weather will be good. gregg will be watching the casey anthony coverage throughout the weekend. "happen position now" starts right now, stick around for that. julie: this is a fox news alert, hello i'm julie banderas, bombshell news breaking out of lower manhattan as dominic strauss-kahn, the former imf chief, forced to resign as the chief, now fox confirms dominic strauss-kahn will be released without bail. what does that mean? released on his own reconnaissance. as you recall he has faced about seven federal charges of -- included, rather, attempted rape, due to a housekeeper at the sofitel hotel who had accused him of forcing her to perform oral sex and attempting rape on her, now, her credibility in question today, a person familiar with the investigation saying that the manhattan district attorney's office will agree to release dominic strauss-kahn without bail. if you recall, he posted a million dollars cash bail, $6 million total in

collateral. he had been spending some $200,000 a month on security. he was on house arrest. and on top of that, spending $50,000 to live in a townhome downtown in tribeca due to the fact he was not allowed to leave this country. he still has to stay in the united states, however, released without bail, meaning for longer on house arrest, and now, we will continue to wait and see what kind of testimony they're going to be getting in the investigation regarding this housekeeper and her story, apparently that is falling apart. jon: what a dramatic turn of events in this story. good morning to you on this friday before the fourth of july, i'm jon scott. julie: i'm julie banderas in for jenna lee. we begin with another delay in the casey anthony murder trial. jon: judge belvin perry is calling an indefinite recess, the prosecution was planning to continue its rebuttal case by calling two witnesses to dispute defense testimony that medical examiners did a shoddy job

with caylee anthony's autopsy. julie: defense attorney jose baez objecting, saying this wasn't included in any reports, the judge calling a recess to give them time to de pose the witnesses. jon: the prosecution was also planning on rebutting cindy anthony's testimony yesterday. you might remember casey's mother claimed she is the one who did internet searches for chlorophyll and chloroform on the anthony home computer, all this now is going to have to wait, judge perry saying he was going to give the attorneys tomorrow off to prepare closing arguments but now, they're going to have to work. phil keating live in orlando outside the courtroom. these new depositions, are they underway now, phil? >> reporter error jon, in fact they are, right over my shoulder, the courthouse annex in downtown orlando, jose baez, casey anthony's lead attorney, as well as jeff ashton, assistant prosecutor for the state of florida, went into that room and they are now de posing two forensic scientists that the state plans to bring up.

as you mentioned, about rebutting the testimony by dr. vernon spitz that the autopsy was done shodly, but also, cindy anthony's former coworkers, casey anthony's mother, who had that shocking testimony last thursday where she said she was at home in mid march 2008 doing those chlorophyll and chloroform searches herself, not her daughter casey, and the state also has their computer experts, new experts, in light of that testimony, who will attack that theory with authorities. >> these were searches based on information she provided in her testimony and that there is no reference to those terms either in the unallocated, deleted firefox history or on the entire hard drive. >> reporter: and her former coworkers, of cindy anthony's, are supposed to testify that on those

specific days in those specific windows of time in the afternoon their computer records and work records at genteva health care show that cindy anthony was not at home but actively working at her desk. i spoke with her attorney last night, mark l pivment ppman, he is concerned that cindy anthony could be charged with purgey. jon: late yesterday the judge was saying it looked like tomorrow afternoon for deliberations to get underway. i imagine all of this has shot a hole in that timetable, huh? >> >> reporter: yeah, everything being delayed a step further here. tomorrow, we'll probably have the state's rebuttal case, today, we'll do depositions all day long and perhaps closing arguments throughout the day sunday and then maybe sunday evening, this jury gets to take this case into the deliberations room, and they will work through the fourth of july weekend until they come up with a verdict. however, as every day goes longer here, judge belvin perry, jr. clearly expressing he does not want to see this stretch out any further.

>> we'll give you all the time that you need, but if i find out that this is an imaginary problem, because these folks are ready to return to their homes. >> reporter: and that, you can bank on. this trial began the last week of may. we've gone through memorial day weekend with this jury sequestered, not able to go out and live their life and have fun, they're all sequestered at a hotel in orlando, 100 miles away from their friends and family where they live in clearwater, florida, we've gone through the entire month of june, now we're into july and it looks like their fourth of july weekend is also going to be flushed down the drain, and this raises issues of whether their verdict is going to be maybe too speedy perhaps because they just want to get home, but that will be discussed, of course, once we get to the verdict and then -- we assume that will be next week. jon: got to feel sorry for them, sequestered.

phil ceeting, thank you. julie: for more on the trial, dr. michael badenor forensic path ologist and fox news contributor joins us and jury consultant julie constantit will join us. prosecutors want to call dr. burger and dr. warren to dispute the testimony of dr. spitz that say that medical examiners did a shoddy autopsy in neglecting to open caylee's skull. do you agree? >> i think the autopsy was an incomplete autopsy, a normal autopsy, you look at the jorans in the abdomen, the chest, the head. here, there was no abdomen, there was no chest, the only thing to look into was the skull, and that wasn't looked into. that's part of a complete autopsy. and for an anthropologist to be called to dispute what the forensic pathologist said is just improper, because the anthropologist's

job is different than dr. spitz's job, which is to determine anything involving the cause of death. julie: so if you're saying they can't obviously perform an autopsy on organs and the only remains of her was the skull, why is it that they would overlook that, and is that something that the defense will use in their favor? >> i think the defense is using it in its favor. julie: but is it going to work? >> it goes to guilt or innocence of casey as -- i'm not commenting upon, but i'm saying normally the skull would be removed, there was material in there, in the skull that dr. spitz found. >> julie: the toxicologist did a cranial wash and found nothing. >> that's also bizarre. what they should have taken was the material in the skull and tested -- or the toxicology receives it and tests it, instead, they didn't take any of the material. it's like not taking the brain but taking a washing of the brain and whatever is

in there. and that is just improper, the toxicologist does what's sent to him, he does his job, but the pathologist should have sent the material that was in the skull to be looked for microscopically and tox logically and that wasn't done. >> susan, you've got to give it to the jurors. these are not scientists and they're not forensic pathologists and they somehow have to dice he can't this information as dr. baden is explaining it to all of us, he's the expert, and we're all sort of thinking yeah, that makes sense, but the prosecution wants their expert to say that unlike what doctors have said, that apparently they're just -- there's just not enough evidence there. is this going to confuse jurors in the fact that there was no organic matter in the skull as the experts are saying and that nothing could have been sent off for further testing? >> yes, i think it can. and one of the things that we have to think about here is that, you know, all -- jurors are made up of different types of learning and communications styles.

