om the scooter store, medicare and my insurance covered it all. end tag: call the number on your screen for your free information. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- jane: your health care. are there getting closer to a compromise? what will look like? jon: getting an up close and personal look at our troops. what they have accomplished on the ground. jane: 13 astronauts are saying their goodbyes this hour. we were you the pictures. we begin this hour with a homegrown terror plot but

authorities say they have busted wide open. seven men are under arrest and north carolina, the group made up almost all american citizens. a series of terror attacks planned overseas. daniel patrick boyd, a father, was the leader of the group. he led a quiet life near rolla as a building contractor. but he also had terror ties dating back to the 1980's. what do we know in terms of what the suspects are being charged with this morning? >> seven suspects, including boyd and his sons, 20-year-old zachariah and 22-year-old dillon, appeared in court yesterday on a federal indictment saying they are charged with material support to terrorists and conspiracy to murder and maim a broad.

also charges relating to the stockpiling of weapons. jane: they have been training for jihad as recently as last month. >> according to this 14-page indictment, the ringleader and his sons were practicing military tactics in castle county, n.c., on the border. this is as recently as last month. jane: daniel boyd is being described as a mild-mannered guy. his background is fascinating. he had a run and with law enforcement and pakistan in the early 1980 prospered what we know about that? >> he and his brother were there in the early-90's, accused of robbing a bank. they became the first foreigners accused in court under islamic law, sentenced to have a hand and foot cut off.

the sentence was later overturned. bill: jon: getting set to vote on the nomination of sotomayor very shortly. gregg: it is a foregone conclusion. she will get the approval of the judiciary committee by a vote that we estimate at 13-6. there are seven republicans on the committee, and there is john corning, one republican. he will vote no. every single republican will vote no except for lindsay gramm, so that means a 12-7 disparity. it goes to the floor, where it is expected to be confirmed.

stay tuned for that. jane: also on capitol hill, major developments in the race to get health care reform in this country. her right now, the president is gearing up for another town hall meeting, this one sponsored by aarp, and it comes when democratic leaders are trying to get the blue dog caucus on board. stanley hoyer admitted that while there is plenty of time to get it passed, it will not happen this week before the house recesses for the break. on the finance side, james rosen is positions there. inside the senate finance committee they are kicking around interesting ideas. what are we learning? >> by all accounts, the health- care package gets sense to the

desk for signature, costing one trillion dollars over 10 years. by all projections, they have millions to make up. one idea comes from john kerry, the democrat from massachusetts, who proposes a plan by which insurance companies may face another tax to get away from the deal other democrats are proposing, the tax on benefits and by private employers. one agreement democrats have reached is that there should be no mandate for private and lawyers to pay health insurance, but at the same time, no private employers should receive a free ride. they should have to kick in something if employers take part in a government subsidy like medicare. jane: so much talk about the august recess. what we know about what they expect to see before leaving? it sounds like they will not have a plan.

>> senate democrats say they will not make it until they put forward this final package before the over august recess. on the house side, we're getting mixed signals from the leadership, most recently from nancy pelosi, who seems to indicate that they can meet the goal, but she added one qualifier. >> we need to sleep -- see the direction that the senate is going. so we can do as much work in advance of september so when we come back, we're a good way down the road. we are on schedule to do it now or whenever, but a lot depends on when the commerce committee is ready. >> do it now, she said, or whenever.

most indications from both chambers said they will not have final markups by the weekend. gregg: here is the dow jones industrial average, down 42 points, perhaps due to a drop in consumer confidence. jenna has a cover for us. >> despite all the recovery talks, consumers are not feeling that way, at least according to this survey, which looks at the short term and long term, asking one specific question about the job market and income growth over the next six months, how you feel about it. it looks like those who into the survey are not feeling positive. in fact, they feel worse than they did in june. so we're actually feeling worse about the economy. believe it or not it, if you're

not feeling confident about the economy during the holiday season, that could be reflected in retail sales, making investors on wall street very nervous. jane: they have spent the last week and half together in space and now it is time for two teams of astronauts to say goodbye, as they seal the hatches between shuttle endeavor and the international space station. seven astronauts will prepare for a landing friday. among those headed home is a japanese astronaut. " we will continue to bring you pictures as we get them. gregg: defense secretary robert gates making a surprised -- surprise visit to iraq, meeting with troops and leaders there. secretary gates calls the situation "amazingly different"

from his first visit in 2006. right now he is in baghdad, visiting a base. we are streaming live from nearby. why is the secretary visiting this base? >> yes, he was here a couple of hours ago. this is an important area with a lot of smuggling around the border costs, but the u.s. and iraqi military also have a strong relationship, and they are following the agreement of june 30, getting ready to implement and improved, meaning they can move on to end a system is sent by the u.s. military here. so gates came here, saying he was encouraged by what he had to see, and we have been travelling

the last few days, seeing a joint military patrols doing very well. gregg: what other issues is gates likely to address? i know there is a deep divide between iraqis and kurds. is he going to weigh in on that? >> yes. the meeting has an impact with the government and it will be focused on increasing friction. a draft constitution is out suggesting they want to control three areas that the arabs wish to be part of greater iraq.

