pleasure. >> to you again. >> ali? >> thanks. >> thanks, guys! >> i'm going to break it up here. we are going back to that shot, kiran, of pety. let's go to pety. let's get another shot of pety there. pety will make us laugh! yes. pety, there he is! give us a shout-out. >> our floor director and great crew here. >> pety said to me he is going to learn to e-mail! just so he can keep in touch with me. you know what an honor that is. >> kiran, you know that's why i went there, because pety adds so much joy for you guys and he has made you laugh and being a big part of making the mornings special for you. we want to leave on an updetroit note. good luck to you, kiran. it's 9:00 a.m. on the east coast and 6:00 a.m. on the west coast. i'm kyra phillips. a race against the debt deadline. a revolt among house republicans forces a critical vote to be

delayed. police in texas say a muslim american soldier confessed to plotting an attack on ft. hood just two years after a muslim officer shot to death 13 people on that same base. tropical storm don could hit the south texas coast tonight and drought-stricken farmers are welcoming the prospect of up to 7 inches of rain. we begin with that sobering reality check on the debt crisis and just how daunting the challenge has become. in less than four days, the federal government could run out of money and default on its bills. but on capitol hill, the process has taken a huge step back. house speaker john boehner abruptly delayed a vote on his debt plan because of a revolt within his own party. joe johns is in washington with more on the political battle and ali velshi in new york waiting to see how the markets will react. ali, let's start with you. the new gdp number that just came out moments ago. >> reporter: this is going to add a whole new wrinkle. we have seen futures tank this

morning after a very unexpected and not very good result. let me explain to you. gdp is the biggest measure of our economy and we measure how much it's increased over a year, what the increase, what the rate is every three months, we measure the rate. this, for the second quarter, gdp for the united states increased at 1.3%. now, that is substantially less than what we were expecting. expe expecting to be 1.8%. the first three months of this year, we thought that the economy had risen 1.9%. take a look at it over there. turns out it was just up 0.4%. so that is disappointing. it means the economy was much slower in the first quarter than we expected it to be. it does mean it picked up a little bit in the second quarter. let's put that aside for a second. it is affecting markets right now that are already down. the dow more than 450 points for the course of the week. this is it.

kyra, this is as far as the markets are going to let this go. if there is not some sense over the weekend that there is a deal and that there is going to be a debt ceiling increase, i think you're going to see the patience in the markets and markets which are twice as big and investors will send the message to washington you have to sort this out. the debt ceiling has to be increased and figure out how to negotiating on your budget. i think there my might be a vote today will buy them some time. >> is it fair to say sign of a double-dip recession? >> a sign on soft patch in the first quarter of this year. it may have recovered. remember, the first quarter was growth of 0.4 of a percent and second quarter growth of 1.3%. looks like we may have gone down and started to come back up again. so, for now, let's call it a soft patch. i want to go through the entire details. the report just came out. i want to see what else has happened in here.

the first look at this suggests something softened in the first quarter of this year. the first three months of this year and started to come back again. >> ali, we will be talking a lot today. thank you so much. this time yesterday, its passage seemed eminent. now a major staubleg to tuesday' deadline as republicans seem more unwilling as ever to compromise. >> a party that is divided itself has difficulty working with the president or working with us and that is unfortunate and the country is the poorer for it. >> we need to get this right. we need a balanced budget amendment. if it takes us a few days more to make sure we get it right, let's do it. >> joe johns, do you have any idea if we're going to see a vote today? >> reporter: well, we certainly will not see one before 11:00 eastern and other than that, there aren't a lot of redickions i would make from this desk. there are some republicans from the house of representatives saying they do believe there is going to be a vote and the

bottom line really is they may have to go in and change the bill a little bit. you heard that sound bite about getting a balanced budget amendment. this is not something that is going to happen during 2011 in all likelihood because even if you did it in the house and the senate, it would have to go out to the states and so on. but, yeah, they are going to try again and they may have to change the bill a little bit to get the votes they need in the house. >> joe, thanks. he went shopping at a gun store via a taxi cab. one suspicious move that got police thinking something wasn't right. now the awol army private is in jail suspected of plotting to kill ft. hood soldiers. cnn's ed lavandera is in texas. the cops found enough materials to make two bombs. tell us more about this guy. >> reporter: that is the frightening aspect of this story which is early similar to what happened here two years ago when major hassan gunned down 1

soldiers. police say naser abdo had plans of killing more ft. hood soldiers. >> springfield xd. >> reporter: from the moment greg ebert set eyes on naser abdo, he said something didn't seem right. >> he shows up here in a taxi cab. how many people go shopping at a gun store in a taxi cab. >> reporter: the army private spent 20 minutes inside this gun store. they say he acted guarded and asked odd questions. >> he selects these six canisters. brings them to the counter and set them down and asks kathy, what is smokeless powder? well, hello! why are you buying this if you don't know what it is? >> reporter: ebert says abdo spent almost $250 on a handgun magazine, three boxes of shotgun shells and six pounds of smokeless gun powder. >> rang it up. he paid cash.

took his bag and left without the receipt or his change. >> reporter: left without his change? >> it wasn't much like 18 cents, 20 cents. >> reporter: ebert is a retired 20-year law enforcement veteran. it was the old cop's hunch to make him report the suspicious customer to local police. within 24 hours officers hunted him down and unravelled abdo's horrifying and plan. >> we have information as a result of that interview as well as other leads that we're following up on that gives us -- let me finish. let me finish my statement. that leads us to believe that military was the target. >> reporter: police say this attack wouldn't have occurred inside ft. hood like the deadly massacre in 2009 when hassan allegedly gunned down 13 soldiers. instead they say abdo planned on attacking soldiers in popular gathering spots in killeen outside ft. hood.

>> how close was he from pulling this off? >> a good question. i think we would be here today giving you a different briefing had he not been stopped. >> reporter: law enforcement tells cnn bomb-making materials found inside abdo's room inside this killeen, texas, hotel. and literature found in his backpack. ft. hood is still hurting from the deadly massacre two years ago and greg ebert can't think about what might have happened this time had he not called police. >> i would be devastated, especially considered that i might have played some role in someone being injured, seriously injured or killed. that would be very unsettling. >> reporter: right now, the army soldier is being kept here at the killeen police department. but we are told federal charges will be filed at some point and that could happen today. >> i tell you what, the cop's hunch, i think, paid off big-time. ed, thanks so much.

paul steinhauser is joining us for our political ticker. paul, more evidence that next year's presidential election could be too close to call? >> reporter: yeah. a long way away. two polls in the last week showing the same thing, that battle next year for the president, the republican candidate all tied up basically. look at this. pugh research center. the president versus a no-named candidate, generic candidate. it's all tied up with the president with support of 42% and 41% -- or 40% going for the republican. look how it was back in may. what a difference back then. 11-point advantage for the president. i'll say one thing about these numbers. remember, election is over a year away. things change, people change their minds. what is the big factor in all of this? the economy, the economy, the economy, the economy. you were talking about it with ali and this slow recovery. let's talk about governor rick perry. do it almost every morning. he is thinking about jumping into the race for the republican presidential nomination and he speaks at a summit in denver and kicks off tonight about 900

conservative activists there and vote in a straw poll perry is on sunday. keep a close eye on the results and we will report back to you. perry says he could stied is it on a race for the white house later this month or in september. >> we are keeping a close eye on jersey governor chris christie, out of the hospital. is he back to work? >> reporter: out of the hospital and back to morning. this morning, i spoke to his spokeswoman. she says the governor is feeling great and ready for whatever trenton throws his way after a restful night. he suffers from asthma and admitted to the medical center earlier in the day after his inhaler doesn't give him the kind of relief he normally gets when he uses it. a press conference yesterday he plans to work on his weight in the future to avoid this. >> paul, thanks. your next political update in an hour. always get all of the political news 24/7 at cnn/politics.com. coming up, don't be surprised if you run into some

pretty talkative tsa officers at security and don't think they are just being friendly either. new anti-terror techniques about to roll out. a michigan pilot crashes his plane into lake michigan. we will tell you how he survives straight ahead. ♪ let me entertain you

