into the backbone of the american economy, small businesses. the president says it will create new jobs for millions of unemployed men and women. the nation's unemployment rate, of course, at a staggering 10%. over 15 million people are jobless. that does not include the number who have simply given up looking for work. can the president turn those numbers around in time to save his party this november? virginia congressman scott, a democratic member of the house budget committee is my guest. good afternoon. >> it's good to be here. megyn: let's start with that. many are criticizing him already saying it is too little too late. he should have been practicing on this over the past year instead of health care. your response. >> we have been focusing on health all along. we passed a huge package early last year. the house passed another. the house has been working diligently to create jobs. the problem we have is that we

create jobs and people get laid off. if you look at the state budgets they have cut back hundreds of billions of dollars. the first couple hundred we send only offsets. we are sitting at a moving target. because of the national economic situation with state and local governments lay people off, when people say a the couple hundred billion wasn't enough, that is what they're talking about. megyn: your stimulus plan. now two-thirds of that have yet to be spent. the president has promised that if we spent that 787 billion that unemployment would peak at 8%. he said it would peak at 9% if we didn't pass it. now it is that 10%. a hundred billion in the hole. why don't we just use some of that money that money ?why should we be forking over another hundred billion. that money >> as i indicated if the states

and laid people off would not t be in the mess we were in. we are sitting at a moving target. the economy was a lot worse off than it really was. you have to readjust the numbers based on where we actually work. megyn: what about the fact that we haven't spent two-thirds of the stimulus. >> well, most of it, a lot of it has been sent to the states. a lot of it is in construction projects that are getting under way as we speak. we need to make sure that we push that more aggressively than we are doing to make sure that it did so to the economy. the problem is we are kind of hamstrung because we can't raise taxes. we can't reduce spending. we have a deficit head needs to be dealt with. we don't have the flexibility of we should have that. megyn: what about the fact that the president and peter ortzag

both say that health care remains a priority. yet the president is trying to make things better for small businesses. we hear from the small businesses that they are very concerned about health care because they're worried about the taxes and paying for the health care, that they don't have the money. >> well, that is why we need to pass a health care package. health care is really the long-term nature factor in a budgetary challenge. the same percentage of the gdp and we have that now. social security, the other budget situation. they're all pretty constant. posted 21%. the problem is that health care is growing faster than inflation. medicare and medicaid. that is why we have to pass a health care plan to get health care costs under control.

small businesses will be the number one group to benefit from health care because their playing the retail rate. megyn: what he said to the folks who are watching this? $100 billion. they have already spent 800 billion on the stimulus plan. much of that money still in the coffers. astronomical federal deficit. what do you say to those folks who are watching as thinking, just stop it. test get it out. if i was in my home i would have to tighten my belt. no one is persuading me that you have an answer to get us out of this. >> we need to have a consistent message. most people want us to give the economy out of the ditch. the challenge is with the deficit where it is our spending flexibility is limited. obviously you don't want to raise taxes in the middle of a recession. our options are somewhat

limited. we need to have stimulus spending now and long-term budget and fiscal responsibility, like we did starting in 1993 when we got the budget under control. if we had not messed up the budget starting in 2001 we would have paid off the national debt two years ago. megyn: we have done a lot of spending over the past two years, that is for sure, including the wars in iraq and afghanistan. congressman, i would give you the quick final word. i've got to go. >> then we would be in a position where we will be stimulating the economy out of surplus and not figuring out how to start off in debt and deal with the jobs problem. megyn: congressman bobby scott. thank you. well, maybe you have got the answer. do you? you never know. we would like to know what you

think. we are passing it through to our trace gallagher. you go to foxnews.com. you can talk direct to trace. now, unfortunately or fortunately he cannot talk back to you. but you can go ahead and give him a piece of your mind. we are working on the technology. we are going to share some of what we learn as the hour goes on. again, foxnews.com / american chats. in the meantime trace gallagher is a busy man following the fate of the ten american catholic missionaries. they say they were just trying to help the children. the haitian authorities say it was essentially a kidnapping. now there is a hearing to determine the fate of the group possibly headed back to the united states for trial. most of these children were thought to be orphaned by the devastating earthquake. now we are learning that many of these kids have families to actually survived the catastrophe. betrays gallagher gher live in x

newsroom. a whole lot of legal trouble. have they gone before a judge that. trace: they were supposed to go before a judge yesterday. well, we are still waiting. we have got our eyes on the wires. no sign of a judge showing up. now we are hearing that they may take them in and actually present them to the judge one by one. the haitian prime minister has said he believes that maybe it is a good idea to send them back to the united states for trial. he does want them to go on trial because he believes what they did was wrong. he says they know what they did was wrong. in the meantime you have got idahos congressional delegation working with the state department trying to get these missionaries back on american soil. at the end of the day this is all up to the haitian government. megyn: you know, trace, before we get to this, america has done so much for haiti. we have done so much to try to help them in this crisis. isn't there any sort of back

channel negotiations going on saying, look, they made a mistake. they were trying to help these kids. are they willing to send them back? that this just be forgotten in the interest of putting this behind us? trace: that is the process right now. that is what is happening from idaho to washington to haiti, they have these back room channels open. we are not saying it is not going to happen. they could go before a judge today and say, look, get these guys on a plane and get them back to the u.s. right now the first step is to get them before that judge. we don't even know the charges. we looked through the laws in haiti. they are very vague. we don't even know the penalties they are facing. step one, go before the judge and move on from there. megyn: a question about what they could do in haiti given the current state of their justice facilities and officials. in the meantime there is an

immediary group holding these 33 children. you have to them. trace: i spoke to the ceo. heather paul of sos children's villages. 500 of these villages around the world. the biggest problem with this is that we all about these kids are orphans. well, they are not. they are trying to take these 33 children and length them back to their families. at the same time they don't want to give them back to families who are just going to give them away. as for the american missionaries, sos had this to say. listen. >> i think this is a case where zeal has overcome the right thing to do, which is to determine exactly which children have been full orphaned in orphanages and are ready to proceed ahead. i think sos knows full well that anyone, any entity, any charity, any orphanage that intends to remove children must do it according to the right protocol,

the rules, regulations. that is what we are doing right now. trace: you heard her say rules and regulations. that is why it is so important that this support must be precise and filed which the americans did not do. that way they can track these kids. megyn: more on that track the hour. and foxnews.com / american chat. it's outrageous what you think. trace: we will get it fixed. megyn: ron emmanuel tees off with disturbing language. sarah palin is calling for the president to fire his chief of staff. monica crowley on what the white house is saying on this now. the back room brawl. the players, all the fans. you can judge for yourself. who is to blame? for strong bones, i take calcium.

