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American Morning
New Hampshire Girl Mysteriously Disappears; White House and Congressional Leaders Reach Debt Deal; Vote Expected on Debt Deal; Bloody Crackdown in Syria; Jailed U.S. Hikers Await Sentence; Mexican Drug Cartel Leader Arrested; Plaxico Burress Signs with Jets; Health Insurance Plans Must Provide Birth Control for Free
Aired August 01, 2011 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: There's a deal in place to end the debt crisis. The House and Senate could vote on it today. Global markets are rallying, but America may not be out of the woods yet.
CHRISTINE ROMANS, CNN ANCHOR: An 11-year-old New Hampshire girl missing. Her parents say the last time they saw her, she was sitting in her room on her computer. The next morning, she was gone. The all-out search for Celine Cass ahead.
CAROL COSTELLO, CNN ANCHOR: And a passenger jet skids of a runway, crashes through a fence and gets cut in half with 163 passengers on board. We'll tell you how this near disaster turned out on this AMERICAN MORNING.
VELSHI: Good morning. It is Monday, August 1st. Welcome to AMERICAN MORNING.
COSTELLO: And we start with a possible breakthrough in the debt ceiling crisis. In just a few hours the house and Senate are expected to vote on a plan by President Obama and congressional leaders to raise America's borrowing limit in exchange for massive spending cuts.
(BEGIN VIDEO CLIP)
BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: I want to announce that the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, the default that would have had a devastating effect on our economy.
(END VIDEO CLIP)
VELSHI: OK. Here's a sense of what the agreement looks like. It will increase the debt ceiling by up to $2.4 trillion which is enough to get us through 2012. Now the plan will include $917 billion in immediate spending cuts, and it preserves the Republicans' bottom line of no tax increases. It also requires a new bipartisan congressional committee to recommend additional cuts by the year's end, and if they don't, cuts will be imposed. In announcing the plan the president made clear that compromise is far from perfect.
(BEGIN VIDEO CLIP) OBAMA: Now, is this the deal I would have preferred? No. But this compromise does make a serious down payment on the deficit reduction we need and gives each party a strong incentive to get a balanced plan done before the end of the year.
(END VIDEO CLIP)
ROMANS: But reaching a deal is only half the battle. Congressional leaders, they still have to sell it to members. In the House, Minority Leader Nancy Pelosi saying she needs to see the final product in writing before she can decide if she supports it. Republican Senator Mike Lee now threatening to filibuster today's vote.
(BEGIN VIDEO CLIP)
WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Senator, what do you think? Are you going to vote in favor of this agreement?
SEN. MIKE LEE, (R) UTAH: You know, I haven't seen the legislation yet. I haven't had an opportunity to read it yet. Based on the summary I've received so far I'm not inclined to support it. I cannot support any effort to raise the debt limit that isn't accompanied by immediate and permanent structural spending reform.
(END VIDEO CLIP)
COSTELLO: The editorials are out this morning over all of this, and they are not kind. "The New York Times" says "there is little to like about the tentative agreement between congressional leaders and the White House except that it happened at all." "The Washington Post" saying "It is not a solution of which anyone involved in this heart- stopping performance ought to be proud." And the "Wall Street Journal" says it's a victory for Republicans -- quote, "The debt ceiling is a political hostage the GOP could never afford to shoot and this deal is the best Republicans could have hoped for given that limit had to be raised."
So is there anything for the White House to cheer about besides a deal being done at all? Gene Sperling joins us. He's the director of the National Economic Council and assistant to the president for economic policy. Good morning, Mr. Sperling.
GENE SPERLING, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Good morning.
COSTELLO: So not many people are doing a happy dance over this. I mean they think President Obama capitulated on shared sacrifices. Where's the revenue? Where's the tax increases?
SPERLING: Look, as the president said many times, we have divided government. We had the responsibility to make sure that didn't mean dysfunctional government that ended up hurting our economy. This is a compromise.
COSTELLO: Is that the only thing that Democrats got out of that, Mr. Sperling, was that? SPERLING: No, not at all. This, first of all, did do a down payment in spending cut reduction. But let's be clear. This makes sure that a good amount of that deficit reduction comes from security and defense spending, so there's more shared sacrifice in how we're cutting spending. It helps protect college scholarships for people who are on -- millions of young people on Pell grants.
Secondly, it sets up a second round of deficit reduction, more serious deficit reduction, that this president will insist must include not only structural entitlement reform but the type of revenue reform that he's called for, that lowers tax expenditures and tax breaks, but ask those who are most --
COSTELLO: Let's talk about the second rounds of cuts, Mr. Sperling, because this special committee that's going to be formed in Congress is going to decide what to cut. And if they can't reach an agreement, there's going to be punishments put into place. And one is, to punish the Republicans they're going to be massive cuts in defense spending, to punish the Democrats, there will be cuts in Medicare.
