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Debt Ceiling Battle Continues; U.S.-Pakistan Partnership in Peril?; British Royal Couple Visits U.S.; British Tabloid Shuts Down Amid Scandals; Neil Young Discusses His New Album

Aired July 11, 2011 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BROOKE BALDWIN, CNN ANCHOR: Welcome back from vacation, Miss Randi Kaye.

RANDI KAYE, CNN ANCHOR: Thank you.

BALDWIN: Great to have you back here in Atlanta.

And hello to all of you.

I want to begin with the talks on the debt -- daily talks, now, at the highest levels of government, at the White House. You have the president, the vice president, leaders of both parties are meeting right now, one day closer to the Treasury Department's August 2nd deadline. And that August 2nd deadline for Congress to approve more borrowing, or risk the government being unable to continue to pay its bills.

Now, the Republicans are saying they won't extend the so-called debt ceiling without deep spending cuts. Also, they say no new taxes on anyone.

On the flip side, you have Democrats coming forward. And they're saying that math doesn't work out. Now, the last word we heard was from the Republican House speaker, John Boehner, just a short time ago. Here he is.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I agree with the president that the national debt limit must be raised. And I'm glad that he made the case for it today. But the American people will not accept and the House cannot pass a bill that raises taxes on job creators.

(END VIDEO CLIP)

BALDWIN: So that was Speaker Boehner just a short time ago this afternoon.

Over the course of this past weekend, Boehner informed the president he cannot negotiate a long-term debt deal he and the president broached at a secret meeting some eight days ago. That secret meeting and the prospect of higher taxes appear to have caused a revolt among House Republicans. And now Boehner and his party are seeking a shorter-term deal. But the president is saying no, no. Now's the time to go big. Get this thing done for good. Here he was, the president just this morning.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I will not sign a 30- day or a 60-day or a 90-day extension. That -- that is just not an acceptable approach.

And if we think it's going to be hard -- if we think it's hard now, imagine how these guys are going to be thinking six months from now in the middle of election season when they're all up. It's not going to get easier; it's going to get harder. So we might as well do it now, pull off the Band-Aid, eat our peas.

(LAUGHTER)

OBAMA: You know, now is the time to do it. If not now, when?

(END VIDEO CLIP)

BALDWIN: Brianna Keilar live for me at the White House.

Brianna, bring us up to date. Are those high-stakes talks, are they happening right this very second?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Yes. As we understand it, Brooke, these meetings continue here at the White House, President Obama with top Democrats and Republicans in Congress.

And you heard the tone, Brooke, that the president was striking there, almost like a parent trying to get two kids to share. And he's been saying that he's bending over backwards, really giving up a lot and Republicans are not.

Of course, that is his side of the story. And I think if you were to think of him as a parent, well, certainly he has a favorite child in all of this, right? The Democrats. That certainly is his party. But you listen to John Boehner, the Republican, and he's saying this isn't just about tax increases. This is also about entitlement reform, the White House and Democrats not giving enough on this.

Bottom line, Brooke, these two sides are still very far apart. And they will continue, the president says, in meetings until they reach an agreement.

BALDWIN: Well, you and I both listened to the president today. I think he spoke for an entire 40 minutes or so. And he said today that he has bent over back backwards, those are his words, to reach a compromise with the Republicans. But he's saying that the other side will not budge. Let's listen to this portion again, the president.

(BEGIN VIDEO CLIP)

OBAMA: I do not see a path to a deal if they don't budge, period. I mean, if the basic proposition is it's my way or the highway, then we're probably not going to get something done because we've got divided government. We've got Democrats controlling the Senate.

We probably are going to need Democratic votes in the House for any package that could possibly pass. And so if in fact Mitch McConnell and John Boehner are sincere, and I believe they are, that they don't want to see the U.S. government default, then they're going to have to compromise just like Democrats are going to have to compromise.

(END VIDEO CLIP)

BALDWIN: So, the president seemed to suggest, Brianna, that the Tea Party Caucus, they're the ones holding Speaker Boehner hostage, that they will not let him compromise. What are you hearing there at the White House?

KEILAR: Well, when you talk about from Speaker Boehner's, I guess, perspective, and whether he's being held hostage by Republicans, I think what you have to look at is some of the numbers that tell you it's not necessarily surprising that Republicans are being unbending on tax increases, Brooke.

Almost all House Republicans, almost all Senate Republicans signed a pledge, literally signed a promise, made a public promise that they would not increase taxes. And, so, certainly there are some Tea Party Republicans who came into power in this last election promising to cut government, shrink government. And they're not going to give on this. Some of them wouldn't raise the debt ceiling no matter what they got in these negotiations. But certainly the widespread emotions among Republicans is no tax increases.

