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House Passes Debt Deal 269-161; Gabrielle Giffords Returns to the House

Aired August 1, 2011 - 21:00   ET


PIERS MORGAN, CNN HOST: Tonight, beat the clock.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The deal negotiated with the leaders of Congress is a victory for the American people.

MORGAN: But is anybody in Washington really happy now?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This process has been messy. It's taken far to long.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: We've been operating under a balanced budget amendment that we had never gotten ourselves into the mess that we're in.

SEN. HARRY REID (D), MAJORITY LEADER: No one got what they wanted.

MORGAN: Will this make the economy even worse?

REP. EARL BLUMENAUER (D), OREGON: This agreement cast a long- term shadow on our nation's reasonableness and our reliability.

MORGAN: Has Congress shot itself in the foot?

SEN. JOHN MCCAIN (R), ARIZONA: 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 are right.

MORGAN: Tonight, I'll talk to the White House, leaders on both sides of the aisle, and the man who can answer what may be the biggest and most important question of all. What will all of this cost you?


Good evening. Breaking news tonight the House has passed a debt deal by a vote of 269-161. The stop the Senate, we expect a vote there tomorrow at noon.

But tonight, the moment that nobody expected, Congresswoman Gabrielle Giffords casting her very first House vote after she was nearly killed in an assassination attempt back in January. Her colleagues giving her arousing, very emotional standing ovation, as House minority leader Nancy Pelosi hugged her. Congressman Giffords voted for the measure. And now here to talk about what happens next on this debt battle, my colleague Wolf Blitzer and Erin Burnett.

Wolf, let's start with that very uplifting moment there with Gabrielle Giffords. No one expected that and it was really not a dry eye in the House, right?

WOLF BLITZER, CNN ANCHOR: It was very emotional, and understandably so, because we really haven't seen much of her a little bit when her husband took off on the shuttle, but there she was. We could actually see her. People could come up to her, give her a hug, and a kiss. Remember the days she looks obviously a lot different than she used to look, but she's coming back.

I frankly was surprised to see her on the House floor. She stood up, and it was a very, very emotional moment for everyone, Democrats and Republicans, liberals and conservatives. They were just thrilled to see her and I know her constituents back in Tucson, Arizona, were thrilled that she's back in action. She actually cast a vote today.

MORGAN: And she voted yes obviously for the -- for the deal. We are in a situation now where everyone expects the Senate to rubber stamp this tomorrow, Wolf. Where are we, do you think, in terms of winners and losers here? Who's come out of this well? Who's come out of this badly?

BLITZER: Probably the Tea Party supporters have come out of it pretty well because they did manage successfully to get this entire issue linked, reducing the national debt and raising the debt ceiling. That's never been done before. They managed to get it on the agenda, and at the same time they managed to achieve at least in the short term what they wanted to do it without any tax increases.

No enhanced revenue from any tax reform or anything along those lines, so I would say that the Tea Party movement, they come out of this as winners.

The president, the Republican leadership, the Democratic leadership, you know, they don't necessarily come out successful, big winners politically-speaking, but they did manage to step away from the brink the United States -- at least not now the United States is not going to default on its obligations, its financial obligations.

That could have been a disaster. No guarantee, Piers, that this is necessarily going to stop the rating agencies from reducing America's AAA rating, but at least in the short term, it moves the United States back from what could have been an economic disaster.

The dollar going down in value, interest rates going up, and given the fragile state of the U.S. economy right now, that would have just been a huge, huge burden.

MORGAN: And Erin Burnett, let me turn to you. I mean just as an impartial observer watching all this slightly aghast might think the Tea Party have done well politically, but in terms of their behavior, and they shoved the president into a corner, made a crisis out of something that shouldn't have been a crisis really in terms of the debt ceiling being raised. And pretty much stabbed the speaker, John Boehner flat in the back, didn't they?

ERIN BURNETT, CNN ANCHOR: I think that's a pretty good way of putting it. I mean you could say, Piers, that in a sense they were playing chicken with this whole situation. If they had ended up getting out of it massive cuts that really moved the needle which the cuts that are on the table now do not, and they don't address the major entitlement programs, well, if they had accomplished that, then you could say, well, yes, it was worth it, but all of that storm for, well, frankly not very much.

So I would say, yes, not very much that was accomplished that was positive from this and now you still have great uncertainty about the economy, as Wolf indicated, that's by far the top story. You saw the market rally today on news of the deal, then we had some terrible data on manufacturing, back in recessionary territory, and the markets gave all that back.

