it represents compromise. others pointed out that it doesn't include revenues in it explicitly, except for tasking a committee to deal with the hard issues of health entitlement reform and tax reform. it has substantial, considerable, deep spending cuts. >> speaker boehner's plan is not a compromise. it was written for the tea party, not the american people. democrats will not vote for it. democrats will not vote for it. democrats will not vote for it. it's dead on arrival in e senate. ifhey get it out of the house. the tea party's in the driver's seat for the house republicans now. and that's a very, very scary thought. >> i think on the issue of the debt ceiling, the clock is ticking, you know, with a much closer range and a much shorter period of time within which to adjust. clearly the critical objective is not to be able to -- for the united states to increase the debt ceiling with a view to avoiding a defect -- a dault, which would be terrible for the unitedtates, which would be terrible for the economy at large. >> rose: with an assessmt ofthe. >> it's going to be august 2nd or 3rd, they'll have to do something. if they don't, there's going to be a crisis. the general perceived wisdom is as of today somehow they will avoid that, but what they will do will be very much on the cosmetic as opposed to dealing with the long-term structural problems. >> given erything we've seen over the last number of elections, we are unlikely to see either party have enough strength coming out of 2012 to be able to do what they say we want to do -- they say they want to do. part of the problem we're running into at this moment is that the republicans have overinterpreted the mandate from 2010. so we will have a big debate in 2012. there's no question about that. and an important debate. but i'm not sure that the voters will resolve it finally so that whoever is in power in 2013 can be able to go in the direction that they say they wt to. >> if you don't get the debt problem resolved, he knows it's going to nip at his heels at ever turn, no longer how long he's president of the united states. that's the underlying problem. even if you get to that point, there's a disagreement, i think, ideologically about what the government's role ought to be in that kind of economic policy. >>e continue this evening the documentary filmmaker and photographer with interesting ideas, not only about filmmaking, but also interviewing. >> i don't think that i discover that isn't there already. i would, again, describe it differently. i would say it's a desire, not to impose some idea of what a person is like on the movie that i'm making, but a process of discovery, of trying to uncover, in some way, something new, something interesting, something vital, something important about the person i'm talking to. >> the debate in washington and the skills of earl morris when we continue. l acacrossmeririca.happeng evev, evertimeme a ststis b burneor t mididnighol hen aethl@e chasd@t@ @dl@@ for r a re herero, iyou u wannrt pporort l bubusine. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: the deadline forraisint tuesday, august 2nd. what are the implications of this? what's happeningin washington? what are the larger issues? joinini'm pleased to have my gus here. just where rey and then i want to turn to bigger issues? al, where are we as we speak? >> nobody knows where we are, why we're here, where we're going. that's only a slig exaggeration. both sides think they have a winning hand. republicans, because obama has to eventuallyko pitch late. mocrats because they think public opinion is on theirside. both are vy, very nervous it's not clear that john boehner can get a majority in the house for his proposal. i expect he will, but it won't be close. it's not known how many votes harry reid will get for his dueling proposal. i don't think six days or seven days before we face a potential cataclysm we know wheree are. >> dan? >> i agree. we're in a period where events have to play out a little bit and people will reassess by the hour or by the day. the first big question is what happens with the boehner plan. i think until you see what that vote actually looks like we don't know where it's going to go after that. somebo said to me today, you know, never get more than one step ahead of the congress in trying to figure things out, because people react to whatever's happed at the mont. because there's no clear compromise in the offing, i think there has to be a series of tests of strengthefore everybody in the leadership can reassess and decide what the grnds for a compromise might be. >> rose: ayou said today, notye. >> , yes i think that's right. and so boehner has to test his. i think reid is certainly going to wait and see what happens with the boehner plan in the house. if the boehner plan fails in the house, then i think thatou've got a real problem on your hands, because i think there's a greater difficulty in using the reid from starting point to get to a finish line, but i don't know that for sure. i don't think anybody on the hill does. >> rose: do people you talk toa- failure is not an alternative, is not an option? is there -- >> well, they all say this, but that presumes that they have a solution to try to avoid the default. i mean, i think if we get to a -- you know, literally a crisis point, you could see it -- one week or two-week or three-week extension so they could try to work something out. but i think everybody is committed to the idea that they don't want to default, but they -- you know, here we are, six days away from it, and they don't have a clear path to get. >> >> rose: what are the --charliee small anecdote about how crazy quilt this whole thing is now. bill detail, the svy white house chief of staff, good ties to the business community, earlier today talked to tom donahue, theead of the chamber of commerce, largest business lobbying group in america. donahue said we'll send a letter up to the hill to say, please increase the debt ceiling. what daley didn't know, found out later, actually when i interviewed him, was that dohue dorsed the boeer plan. he was not terribly pleased where that, but that shows you how crazquilt this all is right now. i think most people believe that we will avoid a default. as dan said, however, they can't tell you how they're going to get there. sooner or later it's going to be august 2nd or august 3rd, and sooner or later th'll have to do something. if the don't, there be a crisis. the general perceived wisdom today somehow they'll avoid that, but what they will do is very much on the cosmetic as