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Fans Sign Giant Card for Jeter; Clinton, Syria Trade Barbs; Hearing Delay for Strauss-Kahn; 6.5. Hour Spacewalk Under Way; CIA Used Pakistani Doctor; Fake Vaccines Used to ID Bin Ladens; Afghan President's Half-Brother Dead; Debt Talks Stall; Crowd Protests San Francisco Shooting; Collector Accused of Theft; Hacking Scandal Spread to Three Papers; Scandal Engulfs Murdoch Empire; Beyonce's Dad Denies Theft Claim; Black Eyed Peas Taking a Break; Pawn Stars "Hoss" Drops 115 Pounds; Movies Vanishing from Netflix; Debt Talks Stalled; New Ad: Got PMS? Get Milk

Aired July 12, 2011 - 10:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: All right, top of the hour now, 10:00 a.m. on the east coast, 7:00 a.m. out west. Thanks for joining us everyone. I'm Kyra Phillips.

A testy exchange of words between the embattled government of Syria and Secretary of State Hillary Clinton. Clinton says the U.S. and French embassies were not protected from rioters. Damascus called her comments, quote, "An act of incitement."

Former IMF chief, Dominique Strauss-Kahn will remain under house arrest. A hearing on his sexual assault charges pushed back to next month.

And live pictures now as two crew members from the International Space Station begin a lengthy list of repairs. We're watching it live.

We begin the hour with a program to vaccinate residents of a Pakistani City, appeared innocent enough, even helpful, but it wasn't what it appeared to be.

Two Pakistani nurses told by a doctor to vaccinate residents in Abbottabad where part of an alleged CIA plot to identify the world's most wanted terrorist, Osama Bin Laden.

Our Reza Sayah joins us live from Islamabad. Reza, what do we know about this doctor and this CIA plot?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Yes, Kyra. This is high-stakes international spying at its best, but despite the intricacies of this plot, it's still not clear if it worked.

But here's what we know. A Pakistani intelligence source tells us that a Pakistani doctor arrested and he's been suspected of helping the CIA set up this plot. According to this source, he allegedly set up a free vaccination campaign offering shots and vaccinations to the children and residents of Abbottabad where this Bin Laden compound was located.

According to the British newspaper, "The Guardian," this man, this doctor hired two nurses who were going from house to house and the plan was to get to the Bin Laden kids, somehow extract a little bit of blood or use the syringe from the vaccination to eventually match their DNA samples with DNA samples from Bin Laden's sister who passed away in Boston, Massachusetts last year.

Now, we haven't been able to verify if they actually got into this compound. We managed to track down one of the nurses who participated, allegedly, in this plot and she kept telling us that she can't comment on this matter.

We've also talked to residents of Abbottabad who tell us that days before the raid on the Bin Laden compound, there were two nurses going from house to house, and one resident told us she actually accepted a shot, and one of the nurses -- the condition was for the vaccinations to be given they had to give up personal information.

So perhaps an indication of the strategy that was being used to gather information. One U.S. official told the "Guardian" paper it was in place, but it wasn't successful in getting the DNA sample, Kyra. So a little glimpse at the strategies the CIA was implementing before this raid on the Bin Laden compound.

PHILLIPS: Well, Reza, do we know why this doctor is still in custody, this doctor that tried to find Osama Bin Laden?

SAYAH: Yes. He's still in custody. It's not clear what's going to happen to him or if he's going to be charged with a crime, but I think it's another indication that comes to this raid on the Bin Laden compound.

These two countries are still not on the same page, a lot of differences. Pakistan still unhappy with what they call this unilateral raid on the compound, a violation, they call it, of their sovereignty.

PHILLIPS: Reza Sayah live in Islamabad. Reza, thanks.

Afghan President Hamid Karzai's half brother has been assassinated. Ahmed Wali Karzai was the provincial chief of Kandahar. He was shot during a gathering at his home.

Zain Verjee has been following this story since early this morning for us. Can you give us details of the shooting?

ZAIN VERJEE, CNN ANCHOR AND CORRESPONDENT: What we understand, Kyra is that he was in his home meeting with tribal leaders, politicians, and his friends, and his bodyguard said, look, I want to talk to you, according to one report, and went into another room, and at that time pulled a gun and shot him in the head and shot him in the chest.

They took him to hospital, but he couldn't make it. He died. Now, this is a very significant death because this is a man who was so powerful and pretty much ran southern Afghanistan after Kandahar. Nothing happened without him.

People are just even too afraid to say a bad word about the guy. He controlled the place for his brother President Hamid Karzai. He, though, was accused of having kind of murky links in dealing with the drug trade and fueling that trade being a very corrupt guy as well as profiting from private security companies.

