ball with kelsey, complete with an array of photos so impressive, well, how could timberlake tell her to go jump in a lake? or even a river. >> if you can't go, all i have to say is cry me a river. ♪ cry me a river cry me a river ♪ >> reporter: hey, the corporal's got a tattoo too, and that's just the one we can see. when we asked the friend who helped set up theebk page herelsey coul kick justin timberlake's butt if he turned her down, she said, oh, yeah, for sure. this marine isn't looking for a few good men, just one. >> do it for your country. >> reporter: jeanne moos. >> hit me up. >> reporter: cnn, new york. >> that's it for me. i'm wolf blitzer in the situation room. for our international viewers, world report is next. in north america, john king usa starts right now. >> thanks, wolf. good evening, everyone. tonight from reality tv to federal court, the cast of tlc's

"sister wives" says four wives and 16 children is none of the government's business. their new lawsuit tests this question. is polygamy somehow protected by a constitutional right to privacy? plus late word the government's credit rating could be downgraded because of the stalemate in negotiations over spending cuts and raising the debt ceiling. that warning from moody's came hours after the fed chairman gave his take on the consequences of not letting the government borrow more money. >> failure to do that would certainly throw the financial system into enormous disarray and have major impacts on the global economy. but up first tonight, riveting and exclusive cnn images from the battlefield in libya. new u.s. intelligence assessments show cracks in the regime that suggest moammar gadhafi might finally be ready to discuss an exit strategy. well, perhaps. but our ben wedeman and his crew saw a short time ago an effort by pro-gadhafi forces to retake the town 60 miles south of the libyan capital of tripoli.

>> get in the car. >> you guys. wait. [ bleep ] >> get in, mary. >> wait. wait, wait, wait. wait! >> wait, wait, wait! you in, mary? >> yeah, i'm in. >> okay, just calm down. >> we're cool. down! down! >> we're leaving this area because there's gunfire all around us, and we believe that gadhafi's forces are doing a roundabout move. so we are rushing out of this area. >> ben wedeman is safe, with us

now live from zintan in western libya. it's harrowing to watch that footage. you're on the ground there about 50 miles south of tripoli. what happened? when did you first hear the gunfire and realize that things were going bad? >> reporter: we had gone to the outskirts of goholish to investigate this report from human rights watch that the rebels had vandalized property and burnt some houses in the area, and two of our drivers had gone up to the top of a hill just to look into the town to see what the situation was like, and right in front of him, they saw just about 150 yards away two car loads of gadhafi soldiers. and so they came rushing down the hill. and while they were coming down the hill, the shooting began. at first we couldn't tell if it was on the other side or somewhere down the road. but suddenly we realized it was right among us. and so we, as you saw, fairly panicked moments trying to get into the car. we drove away, but we had to go

quite some distance because every time we thought we were safe, there were more bullets coming in. and this was really the beginning of a long, long day during which in other areas we came under rocket fire. i spent a lot of time on my stomach in the dust just trying to stay safe as that stuff was flying over. it did end with the rebel fighters being able to regain control of this village, which is important because it leads to one of the main highways that goes to tripoli. and what the rebels are trying to do is now they've retaken qawalish to get to the main highway and cut it off so supplies from the southern part of the country won't be able to reach the capital. john? >> ben, as you make that point, i'm coming over to the map to show our viewers what we're talking about. if you see the stripes, that means it's held by the rebels. if you see green, it's held by

the gadhafi regime. here is where ben was earlier today. ben, as you make this point, when you're out there and you have the fighting like that, given the stalemate of recent days, what does it tell you? you're in this town that the opposition, the rebels believe they hold, but the gadhafi forces show up and show up and start a gun fight. >> reporter: what the situation in this area is that each town basically rises up against gadhafi, and that's what's happened along this spring of the mountains that goes from the tunisian border fairly close to tripoli. but they don't have enough manpower to hold the ground in the event gadhafi's forces move towards them. so what happened is really hundreds of fighters from this town zintan, one of the biggest towns in the mountain range, they came and basically saved the day. they sent dozens and dozens of trucks and rocket launchers to that town to reinforce the

