>> brian: make it a great weekend. >> steve: bye-bye. we've into the a supersoaker, drenching the east coast, man, it is nasty outside, from the carolinas all the way up to new england, millions affected by this monster storm, moving arplt you're looking at pictures out of new york, new jersey, philadelphia. for some, more rain that is fallen in one hour than during the entire summer, 20 inches in wilmington, north carolina, in a moment, live to the travel nightmare developing. we'll be in pennsylvania where the water is rising at the moment here. stay tuned for that. there is news on mcdonald's, and an apparent big beef over health care.

we mentioned this story yesterday. the white house now says it's willing to work with the fast-food giant in an effort to save the health care plans of more than 30,000 americans working for mickey d's. good morning, everybody. there is a little back and forth a little yesterday, weren't quite sure what the truth is. it's back again today. i'm bill hemmer. we are dry on the inside. martha: we are now, after driving in through that water this morning. good morning, everybody, i'm martha maccallum, bill, good to see you. here's the deal, it all started with a report that mcdonald's had a new problem in theorylation in president obama's overhaul, mcdonald's and the white house, denied these reports yesterday, and they said that health benefits to their employees, mcdonald's did, would not be cut. bill: this is a far reaching story. not just with mcdonald's. the administration says the health and human services secretary will, quote, exercise her discretion in enforcing the new requirements. what does that mean? mcdonald's is not the only business questioning the new law, as i mentioned.

stuart varney, host of varney & company, what gives today? yesterday it was a bit of a gray area. >> this was a very significant story because you may be witnessing the unraveling of one part of a health care reform. there are lots of companies like mcdonald's which have a lot of low wage employees who get this kind of mini-med coverage, which is at stake here. mcdonald's says health care reform will make it too expensive, we can't afford it, the health and human services comes back and says we'll be flexible. there's all kinds of speculation that an entire industry, a whole swatch of low wage workers will get a special exemption from the new rules of health care reform, which would be a form of unraveling of the whole of health care. think about it. you've got 1.4 million workers in america who get this mini-med coverage, which mcdonald's says is going to be made too expensive in health care reform. other companies which have

similar work forces, earth tpharbgs cvs, home depot, caremark, staples, there's a whole lot of them. now, if you get a waiver for all of those workers, they're not subject to some of the new rules in health care recommend, you are watching the unraveling of health care reform. that's why this is such a big story. bill: because the threat with mcdonald's is going to drop its employees off the plan. that would be a disaster. >> it would be a disaster for the public image of health care reform, because you'd be dropping 30,000 workers into the uninsured pool. that's what you would be doing. bill: stuart, thank you for that, follow it, okay? we're on it again today, stuart varney, 9:20 over at the fox business network. three minutes past. martha. martha: he is responsible for the murders of innocent people around the globe but now osama bin laden is apparently trying to get on the right side of the people in his country when it comes to flood relief in pakistan. listen to this, this is a new recording that is said to be from bin laden. and in it, he criticizing

muslim governments and calls for a creation of a relief body from war and floods. the message is the relief efforts have, quote, sinister purposes. bill: a memo to america's politicians, if you want to woeupb election day, you might want to contact bill clinton. brand new fox opinion dynamics polling, finding that voters favor clinton on the trail, 30 percent -- 39 percent saying they'd be more khraoeubgly to vote for a candidate if a person campaigns for them. a lot more of that polling coming up later. martha: that's very interesting. let's get back outside for a moment where it iseally messy, drenching rains from new york city all the way down east coast to the

carolinas, creating really dicey commutes this morning. some cities are getting more rain literally in just hours than we had all summer. remember how we were excited about the sunshine, all summer long? we're paying for it today and the past couple of days. so far the remnants of nicole, that's what we've been dealing with, are to blame in some cases up and down the east coast for five deaths that are being attributed to it. we have team coverage working on the weather, janice dean is in the weather summer, steve keelie from our philadelphia affiliate is outside the city of brotherly love and peter doocy is just outside here in new york city, wet and dangerous as well. let's get to peter first outside. >> reporter: martha, anybody watching this in the northeast should be warned, your employees are probably going to be late for work this morning. there are major delays up and down the east coast by air and by road and by rail. the airports here in the new york area have all been having problems throughout the morning. the worst is la guardia. at la guardia in the city, they just ended a ground

stop. what that means is that all flights heading this way have been held up from their departure points for the last few hours and they are just now allowed to start taking off for the big apple but they're subject to 3-hour delays on arrival, and one hour delays on departure. amtrak is also telling riders to expect delays, and they have canceled their express service here between new york and boston. so major roads here are flooded, too. across the hudson never -- river n. newark, on mccarter highway, there are a lot of cars this morning, people going to works and there's a lot of water, some people obviously misjudged how deep the water was and got stuck, so the morning rush in new york has caused major problems, and many of those same problems are going to be affecting people up north in the boston area and further north up to maine during their evening commute. some parts of massachusetts, already dealing with scattered power outages, there is standing water in some place, traffic is standing still, and officials are telling commuters they need to be on the lookout for delays and street flooding as they head

home today. so martha, for many on the east coast, the weekend cannot come soon enough. martha: boy, we are looking at incredible pictures out there, peter. people, you know, i had this experience this morning, the water is basically up above the tires of the car, and you get into that situation, not sure whether you should go forward or stay where you are and we all remember a week or so ago a poor woman was killed, she pulled her car over to the side and a tree fell on it. so it's dangerous out there. >> reporter: it is dangerous. people, if you can, stay home, and if you must go out, definitely be careful. martha: peter doocy, just outside our building in new york where you can see everybody going by with umbrellas this. is what it looks like in new jersey, i can attest to that. it's rough out there. bill: and parts of jersey, taking quite a baiting this morning. to give you an idea of how bad the flooding is, there are people that needed to be rescued. somehow this man ended up on top of this car, the vehicle submerged in flood waters in elizabeth, new jersey, not too far outside of new york,

fortunately rescue teams got him to safety. it takes a few inches of water to take you away and if there is standing water in the road, do not drive through it. martha: here are the storm fact, so far torrential rains have claimed the lives of five people. north carolina really got hit hard in this storm. it produced 21 inches of rain in wilmington, which also broke a record that was set 140 years ago. north carolina, the past two days, getting one third of the rainfall it usually gets in an entire year. that's pretty tough out there. bill: 21 inches? twenty-one? for any town in america, that would cause a mess. if you have pictures or videotape of the flooding, log on to foxnews.com, click on the you report section online, send pictures or videotape if you've taken it so far of the storm. certainly stay safe, don't put yourself in danger. but we'd like to see what it looks like where you're living. give us your name and location and a bit of an idea about what we're seeing online. fox news.com, you report. and open live right now.

martha: a president's house, set on fire, and he is taken hostage. war-like chaos in the streets. we're going to tell you where this scene is playing out. bill: also, there is a nasty campaign shaping up in california, the republican candidate for governor, meg whitman, accused of knowingly hiring an illegal immigrant. now whitman is fighting back and we have the former housekeeper's allegations of whether or not whitman is in trouble or not on this. martha: we're going to check this out and a state emergency declared li house -- by house minority leader john boehner, taking pelosi to task rolling out plans for when and if she becomes the next speaker. >> the house finds itself in a state of emergency. the -- the institution does not function, does not deliberate, and seems incapable of acting on the will of the american people.

martha: here's a story this morning that makes you realize the importance of stable government in sows eat because -- society because there is complete chaos playing out in ec wa dor, soldiers had to rescue their president after he was taken hostage at a hospital. >> incredible.

soldiers fired automatic weapons and grenades. the president was hospitalized in theo trapped in the hospital for four years, he was treated actually for tear gas exposure he got during a confrontation with angry police officers. at least three people died during the president's rescue. they have also closed airports and shut down several of the major highways. very tough situation. bill: back in this country now, state of emergency declared in the house. that's a message from the republican minority leader john boehner. he delivered a scathing criticism the way congress works, promising major congressional reforms if he becomes the next speaker. >> this dysfunction in congress is not new. both parties share the blame for this. but the dysfunction has now reached a tipping point. a point at which none of us can credibly deny that is having a negative effect on the people.

