trace: we are inside and all over the fox news room. behind me is the national desk. they are covering america. this is the foreign desk, covering the globe. every picture that comes into fox news comes through here, the media desk. brand new pictures will always be on the boxes on the right- hand side. in the top box, information on what was supposed to be a suicide terrorist attack on a military base in australia by a group with links to al qaeda. the prime minister believes it could be retaliation for helping the u.s. in iraq and afghanistan. in the middle box, bill clinton in north korea to talk about the release of worley and tuna -- laura ling and euna lee. in the bottom box, the obama

administration holding a texting summit to deal with the issue of driving while distracted. we have all of the info. martha: we sure do. but first, tax revenues. the ap reporting the biggest tax shortfall since the great depression. that means the country's piggyback is literally running out of cash. that is bad news for a president who is looking ahead to health care reform, stimulus, cash for clunkers, and other programs. james rosen has been getting the details for us. some on the numbers -- are they as bad as they look? >> in a word, yes. the associated press studied government tax receipts dating back to 1913, the first year

there was a federal income tax, and found we are on current pace of this year to exceed the least amount of government revenue in taxes since 1932. take a look at some of the numbers. total tax receipts projected to be down 18% this year. individual income-tax receipts projected to be down 22% over last year. corporate income tax receipts for the government projected to be down by more than 57%. and it does not just affect health care reform. it could also speed up the date that social security becomes insolvent. martha: those are big numbers. at the same time that we are hearing about these shortfalls, we also see a deficit in the bipartisanship surrounding health care. [laughter]

>> particularly on the republican side. one of the negotiators working on reform said yesterday, he is not going to be held to a september 15 deadline to cut a deal with his fellow negotiators. then charles schumer who sits on the senate committee said on a conference call that democrats would be willing to use certain parliamentary tactics to get things done by the end of the year, whether the republicans like it or not. it is usually only used in budget matters. we caught up with john gregg of new hampshire who indicated that republicans will not be letting the democrats use

reconciliation. all of this, if a bipartisan bill cannot be crafted by september 15. martha: it does not sound like reconciliation at all. [laughter] and again, some opposition from democrats against nancy pelosi? >> house democrats were able to get an individual version of their health care reform. henry waxman had to make some deals with fiscally conservative democrats on his panel and that infuriated the far left side of the party. they have written to nancy pelosi today to register their displeasure with the waxman version. they wanted to make sure that --

the letter goes on to say -- there are 60 members of the congressional progressive caucus, congressional black caucus, hispanic caucus, that agree with this sentiment. martha: very interesting. thank you, james rosen. trace: the bottom line is, revenue is down, spending is up, and the president says he will not raise taxes on those making less than $250,000. how about some context and perspective? in 2000, american making to the thousand dollars or more had a grand total of $930 billion in taxes. even if you tax those making $500,000 more a year at 100 pullet -- 100%, that only brings

in another $1.30 trillion. still not enough. in order to fund this budget, which is $4 trillion, the government would need to tax all americans making $75,000 or more at 100%. let me bring in a former deputy assistant director for tax analysis. the math does not add up. you cannot not tax and continue to spend this way. >> the numbers do not add up. you have to dig much deeper. spending in 2010 will be higher than subsequent years because we have the stimulus bill still in place, and would be spending more money than in 2011, 2012. trace: you cannot just tax the rich to balance the budget.

if they are unwilling to cut spending -- you have health care which is going to bring the bill up, 2nd stimulus -- what is the answer? >> and during the campaign, we analyzed both parties bills. we said president obama would be running a deficit. we said that was unsustainable, but the president followed that through the campaign, just ask senator mccain was also suggesting even larger tax cuts. so neither candidate was honest about what would happen. what we need to do is get ourselves through the current economic situation but not by the ourselves to a situation where we cannot raise taxes in the future. that is one problem for the president right now. he has promised not to raise taxes for those people making below $250,000 a year.

martha: what you just said sounds like what the white house said they would not do, until we are out of the ones economically. my question is, can we get out of the woods economically, without feeding that revenue base? >> what you want to do now is deficit spending, accelerate the economy, boost spending, and that will help the economy recover. but what do you do after? we know that we have lost revenue. what do we do in 2011, 2013, when the economy recovers and we still have a deficit problem? martha: we will see how that goes. thank you. once the leader of the free world, now a man on a mission in hostile territory. former president bill clinton is

walking down the steps, touching down in north korea. a diplomatic quest to work on freeing two american journalists being held. laura ling and euna lee lee. . they were accused of crossing the border illegally and sentenced to 12 years of hard labor. the stunning photographs we got today is proof that the two were together, as well as an extremely rare look at the north korean leader. we have not seen pictures of him for awhile. jennifer griffin is at the pentagon. you call him the strong man, and he had done a lot of things to agitate the white house, but he looks very different from the last time we saw him. >> it is interesting. bill clinton will have been the

highest ranking official to meet with kim jong il, and he will be able to comment on the state of his health food. -- health. it is also important to point out that president clinton is carrying any sort of message for kim jong il or the north koreans. he is not there to negotiate about the nuclear program or to get them back to six-party talks. that is not the way it is being represented in the korean press. here is what the state news agency said today. at the meeting place, bill clinton -- that is very different from the where robert kids described it.

