KING: Here to debate the numbers and the politics of the economy, two members of the Senate Budget Committee. Ranking Republican Judd Gregg of New Hampshire and Democrat Sheldon Whitehouse of Rhode Island.

Senator Gregg, let me start with you because the House has just passed the Wall Street bill and it's going to come now to the Senate and there's a question about whether Leader Reid has enough votes.

Republican Scott Brown has said, I'm not so sure. I want to think about it. Will you help bring this vote to the floor for an up- or-down vote? Or would you participate in blocking it?

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Well, I presume that the Democratic leadership will have the votes to pass this bill. They did once before.

KING: Will they have your vote?

GREGG: Oh no. No. This is not a constructive bill in my opinion. It will create more spending. It will create more government. It will create less credit. And in my opinion less jobs.

It's a bill that will create a very significant contraction and credit on main street in my opinion. And it doesn't address the basic problems. It doesn't address Fannie Mae and Freddie Mac which is half a trillion dollar cost to the taxpayer that's sitting there, that we're going to have to pick up.

It doesn't address underwriting standards very well. The derivatives language is not well thought out in my opinion. And I don't think Wall Street's all that upset about it. They'll figure out how to work their way around it.

But who should be upset about it and who I think will be upset about it as they figure out how this thing works are small banks and community banks and medium sized banks because it's going to be much more difficult to lend and the bureaucracy is going to be really difficult to deal with for those small banks.

KING: Senator Whitehouse, is it as horrible and as destructive economically a bill as Senator Gregg suggests?

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND: No, it's the most significant reform of the financial system since the Great Depression. It creates firewalls so that banks are no longer investing in highly speculative matters with other peoples', regular folks' money.

It separates the investment side from the regular banking side. It requires derivatives to go through a transparent market before they can be sold, and put some transparency and a spotlight onto all of that. And it puts a very important --

KING: Well, then let me ask the question this way. If it's so good -- you describe it as great -- then why can't the leadership find -- right now you've got one or two Republican votes. Why aren't six or eight or 10 or 12 or 20 or 30 Republicans coming over?

WHITEHOUSE: We have, I think, probably now, over 100 exercises of Republican obstruction on the Senate floor. There is a strategy that the Republicans regrettably have pursued to basically block anything that Barack Obama wants.

I think they've said he's promised change. If we can stop any change, we can blunt his promise to America. And that gives us a better chance in the election. And the consequences for the financial system of not having these safeguards in place are secondary to the political goals of blocking everything that the president wants to achieve.

KING: Let's come back to that point, Senator Gregg, and specifically --

GREGG: I'd like that pick up on that --

(CROSSTALK)

KING: Specifically I want you to come in, but I want you to also address specifically Leader Boehner's comments over in the House that this financial reform bill -- you've made clear you don't like it. Is it like dropping a nuclear bomb on an ant?

GREGG: No, I would not characterize it that way at all. It's an attempt to address the issue of what caused the significant financial crisis we had late 2008. But it doesn't address it. It misses the point.

Now there was a very strong bipartisan effort to move forward on this bill. I was very much involved in that. I went and negotiated for months with Senator Jack Reid, Sheldon's partner from Rhode Island, on the issue of derivatives reform. Bob Corker -- negotiated for months on the issue of resolution authority.

There was a lot of efforts to try to get this into a bipartisan form. Unfortunately, it didn't come out that way. It came out in a way that really, in my opinion, does not get to the core issues.

And the core issues are how you make sure that we do not have, going forward, a systemic threat to our system and how you keep the United States the best place to go to if you've got an idea and you want to go out and take a risk and create a job to get credit.

Both of those issues are not addressed in this bill. In fact, the ability to get credit is significantly undermined. And I think Sheldon's comments were really unnecessary and rather partisan, to be kind, when he says that we're just trying to obstruct this bill.

Just the opposite. Most of us on our side of the aisle who were involved in negotiating this bill wanted a bill that we could all vote for. And Bob Corker said at the end of the conference, we could have gotten a 70 or 80 vote bill here in the Senate.

