tv CNN Newsroom CNN July 28, 2011 10:00am-12:00pm PDT
>> reporter: and then there is the largest hacking conference in the world, and they discuss internet security. he is helping the u.s. government keep its network safe as a member of the homeland security advisory counsel. >> popular media borrows the word hacker with their clever use of computers and it started taking on a negative connotation. to people who are involved in the area, hacker still means its original purpose. >> and he says that means doing digging to understand how the technology works. "cnn newsroom" continues right now with randi kaye. a story breaking in the last
hour. the details just coming in. an awol muslim american soldier now in custody in texas found with what the fbi is now saying is a large amount of bomb-making material near ft. hood. barbara starr is all over the story and will join nus a few minutes. first, debt debate but no deal. it all comes down to numbers. i don't mean 13-digit numbers with dollar signs in front of them. i mean this number. take a look here. five days until the treasury says it will run out of borrowed money. five hours, give or take, until the house votes on the so-called boehner plan, and it needs 217 votes to pass, and it's a slam dunk, right? wrong. 60 republicans are tea party members that want huge cuts in spending and no hike in the debt ceiling. here is where the big numbers come in. the republican speaker has staked his leadership on the plan to let the treasury borrow
$900 billion right away, while cutting $915 billion in future spending. contrast that with the senate plan from majority leader reid which would hike the debt by $2.7 trillion by cutting spending by $2.2 trillion. it's not clear when the senate will vote on anything, actually. and that brings me to cnn correspondent, kate bolduan. >> reporter: sounds like they are cautionly optimistic. i am told speaker boehner said they do not have the votes yet but will pass that pill, and some news, on the senate side, the senate majority leader harry reid took to the floor and said this evening, tonight, the senate will move to act on the
boehner bill. this assumes that boehner secures the votes and does pass in the house, but this is significant, because all along we have been hearing that there was a sense that the senate was waiting to act to see what happens with the boehner bill, and harry reid was clear on the floor where he said they will take it up tonight, and it will be defeated. he is talking about defeated, because he has a democratic caucus behind him, and senate democrats released a letter, i believe it was yesterday saying that they really were unanimous is opposing the boehner bill and it would be defeated. there is news there would be more action beyond the vote of boehner's bill in the senate. >> kate, we heard boehner talking, and he is saying that he wants republicans to fall in line, as he put it. is this a great departure for him? >> reporter: we know they are candid in these meetings. but he staked a lot of political capital, not only in the debt
ceiling fight but in the proposal he is putting forward. he was blunt with members telling them to get in line yesterday, and as members were leaving, some of them were getting the message, because more and more we started to hear saying they might have been leaning yes but they were leaning more towards yes, and i kept hearing the message that the perfect should not be the enemy of the good or the doable, as one person put it in this case. so it seems like they might be getting the message. we don't count the votes until they happen so we will watch to see how close it is this evening. >> a lot of people are wondering and hoping maybe that there is back channel negotiations taking place, that maybe we're not aware of. are you hearing anything like that from your source on the hill? >> we keep hearing the communication lines are open and always talking. we know the communicators are talking back and forth. we saw people shuttling back and forthwi with papers.
they are waiting to see what happens with the boehner proposal in the house and we are going to watch what happens in the senate, and then at some point we know that if they want to move forward and actually act to raise the debt ceiling, there is going to have to be give on both sides, it appears, some compromise and it doesn't seem quite yet -- we may be getting close, but not quite yet. we're trying to figure out what exactly -- what type of vote, it could be a procedural vote or a lot of other things, and they said they would take it up and take action on it this evening, and we're working to see exactly when and what they will be doing. >> i find the voting process fascinating. they have to vote on the rules of how to vote and then spend the hours reading the
legislatestion. >> yeah, hard to explain on television. >> you are doing a great job, kate. we will check back in later on. i will staer clear of numbers entirely and look at three letters, aaa, that's the top of the line credit rating enjoyed by america. just like a ding in your credit score, a downgrade of u.s. government bond ratings would send ratings higher and that means the white house and congress are not the only ones holding cards in the poker game. the credit rating committee holds enormous power. we look at what these companies do and how they go about it. richard, we know the names. how did they become so important? >> they became important because they are the arbiters of credit
worthiness. they spend many hours looking at the data, and they have what they describe what s&p calls quantity and quality data. and that's the basis on which that company bond is traded and rated. now, during the great debacle of the great recession with the subprime mortgage crisis, randi, we know it was a fiasco. they were rating rubbish as being top notch grade investment quality vehicles. so they have been bitten. >> yes, they certainly have. i mean, these were the companies, the very same companies that gave the high ratings to those mortgage-backed securities. so why should we trust them now?
should we? >> you have got no choice. they are the only game in town. they are the rule makers. they are the ones that set the ratings. and any -- this is the funny bit, because they have the same problem in europe, here. we have exactly the same problem with greece. the ratings agencies keep saying that they will downgrade greece to default, and what the answer is of everybody from the regulators and the governments, get rid of them now! well, the only problem there is what will you replace them with? frankly, who wants an official rating agency? who wants anything of a rating agency that does smacks of any form of influence. the rating agencies at the moment are the only game in town and they are the barometers and the arbiters of what will happen in credit events. bear in mind, when they do make a decision, they can be ignored, but you ignore them at your
peril. >> yeah, they are telling america how much debt it has to shed. these firms actually rate private credit, too, in other countries? >> absolutely. s&p, and moodey's, they rate other countries, and whether it's grease or the uk, they are the massive, massive arbiters and deciders of credit worthine worthiness. do they do their job well? the critics will say no, and they point to the subprime mortgage, mortgage-backed securities crisis. they have rated something top notch for it to be turned into garbage a week next thursday, however, as long as they say aaa or aa plus or c minus and a
reverse thrust, as long as they say that, they are the rule makers. >> richard, great to have you on the show, richard. thank you very much. we are learning that new jersey governor chris christie check into the a hospital this morning and was having a difficult time breathing. his press secretary leased a statement saying out of an abundance of caution went to check on his asthma. new exclusive video after the blasts in norway. hear from the man that shot this amazing video next. we're following the breaking news story out of ft. hood texas. we will have the latest on the muslim american soldier now in custody, next. of course we are waiting for speaker john boehner to tell us the latest on the debt ceiling negotiations. we will watch that podium for you there and bring you the latest as soon as we get it.
he will speak before the vote on his bill this afternoon. so, what are we going to do with this? i don't know. the usual? [ blower whirring ] sometimes it pays to switch things up. my - what, my hair? no. car insurance. i switched to progressive and they gave me discounts for the time i spent with my old company. saved a bunch. that's a reason to switch. big savings -- it's a good look for you. [ blower whirring ] [blower stops] the safety was off. out there with a better way. now, that's progressive. didn't really know what i wanted to do. didn't like high school. and then i met my teacher, mr. mccooey,
unlike fish oil, megared softgels are small and easy to swallow with no fishy smell or aftertaste. try megared today. > there was dramatic video moments after the blasts in oslo. there was an agent passing beneath the city plaza when a bomb went off killing eight people. he said he was not sure he would live to tell about it, and he survived and was able to record amazing video seconds after the blast. listen as he walks us through his experience. >> i was sitting in my car next to the government office, and i heard this huge bang. i did not know it was the ceiling coming down, so i
immediately laid down in my car to protect myself. obviously, the ceiling does not didn't come down, so i was able to drive out of the funnel, and i saw the building totally damaged. my response was the terror attack is in oslo? pictures of 9/11 came back to me, and i got out my tape to make a documentary of what happened at this spot. i have been in rescues before, and i had to calm people down. i had to talk to them and tell them to get as far away as possible, because of more danger from the building. >> i take them away from the place, and i went inside the building as well to see if there were more injured people. >> reporter: didn't you think about your own safety? >> i did. but it was there, and after when i look at it, i can admit that it was a little stupid.
