the deficit and raise the debt ceiling. meanwhi meanwhile, the specter of default comes ever closer. frankly, it's the tone of these debates that has a lot of people scared and this is a guy who's scaring a lot of folks tonight. congressman joe walsh, republican from illinois, a freshman backed by the tea party. he's been known to say blunt things when criticizing president obama. these comments might just take the cake. i want to show you a video congressman walsh shot and posted to his website yesterday. >> president obama, quit lying. you know darn well if august 2nd comes and goes, there's plenty of money to pay off our debt and cover all of our social security obligations. i know you have a willing media that protects everything you say and do. but have you no shame, sir? in three short years, you've bankrupted this country and destroyed job creation. you're with ee ee eer either in your head, you don't understand what makes this country great, or you're hell-bent in turning us into some european wasteland. you spent money like a drunken sailor for three years and now you tell us it's time to get serious about spending? >> a drunken sailor. this is not the kind of talk that leads to compromise in washington. i'll talk to congressman walsh in just a moment and try to sort through some of the things that are going wrong down there. but first, here's a look at the other stories i'm looking into tonight. tax the rich. the democrats say it's one way out of the budget mess. but when a meal in manhattan cab cost the sim as a used car in kentucky, who exactly are the rich? and michele bachmann for president? some people thought it was a joke. well, the latest poll has her leading in iowa. and in new hampshire she's in second place and gaining. who's laughing now? then -- >> harry potter. >> harry potter fades to black. but one man always knew how the story would end. barry cunningham was harry's first publisher and kept his deepest secrets all these years. a lot coming up tonight. now back to our top story. the tone in washington around these talks is absolutely poisonous and it's not being helped by a congressman calling the president a liar. and that congressman is here tonight. joe walsh joining us, he's in washington. congressman, thanks for being here. let me just ask you right up front. is that appropriate for you to call the president a liar? is it appropriate for any of us to call the president of our country that? >> you know what, these are important times, we're debating big, passionate issues. when my president, when your president, goes on tv and says that he's going to have to start pulling social security checks on august 3rd, he's not being truthful with the american people. so, you know, look. i'm tired of politicians all over the place who don't talk straight and just say what they believe. let's cut through all the crud and try to solve issues here. let's quit being political. and i think that's all this president's been doing. >> you think the talk about social security was essentially a scare tactic? >> absolutely. we know -- and this is -- this is what they began a few months ago when they began talking about this notion of default. they know, we know, there are plenty of government revenues to service your debt, to service our debt when august 2nd comes and goes, if it comes and goes. same thing with social security checks. and my fear is that he's going to continue down this line and try to scare military families. and try to scare families who have student loans. and just continue to go down the line instead of getting serious with republicans, rolling up his sleeve, and doing something to change the way politicians from both parties in this town have been spending money for years. >> congressman, i want you you to explain something to me. you said just a minute ago we know they have this money. i don't know that and i've been looking at this for days and days, listening to economists. i will grant you in a heartbeat it's incredibly difficult to sort through all of this. i don't know in a definitive sense they don't have the money, but i don't know as you're saying that they do have the money. how do you know that? >> look, there are government revenues to service our debt for the rest of this fiscal year. there are government revenues to service social security checks, military benefits, all of that, eventually. and nob of none of us want to get to this point. eventually you will get to a point where government will run out of money. we don't want to get there. but they keep making this inference that come august 2nd, the lights in the country are going to go out. they're doing that to scare the american people. we can survive a week or two or three. and you know what, we have to. we have to, to try to get real structural reform in how this town spends money. >> okay, i think that's good clarity in the sense i agree, it's not going to be like turning a switch when this happens. but you're not saying there's some infinite pool out there. >> no, no, we know that. i'm just saying they point toward august 2nd -- and the president even said it. come august 3rd, i may have to pull social security checks. he knows that's not true. now, four, six, eight months down the road we're going to reach a point where we have to do something. but nobody wants to get to that point. >> so even when you hear the bipartisan policy center came out and they said that the government is scheduled to pay out $307 billion in august but will take in $172 billion. you're saying despite those numbers, there's still some pad to work with for the moment while