and the lead economic adviser. and then mark sandy to tell us whether a deal with save the u.s. credit rating, and finally presidential politics. candy crowley in iowa with candidate, tim pawlenty. >> you can be both strong and pleasant and nice. those are not contradictory things. >> i am gloria borger in for candy crowley, and this is st e "state of the union." mitch mcconnell yesterday demanded that president obama get personally involved in the debt talks and he soon got his wish, and now there are reports this morning a plan is near. mitch mcconnell, thank you for being with us. let me get to it. can you announce this morning that a plan has been reached and there's a deal? >> we are very close. we had a good day yesterday, both the president and vice president called me and the president talked to the speaker as well, and they understand with a republican majority in the house and a republican in the senate, and we made progress in that direction since april when the administration asked us to raise the debt ceiling with no reductions at all. i think i can confidently say this debt ceiling increase will avoid default, which is important for everybody in america to know we are not going to have a default for the first time, and we're not going to have job-killing tax increases in it, and we will deal with the problem, and that's that the government has been spending too much. we have not been taxing too little but spending too much. we're in a position where hopefully i can recommend to my members they take a serious look at it and support it. >> get it done when? >> soon. >> today? >> soon. we're aware that august 2nd is a date of some significance. >> let me walk you through an outline of this potential deal. there has been reporting from cnn and elsewhere about what it contains. first the size of the package, over $2 trillion, yes? >> the entire package? >> yeah, $2.4 trillion -- >> we're looking at a $3 trillion package, cuts now and caps over the next ten years to hold spending in line, and then we're also going to be voting on a constitutional amendment to balance the budget. that's important for the future, because it will put some constraints on our spending habits here in washington. let me emphasize the joint committee. in the early stages of this discussion, the press was talking about another commission. this is not a commission. this is a powerful, joint committee with a equal number of republicans and senate -- equal number of republicans and democrats, and to make a recommendation back to the senate and house by thanksgiving of this year for an up or down vote. think of the base closing legislation that we passed a few years ago for an up or down vote in the senate. >> let me walk you through this in stages. there are discussions about committee. there are discussions about what would happen if it doesn't do its work. let's -- first things first, though. >> yeah. >> one sticking point has been the president wanted an absolute guarantee we would not go through this kind of a showdown six months from now on the debt ceiling, has he gotten his wish on that and is there a way for the debt ceiling to come up in six months and he gets guaranteed approval of it? >> he was concerned about not having to do this again before his election. frankly, my members were more concerned about getting the job done properly for the american people -- >> what is the deal and fix? >> you will see, this is a process that could get him past the election, and we're working on the combinations that will get us there. >> would it be a vote of disapproval, where he could propose it and he needs a super majority to disapprove? >> well, the mechanism forgetting the increase would be the resolution disapproval. we're still working on the parameters of it and being close to be able, i am to recommend to my members, that this is something they should be able to support. i am very close to being able to recommend to my members that we have an agreement here that i hope they will consider supporting. >> and the next big area is the debt committee, as you call it, and the question is how do they guarantee absolutely that you get the kind of deficit reduction you are looking for, because we have had, with all due respect, committees in the past and they have not done so well, one very recently, and how do you hold fair feet to the fire? there is talk of triggers to make sure if they do not do their work congress will be forced to cut. >> first of all, we have not had anything like this. this is a joint committee of congress. it's not a commission that consists of outsiders. it's a joint committee of congress with an equal number of republicans and democrats, under enormous pressure from the american people, from the markets, foreign countries looking at us to see if we're going to get our house in order, to come up with significant additional savings over and above the initial ones that we will approve before the end of this year, and entitlement reform is absolutely critical. for example, the -- the trustees of the medicare and social security system appointed by the president has said repeatedly, both of these very important and essential programs are in serious trouble. >> my report something, and i would like you to talk about go what is going on inside the room you are in, the question is how do you absolutely guarantee that these cuts come? and as i was saying, there are triggers people are talking about so that if, for example, they can't agree, let's just say that, then there is talk of across the board spending cuts, of as much as 4% in areas like medicare and defense spending. can you talk about these sort of fail-safe mechanisms that would enforce cuts? >> my view is that there is a math math kul possibility, obviously, that the committee could deadlock. a mathematical possibility. and there is a discussion with the white house, and you are having one of their folks on earlier to talk about it. and there are a