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CNNW In The Arena July 27, 2011



for those of you too young to remember that is a a 1970s movie. >> i want you to go to the window, stick your head out and yell, i'm as mad as hell and i'm not going to take this anymore! >> now that sounds like how a lot of people feel these days. this time, instead of the late actor peter finch, it was president barack obama who will people to take action. >> i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. >> and so they did. today more than 100 congressional websites crashed or threatened to. phones rang off the hook and letters and e-mails poured in. once again, the same old posturing went on and on. we've all seen this movie before. in fact, we've been watching it for weeks now. i'll have a lot more on this story in just a moment. but first, here's a look at the top stories i'll be telling but tonight. >> let's say it is august 3rd. democrats and republicans cannot cut a deal. the debt ceiling is falling down. so what's the first bill the united states government decides not to pay? then again, money can't buy happiness. a new study out says wealth and depression go together. the doctor asks, who are the real haves and have-notes. >> and norway. a desperate text message. as the killer stalked an island full of kids, a terrified parent kept in touch with her child. a heart stopping conversation. now for more on our top story, the giant showdown in washingtoner to debt ceiling. republicans and democrats each waiting for the other guy to blink. i want to go first to cnn congressional correspondent kate who is on capitol hill with some breaking news. all eyes have been on speaker boehner's proposal today. there seem to be a hiccup tonight and he has to rewrite his plan. what's going on? >> it is all about the money, gloria. this has to do with the issue of savings. you'll remember one of the principals that speaker boehner said he would abide by, the cuts, the savings had to be greater than the am the debt ceiling would be increased. that's a problem this evening. because debt ceiling increase according to this bill would be about $900 billion. and the congressional budget office, they always come out with cost estimates for legislation. they just came out to say that his savings, the deficit reduction in this bill, fall short of what he targeted. only $850 billion in deficit reduction as opposed to the $1.2 trillion they were targeting. a big problem. they're now scrambling to rewrite the bill and it is unclear what will really happen. they were spending all day today trying to sell the bill to their members, gloria. not rewrite it'll. >> so what happens? we weren't sure he had the votes before to pass it in the house. now it looks even less likely, right? >> definitely seems like more problem, more headaches added to the speaker's plate. unclear. what we were told as this was happening, they were aiming for a vote tofmorrow. unclear. definitely, very easy to understand that it would be even a bigger problem selling this to house conservative who's were already complaining that this bill didn't go far enough. >> and clearly, kate, the speaker does not want to lose. so thank you very much. and stay on top of that story. it is important. meanwhile tonight, we're getting some mixed messages out of the white house, too. just a short time ago on cnn, white house communications director dan pfeiffer told jessica yellin that president obama would entertain a short-term deal. that would give lawmakers an extra time to reach a deal. when i spoke to the white house budget director earlier today, he kind of dodged that question. take a listen. >> thank you so much for being with us. is there a possibility, jack, that do you a patch of say a week or two extension in the debt ceiling so that these bills can work their way and you can come up with a different kind of deal? is that possible? >> i don't want to look at the different hypotheticals. there is time for congress to get its work done. >> they say they can't. >> they can and they should. >> okay. let me talk to you about what would happen if they didn't get a deal. today, white house communications director dan pfeiffer said this to cbs radio. i want to you listen to it if you can. i know you're outside and there is a bit of a demonstration going on outside about immigration. but try listen to this. >> we are seven days away from an unprecedented financial event in this country's history. one that could potentially put us toward a depression because the house republicans led by speaker bainler are unwilling to compromise one inch. >> do you think house republicans are leading the country toward a potential depression? >> i think that we are seeing a very uncompromising position. we're seeing a high way or the highway approach. the president has tried to compromise. he has done it in a series of negotiations. i want to point out we remain engaged after the majority leader walk away. after the speaker walked away. the speaker walk away a second time. so i think the president has made clear, he is anxious to look for the reasonable compromise where we can agree. i think we need to see some movement on the other side. there's time for that movement. >> okay. what would movement, i know you don't lake hypotheticals. what would movement be? what would you consider movement? >> i think if you look at the bill that senator reid put in in the senate, he has outlined a path where it does give the speaker what he has asked for. dollar for dollar, cuts for increases in the debt limit. it is a path that is open and available. and it offers an opportunity to reach agreement. i think we can't be in a place -- >> it has no taxes. >> it has no taxes. and we've made clear that if we were talking about the long term deficit reduction bill to solve our problem for the next ten years, it would have to be a balanced package. what senator reid put forward was i think an attempt to reach a hand across. to make a compromise. to accept the principle that the speaker said he