martha: it certainly is. -- robert gibbs had described it. he went to great lengths to say that there was no linkage. we have seen a number of things come from the rove nation, but what about the risk of sending bill clinton over there to have these discussions? >> very risky. look who greeted him when he landed, the chief nuclear negotiator, the finest foreign minister. -- vice-foreign minister. it is clear the north koreans are going to want to use this as a propaganda coup. you can guarantee the iranians will be watching to see what the americans are willing to give up, because of course, they are

holding three u.s. citizens right now. martha: thank you very much. we will talk more about bill clinton and his reemergence on the international scene and what it may mean for him politically. that is our question of the day. do you think president obama should ask more of bill clinton's advice on the big issues? foxnews.com/livedeskblog. you can also twitter us. trace: cash for clunkers, its fate may be sealed by friday, but what happens to those cars after they are traded in? (announcer) big news for stiff joint sufferers.

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martha: is reining in louisville, swamped under 6 inches of rain. -- is reining in the louisville, swamped under 6 inches of rain. not a great day there. in the middle box, we have been following this bus crash at a synagogue that was being used for a summer camp. the driver put the school bus in reverse and ran into the side of

the synagogue. about five children were taken away in stretchers to the hospital. in the bottom box, the obama administration refusing to release the records on how all of this is working in cash for clunkers. the latest word is president obama wants to billion dollars to keep the program going. harry reid said that he has put forward a bill that would extend the program. that could happen in the next few days. trace: so you drain the oil and that until the engine with two quarts of liquid glass. that is marching orders for mechanics coast to coast, getting rid of the cash for clunkers vehicles. it is designed to make sure that those cylinders never see a spark plug again. this drive to train destruction is from a chemical.

if you are a doctor, you would have a hypocritical if. isn't there such thing for mechanics? you are usually fixing these things, but now you are destroying them. how do you feel? >> mixed emotions. some of the thing that we get are too nice to destroy, but in order to keep up with the program, we need to do this. trace: "popular mechanics" came out with a good article saying that a lot of these cars that we are destroying our perfectly good, and could benefit a lot of low income families. >> we have had some people calling in, asking -- they often do donations about cancer for

kids, but we had to disable that. trace: what is the process for this chemical? >> once you drain the oil, you poor in this chemical, start the engine, and after a few minutes, once the chemical -- 240 degrees, it starts to solidify into actual glass and it plugs up all of the oil passages, oil pumps. then everything seizes up. martha: it sounds like a little animal dying on the table. [laughter] >> that is a harsh way to put it. martha: it seems sort of wasteful, a counter intuitive when we are trying to recycle everything. it is a lot of the car being recycled? >> yes, and lot of the card is

being recycled. just not the engine components. there are a lot of people who still have these cars that cannot or will not trade them in, but they are in bad shape, so this will give the opportunity to salvage yards to sell some components and maybe improve the quality of some cars. some of these cars really are not safe to drive anymore, so it is a good idea to get them off the street. trace: i am thinking if a camaro rolls up to your lot, you are going to take it home instead. >> that would be so hard. once the paperwork is signed and the vin number is submitted, we need to take it off the street.

trace: we appreciate it. thank you. martha: the police say it would have been the worst terror attack in australia's history. luckily, it was a foil before anyone was hurt. now we are learning more about the plot that four men planned down under. (announcer) the same rapid response you expect

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trace: take a look at the top box. that is a look at the white house briefing room. you think yesterday was he did? wait until you ask -- until they ask him why they did not release the numbers from the cash for clunkers program. more information about that homegrown terror ring busted in north carolina. they say that muslims must be protected at all costs. in the bottom box, a maritime drilled taking place in new york city. the goal is to keep the city protected from a nuclear device. 17 different vessels will be taking part in the exercise. martha: it could have been the deadliest terror attack in

australia's history. right now four men are under attack, accused of plotting an attack at an australian military base. investigators say the group had ties to the somali-based al qaeda terrorists. >> their intention was to go into the army barracks and kill as many soldiers as they could be for themselves. potentially, if it was allowed to be carried out, the most serious attack on australian soil. martha: we have someone from australian news. what exactly were they planning and what were their capabilities? >> as you said, there is only one word to describe this. it was a plan of terror. they were going to go in there, armed with automatic weapons,

and kill as many people as they could. police say they were prepared and equipped for a link the gunfight. we saw how effective that was last year when terrorists attacked a hotel in mumbai. they would have faced well- trained troops, as well as australia's anti-terrorism force, so they would have had a tough time. martha: they got these guys, but how many others are there out there? >> there are concerns disaffected muslims could be tempted to join these groups. we have these five men arrested. all of them were in their 20's. the first man who was called today refused to stand in front of the judge. he refused to stand in front of him, only god.

martha: quickly before you go, how did they figure this out? >> authorities were able to intercept and read some other text messages. they read some news that a suicide attack was imminent and they moved. 400 officers had 19 locations and made these arrests. martha: fantastic police work on the part of these police. thank you. trace: we have had very mild weather in the tropics so far this year, but take a look at this. two topic storms have formed in the boat -- pacific ocean.

felicia and enrique. you can see coaster we got off to the corner. that is about 1,200 miles away from felicia. enrique has sustained winds of 60 miles per hour and could become a hurricane within the next 48 hours. we will keep you posted on those storms. back in 2008, bill clinton worked hard to put his wife in the white house, but now he is working for her in a different capacity, spending the summer in north korea. so what else could he helped the white house with? quality and reliability...

