>> tonight, debt ceiling disarray. with three days to go, nancy cordes tells us republicans and democrats are wrestling to get a deficit deal done. desperate cowboys-- karen brown shows us the toll the texas drought is taking on ranchers and thousands of cattle. as noisy choppers fill the los angeles skies, patty kauffman hears the angry residents down below. and numbers crunchers-- whit johnson takes us inside the one agency that tries to keep a warring congress honest. captioning sponsored by cbs this is the "cbs evening news" with russ mitchell. >> mitchell: good evening. with less than 72 hours to go

observer the federal government potentially runs out of money to pay its bills, there is now word that talks to cut a deal have gone to a new level, this after the senate late last night shot down a republican proposal from the house, and the house today said no to a democratic plan from the senate. congressional correspondent nancy cordes is on capitol hill with the very latest. nancy, good evening. >> reporter: good evening to you, russ. and things have taken a strange turn here this evening. republican leaders insist an agreement is close at hand but democrats say that's a ruse. what we do know for certain is that republican leaders have resumed talks in some form with the white house. >> we are now fully engaged, the speaker and i, with the one person in america out of 307 million people who can sign a bill into law, i'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis in the best interest of the american people. >> reporter: but democratic senate leader harry reid disputed that a short while later. >> not true.

i just spent two hours with the president, vice president, and leader pelosi, and it's fair for me to say that the engagement there is not in any meaningful way. >> those opposed no. >> no! >> reporter: the two sides have been locked in a seemingly eppedless cycle of voting down whatever plan the other party puts forward. >> the people aren't looking at 2 us for what we can stop. they're looking to us for what we can do. >> reporter: the partisan sniping continued today. >> the action that we're about to take here today is going to help with the process of seeing senator mcconnell and senator reid work together. why? because-- >> i'm going to take back my time. mr. guyer, that is pernicious nonsense. >> reporter: "baron's" newspaper dupped it a stupid fight. >> this process has become a joke. it is a disgrace. it's an insult to the american people. >> reporter: and to the troops, some of whom asked the

chairman of the joint chiefs of staff, as he traveled through afghanistan, whether they will still get paid if the u.s. coffers run dry. he told them, "i honestly can't answer that." how can you even allow these soldiers to wonder whether they're going to get paid? >> i think senator mcconnell and i are both cefd that we're going to be able to come to some agreement with the white house and end this impasse. >> reporter: but, again, democratic leaders dispute that, and in fact, when house minority leader nancy pelosi was returning from the white house this evening, we asked her what she thought of mcconnell's aserks that they were close to a deal, and she said to us, "i don't even know what you're talking about. " russ. >> mitchell: let's talk about the tea party. where are the tea party members in all of this. >> reporter: most likely,erous, they're not going to be happy with whatever gets agreed tot last minute by the white house and democratic and republican leaders. that's because they're going to be looking to bring forward a coalition of moderates from both parties who can pass this bill

in the house and senate. the tea party will, of course, be able to claim credit for pushing both side to cut spending in the first place. >> mitchell: here is one measure of how cash-strapped the u.s. treasury is. as of today, the treasury has just $36 billion in cash on hand, well short of the $76 billion exoort maker apple had in the bank at the end of june. a lot of americans are asking if a deal is not made in the next few days, who gets paid and who gets paid first? sharyl attkisson takes a look at the numbers and gives us a grism glimpse of what could happen. >> reporter: without a deal, for every dollar america owes there will only be 60 cent to pay it. that means 40% of the bills wouldn't get paid. by the end of august, the u.s. would be $134 billion short of what it needs, with no way to borrow more. so how would we spend what's there? would we pay granny or g.i. joe? the treasury department isn't talking about contingency plans

but a group called the bipartisan policy center did its own analysis. between tuesday and the end of august, the's the bring in $172.4 billion in taxes and other revenue but will owe more than $306 billion. let's say you use the cash to pay interest on treasury securities, social security, medicaid and medicare, defense vendors and unemployment insurance. you won't have anything left to pay active-duty military, federal salaries and benefits, the departments of education, labor, justice, energy, e.p.a., or anything else. >> choicies then have to be made and it's a sophie's choice, right. who do you save? who do you pay? >> reporter: but experts told us that neither treas nor the white house has the legal authority to make those decisions. the power of the purse belongs to congress alone and it's hard to imagine they'd have an easier time agreeing on what bills to pay than they have on the debt sealing.

