>> sean: good luck with the news series. always good to see you on the program. >> i appreciate it. >> sean: that's all the time we have. greta is standing by to go record roar. we will see you tomorrow night. >> former defense secretary donald rumsfeld what does he think about the leaks of top-secret information? who does he think is the source? is it the white house. here's the secretary. nice to see you. >> thank you, greta. >> caller: first a question of the leaks. i am curious, your evaluation of the leaks, how serious they are? >> i think quite serious. the problem is, you will never know how serious for sometime. our country goes out to other countries and asks them to cooperate with our intelligence services. and when they see a behavior pattern where we are not responsible and don't behave properly with trop important information, they are not going to want to cooperate with us. if you have countries backing

away, unwilling to cooperate, america loses and the american people lose. the same thing with individuals. we go to individuals and ask them to cooperate with us. and if they're compromised and their families are put at risk and they are put at risk, it tells everyone else, be careful of america. so it's a serious problem. >> that's the big picture view of this. in one of the leaks is about the cyber-attack on iran's facilityings. that seems to be more darns because we have heard about israel can't go alone against iran to knock out their nuclear weapons program. we have been going back and forth to some extent to what we are involved and what we are going to do. this seemed like a really quick, potentially way to disable it. and so this one seems to have a real direct impact on israel who, developed this cyber-worm with us. >> you know, i am not into the details. but there is no question but

that countryies are vulnerable to cyber-attacks, including the united states. how they are done and who does them is not something that ought to be discussed in the public, in my view itch how safe are we from a reverse situation? do you have any sense of that, how safe we are from a cyber-attack from another country? >> i think it's probably correct to say that the countries that are the most advanced technologically, the united states, and the countries that are the freest and pride themselves on being free nations and people being free are the most vulnerable. and if you think of the extent to which we have thrown away the shoeboxes or the old ibm cards with the punches in them and our depend oant digit, everything's dependent on digits and there's our vulnerability and it's real and serious. >> caller: -- >> is the vulnerability to disrupt our financial system --

>> electric grid. >> i mean -- give me an idea of how bad it could be? i don't want to get sort of alarmist, but i am thinking, is this something that will be disruptive for two months and we will be distressed and disturbed or is it much more serious? >> it's much more serious. take katrina. when the electricity goes out, you can't lift gas. you can't get gas out of a gas station t. doesn't pump. people can't move around. you can't rescue people. the potential is to disable a power grid and to confuse and mislead and the potential is to deny capability. so it runs the full gamut of cyber-attacks can run the full gamut and in every respect, technologically advanced country, countries that are more

heavily dependent on digit, people that are more heavily dependent on digits are the most vulnerable. >> highway do we know -- i guess an investigation will give us information but that will be down the road, whether this particular leak, about these three topibs that are leaked that everyone has seized upon, the double agent and -- and the cyber-attack and of course, the kill list, how do we know, or how do we assess whether this was a clumsy, incompetent leak or whether this was sort of a deliberate, with some sort of sinister motive, political motive? >> everything i can tell watching it, as an observer of these things is that it did not come from the department of defense. and did not come from the cia. and indeed, if i were at the department of defense and i suspect the military, whose people are put at risk when there is additional information learned about how we conduct our operations, have to be grinding

their teeth t. looks to be out of the white house. now, at what level of the white house, i am not in a position to know. >> but is it out of the white house that someone said somebody to somebody else who said somebody to somebody else and shouldn't have said something, or is it a sense that it was a selfish political reason -- both are bad. but one to me is much more sinister and troubling than the other, regardless of the impact. >> i just don't know. if -- if a disinterested observer looked at it, they would have to say that it had the cumulative effect of advantaging the president politically. >> when people have these discussions, when you had them -- how many people are in the room when it's classified? i assume it varies. but how many would you assume at any given time on this high-level classified meetings? >> you saw the picture of the taking in the situation room had they discussed the attack on bin

laden. that's about right. there are military people, political people, there are cia people and civilians from the department of defense and white house staff. so you are looking in a situation room, you would probably have around the table, 6 or 7 and if on the strap hangers in the back, probably another 8, you are talking from 14 to 20. >> all right, some of the discussion inside the situation room isn't classified. some of ti assume is non-classified? >> sure. >> how is it delineated so this one? i assume it is not left up to good judgment. i assume there is an ability to determine that this is classified, don't talk about it. you can talk about this? >> once the president calls a meeting in the situation room, and you have the national security council and the deputies or the people behind, the people there don't need anyone to tell them what gis is sensitive or what is not. if the president decides that

