what we're trying to do is raise standards for, for example, international -- intellectual property protection, which sometimes is a big problem in china, and if we can get a trade deal with all the other countries in asian that says, you got to protect people's intellectual property, that will help us in our negotiations with china. richard mcgregor. >> can i go back to the privatization. what are the legal liabilities liabilities, -- have to be paid -- the sovereign credit -- >> i'm going to let jack lew, the secretary of the treasury, make a formal presentation on thursday before the senate committee, because this is obviously sensitive enough, and i think people would be paying close enough attention, that

details count, and i think prepared remarks from secretary lew on that topic would be more appropriate. but as i indicated before, we plan for every contingency. so, obviously worse case scenario, there are things we will try to do. but i will repeat, i don't think any option is good. >> mr. president -- >> steven dunn. >> if you could talk about the budget process. in the past you have negotiated along with the debt ceiling, with du -- blue dogs and a fiscal increase in 20. you made a fiscal commission. the republicans today are talking about maybe another committee that would work out our differences over the next few weeks. is that something that you can talk about on the side, something that wouldn't necessarily be a concession but

something that could be a format for getting a deal done? >> here's the thing. i know that speaker boehner has talked about setting up some new process or some new supercommittee or what have you. the leaders up in congress can work through whatever processes they want, but the bottom line is, either you're having good faith negotiations in which there's give and take, or you're not. now, there is already a process in place called the budget committees, that could come together right now, democrats have been asking for 19 months to bring them together. make a determination, how much should the government be spending next year, the appropriations committees could go through the list and here's

how much we're going to be spending for defense and here's how much we're going to be spending for education, and that's a process that has worked reasonably well for the last 50 years. i don't knoll we need to set up a new committee for a process like that to move forward. what has changed, or what seems to be motivating the idea we have to have a new process, is speaker boehner, or at least some faction of the republicans in the house and maybe some in the senate -- are holding out for a negotiation in theory but in fact basically democrats give a lot of concessions to republicans and republicans don't give anything, and then that is dubbed as compromise, and the reason democrats have to give is because they're worried that the government is going to stay shut done or the u.s. government is going default. and, again, that -- you can dress it up any way you want.

if that the theory that the republicans are going forward with, then it's not going to work. so let me give you one specific example. i have heard, at least -- i can't confirm this -- that one of the ideas of this new committee, you can talk about reductions in the discretionary spending, talk entitlement reform, and talk about how long to extend the debt ceiling but couldn't talk about closing corporate loopholes that aren't benefiting ordinary folks economically, and potentially if you close them would allow to us pay for things like better education for kids. well, i don't know why democrats right now would agree to a format that takes off the table all the things they care about. and is confined to the things the republicans care about. so, again, i don't know that

that's exactly what is being proposed. my simple point is this. i think democrats in the senate and the house are prepared to talk about anything. i'm prepared to talk about anything. they can design whatever format they want. what is not fair some will not result in an actual deal is ransom-taking, or hostage-taking, and the expectation that democrats are paying ransom or providing concessions for the mere act of re-opening the government or paying our bills. those are not things that you do for me and they're not things you do for the democrats. >> isn't there room here where it's not necessarily a concession, where you negotiate what the negotiations are going to look like? you don't have to agree to overturn obamacare. you can actually negotiate what

the talks are going to look like, so everybody is comfortable, and you mentioned yourself, this is a tough vote for all these house republicans. you're asking them to take a very tough vote for the debt ceiling. usually people in both parties want to have some cover, something they can point to and say -- >> which is fine. >> -- i want some budget process reform before i approve another trim dollars in debt. >> which is fine. if they want to do that, re-open the government, extend the debt ceiling. if they can't do it for a long time do it for the period of time in which these negotiations have taken place. why is it that we have hundreds of thousands of people who aren't working right now in order for what you just described occur? that doesn't make any sense. the small business administration gives out a billion dollars worth of loans every month to small businesses all across the country. that is not happening right now. so, there are small businesses in every state that are counting on a loan, to get their business

