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Senate About to Vote on Debt Deal; Minority Leader Kentucky Republican Senator Mitch McConnell Delivers Remarks From Senate Floor; Majority Leader Nevada Democratic Senator Harry Reid Delivers Remarks From the Senate Floor; Senate Passes Debt Deal; Wall Street Reacts

Aired August 2, 2011 - 11:55   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: It will wrap up a really tumultuous few weeks, Martin. As you now, the Senate getting ready to do what the House of Representatives did last night and pass this debt ceiling bill in the next few minutes. We're standing by to hear from the Republican leader.

Oh, there's Mitch McConnell right now, the Republican leader. Let's listen in to hear what he says. Then Harry Reid, the majority leader, will wrap things up before the vote.

(JOINED IN PROGRESS)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: -- the opposite was true. The push and pull Americans saw in Washington these past few weeks was not gridlock. It was the will of the people working itself out and a political system that was never meant to be pretty.

You see, one reason America isn't already facing the kind of crisis we see in Europe is that presidents and majority parties here can't just bring about change on a dime, as much as they might like to from time to time. That's what checks and balances is all about. That's the kind of balance Americans voted for in November.

The American people sent a wave of new lawmakers to Congress in last November's election with a very clear mandate, to put our nation's fiscal House in order. Those of us who had been fighting the big government policies of Democratic majorities in Congress welcomed them into our ranks. Together, we've held the line and slowly but surely, we've started turning things around.

That's why those who think that no problem is too big or too small for government to solve are very worried right now. They're afraid the American people may actually win the larger debate we've been having around here about the size and the scope of government, and that the spending spree may actually, actually be coming to an end. They can't believe that those who stood up for limited government and accountability have actually changed the terms of the debate here in Washington. But today, they have no choice but to admit it.

Now, I know that for some of our colleagues, reform isn't coming as fast as they would like, and I certainly understand their frustration. I too wish we could stand here today enacting something much more ambitious, but I'm encouraged by the thought that these new senators will help lead this fight until we finish the job. And I want to assure you today that although you may not see it this way, you've actually won this debate.

In a few minutes, the Senate will vote on legislation that represents a new way of doing business in Washington. First, it creates an entirely new template for raising the nation's debt limit. One of the most important things about this legislation is the fact that never again will any president, from either party, be allowed to raise the debt ceiling without being held accountable for it by the American people, and in addition to that, without having to engage in the kind of debate we've just come through.

Because you see, Mr. President, whoever the next president is will be back asking to raise the debt ceiling again. It will provide another opportunity for us to focus on the subject raised by the request to raise the debt ceiling.

So we'll be back at it, probably in the early part of 2013, trying to continue to make progress toward reducing the size and scope of government and reducing our spending.

This kind of discussion isn't something to dread. It's something to welcome. And while the president may not have particularly enjoyed this debate we've just been through, it was a debate that Washington very much needed to have.

As for the particulars, this legislation caps spending over the next 10 years with a mechanism that ensures that these cuts actually stick. It protects the American people from government default that would have affected every single one of them in one way or another.

It puts in place a powerful joint committee that will recommend further cuts and much-needed reforms. It doesn't include a dime, not a dime, in job-killing tax hikes at a moment when our economy can least afford them. And crucially, it ensures the debate over a balanced budget amendment continues and that it actually gets a vote.

Now, this is no small feat when you consider that just last week, the president was still demanding tax hikes as part of any debt ceiling increase, and that as recently as May, the president's top economic adviser said it was "insane" for anybody to even consider tying the debt ceiling to spending cuts. It's worth noting that two- and-a-half months later, that adviser is no longer working at the White House, and the president is now agreeing as a condition of raising the debt ceiling to trillions of dollars in spending cuts.

So let me be clear. The legislation the Senate is about to vote on is just a first step, just a first step, but it is a crucial step toward fiscal sanity and its potentially remarkable achievement given the lengths to which some in Washington have gone to ensure a status quo that's suffocating growth, crippling the economy, and imperiling entitlements.

Now, we've had to settle for less than we wanted, but what we've achieved is in no way insignificant. And we did it because we had something Democrats didn't have.

Republicans may only control one-half of one-third of the government in Washington, but the American people agreed with us on the nature of the problem. They know that government didn't accumulate $14.5 trillion in debt because it didn't tax enough. And if you're spending yourself into oblivion, the solution isn't to spend more, it's to spend less.

Now, neither side got everything it wanted in these negotiations, but I think it was the view of those in my party that we try to get as much spending cuts as we could from a government we didn't control. Our view was we would get as much spending reduction as we could from a government we didn't control, and that's what we've done with this bipartisan agreement.

This is not the deficit reduction package I would have written. The fact that we're on a pace to add another $7 trillion to the debt over the next 10 years is certainly nothing to celebrate. But getting it there from more than $9 trillion, the president continued to defend until recently, is no defeat either. And slowing down the big government freight train from its current trajectory would give us the time we need to work toward a real solution or give the American people the time they need to have their voices heard.

So, much work remains. And to that end, our first step will be to make sure that Republicans who sit on the powerful cost-cutting committee are serious people who put the best interests of the American people and the principles that we have fought for throughout this debate first.

But before we move to the next steps, I would like to say a word about some of those who made today's vote possible. And I'll start with Speaker Boehner.

It should be noted that he helped set the terms of this debate by insisting early on that we would oppose any debt limit that didn't include cuts that were greater than the amount the debt limit would be raised. And he stuck to his guns. The Speaker and I worked shoulder to shoulder over the past few months, and it's certainly been a pleasure. He's been a real partner, and I assure my colleagues we wouldn't be here without him.

BLITZER: All right. The minority leader, Mitch McConnell, is praising those who helped him get this deal done with the president of the United States. What we are seeing now is Mitch McConnell speaking. He's wrapping up the debate. Then Harry Reid, the majority leader, he will speak for final comments.

Then there will be the formal roll call in the U.S. Senate on this debt ceiling agreement, raising the nation's debt ceiling. That roll call will go on for at least 15 minutes, probably closer to 20 minutes, after which we expect it will be passed. And within minutes after that, the president of the United States will go into the Rose Garden and address the nation, praise what has just happened.

We're going to have extensive coverage of all of this. Let's continue to listen to Mitch McConnell and then Harry Reid.

MCCONNELL: -- and the vice president. And everyone on their staffs who believed as we did that despite our many differences, we could all agree that America would not default on its obligations.

It's a testament to the good will of those on both sides that we were able to reach this agreement in time. Neither side wanted to see the government default, and I'm pleased we were able to work together to avoid it.

