available. the president wants to make sure he make as win there come november. during an interview recently the president talked about the campaign and talked about the most important issue the country is facing right now is the economy. >> what we can also continue to do is change our tax code so that we're rewarding companies that invest here in the united states as opposed to shipping jobs overseas. investing in our education system to have great new teachers especially in math and science, make college more after forable, invest in our infrastructure and bring down the deficit in balanced responsible way. those are all components of an overarching strategy. >> reporter: meantime over the weekend president obama while campaigning in virginia, another delegate-rich state and also a battle grand state, he refused to apologize for his attack on governor romney claiming the financial company, bain capital, outsourced jobs under

romney's leadership. the president telling wavtv. no, we will not apologize. mr. romney claims he is mr. fix-it for the economy because of his business experience. i think voters entirely legitimately want to know exactly what is his business experience. bill? bill: governor romney's team, they knew this was going to happen. how will they respond, the assaults from the obama team? >> reporter: mr. romney telling fox news that he is going on the offense with the political cronyism you mentioned about. what president obama says the most important issue for the country is the economy and jobs, jobs, and wants to provide for jobs for people and get them back as soon as possible. >> the best offense is to look at the president's record. i really think the american people will tire and probably already tired of

all the attacks and misdirected as they are. one after the other, of their attacks has been shown by independent fact checkers to be dishonest and fault. so a campaign based on dishonesty and falsehood does not have long legs. >> reporter: mr. romney wants to get everything back on focus of jobs and the economy. believes the president has failed in that regard. talking about the president has not provided hope and change. that he is a good family man but failed in providing jobs for the american people. has a jobs recovery plan. should note some of his republican friend and democrat critics of mr. romney that he should come out with specific detail of that plan. bill: kelly, thanks for that. reminder in half hour, a terrific debate. what karl rove calls this the gutter of politics today. so we will have that debate for you. martha? martha: ohio is one of the most important battleground

states particularly in 2012. no republican has ever won the presidency without winning the buckeye state. in 2008, president obama beat senator mccain by less than 300,000 votes in ohio. it looks to be a very close race again this time around. and we've got brand new poll this morning that shows something interesting and sad you could say that the american dream may be in a bit of trouble according to these numbers. it is a survey conducted by "the hill." it found that 47 of likely voters now believe it is not possible for them to achieve the dream of wealth in america. just 37% say they do believe that they could get rich one day in this country. start varney, host of "varney & company" on the fox business network joins me now. good mo, stuart. >> good morning martha. martha: what do you think about that? >> in a very weak economy and that has been weak for a period of years it is

understandable that a large number of people think they will gnat make it to the promised land financially. you have to ask what people consider rich. 40% of the people who responded to this survey think that $500,000 a year makes you rich. 19% thought that $100,000 a year made you rich. so the wide discrepancy what is rich and whether you can make it or not. if i can pass a judgment, if i can make an opinion, martha, it is that middle class status, making it to the promised land of middle america, that i think is still available to everybody in america whether it is a weak economy or not but that is a personal judgement of my own. martha: interesting, stuart. interesting to note that people seem to think wealthy is 500,000 and above as opposed to the president's number which is 250,000. >> yes. martha: 20% think it is oaf a million dollars. a good chunk there as well. let's talk about another indicator that came out this morning and that is retail

sales? >> terrible. martha: what does that tell us about what is going on? >> it is a terrible number. sales in june declined .5%. that is huge decline and unexpected. it tells us the economy is clearly weakening. in may retail sales were down. june retail sales were down some more. and a new survey out of national economists and they say hiring is weakening all over again. so too are the sales figures which we just reported. they have a negative outlook. in fact, most of them are looking for growth rate in the economy of 2% or less. and that is not a solid performance. martha: yeah. there are so many indicators out there, stuart, as you point out that we're hitting yet another rough patch. >> yes, we are. martha: in the economy. stuart, thank you very much. good to see you as always this morning. bill: stuart was talking about the survey released by the national association of business economics. it says u.s. jobs growth

appears worse than three months ago. of 67 economists surveyed, only 22% reported rising employment in july. that is down from 4% a year ago. on the upside only 9% saying employment was falling. martha: new worries out there from families what they're spending on higher education. the bad economy has caused parents to cut back. according to sallie mae, which is the country's largest student lender for loans for college. family spent 5% less on college this past academic year. more students are living at home to discuss down on the cost of college. more parents and students say now more than ever they're equating into the decision where to go to school what they can afford which is a bit of a change from what we've seen in the past. bill: so much to that story. shows how the country is changing in big ways. martha: sure does. bill: the fight to free americans taken hostage in egypt. a pastor and church member out of boston. the kidnapper is making

demands. we have the latest on that story coming up in a live report, martha. martha: this is the story of the summer. another heat wave is on the way. half of the country hits 90 degrees or more. how long will this last? is there relief in sight? we'll tell you. bill: accusation the white house is playing dirty on facts about bain. a fair and balanced debate on that. and what karl rove has to say. >> remember who is up for grabs in this election. independent voters. he was going to change and elevate the political discourse. this is gutter politics of the worse chicago sort. [ male announcer ] eligible for medicare?

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first voyage out. it had just docked. nobody was hurt. the nobody was hurt. the steam wheeler screw was extremely apologetic, explaining they hadn't sailed the boat in four years. it usually sits at the waterfront. sound like a bit of organizational issue happening there. but everybody is okay. bill: there is solution for that. called wd-40. run it through a little bit. is the economy cranking the way we would like it? four years after running a campaign on hope and change, president obama admits washington is still broken. in an interview with cbs, mr. obama seemed to acknowledge he is fallen short of the economy and says he has no problem with romney's line of attack on that. have a listen. >> suppose, i mean he clearly will say, let's look at your record. look at the fact unemployment is at 8.2%. it is unlikely to change. let's look at that how effective the stimulus was.

>> right. >> let's look at your management of the economy. >> exactly. >> yes, it was a bad hand you were dealt but you have not made it to what it ought to be. >> right. >> that is the centrality of their campaign. >> exactly. that is his argument. you don't hear me complaining about making that argument. if i was in his shoes i would be making the same argue man argument. bill: stephen hayes, "weekly standard." what did you take of that comment. >> everybody understands this. this is clear. especially given the events past three months that the economy is not doing what he said it was going to do. remember he was a president elected back in 2008 with 59% of voters telling exit voters that was the main reason in terms of policies they were voting for him. everybody acknowledges that he hasn't done what he needs to. the question whether that has been priced in. are voters already looking beyond that, that failure.

