>> steve: we're going to talk to caesar in the after the show show, along with brian and vincent, the crime stoppers. boys, thanks for dropping by the couch. report on the job market, these are brand new numbers showing that employers shed 95,000 jobs last month. we were not expected to lose any, unemployment, steady at 9.6%, that's the last monthly jobs report we get before midterm elections. good morning on a friday, i'm bill hemmer. how you taoelg today? >> martha: feeling great, hello, everybody, i'm martha mccall. this is a huge impact to the economy and to millions of americans out there trying to get a job. bill: let's get context now, stuart varney, vary & company, fox business network, lay it out, what's happening in america. >> at the very least, this

is extremely disappointing economically and is probably politically disastrous. dig within those overall numbers for a moment and you'll see we did in fact create 64,000 private sector jobs last month, but that number was completely swamped by the 159,000 public jobs that were lost, census workers being laid off, and workers losing their jobs at the state and city level. completely swamped any private job creation. 9.6% is the unemployment rate, but we are overall -- we overall lost 90 odd thousand jobs. bill: stu, why are american companies not hiring, what are they afraid of, what's the hesitation, why is it not happen something. >> fear of the tpufplt they don't know what regulatory framework is going to come down the pike with either -- with health care reform, epa. tax aeurbgs and we do not know what tax rates any of us are going to be paying come january 1st and it's getting real close.

bill: see you at 9:20. it's our lead story. there's a lot more to talk about on that. martha. martha: here's the big jobs picture. at the start of the recession, the unemployment rate was 5 percent in the united states, it rose steadily to 6.6% in 2008, this year the jobless number has hovered well above that 9 percent mark, in august, we saw it at 9.6%. bill: still, all eyes in washington on that number there on the economy, but if you look across the country now, plenty of states are holding elections for governor next month, in fact, 37 states in all and there are close races, including ohio. democratic incumbent ted strickland, very popular in the buckeye state, facing a challenge from the republican john casick, squaring off in a debate. in ohio this is about creating jobs and that state has been hit hard. he's a sampling from last night. >> the thing you don't want to do in ohio today is for

the government to impose mandate that is can result in higher utility costs for our bee leaguered citizens and secondly, you don't want to put the businesses in a position of where they cannot be competitive. i think you've read the toledo blade and have seen that we've lost 15 factories to indiana, maryland, tennessee, because we just were not competitive. >> i will set priorities as i have, education will remain a priority, the basic essential services that our people must have will remain priorities for me. but i have demonstrated that i'm willing to make cuts. we have about 5000 fewer state employees now than when i became governor. that was tough to do. that represents about 7 percent of our state work force. but i will make the cuts that are necessary to carry out my constitutional responsibility. bill: kasich first there, strickland second, it arguably is the number one battle ground state again in america today. the latest numbers we have,

kasich leads by six points, 49-43 over strickland, those numbers have shrunk a little bit in the past couple of weeks. it will be a good race. democrats have run the table for four years in ohio, republicans hope to go change that now. martha: let's take a look at another state in the midwest, the race in iowa is also heating up, 26 days before the election, democratic incumbent chuck culver is facing challenger terry bransted to used to be governor. they discussed plenty of issues but one topic was center stage and that was jobs. >> it's illinois jobs, and because of what governor culver did with the pla, an illinois company got the contract and the illinois carpenter's union are going to be doing the work. that's why they marched with him at the home coming parade. [laughter] >> iowa taxpayers shouldn't have to pay for illinois jobs. tomorrowy branstead is not telling the truth with respect to the prison project down in southeast

iowa. again, he's opposed to the $160 million prison that we're building there because of the jobs project, the overwhelming of those jobs are going to hard working iowans and i'm glad they're getting a prevailing wage to rebuild that prison, too. martha: great seeing these debates across the country and the issues being fought about. branstead served as the longest serving governor from 1983-995 but wants his job back. bill: it's one of our best looks at these guys when they go face to face. meanwhile in west virginia a very popular democratic governor, going into big guns, governor joe manchin against his republican competitor for the late senator robert byrd's senate seat, a seat that's been in democratic hands for about 50 years. bill clinton swings into action on monday, joining manchin for an event at morgantown where the university of west virginia is. the outcome in that state may tip the balance of power in the senate.

governor joe manchin, our guest live in "america's newsroom" and that high stakes race. we'll talk to him live. martha: look forward to that. in the meantime there is a new twist and new details on the search for an american man reportedly shot dead on a border lake by mexican pirates. that is what his wife believes happened out there. according to a local lawmaker, the effort to find david hartley has been made even more difficult because search crews have worried about their own safety out there, fearing that they might be ambushed by the mexican pirates as well, who there has been evidence of them being seen in these waters. hartley's wife, that was a picture from the personal collection, she says that men on speed boats approached them and then shot her husband in the head. mexico has questioned the details of this story, but now, a witness has come forward, describing that scene, but asking not to be identified. listen to this: >> i see this jet ski

heading towards me, there was this boat behind it, her husband had gotten shot was when she blurted out screaming, crying, sobbing. she could see him like a head, gunshot wound to the head, where his brains or falling out with blood, and he was tkpwurg ling like he was not breathing. three boats approached them, waving guns, and i guess talking in spanish. she said they got scared, spooked, and they started to speed off, and then they heard the gun shots going on, and she could see where they were hitting the water and the water was coming up at them from the gun shots, and all of the sudden, she sees her husband fly off, the one that had the gun to

their head left to assist the other two retrieving the jet ski and that's when she, she as much as she could, she tried to pull her husband off, she said i'm trying to block it as much as i can but i can't. i picture myself being in my shoes and my fiance having to tend to me in that way, and i can imagine what she was going through. it's unbearable to lose your spouse. martha: wow, what an account from that witness what he says he saw happening out there. kris gutierrez is live at falcon lake in zapato, texas kris, are they searching for the body of david hartley? >> >> reporter: here on the u.s. side of falcon lake, martha, we know that game wardens and probably the border patrol and even the u.s. coast guard will presumably resume their search this morning. officials hope that mexican authorities on the other side of falcon lake will do the same later today. despite that one witness we know that mexican

authorities have questioned the validity of tiffany hartley's story from the very beginning and quite frankly u.s. lawmakers have had the same questions. listen here: >> if you had a invest, why is the -- had a vest, why is the body not floating with the sr*ets, if you had a jet ski, wouldn't it be floating somewhere around? they've been searching around, and they even used a helicopter, and if you have a general idea where that is, why is the body not flighting, why is there not a jet ski? >> des point those questions, martha, u.s. authorities are taking this incident very seriously. martha: and you know, a lot of questions about the witness and who the witness was, and how he saw what he saw. you actually got to go out there, kris, and sort of see the area. this is a huge body of water, about 60 miles long, right? >> you're right but it takes just five minutes on the boat to get over to where

this allegedly happened. once sheriff gonzalez and i actually got there we didn't see a single boat in the water from our vantage point but did see one mexican military aircraft and the sheriff suspects he knows why. watch this: >> just beyond that pillar right there is the mexican side of falcon lake, u.s. authorities cannot legally venture into those areas to search, however, that's the area that tiffany hartley says she and her husband, david, were jet skiing last week. officials down here in texas say that's a known area for the zeta cartel members, in fact, the sheriff in zapata county is reaching out to the zeta cartel for assistance. >> through print media, through television n. english and spanish, telling these people all i want is a body. we can't prosecute, it happened in another county. if it -- in another country. if it happened in not county, we could prosecute. we can't prosecute. >> the sheriff says he has never reached out to the cartel before and hopes he never has to again.

