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Congress to Vote on Debt Deal; Markets Rally on Debt Deal; On the Chopping Block

Aired August 01, 2011 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DREW GRIFFIN, CNN ANCHOR: It is Monday, August, 1st, and I'm live in Studio 7, as we call it, here in Atlanta.

We are following every development going on in this nail-biter in Washington just hours before the deadline to raise that debt limit. The House and Senate expected to vote on a deal that was announced by President Obama and congressional leaders last night.

We are also going to be watching the White House briefing. That happens later this hour. The big question though is, will Congress approve this deal?

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), MAJORITY WHIP: We're lucky to have come up with this agreement within 48 hours of this deadline, and I hope we can pass it in the House and Senate in the next day or two and avert the first default on our national debt in history.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I am worried about the size of defense cuts that may be contemplated, but that doesn't mean I'm therefore rejecting the agreement. I'm just worried.

(END VIDEO CLIP)

GRIFFIN: Well, this is a head-scratcher. Stocks take a tumble after the debt relief rally that happened earlier this morning. The Dow surged more than 120 points at the opening bell, but a weak manufacturing report, boy, it just sank the market today.

Stocks posting their worst weekly performance in more than a year during a debt stalemate last week. Right now, the Dow, as you can see, is at 12,072. That's down 70 points.

Here's a real crisis going on in Syria. One day after tanks stormed the Syrian city of Hama, we're getting new reports of gunfire today in what's being described as a nationwide offensive against government protesters.

A human rights group says Sunday's clash killed more than 70 people in that country. At least 50 of them in the city of Hama. State TV says security forces were responding to "armed groups" who terrorized citizens by firing from the rooftops of buildings. That's according to the government there.

Egyptian security forces today shut down protests in Cairo's Tahrir Square. Activists say police beat those who didn't leave voluntarily. Thousands have been camped out on the square since early last month. They've been voicing frustration over what they see as slow pace of change after the ouster of longtime president Hosni Mubarak.

New video of an Egypt Air jet that caught on fire at Cairo's airport on Friday. Look at that smoke pouring out of the Boeing 777 after passengers had boarded. Officials say it was an electrical short in the cockpit. All 291 passengers evacuated safely.

In Iran, two American hikers could find out this week if they're going to be released from prison. Josh Fattal and Shane Bauer have been held for two years now. They say they are innocent of spying charges. Their companion, Sarah Shourd, was held for a year. She was set free last September for medical reasons. She's been pushing for their release.

(BEGIN VIDEO CLIP)

SARAH SHOURD, FREED HIKER: I would ask the Iranian authorities to show Shane and Josh the same compassion that they showed me. They deserve it just as much as I do, and they really have been suffering so long. I would also -- if I could seek to Shane and Josh, I would tell them that it's because of them that I'm standing here today.

(END VIDEO CLIP)

GRIFFIN: Mexican police say a notorious drug cartel leader confessed to ordering the deaths of 1,500 people. Federal officers detailed these accusations against this guy. His name is Jose Antonio Acosta Hernandez -- he's got one of those nicknames, "El Diego" -- a day after authorities announced his capture. He was one of the country's most wanted drug war suspects.

Well, the government is now requiring health insurance companies to provide birth control to women with no co-pays involved. The change comes following a recommendation by the Institute of Medicine.

(BEGIN VIDEO CLIP)

ELIZABETH COHEN, CNN SR. MEDICAL CORRESPONDENT: About 40 percent of all pregnancies in this country are unintended, Carol. And when they are not intended, they tend to get -- the moms tend to get less prenatal care. The babies tend to not do as well when they're born. And so that's why a lot of doctors and others got and said hey, obviously we want births in this country to be wanted.

(END VIDEO CLIP)

GRIFFIN: All right. The big story for this last week, they have a deal, but it's not a done deal until Congress approves it. So the cliffhanger over the debt limit is still playing out right now on Capitol Hill. Congressional leaders scrambling, trying to sell this deal to the rank and file members. That's going on right now.

Here are some of the highlights of the agreement.

In the short term, it includes close to $1 trillion in spending cuts, and then raises the debt ceiling by about the same amount. A bipartisan committee would be formed to recommend additional deficit reduction. That would total about another $1.5 trillion.

If that panel though can't agree, it's going to trigger across-the- board cuts. The deal also requires Congress to vote on a balanced budget amendment.

Let's bring in Congressional Correspondent Kate Bolduan and Christine Romans of our Money team.