MORGAN: Yes, I mean, almost every sector now in the American economy is floundering, manufacturing, housing, you look at it and it's going backwards. Jobless figures expected to continue rising.

Nobody really seems to believe, Erin, that anything in this deal is actually going to stimulate the American economy and that in itself is incredibly serious, isn't it?

BURNETT: Yes, it is. And nothing in this deal is going to stimulate the economy insofar as you get some certainty, that's a good thing, but again because we don't know exactly the full extent of the cuts, and what's going to happen until November. You don't get complete clarity on that front as the first thing, Piers.

And then also, in terms of economic growth in general, this is a whole debate on spending money and whether we should make significant cuts. Right now, some would argue, and by the way including the biggest bond investors in the country. You'd think they would be pushing for cuts. They're the ones saying no, we should be spending money right now and starting in a year we should start to cut aggressively when we have a little bit of economic bandwidth to make those cuts.

MORGAN: Very quickly, Erin, predictions for the markets tomorrow morning?

BURNETT: It's going to be a tough one. Overnight already we're starting to see some of the markets in Australia start to open. We're not getting gains there. Actually we're seeing some weakness, Piers. That's because of the weak U.S. manufacturing data. So we'll see what will happen tomorrow. Obviously, everyone is expecting that Senate to be effectively a rubber stamp as you and Wolf were indicating.

MORGAN: And Wolf, very quickly from you, has Speaker Boehner's position been weakened here by the behavior of the Tea Party? Could his position be in jeopardy? BLITZER: I don't think his position is in jeopardy. It may be weakened a little bit. But he did merge victorious. He got this deal through. He got a lot more than a majority of his Republican caucus through, so he's coming out OK out of this.

I think Mitch McConnell, the Republican leader in the Senate, was behind the scenes, very instrumental in putting this deal together. For those who wanted to avoid a default, he's got to emerge as one of the unsung heroes of this last-minute deal, if you like this deal to begin with, and I think most people know the consequences of failure could have been a disaster so most people like it even though they don't love it.

MORGAN: Wolf, Erin, thank you both very much.

It seems the best of the president's own party can say about the debt compromise is it's not perfect, but is it good enough?

Joining me now is White House senior adviser Valerie Jarrett.

Valerie, interesting comment from Nancy Pelosi earlier that it wasn't just a Satan sandwich that you'd had to eat today, but a Satan sandwich with Satan fries on the side.

VALERIA JARRETT, WHITE HOUSE SENIOR ADVISER: Well, you know what, it wasn't perfect, but in Washington, it's the art of the possible and what was most important is that we protect the United States' reputation, our full faith and credit that everyone around the world looks to. Preserve our AAA rating and make sure we have certainly for appreciable period of time.

That's what we heard from the business community. No one wanted to go through this debate around the holiday season and continue this cloud of uncertainty that was having a chilling impact on the economy. So that was something that the president was determined to have, and we now have a deal if in fact it is passed by the Senate, and signed by the president, that will last until 2013.

That certainty is very important.

MORGAN: But you think when the American people voted for Barack Obama in such huge numbers and then when he promised change, that they felt that they were having to be eating Satan sandwiches, doing deals with the devil? I mean, it's not quite what we hoped for, was it?

JARRETT: Well, you know what? It has been a messy process. The president said that last night, but in the end, the Congress acted responsibly. We protected our country from an economic catastrophe if we had not had this passed. And now we can return the conversation where it belongs, focusing on jobs and the economy, and doing what we can do to rebuild our economy and prepare the United States to win the future.

And that's what the president is looking forward to doing. I think this whole debate was disturbing for everybody and it's time to put it behind us. It shouldn't have taken as long as it did and now we need to move forward.

MORGAN: You said, and every Democrat agrees, that he didn't get the deal he wanted. Where did you win and where did you lose in this debate?

JARRETT: Well, I think the American people won in that we were able to bring down the deficit in this first step. We have a process in place to discuss entitlement reforms, sources of revenue, and further cuts in the second tranche, and the president looks forward to having that debate.

And the fact that we'll have a bipartisan commission set up to have that conversation, the fact that we have triggers that both sides will not want to see go off is a way of ensuring that we really do have a constructive conversation over the next few months and we're looking forward to that.

And I think another important part of the bill that was a priority of the president is that he did not want to see programs for Medicare or Medicaid or Social Security or SCHIP or the earned income tax credit, any of those programs suffer, and they have all been protected. And that was also very important to the president.

Furthermore, he said, yes, he would have preferred a grand bargain where we had greater cuts and additional revenue, but what he wasn't going to do was to see us bring down the deficit on the backs of elderly, poor, working families, the disabled, and this bill also protects them, so yes, it's not perfect, but it goes a very important step in the right direction.