jane: live pictures from reno, nevada. the convention business is already suffering. take a look at this. and the resort, empty bars. the black jack resort claims it is also getting blacklisted. i guess it is 8:11 a.m., so not too many people are going to the bar.

jane: a man in michigan arrested for animal cruelty after more than 250 dead dogs were found inside his home, some inside freezers in his home. animal control and fire investigators raided his house. neighbors flooded the local animal shelter with donations. police describe this is a sad case, saying that the homeowner is disoriented and does not know what is going on. he is now undergoing a psychological evaluation. gregg: nv's economy is down on its luck, feeling a heat from the record home foreclosures, rising unemployment. now there are concerns that the land of black jack is getting

blacklisted by the federal government. what is up with that? >> the official policy is that there's no blacklist, but government departments are staying away from certain vacation destinations to avoid the appearance of government bureaucrats party in on the tax paradigm. emails have surfaced in which federal employees admit they will be scrutinized if they pull their convention out at a posh resort like the grand seer or a similar properties in las vegas, even though they have some of the best room rates in the entire country. tourism officials say they are losing hundreds of millions of dollars because of this defacto blacklist, which appears to

include orlando and miami. gregg: it does look pretty empty behind you. what are nevada and florida doing about this? >> they want to bring their conventions back to las vegas and reno. i can tell you the nevada governor, tim gibbons, is outraged, and wants obama to make a public statement. in florida, bill nelson pushes for legislation prohibiting federal agencies from blacklisted certain vacation destinations simply because they are popular and fun places to go. the official policy from the white house is a letter to senator reid from rahm emanuel saying that there is no

blacklist and decisions should be based solely on a cost- benefit analysis rather than on applications reputation. i can tell you that a number of resorts in florida and nevada are waiting to see if this changes and conventions business comes back to florida. even in reno, no one is willing to take that up just yet. gregg: it looks beautiful there. jane: 8:17 a.m.. why not. this woman makes a mortgage apple cake. it started out small, but wait until you hear what happens to her. wwwwis what i need

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gregg: the dow jones industrial average continues to decline this morning, down 64 points. meanwhile, we're seeing more signs that the real-estate market is turning around. jenna as reporting from fox business. >> when we talk about recovery, it is like making a u-turn. we saw the first improvement in prices in three years. that is a positive sign that things are getting less bad.

prices are still down overall about 17% year-over-year. some things investors are concerned about -- but looking at the silver lining, mortgage rates, although historically low, trend higher. the question is, will that discourage home buyers? that consumer confidence we just talked about was a reflection on whether or not you wanted to buy a home in the next six months, and a lot of respondents said they were not interested and it was the lowest level since 1982. but necessarily a lot of momentum in the market, forcing a higher. one thing i want to mention before we move on is that on capitol hill today, administration officials are meeting with major lenders and talking about mortgage modification, policies that are used to help modify your mortgage and keep you in your home. so far, administration officials

are saying this is now with it would like to see. that will halt long term. gregg: if you want a mimosa, fly to reno. >> that might be what the market needs. jane: did you hear about in the logan, always with us here a couple weeks ago? she was out of where -- work, but she knew how to bake, and she asked friends to buy takes to help avoid foreclosure. she is a word about foreclosure anymore. she is trying to keep up with orders. this is the mortgage apple cake,

and it isn't going to knock your socks off. -- is going to. he said do not 600 orders? >> just about. about 600 calls. about that many orders. people took calls from all over the united states and i had a difficult time. i knew i would not able to get them to everyone, so a judge can then, -- josh came in and helped redistribute them. >> i saw the story in the newspaper, and it fit in with the mission of our company, to give back. i said, you know what, not only is this a great way to do, this is a the lists escape -- a

delicious cake. we have possibility's here and we are going to start baking cakes were angela. it is a great story. >> it is a great story. but how do you get takes to people all over the united states? a date to 45 takes this weekend. very little, but we're trying to

get takes to everybody. some people are wanting cake sooner than we can get them. i'm going to bake, and we will get those tapes to you as soon as we come in. -- takes -- we will get a cake to everyone who ordered one. >> we are in top step to help angela. we want to make restoring a great story. jane: he owns a baking co., and they have done a lot of work overseas for troops. angela logan, we will put all of your information on it.

gregg: somebody get me a fork. sonya sotomayor will be approved. we estimate 13-6 in her favor

jane: of the battle over health care. yes, it is still a battle. race on for a bipartisan compromise. why six senators could make a difference. gregg: ieds.