bill: why would they? >> well that is a good question. this happens with the stock market. do investors sometimes look at stocks and they know bad news has come and they know that they're probably going to expect more but they think, in the big picture unless we see something that is more compelling, another stock to invest in, we're not going to change. we're going to ride what we've got. we may see some that right now with this presidential race. bill: charlie rose's words sound like romney commercial. unemployment 8.2% unlikely to change. look at effectiveness of the stimulus. you have not made it what it ought to be the economy. you're here to argue this is opening for romney. >> yeah. bill: has he successfully captured that do you think? >> i think it certainly is an opening for romney. there is no question the romney campaign has been hammering president obama relentlessly on this question of the economy. every day reporters get, you know, a handful of press releases pointing out one or

another failures on president obama on the economy. so there is no question that they have been taking their shots and given the events of the past three months, bad economic news of the past three months, one would think you might have seen it show up more in the polling. bill: here is another bit of that interview with charlie rose on cbs listen toward the end of this i will ask you specifically about it. >> washington feels as broken as it did four years ago. and, you know, you know, if you ask me what is the one thing that has frustrated me most over the last four years, it's not the hard work. it's not, you know, enormity of the decisions. it is not the pace. it is that i haven't been able to change the atmosphere here in washington. bill: change the atmosphere in washington. >> yeah. i think this actually is a very big opening for the romney campaign. the look the president's own

case on his own behalf, his best cases that he was impotent. he wasn't able to change washington but i think there is better case that the romney campaign could make and that is this. mr. president, you exacerbated the problem. not only did you not change the atmosphere you made it worse. bill: how so, steve? >> wealthy back to the steve the president gave at george washington university taking on pile ryan and the budget. it was a speech, i would say intensely personal. strayed beyond just a critique of the policies. this president has gone out and given speeches at fund raisers in which he questioned whether paul ryan among others was telling the truth about his budget plans. he has been a rather partisan president. look at this, not just my opinion. look how he got health care through, on partisan basis. look how he got the stimulus through, on a partisan basis. bill: how is he going to change washington in 2008? think about the campaign that he was elected on.

what was the premise then? what was going to change? >> that was his main argument. remember this is a guy who made his splash on the national stage when he gave a speech talking about how we were going to move beyond red america and blue america. we were going to be a united america. four years later he made a similar case in 2008, and suggested in his campaign surrogates suggested this was going to be a post-partisan presidency. our problems were too big to sort of dwell on the minutia of partisan politics. and in fact, that's what i think we've seen from the much 3 1/2, four years. bill: steve, thank you for your time. there is more from that interview from charlie rose we will play later today and how mitt romney responded. stephen hayes. thank you. >> thank you. martha: there is controversy brewing over the u.s.'s olympic uniforms. have you seen these? do they look like they're from the united states of america? we'll talk about that.

why senate majority leader harry reid says he thinks those uniforms for the opening ceremony should be piled together and burned. bill: sounds like a bonfire, doesn't it? severe weather taking a deadly turn. lightning striking at a soccer match. have a listen. >> nothing i've ever seen before in 22 years of law enforcement. it hit the top of the tree and like sparks and fire going all the way down the tree. when it hit the ground it dispersed out. [ male announcer ] your favorite foods fighting you? fight back fast with tums. calcium rich tums goes to work in seconds. nothing works faster. ♪ tum tum tum tum tums welcome to hotels.com.ster. summer road trip, huh? as the hotel experts, finding you the perfect place is all we do. this summer, save up to 30%, plus get up to $100 on us. welcome to hotels.com. [ male announcer ] ok, so you're no marathon man.

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bill: we are now 22 minutes past the hour. california calling in five army national guard helicopters to fight a fast-moving flames there north of sacramento. it already has destroyed one home and threatened 170 others. u.s. retail sales taking a dive for a third straight month. down about half a percent in june. that is according to the commerce department. declining sales on things

like cars and furniture, appliances and building supplies. "ice age" taking the top spot at the weekend box-office. it took in $46 million. >> oh, i know what you've got. the "l" word. >> yeah. leprosy. >> no, cyd. four letters, starts with l, ends with e. >> uh-huh. lice. >> no, love. >> oh, yeah, love. bill: you could have that too i guess. our parent company put out that movie, news corporation. martha: so much fun. bill: so successful too. well-done. martha: this story coming up for you. there was tragedy that unfolded over the weekend on a soccer field. a bolt of lightning killing two men. another man was hospitalized. he is said to be in stable condition today. it happened in houston the

lightning hit a tree under which the men were seeking shelter during storm. the thunderbolt came out of the blue according to folks there and gave them no warning. >> there were three guys the lightning came and hit the tree and they like flew. >> it came pretty quick. it was a fast-moving storm. i was out on a call when this one dropped and, didn't have my raincoat on. and next thing i know, it is pouring down rain and this call dropped. it was that fast. martha: boy, fast and lethal. about 300 people were in the area when that storm hit. more extreme weather is coming. another sizzling heat wave is about to hit an area that stretches from the midwest all the way up to the northeast. meteorologist maria molina is live on that in the fox extreme weather center this morning. good morning, maria. >> martha, that's right. we're expecting another heat wave across the midwest, great lakes and parts of the northeast. basically this one will not

last as long as that heat wave that we had that lasted over a week that is somewhat good news. we'll see a bit of relief when we head into wednesday when cold front swings through and lowers humidity across portions of the midwest and we'll see relief by the northeast on thursday. first we have to deal with it the heat wave. 99 is the high temperature in minneapolis and rapid city. you add in humidity so it feels hotter. we have a number of heat index values that could exceed 100 degrees over south dakota, minnesota and wisconsin. that is the reason we have heat advisories in place. we have excessive heat warning across philadelphia area and new jersey and southeastern pennsylvania. we'll start to see the heat as welcoming up this afternoon and next couple of days. by tomorrow, 97 could be the high temperature in philadelphia. triple digits possible in d.c. just shy of 100 degrees in upstate new york in syracuse where we could see a high of 99 degrees. keep in mind that is the

just the actual temperature. when you add in humidity it feels even worse. basically where we should be in this time of the year only the upper 80s in d.c.. by thursday, triple digits. 90 will be the high temperature in d.c. by chick by wednesday in chicago you will see cooler air moving in. martha: hotter in d.c. than it is in tampa, florida. it is summer after all. bill: we had summer storms roll through here last night. martha: yes we did. bill: rumbling across. martha: we hadn't seen rain in white quite a while. that is good. bill: a pastor kidnapped in egypt. why his medical condition could make this a race of time. martha: karl rove blasting the president's re-election team engaging in what he calls gutter politics. should the president apologize for the attacks on romney's record? we have a fair and balanced debate coming up on that.

down here, folks measure commitment by what's getting done. the twenty billion doars bp committed has helped fund economic and environmental recovery. long-term, bp's made a five hundred million dollar commitment to support scientists studying the environment. and the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons. the progress continues... but that doesn't mean our job is done. we're still committed to seeing this through. bill: some developing story from overseas now. two americans on a church trip in egypt are held by kidnappers. including a pastor from boston. his name is michael louis. he is a reverend. those closest to him are trying to stay positive back at home. >> we're still in good spirits. we're still praying for him.

