--www.ncicap.org-- jon: and janice dean is keeping an eye on hurricane bill. jane: "the live desk" is up next. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- trace: this is "the live desk." juliet: i am in for martha maccallum. trace: this is the national desk. they cover america. this is the foreign desk, covering the globe. every picture that comes into fox news channel comes through the media desk. here on "the live desk" those pictures will always be on the right-hand side of the screen. juliet: in the top box we are waiting for president obama to begin speaking in phoenix, talking about the wars in iraq and afghanistan, and as we wait, the health care debate

rages on. the president last week said that a public option is an absolute must in any health care bill, but now the white house could be changing its tune. and an update on a story that we broke. e-mails from the white house going to people who never asked for them. now the white house is responding. in the middle box, a tragedy in the sky. fighter jets colliding as they rehearse for an air show. in the bottom box, hurricane season is in full swing. the florida panhandle is dealing with the aftermath of the claudette and now hurricane bill is picking up strength. trace: we begin with health care and the question over president obama's plan for health insurance is dead or alive. there is talk of it being off

the table. first, health and human secretary -- services secretary kathleen sebelius said that the public option is not essential for reform. this would be a major change into from the president said last month. >> any plan i sign must include and insurance exchange, the one stock exchange where you compare the benefits, costs, and track record of a variety of plans, including the public option. and then you can choose what is best for your family. trace: major garrett has the news for us from the white house. there seem to be some backpedaling going on here. >> when the white house began shifting its message from health care reform to health insurance reform, it appears this government-run component became a casualty.

the president on saturday said, essentially, this was not mandatory in any final product. on sunday, kathleen sebelius, like every other cabinet member, is given points to talk about over the weekend, and she said the same thing. a public option is not an essential element of reform. the white house is saying nothing has changed and it remains a priority but legislatively, it is losing steam in the polls. there does not appear to be the votes in the senate or in the senate finance committee, which need to act by next september. interestingly enough today, howard dean said that there was no reason to go through the effort and expense of health care reform if you do not have a

public option. his projection was that if this stalls, there will be in the public of rising to put it back in the package so that by december, the public option will be back in the package. if the public option is not in health care reform, and does not deserve the name. trace: you talk about public option and government-run health insurance. this is the context of our viewers. does a public option equal government-run health insurance? when you refer to them, we know when you are talking about. the story about the e-mails of the david axelrod -- david ouncer run being sent out growth

on "the live desk." i want to play that because there is news on that and i need to bring everyone up to speed. >> i need to give you these e- mails so that you can check on the list. >> if you have a different way of checking without double checking the names. >> they never asked for e-mails. trace: that exchange and the subsequent controversy has captured a lot of headlines in the recent days. give me an update on the e- mails. >> read two updates. the white house released a statement saying that it appears a third-party groups were placing names on the white house web site server, so people

would receive these e-mails without their consent. this morning, if you go to the white house web site, under the contact section, you can find two new layers of protection. you can opt out of receiving e- mails, and you also verify that you do not want to receive any e-mails. that is the news with the e-mail list. there is another development. the white house has not confirmed this, but it appears starting this morning that a section of the website called flag@whitehouse.gov has been disabled. if you tried to send an e-mail, it gets sent back to you, and it says that the e-mail address you send a message to is no longer

in service. the rest of the white house website is running. it appears as part of the service has been disabled. we are winning for official confirmation on this. -- waiting for official confirmation on this. trace: thank you. the president now speaking at the vfw. >> thank you. please be seated. commander gardner, thank you for your introduction and for your lifetime of service. i was proud to welcome your executive director to the oval office just before the fourth of july and i look forward to working with your next commander. i also want to acknowledge gene gardner and sharon tradewell and

all the spouses and families. america honors your service as well. also, governor in denver of in it -- arizona is here. phil gordon, our host. i want to acknowledge dr. joe shirley jr., president of the navajo nation. this was not on my card, and you may have heard about her extraordinary story, but i want to acknowledge helen denton, the secretary who typed up the orders for the normandy invasion. what an extraordinary story that is. [applause]

members of the veterans of foreign wars. i am honored and humbled to stand before you as commander in chief of the finest military in the world has ever known. [applause] we are joined by some of those who make it the finest force in the world. members of the 56th fighter wing. [applause] whether you wear the uniform today, or more it decade ago, you remind us of a fundamental truth. it is not a powerful weapon that make our military the strongest in the world. it is not the most sophisticated systems that make us the most advanced. the true strength of our

military flies in the spirit and scale of our men and women in uniform. and you know this. [applause] you know that because it is the sort of your lives. when fascism seemed unstoppable and pearl harbor was bombed, you battled across her rocky pacific islands and stormed europe, marching across continents. my own grandfather and uncle among your ranks, the burning millions and turning enemies into allies. when the communism cast its shadow across so much of the globe, you stood vigil and in a long, cold war. from an airlift to berlin to the korean war, to the jungles of vietnam. when the cold world of men -- war ended and everything changed and new, you turned your attention to close the vote.

