dynamic that happens here in washington. he has the bully pulpit. why not use what you got? >> i guess the sausage making happens as well behind the scenes. do we think he is going to go back to the negotiating table? what happens after this public appeal? what does he do next? >> reporter: there is a meeting at 2:00 this afternoon. as i said, the leadership has been asked to come back with special fix. the big question today is, will they be looking at that medium-sized deal and will they have enough details to get something done? there is not a lot of certainty that they can cut that big deal. the president has said he cannot cut a short-term deal. they have to have a deal. there is a lot of uncertainty right now. it is all very unstable, very much up in the air. everybody is playing for their negotiating position right now. the president is using the

leverage he has to keep up as much pressure as he can. >> jessica, i am sure you will be answering that question from that. >> john king is here. it is interesting. the president is going to be in the briefing room. he is out of the east room where there would be a dramatic announcement. this is just sort of a surprise in the middle of these tough negotiations. he has decided to go public to try to put pressure on us. >> i am not surprised. i find it interesting that before they go pack back to mee 2:00 in the afternoon, he is coming out of here to talk about the state of play. the president can go directly to the american people and say, if we put this on the table, what will be interesting to watch, wolf, is exactly how he describes the state of

negotiations? we know when things fall apart, the president will tell you, because he is going to back to his political corner. if things are viable, we want to hear the tone from the president. we have to watch and see what that tone is going to be and whether he can reach a deal. >> john boehner, the number two republican in the house are the majority leader, eric cantor, because they don't always seem to be on the same page. >> no. they seem to not always to be on the same page, because they are not always on the same page. mr. cantor is viewed as the more conservative, viewed as the more willing to have a confrontation with the president. different responsibility. john boehner was the speaker of the house. with that title, comes responsibility. the career legislator, the guy

who has cut bills. mitch mcconnell, miss dna is to negotiate a bill and cut a deal. there is a bit of a rivalry. it isn't just a good negotiating ploy. there is a bit of rivalry. mr. boehner is the speaker, mr. cantor is the number two majority leader. he is always thinking about the next generation move. he tries to work. sometimes it helps. it helps the speaker even though there is a rivalry. the rank and file who think they need to blow off some steam can go to mr. cantor and in the end make peace. this is a fascinating moment in the republican party. there is a presidential campaign going on. in congress, the first big

issue, huge issue with the new republicans. when they cut the tax deal and did all the business in the lake dumb session, this is a test. it is a defining moment in that relationship cantor-boehner is part of it. >> the presidential campaign is a complicating factor. you have the presidential candidates out there. let me quote tim pawlenty who says i hope and pray and believe they should not raise the debt ceiling. so you have a top-tier presidential candidate out there in the republican party saying, no way. don't do it. you have michele bachmann talking about how they shouldn't do it. you need to attach it to a balanced budget amendment. these play into the speakers thinking and eric cantor's thinking. i guarantee you, dem gratocrats the house will not vote for

this. back to suzanne, the other fascinating relationship that is emerging is between the president of the united states and the former speaker of the house, nancy pelosi. they are not necessarily on the same page, haven't been on the same page on other issues like libya, afghanistan. steny hoyer, the number two democrat in the house, he is more in line with the president. i think it is fair to say than nancy pelosi. >> that split within the democratic party is a challenge president obama has in rallying his own troops. i want to bring some breaking news on another story. the british media, including the bbc, reporting that former british prime minister, gordon brown, is going to be making a statement very shortly. he is claiming that his phone and bank account were hacked by the sunday times. that's another murdock newspaper. this is going to be a statement that he is making very shortly. it comes after, as you know, the news of the world, another murdock publication was

discontinued for allegedly hacking phones and other private information from those who are celebrities and numerous other people who fell victim to that publication. now, another murdock publication, allegedly, hacking phone and bank accounts of the former prime minister, gordon brown. that is according to gordon brown and his office. he is going to be releasing that statement very shortly. we will see just how big this ends up being. clearly, it is a significant development in light of what we have seen just sunday, just yesterday, when the news of the world decided to shut down because of its own alleged bad behavior. i want to go back to following what president obama is going to be saying very shortly out of the white house briefing room. obviously, bringing us up to speed about these negotiations that are taking place, democrats, republicans and the president over raising the debt limit, the debt ceiling and what this means in terms of budget cuts, what it means in terms of

tax hikes and where they are in this deal. i want to bring back our financial analyst, ali velshi. ali, there is something that is very curious here. we have heard from the treasury secretary, geithner. we have also heard from them too. debt ceiling talks, really important. both of them linking it here. they don't really necessarily have to do with one another. do we think we are going to hear from the president? is he going to make a connection between people wanting more jobs and actually dealing with the debt ceiling? are these two connected? >> not really. both sides have connected it. the president on friday made a speech saying this just proves they have to get a deal on the debt ceiling and the debt. republicans saying this is just evidence that the

administration's policies are not working and why we need to cut taxes to create jobs. no, not really. they are separate issues. we have slow growth in jobs unrelated to the debt. the slow growth is related to the fact that we have a lot of unemployed people who are not creating more demand. employment is a chicken in the i go sort of thing. you have to have more people working, creating more demand with the money that they earn that causes greater employment. that is the single biggest issue that is plaguing us. a lot of commentators are saying that in the short-term is the biggest problem and would reap the greatest reward. what the republicans are saying, can you create incentives through tax credits to say, we need jobs in these areas geographically or these industries? can you give people tax credits to hire. if there can be reductions in the cost of hiring people, president obama has suggested cuts in the payroll tax. that could stimulate job growth immediately.

it is highly specific. it is not across-the-board tax cuts that create jobs. it is highly specific targeted tax cuts. it could be part of this deal. >> the chinese, do they have anything? what is their stake in this debate? they are holding on to our debt. >> this august 2nd day that treasury secretary, tim geithner, says, we are not going to pay all our bills. the treasury secretary is going to sit there with a pile of bills and say, this one is social security, this one is military, this one is debt to the chinese. which one will get paid? the chinese are the biggest holders of foreign debt in the united states. if they think there is any risk to the money they are getting paid, they could act in a way that is adverse to the u.s. dollar and cause us to pay more interest on the money we borrowed. international markets are betting the deal is getting done. we have not seen any adverse re,

a. if it looks like there might be one, you will start to see markets get jittery. >> some people have argued that if august 2nd comes, the federal government would be able to pay some bills but not others. for some services but not others. the president says, that doesn't make any sense. you can't give up paying social security payments and decide to turn on the lights for the pentagon. how does that work. is that even possible? >> where that would work is if you generally think you would have enough money to pay all your bills. you just may not have it all this month. your putting some things off. in a country that has to borrow so much of the money it has to spend, everybody knows you are running out of money. your cost of borrowing from that day forward is likely to increase. that's where it becomes a problem. once you start to default, interest rates spike. right now, the united states has enjoyed a reputation as the world's most trustworthy pair of

its obligations in the history of the world. that's what people are worried about us risking. the major ratings agencies have said if they don't k0come to an agreement, they could downgrade u.s. debt. that trickles down to home loans, u.s. loans, home loans, personal loans, business loans. >> ali velshi, thank you so much. ali velshi as well as wolf blitzer and john king, we are awaiting president obama's talks on the debt ceiling, budgets and potential tax hikes and major cuts, more after the break.