>> we do need him to come back to boston as soon as possible and we hope nothing won't happy to him. >> there is no word for it. i can't believe this. this is a man of god. bill: greg palkot is on the story out of london. what is the latest on the kidnapping of this ref end, greg -- reverend? >> reporter: we got off the phone with cairo. they're working to get the release of these individuals. it happened on friday in sinai peninsula. that is where the church group made a trip to a religious site. the bus was stopped by armed tribal bedouin. pastor louis and another tour guide yanked off the bus. demands from the hostage-takers their uncle and another individual allegedly arrested on drug charges in alexandria should be released or these people would not be released. reports were that they were

being well-taken care of but the threat made not in 24 hours these two individuals were released there could be harm done to the americans, bill. bill: specifically in that part of egypt it is not common, or uncommon for kidnappings. but sometimes they last a few hours and it is over. what has been the reaction back at home? >> reporter: you can imagine, bill, the folks in that boston area church very concerned. they said if they knew it was so dangerous for their fellow churchgoers to be traveling in this area maybe they would have rethought it. perhaps they should have. just in the past year there have been three american tour groups targeted by the bedouins. usually they're going for ransom money. in this case they're looking for the release from jail of the prisoner. in fact that whole area has since the fall of the mubarak regime has been targeted hard. the latest word from our contact in cairo speaking to egyptian authorities there are negotiationsend going there could again be developments in the next couple hours. they have a plan. so we'll be watching here. bill: let's hope for the

best in the end, certainly. greg palkot, developments when we get them. thanks out of london. martha: back to election politics now and bringsering criticism of the obama campaign coming from the former senior advisor to president bush, karl rove, over the weekend. he blasted the president's team for the latest attacks on governor mitt romney's record at bain capital. listen. >> if the president continues to make this charge, this outrage just charge his campaign had that romney is guilty of felonious activity, committed a felony, that's a big mistake. remember who is up for grabs in this election. independent voters. they were drawn to obama in 2008. he was going to change politics and raise and elevate the political discourse. this is gutter politics of the worst chicago sort. martha: let's bring in rich lowery, editor of "the national review" and lanny davis who served as special counsel during the clinton administration. both are fox news contributors. lanny, what is your reaction

to that. >> i have to laugh at my friend karl rove talking about negative ads and outrage just. i'm just shocked that george bush in 2004 didn't say anything about swift boat ads. outrage just, negative ads. i'm shocked that karl is shocked. marchover, mitt romney use ad clip of barack obama saying that he didn't know anything about the economy. when he got caught that was actually a comment where barack obama was quoting john mccain, do you know what mitt romney said about that ad, what is sauce for the goose is sauce for the gander. so number one, give me a break with this self-righteous outrage about distorted negative ads. romney made it an art form, to destroy who was it, destroy newt gingrich, rick perry with some of the worse, nasty, awful barrage of negative ads i have ever seen. he is not in a great position to complain. martha: we'll see what rich thinks about it. he zeroed in on the issue of stephanie cutter saying there could be a felony that was committed by governor romney if indeed these sec

records were not accurate. >> look, by any standard that is it way out of bounds. i got to think lanny, if you gave him truth serum would admit high official in the president's re-election campaign accusing mitt romney of perhaps committing a felony is totally out of bounds. and just gutter politics the way karl rove said it would, was. if we want to relitigate the swift vote veterans for truth, some of what they said was accurate some of what they said was inaccurate. that was outrage that john kerry denounced war. lanny, this white house needs to distract attention from the debate over the economy. it needs to do everything it can to smear mitt romney even000 "the new york times", "washington post" fact checker, factcheck.org all say this is total nonsense about mitt romney running the company after 1999. martha: you see how much the american people care about this discussion, about when he left bain and when he didn't leave bain and all of that. it does, lanny, feel in some

ways like an effort to distract from what most american people see as reality of their daily lives, whether or not they have a job and whether or not the economy is improving. >> no doubt an effort to distract and no doubt i agree with rich 100% suggesting it is a felony is way over the top. if we stick to the facts mitt romney wasn't running bain capital when he was running the olympics period. innuendo and suggesting felonies is way over the top. so i agree with that. the american people want to hear about the economy and i agreed with karl that they are making a mistake not focusing on independent voters whether they're getting turned off by this food fight. give me a break, rich, about outrage and all the adjectives, the swift boats felt betrayed therefore they could lie about john kerry's disgusting smears in the swift boat ads. i didn't hear karl outraged about that. when i lear you and anybody

on republican sides adjectives about negative ads i say wait a minute. martha: people watch out all of this, they don't care. they see all the mud being shrunk in different directions. >> i aagree. martha: they want somebody that will change what is going on in the country. that is what the conversation they want based on. >> i agree. >> rich, to a certain extent the president's re-election team successfully kept the ball, the focus on this issue seeing mitt romney in this way, as sort of a out of touch businessman who made these decisions. has the romney campaign in your opinion, done a good enough job combating that notion? >> no. i think they have been caught flat-footed and defensive over this. it is really not clear what extent it is working or not. we don't know. i don't think the returns are in in terms of the polls. we may be dealing with silly season stuff. i still think in the fall the campaign will not be about mitt romney's sec filings. it is not. it will be about the future

of the country and what should be about. i think the best rejoinder by mitt romney to all this stuff is to give serious, series of substantive detailed speeches about his vision, for the country because that is what the country is yearning for. martha: gentlemen, thank you very much. >> we agree 100%. i don't want to ruin rich's conservative friends but i couldn't agree with rich more. martha: lanny, thank you. >> thank you. martha: rich lowery, thanks gentlemen. we'll see you soon. bill: 42 minutes now before the hour. the search is on for a great white shark said to be about 15 feet long. a deadly attack off western australia. a 24-year-old man is dead. he was surfing near a place called wedge island. crews are looking for his remains. the beach crews are in dispute whether it is safe to go in the water. >> three more people in the water. you know. surf is finished now, a thing of past anyway. >> just a tragic loss.

it will never stop surfers going in the water. once you are a surfer and only a surfer knows the feeling, we can not stop sure ofing. we are add dicked. bill: the victim is the fifth person killed by a shark in that region in about a year's time. the surfer shall surf. hard to keep them out of the waters. martha: that would work for me. we have new details on the fallout from president obama's health care law. why governors across the country are saying they will not implement a major piece of that legislation. that is coming up. bill: also controversy over old glory. why firefighters say they were forced to stop flying the stars and stripes. why is that? the medicare debate continues in washington...

