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Tensions Skyrocket in Debt Talks; New Arrest in Murdoch Scandal
Aired July 14, 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: And it's 10:00 a.m. on the East Coast, 7:00 a.m. out West.
Hello, everyone. I'm Kyra Phillips.
A home town bids farewell to Betty Ford. Right now, a public viewing drawing to a close in Grand Rapids, Michigan. A final service will be later today.
On Capitol Hill, Federal Reserve Chairman Ben Bernanke gives an update on the economy and the nation's final policies. He's testifying before the Senate Banking Committee.
In China, a section of bridge collapses, sending a tourist bus plunging into the forest below. The Chinese government says one person is killed, but there's other reports saying that death toll is rising.
The clock is ticking and tensions are soaring. And if you want an idea of just how heated things are over the debt crisis, listen to this -- the president stormed out of the president's meeting and vowed that he will veto any extension of the debt ceiling that's only short term. According to sources, this fiery confrontation with House Eric Cantor ended with the frustrated president saying, quote, "This could bring my presidency down."
Today, top congressional Democrats and Republicans return to the White House for a fifth straight day of talks. The August 2nd deadline is looming and pessimism is growing. In fact, a major rating agency says it will review the nation's sterling bond rating for a possible downgrade.
We're covering all the developments. Dan Lothian is at the White House with this extraordinary ratcheting up of tension and Kate Bolduan is on Capitol Hill.
Dan, let's go ahead and begin with you.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, I can tell you that I spoke to a Democratic official familiar with the talks who told me that the president told lawmakers yesterday that Friday is really the deadline to get a sense of which direction they are going in terms of getting any progress on deficit reduction. If not, this official said that the White House wants to start looking up what they can get done in terms of options in order to raise the debt ceiling because they still believe that it would be a major catastrophe for the overall U.S. economy if that is not done.
As you pointed out, the president, despite calls for short-term deals, is completely against that and made that very clear to lawmakers yesterday, even threatening to veto any short-term deal because the president still pushing for the biggest deal possible. He believes that that is best for the overall economy. And, secondly, he says that if it's so difficult to get this deal done now, how in the world, during the middle of this election cycle, will you be able to get anything else done?
So that's why the president does not want the short-term deal but it sort of sets up major tensions between Republicans and Democrats as they return to the table this afternoon, Kyra.
PHILLIPS: Well, what do you think? Are they going to get anywhere? I mean, we heard Eric Cantor says that this has erased any progress made so far after the president stormed out of there saying, "Hey, this is going to bring down my presidency. I've had it."
LOTHIAN: Well, it's certainly -- he hoped that there will be progress today. One Democratic source saying that they believe that the tone today will be much different than it was yesterday, but clearly, there are big differences. I mean, there are still -- we've been talking about this for days now like a broken record.
There is still this issue of how do you get to the revenue side of it? The White House, the president believing that the way to do that is that you have to raise taxes on wealthy Americans and that won't even take place until 2013 and Republicans are saying that they are not going to accept it. So, you know, there has to be some way to get to the revenue and that will be the focus of today's meeting. And the hope is that they can get some progress as the clock ticks.
PHILLIPS: All right. Let's head to the Hill now. Dan, thanks.
Kate Bolduan, what's the latest from there?
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Well, I'll you, Kyra, it seems that the frustration inside that room is now spilling outside that run, into the public forum. And the reaction, the mood up here, has been grim really all week, as we've been talking, and it seems that following this very dramatic meeting at the White House, it's going to be only more pessimistic than it was before.
The Senate Majority Leader, the top Democrat in the Senate, Kyra, Harry Reid, he just took to the Senate floor. He often does at the beginning of business every day, and he actually went as far as to call the number two Republican in the House, Eric Cantor, childish in light of how things developed yesterday and he also kind of reinforced the point and a warning of what could happen and what he thinks will happen if they don't reach a deal by August 2nd.
Listen here to Harry Reid.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MAJORITY LEADER: Economists have also said, Ben Bernanke, appointed by President Bush as chairman of Federal Reserve, has said default would be a major crisis that would send shock waves to the world financial markets. And yesterday, a failure to avert default would mean huge financial calamity.
(END VIDEO CLIP)
BOLDUAN: Now, I'll tell you, Kyra, it's not really clear at this moment in the day where things go from here and what the reaction is going to be from lawmakers up here. And here's why -- the short- term deal that the House majority leader, Eric Cantor, he started pitching yesterday in this meeting, it hasn't been part of the equation until this point and that's because Speaker Boehner, Eric Cantor, and president has said that a short-term deal is a no-go.
And it still may be a moot point as the president reinforced his position yesterday that he'd veto any kind of short term extension. So, bottom line, it seems that we're still locked at square one, Kyra.
PHILLIPS: All right. Kate, Dan, thanks for watching closely.