We still have a lot more work to do, and it's heartening to see that we were able to get Congress in a bipartisan basis through the House at least this evening to pass this important bill. We'll move on to the Senate, and I know that the president is looking forward to signing it as soon as it comes over and then let's get back to discussing what the American people want to hear about which is how we're going to rebuild our economy.

MORGAN: I mean the problem that you have is that even if this deal goes through the Senate tomorrow, the president has emerged weak. He looks like he's been browbeaten by the Republicans. There are no tax increases when the vast majority of the Americans believe there should be and the financial crisis merit tax increases. And apart from that --


JARRETT: Well, I would disagree with you --

MORGAN: Well --

JARRETT: I would interrupt you --

MORGAN: Allow me just to finish.

JARRETT: All right. MORGAN: Allow me just to finish -- allow me to finish. Because it's not just the Republican Party, but the Tea Party who are claiming, and in my view understandably, a victory here because they have campaigned steadfastly against any tax increases and they can now stand aside and say, well, we won.

JARRETT: No, you know what? First of all it's not a matter of political winners and losers. It's about keeping our focus where it belongs and that's on the American people. What was at risk here was -- would have been calamitous if we had not acted.

MORGAN: And finally on a more positive note I think for everybody, extraordinary scenes when Congresswoman Gabby Giffords arrived in the House and got a standing ovation.

What did you make of that?

JARRETT: Well, it was extraordinary. I still have goosebumps and it shows just the congressman's sheer determination and commitment to do what she thought was right and to not focus on, again, the perfect bill, but to focus on what she thought in her heart was good for our country. So I think she's a role model for everyone. We're so proud of her that she made this effort. A I think you're right, it was a silver lining in what has been a very messy process.

MORGAN: Valerie Jarrett, thank you very much.

JARRETT: Thank you, Piers.

MORGAN: The Senate is expected to vote tomorrow at noon on the debt deal, and joining me now is Jeff Sessions, a ranking member of the Budget Committee.

Senator Sessions, how will you be voting tomorrow?

SEN. JEFF SESSIONS (R), ALABAMA: I have decided I will not vote for the bill, although I really respect the people who've worked on it and the fact that it does take some real progress toward reducing spending, although far less than we need.

But as the ranking Republican on the Budget Committee, they put in language that really undermines our ability to even have a budget next year. It would be the third consecutive year without a budget. So, for me, that was a defining moment.

MORGAN: People are saying the Tea Party are the victors in all of this, that they shoved the president into a corner, turned the debt ceiling which is normally a very routine thing into a big scandal, and also pushed Speaker Boehner into a corner and browbeat him, and some argue stabbed him in the back.

What do you say of that?

SESSIONS: No, I know -- I think the Tea Party movement represented a spontaneous American expression of shock and concern over the spending that was going on in Washington. We cannot possibly justify members of Congress can't that they are borrowing 42 cents of every dollar that's spent. This is irresponsible so they demanded change and elected a lot of new people.

They have been called terrorists. I would just say they put some terror in the hearts of big spenders. They are people who care about America, and I think that have helped move us from a discussion of how much we can spend into how much can we actually save and how can we get our spending and debt under control.

MORGAN: I mean, the fascinating aspect of the Tea Party is their emerging political power. There's no question that they have been at the forefront of the last two weeks. As a Republican, are you concerned about that or do you embrace it?

SESSIONS: I embrace it. They are fundamentally correct, Piers, in my view, and that is that Congress is running up too much debt. We've been irresponsible. The government is exceeding its constitutional limited role, and that I believe fundamentally correct.

Now all of them don't understand all of the niceties of Congress, but remember the House passed a budget that would have reduced spending $6 trillion, and they have now come forward with a compromise that represented really $1 trillion in certain cuts, maybe $2.1, $2.4 total reduction.

So they accepted that, most of those members. And so I don't think this is an unreasonable position. They love America. They are worried about the future of their country, and rightly they should be worried, I think.

MORGAN: Senator Sessions, thank you very much.

SESSIONS: Thank you.

MORGAN: The whole of Washington is talking tonight about the emotion return of Congresswoman Gabrielle Giffords to Capitol Hill. Here to explain her miraculous recovery less than seven months after the assassination attempt that could have killed her, our own Dr. Sanjay Gupta.