bill: that was a 45 minute speech, boehner saying that congress is voting and the way our polling looks, a lot of people agree, 72 percent disapproving of how congress is doing its job. and author of "losing our religion", welcome to you, kirsten powers, new york post columnist and fox news contributor, how you doing today? boehner's message was about government spending, the way you -- you find a way to either spend something or cut something depending upon how you're going to balance the books. what did you think of his message? >> cutgo is a great idea and for all the criticism from the left that the republicans don't bring ideas to the table, this is just one of a number of great ideas that i think average american voters can really appreciate, relate to, understand, grasp, it's not overly political. it's just common sense. it's the kind of common sense idea that voters want right now as opposed to stephen colbert doing comedy

in congress. bill: kirsten, does this sink in, because the thing that boehner did yesterday, he blamed both parties for dysfunction. >> yeah, well, i mean, both parties are responsible for dysfunction, but it's a very targeted message because the polls show that people are pretty equally unhappy with both parties. it's not like the republican party has a really great brand right now, and so i think that it's start messaging on his part. i think what democratso when democrats hear republicans talk about how they're going to cut spending, you look back to the last time they were in power and you think well, but you didn't really do it then, you actually oversaw the greatest expansion of government in the history of the country. bill: he recovered himself by blaming republicans and democrats in that sentence. >> but he was there. so i mean, it's nice to blame both people, but if you were in congress and let's face it, most of the people who are in the leadership and who are going to be in the leadership if they take over were there at the time. so i think people should be a little skeptical about

this. bill: skeptical? what do you think? >> democrats are desperate, and you see that in the taliban dan kind of attack ads, you see that in gloria allred, trotting out an illegal housekeeper, you see that in john kerry, blaming voter stupidity, the president -- angry tea party -- the president's angry tea partiers. bill: i -- do you think, is there a danger in talking too much about what you would do if you win? >> no, you can't -- democrats can't have it both ways. they can't yell at republicans for not bringing ideas and then scold john boehner for bringing his ideas up too quickly or before he's there. he's talking about what he would do, and that's what voters want to hear. bill: kirsten, his message to me sounded like reform, it sounded like something he's here at a tea party rally. it's almost like it was a

speech that was delivered with a wink wink. we can do this and we can do it with you! >> well, look, i don't begrudge him talking about what they would do if they would become in power and that's what they should do and let's face it, that's the direction things are moving at this point, so i think they are sort of beholden to do that, to lay out what they would do. i just think that we heard on both sides this happens, there's all these -- >> bill: well, we haven't heard leading democrats make a speech like this. >> no, but what i'm saying, when the republicans were in power and when the democrats were saying oh, we're going to take over and do all these things, i just really think voters have to take a lot of it with a grain of salt because often what we see in both parties is they make all the promises, they promise you the world and then they get in power and they don't do most of what they promise to do. bill: and that's the reason the tea party has shot up the way it has. that's what it always goes back to, right kir then.

>> i think that's probably right, i think they do represent people who are very unhappy with both parties, not just the democratic party, they are more republican for sure in terms of ideology, but they absolutely have disdain for the way the republican party behaved when they were in power. bill: and get in the last word. >> voters feet like -- feel like they want to be heard and understood and when pelosi calls critics of obamacare racist, they don't feel like they're being heard or respected. that's what november is going to be about. bill: s.e., kirsten, thanks, ladies, patient your time. stay dry if you can, all right? see you later. martha: joe biden says that this election, we were just talking about this, is democrats versus what he's calling alternative republicans. he's talking, of course, with the growing poll of the tea party. in a month, we will know for sure just how much power the tea party and this movement really has out there, and is it sustainable. we're going to talk to one

of its most outspoken members. bill: a gruesome crime, a mother and two daughters brutally murdered inside their home, now the father, dr. william petit is waiting for justice. today, closing arguments will get underway inside of a courtroom in connecticut. >> they killed the most important people in my life and i can't dignify that insinewation with a response and i think the evidence put on by the prosecution speaks for itself.

bill: it is an absolute mess in pennsylvania. fox weather alert now, nearly a foot of rain, thousands without power, and if you've seen the radar, this thing is a supersoaker. steve keelie is with wtxf in

kha*rtsworth, pennsylvania. how are things there? >> it's plain ugly and you know what 10 inches of rain equates to? every inch of rain equates to 10 inches of snow, so when you have 10 inches of rain, that's 100 inches of snow. we would have had 8 feet of snow. and what a year 2010 has been. we started out with more blizzards than on record and a week ago, it was reporting on a drought watch and this town right now, 10 inches of rain and you can see, still counting. we have a lot of local roads closed like this one and look what happens when you're a mail truck and you're trying to detour around a road closed sign, not stuck in the snow, stuck in the mud that he couldn't see because the water was this high, and the biggest danger on video right now, whenever you have floods from a hurricane or from a torrential downpour, they tell you never to drive around the road closed signs

but that's what we've seen. we've had rescues through sun roofs, you name it and they're still going on and it's keeping the fire department busy everywhere. this guy, like many people, driving through, realizing before he got to the deepest part to get out of there and back out. the only way out of this one neighborhood was to grab your bicycle, put it on your shoulder, and walk through chest-deep water to get to work like this guy did. as they come to another live picture, even the main roads are flooded, bill. this is route one, about half an hour drive outside feld. you can see this road is flooded. what happened here earlier, two trucks were driving side by side, they hit that big puddle there, hydroplaned and crashed into each other, bill. so it is very dangerous out here, not to mention the miles of backup now in every direction on almost every road around philadelphia. bill: a lot of that storm moving through in the dark of the night which made it even more dangerous. steve keelie, thank you, wtfx out on the road in

chadds forth, pennsylvania. martha: what is it like to really be on the front lines of the immigration battle? fox news going inside the legal process, spending a day in the orlando immigration office where officers decide who should and who should not become american citizens. orlando salinas joins us live on that in miami. >> reporter: martha, we spent several hours, just a couple of days back, as you were saying, inside the immigration office there in orlando, and they went through and spoke with hundreds of folks who want to become legal citizens here in america. that process, i'm telling you, martha, takes a lot of patience, it also in some cases takes a thick skin. here's just a bit of that story. >> everything you're about to tell me today will be the truth and nothing but truth. >> each day, nearly 300 immigrants make their way to the u.s. citizenship and immigration services office in orlando, florida. >> one of 219 u.s. cis

centers nationwide. many are seeking citizenship or a green card, by proving their marriage to an american citizen is real. that means convincing immigration officers who are constantly on the lookout for lies. >> i don't like anyone coming to my country and lying. >> the process includes a gauntlet of tough questions. >> have you ever been a member of or affiliated with any terrorist groups. >> this you -- have you ever been a prostitute or involved in prostitution. >> do you intend to overthrow the government of the u.s. >> immigrants have long complained about allegedly rude and impatient agents. >> there are some stories about officers being a little heavy handed with the people that are sitting in front of them. >> raise your right hand. >> last year, nearly 750,000 people became naturalized u.s. citizens, decisions that affect generations. >> because of one of our decisions to approve somebody, whether their child can get a scholarship or their parent can come

into the united states. >> it was interesting, martha, that process can take as few as 30 minutes or it can take up to several hours if indeed those immigration officers sense that something isn't right and if they get that sense, if they believe that, they probe even deeper and it can take even longer. martha: they're doing important work. interesting piece. thank you orly. bill: from california, the smear, mud and accusations, smells like election season, meg whitman saying her democratic opponent is playing dirty politics in the race for governor of california. she says her accuser is simply being used. >> i feel badly for her. she's being manipulated, i think, and i'm sorry about that. she's the nicest woman, did a great job for us, and you know, with everything that she's been through, everything they're saying is a lie. bill: gloria allred, hired by the accuser. is there a smoking gun? how does this affect the

campaign in much more on that, only a short three minutes away.