>> reporter: why did you say you were part of a rescue team? >> i said that to calm people down, and make thunderstorm aware that there were people there that could help them. i had messages from people in the government building in the last two days saying they were happy that they met me inside and i was able to get them out without damage. that means a lot that people can call me and say thank you, we appreciate that you were there at the spot and you helped us out. i can see myself on the movie you made and i'm glad we're both okay. >> this crazy guy will not move over me and i will not let it happen. what i saw is what i saw and
it's not nice but life has to go on. >> he also spoke with us on american morning, and he said the morning after the terror attacks was even more devastating. >> people all over norway when they woke up on saturday and turned on the television, the number of dead increased to eight on friday evening to more than 80 kids on saturday. they are still sitting there crying, and that's what they are doing and still in shock. >> norway's police are facing tough questions over the response to the attacks. many are asking why it took an hour for armed officers to arrest the suspect, 32-year-old anders behring breivik. we have news to tell you about an awol muslim soldier has been arrested near ft. hood, texas. officials say the soldier wanted to attack troops outside ft. hood. barbara starr is working her sources on this and getting more
details now, and as soon as she can she will join us live and we will bring that to you. gridlock in congress. markets getting skiddish. all because of the debt ceiling. also, a reminder, we are waiting to hear from house speaker, john boehner, he has a scheduled vote on his plan for the debt ceiling this afternoon, two hours of debate will follow this press conference we understand, but we will bring him to you as soon as he starts to speak from the podium. keep it here. for the efficient absorption my body needs. citracal.
always been raised. this latest battle over the debt limit renewed a question asked before, why do we even have a limit? carl is here to explain why. the credit agencies moodeys suggest the u.s. eliminate the debt ceiling altogether. why do we have it? >> it has to do with checks and balances, basically. what it does is gives congress more power of the purse strings to limit what the congress can spend. so let's say the government wants to borrow money and spend it, and congress says not so fast we will prevent reckless borrowing. in practice, it has done little to contain u.s. spending because of the fact that the debt limit has always been raised when we hit it, and it never stopped the accumulation of debt. that's one of the reasons why moodey's said maybe get rid of it altogether because of the fact that it's not containing your debt, all it's doing is
creating uncertainty when this comes up. >> how long has it been around? >> we have to go back to 1917 and world war i for that. prior to 1917, prior to the u.s. involvement in world war i, congress had to approve every instance of borrowing, and if the u.s. wants to work on the panama canal and congress had to approve that. and then the congress said we cannot approve every bar of entry into the war, and we will set a bar and don't go over it. not only has the debt limit increased, it has increased exspa denytialy. today, it's $14.3 trillion. there is a couple takeaways from this. the u.s. debt cannot be blamed
on a particular administration or party. for decades in america, it's just been how we roll. what is going to be interested to see is whether or not this gut or any government in the future is able to not only put a limit, but to try and reduce that level of u.s. debt. >> i think a lot of people are watching how washington is polling these days and not liking it much. do the debt limit battles tend to happen when one party controls one branch of the government? >> i would not say it's one party one branch. politics definitely plays a role. you had president clinton in the house and the gop controlling both branches of congress and they but heads over the debt limit although it was eventually raised. in 2006, you had president obama who was then senator obama, and he voted against raising the debt limit saying spending got out of control. you say politics playing into the debate on both sides. >> thank you. great information. polygamist leader warren
jeffs just fired all of his attorneys. we will bring you the latest on his trial from texas, next. of course, once the press conference from john boehner starts we will bring it to you live when it happens. while protecting your eyes from the sun. ask your eyecare professional which transitions lenses are right for you. ask your eyecare professional for your transitions certificate of authenticity for your chance to win instant monthly prizes or our $20,000 grand prize! the chevy cruze eco offers an epa estimated 42 miles per gallon on the highway. how does it do that? well, to get there, a lot of complicated engineering goes into every one. like variable valve timing and turbocharging, active front grille shutters that close at high speeds, and friction reducing -- oh, man, that is complicated.
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you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. breaking news now, barbara starr has just got new information on the awol soldier arrested near ft. hood, texas. >> he is under arrest and possibly now facing federal charges on bomb-making. what we now know is when he was arrested yesterday in texas by police authorities at a traffic stop after leaving a gun store and a surplus store, they went to his hotel and found a disturbing situation there. the pentagon u.s. military official telling us they found
enough material in his hotel room to make two bombs, two bombs. i want to read you what they found. i want to be very precise here. they found gun powder and shotgun shells and pressure cookers and 18 pounds of sugar that investigator believe would have been used to enhance an explosion and christmas lights that would have been used as a possible timer. they found a backpack of his in his possession with so-called j jihad literature, and he said he wanted to stage attacks outside of ft. hood. this is very significant, because investigators also found -- after leaving the gun store where he purchased weapons and weapons making material he went to a super plus store in kau lean, texas, and bought an army uniform and asked that ft.