something is particularly sensitive, or the director of cia or the secretary of defense or the secretary of state, they would then have a principle only meeting and you would have the president, the vice-president and the members of the national security council, secretary of defense, secretary of state, cia director and the chairman of the joint chiefs. if there is something that is even -- needs to be even restricted to a greater extent and the secretary of state or defense or cia director decide they have a piece of information that would be terribly damaging and compromise our troops or compromise an ally that provided us the information, something of an operational nature, they might very well simply talk to the president and not even do it in a meeting with others present. people who are around these things over the years, you know, they have levels where they operate. >> experience n. some way. they get it. if something's classified, at

some point, it might be unnecessary to have it unclassified. is it officially declassified or informally saying, this is no longer classified? >> yes. it can be classified at one level and that level can be reduced, as time goes on, if there is a reason to do that. and you want to include more people. you also not only have classifications, top-secret, secret, confidential, official use only and the like, have you compartments. you can have something haa lot of people are cleared for top cret, but it's a department and they are not cleared for that compartment. that is also something that can be taken out of a compartment, if it's okay for some reason. but even people who are cleared for top secret are not allowed into all the compartments because it's based on need to know. >> democrats, republicans both are very disturbed about this on copital hill. senator dianne feinstein is a example and senator mccain. but there is a controversy as to how this should be investigated.

two u.s. attorneys, one from maryland, appointed by president bush and one from d.c., appointed by senator obam a. some want a special prosecutor. what do you think is the better way ford this? >> oh, i am not in a position to second guess it. i think the principle that ought to be applied is this. regardless of people are appointedded by attorney general holder that work for him, a political appointee, which both of those people would be other or a special prosecutor, i think the test is not that. the test is: are the people appointed the kinds of people that reasonable members of the house and senate are going to nod and say, they doll a fair job? they are want going to trim, they have reputations and -- i worry about a lot of special prosecutors. you know, they get unlimited budgets, they can go on forever. they don't report to anybody. in our system, i think being able to hold someone

accountable, other than a special prosecutor is not a bad idea. but if that's the case, if it is not a special prosecutor tseems to me, it has to be somebody that the republicans and the in thees in the house and the senate who are concerned about this, and with good reason, ought to be able to nod and say, fair enough, they will do a decent job. >> jumping ahead, this may be a criminal action, may not. there is a lot to be learned and discovered about this. what should happen to someone who does leak like this? what should we do with someone like this? >> they can be prosecuted criminally for breaching security classifications. >> if it is not against the law. suppose for whatever reason, this is an -- a gray area where there isn't a law that might cover it, precisely. what should happen? >> you are the lawyer, greta! >> but it may not be a legal issue. it may not be a legal issue. >> i mean, we have sent people to jail for -- for violating

security, and for compromising classified information. >> it could be unclassified. >> the things we are talking about by way of the leaks are, i have to believe, were not unclassified. they were classified. i would find it hard to believe. we will find out more with the investigation. now let me turn to pakistan. we are paying their 100 million a month extra for the last seven months because the pakistanis have closed the route going to pakistan for our supplies. baz the united states will not apologize for the soldiers who were kill in the strike in november. what are your thoughts about this? >> my thoughts are that pakistan is a complicated relationship. it's an enormously important country -- to us. it is our access into afghanistan. it's a land-locked count tree afghanistan. it is a country that has a muslim population, has nuclear weapons, has an intelligence

service with long relationships with terrorists and the taliban. it is a country that stepped up and was terrific supporter of the war on terrorism. they captured people in the urban areas and tried to help out in the federally- administration. why don't we try to calm it down, conduct private diplomacy and not run around yelling, screaming, and pointing fingers. our congressmen can run and scream. their parliament can yell and scream. but i would think the government would sit down and say, okay, they have their problems, we have ours. we need that relationship. and they need that relationship. why don't we find areas to agree -- >> they want an apology. the united states has said we regret the deaths of the soldier. but they want an apology from the united states. and the united states says, it was joint error.