Sanjay, what an extraordinary moment that was. I mean it was tear-jerking, wasn't it?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It really was. And you know, you keep in mind that just purely from a medical perspective, from a neuro perspective, nearly about 3/4 of patients who these types of injuries -- gunshot wounds to the head -- don't survive at all. We're talking about January 8th when this happened. And you can see her now, how many months later, not only alive, but able to cast a vote here on the floor. So it really is remarkable both in a medical and just an overall sense, Piers.

MORGAN: I mean, are you surprised that she was even able to do this and do you know what her current condition really is? Can she converse with people? Can she have normal conversation? GUPTA: Well, you know what, when you think about, you know, cognition overall, Piers, it's sort of two ways to divide it. First is your comprehension, your ability to understand things. And I can tell you -- you know, we did a whole -- a whole investigation into this. She was able to comprehend things almost always since the time of this injury. So her comprehension has never really been a factor.

More of her expression to your question, Piers, that's been tough. She speaks more -- one or two-word sentences. She has difficulty expressing through the spoken word, through the written word, through gestures, but you know obviously it's something that improves over time.

The last time she -- you know, they gave a full report on her was about a month ago and she seems to have improved even since then.

But Piers, if you look at the video closely, you'll still notice a couple of things. She's getting a little bit of help certainly in standing. Someone's hand is around her waist. Her right arm doesn't move. Her left arm moves well, but her right arm which is affected by injuries on the left side of the brain does not move, and that's sort of expected. And I'm sure that's still part of her ongoing now outpatient rehabilitation, Piers.

MORGAN: And from a therapeutic point of view, Sanjay, would something like today with the outpouring of emotion and everything else, would that be seen as a good thing, do you think, for her?

GUPTA: Well, I think so. You know when you talk about rehab they talk about, you know, the things that you might expect. For example, she used to be right handed, but because her right side of the body is no longer as strong, she's got to learn to write with her left hand. Things like that. Those are tangible things.

But the idea that you can get rehabilitation by actually finally getting back to work so to speak, interacting with your colleagues, getting that emotional support, that's certainly a big part of it as well.

You know as doctors we like to get patients out of the hospital as quickly as possible, because we believe they can improve, recover and rehabilitate themselves better when they're -- you know, around their friends and their family. So this is certainly a really good demonstration of that tonight, Piers.

MORGAN: It certainly was a wonderful moment. Sanjay, thank you very much.

GUPTA: Thank you.

MORGAN: Coming up, did the Tea Party stab John Boehner in the back? And later what could the deal cost you? I will ask Dave Ramsey.

(COMMERCIAL BREAK) MORGAN: The debt battle has been an ugly spectacle of Republicans battling Democrats, Republicans battling Republicans, and Democrats battling Democrats.

So is the Tea Party the big winner in all this?

Joining me now is Representative Connie Mack of Florida who voted no tonight.

Congressman, you voted no to a deal that got bipartisan support and saved America from going into catastrophic default. So I can only assume that you would have been quite happy for your country to go into catastrophic default?

REP. CONNIE MACK IV (R), FLORIDA: Well, then you would have assumed wrong obviously. My point is this. We now have over about $14.5 trillion of debt. And with this bill that passed today, we are assured to have over $17 trillion of debt. None of the cuts in this bill are cuts off of real numbers. They are all cuts off of increases in spending.

And what I have heard over and over again from my constituents, people around the state, and all over the country that have been calling my office, they are saying is enough is enough. We want a solution. We don't want a deal or a compromise. We want to solve the problem.

So my vote was for solving the problem. And this bill did not do that.

MORGAN: The problem is, any sensible economist around the world says you cannot get America out of this catastrophic debt it's now in without raising taxation. Yet you're impeccably opposed to this.

MACK: Well, again, I mean I've been saying that if all economists -- I don't think that's correct. I mean there are plenty of economists who say if you were to raise taxes right now, you would kill any kind of growth that we might be having.

Look, we've got a problem in this country and that is --

MORGAN: But we're not having any.

MACK: Yes, and why is because of overregulation and too much taxation. So what we should be doing is lowering taxes and then making sure that we cut spending. I don't know who the economists are that you're talking to, but most people would agree that if you want businesses to create jobs --


MORGAN: Well, why we don't start -- Congressman, why don't we start --

MACK: And business -- wait a second, wait a second. Business want to create jobs because that's how they make more money. If they want to do that you don't tax them more, you tax them less.

MORGAN: I'm sure you've heard of Paul Krugman, for example. He won a Nobel Prize for economics.

MACK: Well, I'm sure there are a lot of other economists on the other side, but are you telling me that you think America that we should raise taxes in a time when an economic turndown? I mean I don't think that most people would think that raising taxes at a time right now -- in fact, the president has said so, the vice president has said so, Democrats and Republicans have said this is not a time to raise taxes.