negotiations to provide my perspective and i am going to take a few questions. as all of you know, i met with

congressional leaders yesterday. we are going to be meeting again today. we are going to meet every single day until we get this thing resolved. the good news is that all the leaders continue to believe rightly that for us not to raise the debt ceiling, and to allow the u.s. government to default, we can not threaten the united states full faith and credit for the first time in our history. we still have a lot of work to do, though, to get this problem solved. let me just make a couple of points. first of all, all of us agree that we should use this opportunity to do something meaningful on debt and deficits. the reports that have been out there have been largely accurate that speaker bane ner and myself

had been in a series of conversations about doing the biggest deal possible to actually resolve our debt and our deficit challenge for a long stretch of time. i want to say i appreciate speaker bane ner's good faith efforts on that front. what i emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues. if not now, when? i have been hearing from nigh republican friends for quite some time it is a moral imperative to tackle our debt in a serious way. this is one of the things that's creating uncertainty and holding back invest on the part of the business community. what i have said to them is, let's go. it is possible for us to

construct a package that would shall balanced and share sacrifice and invite both parties to take on their sacred cows and involve meaningful changes to medicare, social security and medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors and make sure the programs are here not just for this generation or the next generation. it is possible to bring in revenues in a way that does not impede our current recovery but is fair and balanced. we have agreed to a series of spending cuts that will make the government leaner, meaner more efficient and give taxpayers a greater bang for their buck. that includes health spending and some programs that i like

very much and would be nice to have but we can't afford right now. if you look at this overall package, we could achieve a situation in which our deficits were manageable and our debt levels were stabilized. the economy as a whole, i think, would benefit from that. moreover, i think it would give the american people enormous confidence that this town can do something once in a while. we can defy what we are thinking about short-term politics. every once in a while, we break out of that and do what's right for the country. i continue to push congressional leaders for the largest possible deal. there is going to be resistance. there is frankly resistance on my side to do anything on

entitlements. strong resistance on the republican side to do anything on revenues. if each side takes a maximalist position, each side wants 100% of its idealogical predispositions are, then we can't get anything done. i think the american people want to see something done. they feel a sense of urgency, both about the breakdown in our political process and about the situation in our economy. so what i've said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the house and in the senate. i am happy to consider all options, all alternatives that they are looking at. things that i will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary

stop gap resolution to this problem. this is the united states of america. we don't manage our affairs in three-month inkreemtcrements. we don't risk u.s. default on our obligations because we can't put politics aside. so i've been very clear to them. we are going to resolve this and we are going to resolve this for for a reasonable period of time and in a serious way. my hope is that as the consequences of negotiations that take place today, tomorrow, the next day, and through next weekend, if necessary, that we are going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stableizes the economy and proofs to the american people that we can actually get

things done in this country and in this town. with that, i'm going to take some questions starting with ben felt. >> thank you very much, mr. president. two quick topics. given that you are running out of time, can you explain what is your plan for where these talks go if republicans continue to oppose tax increases as they have adamantly said they will and your point about no short-term stop gap. if it came down to that and congress went that route, i know you are opposed to it but would you confirm it? >> i will not sign a 30-day, 60-day, 90-day extension. that is not a good approach. if we think this is hard now, imagine how these guys are going to be thinking six months from now in the middle of election season when they are all up. it is not going to get easier. it is going to get harder. so we might as well do it now.

pull off the band-aid. eat our peas. now is the time to do it. if not now, when? we keep on talking about this stuff and we have these high-minded pronouncements about how we have got to get control of the deficit and how we owe it to our children and our grandchildren. well, let's step up. let's do it. i am prepared to do it. i am prepared to take on significant heat from my party to get something done. i expect the other side should be willing to do the same thing if they mean what they say, that this is important. let me just then comment on this whole issue of tax increases, because there has been a lot of information floating around there. i want to be crystal clear. nobody has talked about increasing taxes now. nobody has talked about

increasing taxes next year. what we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners and oil companies at a time when they are making billions of dollars of profits. what we have said, we should have revenues and the best place to get those revenues are from folks like me who have been extraordinarily fortunate and that millionaires and billionaires can afford to pay a little bit more going back to the bush tax rates and what i've also said to the republicans is, if you don't like that formulation, then i'm happy to work with you on tax reform that could potentially lower everybody's rate and broaden the base as long as that package was

sufficiently progressive so that we weren't balancing the budgets on the backs of middle class families and working class families and we weren't letting hedge fund managers or authors of best-selling books off the hook. that is a reasonable proposition. so when you hear folks saying, well, you know, the president shouldn't want massive job-killing tax increases when the economy is this weak. nobody is looking to raise taxes right now. we are talking about potentially 2013 and the out years. if we don't renew the payroll tax cut that we passed in december, and i'm in favor of renewing it for next year as well but there have been some republicans that said, we may not renew it. if we don't renew that, then the $1,000 that's been going to a typical american family this

year as a consequence of the tax cut that i worked with republicans passed in december, that lapses. that could weaken the economy. so i have bent over backwards to work with the republicans to try to come up with a form mu lation that doesn't require them to vote sometime in the next month to increase taxes. what i have said is, identify a revenue package that makes sense, that is commensurate with the sacrifices we are asking other people to make and then i'm happy to work with you to figure out how else we might do it. >> can you come to a deal if they don't budge on taxes? >> i do not see a path to a deal if they don't budge period. i mean, if the basic proposition is, it's my way or the highway, then we are probably not going to get something done, because we have got divided government. we have democrats controlling

the senate. we probably are going to need democratic votes in the house for any package that could possibly pass. so if, in fact, mitch mcconnell and john boehner are sincere and i believe they are, that they don't want to see the u.s. government default, then they are going to have to compromise just like democrats are going to have to compromise just like i have shown myself willing to compromise. chip reid? >> mr. president, you said that everybody in the room is willing to do what they have to do, wants to get something done by august 2nd. isn't the problem the people who aren't in there, in particular, republican presidential candidates and republican tea partyers on the hill and the american public. the latest cbs news poll showed that only 24% of americans said you should raise the debt limit to avoid an economic catastrophe. there are 69% that oppose raising the debt limit.