at this point, there's been no information. martha: kris, thank you very much. bill: the mystery continues. mexico's president, still fired up about arizona's immigration law. but now he's making headlines again, taking aim at the u.s. why he may have a problem with california. martha: and a shocking new report suggesting that the people who are supposed to protect the lives of our u.s. troops in afghanistan may be funneling that money to warlords there. taxpayer money, going to warlords. we'll tell you about that. bill: also a family feud over health care? harry reid's son wants to be governor of nevada, but this comment is no endorsement for his father's push for health care reform. listen: >> as for r*elt care, i don't support the litigation. i think it was politically motivated, and i don't think it will lead to a resolution of the problem that we have in our state. >> your administration -- >> bill: is it reid versus reid? a golden political battle in the silver state? we'll debate that next.

twelve minutes past. we'll be back in a moment.

bill: sow back -- so back to what appears to be a disagreement, ro*y reid warning health care reform may have an impact an that state, the son of harry reid who played a major role in that is pack bill. his comments came during a debate with brian sandoval and here's part of what he said about the impact of

medicaid on nevada: >> i don't deny, however, that nevada needs to be vigilant on these issues. the law that was passed gives time for the new system to go into effect but there is potential for it to put significant pressure on states, because medicaid rates could go up significantly. bill: the last part of that statement is what we're debating now, medicaid rates could go up significantly. with me is kate obenshane, vice president of young america's foundation, dick carpulli, democratic of south carolina's democratic party. how are you two doing on a friday? what kind of -- kind of din ser that going to be, kate, father and stphopb. >> it's going to be a tough one! the one issue that harry reid does not want to be talking about right now, nor do any democrats who voted in favor of it, his son just put out there, which shows how scared the democrats are, because right now, his son, rory, is looking out

for his own interests and acknowledging what everyone knows, is that the cost to state is going to rise dramatically because of the increased number of people on medicaid rolls. harry reid is now going to be diverted from his goal of just merely smearing his opponent and he's actually going to have to talk about health care and the economy. bill: he's going to have to address his comment, that's reid versus reid. if that's the case, dick s. he hurting his father's own chances of reelection, in a race where you know it's neck and neck? >> i information much ado about nothing. i think also the people in nevada are going to realize that they're getting -- they're able to keep their kid on their health care policy to age 27, not going to be able to deny coverage because of preexisting conditions, no lifetime limit, all kinds of good things are coming as a result of this and what's happening is folks are parsing words and looking -- at the end of the day the nevada voters are going to have to decide do they want

to go off in the wacky direction that sharron angle would take them or the consistent -- >> bill: it doesn't sound like -- i take the quote here, medcade rates could go up significantly. that's what he said. we're not making that up. >> could. could. could. could go up. we're not worried about what could happen. bill: is that a warning, indicate? >> the federal government that is said it will go up, the costs will go up, and look, saying this is parsing words, nevadans are dealing with the highest unemployment rate in the country, the highest foreclosure rates in the country. they're not falling for this line that more federal government is a good thing anymore. they're actually rejecting it. and harry reid is making a tremendous mistake. yesterday he was out there talking about constitutionally directed spending, what we call earmarks, and how much he brought back to the state. the american people and the people of nevada are rejecting this notion that just because you bring home billions of dollars, somehow you're doing us a service. people now, in nevada, they

want smaller government, they want government out of their lives so the power of the free market is unleashed so they can go back to work. bill: you transitioned to the second point we wanted to get to. here is part of what he said, then i'll get dick to react to it, part of my constitutional duty is to congressionally direct spending. i am vigorous, we'll see it in a moment, there we go, i am vigorous in going forward congressly directed spending , i fight for it. is he saying he wants to spend the federal money, dick? how do you defend thattate -- -- at a time -- that's what gives rise to the tea party, for crying out loud. >> that's right. >> the tea party is all over map whether it's o'donnell in delaware or nicky haley here which we find out is using a convicted guy to raise money for, all kind of wacky ideas but the tea party wants to misdirect people to these crazy ideas. harry reid is right, he's doing what has to be done to try to get our economy back.

we got out of the great depression because of federal spending. bill: but what he argues is that you bring in taxpayer money to nevada. i'm asking, is that a winner in 2010? >> i think so. i think so. my republican friend here is going to disagree with that, but in three weeks, we'll know whether that's a winner or not. >> dick, this is -- you guys are totally misunderstanding this whole movement in the country against government and against bigger government, thinking that it can do better than people can do, and keep it up, because it's going to result in a tsunami on election day. bill: the lady gets the last word, kate, thanks, thanks, dick, as well. martha. martha: is it constitutional to demand that all americans buy health insurance coverage? a federal judge has now said yes. our resident judge weighs in on that decision. bill: also outrage over a new film about britain's prince harry, why some fear that film could put the prince in danger.

martha: well, this one is a blow to the opponents of the new health care law because a federal judge in michigan in a win for the administration has said that the law, the health care law s. indeed constitutional. so what's going to happen in the other 20 states that have filed suits against this health care law that says you must pay for it? we'll discuss all of that with our judge napolitano, fox's judicial analyst and host of fox business network's "freedom watch", judge, good to see you as always. >> good morning, martha. martha: the logic they seemed to have used in this case is that the health care market is different than all other markets because you can't anticipate when you're going to need to go to the hospital or the doctor and you will eventually have to pay for it down the road or

other people will have to pay for it, so since it's a forced expense it falls into a different category? >> basically saying that if you don't buy health insurance for yourself, someone, somewhere along the line, is going to have to pay for it, either your employer or if you go to a public hospital, the government, or if you get on medicaid or medicare, the states. so if everything you do with respect to health care affects the economy in some way. how, he concedes an individual human being, a solitary american, making a decision to buy or not to buy health care, has zero effect on the national economy. but if you add up all the people that decide not to buy health care, that number in the aggregate would affect the national economy and congress can regulate it. that's his theory. a very expansive theory of the commerce clause of the constitution which basically says congress can raeg late -- regulate any activity which when added up alongside of similar activities would have an

effect on interstate commerce. martha, he did that without ever specifically addressing the issue of whether or not congress can force you to purchase health care. martha: indeed. which is the essential question for strict constitutionalists, right? >> exactly. sort people who lost here are actually rejoicing because they have a built-in issue on appeal, which is the judge's decision was so broad, so generalized, so failing to address the specific issue that the appellate court will probably interfere. martha: what do you is this going to happen? there are 20 states fighting this based on the constitutionality of forcing somebody to purchase something that they may not want. how do you think it holds up in other courts across the nation? >> the judge in richmond, virginia who ruled prelimnarily on this about two months ago seemed to indicate he'd go the other way, seemed to indicate his view on the constitution, which is the same as mine,

that the congress has never before forced people to engage in interstate commerce. that's one case in virginia. the granddaddy of cases in pensacola, florida, when you put the map on the screen, it shows the 20 states that have challenged obamacare, they're all in that one case in florida, and the judge in florida, in pensacola, also said he is probably going to find it unconstitutional. so the procedure here is for trial judges to rule and the losetory appeal it to the intermediate appellate courts and then the losers there, to appeal it to the supreme court. you're talking about three or four years of appeals before the case gets to the supreme court. martha: that's right about when all this legislation is supposed to kick in and northbound effect. that should be interesting. judge, thank you very much, happy friday, always good to see you. >> have a good weekend. bill: thank you buddy. see new the hallway! there is a shocking new report showing that taxpayer money is being funneled to the taliban. if true, what does that mean for american forces fighting in afghanistan?

a closer look at that. martha: and a popular democratic governor is fighting to hold on to a senate seat that has been in democratic hands for nearly 50 years and his republican opponent is coming out swinging. >> if it walks like a duck and a quacks like a duck and it looks like a duck, nine times out of ten it's a duck and here's a governor who supports obamacare, a governor who supports the stimulus and that brought cap and trade, obama's cap and trade to west virginia, and we call it cap and trade manchin style. martha: well, mr. raese has a lot of attention in this thing and whoever wins this race could tip the balance of power in the sen kwrafplt it's one of the central races to watch, west virginia democrat joe manchin joins us live, moments from now. don't go away.

