taxes, but taxes aren't even in the boehner plan, and they aren't in the reid plan. it's all spending cuts. and there's serious talk about a short-term deal eric cantor would force the president to debate entitlements, taxes and spending all over again in six months. what exactly has president obama won in return? plus, watching the obama/boehner face-off last night, it was hard to believe what we were watching. the republicans are on the brink of winning the battle, in which the very rich will be asked to contribute nada. nothing. and everyone else will be asked to contribute everything. how did we get here? also, silence of the lambs. where are the republican candidates for president? on this most critical washington negotiation in years. michele bachmann, of course, mindlessly doesn't want the debt ceiling increased under any circumstances. other than that, where is everybody? and we learn today no group has been hit harder by the recession that continues than latinos or also may be the most important voting bloc for president obama come next november. can you hold them if things get worse? finally, finish tonight with a way out of the debt showdown. we start with the debt fight itself. jay carney, white house press secretary, joins us right now. thank you for joining us. it seems to me if you watched the fighting today, the state of play is the republicans under boehner want a two-round fight, they want a second round during the presidential election next year, and another fight over the debt ceiling next time. president wants to have it all out now. is that the difference? >> i think it's the difference, although i view it a little differently. the reason why we believe and the president believes so strongly that we have to extend the debt ceiling, increase our borrowing authority for a significant amount of time is because it creates this cloud over the economy. it creates uncertainty, and as any businessman will tell you, or businesswoman, uncertainty is a a drag on the economy. it forces businesses to make decisions that inhibit growth, inhibit job creation and we can't have that, and if you think this situation that we've seen in these last several weeks have been chaotic and cast doubt on whether or not the united states will for the first time in history fail to live up to its obligations, imagine what it will be like in six or eight or ten months if we go through this again. the president thinks that's bad for the economy. it's not about politics. it's bad for the economy. the american people overwhelmingly support his approach, a balanced approach. democrats, independents, even republicans by large majority supports the approach he has put forward. >> so if it comes down to it, sometime sunday morning at 4:00 in the morning, and he's handed a bill that says, we have to go after this again with some kind of mechanism next year, six months from now, he will veto it? >> we've made clear, the president's made clear, the chief of staff daley made clear, we issued a statement of administrative policy today, that senior advisers recommend that the president should veto a specific bill the speaker's put forward, should it get to his desk, but that's a moot point. that bill will not get through the senate. we believe senator reid, the majority leader said it will not pat pass the senate. so it's really irrelevant. the fact is, we are in a stalemate. that's why the president spoke to the american people last night to explain where we are and why we need to break that stalemate. we need to break the logjam, and willingness on both sides to reach compromise. accept you're not going to get your maximalist and do it for the american people. >> right now it looks you've lost on the issue of revenue. not even the democrats in the senate are pushing for a revenue hike. >> i disagree with that. >> you're still fighting that fight? >> look, the big grand bargain is still on the table. that deal is there if the speaker wants to return to the table and negotiate it. we came very close. the president and the speaker did. and that opportunity still exists. secondly, the helpful proposal senator reid put out does not include up front the tough issues of entitlement reform or tax reform, it creates a committee that would look at those issues on a fast-track basis by the end of the year. that's not possible, we prefer one that does it all at once. however this turns out if we don't get the tough issues addressed because they're essential to address the deficits and long-term debt we're going to return to the debate. because the public supports a balanced approach. it's not the right way to do this if we don't ask sacrifice from everybody. not just one sector or a limited number of sectors from the society. >> let's listen to what the president said last night, to voice support for a bipartisan deal. let's listen. >> the american people may have voted for divided government, but they didn't vote for a dysfunctional government. so i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. >> is boehner being pulled down by his right wing? is that the white house view? >> well, look. we certainly believe while we're not, probably, the best experts on house republican politics, it's evident that there is a faction with the house republican conference that is a, basically no compromise faction. we don't think that's where the american people are. we believe that the president and the speaker came a long way towards reaching the kind of bipartisan compromise that could achieve significant deficit reduction in a balanced way and we believe that that opportunity still exists, if there's a willingness to accept that we are associated with it, but not every republican will vote for it, just like not every democrat will vote for it. you know how this works, the kind of compromises the president is willing to achieve something here and that will exact political pain. he's willing to do it because he feels that's what the american people are insisting that washington does. when you go outside of this town and talk to people, half the time they're asking, what's wrong with people in washington? why are they always yapping and not getting stuff down? this is a perfect example of the dysfunction in washington. it tends to dominate, and in this case, the stakes are too high to let it pertain. >> the white house position is, to clear this up, jay, if we don't have a deal in time for the president to write into law and to release the funds with a debt ceiling increase by august 2nd, if we don't have that on time