debt and tax. let's play some "hardball." good evening. leading off tonight cliffhanger moment. one by one the plans to avoid a debt crisis are going down. the republican cut, cap and balance bill rejected by the senate today. the mcconnell-reid fall back plan dead for now. so what's left? the obama-boehner bargain that would cut spending at some time

under some mechanism reform tax. the republicans don't like the tax increases and democrats are upset over the depth of the spending cuts. now they're going home for the weekend. just when you thought it couldn't get worse for the murdochs, we learn that james murdoch may have been less than truthful when he told parliament he was not aware of how extensive the phone hack was until recently. now the u.s. justice department is investigating. also to paraphrase bob dylan you don't need a weather man to know it's hot out there. so hot, we're going to ask is overpopulation partly responsible for global warming? and caddy sacked. few people closer than a golfer and his caddy, tiger woods' firing of his caddy of 13 years is beginning to look like an ugly divorce. the caddy has said five words that must terrify tiger and thrill his critics. those words, when i wrote a book. finally, let me finish with

the end of your neighborhood and mine. we start with senator ben harden today. tell us the latest on the deal. >> it's good to be with you. we've got to pass the debt ceiling by august 2nd. really it's the republicans in the house that are holding this up. the president's trying to come together with an agreement. the bottom line is we've got to increase the debt ceiling. we can't jeopardize the credit of america. we need a credible plan, a balanced plan, a comprehensive plan to get the deficit under control, it needs to include revenues. >> it clear to you that the difficulty is on the gop side of the aisle? i ask because he's the president with you this morning at a town hall in maryland explaining the situation and who still needs convincing he says what you've just told us. >> i'm willing to insign a tough plan that would include choice i would not normally make and there are a lot of republicans

and democrats in congress that are willing to do the same thing. the only people we have left to convince are the people in the house of representatives. in 2010 americans chose a divided government, but they didn't choose a dysfunctional government. >> he's make reference to the house which i assume he means the gop leadership in the house. meanwhile speaker boehner was playing politics with the president. he made some comments where we talked about the difficulty being with the president. here he was on the house floor. >> we've done our job. the democrats around washington have done nothing. they can't stop spending the american people's money. they won't and they have received. president obama talks about being the adult many the room. where's his plan to cut spending and to raise the debt limit? listen, we're in the fourth quarter here. we're fighting for jobs. we're fighting for the country's future and we're fighting for the american people. >> so senator, where does the

problem lie? who poses the greater impediment to getting this deal done? >> let's go back and realize how we got here. it was the republicans, the republican administration that used the credit card for two tax cuts. then went to war with two countries. used a credit card again rather than paying the bill. now the credit card's due, the republicans in the house don't want to live up to our obligations. this isn't about more spending this is about paying what we've incurred. we get nit the senate. that's why the democrats and republicans have worked together. we can come one a plan. we do have a plan. we want a comprehensive balanced approach to deal with the deficit. we're not going to be dictated by the republicans in the house who are look more towards a default than solving the problem. >> does the plan include tax increases? >> includes enhanced revenues. >> what does that mean? >> no one's talking about rate increases. we are talking about eliminating a lot of the loopholes, a lot of the shelters, a lot of the tax

expenditures that we believe are not efficient. we are talking about getting more revenue through the tax code by eliminating the deductions. >> would the bush tax cuts expire as planned? >> i certainly hope so as it relates to the higher income people. we do believe at this time when you're asking students to make sacrifices, asking our seniors to make sacrifices that the least we can do is tell the most well off in our community that they shouldn't be getting a continued tax break that was intended to expire. >> senator, your colleague froma mccull ski told "the washington post" quote when we heard reports of megatrillion dollar cuts with no revenues, many of us were volcanic. what's she referring to as far as you knowsome. >> i talked to the president today. the president was clear that revenues need to be part of the final package. look, we know there's going to be spending cuts. we understand that. we're prepared to support a

comprehensive balanced preach to get our debt under control. we need to make sure it is fair. to be fair we need to have the revenues to pay our bills. >> would you agree if there are no revenue taxes it would be seen as a capitulation to the administration by the gop house? >> you have to have more revenue if you're going to have a more credible plan to bring our deficit under control. >> your understanding having been with the chief executive in your state that this is a tlan that's going to include both? >> absolutely. the president couldn't have been more clear if you're going to have a comprehensive plan it must include revenues. it's balanced. it's fair and it invests to create jobs. we've got to invest in education, innovation, infrastructure, the president was clear, the democrats are clear about this. we want to make sure that our recovery stays on track and we create the jobs necessary for our economy that will help our budget. >> senator, thank you for being

here. have a nice weekend. >> thank you. >> joining me now michael steele. can we get into grovergate? >> have at it. >> i'm trying to read the tea leaves. you're going to take me to the answer. tuesday grover norquist said not renewing the bush tax wouldn't violate his anti-tax pledge. here's the audio from that interview. >> not continuing a tax cut is not technically a tax increase. >> so it does not violet the pledge? >> um, we wond hold it that way. it would be a very bad thing to do. it would raise taxes from where they are. would it technically violate the pledge, no? >> he backed away from those comments here on msnbc and today in "the new york times" he tried to clarify things further, he said he remained opposed to any tax increases. then he went on to write my