In just about 10 minutes from now, we're going to check in with Alison Kosik at the New York Stock Exchange. She's going to give us the bottom line the economics. Why should you care that the U.S. bonds could face a brutal reality check?
Well, pressure is mounting and insiders are being held accountable. Now, an arrest is made in the scandal that has rocked Rupert Murdoch's media empire. And even more proof about the hacking investigation is? Well, London's top police officer faces a public grilling today.
Dan Rivers is in London with more -- Dan.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, that's right. Sir Paul Stephenson, who is the most senior policeman in Britain, is being questioned closely about that original police investigation into hacking which many people think was inadequate. It didn't look at the wider picture of the systemic, illegal activities that we now appear to know about in several newspapers. It was just now really focused on the hacking of Prince Williams' phone. So, he's being grilled there.
And then, Rebekah Brooks, the embattled chief executive, is due to be grilled here in the building behind me next Tuesday.
But Rupert Murdoch and James Murdoch, his son, are also being asked to turn up. So far, they're saying they either won't or can't, and they have been served with the summons by the deputy sergeant of arms, which means that they are being sort of demanded that they come. It's pretty serious stuff. The problem is, because they are American citizens, no one is quite sure if they can have jurisdiction over them, forcing them to turn up or not.
So, there's lot of sort of heads there. It's completely unchartered territory and they are talking of, you know, maybe of even sort of introducing emergency laws to try and force them to come along.
PHILLIPS: We're following it closely. Dan Rivers, thanks.
Well, they are almost there. The U.S. women's soccer team, one win away from hoisting that World Cup. They are going to face Japan on Sunday in the championship match after their 3-1 win yesterday against France.
Zain Verjee is not only watching all of the action. She is going to be there for that game. She's going to report live and give us every single detail, right?
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: You bet, Kyra. It's going to be so much fun. And the hot favorite to win are the United States. There's so much anti-American sentiments in the world, you know, in so many places, but actually this match, this weekend, the hot favorite is the U.S. and the people are really cheering and rooting for them to win.
Back home in the U.S., take a look at the "Orlando Sentinel." This is their headline. "Women give U.S. soccer an exciting but fleeting ride." It says, "Soccer needed the exposure in the U.S., a place where the sport was an acquired taste, much like sushi."
And then check out "The Dallas Morning News." It is headlined "Japanese Dream Continues." "The Japanese players,' it says, "had more in their minds than their next game. In the wake of the tsunami and earthquake, they wanted to provide a feel-good story for fans back home. And they came through."
Well, the U.S. team, Kyra, is doing the same thing. It's a feel-good story and really giving a boost to soccer in the United States as well. They are a great team, so talented, so fit, who've got so much stamina. You know, you really need it to run up and down this field for so long, 90 minutes a game and actually -- you know, the men tend to fake injuries more than the women. OK? Apparently.
So, the women have been given a thumb's up in this World Cup tournament. They are not faking it and simulating pain as much.
You know, just one other thing, Kyra. You know, football/soccer is such a global game. Think of it, you know, for many other parts around the world, it's as common to see a Manchester United t-shirt and people playing football in Afghanistan and Iraq and all of Africa is to go around the U.S. and see a Yankees cap. It really is so important in so many ways.
So, a lot of the world is really happy that the U.S. is taking such interest and enthusiasm this time around. I hope the women's team wins. I'll be kicking a football around with them, a soccer ball around with them for a few hours before the match, Kyra.
PHILLIPS: I can't wait. Yes, I'm sure you can teach them a few things.
VERJEE: Me and Abby.
PHILLIPS: Yes, there you go. You and Abby together on there. You won't be faking anything. That's for sure.
VERJEE: No way.
PHILLIPS: Thanks, Zain.
VERJEE: Thanks, Kyra.
And an hour from now, Abby Wambach actually is going to talk live with us about yesterday's big win and Sunday's championship. That's next hour, right here in the CNN NESWROOM.
In the modern world of modern -- or in the world, rather, of modern media, he is the wizard of Oz, managing the message behind the curtain. Just ahead, we'll take a good hard look at News Corp's CEO, Rupert Murdoch.
And your favorite TV shows honored. This year's Emmy's nominees are out. Entertainment headlines next.
(COMMERCIAL BREAK)
PHILLIPS: He's considered one of the most influential men in modern media. And now, Rupert Murdoch is becoming a larger figure in the U.K.'s phone hacking scandal.
CNN's senior correspondent Allan Chernoff has on this self-made billionaire -- Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Kyra, absolutely stunning developments in Britain. Rupert Murdoch, in the matter of days, has gone from being the ultimate power broker to a pariah in Britain. This is a man who is widely considered to be an absolutely brilliant and ruthless businessman and he's achieved much of his success by pushing his media properties, especially newspapers, to find and feature sensationalistic stories.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Rupert Murdoch's great love has always been the newspaper business, say those who know him. He demands dramatic stories, telling reporters, we will never be boring, and frequently checks in with his top editors, one of whom used to be Lou Colasuonno.
