neil: do not assume this early on barack obama scores. i am neil cavuto. what to make of a president more popular after the scandals broke than before, hard to say, but this much is not, taxing as irs scandal may be, it has prooen not too much for most americans, does cover some of the period in which scandals blew open, not just irs craziness but the justice department targets ap reporters, and benghazi

revelations, obama administration will take such news as a time it can ignore republicans trying to make -- if memory serves me right, what does not stick now sticks later, watergate comes to mind, after the watergate break in, in june 1972, richard nixon felt no pain that year, and en route to a reelection landslide later that year, then it sank in and richard nixon was on his way o out. so that is the thing about scandals they are like that guest that refuses to leave your party, and starts ordering pay-per-view, raiding our triplefridge, they stay, a stin. no one has any idea what is

coming to trent lott, and warns president not to get too cocky, senator. the white house is looking at poll numbers saying we just dodged a bullet. >> some democrats in congress are probably doing that too. but i would cushion them about, polls are a little bit of a llgging indicator, i'll be surprised if a week or two, if his poll numbers are still where they are today. neil: you need something to make them go down. maybe the public has determined, one thing i found fascinating they don't like the irs thing. they think is smmlling to high heaven, but they do not attach the president to it. >> well, but the benghazi thing, you have to look beyond the headlines about poll, look down into the polls people are not satisfied with the way that obama administration has handled bebenghazi and they are

uncomfortable with the irs anyway. that has had longer time to have an effect. then you throw in this i think it is becoming a culture of intimidation and harassment. going beyond just irs, now it is the ap, interesting to watch news media say, all of a sudden, wait, we don't like the looks of this, when it affected news media too. neil: you are right. you need something there to be there, you need something to stick, otherwise these are a lot of scandals and messes but, and @%barrassing at that i don't recall we had so many at the same time attached to the white house. but something has got to stick that00s of white house -- that hints of white house direct involvement or worse cover-up. >> they are saying now we didn't know that. they don't know anything about what was happening in benghazi

at the state department, they don't know what was going to at irs, although there are signs that are coming out maybe that people in the white house or in obama administration did know earlier, you know, that was justice department not us on ap, but they have acummulative effect that people say, wait, is this a competent add administration. neil: do you worry that risk is republicans get too overzealous, and they kill this. because they look like they are too opportunistic. >> that is right, they need to be careful, i saw senator blunt on the fox earlier, taking just the right tone, let's not turn this into what looks like partisan politics, let's do our jobs, and keep asking questions, and push forward, but don't let it gets like it is just politics, what went on with irs, was not -- it was politics all

right, but politics at irs, most dangerous entity and agency in the federal government. in many people's minds. neil: you mentioned irs you hit the nail on the head they scare the you know what out of people, senator thank you, trent lott. >> good seeing you again. neil: if you are the white house, what don't you want to see? anything that would keep the scandals drags out, which is why obama administration circumstance poses a look at a special prosecutor. with me next, robert a. what i remember most about robert, no show from you, no hey, look at me. you deliberately held back, when it came to looking at whitewater for example, you said there was no there, there. right? >> right, because it comes with

the credibility of a full investigation to be able to say, we have looked at it carefully, it takes courage to say, but we're not going to go forward, no charges will be brought. >> but you did leave out something that also had come to your attention that others seized on after. >> you right, sure. neil: you didn't think that was jermaine that is the affair part of it that president clinton. >> that was the more complicated question whether which was a crimit was a crimecommitted. neil: but let me step back. senator john mccain was saying, we need at least a special panel to investigate benghazi, call everyone back, hill clinton as well and reexamine, requestion. that is one step sh shy of a

special prosecutor. >> that is probably right, you briing people in, and you put them under oath, you can decide later whether any crimes have been committed. that would be true with regard to high level government officials. >> justice deputy said it reached that level, at least irs for itself to look at a criminal investigation. >> they looked that the from stain point of inspector gener general. whether or not prosecutor get involved. neil: what did you make of chief council at white house not passing along to president there was this discovery at irs. >> on one hand, part of the

white house council's job to make sure that president does not get surprised by anything, it looks like advance warning that an ig report was nearing completion. neil: lanny davis said she should be fired. just for not passing it along. >> white house's position, at least, superficially has merit is wait, if we were to step in, -- that would look like interference. the obligation is to keep client informed the klein is the president, if you keep the president informed that leads to possibility there could be interference. neil: i don't understand that obama administration says we're on top of this, we'll be exam inning in. -- examining this, it rookie smf fox guarding hen house.