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megyn: sarah palin unleashing a scathing attack on the white house chief of staff emanuel. the former alaskan governor and "fox news" contributor slamming her for using the following term to describe members of his own party. he called them "blanking" retarded. sarah palin has a son who was born with down syndrome. his choice of words is unacceptable and heartbreaking. she wants him fired. monica kelly joins us live. hello. >> reporter: hello. congratulations. megyn: we reached out to the white house to be sure enough we got a response. it apparently in the wake of this emanuel has called up

shriver to apologize and says that apology was accepted. the white house came out with the following statement. the white house remains committed to addressing the concerns and needs of americans of with disabilities and recognizes that derogatory remarks to mean as all. should that do it? >> this sounds like what president obama had to do back when he went on jay leno last year and they backtracked about the special olympics. he had to go through the same drill. he called shriver. shriver accepted the apology. i don't want to call this a pattern. this does seem to be incredible insensitivity to a lot of americans. what sarah palin was trying to point out is that when you are president of the united states either you or your chief of staff for anybody representing you cannot come out with these kinds of comments without suffering any kind of

consequence. megyn: do you find it odd that he called shriver who heads up the special olympics, but does he speak for everyone who is disabled? >> reporter: should have issued a much more general apology. i'm glad he called, but there are 40 million americans, american families to have children with special needs. by going out there with this kind of comment he is insulting all of those. the guy has a potty mouth. we all know that. when you start to make cracks like this i don't care what the context is, when you are representing the president of the natchez trace the consequences have to be of to e more severe. megyn: sarah palin says we would not have just stoob by if he had gone out there and said "blanking" n-word. it used to be back in the day that term retarded was accepted. it has since become known that

is not accepted and offensive to those who have disabilities and those who love them. it happened back in august. it just got published now. is it just going to go away? >> reporter: i don't think so. he is facing steeper troubles than this comment. look. emanuel brought in as chief of staff because he comes out of congress. close to obama. he had longstanding ties to others in congress. he was basically brought into this job to be a close tie between the white house and the lead such a branch. he knows how to twist a lot of arms. he has done some of that effectively. when you look over the course of the last year, the collapse of the obama presidency on health care, on captain trade, on so many of the big agenda items, he was supposed to be the point man. megyn: what they say about him in the reports is that he is more of a centric and not an ideologue. he does not mean hard left.

he is the one who urged the president to abandon the public auction. is he more of an ideal maker than an ideologue? what would a replacement looks like? >> reporter: the answer to that, if he steps down valerie will replace him. i don't think that is a big improvement, but i will say that you have to judge by results. you are absolutely right that he went in and twisted arms. doesn't things done. on the big legislative agenda items, namely health care, he failed. and when you see comments like this on top of it it looks like he has become more and more of a liability. he is a political animal and he is trying to pull the obama white house more to a reasonable medal. i don't necessarily think he has been all that effective. megyn: we will see whether this behind the scene apology puts an end to it. sarah palin fired up.

>> reporter: she is right. megyn: what a pleasure. in roughly an hour the head of every major u.s. intelligence agency may face some of its toughest questions yet. just ahead we will show you by janet napolitano may be facing some extra heat. plus it is groundhog day. >> ladies and gentlemen, may i introduce to you punxsutawney phil. megyn: it is groundhog day. it is groundhog day. get it? after this break some things you never knew about the world's most famous woodchuck, punxsutawney phil investigation when we come back. >> once again the eyes of the nation have turned here to this tiny village in western pennsylvania. there is no way that this winter is ever going to end as long as this groundhog keeps seeing his

shadow. i don't see any other way out. he has got to be stopped. and i have to stop them.

>> after casting a joyful eye toward thousands of his faithful followers phil proclaimed, if you want to know next you must read my text, as the sky shines bright above me my shadow i see beside me. six more weeks of winter it will be. megyn: yeah. well, they call him the seer of

seers, the prognosticator of all prognosticators. how accurate has punxsutawney phil been? a "fox news" investigation. >> reporter: this is a debut. . megyn: where did you give this? >> reporter: i can't tell you. megyn: he has his own voice. >> reporter: he is going to give his prognostication. wait a second. what do you think? okay. "america live" is going to be huge. and no spring for you. six more weeks. megyn: i thought when the groundhog sees its shadow that's a good thing, right? if he doesn't see his shadow he runs back into is hole. >> reporter: winter will last

six more weeks. and when you talk about how often punxsutawney phil has been accurate, i did some research in. it looks like 39% of the time he is right, which is slightly worse than a coin toss. megyn: said the smart t thing io bet against phil. >> reporter: yes. he has been doing this a long time. 113 years. he looked pretty good. megyn: amazes me how this people get up and go out there before the crack of dawn. is it the same ground hog? obviously not for 100-plus years. >> reporter: groundhogs live 14 years. i have to mention his rival rodent. staton island chuck, no shadow. megyn: how much would could a woodchuck chuck if a woodchuck could chuck wood?

>> reporter: they did not tell me. megyn: how many pounds of wood? >> reporter: 10 pounds. megyn: 700. pace for being here. that's sweet. he is a best-selling country star. john rich is fired up and here. he joins me live in the studio just ahead. plus "kelly's court" convenes in three minutes on this. . today a teenager in this basketball is already talking about a civil suit screaming cops were out of bounds.