what is the military doing to protect our soldiers. jane: new reports on what michael jackson's doctor gave him before he died. gregg: and eight suspects in the north carolina terror group that was apprehended is on the lam, and they are still seeking to locate him. federal prosecutors say one member seeks to wage it had. -- jihad. apparently they were together with those four on the screen. jane: update us on what we are

expecting to hear about confirmation from both sides of the aisle? >> all eyes were on senator graham, a republican who will cross party lines for the nominee. he says elections have consequences and he wants to defer to the president prospekt. he says he has become convinced that she is qualified. but he says he does not to it without reservations. here's what he had to separate

-- to say. >> they were just on nerving. he will be the only republican on the committee to go through this committee. jane: its of the bill most watched two different hearings. republicans continue to talk about the concerns they have for the potential for judicial activism. democrats, including senator dianne feinstein are saying that they found no examples of anything inappropriate and that is why they will vote yes. >> she has been an impressive judge and lawyer, and i will vote for her with amazing pride.

jane: how close are we to a vote at this time? we will take you live when it happens? >> early 20 or 30 minutes. it should be just so long before we wrap up the boat and go to the full senate. it should be over and she will go shortly to the highest court in the land. gregg: reports say that michael jackson probably died from a powerful anesthetic administered by his doctor. he repeatedly used it to sleep, and the drug was administered to

him shortly after midnight on the day he died and it stopped his heart. the attorney would not comment on the report. he said on the past that the doctor did not prescribe or administer anything that should have killed michael jackson, but of course, he is the attorney. jane: they are searching for a missing boy. they think he may have been heading to a friend's party, and the father is pleading for the son's safe return. take a listen. police have interviewed the void's parents and talked to other authorities, they drained and local pond. fires are being passed from house to house and look for that

little boy. gregg: harris faulkner has an update from our breaking news desk on the murder of dr. george tiller. >> yes, he was gunned down while he was an usher in wichita, kansas. right now what i'm watching is the hearing for the suspect suspected to show up today and make a plea. luminary hearing for the kansas city man just and charged with gunning down tiller. on the stand now is gary hefner. hefner actually witnessed the shooter, and with a gun, he saw the killer put the gun to the head of the doctor and pulled the trigger. we're waiting for the plea in

the case. as it happens, we will bring it to you right here on happening now. jane: house democrats are working hard to get the fiscally conservative blue dogs on board. on the senate side, they're working very hard at building bipartisan support. senator charles grassley and he joins us now. thank you for being here. before we get to health care, i want to ask you, we're waiting for the vote on the sotomayor nomination to the supreme court. it looks like she will pass. you will vote no. why? >> i see her as an activist who will legislate from the bench. that is the job of the legislative branch.

judges have full-time lifetime appointments, and if they legislate, there's no way of getting rid of them. consequently, they are supposed to be very limited to looking at the four corners of the law and making decisions to interpret a lot as opposed to making it, and i sense that she is very much a judicial activist, and that is why i will vote no. jane: we expect a vote around the top of the hour. now to health care. all eyes are on u.s. and five other senators on the finance committee as to try and hammer out some sort of bipartisan deal. can you describe to me at this time how close your? >> we probably have five or six not-easy items. but bush -- we have a big item out on some funding from the standpoint of counting some

places where money is wasted, as well as within health care, some areas to raise money. that is what is holding it up. hopefully we have an agreement for before we go home, but if we do not get it done, it is not the worst thing in the world. we're talking about it, and it is a big thing. if this does not get out of committee and simmers over the next month, and we have to be able to reflect not only what we're doing but on what the

government can have more decision making and what speaker policy and hurt people are working on is going to be entirely partisan situation. we will have people looking at that, increasing government operations in health care. in the bipartisan bill, you get a more relaxed approach. jane: you have said this is such as important issue, you should get 80 votes. it should be that much for compromise. is that a pipe dream at this time? >> 80 might be, but it is not wrong to think about somewhere between 70 and 80. i want to make clear to you and anyone else concerned, bipartisanship from my standpoint is not three republicans.

58 democrats can get 61 votes. i told the chairman and your people that i'm not going to be a part of that. when you restructure one sixth of the economy, it will be done on a consensus basis. huge job of trying to hammer out that bipartisan agreement. thank you for your time. gregg: training troops about the deadly dangers of improvised explosives. how to defeat them. chris gutierrez is a visiting texas at a military installation. >> ied's continue to be the leading cause of death for soldiers in iraq and afghanistan. air force members are being told to recognize and respond to them. we will have much more coming

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>> you can see that members of the air force are down there. i will bring back sergeants were asked to talk about it. what are they looking at? >> the main purpose of this exercise is to have systems like this in iraq and afghanistan. what is interesting is the guard rails -- they actually hide those explosives, and they can detonate those with a garage door opener or cellular phone devices. they're getting closer. we know there is an explosive hidden here, and if we time this correctly, we can see this live. he said they are moving now, so walk me through that.