hood patches be sewn on to the uniform. there was thinking on the part of the private 1 class that he would be doing something at ft. hood. it was back in 2009, of course, there was a mass gun attack by major nadal hassan, he killed a dozen people on the army base, and wounded about 30 more. and it has really forced the army in recent year to examine its own and think about security on its own bases. now another case whereby all accounts, a private 1st class had some plot in his mind and was assembling the materials, and this man was facing charges in the army for being in position of child pornography. he was awol and he knew that he was facing a proceeding, and had
gone awol some weeks ago and turning up in ft. hood, texas, from kentucky, that turning up in texas with all of this in his possession. randi? >> barbara starr, incredible story and thank you for staying on top of that. now i want to take you to san angelo, texas, where warren jeffs trial was set to begin on sexual assault charges. gary tuckman just got out of court. we are expecting opening argue ma -- arguments, but instead he fired his attorney. >> reporter: this could turn into a circus. he has fired all of his attorneys and said he wants to represent himself. there are no cameras in the court, and warren jeffs who we never have heard speak, and i have been covering him for more than five years and i never
heard him say more than a couple words in court, and he sounded drunk, and he was not drunk but that's the way he talks, and he said he needed to fire his attorneys for justice to be served, and his attorneys just sat there. the judge asked his attorneys what they thought about it, and he said he gives us no permission to talk. she asked -- the judge asked the other seven attorneys there and they said they could not talk. so she gave him permission to represent himself in the trial, and he could go to jail for the regs of his life is convicted, and she said the trial will begin today or monday. she's about to make that decision. it will be a circus. the man knows nothing about the law. >> sounds like a bit of a risk considering how serious the charges are. will he get any legal assistance at all? >> reporter: we are told by his attorneys who are not allowed to
talk in court, and they said he sees this as a religious defense that his lawyers cannot understand. he said that he wants to do it, and it takes him so long to talk. he literally pauses for 30 seconds before he continues into the second sentence. this trial could last forever. the judge has agreed to it, and lord knows what will happen. >> this is not the first time that he actually fired his lawyers? >> reporter: well, that's right. in this case, he has fired numerous lawyers. and the judge was thinking that he was doing this because he wanted to delay the trial. he said if you are going to represent yourself, and fire your lawyers again, you are not going to delay the trial. it's going to start today. he said i need a few days. and the prosecution said we don't object to a few days,
start monday. the jury is ready to go and they have been sitting in the courtroom since 9:00 a.m. central time, and either way the trial will begin shortly and warren jeffs will be representing himself in court. >> he is a man full of surprises. we learned that over the years. gary, thank you so much. any minute now, we would like to remind you house speaker john boehner will be speaking to tell us how much progress if any congress has made.
time right now, 33 minutes past the hour. time for the news that you missed. speaker john boehner's debt plan, and we're waiting for him to speak. he says his plan is not perfect but doable. his proposal that calls for an immediate $900 billion increase and has a dollar for dollar spending cut. and a soldier, owe specials
say in the latest news, say he wanted to attract troops outside ft. hood. the woman who saysthe former head of the international monetary fund sexually assaulted her and made a public appearance in brooklyn. she thanked organizations and community leaders for their support. she met with prosecutors for several hours yesterday. strauss-kahn has pleaded not guilty and prosecutors questioned the claim. and now umpires admits wrong call. neil says he realized his
mistake after he saw the replay. jeopardy game show host was injured chasing a burglar. >> yesterday morning chasing a burglar down the hall at my san francisco hotel until my achilles tendon ruptured and i fell in an ig know meanious heap. police arrested and charged a 56-year-old woman for possession of stolen property. once again, we have been watching the debt negotiation in washington now. what we are expecting to hear from house speaker, john boehner, any moment now. he will take that podium. there will be a big vote this afternoon, after his press
conference was rescheduled for 1:30. two hours of debate should follow the press conference on the bill and then probably another news conference after that. the final vote today would probably happen sometime around dinnertime. he has pretty much staked his leadership to let the treasury borrow $900 billion right away, while cutting $915 billion in future spending. he was sent back to the drawing board to work on the plan more, and now that plan will be voted on today. if you think about how that contrast with the plan of harry reid, the one thing they have in common, neither plan has any chance, really, of passing in the other chamber, so we will continue to watch that as we wait for speaker reid. we will take a quick break. ber .
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we want to take you right now to house speaker, john boehner, talking about his bill that should be voted on this afternoon. let's listen. >> listen, this is a challenging time for our country. americans are worried about their jobs, and they are worried about our economy, and they are worried about our debt. today the house will take action, again, on a solution to end this debt limit crisis. we will take action again, just like we did on our budget, on solutions to the problems that are facing our nation. after today, the house will send to the senate not one but two different bills that will reign in spending and increase the debt ceiling and bring an end to the crisis. when the house takes action today, the united states senate will have no more excuses for inaction. the bill is not perfect.
i have never said it was perfect, and nobody in my caucus believes it's perfect. what this bill reflects is a sincere, honest effort to end the crisis in a bipartisan way, to send it to the senate where it can receive action. throughout this debate we promised the american people that we would cut spending more than what we would increase the debt limit, and we also said we would not entertain any increases in taxes. so today the house is going to vote on a bill that meets that test. it's been certificated by the nonpartisan congressional budget office, and there are no gimmicks or smoke screens that races the debt limit and cuts government spending by a larger amount than the increase in the debt ceiling. listen, for the sake of jobs and for the sake of our country, i am asking the representatives in the house in a bipartisan way
and asking my colleagues in the senate, let's pass this bill and end this crisis. >> we have heard a lot from the majority leader in the united states senate, and when he says many we are going to face economic collapse if we don't get something done by tuesday, but yet he keeps killing the measures that we send over and threatening to do the same with the one we will send over today. harry reid can't have it both ways. the president has asked us to compromise. we compromised. we send over our idea, the vision of how we would take this country forward if we were in control, and that was to cut cap and balance. and the senate dispenced with that immediately and tabled it. the bill today represents a bipartisan negotiated agreement,
something that fixes the problem past august 2nd and allowed us to continue to focus on trying to get the fiscal house in order. the way i see it, harry reid has three different options. one is to suffer the economic consequences of default, which i hope, which all of us hope, he doesn't choose. two is to bring up the bill that we sent prior, the one that he claims to be opposed to, or to accept the compromised bill that we are sending over today so we can resolve this crisis and get on about the business of this country. >> the country is very stark. you have two different types of leadership in this government. you have one in the white house that doesn't know how to lead except from the back. a man that knew that the debt crisis was coming even when he voted against it a number of years ago.
he said he has changed his ways, but never produced a plan. you have a senate that has never produced a budget in more than 800 days, and let known only talks about what they can't bring up, but can't produce an idea. you have a speaker and leader in this house that sat down with the other party for months to find compromise. when it could not find an end that the other side could not agree to, we produced our own bill that would layout a framework of where we could go, cut cap and balance, and the difficulty is the senate never even took it up, but never even sent back any other ideas. that's contrary to everything we believe as americans, and it's contrary to everything we believe as elected representatives. you have a responsibility to lead, and you have a responsibility to join the debate, and you have a responsibility to put an idea out when the country is in a time of crisis.
once again, this republican conference will lead. what i am ashamed of, the democrats on the other side is not whipping up ideas but whipping up just to say no. america is a better place than that and americans deserve a moronee honest approach. no more tricks or broken promises. what our speaker did was go over the weekend and found compromise. republicans don't think the bill is perfect. why? because we did compromise. we will put out our ideas and that will include democratic ideas as well, and we will rise to the occasion one more time. but as the constitution says, it will have torg to the other house, and the responsibility will be on their side to make sure it moves forward.