long after you took off your uniform, you continue to serve. -- to kosovo. when america's heroes are laid to rest, giving every one of them that final fitting tribute of a great nation. we can never say it enough. for your service in war and peace, thank you, vfw. thank you. [applause] today, the story of her service is carried on by a new generation, dedicated men and women whom i have the privilege to lead in need every day. they are the young sailors who raised their right hand in a graduation and committed themselves to a life of service. they are the soldiers i met in baghdad who have done their

duty year after year on a second, third, were forced to war. the marines at camp lejeune, protecting and preparing to serve. the term and, like who are here today, who provide support for our troops on the ground. the wounded warriors at walter reed, bethesda, and across america, for whom the battle is not to fight, but simply to speak, to stand, to walk once more. they are the families that my wife michele hazmat at bases across the country, this does it back home doing the parenting of two, the children one grim when mom or dad will come home. the parents who watch their sons and daughters go off to war. the families who led a loved one to rest. and the pain that last a lifetime. to all those that have served

america, our forces, your families, our veterans, you have done your duty. you have fulfilled your responsibilities. now a grateful nation must fulfil hours -- ours, and that is what i want to talk about today. we always have the responsibility to lead our men and women in uniform wisely, and that starts with a vision of american leadership that acknowledges that military power alone cannot be the first or only answer to the threats facing us. in recent years, our troops have succeeded in every mission america has given them, from toppling the taliban to toppling a dictator in iraq. at the same time, forces train for war have been called upon to perform a host of missions. like mayors, they run local

governments, delivering water and electricity. like aid workers, they mentor farmers and build schools. like diplomats reading negotiation with leaders. but let us never forget we are a country of 340 million americans. less than 1% wears a uniform. and that 1% have borne the overwhelming burden of our security. in fact, never before in american history have so few protected so many. for the responsibility of our security must not be theirs alone. that is why i have made it a priority to enlist all elements of our national power in our national security. diplomacy, and development, economic might, and moral example. one of the best ways to lead our troops wisely is to prevent a bond that will cost us the blood

of troops and money tomorrow. my greatest job is to secure the american people. that is the first thing i think about when i wake up in the morning to the last thing i think about before i go to sleep. i will not hesitate to use force to protect the american people or our vital interests. [applause] but as we protect america, our men and women in uniform must be treated as there are, america's most precious resource. as commander in chief, i have a command -- responsibility for their safety, and there is nothing more sobering and signing a letter of condolences to the family, man or woman that has given their life to this country. that is why i have pledged to our armed forces, i will only send you into harm's way only when it is absolutely necessary,

and when i do it will be based on good intelligence and sound strategy. i will give you a clear mission, defined goals, and the equipment and support you need to get the job done. that is my commitment to you. [applause] which brings me to my second responsibility to our armed forces, giving them the resources and equipment and strategies to meet their missions. we need to keep our military the best trained, best lead, best equipped fighting force in the world. even with our current economic challenge, my budget increases defense spending. we will ensure we have the fourth charter to meet today's missions, and that is why we have increased the size of the army and marine corps two years ahead of schedule and have approved another temporary increase in the army. and we have halted personnel reductions in the navy and air force. this will give our troops more

time home from deployment which means less stress on families and more training for the next mission. [applause] and it will help us put an end, once and for all, for stop-loss, for those who have done their duty. [applause] we will equip our forces with the assets and technologies they need to win. my budget fund more of the army helicopters, a cruise, and pilots are urgently needed in afghanistan. the intelligence and reconnaissance that gives our troops the advantage. the special operations forces that can deploy on a moment's notice. for all those serving in afghanistan and iraq, including air national guard member reserve, more protective gear and armored vehicles. [applause]

as we fight in two wars, we will plan responsibly, but honestly, and speak candidly about the cost and consequences of our actions. that is why i have major that my budget includes the costs of the boards in iraq and afghanistan. in iraq, after more than six years, we took an important step forward in june. we transferred control of cities and towns to iraq's security forces. the transition to uphold iraqi security on their own is underway. this is a testament to all that have served in iraq, both uniformed and civilian. our nation owes these americans and all who have given their lives in a profound debt of gratitude. [applause] now as the rockies take control

of their destiny, they will be tested and targeted. as we move forward, the iraqi people must know the united states will keep its commitments, and the american people must know we mope writ -- will move forward on our strategy. we will begin removing our combat brigades later this year. we will remove all combat brigade by next august. we will remove all troops by 2011. for america, the iraq war will end. by moving forward, we are able to refocus on the moors against ellicott and its extremist allies in afghanistan and pakistan. that is why i announced a new cover had strategy in march, a strategy that recognizes al- qaeda and its allies have moved their bases from the remote tribal -- to the remote tribal

areas of pakistan. this strategy recognizes military power will not win this alone. we also need diplomacy and good governance. we also have a defined mission and clear goals. to disrupt, dismantle, and prevent al qaeda from developing. in the months since we have begun to put this comprehensive strategy into action, and we have seen our troops into their part. they have gone into new areas, taking the fight to the taliban in town where residents have been terrorized for years. they are inventing new tactics, knowing it is not enough to keep -- to kill extremists and terrorists, but we also need to protect the afghan people. today we are helping to secure polling places for this week's elections so that afghans can choose the future they want. these efforts have not been without a price. the fighting has been fierce.

more americans have given their lives. as always, the thoughts and prayers of every american that make the ultimate sacrifice and our defense are with them. there will be more difficult days ahead. the insurgency in afghanistan did not happen overnight, and we will not defeat it overnight. this will not be quick, nor easy. but we must never forget, this is not a war of course. this is a war of necessity. those who attacked america on 9/11 are plotting to do so again. if left unchecked, the taliban insurgency will mean a larger safe-haven from which al qaeda will plot to kill more americans. so this is not only a war worth fighting, this is a fundamental to the defense of our people. going forward, we will constantly adapt to new tactics to stay ahead of the enemy and give our troops the tools and

equipment they need to succeed. at every step of the way we will assess our efforts to defeat al- qaeda and extremist allies, and to help the afghan and pakistani people build the future they foresee. even as we leave and equip our troops for the mission of the day, we have it their responsibility to fulfil. we must prepare our forces for the missions of tomorrow. our soldiers, sailors, airmen, marines, and coast guard personnel about to new challenges every day. but as we know, much of our defense establishment has yet to adapt to the post-cold war world, with doctrine and up and better suited to fight the weapons and plans of europe and afghanistan. 20 years after the cold war ended, this is simply not acceptable. it is irresponsible. our troops and taxpayers deserve better. that is why -- [applause]

