crisis in syria. it could be the most significant development since the uprising began a year ago. at this hour, it is reported that a possible peace deal is in the works. this is one that has the backing of arab states, it's a draft resolution being circulated by saudi arabia which condemned the actions in syria today. we're getting word this is making its way through the u.n. general assembly. we're trying to confirm this report. we'll have an update as soon as possible. once again, breaking news on a possible peace plan for syria. much more on this as the bottom of the hour. now to our other top story. groundhog day, failure on repeat. the president is going put out his budget on monday. we know what's in it. it's going to let the bush tax cuts expire on people make being over $250,000 a year. excuse me. impose a minimum effective tack rate on millionaires. make some cuts to medicare and run a trillion dollar deficit. it's pretty much like the budget he passed last year which didn't pass. yes, i know, i'm coughing, but i'm pausing here for effect. it's been 1,017 days since the united states of america has had a budget passed by the senate. this is embarrassing. it's part of why we got downgraded from our top notch aaa credit rating. maybe you blame the president for putting out essentially the same budget as last year that didn't pass then and it wasn't an election year. maybe you blame republicans for not compromising it. the bottom line is they are all playing politics. in an election year digging their heels in to score points with voters. in am meantime, we're all getting hurt as confidence in america's financial prowess and leadership falters. good to have both of you with us. let me start with you dan, looking through this, some of the numbers we have, $1.3 trillion deficit in fiscal 2012. $901 billion in fiscal 2013. we're going have cuts in medicare and medicaid, as we pointed out. bush tax cuts go away and the buffet tax on millionaires is added. >> two things that you should understand. first, when politicians talk about budget cuts they are using the washington math definition which is if you increase spending 6% instead of 8% you get to claim a 2% cut. medicare is going up under this budget. medicaid is going up under this budget. they are all increasing. the second thing to understand is that all he's doing on tax policy is playing the same class warfare game he played last year. we'll raise taxes on the rich. that's obviously not going to fly with the u.s. house, and this whole buffett tax is basically a turbo charged version of the alternative minimum tax which everybody agrees is probably the worst feature of our tax code. i agree completely this is nothing but politics and of course, we'll get some politics also from the republicans on the hill. >> maria, we get politics from both sides here. 1,017 days since we had a real budget in this country, it's appalling when you think about it from that perspective, to both sides. >> i think that's true, erin. what you have to take into consideration here is what are american families going through today? what we're hearing from american families, middle class families, workers is that they want fairness in the budget. they want fairness in the tax code. and, yes, both sides have been playing politics, that's true. what this president is focused on is how you grow the economy, how do you focus on fairness for american families when you see poll after poll these same families are saying that they do agree that the rich should be paying a little bit more in taxes. you have buffett saying it. you have bill gates saying it. you have bill clinton saying it. you have all sorts of rich men saying they should be paying more. when you also look at the polls, they also think it's republicans, the ones that have been obstructionist in trying to get to a place where we have growth, where we have job creation in a fair and balanced manner. >> interesting. you went straight to the talking point for the democratic side and dan let me ask you this point, in this budget the president talks about medicare and medicaid and a lot of other thing. it seems the debate is going to come where maria was, which is on tax increases and who should be getting them and who should not. is that what this comes down to? >> suspect we'll be doing that all through this election year. my point to maria is simple if warren buffett and bill gates think they should pay higher taxes there's nothing stopping them from breaking out their check books and sending a big pile of money to uncle sam. if they think that crowd in washington can spend the money better than they can invest it i think they are smoking crack. because they'll be insane. i would rather have bill gates and warren buffett investing the money than either democrats or republicans. president obama promised hope and change and giving us the same policies we had under bush in terms of bigger government, more regulation, more intervention. the only thing he's doing different which makes it worse, more like europe, is throwing in the class warfare tax hikes, and you don't make an economy more competitive. we won't get jobs coming here instead of going india and china if we're raising tax rates. >> on this tax issue, dan, let me get you on the record and then give maria a chance to respond. is there any tax increase right now that you would accept? i mean, if you closed all the loopholes. and that meant people at the top paid more, is that okay? is letting the bush tax go away for everyone okay? >> erin i'm perfectly happy to go on the record and saying i want to completely wipe out every loophole deduction credit exemption shelter that we have in the tax system. for 20 years i've been droning on about having a flat tax. that would mean a lot of rich people would may more. some would pay less. the key thing is we would have a tax code like hong kong that's a dynamo