from the "gi joe movie." there's a "gi joe" movie? >> same channel. bill: good morning, everybody. brand-new numbers into our newsroom show the federal government in big trouble dealing with the largest drop in federal tax receipts since 1932. so far this year receipts of individual income taxes down 22%. corporate income taxes down 57%. megyn: that's insane. that's adding up to hundreds of millions missing from uncle sam's bank account. can you imagine if someone told you your income was getting cut by 22% or 57%? you might have to tighten your belt a little bit. this tax short fall raising a red flag even for supporters of health care reform and

basically just about any other government program you can think of. the co-director of the tax policy center saying in the economy doesn't recover soon it doesn't matter what your social or economic or political agenda is there's not going to be any ref knew to pay for it. bill: so with the president pushing health care reform and that's expected to top a trillion in money the federal deficit ballooning to -- where will we, as a nation get that money? stuvarny joins us and i think we're picking up where we left off yesterday? >> yes, consider he's hard dollar numbers in the first six months of this year the amount of money coming spot federal treasury was down $338 billion compared to the same six months last year. when it comes to personal income taxes $178 billion less. corporate income taxes, $130

billion less add it all up and that's 1/3 of a trillion dollars less coming into the federal treasury in this six-month period compared to the same last year. that's a massive short fall any way you slice it. >> so if you're not going to cut programs or spending you're going to have find more income and you do that by raising taxes, right? >> yes, sir, you do. this brings up the whole concept of the middle class tax hike. >> let's go back to when robert gibbs tried to walk back comments from summer and geithner saying some type of tax increase is required. listen to what he had to say. >> you can understand why people took it as geithner and sum ners trying to open the door. >> i hope you'll take my reit ration of this as an update. >> the door is closed. >> i am reiterateing the

president's clear commitment in the clearest turns possible that he's not raising taxes on those making less than $250,000. a year. >> however, if you drive the deficit to $2 trillion and if you want new social programs like health care reform sooner or later you're going to have to get a whole bunch of money from somebody and the only available money is the income and spending of middle class americans. >> commitment is good so long as you can keep them. stu barney. see you next hour. thank you, stu. megyn? megyn: so you just heard the white house denying to any middle class tax increases are in the works. we're going to investigate that a little more late they are hour but one question being asked is if that is true as robert gibbs claims why then did two key administration officials, president obama's top economic advisors, why then

did those two on the sunday talk shows refuse to rule out higher taxes for the middle class? why didn't they just say president obama stands by his earlier commitment? treasury secretary tim geithner and chief white house economic advisor larry summers both said we can't rule that out. the question was asked them repeatedly, could that mean increased taxes for the middle class? both men fought hard to refuse rule that out. in other words, they refused to rule that out. after the white house knocked that down, over well yesterday afternoon, the head of the americans for tax reform said quote to have the president's own a pointees accuse him of lying his way into office is a betrayal beyond words. grover minor quist say that summers and geithner should be fired if what they said was not true. more on that coming up.

bill: meantime they were hot, mad, fired up. across the country we have seen the videotape americans speaking out against health care reform and many lawmakers heading home to hold their town hall meetings in their own districts and probably some of them wishing they had not. take a look at what happened when democratic lloyd went back to texas. >> [chanting] bill: just say no. protesters chanting it out. more than 200 people. a town hall peting held where a group of american veterans. did it get boyce rouse. he'll join us live in about seven minutes from now. megyn: and your local post office could soon be no more.

budget problems forceing the u.s. postal service forced to shut down and combine ma facilities. mail volume dropping by 9.5 billion pieces as more and more people turned to the internet to pay their bills and keep in touch. medicaly, how bad is the problem? how many post offices might be going away? >> good morning, megyn. $7 billion in the hole for the united states postal service despite the two-cent increase if the price of a regular first class tamp this year. 700 possible closings and more could be added. the post master general is also asking congress to reduce service from six days a week to five days and it may also change how the post office funds retiree health benefits and but nothing is expected before september 30 of this year.

megyn: in the meantime what's the response from cops on this? >> well, some are skeptical. they think cutting service means losing even more customers. susan collins a rapinging member that oversees postal issues. >> it strikes me as short-sighted for the postal service first response to be to cut back service to its customers. the postal service has essentially come up with three ideas to deal with this crisis, one is to go to five-day a week delivery rather than six. now we're hearing a second idea to potentially close 1,000 post offices across the country. >> and again, the third idea has to do with retiree health benefits, the way they pay for those. the postal service takes issue with the idea that this is a first response. i got off the fope with a

spokesperson who says they've already done numerous cost cutting issues and cut operating costs and work hours and says it's the recession and it's really what's hitting them hard here, megyn. megyn: and now people are sitting at home wondering if their local post office will be gone. thank you. bill: really going to have an impact on the consumer who relied on the post office on the corner decade after decade. megyn: when you live in a smaller town where i you grew up in del mar you know the people at the post office. you see your townspeople there and stuff. here in new york city it's a different experience, let's just say. bill: you're in, you're out. you talk to that person bind the counterand to one else. megyn: don't delay or they'll kill you. bill: we're getting more on the passengers getting first-hand accounts of what they felt during the terrifying time

onboard. with eel hear from some of them and get an update on the injured. megyn: and folks are voicing their opinions on health care reform. 34 are worried about the government-run system many coming from our nation's veterans. with eeel show you what happened at this town hall. bill: also name the connection between the cow and the water bed. we've got the answer. ♪ woman: (thinking) so, i stick this bounce bar inside my dryer and for about four months, it'll freshen my clothes automatically? wow, let's see you in action. hmm, i wish all my chores took care of themselves automatically. ( ♪ )