So those economists are on the outside looking in. The rest of us are saying, how do we create jobs? And the way we create jobs is by cutting regulations, and cutting taxes, and then we have got to get our fiscal house in order here in Washington.

With this bill that passed today, we're looking at over $20 trillion after 10 years of debt. If the federal government was an individual, that individual couldn't get a credit card because their debt to income ratio is so out of whack.

MORGAN: The real problem, though, Congressman, is that actually the reality is that the American people are watching these farcical scenes in Washington and they believe it's a complete disconnect between politicians today in America and ordinary members of the public, because what they have seen over the last 11, 12 years is a dysfunctional series of administrations taking the economy in this country into the cart.

MACK: I agree with you 100 percent, and that's why for up until now all we've been doing is spending more and taxing more. That is not the way forward. The way forward is to cut spending. So right now, did you know that we spend about 7.5 percent more a year every year?

So if you try to take that from 7.5 to, let's say, 6 percent, that's considered a cut in Washington. No one back home would believe that if they got an increase year after year, and if you took a little bit from that, then that would be a cut.

We need to get serious, and the people out in America are saying, tell us the truth, give us a solution. Let's not have some deal or bargain in Washington. Let's have a solution to the problem which is our debt and the deficit.

MORGAN: And finally, Congressman, presumably, you believe that Speaker Boehner should now resign given he's authorized this terrible deal?

MACK: Of course, I don't believe that. I think the speaker has done as good a job as he can considering the circumstances. He had a president that was unwilling or unable to sit down at the table and put up his own plan. He had to work with the Senate that had no plan and no idea of its own, and then he had to work through the different factions in our own conference. I think the speaker has done an excellent job. It's not something that I supported, but that's what happens here in Washington, D.C. all the time.

MORGAN: If he's done such a great job, why did you stab him in the back?

MACK: I didn't stab him in the back. Come on, don't be ridiculous with stuff like that. Now you're just making your show a joke.

MORGAN: Really? Why is that?

MACK: For saying things like that, Piers. Come on.

MORGAN: Well, I don't -- I actually don't agree. I think that this was such an important deal, and the American people were so desperate for a deal to be done with bipartisan support that the continual reluctance of say of the characters like you from the Tea Party side who many people feel have had their fun and turned this debt ceiling issue into a scandal that should never have been a scandal, that brought the country almost to its economic knees by doing so.

I mean actually now the right thing to do is to take one for the team, isn't it? A move on a bipartisan way, not continue to try and stop this process going ahead.

That's not my show being a joke, it's a fact.

MACK: Well, when you say things like stab the speaker in the back, that demeans your own show. The real scandal here is this.


MORGAN: Well, I don't see -- I don't see -- let me explain this simply.

MACK: The real -- no, no, no. Wait a second. Wait a second.

MORGAN: Let me finish. I don't --

MACK: The real scandal here is that --

MORGAN: I don't see how you equate --

MACK: The real scandal here is that for year after year after year we've been spending more money than we bring in, and to continue to let Washington, whether it's Republicans or Democrats, to spend more than they bring in, to rack up $14, $17, $20 trillion in debt with no way to stop the spending, that is the problem.

So all of these other things, they pale in comparison to what are we going the do about controlling our debt and our deficit.

MORGAN: But when you are a few hours away from the first-ever default in American history, and the disaster that would bring not just to America's economy, but the world's, and your leader does a deal with the Democrats which has massive wide bipartisan support, and you still refuse to sign up to it, you are stabbing him in the back, metaphorically. Not really, you're not doing with a knife, but effectively, that's what you're doing.

MACK: In fact, what I'm doing is fighting for what I believe is right, and I think the American people recognize what we need to be doing is cutting spending.

Now you might not agree with that and others might not agree with that, but that's what I believe and that's what I think most Americans believe that the way we move this country forward is by getting our debt and deficit under control.

We can't have $20 trillion of debt. There's no way that this country can continue with that kind of debt. We need a way to cut it. And I've put forward a plan. I've done something, by the way, that the president and the Democrats didn't do in the Senate. I actually put a plan out there and presented it to the conference and to the country.

And so, you know, I think I'm speaking here with a little bit of authority that I'm not just saying no, I'm offering ideas as well.

MORGAN: Congressman Mack, thank you very much.

MACK: Thank you.

MORGAN: President Obama is facing fierce criticism from his base. Coming up, I'll ask Arianna Huffington why she says this whole thing is a breakdown of the political system.


