Return to Transcripts main page
American Morning
No Deal Yet Reached on Raising Debt Ceiling; Breivik Attorney Speaks Out; Breivik Attorney Speaks Out; Breivik's Father Speaks Out; Obama and Boehner Make Prime-Time Pitches; Debt Crisis Blame Game; Drastically Lower Drug Prices
Aired July 26, 2011 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
ALI VELSHI, CNN ANCHOR (voice-over): One week left until the debt deadline. President Obama takes his case to the nation saying end the gridlock or suffer the consequences.
CHRISTINE ROMANS, CNN ANCHOR (voice-over): House Speaker Boehner offers his own plan during his own speech showing just how dangerously far apart they still are.
KIRAN CHETRY, CNN ANCHOR (voice-over): And with the arguing starting to sound more like a full blown political campaign, are lawmakers more worried about 2012 than they are about August 2nd? It's your money, it's your vote, on this AMERICAN MORNING.
(END VIDEO CLIP)
VELSHI: Good morning. It is Tuesday, July 26th. Welcome to AMERICAN MORNING. We'd love to tell you it's all over, and there's been a deal, but --
CHETRY: No, in fact, if you listened yesterday to the president and then the House speaker, they didn't even sound like they were talking about the same thing.
VELSHI: No.
CHETRY: But for a primetime address and the blame game over raising what's essentially the nation's credit limit which is seven days now until the deadline, there's no compromise in sight to ensure that America's creditors will still be paid. Right now, Congress is putting America's financial standing and its role in the global markets on the line.
Last night, President Obama ripped into the House Republicans' plan to raise the debt ceiling with the cuts only approach. He argued their refusal to consider eliminating tax breaks or loopholes for the wealthy will backfire with ordinary Americans.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They're fed up with the town where "compromise" has become a dirty word. They work all day long, many of them scraping by just to put food on the table. And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary Americans. They're offended by that. And they should be.
(END VIDEO CLIP)
VELSHI: OK, House Speaker John Boehner spoke after the president. He said the solution is not that complicated. Just spend less. Yet most economists, if not all economists, agree that debt reduction can't really occur from where we are with at least some revenue increases or the closing of loopholes or the increasing of some taxes. Last night Speaker Boehner stuck to the party line, though -- no new taxes.
(END VIDEO CLIP)
REP. JOHN BOEHNER, (R) HOUSE MAJORITY LEADER: The president has often said we need a balanced approach, which in Washington means we spend more and you pay more. Having run a small business, I know those tax increases will destroy jobs. The president is adamant that we cannot make fundamental changes to our entitlement programs. As the father of two daughters, I know these programs won't be there for them and their kids unless significant action is taken now.
(END VIDEO CLIP)
ROMANS: All right, so all this talk about how to get our future spending under control, but this, the debt ceiling is about what Congress has already passed. They've already passed billions of dollars in spending last year. They should pay for it.
CHETRY: The GOP will argue, the Tea Party response to that is we can't keep doing what we're doing.
VELSHI: A totally good argument, solid argument.
CHETRY: Don't tie it to this. There's no --
ROMANS: That's the leverage they're using.
CHETRY: I just never going to get tired of saying it's apples and shampoo.
(LAUGHTER)
CHETRY: And you use a lot of shampoo to keep your hair like that.
VELSHI: Correct. And I eat a lot of apples.
(LAUGHTER)
CHETRY: A lot in flux this morning. Let's go straight to the White House where our Dan Lothian is standing by. Both sides sound divided as ever, and we're running up now seven days until the August 2nd deadline.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And I think what you saw last night from both the speaker and from the president is a level of frustration. I'm not certain that anyone really thought that they would be at this point and still have such a wide divide between two plans, essentially what the Democrats are pushing, what the Republicans are pushing.
And just a couple of days ago, I was talking to a senior administration official who pointed out that they thought they were close to a deal over the July 4th weekend.
And so here they are, and what you have is the Democrats looking to get some kind of plan that would raise the debt ceiling through the end of 2012. And the Republicans, John Boehner, pushing this plan that would essentially do it in a two-tier system.
John Boehner, though, doesn't necessarily have the support of his own party, everyone in his party, already some Republicans pushing back saying that they don't wholly embrace his plan. So it is -- even though it appears that there is this impasse, we are told by Democratic and Republican sources that there is an ongoing discussion quietly behind the scenes, and the hope is some sort of moderate approach can be found, some compromise, and that can be done in time.
(BEGIN VIDEO CLIP)
OBAMA: We know what we have to do to reduce our deficits. There's no point in putting the economy at risk by kicking the can further down the road.
BOEHNER: The sad truth is that the president wanted a blank check six months ago and he wants a blank check today. This is just not going to happen.