for economic growth. we would get the politicians out of the corrupt business of trading tax dollars for loopholes. we would dry up a lot of lobbying sleaze in this town. >> got say i've read on that hong kong flat tax and there's two sides to that story. maria if loopholes were closed and you could put real tax reform on the table, and that's what we got out. it's gone, we come fresh, would that be a compromise? and then the bush tax cuts are put off for a little while, but we get massive tax reform? >> that's something that the administration will be willing to look at. but, again, guy back to fairness and i will respond to dan with a very simple response which is, if the fix for this economy really was continue to cut taxes and cut taxes and cut taxes why did the economy tank under president bush when that's exactly what his philosophy was. the reason was because it wasn't a fair tax. and every economist will tell you that you can't cut your way to growth and to job creation. so this president by the way has already cut medicare by $500 million and the democrats got eviscerated for it during the 2010 election. it's one of the reasons we lost the house. he's willing to put cuts on the table of the programs that we find so dear, but it's all about fairness, erin. >> in a word and i mean it guys, in a word will we get a budget or will it be at least 1,382 days before we get a budget? and we're talking about this in a year, dan, yes or no? >> harry reid said no budget from the senate. four years no budget. why do we still have a budget committee. >> one word. no. we got the answer. maria. >> i'm going to go three. if it's fair yes. >> you guys, all right. thanks very much to both of you. i think we got an answer to that question. we'll be optimistic. and hope that they can get this done for now. obama caved to catholics who care about birth control today and that's next. under surveillance tonight, twitter, homeland security is monitoring what you post. and i mean it's pretty amazing what they're looking at. we'll tell you what it is. then china, smoke them if you got them. sarah, will you marry me? 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[ male announcer ] we know you don't wait until the end of the quarter to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement. will be giving awayrk passafree copiesdvisor, of the alcoholism & addiction cure. to get yours, go to ssagesmalibubook.com. so after weeks of mounting pressure today the president caved. religious organizations won't have to pay for these services. and no religious institution will have to provide these services directly. let me repeat. these employers will not have to pay for or provide contraceptive services. >> thalg that's president obama back pedaling on a health care mandate that required all health care providers including religious affiliated groups to offer free contraceptive coverage to workers. it allows women working for those religious groups to still get birth control for free but the insurance companies have to pay for it. you say really? the insurance companies have not commented on this. it's unclear if the battle is over. the president caved to pressure from catholic groups. the catholic vote is really important and powerful. 50 million strong in this country and one at the president needs for re-election. recent polling from pew research shows support for the president has eroded by five points since 2008. as you can see, 53% to 48% at that time. james carville is cnn contributor joining us tonight. great to have both of you. penny, let me start with you. bishops were led by timothy dolan here in new york, who is a rising star in the catholic church, had a problem with this. they said the compromise is a step in the right direction. what does that mean? is this done or not done? >> absolutely it's not over. you know, i don't know what the president was thinking. you know christians and catholics and christians from all over the world have been involved in the pro-life movement, taking care of the unborn for 2,000 years. and it wasn't going to stop with the president's mandate. the problem is that we've been stupaked. this is not really a cave all the way, it's really going to be a problem for women of faith because somebody is going to pay for it, erin. it's not like no one pays for it. you know that we all contribute to our health care premiums and our premiums are used for other people. therefore, because of the mandate, women that are members of concerned women for america, members of my staff will have to contribute and so for the president to pretend that he's taken care of this is not true. as long as the mandate exists it's still a problem. >> james carville, what happened? did the president not see this coming? i'm confused how he missed this coming. >> presumably he didn't see it coming. fortunately actually insurance companies glad to put bitter control pills in. it saves money on health care costs. >> assume the choice is getting pregnant or having birth control. some women pay for their own birth control, right? >> that's what insurance companies say. they pay for it and nets out to no cost. 98% of the catholic women in this country have used birth control. so i doubt if it's going to affect much of the vote if 98% of the women do, i assume their husbands know about it. the truth of the matter is he compromised and i expect that's where it's going to be. now it will start we find out all these catholic hospitals and catholic institutions were providing birth control coverage. i wonder if they will lose it as a result of this. i'm sure these catholic universities that they will go through here and determine if they are dispensing birth control pills at infirmaries. be interesting to see where this goes. we'll have a big contraception brouhaha here, and i'm not sure that's going to be good. i'm concerned for women of