we start the second half of our show with some stories we care about from the front lines. reporting, stocks falling for the fourth trading day. the major indices losing nearly a percent. david lutz tells us market watchers will be taking a close look at the minutes from the most recent federal reserve meeting to see whether fed governors used more dovish language in discussing its easing policies. an update on an exclusive "outfront" investigation. a house arms services subcommittee held a hearing today on the state of the cobble-based afghan national military hospital. the hearing at times was tense with members questioning defense officials about the lack of oversight at the hospital and how u.s. taxpayer dollars are being spent there. the pentagon has come under fire after it was revealed american generals delayed a probe of alleged abuses of wounded afghan soldiers being beaten for requesting pain medication.

we learn more about former barclay's ceo robert diamond's pay package, giving up $31 million worth of bonuses but will take home $3 million in pay. meanwhile, outgoing barclay's chairman marcus agis faced a tough grilling in the rate-fixing scandal. the hearing focused more on the leadership. he said one reason diamond had to go was because he lost the trust of regulators. a coalition of conservation groups filed a lawsuit over shell oil's spill response plan for its exploratory drilling in the arctic. shell plans to start its exploratory drilling in the arctic this summer. the suit names the federal bureau of safety and enforcement which approved the oil spill plans. those plans include having a flotilla of response vessels near any offshore drilling platform. one of the groups involved is green peace, which told us why they are participating. >> the oil spill from the exxon

valdez is still coming up in the sand on beaches 23 years later. there's absolutely no world experience that tells us that we could address and clean up a spill in the unforgiving waters in the arctic. there's no reason to believe that this is a safe way for us to move forward. >> you know, make sure you tune into "outfront" next week for a special report, cold wars, in which we'll be taking a much closer look at drilling in the arctic and all that it does or might mean. it's been 341 days since the u.s. lost its top credit rating standard & poor's. what are we doing to get it back? well, apparently not enough. the credit rating agency fitch this afternoon once again confirmed its top aaa rating for the u.s., but it also stuck with a negative outlook saying government budget uncertainties and turmoil in european markets makes the future look kind of dicey here. our fourth story "outfront." president obama doubles down, reiterating his pledge to extend

the bush era tax cuts only for people making less than $250,000 a year. >> i believe that we should make sure that taxes on the 98% of americans don't go up, and then we should let the tax cuts expire for folks like me. for the top 2% of americans. >> but here's the thing. not all members of the president's own party are on board with that idea. some want to see the tax cuts extended for everyone making less than $1 million a year. $1 million a year, not $250,000. we asked our political strike team to weigh in. 30 independent analysts who help us break down the issues of the day. we asked which is better for the democrats politicly, a threshold of $250,000 or $1 million? 55% said $250,000. 45% said $1 million is better. democratic senator from new jersey robert menendez agrees the $1 million threshold is better. he's "outfront" tonight. senator, why do you think $1

million is better? >> i didn't say $1 million is better. i was asked on the show whether $250,000 was the right amount. and i said i would like to get it higher. but the bottom line is what we really need is to ensure overwhelmingly that middle class taxpayers get the continuing relief. and that's the overwhelming part of america. now, in a higher-cost state like new jersey, you might say that the 250 is on the lower side. but certainly what we can't afford is what our republican colleagues want, which is continuing tax cuts for people who make above $1 million, millionaires, billionaires, the country cannot afford that. and at a time in which the country needs those who have the wherewithal to help it, i would think that those tax cuts should not continue. >> what kind of number would be comfortable for you? because clearly, there's a pretty big gap between $250,000, which, as you would know in your own state, there can be plenty of couples out there who worked hard, 50 years old, each making