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diabetes doesn't have to slow you down. join me and over a million people who trust liberty medical. megyn: well, new details on those injured on the correspondent nenl flight rocked by turbulence. about six hours into the flight a patch of turbulence sent

passengers around crew flying. a first responder helped tend to the injured while the plane was degree by verretted and many were not wearing their seat belts even though the seat belt light was illuminated at the time. other passengers say there was no warning. >> 100% of the people injured did not have their seat belt on. because i asked. >> i woke up when my head hit the ceiling. >> was it pretty calm? >> well, i think real fast they it was screams and worried when it happened then it got dead silent afterwards because we got real nervous. >> it was calm afterwards. >> the first guy you saw was a first responder and a passenger on the plane. we spoke to him on america's newsroom moments after the flight and he described the incident as severe like nothing he had ever experienced before

and when you heard him say that 100% of the people didn't have their seat belts on he meant 100% of the injured did not have their seat belts on. >> i came here to flee the region of entitlement, latin america, a system that has been proven not work. i believe we all have a right of life but no any other rights. we can work hard to become somebody and that's what attracted myself to this company. bill: that was part of the meeting a lot of concern about where congress is headed on this issue my next guest had a town hall meeting of his own alikea cummings from baltimore, the democratic congressman from maryland good morning to you. >> good morning. bill: i haven't seen a video of

you being shouted down. did it go ok? >> there was no shouting. as a matter of fact there was no incidents like other town hall meetings, and that's because i had an opportunity to explain to these veterans exactly what we're trying to do and how it would affect them and their family. bill: as you know everybody wants to know what's in it for them. how did you make your case? >> well, basically what i explained to them, you've got to keep in mind the veterans their familys are not tre'ed at the veterans facilities, and they have to get health care just like everybody else. and so their concern is they had a number of concerns with regard to people in their family being turned away by insurance companies because of preexisting conditions. one gentleman said his wife had a scare with breast cancer. next thing you know she couldn't get insurance. they lost their insurance because of an ailment that may

have come up and there was various things they had to grapple and struggle with insurance companies to try get the treatment they thought they were paying for with regard to their families and i explained to them president obama is trying to reverse all that first of all to try to make insurance affordable and assessible and affordable to them. >> you asked me a question. and i'm telling you that's what happened. they had an opportunity to hear their congressman plain to them what we're trying to do. bill: now facts are stubborn things but nun your own state the unemployment separate shooting through the roof. >> you're exactly right. bill: in april 2006 on the screen the unemployment rate in maryland was 17.5%. now it's 7.57 and a will the people going to these town hall meetings want to know how is health care reform going to put people back to work? >> well, first of all, you have

to keep in mind the stimulus program there were people out of work we were able to provide for, i hear all the naysayers say that president obama is not doing this or that and first they were saying he was doing too much well we're going to get past the storm and the indicators are clear today with consumer spending going up, housing sales going up. these things happening we are on our way up as opposed to town. i understand fox is fair and balanced, but you've got keep in mind fair and balance also says this president inherited one of the worst situations in the history of this country so we have got to get past the storm. bill: here's my point on this, i'll give you a chance to lay out your point but for the guy out of work and the family whose unemployment benefits are about to rub out do they want health care reform or is a job?

>> they want both because if you're not healthy, you can't work so basically what we're trying to do is the 50% of the stimulus money is going to be spent in the next six months. i think the stimulus has just begun to start to work but we've had most of the bulk of the spending -- bill: if i could i don't mean to be rude but you're talking about $550 billion has been allocated not spent but just allocated. >> i'm talking about spending in the next six months. it's so easy to sit on the sidelines and i found it interest that every positive thing happening to this conservative first the conservative forces said it won't work then when they start seeing positive things they give this president no credit, none whatsoever, oh, it's a fluke. they even talked about the car situation cash for clunkers,

oh, that doesn't work. why not work here? so we need to wait a minute, just hold on and keep pushing. support this president instead of trying to block him, help him accomplish what he's trying -- bill: well a lot of people are pushing -- >> but there are a lot of people -- bill: listen don't be a stranger. come back way out of time. thank you, sir. megyn: this is a fox news alert. our former president is now trying to secure the release of two american journalists who work for al gore's online network. this is the video of former president roying now we get word that bill clinton has met with the north korean leader kim jong-il that they have met in pyongyang and we don't have the details of the meeting but we knew president clinton was there trying to secure the release of these two

journalists the two journalists were sensed to a decade of hard labor in work camps. so far we were unsuccessful and now we learn he has met past tense with kim jong-il trying to bet the details of that. that's again rather extraordinary. more as we get it here. bill: meanwhile they say a good night's rest makes you more productive. turns out that's true for cows. one idea for getting nelly through the night. gecko vo: you see, it's not just telling people geico could save 'em hundreds on car insurance. it's actually doing it. gecko vo: businessmen say "hard work equals success." well, you're looking at, arguably, the world's most successful businessgecko. gecko vo: first rule of "hard work equals success." gecko vo: that's why geico is consistently rated excellent or better in terms of financial strength.