so the united states won't apologize. >> without knowing the facts, i wouldn't know what the answer to that would be. i can say this -- the -- the -- the fact pattern would determine what our behavior ought to be. it is unclear to me. >> what i think is sort of unusual in all of this is that we are now bringing supplies in through russia, the northern part of afghanistan. and we are grateful that russia is letting us bring our supplies in to help our troops. on the other hand, we are having a very difficult time with yawsh over sirria. on the one hand, they are helping us -- of course, we are paying for it. on the other hand, they are doing something that we find egregious. >> no. the relationship with russia's complicated as l. the reset button didn't work and we have real problems with that country and the things they are doing, the assistance to are iran with

respect to the nuclear program, unwillingness to be helpful with respect to north korea. their assistance to their close friend, syria. and so many respects, they are -- they sold how many thousands of ak-47s to chavez in venezuela. so they make a pattern of working with countries that are unfriendly to the united states. this is nothing new. >> are we drifting back towards the era of the cold war? >> oh, i don't think so. i think that -- the russia is a totally different thing that the soviet union was in the cold war. russia's got -- a -- probably a gdp the size of portugal, except for their energy. they have problems with their borders with people. they have muslim problems with their population. they have alcohol problems. they have a large prison population. they have difficulty with their conscripts and their military. they have an outflow of educated

people who are going to better places. they have trouble attracting industry outside the energy business because of the rule of law issues and corruption. it is a totally different thing from the soviet union. >> what's your position on law of the sea treaty? >> i am testified against the law of the sea treaty. i think that there are some good things in it that our military and our navy would like and would benefit us. there is a degree of certainty that the business community would achieve, which is a plus also. but when you weigh it against the concept that is in there -- the concept goes to something called the -- the whole idea that -- that the high seas are the property of humanity, of mankind, meaning they are not owned by anybody, therefore, they are unowned.

and this proposes to create a constitution for the high seas, with a legislature, an executive, a judicial body. and give away to undeveloped country, developing country, land-locked countries what looks to be in the neighborhood of certainly billions, probably tens of bill ron, possibly hundreds of bill whereons of dollars over time, from royalties that companies that go out and mine these nodules in the high seas, valid to pay into the -- would have to pay inab orwelian way, the international sea bed authority. and the authority would make a lot of these decisions. i have never seen a treaty that suggests that that is the way to redistribute wealth in the world. it doesn't use the world bank. it doesn't use the congress with aid programs. it gives it to this authority -- billions of dollars, undoubtedly and the authority makes the

decision as to how they are going to give that money away to developing countries. i don't eye think that's a concept that is never been used before. and i am uncomfortable with it. when i weigh the advantages of the treaty against that disadvantage, i mean, what's next. >> sean: outer space? we are going onicide -- decide that that is the property of all humanity and create a global international space authority like the sea bed authority? it is such a fundamental shift in anything that we believe in this country, in terms of the distribution of wealth and the redistribution of wealth that i am uncomfortable with it. >> mr. secretary, nice to see you, thank you very much. >> thank you, greta. >> straight ahead, $20 million of your tax money. now, that is what the government is risking. what are they gambling on? we repeat, with your moan. why are some republican senators so steamed? senator barrasso goes "on the

record" next. ohio, very popular. president obama and governor mitt romney there with choice words for each other. governor mitt romney said that president obama will push the economy forward -- over a cliff. and president obama said governor romney will bring back the failed policies of the last decade. are either or both in a political strategy of insults or just the facts? we will ask fred thompson, here next. an american president's head on a fight, the disturbing image, outraging tv viewers. which president landed in the middle of the real-life tv descrawma? and what do you think about the controversy? stay tuned. i knew it'd be tough on our retirement savings, especially in this economy. but with three kids, being home more really helped. man: so we went to fidelity. we talked about where we were and what we could do. we changed our plan and did something about our economy.

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>> greta: if you had $20 million, would you gamble it all away? that's what the government seems to be doing with $20 mill million of your dollars? a supreme court ruling on the national health care law could come out every day. but the government is not willing to wait for a ruling. they are shelling out $20 million of your monoa publicity campaign for obamacare for the health care law, so if the law's struck down between now and the end of june, your money goes down the drain. several republican senators are

asking for answers, including john barrasso. so what is this? >> they are taking money from the prevention and public health section and they are using it for propaganda and public relations to pump up this very unpopular health care law. where is the accountability? where are people getting value for their mony? a number of us sent a letter to the president sotosay, look, did you approve this going to a private p.r. firm? if you did, why? if you didn't, what are you going to do to get the money back? but it went to kathleen sebe sebelius, chairman of health and human services. >> we are right on the eve, maybe it will be constitutional or unconstitutional. but i take it, if the law is found unconstitutional, between now and the end of june, when we expect a ruling, do we get our mon peback? >> we darn well out to -- >> greta: but will we? does the contract permit that?