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their trucks after the city got some complaints about that the firefighters say the flags weren't a safety hazard and they weren't torn. at least a dozen demonstrators came out to protest that plan. >> betrayed by the people we're putting truss in, that we're voting for. >> my goal today they say the flags are going back on the trucks. yes, we have a solution. >> an order from a, from the chief to remove all flags from the apparatus. martha: so a spokeswoman from seminole fire rescue says the city is trying to be sensitive about the proper display of the american flag. stay tuned for more on that one. bill: man, also what will the governors do about health care? including the expansion of medicaid. the governors of iowa and florida telling "fox news sunday" they will not embark on something they can not afford and may possibly not even need. >> i think if you look at it realisticly and look what they awe it to be doing and

quit digging into a deeper hole we've got to reform the entitlement programs. >> we have the same concern. the federal government can't afford it. we can't afford it. this is just another program where the federal government will run out of money and put it on the states again. bill: do they have a point? dr. marc siegel, member of fox news medical a-team and professor at nyu langone medical center. good morning to you, doctor. >> good morning, to you, bill. bill: what do you think of the arguments the governors of iowa and florida. >> i think they're making interesting arguments. consider this. the medicaid expansion will cover people making 133% of the poverty level? the question is, what will it cost the states? if the states decide they won't cover it at a certain point, like we're already worried with physicians. they will pay primary care physicians for two years more but could pull the plug on that in 2013. congress could make it an unfunded mandate. why does a medicaid patient

need exact same service when they make a little more money? 133% of the poverty level, bill, is not the same thing as the poverty level. why not some co-pays? why not some deductibles? bill: first of all you're expanding the pool, right? >> right. bill: which requires more money to cover them, right? >> exactly. not only money from medicaid which is billions of dollars. even the five to 10% states end up pay something in the billions. plus administrative costs of medicaid expansion not covered by the feds. over 10 years in new york state, for example, that is estimated to be a billion dollars. so you're talking billions. the states are going bankrupt. bill: yeah. the other big point you mentioned there in your first answer, is that they have fear, you believe? that if they commit to it that washington will change the rules down the road? >> not just fear. even president obama has come out and said on a couple of occasion, you know, we may cut medicaid funding. imagine the states, expanding medicaid. the citizens get used to it.

and they turn around and say we're sorry, we're used to it and we can't afford it and feds are not paying us. the states traditionally will cut the hospitals. then that other talking point that hospitals are better off with more medicaid patients rather than uninsured may not work out because their bottom line may go down, as hospitals are cut by states who are not receiving money from the feds. bill: i want to show our viewers the states considering either, a, opting out entirely. there are eight on the map on that. there are 11 others that are considering it. a lot of these are republican governors. apparently some democratic governors aren't quite sure what they will do either. the election in november could change all of this. we heard that from governors. waiting to outcome. a guy like scott walker from wisconsin made a reference to that recently. >> bill, two quick points i want to talk about. some of the republican governors are talking about block grants. they may end up doing something in the private sector that might work better. point i want to mention before i want to emphasize

about co-pays and deductibles. some republican governors are saying why aren't we using health savings accounts for people who are poor but might have some money that might get a tax break for paying out-of-pocket? bill, i always believed strongly if a patient pays out-of-pocket they're more aware what they're getting. if they have a co-pay or they have a deductible, even if it is medicaid, they may not use the insurance unnecessarily. bill: that is interesting point. i heard you make that before. two quick questions here. as a doctor, how is this going to change the profession? >> well, i think this is an enormous pressure on doctors and i'm glad you brought that up because up to 50% of physicians right now are not taking new medicaid patients. and many specialties are not involved. even if i see a medicaid patient, i might not be able to find the network of doctors to take care of these patients. so how can you add 16 million more medicaid patients to the covers without considering the doctor shortage and the doctor medicaid shortage? bill: right now, if you're

living in one of these eight or 11 states that i just mentioned, is your health care going to be better or worse if your governor says, hey, i will not expand medicaid? >> bill, you could be caught in a gap the same is true with the exchange. when if your state is not putting in the exchange? you can could be caught in a gap and your state is under federal mandate to get insurance because your state is not expanding medicaid or an exchange. you could be caught wit the tax problem and not have the availability. i have sympathetic with states saying that. florida is saying flat-out, and texas, we're not going to be able to do this. some are waiting until after the election. bill: i think bottom line this is developing and will develop for months if not years. give you the last quick word. >> just as you said the states are waiting. many are saying what conditions are we going to have to do this? make it workable for us and doesn't look like it is for some states.

bill: viewers at home that have questions for you about health care, e-mail address, hemmer@foxnews.com or twitter @billhemmer. need one line, because you asked, bya. we can talk more about this late in the week. mark seeing bell in new york. martha, what is next? martha: big developments in a missouri murder mystery. a break in that case of the two sisters who vanished. bill: also the flap over u.s. olympic uniforms turning into an international incident over the beret, is it not? china is firing back. no now now why is that? >> i'm so upset i think the olympic committee should be ashamed of themselves. i think they should be embarrassed. i think she should take all the uniforms, put them in a big pile and burn them and start all over again. >> should be wearing uniforms made in america. >> you would think they would know better. [ male announcer ] don't miss red lobster's four course seafood feast, st $14.99. start with soup, salad ancheddar bay biscuits then choose one of 7 entrees

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bill: you knew this was coming. fallout from the olympic team's made in china wardrobe malfunction. beijing is firing back, calling all the outrage over the uniforms hypocritical and irresponsible. the state-run news agency sarcastically suggesting all the u.s. lawmakers making a stink about it should be banned from wearing or using any product made in china. martha: wow. bill: now we will have to go through the clothing labels of all of our lawmakers in washington. martha: you think that will do it? bill: no. then if it is made in china we'll have off with that. there is more out there. you will hear it every day. martha: i think they will be altered before the opening night parade. that is my guess. meantime we have some major developments in a very tragic case. this has happened overnight in missouri. police discovering two female bodies in a field near kansas city. they are now working to confirm whether or not they

are indeed the bodies of these two women. britney harru and her sister, ashley key. the two were reported missing on friday after britney's fiance matt, discovered his infant daughters alone together in their crib. >> the girls were gone and matt has some personal guns that have been us missing as well. that is all he had to tell me. i knew something was wrong at that point. martha: also making a key arrest in this state they say. bo dietl, former ynpd detective and fox news contributor. how does all this add up to you so far? >> don't think it is couldn't dense they found two bodies, two people missing, they find two bodies. if you listen from the story very beginning, it was very suspicious the fact it was in the house where these two ladies disappeared. there was blood found on the couch. there was also blood on the bed. the other part about sheets being removed would make you

think they wrapped ladies up in the shoots when they removed them or he removed them or whoever removed them. definitely somebody who knew them and there was a relationship there. i think this thing is developing. there could be more arrests being made. they also found the bodies from someone's information. maybe that's the person who is arrested. maybe it is a relative. maybe it is the ex-husband. i don't know exactly. one thing about this police department, they haven't let out too much information. when they found the truck, they didn't say anything about finding any evidence. this is the way you're supposed to do detective work. what you find there, you shouldn't let the public know. this is very important. whatever you find there only the perpetrator knows what happened there. so should not release pieces of information. martha: yeah. bo, the family says ashley, the younger sister, had been running with a tough crowd. and she was with her sister because she was trying to get help and support and turn her life around. obviously whoever led them to these bodies may have

some more information on that part of the story. >> right. that person possibly had knowledge of it. maybe that person was not the killer of these two young ladies. also the fact that their cell phones were left there. i believe the pocketbooks were there. robbery was not the motive. the motive will be some violence against these two ladies. this thing is developing quite fast. my compliments to the police out there for not releasing some of the most pertinent information that is so important not to release because that person that does the murders is only one that knows. martha: sad outcome if these bodies are identified postively. bo, thank you very much. good to see you. we'll stay on top of it. >> my pleasure. bill: president obama not exactly making friend with business owners, telling them if you are successful you did not do it on your own. brit hume will analyze this. >> somebody invested in roads and bridges. if you have got a business, you didn't build that. somebody else made that happen.