bill: 9:32 in new york. we're back at the board show though you, give you a better context for the picture we're seeing shape up across the country. yesterday we looked at the balance of power in congress, starting to break down the house and senate and yesterday the senate was in focus, today we're going to take a look at the house and see what is on the line now, what is at stake. at the moments -- at the moment democrats have a clear majority, 254 votes, republicans, now at 181, republicans need 39, 40 seats to get a majority in 25 days. can they do that? if you break down individually the house races across the country, you start to see a picture and image for what we're seeing on behalf of voters. here's what we've done. with so many races across the country, and a lot of times it's difficult to follow because there's so much action, what we have done on the house side is we've taken the states where there are races to watch, all the races to watch on the house side are on the map in yellow. there's a lot of them i

know, but to make it a little more simple, we're going right to missouri today, the show-me state smack dab in the middle of the country where there's a race underway in a district, right here southeast of kansas city, the fourth congressional district, ike skelton is a democrat, he served 17 terms in the house already, but he's getting a challenge from vicky hartzler, the republican, she's also a tea party favorite so, we want to see why is this race close, what's happening out there in missouri? who better to go to than carl cameron to figure out what's happening. hello there, st. charles, missouri. >> reporter: the fourth congressional district is one of those places in america where there's a very, very high concentration of ticket splitters. it's predominantly republican but ike skelton has been able to get elected 17 times, 35 years in the house of representatives, largely because of social issues who tended to vote conservative and a great deal of it is because he has been particularly interested in military issues, and in this race he finds himself facing a very, very hard

charging newcomer, a state legislator, but vicky hartzler is both a social conservative, as well as a tea party-backed fiscal conservative, and this race is being looked at as one where a long time institution in democratic politics, no less than the chairman of the house of armed services committee, could be knocked off. his individual defeat would be a major setback for this district, as well as for democrats in general, because of his reputation on military issues as a democrat who's had a bipartisan capacity in the years past but hartzler has come at him hard, really sort of reflecting the national rhetoric from the republican party, that he's out of touch, he's been voting with nancy pelosi, supporting the obama agenda, and it has to be stopped one lawmaker at a time and hartzler finds herself in apgs able to knock off a democrat who hasn't had a competitive primary in the last two decades, bill. bill: there are military bases in that part of missouri. does that play to one side

or the other? >> you know, whiteman air force base, leonardwood, and skelton's name is actually even on a national guard training center in jefferson city. it's a very big deal. his work on the armed services committee as chairman gives him an opportunity to bring home a lot of bacon, earmarks are a dangerous thing in american politics. there was a time not too long ago where bringing money back to your district could be a good thing. he's running against hartzler, saying she voted benefits a bill -- against a bill for veterans, it's a tough ad but she voted against it taking away from veterans' cemetaries, and she said skelton is out of touch with folks in missouri. here's how she put it: >> he's not reflecting the views and values of the fourth district anymore. not only has he come out to washington and cast our vote for nancy pelosi for speaker, but he's now squandered our vote with her by giving it to her 95 percent of the time for

her liberal agenda and we're not nancy pelosi here in missouri. >> reporter: we've tried to get ahold of like skelton, tried to get an interview with him the last several days, unable to arrange that. seventy-eight years old, he hasn't been on the campaign trail very much but then again, they've been working in washington. it's given h aofplt rtzler an opportunity to attack with not a lot of presence on the campaign trail. bill: carl cameron, st. charles, missouri. martha. martha: looks like the taxpayers will be not be on the hook for a multi billion dollar tunnel project that was supposed to be from new jersey to new york but governor chris christie has pulled the plug on this plan that's been in the works for years to build a commuter train between the two states, hundreds of millions of dollars have already been spent on this project, the budget was almost $9 billion, but christie says if they run the numbers he believes it could go as high as $14 billion if they do it. take a look. >> bottom line is this. new jersey has gone for too long and for too many

decades, ordering things they can't pay for. but in the end, this decision is a financial decision, when weighing all the interests, i simply cannot put the taxpayers of the state of new jersey on what would be a neverending hook. martha: this whole thing has a lot of folks, including the unions, as you might imagine, pretty steamed, they say cancalation of this project is going to hurt the economy. meanwhile, across the river in new york, mayor michael bloomberg weighing in, he says he supports this project of this tunnel, but you know what, they don't have the money to pay for it, either. so there's that. bill: fox news alert now, news breaking out of afghanistan, this is not good, a massacre during morning prayers on a friday in afghanistan, a homicide bomber hitting a mosque, killing 15, wounding more than a dozen others. according to reports we're getting in now, the target of that attack was a local politician who until now survived numerous assassination attempts. that politician, apparently, was killed in today's

attack, crossing the wires just a few moments ago here. martha: on that same note, a scathing new report claims that u.s. taxpayer dollars are being used to funnel cash into the hands of taliban militants in afghanistan. the senate armed services committee is saying there is evidence that the private security firms that have been hired to employ members -- they've employed members of the enemy to protect our troops over there and that they're working against our u.s. troops. this is a terrible situation and k.t. mcfarland, news analyst, former deputy secretary of defense under president reagan, k.t.t. feels like we're getting a story like this every day that would show that our tax dollars and our hearts, really, are with the u.s. troops over there but that we're paying some people who are working against them. >> when i was in afghanistan a year ago, it was pretty clear that the afghans are looking at u.s. presence as an employment opportunity for them. as one of the governors told me look, in your country,

one man works, four people eat, in my country, one man work, 17 people eat, so i'm not at all surprised that you're seeing protection money, basically, that we're paying militias to go into the hands of the taliban, because this is a part of the world where everybody is always ledging -- hedging their bets. look at the report, martha, we've had in the last few days, that in pakistan, that the pakistan intelligence services have a connection to the taliban, and there, in fact -- they're on one hand helping us fight the taliban, on the other hand, they're working with the taliban, encouraging them to fight against us. so it's not an unusual dynamic in that part of the world, frankly it's a dynamic we don't get, we're not very good at playing games like that, and the only advantage i can see to it, martha, is general petraeus is able to use the fact that this is a part of the world where people switch sides all the time to our advantage, and it's not clear that he will be able to do that. martha: folks out there listening to this, explain to them, k.t., why isn't

pakistan, why is it their interest to play both sides, giving a little to the taliban, give a little to us. >> part of it is the history. when the pakistanis supported us, they helped us, they funneled money in the 1980s, remember charlie wilson's war? the pakistanis were helping us train and create the freedom fighters, the muhajadeen that later became the taliban. we were attempting to get the soviets out of afghanistan. that worked. but afterwards, the muhajadeen and the taliban stuck around, they invited al-qaeda in. when we then went into afghanistan in 2001, we went to the pakistanis and we said to the pakistanis, look, if you want to help us with al-qaeda and get the taliban, we're going to bomb you guys, so what did pakistan do? said sure, we'll help you, no problem there, but at the same time, they have the long standing ties to the t. so they're playing both sides. martha: what do we do? >> i think we give general petraeus what he's asked for, which is until december to look and see what kind of

progress they've made. if he's able to grab it out of the -- pull a rabbit out of the hat like iraq, where he's able to flip some of these taliban groups instead of fighting against us to fight with us, the irreconcilable taliban, that's great, but i think we need to constantly reassess how we're doing, because otherwise we could be there ten, 20 years and continue to be played by both sides and the problem with it is, martha, we've got other stuff to worry about, we've got to worry about pakistan's nuclear weapons, iran's nuclear weapons. martha: does petraeus have what he needs to do this, the number of troops on the ground to do this? >> he's asked before, he didn't get what he wanted and he does have the rules of engagement that he wants. he's a nice guy a. friend of gyne and when you see what he did in iraq, he turned it around. if it's not working i think he'll be the first one to tell us. martha: k.t. mcfarland, always great to talk to you, thank you very much, see you soon. bill: the race for governor in california, taking a nasty turn in the last 24 hours.