we sort this out? >> absolutely. and they know that. and so instead of trying to scare republicans into doing something by august 2nd, and indirectly scare the american people, they ought to just get really serious and let's come up with real strong reform so that we don't get to this place again. >> all right. you're getting to the point that i want to get to now. the tea party and some other people who are very, very fiscally conservative right now, are trying to take a hard line. that's your job, that's your important thing to do, i understand that. but what are you willing to compromise on? because certainly we know in a country like this nobody gets to have their whole way because there are 300 million of us here, not everybody agrees. >> no, i think -- i think what most of us freshmen who were sent to washington believe we have to do is change structurally the way this town does business. and so it's less the size of the cuts. it's putting in place some sort of reform that will say, we won't get here again. the first piece of legislation i've introduced as a congressman was a balanced budget amendment. it now is part of a real movement now in the house called cut cap and balance. to get some cults next year, to cap spending, but to formally amend the constitution so that politicians from both parties can't spend more than they take in in a year. i think that being able to do, achieve a real strong reform like that is something most american people really want. 80% of the american population supports a balanced budget amendment. the president should support it. >> do you think you have any real chance of getting there, though, in this kind of environment? because i have to tell you, when any group in washington draws a line in the sand and says, by golly, this is not going to happen. you know, very often talks stop. nothing gets done. the very thing that makes people furious in this country happens. the government simply ceases to function. >> no, i hear you. but if it's a crude analogy, i apologize. the analogy i use with this president is in a way, he's acted like a teenager whose parents left for the weekend, he had a big blowout party and trashed the house, and now he's stomping his feet because his little sister or the rest of us won't pick up after him. he has gone on a spinning binge for three years. if the american people really liked what he'd done, i wouldn't be standing here. they wouldn't have sent us to washington to stop what he's done. so this is really one of those moments in time where i think the american people are ahead of politicians. they don't want a weak compromise. they want this city to do something outside the box. because the consequences are dire. are just dire for future generations if we don't take this moment and change this city. >> give me in a nutshell here. you said not a weak compromise. but you are willing to talk about compromise. >> absolutely but the comp myself has to include structural reform. we have got to force politicians to balance their books every year. so we've got to pass a balanced budget amendment out of both houses. and i think that is eminently doable. because this situation we're in right now is so dire. >> can you get any support from your followers, people who think the way you do, if you say, look, we can move a step closer to that discussion but we cannot get it passed right now? >> no, i think we can get it passed. and i think we've got to do everything we can these next two to three weeks to try to get it passed. and this president has to lead. he's done very little leading. he has been a political animal for six months. if he wants to avoid something happening on augusted 2, he's got to get democrats to support a balanced budget amendment. you know, what a lot of them do. they can be nudged by this president. he's still got some power and some influence with that party. >> i'll ask one very direct question when may not be a comfortable one. you won your seat by just a hair last fall. in this environment and with the stance you're taking do you think you're going to remain in congress? >> you know what, here's my -- actually, it's a great question. and it's an easy answer. and i say it often. i am not driven by my next wlaection. i came here like a lot of freshmen did, on a mission, respectfully, to stop this president, who i think is destroying this country, and to stop all of this government spending, which is bankrupting our kids and our grandkids. i want to -- that's the mission i'm on. and as much as i can do to do that, that's what i'm going to try to do. and if it means i don't get sent back to washington, that's not what's guiding my thinking here. >> and i know there are voters who feel very much the same way. congressman joe wall, thanks for being here. >> great being with you. my next guest has been a top adviser to multiple presidentses and was inside the white house for years, david gergen. we only have a moment. we'll talk with your more in the next segment. before we do that, when you hear the kind of comments joe walsh makes, what do you think? >> i shudder. it's bad for the country. this country has always shown a great respect for the office of the presidency. and we accord to the person in it a certain degree of respect. a year and a half ago, when president obama gave his state of the union message, there was the congressman from the south who, joe wilson, who said "you lie, mr. president." and he was chastised heavily for that. and today here joe walsh, freshman, is calling the president a liar. i think it's terribly unfortunate. if we want to command respect within the world, if we want our presidents to be able to lead, one day soon or maybe sooner rather than later, there may be a republican back in the white house. do you really want, mr. walsh, for that republican to be trashed in a personal way? i think both sides have an interest in trying to find now some healing and find a truls. >> and you are waving the flag of truce outside the white house. we want to get to that in just a moment. stay right there. we're going to have more on what's starting to feel like a food fight in washington and how to get these grownups all talking quietly at the table again. david has some very interesting ideas on an actual possible solution when we come back. 