some of them really can only retain so much information because they tend or more visual. we have jurors on the pool that have not taken any notes whatsoever. they're not going to remember all this information. therefore, they're going to tend to be depending on other peoples' notes or transcripts that they find. but it's going to be really crucial, you know, how they actually communicate and retain information. we have visual jurors, audtory jurors, people moved by emotion and the jurors that want to dot every i and cross every t and that's what dr. baden was saying, those are the ones i would be really concerned about, absolutely. julie: i also want to get back to cindy anthony's testimony, because it seems that since the parents have taken the stand a lot of interesting stuff has come out. dr. baden. when sundy anthony went on the stand and talked about an existing stain in the trufng of the car, it almost seemed as if all of the

sudden she seems to be trying to protect her daughter by coming up with this stain theory, even though her husband who was a cop for ten years said the trunk smells like death. >> that's also -- that also concernsby about forensic science. the stain in the car is described as being a clear stain, and it's due to decomposition fluid from a body that was there. but decomposition fluid is black, it's dark. it doesn't leave a clear stain. it was tested and there was no dna on it. and i think that that's also bad forensic science. but i will agree, very much with susan's comment, about the jury. probably the most important thing in this whole trial, aside from any science, was how the jury was picked on day one. julie: yeah, i mean, it just -- you know, first of all, they need to prove beyond a reasonable doubt that casey anthony was responsible for her daughter's death and if the forensic science doesn't add up, ultimately, susan, i mean, where does your gut

tell you this is going to end up as far as a verdict? >> well, my verdict says that -- first of all, the visual impact of george anthony saying if i close my eyes i can remember and visualize what that smell of de composed -- decomposition smells like, that was not only a -- only a visual but ca nf istethic and moved that entire jury. it's important for either side to paint visual term r term knowledge and visual pictures what that looks like, removing the skull and like dr. michael baden was saying, that brain matter in there, that will put all the pieces together for the very analytical jurors that want to dot every i. julie: that's all the time we have, susan constantit and dr. michael baden, thank you very much for your expertise. fox news alert for you, that wildfire burning in new mexico is now the largest in

state history. the fire near the los alamos nuclear lab is burning more than 100,000 acres. the flames are only 4 percent contained at this hour, and more than 1000 firefighters are battling this thing on the scene right now, they're lighting backfires to remove the brush and other fuels, the area, very dry. it can quickly ignite. we're going to have a live report from new mexico in the next hour. and a stunning reversal in the sexual assault case against dominic strauss-kahn, why the former imf chief could soon be a free man. plus, republican leaders under increasing pressure to sign the debt limit pledge. who has and hasn't signed it? find out. and jon is over at the dot com wall with your choices of the day. you get to pick what story you see. jon: it is a daily tradition, a little less than two hours from now we're going to be showing our must-see moment of the day and we let viewers

decide. go to the foxnews.com page, if you scroll down the page, over here in the lower righthand corner, you choose, what do you want to see? this very big baby, a newborn giraffe? the most efficient government building in america? that's choice number two. and number three, los angeles guy who finds a way to put hundreds of gallons of gas in his tank, but well, he could go to jail for what he did. we'll tell you about it, if it's the one you pick. your must-see moment of the day. you vote, foxnews.com, happening now, it's your other news source.

julie: a fox news alert for you and a power plant implosion that we are awaiting in frisco, texas, this power plant has served texas for 50 years and it will come crumbling down just minutes from now, it is the retired colon power plant in frisco. as soon as that happens, we'll bring you that amazing picture. we never get sick of implosions. jon: what goes up must come down. julie: there you go, live tv for you! jon: right now a stunning turnaround in the sexual assault case against dominic strauss-kahn, prosecutors agreeing to free the former chief of the international

monetary fund on his own reconnaissance, that means he's free without bail, amid widespread reports the hotel maid accusing him of rape has been telling prosecutors a whole pack of lies. laura ingle, live outside the courthouse in lower manhattan. what do we expect at this hearing? >> reporter: hi jon. the tone of today's court appearance has certainly taken a dramatic change as we stand by and wait for this appearance to begin. we have some brand new tapes to show you as dominic strauss-kahn and his lawyers, arriving here in court today, moments ago. they will not discuss the reports that strauss-kahn will be released on his own reconnaissance and neither will the prosecution, though there are many reports saying that is exactly what's going to happen, strauss-kahn still charged with seven very serious offenses including felony criminal sexual act and attempted rape, credibility has been at the heart of this case from the start with the accuser's legal team main take she is a hard working single mother who is

devastated and traumatized by the alleged sexual attack, while strauss-kahn's lawyers say no crime was committed. here's a lawyer from both sides earlier this month. >> once the evidence is reviewed, it will be clear that there was no element of forcible compulsion in this case whatsoever, any suggestion to the contrary is simply not credible. >> the victim wants you to know that all of dominic strauss-kohn's power, money and influence throughout the world will not keep the truth about what he did to her in that hotel room from coming out. >> reporter: as we know, new information at any point in a case can affect a bail decision and that is exactly what's happening today. again, this court appearance is expected to get underway in just a matter of moments, jon. jon: all this, as there are those reports out there that the case against him is completely falling apart, right? >> reporter: yeah, we are certainly hearing that, and

again, prosecutors won't talk to us about that, but we're hoping we're going to hear more of that once this gets underway. the defense attorneys have been arguing this story was packed with lies, and now even the prosecutors in the case have reportedly said that they've got a problem with the maid's story and even about her background. this, of course, we all talk about the sofitel hotel, we have tapes to show you of that, according to published reports, the accuser had a phone conversation about an incarcerated man within a day of her encounter with strauss-kahn at new york's sofitel hotel in may, the call was recorded and she is reportedly heard discussing the possible benefits of pursuing charges against strauss-kahn. of course, that is going to be a huge problem for prosecutors moving forward, and we'll continue to keep you up to speed on what happens inside this courtroom behind me as the world's media is camped out and watching and waiting to see what happens as well. back to you. jon: what a turnaround in developments, laura ingle, reporting live, thank you. julie: right now new developments in a controversial probe.

the justice department, going forward with a criminal investigation into terror detainee deaths during the bush administration. now critics questioning what's really behind this decision. and many stores welcome service dogs, but what about allowing one of these through the door? coming up, businesses fighting back against a government requirement to accommodate service horses, next.