Kate, give us a timetable here. When will this debate begin in the Senate?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: The timetable is a little squishy, actually, at the moment. What we are hearing is that the debate over this bill and votes will hopefully happen shortly after both parties in both the House and the Senate are meeting with their rank and file members. Those meetings are starting now and will continue over the next couple hours.

So we could potentially see debate begin somewhere after 12:30, maybe in the 1:00 hour. But it's also not entirely clear right now if the House or the Senate will be taking up this compromise bill first. It seem that party leaders are trying to work that out as we speak.

But if everyone cooperates, which, as you know, can be a challenge up here, I'm told that they could have this compromise bill passed with both the House and the Senate by the end of the day. But that is of course if party leaders can do what they are definitely trying to do right now in these party meetings, which is to sell this compromise to their members to show them while there is definitely something for everyone to dislike in this, this is the best deal they are going to get and why they should sign on to this.

We did get an update from the White House, an update to the schedule that Vice President Biden is actually coming over here to meet with House Democrats and Senate Democrats. So he will be in those meetings and obviously making the pitch there at this moment -- Drew.

GRIFFIN: Kate, thanks. A long day just beginning there.

It's already a long day down on Wall Street. Christine Romans is there.

Christine, what is going on? They have already seemed to pass over the debt deal and now they are on to another crisis they are dealing with on Wall Street.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I know. A near-term crisis that is the U.S. economy. Look, there was a manufacturing report that was pretty disappointing, quite frankly, that shows you that the U.S. economy is not on very strong footing here. So, even as you had hopes in world markets and in U.S. markets that the debt deal would perk things up, you had a reality set in on this disappointing manufacturing number that things went south again.

And don't forget, we have all known that this week it could be a complicated for the markets for a couple of reasons. One, we need to know where all these cuts are going to be coming from and what kind of impact they could have on the economy. There is a real fight going on now among some economists, Drew.

Some would say these cuts weren't big enough to really, really bend the curve for our long-term deficit, and that's a problem longer term. And there are those who say no, the economy is so weak, that even cuts of $917 billion are going to hurt job creation, and that's going to be hard for the economy in the short term.

We have a jobs report Friday, and it's not expected to show a lot of job creation. So you have some difficult waters here in the near term for investors -- Drew.

GRIFFIN: All right, Christine. We'll be checking with you as this day progresses. Thanks.

ROMANS: Sure.

GRIFFIN: And here's your chance to "Talk Back" on the big story of the day, the debt ceiling. Today's question: Do we get the government we want or the government we deserve?

Carol Costello joins us from New York to explain.

Carol, I'm just going to have to keep my mouth shut.

CAROL COSTELLO, CNN CORRESPONDENT: I think that's probably a good idea. So let's get going, shall we?

Standing up on principle, that kind of political courage is a rarity these days. Consider this: Senator John McCain once voted against the Bush tax cuts because he thought they hurt the middle class and the military. Oh, yes. That was 10 years ago.

In 1998, then-Democrat Joe Lieberman called out President Clinton for his "immoral sexual behavior." And George H.W. Bush joined Democrats in a deal to raise taxes even though he promised he would not.

Remember this now famous speech?

(BEGIN VIDEO CLIP)

GEORGE H. W. BUSH, PRESIDENT OF THE UNITED STATES: Read my lips: no new taxes.

(END VIDEO CLIP) COSTELLO: But Bush did raise taxes for the good of the country, and Americans rewarded him by voting him out of office. In the midterm elections, we elected 60 Tea Party congressmen because we liked their moxie. Americans voted for Mr. Obama because they wanted change and hope. You can bet that right now, a lot of those voters are scratching their heads.

I know lobbyists influence elections. So do the media and talk shows. And I know it's easy to point fingers. But the fact is we voted for these people.

Congress, in this current deal, will punish itself if it does not come up with a bipartisan agreement for the second round of cuts. That's not governing.

As University of Virginia professor Larry Sabato says, "if James Madison were alive, he might reconsider the political system's checks and balances. Power is divided in too many ways," Sabato says. "You go through hell just to get things done."

So the "Talk Back" question today: Do we get the government we want or the government we deserve?

Facebook.com/CarolCNN. I will read some of your comments later this hour -- Drew.

GRIFFIN: Look forward to it, Carol. Thanks.

(NEWSBREAK)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Congress, would you guys please remember the golden rule? Do unto others as you would have them do unto you. It's not do unto others before they do unto you. Please go back to Sunday school.

(END VIDEO CLIP)

GRIFFIN: I want to tell you what's happening right now in Washington, D.C.