america. >> yes, please. >> penny, one thing i find >> your whole conversation are the percents that get thrown around. and i'm poking fun, 98% of women, only 58% of catholics support the president's plan. i don't know if people are honest about these issues in polls. but i don't know it's all going to go your way, penny. >> obviously, there's a large number of women in this country, women of faith, evangelical women often use contraceptives. this was not just about contraceptive, this is about abortive. that's a line for evangelical women. this is a point of grave concern. it's ridiculous to say this will cost less money. if you weigh the two perhaps side-by-side. to say it's cheaper to do abortions then, by the way, instead of allowing a woman to have a baby. let's knock off grandma for that matter if other trying to save money. it's nonsensical. thank you for sticking up for women, james. we don't need your help. conservative women are very concerned about this issue. it's a big deal to us. any time the issue of faith butt up against -- >> let james respond. >> i like the fact, you just heard this woman equate killing grandmother with taking a birth control pill. that's where this debate is going. >> no, i didn't. >> don't interrupt me. you got a major candidate by the name of rick santorum who wants to overturn griswald. wants to allow states to favor outlawing contraception. that's his position. he's an anti-contraception activist, and right now, he's doing pretty well in the republican party. my figure of 98%, erin you know where i got it from. it's a figure they asked catlic women. why would a catholic woman lie that she was not following the teachings of the church. if anything, my point is probably 2% of the women for some reason can't conceive and don't need it, so it's probably 100%. >> you know why it confused me? another poll we were using said 58% of catholics supported the president's plan. i figured if 98% of catholic women were using birth control more would support the president's plan. >> some use it don't support the plan. >> right. >> those figures i'm quoting are figures that were published by different polls. >> both of those polls were published, to be clear. james what does the president do from here? do you think this is over? >> you know, look nothing -- i think most people said look the guy compromised. and i think contraception has broad support across this country. i think we're going to be -- people will be interested to see what mitt romney's position is on griswold. the fact that he wants to defund title ten, which is going to deny birth control pills to millions of women across the country. i think we need to have a healthy debate about the role of contraception in the american life. >> thanks to boston you. we appreciate it. under surveillance tonight. is the government crossing the line by monitoring you on social media sites. this is a question before congress right now. hearings next week will happen to discuss how the department of homeland security monitor sites like twitter, facebook and the drudge report. is the government looking for suspicious activity or is big brother a more appropriate word to use here and are we having the government infringe on our rights. paul cowin has handled a lot of priechbacy cases. good to see you. you're lucky you didn't get put on the birth control beat today. >> thank heavens for that. >> i never thought i would see carville shut down. >> the government has been monitoring these sites for terrorist activity. that part, i guess you could say, is not new. but now we see reports that you go on twitter and post something negative on dhs and that that overseas, the tsa, and that might be grounds to monitor you. how do we know if they are going too far? >> this thing that i read about today in these lawsuits are very, very frightening. they seem to be going into a new area. they are monitoring social media. they have this government speak thing. they call it the social media monitoring and situational awareness initiative. what situational awareness initiative? what they are trying to figure out is who is criticizing homeland security. and they want to know, not just what citizens are doing this but what journalists are blogging about it and reporting about it. why would they want to do that? people who are worried about this say they are trying to restrict free speech. >> if you're on twitter, and people are allowed to follow you, right? you should assume people are going to read what you say. there's no law to expect someone not to monitor you on twitter, correct? >> it's legal, but the question is does it chill political speech? is it repressive? if you have a system where you're worried that the government will be monitoring what you say and if you criticize homeland security, maybe you better not criticize homeland security, that's the argument. i think it's legal, erin, frankly if you choose to post publicly your political views, you know what homeland security is saying, they are saying hey this is how america communicates. facebook, twitter, all of these social sites. they are looking for the bad guys and they figure you know what the first thing the bad guy will do? he'll attack homeland security. so it gives us a lead and they follow that lead to get the bad guy. that's their defense. >> all right. we'll see how this goes in the hearings. we'll cover this with paul callan. and let us know what you think. we asked you if you were okay if drones were watching you. we had passionate discussion. maybe dhs was watching you then. what did a uva lacrosse player tell police shortly after his ex-girlfriend was found dead? >> and a mujoert of americans at this moment think that china is a bigger economic power than the usa. do the numbers back that up? dad, why are you getting that? is there a prize in there? oh, there's a prize, all right. 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