>> the administration has no stire to get the money back because this money is to boused -- is to be used between now and election day, to try to make the administration look good. it is not about health care prevention or public health, it is about propaganda about this administration? >> greta: but i take it that most people would agree that if the law is unconstitutional and thrown out -- i don't know that it will be -- that there is no reason to spent $twi 20 million to talk about it? >> absolutely not. >> greta: can we get it back? >> we have to see the contract and we are trying to get that information. what did they approve? what did kathleen sebelius approve? >> greta: you say it's p.r., to me, there is a big difference between saying, this is a great health care, you know, we have a new health care statute. that seems wasteful. i i think everyone knows, or if it's to educate people about

something that's important in this statute. i know a little education might not hurt because -- >> there are a couple of times, they have tried this before, with the andy mayberry did the commercials about the health care law, paid for with taxpayer dollars, to say why this was good with medicare. didn't work with seniors because they realized that the health care law took $500 billion away from them, stont strengthen medicare, to you about start a new government program for someone else. and then they did the 4 million postcards that the administration sift tout small businesses to say, hey, you may qualify for a tax rebate under the health care law. only a very small number of those businesses got the rebates. >> greta: it is going to a p.r. firm, was it a competitive bid -- was it a competitive bid for the contract? ando if not, who is the company? anything we should be looking at. >> on the web site, it's obviously somebody who has been

act 95 democratic politics in the past. but this is money for a television campaign, radio, print, new media -- >> greta: why now? how much goes into the p.r. pocket and how much go to the campaign and the wisdom of the campaign, of course, i have a question if the statute's declared unconstitutional, but how much of this $20 million goes into someone's pocket and if and how much goes to a product? >> i don't know. but the $20 million, taxpayer dollars out the door. the president said he wanted to lower the debt and the deficit. that's a much better use than the $20 million -- >> greta: hhs says that the campaign was actually mandated by the health care law, so it's required. so we are stuck with it. >> well, there is parts of the health care law that ought to be working on prevention, public health. not propagand a. not punishment r., they can say whatever they

want. you know that that is not a reason to spend taxpayer dlos say, look at the great law we passed. i know you don't like it and you want it to be held unconstitutional. people around the country. but you are wrong. we are doubling down and we are going to tell you, you know, now that you are fining out what is in tyou ought to like t. but the american people don't like it. they are hoping that the supreme court finds in unconstitutional. >> but we spent our $20 million -- that's another story. >> you haven't heard the last of us on this. >> greta: i am sure. thanks. >> thanks for having me. >> greta: president obama and governor mitt romney both in ohio. they managed to avoid each other, but they sure talked about each other. hear what both said. and former candidate for president, fred thompson is here. an unlikely alliance, why isn't president obama spending time with new jersey governor chris christie? we have the video to prove it,

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>> for the long term, remember that the economic vision of mr. romney and his allies in congress of was tested a few years ago. we tried this. their policies did not grow the economy. they didn't grow the middle class. they did not reduce our debt. why would we think that they would work better this time? >> he has put together almost as much picture debt as all the prior presidents combined.

you want four more years of that? you call that forward? that's forward over a cliff. that is forward on the way to greece. i don't want that. i will finally get america on track to have a balanced budget and we will limit the size of government. >> greta: president obama and governor romney almost bumped into each other. they both were in ohio, laying out competing economic visions. former presidential candidate, fred thompson is here. >> thank you. >> greta: a lot harder to be the incumbent. the president said, we tested it, we tried this. he has been in office 3 1/2 years and i thought, yikes, he had 69,000 jobs in may, which was dismal and unemployment ticked up to 8.2%. under the theory, we tried it, he is arguing against himself. >> yeah. yeah. he is between a rock and a hard place. for the last 3 1/2 years, he heb demonstrating he doesn't