going, and you have the party of small business saying the small business administration can't do it. you have farmers waiting for loans. right know the loans cannot be processed. the republican party says they're the party that looks out for farmer. i happen to disagree. i think farmers have done real good under my administration. but why would you keep the government shut town and the farmers not getting their loans while we're having the discusses you just talked about? the republicans say they're very concerned about drilling. they say obama has been restricting oil production despite the fact that oil production is at its highest level it's been in years, and is continuing to zoom up. they say, the democrats are holding back oil production in this country. you know, one of the things that happens when the government

shuts down is your drilling permits are not processed. so why would the republicans say to the folks interested in drilling for oil, sorry, we can't let those things be processed until we have some negotiations negotiations and we have some cover to do what we're supposed to be doing anyway. that doesn't make sense. if there's a way to solve this, it has to include re-opening the government, and saying, america is not going default. it's going to pay our bills. they can attach some process to that that gives them some certainty that in fact the things they're concerned about will be topics of negotiation. if my word is not good enough -- but i told them i'm happy to talk about it. they've want to specify all the items they think need to be topic of conversation, happy to do it. they want to say, part of that

process is we're going to go through line-by-line all the aspects of the president's healthcare plan that we don't like, and we want the president to answer for those things. i'm happy to sit down with them for as many hours as they want. i won't let them gut a law that is going to make sure tens of millions of people actually get health care, but i'm happy to talk about it. >> mr. president, first -- >> steven -- i'm going through my list. [inaudible] >> -- in the campaign against terrorism and if we're going to see u.s. military operations around the continent, how does that square with your contention that america cannot be at war forever? >> if you look at the speech i gave at the national defense college several months ago, i

outlined how i saw the shift in terrorism around the world and what we have to do to respond to it, and part of what i said is we had designated core al qaeda, that had been operating primarily between afghanistan and pakistan. but you now had these regional groups, some of which are explicitly tied to al qaeda or that ideology, some of which are more localized. few of them have the ability to project inbeyond their borders but they can do a lot of college inside their borders, and africa is one of the places where, because in some cases the lack of capacity on the part of the governments, in some cases because it is easier for folks to hide out in vast terrains that are sparsely populated. that you're seeing some of these groups gather, and we're going

have to continue to go after them. but there's a difference between us going after terrorists, who are plotting directly to do damage to the united states, and us being involved in wars. the risks of terrorism and terrorist networks are going to continue for some time to come. we have to have a long-term plan that is not just military-based. we have to engage in the war of ideas in the region and engage with muslim countries and try to isolate radical elements that are doing more damage to muslims than they're doing to anybody else. we have to think about economic development, because although there's not a direct correlation between terrorism and the economy, there's no doubt that you have a lot of unemployed, uneducateed young men in societies that there's a greater likelihood that terrorist

recruits are available. but where you have active plots and active networks, we're going to go after them. we prefer partnering with countries where this is taking place, wherever we can, and we want to build up their capacity, but we're not going to farm out or defense, and i have to say, by the way, the operations that took place both in libya and somalia, were examples of the extraordinary skill and dedication and talent of our men and women in armed forces. they do their jobs extremely well. with great precision, at great risk to themselves, and i think they're pretty good examples for how those of us here in washington should operate as well. >> mr. president, we talk about the -- the captor of mr. liby comply with international law? >> we know that mr. al-liby

planned and helped execute plots that killed hundreds of people. a whole lot of americans. and we have strong evidence of that. and he will be brought to justice. >> mr. president -- >> mark ellis. >> mr. president, while you're waiting for the shutdown to end, why is that you can't go along with any of the bills the house is passing, funding the fda and fema where you were yesterday, and head start. you have to be tempted to kind of get funding to those programs you support. >> of course i'm tempted. because you'd like to think you could solve at least some of the problems, you couldn't solve all of it. here's the problem. what you have seen are bills that come up where, wherever republicans are feeling political pressure, they put a

bill forward, and if there's no political heat no, division story on it -- no television story on it, then nothing happens. if we do some sort of shotgun approach like that, then you'll have some programs that are highly visible get funded and re-opened, like national monuments, but things that don't get a lot of tapings, like those sba loans, not being funded. and we don't get to select which programs we implement or not. there are whole bunch of things the republicans are said are law we have to do, and i don't get a chance to go back and say, you know what? this idea that this republican congressman came up with, i don't like, so let's not implement that. once you have a budget and a government with a set of functions you make sure that

it's all operating. we don't get to pick and choose based on which party likes what. so, that's where the budget discussions take place. if there's something the runs don't like think should argue for eliminating those programs in the bug, -- in the budget, comp with an agreement -- maybe the democrats will agreed, and fund it. but you don't do that piecemeal. >> the -- benefits -- >> i'm going to take one more question, and -- right here. >> ms. president. >> your persistence has worked. >> mr. president, you talked about the political dynamics that house republicans feeling that's don't want to negotiate with you, don't want to come together. i would ask you two things about that. looking back at the 2011 discussions and the budget drama, is there anything you wish you had done differently in

