ncer ] most importantly, women are seeing results. and still no drastic measures. olay regenerist. [captioning made possible by fox news channel] does gregg: this is captioned by the national captioning institute --www.ncicap.org-- a fox news alert. -- gregg: this is a fox news alert. 10% unemployment could be coming within months, and we will all be affected by the squeeze by wage and growth retirement plans. good morning, everyone. megyn: good to see you. welcome. and the vice president says that the white house misread how bad the economy was.

growing pressure to fix the problem. check this out, the country's debt stands at a staggering $11.40 trillion. equivalent to $37,000 for every single taxpayer. that is just on top of what you think you owe. that number is growing at a rate of $1 trillion per year. gregg: stuart varney has been more worried about this for many months. in addition to $11.40 trillion, it will double under the president's budget and spending. would you regarding the debt as the single biggest problem in our economy? >> there is accumulated national debt, $11.50 trillion, costing us half of a trillion dollars every year in interest. then there is the annual

deficit, running close to $2 trillion this year and growing. you are right, it is the intellectual and policy groundwork for the 2nd stimulus plan, of being laid right now. the times says that there is a compelling case for more government -- government stimulus. paul krugman says we need to get working on this now. why? because stimulus is not working, the jobless rate is headed right to 10%. those shovel ready projects that we heard about four months ago are simply not there, not ready. the stimulus is not working. there is another stimulus plan being talked about, but there is a huge deficit. people do not like it. gregg: help me out. we have not even spend 90% of the first stimulus, and a scant

$500 million is going to infrastructure. just a fraction of the original stimulus. is it not premature to talk about 2nd stimulus when we only spend 10% of the first one? >> look at the next few years, when the full stimulus will be spent. $1 out of four goes to stimulus plans. towards what you might call job creation. of that $1 in four, only $29 billion goes towards highway projects. that is it. stretching the stimulus out over its lifetime, you will not have all of the jobs created that were promised just four months ago. that is why there is all that talk of another stimulus.

gregg: there are two ways out of debt, print money or raise taxes, prolonging recessions and the deterring economic growth. >> you could always do both. gregg: [laughter] double bad] stewart, thank you. megyn: powerful personal stories of average americans threatened with losing their life savings, a federal bankruptcy judge has settled with the white house and the other unions in the general motors bankruptcy. assets are being dumped into a new company that will be mostly owned by the u.s. government and the united auto workers. the judge made his ruling over the objections of over 800 different parties, who argued that the deal was brutally unfair to dealers, creditors, and car owners. the judge said that the only other alternative was liquidation, which would have been far worse for everyone. and the sale of general motor's

assets is expected to start today. gregg: president obama is in moscow today, meeting this morning with his russian counterpart, president medvedev. they are scheduled to talk about nuclear arms reduction. one of the big issues this week is the missile defense system, the shield of the united states wants to build in poland. defense analysts say that this system is critical to defending against attacks from iran. the russians consider a threat. megyn: new information about a deadly monorail crashed in orlando, walt disney world. these pictures were taken by a park guests, and given to fox news last night. two trains collided early on sunday, killing an operator. a park spokesman identified the victim as a 21-year-old computer

science student at a nearby university. emergency crews treating at least six other guests for minor injuries. steve, what is the latest? >> millions of people ride these monorail's every year. the investigation continues this morning. they have removed the trains from the tracks and side of that station overnight. pictures showed the trains looking like they fused together, cars colliding. this happened at 2:00 a.m. after the fourth of july celebration at walt disney world. one train was coming from epcot so late at night, they were still running trains, one of the last of the night. six guests were on board, treated at the scene, they are doing ok. the one driver was killed. the other driver that was hit was treated in a hospital in should be ok. megyn: incredible.

is there not some sort of automated safety system in place on these trains to keep these kinds of things from happening? we have gone so many years and monorail rides without things like this happening before. >> never a death here since the early 1970's. many people do not realize that these are run by pilots, they are not run by computers. we have spoken to past drivers that say that they have a lot of control and that there is a safety system in place. they are not supposed to get within 300 feet of each other before automatic brakes kick in. the system might have malfunctioned or been overwritten somehow. megyn: that is just too bad. an amazing safety record, outside of this incident. thank you, steve. gregg: within hours the first of

almost 9000 lucky winners, if you can say that, will pick up the most valuable ticket in the history of entertainment events. though it is hardly entertaining, it is a memorial service. they are expected to show up at the dodgers stadium, where winners of the lottery are picking up tickets to the michael jackson memorial. more than 1 million folks registered for the lottery, only 9000 get tickets and hundreds of thousands are expected to turn out onto the streets of downtown los angeles tomorrow. we are going live to the city of angels in a few minutes. megyn: incredible. we are getting were the sort of remark -- that's robert mcnamara -- getting more this morning that robert mcnamara died this morning, he had served as secretary of defense during the vietnam war. he became a lightning rod for

critics of the war as he defended administration policies on capitol hill. gregg: two weeks ago the leading health care plan in congress covered 30% of the uninsured and cost $1 trillion. today it will cost half that and cover about everybody. the case of the missing numbers, next. megyn: sounds like my high school math. [laughter] we are going to look at a dramatic video of rioters going head-to-head against -- look at this. look at this. against chinese security forces in what is called the worst violence seen in decades. gregg: plus, sarah palin says she is stepping down, citing media attacks against her children as one of the reasons. we will show you what they said about her this weekend. what is next for the former vice presidential candidate?

megyn: unbelievable video coming into fox news. look at this. violent protests in china taking a deadly turn.

look at how angry these people are. these are pictures of protests between chinese muslims and government security forces. one versus the other. there is a government crackdown on these muslims. at least 140 people had been killed. that number is expected to rise. police are setting up checkpoints, going after writers. muslim minorities said that the violence started after police cracked down on peaceful weekend protests. we can -- we are not sure why they were protesting. we will find out and bring it to you. gregg: congress, coming back from the july 4 holiday, charging back into the health- care debate. there are three proposals under consideration, but they all have one big problem. enormous costs. last week senate leaders said

that it would cost half of a trillion dollars less than originally estimated. how did they manage that? we are trying to figure out what is really in the proposal. here with us now, senator and a doctor barrasso - of wyoming. did they leave something out? seems like they left out a huge number of uninsured americans who would be covered by an expanded medicaid. is that not a bit of tricky mathematics? >> whether they are using a magical calculator or voodoo economics, what ever you would like to call it, it is absolutely misleading to the american people. this is still going to cost well over $1 trillion. last week, visiting with the

governor, medicaid is crushing the government -- all across the country. it is a false sentiment. they are more interested in getting anything past been finding a plan that will work. people are going to see right through this. gregg: the claim that america spends too much on health are -- healthcare already, have these than $1 trillion more just to spend less? does that make sense? >> people get it. you cannot spend $1 trillion and save money in the process. anybody who believes the president's campaign promises are going to be doomed to disappointment when this comes through if we get something passed. gregg: the house majority leader was on the air with us yesterday, saying that in the end a public government

insurance plan will result from all of this. the president is insisting that that kind of a plan would never threaten private insurance. look, you are not only a senator, but a doctor. the government would have the power to dictate prices to doctors, forcing cheaper premiums. would that not give the government a dominant advantage, eventually perhaps forcing out private insurers? >> you are absolutely right. a government plan will lead to a government takeover of medicine in this country. in australia they have a government plan that covers catastrophes, catastrophic care, going to hospital, you end up at the end of the line rather than the front of the line, with five

insurance being more expensive. -- private insurance being more expensive. what we need to do is find a way to encourage and incentivize individual people. new mentioned the kennedy dodd bill, they want to put in sidewalks and street lights. i encourage individuals to stop smoking, lose weight, get their blood pressure under control. we have seen companies across the country share savings with employers, saving money by adopting healthy lifestyles. we need a health care system, not a sickness system, like we have now. gregg: would you be in favor of a network of health-care cooperatives as an alternative solution? >> that is a part of it. allowing people to buy health

insurance across state lines, allowing people to own their own insurance, they should get the same tax breaks that large companies get. people are smart when it comes to spending their own money. so many of these health care decisions do not involve money out of their own pockets, it involves insurance money. as a surgeon, my business -- busiest week was between christmas and new year's. these are people who met their deductible for the year and wanted their free operation before the new season. these are people who are very sharp and smart financially when it comes to their own dollars, but they do not care about insurance companies. gregg: senator, thank you very much for being with us. megyn: we showed you a tape less need -- last week of a marine watching a fight against the taliban.

today we are giving you a first look at a secret weapon at about to be used by u.s. forces. it is a wearable computerized armor system and that you must see to believe. gregg: is very cool. a july 4 celebration goes terribly wrong in indiana. two dozen injured. what caused this pedestrian bridge to collapse? new details, coming up next. gecko vo: geico's the third-largest car insurance company in the nation. but, it's not like we're kicking back, now, havin' a cuppa tea. gecko vo: takes lots of sweat to become that big. gecko vo: 'course, geckos don't literally sweat... it's just not our thing... gecko vo: ...but i do work hard, mind you.

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gregg: we are getting new details on the frightening bridge collapsed in indiana. folks were using a pedestrian

bridge on the way home from an independence day celebration. suddenly it collapsed with everyone on it during a july 4 celebration. 50 people plunged in the water. 25 were injured, at least. fortunately none of them are life threatening. nobody drowned. a town official said that the bridge was terribly overcrowded. megyn: history in the making, president obama arriving in russia this morning meeting with the russian president, dimitri medvedev. a possible nuclear arms agreement is high on the agenda. agreements in the past are set to expire, we are all wondering where we go from here. watching for a controversial missile defense system to become the big issue between these men as president obama says he tries to reset relations with moscow.

to put it in perspective for us, as this is a big trip for the president, he wants to do a number of things, including change the tone between the united states and russia and do what with respect to nuclear arms? >> in a sense he wants to tell the russians that the cold war is over. we all know that it ended 20 years ago, but there is a perception on the american side that russians do not know that. an entire generation of americans and russians do not realize that each country has about 3000 nuclear warheads stockpiled in the design during the cold war to destroy the other country in a nuclear exchange. the president and the russians are committed to lowering that ceiling, bringing it down to a range of about 1500. that is probably what we will hear today. that is probably what will come out of these for our meetings.

they are expected to announce a framework on nuclear weapons to be negotiated later this year because the most comprehensive arms treaty ever negotiated expires in september. they have got to set down the legal framework and a new ceiling on weapons. will it be a specific number or a new range? we will hear something on that. megyn: basically, starts 1 was a strategic agreement to reduce arms. that is part of what the president was doing over there. in the meantime, there is still the matter of the missile defense shield the united states wants to build. we say that it is because we are worried about iran. russia has made no bones about the fact that they do not like it. is that on the agenda? how do they resolve that?

>> i think that it is on the agenda every day in so far as the russians are adamant that the shield has to go away or there has to be a compromise call that might involve the russians thought joining in on that shield. the main is that -- the main thing is that they see as -- seated as an offensive system, although we define and -- the main thing is that they see it as an offensive system, although we have defined it as offensive. discussing the legal framework of verifying the stockpiles of nuclear weapons, that can be dealt with later. russians are telling us that there is no way that we will have any ratification of an arms agreement of the president made today or any other time without dealing with the issue. in the end it is a deal killer. america and russia are going to

have to find a compromise. megyn: the other thing that we have to watch, when they come out to speak later, is what the town will be like. many people saw relations get frosty between vladimir putin and george bush. now it is a new day, new men. we will wait to see. thank you, dana. gregg: all right, police are now saying that guests of steve mcnair, quarterback -- saying that the death of steve mcnair is now a murder case. what they are not telling us is the story about the woman on screen right, found a dead at the scream -- scene of the crime. megyn: sarah palin says that the never-ending attacks on her values, family, and children, forced her to step down from the governor's office. what is next?

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and albacore tuna, crab, salmon and ocean fish flavors. gregg: welcome back. thousands of michael jackson fans are expected at dodger stadium sometime this morning in los angeles. they are there to get their tickets for the michael jackson memorial service. across town, the jackson family is headed to court to discuss michael jackson's will. we are outside of the los angeles supreme court superior building. what can we expect to happen there today, mindy? >> this is basically a showdown

between michael jackson's attorneys and his mother. a fight for power. the jackson family says that they have temporary control as of last monday. no will had been discovered. two days later a will pop up that was 7 years old. that attorney basically said that it is time for control of the estate to be passed on to him, as michael jackson stated in his will. we are going to hear the hearing today, likely going in favor of the family attorney. one of the things that we will be looking at our issues as to whether or not the will is valid. they may not want to argue that, if they could get custody and other things that they want, as well as so much of the money. gregg: the will is not

dispositive of custody, but it sure is important. thank you, mindy. megyn: a public memorial will be held on thursday in tennessee for the former tysons quarterback, steve mcnair. shot to death in his nashville condominium on saturday afternoon. a 20-year-old waitress with whom he had been reportedly having an affair was found nearby. his death was called a homicide, the death of a woman with him has not been classified. he is best known for leading the tennessee titans' to the 2000 super bowl -- was it the super bowl? gregg: it was, it went into overtime against the rams. one of the great ones. investigators in south carolina are stepping up a hunt for a suspected serial killer that they say is responsible for five deaths.

50-year-old gina parker and her 83-year-old mother, both very yesterday. shot to death on wednesday, killing is in that area have resident -- the killing has residents in the area on edge. we will have a live report from that community, coming out. megyn: new follow-up this morning after the huge political news that sarah palin announced she would resign as a last as governor. clause came out. the former vice presidential candidate has suffered a mirage of attacks in the media of her family. it is far from over. the governor had this to say about a recent posting about her entire family, including her baby, trig, who suffers from

down syndrome. listen. >> i think that much of it had to do with recently seeing their baby brother, trig, locked and ridiculed by mean-spirited adults recently. -- mocked and ridiculed by mean- spirited adults recently. we all learn so much from people like trig. needs me, but i need him even more. megyn: what is next for the governor? let's ask our democratic strategist and republican consultant. good morning to both of you. listen, bob, you are no fan of sarah palin, but you are not ridiculous -- defending these blogs that photoshop the children, trying to make them look like devil's spawn. my dad force even the most thick

skinned politician to think twice about pursuing a career in the public eye? >> yes, assuming that she is thinking about not pursuing a career -- i do nothing perugia's. there has been a double standard applied to her, i will take some responsibility myself. if a democratic woman had been subjected to the jokes directed at her, letterman would not be on the air right now. there is a reasonable argument to be made that she has been treated differently. on the other hand, she has offered herself up in a way that leads to this kind of ridicule, although that does not excuse it at all. she has been subject to recover -- double standard. looks to me like she wants to run for president, meaning that she will have to take more of this. megyn: andrea, your comments on what she has been subjected to and where she goes from here? >> i take personal offense to

the attacking of her son. my younger brother is also handicapped. this is outrageous. but i do not think that this is the reason she stepped down. she is stepping into the lion's den. the article expedited the process even more. from day one the left has been out to get her. now she was getting a tax from the right. even more she is going to see those problems. megyn: that was happening before. those people on the john mccain team that attacker -- remember carl cameron reporting on that after the campaign ended? about the awful things that were said about her? she has been under attack for months. the question is, why now? if she is blaming the media, what was it about the recent attack that was so bad? >> it is not the media. she looked at the political

landscape, looking at the top of the ticket. mitt romney, newt gingrich, they do not have day jobs. they can write books, raise money, go on fox news. that is what sarah palin needs to do, come down here and get serious, get a weekly radio address, do some research herself. she needs to raise money for herself and other candidates. she needs to write a book on something of substance. she needs to get some think in her passport. she needs to sharpen her attack against barack obama. there is a huge leadership vacuum in the republican party. the old guard is over and sarah palin is part of the new guard and she realizes it. stepping down to become the next conservative oprah winfrey or president of the united states, now is for town -- her time. megyn: you think that she is delusional, bob? >> the idea that you leave the

only job that you have that gives you any kind of standing of substance, and at the same time being disingenuous by saying that all lame-duck governors -- every governor is eventually a lame duck. she quit her job, most of them do their job. if the idea is that this will somehow give her the time to raise money and do other things, helping her presidential aspirations, that is not. no way that will happen. >> why? >> why? because she walked away from a governorship for a reason that is not at all clear. then she says that everybody who leaves office goes to a higher calling. if that is the case, then tell us your running for president. then there is a lawyer threatening to sue everyone in the media if they print stories about her background. what is that about? >> it is fair. barack obama left the people of

illinois, hillary clinton left the people of new york, even though she was not home grown there. it shows that this woman is the -- deeply threatening to your buddies on the left and in the media. megyn: the people that love her, love her. the people that she needs to shore up our these independents that did not go for her and people with questions about her. how does leaving the governorship help her in that regard? >> and now she is free to be a national spokesperson, attacking barack obama and his administration on the ridiculous things they're doing. quadrupling the deficit, asking where the jobs are. she does not need to script reporters like barack obama does. she can show that she can speak off the cuff. think about this time in the country right now. it is crucial.

republicans have nobody leading the charge. megyn: even the lieutenant governor backed her up, saying that it was costing the people millions of dollars, ethics complaints up to the eyeballs, all of which had been thrown out. she basically could not get the job done as governor. >> listen, there are lots of governors that take ethics charges all the time. being scared of sarah palin, i will lose sleep over that one. it is good for the democrats to have her out there. barack obama, hillary clinton, they left office because they were running in said so. she is leaving office and saying, vaguely, that she is approaching a higher calling. if you take that off-the-cuff statements, leading from the

bottom, she could have used a teleprompter. >> what happened? the guy that elevated geraldine ferraro? what happened to you? >> i said she was not treated fairly, that does not make me not a feminist. yes, she has got a bad rap, but you finish your job. simple as that. megyn: bob, a feminist, on record. you heard it here first. thank you, my friends. the media's treatment of sarah palin is on the docket in "kelly's court" today. her lawyer came out with a scathing attack, threatening litigation against people in the media for things they might be publishing. we are going to take a closer look at whether this guy has a leg to stand on. could she go from governor to

litigant? stay tuned. gregg: bob is a feminist? megyn: not ashamed. before you, bob. gregg: what caused a pedestrian bridge in indiana to suddenly collapsed? dozens of fourth of july revelers, dump into the water in the dark of the night. we will take a look at its structural issues are to blame. megyn: u.s. troops are going high-tech. you will not believe this. they have incredible new gear to take out the taliban in afghanistan. a suit of armor that is seriously helping in the ground war on terror. (male announcer) if you've had a heart attack

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gregg: this is a fascinating story. u.s. army fifth striker brigade is heading to afghanistan with brand new high-tech gear. it is called the land warrior, a wearable computer system that lets soldiers tracked other soldiers and you maps, as well

as doing a whole lot more. joining me now is the land warfare reporter for "defense news." this is incredible. explain how it works. >> thank you for having me. technology in the military is evolving quickly, a real thrust putting the soldier in the center of the network, the idea being that the other infantry units in afghanistan are very spread out. you have light infantry units. the land warrior system has a digital map display that allows each soldier to see where they are and in relation to the rest of the soldiers in their unit. you can imagine the advantages that this would provide when looking at close quarters combat. there is this real intelligence reconnaissance surveillance question where they can get real-time images.

gregg: reading about it here, one of the soldiers said that within seconds they know exactly where they are right after they jumped out of the helicopter, not to mention exactly were the target is. this is an enormous advancement in warfare technology. >> is. one of the interesting things about this system is that it has been evolving for many years. one of the things that it is able to do is bring up a chemical light, letting the infantry know if a unit has been cleared. with gps they will know where they are, exactly. this helps to reduce friendly fire and increase situational awareness, knowing where they are in relation to everything else. earlier versions did very well in iraq. like many of these units, they are going to afghanistan. gregg: you can use the icon on the map to get instantaneous

information as to where a particular person that you are looking at has been. right? and you can press another button if you are injured and a medic will be standing by? >> indeed. one of the things about this next generation of land warrior systems, there is a sniper detector in system. a microphone and an acoustic sensor that locates the incoming source of sniper or enemy fire. you can imagine what this would mean. gregg: the fifth brigade is taking 895 of these systems into afghanistan. is this going to change the landscape of future warfare and really help our fighting forces in afghanistan? >> without a doubt. paving the way for what they call the ensemble, connecting

themselves with a host of censors. moving vehicles, things of that sort. gregg: all right. chris, great to talk with you. megyn: the search for a possible serial killer is under way in south carolina. five people are dead, including this woman, all believed to be random victims. late breaking news on what the sheriff is doing to track down a possible suspect. gregg: if you think that the economy is bad now, economists are raising a red flag over the price of oil. what are they saying? how could it affect your bank account? a reminder, you can follow the latest updates from fox news reporters and producers through their own breaking news blog. you can find it at fox news -- foxnews.com/liveshot.

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megyn: this is a fox news alert. a sheriff in a small south carolina town, increasing the award in a desperate search for a serial killer. they are offering $20,000 for any clues as the manhunt intensified. two victims just laid to rest. barry yesterday afternoon, gena parker and her mother. the older woman was found about one hour outside of charlotte.

their deaths are the work of a serial killer. marion is live in south carolina, where many people have armed themselves. you can imagine how disconcerting this is. are the police any closer to catching the killer? is the fbi involved? what are they doing? >> there are a lot of agencies involved, including state law enforcement and avi -- every deputy police officer they can get their hands on. today the sheriff said that there are a couple of schools in the area where kids are going back. commerce cannot just stop. usually on a day like this the parking lot is full, but today it is empty. people are staying home, although hundreds of people turned out for funerals yesterday. people are staying home, arming themselves, paralyzed with fear. megyn: what is his m.o.?

are any of these victims connected in any way? >> the sheriff said earlier, reiterating that they believe that all five killings are connected, perpetrated by the same person, although they have not said what evidence they have to suggest that. ballistics? shell casings? something from the gun of the shooter could have linked it all together? but they are not confirming that. megyn: women, women and men, what do they know? >> three were women, two were men. the sheriff said that he believed they were targeting women. a peach farmer got a look at the suspect because he talked to her first. they think that he is targeting women, although there were two male victims. megyn: thank you for the information.

gregg: incredible. megyn: chilling. gregg: sarah palin, fighting back after she said she was stepping down because of the blood sport and politics. her words. she and her attorneys are going after the people attacking her from the left. megyn: thousands are expected to show up for michael jackson's funeral or memorial service in los angeles. they are waiting to get in, updates as we get them. for

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just pick up the phone and call. you will lose weight. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- megyn: fox news alert, these are era -- a real views of dodgers stadium. we just had a look at traffic, stretching as far as the eye could see. thousands and thousands of fans, each having one ticket to go to michael jackson's memorial service, are waiting to get into dodgers stadium. they are not allowed in until 8:00 a.m. california time. people are already stretching for blocks and blocks. over 1.5 million people registered online to get these tickets. we are told that only 9000 actually got them. you can see, they are looking for the right shot.

trust me, it is there. these folks are not going to miss the opportunity to pick up tickets. in a bit of drama, michael jackson has had from following him everywhere since he died. this is not the stadium where the memorial service takes place. the memorial services at the staples center. this is dodgers stadium, where they paid him a moment of silence. these folks are blocking -- blocking traffic, not going to miss a moment. you can catch it all on fox and fox broadcast channels. in the meantime, twittering to set the story straight, sarah palin lashing out at her cyberspace critics. turning to the popular networking sites to dispel rumors about herself, she sent out this tweet a short time ago.

"critics are spinning as they feed false information on the right information -- right decision made to not run again. welcome to a brand new hour of "america's newsroom." i am megyn kelly. gregg: i am gregg jarrett, in for bill hemmer. speculation is rampant after the governor's announcement. she says she is not ignoring the rumor mill right now. megyn: if you are not familiar with a tweet, it is from twitter. she is reportedly offering on- line comments, adding to -- she is heading to west alaska villages, looking forward to some fishing. shannon, what else has she said? >> she addressed the situation,

that she has taken a number of ethics violation allegations. she has spent a lot of money disproving them. the latest rumors that the fbi was somehow investigating her. this came up to roy bloggers who has a talk show in anchorage. the fbi has actually taken the unusual step of coming out to say that we are not investigating her. they admitted that it was unusual for them to comment on whether or not there is an investigation. but they said they could not go without commenting. she and her family have spent hundreds of thousands of dollars defending her against ethics allegations. megyn: now she is coming out on quitter and using facebook to update folks on where she stands. my understanding is that on a facebook page, she went off on

the media for once again misunderstanding her. >> she did at have any media availability. there was estranged press conference on friday afternoon. she was out there and saying what she wanted to. trying to keep up with facebook and twitter, we found out what was going on. she has been getting her side of the story out. another twitter that came from her yesterday, "trying to get the truth to you, no fbi scandal." she is keeping up regularly, her best way to communicate. she says that it is the best means for her to be able to do what she wants to do. many people over the weekend say that she is tired that she has lost control of the narrative and that she wants to take back political gain. many people in washington feel that she is not packaged,

appealing to folks in the real world. she is taking the reins on this. megyn: package is how they like it inside of the beltway. her fans were encouraged, she offered a talk on facebook about pursuing a higher calling to advance conservative calling. we will wait and see. thank you, shannon. gregg: maybe she could get a talk show? we are awaiting a news conference from the former washington, d.c. mayor, marion barry, in the news again after a woman claimed that a councilman was stalking her. this is just the latest of legal woes for mr. barry. you might recall his arrest for drug charges in the early 1990's, when he was mayor. he says that new claims are baseless. we will have his remarks for

you, shortly. megyn: investigations in two different states this morning after holiday fireworks killed five people. four were in a single blast on the outer banks of north carolina. the explosion was the loudest that witnesses had ever heard. they immediately knew that something had gone wrong. when the smoke settled, four workers were killed. a fifth died in pennsylvania. gregg: holiday celebration, a horrifying term in indiana when a pedestrian bridge collapses during a fireworks show. survivors said that at least 50 people plunged into 10 feet of water. families are claiming that the bridge was not say. robert is one of the lucky survivors.

robert, were people just standing there looking at the fireworks and everybody was concentrated on this bridge? is that what was happening? >> mostly we were trying to leave, the fireworks celebration was ending. we were trying to get back to the parking lot, to our vehicles. gregg: what did you see and feel when that happened? >> you could feel it falling apart. the bridge itself collapsed into the water. it was pandemonium. gregg: describe what happened to you. >> several cutts to my forehead, arms, and legs. gregg: when you were in the water, what did you do? >> [inaudible] gregg: were you successful? >> exactly. gregg: tell us about the others

in the water. one mother was clutching her baby? >> yes, there was a lot of screaming, a lot of people not knowing what to do or where to go. it was complete chaos. there were too many people actually on the bridge itself. they were attempting to monitor how many adult children were on the bridge at the time. it was overcrowded with people. gregg: how overcrowded? >> between 60 and 70 people. others are saying around hundred. gregg: unbelievable. >> i have lived here for about eight years. who knows that the last time that bridge was look at. gregg: not a steel bridge, it is

a wooden bridge. it only has so much capacity for the structural integrity to maintain itself. >> it does. it was completely overcrowded. i was almost three-quarters of the way through the bridge at the time when i heard cables snapped. before you knew it, we were in the water. gregg: dark, cold water. screaming, shouting. people fighting for their lives. >> it was. it was. ambulance services came out there. people were sent to four or five different hospitals centers. gregg: robert, glad that you are alive. glad that nobody drowned. there are some injuries. >> a lot of injured people. thank you. gregg: thank you for sharing

your incredible story. megyn: - she voted to allow for discrimination in the workplace that would have helped african- americans. judge sonia sotomayor may have been working for a long time to allow these racial preferences in the workplace. is her nomination in trouble? gregg: michael jackson's mother, taking care of his kids right now. she mind i could to keep them in the long run. the custody battle that could change everything. -- she might not get to keep them in the long run. the custody battle that could change everything. megyn: marion barry, we get his side of the story in stocking allegations. grill: cheese and crackers!!! what just hap...whoa!

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gregg: fox news alert, the associated press is reporting an islamic website claiming that the taliban has kidnapped a missing american soldier in afghanistan, who disappeared last week. remember, the u.s. military is saying that this soldier left the base in violation of

america's military policy. an islamic website, according to the associated press, claiming that they have indeed kidnapped him. megyn: did supreme court nominee, sonia sotomayor, play more of a role in this controversial group than we knew? she is coming -- coming under new criticism this morning for her support of racial preference in the workplace. she recently came under fire for ruling in a case that allowed for discrimination against white and hispanic firefighters in favor of african-american firefighters. we have learned that she sat on the board of a four rican legal defense and education fund. we learned that they took controversial positions. a republican senator is with us, the ranking member on the senate judiciary committee.

a man that will be cross- examining her as early as monday. good morning. >> the morning. megyn: she was part of an organization that i mentioned, these four rican -- puerto r icans. now we learn that this group controversial positions pushing for racial preference in the workplace, for minorities in particular and people of hispanic descent. do we know whether she specifically supported those positions? >> member of the board, in active according to the "the new york times -- inactive according to "the new york times." it does relate to the firefighters' case, attacking the results of some of those cases. i think that it raises questions

about the of that is her philosophy and if she is going to carry that to the court, even if the law does not supported. megyn: some of these papers say that this group had done very well in challenging promotions for firefighters i am pleased apartments in new york city, that they managed to get affirmative quotas, getting rid of testing altogether, but that these cases will be tougher in the future because the city of new york had hired psychologists and made the tests and a lot better. these guys are skilled in doing a good job. do the members of these defense funds want? -- or does this suggest a more radical agenda? >> a good point. with regard to the firefighter case in connecticut, the concern

is that the court dismissed, even before trial, the complaints of the firefighters who felt that they had been discriminated against by the elimination of the test that they passed. and whether or not that prior incident of advocate -- advocacy affected her elimination. all nine justices agreed that there should at least have been a trial. if you of them throughout the case entirely based on the record that this was a fair test. once you have a fair test that you go forward with, the people that passed the test are entitled to be put up for promotion. no one found the test to be unfair. megyn: what about trying to distance her from the documents? look, she was on the board, not that big a deal. not a lawyer for responsible for pushing the policy iies, and her

advocates are saying that you would be hard-pressed to find a hispanic justice of note that had not done some time working for one of these civil rights organizations that advance the cause of hispanics or what have you. that this is not unusual and to try to impugn her for saying she is responsible for everything organization did might be unfair. your response? >> she participated in an organization or lawsuit, clearly participating actively as a supervisor of lawyers who actually litigated the cases, that is important. there is no evidence mysia objected the positions they were taking. the question is really -- is this a philosophy that she has allowed to influence her decision making process on the bench? or later on the supreme court or

other cases? similarly, coming before the court. that is just one of the questions. megyn: one of the questions we assume that you will be asking as we want to question the nominee next week. thank you for being here, senator. >> thank you. gregg: you can see the number is climbing up capitol hill. there are new worries that rising gasoline prices are putting more than your checking account in jeopardy. megyn: sarah palin, calling out the media for getting nasty in the coverage of her and her family. kenji taken to court? that is coming up in "kelly's court." 90s slacker hip-hop. ♪ singer: buckle up, everybody 'cause we're taking a ride ♪

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making it all a bit easier -- now that's progressive! call or click today. megyn: the sheriff of a small south carolina town is offering money that will lead them to information on catching a serial killer. the man has killed five people in the past week. victims include a peach farmer, an elderly woman and her daughter calr, and a man and hi- year-old daughter. here is a sketch of the man they're looking for. the police are staying tight- lipped on the evidence and motive. this is the man they're looking for.

what residents to be on alert. gregg: we are awaiting a news conference out of moscow. president obama and his russian counterpart, dmitry medvedev, set to speak after the first day of a two day summit. the white house, looking for a fresh start after years of icy exchanges. major, break down the numbers for us on the likely nuclear arms reduction efforts. >> the key word is efforts. this is not a deal, it is not a treaty, it is a process by which they hope to announce a little bit more progress. essentially we expect them to say that both nations have agreed to reduce operationally deployed nuclear warheads from roughly 3000 a 1500.

that would be a 15% reduction, the first big two nation reduction in warheads in seven or eight years. there are a lot of details to work out. both sides are trying to reduce the number of delivery systems. we do not have any firm details yet. under the current treaty, both have about 1600 in reduction, meeting the number. that is all i process that both nations could try to do to get something on paper before the start of the treaty, when it all expires on december 5 of this year. >gregg: we are told over and over that this summit is supposed to reset u.s.-russian relations. what does that really mean? >> the president said in several interviews with russian media that he basically wants to show the russian people and leadership that the united

states respects them and wants to put aside old differences, creating new possibilities. reset is a metaphor, not yet a policy. no specifics have been built. gregg: thank you, maj. megyn: most of the nation is struggling through --dart financial times. it is a mess. so is this teleprompter. [laughter] gregg: yesterday it was worse. megyn: i guess we will talk about sarah palin soon. gregg: what gave it away? megyn: a picture with no text anywhere. "kelly's court" takes on her lawsuit, coming up.

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the pumps, as you well know if you are driving a car these days. this morning there is a report in "the wall street journal" suggesting that our economic recovery could be threatened. stuart varney, normally the bad news guy, could be here with good news? >> that report in "the wall street journal" is accurate. government and recovery a round of world have been hurt. my point is that it is over. supply and demand, ok? a huge amount of supply out there, but where is the demand in america? 10% unemployment? where is the demand around the world? gregg: cutting production might have an impact. >> but not enough. speculators could drive the price down just as much as they could drive it up. i think that the price of

gasoline could come down 50 cents per gallon from where it is now by early fall. back to $2.20 per gallon, there is a distinct possibility that that could happen. gregg: great for people at the pump, what about general motors? >> bad news. they are going to be turning out smaller, green fuel efficient cars. we are not going to buy them. we want and like the big cars, not these small things. >> is that because we have rarely short memories as americans? >> i think that america is a big country. we have got a big road. we drive big cars. we won big cars. gregg: we have bigger families. >> much bigger families and europeans. this is america. gregg: i cannot get into a prius

with my family. it is an ugly car. >> gasoline is down 50 cents per gallon. maybe $2.25 a run the country, that is my prediction. gregg: goldman sachs said that crude could go up to $200. >> they made a handsome profit driving of that crisis. now it is time to make a handsome profit driving it down. it is already happening. oil peaked at 72 cents a couple of weeks ago. now we are down to $64 per barrel, as of this morning. gregg: what does it do to the long-term efforts, that this administration is promoting for energy independence? >> not much. the demand for gasoline being down, it means that we are importing less foreign oil.

it sets back the idea that we will shift to voluntarily toward smaller, more fuel-efficient cars. the long-term thrust could be that the administration might step in with a gas tax. the price of gasoline will be back out, and then we could buy those small, lector cars. gregg: the dow jones industrial average is down 68 points. what is going on? >> that is because those green shoots in the economy that we were all talking about, they are not there. they are not talking about those anymore. they are talking about a flat, bottoming out of the downside. gregg: good to see you. thank you. megyn kelly? kelly: -- megyn: "kelly's court" is back in session.

sarah palin, threatening many media outlets with it -- defamation lawsuit. she says that it has been harmful to her, her family, and her state. she did not resign because of ethics violations, but one logger suggests that she did. "sarah palin was suggested of wrongdoing, possibly involved with kickbacks in her town of." "the new york times," "the washington post," msnbc, all linking to the report. sarah palin's lawyer is prepared to sue. does she have a case? let's ask our panel. good morning. >> good morning. megyn: this lawyer is ticked off, taking aim at this particular loblogger, coming out fighting herself, ripping on sarah palin again. the lawyer says that she is

ready for a defamation lawsuit. david, do they have the goods? >> i do not blame that lawyer for being angry. it can be difficult to make a case against a public figure. when you are a public figure and defamation is made, you have to prove malice. in this case, these are the usual media of suspects that have been going after her with a malicious campaign. since the day that she was selected as john mccain's running mate, they have been after her. coupled with the fact that this media outlet, blogger, and the rest of these media outfits did not actually contact the fbi in alaska, who would have told them that there is no criminal investigation on any of these issues. that is called due diligence.

"the los angeles times" and did it. i see reckless disregard for the truth all of the way. megyn: was there an obligation? this was a logger who came out and said that there were rumors of possible corruption. did this blogger have a responsibility to contact the fbi? did she have that obligation? did these other news outlets have that obligation? >> mrsa in that she is up for ethical violations. what they did is exactly right. she carved out the exception made under the law. this is an opinion. these are rumors. maybe she is doing this because she might be subject to wrongdoing, or because there weren't ethical charges. when someone reads blog, for instance -- reads

blgo, they know that -- blog, they know that it is an opinion. readers know that is not true. there is no defamation. if they bring the case, they will be subject to a motion to dismiss and might be subject to rule 11, sanctions for frivolous claims. megyn: david, let me ask you, why is mercedes right? nobody has heard of shannon, does america really read her blog about rumors of sarah palin? to the extent that other news outlets linked to the blog, is that really how people are getting their news? taking it as a fax? corpas do people know that this is b.s.?

>> these larger media outlets that linked to this web site, they are lending credibility to it. it is far more than just the opinion. this suggests, through a factual scenario, that there is a criminal investigation going on. this blogger has been after sarah palin for a long time. look at the presentation in the media. they have been on a virtual campaign to try to destroy her credibility. it is hard to refute that. the totality of the circumstances mean a lawsuit and a strong case. if you imply that this is only an opinion, the totality of circumstances shows that there is a lawsuit. sarah palin has a political future. this kind of lawsuit could do harm to it. threatening it could be better than pursuing it.

megyn: that is the problem. when she gets into court, first of all, i support the they could assert that it is opinion. or that the truth is the defense, if they think that they have the goods, even though we have seen no evidence. this woman that i mention called out and called the governor someone who was overreacting massively. "what kind of politician attacks an ordinary american on the fourth of july for speaking her mind? the first amendment was designed to protect people like me from people like her here " now, the blogger is claiming she is the victim. -- like her." now the blogger is claiming she is the victim. >> she is allowed to do that under the first amendment and she is exactly right. the first amendment protects opinion. it does not protect untrue factual assertions designed to

harm someone as reputation. it is a very high standard. the reason why those media outlets linked to her is because they knew that if they started to assert them, there might be a change because of heightened credibility. >> the problem, fox news would never allow you to do a story like this without due diligence. i would never do a story like this without corroboration. megyn: but they just lunked inko the blog, they did that take it on as the wrong, according to our bring room. >> the problem is that they regularly slam sarah palin. >> what are you suggesting? what you are doing is essentially saying that no one can have opinion under the first

amendment. megyn: one final word for our viewers, sarah palin has every right to be offended and upset by baseless claims. but she will not win in a lawsuit. unless it is clear, clear that the statements were made with actual malice, meaning that the blogger knew they were false, they are not actionable. that is life for a public figure thanks to the first amendment. having said all of that, she was right to make the threat of a defamation lawsuit. many were happy to see her fighting back against a portion of the attacks upon her. gregg: spot on. we are getting some breaking news on reducing nuclear weapons with russia. we will have that for you in just a moment.

jane: had the top of the hour we are covering a strange and scary story out of south carolina, a serial killer is on the loose. we will talk to the chief of police. rick:" we will talk about the comments made by joe biden over the weekend. now what? we will talk about that of "

happening now." -- on "happening now." gregg: we are waiting for a news conference from president obama, visiting russia in an attempt to restart relations. their relations have become strained over the years, in part because of a proposed u.s. missile defense shield in europe. the bush administration spent a lot of political capital getting the wheels rolling on that project. what happened now? we have a former special assistant to the president for national security affairs. mr. paul, thank you for being here. we will not make any concessions, according to the white house, but not in the budget. do you think that this is negotiable?

>> i think that they are trying to keep the issue ambiguous. the president has a review under way on what kinds of missiles are most appropriate, and this is buying him time. they are avoiding committing to developing programs. in the end it could be some kind of compliment. >> as you know, russians are making a link between the production of nuclear warheads and pulling back on the deployment in eastern europe. if the president, what would be the impact and the fallout? >> the most important would be political. the united states senate would be critical of the underlying

agreements that would have to be submitted to the senate for approval. many people would be resentful, senators would be very unhappy. on the other hand, talking in terms of compromising language apart from the treaty itself, that might be where the focus goes. gregg: what about the russian proposal to install components on russian soil for deterring threats? what about that? >> obama said that he has interest in talking about that. he does say that he wants to include them at a look at european missile defenses to see if they can cooperate together. the russians have suggested some kind of cooperation. gregg: the president wants moscow to pressure iran on its nuclear program.

there is an interest in moscow for limiting the production in iran. the national security adviser under president carter wrote this, that russia would greatly benefit if the u.s. iranian crisis triggered a surge in energy prices. is it your sense that the russians will not make an effort to stop the program? >> not the kind of effort that we would like as opposed to the effort that they're willing to make. they have shared the view, and shown it on the north korean issue. at the same time, they seem to be more open to iran actually developing a weapon, then trying to find the means to deter and detained. russians have a whole panoply of issues with iran. they have the ability to start trouble inside of russian territories, or neighboring

states. there is a kind of pushed me, pull your relationship that cannot be summarized. >> douglas ball, former assistant to the president, thank you. megyn: the former mayor of washington, d.c., marion barry, now a city council member, is making his own defense, denying the stalking charges filed against the former mayor on saturday. this has been quite a story, folks. accused of stalking his ex- girlfriend. we will tell you what he is accused of doing and what the lawyer is saying. . we've made a great product even better.

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megyn: this is a fox news alert. we have breaking news out of the pentagon on this u.s. soldier captured by the taliban. we have been trying to figure out the details on what are u.s. troops are doing to recover him. jennifer griffin, what have we learned? >> i talked to one u.s. defense official over the weekend who said this private had mental problems. he left behind his body armor and his weapon. there is some confusion as to whether he was with the three afghans. there is a posting on a web site sydney that the taliban is holding him. u.s. defense officials are not sure which faction of the taliban and whether this private

has been traded to another group. the air yet that he was kidnapped in on the border of pakistan, there is a known network of kidnappers. u.s. defense officials are not saying which group they think are holding the soldier. he had some mental problems when he left that place. he disappeared from the tiny outpost last week. megyn: have we had any word of any demands from taliban or others? >> we understood that a well- known stringer had received a phone call from a taliban spokesman in which he had suggested that they would trade taliban prisoners for this american soldier. i spoke to defense officials since then and they're not in negotiations at this point. they do not know which group is holding this private. megyn: good reporting, thank you.

gregg: this is a fox news alert. we have been monitoring a news conference from former washington, d.c. mayor marion barry. he was busted this week after a woman claimed he was stalking her. you may recall his arrest on drug charges in the early 1990's when he was caught smoking crack in a hotel. you get the picture. he says that these latest claims are baseless. >> the charges -- the arrest was for mr. meamisdemeanor stalg mr. barry denies stockinalking

anyone. we believe the charges baseless. it stems from a personal relationship that has gone horribly wrong in a lot of ways. and repaying him for some of his kindness by offering up these charges, as we believe to be false. gregg: the lawyer for marion barry. megyn: his spokesman said they were essentially in a relationship and have lunch together that afternoon. she says he got pulled over for a traffic violation. it devolved into some misdemeanor stalking charge as marion barry finds himself on the wrong side of the law again. a news conference between president obama, who is in moscow right now meeting with president dmitry medvedev.

decisions that could affect the nuclear future of the world.

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megyn: this is a fox news alert. the newest senator, al franken has just arrived and got into the building. this is his first day at work. this is his first day at work.