I'm just thinking if the president really wanted to raise revenue, why not put into that agreement that the punishment for Republicans should be to raise taxes?
SPERLING: You know, that's one of the things in an ideal world we would have done. But when you have an incentive that makes both sides have to come to the table, this president believes very strongly that the American people will side with him that the type of big deficit reduction we should do should not put all of the burden on seniors or students or working families as some of the Republican plans would like to do, but does require shared sacrifice, and that means tax reform that asks the corporate tax expenditures, that asks those who are most well off to be part of the solution.
And this president will insist on that. He did not give up anything in that goal of shared sacrifice in this package --
COSTELLO: Well, let me run this by you.
SPERLING: -- and, in fact, he will insist, he will insist that it reflects the type of shared sacrifice he wants. And remember, this president also has the veto pen to ensure that the tax cuts for the most well off are not extended if we do not get the type of tax reform that is fair to the middle class and doesn't let those who are most well off and well-connected off the hook.
COSTELLO: And I'm sure many Americans hope that he uses that veto pen in that regard, as many progressives. I just want to read you something written in "The New York Times" this morning because columnist Paul Krugman certainly came out swinging about this debt ceiling deal. He said, quote
"Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it's just me, but I see a pattern here."
SPERLING: Well, that's wrong, and wrong, and then I think wrong. First of all, the tax cut deal in December actually for progressives extended all middle class and lower-income tax cuts that are helping millions and millions of hard-pressed families make it through in this economy and got a payroll tax cut. It was a compromise in divided government.
And let's remember this president stood firm and said we are not going to allow a situation where anyone uses the default of our country as a way of getting their way on the budget. And they said that no, we could only extend the debt limit for five, six months so that we're going through this entire thing again in Christmas.
It was the president who stood firm, who didn't blink on that, and in the end we have a deal that takes that threat of default off of our political system, off of our economy into 2013. That was very important for this economy, for this president, and for us governing in a sound way as a people.
COSTELLO: Well, it still has to go through both houses of Congress and be signed into law by the president, something that many in Washington are hoping happens later today. Mr. Sperling, thank you so much for joining us this morning. We appreciate it.
SPERLING: Thank you.
VELSHI: All right. Here's what happens now. Democratic leaders in the Senate hope to begin debating this debt deal by early this afternoon and vote later in the afternoon. A Republican who was on the conference call with Speaker Boehner says the House is going to try and vote today as well. Joining us from Washington now is Athena Jones. Athena, what is likely to happen this afternoon on the hill, and are we likely to see resolution before we go to sleep tonight?
ATHENA JONES, CNN CORRESPONDENT: Well, that's certainly everyone's hope here, Ali. It's anyone's guess what will actually happen. As you said, the plan is for the Senate to go first, and the thinking is that there will be beginning debate around noon, maybe until 2:00. They'll vote sometime in the late afternoon and then send that over to the House.
The thing is, this morning, caucus leaders on both sides of the hill and both parties will be meeting with their members, explaining what this deal is all about. Maybe there will be some cajoling going on. We know what some of the issues are on both sides already. On the Democratic side we know there are people disappointed that the bill the issue doesn't include tax increases. On the Republican side, conservatives, especially these Tea Party members, who don't want to see the debt ceiling raised at all.
And yet we know that the leaders on both sides and both parties understand what's at stake here. It was interesting last night you heard Representative Pelosi not make a commitment that her caucus would support this. That's not totally unusual. A lot of members of Congress will say I want to wait and see this deal. I want to read it, read the bill and then I'll decide how I'm going to vote.
I spoke with a Republican who was on that conference call with Speaker Boehner last night when he laid out the details for his caucus. And this congressman told me that while he believes this is going to go forward, he still wants to read it before he makes his decision, Ali.
VELSHI: All right, Athena, thanks very much. We'll be staying with this story, obviously, and your reporting on it all morning.
In a little more than 30 minutes from now we'll get both party's take on the debt deal when we talk to Democratic Senator Dick Durbin and Republican Senator John McCain.
ROMANS: All right, still no sign of 11-year-old Celina Cass. Police say the New Hampshire girl was last seen in her room at her computer last Monday night. Her parents say when they went to wake her up the next morning she was gone. Federal, state, and local investigators spent the weekend conducting searches by air, land, and water. The girl's father making this plea yesterday for his daughter to come home.
(BEGIN VIDEO CLIP)
ADAM LARO, MISSING GIRL'S FATHER: We wonder where my daughter is, and we're hoping the best for her safety. I'd appreciate if we get her back very soon. If she hears me now, tell her daddy's OK now. I'm getting much better and I'm recovering from the hospital. So whenever you're ready to come home, Celina, daddy will be here for you.