why the campaign for democratic candidate jerry brown is now apologizing to his challenger republican meg whitman. what's that all about? why it's raising eyebrows this morning. martha: we're going to play the tape for you on that one. he may be popular as governor in west virginia but joe manchin is facing problems with the peurpbl desire to move to the senate and people of west virginia are not so sure that's what they want him to do. he says this: >> they're really concerned about the direction we're going in this country and it's unadulterated socialism, are you freer today or two years ago and i think the answer is clear. martha: governor manchin responds to that and he joins us next in "america's onee newsroom".

martha: reaction to the jobs numbers, the market is getting a little pop, up 30 points, 10979. weep keep an eye on the action here in "america's newsroom". bill: so he is popular as governor with voters in west virginia but when it comes to the u.s. senate race democratic governor joe manchin is facing some pushback, running against republican john raese, manchin is trailing 4 1/2, five percentage points. here's the challenge in the recent ad. you see the numbers, 48- 48-43.5. we'll bring in the governor. >> i'm not perfect, but you don't have to be to know obama's polices have hurt us.

obamacare means big government, cap and trade hurts coal, obama's tax increases hurt families, and joe manchin rouber stamps all of this. bill: part of the reason why this race is getting so much attention is because of this on your screen. democrats at 57, republicans, 41, the u.s. senate right now, it may tip the balance, depending upon how voters feel across the country. republicans need ten seats to get a clear majority. governor joe manchin from his home state in west virginia generic morning to you sir and welcome it -- to our program. >> hello, bill. how you doing? >> bill: doing fine, thank you, hope you're doing well, too. we were together during the sago mine disaster, and i saw firsthand how those people took to you and i saw how you could relate to the people of west virginia, and you were elected governor with 70 percent of the vote. your approval rating in the state of west virginia is at 66 percent. how in the world can you be traveling -- trailing your

challenger, john raese, by almost five points with the history you have in that state, what explains that? >> well, bill, first of all, polls are polls, there will be many poll tw-s now and election day and that's the final poll that counts. next of all, i think you said it all first, i do relate and people know that i am one of them, i was raised in the cole camp, i understand the hardships, and these are the great epeople in the world, the coal miners, coal miners' family that have given us the nation we have. john doesn't relate to that, living in palm beach, florida and people are finding out about that, i think that will unveil itself. the ad they put on about us and our state and depicting it in such a horrible light, making fun of it, it's just wrong, and we worked so hard, i don't know, bill, if people realize, for six years, we've been a state that's been a financial beacon for the rest of the country, we're rated as one of the best financially managed states and in the best position of most any state right now, being able to take care of ourselves. i have both chamber of

commerce, all labor, all businesses, all health care providers supporting me because they believe in the process we put together that works so well. bill: that may be the case, but the voters aren't taking your side just yet. i want to talk about the issues here, because recently, he said, in fact, the other day, that you would repeal parts of the health care law pushed by the democratic congress and signed by a democratic president. >> sure. bill: what part of that would you repeal that's not good for west virginia? >> bill, let me say this, that basically my opponent is running against barack obama, and i hate to tell him that barack obama is not on the ballot in west virginia. he should be running against me. bill: are you running away from barack obama? >> no no,. let me just say this. as far as a governor, i've been governor under two presidents. george bush, and also, under barack obama. i wanted george bush to be the best president this country ever had. i'm an american. he was my president. i want barack obama to be the best president he can ever be, because i'm an american. we put america first.

we put west virginia first. that's what we've done here in our state. we put our state first, our politics aside, we didn't play the political partisan politics or the special interest groups. i did -- >> bill: give me one example of the health care reform that you would repeal. >> oh, the 1099, the mandates, all those things need to be done. people in west virginia are -- >> bill: all those things, hang on a second. you're the only democratic governor, the only guy running for senate talking this way. that's significant. >> well, it's common sense. it's basically, you know, everyone is overreaching and overreacting on this thing. the bottom line is people, children, need health care, people with preexisting conditions, and i believe democrats and republicans can agree on that. find what you agree on and move forward. that's how we do it in west virginia. the biggest thing we need to do is bring people together. do you believe that anyone in washington, both democrats and republicans, are wrong by putting the party first, putting their own political ambitions second, and putting the

country third? i'll guarantee you, we'll do what we did in west virginia, we'll put this country first and then let the rest fall where it may. bill: i didn't ask the question -- i asked you a question, if you're running away from barack obama and you said no, yet this week, you -- >> here's what i'm saying. >> bill: -- mining issues, you cay cap and -- say cap and trade is a bad idea and recently pulled out a picture of you with president bush. the bottom line, are you running away from the democratic president? >> i'm running for the common sense, i'm running for common sense for west virginia. the bottom line is cap and trade is dead wrong and president obama is dead wrong on cap and trade and with epa, we just sued epa because they're far reaching, our tenth amendment of the constitution, we have a right to govern ourselves, so you know what, in the spirit of senator byrd, in the spirit of robert c. byrd, it doesn't matter what politics the president might be, when they're wrong they're wrong and you have to fix things. i'm not going up there trying to be against everything, destroy everything. i want to repair what's

wrong. there's a lot of things wrong and there's enough blame for both parties, republicans and democrats. bill: one more question. we've confirmed now that bill clinton is coming to west virginia on monday, you know west virginians went heavily for hillary clinton over barack obama, would you invite the president of west virginia -- to west virginia, would he help or hurt new. >> i've had a personal relationship with bill and hillary clinton, they've been dear friends an wee worked together on many things. we're happy to have bill clinton come in. we've never had -- i've always run on my own, i've ran who i am, having bill clinton as a friend to come n. i appreciate that so much and thank him for doing it. bill: that's on monday. we'll see whether or not president barack obama campaigns for you before the election. governor, thank you for your time, joe manchin, appreciate that. we've also invited your challenger, john raese, to join us on "america's newsroom", we hope to have him on live soon. stay tuned for more on that.

martha: all right, what a mess. toxics sludge that is covering cities and towns. what is in this stuff? we are finding out. we'll be right back.

bill: there is outrage in england over a new movie about prince harry, called "the taking of prince harry", shows him being kidnapped by the taliban, critics condemn it, saying it could put the young royal's life at risk, that movie focusing on negotiations that could take place if he were to be taken hostage. one scene shows a loaded gun being held to his head. prince harry served in afghanistan, about three years ago. martha: bad idea. all right, well, let's take a look at this, the tea party certainly has made a lot of noise this year and they're reeknized as a

legitimate force for candidates across the country in many places and many are wond whaeupbg what impact it will come to after the general election. this will be a huge test for the real power of the tea party. you're looking at live pictures -- at a live picture in richmond, according to the latest fox news opinion dynamics polled, 70 percent of the people polled say they support the tea party's movement for lower tax and smaller government, 22 percent said they oppose it. let's get to richmond, virginia where we find james rosen today. hi james. >> reporter: martha, good morning. everyone knows that the father movement is eclectic and that was in evidence already this morning when the band here kicked off with a version of "tax man" by the beatles, if ever there was an antitax anthem, that's it. one of the opponents and -- components and the sponsor group, americans for prosperity, it's virginia state director markey, president obama has been taking a bunch of shots at your grip, saying it's a

vague group with a greg name, americans for prosperity. does he have a point, is there an american who is an american for poverty? >> he we take that as a compliment and that means we're being effective. >> what is your aim in help to go sponsor this event, americans for prosperity, what do you hope to accomplish here? >> we want folks to take away from this the message that they need to get out and protect and advance every individual's right to economic freedom and get active in the elections this fall and educate voters. >> and very quickly, we also have with us the chair of the virginia tea party patriots, jamie radke. is there a tension between the tea party movement and republicans for george allen, for whom you worked? >> i think people are trying to keep all politicians accountable, they want to know what the polices are and that's what the tea party is there for. >> are republicans endangered in your view or are they going to make it? >> it's going to be interesting, we are going to need to know what their plan is coming into the november election. >> there you have t. a taste of what's to come.

bock mcdonald, governor of virginia, to speak later. martha: james rosen, thank you very much. bill: fox news alert and if true this is a stunner, the associated press, in one line, just alerting now, that general james jones is set to refryer the white house in his position as national security adviser to president barack obama. if this happens before the election, it will be a -- the fact that it comes out a month less than the mid terms, what's behind this story? the associated press, james jones to resign as national security adviser, on that in three minutes, top of the hour. let me tell you about a very important phone call i made.

