>> he's the president. come on out to the lawn of the white house with a microphone and tell us your plan on entitlement reform. and he won't do it because he doesn't have the courage to do it. >> i'm candy crowley. and this is "state of the union." >> late into the night, leaders scrambled for a last-minute debt deal, a two-step plan that would raise the debt ceiling through 2011 in exchange for about a trillion dollars in spending cuts. both sides are on board. but the hang-up is a second increase that will be needed in 2012. before that happens republicans want a special commission to outline future reductions. a no-go at the white house. i spoke with treasury secretary tim geithner earlier. thank you so much for joining us. >> nice to see you. >> you heard the two-tier plan coming from the republicans. let me have the white house take on it. >> let me tell you what we're trying to do, okay? the most important thing is we remove threat of default from the country for the next 18 months. very important we do that. can't leave the american economy with -- >> through the election -- >> i wouldn't say through the election. this is a hard thing to do, and you want to take this out of politics. you don't want politics messing around with america's credit. >> a second too late on that. already messing around with it. >> they have taken it too far, frankly. the other thing we want to do is put in place a framework that locks in real reforms, real savings, so we can return to living within our means as a country. that's very important to do. we have to do it in a way that is fair and balanced and we have have a way to force congress, frankly, to make some tough decisions over the next several months, 18 months. we're trying to do both of those things. those are important because we need to get congress back to the business of trying to do things to help make this economy stronger and get more americans to work. >> does the speaker's plan get you there? >> when the president brought them to the house yesterday, we have two paths ahead of us we can choose. one is the framework the president and the speaker have been talking about now for several weeks -- >> which is so far a no-go. >> that's the president's preference, still, and the value of that approach is we're identifying and really putting in place real savings, commitment to tax reform, balanced framework. the other approach -- >> let me just, on that point, are you saying -- i mean, the speaker and the president as far as i know are no longer negotiating. is that true? >> no, that is not true. in fact, over the course of yesterday, the president was in touch with all leaders and they met over the course of yesterday -- >> beyond that early-morning meeting. >> yeah. >> so the president is still actively involved -- >> absolutely. >> -- in those negotiations? with the speaker? >> yes. what the leaders know is they need to agree on something together that will pass the house and pass the senate that the president can accept. that's what we're working towards. so there are two paths here. one is the framework comprehensive balance of reforms and the other is a process like what senator mcconnell introduced and senator reid have been talking about, which would take default off the table and set up a special committee, a very powerful committee, exceptional powers weather a clear deadline to try to enact a reform to achieve the same objectives within a specified period of time. >> my question is none of those appear to be on the table publicly at this point and the president is still negotiating with the speaker and others, but right now what we know publicly is that speaker boehner has a plan on the table that would take you through 2011 and give you -- lift the deficit by about a trillion, and then you'd have another go-around and lift it through 2011. 2012. is that acceptable to the white house? >> we will do it in two stages. we'll lock in the savings we agreed to, and then the second stage where congress will agree on something, revenue and entitlement reform, to make sure that's on sustainable footing. the key question is what happens at the end of that first stage? what we cannot do, and this is very important, and what we cannot do because it would be irresponsible is to leave the threat of default hanging over the economy for a longer period of time. back in january, more than seven months ago, we started this process of working with the congress to get them to raise the debt limit so we could avoid a default crisis. it's taken us seven months to get to the place we are now, almost out of runway, not nowhere, but almost out of runway. we cannot put the american economy through this periodic -- >> is that a no? >> it's a no. >> that's what i needed to know. if speaker boehner comes back to you, i think we can agree the house is the most difficult place to get something through at this point, and if the speaker comes back and says this deal that i'm talk about, 2011 we'll raise it, revisit it in 2012, is the best i can get, will you believe him? >> it's been clear for sometime that to get legislation passed, to avert a default crisis and solve our fiscal problems will require democrats as well as republicans. i'll tell you a conversation i had with republican leadership after the midterm elections. they said to me, we will need democrats on the debt limit thing because it will be hard for us. they have known from the beginning they need democrats to pass the house, not just to pass the senate. >> yes, they will lose conservative republicans. >> right. so that what they're all doing now is figuring out what will get votes to pass both houses, because they don't have time left on terms of what the president can accept. let me give you the optimistic view. i'm very confident in this country. we're a aaa country. congress is just going to prove they can get this done in the short time remaining, and the forces of reason are getting stronger now. if you listen carefully now. there is a lot of political rhetoric and gnashing of teeth, but if you listen carefully now, both sides are getting closer. you see the leadership of the republicans saying, we are not going to default. this country will not default. we're a country that meets its obligations. if you listen carefully you see people coming closing together on