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In the Arena
Turmoil in Washington as Debt Talks Break Down; Terror Attacks Stun Norway
Aired July 22, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TOM FOREMAN, CNN ANCHOR: Good evening. I'm Tom Foreman and the president of the United States is clearly furious tonight.
Indeed much of Washington is in turmoil following the breaking news of a dramatic walkout by the Republican Speaker of the House John Boehner.
Just hours ago there was still talk that the president and speaker Boehner were closing in on a deal to head off a debt ceiling crash. Then late today speaker Boehner left the table with a terse message. He will seek a deal with Senate leaders, not the White House. It drove the president to the press room podium and listen to a tiny bit of what he had to say.
(BEGIN VIDEO CLIP)
BARRACK OBAMA, PRESIDENT, UNITED STATES: It is hard to understand why speaker Boehner would walk away from this kind of deal and, frankly, if you look at the commentary out there, there are a lot of Republicans that are puzzled as to why it couldn't get done.
In the interest of being serious about deficit reduction, I was willing to take a lot of heat from my party up until sometime early today when I couldn't get a phone call returned.
My expectation was that speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing but the right thing.
I told speaker Boehner, I've told democratic leader Nancy Pelosi, I've told Harry Reid and I've told Mitch McConnell I want them here at 11:00 tomorrow.
(END OF VIDEO CLIP)
FOREMAN: These are body blows in D.C. terms and speaker Boehner struck back himself about 45 minutes ago. Listen to what he said.
(BEGIN VIDEO CLIP)
JOHN BOEHNER, REPUBLICAN SPEAKER OF THE HOUSE: They refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform. It's time to get serious. And I'm confident that bipartisan leaders in the Congress can act. If White House won't get serious, we will.
And I've just want to tell you what I said several weeks ago. Dealing with the White House us is like dealing with a bowl of jell-o.
(END OF VIDEO CLIP)
FOREMAN: As I said this is a rapidly evolving situation this evening. We will have the complete breakdown in just a moment. But here are some of other stories we'll be checking out tonight.
(BEGIN VIDEO CLIP)
FOREMAN(voice-over): Terror strikes again. A huge bomb blasted of violence shooting in the home of the novel piece prize. If it can happen in Norway, is anyplace safe?
And Uncle Sam wants you if you're gay and lesbian after two decades of don't ask, don't tell, the military takes of the blinders.
But a few good men and women still have to stay in the closet for now.
Then, Rupert Murdoch's son in the hot seat.
JAMES MURDOCH, SON OF RUPERT MURDOCH: What I knew at the time --
FOREMAN(voice-over): What did James know and when did he know it?
Meantime, Mrs. Rupert Murdoch is in the pink. On slap! She wept from trophy wife to a vending angel.
A fascinating look at crouching Wendy, hidden tiger.
(END VIDEO CLIP)
FOREMAN: So much going on tonight, let's get right down to Washington though where the windows are still rattling over this crash on a late Friday afternoon.
Our chief White House correspondent Jessica Yellin is there. And up in Capitol Hill we have Kate Baldwin as well.
Jessica, let me start with you. We've seen this type of thing out of Washington. Rarely this pointed. How much of this is political theater? How much of this is the real deal?
JESSICA YELLIN, CNN CORRESPONDENT: Well, at this point it's the real deal. They are about ten days away for potential default and a deal has to get done tonight.
We saw the president at his most frustrated Tom in the debt negotiations. And he said that if this does not get done, Congress has inflicted a self-inflicted wound.
In a briefing with senior administration official just now, we were told that when the president receives the calls from Speaker Boehner saying this deal is off. It is surprising new here because they felt that they had come incredibly close and offered what they thought was a generous deal with $3.5 to $4 trillion on the table with $800 billion in taxes and enormous amount of agreement they thought on entitlement reform and on spending cuts.
But they said at the last minute in their view speaker Boehner's office the last minute yesterday tried to put health care reform on the table and tried to roll back parts of the healthcare reform which they said was flat out unacceptable and was a no go for the president.
So that's the point of view here from the White House. Now they called all members back to the table at 11:00 tomorrow to find some path forward to raise the debt ceiling.
The president said it has to get done in some kind of deal reached this weekend so the Congress can take action next week. Tom?
FOREMAN: Speaker Boehner came out in his comments about 45 minutes ago and he said that the president put about $400 billion in additional taxes on the table near the end. It's a bit of a he said, he said in this case.
Kate, what -- how is this playing up on the hill right now? Because the president seems to do a pretty good job initially have saying the Republicans lost their mind, we just can't trust them. But then speaker Boehner came out and spoke.
KATE, BOLDAUN, CNN CORRESPONDENT: Speaker Boehner is probably no surprise you t and of course not just because she's been dealing with the same thing that I've been dealing with, very different story coming from house Republican leadership aides here.
They say that speaker Boehner made the point both publicly and privately that he is very serious about this and once even saying to the point one person saying that speaker Boehner has always said he will link arms with the president to accomplish this. He was always striving for a big deal.
