tv John King USA CNN August 2, 2011 4:00pm-5:00pm PDT
who could imagine second avenue sinatra would blow into town? ♪ and the winter winds they have come and gone ♪ >> reporter: jeanne moos, cnn -- ♪ new york >> you know, americanve "americ talent." i'm wolf blitzer in "the situation room," for our international viewers, "world report" is next, and in north america, "john king, usa" starts right now. >> thanks, wolf, and good evening tonight from the white house. in addition to death and taxes these two things also certain tonight, the government will not default on its obligations when the clock strikes midnight, and the acrimonious debate over taxes, spending and the role of government will continue, despite president obama's signature today on a major debt ceiling and spending compromise. >> everyone's going to have to chip in. it's only fair. that's the principle i'll be fighting for during the next phase of this process. >> that's the president's way of
saying he'll fight for tax increases as the deficit spending debate enters its next chapter. a powerful new special congressional committee charged with finding an additional $1.5 trillion in savings over the next decade. the low-key signing ceremony at the white house came two hours after a 74-26 senate vote that sent the compromise plan from capitol hill to 1600 pennsylvania back after weeks of partisan sniping and jockeying in washington that we know leftmost of you disgusted. a new poll tonight said 77% of americans say congress acted like spoiled children during the debt debate. hard to argue against that? how unusual was the down to the wire debate? you don't see this every day or any day for that matter, this is an announcement from the social security system saying the benefit checks will go on tomorrow and beyond, as we break down the compromise and look ahead, this is more than a little sobering. the dow plummeted 266 points today, its eighth straight day of decline pushed into the
negative by yet another bleak economic report. this one showing a drop in consumer spending. yesterday it was soft manufacturing data and the few days before that anemic growth numbers. it's tough to digest, and after weeks of hearing from president obama that the debt ceiling deal was crucial to remove the cloud of debt from the economy. it was also here today where the president began the next stage of a debate that could well determine whether he serves two terms or gets evicted after one. >> voters may have chosen divided government, but they sure didn't vote for dysfunctional government. they want us to solve problems. they want us to get this economy growing and adding jobs. >> our chief congress -- our chief white house correspondent, jessica yellin, is with us tonight with more on the president's jobs agenda and his jobs dilemma, but first to wall street and the 266-point drop
despite a debt compromise that they had hoped would spark confidence in the market. alison kosik live with more on what troubled the markets. didn't they like the deal or was it something else? >> wall street saw this deal as something that doesn't stimulate economic growth, but the bigger picture about what's going on here is that there's more uncertainty about the economy. it's those weak economic reports that you mentioned at the top. we found out today there was weak consumer spending for the first time in two years. that really sent stocks into a tailspin today. you add that to the weak manufacturing report we got yesterday, and then on friday we got those weak readings on gross domestic product. what it's left is investors wondering where is the growth going to come from especially as we're going to be getting this jobs report from the government on friday. there are a lot of worries on wall street that it's really not going to show up in the numbers, john? >> not all bad news today, alison, one of the concerns during the debt debate is that everybody at home might see their mortgage and interest rates goes up, because if we're downgraded, two of the three big
ratings agencies said no downgrade at least not for now? >> not for now, moody's and fitch said the credit rating can stay at aaa. but moody's put the u.s. on a negative outlook which means the u.s. is on probation. the ratings agencies will keep an eye on what happens in washington, they will hold the lawmakers' feet to the fire, they want them to keep their promises and the spending cuts to take hold. the downgrade it is a process, and the downgrade reality could still become a reality if these cuts really don't go -- come into play, john? >> alison kosik live for us in new york. let's get back to our chief white house correspondent, jessica yellin. the president has an event today, he gets a deal, not exactly what he wanted, but as he's celebrating the signing, he's reminding by the economic data, that the deal might not be enough. what is the challenge, sure, the deficit is a priority, but the jobs much, much more so? >> reporter: there's no question that the jobs issue is the next focus for the white house and it's why they wanted to get this