BALDWIN: Now, let's talk about the new taxes, the revenues, whatever word we wan to choose here, the president is proposing. We heard him say today -- and this is -- this is the part where my ears perked. We're not talking about the immediate future. It sounds like we're talking several years down the road in terms of these revenue increases. And again he's saying that only the richest would have to pay them.

Brianna, he mentioned the year 2013.

KEILAR: A couple of years down the road, what he and Democrats would like to see is letting certain -- letting there be a tax increase for the wealthiest Americans, yes.

And I think that's something certainly that the Democratic base would, they are wholeheartedly behind. And they want to see that. But there's a lot of opposition to that. There's also, Brooke, some Democratic opposition to that. I think, more realistically, what Democrats are considering are some of these small tax loopholes and that's why we heard them targeting that really in their messaging, some of the tax breaks that corporate jet owners get that the oil and gas companies get.

And they have certainly been trying to paint Republicans resistant even to the most token of tax increases. The sense though among the White House and Democrats is that if they're going to give up really big cuts, Brooke, because it's the spending cuts that would make up so much of an agreement, they have to at least get some sort of token tax increase to say, hey, we looked out for our people when we had to agree for there to be these cuts that really affected these priorities that mean so much to us and our constituents.

BALDWIN: Right. Do you do $1 trillion, $2 trillion, $4 trillion, the big plan?

Brianna Keilar, thank you very much.

Want to talk more specifically on that precise point with Maya MacGuineas. She's the director of the Fiscal Policy Program at the New America Foundation. She just wrote a piece, great reading, CNNMoney.com.

And, Maya, good to have you on.

I want to begin with sort of that point that Brianna was mentioning towards to the end. This is a note I took. The president said today: "Things I will not consider, 30-, 60-, 90-, 180-day temporary stopgap resolution to this problem."

And in reading your piece on CNNMoney.com, you agree with that. You say, yes, they need to come up with a plan big enough to fix the problem. My question is, why? Why not just kick the can down the road?

MAYA MACGUINEAS, NEW AMERICA FOUNDATION: Well, let's see. We have tried that for many years now. And it hasn't left us in a very good place.

But I think we're really right now at one of those important moments where one the U.S. can take the right path here and actually own up to the fiscal imbalances we have, put together a big enough package that would fix the problem and set ourselves back on a sustainable course that would help the economy and help keep our fiscal situation under control.

Or can continue to punt as we have in the past, in which case we risk that markets will lose confidence in the U.S. and turn against us, making the situation so much more difficult to fix. And it means that for all the political battle that we're going to go through just to get a small deal -- because make no mistake, it's not going to be easy to lift the debt ceiling whether with a small deal or a large deal -- if they put together a small deal, we just have to go back and do it all over again and it will be all the harder.

BALDWIN: Yes, but, Maya, it seems when you listen to Speaker Boehner, he says, look, that's all great and good. But he has to have something that he can present to the House and his Tea Party Caucus, which as Brianna mentioned many of them have actually signed a pledge, look, we're coming to Washington with the intention -- no intention to compromise.

How do you get that big plan, the $4 trillion plan, through this Republican-controlled House?

MACGUINEAS: Yes, it's not an easy political thing to navigate. I will certainly acknowledge that.

But I would say that everybody should start with the point of if we're going to have to go through this difficult exercise of lifting the debt ceiling, we might as well fix the problem. And once we all acknowledge that sort of the model that was put out there by the Bowles-Simpson fiscal commission last fall showed that anything short of $4 trillion really isn't going to fix the problem. So that's your starting point.

I think you then have to look at the best ways. We sort of focus on just how to get the numbers to add up. But it's more than that. You want to think about what parts of the budget we really don't need because they're ineffective, redundant, outdated. Focus on those first.

And then when it comes to other side of the budget, revenues, and it's really difficult to see how you fix this without revenues, there are so many ways to reform our tax code, which would actually simplify the tax code, bring rates down, and help to contribute to the deficit reduction approach that could be good for the economy while contributing revenues. That's what we should focus our attention on because that could actually serve a purposes in part of a whole budget deal.

BALDWIN: But again that's where we hear some of these members of the House saying that that's a sticking point from which they will not budge.

But at the same time there is this one point where everyone does seem to agree. You hear from the president, you hear from Speaker Boehner, Senator McConnell. And they all said, look, we're not going to let the government default. We're not going to do it. We're going to make something happen.