From the speaker's perspective, the White House at the last minute from their view moved the goal posts. They -- what it sounds like, not only comes to some agreement on a framework, but they were talking real details on some of these proposals, having to do with cuts and spending cuts and Medicare and entitlement changes taxes and all that.
But then the White House after this agreement that said that they have come to at least - it had reached, they say the White House moved the goal posts. And in their view, speaker Boehner her to step back, take stock of the situation and really look at the calendar very seriously. And as he said had to do something because the White House's vision was not in line with that of congress.
And that's why speaker Boehner has now made this very aggressive move saying he's now just working with Congress on this.
FOREMAN: Jessica, we're running very tight on time tonight. So I want to get through a lot fast.
Is there a sense when you look at the numbers that both sides talk about, even if you take their conflicting versions of what happened, I had the sense they were both talking about really substantial numbers and compromises at one point.
YELLIN: These are huge numbers and it would take a serious bite out of our fiscal problem. It would be real deficit reduction. That is something that Wall Street is looking for.
And we heard the president today say that he has been talking to Secretary Geithner about serious contingency plans in case the deficit -- in case this deal doesn't go through.
So this -- something needs to get done.
Wall Street is looking for serious deficit reduction. You know it could have been something big and something real that they wanted in here. I can also add - Speaker Boehner said he wants to.
They can't find a way to come together. I will add that Democrats have been emphatic that what Kate is reporting, because I know she's hearing it from Republicans on the hill and I've heard it too, Democrats are saying it's flat out wrong and they have the paper to show it.
FOREMAN: All right. We're going to move on now.
Jessica, thank you very much, and Kate as well.
Again, it's a fast-moving story. There was an unusual moment in the president's press conference today.
Listen.
He's dictating to the White House press corps telling them how to write their story tonight.
(BEGIN VIDEO CLIP)
OBAMA: When you guys go out there and write your stories, this is not a situation where somehow this was the usual food fight between Democrats and Republicans.
A lot of Democrats stepped up. In ways that were not advantageous politically. So we've shown ourselves willing to do the tough stuff.
On an issue that Republicans ran on.
(END VIDEO CLIP)
FOREMAN: Joining me now are Rick Lazio, former Republican Congressman from New York, Maria Cardona, a Democratic strategist and former adviser of Hillary Clinton and Gloria Borger, CNN chief Political Analyst.
So, did the president get the story right here?
I'll start with you, Rick. What do you think?
RICK LAZIO(R), FORMER U.S. CONGRESSMAN: Well, it sounds to me based on my observations of the president's press conference that he didn't quite deny the fact that there was a request to put more revenue on the table.
Boehner is emphatic and the Republican leadership all believes that they were close to getting a deal and that the president came back after meeting with Democrats and pushed him on this and said "I need another $400 billion of taxes".
And I think at that point that there already erosion of trust over the last couple of months. At that point, I think Republicans felt like the time is running out. We need the deal with people on the other -- in the other body in the Senate, both parties. And get something agreed to because we just can't get a deal done with the White House.
FOREMAN: Maria, who what do you think the rank and file Democrats are feeling this evening with the breakdown? When clearly, it did seem like a lot of progress was made on both sides. I don't know if we were at 80 percent or 90 percent on a deal or 60 percent. A lot of work had been done.
MARIA CORDONA, DEMOCRATIC STRATEGIST: Well, I think they, like this president is incredibly frustrated. And I'll add, the majority of the American people, too.
Because what is absolutely clear, Tom, is that Democrats really have stepped up to the plate. They have been negotiating from day one in good faith.
This is the fourth or fifth time, Tom, that a democratic leader -- I'm sorry that, a Republican leader has walked away from negotiations.
To me, it seems very simple what happened. They were on the brink of this very big deal that did include from the get goes on the president's been very clear on this, that there has got to be new revenue on the table.
From oil and gas corporations, the biggest corporation who have those past loop holes that they enjoy from the corporate jet setters, from hedge fund managers who should not be paying less taxes than their secretaries.
So all of this was absolutely on the table and part of the deal. What seems to me what happened is that when they were on the brink of getting to the point where they were negotiating this big deal, Speaker Boehner's caucus pulled him back and said the tea partiers are not going to agree with this. You cannot do this.
And he walked away, the same way that he did a couple of weeks ago.
FOREMAN: Gloria, do you buy that stuff?
LAZIO: Let me just add a couple -
FOREMAN: Let me go to Gloria, do you buy that?
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: No. I actually -- I actually think it's a combination of things and what strikes me about this is that we're -- it all came down to the same issues that we've been talking about for the last couple of years. Which is members of Congress, they were sitting around the table and say if we can't do our jobs, if this deal doesn't work, we have to have some triggers that make sure we get the reduction that we need.
And the Republicans were saying, OK. What kicks in is then are we getting of the health care mandate. And the Democrats are saying OK
What kicks in is we get rid of the Bush tax cuts for the wealthy which is, of course, the same debate that we have been having since Barack Obama became president and since health care was passed.