isn't the problem that you and others have failed to convince the american people that we have a crisis here? how are you going to change that? >> let me distinguish between professional politicians and the public at-large. the public is not paying close attention to the ins and outs of how a treasury auction goes. they shouldn't. they are worrying about their families, their jobs, their neighborhood. they have a lot of other things on their plate. we are paid to worry about it. i think, depending on how you phrase the question, if you said to the american people, is it a good idea for the united states not to pay its bills and potentially create another recession that could throw millions of more people out of work, i feel pretty confident i can get a majority on my side on that one. that's the fact. if we don't raise the debt ceiling and we see a crisis of

confidence in the markets, and suddenly interest rates are going up significantly and everybody is paying higher interest rates on their car loans, on their mortgages, on their credit cards, and that's sucking up a whole bunch of additional money out of the pockets of the american people, i promise you, they won't like that. i will say that some of the professional politicians know better. for them to say that we shouldn't be raising the debt ceiling is irresponsible. they know better. and this is not something that i am making up. this is not something that tim geithner is making up. we are not out here trying to use this as a means of doing all these really tough political

things. i would rather be talking about stuff that everybody welcomes, like new programs or the nfl season getting resolved. unfortunately, this is what eis on our plate. it is before us right now. we have to deal with it. what you are right about, think, is that the leaders in the room here, at a certain point, have to step up and do the right thing regardless of the voices in our respective parties that are trying to undermine our effort. i have a stake in john boehner successfully persuading his caucus that this is the right thing to do, just like he has a stake in seeing me successfully persuading the democratic party that we should take on these problems that we have been talking about for too long and haven't been doing ning about.

>> do you think he will come back to the $4 trillion deal. >> i think speaker boehner would like to do something big. his politics within his caucus are very difficult. you are right. this is part of the problem with a political process where folks are rewarded for saying irresponsible things to win elections or obtain short-term political gain when we are in a position to try to do something hard. we haven't always laid the ground work for it. i think that it is going to take some work on his side. it look, it is also going to take some work on our side to get this thing done. i mean, the vast majority of democrats on capitol hill would prefer not to have to do anything. they would prefer frankly not to have to do anything on some of

these debt an deficit problems. i'm sympathetic to their concerns. they are looking after folks who are already hurting and already vulnerable and there air lot of families out there and seniors who are dependant on some of these programs. what i have explained to them is, number one, if you look at the numbers and medicare, in particular, will run out of money, and we will not be able to sustain that program. no matter how much taxes go up. i mean, it is not an ogs fption us to sit by and do nothing. if you air progressive that cares about the integrity of social security and medicare and medicaid and believes it is part of what makes our country great, that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable

over the long-term. if you air progressive that cares about investments in head start and student loan programs and medical research and infrastructure, we are not going to be able to make progress on those areas if we haven't gotten our physical house in order. the argument i am making to my party is, the values we care about, making sure everybody in this country has a shot at the american dream and everybody is out there with the opportunity to succeed if they work hard and live a responsible life, and the government has a role to play in providing some of that opportunity through things like student loans and making sure that our roads and highways and airports are functioning and making sure that we're investing in research and development for the high-tech jobs of the future. if you care about those things, then you have got to be interested in figuring out how do we pay for that in a

responsible way. so if we are going to have a sales job, this is not pleasant. it is hard to persuade people to do hard stuff that entails trimming benefits an increasing revenues. the reason we have a problem, people keep on avoiding hard things. now is the time for us to go ahead and take it off. >> rich wolf? >> are you expecting a balance of shared sacrifice but in the $4 trillion deal that you are talking about, ruffle, it seems that we are now at about 4-1 in extending taxes, $800 billion in taxes ruffle. that doesn't seem very fair to some democrats. i am wondering if you could clarify why we are at that level and if you could clarify your social security position, would any of the money from social security go towards the deficit?

>> with respect to social security, social security is not the source of our deficit problems. social security, if it is part of a package, would be an issue of how do we make sure social security extends its life and is strengthened? so the reason to do social security is to make sure the benefits are there for seniors in the out years. and the reason to include that potentially in this package is, if you are going to take a bunch of tough votes, you might as well do it now. as opposed to trying to muster up the political will to get something done further down in the future. with respect to a balanced package, is the package that we are talking about exactly what i would want? no.

i might want more revenues and fewer cuts to programs that benefit middle class families that are trying to send their kids to college or benefit, you know, all of us, because we are investing more in medical research. so i make no claims that somehow the position that speaker boehner and i discussed reflects 100% of what i want. that's the point. my point is that i'm willing to move in their direction in order to get something done. that's what compromise entails. we have a system of government in which everybody has got to give a little bit. now, what i will say is that the revenue components that we've discussed would be significant and would target folks who can most afford it. if we don't do any revenue,

because you may hear the argument that why not just go ahead and do all the cuts and we can debate the revenue issues in the election, you will hear that from some republicans. the problem is, that if you don't do the revenues, to get the same amount of savings, you have to have more cuts, which means that its seniors or poor kids or its medical researchers or its our infrastructure that suffers. and i do not want and i will not accept a deal in which i am asked to do nothing. i am able to keep hundreds of thousands of dollars in additional income that i don't

need while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they have a couple,0 thousand dollars less gran grants or student loans have the that's what the revenue debate is about, not that i want to raise revenues for the sake of raising revenues or a grand am bigs to create a bigger government. it is because if we are going to actually solve the problem, there are finite number of ways to do it. if you don't have revenues, it means you are putting more of a burden on the people who can least afford it. that's not fair. i think the american people agree with me on that. sam stein? >> is now a really good time

to -- [ inaudible question ] what do you say to members of your own party who say, let's consider it and not -- >> our biggest priority in an administration is getting the economy back on track and putting people back to work. without relitigating the past, i am absolutely convinced and the vast majority of economists are convinced that the steps we took in the recovery act saved millions of people their jobs or creating a whole bunch of jobs. part of the evidence o thf that as you see what happens with the recovery act phasing out. when i came into office, and budgets were hemorrhaging at the state level, part of the recovery act was giving states help so they wouldn't have to lay off teachers, police officers, firefighters. as we've seen, that federal

support for states diminish, you have seen the biggest job losses in the public sector, teachers, police officers, firefighters losing their jobs. so my strong preference would be for us to figure out ways that we can continue to provide help across the board but i'm operating within some political constraints here. whatever i do has to go through the house of representatives. what that means, then, is that among the options that are available to us, is, for example, payroll tax cut. which might not be exactly the kind of program that i would design in order to boost employment but does make a difference because it puts money in the pockets of people who are then spending it at businesses large and small. that gives them more customers, increases demand and gives businesses a greater incentive

to hire. that would be, for example, a component of this overall package. unemployment benefits, again, puts money in the pockets of folks who are out there knocking on doors trying to find a job every day. giving them those resources. that puts more money into the economy and that potentially improves the climate for businesses to want to hire. so as part of a component of a deal, i think it is very important for us to look at what is the stuff we can take short-term in order to put folks back to work. i am not somebody who believes that just because we solve the deficit and debt problems, short-term, medium-term, or long-term, that that automatically solves the unemployment problem. we are still going to have to do a bunch of stuff, including trade deals that are before congress right now, that could add tens of thousands of jobs.