fighters in the area who really were simply overrun by gadhafi's forces. so it's really touch and go. we've seen this in other parts of libya where you think the rebels hold a place, and within a matter of literally minutes it's retaken by gadhafi's forces, and the whole sort of strategic map is thrown up into the air. john? >> ben wedeman in zintan tonight. we're glad you're safe and your crew as well. fascinating and brave reporting for ben and his crew yet again putting their lives at risk in libya. let's talk to our senior analyst fran. a lot of people out there may not understand this. i want our viewers and fran and david to listen to this as this plays out. ben is on the ground. mary, his camera woman is out there shooting, and then you hear this. [ gunfire ] >> wait! >> wait, wait, wait. you in, mary? >> yeah, i'm in.

>> okay. just calm down. >> fran, i just want your assessment of that in the sense, when you look at the map and we've gone through this. we've talked of stalemate. we've talked for months about are we nearing a tipple point? what does it tell you about the very complicated and violent situation on the ground in libya? >> i think it's just another indication that gadhafi is feeling -- and his forces are feeling pressure. what they don't need are the very reports of the facts on the ground that ben wedeman and his crew are producing. that is, they're under pressure. they're running out of fuel and cash. turkey seized moneys in an account there. they're getting increasingly desperate, and the stranglehold around his forces and gadhafi himself in tripoli is tightening. the question is how long can they last? can the rebels capitalize on this? these are the sort of tactics of a desperate, increasingly vulnerable gadhafi government. >> david, you hear fran say a

desperate, increasingly vulnerable government. listen to the take today from secretary of state hillary clinton who suggests perhaps there might be an opening here. >> we are still getting contradictory signals from gadhafi's camp. he hasn't adhered to deadlines to cease fire and step down from power. so while neither of us can predict to you the exact day or hour that gadhafi will leave power, we do understand and agree that his days are numbered. >> somewhat mixed message there, david. the french foreign minister says gadhafi is sending emissaries all around the world saying, let's talk. i want to get out. we haven't seen the proof of that. >> by the way, secretary clinton is really putting on the miles, isn't she? she looked really tired in those photos. i have to feel sympathetic for her and supportive of her. what the french are saying and

what secretary clinton is saying, yes, there have been feelers that have come out from the libyans, but they have all sorts of conditions attached still. that is, gadhafi may be willing to step aside, but his sons say he would have to have some major position of authority or power. gadhafi would want to stay in country. gadhafi wants all the international criminal charges dropped against him. what is apparent, i think, to everyone is until the noose fran talked about is tightened some more, he's probably not going to step down. what's surprising to me is i thought we had him on the run a few weeks ago. he was literally on the run in tripoli as the bombs fell. and then we sort of pulled back a little bit, and now we're left in this struggle that takes so long and so tedious, and even as support in both the united states and western europe is waning. >> and so, fran, is there anything nato can do to help with the nudge, if you will, or is this simply a matter of patience to see if the rebels can get their act together? >> going to what david gergen has just said, what nato needs

to do is resume the targeting and many booibombing they were several weeks ago. one u.s. admiral in the nato command acknowledged that gadhafi himself is a legitimate target as the commander in chief of their military that targets and pulls off the kind of stunts ben wedeman lived through today. he's a legitimate target. they ought to resume the bombing campaigns because what you need is the added military pressure that nato can bring to this to bring this to a quicker end. >> again, we applaud ben wedeman and his crew to bring you the latest from the battlefield. still ahead, on tv, cody brown keeps no secrets. >> you've got to meet my family. i'm a polygamist. >> today the brown family went to court to try to get the government off its back. next talks aimed at letting the government borrow more money are headed nowhere. moody says failure to act could hurt the government's credit rating. [ male announcer ] this is coach parker...