(END VIDEO CLIP)
ROMANS: It's not clear why see Celina's father was hospitalized. The FBI is offering a $25,000 reward.
Norway terror suspect Anders Breivik reportedly purchased bomb making materials and other equipment for last week's attacks on eBay. According to Britain's "Sunday Telegraph" Breivik used the online option site to buy sulfur powder for explosives and a drill press vice to make poison tipped bullets. As for the suspect's mental state, the head of a medical panel believes Breivik is in control of his actions and is not insane.
COSTELLO: And more reports of gunfire in Syria following a violent, bloody weekend. Government tanks rolled into the city yesterday, killing at least 71 people and hurting more than 100 others. President Obama describing the attacks as "horrifying."
ROMANS: And there were a few broken bones and bruises but no fatalities after this Caribbean airlines jet slid off a runway and crashed Saturday morning in Georgetown, Guyana. The Boeing 737 split in half basically --
VELSHI: Unbelievable.
ROMANS: -- after crashing through a fence in rainy weather. VELSHI: Wow. All right, still to come this morning, a big announcement from Europe's largest bank this morning could affect your local banking branch. We'll tell you more coming up.
ROMANS: Also dangerous temperatures in the Midwest. Heat advisories, heat warnings are now in effect. Any relief in sight? We'll check with Rob Marciano next.
COSTELLO: And the state that just made it illegal for teachers and students to be Facebook friends. You are watching AMERICAN MORNING. It's 11 minutes past the hour.
(COMMERCIAL BREAK)
VELSHI: It's 15 minutes after the hour. Let's go to Rob Marciano.
COSTELLO: Slowly.
VELSHI: It's all working slowly for me today, let me tell you. I'm so exhausted with the debt stuff.
Tell me something, anything, Rob. Just don't say the words "debt" or "ceiling."
ROB MARCIANO, AMS METEOROLOGIST: OK. We are going to -
VELSHI: I don't want to hear about clouds having a low ceiling, any of that kind of stuff.
MARCIANO: We're going to - we're going to top out the temperatures and keep them below the 120 degree mark, how does that sound? August 1st, lazy days of August, here we go. July a record setter for many parts of the country. I don't have to tell you that, it was hot, especially the last week of it.
D.C., where it's pretty hot right now, aside from the weather, 25 days of 90 plus in July. That made that a record breaker. And Dallas seeing 30 days in a row now and counting of 100 degrees plus. All right. So that's where the heat is going to be core today or centered.
Florida, the northeast eventually, and the Midwest, seeing thunderstorms. Let's take a look at some of the thunderstorms that are rolling through parts of Western Minnesota, Wahpeton (ph) and Fargo. These are some heavy duty thunderstorms that are rolling down to the south and east. Thunderstorm watch in effect there until noon local time.
All right. These are the areas that we think we'll see some delays. In the afternoon and evening, a little front coming through the northeast. So D.C., New York metros, Philly, you'll see some delays late in the day. San Francisco, early in the day, some low clouds and some fog there.
And here's your heat warnings for, yes, Dallas, Oklahoma City, up through Wichita, heat indices will be up and over 110 today; actual temperatures 109 in Dallas, actual temperatures tomorrow 108 and will continue it looks like right on through the middle part of the week.
All right. Other big story is this. Tropical action just east of the westward or the Winward Islands and into the Caribbean. This is heading towards the Northern Caribbean. It will likely be a tropical depression or tropical storm. We said that yesterday. They got another aircraft rolling in there today. If it becomes a tropical storm, it looks a little healthier this morning on the satellite, its name would be Emily and our initial computer models are showing some tracks through the Northern Caribbean and potentially towards the U.S. We'll be watching Emily very carefully.
I didn't say "ceiling." I don't think.
VELSHI: You didn't.
ROMANS: Well done.
COSTELLO: You didn't say rain deficit either, which was good.
MARCIANO: Nice, Carol.
ROMANS: Thanks, Rob.
MARCIANO: Back to you (ph).
COSTELLO: Thank you, Rob.
Still to come on AMERICAN MORNING, our question of the day, it's pegged off the debt ceiling agreement. We want to know who won last night. Wall Street, Main Street or was it someone else?
Send us an e-mail, a tweet, tell us on Facebook. We'll read your comments throughout the morning.
(COMMERCIAL BREAK)
VELSHI: Twenty-one minutes after the hour. "Minding Your Business" this morning.
A sigh of relief, that's the line on Wall Street today. Investors feeling bolstered now that U.S. lawmakers have reached a deal to raise the nation's debt ceiling. Right now, U.S. stock futures are trading higher on that news and world markets made gains overnight.
But investors remain vigilant this morning as Congress needs to pass this deal officially. The Dow lost more than four percent last week as Washington struggled with these debt talks and that closed out the worst month for blue chip stocks since August of last year.