(END VIDEO CLIP)
LOTHIAN: One of the things I found kind of interesting they can't even agree on whether or not there is a stalemate. You heard the president last night talking about this being -- reaching a stalemate. Speaker Boehner saying that there's no stalemate because Republicans have been able to pass some legislation. But the question is whether or not they can find a compromise that can get bipartisan support before that deadline expires. Back to you guys.
ROMANS: The process is just killing us, Dan. It's killing us.
LOTHIAN: I know. And it sounds like a broken record.
ROMANS: It does.
LOTHIAN: Not much has changed. We're hearing that Republicans are, you know, don't want these tax cuts for the wealthy. That's been the narrative all along over the last six months. Not a lot has changed. There's a lot of hope, though, that some kind of agreement can be made. ROMANS: And it's gone past the democratic process straight into silly town.
VELSHI: This is definitely pushing my ability to make the story sound different every day.
LOTHIAN: Mine too.
VELSHI: Dan, good to see you. We'll do it many times over and over again.
CHETRY: And as we've seen over the past month, we've had the president taking to the bully pulpit again and again to make his case that a debt ceiling deal should include a mix of spending cuts and revenue increases, aka taxes. Last night he asked the nation to contact their members of Congress and demand a fair compromise. Listen.
(BEGIN VIDEO CLIP)
OBAMA: 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. America, after all, has always been a grand experiment in compromise.
(END VIDEO CLIP)
ROMANS: There was the call to action from the president. After that the websites of several lawmakers, including Senate Minority Leader Mitch McConnell and House Speaker John Boehner crashed. The websites crashed because of the high volume of people trying to contact their members of Congress.
VELSHI: Let's get the administration's response. Joining me now live from the White House is Gene Sperling, the director of the National Economic Council. He is an assistant to the president for economic policy. Gene, good to see you. Thank you for joining us this morning.
GENE SPERLING, ASSISTANT TO THE PRESIDENT FOR ECONOMIC POLICY: Thanks for having us.
VELSHI: Gene, let me ask you this. I want to have a slightly different discussion with you here, and that is with you, you worked in the treasury, worked in the White House before, you were an adviser to the president. At this point you have got to be looking at contingency plans for this debt ceiling that we're going to start to hit on August 2nd.
What are those contingency plans? We've heard the treasury secretary refer to some of them. We've heard the Federal Reserve saying it's got -- it's getting ready with emergency plans. You in the White House are going to have to make choices as to who gets paid on August 3rd. What's the planning about not having a solution to this? SPERLING: You know, of course that type of planning goes on, but ultimately that's not where our focus is, because anything that would happen in a situation where we would be at or near default is unthinkable. And there shouldn't be any leader or policymaker in Washington today that is even contemplating that.
What the president said last night was we have to make a strong impact on reducing our deficit that requires balance, that requires shared sacrifice, that to avoid us being in this unprecedented situation of putting at risk the first default in our country's history, we have got to compromise. Every American understands that. No my-way-or-the-highway approach.
And when we extend this debt limit, we need to take away the cloud of uncertainty that's been hanging over our economy by saying quite simply, we are no longer going to use the threat of default, of the first default in the history of our country, as a normal type of routine bargaining chip in our budget negotiations. That is not good for the American people. That doesn't honor the legacy Alexander Hamilton started over 200 years ago. That's where our focus is.
VELSHI: And for markets out there, you do have a plan, you can tell me there is a plan if the House doesn't come to some agreement on this?
SPERLING: Well, of course there is always contingency planning going on. But I will tell you, there is nothing that's not unthinkable. The only thing that is thinkable is the commonsense compromise the president discussed. We have come so close. The president has been in bipartisan negotiations three times and had the Republican leadership walk away abruptly.
We have been very close. There is a lot of goodwill that I still believe exists in this country in Washington and we just need a basic, a minimum amount of compromise, a minimum amount of not my-way-or-the- highway, and we can get there easily this week.
VELSHI: The president said -- in fact last night he said, that his original plan which would reduce the deficit by about $4 trillion over 10 years is bipartisan. In fact, he said there are many Republicans in the Senate willing to support it. How many? Enough to get this passed?
SPERLING: I think what the president is referring to is, for example, when the gang of six came out with a proposal that was balanced, that supported something like the bipartisan fiscal commission's plan, 15, 16 Republicans said they could support that even though that called for far more revenue increases as part of tax reform, far more than the president was calling for.
So the president has gone the extra mile repeatedly, not to put out his ideal proposal, but to make compromises, to push his own party to go further on entitlement reform, all so we can reach common ground. There is no reason we can't compromise in this country. That's what the president said yesterday. That's what the public is responding to. That's what our focus should be on this week. VELSHI: Gene, again, you've been in the treasury, you've been in the White House. Somebody is going to have to start making decisions, and I assume these decisions are being made now. There's been more speculation about what happens to the very -- the $22 billion in Social Security checks that have to go out on August 3rd. What's your update on that? Are Social Security checks going to go out on August 3rd if a deal is not reached by August 2nd?