over with as quickly as possible. the problem is with this much acrimony in washington, how do you get it done? the republican agenda is to cut as much as possible and cut entitlement programs. the president is focused on investments to create jobs. the substance doesn't overlap. then you have the political acrimony on top of it. and the question is, he talks about divided governments versus dysfunctional government, at what point are we just facing dysfunctional government? >> and we go into the super committee which will deal with more deficit cuts and the big question the president did not get revenues, the balance he wanted in round one. how hard will he fight in round two especially if you have the sluggish recovery, the same promise that he went back on twice, could that kick in again as we go through the debate in the next few months? >> reporter: absolutely. yes, they'll push hard for tax revenue in this and to keep the tax cuts for the middle-class, raise them for high income earners. they think because there's a threat at the end of this of punishment for the nation that it could happen, the american
public will push hard, too. but there's a sense that if the taxes aren't part of this deal, then it could be used in the election. this is what democrats are broadly saying, if taxes don't come into play, it will be a campaign issue in the 2012 election and you know it. >> it will be without a doubt, but i'm having a hard time i'm wondering if the president is running a competitive election, vote for me, i want to raise your taxes. >> reporter: it's not raise your taxes but the other guys wanted to slash medicare and social security. >> jess will be back with us a bit later in the program as we dig deeper into the economic numbers. but let's dig in deeper with gloria borger and david gergen. david, you've advised four presidents, if you were in the white house today, you get what you think is good news. the senate acts on the compromise plan, it's not everything you wanted but president obama will not be the first president in history to have the nation default on his watch. at least he can show to the american people, okay, it was messy but we're getting things done and as he's getting ready to sign it he's getting more
evidence that the economy he'll have to run for re-election on is still shaky if not in shambles. >> that's right, john. i must say, i thought that the president would be more celebratory today about the achievement that hez y did get, which was to avoid default. avoid catastrophe, but there was this rather odd juxtaposition, it was almost as if, okay, i signed the bill, it was the first step, but now i'll denounce the agreement. it was almost as if he was sort of disembodied, i'll continue fighting for these increases in taxes, you know, where were you in the last fight? that's what you wanted in the bill and now he is basically saying i'm going to continue to fighting. it sounded more like he was writing an editorial for "the new york times" than a more traditional presidential statement and, of course, he's now got the bad economic news which i think is reinforced in the stock markets today. everybody expected the stock markets to rise on the avoidance of a default, on heading off
catastrophe, at least a 1% or 2% rise and here we've got a 2% drop and it's dramatic and it signals tough times ahead and tonight larry summers who was the president's chief economic adviser as you well know in those early months, in the critical months, has got a piece coming out in the "washington post" saying we'll be very fortunate to get down to 8.5% by the elections of 2012 and indeed there's a one in three chance that we could have a second recession. >> well, with that grim prediction, grim outlook from one of the president's former top advisers, gloria borger, i want you to listen to the president today. he said it's not what he wanted and it's messy, but washington did something. he wants to do more going forward working with a republican house, in which the republicans have veto power, and let's listen to the tone and let's talk about what he can and can't get done. >> we've seen in the past few days that washington has the ability to focus when there's a timer ticking down and when there's a looming disaster.
