you're looking at live picture from the united nations. where all eyes right now are on this year's general assembly. president obama and the first lady, michele bachmann, expected to arrive in new york only minutes from now. at issue for the united states and much of the world this week, a showdown over the middle east. the palestinian authority president vowing to submit a formal application for statehood to the united nation's security council. it could have serious implications for the u.s. relationships with iz real and the arab world. much more on this part of the story coming up. let's get to the president's plan it slash trillions of dollars through the national debt. a plan he says will do the right thing. >> either we ask the wealthiest americanes it pay their fair share of taxes or asking seniors to pay more thor medicare. we can't afford do both. either we gut education and medical research or we've got to reform the tax code so that most profitable corporations have to give up took loop holes that others don't get. we can't afford to do both. this is not class warfare. it's math. >> the president is proposing roughly $3 trillion in savings which includes $1.5 trillion in new taxes primarily on the wealthiest americans. as well as tax surcharge on millionaires named for the business giant warren buffett who says the rich around paying enough in taxes. also included, $580 billion in mandatory cuts to programs like medicare and medicaid. another 1.1 trillion in savings that will come from winding down wars in iraq and afghanistan. the president's plan doesn't include changes to social security or eligibility age, both of which are fiercely oppose he by democrats and many republicans as well. meanwhiling with republicanes in the battle ground state of pennsylvania are thinking of changing why electoral votes are awarded in the presidential election. it would be a dramatic move that could hurt president obama in 2012 or potentially back fire on the gop. i'm going to get to much more on that part of the story coming up. but i want republican reaction to what's coming up right now. republican reaction to the president's latest deficit reduction initiative. our congressional correspondent kate bolduan is standing by with that. kate? >> hi, wolf. top republicans today calling the president's proposal class warfare. that is just one way house speaker john boehner described the president's deficit reduction plan as he dismissed it today. >> as quickly as the president laid out his proposal for reducing the country's def sitsz, congressional republicans were lining up to knock it down. >> i understand that it's easier to go out there and talk about the taxing of billion airs. if they want to pay more, there is a special provision in the tax code for them to write a check to the federal government. >> house speaker john boehner slammed the president's call for the so-called super committee to approve $1.5 trillion in tax increases. >> at a time when spending is out of control, giving the federal government nor money is like giving a cocaine addict more cocaine. we've got to get spending under control. the ray washington i to raise revenues is to get our economy moving again and get more americans off of unemployment, off of food stamps and back doing real work. >> adding to the gop push back, statement after statement monday from house and senate republicans, criticize sizing the president's pitch. the top republican in the senate, mitch mcconnell saying, veto threats, a massesive tax hike, phantom savings and punting on entitle many reform is not a recipe for economic or job growth or even menningful deficit reduction. >> it is a strategy to cut the deficit by more than $4 trillion over the next decade and to do it fairly. >> president obama seemed to anticipate the sharp criticism from the republican side of the aisle. turning his focus directly on the house spaem speaker who just days earlier made clear tax hikes are still not an option. >> so the speaker says, we can't have it my way or the highway and then, basically says, my way. >> or the highway. >> that's not smart. it's not right. >> now it seems both men, president obama and house speaker john boehner, have both drawn lines in the sand. at the same time calling on the other to not do just that. it's clear that war of words will no doubt continue. but real pressure now wolf is on the so-called super committee. these members have to come up with a deficit reduction plan with more than a trillion in savings, that will get majority support this the committee as well as in the congress and they have to do it soon if today is any signal. that job just got harder. wolf? >> they have to do it by thanksgiving. by thanksgiving break the the end of november so they don't have a lot of time either to do all of that. very quickly, harry reid, senate majority leader, is it true he doesn't even want to take up the president's 500 million jobs bill. given the urgency of the situation, i was a little surprised to hear that. what did they say? >> there is a lot of comment up here about scheduling. harry reid is looking at taking up the measure but says there are concerns that the senate needs to take up, having to do with some issues they dealt with last week. but they are looking at something both democrats and republican hes support very much and want to see, the trade bills. both sides say it is urgent that congress deals with this in a very short matter. so we know that senate majority leader said there are many items lining up that they need to take on. i think he is trying to dell with that as well as politics of the day that you have to deal with everyday up here, wolf. >> not an easy chore by my means. kate, thanks very much. here is a question, is president obama right to suggest that the current taxes isn't fair to all-americans. . this plan is known as the buffet rule, lisa? >> hi, wolf. warren buffet says the mega wealthy pay a lower rate of taxes than any of the people working for them. this is something that president obama picked up on saying it is a basic issue of fairness. >> call it the warren buffet rule. warren buf et seaing his secretary shouldn't pay more in taxes than he does. but is it true? do millionaires and billion airs in this country pay a lower tax rate than middle class families? it it depends. let's say you have sue. making a nice salary of $1 million putting her in the 35% tax bracket. jill makes $50,000 a year or 25% tax