bill: all right, 930 time here in new york, if you're just joining us, new england, several states in the northeast feeling the brunt of that massive storm system, blamed for five deaths in the state of north carolina. change coming to the white house, expecting president obama to announce his chief of staff, rahm emanuel is stepping down. the source telling fox news mr. obama has already asked long time advising pete rouse to take over that job. expect that announcement, 11:00 a.m. eastern time. we have live coverage here on fox. martha: folks, what we've got here is a down to the wire bombshell that got dropped into a very tight race in california. and we've got a new update on this situation for you today. republican gubernatorial candidate meg whitman is

accused of knowingly employing an illem immigrant, but nicky diaz has gloria allred at her side, representing her now and here is what we heard from the former housekeeper yesterday: >> she treat me as if i was not a human being. i'm doing this because i know there are a lot of megs out there who are mistreating the nickys who work so hard for them. martha: allred says she has a letter that proves that whitman and her husband knew that diaz was illegally in this country but whitman says it is all part of her opponent jerry brown's smear campaign, that's whitman's word and here's her response to all of this yesterday.

>> perhaps jerry brown has been in politics too long to know any other way to do politics. and this is a baseless smear attack and he should be ashamed of himself. i feel really badly for nicky. she is being used by cynical people with a selfish agenda. brown and his supporters care nothing about her. and i am truly sorry that she has been put in this position. martha: judge andrew napolitano is fox news senior judicial analyst and host of fbn's freedom watch, and staff writer at the roll call and before that he covered california politics for many years so he's a good person to talk about the political side of this. let's talk about the legal aspects of this. gloria allred is saying this this employee was exploited and that she knew that meg whitman knew that she had hired this employee illegally, whitman said as soon as she discovered she was illegal, she had to let her go, and it was incumbent

upon her legally to turn her in, which was not, right? ted: facts appear to have demonstrated the following, meg whitman employed this woman, the woman gave meg whitman and the social security administration a false social security number, using that false social security number, meg whitman made the appropriate deductions from the woman's salary and the woman filed income tax under the false social security number. so who committed the crime and who committed the fraud? meg mythman or her housekeeper? her housekeeper did. and gloria allred, in full disclosure, a friend of mine, nevertheless, gloria allred has done her client no favor by getting on national television and saying that the client committed fraud on meg whitman and her husband and a crime by filing a false social security number. martha: and what allred is saying is that they've gotten a letter in the mail which it now comes out that the husband well, it's highly possible we did get that letter, it was seven years ago and it was

basically a check to -- they were saying that it didn't match, social security says our number for her, for nicky diaz does not match your number for her and he wrote on the back, nicky, please look into this and left it for her. >> that is not a sufficient trigger to fire her. what is a sufficient trigger to fire her is when they determined conclusively she's an illegal alien. flipside, it's not a crime to hire an illegal alien. this is not a legal issue for meg whitman, it's a legal issue for the housekeeper. it's a political issue, of course. martha: let's do one or piece on this, then we'll go to the political implications of this. >> absolutely not true. neither of my husband nor i received any letter from the social security administration, and if there is a letter out there, i don't know how they got it. it's not in our house. and so you know, somehow it ended up in, you know, jerry brown's hands or gloria allred's hands. >> the letter that gloria

allred released yesterday did not say you are employing an illegal alien. it simply said the social security number that you have submitted with the money you have sent us, which you have lawfully deducted from the money you have paid her, does not match. martha: does not match. >> so who committed the fraud here? the housekeeper. >> martha: and it's exploitive treatment that this woman is now accusing her of, she was paid $23 an hour, that's well above minimum wage in this country, to basically do house work and to drive her kids to various places, it doesn't appear there's any evidence of exploitive behavior. >> it doesn't appear the whitmans committed any crime or did anything inconsistent with what would be expected of them as employees of household help. the political issue is another story. martha: judge, thank you very much. that's the legal side. but there's another part of this story, and that is the political side, and let's bring in david drucker for more on that. david, as we talk, i just want to pull up the polls here, this is a very tight race and the indications show that meg whitman has

been lagging behind with hispanic vote e. when you do the breakdown. >> that's correct. and i think something people have to understand is that california is a very blue state. it's a liberal bastan. and that doesn't mean a republican can't win the governor's race, in fact, californians seem to like to elect republicans to sacramento from time to time to serve as governor and they have over the past several years, however, that always means that in a tight statewide race every vote counts and these kind of october surprises which are standard in big california governors' races, i've seen this tile and time again, and gloria allred is my favorite election year ambulance chaser because she has popped up before in a major governor's race to try and cause purposely or not the republican candidate problems. so this is not shocking. martha: it didn't work that time, right? >> it didn't work the last time she tried it. >> with schwarzenegger. >> but the public was in a fiery mood when it came to

gray davis and it's something they weren't going to buy and this is all about whether meg whitman has closed the deal, whether -- californians, democrat and independent leaning -- independents who lean left have decided to cross the aisle for meg whitman, given the horrible state of the economy out there. martha: exactly, that's what i was going to say to you, everybody's main focus, i feel like personal issues are falling to the wayside in this election because there's so much at stake for all of these states economically. what's your bet? does this go by the way side for her or is this a job killer for meg whitman? >> look, my bet is it could but i'm not sold that somebody who's watched these races over the years and lived there and experienced it, i don't know if at the end of the day she's going to be able to pull it off. i think that only she could have been at this position at this point, so i credit her and her campaign, but it's still a tough sell for a republican in california and this is one of the reasons, by the way, i haven't been sold on carly fiorina's ability to oust barbara boxer because

despite the horrible economy you have to get a number of democrats across the aisle. it's doable but it's not easy and a 12 percent employment rate, believe it or not, doesn't make it an automatic that democratic isn'ts -- incumbents or the party is going to get rebuked on election day. martha: these races with tightening up in a very interesting way and we'll continue to follow these numbers all through today's show and beyond. david drucker, judge napolitano, thank you. it's going to be very interesting how meg whitman and jerry brown fare. bill: back to this situation, southeastern pennsylvania, delaware county, where you have several vehicles here, including at least one school bus that's submerged in water, this is part of this giant storm system that was moving up the east coast, dumping 21 inches of rain in wilmington, north carolina yesterday, killing five in north carolina and now you see the after effects, the sun is well up in the morning, it's 9:39 in pennsylvania, this storm moved through a few hours ago and wow it brought wind

and rain and was relentless. wtfx, we were just talking to a reporter about 15 minutes ago, he was describing some of the situations, some of the scenarios he has seen already on the streets, and that part of the state, and this is the result. that storm moving up into new york, up into connecticut, up into massachusetts a bit later. but this is the after effect of what has turned out to be one whopper of a soaker. some areas on the east coast have gotten more rain in the past 48 hours than they got in june, july, and august, combined. so we'll watch that story for you. hope that everybody was out of the vehicles and out of those trucks and buses when that rain came rolling through. so flash flooding, a big concern out there today, and the warnings are out. we'll get back to that story in a moment. martha: the morning was so dark, it was hard to see what was in front of you, you could be driving into something and not even realize that. we'll stay on top of that, and get you the news as it comes. let's look at what's going on on wall street right now, where sort of in

the face of all that seems rational, of what's going on in this economy, the dow continues its upward march, september was the biggest month in a long time and on october 1st, it's off to a decent point, up 51 points as investors respond to economic reports out of china this morning, traders also keeping a close eye on new manufacturing numbers oft united states which are always a good indicator of what's going on in the manufacturing sector. yesterday, the dow closed down 47 points, up about 50 as we speak. we'll keep an eye on that throughout the show as well. an armed and dangerous, and on the loose -- watch what happens when gunmen threaten a store clerk and why police believe this isn't a first holdup. bill: that tea party showing force in the midterm elections. some surprising new poll numbers on what voters think about its role in the mid terms. we'll talk to the founders about those numbers, a couple of minutes away.