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megyn: president obama getting outside the beltway to promote his economic agenda. he is touring local businesses. a town hall event that he will be holding there. you can see them sitting out. we were told there could be some protests by folks aligned with the t.e.a. party movement. we have a reporter on the scene. here in new hampshire he will highlight his plan to invest $30 billion in a new fund for

small businesses funding tax cuts and lending. foxnews.com is hosting a live chat. what are they saying? trace: more of a monologue than a dialogue because i can't check back. i am getting there. i want to say this is. how about cutting a salary. the fat cats are in washington, d.c., not on wall street. why can't we just send the stimulus money back to the taxpayers? if you want the economy to start moving place the money back into the hands of the citizens. you would see businesses popping up everywhere. an entrepreneurs would come out of the woodworks. just give the money back. if most americans took a pay cut last year by to the government did pay raises? i'm sure that is some cute thing. that is who he is. we are going to chat back. megyn: thanks, trace.

well, "kelly's court" is back in session. electroshock and awe after a night of high school hoops gone haywire. watch it. getting the business end of a stun gun or was it a taser as officers tried to bring the main they under control? a scuffle between two girls turned into a youthful basketball. one of the teens, we saw the one in the gray t-shirt, set to press charges of his own. so was this effective crowd control or was it excessive force? let's ask our panel. we have never done "kelly's

court" like this. >> i'm not sure i like it. >> reporter: congratulations. i am in awe of this. megyn: so great to have you here. now the one who is in the white t-shirt. his name is mario. he is 15. his parents are ticked. he was manhandled. he was either stunned or tazed. now they want to sue saying the cops went way overboard. >> when i first once did i thought maybe there is a lot going on. the audacity of them to even claim that the cops did anything wrong is incredible to me. he is being escorted out. think about the situation. 1,500 kids. terrible rivalry between the two teams. trying to get this under control. four cops. three of us and then one of the person. 1,500 kids.

he start of walking out. he breaks away and starts to run away. that is when it happens. there is no crime here. these cops acted precisely with the amount of force they should have acted. >> 1,500 kids. they say it was a near riot. they claim they ordered him to stop and he didn't. >> looking at the videotape, walking out with his coach. don't point at me instead walking away. the coach is naturally nose to nose. go get him. that was outrageous of the coach. this kid was doing nothing. i wanted to see my sister. his arms at his side. megyn: does that not justify what the police did? hey, stop that did. they were told stop him. >> they don't need it. the cops are there. they are walking ticket out. he breaks away from them.

megyn: is bad enough ugh to stun gun him? >> put yourself. put yourself there. four cops trying to contain this. all the ingredients of a riot. girls are fighting. it spells out and bleeds over to other places. all of this going on. you tell me, even if you wouldn't use the stun gun, is it reasonable for him to have used it? the kid admitted, he actually said this, maybe i should not have snapped. his mother said he wasn't be having the right way. we understand that, yes, and he was fleeing from the cops. >> a situation like that. if your kid is there and he finds himself embroiled in what is happening nearby that he has nothing to do with. the cops have stun guns. would you tell him to run? i would tell him to run. >> he is 15.

i just want to look for my sister. of the beholder. let's talk about security. metal detectors. they didn't need to use done guns. 85,000 volts. megyn: less painful than the taser. >> 85,000. megyn: another kid. there is another kid. he is in a gray sweatshirt. also an issue about him and whether the cops actually did stand and. you can see he is in some sort of verbal altercation with the police officer. then i can't see what that is. >> that is the stand and. megyn: now they have him down on the ground. he fights back a little. megyn: he gives them a little. >> he got stand. >> is that happening yet. stay with it a little longer.

while we talk. but the stun gun to him and threaten some. he does not reaction. no impact, no effect. you don't see any light to be done see anything. he would have to show he has marks. and the stun guns will indicate. said this is an easy thing. >> there. right there. >> that is fine. would you want your kid to run toward the exit? that is rare that other fellow was being escorted to. he turned around to run back toward the man. megyn: his mom was in the cafeteria. that is where the melee was. >> he breaks away and starts to run. >> the police have all this training. they understand what to do. coming out with a stun guns and stand and in this port kid at 15 15 years of age is outrageous. a little bit different. i do agree.

he threw off his jacket. he did not need to threaten them. down on the ground. knee to his back. completely subdued. megyn: whatever happened to good old fashioned police billy club. >> take out the billy club. surrounded by 1,000 kids. they're all yelling. tell me. megyn: all right. than they said reportedly many, many cops. they issued a call. >> who is making this videotape. i would love to have see additional video. megyn: they don't know what is happening. it is a melee. >> they have got the training. they understand how to deal with crowd control. i think it went beyond. you know what, did you see what

happened? then the writer really began. then the kids were screaming and pushing. that is what happened. >> people get seriously hurt. >> metal detectors. megyn: you run to mommy. you good boy. all right. thank you so much. what the police did to the one kid. it may seem like an overreaction. police do not have the luxury of our hindsight. clearly they judged wrongly s ince this kid was not causing trouble, but is that grounds for a lawsuit for criminal charges as the parents are now suggesting? absolutely not. just ahead, it seemed like a good idea at the time. an old car exhaust pipe, gas, gunpowder, and presto, rocket. the update from the hospital. plus john rich. the song hitting close to home

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megyn: is that not great? it has become an anthem for america's working class. it is called "shutting detroit down." slamming big bailouts and bonuses, something that has obviously cut a chord with many of his f his fans. welcome.

>> congratulations. megyn: we have something else in common. >> we sure do. megyn: we both a baby boys. >> we sure do. megyn: congratulations. i brought you a present. this is from cash. my favorite singer, johnny. i crawled the line. megyn: this is the coolest thing. i love it. thank you so much. so consider it. you give me a gibson guitar. >> can you play sweet home alabama" yet? megyn: not exactly. it is out of my league. we have become a populist icon. people in wall street or washington get it. there is a gap between what think and the people on mainstream think. have they gotten any better? >> i think it is even worse.

for me, i am a conservative guy, but i have to tell you, when i look at the republican leaders that i've thought a lot of before i looked up their voting records and the amount of millions of dollars they were packing on the stimulus bills and stuff. isn't this the guy that was just bitching and complaining about this exact bill. the guy has got $9 million. what is going on around here. at i think that general sentiment is across our country no matter what party you belong to or where you come from. there is just a level of disgust and distrust in general. megyn: what made you start doing this. you wrote. >> wrote a song with john mccain. megyn: which is also very catchy. a little political activism. you met sarah palin and john mccain. you don't see that a lot from country stars. occasionally. >> the entertainment business. if you ever have an opinion that

you actually voice, especially if it is a conservative opinion, and generally you will take a beating. megyn: is that true? >> just true in the entertainment business in general for the most part. something a lot of artists are afraid to do. man, i don't know. what if somebody doesn't book me for a show or won't play my song. i get penalized for having an opinion. i will say that i have not been penalized. being an american is part of it. certainly the stations might not play your song because the guy that runs it might not share your opinion. i'll show him. somebody might not book you for a concert. but if everybody likes to you are not rocking hard enough. megyn: isn't that sad that just because you have a view point that is different you?

