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The Situation Room
Debt Deal Close?; Murdochs Appear Before British Parliament
Aired July 19, 2011 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: And to our viewers, you're in the SITUATION ROOM. Happening now.
Humbled, grilled, and physically attacked, Rupert Murdoch faced these members of parliament of any answers about the News Corporation hacking scandal.
Also, President Obama praises a new bipartisan plan to help the U.S. overt a huge debt disaster even as the House of Representatives votes on another plan this hour.
Plus, the health concern that has people questioning whether Michele Bachmann would be able to carry out presidential duties.
We want to welcome our viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.
A remarkable new chapter in the scandal engulfing Rupert Murdoch's media empire, along with British police and government. Murdoch himself was grilled by members of Parliament today, along with his son and a former top deputy in a tense spectacle that included a physical attack on the media mogul.
Our senior international correspondent, Dan Rivers is in London with details
(BEGIN VIDEO CLIP)
RUPERT MURDOCH, CHAIRMAN AND CEO, NEWS CORPORATION: I would just like to say one sentence: This is the most humble day of my life.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): This was how Rupert Murdoch started. But despite his apparent contrition, he surely had no idea what was about to literally hit him.
In what should have been a secure hearing room, a personal attack on one of the world's most powerful media tycoons. His wife, Wendi, parrying a protester with a shaving cream pie who was off camera. As the police ran in, it was clear that Mr. Murdoch was unhurt and proceeding were suspended.
Before that, Rupert Murdoch sought to distance himself from the "News of the World" previously thought to be one of his favorite titles. R. MURDOCH: This is not as an excuse. Maybe it's an explanation of my laxity. The "News of the World" is less than 1 percent of our company. I employ 53,000 people around the world who are proud and great and ethical and distinguished people.
RIVERS: One of them was sitting right beside him, his son James, whose apparent lack of knowledge of the detail of the phone hacking scandal at times seemed almost comical. Here questioned about key documents that weren't initially handed over from News International's lawyers to the police.
UNIDENTIFIED MALE: (INAUDIBLE) evidence lying with (INAUDIBLE)
JAMES MURDOCH, CHAIRMAN, NEWS INTERNATIONAL: I cannot speak to other individuals' knowledge in the past. I simply don't...
(CROSSTALK)
J. MURDOCH: I simply, Mr. Farrelly (ph), can't -- I just don't -- I can't speak for them.
UNIDENTIFIED MALE: (INAUDIBLE) Stewart Cutner (ph)?
J. MURDOCH: The same goes, Mr. Farrelly. I simply can't speak for them.
RIVERS: Critics would call this stonewalling. But James Murdoch was clear on one point.
J. MURDOCH: First of all, I would like to say as well just how sorry I am and how sorry we are to particularly the victims of illegal voice-mail interceptions and to their families.
RIVERS: At times, Rupert Murdoch appeared overwhelmed or perhaps unsure how to answer, awkward silences following specific questions.
UNIDENTIFIED MALE: Mr. Murdoch, at what point did you find out that criminality was endemic at "News of the World"?
RIVERS: The overwhelming impression the Murdochs gave was of two men who were at best out of touch with what was happening in their company, at worst willfully ignorant, a phrase that was lost on James Murdoch.
ADRIAN SANDERS, BRITISH PARLIAMENTARIAN: Are you familiar with the term willful blindness?
J. MURDOCH: Mr. Sanders, would you care to elaborate?
SANDERS: It is a term that came up in the Enron scandal. Willful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible.
J. MURDOCH: Mr. Sanders, do you have a question?
Respectfully, I just -- I don't know what you would like me to say.
(CROSSTALK)
ADRIAN SANDERS: The question was whether you aware...
(CROSSTALK)
J. MURDOCH: I'm not aware of that. I'm not aware of that particular phrase.
RIVERS: It was then the turn of Rebekah Brooks. She had previously told the committee this.
REBEKAH BROOKS, FORMER EDITOR, "NEWS OF THE WORLD": We have paid the police for information in the past.
RIVERS: The same question again, but a different answer.
BROOKS: I can say that I have never paid a policeman myself. I have never sanctioned or knowingly sanctioned a payment to a police officer.
I was referring if you saw at the time of the home of first select committee recently and That you would have various (INAUDIBLE) from Fleet Street discussing that in the past payments have been made. I was referring that wide-held belief, not widespread practice. And in fact, in my experience of dealing with the police, the information they give to newspapers comes -- it comes free of charge.
RIVERS: But the scandal has very much with an incredible cost to News International. A year ago, the name Murdoch put fear into the hearts of many British politicians. Today, it was clear the politicians have no fear.
Dan Rivers, CNN, Westminster.
(END VIDEOTAPE)
BLITZER: Rupert Murdoch sits at the head of a vast media empire.
CNN's Tom Foreman is working that part of the story for us.