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trace: brand new information on three big stories. shannon bream is on capitol hill, following the confirmation process of sonia sotomayor. >> it will not begin until a few minutes, but things are already heating up. mitch mcconnell actually took the floor this morning to warn fellow senators about this idea that sonia sotomayor main judge, and and that the standard. he said the only way that could be a good thing in the courtroom is if you are a party that the judge has empathy for. we will be hearing from the senators later today. trace: now to miami, where environmental groups are buying up real estate. orlando salinas? >> it is a land buyers market here in florida, but the problem is a lot of folks do not have the cash.

investors can not pay their bills right now, so they want to unload that land. developers do not have the cash either, but conservatory groups are looking to make those guys. so far this major group says there are working on 60 deals so far. trace: thank you. now breaking news at the weather center. tropical storms in the pacific. >> they are not going to affect anyone, but interesting that we have two tropical storms. the first one is the lead shot. -- foley shep. henry k. -- the first one is felicia and the second one is named enrique. martha: this is a fox news alert. we are awaiting the daily briefing to get underway at the

white house. robert gibbs will be taking the podium. major garrett is standing by. there is certainly a lot to talk about. we will find out exactly how cash for clunkers is working. what else? >> we will be looking for what bill clinton did or did not do in north korea to win the release of these two journalists being held. the white house denies that former president clinton delivered any kind of message from president obama. we will try to get as much from robert gibbs on that. cash for clunkers is a topic of conversation now because there is some concern about the funding. senators are hoping to get funding for that. of course, healthcare will also be a big topic. martha: thank you.

the former president postelection to go to north korea -- the former president's decision to go to north korea making news today. two journalists were arrested and sentenced to hard labor in june. but the fact that the obama administration chose to allow the bill clinton to be the one to do this certainly may show that they are warming up to the idea of having him be more involved. tina brown recently wrote about the relationship, saying -- martha: but he also tried to

drum up support. once again, bill clinton involved in health care, so is he resurfacing in a stronger way right now? with me is a former adviser to senator john kerry. we also have a former speech writer for george bush. mary ann, do you see this as significant, bill clinton being brought to the fold? >> yes, for two reasons. it is brilliant, because he provides the stature that only a former president can provide, and if he is successful, both of them look good. if not, only clinton looks bad. the last time we had peace and prosperity and the last time we dealt with health care was under clinton. now here we are without any progress. that was the last time we had

decent relationships with north korea. i think he brings quite a lot to the table. martha: i want to bring up another quotation from tina brown -- she goes on to say this -- mark, is that changing? >> i agree. i do not think he will be involved in these other debates. i think, frankly, kim jong il chose him, not barack obama. they told the families of the two women being held, that they would hand them over to bill clinton.

this is a regime who was testing intercontinental ballistic missiles, nuclear weapons, and now they have the former president sitting with kim jong il, getting photographed. i think it will be limited. martha: mary ann, you cannot help but think about the struggles of the president has. he has rahm emanuel who is working hard in the capital, but do you see a place where bill clinton could have a back door advisory position? any chance in could become something more? >> this could be the test. here is the reality. there are not a lot of people who know what barack obama is going through. the first person who even begins to know is bill clinton. if he handles this assignment well, there might be other opportunities as well.

you do not want to be overshadowed by a former president, but i do not think that will happen, and president clinton has quite a lot to offer. trace: take a look at the dow jones. did you know there is a fascinating link between presidential approval ratings and the stock market? based on how president obama is doing, should you buy or sell? and the tropical fish that could hold the key to saving your hearing. that brings us to our fact of the day. which animal has the best hearing? es an entirely new way to celebrate any moment. fancy feast appetizers. simple high quality ingredients like wild alaskan salmon, white meat chicken, or seabass and shrimp in a delicate broth,

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martha: during the campaign we heard a lot that it would be a no drama obama white house. now we are hearing about some drama from the treasury secretary.