that is why our defense review is taking a top to bottom look at our priorities and postures, questioning conventional wisdom, rethinking old dogmas, and challenging the status quo. we are asking hard questions about the force of we need and what did we buy. when we finish we will have a new blueprint for the 21st century military. in fact, we are already under way. we are adopting new concepts because the full spectrum demands a full range of military capabilities, both conventional and unconventional. the ability to defeat the armored division and the loan suicide bomber. the intercontinental ballistic missile and the ied. no matter the mission, we must maintain america's military dominance. even as we modernize our

conventional forces, we are investing in the capabilities that will reorient our force to the future, making them more mobile and expeditionary, protecting our troops in the field. and airforce that dominates the air space with next-generation aircraft, both manned and unmanned a marine corps that can move inshore more rapidly. in the 21st century, military strength will be measured not only by the weapon they carry, but by languages they speak, by the cultures they understand. here is the simple truth. we cannot build the 21st century military we need and maintain the fiscal responsibilities that america demands unless we fundamentally reform the way our defense establishment does business. it is a simple fact.

every dollar wasted in our defense budget is a dollar we cannot spend to care for our troops were protect america or for her for the future. you have heard the stories. the indefensible no bid contracts that cost american lives. the special interests and their exotic projects that are years behind schedule and billions over budget. the lobbyists pushing weapons that the military does not want. the impulse in washington to protect jobs back home protecting things we do not need. this waste would be unacceptable at any time, but at a time when we are fighting two wars, it is on excusable. it is an affront to the american people and our troops, and it is time to stop. this is not a democratic or republican issue. [applause]

it is about giving our troops the support they need, and that is something all americans should be able to agree to. i'm glad i have a partner in this effort, a great veteran, and a great person who has shown to fight against waste, senator john mccain. i am also proud to have secretary of defense robert gates, who has served under eight presidents, leading this fight in the pentagon. already i have put an end to no- bid contracts, signed a bipartisan legislation to reform defense procurement. even as we increased spending on the equipment and weapons our troops need, we proposed cutting tens of billions of dollars in waste we do not need. think about it. hundreds of millions for an alternate second engine for the

joint fighter when one will do fine. $2 million to buy f-22 fighter jets and we can move ahead with a more affordable, new fleet of aircraft. billions of dollars for a new presidential helicopter. maybe you have heard about this. among its other capabilities, it will let me cook a meal under nuclear attack. [laughter] if the u.s. is under attack, i will tell you something, the last thing on my mind will be whipping up a snack. [applause] [laughter] so this is pretty straightforward. cut the waste, save taxpayer dollars, support the troops. [applause] that is what we should be doing. [applause]

the special interests, contractors, entrenched lobbyists, they are invested in the status quo. they are putting up for a fight, and so are we. if a product does not protect our troops or make america safer, we will not fund it. if the system does not perform, we will terminate it. if congress sends me a bill with a bunch of pork, i will veto it. we would do right by the taxpayers and build the 21st century military that we need. [applause] finally, we will fulfil our responsibility to those who served by keeping our promises to our people. we will fulfil our responsibility to our work forces and to the families. that is why we are increasing military pay. that is why we are building better military housing and providing counseling to help families deal with the stresses

of war. we have changed the rules so that military spouses can compete better. we have a build our responsibility to wounded warriors. for those still in uniform, we are investing billions of dollars for more treatment centers, case managers, so that our troops can recover and return where they want to be. but as the vfw knows, so forth -- for some many, the war rages on. the flashbacks will not go away, loved ones seem like strangers, the darkness of depression that has led to too many of our troops taking their own lives -- posttraumatic stress in brain injury are the defining examples of today's wars. caring for those it is a priority in my budget. billions more in treatment of

mental health screenings to reach our troops on the front tears -- front lines, and more mobile clinics to reach veterans back home. we are not going to abandon the american heroes. we are going to do right by them. [applause] we will fulfil our responsibility to our veterans as they return to civilian life. i was proud to co-sponsor the post-9/11 g.i. bill in the senate. thanks to vfw members across the country, it is now bell lot of the land. -- the law of the land. >> as president i am committed to seeing that it is successfully implemented. for so many of you, the original g.i. bill changed your life, health need to realize your dreams, but it also transformed america.

we are saying the same things of today's veterans. you pick the school, we will help pick up the bill. [applause] and as these veterans start showing up on campuses, i am proud we are making this opportunity available to all those who have sacrificed, including reservists and national guard members, and spouses and children. including kids who have lost their mom or dad. [applause] in an era when so many people and institutions have acted irresponsibly, we choose to reward the responsibility and service of our forces and their families. whether you have left the service in 2009 or 1949, we will fulfil our responsibility to deliver the benefits and care that you learned. that is why i have pledged to build nothing less than the 21st

century v.a. i have chosen general rick shinseki to oversee this process. we are dramatically increasing funding for veterans' health care. this includes hundreds of millions to serve veterans in rural areas, as well as the unique needs of the growing number of women veterans. restored access to be done a health care to have a million who lost eligibility in recent years. since there has been so much misinformation out there about health insurance reform, let me say this. one thing reform will not change is veterans health care. no one will take away your benefits. that is the plain and simple truth. [applause] we are expanding access to your

health care, not reducing it. [applause] we are also keeping our promise on concurrent receipts. our veterans will receive both their military retire debt and v.a. disability benefits. [applause] and i look forward to sign legislation on advance appropriation for the be the face of the medical care you need is never held up by budget delays. [applause] i have also directed secretary sinn secchi to focus on a top priority, reducing homelessness among veterans. [applause] after serving their country, no veteran should be sleeping on the streets. [applause] we should have zero tolerance for that. and we are keeping our promise to fulfil a top priority at the

v.a. cutting the inefficiencies and red tape that causes delays in the claims process. this spring i directed the department of defense and veterans affairs to create one unified lifetime electronic health record for members of the armed forces, a single record with privacy guaranteed that will stay with them forever. after voting for america, you should not have to fight over paperwork to receive the benefits you have earned. [applause] today, i can announce we are taking another step. i have directed my chief performance officer, chief technology officer, and chief information officer, to join with secretary shinseki, launching a new competition among our be done a employees. we are going to challenge each

of our regional offices to come up with the best ways of doing business, harnessing the best information technologies, of cutting red tape and breaking through the bureaucracy. then we are going to find the best ideas and put them into action, all with a single mission. cut the backlog, cut wait times, and deliver your benefits sooner. i know that you have heard this for years, but the leadership and resources we are providing this time means that we are going to be able to do it. [applause] taken together, these investment represents an historic increase in our commitment to american veterans. a 15% increase over last year's funding, and the largest overall increase in the dog a budgeting in the next -- in the last 30 years.