The Senate, they're in a break right now. They're going into their respective caucuses, getting the deal really explained to them. At the White House, the president is sending over the vice president to Capitol Hill to try to get this deal through.

We are watching it all as the pieces of this deal are now on the table. The next 24 hours are going to be a scramble to put it all together. Not everybody happy with what's emerging.

The Senate is set to vote on the 74-page bill at 2:00 p.m. Eastern -- that's what we're told -- today. The House will vote later. But with time running out, will there be enough votes to pass? One part of the bill that has people talking, potential defense cuts. Our Sandra Endo is in Los Alamitos, where members of the California National Guard are returning home today from Iraq.

Sandra?

SANDRA ENDO, CNN CORRESPONDENT: Well, Drew, yes, a very happy homecoming here. Friends and family members are gathered to welcome their loved ones after a yearlong deployment in Iraq. But with the deal in place in Washington which potentially could blow a $350 billion spending cut to the defense budget over 10 years, it's kind of a hard time for a lot of family members here to really take in this new information. And they have a lot of concerns.

I'm here with the White family.

You are waiting for Jacob to come back, your husband. And you are hearing about this deal in Washington. We don't know the specifics of what exactly will be cut to the defense budget, but so far, what do you think of the deal that was dealt in Washington?

UNIDENTIFIED FEMALE: It's incredibly frustrating and sad that these men and women who make such a big sacrifice for their country, for their families have to worry about where they're going to sleep or where they're going to eat if they don't have a strong support system. And they have to worry about paychecks being cut and support and all that.

ENDO: Luckily, because there was a deal that was struck yesterday -- they're going to vote on it today, obviously -- those paychecks will come. However, there could be potential spending cuts for 10 years now to the military, which is the first in a long time, since 1990, actually.

What do you think about that when you know that your husband has to go out there and fight for the country?

UNIDENTIFIED FEMALE: It's upsetting. He gives so much.

He had to say goodbye to our baby girl a year ago. I mean, it's frustrating that all his hard work, everything he does, and he has to worry about 10 years from now -- this huge sacrifice he made. People in Washington, they didn't have to say goodbye to anybody and they're going to be fine.

ENDO: And let's talk to father here, Jerry.

You are a veteran yourself and you were watching all this play out in Washington. What do you think of the deal that was struck?

JERRY WHITE, WAITING FOR SON TO RETURN FROM IRAQ: Well, I see the way things are at home for the families of those that get assistance from the government, and I also know that there a lot of veterans out there. And we have been watching this debacle over the last month and a half between Congress and the president, and it's about time that they understand that there is going to be a backlash in Washington, D.C., in about a year or two when all of those that are in office might find themselves out of office.

I'm sick and tired of listening to their six-figure retirements and listening to their commissary and all those other privileges. And now they're going to cut out of the budgets of veterans, they're going to cut out of the budgets of the active duty military and reserves, which, to me, if they don't want to fight for their country, then they ought to leave those people alone and keep those people going.

And those of us that are veterans who have served in our country in an honorable situation, we depend on federal funds to pay for our disabilities and for our retirements. And we gave the most and get the least, and it's always coming down to the fact that everything is on the back of veterans and those that have served and those that get assistance.

ENDO: Like we said before, we don't know exactly where these cuts are going to take place in terms of the military budget, but the fact that $350 billion will be cut over 10 years, do you think there is room for savings here?

WHITE: Well, I believe there's always room for savings because I think we give out a lot of money to a lot other people and situations and so on that, they don't deserve our money. We have been fighting two wars on two fronts, and we have been fighting for people to keep them free. And now, all of a sudden, those of us who fought over the years to serve our country are finding out that we are the ones who are going to pay.

So, bring our money home and bring our money to our people, and don't worry about building mosques and all this other stuff that we do.

ENDO: All right. Thank you so much. We look forward to meeting your son when he comes back.

So, Drew, definitely strong opinions here at this day of homecoming here in California.

GRIFFIN: Yes. Sandra, as you have been trying to point out, I think strong opinions, but not a lot of facts yet on what actually is going to be cut, and a lot of assumptions being made.

ENDO: Absolutely. And we are just trying to find out the details coming out of Washington.

Obviously, this is all very new because of the deal that was brokered last night. So everyone just waiting to find out the details. All of us are here waiting. And, of course, as they say, the devil is in the details. But we are waiting to hear more from lawmakers in Washington as well.

GRIFFIN: Right. OK. Sandra Endo, thank you so much.

Well, some of the stories our affiliates are covering across the country.