march boy, we are getting some incredible video coming in, giving us a better sense of what people are up against this morning. this is delaware county, pennsylvania, a live shot from wtxf, at 9:44 eastern time and look at the depth of this water, look at that school bus. i mean, you know, we don't know what the situation was there, whether there was anybody in that school bus

when those flood waters took over. we certainly hope not. if they were, we hope that everybody got out of there okay. it may be some situations where some of these vehicles may have parked overnight when the water washed in. look at mcdonald's. holy cow. bill: the shot before was a parking lot but this clearly is not, this is a road that starts somewhere and goes somewhere and ends somewhere and frankly you can't figure it out based on the areas we're seeing, where is the road. martha: it's unbelievable and this water washed in so quickly overnight. in some plays they got 21 inches, lots of wind as well. so as a lot of people set out to work in the dark, it was very hard to tell what was in front of you with the water splashing into windshields and not knowing where the flood waters were. it's also a question of whether or not to keep going through if you're underneath an under pass and the water looks like it's okay to navigate and we saw folks getting themselves into some tough situations. bill: this has been three days of this and some of the

st came through last night on top of everything we saw wednesday and thursday, but five dead in north carolina, that's flooding and that's high waters and that's when people, well, you know, you're dry -- you take the chance to drive through lakes and puddles and that's exactly what you should not do. you don't know the depth of that road, the depth of that water. martha: stay in if you can and wait for this to settle down a little bit before you head out there. we'll keep one eye on it for you throughout this show today. i do believe that there is going to be a great awakening all across america. people on both sides of the aisle, and just independent americans are just saying enough is enough, and we're not going to put up with that status quo, with just going down the path of incurring debt and growing government and taking away peoples' opportunities and freedom. enough is enough, we're going to go a different direction.

bill: sarah palin predicting a greater awakening in politics. how will it affect us? our fox polling story shows us an interesting story, 57 percent of voters say the tea party will not be a factors 21 percent say it will. david webb, cofounder of the tea party and 365 radio talk show host. good morning to you, down in washington, d.c. >> good morning, bill. bill: i don't know what you feel about this, but that 57 percent number seems high. >> yes, it does. bill: it's not a nod towards the tea party. what do you make of that stp. >> i don't think it is,ant quantitatively is what matters. where are the voters that are the 21 percent or 25 or 35? if they're in those districts in trouble, those 70 to 100 that are really in play, that's the trouble for the liberals. bill: we saw something from the "wall street journal" the other day, and in that polling, it was among republicans, and whether or not they would support the tea party. 71 percent, that's a

substantial number. but guys like you have a bigger concern. you don't want the tea party to be swallowed up by either party. >> you should resist it. for one thing, most americans, regardless of independents, democrat, even, or whatever, their looking at their pocket books and this is an american issue, it's bigger than the political parties, and look, the gop would love to have another voting block to some degree. i understand that, that's what parties do, but the tea parties need to stay on message. the american people have woken up and they need to stay focused, because the institutions, gop and democrat, have gone off course. bill: but those -- many would argue that it's inevitable the republicans will swallow up the tea party, whether it's today or in a month or a year from now. >> look, conservative values, fiscally limited government, efficient government, constitutional government, those are more in line with the right than they are with big government, which is the answer on the left, so it is going to align itself.

but if you're going to be involved in politics, you need to remember that the institutions are interested in staying in power first, and we have got to get them back on course to serving the american people. bill: i know you believe in the '80s the evangelical dwarbs when it came to social issues. the tea party is about spending and taxes and your wallet, frankly. there was a piece in the washington times early in the week and i want to pull up a small paragraph from that story which goes to what sarah palin was describing, it's called the great awakening, our nation in the grip of overwhelming, inescapable malaise, not because our government has not done enough for us, but because it has tried to do too much. if that is true on face value, will washington get the message? >> i think washington is getting the message. i think november 3rd, they'll clearly get more of the message. but november 3rd is one day. and the majority of american people didn't ask government to do too much for them.

government, special interests, and party interests, once took over the social engineer and entitlement mentality. americans frankly to their credit have decided to say i got to tighten my belt, got, tighten your belt, america is bigger than this immediate need, and this placebo of politics. bill: we'll find out in 32 days. thank you for coming in today. one key question we'll put to chris wallace next hour, that is this: are people voting against democrats because it's a referendum on the white house or are they voting simply against all incumbents as we've seen in some of these primaries. it's interesting. we'll find out together. thirty-two days. thank you, david webb. from d.c. martha: interesting stuff. we're keeping an eye on this flooding which is getting pretty intense and we have more pictures like this one, coming in, serious flooding that is causing major problems out there for big cities and for small towns as well. bill also the new word from

the most wanted man. does this latest rant reveal any clue as to where osama bin laden might be today? catherine herridge is working that story, she's live minutes away.

martha: well, there is a battle that's brewing in massachusetts. come this tphofrbgs voters will decide whether or not to repeal the state sales tax on alcohol. liquor stores say you know what, we are taxed way too much and our customers need a break. douglas kennedy joins us from our new york newsroom with more on this from massachusetts. hey douglas. >> march for, for 30 years, massachusetts had no sales tax on liquor, but last year, that changed, and some say at exactly the wrong time.

john herrington says residents of massachusetts need a drink, and not an expensive one, either. >> why is this the wrong time to be taxes alcohol? >> the economy is soft as it is. is it normal to tax when an economy is the way it is now? >> herrington is the other than of this package store in chalmsford, north of both on, he points out the red sox are in third place and patriots have failed to meet expectations. >> making matters worse, the massachusetts state legislature last year raised the state tax on booze from zero percent to 6.25 percent. >> just when they should have made it cheaper, you say they went and made it more expensive. >> not only more expensive, they're sending tax dollars to the state of new hampshire. >> herrington is supporting a ballot initiative that will once again eliminate the state sales tax on liquor, he said state leaders need relief in the pocket books.

>> alcohol is not a necessity, it's not food and water or clothing, and why should alcohol be exempt from a sales tax? >> state senator steve to elementman is a critic of the measure, he says the problems in massachusetts need to be faced head on, not drank away. >> the alcohol problems are numerous. i mean, you cut binge drinking, college students' abuse. >> it says booze causes problems with individuals, with society, why not tax it? >> they should be focusing on keeping our employees working and keeping things going in their state. >> herrington points out chalmsford is just miles from the border, from new -- new hampshire, a state that has no tax on liquor. martha: going to go up over the border there. >> there are huge liquor stores in new hampshire. >> they sure do, douglas, i've been there! thank you very much, douglas

kennedy. bill: once or twice, martha, right? martha: exactly. bill: there's a storm brewing inside the white house. not this one, folks of the an announcement on the future of rahm emanuel. also the radar is fierce. martha: there's another storm brewing, things are wet and rainy, a monstrous form affect -- storm affecting millions of people. here's what the commute was like for drivers in pennsylvania. >> water everywhere. everywhere. slippery, it's real bad out there. can't really see. wipers better be working. >> roads are slick but you got to watch out where you're going and watch out for the other person. some people seem to forget that the roads are wet and they want to do 70 miles an hour. no deposit slips. no looking for an envelope. i have an image of my check right here. i can gea picture of the check, on the receipt. it even tes what kind of bills i put in. [ man ] you just put the bills right in. itven did the math for me. -four twentys. -a ten. -two fives.