LOU COLASUONNO, SR. MANAGING DIR., FINANCIAL DYNAMIC: He's passionate about his newspapers. And along with that passion comes an involvement in the day to day operations of his papers, particularly his biggest ones.
CHERNOFF: Murdoch's ambitions began in his native Australia, inheriting his father's newspaper business. Murdoch added media properties across the country, even started "The Australian," a nationwide paper. And aggressively used them to support politicians he favored.
Overseas, Murdoch's first purchase was a British tabloid "News of the World," followed by "The Sun," both of which he pushed to a new label of sensationalism.
MARTIN DUNN, FMR. DEP. EDITOR, THE SUN & THE NEWS OF THE WORLD: Topless girls on page three of "The Sun" was a room for innovation.
CHERNOFF: Murdoch became the central figure in Britain's competitive newspaper market known as Fleet Street.
Former deputy editor Martin Dunn says he was as tough as his headlines.
DUNN: He was the man who tamed the print unions so that newspapers became incredibly profitable.
CHERNOFF: Checkbook journalism, paying for stories, was a regular practice that paid dividends with higher newspaper sales. Some detractors referred to Murdoch as the dirty digger.
COLASUONNO: He ran close to what maybe considered journalistic ethics. I'm not saying he broke the law. I'm not saying he did anything illegal, but I will say that he's aggressive in getting stories.
CHERNOFF: Murdoch also used his paper as a power base. With his editorial support, Margaret Thatcher, John Major, Tony Blair, and David Cameron all rose to prime minister.
ALEX BEN BLOCK, AUTHOR, "OUTFOXED": He, more than anybody I've ever seen in my lifetime of the media, understood how you can use the power of the media to shape the political views of the country, and in doing so, to affect elections.
CHERNOFF: And to assist his business ambition.
Murdoch did the same in the U.S.
RUPERT MURDOCH, CEO, NEWS CORPORATION: Now, we are moving very fast at News Corporation to have a worldwide platform.
CHERNOFF: Newspapers, Internet, television, film, all together have expanded his political influence. His decades of brilliant business and political success make this week's collapse all more the shocking.
Murdoch has achieved the impossible, said one of the observers. Britain's normally divisive political parties are now all united against him.
DUNN: I think it's terribly devastating. He doesn't understand the word defeat.
(END VIDEOTAPE)
CHERNOFF: Rupert Murdoch is definitely used to winning. He once told "Vanity Fair," I love competition and I want to win.
Kyra, a very, very rare defeat for a man who even last week we could have called the most powerful media baron on the planet.
CHERNOFF: Allan Chernoff out of New York -- Allan, thanks.
And now, two U.S. lawmakers want to investigate Murdoch's empire. CNN's Brian Todd is on that for us.
Stories cross country now:
In California, the fed deals a critical blow from the Mexican mafia's operation in Orange County. Ninety-nine alleged gang members rounded up and charged with crimes, including murder, extortion and drug-trafficking. Operation Black Flag also seized weapons, everything as you can see here from handguns to assault rifles.
And take a look at these pioneering Afghan women in San Antonio, Texas. They are trained to be the first female pilots in the Afghan air force. They're going to spend up to eight months studying English before they learn how to fly helicopters.
And we never get tired of seeing this. Jacksonville, Florida. Navy pilot Brad Hoyts (ph) surprising his son at preschool. Hoyts has been serving overseas and he hasn't seen his son in six months. He'll deploy again in less than a year.
As Congress works to hammer out a deal on the debt ceiling, some of the top rating agencies in the Wall Street are issuing some pretty dire warnings.
Alison Kosik has more from the New York Stock Exchange -- Alison.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: And, Kyra, the newest warning coming from Moody's, it's one of the three major ratings agencies here on Wall Street. You know what it says, that it's going to review the government bond rating for a possible downgrade if the debt ceiling isn't raised in time. Translation: it means it's on the verge of cutting our nation's credit score.
And guess what kind of message it would send to the world? It would say that investing in the U.S. is not as safe as it once was. Right now, the U.S. rating is as high as it can get. And Moody's actually, though, believes that Congress is going to wind out hammering out a deal and the government will be able to pay its bills.
But, you know what? Concern is growing and Moody's is, you know, adding on to the list of Fitch and Standard and Poor's. They've also fired warning shots as well, telling Washington you've got to get your act together -- Kyra.
PHILLIPS: So, what does this mean for the economy and how investors are responding to the warning today?
KOSIK: You know, Fed Chairman Ben Bernanke talked about the consequence of yesterday. He used words like catastrophic, dire, and crisis. And, you know what? We can't help but agree with him there when you look at the possible effects of a lower rating and a default.
You know, we could see federal borrowing rates rise. We could see stocks drop. It could disrupt global financial markets, credit cards. And other consumer rates would go up, too.