it shouldn't take the risk of default, the risk of economic catastrophe, to get folks in this town work together and do their jobs. >> is there any reason to believe, gloria borger, that going forward maybe on the payroll tax cut, is there anything else on the president's agenda in which republicans will say, sure, we're with you? >> i think the payroll tax cut is one. i think maybe he can eventually get some trade agreements and, of course, the democrats are going to fight or unemployment insurance, but i think the table has been set for the 2012 campaign, and the reason the president was not exuberant today and david was talking about this is because he took a sharp turn because he had to talk to his democrats and say, look, if i'm willing to do adjustments to entitlements but only if we reform the tax code and we, you know, take -- get rid of the oil and gas subsidies for corporations and we take away the tax breaks for
billionaires, so i think this is a president who's sort of trying to get back on track here. for re-election. but with the market going down today, it was sort of like no good deed goes unpunished at least that's what someone in the administration said to me today. >> and hard, david, for a president to get back on track with this tough economic news, whether he's a democrat or republican, there's not too much a president even in good times doesn't have the best leverage to work the economy, so you can't blame him per se -- >> john, i think that's right. and it's the issue here is that, you know, one of the striking things is he's pushing out for payroll tax extension, cut extension, and he's also pushing for jobless benefits. why in the devil weren't they in the deal? i mean, that's what a lot of his supporters can't understand, they are important to people, why weren't they part of the deal? and that's just sort of -- the frustration that some are feeling on the left and the right is that so many things
were left out of this deal ultimately that could -- and payroll taxes is really one of the essentials. why does he now have to come back and fight for it, why doesn't he get part of the deal to start with? >> he might not have been able to get the deal, i think there was so much worry about the tea party conservatives in the house and that it was so precarious that i think they were -- they were nervous that this delicate balance they had could be upset. and i agree with you, perhaps they should have put it in, but, you know, they were -- they were fighting to keep medicaid cuts out of this. >> david gergen, gloria borger, appreciate your insights. >> but at the end of the day there's the sense that the republicans got a lot. what did the democrats get really as a substantive matter and how do they in effect get rolled by this? and that's why there's such disquiet on the left. i note the president's tried hard. i respect him and i actually agree with him on much of the policy side, but there is a sense out there, especially on the left, that so many things
that were important to democr democratic principles -- >> that's right. >> -- somehow got swept aside and now we got to come back and struggle all over on them. why should you have faith that that's actually going to happen? >> i don't. >> the liberals are sceptical of this playing out for round two. the debt and spending deal is a product of washington political pressures, but might it hurt the very economy the president said we need to help? the next and perhaps most important player in brokering this deal, the senate's top republican member, mitch mcconnell, and the daily pressures he faces from the tea party. [ male announcer ] how can power consumption in china,
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for a 30-tablet free trial offer, go to cialis.com. we're live from the white house tonight. at the beginning of the negotiations over the debt ceiling there was talk of a grand bargain between the democratic president and the republican house speaker john boehner. in the end, though, when things went off the track, the vice president's constant communication with the senate republican leader mitch mcconnell helped get another deal, the final deal, back in the negotiation stage. the president signed that deal today into law, and a bit earlier i talked withenator mccoell about the significant challenges still ahead. so, senator mcconnell, as the president prepared to sign this deal today, he issued a tamet in
the rose garden. i know you agree with the first part. let's listen and then talk about the second part. >> this is, however, just the first step. this compromise requires that both parties work together on a larger plan to cut the deficit, which is important for the long-term health of our economy. and since you can't close the deficit with just spending cuts, we'll need a balanced approach, where everything's on the table. >> by everything on the table, leader mcconnell, you know the president means taxes. will he get to this supercommittee and the next step in deficit reduction, are you open and will you appoint republican senators to that committee who are open to raising taxes? >> well, we're certainly open to tax reform, both the president and ourselves agree that, for example, the corporate tax rate being the highest in the world is -- has got to change. we got to bring it down if we're going to be competitive. we ought to look at the entire tax code, so i think there's no question that the joint committee, a very powerful