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martha: this will get a lot of attention this morning. president obama slamming american business owners who credit themselves for their own success. the president suggesting that top earners oh the federal government for their accomplishments in the end. brand-new hour of "america's newsroom." i am martha maccallum. bill: i'm bill hemmer. could it be class warfare all over again. president obama had this to say in virginia. >> if you've been successful you didn't get there on your own. you didn't get there on your own. i'm always struck by people who think, well it must be because i was just so smart. there are a lot of smart people out there. it must be because i worked heard than anybody else. let me tell you something, there are a whole bunch of

hard-working people out there. [applause] >> if you were successful somebody along the way gave you some help, somebody invested in roads and bridges. if you've got a business you didn't build that, somebody else made that happen. martha: there it is. there is the line that is jumping out at everybody. if you've got a business, you didn't build that, somebody made that happen. good morning to brit hume fox news senior analyst who joins me now. this is getting a whole lot of eyes popping this morning. >> obviously and for good reason. he was doing fine until he said, you know, if you've got a business you didn't build that. now, look it's not unfair to say that the government, and there by the collective actions and tax payments of us all created a long of things that we need. road and bridges are a good example of that. we need these things, we need law inc enforcement.

we need a common defense within which these individuals can drive. but to tell a business owner who may have start wed a little one-horse operation and turn it into something big that that person didn't build that, that somebody else did that it displays i think the sense of the primacy in the eyes of this president of government as the fount of all that is good. he went out in the private sector and got things and they paid it in taxes. martha: i think this will raise a lot of eyebrows with a lot of small business owners and businesses who feel they have been hit in a number of ways under this administration, not to mention healthcare costs and that. he just brings up this idea once again that the successful people are not the good people out

there. he's saying, you know, they worked hard, but there are a lot of hard-working people out there. there is a suggestion in all of this that those people, that there is a negative connotation with those people who are the successful ones, they think they are better. >> that's krefpblgt that's correct. i think his view is people who consider themselves selfmade in terms of the businesses they created and the wealth they may have earned didn't real i do that, and there are plenty of people that could have done that but for one reason or another they didn't, so therefore they shouldn't be considered special in america and indeed they should pay more in income tax. the fact is that the top wage easterner earners in this count pay a huge share of the taxes, way disproportionate to the size of the income that they receive, but it's not going to be enough for this president who i think has an attitude of almost bordering on contempt for successful businessmen and

women. martha: i think there will be more to talk about with regard to that comment. i also want to get your thoughts on through other political headlines this morning. one of them was made by governor mitt romney this morning on fox & friends when he brought up a new issue for his campaign. let's listen to this and get your thoughts on that as well. >> when billions upon billions of dollars are given by the obama administration to the businesses of campaign contributors, that is a real problem, particularly at a time when the middle class is really suffering in this country. martha: that's the romney campaign. they want to turn the attention to what they see as crony capitalism. what do you think about that. >> we'll see how far they go witness. mitt romney has been under attack from the president for his activities at bain capital but that was private money. and there are people who would say, look, you know, all this stuff about bain capital means that people are more concerned about what mitt romney did with his money than what

what barack obama did with our money. when it's parcelled out to obama campaign contributors that does raise a legitimate question about what everybody calls crony capitalism involved and it could be an issue useful to the romney campaign. we'll see if they back up what he said with ads. we'll see if he continues to push the subject, and then of course, martha, we'll see whether the media are at all interested. martha: one last question for you. this issue of the felony charge, we debated it a little bit in the last hour. i want to give you a chance to weigh in on that. is that different than the other kind of nasty campaign ads we've seen in the past? >> martha, i'm always one to believe that you've got to allow for a certain amount of rough-and-tumble in campaigns and hyperbole. politics, as the saying goes

ain't beanbag. to such that because of security and exchange commission and other government filings that showed romney still as a top executive and owner of bain capital eave was on a leave of absence could amount to a felony is beyond the pail. object surd, untrue and the kind of exaggeration that goes too far. i think it has backfired. we have people from the obama team now saying, they didn't say it was a felony, they were making the point that false filings are a felony and so forth. i don't think we're going to hear too much more of that charge. martha: thank you so much. always good to see you. bill: for his part governor romney responding to calls to release more tax returns. here is governor romney's response a bit earlier today when asked about that on fox & friends. >> the obama people keep on wanting more and more and more, more things to pick through, more things for their opposition research to try to make a mountain out of and to distort

and be dishonest about it. we're going to put out two years of tax returns, put out one already. as soon as the most recent year is complete we'll put that out. it's hundreds of pages of documents. known the way nonnone of the tax returns by law have to be put out. bill: he said the obama team has been dishonest. he says a campaign based on dishonesty does not have long legs. there has been a bombshell development on possible voter fraud. the obama administration agreeing to give the state of florida information from the department of homeland security. eric shawn has details live in new york city. what happened. >> reporter: it took a year and a lawsuit but the florida state of department says the justice department has agreed to allow the sunshine state access to the department of homeland security list of noncitizens who are here legally to identify any who are

potentially on the voting roles to make sure they don't vote. it's against the law for them to cast ballots in our elections. it's a database. critics claim culling through the names can lead to voter suppression. but we were told this morning that's not true. >> i expect to find noncitizens on our voting lists as you have in the past. as you may recall when we talked last time we found over a hundred individuals that were on the voting rules that were being removed. half of those, almost half had voted in previous elections. we are going to begin this process. i'm going to review every single file at the beginning of this process to insure that due process is in place and everyone is treated fairly. >> the details for turning over the list has not been finalized. state officials will not be able to go through the entire list in time for the november elections. bill: how many noncitizens have illegally vote, can they say?

>> reporter: no one really knows the exact number. florida officials say they compiled a list of 180,000 potential noncitizens that they planned to vet. they say the issue of noncitizens blowing is in their view over blown. the number of noncitizens voting they think is insignificant nationally. we have seen voting records of noncitizens who are illegally registered elsewhere and who have even voted in ou our election. if you suspect voter fraud at the polls we want to know about it. voter fraud at fox news.com is our address. martha: the heat and the drought is so bad in america's hard land and across much of the country that it's like the dust bowl years of the 1930s. the states home to corn and soy

bean crops are the hardest hit regions. this is in the top 10 of droug droughts droughts. this drought is not just bad to the farmers but for everybody. dry to the bone soil means there are fewer crops out there and that leads to higher prices when you go to the grocery store. bill: extreme weather causing deadly flooding in the state of arizona killing one man in the concern part of that state. after the vehicle he was traveling in was caught in a rush of water. in tucson rescuers fished out of the raging waters two other people caught in the floods. a driver whose minivan was stuck in a hand bar hidden under the rushing water as you see there from the video from arizona. martha: experts are calling a

freakish severe weather event. we will explain that. bill: there is a desperate search for survivors after a huge and deadly mudslide. see that there? one witness narrowly escaping with his own life. martha: democrats saying that they are ready to go over the fiscal cliff if republicans do not give in on raising taxes. >> again, i'm the newest member of the budget committee, and i can't describe my frustration of not being able to do the real work of that committee, which i wanted to be on, because i think it is one of the most important jobs we can do, and to keep kicking this can down the road i think is completely irresponsible.

