'This Week' Transcript: Timothy Geithner

WASHINGTON, July 24, 2011— -- AMANPOUR: This week, from grand bargain to mad scramble.

OBAMA: We have now run out of time.

BOEHNER: If the White House won't get serious, we will.

AMANPOUR: As default now looms, Congress and the president struggle to pick up the pieces, and our headliner prepares for the unthinkable.

GEITHNER: If Congress does not raise the debt limit, it would be catastrophic.

AMANPOUR: We ask Treasury Secretary Tim Geithner whether there's a plan to deal with the economic chaos of default. As the heat on the Hill rises, our roundtable weighs in.

And paradise lost. A lone wolf turns Norway into a nightmare. The latest on the Oslo massacre.

Plus, history in New York today, as hundreds of gays and lesbians tie the knot, and the mayor himself officiates at one of those weddings.

BLOOMBERG: It's a statement that New York is open to everyone and we value everybody's rights.

AMANPOUR: We talk to Michael Bloomberg about marriage, taxes, and Washington on the rocks.

ANNOUNCER: Live from the Newseum in Washington, "This Week" with Christiane Amanpour starts right now.

(END VIDEO CLIP)

AMANPOUR: Welcome to the program. And there is lots to get to today, but first, some news since your morning papers.

It's a day of remembrance in Norway, a country that's reeling from Friday's bombing and shooting massacre that killed 93 people. This morning in Oslo, a memorial service of sorrow and hope. The king and queen are there, as is Norway's prime minister, who declared that we will never give up our values. Our answer is more democracy, more openness, more humanity.

ABC's Miguel Marquez joins us with more of what's been described as the first massive attack by somebody who's described as a Christian extremist amid fears that it could become a rallying cry for the right-wing fringe in Europe.

Miguel?

MARQUEZ: Christiane, we are learning much more about the self-confessed shooter, Anders Behring Breivik. Hours before he went on his rampage, he posted a video and 1,500-page manifesto online. It's a racist, anti-Islamic screed urging European conservatives to embrace martyrdom.

We are also hearing some incredible survivor stories. Adrian Pracon was shot in the shoulder, but lived because he played dead.

(BEGIN VIDEO CLIP)

PRACON: I could hear his breathing. I could also feel his boots very near me. And I could feel the warmth from the barrel when he pulled the trigger.

(END VIDEO CLIP)

MARQUEZ: Today is a mournful day across the entire country. There wasn't a dry eye at the cathedral in Oslo, as leaders and citizens gathered in a service of sorrow and hope. Tomorrow, Breivik will be in court. He has called his actions "gruesome, but necessary." His lawyer says he'll explain himself tomorrow.

Christiane?

AMANPOUR: Miguel Marquez in Norway.

And we turn now to the debt talks here in Washington, where congressional leaders are racing against the clock to try to show some sign of progress in the debt talks before the Asian markets open just a few hours from now. ABC's senior political correspondent Jonathan Karl has been following the talks.

And, Jonathan, where do things stand right now?

KARL: Well, leaders in both parties are determined to have the agreement or at least the framework of an agreement done by 4 o'clock this afternoon before those Asian markets open. The fear is that if there is no at least framework for an agreement, then it will be a market downturn, possibly a severe one, as markets around the world react to this.

Democrats, by the way, are signaling that if that happens, they will be calling it the Boehner drop, blaming Republicans for what happens.

Meanwhile, the talks on the Hill have basically deadlocked over the issue of whether or not this would be an extension to take the debt ceiling all the way to 2013, past the presidential election. Republicans are signaling that they want two votes, one now tied to about a trillion dollars in spending cuts and another one next year tied to further spending cuts.

As you know, Christiane, the White House has signaled that any such temporary increase is simply unacceptable. In fact, the president has said repeatedly that he would veto it.

AMANPOUR: And, Jonathan, quickly, obviously the talks between Speaker Boehner and President Obama is what collapsed on Friday, but there's word that they may be speaking again together. What do you know about that?

KARL: Christiane, I am told that the efforts to revive that grand bargain have revived, that Speaker Boehner is still considering and still probing with the White House the possibility of a big deal that would be nearly $4 trillion in deficit reduction and include $800 billion in added tax revenues over the next 10 years.

If he goes this route, I am told he will face a revolt from his Republicans in the House, including his fellow leaders Eric Cantor, Kevin McCarthy. This would be a very risky move for the speaker, but I'm told he is still considering it.

AMANPOUR: All right, Jonathan, thank you.

And Treasury Secretary Timothy Geithner joins me right now. He would have to manage the chaos if the United States defaults for the first time in history.

Secretary Geithner, thank you for being here. Well, you just heard what Jonathan said about what's on the table. Is it possible that there will be a framework deal in place by 4:00 p.m. this afternoon?

GEITHNER: I hope so. Again, both leaders recognize they're running out of time. They need get this process moving in the House by Monday night to achieve that deadline. They need to have a framework that they know with complete confidence will pass both houses of Congress, that is acceptable to the president, and that should happen today.

AMANPOUR: And you think it can happen before the markets open in Asia?

GEITHNER: Well, again, what they're trying to do -- if you listen to what the speaker has said -- is try to make sure they can demonstrate they have a framework that all parties can agree to, that can pass both houses of Congress, the president will sign within this timeframe.

AMANPOUR: And Jonathan...

GEITHNER: And we're making progress. We are.

AMANPOUR: Well, you say that. Jonathan raised several incarnations of a potential deal, the two-part deal, the grand deal. What will it be?

GEITHNER: Well, there are -- there are two types of frameworks now that are on the table. One is the framework that the president and the speaker of the House have been going back and forth on for some time.

That would be a comprehensive, balanced set of savings on the spending side to help secure Medicare and Medicaid for the future and tax reform that would generate revenues...