And I'll tell you what? We don't want to go there. Who could forget what happened a couple of years ago when the economy didn't get what it needed. The Dow plunged 777 points when Congress didn't pass the first $700 billion stimulus. That could look like a drop in the bucket if we wind up defaulting -- Kyra.
PHILLIPS: All right. Alison Kosik from the New York Stock Exchange -- we're following it closely. Thanks, Alison.
Well, this year's Emmy nomination for primetime are out. Kareen Wynter live in Los Angeles to break it all down for us.
(COMMERCIAL BREAK)
PHILLIPS: Newcomers of primetime TV make a good showing in this year's short list for the 63rd Annual Emmy Awards. Nominees announced just a short while ago.
Our Kareen Wynter was there -- Kareen.
KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: Hi there, Kyra.
A huge morning for HBO, a whopping 104 nominations, compared to last year when they received 101. And two of their big new series, hugely popular shows, also got nominations. We're talking about "Boardwalk Empire" starring Steve Buscemi, as well -- going a little bit of blank here early morning -- "Game of Thrones." It's a medieval fantasy series that's based on several novels.
And so, those are two new serious out of HBO that people are saying, you know what, they deserve it. They are bringing in the ratings. And this is really interesting because, you know, the broadcast TV genre, we used to see so many nominations coming out of that end, and now, the world, they are taking over. And we're seeing that definitely this morning with HBO.
The comedy category, one of my favorites last year, "Modern Family," they took home the big prize. Well, they'll be going up against "Glee" this week, as well as "The Office." And so, we'll have to see who comes out of top.
And speaking of "The Office," Steve Carell, he got his sixth lead acting nomination this morning. And, you know, he's never won in this category and this could be bittersweet, many people say, because this was his last season on "The Office." And so, people are predicting that this could definitely, definitely be his year.
Another category to keep an eye on, reality shows. It took the Academy so long to really embrace this TV genre. Well, now, they are having to do that, because of the popularity of so many shows. Audiences obviously are demanding more. And so, some of the contenders in this category, Kyra, "The Amazing Race," "American Idol," "Project Runway, "Top Chef" as well as "So You Think You Can Dance."
And what any award show, you're not only looking at the surprises, but you also look at the snubs and the big bust this morning had to do with Kyra Sedgwick from "The Closer." She was nominated this lead actress drama category last year. She also won. Well, this year, no nomination for Kyra. She was snubbed.
She won her fifth statue last year after five nominations. So, it's a final season of her show. "The Closer" premiered Monday just a correction, she did win lead drama actress of the Emmy last year after five nominations.
But again, Kyra, not in the mix this year. So, we'll have to see what happens with the other contenders in that category when the show airs. It airs in September. "Glee's" Jane Lynch will be hosting -- Kyra.
PHILLIPS: Oh, she'll be great. She is hilarious. OK. That's a great reason to watch.
WYNTER: She's fantastic. She can definitely carry a show.
PHILLIPS: Definitely. Kareen, thanks.
If you want information on everything breaking in the entertainment world, you can find it on "Showbiz Tonight" every night, 11:00 p.m., on HLN.
Coming up, the president says, "Don't call my bluff," and then leaves the debt ceiling negotiations. Will walking out work? Political buzz is next.
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories.
A section of a bridge has collapsed in China causing a tourist bus to drive right off of it. The Chinese government says one person was killed. However, other reports said that the death toll is climbing.
The president storms out of yesterday's meeting and vows that he will veto any extension of the debt ceiling that's only short term. Sources tell us the frustrated president left the room, saying, quote, "This could bring my presidency down."
Talks pick up at the White House this afternoon.
A House hearing on the Consumer Financial Protection Bureau is under way. Republicans want to know why the agency still has no director one week after before beginning work.
Former New Mexico Governor Gary Johnson wants to be president. As a Republican in a Democratic-dominated state, he served two terms. He favors the fair tax and holding the line on the debt ceiling. But he's also in favor of online poker and legalizing pot.
I asked him about his provocative views just a short time ago.
(BEGIN VIDEO CLIP)
GARY JOHNSON (R), PRESIDENTIAL CANDIDATE: What are we spending our money on and what are we getting for the money that we're spending? So, when it comes to online poker, why not create tens of thousands of jobs in this country to accommodate 10 million Americans' passion to play poker.
When it comes to drugs, I'll just get back to the fact -- half of what we spend on law enforcement, the courts, and prisons is drug- related. Kyra, it is never going to be legal to smoke pot, become impaired, get behind the wheel of a car or do harm to others. It's never going to be legal for kids to smoke pot or buy pot.
But the situation that we have today, right now is that we're arresting and we're sending to jail people that sells small amounts of drugs on numerous occasions and they're getting caught for that. This is -- this is as much of prohibition of alcohol in the '20s. Who got rich in the '20s? Border violence with Mexico.