Tom, what do we know about the News Corporation's hierarchy?
TOM FOREMAN, CNN CORRESPONDENT: Well, we know, Wolf, that a lot of them are shaking right now.
Let's look at the kingdom of king Rupert here. Rupert Murdoch of course is the chairman and the CEO of News Corp. And look at the people underneath him who have been in the news today. James Murdoch, that is his son. He's the deputy chief operating officer and the CEO of News Corp. International. Next to him is Rebekah Brooks, who you saw today, the former CEO of News International, over the world news. She was in this questioning today.
Les Hinton, remember hearing about him? He was a former CEO, Dow Jones former CEO, News International head. He was the one who was running the newspaper before her. And then we come to the "News of the World" down here with the folks who were actually being questioned about this improper activity.
So you can see, Wolf, here's the connection that these people are trying to establish in the questioning here. From him to him to him to her to him to here, this question. This is how tight it is from where the bad things were going on to the people who start saying I didn't know anything about that. I wasn't involved with that.
And you know from many investigations of many organizations that are caught doing things that are wrong, investigators start looking at these connections often when there is not a business relationship and still saying how do we connect these people, how do we prove these people knew something even though they say they did not?
Beyond that, Wolf, beyond the structure of just this group here, there are other things that have to be considered. For example, if we go to another part of the castle over here, there is the News Corp. board. This is 17 individual who sit on the board of directors here, including a former leader from Spain, and notably Joel Klein, a fellow who was a deputy counsel for President Bill Clinton here, also held some positions under Mayor Bloomberg up in New York, has had some important roles to play in this country.
And this is what a lot of people here are going to look at closely, the News Corp. board and the News Corp. U.S. holdings here, FOX News, "New York Post," "Wall Street Journal" and some others, to see first of all, if this chain over here collapses under this questioning. If these people can be implicated even though they say they didn't know about it. And beyond that, do those implications spill over into other parts of the empire through the board or through the U.S. holdings? That we don't know yet, Wolf. But we will certainly find out.
BLITZER: Yes, Tom Foreman, thanks very much.
I was intrigued today because sitting right behind both Murdochs was Joel Klein. He was the White House deputy counsel. There's a picture of him sitting behind the Murdochs at today's hearing. but I have known Joel Klein for a long time, ever since he worked for Bill Clinton during the first term of the Clinton administration back in the '90s. He left the White House to go to work at the Justice Department, ran one of the divisions at the Justice Department before Mayor Bloomberg eventually asked him to become the education chancellor in New York City, something he has done for the past eight years, until recently, joining News Corporation and now helping in damage control for the Murdochs.
So let's dig a little bit deeper right now with CNN senior legal analyst Jeffrey Toobin and Howard Kurtz, the host of CNN's "RELIABLE SOURCES."
I saw Joel Klein's fingerprints on a lot of that damage control, if you will. I blog about it on our blog page today at CNN.com/situationroom. Jeffrey Toobin, you know Joel Klein. When that robust apology not only in the newspapers, but today, the damage control, did you get a sense that Joel Klein was involved in helping Rupert Murdoch deal with this crisis?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: He got good legal advice, which was apologize and don't speculate and answer only what you can precisely prove. Don't volunteer any information.
He certainly got the contrition part right. He was humble, he was sorry, but when it came to taking responsibility, the old Murdoch confidence/arrogance certainly came through. There was a great moment towards the end where one of the members of Parliament said, are you responsible? And you just were waiting for him to say, yes, the buck stops here. And he said, no, my subordinates let me down.
(CROSSTALK)
BLITZER: Well, you know what? Let me play that clip for our viewers and we will get Howie to respond. Listen to this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mr. Murdoch, do you accept that ultimately you are responsible for this whole fiasco?
RUPERT MURDOCH, CHAIRMAN AND CEO, NEWS CORPORATION: No.
UNIDENTIFIED MALE: You are not responsible? Who is responsible?
R. MURDOCH: The people that I trusted to run it, and then maybe the people they trusted.
(END VIDEO CLIP)
BLITZER: Howie, what did you think of that response?
HOWARD KURTZ, CNN CONTRIBUTOR: It was not very persuasive, Wolf, because earlier Rupert Murdoch had specifically defended two of his top lieutenants, Rebekah Brooks, who of course has since been arrested and testified after him, and Les Hinton, the guy who used to be the publisher of "The Wall Street Journal."
So here you had Murdoch. It was a very halting performance. It may have been smart legally, as Jeffrey Toobin says. But in the court of public opinion, as I wrote today on The Daily Beast, Murdoch looked out of it. He looked like a CEO who was not in touch with what was going on in his company, even as the evidence began to mount of wrongdoing at the "News of the World" and overseen by people who had he put in place.
BLITZER: Did you get a sense from what you heard today, Jeffrey, that there were others who were legally in trouble as a result right now of this broadening scandal?
