thank you for joining is. have a great night and we will see you here tomorrow. ♪ lou: good evening, everybody. tragedy's tracking the nation's capital today after at least one gunman went on a shooting spree after -- at the historic u.s. navy yard in southeast washington d.c. tell people were killed. a dozen others injured. the suspected gunman was shot and killed. he has been identified as erin alexis of fort worth, texas, a former naval reservist. authorities are still or searching for another possible accomplice who may have been disguised in a military-style uniform. early authorities were looking for two other suspects, but they found one of them and ruled him out as a person of interest.

full coverage of the shooting rampage here tonight. also, we will be bringing you a live report about what federal health officials now classify as an urgent threat to the health of all americans. the centers for disease control have issued a landmark report estimating for the first time ever how many people died from drug-resistant bacteria each year. the numbers are truly startling. john roberts will have that report from the centers for disease control. and clearing skies in colorado have given officials a first look at the devastation after a week of torrential rain and what some have called the local flooding. at least seven people are known dead. more than 600 people are unaccounted for. more than 1,000 people remain stranded, needing to be rescued. the rain and flooding destroyed or damaged some 19,000 homes. the latest on what is now the largest aerial rescue operation

since hurricane katrina. in the latest from wall street where today the dow jones industrials rallied. the dow up triple digits after former treasury secretary larry summers took himself out of the running to lead the federal reserve. investors are interpreting the results of this withdrawal to be continued easing money policies and the rally ensued. we begins tonight with the tense day long drama after u.s. navy command complex in our nation's capital. shocks -- shots rang out. eyewitnesses describe a six-foot tall ball african american carrying an ar-15 semiautomatic rifle. he was later identified as air alexis, a former sailor who is to test from service and to those 11. washington d.c. mayor vincent gray acknowledged that no one

knows what could have led to the shocking tragedy or how many people are involved. >> many people have asked us whether we think that there is terrorism involved. we don't know what the motive is at this stage. obviously we will continue to seek information about what the motive is, but we don't have any reason at this stage to suspect terrorism. certainly it has not been ruled out. lou: this is the worst shooting rampage since last december's massacre. twenty children and six adults were killed. this is also the deadliest on the u.s. military installation since 13 people were killed at fort hood taxes in 2009. as mayor gray said, the motive behind today's shooting remains unknown. survivors and relatives of those killed at fort hood say today's attack at the navy yard brings back tough memories for them. many of those families still

petitioning the government to change the classification of that shooting from an act of workplace violence to a terrorist attack in order to receive more benefits and combat rent--- combat-related pay. president obama forced to address today's tragedy. the fifth anniversary of the start of the great recession. the president expressed sympathy before going ahead with the speech containing deep partisan attacks against republicans ahead of next month's budget and debt ceiling deadlines. fox news chief white house correspondent ed henry has our report. >> it was supposed to be yet another pivot. this time trying to shift away from syria. although with a mass shooting at the navy are delaying his remarks briefly, the demint -- the event became a tribute to the victims with the pit into a series of attacks on republicans >> we will do everything in our power to make sure whoever

carried out this cowardly act is held responsible. in the meantime we send our thoughts and prayers to all at the navy yard you have been touched by this tragedy. >> after a brief mention of syria the president marked the fifth anniversary of the financial crisis by unleashing a series of attacks alleging republicans are not focused on growing the economy at this moment. >> i say at the moment because i am sttll open that a light bulb goes off here. some of these folks really so beholden to one extreme wing of their party that they're willing to take the entire economy just because they cannot get their way on this issue. >> the president managed to work in an attack on mitt romney over health care. >> an issue in last year's election, and the candidate to call for repeal lost. >> today about the town of those remarks in the middle of an active manhunt. the white house did not consider calling off the speech and said

it was appropriate to keep the pressure on republicans over the looming budget crisis. >> they insisted on a process whereby budgets were passed in the senate and house and now republicans have blocked the process of reconciliation. >> the bigger challenge is heat from his own party. house democrats who defied him over his push to get congressional approval for military action against syria to senate democrats who are intent on blocking the potential nomination of larry summers, prompting him to abruptly pulled out of consideration for the chairmanship of the federal reserve. an urgency in just over the last half-hour or so. two or three loud pops heard on the north lawn of the white house. you probably see some of those pictures. the secret service took this seriously. many officers with guns drawn. torras ceiling after they heard a loud noise which sounded like gunshots. the secret service spokesman as telling us that it was some sort of fireworks, firecrackers turn over the fence toward the