Look, this is a prohibition phenomenon. Legalize marijuana and, arguably, 75 percent of the border violence with Mexico goes away because these are disputes being played out with guns rather than the courts.
(END VIDEO CLIP)
PHILLIPS: Johnson is trying to gain name recognition in a pretty crowded field, even though he campaigns for 17 months in 38 states.
"Political Buzz," your rapid-fire look at the hottest political topics of the day. Three questions, 20 seconds on the clock.
And playing today, CNN contributor Cornell Belcher, who was a Democratic pollster for the 2008 Obama campaign. D.C. bureau chief for Comcast Network and former Santorum aide Robert Traynham. And also CNN contributor Will Cain.
All right, guys. First question: President Obama tells a GOP leader, don't call my bluff. And then he leaves the debt ceiling negotiations. What do you think, will walking out work? Will?
WILL CAIN, CNN CONTRIBUTOR: Yes, I actually think it will. Look, after months of hard negotiating, playing hardball, Republicans suggesting that they will kill the economy if they don't get big spending cuts, Senate majority leader Mitch McConnell revealed his back-up plan. You want to hear it? I'm going to give him everything that he wants. We're going to raise the debt ceiling.
Now, I'm happy to hear that sanity, that we will raise the debt ceiling. But it's the kind of negotiating tactic that allows your opponents -
(BUZZER SOUNDS)
CAIN: -- to get up and walk away from the table.
PHILLIPS: Cornell?
CORNELL BELCHER, CNN CONTRIBUTOR: I wouldn't exactly characterize it as the president walking out. I think the president is sort of - you know, tired of the Congress trying to kick the can down the road and we need a deal.
The problem is the civil war we saw in the Republican primary from last year is now spilling over to the Capitol, where Republicans are and rebellion against Mitch McConnell and Speaker Boehner -
(BUZZER SOUNDS)
BELCHER: --who both agree on this deal.
PHILLIPS: Robert?
ROBERT TRAYNHAM, D.C BUREAU CHIEF, COMCAST NETWORK: Stressful times call for obviously stressful people. It appears that obviously the Republicans and of course the president are in a very tense situation right now.
Look, the stakes are really high. If in fact the debt ceiling does not get raised, a lot of people are going to suffer. Not just Main Street -- not just Wall Street but also Main Street. I think the president knows that. And also he alluded to his presidency perhaps going down for this. I think it's a bit melodramatic.
However, the stakes are really, really high here.
(BUZZER SOUNDS)
TRAYNHAM: So, good for him for sticking to his guns.
PHILLIPS: All right. For the third time this week, guys, the survey of likely Iowa GOP caucus goers has Michele Bachmann on top. Iowa doesn't have the best track record of picking nominees. So, will they be right in 2012? Cornell?
BELCHER: Look. I've been calling Michele Bachmann for a long time. I've been real bullish on Michele Bachmann. This is the beauty of Iowa. It gives you momentum, it gives you attention, it allows you a bullhorn so you can begin to define the debate. If she wins Iowa, it will propel her forward. If Barack Obama had not won Iowa the last time around, his candidacy would have probably ended if he had done really poorly in Iowa.
(BUZZER SOUNDS)
BELCHER: Iowa is still important.
PHILLIPS: Will?
CAIN: You know, Kyra, I have to disagree with you. Iowa doesn't have that bad a track record. If you set aside '08, the GOP nominee for president has won the Iowa caucus six out of the last eight presidential elections. Now, in '08 they seemed to more interested in electing a national preacher than a president, and the picked Mike Huckabee. If they follow that same path again and do the same with Huckabee, yes, they will be wrong.
PHILLIPS: OK. Robert?
TRAYNHAM: The people of the great state of Iowa are very, very smart. They love to touch their candidates, feel their candidates, size them up and down. You know what? They move on and obviously say this is who we think should be president. But at the end of the day it's going to be about Michigan, Florida, Pennsylvania, and Ohio. Those are the battleground states in Super Tuesday that is probably going to decide who the GOP nominee is going to be.
PHILLIPS: OK, guys. Your Buzzer Beater. Ten seconds each. You just heard a moment ago from presidential longshot Gary Johnson, who I had a chance to talk to, he's pro pot, pro gambling. Now in now, in a bad economy, is this what a down and out America is looking for? Will?
CAIN: You know, look. Geez, Gary. I mean, I actually think he's right. He gave you a very eloquent answer. But he's not doing any favors to his Vegas odds for winning presidency.
Is this what we need in a down-and-out economy? We're all kind of smiling.
(LAUGHTER)
PHILLIPS: Cornell?
BELCHER: I'm not so sure this is what we need, but I certainly a lot of my friends are now more interested in his candidacy than they were before.
(LAUGHTER)
PHILLIPS: It says a lot about your friends there, Cornell! You want to add to that? You have a few more seconds.
BELCHER: No, I'm good.
PHILLIPS: OK, Robert?