Even so, the U.S. held its nose, NATO held its nose and they did business with the guy because they needed to push ahead with the anti-Taliban campaign and his death throws a lot of this stuff into question.

And it's going to lead to a lot of tribal fights, insecurity in the area and the underlying message is here, if the Afghan government cannot even protect its own leaders, what can it do? And this is also a hole that the Taliban can exploit. So the U.S. will be very concerned about his death.

PHILLIPS: Yes. President Hamid Karzai, we'll come out and speak about this. Zain Verjee, thanks.

Back here in the states, congressional leaders return to the White House to negotiate raising the debt ceiling. The deadline is three weeks from today, but the divide separating Democrats and Republicans may be wider than ever.

(BEGIN VIDEO CLIP)

REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: The American people will not accept and the House cannot pass a bill that raises taxes on job creators. Now, the House can only pass a debt limit bill that includes spending cuts larger than the hike in the debt limit as well as real restraints on future spending.

(END VIDEO CLIP)

PHILLIPS: Dan Lothian is at the White House. So Dan, the president trying to bridge the divide, but does he have the clout to do it?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, he's certainly trying and hoping that he does. That's why you've seen the president call congressional leaders here to the White House now for the third day in a row for these talks, asking them to come back.

Today with some specifics, with that goal in mind, of trying to get a compromise so they can raise the debt ceiling. The president saying he's willing to take heat from his own party, because he's putting things like Social Security, Medicare on the table and he's urging Republicans to be willing to deal with their base as well.

But the president is still pushing for that big comprehensive deal because he believes that's the best thing long term for the U.S. economy. Speaking to a women's forum this morning, Secretary of Treasury Timothy Geithner said a deal has to get done by the end of this week.

The latest next week in time for something to be drafted and passed by Congress, and he's optimistic that this will happen.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: Congress, of course, is going to pass and increase in the debt limit in time for us to avoid default. You know, we're a country that pays its bills and I very much appreciate the leadership, not just Democrats, but Republican leadership that they recognize default is not an option.

(END VIDEO CLIP)

LOTHIAN: Now Republicans said with Mitch McConnell speaking now on the Senate floor on the debt issue said, quote, "In my view, the president has presented us with three choices. Smoke and mirrors, tax hikes or default. Republicans choose none of the above. I had hoped to do good, but I refuse to do harm."

So that just shows you while there is talk about progress being made, there's still a big divide in the deadline of August 2nd is looming. Kyra --

PHILLIPS: Dan Lothian at the White House. Dan, thanks.

Still wondering exactly how the debt crisis will impact you and your family? Coming up in less than 10 minutes, we'll take a look at what a budget default could mean to the average homeowner.

A crowd shuts down this San Francisco subway station protesting the fatal shooting of a drunk man by police.

(COMMERCIAL BREAK)

PHILLIPS: Checking stories cross country now, protesters shut down a San Francisco subway station angry over a police shooting. Transit officers shot and killed a drunk man after a confrontation last week, and this group is calling that shooting unjustified.

In Bakersfield, California, another police shooting killed former Cincinnati Bengal Running Back David Lee Turner. Police say Turner was buying beer for minors when he hit an officer over the head. The second officer shot and killed Turner after the alleged attack.

In Baltimore, police arrested Presidential Historian Barry Landau and another man. They're accused of stealing a million dollars worth of documents from the Maryland Historical Society. Landau already has the largest collections of presidential memorabilia. Among the things they tried to steal, papers signed by Abraham Lincoln.

One of those powerful media empires in the world is rocked by a scandal that grows deeper and wider. Two more of Rupert Murdoch's newspapers in Great Britain now face their own accusations of appalling wrongdoing.

It reported targets no less than the royal family and a former prime minister. In fact, Gordon Brown says that the papers had links to criminals in order to hack into his bank accounts and medical records of his seriously ill son.

Meanwhile, members of parliament are demanding tough answers from police. How could they not uncover a hacking conspiracy they could mushroom to thousands of victims?

Let's get the latest now from Dan Rivers. He's in London. Dan, what are the new developments this morning? British lawmakers asking Murdoch and his son to testify.

DAN RIVERS, CNN CORRESPONDENT: Yes. I mean, if that does happen, it will be an incredible thing to behold. The most powerful, arguably, the most powerful media mogul in the world being held to account in front of a committee of parliamentarians here who have shown this morning just how aggressive they can be in their questioning.

This morning, they were questioning some of the police officers involved with the initial inquiry, the bungled inquiry, many would say, into this whole scandal and then the subsequent review, which was dismissed all this as just not really being a big deal.

Now we know, according to the police who gave evidence this morning that 3,870 names have been sort of found in the files ever this one investigator, 5,000 telephone land lines, 4,000 cell phones and 45 officers are now involved in this.