bracket. between those two sue is making more and paying more in taxes but now let's add in rita. she payes a lower tax rate than jew and jill of 15% on dividends and capital gains. that's what president obama wants to change. >> that's t is wrong that a teacher or nurse or construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. the. >> the reality is that some americans did not pay 2011. the true burden of who pays the highest share of taxes in the united states is really the upper middle class and mod moderately wealthy families. according to the irs, people making between 100 and $24u7b,000 a year pay 25% of the income taxes. people making between 200 and $500,000 a year pay 20%. that's almost half of the taxes combined but that's not to say the rich get off scot-free. >> there are roughly 24 '035,000 millionaires in america. they paid $177 billion in inkuks taxes in 2009. that's an average tax payment of over $750,000 each. >> how much money would the president's tax proposal on millionaires raise for the government and what would it look like? the the obama administration is leaving those questions for congress. >> we're not going to give congress a detailed proposal for how to meet that specific principle now. there are a lot of ways to do that. but it should be the basic foundation of tax reform. and we are going it fight to make sure that's part of what congress considers and ultimately delivers. >> the republicans argue the reason the capital gains tax rate is 15% is because it is supposed to encourage investment and savings. the last thing you do is create a dissent sentive. for wealthy individuals who have their own corporations, essentially warren buffets of the world, their company's income has been taxed at 35% rate then on top of that is the capital gains. of course, wolf, democrats have a very different perspective and that's where the fault line is. wolf? >> they certainly do. this debate is only just beginning. we have heard a lot but we will hear more. making big waves on the campaign trail ease well as michele bachmann says, i'm quoting here now, if warren buffet believes he doesn't pay enough taxes then he should write a check today to the u.s. treasury. rick perry calls it, and i'm quoting him, bait and switch strategy that penalizes investment. mitt romney says higher taxes means fewer jobs. it's that simple. we will have much more from michele bachmann. she will be my guest here in "the situation room." that's coming up in the next hour. coming up, jack cafferty, he is here in new york. jack? >> texas governor rick perry loves to talk about all the jobs he created in texas. but that's only part of the stroir and it is a bit misleading at that. the other part of the perry job story is that nearly one in five texans in the state where the governor lives, live below the poverty line. and that poverty rate is growing fastener texas than the national average. cnn's money has a story that texas ranks six in terms of the people living in poverty. both demjanj a lot of families live a shanty housing, no electricity, no indoor plumbing. this is 2011. also, the poor in texas don't get much help. the state has one of lowest rates of spending on its citizens per capita and it has the highest share of those without health insurance. relatively few collect food stamps even though many more equal fight for them. receiving cash assistance is difficult. experts say part of the reason peoplent to seek help in texas is because of the mentality down there that you ought to pick yourself up by your own boot straps. for his part, go of nor perry says creating jobs is the best way it help his citizens. it is true. texas created 40% of all of the job added in the country the last two years but a lost new jobs are low-paying ones. more than half a million workers in last year were paid at or below minimum wage of 7.25 an hour. that's just 15,000 a year for someone working full-time. texas has the highest percentage of minimum wage workers in the country bp tying mississippi at nearly 10%. with jobs and the economy sure to be issue one during the campaign next year, here's the question. how much will it hurt rick perry than nearly one in five texans is living in poverty? go to cnn/cafferty. or go to our post on situation room's facebook page. wolf? >> all right, jack, thanks very much. good question. by the way, i will have a chance to ask the former president of the united states, bill clinton, about all of this, including u.s. poverty, president's deficit plan. palestinian bid for statehood here at the united nations, tomorrow here in the situation room. i'll be interviewing the former president, bill clinton. mean piem whooil, growing concern the president's debt plan will lead to more political gridlock in washington. just ahead, my interview with one of the president's top economic advisors, gene sperling sb stand by by live. plus, entering a third day, should new yorkers be worried at all about what is going on? i'll ask the new york city police commissioner, ray kelly. he will join us live, here in new york as well. president obama unveiling his debt plan earlier in the day. just as protests here in new york on wall street enter a third day. hundreds turned out for the so-called occupy wall street demonstration, an effort targeting what they describe as corporate greed. let's get more on the president's latest debt plan. the director of president's economic council gene sperling. thanks very much for coming in. lots to discuss, not a whole lot of time. let's go right to the issue of social security. a lot of reform ideas. but didn't touch social security at all, why? >> the president made clear in his remarks today that he does consider one of our great long-term challenges to protect the sol solvency of social security and make sure it is there, a progressive rock solid benefits to come. but long-term solvency over 57 years within, he wants to work with democrats and republicans. this plan is about making sure that as we have a powerful plan for job creation and growth, with the american jobs act, we also have a plan for long-term confidence we are getting our fiscal house in order. living within our means and bringing our debt down is a percentage of our economy. that's what this plan does together. that's what our economy needs at this moment. >> republicans saying the president punted effectively as well when it comes to medicare and medicaid. the other major entitlement expenditures which amount