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>> ♪ cows like to talk but they don't talk like you cows like to talk when you meet a cow here is what you should say hello cow

hello cow ♪ bill: one of our favorite songs here, moippingen can play it on the guitar. some news today for our bovine buddies, seeing great results by providing its cow aswatter bed. they say less stress for the animal helps increase milk production. covered in hay so they are comfy. the farm shows it will help reduce the strain on their joints and hips and help reduce the arthritis. some day we're going to track down the guy who wrote the song and maybe even this week we could bring him on the show. megyn: if you know this guy tell him to email us. we need to know him. we love his song. bill: and viewers want to see you, too. not making that up.

megyn: ♪ black and white cows go to moosic school ♪ ahh, big, big things happening on capitol hill this morning. senate democrats are trying to hammer out a deal with key republicans on the cash for clunkers program. specifically an additional $2 billion in funding. this thing has been great so far for consumers and car companies and car dealers, but where's the money coming from. hi, kelly. where does this stand now? >>. megyn: so where are we? >> according to republican senator tom of oklahoma the rise or fall of this program is quote in harry's court refering to senator majority leader harry reid will he bring the house majority in extending it for the vote and will the f word rise speaking of

filibuster. but here's another question they are facing as well. where will the money come from and senator chuck schumer says they could get the money from the energy loan fund and senator feinstein says democratic leaders agreed take it out of tarp but many say the program could be considered beyond this $2 billion and she was once opposed to the bill but now touts it as a good plan because consumers are turning in their clunkers and getting cars that get on average 61 miles better on average so looking at it this way it remains to be seen how the republicans will vote on this. megyn: where does it stop? how much money should we put into cash for clunkers? in the meantime you mentioned the f word.

what are republicans saying about this program? because we heard it across the board. they said we're going to filibuster and not let it get a vote then others saying over our dead bodies. where do the republicans stand on it now? >> well, overall the republicans initially get this plan and belief it's wasteful spending now. and one said instead of targeting one industry, just give tax cuts to people across the board that government can't afford to manage car dealerships from washington and also talks about what about other products and services, helping them as well and republicans argue this cash for clunkers program is hurting the economy rather than sage it because some of them are considering a filibuster but definitely quite a few of them want to vote against it. >> every bit we've got get serious about spending. we can fund this from the $800

billion stimulus project. we voted last week not to fund unemployment insurance and highways with the stimulus money but to actually add more debt. >> and of course that's senator jeff sessions and making a lot of people quite concerned about this on both sides of the aisle. but i tell you what, megyn, i've got a good idea how about a cash for clunkers song as opposed to a moo song. bill: what's running through your head right now? you got a melody working on? >> i'm working on a melody. i don't want to attempt it now but ♪ can i have some cash for clunkers please ♪ [laughter] megyn: thank you, kelly. there's nothing that man can't do, nothing. what a doll. bill: we have to and then?

megyn: yes. >> bill: new details on the surprise meeting happening aapparently right now between the former president bill clinton and kim jong-il. megyn: this is not former president clinton, no, but it's a great story. it's a cross between a jet ski and james bond's jet pack. look at this. how would you like to bust this thing out at your lake vacation? it is fast. it is fun, and it is powered by water, and you will see it. bill: ok, the white house is spending mixed signals on tax hikes for the middle class. the president could break a major campaign promise but the white house press secretary saying that's not sow. we will look for the truth this morning.

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bill: there are new developments in the case of seven terror settlements allegedly living and traininging in the state of north carolina, attorneys representing the men are meeting now with the judge, then they were charged on murder kidnap and injury persons in a foreign country and police are also said to be looking for an 8th suspect they believe that suspect is currently living in pakistan.

megyn: president barack obama said he would not under any circumstances raise taxes for the middle class but now with a health care reform plan now on the table, president obama's economic advisors singing a different tune. here's what they said about possibly raising taxes on the middle class. >> it's never a good idea to absolutely rule things -- rule things out no matter what. >> we can't make these judgments yet about exactly what it's going to take and how we're going to get there. but the very thing -- and the most important thing is to understand we did not have the choice in the country and we want an economy to grow and people understand we have to bring those deficits down. megyn: those comments put the white house in serious damage

control mode they got a ton of reports calling up saying what the heck was that about? press secretary robert gibbs tried to dial things back with reporters on monday. >> but you can understand why people took what they did -- what they said yesterday as trying to open the door a bit. >> well, i hope you'll take my reit ration of a firm commitment as the update. >> the door is closed? >> i'm reiterateing the president's commitment in the clearest terms possible that he's not raising taxes on anyone making $250,000 or less. megyn: so who are we to believe? steve also a fox news contributor good morning. >> hi, megyn. megyn: so a lot of people are scratching their heads even though robert gibbs came out and said no, no, no, it's not like excite they are in or

summer don't know what's going on with the president's economic agenda or payment plans on how to get down the deficit so what do we make of it? >> well, they are in trouble. i mean, i think this is sending mixed messages and putting it mildly. the thing is you had until recently these same two officials making arguments in quite, i'd say enthusiastic ways that they had to spend a ton. they had to increase definites in order increase the economy's money but now they are saying we may have to raise taxes so in the matter of a couple months they are making not only conflicting arguments but polar opposital arguments. megyn: the latest message that yes, if possible taxes are going to have to go up but what i heard from the left those who have criticizeed the health care reform plan is it's not

that we don't want health care reform it's that we want to tax the rich for other purposes. we want to reduce the definite. that's why we need the tax so sit a wonder these two are saying we're not going to rule out tax raises? >> i don't think they are sitting there trying to figure out ways on how to tax the middle class but these two policy wonks these are policy wonks, they are thinking in broad strokes about the economy and they know by doing math basic math that what the president is proposing, what he's trying to accomplish is not going to work without a serious increase in revenues. they are looking for places in the abstract, i think to come up with those new revenues and they have decided they don't want to to box the president?

so you had the own advisors making arguments that raising taxes in a recession is a terrible idea and not good for the economy. i think that's a basic economic truth and they are going to run into those realities of economics. megyn: but steve they have calculated that no one cares about taxing the millionaires they believe politically that's an ok position to take we're not going to tax anybody but the so called millionaires and maybe those who make more than $250,000 which that may include small businesses but they think that's palletible but is that going to trickle down? because you hear from those below that income that they believe they will get taxed eventually. >> you could confiscate 100% of the income of millionaires they are talking about and it's not going to pay for what the president has and is going to be proposing. it simply doesn't work.