SPERLING: Look, you're just making my point. There is no option that is really not unthinkable, that would not do significant damage to our country if people in Washington cannot come together and find that basic compromise.
We all know the facts that what will happen after August 2nd. We all know the treasury has over $500 billion in debt maturing in August, that they have over 80 million checks to write to people who depend on things like Social Security. There's no way we should even get near that.
That's why the president went on national TV last night. It wasn't a plea for his particular plan, for his ideal program. It was a plea for bipartisan compromise, for balance, for shared sacrifice, for everyone putting -- checking at the door any kind of my-way-or- the-highway approach.
He's demonstrated that. You've seen him push his own party on deficit reduction. You've seen him put on the table things that are difficult for any president, particularly a Democratic president, to do on entitlement reform. He's done so because he's trying to bring the deficit down. But he's also trying to show, as he said last night, that divided government doesn't have to be dysfunctional government.
VELSHI: Gene Sperling, thank you for joining us. Gene Sperling is the director of the National Economic Council and the assistant to the president for economic policy.
ROMANS: So it's all about August 2nd. I mean that's the deadline to raise the debt limit. We know we hit the debt ceiling May 16th. Treasury has been doing some machinations and magic to make it last this long, but August 2nd is the deadline to raise that debt limit.
CHETRY: And keeping another big date in mind besides August 2, and that's Election Day, 2012. Our Jim Acosta is live in Washington with a look at the possible political fallout for both sides. You can imagine Social Security checks don't go out August 3rd, who gets blamed?
JIM ACOSTA, CNN CORRESPONDENT: Well, They're all going to get blamed for that, Kiran. Actually, as you've been saying, six days and counting on the clock, there is little progress in the negotiations after what was more of a state of the disunion last night. The president and House Speaker John Boehner brought more talking points than proposals in their competing addresses to the nation. And later this morning Speaker Boehner meeting behind closed doors with wary conservative Republicans so sell his plan on the debt ceiling. I talked to or got a quote from a spokesman in Boehner's office who tells CNN this morning we are moving forward Wednesday with a bill we think the Senate can pass and the president should sign. That is an optimistic assessment from the speaker of the House.
Votes could come Wednesday, as early as Wednesday, on both the Boehner plan and dueling proposal from Senate Majority Leader Harry Reid that as the president mentioned last night he does support, but it's not clear if there's enough time for the Congress to work through these competing plans before August 2nd, which means the country would be at risk for default.
And that could mean, as we were talking a few moments ago, big trouble for both parties. A recent CNN poll/ORC poll shows the public is frustrated with Democrats and Republicans. Check this out. Is President Obama cooperating enough with Republicans in congress? And 42 percent say yes, 57 percent say no. That sounds pretty serious, right?
Well, check out what happens when we ask are Republicans in Congress cooperating with the president? And 30 percent say yes, 68 percent -- that is more than two-thirds of Americans -- say no. So the indications are there that if this goes to the brink and beyond, that Republicans could get blamed more than Democrats, guys.
VELSHI: All right, Jim, thanks very much for that.
ROMANS: All right, coming up in about 20 minutes, we're going to get reaction to last night's debt sales pitches. We talk to Ron Brownstein, a CNN senior political analyst. Also Norman Ornstein, a scholar at the American Enterprise Institute. These are two guys who have been around the block with political wrangling and will give us some real clarity on where to go from here.
CHETRY: Still to come this morning, Norway massacre suspect Anders Breivik claiming he had help planning his attacks. This morning also stunning comments from the suspect's father.
(COMMERCIAL BREAK)
ROMANS: Suspect Anders Breivik now claiming he worked with two terror cells to launch Friday's attacks as well as terror cells abroad. His attorney says Breivik used some kind of drugs before the bombing and mass shooting to keep him strong and awake. Here's the attorney speaking just a short time ago.
(BEGIN VIDEO CLIP)
GEIR LIPPESTAD, LAWYER TO ANDERS BREIVIK: He talks about two cells in Norway, but several cells abroad. He says that he is sorry that he had to do this, but it was necessary to start revolution in the western world.
(END VIDEO CLIP) ROMANS: Meanwhile, the death toll from the slaughter has been lowered to 76, although it could rise again. There are still people in the hospital. Nearly 200,000 people attended a memorial service yesterday in downtown Oslo. That city's mayor vowing to punish the suspect with, quote, "democracy and love."
CHETRY: All right. We're going to get a check of our national weather this morning. Jacqui Jeras is in the Extreme Weather Center for us.
Good morning, Jacqui.