>> we're going to pay the bills in the in order which they're due out of available cash flow as it becomes available, and everything can stand in line on an equal basis. social security will stand in line with active-duty military pay and veterans' benefits and everything else. >> reporter: in case you're wondering, powell says, no, the government can't just print more money. that's under the authority of the federal reserve, which has no mandate to finance the operation of government. sharyl attkisson, cbs news, washington. >> mitchell: further clouding the economic outlook is yesterday's report that america's gross domestic product grew by just 1.3% in the second quarter, far short of a strong recovery. for more perspective on all the financial fallouts we are joined by sean eagap, founding principal of eagan joans an independent credit rating firm. thank you for joining us. >> thank you ghich let's talk about the 1.3% in growth number. what's the significance of that? >> normally you like to see a lot stronger growth than 1.3

when you're in a recovery. at the 1.thooe% level you're not generating enough economic activity to generate additional jobjobs which is critical. >> mitchell: you have downgraded the nation's crept rating to double a-plus from triple a. why? >> because the u.s. isn't quite at the pinnacle that it used to be in terms of credit quality. we put on negative watch earlier this year and felt as though we had to take an indication to indicate to our institute investor clients there was some weakening and we did that july 16. >> mitchell: and your firm has had warning signs up since last march? is that true? >> yes, we put the u.s. on negative watch march 1. >> mitchell: what happens if the big guys, standard & poors, follow your lead? >> the normal reaction is there is a slight increase in funding costs. now under any scenario, the u.s. government is very strong, and so you don't have to worry about the overall credit quality, but it's just a slight weakening,

and that is what the market is looking at right now and that's why we took the action. >> mitchell: okay, sean eganef eagen jones we thank you so much for your insight. >> thank you. >> mitchell: here is what else is happening tonight. tropical storm don limped into texas last night, failing to deliver the amount of rain which the drought-stricken area had wanted. searing triple-digit temperatures are predicted for much of texas and oklahoma over the next five days. karen brown tells us what that means for the region's struggling cattle ranchers. >> reporter: the debilitating drought has ranchers dumping cattle in record numbers. at dublin livestock auction, they sold 3800 head in one day, more than double the usual amounts. >> it's my livelihood, and it's being taken away from me because of the drought. >> reporter: doug has been cattle ranching for more than 50 years like thousands of others,

he's having to sell off his herd, no grass to grays on. they're just too expensive to keep. is this the end of your business? >> for quite some time, yes. >> reporter: survival is what has rancher ken dixon dipping into his stockpile of winter hay in july. >> this is backing up now. it could be the worst because it has that combination of drought and then all the wildfires. >> reporter: it's been a record wildfire season, too. in march, a blaze destroyed dixon's prime grazing land. >> we got hit by the ranch burning up over jackson bury and we got hit by the drought here, and then we got, on top of that, we've got the grasshoppers. >> reporter: grasshoppers are everywhere. they're eating what your cows -- >> yeah, they're eating what my cows would be eating, absolutely. >> reporter: in 100-degree temperatures his main stock pond is evaporating six inches a day, and there's a real danger of his

cows getting stuck in the mud. >> it's hard to get them to gain weight in this kind of weather. >> reporter: just one more reason doug decided to sell for 20% less but he's not giving up. >> it's not an easy thing but, hey, pull your britches up by the straps and keep on kicking. >> reporter: this brought is one thing texans wish they didn't do so big. karen brown, cbs news, dublin, texas. >> mitchell: later, los angeles under siege by scwarms of unregulated helicopters. an inside look at washington's most trusted budget score keepers, and the bankruptcy threat that hangs over one american county. those stories when the cbs evening news continues.

>> mitchell: officials in alabama are scrambling to avoid

municipal bankruptcy in jefferson county. the heavily pop hated area that clz birmingham. mia rodriguez has details. >> reporter: jefferson county, alabama, has seen its share of hard times, ground zero for the civil rights movement, a devastating tornado last april, and now a local debt crisis is pushing it towards a historic bankruptcy. jennifer brown is paying the price for her hometown's bills. this single mom is one of 550 county works, or unpaid leave as officials try to convince their lenders to shave $1 billion off the $3 billion they owe. >> it's devastating. you know, i think i cried for two weeks. >> reporter: jefferson county's problems began with a corruption-plagued sewer project that went billions over budget, poor investments, and a loss of millions in tax revenue made things even worse. unless the county can cut a deal with lenders, jefferson county will file for the largest municipal bankruptcy in american

history. officials have tried cutting back everywhere they can, at the overcrowded jail there's just one part-time deputy for every 100 inmates. >> we're below federal regulations. we're always in danger but that put us more in interesting. >> reporter: court clerk anne marie adams is using state fund to pay security guards at the courthouse. >> we would have had to shut the system down and it would have been a major problem. >> reporter: even small things like a sewer leak at a county building building go unattended. >> they laid the people off that do the job. >> reporter: a jefferson county bankruptcy may be the first in a string. detroit, harrisburg, pennsylvania, and pritchard, alabama, are all in danger. municipal bankruptcy pushes up borrowing costs, pushes down property values, drives away business investment, and requires years for a full recovery. then there's the emotional cost for the people who live in places like jefferson county. >> at night, when everybody is

asleep, i do cry. i don't know how i'm going to make ends meet. i don't know if i'm going to have my job back. >> reporter: for now, jennifer brown is depending on city leaders to come up with a plan to keep her hometown solvent as she uses food stamps to put food on her table. mia rodriguez, cbs news, birmingham, alabama. >> mitchell: coming up, a city with a surplus of noisy helicopters. is help them save money. plus we discuss possible side effects and -- help them save money! we help them save money.