MORGAN: Arianna Huffington has called the debt battle a breakdown of the political system and she joins me now. Arianna, why do you say that?

ARIANNA HUFFINGTON, "HUFFINGTON POST": I say that, Piers, because here we have a major crisis in the country. We have a growth crisis, which means a jobs crisis and a debt crisis. We do not have a debt ceiling crisis. That was a completely manufactured crisis that we spent an enormous amount of time and energy trying to resolve.

And in the process, we have made the economy worse, because we have reduced demand at a time when the economy is so fragile. Last quarter, we only grew by 1.3 percent. Unemployment is at 9.2 percent, almost 25 million people unemployed or underemployed. And there is nothing in this deal that makes the economy any better, absolutely nothing at all.

That is a truly dysfunctional system, if after all of this debate, after all this effort, that is what we have ended up with.

MORGAN: What I find extraordinary is that Nancy Pelosi said earlier that it was a Satan sandwich with Satan fries on the side, describing the deal. What kind of deal is that, for goodness sake? Why should the American people have to put up with a Satan sandwich with Satan fries.

HUFFINGTON: I thought it was another congressman who said that. Did Nancy Pelosi say that, too?

MORGAN: Apparently, yeah.

HUFFINGTON: Well, that is surprising because she is normally much more careful and circumspect about what she says. The point is that there are an enormous amount of people in the country, Democrats and republicans, who don't think that this deal is making the economy better.

It is a though we have a stalled car, the economy. And instead of trying to start it with jumper cables, we are taking out the gas tank. That is what we are doing right now. And the president wasted very precious time. I listened to Valerie Jarrett, who I'm a great admirer of, trying to defend him.

But the bottom of the line is that he wasted all of the time when instead of using the bully pulpit to convince the American people that it would not grow the economy, would never resolve the debt crisis. Instead, he adopted the Republican, the Tea Party framework that makes the American people believe that the only solution to our problems is spending cuts in the middle of what could become a double-dip recession.

MORGAN: Apparently, it was Congressman Cleaver, Emanuel Cleaver, who apparently first said the Satan sandwich line. But Nancy Pelosi repeated it. So as far as I'm concerned, exactly the same.

Let's come to the winners and the losers here, Arianna, because it seems the real winners are the Tea Party. They managed to inflame this into a huge scandal, when as you say, the debt ceiling issue comes up all of the time without any problem normally.

But they have also had control over the speaker, John Boehner, haven't they, because they have pushed him back on the original vote? So the Tea Party, really, have been calling the shots with both sides?

HUFFINGTON: Well, the Tea Party was allowed to call the shots. There was a vacuum of leadership. And into that vacuum stands the Tea Party, without any kind of economic theory to back up the solutions that they were offering.

But if there had been real leadership on the other side, this would not have happened. I really liked what Bill Clinton suggested President Obama should have done, which is basically appeal to the 14th Amendment, the constitutional option, and raise the debt ceiling and refuse to be held hostage, and more, important refuse to allow the economy and the lives of the American people to be held hostage by a party that simply does not understand economics.

MORGAN: On your splendid website, you are launching today HuffPostWomen and HuffPostParents. Let's get real and personal here. What do you think today's deal, and the Senate presumably approving it tomorrow, will actually do for parents and families in America?

HUFFINGTON: Well, that is really the problem, Piers. It is going to make their lives harder. And that is why we launched with a powerful and moving story by our reporter, Amanda Fairbanks, about how many college students right now who cannot afford to pay their debts are actually resorting to prostitution. They're literally selling themselves in order to pay their college debts.

And the stories are so moving and powerful. And you read about the African-American student from Hunter college who takes the train to Greenwich to sleep with a guy who is helping her to pay her college loans. And the reality is that the average college debt for a student graduating in 2011 is 22,000 dollars. And when you come out of college and you can't find a job, that is a pretty bleak future that so many of the young people are facing right now.

And that is the American dream that we are betraying. As an immigrant into the country, I feel that that's the ultimate betrayal.

MORGAN: Arianna, obviously, you are Greek, and you were born in Athens. Greece has been through a complete financial collapse. Do you fear that America, despite all of the protestations to the contrary, that America could go through the same thing that Greece has been through?

HUFFINGTON: Well, I'm ultimately an optimist. I believe, as we saw with Congresswoman Giffords today, that there is an incredible resilience to the American spirit, and that we can overcome all obstacles. But we actually do need to come together, not just to talk about shared sacrifice, but to actually indulge in some shared sacrifice that we make the lives of average Americans better.

MORGAN: Arianna Huffington, as always, a great pleasure. Thank you very much.

