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Debt Deadline Nears; Tea Party Victory?

Aired August 1, 2011 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: You will see it, you will hear it live right here in THE SITUATION ROOM. Stand by.

The debt deal is a bitter pill for so many Americans to swallow. There are angry critics on both sides. We're looking at why the Tea Party movement, though, may be the big winner of this nasty fight.

And "a sugarcoated Satan sandwich," that's what Congressman Emanuel Cleaver calls this debt deal. He's standing by live to tell us why he's so upset.

We want to welcome the viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

They still haven't staggered to the finish line. After weeks and weeks of bitter political wrangling, congressional leaders have reached a compromise deal with the White House on lifting the nation's debt ceiling, but they have been rounding up support so they can put it to a vote. We're awaiting action in the House of Representatives. The Senate may take action perhaps later tonight, maybe tomorrow morning.

Meantime, the clock is ticking, with just hours to go until the deadline to avoid default on America's debt.

First, let's go to CNN's congressional correspondent, Kate Bolduan. She is live up on Capitol Hill with the latest on this House floor debate.

What is the latest, Kate?


I'm just steps away from the House floor where the debate is under way which means we're moving towards a vote on final passage of this compromise deal. We're told by sources that it could happen before 7:00 this evening, so we're keeping a close eye on that. Meantime, some interesting developments to tell you that have happened in the last hour since we last spoke.

Throughout the day, it's been really hard to pin down where House Democratic leaders stand on this bill. Throughout the day, they have refused to throw their support behind the bill and refused to say -- really take a position. Well, now I'm told by a top House leadership aide, a House Democratic leadership aide that the number-one Democrat in the House, Nancy Pelosi, she will vote yes, that she will be supporting this compromise deal.

And now listen here to the number two Democrat in the House, Steny Hoyer.


REP. STENY HOYER (D-MD), HOUSE MINORITY WHIP: I am voting for this bill, not because I like this bill, although it does do some things that I think need to be done. We need to bring down the deficit. We need to address the debt. We need to return to fiscal responsibility. But default for the United States of America is not an option.


BOLDUAN: At the very same time, Wolf, it really seems clear that there's something in this deal for everyone to dislike.

For many Republicans they do not think that these cuts in this deal go far enough, while there is a group of House Republicans who have voiced concern today that the cuts to defense programs simply cut too deep, that they are concerned about that. On the other side of the aisle Democrats are concerned, and some of them very unhappy with the fact that while there are these deep spending cuts to many programs across many agencies, they don't think this is balanced enough.

They would like to see some revenue here which, of course, Republicans read as tax increases, which you know, Wolf, has been a no-go for them all along. So we're watching this play out on the House floor right now. We're keeping a very close eye on it. And as we always say, you can't count the vote until the last vote is counted, so we will be watching very intently to see where the votes fall on this -- Wolf.

BLITZER: Kate, what about the Senate? When do we expect the Senate to take up this legislation? It takes two to tango, if you will. Even if the House passes it, the Senate has to pass it as well.

BOLDUAN: That's absolutely right, Wolf.

There was a lot of talk throughout the day, could they get the vote in the Senate by the end of the day? Some people were very hopeful that they could. We were told by both Democrat and Republican aides in the Senate that the vote in the Senate is very much more likely to happen tomorrow, Wolf.

BLITZER: And then assuming it passes the Senate, passing the House, the president will sign. You will see a big signing ceremony and all of that stuff. All right, Kate, thank you.

BOLDUAN: Thanks, Wolf.

BLITZER: This bipartisan bill has something for everyone to dislike. Many Republicans fret about cuts in defense spending and the lack of a balanced budget requirement. And Democrats are angry about cuts to domestic spending, the absence of any tax increases for wealthier Americans.

So what exactly does this deal include?

We asked Brian Todd to take a closer look -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the deal breaks down in two basic stages. In the first stage the debt ceiling is raised $900 billion through the end of this year.

That is accompanied by about the same amount of dollars in spending cuts, but we need to clarify. These spending cuts actually play out over the next 10 years. Where are the cuts going to come from? Well, the details have not been worked out yet, the specifics not worked out, but we know that they are going to come from two basic categories, security and non-security.

On the security side, that includes cuts to the Department of Defense, some intelligence spending, the Department of Homeland Security, the Department of Veterans Affairs, and the State Department, among other agencies.

On the non-security side, well, we're not sure about that yet, but experts have told us today that if the pattern holds from cuts that came from the House Republicans this year, look for more cuts to places like the Department of Labor. That may mean fewer inspectors for workplace enforcement rules, maybe more cuts to the Department of Health and Human Services, possibly even cuts to the Environmental Protection Agency, Wolf.

BLITZER: That's the first round, Brian. Take us through the second round of this process.

TODD: All right, in the second round, you have got the debt ceiling being raised between $1.2 trillion and $1.5 trillion between January of 2012 and the end of January of 2013.

Now, in exchange for that, a bipartisan committee in Congress works on spending cuts totaling the same amount. Those cuts also take place over 10 years. That committee has until the end of this year to vote on proposals for those cuts over those 10 years.

If that committee cannot agree on proposals, then a trigger would kick in, imposing mandatory across-the-board cuts over the 10 years, from 2012 through 2021, Wolf. So that's kind of an overview of the mandatory cuts that will kick in if that trigger...


BLITZER: Yes, the trigger is hovering over this process.

Brian, if the trigger were to kick in, where would those cuts come from?

TODD: We will show you a pie chart here, going to get rid of some of bring, actually in a pie chart here. Oops. Wait a minute. Let's get rid of that. Hold on. And then this. Hold on a second. OK. Sorry. Sorry about that.