It's a massive inquiry and there were also some very testy and angry exchanges between the police and the politicians this morning. Politicians being seen here police officers, if they'd taken bribes from the "News of the World" and the police officers reacting angrily saying that's an outrageous question, of course not.

Incredibly interesting if Rupert Murdoch and his son, James, are called before a similar committee of politicians, just what kind of grilling questions they'll get at the hands of politicians who rightly I think reflecting the anger amongst the British public here.

PHILLIPS: Yes. It will be interesting to follow this for sure. Dan Rivers, thanks so much.

Now, as we mentioned, in Great Britain, this scandal has rocked the confidence of news junkies who relied on these papers. But Rupert Murdoch also owns some of the most powerful, popular, and prestigious news outlets right here in the U.S., the "Wall Street Journal," "The New York Post" and a network that we go head-to-head with every day, Fox News.

Howard Kurtz, the Washington bureau chief for "Newsweek" as well as the "Daily Beast." He's also the host for CNN's "RELIABLE SOURCES." I want to get all those titles correct.

Howard, that's a mouthful. Basically, you're a media guru, OK and we call you in on stories like these. So let me ask you a couple of questions. Do you think that the tactics over there in Great Britain could have happened here as well or happened here as well?

HOWARD KURTZ, WASHINGTON BUREAU CHIEF, NEWSWEEK: Well, in one example, "The Cincinnati Inquirer," this is more than a decade ago had to pay $10 million and apologize for obtaining legally the voicemail messages of a company that was investigating and lots of instances of journalists either fabricating stories or networks paying for interviews.

They always say we're not paying for interviews, we're just buying photos of people in the news, but nothing, Kyra, on the level of this kind of systematic, appalling you know, hacking into the phone systems of not just celebrities, but as we now learned lots and lots of ordinary Britons.

PHILLIPS: We want to point "Wall Street Journal," "New York Post" Fox News, all different on many levels, but I think -- yes. Not -- definitely not the same thing when you're talking about tabloid newspapers in Great Britain.

But it does have people asking, you know, is it possible that because this part of Murdoch's empire here in the states, could we see investigations with the "Wall Street Journal," the "New York Post" Fox News? Is it a possibility?

KURTZ: Well, there hasn't been any suggestion of anything like this at places like Fox News or the "Wall Street Journal," although I will point out that the chief executive of Dow Jones that publishes "The Journal" is a man named Les Hinton and he is going to be drawn into this scandal because he was until a few years ago the head of Murdoch's News Corp Unit in Britain and he had testified before the British parliament that the phone hacking scandal was basically limited to one rogue reporter and they conducted their own investigation and he's absolutely confident there was nothing more to the story.

He undoubtedly is going to be a key witness. A lot of people say he may not survive and the "New York Post" had some ethical scrapes over the years. It is a tabloid. I'm not comparing it to what happened to "News of the World," but the page six gossip column, for example that have been allegations of trading favorable coverage for some freebies for the staff.

That sort of thing, but I don't -- I want to be careful here not say that just because a number of Murdoch papers in Britain, it's now not just "News of the World" which just closed, of course, but the "Sun" tabloid, "The Sunday Times" apparently being drawn into the scandal. I don't want to cast versions on them the Murdoch properties here, but it's a big black eye.

PHILLIPS: So just real quickly, yes or no. Is it possible, knowing the chain of command that Rupert Murdoch could have been completely in the dark about what was going on with his papers?

KURTZ: It is possible, but with so many high-ranking news corp officials now being drawn into this, I can't rule that out. He has to testify as Dan Lothian just mentioned, that can really complicate things.

PHILLIPS: Howie Kurtz, thanks for weighing in. Sure appreciate it.

TMZ says Beyonce's dad was fired after she suspected he may be stealing from her. Dad says, I'm innocent. We got the details next.

(COMMERCIAL BREAK)

PHILLIPS: The showbiz headlines, Beyonce's dad says he didn't do it. TMZ reports that he was fired after Beyonce suspected he may be stealing from her. Matthew Knowles says that after Beyonce's tour company made the accusation her law firm audited him then he was shown the door. According to TMZ, Knowles is still trying to prove his innocence.

The Black Eyed Peas taking an indefinite break, but they insist that the break, not a breakup. At a show in England, they told fans it would be a similar break like they took after their 2005 CD "Monkey Business."

Pawn stars big "Hoss" is trading fat for fit. Remember this look? Corrie Harrison says last year he got a lap band. His weight back then is 365 pounds. The mystery channel star tells people after a year of workouts and a new diet, look at him now. He lost 115 pounds.

If you're a Netflix subscriber, you may have noticed your choice of movies streamlined online shrunk a little last month. Industry insiders definitely took note and investors are wondering if it's a sign of things to come. Alison Kosik, what do you think?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, I think it could be. You know what? What we're talking about is a bunch of movies from Sony studios that, poof, disappeared because of what Netflix called a temporary contract issue.