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no progress reported tonight on the big deficit reduction talks at the white house. with that, this warning tonight from moody's investor service. the federal government could lose its top of the line credit rating if the white house and congress can't agree on a plan to increase the nation's debt ceiling, meaning allow washington to borrow more money to help pay its bills. that warning came just a few hours after this sober math lesson from the fed chairman ben bernanke. since the government borrows 40 cents of every dollar it spends, a fall you'ilure to increase washington's credit limit would require a 40% cutback in spending. >> significant cuts in social security, medicare, military pay, or some combination of those in order to avoid borrowing more money. >> now that sounds ominous, but some conservatives think the catastrophe scenarios are exaggerated. >> if congress fails to raise the debt ceiling by $2.5 trillion, that somehow the united states will go into default, and we will lose the full faith and credit of the united states. that is simply not true.

>> in any event, so far the debt and deficit negotiations are making little or no progress, but, well, colorful rhetoric, there's a surplus of that. >> my kids and my grand thereki am very worried about because we have spent ourselves into a hole that we can only make very tough decisions, and clearly, we are not making those decisions here in washington, d.c. it's hard trying to do the lord's work in the city of satan. >> the new freshman republican class in congress does not have a representative at those big white house meetings yet, it is a driving force nonetheless. because house speaker says these new members expect their campaign promises to be honored. ben quail is the newest from the 3rd congressional district in arizona. congressman, do you believe we need to have a deal by august 2nd, or if there's not a deal to your liking, so what? >> i think we need to see a

deal. we need to make sure we don't default on our debts, but we need to have spending reductions and talk of how we spend money in washington. you talk about moody's and talk about if there's an actual default, well, we don't want to default. but you have to understand, if we don't have the spending reductions and structural reforms, the bond be ratings in the market are going to take it out on us going forward because they'll realize that washington isn't serious about cutting spepding and living within their means. >> when you hear senate republican leader mitch mcconnell say, you know what, i agree with everything you said congressman quayle, but we will get the blame as republicans if the government defaults. >> what i say is, if you hit august 2nd, we can actually not default on our debt, but we're going to have to prioritize our spending. so what we need to do is hopefully we'll be able to come to an agreement that actually gets our spending down. let's not start to fear monger

when we're out there talking about cuts to social security if we don't reach an agreement by august 2nd. >> you make the point about prioritizing. i'm just going over the wall to show our viewers. you make an important point. by fear monger, i assume you mean the president's thing when he said just yesterday perhaps social security checks won't go out, perhaps veteran's checks won't go out. this is an analysis by the bipartisan policy center. the government takes in $172 billion, has about $306 billion in bills to pay. therefore, you'd be short about $134 billion. remember this number, $172 billion, if you go back and look at big ticket items here. as you come out from the safety net. i need to take this off and make that go away. you come back and look at this deficit scenario here, if you look at interest on the debt and you look at social security payments and you look at medicare and medicaid, some other services, then you hit up to the money pretty quickly of what the government has. the question is priorities. yes, congress could send the social security checks out, but if he did that, something else wouldn't get paid. the military might not get paid.

how would you prioritize? >> that's the thing. we need to prioritize. i think we should be looking to not default on our debt. we should be paying social security, medicare, medicaid, and our military pay. i believe we can do that with the revenues that we're taking in. i want to deal. i want to make sure we do not default and get this prioritization. these are going to be the president's responsibilities. if he cannot come to the table and actually agree with the house republicans, senate republicans, senate democrats on a deal that will get through both chambers. >> can a deal have any revenue increases? >> you talk about revenue increases, i want tax reform. not in this deal because it's going to be too late. it's too complicated of a matter. i think tax increases at this time is a bad idea. it's going to hurt job growth and economic growth. we need to get this focused solely on spending and reductions in spending. and then we can get to the tax reformulater on that can get rid of the loopholes and lower the corporate tax rate and personal

