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House Puts Off Vote on Boehner Debt Bill; Wall Street Pipes In On Debt Ceiling Debate; Boehner Tries To Rally Republicans; Negotiation in House on Boehner Bill Continue; Tech-Free Vacation; F- 16 Skids Off Runway
Aired July 29, 2011 - 07:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: A crucial vote never cast.
I'm Christine Romans.
Republicans call off a vote on House Speaker John Boehner's debt plan. So, what happens s next? We're live with CNN's senior political analyst David Gergen.
KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry.
They are reliving a nightmare at Ft. Hood this morning. Just two years after 13 people were massacred at the Army base, police uncovered another plot by a fellow soldier to kill soldiers there.
ALI VELSHI, CNN ANCHOR: I'm Ali Velshi.
With more than 90 percent of Texas in extreme drought, the state could use a lot of rain and tropical storm Don is fast approaching the south Texas coast -- on this AMERICAN MORNING.
(MUSIC)
ROMANS: All right. Good morning. It's Friday, July 29th. Welcome back to AMERICAN MORNING.
CHETRY: We have a lot of new developments this morning on the debt crisis.
You're looking at a live picture right now at Capitol Hill where the temperatures and the stakes are rising this morning.
For the past couple of days, House Speaker John Boehner has been working hard, twisting arms among his fellow Republicans to try to get something done. He couldn't get enough votes to get his debt ceiling plan voted on.
Let's listen.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The bill's not perfect. I never said it was perfect, nobody in my caucus believes it's perfect. But what this bill reflects is a sincere, honest effort to end this crisis in a bipartisan way, to send it to the Senate where it can receive action.
(END VIDEO CLIP)
VELSHI: The speaker's bill would cut $900 billion from the budget over 10 years, in exchange for short six-month extension of the se debt ceiling. But conservatives were angry that cuts don't go deeper.
Earlier, Christine spoke to Republican Congressman Trey Gowdy who is right now against Boehner's plan and she asked him what he wants to see from the House speaker.
(BEGIN VIDEO CLIP)
REP. TREY GOWDY (R), SOUTH CAROLINA: What we will do today, I predict it will be done today, is for the third time, send a plan that raises the debt ceiling in a responsible way. The Senate hasn't done it. The White House hasn't done it. I just respectfully disagree with you.
Nobody wants a default. I have not met a soul that wants a default, nor do we want a downgrade, which is coming if we do not bend the spending arc in this country.
I happen to think we can do both. We can avert a default and bend the spending arc and avoid a downgrade.
And let's don't kid ourselves, a downgrade is just as insidious as a default over the long term.
(END VIDEO CLIP)
ROMANS: If they do that, they have to do that soon.
VELSHI: I get where he is coming from. It is not true that a downgrade is as insidious as a default.
A downgrade can be a downgrade from AAA to AA. When you default, you can drop your credit rating a lot lower. So, they are two different things. I really hope Congress starts to understand that.
ROMANS: Both of them will cost us more money in the end.
VELSHI: They both could cost us more money. But you could actually have a downgrade that doesn't end up making interest rates rise in a precipitous manner, but a default is serious.
OK. Just down the street at the White House, the administration is warning that even if the speaker's bill does make its way through the House, it is expected to die in the Senate.
(BEGIN VIDEO CLIP)
DANIEL PFEIFFER, ASSISTANT TO PRESIDENT OBAMA: We're spending hour after hour here waiting for the Republicans to twist arms for a vote that is essentially irrelevant because as soon as they pass it, if they are able to, the Senate will vote it down and we will have to get back to the table and get something done.
(END VIDEO CLIP)
ROMANS: Democratic National Committee Chairwoman Debbie Wasserman Schultz releasing a statement about the perils of trying to do it alone when it comes to debt ceiling plan. She says, quote, "This should be a wakeup call to Speaker Boehner and the intransigent Republican majority that it's my highway way or the highway approach to solving our debt and default crisis is the wrong way for Congress and the American people."
VELSHI: So, we do have a lot to cover this morning.
We want to bring in David Gergen, our senior political analyst, live for us in London this morning.
Heck, you were smart enough to get out of town.
Washington just can't seem to get its act together with this. You have the House delaying a vote on Boehner's bill today as the GOP leadership tries to convince conservative Tea Party backed members to get behind this plan.
So, the question is: how does Boehner twist arms when he has a group of Tea Party members dug in, truly dug in, believing they were sent to Congress with this mandate to cut spending and some of them have indicated to us right here on the show they don't care about re- election.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I think that the -- please know that the reverberations from what's going on in Washington is felt here in London and around the world. People are getting deeply concerned here in London. People are aghast at American politics and we brought ourselves to the brink and conceivably could bring the world to a new economic crisis.
So, everyone around the world is watching this and we have entered now the most important 24 hours, I think, perhaps the 36 hours in this whole long debate, because the House has to break -- one way or the other, the House has to vote today and the Senate has to move on whatever it wants to put forward.
How does Speaker Boehner get there? Well, he was within a few votes of getting there. Please understand, he has about 90 percent of all Republicans in his caucus with him. It's about 10 percent who are holding this thing up. And he doesn't have any earmarks to offer them any more, which is a good thing.
But he can make tactical changes in the bill itself. He can perhaps reweave into it a balanced budget amendment to make some other concessions here and there to the hard-liners to get those last few votes.
