talk about what is happening with these talks at the white house with john boehner calling them productive and the president hopeful about getting it done by the looming datef of august 2nd which is the deadline for the u.s. to default on the dets. in your estimation, what do you think will happen? can we make it to that date and get something moved to the middle? a compromise before that? >> well, i mean, obviously, as you know, and i think that youm -- you almost said it yourself that the devil is in the details, of course, and we don't know what the details are, but i can tell you this that the republicans are not going to go along with tax increases, and speaker boehner is going to talk about the tax reform. that is a lot different than tax increases, so i think that we need to make sure that is very clear. i think that at the end of the day, americans in the country are starving for

>> nbc's kristen welker at the white house. kristen, thanks. >>> republican senator lindsey graham joins us now from south carolina. thanks for joining us. >> thanks for having me. >> you said that if we don't act soon the u.s. will have a financial crisis as bad as greece, and what is your reaction to what happened in the senate? >> i was very disappointed. if this is not worthy of debate, what would be? if you don't put forth the cap, cut and balance and then to address the fundamental problem. we are not in jeopardy of becoming greece because we don't raise the debt ceiling. we are in jeopardy of becoming greece because we have 70% of the debt to gdp is going to be 100 in little over a decade, so we have to do more than raise the debt ceiling. we have got to address what got us into debt, and if you don't like cut, cap and balance come up with a plan of your own. i believe that the only solution to this problem is not political rhetoric between politicians and parties. it is a structural change, a balanced budget amendment to

. >> nbc's kristen welker on the north lawn this morning. good morning. >> reporter: good morning, jeff. jay carney just wrapped up a news conference here and said don't expect a final deal to be done during that meeting on thursday. but it is a step forward according to white house officials. when the president came out and spoke, he said he doesn't want to see a short term deal. he wants to see a big deal done which is basically being defined as something larger than 2 $11aa half -- $2.5 trillion in cuts. he said he would agree to cuts in defense spending, domestic spending and also in entitlements. he said that republicans have to come to the table in terms of rolling back tax breaks for wealthier americans and for larger corporations. right after he had spoken those words, jeff, republicans really came out with some tough talk. speaker boehner came out and said, look, he's happy to discuss the debt ceiling issue. he says an increase in taxes would be bad for jobs and just won't pass the house and just earlier today, senator jim demint al

>> nbc's kristen welker. kristen, thank you.o luke russert. >>> coming up, a preview of tomorrow's events and what it means for the ongoing debt debate. don't go anywhere. we're back after this. it's all the same. nothing changes. then try this. freestyle lite® blood glucose test strip. sure, but it's not gonna-- [beep] wow. yep, that's the patented freestyle zipwik™ design. did it just-- [both] target the blood? yeah, drew it right in. the test starts fast. you need just a third the blood of one touch.® that is different. so freestyle lite test strips make testing... easy? easy. great. call or click-- we'll send you strips and a meter, free. free is good. freestyle lite test strips. call or click today. fiber one. uh, forgot jack's cereal. [ jack ] what's for breakfast? um... try the number one! [ jack ] yeah, this is pretty good. [ male announcer ] half a day's worth of fiber. fiber one. of these abandoned racetracks in america today. automotive performance is gone. and all we have left are fallen leaves and broken dreams. oh.

>> kristen welker is live for us this morning tracking the latest developments. kristen, we're hearing about these multiple plans, but clearly no real path, again, to a possible deal. where do we stand right now as we start our new workweek? >> well, that's absolutely right. the fact that there are these two separate plans that are emother-in-lawinging is emblem attic of how deadlocked and difficult this entire process has been all along. just to give you a little bit more information about those two separate plans under harry reid's plan, you would see abou8 process. the first part, according to the speaker, would bring about $800 billion in savings, and would increase the debt ceiling through the next year. then after that you would call for a bipartisan commission to come back to the table and try to identify another $1.6 trillion in cuts through things like changes to the tax code as well as reforming entitlements, but the problem with that, according to president obama, the reason why he won't accept it is because it goes through the election year. president