committee that's been granted authority to come back to congress with a piece of legislation before thanksgiving to be voted on without amendment before christmas will have the authority to look at both tax reform and entitlement reform, we expect them to do that. and this is a very, very significant effort. this is not a commission. there are no outsiders on it. this is a joint committee of congress with real teeth. >> and if they get hung up on the broad question of tax reform and they can't figure it out in this committee and the deadline is approaching, then the democrats say let's just extend the bush tax cuts for the middle-class, but let them lapse on the earners above $250,000, a position the president has taken before. are you okay with that? >> you're asking me to prejudge what the committee might do in november. obviously i wouldn't be okay with that. but we want to wait and see what they come back with. we've set up this extraordinarily powerful committee, because what we've been doing has led to the debt
and unfunded liabilities. we need to do something different in order to get an outcome on this extremely important subject of deficit and debt. >> i'm getting a lot of incoming, so i assume you're getting it times probably 10 or 20 or 30, about this committee. are members of the senate republicans coming to you and saying, mr. leader, please appoint me, or when they see you in the hall, are they turning and running? >> no, there are a number of our members interested, i mentioned at lunch i would be anxious to talk soon to anybody who might be on the committee and i'm going to announce my appointments soon. >> are you under pressure to this name one of the new tea party members? what kind of lobbying prerk you are you getting? >> the only pressure is self-imposed. i want to get an outcome for the country, and i'm going to put people on there who have a constructive view about getting a result. we need to fix our entitlements, we need to deal with the challenge of tax reform. we need to get an outcome for
the country. >> one of the members of the so-called gang of six which had a plan, a republican on your side, conservative from oklahoma, tom coburn, writes in an op-ed. he doesn't think much of the supercommittee. supporters think the real reform will come when they reduce the deficit, but the enforcement mechanism across-the-board cuts to defense and nondefense programs will never work, congress will easily evade the caps. it sounds to me like maybe senator coburn wants to be on the committee. >> well, there's always skepticism. i think this is the most important thing we could have established to give us a real chance of results. we haven't been able to get results with the current way we've been operating so we're going to try to go at it a different way. i won't declare the committee a failure before it meets. >> in your floor speech before the senate final passage, you turned to some of the new members and the tea party members, and you might not think so, but you won here by changing the debate in washington,
getting washington on a path to a debt reduction path. and i want you to listen to one of your members, she clearly disagrees. >> i'm unable to support a bill that delivers the largest debt ceiling increase in the history of our nation but does very little to confront the underlying problems that have brought us here. >> does she have a point about the underlying problem? >> well, i'm sure kelly would agree with me that the last time the debt ceiling was raised by the democrats by dropping it into obama care and having no spending cuts at all was a lot less desirable than what we've done here. i think the senator is among a number of people in our party in both the house and senate who had hoped to do more and were disappointed that we couldn't. my view is my party controls one house of congress. the senate is a left-of-center senate, the president is a liberal big spender, we wanted
to get as much as we could out of this congress and this senate without raising taxes, and we did that. the days of getting clean debt ceilings are over, the next president, whoever that is, john, in early 2013, is likely going to be asking us to raise the debt ceiling again. it is will generate the same discussion. we'll go after additional spending reductions when that request is made. >> we've talked about this several times since the election. many people in the tea party movement, they don't think so highly of you. they view you as part of what they call the dreaded republican establishment that is too willing to compromise and make deals. do you feel they've learned a bit about your position and your job in the debate over the recent weeks? >> regardless of what they think about me, i love them. without their effort we wouldn't be in a position to begin to change the direction in washington. they helped us have a good election. in which we took the house of representatives and now have a robust minority in the senate. without them, we wouldn't even be having this discussion, in the previous congress it was spend, spend, spend.