Now, this happened after a deal from four years ago, between Sony, Netflix and Starz Movie Channel capped, the number of subscribers who could watch certain movies.

Now as we all know streaming is red hot these days and Netflix watchers actually hit the cap and that's what triggered that these films be removed from the roster of Netflix. Kyra --

PHILLIPS: So what do you think? Are more movies going to disappear?

KOSIK: Could be, because "L.A. Times" says Netflix is on the verge of hitting a similar cap with Disney movies? And you know what, many of its licensing deal, they're set to go away by next year. So with streaming as popular as it is now, studios are in the, sort of the higher position. In the position to sort of jack up their asking prices, and Netflix has competition this time as well from big fish like Amazon, Google and Hulu. One analyst says, you know what, either Netflix will lose a share of subscribers to those big fish or the big fish will drive up prices Netflix pays for content.

You know what, either way it's Netflix that's going to lose in this, Kyra.

PHILLIPS: OK. Well, there's a lot of subscribers here including me. We hope that things don't get that dismal. Alison, thanks.

KOSIK: Me, too.

PHILLIPS: All right, coming up next, Bill Maher says that he prefer a President bachmann to a President Palin. Our political buzz weighs in.

And the age of George Jetson is here, a flying car. It's cleared for takeoff and about to be road-ready. We'll tell you how and when you might be able to take the wheel.

(COMMERCIAL BREAK) PHILLIPS: As you raise awareness with issues involving cancer, alcoholism and substance abuse and women's rights. Now the world's most powerful women will remember her.

Former first lady Betty Ford, her memorial service held in Palm Desert, California. CNN's Sandra Endo is there talking about the first ladies that will attend. Hi, Sandra.

SANDRA ENDO, CNN CORRESPONDENT: Well, good morning, Kyra. There is really just a small and select circle of women who can say they've held the title of being first lady of the United States, and the current one, Michelle Obama will be on hand to honor Betty Ford as well as former first ladies Nancy Reagan and Hillary Clinton.

Long time Betty Ford friend Rosalynn Carter, a former first lady herself will be giving the eulogy later here this morning in Palm Desert and also former presidents Bill Clinton and George W. Bush will also coming here to pay their respects.

Now there will be a private visitation then followed by a national memorial tribute for Betty Ford and then later on, the public will get a chance as well to pay their respects in a tribute at this church at Saint Margaret's Episcopal Church behind me here at Palm Desert.

Then tomorrow, Kyra, her casket will be flown to Grand Rapids, Michigan for another tribute where she will finally be laid to rest next to her husband, the 38th president. Kyra --

PHILLIPS: Sandra Endo will be covering both, thank you.

Checking stories now, the half brother of Afghan President Hamid Karzai is assassinated at his home. The Taliban is claiming responsibility.

Pakistani security forces holding a doctor suspected of helping in a CIA sting, a fake vaccination program aimed at getting DNA evidence from people living in Osama Bin Laden's compound.

And Treasury Secretary Tim Geithner says a deal to raise the debt ceiling needs to be done by next week at the latest. But there's been no apparent progress in talks between the president and congressional leaders.

"Political Buzz," your rapid fire look at the hottest political topics of the day. Three questions -- 20 seconds on the clock and playing today, Democratic National Committee Member Robert Zimmerman, CNN contributor and independent John Avlon and conservative political analyst, Will Cain.

All right, guys. First question, John, you've even called the debt negotiations childish. Let's take a look at how you and Jay Leno seem to be on the same page.

So what's it going to take to break this impasse? John, who exactly was arguing there? Would you like to name the leaders?

JOHN AVLON, INDEPENDENT AND CNN CONTRIBUTOR: I think one of them resembled Eric Cantor, but I'm not sure. Look, stop the debt talk tantrums negotiation 101, got to move the country forward here.

Democrats got to give on entitlement reforms like the president argue and Republicans got to go for revenue increases. Otherwise, we're not dealing with the long-term deficit and debt, period.

PHILLIPS: Robert?

ROBERT ZIMMERMAN, DEMOCRATIC NATIONAL COMMITTEE MEMBER: With all due respect to John and Jay, two political analysts I seldom disagree with, this is not about which side is being childish.

President Obama has stood up and engaged in entitlements, proposed trillions of dollars in spending cuts. The problem is the Republican leadership refuses to accept the premise that the debt ceiling has to be raised and they believe the full faith and credit of the United States is negotiable. That's childish and needs to be put to a stop.

PHILLIPS: Will?

WILL CAIN, CONSERVATIVE POLITICAL ANALYST: You know what? Robert's talking about this ideology, I've seen John talk about this, too, the Republican Party is just too crazy. I'll tell you something, some of that isn't wrong.