. >> joining me now is nbc's kristen welker. what's the mood like at the white house today as so much is happening around it? >> reporter: it's quite focused here at the white house. there are no events on the public schedule. meetings with senior officials are going on right now and officials say that the president is in contact with congressional leaders on the hill. he has his hands in this, trying to make sure that a compromise does get completed by that august 2nd deadline. one of the things that's driving this as luke just mentioned is the clock. this week, we had a close eye on the markets. we saw them dip and we got some troubling economic news on friday, showing the economy grew only 1.3%. and then you have the credit agencies threatening to downgrade the credit of the united states. so there is a lot of pressure on everyone involved, because if this debt limit doesn't get increased in time, timothy geithner has warned we will default on our loans for the first time in history. if that happens, the blame will go all aro

kristen welker, always great to see you.nk you. >> thank you, thomas. >>> and joining me now is editor of "time" magazine and he writes about the top red herrings of the debt ceiling debate to reflect political realities. thank you, michael, for joining us, because i believe there are a lot of red herrings going on in washington, d.c. when we get to thisthis. number one that goes back to president obama, and you explain? >> well, paul ryan put through a budget earlier in the spring that would have reduced drastically the cost of medicare and turned it into a voucher program. the republicans were upset that the president did not counter with the proposal at that time, and continued into the debt ceiling debate. but this is different, because the president is negotiating behind the scenes and put forward a number of proposal as and again public with the proposals he is willing to accept and endorsed the reid plan and said good things about the gang of six plan, but the republicans because they are the legislative body here in

and kristen welker is at the white house and luke russert at capitol hill. we have learned of a veto threat against the boehner bill, and a major development after the president's talk of compromise yesterday, and was this expected? >> well, you know, martin, this was a bit of a preemptive strike, if you will. the president has been saying for weeks that he won't support a short-term bill like the one that speaker boehner has proposed under speaker boehner's proposal and increase the debt limit for six months and then lawmakers have to come back to the issue in the middle of an election year, and the president has said he won't support a plan like that, and he says it is unstable for the economy, and speaker boehner has accused him of politics for that reason. this is not exactly a surprise, but what is interesting is that last night when the president spoke, in the remarks to the nation, he didn't use the term veto. he did come out and say he does not support speaker boehner's plan, but he never used the term veto, so a lot of people were questioning today

kristen welker is live for us at the white house this morning. we do know, kristen, that technically the heat is on, coming from all directions there. where do we stand right now as the white house is speaking, has it done anything to calm the president's base when it comes to these negotiations? >> reporter: hi there, thomas. even though white house speaker boehner denying these reports that they are getting close to a deal, there certainly is a lot of chatter around here about a potential big deal, something that would reduce the deficit by $3 to $4 trillion over the next decade and under that plan you would see some cuts to discretionary spending right up front. then changes to entitlements, things like medicare and social security kick in a little later and also some changes to the tax code that would kick in later, things like rolling back tax breaks for wealthy americans and large corporations. now we're also hearing about the possibility of getting rid of that deduction for home mortgage interest. here's what's interesting, thomas. to your

we are joined from kristen welker from the white house briefing room, also luke russert who is on capitol on when and why the president decided to address the nation tonight? >> hi, there, lawrence, well, white house officials tell me the president wanted to address the nation tonight because this is really a pivotal moment. they say we are almost exactly one week out from the august 2nd deadline. i asked when the decision was made to make the speech this evening, the president has been considering for quite sometime, but again, because we are about one week out, he wanted it to be tonight. you're really going to hear him speak to the american people tonight. we've heard him address the issue publicly several times, lawrence, but tonight he's going to speak to the american people, he's going to really try to break this down, this is going to be debt limit 101. he's going to explain why it is so important to increase the debt limit. timothy geithner said the nation will default for the first time in history if we don't increase the debt limit. you're going to hear him address the american

nbc's kristen welker is live at the white house. kristen, the president is behind this deal just by saying, as we just heard, he's not fully behind everything. >> reporter: that's right, richard. as the president pointed out in his remarks yesterday, he feels as though this gang of six plan is really broadly consistent with his vision for getting a grand deal passed. it also at this point seems to have bipartisan support. about 43 senators making positive comments about this gang of six plan. 43 senators from both parties. so here's what the would do. it would decrease the federal deficit by about $4 trillion over the next decade. it could also call for an overhaul of social security and medicare and it would call for rewriting the tax code, so some people might see their taxes decrease. but overall the aim is to generate about a trillion dollars in new tax revenue. that's what the deal would do. here's the problem with it. according to some lawmakers, this plan is really just an outline right now so there's just not enough time to g