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we are told president obama will make comments an hour from now on the debt ceiling. as soon as he takes it to the mike, we will take it live checking stories across the country. oshkosh, wisconsin. x-16 fighter jet slides off the runway at an air show crashing into the grass. pretty scary moment.

don't know yet what caused it. but the pilot thankfully was able to walk away from it and nobody else injured. in michigan another lucky pilot after 14 hours of treading water, michael trapp survives after crashing his plane into lake huron. >> about six boats went by my after i crashed. i just was waving my sock at this boat going by and by the grace of god, they slowed down. i about started crying when they slowed down. i was like, oh, my god, yes, yes, thank you, thank you! >> amazing. he is still in the hospital and expected to be fine. in orlando, former astronaut l lisa nowak is kicked out of the navy. she was busted for driving cross-country with a car full of adult diapers and receiving other than an honorable discharge. tsa will talk more. what exactly does that mean? well, more interaction with you.

mary is a former inspector general with the department of transportation and works for a law firm that sues the airlines. mary, haven't we actually tried this before? >> we have tried this before, on september 11th, 2001, one of the security measures in place was a passenger prescreening program, but it was run by airline personnel. intooe indeed, atta and others were picked out as being suspicion ubut nobody reacted. it could be effective in a different way now. >> we are waiting in such huge lines more often than not. isn't just this going to bog down the security lines even more? >> no, not if the tsa does it right and, obviously, our safety depends upon them doing it right. what these officers will do, and it's important that they are trained officers for two reasons. one, they need the training to actually be effective, two, they need to be officers so people can respond to them, but they need to fan out throughout the airport. they won't be slowing people

down in the waiting line. they might question you while you're waiting in line to go through security and can question you at the ticket counter or unloading your car. the point is they are able to talk to people all throughout the airport if they think anything is suspicious and they will be empowered to act is the problem on september 11th, 2001. people found things suspicious about passengers but they didn't act and didn't feel empowered to act. >> if we are adding this extra layering of screening, if you will, could that possibly mean we would have fewer metal detectors, maybe a little less tsa touchy-feely moments? >> no. the important thing about our security program, because we are so large. everybody talks about it's great but they are tiny compared to us. we have, you know, 450 airports and millions more passengers every day. so what it will mean as we are adding additional layers and our whole philosophy. we have a layered security approach if terrorists get through one layer the next layer will catch him or her.

the important thing we want all layers in place. if one doesn't get you, the other one will and the whole theory behind our security. >> mary schiavo, thanks. amy winehouse parents head back to her home and surprise the singer's fans with special gifts. >> he has looks and fame and money and now prince harry has his own comic book. the royal wrap-up is next. ..

amy winehouse parents shock her fans. they started handing out the singer's clothes and shoes to the crowds still gathered outside her home. her dad mitch told them, quote, this is what she would have

wanted. ashton kutcher is front and center in the "two and a half men" photo there. it is similar to the old photo with charlie sheen. speaking of charlie sheen. denise richards said the actor had been sober three years when they met and fell in love and she says if anyone can make a comeback, charlie can. super-man, spiderman, the hulk and now the hunk. zain verjee has the hottest new comic book. is he a hero or more about his life? >> reporter: it's about his wildlife. blue water production is saying it's time to focus on the willed child. he has been making waves around the world and it's about time he got his own comic book. he has his own castles and his own horses but he has to have his own comic book.

they actually came up with one about prince william and his bride, kate middleton as well. so this is going to be his royal hotness harry. a comic book for himself. it's going to cost almost $4. 32 pages. we will see if he is a hero or not but he is a hunk, right? >> royal hotness, i like that. that is the new term. speaking of hotness. i mean, you know, there is all of this talk about prince harry and pippa middleton. any more scoop there? i know you've been on this beat. >> reporter: yeah, following this beat very closely. by the way, pippa middleton is in the tabloids called p. middy. >> does she rap? >> reporter: this is a documentary that is going to air on tlc on tuesday of next week, august th and called crazy about pippa and saying all of this juicy details about her

relationship with harry where he apparently calls her a foxy filly. i don't know if it gets more salacious than that, right? it will be interesting to watch. friends are talking about her. she is going to be the sister for the future queen of england. people are interested of a sense the royal wedding that pippa is such a big hit and call her her hotness and we will see what comes out in that documentary. i mean, they are both denying there was anything between them. there is no romance. it's just not happening. >> it does seem like another great couple. we can talk about how beautiful she is. we should point out she is also extremely bright so shout out to that. zain, thanks. the nation's debt crisis, another setback, another reason for investors to worry. minutes from now we will go to wall street for the start of another pretty nervous day. a new york couple says that americans shouldn't depend on congress to solve the debt crisis. they want the public to step up and help out. [ man ] this is my robot butler.

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next hour, president obama planning to give a statement on the status of the debt crisis after john boehner called off a vote on his plan after it appeared he didn't have enough votes. in norway, holding a national memorial service for the 76 people killed in last week' bombing and shooting massacre. new dosing labels for tylenol this fall. the makers of the painkiller recommending the maximum dose that extra strength tylenol be lowered to help prevent overdosing of acetaminophen. likely a working weekend on capitol hill as lawmakers race to get a debt deal completed by tuesday and a challenge that faces long odds. gop infighting and the house delayed a critical vote now. the process has gained little ground. shall we say in the weeks that we have been covering this

story. dan lothian at the white house. we just heard the president will speak next hour. what do you think he'll say? >> reporter: he is going to be talking about the latest developments, if there are any, in this debt crisis. you know, the president has been criticized over the last few days for not being more engaged by some republicans up on the hill. the white house has pushed back saying the president has been very involved in the very beginning. you heard from chief of staff bill daley yesterday saying essentially how much more could he get engaged than he already is? the president coming out after the 10:00, around 10:20 or so to make this statement on the latest movement in the deted negotiations. what i can tell you, according to a senior administration official, is that conversations continue. we tried to pin him down what that means. are they having sort of negotiations on another plan? is this more than just talks? all they are telling us, the conversations continue between

the white house and capitol hill. but the sense here is that there is room for compromise, that they can find something between what the republicans are pushing and what the democrats are offering. take a listen to what communications director dan pfeiffer had to say. >> we are spending hour after hour here waiting for the republicans to twist arms for a vote that is essentially irrelevant, because as soon as they pass it, if they are able to, the senate will vote it down and we will have to get back to the table and get something done. >> reporter: the mood here at the white house, according to a senior administration official, is one of frustration. they saw yesterday as essentially wasted time, that the clock continues to tick and that there was no big movement that took place. and one official here at the white house confirming that the president has been getting no sleep at all. as he really tries to figure out what are the options that they have available to them to prevent the nation from going into default. >> dan lothian at the white house, thanks.

as dan just mentioned next hour, we will hear from president obama, he is due to speak on the debt crisis. the rapidly approaching deadline. so 10:20 eastern, we will carry that live. allan chernoff is at the new york stock exchange where investors are getting a pretty big report that looks how the entire economy is doing. allan, good? bad? kind of in between? >> reporter: not too good, kyra. we are slowing down. a lot of people suspected this was happening, but we got a terrible revision, in fact, first quarter. let's break it down. let's have a look at a graphic. the economy grew at a 1.3% annual in the second quarter of the year. that is slower than expected and it's also way slower than normal growth for the economy and much, much slower than we need to grow jobs significantly. even worse, have a look at that first quarter revision. down to a growth rate of just 0.4%. that is a major revision,

because the prior estimate had been growth of nearly 2%, so that's a big pull-back and shows that things were not very good during the first quarter at all and what happened there is that consumer spending really pulled back, gas prices were high, the japanese earthquake hit, that also hit the auto sector. so we had a lot of trouble during the first quarter. not looking too good right now either. kyra? >> we are looking now at the opening bell ringing just behind you and we will see how the markets respond. of course, the smurfs! could we expect nothing less? >> reporter: no doubt there! >> exactly! >> reporter: at least we're getting a little happiness from the smurfs. >> we are going retrohere on the new york stock exchange! that is taking us both back, all allan. we will talk in a little bit. you want to check on the markets before we go? already down, yes? >> reporter: that's right. the dow is off at the moment by