$125,000, putting two kids through college, living in a fairly expensive area. they don't feel rich but they're not making $1 million a year either. what number would be more appropriate? >> well, i mean, it varies from place to place. the higher-income state like new jersey, certainly, i probably would like to see it more around $350,000. but the reality is that at a quarter of $1 million, you're going to capture the overwhelming part of taxpayers both in new jersey and in the country. and it seems to me that if our choice is between that and extending the tax cuts for people who make $1 million or billionaires, you know, that's a very clear choice for me. i'd rather extend all of the tax cuts for people making a quarter of a million dollars or less, and save the rest of the money for deficit reduction and for some of the critical needs we have. but if our republican colleagues

hold the tax cuts for middle class hostage to keeping the tax cuts for the richest people in the country who need to help the country right now and who receive the greatest benefits of the bush tax cuts, that's not a choice we should have to make. >> do you think there's really that much money to be gained in this whole thing? a lot of people say it's political posturing. the difference in ten years in this, is, yeah, the deficit gets worse if you include everyone. but it gets worse if you include just the middle class, too. the difference is $3 trillion or $3.7 trillion worth. that's real money, yes, but you see the concern of some people to say this is mainly political posturing. >> well, i would disagree with that. the people who are struggling in this country are middle class working families. and relief that we can give to them ultimately provides a ripple effect in the economy, because they're most likely to have the need to spend. but when you're a millionaire or multimillionaire or a

billionaire, the reality is that you're not going to spend that much more as a result of the tax cut. those types of savings can really be used for deficit reduction or some of our critical needs. and so i think there is a fundamental difference. >> what about one last quick question here. what about the ripple effect? the argument is that the more you hit those upper-income people, the more they say, i am not going to do anything to add extra workers, to spread things out. on top of which, by the way, there's this other measure of helping small businesses, which there's some concern is being swept away by the storm of talk about the bigger budget. what do you think about that? >> well, the reality is that 97% of all small businesses would not be affected by even the president's proposal of $250,000. so i think that's a red herring, and a false claim. 97% of all small businesses would not be affected. and so at that quarter of $1

million and under, it seems to me that you protect 97% of all small businesses in the country, and you give middle class working families the continuing tax break they need to be able to meet the very challenges that you talked about before. >> all right, senator. i appreciate you coming on the air. for the record, you would like to see it above $250,000, but if that's the way it has to go, you see it going that way. appreciate you being here. john avalon joining us now. john, what do you make of this talk? is this about real money or is this about politics? >> well, this is about political contrasts in a presidential election year. this isn't about the deficit and debt right now. it's the reason the president keeps using the word "fairness." it's about values. but the question is, who does the middle class feel is looking out for them? they've been squeezed for so long, forgotten for so long. and the real question that -- that our political strike team was asked, what's the right threshold? because there are regional realities that are fundamentally different. the reason that senator charles

schumer across the river from senator menendez is strongly in favor of the $1 million, in the tristate area, for example, you can have a two-earner household, each person making $125,000. this is far from the jet set. >> yeah, very different than if they lived outside tulsa, for example. but let me ask about this whole thing, though. when we talk about this amount of money and this fight going on here, one thing i think gets kind of lost here is you're not going to do that much to the deficit. i guess it's good to do something to it, sure. you're not going to do that much to it. but i think a lot of middle class taxpayers -- it seems as if people are under the impression, if you punish the rich, somehow the middle class is going to benefit. the same benefit comes through, either way you approve this. it's not like the money is going to come from the rich and be paid to the poor. that's not going to be the case at all. it's just going to the government. >> this is the argument that obviously republicans want to say that any differential, anything other than a complete extension amounts to class warfare. and that's the way they want to

characterize the president's focus on fairness. the democrats are saying, look, who is looking out for the middle class? and we have a problem with the growing gap, not just between rich and poor in this country, but really, frankly, the super rich and working wealthy. that's where there does become a discussion. is there simply a return on the top rate to the clinton era, is that punitive, is that confiscatory, we've had this distorted hyper partisan debate where a 3% increase in taxes becomes proxy for whether or not you're a socialist which is insane. >> i think this debate is far from over. thanks for being here. i don't mean to denigrate when i say we just go to the government. my point is, not going back in your pocket. speaking of which, is that a cell phone in your pocket, or is it a spy? a new congressional report shows companies such as at&t and verizon and others responded to a whopping 1.3 million requests from law enforcement for information about their customers. if you're on that list, that includes information on who you called, who called you, your text messages, your location, according to your phone's gps, the list goes on and on.