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martha: check this out, nature's furry was caught on camera ka of a canadian crew caught a

mudslide barreling down. the tv crew themselves had seconds to get out of harm's way. they had been in the area because they were reporting on an earlier landslide. at least four people, including an entire family in this situation is still unaccounted for in the previous landslide that they were covering. we'll keep you posted on what is going on there. bill: top republicans saying it's an outrageous ult mat ultimatum. they say the democrats will allow the economy to go over the cliff if the republicans don't agree to raising taxes for some. kelly ayotte had this this way. >> his policies, and the failed stimulus, not going back to washington and focusing on

getting this economy moving and the fiscal cliffs, those are the core things that will drive the voters in november. bill: steven moore, senior writer, welcome become to you. define a fiscal cliff. what does that phrase represent? >> on january 1st best than six months from now, all of the 200 2001 and 2003 tax cuts disappear. what we are facing is the biggest tax increase perhaps in american history. packsess on investment, small business and middle income americans would all go up. the big controversy here bill is republicans are saying better get rid of the tax time bomb for everybody. middle class people, low class people. the democrats are saying we are going to get rid of the taxes

for middle class people but the people at the top are going to have to pay more taxes. bill: republicans want to extend everything for a year. and the democrats say not so fast we need the money of the rich to pay down this deficit. the "wall street journal" writes this. the breathe of what will hit the count tries extraordinary. >> two points there. one is this is a hell of a way to run an economy. no matter what side you're on in this dispute here we are five and a half months from the giant tax increase and nobody in america, no business, no investor, no work, no family knows what the tax system is going to be. that's just a very destabilizing thing to do for the economy. they should get this resolved right now. what we were talking about the wall street journal today on our editorial pages, the braeth of this tax inch cries unbelievable. capital gains taxes going up. dividend taxes going up. small business taxes going up,

estate taxes going up. the payroll tax on middle income americans is scheduled to go up as well. bill: it would aeu bee appear there would be no incentive for democrats to settle this if they believe they are winning on the issue. do you think they are or is it too tough to tell? >> i don't think the american people buy into class warfare. i think they say take the tax increase off the table, let's get this deficit down by cutting spending which we haven't done for many years in the city. i don't think this plays to the advantage of democrats, and here is why, bill. remember in 2010 we had this exact same debate, i remember being on the show about this time of the year and we were talk about this. remember? what happened was the democrats said no, we're not going to do it therbgs wante. this is the exact same situation they are facing right now. it's a very dangerous strategy. bill: america is going to get

socked by a triple whammy on out tput, employment and income no matter what happens from now on 2013 will be a very tough year. in five seconds do you agree with that? >> yeah, if this tax time bomb goes off i'm afraid of a double-dip recession. bill: steven moore, thank you from the "wall street journal." we'll talk very soon. martha: it could be a coming legal firestorm heading for the white house. we'll tell you about the major lawsuit that the feds could be facing just weeks from now. bill: also there are hundreds of volunteers in a desperate search for these two young cousins, missing for nearly three days and why police say they have now hit a dead-end. >> we've used all types of resources that we had, yes, and brought in search and rescue dogs and everything and they've found nothing. >> they asked me to go for a short night ride, and they just never came back.

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bill: 22 minutes past the hour now. a new survey says gas prices could start climbing again. as for now it continues a three-month decline, 14% from a recent high of $3.97 in april. remember that? ford recalling more than 10,000suv's. the 2013 escape across america all because the carpet padding can cause drivers' feet to hit the side of the brake pedal when switching from the gas. tacs punctured tires of people in the tour de france. they go 45 miles an hour with not faster on that. martha: yes, a serious offense.

bad idea. new details now in the search for new little girls who disappeared in iowa. the bicycles of 8-year-old elizabeth collins and her te ten-year-old cousin turned up friday near a lake just hours after she's two girls vanished. steve brown is live on this story in chicago. so the lake shu must have been where the search began, right steve. >> reporter: that's right. meyer lake is not the largest lake and there has been extensive searching over the weekend since the disappearance of the girls has been brought to the authorities' attention. it's 26 square acres of water, and much of it is shal shawl low, six feet and less in depth. 80% of the lake had been searched. if the girls were swimming and they were described as pretty good swimmers and something bad had happened they think they

would have recovered the bodies by now. martha: there is no amber alert in this. why is that, steve. >> there has been no clue or sighting of any suspicious vehicle. an amber alert indicates a certain make or model that is seen. authorities are describing the search as grasping for straws, meanwhile the mother of one of the girls is focusing on trying to stay hopeful. >> positive thinking is all we have right now, and our faith that god will bring them -- god will bring them back. >> reporter: almost three days worth of searching has turned up no information, no clues according to authorities. in these particular kinds of cases information is generally shared with the media and the public in hopes of expa tkaoeugt the missing child's return, in this case nothinexpa tkaoeugt

the missing girls returning. nothing has shown up. bill: dozens of prisoners are awaiting trial for murder and peddling dangerous drugs. why are they allowed to walk free? good question. martha: the red cross has called the widening violence in syria a civil war now is their determination, but why is russia blaming the west for this? kt mcfarland joins us on when the real culprit may be. we'll be right back i am from baltimore. south carolina... bloomington, california... austin, texas... we are all here to represent the country we love. this is for everyone back home. it's go time. across america, we're all committed to team usa.

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martha: this alert for you right now. there are reports coming in that there is a new investigation going on into unethical behavior at the treasury department. it may include in some instances soliciting prostitutes. this is all just coming together here. steve centanni joins me. he's been look into this in our bureau in washington. good morning, steve. >> reporter: good morning, martha. treasury department officials, employees i should say have one cited for misbehavior on the job, including soliciting prostitutes on craig's list. this is according to a newspaper and government addict.org, which monsters government responses to freedom of information act requests. the information was sent to the u.s. attorney's office in mark ton d.c. which chose not to prosecute that case. another employee was cited for accepting golf fees and meals.

some of this took place at department of currency which oversees banking institutions. they responded by saying quote the treasury has a strong ethics policy that we expect all of our employees to follow and the overwhelming majority of them do. as with any large organization issues of misconduct occasionally arise. when that happens at treasury we act promise lee and decisively to address them. all this comes in the wake of the embarrassing revelations at the general services administration which staged a lavish and expensive las vegas conference costing taxpayers almost a million dollars and raises new questions about the federal government months before a presidential election. martha: who would have thought. steve, thank you very much. steve centanni joining news washington. bill: the white house might be facing a major lawsuit in just weeks. remember the president's executive order to stop deporting certain illegal immigrants who came to the u.s. as children?