All right. The pie chart, the government is spending some money in these ways. It spends it on the interest on its debt, on Social Security and Medicaid and other entitlements, on Medicare and all other discretionary spending, as well as on defense spending.

But under the proposed cuts over the next 10 years, if they have to do this, if the triggers have to kick in, then the cuts will come in defense spending, in other discretionary spending and in Medicare. But the cuts in Medicare would be just for the money that they spend on providers, meaning the doctors and nurses that give the Medicare service to the elderly.

The elderly -- it would not affect benefits. The elderly would not see their costs rise, and also if the triggers kick in, the interest rate would not be touched. Social Security would not be touched, no cuts to these entities and no cuts to Medicaid and the other entitlements. That committee could try to tackle some of that, Wolf, but it's likely they probably will not.

BLITZER: All right, Brian, thank you.

A lot of drama as the default deadline looms.

Let's bring in our chief political analyst Gloria Borger. She is here. She's working part of this story.

I don't know if you had a chance to see the blog that I wrote. This debate that we're going through right now, if you love this debate right now, Gloria, you will love what's coming up on the eve of Thanksgiving, when this super committee is supposed to come up. If you hated this debate now, you will despise the debate in November.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: OK. So only will we have the debate the eve of Thanksgiving, but also the eve of Christmas, Wolf, because this special committee, there's about a month where you have got to figure out what you're going to do about the cuts that the committee proposes.

And so I think we're going to revisit these same arguments, and it's kind of interesting because we have two things going on. We have the Bush tax cuts set to expire at the end of 2012, and the president has said, and Dan Pfeiffer told you, that he would veto any attempt to make those cuts continue.

BLITZER: For the wealthiest.

BORGER: For the wealthy, and at the same time then you're going to have a path in which tax reform may be considered as part of this joint committee. They believe they go hand in glove. They believe that, OK, if you reform the tax code and you lower the top rate, then it's easier to say, OK, let the tax cuts for the wealthy expire because they are getting a lower top rate, so they -- they believe those things could actually work together.

BLITZER: It's not going to be easy. It's only four months for this so-called super committee to get their act together.

BORGER: I know.

BLITZER: Come up with recommendations that the Congress will have a chance to vote up-or-down on. The president would have to sign that into law, but if they don't do it, that trigger will be powerful.

BORGER: That's right, very powerful, and they believe it's a sword over their heads and that that's why they are going to act, because they need something to push them up against the wall.

But I was talking to a senior administration official today who said to me we will know about this committee the minute we see the appointments and who gets put on this committee. There's some talk, for example, in the Senate that the whole gang of six, that bipartisan group, should be members of this committee, because at least they have a track record of doing something on a bipartisan way.

But, for example, the House Budget Committee chairman, Paul Ryan, was on the Erskine Bowles committee and he voted against the final report, which called for some tax increases. So if he's on this committee, some Democrats are going to be really wary about whether they can get anything done. And of course he's the chairman of the House budget committee, so one would think he would be on it.

BLITZER: Yes. And it's not going to be easy getting some sort of consensus, six Democrats, six Republicans, and presumably some of those Democrats and Republicans will be on the extreme.

I want to go to the floor, Gloria. Nancy Pelosi, the Democratic leader, is speaking.


REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: ... gentleman for yielding. And every chance I get I want to salute him for his tremendous leadership as the top Democrat on the Budget Committee, for the work he did with Mr. Clyburn on the bipartisan talks as they strove to have what the American people want, a balanced, bipartisan, fair agreement to lift the debt ceiling and take America forward.

Unfortunately, that did not happen. What did happen, and it brings to mind the extensional question, why are we here? And I would divide -- as we say in legislation, I would divide that question into why are we here and why are we here today?

We are here because all of us in this body care about our country, have decided that public service is a noble pursuit and that we have come here to make the future better for future generations. That is what our founding fathers visualized for America, that every generation would take responsibility to make the future better for the next.

That's why, Mr. Speaker, our founders, in addition to writing our founding document, the declaration, the great declaration which embodies fairness in it and equality, and then the Constitution, they declared independence, they fought the greatest naval power in the world, they won, they wrote the Constitution, the Bill of Rights, making us the freest, greatest nation in the world, founded on a principle of respect, that all people are created equal. That had never been done in the history of the world.

And when they did that, they -- as I have told you before, because I love it so much, they also created the great seal of the United States, and that Great Seal of the United States has on it novus ordo seclorum, a new order for the centuries, for the ages, forever.

So confident were our founders in their idea about generational responsibility, one to the next, that they were confident that our country, that what they were putting forth would exist for the ages -- for the ages. That was the challenge they gave us.

That is the responsibility that we have. And for a couple of hundred years or more, that has always been the case. Every generation has always believed that it would make the future better for the next, for their children and for their grandchildren.

We're here today because we believe that, and we believe that the public policy that we put forth, the legislation we put forth should result in public policy that makes the future better for our children and our grandchildren, that we are committed to their education, the economic security of our families, the dignified retirement of our -- of our seniors, including my being a senior, and also the safety and security of their neighborhoods and of our country, and that we would do it in a fiscally sound way that did not give our kids any bills, public or personal.

And so if we believe all of that and that's why we are here in Congress, it's hard to believe that we are putting our best foot forward with the legislation that comes before us today. I'm not happy with it, but I'm proud of some of the accomplishments contained in it.

And that's why I am voting for it. That takes me to the second question. Why are we here today? Why are we here today within 24 hours of our nation going into default, after months of conversation about how we would address lifting this -- the debt ceiling, not to have future spending, but to pay our past obligations. And I won't go into again how we got here.