republicans gave me this list at the beginning of this year as a priority, something they thought they could do. now, i'm ready to do it and so far, we haven't gotten the kind of movement that i would have expected. we've got the potential to create an infrastructure bank that could put construction workers to work right now rebuilding our roads and our bridges and our vital infrastructure all across the country. those are still areas where i think we can make norm must progress. i do think that if the country as a whole sees washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident with aggressively

investing in this country, foreign investors saying america has got its act together and are willing to invest and so, it can have a positive impact in overall growth and employment. it is not the only solution. we are still going to have to have a strong jobs agenda. it is part of a solution. i might add, it is the primary solution that the republicans have offered when it comes to jobs. they keep on going out there and saying, you know, mr. president, what are you doing about jobs? when you ask him, well, what would you do? we have got to get government spending under control and get our deficits under control. i say, okay, let's go. where are they? this is what they claim would be the single biggest boost to business certainty and confidence. so what's the hold-up?

with respect to social security, if i indicated earlier that this may be an opportunity for us to go ahead and do something smart that strengthens social security and gives not just this generation but future generations the opportunity to say this thing is going to be in there for the long haul. now, that may not be possible. you are absolutely right that, as i said, social security is not the primary driver of our long-term deficits and debt. on the other hand, we do want to make sure that social security is going to be there for the next generations fanned there is a reasonable deal, to be had on it, it is one that i am willing to pursue. >> raising the retirement, is that too big of a --

>> i am probably not going to get into the details of negotiations. i might enjoy negotiating with you. i don't know how much juice you have in the republican caucus. that's what i figured. leslie clark? >> thank you, mr. president. you have talked to economists and you have said that economists have agreed that a deal needs to be made. have you worked with u.s. business leaders at all to lobby congress to raise the debt ceiling? and if so, who are you talking to? >> i have spoken extensively to business leaders. and i'll be honest with you, i this i that business leaders in the abstract want to see a resolution to this problem. what i have found is that they are somewhat hesitant to weigh in on some of these issues even if they are willing to say something privately to me, because they have a whole bunch of business pending before

congress. they don't want to make anybody mad. this is a problem of our politics and our politicians but it is not exclusively a problem of our politics and politicses. the business community is a lot like everybody else, which is we want to cut everybody else's stuff and we want to keep our stuff. we want to cut our taxes but if you twoont raise revenue with somebody else's taxes, that's okay. that kind of mindset is why we never get the problem solved. there have been business leaders like warren buffet, who i think have spoken out forcefully on this issue. i think some of the folks who participated in the bull/simpson commission, made very clear that they would agree to a balanced approach, even if it meant for them individually that they were

seeing slightly higher taxes on their income given that the average ceo, if i'm not mistaken, saw a 23% raise this past year while the average worker saw a 0% to 1% raise last year. a lot of well-meaning business people out there who recognize the need to make something happen. i think they have been hesitant to be as straightforward as i like when they say, this is what a balanced package means. it meanings we have some spending cuts. it means we have increased revenue and it means we are taking on some of the drivers of our long-term debt and deficits. >> can you say as the clock ticks down whether or not the administrations working on any sort of contingency plans if if things don't happen by august? >> we are going to get this done

by august 2nd. >> george? >> to follow on that questions, do you have complete confidence that the speaker can deliver the votes? is he in control with his caucus? >> that's a question for the speaker, not a question for me. my experience with john boehner has been good. he is a good man who wants to do right by the country. i think that it is, as chip alluded to, the politics, that swept him into the speakership. they are good for a mid-term election. they are cuff for governing. part of what the republican

caucus needs to recognize is that american democracy works when people listen to each other, are willing to give each other the benefit of the doubt. we assume the patriotism, good intentions of the other side and we are willing to make some sensible compromises to solve big problems. i think that there are members of that caucus who haven't fully arrived at that realization yet. >> so your confidence in him wasn't shaken by him walking away from the big deal he said he wanted? >> these things are a tough process. in fairness, a big deal would require a lot of work on the part of harry reid and nancy pelosi and myself to bring democrats along. the point is, if everybody gets into the boat at the same time, it doesn't tip over. that was bob dole's famous comment after striking the deal

with the president and mr. gingrich back in the '90s. that is always the case when it comes to difficult but important tasks like this. last question, april ryan? >> mr. president, what would revisit the issue of sacrifice? in 2009, you said that we had not seen the worst yet. now, that these budget cuts are looming, you have minorities to support, the elderly as well as people who are scared of losing jobs, fearful. also, what say you about congressman shata's bill, the debt free american act. are you supporting the republican bill about congressman fata? >> i am not going to comment on a particular bill right now.

let me speak to the broader point that you are asking about, april. this recession has been hard on everybody. but, obviously, it is harder on folks who got less. the thing that i am on sessed with and have been since i came into office is all those families out there who are doing the right thing every single day, who are looking after their families, who are just struggling to keep up and just feel like they are falling behind no matter how hard they work. i got a letter from past week from a woman who her husband had lost his job, had pounded the pavement, finally found a job.

they felt like things were stabilizing for a few months. six months later, he lost the second job. now, they are back looking again and trying to figure out how are they ever going to make ends meet. they are just hundreds of thousands of are just -- hundref thousands of folks out there who really have seen as tough economy as we have seen in our life times. we took very aggressive steps when i first came into office to yank the economy out of a potential great depression and stabilize it. we were largely successful in stabilizing it, but we stabilized it at a level where unemployment is still too high and the economy is not growing fast enough to make up for all of the jobs that were lost before i took office and the few months after i took office.

so this unemployment rate has been really stubborn. there are a couple of ways that we can solve that. number one, make sure that the overall economy is growing. so we have continued to take a series of steps to make sure that there's money in peoples' pockets that they can go out and spend, and that's what the payroll tax cuts were about, and some of the tax breaks for companies that are willing to invest and plant some equipment and zero capital gains for small businesses. that's what that was all about, giving businesses more incentive to invest. we have worked to make sure that the training programs out there for folks who are having to shift from jobs that may not exist anymore, so that they can get the training they need for the jobs that do exist, that

those are improved and sharpened. we have put forward a series of proposals to make sure that regulations that may be unnecessary and are hampering some businesses, that we are examining those for costs and benefits, and if they are not providing the terms of the benefits for clean air and health and water and worker safety that had been promised, we should get rid of some of those regulations. we have been looking at the whole menu of steps that can be taken. we are now in a situation where because the economy has moved slower than we wanted, and because of the deficits and debt that result from the recession and the crisis, that, you know, taking an approach that costs trillions of dollars is not an

option. we don't have that kind of money right now. what we can do is to solve this underlying debt and deficit problem for a long period of time so that then we can get back to having a conversation about since we now have solved this problem, that's not no longer what is hampering economic growth, and that's not feeding business and uncertainty. everybody feels that the ground is stable under our feet. are there some strategies that we could pursue that would really focus on some targeted job growth? infrastructure being a primary example. the infrastructure bank we proposed is relatively small. but could we imagine a project where we're rebuilding ports and