opposed to dealing with the long-term structural problem. >> i think that's an important point. i think where we are now is simply trying to avoid a terrible outcome as opposed having an opportunity to do something significant, which looked like it might have been in the offing a few weeks ago. i think that's a significant turn in the way the whole debate has played out. >> rose: the game today issimplg else? >> yes. i mean, if you think about it, here we have an economy with a 9.2% unemployment rate. what we're talking about here now this week is how do you not do some further and perhaps terrible damage to that economy as aopposed to how we do something good for the economy? i mean, when you step back from this, that's the opportunity that's been lost. >> and charlie, we talk=áq about default as almost, well, no one will do that, that's a terrible word, all that. it's beginning to dawn on people, what that means is, if we go there, we decide the chinese bondholders are more important than social security recipients supposed to get checks on august 3rd? i wouldn't want to be a politician making that cice. are the bondholders more important than the sergeant in afghanistan? that's a tough decision to make. those are the kinds of choices that have to be made, the kind of contingency plans that the treasury is mapping out today. it really terribly dangerous. >> let me ask you, before i turn to bigger issues, what are the political consequences for the president, for the speaker of the house, and for those republicans who are taking a hard-line in the house of representatives? >> well, i mean, i think the president believes that because public opinion is more on his side than on the republican de, particularly on the shape of a big plan or who has been less willing to compromise, that they feel that almost any outcome is likely to be beneficial to the president politically. i think that when he went on the tv on monday night, his speech was aimed at the independence that the white house is -- independents that the white house is so focused on to convince them he's the reasonable player in this. i'm not sure that that's necessarily the case when we come out of this that he'll benefit politically. i think everybody could lose some on this. the speaker obvious hasis speakership the line. mean he's having a terrible time holding s own caucus together. his inability to do that underscores the weakness that he is as the leader. he's trying to, you know, on the one hand get a deal, but, on the other hand, not have to get a deal in which he mostly does it with democrats as opposed to republicans. i think for house republicans in general, the danger for thems that the country decides, okay we voted these folks into the house last november, but they are not prepared to govern. they are there to make political statements, but they are not there prepared to compromise. now, a part of the republican base is very strongly in favor of what the band of freshman are doing in holding out. make no mistake about that. but that's not the country at large. i think that theepublican party as a whole is at risk if they continudown a path in which it looks like they're only holding out for only the things they want. >> charlie, let me pick up, because i agree with dan totally. you and i discussed some weeks ago how a grand bargaincould be a win-win for both sides a win for obama in that he would have a significant achievement, would deal with some of the long-term strturalissues. a win for the republicans because they really will have produced a huge deficit reduction and removed the most lethal issue for them, younow, medicare from the table. i think there was a credible case for that. i think if you turn it around, this could be a lose-lose. it's a lose for obama i they don't get a deal and you have a default, or you have a downgrading of our credit ratings. that affects the economy, which goes south. that's not the kind of environment he wants to run into next year. he already has enough problems. it's a lose for republicans in the sense that they do appear like the unyielding, almost extremist on some of these issues. i think most of the public identifies with this idea, there ought to be a balanced package, a shared sacrifice, however you do it, but get it done. this is one of those cases where it could be a lose-lose. >> rose: just to the boehnerpla. eric ctor supports it, michele bachmann doesn't. how solid is this plan in terms of tea party adherence? they have problems with the tea party republicans in the house on it. the heritage foundation put out a statement today they're against both the reid plan and the boehner plan. club for growth is against this boehner plan. so the hard-core conservatives in the republican party, the tea party wing, doesn't particularly like this. the question is, can reid and can cantor and kevin mccarthy corral them to hold the line long enough to get this out of the house and get it into the senate? i don't think -- we're not looking at a situation in which the ehner pla is likely to be the ultimate outcome, but i think that a key to thi is going to be how mitch mcconnell begins to massage whatever ends up in the senate. we've not heard a lot from him. he's bn generally supportive of the speaker, but we know that mitch mcconnell is a crafty legislator, around he will try to figure out if there's some vehicle, how to make it palatable to pass both the senate and hold in the house. but boehner does have problems with his base, charlie, no question about it. >> yeah. charlie, the other problem he has, last night -- or monday night, you know, john boehner on several different occasions referred to the bipartisan support. now, that biparsan support was five or six democrats, i think. but that gives him a cover, to talk about that. i'm not sure he's going to get even those most conservative democrats. heath shiller from north carolina came out against the boehner plan. that shows you that's where the popular will is. if he can end up getting all but a handful of republicans and four or five democrats his hand would be considerably strengthened in that negotiation. if, on the other hand, he squeaks through with 217 or 218 votes and only gets one or two democrats, if any, boy, even that puts him in a somewhat weakened position. >> re: whatever happens, isthisl say that the united states congress began to take a serious look, you know, at the nature of both taxes and spending, especially spending, and we wi say this was a turn that took place because of the debate we're having now? >> we haven't seen that yet. i think