the math doesn't work. so they run into real problems on that and then of course you've got all the ancillary issues, again, basic economics that if you tax the rich the so called rich and small business owners at such an exorbitant rates lit affect who they are able to hire and how much money they are able to spend. megyn: that's where i want to pick up with you because today we get this report that i'm going to guess, i don't know, maybe these economic advisors before we had the revenue the government received and the numbers are awful. 22% drop in individual income tax received by the federal government. folks like you and i paying 22% less across the country because people got fired or took a pay it hfment corporate income taxes down 57%. 57%. so these guys at the top, they know we're taking in less money

as a country than we used to. a lot less this year than we used to, so our revenues are down, the deficit is up, the spending is out of control and the question is where do we find the money? we need money. i mean, could that be where the summers and geithner comments came from? >> that is absolutely where the summers and geithner comments came from. the problem is when you look at raising tax rates and the kinds of taxes that i think would be in play if they actually had to go down this hypothetical road robert gibbeds doesn't want to talk about, it's not straight line to raising taxes and re-news. we had a tax law that -- it's not straight line and you saw during the regan years when marginal tax rates were cut revenues increased. so i think this is exactly what

geithner and summers are grappling with, i just think in this case they were maybe too honest megyn: and is there any chance barack obama does allow a tax rise before election? >> yes, but i don't want it will be marginal tax rates or payroll taxes. i think it's spiral possible that he looks at a vat. value add d -- taxes. he's already broken his pledge he said he's not going to raise taxes on the middle class in any form, he's already raised the cigarette tax, probably the most regress i tax in america. megyn: well, you've got cap and trade which the republicans call cap and tax because it let the record show the -- >> yes. megyn: very interesting split in the white house and we appreciate you here to break it down for us.

bill: we've been watching and getting a lot of scream and shouts at these town hall meetings. a lot of democratic lawmakers saying the anger over health care reform has them facing a long and painful august. how will the folks doing the yelling affect the debate? answers to that. megyn: plus, it is the coolest new toy on the water. look at this. this looks fantastic. it looks fun. it looks fast. it looks fan fastic. but there are some warnings attached. the water jet pack after this break.

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bill: go for it! [laughter] bill: out of the japan we get that videotape. that's how -- i guess you could have some fun on the water with that. here is how to do it right, though. a new jet pack that propels you into the air with water. this is legit, folks, out of canada, ways about 30 pounds. it propels you in the air as high as 30 feet. that's three stories. we bring in corey from "discover" magazine. welcome. how much fun would that be at the lake this summer for crying out loud? we're going to show you from jet revation the gentleman raymond lee, lives in canada, how does he generate power? >> this is newton at its most basic. a vertical jet ski. jet ski engine shoots water up the hose and out the jets and you fly up in the air he claims

35 miles an hour for the one he's going to be showing. the prototype goes 22 miles an hour, the one he's going to sell he says you can get up to 35 miles an hour. the water vessel is behind him as you can see here, he's connected bay water pump that gives him the thrust he needs so like i said the jet see moteer is shoot that water up so the good news is you're not using fuel so you can pretty much go forever but the bad news is you're connected to a hose. bill: he's got a trigger. is he cranking that trigger like you would on a motorcycle? >> yes. he's got a throttle and sitting on a bicycle seat so he doesn't flip over. bill: you ever did anything like this before? >> a bungee jump. bill: the company is saying about the sensation,

weightlessness, suspended height, three-dimensional freedom of movement. >> yes. you just don't want to do a face plant. bill: well, you're dropping 30 feet. >> 35 miles an hour in the water, i don't want to do that. bill: who would be doing this? >> $130,000 so that's a lot of clunkers you're not buying instead. bill: it's expected to be marketed by the end of the year. >> $130,000. but it's a jet pack. bill: and cool, if i'm like a jet ski on the water that gives you power to go down the lake. >> take the jet ski, turn it vertically, take off. >> i think this guy's got a great imagination. bill: thanks, corey. could we see a little more? it's -- just a little bit? come on.

raymond lee? laughing laughing [laughter] megyn: i was with you, bill. nice to have to have around if a shark came by. bill: heck yeah, when you need to get out of dodge? megyn: we've got live pictures of new york harbor here, why? because there's a major maritime terror drill getting underway in a few minutes. do we have the shot? frozen. not new york harbor but the shot. in any event the potential threat nypd is preparing for and the city's plan to keep one of america's busiest water ways safe, next. upbeat rock ♪ singer:wanted to get myself a new cell phone ♪ ♪ so i could hear myself as a ringtone ♪

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bill: there was a series of earthquakes in baja california rattling people as far away as arizona. measuring 6.9 in magnitude. considered somewhat common for that area but for one wonl in tucson it was still unusual enough to make her a bit nervous. her reaction. >> i was sitting here and all of a sudden the building moved back an forth my desk was moving the floor i thought the building was going to collapse. it was crazy. bill: all four of the quakes struck wan 45-minute period. megyn: way to maintain your sense of humor. bill: yes. megyn: well for checking our board erds protecting our board erds and waterways from terrorists. that the moment the coast guard and others are holding a test

just off the coast of the water ways. rick levin all this is in new york city live. rick? >> we're on the new york harbor on an nypd boat with the chief who is taking part in this exercise. going on looking for private vessels an exercise to try to determine whether or not someone was trying to smuggle some sort of dirty bomb into new york city. so chief i understand you're going to have -- unmarked -- >> launches involved from eight different agencies in securing these, and they are going to what we call a choke point. going to direct people into a certain area. >> can we see that device?