bridges and ports and schools and broadband lines and construction workers, putting them to work right now, i can imagine an aggressive program like that the american people would rally around and be good for the economy, not just this year or the year after, but the next 30 years. but we cannot have that conversation if people feel like we don't have our fiscal house in order. so the idea is let's act now, and let's get this problem off the table, and then with some firm footing, with a solid fiscal situation, we will then be in a position to make the kind of investments that i think are going to be necessary to win the future. so this is not a right or left conservative liberal situation, this is how do we operate in a smart way understanding that we have sort term challenges and

long-term challenges. if we can solve some long-term challenges, that frees up some of the energies to face the short-term ones as well. thank you very much, everybody. >> will we see you every day? >> he kept walking. so the president of the united states wraps up a news conference. this is the second one within two weeks. the president answering lots of questions about the debt ceiling that has to be raised by august 2nd, otherwise if you believe the treasury department, there will be enormous, enormous problems for the u.s. economy, indeed, for the global economy. suzanne malveaux is here. the president made it clear he will not sign any short term stop gap measures, and not even a 120-day deal. he also said he fully expect

some sort of deal by august 2nd, although it's obvious there are enormous problems getting to the august 2nd deadline. >> i thought it was notable the last question where the president addressed the american people, that it was tough time for folks but harder for those that have less. what does the debate mean when it comes to them? he outlined it as a problem that has to be resolved by august second before you can deal with the practical matters, like how do you get jobs and put people back to work. i want to bring in our chief white house correspondent. jessica, i thought the last question was great, are we going to see you again tomorrow. that is the question. what is next here, the president drew a line in the sand saying, as wolfe mentioned, he is not going to sign any short-term measure, and wants the grand

deal on the table and it's questionable whether or not he will get it from his own party. >> reporter: first of all, as we expected, the president did affirm he wanted this grand deal. he did say when asked would you block any sort term deal, we have been told he told congressional leaders he would veto any short term deal. he said he opposes the 30, 60 or 90-day deal. we have to go back and check the tape, i think. does that mean that would fall short of going through the elections? i just don't know. that's the question i leave this press conference wondering and i will try to get an answer to that. i heard him go out of his way to play nice with speaker boehner. he says that despite what everybody in the political world speculated there must have been

tension and bad blood over the breakdown over the weekend, he felt boehner was operating in good faith and he appreciates his good efforts, and the president is willing to make hard choices and take heat on medicare and medicaid, and he said i am all in and putting everything out there, and i'm willing to go big and are you coming with me? in the election season, and if he is trying -- it may not have worked but he tried, and at the negotiating table, he's willing to lead and is everybody going to go there with him. he asked all sides to come with specifics so they can actually start hammering together the outlines of a real deal, probably that middle way, but we will see, suzanne. >> thank you, jessica.

wolf, it's interesting, jessica said it seemed like the president was going out of his way to give credit on to speaker boehner, but some of the things that i heard, i heard him saying it was a moral imperative for republicans to get the fiscal house in order, that he bent over backwards to try and negotiate with them. what did you make of that? did you think it was very political, that he was going after the gop, or is he looking at democrats and saying roll up your sleeves? >> he was clearly trying to stakeout the middle ground noting he has an a problem with the liberal base and putting social security and medicare on the table for some sort of cuts in terms of benefits for social security and medicare recipients. he knows the republicans have a problem and boehner has a serious problem. i don't know how they will get out of this. i suspect his problem is not as serious as the republican problem is. let's bring in gloria and john

king, and they have been watching this very, very carefully. it reminded me, and that word try anglation that we heard so much during the clinton administration, where clinton angered his own base by going for welfare reform and other issues, and the president now clearly saying this is the moment -- both parties have to be irritating some of their respective bases. >> yeah, he said he was willing to do that with his democrats and the republicans have to be willing to do it with folks that say no tax increases. i think he directed his comments to republicans saying, look, we have heard your campaign statements about how you care and how the deficit is so important to the children's future. what he was saying here is we need to do something for the greater good. we need to put our down arms, if you will, and figure out a way out of this. and he also made the point -- this is what the public wants us

to do, and in the end we will all get credit for doing something like this. but i didn't hear a path out of this. >> yeah, i was a little more pessimistic in the aftermath of the news conference than going in, there would be a deal, the positioning the president lays out. >> i don't see there being a deal. it's interesting, you know. we went through this in our many years covering the white house together. what is the president's goal? what is he trying to do when he has a press conference? no question he is trying to convince the american people, i am in the middle, and i am willing to give, and i understand there's hurt on each side and i want to get a deal that's good for the country. politely, he tried to pressure the republicans. nice words about speaker

boehner, and they developed a relationship. if they mean what they say, where are they? the president is trying to say i am trying to give you what you want, and where are you? try to eat our peas, and pull off the band-aid, and trying to get politicians to stand up and do their job. one things republicans will take away from this, when boehner walked away from the big deal, and the narrative was the republicans are walking away from the deal, and the president said to be fair selling the bigger medicare and bigger social security cuts would have been hard in the democratic side that he did not have full agreement with his party there. >> at one point he said i bent over backwards to reach a compromise with speaker boehner, and he did go out of his way, suzanne, in making the point that as far as any tax increases would be, tax hikes or what you want to call it, nothing would

go into affect until after the 2012 election, and he referred to some of the deductions for the corporate jet owners and oil companies, and there would be no tax increases this year he says or next year, but starting in 2013. i don't know how that will play with the republicans. it sounds to me, suzanne, like the republicans are going to come back and say, you know what, we'll take all the spending cuts, and we'll increase the debt ceiling, but that's going to be the bottom line positioning. you heard the president say that's what they're saying in the private meetings. i don't know if the president will budge on that, but we'll find out soon enough. >> and the republicans, that's remained their position. ali velshi, did you hear anything from the president's address that gave optimism that there was a way forward? >> you know, nothing new. he did make the point that we don't know how international markets are going to respond to

the idea that a default comes on august 2nd. he was playing the ground that this could be a decrease in interest rates and available credit. the important thing here that he did not talk about is our entire economy runs on credit from a personal level, a business level and a government level. we're not a cash society. and if this doesn't get done, it will affect the availability of credit. we recovered in a lot of places in the economy, but the fact is there are investments to be made and people can't get money for it. the president was cautioning that that might not happen. we might face credit problems. the other point he made, which i think is important, that social security is not part of the deal. social security checks are not likely the thing that is not going to get paid on august 2nd or beyond, but that's a tough discussion. if you are having the tough discussion, why not have that

now as opposed to leave that for later? there's a sense that he's accepting the fact this is all-all all-encompassing in terms of revenue. i leave the discussion more optimistic than the others, and the president is treating this as urgent. we might get closer to a deal if everybody gets on the bandwagon. >> thank you. we want to get you up to speed. a startling twist in the newspaper scandal gripping great britain. gordon brown said the "london sunday times" obtained his personal records. this happened well before brown became prime minister. the "sunday times" is owned by murdoch who also owns news of

the world. a crowd climbed an imbough see fence, but never got in the embassy itself. the military dispersed the mob, but a u.s. official says troops were slow to respond. and then president obama wants to bring order to the government's finances. he says both parties need to take on their sacred cows to get it done in a news conference just this last hour. president obama pressed the republicans to compromise on the no new taxes pledge. >> we have the high-minded pronouncements of how we have to get control of the deficit and how we owe it to our children and grandchildren. well, let's step up. let's do it.