Today is the fourth anniversary of that Minneapolis bridge collapse. They are going to have a service there. It's going to be held in the afternoon to dedicate a memorial with the names of the 13 people who were killed when that bridge collapsed. Thirteen doves also going to be released.

Another 145 people were injured when the bridge span broke up. It happened right during evening rush hour, dropping cars into the Mississippi River.

The FBI says it's investigating a credible lead in a 40-year-old hijacking mystery that has become the stuff of legend. That man known as D.B. Cooper, he hijacked a flight, parachuted out of the back of the plane with $200,000 in ransom money.

The FBI says it's looking at a new suspect and checking an item for fingerprints. We'll keep you posted on that.

Hey, it's not snakes on a plane. It's snakes on a car. A family driving down the highway in Memphis watched a snake slither from under the hood of their SUV and onto the windshield.

The stock market surged on news of that deal, then tanked. What's driving the markets now? A live report from the New York Stock Exchange.

(COMMERCIAL BREAK)

GRIFFIN: Bring you up to date live.

The drama is happening behind the scenes on Capitol Hill, where the various Republican and Democratic Parties are trying to sell this debt ceiling deal to their respective parties. The White House also involved with this. And the briefing today at the White House is expected to start in about 25 minutes or so. We're going to have live coverage of that.

On CNNMoney.com, the lead story is the debt ceiling, not just what's going on, but the devil is in the details. They have a breakdown there to see what is going on.

And what is going on, on Wall Street right now is not good. The Dow down 63, almost 64 points after a bump on the deal. There was some more bad news. Markets around the world rose overnight on news of the deal, but now they've tanked.

CNN's Alison Kosik is at the New York Stock Exchange.

Joined by a trader, I guess, Alison, who maybe can explain what's going on.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: I am.

Well, I can give you an idea of what's going on here. We did see the Dow pop at the open, go up as much as 120 points on the heels of that debt deal. But then, immediately after we get a manufacturing report, we saw the Dow fall the other way. Right now, the Dow, down about 62 points. We got a weak manufacturing report showing that we are getting dangerously close to a level that shows almost no growth in manufacturing. Obviously, Wall Street not taking it well.

So, yes, getting more perspective with me, Kenny Polcari. He's a trader here at the New York Stock Exchange.

Kenny, is this deal just a little too little, a little too late? Is confidence really shot at this point?

KENNY POLCARI, MANAGING DIRECTOR, ICAP CORPORATES: Well, you know what? I think definitely confidence has been tested and has been shot, but I think the deal is -- it's come right down to the wire. I think everyone thinks that the deal is going to happen.

Even as much as they say the drama is happening right down in Washington, I think at the end of the day, people are going to expect that the legislators are going to do the right thing and vote for the deal. Is it a deal that Wall Street likes? I think partly the market is telling you no. I think partly the market is also telling you that the ISM number which was very weak, logically it makes sense because the GDP number last week was just off the charts. And other macro reports that we have been getting over the last couple of weeks have all been really benign to negative. Right?

So it makes sense it's like that. The market doesn't like it. Clearly, the market is going to start to focus on the fundamentals again once this debt deal is considered to be done.

KOSIK: What are about a downgrade? A downgrade is still possible of the U.S. credit rating, which is at AAA right now.

POLCARI: I think the downgrade is going to happen. I think that it's almost too late for it not to happen.

The S&P has been threatening a downgrade now for a couple of week, and it's almost like if they don't do this downgrade now, they didn't get what they said they wanted. S&P said they wanted $4 trillion in cuts. They didn't get $4 trillion in cuts.

We got $900 billion, which doesn't start until 2013, and then maybe $1.2 trillion if the legislators can come up with a deal come November. So, there's a lot of uncertainty still in the marketplace. There's a lot of uncertainty with this deal. And I think what the market is telling you is that they're unsettled with it.

KOSIK: One last question. Are 401(k)s taking a hit? If we do get a downgrade, will we see a another hit? Yes or no?

POLCARI: I think the market turns a little bit lower. I don't think it turns much lower. Yes, is everyone taking a hit right now? They are.

I think the market probably settles right in here. The trend line is 1,260. I would expect that will be the low.

KOSIK: All right. Thanks a lot.

Drew, I'll send it back to you.

GRIFFIN: All right, Alison.

(NEWSBREAK)

(COMMERCIAL BREAK)

GRIFFIN: Here's a rundown on some of the stories we are working on.

A White House briefing minutes away. The latest on the debt ceiling, of course.