one of the hand held devices is -- people would be surprised it's so small but could detect a nuclear device trying to be smugeled on a boat? [no audio] megyn: it's so disappointing. >> on a vessel, that vessel will now be taken to a second area where we'll do additional testing with an identifier, and -- >> i guess -- megyn: you're watching sausage get made. hard when you send a reporter out on new york harbor. anyway, you got the feel for it. they've got the smaller device and trying to check for radioactive devices, which seems like a good idea, and rick lefen all this is trying to bring you that story. bill: technology can bring you to places we've never been able to go before.

that's an example. right at the mouth of the new york harbor the vary shon'bridge, vary johno -- the bridge. megyn: our thanks to rick. well boxing champ ar you are theo gotty is dead. he was found hanging in a brazilian resort weeks ago. his 23-year-old wife was jailed on suspicion of murder, but now police are saying something very different. and his body has been exhumed. kelly investigates. unbelievable tape. bill: and you've seen some of the video of these town hall meetings across the country. this one i think was from austin, texas? or in a moment radio host bill creft tells us why he thinks this will backfire on

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megyn: fox news alert awaiting key democratic senators at the white house at this moment you are looking live at the makes' capitol, the white house and capitol hill. president obama rying to make sure snarts in his own party on onboard with the health care message before the august recess, that's where we begin here on a brand-new hour of america's newsroom. i'm megyn kelly. bill: and i'm bill hemmer. [captioning made possible by fox news channel] bill: vice president joe biden said to be selling wary democrats on the reform bill. megyn: mike, what should we expect from this luncheon and exactly who is going to be there? >> well, megyn, all 60

democratic senators were invited. three are not expected to return due to health reasons, senator byrd and kennedy and mckul city broke his ankle. but we're told they will be on the forfront of what they want to discuss with the caucus and going to recess soon so want to make sure they are on each other's message. as they go home for recess. also how we expect the president to reiterate his support for cash for clunkers. of course the white house is waiting for the senate to react on the house vote basically to authorize $2 billion more for that program, the president, the white house still waiting to act on that measure. megyn? megyn: there is serious doubt about how this health care reform bill will do in the senate. whether there baseball reconciliation and the house

when it comes to health care reform and we saw nancy pelosi give cards to -- really saying it's about insurance reform and talking about how this will be good for the american people. is the president expected to ereit a similar message with the senators before they head home? >> well, this white house will acknowledge the aggressive campaign against the health care reform so we expect him to say you're probably going to get an earful about why health care is battery for america, here's why you should say it's good for america and here's what the president is going to be saying. we expect him to -- a reit ration of support for health care and why they should be on board with it and what they can help do to help sell it in their states so basically all trying to rally the troops before they go home.

megyn: it will be interesting if the president advises them on how to handle these town hall meetings. mike emanuel is watching it all for us. bill: there is videotape for health care getting a lot of attention clips of president obama talking over the years saying he plans to tend privateization of health care. here he is. >> is not your enemy. it is your friend. i believe. let me also address an illegitimate concern that's being put forward by those who are claiming that a public option is a trojan horse. >> i want to change health care in my first year as president. i would hope we set up a system that allows those who can go

through their employer to access a federal system or a state-pool of some sort. bill: all right. that was the group calling itself naked emperor news.com. it has about 400,000 views. >> i can envision a decade out or 15 or 20 years out. bill: ok late last night here's what came from the white house, a clip saying simply not true. roll this. >> hi. i'm lindh and one of my jobs is to keep track of all the disal investigate out there about health reforms. >> take a look at this one. this one says uncovered video. obama explains how his health care plan will eliminate

private insurers. people who try to scare other people when there's new phrases and they are cobbling them together to lave very -- expect more of the same later today during the white house briefing with robert gibbs. we'll have part part of that for you here on fox. megyn: a mystery off the coast of alaska. police say the body of a woman was found in the ocean about 75 miles outside of juneo. they believe it is the body of a 45-year-old woman who fell overboard from this cruise ship operated by holland america. amber mall cook of washington state was reported missing by a companion monday morning last seen when she ordered room service around midnight sunday so there was a bit of a time laps between the time she was last seen and the time she was

reported missing at that point she was in glacier bay. police plan to review the ship's camera footage and interview the man. bill: some concern there. megyn: have you ever been to alaska? bill: yes. stunning. megyn: have you seen the movie the proposal? has anyone seen that movie? bill: stunning? megyn: i'm just saying alaska doesn't get a lot of coverage in the movie world and despite this cruise ship problem, it is a fan fastic movie, so i recommend it. sandra bulk. bill: reporting now that former president bill clinton met with kim jong-il in ping pyongyang to negotiate the reits of two 'em prisonned journalists both women accused of sneaking in

the country illegally in march sentenced to 12 years hard labor. what do we know so far about this trip? >> well, our sources told us last night when we went on the air with it first that essentially a he was simply going to put an american face to it. this was all part of what was known to be the can a booky dance that would evently may out as the north koreans demanded a high-profile american come and then they would give some sort of amnesty to journalists. it's all playing out right now and the state department and white house are reluctant to comment on it the white house insisting this morning that the former president clinton is not carrying any sort of message and there's going to be no quid pro quo for the journalists releases but iran will be

watching because they are holding three americans and they will want to see how knot americans -- how north americans had this -- . >> remember the two girls were working for al gore's network tv so at first it was said either al gore would have to go there or remember governor bill richardson of new mexico in the past has successfully negotiated with the north koreans. and remember a man drunkenly floated down river and was captured by policed, and but remember gov a very good past.

governor richardson backed obama and clinton is the secretary of state. bill: that was the first image we saw out of north korea with the president and kim jong-il >> all right. in a moment it used to be the slowing on the keep kids off drugs but now it's just say no to insurance reform. hear why they say -- megyn: and ar you are the' gladdy dead with his wife originally arrested for murder charges. now investigators have made a trip to the graveyard. bill: and the taser, up with of johnny law's programs and now a boost to make it bigger and better, and you will see it on display. there are many ifs in your family's life.