steven camarota is direct he shall of research and studies. this is brought by steve king, republican from iowa. these threatening this lawsuit now. what are his concerns? >> what the president has basically said is if you came here before age 16 and been here a few years ult not be deported and you can get work authorization if you're an adult. what king is saying essentially is that this is unconstitutional because it's a violation of law. we have these laws on the books and the president is essentially saying, look we have lots of laws to enforce, and we are going to pryor ties and anyone who falls into this category and there may be up to 2 million people in this category. these 2 million immigrants we're going to give a pass to them and give them work authorization. king is saying you're basically not doing what you're supposed to do in terms of the constitution. bill: what do you think of the point king is making, legitimate? >> it rao*eul is. it's as if a president were to say, there are a lot of tax cheats out there, starting

tomorrow i'm going to tell the irs not to enforce the capital gains tax. we have a lot of priority and i really think it's a bad tax any way it's consistent with my public policy position and we're going to do it in the name of prioritizing, but i think everybody recognizes that is incredibly problematic. if the president could just pick and choose the laws he wants to enforce then you get a kind of a break down in the constitutional order because he's charged with enforcing the law. bill: can king win this case in. >> very tough. the courts have generally viewed this as kind of a political thing not as a constitutional thing. what they have said is if you could show that the will -- if a law of congress is effectively entirely nullified or an act of congress is being null need by the president then you might have what's called standing, which is then you have the right to sue, and he can sort of argue that. congress has voted down the d.r.e.a.m. act twice in two years, which is essentially what

the president is doing now. bill: you argued that the president can't make a s*erpb category of law for a certain category of people. if a judge heard that case, why won't he win it. >> he might win. the recommend knee is not in the courts, it's in congress. go back and pass another law. deprive the president of funding to implement this. congress does have a recourse here. this isn't for the courts to decide. that's sort of the court's reasoning at least in the past so we'll have to see. bill: one more question, because steve king is going to be on here tomorrow talking about this very issue. what is the question you have for him on this matter? >> well, the question is, can he get his colleagues to try to make the issue clear, that it's not really an immigration issue, it's fundamentally a constitutional issue and maybe to ask why the republican leadership won't defend the constitution, in what seems like a pretty clear-cut case. bill: thank you. we look forward to having steve king with us tomorrow. thank you for your time today. >> sure, thank you.

bill: 25 minutes after the hour. martha. martha: an alarming trend in afghanistan as american forces prepare to leave by the end of 2014. a spike in the number of u.s.-trained afghan soldiers and policemen turning their weapons on american soldiers with deadly results. but the reason why may stun you. our national security correspondent jennifer griffin has been looking into this. jennifer is there any common thread between these incidents? >> reporter: martha in many cases there seems to have been some sort of perceived insult by the afghans. now there's been so much attention to these so-called green on blue incidents we can't rule out that some are copy-cat incidents. take for example private first class jarrod youlay. he was killed in kandahar after individuals in the afghan police uniforms turned their weapons against him in his unit. nine other americans were

wounded when the afghan police turned on their trainers and fired a rocket-propelled grenade at him. and another private first class was killed by soldiers while playing volleyball on base. the afghan soldiers sat on the sidelines watching the game and then opened fire with an m16 fire. then there was a 25-year-old and 19-year-old, one was killed what bullet to the head at the watch tower. two afghan soldiers living on the base began firing from the watchtower, holding the base hostage for 52 minutes. nato issued a simple 71-word statement about the incident. trainers told us that they made some changes for some time they made the afghans walk in front of their trainers so the americans could see them and continue be shot from behind. afghan shoulders were required

to lockup their weapons on base. then there was lieutenant colonel shreul le chilly palmer one of the highest ranking officers to go train afghans. he was killed on may 12th in helmand province while sitting in the mess hall at lunchtime along with another soldier 37. he left behind a wife and four children. this was the third green on blue incident for the marines this year alone. martha: awful stories, jennifer. is there any explanation for the rise in these -- in these kind of attacks? >> well we talked to one marine trainer, he says it often starts as a slight or in sult. whether th or in sult, when word spread that kwoe korans

were burned, that started some of it. >> an afghan soldier can't be insulted or in tim dated. oftentimes the afghan doesn't have the conflict resolution ability defined being in a tribal environment. the smallest thing can fester with an afghan and end up deadly. >> 26 nato members have been killed in the so-called green on blue incidents, killed by afghans they were there to train. half of them were americans. this is a rise from just 11 of those incidents last year, 11 people killed, and four people killed in green on blue incidents in 2007. the treupbsd upward and very worry so many as u.s. and nato forces prepare to pull out in 2014. martha: that is a trend that should not be happening. very, very troubling. jennifer thank you very much. bill: a chilly reception for hillary clinton in egypt. [chanting]

bill: why her motorcade was pelted with tomatoes and what those people were chanting in the background you hear. martha: a deadly tornado caught on camera this is far from where we usually see twisters. really far. we'll be back in a moment. 0

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martha: new dramatic video of a deadly series of freak tornadoes that happened in poland. take a look at this. this footage shows rainbow at the end to the left there, those tornadoes, though, extremely dangerous, killed a 60-year-old man and injured at least ten other people. look at those pictures. twisters also destroyed more than a hundred homes according to this report. we're told tornadoes are very uncommon in this country, but that the weather this summer has been unusually severe, and boy hasn't that been the story in a lot of places in the world. bill: it sure has. how about this rotten reception for the secretary of state hillary clinton. this was in egypt now. have a listen.

[chanting] they were throwing tomatoes and shoes at her motorcade in alexandria on sunday and the tkepl straeurts also chanting, monica, referring of course to monica lewinsky. secretary clinton in israel as part of a dip plea masti diplomatic tour of the middle east. martha: the red cross is designating syria's conflict to be a full-blown civil war in their estimation. violence spilled into the streets over the course of this weekend. watch some of this. [sound of gunfire] martha: that is just video somebody is shooting out their window. this is the life and world they are living in in damascus right

now. it's a boulevard deuprising goina bloody uprising going on for 16 months. kt mcfarland joins us now. you can't imagine what it's like tore people to be living through this for 16 months. how does this designation affect anything. >> it makes aid easier to get to the people. what it does, it has a negative affect too, because it's now let the syrian leadership and bashar al-assad know, it's kill or be killed. there is no way this ends happily. there is no negotiated solution now. why? because he realizes that if he steps down or if he's shoved out of power he's going to go face an international criminal court where he's going to be tried for genocide, for crimes against humanity. he's going to be executed. his incentive has now changed. it's stay and kill, keep killing, keep killing, keep killing or be killed himself.

