WHITE HOUSE CHIEF OF STAFF BILL DALEY TRANSCRIPT (BEGIN VIDEOTAPE) AMANPOUR: This week, the starkest evidence yet of a stalling economy. OBAMA: Our economy as a whole just is not producing nearly enough jobs. AMANPOUR: A series of setbacks. First Friday's dismal jobs report, and last night another blow as House Speaker John Boehner pulls the grand bargain to debt reform off the table. A stormy launch to today's high-stakes negotiations at the White House. REP. JOHN A. BOEHNER, R-OHIO: We are this far apart. AMANPOUR: Our headliner in a "This Week" exclusive, the president's chief of staff, Bill Daley, takes us inside the tense talks to keep America from defaulting on its debts for the first time in history. And our roundtable tackles the high-stakes politics at play. Then the new IMF head Christine Lagarde on the grave risk posed by a U.S. default, and Dominique Strauss-Kahn's spectacular fall from grace. Plus the shocking scandal shaking Britain and threatening Rupert Murdoch's media empire. (END VIDEOTAPE) ANNOUNCER: Live from the Newseum in Washington, "This Week" with Christiane Amanpour starts right now. AMANPOUR: Welcome to the program. Lots to get to today, but first some major news in the high-stakes negotiations over raising the debt ceiling. Late last night, House Speaker John Boehner abruptly reversed course and abandoned his efforts to strike a sweeping $4 trillion debt reduction deal with President Obama. Boehner is now pushing for a scaled-back package, a move that's brought stiff rebukes from Democrats. All of this comes just hours before the speaker and the president meet face-to-face at the White House for a new round of talks. ABC's Jonathan Karl joins us now with more. So, Jon, where do things stand now heading into tonight's meeting? KARL: Well, the bottom line, Christiane, is that the effort to craft a grand compromise that would have seriously dealt with the long-term federal debt crisis is dead, but there's still major negotiation to be done. The federal government is now just three weeks away from hitting the limit on how much money it's allowed to borrow. And even without the prospect of crafting this big grand compromise, the president and congressional leaders need to negotiate an agreement to raise that limit. Speaker Boehner is still demanding that more than $2 trillion in spending cuts be made to give the president the increase in the debt ceiling that he wants, and Democrats are demanding that any deal to cut spending like that also has to include an increase in tax revenue. So the big question, Christiane, going into tonight's meeting is whether even a smaller deficit reduction deal is possible. Both sides are saying it can be done, because failure to do it would lead to economic meltdown. AMANPOUR: John, thank you very much. And joining me right now to discuss the road ahead is the White House chief of staff, Bill Daley. Thank you very much for joining us. Well, you've heard all that Jon said. You've seen what Speaker Boehner has done last night. What's your reaction to this late-floating mega deal being pulled now?