JACQUI JERAS, AMS METEOROLOGIST: Hey, good morning, guys. Kind of a dreary start in a lot of cities across the eastern seaboard. There's not a lot of rain going on but we've got a lot of cloud cover.
If you've strayed away from your TV, come over and take a look at this power cam from Atlanta. Isn't that a cool picture? The clouds just cutting off the top of the building and when you see things like that we start getting worried about getting some airport delays. We've got 74 degrees in Atlanta. Showers and thunderstorms expected this afternoon all across the southeast. Heaviest along the gulf coast and we could get as much as two inches per hour. Not severe here but this is where we're expecting it across the upper Midwest. A moderate risk through the Dakotas today and parts of New England could see some severe thunderstorms this afternoon as well.
Outside of those storms, the heat continues to be a top story in the weather department with advisories in effect across the central part of the country again. Day 24 now for you for Dallas. That's the fourth longest streak of 100-degree plus days and it looks like we could break that record by the end of the week as you stay in those triple digits.
Back to you guys.
ROMANS: All right. Jacqui Jeras, thanks, Jacqui.
VELSHI: Our question of the day has pegged off President Obama demanding Congress come up with a deal to allow the government to keep borrowing money and pay its debts after next week's deadline.
We want to know from you, if you had the budget axe, what would you cut first and what would you keep? Send us an e-mail, a tweet, or tell us on Facebook. We'll read your comments throughout the morning.
CHETRY: And don't forget the "what would you keep part," because we're getting a lot of interesting comments about what you want to cut.
VELSHI: That's right. What you cut.
CHETRY: What do you think is essential? And we'll, of course, bring that to you in about 30 minutes. We're going to take a quick break. We'll be right back.
(COMMERCIAL BREAK)
ROMANS: "Minding Your Business" this morning. New analysis from Pew Research with a stunning conclusion about the recession that it widened the racial wealth gap and Hispanic Americans were hit hardest. Median household income for that group fell 66 percent from 2005 to 2009 and black households lost 53 percent of their net worth. Both much worse than White households who lost 16 percent.
Right now, U.S. stock futures trading pretty flat, only slightly higher right now. Investors waiting on several economic reports on housing, consumer confidence. Those are due out later this morning. Wall Street also watching Capitol Hill closely today for updates on stalled debt ceiling talks.
Just a few minutes ago, Ford announced second quarter earnings that were better than Wall Street had been looking for. A net income profit for the last quarter dropped about seven percent from the same time last year, but sales, sales climbed 13 percent to $35.5 billion.
And earlier, oil giant BP and the Swiss bank, UBS, reported their earnings, missing Wall Street estimates, pushing European stocks lower. But get this about BP, BP still reporting a huge profit of more than $5.5 billion for the quarter. BP, yes, BP.
Many more earnings reports coming out. Forty-one S&P 500 companies expected to report quarterly profit reports this afternoon or this morning. Eastman Kodak, RadioShack will report before the opening bell. Amazon, GlaxoSmithKline and others report their quarterly earnings later today.
And today, Dunkin' Donuts leads the long list of companies expected to file for an initial public offering. Eleven companies are expected to file for IPOs this week. Hey, that's the most in one week since 2007.
Don't forget for the very latest news about your money, check out the all new CNNmoney.com.
AMERICAN MORNING will be back right after this break.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN breaking news.
CHETRY: Twenty-eight minutes past the hour right now. We are getting some new news this morning, just in to us, about the Norway terror attack.
The attorney for the suspect, Anders Breivik, is saying that his client was on some kind of drugs to stay awake and alert during his killing rampage on Friday.
VELSHI: And he also says Breivik claims he had help from terror cells in Norway and abroad with the attack that authorities say took 76 lives. Michael Holmes has more on these developments. He's live in Oslo. Michael, first of all, what do we know about whether or not he acted alone or had help and what has he said about this?
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Yes, it's very confusing, Ali. I mean, this is a guy who told the police initially that he acted completely alone and now he's saying that he had contacts with two other terror cells outside of his own actually.
Now what's not clear, it appears that he's saying that he acted alone in these attacks but he has contacts with these other cells in a broader sense. You know, there's a lot of people who doubt this, actually, Ali. The police have no evidence of contacts with other cells. They have no evidence of other cells. Some people say, well, this guy may be just putting on a bit of bravado here, that he's trying to make himself look as if he's part of a bigger thing. But police obviously have to take it seriously and they're very much looking into it.
This news conference with his lawyer, Geir Lippestad, was pretty instructive into the mind of this guy. He said that he feels that what he did was necessary in order to start a revolution in Europe. Remember, this is a guy who is vehemently opposed to Muslim immigration in Europe, what he calls a colonization of this country, and, indeed, Western Europe by Muslims. He said it was necessary to start a revolution. He feels that he's already in a war and he says this is a war that will go on for 60 years and won't be until then that everyone understands.