>> cry about it. megyn: this anger. that's your opinion. my opinion. >> not with me. still tour with them. the thing is america is about debate. you should be able to debate and express your opinion. i'm doing a tour called "taking our country back" tour. basically they are going to be rallying points for people that are sitting around does anybody else feel like i feel? the answer is, yeah. megyn: is it like the t.e.a. party movement? >> maybe kind of in that it is non-partisan. it is american. for people that feel disgusted and like they don't have a voice. you know how you fix problems in america? you vote. this year there is going to be republicans and democrats that get voted out.

people voted in. "taking our country back" tour is a rallying point. megyn: we are going to be talking a lot with two guys on both sides of the aisle on both the polls in november. before i let you go. >> it's awesome. his pappy is a pistol. he's a son of a gun. if anybody is watching. it is glen beck, dick morris, me, and gretchen wilson. megyn: thank you so much. >> congratulations. megyn: you are a class act. well, new polling today suggesting yet another democratic senator may be in deep trouble. we will show you where the balance of power would stand the election were held today. at the top of the hour, his numbers are eye opening. also his neighbors say he had a reputation for doing crazy things that parties.

a 62-year-old man filled a car exhaust pipe with gasoline and gunpowder. the unfortunate results next. >> i don't know what it was, but i can tell you it was a loud boom. >> it sounded like something a teenager would do. take a lot of alcohol. an explosion. >> he must be out of his mind.

megyn: ever feel like taking a ride on a supersonic sled? here is a tip, don't. a 62-year-old michigan man is now recovering from second-degree burns over 20% of his body. he hosted a sledding party which sounds innocent enough. cops say he wanted an extra burst of speed to create a

rocket-launcher effect. so he did what any non-thinking person would do. he filled the car muffler with gasoline and gunpowder, had someone strap it to his back, and had someone light it. >> one big bang. >> i have done dumb things. megyn: in case you could not see this one coming cops say alcohol was a factor. no charges have been filed. locals say he is known for doing outrageous things at his intimate sledding parties. all the best to him in his recovery. on a different note to the heads of the nation's top intelligence agencies have been called to the capitol today. the senate intelligence committee grilling them about the security threats facing our country and what happened before and after that bombing attempt on board the northwest flight on christmas day. katherine harris is live in d.c.

what do we expected this year and? >> reporter: first of all this is really one of the most highly anticipated hearings from the national history perspective. this is when we have the nation's top official, dennis blair. along with the cia director. on the domestic side we have the fbi director. they all go before the senate committee. this is where we think that threats are in the short-term, medium-term. now that you have that information here is how we think the money and resources ought to be allocated. from a nuts and bolts point of view this rally is one of the marquee events on the calendar this afternoon the. megyn: i can as soon begin expect more questions about this decision. >> i think we can expect fairly aggressive questioning of the witnesses. the decision by the justice department, specifically the attorney general to hand him over to the criminal courts

rather than retain him in the military court. our first and really care about ten days ago when the chair of the committee, dianne feinstein, a democrat, said it publicly that she felt abdulmutallab should have been transferred to the high-value interrogation group. megyn: before i let you go what is the latest on janet napolitano missing a briefing? >> reporter: the nuts and bolts are that last week the secretary of homeland security did not testify before the head of homeland security committee. her staffers say that the committee knew this well in advance. she had a very fluid foreign travel itinerary. experts they knew a substitute would be coming, but it was only at that hearing they made loud

noises about that and their objections. megyn: watching all of this. she will bring us updates. well, when president bush made a big push for abstinence-only sex-ed programs some people openly mocked him. we will show you who is smiling today. plus a stomach churning report out today about a prepackaged salads. if you have not had lunch yet, you might want to wait for this one.

megyn: fox news alert. we are moments away from a presidential town hall meeting where president obama will be launching a full core press to convince the american people he has a handle on the financial situation.

we expect the president to tell folks jobs will be his number one priority in 2010. and to help create more jobs he will focus on helping small businesses. already, his plan is coming under fire. our own molly men even ber mol s traveling with the president. >> welcome back and congratulations on your new show. i'm so happy to be on your show. as far as the presidents' day. the obama administration believes small businesses need money, need capital, need access to loans so they can expand and hire new people. he wants congress to enact the creation of the small business lending fund. it would be $30 billion that big

banks paid back to the government from the $700 billion tarp billout fund. that would go to small and community banks in the form of loan financing. the banks would owe the government less money in certain taxes if they increased their lending to small businesses. the obama administration hopes it would make it easier for mail businesses to get loans. >> apparently there is some objection to this. >> the strong objection from senator judd greggg. he has a strong objection to this he says that's not what tarp money is meant to do. it was written so any money recouped by the government would be used to pay down the deficit. he says it's not supposed to

become, quote, a piggy bank. megyn: thank you so much, molly. while we wait to hear from the president we would like to hear from you. how do you think america should solve its jobs crisis and what do you think the president will say today. our own trace gallagher will be reading your comments on the air. trace can't talk back to you yet, but we are fixing that. that's no reason not to tell him what's on your mind. it's foxnews.com/america chat. you can email me at kelly@foxnews.com. recent polls show that this could be just the beginning of the democrats' problems in 2010. a number of big-name democrats

are in real trouble, now trailing their challengers who they were once projected to win over. majority leader harry reid of nevada. republican turned democrat arlen specter in pennsylvania. and arkansas' blanch lincoln. afternoon, gentlemen. >> good to be with you, kelly. >> some political analysts are predicting bloodbaths when it comes to republicans taking over seats in the house and senate. >> it could be worse than bloodbath for the obama administration. the possible scenario is democrats hold 52 senate seats. that's not enough to ram your program through congress. but you still control the body.