Gold prices are retreating overnight on news out of Washington, gold futures dropped about one percent in overseas trading. That's following a record high on Friday of $1,634 an ounce when investors rushed into the precious metal over uncertainty on the debt deal.
HSBC just announced that it's slashing 5,000 jobs in the U.S. and abroad. The company says that about 25,000 more jobs will be cut over the next two years. The bank also saying it's sold 195 of its U.S. banking branches to First Niagara as part of its restructuring plan.
And 107 S&P 500 companies will report their quarterly earnings this week. Allstate out saying with its earnings already this morning, saying its profits were affected by $2.3 billion in catastrophe losses last quarter, that's a record for that company.
Earlier this morning, insurance company Humana announced its earnings beat Wall Street's expectations.
On investor' minds this week, the big monthly jobs report. Analysts surveyed by Briefing.com are forecasting that only 78,000 jobs were created in July, but that would be a lot more than last month. Wall Street got a shock when the government announced that only 18,000 new jobs were added in June. That obviously is way below what we were expecting.
Don't forget, for the very latest news about your money, check out the new CNNMoney.com.
AMERICAN MORNING back right after this break.
(COMMERCIAL BREAK)
ROMANS: Just one day before the government no longer has enough cash to pay all of its bills, President Obama and Congressional leaders striking a deal to raise the nation's debt limit and cut the nation's spending, though both the Senate and the House still have to approve this plan.
Joining me now, Jay Powell, he's a former Treasury Undersecretary under President George H.W. Bush and a visiting scholar at the Bipartisan Policy Center. Welcome to the program.
Let me ask you first, Jay, you think that this deal is enough to avoid a downgrade in the near term for the big rating agencies?
JAY POWELL, FMR. TREASURY UNDERSECRETARY UNDER PRES. GEORGE H.W. BUSH: Well, the one that's at issue is really Standard & Poor's and they haven't been really clear about that. But I suspect that Standard & Poor's will wait to see the outcome of the Congressional committee that's been formed before they make their final decision and that's certainly what I think they ought to do.
ROMANS: And the Congressional committee you're talking about the second part of all this, where you have six Democrats, six Republicans will get together, this committee that's going to decide how to cut another $1.5 trillion. And if they don't do it, then this - the deal on the table, there would be big cuts to force them to do that. There will be punishments to make sure that they can get that done. Explain that to us. Do you think that's a good idea?
POWELL: Well, I'd say, you know, in a way they've made the committee too big to fail. They've - there's a guarantee of $1.2 trillion in cuts if the committee does fail and half of that will fall on defense and half of it will fall on Medicare providers. So that's meant to force the Republicans and the Democrats to reach some kind of agreement to get at least $1.2 trillion in savings. So it seems very likely that that will happen. And in that narrow sense, it looks like it could be an effective trigger.
ROMANS: A lot of people are pointing out this morning that tax hikes wasn't one of those things that would have maybe been a sign that the president and White House a little more - had a little more power in these negotiations. Who do you think won here? Were there any winners or did everybody give up enough?
POWELL: Well, in a way the country won because we are not going to default if this passes both the House and Senate today or before tomorrow. And in a way nobody won because this is not the grand bargain that could have happened on several occasions in the last couple of years. And that will still have to happen.
This doesn't - this neither raises taxes nor does it address entitlements until the second step and so I think we can - we can breathe a sigh of relief but we cannot feel any satisfaction from this deal.
ROMANS: We have gone through so much to get this done, Jay. I mean, the country watching all of this, and I think it's important to remind people that a year from now, the national debt, will be bigger and two years from now the national debt will be bigger, right? We're talking about slowly bending the curve, but we are still a country that is living beyond its means?
POWELL: Look, it's a start and a big part of it - I'm going to look at it constructively.
ROMANS: Good.
POWELL: A big part of it is that the public is focused on not just the need to do it, but the great difficulty and the important choices that have to be made. And so, you know, one hope that the 2012 election will be focused very much on this and that we'll return to this issue in a big way and maybe make another big step toward completing the job after the election.
ROMANS: Let me ask you about some of the technical aspects of this. So many people have told us that we had until maybe July 22nd to get some legislation written so that there wouldn't be disruptions in the first week of August.
Do you think there's enough time to avoid some disruptions from what Treasury has to do? Treasury is going to have to also issue a bunch of debt as well now that it's going to have more borrowing. It's going to be important to see what the rest of the world thinks about that.
POWELL: Yes. I mean, assuming that the - that the plan is approved by the House and the Senate before tomorrow night, then there wouldn't be any significant disruptions and I think the market obviously reflects a great sigh of relief and belief that that is the case. July 22 date was really the date that there had to be a verbal agreement if it was going to be a big plan, because it would have taken 10 days -
ROMANS: Yes.