income tax rate that the president has been talking about and seems to be in agreement on. >> there's a lot of talk in town that, when there was word speaker boehner might be negotiating a grand compromise with the president, $4 trillion in deficit reduction over the decade, but the possibility -- and the speaker says this never came up in any detail, but the possibility of revenue increases, freshman like yourself said, whoa, wait a minute. we campaigned on this. this is our red line, no way. is that true? >> what speaker boehner and what leader cantor said that there were no tax hikes that speaker boehner was going to be agreeing to, we believed that was off the table. it's not a good time to be raising taxes during an economic slowdown. when we're having such an anemic recovery, we need to get more revenue into the government, and that happens but economic growth, getting more taxpayers into the system. not through increasing your taxes, which is going to slow economic growth and actually hurt our feeble recovery right now. >> do you include loopholes in that, taking away some subsidies to the oil companies, corporate jets, the ethanol subsidy?

can you support a deal that has closing loopholes like that in it? >> if we have closing loopholes and tax reductions, then we can start talking. the things you're talking about, these loopholes, talking about things the president is saying and some of this stuff, we're talking about tax deductions for companies, not just specifically for one industry. we want to, and we talked about it in our 2012 budgets about getting rid of the loopholes and making the tax code a lot simpler and having a tax code that's pro growth so that companies that provide the best services and best products actually succeed rather than those that have the most influence in washington to give them a special carve out in the tax code. these are the types of things that we want in the future, but it's going to be too late going up against the august 2nd when we want to come to an agreement right now. >> congressman ben quayle of arizona, appreciate your insights. we'll keep in touch as this plays out. later, perspective from another republican, freshman senator marco rubio of florida. >> i don't think the president has ever released anything other than what he says at press conferences.

i've never seen paper on their deal. never seen him propose a plan. >> next the man who summoned lawmakers to talk at the white house. president obama, breaking news. he walked out. only one a day women's 50+ advantage has ginkgo for memory and concentration, plus support for bone and breast health. a great addition to my routine. [ female announcer ] one a day women's. ♪ ♪

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welcome back. want to bring you up to date on breaking news. an angry president obama walked out of today's debt talks after telling house majority leader cantor, don't call my bluff.

they were apparently discussing a back and forth. i'm going to read some of the notes of this. eric cantor, the house majority leader, saying, that's when the president got very agitated and said, i've sat here long enough. no other president, including ronald reagan, would sit here here like this. you reach the point where something's got to give. you've got to compromise, or, eric, i'm going to take this to the american people. eric, don't call my bluff. i'm going to the american people with this. cantor said he was somewhat taken aback and tried to have a conversation with the president. in spite of saying none of us want to take this to the brink, he shoved back from the table and said, i'll see you tomorrow. i'm out. kate bolduan, this sounds quite dramatic, a showdown between the president and the republican house majority leader eric cantor. where the president in his own house leaves the room. >> reporter: that sounds like the case, at least according to house republican leader eric

cantor. he came out and talked to a group of us reporters as we were standing there and gave us a very detailed explanation of how he's describing what happened in the most recent -- what's been happening in these meetings. the headline here is that, according to eric cantor, he said to the president, look, we're so far apart here in trying to reach this number and to get the votes that would be needed to pass a deal through the house -- eric cantor said he was going to move off his own insistence to have only one vote, as the president has long supported, saying they're going to have only one vote on this to get them through 2012. eric cantor said he asked the president if you could consider some kind of series of votes, a smaller number to possibly get them through a shorter term, a series of votes. at which point -- i'm going to have to read from my notes here as we're just getting this. cantor said, at that point, the president became very agitated. and said, quoting the president through eric cantor, the president told him, eric, quote, don't call my bluff. i'm going to the american people with this.