So it was one of the things where they were at the precipice of something really, really important. And it seems to me that they just couldn't hold hands together and decide that they actually -- the deal was more important than anything else. You know, we --
FOREMAN: I want you to listen very briefly
BORGER: Yes, we weren't in the room.
FOREMAN: Let me cut you of for a minute and listen for a moment, sure assuming we were in a room.
When Jessica Yellin asked the president about the potential outfall again of all of these, listen.
(BEGIN VIDEO CLIP)
YELLIN: Can you assure the American people they'll get their Social Security checks on August 3rd? And if not, who's to blame?
OBAMA: Well, when it comes to all the checks, not just Social Security, veterans, people with disabilities, about 70 million checks are sent out each month.
If we default, then we're going to have to make adjustments. And I'm already consulting with Secretary Geithner in term of what the consequences would be.
(END OF VIDEO CLIP) FOREMAN: Rick, it seems that both parties are absolutely are playing with fire.
The president in some quarters is accused of essentially scare tactics against the people. In other quarters, people are saying the Republicans are making this happen.
What do you make of it?
LAZIO: Well, they're both looking for political advantage, clearly.
I mean the case is that Barrack Obama when he was a senator rallied against raising the debt ceiling. I don't think that improved his credibility. He rolled out a budget that would have increased the debt by over $10 billion -- $10 trillion, rather, over the next ten years. Basically almost doubling or doubling the amount of publicly held debt.
So it doesn't really give him the high ground. You have two issues going on. One is trust, as I mentioned before. The other is there is a philosophical difference between the parties.
Republicans have been consistent in saying when you have 9.2 percent unemployment, you get almost 20 million Americans out of work or searching for work, you're not going to create incentives for create more businesses if you increase taxes on them.
So they stood for lower taxes and lower spending.
Democrats want to have increased spending and taxes. So that is a philosophical difference.
But I will also say that Democrats here have control of the Senate. People don't often point to that. They could pass something. They could pass a plan right now that would put pressure on this negotiation so try to come to some agreement.
I don't think they've got the votes among Democrats to get that done. But I do think that the debt ceiling, Tom, will get passed one or two ways. It will be the McConnell plan or the Republicans will take the cuts that look like they were agreed to through the two months of negotiations with Joe Biden and other groups and they'll have the debt ceiling increase.
FOREMAN: Let me go back to Maria very quickly here. We're running out of time, Maria.
What happened to the president we saw last week?
For a moment there President Obama seemed to speak up very loudly and clearly and say I'm going to lead these talks.
And I think a lot of people on both sides of the aisle said, great. Somebody is leading the talks. And this week he seems to be back to saying, well, nobody is really to blame. Let's work our way forward. What happened?
CORDONA: Well, here's what happened. When you lead talks, you have to have people that are willing to negotiate and lead with you.
And the Democrats were there. But the Republicans have walked away. And to Gloria's point, even if that is what happened in the room and will have all of the details tomorrow when the stories are written because the reporters have gotten the briefings as to what actually happened, two things are critically important here.
Number one is that the Republicans were clearly at the end of the day the winners in this negotiation. You look at what they were being given in term of spending cuts. It was probably between two to one, more likely three to one.
FOREMAN: And what's the number two thing, quickly here?
CORDONA: And number two is that the majority of the American -- the majority of the American people understands and wants for whatever negotiation and deal there has got to be a shared sacrifice that includes both spending cuts and new revenues.
It's fair. It's balanced. The Republicans need to understand that or they're in political peril.
FOREMAN: Last word very quickly, Gloria. With everything that's happened, are we going to get a deal?
BORGER: I think in the end we're going to get a deal. I think we're going to get a smaller deal.
As one Senate leadership aide put it to me, it's going to be the break the glass deal. You know what happens in the emergency.
But it's not going to be the deal they were hoping for. And I must say, when you have the house speaker out there saying we had $800 billion in revenue increases on the table as well as a substantial amount of spending cuts, $3 billion, say -- trillion, it's kind of a pity.
FOREMAN: It's pretty enormous too.
Listen, Rick, Maria, Gloria, thank you all for being with us.
We'll continue on this story all evening long and have more later on in this show.
But when we come back, the other lead story of tonight: Norway under attack.
One of the safest countries on the earth is shattered by a massive explosion and a shooting spree at a youth camp.
Stay with us.
(COMMERCIAL BREAK) FOREMAN: A city known for peace is reeling tonight following a horrendous string of violent attacks, some aimed at children.
Norwegian leaders held a crisis meeting tonight after a deadly bomb attack at Oslo and a shooting at a labor party youth camp outside the Norwegian Capital. At least 17 people were killed in the two attacks. And that number is expected to rise.
Look, the police are saying in the two incidents are in fact linked.
Our Diana Magnay is following the latest development for us on Oslo.
Diana, what do we know?