BLITZER: All right, so you got the news out of Nancy Pelosi. She made it official. She doesn't like this deal, but she's going to reluctantly vote in favor. Presumably she will influence some other doubting Democrats as well.

Gloria is still with us.

She could have gone either way...


BLITZER: ... until now. We had heard from sources she was inclined to vote -- reluctantly vote in favor of it, but now she's made it official.

BORGER: And she also made the case that they managed -- while she doesn't like this legislation, they managed to protect certain things that are very important to Democrats, the safety net, Medicaid, for example.

The only the only cuts that would ever possibly kick in on Medicare are to providers, not to beneficiaries, even under the worst- case scenario. So I think there's a sense from Nancy Pelosi that she doesn't like doing this. She doesn't want to do it. She wished she would have had tax increases as part of it, but they did protect some key constituencies that they think would have been really hurt.

BLITZER: And we're waiting to hear from the speaker of the House, John Boehner. He will be speaking on the floor as well we're told just before the vote. You will see it and you will hear it live. The vote will happen here. It could be close. We will see what happens when the House of Representatives finally votes on raising the nation's debt ceiling. Stand by for that.

Meanwhile, lots of losers in the debt debacle. Did anyone really come out on top?



REP. RAUL LABRADOR (R), IDAHO: You know, I think there was a victory for the Tea Party and there was a victory more importantly for the American people.


BLITZER: We're going to take a closer look at the role of the Tea Party, calling the shots and changing the debate. What happened?

And it may be the most colorful criticism of the debt ceiling compromise, one lawmakers calling it -- and I'm quoting him now -- "a sugarcoated Satan sandwich." Congressman Emanuel Cleaver is standing by live to explain.


COOPER: As we await the House vote, let's go to Jack.

He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, the government is selling snake oil again.

Look closely at this so-called deal on the debt ceiling crisis, and you will see a triumph of sleight of hand over substance. Last night, it was, we're going to cut $1 trillion in the first 10 years. By this morning, $1 trillion had become $917 billion, which means we lost $83 billion overnight. Sort of makes you afraid to go to bed tonight. In the first three years of the Obama presidency, the deficits will total about $4.2 trillion, cutting $917 billion over 10 years. That's $91 billion a year. That's chump change. Then there's the commission, another commission. Remember President Obama's deficit reduction commission?

He ordered them to come up with answers to a lot of this stuff almost a year ago, and they did. Their report was full of a lot of good ideas, and it was promptly ignored by the president and the Congress. But they want us to believe that this commission is going to be different. Baloney.

There has been no attempt to address tax reform for entitlement reform. That's going to be left for the commission. My guess is they won't touch it anymore than the current crop of cowards tackled it this time around. And without those two items, we are doomed.

Supposedly, there will be triggers in that legislation that will require additional cuts totaling $1.4 trillion across the board if the committee and Congress cannot agree. Color me skeptical. We're facing $61 trillion in unfunded liabilities from Medicare, Medicaid, Social Security, and various other government obligations, $61 trillion.

There is no money to meet those obligations. And our government knows it. But they had the unmitigated gall to march out last night as though they had found a cure for cancer and expect us all to break down in uncontrolled adulation. They make me sick.

Here's the question: Do you buy the government's so-called solution to the debt ceiling crisis?

Go to Post a comment on my blog.

BLITZER: Wow. Jack, you're pretty -- you're pretty passionate about this question.

CAFFERTY: This is nonsense, Wolf, nonsense. Just -- it's just nonsense -- they are not going to -- they are not going to entitlements. They are not going to touch tax reform. They are going to name another commission to down the road sit around and do what? The same thing that the last one did, which was ignored?

This is garbage, and they keep going out and selling the same sack of fertilizer because we're dumb enough I guess to keep buying this crap.

BLITZER: Let's see what our viewers think. And they will be weighing in very soon, Jack. Thank you.

I will ask a House Democrat about the charge that the debt deal facing a vote right now on the floor is a sugarcoated Satan sandwich. Congressman Emanuel Cleaver standing by live.

(COMMERCIAL BREAK) BLITZER: While they are certainly unhappy at both ends of the political spectrum, liberal Democrats feel like they came out on the short end of this debt deal. Some have been venting to the vice president, Joe Biden, who was up on Capitol Hill today trying to shore up support.

Let's bring in our chief White House correspondent, Jessica Yellin, to update us on what's going on.

The White House clearly trying to get enough votes to get this deal passed, Jessica.


Wolf, today, the president, the vice president and members of staff have been making calls to the Hill, urging passage of this vote. Clearly, their focus is on Democrats.

But they also -- Democrats, who, as you point, many of whom are deeply upset, but they also want as many Republicans to vote for this as possible. For the White House, they want this to be as bipartisan an effort as possible, so it's not simply Democrats who are saddled with raising the debt ceiling.

Wolf, I would add that, while no one here is declaring victory, and certainly far from it, there is today finally a sense of relief, that the heavy lifting that can be done from the White House has been done, and now all eyes are on the Hill to see if they will do their part tonight -- Wolf.

BLITZER: What are you hearing about some of these closed-door meetings that are going on?

YELLIN: So, as you know, the vice president went to Capitol Hill today. Many Democrats, as you have been reporting, are deeply frustrated with this bill. And he helped close the deal over the weekend, sat and listened to many House Democrats vent.

Here was the vice president talking about it briefly. And then we can talk about what I -- I heard about that meeting after.


JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: I didn't go to convince. I went to explain and lay out exactly how we got to where we were and why this is so important for the country.

In my career up here after 36 years, I never asked another person to vote against what they think their interest is.


YELLIN: Now, multiple Democratic sources, Wolf, tell me that, in that meeting, the vice president listened as some Democrats raged at him that -- quote -- they felt -- quote -- "pick-pocketed" by the Republicans in this deal, that the country was -- quote -- "being held hostage," that the Republicans are -- quote -- "terrorists" in this deal.

And the vice president, placating the room at one point, said, "Well, at least we have taken away their weapons of mass destruction" -- that's a quote -- meaning that we have now taken away the debt ceiling as leverage that Republicans can use against Democrats in future negotiations.

I'm told by other Democrats that when he went over to the Senate side, the mood was much more calm, and they asked more about the terms of the deal and when they can get back to a jobs agenda -- Wolf.

BLITZER: They're doing a quorum vote right now to make sure they have a quorum in the House of Representatives. And then there will be the final vote on passage of this debt ceiling legislation, Jessica.

The White House, I assume they think they wouldn't -- the speaker wouldn't allow this vote to be happening unless the speaker were convinced he has the 216 votes needed for passage.

YELLIN: That's right. There's cautious confidence here that this is going to pass.

BLITZER: All right. Jessica Yellin is going to watch it together with all of us here in THE SITUATION ROOM. Jessica, thanks very much.

Neither side is ecstatic over this hard-fought debt deal. The battle showed Washington, at least to many observers, to be at its worst. The result raises more questions than it answers about where America goes from here.

But if there's a winner, it probably would be the Tea Party movement.

CNN's Jim Acosta has that.


JIM ACOSTA, CNN CORRESPONDENT (voice-over): Score one for the Tea Party movement. The people behind the anti-tax, anti-big- government rallies that burst on to the scene two years ago have changed the debate in Washington. Witness the debt ceiling deal, all spending cuts, no tax increases.

(on camera): Has the Tea Party won?

LABRADOR: You know, I think there was a victory for the Tea Party and there was a victory more importantly for the American people. Instead of talking about spending and more taxes, we're talking about less spending and no taxes.

ACOSTA (voice-over): Standing against a White House that wanted to eliminate some tax breaks for wealthier Americans, an army of more than 80 House GOP freshmen, including Idaho's Raul Labrador, held their ground, at times defying their own speaker.

(on camera): You did not get your butt in line?

LABRADOR: I did not my butt in line, no.

ACOSTA (voice-over): While some Tea Partiers are a no on the deal, one of the movement's favorites, Allen West, is a yes, even though he says he didn't get everything he wanted.

REP. ALLEN WEST (R), FLORIDA: When you run a marathon, you start at mile one. You don't automatically get straight to mile 26.

ACOSTA (on camera): That's your message to Tea Party folks today?

WEST: I think that, right now, we're probably at about mile 11.

ACOSTA: Angry Democrats say the Tea Party simply exchanged horse-trading for hostage-taking, putting the nation on the verge of default to protect the rich, and the president caved.

UNIDENTIFIED MALE: They claimed that they came here to change the way business is done in Washington. And the first thing they did is insist on protecting every special interest, every loophole, every greedy corporate interest.

ACOSTA: Matt Kibbe with the Tea Party organizer FreedomWorks says the movement is far from finished.

(on camera): Did the Tea Party take this town hostage?

MATT KIBBE, FREEDOMWORKS: We forced this town to actually have an adult conversation about spending. They wouldn't have done it without the tea party. I don't think that's irresponsible. I think that's a breath of fresh air in a town that doesn't like to talk about tough issues.

ACOSTA: And for Americans sick of the brinkmanship, there are more tough votes to come.

UNIDENTIFIED MALE: The House will be in order.

ACOSTA: On the budget in the fall and extending the Bush tax cuts next year.

REP. EARL, BLUMENAUER, (D) OREGON: Remember, there is still two potential government shutdowns over the next 14 months that will invite more legislative blackmail over an extreme agenda since it's clear that recklessness works.


BLITZER: Jim Acosta reporting for us on the tea party movement, maybe a clear winner in this entire debate. They're getting ready to vote on the House floor on the legislation to raise the nation's debt ceiling. You will, of course, see it. You'll hear it. This is a quorum call right now to make sure enough members are there. There are enough members getting ready to vote. You'll see it. That's coming up in a few moments.

Certainly, there's been a lot of colorful language used to describe this entire debt compromise package, but the prize, the certain prize goes to Congressman Emanuel Cleaver. He summed it up in the following tweet. Let me read it to you. "This deal is a sugar- coated Satan sandwich. If you lift the bun, you will not like what you see."

Congressman Emanuel Cleaver, the Missouri Democrat chairs the congressional black caucus. He's joining us now live. Congressman, thanks very much for joining us, and explain what you meant by a sugar-coated Satan sandwich.

REP. EMANUEL CLEAVER, (D) MISSOURI: Well, if you lift the bun or lift the paper on the outside of this deal, the contents are antithetical to everything that all the great religions of the world teach which is taking care of the poor, the elderly, the children, and I don't think that we can find that kind of content in this -- in this legislation. There are some things that are good politically. There are some things that are also good, I think, legislatively, but when you look at the whole of this -- this bill, it's -- it's not a good deal.

BLITZER: So, you're going to vote against it, congressman, is that right?

CLEAVER: Well, I'm walking over to vote as soon as I get through, making up my mind, and the reason that I'm saying this is that the consequences of voting no may be more dire than the consequences of voting yes.