>> ♪ >> ♪ >> ♪ >> ♪ >> ♪ jon: cute, right?

you've heard of service dogs that help people with special needs, but how about service horses? it's a growing trend, minature horses, trained to help disabled people. the tiny horses are cute, but they are creating some big problems for businesses around the country. elizabeth mcdonald from fox business network joins us live in new york city. elizabeth. >> reporter: jon, we've got a pony here, and you're right, there's a new federal law, actually, it's called the americans with disabilities act, my pony is on a tour here, that basically says that hotels, airlines, even, you know, restaurants, gyms, all companies have to accommodate service animals. now, i shouldn't say it's a new law but there have been some amendments to it. what we're talking about here is if you're disabled, if you're blind or in a wheelchair or if you have any other issues that are considered to be disabled, you're allowed to bring your service animal into those

companies, and so what we're seeing is minature horses are being used across the country now instead of dogs but jon, the list is really interesting of what counts as a service animal under the federal law. let me tell you the list: monkeys, ferret, readents, pigs, snakes. so this is a real interesting trend that we're seeing here. we're live outside in the plaza here with rainbow the pony, the minature horses are probably about 5/5 the size of this pony but many businesses are having to contend with service animals being brought on to premiseses. even if you're allergic you have to allow these service animals in, the federal law supercedes state law. jon: i'm curious, what does a service pony do that for instance a service dog might not do? >> it's interesting, a lot of people actually like service minature horses because they're very dosil, they're very pleasant, and you know, they just are good company, they don't bark as

much and disrupt the other people around them, right jon? back to you. jon: little trigger. elizabeth mcdonald, thank you very much. julie: how do you get that in your car? >> jon: good question too! julie: the justice department is going full speed ahead into the investigation of two terror detainees during the bush administration and criminal charges are possible. reports say one of those deaths came at the u.s. military-run abu graib prison in iraq, the second reportedly happening when another suspect was in cia custody in afghanistan. catherine herridge picks up the story from here, from washington. so what is the latest? >> reporter: julie, good morning, thank you. since august 2209 federal prosecutor john durham has been investigating the cia detention and interrogation program, this is a second such review of the program, he reviewed the treatment of 101 detainees in u.s. custody and concluded two of the deaths warranted criminal investigation and both of these detainees died while in custody, one in iraq and the other in afghanistan. and really, analysts say the

endless litigation could make the u.s. intelligence risk averse when the risk has been more diversified, spreading to al-qaeda franchises in yemen and somalia, as well as the home grown component. >> we want our national security and counterterrorism professionals not to be looking behind their shoulder, wondering whether the next administration is going to second guess their moves that were authorized by law in the doj lawyers, and so i think it's demoralizing, it has been demoralizing for these folks. >> reporter: there's no indication when the last two investigations will bring charges or be effectively closed julie. julie: some groups i guess think the investigation should have gone further, right? >> reporter: that's right. in a statement released last night the aclu said senior administration officials under the previous administration should have been pursued as well, quote, for a period of several years, and with the approval of the bush administration's most senior officials, the cia operated an interrogation program that subjected prisoners to

unimaginable cruelty and violated both international and domestic law, the new investigation that attorney general holder announced is not proportionate to the scale and scope of the wrongdoing, those who support the system say it left invaluableiable intelligence, the interrogators operated within the parameters of the system and they point to the killing of usama bin laden where they say the foundational piece of intelligence came from that cia interrogation program, julie. julie: interesting. catherine herridge in washington, thank you very much. >> you're welcome. julie: jon. jon: the stalemate in washington over america's financial future. president obama sz it's time for wealthy americans to pay more in taxes. but republicans say they won't raise taxes on anyone. so how might this latest show down affect reaching a deal on the debt ceiling?

jon: fox news alert and one of the world's most eligible bachelors is officially off the market. prince albert of monaco married

south africa charlene w whittstock. there will be an elaborate ceremony this weekend. she is an olympic swimmer from south africa. she essentially replaces grace kelly who married prince ranier in 1956. prince albert marrying. julie: the president wants new taxes on the wealthiest. republicans say they will not sign on for any new taxes. to tax or not to tax, that is the question, right. >> reporter: that is the question in wrarbg ton, a lo waf

people writing on it. the president called for them to get it done, range in the debt. he made reference to tax breaks for corporate jet owners, how republicans unwillingness to remove that and other tax breaks for the wealthy is indicative of their unfairness in tax philosophy. it was a talking point that republicans immediately picked up hours after the president's speech. >> we must eliminate tax loopholes from millionaires, billion aeurbg aires. it's the time we return to fiscal discipline that democrats brought in the 90 when we balanced the budget and used the surplus to do what, mr. president, to pay down the debt. >> reporter: his critics say he

is playing the class war far card. they say a recession is no time to raise classes on anybody, especially ie the wealthy. >> is there a simple member of congress, democrat or republican who thinks that it's a good idea to raise hundreds of billions of dollars in job killing taxes when hundreds of millions are americans are out of work? >> reporter: when the senate resumes its session on tuesday after the july 4th holiday, their recess now canceled. no one is under any illusion republicans will cave to new taxes. don't look for a break next week, the sale mate continues. julie: what would removing the tax break for the corporate jet owners do in the end. >> reporter: it would amount to virtually a drop in the bucket, about $3 billion over the next decade. when you consider that budget negotiators are shooting for debt reduction of about

$2 trillion it's minimu minuscu. that's one of the reasons they say the president is playing the class warfare card. julie. julie: thank you very much. jon: there's been a major interruption in the casey anthony, judge belvin perry calling an indefinite recess so the defense can question prosecution witnesses. they are trying to dispute testimony that investigators did a shoddy job on caylee's autopsy. they were going to attack some key testimony from cindy's cases mother, cindy anthony. let's talk to our panel. is this routine for this kind of a trial, guys? joey let's start with you. should we expect more last minute hold ups. >> first of all, jon as we've seen in this trial nothing is routine. it's quite a zoo over there.