HUFFINGTON: Thank you so much. >

MORGAN: Next, one of the country's leading CEOs. Would he have accepted higher taxation. And later, what you need to know about the debt deal and your money. I will ask Dave Ramsey.


MORGAN: The debt compromise seems to be the deal that Washington loves to hate. Joining me now, two men on opposite sides of the battle, Mark Zuckerman, editor in chief of "U.S. News and World Report," and Grover Norquist, president of Americans for Tax Reform.

Mort Zuckerman, let me start with you. Clearly a deal without any tax increases at all, when many economists around the world say America's economy desperately needs them. What was your view?

MORT ZUCKERMAN, "U.S. NEWS AND WORLD REPORT": Well, I believe that there should have been tax increases, if only for a political matter, because everybody in the country, it seems to me, has to be seen to be participating in what I call shared sacrifice. And that was the way to get it done. You needed also a bipartisan approach to this thing, because if we're going to do anything serious, both parties had to assume responsibility for it.

That was nothing thing that was lost. There was a moment there I thought where Boehner, when he came to the president, had 800 billion dollars in tax -- the elimination of what I would call tax expenditures or whatever you want to call it, all of these special deals that built into our tax code that so distort our economy.

And that money was going to go and rationalize the tax code. And I think that would have been a real stimulus to the economy. But the president, frankly, introduced another 400 billion dollar request for tax increases and blew that deal out of the water.

So you've had lousy leadership on both sides, as far as I'm concerned.

MORGAN: Grover Norquist, you have won the day. You were implacably opposed to any tax increases. Many Republicans signed up to that. And you have got what you wanted.

Here's the question for you, if I get you back on the show in a month's time, are you absolutely certain this no taxation at any cost policy of yours will mean that the economy will have recovered?

GROVER NORQUIST, AMERICANS FOR TAX REFORM: Well, it moves us at least in the right direction. Certainly, we didn't get as much spending restraint as Republicans wanted. There was a tremendous amount of compromise. The Republican budget passed through House. It was a six trillion dollar cut in Obama's planned spending, the Ryan Plan.

What we got was 2.5 trillion. That is a lot of give on the part of the Republicans. What the republicans were not willing to do was to raise taxes rather than cut spending. Mort Zuckerman said the reason he wanted a tax increase was because you had to do that to get the spending cuts, that is the reasoning of 1982. That is the reasoning of 1990, both failed budget deals where the tax increases were real, the spending cuts were phony.

What we learned in this -- and that's the good news -- is that you don't have to raise taxes as part of some deal. What you can do is to focus on the problem, too much spending. And that's exactly what we did. It was bipartisan. You saw quite a number of Democrats in the House vote for it. The president says he is for it. He is a big Democrat. And Democrats in the Senate will vote for it.

We have a bipartisan spending cut.

MORGAN: Here is the thing, Grover. I have listened to you espousing this for a few weeks. And you have had a good day today. My point is this: both Presidents Reagan and Clinton raised taxes in slow economies and went on to have very good economies. There's nothing in principle intrinsically wrong with it. And my issue with your implacable position is at what point does it stop being implacable? At what point with the economy continuing -- say let's assume the worst case scenario, because the markets are already responding badly to this deal.

Let's assume that the economy continues to tank in America. Let's assume that the credit rating gets downgraded. Let's assume that things get a lot worse before any sign of improvement here. At what point do you and the Republicans that agree with your position on taxation stop and think actually we have to consider it?

NORQUIST: I don't think that putting leaches on a patient is ever a good idea. I don't care how sick the patient gets or how well the patient gets. Putting leaches on the patient is not a good idea. Raising taxes does not help the economy . As a matter of fact, the two cases you talked about, Reagan had a significant rate reduction, then some tax increases. The tax cuts are what helped grow the economy.

With Clinton, what happened is that the economy didn't turn around until the Republicans captured the House and the Senate. They also cut the capital gains tax. So those are --

MORGAN: Let me bring in Mort Zuckerman again, who is smiling wryly at the description of leaches here. Mort, over to you.

ZUCKERMAN: Well, let me say this: I do agree that there is a fundamental issue that we all have to face, which is that our expenditures as a country way exceed our income. And as Erskine Bowles said, this is the most predictable crisis in the country's history. And we absolutely have to do something about it.

But it is a political process as well as an economic process. And with all due respect, I do believe, A, we should have had much more in the expenditure cuts, if not right in the short run, because of a weak economy. But over the next several years, we should have had larger cuts in expenditures. And if it took a modest amount of tax increases to get that done, I would have supported it.