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>> and call me--t not while you're driving. we knew this day was coming. that's why we bought a subaru. martha: nasty out there, folks, deadly floods are moving up the east coast, the satellite picture we have torrential downpours and powerful winds up to 50 miles an hour, walloping the northeast and that is a brand new hour, getting started here in "america's newsroom" on a friday, i'm martha maccallum. bill: i'm bill hemmer. we are dry, and, the pictures from pennsylvania, short time ago, can't figure out where the roads are, the worst of what is left of tropical storm nicole hit north carolina yesterday, get this, now: 21 inches of rain, fell in a matter of hours. that is carolina beach. and they are furiously pumping millions of gallons to try and clear the streets. five people killed in two separate car crashes blamed on the weather storm.

martha: look at the morning commute in newark, new jersey this morning. there have been a number of rescues playing out there, people getting trapped in the rising water, our fox affiliate wnyw, in freeport, long island and you got there, 2:00 a.m. this morning, carolyn, right? what has that been like. >> reporter: martha, we have seen it all this morning, we have kind of been through the plagues, at least three of them, we have had just ferocious winds, we have had torrential downpours, where it was coming down about an inch an hour, and, we really have the threat of flooding, and some of our roads were flooded as a result of the storm that really started yesterday. but now we are experiencing the calm after the storm, you can look behind me. this is called jones inlet and it's not far from the ocean and this peaceful inlet was churning up like wild for hours, crashing over the bulkheads, and sending

the docks really rocking, and, the flags, also, we had 40 mile-an-hour gusts and, you would think that with winds like this, we would have just a lot of language and a lot of trees down and power outages, but, it seems for now, that the new york metropolitan area seems to have lucked out, you know, perhaps because we have those big, two tornadoes that touched down, through new york city, two weeks ago, a lot of the trees that had previously been weakened, were already down, so, we're not quite out of the woods yet. we still have a lot of water on our roads and the commute this morning was very slow and is still slow, we have problems on the new york city subway, with several lines flooded, and also metro north, the suburban commuter line, in westchester, but, it looks like it is wrap up and we say see more bands of rain through the day, but, certainly not as bad as we had feared. martha: boy, incredible pictures, and you had quite a night, thanks for being out

there, and covering all of this for us, carolyn. it is, as you say, good thing some of the trees i guess came down a couple of weeks ago, and prevented some of those branches, but an incredible scene, thank you very much. bill: other spots will not be as lucky. new england is bracing for the worst and janice dean is live in the weather center with more and you have numbers out... >> stunning, and martha, i don't want to hear you say you drove through high water this morning. martha: i know. >> turn around. martha: so dark, i didn't know i was getting into it and i was in it. >> i am glad you are here. we have to remind people not to travel over water, they cannot see the bottom of, because, unfortunately, we'll probably see more pictures like that, we saw out of pennsylvania, and parts of new jersey, of course, water just covering everywhere, and, look at these rainfall totals. this is within a five day event, this is wilmington, a five day period since sunday and they beat the city's record for heaviest rain event in a four to five-day period, replacing the

september 1999 event of hurricane floyd. this will go down in the history books, a four-five day event and the live pictures we have been showing you really telling the story. the good news is, this is almost done, we are almost out of the woods but we had so many things riding on this storm system. a frontal boundary moving across the east coast and tropical moisture from what was tropical storm nicole, and, then, extra tropical low that rode up the coast as well, bringing winds in excess of 50 miles-per-hour, in some cases and here is the rain, right now, starting to peter out across philadelphia, atlantic city, new york, you are not out of the woods, a batch of rain is moving towards you and new england, we are still getting heavy rain especially in the mountains and areas where all the moisture squeezed against the mountains, and so a lot of flood advisories up for the northeast and we could get an additional 1-2 inches and thankfully, thankfully the event is almost over.

bill: a remember floyd, 1999? north carolina. i was dealing with that thing for months. >> yes. unfortunately, bill it's always a delayed reaction, and all the radar, we will probably see nor flooding pictures out of the northeast throughout the day. bill: update us, okay, and we'll keep martha out of the deep water. >> martha! martha: i'm in trouble, there is flash flooding that caused big problems in the detective area, no surprise when you look at the map, it slammed right into it. trees down and water rushing into cars there, overwhelming the power system in place and forced everybody outside of some of the buildings. listen to this: >> the building throughout the block, filled up with smoke and we came out and all the manholes were filled with smoke. >> the water was coming so fast, and... i was screaming so loud and so long. >> the spanish man came over and helped my grandmother and he was the only person that helped us.

martha: tow trucks kept busy out there and good thing the neighbors were helping each other as well, taking away the stranded cars, and traffic is trying to get -- >> trying to get a fix on how it looks out there, if you have pictures or videotape of the flooding in your neighborhood, log onto foxnews.com and click on the "you report" section and sender photos and videotape there, and tell us where you are and what your name is and what you are looking at, too. that applies to my friend, martha, martha maccallum, cell froen from my car. pitch block when i... bill: doesn't work well then. try and figure this out. martha: we are awaiting a big announcement from the white house today, the president is expected to announce his right-hand man, this is an end of an era, folks, chief of staff, rahm emanuel, is stepping down. departing pennsylvania avenue. heading for the mayor's race in the windy city of chicago, an interesting one to watch, mike manuel is live at the white house and what do you know about the timing of this and what we

will hear from the president today? >> reporter: well, martha, senior aides tell me that the president, rahm emanuel had a series of conversations as he was contemplating whether he should stay or go, and finally on wednesday, i'm told, rahm emanuel told the president of his plans to leave and run for mayor of chicago, that same day, i'm told president obama offered the job to pete rouse, a long time trusted aide, a guy who was a chief of staff and senator from illinois, and so, it was a quick transition at this point and once rahm emanuel said i'm going, pete rouse is the guy and, so, today a little later we expect him to pay tribute to rahm emanuel and his tireless work ethic and what he has done over the first couple of years of the obama administration. and, to look forward to pete rouse taking the position, at least for now. martha: a lot of talk will ensue about whether or not it will set a different tone in the white house, mike manuelemmanuel.

we'll be talking to you. bill: and a country whose president is held hostage by his own police, south america, the country of ecuador. developing now, where a show down comes in what appears to be a failed coup attempt. steve harrigan picks up the story, live in miami, extensive experience throughout latin america and south america, steve, good morning, do we have it right? the police stepped in and did what and how bad is it for the president. >> reporter: it was a really close call for the president of ecuador, rafael correa and he was holed up inside a hospital 12 hours, surrounded by his own police, angry over cuts in wages, cuts in benefits, and he had to call in the army, to rescue him and he had the army and the police of ecuador firing at each other while they formed a human shooeld around him to get him out of there and he is safe now in the dprengsz palace, and three people were killed including one of his bodyguards and dozens injured in what might be just the start of more protests to come here, in ecuador. bill: things are got nettinot g

back to nearly. >> reporter: now the violence calmed down but the roots of this is in -- deep in the country, and they are $4 billion in debt and, he vowed to continue the cuts and being president of ecuador is no easy job and they've thrown out three recent presidents and 8 presidents in ten years and, right now, the president of ecuador, rafael correa is on the edge. bill: thank you, steve, good to have you back, nine minutes past, martha. martha: described that's tornado of 2010. we are talking about what is called a political twister. which way the winds are blowing now and what kind of damage it may leave behind. bill: also, they were bound for afghanistan, and they never made it, though, out of pakistan, oil tankers set to supply u.s. troops, set on fire after a surprise attack. how could this happen? and were they left as an open

target? martha: a new case from the most wanted man in the world. usama bin laden, where he is now trying to exploit a national disaster to rally his terror base in that area. words alone aren't enough. our job is to listen and find ways to help workers who lost their jobs to the spill. i'm iris cross. we'll keep restoring the jobs, tourist beaches, and businesses impacted by the spill.