2011, and after this what you call this nonsense ends, what do you expect the political dynamics -- how will they have changed? >> that's an interesting question. in 2011, i entered into good-faith negotiations with john boehner. he had just won the speakership. it was a time because we were still responding to the recession, deficits were high, people were concerned about it, and i thought it was my obligation to meet him halfway, and so we had a whole series of talks, and at that point, at least, nobody had any belief that people would come close to potential default. i don't regret having entered

otiations, and we came fairly close, and whenever i see john boehner to this day i still say, should have taken the deal i offered you back then. which would have dealt with our long-term deficit problems, would not have impeded growth as much, would have really boosted confidence. but at that time i think house republicans had just taken over, they were feeling their oats and thinking, we don't have to compromise. and we came pretty close to default. and we saw the impact of that. i would have thought that they would have learned the lesson from that, as i did, which is we can't put the american people and our economy through that ringer again. -- through that wringer again. that's the reason why i have been clear, we're not going to negotiate around the debt ceiling. that has to be dealt with in a reasonable fashion. by the way, i often hear people

say, in the past it's been dealt with all the time. the truth of the matter is, if you look at the history, people posture about the debt ceiling frequently, but the way the debt ceiling often got passed was you stick the debt ceiling on to a budget negotiations once it was completed, because people figured i don't want to take tough votes to cancel programs and raise taxes, but they want to do it all at once. it was not a situation in which, if i dent get what i want, i'm going to let it default. that's what changed since 2011. i said we're not going to do that again. not just for me, but because future presidents, republican or democrat, should not be in a position where they have to choose between making sure the economy stays afloat and we avoid worldwide catastrophe, or we provide concessions to one faction of one party in one

house, and -- but let me tell you a lesson i did not learn. i did not learn a lesson we shouldn't compromise. i still think we should. i still think there are all kind of issues we should be talking about, and i don't get to get 100% of my way, and i'm still very open to having conversations with not just the speaker but any republican over there. so -- go ahead. >> if you enter interest a series of short-term funding bills or a debt ceiling bill you would be back in the same place, presumably, with the same members -- what hat changed in the political dynamic if you do the short-term -- >> they're aware of the fact i'm not budging when it comes to the full faith and credit of the united states, that it has to be dealt with, that you don't pay ransom you don't provide

concessions for congress doing its job and america paying its bills. and i think most people understand that. i mean, i was at a small business the other day and talking to a bunch of workers, and i said when we're at the plant and you're in the middle of your job do you ever say to your boss, unless i get a raise right now, and more vacation pay, i'm going to just shutdown the plant. i'm not just going to walk off the job, i'm going to break the equipment. how do you think that would go? they all thought they'd be fired. i think most of us think that. there's nothing wrong with asking for a raise or asking for more time off. but you can't burn down the plant or your office if you don't get your way. the same thing is true here. i think most americans understand that. all right? thank you very much everybody.

>> that was a lot more than we expected. i tell you that. the president was expected to answer just a couple of questions over the past what turned out to be an hour, instand went on and on. he said the extreme elements of the republican passion specifically the tea party republicans, are forcing speaker boehner to issue threats and there will be no talk no negotiations, until that threat ends. he says he cannot make extortion routine in american government. now, you heard what the president said. a lot of back and forth between republicans and democrats. big leaders in both parties have happened while the president was speaking, game-changers? maybe. i'll get you filled in on all of it. a quick recap of the president. we should not hang the threat hoof government shutdown or economic chaos over the heads of the american people. house republican does not get to demand ransom for doing their job. he hasn't seen a serious proposal that would allow for the resolving of differences. the president says, look, have the vote. the shutdown ends, then