tim geithner apparently went off on top u.s. financial regulators. a person familiar said that he launched a curse-filled craft, demanding that regulators thought their turf battle over their regulatory overhaul. ben bernanke, mary schapiro, and sheila bair were among those in attendance. trace: there is a weird correlation between presidential approval ratings and the stock market. if the president is doing well, the stock market dips, and if the president is not doing well, the market rallies. we are now seeing that. mr. obama's poll numbers were down 54% in the market was up 15 points. if the trend continues, it could

be big news for investors. dating back to 1959, whenever a president's approval rating slipped below 50%, stocks rose an average 9%. eric bolling, what is going on here? >> that march 9 low, obama approval ratings, down 18%. right now, the market is starting to take off. he is running into a headwind with cap and trade, national health care reform. as that becomes less of an

issue, less of a pressing issue , stock-market investors get back into the market. trace: if approval ratings go down to about 38%, the stock market actually starts to go down. you do not want the number to go down too far because you would lose confidence. >> the best news for wall street seems to be around 50%. trace: the dow went up 115 points the other day. we have all of these government programs that are not working. what is your prognostication? is it going to go up and down? >> perhaps this could be a reverse indicator. i would not suggest that people jump into the market with both feet right now, but long term, it is not a bad idea. trace: thank you, eric.

martha: this is fascinating. could zebra fish and the integral to during hearing problems in humans? you have a small hair follicles in your year. if you lose them, they do not regenerate. in these fish, they do. researchers are hoping that they can trigger battery growth by discovering genetic triggers. they are developing chemicals that can protect hearing for certain patients undergoing treatment, like chemotherapy. that brings us to our must see fact of the day. the animal with the best hearing? the barn owl.

it's a hearing is so acute, it does not need eyesight. it can hunt with its sound alone. it is able to locate a mouse a quarter mile away. trace: when was the last time you send a letter to a friend? not an e-mail, a good old fashioned letter. do you remember that? it is a snail mail on the verge of extinction? why changing times could make or post office go bye-bye.

trace: in the top box, we are still awaiting the white house

briefing. when that begins, we will bring you news. in the middle box, and tropical storm now foreman off the coast of the mexican coast. the national hurricane center is tracking felicia and enrique. both of them could become hurricanes in the next 24, 20 -- 48 hours. in the bottom box, polygamist leader warren jeffs, remember him? now apparently they are having to force him to eat. he is on a hunger strike. apparently it has been awhile since he has had any nutrition. we will keep you updated. martha: first, technology did away with the typewriter, so it is a snail mail headed for a similar fate?

with more and more people turning to the internet to stay in touch, the u.s. postal service and loses billions of dollars in business each year, and now we are hearing hundreds of facilities could get the axe. >> the postal service may have to close your local office because the agency could be $7 billion in the red this year. roughly 700 stations are on the list for possible consolidation, but the agency says maybe 300 of them could be shut down. no changes are expected before the fiscal year ends september 30. they are also considering reducing service from six days a week to just five. some in congress have concerns. >> it seems to me cutting back on service will only cause the postal service to lose more business and more customers.

i am going to be asking a lot of questions about that proposal. >> the post office says that reducing services is a last resort. they say they have already cut costs aggressively, the limiting 14th supervisory and management positions, offering early retirement, cutting 50 million work hours, selling 10,000 vehicles, and instituting a hiring freeze. and is not just e-mail putting a dent into their budget. the recession is also part of it. what you considered junk mail helps the post office pay the bills. martha: we want to give you a live shot of just outside the white house. there is christopher dodd, charles schumer. the senate just finished a health-care lunch with president obama, trying to figure out how

to get this through before the august recess. we are going to speak to a senator in a little while to get an update on this. we are keeping an eye on that. by the way, president obama is the most fit person who eat french fries. every time they eat -- trace: bill clinton in north korea to negotiate the release of two american journalists. we ask you if president obama should be asking bill clinton for advice. here is what you said --

martha: and the white house is now texting -- taking on texting. you remember in the seat belt rule? texting may be next. some big moves are coming through on this important issue. we will be right back. poor leg circulation. doctor says it's p.a.d. peripheral artery disease? hmmm. more than doubles your risk for a heart attack or stroke. so i hear. better ask your doctor about plavix. plavix can help protect you from a heart attack or stroke. plavix helps keep blood platelets from sticking together and forming clots, the cause of most heart attacks and strokes. my cousin the m.d. call your doctor about plavix. (male announcer) if you have a stomach ulcer or other condition that causes bleeding, you should not use plavix.

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[captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- trace: brand new stores and breaking news this hour. we begin with a battle brewing between a possible website and the white house. they posted a video club going back to 2003, along with the headline, uncovered video. obama talks about how his health care to eliminate private insurance. now the white house is firing back, arguing that the video was taken out of context. molly henneberg is watching this from washington, d.c. >> the white house says it has to be back the campaign of misstatements and falsehoods about what president obama wants from health care reform. this all stems from a youtube video showing short clips that

the president had said going back to 2003, talking about single payer health care, meaning paid for and run by the government to help cover the uninsured. here is part of the video. >> i do not think that we will eliminate the employer coverage immediately. there is potentially a transition process. i happen to be a proponent of single payer. single payer universal health care plan. >> the white house is fighting a video with the video with a former abc correspondent who now works for the white house, showing the link and calling in disinformation, saying that the creators are trying to scare people. >> there are people out there with a computer and a lot of