the tough choices the country will need. we have different visions for the country, and we're still a very divided country in many ways, but we all agree we have to find a better means and turn our attention to get this country back to work. >> and agreed upon means -- not the means, but the agreed upon goal has been there for a while. let me try and button up where we are on the current boehner proposal, the two-tier proposal is not -- >> two stage. >> -- two stage proposal. it's not acceptable in current form to the white house. if that comes to you, if a so-called short-term deal, which is defined as not taking you through the election, is sent to the president, are you telling me deshgs spite all these dire warnings, that he would veto that bill? >> it will not make it that far. >> he won't have to veto it. >> he needs democrats for that to work. and nancy pelosi said she will not vote for that approach. and it will not make its way through the senate. that's not a viable option. there's nothing wrong with doing this in stages. but what we can't do is leave the threat of default hanging over the american economy. it's leek a tax on all americans. it's deeply irresponsible. you cannot put that additional burden of uncertainty and fear on average-working americans, and on the american businesses going forward. >> timing seems to be of great moment at this point. the speaker said he wants a deal before the asian markets open, which is 9:00, 10:00, eastern time today. what will happen -- i am told that you warned congressional leaders yesterday morning of what might happen in the asian markets if no deal is struck by then. what would happen? >> well, if you look at markets around the world over the last few weeks or so, they still show a remarkable degree of confidence that america will meet its obligations as it always has and we'll find a way to make progress on our long-term fiscal challenges. that will start to erode the longer we wait. >> today? >> we can't tell. >> you come here confidently today saying we will get a deal as opposed to more of the dire warnings we've had if we don't get a deal. what i would like to know in the remaining couple of minutes, are you basing this on something in the process you think we're near, we're near, or are you basing it on trying to calm the markets? >> it's unthinkable we would not mite our obligations on time. unthinkable. >> it's not going to happen? >> no. you've heard the republican leadership and the president say that. they all recognize it's very important to do, and that's why i'm confident. again, if you sit in the room with them as we have done and you listen to them talk about how to solve this, you hear people starting to come together. they are much more realistic about what is possible and they recognize we have to get it done . >> that's based on more than hope that you're going to get it done. >> yes. >> let me ask you about the economy. the first is there are a number of private forecasters who have lowered their growth rate estimates for the second quarter. will the second quarter be lower than the first? >> it's possible. it's hard to tell. the second quarter is behind us. what matters is what happens the rest of the year. >> you think the second quarter might be lower than 1.9%? >> yeah, first time to be at 2% or slightly lower. >> you think the third quarter or fourth quarters will be better? >> should be better. no reason why they shouldn't be. >> how much better? >> if you look at the average of private forecasters, the best forecasters in the country, they think the second half should be around 3%, stronger than the first half. >> 9.2% unemployment. at what point do you think we will begin to see a fairly good downward trajectory on unemployment, by november of next year, which we all know is an election date, do you see unemployment below 9%? how much below? >> you need growth for americans to get back to work. that's the most important thing. faster growth than in the first half of this year. there's no reason that should not the happen as long as congress lifts this fear of a default crisis. >> so you see unemployment with an eight in front of it instead of a nine? >> depends on how fast the economy grows. unemployment is unacceptably high, terribly high. it's a very tough economy for millions of americans because of the trauma of the crisis. it's going to take time for us to get the unemployment rate down, but with stronger growth, the unemployment will start to come down again. >> somewhere in the 8% range by-election time? >> you cannot know. depends on the choices congress makes. >> thank you, tim geithner, appreciate you being here. >> thank you. sure. >> what will it take for republicans to back a debt deal? ♪ let me entertain you ♪ let me make you smile ♪ let me do a few tricks ♪ some old and then some new tricks ♪ ♪ i'm very versatile ♪ so let me entertain you ♪ and we'll have a real good time ♪ [ male announcer ] with beats audio and flash, you can experience richer music and download movies straight to the new hp touchpad with webos. oh, we call it the bundler. let's say you need home and auto insurance. you give us your information once, online... [ whirring and beeping ] [ ding! ] and we give you a discount on both. sort of like two in one. how did you guys think of that? it just came to us. what? bundling and saving made easy. now, that's progressive. call or click today. announcer: when life's this hard, it's no wonder 7,000 students drop out every school day. visit boostup.org and help kids in your community stay in school. joining me now, congressman tom price of georgia heading up the republican study group that formulates policy for republicans on the house side. you heard, congressman, from the treasury secretary, who says the plan on the table that speaker boehner is talking about is unacceptable to the white house. your reaction? >> at 9:15 on sunday morning, that may be the case. let me, if i may, stipulate three facts. the first is that this debt crisis is not being driven by politics but by math. the aging of our population dictate that we need to live up to the debts that we made but structurally change and fundamentally change the way washington spends money. secondly, it's house republicans in a bipartisan activity last week, the house republicans on two occasions