negotiations can begin. and then he said this. if republicans want to attach a process, they can do that. meaning, end the shutdown and then he said -- his example was we'll speak line-by-line about all of obamacare and discuss for hours on end if they want to. our chief white house correspondent ed henry is still in the briefing room. does this idea of attaching process move the ball forward or not so much? >> it might, shep. i think there's two points out of this news conference. the first is that they were sort of a series of questions in there that enabled the president to go back to talking point after talking point, beating up on republicans as hostage takers and the like. that's going to make headlines. we should not lose sight of what happened earlier in the news conference where the president, for their first time i heard him say it directly, open the door and not just the process of

creating a supercommittee that might give political cover for republicans. bigger than that, the president for the first time said he's willing to sign a short-term extension to open the government for two weeks, three weeks, six weeks, whatever, and a short-term increase to the debt ceiling of a few weeks as well. why that is significant is that you have senate majority leader harry reid, as we speak, still pushing a one-year extension, for example, to increasing the debt celling, with no strings attached. no changes in the health care law, nothing like that. the president is now saying something different. he says he is willing to do a short-term extension for the debt ceiling, open the government for a new weeks, while the other conversation goes off on the side about maybe changing the healthcare law, coming with a broader budget deal. he is willing to have of the conversations. something we hadn't herd until yesterday when this staff opened the door to it, for the commander in chief to now say i'm we willing to deal on that is significant. dot is lead to a deal or not?

we'll see. but he did open the door and that is new and that is important. >> shepard: it is new and we have just gotten word from members of both parties about lou they would react to this and i want to show you this right over here. these are back and forth with republicans and democrats that have been coming to us. the top here, john mccain, a very influential shall republican he says no way. the answer to this is negotiation, not before they shut this -- before they end the shutdown, but -- negotiating before they end it, not after they end it. here's what we got from harry reid just a few minutes ago. he said he will introduce what they've been calling a clean bill. that's been the language. have no policy demands from either party attached to it. the bill will have no strings attached. here's a quiet, it's item for us to stand before the american people and publicly discuss the path forward. so the president may have opened a door, ed henry, and i guess it's open at least from the

standpoint that you can have process but he says as far as negotiating on whether the government can stay shut down, or you get your demands, as he put it, that's not happening. >> right. that's how we have to caution and add the cava. irthere's anything that letter can do well is shut the door on negotiatings negotiatings and not get anything done, take the ball and go home. but what the president did, at least, was get the door ajar here for negotiations. whether the leaders in both parties take and it run with it or just stick to the same old talking points that the american people are probably fed up with by now, is another question. but we should not let the president off the hook that even though he opened the door a bit, he spent a lot of the news conference beating up on the republicans, hostage takers, holing me hostage and they want to burn down the build egg, et cetera. that kind of stuff does not help get republicans to the negotiating table can to say the least. >> certainly doesn't. i don't know if that's even a goal. ed henry, thanks very much.

the president has said all along he's not going to negotiate. he moved the ball forward by saying we can negotiate after the threat goes away, but if you're the republicans, especially the tea party republicans, and what you have found yourself with is a handful of leverage. you have leverage not only over the president but you have leverage over your own party. the tea party wing of the republican party has leverage over that house speak issue, john boehner, and the president bush called it threats. but they've gotten their way, and a lot of americans are very happy they've gotten their way. no matter what is going to happen to the government. they're happy about it. the president also said, we can't make extortion routine as part of our democracy. listen. >> the american people do not get to demand a ransom for during the jobs. you don't get a chance to call your bank and say, i'm not going to pay my mortgage this month unless you throw in a new car and an xbox, if you're in negotiations around buying somebody's house, you don't get

to say, let's talk about the price i'm going to pay and if you don't give me the price i'm going to burn down your house. that's not how negotiations work. >> shepard: and nat altogether clear that rhetoric is helpful. mike emanuel is on capitol hill, watching this with us. mike, i raffled the statement that just came in from harry reid and the statement from john mccain. is it your sense that there is room now, some hope that nine days from now we don't default on our payments for the fitter time ever? >> well, shep, let me give you a little context about senator mccain's comments. that comes with the news that families the fallen in afghanistan are not going to get their death benefits in short order because the government is shut down. john mccain is saying, let's ghetto table, stop name calling, do right by these families in their worst time of their lives. folks put house speaker john