Now, this bill does not solve the problem, but it at least forces Washington to admit that it has one. The bill doesn't solve the problem, but it forces Washington to admit that it has one. And it puts us on a path to recovery, where -- nowhere near where we need to be in terms of restoring balance. But there should be absolutely no doubt about this: we have changed the debate, we're headed in the right direction, and people are wondering how it happened.

Well, it happened because the American people demanded it. So, in the end, we're back to where we started.

The only reason we're talking about passing legislation that reins in the size of Washington instead of growing it is because the American people believed they could have a real impact on the direction of their government. They spoke out and we heard them. And it's only through their continued participation in this process and lawmakers who were willing to listen to them that we'll complete the work we've begun.

As Winston Churchill once said, "Courage is what it takes to stand up and speak." Courage is also what it takes to sit down and listen. I can't think of a better way to sum up this last year and, in particular, these last few months right here in Washington than that.

The American people want to see accountability and cooperation in Washington, and they want to see that we're working together to get our fiscal House in order. This legislation doesn't get us there, but for the first time in a very long time, I think we can say to the American people that we're finally facing in the right direction. And for that, we have them to thank.

UNIDENTIFIED MALE: The majority leader, the Senator from Nevada.

BLITZER: This is the majority leader, Harry Reid. He's about to speak.

You know what? We should listen to him as well. then we'll assess what's going on. John King is here, Gloria Borger is here.

Stand by. Let's listen to harry Reid.

(JOINED IN PROGRESS)

SEN. HARRY REID (D-NV), MAJORITY LEADER: -- Congress make some historic, important decisions, and avert a default on our debt that has been so concerning to all of us for such a long period of time.

Our country was literally on the verge of a disaster. It was on the brink of a disaster. One day left, we were able to get together and avert that disaster.

Now, this compromise that we've reached is not perfect, and I feel it's important -- Mr. President, can we have order, please?

UNIDENTIFIED MALE: The Senate will please come to order. We welcome all our visitors and want to make it clear that any disturbance or manifestation of approval or disapproval is prohibited under the Senate rules.

The majority leader may proceed.

REID: I appreciate the kind words that my counterpart, Senator McConnell, has stated on the floor. I have gotten to know him and Speaker Boehner a lot better this past month or two. Especially the Speaker. And even though I disagree vehemently with the direction the Speaker's legislation took, with no bipartisan support at all, it is not the product we have here.

The product we have here is one of compromise. The winners, without trying to outline who the winners are, there is principally one winner through all this, and it's the American people.

We settled for less than we wanted. So did my friend. The leader of the Republicans settled for less than they wanted. But that's the way legislation works. That's the way compromise works. But I can't let go without responding to my friend who boasted about in his own way about the new senators and the new members of Congress who came here.

I welcome them all, but a result of the Tea Party direction of this Congress the last few months has been very, very disconcerting and very unfair to the American people. It stopped us from arriving at a conclusion much earlier, and we must go forward. And also, Mr. President, I recognize we have to do more. Of course we need to do more. And that's why we have the joint committee set up that I'll talk about in just a minute.

The American people are not impressed with the no new revenue. The vast majority of Democrats, Independents and Republicans think this arrangement we've just done is unfair because the richest of the rich have contributed nothing to this. The burden of what has taken place is on the middle class and the poor.

My friend talks about no new taxes. Mr. President, if their theory was right, the huge taxes that took place during the Bush eight years, the economy should be thriving. These tax cuts have not helped the economy.

The loss of eight million jobs during the Bush eight years, two wars started unfunded, all borrowed money, these tax cuts, all on borrowed money. If the tax cuts were so good, the economy should be thriving. If you go back to the prior eight years, during President Clinton's administration, 23 million new jobs were created. We had when President Bush took office a surplus over 10 years of $7 trillion. That has evaporated. And now we're talking about a $14 trillion debt.

The compromise we reached is imperfect. And we're going to send legislation to the president today that will not only avert a default, but make significant deficit reductions.

Is it enough? I repeat, no, not enough. This legislation will provide our economy with stability is desperately needs.

And to assure Congress that we will continue working -- and I said this yesterday, I say it again -- I appreciate my friend, the Republican leader, putting his arms around the idea that I came up with to have this joint committee. They have worked in decades past. There's no reason it can't work now.

No super majority. Each leader will appoint three, a committee of 12.

We need to do something because the trigger that kicks in is very, very difficult. We need to do this. And it has to be one that's fair.

The American people demand fairness. It can't be more cuts to programs that have made this country what it is. There must be a sharing of sacrifice.

It's really unfair for billionaires and multimillionaires not to be contributing to the arrangement that we've just made, but they're not. My friends, the Republicans, held firm. And no revenue, which is really too bad.

We need to have a fair approach to this joint committee, and I'm confident we will do that. And the one reason we're going to do that is because the trigger mechanism that kicks in.

Now, this committee that was going to have -- be appointed, the members, I say here, must have open minds. We've had too much talk the last few days of Republicans as early as this morning, Republican leaders in the Senate, saying there will be no revenue.

That's not going to happen. Otherwise, the trigger's going to kick in. The only way we can arrive at a fair arrangement for the American people with this joint committee is to have equal sharing.

It's going to be painful. Each party, if they do the right thing, it's going to be painful for them because, to be fair, we have to move forward. There has to be equal spending cuts, there has to be some revenue that matches that.

The legislation's going to be sent to the president today. It ends a standoff that ground the work of Washington to a halt this summer. So Congress must now return to its most important job, creating jobs.

Now, Mr. President, there are things we can do to create jobs. We know that. We passed out of here quickly the patent bill, 270,000 jobs we're told that legislation will create. So we'll move to that the first time we get back after the summer break. We're going to move to the patent legislation. Important we do that.

There are other things we can do. There are things out there that should be bipartisan in nature that we can do.

We have a highway bill that's due. I have spoke to the chairman of the Finance Committee today. There are ways we can fund that that should be in keeping with a bipartisan approach to this.

The important part, the important thing that we have, Mr. President, with these infrastructure jobs we need so, so very much, is that for every billion dollars we spend in infrastructure, we create 47,500 high-paying jobs. A lot of other jobs spin off from that.

Now, these aren't jobs that you have $1 billion and you have the -- all these jobs are jobs that the federal government does. These are monies that go to the private sector to build roads, bridges and dams. We need to do that and we can do that.

Clean energy jobs, they are changing the face of this nation. We need to do that.

I'm optimistic and hopeful that the spirit of compromise that has taken root in Washington over the last several days will endure. I hope my Republican colleagues will join forces with Democrats to put America back to work, and not be looking for winners in political parties, but let's start looking for winners with the American people.