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>> personally, thank you. can i finish my point, please? >> i'm -- for i mean anyizations. megyn: angry americans giving democratic lawmakers an earful at town hall meetings worked up over health care reform. our next guest says this is not helping the republicans, and it could wind up happening health care reform. how? radio talk show host bill, former chairman for the california democratic party. how are you doing? thanks for being back on the program. so explain that one. >> good to be here. if i were a democratic

congressman or senator i would pay these guys to show up because i think they show a very ugly side of america, not necessarily the republican party. but they are ugly, they are disruptive. this is a serious issue, and i think what's going to happen in august is going to decide this issue, but i think americans want serious discussions. they just don't want mob rule and i think that's what we're seeing. it's obviously orchestrated. we have seen it in philadelphia, new castle. i don't know who they are but i don't think they are doing the republican party any good. megyn: no question some of these are organizeing and getting their people to go up and just -- and not so much living as angry. the woman who cross-examinationed specter saying how can a government who

can't even run a cash for clunkers program run a program that's going to resize 1/7 of our national economy? her point is taken as legitimate by a lot of people who feel the way she feels. >> i've asked same question but she is different from the people in the back of the room just shouting everybody down, not letting anyone speak and the woman is holding up a bible as if that hags anything to do with any of this -- tashed people there to protest, what are they for? the status quo? there's no other plan that they put on the table. the republicans have foote put no other plan on the table so they are the -- that 48% of

americans now rate the u.s. health care system as good or excellent and 49% are opposed to reform. the majority more than not are opposed to health care reform, and i think that's what we're seeing at these town hall meetings. >> no. i don't think you're seeing that at all. really, i think you're just seeing people who are anti-any the government has to think of. they can still deny you covering if you have a preexisting condition and republican or democratic, 80 because they are lucky because they haven't gotten six, and esm there's millions of stories like that and 47 million americans who don't have any health insurance whatsoever. the status quo is not acceptable and i think the these fringe protesters are not doing their cause any good.

megyn: i don't know if you can call them fringe. it would be one thing if the polls were in heavy favor of the president but they are just not. to a turn that the silent masses have any opinion and i don't want anybody messing with it. >> all i'm saying, megyn: rn, is again, healthy debate with s what we need on this issue. this is not healthy debate. there are legitimate points to be made and about who is going to get coverage and who is not. these people are not that's not the american way. i think they are turning people off. megyn: yeah, well you -- >> and i think republicans ought to stand up and say come,

guys, ask all your questions otherwise if you're just going to bo ever boo and shout -- megyn: well chabting yes, we can who brought an audience member in and did the same thing and other groups showing up to rally -- fair is fair. >> my messages are across the board but i defy you to show me anyone from the left that have disrupted the meetings. they let people speak. >> you waverb watch about that. -- megyn: bill apparently doesn't watch america's newsroom every day which i am going to take up that issue with him. bill: and new york the senator chuck schumer saying republicans may bypass

republicans -- democrats may bypass republicans. and democrats control senate by 60 votes. that could be enough to stop republicans actions to block her drama unfolding -- you can see an army of swat officers storming a home. who is inside and how it turned out. megyn: plus the mysterious death of a boxing champion. he was found strangeled to death by the straps of a woman's purse. first they called it murder. now stunning new results and the exhumation of the body. kelly's court investigates. geico's been saving people money on car insurance for over 70 years. and who doesn't want value for their dollar?

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bill: fox news alert, encouraging signs of life for the housing market 26789 national association of real torres now saying sales of previously owned homes rose for the fifth straight month, index rose to 90.6 that index considered a strong barometer for future home sales. also new construction rose a bit in june. so does that mean the lumber business is out of the woods, so to speak as far as the recession goes? we want to check with timber sales buse timber & sales located in everett, washington specializing in douglas fir and hem fir, saying it was once a family-owned business now owned by its employees. and dan good morning.

>> yeah, hey, bill, and i'm joined by the president of buse timber & sales. we were here months ago, ron, you had just layed off a bunch of people and went from five days to four days in the workweek. what has happened in the last two months and what signs in the economy have you seen? >> well, we were hoping things were bouncing around the bottom and i think they have been and in late june i decided we were going to have a few more orders so went back to five days a week and that lasted about three weeks now we're back on a four-day week. >> what are you seeing as far as the price of timber? >> pretty stablized. appear to be coming up a limit, and we're seeing a little more order activity, which makes us little more optimistic. >> any more layoffs? >> no. we're at the bottom of where we

are at and can be and still keep production up. >> what do you think about these home sales creeping up? >> i was glad to hear that. it's helpful. we're dependant phenom housing market. but it's based on house . >> so are you guys just bouncing around the bottom looking for signs of life in the economy? and if so what's going to tell you that you have actually hit bottom? >> well, see, month-over-month increase in volume and prices, it appears to be at the bottom. there's a lot of people that this >> like i said, we're just more opt mistic now. >> well thank you for joining us. there you go. bill, from a perspective of a timber sales guy, you are