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bill: a surprise attack, destroying a supply convoy bound for the war in afghanistan. look at these pictures here. 27 tankers carrying fuel for u.s. and nato forces, torched by

a suspected militant. no reports of any deaths or injuries. but, all the supplies are gone. the attack coming a day after pakistan closed access to a vital military supply route, that move apparently was made because of a protest, after a nato attack, along the border between afghanistan and pakistan. martha: we are awaiting moments from now, really a major announcement on the future of president obama's inner circle which changed dramatically in a number of ways in the recent months, we expect that today his chief of staff, rahm emanuel, long-time advisor and confidant, the latest member of the administration to leave and weld make a run for the mayor's job in the windy city, here's white house press secretary robert gibbs on this. >> i have no personal announcements today but i will say the president will have a person announcement tomorrow. at 11:05 a.m. from the east room

and at this point he'll deliver the news. i would bet on having two announcements, yes. martha: two announcements, one in, one out, juan williams is an npr senior correspondent as well as a fox news contributor. good to have you here today. you know, we have seen rahm emanuel next to president obama, pretty much through his presidency, how will it change things to not have him there? >>... martha: juan, you hear me okay? we are having audio problems with juan -- >> wake up, juan! martha: i know he's awake. we'll try and get that audio work out and we want to talk to him about what the personnel change will mean at the white house and we understand pete rouse, a long time confidante and advisor will come in and take the chief of staff job, a very influential position, and it is really the closest person to the president, in terms of his day-to-day activities and decision and now we have juan williams, can you hear me okay. >> i have got you, martha.

martha: tell me what you think of the decision, rahm emanuel out an pete rouse in? >> i think it really signals the end of the first half of the obama administration, martha, and i think what you are seeing is the kind of edgy energy and aggression that characterized rahm emanuel the insider, and who says he will send dead fish to his people who bring him bad news. martha: i think he really did, a least one, right? >> and one time he had a knife, jamming it in the table and saying, death to this person and that person, who would cross him and i think that kind of attitude, now goes giet books, because what you are seeing is with the likely loss of 25, at least 25 seats in the house and potentially the loss of the control of the house you will need a more conciliatory emphasis on compromise, from white house and pete rouse is like that, and is popular among young staffers at the white house and people on capitol hill, democrats and republicans

who see him more in the andy card tradition, remember, the chief of staff for president bush and the kind of guy you can call and talk to and work something out. martha: yes. and there is an interesting piece by peggy noonan and calls it the tornado of 2010 and says we're in the middle of a political storm now and she pointed to president obama's comments he made in the rolling stone piece, the interview he did with jon winter and the president says, the dem base sitting on their hands, complaining is just irresponsible. we have to get off the sidelines, but if people want to take their ball and go home it tells me folks were not serious in the first place, and boy, she says, if this is the way you speak to people you need to get back into your embrace, she feels it is a problem. what do you think. >> this is evidence of, you know, we talked about the divide among at this point, tea party versus establishment and you are seeing evidence of the divide

within the democratic party, martha and remember robert gibbs, the white house press secretary talked about there being a professional left and heckled, the president and he should have had public option and closed guantanamo bay and those people are uncompromising and feel he should have been more orthodox in terms of his left wing views and despite the fact that the actions he has taken has already driven so many independents away from him, so, you know, to my mind, i think what president obama is doing, that plus the events he's holding on campus, and, on four campuses to try and fire up young people, is evidence that he disagrees with what you are seeing from peggy noonan and he needs to get out there and speak to the base in a way -- >> he's hitting on both sides of the fence here, one, he is taking aim at those people and saying you are irresponsible and need to stop sitting on your hands and that will not warm them up and then goes after the

events at colleges and town halls and has people standing up and saying, my son voted for you and still doesn't have a job and he's getting it on both sides and has been accused at points of not having a very large leadership quality, of a bring everybody in quality. and maybe, that is what needs to happen, right now, and, what is your assessment of that and will we see a difference with a different chief of staff. >> with a different chief of staff, the impact i think will come post-election but leading up to the election, this month we're in of october now, october 1, i think that what you will see is the president getting out there and continuing the attitude that he... you know, he evidenced in the rolling stone interview, to say to the left, especially minorities and young people and women, get out there and support me, i need your support now, i'm not on the ballot, but we can't give up. if you risk what we have at the moment, we'll move backwards and then you will of course get into talking about what happened under president bush. >> and it is interesting, maybe

we can pop the poll up, real quick, we are seeing tightening and saw people leaning towards republicans in the vote and you are seeing, i think democrats are starting to, you know, wake up, fraps, get engaged in the whole process that is now a month away and not unusual to get closer to an election to see tightening here, right. >> and remember what has driven the election year is tea party energy coming from the right and now i think the president is out and doing serious campaigning and of course we talked about the issues with some of the republicans candidates and the president and the democrats, were able to point to them and say there are extreme views out there. all of this means we'll have a tighter race than anyone would have guessed, just a month ago. martha: it seems to be what is developing in the recent days, juan, thank you very much, put your finger right on it, as always, good to have you here, sir. bill: folks are voting on this, the line was around the corner but these folks are not waiting for are world series tickets, what they are waiting for is a clear reflection of the political and economic situation america is facing today.

reaction on that, in a moment here. also... martha: heartbreaking case and we'll have closing arguments in it today. this gruesome murder trial, that is going on, two men accused of unspeakable acts, against this mother in the right-hand side of the picture and her two girls. bla does any mother ever feel like their kids are adults? i have twins, 21 years old. each kid has their own path. they grow up, and they're out having their life. i really started to talk to them

about the things that are important that they have to take ownership over. my name's colleen stiles, and my kids and i did our wills on legalzoom. [ shapiro ] we created legalzoom to help you take care of the ones you love. go to legalzoom.com today and complete your will in minutes. at legalzoom.com, we put the law on your side.

bill: the father and grandfather, the father, by the way, the first person you heard from, the father and the husband, survived a gruesome attack, one of the most horrific crimes we've covered in years, closing arguments in the petit family murder, dr. william petit, the first man you heard from, listening to evidence, how his wife and daughters were killed, two of them raped, as their house was burned to the ground. steven hayes facing the death penalty if convicted, accomplice, still awaiting trial. and david lee miller is at the trial, live outside of new haven, connecticut. what do we expect today from the

prosecution, david lee? >> reporter: well, we expect the closing arguments to get underway, very soon, i should point out, that in connecticut, there is a great deal of horrific weather this morning and, like much of the east coast and only seems to suit the horrific nature of this crime, seems to be a weather delay, and we expect the actually arguments to begin, perhaps closer to 11:30 this morning and they should have been underway already and that said, the prosecution feels it has so much evidence, it wants to present, that it is -- asked the judge this this case, bill to extends the closing argument from the normal 60 minutes to 90 minutes and the judge can do that when there are special circumstances, when there are perhaps multiple counts and deed, steven hayes, faces multiple counts, 17 counts in total, including murder, sexual assault, burglary and arson. the prosecutor said he'll need, quoting him now,' fair amount of time, to presents his case.

he is going to compress 8 days of testimony and some 200 exhibits into one-and-a-half hours time. arguing that steven hayes is disabilities of three murders as well as sexual assault. bill. bill: awful, david lee miller covering the trial today in connecticut. 26 minutes past, martha? martha: remember the news last week, we were told the recession was actually over. folks, but the brand new polls show america may have missed that memo. chris wallace weighs in on this after the break. bill: and a controversial attack ad turned into big money for the candidate who was attacked.