needed. >> let me play you exactly something senator mitch mcconnell, the republican leader in the senate, said today. because he may be the man who finds the way out of this. listen to what he said. >> we're going to have to get back together and get a solution here. we knt cannot get a perfect solution from one of you controlling only the house of representatives. i'm prepared the accept something less than perfect because perfect is not achievable. >> that doesn't sound so different from what i just said a minute ago. >> that's what i was going to say. if it were up to you and senator mcconnell, and maybe john boehner, it sounds like you could cut a deal. you do have house republicans that you have to deal. with they're not going to vote for senator reid's plan. >> if you look at the house, there are democrats as well as republicans in the house. it has been clear from the very beginning, if there were a big agreement, the would be a need f for democratic votes. that gets back to you have to compromise. you can't reject the principle the other side says are important. we think it would be terrible for the economy to have this be a nine, ten month long period of chaos we will can't have the kick the can down the road six or nine months. we can't accept a framework that puts us in a place, six or nine months from now, draconian cuts would be needed. >> you've spent weeks doing this to no avail and you have seven days left. is it inevitable that the u.s. credit rating would be downgraded under any circumstance because we could be back at this? or because the deficit reduction won't be large enough? what is the chance? what percentage? >> i don't want to speculate on that. i read the same papers that come from the rating agencies that all of you read. what is clear is that they're making two points. one, they're making the point that dysfunctional government is a bad thing. the notion that we can't extend the debt limit is something they worry deeply about. they also are worried, as are we, that we need to be on path for real deficit reduction. the plan that gets us through these few days will not be the final answer on solving our long term deficit problems. it could point us in a direction. it could be a down payment. i think the more we show an ability to find agreement in a reasonable middle, the more we will calm all of those. not just the ratings agencies but the american people who are worried about our government being able to work. >> and i have to ask you this question. because in the event that you don't reach a deal, and that you do reach a deadline, in which we can't pay our bills. how do you at omb and the treasury department, how do you plan for failure? how do you decide who gets their checks and who doesn't get checks? >> well, our plan is for the debt limit to be extended. for this not to come about. that's the only response. >> you're obviously planning. you're obviously doing contingency. >> we will be prepared to deal with whatever situation arises will our plan is for this to be resolved. >> so you're not going to tell me if the social security checks will go out and veterans benefits will go out. >> there is no way that anyone can give insurance that's we will make timely payments in a situation like that to social security recipients. to veterans, contractors. the president said that last night. there is no way to assure that all of those payments would be made, were we to fail, to reach an agreement on raising the debt limit. the truth is we can borrow 40 cents on the dollar if we don't have the ability to borrow, we don't have the ability to pay. >> on that sad note know we're going to have to leave it. thanks so much for being with us. let's see if you can get this work out by august 2nd. >> good to be with you. >> as you just heard, the white house is backing the democrats' plan. the republican leadership under john boehner put out their own plan. as of tonight, they're rewriting it. and we don't know if it is going to pass tomorrow. if it come up on the floor tomorrow. joining me now, congressman who will vote against his own speaker's plan. thanks so much for being with us. what is going on? in the house? john boehner's plan? the congressional budget office says you know what? it is not going to save as much money as we thought, under $1 trillion. now he has to rewrite it. you weren't going to vote for it in the first place. is it going to pass? >> we'll find out. that's one thing about the house. we have a vote. the senate hasn't had a vote. the president has ideas but nothing down on papers. we'll have a vote tomorrow. i don't know if it passes or not. what we need to see a long-time workable solution. >> that's not going anywhere. it passed the house. it won't pass -- >> harry reid has been afraid to bring it up for a voeflt that's what frustrates me as a freshman. these folks aren't taking any votes. and harry reid's might not pass. they need to have a full open debate in the senate about the budget and about the future of our country. >> you heard what jack lue was saying. it was essentially, you can't have everything you want. tax increases, congressman, are now off the table. what is it you need to raise the debt ceiling? >> it's what america needs. none of these plans actually ever balance the budget. they don't plant on doing that. >> in six days we won't balance the budget. >> no, we are not. in six days or longer, the reports came out today. it is really not six days. it might be longer. we don't know. we asked the treasury department to provide numbers. >> jack lue said august 2. >> the treasury department has the number. i don't want to argue about that. the point being we need a long-term solution. it is not about just raising the debt ceiling. it is a long term solution. and when we're borrowing 42 cents out of every dollar we spend, it is a major, major problem. i'm glad washington is looking at the problem. a spending problem and hopefully we'll pass something. >> here's the question. you have six days left. you know how washington works. nothing will get