and it won't ease the pain of homeowners stuck in upside down mortgages, but the obama re-election campaign is convinced that questioning mitt romney's finances and private equity resume is legitimate. answers that voters deserve. >> that is hardly a personal attack. that goes to the rationale for his candidacy. >> reporter: so in two places at once, texas in person, pennsylvania on tv, the president launched a blistering attack on his opponent. first on his time at bain capital. >> he made money investing in companies that have been called pioneers of outsourcing. i don't want pioneers of outsourcing in the white house. i want somebody who believes in insourcing. >> reporter: then in the new ad on releasing more of his personal taxes. >> makes you wonder if some years he paid any taxes at all. we don't know because romney's released just one full year of his tax returns. >> reporter: the battle for pennsylvania cannot be understated even though democrats in presidential races have held the state since 1992

and president obama won by ten points in 2008, the keystone state appears to be in play. where the former massachusetts governor was holding a rally standing in front of a sign that read "obama's upside down economy." >> he's got no new ideas for getting the economy going. he's got no one to blame. he's out of touch with what's happening in the country. >> reporter: but the harshest counterpunch came from john sununu. on a campaign conference call referred to team obama for "a bunch of liars" and then criticized the economy this way. >> i wish this parent would learn how to be an american. >> reporter: he later clarified saying he hoped the president would establish what he said was

an american formula for creating businesses creating an environment where entrepreneurs could thrive. he said he wished he could have better explained that the first time around and could apologize. nonetheless the obama campaign was quick to react saying the romney campaign has "officially gone off the deep end" a." >> thanks very much, john sununu will be here live this hour in "the situation room." give him a chance to explain precisely what he said he now acknowledges he misspoke in that conference call. let's bring in our cnn chief political analyst gloria borger in "the situation room" as well. the ad we just saw in dan's piece, part of a broader picture that the obama administration, the obama campaign is trying to project. >> as you know this is the summer when it's time to define your opponent. it's not rocket science here, wolf. what the obama campaign is trying to do is paint a very, very unflattering portrait of

mitt romney. he is, according to the obama campaign, secretive, tax avoiding businessman who outsources jobs and cares nothing about the middle class. that is of course on top of his wealth. so it's a caricature but sometimes care ka churs can stick particularly when you're spending $25 million a month most of which is in negative advertising. so that can stick. and the problem for romney right now is that unless he releases his taxes or continues to -- or give some more information about his taxes or even bain, these questions will be raised. don't forget, wolf, you were there. these questions were raised by his republican opponents in the primaries by rick perry and newt gingrich. and rick perry asked the question aloud at a cnn debate saying we can't change candidates in september, you've got to disclose now. >> tough words at the time

coming back a little bit obviously right now. there's one layer of attack that the president has, but his surrogates, his aides, his advisors, are a lot more fierce, shall we say. let me play a few clips. >> this is the most secretive candidate since richard nixon. >> he and his campaign leadership need to put their big boy and big girl pants on and defend his record. >> if you're signing federal documents that aren't actually true, it is a felony. but that -- we're not accusing mitt romney of committing a crime here. >> now, usually the advisors, the surrogates, are a lot tougher when the candidate themselves especially a sitting president. what's going on here? >> it's a high road/low road strategy. the president answers the questions when asked about bain capital or romney's taxes and say it's a legitimate form of inquiry. but what you hear from the surrogates is a low road. and i would point out with john sununu that it is on both sides

that you hear this from the surrogates. and they take the low road. they sling the mud. and of course this is what of course the vice presidential candidate can help with too because generally vice presidential candidates are the hatchet men. >> romney's clearly been on the defensive a lot over the last week, ten days shall we say. what does he need to do to change the situation? >> i think he needs to get more comfortable, first of all, in talking about his wealth. he's never been comfortable talking about it during the primaries. he still isn't. he may need to disclose his taxes or more about his taxes, talk more about bain. be a little more informational about it. because otherwise you play into this whole notion of secrecy that the obama campaign is talking about. then i would argue, what he needs to do is change the subject. maybe one of those ways to change the subject is to talk about, hey, why don't we have congress stay in washington in august. one republican suggested this to me today. why not have congress stay in washington in august and deal with the problems of the fiscal

cliff before the election rather than after the election. i would argue that if either romney did that or president obama did that, that would have some residents with the american public who actually wants to get these problems solved. >> good point, gloria. >> there you go. >> thanks very much, gloria borger. thank you. let's go to jack cafferty right now. he's got more in the cafferty file. jack. >> congress in washington in the month of august. i don't think that's ever happened, has it? >> got to be a national emergency. >> well, you know, this is one. we're going over the edge here come january 1st. young voters are not nearly as excited about this presidential election. and that could doom president obama's chances for a second term. a new gallup poll shows only 58% of registered voters between the ages of 18 and 29 say they will definitely vote this fall. that is far below the current national average of 78% for all registered voters. it's also at least 20 points below the percentage of young

people who plan to vote in the fall of both 2004 and 2008. young voters were one of the key voting blocks in president obama's 2008 victory over john mccain. they overwhelmingly support the president again this time around, but historically they show up to vote in lower numbers than other groups. there's a growing sense the outcome of this election could come down to turnout. and if that's the case, the relative lack of interest among the young people not a good sign for the president. of course, it's only july. president obama and mitt romney both have more than three months to fire this group up. the poll also shows the percentage of blacks who say they will definitely vote is similar to the national average this year. however, hispanic registered voters who overwhelmingly support president obama are another group with the lowest expected turnout, just 64% of hispanics in the poll say they will definitelyvote. again, not a good sign for the president. back to the young people for a minute. the outcome of this election will be enormous for the

country. we're facing many critical problems including high unemployment, run away national death, the fiscal cliff we're referring to. those under the age of 30 have a huge stake in all this because whether we elect president obama or mitt romney, it could have a big impact on what kind of america they will inherit. here's the question, what's it going to take to get young voters excited again? go to cnn.com/caffertyfile, post a comment on my blog. or go to our post on the "the situation room" facebook page. wolf. >> he's got to get them excited if he's going to win states like north carolina or virginia or ohio or michigan. some of these battleground states, pennsylvania to be sure. he's got to get that base out there. young people, certainly african-americans, hispanics, the way they turned out four years ago. as you know, jack, it's not going to be easy. >> well, in north carolina for example, i think president obama could have hurt himself with his stand on gay marriage because that isn't playing well in a lot of the african-american churches in a place like north carolina.

so he could have done himself some damage there. he's going to have to get the young people fired up to come out for him again like he did last time. >> as you say, he's got more than three months. let's see how he does. we'll see what romney does as well. thank you. >> okay. standby, we have some remarkable pictures we're going to show you. bales of marijuana, bricks of cocaine and a victory in the war against drug smuggling on the high seas. and political star power. why the actress jada pinkett smith came to capitol hill today. and charlie sheen making sure military men and women will benefit from his attempted comeback. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination...

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seized more than 100 tons of cocaine worth more than $2 billion. lisa sylvester's taking a closer look at what's going on. lisa, these missions, they are stopping a lot of illegal stuff from getting into the country. >> absolutely right, wolf. in fact, today almost four tons of cocaine and marijuana were brought ashore. that's the take after several months at sea chasing drug runners. and here's an inside look at how those fugitives and their loot were caught. you're looking at a high-speed chase, suspected drug smugglers on a souped up go-fast boat last month in pacific central america. in their wake they're leaving suspicious packages thrown overboard. a helicopter marks the location with smoke markers for ships to retrieve. the suspects are being pursued by an armada helicopter, surveillance planes, navy ships. but they still try to flee. 16 miles later the jig is up.

a gunner on a helicopter targets the engines with gunfire. >> we were able to employ our aerial use of force with our precision marksman to shoot out the engines. >> reporter: a tactical team suits up and heads out on a zodiac to board the crippled speedboat. this could go peacefully or there might be trouble. the boat looks like it's sinking. the team takes several suspects into custody. the boat is a goner. by nightfall over 25 packages of drugs have been fished out of the water and chemically tested. >> there was approximately 220 kilograms of cocaine and 125 kilograms of marijuana. >> reporter: this was one of several high-volume intradictions at sea over the past months by an operation task force. the results, almost four tons of cocaine and marijuana, which is just been brought to jacksonville, florida. its value, about $93 million

wholesale. the joint operation combines two services that are sometimes rivals, the coast guard and the navy. technically they can re-flag a navy ship to make it a coast guard cutter, more suitable for actions. >> if i need to be a cutter to help them execute a mission, i'm happy to do that. >> reporter: sometimes the chase results in the fugitives surrendering. but not always. in this chase back in march, the suspects tossed their load, jumped ship and their speedboat out of control shot up on to the beach. >> every bust that we had was just amazing. and just to see that in action was awesome. >> the four tons of drugs brought ashore this morning will be turned over to the d.e.a. >> impressed they got that engine on that fast boat, they stopped that the way they did. >> yeah, they did.

as you saw, that fast boat ended up sinking. i mean, those things go pretty fast. hence the name obviously. but they're doing some good work out there. >> they stopped this one, but there will be a lot more effort. there's a lot of money at stake. it will continue, this war on drugs. it's been going on for a long, long time. i suspect it will continue, no end in sight. thanks very much, lisa, for that. a famous actress appeared front and center today in the fight against human trafficking. jada pinkett smith testified before senate committee earlier today on a hearing on how to fight the growing problem of human smuggling. she got involved after her 11-year-old daughter talked to her about it and made her aware of just how widespread the issue is. she's an advocate for the website, don'tsellbodies.com. she stressed today it doesn't take much to help. >> fighting slavery doesn't cost a lot of money. the cost of allowing it to exist in our nation and abroad are much higher. it robs us of the thing we value

the most, our freedom. and we know what that freedom is worth. we have paid a high price to defend it here and abroad. >> the justice department says hundreds of victims are discovered right here in the united states every year. most are forced into slavery to sell drugs or sex. so did one of the world's biggest banks help drug cartels and terrorist sns you're going to hear why senate nvrgtss say the answer is yes to the tune of billions of dollars. and one of google's original employees jumps to rival yahoo!. we're going to take a closer look at the woman who's switching sides. environment. unless you have the right perspective. bny mellon wealth management has the vision and experience to look beyond the obvious. we'll uncover opportunities, find hidden risk, and make success a reality. bny mellon wealth management

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one of the world's largest banks is being accused of being a tool for the drug lords and the terrorists. executives of hsbc were grilled by a u.s. senate committee today. they allegedly ignored repeated warnings of extensive money laundering through the bank's accounts. our own jill dougherty's been going through wlahat's going on over at that senate hearing all of the allegations. jill, what are you hearing? >> wolf, what they're saying -- the senate subcommittee is saying, is that hsbc's money laundering controls were so weak that it exposed the u.s.

financial system not only to money laundering, but to drug trafficking and even terrorist financing. you've probably seen the commercials, one of the world's biggest banks, london-based hsbc, trying to claim a stake in the american market. but before it does, the banking giant is under investigation by the u.s. senate accused of turning a blind eye to billions of dollars in money transfers by drug cartels and even terrorist groups. >> why is it that the bank -- the bank that's the group bank that sees these kind of problems just doesn't flat out hold some folks accountable and fire some folks. >> reporter: at a senate hearing tuesday, a senior hsbc official, david baggily, offered to resign. >> now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance.