We made progress toward cutting our goal. We made progress toward our goal of cutting the deficit spending that we have around here.

This nation still faces a jobs deficit as well. There is no issue more important to the American people than job creation. Until every American who chooses to work can find a job, our job is undone.

So we're going to continue making jobs our number one priority. We ask the Republicans to join with us in this regard.

Adlai Stevenson once called politics "the people's business, the most important business there is." That's what Adlai Stevenson said.

So, Mr. President, it's time for Congress to get back to doing the people's business, creating jobs. Nothing is more important than that.

Mr. President, I ask for the yays and nays on my motion to concur.

UNIDENTIFIED MALE: Is there a sufficient second? There appears to be a sufficient second. The yays and nays are ordered and the clerk will call the roll.

UNIDENTIFIED FEMALE: Mr. Akaka?

Mr. Alexander?

UNIDENTIFIED MALE: Aye.

UNIDENTIFIED FEMALE: Ms. Ayotte?

BLITZER: All right. So there you have it. The majority leader, the minority leader, they both wrapped up the debate.

Now the voting has started. We expect it will continue for about 15 minutes. Sometimes it drags on a little bit longer, maybe 20 minutes.

After it passes -- and we assume that they have the necessary 60 votes to pass this legislation -- within a few moments the president of the United States will walk into the Rose Garden over at the White House. He will not sign this legislation into law, because the paperwork, the bureaucracy, that requires some time to do so. He has to sign it before midnight tonight in order to get the process going, but he will make a statement, we expect, about a 10-or-15-minute statement from the president as well.

Kate Bolduan is up on the Hill watching all of this.

Kate, I just assume, and a lot of people have been watching, looking closely at the numbers, they have well over 60 votes that will support what Mitch McConnell and Harry Reid have now proposed.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: I have been talking to leadership aides this morning, and on all sides they tell me it's safe to say that they're confident that this will pass. Of course, we always warn that you can't call the vote until the last vote is cast, but there seems to be a general understanding that the biggest obstacle, as we were talking about yesterday, was getting this bill through the House of Representatives, not so much the Senate.

So they seem confident. Of course, they're not going to call what their margin will be, but they seem confident they will pass the 60-vote threshold once this 15-minute vote comes up.

But we have heard on the floor this morning as they were debating this, Wolf, some of the similar criticisms and concerns of this compromise from both Democratic and Republican senators that we have been hearing really for the past week, really, from members on both sides of the aisle in both chambers. Republicans concerned that there aren't enough cuts, that they don't go far enough. Also hearing concern from some Republicans about this select committee, this committee of 12, that they think it puts too much power in the hands of too few.

And on the other side, I'm hearing from Democrats that they simply are very frustrated that the burden of these cuts fall too heavily on the poor and the middle class, rather than asking for some sacrifices, as they put it, from wealthier Americans.

So we're hearing a similar debate on the Senate floor today, but also some resignation that while it's not perfect, it's a first step. And that's why many believe that they will pass the 60-vote threshold very shortly -- Wolf.

BLITZER: Yes, within minutes. We're awaiting that. Kate, standby up on Capitol Hill.

We're going to go to Jessica Yellin, our chief White House correspondent. She's going to be in the Rose Garden getting ready for the president of the United States. But Gloria Borger and John King, they're here with us in our D.C. studios.

Gloria, what are you going to be looking for specifically in this roll call vote? Because some of these members, Republicans and Democrats who are up for reelection next year, it's a sensitive vote for them.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, yes, particularly Republicans who may be challenged by Tea Party conservatives. We know that Senator Orrin Hatch of Utah, for example, is going to vote against this, and he may be facing a challenge from a very conservative House member.

And so you're going to have to see new members, how new Tea Party members are voting. And also, it will be interesting to look at the moderate conservative Democrats in the Senate who are running or may be challenged to see whether they actually vote for this or not.

BLITZER: I think it's clear Joe Manchin, for example, the Democratic Senator from West Virginia, I think he's already made it clear he's going to vote against this.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: He doesn't like this plan. If you are from a conservative state, West Virginia -- he's a Democratic senator, former Democratic governor -- but West Virginia, if you look at the presidential politics of late, has been trending conservative. The general consensus among the political strategists is if you are Republican or a conservative Democrat, the safe vote is to vote no.

I talked to Sherrod Brown last night, a more progressive Democrat from the state of Ohio. He is going to vote yes. Why? He wants to say he voted for deficit reduction.

Now, liberal groups are angry with him because they think this super committee opens the door to Social Security cuts, opens the door to Medicare cuts. But we are seeing here -- you just saw Mitch McConnell and Harry Reid disagree.

Mitch McConnell said you might not believe it, my Tea Party friends, you might vote no, but you won here. You won, because we have changed the tone, the tenor. And the direction of the debate in Washington is now about cutting spending. Harry Reid got up and said he finds it very, very disconcerting, the impact of the Tea Party. Well, we'll see how this one plays out. But on the point of impact, Mitch McConnell's right.

BORGER: Yes.

KING: Those lawmakers have changed the debate in Washington.

You mentioned Senator Hatch. This is his speech, 1,286 words. I counted them -- I used a computer -- to say why he's voting against it.

Remember, Orrin Hatch has a history. We all know Senator Hatch. He used to do deals with Ted Kennedy, the late senator from Massachusetts. He is a deal-maker. But his best friend in the Senate, Robert Bennett, was defeated last year by a Tea Party candidate, Mike Lee, who is now a United States senator in Utah.

Twelve hundred and eighty-six words could have been summed up in 14: I saw what the Tea Party did to my friend Bob Bennett last year. He's not going to vote yes.

BORGER: And you can't really overestimate the sea change that's going on right now in Washington, because you're right, these Tea Party conservatives have really shifted the debate. Remember, Barack Obama when he started this and said I want a clean debt ceiling, I don't want --

(CROSSTALK)

BLITZER: Which has happened, what, 70 times in the past?

BORGER: Right. And Mitch McConnell also made the point, and I think he's absolutely right, is he said the template for the debt ceiling has now changed because it's always now going to be associated with deficit reduction.

We've been in the process of stimulus spending for the last couple of years to try and get the economy jump-started. Now we're going to a new era of real fiscal restraint, and economists disagree, actually, about whether that's the right thing to do to the economy. But we are clearly shifting right now.

KING: No question about the politics. Gloria is right.

The economists say, so, you're going to slow federal spending at a time the economy is weak? Whoa. Isn't that counterintuitive? Don't you want more federal spending to help? Political economics say cut spending now.