Then, debt concerns spread in Orange, New Jersey. This is a town where seniors are kind of in a panic about their Social Security checks. And workers dreading the possibility that city may have more layoffs.

Later, do we get the government we want or the one we deserve? Your chance to "Talk Back" with our Carol Costello. That's today's question that Carol is asking.

Well, the drama over the debt deal has most of us worried about our 401(k)s, mortgages, car loan rates. But the stalemate has also rattled global marks and international investors.

And CNN's Richard Quest joins us from this side of the Atlantic to talk about overseas reaction.

Boy, they stuck you out on the Mall on one of the hottest days you could probably pick, Richard. Really miserable.

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Not only that. It's 96 or something degrees here. I'm in a hot wool suit.

Look, they say that this debt deal is a dog of a deal. So we found the dog. This is Emily who is going to have an opinion on the deal. Well, Emily may not have an opinion, but her certainly owner does.

Hello. Do your name is?

UNIDENTIFIED MALE: Glen.

QUEST: You're from?

UNIDENTIFIED MALE: Plantsville, Connecticut.

QUEST: From Connecticut. Sir, the deal has been reached. How worried were you and what do you think of what's happening?

UNIDENTIFIED MALE: It took way too long. The market obviously was affected by the length of time that it took. Hopefully it'll work. The people who are ultimately going to pay are our children, I believe, if we don't get out of this.

QUEST: And though your children are over there somewhere --

UNIDENTIFIED MALE: They're over there somewhere.

QUEST: So are you worried that you're borrowing all the money and leave them with the bill?

UNIDENTIFIED MALE: Unfortunately I believe that's what's going to happen.

QUEST: Right. Now, we wanted some international reaction. So, where are you from?

UNIDENTIFIED MALE: I'm from Wales.

QUEST: From Wales in the UK.

UNIDENTIFIED MALE: That's correct.

QUEST: Now, look. As somebody who has been looking at it from afar, what would you say to these people in America?

UNIDENTIFIED MALE: I agree with him 100 percent. I think it's had an impact right across the world, particularly of the euro. It's had a major effect on the euro because the dollar has actually weakened a lot.

QUEST: Now, in the UK, we have taken a dramatic amount of austerity and the government has taken a huge amount of criticism.

UNIDENTIFIED MALE: That's correct. But I think what they did, they did it positively and immediately whereas what's happened here is they vacillated too long.

QUEST: Waited and vacillated too long? Is that fair?

UNIDENTIFIED MALE: I would agree.

QUEST: But are you prepared to take the misery of cuts that he's taking back home?

UNIDENTIFIED MALE: I don't think we have a choice. The cuts have to be made. It's got to be made.

UNIDENTIFIED MALE: He's right. There is no doubt. He's right. The cuts have to be made. What is saddening really is that the bankers have got away with everything all the time.

UNIDENTIFIED MALE: I agree. The bankers got their bailout and now it's our turn to pay for their mistakes.

QUEST: So there you have it. The Welsh view, the Connecticut view. And as for the dog's view, what do you think about the pay out so far?

(LAUGHTER)

QUEST: I think that's the probably most intelligent thing we'll outside this Congress so far.

GRIFFIN: Richard Quest on the mall. Thanks, Richard. Appreciate that.

You know, members of Congress may need physical therapy after all the arm twisting going on over this debt deal. Some on both sides of the aisle are not happy with this agreement.

Joining us from Capitol Hill, Democratic Congresswoman Barbara Lee of California, thanks for joining us.

You know, I don't know if you've gotten all the details that you want before you decide how you are going to vote on this, but you did, I believe, say that this was similar to the Boehner deal and that's a deal you voted against, Congresswoman.

REP. BARBARA LEE (D), CALIFORNIA: It's very similar to the Boehner deal and actually with the footprints and fingerprints of Senator McConnell. And, of course that means that I worry more about Social Security and Medicaid being at risk.

I was reading actually some of Speaker Boehner's talking points in his Power Point presentation and let me refer to you one. He says it requires baseline to be current law, effectively making it impossible for joint committee it increase taxes.

Now we know what this means. If, in fact, there are these huge cuts now, we know discretionary cuts, we've got to see what those cuts are. But we know they're going to impact the most vulnerable, low income, the working poor and poor and middle income individuals. We also know that without any enhanced revenues on the table, this opens the door for cuts in Medicare, Social Security and Medicaid. That is just totally unacceptable.

But we also know that this joint committee -- let me say this joint committee that's going to be put together -- I'm on the Appropriations Committee and I know the type of deadlocks that take place there because the Tea Party members were elected to Congress to dismantle government and that is what they are doing.