free time and they take a phrase and make it sound like he is saying something he did not really say. here is a club they will not show you. >> if you have insurance you like, then you will be able to keep and that insurance. if you have a doctor you like, you will be able to keep your doctor. >> that is what the president has been insisting in every speech. what his critics say may be true for the long term, but they fear that a government-run plan would put private business -- private insurance out of business. trace: thank you. martha: so many times we have reported on horrible crashes with the driver text messaging. we have all been guilty of this. now the government is ready to

do something about it. transportation secretary ray lahood coming up with a way to combat this dangerous problem. listen to this. >> when we are done, i expect to have a list of concrete steps announced. the bottom line is we need to put an end to a un safe cell phone use, typing, and other activities that require drivers to take their eyes off the road. martha: catherine herridge is with me. where are they specifically going to go with this? >> they both have a summit next month in washington, bringing together transportation department officials, safety experts, congressional members, and academics who have releasery

studied the risks. martha: how are they going to enforce it? some states already have it. either you have a pretty hefty fine, or another consequence. what are they talking about? >> the secretary foresees a two-pronged approach. education and consequences that have real teeth. one solution musthey spoke abou, they related the problem too drunk driving, as well as wearing seat belts. that seems to be the strategy they want. there have the education on the one hand and another consequential campaign. you know in new york city cab drivers were not using their

cell phones. initially, they saw a drop in that usage, but without much enforcement, those numbers went back up. martha: so often you do not realize that they are talking to someone else. that is an important development. thank you. trace: for more on this, we have the communications director for the governor's highway safety association. one of their solutions is some enforcement with teeth. this is pretty difficult to enforce. how can you prove that they were texting? >> it is extremely difficult, and even more so at night. we need to be able to enforce the law, and not the public know

that we are serious about it, and that they will receive a ticket if they commit these unsafe practices. we believe this is a good first step. trace: people are equating this with drunk driving. is that too severe? the driving cost thousands of lives, and texting does not seem to be in that category. >> it is a new problem, and we are not very clear about what the best countermeasure would be to address this. we know a drunk driving is a serious problem. we have made serious progress on this. the public is with us on that, unlike texting. we do not really like that comparison. trace: i am looking at one of your talking points and you say we need to make this acceptable

in society, much like drunk driving. the question is, do we have part numbers on how dangerous this really is? i know it varies from state to state, but is there any empirical data? >> we have research that shows it increases your chance of the crash by 23 times. about only half of states right now include data on their forms talking about texting. that is one thing that we could talk about now. getting better conclusions from research studies. martha: thank you. we wanted to show you this, president obama saying happy birthday to helen thomas. it is also president obama's birthday. >> happy birthday to you.

>> you have to blow it out to make it come true. >> can we sing happy birthday to you? >> can you tell us your birthday wish? >> helen wishes for world peace. she and i also have a common birthday wish, a reformed health care bill. [laughter] i will leave it up to you how you want to eat your cookies and cupcake. >> that is so kind of you. >> thank you. martha: you know the president

cannot do that without getting some questions. that was a pretty cute moment. helen thomas still going to work every day. 89 years old today. she has covered more presence than anyone. she has that revered seed in the front row. -- seat in the front row. happy birthday to her and the president. we also want to tell you in the past couple of moments, harry reid made a statement. he said cash for clunkers will pass. in other words, the to the -- the $2 billion than they need to keep it going -- after the program ran out of money so successfully, depending on how you look at it.

so they will be getting $2 billion more. he says it will pass. now the senate needs to approve the money. have you seen this flooding? i was looking at some of these pictures from louisville, ky. the city received 6 inches of water in one hour. take a look at these pictures. those people are waist-high. we are going to speak to the mayor in a couple of minutes to see what they need.

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trace: the housing market apparently showing signs of life. the national association of realtors saying the number of previously owned homes rose for the fifth straight month. the number rose 3.6% to 97.6 in june. construcon numbers also getting a boost. as part of our road to recovery series, we look at the timber business. what about car sales? we are in washington and

roswell, georgia. we are looking at wall street in the bottom box. we begin in washington with dan springer. >> it is a busy lumber yard. let me introduce my guest, ron smith, the president. you were painting a bleak picture about the industry. perhaps no other industry is harder hit by the bad economy and lumber. what is going on now? >> we are not laying off anyone else now, but at the same time we took wage cuts. it feels like the market could be at the bottom. when we think the market is coming back, it dropped off again. in the past few weeks, everything seems to be getting better. pending home sales was better.

that gives me encouragement, it helps. we will see if it continues. >> we are seeing an interesting trend in the size of homes. for the past decade, homes have been getting bigger. what about now? >> i think people are looking more closely at what they can afford. builders we come to say that they are building houses that are about 10%, a 15% last square footage. >> so houses are actually getting smaller? >> it seems like it. that would affect us directly. it has an effect, but we just have to see how it plays out. >> again, some signs that the bottom could be around the corner.