understand the economy and what do about t. they came in convinced that kensian economics would bail them out. they were very brash about what they thought the unemployment percentage would be, after their policies were instituted. dead wrong about that. dead wrong about the effect of the stimulus. went around saying, if we don't turn this around, you can kick us out. clinton said that a couple of years ago, as well as obama. so now, they can only resort -- he can only resort to going back and the reason he stumbled so much lately is because he is looking backwards all the time. that's his strategy. >> it's interesting, unless the economy starts soar being between now and november, if it continues to stay as it is or declines, we have all of those problems in europe, which will have a ripple effect, which we are likely to feel here at home, it comes to the point where governor romney doesn't need a strategy or a policy because i

think the voters would think anybody but. but we have tried this and it didn't work. unless he shows a strong trend, governor romney is tactically -- it doesn't, i would think, not have to show much. >> i think it's a dangerous way to look at it -- >> greta: i am not suggesting it. >> at then of the day, even though the president doesn't seem to feel this way right now, it's going to be the person who the people feel like autos is going to do the most for the economy in the future and the one that will be the best caretaker going forward instead of -- instead of looking back. i think that eye think that romney's getting his legs under him. i think he made a very good speech. didn't use a teleprompter. the president was up there, same old teleprompter, same speeches and litany of good things that the presidents have been saying since george washington, half of which, his policies really work

against. so i -- i -- i think that the president, you know, the president is -- is intent on rewriting history. he talks about the failed policies of the past, you know, the republicans don't want to be tide to george w. bush or anybody else, so they let that pass. they shouldn't. people like me don't have to let that pass. the policies of george w. bush is not measured by the last 24 hours or the last year of his administration. the fact of the matter, the bush tax cuts didn't cause this debt, didn't cause this deficit, after the bush tax cuts, we had the greatest increase of revenue for the federal government in the history. lots of things caused the recessions, you know, we have had five or six of them in my generation. we always come out -- >> greta: congress can be blamed collectively for a lot of the recession because of the housing bubble and their inability to be good stewards of our economy and all of the things with fannie and freddie. >> absolutely. and the fed. >> greta: there is a lot of

blame to go around. what i thought was interesting is that the president's strength was in inspiring people. today, he said something,ee admits economically that our economy is not where it needs to be. and i thought, you know, he is so off his balance, in terms of inspiring people, instead of -- he is make being admissions that i think take away from his strength. >> he is out of things to say. i mean, they touted this as a framework speech, going forward and all. but the president, at this stage of the games with this economy, standing up there and saying, you know, our plan is -- education infrastructure, balanced budget, balanced budget -- right? but all of those eye mean... come on. i mean, we have a half million more people unemployed than we did the day he took office. he can't escape his own tenure

in office. what romney did 20 years ago, he thinks is relevant. what bush did 4, 5, 8 years ago, he thinks is relevant. but what he is doing today and the last 3 1/2 years, is not relevant. the fact of the matter is that we got out of this recession about a half of year into obama's first year. i mean, if you talk about turning the corner, about six months in, we turned the corner, built up a growth of 4% of the economy. the last part of his first year, and the first part of his second year, we were up to 4% and then something strange happened. usually, the worst of the recession, the quicker the bounce-back. we started to bounce back and something happened. and that was that things turned back around again, just as the spending started to kick nthe economy started to go down and has been going down ever since, 1.7, 1.8 growth. >> greta: it's low.

he has six months or less to turn that around itch there is no escaping that. you know, you know, signaling out the 1% is not going to get it down done. he is talking about dividing the country and redividing the economic pie, instead of truing to make the pie bigger. >> greta:go gotta do. california's running out of time and has hours to fix its giant budget deficit and jerry brown is calling on the democratally controlled legislature's plan, irresponsible. will they come to blows? and ifn a few minutes, you may have seen the show "game of thrones" but have you seen this? bush 43's head on a stick in what do you think about it? that's 2 minutes away. ind of communications company by continuing to help you do more and focus on the things that matter to you.

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outrage. "games of thrones" with george w. bush in a decapitation scene. it went unnoticed, but the creators poibed it out in a dvd commentary saying it is not a political statement. we had to use whatever heads we had lying around. but hbo is coming under fire and some are calling for a boycott. now the apology. the show producer saying we use a lot of prosthetics on the show. we can't afford to have all of them made from scratch t. meant no disrespect. hbo saying we find it unacceptable, disrespectful and in very bad taste. was the image political or just bad judgment? go to gretawire. [ male announcer ] ever wonder what's behind two little fleas?