it's your position at the white house that that fault lies with the republican party? that the blame game is simple, you're setting it up this way. i heard the president speak last night. many believe what he said last night was, i may not be able to meet the deadline and if i don't i want you to know whose fault it was. i was for a grand deal. they were basically for scorched earth. is that the clear message? it's their fault? >> no. i want to be clear. >> whose fault is it, then? >> i want to be clear. the president believes, i've said numerous times again today, we believe we'll get a deal. we do not believe the united states will default on its obligations for the first time in history, forsake the gold standard, aaa rating this country has held for so long that's made it the safest investment around the world. because, in the end, saner heads will prevail in washington and we will get this done. >> that surety you just have given me, since you're sure when is he sure it will happen or doesn't he know when it will happen? because you can't have it both ways. you can't be sure there will be a deal in time to deal with this, but not be able tell me when this time comes? this friday? this sunday morning? monday morning? when the time limit? >> look, the time limit is, the last moment when congress can act, before we no longer have the -- borrowing authority. >> when's that, jay? >> you know, the deadline set by the treasury department, by the career analysts there, in terms of when we lose our borrowing authority is august 2nd. >> when do you have to act -- >> we believe that congress will act and do the right thing. >> in other words, a bill that comes to the president's desk by the morning of august 2nd is in time? >> as i understand it that would be the case. i don't know if it's august 1st or august 2nd depending on the hour of the day, when this eventuality might come to pass. we don't think it will get to that. we this that -- again, we -- make no mistake. conversations continue. obviously, between leaders of both parties on capitol hill. between those leaders and members of the administration. we are seeking a way out of this impasse, this balanced and can be supported by democrats and republicans, and that can be signed by this president. we think that can happen. it's not pretty. as you know, this process in washington is as ugly as making sausage can be sometimes, but in the end, there is no alternative to doing the right thing. which is why we think, in the end, the right thing will be done. >> appreciate it, jay, my friend. i've known you a long time, as journalists, both sides of the world we live in. i have to tell you, i've never seen anything like this. never seen one party so clearly willing to take this country into serious trouble because of an inability to keep its right wing and its ranks in line and i do worry. you say the bell rings the morning, the day of august 2nd. i don't think they're willing to go sooner than that because they want to push this to the very end. they don't want to help this country make it. i don't think they're on the same team as you guys. i mean big picturewise. >> i think in the end, we all root for america. we disagree significantly on a lot of policy issues but in the end all root for america. we all root for america. america's economy. and that sentiment i think will prevail. i really believe that. you're right, chris, you've been here -- >> i read in the paper, they don't talk like that. they don't talk like that. that guy up in scranton, that new tea party guy kelly sounds like he's in loony land. he says they got a bill passed. that's all they got to do. they have cut, cap and balance is good enough. they all go home. they're living on their own planet. >> i believe the very good people of scranton, pennsylvania, will be telling him and others about the right thing to do. >> thank you. jay carney. you're keeping hope alive. thank you, jay, for coming on "hardball." >> thank you. i only have a few minutes. i used up all that good time, jay. let me ask you this -- is this true? are we all on the same team or is there a real banded operation going on in the right in the republican house? >> i don't know who is on whose team, but i'll say there's deep division inside the republican party. a bloc led by presentative jordan and other conservatives who campaigned and won elections in 2010 on this who don't want to increase the debt limit unless they know absolutely they're getting precisely what they want on capping federal spending. others, john boehner, mitch mcconnell. some of the presidential candidates, some of the chairmen, who feel strongly the last thing you can do is default. they want some sort of deal. that's why speaker boehner's been negotiating with the president on this. there is a deep divide, in essence, republicans should be happy they're winning the debate. the end deal will be all about cutting spending. the precise issue they ran on in 2010. unfortunately, they're not satisfied with the victory they have to date. >> these guys on the right are still insisting on a balanced budget amendment to the constitution. they want to begin the changing of our constitution, and by the way, they say they love the founding fathers, but they want to correct them here. they want to do something new they never thought of apparently in the 18th century. they want to correct those guys back then, and they want to do it under this emergency situation. so obviously, holding out for drastic structural change in this country. >> they are. i want a hell of a lot of things in life too. some things you can't get. they don't have the votes in the senate, period. they won't get the amendment they desire. the question is, can you find a middle ground? can speaker boehner find a place where they get big enough cuts to satisfy conservatives? that's a big question right now, even this plan that john boehner has on the table. you have conservatives saying they're not going to vote for it. there are not enough republican votes to pass it. you have outside conservative groups saying they're going to punish members who do end up voting for it, which scares a lot of republicans, who could be subject to different primary races. still, again, a deep division. the question is, can they pull it together? i think they do. i don't think either -- not a single leader in the republican or democratic party or in the white house that wants to default. they will get a deal. might be a short-term deal, but eventually they'll get a deal. >> but -- boehner -- boehner