In terms of his own actions on Friday, he apparently was surprised he even got to the island. He was surprised he got away with it after the bomb went off in Oslo. Of course, he drove to the island and then carried out those mass shootings. He says -- the lawyer says he's shown no remorse for the victims because he believes he is in a war and his actions were necessary. He shows hate towards everyone who believes in a normal political system.
So this is clearly quite a bizarre mind. In fact, the lawyer said this whole case has indicated he is insane, but he says it is too early to say whether insanity would be a defense in this case.
Remember, we have to make it clear, this is a guy who has admitted to these crimes, but has pled not guilty, Ali.
CHETRY: The response, Michael -- this is Kiran here as well, the reaction time from authorities, I mean, there are many of us scratching our heads saying how could he kill so many people.
I know he was armed with this weapon that allowed him to discharge a lot, but to kill that many people, without help being able to get to them?
HOLMES: You know, a lot of people are asking that question. It's a fair one. You got to understand a couple things. First of all, the island is a fair way from Oslo, and the bomb had gone off and so all security had been diverted to this bomb going off here in the capital. There's even reports that some of the kids who called up for help from the island when the shooting started were actually almost put on hold saying, you know, if this isn't about the bomb we can't deal with it right now before they understood what was going on, on the island.
These are the things that delayed the reaction time and getting the distance to the island, there were local police found -- they didn't have weapons, the police here are not armed, they had to get the SWAT teams there who had to drive there and get a boat across.
And the other thing that's sad about all of this, there's a helicopter base for police helicopters it was shut down for the vacation period. Now police are saying it was quicker to get there by car anyway, but a lot of people are saying really, shut down for vacation?
What you would imagine would be the fastest mode of transport to get on to the island itself, news helicopters over the island before the police got there. So, yes, people are questioning this.
There are other questions as well about like the body count being revised down by so much, 93 to 76, like they apparently counted bodies twice. It was a chaotic scene as you can imagine.
ROMANS: Well, it's clearly a country not used to something of this magnitude. It is a peaceful, open society, which is in the streets what people are trying to reclaim and say that is how they will fight back against this accused killer. Tell us quickly about the drugs that he took a drug, perhaps, to stay awake. What do we know about the mood or the (INAUDIBLE) of this accused killer?
HOLMES: Well, we know nothing more than that. His lawyer said in the news conference that he took a drug to stay alert and awake while he carried out this rampage. He wouldn't say what type of drug it was.
You know, the kids, the survivors of this, spoke about -- one child saying that he was smiling during it. Another one saying he had a very impassive face throughout it all and he was certainly methodical in what he did.
You know, it's interesting when you talk about, you know, Norwegian society and unarmed police, people here say even know, we don't want the police to be armed, we don't want to live in that kind of a society. It's a very peaceful place and a very friendly place and people are stunned this could happen here.
Even police who are authorized to carry weapons in the car, have them in a locked box unloaded and have to get permission to pull them out. Your average cop on the street has nothing which, of course, is very foreign to, you know, America.
In places like this, they're proud of that and don't want a society that's, you know, got armed cops everywhere. This is a country, of course, as we've discussed before, does not have the death penalty and so that's also being controversial for outsiders.
ROMANS: All right. Thank you so much, Michael Holmes.
You know, the meantime, the father of Norway terror suspect Breivik says he's ashamed and disgusted by his son's killing spree and wishes his son had taken his own life instead of the lives of so many others.
VELSHI: Jenz Breivik is a former diplomat who now lives in retirement in the south of France. He said his son is mentally ill and the two have had no contact for 16 years except for a brief phone call 10 years ago.
(BEGIN VIDEO CLIP)
JENZ BREIVIK, SUSPECT'S FATHER (through translator): No. I'll never have more contact with him. In my darkest moments, I think that rather than killing all those people, he should have taken his own life.
UNIDENTIFIED FEMALE: A strong word from a father.
BREIVIK: They are, but thinking about what has happened I get so upset and I still don't understand that something like this could happen. No normal human being would do something like that.
(END VIDEO CLIP)
VELSHI: Meanwhile, Breivik claims he had help from two terror cells to pull off Friday's massacre as well as terror cells abroad as Michael Holmes just reported though. This is conflicting evidence, information than what he gave police earlier and there are some people who don't believe that to be true.
ROMANS: Searching for grandiosity in the wake of this tragedy.
CHETRY: It's 35 minutes past the hour right now. We're following some breaking news this morning, more than 30 people are now dead after a Moroccan military plane slammed into a mountain.
The AFP is reporting that this crash happened in the south of the country, 73 people were on board, mostly Moroccan soldiers. Five people have been found alive. We will bring you the latest as we find out more details about this crash.
Also Libya is accusing NATO of killing eight people in an airstrike against a food pantry and medical clinic about 25 miles west of Misrata.