There are some in the Republican Party who are living up to that, but there's a much more mundane explanation and it's called trust in politics.

Remember the government shut down a few months ago supposed to result in $38 billion in cuts? Well, it doesn't result in anything. What do they mean by entitlement reforms? That what's we need to know.

PHILLIPS: Question number two, Bill Maher tells our Piers Morgan that he'd prefer a President Bachmann to a President Palin. Sarah Palin tells "Newsweek" that she could win a national election. Which of these two has a better shot at this point? Will?

CAIN: It's got to be Bachmann because she's in it, right? I mean, you got to be in it to win it. But, look, neither these people should lead the GOP. I'll tell you why because they're populist.

They're conservative populist and populist tell people what they want to hear even when people are wrong. They say things like you don't have to raise the debt ceiling. That's not leading. That's being the first lemming over the cliff.

PHILLIPS: Robert?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Look, I think the American people are winners if both of them run, because all of us who have been advocating remedial education in history will benefit by seeing the two of them on the campaign stump. Maybe we can for a new program, leave no candidate behind. Ultimately, I think their standard and their conduct will indicate the Republican Party doesn't have a shot.

PHILLIPS: John?

AVLON: Talk about a political Sophie's choice. Look, I've long said, you know, Sarah Palin the thinking man's Michele Bachmann. But Bachmann is really been running a very good campaign. So, still, Palin has executive experience. If she got in, you got to give her the edge.

Reality is neither of them is going to win the general election.

PHILLIPS: All right, guys, your buzzer beater. Ten seconds each. Michelle Obama orders a meal at the same New York City shake shack. I know you've all been there -- 1,700 calories, I'm told. So, what happened to her get fit campaign?

Robert?

ZIMMERMAN: Seventeen hundred calories? She was on the diet compared to what I have there. I love the fact that she went there, because you can eat healthy and still have a couple of good meals. I think Bachmann and Palin should go there. It certainly beats the Tea Party Kool-Aid drinkers.

PHILLIPS: Oh-oh! Will?

CAIN: I would just say that Michele Bachmann has now joined the long list of leaders, like our parents, to our presidents who say, do as I say, not as I do.

PHILLIPS: Oh, we've all heard that one.

John Avlon?

AVLON: I love the milk shake shack burger. So far be it for me to judge. Look, I'm a centrist. I believe in moderation in all things, including moderation. Let her have a good cheeseburger.

PHILLIPS: All right. Let's all go to lunch. Thanks, guys.

Well, this afternoon, lawmakers return to the White House for more negotiations on raising the debt ceiling. Democrats and Republican appear to be drifting apart -- even as the August 2nd deadline bares down.

CNN's Tom Foreman takes a look at the doomsday scenario if an agreement is not reached in time.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Kyra, forget for a minute about all those trillions of dollars we're talking about in the budget. Let's talk about what a budget default could mean to the average home out there.

Fundamentally, the issue is it would upset interest rates and the value of the dollar. So what would that affect? Well, pretty much everything.

Look at the value of a home. It could make interest rates rise on home purchases. It could cost -- make the cost of a mortgage rise substantially over time. So, people are, basically, paying more for their houses.

Things like your car out there. Once again, the rates for a purchase could rise substantially.

Gas prices could increase.

The roads you're driving on could be on worse quality because the government simply couldn't take care of them.

What about the people who live inside this house? Primary breadwinner here in this is the father. He's a small businessman. First of all, he could be unemployed if he works for somebody else. But he could lose money in his savings as well.

But if he's a small business owner, he could have a difficult time getting a loan and making his economy grow in his business, which means the economy and the rest of us have trouble because he can't hire people.

What about the daughter up here? She's in the military. She could have a salary that's limited or delayed. She could have possible IOUs from the government.

Private contractors who provide things to her and to her unit in the military, they might have layoffs and problems because the government can't afford to pay her to do all she does. They can't pay them to supply things to her.

What about the son up here? He's trying to go to college. Student loans could be harder to obtain. There could be restrictions on financial aid.

And even grandma who lives with them here, her Social Security could wind up delayed. Retirement benefits reduced. It could be a tremendous impact on her.

And, mom, of course, if she works for the government, she could be hit the hardest of all. She could be furloughed.

Credit card rates rising.

So, you can see why when you look at this equation, many people say, don't worry so much about the big government picture. We all have trouble understanding that. Think about what it could mean at home. We don't really know if this would be the result. But, certainly, these are possibilities that are on the table -- Kyra.

(END VIDEOTAPE)

PHILLIPS: Tom Foreman for us -- Tom, thanks.

We're witnessing an important part of history as it comes to an end. Live pictures as two members of the International Space Station crew walk in space.