it doesn't pass the smell test. you are will legal expert. >> i think there are a lot of people that are coming to that conclusion, but senator lot. neil: do you think they should have a prosecutor. >> senator lot is right, people should go about doinggthere are jobs, you have to reach a point where you have explored other alternatives. neil: isn't that the benefii of prosecutor takes burden off of the ages, and agency, and however long it takes they work on and questioning and investigating, you go on with your business? >> public sent am seems to be in direct was not a huge amount of appetite. >> yet for a political scandal. >> public sentiment has a way of changing if public senses that

there is a there, there, it is not just about politics, that public since am will change. neil: did you get heat when you came back to the american people and said, i don't think i have enough to make a case? >> sure, it is a tough call to make, you are trying to make the right call and do your job. neil: administrationin fearing they have to get something on them, right, not all guys like you say i'll investigate blindly, and impartially, if i don't see anything i'm walking away. >> and experience with "scooter" libby who had serious questions about appointment of special counts, once you put one in place. they look for something to prosecute. neil: then it may get out of control. >> other things that are collateral to the center purpose for which they were appointed. you are accountable to the

american people, you try too make the best call you can, the difficulty is there is an incentive created with a huge amount of power that cams with it. to fine something when there is no there, there. neil: does the prosecutor, in you, raise questions over just that, that warrant follow it, either more hearings? more investigations, something does not smell right to you. >> there is clearly a political issue. that is sufficient this pressure was turned up enough that people's story should be locked and testimony under oath, and is usubpoenas issued. if people have possibly crimes have been committed that will warrant a further investigation, and perhaps criminal investigation or

appointment of a special count. neil: they stumble upon stuff. in nixon case, they said eoh, have you a taping system in the white house. so leads. >> you don't conduct investigation for vist the -- for the sake of investigations. >> what if you stumble upon that. >> then you deal with it the question is, when and if you stumble is it important enough to to something about it. sometimes you have to let them go, sometimes they are important enough. neil: president dodging a political bullet on this his poll numbers are holding early. where do you think it goes. >> hard to say there is a lot of activity very early in the president's second term. neil: yep, a long way to go, robert ray, former whitewater independent counts. neil: remember the tea parties,

now tee off party, folks targeted by irs are going after the irs. >> push to cut spending getting pushed aside. by all of the scandals. ike us these chimpanzees are. [ laughing ] [ woman ] can you hear me? and u hear your voice? oh, it's exciting! [ man ] touchdown confirmed. we're safe on mars. cheers and applause ] ♪ hi. [ baby fussing ♪

neil: the irs smacked them down, now they are luring up. jordan is representing dozens of tea partiers getting ready to sue. >> we're putting together since last time we talked we added a number of client, we were at 15, we're now over 20, we either going to feel likely federal court, not probably as a class action but a number of plaintiffs, partiesing it, toward the end of this week or next, we have thee challenges, first focus groups we representative, one albuquerque

tea party in new mexico that dates back to deb december 2009, they have not been denied but they have not been approved. it has been too long, statutes provide for that courts can intervene at this time. and also monetary damages as well. for those who may have already been approved but were not approved until well after we're talking 2 1/2 to 3 years, when i have noticed in the aclj, number of attorneys that we've been working with various client, the interest level those who are ready after they saw the hearing, they were already upset but they saw hearing, have you more people. >> you are right, they are right to be peeved, you are accurate to say they have every right to sue. but suing, the government is a

up hill task, irs almost impossible, irs can apologize to you, if you owe back taxes, i've tried it you cannot apologize to them, having said that, and knowininging task you are up ag? >> it was not a one-off, these individuals have similar questionnaires, not just one was on the, not just people who went to one person in a cincinnati office but including irs headquarters, officers in california now famous cincinnati office, and irs admit to the wrong doing but as story unravelled. which we knew it was not just in cincinnati we have letters, we provided home fox news, everyone has seen those, the attend of the -- extent of wrong doing,

and irs admitted and has gone halffway, you had acting commissioner say in his opinion it was not illegal, he may be thinking criminal,,that is a separate issue that is prosecutors. neil: has the justice department helped your case by launching a criminal investigation? >> sure, that is certainly, the fact that was a attorney general holder's first statement we'll launch a criminal investigation that heightens the level it makes sense that government, you know it is almost immune to most part with severa sovereign immu. these are costs that people put on their credit card, what they file their applications, they may have paid fast track fee, now their years lat later, you w not such a fast track.