and wait, it gets better. some cell phone carriers are starting to charge for turning the records over. at&t alone took in $8.3 million in 2011 from police agencies. that's according to congressman ed markey, whose office is looking into this matter. at&t wouldn't talk about it, but verizon and sprint said they just cover the cost of doing what the police ask. so for the 411, we tracked down our own cnn legal contributor, paul cal "outfront" with us now. >> with my cell phone. >> with your cell phone. somebody tracking you as we speak, my friend. is this a nefarious, sneaky thing, or is this a good thing? >> you know, my civil libertarian juices started flowing when i first heard about this story. you know, law enforcement violating the rights of american people. but i was talking to a close friend who is a prosecutor in new york, who was just kind of throwing the cold water in my face. and what he said was, this is ridiculous. he said, you know, they're talking about 1.3 million

requests being made, nationwide, we're a country of about 314 million people, i think. so it's less than, you know -- less than half a percent of the population. by the way, over 2 million people are in prison in the united states. so it's less even than the percentage of convicted felons who are imprisoned. and these are situations where the court, judges have approved court orders and subpoenas and search warrants for these records. frankly, i don't see a problem. >> you said to me earlier in the newsroom, this is just like wiretaps of years ago. but my argument is, my phone years ago didn't follow me around. yes, you could tap my house, but you didn't know where i was the rest of the time. >> well, that's quite true. but let's talk about following you around. if you have probable cause or reasonable suspicion that you are committing a crime, and you go to a judge and the judge authorizes the police to follow you around, then where is the illegality? this entire country is based on

this concept that the judiciary puts handcuffs on the police to protect our rights and requires them to have reasonable suspicion or probable cause, depending upon circumstances. that's the protection we have built in. and by the way, that following around thing has saved people's lives. one of the things that came up in one of the congressional hearings was, you know, someone who had been stabbed and was bleeding to death in the basement of a house. they knew where she was because they tracked her cell phone. so there are -- those are the emergency situations that the cops are being criticized for. they save a lot of lives by following. >> let me ask one thing about this, as a continuation. we make this short at the end here. isn't it just a hop, skip and jump before this shows up in civil cases and there is a divorce going on and somebody says, you know what, you've got to give your cell phone records, got to know if paul was at the hotel, got to know if paul was at the resort. >> well, i've got to tell you, it already has shown up in those cases. they're using easy pass records to find out if you crossed the bridge into a particular locale, if you went down a turnpike, using your facebook records and

cell phone records, text messaging. those things -- they're already popping up in court. once again, it has to be in response to a subpoena, sometimes proved by a judge. so we're losing a lot of our privacy to technology. and i agree, we have to draw a line somewhere. but the place is where do we draw the line? it's a hard thing to decide. >> we'll take our phones tonight and party like it's 1984. >> i'll start following you and see where you go. >> you'll never catch me. never. "outfront" next. airport security opens a suspicious bag, and they find a live baby inside. i'm serious about this. plus, the man who defended casey anthony comes "outfront" next. he's no longer her lawyer. we'll find out why. and later, a rock n roll icon sells out to the man. well, the men and women of america. and it's all right. 8% every 10 years. wow. wow. but you can help fight muscle loss with exercise and ensure muscle health. i've got revigor.