no consideration whatsoever for the financial problems the united states has. that's changed. those days are behind us, and we thank the tea party for helping us get in this position. >> let me ask you lastly, sir, about your negotiations with the vice president. this is a deal struck at the white house, but there was a secret channel of communication between you and vice president biden, do you prefer negotiating with him and not the president, and take us inside that. >> i talk with the president as well, but the president has wisely designated the vice president to handle this because he served in the senate and knokno knows a lot us. he's a good negotiator and he and i are accustomed to working together. we were all together, this last weekend, the four of us, and, you know, i think the vice president did a heck of a job representing his point of view. >> the senate republican leader, mitch mcconnell, a key player in this big compromise, we'll keep in touch as this goes forward, thank you. >> thank you, john. the debt ceiling compromise with its spending cuts likely to
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here at the white house today the president signed that debt ceiling agreement into law, so the united states no longer in danger of default. but if this outcome was supposed to calm wallstreet, it didn't work, the dow plunged 266 points today, the eighth day it lost ground, and the s&p 500 is in negative territory for the year. the pimco ceo mohammed alerrian
joins us from newport, california, and chrystia freeland is from new york. the treasury secretary, listen to him, he casts this agreement as critical to injecting some confidence into the private sector. >> let's start with what this deal does. the most important thing is it creates more room for the private sector to grow. because although it locks in some very substantial long-term savings, the near-term cuts are very modest. >> do you see it that way, this deficit reduction plan somehow frees up private sector capital? >> well, certainly the market didn't see it that way and that's why you've had continuous selloffs, and what the market sees, john, are three things. one is incredible dysfunctionality in washington. if we can't sort out a self-inflicted wound, what about all the other challenges that face us? second, the market sees weak growth and the possibility that
growth will get even weaker. and, third, the market recognizes that this agreement has not stopped the rating agencies from putting the aaa rating of the united states on negative outlook as moody's did today. so, what the market is saying is at the end of the day we are worse off than we were before the agreement. >> and so, chrystia, the question then is what now? mohammed mentioned we're in a waiting period tort of purgatory or a waiting period, and ceos have complained we won't hire until we have more certainty about the tax climate, for example? doesn't this deal essentially perpetuate the uncertainty for another four or five or six months as the supercommittee gets into the question in round two will there be tax increases? >> yeah, i think you're absolutely right. i think the uncertainty lasts long longer, i think it lasts through 2013. and getting back to your markets question, you know, i think what the markets really told us today was the markets are more
concerned about the incredibly weak economy than they are about the deficit. and that is a message that i think washington is still not hearing. what has been so frustrating about the whole debt ceiling debate, i think american politicians have been asking the wrong question for right now, and the question for right now should be how do you get the american economy back on its feet? david derggergen said earlier t larry summers has written a piece, which you can read on reuters.com right now, in which he says there's a one in three chance of another recession. that's dreadful. >> and, so, that is dreadful, the prospect of that is dreadful. and when people hear that sometimes they pull back. savings rates are actually going up which sometimes is a good thing, but when you have an economy trying to struggle its way into recovery, you want the consumers if they can to be spending money. what about the psychology right now of the consumer and the ceo? >> they're both weak, and confidence has been hit again by
this whole debacle. we have seen a very unusual fe nom nofe fe phenomenon in the united states which is people are keeping cash in their pockets. businesses with trillions of dollars on their balance sheet cash which they're not spending. we're seeing households that can afford to spend pulling back. this is the phenomenon we call self-insurance and chrystia is absolutely right. uncertainty is so high and there's so much questioning as to whether washington can get its act together, people prefer to self-insure, it makes a lot of sense for an individual but it doesn't make a lot of sense for a society and that's why the risk of recession has gone up. >> so, then, going forward, is there anything this president can do? and i'll broaden the question because we do know the president can't do anything by himself, because the republicans control the house, the senate has veto power, the republicans do, on the republican side, is there