let's start here, look it's at the rebuttal case and what the prosecution has to decide is when is enough enough? i think that ultimately they have to come to grips with whether they feel comfortable enough inletting the case go to the jury and letting the jury decide. this is important for both sides and primarily you have a weary jury, jon. they have been there for a longtime, it's been, what, six weeks or longer, they've been sitting there, they've been patient. the judge has made certain promises in terms of we're going to get it done by the 4th of july. you have to balance the need for additional testimony in order to rebut points the defense made with the need to get a weary jury the says so they can make a decision, because a weary jury is an and rejury and we need them good tote it right and not just be expedient and go home. we'll see whether the prosecution will go forward, whether the defense has time to depose the witness, whether they withdraw that and left the witnesses testimony. the jury here is key, they want

to go home, let them go. get to summations here. jon: most observers are saying cindy anthony is trying to take the heat for her daughter. she is claiming she did the searches for chloroform. it leaves the prosecution in a very precarious spot, doesn't it? >> well it does, jon and it doesn't. i mean first of all i heard raoeurpls, or i rearumors, i ree fifth. unless judge perry tells them it has to do with whether or not her testimony is credible, now i'm the defense lawyer, i'm arguing ladies and gentlemen of the jury, she took the fifth and the implication is because she was somehow involved in the murder. i wouldn't put her on the witness stand. what do you need from her? joey is right about one thin. when an angry jury is angry the only thing they have to show you is they hold against the government. you have to be real, really

careful. unless it's a critical point don't do it. julie: there is talk about possibly exclude all her testimony, telling the jury ignore everything that casey's mother said when she was on the stand. >> interestingly, jon i've heard that. i think ultimately that won't happen. the jury will be instructed as to what they can consider and what they can't. one of the things the judge will be clear about is the jury has the right to accept the entirety of someone's testimony, they have the right to reject the entirety of someone's testimony or accept parts and reject others. when witnesses testify there are segments of what they give. some are credible, some are not deemed credible. the jury will decide whether she is lying or not. if they decide they don't believe some things the they wil reject. hopefully the case will end so the jury can make a decision that is reasonable and rational and they can go home.

jon: these are people who missed the memorial day weekend because of this case, now they are about to miss the 4th of july holiday locked up in a hotel room and as nice as the orlando hotel might be, wherever they are, you know, it's not fun to not be allowed to read newspapers, not be allowed to watch newscasts. not talk to your friends and neighbors. julie: i looked back over my career, i actually had a trial in delaware where the jury, i'm thinking about why i lost it, i lost because the jury wanted to get out of there for 4th of july weekend. they get real, real upset when they think that they've been kept there too long and they are going to be looking to see who to blame. i tell you for the government to try to put on thaoebgs perts about this stuff about the skull i think that is much ado about nothing. there was nothing there that baez put on that hurt them there. this thing about cindy anthony, for her to testify that she is the one that made the searches, this is a perfect example of how jose baez has butchered this case.

the whole case turned on chloroform and her testimony was that she searched for chloroform but the state's two witnesses contradicted themselves, their tikes perts. what baez should have been hampering away at is one expert said there was chloroform in the trunk and one expert said there wasn't. her credibility was credible when she said she was at work and that wasn't true. he is making up issues that come to hurt him when all he should be hammering away is on reasonable doubt. julie: joe, do you agree. >> fred you tell stories, what do you mean losing a case in delaware. this goes to the prosecution. they have to make the determination, jon. are you going to kill an ant with a hammer? when is enough enough? the prosecution has put on the case with experts. the jury heard the experts. the defense has experts that controvert and contradict what they say. the jury is smart enough to make a decision. you don't have to hammer on the

same point, that is what closing argument is for, jon. >> exactly. exactly. any lawyer who has told me he never lost a case he never tried a tough one. >> you're right about that. jon: thank you. julie: republicans are feeling the pressure to sign a pledge getting the national debt under control. the plan calls for spending cuts, a spending cap and a balanced budget. big names in the gop have signed on the dotted line. molly henneberg is live to tell us more. >> reporter: this is sponsored by a number of fiscally conservative groups and it asks lawmakers to cut cap and balance, cut federal spending substantially, cap federal spending in an enforceable way and pass a budget amendment -- julie: we have to interrupt as we bring you breaking news. dominique strauss-kahn we kr-pbt seen a grin on his case.

he has been released on his own recog nance again as he walks arm and arm with his wife amid a media circle. the french media in particular are loving this story today. from the very beginning there had been a lot of speculation that not only was the maid story completely false, jon, but in fact there was some sort of conspiracy theory because he was a frontrunner to run against nicholas sarkozy in french politics and become potentially the next french president. could those charges are dropped? according to sources close to the says the maid's story has a lot of holes in it. there were lies that she also told cops after she was questioned, a lot of questions really surfacing. but the fact that the prosecution even is saying that they don't have enough evidence, perhaps for those federal charges to stick, meaning that he is now out without bail. jon: you can imagine a lot of people in the french media and

overall in france are going to be saying, see, we told you so. >> reporter: a loyou. julie: a lot of pressure on the prous kwaougs. jon: we'll shall watching this. our national debt. there is a new twist in the big battle over what to do about it. could president obama just by has congress and raise the debt ceiling on his own? the debate over this so-called nuclear option. and why claim the president has the right to use it. you gotta try honey bunches of oats with almonds! it's got real, sliced california almonds with a third less sugar per serving than honey nut cheerios. wow! delicious!

