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American Morning
Boehner Delays Vote on Debt Ceiling Bill; Senator Introduces Bill Prioritizing Federal Financial Obligations; Suicide Bomber Kills Kandahar Mayor; Man Accused of Threatening President; No Vote on Boehner's Debt Plan; "I Wouldn't Raise the Debt Ceiling"; Oslo Train Station Evacuated; Teen Hitman Found Guilty in Mexico; Using the Force on Washington
Aired July 27, 2011 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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KIRAN CHETRY, CNN ANCHOR (voice-over): Well, also word this morning, Congress could get a little bit of breathing room to negotiate a deal that would raise the nation's debt ceiling. According to the "New York Times," slightly higher than expected taxes incoming could actually mean there's a little bit more time past August 2nd on this AMERICAN MORNING.
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ALI VELSHI, CNN ANCHOR: All right. More money, more problems. The House speaker's debt reduction plan runs into some trouble when they run the numbers. Good morning. Welcome to AMERICAN MORNING. I'm Ali Velshi. These are my friends.
(LAUGHTER)
CHRISTINE ROMANS, CNN ANCHOR: For now.
CHETRY: Right. It's Wednesday, July 27th. At least, we can agree on things. Still, obviously, having problems over any type of agreement on the debt ceiling.
ROMANS: That's right.
CHETRY: And raising it.
ROMANS: Let's start there, because a key House vote to prevent an unprecedented government default now being postponed with just six days to save America from not being able to pay all of its bills, potentially, defaulting on its debt. House Speaker John Boehner is now rewriting his bill, because, hey, it doesn't cut enough spending as he promised, so he's going back to make sure it does.
VELSHI: It went to the Congressional Budget Office, has a look at all these things, and they said the math doesn't add up. Also developing this morning, reports that there might be some wiggle room on the August 2nd deadline. Let's get straight to Washington on both of these developments. Joe Johns standing by live. Good morning, Joe.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Hey, Ali. Certainly a setback, I suppose you could call it an embarrassment for the speaker but for the fact that the whole debt ceiling controversy is an embarrassment. Nonetheless, the speaker according to sources had to postpone this vote on his proposal to resolve the debt ceiling because the CBO, the Congressional Budget Office, the folks who crunch the budget numbers, said the Boehner plan would not create the savings he was looking for.
He had said the plan would add up to more than $1 trillion in savings, but CBO said it was only going to get about $850 billion. This is not all bad news for Boehner, because having an excuse to postpone the vote that was scheduled for today buys him more time to round up support from Republican colleagues. And he clearly still has some work to do. Rank and file Republicans have been saying it won't pass and they won't vote for it. Listen.
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REP. JIM JORDAN, (R) OHIO: If you look at this, it's about a $7 billion reduction in spending from what we're currently at. We advocated something more in the cap and balance plan. We advocated something much more in the budget plan that the House passed. We have real concerns about the commission, the idea the 12 member commission, six Democrats and one Republican deciding they wanted to raise taxes. You can't keep that off the floor. It comes to the floor. Then there's a potential tax increase. So we think there are real problems with this plan.
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JOHNS: Complicating all this, Democrats are trashing the bill, too. The Senate majority leader said it's DOA even if it clears the House. And he continues to sell his bill. Listen.
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HARRY REID, (D-NV) SENATE MAJORITY LEADER: The Senate plan is a reasonable middle ground. Democrats support it because it protects middle class. It prevents damaging cuts to Social Security, Medicare, Medicaid. Republicans should support it because it contains the two things they've asked for all along. It does not contain revenues and the amount of cut meets the amount of debt ceiling increase.
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JOHNS: Now, there are a couple ways of looking at this. The obvious point is that the Congress and the president are still no closer to a deal and the clock is ticking. On the other hand, if you read between the lines, this is a very public negotiation and the leaders, each seem to be giving something up.
On the Republican side, the Boehner plan essentially does not include the demand that both houses of Congress pass a balanced budget amendment, which is something the Republicans wanted. And they continue to talk about the Reid plan, which is also a work in progress, does not include a demand for tax increases, which is something Democrats very much wanted.
It looks like -- I mean, you could construe this as Democrats and Republicans at least the leaders moving a bit closer together. The bottom line, though, is getting those votes from the rank and file and it doesn't look like anybody has the votes just yet. Back to you.
CHETRY: All right, Joe Johns.
VELSHI: Let's hope something gets worked out. Joe Johns in Washington for us.
CHETRY: Also this morning, word that Congress could get a little bit more breathing room to negotiate any deal that would raise the nation's debt ceiling. According to the "New York Times" there are slightly higher incoming taxes and that could allow the treasury to have enough money to push back the August 2nd deadline to perhaps as late as August 10th. We're not talking about a ton of time to work it out. The White House maintains that August 2nd is a, quote, "hard deadline."
VELSHI: And before everybody gets nuts about this, why are we, you know --
CHETRY: You can't run your life this way.
VELSHI: I don't think anybody needs to sit there and say, what a relief. I frankly don't want to report on it for another eight days.
CHETRY: If you're afraid you're not going to get your Social Security check that you rely on August 3rd, maybe there's hope.