is reading -- reading speeches written by the far right. the other night, last night on the international television, in fact, he came out and said they had had a bipartisan passage of a bill to cut, cap and balance. it wasn't partisan. it was a partisan bill with five democrats aboard. he's using -- >> he's not the first politician to claim bipartisan support because they get a couple -- >> that's malarkey. why are they talking like that? >> everybody's posturing. everyone want to seem like they're the the adults at the table. the line the white house likes to use. these republicans have authentic concern, looking for details from the white house on what the plan might actually be. seemed like a big fight inside the press room today between jay karney, who you just had on, and reporters who just wanted details. he seemed offended they wanted to do their job and get details on what the white house actually wanted. >> well, i got some news out of him. he said august 2nd is august 2nd. no more do it by july 22nd to get the ball rolling. no more last friday. now it's next tuesday and they're saying this can go down to the wire. sounds like nothing's getting done until tuesday morning now. once the deadline is clear. >> right. seems to be inconceivable anything is done before the weekend or monday because it doesn't look like the boehner plan on the table can make it through the senate. so once it's defeated in the senate, even if it's on a fast-track legislative process, which it will be, there will have to be a compromise. that can't happen until thursday or friday. once you get into the voting process, looking at the weekend. it's going to be monday. the clock will be ticking. there is going to be a potential of default. i think think at the end of the day, the very least a short-term extension to work out a deal. they're not that far apart. it's all about cutting spending now. >> thank you, jim. by the way, the people in boehner's office. boehner's spokesman tweeted contrary to what karney told us, the grand bargain is not on their table, at least not on their table. coming up, the republicans are on the verge of winning a major ideological fight. how did that happen? you're watching hobby, only on msnbc. i can't let allergies stop me from leading the way. so, i get claritin clear. non-drowsy claritin relieves my worst symptoms. and only claritin is proven to keep you as alert and focused as someone without allergies. no other brand can say that not even allegra. live claritin clear. how's this for screwball -- republican congressman steve king of iowa is suggesting obama would be impeached if the crisis people like him created pushes the country into default. congressman king tweeted the president would be impeached if he blocked debt payments after default caused by the republicans. it's like the kid who kills his parents, asking for sympathy as an orphan. anyway he supports the cut cap and trade which was voted down last week. will roam the earth. that's seven devices per person. this will change how we work in ways we've never before imagined. what do you need to secure your people, their devices, and your business? a network that can evolve and grow to protect your human network. welcome back to "hardball." two things to consider seriously as this debt ceiling debate plays out. one, catch this. the very wealthy are paying a much smaller share of income and taxes right now than they did a decade ago, and, two, the same wealthy american are not being asked to contribute anything to this deal. anything. the entire debate centers as you've heard on this program how much the middle class and poor will have to kick in. how did we get to this point? joining me, co-host of "squawk box," the great writer andrew ross sorkin, who wrote "too big to fail," and ezra klein, whose column was brilliant today. take a look. do you want to lead me through this, andrew, about the breakout? "morning joe's" analyst steve ratner, helped put together the following charts which show just how much less as a percentage of income the richest americans are paying now as compared to, say, 15 years ago. according to the irs, the 400 wealthiest americans were paying taxes at a rate of about 18% under president bush in 2008. back in 1993 under clinton, those individuals were paying rates at about 29.4%. that's a drop of ten percent points in 15 years. well what do we make of this now, how they're better off? look at that, seems to me 18% is now about what poor people pay at a much lower percent than middle class people. andrew? >> here's what's happened? the rate has clearly gone down. in large part, it's actually a function of investment accounts. think of the top 400 individuals in the country and where they're making their money, a lot of it is investment. they're paying capital gains on that. not paying the higher 35%, obama would like closer to 40% or in the 39% range. that's why you see the numbers where they are. the proposal on the table today has almost no cuts and the proposals that were on the table over the weekend had very few real revenue enhancements, except to go after some of the private equity hedge fund gips paying that 15%. some of the oil folks who were also paying in that range. the real issue, how do you get a sense of fairness? i was struck last night by the president's remarks when he actually invoked president reagan and his comments to say if we're going to cut on all of these other people, we have to have some shared sacrifice. i thought that resonated at least with me. >> it's amazing. your average, 400 top americans in the wealthy category, make an average income of $270 million a year. wealth well beyond that, and a wealthy person once said to me, i want to get -- i don't like any more earned income want to make money in capital gains. that's how i make money. your thoughts about this, a total inequity that we start this with. and another graph that shows how much the wealthiest are paying in comparison with other american. there you see that. a moment ago, the very wealthy pay about 18%, about what the people, really not at all are paying. 9 middle class, many people make 75k a year paying a higher percentage. the old joke of the high-paid secretary, paying a higher rate, ezra, than the ceo is true. >> two things going on here. connected, not the same. this fairness, how much the rich pay in normal times and actually the deficit issue, which is part but a lot of what's happened in the last couple of years. when it comes to what the rich are paying, reagan had big structur