NATO claims that the attacks only hit military targets. Michael Mullen, the retired chairman of the Joint Chief of Staff says the confrontation with Moammar Gadhafi has reached a stalemate.
The deadline to raise the debt limit is a week from today. Back-to-back speeches last night, President Obama and House Speaker John Boehner made their cases to the nation last night. First, the president argued the current stalemate is no way to run the greatest country on earth.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say they agree we must avoid default.
But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.
BOEHNER: Good evening. I'm John Boehner. I served as speaker of the whole House of the members of both parties that you elect.
(END VIDEO CLIP)
CHETRY: Speaker Boehner insisted that Republicans won't allow the government to default on its obligation, but he maintained the only real solution to the problems is to cut spending.
VELSHI: All right, so the two sides are clearly not on the same page and unclear whether they're in the same book.
ROMANS: Language even.
VELSHI: I may be naive about this. I tuned in last night thinking we were going to have something that approached a deal, sounded like a deal, something encouraging.
Right now, Congress is not only putting the nation's credit rating at risk, but this nation's financial standing and its crucial, crucial role in world markets.
ROMANS: Joining us to talk about this Ron Brownstein, CNN senior political analyst and editorial director of "The National Journal" and Norman Ornstein is a resident scholar of American Enterprise Institute.
Two men who have seen it all, right, gentlemen? We're seeing something we haven't seen before. Ron, let me start with you. Are we going to get a deal, do you think, and what's it going to look like?
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, you know, everyone has assumed that since the alternative is almost unthinkable that we will get a deal in the end, but last night, as Ali suggested, was not encouraging on that front at all.
There was a certain source of cognitive dizzy dance in listening to the speeches. There are structural similarities between what John Boehner came out with yesterday and Harry Reid came out with yesterday.
Both have a two-step process with a media cuts followed by a commission and in a normal political environment you can imagine working toward some kind of agreement built around that.
But there are important differences between them and last night, what you saw was John Boehner and Barack Obama, emphasizing what's wrong with the other guy's plan, more than signalling how they might eventually resolve those differences.
Now that may be the last roar you give to your base before you make a deal, but for those who worry about the consequences of stalemate I think it was a little unnerving to have that kind of rhetorical argument which would have seemed more appropriate last week than going on this close to the deadline.
VELSHI: Yes, Norman, let's talk about that for a second. The rhetorical arguments, the arguments that play to the base, you have particularly on the Republican side, a difficulty in so far as you have a number of these freshmen Republican Congress men who came in on a wave of fiscal conservatism with help in some cases from the Tea Party.
And you have a number of Republican congressmen who have signed this Americans for tax reform pledge that says they can't agree to anything that looks like anything smells like anything like a tax increase. This is definitely hampering any approach to a compromise.
NORMAN ORNSTEIN, RESIDENT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH: It's not just the freshmen, let me say.
VELSHI: Sure.
ORNSTEIN: You've got senior members like Jim Jordan of Ohio, the head of the Republican Study Committee, you know, when they started the Republican Study Committee, which is the kind of conservative caucus about 40 years ago, it was a fringe group, a small fraction of the Republican Party.
Now it's 80 percent, 58 or 59 House Republicans have said they won't vote to increase the debt limit under any circumstances. They've only got 240 and they need 218. So Boehner has a big headache inside his own caucus. We have very little time left.
You know, when you hit these end game negotiations, you'll often get exaggerated rhetoric, but I must say in 42 years in this town, I haven't seen anything like this.
And with time growing very short, if they cut a deal right at the end, I can even imagine people like Senators Mike Lee and Jim DeMint over at the conservative end, filibustering it and having us go over the brink regardless and if the car goes off the cliff you can't put wings on it and fly it back.
ROMANS: Guys, ironically when you're talking about trying to fix our financial problems and doing that in the near term you actually make our financial problems worse playing this game of brinkmanship, Norman. We heard that Wall Street might prefer the Harry Reid plan because they want things to be done and done.
VELSHI: Not done and done in six months ago.
ROMANS: They want to know we're serious about this. Do you agree with that assessment?
ORNSTEIN: To me that's a slam dunk. You've got to take this beyond the election. And it's not because of the president's re- election concerns. If you have to go through this same ridiculous fandango again in six months, it's the worst possible time.
In the middle of the presidential primaries, when all the candidates are drawn to their extreme base and all the congressional primaries where candidates on both sides are going to be pulled to their bases so if you let this go, I think it almost ensures a downgrading in America's credit rating.
VELSHI: Ron, let me ask you something. You have a poll that you guys have conducted, "The National Journal," and "United Technologies," asking people what the biggest economic problem out there is.
I have always believed these numbers to be true, that most Americans, look, the economy ranks above everything else. But when you break down the economy, unemployment is coming in at 34 percent, gas and food prices following at 25 percent, then the federal government and then the government debt default.