ROMANS: But to get the wiggle room Treasury is pulling strings behind the scenes.
VELSHI: Nothing has changed about the fact we hit the debt ceiling on May 16th.
ROMANS: California taking out a temporary $5 billion loan to help pay its bills in case Congress fails to raise the debt ceiling. Eight major institutions, Goldman Sachs, Wells Fargo among them, putting up the money. And the money will only be used if the federal government delays payments for state services like health care and transportation.
VELSHI: Republican Senator Pat Toomey introducing a blueprint for how the government should spend its money in case the debt ceiling is not raised by August the 2nd. The bill he's introducing would make debt payments, Social Security, and paychecks to troops a priority. Everything else covered if possible with cash on hand or put off until the U.S. can take on more debt.
Coming up in less than ten minutes we'll talk to him, Republican Senator Pat Toomey of Pennsylvania, about his payment plan if there's no debt deal. ROMANS: Then at 7:30 eastern we're going to talk to Republican Governor Rick Scott. Here's what's interesting here. He's making headlines because he says if Congress fails to raise the debt ceiling, it's almost -- will have no effect on the markets or state budgets or his state.
VELSHI: Wow. That's new. That's different.
ROMANS: A minority opinion for sure. It goes against well, just about everything we've reported. We'll see what he has to say.
CHETRY: Meantime, police in Norway uncovering a cache of explosives at a farm that was rented by massacre suspect Anders Breivik.
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(EXPLOSIONS)
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CHETRY: There are some of the sounds of the explosions as police detonated them yesterday. The property located about 100 miles north of Oslo. Officials believe that Breivik used this farm to build the fertilizer bomb that killed eight people in Friday's attack.
We're also getting a look inside the mind of the suspect. He says Breivik is, quote, "surprised that he successfully pulled off the massacre, that he considers himself to be in a war, and insists he was working with terror cells in Norway and abroad although he is not providing specifics."
ROMANS: First he said he wouldn't seek reelection. Now Oregon congressman David Wu says he will resign over a growing sex scandal. The seven-term Democrat accused of unwanted sexual advances toward a fundraiser's 18-year-old daughter. No criminal charges are expected, but Wu plans to leave office once the debt ceiling crisis is resolved.
Former Illinois Governor Rod Blagojevich is asking for a new trial, alleging judicial bias and trial errors leading to his corruption conviction. Jurors found Blagojevich guilty of 17 of 20 counts in his corruption retrial last month, including attempted extortion for trying to sell or trade President Obama's vacated Illinois Senate seat.
VELSHI: All right, they played more than two whole games. Last night's Braves-Pirates game lasted 19 innings, over six and a half hours. Those who stayed up to see the end witnessed maybe the worst call of the year.
ROMANS: This is bad.
VELSHI: It really is. Look at it.
CHETRY: Take down the kiron so we can see.
VELSHI: We can see how that's happening.
ROMANS: We couldn't see it.
VELSHI: OK, we'll re-rack it and show it to you. The Braves won four-three, but on a play at the plate in the bottom of the 19th. There we go. Take a look at this. It looks like the runner is out by a mile. By a mile. But the umpire called him safe.
ROMANS: Wow.
CHETRY: Maybe the poor ump was tired.
VELSHI: Yes, it's a long game. I woke up at my normal waking up time and that game was still going on.
(LAUGHTER)
CHETRY: People joking that the umpire wanted to get home and get to bed.
VELSHI: Guys, game's over. Go home.
CHETRY: So there you go. It was exciting day for baseball to say the least.
Still to come on AMERICAN MORNING, a new debt plan is being pushed, only this time it has nothing to do with spending cuts but a blueprint for a post-August 2nd world if no plan is approved. We're going to talk about it with Republican Senator Pat Toomey.
ROMANS: And also why the judge in the Casey Anthony trial is refusing to give out the names of those jurors even though the media is demanding them and he's required to by law.
VELSHI: And what is worse than getting stuck in a sewer? Getting stuck in a sewer head first. We'll tell you about that when we come back.
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VELSHI: If August 2nd comes and goes without a deal to raise the debt ceiling, the treasury might have to decide which bills get paid and which ones don't. There's a new bill this morning that would prioritize which payments would get made first. They include payments on the nation's debt, Social Security checks, and paychecks for U.S. troops.
Joining me to talk about this is Republican Senator Pat Toomey of Pennsylvania. He's the former president of the Club for Growth. Senator Toomey, thanks for being here. Good to see you again.
SEN. PAT TOOMEY, (R) PENNSYLVANIA: Good morning, Ali. Thanks for having me.
VELSHI: Senator Toomey, look, you've come from a background where you have strongly believed that increased taxes hurt the economy. So you are not somebody who is going to -- likely going to support tax increases in a deal to increase the debt ceiling. But you have said that you think the debt ceiling should be increased?
TOOMEY: Yes, absolutely. Certainly it's not something that I enjoy, but the fact is we've gotten to the point where we borrow so much money if we didn't raise the debt limit then the sudden cut in spending that would be required would be very disruptive.
So I think it's very important that we change the course that we're on, that we make real cuts in spending and we have structural reform of which kind -- my preference would be a balanced budget amendment to the constitution. I would definitely be willing to, you know, have -- be flexible and negotiate exactly what that would look like, how we would get to a balanced budget. But I think that's an important part of raising the debt ceiling.