boehner pointing out times when president obama has negotiated on the debt ceiling back in 2010 when there were fiscally conservative house democrats that did not want to raise the debt celling. the president negotiated with them. the republicans sayre why not negotiate now? the house is going forward with legislation to make sure that essential government workers work throwing the shutdown are getting paid on time, and to set up this working group, to get members of the house and senate to the table do talk about fiscal matters such as raising the debt ceiling, and house peeker john boehner says the time to talk is now. all we're asking for is to sit down and have this conversation. there's no reason to make it more difficult to bring people to the table. so, there's no boundaries here, nothing on the table, nothing off the table. i'm trying to do everything i can to bring people together and to have a conversation.

>> you heard the president get a question about the bills the house is passing. tomorrow the house is expected to take up a bill to make sure that these military families get death benefits for the fallen, and then we'll be interested to see what the president does from there on that front. >> shepard: the not is controlled by the democrat. harry reid this leader of the senate democrats. harry reid just made this announcement, he's going to intro do -- introduce this clean bill. the democratted need votes from republican to have this. do they have them? >> they're hoping they will get pressure on some wall street republicans, if you will, they'll hear from the business community who will say do not risk us running into this deadline. if we run to the deadline next week, the markets may freak out. so he is hoping if he takes up this, let's rates the debt ceiling today, bill, they're hope something republicans will feel the pressure from the

business community to not wait it out until next week and do this sooner than later. if he get as couple republicans peeled off and can pass the bell, he hope that raises the pressure hon house speaker john boehner and republicans in the house of representatives. >> shepard: mike, great to see you. thanks so much. so a lot changed in the last 30 minutes or so. the president has opened the door and said you can attach a process to this if you want. ll talk to you as long as we want. we'll talk for hours on end. just keep the government open. what of this? we'll talk to a leading republican who will be in on this vote live. we'll go to brett baier in washington, and what about this bill from leader reid, could it senator would republicans cross over, and if they've do, way they pay at the poll? all of that ahead on shepard smith reporting;

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axiron. >> shepard: more of the day's headlines. the white house reports it's deeply concerned about recent violence in egypt and is calling for the country's government to protect its citizens. a second team of chemical weapons experts now headed to syria, expanding the mission to rid that country of its poison stockpile of gas. today, state-run syrian television ran what it claimed to be video of inspectors touring a chemical plant and shows them apparentlien inspect containers and taking samples. police in boston say officers are giving children rides to school because hundred office city school bus drivers are on strike in bean town. representatives for boston's mass transit system says it's letting kids ride subways and buss for free as long as they

have student i.d. we're off to brett live in washington in two minutes.

>> shepard: 25 minutes before the hour now, and "shepard smith reporting." we have had a lot of movement in this push to get the government re-opened in washington. republicans saying, you have to give in to some of our demands. the president saying we'll negotiate after you promise not to hit the telling ceiling, kathy rogers is a republican in the house of representatives who said we have talk about this forever you refused to negotiate. we need to negotiate. congresswoman, thank you very much for being here. >> thanks good to be with you. >> shepard: she stood with us and watched the president for more than an hour while waiting at the rotunda and we appreciate it. the president said, you can't hold hostage the american people. you can't hold hostage the american government. you can't hold hostage the full faith and credit of the united states, in exchange for this. how do you respond?

>> no one is talking about holding hostage the american economy. what the republicans have been demanding, what the republicans have been asking, is for a simple negotiation so that we can come to th table, so that we can address the issues on he minds -- >> shepard: negotiate what specifically? >> we want to negotiate over the funding bill, over raising the debt ceiling and it includes issues reef lated to a stagnant economy that continues. >> shepard: the president says a lot of people are out of work because the government is shut down. hundreds of thousands of people are out of work abuse the government is shut down. >> are out oft work because the economy is stagnant, and the president in the course of his term, the national debt will have doubled. when he was a u.s. senator he said it was irresponsible to just raise the debt ceiling without addressing what is driving up the debt, and the republicans, what the republicans are asking, is that we simply sit down at the table, try to find some common ground so that we can address the