cantor said that he was quite taken aback by this, at which point the president pushed back from the table and said, i'll see you tomorrow. i asked eric cantor, john, where they go from here because this really sounds like a serious breakdown in communication, very dramatic and very tense moment in this white house meeting. eric cantor says that he expects they'll be back at the white house tomorrow to continue the conversation. but it seems that things didn't make much progress here this evening. john? >> as you know, sometimes confrontation gets everyone to think again, or sometimes confrontation begets more confrontation. we'll try to get the white house perspective as well. breaking news from our congressional correspondent kate bo bolduan. kate, thank you. a dramatic showdown. the president of the united states staring down the republican majority leader of the house, then walking out of the talks in his own white house. dramatic breaking news. we'll stay on top of it. when we come back, a man who says he has four wives, four happy wives, goes to federal court in utah saying the state should have no right to keep him

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cody brown and his four wives today challenged utah's law criminalizing polygamy. he says there are tens of thousands of plural families who only wish to live their private lives accord to go their beliefs. if brown's name sounds familiar, he and his family are the subject of the reality tv series "sister wives." >> my name is cody brown, and you've got to meet my family. i'm a polygamist, but we're not

the polygamists you think you know. >> brown's attorney jonathan turley spoke with us a short time ago from salt lake city. so, mr. turley, let's try to dig deep on this case. you wrote a blog posting about this filing you made today. you say, we are not demanding the recognition of polygamist marriage. we are only challenging the right of the state to prosecute people for their private relations and demanding equal treatment with other citizens in living their lives according to their own beliefs. so you're not seeking legal recognition of polygamy, but aren't you seeking a court to bless the right to polygamy here? >> no, this is not an effort to have the court endorse polygamy. rather it's to have the court reaffirm privacy. in 2003, the supreme court ruled that states cannot use the criminal code for a form of social engineering. they can't make people live their lives according to the moral code of the legislature. that case involved decriminalizing homosexual relations. the question here is whether

that right to privacy extends to all citizens equally. the browns have never asked for multiple marriage licenses. they've never asked for the recognition of these spiritual marriages. this is really a private relationship that kody brown has with his wives. obviously, they have a television program, but when i talk about privacy, i'm talking about constitutional privacy. that is, they have a right to structure their family in the way that fits with their beliefs. >> you mention that television program. he says flat out, i'm a polygamist. and he uses the term marriage in describing what he calls healthy relationships. let's listen to m brown here. >> i like marriage, and i'm a repeat offender. so i have adopted a faith that embraces that lifestyle. in fact, it recommends it. i like to reward good behavior.

so if you're good with one marriage, they figure you'll be good with two. i think i'll be good with four. >> in a very public way, he is saying i have four marriages. that does not, in your view, say that he's asking that this court -- you're asking this court to embrace polygamy? >> no. what he's referring to are spiritual marriages. that is, the brown family has never asked and is not asking now for the state to give them multiple marriage licenses or to sanction their marriage. all they're saying is that they should not be presumptive criminals simply because the adults consider themselves spiritually married. john, part of the problem in this country right now is that we allow people to have plural lovers, to have any number of partners, have children by those partners, but if they privately express a commitment, a relinlius commitment to each other as spouses, they can be

arrested, and it makes no sense at all because what we're doing is we're saying we'll prosecute you because your family doesn't look like our family. that we don't like the way that you live or the things that you believe in. and so what this is really about is not about polygamy, it's about privacy. and whether all of us have a right to privacy in that sense. >> and so answer the critics, and you've seen some of these cases in the past where women have not been voluntarily in relationships like this, they say they've been forced into relationships like this. answer a woman who has that experience who says, if you win this case, you will encourage that. >> first of all, there are tens of thousands of monogamous families with child abuse or incest or any number of crimes. we don't suddenly debate whether we should ban monogamy. the fact is the brown family has been investigated thoroughly. there's no allegation of crimes. there is a happy thriving family. it's rather bizarre to suggest that in the name of protecting families, we should destroy a perfectly successful family.