POWELL: -- to get it documented and all that.
ROMANS: Let me ask you about jobs. One thing that a lot of people this morning keep asking me is, well, what does this mean about jobs in the near term? I mean, we need jobs. Does this help grow jobs? This isn't really a jobs initiative, is it? This is a debt initiative and longer term, too much debt kills job. But in the near term, cutting government spending, that hurts, too.
POWELL: You know, and I think you put your finger on it. This is the most important economic issue of our era. We have a non-optional fiscal consolidation that we have to do. At the same time, the economy is growing way below trend and we don't want to execute the spending cuts, which will be painful and which will not immediately result in job growth, but the opposite. We don't want to do that in a way that depresses growth for a long period of time.
So this plan appropriately pushes out much - many of the cuts to later years, but we've got to do those two things at once and it's not going to be easy.
ROMANS: It's not. I think that's the key. It's not going to be easy. We feel like we've been through so much turmoil to get where we are, but it's just the beginning, really.
Jay Powell, thanks so much. Nice to see you this morning.
POWELL: Thank you.
ROMANS: All right. Senate Majority Whip Dick Durbin, the Democrat from Illinois standing by to talk with my colleague, Carol Costello, in just a moment.
Then, Senator John McCain talks with Ali Velshi. That's at 7:40 Eastern Time.
VELSHI: All right. It's 30 minutes after the hour, time for this morning's top stories.
Right now, Congressional leaders are trying to settle the debt agreement announced by President Obama last night. Both the House and the Senate are expected to vote on the deal and while it's expected to pass, it is not a done deal until it does.
The FBI is offering a $25,000 reward to anyone with information about a missing New Hampshire girl. Search teams took to the air and water over the weekend looking for 11-year-old Celina Cass. Her parents say she was gone when they went to her room to wake her up last Tuesday morning. More gunfire reported this morning in Hama, Syria following a bloody weekend. You can see some of the video here. Government tanks barreled through the city yesterday killing at least 71 people and injuring more than 100 others. President Obama is describing the attacks as horrifying.
COSTELLO: The president and Congress have an agreement in place to raise the nation's debt limit and head off default. A vote is expected later today in both the House and Senate, but with no tax increases in the deal, can Democrats get on board?
Our next guest knows about than most, he's the majority whip and the man who counts the vote in the Senate, Democrat Dick Durbin of Illinois joining us live from Capitol Hill this morning. Good morning, Senator.
SEN. DICK DURBIN (D), ILLINOIS: Good morning.
COSTELLO: So, besides the country not slipping into default what did Democrats get out of this deal?
DURBIN: Well, I think we not only avoided what could have been an economic disaster in the midst of this recovery and really raised interest rates and killed more jobs, but we also avoided the scenario suggested by House Speaker Boehner that we do this all over again in four or five months.
So we have a long-term agreement and that is a positive thing. Within it are budget cuts, spending cuts, that will reduce the deficit around $2 trillion over the next several years in terms of the actions we take, and we make a point of protecting those programs that are serving the poor and those who are struggling in our economy.
COSTELLO: Senator, what about shared sacrifices? Nobody's talking about tax hikes in this deal. Like the first round of cuts will occur right now. The second round of cuts will come when this congressional committee, this Super Congress is set up.
There will be an equal number of Democrats and Republicans on board. And do you think any voter really thinks that those, that group of lawmakers will be able to come to a consensus on anything involving tax hikes?
DURBIN: I certainly hope that we can come to a consensus through this joint committee much the same as we did with the Bowles-Simpson commission and with the gang of six that basically says put everything on the table. Understand that even if we follow this proposal --
COSTELLO: But Senator, those things went nowhere.
DURBIN: Well they went nowhere, that's true. But we're going to have to decide as a nation whether we're going somewhere, whether there is a bipartisan commitment to reducing this debt. The $2 trillion is good, but $4 trillion was really our goal and it still should be our goal. That means putting everything on the table. I hope this joint committee will move us in that direction, some of the threats the so- called trigger may move them to that conclusion.
COSTELLO: Well, let's talk about those triggers because there are triggers in place if this congressional committee can't come to some sort of compromise. The way to punish the Republicans is cuts in defense, the way to punish Democrats cuts in Medicare.
But again, nothing about taxes. Wouldn't it be better to include in those punishments for Republicans, for example, tax hikes?
DURBIN: Let me just clarify one thing that your earlier visitor said and that you said. The alternative is not defense cuts and Medicare. The alternative is defense cuts and cuts in nondefense spending including Medicare, but we say on Medicare, any cuts would have to be limited to the providers, not to the beneficiaries.