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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. martha: we have big news out of the administration. this is a "fox news alert," which has now been confirmed, by mike manuel and the report is jim jones, the national security advisor to president obama, has just announced that he is stepping down from that position, and molly henneberg joins me live at the white house and this is a bit of a surprise, especially coming at this time, and we have heard a lot of people leaving, making plans to leave the administration and jim jones not among them. >> reporter: hi, martha, this is sometimes though what happens, about the two-year mark in the administration, there is a turnover and getting a little bit of information, that we have confirmed that he is resigning, no further details, it's not completely unexpected, though, james jones, retired marine corps general, very active in

national security, and foreign policy, will be leaving. we don't know when, if it is before or after the midterms. this is breaking this minute as we are going on air. i'm trying to keep up with my blackberry as well as tell you what is going on and we're digging into why it might happen and when as far as the timing as well. martha: thank you very much. i know that you are busy, covering what is coming in here, general jones served as the commander of the u.s. european command in the bush administration, and there has obviously been a lot of concerns of possible terror attacks in europe and concerns about possible terror attacks in the country and the national security advisor, and, a number of, you know, elements of what is going on in afghanistan and also falling under his purview in terms of what he'd be advising the president on, and, so it is interesting, that, you know, at this vulnerable moment for the administration when they may be in a situation where they are losing control of the house and perhaps the senate, that we would start to see a shakeup on the military, the security side

of the west wing as well? martha: well, maybe -- he is leaving, but it doesn't mean he kind of walks out one day and that is it. there is always a transition and, they would never leave an administration high and dry on issues of national security and there will be plenty of turnover and the president and his advisors will look for someone to step into the position, national security, as you said, very -- a very crucial position in the administration, especially, it is a dangerous world and we have been following the terror threat in europe and this is not something that they walk out the door and turn out the lights one day and there is nobody in that position. there will be a careful handover. martha: no doubt, molly, thank you very much. molly henneberg reporting from the white house as we handle the breaking news story that just crossed the your gentlemurgent,, confirmed by mike emmanuel. surprising news at this juncture, general jim jones... bill: he may stay on until the end of the year. why make the announcement now, i don't understand, he will be

succeeded by tom donelan, and there will be an announcement in the rose garden, friday afternoon, a ceremony is planned and the president will make the announcement an jones and donelan will be there and the officials are saying jones had planned from the start of the tenure to last about two years in that position. and that would be just about the time around the first of the year, for that two-year mark and 24-month mark to come up and with so much attention focus on midterms, 25 days away you wonder why the timing has to come now. martha: also crossing... the resignation will be effective in two weeks. and will happen quickly, tom donelan the deputy national security advisor is a controversial character as well, what we heard coming out of bob woodward's book, there was concern about him and he has other big supporters in the white house as well and, so, it's an interesting time given

what we're learning now, where we're under cut in certain ways in afghanistan and the supply lines coming in, and, you know, difficult relationships in terms of those nato fuel capabilities, getting to our soldiers, lots going on, all around the world, so, interesting change. bill: and there will be speculation, too, as to the relationship the president has with james jones, now. whether they agreed or disagreed on national policy, when it came -- comes to fighting the war in afghanistan, and whether or not there were disagreements on the relationship with hamid karzai or east of the border in pakistan, and all that stuff, we'll work through the day and try and figure out answers as best we can, right now, there were only questions, martha. martha: and it has been, very -- a very volatile situation going on in afghanistan and the administration, it is served is not happy with these reports, that perhaps some of the people we are paying to protect or troops over there may be turning on us and perhaps the pakistani government is working both sides of the fence, supporting the taliban, through their isi,

their security forces, and, then on the other hand, telling us that they are being helpful to us in our own fight against terrorism, and the camps that exist in pakistan and the possibility of terror attacks at home, so, you have to wonder what kind of conversations went on, who was not happy, who decided a change needed to be made or whether or not the national security advisor felt -- you never know. bill: with regard to the war in afghanistan, you know there is a deadline, next summer. july of 2011, and that was the marker that was set down during the president's speech at west point, to get out of the war and end it. casey mcfarland is jumping back in the seat now, your reaction to the news now. >> i spent 7 years on the national security council in the nixon and ford administrations in the white house and to have a national security advisor resign at this point, really giving two weeks' notice with no announcement of who is replacing him, to me it sounds like there is a lot behind the scenes and is not a normal, gee, i want to

spend more time with my family and i'm tired and want to get back to the real life. martha: i know this is coming in, fast and furious at the moment, but, tom donelan, the deputy national security advisor will step into his position. >> oh, he is? okay. then, that makes a little bit of a difference, but, remember, martha, this is coming on the heels of the woodward book, which talks about a real d division between admiral mullen and general petraeus and, the national security council staff, in charge of the afghan war. does it preclude -- the first step we are seeing in some kind of a policy shakeup? because, the news out of afghanistan has not been good. martha: it is very interesting and you, better than anybody, have spent owe many hours in these kinds of -- so many hours in these kinds of conversations and there are often deep divisions about which way to go, and the timeline is also a source of great controversy and

a lot of focus on having to get a lot done and the general is on the job there and wants to prove that he can carry out the mission then timeframe he has been given and what do you think in terms of what may be coming back from the field and what is happening there and from general pet trace, even, in terms of who he needs to be in charge, back harry at home. >> here's the thing, general petraeus and admiral mullen have really staked a lot on saying, give us what we needed to do the job and we will start showing you results and we think we can start showing you results as early as december. the president stuck firm on the deadline and there seems to be a division, and you kind of read between the lines, at -- what deadline is this? you know, july 2011, the president has said, we are going to be coming home, 2011, in july, and, vice president biden has said, in july, 2011, you will see a lot of troops start coming home and general petraeus, when i talked to him, he has been very clear about saying, july, 2011, we are going to see where we are and see what we do next, so, i think what you are starting to see is a little

bit of a division between the military, who says, give us what we need to do the job and give us more time, to do the job, and the president, who is looking at an election, who is looking at his base, and, certainly, the woodward book talks about, i have to keep my base happy, i have to keep them with me and a president who is night war president. he's not comfortable with these decisions. bill: and the request came in for more troops than the 30,000 that were -- >> absolutely. bill: and the president said we are stopping at 30,000 and that is how it end. everything, now, is seen through, the prism of politics. and knowing that november 2nd is lurking around the corner. but you have rahm emanuel, leaving last week, layer summers, prior to that, and, christina romer before that, and, now your national security advisor, it is hitting the white house, not just on the military side, now, but, on the political side, and the financial side prior to that. now, why would you not be able to say, you know, keep your powder dry, let's hang onto this

and we'll do it after the election. does it not present the impression that everyone is jumping ship? you. >> byou bet it does and it is unusual. remember bob gates spoke a couple of weeks ago and said, i will not be here for the 2012 elections and i'm going to be right signi resigning in 2011 and he has given people a lot of lead time and made it clear it's not a political decision on his part but to see a national security advisor, who, a week ago, was someone who was talked about as a potential replacement for bob gates, to see him stepping down with no advanced knowledge, no advanced gossip in washington, only two weeks to go i think is significant. martha: and would appear, in terms of tom donelan was discussed as a possible chief of staff replacement. >> he's not a military guy. martha: they see him as a possibility of moving into a couple of positions, when rahm