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♪ hah @ jon: oh, you think things are who thhot in washington now. get a load of this. there are new questions whether president obama with raise the debt sealing youth congressional approval. this so-called nuclear option could give the president authority to extend uncle sam's credit limit on his own, and

some say it has constitutional backing. hum, let's hear more from paul gigot, the editorial editor for the "wall street journal." >> the 14th amendment section 4 says debt to the united states shall not be questioned. it was passed in the wake of the civil war but applied to all national debt. there is an argument to be made that congress cannot fail to honor debt in the united states. the president could citing that constitutional authority pay the debts eun hrat r euna u.n. ilat. jon: the validity of the public debt of the united states

authorized by law including debts for payment of pensions, pensions that is a very important word, and bounties for payment of services in suppressing inch sur recollection or rebellion shall not be questioned. your key point is that pensions, government obligations have to be paid. >> reporter: i think that is the point. of course the constitution as we know is fought overall the time and the inch interpreter nation of it and this issue has never come up since the civil war because the congress has always moved to extend the debt limit since that was imposed i think in the middle of the last century. what's happened here is we have a showdown, and will the president decide, look, i'm going to go ahead unilaterally to do this. if he did he could assert the constitutional power. there would be a political uproar but he would have to say to congress, stop me, make me not do it. it would be a little bit like

the war powers resolution, he cited the constitution to over rule a statute. jon: he's already got that war powers battle going on with congress where they are saying you have to come to us for approval of this libya thing and he's saying no i don't. >> reporter: this would have high political risk for the president. raising the debt ceiling at all is not popular with the person public, so paying off the debt in violation of the debt ceiling unilaterally without congressional approval would be highly controversial and so we'd have an even bigger political battle on our hands than we have now. jon: it will be interesting. paul gigot, thank you. paul hosts the journal editorial report this weekend at 3:00 p.m. eastern time sunday due to casey anthony coverage on saturday. and then stay tuned i'll host fox news watch right after that, 3:30 sunday eastern time. we will cover the media coverage of this week's stop stories. julie: everybody wants to save

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julie: the wedding season is in full swing and bride's want to look their best on their big day of course. the hunt for the right dress is a little easier, and you're going to love it, a little cheaper thanks to some big chain stores, even get this. your local costco. anita vogel is live in los angeles. >> reporter: of course we know

jenna lee already has her big dress for her big day this weekend, but for all the bride's to be out there who want to look like a princess on their wedding day but they don't exactly have that royal budget to spend, well there are some options for them in 2011. some nontraditional stores are selling wedding dresses and you might be surprised at what you can find that won't break the bank. >> i love it, yeah, this is my favorite one. this is the one that i actually picked out online too that i liked the most. >> reporter: this bride to be almost imagined herself in the perfect wedding dress. what she didn't quite count on was shopping for it at cast could he. >> my fiance saw they were going to be selling some of the dresses online. he made an appointment and here i am. >> reporter: costco is not alone. other retailer changes like ann taylor, j. crew and urban

outfitters are jumping in. not quite like the dresses that fly off the rack in larger high priced schools. at costco prices range from 699 to 1399 for a designer gown. >> they would sell for triple, at lease double of what they are selling here for today. >> reporter: bride's will save some on the dress of their dreams but still feel like a princess. >> this isn't like they are going after the rock-bottom price. they are not going to ebay to find a dress. they want somewhat of a bride cal experience. >> reporter: less than a third of bride's dar letting the economy dictate their wedding budget and that includes the dress. they say the wedding industry is surprisingly recession-proof and costco and ann taylor and all the other stores say they know the demand is there for something just a little

different. everybody wants to save a buck at the end of the day, even the bride, right, julie. >> you only get married once, in some cases a couple more, it's worth it. and you store it in your closet hoping one day your daughter will wear it one day, which will never happen. thank you very much. jon: is there some legend that my two daughters that i have to pay for their wedding. julie: yeah, you have time for changes. some of the groom's father are actually pitching in. i would go with that. jon: good to hear. there is a raging wildfire in new mexico, it is the largest in state history. the latest on what is burning there, burning dangerously close to the los alamos nuclear laboratory. we'll get you updated in a live report. a giant squid surfaces off the coast of florida, this thing nearly 25 feet long, weighs 200 pounds, these things are rarely seen. we'll talk to one of the fishermen who brought it in.

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jon: a big arrest in houston, texas. the murderer just escaped walker police arrested his ex- girlfriend the next day. they say she provided a getaway car. archie will be appearing in court today. he had overpowered one male and two female guards when he got out. jumped into a car that apparently had guns and drugs tonight. authorities wanted to get him back in custody very badly and right now he's in the slammer. >> a setback in the casey anthony murder trial. a final day of testimony put on

hold. jon: the judge was planning to give everyone the day off. the trial is up in the air. the defense objecting to witnesses for the prosecution's rebuttal. that caused the judge to call an indefinite recess. what's going on? >> i'll tell you, jon, the judge is angry within the jurors are undoubtedly angry. the jurors have already been there through one holiday. here is what's going on. today the prosecution plans to call back two witnesses to show there is no way cindy anthony, casey's mother searched chloroform on the computer because she was at home. a key con pop end of the prosecution's first degree murder case is this was pre-med kateed because casey searched

chloroform. jon: she was trying to figure out how to chloroform her child. that's the theory. >> when the mother said i searched chloroform. clearly she was protecting her daughter. rebuttal witnesses will show that cindy was at work and there are rumblings that cindy might take the fifth and not want to talk at all. this whole thing has turned into the jurors have no idea who to believe, and it's creating con news their minds. in my mind that's good for the defense. if jurors think everybody is lying, then who can they trust? jon: the judge is apparently able to tell them, if you think someone is lying you can disregard their testimony. >> you hit the nail on the head. if there is a portion of somebody's testimony you don't believe you are allowed to discredit all of their testimony and not take any of it into

accounts. if you believe that george anthony lied on the stand about this affair, something having nothing to do with poor little caylee. if you believe of lied about that, what else is he lying about? is he lying about not sending that text message? it opens up such a can of worms. everybody just wants to get this trial going and get it toward its conclusion. jon: you have still got a sad case involving the death of a little girl. the prosecution can't really prove how she died. that seems to be the biggest problem here. >> we have gotten so far away from the crux of this. it frustrates everyone involved except for the defense. we have seen the dysfunction of the family. in opening arguments the prosecution said we'll show

unequivocally casey did this to her little girl. i don't think we have seen this without a reasonable doubt. each side has holes in what they presented. it will be interesting to see what happens now. let's just hope that little caylee gets some justice. we are expecting things if we don't have other delays, expect the jury to probably get this case monday on the 4th. jon: they will be work on what should be a holiday weekend. they are also questionserred. they have been working saturdays. there has to be an inclination to get off their plates and get home. a quick verdict isn't necessarily a just verdict. >> that plays into the defense. if you are putting somebody to death, you need to contemplate that. if you are potentially putting somebody to death, which is voting for first degree murder, that's the second deliberation.