and the point here -- and this is the reason this case presents such a strong claim for the federal court -- is that the brown family has no allegations of crime. all of those types of things are stripped away. all that remains is a family that's different. it's different from your family and my family. but it's their family, and the question is do they have a right to live their life according to their faith? >> gallup asked this question back in may. do you believe polygamy is morally acceptable or morally wrong? 11% of americans says acceptable. 86% -- that's a pretty stunning number -- said it is wrong. somebody watching out there right now says, mr. turley, what you're advocating in court is crazy. >> well, it's not crazy in the sense -- in the most important sense, and that is, constitutional rights do not exist by popular aclamation. in fact, the constitution is designed to protect those of us in the minority, even those of

us who might be hated. the fact is it shouldn't matter how many americans approve of the brown family any more than the brown family approves of their families. that's why we live in this country. that's the point of this case. and we're going to fight very, very hard for that. >> you are arguing for this man to continue his relationship with four women. if you win the case on the constitutional point, what do you see as the impact? whether it's on the marriage question, on the gay rights question, on other privacy questions. >> there's certainly no impact on the gay marriage question. they are not asking for the recognition of their marriage. this decision, if it goes in favor of the brown family, is only going to reaffirm privacy. it's not going to endorse polygamy. the fact is that many people do not like polygamy and plural families, but it's also a fact they live in a country that allows us to structure families

not according to whether they're popular with neighbors but whether they resonate with the members of that family. >> professor turley, appreciate your time tonight. >> it's a great pleasure, john. thank you. >> someone who knows intimately what polygamy is like. she escaped as a teenager, went back and then got out again. she is now a reporter. i want to start with you. when you hear about this family and hear about their case, help us through your experience to understand. should they win this case? should this man have the right to four wives? >> absolutely not, john. what amazes me is to hear attorneys like jonathan turley talking, who don't even understand the first amendment. we have the right to believe anything we want religiously, but we don't have the right to practice it. you can believe your first born should be thrown in the volcano, but you can't throw your first born in the volcano. i read this complaint, and let me tell you something.

it just is appalling they actually refer to the bronze age, the old testament, the hippies in the '60s to the very lowest elements of society to justify their belief, and that is supposed to give them the right to practice the lifestyle that they practice. it's abusive. birth rates globally, male to female birth rates are 50-50. there aren't enough women to support this lifestyle. that's why we have thousands of lost boys all over the western united states who have been kicked be out of these communities so the young girls are all taken by the older men. it's an abusive lifestyle. it's third world, bronze age. there's no woman in a civilized world for this. >> michael, you've covered this issue for quite some time. is laurie's view the right view? do you think this case has any prayer? >> i don't think it comes as a surprise that it's being challenged. i think it's beautifully ironic it comes on the eve of the state

of texas putting warren jeffs on trial for the crimes of polygamy. this may be a wonderful family, and this may all be consenting adults, but the bottom line is they are the exception. when they talk about thousands of polygamists, yes, they are, and most of them live in communities like colorado city and the flds community where young girls don't have a choice. they're not educated. they're impregnated at 12, 14 years of age. warren jeffs, their prophet, will go on trial in texas a week and a half from now or taking two underage girls, both of them under the age of 17. that many ways is the reality of polygamy. and this fine attorney and professor can pontificate all he wants about the law and what these people's rights are, but this system of belief, this practice has been utilized in the american southwest to oppress women and children for generations now. let him go to court and see what happens. i wish them the best because this probably ought to be ironed out. but the practice of polygamy

almost inevitably leads to the abuse of women and children. >> and, laurie, you lived this experience. so when you hear professor turley say, no, if these -- this family wins, he calls them a family. the brown family is a family. it will in no way impact situations where younger women or even older women are forced into doing this. do you buy that? >> absolutely not, john. i think it's a bunch of hocus-pocus, and i'll tell you why. this whole thing is a way to get ratings for their show. i suspect that anyway. i just don't agree with any of it. i think these lawyers are making a lot of money just like the lawyers are representing all of these pedophiles in the flds. they're making a lot of money. they're getting their name out there. i think the whole thing is just a disgrace. i really don't agree with any of it. >> michael, do you see anything novel in the legal argument? this has been debated for decades? do you see anything novel in the legal argument going back to say this is a right of privacy issue. as long as everybody consents, they're not violating any laws. they don't have marriage