VELSHI: And the fact is the balanced budget amendment would be a long process, longer than this process would be, so that's something we have to consider as a discussion a little bit later. But at this point I know you're working off the same figures we largely are. If we hit the debt ceiling about 40 percent of our government spending would stop. That's got to be worse for the economy than closing some tax loopholes wouldn't you say?
TOOMEY: No. I think the most important thing for the economy is getting us on a sustainable fiscal path. We have seen what's happening in the periphery of Europe to countries that just refuse to grapple with this problem. And raising taxes a little bit here and there or a lot is going to do some harm to the economy and it's not going to solve the underlying problem.
So, you know, the other thing to consider, if we haven't raised the debt limit by August 2nd, and I think more likely than not we probably will, but I think there's an increasing chance we won't, if we don't, we'll almost certainly raise it thereafter because the political pressure will be enormous to raise it at that point.
So my legislation is designed to deal with the possibility that we might have that interim period. And we will have the ongoing revenue from taxes to easily be able to afford interest on our debt so that we don't have a catastrophic default. We can easily afford Social Security benefits and we can easily afford to pay military pay.
VELSHI: Like I said, I don't think we have a dispute as to what the figures are. So business, based on the math we did on your proposal, if you do pay the interest on debt and you pay Social Security checks and you pay active military, here's what you might not be able to pay -- the department of justice, FBI, courts, salaries of federal workers, department of education, Pell grants.
TOOMEY: It's a long list.
VELSHI: Yes, it's a long list. What happens? I mean that is a big shutdown. That is jobs that could be lost.
TOOMEY: Look, there would be a partial government shutdown. Those payments would be delayed until this were resolved. My guess is it would be resolved in a matter of days. And I'm not advocating this. I'm not suggesting it's a good idea to go ahead down this road.
But what I am suggesting is none of us can guarantee that there's going to be an agreement that raises the debt ceiling by August 2nd. And since we can't guarantee that outcome, we ought to have a plan b. And a plan b, you know, the administration is quietly making phone calls according to published reports, to big banks that they won't default on our debt. That's fine, but how about sharing that with the American people so they can have that comfort?
VELSHI: Senator Toomey, you and I have talked for years on this, and I know you come from a place of wanting financial responsibility but I want you to react to this letter from -- Treasury Secretary Geithner from February 3rd where he says, "A homeowner could decide to prioritize and continue paying monthly mortgage payments while opting to crease paying other obligations like car payments, insurance premiums, student loans, credit card payments, utilities and so forth. Although the mortgage would get paid, the damage to that homeowners credit worthiness would be severe." Your reaction?
TOOMEY: I think the Treasury Secretary is a little bit confused about what constitutes debt. So in his list of things that, perhaps, a homeowner wouldn't pay he includes credit cards and student loans and the kinds of things that obviously do constitute debt.
He has predicted great financial catastrophe if we default on our debt. I'm suggesting he's probably right so let's not default. We're going to have the resources to avoid it. Does that mean we'll have to make some temporary and tough decisions in other areas and probably furlough some government workers and postpone vendor reimbursements? Yes. That's unfortunate, but it's better than a catastrophic default.
VELSHI: Yes, let me just ask you one last question. I want to show you a new poll, a Pew poll that has come out, and the question was, for lawmakers who share your views on this issue, they should -- 68 percent say they should be willing to compromise, 23 percent stand by their principles.
Now, the number that say you should be willing to compromise is up 13 percentage points since April. And if you just looked at Republicans, 53 percent want lawmakers to compromise, and that's up 10 percentage points since April. How do you read that?
TOOMEY: Look, I think people want us to get this resolved. They want a solution. So do I. And the solution that I think is laying on the table available to be had is for the president to join us and say you know what, it does make sense to put us on a path to a balanced budget.
Now, how quickly we get there, what we cut to get there, whether we reform the tax code as part of that process, all those things we all ought to be flexible and be willing to negotiate. But I think the country desperately needs to have a sustainable fiscal path.
A goal of getting to a balanced budget is not very radical. A Democratic president named Bill Clinton embraced that goal and with a Republican Congress achieved that goal. And so what some of us are saying is, why can't we strive for that now? Why can't we fix this so we can have a strong economy and the job growth we need?
VELSHI: All right. Keep a good level tone in the conversation, Senator Toomey. We're hoping for that to continue. Senator Pat Toomey, Republican of Pennsylvania.
CHETRY: All right. Even though the law says he has to do it, the judge in the Casey Anthony trial is refusing to release the names of jurors in the case. Many of those jurors have received threats since finding Casey Anthony not guilty. So, chief judge Belvin Perry says he's going to wait for a cooling off period to expire before he turns over the names to the media. He says that will not happen until October 25th or beyond.
ROMANS: All right. Police in Sirius (ph), California trying to figure out how this happened. A man stuck upside down in a sewer over the weekend. Police say it was a drunken accident, but now the guy claims that gang members beat him up and threw his cell phone in the storm drain. He's angry with the cops for releasing this picture. Police say he never mentioned an attack when he was rescued.