the first degree murder if they decide to convict on that, then death or life without parole are the only two options. that is something when a jury decides first degree that's something that generally takes a lot of contemplation. there are other things that casey could be convicted of outside of first degree. she could get second degree murder, aggravated manslaughter. personally i think that's where this is heading. there are too many liars in this case and the jury at the end of the day it only takes one to hang this jury. >> right now a raging wildfire burning near the los alamos national laboratory. so far scorching 103,000 acres. it's only 4% contained at this point. the lab is the premiere science facility and it's home to

hazardous materials. >> reporter: some good news to report. this lab which is where the first atom tick bomb was developed and which continues to be an important research facility looks like it's going to be safe. the winds yesterday which were strong, gusts to 45 miles an hour pushed the flames further north away from the lab and away from the city of lossal moles. there was a 10-mile long beautifuler line that held. now there is a 1% chance they'll lose containment. the winds will be lighter today, and weep hear they are getting 1,000 more for reinforcement. officials are along way from declaring victory. >> it's an indication of how severe this fire season is. we are seeing as firefighters, we are seeing extreme fire behavior and things we haven't seen in our careers. >> at 103,000 acres this is the

largest fire in new mexico history. but with the threat to the lab and the town of los alamos diminishing the evacuated residents want to know when they can go home. we are hearing it will be sunday at the earliest. the big problem now all the smoke. we spoke with the state's governor, suzannea martinez. >> they have to make sure the hospital is up and it's orderly the way they come back. what i like about the shelter when i visited. they are such positive minded people. they are cheery, they are grateful. >> and they still wanl to go home. maybe sunday, maybe monday. but governor martinez is spending a lot of time asking the residents of new mexico all across the state to not use fireworks on this long holiday weekend. she does not have the power as the governor to ban the sale though some companies including walmart have taken them off the shelf. she is urging anyone with fireworks in their possession to not let them off this long

weekend. >> thank you so much. jon: the blame game begins in minnesota as a budget stalemate shuts down state government. this as ohio avoids a similar program moments before last night's deadline. mike tobin live in chicago. he has more for us. >> reporter: 23,000 minnesota state employees if their jobs are not immediate live essential, and there is no pay check in the future and no end in sight. the 4th of july weekend. they are told the park is closed. workers with the department of transportation were told to take home their plants if they need water. this could be a little wheel. republicans and democrats are $1.5 billion apart and 180 degrees from each other. the republicans were elected on the promise of no new taxes.

>> in the past sick months i proposed that gap be resolved by raising taxes on only the wealthiest 2% pferl all minnesotans. the republicans have opposed it. >> reporter: ohio is deep in a partisan battle. the governor is closing the $6 billion to $8 billion budget gap with deep and painful cuts. hardest hit is the nursing home facility. police, construction workers, they are all feeling the pain in ohio. but in ohio governor kass i can got his budget through. he signed it last night. >> a desperate search in michigan for a missing baby girl. police made an arrest. but they say 4 1/2-month-old catherine phillips is still in danger.

we'll have scene update for you. venezuelan president hugo chavez is in cuba recovering from cancer surgery. so who is running the country? do you want to see more of the gas-stealing van? the indonesia draft or this green building on the right. [ male announcer ] this is lisa, who tries to stay ahd of her class.

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courtroom just a few minutes ago. >> we would like to advise the court of the circumstance that led us here today. at the time this case came to the district attorney's office we were faced with a credible claim a serious sexual assault. the facts of a sexual encounter was and is corroborated by forensic evidence. and a very brief time period inside the hotel suite strongly suggested something other than a consensual act. we conducted extensive interviews with the plaintiffs, co-workers, friend, hotel security, police officers, and

record and evidence. that was the state of the case. the accused before this court was on home confinement. even after the indictment,. jon: so that is some of what just happened in the courtroom in lower manhattan. just again, these are live pictures right of the attorneys for the victim. they maintain that the alleged victim in this case was the victim of a violent sexual assault. the prosecutors have done a little bit of digging into her background. they believe she may have some shaky element to her story. some ties to drug dealers. money launderers, and the charges of sexual assault against dominique strauss-kahn

are teetering. this is a man who was considered a possible next president of france. imagine the scene in this country if the roles were reversed. if one of our prominent presidential candidates was sitting in a courtroom accused of sexual assault in france. that's what the people of france have been seeing. so the fact that the charges against him have been diminished to the point the prosecutors -- the court is willing to let him out on his own recognizance quite a significant development. we'll keep an eye on it for you on "happening now." julie: an update on the amber alert for catherine phillips. she disappeared from her michigan home wednesday. police arrested a man believed to be her father, but there still is no sign of this little girl. patti ann browne is here with the latest and they say she is still in danger?

>> reporter: 4-month-old catherine phillips is still missing and police say thee is in extreme danger. they say the baby was abducted by sean michael phillips who may be her father. but they say the 21-year-old man took the baby from the mother's apartment. phillips was found at his parents home and taken into custody, but the infant was not with him. an amber alert is still in effect. baby catherine was last seen as the birch language apartments at 1:15 in the afternoon wednesday. she is 4 months old. 12 pounds with blue eyes. phillips was driving a silver 1998 intrigue four-door car. if you saw that car wednesday afternoon you are asked to call police. police are searching around hackard lake.

they say the phone rings and they are using it to triangulate its position. catherine's mother says if she is alive now, she is not going to be for much longer. she says she thinks she can get phillips to tell her where the baby is, but police won't let her talk to him. phillips is said to have had an argument with courtland. phillips is reportedly in the army national guard and just received deployment papers for afghanistan in few days ago. julie: thank you so much. jon: venezuela's strongman leader hugo chavez is running his government from cuba while he recovers from cancer surgery there. that's according to venezuela's vice president. steve? >> reporter: a lot of unknowns

about this case. he has been out of his own country in cuba for three weeks now. he has had two operations' the second operation he said was to remove a concernous tumor. how serious is the situation, what kind of cancer, what kind of recovery, all unknown. the information coming out of cuba, a nation with not the greatest history of telling the truth about its leaders' health yes dengs. the chief of the military says there has been no violation of the constitutional order. they say chavez is still in charge. they save he's getting better and will soon return. this case important to the u.s., venezuela a major oil exporter. hugo chavez is a fierce enemy of the u.s. government. another real concern is hugo chavez is basically a one-man show in venezuela. he rules that nation of 3.