after 270 days, that is when courts can get involved. neil: thank you so much jordan. >> thank you, neil. neil: never went to college. now worth a cool $200 million, and all of 2 years old. yahoo! billion dollar deal for tumblr . ouble miles from their cital one venture card to fly home for the big family reunion. you must be garth's fher? hello. mother. mother! traveling is easy with the venture card because yu can fly airline anytime. two words. double miles! this guy can act. wanna play dodge rock? oh, you guys! and with double miles you can actuay use, you never miss the fun. brd growing conte and go! ♪ win! what's in your wallet?

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>> yahoo! will for you. it mines money. never mine tumblr is yesterday to land on that cash making concept on its own. she must see something, yahoo! is paying $1.1 billion in cash

for a blogging site more than 6 years old. and david carp is 26 years old. when you hear vista is buying up websense, you get that 1990s web deal deja vu that i am. two nyse trader. he made his fortune selling his company, ble blue lithium to ya, you see this hear this, day ja view to you, yahoo! not a great track record on making them work. >> i think marissa is a different structure, in building something for long run. she will reinvigorate yahoo!, i think it is a great transaction, you look at youtube and google,

everyone said a billion for something only 18 months old, now you know several years later, it is 700 million in profit. and 4 billion in revenue for google that tells you why. silicon valley if it picks right winners, it shoeing to invest in them -- if it choosing to invest in them. neil: the check has cleared for you, right? you were brilliant at that time. >> not even about, that market has changed. >> that is where there are doubts, because, tumblr is that a hundred million users, yet to capitalize off that. it seems like a few more possibility. >> what i know about tumblr, is unfortunate, i can not imagine any merchant wanting to align their product with some site on

tumblr, sites involving cutting and suicidal tendencies and it is graphic, what product out there is -- will want to have that connectivity to that. so, is pfizer going to direct market to the people on the site? it is a tough run. when you see sites like geocity or myspace that people like their independence, soldur or up sold, i don't know how well, that will be taken. can part be taken to next level, possible but some creation, the essence of where tumblr came from is a frightening place. neil: what are pros and cons? people lighten it back to internet boom. buckle up enjoy the ride.

>> tumblr 13 million in revenue last year, estimate they are going to do a hundred million this year. neil: revenue. >> if you look at what the means of both of them combined could do, you look at what tumblr is good at, attracts top 10 globe at brands. neil: the brand of those people, you are the brand behind your company, you didn't stick around. >> it was a different time. >> nothing against it, you were the real iconic figure. >> it is different. neil: i don't know that it is, where are they in new york? so, they could just bolt, they got their money they go? >> i think it is the mines of what you do, i think that marissa is taking a leadership approach, have you valuable data, brands publishes and consumers, you could say there race racey content, so does fac,

so does twitter. neil: you think this is going to work. you have serious doubts about it will, what about that larger point where a new boom is on. >> i've been looking for a market top of for quite a while. however, when we start to get into area whereewe start -- very were feel to me 1990, i think we mentioned that last time we chatted this market has some tendencies. neil: nothing like it was in early 2000, but we're clawing our way back into that neck of the woods. >> when central banks of world trying to inflate assets. neil: that is the win at the back. >> i don't think that applies to tech, tech is by en no vague, i am in the valley, i've sign, back then, i had my first company, i saw the trend, have you anything with a dot-com name attached have you funding, you

have to have substance, and traction. >> i'm not blowing you smoke, you also have a brain, i witnessed and talked to a lot of kids. i mean no offense, i am complimenting you, i talked with a lot of kids, earth web 20, they were idiots, you know they would tell me it is no longer price earning it is price to potential, price to promise, that was navy a naifer atnaive . >> i'm waiting for machine to say it's different this -- i'm waiting for someone to say it's different this time, then i see a market top. neil: you don't buy that? >> right now, talk about facebook and how successful it was, it was not a great idea to buy facebook on the ipo. neil: a few months later it was. >> yes, but you had to endure, the same with the . >> you are not a buyer?