78 points, but keep in mind, it takes a few minutes to open all of the stocks on the exchange so we haven't felt the full impact. as i'm speaking, more stocks are opening. the market moving lower. obviously, as investors anxious, not only about the economy, but very much so about the debt ceiling stalemate. it's becoming a serious problem for investors. the beginning of the week? they were confident a deal would be struck. now? not so much. >> dow industrials down 98 points there. allan, thanks. a new york couple said they are fed up with the games in washington so come up with their own plan to budget the country's budget. seth and terry eisenberg have created a nonprofit organization asking americans to donate money to help lower the nation' debt. then said, in turn, they will just send the checks straight to the treasury department. take a listen. >> i felt like we were used as pawns in their chess game and i felt americans needed to unite

together to help resolve the situation. if 1 out of every 4 americans gave up a couple of cups of coffee every month and donated about $5 a month to reduce the national debt, we could raise $4 billion a year. >> the eisenbergs say in the past month, they have already received thousands of hits to their facebook page, not to mention donations. the welcome mat is out along the texas gulf coast for tropical storm don but will it be enough to quench the drought-stricken state? we are live from there next. sighting of polar bears in arctic writers. a report has now been suspended over a report. find out why after the break. we invented the automobile. ♪ and 80,000 patents later, we're still reinventing it. ♪ it's no coincidence that the oldest car company has the youngest and freshest line in the luxury class.

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beach. cheapest cost is about $1,300. in new york, police say a man dressed as an armored truckdriver robbed a check cashing store of almost $15,000 without arising suspicion until hours later when the real armored truck officer arrived for the scheduled pickup. north of the border new dad david webber won't forget the day his daughter was born. he rushed his wife to the hospital at speeds of more than 100 miles an hour for an emergency c-section. guess what? got a hefty fine and a license suspension in the process. well, doctors even told the jum his wife's pregnant was high-risk. but the judge was unmoved. rarely will you see people put out the welcome mat for a rain-soaking tropical storm you but folks along the texas gulf coast are doing exactly that for tropical storm don. rob marciano is live on padre island. what do you think? still a midnight eta?

>> reporter: that's about right. and, you know, this is one of the few times we got a positive spin on a landfall tropical storm cyclone because we do need the rain, as you mentioned. tourists here, sun is out. just gives you an idea of how strong the storm is going to be. not very as far as winds are concerned. these are people who are on vacation. nobody has evacuated the beaches if they have come here to soak in the gulf and the clouds have yet to arrive here. they will be coming in this afternoon as will the rainfall. the beneficial rainfall. take a look at the satellite picture and somehow the whereabouts of tropical storm don which has winds now currently at 50 miles an hour. slow to organize. has things working against it but it's over warm water now. we expect it to strengthen somewhat but should remain below hurricane status. right now about 250 miles away from the coast where i stand and moving in this direction. here is the eta, the forecast from the national hurricane center. the track brings it somewhere between here and brownsville around midnight tonight.

just below hurricane strength and moving off into west and central parts of texas. so at this stage of the game, it looks like a coastal impacts from wind and storm surge and will be minimal. the beneficial impact of seeing some rainfall inland they won't be maximum, but they will get a little bit and they need it as you mention. >> keep talking, rob. thanks. getting america's financial house in order. all of the bickering. >> thank god congressmen like me were here. imagine, step back and imagine if the republicans hadn't taken over congress. this city would have raised the debt limit, who knows how much! >> here is the problem. some of these guys aren't practicing what they preach. we will tell you about that straight ahead. don't forget, if you're walking away from the tv, it doesn't mean you have to stop watching. you can keep streaming us live on your phone, computer, ipad. cnn.com/video. or you can just download the new

app and go. yes, you're seeing a little bit of a delay, but, basically, you go to cnn.com and hit live tv and choices pop up and hit "cnn newsroom" and there you go. let's listen in to harry reid. i'm being told he just took to the floor talking about debt ceiling. let's go. >> no one knows what the interest rate will be tomorrow. so the republican plan is not a solution. as experts say, all too soon, we would be back in the mst of part sal wrangling with our economy once again held prisoner by extremists and the party, the republican party, led by the tea party. our economy cannot bear this kind of uncertainty any longer. congress and the white house are on lockdown and the business the country is not being conducted. i say no, not again will we fight another battle like the

one in which we are now engaged. we can't do that and why a short-term extension is not what we need and it's not what this congress will do. mr. president, default is not an option either. but we cannot wait for the house any longer. it's time for republicans to stop the political games and embrace compromise. no matter how long republicans delay, a deadline will not move. we have hours. i repeat, hours left. that's why, by the end of the day of today, i must take action on the senate's compromised legislation. a legislation point would cut 2.5 trillion dollars from our next decade and avert national dedebt and raise medicare and medicaid. will republicans break away today from the shrill voice of the tea party and return to the republican party of ronald

reagan? this is likely our last chance to save this nation from a default. i've invited senator mcconnell to sit down with me and negotiate in good faith knowing the clock is running down and i hope he'll accept my offer. i can't do this alone. but it's only 53 of us and under the rules that republicans have put in place, used sparingly but used all the time now, we need 60 votes. the majority is not good enough. i know the senate compromise bill democrats have offered is not perfect. in the eyes of the republicans, it's not certainly perfect in the eyes of the democrats. but together we must make it work for all of us because it's the only option. settlement on the table will gever either party everything at once but it already meets republicans demands. john mccain, republican senior senator from arizona and president obama's opponent in last presidential election, has asked his party to compromise

and here on the senate floor, he said it is not fair for the american people to hold out and say we won't agree to raising a debt limit. he called the radical republican approach unfair and bizarreo. it's time we listen to the markets, he said. it's time we listen to the american people and sit down and seriously negotiate. former senator fred thompson who i served here in this body, a republican, asked members of his own party to come to their senses. quote, i respectfully suggest that you rake in your chips and stuff them in your pockets. that was his quote. he believes they already won. all discretionary spending, no revenue. i hope, my friends, senator mcconnell will come to me by the end day and construct what ideas he has. my door is open. i'll listen to any idea that prevents a default and a dangerous downgrade to our country's credit rating.

time is present and it's short and that is an understatement. too much is at stake to waste even one more minute. the last train is leaving the station. and this is our last chance to avert a default. the vote on this compromise will determine whether we enter the frightening world of default. a vote for the senate compromise vote on the financial obligations of this great nation to pa their bills. i would ask ask my republican friends, break away from this thing going on in the house of representatives. they are voting at 4:30 yesterday, 10:30, finally quit. rumors flying around, mr. president. rumors flying around. "wall street journal" said they put too much money -- take that out. rumors need a balanced budget -- take that out. rumors -- speaker seen in my office. he didn't come. all of these rumors, mr.

president, that made no sense. and the scariest thing is late last night, leader cantor said from the house, he said you have three choices, boehner, cut, cap, and balance, or default. that is a second ranking member in the republican leadership said that. we need to honor the financial obligations we have as a country. so a vote against the compromise that i've talked about -- now listen to what my compromise is, mr. president. no revenue, congressional budget office has is skorted more than 2.4 trillion dollars which will take us to march of 2013. we can do the country's business. there is a joint committee that will be set up to see if we can do some good work on a more long-term approach. and get back to work doing our country's business.