(BEGIN VIDEO TAPE)
DIANA MAGNAY, CNN CORRESPONDENT(voice-over): Hi Tom.
Well, I'm standing in front of the Main Parliament building here. It's an eerie scene on a Friday night in the center of town where normally there is a great deal going on. Cordoned off buildings, huge cleanup operation to try to remove the glass which did first blast and blew out many of the windows in the government quarters.
It was right targeting the one building which housed the prime minister's office. He wasn't there at the time. But seven people were killed, at least in, that explosion.
The mayor of Oslo said recently that some the (hounds of bodies) in this first explosion which happened kind on mid afternoon time here in Oslo has said that 90 people have been hospitalized as a result of that.
Then there was a second attack which occurred as you say in the Island of Utoya which is 20 miles from the center of Oslo.
And a man dressed as a policeman is said to have taken out a handgun and just shot indiscriminately at teenagers, people attending this huge party - youth labor party, youth camp over 650 of them. They were there for five days, you know, discussing political issues, the prime minister is due to arrive on the island tomorrow.
And we're also hearing from police that there has been undetonated explosives found on that island which must be making the search for bodies and for injured people there even more difficult at it time.
Police have taken custody of one man, a 32-year-old blonde Norwegian man. They are not ruling out, of course, that there could have been other people involved in this operation.
But they do say, Tom, that they believe there is a connection between the first incident in Oslo and the second one on the island that would have been possible time-wise for the suspect to have detonated the bomb here in the center of town and travelled on to the island where he carried out those second shootings in which at least ten people, some of them children, lost their lives, Tom.
(END VIDEO TAPE)
FOREMAN: Extraordinary, Diana. Thank you for that report. We appreciate it.
A Norway police official told the associated press that the attacks do not appear linked to Islamic terrorism, but experts pointed out that there aren't any domestic Norwegian terrorist groups that they know of.
And while there have been no official claim of responsibility for the attacks, cable released show a country entirely unprepared for a terror attack.
One memo describes how U.S. authorities had a feeling that the Norwegians felt terrorism happens elsewhere, not in peaceful Norway.
CNN's national security analyst Fran Townsend joins me now to break it all down.
Fran, if this indeed turns out to be something that's based in their own country, it seems to me that speak to the very thing that you and I discussed many times which is that many times countries think more of terrorists as being from somewhere else and they can be from their own midst's.
FRANCES FARGO'S TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: That's exactly right. You know, this is a tragic event.
And it has had al the sort of hallmarks, if you will, Tom, of being in a terror attack, multiple simultaneous events, large explosions the big bomb in Oslo.
And then you got a guy who steals a police uniform or creates one and then goes to this camp. He also had bomb making materials or a bomb at the island.
And so, you know, you begin to say this is an awful big sort of incident to have just one person.
So for a lot of reasons I think people assume based on recent history over the last ten years of a terror - an international terrorism conspiracy.
We are now hearing, maybe not, you know this may be a right-wing extremist, someone from they're midst.
FOREMAN: Fran, this reminds me in a wave the Oklahoma City bombing.
When that happened, it was also so big the initial idea was this had to be a group of some sort. And I guess it was in that there were two people involved. But it was neither a massive group nor a big effort.
TOWNSEND: No, that's right, tom. I think one you're going to find this would have been really hard to do alone. Let's remember the time square bomber, you know, it's hard to have one guy who can get the materials, put it together correctly and detonate it. And so it's reasonable to suspect he had some amount of help.
We're also hearing from Norwegian media source that's the individual in custody may have been a farmer. Well, that would explain his access to large amounts of fertilizer to make such a big bomb that went off in Oslo.
So, look, in the next 36 hours you're going to learn a lot more from police officials in Norway to make -- to try and make some sort of sense out of this tragedy.
FOREMAN: Did you have any sense in your time working with the government on these programs, Fran, that there was this sense of some places, Norway being one of them, where terrorism was still seen as something that could not come there?
Because in fairness, before 9/11, before the first world trade center attack, before that, we kind of felt like it couldn't come here either.
TOWNSEND: You know it's true. The wiki leaks cable comes from sort of several years ago. I think in recent years my understanding from U.S. counter-terrorism officials was that Norway did begin to understand it could happen there.
I mean they were -- they were a country who also published the cartoon of the prophet Muhammad. They do have Islam's leader there and interaction with him recently, the leader of this group from Iraq.
And so there have been incidents. They provide forces to NATO and Afghanistan. And so for a lot of reason I think Norway's law enforcement intelligence community had begun to see the possibility of an attack there.
FOREMAN: Didn't - I know that Norway said that this was a legitimate target for his efforts?
TOWNSEND: Absolutely. And they said they were going to -- Al Qaeda was going to take revenge for the publication of that cartoon of the prophet Muhammad.
FOREMAM: I mention that simply because we want to make clear why people might think of Islamic terrorists when this happened.
Because there was friction there although again the indication right now is this probably was not the case here.
Fran, is there any real lesson that can come out of this right now for other countries?