>> i am not. >> you are not a seller. >> no, i think that the opportunity of what we'll see in next 12 to 24 months looking at growth of mobile, and users, revenues, i talk with brands all day, rating one isn my third company, dollars are there, a industry that is growing double digit, billions of dollars coming in that is what people are investing it, it not hype, i have done through that phase. -- i have been through that phase, i don't feel that. neil: you don't stick around. >> you know if the right opportunity is there, anybody will stick around. marisa creates that opportunity for david and his team. >> yahoo! deserves credit, they have -- they can look under the hood and see what is there. neil: still early on. thank you, fair and balanced look at this, here is the good

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expected budget news, dave walker said it has given up on us, day of. i think what i predicted would rangel and you this idea we have 682 billion deficit, that's all, we should just party like as 1999, and you know, i guess after trillion dollar deficits year in and year out it looks great, but is at any time. >> no, it is a fall sense of security, it has come down we're getting a little bit of economic growth, but it is still anemic, and a jobless recovery. we have one time revenue infusions from fannie mae, and freddie mac, these projects over overtime assume that the sequester will stick. here is the question, they have not dealt with three drivers of the disease. that is. social insurance program, health care cost, and need for

comprehensive tax reform, unless they deal with those we can't celebrate anything. neil: as you point out even the obama administration revealed, it is wored withed about -- it s worried about 2016 and after when this comes back to hit the fan. but no one is addressing that. what do you think of that when both sides declared not only no mas, but no bother. >> we can push it out to october, maybe november. i think what we should shoot for it the following given the current issues, a phase one of social insurance reform focus on some things that president obama put on the table for medicare, and social security, that you can get bipartisan support. i think we need to replace sequester with more intelligent, and targeted spending reductions, we need to agree on

the need for comprehensive tax reform by a date certain with a target and aim of revenue coupled with degree for 6 round of spending reductions with a target aimed o amount of reducta date certain. neil: they are not doing that. what happens. >> then we'll continue to skate on thin ice, and see what happens, richard fisher, a friend of mine, president of federal reserve in dallas said, once the federal reserve starts pulling back this 85 billion a month ste stimulus, we'll feel e need to put our finances in order phased in overtime, we don't need austerity we need more investment in critical infrastructure, but we have to address the three drivers even if we phase in the changes overtime, we're treating the disease rather than the symptoms. >> you are right on all of the above, david walker thank you so much. >> good to be with you. neil: get ready for ow up 20%,

it is closing in. so do you just take our provey and the check out? we dig. you decide.

neil: let's get ready to party likes it 1999? okay how about 2003. either way, dow is north of 17%, doing more than 4 1/2 months what most market bulls dream of seeing in a furl year or years, keep in mine the dow had a twin 20 plus percentage gain was back in 2003, or 1999 it rocketed 25.2%, are you buying this? >> i think market is going hire near-term, whatever the fed has

been doing has been working but you said it best. to go back to beginning of time in market we've done about 3 years of return in a 4 machine period with no -- 4 month period with no series, sales growth, right now the market still has momentum, now oil stocks are coming to the fore. that is a good market. >> just follow the tape, i guess, gary? >> i got if different from gary k, i agree, he thinks we ready for a pullback, i don't know when i'm afraid it might be severe, i can't find anything to buy, you implied. market is kind of parabollic. forget 20%, we're on track for a 40 percent year, we have not done that since mid to late 90s. neil: we could stay flat from here on out, and have a respectable year. >> yes, i tell if you we stay

flat, i think that is the best case. i just don't see it happening. neil: yeah, there are big finishes to the down side like 2008 we are showing in middle of meltdown. >> issue 2, or deere, not just deere, caterpillar warning that the economy is slowing, that is why business is dipping, gary k what is going on that separates from these markets. >> you know, i'm a big believer in technicals of market, but when all said and didn't tell be about earnings and sales growth, not just caterpillar but many others, many areas of europe are in a recession, and markets have been soaring there that is where i think that market will say, wait a minute we have to deal with valuation of the market and earnings and sales, and just not happening so, i am in aagreement, i could there will be some issues not sure when. neil: you know gary b, one thing that i noticed with cat, like deere, not much emand for stuff