>> reporter: the money laundering stretched across the world. hsbc's mexico unit shipped $7 billion in cash to the bank's u.s. affiliate. law enforcement officials say the only way to account for that much money is if it was drug money. >> we've closed branches in areas where there's a high risk of money laundering. we're now in the process of closing all the hsbc mexico accounts in the caymans. >> reporter: a senate report also found that hsbc worked with a saudi arabian bank some owners linked to terrorist groups including evidence indicates al qaeda. there's even more information, wolf, about iran. hsbc's u.s. affiliate, this report says, handled nearly 25,000 transactions that were involving iran in spite of course u.s. sanctions against iran. some bank were aware of the transactions and the european affiliates stripped out information that linked them to iran. and the bank itself in a review

said that they had found nearly $20 billion of this type of transactions. now, the senate subcommittee does say that hsbc has been cooperating and providing documents, but they also criticize government regulators who they say allowed this problem to fester for years. and then finally, wolf, lots of information here, the justice department also has its own investigation of hsbc. >> i suspect a lot more is about to come out. thanks so much for that report, jill dougherty. meanwhile, also here in washington the fed chairman, ben bernanke, gave investors a bit of hope today. lisa sylvester's back. she's monitoring that story. what did he say? what's going on? >> wolf, everything's relative. bernanke gave a gloomy assessment of the economy to a senate panel today. while he did not promise help, he also didn't definitively say the fed would not take action to improve the u.s. economy if it decides action is needed. he says risks to the recovery

have grown with europe's debt crisis and the looming fiscal cliff in the u.s. as major concerns. unacceptable, incompetent and immature. that's how british officials are describing the contractor for the security staff for the olympic games. they grilled the head of the firm g42rks. the british government is now calling in the military and extra police to help. and if charlie sheen's new sitcom is a hit, america's military families will be benefitting. the creator and star of "anger management" says he'll give at least $1 million to the uso. the donation will go to a group supporting injured troops and their families. military families probably please today hear that, wolf. >> that's a nice $1 million gift to the uso from charlie sheen.

good work. i'm sure everyone will appreciate that. other news we're following, a little girl falls from a third floor window and lives. coming up, the remarkable story of the man who was in the right place at the right time. he did something to break her fall. we'll explain what happened. also, romney national campaign chairman will join us live to explain his extraordinarily harsh criticism of president obama today. democrats say it's proof the romney campaign's gone off the deep end. [ male announcer ] turn 1, daytona.

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let's get right to our strategy session. joining us now, two cnn contributors, the democratic strategist, maria cardona, and erick erickson. thanks very much for coming in. john sununu, we heard this earlier in the hour, we're going to be speaking with him later. he had some controversial comments today which he's walked away from when he suggested that the president of the united states -- i wish this president would learn how to be an american. he walked away from that. he did some explaining. we're going to speak to him in a moment. but i want you to listen to what mitt romney himself said today about president obama. because what he's saying is not all that different. listen to this. >> in the past people of both parties understood that encouraging achievement -- encouraging success, encouraging people to lift themselves as high as they can, encouraging

entrepreneurs, celebrating success instead of attacking makes america strong. that's the right course for this country. his course is extraordinarily foreign. >> let me bring in erick erickson first. his course is extraordinarily foreign. he's speaking about the sitting president of the united states, and his course is foreign. what is he talking about? >> wolf, they probably should have called him a liar or felon. it's crazy to me they would get upset about john sununu and mitt romney giving the hurl. but i think the president is profoundly ignorant the way the free market works and i agree with john sununu and mitt romney. the president in his own autobiography says he was failure in his own private job. he's benefitted from working in government, working in ak deem ya. i don't know he knows how to

start a business in this country. for him to say somehow if you've built something, you didn't really built it, other people do. no one denies other people contributed to your successful in life. this is just grade school marxism that he's entering. >> i'm going to bring maria in in a moment. i'm going to hold you accou accountable for this. if this is a president who doesn't know what he's doing why is wall street now approaching 13,000 the dow jones industrial average, these huge big piz operations are making trillions. they're sitting on trillions of dollars, big business has done exceedingly well over the past three years -- >> exactly. >> -- under this administration. >> absolutely, wolf. we are confusing the free market and big business. and we shouldn't. and i wish mitt romney would focus on this. it's not that big business is succeeding, it's that big business that has very close

ties to government is succeeding. frankly, it's been a bipartisan problem. it's no secret. it's documented fact the firms benefitted the most from dodd frank have been firms like goldman sachs that both republicans and democrats vilify. it's not a free market. we do have an unlevel playing field and wall street has benefitted from the unlevel playing field. it's the president's rhetoric and policies don't match up. >> i'll bring maria into this conversation. there are plenty of huge firms out there that don't have a lot of ties to government making a lot of money. go ahead, maria. go ahead and respond. >> sure. i think erick just used one of the points democrats are making is that big business is benefitting from what is not a level playing field. and the people who are hurting are the small businesses and the middle class. and frankly if you hear what the president talks about and what democrats talk about are policies that are built to increase and to focus on having a robust middle class building it from the bottom up to make sure that everybody benefits, not just big businesses or the ones who are most wealthy in

this country. >> go ahead, erick. >> except there's no economic philosophy outside of marxism that believes you build up an economy from the bottom up. you actually don't build up an economy from the bottom up. you build it from individuals who come up with an idea or service that they can sell better than anyone else and then they provide to everybody else. "the wall street journal" reported last week there is actually no nonmarxist economic philosophy that believes growth comes from the middle class. the middle class derives from profits of individuals through american eng knew tito come up with. he's absolutely clueless on how to create jobs and the economy. >> but i think if you look at what you just said in terms of it's individuals who come up with an idea and start their small business and that is what creates jobs in this country, a lot of middle class voters -- and small business people would say, yes, absolutely, that's me. that's what i am doing. and if you look at what the president is trying to push and

a what he's talked about 18 tax cuts for small businesses trying to figure out how to help middle class families, many of those who are the small business owners and i think that's what resonates more. i want to go to, wolf, what you mentioned at the very beginning in terms of both romney's comments and what governor sununu said earlier during a conference call basically saying he wished this president would be more american. i think the republicans run a really big risk of going back to the '08 campaign and basically using one of michelle bachmann's points, you need to get minorities, especially latinos, they hear this kind of rhetoric and they're going to recoil. that's what my reaction was when i first heard it. >> the rhetoric is getting intense and ugly. we're going to be speaking later live with john sununu, the former governor of new

hampshire, a major romney surrogate. he did say he wished this president would learn how to be an american. he has since walked awa from that. we'll get the clarification up later. erick and maria, thanks for coming in. >> thanks, wolf. the boy scouts of america under fire for ban on gay. coming up, more on john sununu's remarks about president obama coming up later. ♪ [ male announcer ] ok, so you're no marathon man. but thanks to the htc one x from at&t, with its built in beats audio, every note sounds amazingly clear.

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boy scouts of america making an announcement on policy to ban gays. lisa sylvester's monitoring that and other top stories in "the situation room" right now. what's the group saying? >> the group is emphatically reaffirming its ban on gay members. the organization says the

decision to continue to exclude gays "remains in the best interest of scouting." the boy scouts conducted a two-year review. the group has faced numerous protests over this policy. nasa is in for a rocky landing on mars. officials call it seven minutes of terror because the landing is so complicated. the curiosity rover is about the size of a small suv. so nasa's using parachutes and a backpack to slow it down enough. it's scheduled to touch down on mars on august 6th. and the mayor of one alaska community is celebrating -- you are looking at him, stubs, the cat. yes, i said a cat. when residents weren't happy with the options, he knows what he likes including drinking water from a wine glass with catnip and popular with the town's 800 residents and he even has his own facebook page. somehow i would guess he probably has a twitter account

as well and probably a number of followers, too, wolf. >> very high-tech cat indeed. thanks, lisa, for that. during the arab uprisings, thousands of lives were put on hold and olympic athletes were no exception. many had to stop training, others suffered injuries, some even lost family members. cnn's mohamed jamjoom has a story for us. >> reporter: he's finally getting the global recognition he deserves. a major photo shoot for "sports illustrated" in what has become one of the symbols. this is the former home of the toppled tunisia president's brother-in-law. after he fled the country it was gutted and covered in graffiti.

now it houses rubble and revolutionary art. for an olympic hopeful, it's a strong statement. he's one of tunisia's leading athletes, known to be one of the best floor exercise performers in african and arab history. he makes the sport look easy. combining physical strength, poise, flexibility and balance. he competed in the 2004 olympics and now set to be the only tunisia gymnast at the 2012 games. during tunisia's revolution, the scenes of protest not only took over his athletic dreams, the violence hit home. >> i was here downstairs with all the neighbors here ready to

protect our city. >> reporter: he decided to defend his community during the uprising as part of a neighborhood watch. so this is where you guys would sort of patrol? >> yeah. this is where every residence over here have their own groups. and every head of family right here of every home. and our wives and our sons are at home and right here to communicate with us if there is something wrong happening we communicate quickly. we was really scared. sometimes we was like 200, 300 people. then we just heard some noise like, come on, come on, go to fight, go to fight. and we run, we run, we run. that report from cnn's

mohamed jamjoom. coming up, president bill clinton is visiting nelson mandela on the eve of his 94th birthday. in our brand new 6:00 p.m. eastern hour of "the situation room," president clinton sits down with cnn in south africa. you're going to hear what he has to say, what he's learned from the south africa leader and more. the interview with bill clinton in the 6:00 p.m. eastern hour. also, there were heated president obama's victory in 2008, but what will the president need to do to get young voters really excited this time around? more suntans...ad in alabama we had more beautiful blooms... in mississippi we had more good times... in louisiana we had more fun on the water. last season we broke all kinds of records on the gulf. this year we are out to do even better... and now is a great time to start. our beatches are even more relaxing... the fishing's great. so pick your favorite spot on the gulf... and come on down. brought to you by bp and all of us who call the gulf home.