CHETRY: Even if this all happens, you know, we are spending hours waiting for the House GOP leadership to convince the swing of the party to get on board. But even if they do pass this Boehner plan, the Senate is voting it down, right? So, then, we're back at the table again. What -- how do we get out of this?
GERGEN: Well, I -- the conservatives hope -- their calculation all along is if they can pass the Boehner plan the Senate said it will be unable to pass a Reid plan, they'll have no choice but to accept the Boehner plan in the Senate and the president will sign it, and there are some Democrats who think that conceivably could happen.
The more likely scenario is that the Boehner plan probably passes, but it does fail in the Senate. The Reid plan fails in one chamber or the other. And then we have an unveiling of a new compromise, the final compromise perhaps that has been -- being quietly sort of shaped behind the scenes, but there haven't been direct negotiations for a while that would bring Senator McConnell along with perhaps Vice President Biden and certainly Harry Reid --
CHETRY: Let me --
GERGEN: -- that they would come up with something that would have elements to the Boehner plan and hopefully enough to pass the House.
CHETRY: Let me ask you this because you, obviously, have been around a long time and watched these --
GERGEN: Never, never, never! Never seen anything like this.
CHETRY: -- types of alleged impasse suddenly get solved at the 11th hour. I mean, we've seen this before.
You know, I had a chance to talk to Congresswoman Michele Bachmann, Tea Party Caucus founder in the House and she is running for president. And she put the blame squarely on the shoulders of President Obama. She says, "Why are we all the way up until this point where we're pressing up against this August 2nd deadline in the first place if the president should have been ahead of this and submitted something in January?"
In the meantime, the Democrats are blaming John Boehner, saying that how -- you're not even able to get people in your own party to vote for you.
So, they are talking about this leadership vacuum on both sides.
Who do you think is right?
GERGEN: Well, I think it's time to stop the damn blame game and get serious and get the problem solved!
People can go back to their sand boxes when this is over or they should go home. But at the moment, you know, they ought to stop pointing fingers at each other. We have enough of it. We've had it from the White House, we've had it from the Democrats, we've now getting it from the Tea Party.
You know, the American people is disgusted with this and so is the world. And it's typically to stop pointing the fingers and sit down and work this thing out. We don't have many more hours left.
Ali and Christine can tell you fairly well how dangerous this is.
CHETRY: Right. How do we allow ourselves to get to this point if it is that dangerous meaning the August 2nd --
GERGEN: I think we can go back and do the retrospective later. I think a lot of mistakes made by all parties to this. Everybody has their fingerprints on this, on rolling political disaster. But to sit here -- you know, at this point, people ought to put down their swords and figure out, OK, in a spirit of being grown-ups, how can we get this done?
You know, in past crises with one exception, with the civil war, and that -- look at what a catastrophe that was. I'm not saying this is a civil war, but there are elements of recalcitrant that sure remind you of that. And then other crises like this, people, at the end of the day, have been able to put down their differences, momentarily, and say, OK, I don't care how the hell we got here, let's figure out how we get out.
CHETRY: All right. So, what is your solution? Where do they find enough common ground to get something done before August 2nd?
GERGEN: Well, I think that -- that Boehner and Reid plans actually are closer together than they appear in terms of they both cut spending about a trillion dollars in the first round. The issue becomes what do you do in a second round? That's hard because a first round of cuts is going to be the easier set of cuts. The second round will get into entitlements and raise all sorts of questions about taxes.
It's very, very hard, but the critical thing now is to get the debt ceiling lifted so that that can be settled in some sort of reasonable way. They cannot take us to the brink and take us over and to talk to the Tea Party -- look, the 10 percent who are holding out right now, I don't know who is holding the black queen when this is over. Somebody is going to be -- if we go into default somebody is going to get most of the blame and I can guarantee you, the wrath of the American voters will come down hard on whoever it is who is seen as preventing us from solving this problem.
CHETRY: Which is why the speaker wants to get it out of the House, right?
GERGEN: Why does he have to wait? I don't understand that. He can go ahead and get the wheels moving. I guess it's because they think it's potentially a revenue bill, it starts over in the House. You know, it's more of a -- they are politicking in the Senate and want to see whether Boehner can do it or not because they know they get the upper hand in the Senate if Boehner fails.
Boehner could fail. You know, it's teetering. Clearly, he doesn't have the votes. He would have done it last night if he had.
We'll see where he is today. He is a very crafty player.
CHETRY: All right. We certainly will as see this changes minute-by-minute.
David Gergen, great to get your respective, senior political analyst.
GERGEN: OK. Thank you so much.
CHETRY: Sure -- from London today.
Well, less than in 30 minutes, we're going to be looking at why House Speaker Boehner is struggling so much get the votes for his plan. We're going to be speaking to Steven Moore. He's a senior economics writer for "The Wall Street Journal" editorial page.
VELSHI: And they are living a nightmare this morning at the Ft. Hood Army base in Texas. Another plot to kill soldiers there has been uncovered by Texas police. An AWOL Muslim American Army private named Naser Abdo is in custody this morning. By all accounts, he was very close to pulling off a bombing massacre at a military base that's still reeling from a 2009 attack that killed 13 people.
(BEGIN VIDEO CLIP)
DENNIS BALDWIN, KILLEEN POLICE CHIEF: I can tell you that we would probably be here today giving you a different briefing had he not been stopped.
