We've had way too few voices calling out this kabuki theater on the debt ceiling for what it is, a manufactured political crisis, when the real crisis is the lack of jobs in the United States. Katrina Vanden Heuvel did just that on Reliable Sources today.

KATRINA VANDEN HEUVEL: Yes. So I think in the last weeks, we've seen more attention paid for the fact you no longer have a Republican Party Richard Nixon would recognize.

This is an extremist Republican Party willing to blow up the global economy by tethering draconian, cruel deficit cuts to the debt ceiling -- a debt ceiling, by the way, Republicans seven times voted for to lift under George W. Bush. But I think the largest crisis the media -- the media malpractice, Howard, is the fact that you have the idea, the concept that America is bankrupt. It is not bankrupt. What is bankrupt is the inside the Beltway consensus that the real crisis in this country is about deficits and debt. When you look at the front pages in the last days, the last few years, Howard, what is it? It is a jobs crisis.

So, when you listen to Bill Daley on "Meet the Press" this morning and he said President Obama came to Washington to do something big, what we need is coverage of what a grand bargain on jobs could be, and the consequences of what we're seeing inside the beltway for millions of Americans.

Naturally no progressive can come on CNN without a conservative being put on as well for "balance", so we got treated to Tony Blankley giving the usual Republican talking points on their refusal to raise taxes when we've got some of the greatest income disparity since the Gilded Age and painting Democrats who don't like this deal as being unreasonable for not wanting to see our social safety nets cut instead of raising taxes on the rich.

Full transcript below the fold.

KURTZ: The clock is ticking as President Obama and Hill leaders meet again tonight to try to hammer out a deal to avoid a government default, even as House Speaker John Boehner warning last night that he wants a much smaller deal than the $4 trillion President Obama has been pushing. This high-stakes game of budgetary poker poses an unusual challenge for journalists.

Democrats have been saying they're negotiating in good faith by offering major spending cuts and modest tax increases, while the Republicans are holding the economy hostage by refusing to talk about raising revenue. The Republicans reject this, saying they're protecting the economy by focusing on out of control spending.

So, who's right?

Well, David Brooks, the conservative "New York Times" columnist called out the GOP this week in a way that most mainstream journalists have not. He writes, "If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in exchange for a few hundred billion dollars of revenue increases. The Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative."

Joining us now to talk about the coverage of the budget showdown, in New York, Katrina Vanden Heuvel, editor and publisher of "The Nation" magazine. And here in Washington, Tony Blankley, executive vice president of Edelman Public Relations and a former press secretary for Newt Gingrich.

Katrina Vanden Heuvel, here's David Brooks saying the republicans are not a normal party. Have most of the media been unwilling to point a picture and say the Republicans are largely responsible for blocking any deal here?

KATRINA VANDEN HEUVEL, THE NATION: Yes. So I think in the last weeks, we've seen more attention paid for the fact you no longer have a Republican Party Richard Nixon would recognize.

This is an extremist Republican Party willing to blow up the global economy by tethering draconian, cruel deficit cuts to the debt ceiling -- a debt ceiling, by the way, Republicans seven times voted for to lift under George W. Bush. But I think the largest crisis the media -- the media malpractice, Howard, is the fact that you have the idea, the concept that America is bankrupt. It is not bankrupt. What is bankrupt is the inside the Beltway consensus that the real crisis in this country is about deficits and debt. When you look at the front pages in the last days, the last few years, Howard, what is it? It is a jobs crisis.

So, when you listen to Bill Daley on "Meet the Press" this morning and he said President Obama came to Washington to do something big, what we need is coverage of what a grand bargain on jobs could be, and the consequences of what we're seeing inside the beltway for millions of Americans.

KURTZ: I would agree that 14 million unemployed often get lost in this debate.

Tony Blankley, I'm not taking sides here. The Republicans have -- they're standing on principles. But journalists could easily write that by saying we'll negotiate anything, except tax increases, which is, of course, have the debate, Republicans are blocking progress toward a deal.

TONY BLANKLEY, COLUMNIST FOR TOWNHALL.COM: Look, I'm in favor actually of objective journalism.

KURTZ: OK.

BLANKLEY: When I was Newt's press secretary, I would seek out the journalists who knew the substance and were trying as hard as they could to report objectively. There's not as many of those reporters and those news organizations around now as there used to be.

If you have the choice between a transcription service, where the media just reports what each side says, and cheerleading, which I think is sometimes we ultimately we get, I'll take transcription over cheerleading, but I prefer journalism over transcription.

Let me give you just one example, and he's a good friend of mine. Major Garrett of today's "National Journal." He's one of the best reporters, he's got a story on this budget, where he leads in the first two paragraphs characterizing Boehner's position to Watergate, because he's standing firm on no taxes.

You have to get down to the 13th paragraph of a 15-paragraph story, before he says the Democrats are just as much to blame for refusing to deal with entitlements as the Republicans are for taxes. So, is that -- Major is one of the best reporters in the business. Is that objective journalism?

KURTZ: But on that point, Katrina, Democrats have their own sacred cows. Medicare is one of them. It's a great issue for the Democratic Party. But President Obama has put nearly $500 billion in Medicare cuts on the table, saying the Republicans now should give something on revenue. But, again, I don't see the press -- I think the press is so worried about appearing to take sides that they don't want to say, well, the Democrats took another step here and the Republicans, and, look, Boehner is under a lot of pressure from his Republican Caucus, are still digging in.