spending reforms that need to take place so that we can address the economic reforms, to get people back to work, and we can address a healthcare bill that is not ready for prime time. we want to have that conversation, and i didn't hear anything new today. i heard the president saying he would only negotiate on his terms. >> shepard: i read the polls, and congressman, a lot of americans, majority, agree with youen all those points. the president comes back and says, we can't have people around the world not having full faith and credit in the united states. he says, the cost of borrowing will go up. our word won't mean anything weapon can't not pay bills for things we already bought. we can't do it in america. so, if you'll promise we'll open up the government and raise the debt ceiling, then we'll talk about all of this. why is that not okay? >> because it is the president saying he gets everything that he wants, and then we can start to talk. mr. president, we need to have

these negotiations now, and we need to start it -- we need to start immediately. yes, we have some important deadlines around the corner. we do not want to default on our debt. we are going to -- we are going to pay our bills, and we're going to do that. but in the households, what i would tell the president in our own households, when we get happy to max on the credit card we have to reassess what is driving those spending decisions and make some changes. and the president right now wants to take the easy way out. he doesn't want to address those spending drivers. >> shepard: one more question. what you want is negotiations. i hear you. the president says, there will be no negotiations, and on this matter, he is kind of driving this train. if we reach nine days from now and there have been no negotiations, did the republicans let us default on our debt or no? >> i cannot vote to rates the debt ceiling without us addressing what --

>> shepard: you would vote no and we would default on the debt. correct? >> we -- no one wants to default -- >> shepard: i know that. >> that's why we need to start this soon and the president to lead -- >> shepard: he said no. so nine days from no, without negotiations you'll vote know and shut down the government and -- >> i will vote for a package that includes some spending reforms, some progrowth policy that get people back to work. get the economy strong. make america strong -- >> shepard: up or down vote, the answer is no. >> i cannot vote to raise the debt ceiling without there being some kind of spending reform along with it. >> shepard: that's clarity. >> to just continue down the same path. the status quo is not acceptable. the people i represent elected me to make the tough decision. i hear it all the time. they recognize this debt has to be addressed. the economy is stagnant. and this healthcare bill is

unworkable. >> shepard: representative, so good of you to wait around. i appreciate it so much. >> thank you. >> shepard: that's clear, isn't it? we don't want to let the government default. we don't want to not be able to pay our debt. but she is not going to vote yes unless and unless there are negotiations to fix line item spending and i want -- brett bieer is in was on deck two. hi, bret. i heard him open the door, and i was speaking to ed henry at the white house about it. he said, we'll talk about anything you want. after we get past this idea of the full faith and credit of the united states going down the tubes. that's what he said. is that a window or not? >> it is. i mean, ed nailed it. it's an exit ramp. at least one that the president is putting out there for, pass something clean funding the government, clean debt ceiling increase for even just a few weeks while you pinpoint this negotiation that the republicans

are calling for. what is clear to me is that this talking point about negotiation, that speaker boehner and others, like kathy mcmorris-rogerss have been talking about, has some eastbound, and more than- -- some end and 70% according to a cbs poll think both sides to sit at the table to come to a conclusion, and the president spent a lot of time address that point. >> shepard: he made it clear that his belief was that republicans thought, and that their plan was, just delay this and delay this and delay this and refuse, refuse to do this unless we're going to discuss, and eventually the white house will cave in the president says, i'm not caving in but sounds leak he moved a little bit and now there's room. >> this aspirer negotiation negotiation, and this may start back and forth about some short term deal that in the interim republicans can say they got concessions on x, y, and z, and talk about big picture things. i was struck by a couple of other things.

no questions in the long press conference about obamacare, not one. and all of the glitches and troubles not one question about that. two, the questions were all over the map, but mark knoller from cbs asked a pointed question about the house billing, funding bills that have passed already. nine or ten of them. the president said, we don't get to pick and choose based on which party likes what. well, frankly, normal process startness the house. the revenue bills start there from article 1, section 7, clause 1 of the constitution, and that's how it usually goes. so i was struck by those things. >> shepard: you think leader reid's bill going to do anything? he seeps to think he has the votes. >> not this afternoon, i don't think. but i think pretty soon you're going to see that exit ramp and republicans jumping on it. >> shepard: see you tonight. 6:00 eastern, on special report. have you seen the new hundred dollar still in we haven't had a new one na long time.

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>> shepard: ben franklin is getting a big facelift. the federal reserve is rolling out brand new hundred dollar bills happening today. the feds say they've completely redesigned the bill but you can still recognize our founding father here. take a look. i have him up on the big wall. this top one is the current hundred dollar bill. seems like a new bill. but this is the new one down here. this strip right here is supposed to be counter fitte helper, woven into the fabric of the bill, and this here is like an ink well and i'm told it changes colors a as you wiggle

it. where did you guess these? >> i bought these from the new york fed. they gave them to you. >> shepard: gave them? >> you have to give it back but you get if for three minutes. >> shepard: this thing right here, this thing right here, it has a lot of movement in it. >> the color changes as you change the direction of the bill, and it's all about counterfeiting, or stopping it. >> that's right this is the most counterfeited bill off the shores of the country and people copy this bill all the time. a little less than 1% of all bills are counterfeit so sometime in your life you have handled counterfeit money. >> shepard: i knew they all had cocaine on them but didn't know they were counterfeit.

>> it's made out of linen and cotton, the combination. so this would be hard for you as a counterfeiter to fine this in the real world. they're spending 12.5 crepts -- 12.5 cents per pill, and these are mighty pretty, and the u.s. fed let us borrow us. these are sick lated through the banks -- circulated through the banks. it comes through the treasury,. >> shepard: get your hands ounce one of these, it feels like something engraved from crane's paper company. very nice. >> i think they're special, and going to start seeing these. shouldn't worry about it. these are the authentic deal. >> shepard: i'll buy them for you for $20. >> you can pay more for them with the right serial numbers on them. >> shepard: i'll take those. >> novelty these two, my friend.

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♪ ♪ >> shepard: there is breaking news now on fox news channel. just in to the fox news deck, there's a bad fire in in los angeles. fox 11, our owned and operated station in los angeles, is up above the thing. two firefighters have been rescued now from this burning church, which looks likely to be just a complete loss. the roof collapsed. this is a centuries-old -- a century-old wood church. emergency crews say the two firefighters were trapped while they were fighting the fire. this is downtown or near downtown. actually east 27th street near central avenue, south of

downtown. the firefighter on a gurney we saw being loaded into an plans. more transferred to a hospital in stable condition. this was reported early this morning, 9:27 a.m. so it's 27 past noon now local time and they have been at this for a very, very long time. we'll update you throughout the year. i want too show you our favorite pictures of the day. we have them on our monster wall. they all tell very interesting stories but this first one, an afghan soldier taking part in a training exercise outside kabul, they have had some sandy and windy days over the and conditions have been rough as we good into the winter season. this second one, young sick woman performing an act of fire, showing off martial art skills during a religious procession, blowing fire, and this is a beautiful picture here.

leaves changing in new hampshire. some camp grounds are closed due to the federal shutdown but the beginning of the fall colors in new hampshire. it's a little late. it's been really warm so started late. this is in washington, a cranberry bog right across the street from union station, showing how workers harvest the fruit. >> and the solar car in australia. that country hosts the world's solar challenge race, the race covers 1 90 miles, and one more i could show you if we have time and that is this. the los angeles dodgers in chavez ravine last night, beating the atlanta braves. quite an affair. dodgers making it to the next round. pirates have one more to go.

that will happen on wednesday. we'll be right back.

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>> shepard: a minute until the top of the hour and "your world." from the fox news deck, twitter has been blowing up with your thoughts on our new place. it's going to be great for breaking news. we can do stuff everybody else can't do and we think we're going to crush it, our big area touch screens you figured it out. we're not using huge tablets, just hired a bunch of really small staffers. sarah, are you guys small? >> not that small. 5'6". >> shepard: there we good. what the what? fox news deck? >> i like this one here. shep smith will now demonstrate the fire power of this fully operational battle station. remember that from return of the

jedi? all right. you had a good time. we do read them and the idea is when they're real, we'll actually check on them, call police stations and fire departments and fine out and get you the true stuff. here's neil. >> you'll be all right now. i know. -- -- [screaming] block. >> neil: as if all the name calling wasn't enough, now they're scaring the hell out of us. that's why i was so caught up, knowing that was coming. welcome, i'm neil cavuto. let's call the whole country off. >> if congss