martha: he has to feel he's pushed into a corner. that's going to make him more dangerous than ever as he lashess out to try to save his own skin. you point out that the discussions that iran and russia are now having with his opposition paint him even deeper into that corner. >> yeah, now, here is what is important to watch. the russians and the iranians have supported bashar al-assad of syria. the russians have blocked the united nations security council condemning sanctions. why? the russians have real interests in syria. they are closely aligned in the middle east. they have a port that they use, it's a port they wanted for 300 years, since peter the great and they sell military equipment to bashar al-assad. they don't want to walk away and lose that connection with sear virginia. syria. the syrian opposition has gone to moscow. they are checking them out seeing if maybe there is an option here. i met a week ago with one of the

ambassadors sitting on the security council and i asked him why does russia continue to support syria. he said, they don't like bashar al-assad therbgbashar assad, they don't care about bashar al-assad. martha: they want the same kind relationship that they've had with syria nor all the strategic points that you have stated. what does that leave in terms of the dynamic that emerges. let's assume for the moment that bashar al-assad gets pushed aside is there an opening no or an opposition that might be more helpful. >> it's a whole lot of different groups. some of them may be islamists, extremists. some of them may be well-meaning democrats who want to establish a democracy. we don't really know, we know some of them but we don't know who emerges at the end of us.

i think that's why it's important to work with the russians, not to shame or scold them but to say you have interests here, you are the only country in a position to get rid of bashar al-assad. you are the only country who can pick who comes next you can have your interests guaranteed. get rid of bashar al-assad and start the civil war and stop the killing. martha: that's the art of diplomacy that needs to be put in place. thank you so much. bill: jon scott scanning by, "happening now" rolls our way in a couple of minutes. how you doing, jon, happy monday johnsto monday. jon: i'm doing well. governor romney is going on the offensive this week after obama attacks on bain capital. time to change the topic? we'll take a look at mr. romney's latest strategy. plus, more on that desperate search underway for two young cousins in iowa, disappeared on

friday when they went to ride their bikes. we'll get the latest. and a new study links some common beauty products to diabetes. are you putting yourself at risk? it's all coming up at the top of the hour on "happening now." bill: see you then. top of the hour here. budget cuts helping to allow dozen of inmates to go free from behind bars. why a local sheriff says that these people -- setting them free is like letting a ticking time bomb back out in the community. we'll explain that. martha: a bear makes a terrifying return to satisfactorthe suburbs. >> you grabbed your dog, the dog was going to go after the bear. >> yes, yes. >> when you tkpwabd the dog the dog scratched you? >> yes because he was going to go after him. >> how scared were you? >> so scared, i was shaking. you know i was really, really scared.

martha: he is a serial offender so well-known in california that he has a name they call him meatball. they tagged that bear back in april. meatball is back and hungry and he has spooked some folks that dialed 911 after he smashed down a backyard gate and trampled a fence and he got tranquilized again. he came back for more of the tranquilizer stuff and they brought him back to the forest. meatball. bill: i think he's going to come back again for a third time. martha: maybe he likes the tranquilizer gun. good nap. bill: so a different kind of presented today for may be on the loose thanks to dangerous and dramatic cuts to u.s. prison budgets. lane county in oregon recently had to free some 92 prisoners all released over three days, and three of them released accused of murder. dan spreurpbg is on this in the

pacific northwest. jails all over the country are releasing low-level offenders, but this is something else entirely. how come? >> reporter: well, bill it's shocking when you look at the list of crimes they were in for. robbery, strangulation. selling drugs to kids and those believe it or not are some of the less serious offenses. three of the men that are freed are charged with measure 11 crimes, among them manslaughter and vehicular homicide. they could not post bail and if convicted will have to serve every day of their sentences. relatives of the victims are obviously outraged. 46-year-old allen platt was beaten to death. they say aaron krur reconfessed to the crimaaron curry was released with an ankle bracelet. >> i'm angry he gets to go out and enjoy his freedom. my brother has none of that. he is gone and there is nothing that can bring him back, nothing. >> reporter: right now lane county is only filling 152 of

its 507-bed jail. bill: some are blaming the federal government for this. why would that be, dan? >> reporter: lane county was forced to cut a hundred million dollars out of its budget this year. a big portion of that came from the sheriff's office budget. they eliminated 64 positions, including 28 deputies. that forced the sheriff to close one whole wing of the jail and cut down patrols 16 hours. if you need a deputy eight hours out of the day you're out of luck. the federal government is blamed because it owns the majority of the land in the county. most of it is national force that employed thousands of people and received tax revenue from timber sales. the sales have been dwindling for years. lane county used to get $50 million in timber payments, this year it got 3 million. >> i think about the employment that would happen if we put the forest back to work, let alone the revenue that would come into

lane county. >> reporter: residents must also take some of the blame. they have voted down a special law enforcement levee, 13 times in a proceed. bill: dan springer in portland out of seattle today. thank you. martha: a stolen sports car finally finds its way home. how an online auction brought this classic baby right to -- back to its rightful owner more than 40 years after it got stolen. summer road trip, huh? uhuh yep uch let's find you a room. at hotels.com, you'll always find the perfect hotel. because we only do hotels. wow. i like that. nice no. laugh... awe uch ooh, yeah hmm nice huh book it! oh boy call me... this summer, we're finding you the perfect place - plus giving you up to $100 at hotels.com

bill: four decades later a man has his favorite car back. this is a 1967 austin heally. it was stolen in 1970. the owner says he never gave up searching for his beloved two-seater which he found being sold online at ebay. so he confirmed the identification number with police. showed it to them.

his car is now back 42 years later! he cruising around, an old car he dreamed about probably. martha: where is that car? looks young enough to enjoy the car still. maybe he was an underage driver when he bought the austin healy. look at that. hopefully his wife and he can ride around together on weekends. bill: as my dad would say, keep it on two wheels. happy birthday to your father. martha: happy birthday to my dad, doug mccallum. happy birthday, dad. we had a great celebration. bill: we have to role everybody. have a terrific day. martha: see you back here tomorrow, bill. "happening now" starts right now. jenna: good to end on a happy birthday. fox news alert. a big headline on the economy. it is not just a one-off. retail sales are down,

simply meaning we all shopped a lot less last month, buying fewer cars and appliances and clothes. this trend we're watching, not just this one report. it is the third straight month of declines. this is first time, the very first time we've seen back-to-back-to-back negative reports since the height of the financial crisis back in 2008. why is shopping so important? i know it is a question jon often has for me. 70% of the economy is consumer spending. we pull back, the economy pulls back as well. we're going to have a closer look on the economy coming up right now on "happening now.". jon: for weeks the president's campaign has been hammering governor romney on his time at bain capital. now mr. romney hits back saying the president uses taxpayer money to help his wealthy donors while the middle class struggles. authorities release documents on dozens of phone calls made by the man accused of killing an unarmed black teenager.

breaking news in the george zimmerman case. plus if you use hairspray, nail polish or certain other cosmetics you need to hear this. jenna: i'm listening. jon: how the things that keep you looking good might contribute to bringing on a very bad medical condition. it's all "happening now.". jenna: we have a lot of great stories for you today but we start with this fox news alert. brand new information, brand new report on the kidnapping of a boston pastor in egypt. we're glad you're with us, everyone. i'm jenna lee. jon: i'm jon scott. the man who claims to have abducted the reverend michel louis, an american women with their church group and a tour guide claims he is talking to intelligence officials about releasing them but it comes with a condition. now there is word a secret plan might be in the works, this as the abductor else tells the ap he has been holding the trio since friday when he took them off a tour bus on a road between mount cairo and