so you can't turn as bill clinton did after the 1994 election and blame all your problems on the congress because your party still controls the congress. you could see republicans take one or both houses, who knows. but the worst case fear obama is if his partly holds on in name only. megyn: on camera and out in front of the scenes be many democrats are saying the scott brown thing is not necessarily a harbinger of things to come because martha coakley wasn't a strong candidate. the president is coming out early. just so our viewers know. we'll take some of this and dip in as he makes news. the glad handing is going on now. joe, weigh in on whether scott brown's election is potentially devastating for democrats in 2010. >> it's a sign democrats are in

trouble. i don't think any democrats would ignore that. the fact of the matter is whenever the president is in power, the party in power loses seats in a mid-term election. the question is how big those losses will go. what's mitigating that is people week john mccain is in trouble. richard bird in north carolina. this looks like an antieven couple bent fervor. -- an an tie incumbent fervor. the republicans are in trouble, too. it's get the guys out who got us into this mess whether they deserve it or not. megyn: let's listen to what president obama has to say. >> it's good to be back in new hampshire. some of you may remember i have spent a little time in this

state. i have had beersed a peddler's daughter. a scoop of. >> i cream at ice cream socials from dover to hudson. i have walked main street in concord. visited with folks in all 10 counties. i even once flew into the airport in myland which has got to be one of the only airports with a functioning wood stove. we spent a bunch of time in this gym, caused traffic jams several times. and just have a lot of good friends here in this state, here in this city, and here in this high school. so i'm just grateful to all of you for taking the time to be here. i have got a couple of special thank yous to say. please thank tim -- itting for

the wonderful -- time ditting for the wonderful introduction. i want to thank the principal. mayor donnelly is here. give her a big round of applau applause. [applause] *. >> your outstanding governor john lunch is here lunch is -- . congressman paul host. congresswoman carol porter.

and behind he the outstanding administrator for the small business administration who hails from these parts, care kan mills. i want to spend a bunch of time hearing from you answering your questions. but i want to make some brief remarks on the front end. i have had the privilege of getting to know people in new hampshire. i have seen firsthand that spirit of independence and self-reliance. i know how hard all of you work and how tough and resilient you are. but i also know that people here in new hampshire have been tested by the last two years just like people all across the country. we have gone through the deepest recession since the great depression and folks here have had their lives uprooted by lost jobs and foreclosed homes. shuttered businesses.

banished savings. many good hard working people who met their responsibilities are struggling in part because folks on wall street and people in washington didn't meet their responsibilities. so when i took office we knew the first thing we had to do was we had to break the back of this recession. sometimes that meant doing some things that weren't easy. doing some things that weren't popular. lord knows it wasn't popular to prevent our financial system from collapsing. we had to throw lifelines to some of the firms that helped cause this crisis in the first place, but it was the right thing to do. if we hadn't taken those steps the entire system could have gone down and taken our economy and millions much families and businesses with it. we couldn't afford that. because of the steps we have taken, the markets have now stablized. nobody is worried about another

great depression like they were a year ago and the worst of the storm has passed. i don't need to tell you the devastation remains. today one in 10 americans still can't find work. that's why jobs has to be our number one focus in 2010. [applause] >> and we are going to start where most new jobs start. with small businesses. these are the companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it's time she became her own boss. there are companies like aic energy -- a booster -- these folks are hard at work on a new

manufacturing process for ultraefficient l.e.d. lights that will make them more affordable for people all across the country and around the world. the technology they created is the only of its kind in the entire world. this little business just on amber street, but they have the potential to revolutionize an entire industry, right here. [applause] >> small businesses like arc energy have created 65% of all new jobs over the past decade and a half. we need to make it easier for them to open their doors, to expands their operations. to hire more workers. that's why i have proposed a new tax credit for more than one

million small businesses to hire new workers or raise wages. and a tax incentive for all businesses, large and small to invest in new plants and equipment. while we are at it we should eliminate all capital gains taxes on small business investment so these folks can get the capital they need to grow and create jobs and when they start making a profit they can put those profits back into the business. that's particularly critical right now because bank lending standard have tightened since the financial crisis. and many small businesses are actual struggling to get loans. that's why todayy announcing a pro -- that's why today i'm announcing a proposal to take the money that was repaid by wall street banks, take that $30 billion and use is to create a small business lending fund to provide capital for banks on

main street. [applause] >> it's the small local banks that work most closely with small business. they usually provide them their first loan. they watch them grow through good times and bad. the more loans these smaller banks provide the better deal we'll give them on this fund we set up. if you combine it with my proposal to increase guarantees for abs-backed loans -- for sba-backed loans, it will help insure small businesses are once again the engine of job growth in america. i'm convinced we can make that happen. just one example of what we have been doing to create jobs this past year. some of you might remember last february we passed the recovery act which had three parts.

one-third was tax relief for small businesses and for 95% of working families. one-third of the recovery act was emergency relief like increasing unemployment benefits and helping states keep teachers and police officers and firefighters from losing their jobs. and one-third was putting people to work on infrastructure and renewable energy and medical research and more. now, if you hear some of the critics, they will say the recovery act, i don't know if that's really worked. because we still have high unemployment. but what they fail to understand is that every economist on the left and the right has said because of the recovery act, what we have started to see is at least a couple of million jobs that have either been created or would have been lost. the problem is 7 million jobs

were lost during the course of this recession. so we still have a big hole to fill. it's going to be absolutely critical that congress acts over the next several months to make sure we don't lose sight of the fact that even though the economy is not growing again, almost 6% last quarter, people have not started hiring again. we have to do everything we can to put people back to work because we need a sustainable recovery over the long term. i have got to be honest with you. there is no magic wand that makes the economic problems that were years in the making disappear overnight. sometimes it's easy for politicians to exploit the anger, the pain people are feeling right now. i have to point out that some of the same folks in congress who oppose the recovery act and claim it hasn't worked have been

all too happy to claim credit for recovery act projects and the jobs those projects produce. they come to the ribbon cuttin cuttings -- they found a way to have their cake and vote against it, too. we are making progress. but it can't come fast enough. we want to accelerate. and we know if we truly want to have long-term economic growth in this country, that when need to start addressing some of the struggles the middle class families have been dealing with for years. long before this particular recession hit. this past decade has been one of the toughest our middle class has faced in generations. folks have seen their paychecks shrink, their housing prices fall, while the cost of everything from groceries to healthcare to college keeps going up. so a lot of you are working two