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jack cafferty's back with the cafferty file. jack. >> wolf, the question this hour is, what is it going to take to get young voters excited again?

a gallup poll indicates that young voters not nearly as revved up about this election as they were in 2008. jennifer writes from winnipeg, a definite plan to fix the economy and jobs. the way the money situation is now, younger people have nowhere to go. it's pretty grim out there, jack. and if i were in that age category, i probably wouldn't vote either. what's to vote for? more of the same? rachel, a 19-year-old student writes this, two things, more financial aid for students who can't afford college. and two, the message needs to hit home that if we don't do anything, we don't vote we are messing up our own future. young people need to be in office, not the old white guys. john in oregon writes maybe a united front. asking people to vote despite who they're voting for. just get out and vote. george writes i'm a high school teach who are had numerous students excited about ron paul because of his stance on drugs. i'm not trying to be funny.

more young people are discussing the legalization of marijuana than the deficit. they've become extremely passionate when discussing the enormous waste the war on drugs has been. gregory in texas, vote for obama or you'll have to get a job. and mark in oklahoma, well, let's see, i suppose the president's going to have to promise something new and exciting to the young voters like maybe a new shovel-ready apartment so they can move out of their parents' basement. if you want to read more about the subject, go to the blog, cnn.com/caffertyfile or through our post on the "the situation room" facebook page. wolf. >> been saying it's getting ugly out there on the campaign trail. jack, you've covered a lot of these races over the years. it's nasty. >> you know, and we go through this every time. they all start out fairly genuine and polite. by the middle of summer it's a knife fight. it gets tough to watch after a while. isn't there another way we can do this? >> no. this is the only way we can do

it. >> no. this is it. >> this is it. this is what we got. it's the best we can do. jack, thanks very much. dutch officials now say six, yeah, six needles have turned up in sandwiches served on u.s. airlines. in our next hour we're going to have the latest on what now is a criminal investigation. and in our brand new 6:00 p.m. eastern hour of "the situation room" how the historic u.s. drought will hit you at the grocery store. also coming up, talk about taking on new challenges. the newly named head of yahoo! just reveals she's also expecting her first child. male spirit present.trong it's the priceline negotiator. >>what? >>sorry. he wants you to know about priceline's new express deals. it's a faster way to get a great hotel deal without bidding. pick one with a pool, a gym, a great guest rating. >>and save big. >>thanks negotiator. wherever you are. ya, no. he's over here.

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i tell mike what i can spend. i do my best to make that work. we're driving safely. and sue saved money on brakes. now that's personal pricing. here's a look at this hour's hot shots. in london, angry cab drivers block city streets during a

demonstration against an upcoming taxi ban during the olympics. in bangladesh sparks fly off a piece of metal as a young man works in a factory. in china a woman works her way up the ancient stairs of the great wall of china. and in france a zoo manager feeds a piece of cake to an orangutan to celebrate the zoo's 50th birthday. hot shots, pictures coming in from around the world. she was google's 20th employee and now she's switching sides. yahoo! is named her its newest ceo. dan simon is joining us. he's taking a closer look at at yahoo!'s newest member. dan, what are you learning? >> reporter: wolf, as you can imagine this announcement is getting a ton of buzz in silicon valley. the yahoo! board is getting a lot of credit for putting in marissa mayer as ceo of the company. the question, can she turn it around? the news was met with enthusiasm says one senior yahoo! executive

who thinks marissa mayer's appointment will lift the company's sagging brand. mayer started atia hoo today. her reputation as a driven product leader should serve the company well, according to valley insiders. >> but i think she also brings potential for recruiting. one of the biggest issues yahoo! has right now is probably morale in addition to the tech leadership. >> reporter: mayer was one of google's earliest employees and sbre gal part of its success. success that helped make competitors like yahoo! less relevant. despite her impressive credentials, it's not clear anyone can make yahoo! the power house website it used to be. dave mclure runs a company that invests in small start-up companies. >> generally speaking i think they've been losing the race pretty badly to google and search. i think they've been losing sort of the battle in e-mail and other areas. >> reporter: mayer, who is 37, earned her degree in computer science at stanford. she eventually became google's first female engineer in 1999.

she spoke to cnn earlier this year about the company's incredible ride. >> we have a thousand times more employees now than we did then. the lunch lines are longer than the company was big when i started. but at the same time i really think that google's done an amazing job throughout preserving its culture and preserving what motivates the employees. >> reporter: the opposite can be said about yahoo! a company that's lost its focus, has seen its stock price drop and has had to layoff thousands of employees. >> the question is, does she have what it takes to really make the changes? yahoo! doesn't have a lot of time. these companies can get very sick very quickly. yahoo!'s been on life support for a while. >> reporter: mayer is expected to have her first child in october, a boy. she says she'll be taking a quick maternity leave then back to the office. >> i think it will give her a lot of connection with the mainstream consumer base that, you know, maybe a male ceo wouldn't have.

>> reporter: well, most analysts and company insiders thought that the interim ceo, ross levinson would get the nod, he took over a couple months ago after the previous ceo was found he fudged on his resume. no word yet on levinson's future. >> did the board, dan, express anything about miss mayer being pregnant in? >> reporter: no, wolf. she informed the board back in june when she was first contacted about the job, she says they expressed no reservations about her ability to juggle mother hood and the demands of the job. that's what she told "fortunate" magazine. >> dan simon reporting for us from silicon valley. thank you. and you're in "the situation room." happening now. >> i bit into and i felt this real jab in the top of my mouth. >> delta and the fbi now

investigating needles, yes, needles found in airline meals. also, parts of the united states suffering through the worst drought in decades. farmers are facing ruin. all of us face higher prices at the same time. and a series of highly unusual moves has the world wondering, is north korea on the brink of any significant change? we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you're in "the situation room." we begin this hour in syria. and the intense shelling in the city of homs. syrian opposition groups are reporting at least 45 people killed today in violence across the country.

that's on top of 97 people killed yesterday. more than 15,000 since last march. many simply massacred by government forces away from the eyes of the world. some activists are risking their lives to bear witness. cnn's arwa damon has an exclusive report. we have to warn you, some of the images are very disturbing. >> reporter: the power is out in the streets. three activists and their escorts don't dare shine the light. there is a sniper lurking. gunfire in the distance forces them to pick up the pace. the activists are part of the opposition's media operation. they smuggled themselves into the damascus suburb last month.

and risked their lives to document this. a massacre said to have taken place just hours earlier. among the corpses strewn about, that little girl. a man points to one of the bodies and says, he was executed, a civilian. points to a second corpse and adds, this is his cousin, shot because he tried to save him. residents are readying the bodies for burial. blood soaking through the funeral sheets. the names of the deceased hastily scrawled. it's a grim routine syrians in areas that have dared stand up to the regime have grown

accustom to. the bodies unceremoniously dragged away and placed along side others. residents say syrian security forces searching for weapons in some buildings wiped out members of several families. this man described what happened in one instance. they had two rooms they put the men and the women in he says from 10:00 a.m. to 10:00 p.m. the living were trapped with the dead. it was an execution. they asked where are the guns. there are no guns was their response. and they executed them one after the other. at least 45 were killed in this one attack residents say. information cnn cannot independently verify. in the morning, the media team picked their way through rubble strewn streets, but they would not be able to leave.

the assad regime siege intensified. the government bombardment relentless. many more are killed. the team that filmed this at the end of june was trapped there for more than a week. it's taken this long to get the footage smuggled to lebanon. all that effort, all that risk to give the world a glimpse of syria's narrative of horror and despair. arwa damon, cnn, beirut. all out verbal warfare. cnn national political correspondent jim acosta is here in "the situation room." he's got details. it's getting nastier by the minute. >> wolf, it is getting rough out there. as we said all day long today,

mitt romney has been warning the obama campaign he would respond to the attacks he's been receiving from the president and his surrogates over the last several days. today he and his campaign did just that. in mitt romney's first public rally since he says the obama campaign accused him of committing a crime, the gop contender blamed the war of words on the president. >> so the president's looking around for someone to blame. and recently i became the reason for all our problems here. it was a surprise to my family and me. he's always looking for somebody out there. >> reporter: he says there's a reason for the attacks on his tenure at bain capital. >> i'm convinced he wants americans to be ashamed of success. >> reporter: not so says the obama campaign. at a fundraiser in san antonio, the president said it's romney who made his business career fair game. >> his main calling card for wanting to be president is his private sector experience. >> tax havens. >> reporter: his campaign is stepping up the attacks. releasing a new ad that asks

what romney's hiding by refusing to release two years of tax returns. romney told the national review online i'm simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort and lie about. >> they are clearly and unequivocally a bunch of liars. >> reporter: punching back, the romney campaign held a conference call with reporters featuring its brass knuckles surrogate, john sununu, who questioned the president's understanding of the economy in a personal way. >> it is the american way, and i wish this president would learn how to be an american. >> reporter: minutes later sununu corrected himself. >> the president has to learn the american formula for creating business. >> thank you. >> reporter: but an ohio businessman on the same call also let loose. >> it seems to me that the obama's america, there's no risk, but there's plenty of reward. that's called socialism to me. >> reporter: personal attacks come one day after romney said he would hit back at the

president after what was said on an obama campaign conference call last week. >> either mitt romney through his own words and his own signature was misrepresenting his position at bain to the s.e.c., which is a felony. or he was misrepresenting his position at bain to the american people. >> reporter: as for the romney conference call, an obama campaign spokesman said it's the gop contender's team that's officially gone off the deep end. >> all week there's been speculation romney might change the subject by naming his running mate. his campaign announced two new staffers for the eventual vp pick. romney heads to ohio tomorrow, the home state of the man said to be at the top of the list, rob portman. but hold onto your hats, bobby jindal also scheduled to be in the same state of ohio. >> we'll see. >> got to be one or the other. >> jim acosta, thanks very much. as jim just reported, romney

national campaign co-chairman john sununu getting blasted by democrats for what they see as some over the line remarks. today, john sununu, former governor of new hampshire, is joining us on the phone now from manchester. governor, thanks very much for coming in. i want to give you a full chance to respond to what you said today because you know it's causing a huge uproar. here's the full context of what you said on that conference call with reporters. >> the president clearly demonstrated that he has absolutely no idea how the american economy functions. the men and women all over america who have worked hard to build these businesses, their businesses, from the ground up, is how our economy became the envy of the world. it is the american way. and i wish this president would learn how to be an american. >> all right. i wish this president would learn how to be an american. governor, go ahead and explain what you really meant to say.