-- v.a. budgeting in the last 30 years. these are difficult times, and that means we have to sacrifice. but let me be clear. america's commitments to its veterans are not just on the budget. they are a bond that is sacred. that is something that we are honor bound to uphold. these are commitments we make to the patriots who serve, from the day in this to the day they are laid to rest. patriots like you. patriots like a man named jim noreen. his story is his own, but it is a story of something that we have all seen. he grew up in the great depression. a paratrooper with the 502nd parachute regiment of the 101st airborne.

at the battle of the ball, his commanding general, on the brink of being taken never did not. he rarely spoke about what he did or what he saw. he reminded us that true love of country was not boisterous or lown, but rather the tranquil dedication to one's life. he returned, and tell their life. he went to school on the gi bill. he got married and raise a family in a small working family town. every veterans day year after year he visited school children to talk about the meaning of service, and he did it all as a proud member of the vfw. [applause]

then this spring jim made a decision, he would return to europe once more. 85 years old, frail, gravely ill, he knew he might not make it back home. but like a pair trooper he always was, he was determined. he returned to the places he knew so well. school children lined the streets and sang the star spangled banner. in a quite clear in of an american cemetery, he walked among the perfect line of white crosses, of fellow soldiers who had fallen long ago. then back where he had served 65 years before, jim noreen passed away at night in his sleep, quietly, peacefully. a tranquil and steady dedication of a lifetime.

the next day i was privileged to join the commemoration of normandy to mark the day the beaches were stormed. there were presidents, prime ministers, that runs from the far corners of the earth. but long author -- long after the band stop playing, a department of veterans member story echoed in our hearts. you have done your duty, to our fallen comrades, to your communities, to your country. you have always fulfill their responsibilities to america, and so long as i am president of the united states, america will always until this responsibility to you. god bless you. god bless all of our veterans. god bless the united states of america. [applause] trace: that is president obama

speaking at the vfw convention in phoenix, arizona. you cannot see but there is a crowd of about 13,000 people. he said america's troops are our most precious resource, talking about the two wars that we are engaging in right now. he also said all combat forces will be out of iraq by 2011. he touched on afghanistan, talking about destroying the taliban, securing the election. he also reminded people that the insurgency will not be quick or easy to fight. i want to bring in jennifer griffin from the pentagon. anything you were struck by by what the president said or did not say? >> the real elephant in the room is the war in afghanistan and whether the president is going to commit more troops, and if so, how many?

what is the eventual goal? last month robert gates said they would postpone the trend in the review -- strategy review for afghanistan with the general stanley mcchrystal. they wanted to do that after the afghan elections which took place on thursday. president obama made clear that troops are coming home from iraq. they have wanted to telegraph that to the iraqi leadership, just in case there were any doubts. the question is how many will be routed to afghanistan? he said he will not send troops without a clear strategy, good intelligence, and it will not be a war that is one militarily. he described the afghan war as a war of necessity. that suggested to me that he knows he will have to commit resources, and likely troops. the question is how many. he talked about diplomacy and development as key to success in

afghanistan, but what struck me is we saw some numbers from the state department. there is a surge in diplomats to support the one over there already. so far they have only been able to find 92 workers to send over. their goal is 313. that does not count to me as a surge in diplomacy for aid workers, and if that is a key part of the strategy, is the military than going to be required to and to diplomacy, as it is done in other wars? these are the unanswered questions. chris: thank you -- trace: thank you. i want to get back to the top story of the white house responding over why individuals received unsolicited e-mail us. they say that third party groups are to blame. it says it is changing the rules

on how people registering for e- mails on the official web site. let's bring in doug scheon, a fox news contributor. we also have brad blank and -- blakeman, secretary adviser george bush. >> nonsense. the white house knew that it had its own list to contact, but they also contacted third parties -- i am sure of it. david axelrod has an e-mail on health care and we want to move the debate our way, so flood our website with addresses we can use. they know that if it came from pacs are not directly, from his account, -- from david axelrod directly, from his account, they would have to admit that it came from him.

i got a friend who had an e-mail from david axelrod and it was unsolicited and unwarranted. within the body of the e-mail, he tells people to use this as a chain e-mail to spread the word. trace: maybe you can clarify what he is talking about. the white house is in a fickle because they cannot get rid of these e-mails. they cannot gather information about people's political views, so the question that everyone has is -- we are not say it is an enemies list, but is there a sense that there is some gathering going on of political views? >> it seems that there is a gathering of names for purposes that were anticipated and unwarranted. the real question to me is how to stop this. we are all civil libertarians. we all want to protect the

sanctity of information. to the question is fixing the problem and ending it here. trace: there is a long history of gathering political information, gathering information on your opponents, and then using them for your political benefit. what people are concerned about is that this would inhibit people's ability to speak their mind. >> it is scary for a lot of people to receive this kind of the mail. it is unbecoming of the president of the night of state staff to use the type of influence directly from the white house. trace: i want to move on. these health care cooperatives. we are going to talk about these co-ops. this appears to be the next step. of course, for all intents and

purposes, the public option is government-run. this is when a co-op is, just so that you know -- the question is, when you look at the definition of a co-op, if the government gets involved in guaranteeing or financing, it no longer becomes a co-op. just something that looks like the public option, just in disguise. >> i think we need to wait to get a better definition and more clarity on what the white house will propose. what the role of the co-ops will be, and how are they operated? we know now that the public

option is all but dead and buried. what the blue dogs and moderates of the senate have said, i do not think there is a vote to pass the public option now. trace: that is the consensus. is government-run insurance dead? >> i hope so, but there are playing with language. co-ops are already exist the one that they are talking about are not the ones that exist today. they should be increasing those that exist already today. we need a pool of people to go out to the marketplace. once the government gets in there and it controls health care, that is the first step to a public option. trace: a lot of liberals have said that this is a nonstarter.