AMANPOUR: So they are talking again?

GEITHNER: They are -- yeah, absolutely. They've been in touch throughout this period of time. But there's also the proposal that Senator McConnell made, Senator Reid had made, that would agree on some upfront savings, but then establish a special committee with exceptional powers that could legislate quickly as a way to force Congress -- or make it easier for Congress to make the tough choices we're going to have to make.

Now, both of those are on the table. Now, they could be combined in various forms. But the most important thing is we can't adopt an approach that leaves the threat of default hanging over the country for another six months or so. That would be deeply irresponsible to do, and we do not think that's acceptable burden to put on the American economy.

AMANPOUR: Well, also some investors are beginning to panic. I mean, people are saying, you know, who's in charge? Who's running this country? Has everybody gone out of their minds?

GEITHNER: Well, you know, this is a critical test for the American political system. It's a critical test for Congress and for the Republican leaders in Congress, because the eyes of the world are on us, and they are looking to see whether the United States of America, as it always has done in the past, will not just meet our obligations, pay our bills, but start to make some progress in these long-term fiscal...

(CROSSTALK)

AMANPOUR: So what will you say now to reassure the world that this will be in place by this afternoon, a framework?

GEITHNER: Well, the -- the leaders of Congress have said unequivocally -- Republican, not just Democrats -- that we will meet our obligations. We are not going to default. What we're trying to do is not just achieve that, but also make sure we've put in place a framework that allows Congress to make the tough decisions we need to make to get our fiscal house in order.

AMANPOUR: Now, Mr. Secretary, you and Speaker Boehner last week shook hands on a deal that involved $800 billion worth of revenue.

GEITHNER: No, let me stop you there.

AMANPOUR: All sides are saying that.

GEITHNER: No, no, that's not true. We got close.

AMANPOUR: Did you make a deal with him?

GEITHNER: No, we did not. And the president and the speaker got very close. But there was a whole range of things yet to be resolved at that point when the speaker pulled out on Friday.

AMANPOUR: Did you agree on that revenue number, $800 billion?

GEITHNER: No, we did not. We did not. And, again, at that point...

AMANPOUR: Are you saying that the speaker is not telling the truth?

GEITHNER: No, no, he didn't say it quite that way. What he said is, at that point...

AMANPOUR: They have said that you agreed with him on $800 billion of revenue.

GEITHNER: Christiane, I can assure you that that's not the case. At that point, the Republicans were still asking for deeper cuts in Medicare and Medicaid than we thought was acceptable. Our position was -- as you heard the president say -- is we want to make sure the deal is balanced so that we're not putting too much of the burden of getting our fiscal house in order on the backs of elderly Americans and the most vulnerable. And so at that point, we were very close, but we were not there yet.

AMANPOUR: Is $800 billion in revenue a number that you would accept?

GEITHNER: Well, that's a judgment we're going to have to make in looking at the rest of the entire package. But, again, I think the important thing -- and I think the voices of reason across the political spectrum are getting stronger now, because you've seen Republicans recognize for the first time -- and I give the speaker a huge amount of credit for this -- that a balanced framework that's acceptable to the American people is going to have to require tax reform that generates more revenues.

AMANPOUR: President Obama has ordered -- and he did very conspicuously on Friday -- Congress to go away and come back and show him how they're going to avoid a default. What's President Obama's plan?

GEITHNER: Well, the president put on the table back in April -- and has been discussing, as you know, in talks, first, that the vice president led and then with the speaker and with all of leadership -- a comprehensive, balanced set of savings, you know, force the government to use the resources of the taxpayer more wisely and more carefully to put savings in place to help make sure we're securing Medicare, Medicaid, Social Security for future generations, but also tax reforms that will generate more revenue and make sure the burden is shared more fairly across the American people.

That's the framework the president put out first in April. That's what we've been negotiating towards. And, again, if you listen carefully -- I know it's hard to read this place, because it's a political town and political moment...

AMANPOUR: Is this all politics? Is this going to get done?

GEITHNER: There is a lot of politics there, but it has to get done. There is no choice. There's no alternative. Failure is not an option, and, again, the leaders recognize that. Remember, what's happening is that there is a -- there are very loud voices in the Republican Party up there in Congress who have been saying for months that we should force the country to default for the first time in history.

AMANPOUR: But not the leadership.

GEITHNER: No, not the leadership, but a pretty large member of Congress -- large number of members of Congress in both houses have been saying we should default unless the president of the United States agrees to accept deep cuts in benefits for the elderly, for the most vulnerable, in order to make sure we can extend and sustain incredibly generous tax preferences for the top 2 percent of Americans. And that's not something that's acceptable to the American people, and it's not something we're going to accept.

AMANPOUR: The American people are getting increasingly frustrated. You've seen 80 percent of the people are very frustrated with the way all this is working.

GEITHNER: And they should be frustrated.

AMANPOUR: What I want to know is, are you going to and could you -- even though the president has said, his lawyers say it's not appropriate, use the 14th Amendment, if there's no other choice?

GEITHNER: It is not a workable option to protect...

AMANPOUR: But President Clinton says it can be done.

GEITHNER: We've looked at this very carefully, as had President Clinton and his lawyers when he was president. And this is not a workable option to limit the damage to the American people that would come from Congress not acting to raise the -- to avoid a default crisis.

AMANPOUR: The president has also -- President Obama -- talked to you and you've talked to the chairman of the Fed and others about how to contain a chaos if there is a default. How do you contain chaos if there's a default?

GEITHNER: Well, again, the only way to limit the damage to the American people that would come from Congress failing to act is for Congress to act to raise the debt limit.

AMANPOUR: But if they don't?

GEITHNER: But that's the only -- that's the only option available. We do not have the ability to limit the damage.