abroad in in asia in cat pill or caterpillar's case -- do you worry? >> absolutely, look. you know gary k made the come that you know earnings, and growth here are kind of abysmal to be honest. if you are not seeing growth here, and no growth in europe, where the heck is the growth. neil: that is worrisome. for the stock market. neil: the hack is back, in case you thought china was hu humble, after being fingered out, now china is giving ut the finger, here they go again? >> you know, i think, i'm surprised that this story has not gotten more press, we've -- that is like world war iii. we're talking there is the whole

cyber terrorism, this is world war thre iii, if you want to sht down, anileiate u.s., you go for the infrastructure, you niederaur to fire a single -- you don't need to fire a single missile that is why this is troublesome. neil: i am surprised, oh, you mean that was your defense system? they don't care. they seem to have our number, and keep jamming it down our throats. >> i think they are almost laughing at us. all we do is quietly jawbone, the obama administration came out said we have to talk to them to make sure they know that it is bad, what they are doing. there has to be real serious repercussions. neil: what would they be, how

would you tell chinese, enough, do we stop buying their cheap crap or what? >>i don't know. because, at this point in time, you know, we owe them so much money, interesting point, the company in the middle of shanghai or somewhere in a building, and last thing i read was, they are going after our pour grid -- power grid, imagine, can you imagine repercussions, almost like until something bad really happens we'll keep it under the rowg, rug and not worry about it. neil: they went after tumblr too they could have saved yahoo! a big headache, gary b . >> if i had a son or daughter ready to go into college, i would put them in computer sciences, we'll need, professional hackers, we need to come up with those. neil: that is what i should get my kid into just hacking, have at it. >> fight hacking with hacking.

>> thank you very much. and meanwhile did the ceo of spirit airlines just say up chuck? & finance. welcome the state where cutting taxes for busisiness... is our business. welcome to the newuffalo. welcome to the new buffalo. weome to the new buffalo. new york state is throwing out the old rule book weometo give yourbuffalo. business a new edge, the edge you cannly get in new york state. to grow our start your business, visit thenewny.com bjorn earns unlimiterewas for his small business take theseags room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth why settle for less? ahh, oh! [ garth ] great businesses deserve limited reward here's your wake up cl. [ male announcer ] get the spark business card from capit one and earn unlimited rewards. choose double miles

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>> all at once, 4 of major airlines jacked up their fees, their changing fees, to $200 a ticket. bottom line. every week airline find a new way to nickel and dime passengers, it is just getting too be too much. neil: i think 24 hours passed before chuck moved up to a microphone, chuck schumer blasting airlines for hiking fees, imagine what we would say to spirit ceo. >> we have a carry on bag fee, had we not imminented this there is no telling what people would

try to put in an over had bin. neil: that is the head of the company, i admire that how many bosses have you had you want to stick them in an overhead bin, not here! can you think putting -- uputtingrupert? anyway i digress. >> we think that is misguided in a couple ways, it is misses a component of what airline business is about, a spillable product that seat is held but not paid for or changed. the abilitt to resell it goes away that say problem. and a almost, i hate to see this somewhat elitist, i like senator schumer. neil: you don't like him? really. >> almost like saaing i'm going to levee a tax on all consumers those who change their mind can

do it for free. neil: i think he is saying, in prproportion to reality, does ts make sense, who'll have a $200 fee to change your reservations, when there is no way in heck it costs that much. >> it may cost that much if by -- >> come on. >> here is why. neil: you will feel the seat. >> what if you change your mind 24 hours before you get to the airport, you could have sold it for 300 if you are an airline like american or delta oh, unighteunited a. >> $ 10 for a boarding pass. >> if a human prints your boarding pass, but not at the kiosk or on-line. neil: where does it cost you $ 10? >> if you go to an agent. at spirit we give you economic

incentives for civil service, if you do it yourself, you can help us save money we'll pass it to you. neil: how many of your flyers, i know have you a loyal following, some might not know. they pop up there is a i see you have a bag or you also, you know have this. and that, and you want your boarding pass printed out before you know it is $1,000 to go to miami from fort lauderdale. >> when you look at dot data and total price customers pay on spirit, their fare, and extras -- you look at fare and extra charges, and everyone else our fares are lower than everything in total. neil: i think what chuck schumer is saying, you are right, no politician should regulate whether a business to make it is a free market, if they don't like spirit they won't fly spirit.