i repeat. cbo, omb has scored our bill for more than 2.4 trillion dollars. not billion. trillion dollars. it's dollar-for-dollar. as the speaker said he wants to reduce the debt. so a vote against this compromise will be a vote to default on the full faith of credit of the united states. i repeat to everyone within the sound of my voice. we have the framework of a bill. we are going to change it. i have some ideas that we need to change and i want to discuss them with the republican leader. if anyone has any other ideas, come to me. but the time has come to make a decision. the time factors are very clear. why am i filing tonight on my bill? why? there is no more time. i have to do it tonight. would i like to wait tomorrows for if there is goodwill that comes from the republican side? of course, i would you but i

suggest to my friends on the other side of the aisle this is a pretty good deal. they, in effect, as fred thompson said, have gotten everything they want and should put those chips in their pocket and walk away and declare victory. there will be no time left to vote on another bill or consider another option here in the senate. this is our last best chance to preserve the character and credit of our great nation. wisconsin wou >> would our colleague yield for a question? >> be happy to. >> i thank our leader. and leader has outlined it well. the house for all its dela nowhere because their bill will not pass, not become law. 53 of the 53 democrats have signed a letter saying they won't vote for it. the president has said he'll veto it. all for a very simple reason and that is because if you do this

short term, you don't calm the markets. >> take a look at that as we are live from the floor. if you are watching the numbers as senate majority leader harry reid was speaking the numbers continue to tank. dow industrials down 140 points right now. harry reid saying no more time this is a pretty good deal. he was reiterating how the house plan is doomed in the senate. default not an option here and that it's time that we must embrace compromise. just watching -- as you can see, joe johns, you were probably following this as well. out of washington, you saw as harry reid started talking' as he started talking more about a doom's day scenario, the numbers were tanking more and more. it goes to show americans paying very close attention to what this all means for our pocketbooks. >> reporter: yeah, absolutely. and the thing he also talked about was trying to go to the

republicans on the senate side and get some kind of an agreement. he also made some reference to what was going on over in the house side. and they do have sort of some basics that they can work on. i mean, it's stuff like whatever plan they get can't have any tax increases in it. whatever plan they get -- i have a little list here -- don't touch entitlements is something the democrats say. the democrats say we can't have two-step process where we got to go back and revisit this thing again. so there are the outlines of things they can agree on and while the house is still trying to get its act together, obviously, senator reid has said it's time to move, because there is no more time. so he is reaching out to senator mcconnell, the republican leader, saying, it's time for us to strike our deal because august 2nd is fast approaching. >> yeah. the president of the united states set to talk about the debt ceiling 10:20 eastern time.

we will be watching it and we will take it live for our viewers a half an hour away. we will be right back. more from the "cnn newsroom" straight ahead. ok. [ cellphone rings ] hey. you haven't left yet. no. i'm boarding now... what's up? 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 ]

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vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. auto insurance is often handed down from generation to generation, because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto insurance quote. u.s.a.a. we know what it means to serve. we may have a hard time giving you a fresh take on the debt ceiling debate, but not late night comedians. >> the just government is just a few days away from running out of money to pay its bills.

unbelievable. congress' latest plan is to see how much cash they can get for john mccain on antiques road show. one liners aside, there are some members of congress that are just not practicing what they preach at this time. brian todd explains. >> reporter: they're the fire brand class, hawks in congress taking a hard line on the debt ceiling talks. some are tea party favorites who rail at congress for past spending like republican senator mike lee. >> congress has been burying our children and grandchildren both born and unborn under a mountain of debt. >> reporter: but according to recent disclosure form, senator lee's racked up significant personal debt of his over, at least $65,000 from a credit card and line of credit. the forms show there are a few republicans who are demanding a hard line on cutting the nation's debt but have plenty on their own. taxpayers for common sense --

>> i think this raises questions about are you walking the walk while you're talk the talk about getting the debt down. >> reporter: senator lee's argument, you have on put this in context. an aide said the senator couldn't do an interview with us, but the aide did push back hard saying the scrutiny is crack pot. the aide says the senator has his finances in order, is managing his debt responsibly and that about he's doing that, who are the critics to question his role in the budget debate. republican congressman joe walsh has played a prominent role. >> thank god congressmen like me were here. imagine, step back and imagine if the republicans hadn't taken over congress. this city would have raised the debt who knows how much. >> reporter: but walsh's esks wife says he needs to pay occupy a big debt, more than $117,000 in child spupt according to a lawsuit. we couldn't reach walsh's attorney for comment. but he told the "chicago sun-times" walsh doesn't owe that amount. walsh says the attacks against him in this case are false, but also says this. >> i'm the most openly vetted

candidate in the world. i have had financial troubles and i talked about them throughout the campaign. this is where real america is. >> real america listening to the floor right now as mitch mcconnell now takes to the mike. >> the democratic majority here in the senate has been wasting precious time rounding up no votes to keep this crisis alive. rather than being responsible and doing their duty and come up with a bill that can actually pass, they've been busy signing people up for the not good enough caucus and getting opposition to everything else. lawmakers should be working a solution to the crisis, not a blocking strategy. our democrat being friends have offered no solution to this crisis that could pass either chamb chamber. not one. instead all day long we got chest thumping comments about how we're going to kill any piece of legislation that comes over from the house, that it's dead on arrival.

democrats are out bragging about about how they're going to proceed honk the crisis instead of doing the hard work of trying to solve it. and that includes the president. look, if the president hadn't decided to blow up the bipartisan solution that members of congress worked so hard to produce last weekend, we'd be voting to end this crisis today. instead, democrats in congress are still talking about blocking a solution to the crisis and the president rolling out new mileage standards today. let me repeat that. here we are a few days from when the secretary of the treasury says we will be in a default situation and the president of the united states is rolling out new mileage standards. how about this? how about a plan from democrats in washington that can pass both chambers, prevent the krir sis and protect americans from a worsening economy. i would suggest to my friends on the other side this morning they start taking their responsibilities as the majority party a little bit more

seriously because at this point the only people who are disregarding the consequences of default are senate democrats, not the republicans in the house. but senate democrats. republicans have been doing the hard work of governing this week. it's about time our democratic times joined us. mr. president, i yield the floor. >> you heard harry reid, now mitch mcconnell. as you can see the dow industrials up and down. the president of the united states speaking in about 20 minutes live. we'll take it for all of you here. quick break. discover customersl are getting five percent cashback bonus at the pump... and at many of the places their summer plans take them. it pays to switch, it pays to discover.

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it's almost 10:00 a.m. on the east coast. 7:00 a.m. out west. thanks so much for joining us. a stunning set back in the race against the debt deadline. a revolt among house republicans forcing a critical vote to be delayed. meanwhile president obama about to speak just minutes from thousand. we will carry it live. police in texas say a muslim american soldier con if heed to plotting an attack on ft. hood just two years after a muslim officer shot to death 13 people on that same base. tropical storm don could hit the sought texas coast tonight, farmers well coming the prospect of up to seven inches of rain. and this morning a sobering reality check on the debt crisis and just how daunting the challenge has become. in less than four days, the federal government could run out of money and default on its bills. but on capitol hill, the process has taken a huge step back. john boehner abruptly delayed a vote on his debt plan because of a revolt within his own party.