AMANPOUR: But how does it get done, by magic?

GEITHNER: No, they're going to pass a debt limit increase. That's what they're going to do. They're going to avoid a default crisis, as they've all said.

You know, again, if you listen to them carefully, Speaker Boehner, Senator McConnell have said unequivocally that this country will not default, we will meet our obligations. The problem is, they have a vocal, loud, frankly, irresponsible minority in their parties who are -- want to take this country to the edge of default. And that is not acceptable.

AMANPOUR: I interrupted you when you talked about the consequences of default. Is there a way to manage chaos, if there is a default?

GEITHNER: Default would be a tax on all Americans. It would cause irreparable damage to the credit standing of the American -- of the American economy. It would be devastating to our credibility as a country. And it would be -- it's not something you can undo. And that's why it's not an acceptable option. And the people who advocate it are deeply irresponsible.

AMANPOUR: Secretary Geithner, thank you very much, indeed, for joining us.

GEITHNER: Nice to see you.

AMANPOUR: So is there a glimmer of progress behind the politics and the posturing? Joining me now, our roundtable, George Will, Arianna Huffington, founder of the Huffington Post, former Clinton budget director Alice Rivlin, who's also a member of one of the many commissions studying solutions to the debt crisis, and Charlie Gasparino, senior correspondent for Fox Business Network.

Good morning, all. You heard what secretary of the treasury said. George, is the country going to go off the cliff? Or will there be a deal, do you think?

WILL: We were supposed to go off the cliff originally in May. That was the drop-dead date. Then it was moved to August 2nd, a week from this coming Tuesday. Now, suddenly, we wake up this morning, and Mr. Geithner, whose credibility is zero with Republicans -- and this is one reason why -- he says, no, no, 4 o'clock this afternoon, the Asian markets open, and that's the drop-dead date.

The president this week in his tantrum-cum-press-conference on Friday, came out and said Republicans won't say yes to anything. They said yes to the Ryan budget; the Democratic Senate said no. They said yes to cut, cap and balance.

The only plan put on paper, the president has put not one on paper, the only one debated in the House, the only one to pass a house of Congress had five Democratic votes behind it. The Democrats on Friday wouldn't even vote on it. They tabled it so their fingerprints wouldn't be on it. Who's having trouble saying yes?

AMANPOUR: Well, last week you said that the Republicans were having trouble saying yes, and they should take the best deal that was on the table. Do you think that's not the case anymore?

WILL: No, first of all, they've sent something over, and the Democrats have said no. Sooner or later, we're going to get -- I still think -- to the McConnell plan, which is not Plan B, it's Plan Z, but we will get to Z sooner or later.

AMANPOUR: So, Alice, are you on the edge of your seat? I mean, George is sanguine about this, something's going to get done. Is it?

RIVLIN: Well, I didn't hear sanguine from George, but in any case, no, I'm on the edge of my seat, but I do not believe we will default. It is unthinkable, I believe, for the United States government not to pay its obligations.

So I think most people who are involved in this, including the president and the leaders in Congress, understand that and they will come up with something. I'm not sure what they're going to come up with. I know what they should come up with, which is, I believe, a grand bargain, everybody compromises. We do need to restrain entitlements. We need to cut other spending, defense and domestic. And we need to reform the tax system in a way that will raise some revenues. That's -- that's a clear solution, and we ought to be there.

AMANPOUR: So, Charlie, grand bargain. You've seen the president and George's pointed out and everybody has pointed out that the president has had to move to this idea of cutting because of the Republicans, and so he's moved.

GASPARINO: Right, it depends on the cuts, you know. We don't know exactly what they are.

AMANPOUR: Do you think that the Republicans are meeting him halfway?

GASPARINO: You know, to a certain -- listen, here's the thing. We have divided government. When you have divided government, you're going to have these two forces fighting it out.

I actually think this is a good debate. And I think it's irresponsible for Geithner to go out there and talk about default. We are not going to default. We have enough money on hand to pay off bondholders. Why does he keep saying that? If he's worried about the Asian markets tonight, why does he mention default?

AMANPOUR: Well, to be fair, he said they weren't going to default.

GASPARINO: But then he said we might default if we don't raise the debt ceiling. And if we don't raise the debt ceiling, we have cash on hand to pay off bondholders.

Listen, I have no problem with this debate. We should debate this. But take default out of the picture. It will destroy the markets. It will really hurt this economy if we default. He's making it sound like the president might default if we don't get a debt ceiling. He might pay defense contractors instead of bondholders. That's the signal he's sending to the markets.

AMANPOUR: Arianna, do you think the president could go for a short-term -- even though he's ruled it out, do you think he might be forced to do that?

HUFFINGTON: Well, first of all, Christiane, I think this a completely artificial crisis. Most countries have no debt ceiling. We produced (ph) the debt ceiling in the First World War. It's been raised dozens of times. There is absolutely no many reason to cap on (ph) raising the debt ceiling with handling our long-term debt and deficit crisis. That's the fundamental problem.

AMANPOUR: But the thing is, it is a crisis now.

HUFFINGTON: But it is a crisis because they made it a crisis. It's not a real crisis. We have many, many real crises. We have a job crisis. We have a growth crisis. We have a deficit crisis. We have a human capital crisis. We have an infrastructure crisis. We are not handling these crises now. We are handling a completely artificial crisis.

GASPARINO: Isn't it good that we're actually talking about this? I mean, for a change we're talking about...

(CROSSTALK)

HUFFINGTON: No, it's not good that -- it's not good that we're talking about it in this context, because even if we -- even if we get a deal this afternoon, even if we get that grand bargain, it will not solve any of our problems. We'll still have massive unemployment. We'll still have kids graduating from college not being able to get jobs.