residence. bottom line is the lawn is still cleared out of an abundance of caution. the secret service investigates to make sure that there are no weapons. there is one person who is in custody. lou: there is every reason for an abundance of caution. thank you very much. clear and convincing evidence that chemical weapons were used during an attack and syria last month. the report fails to point and just to launch the attack. that report comes after a weekend agreement between u.s. and russian emissaries to and the syrian chemical weapon program. joining me now former federal prosecutor. the prosecution of the 1993 world trade center bombings and former pentagon official katie

mcfarland. let's start with the weekend agreement. your reaction? >> i think obama was bailout. it will be at a price. we have yet to see what that is. at a minimum is going to be the syrian leader stays in power. what concerns me in the immediate sense is what president obama is down in this agreement about syria is to say we are not going to use force. the united states defers the use of force until something comes out. so in effect what we have done is outsourced the decision on whether to use force. i think this is where the big price is, what happens. the important meeting is happening. the iranians and russians are sitting down and there will talk about the air defense system. why this is important is it becomes more less and vulnerable

to an israeli attack. let's say this all syrian thing strings out for nine months to a year. by then russia will have delivered this it defense system and he wants syria. at the end of all of this. >> the deal has always been preposterous. it was never real to begin with. the russians are probably among the worst violators of the chemical weapons convention in terms of what they declared, in terms of the fact that after all of these years they have not destroyed with the said that there were going to destroy and that they are suspected of proliferating. that is to you have put in charge -- not you, lou. that is to the president has basically indulge their idea of putting in charge of whether they're client cleans up its act. i must say, i continue to think this whole thing was a pretext. obama want to jump in on the

side of the so-called rebels who are rife with muslim brotherhood he could not make a straight face case. he sees on the chemical weapons thing and this phony red line which turns out not to be a red line about something that is an international norm the terms of not to be such a norm. lou: not the norm, not a standard as being enforced by the international community whether the institution is nato or the united nations. time magazine 34 in editions, on the cover. let's show everyone. it is fascinating to me. we will start with what you see there. america is weak, russia is

resurgent and does not care what anyone thinks. the story on paying college athletes. it is sort of interesting to see what time magazine thinks of its readers. >> this is time magazine. and i'm paid political announcements perry made fun of the united states, made fun of two presidents of the united states and at the end it enveloped a guide to say that he was on his side. i found that that was just preposterous. somehow running an alternative version of events. >> but it was going to the new york times in particular because the only repeat what has been written in the new york times fell last what you're 30 years. that was -- but the mainstream media has gone from being a mere cheerleader for the democrats on the left actually being an abject. this is one of the most blatant

examples, but it is hardly the only one. lou: this is that time magazine cover, frankly eliminating. it's a very clear that they do not want to tell the american people what has happened. president obama and his negotiation has moved to primacy in the middle east has initiated he has right now far more standing than president obama has are likely as a lame duck his foreign policy is at best eroding if not utterly in shambles and has no chance to recover. >> if you are in the middle east right now, a dictator, potentate, who are you going to trust? he has supported the warwick and pulled the rug out. so he had a libyan dictatorship and distorted. syria. the reformer. then he had to go. the red line command now we are

negotiating. i think you are right. the critical thing in the middle east is in a matter of weeks obama has undone what for 40 years kept the peace. lou: the house oversight community has come down. it was not comprehensive. interviews were not enough. i thought it was a tame rendering of what transpired. it was a committee that was handpicked by secretary clinton who was one of the major figures involved in the controversy. and then it did not undertake to even interview some of the main witnesses including secretary clinton. lou: or any survivor of the attack. that to me is the most incomprehensible aspect of all of the omissions, and there are many in this report. >> it goes to show yet again that if congress does not push this we will not get anywhere

close to the bottom of it, and it cannot be allowed to die. for americans continue to be dead in what turns out to have been an act of war and we have no accountability for it. >> now in the second year of what has been a highly successful stonewalled by this a ministration. thank you very much for being with us. much more on the syrian chemical weapons agreement reached over the weekend to route tonight's broadcast. we will examine some of its weaknesses and failings. larry summers withdraws from consideration to lead the fed, and markets respond with a rally. why would they do that? risk-management on that, the markets, and the next chairman of the fed. ♪

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♪ lou: on wall street stocks finished mixed after larry summers pulled out of the running for federal reserve chairman. the dow gaining 119 points. the s&p up ten, nasdaq contributing a four-point decline. volume on the big board picking up from yesterday. joining me now with his outlook from these markets and what is going on, risk management founder. good to have you with this. this list is the markets, and i mean global markets. i would have bet a lot of money that that was not going to work out by the end of the day. >> hopefully you did.

