jeanne, first question, is it time to simply say, let's go for the possible in washington? everybody has grand ideas about what they want to do. nobody, nobody can get the support to get one of those through. do we have to look for just the possible? >> i think the mission of everyone in congress is to absolutely raise the debt ceiling. they cannot get away without doing that. the s&p has been the strongest credit rating agency. they said, we're going to downgrade you if you don't come up with a plan. but they say f you raise the ceiling but give us indication that you're on the road to getting agreement on the deal, we'll keep you on credit watch negative but we'll affirm your aaa rating if you get it done within a couple of months, if we see that possibility. that seems to me to be the fallback plan for congress. whether they take senator mcconnell's plan, neither the republicans or the democrats seem to like it. it would allow the president to raise the debt ceiling a number of times but politically it would make him look bad. number one mission, raise the debt ceiling. >> ken, i want to ask you a question. considering how hard this has been, how contentious it's been, how uncertain it's been, has the damage already been done to some extent in terms of the world's view of our solvency? >> not yet. they think we'll solve it. and i agree that number one, we just have to raise the debt ceiling. but are we going to do this every year? are we going to find a system so that we're not? this is a constitutional crisis. i don't know how we're going to run the country if we wait until midnight on the last possible day. might as well go on vacation the rest of the year. >> how would we get any politics done? it's dominated everything else. what conversation have we heard about anything else important while we've been locked in this? >> we haven't heard about job creation. we haven't heard about anything else basically as this has sucked all the oxygen out of the air and obviously they need to raise the debt ceiling. but the politicals are so complicated, there are so many competing interests. the president wants to get it done for the reelection year and the debt ceiling raised, have some significant deficit reduction in place. democrats want taxes raised, who want shared sacrifice. republicans will not accept any tax increases. so you have these politics coming together to create this constitutional crisis and we don't know what the end game is. it's a new conventional wisdom every day basically. >> one of the things that continues to be overlooked in all of this was raised by federal reserve chairman ben bernanke who warned if we don't have a debt deal in time we could see businesses even less willing to hire. let's listen to what he had to say. >> of course, if the government is reducing its payments by 40%, that's going to have an impact as well. so i can only conclude that this would be very bad for jobs. >> ken, let me ask something about that because this week, i was reading a number of warnings that were saying to the public in general, don't make a mistake here, even if we do one of these plans, it very likely is bad for jobs. we're simply talking about a difficult time in our economy. that's whooe why we're having the whole discussion. this is a big band-aid on a much more serious problem. >> this isn't about jobs today. this is about where we're going to be in 10 or 15 years, are we going to run off a cliff? are we going to sort of have a gradual adjustment or wait till the last second and have markets force us? they're not forcing us to do this. our interest rates are low. that's not the problem. but we see it coming eventually. so this is not going to help, although it will encourage wall street. it will encourage credit a bit because it will provide a bit of calm finally in the markets over this. >> do you think that any of that -- any of the plans you see right now, when you look at them, do you say any of this will create jobs? the warning i'm hearing about so many of them is in the short-term, this is possibly going to slow things down even more? >> yeah, i'd say they're not creating jobs now. but they're taking some very hard problems and, by gosh f they actually do some of the tax reform, it's going to make a big difference over the longer term. it really is going to be a help for the economy. >> jeanne, if they really do some of the tax reform, there are so many "ifs" in washington. washington keeps saying, we don't want to do things with a gun to our head. and yet the problem is washington doesn't seem to do anything without a gun to their head. >> right. >> do you see -- what's the silver lining here, if at all? this sounds more like we just have to protect ourselves, that's it. that's the best we can get. >> i've been covering the debt ceiling since january, going on eight months now. timothy geithner sent out a letter on january 6th to congress that said, dear congress, it would be an awesome idea if you raised the debt ceiling sooner rather than later because we don't want to get caught. i don't see a silver lining yet. i think if they allow themselves time to have a real conversation about a debt reduction plan -- right now we're still having a food fight -- the gang of six plan came out this week. it wasn't legislation. i started getting e-mails from progressive groups and conservative groups saying, oh, it's terrible. really? how do you know? we don't really have the details. we're still having a food fight about it. we need to have a discussion. we are discussing this as a -- >> i've been referring to this as an adjustable rate negotiation over the debt ceiling because nobody seems to know what the bottom line is. we do know this -- we know voters are concerned about jobs, voters are concerned about real nuts-and-bolts issues. do you think that both the democrats and republicans as they fight for the