GASPARINO: Depends on how much they cut.

HUFFINGTON: We'll still have crumbling bridges. So we're not doing anything to solve our real problems, and that's what politicians are supposed to be doing.

GASPARINO: Arianna, $14 trillion of debt is a -- is a big problem, and it's growing. And it's...

HUFFINGTON: But we're not addressing it, because you know perfectly well, if we don't address our growth problem, we'll never resolve the deficit problem.

GASPARINO: Absolutely. I've always said that. But we do have to get a handle on this. At least we're debating this issue.

HUFFINGTON: But we're not getting a handle on it, because...

(CROSSTALK)

GASPARINO: We're talking about cuts.

HUFFINGTON: ... one more percent of growth would actually do more in solving our deficit crisis than any cuts in entitlements.

GASPARINO: Of course.

HUFFINGTON: There is no growth strategy.

AMANPOUR: Growth is anemic, and maybe there's no growth strategy, but, Alice, now that the conversation is over here and the ratings agencies are all looking at it, they are saying something has to be done about the debt.

RIVLIN: Yes, something has to be done. That's been true for a long time. This is, as Arianna said, an artificial crisis, but it can and should be used since we're here to get a solution to the long-run debt crisis, which is real and which will impede growth if we don't solve it. The worst thing we can do for growth is not to solve the problem of our looming deficit.

WILL: But that, of course, was the president's position as recently as April, when he said, I want a clean extension of this, that is, an extension with nothing attached that would slow the spending merry-go-round.

RIVLIN: That was a good idea, but we're not there now.

WILL: Why is that a good idea?

RIVLIN: We're -- well, it's a good idea for the reasons Arianna said. It's not going to be a good solution if you have to do it in 24 hours. However...

WILL: But you just said we had to do tax reform, entitlement reform, budget reform, all these things. This is an action-forcing moment.

RIVLIN: It is an action-forcing moment. Unfortunately, we're up against a very serious deadline.

WILL: That's why we're going to act.

RIVLIN: I believe that we can get a framework -- or whatever you call it -- maybe a two-step process, that will give us a solution in the grand bargain sense.

(CROSSTALK)

RIVLIN: But it has to be a compromise, George. It has to be something that both Republicans and Democrats can accept.

WILL: But just to be clear, what you're saying is not having a clean extension has been a good thing, for which we can credit 87 freshmen in the House of Representatives, who forced the president off his plain extension...

(CROSSTALK)

RIVLIN: But I don't think being where we are is a good thing.

HUFFINGTON: But, George, there is absolutely nothing in all these proposals that deals with any of the issues that Alice, for example, and Pete Domenici proposed, a national payroll tax holiday, a way to build our infrastructure. All these fundamental problems are not addressed.

AMANPOUR: But let me bring that -- let me bring that issue of jobs and infrastructure up. Larry Summers, former treasury secretary, one of President Obama's chief economic advisers, was speaking earlier this week, and this is what he had to say about the real deficit, as he saw it.

(BEGIN VIDEO CLIP)

SUMMERS: I think the biggest problem the country has right now is not the budget deficit. The biggest problem the country has right now is the jobs deficit.

(END VIDEO CLIP)

AMANPOUR: And actually, if you look at people and if you look at the polls, that's what everybody is talking about. Where is the job...

(CROSSTALK)

HUFFINGTON: ... Larry Summers, when he was, of course, in the White House, completely underestimated the jobs crisis. Why is it that people have to leave office in order to say wise things?

GASPARINO: Say smart things.

AMANPOUR: Jobs.

GASPARINO: Well, I will say this. When you talk to small businesses -- OK, I don't want to discount this deficit of $14 trillion not being an issue for jobs. You talk to small businesses. They are worried about higher taxes. They are worried about higher taxes to pay off that $14 trillion. Why aren't they hiring? They're hoarding cash for a reason, and they're not hiring. So I really do think that this is a jobs issue, as well. If we can get our hands around this, maybe businesses might start hiring people.

HUFFINGTON: But the jobs issue is a demand issue, Charlie. You know that.

GASPARINO: They have cash.

HUFFINGTON: There's no denying that corporate America has $2 trillion in cash they are not spending, corporate profits are up 60 percent. The problem is not the lack of cash.

GASPARINO: Well, they don't want to hire people for a reason.

HUFFINGTON: The problem is not -- the problem is not that they can borrow money at very reasonable rates. The problem is, they don't trust demand. And right now, by...

(CROSSTALK)

GASPARINO: Well, why don't they trust demand?

HUFFINGTON: ... by cutting spending, they're going to make demand even weaker. We are going...

(CROSSTALK)

AMANPOUR: ... how does one tackle this really major issue for the American people and worldwide, the jobs issue?

RIVLIN: The trouble with this conversation is it assumes that we have to choose, it's either jobs or it's deficits. It's both. It's been both for a long time, and Larry Summers failed to see that. If the Obama administration had come in early on, as early as 2009 when things were falling apart, and said, "We have to fix the economy, we have to do jobs, we have to do the stimulus, but at the same time we have fix the long-run deficit problem," if they had done that -- it's a hard sell -- but if they'd done that, they'd have more credibility on the deficit.

GASPARINO: He was threatening -- he was threatening to de-stimulate the economy at that time. He was threatening higher taxes.

AMANPOUR: George?

WILL: Time out. If I could bring us back to our crisis du jour, which is actually the agreement that's coming up...

AMANPOUR: I've got another crisis coming up...

(CROSSTALK)

WILL: The most pregnant remark made in -- was made -- is in the Washington Post this morning from Speaker Boehner. Over the weekend, Congress will forge a responsible path forward. The president has marginalized himself. Congress is being resuscitated by presidential arrogance. And it will come from Congress, and the president will take it.