they want government involved. >> the problem is the democrats and president obama have a problem because the blue dogs do not want a public option and for the liberals, it is a moral obligation. what obama is trying to do is read and the needle in a way that is probably difficult to do, hence this idea of co-ops. trace: he has been fighting people to the right of him, and now he has to fight people from the left. juliet: six months ago the government invested billions of dollars to boost the economy, so is it helping you and your family make ends meet? what people are saying about the spending plan. auto dealerships are crushing cars across the country under the cash for clunkers program, but one dealership has gotten pretty creative in their destruction.

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trace: are you keeping track? and had been exactly six months since president obama signed his $787 billion stimulus bill into law. is it helping the economy? according to the gallup poll, 41% believed it is. alexis glick, the vice-president of fox business news, is with us now. the numbers are kind of astounding. 57% believe that this is not helping or is making it worse. >> it is interesting.

in some ways it is a surprise, and other ways it is not. the money is not being funnelled out appropriately. you look at the $787 billion. one-third of it is tax cuts that were put back into people's paychecks, but the spending portion of it is not making its way to the economy, and not nearly as quickly as people with black to see. trace: i do not want people to think that we are using fast and loose numbers. now you need to add the rest. that is where we have 57% who say it will make things worse or have no affect at all. this was all about jobs, and they have not materialized. >> they will say in the white house this helped stymie something that could have been worse, but we have lost 2 million jobs since stimulus went

into effect. the issue is confidence. we have weaker than expected confidence. it is because people are concerned about jobs. unemployment in the country is still at record levels. the unemployment will still be in double digits, and we are headed that way. people in this country are exhausting benefits. the million and a half people next year will lose benefits, and that is a big issue. trace: let's put the next pulled up there. -- poll up there. does the stimulus have an effect on you in the short term? people do not really believe it will be affecting them. >> now you have to increase productivity, declining wages, some percolation of the work week extending, but what you are

seeing is in fact prices remained stable. in some cases they are deflating. you are not feeling in your pocketbook because your wages are declining. trace: here is the long-term numbers. unemployment could remain high in the country for the next decade. long-term, the same thing. people do not feel like the stimulus will help them. >> unless you address consumer spending, the economy will not feel the way we want it to. the consumer represents 70% of the gdp. if they do not spend, which is what is happening right now, and will take much longer to recover. the savings rate in this country last year was negative. right now we are saving at

about 5%. trace: here is what they want to do with the money. give it back to the taxpayers. take whatever is left. >> that is a pretty good idea. juliet: thank you. the government wants all cars turned and turn the cash for clunkers program crushed. now one oklahoma dealership is keeping up that ended the deal. they are using a monster truck to crush these vehicles, and the crowds are getting pretty big. cash for clunkers encourages individuals to trade in their vehicle for more fuel-efficient ones. look at that. trace: there is more than one way to skin a cat, right?

juliet: ok. the mother of a missing girl making a desperate returned -- a desperate call. christie cornwall was speaking to her boyfriend when she was taken. we will have much more and the one piece of evidence that investigators have that may lead to a break. i'm todd davis, and i'm here to prove just how safe... your identity can be with lifelock. that's my real social security number.

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trace: we begin with the white house taking steps to prevent outside groups from signing up people to receive unwanted e- mail from the white house web site. so who are these third-party groups and the white house says is so involved? we are across the news room. eric, what is the latest? >> they never asked for e-mails, and now they want to know who is behind these e-mails. the white house admits an unnamed third party groups could have sent them the names of unsuspecting people to the website, but who are these so- called third-party groups? when you were sent us her version of the male and did some investigating on her own. she told me it was sent by a company called govdelivery, .

they say their aim of service provides a fully automated, on the man public communication system. the company of the president had no comment on whether the white house used this firm to send out those e-mails, and directed me to the website you are looking at now. by my count, and they have worked with the 11 cabinet departments including the department of defense, state, justice, irs, fbi, atf, director of national intelligence, and even the federal reserve. the aclu says if the white house used the firm, it is as if they set up the e-mails. >> if the government is directing a third party to gather political views of americans, knowing that the

americans did not give permission for their views to be shared, that is very troubling under the first amendment. it raises the potential for abuse. >> we have contacted other web firms and google has commented that they were not involved. since this controversy exploded, the white house has changed their in the procedures to prevent unwanted e-mails. trace: thank you. with us more -- with us now with more is bill sammon, our washington editor. just to expound, we are not saying this company said ms. e- mails, because we do not know that, that if they did, there is a good point here that someone had to approve them sending out

days e-mails. >> that is a good point. also the fact that they have apparently been working with cabinet level agencies anyways. you are starting to get a little close for comfort. we do not want to accuse the white house of doing something that has not been demonstrated that, but they're taking significant action to our reporting, specifically to major garrett over the weekend which has now said that they have changed policy on how they obtained e-mails. on another front, the white house had shut down a site -- a site that it was using to invite sympathetic readers to forward the comments of people who opposed the health care plan. that site had been set up to collect these fishy e-mails.