>> the first truck is the least begun truck. on the top, there is a turret. right now what he is doing is looking for an indicator. we can put rocks around, so it is up to him to do his best, and everybody has to do their part. he has given that they are on the x. when he is turned around, there is an area.

>> they're actually backing up there with their hazard lights on. that is great, in terms of what these guys are doing in terms of training, because these men and women are going to iraq and they will face these similar situations live. they saw the detonation. >> right there, the first truck initiative the device and got hit. now we have to react to that. first by finding out who is doing it right now the communications inside the truck's, and at that time we will go ahead and to ensure that whenever he hears inside the truck, communications, they will try and respond to that. >> so they move forward, and there's a plan in place.

>> real quickly, tell me, how real is this stimulation -- simulation? >> it gets pretty real. the only difference is we cannot create the boom of fact, the shrapnel effect, and that is really because begin not want to hurt anyone. we just want to give them a visual effect. >> back to dallas -- back to you. gregg: a surprise visit by the secretary of defense to iraq, and just a moment from now, we will talk to the former u.n. ambassador about whether things are looking better. are you receiving a payout from a legal settlement

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gregg: today, robert gates flew into iraq to visit the u.s. command, this need -- and he says that the security situation has drastically improved since his first visit in 2006. john bolton, ambassador to the un and its fox news contributor, joins us here. good to have you. the chairman of the joint chiefs was in iraq not long ago anti directly told the iraqi leaders that they have to solve their problems, that america cannot solve their problems. gates is over there, saying he is encouraged by what he has seen. do you think that realistic or overly optimistic? >> it is much better than his last trip to the region, and militarily, the iraqi government is in a solid position because of the work and changes they

made. i and the difficulty now is just largely internal politics half. gregg: can be divided between the arabs and kurds be bridged? >> they are playing their cards close to their vests and they will see how the sunni and shiite along. they're financially autonomous and do not need help from the government. but the split is real, it has not diminished, and it is a difficult issue. gregg: i do not get it. we of special envoy is in iran, afghanistan, pakistan, arab- israeli affairs, as you know. why not iraq? we have spilled precious american blood in that country and spent a trillion dollars. don't we need an envoy? >> i do not like the idea, but

when you are in an administration, the idea is to get troops out of iraq and downplay the issue and not give it prominence. i think that is a mistake, but that is what he said he would do in the campaign. gregg: we will not be there in 18 months. will they be ready? >> is an open question. not because of a lack of equipment. i think the internal political tensions remain. gregg: as many as 96 fired jets? we should give it to them, the f-16s. it is much better for the united

states to sell those planes and russia or china or sweden. thank you very much for being with us. good to have you in person. jane: now to arizona, where a homeowner turned into a super hero when he found somebody going through his dvd collection. he tackled the suspected robber with one hand. he called 911 with the other hand. take a listen to the call.

jane: he said that the suspect told him about other robbers upstairs. they got away, making off with about $11,000 in electronics. police are still searching for those bad guys. gregg: new information coming in on a home grown terror group. an amazing story. one suspect is still at large. the ringleader is described as a mild-mannered father of living in a subdivision. what do we know?

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jane: they have just voted on judge sotomayor to be a nominee. hurt nomination goes on the way now to a full senate vote. she would be the first hispanic justice. gregg: looks like every member on the republican side voted against her, but it is a lopsided committee. 15-6, we believe, was the vote to approve her. now it goes to the full senate. 13-6, we have confirmed. goes to the full senate to

mobile version is expected to have full confirmation. jane: patrick leahy called her a restrained, fair, and impartial judge who has not favor one group of people over another. jeff sessions, the top republican, said some of her speeches revealed police conflicting with the idea of blind justice and fidelity to the law, so he voted against her. ec crust -- chuck grassley there on the right, and he felt the same way as senator sessions. gregg: judicial activism is supposed to be the venue and form of this particular body, the legislature. he said that he fears that given her past record and speeches, she legislates.

if so does. >> it was party lines, other than lindsay graham. he is taking cheap because he decided to vote in favor of the judge. he explained that today saying, yes, i had reservations, also. a lot of questions were not answered to my liking. she is not someone i chose, but i am choosing to vote for her. he continued to talk about elections and some glaring, absolutely insurmountable issue. he said that it would have been e.d. -- easy to stay with my party, but he would not do that. he was the only one to break away today, but all 19 members had a chance to talk and had strong statements for and against sotomayor.

now it goes to the full senate and a number of republicans have indicated that they would vote yes for her. absent some amazing revelation, she will be officially confirmed by the full senate. jane: her nomination has just passed the judiciary committee and is now going on to the full senate. gregg: lots of action on health- care reform. key members holding closed-door meetings, with members try to get the conservative blue dog caucus on board with their proposal. there's still a lot of ground to cover, but some lawmakers remain optimistic. >> is a good sign. there are differences across the caucasus, and this is a complicated bill.