It seems to me the only one really is a reiteration of this notion that you simply cannot look at your borders, you can't just look at your airports. You got to be looking at your own population at the same time you're looking at the world population in this world we live in.
TOWNSEND: That's right, Tom. The other message, I think, is for that reason all countries have to sort of have a crisis management plan. You have to know who's in charge. Who's responsible for the investigation?
You want to have countries that are resilient so they can bounce back from. This I think the prime minister struck the right note when he said whoever did this can't bomb us into silence. What you want is resilient society that will bounce back and not become fearful or put in place measures that restrict freedom.
FOREMAN: All right, Fran Townsend, thank you so much for joining us.
The heat is also rising on another story overseas tonight.
The hacking scandal in Britain, the latest, a member of parliament is suggesting that one of the Murdoch's flat out lied when he spoke to the government leaders there earlier this week.
He joins us from London when we come back.
(COMMERCIAL BREAK)
FOREMAN: New developments in Britain's phone-hacking scandal in- depth tonight as James Murdoch, that's the son of Rupert, comes under new scrutiny. British MP Tom Watson today urged Scotland Yard to open a criminal investigation into claims the News Corp. executive lied in his testimony to Parliament.
This a day after two former News of the World executives accused the younger Murdoch of giving "mistaken evidence." You may remember Watson from Tuesday's testimony, known as the "tormenter-in-chief." He was the one hammering away at both Murdochs about exactly what they knew and when they knew it, a bone he has picked on for more than two years now. Tom Watson joins us now from London.
Mr. Watson, thanks so much for being here. You say this is the most significant moment in two years of phone-hacking investigations. And it all centers on an e-mail involving an ex-News of the World reporter. Explain.
TOM WATSON, MEMBER OF BRITISH PARLIAMENT, LABOUR PARTY: Yes, the significance of this is the top team at News of the World and News International are fragmenting. And for the former lawyer to accuse James Murdoch of misleading Parliament is serious in itself.
But if his account is accurate -- and James Murdoch disputes it, I have to say, but if the lawyer's account is accurate, it shows that James Murdoch knew that there was other criminal wrongdoing in the company in 2008 and he failed to report it to the police. And he also settled a civil case with a crime victim for an astronomical sum of money that came with a confidentiality clause. So he could have been buying a crime victim's silence which in this country is an illegal act.
And that's why I've referred it to the police, so that they can get to the bottom of this.
FOREMAN: Give us in very simple terms the nuts and bolts of what allegedly happened. There was an e-mail from one reporter to another about illegal hacking going on that Mr. Murdoch apparently knew about or at least these other officers say he did know about and he sat in front of you and said he did not know about it. Is that it in a nutshell?
WATSON: Yes. One of his journalists transcribed a voicemail message that had been illegally hacked. He sent it to another journalist. The victim of the hacking took a civil case and got the documentation through court disclosure.
At that point, the lawyer and the editor of the paper go to Murdoch and say, we think we should settle this case. Here's an e- mail showing that others were aware of hacking in the company, what do you want to do? And he signed off the case for an alleged $700,000 pounds, which is 10 times more than the victim could have expected to get in the civil courts in London. So it really is a huge amount of money.
FOREMAN: So you think, what, he was just buying silence, is that what you think?
WATSON: Well, that's the allegation. And the former editor of News of the World and the lawyer would know the significance of their statement when they made it yesterday. It really is a big issue here in London and the Metropolitan Police...
FOREMAN: I want to play that statement though that you brought up specifically and see it clearly. I want to make sure that you have no mistake, Murdoch denied any knowledge of the e-mail. Let's look at what he said when he talked to you earlier this week.
(BEGIN VIDEO CLIP)
WATSON: When you signed off the Taylor payment, did you see where or were you made aware of the (INAUDIBLE) e-mail, the transcript of the hacked was in that message?
JAMES MURDOCH, DEPUTY CHIEF OPERATING OFFICER & CEO, NEWS CORP.: No. I was not aware of that at the time.
(END VIDEO CLIP)
FOREMAN: So he says very clearly there, no, I was not aware. And I want now to show also the statement you made reference to a moment ago that James Murdoch denies misleading Parliament by that in a statement posted yesterday on the News Corp. Web site. He said: "I stand behind my testimony to the select committee."
So, look, how are you going to prove otherwise if ultimately he says, look, I was mistaken at the moment, even if you can prove it, I misspoke, I wasn't sure which e-mail you were talking about? How can you possibly prove it?
WATSON: Well, that's why I want the police to investigate. What we now know is either the former editor of the paper and the company lawyer are telling the truth, or James Murdoch is. Both of them cannot be right.
And the point is if the police establish that James Murdoch did know about the e-mail, and that the lawyer is right, it's a very, very serious situation. That's why I think it's urgent and that's why I referred it to the head of the investigation earlier today.
FOREMAN: What can happen to James Murdoch if the police find out that he did lie?