BLITZER: Well, it's hard to believe something could be more dire than a Satan sandwich, right?

CLEAVER: Satan sandwich is not a tasty deal, and it's even worse when it's been sprinkled with Potomac River water, and I think that we've got to, you know, figure out how we can continue to govern in an atmosphere like we have here where everybody is nasty to each other, and there's no compromise. In fact, we -- we are up here in Washington having fact-free debates, and it's -- it's frustrating because once -- one side seems to just throw out all the facts, and you have no basis for an argument.

And so, right now, I think you're going to see a lot of Democrats struggling because I haven't seen one Democrat today, not one in leadership or otherwise, who thinks this is a good deal.

BLITZER: Well, let me just be precise. Even only minutes before you're going to vote, you are not 100 percent convinced which way you're going to vote, either yes or no on this legislation?

CLEAVER: That's absolutely correct, and I'm not playing any kind of political games. Look, we cannot allow the debt ceiling to linger. We have to raise the debt ceiling, and I don't know of very many people who would sit by and watch the political process taking the -- the economy of the United States off into the abyss.

And so, if I'm sitting there, and they need one vote to pass this thing, absolutely, I'm going to vote for it, and there's no need playing games, and I think there are a lot of people out there who hate this bill, but who, you know, if -- if they had to are going to vote yes.

BLITZER: So, I can assume you'll be one of the last members to actually push that button and vote either yes or no, depending if you have that 216 or not, if there's more than 216 who voted in favor, you'll vote against it. If there are less, you might have to vote in favor of it as difficult and as bitter that will be for you. One final question, congressman. Do you feel let down, some would say betrayed by the president of the United States?

CLEAVER: Well, the president did everything he could to get the best deal he could, and, you know, I'm not going to be one of these individuals kicking the president under the bus. I think that under the circumstances, he believed that he had to do exactly what he did which was to sign off on this bill. He said it's a bad bill.

And he tried to say it in some different language, but essentially, he said this is a bad bill. I don't know of anybody who's saying this is great. The Republicans got everything they wanted out of the bill. We get -- we didn't get anything. They got everything except the Democratic donkey.

BLITZER: Hey, congressman, thanks very much for sharing your thoughts with us. Good luck. I know this is a painful process for you.

CLEAVER: Good to talk to you.

BLITZER: All right. Congressman Emanuel Cleaver is the chairman of the Congressional black caucus, a democrat, from Missouri.

Let's go back to Capitol Hill. John King is standing by working his sources up there. We're only moments away, John, from this vote. I assume, and just based on my years covering Congress, the speaker wouldn't allow the vote to happen, unless, he's confident that 216 votes in favor would occur.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: I think you're exactly right, Wolf. We fully expect this measure to pass, but what you were just talking about there with the Democratic congressman, the chairman of the black caucus, Emanuel Cleaver, is the fascinating question here. How many Republicans will defect? Therefore, how many Democrats the Speaker John Boehner need? How long will those Democrats wait to begrudgingly cast those votes?

We are watching a stunning example of divided government at a time of fierce partisanship here. Wolf, as you talk to people throughout the day, and we're talking to some of the same people, I'm sure, nobody. There is nobody who loves this deal. There are some people who kind of like it. There a lot of people who don't like it at all because if you're on the left, you think it could bring Social Security and Medicare cuts down the line.

If you're on the right, you think it could be a back door to tax increases down the line. It appears we are moments away from watching the gridlock broken in the House. I say appear is because given the last week or so, I won't be convinced. That's how I see that last number, and the gavel come down, but how many Republicans is John Boehner about to lose? That's your first question as you watch this go forward.

How many reluctant Democrats come forward? And Wolf, so then, there's the immediate questions? How does this debt ceiling spending cuts debate play out, and then, there are so many questions about how the ramifications and the ripple effect into 2012 and beyond that I think are fascinating? A lot of people will say the volume will go down after today. Maybe, the volume will go down a little bit for a few days, but this debate is not going anywhere. You'll have the super committee that's created assuming this passes, and then, you'll have a 2012 campaign in which every one of these issues is going to be front and center.

BLITZER: You know, John, we're waiting for the Speaker John Boehner. He's going to be leaving his office, walking on to the floor of the House of Representatives. We think he'll make a statement on the floor before the actual vote begins. Assuming it passes, how does he emerge politically? Is this a win for him? Is it a loss for him, the entire process going forward? Has he been strengthened, in other words, or weakened?

KING: Hey, you know what, it depends, like so many things in this town, which prism through which you view this. What is your own partisan political leanings? If you're watching the speaker here, of course, he's been weakened somewhat, diminished somewhat, because he scheduled a vote last week on Wednesday and had to delay it on Thursday, then, finally, had it on Friday. The Senate rejected that deal. Now, he comes back with this deal.

The number of Republican defections will say a lot about the speaker's standing going forward, but, Wolf, we're watching, perhaps, the most fascinating figure in Washington right now. That's not to say President Obama is not fascinating. It's not to say there aren't other fascinating dynamics, but this speaker is by DNA, by his history in the Congress, a deal-maker. Just over my shoulder is the Kennedy Caucus Room, dedicated in honor of the late Senator Edward Kennedy.

John Boehner cut some education deals with him, cut some health care spending deals with other Democrats back in the day. He is still that man. He likes to legislate. He likes to do deals. He's a practical pragmatic conservative, and yet, he's the speaker of a caucus with 87 freshmen members, many of them tea party member, who came to Washington after campaigning on one issue, this issue, the debt, and spending.