emanuel said i'm out of here and jim jones as well. >> that will be significant, it is donelan he does not have a national security background, military or a -- >> bob woodward did point that out, thanks for hopping in on the breaking news, we're into the 10:00 hour of "america's newsroom," i'm martha maccallum, thanks for being with us today. bill: i'm bill hemmer and welcome, there is more to talk about in the economy, the jobs number is out, and it was not good, unemployment held steady, 9.6% and we lost 95,000 jobs last month and that is important, because, all of the analysts expected zero job loss and again, 95,000 to the downside, and we'll examine the fallout on that and as you, it is already a bitter battle and we are four weeks away from election day and things went from bitter to sour in the race for california governor. an aide to democrat jerry brown, the crude name he said about meg whitman and he thought the phone

ryan was cut. martha: a stern warning from the president about what would happen if republicans get control of the congress in 25, 26 days from now, what he meant by, quote, hand-to-hand combat? that is just ahead. bill: and, the aclu has a solution to handling the failures of the big city school district and that is stirring up continues various, a busy friday, already, 11 minutes past the hour. everyone has someone to go heart healthy for. who's your someone? campbell's healthy request can help. low cholesterol, zero grams trans fat, and a healthy level of sodium. it's amazing what soup can do.

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bill: "fox news alert," fox news confirms james jones will step down as the national security advisor, in the white house, he works in the west wing with the president and tom donelan, will replace him and a ceremony this afternoon in the rose garden and we'll cover that live and examine the fallout and joe trippe is on deck, at 14 past, martha. martha: the west coast, where a new soap opera is unfolding in the california governor's race and gets crazier and crazier, jerry brown's campaign had to come forward and apologize for using an inappropriate word to describe meg whitman, the word, uttered by an aide, think the phone call was cut, and they thought they had hung up and they hadn't and thought, they were disconnected and it wasn't

and here's the audio from the discussion jerry brown had and there's another aide in the room, with the los angeles police protective league, calling help to get their support for his run for governor. let's play it: >> we wants to put an ad... martha: all right, this is fascinating, folks, when you look at the issues, involved in the situation as well, rich lowry is joining me, the editors of the national view and a fox news contributor, and mark levine, a radio talk show host, and, aside from the word that was used, which everybody agrees is an inappropriate word, not a nice word to call anybody and they've apologized for that, but the underlying issue, rich is

that meg whitman made some kind of arrangement with the public pensions,' police public pensions, to say, look when i go in and start cutting pension deals to save california money you guys will be exempt, so, jerry brown, calls up to get an endorsement from them and they say, this is the deal we have with meg whitman and he says he will not cut that kind of deal with them and you have a complete switch of where you would expect the conservative candidate to be on the issue and the democratic candidate and i wonder if it doesn't help jerry brown in the end. >> and, jerry brown's benefit, he has been around politics forever and always maintained a certain outsider, reformist edge. and, the public pensions are a huge part of what is killing the state of california. including pensions for police and firemen, love them though we do and meg whitman has been sutzing these deals and i find that deeply disturbing about what kind of governor she'd be. and there are other important issues in the race and you need

to be able to stand up to the public sector unions. martha: mark, how damaging is the basic facts of this, people will hear the tape, and, it is clearly in my mind at least the aide who says the word, who says, she's a whore and jerry brown says, well, we'll use that against her and we'll use it against her and how damaging is the tape itself to jerry brown. >> i don't think it is damaging at all. i mean, it is very, very famous political mix-ups where people didn't know they were rod and you have dick cheney dropping the f-bomb on the senate floor to senator leahy and politicians saying things when they didn't know they were recorded and the essence is not that anyone should use this slur but what does it mean? what he's saying is she is willing to sell herself for an endorsement. and, willing to give up an idea, in principle in order to get an endorsement and that what is a whore is and it's an unfortunate and terrible word, it shouldn't be used, in private conversations, people say this stuff all the time and here,

kugz her ku accusing her of selling herself. >> you don't call women that word, in any circumstance, civil, polite discourse. it is wrong. >> that's true. >> and they should have apologized for it and have and it will be a one or two day story and jerry brown deserves to take' hit on it. martha: on the face of it you are right, rich and he will take a hit on it and i wonder about the underlying issue and how much they'll be able to keep that underlying and whether or not that cuts both ways for these candidates. let's move on, i want to play carl paladino and both coasts have colorful races going on there, and in this bit, he calls out his opponent, andrew cuomo, to debate. listen to this: >> andrew, stop the political posturing. and albany games, come out and debate all the candidates. why do you want to exclude the only african-american candidate? and the only woman candidate? and the green party candidate?

i just don't understand. come out and debate like a man. martha: come out and debate like a man, he says and he has been debating all over the place with reporters and everybody else, and, he can get close, to it seems, rich, it is our understanding that cuomo agreed a debate and it will happen october 18th, so, is carl paladino off the radar. >> i think, cuomo immediately afterwards, my understanding, agreed to a debate. but, the most extraordinary part of the clip is one we didn't play, where he says, the race should be all about the issues, it shouldn't be about personal things, and although, andrew cuomo'ses prowess is legendary. which is the most amazing statement i think -- >> he doesn't want to get off the topic, he says i have no evidence of any of these infidelities and will t get off the topic. >> i replayed it two or three times to be sure i was hearing what i thought i heard. martha: mark, weigh in. >> he said he didn't have any

evidence of that, and he promised to take out the reporter. and, he's off the rails, and i don't think of him as a serious candidate but he's running and andrew cuomo should debate him and he is and is doing the right thing and, the real issue is including third party candidates and every race in the country, has the fight and generally they should be skewexcluded, because that are not serious candidates. martha: lots to talk about, great to have you here today, have a great weekend, guys. bill: general james jones stepping down as the president's national security advisor, why now? and what is behind the decision? the rose garden, the president will take it official in a matter of hours and have you heard, the president described, if republicans take control of congress, it will be hand-to-hand combat in washington. we'll play the clip for you and we'll analyze, those issues with joe trippe, democratic strategist right after the

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bill: "fox news alert," now, bring you up to speed on what we're learning now, general jim jones stepping down as the national security advisor, confirmed by fox moments ago, breaking news, there will be a press conference, announcement in the rose garden this afternoon, you will see that live here and what are we to make of this, 25 days away from a midterm getting so much attention across the country, and joe trippe, former campaign manager for howard dean, joe, how are you doing, good morning down there in washington. i guess, why now is the only question we have. >> i think it is probably -- look, this is a story long in coming and get it out of the way before the elections and people are not focused on this stuff, they are focused -- >> why not wait until november 3rd. >> then it takes it back to -- there's a wall, the president is

covering elections and they'll be covering this more and it is to get it out of the way and it was coming any way, step down now and bring tom donelan in to start the year moving forward. bill: even with the news of rahm emanuel leaving a week ago, and the defections we have seen. >> it is possible -- >> it's possible the american people say, look, here is another one. >> the most significant thing, with tom donelon, people talked about to be the permanent replacement, rahm emanuel, cross his name off the list, we know where he is headed now. bill: i want to move -- there is tom donelon, and, this is something that, i want your reaction to it, during a radio interview the president talked about hand-to-hand combat if republicans win congress, roll it and i'll ask you about it. >> president barack obama: here's the challenge we have got, the republicans, they are fired up, their mobilized, and they see an opportunity to take

back the houses. maybe take back the senate. and that means then we are going to have just hand-to-hand combat up here on capitol hill. if we think he can -- we vote one time, and, then we have a nice party, at obama's inauguration, and we can kind of sit back and suddenly everything will change, that is not how it works. bill: the phrase that sticks out is the hand-to-hand combat. what do you make of that. >> i think it is delivered to charge up democrats and charge up base democratic voters and it's working. the president is energizing the bases, and the energy gap that had appeared all year to be on the g.o.p. side is starting to even up, i think that is work, why some of these races across the country are getting tighter, and the problem is, that that work was independent and i think what is being left here is for individual candidates, on their own, to strike up, you know, their own, you know, their

differences, first as a republican and try to get it... bill: just, as a contrarian, and i'll get your reaction to this. >> sure. bill: the personal ads cut so deeply and quickly and early in these campaigns and the american people are fed up with washington and they hear a comment like that, it will be hand-to-hand combat. is that what americans are looking for? aren't they looking for solutions and answers and take the bad stuff and get it behind us? >> that is definitely a point and the other side, the president cannot say anything, to get republicans more energized for the november elections, and, so to talk about this in a way that says, look, if you let the g.o.p. do this and stay silent and sit on the sidelines we'll lose, come out, we have to fight, it will be ha hand-to-hand combat up on the hill, that gets the democrats to turn out and like i said, it is working and i see across the country a more energized democratic base, and looks like it will turn out...