>> days before the president's august 2nd deadline, he has yet to submit his first plan to deal with the nation's debt crisis. days before the president's august 2nd deadline, the senate is to pass their first plan to deal with the nation's debt crisis. days before the president's august 2nd deadline, not only have house republicans passed their first plan to deal with the debt crisis, later today we will vote on our second plan to deal with the nation's debt crisis. now this plan is not the ultimate solution. the president has made sure of that. he has not come to the table to address spending in a meaningful way. make no doubt about it, this is a spending-driven debt crisis. our legislation will insure that the nation keeps current on its
bills today. it will insure that we have a process to cut spending by $900 billion. and the ability to cut even more. in what i believe is that for the first time in 15 years we will have an opportunity to actually put forward a solution, a solution to the debt crisis, that being a balanced budget amendment to the constitution. one that failed by one vote in the united states senate 15 years ago. with the passage of this legislation, we have the opportunity to bring to the american people the ultimate solution to the debt crisis, and that is a balanced budget. mr. president, we still don't have your plan. mr. reid, we still don't have your plan. let's move on a plan that's a product of what you said you want, and let's solve the crisis
going forward for future generations to create jobs, hope, and opportunity, and let's finally pass the balanced budget member to the united states constitution. >> just to wrap up what you have been listening to there. that's the republican house leader speaking in washington as we get ready for a vote on house speaker's plan to solve the debt ceiling crisis. very critical of the president and the democrats saying the president has not put forth his own plan for solving the crisis, and the democrats have said that they certainly won't approve the republicans answer to the debt ceiling crisis. they call it a short-term band-aid. so we will hear from the democrats a little later on. speaker boehner you heard it there, for the sake of the country he is calling on the house and senate to pass a bill and end this crisis. he said this is not about gimmicks or smoke screens, but this is what the country needs.
tattoos, believe it or not, at science labs and doctor officers. my next guest is leading the way on what are tattoos, tiny heather, an associate professor at northeastern university joins us now from boston. heather, thank you very much for coming on the show. this is such an interesting topic here. how does this all work, and what exactly would we be putting in our bodies to make this work? >> so our nano sensors are components that are 100 millimeters in diameter and they flouresce and are embedded in the skin and we pair it with a fluorescent device as simple as the iphone which shines an area on the tattoo and takes a
reading. >> how would this simply life say for diabetics? >> so right now a lot of people with diabetes are bricking their fingers several times a day. this would be one injection a week and then a very, you know, easy reading, just light through the skin. >> i understand you've only tested this on animals so far. how did it work with them? >> so in animals everything looked very positive. >> and how long would this type of dye or whatever you might want to call it officially stay in your body? >> so our goal is for it to last seven days. what we want to do is inject it into a layer of the skin that is not as permanent as where a tattoo goes so it would slough off naturally as your skin sloughs off, and that process takes about a week. >> you quickly mentioned the iphone. can you quickly understand how the iphone plays a part here. do you hold it to your skin and it sends the information? can you explain that a little bit more? >> yeah, sure.
we were talking about developing the reader for this tattoo. my students and i were talking in the hall. it kind of got more and more complex, and i said, you know, this should be as simple as my iphone, and i held up the iphone and it was kind of a moment where we all said, oh, wow. everything that we need except for the light source is in the iphone, so what my students did as part of a student competition actually is developed this case, and it snaps right on to the iphone, and basically just has a light, and you shine that on to the skin and the camera itself takes the reading. right now we are processing that data on a computer, but we hope to develop an app some day where it will take the data, process it and give a realtime reading of let's say glucose levels. >> dr. heather clark, thank you so much. very interesting. and much more or digital tattoos i have all the details on my facebook page,
facebook.com/randikaye.cnn. want to talk more about the awol soldier's arrest near ft. hood. with me now is a police officer who worked at the gun store who helped tip off police to what might have been happening here, the plans allegedly that this soldier may have had in mind. greg, thank you for making time to speak with us. tell us what alerted you that something may not be quite right with this soldier. >> oh, he came to the store to purchase a quantity of smokeless gunpowder and did not seem to know what it was. it was just really odd, his behavior. >> and what -- what was odd about his behavior, and how much gunpowder was he looking to purchase? >> well, he selected six canisters of smokeless gunpowder, placed them on the counter and then asked the
manager well, what is smokeless boweder? if you don't know what it is, why in the world would you buy that much? >> did anybody ask him any questions about why he was buying it or what his plans were for it? >> no. it was out of the norm, but he had not done anything unlawful or illegal that would prevent the sale, so we went ahead and made the sale to him, but after the fact, once he had departed the store we had discussed amongst ourselves and came to the conclusion that it would be prudent to notify the authorities and allow them to make whatever inquiry was necessary. >> we're talking about private first class naser abdo. tell me what -- when you called authorities, what was their reaction and how quickly, if you know, did they move to take some action? >> i would -- i would acquiesce to the police department to tell
you how quickly they responded. i'm a retired officer from the agency so i called one of the lieutenants that i know. he was certainly receptive. i gave him what information i had and told him of my concerns, and he assured me that they would look into it, and from that point on you know about as much as i do. >> mm-hmm. and do you know how he got to the store? was it in a personal car, a taxi? was he with anyone? >> well, that's what also drew our attention to this young man. he arrived in a local taxi cab which is kind of out of the norm. >> obviously you're on alert. we know that ft. hood was the scene of a deadly rampage back in 2009. is that why maybe you were just a little more concerned about what this guy might have been up to? >> i don't know if it was cause for us to be more concerned. we as a rule of thumb like to
think that the safety of the community is important enough that if something does something or exhibits behavior that would be out of the norm, that we have an obligation to notify police and allow them to pursue it from that point. >> and we understand from our pentagon correspondent barbara starr who has been working her sources on this, that authorities also found, according to her sources, 18 pounds of sugar and also christmas lights that might possibly be used as a timer to set off whatever device he allegedly was planning to build. how does this sit with you? what does that sound like you to? >> well, i'm certainly not an expert. that would be something that someone from the atf would be better qualified to answer for you, but with a military background it potentially could be used for an explosive device. >> and how do you feel now knowing that he's in custody?
>> relieved. i think we've done the right thing for our community, and certainly for the fine young men and women at ft. hood. >> is this the talk of the town there in killeen? what are people saying? >> you know, i really haven't had a lot of feedback. i was uni wear of whaware of wh on until i came to work this morning. i was besieged by reporters. so i'm getting in on it the same as you folks are. >> greg ebert, nice to know that you have a police background and you certainly knew what to look for, and you probably did the right thing here, so thank you so much. appreciate it. all right. we'll take a break here and have much more news on the other side. [ male announcer ] imagine all of your missed opportunities in one place. the winning horse you could have picked. ♪ that "old flame" you should have called. ♪
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you'll get this free information kit... and guide to understanding medicare, to help you choose the plan that's right for you. as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. we are awaiting a vote in congress to raise the u.s. debt ceiling and cut future spending, something both houses, both parties, the president have all been trying to do for weeks now. these are live pictures of congress there as we wait for this vote. so is this the end of the story? well, maybe. in just about four hours, give or take, the house will vote in a largely unpopular plan from the republican speaker to let the treasury borrow $900 billion right away, while cutting $915 billion in future spending.