Wolf, just 10 days or so ago, go back and find the president's radio address. He said it would not be fair, it would be unfair, his words, to sign a debt ceiling agreement that did not include some revenues coming from more wealthy Americans.

Well, the president today will sign a debt ceiling agreement that does not guarantee any revenues coming from anybody. They could come from the super committee in the second round of this, but they don't guarantee it.

The president had to compromise here even though the Democrats control the White House, because Republicans control the House and they effectively have veto power in the United States Senate because it's close enough. All of these debates are going to now carry over.

This is going to quiet the debate in Washington for 24, maybe 48 hours. The super committee will get set up.

We will go through this around Thanksgiving and debate into December. More spending cuts, possible tax increases, Social Security, Medicare.

And guess what? We flip the calendar, we're in 2012.

The American people, I hate -- I get angry e-mails about this, this is what the voters have done with divided government. In 2008, they sent a left of center president to Washington and a big Democratic majority. In 2010, they said never mind and sent a very conservative House and more Republicans to the Senate. Maybe 2012 will be the tie-breaker, or maybe we will get more muddle and confusion.

BORGER: Well, and if nothing gets done and we end up with some other kind of gridlock, or the public doesn't like the cuts that are enacted, then maybe they will flip again. The public has been quite fickle and made it quite clear we want you to work together. And both sides say, well, that's what this has been about, but we'll have to see what happens again at Thanksgiving.

BLITZER: And Gloria, as John says, we're getting into the presidential election season. I think with the exception of Jon Huntsman, the former Utah governor, former U.S. ambassador to China who supports this debt ceiling agreement, all the other major Republican candidates, including Mitt Romney, oppose it.

KING: Yes, all said no. Newt Gingrich said he would have a plan of his own, which is essentially saying no, he could not embrace the plan on the table. His reaction, a little bit more nuanced.

But yes, with the exception of the former governor of Utah, Jon Huntsman, who is trying to position himself as -- I'll call this the old John McCain, the centrist, pragmatic conservative in the middle -- to the right, but in the middle -- he says this is a pretty good deal, it's a down payment. Governor Huntsman says essentially what Senator McConnell just said -- not as good a deal as we would like, but it's a step in the right direction and you have to take that.

The other candidates -- again, this gets back to the point, look at our own poll. The American people, in our one-day poll yesterday, maybe they haven't processed this yet, but the initial reactions are, I don't really like this deal.

It is the consensus of especially on the Republican side that as this deal gets older, just like the bailout, just like TARP, it will become less favorable with the public. So the safer vote now especially for a conservative is no.

BLITZER: Well, let me just reset what's going on so our viewers know what's going on.

We're watching the floor of the United States Senate. They started their roll call just a little while ago after wrapping up the debate on this debt ceiling agreement.

We expect it will pass fairly soon and then they will hit the gavel, they will declare it passed. The House of Representatives passed it last night. It will go to the White House for the president's signature.

Within minutes after this roll call is complete, the president will then go into the White House Rose Garden and make a statement to the nation. We expect it to be about 10 or 15 minutes.

The president will outline what has happened, why he supports this, but then he's going to try to move the story forward a little bit and get into the bigger issue of a frail U.S. economy and the need for job creation. He'll have some ideas, and I think he will put them forward at that point on what the country needs to do.

We're watching all of this. We've got our correspondent, Kate Bolduan, on Capitol Hill. Jessica Yellin will join us shortly from the Rose Garden. We are watching what's happening on Wall Street as well.

Gloria, pick up this notion that there's obviously going to be between now and Thanksgiving, a real intensification of this debate, because it hasn't been -- they may have agreed to keep the debt ceiling as a non-issue between now and the start of 2013, but the whole issue over taxes, entitlement cuts and all this, it's going to continue.

BORGER: It continues. And what's interesting about what John was saying about the presidential candidates here, it's as if they have been living in an alternate universe, because congressional leaders, Republican congressional leaders, were saying we have to get this debt ceiling done. But when you're a presidential candidate, you're sort of freer to say no, no, I would vote against the debt ceiling.

What the presidential candidates are doing are playing to the base of the Republican Party and they're saying no, no, no. But they're free to do that, because you know what? A lot of them are governors, et cetera, except for Michele Bachmann, who obviously voted against this.

But in 2008, you had senators running who had to vote for the TARP bailout, and so it's a different dynamic now.

KING: But there was a Senator in the Bush administration, a Democratic senator from Illinois -- BORGER: I heard of him, yes.

KING: -- who said it would be a bad idea to raise the debt ceiling.

BORGER: I do. I heard of him.

KING: When you're being president --

BLITZER: That was then.

BORGER: That was then.

KING: Well, we've seen this. We've seen this.

Candidates for president, when they become president, often change their opinions. It will be interesting to watch, should a Republican win the next presidential election, how they navigate the next debt ceiling increase.

But in the short term, Wolf, this argument is not ending. This super committee, you heard both senators talk about naming their members. The House leaders have to name members, too.

It's even, six senators, six House members; six Democrats, six Republicans. They're going to have to deal with all the issues we've gone through the last two weeks.

What do we cut? Is it defense? Is it food stamps? Is it education spending? Is it Pell grants?

Is it Social Security? Is it Medicare? Do we raise taxes? If so, on who?

This debate's not going anywhere. It's now going into this committee of 12, and then it will come back, they'll have to vote again this year, up or down, and then off to the campaign.

BLITZER: All right.

As of right now, 48 senators have voted in favor of this legislation, 16 have opposed. They need 60. That's the threshold in order to get it passed. We expect that will happen very soon.

I want to bring in Alison Kosik. She's watching Wall Street.

How is it reacting to what's going on here in Washington, Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know, you're not seeing the positive reaction that you'd think you would see. The market's been lower all day, and the Dow right now, down about 94 points, the Nasdaq off about 20.

You know, I've been talking with traders. They're surprised that by getting this uncertainty about a debt deal of the table, it hasn't created a different reaction. There was the expectation we would see stocks at least in the plus column. We're not seeing that.

I think what you're seeing is investors really worried about the broader economy. I think at this point the debt ceiling issue is kind of -- is sort of behind them now, and Wall Street's now looking forward and looking forward at the economy, and it's looking weaker.

We got that weak GDP report last week showing that economic growth is definitely slowing down here in the U.S. We got that weak manufacturing report that kept stocks in the red yesterday. And today we got more weak data on consumer spending showing that consumer spending is slowing down as well.

And then there's, of course, the jobs market. You know, just because we get an agreement through here doesn't mean that companies are going to start hiring. In fact, some experts say the deal will most likely have little effect, if any, on hiring growth.