i am prepared to do it. i am prepared to take on significant heat from my party to get something done. and i expect the other should be willing to do the same thing if they mean what they say, that this is important. >> the idea of a grand budget deal drew out of talks to increase the debt ceiling. they have to raise the nation's borrowing limit by august 2nd, or the united states will default on its bills. leon pennetta tells leader to crush militants attacking the troops. he says iran is arming the militants and that needs to stop. u.s. forces are now increasing. the number of american forces in iraq is going down with the plan to with draw by the end of the year. 46 people are confirmed dead and dozens missing after a

russian cruise ship sank. the ship, "the bulgaria" was not licensed and had too many passengers onboard. and many have been pulled from the water. the ship was built in 1955. military aid to pakistan is now on hold. the u.s. says pakistan needs to do more to get rid of al qaeda within its borders. >> the pakistani relationship is difficult, but it must be made to work over time. until we get through these difficulties, we will hold back some of the money that the american taxpayers have

committed to give to them. a funeral service for firefighter shannon stone. he fell over a rail at at baseball game last week while trying to catch a ball. he died at a hospital a short time later. texas ranger fans paid tribute to stone on sunday. here's a rundown of some of the stories looking ahead. the united states pulls the plug on pakistan funding. we will give you reaction on losing over $800 million u.s. dollars. plus, another paper owned by murdoch crossing the line. this time it's former prime minister gordon brown that said he was hacked. we have more on the cheating scandal that rocked atlanta schools. i will talk to a teacher that says he was fired for being a whistle-blower .

and then the truth-o-meter. days after a man is mauled to death at yellowstone, a woman has a too-close-encounter with another bear. >> she runs out of ground to retreat to. the bear does not charge her but is not backing down either. erin gets ready to make a swim for it.

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the british government now. >> reporter: goes right to the heart of the british establishment on every level. gordon brown, the former prime minister and finance minister here is claiming that possibly he was targeted by journalists from news -- international news papers. not this time from the news of the world. "the sunday times," and "the sun newspaper," claiming investigators working on behalf of "the sunday times" tried to get his banking details by posing as him on the phone, and details about a property that he was selling from his lawyers, and "the sun" tabloid paper, tried to get details of an illness that his son had that ended up being a front page story.

and then queen's police told details to "news of the world," and officers gave "news of the world" phone numbers of the monarchy. so there are victims -- families of victims of 9/11, and terrorists attacks, and murder victims and so on, and it's getting bigger and bigger. >> what does the london police have to say about this? they are investigating all of this. >> reporter: they are investigating all of this. they have come under stinging criticism for the way they conducted the initial investigation. now they have a different officer in charge and she is due to speak here tomorrow. and they have got some embarrassing situations here with their own force, allegedly, according to the newspaper, being involved in selling

details about the royal family. it's not an easy place for them. >> and murdoch already shut down "news of the world." what about him selling "sky news," and do we know if he has a comment on this allegation? >> reporter: yeah, well in terms of the -- there's a proposed takeover in the pipeline that the news corp wants to take over. it's now in the political eye of the storm and it's being referred to a regulator which means it won't be delayed for sometime, and i won't get in the nitty gritty of it. and murdoch himself is in london, we think, to deal with the crisis. he had dinner with his embattled executive, and there's no comment from either of them, and

it's said rebecca brooks knew nothing of this when it was going on. >> thank you, and we appreciate it. and tensions are heating up. now the obama administration is withholding $800 million in military aid to pakistan. they are responding by saying keep your money. and our international correspondent joins us, and fran, thank you for joining us. i want you to take a listen. this is the new defense secretary, leon pennetta, talking about where we stand in fighting against al qaeda. >> my goals are to defeat al qaeda, that obviously we made an important start with that with getting rid of bin laden, but i was convinced in my prior capacity and i am convinced in this capacity that we're within reach of strategically defeating

al qaeda. >> within reach, fran, of strategically defeating al qaeda. is it going to be harder to fight if we don't have the help from pakistan? >> reporter: oh, it absolutely is going to be harder. in any of these countries, whether it's pakistan, the tribal areas or yemen or somalia, wherever there is a weak central government where they don't exert the full control of the government in an area, it's to al qaeda's advantage. leon pennetta is right we're within reach of strategically defeating them. but the strategic defeat means getting the leadership that remains so they cannot pull off a massive attack like 9/11. he's right we're within reach, but it's harder without the help of pakistan. >> what does that mean for pakistan if they lose $800

million? what does it mean with their willingness or ability to beat al qaeda? >> well, there have been tensioned that were trying to be managed across three administrations, including the current one, and even this administration was trying not to use the aid as a lever. you deny them activities you want them to undertake. this is not a good place to be for either country. they create a path agreed upon by both sides where there are confidence building measures where you can turn the aid back on. >> so how do they get there, fran? is this simply a slap on the wrist or is it a real threat by the obama administration, that, look, they are fed up with pakistan and they are not going to deal with them in the same way? >> no, it's much more than a

mere slap on the wrist? i don't think the administration wanted to find themselves having to get to the point. there's tremendous public pressure and congress for them to use this, and the problem is it's one of national pride. what you are seeing is pakistan in some instances saying keep your aid, because they don't wants to have to get a report card and get the approval of the u.s. administration or the u.s. congress to get this aid. remember, pakistan has its own citizens and its own domestic politics to manage, and we make it difficult for them to do that by using the aid card. i think it was inevitable. the relationship has been deteriorating, and most recently, with admiral mullen acknowledging the pakistani government had some role in killing the journalist. both sides are going to want a way out. >> thank you. it's a new beginning for a brand-new country.

but after the celebrations, it's now time to get to the work in south sudan. we talk about how difficult it's going to be to get the new nation off the ground. um...would you mind doing it again? last time. [ engine turns over ] oooohhhh...sweet. [ male announcer ] the chevy cruze with the my chevrolet app. the remote control car is finally here. well, now she's just playing with us. oh. [ horn honks ] right now, go to priceline for a sneak peek at recent winning and better than ever! hotel bids to find where you n save up to 60% on hotels. * we'll even email you other people's winning bids, so you'll know what price to name. *á with new hotel bid alerts, from priceline.