there are a lot of things popping on this front. again, all of it comes from our reporting. juliet: these people who have received the e-mails are unhappy that their information is in the hands of the white house. what can these people do with the e-mails? >> that is a great question. take for example these e-mails forwarded to the official web site that the obama people set up. they are not collecting e-mails anymore, which is fine, but what about the one that you have already collected? the you keep them? do you purge them? will that in light target that you are destroying presidential records? i think the onus is on the white

house to explain what they will do with those names. the fact that they have shot that part of the website down seem to be an implicit acknowledgement that there was something wrong with it. trace: perhaps you can give our viewers some context, talking about white house -- whitehouse.gov. this is sort of their pet projects. so they are kind of in charge. if they want to shut down part of it, they can. are there flaws that they have to follow when there are running the website -- laws that they have to follow running the website? >> you are referring to this flag website where they invite people to forward fishy mills. i do not know if that would be illegal, but certainly would be a political problem. the last time anyone can stand

enemies list was richard nixon. on the other friend, the e-mails that were received unsolicited from the white house to people who never contacted them, that could potentially be a legal problem, but again the white house is planning third parties. we do not have any smoking gun to show that the white house had done anything illegal, but our reporting is starting to feel done the layers of this onion. i think there is more to find out. juliet: thank you. health care town hall take two for our inspector. the last time they called him down on details of the health- care overhaul, so how did today go? david lee miller is with us. senator specter has been in the forefront of these debates and there was speculation the administration would drop the public option. did you weigh in on this?

>> these meetings have dealt with benefits for veterans. the senator was asked specifically about this public option and said that he very much supports the idea. he says it is still too soon to gauge the extent to which supports might be eroding. >> it is too soon to make an evaluation as to what public response. we are just beginning. bear in mind, the senate does not even have a bill in the house has not brought a bill to the floor. it is much too soon to make an evaluation. let's see what we produced by way of the bill. >> the senator highlighted that it is nowhere near over. one of the things he wants to do is to continue to try to gain bipartisan support for health care reform.

town hall meetings on this subject will continue. juliet: we saw what happened last week at the town halls where you had one man physically move another dumb and -- genteleman. what was it like today? >> this was much different. the crowd was primarily veterans, and the meeting dealt with the veterans' benefits. there were a few questions about health care, but for the most part, an extremely well-behaved crowd. of course, this is the city of brotherly love. juliet: we should expect nothing less. trace: kids are now entering up for swine flu vaccinations.

a survival guide for sending your children to school in the middle of the h1n1 crisis. and a new study predicts unemployment is going to get worse, a lot worse. how bad and for how long? ..xn0]?7

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veterans of foreign wars convention. the bed to be at al-qaeda and its allies. he also lashed out at wasteful spending and promised the overhaul will not affect care. a police standoff in monroe county, michigan. police say the suspect has been shot and killed after he shot an officer in the side. in the bottom box, the search for a missing toward a woman resumes. christie cornwell has been missing for nearly one week. 17 agencies have joined the search but still they have few clues to go on. juliet: it could be the most widespread school vaccinations since the days of polio. schools during up to protect your kids against the h1n1 flu. hundreds of schools are planning to set up flu shot clinics this fall, but there are other measures being taken to

keep the virus from spreading. let me bring in the assistant professor of surgery at mount sinai hospital. there has been a lot of concern about the vaccine, particularly with regard to children. is it safe for kids? >> it is. it is an egg-based drug. in general, it is safe and should be given to kids. juliet: i think there is some surprise by parents that there is talk about doing this in schools. is that a good idea? >> they need to give these vaccines and mass amounts, so for -- so for some school districts, this would be an easier way. in other areas, local government is working with the schools to set up clinics to accommodate these massive amounts of kids.

juliet: the first question would be what do parents do to prevent this from happening in the first place? wash your hands, but what else can they do? >> that is the most important thing. every time they go to the bathroom, before they keep. -- they eat. worse comes to worst, send them to school with a hand sanitizer. this from holding hands with their friends all the time, touching each other, sharing tissues, and drinks, food. it is exchanged by respiratory droplets and saliva. juliet: should parents be getting both shops, h1n1, and the reason -- regular-season all virus?

>> right now officials are running tests to see the best way to administer it. be proactive and speak to your doctor and see if you can get it administered by them first, rather than waiting for the mass release of these vaccinations. juliet: for the parents watching this -- my kid looks sick. it's it's one flu? what should we be looking out for? >> it is hard to distinguish between the common cold and flu. symptoms but pretty similar. if the fever is over 100, you want to keep them at home, contact your physician. plenty of rest, plenty of fluid. once the fever has subsided after 24 hours, then they can go back to school. juliet: thank you. if you want to find out essential information on the h1n1 virus, visit our website, foxnews.com.

trace: in the meantime, the nation is reeling from staggering unemployment numbers. a new report says it may be a long time before we see a light at the end of the tunnel. and a massive fire at a wedding kill dozens of women and children. now new reports on who could have been behind the fire and the alleged arsonist connection. ♪ oh announcer: say hello to the can-doers. - the budget masters. - ♪ yeah yeah the knock-out artists who are finding more ways to spread their dollar further. - to bolder color in less time. - ♪ are you feeling it? say hello to newer ideas and lowered prices, enabling more people to turn more saving into more doing. - that's the power of the home depot. - ♪ are you feeling it? try out different colors with new 8-ounce paint samples at a new low price of only $2.94.