And many of them come into the room and say, Mr. Speaker, there is nothing you can do to change my mind, nothing you can do to get my vote. I don't care if I lose the next election. So, John Boehner has a fascinating walking on eggshells job every single day and especially on this big issue, spending, deficits and debt.

BLITZER: He was impressive I thought today how the leadership, the Republican leadership in the House, they all stood next to him, behind him, Eric Cantor, Kevin McCarthy, Jeb Hensarling, all of them were there, including the chairman of the Budget Committee, Paul Ryan, endorsing what he was saying. So, at least, that new breed leadership, they were all with them, but potentially, some of them could have split with them.

KING: They could well have, Wolf, but again, they won the last election. Remember, the last election in which the American people spoke was 2010. That's why the Republicans think they're right on these issues. Maybe, public opinion has changed. Maybe, voters view it differently, but they won and won big in the 2010 election.

That's why they think they're right in this debate, but they also have a burden of responsibility now that they won that Election Day are part of the governing of the country now. They're not the minority anymore. In divided government, you have a Democratic president and the Democratic Senate, but the voters, also, in 2012 will decide whether they like a Republican house, and in the middle of America they wanted to see a deal, look at any public opinion polling, even most Republicans wanted to see a compromise.

And so, you have the governing pressures on that leadership team and that is why they cut this deal. You also have a lot of political pressure on that leadership which makes selling the dealing so hard. That's why I'm so fascinated to watch this roll call play out. Mr. Boehner will get most of his Republicans. Will he get a big majority? Will he get it overwhelming? He lost nine on cut, cap, and balance.

He lost 22 on the deal on Friday. Will he lose more than 22 Republicans on this vote? I think that's probable, but that's one of the reasons we're all watching this play out, because it is a huge policy debate for the country and for the international economy. It's also just a fascinating political story -- Wolf.

BLITZER: John is going to be all over this story reporting tonight live from Capitol Hill on "John King USA." That comes up at the top of the hour for our North American viewers. John, thanks very much.

We're standing by. We're getting ready to hear from John Boehner, the speaker of the House of Representatives, on the House floor. They're still doing this quorum call in the House. The vote getting ready to start momentarily. Our live breaking news coverage continues right here in the SITUATION ROOM.


BLITZER: You're looking at live pictures from Capitol Hill right now. The quorum call. It's over, but the real vote, the vote on raising the nation's debt ceiling momentarily expected to begin. We'll, of course, have live coverage here in the SITUATION ROOM. They need 216 votes. Once the votes start, we will watch to see if they get it. In the meantime, let's bring back Gloria Borger. She's here, our chief political analyst. Richard Quest is joining us from London. He's been in Washington all day. Before I get to you, Richard, Gloria, this vote, we assume -- we assume that it will pass 216 votes, but you know what? Assumptions in this day and age not necessarily always good to have.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. You have to believe that they wouldn't call the vote, Wolf, unless the speaker thought that he actually had the vote, and what I've been told in my reporting today is that the minority leader, Nancy Pelosi, has enough votes that if it were really a problem, I think the Democrats would push it over the line, but, you know, some -- a senior administration official said to me, now, it would be an embarrassment for John Boehner to get less than 160 votes which would be sort of two-thirds.

BLITZER: 160 Republican votes.


BLITZER: Out 2of the 240 Republicans in the House.

BORGER: Right. Right. A 121 would half be half of this caucus, so when we look at this vote now, it'll be really interesting to see if he -- what percentage of his own caucus he gets.

BLITZER: Richard, did you see what Vladimir Putin, the prime minister of Russia said today? He said supposedly the United States, he said, is a parasite.


BLITZER: On the global economy right now. What is he talking about?

QUEST: Not only a parasite on the global economy, but the mastery of the dollar. He really laid into it. He was in a youth rally, and he said he thanked the fact that it looked as if common sense was going to prevail. What he talked about and what he meant was the enormous amount of resources, capital, that the U.S. does suck in to keep paying down the budget deficit, but don't forget. Russia is also a huge owner of U.S. treasury bonds, along with China, Japan and other trading partners.

BLITZER: And some of the Arab countries, in Saudi Arabia, in United Arab Emirates, some of those countries. It's hard to believe in this day and age, Russia, which used to be a pretty poor country, owns a lot of U.S. treasuries.

BORGER: Sounds like he's going to join the tea party --

QUEST: It's amazing what facile fuels underneath will do --

BLITZER: Especially with the price of a barrel of oil is going up. BORGER: But you can have a debate with Putin about the messiness of Democracy and what a good idea it is, actually, but I don't think he wants to go there.

QUEST: Listen, I want to say one thing on your numbers, by the way, of what we get tonight, if it passes. The markets don't really mind too much. The global markets today just want a deal. We saw the fragility, Wolf, of just how bad things are out there.

BLITZER: The Asian markets moved up immediately once the president announced an agreement last night. The European markets did relatively well, but the U.S. markets, you know --

QUEST: Manufacturing number.


QUEST: It showed how weak the economy is.

BLITZER: Here's John Boehner, the speaker of the House, walking over to the floor of the House of Representatives. He's going to be walking by some microphones. You know what, I just want to listen in and see if he says anything. Let's pause and listen as John Boehner walks by.


KATE BOLDUAN, CNN SPEAKER CONGRESSIONAL CORRESPONDENT: Speaker Boehner, are you confident you have the votes tonight?


BLITZER: All right. We saw Kate Bolduan, our Congressional correspondent, asking the question. He gave a little smile, gave a little nod. He seemed confident that he has the votes, even though, he didn't say anything, Gloria, you could see the body language.

BORGER: He's good at that. He's going to walking by the cameras and kind of nodding. He's been around the block a while.