done that's big. will you be amenable to passing something shorter, say, for a weak work the weeks, a month, whatever, getting you through so you can come to a larger deal? would you vote for a short term increase? >> i think the house has done its work. it has cut cap that balance. i would consider something like that if harry reid would let senators be senators and have a debate on that. that's the problem. i go home and people say have you passed something? yeah. we've passed two budgets this year. >> it is not just you. it is the entire congress. say you've done your job. let's stipulate. that fine. what do you say to people who say, we cannot let this country go into default? it is embarrassing and worse than, that it is devastating for the american economy. and for your constituents. >> in the last year i've hosted the 64 town halls. they frankly didn't want the debt ceiling to be raised at all. but cut cap and balance with immediate spending cuts. cap in the future and a budget. the senate hasn't even had a vote yet. that's frustrating. i think it is incumbent upon the senate to have a vote. >> are you worried about default? are you worried? >> i am worried the president might choose the default. that the president might choose not to pay social security. >> you're going to say i have nothing to do with this. if the country goes over the cliff, you'll say not my fall. >> the country shouldn't go over a cliff. the question is this. can we solve the problem? under the president's budget that he proposed, there are $10 trillion in new debt. all they're talking about is reducing it by about 10%. we still have $9 trillion in new debt. that doesn't solve the problem. does the budget ever balance? >> okay. if it happens, then it is not your fall. that's what you're going to say. >> the president said -- >> you're going to blame president obama. >> the president is the executive officer of this nation. when he said on national television, nine days ago that he may not send out the social security checks. there seem to be plenty of evidence. we even had outside analysis today reported by three different groups that there is enough money to go another week. >> we have to see. i would ask the department of treasury to release the numbers so we know what they intend tad and what the case is for future of the nation. >> congressman thank you, for being with us. i appreciate it. coming up, what if we don't get a zmeel and the debt ceiling deadline passes. with so many bill to pay, the government would have to make some painful choices. we'll tell you who will feel the pain. 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[ kathy ] they were quick and efficient. quicken loans is definitely engineered to amaze. they were just really there for us. if the debt ceiling is not raised, the u.s. will have to make some tough choices. and lots of people will put in their two cents worth on what the priorities should be. is it military salaries? social security checks? what about those air traffic controllers? or guards in federal prisons? tom foreman is here to help us figure out the answers. tom, how do we make these choices? they're so tough. >> here's the simple part of this. you can pay for any of this. you just can't pay for all of it. let's look at the nuts and bolts of this. this was last august, this is the current august. this is how much money we have going in. $172 billion. this is how much we're spending. $306 billion. it's $134 billion that we won't have. so congresswoman borger, look at our options. what do you want to pay for here? interest? social security? medicare? what do you want? >> i'm a member of congress nowism prefer you call me senator. >> we'll see how you do. >> we have to do the interest, of course. social security, medicare, medicaid. everything. >> all right. you've spent this much. $128 billion. here's where you are. here's the default line. what else do you want to pay for? >> obviously we need the pay our military active duty. >> all the people in iraq and afghanistan. that's not so much. $3 billion. people all around the world. what else? >> we have to take care of unemployment insurance. >> although people struggling out there. you know they must be taken care of. that's $13 billion. what else? too snigs. >> well, we have to pay veterans benefits. we have to take care of our veterans. >> we're taking care of our veterans. that's $3 billion more. you can't forget your federal salaries here. all the people who make the government run. are you going to throw those in? >> of course. >> we put those in. what else do you want to pay for here? >> you've got it. people who get irs refunds. what about those people? >> 77% of the country gets irs refunds. we have to take care of those people. you're almost there? what else do you want? >> tuition assistance. education. >> all those young people are going to need jobs. you're over here. and now, do you know what? i showed up at your door. i'm an advocate for the poor in this country. i'm telling you if you don't put in food and nutrition senses, you're in big trouble. which one are you going to take off? >> well, i think -- >> irs refunds. do you know what? it's not april right now. we'll take that off. that's gone. i'll give you food and nutrition services. you're over again. this is the problem. if you look at this, congresswoman, no matter what you do, if you knock out the defense vendors here, look at that. $32 billion. you know what? i would have to kill this and this and this and this and this to get defense spenders. guess a? the defense spenders, that's a tremendous number of jobs in this country. if you don't pay for those, congresswoman, that's a bunch of jobless people who have more struggles. this is the fundamental problem for everybody in congress right now. i'm telling you furcal don't do a better job, you'll never be a senator. >> uk talking about the larger programs here. it is easy to talk about generalities. that's what people are talking these days. what ab

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