looking for any zink of hope and when these sales come out and show the fifth straight month of increases, it gives you hope. bill: thank you. more with megyn. megyn: from lumber to clunkers, new autosales figures and thanks to the cash for clunkers program a couple of the big automakers were in the black last month. part of a group that's been in business since 1919, has 12 dealerships in the atlanta area and an annual revenue of $7.5 million. at nalley toyota how are they doing? >> well, as you mentioned some of the large manufacturers saying losses aren't as bad as you stnd. what has this year been like for you guys, so far? >> well, this year's new car

sales has been down as the industry has been down recently, this program, as it's been announced has been an new increase in our new car sales, traffic more than anything. what we've seen at our dealerships, and we've got some 13 dealerships here in atlanta, georgia, is the traffic, the buzz, the excitement, just the people talking about cars and getting out into dealerships and look at these vehicles, it's really been a nice boost for our business. >> and we have talked about the cash for clunkers and it's not >> well, with new car business as we know being down in the industry, people holding on the their money, not wanting to get out and we turns economic times that are out there. what this has done is just generated people talking about cars. i think americans love cars. we all love them, but getting out and buying these cars and

getting out and back in the dealerships has been very help us -- megyn: mary ann, thank you so much. well, a california man held hostage ming for four days inside of his own home. swat teams arrive and go after his kidnappers. it was like a scene out of a movie. look at this. we'll show you how it all went down after the break. bill: and the new taser gun is three times more effective than any previous model. and we will show you why, live in our studio, when we come back. megyn: this is exciting. >> i didn't do anything. don't days my, broe. don't days me the. i didn't do anything. owe! ow! ow! ..xare you receiving a payout from a legal settlement

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messaging for opponents? >>it might not be regretting through to the minds of lawmakers who are looking at crafting a version between house and senate and get for the forth sign in the fall but a lot of analysts and economists are saying the ongoing recession doesn't matter what your politics or ideological reasons are, there's just not -- let's take a look at the graphic based on the associated press which examined tax receipts for the u.s. government dating back to 1913 the first year of federal income tax was imposed they find total tax receipts on pace for this year to decline by 18%. individual income tax receipts are down by 227 over last year and total corporate income for the u.s. government as a result of tax sation is down 57% over

this time last year, in all the associated press rates this the worst year for tax revenue since 1932, the midst of the great depression. megyn: thanks. bill: well, the new multi shot taser that can fire three times. we first showed you the video roll this from the company. >> taser, taser. taser. >> ahh! [applause] bill: as easy as that. and it comes with a free applause. the next generation taser is now out and what it could mean for law enforcement in the future the creator of taser international. what did that university of florida student do for you

business? what did don't tase me, broe, do for your sales? >> i actually had it on my ringtone for a while but everybody knows taser. bill: this is your new product so what does it do? >> we give the officer the ability to shoot three targets without reloading. bill: you're going to fire this because you now have the capability to fire it back-to-back-to-back. why sit so important? >> well, we've now got 14,000 agencies useing this and run about an 86% effectiveness so if we increase the ability for the officer to have multiple shots it makes it safer for the officer and the suspect. bill: i assume people across the board were asking about it? >> it was number one request.

bill: so viewers at home you have the device in your hand. >> two darts get fired out like a positive and a negative on each cartridge so now we can engage three separatal targets with one device where before it was only one you could engage at a time. >> so we're going to see slights. and you'll see the electricity bill: fire away. >> taser, taser, taser. megyn: cool. >> very big success. bill: what kind of reaction are you getting now when you go out to the law enforcement agencies and say we've got something that's even better than before? >> they are overwhelmed. only 300 people have seen this.

so it is brand-new but the overwhelming reaction has been this is what we wanted. we can gain three targets. >> to conduct the >> i have. >> what's it feel like? >> like hitting your funny bone 100 times worse and then 12 seconds you're back to norm . you feel like you've gone through a pretty good warmup but -- tingling, but back ok. >> in this economy we're up as a business 6 .57 over last year. bill: maybe we'll put live people there. megyn's going to volunteer. >> thank you. megyn: maybe after the baby. we'll see. well, a boxing champion, two-time world champion found demead brazil just 37 years

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megyn: well, kelly's court is back in session. on the docket today the death of a marquee contender just ruled a suicide after police for weeks have been saying it was murder. former superfeather weight world common arturo gotti was found dead in his swragse vacation house off the coast of brazil. his wife shown here, 23 years old, amanda rodriguez originally put in jail on homicide charges. cops thought she strangaled him with a purse strap. that's how his body was found. now, however, authorities doing a 180 saying in fact they

believe now it was suicide and the wife is walking free. gotti's family is outraged. had the body exhumed. enter dr. boden. so can they prove that this was suicide? can the family prove murder? let's ask our family, former defense attorney and prosecutor. good morning. >> good morning. >> would you, this case is so intriguing. the brazilian authorities come phenom scene and find the body with the purse strapsorned his neck and determine murder. he died on july 11. how the suddenly late last week she's out, a reversal, it's suicide. julia? which ruling appears to have been the correct one? >> the correct one was the initial reaction as it oftentimes is. i brought al visual aid with me today. here's exhibit a.