VELSHI: And still to come this morning, gold glimmers as concerns mount over the debt ceiling. Just how much is your gold worth? You're going to love this. We're going to hit the streets to find out.
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ROMANS: "Minding Your Business" this morning. Right now, stock futures pretty much mixed ahead of the opening bell. Investors worldwide watching Washington today. More stalls in the debt ceiling talks, pushing both European and Asian stock markets lower overnight. Executives from credit rating agencies Standard & Poor's and Moody's, they'll testify on Capitol Hill about a potential downgrade of America's stellar credit rating. The big buzz on Wall Street today that a downgrade could happen even if the U.S. avoids default and Congress raises the debt ceiling in time.
And Dow Chemical announced just a few minutes ago that its second-quarter profits jumped 74 percent from last year -- from the same time last year. That's better than Wall Street expected. Other earnings out today, Boeing and Delta will report before the opening bell. ConocoPhillips, the oil company, expected later. And Visa's earnings come out after the closing bell.
Investors also waiting on several economic reports today. Information on durable goods orders for June, that comes out about an hour from now. And the Fed's "beige book." It's a look at the economy, their regional economy. That's released at 2:00 p.m. Eastern this afternoon.
Now California prepping for a potential U.S. default. The state has secured a loan worth about $5.5 billion from various big banks, including Goldman Sachs and Wells Fargo. That's so it has cash on hand in case the debt ceiling is not raised in time and it can't get the federal funding that it relies on to run.
Ford reportedly scrapping CD players in its new models, opting to install USB sockets for digital music players. The automaker says all its new cars will have a computer hub that will include wi-fi so you can access your music library. Ford is the first mainstream automaker to make this move. Just like the 8-track tape player gone, right?
AMERICAN MORNING will be back right after this break.
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CHETRY: Beautiful shot this morning. We were all talking about how just gorgeous it is today in New York City --
VELSHI: Amazing.
CHETRY: -- and how we're wishing it could always be like this. Sunny and 70. A little bit later, sunny and 87 degrees and it's not the killer humidity.
VELSHI: Yes, it's going to be a great, fantastic day.
ROMANS: Perfect day.
VELSHI: All right. The alarms sounding when it comes to the debt ceiling at risk. Our nation's credit rating, our financial standing and our crucial role in the world's markets.
ROMANS: And that's why with so much uncertainty right now, investors are turning to gold. It's a safe haven and its price hit an all-time high yesterday. I think it's like 1,600 bucks an ounce now!
CHETRY: It's almost as if every day we say gold hit a high, we say gold hit a high! And it keeps going up. Joining us now is CNNmoney's Poppy Harlow. You hit the streets yesterday to find out just how much people thought their gold was really worth. And then for some, the disappointing truth.
POPPY HARLOW, CNNMONEY.COM: Very disappointing truth. Some were very excited. But yes, $1,622 an ounce, that the price of gold. If you were one of those, gold $800 that hit the high, you were very, very wrong. Gold can go a lot higher from here.
So, we went out in New York City to see if people were wearing gold, just how much it was worth. Was it more than they expected, less than they expected, ready to sell it? Take a look at what we found.
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HARLOW: All right. So, gold is at record highs, and we wanted to head out to the streets HERE in New York City to see just how much folks think their gold is actually worth.
UNIDENTIFIED FEMALE: They were going to give me $500 for each.
UNIDENTIFIED FEMALE: I don't know! I have no idea.
HARLOW: Do you remember what you paid for it?
UNIDENTIFIED FEMALE: I don't even want to talk about it. A lot.
HARLOW: So, how much do you think your gold is worth?
UNIDENTIFIED FEMALE: I have not a clue.
HARLOW: Not a clue, huh?
UNIDENTIFIED FEMALE: I know I'm leaving it to one of my daughters, and she thinks it's worth a lot.
(LAUGHTER)
HARLOW: Let's ask.
UNIDENTIFIED MALE: You want me to take a look at it?
UNIDENTIFIED FEMALE: You bet.
UNIDENTIFIED FEMALE: Just the gold weight is worth $364.
HARLOW: Anyone got gold?
UNIDENTIFIED MALE: What have we got here?
UNIDENTIFIED MALE: Your necklace at melt is worth $3,010.
UNIDENTIFIED MALE: At melt. Okay.
UNIDENTIFIED MALE: I was expecting more, to be honest.
(LAUGHTER)
HARLOW: When people buy gold jewelry in a store, what kind of markup are we talking about here?
UNIDENTIFIED MALE: Well, if you're going to the big stores like Macy's, JC Penny, you're talking about sometimes a 500 percent markup.
(GASP)
UNIDENTIFIED MALE: Huge.
HARLOW: $700.
UNIDENTIFIED FEMALE: That's not bad!
UNIDENTIFIED MALE: Sure it's real?
UNIDENTIFIED FEMALE: No.
UNIDENTIFIED MALE: Can I just scratch the edge of it right there? You'll see when I put the acid on here how that line disappears? Which means that it's not real.
Your gold is worth $1,868.
UNIDENTIFIED FEMALE: Excellent. I found it on the edge of a river next to a house.
(END VIDEOTAPE)
HARLOW: What luck!