contrast that with a much bigger senate plan for majority leader reid aimed at keeping the debt issue at bay until 2013. assuming the boehner plan squeaks through the house here over the objections of many of his fellow republicans, the senate will take it up and promptly vote it down. whether and when senators will take up the reid plan still isn't exactly clear. this part though is clear. we're now just five days away from a potential government default. he says it will run out of borrowed money and not allow them to cover all of its bills and obligations and that brings me to my colleague kate balduan on capitol hill and sandra endo at a senior center with a big stake in the debt and deficit standoff. let me start with you, kate. speaker boehner spoke with reporters moments ago. you heard it right here on cnn. let's hear a little bit more of what he said. >> today the house will take
action again on a solution to end this debt limit crisis. we'll take action again, just like we did on our budget, on solutions to the problems that are facing our nation. after today the house, while it's send to the senate not one but two different bills that will rein in spending, increase the debt ceiling and bring an end to this crisis. >> so kate, to you once again here. does john boehner have the votes for his own plan in his own caucus? >> reporter: they didn't answer that question precisely today. i can tell you they have been working very hard over the past day, well, past couple of days to get support for it. while it looked like it could have been more in question i would say a day ago, it does seem that they are making progress in getting their caucus, the members in line to vote for this. we heard coming out of a meeting earlier this morning members saying, as we've started to hear, that the perfect shouldn't
be the enemy of the good or the doable, so you're seeing more members seeing that they are going to vote -- vote for house speaker john boehner's plan, but, again, they are not saying that they are absolutely 100% confident that they will get the vote which indicates that it could possibly be close. his margin of error from the beginning, if he can't get any democratic votes, is pretty small at this point if he's going to get this through with only republicans. randi? >> as we continue to watch the live pictures there in congress, i want to continue our conversation. what about all of boehner's tough talk, kate? do you expect that will have any payoff today? >> it seems like there's tough talk probably at least in part. members got the message as he was telling them early in a meeting yesterday that they should get their you know whats, if you will, in line behind his bill. he's speaking to conservatives who had come out kind of complaining about his package saying that it didn't go far enough. they wanted to see more dramatic cost-cutting and deficit reduction measures to be part of the plan and basically what john
boehner and other leaders is telling them is this the vehicle, the alternative, what we're moving forward, so get on board and support it and they will have to wait and see how the votes -- how the vote lands late they are evening. >> but once again, even if it passes, it really doesn't solve anything, does it? >> that's absolutely right. the reality is if this bill passes and goes over to the senate, we heard just this afternoon that senate majority leader harry reid announced he'll take up the measure and they will vote on it this evening, but we're hearing that it's a motion to table. it's legislative language saying for basically they will set it aside, effectively killing that legislation in the senate as senator reid has already said, and we've seen a letter from senate democrats, they are unanimously opposed to the boehner bill so it cannot pass in the senate, and that's really what i asked boehner today in the briefing, just a short time ago. i asked him since your bill is not going to be the one that can -- can pass congress, can you get your members to support a compromise? he very artfully avoided answering that directly, saying
that there shouldn't be a reason for anyone to vote against this and that it's a reasonable responsible bill so we'll have to see what happens after this vote and the vote in the senate this evening. it's kind of a new ball game after that. >> it certainly s.and what a ball game it is. we'll see who comes out winner here. kate balduan, thank you very much for the reporting. let me bring in sandra endo in pasadena, california, at a senior center where a whole lot of folks have a whole lot at stake, and they are all what's going on in washington. sandra, the seniors that you've met, are they alarmed so far by what they have seen happening or really not happening in washington? >> oh, absolutely, randi. a lot of opinions, strong emotions coming out. the seniors we've spoken to. a lot are worried and scared and angry about what's going on in washington. there's certainly a buzz here at this senior center, and a lot of people are just frightened because they rely on their social security and also medicare and medicaid, of course, for their livelihood. let's talk to bobby right now talking to me earlier saying
what's going on in washington is ridiculous. how angry are you? >> very, very angry. it's because i with a not be able to live the lifestyle i live if i did not have my social security, even though i work part-time, 36 hours a week, but i can't live on either one of them. >> reporter: so you would be out on the street? >> probably worse than that because i don't think the way i see some people on the street, i can i could live that kind of life, you know, because i -- i would just -- i wouldn't be able to function, you know, so, i -- i hate that this someday staring us in the fight. >> reporter: anastasia, you've been watching this political fight play out in washington. what do you think of all the back and forth bickering? >> i would like to see them all trade places with us and let us try to live on what we don't
have and what they are trying to cut even more of. social security has not even contributed to the deficit and yet they are more than happy to take it and use it wherever they like. >> reporter: and all the back and forth, the fighting? >> the political games that they pl play, it's a bad role model for our kids, i must say. truth has become obsolete and that's very sad, and yet we claim to be a country that tells the truth and that's democratic and yet we're not doing a real good job of that ourselves. >> reporter: all right. thank you so much for sharing your opinions. obviously very tough emotional time for seniors as they wait, as the whole country waits, randi, really, for some kind of deal, some kind of compromise, something. answers to come out of washington. randi? >> so it sounds like folks are certainly worried about the long term and any changes that might
happen for entitlements, social security, medicare, medicaid. >> oh, absolutely. they are relying on these checks to come, and even president obama, when he spoke, he was saying that these social security checks are in limbo. if the country is broke, they won't have enough money to send out these checks so certainly they are watching and waiting. all the seniors here. it's abuzz here at this center. people grabbing me wanting to say what they think about what's going on in washington because they are angry. they feel like they are the ones being held hostage by all these political games. >> sandra endo at the senior center in pasadena, interesting to hear some fresh voices there of folks who really have a fight under way here. thank you, sandra. we have some breaking news to tell you about right now. in awol soldier has been arrested near ft. hood, texas. the fbi found bomb-making toerls in his hotel room. pentagon correspondent barbara starr here with the very latest. barbara, tell us a little bit about who this guy is and how
this arrest came down. >> reporter: this is private first class naser abdo, and as you reported last hour it was a gun shop owner in killeen, texas, that brought him it the attention of law enforcement authorities yesterday. he went into the gun shop. the owners and workers felt he behaved suspiciously, asking about certain items, weapons items in the gun shop that he didn't seem to have very much familiarity with. after he left they called law enforcement. private first class abdo was arrested at a traffic stop in killeen, texas. when they searched his hotel room, they found what officials tell us what enough material to make two bombs. let me just tick through some of the items they tell us they found. it included gunpowder, shotgun shells, a pressure cooker, 18 pounds of sugar. they believe that would have been used to enhance an explosion and christmas lights that possibly could have been used as a timer for an explosion. abdo apparently also went to a
surplus store, ordered an army uniform and asked for ft. hood patches. ft. hood insignias to be sewn on to that uniform. all indications are that he had something in mind to attack ft. hood. apparently he told law enforcement officials he wanted to stage some sort of attack. he is actually in the army at ft. campbell, kentucky. he had been awol, absent without leave, and had been facing a court-martial over accusations that he had importantography on his military computer. oddly enough he had been granted conscientious objector status at his request some months ago so he didn't have to deploy to the war zone, went awol after, that turning up in texas, turning up next to ft. hood, of course, always very sensitive because in 2009 they had a mass shooting on that base, as you recall, in which 12 personnel died, 30 were wounded.