But do you -- how do you take that as face value, that statement?

MACGUINEAS: Actually, I'm very relieved, because this has been quite a roller coaster to watch. And everybody should realize that bumping up against the debt ceiling and certainly even going past it is a very dangerous game of chicken to be playing. And we shouldn't be engaged in it in the first place.

I feel that the political momentum has changed recently and that leaders of both parties really are committed to hashing out a deal. Now, they have very different visions of what that deal should look like. But I don't think we're going to jeopardize the credit rating of the U.S. and our whole sort of fiscal health by crashing through the debt ceiling.

But it's still not at all clear how this plays out. There are a lot of compromises that will have to be made. And I think the point really should be for politicians of both sides that if we don't do this now, it becomes all the more difficult to make these changes after the election.

The biggest piece here is going to be reforming entitlements. And anybody who thinks it's going to be easier to reform Social Security and Medicare after the election, without the bipartisan cover and compromise that we have now, I think is a mistake and it will only get more difficult as we push this on. So now is the moment to try to take advantage of the debt ceiling and the requirement to do something on the budget.

(CROSSTALK)

BALDWIN: Look, you mentioned there's resistance on both sides. You have entitlements from the left, and tax issues and increases from the right. And it's a matter of just seeing who and how much will both sides compromise.

Maya MacGuineas, we're all watching the clock tick down. I appreciate you for coming on.

And I want just to let everyone know people can read your work, read your piece right now. Go to CNNMoney.com.

And now, watch this.

(BEGIN VIDEO CLIP)

REZA SAYAH, CNN CORRESPONDENT: Many here in Pakistan are seeing this latest move by the Obama administration as disrespectful, as the U.S. not appreciating efforts by Pakistan.

(END VIDEO CLIP)

BALDWIN: The United States sending a strong message to Pakistan. Do your job better or no money. Now a defiant Pakistan firing back with a message all of its own. That's next.

Plus, just when we thought this whole U.K. tabloid hacking scandal was over, no, no. No news today it's about to get a whole lot worse. Back in a moment.

(COMMERCIAL BREAK)

BALDWIN: Pakistan tells the United States, keep your money, we don't need it. I'm talking about a lot of money here, in fact. And this may be the biggest hitch in the relationship between the U.S. and Pakistan in a very long time.

You see, the two countries have always butted heads on the issue of dealing with militants. But, today's news actually dates back to May 2. That was the U.S. military raid near Islamabad that resulted in the death of Osama bin Laden. Pakistan not happy.

Now, not long after that, Pakistan threw out all of the American and even some British military trainers working with Pakistan's armed forces, U.S. this time not happy. Then last week, Joint Chiefs Chairman Admiral Mike Mullen accused Pakistan's government of knowing all about the murder of a journalist who was critical of the government. Pakistan denies that and isn't happy.

Then fast forward to this past weekend. The White House confirms that $800 million, more than a third here, a third of the United States' annual anti-terrorism aid package to Pakistan, will be stopped. This is how President Obama's chief of staff describes the relationship. And I want you to listen very closely for one word Bill Daley uses more than once.

(BEGIN VIDEO CLIP)

WILLIAM DALEY, WHITE HOUSE CHIEF OF STAFF: And it's a complicated relationship in a very difficult, complicated part of the world. Obviously there's still a lot of pain that the political system in Pakistan is feeling by virtue of the raid that we did to get Osama bin Laden, something that the president felt strongly about and we have no regrets over.

But the Pakistani relationship is difficult but it must be made to work over time. But until we get through these difficulties, we will hold back some of the money that the American taxpayers have committed to give.

(END VIDEO CLIP)

BALDWIN: Let's go to Chris Lawrence live at the Pentagon.

Chris, you heard and I'm sure our viewers could pick up the word that Bill Daley repeated more than once. Complicated. Complicated was the word we heard. The White House is withholding money from a country it hopes will work harder on its behalf. That in and of itself is complicated. What are you hearing at the Pentagon today?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: That the U.S.-Pakistan relationship is complicated, Brooke...

(LAUGHTER)

LAWRENCE: ... anybody who has dated can tell you is code word for a bad relationship that you don't want to necessarily call a bad relationship.

Look, this is the first time that the U.S. has withheld aid in response to a direct Pakistani action. But U.S. military officials say they didn't have any choice because they had about 100 special operation sources there, trainers working there and the Pakistanis pulled -- canceled their visas for those special-ops forces. They also refused to issue visas for some of the equipment technicians that the U.S. military feels have to be there to operate some of that equipment.