TOOBIN: Oh, there a lot of people already under arrest. And... (CROSSTALK)
BLITZER: Beyond those already under arrest.
TOOBIN: Well, absolutely. Scotland Yard has been embarrassed by this whole situation. And Scotland Yard is now taking a very aggressive tack, as we know, arresting Rebekah Brooke.
And I think the two Murdochs are very concerned about getting involved. So they not only sounded like they didn't run their newspapers, they sounded like they didn't even head their newspapers, because anyone who read "News of the World" or "The Sun" could tell that there were hacked voice-mails in there. Yet they obviously -- they had no idea how these hacked voice-mails got into their newspaper.
The denials were hard to credit, but members of the Parliament didn't have the documents, didn't have the proof to refute what they were saying.
BLITZER: Give us a little perspective, Howie, because you have followed the story for a long time. When he testified today, Rupert Murdoch, this "News of the World," this newspaper that he shut down, it was barely 1 percent of his business, with his whole media empire. It may been business wise 1 percent of his income or whatever it was, but he was passionate about newspapers, wasn't he?
KURTZ: Oh, sure. This was the best-selling newspaper in Britain and a lot of people, business analysts, even some people within News Corp., feel like, why don't we just get rid of all the newspapers? They're not big money makers. We can make our money on TV and on the Internet and other media ventures.
But Rupert Murdoch is an old newspaper man. That's how we came up. His father was a newspaper man. He has a sentimental attachment to these papers. And when it comes to this side of the Atlantic, Wolf, where he keeps "The New York Post," which loses a lot of money, but has a lot of political influence in New York and nationally, it's because it's part of his power base.
That paper and other Murdoch media outlets often provide favorable coverage to people who he is politically sympathetic to, not so favorable coverage to people who are seen as being on the other side or they just don't like. And so it's kind of a misnomer to say, well, it's just 1 percent of the bottom line. It looms much larger on the public stage and I think in Murdochs' heart, which is why I believe he actually is very conflicted about what happened.
But he certainly did not take personal responsibility at this hearing today.
BLITZER: What did you think of James Murdoch's testimony and his ability to deal with this crisis, Jeffrey? And I ask you question as someone -- I know you just came back from several days in England.
TOOBIN: Well, you have to just -- it's hard to imagine here in America how powerful the Murdoch family is in Great Britain.
The control of I believe it's almost 40 percent of the newspapers in the whole country, plus the whole Sky News business, which is essentially a 24-hour news station in Great Britain, the power over the Tories, over the Labor Party everywhere -- James Murdoch sounded like a guy who had memorized a lot of business buzzwords.
He kept talking about being proactive. He talked about the code of conduct of the company. He seemed to be running out the clock with a lot of long answers. But I don't think he implicated himself. And it wasn't such a disaster that the Murdoch family is probably going to be pushed out. They still control about 40 percent of the voting stock. So I don't see that very docile board of directors rebelling against the people who still own that candy store. And that's the Murdoch family.
BLITZER: Jeffrey Toobin, thanks very much.
Howie Kurtz, you're going to have some good material Sunday morning on "RELIABLE SOURCES," 11:00 a.m. Eastern every Sunday.
Guys, thanks very much for coming in.
Critical new developments in the U.S. debt crisis, including a vote tonight on a sweeping plan that has virtually no future outside of the House of Representatives.
Plus, details of a growing concern that al Qaeda's new leadership may be focusing in on attacks on Americans around the world.
(COMMERCIAL BREAK)
BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Less than one-quarter, Wolf, of American adults are smokers, meaning they have had at least one cigarette in the last week. That number has been declining for years now. And while they may be a shrinking minority, when smokers do light up, people who don't smoke and are around them tend to take notice.
Over the last 10 years or so, as study upon study has revealed the long-term danger of smoking and exposure to secondhand smoke, smokers are finding they are welcome in fewer and fewer places.
Now comes a new Gallup Poll that shows a majority of Americans, 59 percent, support a ban on smoking in all public places. That's the highest percentage in the 10 years that Gallup has been asking that question in this poll.
Twenty-seven states have already passed tough smoke-free laws. There's a new law here in New York City that prohibits smoking just about any public place, including beaches and outdoor plazas. And increasingly tough smoking laws are in the pipelines in cities and states all around the country. And while this growing majority of Americans don't want to be around people who are smoking, they aren't pushing for an all-out ban on the behavior. Only 19 percent say smoking ought to be made illegal. That percentage has been relatively unchanged over the last five years.
But suffice it to say the battle between smokers and nonsmokers will likely continue. And for now, at least, the nonsmokers seem to have the upper hand.
Here's the question then. Should smoking be banned in public?
Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.
BLITZER: All right, Jack, thank you.