gregg: the president is holding a town hall meeting, talking about health-care reform with the seniors' lobby, the aarp. we are here with more at the white house. what should you expect with this town hall meeting? >> the president will make remarks about what health care reform means to seniors. we expect there will be 50 or so retired people available to listen to his remarks ahoy and ask a question. we also expect as many as 100,000 members on the phone. there may be streaming on the internet, as well. basically, this is an opportunity to come out and make the pitch directly to the american people, in this case, older americans who may be worried about what health care reform means to them, whether it will affect their service. they tend to use their benefits and see doctors more often, so i

wonder what is going to happen to them. gregg: the bully pulpit of the presidency is powerful, and this reform campaign by the president has got out some time. will it continue? >> yes, it will. robert gibbs expects it will continue so the president has a sign. we know he is reaching out to seniors and older americans. tomorrow, and he hits the road again, making a stop in virginia. we expect the contain will continue in the white house, with the president trying to put pressure not only on members of congress but to appeal directly to the american public for health care reform. gregg: there have been colonists and opinion articles arguing that senior losers will be big in health care.

>> most people think that the aarp does not have more of a big government agenda, perhaps more spending, so it is believed that their overall support of of what the president is going to do. some objecting say that they do not represent all seniors adequately, doing too much politics. but we do expect a relatively friendly audience. jane: the national institutes of health is beginning clinical trials on two flu vaccines for swine flu. it is expected to be back.

we are in decatur, georgia. this is one of eight sites selected for the trial. >> they are looking to see if the scenes are eight or affective, but they are trying to determine the proper dosage. the last outbreak, they were never exposed. so they are having a lot of thoughts that they may require not one but two of doses. jane: what if there is not enough vaccine? >> there are five manufacturers working on various vaccines, said they hope they do not run into the same shortages. nevertheless, the advisor report is meeting tomorrow to

come up with recommendations on who gets first priority. the first party would be health care workers -- you want them to be healthy in the event of an outbreak. but another is pregnant women, proportionally affected when this disease was discovered in the spring outbreak. about 6% of fatalities from swine flu involved pregnant women. even though they comprised only 1% of the u.s. population. jane: has a hit other countries? >> it has, indeed. particularly in the southern hemisphere faulk. in australia, reports of transmission rates are pretty high. if there's any good news in this bill, is that the virus has not shown any signs of mutating into a more dangerous form, as some researchers fear.

nevertheless, here they want to be prepared. gregg: a boat carrying haitian migrants capsizing and sinking in the caribbean. brand new video tapes. 113 survivors stranded on a pair of wreaths. two bodies have been recovered. 85 people are still missing. the boat struck a reef near the turks and caicos while running from police. new information driving home the dangers of texting behind the wheel of your automobile. a new study finds texting while driving increases the risk of an accident by 23%. that is far greater than previous estimates. eric is live in new york with more. >> have you ever tested or

driven in a car? it can be much more deadly than thought. a new study out there find an alarming rate when people text behind the wheel, 23 times higher than normal driving. the study put the video cameras in trucks and found drivers spend there. five seconds at the 5 miles an hour. drivers do not even look at the time. they have received operating text during the calls, and most people think it is dangerous but do it every way anyway. 90% of drivers realize that texting or emailing on the road is a safety threat, and almost a quarter try to get away with it anyway. there are a stunning statistics. a cellphone while driving race

is the risk of the crash by nearly six times. just reaching for an electronic device as you drive, almost seven times. actually texting while driving spot, more than 23 times. majority around the country do not ban texting while driving. only 14 states do. virginia tech researchers say that it should be against the law for all drivers and even think that the headsets are not even safe, because there are still distractions. transportation department are concerned about this issue of distracted driving and will take a hard look at the findings. the bottom line is that they say do not drive and taxed at the same time because you could kill yourself or somebody else. gregg: it is worse than drug driving. so is drunk driving his band, so

too should texting. >> yes. we could have the beginning of a movement come here. jane: breaking news in the michael jackson that investigation. officials are now raiding a home of his doctor. also, you find out that authorities say you are living amongst terrorist in your neighborhood? it happened in north carolina. jane: another suspect. how big a threat? ?7 i was in the grocery store when i had a heart attack.

my daughter was with me. i took a bayer aspirin out of my purse and chewed it. my doctor said the bayer aspirin saved my life. please talk to your doctor about aspirin and your heart. i'm going to be grandma for a long time.