(CROSSTALK)
VELSHI: She found my bracelet! She found my bracelet!
CHETRY: Yeah, right. Your bracelets are gold rope with the heart pendant on the end of it?
HARLOW: Ali, that was yours?
VELSHI: That lady found my gold!
(LAUGHTER)
HARLOW: Seriously, what luck that woman had to find a gold bracelet that's worth more than a thousand bucks. So, as you can see, some folks' gold is worth more, some less. But look, if you're thinking about selling gold now, we are at an all-time high.
ROMANS: How do you make sure you don't get ripped off?
VELSHI: How much is this?
CHETRY: That's your wedding ring!
(LAUGHTER)
VELSHI: Let me scratch that for a second.
(CROSSTALK)
VELSHI: What happened to that lady? She scratched that gold that wasn't real.
HARLOW: She wants to sell her wedding ring, which she doesn't, correct? Here's what you need to do. Pull up what your gold is worth. You need to know what it is worth.
If it is 24 karat gold, you're talking pure gold, the most expensive. If it's 18 karat, that's 75 percent gold. Most gold out there in terms of jewelry is 14 karat gold that's 58.3 percent gold.
ROMANS: Soft and doesn't bend.
HARLOW: So, know what your gold is worth. Shop around, folks, go to at least three different locations. I've done this in New York, the diamond district, six, seven, locations, compare prices. There are a lot of people out there that will try to rip you off.
VELSHI: You did a story about how little, popping up all over the country these corner stores that say we buy your gold and what a small percentage some will give you as to the value.
HARLOW: On the same necklace in six different stores I got every offer between $200 and $800. So know what it's worth. Do the math, weigh your gold yourself and don't get ripped off.
ROMANS: What matters is the purity and weight, right? You might think it's your grandma's and old and worth a lot. We're going to melt it.
HARLOW: Brand name you're going to pay a lot more for a brand name piece of jewelry, you know, many, many times higher than just for the weight of the gold.
KIRAN CHETRY, CNN ANCHOR: So that's the difference also, a piece, a good piece, may be worth a lot more than what the melt price would be. So think.
HARLOW: What the expert told me is take it to your local jeweler. If you go to a big department store, they have a lot of overhead costs. Take it to the local jeweler you trust and they will likely going to give you the best price. It would still be smart to shop around.
CHETRY: Should you buy gold right now?
HARLOW: Here's my thought. I bought myself a gold ring and I thought, I thought this is not only do I like it, I could wear it every day, it's an investment. So whether you buy gold in the market or buy the actual gold as long as you don't lose it --
ROMANS: She has bars of silver in her bottom drawer.
CHETRY: As long as you don't leave it by the river.
VELSHI: Am I the only one who wants to know the reaction of the woman who told her it wasn't gold.
HARLOW: You have to go to CNNmoney.com.
VELSHI: Best tease ever. All right, Poppy. Thank you.
ROMANS: It is 31 minutes after the hour. Time for a check of your top stories this morning.
In Afghanistan, the mayor of Kandahar has been killed by a suicide bomber. Officials say Ghoulen Hadar was inside a city meeting hall this morning when the attacker detonated an explosive device that was inside his turban.
CHETRY: A 21-year-old man in Uzbekistan has been charged with threatening to kill President Obama. The Justice Department says that the suspect was arrested in Alabama earlier this month after obtaining a machine gun as well as grenades from undercover agents.
Officials say that he was in the U.S. illegally. He had a student visa that was revoked. He was indicted yesterday on four counts of threatening to kill the president.
VELSHI: And with just six days until the debt ceiling deadline, it's back to the drawing board for House Speaker John Boehner. He had to postpone today's vote on his bill because Republicans want more spending cuts.
The bill will not come to a vote until Thursday at the earliest. It wasn't that they just wanted more. When they added up the bill, it didn't have all the spending cuts, it didn't add up to what he thought it was supposed to add up to.
ROMANS: Now, in the ongoing debate over the debt ceiling and raising it and what to get in exchange for raising it, almost everyone whether Republican or Democrat agrees that the debt ceiling has to be raised. If not, the results could be catastrophic. The Florida Republican Governor Rick Scott is saying the opposite. Listen.
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GOV. RICK SCOTT (R), FLORIDA (via telephone): We can decide how we want to spend the money, but we cannot continue to have trillion dollar deficits. You just can't do it.
So we've got to decide, and now's as good a time as any, what you have to do in businesses and at the state, stop spending money, stop borrowing more money.
We need to have balanced budgets like we do in the states. I wouldn't raise the debt ceiling. I would say no more.
(END VIDEO CLIP)
ROMANS: Joining me now live from Tallahassee is Governor Rick Scott. Governor, welcome to the program. I mean, your opinion and advice runs counter to just about what everyone from both parties is saying.
And it goes against what everyone in the financial markets is telling me in 15 years of my own capital markets reporting experience. So tell me exactly why raising the debt ceiling wouldn't have an effect on markets in the economy or state?
SCOTT: Well, what do families do? If one of the parents loses their job, they stop spending. They have to. They don't just keep borrowing money. What do businesses do if the revenue go down? They have to stop borrowing money.