bill: we'll see in all of that, joe thanks for the quick work, coming in on james jones and an announcement, in the rose garden, martha. martha: she made' comments about health care and then kathleen sebelius took it back after a skeptical senator started asking her questions. the flip-flop next. bill: and we have tougher standards on "american idol" than our public schools, and from news corp.'s chairman, rupert murdoch, the ac lu has a new plan to approve performance in one big city district but it's not without fiery controversy. >> aaron kelly... you are in the top 4. [cheers and applause] [ j. weissman ] it was 1975.

my professor at berkeley asked me if i wanted to change the world. i said "sure." "well, let's grow some algae." and that's what started it. exxonmobil and synthetic genomi have built a new facility to identify the most productive strains of algae. algae a amazing little critters. they secrete oil, which we could turn into biofuels. they also absorb co2. we're hoping to supplement the fuels that we use in our vehicles, and to do this at a large enough scale to someday help meet the wor's energy demands.

bill: so uncle sam backpedaling on the statement about the overhaul of health care,

kathleen sebelius saying, quote, there will be more medicare advantage plans to choose from under the new plan, and it was posted on the department's web site and she said that in a speech, and, then republican senator charles grassley spoke up and asked her to back that up and, as she was drafting a formal request the department changed it to say, there will be more meaningful choices, but did not note the update on the web site and it appeared on the web site and no explanation given and byron york, chief political correspondent of washington examiner and a fox news contributor, they believe they gave an explanation and confirmed the mistake in the end, didn't they. >> they did, but we don't know what the secretary actually said in her speech, what words came out of her mouth. these were prepared remarks and the big issue is the new health care law makes the secretary of health and human services, by far, the most important in the american health care system and what she says, really, really matters, and, the health care law, when it is fully implemented, a large portion of its funding is going to depend

on, will come from cuts, in medicare advantage programs. so the idea that those -- the program would actually be expanded did not really... bill: you said we don't know exactly what she said in the speech and this is what has been reported, okay? it is reported that she said there will be more on the screen now, guys, the full screen? there would be more medicare advantage plans to choose from. there will be more medicare advantages to choose from, and it was later changed there will be more meaningful choices, what it said on the web site. the difference being, byron? >> the difference is, because the administration does plan to rely on funding from cuts in medicare advantage, that is what got the attention of senator charles grassley, the republican who is really paying a lot of attention to what the administration is saying about health care and he said, wait a minute, you will cut the program, how will you say there is more and so, the administration changed it to more meaningful choices and that could mean, virtually, anything. bill: grassley was on the fence, remember, with the health care

debate? he was back in iowa, holding the town hall meetings, and he was out in the open fields of iowa, i remember the days, they were august, and it was hot, and, the guy was still going out there. and -- but is he suggesting people like sebelius and others don't know what they are talking about because they don't know what is in the bill. >> i believe if you read between the lines he is suggesting the administration is trying to sugar-coat something, a change that is actually going to come. so, you are right, he did play a large part in it and remember there were long negotiations in august '09 between him and senator max baucus and on the finance committee and it didn't really work out and so senator grassley ended up voting against the final plan. but, he has been keeping very close tabs on what they are saying. bill: we hope to get him on the air. hopefully, early part of next week. the reason why this is so critical is because health care shows up in all of these pre-election polls, and how

important it is, and people will be voting in 25 days, byron york, thanks, go to foxnews.com/"america's newsroom" and click on the bya box, and, on your ipad, ipod -- you can't send an e-mail from your ipod. martha: cell phone. bill: call my cell phone, because you asked. martha: i'll give you the number, no problem. on the job hunt, groups getting more popular, with bargain hunters, actually, the group-buying model, becoming big business with more companies needing more customers and it comes with continues various, where the money is going. mike tobin will explain all of this to us, and will lay it out in a clear way from outside our chicago bureau. >> reporter: a trend, e-commerce mixed with marketing, pioneered by an organization called group-on and the salespeople go to the retailers and convince the retailer to put together

mega discounted deals and sell them in the form of on-line coupons with limited group sites, 100, 200 deals are sold at a time and they sell them to bargain hunting subscribers and groupon takes a percentage of the proceeds. christie peterson is trying a new salon because she bought a coupon on-line. >> i've never been to the salon before but i saw the groupon and it was a great deal and i decided to try it. >> reporter: because of bargain huntsers like christie, groupon has in two years grown from nothing to 2500 employees, on four continents. >> we're in one of the worst economic down turns we have seen and it is the fastest growing company. >> copycat companies are popping up as well. >> 3 to 20 in nine months. >> deals are too good to be true because they are, the retailer often takes a loss with the goal of getting customers in the door, that is why this restaurant in chicago will not do business

discounters any more. >> with the coupons, people come in but come in one time. >> and he's fending off salespeople. >> it is an infestation, i'll call it at this point. >> reporter: still they have an absolutely frenzied customer base and you have people buying these coupons, running all over town to get their deals, so much so, that there is a spin off industry developing to deal with the extra demand. because, oftentimes you have 200 coupons sold on-line and they'll get 10,000 bids. back to you, martha. martha: interesting, mike tobin, thanks, good to see you, mike. >> reporter: you got it. bill: a fox news weather alert breaking now, tropical storm out there in the atlantic, now a hurricane, otto, and, it has formed in the atlantic and something to watch, too, on your screen, whether or not it approaches land or gets near the eastern coast of the u.s., is something the folks like janice dean can tell us and we'll check in with her on that, the weather news breaking now and we have news on the economy and the jobs number that is breaking as well

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>> good morning i'm jon dot, -- jon scott, another shakeup at the white house, what it means for the war in afghanistan and our troops, also, a surprising jobs report out this morning, and, it's not a pleasant surprise. also, an in-depth look, the president talks, in the the 11:00 eastern time hour, what he has to say about the economy, we'll also get republican reaction from a former labor secretary. and, a tea party gathering in virginia. why it matters. straight ahead, less than 20 minutes from now on happening now. martha: jon, thank you very much, we'll look forward to that, a "fox news alert." general jim jones is stepping down as president obama's national security advisor. this is big news at the white house today and we're joined by bret baier, anchor of "special report." bret, surprising to you? this news? >> reporter: well, the surprising thing this is timing 25 days before -- is the timing, 25 days before the election, a

big change for national security advisor. and this was going to happen, everyone knew that jones as going to leave and the two-year mark is a time when a lot of figures leave administration, but this announcement on this day, at this time, right after his chief of staff left to run for mayor of chicago, right after some high-profile economic losses as far as people leaving, during a tough economic time, on the national security front, it is just interesting the timing of this. martha: what about, any divisions that may have surfaced over the war in afghanistan, the way it is being fought, you know, what do we know? a lot of stuff came out in the woodward book about all of this. but what is your take on how happy jim jones was in his job. >> reporter: i can't get into jim jones' mind. but i can tell you there is division within the administration over how certain national security policies are moving forward. that happens in every administration. but, i think bob woodward's book did go a long way to depicting