WATSON: Well, if they found that he knowingly bought the silence of a crime victim -- and, again, to repeat, he denies this and sticks by his statement. But if it becomes the case, then the crime would be perverting the course of justice which is a very serious criminal offense in the U.K.
FOREMAN: The prime minister, David Cameron, said today that James Murdoch still has "questions to answer in Parliament." When do you expect him back? Or do you expect him back there? And what you would want to ask him about as this police investigation goes forward?
WATSON: Well, Parliament has gone into recess at the moment. So our committee -- we are having trouble pulling our committee together. But I would certainly think that -- now that you -- given that we pulled Rupert and James Murdoch in front of us because the company admitted misleading Parliament in an earlier inquiry, I would expect that we would put Tom Crone, the lawyer, Colin Myler, the former editor, and James Murdoch in front of us so that we can get to the facts and work out for ourselves which one of them is telling the truth.
FOREMAN: You know that stories like this tend to have sort of a public life that rises and then falls a little bit. This one has become white hot over the past couple weeks. There's also a sense now that as it goes on, perhaps some of the interest may die off in it. What are your concerns about the energy for this investigation and the enthusiasm for pursuing this, especially because, you're right, you are in recess now, you have to get the energy back up and get everybody back onboard?
WATSON: The amazing thing about this story is it nearly wasn't told. They nearly got away with hacking phones on an industrial scale and covering it up. I think now that's blown open. There are plenty of decent investigative journalists on the case. Parliament is acting.
We have got a public inquiry led by a judge. There is a police inquiry that had increased resources in Scotland, the Scottish police have launched a separate inquiry today. So I think we will get to the facts eventually. And public opinion is -- the public are very, very concerned about it.
Let's remember that this was covert surveillance. It was illegal. There are potentially hundreds if not thousands of victims. That's the sort of thing that went on in the former Soviet Union states. Not in the liberal democracy like in the United Kingdom. And Parliament is going to make sure that we create the conditions that a newspaper group, no matter how powerful, are ever allowed to get to this situation again.
FOREMAN: Tom Watson, thanks so much for joining us.
Up next, the end of "don't ask/don't tell." The secretary of defense and the joint chiefs say, repeal it. The president is ready to give the order but like everything else in the military, one command never changes: "hurry up and wait."
(COMMERCIAL BREAK)
FOREMAN: Well, it is finally the end of an era. The Pentagon today formally certified the repeal of "don't ask/don't tell," officially ending the 18-year ban keeping openly gay and lesbian troops from serving in the military.
The repeal fully takes effect in 60 days. Still some more waiting. It means of end of a very long journey however for my next guest, former Army Lieutenant Dan Choi, served in active duty for five years as an infantry officer on the ground in Iraq. He played a key role as an Arab speaker. But because he came out as gay, Dan was discharged from the Army and he joins me here now.
Dan, thanks for coming in.
DAN CHOI, FORMER ARMY LIEUTENANT: Great to be with you.
FOREMAN: You really have spent years fighting for this. You gave up a distinguished career. How do you feel today?
CHOI: It's a vindication in one aspect. But we know that the journey is not done. We have a lot more that we have to continue to fight for. When I go back into the military, I'm going to want a nondiscrimination policy. And for this president to not push for a nondiscrimination policy or strip it out of this compromise bill that was passed, I think is incredulous. We need to keep fighting. This is not the end. This is just basic training.
FOREMAN: You have been very disappointed in political leaders across the spectrum, including this president, who you thought was going to lead the charge and who I'm sure would like to have credit for leading the charge. But you don't feel he did?
CHOI: As all politicians do, they love to take credit for everything. But I don't credit any politician today. I credit all of the soldiers who have stood up and broke the law in order to get this done.
And that's amazing that we're even saying this. That soldiers should have to come up on TV and they should have to go get arrested, they should have to protest, become activists when they're trained not to be activists in the military.
FOREMAN: This is a difficult thing for you to do as well, the idea of saying, you know, you were trained to follow orders, to aggressively say, I'm going to disobey orders at the highest level because I think it's right.
CHOI: You're trained in military obedience, not civil disobedience. It was very difficult for me to make that transition, to even call myself an activist. And the fact that we had to was the greatest shame of this entire journey that our politicians failed us. And for as long as it lasted, said, be patient, wait, don't criticize.
And it is not our job as soldiers to rise up against the system but sometimes we had to do that in order to fight for the meaning of this country.
FOREMAN: I don't want to dwell on the political side of this too much. But you've even voiced the idea you would like to find a Republican to support in the next election. Why would you want to do that? And what's important about that to people who are concerned about gay or lesbian rights?
CHOI: Why should I endorse President Obama? I think the question is fair. Listen, I'm not a vindictive man. I'm not vengeful. If I was vindictive, then I would say, President Obama, if you want my endorsement, then I'll just have a study about that. We'll have a comprehensive review working group.
And then we'll get you fired and then we'll start to talk to other people and we'll have a platform for everybody else to hate on you.