AMANPOUR: Well, we'll see this afternoon what happens on that front.

Now, what about 2012? You've had the candidates weigh in on this. You've also had, George, the story of the week, which seemed to be Congresswoman Michele Bachmann's migraines. She released a letter from her physician testifying that her ability to fully function in unquestionable. That didn't stop one of her competitors, Tim Pawlenty, from weighing in. Let's listen to what he said.

(BEGIN VIDEO CLIP)

PAWLENTY: If you're going to be president of the United States, you've got to be able to do the job every day, all the time. There's no real time off in that job.

(END VIDEO CLIP)

AMANPOUR: What do you make of that? Is that fair game?

WILL: Well, he has a problem, Mr. Pawlenty, and that is that he wants -- when it becomes a binary choice, someone against Mitt Romney, he wants to be the someone. Waiting in the wings is Governor Perry, who threatens to make a big splash and instantly become the other half of the binary choice.

Tim Pawlenty raised a question that in this case I think is not really dispositive. We have had presidents and senators and ambassadors with health problems. There's no reason to believe that this is incapacitating. For example, no reason to believe she has health problems remotely comparable to those that John Kennedy had and were never revealed.

AMANPOUR: Arianna, do you think it's much ado about nothing? Is she getting sort of the female...

(CROSSTALK)

HUFFINGTON: She's definitely getting the female treatment. Reading the original story in the Daily Caller, the whispered anonymous sources, pill-popping, this woman cannot handle the stress, she's taken to her bed, to her fainting couch. It is very Victorian. You know, if her plane is late, if somebody quits, endless anonymous sources.

The problem with Michele Bachmann is not her migraines. The problem is what she believes. And the idea that somehow she cannot deal the big boy/man world of stress, it's so sexist. You know, this woman has five kids, 23 foster children. She lives in Iowa. I don't think she has a migraine problem.

AMANPOUR: Let me ask you about Rick Perry. If he jumps in -- I'm not going to ask you about migraines. I'm going to ask you about Rick Perry.

(CROSSTALK)

GASPARINO: ... I know a lot of people with migraines on Wall Street, and they're having them more lately, I have (OFF-MIKE) AMANPOUR: Rick Perry, how will he shake this up?

GASPARINO: You know, it's interesting. You know, I talk to a lot of Wall Street guys (OFF-MIKE) thinking about either Romney or Obama right now. And they're kind of right now divided. You know, I don't think a guy from Texas can win again. I just -- I just think there's a Texas taint to it all. And I know the big money on the street in New York, I don't think they're going to go for a Texan.

AMANPOUR: I'm going to have to turn to the Rupert Murdoch crisis.

GASPARINO: Oh, thank you.

AMANPOUR: The prime minister of Great Britain has said that James Murdoch has to come before parliament again and clarify statements. How serious an issue is this being taken at your network?

GASPARINO: Well, it's -- you know, it's a story. We've been covering it a lot. Thank God I cover Wall Street; I don't have to report on my boss.

But, you know, here's the thing. If you look at this from a purely business standpoint, you know, market went -- I think the stock fell to $13 a share. It was around $19 was the high. After Rupert Murdoch spoke, it went up to $17 a share again. The market is much -- you know, when they heard him, his explanation, they believed him. Confidence was returning back to the company.

I can tell you, I watch a lot of corporate executives go before Congress and, you know, similar panels, and they flub it. You know, they lose confidence in the market and Wall Street, and that did not happen this time.

HUFFINGTON: Actually, Charlie...

AMANPOUR: We will see.

HUFFINGTON: ... the coverage of Fox and the Wall Street Journal of this story has been embarrassing for journalism. You know, multiple...

GASPARINO: Arianna, we've been covering it all -- we've been covering it all the time.

(CROSSTALK)

HUFFINGTON: ... editorials in the Wall Street Journal. Forget Fox. You know, nobody really expects Fox to do this seriously. But...

GASPARINO: Fox has been -- Fox has been covering this very seriously, Arianna.

HUFFINGTON: The Wall Street Journal -- the Wall Street Journal editorials, whitewashing what is a very, very serious scandal that we have not seen the end...

GASPARINO: The company -- the company has said it's serious...

AMANPOUR: Hopefully discuss this more in the green room.

GASPARINO: Although I think we've covered this well. We have straight news reporters that have covered this all day.

AMANPOUR: And on that note, coming up, the long road back to a Washington that works. I'll ask former Senate Majority Leaders Trent Lott and Tom Daschle if it's even possible to break through today's partisan paralysis. Their take on the debt showdown and the path forward, next.

(BEGIN VIDEO CLIP)

DASCHLE: Well, I think the best thing we can do is to work together to try to seek a common agenda. We've got to govern. We've got to put politics aside when the 105th Congress starts, and I pledge to do that with our minority leader, Trent Lott.

LOTT: I pledge to Minority Leader Tom Daschle that if majority leader we will continue that effort to do what is right for our country.

(END VIDEO CLIP)

AMANPOUR: Senators Trent Lott and Tom Daschle on this program nearly 15 years ago, just before the 1996 elections. Fierce partisans, to be sure, but happier warriors than the lawmakers on Capitol Hill today.

This week, with tempers flaring, the rhetoric has boiled over. Exhibit A, the war of words between two Florida Congress members, Republican Alan West and Democrat Debbie Wasserman Schultz. Wasserman Schultz fired the first shot on the House floor, criticizing West for supporting a debt deal that would cut Medicare. West's response, a furious e-mail to his colleague when he said, "You are the most vile, unprofessional and despicable member of the U.S. House of Representatives. You've proven repeatedly that you are not a lady and therefore shall not be afforded due respect from me."

So how does Washington move past this partisan rancor? Joining me with some answers are those two former Senate majority leaders, Tom Daschle and Trent Lott, a little grayer, but still smiling, still sitting together.