BALDWIN: OK. Just so I'm clear, this $800 million in aid cut, it is a direct result of Pakistan's expulsion of these military trainers. How many -- Chris, how many -- how many Americans are we talking about? And what is it that they were doing?

LAWRENCE: You know, these are active duty special forces who were there on the ground training some of Pakistan's military forces right along the tribal region where they believe a lot of the insurgents and terrorist leaders are located.

But this $800 million, some of it is reimbursement. Pakistan puts about 100,000 troops on that border in that frontier area. The U.S. pays them about $300 million in -- sort of reimburse the cost of keeping all those troops there. Some of the other dollars in that figure is actual aid, night-vision goggles, spare parts for helicopters, IED disposals, things like that as well.

BALDWIN: OK. I was wondering what specifically that would have covered. Then we also heard from a Pakistani general. He says today that these two countries, that they will continue to collaborate against al Qaeda, what he calls the common enemy.

How, now, with this aid that's going away, how might that change that relationship?

LAWRENCE: Well, the relationship is definitely in a difficult place, probably more difficult than it has been some time.

But I think Peter Bergen on this air just a few minutes ago said -- he used the term too big to fail. And I think that's the feeling from a lot of U.S. military officials here in the Pentagon. The relationship is just too important on both sides to be allowed to fail. But there's some intense political pressure on both sides.

Pakistan's military was humiliated by the Osama bin Laden raid. And there was a lot of internal pressure for them to get tough and stand tall against the United States right now. Back here in the U.S., especially with the debt and the budget and the economy such as it is, there's a lot of pressure on what we're spending in Pakistan. In fact, the latest defense spending bill has sort of a clause in it that says that both the secretary of defense and state have to sort of write a report on where this money is going before Congress will let loose the funds that go to Pakistan.

So, in some ways, Pakistan feels like they're reporting back, sort of a parent-child relationship. You know, so there's a lot of complicated things going on right now with the relationship.

BALDWIN: There you go again with that word, Mr. Lawrence, complicated.

LAWRENCE: Complicated, yes.

BALDWIN: It is indeed.

Chris, thank you so much.

Hey, I don't know if you headed to the gas stations over the weekend. Did you enjoy the nice gas price slide while it happened, I guess I should say, because there may not be any more where that came from? Prices at the pump back on the rise. Alison Kosik standing by at the New York Stock Exchange to tell us why. Why is that?

Back in a moment.

(COMMERCIAL BREAK)

(STOCK MARKET UPDATE)

BALDWIN: And if you watched last week, you saw me covering space shuttle Atlantis' final launch at the Kennedy Space Center in Florida. And I want to show you what it was like behind the scenes, really a dream come true for me, folks, dream assignment. That is coming up next.

(COMMERCIAL BREAK)

(MUSIC)

BALDWIN: Chumbawamba, anyone?

Talk about a wakeup call. The shuttle, the astronauts, crew of four, blasted away this morning by the sound of "Tubthumping." So after that, they got up, they headed to work, tough day in space. Their main task, transferring equipment, spare parts, food to the International Space Station.

Now, Atlantis docked with the space station just yesterday. This is the 46th and final shuttle to do so. The shuttle connected with the station by doing this -- this is pretty cool. They do this backflip maneuver. There it goes, flipping through space before finally hooking on.

Meanwhile, NASA tells us they aren't worried anymore about the space junk. Did you hear about this, this morning, the space junk that was hurtling that way with an old Soviet satellite? They thought they had -- might have come a little too close to the shuttle and the space station, but no big deal, no issue with the space junk today.

So now you know what is happening today in space. If you watched this show last show, you saw me covering my dream assignment, covering a space shuttle launch. And it turned out not to be just any launch, but just the very historic 135th and final one.

And I met some amazing, amazing people when I was down there in and around Kennedy Space Center. And I want to share just a couple of moments with you, starting with my interview with Bob Crippen, who was the first of two astronauts to go up in the first space shuttle, STS- 1. Maybe you remember watching it. It was April 12, 1981. Take a look.

(BEGIN VIDEO CLIP)

BALDWIN: You were the test flight.

ROBERT CRIPPEN, FORMER NASA ASTRONAUT: Right.

BALDWIN: You were the guinea pigs, if you will, of the first space shuttle. Were you nervous knowing that at all, or just totally excited? CRIPPEN: I was totally excited. John and I had worked on that vehicle from its inception. We knew it very well. We knew the people that had built it, and John and I spent a lot of time talking and touching the technicians. We had confidence in it. You know, we know that there was a possibility of a potential problem, but we thought we could get it back down on the ground safely.