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we're back with tonight's outer circle where we reachous out to sources around the world in egypt, the parliament called into session by the new president, mohammed morsi but shut down later in the day when they were ruled invalid and dissolved by egypt's high court. ivan watts is in cairo and told us about the power struggle playing out in egypt. >> reporter: different branches of the egyptian government are engaged in a very public

argument with each other over whether or not the parliament should be reinstated. the recently elected muslim brotherhood president, mohamed morsi said they should convene again, in part because it consists of -- is dominated by members of his own party. and he's opposed by the ruling military council, which has ruled this country for more than a year, as well as the top court. so the muslim brotherhood has brought people out into the streets to -- as a political pressure tactic to help give it some leverage and negotiations, and all sides are engaged in competing court cases and appeals against each other in different courtrooms around the country. the main thing is, for now, nobody is fighting each other, and that's a blessing in a country that is seeing an awful lot of violence in the streets over the course of the past year-and-a-half. >> in the united arab emirates,

an egyptian couple was caught trying to smuggle their own baby. the couple tried to pass their bag with their baby inside through an airport x-ray screening machine. we asked mohammed jamjoom where they did this and what charges they're facing. >> reporter: the parents are charged with putting their child at risk and attempted smuggling. it's not known what kind of penalty they'll face but the infant is in good condition. the baby was covered as the couple was traveling through. look at the photo from the x-ray screening. you can see the outline of the baby. according to police, the family had had arrived in the uae last friday but weren't allowed to enter the country, because they didn't have a visa for the infant. the parents were told they would have to wait two days at the airport until the visa office reopened so the boy's documents could be processed. police say by the next day the father had gotten impatient and persuaded the wife to put the baby in the hand luggage in the hope security wouldn't notice. cnn was told it was the first time they had seen anything like this and said, even if you're in a desperate situation, how can

you put your child in a bag? >> wow. wow. our fifth story out front, one year after casey anthony's acquittal, she remains in hiding, said to be afraid for her life. but is she actually craving the spotlight? she's made that online video diary and there are reports she spends her days searching the internet concerned about h image. a man who helped her win her freedom, jose baez, her former attorney. this is an untoward question to start with. how much money did you get for this? >> well, if it becomes a number one best-seller, i think once i -- >> a lot. >> once i add up the calculations, i'll probably make $4 an hour on this case. >> that's what everybody says. what does casey anthony do with herself these days? >> well, i stopped representing her in january.

it's been a while since we've been in close contact, so she's -- like i write in the book, she's a prisoner in her own free do. she's not brazen enough to go out to the mall or do things like that. she's basically in hiding and unable to get back into general population. >> without specifics, in florida? >> yes. she's in florida. >> and what about this notion of her checking herself out online, seeing how the image is playing? what do you think? >> i don't know if they're completely being accurate with the reporting of that, but i can imagine -- i could certainly -- i don't see that as a question for a young 20-something-year-old girl who's locked up in a home to be online. i don't think that that's too farfetched. >> you called her a prisoner of her own freedom, which i guess i understand. with almost any high profile crime. essentially your notion is she's never really going to be free, at least not for a long time. >> yeah. it's funny, in the book, i

document how this whole thing started, how it's progressed, how it's gotten so out of control, and there's so many facts that people don't know. and the way the media took a hold of this case and really turned it into something, i think the people need to know what the facts are and people need to be a little more educated as to what this actual case is about, as opposed to just looking or listening to it on the -- in a two and a half-minute sound byte. >> i guess this is a spoiler alert, but in your book, you don't come up here and say all of a sudden here's a new theory, or "yes, she did it." you reassert in here the idea that this was an accident with the pool, that sort of thing. >> yes, and i go into great detail as to the evidence that gives me that opinion, and not only that i talk about evidence that didn't make it into the trial. evidence that didn't even make it into the discovery. and things that happened around

in the backgrounds of the case, to really give people an inside view. you tell it's not a skinny book and it's not short on information. so i don't cheat anyone there. >> let me ask you one last question before you go here. are you glad you did this case? lawyers get all sorts of cases. this is a big, big case. >> well, you know, i've had some tough times in this case. >> people mad at you about it. >> right. and i document a lot of that in there. but i'll tell you this much. i wouldn't be sitting here with you, tom. >> yeah, i can understand what you're saying. >> there's a lot to be grateful for. >> "presumed guilty" if you want to check out the book. next, a great american success story with a kick-butt sound track. great shot. how did the nba become the hottest league on the planet? by building on the cisco intelligent network they're able to serve up live video, and instant replays, creating fans from berlin to beijing.

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