we're covering all angels. dan, let's start with you. the president about to speak in 20 minutes. i think we can all expect what he'll probably say. >> reporter: that's right. i was talking to a senior administration official a short time ago and what we can expect from the president is to continue to express in a short statement a sense of urgency and the need for both sides or all sides, i should say, because there's a lot of division among the republican caucus, all sides to reach a compromise. and then for the president again to spell out the economic consequences if, in fact, an agreement is not reached by that august 2nd deadline. over the last few day, there have been some up on capitol hill critical of the president not being an differencely invol actively involved in the process. this is the first time we've heard from him this week since the monday prime time address,

but the white house pushing back saying the president has been very involved, there that there are conversations happening behind the scenes and that those conversations between the white house and capitol hill continue today. >> well, what's the latest on the house voting on the boehner plan? >> reporter: good morning. we know things are changing minute to minute. the house is having a special gop conference at this moment. they're going to figure out how things are going to go the rest of the day. they've been trying hard to rangel the votes, so what does it mean. i had a gop describe that the republicans were relatively close to the votes, but we don't know the sxagt number. we'll have to see what comes out after the 10:00 a.m. conference meeting. >> the talk has been that any plan that involves revisiting the issue in six months would have a presidential veto. any give on that to get the process moving? >> reporter: not at this point, but as the hours continue to tick down and everyone realizes that the alternative is the

country going into default, it's unclear exactly whether or not the white house would change its position at this point. the president and top democrats have made it very clear that they do not buy into this sort of two phase plan whereby you raise the debt limit for the rest of this year and then you have to be dealing with it again in december during the holidays, an important economic time for the country. they say that's not the way to do this. they want it long term through 2012. that's the position of the white house. it's unclear if that will change. >> dan loathian and athena jones, thanks you both. and athena, big welcome to you. and president obama due to speak at 10:20 eastern. we will carry it live. the debt crises has pushed the har dote five straight days of losses. but now a government report shows the economy may be in

worse shape than we thought. allan chernoff from the new york stock exchange. we were watching when harry reid was speaking on the floor, the numbers continued to take a dive. right now dow industries down 107 points. >> that's right. on top of all this concern we have regarding the debt ceiling, now we get bad news about the economy. this is looking back, okay? for the last quarter, we had growth of only 1.3%. that is very, very slow. the traditional rate is closer to 3%. that's what we need to start to improve the employment situation. we're nowhere near that. and then back to the first quarter, real revision there, the economy was barely moving at all pap growth rate of only 0.4%. now, let's look forward which is what the stock market normally does. when you add in this entire debt crisis, gridlock in washington, that leads investors to want to pull back from risk.

it leads consumers and corporations to want to pull back from spending. nobody wants to make commitments. and what happens? the market tanks and the economy is in danger of slowing down even more. so that's what the stock market is telling us right now. things going forward look even worse than the economic reports we've just gotten. that's why we're seeing red all across the board right now. >> economists have been saying that we're in this soft patch. so could it be worse than that, do you think? >> it certainly is possible. i mean, the sooner that washington gets its act together, the sooner we reduce that risk. but right now, this is all that wall street is talk about. so major investors talking to their advisers, talking to the economists. that's what they're all concerned about. it's really raised a lot of concern and already we've had many companies cautious and not

willing to spend. corporations have tremendous amounts of cash on the books right now. they don't want to commit. they want to know that the economy is going to be getting better, that their profits will continue to grow. it's hard for them to have failt in that in the u.s. government can't even pay its debts. if it can't pay everybody who is owed money. so a real concern here. >> no doubt. all right, allan, thanks so much. just when you thought the rupert murdoch scandal had settled down, more disgraceful allegations surrounding news of the world tabloid. zain verjee has been following the story, getting a lot of buzz in the papers. and it involves another relationship with the mom of a slain girl in britain? >> yeah, it does. this stuff continues to drip out. sarah pane was the mother of a murdered british girl and it turns out now that her phone was

targeted by a private investigator who was working for the news of the world which as you know has been closed down with this whole crisis that has happened over the phone hacking scandal. sarah became a pretty prominent activist after her daughter was murdered. she's saying she can't believe that this has happened and in the very last edition of news of the world, she actually even wrote a column for them and said amid all the criticism, news of the world has been a force for good. the police have confirmed that she was a target of phone hacking. she also had a very close relationship with rebekah brooks, former editor of "news of the world" and former executive of news enter natiint. the yardi guardian newspaper reads fresh test for friendship. it says one woman was an ambitious young tabloid editor,

the other a grieving mother who had just lost her 8-year-old daughter in the most horrific circumstances imaginable, but over the next decade, rebekah brooks and sarah forged a close relationship that started as a professional al partnership, but became a close friendship. rebecca brooks has responded on to this story saying it's abhor rant and news international has said that they're really concerned about this and this will be investigated. >> my guess is this will definitely not be the end of the scandal. zain verjee, thanks. want to remind you once again president obama due to speak on the debt crisis in just a few minutes. 10:20 eastern time. we will carry it live. . also the texas gulf coast bracing for tropical storm don, but will it rain enough to quench the drought stricken state? ere's been a 67% spike in companies embracing the cloud-- big clouds, small ones, public, private, even hybrid. your data and apps must move

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checking stories cross-country. in oshkosh, a fighter jet slides off the run way and crashes in to the grass. don't know what caused it, but the pilot walked away from it. in michigan, another lucky pilot after 15 hours of treading water, michael trapp survives after crashing his plane in like huron. >> at most six boats went by me after i crashed. by the grace of god, they slowed down. i about started crying when they slowed down. i was like, oh, my god, yes, thank you. >> expected to be fine. lisa nowak being kicked out of the navy for confronting a romantic rifle after driving

cross-country. she's receiving an other than honorable discharge. he went shopping at a gun store via a taxi cab, it got police thinking there wasn't something right with this guy. now the awol army pry haven't is in jail suspected of plotting to kill ft. hood soldiers. ed, as cops investigated, they tracked i guess materials that could have been enough to make two bombs? >> reporter: that's right. that's what we've been learning over the last 24 hours since this story first emerged. but private first class nassar abdo is just a short time from making his first court appearance. according to investigators, authorities found in a hotel room that he was staying here at here in the area bomb make materials, islamic extremist literature, and it all stemmed

from a tuesday afternoon advice i visit to a local gunshot where he walked in, started purchasing gunpowder, shotgun shells, a magazine for a pistol, but the whole situation didn't sit quite right for the man working behind the counter. a 20 year police veteran, a retired 61 years old, said something just didn't seem right. and after he left, he called authorities and told them about this man's visit. >> he shows up here in a taxi cab. how many people go shopping at gun stores in a taxi cab. he paid cash, took his bag and left without the receipt or his change. >> left without his change? >> yeah. wasn't much, 18 cents, 20 cents. >> reporter: authorities say that his plan was to attack soldiers off the ft. hood base.

a little different from the attack that happened here two years ago when imagine hthat hasan gunned down 13. if it hadn't been for mr. ebert, the press conference would have been much more tragic. >> greg ebert is a hero indeed for just having suspicions out there. ed lavendera, thanks. rarely does the welcome mat go out for a tropical storm, but people in texas are doing just that. rob, still expecting it this about midnight? >> reporter: midnight for the actual landfall of the storm, butt rainfall will come in ahead of it. obviously we have beautiful sunshine, fairly tranquil gulf, although the surf has come up. vacationers are still here. there's really no need for evacuation. coastal effects will be minimal. winds maybe 50, 60, maybe 70

miles per hour. but the rain will be the big deal. here's where it is on the satellite picture. 50 miles an hour winds, heading in this direction, so should be here midnight tonight as far as actual landfall at the center. the expected landfall somewhere between here and brownsville, texas and again most of the action will be overnight tonight and tomorrow. rainfall will be significant, but not as widespread and not as significant as most would like. some of our computer models saying two to four inches. if we can get it all the way to west text texas, even better. over a foot deficit this places like san antonio and austin and houston. places like lubbock and midland have seen virtually nothing as far as what they normally see, so they'll take the rainfall that they can get. there have been evacuations from some of the oil rigs, nonessential person nenel from

exxonmobile have evacuated some businesses, but other than that, we're waiting for the storm to arrive. it was around that time last year tropical storm hermine missed the area to the south. they're hoping don doesn't miss. one of the few times where people are begging for a tropical cyclone. >> yeah. quite a twist. all right, rob, keep us updated. all right. president obama due to speak on the debt crisis at 10:20 eastern. just about five minutes away or so. we'll carry his remarks live. [ diane lane ] is your anti-wrinkle cream gone...