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bill: top stories, 10:30 in new york, if you are waking up, trapped chilean miners helping rescuers reach them, clearing rocks and dirt, falling from the drilling, and saying they consider it a sign of progress, they are still below mother earth and bmw says the recall of

cars to fix potential power brake problems could extend around the world. the company already recalled 200,000 cars, here in the u.s. alone, nigeria, 15 are dead in a twin car bombing and the blasts coming on the 50th anniversary of the west african nation's independence from great britain, happened three hours ago, still developing there, martha. martha: a "fox news alert," we have a new audio tape released today from usama bin laden, and that tape has been posted on-line, national correspondents catherine herridge is live with the latest developments on this. catherine, why are so many of usama bin laden's tapes in the past several years, just his voice and not video? >> reporter: well, thank you, martha, the reason the al qaeda leader uses audio or video is simply for security reasons, video typically gives more away about his location and, providing information to the u.s. government and others, and in the new tape he speaks to exploit the discontent over the

massive flooding in pakistan and calls for the creation of a new relief body to study the problem among muslim nations and, in the tape, it is really a concerted effort to tap into the anger after 20 million people were affected by the floods, and the concern among u.s. and pakistani officials, is that this frustration could ultimately help build support for extremist groups in the tribal areas of pakistan, and as you know, that is where they believe bin laden is hiding at this time. martha: and insinuating the help from outside nations has a sinister implication, is part of that, we are hearing and there was another tape from al qaeda that also, really caught the attention of counterterrorism analysts, this week, right, catherine. >> that's right, one of my contacts, who does open source intelligence collection pointed out the most recent tape of the american adam gadahn, the first time in a long time we have seen him outside or out in the open and that is important, because, the mountainous terrain in the video can provide clues as to where he is located in pakistan, not the only mountains but the

vegetation in the background, iefrn t even the paths he's walking along and he has been wanted since '04 for treason and providing material support for al qaeda and there is a $1 million reward leading to his capture and the video is seen as a bold move by the americans, and is a change in the way he has presented himself to the world, martha. martha: very interesting, thank you, catherine, catherine herridge in washington. bill: 32 days out and, the intersection of politics and the economy, a line as long as the eye can see in los angeles, not for lakers tickets or a movie premier, scores of people, look at this, now, lining up to save their own homes, save the dream organized to help struggling homeowners restructure their mortgages and avoid foreclosure. last week a group of renounld economists claimed the recession was over and if that is the

case, look at our new fox polling, 86% of the country feels like we are under water, in the recession, only 10% believe the country is on the rebound, and recession is over. chris wallace, anchor of fox news, how are you doing and good morning to you. you look at what is happening, in the country today, and these are some serious head winds. for politicians to run into. 32 days from now. >> first of all, look at those pictures and your heart just breaks for those folks, can you imagine waiting in a line a half mile or mile long because you are trying to save a home, keep a home for your family and the latest fox news poll, 86% of the country still thinks that we are in a recession. awfully hard for the president to you know -- and democrats to argue that things are doing well and that you should vote for the democratic side when they were elected to fix the economy and

get us out of the recession and, almost two years ago, people feeling with their daily lives, whatever the economists say, don't feel it is over. bill: exactly to that point, we asked the question in our polling this past week, are you better off than two years ago, a period of 24 months and 37% say worse. 52% say the same and that is 89% say they are worse or no better. now you go to a critical question, i think the voters are asking, we're trying the figure this out: are americans voting against democratic programs? is it truly a referendum on barack obama's presidency? or are they going to the polls and saying we have had it with all of you and it is more anti-incumbent than anti-democratic? do we know that yet? >> well, there are some polls and there are also, we have seen what is happening in the republican primaries, incumbents or establishment candidates get beat and i think it is primarily anti-incumbent and would like to throw all the bums out.

but when you vote, as a republican or democrat you have to vote for one of them and so it will hurt the democrats more and they are in control of washington and control both ends of pennsylvania avenue, and there are more of them than there are republicans and it certainly is not a huge vote of confidence in the republican party, people i think you look at -- when they are -- there are polls that indicate, what do you think of democrats and republicans, and oftentimes republicans score even lower but they are the ones in control and the ones who will get blamed for the bad economy. bill: on that economy, congress punted on the whole tax issue. and wanted to know about that, too in our polling and 71% say it is a mistake and will hurt the economy and congress is out of town an pud punt on the issu and there is no vote and how does that play, what do they say in washington and how does it trickle out in america. >> look. the fact is the democrats knew

when they came in two years ago, knew the bush tax cuts for the middle class and wealthy were all going to lapse, at the ends of the year and have had two years to deal with the problem, now, they are talking about coming back in a lame duck session the middle of november, and at that point, folks, us, won't know what our income tax is going to be, what the gain, tax on capital gains and dividends and inheritance tax, will not know what it is a month-and-a-half away and particularly when you talk of economic problems and lack of certainty and comes, small business and big companies, not knowing whether to invest, and whether to hire more people, to not know what your tax rate is going to be in a month-and-a-half is... but you know, so you say to yourself, why didn't the democrats do something about it, the answer is there is such a split inside the democratic party they didn't have the votes to pass it... bill: house members say extend them. >> exactly. and they know it is -- it was a mistake or problem but they didn't have a solution and said,

let's go home. bill: harry reid doesn't even have it on the schedule after the election and that could change when you come up and the sun breaks on november 3rd, pending the results of what happens on november 2nd. >> bill, they have to do something, because if they don't do anything, everybody gets a tax increase, at the end of the year, and then you are talking about the -- you know, it will be -- this will be a big issue, the biggest tax increase in the history of the country, they have to do something in the lame duck. bill: i'm looking forward to your show on sunday. you have two great guests in the a tight race in the state of kentucky. rand paul and jack conway, check your local listings and check out chris wallace, close, right, too close to call. >> absolute dead heat and republicans cannot gain control of the senate without that and it will be a debate, first nationally televised debate of the fall campaign. bill: rand paul, leading tea party candidate, the first guy to stick his head out of the sand, thanks, we'll see you later, okay. >> you bet. martha: will be good, fox news sunday, don't miss it.

in the meantime, back here, turning an attack ad into big bucks. right here in america's headquarters, we have daniel webster in the story, republican candidate, for congress in florida, and, lovely ads, he was dubbed taliban dan by his competitor, controversial ad and came from alan grayson and his folks, designed, of course, to sink webster's campaign and based on a quote taken out of context and we had him here and spoke to him about it a few days ago in america's newsroom and instead it back-fired on him in a big way and webster raked in more than $130,000 in the past two days as people have shown their support for him, so far, still, we asked for a response from mr. graalan grayson and wh we ran the segment and we haven't heard anything from him and that is unusual, we usually hear from him. bill: and the polling is flipped, too, and, the white house, 2012, a "gallup poll"

finding 19% of republican voters would support the former massachusetts governor, mitt romney, followed by 16% who back up sarah palin, and 12%, for the former governor of arkansas, mike huckabee. martha: we talked to politician and experts about the shape of the country and how we're doing and the issues that define the election season, and, now we have been talking to all of you folks out there. as many of you as we can get our hands on, san francisco, denver, miami, part of our series, "listening to america" and william lodgeness is the man who has been doing that and is in los angeles, right now, william, what are you finding out there? what do people care about and what are they talking about? >> reporter: voters get it. they are much more dialed into the midterm election than many give them credit for and given the same facts, they have very different opinions on tax cuts, tax rates, and, the death tax. >> for all the progress we have made, we are not there yet. >> i have had enough and the

american people have had enough. >> reporter: two visions, one country. we asked voters in miami, denver and san francisco, should the president extend the bush tax cuts to all taxpayers? >> continue the tax cuts. >> keep the tax cuts in place, and maybe raise the taxes on the rich. >> they ought to let the tax cuts expire. >> extension will continue because we are in tough economic times. >> the economy is not that great, right now, so adding more taxes, right now would not be the best idea. >> reporter: what is a fair tax to pay uncle sam. >> my current tax rate is 24%. and, that seems pretty fair to me. >> 10. 10 or less would be good. >> on a fixed income, shouldn't have to pay that much. >> it's easy to say i want to pay 10% tax but unless you correlate that with the level of services that i'm willing to live with, i don't think it is meaningful. >> personally i would like a flat rate senate if you can

afford more you should pay more. >> reporter: in january, the death tax jumped from zero to 55%, should you pay the federal government a tax after you die? >> no. >> no. i think that is something that people worked for their whole lives to earn and, it should go to their beneficiaries. >> lots of double speech. >> whether you walk in and take 30 to 50%... >> can't you give them a farewell without taxing them in the grave. >> that is wrong. >> if my mom left me money it should be my money. >> totally not. i think that is unfair. >> reporter: coming up in about two hours on "happening now" we'll grill voters on two others, the stimulus, winner or waste and the deficit, raise taxes or cut spending. martha: interesting, thank you very much. good stuff. bill: sad story here. he took his own life after his private life was broadcast live on the web and now new jersey's governor is weighing in on the tragedy. >> as the father of a

17-year-old... i can't imagine what those parents are feeling today. i can't. you send your son to school, to get an education, with great hopes and aspirations, and, i cannot imagine what those parents are feeling today. bill: now prosecutors are pushing for more charges against this young man's classmates, what punishment, in this case, fits the crime? martha: unbelievable story. remember this, another story of college violence. she's already serving 26 years for killing her roommate in italy. now, amanda knox, an american, could face even more time behind bars, so what has she done now? when we come back. let me tell you about a very important phone call i made.