jobs. certainly everybody in your household is working. you are working longer hours. but you feel like you are treading water. in some cases, it's not adding up. a lot of people put their kids to bed wondering whether they will be able to give them opportunities in life that they got from their parents. and the thing new hampshire when i was up here campaigning. i didn't run for president to kick these challenges down the road. i didn't run for president to play it safe to keep my poll numbers high for the next election. i ran to solve problems for the next generation. i ran to get the hard things done. that's why you elected me. [applause] >> so i won't rest until businesses are hiring again and wages are rising and the middle

class is thriving again and we finally have an economy that works for all americans. not just some americans. i won't rest until we do what we know has to be done to secure our leadership in the 21st century. i won't want to cede our future to china, india and european countries. i'm not willing to settle for second place. not for the united states of america. but if we are going to win the race, here is the thing. i can't do this alone. democrats can't do it alone. the president can't do it alone. we have got two parties in this country. that's a good thing. it means we have heated debates and vigorous disagreements. and as messy as democracy sometimes is, bad ideas can be restarted and good ones can be

refined. we don't go too far in any one extreme. so i was pleased when the house republican caucus invited me to attend a retreat last week. we had a good time for more than an hour. more than an hour we had a frank exchange about the issues facing our country. we aired some of our grievances. we shared ideas. there were plenty of things on which we didn't agree. but there were also things on which we did. even more so. things that we should agree on if we could just focus on solving problems instead of scoring political points. now -- [applause] >> we all agree education is the key to a 21st century economy. we all -- we all agree that the

best antipoverty program around is a world class education. so why don't we work together to transform our schools so that every child in america can compete with their counterparts around the world. let's work together to upgrade our community colleges which are the gateway to a career for so many children in so many working families. i know we have a lot of young people about to head off to college. a high school diploma is no longer a guarantee of a good job. let's make college affordable for every qualified student. [applause] >> grad should have to pay more than 10% of his or her income on

student loans each year. we can see to it that they don't. we have got legislation pending right now that can make this happen. the republicans and democrats may not see eye to eye on the threat of global warming. i happen to think the evidence is overwhelming. some disagree. we can have a respectful argument there. but shouldn't we agree that american home grown energy is good for our security and that new clean energy jobs are good for our economy? [applause] >> can't we all agree these jobs shouldn't be going to germany or china or spain? they should be right here in the united states of america. so let's invest in innovation.

let's put people to work on solar panels and wind towers and cutting-edge batteries. the nation that leads the clean energy economy will be the nation that leads the global economy, and america has to be that nation. [applause] >> these are key parts of the foundation we need to built for a better future for our families and country. another foundation stone is fixing a health insurance system that works better for the insurance industry than it does for the american people. i do not quit. we are going to get that done. nobody -- [applause] >> we have got to get it done.

we have to get it done! [applause] >> nobody should be satisfied with a system that allows insurance companies to deny care to folks with preexisting conditions. that allows insurance companies to kick people off their plans when they get too sick. nobody should accept a system where small businesses are forced to pay outrageous premiums to get their workers covered and seniors have big gaps in their prescription medication coverage. and millions lose their coverage all together. there was a report the other day that showed even greater numbers of americans now are having to rely on government insurance. not because of my plan, but

because employer-based insurance has declined to an all-time low. now, these are the things that i hear about every day in the letters i get from families going bankrupt, from small businesses crushed by their healthcare costs. so i'm not going to walk away from these efforts. i'll not walk away from these people. and congress shouldn't either. we should keep working to get it done. democrats and republicans together. let's get it done this year. [applause] >> now, finally, we should all be able to agree we have got to

do something about our long-term deficits. these deficits won't yub burden our -- won't just burden our kids and grandkids. they can drive up your interest rates now. they could jeopardize our recovery right now. responsible families don't do their budgets the way the federal government does. right? when times are tough, you tighten your belts. you don't go buying a boat when you can barely pay your mortgage. you don't blow a bunch of cash on vegas when you are trying to save for college. you prioritize. it's time your government did the same. that's why i continue to insist on making investments for job growth this year, why i continue to insist we put more money into education. that'sy say we put more money into science and technology for

innovation. that's why i continue to believe that we have got to invest in our infrastructure so we are building the kind of america that can compete in the 21st century. those are smart investments. buying a new boiler if it's busted. if the roof is leaking you have got to fix the roof. there are some things you have got to do. but you can put off buying the new curtains. even if it's nays t nice to hav. remodeling the bathroom. everything is working. don't need it right now. we have people who want to buy the curtains and not fix the boiler. i propose cutting 120 government programs. consolidating ones that are

duplicating or just don't work. that's why i propose to cap spending the next three years. our national security and social security will not be affected. but all other discretionary government programs will. it doesn't mean we have to do less. it means we have to do more with the money we have got. that's why i'm grateful that both the house and the senate have voted to reinstate what is called a pay-go rule. it means pay-as-you-go. by the way, that is not to be confused with palms wife pego. though i like her, too. so the pay-go rule helped create

those record surpluses back in the 1990s. instead of the record deficits that we had when i came into office. the concept here is very simple. you want to start a new program, go ahead. but you have got to cut another one to pay for it. that's how we'll make sure we are spending your money wisely. you want to cut taxes for somebody, that might be a good idea, but you have got to find a way to close the revenue hole. so that everything actually adds up. that's how we'll get our deficit under control. that is something that democrats and republicans should be able to agree to. if we can just stop playing politics. get past the washington games. [applause] let me just give you an example

here. the other side says look at all these trillions of dollars of debt. absolutely. i'm concerned about it have much. it keeps m -- i'm concerned abor much. the only way we'll fix it is if both part why its come together and start making tough decisions about our long-term priorities. last week the senate blocked a law that i supported to create a fiscal commission to cut the deficit in the long term. it's only going to be solved if we do it together. this lawed failed by 7 votes. when 7 republicans who had co-sponsored the bill -- they

co-sponsored the idea. suddenly walked away from their own proposal after i endorsed it. so they make a proposal. they sign onto the bill. i say great, good idea. i turn around -- they are gone. what happened? it's one thing to have an honest difference of opinion on something. there is nothing wrong with that. but you can't walk away from your responsibilities to confront the challenges facing the country because you don't think it's good short-term politics. we can't afford that. [applause] >> we can't afford that.