Still something we want to avoid. I think you're right. I think the bottom line, we need to bring new revenue into this conversation and we need to put the entitlements on the table untouched in five or six years. Medicare is going to run out of money. We can't let that happen.
COSTELLO: The other question I think voters have we're looking at this Super Congress and these punishments of this group of congressmen can't come to any agreement, many voters would look at that and say what? They need punishments? Can't come to an agreement on their own? That sort of says to us, that this Congress can't govern.
DURBIN: Well, I can tell you that we're lucky to have come up with this agreement within 48 hours of this deadline. I hope we can pass it in the House and Senate in the next day or two and avert the first default on our national debt in our history.
But it's an indication when a divided Congress is truly divided and not willing to compromise, the extremes that can be reached. I hope we can have an emerging national consensus.
The debt is a problem, but getting America back to work is the first challenge. I'm not sure that this approach of cutting spending as you mentioned earlier with your last guest, is the best way to put people back to work.
But we have to deal with it because of the economic realities in the House of Representatives.
COSTELLO: OK, so make voters feel better about Congress because approval ratings for Congress is what? I mean, I've heard one study say it's like 6 percent. Say something to voters that proves that lawmakers can, indeed, govern and get us out of this economic mess we're in?
DURBIN: Well, I would just say the 6 percent probably reflects our close friends, relatives and family, but I would go beyond that and say at least we averted this disaster and we did it with a bipartisan compromise.
The president showed real leadership on this working with Democrats and Republicans to bring us to this point. We've got to do more. The American people expect more of us, that we work together to get the economy back on its feet and deal with the deficit in a timely, but a meaningful way.
COSTELLO: And just a last question because there are a lot of editorials out this morning including one in "The New York Times" that says Democrats are continually caving to a tiny portion of the Republican Party and that would be the Tea Party. And the Democrats just don't show much spine. They just capitulate and why is that?
DURBIN: Well, because the alternative was to let the economy crater. That's what the Tea Party said they were willing to accept. You have some of these Republican presidential candidates praying for a default. Let me tell you that would have been totally irresponsible.
COSTELLO: But isn't that giving into extortion?
DURBIN: Of course, it is. It's political extortion and if you say that you're prepared to call somebody's bluff using other people's chips, that's what we're down to. A lot of innocent people would have suffered if we would, in fact, have gone into this default. We avoided that and that was something we had to do.
COSTELLO: Senator Durbin, many thanks. I know you have a busy day ahead. We'll let you go.
DURBIN: Thank you.
COSTELLO: All right, still to come this morning, Arizona Senator John McCain's been very vocal about his frustrations with the debt deal. We're going to ask him about his views on what's going on in Washington. He joins us live next.
(COMMERCIAL BREAK)
ROMANS: Two American hikers who have been jailed in Iran on espionage charges for two years now, they could be coming home soon. The verdict and a sentence are expected this week in the case against Shane Bauer and Josh Fattal. Their attorney says he hopes they will be sentenced to time served and sent home as a goodwill gesture at the start of Ramadan.
VELSHI: Police in Mexico arresting the leader of a violent drug cartel who ordered a hit on U.S. consulate worker. Jose Antonio Acosta Hernandez, better known as El Diego confessed to ordering the murders of 1,500 people.
Authorities say he ordered an attack on a pregnant U.S. consulate employee and her husband last year. El Diego is the suspected leader of the La Linea gang, a cartel that smuggles drugs into the United States.
COSTELLO: A second chance for Plaxico Burress, the wide receiver just signed a one year, $3 million contract with the New York Jets. He's hoping to revive his career with his new NFL home after being released from prison. Burress spent 20 months in jail on a gun charge after he shot himself on the leg in a New York night club back in 2008.
VELSHI: A vote on the new debt deal is expected to happen this afternoon. The plan includes raising the country's borrowing limit in exchange for spending cuts.
Now moments ago we heard from Senator Dick Durbin. Now let's head across the aisle, Arizona Senator John McCain joins us live from the Russell Rotunda. I don't know, Senator, did you and Senator Durbin just swap shirts because you're both wearing exactly the same colored shirts?
SEN. JOHN MCCAIN (R), ARIZONA: Usually we do everything just exactly the same throughout our careers.
VELSHI: Senator McCain, we've been watching you carefully over the last several weeks and months in this debate. I just want to play for you an exchange you're very familiar with, an exchange you had with Senator Durbin over the weekend.
(BEGIN VIDEO CLIP)
MCCAIN: The senator from Illinois believed that we are close to an agreement here.
DURBIN: I hope so.
MCCAIN: And does senator from Illinois agree that most likely that agreement will not have an increase in taxes associated with it, at least in the short term?
DURBIN: I hope not.
MCCAIN: You hope so.
DURBIN: I hope there's revenue included in any agreement.