Let's go get to al Qaeda right now and new indications the terror network could be shifting its overall strategy for targeting Americans in the wake of bin Laden's death.
Our Pentagon correspondent, Chris Lawrence, is monitoring some new information coming in.
What are we learning here, Chris?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, U.S. officials say central al Qaeda leadership, big al Qaeda, if you will, is weaker than it's ever been. And it also has some limited resources. So the new leadership is more likely to align itself with the direction of some of its affiliates and that means going after smaller targets overseas.
(BEGIN VIDEOTAPE)
LAWRENCE (voice-over): To his last day, Osama bin Laden was obsessed with staging a spectacular attack in America. a U.S. official says Ayman al-Zawahiri has a slightly different strategy. He is more willing to have his fighters attack regional targets, going after Americans and Western institutions outside the U.S.
SETH JONES, RAND: One is companies overseas.
LAWRENCE: RAND analyst Seth Jones says pay special attention to U.S. defense contractors and any private companies where Americans work abroad.
JONES: What you don't always have with those kind of employers though are the same sort of trained countersurveillance techniques, changing -- if you are walking or driving to work, changing your practices.
LAWRENCE: A U.S. official says you need specialized operatives to get through the heightened security and it's easier to send a suicide bomber to Kabul than Kansas City. But that combined with a weakened central al Qaeda command means a range of affiliates conducting attacks around the world. JONES: It certainly makes it more complicated for U.S. intelligence, law enforcement, and military agencies.
LAWRENCE: On the other hand, bin Laden had patience. He would nurture a plot for years, waiting for the right time. Compare that to recent attempts run by other al Qaeda officials, the underwear bomber in 2009, whose explosives started smoldering on board a Christmas Day flight tot U.S., and the Times Square bomber from last year, whose device failed to detonate.
JONES: They malfunctioned because they had not been trained long enough to put together a proper improvised explosive device.
LAWRENCE: So bin Laden's death was just the latest set back to al Qaeda.
JONES: That may pressure the group, including Zawahiri himself, to pull off an attack, possibly without going through all of the hoops that the successful attacks in Madrid or London or other locations...
(END VIDEOTAPE)
LAWRENCE: And the U.S. official we spoke with says it remains to be seen whether other jihadist groups like Al-Shabaab or even al Qaeda affiliates like the one in Yemen will actually follow Zawahiri's direction and strategy. He has had some very public fights with other jihadists over the years and is not considered the easiest man to get along with -- Wolf.
BLITZER: Chris Lawrence watching these developments at the Pentagon, thank you.
Could there be a potential breakthrough in the mounting political stalemate here in Washington over the U.S. debt crisis? Why President Obama now says a significant step has been made. We will tell you what's going on right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: A House vote is expected soon on the so-called cut, cap and balance plan favored by conservatives as an answer to the U.S. debt crisis.
Let's go to straight to Capitol Hill. Our congressional correspondent Kate Bolduan has the very latest.
What's happening, Kate, right now?
KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Wolf.
They have been debating this for hours and at some times it's been a heated debate. This is over this cut, cap, balance bill that you just mentioned. This is a measure supported by House conservatives specifically that would dramatically cut federal spending, would cap spending, and would also limit the size of government. But here's the key point. It would also allow for a debt limit increase only if Congress would pass a balanced budget to the Constitution, a very tall order. House Republicans, including House Majority Leader Eric Cantor, though, say this is the right path towards deficit reduction.
Listen here to Eric Cantor.
(BEGIN VIDEO CLIP)
REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: Today the House has the opportunity to show the people that sent us here that we are serious about turning the page on the failed fiscal policies that this town has been about over the last several decades and begin to get the fiscal house in order.
(END VIDEO CLIP)
BOLDUAN: At the very same time, though, Democrats from the House floor to the White House, quite frankly, have really been slamming this proposal, this bill as more political theater than serious policy. Listen here to Congressman Steny Hoyer.
(BEGIN VIDEO CLIP)
REP. STENY HOYER (D-MD), HOUSE MINORITY WHIP: Now, I'm not going to vote for the balanced budget amendment, and I urge my colleagues to reject this bill, which has no chance of passage. And we need to stop fiddling and we need to do our work and make sure America can pay its debt, because if it can't, every one of our constituents will lose and our country will lose.
(END VIDEO CLIP)
BOLDUAN: And here's the reality. This bill is likely to pass the House. It's not expected to clear the Senate.
And even if it did, President Obama has already said he would veto it, which means, Wolf, this will likely be largely a symbolic vote for House Republicans, allowing them to show their constituents and to show their support for deep spending cuts and stricter spending controls than is likely to be part of any compromise deal to raise the debt ceiling at this point -- Wolf.
BLITZER: So what's next after this vote which I guess will largely be symbolic tonight?
BOLDUAN: Absolutely. Well, that's a very good question.