We could have gotten that. But for reasons which I think were rather politically, basically, the issues involving Blanche Lincoln and a few other issues, this bill went very hard over in a direction which was not constructive to getting credit markets under control, especially --

(CROSSTALK)

KING: Let me try -- let me try another -- no filibusters here. Let me try another issue. The president talked about it in Racine, Wisconsin today. The Democrats have tried for weeks and some Democrats have been among those objecting to the price tag of this, an extension of unemployment benefits and some other things.

They have pared the bill down. The president made the case today for passage. Listen.

(BEGIN VIDEO CLIP)

OBAMA: We want an extension of unemployment benefits for workers who lost their jobs through no fault of their own.

(APPLAUSE)

OBAMA: We want to help small business owners get the loans they need to keep their doors open and hire more workers.

(APPLAUSE)

OBAMA: We want relief for struggling states so they don't have to lay off thousands of teachers and firefighters and police officers.

(END OF VIDEO CLIP)

KING: Senator Gregg, I want to give Senator Whitehouse some time, but again, this is an issue of Republican votes. Have they pared it down enough that Republicans would now support this so that the millions of unemployed Americans out there whose benefits have been cut off will get those restored?

GREGG: Well, I think we all want to extend unemployment insurance but we don't want to do it by passing the bill on to our kids. And this bill still has $39 billion of costs which are unpaid for.

You know, the president listed three or four things there. If he was willing to pay for those things, we would be willing to vote for those things. But the simple fact is we're running a $1.4 trillion deficit.

All those bills are being given to our kids. We should not continue to add to our debt. You can't get yourself out from underneath massive debt by adding more debt. And so a responsible way to approach all these issues -- unemployment insurance and the issue of teachers -- is to pay for the spending --

(CROSSTALK)

KING: But, Senator Whitehouse -- to Senator Gregg's point, there is a growing concern in the country about spending and the deficit. Why can't the Democrats find the money, the offset, somewhere else or use or unused stimulus money? Find the money somewhere to pay for this bill?

WHITEHOUSE: The stimulus money is on its way out to continue to create jobs. So to take the money away from creating jobs and put it into supporting unemployment insurance doesn't make sense.

What makes sense, while we are still pulling out of the crash dive that the Bush economy left and that President Obama inherited, is to make sure that we can support the continued economic growth we've seen.

President Obama came in with 700,000 jobs being lost in America every month. That was a serious crash dive course that we were on. President Obama, thanks to the stimulus and thanks to TARP, has turned that around and the spending that has supported families, the spending that has grown these jobs, has been an important part of it.

(CROSSTALK)

KING: And more deficit spending -- more deficit spending is OK to deal with that?

WHITEHOUSE: There is a pivot that you have to make but very responsible economists say that if we get out of that spending too soon what we do is we pitch ourselves back into the Bush recession.

And at that point, the catastrophe begins to continue. You have to make sure that you're really healthy, that you've really got yourself in the recovery before you cut off the spigot. And particularly when you're cutting off people like, you know, Bill in North Kingstown who wrote to me, 57 years old, engineer all his life, heart condition, two notices of eviction, and he's coming up on getting evicted out of his house, and he's got no COBRA.

I mean there are human stories behind this that I think require our attention.

GREGG: There are going to be a lot of human stories around it when we basically find ourselves with the debt that our kids can't afford. And it's not a heavy lift for us to make the tough decisions down here to set priorities and pay for the things that we think are important. And that's all we're asking this administration to do.

I listen to Sheldon Whitehouse, you know, we're 18 months old --

KING: Senator, I need you to be quick.

GREGG: We're 18 months into this administration. When are they going to accept responsibility? The buck never seems to stop at the president's desk under this administration for anything. On the spending issue --

(CROSSTALK)

WHITEHOUSE: -- history is pretty clear on how we got here. And it's important to recognize that if we go back to the policies that got us here, we'll get more of the same.

KING: We are having here the back and forth and a feisty but polite back and forth. It will continue through the election in November. WHITEHOUSE: Always. Always.

KING: Gentlemen, we'll have you both back. I need to call a timeout for tonight though. But next when we continue the program and the clash, we'll continue our conversation about issues just like this.