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juliet: hurricane bill in the top box, picking up strength. forecasters believe it can turn into a major storm in the next couple of days. in the middle box, firefighters are gaining ground on two large northern california wild fires. the evacuation orders are still in effect for hundreds of residents. in the bottom box, senator kay bailey hutcheson announcing that she is running for governor of texas. "reader's digest" is filing for chapter 11. another victim of the declining print industry. they have agreed to restructure its debt and give lenders a share of the company.

trace: we're getting word that unemployment may get worse, and it may take a long time to get better. a new study from the fed bank of kansas said that high unemployment could stick around after the recession ends. james rosen is watching this for us from washington. if the belief is that unemployment will near 10%, when does it come down? >> we could pretend% this year. according to a study and economist, and move the a decade before we see the unemployment rate go back to where we usually like to see it. they say that unemployment could break through and stay above 10% through 2011, and then slowly drifted down to 8% by 2014. trace: so what does the report say about those who are out of

work, or who soon may be out of work? any constructive advice? >> basically, they say the current recession has a lot in common with the worst post-war recessions we have experienced, but that unemployment will not go down as quickly as those periods. in 1990 and 2001, jobless recovery, that is something similar to what we are going through now. it is not like 1973, 1982. if you are unemployed, perhaps the best thing to do could be today a temporary worker or be part of the consulting firm.

those are the people that are being hired back. trace: put that chart back on the screen. the red line is what we're talking about now? >> yes, the current recession. and the yellow line is the rotten years of 1973 to 1975. white wine is 19 -- 1981 tline 1 to 1982. what happened and each time is that unemployment recovered, but now economists are saying that we could have a slow recovery.

juliet: a fire at a wedding party in kuwait may have been started for personal reasons. newspapers reporting that it may have been set by the former wife of the groom. the fire killed 39 women and children. kuwaitis celebrate weddings in support is for the men and women. fire crews say the fast-moving flames burned the tent in three minutes. the fire chief called it the worst disaster he has seen in 40 years. police have arrested the ex- wife, but have not commented on the motive. trace: an update on the standoff between one man and police. >> we have been following this for about four hours. a police officer had been in -- have visited a home and got into a confrontation. that policemen must shout. corporal thomas murphy was shot

in the side but is now in stable condition. now we continue to watch the scene. tactical team's moving from house to house telling them to stay inside as they look for the shooting suspect. then they figure out what house he was in, and then they broke in. they waited over one hour and then tried to get in. finally they discovered he killed himself. that policemen is in stable condition. he will be okay. this has now come to a close. back to you. trace: thank you. as a floor that cleans up from claudette, hurricane bill is not turning in the atlantic. forecasters expected to become a

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trace: brand new information on three big stories. steve brown, what happens when a city shut down? >> city government has decided to take the day off. a fire and emerge as a personnel are the only -- fire and emergency personnel are the only one working today after federal employee furlough days. it is a step in the right direction, is not enough yet to

get in the black. trace: health care for senior citizens. >> there is a debate brewing over medicare advantage. the president wants to cut the program because he says it is too expensive and he could save $150 billion over the next 10 years, but some senior citizens say that they would not be alive without the personalized care and in home nursing visits. some california cantor survivors felt so strongly about it, they went to washington to lobby lawmakers. they say they will go back as many times as they need to. trace: now to phoenix where mike emanuel is with the president. he was there for the vfw convention. >> president obama received a polite reception here in phoenix. he thanked the veterans and

praised u.s. troops for their service. he threatened to veto a defense bill if it is loaded with military projects he considers pork. one of the biggest applause he got was when he mentioned his rival in the presidential elections john mccain. trace: breaking news. we have very little information but the u.s. justice department has announced what it is calling "the largest hacking and identity theft case ever." 130 million numbers were stolen -- credit card numbers, and that the card numbers. -- debit card numbers. the national desk has confirmed this with the justice department. one of the biggest cases of

identity theft ever. much more information on this as it crosses. we will get you information about that, coming up. juliet: it is mid-august, and as a native of miami, it is time for the hurricanes to start gearing up. hurricane bill is on its way. janice dean, what is happening? >> we are looking at three systems right now. not too concerned with our depression there. we have some heavy rain from claudette along the panhandle, but this is the one we are watching. we have some pretty good of flows right now. this is the projected path. we will be watching this over

the next five days. the more uncertain we get -- i cannot stress how important that is. it approaches bermudez a category 3, and some models have it as a category 4 or higher. as we go further out in time, that is when we could really see the storm makes landfall in bermuda, maybe east of bermuda, or closer to the eastern seaboard. you can never have a secure forecast five days out. and juliet: these hurricanes pick up speed in the warm water come but once they hit land, they typically slow down. would it be good for the east coast if it hit bermuda? >> it would not be good for the island of bermuda.

a very small island dealing with a storm with winds in excess of 100 miles per hour. they are well-equipped there, and we are watching this -- i wish i could take all of the hurricanes that have hit the u.s. and show you the five-day hurricane protection cone. juliet: if you have ever been stuck in a hurricane, you have to be wary. >> this one just formed over the weekend. that is just a wake-up call. we need to prepare. this is going to be a major hurricane. five days out, you do not know where the storm is going. juliet: you are going to be a busy lady. trace: just as you talk about

the intensity level, the question is, what does it mean for you? diane from fox news is with us. >> let me show you on the big screen. trace: intensity levels, one through five. >> we have heard janice dean talk about this all the time. not all of us are from florida. we came out with a brand new feature called the hurricane interactive. if you click on that, it brings up the hurricane wind scale. it was developed to determine the strength of the hurricane. here is a quick summary. wednesday, storm surge. if you are curious, like i am, you want more.