kristen welker from the white house. thanks. next joining us is kelly o'connell at capitol hill for us. kelly, explain what happens next after the senate votes this bill down and specifically, jay carney referring to what some called a hail mary pass with the grand bargain. >> well, we can't presume what happens when the house votes, because they say that momentum is moving in their direction and take it for one step at a time and assume for the moment that it does in fact pass the house, and that is a big deal in and of itself, because there is a great deal of opposition as you know, and we heard from speaker boehner and the leadership team moments ago saying they are imploring the members to get behind this. they believe it is the best chance, and what they have kind of given to entice some of the most conservative members on board is a separate vote tomorrow unrelated to what we are talking about tomorrow which would deal with a balanced budget amendment which is a huge sticking point for conservatives who believe that the on

joining me live from the white house is nbc's kristen welker. kristen, we're looking at live pictures from the east room. give us a little bit of information on why the president decided to take this route. >> hi there, tamron. well, this is the way according to the white house for the president to have a realtime conversation with people out there. this is his way of talking to them about jobs, about the economy, about that 9.1% unemployment rate. so this is the way for the president to reach out to a lot of people over a short period of time. here's how it's going to work. it's going to last for about an hour. as you said, it will be moderated by twitter co-founder jack dorsey. people have been sending in their questions all week long. 140 characters, which is what happens per twitter, the president, however, will be able to respond much longer than 140 characters. he'll be giving verbal responses and then staffers will tweet out sort of condensed versions of his responses. tamron? >> all right, kristen. already gone through a list of some of t

. >> joining me now is msnbc's kristen welker and richard wolffe back with me again. sident's agenda today? >> there, richard. no public events on his schedule today, but white house officials say he's quite busy monitoring the situation and in constant contact with lawmakers on the hill. they won't tell us who he's speaking to specifically, but say he's very much in contact with everyone. here's the latest. as you know, leader boehner's plan was voted through the house last night, and then it was tabled in the senate. so now all of the focus is on harry reid, and his plan, which interestingly these two plans just aren't that different. under majority leader reid's plan, you would see the debt limit increase through 2013. under boehner's plan, you would see it increase for about six months. both include spending cuts. the big difference is the timing and boehner's plan comes with a balanced budget amendment. what we're expecting to see ultimately is a compromise bill here between these two plans, and that's what's being worked on behind the scenes right now. harry reid

. >> nbc's kristen welker joins us live from the white house. kristen, as we listen to what the president said, we can look at it two different ways. one that was calming, one th it was understated in terms of the importance of jobs. the republicans are saying we need more. >> reporter: that's absolutely right. the president said that we have a long way to go. we have a lot of work to do here. you heard him express some disappointment in those remarks. as you say, richard, he's trying to stay somewhat positive here. he pointed to the fact that the economy has added over two million jobs during the past 15 months or so. he brought up the fact that head winds have really contributed to what we're seeing here in these job numbers. those head winds include high gas prices and the crisis in jap japan. this is an argument we have heard the white house make several times. he said that congress can take some action right now to create job growth including passing patent reform, passing free trade agreements and passing a payroll tax cut. as you say, repu

. >> kristen welker, thank you so much.to bring in republican congressman bob dole and democratic congressman, cedric richmond. thank you for being with us. congressman dole, you were one of those that had pizza with the gang of six plan last night. could you support it? >> we didn't talk about the gang of six plan. what i like is it's talking about big bold bipartisan plan, a lot of details not out about it. it does talk about 3$3.7 trillin worth of spending cuts over the next ten years and talks about tax reform, i think is critically necessary, talks about lowering the rate, you heard 29%, again, allowing corporations to be more competitive in the global marketplace. these are things we want to accomplish and a big bold bipartisan plan is one we're looking for. >> congressman richmond, is that something you can get on board with? >> we're still looking at the plan and still concerns about reforms to social security that our seniors would receive. i think the framework and concept is something the american people want, wh