it was kind of an ethnic decline. for the future is to be indicated that some much of this kind of a datapoint. to be clear, there is really no better evil here in terms of picking one of the two. for us one of the big signals is that gold was down. that just insinuates that may be money printing is over no matter who it is. lou: the idea that we will see a tapir, i was looking for conclusive indicators that would lead all of these dewars to suggest that tape during his coming out. tapering is coming and $10 billion charges. what do you expect to happen? >> what i expected to seek continue tapering. she is kind of robot in this regard. she will be plugged in to be less sluggish. think that is what is really starting to pop. people's expectation of a bond

bubble, gold bubble, anything that a slow growth. all this stuff is starting to break down. that is the inevitable reality. we are past the peak in terms of money printing expectations. lou: her expectations, we will find out. six and and a half percent unemployment is a real number that has real implications for fed policy. inflation fed to a half percent is a real number. she will insist on that. and she wants a candy rock mountain here of easy money policies. you are suggesting that there may be some nuanced interpretation that is more correct. >> i think there is no new ones at all. in the gold market or the bond market that is about to start to crash, the market is starting to tell you that she could completely lose control which is the point.

you get central planners see what your candy mountain or a smoothing mechanism that they can control. that can only go on for so long, and she will have a chairman his uphill battle. lou: what happens? >> that is the way that it plays out. was likely she would get the handoff. bernanke and there will attempt to communicate the smooth transition when there is nothing smooth about it. all of these balls are starting to pop. lou: the president used the expression smooth veneer, which has been -- i mean, there has been nothing lanier or smooth. this gets kind of interesting. are we going to see the great rotation? you talked about for the bond market. are we going to see it? the we going to see that? >> big time. you're seeing people pretty much try to call the top in equities every month. there is a new catalyst every

month. at the end of the day the epic bubble that is already in motion topping is the bond bubble 50530-year bonds will perpetuated by bernanke. if gold is any preview, is down 203%. there is not going to be year. this will be a rotation that perversely perpetuates these higher highs. lou: we appreciate it. good to have you with this. now to the weekend box office. looking for a good scare, folks pushed another low-budget horror movie to box office sites. sounds charming. they are viewed in first place. forty-one to be exact. that's more than eight times what it costs to make pa three times with the first movie earned back in 2011. that's business. relatively -- relativity media.

fourteen and a half million. last week's number one universal's rate drops to third place. a lousy $7 million. up next, the rise of the super bug. the centers for disease control with a shocking morning on drug-resistant bacteria and how many americans aren't risk. john roberts with our live report next. ♪ no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today. ♪ ...amelia... neil and buzz: for teaching us that you can't create the future...

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♪ lou: the centers for disease control today released a shocking report on drug-resistant diseases in this country. this cdc warned that the spread of these super bugs and the abuse of antibiotic drugs by the medical community could one day in danger america and develop into a national catastrophe for americans. fox news senior national correspondent john roberts in atlanta with our live report. >> good evening. it is already in danger in society because this problem even though we talked about it many times or four is getting much worse. the centers for disease control tonight is issuing a very, very urgent warning about the proliferation of dangerous bacteria that are either

resistant to were downright immune to even our most powerful antibiotics, and for the very first time they have calculated the number of illnesses and deaths. let's put it up on the screen. 2 million people and made sick by these antibiotic resistant bacteria. 23,000 of them die. the centers for disease control directed, we are facing a health crisis in this country. >> well we have seen is as we have developed new antibiotics every time a new one comes out there are some bacteria that gradually grow quickly. and now we're seeing a situation where some bacteria have resistance to virtually all antibiotics. >> for the first time they have brought together the 18 most dangerous microbes and rent them according to the threat that the population faces.

the most urgent threat comes from three very nasty class is a bugs. an intestinal bug, a resistant bacteria that includes e coli which causes pneumonia. and then there is a particularly dangerous drug-resistant form of gonorrhea out there as well. the centers for disease control have been issuing warnings for more than a decade about the sliming emergency. according to our doctor, more front-line positions need to get the message. >> as doctors become more and more aware that they have less arrows in their quiver, drug companies are not making more antibiotics, so they have less tree must offer. our jobs as doctors, the more resistance there is the less effective we are. it is time. >> the centers for disease control is turning up the volume trying to get the word out and encourage drug companies to make more and new antibiotics before,

as the cdc director puts it, the medicine cabinet is empty. lou: startling numbers. as we discussed, incentives, trying to encourage drug companies to produce more antibiotics, more effective responses. that is all about money. that is all about markets. >> it is all is all about markets. drug companies do not make a lot of money and antibiotics. then make them on rare drugs that they can't pass in some. and when you come out with a new antibiotic, the bugs are so quick to catch up that the antibiotic is not effective for long amount of time. here is the overall health costs. every year one alone results in a billion dollars and excess health care costs. from all 18 it's about