licenses. >> like all things in the world, it's really nothing new. this has gone on, various arguments of polygamy and various legal maneuvering has gone on as long as the practice has been present in the nation. these guys are going to go. they're good lawyers. they're going to talk up a storm. they're going to have all kinds of sympathy for this family. again, i know families very much like this where you have mature women who have been educated, they're accomplished, and they decide to live in this lifest e lifestyle. great. i think these people in many ways protesteth too much. they got investigated, but i understand no charges are filed. now in texas, the three states that have taken action. the crimes associated with polygamy. the rate of taking young underage girls. mr. jeffs is in trouble, and as laurie mentioned, casting out the lost boys. it's the problems associated under the umbrella. let these guys go knock

themselves out in court to defend polygamy. the need to focus on crimes. inevitably associated with this practice. the arrange the marriages, the casting out of the boys, the welfare fraud. texas is doing it right. they're going after. they found the perpetrators after that rape. they're going after them, and they're busting them hard. >> michael and laurie, appreciate your insights much maybe we'll talk in the near future. thank you so much for coming. the president of the united states walks out of deficit reduction talks in his own house. and also, up next, the china challenge. our economy is struggling. china's growing. the top military officer of both countries got together in china today. guess what the top chinese military officer told ours? maybe you should spend less on defense. friendly advice or something else?

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china's a rising super power. today's report that the economy is growing at an annual rate of 9.5% helped boost stock markets all over the world. looking at it from a military point of view, admiral mike mullen, head of the joint chiefs of staff, announced his visit to beijing saying china, quote, has arrived at a world power. to help us, we're joined by new york times columnist nicholas christoff. wayn i want to head over here to put out these economic numbers,

particularly when you look at what's happening in the united states, a stalled recovery, and you look at this growth in china. is it all sunny side up, are the chinese doing everything right, or is there a risk to this high growth? >> there are clearly risks. one is inflation, which is very politically sensitive around china and has been rising quite quickly. food prices are up 14% the last year. the other is a question of is it a bubble? there are a lot of different answers to that. i've really noticed that over the last year, a growing number of my chinese friends have warned that there has just been huge overinvestment in residential housing in particular. and they worry about it. >> in this country, of course, we're having the president in these negotiations about the debt and the deficit. the chinese economy is growing, which is one of the reasons they can buy so much u.s. debt. how much is that? think troubling signs about the chinese economy or maybe the growth in the chinese economy when you look at this, our total debt, china is the biggest stakeholder. maybe they have too much

influence over what goes on here. >> well, china is in the classic position of banker to whom huge amounts are owed. on the one hand, they could do terrible things to our economy by selling the american bonds they hold. on the other hand, if they started to do that, that would be disastrous for their own portfolio. they're not going to do that. i think it is difficult that we've financed so much of our own debt over the years by borrowing from china. >> the chairman of the joint chiefs admiral mullen is in china for about a week. he was having a briefing with his counterpart, the chief of the general staff, and he said this to the chinese top military officer. i know the united states is still recovering from the financial crisis. under such circumstances, it is still spending a lot of money on its military. isn't that placing too much pressure on the taxpayers? if the united states could reduce its military spending a little, wouldn't that be a

better scenario? i'm not quite sure how that advice would be taken. when you look right now, u.s. military spending way above the chinese. china obviously has been increasing its spending in recent years. would you take that advice, nick kristof as the friendly advice or as sort of a rivalry? >> it was pretty in your face.f. i happen to think it was pretty good advice. i'm not sure we should spend half of global arms spending right here. it really did reflect a real tension between the u.s. and chinese militaries. chinese feel they're being encircled by american military and resentful of reconnaissance missions close to the chinese shore. from our point of view, we find them building a bluewater navy. they're about to unveil an aircraft carrier, they're investing in space technology, doing strange things in cyber-warfare, just giving us a lot of concern across a whole range of dimensions.