But this is what Wall Street wants to see. It wants to see hiring growth, it wants to see jobs created. We're going to get a better picture of that on Friday when the big government jobs report comes out -- Wolf.

BLITZER: Just want to point out, 56 in favor of the legislation so far, 19 opposed. So the yays, 56; the nays, 19.

They are getting close to 60, which is what they'll need. They'll get that very soon.

You know, a lot of analysts, Alison, have suggested to me that the markets, they basically discounted, they basically assumed there was no way, no way that Washington would not raise the debt ceiling, knowing the consequences of failure. They just assumed that would happen and as a result, they're not all that excited about the fact that it's about to pass -- the debt ceiling is about to go up because they figured it would -- the opposite would never happen because that would have been an economic disaster for the U.S. economy.

What, is this the seventh or eighth day in a row it looks like there's going to be a downturn on Wall Street?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It is the seventh -- this could be the eighth day, if we close lower, this would be the eighth session in a row.

Sure, I mean, stocks are being hammered, not because of the debt deal but because of what you said. Sure, the markets really understood that a deal was going to happen at the last minute. Not the last second like we are today, but you know, they did think that a deal was going to go through so that was sort of already baked into the market.

Now as you know, Wall Street once again is forward-looking. It's looking at the economy and the picture is not very bright. And that's why you've seen the market down for so many sessions in a row, Wolf. We're seeing this economic data come in, and it's just not good. Wolf?

BLITZER: All right, we just hit the 60 mark so it has passed. They're not going to change the votes. This is not a huge surprise. There are 60 senators who have now voted yay in favor of this legislation. So the legislation will pass.

They will wrap up the roll call in the Senate, they will hit the gavel and within a few moments, we will hear directly from the president of the United States.

On Friday, John, the jobs market, the jobs numbers for July are going to come out. I suspect it's not going to be a huge number.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's expected to be anemic. That's why Alison makes a very critical point about the economy and the politics of the economy going forward. The president will focus on this.

This debt ceiling, we avoided what some thought would be a catastrophe. We avoided default, avoided for people watching at home their mortgage or credit card rates going up. But the unemployment rate is 9.2 percent. It is expected to stay stagnant like that. Since FDR, no president has been re-elected with the unemployment rate above 7.2 percent. There is no question it will be above that when Barack Obama asks the American people to give him four more years.

So, how does he try to convince them he's doing everything he can to help create jobs? Well, this deal ties his hands in some ways, because the president says let's have an infrastructure bank. Let's spend more money on targeted things. Let's give research and development grants to encourage new investments in technology and new hiring.

However, he's just about to sign a ten-year agreement that says we're going to bend the arc on spending in Washington. Not cut spending but bend the growth of spending in Washington. It makes it much harder to do what he wants to do. It makes it much harder for any Democrat to do what they want to do in terms of a bit more activist government.

So, the president has a huge challenge. What he's hoping here is that this deal helps with the psychology of the private sector and they feel more confident. But the tax question, which many employers, CEOs have said, is uncertain. That is still uncertain.

BLITZER: It eases a huge burden potentially but doesn't necessarily guarantee, Gloria -- and we're following the breaking news out of the United States Senate, they have now passed the legislation raising the nation's debt ceiling, following the lead of the House of Representatives last night. Eventually later today it will go to the president for signature. But even before he signs it, he will go into the White House Rose Garden to make a statement to the nation, indeed to the world.

Even though this has passed, even though the president is going to sign it, the AAA credit rating that the United States has may not exist. I think it will exist for the next few weeks.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right. I think it is more likely that it would.

BLITZER: They really wanted -- Moody's, Standard & Poor, they really wanted a $4 trillion projected cut and this is going to be, what? $2.5 trillion, if that.

BORGER: But the president's hope -- you're right -- but the president's hope as John was saying is this will give businesses some certainty. They're sitting on a lot of money right now. Maybe they'll start spending that money, maybe they'll start hiring.

What you're going to see in the Democratic party -- don't forget, this has taken the president completely off his message to talk about job creation. And so, we've heard a lot from the Republicans about these job-killing tax increases. Well, the president has to talk about job creation right now. Nancy Pelosi's going to have a press conference this afternoon about job creation, not wasting one minute because that's what he wants to talk about to the American public.

BLITZER: Let's go to the Rose Garden. Our chief White House correspondent, Jessica Yellin, is standing by. Is the president in his remarks, Jessica, I assume he's not going to really dwell and look back and refight this war that we've just seen here in Washington. He's going to try to move this situation forward a little bit and talk about where the country has to go from here.

JESSICA YELLIN, CHIEF WHITE HOUSE CORRESPONDENT: Absolutely right, Wolf. He's looking ahead at what the nation needs to do, exactly what you were talking about, to create jobs next, which is where the American people are focused.

And he faces a particular challenge because over the last weeks, as we've seen even in Senator Reid and McConnell's statements, we've seen this intense acrimony between the two parties in the last debate. So, the challenge for the White House is how does he move a jobs agenda forward in the context of this gridlocked Washington and as we head into this political season that is facing us?

For the White House, it's not just these priorities we keep hearing from the president about this infrastructure bank and patent reform and getting construction workers back to work. Of course, these are all priorities.

But there are also two key things they wanted in this bill, in this debt deal that were not there: payroll tax extension and extension of unemployment insurance. Those are two issues that the White House here will try to push going on later in this year.

Big question, whether they can actually get it through Congress. They have also made it clear that they will give guidance on what they would like this debt commission to tackle going forward.

BLITZER: So the president will walk out -- I see the podium behind you over there, Jessica. Is he going to be surrounded by the vice president and a whole bunch of aides? Is he coming out by himself? What's the game plan?

YELLIN: You know, I don't know who is going to be with him but I do know that this White House does plan to sign this bill this afternoon, Wolf, just as soon as it is delivered to them. This deal will be signed, sealed and delivered by the close of business today so we can all move on and get this debt ceiling raised and past us by close of business tonight.

BLITZER: How sensitive, Jessica, are officials at the White House that the president is really getting a lot of criticism? Forget about from the right, from Republicans and conservatives, but from his own base who feel he could have been tougher in these negotiations?

YELLIN: You know, there's sensitivity, but it also comes with the turf is the attitude you get. And not surprised because concessions were made, and this was a bruising, brutal fight. But there's a sense that because of the nature of the fight, because it was so brutal on both sides, that there's a likelihood Democrats -- that Democrats I speak to feel that it's likely that Republicans will suffer from this, too.

So, you look at the polling, you see that the American public views Republicans in as negative a light as they view Democrats now. Some polling shows sometimes more in Congress. So, they think the liberals and their party, yes, they're angry. They'll get over it in a sense, and there will be other fights to fight going forward.