gregg: breaking news in the michael jackson case. tell us about it. >> a lot more going on. i want to get to it. live pictures outside the home of dr. conrad murray, who lives

in a country club placed. he was with michael jackson the night and day that he died. they have issued a warrant with police working together to execute a police warned at the home of dr. conrad. last week they raided his office in houston, texas, with the lapd joining bhp, the fbi and the dea on that property. now they have moved to its residents. the search warrant is looking for evidence of manslaughter against michael jackson to show

that dr. conrad murray might have committed that offense. he is at the center of the investigation looking into the death of superstar michael jackson, who died june 25 from apparent drug overdose. according to reports about the autopsy, we do not know what drugs were involved, but there has been talk of an intravenous drug that he reportedly had in his system that may have killed him. even more breaking news. this is the house -- all of these agents right there, you can see the guy in the yellow shirt. they are lit during the long as they go into the home of michael jackson's personal doctor, the

doctor with him when he died who could be heard in the background and the nine and one called shopping back and forth, performing what we now know is cpr. gregg: what took one month and two days to look into this column is mystifying to me, not to mention the fact that they raided the texas clinic a week ago, which probably put the doctor on notice to get rid of any other incriminating evidence. i am just puzzled at the conduct of law enforcement. we've got to take a break. i know you will follow this. if we don't act, medical bills will wipe out their savings. if we don't act,

she'll be denied coverage because of a pre-existing condition. and he won't get the chemotherapy he needs. if we don't act, health care costs will rise 70%. and he'll have to cut benefits for his employees. but we can act. the president and congress have a plan to lower your costs and stop denials for pre-existing conditions. it's time to act.

jane: fed say they are looking for a suspect in the terror cell based in north carolina. seven men have been arrested in a plot to wage holy war, all but one of them american citizens. the ringleader is daniel patrick boyd, a mild-mannered father running a construction business. it is believed he recruited his own son to take part. we have with us a former director of counter-terrorism at the security council. he is described as a gentleman. and neighbors said that if he is the terrorist, he is the nicest terrorist they have ever met. pretty incredible. >> it is, and it is a threat we have faced since before 9/11, but we're just taking it seriously now, the threat of neighbors or citizens attacking

us here or other places. a home don't fret, and israel. -- a homegrown threat that israel. -- is real. it looks like in this instance they would not attack the united states but they are planning on recruiting people there. we have to note that if someone is willing to get that much, i would not feel comfortable that they did not attack the u.s.. there has been a history of citizens going overseas to wage terrorist activity. jane: there is a question every time this comes up. were they about to do something, were just talking? >> in general, the question is a farce, and we make too much of it. we look at plots and say it was not something to be concerned about because they were inefficient or did not have weapons yet. but i think that that is the wrong with about it.

it is not difficult to prepare and acquit somebody to commit terrorist acts here or abroad. the plot was far along and they did talk about it, and it is something that should be stopped. jane: were they topped off to weapons, or was it communication intercepted? >> my guess is that this person was probably on their radar screen for a number of years, and perhaps they were collecting on him for awhile. ultimately, the weapons gave them the legal right to arrest him, but i think it probably were looking for him for quite a while. jane: is there any way the neighbors could have known? they talk to us about, "if you see something, say something." >> that is a brilliant success in new york that has worked in the city, but in general, yes, neighbors need to pay attention. but we are not going to turn

ourselves into a society of people looking over each other's shoulders. that is not the american way. we need to have police officers in the country directed and equipped and trained to look for terrorist activity like this, and that is a big deal. the fbi has only 8000 or 10 dozen officers in this country and the cia some no focus on the united states. yet there is a large ingrown threat for terror in this country. who is left to present -- prevent that? the only answer is police department's efforts in the towns. they need to prevent terrorism and be trained for it. that is what is happening in new york and los angeles, but much too slowly. jane: thank you for your time. hobbs gregg: president obama hopes congress can pass health care reform before the august

recess but congressional leaders are saying there is doubt that they will get it done before the deadline. a lot of options were being considered, including whether a government-run plan should be included or excluded. joining us now is former senior communications adviser to senator john kerry and former bush-cheney spokesperson. olympia snowe and max baucus, two principal players, a republican and democrat, met this morning to figure out a way to eliminate a government run program. since that is a major component of what president obama has been asking for all along, might he in the and have to accept a very watered-down version of health care reform? >> yes. he might, because it has to pass congress. i think what you see is that the house is delaying its vote for it because they do not want to be in a place where they make members of the vote to raise

taxes if there will not be a comparable ticker in it. so they are meeting without a public plan and they're talking about not having a mandate in it. i think this is a crucial week to learn. gregg: the government would have an ability to charge lower premiums. wouldn't that give the government an incredibly dominant common competitive advantage, driving a private insurers? >> and that is what scared at of patients that are satisfied with their care. , when they hear government-run plant, they hear rationing, writing down certain procedures and disease management tools that they have at their disposal.

competition and choice is at a heart of be innovative ability of the health-care system, making our health-care system one of the best in the world. when it comes down to it, they want affordable health care. i think they are rightfully doubtful that the government can provide that service. gregg: if i am an american citizen and suddenly looking at new regulations, i have to hire people to do it for me, they're heavy fines and premiums -- it will be easier for me and cheaper to simply drop all of my employees from the plan and pay the proposed payroll tax. so when the president says if you like americans your employer plan, you get to keep it -- it is not true. >> it is true if you have it already, but you are right. particularly the smallest businesses, people with less

than nine employees, do not have insurance at all. that is why you do not have a political pressure to change the system. gregg: i am saying that current employers could decide that it could be cheaper to pay the payroll tax to pay health insurance, so according to a politically neutral group, 83 million americans will lose employer-provided health insurance. >> that is not likely. we will not take away health insurance from those who already have it. it is more competitive. gregg: terry, conrad is proposing this -- instead of a government plan, how about a nonprofit health insurance cooperatives of that to provide collective coverage to people, so you avoid the government monopoly in writing up private insurance.