TRAYNHAM: You know, the Constitution says if you meet the qualifications, the minimum qualifications, you can run for president. Governor Johnson, good luck.
PHILLIPS: Thanks, guys. Appreciate it. We'll see you again.
TRAYNHAM: Have a good day.
PHILLIPS: You, too.
For millions of Americans, the frail health of the economy can be measured with one single word: jobs. So, with that in mind, our Poppy Harlow sat down with President Obama's right-hand man on employment.
So, Poppy, Jeff Immelt is the CEO of General Electric, but in your conversation he looks at the much bigger picture?
POPPY HARLOW, CNNMONEY.COM: Yes, of course. It's an interesting thing, Kyra, the fact that he runs this corporation. When you look at GE over the last decade, they've actually cut about 35,000 American jobs. You more people, 60 percent of their workforce overseas now than in the U.S.
He's also, as, you said, the president's right-hand man on jobs. He's got a lead on how we're going to create mass jobs, how you get these big U.S. companies to hire. And we sat down, went down to one of GE's plants in South Carolina. Sat down with Jeff Immelt and talked a lot about jobs and specifically what's making headlines right now. The lack of an agreement in Washington on raising the debt ceiling.
What I thought was very interesting, you'll hear his answer, is the impact that he thinks it's going to have on small businesses if we can't see lawmakers reach an agreement by that August 2nd deadline. Take a listen.
(BEGIN VIDEO CLIP)
JEFFREY IMMELT, CHAIRMAN/CEO, GE: I would ask people, don't think about GE so much. Think about a small business person who really do create a lot of jobs in this country. They are petrified right now.
HARLOW: What are they scared of?
IMMELT: Look, what happens if the government doesn't roll over its debt? Why would you invest into that? And if the budget deficit means super-high tax rates for them and things like that, again, that to me is the piece that is missing. There has been bad new business generation, small businesses have gotten hurt coming out of this recession. Guys like us that have a global footprint and global demand, we're going to power through this.
(END VIDEO CLIP) HARLOW: And you know, Kyra, he also said, at this point, look, it's up to big corporations like GE to hire workers and see mass hiring from these private companies and public companies that have trillions of dollars of cash on the sidelines that they are not using. He actually said, quote, "There is no excuse not to invest at this point." And look, he says it makes more and more sense to bring workers back to the U.S. GE started doing that last year. We're seeing more of that. But he said at this point, business leaders need to take that initiative and bring the jobs already. Kyra?
PHILLIPS: So, what are his recommendation for creating jobs?
HARLOW: Sure. So, one, you would expect, right? This is a Republican that is on the president's council. He got some other Republicans on the council. One of them is, cut the red tape. Cut regulation.
Now, that's interesting rhetoric. We often here hear it from business leaders. I asked him do you think that is realistic to cut some of this regulation soon? And he said not only is it realistic, he thinks it's going to happen before the 2012 election and that will create jobs.
He also put out five other recommendations on creating jobs. Putting the two million American construction workers back to work on these infrastructure projects. All these folks out there, they know who they are, putting them back to work. Giving them the necessary training.
But this was an interesting one. He said, look, it may not be sexy, but really shorten the time needed to get a visa to come to the United States. He said our tourism industry is down by 50 percent. It takes eight weeks at least for people to get a visa to come to this country and spend money. Shorten that to a week like our competitors. He said that can be done immediately. He said he's pushed the administration to try to get that done. He said hat is going to help as well.
There are places where he and the folks on this council that are Republicans differ with President Obama, but he says that the administration has been receptive to it.
We had a long conversation. You can see a lot of it right here on CNNmoney. But again, someone from the private sector. Big business in the White House having a front seat at the table on this jobs conversation with President Obama. Kyra?
PHILLIPS: Poppy Harlow, thanks so much.
After a decade at war, medical breakthroughs have healed our wounded warriors who defend our country, and it turns out that it's good news for you, too.
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PHILLIPS: Checking stories "Cross Country." In Los Angeles, police arrest a man for stalking actress Halle Berry. They say Anthony Franco jumped a fence and prowled around her home twice last week. Police say he has a criminal history of violence, so Berry wants a restraining order.
Talk about a different twist to a bachelor party. Instead of drinking like fish, this guy near Galveston, Texas, lands a nine-foot long bull shark. The group caught several more sharks but Zachary Seltis' (ph) was easily the biggest.
And in Providence, Rhode Island, a new law allows police to charge kids under 18 for sexting explicit pictures of themselves. There's strong penalties for people forwarding those photos on to others as well.
Battlefield breakthroughs. After ten years of war, our wounded warriors need them. We're talking about Medical First and cutting- edge technologies that are not only healing our men and women in war but helping patients like me and you, too.