(VIDEO CLIP PLAYS)

PHILLIPS: Hey, and forget a cash bonus for the sales target. How about just blowing up the boss' car? We're going to talk to the sales team, coming up.

(COMMERCIAL BREAK)

PHILLIPS: Checking stories cross country:

Chicago has some cleaning up to do -- downed trees and an overturned plane, more than 800,000 lost power, all because of this storm that grew out of the intense heat that's sending the heat index into triple digits in 15 states.

In Pawnee County, Oklahoma, engineers blame the heat for this buckling in a highway. It's actually the turnpike and a man on a motorcycle went airborne after crossing this second of the roadway. He wound up in the hospital.

The sales team of a Utah business wasn't looking for a cash bonus. They actually wanted a more explosive reward.

(VIDEO CLIP PLAYS)

PHILLIPS: That was the deal that was struck. The team at Adaptive Computing would get to blow up their boss' car if they reached their sales target. Well, as you can see and hear, they did, and then some.

Joining me from Salt Lake City, Utah, Jess Arrington, senior accounting executive, also, Jonathan Ryskamp, V.P. of sales, minus a clunker this morning.

Jess, you actually proposed this idea. Why?

JESS ARRINGTON, SR. ACCOUNT EXEC., ADAPTIVE COMPUTING: You know, we had plenty of time making fn of his car and we got motivated.

(LAUGHTER)

PHILLIPS: Jonathan, what was wrong with your car? Was it that much of a hoop-dee?

JONATHAN RYSKAMP, V.P. OF WORLDWIDE SALES, ADAPTIVE COMPUTING: Well, I actually have two cars. I have one for customer visits. And this was my computer car and it smelt like burn oil, shattered upholstery and I actually hide the trunk shut. So, it had probles.

PHILLIPS: It's scary not knowing what might have been in that trunk. Jess, maybe you should have checked before you blew it up.

Well, Jess, is it true you actually had a team member with you that, shall we say, had a special Hollywood edge?

ARRINGTON: Yes. He did. We're so grateful that he knew what he was doing so that he could make it special.

PHILLIPS: What exactly did he do in Hollywood?

ARRINGTON: You know, I don't know a lot of those details. We just know he did well at --

PHILLIPS: Blowing things up? Yes, stunts, I guess you could say. Pyrotechnics, in other words.

Now, Jonathan what are you driving now? A scooter?

RYSKAMP: No. I picked up a Honda Pilot.

PHILLIPS: Oh. There you go.

RYSKAMP: I upgraded.

PHILLIPS: You did upgrade.

All right. Now, seriously, all the families came out for a party afterwards, I understand.

Jess, how did this boost morale at the company? I mean, the fact Jonathan that played along with this, what has it done for everybody right now during this tough economy?

ARRINGTON: That we met our number that I think is a big relief so that people can get paid. And having fun family activities like this is really enjoyable for all of us.

PHILLIPS: No doubt.

So, Jonathan what are you going to let them blow up next when they meet their next target goal?

RYSKAMP: We haven't decided yet. We're definitely looking at something, though -- something bigger.

PHILLIPS: Good. We can't wait. We're standing by for the video.

Jess, Jonathan, it was fun to talk to you. Thanks so much for adding a little humor in our morning.

RYSKAMP: Thank you.

ARRINGTON: Thank you.

PHILLIPS: You bet.

Well, next, the age of George Jetson is here. You're not going to want to blow this one up. Why? Because it flies, and pretty soon, it could be on the road.

Also coming up -- got PMS? Get milk. A new ad campaign has us asking: does it really help with those awful symptoms? And why are we looking at a man?

(COMMERCIAL BREAK)

PHILLIPS: Another fan almost fell over railing at a ballpark -- this is just days after a fan fell at a Texas Rangers' game and died. It happened at the all-star home run derby. Prince fielder's home run to right center. Watch the spot shadow.

Keith Carmichael (ph) falls over the rail, but his brother and a friend and some other fans grabbed him and held on to him. He's the big winner, but the big winner on the field, Yankees second baseman Robinson Cano beat the Red Sox, Adrian Gonzalez, 12-11 in the final. What made it more special, his dad was the one pitching to him.

And fans have their chance to congratulate Derek Jeter on reaching 3,000 hits. A 15-foot card in New York's Grand Central Station, if you can't get there to sign it, online wishes are being posted to it as well. Gillette will present the card to Jeter, along with $50,000 for his charity.

And the U.S. women's open goes to playoffs. South Korea's So- yeon sinks the birdie for the win. Her first on the LPGA tour. Another South Korean golfers ran into the green to douse her with champagne. There you go.

It sounds like something right out of a back to the future or the Jetsons. But fine cars are actually real and it's been cleared for takeoff. And now, it may not be long before you see them hit the road.