this year, once in the spring with our budget that would have put us on a path to a blan balanced budget and cut our cap, and the short-term decrease in spending right now, the midterm, and then long term the structure for a balanced budget amendment that your network says 66% of the american people want, and third, sadly, the senate democrats and the president, even though they continue to complain, have yet to live up to their responsibility and put a specific proposal on the table. in fact, when the president put the budget on the table last february, the senate democrats voted it down 97-0. you have to wonder who is not willing to compromise. >> again, we are where we are in the process, regardless of who left what on the table at what particular point, so what is the next move for the speaker and for republicans on capitol hill with the white house saying they don't -- what they object to, as you know, is they want this issue settled at least through 2012, because next year is election year, and if we think it's about politics now next year would be worse. will you as a general principle -- are you opposed to taking this thing through 2012 so it's not dealt with again until 2013? >> not at all. that's why we passed the budget earlier this year, because we wanted to begin the discussion at a time when cooler heads might prevail. now we're up against a remarkable deadline. what we are trying to do is make certain we can get through the deadline in a way that brings about the structural reforms not just spend regularductions but the structural reforms that have to absolutely be nut putt in place so we don't find ourselves in this rashlable crisis again. >> you're okay with lets get a deal that gets us through 2012. that is not particularly objectionable to you? >> we're okay with an agreement, a solution, and we're not interested in a deal, but a solution that changes the way that washington does business so that we correct the challenges that we have right now and get ourselves on a path to pay off our debt and to balance our budget. it's what the american people demanded in the elections last november. >> you republicans do make a lot of what the voters said in the last election, saying we want washington to spend within its means, et cetera, et cetera, but we are also seeing poll after poll after poll that shows americans want compromise, and they think there should be something on the revenue side, and you are saying no, so why are you ignoring the polls and saying this is what the elections said? >> well, that's not true. as you know, our budget that we passed in the spring dealt with all of the corporate loopholes that the president wants to do away with it. our budget did away with those but did away with them in a manner that allows for fundamental tax reform so you get the whole situation fixed and solved. we're not interested in doing bites at the apple or nips at the side, because that is not what will get this crisis solved. yes, our budget took away the corporate loopholes and broadened the base for tax reform and lowered the rates for individuals so we can get this economy growing and creating jobs, because that's the key, we have to grow our way out of this challenge. >> speaking for yourself or the leadership if you care to, if you cannot get these things that you have outlined, major structural changes somehow within the next eight days, and i realize it has been going on for seven months, but the reality is you have eight days, if you can't get that, will you allow the u.s. to default, you personally or the leadership? >> the u.s. won't default, because default means that you don't pay your creditors. it takes about 10% of the money coming in right now -- >> without raising the debt ceiling, then. let would you allow august 2nd to pass without a vote to raise the me change the question. debt ceiling? >> that's not what we desire at all, and that's why we passed the two pieces of legislation we have pass and seen no action on the part of the senate. to your question of default, that means you don't pay your creditors. that will not happen. it cannot happen and must not happen. we have more than enough money to come in to be able to pay those individuals. the question is what doesn't get paid? that's where the president has, i think, sadly put fear into this equation and saying that seniors won't get social security checks or active duty military personnel won't be paid. there's no reason for that kind of discussion because there's enough resources to get us through a short term. at some point, as i said, and this is all about math and arithmetic, so you have to solve the crisis, and we have been ready since we took the majority in january of this we're. we just hope we have a willing partner on the other side to solve these challenges. >> if your speaker comes to you and says here is the best deal i can get and it does not include some of the things you are talking about, major structural changes, et cetera, and he says, as he's said publicly a lot of times, we cannot allow that august 2nd deads line to pass, will you vote with your speaker, or are you prepared to vote against raising the debt creeling if you don't get what you want? >> again, the house republicans in a bipartisan fashion last week, already voted to raise the debt ceiling. >> but that's not acceptable with the senate vote on the table. so we're not dealing with that. that's not reality. >> the reality is the senate has not lived up to their responsibility. that's where the onus ought to be. if you don't like the reductions in spending we put on the table, what do you like? if you don't like the limitations on government spending we put on the table, what do you like? if you don't like our balanced budget amendment, what kind of balanced budget amendment do you want or what kind of controls do you want in washington spending? that's where we need to be. it's not an ideal of what we have passed. it's what we have passed versus what the senate is able to do. they haven't even put a plan or proposal on the table. >> congressman tom price, thank you for joining us tuesday. we appreciate it. up next, our "sound of sunday," highlights from the other is sunday morning talk shows. then senator dianne feinstein. d a super business? 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