randi? >> barbara, do you think one of the things law enforcement might be looking at is a possible connection to the man who was the focus that have rampage back in 2009? >> reporter: well, they may look for some sort of connection. we are told that they found a backpack in his possession that had so-called jihadi literature inside of it. we haven't seen that. we don't see the direct evidence of it. that is how it is described to us, so there will be investigators that certainly will want to know at a minimum who he's spoken to, what influences he may have felt that led him to this, looking at what websites he logged on to, that sort of thing. they will be looking for anything that will tell them what led them to these actions. >> and as far as you know, nothing like this in his history at all. >> reporter: what we're told by military officials is basically his history in 2010 last summer he tried to and did win conscientious objector stat why you. he felt as a muslim he did not
want to go to the war zone and face the possibility of killing other muslims, so they gave him that conscientious objector status, but really right around that very time is when it began to surface at ft. campbell that he had child pornography, it is alleged, on his computer. he was charged with that and recommended by the military to face a court-martial over those charges, and he went awol after that. randi? >> barbara starr, great new details, fascinating details on this case of private first class naser abdo. barbara, thank you very much. and for many more details on this soldier, what was found and what's expected to happen next, go to our security clearance blog at cnn.com/security. a developing story that we're following this hour. new jersey governor chris christie checked into the hospital this morning after he experienced some difficulty breathing. his press secretary issued a statement that said out of an abundance of caution the governor went to the hospital and was given routine tests to
check his asthma. the governor is being treated at somerset medical center in new jersey, and we'll bring you updates as soon as we get them. polygamist leader warren jeffs fires all his attorneys and will be making his own case, it turns out. the very latest on that coming up. with arthritis pain... that's two pills before the first bell. [ bell rings ] it's time for recess... and more pills. afternoon art starts and so does her knee pain, that's two more pills. almost done, but hang on... her doctor recommended aleve because it can relieve pain all day with just two pills. this is lisa... who switched to aleve and fewer pills for a day free of pain. and get the all day pain relief of aleve in liquid gels.
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serve as his own attorney true justice cannot be served. he asked for more time to prepare his defense. he faces charges of sexual assault and big my. some relief may be on the way for some of the most drought-plagued areas of the u.s. the current path of tropical storm don has it headed towards some of those regions. the storm is currently working through the gulf of mexico and heading to corpus christi, texas. rainfall in some parts of the lone star state, more than 15 inches below average. the woman who says the former head of the international monfry fund sexually assaulted her made a public appearance today at the church in brooklyn. she thanked organizations and community leaders for their support. she met with prosecutors for several hours yesterday. strauss-kahn has pleaded not guilty, and prosecutors have questioned the hotel maid's credibility. here's a question for you. what do dolphins, sea lions and sailors have in common when it comes to catching terrorists? in about two minutes we take you inside what was once a top
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they are surprising secret weapons in the hunt for terrorists. dolphins and sea lions used to hunt and capture possible terrorists and detect underwater bombs. it's an amazing and unique partnership between man and animal that the navy is unleashing to keep us safe. cnn has unprecedented access to what was once a top secret u.s. navy program and takes us into the water to see firsthand these water warriors. >> reporter: playing the role of a terrorist in san diego bay, i'm trying to evade a dolphin who is trained to find hostile
swimmers. >> he's not going to make it. >> reporter: out of nowhere -- >> there, she's got him. >> reporter: i got about say 15 meters from the ship behind me, and then, boom, came and hit me right here. the dolphin hits me a marker that alerts armed security to my presence. there was a brief second where i thought i was going to make it through. the next thing you know i was staring a porpoise right in the face. >> just got me again. whoa. in a minute, she's back on her boat and getting some tlc. i guess my combat ship attack
foiled again. undaunted, i try underwater with my scuba gear on. here's what the camera on the dolphin saw. underwater or on the surface, the dolphin finds me every time. so how does she compare to say suppose you had a side scan sonar on the bottom of this boat, what's the difference? >> she's able to pick out details about a object that we would only dream to have on side scan sonar and she can do it at great ranges with 100% reliability. >> reporter: dolphin is looking for a swimmer like me, so she's going to hit this ball right here. >> yes. once she's sure that that's a swimmer, there she goes. she just touched that ball right there. >> at this point we'll have to get out of the way of the hammer. he'll let her know good girl, thanks for keeping your eye out for us. he's going to let her know she did a good job and giving her the marker, and there goes the
marker, so now she's on her way like a shot. as you know, it's a pretty good little bump. let's windchill and see. >> reporter: that's one way to put it. >> that was an amazing story. tell me, how many attacks have they actually foiled? >> reporter: well, randi, we know for sure that they have foiled one attack and that was mine on the ship in san diego bay, but the navy is understandably pretty close about the actual number of missions it conducts. these marine mammals can be deployed anywhere in the world in 72 hours, so while they haven't told us how many actual attacks they have actually intercepted, we do know it has a strong deterrent effect and to date in all of my research i couldn't find aron example of a successful combat swimmer attack so it seems to be pretty effective. >> sea lions is getting in on all this action, too. is their role different from the
dolphins. >> reporter: both the sea lions and dolphins can be used to perform what the navy calls swimmer interdiction, intercepting a combat swimmer as you saw in the video. they do have slightly divergent roles and have slightly different techniques but the principal is the sim. >> how many sea lions and dolphins are we talking about here, and how long does it take to train them? >> reporter: as you can imagine, it takes a long time. we saw one sea lion that was 10 months old, a baby essentially, and he was just starting his training which will end up several years to become fully operational. right now the program incorporates about 75 dolphins and about 35 sea lie i don't understand in total. >> and is there something particular about sea lions and about dolphins that they were chosen? >> reporter: yeah. they have these incredible natural capabilities that can be harnessed for this mission. for dolphins they have top of the line sonar, far outpacing any technology that we could use to try and replicate it, and for the sea lions, they actually
have a very keen sense of hearing and eyesight that works underwater to either find swimmers or there's a secondary program where they find objects underwater as well. >> how long has this program been going on? >> reporter: believe it or not since the '60s. originally they wanted to study marine mammal to see if they could improve the efficiency of torpedos by looking at the hydrodynamics of these animals, but very quickly they realized, wow, we can put these mammals to use for a more interesting purpose. >> well, even though you were foiled, i'm sure you were very impressed. kaj larsen, great story. thanks for bringing it to us, and the entire cnn presents documentary airs sunday at 8:00 p.m. eastern and pacific time. it's 20 minutes past the hour. let's check on the top stories we're following right now n.norway, police are preparing to interview the suspect in last week's terrorist attacks for a second time tomorrow. anders breivik is being held in
solitary confinement and was last interviewed on saturday. police say they have new information, and bravic is likely to face more interrogations in the coming weeks. attorney general eric holder has agreed to meet with family members of 9/11 victims. that meeting is scheduled to take place august 24th. holder is expected to talk about the next steps in investigating claims that journalists working for rupert murdoch's news corp. tried to hack their phones. a bit of good news for the job market today. the number of first-time applicants for unemployment benefits fell below 400,000. it is the first time that's happened, in case you're keeping track, since early april. the august 2nd deadline looms, but is a default as bad as it really sounds? find out next in this week's "q&a." ♪ ♪ look at that car, well, it goes fast ♪ ♪ givin' my dad a heart attack ♪ [ friend ] that is so awesome.