>> sure. well, first of all, i was responding to the president's really terrible remarks in virginia over the weekend where he told the business people of america they shouldn't take credit for building their businesses. that clearly is insulting to them. and in my opinion expresses a lack of understanding of how jobs are created. i was making the point that in america entrepreneurs deserve credit. and there's an american formula for creating jobs. and i use that phrase three or four times in that call. and i wanted to come back to that same theme in that riff you just played there instead of saying he's got to learn the american formula for creating jobs, i did say those words that are there. and frankly i made a mistake. i shouldn't have used those words. and i apologize for using those words, but i don't apologize for the idea that this president has demonstrated that he does not understand how jobs are created

in america. he thinks that jobs are created by giving grants to your cronies, to your bund lers and contributors like he did with solyndra and the wind companies that took jobs out of the country. that's what he means perhaps when he says government creates jobs. american taxpayer dollars going to cronies. >> when you say you were apologizing, are you apologizing directly to the president? >> yeah. i'm apologizing for using those words. i shouldn't have used them. >> all right. because later in the day on fox news -- i'll put it up on the screen, you also went on and said this, you said president obama has no idea how the american system functions and we shouldn't be surprised about that because he spent his early years in hawaii smoking something, spent the next set of years in indonesia. >> yeah. >> a lot of people hear that and

think that's pretty outrageous as well, governor. >> wolf, look, the president has to symptom denigrating american values. he makes success a terrible thing. he's sending the wrong message to the american people that if you're rich, you're somehow evil. those are issues that are really critical. and the american dream and the inspiration for the american dream comes from participating. and the president whether he likes to admit it or not, never really held a private sector job in which he earned a real paycheck. it's a lack of understanding what entrepreneurs do that is creating bad policy in the white house. we don't talk about the fact that he doesn't understand what entrepreneurs do, then we will never understand why he failed to create a single job while he was president. >> well, i guess the past couple years what about four million jobs have been created. >> yeah. now he's only 500,000 short

total. and frankly he's bragging about creating 80,000 last month when to keep up with population growth you have to have 180,000 to 200,000. >> but you remember, governor, that when in the final months of president bush's administration the u.s. economy was losing 600,000, 700,000, 800,000 jobs a month. >> and what you should have in a recovering phase of an economy, which we are supposedly in now, is the mirror image of that. we should be creating 600,000 to 800,000 jobs a month. but he's not. >> when the u.s. was losing those jobs, was president bush un-american? did he not understand the free market? >> i think what happened to president bush is the explosion of purchases of homes by people who couldn't afford them created a crisis. but that doesn't excuse you from not putting policies in that create jobs. that doesn't excuse you.

you're not allowed to demonize the entrepreneurs of america. you shouldn't be demonizing the successful people of america. you shouldn't be condemning those who have been successful with a fear every time you say rich. he's steering investment. >> on that same conference call, governor, there was a businessman, a supporter, of mitt romney who flatly said this president was somewhat engaging in socialism. is that what you're saying as well? >> well, that's what this president has done. he's created a feeling amongst entrepreneurs that he's not a capitalist. and so i can't speak for every business person out there in which that feeling has been engendered, but the president should be aware of the fact that small business people -- listen to what the nfiv said about this president. small business people think this president has absolutely no idea what to do to create an environment for them to start hiring. >> but are you saying he's a

socialist? >> i didn't say he was a socialist. >> all right. i just was wondering. we did hear that -- i just asked if you were among those who thinks he is a socialist. >> no. but what i'm telling you is he ought to be worried that he's making small business people feel that way. >> let me ask you this question. i asked it earlier and i keep asking this question. if this president is so anti-business, so many republicans now allege, why has wall street done so great over the past three years going from 6,500 in the dow jones industrial average to almost 13,000 right now. and these huge companies are sitting on hundreds of billions if not trillions of dollars in assets. >> let's take the last point you made. they are sitting on trillions of dollars in assets. you know what they're waiting for? they're waiting to see who wins this election. if president obama's re-elected, that investment money leaves the country. if mitt romney is elected, that

investment money is used to buy equipment here and to do hiring. you're exactly right. they're sitting on trillions of dollars because they're scared to death that this president might get re-elected. >> you agree they've made a ton of money over the past three years, record profits for a lot of these big business corporations? >> but they have not invested it to create jobs because they're scared stiff of the man in the white house. yes, they've done well. they've worked hard. you're not going to denigrate the business community for dealing with the difficult environment of climate -- of the climate situation on the economic side. they've done a good job. they've worked to bring themselves back. they've created more efficiencies in their factories. they have done what they should do. not with government's help. not with leadership from the white house. but because they're good business people. and now we shouldn't condemn them for having done that and

say that somehow the president deserves credit because these people brought themselves up by the boot straps. >> let me play one clip for you from a new ad that the president has just put out. i want to get your reaction to this. >> you got to be careful, wolf, because i will probably give you an extremely hot reaction. >> all right. well, i want you to listen to this. and you can give me any reaction you want. this is a free country, obviously, governor. you and i have known each other for a long time. >> right. >> so listen to this latest obama campaign ad. then i'll ask a question. >> makes you wonder if some years he paid any taxes at all. we don't know because romney's released just one full year of his tax returns and won't release anything before 2010. >> you know what, i've put out as much as we're going to put out. >> what is mitt romney hiding? >> all right. now, as you know, governor, there are a lot of republicans out there who say, you know what, governor, go ahead and release these tax returns. we're talking about george will, bill crystal, haley barber.

rick perry, the governor of texas, he said this on january 16th in one of the republican presidential debates. >> mitt, we need for you to release your income tax so the people of this country can see how you made your money. and i think that's a fair thing. >> all right. so go ahead. you can now say whatever you want. respond to some of your fellow republicans. >> first of all, if governor romney releases two years, they're going to play games saying he should have four. if he releases four, they're going to ask for 12. if he releases 12, they're going to ask for 20. frankly, with the way they're playing games with just about everything, governor romney's absolutely right that he ought not to give them a couple thousand pages to play games with. but let me talk about that ad. because that ad in my opinion defines president obama. and i think he says at the end,

i'm president obama and i support this message, right? >> yes. >> okay. so let's talk about that ad. that ad is trying to suggest that mitt romney didn't pay taxes. mitt romney is such a public figure. everyone knows that if he didn't pay taxes, the irs would be all over him. so there is no way the obama campaign and president obama can't know that the irs did not suggest that mitt romney didn't pay taxes, which means they know that what they're saying is not true. which draws me to only one conclusion, when they say that something that's not true and the president of the united states put the words, i support this message, at the end of it, knowing that what they say is not true, then the campaign is lying. so people should understand that when they hear that ad, all they're hearing is a campaign that knows that there is no way that mitt romney could have done

what they're insinuating. and therefore they're not telling the truth. and the president's not telling the truth. >> governor, this conversation no doubt will continue. sorry we couldn't get you in front of the camera. we will do that the next time. >> i'm sorry the connection didn't work. but thanks for the chance to come on, wolf. really appreciate it. and, frankly, i enjoyed it. >> all right. governor, thanks so much. former governor of new hampshire john sununu explaining what he said earlier in the day. this conversation, by the way this commotion over this is obviously not going to go away. much more coming up in our new 6:00 p.m. eastern hour as well. meanwhile, other stories we're following, needles, yes, needles found hidden inside airline sandwiches. we have new details into the investigation. and a major change is growing in the world's most isolated country. standby. of more than 550 miles, you'll inevitably find yourself on a desolate highway in your jeep grand cherokee. and when you do, you'll be grateful for the adaptive cruise control that automatically adjusts your speed

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that's why we offer accident forgiveness... man: great job. where your price won't increase due to your first accident. we also offer a hassle-free lifetime repair guarantee, where the repairs made on your car are guaranteed for life or they're on us. these are just two of the valuable features you can expect from liberty mutual. plus, when you insure both your home and car with us, it could save you time and money. at liberty mutual, we help you move on with your life. so get the insurance responsible drivers like you deserve. looks really good. call... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance. responsibility. what's your policy? jack cafferty's here with the cafferty file. jack. >> wolf, it didn't used to be

this way. our government, local, state and federal, didn't always spend money like drunken sailors and run up astronomical debts. in recreant weeks, three cities in california all declared bankruptcy. scranton, pennsylvania, is so cash strapped it's cut the pay of all municipal workers to minimum wage. scranton's mayor wants to raise property taxes by 80% to try to close a $17 million budget deficit and prevent bankruptcy. there will likely be more cities forced to declare bankruptcy because of toxic economic conditions. high unemployment along with foreclosures and plummeting home values all combine for less tax revenue. tax receipts in some areas have slunk over 20% over the last three years. and soaring pension costs exceed funding levels by about $3 trillion nationwide. meanwhile, the federal government's nearly $16 trillion in the hole. more than $5 trillion increase

in the 3.5 years since president obama took office. cns news.com crunched the numbers and found the national debt has now increased by more than $64,000 for every federal taxpayer in the land in the last three and a half years under president obama. to pay off the entire $15.8 trillion national debt, cost every taxpayer in the united states $194,000. in the meantime, neither democrats or republicans are doing anything meaningful about the fiscal cliff. and we're getting closer and closer to the edge. here's the question, why has government become so financially irresponsible? go to cnn.com/caffertyfile. post a comment on the blog. go to the post on the "the situation room" facebook page. we are in dire straights. you've been there, haven't you? >> yeah. lovely place. jack, thank you. needles, yes, needles are found hidden inside airline

sandwiches. there's an investigation underway. the fbi has been brought in. we have details. i have to know the weather patterns. i upgraded to the new sprint direct connect. so i can get three times the coverage. [ chirp ] [ manager 2 ] it's like working in a giant sandbox with all these huge toys. and with the fastest push-to-talk... i can keep track of them all. [ chirp ] [ chirp ] [ male announcer ] upgrade to the new "done." with access to the fastest push-to-talk and three times the coverage. now when you buy one kyocera duracore rugged phone, for $49.99, you'll get four free. visit a sprint store, or call 855-878-4biz. [ chirp ]