>> million people. there is no twealg could happen if he is sidelined or removed from the scene suddenly. julie: a search for a indiana college student goes into its fourth week. today out fishing hooked one man much, much more than bargained for. ever seen one of those? he will tell us how he and his buddies managed to haul in that giant squid next. s s s ]

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jon: community leaders and residents coming out to support the family of missing indiana college student lauren conspiracy *. the search for the 20-year-old is entering its fourth week. a man charged in a shooting massacre at a long island pharmacy bleeds not guilty. prosecutors say he spent days looking for a target and staicts out the pharmacy the night before the robbery. former international monetary fund chief dominique strauss-kahn released without bail. the sexual assault case against him is reportedly collapsing. they uncovered serious security issues. that leaves the case in jeopardy. the district attorney in manhattan is about to make

remarks about the case. when he does so we'll take you there live. julie: that was the giant squid attack seen from disney's "20,000 leagues under the sea." in florida they encountered a giant squid. 25 feet long, weighing 200 pounds. it also happened to have been dead. i guess they didn't have to worry about a captain nemo-like fight. one of the three men who caught the giant squid -- apparently it wasn't dead when you reeled this in. you were fishing for dolphin

fish. then you get this on your reel. what did it look like? >> it looked like a giant squid. it's something you see on the discovery channel. you don't expect to see something like that. but it looked like a giant squid. julie: how did you pull this out of the water. 200 pounds. i pulled a sail fish out and i remember i had to have a lot of help. how did you get this thing out of the water? >> manhandled it with our own muscles into the back of the boat. julie: was it still moving? >> it was still moving a little bit. julie: what did you do with the thing? >> we kind of looked at each other and said, man, nobody is going to believe us if we don't take this back.

so we look it back and called up commercial fishermen that we knew, told them what we found. we brought it to their dock. and beget to the dock there are 50 people there taking pictures. we didn't think it would get this big. julie: what did they eventually do with it? i imagine it wasn't edible. >> we gave it to fish and wildlife and they took it. julie: it one be mount on anybody's wall is my point. >> no. it's suppose to be at the museum of natural history right now. julie: that's cool. paul, thank you so much. one of the three guys who caught that massive squid. i have never seen anything like it. jon: it looks scarier in the movies. julie: something about the

tentacles wrapping around that guy's neck. jon: pulling back the curtain on aon -- on a legal circus. imagine being one of the jurors. [ male announcer ] do you know how you will react when someone changes lanes without warning? or when you're distracted? when you're falling aeep at the wheel? do you know how you'll react?

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from all over the world. we are waiting for new york's district attorney to make some statements regarding dominique strauss-kahn. the criminal case against him charged with assaulting a new york hotel maid that seems to be collapse. over here on remote 239. o canada. they are happy there. the sight of prince ill a.m. and the new princess kate's first official state industries sit outside the u.k. the fire near los alamos national laboratories is on remote 249. you can see -- it's way over there. way on the other side of the board. but we are keeping an eye on that one. authorities are trying to keep that fire away from the laboratory and some of the spent nuclear fuel. remote 266 still waiting for the implosion of this old power

plant in texas. still standing. when it comes down we'll try to bring you those pictures live. julie: a lot going on behind the scenes in the casey anthony murder trial including some key testimony by casey's mother cindy. she said she left work early one day and searched the internet for chloroform and chlorophyll. sharon, by introduction this rebuttal testimony the prosecution is going try to discredit cindy anthony's testimony that she was lying about being on the computer by proving she was at work at the time. can the state strike cindy anthony's testimony if the judge

finds she committed perjury and lied on the stand? >> no, it's a question of credibility. i'm sure the defense will have a surrebuttal argument and will claim there was just to discrepancy in the records and she really wasn't there. there was a computer malfunction. they will find some way of deterring the attack. but the testimony won't be stricken. it's a question of credibility. if the jury thinks she is a liar they can discredit and thought consider anything she says. >> the prosecution has to prove this was premeditated murder in order to charge and convict her of first degree murder. so cindy's testimony is critic critical. >> right. that's the big problem with this case. all along it has been a circumstantial case. the prosecution's best evidence has been the conduct consistent with a consciousness of guilt on the part of casey.

who lets their daughter go mission for weeks and months and tries to make excuses as to where she is? there is no reasonable inference that can be drawn from that other than you were involved in her death. since we didn't know the cause of death than the prosecution had to develop a theory of the cause of death to show sit was premeditated murder. the chloroform was important testimony. i think the judge can -- if he find cindy anthony knowingly committed perjury. he has the right to strike her entire testimony from the jury. i think he probably won't do it because he doesn't want to create another appellate issue that casey can try to exploit on appeal. if i were the prosecutor i may not want that testimony stricken. i may want it in there during summation to tell the jury here is an example of a desperate defense team trying distract you from the issue in this case which is this defendant killed

her daughter. julie: what about george anthony's alleged mysteries. she says george once described caylee's death as an accident that snow bawled out of control. did she serve a purpose? >> i think she served a purpose that's helpful to the defense base either way the issue of accident comes into play regardless of whether the judge says that it can't consider her testimony in terms of the guilt or innocence of casey, they will. you can't unring the bell. so the mistresses' statements are important in that record. whether he had an affair with her is irrelevant and beside the point and i think this muddies the waters. julie: what about george anthony's suicide note? he didn't necessarily answer regarding casey on there. sort of left a question. does it show in this final hour

he was sure if caylee's death was not an accident and his daughter was indeed innocent? >> it's something for the defense to work with. give up what bayes promised during this opening statement. short of him getting a full mea culpa confession, i was involved in the accidental drowning of my grand daughter and i helped bury her body. they are grasping at straws. the statement that he made to supposedly made to his mistress is a hearsay statement. the judge didn't admit to it prove guilt or innocence. the jury hears this and you can't unring a bell. but does the letter reflect the grandfather who is overridden with grief at the loss of his granddaughter or reflect guilt on his parts. julie: here is what we want to know. what's going on now. the judge took an indefinite recess. he told the jurors, plan on sticking around until late

tonight. the state of florida allows depositions in criminal cases. while most states don't allow it. all these depositions create a big mess. they elongate trials. should the judge be giving jurors more time beyond the 4th of july? >> i mean -- >> if they need it, then -- i'm sorry. if they need it, then he's going have to give it to them. the judge can order that they get it done by a certain date. but if they are not ready to rule. then he doesn't have a choice but to let them do what they need to do and give them the time that they need. julie: i'm going ask you both to stick around. we'll break for some breaking news. jon: cyrus advanc vie.