I will tell you that House Speaker John Boehner, he said today even before this vote, while he says he has big hopes for cut, cap, balance, he did say they do continue to consider other options, a plan B, but they are not tipping their hand on exactly what a plan B might be, if you will.
But leaders continued also to point to this McConnell-Reid fallback plan as just that, though, the fallback plan, the last ditch. And it doesn't seem that members that think they are that -- to that point at this point.
I will tell you an important thing, though, that we have learned today is that there is now a concerted effort amongst House conservatives led by a Tea Party freshman, Joe Walsh, that are adamantly opposed to any compromise. And they have sent a letter to Speaker Boehner and House Majority Leader Cantor, saying that they should not even bring the McConnell-Reid plan to the floor for a vote.
BOLDUAN: So, they have got pressure on both sides now -- Wolf.
BLITZER: Yes. And the Tea Party Express issued a statement saying any Republican, anyone in the House of Representatives who eventually votes for the McConnell-Reid compromise would be targeted for defeat in a primary or whatever. They were very adamant that they hate, hate that McConnell-Reid last-ditch failsafe proposal.
All right, Kate, thanks very much.
BOLDUAN: Sure.
BLITZER: President Obama took a swipe at the cut, cap, and balance plan today and came out generally in favor of a new plan put together by this bipartisan group of senators consisting of a mix of tax changes and spending reductions.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's very important for in these next couple of days to understand we don't have any more time to engage in symbolic gestures; we don't have any more time to posture. It's time to get down to the business of actually solving this problem. And I think we now are seeing the potential for a bipartisan consensus around what that would take.
(END VIDEO CLIP)
BLITZER: All right, let's dig deeper a little bit with our chief White House correspondent, Jessica Yellin, and our chief political analyst, Gloria Borger.
Jessica, explain to our viewers what this gang of six proposal really is. The president was very enthusiastic about it.
JESSICA YELLIN, CNN CORRESPONDENT: He was. He hugged it tight today, Wolf. It's a deficit reduction plan endorsed by three Democratic senators and three Republican senators. Maybe now a fourth Republican senator. They've been working on it for many months. And it's not just bipartisan. That's one reason the president likes it, but it also endorses what the White House calls the, quote, "balanced approach."
And it would, in essence, slash the deficit by $3.7 trillion over 10 years. It would cut spending and cap spending. And two of the big challenges here for Republicans to get on board, especially in the House of Representatives, they would have to be OK with $1 trillion in revenue, new revenues. That's been one of the big issues when we're talking about these plans.
BLITZER: New revenues mean more taxes?
YELLIN: Basically. More taxes, right. And then, for the Democrats to get on board, one of the big hurdles to overcome will be reigning in spending on Social Security and Medicare. That's entitlement changes. And Democrats have a big issue with that, especially in the House of Representatives.
And let me be clear. This is a framework. This is not written legislation. It's a long way from here to anything getting done. And we're on a clock.
BLITZER: And a lot of Democrats won't like it either, because there are some cuts and entitlements: Medicare, Social Security. Why did the president come out today and endorse for practical purposes, put his arms around him?
GLORIA BORGER, CNN POLITICAL ANALYST: He did because he wants to isolate the House Republicans. He wants to say, "Look, Mitch McConnell has a back up plan out there. He's a Republican. This Gang of Six is bipartisan senators. They have a plan. John Boehner and I tried to sit down next to each other. We tried to come up with a plan. And guess who kind of really won't sign on to anything? House Republicans."
And there's a new poll out tonight, Wolf. ABC/"Washington post" poll, which shows that the president is actually making an awful lot of progress that shows that three quarters -- three quarters of Americans believe that the Republican leadership is being too resistant to compromise. That will be welcome news.
BLITZER: Here's my sense. Tell me if you agree or disagree. If you disagree, that's OK. My sense is that, if it were just the Senate, this Gang of Six plan, it would pass. The president would sign it.
The question is: does it have 218 votes in the House of Representatives? That's by no means a done deal, given the fact that the Tea Party Express and other Tea Party groups, they say no new taxes. And you know -- you know what the argument is.
YELLIN: Right. Because it has all that revenue I talked about. That will be hard to get the Republicans on board in the House. And it has all these changes to the entitlement programs that will be hard to get some of the Democrats...
BLITZER: The liberal Democrats don't like it either. So will it have 218 votes?
YELLIN: It does not -- it would be very hard to imagine that it could pass the House of Representatives right now. And the bottom line is, it does seem that this is being used to say look, anybody -- a symbolic gesture. Anybody who is serious about deficit reduction wants a balanced approach.
BLITZER: And I was going to say, Gloria, if it were just the president, the Senate, even John Boehner, they would probably get a deal. But there are a lot of Republicans. And that's why that Reid- McConnell failsafe legislation may be the only way to avert -- to avert that default.