20 billion. when you as -- when you include the associated costs it's running north to 40 billion per year. their economic team of economic incentives. lou: as you reported, one of the deadliest diseases out there. >> you do not want to come down with that. thank-you has always. louisiana officials taking new safety measures after the founder rare and deadly brain eating and need the in the water supply of a town located southeast of norman's. it causes the deadly form of meningitis when inhaled through the nose. it has killed at least two children this summer, including a four year-old boy from st. bernard parish. as a result the parish's flushing the water system, adding chlorine. public schools are shutting down drinking fountains.

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that is the highest level of opposition since the health care law was signed more than three years ago. a federal program that subsidizes low-income americans is under fire again after reports of rampant fraud and abuse. my next guest detail their experience of tanning is so-called obama found through the lifeline program and national review article last month in tattled me and my obama phone. back tonight with more on the rampant use and abuse of this huge federal program. economist for the national review. this is an outrage. it continues seemingly unabated despite your terrific reporting. >> it is crazy.

i spoke with representatives. he was changed to five trains to forge signatures, check boxes on behalf of applicants certifying that they had not committed perjury and had told the truth and did not even tell them is doing it. on top of that he get the national investigative team finding of that 50 out of 51 people they interviewed his name was on the application said that there signature had been forged and applications tracing back to blite buildings. lou: the lifeline program is in itself in trouble. and it is a federal program that makes it sound as if it is a constitutional right to communication, therefore the federal government and taxpayers will pay for it. does not harley follow the logic

that i was taught. >> that does not sit right with me. since even worse 41 percent of the people surveyed were participating in lifeline programs have not proven eligibility. lou: a relatively small government program. subject to an investigation, million dollar fine. that impinge on the profit margin not much. the wireless benefits to the stifling plan. it's owned by who? >> the mexican billionaire. i think you see this starting

out as welfare for the poor. what it has turned into, it's plain and simple. lou: almost a half a billion dollars. we don't have the numbers for 2012. >> that is a huge sum. i think when you got here is a program is entirely flawed. that is the government program. and where do we go from here. surely they probably are seeking out some sort of program of the rhone to move these phones around. >> i think in this instance a

month ago it was assurance. i would like to see this program eliminated. a lot of cheap options. but it's hard to get rid of the federal program. i think a good first step would be to remove bad actors that have repeat offenses. lou: thank you for being with us. great job reporting. delighted to see you again. check out our website. the latest on today's larry summers inspired rally. end late relative global fizzle as well as our special section on the market meltdown five years later. no relief in sight in colorado. rescuers continued their search for thousands of missing. the latest. coming up next. stay with us. my mantra?

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lou: breaking news. we want to bring you up-to-date on the latest on the suspected gunman in the u.s. navy are shooting in washington d.c. hewlett-packard has confirmed the suspected gunman erin alexis was a subcontractor working on a contract to refresh equipment used on the navy and marine corps internet network. still no official word on the motive, but a close friend of alexis is telling reporters that the alleged gunman was angry after a claimed he did not been paid for government contracts jobs completed 34 months earlier senior defense officials tell fox that he had a history of misconduct, as they put it. tell people were killed in building 197. more than a dozen others wounded alexis was killed during a running gun battle with law enforcement officers.

colorado officials raised the death toll from the state's flooding the seven as search and rescue teams continue their efforts to locate more than 600 missing people. dry conditions are helping rescuers, but officials say there is still potential flash flooding in and around the saturated foothills. a week of torrential downpours along the eastern slopes of the caller rockies has absolutely devastated the state. 19,000 homes destroyed damaged. the flood water covering more than 2,000 square miles across 15 counties. that is an area just about twice the size ryland. engineering teams in italy say they successfully wrestled the hall of a ship from reefer it capsized in january killing 32 people. that progress leaving officials cautiously optimistic that they can pull the 950 ft. long cruise

ship up bright and eventually tow it away in what has been an unprecedented solid operation. and i said in january of 2012 there essentially trying to make history because ownership of this size has ever been raided or what is known in nautical speak as part buckled. a series of 11 towers with hydraulic mechanisms controlling 450-pound cables under the ship are slowly trying to rotate the vessel and put it on six specially built platforms that have been drilled into the seabed. if they can get the ship up right and we should know within the next 24 hours, seven teams will spend months stabilizing and preparing it to be refloated with giant buoyancy tanks. the cost estimate right now is $800 million. the most expensive maritime