LOTT: Just a little.

DASCHLE: That's right.

AMANPOUR: So what is it? Is it a nostalgia for a past that never was? Is it brinksmanship as usual? Or is there a different tone in today's Washington, Senator Lott?

LOTT: Well, some people have asked, how did we make it work when President Clinton was president and the Republicans were in charge of both the House and the Senate? First of all, we did have both bodies, and that -- it is more difficult if you have one body of the Congress of one party and the other of another party.

But it was never that easy. When we were trying to get welfare reform and, you know, tax cuts, actually, balance the budget, and a lot of other issues, Tom and I went through things like 9/11, the anthrax, impeachment trial. All those were extremely difficult.

So, first, my main point would be, it was difficult then to more than we realize. Tom and I became good friends through it all partly because...

AMANPOUR: So how did you? How did you, Senator Daschle?

LOTT: I'll yield to Tom.

DASCHLE: Well, Christiane, I think, first of all, Trent is exactly right. This is not new. I mean, we had the famous caning incident about 120 years ago where a House member came over and beat the life out of a senator in the name of an issue that they both cared about a lot.

So there have been fights and squabbles and bitter, bitter partisanship and name-calling all through history. What happens sometimes is leaders will come together and find the common ground required to govern. You've got to at some point put governance ahead of ideology. And when that happens, we get the best result of good leadership in America.

AMANPOUR: Do you think President Obama has done enough of that, really building personal relationships like you used to do in your time? Do you think he has?

DASCHLE: Well, I think it's a difficult time right now. I think there are different personalities. And, you know, every time you have a change, it takes a while to develop relationships.

You know, Trent and I have a far different relationship today than we had 30 years ago when we started. But you develop that relationship over time. And a lot of these personalities, these leaders are new, so there isn't the trust, there isn't the comity, there isn't the kind of appreciation for relationship-building yet that will come over time.

LOTT: But Tom and I had some basic rules. You know, we agreed we wouldn't surprise each other and we would try to advise each other what the schedule was going to be. And both of us stuck to that pretty well. Every now and then, we'd make a mistake, and -- but I was willing to say, "Hey, Tom, I'm sorry. I didn't do that one right."

But I want to say this, too. I think that probably there's more of a relationship in communication between Harry Reid and Mitch McConnell than a lot of people realize. And you've seen -- whether you agree with what they're doing or not -- in the last week, they've been talking about, OK, what do we do if we do have to go to a fallback final plan? And they've been quietly communicating and working on that.

AMANPOUR: The Tea Party freshmen, upon whom all of this is being laid, really, who say compromise is a dirty word, are they complicating the picture?

LOTT: Well, when you're a new member, you have very strong feelings. I remember when I first came to the House, my attitude was I wanted it my way or not at all. And over the years, I found out that if you take that attitude, what you get is nothing. You've got to be prepared to do some compromising. It's not a dirty word. It's part of the legislative process. When you've got in the Senate 100 United States senators from different regions, different philosophies and backgrounds, you have to find some common ground. It's never easy.

And so I don't lay the blame on these new members. I do think, though, we're dealing with much more difficult times. During the Reagan years, when we had a big budget reduction, it was $60 billion. When we had the big agreement with Clinton, again, we were talking about billions. They're talking trillions now.

AMANPOUR: So it's huge.

LOTT: It's huge, and it touches everything, defense and taxes, entitlement, discretionary spending, and trying to get the right blend and get a result is not easy.

AMANPOUR: Let me ask you about presidential clout. President Obama made it, you know, a big deal in his press conference about not having his phone call returned. I mean, is that odd? Can you imagine a president calling Congress and not getting his call returned?

DASCHLE: Well, I have to say, I think I can recall times in the past where, you know, if you don't have anything you can say to the president, you're going to wait until you've got a constructive comment to make. And I don't think he didn't get the call. He didn't get the call in the time he expected.

But, you know, they're all in this together. They realize that. Now they're bumping up against a real deadline. It may be 4 o'clock this afternoon. It may be next August 2nd. But they know they've got a shorter and shorter timeframe, so those calls are going to get returned, I guarantee you.

AMANPOUR: And, quickly, one-word answers. Do you think they will get this deal? Will they raise the debt ceiling?

LOTT: I think they will. And I think we'll see something this afternoon. And I think next week, they'll lay out a process that will get the results, so, yeah, I think they'll get it.

DASCHLE: I agree with that. I think that we know that the consequences of failure here are just too great. And both -- all sides know that. And I think they're going to come to an agreement sometime shortly.

AMANPOUR: Thank you both very much, indeed.

LOTT: Thank you.

AMANPOUR: Thanks for coming in.

And up next, here come the grooms. We take you to New York City, where it's wedding day for hundreds of gays and lesbians. At the city clerk's office, scores of same-sex couples are already lining up to get married. I will ask Mayor Michael Bloomberg why he's taken up their cause and whether he sees the White House in his future.

AMANPOUR: Same-sex marriages are now underway in New York, the largest state in the country to make them legal. The law went into effect at midnight, and today, nearly a thousand couples in New York City alone plan to make it official.

Mayor Michael Bloomberg was a major force behind the new law. And this afternoon, he will officiate at the wedding of two of his top aides, John Feinblatt and Jonathan Mintz. The wedding will take place at Gracie Mansion, where I caught up with them.

(BEGIN VIDEOTAPE)

AMANPOUR: Thank you all for being here.

Mr. Mayor, this was all your idea, wasn't it, to marry your two aides? Did you pop the question?

BLOOMBERG: I don't know that I could take credit for that, but John and I had a talk, and I said, "I don't know what your plans are, but if you would like, I would make an exception to my rule of nothing but my kids and former mayors and I would be honored if you wanted me to perform the ceremony."