joining me now is kristen welker and luke russert. tell us what's going on with the senate. >> reporter: not much of an cup date. senators are going to the floor, speaking out in favor of a debt limit extension, pretty much all agree needs to be done. exactly what the path is to get there they have different views. we can tell you that it seems negotiations are ongoing for a few things. mitch mcconnell has been talking to vice president joe biden throughout the day about a possible deal. what we're hearing from democrats is this idea they are holding strong on getting any definite extension through 2012. that's a position that has been really forced upon the republicans. republicans have said there will be no revenue. in terms of sprinkle of information that's what we're hearing. they are looking at a trigger. what could a trigger be after the first extension of the debt ceiling and there's this bipartisan commission we heard about in the boehner bill and reid bill. what would be the trigger to make sure the debt limit goes through 20

nbc kristen welker is outside the white house awaiting reaction there and our mont mega panel on dutydebt ceiling two step, which we're doing instead of worries about jobs orring in policy or anything like that, because you know, while we worry about having people work or not wasting energy, blowing money, we can just call each other names in a political, two-party political system that's kind of stupid? anyway, tim carney is here. i'm excited about that.

nbc's kristen welker is at the white house and let's also bring in luke russert on capitol hill. risten, we know both sides are crafting their budget deals, both trying to take the high road, but are there any signs that the differences between the two sides are narrowing, and does it seem as though they may conflate these two plans? >> reporter: well, at this point we don't have any indication that they are going to conflate the two plans. we should say there are, of course, a lot of meetings going on behind closed doors. i just came from the briefing with white house press secretary jay carney who reiterated that point. there are a lot of meetings going on right now that aren't being read out necessarily to the public, but at this point in time, at least publicly, it seems these two sides are still very far apart, as you said. there's the two bills that we have before us, and speaker boehner's bill was supposed to be voted on today, martin, but as you said it's going to be voted on tomorrow due to those issues that the cbo brought up. he's also trying to rally the troops, as you

. >> nbc's kristen welker is live for us at the white house this morning. kristen, bring us up to speed, the latest on any negotiations between both parties and the republicans' push for the balanced budget amendment. >> reporter: that's right. hi there, thomas. staffers were working throughout the weekend to try to get something accomplished on this issue. there are really two tracks that are emerging right now. that first one that you mentioned, the cut, cap and balance that's really sort of the private plan that we're seeing emerge. the house will vote on it tomorrow. cap spending at less than 20% of the nation's gdp and it also involves a balanced budget amendment. it is probably going to pass through the house, unlikely to pass through the senate. but what it does, it allows republicans to get on the record that they want to see a balanced budget amendment, potentially opening wait for compromise a little later on in the week, we'll have to see. but then the more private plan that's emerging is the one also that you mentioned, thomas, which was put fort

kristen welker is at the white house. what is the white house saying about the reports i was just mentioning that social security, medicare and medicaid could be on the table here? >> reporter: well, white house press secretary jay carney just released a statement a short time ago saying there is no news. the white house's stance is essentially the president has long said he would support small cuts to those entitlement programs that you mentioned, to social security, medicare and medicaid, as long as it didn't include an overhaul of those entitlement programs. the white house is saying look, there's really nothing new here, we would be open to some small changes that would make those entitlement programs more efficient. having said that, some folks on the hill tell me that there is a scenario by which there would be some structural changes and that that scenario is potentially going to be discussed during these talks today. we'll have to see. what we can tell you is that the president is expected to really ramp up his ef

. >> nbc's kristen welker is at the white house. nbc's kelly o'donnell is on capitol hill. kelly, some tough words from john boehner for his house republicans today. >> reporter: well, contessa, what happens is the house republicans meet they do that on a daily basis and today it took on the air of a locker room coach trying to get his team on board or maybe at a sales meeting trying to bump up the in your opinions. it had that kind of quality from what we're hearing. in political terms boehner is trying to tell his member this is the bill we've got. i need you behind me in order to get the job done and essentially to get in line. that's the tone of what we're told was coming outs of that meeting. why is that so important? because he knows that the numbers needed to get this bill across the finish line just aren't there. and what's unusual in this kind of crisis you have some of the newest members of the house who have come out to say they don't want to support it. really tipping the way things usually work in washington where the newest members sort of get in line behind t