Our government is no different. We have to -- what's the limit? Is it $14 trillion, $16 trillion, $20 trillion? Who's going to pay for this? Our kids are going to pay for this. We have got to say that look, we have enough revenues. We have to prioritize how we spend money.
That's what we had to do in Florida. When I became governor in January, we were looking at almost a $4 billion budget deficit. We had to pick and choose what we're going to do. We can't do everything. Government can't do everything. Now we are walking into --
ROMANS: Those are two different arguments. You're right, our deficits and our debt is unsustainable, it just is. That's a question through the democratic process we have to figure out how to fix that.
But raising the debt ceiling, that's paying for what Congress has already spent. That's paying for the obligations that Congress, both parties, over the past decade, the money that they have already spent. What about the message it sends to the rest of the world that we're not going to pay all our bills?
SCOTT: No. We can pay our bills. All we have to do is stop spending. We have enough revenues. We need to say look, we're not going to borrow any more money, today. Today, just like what we do in business, today what we're going to do is we're going to figure out how we're going to spend the money we get. We're going to prioritize what's important.
ROMANS: OK, so if you prioritize what's important, what that means is that if you don't raise the debt ceiling, at some point either August 2nd, maybe August 10th, sometime in the coming days, you have 40 percent less money available to pay those bills.
Not all the bills can get paid. The rest of the world looks at us and says the United States is picking and choosing what bills it's going to pay. How is that sustainable for markets, how is that -- what if there are companies in your state that have to -- they see higher interest rates for the debt that they're taking on to grow and to create jobs for Floridians?
SCOTT: Higher interest rates are going to be caused by borrowing more money. I mean, this is not different than a company. If a company has a drop in revenues, you have to stop spending money, you have to say that was a nice to have, but doesn't make any sense.
We have to prioritize. That's what our states are doing, that's what we did. That's how we're going to get our economy going again. We should not be spending more money. There's a limit on how much money we can spend.
ROMANS: With all due respect, they're spending more money and paying for what we already spent.
VELSHI: If you don't mind, I just have to -- Governor, I'm not understand. Christine has asked you this four times already. We're talking about paying the bills you already committed to. Why is this difficult for you to understand, Governor?
SCOTT: Well, look, this is what we did in Florida. We stopped spending more money. We prioritized how we're going to spend money. We have to do the same. We can stop borrowing money at the federal level if we cut our spending at the federal level. We don't have to keep borrowing more money. I mean, there's a --
ROMANS: Tell me what spending? If you had to cut 40 percent of spending, what would you cut? What you would pay is Social Security recipients first, you'd pay active duty military, you'd pay the interest on our debt.
Now you pretty much gotten up to what's coming in. So what do you cut? You cut food stamps. You cut federal education spending, you cut disaster relief, you cut foreign aid, what would you cut?
SCOTT: Well, you go through the most important things, just like what you do at the state level, the most important things and then you have to cut back. You have to figure out what do companies do.
When they have to do it they have to say, you know what, I could outsource that and I can do it less expensively. We don't need to do that to get the revenues we need. We can figure out a way to do that less expensively.
ROMANS: You don't think this will crash jobs in the near term, if we don't get jobs growing we're not going to have an economy growing and still have a problem.
SCOTT: I agree.
ROMANS: Even Ben Bernanke says if you don't raise the debt ceiling you have an immediate cut in 40 percent, 40 percent of federal spending, I mean, the impact near term on the economy would be disastrous. Doesn't this have to be done with a little more thoughtfulness than just 11th hour electioneering.
SCOTT: We've been doing this. It hasn't helped our economy. We did the stimulus. It didn't help our economy. What's going to help our economy is --
ROMANS: Years and years of tax cuts supposed to grow jobs and that hasn't helped either, right?
SCOTT: Well, if you look at the states that are growing like our state. We have no personal income tax. We're phasing out the business tax. Look at Texas. They have lower taxes and they're growing.
So absolutely, lower taxes make the economy grow, higher taxes, more regulation, trillion dollar deficits that kills our economy. This is about jobs. This is about our future. We cannot continue to borrow money.
ROMANS: All right, Governor Rick Scott, Republican in Florida, thanks so much for joining us. Ben Bernanke, the Fedchairman said it would hurt jobs, immediate impact on jobs. It's interesting because the Chamber of Commerce, Ali, you know, some research from Pew, just about every economist I've spoken to, currency traders, I think there are five governors who agree, five who have lined up and said don't raise it.
VELSHI: There has really to be a distinction. I think we can all have a reasonable discussion about what we spend in the future. I wish this would clear up. That's a different discussion.
CHETRY: This is the clearest, you know, for people who are not in completely into the markets and into the economy and are wonkish about it.
It's like saying, you know what, I'm spending too much money on my credit card. Every month I spend too much so I'm going to not pay the bank back.
VELSHI: That's for the stuff I've already bought.
CHETRY: That is the debt ceiling issue.
VELSHI: Completely.
CHETRY: The cutting the deficit issue is something different. The reason they're linked is because many on the conservative Tea Party Republicans who believe that unless there is some linking of these two, unless there is a consequence.
VELSHI: It will never get solved.
ROMANS: Because we have raised the debt ceiling over and over.