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an airline horror story sparking an international investigation. needles, needles found inside sandwiches on delta flights. david mattingly is working the story for us. david, what's the latest? >> reporter: wolf, there's a lot riding on getting to the bottom of this right now. you can bet that the airlines and their food service contractors want to know what happened not to mention the passengers themselves. it is the picture that launches a thousand questions. why and how could someone slip tiny needles undetected into

sandwiches served aboard delta flights from netherlands? passenger james tonjes believes he was the first to find one, about seven hours into his flight to minneapolis. >> when i pulled it out of my mouth, i looked at it, it was basically like a straight needle. instead of a sewing needle, there was no eye on the one end. it was pointed on both ends and about an inch long. it was about like having a shot in your arm. it was a pretty good poke. >> reporter: the needle stuck tonjes in the roof of his mouth. less than two minutes later a second passenger found another one. he spoke to minneapolis station kstp. >> i bit down on it so i wasn't biting on the sharp side. but had i taken a big swallow and swallowed that down, i'd have a needle inside. that would be very concerning to me. >> reporter: other flights were alerted. similar needles were found in six sandwiches on four delta

flights. all from amsterdam, schiphol airport. the fbi has launched a criminal investigation not commenting on whether or not this could be an act of terrorism. not likely says cnn analyst tom fuentes. >> if al qaeda or a terrorist group like that had access to the food supply going on airlines through the catering service, why mess around with needles? >> reporter: but it does raise questions about possible vulnerabilities when so much has already been invested in screening passengers and cargo. a spokesperson for gape gourmet tells cnn this is a terribly upsetting situation. first and foremost is the safety of the traveling public. a spokeswoman from delta also tells cnn, delta has taken immediate action with our in-flight caterer at amsterdam

to ensure the safety and quality of the food we put onboard our aircraft. every country has their own rules to follow when it comes to security. we spoke to the tsa, a spokesman for the tsa tells us that their role in the international situations are to look at the security procedures that are in place for the airlines and their contractors and to evaluate them. they won't give us details about the evaluations they had for what was going on here. wolf. >> david mattingly with the latest on this story. pretty frightening stuff. we'll stay on top of it. thank you. a military shakeup. a mystery woman, even disney characters. some very unusual developments in one of the world's most secret countries, north korea. i'm barack obama and i approve this message.

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north korea says it's promoted a little-known general to vice marshal of the country's armed forces one day after the army chief was suddenly ousted. it's yet the latest sign change is brewing in the world's most secretive and isolated country. let's dig a bit deeper with the former new mexico governor, bill richardson, former u.s. ambassador to the united nations. he's had extensive dealings with north korea. i joined him there on a trip about a year and a half or so ago. governor, thanks very much for coming in. did you ever meet with the departed army chief? the guy just sacked for whatever reason? >> i believe i did, wolf. there were some instances where we were talking about recovery of american remains, american servicemen during the korean war. i think he was the main guy that we were dealing with. i've dealt with a lot of military people there.

but most interestingly this was the guy, wolf, the army chief of staff, who was involved in the bombing of those south korean ships pretty much when you and i were there. we were there right after. so it seems that he's been removed. he was clearly a hard liner. but it's uncertain for what reason. i think what's happening is the young leader is consolidating his power. maybe he didn't think this guy was loyal enough, bringing his own people in. you know, anybody that predicts and thinks they know everything about north korea doesn't know generally what they're talking about. >> yeah. because it is so secretive. as both of us can testify. the other interesting little nugget, and i've got my own assessment of what's going on, this mystery woman, this young woman, all of a sudden is showing up at the new leader kim jong-un's side on various occasions. there's some pictures we're

showing of our viewers. what do you make of this development? >> look, it's probably like father like son. if you recall the father, he liked scotch, he liked women, he liked western movies, he liked decadent stuff. it looks like it's passed onto his son. now, i don't know if this woman is his spouse. it's a total mystery. but it's obvious when i see the clips of this young man, he's pretty much more assured politically than his father. he moves more like a politician. his hand gestures, he seems more confident than the father. more of a natural politician. but what is obvious is he's consolidating his power. he's sending messages to his people that maybe he's going to relax things by having some of that mickey mouse stuff, the rocky stuff that maybe he's going to let some western -- evil western trends to move into north korea. you know, i think it's a sign that the guy is trying to consolidate his power, lessen

some of the social strictures, the tough stuff that his father had, but also consolidate his military power by bringing his own people in. >> yeah. that's my assessment as well. he seems to be pretty confident for a young guy. he's not even 30 by all accounts. here's my assessment. tell me what you think. he did spend according to almost all reports at least one year, maybe two years in a boarding school in switzerland. meaning he was exposed to the west at an influential age. and that may be influencing him right now in terms of his confidence. and maybe -- and maybe we're all being a little naive and overly optimistic, maybe he's opening up a little bit more to the west. >> maybe so. and even moving this general i saw some speculation that he was doing it as a gesture to south korea saying, look, i'm removing this guy that bombed your ships. i don't totally buy that. but what is clear is that he does seem to be more confident.

it seems that the power structures have accepted him as the unquestioned leader. but still, you don't always know what's happening there because they control information. they control every flow of speculation that happens. but it's interesting that he's going both ways. he's going to the left in control of his own society, loosening things. but then he's tightening the grip on power through control and appointments in the military. >> you have any indication that he's reaching out to the u.s. or vice versa, that the obama administration may be sending diplomatic messages behind the scenes to him? >> no. i have no information on that. but my -- i'm suspecting that there's a wait-and-see attitude, the six-party talks countries south korea, u.s., japan, russia, china, they're holding back and making an assessment of this guy. it seems that the chinese have

expressed some concern with some of the moves in north korea telling kim jong-un to cool down. hopefully that will take effect. but in general he's still consolidating power. i think once he makes that power, he feels he has it, then you'll see the real leader, kim jong-un, and what he wants to do with the united states, with the six-party countries. i mean, the good news is he hasn't detonated another nuclear weapon. but they're so unpredictable, they may do it any day now because you don't know what's happening next. >> yeah, well, you and i both would be more than happy to go back there if the new young leader of north korea were willing to sit down. i'm sure you'd be happy to speak with him. i would be happy to interview him here on cnn if he would like to invite you, me or both of us for that matter to come over there. we'll see if he -- >> maybe later this year after

things cool down. >> maybe after the u.s. elections. we'll both be in december in pyong yang two years ago. >> we helped stop a war. >> there were some pictures when we were there in pyonyang. governor, thanks so much. parts of the united states suffering through the worst drought in decades. farmers are facing ruin. all of us to potentially could be facing higher prices. you see us bank on busier highways. on once empty fields. everyday you see all the ways all of us at us bank are helping grow our economy. lending more so companies and communities can expand, grow stronger and get back to work. everyday you see all of us serving you, around the country, around the corner. us bank.

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it's a natural disaster in slow motion, the worst drought in decades stretching across the continental united states. 26 states are now feeling it.

farmers taking the hardest hit. lisa sylvester's back. she's working this part of the story for us. what's going on, lisa? >> wolf, you see the map there. 55% of the country is suffering moderate to severe drought conditions according to the national climatic data center. so what does it mean? well, for you and me we will likely see higher prices at the grocery store. but it's really taking a toll on the farmers. homestead farms in maryland. >> either rains a lot or none at all. it's the darnedest thing. >> reporter: ben is a third-generation farmer. >> the soil is fairly dry. don't really have anything to dig with. >> reporter: take one look at his water reserves and you can tell why. >> water's supposed to be right about right here. i should have my foot in the water right here. >> reporter: to save water, he'll have to turn off the irrigation pumps to his christmas trees that are just coming up to keep water flowing to his money crop, the peaches.

these peaches are growing well now, but it hasn't been an easy year. aside from the drought and the hot conditions, there was also an early spring. >> there's some farmers in the drought belt that are singing the blues and re-evaluating their risks. and extended risks. >> reporter: allnut says the farmers in the midwest and corn belt are really getting socked in this the worst drought since 1956. for consumers, it will likely mean higher food prices. for former farmers, it could me the end of their livelihoods. they can't control mother nature. >> right. they can get the corn in the ground at the right time. and they can forward market to get the best price, but they better be sure they have the corn to deliver or else they're coming up short. it's a real tight business. and this weather thing is the only monkey wrench in it. >> reporter: allnut sums it up, the weather is maddening, the highs and the lows.

and illinois governor pat quinn summed it up this way, he called it a natural disaster of epic proportions and now calling on congress to expedite passage of a farm bill to bring relief to family farms. >> lisa, thank you. one of the most influential republicans of the party won't be attending the convention in tampa. we'll tell you who that is. customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense.

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the dire state of the u.s. economy and potential threats for the country's recovery. he also made it clear there won't be another stimulus. erin burnett joins us to explain what's going on. read between the lines, erin. what are we hearing from federal reserve chairman? >> wolf, the main headline is that he thinks the u.s. economy is not growing as quickly as he was hoping it would a couple months ago. he described the pace of job growth as frustratingly slow. a lot of people watching saying i already know that. he had been a little more sang win before. unemployment above 8% for about three-and-a-half years now. he says it will continue to be a frustratingly slow recovery. he also talked about recent economic data that he described as having a disappointing tone. downgrade from the top economist about how we are growing and

recovering. that's deeply concerning. the big question, will he do anything more about it. he was very careful to say i will if i need to every time. he refused to do anything from fed point of view saying congress, if you dealt with a fiscal cliff, it was fiscal tax cuts expiring, the debt ceiling, sequestration issue. if you dealt with that, it would go a long way towards helping. he would prefer congress to act rather than the fed for the fourth time. >> he would like to see no more issues over raising the nation's debt ceiling as well. there's another battle over that. that could be further, cause further problems for the economic recovery. more at 7:00 p.m. eastern, erin burnett, "outfront." jack cafferty is here. >> the question this hour, why has government become so financially irresponsible. and don't hold your breath on congress doing anything before the election.

dave in california. excellent question. we have gone from temporary politicians that used to stay in office one or two terms to professional politicians, many of whom never worked for anyone but the government, whether local, state, federal. hence they see their primary job is to get reelected. the easiest way to do that is to use our tax dollars to buy votes. boom erin missouri. because the legislative bodies are paid for. people are no longer in charge of their elected representatives. money has corrupted every statehouse in the nation. ernie writes when the defense budget is as big as 17 countries combined and members of congress say we can't cut it because it would endanger our security, what do you expect? i would say we are no longer looked as as the greedy ones that owe everyone a living without earning it.

i will likely end up closing my business. it is no longer worth fighting the good fight. i'm telling you small business owners, even in texas, are broke and tired. roger in pennsylvania says you can't get elected or reelected unless you promise free stuff to the voters. politicians care more about their job than the fact the free stuff will have to be paid for by babies who are being born today. james in north carolina. politicians do not get elected to save money but rather to spend, spend, spend. if you spend enough, you create an electorate that depends on your largesse. soon there will be more people voting for a living rather than working for a living. wolf? >> one reader makes an important point that needs clarification. we will be doing it in the coming days and weeks.

the u.s. defense budget is greater than the next 13 or 14 countries combined. and the argument that u.s. defense department says you can't cut defense spending in any significant way. why is the united states spending so much more than the rest of the world combined. a subject we're going to be discussing. >> look forward to it. >> thanks. coming up in the 6:00 p.m. eastern hour, one of the largest banks accused of being a tool for drug cartels and terrorists. she's a unique olympic athlete, she's pregnant.