lot of conversation about what do you do if they deadlock. i hope we're on a path to resolving it. >> what if? >> we'll let you know. >> i will try again. because the big concern of the democrats like jean superling, if the committee dead locks, and you have to come up with a reduction, and they want to see balance, see revenues and spending cuts. is there a way you can guarantee that revenues would be part of any kind of overall big second phase of this? >> at the risk of frustrating you, let me say again, the trigger issue has been the one locked us in the extensive discussions. i thought we were very close to an agreement a week ago today, and then went off to our separate corners and had volleys, and now we are back into the position where we will let you know when we agree to something. >> what is your -- >> we will let you know. >> clearly, this is the sticking point. can you say the triggers are the sticking points? >> that has been an item of outstanding discussion for over a week. >> and let me go to something that you mentioned earlier, which has also been a point of convention, and that's the question of the balanced budget amendment. the people in the house and the speaker's plan wanted a guarantee of passage of the balanced budget amendment. would that be in any deal or would there just be a guarantee of a vote -- >> we intend to be voting on the balanced budget amendment in the senate, and we will let you know when that is scheduled. >> as part of the plan? >> we will be voting on the balanced budget, and i hope it will pass, because that's a restraint long term on the government of the united states which it has demonstrated it cannot get its financial house in order without assistance. >> would you expect john boehner would need to deliver half -- >> look, i serve in the senate. the best i can tell you is, i am hoping very soon to have an agreement that i can recommend to my members and we're hoping we will have a number of them support it. >> why would conservatives who want a guarantee of the passage of the proposed amendment and deeper cuts, why would they sign on to the deal? >> what conservatives want to do is cut spending, and back in april the administration was asking us to raise the debt ceiling with nothing attached to it at all. we have come along way. i think this agreement is likely to encompass up to $3 trillion in spending reductions, and no tax increases that we know will kill jobs, and the president made that argument last december when he passed a bill to extend the current tax rates for two more years, and he understands that tax increases are a job killer, particularly when you have over 9% unemployment, and that certainly is not going to be part of this. >> can you guarantee to conservatives that no tax increases will be part of this deal? >> we're not going to raise taxes in this deal. i just said that, and i will say it again, there are no tax increases in this bill. >> if there is tax reform and closing loopholes -- >> there will be no tax increases in this proposapropos. >> why would democrats sign on to this, then? >> we have over 9% unemployment, gloria, over 9%. they understood then, the president understood then it was a job killer to do that. we don't intend to start doing that. this is not what this is about. the government spends too much and does not tax too little. >> why would the democrats sign on a compromise that included potential entitlement cuts but no tax -- >> you will have to ask them. if we get an agreement the president will support it and he will make the arguments in favor of it and you will have to ask the democrats what their motivation might be. >> we will ask that in a moment to senator shuck schumer. what has it been like to deal with the president and the vice president? >> i like them both. i have had dealings with them over the last couple years and i am appreciative back to talking to the only person in america that can sign something into law, and that's the president of the united states. >> maybe next time you will be able to tell us exactly what the deal is. thank you very much. up next, are democrats going to be onboard with the possible deal? 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[oinking] joining me now, the third ranking democrat in the senate, chuck schumer of new york. >> good morning. >> you just heard senator mcconnell, he said a $3 trillion deal, and absolutely no taxes. is that something you can live with? >> let me say first of all, this -- there is no final agreement. nobody has signed off on a final agreement so it's premature to talk about any specifics. most important thing this morning is if there's a word right here that would sum up the mood would be relief, relief that we won't default. that's not a certainty, but default is far less of a possibility now than it was even a day ago, because the leaders are talking and talking in a constructive way to come up with a solution that would avoid default. but there are lots of things that are not filled in and many more discussions to go. so it's hard to say anything specifically about this, that or the other thing. >> sounds like they moved past the question about whether you can get another increase in the debt ceiling six months down the line, making it virtually automatic essentially. >> it's very important for president obama and to us, and not for the reasons senator mcconnell mentioned because we would risk default down a couple months, and then did this again, and it's vital for the credit markets to have as long of a term approach as possible, and it seems quite clear the debt ceiling will be raised enough so that we won't have to come back to this until 2013. that's important for another reason as well, and not only the credit markets, but we have to focus on the jobs and the economy growing, and if we are just consumed for the debt ceiling for the year and a half, it would be a dare licktion to our duties. >> and we have the question of this