back into the stands. [ding] [fans whirring] announcer: chill raw and prepared foods promptly. one in 6 americans will get sick from food poisoning this year. check your steps at foodsafety.gov. so we all know defaulting on a personal loan is widely seen as negative, but does the same logic hold true for our country? our resident business experts
ali velshi and richard quest tackle that in today's "q&a." >> quest means business and so do i. we're here together in the cnn newsroom around the world. hello, richard. >> good day to you, ali. we are talking business, travel innovation. nothing is off limits truly today because we're talking about governments defaulting on loans. >> nothing is off limits, including debt limits, richard, been the talk of washington for weeks, but not just an issue here in the united states. it's an issue around the world, so here is our question. does it ever make sense for a country to default on its debt? richard, i'll let you go first. you've got 60 seconds. >> unfortunately, the answer is most definitely yes. sometimes defaulting on debt, it's the only way out for countries. over the past 200 years there have been dozens of defaults. among the most recent, russia in 1998, argentina in 2001.
both had massive defaults. mexico in '82. narrowly avoided the same defeat in 1994. because behind default bad economic policies. default is evidence of an economy in crisis, stretched to the breaking point, when no one will lend money, bills can't be paid. it is default that forces a change in policies, default that ultimately allows countries to recover, so factor it into the united states and ask yourself is the united states running economic policies which are no longer sustainable? is there a plan to get out of the mess? the u.s. may be a handful of countries that have never defaulted, but such a situation has reached so mess' moment that maybe default is the only answer. >> wow, wow. all right, richard. my turn. i got a minute now. it's about responsibility. if you have borrowed money, richard, you have to pay it
back. that is as true for you as me and it is for companies and countries. occasionally as you have mentioned there is no other choice but default, just like individuals sometimes have to declare personal bankruptcy. sometimes countries simply can't pay what they owe. let me take one example that you cited. in 2001, argentina defaulted on $100 billion in debt. oh, if we only had $100 billion to worry about. the immediate pain was severe. argentina's economy has recovered, grown more than 8% a year since 2003, but, rich, circumstances matter, and default, as you say is an absolute last resort. now thanks to the fact that it's part of the eurozone, greece isn't out of options yet, at least not yet, and now here in the united states, wow, it's just irresponsible that the default you speak of is even a possibility. the united states can afford to pay its debt. it can increase its borrowing. the fight here is over whether we want to, and with the full faith and credit of the u.s.
government on the line, richard, it is not and should not be an option. >> oh. all right. >> well, at least we disagree. >> now let's hear the voice to actually put us to a real test of mettle for default. >> good day, gentlemen. let's hop right into it. we'll start with an easy one, okay? according to the treasury department, which individual country holds the most u.s. debt? is it a, china, b, united kingdom -- ali? >> china. >> that is correct. china holds 7.5%. >> we both knew that of the u.s. debt. >> well, next time you'll ding in quicker, how about that. question number two. which of the central banks of these g-20 countries has the highest interest rate, is it a, brazil, b, russia, c, indonesia or, d, argentina?
richard? >> i'm going with brazil. >> that is correct. brazil is at the top of the list with between 12.25% and 12.5%. on to question three. according to the women's tennis association, which player owns the record for the most double faults in one match? is it a, maria sharapova, b, venus williams, c, anna kournikova or d, billie jean king? >> oh, boy. richard, you go first. >> all right. i'm going to go first with c. >> that is correct. >> that's what i was going to say. i just didn't want to be wrong. >> she had 30 double faults in a
match in 1991 and still won. congratulations, richard. >> you are the luckiest guy i've ever met in life. >> i've got -- what can i say? what can i say? that does it for this week. remember, we are here each week thursday on "quest means business" 1800 gmt. >> and keep the comments coming on our blogs. tell us each week what you want the two of us to speak about. see you next week, richard. >> victory is sweet. imagine a world of advertising where women actually appeared as they are? well, up next, we tell you about a country headed in that direction. [ barks ] ♪ [ cat meows ] ♪
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37 minutes past the hour. time for the news that you might have missed. last hour speaker john boehner spoke about his revised debt plan that's up for a house vote today. boehner says it's not perfect but it's doable. boehner's proposal which calls for an immediate $900 billion increase in the debt ceiling now meets his pledge to match any debt ceiling hike with dollar-for-dollar spending cuts. even if the bill passes the house, it still has to face the senate, and senate democrats say the plan has no chance of passing the senate. an awol muslim soldier seen in this file video has been arrested near ft. hood, texas, the scene of a deadly shooting rampage two years ago. in the latest incident the soldier said he wanted to attack troops outside ft. hood. fbi agents found bomb-making materials in his hotel room and jihadi literature in his backpack. i spoke to a gun store employee who tipped off police to this suspect, and i'll have some of that interview for you just a
little bit later on also, there will be a live press conference coming up on cnn from ft. hood. we're going to be hearing from the killeen police, the killeen, texas police on the latest on the investigation there and probably a little more new information on this suspect. meanwhile, new jersey governor chris christie checked into a hospital this morning. his press secretary said he was having difficulty breathing, but he's now doing fine. the governor underwent some tests and is feeling great and looking forward to getting back to work tomorrow, according to his team. the governor says he's extremely grateful for the quality of care that he's receiving. british advertising authorities have banned a lancome ad featuring julia roberts for being overly air brushed. here you see the air brushed julia and you can see the more natural julia. "the huffington post" rrts a female member of the british parliament first raised concerns about the ad saying air brush is can't beauting to young women's problems with body image and
confidence. can't look too good, i guess. jeopardy came show host alex trebek tore his achilles tendon chase i chasing down a burglar. >> yesterday morning chasing a burglar down the hall at my san francisco hotel until my achilles tendon ruptured and i fell in an ignominious heap. >> trebek says he will have surgery tomorrow. police arrested and charged a 56-year-old woman for possession of stolen property. why did it take china's top leader five days to visit the site of a deadly train collision? his stunning answer coming up next in "globe trekking."