BALDWIN: Let me introduce them. They are David, Jay (ph), both of whom are 4, kindergartners, aspiring astronauts.

And I have Cade (ph) here. Cade came all the way in from Colorado.

Cade, high-five for the commander suit, buddy. Oh!

So, why -- why do you like space so much, bud?

UNIDENTIFIED MALE: Because like I've never been there before. And so --

BALDWIN: Me neither, by the way.

UNIDENTIFIED MALE: So, when I grow up, I'm going to be an astronaut and I'm going to the moon.

LINDA JOHNSTON, WATCHED FINAL SHUTTLE LAUNCH: I always wanted to do this, and I got to do it thanks to my son and grandchildren. And I'm a just really a patriotic person, and it represents what our country has been about. I think it's a real shame they're doing away with the program. But I don't think they'll need to. And I -- I don't know what else to say. I'm just so happy to be here.

BALDWIN: This is the final shot. This is the area you don't get to see. I'm on the other side of the camera. These are all of the cameras up here on the live platform. And this is where you see me and you see the rest of us sitting for potentially the next couple of days. See you on TV.

(END VIDEO CLIP)

BALDWIN: Well, it wasn't the next couple of days. That thing went off as scheduled -- 30 percent chance it would. What an amazing past few days.

By the way, one other thing to look forward to -- you're invited to a virtual dinner with the space shuttle crew. NASA says all you have to do is head to their website. We're going to put it up on the address here up on the screen for you. There it is, bottom of the screen. You go to the website. You get recipes for this -- they're calling it a backyard barbecue and chow down with the crew all the way up in space.

Next to this -- the British tabloid's phone hacking scandal is exploding today with new names coming out as targets of Rupert Murdoch's media empire. And one of the names is one of Britain's most powerful figures. Plus, kidnapped and held captive for 18 years, Jaycee Dugard is speaking out for the very first time about her nightmare ordeal from being tasered by her captors to being forced to live in a shed without a toothbrush. Her amazing story coming up.

(COMMERCIAL BREAK)

BALDWIN: Well, Sunday just won't be the same for millions of people in Britain who flipped through "The News of the World" each and every weekend. This is what they saw on the front page yesterday, "Thank You and Goodbye." The paper just couldn't survive the phone hacking and bribery phone scandals, so it closed up shop. No more "News of the World," Britain's largest selling Sunday paper which circulated for nearly 170 years.

So scandal over, right? Wrong. In fact, it's even wider today. It involves more people, including a former prime minister. Let's go to London to my colleague, Becky Anderson. And Becky, all these twists and turns -- give me the latest. Help me keep my media scandals straight, please?

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: Yes, if you blinked today you'd miss something. I tell you, if Rupert Murdoch thought getting to the weekend and closing down the "News of the World" the Sunday tabloid read by about five million people in this country was going to draw a line under this scandal, he was sorely mistaken.

News today that the prime minister, the former prime minister, Gordon Brown, may have had information blagged (ph) by reporters not from the news of the world, in fact, but from another paper in the same stable of newspapers, that is the News International family. I've just got a tweet from -- from his wife, Sara, who said "So sad to learn all I am about my family's privacy. It's very personal and really hurt if it is all true."

Now, the allegations are that reporters from the "Sunday Times" newspaper may have tried to blag (ph) information from his accountants from one of his banks and tried to get medical records on one of his sons, who sadly has cystic fibrosis, a really a quite dreadful and scandalous part of what is already a big scandal.

Let me tell you, he wasn't just the biggest guy out there today who may be a victim of this targeting. Charles and Camilla allegedly told they have been targeted by the "News of the World" reporters. And it seems that royal protection offices for the queen and Prince Phillip may have been targeted, paid, effectively. Those are the allegations for information on the queen and Prince Phillip, quite remarkable stuff today.

BALDWIN: You're right. If you blinked, you would have missed it. All of the different people coming forward with all of the different allegations.

But I have to take you back, Becky, to Rupert Murdoch. We know "News of the World" is his. But he still -- and correct me if I'm wrong, he wants to buy the B-Sky-B, which is a British satellite broadcaster against the government's advice. In fact the deputy prime minister Nick Clegg waving him off this deal. Will he succeed?

ANDERSON: Well, yes, that's been a very interesting story today. The government have been sort of trying to move away, sort of kick this to the grass effectively. And what has happened today is that deal has been referred back to the competition's commissioner.