(END VIDEO CLIP)
VELSHI: The Army says Abdo's request to be discharged as a contentious objector was approved this year but that was put on hold when dozens of images of child pornography were found on a computer that he used. So, he went AWOL from Fort Campbell, Kentucky, over the July 4th weekend.
ROMANS: All right. Norway's prime minister joining hundreds of grieving relatives this morning at a memorial service in central Oslo there, honoring lost loved ones from last weekend's bombing and massacre that killed 76 people. The service was organized by the youth movement of Norwegian labor party. Sixty-eight of their friends were slaughtered one week at a group's summer camp outside Oslo.
The suspect in those attacks Anders Breivik facing a second round of questioning by police today. They say they have uncovered a lot of new leads in the last few days and they want to make sure there is no further threat.
South Korea continues to be deluged by heavy rains. The worst downpours in the century there. It's led to severe floods and landslides. At least 51 deaths reported. Rain has been falling at a rate of two inches an hour in some places.
VELSHI: New Jersey's Governor Chris Christie is returning to work this morning after a health scare. Christie was taken to the hospital yesterday when his asthma suddenly flared up.
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE (R), NEW JERSEY: I took the rescue inhaler that I have. Didn't have the effect it normally has. I started to feel light-headed and I spoke to the troopers and said I wasn't feeling well. Apparently I didn't look all that well. And they -- we both decided that we should get me someplace quickly.
(END VIDEO CLIP)
VELSHI: Governor Christie was discharged after a battery of tests that all came back normal.
He has been trying to lose weight which he thinks might have some impact on that.
CHETRY: All right. Still to come this morning, they are dead set against raising the nation's debt ceiling but are congressional debt cutters practicing what they preach when it comes to their personal finances. Brian Todd has an interesting look for us.
ROMASN: And tropical storm Don making its way toward the Texas coast with almost the entire state in drought. Don can't get this fast enough.
(COMMERCIAL BREAK)
VELSHI: House Speaker John Boehner's bill to raise the debt ceiling may be at a dead end -- thanks to the defections by Tea Party Republicans.
ROMANS: Their political position is clear, but it appears some of the most outspoken anti-debt lawmakers have plenty of personal debt. CNN's Brian Todd is following that.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Save our country.
BRIAN TODD, CNN CORRESPONDENT (voice-over): They're the fire brand class, deficit hawks in Congress taking a hard line on the debt ceiling talks. Some are tea party favorites who rail at Congress for past spending like Republican senator, Mike Lee, of Utah.
SEN. MIKE LEE, (R) UTAH: From a Congress that for decades has been bearing our children and our grandchildren both born and unborn under a mountain of debt.
TODD: But according to recent disclosure forms, Senator Lee has racked up significant personal debt of his own, at least $65,000 worth from a credit card and a line of credit. The forms released last month show there are a few Republicans who are demanding a hard line on cutting the nation's debt but have plenty of debt on their own. Non-partisan spending watchdog Taxpayers for Common Sense.
RYAN ALEXANDER, TAXPAYERS FOR COMMON SENSE: I think this raises questions about are you walking the walk while you're talking the talk about getting the debt down.
TODD: Senator Lee's argument, you have to put this in context.
TODD (on-camera): An aide to Senator Lee said the senator couldn't do an interview with us on this, but the aide did push back hard saying the scrutiny is, quote, "crack pot." The aide says the senator has his finances in order, is managing his debt responsibly, and that if he's doing that, who are the critics to question his role in the budget debate.
TODD (voice-over): Tea party supported Republican congressman, Joe Walsh, has played a prominent role in that debate.
REP. JOE WALSH, (R) ILLINOIS: Thank God congressmen like me were here. Imagine, step back and imagine, if the Republicans hadn't taken over Congress. This city would have raised the debt limit who knows how much.
TODD: But Walsh's ex-wife says he needs to pay up on a big debt, more than $117,000 in child support according to a lawsuit. We couldn't reach Walsh's attorney for comment, but he told the "Chicago Sun Times" Walsh doesn't owe that amount. Walsh says the attacks against him in this case are false, but also, says this.
WALSH: I'm the most openly vetted candidate in the world. I have had financial troubles, and I talked about them throughout the campaign. This is where real America is.
TODD: There's no evidence that there's any financial impropriety. What's wrong with them incurring debt millions of others do?
ALEXANDER: They're allowed to incur debt just like millions of other Americans do, but we're also allowed to push back and ask questions about if you choose to incur personal debt, that's how you choose to manage your finances. How can you tell the country that we can't manage our own debt?
TODD: The documents say two other Republican congressmen, Tim Griffin of Arkansas who recently said America has got a spending addiction, and Kevin Yoder of Kansas who said Washington needs to cut up the credit cards, each had credit card debt of at least $15,000 as of late last year. We contacted the offices of both congressmen. They didn't respond.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
CHETRY: Brian, thanks for that.
Well, tropical storm, Don, could end up dumping nearly half a foot of desperately needed rain on South Texas.
VELSHI,: Yes. The storm is expected to make landfall right around midnight along the Gulf Coast in Texas. CNN's Rob Marciano is live on Padre Island, Texas. Rob, is the good of the rain that's going to come sort of outweighing the fact that it's a tropical storm?