>> is an idea that has been kicked around for a long time. it is still unclear how it works, what kind of bells and whistles and regulations he would put on at four people want to participate. ultimately, we need to focus this on people who do not have health insurance are underinsured. this is it, not turning the world upside down for the sake of finding some way to get the government involved in taking over health care in this country. jane: the government and i'm stimulus funds to police departments in several major cities -- they are denying stimulus funds to police departments in several cities. speaking of federal authorities, right now they are searching but lost his home of michael jackson's personal doctor -- the loss vegas home of his doctor. he has been cooperating at this investigation but at this point is not name the suspect. medicare.

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jane: how authorities say he gave jackson what turned out to be a powerful fatal dose of a sedative. gregg: should it commercials for sexual drugs be airing at a time when kids watch television? we will talk to a congressperson trying to stop them. jane: would you want to own jimmy hendrix first recording contract? how about a jumpsuit from elvis? the big rock and roll option -- auction. we will tell you what is on the block. gregg: police forces and for america's cities are not getting the stimulus money that they say they need to prevent layoffs.

we're talking about seattle, houston, and pittsburgh, cut off from $1 billion in funds. why in the world is that happening? rep. knows. why were the city's denied? >> that the government said there was only enough money for 1000 out of 7000 cities, so they were left with empty hands. based choses cities with serious budget problems and high crime rates. seattle, for example, did not meet criteria. it is up to the cities to cover officer salaries after this is over. gregg: i am biased because i worked in manhattan. new york city has been hit repeatedly by terror attacks. doesn't that seem obvious? >> and is considered the no. 1 terrorist target, but crimes are down 12% over the last year and

nearly 14% of the last two years. so in essence, the nypd is being shortchanged, at least according to the mayor, who calls it disappointing and backwards. raymond kelly said that after two successful terror attacks the heart of the financial center there should be substantial and continual federal support for the nypd and counter-terrorism missions, and we should not be penalized for succeeding on both counts. gregg: so who is doing it? >> delaware is getting $5 million. kalamazoo michigan, the city of philadelphia, scene of seven homicides over the last weekend, is getting $11 million, enough to create or keep 50 jobs. for every town celebrating the

influx of cash, there are more. about seven not getting money. jane: the white house keeps up the pressure for health care, focusing on older americans. the president will make his case one hour from now. linda douglass is the white house communications director for health care reform. some have called this a setback or a blow to the white house. how would you describe it? >> they are making progress. three of the five committees are writing legislation based upon the proposal. the last two are almost done and we expect health-care legislation at five congressional committees lowering the cost. if you like what you have, you

can keep it. it protects your plan, keeps it deficit-neutral. it gets rid of pre-existing conditions, gender discrimination, and all kinds of diseases making it hard for many people to get insurance. jane: both houses have to agree. nancy pelosi said the bill would win it. what type will win in that case? can you decide what comes out of there will contain what the president wants? >> the president made it clear that whatever legislation emerges must lower costs and create more affordable option for people locked out of the insurance market. as i mentioned, it has got to start changing practices in the insurance industry allowing them to prohibit coverage for people with pre-existing conditions or

discriminate because of gender. it is a lifetime cap on what you could spend. it will be deficit-neutral. jane: some members complain that there was no blueprint from the white house. does that mean there is a mistake in hands of congress and that is what we're ending up with? >> absolutely not. we have clearly laid out what the foundations of health reform are and congress is building all of these committees. they agree on principles. there will be disagreements over details, because elected representatives listen to constituents. what we see in the end is legislation built upon the president's principal. jane: it is not fair to say there are agreements, because we have been talking about a public auction, and the senate and house seem to be on different pages.