VANDEN HEUVEL: But let me reframe it if I might. There's too much covering this debate in terms of political gamesmanship, brinkmanship. What we need is not the grid of negotiation but the sensible policy, context and history.

Senator Moynihan once said people have a right to their own opinions but not to their own facts.

I think we need more reporting on stories, for example, like what "The New York Times" did in March of this year showing that G.E. profited $14 billion in 2010 and paid zero -- nada -- in federal taxes. These are the stories that should provide the context for understanding that there should be no moral, political, or policy equivalents between raising taxes on the very richest in corporations and taking away lifelines for millions of Americans who have already borne the brunt of these cuts.

I come back to the fact that sourcing, Howard, sourcing journalistic issue. Where are the stories? We need more stories about the consequences of what is going on inside the beltway around this country.

KURTZ: I understand that you want to broaden the media's economic debate, but there is, of course, the August 2nd deadline, after which the United States government will be in default.

VANDEN HEUVEL: It relates to that.

KURTZ: Let me -- let me bring Tony back in, because this whole argument about tax increases is an interesting challenge for the press. Obama says close what he calls tax loopholes -- corporate jets, the oil industry, hedge fund managers, you know, great populist targets. Republicans -- and that's a modest amount of money, let's face it -- Republicans say that's a tax hike. We don't want to raise taxes.

Shouldn't journalists say most people wouldn't think of ending ethanol subsidies as a tax hike? It's the closing of a tax preference that a lot of people think can't be justified.

BLANKLEY: Well, it's not a question really of what most people think, but what an objective journalist who's informed judges to be the reality. And so, one man's tax break is another man's interest deduction, which is not a tax break but necessary to support --

KURTZ: That's a tax preference that lot of people love because they have housing (ph). But still costs the treasury money.

(CROSSTALK)

BLANKLEY: Yes. Well, the phrase "costs the treasury money" suggest it was the treasury's money in the first place.

KURTZ: Foregone. All right.

BLANKLEY: But, look, I'm in favor of the journalism reporting in detail what each party is proposing and the history of those proposals. For instance, obviously, from the Republican point of view, in 1982, I was with Reagan and the White House. We had the (INAUDIBLE) taxing deal where Reagan was promised $3 of spending cuts for $1 of tax increase.

The history was that he didn't get all of the spending cuts. He got all the taxes.

So, when you analyze what's the likelihood of proposed spending cuts coming online, I'd like to see journalism report on the history of promised spending cuts and how many of them actually came out. That would be a useful --

KURTZ: Sometimes they have. Do you think the coverage, Tony, has been fair or biased?

BLANKLEY: Oh, I think it's been in a broad zone of fairness right now, because it's largely been transcription. It's largely been they say -- the Republicans say this about themselves, the --

KURTZ: Right, which doesn't help viewers that much.

And, Katrina, I asked Eric Cantor, the House majority leader, well, what are you willing to give up since the Democrats have put an awful lot in the trillions of dollars of spending cuts on table, which they're not necessarily in favor of? And he said, well, look, we don't want to raise the debt ceiling. We're raising the debt ceiling, that's our sacrifice in exchange for spending cuts.

Do you think the press has accepted that frame of the issue?

VANDEN HEUVEL: Yes. I think, well, first of all, Howard, you know this better than I do -- there's no more one press in this country. There are two, three, four different medias.

And Eric Cantor can't. I mean, here's a guy who has said, if you don't play my game, I'm going to walk away. I mean, that is not politics. And though I think President Obama has too often led with compromise, there's no question that if you look at the compromise that the Democratic Party has made rightly or wrongly in my view over these last six months, a year, there is a sense of shared sacrifice.

I come back. I agree with Tony Blankley, by the way. Maybe our journalism can accommodate history or context, but we need to look back at the last 30 years and see how the tax burden on the very much rich is today at the lowest point in decades.

That should play a rule in the conversations, Howard, about the debt ceiling, about deficit reduction.

And, finally, the discredited supply-side economics that has infiltrated the media, call it bias or whatever, that is leading the way our coverage is framed. The idea that spending cuts lead to recovery or prosperity -- no.

KURTZ: OK. Well, there's a great debate about that.

Let me close with this, Tony Blankley. Each side has its talking points. You talk about transcription journalism. You don't seem that uncomfortable with it, but I think it's almost a surrender to just say one side says this, one side says that. Where is, you know --

BLANKLEY: I completely agree. I think there's a rich, recent political economic history to be reported on by the media and they're not doing enough of it. I agree. I wouldn't be -- as a conservative Republican, I'd be very comfortable with a deep historic analysis and reporting by journalism regarding the history of tax cuts, budgets, revenue raises, whether you raise the rates, do you increase revenue. There's a lot of good stuff there.

KURTZ: Well, we still have an opportunity with the debate just really heating up and the deadline facing us. Let the record show, I got Tony Blankley and Katrina Vanden Heuvel to agree on at least one point here this morning.

VANDEN HEUVEL: History.

KURTZ: Thanks very much for joining us.