BORGER: Parachute. Right. It's a way to try to parachute out of all of this. I was talking to a senior Republican today who described it as kind of a break-glass kit. You're in the emergency. You've got it sitting behind the glass, and you finally break the glass. And you -- and you go with it.
Now the question is whether these House Republicans...
YELLIN: They don't know if they have the votes for that either.
(CROSSTALK)
BLITZER: If they don't have the votes for the McConnell-Reid compromise, that last-ditch effort, God only knows.
(CROSSTALK)
YELLIN: OK, what?
BORGER: You're going to have to have over half of House Republicans voting for it if you expect any House Democrats to vote for it. They're not going to supply the votes for this unless they see that more than half of the people who run the House of Representatives actually vote to raise the debt ceiling. They're not going to -- they're not going to go out there unless -- unless they see that.
BLITZER: This goes down to August 2 we're going to be hurting.
BORGER: I think it will. I think...
YELLIN: That's a pretty safe bet.
BLITZER: You'll help me understand this. Thanks very much.
An air traffic controller allegedly drunk on the job. We're getting new details.
And Republican presidential candidate Michele Bachmann is said to suffer from repeated debilitating migraines. Could that interfere with her ability to be president of the United States?
And when the foam started flying, Rupert Murdoch's wife came to his rescue. CNN's Jeanne Moos shows us the really close shave.
(COMMERCIAL BREAK)
BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now, including two Pakistani Americans charged with deceiving the U.S. government. What's going on?
LISA SYLVESTER, CNN CORRESPONDENT: That's right, Wolf. The U.S. government says it has exposed an illegal campaign to influence lawmakers over the conflict in Kashmir.
Prosecutors charged that two alleged agents for Pakistan funneled millions of dollars as part of the plan. The complaint alleges the pair falsified and concealed information from the U.S. government. They face up to five years in prison if convicted.
Pakistan and India have disputed the status of Kashmir for decades.
Israel has stopped another ship trying to break its blockade of Gaza. The navy seized the ship as part of a larger flotilla leaving Febriz (ph) as it approached the coast. Israel says any supplies on board will be transferred legally to Gaza. Israel insists on patrolling access to Gaza because it says otherwise smugglers will try to ship weapons to Palestinian militants.
And the FAA says during a random test, a veteran Colorado air traffic controller had a blood alcohol level exceeding the allowed limit. He reportedly works at a center that handles air traffic for several states. A family member says he was given the choice of resigning or entering rehab and chose rehab. No charges have been filed.
Football star Michael Vick is bringing his newfound activism against dog fighting to Capitol Hill. The Philadelphia Eagles quarterback, who served 20 months in prison on a dog-fighting conviction is backing proposed legislation criminalizing spectators and those who let children watch the sport.
(BEGIN VIDEO CLIP)
MICHAEL VICK, PHILADELPHIA EAGLES QUARTERBACK: I deeply regret my previous involvement in dog fighting. I'm sorry for what I did to the animals.
During my time in prison, I told myself that I wanted to be a part of the solution and not the problem. I've been speaking to kids and urging them to be responsible and to be good to animals. And today I'm here to send a similar message: to help address the problem and break the cycle. I'm teaching these kids not to get mixed up in this crime.
(END VIDEO CLIP)
SYLVESTER: Vick was released from prison in 2009. So what a turnaround for him.
BLITZER: Good for him. He's doing the right thing right now. He's paid a price. It was a mistake. It was a horrible mistake, but at least he's doing the right thing. Thanks very much.
New claims Republican presidential candidate Michele Bachmann suffers from what's described as incapacitating migraines. Could that put her bid for the White House in any jeopardy?
Plus, it may have been the most dramatic moment in Rupert Murdoch's showdown with members of the British Parliament today. Just ahead: why shaving cream brought everything to a screeching halt.
(COMMERCIAL BREAK)
BLITZER: New reports about the health of Republican presidential candidate Michele Bachmann in the wake of new claims she frequently suffers from what's described as incapacitating headaches. We're just learning one reporter got roughed up in the process of asking her about it out there on the campaign trail today.
Lisa Sylvester is joining us now with details.
What is going on?
SYLVESTER: Well, Wolf, this is definitely a story that is picking up steam. Bachmann's campaign acknowledges that she does suffer from migraines and that she is on medication to keep them under control. But it's raising questions. Will it keep her from doing her job if she's elected president?
(BEGIN VIDEOTAPE)
SYLVESTER (voice-over): A press secretary for Michele Bachmann's campaign told CNN, "Like millions of Americans, Congresswoman Bachmann suffers with migraines, and they are under control when treated with medication."
REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: They want to blame it on you.
SYLVESTER: But at least three people close to Bachmann paint a different picture in an article by the online publication, "The Daily Caller." They describe the headaches as incapacitating and debilitating and cite at least three times when is Bachmann had to be hospitalized because of the severe migraines.