ROB MARCIANO, AMS METEOROLOGIST: At this point, yes, because the winds aren't going to be much greater than tropical storm strength, if at all. And even if it gets to a category 1 hurricane, you know, this coastline will absorb that fairly well. Still, the Gulf of Mexico behind me, you know, that's a potent force. We're right at about high tide now. The storm itself about 250 miles to the south and east of me, and we're just now beginning to see the cloud canopy or leading edge of that coming towards us.
The oil industry is taking some precaution. ExxonMobil has evacuated all nonessential personnel from some of their offshore drilling sites. They estimate they're shutting down about 50,000 cubic feet of natural gas production, about 8,000 barrels per day of liquid resources that are being tapped. That will stop until the storm passes. So, precautions are being taken.
And some of the local community colleges have evacuated actually, and some businesses are shutting down in spots here. All right. Here's the satellite picture. Fifty-mile-an-hour winds as mentioned. A couple of hundred miles offshore still is heading this way at about 14 miles an hour. That will bring it to this -- to the coastline here this evening with landfall tonight. The official forecast track from the National Hurricane Center keeps it at a tropical storm strength and has landfall somewhere between here and Brownsville, Texas, again, tonight through tomorrow.
Let's talk rainfall, because winds shouldn't be that big of an issue. Rainfall anywhere from two to four, in some cases, five or six inches, hopefully, will come on shore in extreme drought-stricken Texas, and some of that will get to the western part of the state. Some of it, but not as much as need. Look at the deficits in Austin and San Antonio and Houston.
Sixteen percent down in places like midland and Lubbock. Eighty and ninety, almost a 100 percent down. Some of these places haven't seen any rain at all, so they desperately, desperately need it. And they'll get some of it. You know, we flew into San Antonio yesterday, guys. And just flying in, you looked outside the airplane window, it just looked dry, and then, driving here was dry as well.
And we saw a lot of cotton crops. Farmers here have been changing over to cotton because it's drought resistant and some of that coming into harvest, and now, they're telling us that, you know, they really don't want the rain now because that decreases the yield and the quality of the cotton. So, you can't make everybody happy, but one thing's for sure, most Texas residents are welcoming the rainfall that Don will bring. Guys, back up to you.
CHETRY: All right. As long as it stays a tropical storm which is expected to do, right, Rob? MARCIANO: Exactly.
CHETRY: All right. Good to see you this morning. Thanks.
Later this year, the population on the planet Earth will hit seven billion, with a "B" mark.
VELSHI: Oh, come on! Really?
CHETRY: Yes. It's pretty remarkable growth over the past 12 years. We just hit six billion in 1999. The UN projects that we will top 10 billion mark by the year 2100.
ROMANS: No word on sustainability of the planet and how many people we can hold. Still to come this morning, major health news from the maker of Extra Strength Tylenol. We'll tell you why they're lowering the maximum daily dosage of that pain reliever.
VELSHI: And if you want to get away, we'll have some tips on how to truly disconnect while on evacuation. I won't be conducting that interview, because I'd have to refuse myself. I don't think it's possible. It's 21 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: It's 24 minutes after the hour. "Minding Your Business" this morning.
The big business story this morning, a major economic indicator, second quarter GDP that releases in just a few minutes. Economists surveyed by CNNMoney.com forecasts that the economy grew only at a rate of 1.8 percent in the quarter, slowing slightly from the previous quarter.
Big health care company, Merck (INAUDIBLE) earnings report this morning says that second-quarter profit was in line with estimates on Wall Street. The company also said it will cut as many as 13,000 jobs from its work force over the next four years.
The world's third most profitable company, oil giant, Chevron, expected to report its second-quarter earnings in the next hour or so.
Wall Street executives getting very concerned on the debt debate in Washington. A report from Credit Suisse says U.S. stocks could stumble 30 percent over the next six months to a year if the debt ceiling is not raised in time and the U.S. defaults on its obligation.
Several of Wall Street top CEOs sent a letter to President Obama and Congress yesterday urging swift action this week on the nation's debt ceiling talks or face grave consequences in the U.S. economy.
Today, treasury department officials are telling CNN that executives from 20 major banks will meet with treasury officials in New York. Top the agenda? The debt ceiling and potential fallout if a deal is not reached in time. The meeting is scheduled to take place sometime today at New York Federal Reserve, the building there in Manhattan.
Right now, U.S. stock futures are trading lower ahead of the opening bell. Stocks have been down for five days. Investors waiting for news from Washington on the debt ceiling debate as those GDP numbers come out in a little more than four minutes.
AMERICAN MORNING is back right after this break.
(COMMERCIAL BREAK)
CHETRY: A pretty shot in New York City this morning. Right now, it is 72 degrees as we look at the trees in Central Park and Central Park South this morning. A little bit later, we're looking at a high of 89, but some thunderstorms in the forecast. It's 29 minutes past the hour. Our top stories this morning.
On Capitol Hill, Speaker John Boehner will, again, try to muster enough Republican votes to pass his debt plan. Last night's vote on the floor was called off because the speaker was unable able to convince enough hard-line conservatives to back the plan. Earlier, I spoke with senior political analyst, David Gergen. I asked him about all the finger-pointing that's been taking place in Washington right now.