BLITZER: He knows what he's doing on this one. You know who's one of the -- if this passes the House tonight, the Senate tomorrow, Mitch McConnell, the Republican leader in the Senate, he's sort of an unsung hero in the United States avoiding going into default potentially.

BORGER: To some a hero, to some, not so much.

BLITZER: Those who didn't want the United States to go into default, those who wanted the debt ceiling raises.

BORGER: But also, conservatives got very angry at Senator McConnell, because his original plan came up with kind of a gimmick to get around voting on the debt ceiling the second time.

BLITZER: Well, the final plan has a little gimmick, too. BORGER: A vote of disapproval, but it didn't contain deficit reduction in it. And so, conservatives were calling him a traitor saying what this is all about is deficit reduction and where is it? And so, he kind of had to back off of that, but in the back rooms, he's been the person talking to Joe Biden three or four times yesterday, talking to the president of the United States, trying to get this done, dealing with his Senate and dealing with John Boehner.

BLITZER: You know, it's interesting that, you know, you've been watching this whole unfold from Europe, from London, Richard, now, you're here in Washington. You've been here for, what, a day or two?

QUEST: Absolutely.

BLITZER: Does it look different from Washington than it does from London?

QUEST: Breathtakingly so. Absolutely.

BLITZER: Explain.

QUEST: Because here in the hot House of the arguments, when you're looking from the outside looking in, you think these people are a bunch of lunatics who are playing fire with dynamite. You get here and you start to hear the arguments and you realize what both sides believe they're doing, believe they're doing is fighting for the heart and soul of the American economy and the American future as they see it.

And it's only when you get here. When I was talking to people on the mall today, Americans who are flabbergasted. In my coverage for international bureaus, I've been speaking to people from east coast, west coast, to Midwest, and they are just horrified by what's happening.

BLITZER: Expect (ph) that a lot of people.

BORGER: And I think, you know, in the end, in 2012, voters are going to have to decide.

QUEST: No question.

BORGER: Voters are going to have to decide who behaved well, but I would argue right now if you step back and took a look at this. When Barack Obama started this, he said I want a clean debt ceiling. I don't want any deficit reduction on it. So just on that point, you would have to say that the tea party, for better or worse, actually pushed the Republican establishment to fight for deficit reduction.

BLITZER: You know what? I saw a replay John Boehner, the speaker of the House, walking past our microphones, our cameras, when Kate Bolduan, our congressional correspondent shot him that little question.


BOLDUAN: Speaker Boehner, are you confident you have the votes tonight?


BLITZER: Adorable little -- look out -- he smiled. He was -- he said yes.

QUEST: I saw a nod. I saw a little --

BORGER: We'll find out soon enough, right?

BLITZER: What did you say?

QUEST: I saw a nod.

BLITZER: A nod. Yes, of course. It was adorable. I thought.

BORGER: I will make any such --

BLITZER: All right. Here, they've got the quorum call. They're going to get the start of this vote right now.


UNIDENTIFIED MALE: Recorded vote (INAUDIBLE) will rise. Sufficient number having arisen a recorded vote is ordered. Members will record their votes by electronic device. This will be a 15- minute vote.


BLITZER: All right. It's official now, 15-minute members -- 435 members of the House of Representatives. There are not 435 members right now. There are two or three vacancies for illness, and of course, a couple members are not there right now. They need 216 votes. The voting has now started, 14 minutes, 43 seconds left already. You've got 54 yeas and 16 nays. We're going to watch this very, very closely as we see what's going on.

Just keep it on the screen. I think our viewers are going to want to see. The magic number, the magic number right now is 216. Once they get to 216, it could pass, but if there's time remaining, and you see at the bottom of the screen the time remaining, members can still change their votes. In other words, it's not official until there's a zero as far as time remaining is concerned, but they're moving right now.

Ninety-seven Republicans have already voted in favor. Six Democrats, the democrats are being a little slow. So far, 103 in favor, 58 oppose, but there's still 266. Those numbers are changing dramatically. What are you - Gloria, as we look at this, what are you going to be looking for the closest?

BORGER: I'm going to look at -- first of all, you lock at the nay votes in The Republican Party which is interesting. There's a certain choreography that goes on here because they're probably some people who would like to vote nay because they took that, you know, they think there aren't enough cuts in this, but if the speaker says he needs them, they're probably saying, OK, we'll give you our vote absolutely.

And you know, it's interesting, you're going to want to see how many Democrats, Nancy Pelosi can get for this. Right now, --

BLITZER: It's like 27 (ph) Republicans have already voted against it, 28 Democrats, but the Democrats are, obviously, waiting to see what happens before they vote. There's very few of them have voted so far. I'm going to keep this up on the screen. I want our viewers to watch the tally as it goes forward. We're not going to leave this picture. I want to bring Jack Cafferty in, because Jack, you asked our viewers a rather provocative question, and you got a ton of e-mail response.

JACK CAFFERTY, CNN CONTRIBUTOR: The question this hour is, do you buy the government's so-called solution to the debt ceiling crisis? I got thousands of e-mail responses, and most of you recognize it for what it is. It's not the solution to anything.

Chris in New Jersey, "No. It was the easy way out that doesn't reform much of anything. The Republicans should have offered up tax reform by way of a fair tax. And Democrats should have allowed entitlement reform. These guys are such phonies. I darn near barf (ph) every time they try to convince us that they have solved the problem. Hells bells, how stupid do they think we are?"