anything washington can do to inspire confidence, the president wants to extend the unemployment tax and the payroll tax, is there anything in there big and bold enough to change the dynamics? >> i don't know if it's big enough or bold enough, but it's something. bob schiller has talked about maybe you should go further than the payroll taxes and create a kitty, he suggested $20 billion, say that businesses that hire new employees should get a $5,000 tax break for each new employee up to the $20 billion. anything at all, i think there should be a lot of creative ideas to get around the problem that mohammed has identify which is actually there's a lot of cash on company balance sheets right now and what people should be focusing on, policymakers should be focusing on, is trying to persuade companies to put that cash to work in the economy. >> and, mohammed, a lot of what you hear from the politicians, 94 give me, but it's rather
predictable. from the democrats you hear the democratic playbook and from the republicans you hear the republican playbook. is there something new, something bold, that maybe if you get everybody into the room, hey, we're in a rut, it's in all of our interests to figure it out, here, try this? >> the framing of the question is very important. the irony about the whole debt issue is it was a means to an end and the end was promoting growth and then it became an end in itself, and that's why it hasn't gotten good results. so, what we need is a proper framing of the question, and the framing of the question is we need to move now to remove structural impediments so this economy can grow again and so this economy can create jobs. we need what we've called the sputnik moment and not what president obama referred to in his state of the union, but something much broader. we need a coordinated approach that deals with four issues -- one is public finance. yes, it's a medium-term issue. let's address it in the medium term. second, the functioning of the
labor market. our labor markets are becoming more and more inflexible. that's really bad news. third, the credit market. bank lending is very uneven. we need to get that in place. and tifinally, the housing mark, until we sort out the housing market, people aren't going to be willing to move. people are going to feel that their main asset is under threat. so, what we need is a framing of the debate in terms of the sputnik moment, and in terms of simultaneous and coordinated action. not the one-off things that end up taking a lot of time and do not make a big difference to the average american. >> and so, chrystia, as we wait and hope for a sputnik moment like that, i want you to listen to the white house budget director jack lewis standing right here, we had a conversation and he was talking about -- i was asking him to explain how did the administration that came into office pushing a stimulus program, spending money to prime the economy was now making the argument that deficit reduction, shrinking government spending, would help the economy? here's his answer. >> i think we've said all along,
you know, that we needed to be in a position to pivot from stimulus to fiscal restraint because the economy can't afford to have the government growing at the rate it was spending at in the -- during the recovery act period. >> is that an economic argument or is that simply a reflection of political reality that this democratic president knows the republicans have way too much power for him to be spending more? >> i hate to say it, but i think it's a highly disingenuous answer, because, of course, you have to pivot and they've been talking about it since the stimulus, but you don't pivot when the economy is still so incredibly weak and the numbers showed us that the economy is still really, really off the edge. so, i don't think this is a pivot of this administration's choosing. this is political forced and if you talk to them privately, they're not happy about the economic outcome and it was reflected in the president's remarks. >> for the millions of americans unemployed or underemployed, it is a sobering moment. we thank you for your time.
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yesterday to vote. her spokeswoman says the congress woman has not made a decision that she's focused on recovering from the near fatal shot to the head several months a g ago. activists report at least 30 people were killed in syria and dozens more wounded and many arrested. the united states secretary-general said the assad has lost sense of humanity. and the saudi group has been hired to build the largest tower in saudi arabia. the construction firm was founded by the father of osama bin laden. the tea party has shown it's a force to be reckoned with in washington. we'll analyze its impacts next. , gas and bloating. with three strains of good bacteria to help balance your colon. you had me at "probiotic." [ female announcer ] phillips' colon health.
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go back to this. we're live at the white house tonight. more of our political coverage in just a moment. we want to alert you, we're not sure exactly what's happening here, so we certainly don't want to alarm you. from time to time packages are left here and they go on to high alert, but the secret service rushed out of the white house moments ago, guns drawn. i covered this building for eight years. you see someone has jumped the fence you see on the video, crawling on the fence. sometimes this happens unfortunately as a stunt. it has happened in the past, something more serious. you see the person has been told by the secret service to lie on the ground there. you see the backpack on the ground there. watch this situation play out. we'll stay with it live.