at least we have not had any more layoffs here. before, we were talking about layoffs and that they have had. -- that they have had. trace: thank you. now to marianne silber who is that a car dealership. >> there was quite a bit of celebrating. they just heard from harry reid saying that he expects to put more money into the program. i am with the chief financial officer for this automotive group. you were looking at a pretty tough year in terms of sales? >> that is right. we saw a big improvement with this cash for clunkers program. >> we talked about how this

helps you, but what are you predicting as far as sales? >> we look at this month to month. the economy is a big factor. cash for clunkers being extended will help us through august. hopefully, it can go through september as well. right now we are just going month to month. >> you mentioned something that i want you to talk about. all of the tax revenue that is being produced by all of these new car owners. >> that is one of the overlooked facts. sales tax revenues with local governments, state governments. there were 250,000 car sales on the first day and all those car revenues will be going back into the government, and they are often overlooked. some of those counties are really hurting for tax revenue, and that is helping them as well.

>> pretty exciting news at the dealerships. " they should continue to see people come in and out of the alycia -- they should continue to see people come in and out of their dealership. trace: thank you. brand new video just into fox news from louisville, ky. cars underwater, buildings submerged. the flooding caused major traffic jams. the storm also came down with marble-sized hail, high winds. with me on the telephone now is the mayor of louisville. the concern is when you get that much rain in that period of time, you have to think about

flash flooding. >> let me correct you, 6.5 inches of rain in one hour. that is the most it has ever fallen in recorded history and this community. folks are having difficulty getting around. the university of louisville, where buildings are completely surrounded, we have had to send in a couple of swift water boats to do some rescues. we even have our animal shelter. all of them are in jeopardy. we are trying to find shelter for them. it is difficult, to say the least. trace: we are watching some rescue teams go around. any word of anybody trapped? we see some instances of water being above car windows. >> people have driven around the

barricade, going into the lower areas because they think they can drive through. then we need to go in, rescue them, and then arrest them accordingly. trace: we saw them walking around, using a stick to see where the road is. how much cleanup is they're going to be? it has to pay a horrendous task for you. >> i am standing in the library where the first floor has about 4 feet of water. all of those books are ruined. now it is raining again. they are talking about another inch. it looks like a torrential downpour right now. we have a lot ahead of us. trace: good luck to you and your

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trace: getting some breaking information concerning a horrific automobile crash last week in westchester county, new york. eight people were killed. harris faulkner is following this for us. >> you are looking at pictures of the crash from july 26. now we know some disturbing details about what was happening with the driver. the prosecutor in new york saying today that he intends to proceed with a case based on the medical examiner's report that just found her blood alcohol level was twice the legal limit, and the autopsy found that she was imperiled by marijuana. remember, her 2-year-old child and three nieces were killed in the crash, as well as the three individuals in the s.u.v. that

she hit. the only survivor was one of her children, a young boy. he was the only one to walk away. new york prosecutors saying they will move forward on this. she was driving on the wrong way. there are so many questions left, but the prosecutor is now saying she was impaired by marijuana and alcohol. trace: thank you. martha: we are learning more about the plans to put dozens of guantanamo detainees, 229, on trial in the u.s. is is complicated. they could be facing judges in washington, d.c. or new york. there is also talked about multimillion-dollar upgrade to

two facilities. one at fort leavenworth in kansas, and one in michigan. of course, some hate the idea of bringing the suspects here. others believe that we need to bring them here. with me now is the mayor of lansing, michigan. i also have a former attorney. we also have a fox news contributor. >> we house murderers and rapists. we have well-trained, well- equipped corrections officers that can do a good job. the concern they take care of these individuals. these are professionals. unfortunately, with michigan's economy, we could use a shot in the arm. this is something we are prepared to do. as long as they are going back to their country after serving time, we are well-equipped, and

ready to go. martha: i understand your argument completely. also, as we were talking about in the break, i believe we have the capability to keep them in prison. the problem comes when you try to prosecute them in the country. the way a lot of the information must gleaned, it was gotten from methods that were not allowed. >> we could be talking about permanent jobs here guarding these people, and then where do you try them? do you tried them in the same complex as the prison? do you build a special court room? that is one proposal under consideration. martha: is that a good idea? >> experts are all over the place on this. some say that if you are in a

rural area and you need to have these trials, what about the jury pool? others say, what about the visitors? are the families of those victimized by these terrible terrorist attacks going to be able to attend the trials? these are all the unanswered questions and will be determined by where we put these facilities. martha: steve, i know that you feel like not much will happen. do you believe that the administration will leave this subject until next year? >> i think guantanamo must they open for a couple of years. we hope that the president would put forward a comprehensive plan here. but let me point out a couple of problems with some of these plans, if they came to fruition. if they were tried in federal district court, most would be

for pre-9/11 offenses. most of their confesseions based on 9/11 would be held back. martha: that has been discussed. prior crimes before 9/11 might be prosecutable, based on the way that information was gleaned. >> yes, but in many instances, those patterns of abuse are before these issues. what is president obama wants to close guantanamo because it is a symbol of inhumanity, -- martha: he would reserve the right to