FOREMAN: And I get your point here that over and over again, that's what you feel like you've heard is delay, delay, delay. Even this, I mean, I must say, isn't it amazing that you finally reached this point and it's still 60 days before this will be in effect?
CHOI: I think we would be very smart to remember what Martin Luther King said about waiting, for black people in America, the word wait was a familiar term.
(CROSSTALK)
FOREMAN: He wrote that famous book that said "Why We Can't Wait," that was the title of it.
CHOI: And we cannot wait. As soldiers, as anybody who has learned in basic training, when you have a fight that's worth fighting, you pour your soul into it. And as far as President Obama goes, I think he should listen to the leadership that some of our soldiers on the ground and in the streets have proven in this journey. Leadership is not based on political positioning or rank, status, or paycheck. It is not about personal gain. But it's about being part of something that's greater than you. And when these soldiers go back into the military, they should be honored and dignified to the point where they get fair treatment, that their partners and their spouses can get legalized recognition.
That that American flag that comes to the spouse, that doesn't go to a fake wife or a fake husband but it goes to the actual lover, the person that dignified and supported that soldier throughout their life.
FOREMAN: Where are you in this process of re-enlisting? It is going to happen?
CHOI: I remember the last time back in fall when I -- because of the appeal, the court case, I wasn't allowed to fully re-enlist. And it was a heartbreaking day for me. I hope to go back in whatever capacity.
FOREMAN: But you still want to be a soldier serving this country?
CHOI: I think there's no greater thing for me to be able to do, and no greater vindication. I believe that serving our country is fighting for two things: for freedom and justice. As an activist I've learned that.
And whether the military likes it or not, the military training helped me to be a better activist, then being an activist has now taught me what the true idea and meaning of serving my country really is.
FOREMAN: Dan Choi, congratulations on a long, long fight to reach this day.
CHOI: Thank you.
FOREMAN: We'll talk with you more as time goes on.
So up next, as we continue, we've heard the president is the principal and he's bringing all the bad boys and girls into his office tomorrow. But what will that lead to? A deal? Well, talk about that when we come back.
(COMMERCIAL BREAK)
FOREMAN: Our big story tonight is, of course, the surprising and seemingly complete collapse of talks over the debt ceiling this afternoon. And we want to listen to one particular moment in the president's comments.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is hard to understand why Speaker Boehner would walk away from this kind of deal. And, frankly, if you look at the commentary out there, there are a lot of Republicans that are puzzled as to why it couldn't get done.
In fact, there are a lot of Republican voters out there who are puzzled as to why it couldn't get done.
(END VIDEO CLIP)
FOREMAN: One possible explanation: the tea party. Even before the breakdown there was a rising drum beat of concern among some more traditional Washington types that tea party freshman had brought such a take no prisoners, accept no increased taxes attitude to Congress that it was fundamentally derailing any attempt at a workable compromise.
That may be great for tea partiers, but what about everyone else? Joining me now from Washington is CNN contributor John Avlon and right here in our studio is our good friend Steve Kornacki, news editor for Salon.com.
Let me start with you, John, is it truly the case now that people are turning on the tea party because I sure seem to be hearing a lot of rumbles of that in political circles this past week?
JOHN AVLON, CNN CONTRIBUTOR: Well, here's what the polls certainly show. Independent voters are starting to sway against the Republican Party, especially whether it comes to the question, who will get the blame if default does occur? And that's significant.
I mean, of course, independent voters, the largest- and fastest- growing segment of the electorate, voted decisively for the Republican Party 2010 midterm elections, something that I interpreted as really a desire for divided government. But -- the checks and balances that come with it.
They voted for divided government, not dysfunctional government. And that's what they're seeing with very high stakes results in the case of a debt default. They do not want that. And they see the far right of the Republican Party holding in effect the country and the Congress hostage.
FOREMAN: Well, John, speak to me more specifically on that. You say the far right, when you say that, do you mean on this fiscal issue the tea party?
AVLON: Well, yes, but, again, I think with the tea party, it's important to put this in perspective, because I do believe that the tea party was initially founded by principled fiscal conservatives who were concerned about the deficit and the debt.
And then it became infused by a group of folks who seem to be motivated by more what I call "Obama derangement syndrome," and a real dislike of bipartisanship.
FOREMAN: Do you agree with that? Hold on, let me bring Steve in here. Can you say that there are two types of tea party people right now? One is a "I want a government like this" tea party and another one is a "I'm against government, period," tea party? STEVE KORNACKI, NEWS EDITOR, SALON.COM: Yes -- well, I think the "I am against government, you know, period," I think there was a lot of that actually when you looked at the beginning two years ago, there was a very, you know, strong libertarian strain in the tea party movement, I think, that wasn't about either party.
It was about this philosophy of, boy, the government has just gotten way too big. This isn't about anything that has happened the last two years. It's about stuff that has been happening for decades and for generations.
But I think right now, and I think the Republican Party was very skillful at doing this, they recognized that this message had so much resonance in the age of Obama with the people who are part of their party, they brought it into their party.