the message you all sent when you elected me, the message that was sent this past month, whether you are democrat, republican, independent, you are out of patience with this kind of business as usual. you want us to start worrying less about our jobs and more about your jobs. [applause] >> you want us to worry less about our election and more about solving your problems. for once you would like a government that reflects a sense of responsibility and decency and generosity because that's how you try to live your lives. that's the spirit that led student to spring into action in the wake of the tragedy in haiti. i want to congratulate you for

hosting fun raisers all to help folks they have never known in a place most of them have never been. [applause] that's -- i'm proud of you for that. that's good work. that's good work! it's that same spirit that drives small business owners like tim and kayla, the ceo of arc energy. the two guys running it right here. now, he found arc, but he also years before cofounded a company called gt solar.

with just $1,000. it has 343 employ yeses, hundreds of millions in -- he hate 343 employees. hundreds of millions in revenu revenues. when the company hit hard times he cut his own salary first. when talking about his business philosophy he explained many ceos take a me, me and me approach. but his approach has been "we." not just benefiting himself, but lifting his employees, too in his community. we need that kind of spirit. we have come through a tough year and a tough decade. but that fundamental decency, that sense of determination, that grit, that willingness to work hard in pursuit of the good

idea, the determination to do what's right, that's been at core of the american experience. and that should fill us all with optimism about what lies ahead. let's put aside the small things. let's come together. let's do what's hard. let's welcome what's hard. let's welcome the challenge. let's do what's necessary to help the middle class and give our kids a shot at their dreams again and fulfill the promise of this great country in our time, in our generation. that's our task. thank you very much, everybody. god bless. god bless the united states of america! thank you. thank you. thank you. thank you, guys. thank you.

megyn: there you have it, president obama addressing a town hall meeting in nashua, new hampshire. he said we have got to get it done. borrowing a line from larry the cable guy in response to which he got a standing ovation on healthcare. he said with respect to the nation's deficit and the red ink, quote, we inherited most of it. a clear reference to president bush and the eight years he was in office. we'll take a his to the questions he gets from the folks in the audience and see what headlines come out of that. >> there are microphones in the audience. and i will try to get in as many questions as possible. and it will be nice if you introduce yourself so people know who you are and don't yell out. just raise your hand and i'll call on you. though she seems very eager.

go ahead. hey. how did this connecticut person sneak in here. go ahead. i love people in connecticut. go ahead. >> due to the great income this country, i'm a three-time cancer survivor. >> we are proud of you. >> but like many cancer patients was pushed out of a job. i was lucky enough to be able to retire early, buy into the retirees health plan and start my own successful business. however, this is not the case for most people with chronic illnesses. healthcare for cancer survivors is more expensive. how is the jobs bill going to act for the needs of cancer survivors? >> first of all, we are proud of you, you look great.

you agree. you should. you look good, too. there are a couple aspects of this. first of all i think we shouldn't lose sight of the enormous potential in new branches of medicine. to go after cancer. i was over at nih, national institute for health. we increased funding drastically. this is an area that should be one of our competitive advantages. we have traditionally let in innovation. and the more money we are putting in -- they are starting to come up with drugs that only kill the cancer cells and don't kill healthy cells. or that can be tailored to a

particular kind of cancer that's matched up because of new genetic information. there is enormous potential here to go after cures. and that involves the kind of research and investment that we have made. in our healthcare bill, one of the most important components was the idea, the basic principle, that nobody should have to go without health insurance because of a preexisting condition. [applause] >> nobody should have to go without health insurance because of a preexisting condition. this is something that's very popular. if you just say it in isolation. but when you start explaining what is required to make that happen, then sometimes some people get a little nervous. you can't have insurance companies have to take somebody

who is sick, who has a preexisting condition if you don't have everybody covered. or at least almost everybody covered. the reason, if you think about it is simple. if you had a situation where not everybody was covered, but an insurance company had to take you because you were sick, everybody would wait until they got sick, then they would buy insurance. so the potential would be there to game the system. the reason i point that out is because a lot of the reforms that we proposed fit together. so we want insurance reforms to make sure a cancer survivor can still get health insurance. but to do that, we want to make sure everybody has health insurance. which in turn allows us to cut back on some wasteful spending and help upgrade the hospitals, and doctors and how they perform

medicine because now they are not dealing with as many emergency room patients. the cost control aspects of it, the coverage aspects of it, and the insurance reform aspects of it all fit together. here is the problem, though, when you have got all those things stringed together it ends up being a complicated bill and it's easy to scare the daylights out of people. but here is the good news. we are essentially on the 5 yard line for those of you who like football analogies. we have had to go into overtime. but we are now in the red zone. that's exactly right. we are in the red zone. we have got to punch it through. what i have said is that both the house bill and the senate bill were 90% there.

10% of each bill people had some problems with and legitimately so. so we are just about to clean those up then massachusetts election happened, suddenly everybody says, it's over. well, no, it's not over. we just have to make sure that we move methodically and the american people understand what's in the bill. what i have done -- i have said to the republicans. show me what you have got. you have been sitting on the sidelines criticizing what we are proposing. i'm happy to defend the insurance reforms. i'm happy to defend the fact that we need to provide 30 million people with access to coverage. i'm happy to defend the need to provide small businesses and the ability to pool so that they can have the same purchasing power

that the big companies have and drive down their premiums and rates for their employees. i'm happy to have these debates. i just want to see what else you have got. if you have got a good idea, great. you know, as a republican caucus they held up, they said, we have got a plan. it will provide everybody coverage at no cost. i said, well, if that were true, why wouldn't i take it? my wife michelle thinks i'm stubborn sometimes, but i'm not that stubborn. let me think. i could have everybody get healthcare coverage that's high quality, and it's free which i'll bet is really popular. but i'm not going to do that -- i'm going to go through the pain of really working through this hard process in congress, getting yelled at and called socialist because that's how i

roll. i'm a glutton for punishment. if it were easy and simple, first all, somebody would have done it before. seven presidents have failed at this. seven congresses have failed at this. if this was simple it would have already been done. it's not. this is 1/6 of our economy and it's extremely complex. the healthcare proposal we put forward is basically the same shape as the proposal put forward by tom daschle. former senate democratic majority leader. bob dole and howard baker. two republican senate leaders. so it can't be that radical. it's a fairly straightforward principle that says we are going to set up an exchange, a pool where people who don't have

health insurance, small businesses who can't afford it can buy into the pool. even after we have driven premiums down because of increased competition and choice, you still can't afford it we'll give you a sun a subsi, depending on your income. we ask that everybody get health insurance. but if you still can't afford it, we'll help you. we'll insist the insurance companies abide by certain practices like making sure you take people with preexisting conditions, that you don't drop people just because they get sick. we then say we have to control the cost of medicine so we are going to set up a panel of experts, doctors, and healthcare economists, we are going to scrutinize how we reup burst things like immediate -- how we reimburse things like medicare.