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the nation's debt crisis has brought capitol hill to a standstill and is bringing the president to the microphone. he's due to speak at any moment. possibly about three minutes or

so. of course all our troops are if place. kate bolduan out on the hill, wolf blitzer in washington. wolf, what do we expect to hear from the president? >> i think the president will underline the urgency of what's going on. that clock is ticking and there's not a lot of time left right now. at stake is not only america's credit worthiness, actually paying bills to a lot of folks out there come tuesday, wednesday, thursday, they're going to have -- treasury department already has contingency plans in the works. who will get paid, who won't get a check. they obviously will take care of america's debt, the interest on the international debt obligations first and foremost. they'll pay the military, they'll make sure that social security checks are going up. but a lot of agencies will simply have to shut down for the time being, they won't be able to get the money to pay the employees the federal employees and others and there will be enormous ramifications if the credit rating agencies decide that aaa rating that the united

states government has right now, it doesn't belong, that means interest rates will go up, it will have a direct impact on people all over the country and a spillover effect all around the world and i think the president will underscore that and urge the house and the senate, you know what, you just got to do it. you got to do it quickly. the big issue for him right now is to avoid what the house speaker john boehner wants. he wants whatever they do in the house and senate to get the debt ceiling raised through the next election into 2013 to avoid this kind of political economic disaster that could take place in a few months. i think that's the big issue stand management wing in the wa. >> we're fwatalking about mortg, credit card, car loans. that's why americans are paying

such close attention. we watched the dow industrials go down, down, down. and the numbers aren't doing any better at this moment. right now dow industrials down 107 points. >> and you remember because we were covering it at the same time, back in 2008, october 2008, just before they passed t.a.r.p., it failed in the congress. the emergency economic recovery funding that was needed at that time. it failed and the market collapsed 700 points in a day. some are saying, you know what, they're going to need to see that kind of action, that kind of drop on wall street, might even see is it today. i hope we don't, but if we see it today, that would spur the house and senate. this will be a tumultuous weekend. they're going to be urged to do something to come up with some sort of compromise and get this

job done. i suspect by tuesday morning they will have some sort of if not a band-aid, some sort of temporary solution to move on. even if it's only for a week or two or three just to get over this immediate bump and then dealing with the longer term fix. but they can't go into tuesday without an agreement to raise the debt ceiling because the consequences would really be eno are mus abo enormous. >> and the president expected to step up to the mikes will. tell speak live on the debt ceiling. we will carry those remarks live. it's now 10:21. >> let me just say one other thing. you see where the white house decided to make -- have the president make that statement in the diplomatic reception room and there's a bunch of camera crews and reporters there. he's not in the white house briefing room where after his statement he would be open toness aing a few reporters questions. in an environment like this paced on the years when he i

covered the white house it looks leak he'll ma le like he'll make the statement and say thank you very much and leave. i'd be surprised if he answers questions. my suspicion is he'll make a statement and then he'll walk out of that room. >> wolf, you're watching this along with us waiting for the president to step up to the mike there. kate bald rin is olduan is on t. what more you can tell us? obviously as i mentioned we've been monitoring all the members speaking on the floor there and taking that live as the clock is ticking toward that deadline and toward the president who is speaking any second now. >> reporter: one thing that we're keeping our eye on here on the hill is a meeting of house republican members that is going on right now. this was announced late last night after clearly things fell apart and house republican

leaders could not wrangle the votes as the bill stance. so they're having a closed door meeting right now and we're told that in this meeting they'll be talking about the path forward. deidre walsh, my colleague, was told one thing that will be discussed is how to tweak the bill, possibly tweaking the inclusion of a balanced budget amendment and what role that would play in this measure. this is something that house conservatives have been calling for. so we need to wait unlg they come out of that meeting, but it will be very interesting to see if they have's reached any decision, if tweaking boehner's bill as it stands and how they will proceed with that. but that's one thing we're keeping an eye on here on capitol hill. on the other side of the capitol, i'll tell you we're also keeping an eye on the senate because senate majority leader harry reid who just took to the floor this morning and said he -- they're not waiting any longer and he's now going to proceed with his bill or a

modified version of his bill. they'll start the legislative ball rolling today filing closure is the technical term that would set us up for a first test vote on this measure, on his measure, for a 1:00 a.m. sunday morning vote. of course they can come to a gentleman and lady's agreement to move to a more reasonable hour, but you can see that they're moving very, very close to this deadline now. >> wolf, how much more tweaking can you do? >> not a whole lot because they have to get lenggislative vehic passed in both chambers that the president can sign. and there's in the a whonot a w room for grand maneuvering. you heard harry reid, he came up with his plan, it's been scored by the congressional budget office. it would raise the debt ceiling through all of next year into 2013, about it $2.5 trillion in

proceed corrected reduction in debt and spending. . but a trillion of that is already basically part of the deal because it includes the reduction in spending for the wars in iraq and afghanistan. so what the republicans have been saying, some of that math is fuzzy and they want deeper cuts. but the great concession that the democrats already made to the republican, harry reid pointed it out, and the republicans should see this as a great victory, there are no tax increases at all, no tax changes, no revenue increased from any tax reform in harry reid's proposal. so on the issue of taxes, the republicans have already won. it's a major victory on their part. the democrats are no longer seeking any increase or any changes, any elimination of tax loophole, any of those controversial tax aspects. so it's a major concession on the part of the democrats. they need it in order to get some sort of deal through.

and the white house has accepted that, as well, reluctantly because you heard monday night in the president's speech how much he wanted increased revenue from changes in the tax laws. so they made a major concession already ander that's hoping that will be enough to get a combination of moderate democrats and republicans when all the dust settles to support this in order to revert what could be some sort of economic real disaster. >> dan loathian, you're at the white house. the president was supposed to six beginning six mecinutes ago. what's the hold up? >> reporter: we don't know. we expect him to come out at any moment now. but to reinforce what you were talking about, an official told me not expect anything new from the president in his short remarks, but really to reinforce what he has been saying now over the last few weeks. and that is to essentially express a sense of urgency, that there is an opportunity here for

both sides to find some kind of compromise. and then to lay out the consequences, the economic consequences of what will happen if there is no agreement. you've been talking quite a bit about that, about not being able to pay social security payments or disability checks, figuring out who gets paid and who does not. the president again will be talking about that. and putting pressure on congress to act quickly as the clock runs out. >> and harry reid about 40 minutes ago pretty much laying out that he feels the house plan is doomed. let's go back to the floor and it take a listen. >> abandoning an approach is an embarrassment to congress, frankly, the country and the world. and that's a sad commentary. the 53 democrats have informed the speaker it was doomed in the

senate because we would not vote for a short term extension of the debt ceiling. >> wolf, harry reid using the word embarrassment. as you know in the past couple of weeks, we've heard a lot of various leaders around the country questioning our street credit. >> people all over the world have been watching what's going on here in the yunz and they're really stunned. i was speaking to richard quest there london the other day, but i was speaking to our correspondents not only in europe but in asia and africa and south america, they're really worried because when the united states has an economic crisis like this and the credit worthiness of the united states is even questioned, there are enormous ramifications for those countries as well, the u.s. is the world's largest economic super power. so anything that undermines america's economic strength automatically undermines so much of the rest of the world, as well. and they're watching this really, really nervously.