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>> right, right. well, the democrats have been arguing all along, we will do the spending cuts but we demand tax increases as part of the package. the spending cuts that have emerged so far in the biden talks and now in the white house are at about the level of $1.5 trillion. that's not enough for the republicans. but it would be a huge advance over where we are as a country if the democrats would say, okay, we do agree to those 1.5. we'll give up the demand for the tax increases. but in return for that, this is very, very important, the republicans would agree to extend the debt ceiling. they would agree to extend the debt ceiling through the 2012 elections. as president obama i think with justification is asking. and that republicans would give up their demands that spending cuts equal the size of the increase in the debt ceiling. in other words, you've got to increase the debt ceiling about $2.5 trillion in order to get through the elections and not have to go through the charade yet again or even twice before the elections. it costs about 2.5. they're near going to get to 2.5 in spending cuts. the republicans want to say, drop the dollar for dollar demand. i think boehner might be willing to do that ultimately. and we will agree to this. both sides agree then to do additional adjustments on, say, fees and services kind of thing, raise a little money. but don't take that money and put it into tax hikes, take that money and put it into payroll tax cuts. if he did that kind of package, the country would be better off. >> you went through the first one, democrats agreeing to the cuts and giving up on tax increases. your second point is republicans agree to lift the debt limit by about $2.5 trillion. and they give up on the idea of saying, you must cut spending to match it. your third point you hinted at, both sides agree to close some tax loopholes and raise fees for some government services to make this all revenue-neutral. no winner, no loser, it just moves forward -- >> the money you get, the money you get from the fees and the services you put into day roll tax cuts which is something the president wants, something the republicans really want, put spark back in the economy. we've got a very limp economy as you well know. the critical thing is that both sides get something and they give something up. people defend their principles, the republicans defend the principle of no tax hikes. the democrats defend the principle of no entitlement reform. don't do this on the back of the seniors and medicare and social security. both get what they're looking for there. but we get to an agreement that gets a truce that ends these kind of poisonous conversations that have been occurring in the white house. you know, and it gets us past this default. tom, that does not solve the underlying problem facing the country. the debt crisis which is building up. the huge debts that are building up still have to be dealt with after you get past default. so do the jobs issues. those are both crises that are coming at us very fast. but we must -- we will never even get there if we don't get past this default issue. >> your last point was both sides have to agree a new set of negotiators dive in and try to come up with long-term credible things -- >> dive in and let's deal with the long-term. i can't emphasize enough, we're on the edge right now. >> why is this your solution here? you said it really doesn't address all of this. why isn't this another version of kicking the can down the road? >> it as version of kicking the can down the road. and you know, when we started this process i thought it was the least desirable alternative. but if the choice is to go into default versus kicking the can down the road, i think that's no choice. you have to kick the can down the road and keep going on this. but here's the other thing, tom. the mcconnell plan which he has proposed as plan "b" has -- you know, he essentially lets the president raise the debt ceiling but he doesn't get any spending cuts out of this. it doesn't give us any spending cuts. my feeling is go ahead and get the 1.5 now. take it and run with it. that would be historic to get spending cuts of $1.5 trillion. >> david, i find this a very intriguing plan. it will be interesting to see if people respond to it that way. the simple truth is i think the fact that it's going to make everyone unhappy in a way is probably one of the best signs that it represents compromise. david, as always, good talking to you. >> tom, terrific talking to you, thank you so much. >> thanks for being here. up next, the phone-hacking scandal in britain has made its way here. we've been talking about it. and now the fbi has announced it will open a probe into allegations that u.s. citizens' phones were hacked. hey ! chocolate, vanilla or strawberry ? 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