enforcement mechanism for cuts in the second part of this, and senator mcconnell was essentially saying that this could affect across the board cuts in things like entitlement programs and no revenue. how do you negotiate that? >> well, certainly the enforcement mechanism is one of the key issues that is still being debated, and it's one of the issues that made this process go on for so long. and here is what you had to say about it. enforcement mechanism doesn't require, but imports and makes it likely that the people in this committee come to an agreement, because if they don't the pain inflikted is so great they have an incentive to come to an agreement. that means there should be a sword of equal sharpless and strength hanging over each party's head, and obviously the sword over the democrats are the cuts, we don't like them and want to help middle class people pay for their kids to get to college and prescription drugs and things like that, and what is the sword over the republicans? it has to be of equal sharpness and strength. the preference would be some kind of something on the wealthy, or defense cuts to equal sharpness and magnitude, and when the trigger had significant cuts, it brought the parties to the table and came up with had a balanced agreement of both revenues and cuts. >> if the committee gets deadlocked, which is a possibility to say, here are all the things everybody hates sitting out there, and they will all be triggered and they will occur? >> that's right. hopefully that brings the parties to an agreement that each side -- >> what if it doesn't? >> well, if it doesn't -- we hope it does. >> that would make it more likely that congress would -- >> that this joint committee, that this joint committee, and senator mcconnell, i was very glad to say he thinks a result will come out of the joint committee, and so do we. we will fight hard that it be balanced and it have both on the joint committee, revenues and spending cuts, and otherwise it's not fair -- >> how are you guarantee that? >> there's no guarantee, but what makes it a likely possibili possibility, as i said as the strengthness and sharpness and equality of the two swoerds. we cannot go for a sword that is tough on democrats and not tough on republicans. >> how do you say -- >> what happens is if the bipartisan committee cannot come to an agreement, then these things take affect and republicans and democrats go ouch, we better avoid it. >> you are saying you have to have some system that shocks you into doing your job because you might not -- >> well, there is a difference, we have a divided house and senate and government, and if one party controlled all three, this would not be that hard. our preference to have a balanced approach, to make sure that the tax loopholes for yachts and corporate jets and the wealthiest among us be part of it, and their view is that shouldn't be the one to take all the cuts, and we think there should not be cuts for medicaid and social security, so these are very real differences that have to be bridged and the only way to bridge them is with an enforcement mechanism that is tough and equal. >> are democrats -- if this were the case, are democrats ready to provide the bulk of the votes to get this? >> it's much too early to tell. reid is being consulted on an hourly basis by the administration, and it's too early to tell. make no mistake about it, obviously they can't pass this without democratic votes in the senate, and so we have real input. >> in hearing you say that revenues have to be part of it and mcconnell says the revenues can't be part of it, and so is that tax reform -- >> it's our believe that revenues should be part and it's their believe revenues should not be part of it, but if the committee has a good mechanism, past history shows we will be able to get revenues as part of the committee. >> you have a committee and you will force it to work and if it doesn't work you will have something out there to force you -- >> both sides, it shouldn't favor one side or the other. >> as a leader of the democratic party how do you convince the base of your party who doesn't want any potential cuts of entitlement to go along with this kind of a deal? >> well, again, you know, the ryan budget proposed a december amation of medicare and medicaid, and we fought back. we will continue the fight. the base of our party knows, there should be no cuts in medicaid or medicare. there could be savings, but the benefits to people who really need it should not be cut. that's been a fight we have been making quite successfully, and we will continue to make it in these negotiations and further forward. >> senator, thank you so much for being with us. up next, i will ask one of the president's economic advisers about where the president himself stands on the on going debt ceiling negotiations. stay with us. they gave us a consumers digest best buy award, then they gave us an iihs top safety pick, and you -- well, you gave us your approval. so we thought, why not give a little back? 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[ disco playing ] and this is to remind you that you could save hundreds! yeah, that'll certainly stick with me. we'll take it. go, big money! i mean, go. it's your break, honey. same coverage, more savings. now, that's progressive. call or click today. joining me now, gene sperling, the director of the white house council. thank you for being here. >> thank you for having me. >> you just heard mitch mcconnell talking about a $3 trillion deal, and absolutely no rev news as part of it. is that the deal you're working on? >> well, it's not going to surprise you that i am not going to negotiate here as much as i would like to -- >> that's too bad. >> -- or give details. three areas, one, we have a significant reduction, and he is fine with spending cuts mutually acceptable, and the second we come back with a more significant number, and that would include entitlement reform and tax