this is the north side of the white house. that is pennsylvania avenue to the left of your screen through the gate there. again, officers -- uniformed secret service officers coming out of the building and coming out of the compound around here. there were several dozen protesters, which is pretty routine, outside of the fence. they were rushed away by the secret service and they voluntarily went away. no indication that the gentleman who has jumped the fence has anything to do with that. again, this does happen from time to time, somebody trying to make a political statement sometimes. somebody just answering a dare. as you can see right there, face down on the lawn, following the instructions of the secret service. you see the officers approaching now. it's the c.a.t. approaching in the darker uniforms, their dog as well. the dogs are capable of sniffing explosives. now you see if you are ever thinking about this, the inevitable result if you hop
that fence. again we have no indication as to the motivation of the individual who decided to jump the fence here. going to watch this coverage. we're going to watch this unfold. one of the things we don't like to do is give too much coverage to this if it is a political stunt, it would encourage somebody else to do it, so we'll turn away from this for now and come back to our coverage. but we will find out for you exactly what has happened here, if the secret service has information as to why the individual jumped the fence and if it was a political stunt, we'll get more information as it unfolds. breaking news at the white house, you never know what happens if you come down here, but the secret service as always performing quickly and admirably to bring it to a close. the debt ceiling showdown is the biggest proof to date about the policy practice of the tea party gains. in the house and the senate many lawmakers aligned with the tea party voted against the debt ceiling. as he delivered the final
republican senate speech, the gop leader, mitch mcconnell had a message for a movement which he has often been at odds. >> now, i know that for some of our colleagues, reform isn't coming as fast as they would like. and i certainly understand their frustration. i, too, wish we could stand here today and enact something much more ambitious. but i'm encouraged by the thought that these new senators will help lead this fight until we finish the job. and i want to assure you today that although you may not see it this way, you've actually won this debate. >> let's dig deep on the tea party impact with our chief political analyst, gloria borger, and kate sernicke who covers politics for "the new york times" including writing the book "boiling mad, inside tea party america." in washington when you're taking e-mails and taking the twitter feed, some people are surprised and shocked that the tea party lawmakers made such a defining
fight over the debt ceiling. i want to play for a moment an interview i had with jim demint, a hero to the tea party movement. this is the morning after the 2010 midterm elections. if there is a vote in the congress on raising the debt ceiling so that the government can continue to print money and spend money, should republicans say no? >> i think republicans will say no. unless that raising of the debt ceiling is accompanied by some dramatic spending cuts, something that would direct us towards a balanced budget in the future. republicans will not support an increase in the debt limit. >> so, we watched this play out, kate, and a lot of republicans as you heard senator mcconnell say, the tea party republicans, say this isn't good enough, they don't like it. they don't think they've won, but they have changed washington, haven't they? >> absolutely. they've changed the conversation, and i think this is where some of them are claiming victory today. they're saying we have changed the conversation.
months ago, last year, we were not talking about cutting spending and now we are. this has become front and center. democrats and republicans are both talking about this. >> and, gloria, this is one of my favorite illustrations, warren hatch, someone known in the past as, yes, a conservative, but someone that cut a lot of deals with late senator ted kennedy, cut a deal with a lot of democrats. he gave a speech, 1286 words explaining why he would vote no. let's listen just a bit. >> but my opposition is not owing to the failure of the conservatives or the republican leadership in the house and senate, it's owing what's clearly amounting to the failed presidency of president obama. >> he could have saved a few words, gloria, right? but i saw what happened to my friend robert bennett in utah last year? >> exactly. he's afraid of being primaried by a republican house member who is a prominent tea party person, and i think you have a lot of republicans like that. olympia snowe, for example, of maine who voted to raise the debt ceiling, held out until the
last minute after consulting with republican leaders because it's very clear that she is feeling -- feeling that pressure as well. so, you know, look, they've had their impact. and in a way, they got the best of both worlds, because the debt ceiling was raised, so independent voters will not think it was too irresponsible. but they made their mark, which was that we have now entered an era of fiscal restraint rather than stimulus spending. >> and, kate, the question now is, what about in 2012? it's hard to carry a movement, the power, the energy over a second time around. here's an e-mail the tea party essentially threatening senator snowe for that vote gloria just talked about. what's your early sense of how many -- last time we watched them go after establishment republicans, push the envelope, do we get a sense the zeal continues? >> i think the zeal certainly continues and that's why you see senator hatch coming out and making the comments he did. we also see a tea party challenge to senator richard
lugar, another long-standing republican senator, i think the zeal is there. whether the organization is there is a bigger question. we saw this with the debt ceiling talks. you couldn't -- the tea party was not a monolith, yes, there were tea party lawmakers who were saying we'll not support any increase in the debt ceiling but there were a lot of tea party voters and supporters who said we want them said, we want them to come to some kind of agreement. i think those are part of the group that your poll said earlier that republicans have acted irresponsibly. >> kate, glar aros gloria, we a that. why this was so important to candidate obama and why 2012 will be a bumpy road. vroom
security lockdown at a white house. a man jumped over the fence with that backpack. that is a live shot. he's been taken into custody. there's a lockdown until the bomb squad can come in and check that backpack out to make sure there is no danger. we're waiting for that procedure to take place here at the white house. as we do, we'll keep you updated. the suspect taken into custody this on a day in which the president signed into law the debt compromise agreement. it's a deal that didn't give him everything he wanted but a deal very important to the president and candidate obama.