I do agree that we absolutely must do something about this deficit, because otherwise, we are going to break the fiscal side of this economy and break the economy. We cannot support the kinds of deficits that we have incurred. There is just no question about that.

And any -- frankly, any reasonable economist would say that.

MORGAN: Gentlemen, thank you both very much.

Coming up, what the 2.4 trillion dollar debt deal means to you. Dave Ramsey is here to explain.



MORGAN: I want to bring in a man now who knows a lot about the 2.4 trillion dollar debt deal, particularly what it means for you and your money. He's Dave Ramsey, host of "The Dave Ramsey Show."

Dave, good evening. Let's forget all the Washington rhetoric. What does all this mean for the average American Joe? What should they be doing with their money right now?

DAVE RAMSEY, "THE DAVE RAMSEY SHOW": Well, that's the funny thing about it. The average American Joe actually is the economy. It doesn't come from the top down out of Washington. It does come from the bottom-up.

So if enough people start doing smart things with their money, it will heal the economy. Smart things are outlined as having savings for emergency, living on less than they make and getting out of debt, which would all be good rules for Washington, as well.

MORGAN: We're getting a lot of reaction on Twitter tonight. Abnormally high volumes. If you want to get ahold of me, @PiersMorgan, give me your views on this debt crisis.

But what they are all saying, to a man and woman, is they've had enough of these politicians squabbling, literally fiddling while Rome burns.

RAMSEY: Well, there is a lot of that. But they've also had enough with this people with their heads stuck so far up their politics, all they can speak in is sound bytes, people stuck on ideology and to where they say -- it's hilarious that the far left says all the economists agree, and the far right says all the economists agree.

All the economists don't agree on anything. Economists are there to make weather forecasters look smart. I mean, ridiculous. So what all Americans can agree on is they are well aware that we're spending 42 percent more than we're taking in. And they're aware that has to be fixed.

I think most people are smart enough to know we can't fix it in well fell swoop with this particular bill. But it is time this is addressed. This is not a false crisis. It's a real crisis that's been brought to the head by the emotions of the American people.

MORGAN: Dave, you spend a lot of time talking to the average American and understanding their cares and concerns. There is this kind of mythology being built up, I think, in Washington, that Americans aren't prepared for tax increases. But I don't get that sense. I get the sense that there's much move realism on the streets in America about the need to do that.

RAMSEY: You know, what Americans say about taxes to me, Piers, is this, whether on the left or right: they want this sense that people are carrying their fair share. There's where you get into that argument is "fair share." We have 49 percent of Americans last year that did not pay a dime in federal income tax. Not one dime.

And mathematically, we've got this bunch of folks that say the rich and business can solve it all. There's not enough money in the rich and business to solve it all. It is going to be a shared sacrifice. And sadly, it's going to hurt all of us when we come out of our pocketbooks and when we cut services and things back.

The government has mathematically reached a point it can no longer be all things to all people. And it's going to be tough on all of us. All of us enjoy things that are brought to us by D.C. And it's mathematically not able to anymore.

MORGAN: Are you very concerned about what's going to happen the rest of the year in terms of America's economy? Nothing is reacting positively to this deal at all. And this seems to be not the last throw of the dice, but pretty close to it.

RAMSEY: Well, I think that this is going to at least put this off the front page. And it is going to let people go back to their lives. When I go to a restaurant and spend money, and when I buy gas to go to that restaurant to spend money, and I buy a car to drive to get in to drive to go, that's the economy.

When people are sitting at home and fretting and worrying if there's going to be collapse all around their ears, it freezes everyone like a deer in the headlights. And that's not good for anyone. It freezes creativity. It freezes passion. And most of all, it freezes, the flow, the velocity of money in the economy.

That's what we need to get moving again as much as anything, not just spending, but just people moving around and doing deals and doing business, instead of being frozen by this. So the good news is it gets this off the front page and let's people go back to their lives.

MORGAN: Dave Ramsey, as always, talking a lot of sense, thank you very much.

RAMSEY: Thank you, Piers. Good to be with you.

MORGAN: Thank you. We'll be right back after this break.


MORGAN: Before we go tonight, I want to take a moment to pay tribute to an amazing woman. Just a little less than seven months ago, Congresswoman Gabby Giffords was a victim of an assassination attempt. Tonight, she showed Congress and the world the face of a true hero, walking onto the floor of the House in the midst of one of the ugliest debate's in Washington's history. A display of courage that I suspect no one there will ever forget. I know that I won't.

That's all for us tonight. Now Anderson Cooper and "AC 360."