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republican convention. what's the latest, lisa? >> former president george h.w. bush and barbara won't be attending the convention in tampa next month. the 88-year-old former president uses a wheelchair due to disease limiting his mobility. he attended every convention since 1980 when he was tapped to be ronald reagan's running mate. torrential rains are hammering parts of china, toppling thousands of homes, reportedly killing at least 8. they managed to relocate 3,000 residents in one province. more teams are coming to help. next week, summer olympic games in london bring challenges for athletes competing, especially for this woman who not only is the first female shooter to represent mal asia, she will be eight months pregnant when she does it. "the new york times" reports she had a few physical problems in training. she is just hoping, though, that the baby doesn't kick as she's

pulling the trigger. >> all right, thank you. happening now, the ugly truth behind the newest and nastiest presidential campaign ads. more than half the u.s. wilting from the worst drought in years. and we talk to the man with an amazing catch that saved a girl's life. i'm wolf blitzer, you're in "the situation room." if you think the back and forth between president obama and mitt romney has gotten ugly in recent days, just wait. it is going to get a whole lot more brutal in the next 112 days until the election because both of the candidates and their top strategists know that negative attacks work. just check out the latest obama campaign ad against romney. >> i am barack obama. i approved this message. >> tax havens, offshore accounts, carried interest.

mitt romney used every trick in the book. romney admits in the last two years he paid less than 15% in taxes on 43 million in income. makes you wonder if some years he paid any taxes at all. we don't know, romney released one year of his tax returns, won't release anything before 2010. >> you know what, i put out as much as we're going to put out. >> what is mitt romney hiding? >> the obama folks want to define mitt romney to the american people in the most negative ways. clearly know how to attack an opponent and keep him on the defensive. but don't write off mitt romney and his team. they're very good at this game as well. >> mitt romney has a plan to get america working. barack obama, worst job record since the depression. >> shame on you, barack obama. >> you want more evidence how tough romney can be? ask newt gingrich and rick santorum. the romney campaign and allies

eviscerated him in iowa, new hampshire, south carolina, florida, with millions and millions of dollars' worth of brutal attack ads. >> some of the attacks on me have been breathtakingly dishonest. >> gingrich initially tried to take the high road, but he never, ever recovered. the democrats' 2004 nominee john kerry tried to take the high road and lost. he waited too long to fight back against charges leveled against him about his vietnam war record. neither romney nor obama wants to be swift voted like kerry was. there is a silver lining to this brutal campaign battle. at least the candidates are fighting over issues like the economy, outsourcing. you don't hear romney folks raising questions about president obama's birthplace or religion or his relationship with reverend jeremiah wright, and you don't hear obama folks raising questions about mitt romney's mormon religion.

i take a little comfort in that. it is going to be a brutal, brutal campaign. let's check in with cnn's kate baldwin watching this and other top stories. >> >> davidson said it is a race to the bottom, faster than usual. >> keep going. >> we're going to have to watch it unfold. thanks, wolf. some of the headlines to get you caught up on. more than half the country is suffering through drought now. the worst in a generation. darker the color, the dryer the conditions you see there on the map. even if your state isn't effected, your wallet could be. this picture want to show you tells you why. hardly any colonels on this ear of corn. this farm will produce just 10% what it did last year. that starts a chain reaction that ends with higher prices at the grocery store. for more, want to bring in meteorologist chad myers in atlanta. i know you have been watching it. how bad is the drought. the pictures are amazing. >> it is not the long term drought, kate, that we're talking about that killed a lot

of trees in the rocky mountains and all of that, especially in florida as well, where things dried up over the entire winter. we're talking about a flash drought. this is a brand new term. flash drought. happens all at once. it started exactly when the crops went in. everywhere here on the bread basket of america, across arkansas, oklahoma, nebraska, iowa has not seen enough rainfall since the crops went in. there's a drought since the crops started growing. drops in many cases aren't growing. some crops are being plowed under. there's nothing there. black shows growth, green quite bait of growth or more than usual. some big growth north of des moines and nebraska. guess why? that's where it is irrigated. there are corn fields there where the little pivots go around, and it waters the corn.

everywhere else across the country i can find in the bread basket is less than normal. this is a once in right now 50 year drought. last time we were this bad was '56. worst than 1988 when farmers were in dire straights of losing farms because they had no income whatsoever. >> everyone will be watching that weather, waiting for you to tell them there is some relief inside. chad myers, thank you so much. also watching, getting new information on a suspect in custody after a shooting at an alabama bar. the man that turned himself in is charged with 18 counts of attempted murder. authorities released this surveillance video allegedly showing him with a gun outside the bar where the shooting took place. they say 17 people were wounded, 4 critically. bond expected to be set at $2 million. and no new hiring, fewer bonuses at the general services administration. the agency is working to clean up its act after that high profile spending scandal.

the satirical video, a las vegas conference, all part of a scandal the agency -- has the agency aggressively looking at how it operates. the tsa says the review showed clear decisions when it comes to performance awards. 85% of executive bonuses have been suspended. and a small plane buzzing around penn state campus carries a banner that reads take down the statue or we will. referring to the statue of former head football coach joe paterno. many want it gone after the child rape conviction of former assistant coach, jerry sandusky. a report out last week said paterno could have helped stop the attacks if he had done more. there could soon be a new weapon for people battling weight. it could get approved this week.

you went from 227 pounds to 204 pounds. some have side effects, including increased heart rate and birth defects. that's some dramatic weight loss. >> for people that are really obese if you will, need help exercising, trying to stop eating. side effects to any prescription drug as we all know. kate, thanks very much. turn back to red hot attacks in the race for the white house. mitt romney went on the offensive today in pennsylvania, accusing president obama of trying to make him a scapegoat for his administration's failures. >> while the president is looking around for someone to blame, recently i became the reason for all their problems. >> obama talking about romney might be hiding something in unreleased tax returns.

that ad now airing in pennsylvania, in time for romney's visit to the state. both campaigns suspect the state may be more of a battleground than expected. let's bring in john king and gloria borger. john, i'll start with you. cnn is not saying that pennsylvania is a tossup state. tell the viewers why. >> we will count it as lean democrats. i will show you what it means on the electoral map. right now we consider it a lead obama state. back to 2008, it was a president obama state in 2008. the reason we are reluctant to make that, history. watch the map going back in time. some states change. 2004, you see shifts. george w. bush won. 2000, george w. bush won. 1996, 1992. you have to go back to 1988 to find a year when a republican carried pennsylvania in a presidential election. when michael dukakis won only

ten states. that's one reason. another reason, the polls show president obama leading in pennsylvania. most polls show an 8 point gap. brand new pole, 45 to 39, six point gap. it is a state to watch. six points is close. romney has it on the maybe list. they look, wolf, at the broader electoral map, i will tell you this, this is where we are. lean blue pennsylvania, president obama with this lead. romney thinks it is likely to win florida, ohio, virginia. that would get them there. if romney can do that, he only needs one more state. pennsylvania is on the list, but it is lower than new hampshire, iowa. >> that's why pennsylvania is a tossup. gloria, let me bring you into the conversation. on the whole issue of romney only releasing his 2010 and 2011 tax returns, you double down on that in an interview in national

review, conservative publication, but then the editors a few hours later released this. i'll put it up on the screen. by drawing out the argument over the returns, romney is playing into the president's hands. he should release them, respond to any attacks they bring, and move on. it is clear that these calls for him to release all of the tax returns are not just coming from democrats but from influential republicans as well. >> wolf, i just got off the phone with a senior romney adviser, asked about that editorial specifically. their feeling is look, we have 500 pages out there. they're changing the subject. they believe that the american public has all it needs to have, and you know, they're sticking with that line. they also admit, however, wolf, that these attacks on mitt romney as being secretive, for example, all of the attacks on bain have had some underlying effect in their numbers. you don't see it in the matchup

numbers but where you do see it, wolf, and you're beginning to see it, it has sort of expanded and effected mitt romney's negative rating. and what the romney campaign is saying, we're fighting fire with fire. obama campaign is out there with $25 million ads a month, most of which are negative, we're going to start matching them. i think you'll see the ad wars really get fired up. >> john, you and i, gloria, we covered politics a long time. the reason the negative attack ads are out there is because they usually work. >> they do usually work. on the particular issue of mitt romney's secretive nature, the theme the obama campaign is pushing, helps. negative attacks do work. as gloria noted, romney campaign feels good about the horse race going state by state. they see, and this is what an incumbent president has to do,

attack the opponent, disqualify the opponent. we talked that it is the romney campaign raising more money. it is the obama spending more on negative tv ads at the moment. governor romney getting help from the super pac community. this is middle of july. look how personal the race is now. if they're already this personal in july, look forward to august, september, october. >> romney can't afford to have his negative ratings continue to go up because he is already behind president obama on like ability. that's going to be an issue going forward, particularly in a state like pennsylvania where he wants to attract suburban women. >> guys, thanks very much. ignoring the drug war with money laundering. a romney surrogate apologizes for suggesting president obama is unamerican. we talk about my interview with former new hampshire governor john is a knew knew.