edge on this thing are really shooting themselves in the foot politically because there is no political game to be had here? the whole system looks worse and worse and worse. >> i think there is some political gain. people are tired of all of the enormous debts being run up by washington. they do take seriously the idea that long-term deficit reduction could help our economy in the long term and create jobs if you have long-term low interest rates, you have corporations perhaps as part of tax reform getting lower rates, which could help them create jobs. i think there is a political benefit to being serious about deficit reduction. obviously if you cut spending dramatically, quickly, you're going to take some jobs out of the system. you're not adding more stimulus. there could be a short-term hit. but i think in terms of politics, it's a benefit to the politician who can say, i'm serious about getting our deficit under control. >> we're going to get back on to that and on to a poll about what voters want to see in terms of a compromise on this. jeanne, ken, ben, stay where you are. playing politics with the debt ceiling, the tea party, a popular target for many out there. but has a tactical move by president obama put our nation's credit further at risk? 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defaulting on our debt would likely mean a lowering of america's sterling credit rating. that could potentially mean it would be harder and more expensive for most americans to get a mortgage, a car loan, even a student loan as it ripples through the whole interest system. ken, by not publicly guaranteeing that bond investors will be paid on time, by not making it firm that this will happen, has the obama administration created an environment that's caused rating agencies to question our creditworthyness? >> i think rating agencies are questioning our creditworthiness because we have the debt that's soaring, no plan yet to rein it in. that's the number one reason. they are nervous if we're going to do business this way, once in a while, we might forget to pay the bondholders and it would be catastrophic. >> people in the business community have spoken out about this notion of saying, there's so much uncertainty that, that's why they won't move forward. seems similar to what you're saying. people are saying, the debt, the deficit alone may be a problem. doesn't have to be. the lack of a plan is what scares people. no idea what's coming. >> they certainly have a reason to feel uneasy about the next several weeks. in this case, they have absolute reason to be uncertain. on august 2, tim geithner may have to store away a lot of cash to make sure he can pay the bond investors. so a lot of people in the country went get paid, contractors, federal workers, possibly people in the army. it's not going to be able to figure out for anybody. so that sort of chaotic situation is not going to be good politically for anybody. >> what kind of deal do people out there want? that depends on what political party you identify with. 83% of democrats say, give me a deal with a mix of spending cuts and tax increases, but that type of compromise only works for about a third of republicans. as for the all-important independents, the people that you can't win the white house without these days, 65% want to see a mixed budget plan. so, ben, if the republicans want to get the independents behind them in this next election, can they continue to beat the drum of no taxes, no taxes, no taxes when the independents are saying, we're willing to talk about that? >> i don't think so. i think the republicans, particularly in the house, have moved beyond where the public is. the energy in their party, the tea party movement, is a no-tax movement. that's a minority in their party. that's not independents clearly who are willing to accept new revenue, a mixture of spending cuts and new revenues. i think the republican party is almost captive to its extreme wing at this point. a lot of the energy comes from there and they don't want to betray what won them the house this last time around. i think they're in danger of playing to that part of the party and losing the middle and losing the independents. that's where obama is racing to right now and it almost helps him that the liberal wing of his party is upset about the cuts to entitlement programs. he wants those independents, he wants to be a centrist, be clinton in 1996. that's what reelected clinton, was the big fight. hef went to the middle and won reelection. >> there's indication that he needs the independents more than he needs the liberals because the liberals can't elect him alone. there aren't enough of them. and in the classical sense, where else are they going to go? >> right. they're not going to abandon him and certainly not going to vote republican. if he wants to win in iowa, in florida, in the midwest, places he absolutely has to win, he needs the independent vote. this is the main moment for him to capture that vote right now is to come up with a deficit reduction plan that has shared sacrifice that takes some tax revenues and that cuts spending. this is his pivotal moment to position himself for a moderate run for reelection. >> ken, i don't see any way -- let the republicans and democrats be mad if they wish -- i don't know if i see any way mathematically to solve this without a combination of these two things. i don't think it can be accomplished. you know the numbers of this sort of thing. >> well, mathematically it might be possible but it wouldn't be very pleasant. taxes, revenues have to go up. i think the gang of six and the position president obama's embraced and moved toward recently, get rid of some of the deductions, the loopholes, that's the way to raise tax revenues without hurting incentives. that's really silver lining lies. if they can do that, we will be energized and we will grow