the world map changed this weekend. a new nation was carved into africa. the people of south sudan finally have their independence, and they also have tremendous obstacles to overcome as a newborn state in one of the poorest parts of the world. we go beyond the headlines. michael, give us a sense and tell us what took place on saturday night. a lot of people were watching. >> it was a big day. we blossom out of what has been five decades of war and death in

sudan. they had celebrations kicking off around midnight. thousands were in the streets of the new capital. they were all screaming freedom and a very happy scene. this new country is the size of texas. the old country, sudan, before they slit it was the tenth largest country in the world. home to 8 million people. this was africa's largest nation broken into two. what happened, and this is where the trouble started. the southern third of the nation has been christian, and the north has been muslim, and that's what really was behind the long-standing civil war that we saw going on for years. 2 million people died during this. not just soldiers, but a lot of women and children as well. >> michael, there are big challenges ahead for the new country. can you explain a bit of that? >> south sudan is in big

trouble. it's one of the poorest countries in the world. most of the people there are living on a dollar a day. less than 100 miles of paved roads in the entire country. most of the villages have no electricity or running water. a 15-year-old girl, for example, has a better chance of dying in childbir childbirth, and 10% of the children don't make it to their 5th birthday. it's part of daily life and you have the ethnic decisions that will continue. >> is there hope it could be an independent nation? >> the soil is good for farming. more importantly, the south is where the oil is. there's oil. that's going to be the life blood for the new nation, but the oil pipelines run through the north of the country, what is now sudan. you will have difficulties

there. >> who is actually running the show? who is in charge there in south sudan? >> it goes back to decades of war. the states are being built out of the army. >> how does this relate to darfur? >> well, we can call it a genocide. it was. they drove more than 2 million people off their land. that conflict is stillfe fes festering. and the president stands at the moment indicted by the international criminal court for genocide over darfur.

you will leave the north with little to lose by playing tough guy when it comes to things like the oil revenue. >> we know the bush administration tried to bring change. >> yes, the bush administration was pushing along the talks and peace treaty leading to what we have seen today, the south succeeding and starting their own country. but you have to remember, these two countries have been divorced in name only. they have not reached agreements on the final borders. the state of the respecters of citizens have to be worked out and the oil revenues have to be worked out. still a troubled place. >> a very, very difficult time. >> you have a place so huge, 100 miles of paved roads in the entire country. a long way to go. >> we'll keep our eye on it. thank you so much. we appreciate it.

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this just in. want to bring you news about an amtrak accident. this is coverage from a chopper on the way to the scene. it's confirmed an amtrak

passenger train collided with a truck. this is in maine. it happened around 11:00 this morning. now, this spokesman says there are some injuries, and some of them serious. we do not have a number of those injuries, but we know some are serious. she confirmed this accident resulted in a fire, but she did not know if the fire was still blazing or if it had actually been put out. this is amtrak, number 691, involved in a collision shortly after 11:00 this morning in maine. we understand a chopper is on its way, and we will come back to this story. we are also working another story. we want to go beyond the headlines in the cheating scandal that has rocked atlanta public schools. just last week, a state investigation found 178 teachers

and principals either erased wrong answers on students standardized test or knew about the cheating and said nothing. and the former atlanta teacher says he was fired because he blew the whistle on cheating. and also joining us is richard perry. thank you for being here and for being so open for what was going on. you were a japanese teacher for four years in the atlanta school system, and there was a day where you realized there was massive cheating going on. what happened? >> it was very simple. i was actually just walking down the hall way outside the testing room, the laboratory, and the prauk tur teacher, who was at that time the english department chair asked me to step in and relieve her for a second while she took a break and used the rest room, and i stepped inside

the room and many students were seated around tables and collaborating together about the tests. >> what did you do when you saw that? did you report it? >> well, i went immediately to my mentor teacher and asked his opinion of things. he said don't rock the boat and leave it alone. by the end of the day, i decided to call the state testing office, reported it to them, and they immediately called the central office testing director at atlanta public schools and reported back to them. so it became a closed loop. the next morning those folks from the central office called me to continue the investigation. she asked me if i knew the names of the students involved, and i did not know them because i was teaching sophomores, and these were juniors, and seniors, and she said if if you did not know the students, there was no incident. >> what did you think of them

ignoring what you had seen here? >> i had been teaching 15 years in public schools, so it was a shock to me. you hear of these things but never experience them. when it was so blatant, and my mentor teacher telling me to ignore it and walk away. i could not believe professionals behaved that way. >> and then you got fired. what did they say to you? >> it was sort of like the current divorce settlement between arnold and maria, it was like we cannot get along together anymore, so why don't you go away? >> we want to mention that we did reach out to atlanta schools about your accusation, and they said they could not comment on personnel issues. clearly that was disturbing to you and you are out of work and out of a job. what kind of place, what kind of environment did you work in?

were there rumors this kind of thing was going on? >> there were rumors of this kind of thing, and there was a complete, i would say, environment of toxicity there, where principals were given such power that they ran schools like early college at carver, as if it were her own property. the principal smoking in her office and that type of thing. >> was there pressure because of the tests that students have to pass and do well in order for teachers to keep their jobs and in order to keep their school system as it is? >> there is a lot of that happening. in fact, at the end of the fall semester, the principal issued a memorandum to us telling us to not give failing grades to any

student. >> i understand you are looking for work and in el paso, texas, and i wish the best for you in moving forward, and do you think you will still be in education? >> i think so. it's a family trait. thank you, suzanne. >> thank you, paul. i want to go to our education contributor who is in hartford, connecticut. when we hear of this it's shocking and surprising. some people say that this cheating, the scope of the cheating by principals and teachers in the atlanta school system, that it's not just here but widespread. is that true? >> i have to tell you. i am a principal. you are in the principal's office. welcome. when i first heard of the cheating, i actually thought that it was a lie. i thought that they were just picking on the school district as that rolled out. as we did a story on it, i found more and more as i talked to reporters from the ajc, atlanta

journals constitution, and found the depth of it. it's still stunning. i feel a certain sense of responsibility when members of my profession go so far to do so much wrong. >> steve, do we know how widespread this is? is this a common problem or is this very specific to some school districts that feel a lot of pressure and are having teachers and principals behave badly? >> i received some information through twitter from teachers throughout the country who say that they too were feeling pressure. but the overwhelming majority, millions of teachers and principals and other forms of education professionals understand that this is part of our obligation to provide you, the community, with clear and concise information on a student's capacity. in order for there to be cheating in a school, you have to have the principals at least

willing to turn their eye to it or participating in a real way. i am not a conspiracy theory guy. the way the tests occur, it's so locked tight that you have to have the person responsible for reporting it be a part of the cheating themselves. and then they have to be willing to sit in a room like these folks are alleged and call out answers and have them erased for whatever number of tests that there are. there's a real commitment to the cheating in order for this occur. >> how do you prevent this from happening in the future? >> it's like asking how do you stop people from speeding, and i don't know. but the people caught up to this point, they must be fired and they have to lose their licenses to work with children as educators. to make it clear, if your going

to go this far to undermine the profession, you don't need to be part of it. >> thank you very much, and good seeing you. >> thank you. what is going on in some neighborhoods in florida. take a listen. >> looks like a duck, and walks like a duck, but it's not a duck. >> strip malls being confused for casinos. florida police are cracking down. that's next. at liberty mutual, we know how much you count on your car and how much the people in your life count on you. that's why we offer accident forgiveness, man: good job. where your price won't increase due to your first accident. we also offer a hassle-free lifetime repair guarantee, where the repairs made on your car are guaranteed for life or they're on us. these are just two of the valuable features