>> the statements of the come plain nanlt, corroborating witnesses, police investigators and forensic evidence. as our prosecutors said in court today. after the indictment against the defendant was filed, we continued as an office to investigate the rigorously as we do and are obligated to do. that investigation raised concerns about the complaining witness' credibility. and we turned over to the defense the information that gave rise to those concerns as we are ethically and legally obligated to do. in addition, because our request for substantial bail was based in part on our assessment of the strength of our case at the time

of the indictment, we disclosed this information to the court today as well. today's proceedings did not dismiss the indictment, or any of the charges against the defendant. our prosecutors from the manhattan d.a.'s office will continue their investigation into these alleged crimes and will do so until we have uncovered all relevant facts. the vindication of the rights of sex crime victims is among the highest priorities of this office. and with regard to the treatment of this victim, we believe we have done nothing but to support her and everything in our power to maintain her privacy and to keep her safe. jon: that's cyrus vance jr.

the relatively new district in new york city talking about the case against dominique strauss-kahn, the former head of the international monetary fund, who lost that position after he was arrested for sexually assaulting a hotel maid. let's go back to our panel of attorneys. sharon, help us read between the lines there. he says the investigation is going to go on. but it sure sounds like the fact that he has been released, dominique strauss-kahn has been released on his own recognizance sounds like the prosecutors don't feel like they have much of a case against him anymore. >> that many exactly what's going on. it seems to me this woman is seeking to get asylum, and is going use whatever she can. it's not a typical to make up claims. she has a claim of rape on her

application for asylum. under the vowa act, the person just alleged a domestic violence and they can get asylum. it's really sad, but that's the way it works. the person being adduced doesn't have the opportunity to defend themselves. this is with immigration. so with this criminal case, i think the prosecution sees they have a terrible witness. she is not credible. she is a liar. she may be involved in some kind of drug or theft ring. their case is history. jon: you are a former prosecutor. you have got to believe your witnesses. did the prosecution jump into this thing too quickly? >> yes and no. i mean, in fairness to cy vance and his office. the guy was on a plane. we don't have an extradition treaty with france. they knew if they let him go across the pond and this

complainant was telling the truth, you have a victim who will possibly never get justice. they overplayed their hand, the perp walk. the exorbitant bail package for someone with no criminal history. a prominent individual. once the media descended on the court. then the prosecution got caught in all the hoopla and promised more than they could deliver. this case is history. they are releasing him on his own recognizance so they can do a faced the withdrawal. by the next court date july 18 the case is done. jon: it has the potential to turn into an interest nag ago turn into an interest nag ago event if it has d international

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gretchen: coming up on "america live." what will happen in the casey anthony trial? what happens when a jury gets angry. volunteers at a veteran's funeral says they have been forbidden from saying "god bless you." my in laws arrived for the holiday visit. but wait until you hear what one mother-in-law emailed her daughter-in-law and it's gone viral. jon: we'll be watching. america's ranking among the business friendly nations is on the decline. according to the latest list from the world bank it measures

world regulation and how ease why it is for entrepreneurs to thrive. >> there was a time when the principal threat came from the e.u.p. but now it faces competition from brazil, india and china. they stand among the top 40 most improved countries in terms of the ease of doing business. indeed the world bank find 85% of the nations have taken steps to improve the climate. singapore last year and for the fifth year running was the easiest place in the world to do business. second was hong kong, new zealand and the u.s. with the united states rounding out the top five. two years ago the u.s. ranked

number three. >> it's all about the business environment. taxes and regulations. clearly i think we would prefer to create job here. but when the. >> the economists we spoke with cite as a drag on the economy the uncertainty for business owners created by the work in progress of the kreefation of tens of thousands of pages of new regulations. the result last year's healthcare and and financial reform laws. >> what make a good regulation is a rule that is clear that is probably targeted to address a problem that's systemic. it's a rule that take care of the problem. it's a rule that has built-in mechanisms so when the problem disappears, the rule goes away.

>> reporter: the world bank study found 61 countries in the world impose a les less on less onerous tax burden and we do here. julie: what capitol hill and the white house are going to do about the debt. patti ann browne will have more from the breaking news desk. do woodchucks chuck wood? (high-pitched laughter) man: hey you dang woodchucks, quit chucking my wood!

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jon: it's a high stakes game of chicken on capitol hill with

taxpayers stuck in the middle. democrats and republicans are fighting over tax and spending as they try to negotiate raising the debt ceiling. both sides are digging in their heels or conditions to reach an agreement. a looming deadline could put the u.s. treasury in depaul roughly a month from now. let's talk about it with steve morris. if congress doesn't vote to raise the debt ceiling is it armageddon, steve? >> i don't think it is. it's not something we want to see. we would like to see this resolved. but i want to assure all of your viewers who own treasury bills and government security that those are safe. there will not be a default. the chances after detaught are close to zero. the government can continue to pay some of its bills even after the debt limit expires. some government agencies would have to close down. you would see a third of government agencies close down.

but the first thing that would be paid the would be the government securities. i don't think there is much of a chance of a default. i feel if we don't have some kind of deal where there is a credible and large reduction in spending and the deficit, i think you could see a financial crisis emerge where people say the united states is not serious about getting its deficit under control. jon: you think raising the debt ceiling without spending cuts will be important than getting up to the brink and having a default. >> this is the ultimate point of leverage that we are going to see in the next two years about bringing down that budget deficit. we can't continue to borrow a trillion and a half dollars a year if we don't get this budget down. i think we simply say give the federal government another $2 trillion or $3 trillion to borrow, i think that will cause

a panic. jon: thanks, steve. >> the vote pouring in for your must-see moment of the day. big baby or greener government. we'll have the answer next.

>> reporter: the interior of a van, the must-see moment of the day, jon. that is a garden hose. police say a man got busted for rigging the van with a garden hose and sieve fong gas out of a gas station and feeling 400 gallons of fuel at this ti time. they said he's been doing it for years. he's got a