>> that's one of the issues. what is this relationship going forward? friend, foe or don't know? listen to our friend asking the same question of admiral mullen during this visit. >> if you had to identify one area, what would that be in this relationship? >> actually, the major concern is we haven't had one. >> you haven't had a relationship or a concern? >> no. we haven't had a relationship. it's been cut off. >> it's been cut off. you have two strong military countries, obviously, the united states is still superior. you have two economic superpowers in this the world, is there a relationship? is there trust given the complexity of this relationship? >> there isn't. the worst element of that is the military. we talk about trade, we talk about other dimensions. in the military, there has been very little contact between the american and chinese militaries and the problem is when ever there is a crisis, the chinese

military immediately, the first thing they do is suspend those relations that exist. one of the things that concerns our strategic plan planners is the possibility of a military accident, like the one that happened off hi nan island in 2001, there was a collision between planes and our plane went down. if something like that were to happen today, it's not obvious we could get somebody at the other end of the line and negotiate a solution. there's a huge possibility for misunderstanding that would flair up between the two most powerful militaries in the world. >> and for the next generation and tomorrow. thank you for your insights. >> thank you. >> when we come back, back to our breaking news. the president of the united states walks out of deficit reduction talks in the white house. that's where he lives. we'll go to the capital and white house in just a moment. [ male announcer ] this...is the network --

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to listen to house republicans, the president of the united states walked out of a meeting in his own house today about deficit reduction. shocking, isn't it? the white house acknowledges the meeting was tense but no walkout. congressional correspondent, kate baldwin on capitol hill. we know they don't trust each other or like each other much, now they have a different take on the same meeting. >> reporter: i've been in touch with democratic officials familiar with the debt talks. what i've hearing is at the end

of the meeting, eric cantor, one of the lead negotiators for the republicans proposed a series of votes, short term votes for the debt extension, something the president has repeatedly said he won't accept. the president basically gave the group a lecture. he said, i will not accept this. i will veto this and then said this kind of offer reaffirms what americans already think of washington. that everybody is posturing for political gain and doesn't really want to solve our problems. he called on the group to solve -- stop catering to their bases and find solutions. that came at the end of the meeting. after he made that statement, that is when the meeting ended and that is when the president and others left. that is how we should distinguish this from walking out of a meeting. >> so kate baldwin, it's the president's house, he can decide when the meeting ends, of course, he walked out of the room, has to go to another room. clearly tension. republicans are trying to spin

this as angry president, forget about it. the key question is what happens tomorrow? >> reporter: it's a very good question. everyone involved i've talked to, democratic and republicans at least agreed on one point that it was tense, the understatement for today. the question about tomorrow, eric cantor when he returned from tonight's meeting, he came and spoke with reporters. i asked them that very question, where do you go from here after this dramatic turn of events? i assume we'll be back at the white house and going through these negotiations. an interesting point we did just find out, according to an aide to house speaker john boehner, the short term series of votes on a short term extension jessica was just laying out, a boehner aide says the house speaker would support that, which is also a change of position for him, as both he and cantor for a long time have said only one vote, only one vote,

only one time. this again, on the same page at this point as well, they seem to be pushing for a series of votes. >> go ahead, jess. >> reporter: a tiny bit of news, there is a meeting tomorrow and i'm told the first day the group is to discuss revenues, the big sticking point. so far they've discussed cuts and they will begin to discuss whether there will be tax changes. >> so far, the markets have only had hiccup when the talks are going on. you start talking about the president walking out at the end of the meeting and i don't trust you and these negotiations aren't real. at what point will the markets take a dive? >> reporter: they're worried now. secretary geithner briefed them on the moody's rating and how significant that is. that is a concern all these members at the forefront of their mind and something the white house is keeping relevant to them every single day every