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visit tempurpedic.com. one of the world's largest banks is being accused of being a tool for drug lords and terrorists. executives of hsbc were grilled by u.s. senate committee today. they allegedly ignored repeated warnings of extensive money laundering through the bank's accounts. jill dougherty has more on the allegations. what happened? >> hey, wolf. if you put your finger on the biggest problem the senate subcommittee says the money laundering controls of hsbc were very weak. that exposed not only hsbc but the entire u.s. financial system to things like money laundering, drug trafficking money, and terrorist financing.

you've probably seen the commercials. one of the world's biggest banks, london based hsbc, trying to claim a stake in the american market. before it does, the banking giant is under investigation by the u.s. senate, accused of turning a blind eye to billions of dollars in money transfers by drug cartels and even terrorist groups. >> why is it that the bank, the group bank, sees these kind of problems, just doesn't flat out hold some folks accountable, fire some folks? >> at a senate hearing, a senior hsbc official david bagley offered to resign. >> now is the appropriate time for me and the bank, someone knew to serve as head of group. >> the money laundering spreads across the world. the mexico unit shipped $7 billion in cash to the bank's u.s. affiliate.

law enforcement officials say the only way to account for that much money is if it was drug money. >> we closed branches in areas with high risk of money-laundering. we are in process of closing accounts in mexico and the caymans. >> they worked with a saudi arabian bank some linked to terror groups, including evidence indicates al qaeda. what's more, hsbc's u.s. affiliate, the report said, handled nearly 25,000 transactions involving iran from 2001 to 2007 in spite of u.s. sanctions on tehran. and some bank executives were aware of that practice. their union peen unit linked transaction toss iran. they total nearly $20 billion. >> we know that criminals operate globally and as an international bank, we will be a

target. we have to be sure that we have the best and strongest defense in place in every business, in every market in which we operate, regardless of the local challenges and we're committed to doing this. we know we should have done this better sooner. >> also, this senate subcommittee does say that hsbc is cooperate white going with t. the report says it is also criticizing government regulators it says were letting the problem fester for years. and wolf, also the justice department is investigating this as well. >> yeah, with these huge banks one after another, financial institutions facing enormous problems, raising all sorts of questions about credibility, effectiveness, legality. i know you'll stay on top of this, jill. thank you very much. big story, kate. >> it is big.

hsbc stock fell, it is a huge story, probably just beginning. coming up, bill clinton opens up about his friendship with nelson mandela. what he says he learned from the iconic south african leader at 6:40 eastern. first, bring you up to speed. this is what's trending in "the situation room." number four in the list, tiger woods is no longer the best paid athlete. he falls to number three, behind floyd mayweather and phil mickels mickelson. it is two years since he lost sponsors. he is still doing pretty well. number three, an indianapolis man found a way to keep his lawn looking healthy during drought. paint. he says he was sick at looking at brown grass. he put on this product used on football fields. the top two trending stories are coming up. i'm barack obama and i approve this message.

[romney singing]: oh beautiful, for spacious skies, for amber waves of grain, for purple mountains majesty, above the fruited plain, america, america, god shed his grace on thee, and crowned thy good, with brotherhood...

senator john mccain explains why he chose sarah palin instead of mitt romney four years ago. what does it say about romney's presidential bid? what about the dustup over the tax returns? the political panel at 6:00. ♪ that over time, having high cholesterol plus diabetes... or family history of early heart disease... can put them at increased risk for plaque buildup. and they'd see that it's more important to get their cholesterol where their doctor wants.

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and we don't just cut a check for the depreciated value -- we can actually replace your stuff with an exact or near match. plus, if your home is unfit to live in after an incident, we pay for you to stay somewhere else while it's being repaired. home protector plus, from liberty mutual insurance. because you never know what lies around the corner. to get a free quote, call... visit a local office, or go to libertymutual.com today. liberty mutual insurance. responsibility. what's your policy? welcome back. wolf wants the music and wants the trending. >> certainly do. music is great. >> number four, remind you,

tiger woods no longer the best paid athlete. he was edged out by floyd mayweather and phil mickelson. the grass is green, if you use paint. that's how an indianapolis man keeps his lawn look healthy looking in a drought. number two, a new woman in charge at yahoo. she's making the leap from google where she oversaw google and g mail. she's pregnant with her first child. congratulations to you and your husband. number one, very different. searchers using search dogs and airplan airplanes, hoping to track two young girls that went missing friday riding bikes in iowa. a nearby lake is being drained. the local mayor says the community is bracing for the worst, but hoping for the best. a very sad story. local sheriff said it is almost as if they just vanished. still looking for them.

>> thanks very much. top romney surrogate is apologizing, we will have that interview with john sununu and more coming up. last season was the gulf's best tourism season in years. in florida we had more suntans... in alabama we had more beautiful blooms... in mississippi we had more good times... in louisiana we had more fun on the water. last season we broke all kinds of records on the gulf. this year we are out to do even better... and now is a great time to start. our beatches are even more relaxing... the fishing's great. so pick your favorite spot on the gulf... and come on down. brought to you by bp and all of us who call the gulf home. ♪ ♪

♪ ♪

happening now. a romney surrogate explains remarks that president obama should learn to be an american. bill clinton in south africa, sharing stories with a visit from a personal hero, 94-year-old nelson mandela. and 74-year-old man caught in an armed robbery until he pulls out his own pistol.

i'm wolf blitzer, you're in "the situation room". one of the top men in mitt romney's campaign suggested that president obama is unamerican, then quickly backed off, sort of. we're talking about former new hampshire governor john sununu. >> that's right, wolf. here is what the former new hampshire governor said just this morning. >> the president clearly demonstrated that he has absolutely no idea how the american economy functions. the men and women all over america who have worked hard to build these businesses, their businesses from the ground up, is how our economy became the envy of the world. it is the american way. and i wish this president would learn how to be an american. >> just last hour, here in "the situation room," governor sununu said he was sorry, but he did not change his message. listen to this. >> frankly, i made a mistake.

i shouldn't have used those words. and i apologize for using those words. but i don't apologize for the idea that this president has demonstrated that he does not understand how jobs are created in america. >> all right, lots to discuss. joining us, former congressman robert wexler, a democrat from florida, and republican strategist, nancy poet in our, spokeswoman with the koch industries and former spokeswoman for john mccain's 2008 presidential campaign. thanks to you both for coming in. congressman, i'll start with you. play something else that john sununu, former white house chief of staff under first president bush told me here in "the situation room." >> people should understand that when they hear that ad, all they're hearing is a campaign that knows there is no way mitt

romney has done and therefore they're not telling the truth and the president's not telling the truth. >> referring to the latest obama ad that raises all sorts of questions, none of which prove it. maybe that mitt romney didn't pay taxes, maybe he was hiding money, has something to hide, that's why he is not releasing his tax returns beyond 2010 and 2011. >> well, the issue is actually i think clearer than people imagined, and that is that when governor romney was being vetted by senator mccain to be vice president, he gave senator mccain and his group 25 years of tax returns. governor romney is now the presumptive republican nominee for president and has given the american people two years of tax returns. this is compounded, of course, because this week the romney campaign alleged in effect that governor romney has retroactively resigned from bain. >> is it appropriate to raise questions about his honesty, not

paying taxes at all without evidence? does that ad, in other words, it is a brutal ad released in pennsylvania, does it go too far? >> who created this problem, governor romney. who can fix it? governor romney. disclose the tax return like american candidates, republicans and democrats alike have done for decades, then the issue will be over. >> republicans, as you know, nancy, say release the tax returns, take a hit, move on. >> there are two ways to look at it. first, i don't think no matter how much he gives them, unless he gives every tax return he ever filed they're going to be happy. you know what kind of game this is. i would rather focus on tax returns of the american people and have governor, former governor romney and president obama talk about tax policy like a tax increase that the president is proposing on small businesses across the country. adding insult to injury. there's an argument.

i would say five years and get it over with, move on. >> you would support that? >> you know, i might say go for more than two. i would say this is a little ridiculous. but it is never going to be enough. you give them five, they'll say ten, then twenty. talk about the economy and create jobs in this country. >> on that point, governor romney, even governor sue knew thu said they're not going to release more tax returns. governor romney said he doesn't want to give hundreds of thousands more pages to go through to distort and lie about. if there's nothing to hide, nothing wrong with them, is that a smart defense? >> think of it tactically, strategically. the next three months, it will be about 2010 or 2009. you have the president advocating a tax increase in

we're in the third month of the slowest job growth and the worst recovery since the depression. how can that be a good conversation. >> you talk about the conversation continuing if they release more tax returns. are you surprised, you follow the campaigns, you have been on campaigns. are you surprised how long it has been going on already? it is not going away, despite governor romney saying friday, nothing is wrong with it, hoping to put it to rest. >> they're going to keep punching as long as they can get a reaction. that's why most of us would have said give him five years, then be done with it. again -- if in the obama campaign, why would you stop smacking. >> you make a fair point. it is obviously a sensitive issue. you try to keep it, in the obama campaign, try to keep romney and his campaign on the defensive. the republicans, congressman, they're trying to throw it back. listen to mitch mcconnell, top republican in the senate when he was asked about romney releasing his tax returns.

>> i wish the president would let us know what he knew about fast and furious. he is in office, that's directly related to his re-election, his performance. those are the kinds of disclosure issues if you will that i think the american people are really interested in. the campaign can speak for itself on its strategy. >> as you know, the attorney general of the united states has been held in criminal contempt by the house of representatives, the body you used to serve, for not releasing all of the documents they want in this botched investigation. >> the administration, the white house and effected agencies have issued thousands of -- >> not all of the documents -- >> that will be litigated. but nobody can say anybody is hiding the essence of what -- >> republicans are saying that. >> fine. but the point is that governor romney and the presidential

race, it is not about how the obama people would respond, how the democrats will respond, this is about the american people's right to know. a legitimate condition for president ought to release his or her tax returns for a reasonable period of time. one or two years is not a reasonable period of time. in the case of governor romney, his major claim for being prepared to be president is his experience at bain, experience as a businessman, and that's directly related to his taxes. >> were you involved in the vetting process, why he picked sarah palin as opposed to mitt romney or tim pawlenty? >> it was a tight process, as you remember. i did the first kick after they announced governor palin, and seconds before i go on, have three bios in front of me, not knowing which one goes. it was tightly held. to get to the congressman's point, there's a fundamental difference whether he needs to

release private tax returns whether or not the president of the united states should reveal what they did that arguably violated the law, caused the death of at least one u.s. citizen. i think it is very different. one is about your public office, how you exercise that role, the other is about your private tax returns. if the irs has approved his return and hasn't gone after him, i don't see how you can assume he has violated something. >> it is a serious charge that the obama camp made. look, the obama campaign has to answer some of those charges because of romney campaign making serious charges about them. my only point, it is ugly now, it will get a whole lot uglier. have to leave it there. >> we agree on that. >> thank you. bill clinton is opening up, former president of the united states, talking about an international hero, whom he calls his wonderful friend. the interview with the former president, bill clinton, exclusively to cnn coming up.

at 55 past the hour, two robbers storm into an internet cafe without knowing there was a 71-year-old action hero inside that room. [ ryan ] maybe just a short run today.