keep them detained indefinitely. >> these federal issues, i do not know about that. the bottom line is, why do we need to pay these federal contractors million dollars when we have people hurting across the country? i did not think either of these people were tied to 9/11 crimes. the bottom line is, we are capable of doing the work. where you hound them is immaterial to all the other legal issues. >> mount where you house than it is important. if you brought them here, they would have full constitutional rights. martha: i know that we could keep going on this, and we are going to. thank you for joining us today. trace: breaking news from north

korea. we told you bill clinton met with kim jong il. now there is breaking news about the two journalists he was working to free le. the same is true with bath tissue too. introducing new charmin ultra soft. its new ultra soft design is softer than before. and it has so much absorbency, you can use 7 sheets vs. 28 of the leading value brand. so your family can get more mileage out of less. [ horn honks ] new charmin ultra soft. america's softest bath tissue.

trace: breaking news on "the live desk." we have confirmed that former president bill clinton has met with the imprisoned journalists euna lee and laura ling, being held in north korea. jennifer griffin is at the pentagon. >> u.s. officials have confirmed to us that president clinton did meet with the two. there is no report as to the condition of the journalists, whether they met him at a hotel or if they were in prison. there is the possibility that they are already on a flight back to the u.s. it is about 3:00 in the morning in north korea right now. in the original plan was

president clinton would be returning tonight. it is possible they have already left, but we can confirm that president clinton met with the journalists. the reports and information is somewhat sketchy. pentagon officials are not commenting on this. basically, the white house said they do not want to comment on it because they do not want to jeopardize the chance of it succeeding. trace: thank you, jennifer. thank you. in the meantime, brand new information on two other stories. shannon bream is at the russell rotunda, covering the senate debate concerning sonia sotomayor. >> it was very friendly on the senate floor earlier today with democrats and republicans thinking each other for such a

cordial hearing. but now it moves to the full senate for a debate, and you can expect the gloves are going to come off. this is the final hurdle for nomination and we expect that she will be making history by the end of the week as the first hispanic justice. trace: mike emanuel is also with us, following cash for clunkers. >> democratic senators have asked for $2 billion more for cash for clunkers. harry reid said that they would get it done before the august recess. when asked if he had the votes, he said yes. trace: thank you. one of the senators who sat down for lunch with president obama is democratic senator dennis that banal of michigan. she is with me now. -- debbie stabinaugh of

michigan. with this program, it is giving a big boost to car companies. but what are we giving more money to car companies and excluding other businesses that are hurting as well? >> as a senate sponsor of cash for clunkers, it was not just about the auto industry. of course, that is important to me, and being in michigan, that we have auto dealers across the country. my father was an oldsmobile car dealer, so i understand how important auto dealers are to each city. these are predominantly small business owners trying to help consumers, giving them the opportunity to turn in a less fuel-efficient vehicle -- trace: but senator, a lot of

people are saying this is not really generating sales. it is simply motivating people to buy cars. when this goes away, when the program goes away, sales are going to fall off again. >> the problem is, there is no indication that is going to be true. people have not been able to buy a car for many reasons, perhaps maybe because they did not have a job. in the last year we have seen a huge falloff in auto sales, which is why we have seen on a company is in great trouble. it is not that people were going to buy anyway. this is a chance to help people get a new vehicle -- trace: i hear you, but there are people who cannot afford a new car, and they rely on used cars.

by helping some people, aren't you hurting others? >> i do not think so. first of all, the used car market has been going up in price because people cannot afford to buy new cars. at least in my state, prices for used cars have been going up. the bottom line is this -- we put in a first-time home buyer tax credits to help the real- estate industry. the next biggest purchase you make is your automobile. the same thing is true. trace: we have breaking news. we appreciate your time. are you ready to dive in? we go behind one of the most anticipated weeks in television. shark week.

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trace: we have shark week coming up. amazing pictures coming up. first, studio j. martha: what do we have coming up? >> bill clinton does not go to north korea to pick up a couple of journalists without getting those journalists. you know that, right? he would not go just on a maybe. so what is north korea getting? martha: perhaps he has a bit of legitimacy on the world stage. >> i am wondering what they got. we have the deputy director at the center of international strategic studies.

i think the journalists are coming home, otherwise bill clinton would not have gone there. i do not believe they are doing that. have you heard about this study with kids and oppression? kids as young as three years old diagnosed with depression, and they are giving the medication. martha: hound you even know you are depressed? >> you do not even know how old you are. we will have a doctor with us to explain how they died no such things. that is like saying a 14-year- old boy is add and hyperactive . martha: of course he fidgets, he is a 14-year-old boy. trace: it is going to be great. it is the week viewers fear.

shark week on the discovery channel. our next guest knows all about this. he is featured in two productions. he is the discovery channel shark adviser and a director of phylon travel programs for the national aquarium. every year it gets better. >> hd has brought a lot to the table. these charts in hd is incredible. -- sharks in hd is incredible. we kicked off in the week with a story about 1916 shark attacks. tomorrow we have great white appetites. then i am featured on thursday night.