And so we're going to see this debate again in December. And it's really a tragedy because we could have raised the debt ceiling last year. We must raise it. We cannot allow the country to default. But we could have done it in a different way.

And so we're in the process now of reviewing this. We will be meeting with the vice president at noon. The Congressional Black Caucus will meet. And then the Congressional Progressive Caucus. So we're in the in the process of analyzing this and really determining who is going to be hurt the worst.

GRIFFIN: All right. Congresswoman, first, I don't think anybody in the Tea Party was elected to dismantle the government.

LEE: Well, it appears that because when you look at the type of proposals and their agenda, it's all about saying no to anything that would allow for opportunities and for job creation and for investments in people.

GRIFFIN: Congressman -- let me stick to your --

LEE: You know, they have not put forth any job agenda.

GRIFFIN: Let me stick to your party, the party that controls the Senate, the part that controls the White House. The vice president is on his way to talk to you and to other Democrats in the House to try to get you to approve this deal.

So let me ask you flat out. Did the president and the Democrats in the Senate sell you guys out?

LEE: I will be very interested to hear what the vice president says. And, let me tell you, the president was dealt a terrible hand, as you know, as a result of the Bush economic policies. We have to remember that.

Secondly, let me say, our leader Nancy Pelosi and Senator Reid, they have been stall walked in terms of making sure that senior citizens and Medicare and Medicaid are protected and that our voice is at that negotiating table.

We're members of Congress, we have to look out for constituents. The American people are hurting and we want to make sure that once we turn the page that jobs are created. You didn't hear that discussion take place much at all. This was a deal that was driven by the Tea Party and Speaker Boehner and Senator McConnell.

It should have been a deal that was not associated with any debt ceiling debate or discussion. We've raised the debt ceiling many times under Democratic and Republican presidents. It has been a clean debt ceiling. I have voted for that in the past and we should have done that this time so we can begin to look at how we one, create jobs, because so many people are unemployed. You have 99ers, people who have been unemployed over 99 weeks who can't even now apply for unemployment.

We need to figure out how they get taken care of. We need to figure out how we create jobs. And, yes, deficit reduction is very important, but the greatest way to reduce the deficit is to create jobs. Consumer spending. Many economists, in fact, most economists say that's what we should do.

GRIFFIN: Sounds like right now you're a no on this?

LEE: Well, it sounds like right now that Speaker Boehner has put together the framework for a deal that was similar to the proposal that he presented and that is what he presented to his Republican caucus.

He said no tax enhancements and no revenue increases. And that to me is very wrong. Billionaires and millionaires and corporate tax loopholes, these two wars that did not need to be fought. We have a way to raise revenue. This is not a balanced approach. I want to hear what the vice president has to say. I have many questions. I'm going to ask the questions, as are many members of the Democratic caucus.

And so we'll see what they have to say. But I think this is a pathway that opens the door to begin major cuts in Medicare and Medicaid and that is unacceptable. And these discretionary cuts I know will hurt the poor and the most vulnerable and that is unacceptable.

GRIFFIN: Congresswoman Lee, we look forward to see how you're going to vote. Take care. Thanks for joining us.

LEE: Thank you.

GRIFFIN: Next hour we're going to get a view from the other side of the aisle. Republican Congressman Joe Walsh of Illinois joins us to talk about his version of this debt deal.

The folks in Washington say they do have a deal but what does it mean for your hometown? We're going to take a closer look at that.

And besides the U.S., what is the only other developed country in the world with a debt ceiling? Take your pick. Denmark, Germany or Austria? We'll have the answer in a bit.

(COMMERCIAL BREAK)

GRIFFIN: So what is the only other developed country in the world with a debt ceiling besides us, the U.S.? The answer is Denmark, A. But the debt ceiling there is set so high they'll likely never hit it. There's the answer.

Live pictures from the White House, a briefing beginning any moment now. We're waiting for Jay Carney to come out. The clock ticking.

Also, there's meetings going on in the Senate. We have senators arriving there for the various deals and meetings. There's Senator Reid. He's going to have to try this to his Democrats up in the Senate and get a deal passed.

And we're told that John Boehner is going to have a news conference. I believe that's going to be at 1:30 today.

So all these events happening live just within the next couple of hours and, of course, you're going to catch them all live, right here on CNN.

What does the new budget deal mean for state governments? Felicia Taylor in Orange, New Jersey. This is a cash-strapped state that has a lot riding on what happens next with the plan.