(BEGIN VIDEO CLIP)
CHETRY: They're talking about this leadership vacuum on both sides. Who do you think is right?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I think it's time to stop the damn blame game and get serious and get the problem solved. People can go back to their sand boxes when this is over or they should go home. But, at the moment, you know, they got to stop pointing fingers at each other. We've had enough of them. We've had it from the White House. We've had it from the Democrats, the tea party.
You know, the American people are disgusted with this and so is the world, and it's time for them to stop pointing the fingers and get -- sit down, and work this thing out. We don't have many more hours left.
UNIDENTIFIED MALE: Just the complaint against Boeing. It was also the --
(END VIDEO CLIP)
CHETRY: We also spoke to one of the few Republican holdouts when it comes to the House speaker's plan, Congressman Trey Gowdy. He says he predicts the House will approve Boehner's debt plan today.
A terror plot targeting soldiers at Ft. Hood Texas has been foiled. Police arrested Naser Abdo, an AWOL Muslim-American army private, who allegedly planned to kill soldiers outside of the base. It was just two years ago that an army major allegedly killed 13 fellow soldiers there. There is good news and bad news for people in Texas. Tropical storm Don is on its way and expected to make landfall right around midnight with 55-mile-an-hour winds. The heavy rain is needed, though. Most of the state of Texas dealing right now with a severe drought. Ali?
VELSHI,: Back to our top story. The debt ceiling deadline is just days away. And again this morning House Speaker Boehner is going to try to coax Republican holdouts to back his plan. But you know what, some of them are just not going to budge.
ROMANS: Yes. Joining us live from Washington is Stephen Moore, the senior economics writer for the "Wall Street Journal" editorial page. Stephen Moore, you understand markets. You also understand the political philosophy driving these freshmen who don't want to concede anything. What does House Speaker John Boehner need to do to get their support?
STEPHEN MOORE, SENIOR ECONOMICS WRITER, "WALL STREET JOURNAL" EDITORIAL PAGE: Well, you know, Christine, he has an insurrection on his hands. He didn't have the votes last night to get this passed. As you just said it was the conservative House, many of them, the freshmen, who are elected by Tea Party people who basically, said we can't go along with this deal. They are holding out for more spending cuts.
I do expect that sometime today, we will get this through the House but you know what, this could go late. This could go until midnight again. They are not going to hold the vote until they have all of the votes lined up and right now they are about seven or eight short.
VELSHI: Stephen, you are philosophically aligned with some of these physically conservative members who feel this is the only chance we have got to get spending under control and to not have taxes drive this.
MOORE: Right.
VELSHI: Bottom line, for a guy like you, you and I and Christine has been talking for years. Fiscal conservatives have gotten more out of this deal than they wouldn't have otherwise if it wouldn't have gotten this far.
ROMANS: Look at what they got from the president, some $4 trillion in cuts, right.
VELSHI: So what do you say to your fellow physical conservatives this is a pretty good win?
MOORE: That's we said in the editorial page of "Wall Street Journal" a couple of days ago where we said this isn't a deal we love but at some point we have got to get this done. And I think just for Republicans, right now is maybe a time to take the high road and say we got the best deal we could, you know. We're not happy with this. And by the way, I do think we are going to get this done before August 2nd. It might be one hour before the stroke of midnight, but nobody is going to be really happy with this outcome. And as you just heard, a lot of people are just so disgusted with this all over the country. So I'm of the opinion right now, get this thing done. Nobody is going to than completely happy with the outcome.
And I'll say one other thing. Even if we go past August 2nd, I want to make this point clear and I've made this on your show many times. There isn't going to be a default. I get so annoyed a default on the debt. That won't happen even if we go past August 2 because we have the money to pay the bondholders.
ROMANS: We will pay our bondholders. I don't think any question that is going to happen. But when we start not paying our other obligations that our creditors, right, and the rating agency look at us and say, OK, is that a technical default.
VELSHI: S&P has said that, and Ben Bernanke has said that. So you could get a technical default because you're not paying vendors, or something.
MOORE: In my opinion, this is -- if we go past August 2nd, it will only go one or two days past August 2nd. The truth is right now, Ali, the two sides are really not that far apart right now. If you look at the Boehner plan versus the plan Harry Reid has put forward in the Senate, they are actually pretty close. And the one area where I think Republicans have had a victory on this is that taxes, right now, are off the table.
ROMANS: Stephen, I want you to sort of use this moment since you are ideologically aligned with the people who are holding this back to tell them because many of them are not believing us or anyone else that there are ramifications in global markets if we don't raise the debt ceiling. Could you try to tell them here in this venue what happens if we don't raise the debt ceiling, what message that sends to capital markets and securities markets around the world?
MOORE: I don't think it's the ends of the world. Here is my opinion on this. I think a bigger danger right now that you all and the press are not focusing enough on is if we do get a debt deal done and the financial markets say, you know what, this isn't serious, this isn't a serious plan to deal with the debt, that could also spark a financial crisis because people then say the American political system is not capable of dealing with -- do you know what I mean? Ali, you got to admit that is a risk-to-
VELSHI: Sure, but let's clarify for our viewers, because this is something you understand and not getting clear from a lot of these congressional Republicans who keep on saying we are likely to get a downgrade anyway. The downgrade that we may get because we have been unable to deal with this is a small downgrade from AAA. The downgrade you get by defaulting on a loan -- we all agree we're not likely to go down that road - it's a very different kind of downgrade. That is a serious one. MOORE: I think both scenarios are serious, quite frankly. My preferred solution is to get the biggest cuts in spending that we can with enforceable caps and whether we get there or not. Look, we get $2 trillion or $3 trillion savings over ten years is a start but the next ten years we will spend $40 trillion. We have a big debt crisis on our hand and this is only the first step. Once we get this resolved then we will be talking about the spending bills that come down in September. So this is like Groundhog's Day, right? This debate over the budget just never seems to end.