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calling the black president an inspiration, wishing mandela a happy birthday. the nobel peace prize winner celebrates his big day with a former president, talking about bill clinton. he visited mandela at his family homestead in a remote village. he spoke to cnn's robyn curnow. he has been in poor health and is rarely seen in public. >> reporter: what has mandela meant to you personally? >> oh, personally he's been a wonderful friend to me. you know, when we were working together, we were both presidents of our countries, we actually had a lot of business to do. often had to do it in telephone calls where it was very late in america, very early in south

africa. i always tried to do the late side out of deference to him. but he didn't call me a single time, not once. when he did, he'd ask about hillary and chelsea. if it wasn't too late, he would ask me to get chelsea, bring her to the phone, ask her about her homework, was she keeping up. you know, i saw in him something that i tried not to lose in myself, which is no matter how much responsibility he had, he remembered he was a person first. then i learned about living through him, living with adversity, living with set back, living with disappointments, living without anger. apart from all of the magnificent contributions he made to free his country, to inspire the world, i learned a lot about life from him. >> do you think you taught him

anything? >> i doubt it. he was a pretty good politician when i met him. i don't know. we did a lot together. i like the fact that he was loyal to the people that stayed with them through the tough years, and i like the fact that he tried to make every young south african feel they could be part of the future. i never forget a friend of mine was a minister, still around, an american minister who was supposed to shake hands with him in the airport once. he was watching him watch across the lobby. he went up to a little girl who happened to be white, blonde hair, blue eyes. he asked her, he said do you know who i am. she said yes, you're mr. mandela. you're my president. he said you can be president if you study hard. you know, he was always trying to bring people in. >> reporter: you said when you

were with him, you feel like you want to walk a little taller? >> you do. the great gift he had was not to be a great person but to make you want to be a great person. he made everybody else want to be bigger. you're always thinking if he could do this, he could endure this, have a smile on his face, song in his heart, didn't matter what was going on in my life, would make everybody want to be bigger. it was an uncommon gift that i somehow hope we'll all find a way to keep alive forever. >> remember visiting cape town, interviewing president mandela, went with president clinton in 1998. one of the most moving experiences i had as a journalist. >> one of the most memorable interviews, i'm sure. >> almost single-handedly prevented a bloodbath. amazing. >> turns 94 tomorrow. >> great man. other news, a traumatic

story. a girl falls from a third floor window and survives because of a neighbor that's a good catcher. he tells us how it happened. ans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, it helps pick up some of what medicare doesn't pay. and could save you thousands in out-of-pocket costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients.

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this next story gives a whole new meaning to the words being a good neighbor. when a girl fell from a third-floor window, she was extraordinarily lucky that a local bus driver was very close by. our own mary snow spoke with the man who proved to be a life-saver. >> reporter: well, this it community here in brooklyn's coney island is grateful tonight for a man they're calling a hero. he says he just happened to be at the right place at the right time. a 7-year-old girl standing on top of an air conditioner three stories from the ground. steve st. bernard, a 52-year-old bus driver, was coming home from

work when neighborhood children alerted him to what was happening. he quickly ran underneath the window. >> i asked god. i said, god, let me catch her, please. don't let me miss. >> reporter: the girl is described by those in the neighborhood as a special needs child. and st. bernard says she was unaware of the danger she faced. >> really, i was sweating, and my heart was racing. i felt like i was going to pass out. before it even happened. because it's like she is taking too long. it's like everything was like slow motion. >> reporter: st. bernard says the girl was standing on the window air conditioner for an excruciating seven minutes. in that time, deborah reid says she ran up three flights, and banged on the door of an apartment. >> the mother came to the door, and i asked her, did she have a daughter, she said yes. and that's when i let her know that her daughter was playing on the air conditioner outside the window. >> reporter: but it was too late. the girl fell, but luckily, st.

bernard caught her. >> it felt like a ton. a ton of bricks. like i just -- a whole bag of rocks was dropped on me, boom. and we went down together. she touched the floor, but she didn't -- there was no impact on her. it was me and her going down, but i guess i absorbed the blow. >> reporter: both st. bernard and the girl were treated at a local hospital and released. child-proof bars now cover the window where the little girl got out. her mother told wcbs in new york she thought her daughter was asleep and blamed a defective air conditioner that was installed days ago. as for bernard, he injured his arm and can't work. >> this is the little garden i started for the kids. >> reporter: neighbors say the father of four always stood out, because he helps children. and he's especially being recognized now. >> you're a hero, man! you're a hero. >> it makes you feel okay. but i know it's something i would hope -- it's an instinct.

if you have kids or you love people, like me, it's something you jump into action real quick. >> i am so thankful everything turned out well. i really am. >> reporter: what's unclear is how this little girl was able to get out on to the window on top of that air conditioner. that's something the city's housing authority wants to know, as well. wolf? >> mary snow, thank you. that guy is a hero. >> my goodness, what a hero. what a wonderful, wonderful, man. exactly. well, wolf, you were there, and you know this, and you even took pictures. but up next, the story behind the obamas' smooch. >> i was there? but one dark stormy evening... there were two things i could tell: she needed a good meal and a good family. so we gave her what our other cats love, purina cat chow complete. it's the best because it has something for all of our cats! and after a couple of weeks she was healthy, happy, and definitely part of the family. we're so lucky that lucy picked us. [ female announcer ] purina cat chow complete.

always there for you. ...more talk on social security... ...but washington isn't talking to the american people. [ female announcer ] when it comes to the future of medicare and social security, you've earned the right to know. ♪ ...so what does it mean for you and your family? [ female announcer ] you've earned the facts. ♪ washington may not like straight talk, but i do. [ female announcer ] and you've earned a say. get the facts and make your voice heard on medicare and social security at earnedasay.org.

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are guaranteed for life, or they're on us. these are just two of the valuable features you can expect from liberty mutual. plus, when you insure both your home and car with us, it could save you time and money. at liberty mutual, we help you move on with your life, so get the insurance responsible drivers like you deserve. call us at... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance, responsibility -- what's your policy? i tell mike what i can spend. i do my best to make that work. we're driving safely. and sue saved money on brakes. now that's personal pricing. two men who tried to rob an internet cafe in florida

probably should have cased the joint first. i guess they learned their lesson. check out this security camera video that we have. one of the suspects has a gun. and then a 71-year-old customer suddenly pulls out his own pistol, and starts shooting. you see him right there. the suspects were arrested and treated for bullet wounds and probably learned not to mess with that man or that internet cafe again. >> he's an action hero. i went to see the u.s. men's olympic basketball game last night, an exhibition game against brazil here in washington. the president of the united states and mrs. obama were there, as well. and all of us over at the verizon center here in washington got an eyeful of the first couple. here is cnn's jeanne moos. ♪ >> reporter: when you see yourself on a kiss cam, especially if you're famous, like tom hanks, you better pucker up or you'll get booed. something president obama learned the hard way when he and the first lady kissed their first chance goodbye by not kissing. [ booing ]

>> reporter: but in the second half, they got a second chance. >> now! >> reporter: wait a minute. there are no do-overs on the kiss camera. that's not allowed. but the president got a pardon, and his do-over got rave reviews. >> woo, hot in here! >> mr. president, get a stadium. >> reporter: new york's wpix, they micro analyzed the body language. >> look at how they hold each other, okay? when they look at each other, they gazed before they kiss. which is really intimacy. and then look, she holds his fingers. >> reporter: one of the few people not going gaga was the unsmiling secret service agent watching the president's back. mitt romney's wife knows how to cuddle up against her husband and warm up both him and his image. but it's tough to compete with the lovely-dovy-obamas. ♪ and here we are in heaven >> reporter: that's why what one

website called the kiss cam whiff was so surprising. michelle obama resists barack's advances to which the white house replied, reports the president was rebuffed are false. the spokesman says the first couple didn't realize the screen they were on was the kiss cam. boo! they didn't realize how halftime when their daughters who arrived late, asked why they hadn't kissed. the press pool had already been taken out of the arena to wait for the president to leave. >> and then the doors to the van opened, and they said, you know, is anybody interested in going back in and watching the game? >> reporter: the white house says the press pool was not brought back in to record the second chance at the kiss cam. but the pool sure did return conveniently in time. love me not lasts forever, but kissing on camera does. we're still dragging out that old al and tipper gore liplock. the one reenacted on jay leno's show. >> what are you doing?

>> reporter: while many were smitten by the obamas' belated public display of affection. >> and this is true intimacy. >> reporter: one critic noted, i have something else he can kiss. jeanne moos, cnn. ♪ >> reporter: new york. >> nothing else to say. let's leave it alone. erin burnett, "outfront," starts right now. "outfront" next, fed chair ben bernanke made two things clear today. the economy is in bad shape, but he is not going to throw more money at the problem. yet. america can america get off its addiction to ben. and mitt romney standing his ground refuse to go release more taxes, calls reach a deafening pitch. today he gave another reason why he shouldn't have to. and an exclusive investigation into the risks of off-shore drilling. we went outfront to the arctic. shell has a plan to prevent the disaster like the one that happened to bp and the deepwater horizon. does it add up? let's go "outfront."

♪ "outfront" tonight, ben bernanke says no to the addicts. addicts that are desperate for another hit of the fed's drugs. today in hearings on capitol hill, america's top banker, the chief of the federal reserve, got more negative on the state of the u.s. economy. >> given that growth is projected to be not much above the rate needed to absorb new entrance into the labor force, the reduction in the unemployment rate seems likely to be frustratingly slow. >> so what's the solution? well, in note after note from wall street economists and traders today, i read something along the lines of this. bernanke will launch another round of easy money to help the economy. it will bring interest rates even lower. it's just a matter of time, he'll do it, he'll do it, don't worry. that's the kind of talk the addicts use. yearning for more of his powerful drug, which is essentially just cheap, easy money. so many were hoping for another shot of the goo