exactly how deep those divisions are. tom donelon, the deputy deputy national security advisor was described by, according to woodward, secretary gates, as being a disaster if he took over the top spot. and, you know, some of the quotes in that book, really lifted the veil on the divisions over national security, specifically, when it came to afghanistan and pakistan. martha: yeah, and it sounds like they really like tom donelon in the west wing, because he was considered as a possibility to take over for rahm emanuel, that was floated out there and now is moving into the nsa job. >> reporter: he has a long history and is clearly well-liked by at least some to be able to move into the position and there will be a rose garden ceremony, this afternoon. and you will hear the president speak highly, i'm sure, of general jones and his long career. you know, he's 40 years in the military, marine corps commandant, ahead of the

european supreme allied commander before taking the nsa job. and we'll see how this develops, as far as national security policy. since he was deputy, i don't think you will see a big sweeping change. it is just interesting the timing of this announcement, on this day, friday, before, you know, 25 days to the midterms, bret, thanks, and we're glad to get your inputs on this and there will be more on "special report" tonight, thanks. >> thanks, martha, let's bring in retired general scales, on the phone, what is your react to the news, jim jones stepping down. >> caller: i think the reaction is similar to most of those in uniform who have been in business a while that jim jones as going to leave and i'll echo what bret said, most surprising is the timing of it, the fact that he is doing it 25 days before an election but, everyone who i have spoken to knows that he was very very, unhappy in this job, and he is -- when he served in uniform, he was the

quintessential insider. and, he worked from the inside, very effectively. and i think what he discovered is that he never really was sort of the national security insider, that he had hoped to be. because he never really worked his way into the obama inner circle. and i think that was frustrating to him personally and professionally and that was reflected in the woodward book and i think what you are seeing now is the whole distemper playing out with him quitting 25 days before an election. bill: what happens in a case like this when you are arguing for how a war should be fought? and maybe you are winning your argument but in this case maybe you are not. is that a good enough reason to say, maybe my services, and the decisions and the advice i'm giving are not necessarily wanted? >> that is exactly right. and, remember now, there is also a personal aspect to this, too. general jones has long been very much a guy in control.

he has always had his policies followed to the letter. and, working at a milieu where command and control don't necessarily work in a political environment, even if his advice is followed, critical things like access, decision making, being involved in the inner circle, being at the final decision making point, all of these things which are very frustrating for him, have all played out. so, in many ways, his policies or his ideas about policies have been followed through by the administration. but, on a much more personal point of view, i think he is frustrated that his access and his context, perhapserperhapser perhaps are not what he had hoped. martha: it is a position where you spend time in the west wing and it leaves one to ask, how many military folks are left there, as advisors in the west wing on a day-to-day basis,

bremen over at homeland security and is there anyone who is close to the president in the circle with a deep military background. >> the great hope for those of us who kind of know how the town works, is lieutenant general doug loot. we all know him as being bipartisan, a politicpolitical, intelligence, and great empathy for soldiers and marines. martha: are you hearing he has the president's ear. >> i think he does, certainly not to the degree jones does or did but doug is hive respected and personally, i confess a friend of mine but i think, if the president has -- if he has the president's ear, i think that the policy the president has put in place for afghanistan will continue. but, you know, that is not say that doug will be the national security advisor. i don't think that is likely. martha: all right, general scales, thanks so much for coming in and talking to us today, big news, thank you, sir. bill: this dominos lining up, christine romer and larry

summers on the financial side, they are gone and leaving and rahm emanuel on the political side of the white house, he's gone and now james jones on the military front. martha: and it raises the question, do you replace them with people who have been there or do you shake it up and bring in people with a different perspective on things and so far that is not what we have seen in terms of the economic team or -- >> this is a president who always said he likes to put people around him who do not agree with him and who challenge him and who in meetings present a different point of view. and, to your pointed, we'll see what he does with that. do you bring in people like-minded or who are willing to challenge you and the decisions you are making and the policies you are pursuing. this is a fascinating time, martha. martha: it is. bill: and you talk about the october surprise, it is it, 25 days away from midterms. more on this developing story and a battle brewing in for public schools, saying the unions are working to force fresh young teachers out of the

classroom, is that the case? why would that be? changes in one city that could reverberate across the country. stay tuned for that. it is fascinating.

>> schools fail 25 years and you know they'll do exactly the same thing this year, they failed that for 25 years... that kind of a craziness has to end. we have to go to the educators and say it's our job to come up with innovation and we'd have to fix it and, look, if it means we adults have to work longer, then we have to work longer and we cannot let america's children down. martha: that is jeffrey canada in the movie "waiting for superman" and puts the failures in the u.s. school system front and center and everybody is talking about the movie and the aclu now is trying do reform in the first in, first out rule,

and often ends up sending a lot of good, young teachers out the door in favor of those with more seniority and tenure and it would limit the number of cuts they say, the plan they do in l.a. in the city schools and would spread it more around the district so inner-city schools are not depleted of new, young teachers who often start their careers in the inner city because that is the first place they can get a job and there are 445,000 members in california, two large teachers unions and that's a lot of folks and they are not happy about the plan for reform in california and like to be protected, by the seniority and the tenure, joining me now is aj duffy, the president of the united teachers of los angeles, and he is against this proposal. duffy, welcome, good to have you here. i know you go by your last name. >> thank you for having me on the show. martha: why are you against the proposal. >> earlier someone described the utla was in a battle with the aclu and we're not in a battle with the aclu. we appreciate all of the efforts of the aclu.

we just believe that the aclu and the school district, los angeles unified school district, are not really dealing with the root cause of why teachers leave. the turnover of teachers in our inner-city schools, mostly, new, young teachers, is due to and studies back this up, what teachers wants in their schools is not necessarily extra money, money is good, but it is lower on the list. what teachers want and need, is a secure, safe, clean, healthy environment, in which to work in. they want true administrative backup and support, particularly, in the area of -- >> you raise an interesting question. >> and, shared, districted leadership so they can have buy-in. martha: and there are schools and some of them you see in the movie and i know in l.a., inner cities, some schools are a dump, an embarrassment to the american education system and there is no

reason why we should have schools like this, given the amount of money which has increased, year-over-year over year, that goes into the school system and what is happening? where is the money going? and why, is it not improving our school system if we are spending more money and the results are declining. >> in california, california, is the 8th largest economy in the world and we are 48th in per-pupil spending. clearly, we have work to do. but, there are also a lot of very good things happening in california schools. and, to frame this debate around bad teachers, good teachers, or to frame the debate around, this is a failing school district is not accurate. again... martha: let me ask you -- >> changes need to come and we have been part of change and we have put forth significant reforms to the district. martha: it is important everybody work together. why not throw out seniority and tenure and why not judge teachers like everybody else, in the world, me, you, everyone

else, out there, gets judged on their job and that is on their performance and whether or not they are doing a good job? why not get rid of tenure and seniority. >> first off, we don't have tenure. we have permanence and what -- >> same idea. >> it gives us the right to protect teachers' rights. your audience needs to know that. we are willing to talk about seniority but we have looked at study after study after study and there are no credible studies that say getting rid of seniority has an appreciable, positive effect upon students. we believe that teachers need to be evaluated with multiple measures, and we are now in negotiations to create an evaluation system that works for the kids, and, that is... bill: the most important thing is what works for the kids and we have 2,000 dropout factories, as the president called them himself in the country, and many are in inner cities and some of them are in los angeles, and, thank you for being here today. >> the teachers didn't create

those situations. it is important to note, school districts created those situations. not teachers. martha: a lot of entrenched problems, no doubt about it and we will get to the bottom of it, it's an earthquake going on underneath education. thank you very much, duffy, good to have you here. bill: charlie crist was a college quarterback, and the video you are about to see, will not prove that, and, we kid because we can, and former labor secretary is live in a matter of minutes here. back in a moment.