but what he is saying, i think you have to cool it on the fees. >> in 2012, the domestic u.s. airline industry made about 4%. so -- neil: on? >> return. so to means they did not collect it in ticket price. if the airline industry were making 30% returns that might be a valid argument. if you remember, back in 1978, government deregulated pricing in the airlines, and the law at that time, as it states now, regulation by the ta dat has toe for fair o or decent deceptive . neil: i think they had a pang of

guilt. >> i think they did as well. but you know one reason we don't have pangs of guilt at spirit our fares are so low, and total pricing are low. neil: your people are happy, do you drug them? >> they are saving money, verse their next best option to fly. neil: you do spell it out, you can choose or not. he is saying we have to police this better, you stay out. >> i say marketplace will decide it, that is pricing regulation that way back in 1978, and late customers vote with their feet. neil: i find it odd someone who is in senate electionturing anyone on fiscal countness. >> if chuck schumerments ts want taxes. neil: maybe you could put him in an overhead bin, that is an image i would like to see. thank you to so much.

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neil: and the loss of the law of the justice department and the irs and government agencies not doing much with you and me i can imagine if this goes much further or not but the damage isn't already done with the trust of government agencies. >> thank god it has. rather than to use this as an excuse to demonize the administration or the democrat party, the country will be best served with a catalyst to show how important it is to limit the size and scope of government neil: from the small business perspective you

talk about the rules and regulations and the burdens and now we get insights into the folks requiring all that if they are remotely at the call. >> our clients are always crying out for smaller government, budgetary reasons, regulatory reasons because it suppresses the free market now you can see how large government is difficult to manage whether the treasury department, the ira's scandal, secretary of defense, defense departmmnt, the government has a hard time managing the largess and resources and the people underneath it to make sure they're doing the right thing. neil: i don't know if there is an appointment of a special prosecutor or get a special select committee to investigate but it has tax confidence even though one of the surveys that came to the irs three out of four said they don't trust them or don't like them or don't

have much confidence. >> i am sure that was true before this. this is been a bad couple of weeks for the white house. neil: there is a lack of faith in institutions beyond the white house. >> but the relationship with how they are viewed with the american public has never been a good. neil: it is particularly bad now. >> that we attach the word is scandal the bar for what is a scandal has or tremendously i am not trying to minimize. neil: you don't find it scandalous or a scandal when a group is targeted? >> at the core, i'm sorry the irs. neil: the irs regretted targeting a group of fat is in the scandal then i am michael phelps. >> the targeted them to do what? to do their job provides

carney it should noo have done. >> your litmus test was anything but that was your litmus test. >> it was wrong but remember, what did they do? they did their job. neil: you are out to lunch on this one. >> what they did was to provide an equal treatment under the law which is completely counter to the constitution. people were treated differently based on their political views that completely degrades the foundation the way the american system of government is supposed to work. neil: this is the same group that will oversee health care and the woman in charge of targeting of the conservative groups is among those heading up the health care division of the irs that does not have a great deal of confidence on my

part. >> rid of the american public is clamoring for smaller government and this is an example of washington not being able to manage itself and targeting individuals and investor groups and those that want a smaller government it is of problems so we want smaller government and smaller deficits and spending. neil: the irs is a tool and it even gets to that level but do you think for people to reassess government or have more faith in government? >> it says nothing about more or less government but that it works well and is accountable and quite frankly to look to these various issues it does show the system is working. they are getting to the bottom of what happened in these issues and people are held accountable. neil: after it watergate it never happened again we stumbled upon it. >> to think any institution

whether government or corporation will never make a misstep is not serious. neil: i wish we could continue we will follow this in pursuing this. all over this. >> i am gerri willis on the willis report. >> your medical privacy at rk, we hav a speal investigation to what is happening to your mecal record, and irs sd it will not have access to your med cad -- medical record in the age of obamacare, are they telling the truth? areonsumers getting the truth when i comes to sun scrn? we're on the face tonight in the willis rept. >> we are following a breaking news story out of oahoma city, a mile-wide tornado suck