Now, what Murdoch is effectively trying to do is buy the 61 percent of what is an incredibly profitable paid TV, satellite broadcaster. One of the analysts I spoke to today said if that takeover of the 61 percent of what he doesn't already earn of B-Sky-S would go through would make News Corp easily the most powerful single media owner in the U.K. in modern time. It would almost double the income of the BBC.

It's been kicked back. So the government effectively is out of the decision-making process, which will make the prime minister, David Cameron, very happy, because there's been lots of allegations he's been way too close and cozy to the Murdochs of late.

So they've kicked it back to the competition commissioner, and at this stage it may take another three to six months for any decision on that to come through. B-Sky-B shares down once again significantly today. News Corp's market capitalization off by about $6 billion since this all broke last week.

BALDWIN: Wow, not surprising. Becky Anderson with all the twists and turns and iterations of this story. Becky, I thank you so much from London.

But let's talk here at home. I want to go to Lisa Bloom. She's an attorney and author of "Think." And get in here, and I want you to weigh in on this, because I know a big part of your new book is about tabloid media and how you say it is dumbing us down. Give me your thoughts, Lisa Bloom, on the whole Rupert Murdoch scandal? And could this happen here?

LISA BLOOM, ATTORNEY, THEBLOOMFIRM.COM: Well, first of all, I do think tabloid media dumbs us down. And so I say hooray that one of the major tabloid papers is closing down. About 95 percent of readers of tabloids are women. And so many college women I surveyed can name more Kardashians than wars we are in, for example. It's the tabloids distraction from what's meaningful and important in life, and that's I wrote my book, "Think."

As to Rupert Murdoch, he's facing some significant consequences in Britain, as you just pointed out. Here in the U.S., of course he owns FOX News and a lot of other media outlets.

We have the First Amendment here in this country. We're very much far less inclined to have government inquiries and investigations of news organizations unless it's pretty clear there have been some crimes committed. I don't see that happening in the U.S. based on the evidence that we have right now. I don't think there'd be any repercussions on the U.S. entities, at least so far based on what we know. BALDWIN: You mentioned FOX. I just do want to ask, Murdoch is the boss of News Corp, which owns FOX News Channel. Is it possible all of this is happening in the U.K., could FOX News at all be affected by some of the fallout?

BLOOM: They could be, but only if they're engaging in the same kinds of behaviors that "News of the World" reporters were engaging in, mainly hacking and other crimes. And we have absolutely no evidence that that's happened here from FOX News or any of the U.S. entities. So I would say no. I don't suspect any repercussions to FOX News.

BALDWIN: Now, we know that Prime Minister Cameron, he's called for two inquiries, allegations of phone hacking and ethics and standards of journalists. We know that crimes of local law enforcement, these are crimes that they can prosecute. You mentioned the First Amendment here in the States, but, what would happen, though, if it came to fruition that anyone, any journalist, illegally obtained information, hacked that -- would they be -- they couldn't be protected by the First Amendment? That would be a crime.

BLOOM: That's absolutely right. Local law enforcement here in the United States would handle crimes committed by journalists such as hacking. Clearly that's illegal. That would not be protected by the First Amendment.

But that would be a local law enforcement issue. We wouldn't see congressional hearings trying to shut down the entire operation, let's say, of a news organization that did that. Because we have the first amendment here, we're protected by the media here which is a good thing. We don't like government meddling in the media.

BALDWIN: You twittered over the weekend, "Grateful for another ridiculously beautiful day here in Los Angeles and that one big trash tabloid bites the dust." Lisa Bloom, thank you very much.

(LAUGHTER)

BLOOM: Thank you.

BALDWIN: And she was just 11 years of age when she was kidnapped. And then she was held by a convicted sex offender for 18 years. Now, Jaycee Dugard is breaking her silence. She is talking about the horrifying ordeal that spanned nearly two decades -- forced to live in a backyard and repeatedly raped by Philip Garrido. Dugard tells ABC's Diane Sawyer that she did what she had to do to survive.

Here's what she remembers after she was snatched off of the street. This is back in 1991.

(BEGIN VIDEO CLIP)

DIANE SAWYER, ABC NEWS: Did they say anything? Did you hear anything?

JAYCEE DUGARD, KIDNAPPING SURVIVOR: No, not at first. After we were driving for a while, I heard the driver say, "I can't believe we got away with it," and he started laughing. And then I blacked out again or something. It was like -- it was the most horrible moment of your life times 10.