And Felicia, what has people worried there?

FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: Well, what people are worried about most of all is whether or not they're going to get their Social Security checks, whether or not they're going to get the Medicare that they deserve and have worked for years to receive. And that's what these spending cuts are about. Will there be the entitlement programs down the road? And I'm joined by two residents of Orange, New Jersey.

We'll start with Howard Phillips. You are a senior citizen so you've just begun collecting Social Security. Are you worried that it's not going to be there down the road?

HOWARD PHILLIPS, RETIRED SALES MANAGER: You know something? Worried is not the concern now. I'm extremely concerned and like I said earlier, this is something that I must address. There's hundreds and hundreds of people should get involved in this. See I am just now beginning to receive my Social Security but those who have not received it, those really have some major, major concerns. And I'm not saying I don't concerns today either, because who knows. I'm not certain whether they're going to start cutting it immediately. So I am deeply concerned.

TAYLOR: Are you worried about making ends meet, that the money just isn't going to be there for the senior citizens in the country?

PHILLIPS: Absolutely, because, you know, with the rent increases and all these things that are concerned, you know, (INAUDIBLE), budget, those things I'm concerned about. Right now my wife and I, we're just concerned about where I'm living now, are the (INAUDIBLE) going to increase, am I going to be able to afford it. Those are my concerns right at this point right now because I know right now the rent is constantly going up and my pay is not -- you know, I'm receiving Social Security now and that's going to (INAUDIBLE). So, I am concerned about the near future. I most certainly am.

TAYLOR: Jennifer, you grew up in this town of Orange, New Jersey. How frustrated are you about what's happening in Washington?

JENNIFER SAVINO, EPSTEIN HARDWARE: I'm very frustrated because I worry all the time. I mean, I work 40 years and you're going to tell me when I'm 66 in two months, because I can't leave at 65 now, that there's not going to be any money for me to retire on? And, if you put money away in 401(k)s and individual IRAs, with the way they're handling everything in Washington, the market is going to drop, the money is going to drop and I have not recouped what we lost the last time the market went drastically down.

So, yes. I'm really concerned. Most of all, not only for myself, but the next generation because I have adult children. What's going to happen to them?

TAYLOR: So Drew, as you can see, what really is the problem is that people are worried about down the road. I mean, are the problems going to get fixed in Washington? What sounds like a victory down in Washington is definitely not a victory on Main Street.

GRIFFIN: It's so interesting Felicia, because we were talking to the military vets out in California, Sandra Endo. Same thing. Everybody believes their personal paycheck, their government program is going to be cut when we don't have any of the details yet. Even the Congresswoman was alluding to the fact that there's going to be draconian cuts in all this. There just seems to be a lot of unnecessary fear out there coming from Washington.

TAYLOR: Well, it's all the uncertainty. We don't have any idea what these cuts are going to be. They say that there's a deal on the table, but are we going to see federal grants being handed out, or will they be diminished? Does that mean reduced police forces, does it mean firefighters aren't going to have jobs, or that there won't be any job creation?

As you well know, that's one of the major concerns in in the U.S., is whether or not there's going to be jobs. We're at 9.2 percent. How frustrating is it that Washington can't get it together enough to help its people. What happened to getting it together and having a compromise?

GRIFFIN: Good. Glad you're giving voice to those people down there in Orange. Thanks a lot, Felicia. Appreciate that.

Hey, there's some other news going on that involves Casey Anthony. She has been ordered to serve probation in the county of Orange. We have some details. You're asking why, right? This is because of her conviction on a check fraud case. She will serve one year supervised probation. She's to report to the probation office within 72 hours. And, as we get more details, we'll certainly pass them along. But this is Casey Anthony being released from custody after she was acquitted in her trial. We'll continue to follow that.

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GRIFFIN: This just happened a few minutes ago. That's the Vice President Biden over in the Senate. He's going to go talk to his former colleagues in the Senate, trying to sell them this deal that the president brokered on the debt ceiling. We'll let you know when that breaks if he's been able to convince enough of his former colleagues to get it passed.

Everyone in the nation's capital talking about one thing, right? The scramble to get this debt deal through before the clock runs out. Jim Acosta, part of the Best Political Team on Television is live at the political desk in Washington.

And Jim, the president finally got his deal. That could help in the polls. But some folks are saying he lost a lot of political muscle in this trade off.

What did he have to give up here?