kristen welker, nbc white house correspondent, is on the north lawn. we will be talking to republicans and democrats from the hill in a moment but first, your take from this, because it sounds as though they are finally really negotiating. they will be meeting again on sunday, we gather. >> reporter: that's right, andrea. i think the take-home point here, what's interesting about what the president just said, is that congressional leaders will be meeting throughout the weekend and then they are going to meet again on sunday and the president said hopefully at that point, they can begin the process of the hard bargaining that needs to happen to actually get a deal done. what we're hearing is that there may be some real progress being made here. you also heard the president say that any deal would likely involve some political pain on both sides. so what does that mean. we have been talking a lot about taxes. president obama, democrats saying they would like to see a roll-back of some tax credits for wealthier americans, for larger corporations. republic

nbc's kristen welker outside the white house. what happens from here? >> reporter: hi there, dylan.er boehner just came out with his plan. president obama has been adamant about the fact he's not going to get behind a plan that is short term, as you just heard speaker boehner say. the plan would be two parts. so under the president's definition right now it just doesn't meet his standards, because it doesn't get you through the 2012 election. speaker boehner has accused the president of playing politics with the issue. the president says that's not the case. he says he just believes it would be too unstable for the economy and in his remarks this afternoon speaker boehner, you heard him say, said the proce president would be irresponsible to vetoç his plan. one interesting development, dylan. senator harry reid also came out way plan. under his plan it would increase the debt ceiling but also reduce deficits by about $2.7 trillion over the next decade. you'd see things slashed like defense cuts. and one of the main ways that they would get savings there is through scaling back the

. >> nbc's kristen welker's at the white house now. what's the white house's reaction to moody's suggestion? >> reporter: hi there, contessa. the white house isn't commenting politicsy yet about the moody's suggestion. we expect they will by the end of the day. they're saying the president is pushing to get a big deal done to get the nation back on its proper financial track. we can tell you there are two main plans that are emerging. a public plan and private plan. talk about the public plan, the house is going to vote on that tomorrow. it would cut the deficit, cap spending by about 18% of the nation's gdp and also require congress to pass a balanced budget amendment in order to increase the debt ceiling. so house is going to vote on that tomorrow. it is likely it will pass the house. but it's unlikely it will pass the democratically led senate. the point of this is really to allow republicans to get on the record here and say, look, we would like to see a balanced budget amendment if we're going to increase the debt ceiling might he

. >> we begin with kristen welker and luke russert on capitol hill. luke, what kind of response are lawmakers getting today on capitol hill? >> quite a big one, contessa. we can report that earlier this morning the house call center the communication arm of the house in charge of all the house telephones sent out an email to members saying quote, due to the high volume of external calls to the house telephone circuits they are near capacity. some members should be receiving busy signals. several house websites crashed specifically that of speaker of the house john boehner. the question is whether or not it will transfer into some sort of change of what the status quo is right now and that really is both sides digging in quite rigidly on their plans. democrats supporting harry reid's plan the $2.7 trillion cut across the board. republicans in favor of john boehner's plan, with an extension of the debt limit. that's where both sides are still very much. >> kristen, let's talk with you about where the white house goes from here. can they capitalize on th

>> kristen welker at the white house. let me tell you that nbc news will have live cover rans of president obama's news coverage later this morning. 11:00 eastern. 8:00 a.m. out on the pacific coast. now, here's ann. >>> we are now learning more about the man accused of the brutal kidnapping and killing of an 8-year-old boy here in new york city. the suspect has been ordered to undergo a psychological evaluation. jeff rossen is in brooklyn with the latest on this story. jeff, good morning. >> hi, ann, good morning to you. police are in new york city are baffled by this. here's a man with no criminal record, no evidence of doing this before. he has a pretty good job around here, has good friends, blended into the community. this morning a deeper look inside his mind. his own lawyer says his client hears voices in his head. as fellow prisoners scream from the holding cells, levy aaron walked into court expressionless. this is our first close-up look at the man who police say kidnapped, murdered, and dismembered 8-year-old l

kristen welker is at the white house for us this morning. kristen, good morning. >> good morning to you, savannah. while gop candidates were in high gear this holiday weekend and so were some lawmakers talking about the debt ceiling on this sunday talk shows, to name one, senator john cornyn said there might be room to revise the tax code. still, he insisted no new taxes. the president back from a july 4th weekend at camp david and getting ready for fomore firewos on capitol hill. senators have given up their holiday week to work out a deal to raise the debt ceiling. republicans insisting any agreement cannot include tax increases. >> but the principle of not raising taxes is something that we campaigned on last november, and the results of the election was the american people didn't want their taxes raised. >> reporter: the fiery rhetoric comes after the president last week accused lawmakers of not working hard enough to resolve the issue and arguing any deal should include a repeal of tax breaks for big businesses. >> if everybody else is w