Pentagon correspondent Barbara Starr has seen these advancements firsthand. Tell us about them, Barbara.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Kyra, you wouldn't think that both military medicine and your medical care are linked, but indeed they are. It's part of a special we were working on for Sanjay Gupta's weekend show. We traveled to Baltimore Shock Trauma Hospital just a few miles from Washington, D.C., to look at a program where military doctors who are about to deploy to the war zone first go to this hospital to get crucial training in how to deal with battlefield injuries.
You know, back home they might be reservists or just regular military docs dealing with the sniffles and the sore throats. They go to the war zone, it's all about blast injuries, burns, really life- threatening injuries, so they need to brush up on some of those medical skills.
I want to you listen for a minute to one of the military doctors at the Baltimore hospital telling us about some of the cases he's dealing with stateside.
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UNIDENTIFIED MALE: Trooper one, 15 up, 10 minutes back. Fall from tree. Category A, priority one.
STARR: Every day, dozens of trauma patients are wheeled into these bays. Some are accident victims. This young man came with multiple stab wounds. But right alongside the civilian trauma doctors, nurses and techs, military personnel.
Colonel David Powers, a surgeon, runs the military training program here.
COL. DAVID POWERS (RET.), FORMER DIRECTOR, C-STARS BALTIMORE: The injuries that I've treated here and that I see here at this hospital are the closest thing to the injuries that I saw in Iraq that I've experienced in the continental United States.
STARR: Listen to what powers has encountered in recent weeks here.
POWERS: I've have had a gentleman whose entire scalp was torn off in an industrial accident. I've had an individual who's now been involved in a motor vehicle accident that has intercranial injuries where I have to recreate the cranial vault and the frontal sinus, exactly like I have to do with an IED blast.
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STARR: Now, look. We certainly hope that nobody needs this kind of care in their local emergency room. But if you do, or if someone in your family does, the chances are that these days in your emergency room, there's going to be somebody who served in the military as a reservist or active duty who has learned all of these critical life- saving skills in the war zone and is now back home being able to use those skills right in your local community. Kyra?
PHILLIPS: Barbara, thanks so much. And this weekend, Barbara is going to join Dr. Sanjay Gupta for a special series on military medicine. See how innovations from ten years at war are changing your health care right here at home. "Battlefield Breakthroughs" on "SANJAY GUPTA, M.D." Saturday and Sunday mornings, 7:30 a.m. Eastern time right here on CNN.
Rupert Murdoch's larger-than-life media image has taken a huge hit. Now it might spread to the U.S.
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UNIDENTIFIED MALE: He has plenty of enemies in this country. And this could be - and I stress the could be - the moment when they get a lot more ammunition to use against him.
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PHILLIPS: Just ahead, a senator who wants to put his media empire under the microscope.
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PHILLIPS: The investigation into the phone hacking scandal in Great Britain could spread across the pond to the U.S. Lawmakers here want to know if any part of Rupert Murdoch's American media empire is guilty of same dishonest tactics to score a scoop. Here's CNN's Brian Todd.
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BRAIN TODD, CNN CORRESPONDENT (voice-over): As he faces the investigative music in Britain, critical mass builds to look into the actions of Rupert Murdoch's companies in the u.s. several lawmakers are now calling for investigations into whether Murdoch's tabloids hacked the phones of Americans. Powerful Senator Jay Rockefeller is leading that charge. He's especially concerned over reports that 9/11 victims' phones were hacked and he told CNN his bet is they'll find, "criminal stuff." I caught up with Rockefeller.
SEN. JAY ROCKEFELLER (D-WV), COMMERCE COMMITTEE: You know the Department of Justice and all kinds of other federal agencies are going to be going after this very hard, and we will, too. I mean, this is a - it's really repugnant, you know, that one man can control so many.
TODD (on camera): Do you have specific information that Americans that 9/11 victims had their phones hacked?
ROCKEFELLER: We will find out.
TODD (voice-over): At least two relatives of 9/11 victims are joining in this call. Contacted by CNN, the Justice Department wouldn't comment on whether an investigation has been launched. Rockefeller called for the probe after victims of 9/11 were reported to have been among the targets of British papers. "The Daily Mirror" a rival of Murdoch's papers, asserted that a New York private investigator said he'd been asked by "News of the World" journalists to hack victims' phones but that he turned down the job.
It's unclear if the tabloid journalists were after the victims of American or British 9/11 victims or both. Murdoch's company, the News Corporation, owner of some of the London papers that had been the focus of the outrage is based in the United States. Its outlets include "The Wall Street Journal," "The New York Post" and Fox News Channel. Paul Farhi of "The Washington Post" says it's too early to tell if those operations will suffer legally from an investigation.
(on camera): What kind of public backlash could there be against Rupert Murdoch and his entities in the U.S., do you think? Even if this doesn't come to full true fruition? These investigations?
PAUL FARHI, "THE WASHINGTON POST": We know him through Fox News, "The Wall Street Journal," "The New York Post" and all the TV stations he owns in this country. So he has plenty of enemies in this country. And this could be, and I stress the could be, the moment when they get a lot more ammunition to use against him.