JONATHAN STRONG, REPORTER, "THE DAILY CALLER": They said that about once a week she has one of these headaches occur. You know, many times it can be a couple of hours. But many times it is also one or two days. And the way they describe it is that it incapacitates her, that she can't function. She can't work or focus on work-related matters.
SYLVESTER: According to "The Daily Caller," at least on three occasions, Bachmann had to cancel several scheduled events.
For those who suffer from migraines, they are more than a throbbing headache. Migraines start in an area called the mid-brain. It then progresses and involves the cerebral cortex. It can affect vision, speech, and concentration, depending on the severity, says neurologist Dr. Marc Schlosberg.
DR. MARC SCHLOSBERG, WASHINGTON HOSPITAL CENTER: They Imagine if you have a migraine and you have all of these sensitivities to light and sound. And you're nauseous. Generally someone with a migraine is lying in bed with the lights out and the TV off. And sometimes these last up to three days
SYLVESTER: Schlosberg hasn't treated Bachmann but says medication can help. Bachmann has been surging in the polls, making her more of a target for political opponents. She addressed the issue head on at a campaign event.
BACHMANN: I'm prescribed medication that I take on occasion whenever symptoms arise, and they keep my migraines under control. But I'd like to be abundantly clear. My ability to function effectively will not affect -- will not affect my ability to serve as commander in chief.
(END VIDEOTAPE)
SYLVESTER: And that was reporter Jonathan Strong that we heard earlier in the piece. He's the one who broke the story. He's with the online daily publication "The Daily Caller." They reported, you know, that Bachmann suffers from these headaches so severely that she's actually had to cancel events and has even missed some congressional votes.
Now, ABC investigative reporter Brian Ross, he tried to question her at that rally today in Aiken, South Carolina. He repeatedly asked her whether she had missed a House vote because of these headaches, and she refused to answer.
Ross continued to pursue her. He was following her. He followed her into a parking area behind the stage and, according to "TIME" reporter Michael Crowley, who watched all of this unfolding, Bachmann's aides grew alarmed. And when Ross made a beeline for her SUV, two of Bachmann's body guards pounced on Ross, grabbing him, pushing him. The "TIME" reporter, Crowley, said he had never seen a reporter treated roughly at a presidential campaign event.
CNN spoke to him a while ago.
(BEGIN VIDEO CLIP)
MICHAEL CROWLEY, REPORTER, "TIME" MAGAZINE (via phone): They were, I would say, sort of manhandling and pushing him. And, you know, at one point looked like they were kind of holding him back, like pulling him away from her as he was just trying to ask her this question. And she just ignored the question. You know, he repeated it over and over. She just completely ignored it and got in her car and drove away.
And Brian told me afterwards that -- I asked him immediately. I said, did he think that that was unusual and inappropriate? Had he had that kind of treatment before? And he told me that he had had that kind of treatment before, but it was -- but it was by mafia people.
(END VIDEO CLIP) SYLVESTER: Now, we reached out to Brian Ross and ABC News, who confirmed Crowley's account of what happened.
We also reached out to Bachmann's campaign staff. They said Ross, quote, "was repeatedly asked by our security people to stay off the stage, and he jumped up on there anyway." And they say that "is not at all the way that he portrayed it." Now Bachmann's camp, though, would not comment any further on this.
BLITZER: Yes. That "Daily Caller" is that Web site that Tucker Carlson, who used to work here at CNN runs.
SYLVESTER: Right. That he founded, yes.
BLITZER: All right. Thanks very much.
Should smoking in public be banned? Jack Cafferty next with "The Cafferty File."
(COMMERCIAL BREAK)
BLITZER: Let's get right back to Jack for "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: The question this hour, Wolf, is should smoking be banned in public?
Julianne in Connecticut says, "No, it shouldn't be banned. Being in public means you're willing to deal with the habits of others, even those habits which you find offensive."
David in Virginia says, "Absolutely. Why isn't smoking considered battery? The definition of battery is harmful or offensive touching. Secondhand smoke has been proven to be harmful, and it touches everything around it."
Walter says, "No. I'm a former smoker. I feel the places where smokers can smoke have been narrowed to the extreme. If they go outside in the open and aren't bothering others, they ought to be left alone. We still have a few freedoms left, although we have lost enough of them."
Rich in Texas: "The federal government gets a dollar a pack on cigarettes sold in America. Average state tax, $1.44, but that varies from 17 cents in Missouri to $4.35 in New York. That's a lot of tax revenue generated and a lot of jobs that would be lost if cigarettes and other tobacco products were banned."
Ed in California writes, "I don't smoke or really drink for that matter. I don't mind the addicts smoking in public, but not in restaurants. There's nothing wrong with being polite. So, no, smoking doesn't have to be banned. I just hope the smokers consider about their addiction."