ROMANS: That movie was funny. This isn't funny.
(LAUGHTER)
MOORE: Exactly. This is serious.
VELSHI: Steve, last question -- do you think this balanced budget thing has legs?
MOORE: Look. I think the Republicans are going to continue to run that as far as they can. But right now there is not 67 voters in the United States Senate. But you know what, about 67 percent of Americans think this debt is so big maybe it's time for the balanced budget. I think on that issue, it's a bad idea whose time maybe has finally come.
(LAUGHTER)
VELSHI: Well said. Stephen Moore, thanks so much. Good to see you.
MOORE: Thanks.
VELSHI: Stephen Moore heads the economics side of the "Wall Street Journal" editorial page and former head of the Club for Growth.
CHETRY: Good conversation guys. Ahead on AMERICAN MORNING, is it possible to have a tech-free vacation? I don't know. No blackberry, no laptop with you.
VELSHI: No, it's not! It's not possible!
CHETRY: We're not talking about you, Ali. We will find out how you disconnect --
VELSHI: Don't do it!
(LAUGHTER)
CHETRY: -- hot spots, and we're not talking about Wi-Fi. It's 37 minutes past the hour.
(COMMERCIAL BREAK)
ROMANS: We have new economic news in and it looks like it's not great. OK, the economy grew slower rate than expected in the second quarter. GDP, the sum of all the economy produces, 1.3 percent.
VELSHI: That is the growth in what we produce.
ROMANS: But it's the first quarter that we are looking at here. It looks like a revision of the first quarter. The first three months of the year, the economy only grew at 0.4 percent.
VELSHI: Four-tenths of a percent is much lower than we thought. A healthy economy is growing at three percent or more. Just to compare it for you, what was China's growth?
ROMANS: It was 10 percent, eight percent to 10 percent or something.
VELSHI: Africa is growing at four and a half percent. So this is very, very low and it's not enough to create the jobs that we need in order to really get a sustained recovery. So for all of the efforts we are going through to change the recovery, we have seen job growth slowdown in the first few months of this year. This is another sort of contributing factor that suggests things are slowing down.
CHETRY: Some say, of course, emerging economies will grow faster because they have --
VELSHI: Of course, they will. Sure.
CHETRY: They have a lower bar.
VELSHI: I'm not meaning to suggest we should be growing the way China is. There are a lot of problems with growing that quickly. The issue here is that we are growing slowly. We expected to in the second quarter. We were not expecting the first quarter to be that low.
CHETRY: So you're saying when they revise those numbers, we thought we were growing probably double the pace we were?
ROMANS: Yes. And the narrative we thought things were slowing in the second quarter. What happened is things are much worse in the first quarter and they got a little better in the second quarter. So economists who have been trying to get a gauge on the economy missed it again.
VELSHI: It's hard to tell exactly what is going on. Bottom line, the GDP --
ROMANS: So we'll see how it affects futures and stock market trading today.
CHETRY: We have been down 450 points the last five days.
ROMANS: The Dow down 66 points and we'll see if it has any effect at all.
CHETRY: In the meantime, we have to get a break.
ROMANS: That's the perfect segue!
(LAUGHTER)
CHETRY: If you need a vacation and you want to get away, it's peak summer vacation time obviously. And for a lot of people even when you're away on vacation, you're really not away on vacation because you bring your laptop, you bring your phones and PDAs and on and on and on. If you're sitting at the beach your version of relaxing is reading from your eReader.
According to a recent only poll, 35 percent of people admitted to checking their e-mails on vacation, 22 percent said they checked their voicemail, 22 percent occasionally took those calls after checking their voicemail and realizing people were calling them.
So joining us for tips on a tech-free vacation is Mark Orwoll. He's the international editor for "Travel + Leisure." Thanks so much for being bus this morning.
VELSHI: I just have to ask a question -- what are we achieving here? Mark will tell us how to go away and not check your stuff or go away and be fully wired?
MARK ORWOLL, INTERNATIONAL EDITOR, "TRAVEL + LEISURE": No, how to go away and not check your stuff.
CHETRY: There are some resorts take the decision-making out of your hands.
ORWOLL: Absolutely.
CHETRY: Tell us about that.
ORWOLL: Health oriented resorts especially are doing this. A place in California called the ranch of Live Oaks, a beautiful place. There is no red meat. No sugar. No watches. No alcohol.
ROMANS: Wait, what does red meat have to do with being wired?
ORWOLL: No iPhones and for blackberries. It's a gestalt sort of thing, Christine. But you'll pay a lot of money to do this too. We sent a writer this who smuggled in her cellphone and she was out on a nature walk. The cellphone went off. She is surrounded. It was bad, it was bad. So you go to a place where you're actually encouraged to disconnect.
CHETRY: What is the result from that? How does it help? What do people say?