>> we will see what emerges. clearly, what the president has asked for is legislation that would create options and begin to expand the choices consumers have at lower-cost, lowering prices of health insurance and sparking competition, keeping insurance companies honest. so what he is talking about is creating options that will make those options are affordable, and that is what they are moving forward with. gregg: all right. checking on wall street this hour, consumer confidence is down and so are the averages, in the negative territory. the cost of your favorite foods. jenna joins us now.

this is our business and shopping cart. in june, we heard about cookies and beer. both have a grain in them, but what tyson together is the biggest price gains ever. a pint of beer, $1.10. this trend continues for a couple other prices. the price of peanut butter, for example -- i think the board just froze. that happens. but let me understand what goes on. we're seeing a bunch of price

ranges in cookies, beer,. but are, and potato chips. one of the things these all have in common is packages, and as they compete with store brands, the increase packaging size. even if you pay more, you feel like you're getting a big package of a chocolate chip cookies, for example. the reason that increase happens is the packaging on the inside is oftentimes plastic. oil prices are rising and the price of the plastic rises. with packaging getting bigger, you can see the increase happens. so that is not good for our waistline, super sizing it. a gallon of milk increased, just over $3, because farming cost of come down a little bit year- over-year. but if you pay for beer and cookies, you are paying more.

gregg: i had nothing to do with that. do not start pointing at me. jane: drug companies are paying huge box to run ads promoting the latest prescription medications. but all those side effects -- should they be pitching these products directly to viewers? some lawmakers say absolutely not, it is not appropriate, is dangerous. discover new seafood creations...

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gregg: there is another health scare battle shaping up on

capitol hill and before we get this segment, it might not be appropriate for some kids, so you might want to send them into the other room. in the meantime, some lawmakers want to ban television commercials for prescription sex ads. viagra, levitra, cialis. they want to ban them from prime time because they are inappropriate for family viewing. >> america's most spur scribe e.d. treatment can help you have a most satisfying sexual experience. gregg: but pharmaceutical manufacturers say they are already policing the situation and it revised guidelines took place in march of 2009, addressing the appropriate timing and placement advertisements with adult contact. our guest is sponsoring a bill that would end the tax deduction

for drug companies spending on all advertisement, not just sexual aids. why are you doing that? >> we have a big problem in the health-care industry with overuse and too much cost, and what this would do would ban not only the direct consumer advertising on television but also be marketing promote a that drug companies do to dr. sending them on a paid vacation, two resorts, bringing free samples. $18 billion every year, and $6.3 billion coming from the taxpayers who, when they write off all these expenses -- i would think that by taking the deduction, we can decrease the amount of prescription drugs that are demanded by consumers and also bring more money in to pay for health care.

gregg: your colleagues want to take it further, banning drug commercials. you're a democratic colleague wants to ban those on decency grounds. you cannot do that, can you? there's a first amendment right, i'm sure you're well aware of. >> that is why what i'm doing is looking directly at the tax break, not on violating the first amendment by saying they cannot advertise. but you have to look at it this way. you might say we are one of only two countries, new zealand being the other, allowing any advertisement of drugs on television, so obviously other countries have decided it is not a good way to go. that is why we should be looking at taking away the tax benefit. gregg: today i read the supreme court case saying that you cannot do this with commercial speech, it falls under the first

amendment. aren't you doing the same thing, basically interfering with the drug companies first amendment rights by punishing them, taking away this deduction? >> ask the taxpayers. do they want to pay $6.3 billion to help subsidize all of these drug advertisements on television? no one is saying that they cannot advertise, all we're saying is that they cannot be subsidized by the taxpayers. gregg: fair enough. thank you for joining us, congressman. jane: do you like to dress like john lennon? some of this stuff, brenda starr's signature, lyrics from jimi hendrix, you can order all the stuff. . i never thought i would have a heart attack,

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jane: we have developing news on the terrorist cell. the wife of the man who is said to be the ringleader, daniel patrick boyd, has just issued a statement through the muslim society in north carolina. >> we do not support extremism and violence. i also want to make it clear that these are allegations. the fact that we do not support it should be understood. also, it is still in its infancy. we expect due process will do its job and a jury will do its job to come to a determination. jane: that statement was issued

on behalf of the wife of daniel patrick boyd. neighbors described him as your average guy. more to come on that. gregg: you, too, can own a piece of music history with more than 400 items being auctioned off. it is all part of the rock and hot -- rock-and-roll hall of fame option. jill dobson is with us now. -- auction. what are some of the most popular items? >> there were several minutes of tape from and not add that she left for a onetime boyfriend. also interesting is a jimi hendrix contract which he signed

that gave him just $1. jimi is not even spelled correctly, the same way that we know. jane: in a recession, how are they expecting sales to be? >> there are confident of that but they believe that hard-core fans will be showing up. an elvis suit, blue print. they are hoping that people realize that these are onetime opportunities. jane: when is your moment of opportunity? >> it runs through august 6. we have a link on our website as well. gregg: i can do elvis.

>> there are the letters had been done i wrote. -- that madonna wrote.

and jane: coming up, the crew of the space shuttle endeavor will

be undocking from the international space station. they are completing this mission, including setting a new record being in space. gregg: then expanded the space station. there are two different teams here, a total of 13. the shuttle crew floated away and went into their hatch. jane: and they all wore the same clothes today, too. gregg: this is the largest number of after not being in space at the same time. -- astronauts being in space at the same time. jane: they also had a broken toilet for awhile, but they fixed ta