it a huge percentage of the u.s. annual budget that the recommendations of the president made were relatively modest. i would like you to respond to that criticism which is already coming in. >> i don't think th think that many people would think that pr posing $320 billion of medicare and medicaid savings in the next ten years is modest. it is significant but let's be clear. we are trying to save the medicare as we know it. not end medicare as we know it. we are put prg grams that will reduce waste, that will reduce unnecessary costs we do not need. the president showed a lot of political courage and being willing to say, that those under 60, new beneficiaries and they retire, they might have to face slightly better incentives to make sure they're not overusing medicare costs. so i think it's's comprehensive plan, 320 billion, specifics, details. i think is very important and it will increase the solvency, life of medicare. >> yeah, i guess what they are complaining about is no specific recommendations to raise the retirement age for eligibility and medicare from 65 to 67 or change their cost of living index to make -- to save somebody that way or means testing for that matter. in other words, richer resip yets get less than middle class recipients. you've heard those criticisms as well. >> that's juflt saying we didn't do one twofr their ideas. it doesn't mean the president doesn't have a specific and details and courageous plan. he does kwb in this plan, ask those who are in the top three or four percent, medicare beneficiaries, couples making over $170,000, they have to pay pour more for their medicare in the future. he was clear on that. he said that people in my age, when we get in medicare, we have to pay extra if we want a policy that will cover all our costs and encourage overutilization. those are very specific plans. and i have never seen any democratic president or republican president for that matter talk about at the level of detail he did. so just because he didn't agree with some of their proposals to maybe turn medicare into a voucher or raise retirement to age 67 does not mean he did not put forward a very strong plan that is going to get a lot of criticism from other corners because he is specific in detail. but the president says no sacred cows. he was willing to do savings in medicare just as he was willing to call for months most well off to pay their fair share as part after shared responsibility and bring our deficit down as we create jobs in the short term. >> the president did make a very dramatic veto threat in his remarks today in the rose garden saying he would veto anything. i want you to elaborate for viewers out there, precisely what he wasn't when he said would he veto any cuts or any changes that entitlement spending, medicare, medicaid unless there were appropriate increases in taxes on wealthy americans. but explain the nature of this veto threat. >> always number one principle is shared sacrifice and shared responsibility if we have shared prosperity. so, the president again took on a lot of his own supporters in putting forward adjustments to medicare for future beneficiaries. he was willing to do that because he was was part after responsible package. what he was making clear is that he is not going to make adjustments to medicare beneficiaries if it is not part after package that asks the largest corporations and most well off americans to be part of this deal. so somebody comes in and says, we're just going to cut benefits from medicare, we will just make those adjustments and then exchanges and potential sacrifices from seniors or the middle class and not sat same time ask the most well off to do their share. that's not acceptable. he will veto that. he is also making clear as he us a have that we need a grand compromise. we have shared sacrifice. and i think the president led on this and i will say the american public is overwhelmingly with him. they don believe we should tame our debt on the backs of the seniors, middle class and poor. they think there should be shared sacrifice. that does include asking those more well off, making $1 million or more, to pay their fair share. we will all benefit together if we can jump-start jobs and have a long-term plan to bring down our deficit. >> we are 0u9 of time. this does set the stage potentially for more gridlock in washington. giving republicans especially if the house their adamant refuse yl for any tax crease at all. >> let's just remember, speaker of the house had been willing to put revenue on the table. negotiationes with the president. over in the senate there are many republicans who have been willing to be part of the gang of six process. willing to put revenues on the table. let's just be clear. the president represents the main stream who want a balanced plan that includes higher revenue and includes a spend willing constraints. if there are some who don't want to do that, it is them thp pe who do not represent the spirit of compromise that the president is trying -- and i think the public is asking for. >> general sperling from white house, gene, thanks very much. >> thank you. >> republican presidential candidate see a golden opportunity to get millions of votes they might not normally get. we will discuss what is going on in our strate in. stay with us. you're in "the situation room." defiant. ♪ the 42 mile per gallon ct hybrid from lexus. the most fuel-efficient luxury car available. ♪ and just what you need to forge your own path. ♪ and see katie before she goes home. 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[ male announcer ] progresso. 40 soups 100 calories or less. president obama and other world leaders are coming to new york for the 66th annual united nations general assembly. secretary of the state, hillary clinton, is here in new york. she is working furiously to try to avoid a high stakes international clash, international clash i should say, over palestinian statehood. the palestinian authority president said today he will submit an application for statehood to the united nations security council on friday. joinsing us here in new york is our senior united nation's correspondent richard roth. richard, walk us through as the stakes are really enormous right now, what we expect will happen in the coming days. >> we got a big clue today that meeting you just saw of secretary-general with the leader of the palestinians. according to the u.n., abass will submit for the u.n. friday h which