(END VIDEO CLIP)
VELSHI: All right, first of all, that exchange is characterized and unique by virtue of the fact you were speaking to each other like gentlemen. But I know you're both veterans of this - of this whole thing.
I couldn't tell over the course of the last few days who were you frustrated with? Because it sounds like you were more frustrated by the very fiscal conservative side of the Republican Party and the Tea Party.
And you actually called them a few names earlier. I want to get a sense of who you think was intransigent in this discussion?
MCCAIN: Well, I think both sides were intransigent, but I was also of the firm belief that proposal a couple weeks ago that Senator McConnell brought out as you know, the quote, "last option," you look at this agreement that's pretty much along those lines.
Look, I think that one of the things that's been kind of overblown is that I read from a "Wall Street Journal" editorial, "Wall Street Journal" is not exactly the most left leaning editorial in America.
And it said, referred to hobbits in that they're not real characters, meaning that it's not real to think you're going to pass a balanced budget amendment through the Senate of the United States and get 20 democrat votes and you're not.
I have supported a balanced budget and voted for it 13 times and I'm an advocate of it. But to demand something that is not possible, as part of this deal, frankly, was in other words a balanced budget amendment passed, not voted on.
I'm glad we're going to vote on the balanced budget amendment. I hope we vote on it every day until it is passed. It's the only way we have to conclude this effort to get our spending under control.
VELSHI: But you are fully aware that it's -- there's no chance of that happening under a Democratic-controlled Senate with a Democratic president?
MCCAIN: No and we own one third of the government as you know. That's why I think that this agreement we've reached is very -- pretty much a success, but it's also compromise.
But the fact we're not going to hike taxes, the fact that cuts in spending are going to be larger than the increase in the spending that we will not be -- we will have a committee that I think will be credible.
But I have it to tell you, I'm worried about the size of defense cuts that may be contemplated, but that doesn't mean I'm, therefore, rejecting the agreement.
VELSHI: Some of your Republican colleagues, though, who do have certain problems as you have with defense, but certain problems with other areas who don't think things have gone far enough have said they won't support this.
At some point, you are all elected to go there and come up with tough compromises. This was certainly about the toughest compromise that you guys have had to deal with in the last year or so. What do you say to those members?
MCCAIN: Well, I say to them, if they can come up with a viable proposal that will get a majority vote in both Houses and signed by the president, I would be more than happy to examine it.
I'd also tell them to look at what the markets were telling us all last week. It wasn't a matter of how we pay our debts or -- it was a matter of the world's financial markets basically clavering (ph).
But finally what they should worry about more than anything else is the view in which the American people hold us and their low opinion of us because we are failing to do what they think is our job. And, by the way, they're right.
VELSHI: Senator, I know you follow the economy very closely. You know, you saw those GDP numbers on Friday that indicate slow growth in the second quarter and extremely dangerously slow growth in the first three months of this year.
Are you worried all of this talk about pullback and spending, even though this bill doesn't actually do it immediately -- all of this talk about pullback and spending is dangerous and could put us on the path to another recession?
MCCAIN: No, I think we've proven with the so-called stimulus that the Keynesian approach has been an abject failure. I mean, they said that unemployment would be a maximum of eight percent after we passed it. It's clear that keeping -- pumping money into the system, which then increases the debt and deficit is not the way to go.
But it is jobs and so we need to cut the corporate tax rate. We need to -- I'd like to see a two-year more moratorium except for emergency on government regulations. We've got to give investors the confidence they will have a stable environment in which to invest and create jobs.
VELSHI: Senator McCain, good to have you on the show. Thank you for being with us.
MCCAIN: Thanks for having me on.
VELSHI: Give Senator Durbin his shirt back.
ROMANS: I know, they're wearing the same colored shirt and tie today.
VELSHI: Totally wearing the same shirt, I'm telling you. And -- they're not on TV at the same time so you can't tell.
(CROSSTALK)
VELSHI: Senator John McCain of Arizona.
But it's a unique colored shirt wouldn't you say? To see two guys in the same shirt, on the same day.
COSTELLO: I like what he says, unique shirts, because Ali wears a unique shirt nearly every day.
VELSHI: But you don't wear the same shirt I'm wearing, that's the thing. Anyway, good discussions with them.
ROMANS: Our question of the day pegged off the debt ceiling agreement. We want to know, who won last night? Wall Street, Main Street, someone else?
COSTELLO: Oh, yes. We want you to send us an e-mail, send us a tweet, tell us on Facebook. We'll read your comments throughout the morning.
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COSTELLO: There's a lot going on this morning. Here's what you need to know to start your day.
Today both the House and the Senate expected to vote on the breakthrough debt ceiling deal. It includes about $1 trillion in spending cuts over 10 years. Today's expected votes come just one day before the government no longer has enough money to pay all of its bills.