Andrew says, "The can just got kicked a little further down the road or further down the election cycle, so to speak. Our elected leaders don't care about the long term fiscal insolvency of this country. They care about November 2012 and keeping our heads above water for a few minutes longer."

Kait writes, "Baloney. Roll back taxes to what they were under Clinton. The rich need to pay their fair share."

Rob in New York writes, "No. The problem of too much borrowing, too much spending, and too much printing of money cannot be solved with more borrowing, more spending, and more printing of money."

Eric says, "I think we should borrow some money from China to fund a nationwide party, celebrating the resolution of our debt crisis. Why isn't your segment longer, Jack? Thank you."

And Jim writes, "Jack, I'll buy that. Can I put it on my credit card?"

If you want to read more on this, thousands of e-mails and most of you recognize this exactly for what it is. You know, it's a three- card money game, one of many they play on us. You go to my blog,

BLITZER: Jack, thanks very much. All right. Look at this, the roll call is happening on the floor of the House of Representatives right now. A 148 yeas, so far, in favor of this debt ceiling legislation, 84 opposed, still 11 minutes or so to go before time runs out. a lot of members still have not voted. John King is up on Capitol Hill getting ready for "John King USA" as well. John, it looks like it's moving very quickly in favor, but Democrats are sort of waiting and waiting before they actually push that button?

KING: That's a planned strategy, Wolf. The Democrats have decided if we have to eat our peas and vote for something we don't really like, we'll be there at the end, because they have a Democratic president, and they can't embarrass him. They have a responsibility in government.

They realize many of them are going to have to vote for this, but they politically want the Republicans to carry the water, to carry the ball, and to get this compromise at least close to the finish line before a number of Democrats are willing to push it over. If you look right there, 44 Republicans have voted no already. You mentioned they can change their vote as this sends up.

John Boehner lost 22 on Friday night with his compromise plan. Only nine Republicans voted no on the original cut, cap, and balance plan. So, what you see here are obvious growing Republican dissatisfaction with this compromise. Why? Some conservative groups had said, it could open the door to tax increases when you have that super committee. Some of them don't like this deal, because it does possibly has a trigger that would call for even more defense cuts.

So, some conservatives don't like it. You see that in here, but the way this is playing out right now, there's every reason to believe, at the end there, will be enough votes, but the drama, especially of the Democrats holding back and watching, Wolf, that's part of the great political theater. Many people at home might say, I really don't need all the theater. This is an important policy question for the country.

It could mean interest on my credit card, but that's the way Washington works. They're going to play this one out. This is a big drama in a new Washington where the tea party is, as you were just talking about, having a dramatic influence. This is one of those votes that will be remembered. Elections have consequences.

And in 2010, the American people sent a Republican house. They are getting a piece of that over the next 24 hours as this is debated in the House and then in the Senate. It's a very, very different Washington.

BLITZER: And there's no doubt that some of those Republicans who are voting in favor are very concerned right now that they could face a primary challenge from some tea party activists in the Republican Party and others because of their vote in favor. Richard Quest, as we watch this unfold, right now, 156 in favor. The magic number is 216. They're still not there and 95 oppose. You see 47 Republicans, so far, oppose, 48 Democrats opposed.

Compare what's happening here in the House of Representatives to what the House of Commons in a critical vote would be like?

QUEST: First of all, you would not have anything like that telemetry of the vote. You don't know as they're going through the lobby, making their votes. You have no idea how the vote is going to go until the speaker announces the results. You may have a feeling, but you certainly don't have anything like this level of detail.

BLITZER: Interesting. Gloria, you know, it's fascinating. Emanuel Cleaver, the chairman of the Congressional black caucus, he was here just a little while ago. He said he hates this. He hates this legislation, but he wasn't really 100 percent convinced he would vote against it. He said if this vote is needed to protect the president, he would vote in favor of it, but he's waiting and waiting like so many other Democrats.

BORGER: So, look at all the Democrats who are holding back, you have 126 Democrats holding back, and you see the speaker now has more than half of his caucus there. I think about 120, 121 is half his caucus. He's got 144, 50 nays, and I think right now, those nonvoters are kind of split, and it will be interesting to see if he gets up to 160, but Democrats, they're hanging back.

BLITZER: There are only 45 Republicans haven't voted yet. A 126 Democrats haven't voted yet, and so, they're waiting. They want the Republicans, I guess -- John King's up on the hill. John, I guess, some of those Democrats want the Republicans to sweat a little bit. It's hot enough in Washington right now, but they want them to sweat inside the capital?

KING: They do, Wolf, and some of this is just the politics of the moment, and some of this is look, it's just been months since Nancy Pelosi had to hand off the gavel to John Boehner. Many Democrats still have a little bit of sour grapes about not being in charge of the House.

Many Democrats also, Wolf, have a large memory, and I don't have the vote count in front of me right now, but a lot of Democrats think when George W. Bush was president, in a Republican administration, when the economy was on the verge of collapse, and they came up with the big TARP, Toxic Asset Relief Program, the bailout plan that so many Americans don't like, that so many political analysts think contributed to 2010 and the Democratic devise.

Many Democrats remember Republicans bolting from their own president, refusing to support that bailout plan, and the Democrats say we had to help President Bush. We had to be the responsible party to get that over the line. Now, maybe, if you're watching at home, you view that debate differently, but that is how some of these Democrats remember.

So, on this big question, they're going to let Republicans get these three quarters, maybe four-fifths (ph) of the way up the hill before they deliver the final votes.

BLITZER: All right. John is going to continue our coverage on "John King USA" right now from Capitol Hill. For our viewers in the United States and around the world, don't leave. This vote is continuing -- John.