Alison Kosik is at the New York Stock Exchange tells us why.

ALISON KOSIK, CNN CORRESPONDENT: Hi, Kyra. This definitely is cool.

This is one smart car with wings that actually fold in so it can drive on the road, and fly in the air. The company that's making it is Terrafugia. And if you took Latin, you may remember means escape the earth. And that's exactly what they have in mind with their transition flying car.

So, it's been in development for a couple of years now. But the big news coming out now is that the National Highway and Safety Administration -- they cleared it for the road and Terrafugia had to get on these special exemptions to use lighter weight plastic windows instead of glass, heavier than usual tires that can handle both a landing and that usual road-based driving. And also, who can forget the takeoffs?

The transition, by the way, was cleared by the FAA, Kyra, as a "light sport aircraft" last year.

You want one of those?

PHILLIPS: It sounds pretty cool. Is everyone going to be able to drive them?

KOSIK: Well, you know what? Anyone with a valid driver's license can drive them on the road. But if you want the flying car to fly, you're going to need at least a sport pilot's license. So, you got to get a license first.

And here's another stipulation. You have to actually takeoff and land at the airport. You can't be on the highway. So, don't expect to see them landing or taking off from the interstate any time soon.

Guess what the price tag is on one of these? About $250,000. The company is taking reservations right now. Hey, if you're willing to pump down a $10,000 deposit.

What recession? They got a lot of applications now, by the way.

PHILLIPS: I can just imagine. All right.

Well, stories making news later today:

President Obama presents the Medal of Honor to Army Sergeant 1st Place Leroy Arthur Petry at the White House at 2:00 Eastern.

Congressional leaders are at the Chief Executive Mansion for a meeting with the president of reducing the nation's debt. That meeting is set for 3:45.

And a memorial for former First Lady Betty Ford being held at 5:00 Eastern Time in Palm Desert, California.

All right. Coming up, got PMS? Get milk. The milk board has a hilarious new ad campaign, and we're going to show you that and whether it really can help those symptoms.

(COMMERCIAL BREAK)

PHILLIPS: Well, crew members at the International Space Station doing a space walk right now. It will last more than six hour, but what's catching attention is this new system that they're testing to actually turn their urine into a sugary flavored drink.

John Zarrella joins us live to talk more about that.

Just one of many inventions that have happened up there in space, John. But this is catching a lot of people's attention.

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, it really has. And, you know, the ability to do that being tested on the International Space Station, and it's because, you know, they have to find a way to recycle all of this stuff, literally "stuff." So that's one of -- not that anybody's too anxious to be the first to sample it, I don't think, but they are working on that, along with a bunch of other things.

You know, they got something like 120 different spin-offs that have come out of the space shuttle program alone, another 80 that came out of the Apollo program. You know, we were talking earlier. There's one that's a nutritional supplement in milk for babies that came out of it.

There's all kinds of devices that have -- what we're looking at right there is the space walk that's underway right now, 245 miles, Kyra, above the south Pacific Ocean. And you're looking at the shuttle's or the robotic arm, the Canadarm of the space station.

On the end of that arm is in foot restraints is astronaut Ron Garan. And Garan is actually holding on to an 800-pound ammonia pump that failed a year ago and they're moving it from a stowage rack right now from there into the shuttle's cargo bay so that it can be brought back to earth as part of the more than 5,000 or 6,000 pounds of space junk that they're going to be bringing back.

And, you know, you can see there. That's one of the helmet camera shots and I'm not sure which one it is, if it's 18 or 20. That's how they differentiate which of the helmets is being used. Mike Fossum is helmet cam 20 and Ron Garan is helmet cam 18. But that's literally a shot from the helmet camera as they're working with some of that equipment out there moving that 800-pound ammonia pump to inside the shuttle's cargo bay.

Absolutely amazing when you think of it what we are seeing. I believe that that's Fossum's helmet cam there.

PHILLIPS: Pretty cool stuff, John. We'll keep watching it live as it unfolds -- 6.5 hours. Pretty awesome. Thanks, John.

ZARRELLA: Yes.

PHILLIPS: All right. The anxiety, the mood swing, the irritability. So, for those who suffer from PMS, guy, there's hope.

Yes, guys. The campaign from California milk board, that's what this is, playfully targeting men as a type of PMS suffers by proxy, shall we say. Now, what we wanted to know is, are they right?

Elizabeth Cohen joining me now.

And, Elizabeth, I just want to bring up the Web site because it's pretty hysterical. Let's roll it. EverythingIdoiswrong.org. It's a hilarious campaign.

And you can see the guy in the middle of the screen holding that glass of milk saying, this can help with PMS. So, give us a reality check. Is there truth to that?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, there actually are studies that show that women who get a lot of dairy products -- not just milk but a lot of dairy products, low-fat, do seem to suffer from PMS less. So, you are looking a little grumpy. One for you. One for me.