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>> mitchell: a u.s. government special inspector said today the security situation in iraq is more dangerous now than a year ago. with increasing bombings and resurgent shiite militias iraq remains a dangerous place to work. they blame the military for glossing over iraq's instabili instability. a flight from new york city crash land in the rain overnight in you go ana, south america. the boeing 737 slid off the runway and broke in half but amazingly none of the 163 people on board was killed and only a few were injured. this was the first serious accident in the four-year history of the trinidad-based airline. los angeles residents have long been tormented by gridlock on the roads but lately it's an ear-splitting traffic jam in the skies that has residents seeing

red. haddie kauffman reports. >> it's like a swarm that never sleeps. >> they start at 5:30 in the morning over my house. and that's really not okay. >> reporter: low-flying helicopters that crisscross the skies of los angeles, hunting for everything from car chases to celebrity train wrecks. between law enforcement choppers, local tv stations-- >> weather-wise, we're looking pretty nice. >> reporter: ...the airborne pop rotsy and tour copters, it's bye-bye a city on edge. >> i imagine this is what it's like to live nay war zone, the constant bombardment of your senses. >> reporter: jessica gottlieb got so rattled she documented the racket in her backyard. >> there's one over there. oh, wait, here. there's two more over there. hi, abc 7. >> reporter: choppers here are not new. how would we have watched the

o.j. chase without them but the noise level hit a crescendo and the royal visit and jon carmichael shutdown triggered a feeding frenzy. esteban jimenez blames most of the noise on hovering news choppers. he tries to keep away from razedential areas but everyone wants to see the hollywood sign, and, yup, there are houses near it, including george abraham's. he tracks the worst oopedders online. in the past three weeks he's counted 40. >> your house vibrates. if you're watching a television show, you miss the dialogue. if you have a mystery and you want to find out if the butler did it you don't know who did it. >> exasperated ang leinos are looking for help from congress. a bill just introduced would force federal authorities to regulate chopper flight paths and set minimum altitudes above residential areas. for now, residents are fighting back with signs and suggestions. george abraham sees a solution in the helicopter used to get osama bin laden.

>> with all the shrouding and special mysterious coverings, well, that was all to supress noise. so it's technologically feasible to do that. >> reporter: until then, the rules say helicopter pilots need only fly safely, not quietly. haddie kauffman, cbs news, los angeles. it was the disirchgly low-key marriage of queen elizabeth's granddaughter, zara phillips other daughter of princess anne and rugby star mike tinnedle. the other newlyweds, william and kate, were among the guests. formal wear was in order at the san francisco zoo. after graduating from the school's fish school, where they learn to swim and eat fish, five penguin chicks went back to their birth place on the penguin island exhibit. just who are the fiscal gurus of the congressional budget office. that story is next.

>> mitchell: let's recap our top story now, senate republican leader mitch mcconnell said late today serious debt ceiling talks are under way, that he is confident a bipartisan deal is close at hand. but senate democratic leader harry reid said it is not true. the two sides are close to a

deal while house members have been advised to stay close at hand if they are needed. senator mcconnell and democratic senator charles shiewmy will be bob schieffer's guest tomorrow on "face the nation." with all the proposals and counter-proposals and conflicting claims flying around washington, it's hard to know who to believe, which is why whit johnson tells us, when it comes to getting the budgetary 411, most d.c. relies on the c.b.o. >> reporter: on capitol hill, it's where you go for numbers. >> your baseline assumes what for military spending? >> are we treating these different aspects differently in our budget analysis? the answer to last part of the question is yes. >> reporter: last year alone, the congressional budget office, or c.b.o., crunched numbers for congress in 14 hearings, 33 reports, and 12 budget reviews. >> it is one of the geekiest agencies in washington. >> reporter: housed on capitol hill in what used to be the f.b.i. fingerprint filing center, the c.b.o. is a

nonpartisan agency with about 250 economists and policy analysts. its job is to look at every piece of legislation proposed on the hill and answer a single question: "how much is this going to cost?" >> they pretty much do this or this on all fiscal policy running through congress. >> reporter: which is why earlier this week, which the c.b.on. told john boehner and harry reid neither of their debt-limit proposals would cut as much as they claimed, nobody argued. both republicans and democrats revised their numbers. >> we have to have an official score keeper. even when you disagree with them, if you don't have an arbiter, you have chaos. >> reporter: cresmed b.o. figures have not always been accepted so willingly. during the health care debate, c.b.o. director took a beating while testifying before congress. >> do you know? could you answer that? >> reporter: but former c.b.o. director, douglas holtz-eakin, says although c.b.o. employees are sometimes a convenient scapegoat for controversy they do not tell

congress what to do. >> they'll happily provide options but they won't say this is the best one and this is the second best one. they'll say, "congress, here you are, enjoy the menu." >> the c.b.o. is working in the weekend, folk in addition the office and about 100 on call to crunch more numbers should lawmakers ask. >> mitchell: and that cbs evening news. later on cbs two editions of "48 hours mystery." thanks for joining us this saturday evening. i'm russ mitchell, cbs news in new york. i'll see you back here tomorrow. good night. captioning sponsored by cbs captioned by media access group at wgbh access.wgbh.org

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