More gunfire being reported this morning in Hama, Syria, following a violent weekend. Government tanks barreling through the city yesterday, killing at least 71 people and injuring more than 100 others.
The espionage trial for two jailed U.S. hikers in Iran has ended. A verdict and sentence are expected at any time this week for Shane Bauer and Josh Fattal.
Local, state and federal investigators are stepping up the search for 11-year-old Celina Cass. The New Hampshire girl has been missing since last Tuesday morning when her parents said they went to her room to wake her up and she was gone.
Missouri has introduced a new law that says teacher and students cannot be friends on Facebook. The law prohibits private communication between teachers and students on any social network site. It is meant to protect children from sexual misconduct by teachers.
And tennis star Serena Williams, she's making a comeback. She won the title at the Bank of the West Classic final in Stanford on Sunday. The 13-time major champ suffered a number of health scares this year but looking good now.
You're now caught up on the day's headlines. AMERICAN MORNING back in 60 seconds.
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ROMANS: Breaking this morning, the U.S. Department of Health will require health insurance plans to provide birth control for free. That means women won't have to pay any co-pays at all for birth control. This is what the government is mandating today.
VELSHI: Yes, it's part of the decision by the government that requires insurers to cover preventive health services even more generally.
CNN's senior medical correspondent Elizabeth Cohen joins us now.
Elizabeth, anytime contraceptives come up, they are controversial. How's this going over so far?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Generally, people have reacted positively to this, Ali. People have said, gee, it's about time. You know, the government, there ought to be no co-pays for contraception.
However, there have been some people who are not so happy about it. For example, Catholic groups, like the U.S. Conference of Bishops, they have not been happy about this. They say the government shouldn't be paying for women's birth control pills. And also far right groups have also said that they're not happy about it.
COSTELLO: So, why was the decision made?
COHEN: You know, the decision was made because about 40 percent of all pregnancies in this country are unintended, Carol. And when they're not intended they tend to get -- the moms tend to get less prenatal care, the babies tend to not do as well when they're born. And so that's why lot of doctors and others got together and said, hey, obviously we want births in this country to be wanted. When the babies are not wanted they don't do as well and the mothers don't do as well.
Now, there's also a financial part of it that they say is not part of this decision, but it is something that's, you know, sort of an interesting point, which is that half of all pregnancies in this country that are paid for by the government -- for example, by Medicaid, are not intended. Half of all pregnancies. And, as you can imagine, it's a lot cheaper to give someone birth control pills than to pay for a birth and to raise that child.
VELSHI: Now we're saying it's part of a larger effort to pay for preventive care. What sorts of other things will be covered?
COHEN: Right. There are several other things will be covered. For example, screening for diabetes would be covered for free. Screening for sexually transmitted diseases would be free. And I know a lot of moms are going to smile when I say this -- also rental of equipment for breast pumps would also be covered under this.
COSTELLO: Wow, really?
COHEN: Yes. That's a lot. As someone who rented them four times, it's quite a bit.
ROMANS: All right. Elizabeth Cohen. Thank you so much, Elizabeth.
COHEN: Thanks.
VELSHI: All right. Our top story today, you know what it is. The House and the Senate are expected to vote on a debt ceiling agreement by President Obama and Congressional leaders today.
COSTELLO: And we want to know, debt deal, who won last night? Wall Street, Main Street or someone else? It's our question of the day and here's what you're saying.
It's from Timothy from our Facebook page. He says, "The rich won. They don't have to pick up any of the tab. What the Republicans have forgotten is that tax breaks and loopholes are a form of spending and they should have cut some of that spending, as well." VELSHI: That's very astute. They are the same idea. It's money that comes to the government.
COSTELLO: He needs to go to Washington now.
VELSHI: They do it differently.
And on Twitter, theoptimistinme says, "Main Street wins. The pessimist in me says Wall Street wins. The realist in me says nobody wins."
ROMANS: James Lafferty (ph) from Facebook says, "Wall Street and Republicans. However, it shows that Democrats are the real supporters of the American people. They could have continued this fight to get tax increases but instead they understood that this deal had to get done. Hence, they caved and said let's just get this done."
VELSHI: That's interesting. So this person is writing that they caved but isn't mad at them saying they caved to get the deal. That's interesting. That's interesting. Carol --
COSTELLO: I don't know. I'm mulling that over. I was thinking of what Senator Durbin told us. He said, yes, Democrats caved but that was to save the country from slipping into default. Someone had to cave, right?
VELSHI: It is complicated.
COSTELLO: Yes. Keep the conversation going. We're very interested in your comments this morning. Send us an e-mail, a tweet, tell us on Facebook and we'll read some more of your thoughts a bit later.
ROMANS: Our top stories are coming up next at the top of the hour. You're watching AMERICAN MORNING.
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