If you add up concerns about federal government and government debt and default, you're still not as high as gas and food prices and you're still way lower than unemployment.
How do we hoodwink everybody into thinking we are somehow at the edge of a praecipes and we're going to risk our credit rating in this country for that when the biggest concern in this country is jobs.
BROWNSTEIN: Right, you can make the argument that Washington really should have been in these last several months on how you create jobs. The long-term deficit and debt is obviously a serious problem, but it did not have to be solved as part of raising the debt ceiling.
That was a choice that the Republican leadership in the House made and having made that choice, they -- kind of incumbent on them to find a way out of the cul-de-sac we're in.
One thing that's striking in the poll and which those results point to, on the one hand our poll, like others, this poll shows that more people right now trust President Obama than the House Republicans on both the issue of the debt and the deficit.
I think the contrast in last night's speech probably reinforced that advantage. On the other hand, as those numbers suggest, people do not share the sense of urgency that the possibility of default is a crisis in the same way that certainly Wall Street and most economists do.
So what President Obama has is kind of a general sense that public supports his approach, what the public does not -- is not sharing his sense of urgency and providing that pressure on the members yet to avoid this.
That pressure is going to have to come from elite institutions like the U.S. Chamber of Commerce, which was a big supporter of the Republicans and is now warning that default would be, quote, "catastrophic."
ROMANS: You know, you could argue they're not talking about jobs. They're dangling the shiny keys of this because they can't fix jobs. The jobs have been a very hard problem to solve and maybe nobody knows how to solve it. So they're going to focus on this and use that as a means to try to talk about jobs.
VELSHI: Guys, thank you for joining us. It's good to talk to folks who know a lot about this. Ron Brownstein, CNN's senior political analyst, editorial director at "The National Journal," and Norman Ornstein is a resident scholar at the American Enterprise Institute.
ROMANS: Two guys who have seen what a norm called its fandango. They've seen it all and here we are again. We want to know what you think about this.
If you had the budget axe, what would you cut, what would you keep? E-mail us, give us a tweet. Tell us on Facebook. Some would say taxes for me. I wouldn't cut so many programs. I would be starting to raise taxes, get rid of the some Bush-Era tax cuts. Some of you are saying, no, you would end the Department of Education.
VELHSI: A lot talking about military overseas, foreign aid.
CHETRY: What would you cut and what do you think we should keep?
VELSHI: That's right.
CHETRY: Also there is another political battle going on this morning, FAA showdown, shutdown, this putting airport work in a holding pattern. We'll have more details on that.
VELSHI: And a high altitude face-off. New reports out this morning, two Chinese fighter planes intruded into Taiwanese air space as they tried to chase away a U.S. spy plane. Those stories and more coming up next. It's 44 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: Good morning, Washington, D.C. It's everyone's favorite work place with all of America's favorite elected officials. It's fair and 78 degrees, it feels like 78. Sunny -- mostly sunny really, 94 later today. But we hope none of them are going outside, they're all inside the air conditioning doing the hard work we pay them to do.
VELSHI: Nobody should know what the temperature outside is in Washington.
CHETRY: They have a lot of work to do.
And actually, Congress failed to authorize funding for the FAA and so, now, the Federal Aviation Administration has been forced to furlough thousands of employees and dozens of major projects are put on hold because the lawmakers can't agree. Air traffic controllers remain on the job, but nearly 4,000 other workers in 35 states have been told to stay home. The reason is efforts to renew funding for the FAA hit a stumbling block Friday when House Republicans tried to make it harder for airline and rail workers to unionize. That was part of the deal that did not then get approved.
VELSHI: OK. It's not just the budget -- it's not just the debt ceiling stuff, there's things being stalled in Washington.
The U.S. and China reportedly tangled in one of the world's hot spots. "The Financial Times" says two Chinese jets crossed into Taiwanese air space to pursue a U.S. spy plane back I June. China's planes turned around when Taiwanese planes were then scrambled.
Taiwan's "United Daily News" says one of the Chinese fighters crossed the middle of the Taiwan Strait which is widely considered to be the boundary between Taiwan's air space and that of mainland China.
And, by the way, this is not a common occurrence at all. This has not happened at least we've not heard it's happened in decades.
ROMANS: One of the hotly contested pieces of territory in the world and a place where two rivals are poised with the U.S. stuck between being an ally to Taiwan or China.
VELSHI: But they've managed to keep military peace for a very long time.
ROMANS: Oh, yes. Oh, yes.
All right. We're also following breaking news right now. More than 30 people are now dead after a Moroccan military plane slammed into a mountain. The "AFP" reports the crash happened in the south of the country, 73 people were onboard, mostly Moroccan soldiers. Five people have been found alive.
CHETRY: Your morning headlines are up next.