ORWOLL: We know we work too much. In this country we get less vacation than almost anywhere else in the world. We are not paying attention to the things that are important to us and why is that? Because we're looking at the stupid blackberry in our hand and talking to people in the office when we should be lying on the ground and reading a book and talking to the family. VELSHI: I'm biting my nails, I'm so nervous about the can conversation. Tell us about digital detox. You can actually go and say I want a few days of peace.
ORWOLL: Some people call this a hotel trend. I don't know if I'd go that far. The Fairmont Hotel Group started this in 2008. The call it electronic rehab. You would go and check your cellphone, your blackberry and they would lock it up behind the desk and you sign a pledge not to use it.
(LAUGHTER)
Another hotel, Broughton hotels in Chicago and California, they do something called digital detox and they've had this earlier this year. You get a little lockbox and put your stuff in the lockbox and give it to them and you get a 30 percent discount on your rates. They are helping you along.
ROMANS: You can also go places where the connectivity is slow and doesn't exist. No Wi-Fi.
ORWOLL: Christine, it's harder and harder to do that. You might go to the North Pole or the wild of Alaska.
CHETRY: Or you could just travel on the West Side highway because it's impossible to get cell service.
ORWOLL: Oh you've got -- you've got to change carriers. But -- but there's a place (AUDIO GAP) called Ultima Thule (ph) a very high- end sort of adventure resort. You're going to get out there and you know, fly fishing and hiking the mountains. It's a -- it's a hundred miles from the nearest boat.
ROMANS: I prefer a GPS tracker and AM, cell phone to call the authorities when I get lost.
CHETRY: It is interesting because when you talk about being able to go on vacation, you're right.
(CROSSTALK)
ORWOLL: Yes.
CHETRY: A lot of people aren't -- aren't really on vacation any more in terms of their mind. I remember when you used to have to buy a phone card? Remember? And you'd go to -- you'd walk to the -- you'd walk to the pay phone at the resort because you didn't want to pay the roaming fees.
ORWOLL: Yes, I mean, I think we forget how there were those periods --
(CROSSTALK)
VELSHI: Right.
ORWOLL: -- in our existence where we could chill out. I mean, airplanes, for example.
VELSHI: Right.
ORWOLL: That was always -- it has been -- in fact, in the states, most of it still is, enforced electronic abstinence I like to call it. And you know, you really sort of just get yourself in a little cocoon where those electronic rays can't penetrate and it's very, very calming, reassuring.
That's changing, though. Asia, you can pick up a cell phone and make a call. Europe dropped its ban on cell phones in 2007.
ROMANS: Haven't you e-mailed and called us before?
ORWOLL: Well, you can get Wi-Fi now on a lot of airlines now. And I think it's only a matter of time, unfortunately, before cell phone use on flights in the U.S. is going to be permitted. The last bastion of electronic freedom -- freedom from electronics, I should say.
CHETRY: Right.
ORWOLL: Is probably poised to be extinct.
VELSHI: Because when I get -- you know, when I get e-mails that say people are on vacation, they can't respond, I think that's why you're just being lazy, you can't do it? But if somebody says, I sometimes get these out of office replies that's says, I'm going to be in a place that doesn't have cell phone receptions.
ORWOLL: A quick story, a quick story. I just took my family down to Walt Disney World. The Friday before we left my Blackberry died and my only connection to my work e-mail. I went to our tech guys. They said, oh we can get you a new one. Well, it never worked.
So I was -- I was down in Orlando and having a great time. I could not get a single e-mail. I have to admit the first couple of days I was a little shaky.
(CROSSTALK)
CHETRY: When you came back what did you find? There's 600 to 6,000 e-mails.
ORWOLL: You know, I -- but you know what? There was not a single crisis that happened that couldn't have been handled by somebody else in my absence.
VELSHI: There you go.
ORWOLL: I don't know what that says about my job.
VELSHI: Mark, good to see you.
ORWOLL: All right, thanks guys.
CHETRY: Mark Orwoll, international editor for "Travel and Leisure" Magazine. Thanks so much.
ORWOLL: All right.
VELSHI: All right, it is 47 minutes after the hour. We're going to check the morning's top stories and the markets straight ahead.
(COMMERCIAL BREAK)
ROMANS: New this morning, the Defense Department trying to figure out what caused an F-16 fighter jet to skid off a runway and crash yesterday. It happened in an air field in Wisconsin. The rough landing was caught on tape. Witnesses say they were watching fighter jets coming in for landings all morning but this one looked different as it approached.
(BEGIN VIDEO CLIP)
ED KNUTSON, WITNESS: I just saw the one previous, you know, taxi through going pretty slow. And he came past so fast I thought, oh, no, this is not going to be good.
(END VIDEO CLIP)
ROMANS: The pilot was able to walk away from the wreck unhurt thankfully.
CHETRY: The makers of Tylenol reducing the maximum daily dosage of the pain reliever. They want to lower the risk of accidental overdose from acetaminophen which is the generic -- which is the active ingredient, the generic of Tylenol.
Beginning in the fall, labels of extra strength Tylenol packages will list the maximum daily dose as six pills, that's down from eight to lower the daily dose on a regular Tylenol and other adult products containing acetaminophen as well starting in 2012.
VELSHI: Well, still ahead on AMERICAN MORNING: who says there is no crying in baseball? One young fan's memorable moment when we come back.
(COMMERCIAL BREAK)
CHETRY: Its 52 minutes past the hour right now, a look at your morning headlines.