there's more -- more about posturing, positioning right now. i think there waa ance for the congress and the white house to do it after the simpson-bowles report came out in december. i think both punted. obama justifiably gets criticized for not rising to the occasion, but neither did paul ryan or house republicans. i think there was another opportunity a couple weeks ago with these deliberations between boehner and obama. they've fallen through. i'm not sure why there's grounds for optimism. looking ahead, charlie, there may indeed -- some of the ratings agencies have said, even with the debt ceiling increase, there may be a downgrading of u.s. credit, because we're not optimistic about that long-term outlook. >> i mean, the only thing that would gi anybody any sense of optimism, if they pass something that does have some kind of a coission in it of members of congress with some very hard triggers or targets, that sort of thg, then perhaps that would do it. but i think given everything we've seen over the last weeks and months, you would have to say that is an unlikely outcome that we will look back on this and say this is the moment when they got serious. i mean, i think a lot of people think that, well, let's just ve iout in the 2012 election. >> rose: right.maybe the publice it. >> rose: but the issues havebegf what the -- drawn in terms of what the 2012 election will be about. and will be in fact about entitlements and the deficit, and whatever action took place in this congress to make points and face down the reality of the debt ceiling. >> i agree with that, charlie. the real problem is that we are unlikely -- i mean, given everything we've seen over the last number of elections -- we are unlikely to see either party have enough strength coming out of 2012 to be ableo do what they say they want do. part of the problem we're running into this -- at this moment is that the republicans have overinterpred the mandate from 2010. so we will have a big debate in 2012, there's no question about that. and an important debate. i'm not sure that the voters will resolve it finally so that whoever is in power in 2013 can be able to go in the direction that they say they want to. >> and one issue that -- one issu charlie, that has to be joined next year are the tax cuts. the bush tax cuts expire in december of 2012. either they'll have to have some nd of a resolution in congress or more likely they'll fight thatut in september or octob of 2012 and the campaign trail. >> rose: jerry joins us now fro. he wrote today -- jerry, welcome. sorry for the delay, whatever the technical delay was. >> thank you. >> rose: you wrote today, theinf warning to deal with any plan to deal with deficits a raise the naon's debt ceiling isn't a freak accident instead it's the culmination of an unresolved debate over the size of government and the growing hyper-partisanship of congress, particularly the house of representatives. as we look a this a bit bit from distance, thiis all about the role of government and partisanship in the house. >> not only the house, but particularly the house. al and dan were jt referring to it. there's a dete that will have to happen in 2012. some people thought it was resolved to some extent in 2008. it realldoes go to this question, how big is the government, what's the role of e gornme in a 21st century in the united states of america, and how do you resolve that questi? in aay that's the backdrop of this eire debate. yes, it's about the precise level of spending cuts, about the tax level, whether there should be increased revenues from some place or another, but it's really this bigger question, how big should the government be? 19% or 20% of th, or 22% or 23%? >> rose: al?any single group ths looked at this, bowles-simpson, the gang of six, the national science foundation, every single one has concluded that to deal with the structural long-term problems you have to deal with entitlements and taxes. you can't do it without that. and i think obama was late to the game. you can justifiably criticize him for not getting in much earlier, not doing it in his budget, but he came to the game. basically what the republican rank and file said to their leaders was, we don't want to play in this game. i think in that sense, there's an imbalance. i tnk you could have gotten that grand bargain through enough democrats to pass the house and sete. it was the republicans that were the obstacle. >> rose: dan?look, i agree withy and al on this. the role of government has been at the heart of the debate since barack obama was elected. you can that it's been at heart of our debate since ronald reag was elected in 1980. i think one of the questions coming out of the 2008 election was the degree to which people said we are -- we are done with the reagan era. we want a different kind of government now. that is a very difficult thing to interpret. barack obama had a painful series of decisions to make, particularly because of the state of the economy. he chose to go big in a lot of different ways. and perhaps that was necessary as he has said, but it also set off a big backlash. we've been living with the consequences of that ever since. in part he did what he did without any republican support, because they made a calculate political decision tt opposition to obama was in fact the best course for them politically. so as jerry wrote today, the role of government is at the heart of the debate in this country about who we are as a people. but the hyper-partisanship has left us in a position where we can't easily deal with that, even if people of gowill want to do that. >> rose: the 28 election was ara and size of government? >> 2010 was. >> rose: 2010.yes, up to a poi,i think where the republicans may be overinterpreting is 2010 was also a referendum on the unhappiness of the american people about the state of the economy, and that is not entirely different from the role of government and the size of government, but it's not the same thing. it doesn't necessarily lead to the same kinds of policy sotions./vrq iuz certainly there was somepust what barack obama had done, but was it because the economy hadn't turned around or because he had spent a lot of money and created a big deficit? i think there's a clear disagreement between democrats and republicans on what 2010 meant, and that's what we're seeing right now. >> rose: and it's compounded bye over the fact you have to create growth in order to live in a world that we're facing with multiparties and competition, you have to have an investment in things like science and ings like edu