trace: i saw that one a few nights ago. it was some island off the coast of south africa? it was unbelievable the video. shark week 22 years ago was okay. now it is must see tv. >> certainly, with the advent of technology, we have been able to do much more. we are using night-vision technology as well. it has really helped our ability to film. trace: every year you get bolder and bolder. i saw a guy holding on to a whale and the sharks were chomping on it. humbled can you get? >> certainly, -- how bold can you get? >> certainly, we are staying

safe. there are less than 100 shark attacks worldwide per year, and my hope here it is to present a good product. some people will be scared, they want to see a story about jaws. some people will want to learn about their biology. hopefully, we will be able to teach them something new. trace: kids that i talk to will not go near the water. you need to educate kids and give them some sort of context. you are probably better off going down a flight of stairs -- >> that is right. all of my experiences with sharks have been great, since i was young. you look at the generation that grew up on "jaws"and they are hesitant to go in the water. the upcoming generation are more

aware and educated. trace: thank you for coming on. speaking of fish, and the little fish that could be a big key to a medical breakthrough. we will tell you what it is about one fish that could reverse hearing loss in the humans. . 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. are more than words here. it's personal. i have diabetes. rodney's kid too.

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martha: this is an exciting medical breaknow for the millions -- breakthrough more those who suffer hearing loss. scientists say zebra fish grow cells similar to the ones that allow human beings to hear. the big difference is that zebra fish can regenerate those cells. in humans once you have the hearing loss they don't regenerate ever again that means that part of your hearing is gone. legalities bring in the managing

editor -- let's bring in the managing editor of foxnewshealth.com. >> this is the biology that is being utilized in the field of regenerative medicine. the little fish has these hairy cells. we have those hairy cells in our inner ear. but when we take medication or have some sort of medical problems, we kill those cells. and that's irreversible so that's why one in 10 americans have some sort of hearing difficulty. so the science here is looking at the stem cells of this little fish. and if you're able to find the mechanickism that makes the -- mechanism that makes the stem cell regenerate, maybe that technology can be applied to humans. otherwise hearing aids and implants, but it doesn't make up for the replacement of those cells that once they're dead in humans, they don't come back. martha: do you think it's an evolutionary thing that there are a couple of animals can

regenerate their hearing. that they need it so much and americans -- americans. humans don't, you know, through loud noises and drugs, as you say? >> i think the exposure in the human race is far greater than the animal kingdom so we probably lost that gee regenera. that's the future, where you take stem cells from your body and sort of re-engineer them and hopefully make kidneys, eradicate diabetes by creating pancreatic cells. and hopefully with the technology, they're going to be able to regenerate these hairy cells. martha: how long does that take? >> a long time. you're talking about millions -- not million dollars. trace: that's the frustrating thing. all of these studies, you think oh, this is going to happen some time in the future. what about me? my hearing's going will it's going. >> maybe not you but maybe your grandchildren. we will have it ready when your grandchildren. martha: in the meantime we'll be

going, what? what did you say? trace: they'll need something because the deficit will be so bad by then. i don't want to hear it. we have breaking news. there's apparently a robbery standoff going on right now in miami-dade county. that's a live look from our fox news affiliate down there, wsvn. we'll give you the breaking information on this next. this is one way of getting vitamins and minerals. this is another. new total blueberry pomegranate cereal gives you 100% of the daily value of 12 essential vitamins and minerals. plus the bold new taste of blueberries and pomegranate with crispy whole grain flakes and crunchy oat clusters. total, a truly delicious way to get vitamins and minerals. how are you getting 100%? visit totalcereal.com and get a free sample.

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trip to trip to still following this breaking news out of miami-dade county involving this robbery standoff that's going on right there. wsvn has a live ticket. tim what do we know? >> as you said it started at a food market. i don't have the name of the market. we have reports there's a possibility an employee was shot. police chased at least one, maybe two, suspects into this home, 221st street. we heard a report. i was waiting for ralph, the expert in sky fox down there in miami. he usually gives the play-by-play. he's listening to the police scanner. there was a report that these suspect may be ready to give themselves up. but no action yet so a tense standoff. we watch and wait. still no word on how many suspects are inside that home. trip to trip to thank you. martha? martha: thanks for watching. we will watch that break story and join you tomorrow. [captioning made possible by fox

news channel] captioned by the national captioning institute -- www.ncicap.org -- shepard: thanks. president bill clinton, the former president, meeting with north korea's lead tore try to seal a deal over the possible release of two american journalists. and the question today, in the middle of a nuclear crisis between the two countries, what might the north koreans get in return? perspective coming up. first, from "studio b," three boxes full. box number one, terror suspect in court in north carolina. seven men accused of plot ago tacks overseas. -- plotting attacks overseas. judge napolitano says this could be a very weak case. we'll look at the evidence. in box number two, texting and driving. why the obama administration says it could soon be illegal everywhere in this nation. and box number three, rain that won't stop, shutting down parts of louisville, kentucky. folks stranded along flooded streets.