>> kristen welker at the white house.laura ingram is a conservative talk show host and fox news contributor. her latest book is called "of thee i zing." nice to see you. this seems like the case of the debt ceiling the case of the immovable object and unstoppable force. when it comes to taxes, this issue of revenues, is there any way this deal gets done without the republicans compromising somewhat on taxes. >> i certainly hope not because the one thing we do know, matt, and look at the whole landscape, if the republicans hadn't taken the house of representatives last november, we wouldn't even be having a discussion on any spending cuts. the democrats would have already voted to increase the debt ceiling. spending cuts would not be part of the equation. the only reason we're talking about shrinking the size of government, beyond all of these other details, is because the republicans are listening to the people out there in this country and you're angry. these people are angry. >> president obama talked about shared sacri

>> kristen welker, thank you so much. republican senator jim demint of south carolina is author of a new book called "the great american awakening: two years that changed america and washington." good morning. >> ann, it's good to be with you. >> the clock is ticking, senator. what do you think the chances are of a deal in ten days? >> well, it's been frustrating. the president has been talking about this for six months. he agreed six months ago that we couldn't raise taxes in the down economy. now suddenly he says in order to have any cuts, we're going to have to raise taxes. and he still has not given us a proposal that we can accept or reject. it's been frustrating -- >> are you saying here that the chances are very slim? what are you saying here about whether it can be done in ten days, senator? >> ann, i think what you're going to see this week is absent of a president's proposal is -- you'll see republicans in the house and the senate supporting a new bill that will give the president the increase in the debt limit

. >>> with the august 2nd debt ceiling quickly approaching, okay, as nbc kristen welker is live at thescratch their head when they hear that, because it normally has to go through congress. >> reporter: that's right. this is an idea that's being talked about. there's no indication that the president is seriously considering this idea. i think it's an idea being talked about amongst some circles in d.c. some people are wondering if the president can bypass congress and essentially tell the treasury to keep on borrowing if congress can't work out a deal on the debt ceiling by that august 2nd deadline. he would be able to do that through a provision of the 14th anticipated of the constitution which says the public debt of the united states "shall not be questioned." so again, this is just an idea that some people are talking about, wondering if this is a possibility to resolve this issue. however, when senator john cornyn was asked about this issue over the weekend, here's what he had to say. take a listen. >> that's crazy talk. it's not acceptable for congress and the president not to do

nbc's kristen welker is at the white house. >> reporter: when you thought the debt talks couldn't get uglier, they did with both sides admitting the discussion became a bit combative at times. wall street is worried about washington. late wednesday moody's one of the big three credit rating agencies warning it might have to lower the rating if lawmakers don't come to an agreement on raising the debt ceiling. in the statement it said the action was prompted by the possibility that the debt limit woil not be raised in time to prevent a missed payment on u.s. bonds with a small but rising risk of ashort-lived default. economists say if the aaa rating is lowered it will throw the financial markets into chaos and the cost of borrowing would go up to everything from morlts to car loans. ben bernanke warned. >> i think the worst outcome if we don't raise the limit, at some point we default on debt and that would create as i said before, a huge financial calamity. >> reporter: sources say the president knew about the moody's warning as he headed into wednesday meeting which all sides describe

welker is on the white house. luke russert is on capitol hill. kristen this has got to be a frustrating monday for the white house. the president went into the weekend completely frustrated that he said i can't even get a phone call back. how do you move the ball at this point? >> frustration sa good word. most of the action right now is on capitol hill. and one democratic aide who has knowledge of the situation tells me that the white house really believes that the ball is on the other side of pennsylvania avenue right now. they say that this is the congress's job to come one a plan and move the situation forward. having said that the president is still very much involved in these developments. staffers here at the white house in constant contact with the folks of capitol hill. as you said there were meetings over the weekend so they're keeping those lines offense communication open. but you know the president continues to insist he's not going to accept a short-term deal. he remains steadfast in that statement. as you know speaker boehner's proposal po