(END VIDEO CLIP)

BALDWIN: And as if that wasn't enough, at age 13, Dugard gave birth to her first child. Philip Garrido forced himself on to her. This happened in the tent in the back yard. Watch.

(BEGIN VIDEO CLIP)

SAWYER: August 13, 1994. You're how old?

DUGARD: Fourteen.

SAWYER: Having a baby in a back yard.

DUGARD: Yep, I did.

SAWYER (voice-over): She is locked in alone, watching "Dr. Quinn, Medicine Woman," when she feels the first sharp pain."

(On camera) You're in labor, and there's nobody there.

DUGARD: I didn't know.

SAWYER: You're locked up?

DUGARD: Yes, I'm still -- yes, still locked at that time, just scared. It was terrible pain. I didn't know what was going on, hadn't seen anybody all day.

(END VIDEO CLIP)

BALDWIN: Can you imagine? Jaycee Dugard, now 31 years of age, has written a book. It's called "A Stolen Life." It goes on sale tomorrow.

Coming up next, who cares about Hollywood royalty when you have got the real thing in town? Prince William, wife Catherine wrapping up their American trip. But will L.A. ever be the same? We're going to check in with Matt Foster who got all of the details on the duke and duchess. Back in moment.

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BALDWIN: Prince William and Catherine leave California starry-eyed, and that's what's trending today. The royal newlyweds are back home in Britain after hanging out with celebrities and kids on skid row. Max Foster has travelling and covered them through Canada and Los Angeles. He's there in L.A. with more on the visit.

And Max, we know that their appearances from what I read, they highlighted some of the charitable interests, you know, helping the homeless youth, supporting the arts, supporting the troops. What kind of impression did they leave in L.A.? MAX FOSTER, CNN ROYAL CORRESPONDENT: Well, they left a good impression I think -- everyone very happy to be here, lots of buzz that they were here and lots of buzz around them.

The public, though, couldn't get very close to them unlike in Canada, so there's some frustration over that. But, as you say, lots of great events for them to watch, the great carpet debate here in the aid of a young British talent was a big success. Catherine's dress, Alexander McQueen, everyone talking about that. The queen's earrings. That was an exciting moment.

And inside you saw them mingling with Barbra Streisand, Tom Hanks, Nicole Kidman, J-Lo, and they seem star-struck by this couple, which really says so much about them. They are the biggest stars in the world right now. And I think that red carpet event really confirmed that.

And then there was skid row, as you say, with young kids sent to the palace, as they thought they were at their most relaxed. They're really good with young kids. You saw the artistic side of the duchess coming out. But the palace now saying that we're not going to see them for a while, Brooke. That is it. They're going to lie low. They're going to disappear for a while because they want to focus on their marriage and go to the cottage in north Wales.

BALDWIN: That's right, the cottage with the goats and the rural area -- that sounds lovely compared to L.A., I suppose. But, you know, looking at them on the red carpet, it seemed that Catherine didn't say much. I think I heard quickly she had a lovely time. Do you think she'll want to come back?

FOSTER: I think so. They seem to be really happy here. And they -- well, William has been here on private visits, so it's Catherine's first visit. We didn't hear anything of her throughout this whole tour. She's too nervous about speaking in public even and she's --

BALDWIN: You think she's nervous?

FOSTER: -- not giving interviews.

Yes. And the palace, her private secretary told me that she's coming on leaps and bounds but she's not quite ready to speak in public. She's got this amazing ability to look so composed at these events. The photographers are frustrated because they never get her off guard. They never get the photo. But she is really concentrating on what she's doing and she's throwing herself in. And she wants people, she wants reassurance that she's doing well. William is more experienced. He knows it's going well.

BALDWIN: Well, she's lovely. And it's amazing to hear she is nervous. It just makes her that much more human. Max Foster, thank you very much.

And it is "Music Monday" here on the show. You know what that means by now. We have a special treat for all of you music fans, a really, really big treat if you're a Neil Young fan. Watch this. (BEGIN VIDEO CLIP)

NEIL YOUNG, MUSICIAN: It's music from the heart. It's music from the soul. And it's interplay among master musicians that were playing behind me, making me sound good.

(END VIDEO CLIP)

BALDWIN: It doesn't take too much to do that. But the music legend has a new album out and it could bring back lot of memories for the long-time fans. CNN fans talk with Neil Young about a treasure, coming up.

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BALDWIN: It is music Monday. This week we have the legendary Neil Young. He has another album out. And while it made be new, it's actually old. The album is called "The Treasure." It's a collection of live recordings from his concerts in the mid '80s with the band International Harvesters. And in recent year some of the members of that band have passed away. Young told us the album is a tribute to them. Here you go, Neil Young.