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as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. >> i'm jenna lee, joined by rick folbaum, a shakeup at the white house, the president and -- in a few minutes expected to announce the chief of staff is leaving and we have talked a lot about that morning and, looking at his interim replacement and what it means for the white house and the rest of us. rick: and new vans that can look inside your car, your home, is it constitutional? and we'll have an update on the deadly storms that are creating a mess from miami up to maine, and, mike huckabee, the former governor. takes your questions, he's in the hot seat, straight ahead. martha: prosecutors in a tragic

case in new jersey are now considering whether they can possibly pursue hate crime charges against two college students from rutgers university. a lot of people think they are responsible or could be responsible for what pushed 18-year-old tyler clementi to take his own life and the rutgers university freshman jumped off of the george washington bridge. just days after finding out that aspects of his personal life had been videotaped by computer, by a web cam in his room and had been streamed on-line, for everybody to see, and glare at and, you know, get in on, and here is new jersey's governor, chris christie, reacting to this case: >> that kind of stuff is unacceptable. and, you don't know the feelings of the person on the receiving ends of that, you cannot possibly know and there might be people who could take that type of treatment, and deal with it, and not the others, as this man,

who was much more greatly affected by it, but whenever, you take the act, you have to live with the consequences and i have to tell you, i don't know how those two folks will sleep at night knowing they contributed to driving that young man to that alternative. martha: all right, these are the two people he was referring to. the roommate, tyler clementi's roommate on the left-hand side of the screen, two months, probably, dharun ravi and molly wei and they are both out right now, he was released on $25,000 bail and she was released on her own own recognizance. cri chris christie is a former prosecutor in new jersey as well and they should be glad he's not dealing with the case and we need to find ways to significantly prosecute this kind of situation.

how do you go about that. >> you know what, there is no question about it, and, certainly, if the prosecutor, chris christie, we know what his success was but there is nothing funny about this and college, you do a lot of pranks and we all went to college and had fun with friends, you know, but, something like this is unspeakable and, in terms of prosecuting it, i mean, certainly the invasion of privacy and what they did with the web cam is an easy prosecutions and linked it up and broadcast it and that is easy. the harder issue will be whether they can elevate to it a bias and up hate crime and had the intents to be ma tilicious and, they will have an unsympathetic jury and i think, they face serious problems. martha: the prosecutor appears to be going after viewing this transmission and transmitting it, which could get up to five years in prison for these two, if they push it to the full extent of the law, if you go to the hate crime, what bar you have to to pass to prove that

this was a hate crime? >> well it is -- look at the hate crime and they'll look at you know, a manslaughter charge on the hate crime and they are really looking to blow the case up, martha, which i don't agree with that, we agree it's a tragedy and talking about the poor young man's parents and the devastation they are going through, however you need to look at intent here. and, their intent was to humiliate. and they should be punished for what their intent is. it's not so reckless -- type of reckless act, some people say you take a gun and shoot in the air, you don't intend to hurt anyone and with a gun you can kill someone and easily foreseeable, what they did would lead to someone's death, and what -- they have to be two wonderful kids as well... martha: you know what? i'm sure this is incredibly difficult for their families as know, we know what it must be like for the families of all three. >> absolutely. a fantastic student, never had a problem in her life... martha: tyler clementi, you know, is gone. >> i agree.

martha: and he was a wonderful musician and played his violin in church, in my neck of the woods, every weekend, okay? so, obviously, there's a lot of emotion at play here. but, this is happening -- e we saw the case in massachusetts with the young girl, who was also harassed points to where she took her own life and at what point does someone have to be made an example of in order to realize kids need to -- they get seminars and have talks in school all the time, anti-bullying talks and the fact is there are some kids out there, who aren't good, who are nasty, and who are capable of doing things... >> you are right. and your outrage is shared by so many people and in terms of recklessness, that is a conscious disregard of a risk, legally and do you not know or should you not know broadcasting this activity, where you are humiliating him to the point to do tragic and horrific things. >> i don't know if it is a risk -- if this is a risk you would foresee, to take somebody's

life. martha: i understand where you are coming from, legally, arthur, i do and we are up against a hard break and this is not the last conversation we'll have about this, and we'll see if it can be elevated to a hate crime, thank you, we'll be right back. throughout our lives, we encounter new opportunities. at the hartford we can help you pursue them with confidence. ♪ by helping you prepare for your financial fut.. and protecting your homend family. so go forward, with confidence. and with the hartford ehind you... achieve what's ahead of you. ♪

bill: new developments in the case of an american woman whose murder trial is made -- has made international headlines, amanda knox is back in court today, serving a 26 year sentence, for killing her roommate with two others, greg burke streaming live from italy, why is she back in court, greg? >> reporter: well, bill, this is all about whether or not cops roughed up amanda knox, where the slander charge comes from, 8 cops who say they did not, and she of course accusing them of having slapped her around. now, today's hearing was closed to the press and we actually did not get a look at her, though

she did appear and she was in one of these three police vans and that is all we saw going into the courthouse for a very short, technical hearing. there will be another one on november 8th. now, there is a little less italian interest in the case, right now, but the british and american journalists are certainly out in full force, watching every move, of course, this is just sort of a lead-up to that appeal, which will be in november. and, even some movie director, michael winter, was in the area today checking that out and maybe make a film about the case. she was convicted last december, the important charge on murder and sexual assault which will give her 26 years in prison, however, her lawyer is saying today that they are taking the slander charge very seriously, from her point of view, saying if he can make clear what happened in those early days of interrogation, that could have an effect on the entire case, as well, and, finally the lawyer telling us today, that amanda was a little more tense, a

little less serene than in the past, and that is understandable, the fact that she is in prison now, for 26 years. bill: greg burke in italy on the story, thanks, greg, martha. >> let's take a live look at the white house, we are go to get interesting things coming in here, we are hearing there is a very big crowd gathering for the big announcement of rahm emanuel leaving, lots of dignitaries and there is larry summers obviously in the east room as they get ready -- bill: summers is leaving, too, isn't he. martha: a lot of folks are... and they gave him a dead fish, rahm emanuel as a present, the inside scoop and i wonder if he thought that was funny, we'll be right back. we are all over this. but what ie a different sry? of one financial company that grew stronger through the crisis. when me lost their way, this company led the way. by protecting clies and turning uncertainty into confidence. what if that story were true?

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newsroom", we have incredible video of a high rise on fire. look at these pictures out of south korea. my goodness. awful, awful. bill: that's from the building. martha: a 38 story building, people running for their lives, firefighters trying to rescue as many as they could and it started with a garbage collection on the fourth floor of the building, they put it out. no reports of deaths or injury. we saw a lot of debris. look at those kids. my goodness. bill: you say they got rahm a dead fish as a parting -- a parting gift or a parting shot? martha: a parting gift and