BLITZER: All right. It's a hot, sunny day in Washington, D.C. Jessica, stand by. We will be getting back to you.

John and Gloria, it's sort of reminds me -- and tell our viewers if I'm right or wrong - triangulation, which was a word we heard during the Bill Clinton presidency around the same time, I must say.

KING: When we spent a lot of hot summer days in the Rose Garden covering the Clinton White House together.

Yes, where you have a president, now. Politically, triangulation is the president cuts a deal that sort of makes both sides mad and he works with the Republicans enough to anger the liberal base, but in the end, Nancy Pelosi, you have to help deliver 95 votes to the House yesterday to get that through. Nobody's happy in the end except the president, who gets to say I'm the man in the middle, I'm the reasonable adult who made both sides compromise, and I look good to the middle of the electorate. That is the president's goal here.

Early on in this debate, the polling shows he had established that ground. More recent polling is a little bit more murky. But to Jess's point, your question about the liberals, it is the White House calculation that they will get over this. That we are in a 2012 presidential election, something else will come up.

But there are some Democrats, including close to this campaign, who are beginning to warn them that just on the margins, this will not be 2008, Wolf. 2012 will be a more competitive election. We are going to have eight percent or nine percent unemployment. We saw in 2010 how big states that Obama carried moved back to the Republicans. Will they swing back all the time? Most people think not.

It doesn't take much in a 50/50 competitive election, if liberal turnout is down just a little bit in northern Virginia, just a little bit in North Carolina, just a little bit in Cleveland, just a little bit outside Denver, guess what? Four states that were key to the president winning could be in play.

So, there are a lot of Democrats saying be careful how much you think oh, they'll get over it, they'll be with us in the end. That is why when David Axelrod left the White House, he said priority one was getting back to the e-mails, getting in touch with the base because he knows there are wounds to be healed and maybe more wounds that will be made before you get to November 2012.

BORGER: The White House is making the argument to liberals that what they did in this was keep the social safety net intact. That when Republicans wanted to make Medicaid, for example, a part of those triggers and the eventual cutbacks, the White House said you know what? Stop, no, we cannot do that.

So, what Joe Biden was on the hill telling liberal Democrats yesterday was we protected the needy in this country from these potential cutbacks, and that's the argument they're going to be taking to the liberal base.

And they also believe it's always compared to what? That they are going to say okay, you liked the Paul Ryan budget? You liked the voucher program for Medicare? Well, go vote for that, then. Or go vote for Barack Obama.

So, again, they're going to use the Ryan budget. And they're going to wait and see what comes out of this committee, because if they can reframe the debate the way it was after the Paul Ryan budget and they were the protectors of Medicare, I think they would take that argument.

BLITZER: And I don't think there's anyone seriously thinking on the Democratic side of challenging the president for the Democratic presidential nomination the way Ted Kennedy challenged an incumbent Democrat back in 1980, Jimmy carter.

KING: No, but it's interesting. I was having a conversation with several prominent Democrats, including our contributor, Donna Brazile recently, who said they were hearing rumblings that some liberals said let's find somebody like Geroge Soros to fund a third- party liberal candidacy to stand up and say Obama's not tough enough. Is that going to happen? I don't think so. But the depth of the sour grapes and raw feelings -- again, the challenge for any incumbent is very different.

I believe, and most Democrats believe the challenge for this incumbent Democrat, because he ran as an aspirational, transformational hope candidacy, did inspire some new voters to come to the process. If they somehow feel they were let down, it's harder to get them to come out to play, to fight. Not just to vote, but to volunteer and to come to the office and to do all the little things the Obama campaign did masterfully in putting together a great campaign. If they're off their game just a little bit, Wolf, in a competitive year, could make the difference.

Look, it's a long way out but that's why when Axelrod and those guys left the White House, they understand if it's a 50/50 race, it is critical they get back to nuts and bolts.

BLITZER: And let me remind our viewers, we are awaiting the president of the United States. He will be walking out of the West Wing of the White House into the Rose Garden to address the nation. The Senate has just done what the House of Representatives has done, passed this debt ceiling agreement. We'll get the final roll call number. But overwhelming support in the United States Senate for Harry Reid, the majority leader, Mitch McConnell, the minority leader. They came together just as Nancy Pelosi and John Boehner came together in the House of Representatives yesterday and passed it overwhelmingly in the House of Representatives.

No one is really all that enthusiastic about this deal, but they have a deal that allows the debt ceiling to go up, avert a potential default. The United States government unable to pay some of its bills. That was the disaster that could have awaited the U.S. economy if it were to happen. It's not happening right now. But this debate will continue.

I'm curious, John, if you think this is a moment -- and a lot of us who covered Ronald Reagan back in the '80s remember the deals he worked out with Tip O'Neill, who was then the House speaker. Is this a moment where there's a new relationship now between the president, the speaker and the Republican leader in the Senate along the lines of what happened back back in the '80s?

Hold on one second. Hold on one second.

(BEGIN LIVE COVERAGE)

SEN. DICK DURBIN, (D-IL), MAJORITY WHIP: Any senators wish to change their vote? If not on that question, the ayes are 74 and the nays are 26. The motion to concur in the House amendment to Senate Bill 365 is agreed to.

(END LIVE COVERAGE)

BLITZER: All right, so there you have it. Dick Durbin, the Democratic senator from Illinois, the majority whip, announcing the official vote. 74 in favor, 26 opposed. Gloria, that's sort of the number we anticipated. I assumed it was going to be more than 70.

BORGER: Yes. There's a little bit of padding there. I'm curious to see who the 26 are and how that breaks down --

BLITZER: Some Republicans who are seeking re-election.

(LAUGHTER)

BORGER: And how many of them are up for grabs, right, or facing challenges? So, we'll have to take a look at that.

In terms of your last question to John about the relationships, it's interesting because from my vantage point, I think Senator Mitch McConnell, who is clearly key here, really preferred to deal with Joe Biden more than anybody else because they had a previous relationship in the Senate. And I was told that the senator believes that Joe Biden could close a deal, where Barack Obama might not have been as able to do that.

BLITZER: All right, guys. The Senate has just formally gone into recess. We expect the president of the United States momentarily to walk outside of his office in the West Wing into the Rose Garden. Let's take a quick break. Our coverage will continue right after this.