recovery in history. new congressional report blasting the condition that investigators of last year's terrorist attack in the guise the same the accountability review board let senior state department officials off the look and glossed over policy decisions that led to substandard security as they put it at the u.s. compound in libya republicans on the house oversight committee alleged that the investigation was incomprehensive, not their role, and may have been damaged by conflicts of interest. the report also climbs the decision to place for state department officials on paid administrative leave and then reinstate them was more of a public relations strategy than a measured response to a tragic. the two men who led the a are b. review, former admiral mike mullen and ambassador thomas pickering will testify before the house oversight committee this thursday. forbes releasing its list of the 400 richest people in this

country. microsoft co-founder bill gates not only the richest american with a network of $72 billion, also the richest in the world reclaiming the title from mexico's carlos slim. warren buffett maintains second place with 58 a half billion dollars. the head of berkshire hathaway is also last year's biggest earner adding 12 and a half million dollars to his fortune. coracle co-founder of larry ellison did not do badly either rounding out the top three at $41 billion. up next, american students being eclipsed by their peers all around the world. fax that could end up in danger in our nation's prosperity, so says the author of a new book. he joins us here next. >> thirty years of your david stockwell was ronald reagan's

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♪ lou: this may not come as a surprise, but students in this country are actually getting out educated by our students abroad. according to the organization for economic cooperation and development, only 32 percent of our students are proficient in math, 31 percent in english. statistics that have -- if left unchanged could cost our economy trillions. joining me now, senior fellow at the hoover institution, co-author of a brand new book endangering prosperity, a global

view of the american school. great to have you with this. >> thank you for having me. lou: deeply troubling numbers that you bring to was and the implications not fixing this huge problem and education. let's start with those with a college degree can expect to earn more than 60 percent of the course of their lifetime and those with a high-school diploma what does that cost? what is the best measure of the impact of our economy? >> if students stop killing of a round -- it is a big impact, productivity. college education, our best students are the ones that are going to invent new things, the ones they're going to let me to the growth that we have observed. lou: what do you say to those who say so long as we continue to bring in as the and so successfully over decades in

this country emigrants to maile educated and talented. an offset to the failures of public education in particular in this country. what do you say to that? >> caylee a second-best solution. if we're not educating our own people we see that we have to bring in people to keep that engine going. that's why we should be doing with our own students, local schools are not producing at the rate that of the people are and at the levels that they are. lou: the word productivity is not even was reared. no one talks about efficiency. no one talks about quality. no one talks about satisfying the customer. why is that in your judgment? >> a strange industry because it has been allowed to grow off on

its own and not be responsive so that people in education say how could we possibly put in different incentives and education? we cannot do that. 80 percent of the country operates entirely on a set of incentives to perform well. lou: if we could put up a chart. you said that if we reach canada's level, just take a look at this. if we reach canada's level on the program of international student assessment we would see an average 20% increase in income for every worker for every year for the next 20 years . $77 trillion value. that sounds like a solution. why in the world would barack obama, the speaker of the house, john mccain embrace this and say let's get to it. why would they not?

>> the problem is that it takes awhile. the kids have to get educated and go into the labour market. they're going to be out of office. lou: you're giving me every reason to cheer. >> they become fixated on today. we rightfully spend a lot of time worrying about the recession from 2008. it is just dwarfed by what would happen to the economy if we could, in fact, improve our school. lou: improving your school. al is it that this country, the to the millions of young people drop out of high school. we are struggling enough mattocks, natural sciences, engineering. it is mind-boggling to think

that these standards in education no longer are even relevant to the vast majority of students in our high schools in particular. >> well, our high schools have not been producing. i think it is also the problem comes from the earlier problems. we are not getting children ready. frightening numbers if you look at the details. the number of our students that did not know fractions at all. could not subtract to fractions. that is the heart of any algebra advanced. lou: we are looking at numbers year. seventeenth ranking worldwide. at least those participating in the program. what happened -- we were being rocked today by one of the -- so much for american exceptional as an. and when you look at a number like that, it makes you ask what

will happen to it. the answer is not always that could. great to have you with us. we recommend it highly. thank you for being with us. good night from new york.

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and helps plan for your retirement. talk to a pnc ininvestments financial advisor today. ♪ ♪ neil: a shooting at the washington naval yard which proves terror fears are very much alive and well. that is the thing about anniversaries, they remind us of what was and sometimes was stubbornly still is. a reminder for another anniversary that many people assumed cannot happen again. to not let these markets for you. it can. history has an uncanny way of repeating itself no matter how much the government tries to make sure that it does not. welcome. i'm neil cavuto. five years after the blast where is the boom? while the government has done everything that he say