But I want to emphasize, it's not just milk. So, here. It's low-fat dairy. Here's some low-fat cheese, OK, and yogurt. OK? All for you.

PHILLIPS: I'll take the yogurt actually. Thank you very much. I'll hold on to that.

COHEN: You got a case of the grumpies, Kyra, just dig in.

PHILLIPS: So there is some truth to this?

COHEN: Yes, there is. Four servings a day.

PHILLIPS: OK.

COHEN: The women who had four servings a day. Stuff like this, right.

PHILLIPS: OK. Now let's get to the posters. I mean, you know, we're used to seeing the Got Milk with the mustache with all the stars.

COHEN: And it's all the same marketing. They're good. They know what they're doing.

PHILLIPS: So, now, as we roll, you know, it's man after man, you know, holding the cartons of milk, you know, just saying, you know, we can both blame myself. I mean --

COHEN: There are good things to say. I highly recommend. From a psychological point of view? Absolutely.

PHILLIPS: You know men say it. You know women say it. You know we both suffer from it.

So, I'm just curious, has there been any backlash to this so far?

COHEN: You know what? It's interesting. This campaign has been around in some form of another for five years. And there really hasn't been. I thought maybe feminists sort of object to it, or women's groups sort of object it.

The only people I can see maybe objecting are scientists who might say it's not just milk that helps, any kind of dairy. As we can see from your sloppy cheese over there.

PHILLIPS: Right. Exactly. Thank you very much.

COHEN: And also, some study have shown that things like riboflavin and thiamine might help, too. That's in spinach and fortified cereal. So, it's not just milk.

But, you know, you can see why the milk people -- they're going to say milk.

PHILLIPS: There you go. There's a reason why to drink their milk.

Thanks, Elizabeth.

COHEN: Thanks.

PHILLIPS: All right. Coming up in THE NEWSROOM with Suzanne Malveaux, more fallout from the cheating scandal that's rocked the Atlanta public school system.

(BEGIN VIDEO CLIP)

KHAATIM SHERRER EL, FORMER SCHOOL BOARD MEMBER: I failed to protect thousands of children -- children who come from homes like mine.

(END VIDEO CLIP)

PHILLIPS: A school board member breaks down in tears while turning in his resignation and several other jobs on the chopping block.

Plus, we're talking to the lawyer representing the family of Milly Dowler. Investigators say the British tabloid "News of the World" hacked into the 13-year-old cell phone while she was missing, sparking public outrage against the paper.

That and more coming up in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Well, no more Mr. Nice Guy. GOP presidential candidate Jon Huntsman taking the gloves off.

And our deputy political director Paul Steinhauser is going to tell us who he is going after -- Paul.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes. He's going after Mitt Romney, who, you know, according to the polls and everything else, seems to be the perceived front-runner right now in the battle for the GOP nomination.

As you said, no more Mr. Nice Guy. Yesterday and last night in South Carolina, Huntsman seemed to be trying out a new line, sharpening his attack against Romney. And it's over job and questioning whether Romney was a great job creator.

Huntsman pointed out that, hey, when I was governor in Utah, we were number one in the nation when it came to creating jobs. And he said, guess what? Massachusetts was 47th.

Well, guess where Romney used to be governor? Massachusetts? Stay tuned, Kyra. I think this one is far from over. I'm sure there will be more to be said about this -- Kyra.

PHILLIPS: Did you say something about it's Election Day?

STEINHAUSER: It is. Right in the middle of July --

PHILLIPS: Wait a minute.

STEINHAUSER: What is going -- exactly. Wait. But it is Election Day. And you could say, Republicans are California dreamin' but here it is. The GOP thinks they may be able to pull an upset. It's a special election out there in the Los Angeles area, along the beach, the South Bay area of L.A., Manhattan Beach, some of those other places.

It's an open House seat. It used to be Jane Harman's old seat. The Democrats have had this district for years. It's a Democratic district, overwhelmingly.

But the tough economic times out there, plus a very low turnout could keep this contest pretty close.

We'll keep our eyes on it and report back tomorrow, Kyra.

PHILLIPS: Sounds good. Thanks, Paul.

And, of course, you can always go to our Web site, CNNPolitics.com for all things political.

That does it for us. We'll be back here tomorrow morning bright and early.

Suzanne Malveaux takes the ship from here.

SUZANNE MALVEAUX, CNN ANCHOR: It's a hot afternoon. I hope you're not going to be outdoors.

(CROSSTALK)

PHILLIPS: Maybe we should stay at work all day. It's a good excuse to stay inside.

MALVEAUX: You need to get home to those babies.

PHILLIPS: There you go.

MALVEAUX: All right. See you, Kyra.