here is a complete interactive look. this is a category one. this is what you can expect to see. these red dots will describe different situations. that one is looking at the wind speed. if i click on the light posts, and but tell me what we can expect in terms of power outages. this one is a category three. a bit more damage. it will tell you whether you can expect escape routes to be blocked off. scroll over to the category 5. you can see the massive destruction that can be caused by these storms. you can get tips upon falling trees, what kinds of structures can be expected to withstand these types of storms, where you can go for escape routes. it is a great interactive look at what you can expect and gives you a better idea when you hear

the category. trace: it is amazing to look at all of the different categories of hurricane. remember, hurricane katrina was a category three. >> absolutely. it is all on our website. trace: thank you. juliet: the justice department says it is the largest and then in the theft case ever. 130 million card numbers stolen. was yours one of them? d 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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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. trace: this is breaking news coming from the justice department. they are saying this is the largest case of identity theft ever. we are now hearing that three men have been indicted in new jersey for hacking into five

corporate entities and stealing 130 million different credit card numbers. this includes companies like heartland, 7-11, and heartland. they do not bring down the kinds of cards, and we are getting more information. they did not say that the information is actively being used, but they did say that the numbers themselves had been breached. much more on this coming up. twitter and facebook. both websites crashing after an attack a few weeks ago. people logging on were unknowingly caught up in a much bigger conflict between russia and georgia.

the more involving more than tanks and troops. cyber attacks, the latest weapon in this international dispute. steve centanni is in our washington news room. what are the broader implications for other economies? >> this is a far reaching problem. cyber attacks is something the u.s. government is seriously concerned about. this one was aimed at crippling georgia's ability to communicate to undermine the morale during the invasion. the timing indicates that the hackers knew something about russia's plan about the invasion of georgia. the five-day conflict left hundreds of people dead and crushed the georgian army. information shows that hackers pinpointed 10 websites used to coordinate botnet attacks,

disabling the georgian side by targeting them at once. the study reveals that, microsoft software was refashioned to launch the attack, and hackers collaborated on popular with sites like facebook and twitter. trace: how did officials pinpoint the use of these networking websites? >> the investigator conducted a study using data mining tools to look at these pages looking for a key russian words that would indicate that day like we knew something about it. he found users swapping attack code and target lists within georgia. that way they coordinated their efforts and encouraged others to join in with them.

trace: thank you. juliet: baquba i have here with me. >> -- look through all i have here with me. >> it is extremely hot in this room. today, coming up at 2:00, rick klein will be with us. people are wondering if this is a big first win for the gop, this public option. it appears to be on life- support. republicans and people who opposed this won the message war.

also, michael vick. juliet: i did not listen to the interview. >> well, he cried in jail. the thing is, he loves dogs now. the thing is, where he grew up, i am from the part of the world. what ever direction you go in, you can find a dog fight. it is not that all -- all that uncommon. if he has reached this epiphany, is it because of guilt time or is it because of the dog fighting? julia, and the eagles? >> i do not care what they do. the new york giants will be taking it. trace: san diego chargers verses

in new york giants, by the way. more than a dozen law enforcement agencies looking for christie cornwell. we will speak live with her family. ?7

trace: breaking news that could affect a lot of us. the justice department says it is the largest of identity theft case ever. 130 million credit card numbers stolen. with me on the telephone now is a former private investigator specializing in computer forensics. 130 million credit card, debit card numbers stolen. >> actually, i am a former

criminal prosecutor. credit card fraud is a future date, and they are going after these larger operations with a lot of credit cards under file. a lot of these attacks are automatically done by code and not by any extreme knowledge from these hackers. trace: what do you do with these things? do you sell them, try to get them printed on fake cards to go to an atm? >> i am sure they have a lot of different ways to get rid of them. selling them and creating credit cards for themselves. this costs the credit card industry billions a year. trace: 130 million. that tells me a large number of credit cards used in the country have been compromised. what do i do?

do i call somebody, check my credit card? >> certainly, there will be something that comes out of this. other companies who will be victimized may start a policy to protect themselves, but absolutely get a hold of your credit report and make sure no one is using it. people ask me all the time, is online banking say? it can be most of the time, but there are instances when one person can grab millions of numbers, like this. trace: if they are investigating this, how long has this been going on? how long have they had these numbers, and how much money have the run up over the course of the investigation? >> this is just one set of three individuals out there, not even

mentioning the thousands of individuals. this kind of attack is so common. it takes advantage of insecurity and vulnerability and gives them access to the database. trace: a criminal investigator. thank you. juliet: authorities are stepping up the search for a woman who disappeared in georgia one week ago. seven agencies now teaming up looking for kristi cornwell. she vanished while walking near her home. her boyfriend says he was talking to her on the telephone when he was in atlanta. she held "don't take me" and then he heard a struggle. with me now is a former detective. we also have her cousin. keith, she was on a walk?

is this something that she did normally? was there anyone in her life that would have known that this is something that she does? >> apparently this was just a regular walk. we are not really sure at this point. juliet: something that seems like a red flag was she was a former probation officer. she worked at the state prison, sheriff's office. when you are working in these locations, you are coming up against some pretty shady folks. is that something police should be looking at? >> we are leaving that up to the investigators, but for the most part we do not feel like it is a big deal. it could be. she was primarily a counselor- type of probation officer. we do not really know all the types of people she came into contact with, but it is a

possibility. juliet: bill, what do you think of that? these are some pretty unsavory people that she is coming into contact with. >> any background on her needs to be checked out. another thing is sheer originally said when she was inducted, please don't take me. that leads me to believe that they had a gun and that she could not do anything. even with her knowledge of self- defense, she did not have the ability to do anything. juliet: police are not looking at the boyfriend who made the phone call. she has former husband also that they have looked at. >> in an abduction case like this, it is tough. maybe somebody watched her for a while. perhaps it was a car that was around.

people notice that type of thing. the most important thing here is human life. they need help searching around, looking for evidence. they may have hit her and she is still alive on the side of the road somewhere. juliet: we are not talking about new york city or anything, so surveillance and witnesses will be harder to come by. >> it is a difficult case, but it can still be solved. there were two cars that were around at the time. was she adopted? that is another issue. -- abducted? juliet: of course we will be staying on this information. there is her information. if you have any information, contact your local police department. trace: we are still getting information on what could be the

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