VELSHI: It is very dangerous not to make that distinction. I'm worried that's what Governor Scott is doing.
ROMANS: I respect the ideological purity of the people who are holding on to it. You know, these are not flip floppers. These are people who believe and they were elected on this platform.
But in the very near term it's the worry about jobs and the near term impact on the economy if it's done too quickly and not in the right way.
VELSHI: That's correct.
CHETRY: All right, well, frustrated voters are jamming the switchboards. They're crashing servers on Capitol Hill demanding lawmakers solve the debt ceiling crisis.
We want to know what would you like to tell or maybe you told us to your elected representative. E-mail us, give us a tweet, tell us on Facebook. We're going to be reading through some of your comments in about 15 minutes.
VELSHI: Still ahead, remarkable story of a teenage assassin, a U.S. born boy convicted of being a drug cartel hitman in Mexico. He's been sentenced for these outrageous crimes. We'll tell you about it on the other side. It's 41 minutes after the hour.
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CHETYR: It's 44 minutes past the hour. Rattled nerves in Oslo less than a week after 76 people were killed in a massacre. A suspicious suitcase forced police to evacuate the city's central train station.
VELSHI: Let's get the details from Zain Verjee. She's live in London following this morning. Zain, what do we know?
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: We know that the police found it suspicious. It was an abandoned bag and they ended up bringing in a robot to get rid of it. It ended up being OK, but guys, it really does underscore the situation in Norway.
The country is on edge and the police themselves are just not taking any risks. When they heard about it, they immediately addressed it. Fortunately, everything was OK.
ROMANS: OK, big development, Zain this morning in Mexico. An American-born teenager, a hitman, found guilty of torturing, beheading at least four people, remarkable for his age. Also remarkable for how little time he will have to serve because he's a minor.
VERJEE: Right. That's exactly right. Because of Mexican law, the maximum he's going to get is three years -- three years -- for beheading four people in a correctional facility, also going to have to pay a $400,000 fine. A lot of people are saying that this is really about the drug wars and it's the drug gangs that are recruiting young kids like this to go and do their dirty work.
He was asked, this 14-year-old boy, how did you execute these people and his response was, "I slit their throats."
CHETRY: That's just so disturbing on so many levels. It just shows you how dangerous and how much this has escalated over the years.
VERJEE: Right.
CHETRY: On a lighter note, 2012 Olympics, we're a year away. We understand that the games have already begun online at least.
VERJEE: Well, I'm officially inviting you to come to London next year.
CHETRY: I'm in.
VERJEE: Exactly one year away. And there is actually something cool launched online. Ali, you like this.
VELSHI: Yes.
VERJEE: A way for you to win in the Olympics, competitive tweeting.
VELSHI: Oh, wow.
CHETRY: He's good, actually.
VERJEE: He is. I know he has millions of followers around the world. But basically -- right, Ali? Basically, what it is, countries around the world are being encouraged to support their teams starting from today and they're going to hashtag one year to go, looks like the U.S. is still second place in that competition.
Guess who's number one? It's Brazil.
CHETRY: Wow.
VELSHI: Oh, wow. OK.
VERJEE: Online competition. So, get tweeting, Ali.
VELSHI: No kidding.
VERJEE: Everyone you know.
VELSHI: What is the hashtag?
CHETRY: One year to go she said.
VERJEE: Hashtag one year to go.
VELSHI: It is one the number or one the word?
VERJEE: One, the number.
VELSHI: One, the number.
CHETRY: All right. You already taught me how to do proper tea, when I was there for the royal wedding.
VERJEE: Pinky's up.
CHETRY: You said pinky's sort of bent but not totally up, right?
VERJEE: Sort of kind of.
VELSHI: Sort of kind of. All right, Zain.
CHETRY: I need a refresher course.
VELSHI: Good to see you.
All right. Your morning headlines next, including a brand new lawsuit over the iconic World Trade Center cross. Two intersecting steel beams, they came that way, that were found when the Twin Towers collapsed on September 11th. Who is suing and why?
ROMANS: And do you sleep in shifts? If so you better go to the doctor. Why it could keep you from making memories and what that does to your brain later in life.
I can't remember what time it is.
VELSHI: It's 47 minutes after the hour.
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CHETRY: Forty-nine minutes past the hour right now. A look at your morning headlines.
Today's key vote on House Speaker John Boehner's debt ceiling plan in the House is being pushed back at least for a day. The bill's been losing conservative support after the Congressional Budget Office says it didn't cut as much as possible.
Let's check in on the markets right now. Stock futures trading mixed at the moment, but pretty flat overall. Investors seem to be sorting through a lot of corporate earnings this morning, taking that as well as the debt ceiling talks. Boeing, by the way, just reported that its earnings for the second quarter were in line with Wall Street expectations.
Federal appeals court is reversing course now, saying that accused Tucson shooter Jared Lee Loughner can be forced, can be forced, to take anti-psychotic medication. The court cited his increasingly bizarre and suicidal behavior in going back on the earlier ruling that allowed Loughner to refuse those drugs.
An atheist group is suing to prevent a cross from being displayed at the 9/11 memorial site. This cross is made from two steel beam girders that were actually pulled, the way it looks now, that's how it was pulled out of the wreckage of the Twin Towers. A group of American Atheists calls it, quote, "an impermissible mingling of church and state."