Plus, some good news, especially if you pay out of pocket for your prescriptions. The cost of several prescription medicines used by millions of people every day are about to plummet. We'll explain why coming up.
It's 49 minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Fifty minutes past the hour. A look at your morning's headlines.
Massacre suspect Anders Breivik now claiming he had help from several terror cells to launch Friday's attack that killed 16 people in Norway. Breivik's lawyers also saying this morning that his client was on some kind of drug to stay awake and alert during that killing spree.
President Obama calling on the nation to pressure their elected officials to work out a debt ceiling compromise. That challenge came during the president's primetime speech last night. He also argued that the current stalemate is, quote, "no way to run the greatest country on Earth."
In his response, House Speaker John Boehner said that the president wants a blank check and that's not going to happen. He also insisted the solution is simple: stop spending and don't raise taxes.
Right now, U.S. stock futures are trading higher this morning. Investors are waiting on several economic reports on housing, as well as consumer confidence numbers coming out later this morning. Wall Street is watching Capitol Hill closely today for updates on any progress in this debt ceiling debate.
You're caught up on today's headlines.
AMERICAN MORNING is back right after the break.
(COMMERCIAL BREAK)
CHETRY: Where is that?
VELSHI: Wow. That looks like the lower third of Atlanta. Wow, that's a foggy day in Atlanta. It's 74 degrees right now. It says partly cloudy. It seems lots of cloudy.
CHETRY: Yes. Either that or somebody hung a white t-shirt over --
VELSHI: Jacqui was showing us -- she said it's a low cloud actually. Going to be 91 degrees in Atlanta but can't see anything from there. Wow. I haven't seen that before.
ROMANS: All right. I want to tell you about prescription drugs and prescription drug cost. Millions of people take these drugs every day and they are about to get cheaper. Many drugs are going to go on sale as generics the next few years.
CHETRY: You know, these patents are expiring.
Senior medical correspondent Elizabeth Cohen is here to explain what it could mean for your money and health.
First of all, hi, Elizabeth. What drugs are we talking about here?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes. We're talking about some really popular drugs and this is great news. Whenever a drug goes from being exclusively brand name to being something that can also be a generic, it is always good news for the consumer.
So, let's take a look at just four of these drugs where, in the next year, we expect them to go generic. Drugs like Lipitor, which is the statin for cholesterol; Plavix, which is the anticlotting drug that you guys are referring; Singulair, which is for allergies; and Lexapro, which is a popular antidepressant.
And so, it's you know, these prices would only really come down once they go generic, because right now, only one company makes them. We all know basic economics. When only one company makes something, it's going to be pretty expensive.
VELSHI: What is the -- how much of these drugs usually go down by when they go generic? Is it a sort of a normal amount? Or does it vary depending on the drug?
COHEN: It does vary but it is usually quite substantial.
So, let's take a look at what the drugs cost right now and I think that will give you some kind of an idea. If you don't have insurance, if you're just paying out of pocket for Lipitor, it's about $186 a month. Plavix, $215 a month. Singulair, $182 a month. And Lexapro, $117 a month.
Now, I don't have a crystal ball, so I can't predict what they'll be when they're generic. But they are likely to be substantial. I mean, you might even see something like, let's say, in the realm of, I don't know, $15, $20, $30, $35 a month.
VELSHI: Wow.
COHEN: It could be something in that neighborhood. And then as time goes on, they could end up on the $4 generic list.
CHETRY: Now, some people are asking, are generic just as good? What do you say?
ROMANS: It's the same formulation, right? Exact formulation?
COHEN: Right. Experts will tell you it is the exact same formulation. There should be no difference whatsoever.
ROMANS: So, if you're taking one of these pricey drugs now and you're waiting for it to go generic, what should you do?
COHEN: Right. This is a great moment to be an empowered patient because one question, just question, can save you a ton of money. If you're prescribed, for example, Lipitor which is $186 a month, ask your doctor -- is there another drug that will work as well for me but will cost less? Because there are plenty of statin drugs that are $4 a month. I mean, you could get one for $4 a month. And it might very well work just as well for you.
Or if you're prescribed Lexapro, $117 a month. You could also take generic Prozac, which is like $16 a month.
So, just ask if you can take something else.
ROMANS: And your insurance company, believe it or not, sometimes pushes you along that direction first. They say, hey, by the way, we're not covering anymore if you have generic.
COHEN: Right. Sometimes you don't need to ask because your insurance company will make that decision. And I'm not saying there is always a less expensive alternative that will work just as well but often there is.
ROMANS: All right.
VELSHI: Elizabeth, thank you.
COHEN: Thanks.
CHETRY: Good stuff. Thanks so much.
ROMANS: About 57 minutes after the hour. We'll be back with top stories right after this break.
(COMMERCIAL BREAK)