and have more tax revenues and it will be okay. but they don't seem to be moving towards that very smoothly. >> let me follow up on that. the european union is going to provide more aid to help greece out of its debt crisis. we keep looking for models overseas to what we might see. does this put an end to the madness and potential defaults throughout europe and does it put even more pressure on us to produce a deal here or is it just a step along the way? >> it's just a step along the way. they've stuck greece in the closet and they still have to deal with ireland and portugal and italy and spain. they did a lot recently, this meeting on thursday. they did a lot. but they had to do a lot. the markets were going crazy. and i think they bought themselves some time. so it's just their modus operandi. just enough to make it to the next meeting. >> a deal by the end of the week, yes or no? >> no. >> no. >> no. >> this is so bleak. i thought we might have one yes. >> i can't wait to be surprised. >> we'll see. thanks for being here, ben, ken, jeanne. the tea party voice is heard loud and clear in the republican party. but will it end up hurting the gop in 2012? we'll take that up in just a moment. it's actually a connecting rod coming out to the side of the block this is a big piece of the engine block that was blown off. it's not because they ran it out of oil. they didn't change the oil. as your engine produces different particulants, you want to pick that up and take it down to the oil pan to the oil filter. so the moral of the story is, if you don't want to see your engine in a commercial with me and jim, make sure you get the works done. the works. oil change, tire rotation, $29.95 or less after rebate. only at your ford dealer. this good. this not [ male announcer ] time to check your air conditioning? come to meineke now and get a free ac system check and a free cooler with paid ac service. meineke. we have the coolest customers. as hard as it may be to believe sometimes, history teaches us that democrats and republicans actually can work together. but what about the tea party? democrats can't seem to stand them, of course. but the more moderate republicans are also tiring of the tea party's influence in these budget battles in particular. particularly this uncompromising view on raising taxes held by those by presidential candidate michele bachmann. >> i know president obama does because they embrace the idea of increasing taxes. there is absolutely no appetite anywhere across the united states for increasing taxes. >> will cain is a cnn contributor and conservative political analyst. will, the republicans love the tea party. first of all, michele bachmann's incorrect there. there is an appetite among some people for raising taxes, just not the people that support her. but republicans like the energy of the tea party. they like the fact that the tea party got people engaged and involved saying, come to washington, let's make things happen. do they like it still? >> some of them. tom, a minute ago you said republicans and democrats have a history of working together. and you're right. but that compromise led to medicare prescription part "d," it led to record increases in the department of education, interior, agriculture, virtually every department over the last 12 years, thus it led to the tea party. now, the tea party has a win on their side. they've redefined the conversation. obama is talking about major spending cuts. now it seems like they have an inability to take a win. 3 to 1 spending cuts is a win. why can't you just take yes as an answer? >> it comes down to a question of compromise. a lot of people in the tea party said, i'm not interested in compromise. we were sent here to do something. we're going to do what we were sent to do. >> and that is a noble, noble principle. guys who are not worried about getting reelected, who are principled individuals, but at the same time, this is a government where you can't just have my way or the highway. take a win. it's a 75% win. >> mark skoda is founder and chairman of the cnn tea party. according to a poll, 55% have an unfavorable view of the party right now. do members of the tea party concern themselves one way or the other with how the country sees the republican party? >> no, i think we're focused on the fiscal issues. i have to tell you, one of the things -- i've talked to a lot of folks lately. the issue isn't about compromise. the issue is about verifiable results. even the deal that will spoke about, i looked at the proposal, there's no legislation, as you know. but it basically takes credit for reducing, as we like to hear, the normal cost curve over time. and the problem, i think, and the reason the tea party's being perceived as intransigent in this matter is it's expecting real results. and the only thing we've seen is legislation proposed and passed is cut, cap and balance. so i think honestly there's not a conflict here. it's just holding people accountable. >> first, let's bring in john avalon, a cnn contributor and a senior political columnist for "newsweek" and "the daily beast." a pew research poll found two-thirds of tea party members say it won't be a problem if we go past august 2nd without a death debt ceiling deal. almost any economist and certainly the credit rating agencies strongly disagree with that. how do republicans strike a deal and still maintain support among the tea party base? >> that's becoming a real problem because with a rise of what i call debt ceiling deniers is a dominant strain among conservative pop lists. the tea party have been focused on reducing the deficit and the debt, rightly identifying it as generational theft. but it becomes a question of priorities. right now the divisions of the republicans are between anti-tax hawks and absolutists. ronald reagan presided over 17 rise increases in the debt ceiling. let's talk a