don't order five tests if you can do one test and email it to five different doctors. pretty straightforward. now, what i just described is the essence of what we are doing. according to the congressional budget office, it would save $1 trillion in our deficits. which is the single most important thing we can do, by the way, to reduce our deficit over the long term. almost all the growth and deficit has nothing to do with my recovery act, and has everything to do with the growing cost of medicare and medicaid. almost all of it. we project that 20-30 years. almost all the growth is because healthcare costs are going out of control and we have an older population that will need more care. if we can't figure out how to get bigger bang for the buck, we'll lose. if you have got a better idea, bring it on. but i will not stop working on

this issue because it is the right thing to do for america and you need to let your members of congress know they shouldn't give up, they should keep on pushing to make it happen. all right? megyn: there you have it. a rather long answer to a question about healthcare from a recovering cancer patient. it just so happens here on the set with me i have dr. marc siegel, a fox news contributor. he has some thoughts about the president's answer. you talked about the president's claim that the healthcare reform proposed will not lead to problems in the e.r., in fact it will streamline things in the e.r. for patients and you take issue with that. >> there is a lot of evidence he's wrong. studies have shown medicaid patients are twice as likely to use the emergency room unnecessarily than people without insurance. if we give more people medicaid they will go to the e.r.s

because we don't have the doctors to take care of them. in massachusetts when the universal healthcare was passed more people used the e.r. because of a shortage of doctor. they can't find doctors to take medicaid or hmo-style insurance. megyn: what does that mean for people going to the e.r. >> they are not going to get taken care of if they have life-threatening conditions. people will wait in doctors offices, but also the emergency room. megyn: it seems impossible to believe that the e.r. wait could get any longer. he spoke to the woman who raised a question about her cancer therapy and said don't worry, under my plan you would get the cancer therapy that you need. there are is some question about that? >> with all due respect to the president there is a cancer survivor. he's saying you are going to get this targeted therapy. it's $50,000 to $100,000 for the

current targeted therapies we have, without even considering what's in the pipeline. that's what it costs. and the newer ones are even more expensive. do you think a one-size fits all insurance will pay for that? what is going to happen to premiums? they will skyrocket. tremendous costs involved with this situation. it's a collision of cultures. if you are going to try to cover modern technology you can't extent it across the board without reforming what we currently have. >> as a track tall matter what would happen -- as a practical matter what would happen? >> not in canada, mott in europe. those their -- not in europe. those therapies are denied. what about affordability of insurance? if you repeal the laws and allow there to be competition across state lines, then the cost of

premiums might go down. the way he's heading the new technologies will not be cover covered. megyn: my apologies. the president is streaming live on foxnews.com if you want to continue with the q & a. on the subject of reaching out to republicans. show me what you have got. malpractice reform. some democrats say it's kind of already in there. tort reform. what needs to happen. >> there is no tort reform. what tort reform is about is cutting dunn on frivolous -- it dozening down on -- it's about cutting down on frivolous lawsuits. more payment out of pocket. make people pay for the care they need. when i go back to my office i will see a lot of patients that don't need to be there because they have the kind of insurance that will allow them into the

doctor's office unnecessarily. the health reform bills don't look at that. it will lead to more and more overuse. too costly and we can't pay for it. >> it doesn't address the question where the doctors are coming from. >> and how we'll cover technology. megyn: we had dr. siegel here because he was going to talk about why you should not eat food packaged lettuce. there is an issue. now, hold that thought. we having him back tomorrow. just put it in the refrigerator for now. this time tomorrow we'll educate you on why you really need to wash it. even fit says it's been washed. but in three minutes here. while we have been on television. john mccain has been in a senate hearing room sharing powerful remarks on the plan to change the rules on georgia g gay snrke

military. @=h

megyn: welcome back. america's top military leaders are saying gays should be allowed to serve openly in the military. defense secretary robert gates along with admiral mike mullen gave testimony on the policy of don't ask, don't tell. what do you know about the review of this policy that's been announced just now by defense secretary gates? >> he announced jay johnson, the legal counsel of the department of defense and general carter hamm will lead the charge reviewing all the issues involved with repealing don't repealing don't ask, don't tell. here's secretary gates making his case early today. >> mr. chairman, speaking for myself and myself only, it is my

personal belief that allowing gays and lesbians to serve openly would be the right thing to do. no matter how i look at the issue, i cannot escape being have in place a policy which forces young men and women to lie about who they are in order to defend their fellow citizens. >> the criticism comes from republican john mccain who is a former p.o.w. he says don't ask-don't tell has worked. >> it would be far more appropriate to determine whether repeal of this law is appropriate and what effects it would have on the readiness and effectiveness of the military before deciding on whether we should repeal the law. >> mccain and a lot of republicans think this is the wrong time to be changing this policy with the u.s. military fighting wars in iraq and afghanistan. megyn: just ahead.

scary new reports about safety in the skies. thousands of flights reportedly take off despite serious safety concerns. might you be on one of them? stay tuned. ún for all the momee every day special.

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to open the door and let life come in. say hello to the people who are taking a different view on security for your home and business. a broader view. broadview security. ♪ >> chalk up up for abstinence a study finds the approach is an effective form of sex education. in fact it's the most effective. researchers followed a group of 6th and 7th graders for two years. of the students to learned of dolphins and safe sex, nearly half from sexually active in two years. the group of student taught abstinence the number fell to a third. the study was funded by the national institute of health. in you have thoughts on that or other stories, email them to us it's a kelly@foxnews.c