(COMMERCIAL BREAK)

BLITZER: You're taking a look at the Rose Garden at the White House. The president momentarily will be walking out of his office in the West Wing of the White House. He'll walk down those stairs to the microphone and will address the nation. The United States Senate, by a vote of 74-26, has just passed the agreement -- the debt ceiling agreement, raising the nation's debt ceiling. Follows a vote -- a strong vote in the House of Representatives last night. Eventually, later this afternoon, the documents will be sent to the White House. The president will sign this legislation into law.

He's not signing it into law right now. They've got to do all that paperwork first. I'll be curious once they do send that document over to the White House, will there just be a photo that the White House will release of the president signing into law or will they have some sort of ceremony. They probably won't. This will be the moment that the president will address the nation.

He's going to make the case of moving forward right now. Use this as an opportunity to do what the economy needs, what the country needs, start creating a whole bunch of more jobs. Easier, obviously, said than done.

We've got our correspondents standing by. Jessica Yellin is over there in the Rose Garden. Kate Bolduan is up on Capitol Hill.

Kate, the House of Representatives, after they voted yesterday, they immediately announced they're going into recess and members don't have to come back until early September, after Labor Day. Is that the Senate's game plan as well?

BOLDUAN: I assure you there are many senators that have their bags packed and are ready to head out at this moment. I believe we are going to be hearing from Senator Reid, as well as Senator Mitch McConnell, on their plans for them to come out to the cameras after this vote. So we'll be looking to hear what they have to say.

But I can assure you, through the hallways I've been talking to a lot of them, as you know, throughout the past few weeks and many of them have said that they're very much looking towards this August recess. And I can assure you, they probably have their plane tickets already in their pockets.

BLITZER: Yes, they want that August recess. They're going to come back on, what, September 7th or September 9th, at least in the House, that's when they're going to come back for the next round of votes. There will be some criticism why are these members supposedly going on vacation, but they always point out they're going back to their districts, they're going back to their states to work on constituent issues, hear directly from their constituents, hear directly from people in their states.

And many of them will be going on overseas trips, fact-finding missions as they call them, some call them junkets but some call them fact-finding missions to see what's really happening, whether in Iraq or Afghanistan or Fiji, for that matter. Some Paris or London, whatever. They've got to go find the facts.

John, we've covered these stories -- Gloria, we've covered these stories for awhile. One senator or representative's fact-finding mission is another's junket, if you will.

KING: You know, some of these get very criticized and some of them should be very criticized. Others, and I'm just going to name names, I'll name two, a Democrat, Jack Reed of Rhode Island, a Republican, John McCain of Arizona, they tend, on these trips, to go to Iraq and Afghanistan and spend some time talking to the troops and talking to the generals and talking to the government officials. And they go to places like Pakistan. It's hard to begrudge anyone who takes that trip. And they come back, those are vital national security --

BLITZER: Those are dangerous trips.

KING: And some of these others are international conferences. And at a time when spending is the issue, is when these trips come up for play. How many staffers did you take? Are taxpayers paying for the spouses to go along? Yes, they come up. Most often that is a circus or a sideshow, the debate about those things, because, look, it's hard to say, but 99.9 percent of the members of Congress or 99.99 percent are decent, hard-working people who you might disagree with politically, who maybe there's a little bit of shopping on these trips. But if they're trying to do their work, they're trying to do their work.

There are bigger issues facing the country than who's going where on a codel (ph), as we call them in town, but there are a lot fewer codel --

BLITZER: (INAUDIBLE).

KING: Yes.

BORGER: I'm really interested to hear what they're hearing, though, when they go back home.

KING: At home. At home, yes.

BORGER: Not, you know, forget when they go abroad, because, as you see, public opinion so far, and, again, these overnight polls are very difficult to trust, but the public's kind of split. They hated the way Congress behaved on this debt ceiling debate, but they're kind of split because all of the details of this are very hard to absorb because it's so complicated. And once they go home and start explaining to their constituents what it is they voted for and what it is they voted against, it will be interesting to see what the pushback is, particularly from those Tea Party members who came to Washington and actually did change Washington. And whether they get support or whether independent voters are so upset with the way this whole thing played out that they'll start opposing them.

BLITZER: You know, I want to quickly go back to Alison Kosik. She's up in New York watching the markets unfold (ph).

First of all, Alison, update us on what the markets are -- how they're reacting to all of this. And then I have a follow-up question. But, go ahead.

KOSIK: You know, as the vote was finished there and as we wait on the president to come out and speak, we watched the market fall even more. The Dow down 150 points.

Look, we've got a lot more going on than just the debt ceiling. That's what Wall Street sees. You know, it's put sort of this side show of the debt ceiling stalemate to rest at this point. And Wall Street's looking forward -- looking forward at weak manufacturing, weak GDP. GDP, that's economic growth. That's the broadest measure of economic growth for the U.S. Is barely moving. And that means it's not moving enough to create enough jobs. And that's what Wall Street really wants to see. That's what Wall Street is looking at, at this point. That's why we're seeing stocks fall even further right now.

Wolf.

BLITZER: Are they assuming on Wall Street that at some point down the road the credit rating agencies, Standard & Poor's, Moody's, that they're going to simply downgrade the U.S. AAA credit rating? Is that already under sort of an assumption on Wall Street?

KOSIK: It is. In fact, you could already probably see it being baked into the market with these numbers. Sure, that is expected when the issue's revisited in November, especially. You know, S&P, Standard and Poor's, it's already assumed that Standard & Poor's is going to downgrade the U.S. credit rating. That's really not what's getting Wall Street down at this point. It really is these economic figures that continually keep on coming in showing that there is really broad weakness in this economy.

Wolf.

BLITZER: Alison, stand by. We're going to watch what's happening on Wall Street. We'll take another quick break. One minute. We'll be right back. We're standing by for the president of the United States.

(COMMERCIAL BREAK) BLITZER: The United States Senate has passed the language, the legislation raising the nation's debt ceiling overwhelmingly. The vote, 74 in favor, 26 opposed. A decisive victory for the Senate majority leader, the Senate minority leader, both of whom supported this legislation, Harry Reid and Mitch McConnell.

The president of the United States getting ready to go into the Rose Garden to address the nation momentarily. Jessica Yellin is already in the Rose Garden, where I'm sure it's very, very hot on this very hot day in Washington, D.C.

Jessica, set the scene for our viewers who may just be tuning in. We're going to hear from the president. What's he going to tell us?