Tim writes, "Stinky perfume should be banned. Body odor should be banned. Flatulence should be banned. Bus exhaust should be banned. Jet plane fumes should be banned, but not smoking. It's not a health issue outdoors, it's a whining issue."
And Dan writes, "Absolutely. We don't have enough government intervention in the lives of our citizens yet. Let's keep going until we all end up prisoners in our own homes with the doors and windows shut tight. I'm just saying."
If you want to read more on this, go to my blog: CNN.com/CaffertyFile. Did you ever smoke?
BLITZER: You know, I tried it in high school, a little bit in college. I really -- I got dizzy doing it and I figured, "You know what? Somebody is telling you this is a bad idea." So I really never got into it, but I tried it a little bit, like everybody.
CAFFERTY: Yes, but that's just good you never started.
BLITZER: No, I never really did, you know. I know you're a recovering smoker, right?
CAFFERTY: Yes, 25 years ago. I had a collapsed lung. It was, like, they were telling me something, too. Maybe you should quit this.
BLITZER: Yes. I think it's a bad idea to smoke.
How did that no-smoking ban in public places working out in New York?
CAFFERTY: I don't know. I mean, you see people outside the buildings, but I think it's for, like, you know, the subways, obviously; the buses; the parks; the beaches, places like that. All the public areas no longer allowed. But you still see, you know, folks out on the sidewalks outside their buildings.
BLITZER: But not in Central Park.
CAFFERTY: I don't go in Central Park.
BLITZER: It's a lovely park. All right, Jack, see you tomorrow. Thank you.
For our North American viewers, two key senators getting ready to square off on the mounting debt crisis here in the United States. That's coming up on "JOHN KING USA."
But before that, Jeanne Moos will take a look at closer look at Rupert Murdoch's close shave with a pie.
(COMMERCIAL BREAK)
BLITZER: It was perhaps the most dramatic moment of today's showdown in Parliament. CNN's Jeanne Moos takes a closer look at Rupert Murdoch's close shave with a pie.
(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT (voice-over): Wendi Murdoch was easy to pick out in pink. When you're 38 years younger than your husband, it's nice to rub his back and pour him water before he testifies. She even restrained him when he pounded the table too much.
But she didn't restrain herself when this happened. An activist pulled a foam-filled plastic pie plate out of a plastic bag. Some of that foam landed on CNN producer Jonathan Wald (ph) as the attacker...
UNIDENTIFIED MALE: Plunges it squarely into the face of Rupert Murdoch.
MOOS And that's when his wife Wendi whacked the guy. Even picked up the plate.
UNIDENTIFIED MALE: Hit him back with it. It was all extremely dramatic.
MOOS: Sort of reminds us of the woman who used her purse to try to knock the gun out of a hostage taker's hand...
UNIDENTIFIED MALE: No! No!
MOOS: ... at a school board meeting.
UNIDENTIFIED FEMALE: This is the weapon.
MOOS: Apart from shaving cream, all Rupert Murdoch got was a tongue lashing from his attacker.
UNIDENTIFIED MALE: "You're a greedy billionaire."
MOOS: The activist, who British media identified as Johnny Marbles, had just sent a tweet saying, "It is a far better thing that I do now than I have ever done before," has tag splat.
(on camera) It may have been more than a close shave for Rupert Murdoch, but at least he avoided major embarrassment by getting his face full off camera.
(voice-over) Unlike pie targets like Ann Coulter and Ralph Nader, who managed to throw his pie back at his attacker. Bill Gates got splattered and then his image got splattered for eternity all over the Internet. Anita Bryant got pied by a gay demonstrator.
ANITA BRYANT, GAY RIGHTS OPPONENT: Every...
UNIDENTIFIED MALE: Oh!
BRYANT: Well, at least it's a fruit pie.
UNIDENTIFIED MALE: Let's break. Let's break for him right now.
MOOS: First her husband prayed for the attacker. Then he went outside and splattered him back. Wendi Murdoch was praised by a member of Parliament.
UNIDENTIFIED MALE: Your wife has a very good left hook.
MOOS: Or was it her right? Regardless, a prankster temporarily changed her Wikipedia entry to say, "Wendi used her ninja background to ward off an attacker. The move is now being referred to as the 'Crouching Wendi, Hidden Dragon'."
After the attack, Wendi tenderly cleaned off her husband.
UNIDENTIFIED MALE: Carefully wiping the foam off his jacket and his face. She was smiling and seemed quite happy that she had managed to score a blow.
MOOS: We watched her crossing her arms and crossing her legs, but it was the right cross we won't forget.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
BLITZER: She's tough. Good for her. Thank you very much, Jeanne, for that report.
That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. For our international viewers, "WORLD REPORT" is next. Here in North America, "JOHN KING USA" starts right now.