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>> greta: time's running out, california's in big, big, big trouble. the latest from california in 60 seconds.

but first, marianne rafferty has the headlines. >> prosecutors are nearing the end of their case against jerry sandusky, after four days of graphic testimony. the last of eight accusers who say they were sexually abused by the former assistant penn state football coach. the final witness saying he was raped in overnight stays at sandunky's home. sandusky denies he sexually abused 10 boys. his defense begins next week n. arizona, jesse kelley deciding not to run for the house seat held by gabrielle giffords, dropping out two days after ron barber won a special election to fill out giffords' term. barberville to run again in the fall. giffords was severely wounded in a shooting last year and gave up her seat to focus on recovery. now back to "on the record." >> greta: the clock is ticking. california is just over 25 hours to avoid financial disaster. the state's drowning in nearly $65 billion in debt.

and the governor is demand that this democratally-controlled legislature makes cuts. but can they do it in time? you have a democratic governor, a democratic assembly, a democratic senate you have to make the budget within the next couple of days. and you have a tax increase going in, to be voted on in november, by the people of california, hoping that that will solve your budget problem. tell me, what are they going to do? >> it looks like the legislature's going to pass a budget on friday. the question is whether governor brown will sign it. there are still some major differences that -- between the democrat and it is legislature and the governor, primarily over welfare. the governor wants to reinistute work for welfare recipiens and lawmakers in the democratic leaders say there are no jobs so why we are paying to train people to go into an economy without jobs?

that's the central risk now. we'll see if it gets resolved in the next 24 hours or the next couple of weeks. >> greta: if it doesn't? well... once the budget is passed, the governor has 12 days to decide whether or not to sign or veto it. last year, democrats sent him a budget and he vetoed the 50 one. they support him another budget, a few days later. this time, the expectation is that the budget will get to the governor's desk and he will sit on it. and the two sides will continue to try to hammer out some of the details over welfare, child care, a couple of other provisions in the budget, whielg the budget is on the governor's desk and try to clean it up with some trailer bills, perhaps, next week or the week after. >> greta: but the great hope is that even within the governor's plan and the legislator's plan, the expectation is that in november, the taxpayers are going to vote to have their owner taxes raised to have $8 billion. right now, the governor and the

legislature assumes it has $8 billion it may not have? >> right. they agree on that. they have built in a series of trigger cuts into the budget, so if the taxes are rejeked in november, there will be $6 billion of cuts, most of those to public schools and community colleges, another half million from the university. and so this budget is really setting the stage for that november election. the democrat and it is governor want to present this as a choice that the voters have between schools and taxes. taxes are not popular. schools are. so voters are going to have a tough decision to make, if they accept the framework that the governor and the democrats are setting up. >> greta: all eyes will be on california. thank you. >> thank you. >> greta: straight ahead, an unlikely meeting, why are president obama and governor chris christie together today? find out next. do you see it ?

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>> greta: president obama and governor chris christie today visiting the world trade center site in new york city. president obama and governor christie toured the 22nd floor of 1 world trade center, the skyscraper that will replace the twin tower, destroyed in the 9/11 attacks.

the new building is discipline expected to be completed in 2014. and a ufo sighting right here in washington, d.c. at least, that's what panicked drivers thought. a saucer-shaped aircraft, creating a frenzy on the beltway. what did driver -- drivers really see? it was a drone aircraft. the military was moving it on a flat-bed truck, taking it from west virginia to a naval air station in maryland. and it sure looks like a rodeo, but it's not. it is a police chase in arizona. police turning into cowboys, trying to corral a horse on the loose. they chased the horse for hours. they tried to keep the horse in a desert area, but that didn't stop the horse from running through the streets. even expert lasso riders couldn't ride the horse. finally the horse ran out of scottsdale and is now far a way from cars. >> but coming up, something

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>> greta: tomorrow night fox files brings you a look inside of the fort hood massacre investigating what drove alleged killers to go on a shooting rampage on that army base. this summer, army psychiatrist major goes on trial but now a look back at 13 people murdered almost three years ago.

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>> greta: you don't want to miss this so be sure to tune