AMANPOUR: Were you shocked? What did you think? Were you planning on getting married?

FEINBLATT: Well, sure, we had planned to get married. I think the mayor sort of pushed the schedule along. You know, my initial reaction was to just say yes there on the spot, but I thought to myself, you know, in matters of marriage, you probably shouldn't make unilateral decisions.

BLOOMBERG: That's the difference. You're going to learn that with time.

MINTZ: Very wise choice. Very wise choice. The two of them popped the question, which was very romantic, as you can imagine.

(LAUGHTER)

AMANPOUR: You've been together, the two of you, for more than a decade. What difference really will this make?

FEINBLATT: Well, I think -- you know, we have two children, an 8-year-old and a 6-year-old. And to our daughters, this will make a huge difference to them to feel like everything's equal, that we're all treated the same.

BLOOMBERG: If you remember when the founding fathers wrote the Constitution, women couldn't vote or hold office. Homosexuals faced the death penalty in some places. African-Americans could not vote. Non-property-holders could not vote.

And over the years, we have rectified injustices or improved on equality. And there's always some more things you can do. But to me, America has always stood for the freedom to practice your religion, say what you want to say, do what you want to do as long as it doesn't hurt others, and also not impose any one person's religion on others. And in this case, it's doing both.

AMANPOUR: Do you worry -- are you concerned, for instance, John and Jonathan, that there might be a backlash?

FEINBLATT: No, I think that people's views are evolving on this, and I think they're evolving very rapidly. If you look at the polls now of people who are 35 and under, 70 percent of them approve of marriage equality. And I think in less than a generation, people are going to look back and say, "What was this all about?", just the way we think what was this all about that different races had to drink at different water fountains.

AMANPOUR: I want to ask you about a leading contender for the Republican nomination, Michele Bachmann, who has said in the past -- quote, she's called homosexuality personal bondage, despair and enslavement. She's related it to Satan. What do you make of her comments?

BLOOMBERG: Well, the first thing, if she believes in something, she should stand up for them. Michele obviously feels very strongly about this. I just couldn't disagree more. But, you know, she has a right to run for president, and if the public wants to side with her, they will.

But the values that she espouses, that the Republican Party espouses are exactly the values that should be promoting this. They want the government out of your personal life. The government should not tell you who you can marry. And they think that marriage is a stabilizing influence on society, and they value the sanctity of marriage, and here are two people who want to get married.

AMANPOUR: When you talk to fellow mayors, what do you think is the likelihood of this becoming, you know, the norm?

BLOOMBERG: It's going to take off simply because of the economics and the young people, as they have more and more influence on the political process as they get older, as they vote, as they support campaigns. Nothing is ever 100 percent, but this is a trend that's going, and it's going to grow very rapidly, partially because New York is such a bellwether and so visible. And so when we do something, a lot of people, they don't necessarily copy it, but they look to see whether it would be appropriate for them, as well.

AMANPOUR: John and Jonathan, did you ever think this day would come?

(UNKNOWN): I can tell you that the answer is no.

AMANPOUR (voice-over): Later today, the mayor will marry John and Jonathan here in the backyard of his official residence, Gracie Mansion.

(on-screen): When you look at years down the line, how do you think you will define this moment?

MINTZ: We see it as this pivot point on this issue. Certainly it will be, in our family and for our children and for New York, I hope it will feel like a pivot point for America.

AMANPOUR (voice-over): I then spoke to the mayor about the economic showdown in Washington.

(on-screen): You've said that if the debt ceiling is not raised, it would be catastrophic. Tell me what you mean by that.

BLOOMBERG: Well, I don't think anybody will look ever again at America and the dollar as the reserve currency, where this is the standard by which all other risks are measured. The world won't come to an end. We will find ways to pay people afterwards and get government going again. But it puts a doubt in the back of people's minds that you would find it very difficult to erase. It's one seismic event that says you can never depend 100 percent on America's word anymore.

AMANPOUR: The White House says there has to be revenues, as well as spending cuts. Do you believe that?

BLOOMBERG: Yes, absolutely. Yes, there's just no ways, if you look at the numbers, you can't cut enough to balance the budget. And if we're going to eliminate the deficit and reduce the debt, you have to raise money from some place.

It is also true, incidentally, that America is very low tax compared to other developed countries. So -- nobody likes to pay taxes. Everybody says, "My taxes are too damn high," and they're right, except that if we want services and the services we want, we want to protect democracy, you have to have men and willing and able to go overseas and able to be supplied.

AMANPOUR: You're a very wealthy man. Would you agree to have your taxes raised?

BLOOMBERG: Oh, yeah. I pay -- I give a big chunk of my money away to charity, and the rest gets taxed at fundamentally the highest rate. I don't have any tax shelters, other than the money I give to charity is not taxable, but the rest -- I pay my taxes, and I get pretty good value for my taxes. I live in the greatest democracy in the world, and my kids have all the opportunities, and you talked before about equality and marriage and everything else. We get a lot for our tax dollars.

AMANPOUR: But, for instance, if the Bush tax cuts on the wealthy were left to expire, that's fine by you?

BLOOMBERG: I think right now is not exactly the right time to let those tax cuts expire. But if you told me six months from now or a year from now, when the economy was better and job creation was better, yeah, I don't have a problem with that.

AMANPOUR (voice-over): And in this campaign season, the mayor left no doubt about his own political future.

(on-screen): Your spokesman told the New York Times that you will, quote, "never run for office again." Is that true?

BLOOMBERG: I have -- you know, maybe the president of book club, something like that, but, yeah, no, I've -- I've had an opportunity for -- to have what I think is the best job in government. I think it's a better job than the president has. My sympathies go out to him. He's got to deal with Congress every day.