House Speaker John Boehner's plan to raise the debt ceiling and cut spending could come up for a vote today. Republicans called off the vote last night after it became clear that there wasn't enough support for that bill.
Well, police have uncovered another terror plot that would have targeted soldiers at Ft. Hood in Texas. They have arrested Nasser Abdo, an AWOL Muslim American Army Private who allegedly was planning to kill fellow soldiers outside of the base.
Investigators say it was pilot error that contributed to last year's plane crash in Russia that killed Poland's President. Refusing instructions from Russian air traffic controllers, as well as bad weather also being blamed for that.
And they're desperate for rain in drought-stricken Texas. Tropical storm Don perhaps could be about to deliver. The storm is expected to make landfall in south Texas around midnight, bringing several inches of rain. Don's top winds are close to 60 miles-per- hour.
And just a quick note right now, we're getting some new numbers in from the GDP, economic growth according to CNN Money. In the second quarter tepid, the government reports today they say that growth in the first quarter was actually a lot slower than they initially thought. They say that GDP, which is really the broadest measure of the nation's economic health, rose at annual rate of 1.3 percent in the second quarter according to the Commerce Department.
We'll have much more analysis on that from Ali and Christine. But we're going to be right back with the day's headlines.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SAL DIMICELI, COMMUNITY CRUSADER: When I go through suburbia America, where the small towns, everybody is trying to hold their head up with pride.
You've been looking for work? I know it's tough in a recession.
UNIDENTIFIED FEMALE: I went and sold all of my jewelry yesterday.
DIMICELI: These people, behind closed doors, they tell their neighbors they are fine. They would as soon go in the house and starve.
How much do you owe right now?
UNIDENTIFIED FEMALE: The gas bill I owe about $800.
DIMICELI: I find the situation getting worse. They need food. They need help with the utilities. This is 2011 in America? We should be helping each other.
I'm Sal Dimiceli and my mission is to help my fellow Americans who have fallen on hard times.
In a week, I will receive 20 to 30 letters.
"Me and my family are in desperate need of help."
"We do now want to become homeless."
I want to verify it's genuine and I want to get to them as quickly as possible. I know right now, it's tough for everybody. We will be here for you and we will help you out.
I tell them how I grew up in poverty and how I understand.
Here's a hundred dollars for gas.
I help people with necessities of daily life and at the same time, I get them together to do a budget so they can continue to survive.
I brought this for you so you can go get your wedding band back.
I want them to feel free of their pain.
UNIDENTIFIED MALE: We are so happy. Thank you.
DIMICELI: I want them to feel the compassion that we are trying to share with them, to wrap our arms around them and say, come on, I have a little extra strength I want to share with you and let's get you back on your feet.
(END VIDEO CLIP)
ROMANS: All right. We are going to leave you this morning with a touching moment from yesterday's Red Sox/Royals game. Check out Boston pitcher Josh Beckett, taking time out to give a young fan in the first row a baseball.
You know, talking about making a kid's day. That little guy was so overjoyed, he couldn't stop crying. A ball game with dad and a souvenir ball from an all-star baseball pitcher. Not a bad way to spend a Thursday afternoon.
VELSHI: Oh, man.
CHETRY: What a cool kid.
VELSHI: That is excellent.
CHETRY: How cute. And friends of his, do not make fun of him, ok?
ROMANS: That's awesome.
CHETRY: There's no shame in crying.
VELSHI: Nothing wrong with crying, right, Kiran?
CHETRY: Absolutely. I'm not going to cry. I just want to tell you guys as some of you know today is going to be my last day here at CNN. It's going to be my last day on AMERICAN MORNING. And before I leave, I just wanted to thank everyone, all of you out there for letting me into your living rooms each morning for the past nearly five years. I've enjoyed. You know, I always say you have to really, truly love what you do to leap out bed before 3:00 a.m. every morning and that has been the case for me. I feel very lucky to have been able to work with wonderful, kind, dedicated people here at CNN.
I've always marvelled at our ability to work really hard. I mean arguing and working hard. Look at my buddies. Can we take that shot again, please?
These people come in before midnight day after day after day. We work hard to get it right. But through it all we have always found a way to laugh and enjoy our work.
So I'm terrible at good-byes. I'm not going to say good-bye. I will say see you soon. And to both of you, it's been a pleasure.
ROMANS: We'll see you again.
CHETRY: Ali?
VELSHI: Thanks.
CHETRY: Thanks, guys.
(CROSSTALK)
KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": All right. I'm going to break it up here. We are going back to that shot, Kiran, of Petey. Let's go to Petey. Let's get another shot of Petey there, yes because Petey will make us laugh. Yes. Petey, there he is. Give us a shout- out.
There we go.
VELSHI: There he is. Our floor director and our great crew here -- Kyra.
CHETRY: Guess what Kyra? Kyra, Petey said to me he is going to learn to e-mail just so he can keep in touch with me. You know what an honor that is.
VELSHI: Just to keep in touch with Kiran.
PHILLIPS: Oh, yes, Kiran, you know that's why I went there, because Petey adds so much joy to, I know, the mornings for you guys and he has made you laugh and been a big part of making those mornings special for you.
So there we go. We want to leave on an upbeat note. Best of luck to you, Kiran.
VELSHI: Right.
ROMANS: Thanks, Kyra.
PHILLIPS: All right, guys.
CHETRY: Thank you.