Speaking of 9/11, responders who developed cancer after the terror attack after they did work at Ground Zero rescue efforts in New York are being told they are not eligible for benefits. Officials say that, right now, there's not enough evidence to add cancers to the list of diseases covered by the law which provides health care for the Ground Zero workers.
A new study says that waking up in the middle of the night too many times actually harms your memory. We all know that from living it. But researchers say that fragmented sleep can lead to dementia, Alzheimer's, as well as other forms and affect your overall memory. They base their findings on tests conducted on lab mice.
You're caught up on today's headlines. AMERICAN MORNING is back after a quick break.
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VELSHI: It seemed likes a nice day in Washington for summer. It's partly cloudy and 79 degrees there. It feels only like 80 degrees. It's going to get up to 90 and sunny today.
I don't know. A good day to get out there. It's a beautiful day here in New York. Still very hot in other parts of the country, though.
ROMANS: Let's have your A.M. house call now. He is one of the stars of the Super Bowl, that cute little kid who's mini-Darth Vader. Remember the Volkswagen commercial? It was so cute. Take a look.
(VIDEO CLIP PLAYS)
ROMANS: I thought that was so --
VELSH: And that just never grows old.
CHETRY: Everyone loved the commercial. It was awesome.
And the boy behind the mask has a spirit that will knock you over. But you may not know that he is also very sick.
VELSHI: Yes. He went to Washington to use a Jedi mind trick on squabbling lawmakers. Dr. Sanjay Gupta followed mini-Vader on his mission.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, Kiran, Christine, Ali, as you may know, I've been following the story of little Max Page for some time. He is a crazy, cute kid. You saw him as a little Mini Darth Vader there.
But which you may not know is that he also was born with a heart condition. He had eight operations over six years. And while in the hospital, he met a lot of kids like him -- kids who required care and specialty hospitals and children's hospitals. And he also met kids who were dependent in part on Medicaid to get the sort of care that they were getting.
So, now, he is heading to Washington because amidst all these budget talks is a potential impact on these hospitals, a potential impact on these kids, kids like Max.
He had a meeting with Senator Grassley. Take a listen.
MAX PAGE, BORN WITH CONGENITAL HEART DEFECT: Can you tell the president this? If he -- if the budget gets cut, he needs to realize his daughters might need it. So, if he cuts -- if the budget makes -- they cut about like 75 percent off, it's going to be really bad for maybe his daughters.
GUPTA: You can see there, Max is making a personal appeal to the president and to the president's daughters.
Again, you know, just 56 of these children's hospitals in the country. They are responsible for not only taking care of a lot of sick kids but also train training the nation's future pediatricians and pediatric specialists.
LAWRENCE MCANDREW, PRESIDENT & CEO, NATL. ASSOC. OF CHILDREN HOSPITALS: When you have less money, you have less options to providing that care. So, you may not hire a physician, you may not offer the clinic, you may not have the program that's necessary for the child.
It's not something that's going to happen overnight. But, over time, the whole effort to support children's health care has weakened if you don't adequately fund it.
GUPTA: And both sides could have an impact in terms of what they are proposing. The White House plan could potentially impact the number of pediatricians trained in the future.
And the Republican deal, as far as we can tell, could have an impact overall on Medicaid, in terms of cutting its funding.
So, Max, good luck. May the force be with you.
Back to you for now.
(END VIDEOTAPE)
VELSHI: Great story. And there's more to it.
ROMANS: Yes, you can see the rest of that report on Mini Darth Vader, Max Page. This is on this weekend's "SANJAY GUPTA, M.D.: Washington Feeling the Force." This Saturday and Sunday, at 7:30 Eastern, right here on CNN.
While we got Sanjay, should we be asking him about you?
ROMANS: I know. My cold is getting worse as the morning goes on.
CHETRY: Nothing's worse than a summer cold, right?
ROMANS: Don't touch anything I've touched.
VELSHI: I mean, I really -- I don't want you to be sick and not around this debt ceiling stuff.
ROMANS: You don't want me to be sick and sitting next to you.
(CROSSTALK)
VELSHI: Lawmakers are bombarded by e-mails and phone calls from frustrated voters who want the debt ceiling crisis solved. So, in case, you couldn't get through to your lawmaker, we want to know what you would tell your elected representative. It's our question of the day.
And here are some of your responses.
ROMANS: Roger on Facebook says, "Compromise and get this done. Stop worrying about the next election, or there won't be one for you."
VELSHI: Teresa on our blog says, "Our elected representatives need to become statesmen and not politicians. Statesmen represent the country as a whole, politicians want to get reelected."
CHETRY: And Tsheppe on Twitter. "Two things: put the country first and I can't wait to vote you out in two years."
So, thanks so much. Keep the comments coming.
VELSHI: People are frustrated on every side.
ROMANS: If I had a dime every time I heard that, I'd be able to pay off the nation's debt.
VELSHI: That's right.
So, listen, what is at stake here is America's AAA credit rating. What does that mean? A lot of people have asked us. Who are these credit agencies? Why do they matter and who listens to them? I'm going to explain it to you after this break.
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