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getting more information in about this amtrak crash collision. we're learning here -- the spokeswoman, the dispatcher for the regional communications says the amtrak passenger train collided with a truck in north burwick, maine, around 11:00 this morning. we do know -- we just learned that the driver of the tractor trailer has died. we do not know about the extent of injuries or even if there are any fatalities regarding passengers aboard the amtrak train.

it's number 691 involved in the collision shortly after 11:00 this morning. we are aware the driver involved in the collision, the driver of the tractor trailer has died. we still have information coming. we don't have a lot of information. but you can see there the devastation as the out come of that amtrak number 691 involved in a collision with a truck in north burwick ma, maine. on to another story. getting into the casino experience at florida malls. some offer sweepstakes games, which look like slot machines. police officers in florida have now had enough.

>> reporter: welcome to florida? this is not the vegas strip. it's a strip mall. between barbershops and salon parlors, sweepstakes cafes are popping up across the country, and they have the making of a casino, free food and dark rooms, and open 24 hours a day. but are they casinos? law enforcement think so and they are shutting them down, because here in florida, only certain highly regulated operators are allowed to run w casinos. >> in our opinion, it's clearly gambling. >> sweepstakes is a predetermined pool of tickets, and it's totally different. >> in every one, you will find a sign like this. >> reporter: to give you a sense

of how many sweepstakes cafes there are, we have one here and two across the street and right around the corner, you have another. here is how they work. you buy a phone card and get time in return, and log on and play away. unlike a slot machine where you pay to play, they are actually getting a product for their money, which the owners say it makes it legal. but you can still lose money just like in a slot machine. >> i ended up losing 15 bucks. >> and this man sells these terminals. this makes it a lucrative business for store owners that can bank up to $30,000 a day. >> it says the total prices over the next thousand entries will total $39.55. >> that's predetermination,

which would make this legal. as we found, not every place operates that way and now many are getting raided by cops. peter nar actually opened the sweeps stakes cafe to have it shut down two months later. >> it's not a gambling operation, it's a retail business that uses sweepstakes to promote the business. >> what games do you like to play? >> the winning one. >> just the facts, please. we're testing recent statements from politicians with our truth-o-meter. ♪ ♪ introducing purina one beyond a new food for your cat or dog.

every day it seems another politician that makes a statement that makes us stop and think, is that true? well, we have a reporter from the st. petersburg time, and they are putting some of the quotes through the truth-o-meter. what about this one from president obama. he said when president bill clinton raised the top tax rates to levels now proposed by him the country experienced significant job growth. what do you think, angie? >> suzanne, we rated this one-half true. president obama is correct that tax rates were higher under president bill clinton and the economy was expanding, but the way he said this, it gives the

impression the higher tax rates caused the growth, and the economists we spoke with said there are many factors that could cause it to grow and expand. so we rated this one-half truth. >> republican presidential candidate, newt gingrich, he said despite its struggle, his campaign has exactly what reagan had. >> we rated this barely true. reagan did shake up his campaign staff in the 1980 campaign, but there are many differences between the reagan campaign then and the gingrich campaign today. reagan was doing well and he shook up his own staff because he wanted to do better. and gingrich's staff left him. >> big difference.

and then senator republican of texas said recently this over the debate in the tax code. >> 51%, that's a majority of american households paid no income tax in 2009. zero. zip. nadda. >> what do we think? >> we gave this one a true. the senator said income taxes and popular deductions for mortgage interest or credits do spend the tax bill to zero. even low wage workers pay taxes that go to social security, but what he was talking about was income taxes, and that's true. [ whirring and beeping ]

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swapping a dreamjob to enlist on the frontlines. an army reservist passed up harvard, and now he has

returned. dr. sanjay gupta has the story. >> reporter: he thought he was going to develop the next great heart medicine. in 2002, when he was offered his dream job, there was a catch. he was in the army reserves, and he signed up with a unit that he knew was headed to battle. so army major kit parker told harvard -- >> hey, hold the job. i have to go fight, and i took off for a year to go fight in afghanistan. >> reporter: he spent 2002 and 2003 near kandahar hunting for taliban. he came back in harvard, but in 2009 with the national guard unit he went back to afghanistan. >> i spent a lot of time with rock clearance units, looking for ieds, and my vehicle never got hit and i am very lucky, very lucky.

when you go up and pull open the door and see your injured buddies, you never forget that sight. >> reporter: he began to explore the science of brain injury. when the brain gets hit by a blast wave, it slams up against the skull. >> reporter: he developed new tools to study how the blast hurts the brain. >> concussions that your favorite football player suffers, or the head injury you get in a car accident or shaken baby syndrome, those are all examples of head injuries that can cause a traumatic head injury. >> more than half a dozen students are veterans. >> we're focused on this, because these are our buddies, our guys, and this could have been us, and it might still be us. so it brings a certain level of urgency to what we're trying to

do. >> reporter: dr. john sanjay gupta, cnn, reporting. intse pa. it progressively got worse. my rheumatologist told me about enbrel. i'm surprised how quickly my symptoms have been managed. [ male announcer ] because enbrel suppresses your immune system, it may lower your ability to fight infections. serious, sometimes fatal events including infections, tuberculosis, lymphoma, other cancers, and nervous system and blood disorders have occurred. before starting enbrel, your doctor should test you for tuberculosis and discuss whether you've been to a region where certain fungal infections are common. don't start enbrel if you have an infection like the flu. tell your doctor if you're prone to infections, have cuts or sores, have had hepatitis b, have been treated for heart failure, or if, while on enbrel, you experience persistent fever, bruising, bleeding, or paleness. get back to the things that matter most. good job girls. ask your rheumatologist if enbrel is right for you.

after a grizzly mauled a man to death inside yellowstone national park, hikers were quite intense. and one hiker got the fright of her life when a bear got too close. >> reporter: just days after a fatal grizzly bear attack here, another too-close-for-comfort

brush with a hiker. >> reporter: as the bear approached her, hiker, erin profit runs out of ground to retreat to. the bear does not charge her but does not back down, either. kayakers paddling nearby drag her across the lake to safety before the bear also goes for a dip. >> when the guys in the kayak offered to pull me across, i thought that seemed like a better plan, because the bear seemed like it wanted to be down by the edge. >> reporter: i have to ask you, how afraid were you? >> i was pretty afraid. i really was. >> reporter: so were the rescue workers. >> when the bear was getting close to her, she dropped her pack and had an apple in the pack, and we thought it was a good idea to go get her at that point. >> reporr: