endeavor repairing some batteries to get them all replace. thank you for joining us. "the live desk" is up next. martha: you have to keep it right here first. we have lots of breaking news. there is a hot story out there on this friday afternoon. trace: we're live inside the fox news room. today, we're outside the fox news headquarters because this is where the news begins. if you look over here behind us, this is the national desk. they are working on this story we told you about just minutes ago about a potential gunmen at the university of south florida. we will get you updated on that. this is the foreign desk. they cover the globe. every single picture that comes into fox news channel comes in over here on the media desk of

"the live desk" we begin with breaking news. martha: president obama accused him of acting stupidly. today, we have seen an outpouring of support for sergeant james crowley. this is from the police union in cambridge. take a look. >> the supervisors of the cambridge police department deeply resent the implication and reject any suggestion that in this case or any other case, they have allowed a person's race to direct their activities. however, we hope that they will reflect upon their past comments and apologize to the people of the cambridge police department. martha: they are requesting an apology for getting their feelings hurt. this is officer james crowley. you saw him standing in that huge group in that news conference. he is the officer who arrested renowned black harvard professor

henry louis gates. the men have two very different stories about what happened that day. gates says that his arrest was racially motivated while crowley, who has come out subsequently -- he was handpicked by the police force to train other officers about how to avoid racial profiling -- he said that he had good reason to make the arrest and he will not apologize for doing his job. here is the very latest. what to the officials want at this point? >> union officials wanted to stand up here and show a unified front to say that we support sergeant rally. they wanted to clear the record for themselves and all of the other officers that they believe have their feelings hurt by the president. comments that were recently made by the elected officials. they say that race does not play a role in their position as a police officers and it did not play a role in this case.

sergeant rally did not speak, but union officials came down pretty hard on the remarks that president obama made. both men admitted that they did not have all the facts, but went ahead and said something anyway. >> we would like to comment briefly and reply to the remarks made by president obama. they said that they did not have all the facts. usually, when one hears those words, i would expect the next words would be, so i could not comment. instead, both officials, both admitted friend of professor gates, an insult to the handling of the case by the cambridge police department. >> union officials believe that once they have the facts of this case, an apology will be warranted. that is what they're calling for. one individual union officials to appear in said that the cambridge police are not stupid.

it is a bit of a sting from union officials. martha: what happens next? professor gates has left the door open. what about the police's own investigation into this matter? >> the commissioners said that they are going to create a panel to look into this incident to make sure that everything is looked over quite thoroughly. they are also looking into the possibility of that 911 tape coming out, the possibility of radio transmissions from the actual incident coming out. that is a possibility that if this is all released, it could said -- shed light on what could actually occurred. they're hoping to find a resolution to all of this. martha: that is a really important point. there was a 911 call that was initially made. they said that they saw no reason why the 911 call will not be released some point in this investigation.

that would be the call that the woman made and how she described the two people should believe were breaking into the home. trace: the president has been called on to apologize for hurting their feelings. he will speak in 10 minutes. also, the white house briefing begins at the top of the next hour. you can bet that robert gibbs will be hammered on this subject. we will bring you the highlights of that. let's get to the white house and mike emanuel. what is the latest at the white house between the cambridge police and professor gates? >> robert gives this morning told reporters that president obama has great respect for law enforcement officers, but he also said he thinks that the president has said what he has to say on this subject. the president was somewhat surprised and may have some regrets. "i think he would regret if you realize how much of an overall distraction and obsession it would be.

i think he probably would regret distracting you guys with your obsessions. in other words, reporters are focusing on this story rather than some of the other topics such as health care reform. basically, this has taken the white house of message because they are fielding questions about racial issues and whether the president should apologize. trace: while we have you, we want to get your take on the other thing. what is the white house saying about the senate's plan not to vote on health care before the august recess? >> robert gibbs told us that president obama continues to work on the issue. he met with harry reed and max baucus behind closed doors, talking specifics about the plan, also talking about timing. chief of staff rahm emanuel pointed to nancy pelosi saying that she believes that health care could come up for a vote next week. the continues saying that the president is working the issue.

they are continuing to try to push it. martha: our next guest is not too happy with the senate version of the health care reform bill, saying that senate democrats have ignored my plea for bipartisanship. no american should have to pay more to get less. he has a republican from wyoming. he is also a medical doctor. it is good to have you here. thank you for coming in today. talk about where this stands in the senate. we are very close to vacation time. both. reading and nancy pelosi suggested this is going to float. where do we stand? >> we stand -- i think this is a victory for the american people if all the representatives of government go home and listen to people and then come back after labor day and bring back all of those good ideas.

i do read the words that are on this bill that nancy pelosi talks about having a vote on. these are the words that where it to be voted on. these are not good for the american people. it makes matters worse. the congressional budget office says that those bills are much too expensive and the increase the cost of care. we need to have health care reform and we need to get costs down. we need to do all we can that we neglected to do, but the things that fox talked about today -- people are most concerned about the economy. health care is important, but it is not as pressing of an issue as the economy is in this country. martha: what the white house says is that those things are intrinsically linked. they say that one of the reasons that the economy is in such trouble is the rising cost of

health care. to them, it is one of the most fundamental economic problems and the country. do you agree with that? >> i think the rising cost of health care is a huge problem in this country. these bills don't do much more than shifting around who pays for them. how do we work to get the waste out of the system and the waste and the fraud and the abuse? we know that there are a lot of tests being ordered. they do not help people get better, but they are used by doctors because they are afraid. there is money that can be saved. read the bill to see what is in there. also, say what is left out. martha: i know that a lot of senators have said that they have never experienced such a heated debate on capitol hill as they are experiencing right now over this health care bill.

there is a lot of face to be saved in this also. the president has really put this on the line. as you look at the way things work in washington, what do you think in your heart of hearts we are going to end up with tier? >> i put a lot of effort and energy into this. i was an orthopedic surgeon. we have seen it from all the different sides, but we need something that is bipartisan with the best ideas, not something that is a party-line vote. i think that would be a disaster for the country. we need something that all americans can believe in. martha: i have a little bit of time left. do you see the white house being willing to drop the public auction, which is one of the biggest controversial elements here for conservatives? do you think that could happen? >> i think that the people all around the country when they talk to elected representatives

over august are going to say we do not want a government takeover of health care. we do not want the government to stand between us and our doctors. i think that is what is going to happen. the more we have bipartisan support -- we have a breakfast really looking at solutions to get costs under control. right now, that is not what i see coming out of the leadership. i thing we need to come together in a bipartisan way and improve the health care system for all americans. martha: let's hope that the breather will be very fruitful and that way in terms of bringing this to the next level of discussion for everybody. very well qualified to talk about what is going on in washington. trace: we will update you about a potential gunmen at the university of south florida. on the web site of the

university, there is a warning that a gunman may have been spotted on campus. by the bioscience building on campus. the alert has gone out to 50,000 people, including students and faculty who live in that area. we have no idea if there actually is a gunman. there are no reports of any shots fired or anybody being involved in any type of shooting there. we will get you up to speed on that. al qaeda ramping up its propaganda machine in recent months. we have seen a surge in on-line video recordings featuring young american terror recruits. we will look at what could be going on here. a guy flies off the handle in front of a judge. we will show you what happens when you cannot keep it together. two medium cappuccinos,

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trace: that was a live look outside the fox news world headquarters. i hope police responding to a domestic violence call are in a bit of hot water, accused of excessive force. if accused of tasering a man in the buttocks. trace: he said that the officers violated the use of force policy by using a taser in an inappropriate way. the police chief is standing up for his men. >> it was used after he was handcuffed. it was used in a very sensitive, private area of his

body that was accompanied by threats. >> both officers are good officers with no previous backgrounds for any type of trouble like this. trace: an attorney for the man says that he will file a lawsuit against the police department. no one is questioning the use of day taser in kentucky. he shrugs off a court officer. he was making a move toward the prosecuting attorney. another deputy drops him. the defendant -- right there. watch this. you missed it. do you see the guy on the right hand side? he was not seriously injured. the defendant's attorney warned that -- warned that he had a history of that courtroom behavior.

martha: moving on to international matters. when it comes to fighting a war on terror, we have seen and disturbing trend pop up in recent years. americans joining the fight with al qaeda and other terrorist groups. we have heard that a muslim converts from long island, new york who trained in afghanistan to carry out homicide attacks -- there's also a 27-year-old who blew himself up in somalia, killing dozens of people. all of this as we see a surge of video and audio messages that are coming in from the terrorist group. what does it mean for the security situation here at home? catherine herridge follows this very closely. she joins us with more. give us a bit of context here. do all of these things fit together in any way? >> what we have been able to surmise is that in the last few months, there have been more

attacks where americans are featuring. the name translates as the american. in this video, you can see him sitting in the trees of east africa in somalia with a group that translates as a the mujahideen youth. he is telling people that they need to give up their western lives and come to east africa to join this jihadist movement. this is one of a couple of days we have seen from this young man. based on the conversations i had, he is well known to the fbi and he is in fact an american citizen who has been in somalia for several years now. martha: this is such a disturbing development. i do not know if you could call it a trend at this point.

we have heard for so long that al qaeda was like nothing more than two indoctrinate americans who have american passports. they could get back into the country quite easily to pull off an attack here. it is that right? >> that is certainly the concern with the somalia story. we know that nearly two dozen americans have travel to somalia to join this group. we have also noticed in the past few months, a new tape. he is originally from california. he has been the mouthpiece for al qaeda when they have been addressing in western audiences. we have a new tape from him. there are several things going on. these americans are very ambitious within the movement. they can harness the technology. no. 3, they have a personal vendetta against this country. they do not seem to be very nervous about the president's approach to the muslim world.

martha: thank you very much. trace: do you want a raise? it could come back to bite us. minimum-wage going up next. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. 154 people are tracking shipments on a train. 33 are i.m.'ing on a ferry. and 1300 are secretly checking email on vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com.

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martha: all right. on this friday afternoon in the top box, there is a live look at washington. that is the department of education. the president will be speaking there. we will watch to see if anything is new words -- is newsworthy. in the middle, vice president joe biden doing a lot of international traveling lately. today, he is meeting with the iraqi prime minister. they're going to talk here in the united states. in the bottom box, a space walk going on right now. by the time we get to them, it

is usually darker. there is a lot of work going on there. the astronauts are replacing batteries outside of the international space station. i wonder what the batteries are like to run that thing. trace: they are big and heavy. martha: they are waking up to the sounds of pink floyd's "wish you were here." trace: the federal minimum wage going up to $7.25 per hour. it affects 30 states that have lower state minimum wages. supporters say that the pay hike is long overdue for the working poor. opponents say that the added cost is 0.2 per small businesses. >> that amounts to about $30 more per week and 50 -- and $1,500 more per year. it does not sound like a lot.

think about all those employers who are shelling out that much more money. some of them say that this is going to put money into the economy. the thinking is that minimum wage workers are going to get paid more, so they will spend more. a study at the federal reserve bank of chicago estimates that this increase will put an additional $5.5 billion into the economy. that is great, right? let's talk to a real person who would know. you are the owner and manager here in minneapolis. how was is going to affect you? how many employees do you have that are going to see the raise? >> it is going to a quite about $15,000 per year. >> do you lay people off? what do you do looking at what is at of you now? >> probably a little of all the above .

we might have to raise menu prices. >> we see a lot of different restaurants in this area) you are going to try as hard as you can. >> thank you very much for joining us. more increases could be coming. one of the president's campaign promises was that he wanted to raise minimum wage to $9.50 per hour by the year 2011. trace: thank you. martha: we have so many fascinating poll numbers we have been reporting since they came out i think we're going to show you -- do we have it? trace: wait for it. martha: that is a tease. it talks about whether people think that the cia should assassinate leaders of al qaeda. the question is whether or not the cia isn't -- is in the

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trace: we're back live in the newsroom. we have brand new information on three big stories. the dow is on a roll. will it stay there? let's get like to the nyse- listed >> despite the dow being down, stocks have been on a big surge. do you hear somebody singing? they are singing at the new york stock exchange.

off yesterday, the dow rose above the 9000 mark. the mood overall here on wall street is euphoric. trace: i thought you were just off key. do you have one of these? you are a recession buster for apple. >> at a time when a lot of companies are seeing a dip, the best non holiday quarter apple has ever seen, 600% increase in iphones. a steady stream in and out here at the apple store. they are willing to pay a little bit more. the only downside, ipods perhaps. a lot of us already have them. trace: we talked a lot about swine flu. it is awful down under.

15,000 cases. >> two australian companies are testing new vaccines on about four hundred volunteers. we have had early results. they will not be mass-produced until it least october. that is late for many australians. it will be just in time for your fall. the u.s. government has ordered 21 million vaccines. the death toll hit 46 today. more than 16,000 people have been diagnosed with the disease they also say there is an alarming increase in patients forced into long machines just to breathe.

trace: that is your brand new information. martha: president obama pushing hard on health care, believing it is one of the most important issues of our time in our presidency. take a look at what our polls are saying. this is an interesting take on what the perception is about all of the health-care information that is out there right now. only 12% choose health care as their number one concern. it is very interesting. health care comes in fourth. more than 50% of americans believed that michael jackson -- the economy should be at the very top of that list. the fourth issue on the priorities of people on this poll, 12% say that they care most about health care. let's bring in our panel today.

juan williams is a senior correspondent at national public radio. let me start with you, juan. i was very struck by these numbers. you see these numbers a lot during the election periods. the iraq war was up the top of the list. what a different situation we seem to be in now. help percent -- health care, only 12% said that health care was number one for them. >> they're reading the same polls that you are. that is why you saw this week the president did not open with a picture about health care. he opened with a picture about the economy, pointing out that health care costs can drag down the economy. he talked about premiums doubling over the last nine years, all that kind of thing. he wanted to tie it to the economy.

martha: he is having a hard time making that type. that is an essential part of the whole argument. the president comes out and says, the rising cost of health care is one of the major reasons that the economy is suffering. that has been a tough thing for him to establish an american minds. >> i think poll numbers like this should make the white house think twice about their insistence to try to juggle some money domestic priorities at one time when we still have an economy that is not back on its feet. it is obvious that people are concerned. we have over 15 states that have double digit unemployment numbers. they are so consistent on getting through this healthcare plan -- 70% of the people polled said that it was quick to raise their taxes. martha: uc president obama. at the moment, he is speaking at the department of education.

we will monitor those comments and let you know what is said there if we need to break out. chris, there are a couple of other interesting numbers we have here. one of them asks the question, do you think the obama administration has a clear plan for fixing the economy. 53% said no. 42% said yes. what do you make of that? why is the obama administration having a tough time convincing people that they have a handle on the economy? >> it is the most important question for us right now breadth it is the one that will control the major debate for the rest of this year. if you take all the polls and you average them together, you were looking at a 12-point loss on conference for handling the economy. does he have a plan and can he executed? the stimulus did not work in its first phase.

when we get into the fall and winter, maybe things will turn around. right now, nothing he pitches his point to work as long as people do not think that he can make it work for the economy. martha: this is always a political opportunity when they see these kinds of numbers. let's take a look at tim pawlenty. here is what he is saying about health care and the president. >> the health-care proposal is really quite a joke on a number of levels. i think he is skimming the american people. even if you believe that he is only going to tax people over $1 million, what is going to happen is that is only going to cover about 25% of the total cost of the package. the rest is going to be paid for by saving waste, fraud, and abuse. if you believe that, i have some

january to begging -- january t * for you. when you look at this, they are concerned to see this as a real opening. >> they see it as an opening because what they imagine is that if president obama is able to get through health-care reform and able to turn around the economy, it is good news for democrats going into not only 2010, but 2012. in terms of responding, it says that the american people pretty much still think that it -- that president bush and the republicans are responsible for the problems with the economy. how long does that last? these are obama's plans in place. we just heard about the stimulus not having the effect up front of the unemployment rate. most americans are disappointed that we have not seen that come down. how long do people have patience

going forward? tim pawlenty says it is all a scam. he wants to say that this is president obama's responsibility, not president bush paused. martha: who is more responsible for the current state of the economy? 16% say that president obama is responsible for the economy. 61% are blaming president bush. 61% still blaming president bush. obama has to feel happy that is buying him a little bit of time. we will be watching this closely. thank you very much to all of you. congratulations on the new book. we wish you well on that. thank you, sir. always a pleasure. thank you, gentlemen. trace: the need for speed. it is the urged that roller-

coaster fans love. one man testing of the hair raising effects of one ride. after watching this advertisement. >> i am here with the andersen family. we're about to see if the roller-coaster rocks their world. ok. we are back. let's see the results. are you ok? it is official. trace: do you notice a the toupee. a man in the air replacement business was tired of the negative publicity his product was getting. he checked out the time machine for himself. >> the typical portrayal of somebody wearing what they call it to pay -- a toupee -- the

only time you see somebody wearing here is if it is a disaster situation. martha: it is hanging on. it looks so real. from the side view, a little bit. trace: he told a theme park owners that it would not come off. he kept his arms inside the whole time. the owners admitted that the ad was not exactly as advertised. a tree farm in washington state apparently producing more than paper products. police say that a deal to the biggest bust of marijuana plants in the state history. street value, $750 million. some of them are 6 feet tall. police say that the growing operation could be connected to the drug cartel and mexico.

martha: another deadly plane crash in iran. this time, a plane skidded off the runway just nine days after a passenger plane went down, killing 168 people. why that commercial aircraft should be looked at more closely. american astronauts waking up. they are also walking out there as we speak. what people are saying about a return to the moon. whether or not most people believe we should go back. want value for their dollar? been true since the day i made my first dollar. where is that dollar? i got it out to show you... uhh... was it rather old and wrinkly? yeah, you saw it? umm fancy a crisp? geico. fifteen minutes could save you fifteen percent or more on car insurance.

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he was found guilty on all 10 counts that he faced. in the middle box, ericsson reporting 8 second quarter profit plunge of 61% due to restructuring and losses. in the bottom box, we brought you the breaking news at top of the hour. that is a live look at the campus of university of south florida. there are reports of a gunman on that campus. we have been following that story for you. they believe that he was in the bioscience center. the early reports were that there were no shots fired as of that point. very cautious, and we will continue to give you developments. trace: there is a guy who said if the cops show up, i am going

to stop shooting. two american astronauts, a little over halfway through a seven and a half hour space walk. the crew members replacing batteries on the international space station. today's space walk, a little bit longer than normal. one had to be cut short when co2 levels jumped unexpectedly. steve is live with mourn in washington, d.c. >> they are making good progress. they were replacing the batteries on solar array. they have two more to go before the process is completed. it is a very time-consuming process. they had some trouble getting some of the bolts out to move the batteries. at the same time, they are

hoping to prevent a problem that happened on wednesday when those co2 levels went higher than normal in the space suit and they had to cut the space walk short. cassidy taking his second space walk. he suffered no ill affects from the space walk. he was not in any immediate danger. nasa said that he was exerting himself a little bit too hard, so they are backing off today, and of some of the heavy lifting to prevent that same problem from happening again. trace: steve, thank you. martha: every day around this time, the white house does its briefing and robert gibbs steps in front of the podium. today, there may be some fireworks, and given what has transpired and the president making comments about the arrest of his friend, who is a harvard professor. the pressure is rising. we heard from the police today.

they say that they stand behind the sergeant and they want an apology from the president of the united states. what is with this? a hog on a hog. trace: it is like "green acres." .

trace: 7 minutes until the top of the hour. you can see the white house there. we're waiting for the daily

press briefing. robert gibbs is expected to face a bunch of questions concerning the controversy over the arrest of glass harder -- black harvard professor henry louis gates by white officer james crowley gates claiming racism. the union supporting crowley says that he did follow protocol. the briefing begins minutes from now. bill salmon also has an interesting take on this. we will bring you that in about six minutes. martha: outside asheville, n.c., duane pace is hog wild over his pig, hobo. he takes him everywhere. he joins me on the phone. how come you drive around a paid

on the back of your motorcycle? >> because i like to see him having fun. i like to play music and witnessed the people at the same time. martha: what people say? >> he is cute, that kind of thing. they wanted to make a barbecue for him and have a famous pig, but i will not do that. i will keep a pig. he is just like a son. he stays in the house, sleeps in a sleeping bag, and is like one of the family. martha: is it hard to have a pig in your house? >> no. it is like having a 3-year-old for 18 years and sometimes, though.

martha: i think he is cute. thank you very much for showing him to us, and you have fun at this summer. trace: trying to barbecue -- that is just -- breaking news at the university of south florida. word of a gun on campus was called in by somebody who was with the gunman, who said if police showed up, she would begin shooting. so now police and authorities are there, sending out a text message, and automated alert to 55,000 people.

they have the loudspeakers on, because he was near the biological science building. they're telling students to get out. we will bring you updates on that and updates on the controversy coming of cambridge, massachusetts. the president called the arrest of henry louis gates stupid. now, we will have both sides of the issue that is brewing and growing. coming up as the live desk cont.

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[captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- martha: we are going to hear more questions and answers about what went on in cambridge, massachusetts. police officers have come out in favor of the sgt. we will cover that. and of course, there is of big issue of health care reform getting action on capitol hill. trace: police in cambridge now say that an apology by the president would be a good outcome. there is the officer who arrested a prominent black scholar and friend of the president for disorderly conduct. the harvard professor is now

threatening to sue police for racial profiling. the president dove into the controversy by saying that the police acted stupidly. he said this on a national news conference. they made a good point at a news conference saying about the president admitted right up front before he said the comment that there was a bias, because he was friends with gates, and he said he did not have the facts, then proceeded to make the comment. >> when you say you do not have the facts, you will pass judgment, that is not terribly presidential. the bottom line is that obama picked the wrong cocked to slur. he probably thought, i will take the easy shot here.

this is probably racism. so he throws the police department under the bus and called him stupid. but this topic is the poster child for racial harmony. he gave mouth to mouth resuscitation to reggie lewis, and there's not a touch of racism in his being. so now the white house is in full damage control. the press secretary said that the president regrets the controversy. trace: how far does he have to walk this back? he comes before the podium -- >> if you look at what robert gibbs said, he said he wanted a

little wiggle room. this is overshadowing the health-care initiative, which is his signature policy initiative, and that is not good. martha: so the question becomes, what does he say? would this be enough? >> i think it would go a long way toward calming the situation. i do not think he ever expected it to be this big a deal. he probably thought he was reaffirming credentials with the black community. there had been chapter after his speech to the naacp yesterday that the white house was unhappy because media was not emphasizing the part of the speech where he did try to reaffirm his credentials with the african-american community, rather than the self empowerment

community. he may have been looking for a an opportunity to make the statement. he overshot the mark and it caused a much bigger firestorm than ever imagined and now he is forced into a position to say something. martha: in the beginning, he said he did not know all the facts. but in the middle of the statement, he said that the cambridge police acted stupidly arresting somebody when there was proof they were in their own home, and i think we know apart from this incident that there's history of african-americans and latinos being stopped disproportionally by law enforcement. that is a fact. so he said is apart from the incident and yet is making it a part of the discussion about the incident. >> yes.

he was accusing the department of racism. he started out with that disclaimer, but i can tell you, these presidents are always a thoroughly ready for all of this through briefing. i am sure he miscalculated as to the impact of the words he chose to use. i do not think he was weighing an off-the-cuff and went too far. i think he plans this but did not realize how large a firestorm it would cause. trace: professor gates is not doing a lot to tampa this down. he is going out in interviews as saying that the police officer had a narrative in his head that a black man was in someone's house and had broken man entered and this black man was me.

so he, as well, is not willing to let this go. >> no, but meanwhile, other issues are dropping. the house had been targeted by a burglar before for a break-in, and if you read the police report, it is damaging to the professor, because the first thing hoff out of his mask -- out of his mouth was, "what, are you hassling me because i'm a black man in america?" trace: i have not heard the audiotapes, either. those are forthcoming. martha: in the police report, gates said that the door was hard to get open. so neighbors had seen sobbing happen before? who knows. the president is missing his own deadline to get his campaign legislation approved. democrats are deeply divided on

this, and we're getting brand new stuff in from congressman ross, who says there is still no agreement. he says they have never been a more united. this is getting very heated. and the president is working to get back on track here. carl is live on capitol hill with the latest development on this. >> what has been happening is lots of talk and no agreement. earlier today, the majority leader, harry reid of nevada, went down to speak with max baucus of montana.

they are starting the bill in the senate and are not doing that well. they say it could now take until september. they went to meet with the president and explain themselves. they call that an optimistic discussion, but the president gave baucus an earful because he could not get it done on time. probably because he works with republicans and they are moving very slowly. this is a proposal with no public auction. everything else has passed in congress, two bills in the house, another in the senate. all have a option creating problems. a big stall, with energy and commerce, seven blue dog democrats. they are fiscal conservatives to worry about exploding deficits and the idea that a government option could take over a sixth of the economy.

they are opposed to an awful lot of aspects of what is being proposed in the house and have enough numbers to actually block things on the full house floor. democrats know that they can kill this, but there's an awful lot of gridlock. martha: some of you might be wondering what makes somebody a blue dog democrat and why they have so much influence over health-care decisions. molly is live in washington with the answers to a lot of those questions. hello. >> hello. yes, there are 52 blue dogs, mainly moderate and conservative democrats from a conservative district to one because they're fiscally conservative and conservative on hot-button social issues like abortion and gun rights. you see them going to the white

house for a meeting on health care. the president wanted to get them on board. they have such power now because they as a group are opposed to health care legislation as it stands, and if all or most of the 52 vote with republicans, that is enough to kill the bill in a house floor vote. they are under pressure by the president, the speaker, and democratic leadership to come to some type of agreement on health care. martha: where did blue dogs come from? >> is evocative of southern democrats calling themselves yellow dogs, meaning they would vote for a yellow dog before a republican. but the term blue dog was coined by pete karen. he said that the yellow dog had been choked blue by the left-

wing of the democratic party. hence blue dogs. martha: first pet food, then toys. china is accused of flooding the market with a substandard product. this is something everyone of us needs to hear. the tire trouble and what it might mean as you have for the weekend. if you're taking 8 extra-strength tylenol... a day on the days that you have arthritis pain, you could end up taking 4 times the number...

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are enjoying the new palm pre with its revolutionary web os. they're running multiple live applications at the same time. - ( thunder and rain ) - 3 million are using the simply everything plan. each is saving $1200 - over an at&t iphone plan. - ( cash register dings ) together that's over $3 billion. - enough to open a dunkin' donuts in space. - ( walkie-talkie sounds ) from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. trace: we're live outside fox news headquarters. the streets are busy, the driving streets are busy, and

there is a brand new trade dispute between the united states and china, this time over cheap tires, the things you drive barbara -- drive on the. william, what are we sang about cheap -- what are we saying about cheap tires? what can the president do? >> he is in a tough spot. four times, the trade commission recommended to president bush that he slapped china for flooding the markets with other products. he refused. as a candidate, obama's said he would be different, protecting workers against unfair trade. now this is his chance. the commission is saying that there needs to be a limit on these restrictions. these tires represent 25% of the u.s. market.

steelworkers say that they lost 6000 american jobs because of the tires and closed six plants. to level the playing field, the trade commission is recommending he slap on a 55 cent tax on every chinese tire. he promised the unions that he would not keep in to pressure. they are a lifeline to north korea and also the biggest buyer of u.s. debt, and we would see more of these cases if he rules in favor of the union. this is a tough case for the president, in about six weeks. trace: remember the test for you take a penny and if you can still see lincoln's head, the trend is no good? the question i have is, what in the world can we do to make sure

our tires are safe? >> it is a good point. some chinese tires were recalled years ago, and two died because of it. but the tires imported from china right now are totally safe. they meet the same specifications of u.s.-made tires in poland and venezuela. but the thing you're getting at is coming here on the side wall the tire, there's a 4 digit code. this is the weekend was made in the year it was made, three digits meaning it was made before the year 2000. why is that important question mark -- why is that important? because it is not only the tread wear, but age of the tire. investigations showed some tire retailers are selling new tires as old tires. do not be buying an old tire, because basically, it does break

down over time, and you can keep tires on vehicles for five or 10 years. age is an issue. make sure you are buying a relatively new tire, not something eight years old. that would be wrong. trace: take a look at the numbers and keep yourself safe. martha: the national debt climbs, and consumers weigh in on where it is headed. in numbers as we check in on the companies. bellweather businesses are a great way to look at this and see how things are changes. i'm robert shapiro. over a million people

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i was caught off-guard.

martha: the all clear has been received a university of southern florida. we heard about suspicion of a gunman in the be a logical science center, but now they are confirming the situation is over. trace: are you feeling pessimistic about the economy? you are not alone. brand new numbers shows consumer confidence dipped late july to 66%, down nearly five points through june. some folks believe the economic freefall is over but see little reason to believe that the stimulus will help them any time soon. that right there is a live look

at the national debt clock in new york city. check the number out. it is trillions. martha: and your personal debt, $97,616. trace: i cannot afford that. the clock was created in 1989 by a u.s. real estate developer in new york. 11 trillion. i cannot even read the rest of the numbers, but it is a lot. martha: how are real business is doing as they try to pay their bills and keep people employed. it is giving us an interesting perspective on companies. dan springer joins us from seattle.

>> coffee can be a good barometer of the economy as a whole, because it is one of the discretionary items. we're joined by tom o'keefe, founder and chairman of kelly's. we talked to you and you said sales were down in may. we know they heard at the end of 2008. what has happened since then? >> they have bounced back, a harbinger that the economy is getting better and people are getting acclimated to the fact that they have to buy their coffee. >> i know your steam has gone after showing value, advertising summer drinks for $1.59. talk about the trends. >> you have to give good value. we're giving high-quality gourmet coffee, as well, so if you give them good value, they

come back. they appreciate it. >> what about the one serving cup? >> it is one more way the customers get a way to try our coffee, so we promote that two stores, but they are trying be full range. our food and hardware sales are up as well. the worst in which sector might be over? retail will start to recover, the dow up over 9000, yes, that is a great deal. it is getting better but the worst is not over yet. >> he was able to avoid the layoffs we saw over its starbucks across the street. 3300 layoffs at starbucks. they say they are weathering the storm at his place. back to you. trace: drivers finding some relief at the gas pump. $2.47 a gallon.

a month ago, $2.67. one year ago, it was over $4. chris gutierrez is live at fuel city. prices going higher? >> yes. a family started this gasoline business back three decades ago. when we were here in may, prices were going up, and you and your dad said they would continue to climb. what is up with that? >> throughout history, prices have continued to rise to a puppy in late august. but they dropped pretty significantly.

>> just today, you raised the price by 3 cents. why is that? >> yesterday, unleaded ended up going up. this is not a one-day phenomenon. they have been going up every day. >> how does this affect your bottom line is a business owner? >> we're getting more transactions, because people are coming out more. it is not unusual. >> you can definitely see how it

is going. thank you. trace: hall was that guy? -- how old was he? i did not own a bike at that age. he had a gas station? [laughter] martha: we are keeping an eye on the robert gibbs conference. we expect it will be interesting ñ?

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tapes, and we're seeing american citizens taking a more prominent role in propaganda. these men are young and ambitious, but they are not calling shots. they are simply being used as the tools of al qaeda. trace: now to the stock market. the dow is teetering. julie is following the momentum. >> thank god it is friday. the dow up about a point now, but they are an hour from the closing bell. the dow rose above 9000 yesterday for the first time since january, and the mood here on the floor is encouraging. investors seem optimistic that a recovery could be on the horizon. trace: jill is right here in the newsroom. >> that is right.

look for more entertainment on the web from "fortune magazine." there is a devout to allow some to think -- there is a promise to allow significant on-line gaming to my space, and so will disney, possibly on a subscription basis. martha: we take you to the white house, where president obama himself is at the podium. >> there has been all sorts of controversy around the incident. i just had a conversation with sergeant jim crowley, the officer involved, and have to tell you, as i said yesterday, my impression of him was that he was an outstanding police officer and a good man, and that was confirmed in a phone conversation, and i told him that. because this has been ratcheted

up, and obviously have to help contribute, i wanted to make clear that in my choice of words, and i think i unfortunately gave an impression that i was maligning the cambridge police departments or sgt crowley specifically, and i could have calibrated those words differently, and i told that to the sergeant. i continue to believe there was an overreaction in pulling professor gates out of his home and to the station. i also continue to believe that based on what i heard, prof. gates probably overreacted, as well. my sense is that you have got to give you a good people in a

circumstance in which neither of them were able to resolve the incident in the way it should have been resolved, in the way that would have liked. the fact that it has garnered so much attention, i think, is testimony to the fact that these issues are still very sensitive your america. -- here in america. so to the extent that might tours of words did not eliminate but rather contributed to more media frenzy, i think that was unfortunate. what i would like to do is make sure everybody steps back from moment, recognizes that these are two decent people, not extrapolate too much from the fact, and as i said a press conference, be mindful of the fact that because of our history , you have a police

record on racial sensitivity, interactions between police officers and the african- american community that sometimes can be fraught with misunderstanding. my hope is that as a consequence of this event, this ends up being what is called a teachable moment, where all of us, instead of pumping up the volume, spend a little more time listing to each other and try and focus on how we can generally contribute to more

unity lord knows we need it. no one has been paying much attention to health care. i wanted to emphasize that -- one last point i would make. some would say that i should not step into this all at as president because it is a local issue. whether i were black or white, i think that me commenting on

this, and hopefully contributing to constructive, as opposed to- understandings about the issue, is part of the portfolio. at the end of the conversation, there was discussion about, certain crowley and i and professors gates having a beer here at the white house. we do not know if that is scheduled yet. [laughter] but we may put that together. he also did say that he wanted to find out if there was a way of getting the press office lawn. i informed him that i cannot get the press off of my lawn. [laughter] he pointed out that my lawn is bigger than his lawn.

but if anyone has any connections to the boston press, as well as national press, sgt crowley would be happy for you to stop trampling his grasp. all right? thank you. >> hold on, hold on. i have all the confidence in the world that whatever i say is not going to make the news today. but in my role, i am happy to answer -- morris and handed me the folder and said that the week ahead is in the front pocket. i said i had a sneaking suspicion we would get to that near the end. >> did anybody at the white house reach out to let him know that -- >> no. >> no. >> [inaudible]

>> there was a five minute phone conversation. in about a five minute conversation. i have to go back and check my notes. i think it was certain crowley's suggestion about the beer, and the president thought it was a good idea. they will work on that. they will work on that. a moment like this can be used

to teach us and be used to have a communication and dialogue that is constructive outside of the moment. >> when does the president decide to make this phone call, and what prompted the conversation? >> earlier today. i do not know the time he decided. the call happened, lasting about five minutes, about -- just recently. 2:15, 2:20.

>> do you know if he planned to speak to professor gates? >> we will see. >> he had to come back and address a press conference. what matters have you got in here at the white house, and what kind of outpouring have you gotten from the community to make this decision, and did the police organizations help to make the decision? >> i do not know what engagement the white house had yesterday with groups or individuals. i think on the correspondent charles -- chart, there are, but and concerns, but that is all we have to do with that.

>> is he thinking about possibly doing something along the lines of bill clinton, having a conversation on record? >> i think that in many ways, the question and answer and the event, i think we're having that conversation. i think the president would say these are important issues that play out in our daily lives and they should be discussed. >> it sure sounded like he made an apology to the officer. >> i think he understood that,

as he told you, his wars contributed to this being ratcheted up. i think there's a reason that the news read yet -- media is on sergeant's lawn, and he wanted to make sure that -- to let him know that that word choice was not one that he thought was probably the best choice. >> were you in the room during the call? >> i understand -- i feel comfortable with the answer i just gave. pour -- if the president does not want to characterize the conversation he is having with you all, i will now get ahead of him. >> prior to the press conference, you sit down and

rehearse answers or discuss how we will answer the question. did this, as part of the preparations, and if so, his word choice -- >> i will not get into that. i will not get into it. i hope the president thinks that this is a moment that can be used to teach us. >> [inaudible] >> i said i would check on it. i cannot say. i would quote the president

liberally, and i do not want to get into this any further. >> he said his starkly, african- americans are sensitive to these issues. is he referring to mr. gates in his response, or to the president's of response to the issue and the question? >> i and he is talking about richard large. i do not think -- i know that statement is not speaking about an individual situation. he is talking about the reason he came to work on an issue like this was because of historical tension. but that is not an individual thing. >> he could have got the question. he jumped into it. i wonder if he is saying that that is because of the

sensitivity? >> i think he was saying that he has heard those that said maybe because it was a local issue, it was something he should have steered around, and i think was clear on that. >> two questions. there are issues about indian americans, doctors and physicians in the country. but also, six months in office for most of the issue. the question is that as far as small business are concerned, some are concerned about how they can stay for their influence, they want to hear from the president about it. >> let me address health-care and small business. obviously this is a topic the

president has spent a bit of time on throughout the week in meetings with -- in town hall meetings, in meetings with the blue dogs, in meetings here today. obviously, millions of businesses struggle with the high cost, the skyrocketing cost of health insurance. that it's harder every day to provide for their employees. trace: that is robert gibbs at the white house press briefing. you are watching a significant development, because before it begins took the podium, obama came out, talking about the comment he made about the rest of harvard professor henry louis gates, calling the address -- the arrest stupid. he also came out, saying that he wished he could recalibrate the comment and that he regrets that it launched a frenzy today in the media. he also called officer crowley

and talked with him for five minutes, inviting him to the white house where is professor gates for a beer. clearly, this is a major development. martha: we were saying that we anticipated robert gibbs would get heated questions about the professor dates and crowley matter, and here we have the president in front of the program himself. so clearly this was a high party situation. i want to bring in juan williams, a contributor and an author of several books, including "eyes on the prize," a book about the civil rights movement. clearly, the developments of this are interesting to all of us as americans, precisely because this has become a big topic due to the nature of the debate. how did the president do?

>> he understands he has made a big mistake, and you cannot get away from the fact it he is the first african-american president, and a man who does not like to speak about race, and he thought this was just a small incident and the police had overreacted. he had not read the report, so he used that pretoria of word that the police department had acted stupidly, setting off fireworks. you heard the press corps. was it an apology? we are right at the edge of the apology. president obama realizes he has gone way over the line in terms of the race discussion but also diverted attention away from his health care agenda, and he

is aggressively trying to walk it back. martha: one of the reporters was getting at this a minute ago. he said what is the discussion, what is the preparation on this particular issue before the president walked out, and i think what the reporter was getting at was, was this a gut reaction from president obama or was it a planned statement about all of this? what do you think? >> i do not know. my sense is that he immediately made a critical mistake in which he started talking about racial profiling, something he had been involved with in the illinois legislature, and that has nothing to do with what happened here. it does suggest somehow that he had thought this through and maybe new the question was coming and had somewhat prepared. this is an opportunity to talk about racial profiling or tension between blacks and police, and that suggested to me

that there was some forethought, that it was not something spontaneous. i think if it had been spontaneous he might have been more limited in his remarks. martha: and he clearly had made a connection in his own mind about the two things to have the discussion. i just want to go to some of his words and then bring in the rest of the panel. the president said that there was an overreaction, pulling him out of his house. people want to keep the controversy going will say that the policeman turned around and started to walk down the court and professor dates followed him, and that is when the policeman claimed that the conduct kicked in. as he left an opening for discussion? >> he sure is. i think there will be more to

follow. the policeman asked him to calm down and pulled out handcuffs to make it clear that this was the time to stop. the arrest was nothing that happened in terms of his identification. what you heard was that obama is not dealing with the moment and somehow he suggested gates was pulled out of the house, but gates was not pulled out of the house. martha: stay with us. let me bring in the senior city desk editor for the "boston herald sabot the president is

clearly trying to diffuse the situation. it is a very strong voice coming from the police department asking for an apology. will they be satisfied with this? >> i think they will be. they are also asking bob patrick, governor of massachusetts, to do the same. so it is a surprising development that has come one after another. this is a big one. martha: we have not heard from professor date on this yet. so now we have president obama and sgt crowley having what sound like a friendly conversation, with joking involved, president obama said he is a decent man, to give you a decent man. i think a lot of americans would feel very comfortable with the fact this overture was made.

do you see a beer at the white house? >> i hope he says he does not drink. but police officers have a difficult job, under stressful circumstances. at the same time, people do not expect to be arrested in their own homes. any times this happens, there is misunderstanding involved. it is important for both sides to take a deep breath and say they can resolve it. at the end of the day, it creates a dialogue, and anything that gets us more sensitive to each other, alternately, it is beneficial. martha: he said it is a teachable moment. you had written some much about this president as the black american president and the importance of what it means.

it is almost ironic that this controversy has developed that puts this president in the position to have this discussion on a national level. >> it is not intended, and i do not think people would understand the reaction. he was asked about this by an abc correspondent and he said he did not understand the reaction. professor gates had his identification, he was in his house -- they are talking about things that did not happen, not abusive language, not disorderly conduct. he said, oh, the professor walks with a cane. anyone can engage in a disorderly conduct. obama has put himself in the position of taking sides on a difficult racial issue.

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