TODD: We contacted News Corporation to ask if they would respond to the calls for investigations, if they could shed any light on the alleged attempt to hack Americans, and if they've launched their own investigation. A spokesman there wouldn't comment.
Brian Todd, CNN, Washington.
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PHILLIPS: He says he's a terror expert with a Ripley's Believe it or Not resume. And you may have even more questions about Walid Shoebat's credibility after we "Keep Him Honest."
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PHILLIPS: Stories making news later today. In New York, a civil rights group says it will begin picketing outside the home of News Corp's CEO Rupert Murdoch. That march set for 12:30 Eastern time.
At 2:00 p.m. Eastern in Grand Rapids, Michigan the funeral service for former first lady Betty Ford is set to get underway.
And at 4:15 Eastern at the White House, congressional leaders meet again with President Obama on the growing debt crisis.
He's the counterterrorism expert with a Ripley's Believe It or Not resume. And our primetime preview, CNN's Drew Griffin investigates supposed terror turncoat Walid Shoebat.
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WALID SHOEBAT, TERRORISM SPEAKER: I think we are at war with Islamic fundamentalism and Islamism, which stems from Islam. You know, no historian can deny that Islamists basically invaded Christendom.
DREW GRIFFIN, CNN SPECIAL INVESTIGATIVE UNIT CORRESPONDENT: Walid Shoebat's message is the epitome of good versus evil. He has an advertise pedigree that makes him an expert -- Islamic-terrorist- turned-ultraconservative Christian. A U.S. citizen because his mother is American, he is a darling on the terror circuits, the church and university circuits. And, yes, he believes the war on terror is a holy war.
He portrays himself as a man converted and on a mission. Once a Jew-hating, bomb-throwing terrorist, now a devout Christian convert, warning the world Islam is out to destroy you.
SHOEBAT: (SPEAKING ARABIC)
That's how you recite the Koran. I know the Koran inside out.
English: if you believe the other believers, then smite off their necks. But what part of smite off their necks you Americans don't understand?
GRIFFIN: His message before a largely positive crowd of cops and emergency responders at this South Dakota homeland security conference: trust no Muslim, especially those who organize.
SHOEBAT: Know your enemy. Know your enemy. All Islamist organizations in America should be the number one enemy. All of them, Islamist organizations. Islamists in America should be focused on. You've got that on camera.
GRIFFIN: He is being paid $5,000 plus expenses to speak here with your tax dollars. He was also given a Rapid City police guard during his time in the city, a nice day's work. Judging by his Web site, where he highlights more than three dozen speaking engagements, Shoebat gets a lot of work.
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PHILLIPS: Join Anderson Cooper tonight for Drew's conclusion on Walid Shoebat. "AC 360" at 10:00 p.m. Eastern right here on CNN.
Coming up in the NEWSROOM with Suzanne Malveaux, he says he made President Obama walk out of the room during debt ceiling negotiations. We take a closer look at Eric Cantor and what influence he has on the heated talks.
She's the athlete that has made thousands of Americans instant soccer fans. Amy (sic) Wambach led the U.S. women's soccer team to the World Cup finals. She'll join us live next hour.
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PHILLIPS: All right. No surprise, Sarah Palin is going after President Obama on the debt ceiling talks. But she's smacking down top Republican's proposal, too.
Mark Preston, what is going on?
MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Hey, Kyra, Sarah Palin is certainly burnishing her outsider image, her outside-of- Washington, D.C. image on an interview with Fox last night, where she's a paid contributor. Not only did she take on President Obama, she also took on the Republican Senate leader, Mitch McConnell.
Well, let's start with what she said about President Obama. She said that basically he is fearmongering by talking about not sending Social Security checks out if this debt ceiling is not increased. As far as Republican leader McConnell, she said that his plan that would allow the debt ceiling to increase but would make President Obama own it politically is basically ceding a territory (ph) and responsibility.
So, fact of the matter is, Sarah Palin who was still wondering if she was going to run for president, is taking a shot not only at the Republican party but also President Obama. As far as when she's going to make a decision about whether she's going to run for president, Kyra, because we're all waiting to hear what she decides, says it's going to happen in August or September. So, Sarah Palin has now given us a time line of when she's going to make that decision. Kyra?
PHILLIPS: She sure knows how to work the media, doesn't she?
PRESTON: She sure does.
PHILLIPS: We're going to have your next political update in an hour. And a reminder, for all the latest political news, go to our Web site, CNNpolitics.com.
Suzanne Malveaux, you're the political guru. Tell her we need to know right now. Get her to fess up.
SUZANNE MALVEAUX, CNN ANCHOR: We'll find out. We'll get the scoop. PHILLIPS: You always do.
MALVEAUX: Thanks, Kyra.
PHILLIPS: You bet.
MALVEAUX: See you.