AMANPOUR: So you won't run for president of the United States?

BLOOMBERG: I have no plans whatsoever. And the answer to your question is unequivocally, no, I will not run for president of the United States, nor do I think I'd get elected, but no.

(END VIDEOTAPE)

AMANPOUR: Mayor Bloomberg, and we'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: Last week, we told you how Somalia is suffering an epic drought. Millions of lives hang in the balance in what the United Nations is calling the greatest humanitarian crisis on the planet right now.

Well, now there is new information, as well, about how terrorists are finding opportunity in this tragedy. ABC was the first American network on the ground covering the story, and Lama Hasan joins us from the refugee camp in Kenya.

Lama, even after all this time, the aid organizations are having difficulty getting the food to the most needy, aren't they?

HASAN: Absolutely, Christiane. And good morning to you. Yes, just to give you an idea, a perspective of how big Dadaab is, it is not just one camp. It is made up of three separate camps. So it's very difficult to get to those people that are spread out.

We met families that have come from Somalia and have been living here for three weeks, and they still haven't received their rations, so they haven't had any food. And the reason is because there's a huge backlog that aid organizations need to clear.

In fact, they estimate that, by the end of this week, there will be a 30,000 refugee backlog that they think they can clear by September. So until then, until the refugees are registered, they won't be able to get their rations, they won't be able to get their food. They're going to have to rely on their neighbors in the camp. They're going to have to beg them for food. And then they themselves don't have a lot to eat.

Now, as you can imagine, Christiane, there are so many stories. Every time we go into these camps, we hear heart-wrenching stories about the long journeys that these families have been making from Somalia to get here.

And we wanted to tell you about one little boy. UNICEF called us yesterday to tell us that we have to meet this one boy. And it turns out, by remarkable coincidence, that we had already met him. Here's his story.

(BEGIN VIDEOTAPE)

HASAN (voice-over): His name is Adam, 3 years old. He was so weak, so malnourished, so desperate. And in one of our first days in this sprawling place, we found him barely hanging on.

(on-screen): You think he's going to be OK?

(UNKNOWN): Yes, it will be OK.

HASAN (voice-over): Adam, like so many children, had made the long, grueling trek from Somalia, with his parents, grandmother, and three siblings in search of food and water, safety, in search of survival.

They made it here after a grueling 25-day trek, but at a terrible cost. Adam's mother died making the journey. His father told us she sacrificed herself for her children, giving them her food along the way.

That was Monday. We went to see Adam again yesterday.

(on-screen): So how's Adam doing?

(voice-over): He is getting better, his father said. He is making progress. But it is slow progress. The doctors tell us his young body has suffered greatly. His road to recovery will be a long one.

(UNKNOWN): He hasn't taken much weight, but he's not going down. It doesn't mean it's OK.

HASAN: He's stabilized?

(UNKNOWN): Stabilized.

HASAN (voice-over): He says Adam still needs to gain about 15 pounds, so the boy now has a feeding tube through his nose until he is strong enough to eat on his own.

As we left Adam clinging to his father, we looked around the hospital ward. It was full of these young, helpless, heartbreaking children. And while we left believing little Adam will be all right, we couldn't know about the other boys and girls here, and more are coming every day.

(END VIDEOTAPE)

HASAN: And the story of Adam and his family really illustrates what's going on here, how difficult it is for these families to live.

Christiane?

AMANPOUR: Well, Lama, they're now in relative safety and security in Kenya, where you are, but in Somalia, where the worst of it is, Al-Shabaab, the Al Qaida-affiliated terrorist group, is really using this hunger and particularly food as a weapon. How much is that hampering trying to attack the problem at its base, really, in Somalia?

HASAN: Exactly. What you're saying is absolutely right. That's what aid organizations are saying, that they need to tackle this at the source in Somalia, but it's very difficult for international aid organizations to operate in Somalia, because Al-Shabaab controls most of Somalia. And in the past, they have attacked (ph) these organizations, and they've made it very feared that these aid organizations are not welcome to operate there.

So they have been faced with threats. They've been accused of being spies. A lot of aid organizations have had to pack up and leave Somalia. But there are a couple who still operate there, namely UNICEF and WFP, but it is very difficult to operate on the ground there for aid organizations.

Christiane?

AMANPOUR: Lama, thank you, and thank you for bringing us this important story.

And we want to thank our viewers for responding and for their generosity so far. And you can still help bring relief to the region by going to abcnews.com/thisweek for information on how you can donate. We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: And now, the Sunday funnies.

(BEGIN VIDEO CLIP)

LENO: Well, Texas Governor Rick Perry said God is calling on him to run for president, but Michele Bachmann said that God is calling on her to run for president. You know, if God is that indecisive, he's probably for Mitt Romney, don't you think? Yeah, you know, he just can't make up his mind.

FALLON: In a new interview, President Obama says that he wants a debt ceiling deal for his 50th birthday. Then he was like, but if I can't have that, iPad?

STEWART: Republicans are no longer allowed to say that people are rich. You have to refer to them as "job creator." You can't even use the word rich. You have to say, "This chocolate cake is so moist and job creator." My favorite comic book is "Job Creator-ie Job Creator."

(END VIDEO CLIP)

AMANPOUR: We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: And now, "In Memoriam."

(BEGIN VIDEO CLIP)

MOLLOY: Mr. Speaker, the president of the United States.

SHALIKASHVILI: While we've gotten much better, we need to get much better still.

(END VIDEO CLIP)

AMANPOUR: We remember all of those who died in war this week. The Pentagon released the names of 17 soldiers and Marines killed in Iraq and Afghanistan.

(COMMERCIAL BREAK)

AMANPOUR: That's it for our program today. Thank you for watching, and we'll see you next week.

END