there's no doubt this compromise on the debt ceiling the president signed today fell far short of what he initially wanted. remember at the beginning he wanted a grand compromise, $4 trillion over ten years. he got a little more than half that. he insisted at the beginning one debt ceiling increase. this compromise a two-tier program. and the president also wanted what he calls a balanced approach, meaning he wanted tax increases guaranteed as part of this deal. there is no guarantee of tax increases in the deal the president signed into law. yet despite making so many compromises himself, the president says, not perfect but good enough for now. >> this is, however, just the first step. this compromise requires that both parties work together on a larger plan to cut the deficit, which is important for the long-term health of our economy. and since you can't close the deficit with just spending cuts, we'll need a balanced approach where everything is on the table. >> it is the health of the long-term economy, the struggles in the long-term economy, that
make the president worry, not just as president but as a candidate for reelection. because most of the numbers coming out have been stunning when you look at the historical data about reelection. this is what the government has told us in recent months about the growth of the economy, gdp. got a little better. then look at this, flat had-lines, last two quarters down here, anemic territory. a president to be reelected needs to be up here, history would tell you, to be confident of reelection. the president obviously at the moment well below that. that's just one of the numbing statistics. also the unemployment rate. when the stimulus program passed, the administration said the unemployment would peak at 8.1%. at 9.2% today we'll get another report from the government on friday on this front. since fdr decades ago, no one came into reelection with a rate higher than ser7.2%. this president trying to defy that history. if the unemployment rate is up,
that's obvious what's up with job growth. watch the job growth in the obama administration. in the negative because of the recession. then up and down. this is the most troubling part in recent months. again, we'll learn more on friday about last month. to be reelected, a president needs to be up here according to all the historical data. president obama at the moment well below that yet another troubling sign for the obama reelection campaign. also, beyond the economic statistics, your psychology about the economy, consumer confidence is very important in hue you vote. may, june, july, this the university of michigan study. you see the drop right here, 63.8%. to be reelected, in recent years, any president above 95% gets a second term. down below you're in the dicey territory, which is exactly where president obama finds himself right now. let's just recap where we are so far when you go through the economic statistics, gdp, growth in the economy, nowhere near where the president needs to be. growth job growth, again well
below where the president needs to be. how you feel, your attitude about the economy, also way down herement as the president signed this deal today, he made the pivot to the issue he knows is number one -- jobs. >> what can we do to help the father looking for work? what are we going to do for the single mom who's seen her hours cut back at the hospital? what are we going to do to make it easier for businesses to put up that "now hiring" sign? >> here's one of the things the president is trying most to change as we move this off the screen, how you feel about the state of the country, wrong track, right track, satisfied or dissatisfied? 79% of americans in a pew center study say they're dissatisfied with the direction of the country. eight in ten americans think the country is headed in a wrong direction. hard to get reelected when so much of the country is in a funk. the president needs to change that. we also know that the president has been sliding among white voters. 2008, about an even split, republicans with an edge but a slight edge. a new pew center study says 52%
of whites now say they plan to vote republican, 39% democrat. that's one big drop the president faces when he looks it at the electoral college map. that's one alarming sign. here is another one. this one is incredibly important to the white house. march, may, july. look at that drop, 31% of independents now say they would like to see president obama reelected. well, you can see the drop anyway. here's where it's important. inty t2008, he had 52% support among dependents, a 21% drop. the president cannot afford that come november 2012, which is again why he prepared to sign the deal today the president's message aimed right at voters in the middle saying they want washington to get things done. >> so voters may have chosen divided government, but they sure didn't vote for dysfunctional government. they want us to solve problems. they want us to get this economy growing and adding jobs. >> a reminder there of the
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