a picture speaks 1,000 words here's rodriguez getting out of jail now does that look like a woman who is grieving over the sudden -- ok, the sudden and tragic death of her beloved husband? or does that look like the cat who ate the canary? >> oh, megyn, let me at her. >> this woman will not get away with murder and can i make my mark, let's look at the the relationship was plagueed with much and she made him before his death change his will so she was the sole beneficiary on the night in question he was drunk and roughed her up. she didn't have him arrested and went back to the condo so she clearly wasn't afraid of him, the instrument of death

was her purse strap, it was a sloppy, bloody strangelation and the story when she came down at 6:00 a.m. to get a bottle out of the refrigerator for the baby and stepped over his body on the floor but didn't realize he was dead was completely incredulous. megyn: ok for the prosecution, your defense? >> it's fair and balanced, let me have a minute. first of all at the risk of julia becomeing the carrot top of kelly's court, it was not fair and accurate. yes, you're using visual aids, she got out of jail. whoo-hoo! , there's nothing wrong with that. >> good times. >> i find there to be something wrong with extreme jubelation, yes. megyn: let's they're defense. >> here we go. ok. first, they made a mistake. they immediately rushed to judgment and suggested for sure

this was a homicide. then oh, i don't know let's wait for the autopsy report come out there are two equally plausible explanations, so we've got to go with frenzic and we have possible suicide and possible accident those are >> we're done. that's reasonable doubt. >> the motive as she points out, the opportunity, the fact that he had beaten her up that night and she goes back to the house with him these are all the things i assume that led police to believe homicide how do you get around that? >> absolutely, and all that is now being factored into their determination and the latest from the police detective was we can't even say for sure she's a suspect. mien point is that we let the investigators who are close to this scenario do their investigation.

michael boden a family friend says the -- how is this woman, you're right. they met at a go go bar at scores here in new york city, which is, you know, well, the men go-go there for quite a reason. in any event he met her there. she's a pa teate woman and he's a boxing champion, he would be about 180, how did this petite woman get his body hanging into purse straps from a staircase? how would she have done that, julia? >> well, i have another visual aid to show that but i'm accused -- i'm afraid of being accused by him this is the two of them. the same summer in brazil. as you can plainly see there's not that much of a difference

in weight and size between the two of them. >> no. >> mark, hold on. i let you go on with your argument even though you had no facts to support it, please let me finish, two, megyn, have you seen a picture of the condo where they are staying? it's story stairs and the railing, there's several feet of space between the stairs and the railing and there's not the balancesters that sort of sprates the stairs from the railing. it would be so easy to knock him out and drag him half way down the stairs, tie him around the banister who was there and fling him takeover side. come on. megyn: and the authorities agree with julia because they say he was very, very drunk. >> julie's scaring me the

detail that she seems to have like she was there in that room. >> i've actually researched the topic and you didn't. >> goodness, gracious. here's what i do know, jewel yo -- >> only dunk. those who have actually been in the apartment unlying you have said it's physically impossible for him to have been lifted up by her. >> that's not what i said. i said she dragged him. that is not even what i said. megyn: but what -- was he found suspended? megyn:en, he was found on the ground and he was -- for him to fall down on that hard tile floor, knocking over the chairs and yet she didn't here

anything -- megyn: she had threatened to kill him in the past and had gotten a restraping order against him and had him change the will and stood to gain $1 million but the brazilians say the frenzics were not there. this is downtown watch. we got to get this panel back together. julia, mark, thank you very much. always a pleasure. >> thank you. megyn: vures, more questions than answers in this one. why were they so sure it was murder when they first came phenom scene? what led them to change their minds? they are not saying exactly. but if she did murder him, how on earth did she manipulate that body which was considerably bigger than hers. something smells in this case. keep an open mind and keep an

open ear for dr. boden's results. bill: oh, she is happy to be out of jail. her pearly whites gleaming. locked in the house for hours until swat moves in. did they find what they were looking for? you'll find out with us. megyn: and the school teacher accused of having an affair with a 16-year-old student. she at first didn't fight the accusations but now she's coming out on offense and that included a visit to the o'reilly factor. .

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megyn: breaking the silence that followed. yesterday on the court, we debated the case of nicole howell, fired from her job as a teacher at a kentucky high

school, accused of having repeated sex with a 16-year-old male student. she says he is making the whole thing up. after months of silence, she is now going on offense, appearing with her attorney on the o'reilly factor and depending -- defending the text messages between her and this boy. >> i just said hi, how are you. he said i had to guess who it was. i said i would not, i was grading papers. and he said, -- obviously he said his name, and then i said, hi, how is it going? but every text message was platonic. megyn: she says of the relationship itself was platonic, and that he is fabricating the entire thing. her attorney points out that the boy initially recanted his story, and it was not until being threatened with expulsion from school for lying that he reverted back and said, "ok,

yes, we did have sex." so no one knows the truth. the teacher said that he got the number off of her phone when it was unattended. she has refused plea deals and goes to trial in october. bill: the last auto assembly plant in chicago getting a new lease on life, set to crank out the newly designed 2010 ford taurus. will this save ford motor company? jeff is live at the plant in chicago, illinois. >> any time we wear safety glasses we are happy. with this production line, they used to make model t's. but this is the new flagship. we talk about cash for clunkers, but if the industry recovers, it is because of stuff like this, a car everybody loves. this is huge.

a lot of pressure on you. >> absolutely, and we're proud to deliver the flag ship vehicle. >> walked on the line, and you can see people putting tram on that. this is the cart that alan mulally has said what they want to make a big winner. you have one shift working here, and you could do a second with more demand, right? >> yes, we will match capacity with demand. bill: thank you, jeff. megyn: advertising a text message while driving? a local sam wants you to knock it off. how the president

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do not donate blood until 6 months after stopping avodart. tell your doctor if you have liver disease. rarely sexual side effects, swelling or tenderness of the breasts can occur. only your health care provider can tell if symptoms are from an enlarged prostate and not a more serious condition like prostate cancer. so have regular exams. call your doctor today. avodart. help take care of your growing problem sfx: chear that?can shaking that's the sound of people saving. saving money, saving time, and saving for the future. regions makes it simple - starting with lifegreen checking and savings - featuring free convenient e-services, up to a $250 annual savings account bonus and a free personal savings review. so make the switch today - and get into the rhythm of saving. regions - it's time to expect more. megyn: we just decided that