JESSICA YELLIN, CNN NATIONAL CORRESPONDENT: Wolf, the president is expected out any moment now. I do expect him to come in here just imminently to cap the end of this long fought -- long and hard fight. Now that the Senate has finally passed this legislation, the president will sign it this afternoon. We expect the president to sort of put an end to this. Sum it up. Say that, in essence, the United States went through a very bitter -- that Washington went through a very bitter fight, but the United States will come out better for this because we have begun the effort to bring down our deficit. That they made their priorities clear. And that in the White House's view, they did get some wins and -- in their minds. And that they'll live to fight another day. So their focus really will be at pitching ahead to look at jobs and the priorities for the White House and the American people, which is getting Americans back to work.

The big question is, how can they do that and how easy will that be given the acrimony of the past few weeks and the gridlock we've seen in Washington. One of the points White House officials have emphasized recently is that this debt fight has raised the American people's interest in these issues and they feel that they can get the American people on board to help them fight and push Congress to promote these priorities. So is that wishful thinking? Who knows. But it is their view that maybe this fight could promote some of these issues when we go into this committee battle, which is the next big fight we'll see before Thanksgiving on the horizon.

Wolf.

BLITZER: And now that they've got this deal, the president will sign it into law later today, Jessica.

YELLIN: Yes.

BLITZER: This does enable the president to go as planned to Chicago tomorrow to celebrate his 50th birthday and do some political fund-raising.

YELLIN: That's right. The president clearly is ready for a celebration at this point. I would describe the mood here as some exhausted relief. And people actually went home at a reasonable hour last night for the first time in many, many weeks. So the president does head off to Chicago to do some fund-raising and turn to the other part of his job, which is beginning -- working on the 2012 election.

He has two fund-raisers in Chicago and then he heads back here for further work. But, of course, all of this will be on the minds of the White House and the issue of how to frame all this going forward into the 2012 election is really about two different visions of government. One vision of a very small government that's pushed by the Republican Party at this time and the Democrats looking at an expanded role of government that does still keep some protections as they put it, as Gloria has emphasized, for the poor and the needy even at the cost of some more government debt.

BLITZER: I'm curious, Jessica, as a reporter who used to spend a lot of time in the Rose Garden myself during the Clinton administration, what's that machine behind you over your shoulder? It's right there. What is that?

YELLIN: It's not a television monitor. I believe that would be -- is that a teleprompter?

BLITZER: Is that what --

YELLIN: It's the teleprompter.

BLITZER: It is the teleprompter. All right, so the president will be reading his speech from a teleprompter.

YELLIN: But it's so bright out here, you have to have it on a monitor instead of on those clear Plexiglas stands.

BLITZER: Yes. All right. I was just checking.

YELLIN: Very bright out here.

BLITZER: I know. All right, I hope you are wearing some sun block, Jessica. You got some sun block on over there?

YELLIN: I'll go get some, Wolf. That's a good idea. Thank you.

BLITZER: All right, go get some sun block because, you know, you could be standing out there for awhile. I'm trying to help you. It's hot. Probably well into the 90s in Washington.

All right, Jessica, get some shade over there. We'll get back to you in a few moments.

We expect to hear from the president momentarily. He'll be walking into the Rose Garden. You and I used to -- we used to sweat a little bit in the Rose Garden.

KING: I'm not a humidity person. My God. Eight and a half -- eight and a half wonderful years at the White House. You have just ignited the twitter verse over the teleprompter now. This is all --

BLITZER: Oh, I (INAUDIBLE). I don't remember a machine like that. I didn't know what that was.

KING: Oh, that's -- that's --

BORGER: These new-fangled things.

KING: That's that new-fangled thing --

BLITZER: Bill Clinton, when he used to walk in the Rose Garden, he didn't have teleprompters in those days.

KING: No, he didn't. Bill Clinton did not use the teleprompter. Every now and then he used it for big events. As you know, the --

BLITZER: At a convention -- now a convention --

KING: The teleprompter -- yes, the teleprompter has become drama during the Obama administration.

BLITZER: Yes.

KING: But to Jessica's point, I mean, we're laughing a little bit here, and it's good to have humor after this partisan, awful debate, messy debate we've had for a few weeks. You mentioned the president's birthday party. He's going to go celebrate. He's going to raise money. He's heading into his re-election campaign. And this is a deal of divided government. Nobody loves it, which does that make it just right or does it make it just awful? We're going to see how this debate plays out as this super committee gets going.

But what a non birthday present for the president. The conversation in that lower box on the screen there. The president wants to sign this deal because he thinks further disruption, default, uncertainty, would make the economy even worse. But look at these numbers, Wolf. It's bad enough. I mean he's the president of the United States. Let's be clear, as a citizen, as the president, he didn't want to be the first president to default. He didn't want people to go through that.

As a candidate for re-election, the Dow is down, unemployment is up, GDP is flat, consumer confidence is in the tank. If you just look at the statistics, it is pretty hard to build an argument that this president is going to be re-elected. Now I'm not saying this president is not going to be re-elected. Many people in this town think he's favored to be re-elected. But if you just go by historical data, the economy, consumer confidence, eight in 10 Americans think the country's heading in the wrong direction.

When eight in 10 Americans think the country is heading in the wrong direction, it's very hard to say, hey, I'm the president, give me four more years. And so the enormous challenge for this president, yes, we're early in the Republican primary, there are Democrats watching saying, you know, John King, you're crazy, who's going to run against the president. We're going to find all that out.

But just by history, go back, Democrat -- forget what party he's in. Just go back through history and look at these numbers. What an enormous challenge. And so this deal today is important to him, not because it's perfect, but because at least it might help make things not worse.

BORGER: You know, when Ronald Reagan had over 10 percent unemployment, by the time he was running for re-election, his unemployment rate went down to sort of 7.2 percent, around there.

KING: Five quarters in a row of 5 percent growth.

BORGER: Right. And so he could campaign --

KING: Yes. Yes.

BLITZER: The trend was good.

KING: Right.

BORGER: He could campaign on morning in America that things were starting to look up, that things were starting to get better. And Barack Obama, who was supposed to inspire people, has actually inspired a new political movement that's running against him, which is the Tea Party movement. So I think his best argument is, right now, as opposed to what? Whom do you trust to get us out of this now and --

KING: To make it a choice, not a referendum.

BORGER: Exactly. It's got to be a choice.

KING: The referendum on him, it's not fair to the president sometimes.

BORGER: Exactly.

BLITZER: No.

KING: It's not fair to the president sometimes, but the numbers are the numbers.

BORGER: Right.

KING: And that's what it is. But --

BORGER: If it's about Barack Obama, it's not good for him.

KING: And there are people watching at home saying, why are you talking about politics at this moment? What does it mean for me when 16 percent of Americans are unemployed or underemployed. Well, the reason it's so tough for the president is unfortunately it's going to be tough for you, too. There's very little evidence the job market is about to kick into a higher gear.