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(MUSIC)

YOUNG: A lot of the songs were written on the road and then learned and recorded on the road. I never made it to the studio. It's music from the heart, it's music from the soul, and it's interplay among master musicians that were playing behind me, making me sound good, and Just having that unbelievable transforming communication between them.

It was very easy to do it, but when you look back on it, especially the instrumental passages, especially between Rufus and Joe Allen and Carl Hammill (ph) and Spooner and all of them, Ben Keith, Anthony Crawford, these guys playing with them was like nothing else on earth. And this record shows why.

I had been sued by my record company. I've been told by my record company that country radio would never play it. And I've been sued by the IRS for having too much artistic control, and they decided I had been selling my masters instead of working as a contract player. So I wasn't making that much money. As you can imagine, a band that wasn't playing much on the radio, that was already sued, financially, it was difficult times.

So we knew we were working kind of against the grain. So we recorded everything ourselves. We didn't have a studio truck, we didn't have producers. We just had our sound man and knew what we wanted to sound like.

(MUSIC)

YOUNG: Some of these guys are the best friends I ever had. Some of them aren't here anymore. Some musicians were so great it was hard to even understand how one musician would stop and another musician would start. It was seamlessly, you know, flying all over the place.

(MUSIC)

YOUNG: The amazing instrumental passages either behind me or over me or between the lines, all kinds of things happening. There's just no way to predict. You just have to be mindless.

(MUSIC)

YOUNG: It just was a great moment, a moment for me a great moment for them. It's such a special thing and we're so lucky to have it. And that's why we call it treasure. It occupies such a special place in my life and my heart.

(MUSIC)

(END VIDEOTAPE)

BALDWIN: You know, I was talking to Mumford and Sons a couple weeks ago, and they had just met some of those guys, just met Neil Young, and they were so star struck by him. I think I would be, too. Take a look for any of our music Monday interviews -- go to CNN.com/Brooke.

Coming up next hour, the giant newborn you are talking about.

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UNIDENTIFIED FEMALE: Wow, this is really going to be big. All I could see was big cheeks.

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BALDWIN: A 16-pound baby. You heard me -- one-six, born in Texas. How is that even possible? Could it have been prevented? How's mom? That's what I want to know. We'll get into that, coming up.

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BALDWIN: Take you to Washington now to get your CNN = Politics update. Let's go Mark Preston with the latest news there. And Mark Preston, talk to me about these two Republicans in the midst of a war of roads.

MARK PRESTON, SENIOR POLITICAL EDITOR: Yes, three Republicans, two Minnesotans, Brooke. Tim Pawlenty yesterday on "Meet the Press" was very critical of Michele Bachmann. That is his rival for the Republican presidential nomination. Let's hear what he said to say about Michele Bachmann yesterday regarding her qualifications for president. He said that her record of accomplishment in Congress is nonexistent. He says the ability to deliver a speech should not be the qualification to be president. Rather there needs to be a proven ability to lead and leading a large enterprise in the public setting and drive it to conclusion. Now in the latter, he's talking about himself because he is the former governor of Minnesota. How did Bachmann respond? She said that she's proud to be a fighter. She's proud of her record of fighting with resolve and without apology for her free markets, for our sane fiscal policies, and many other things.

So we've been waiting to see how Michele Bachmann and Tim Pawlenty would they handle each other on the campaign trail. It looks like they're starting to be very critical.

Another presidential candidate, or is she a presidential candidate, is Sarah Palin -- is she going to run? Is she not going to run? Brooke, you and I talk all the time about this. What is Palin going to do? Well, in an interview with "News Week" she offered no hints about whether she's going to get in or not get in. She said her daughter Bristol would like to see her run.

But what she did say is the American people are desperate for a positive change. She said that she is not so egotistical to believe that it has to be her to turn things around. But she added she believes that she can win. Now, I'm going to say that Palin also noted that there's plenty of time for her to get into the race and for others to get into the race, and that the Republican field is not quite set.

A couple names she mentioned potentially getting in, Rick Perry, the Texas governor, we all was seriously contemplating and very likely to run, and Chris Christie, the New Jersey governor, who was asked every day if he was going to run and he continues to say no.

BALDWIN: He still says no.

PRESTON: He says no. Palin doesn't know. So, here we are, Brooke.

BALDWIN: Still the waiting and the watching game continues, Mark Preston. Thank you very much. Appreciate it.

We'll get another political update for you in half an hour.