JIM ACOSTA, CNN CORRESPONDENT: Well, you talk to a lot of Democrats on the Hill today, Drew, they will tell you that he gave up the store, that he gave away just about everything in order to get this deal done.

But what the president gains in all of this is they won't have to go through this again six months from now. There was some talk in some of the earlier proposals that there might be another debt ceiling vote that would have to take place in the fall or around Christmastime. And that is now out of the deal, it is not a part of this deal and it gets the president beyond 2012, so he can focus on the re-election campaign. So that is something that they're probably pretty happy about.

But, you know, I will tell you, drew, that if you talk to a lot of Democrats on the Hill today, they are pretty steamed at this president over this deal that he's cut and that is why you see the vice president on the Hill today. They are trying to rally the forces because, you know, they have a deal right now but until there are votes this deal is not done, Drew.

GRIFFIN: You know, I was asking Congresswoman Barbara Lee about this and reminding her that Democrats control the Senate and the White House. I mean, I guess this is more for a political analysts, Jim, but it really seems like they got out-maneuvered on this?

ACOSTA: Well the Tea Party Caucus inside the House really drove the debate, right? And if you talk to a lot of liberal Democrats like Barbara Lee, they will tell you that they feel this entire process will being held hostage by members of the Tea Party who said, basically you're not getting a debt ceiling unless we have cuts only, unless revenues are off the table.

And in that that kind of environment, it's difficult to extract the deal you would like to have when the other side is saying, hey, we'll go past the ceiling debt deadline, we're happy to do that unless we get what we want.

And so that is basically where we are right now and that's why a lot of people in the town this morning are saying the narrative is the Tea Party won this one, even though many of them may not vote for it, Drew.

GRIFFIN: Jim, appreciate that.

And, of course, for the latest political news, you know where to go. It's CNNPolitics.com. All the analysis is there.

August is here. Before you know it, kids -- I hate to tell you this -- going back to school. Crisis of your own. You know what it means -- shopping. But you may be paying more for supplies.

Alison Kosik is here with Today's Top Tips on saving on those back to school items.

Alison, I've always hated this time of year.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, yes. Especially if you've got not much money in the old pocketbook.

Yes, expect to spend up to 25 percent more this year, that's according to Huntington Bank's annual backpack index. Yes, there's one of those. So if you break it down, the index says, if you've got a kid going to elementary school, students could pay up to $530 for supplies and fees for school activities. You'll shell out almost $700 for middle school kids. And high school families are looking at an $1,100 bill, Drew. GRIFFIN: Wow. Most kids get that list of supplies from their school but it doesn't include the clothes, right, the text stuff?

KOSIK: Exactly. And, you know what the advice is? Shop in your own home first. That's what Janet Bodnar with Kiplinger's and author of "Money Smart Kid" says to do. Go ahead and take inventory of what's in your kids' drawers, the closets, look under the bed. You know, they may have a lot of supplies on that list already.

And Bodnar says a lot comes down to needs versus wants with your kids. So if they're old enough, have them get involved in comparison shop.

Also, Consumer Reports' Smart Shop magazine says 16 states have tax holidays this year. Many of those breaks are on clothes, school supplies and computers. And to see if your state made the cut, go to Federation of Tax Administrator's web site at taxadmin.org. And click on the link to the state list and you may get some deals there, Drew.

GRIFFIN: All right, Alison. Thanks a lot.

I want to let you all know we're waiting for the White House briefing to begin any minute. We will follow that as it takes place in that room. We'll be right back.

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GRIFFIN: The White House briefing is under way. Jay Carney at the podium just talking shop right now, and laying out some procedures and some timelines. Gloria Borger is going to watch it with us.

And Gloria, what are you expecting from the White House today? What question would you ask if you were sitting in the front row?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Do you have the votes? That would be the question. And the response I would presume would be, ask the Republicans.

I think the big drama here today is of course whether John Boehner -- how much of his caucus he's going to lose. My guess is he could lose as many as 80 members of his caucus, and whether Nancy Pelosi can provide the votes among her Democrats, as you pointed out earlier, some of whom are not very happy with this to get this over the top, and whether the vice president and president can persuade them to do it.

You know, I remember back with that TARP vote in the heat of the 2008 election where we were all waiting, and remember it failed? Everybody sort of assumed they had cut a deal and it would pass and then, of course, it failed and then they came back the next day and passed it after the market dropped over 70 points, remember that?

GRIFFIN: I certainly do.

BORGER: So -- yes. So I think the question here now is will the Democrats get in line behind the president?

GRIFFIN: All right, Gloria. Let's see if somebody asks that question.