they just simply assume this there's going to be a deal by tuesday because the consequences of failure are unthinkable to them and so many other people around the world. and most people in the united states think this is washington pollices, they're bickering, they're obnoxious, if you will, but in the end of the day, they'll have to make a deal. they probably will. i'm pretty confidence that they will, but i'm not 100% certain by any means given the positions that have been staked out even though when you take a look at the boehner position, which he can't even get enough votes without democrats, under normal circumstances, could you craft a compromise, you could have a house and at some conference committee, they could work on a middle of the road compromise and it would get not necessarily unanimous passage, but could you you could get the majorities to

come up with something. but this is not necessarily the normal environment that those of us who have covered washington all these years have come to see. so it's unpredictable. it will be a long weekend for all of us. a lot of nervousness will go on. in the end i suspect they'll work out some deal, butbe complicated. >> we're seeing all the finger pointing. you've got people like john mccain saying you've got these young people, they're inexperienced, look at what they're doing to the process and they're coming back saying, no, it's people like you, john mccain, to that know better, you shouldn't be doing this. now age and experience is getting thrown into the mix. >> well, it's not always just age because you have a guy like ron paul, the congressman from texas, he's in his 70s just like john mccain, and they totally disagree. so it's not always completely age, but you're right, there are 80, 90 freshmen republicans, many came in with a lot of tea

party support. and they're not necessarily just encouraged -- they can't be arm twisted by a speaker or majority whip or majority leader. even though john boehner and eric cantor and mcconsider any and these guys are powerful, they can't simply dictate as in the old days when you had a speaker, he would tell a freshman congressman, you know what, this is what you're doing. you go back to your district and explain why you're doing it, but this is what you're doing otherwise you'll be punished and you won't be happy here. those days are gone for all president clinton purposes. you can't just arm twist like that as they used to do and it's a whole new world i should say in washington. >> kate bolduan on the hill as we continue to watch these live pictures. you're not far from where we're seeing these closed doors and what's happening behind them. i saw you once again working the phones. any update? we see a lot of people going in and out, whispering in between the cracks. we're wondering when will we get something coming out of that meeting that's happening behind

those closed doors. >> reporter: we're trying to get guidance on how long this meeting could actually be. it kind of became a nuf ball game here last night as everyone was expecting the vote to happen early yesterday evening and then it clearly unraveled. not a display that house republican leadership wanted to see spill out in the public, that they were having to work for hours to try to get support and there was clearly a breakdown there. one they think they are talking about we're told by a source that is at least one of the options, and i'm sure there is a lot of stuff being talked about in that meeting this morning, would be option that they're discussing is how to tweak the bill with an amendment to the constitution basically. and many conservative members find this very important and very important to the structural change that they say they want to see in washington and how they spend americans' money. but this is one thing that's

being talked about, we're hearing at least is being discussed, how to tweak the bill to include maybe a stricter version of it. but i'll tell you the reality outside of that room is that included in a bill makes it probably even more unpalatable to democrats and specifically democrats in the senate. so, again, we return to this same kind of square one or whatever square we're on at this point which becomes where is the compromise going to end up being to find something that can pass both the house and the senate. and, again, today and i'm still repeating myself, we have not found that compromise. >> square within, square two, square three, we keep going up the chart on that. and what's interesting, too, mark preston you follow all the polls, what's it look like for obama now, his popularity rating staying the same, going up, going down? >> well, it's certainly going down and we really can't understate enough orem if a size enough the fact is that there's a lot of political game man ship

going on right now. the president is speaking now at a time when the house republicans are behind closed doors. today will be driven by mess an and whoever owns the mess achblgt day wins the day. and that's why we're seeing the president come out so early as house republicans mind closed doors trying to figure things out. at the same time, the president does have problem with the polls. we've seen a couple overnight that show that his approval rating now is right above 40%. that is not very good. the only saving grace right now for the president the fact that republicans are doing worse. so a lot of political gamemanship going on. we look at that spol, poll, it he's lost considerable territory over the past month or so and we're gearing up for the 2012 collection. so even though we're talking a lot about policy, there's a lot on the line, let's not lose sight of the fact that this is all driven by politics. >> mark, stay with us.

kate baolduan works the phones. wolf, the president was supposed to start speaking at 20 after the hour. we've got a two-minute warning i'm being told now, wolf, two-minute warning for the president. he'll address all of us on the debt talks. for those that are just tuning in and catching up where we is an, still at a stand still wondering what the president will say, will it be more of the same thing, how much of an impact will this have, the dead loom looming just a few days away. >> and it's important that all of us appreciate it's not just the house of representatives or senate. it eat president of the united states, the executive branch of the government, they have a huge stake, as well 37eat president states, the executive branch of the government, they have a huge stake, as well 37 so you have to reach some sort of compromise, not going to make anybody happy, but you have to reach some sort of deal that brings in a majority in the house, bringses in a super majority, majority,

full. assigns you need 60 in the senate. and has the backing of the president of the united states, something the president can sign into law. so that's what they got a few days to do this and the president will underscore the urgency when he walks in to the diplomatic reception room at the white house and addresses the nation he's addressing the nation and the world right now, the whole world will be watching. and it's at a time when almost everyone in the world is awake right now, watching very closely to see what's going on 9 markets will be jittery i'm sure, but i suspect the president has to walk on fine line, on the one hand underscoring the urgency, and at the same time reassuring the markets and the people that in the end things can be achieved if cooler heads prevail. so it's not an easy speech for him to deliver and as dan said,

we're probably not going to hear anything new. no new offer, no new concessions, anything like that. here he comes. so let's listen to the president. >> i want to speak about the ongoing and increasingly urgent efforts to avoid default and reduce our deficit right now the house of representatives is still trying to pass a bill that a majority of republicans and democrats in the senate have already said they won't vote for. it's a plan that would force us to relive this crisis in just a few short months. holding our economy captive to washington politics once again. in other words, it does not solve the problem. and it has no chance of becoming law. what's clear now is that any solution to avoid default must be bipartisan. it must have the support of both parties that were sent here to represent the american people.

not just one faction. it will have to have the support of both the house and the senate. and there are multiple ways to resolve this problem. senator reid, a democrat, has introduced a plan in the senate that contains cuts agreed upon by both parties. senator mcconnell, a republican, offered a solution that could get us through this. there are plenty of modifications we can make to either of these plans in order to get them passed through both the house and the senate and would allow me to sign them in to law. and today i urge democrats and republicans in the senate to find common ground on a plan they can get support -- that can get support from both parties in the house, a plan that i can sign by tuesday. keep in mind this is not a situation where the two parties are miles apart. we're in rough agreement about how much spending can be cut responsibly as a first step toward reducing our deficit. we agree on a process where the

next step is a debate in the coming months ons tax reform and sbigtsme entitlement reform and i'm ready and willing to have that debate. if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reform, i'll support that, too, if it's done in a smart and balanced way. so there are plenty of ways on out of this mess. but we are almost out of time. we need to reach a compromise by tuesday so that our country will have the ability to pay its bills on time as we always have. bills that include monthly sorry security checks, vet advance benefits and government contracts we've signed with thousands of businesses. keep in mind if we don't do that, we could lose our country's aaa credit rating. not because we didn't have the capacity to pay our bill, we do. but because we didn't have a aaa political system to match our aaa credit rating. and make no mistake, for those

who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards. and that's inexcusable. there are a lot of crises that we can't always predict or avoid. hurricanes, earthquake, tornadoes, terrorist attacks. this isn't one of these crises. the power to solve this is in our hands. and on a day when we've been reminded how fragile the economy already is, will is othis is on burden we can lift ourselves. we can end it with a simple vote, a vote that democrats and republicans have been taking for decades, a vote that the leaders in congress have taken for decades. it's not a vote that allows congress to spend more money. raising the debt ceiling simply

gives our country the ability to pay the bills that congress has already racked up. i want to emphasize that. the debt ceiling does not determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up. it gives the united states of america the ability to keep its word. now, on monday night, i asked the american people to make their voice heard in this debate. and the response was overwhelming. so please to all the american people, keep it up. if you want to see a bipartisan compromise, a bill that can pass both houses of congress, and that i can sign, let your members of congress notice. make a phone call, send an e-mail, tweet, keep the pressure on washington. and we can get past this. for my part, our administration will be continuing to work with democrats and republicans all weekend long until we find a solution. the time for putting party first