In a lot of ways, it was brought into their party against their wishes. You saw that in the primaries last year where Republican candidates were defeated by the tea party.
FOREMAN: And, John, there was a real sense at one point that the tea party was independent voters. It was the voice of reason in the middle. Do you think that still exists?
AVLON: No, and I always rejected the idea that the tea party is synonymous with dependent voters. I think that's something that folks tried to propagate in part because of Scott Brown's victory in Massachusetts. It was a way of inflating their numbers up to nearly 40 percent, which is the percentage of Americans that are self- identified independents right now.
I believe the tea party movement is fundamentally a conservative populist movement with a strong libertarian strain or at least running under that banner. But that's really what has emerged in this Congress.
Look, there is a fundamental fissure I think that has really come to the forefront right now. Both parties, you can argue, have a degree of civil war about them between the center and their respective bases. But really, the question for me is, when did fiscal responsibility and fiscal conservatism get delinked?
Because it is fiscally responsible, and I think folks, overwhelming majority want to bring down deficits and debt. They understand that that -- the world's sole superpower cannot be the largest debtor nation indefinitely.
But what has really happened is some folks are confusing fiscal responsibility with this sort of theological, ideological approach to spending and really taxes in particular.
And in that, I think there's a fundamental delinkage with the traditional Republican approach to fiscal responsibility, and a more absolutist approach to litmus tests and pledges that we're seeing from fiscal -- alleged fiscal conservatives today. FOREMAN: Steve, you get the final word here. What do you think is going to happen now, particularly with the tea party element in these final days of some kind of debate over a debt ceiling? Is there going to be a change in that group? Or will they hold the line? And is that good or bad?
KORNACKI: Well, I'll tell you, what's interesting to me right now is there is a dynamic that is present in the last 24 hours -- that has become present that I didn't think was going to really be an issue here. And it's this.
Is Obama going to have to go so far to the Republican side and so far to the right in order to come up with a deal that John Boehner can sell to the Republicans in the House who have the majority, after all? Is he going to go so far to their side that he actually loses the Democratic votes that would be necessary to put this thing over the edge?
Because I don't think there is any circumstance under which Obama makes a deal with Boehner and every Republican lines up for it. I think you're definitely going to have a significant number of Republicans voting no, which means there's going to have to be a significant number of Democrats.
But if it means some of the stuff we've been hearing the last 24 hours about the prospective deal that Obama may or may not be near with Boehner, if that's accurate, I have a tough time seeing Democrats lining up behind that.
FOREMAN: There is just absolutely no question in all of this, though, the tea party has had a profound influence on this at this point. I have to move on from there. Steve Kornacki, thanks for being here us with. John Avlon, you, too.
AVLON: Thank you.
FOREMAN: We talked to Steve and John just a little bit before the talks all fell apart this evening. Next, they're playing hardball in Washington. And they're not pulling any punches in the U.K. either. In a moment, we'll bring you our very own "Play of the Week." And this woman definitely has game.
(COMMERCIAL BREAK)
FOREMAN: Finally tonight, amid all the difficult news, we were hoping to bring you good news about the NFL lockout ending. But the standoff continues. So to fill the void, we're going to bring you the "Hardest Hit of the Week" anyway. It doesn't come from a linebacker or a nose guard, but from a woman with a vengeance.
Stan Grant has the play-by-play.
(BEGIN VIDEOTAPE)
STAN GRANT, CNN CORRESPONDENT (voice-over): It's the slap that has been heard around the world. Wendi Deng putting herself between her husband, Rupert Murdoch, and a protester armed with a shaving cream pie. The image has gone viral. Suddenly, it's no longer Wendi the so-called gold-digger, but as some are now calling her "crouching Wendi, hidden tiger."
Taiwan-based NextMedia has her as a cartoon hero, the ultimate Asian tiger wife.
UNIDENTIFIED FEMALE: Pounces to the defense of her husband.
UNIDENTIFIED MALE: Aaah!
GRANT: Rupert Murdoch is certainly singing his wife's praises in an interview on China Central Television just last month. "A tough woman," he called her. The 80-year-old gushing about meeting Wendi when she worked for one of his companies, Star Television, falling in love with the woman nearly half his age and his efforts to convince her to marry him.
RUPERT MURDOCH, CHMN. & CEO, NEWS CORP.: I was in love with her and I asked her, and she said no. It took me a long time to persuade her.
GRANT: They married in 1999, after Murdoch divorced his wife of 31 years. They now have two daughters. Wendi's own romantic past has raised some eyebrows, including a former marriage. And there has been reports of Wendy's sometimes strained relationship with Murdoch's other children.
But as the pie man found, nothing comes between the "slapdown sister" and her mister.
Stan Grant, CNN, Beijing.
(END VIDEOTAPE)
FOREMAN: And that is it for IN THE ARENA. Thanks for being here. We'll be back next week. Piers Morgan is ahead.