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with chinese outraged over a deadly high-speed train collision, a rare admission from china's top leader. five days after the accident that killed 39 people, premier wen jiabao said it took him so long because he was in the hospital. he didn't say why he was there but it's extremely rare for chinese people to talk about their health. officials have been accused of a cover-up of the accident. the accident happened when a bullet train rammed into a stalled train. wen today pledged a full investigation and punishment for anyone found to be at fault. china's state-run news agency says design flaws and signal equipment led to that collision. at least 49 people are dead after historic rains in south korea. take a look at all that water in
the capital seoul. flooded streets looked like rivers. rain fell at the rate of two inches per hour in some parts of the city. damage to seoul in surrounding areas could top hundreds of millions of dollars. and we want to let you know that at 3:00 this afternoon we will be hearing from killeen, texas police about the arrest of an awol muslim-american soldier. he's been on the run since 2010, arrested today with allegedly plans to possibly set off two bombs near ft. hood in killeen, texas. we'll bring you that press conference live right here on cnn coming up. we'll take a break here and be right back. teacher i ever had. she's amazing, i love her. [ jade ] i'm teaching jasmine ap biology. i knew she had the talent... i always pushed her. [ jasmine ] her class you literally have to think, like it takes so long to do her homework. [ jade ] she's gained the confidence that she can achieve anything. [ jasmine ] i'm going to be a pediatrician...
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awol soldier officials say was planning to attack troops at ft. hood, texas before his arrest. private first class naser abdo allegedly bought ammunition in a gun shop near ft. hood. workers at the shop tipped off police who then arrested him. earlier i spoke to a man who works at that gun shop, and i asked if he and his co-workers were on alert in the aftermath of the deadly shooting two years ago. here's part of what he told us. >> i don't know if it was cause for us to be more concerned. we as a rule of thumb like to think that the safety of the community is important enough that if someone does something or exhibits behavior that would be out of the norm that we have an obligation to notify the police and allow them to pursue it from that point. >> abdo is a muslim-american who went awol from ft. campbell, kentucky after being charged with possessing child
pornography. officials say they found in his hotel room enough material to make two bombs. killeen police are expected to hold a news conference on this subject at the top of the hour at 3:00 p.m. on the east coast, and we'll bring it to you live when it happens. airlines are pocketing $25 million a day from passengers' pockets after an unplanned tax holiday. that's money that was going to airport construction projects. unfair way to make a buck, or is this just business? we debate it next.
today's stream team directly impacts anyone who flies. last friday congress failed to approve the extension of a bill to keep the federal aviation administration running meaning that as of saturday airlines no longer noded to pay the federal government $25 million a day in tax revenue. that's a 15% tax break on airline tickets, or about $50 for international travel and as much as $30 on a typical domestic ticket, but did airlines pass on the savings to us? no. nearly all the major domestic carriers, including american airlines, jetblue, airways and southwest raid their airfares. consumers won't be paying more, even as southwest hiked fares by $4 each leg, according to its spokeswoman. only spirit airlines and alaska air have decided to keep their
fares the same. joining me now to talk about this is the former inspector general of the department of transportation who works for a law firm and sues airlines. also with us today, rick seany, the ceo of farecompare.com and seth kaplan, managing partner "airline weekly." rick, i want to start with you. is it unfair, do you think, for airlines to pocket this money? >> i don't necessarily think it's unfair. i don't think it's very reasonable from a consumer perspective. this is absolutely a windfall. it's not going in the government's pocket. it's not going into the consumers' pocket. it's going into the airlines pocket. if the airlines split the difference with consumers, i think consumers would have given the airlines a bunch of credit. this is after the last three years of being nickel and dimed with a variety of fees. >> mary, what do you think about it? >> well, it is unfair because these ticket taxes don't go into the general united states revenue. they go into a trust fund which funds the construction of airports, runways, air traffic
control systems. we desperately need this air traffic control system and by the airlines pocketing the money instead of giving it back to the consumers or they could fund some of this construction that they need at the airports, they are being unfair to literally our nation and the traveling public and it's -- it's just plain bad pr, bad practice. >> seth, what do you say to consumers who say, hey, the airlines should give us this money, give us a break? they shouldn't pocket it. >> certainly what marry is saying. very well intentioned, but the problem is that the very most basic law of economics, that's supply and demand, still applies here. basically nothing has changed between last week and this week in terms of how much consumers are willing to pay for a ticket, and in the end airlines and all businesses don't really set prices, consumers do, and it's the business' job to charge people what they are going to pay. that's true of corn flakes and of airline tickets. people are willing to pay what they were last week. if airlines suddenly lowered
ticket prices by an average of $60 which is what it would be, guess what, almost every seat for the next six weeks would sell out very quickly and people who travel wouldn't even be able to do that so what i would say though is if we take this slightly misguided but well-intentioned crusade that everyone is on and turn it into something positive, though airlines don't control prices, what they do control supply, the number of seats that are in the market, and if airlines knew that for an extended period of time this major cost to them would be reduced, guess what? they would put more seats in the market, and that in fact would lower fares, just as if oil prices suddenly fell, yeah, and so that -- so, you know, hey, i know we're not in the mode right now of looking of ways to spend more federal money certainly. >> right. >> but plenty of other people are going to get to keep their subsidies, farmers and everybody else. congress might want to think about saying no taxes through the end of 2012 and watch what happens. >> let me just jump in on it. how long might this go on, we're
talking $25 million a day here, will this go on as long as a shutdown lasts? >> it's $25 million a day and congress is fighting over a $14 million issue. this is all surrounding 13 airports that are being subsidized by the government to the tune of $14 million, half a day's worth of this crisis could be done. they should get it fixed, a, and i disagree. in texas right before kids go back to school we have a sales tax holiday t.spurs on a bunch of business. people go and they shop. if all the businesses in texas that are related to schools actually lifted all their prices for that one or two days for that holiday, i think consumers would be upset, and that's why consumers are upset right now. >> mary, i'll give you the final word here. >> well, this is not a tax break or this is not a subsidy for the airline. the airline gets billions of dollars of subsidy a year. this is taking advantage of a loophole because congress is dithering. the blame belongs squarely on congress.
it is by the way oversubsidizing some passengers to the tune of about $1,000 a flight which is one of the things, so this is congress to blame, and the airlines are taking advantage of this. this is not an unintended subsidy, and by the way, to correct something. they do control the number of seats, the slots, the prices. that all came in 1978 with the airline deregulation bill. >> okay. all of you very healthy discussion there. thank you very much for your time. have a great day. is the president losing the support of independents? mark preston will break down some new polling numbers for us right after this break. (screams) when an investment lacks discipline, it's never this obvious. introducing investment discipline etfs from russell. visit russelletfs.com r a prospectus, containing the investment objectives, risks, charges, expenses and other information. read and consider it carefully before investing.
update. cnn's senior political update mark preston joining me from the political desk in washington. hi there, mark. you have troubling new polling for the president. >> reporter: i do, randi, pew research center poll has comout in the last couple of hours that spells troubling news for the president's re-election prospects. let's take a look at this overall number right now. it shows that the president has lost seven points from may until july on this poll right here. at the same time the generic republican, that's a republican that they don't actually have a name, has actually increased by three points. what that shows right now is that it would be a -- a tied up race between president obama and the republican that the gop finally chooses as their nominee, not good news for the president. what's even more troubling is let's look at the numbers right now. where is he losing the support? losing it from the all-important independents there. it shows he's lost 11 points right now, randi, from may until july, and the republicans have picked up fo