is over. the time for compromise on behalf of the american people is now. and i'm confident that we can solve this problem and i'm confident that we will solve this problem. for all the intrigue and all the drama that's taken place on capitol hill right now, i'm confide confident, as i said earlier, we're now running out of time, it's important for everybody to step up and show the leadership that the american people expect. thank you. >> wolf blitzer, as expected, he did not take any questions from reporters there in the room. like you said, he made his statement short and sweet. and you heard what he said. he said, look, we're not miles apart on agreeing to something. but for the average american who just continues to see all this bickering, no solution and a deadline looming, it's really

hard to believe that something really is -- that something could be i guess very easy to handled. >> he did drawn that fine line, that balance that he as president of the united states needed to draw. while on the one hand underscoring the you are againsts city and dire consequences of failure, at the same tie suggestime suggesting that comply kae llicated becaus are a lot of similarities between what harry reid has proposed and john boehners has proposed. and even what mitch mcconnell, the republican leader in the senate, has proposed. if these guys were to sit down and they could probably come up with something. the pbig difference, though, is if they need a second vote. right now boehner and the republicans in the house say we can raise the debt ceiling for six, eight months, but then the whole issue has to come up again and you heard the president say that's severally not acceptable. they won't go for 509 round two

of this kind of debate in the middle of next year. there are ways you can get around that. mcconnell had a way of dealing with it a come, a complicated formula, the president could veto it. it's a little complicated. but the president just said key live with what mcconnell was sutinsut i suggesti suggesting. it's up to the house leadership to work up some sort of a deal and there isn't a lot of time p our viewer, the markets are watching this very, very carefully. >> and i'm curious, i don't know, can we take -- do we have a live shot from the new york stock exchange just to check on the markets there? okay. it's remained about the same

since we heard mary read on the floor, mitch mcconnell on the floor, president of the united states. it's staying just at about negative 100 there. kate bolduan, any reaction from the hill since the president spoke? >> i haven't gotten reaction quite yet because as we were talking about earlier, house republicans are still in the meeting this morning. of course house speaker john boehner and other leaders are trying to find some way to get their own members in line to vote on some variation, maybe a modified version of his bill somehow to get it through the house. at the same time as we've just discussed earlier, while we hear the president calling for compromise and saying that he could support the rebill, senate majority leader harry reid has announced this morning that he's starting to move forward. he says he cannot wait for the house to act any longer because we had heard and there was a sense that the senate was waiting to act until they saw

what happened with john boehner's bill, but now harry reid announced this morning he is moving forward, he'll file closure which is a technical time to get the ball roll which go would set us up for some pretty interesting voting times on his measure or some modified version of it. a 1:00 a.m. first test vote sunday morning is possible. and that would put us into tuesday for a final -- for a vote on final passage. so this would also mean if this would be the route that we end up taking, that congress ends up taking here, that would be veries last minute and would honestly kind of jam the house, if you will, to see if they'll support it or not. so he of course still needs to go senate republicans on boaon board for this, but it's a new ball game. >> thanks to all three of you. you just heard the president of the united states. his final remarks there on the debt crisis. about the lin

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you just heard the president speak to americans. we're talking about a scramble now to try and find a deal on the debt. republicans in the house are meeting right now after putting on of a vote yesterday on their bill to raise the debt ceiling and cut spending. norway holding a national memorial service for the people killed in the bombing and shooting massacre. and new dosing labelses for tie la knoll. the makers recommending the maximum dose be lowered in order to help prevent accidental overdosing. allan chernoff at the new york stock exchange. it was interesting, we thought possibly dow industrials would tank even more as president was speaking, but it's remained about the same since we were taking testimony from the floor.

>> yeah, we're actually picking up a little bit here. the dow at the moment is off about one-half of 1% and the other major indices, nasdaq, s&p 500 off a little more than one third of 1%. so an improvement from what we saw at the open, but nonetheless, the concern remains hanging over wall street, this concern that the gridlock in washington is just going to hurt the economy in a severe way going forward. just investors, consumers, corporations, everybody stepping back and when you step back, you don't spend, that hits the economy. >> and so what do you think wall street wants to hear from washington? did wall street hear what they wanted to hear when he spoke just about ten minutes ago? >> wall street wants the president to say we've got a deal. we are resolving this issue. we're putting it behind us and we're moving forward. and once washington is able to

resolve its concerns, then consumers, corporations, people will feel better about making commitments, taking on some risk. that's what economic growth is all about. people spending money, people making commitments. it's not happening if washington is not able to pay its mosts basic bills. >> we're all going to feel. allan chernoff, thanks. at noon eastern in new york, friends and families of shane bauer and josh fattal hold a freedom rally as both face espionage charge this is iran. and then tonight at 7:00, jon huntsman slated to address college republicans at their convention in washington, d.c. and consumers sounding off on the nation's debt crisis, we'll hear from them next. my doctor told me calcium

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checking of courses

cross-country. jetblue rolling out new all you can fly travel packages. the blue passes are tailored to business people flying out of boston an long beach. cheapest costs about 1300 bucks. in new york, police say a man dressed as an armored truck driver robbed a check cashing store of almost $15,000 without a rousing suspicion. until hours later when the real armored truck officer arrived for the scheduled pickup. and north of the border, new dad david webber won't forget the day his caught was born. he drove more than 100 miles an hour just so his wife could get an emergency c-section. and guess what? he got a pretty hefty fine and license suspension, as well. doctors told the judge high school wife's pregnancy was high risk, he needed to get there. but the judge was unmoved. so you can imagine consumers sounding off on the nation's debt crisis all over the country. sandra encompany is actually in the l.a. suburb of santa monica

taking the pulse of the people as it relates to the ongoing talks. and i'm betting you probably have received an earful already. >> reporter: that's right, i'm here on 3rd street promenade, people are coming out for their opening coffee. already consumer confidence because of the recession is sagging and if this debt ceiling deal doesn't come through as the president said, if the country's credit rating is lower, that means interest rates will increase for anyone carrying a credit card with debt, looking for a car loan, a mortgage. so it severely impact as lot of americans here and we stopped christian over here who has been paying attention to the debt debate going on in washington. you just heard from the president. what did you think about the comments? >> i leak hike how he stressed it doesn't have to mean an increase in spending. i think it was important to stress that raising the debt ceiling is to pay off our prior

deads and it doesn't necessarily mean we have to incur new ones. so hopefully they can get a deal done because it gets scary. >> and how would it impact you if there is no deal? >> well, since the recession, we've kind of been pinching pennies so we've been lucky not to have a lot of credit card debt, but certainly on a home mortgage stance, we're thinking about moving soon and if that happen, it will make selling our old house that much more difficult and qualifying for a new mortgage a little more scary than should be. >> very concerning here for a lot of americans. we also stopped steven after he got his morning coffee and you're just waking up hearing the news about the president and still a stalemate this morning. how would this affect you? >> i think it would affect me greatly seeing the pact that i am going to be in the market for buying a house and if interest rates went up, that definitely affects the fact that it would be tough to qualify for a loan.

also the at the same time in terms of the amount of debt that i already have, i rae don't have much. i watch my pennies. so in terms of that, i'm not really too concerned. >> it's been a lesson pounded into us for the last couple of years or so. and you just heard from the president, as well. what did you make of his comments? >> i agree with what he says, we don't want our credit rate to go drop. and we do need -- we probably do need that money. kind of sounds like getting a credit card to pay off another credit card, but at the same time, we need to cut our spending. so i can see this once, but not anymore. >> and you've been paying attention to the fight in washington. >> it seems like there's a lot of blaming. they both need to come to an agreement on something. >> thank you so much, steven.