position and the implications of the pledge is clear if taxes rose automatically then no politicians would have voted for higher taxes and no elected official would have broken his or her pledge that's different than supporting a plan by democrats that would end some or all of these lower tax rates. i still don't get it. explain it to me. >> i think the nuance, the washington nuance is there is the difference between letting the bush tax cuts expire on their own versus having a formal vote that would probably include not just the bush tax cuts plus additional taxes. that'ses a close as i can get to understanding exactly where grover was trying to get back to. i think you know, when you look at the whole thing in total, i think he started off in the right position making the argument if there is no vote, then you have not actually participated in the repeal of the bush tax cuts or more importantly raise taxes from the

current rates to a new rate. so, yeah, you kind of step in it when you get down that road if you're not precisely clear as to what you mean. >> as you well known 236 members of the house have signed this. you have this freshman class with largely there with tea party support. the question is can they go home again if they vote for something that allows the bush tax cuts to expire? are they going to be able to go back and say, well, i don't know, i violated the pledge or i didn't violate the pledge? >> i think that is something that grover's going to have to with atr really get clarified with the members. if a bill is presented that has in it the automatic expiration of the bush tax cut is that considered when you vote for that bill, you know, a vote to increase taxes? by what he said on monday, the answer was, no. by what he said today, the

answer is well, maybe. >> michael steele thank you for your time. >> you got it. coming up, rupert murdoch's son james murdoch may have been less than truthful when he testified tuesday before a parliamentary committee in britain. now the justice department in this country is investigating whether the murdoch empire broke the law. that's ahead. woman: saving for our child's college fund was getting expensive. man: yes it was. so to save some money, we taught our 5 year old how to dunk. woman: scholarship! woman: honey go get him. anncr: there's an easier way to save. get online. go to geico.com. get a quote. 15 minutes could save you 15% or more on car insurance. to your kids' wet skin. new neutrogena® wet skin kids. ordinary sunblock drips and whitens. neutrogena® wet skin cuts through water. forms a broad spectrum barrier for full strength sun protection.

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there have been members of congress in the united states who have asked us to investigate those same allegations and we are progressing in that regard using the appropriate federal law enforcement agencies in the united states. >> welcome back to "hardball." that was attorney general eric holder exactly a week ago admitting the justice department had begun preliminary investigations into the hacking scandal. now it appears the investigation is moving more swiftly. today "the wall street journal" which is owned by news corporation reports the doj is preparing subpoenas to gain more information relating toing hag of voice mail messages here and in britain. across the arthritic james murdoch is accused of misleading pafrlment in his testimony

earlier this week. joining me now michael isikoff and itn correspondent robert moore. michael, why does the department of justice care about a new jersey civil case that was settled in 2009? >> well, you're talking about the floor graphics incident in which is company alleged that news america which is the advertising division of news corp. had hacked sbo its come computer system on repeated occasions to steal information for competitive reasons. now that's come computer hacking. it's not phone hacking. the question is it part of a broader pattern of conduct here. >> on our shores? >> on our shores. if in fact proouch there would be a u.s. jurisdiction hook, which is something prosecutors in the united states would need. now, look, this is still in an early stage. there's a lot of moving pieces to this and there's a lot we don't know.

the central allegation that trigger attorney general holder's directive last week was the claim that 9/11 victims in the united states had their phones hacked. as of now, we have no hard evidence that anything like that took place. we have one report from a rival newspaper in britain based on anonymous sources that this was done. nothing concrete. >> as i read your report on the new jersey case and just a hunch, but to me it said perhaps this is doj trying establish a beachhead in the united states to find out if there were some pervasive practice where this were taking place here? >> exactly. they're trying to find a broader pattern. there's a third piece to this, that's the foreign corrupt practices act. which is something that's been very vigorously prosecuted by

the justice department. the issue there were these bribes paid to scotland yard officers by the news of the world. could that be construed as an illegal foreign payment under the foreign corrupt practices act. >> the way this is unfolding thus far nothing seems like it's beyond the realm of possibility. robert, let me follow up with you on something that michael raised. it's unproouch. it's a single allegation. everybody wants to know whether 9/11 victims were hacked. here's what the spokeswoman for news corp. told "the wall street journal" about the justice department's investigation, we have not seen any evidence to suggest there was any hacking of 9/11 victim phones nor has any corroborated clearly what are very serious allegations. the story arose when an unidentified person speculated to the daily mirror if that happened. that paper printed the anonymous speculation which has mushroomed into the broader media with no saintuation. that's true, but you think about the milly dowler case where the

13-year-old teenager has been murdered and her voice mail is hacked, one wonders if that will be proven. >> that's true. michael is right to say it comes from a rival newspaper there's no substantiatuation at this stage, clearly the core strategy by the murdochs is to contain this scandal to the united kingdom, to britain. if it moves, if it migrates across the atlantic that raises all sorts of questions for news corp. and for its leadership. that's why sst so critical to both rupert and james murdoch to try to contain it to britain. clearly there's multiple investigations. what we have learned in brth tan is no one knows where these investigations lead. >> i've got footage i want to show you both of james murdoch being asked a question about the so-called neville email and murdoch denying he knew of widespread phone hacking at news of the world. questions are being raised as to whether he was forthcoming.

let's watch. >> when you signed off the taylor payment, did you see or made aware of the four neville email, the transcript of the voice mail message? >> no. i was not aware of that at the time. >> why on earth was it -- you paid an astronomical sum and there was no reason to. >> there was -- there was every reason to settle the case given the likelihood of losing the case. >> robert moore, give me the cliff's note version, what's that business all about, the payoff of the futboler? >> this is critical to the integrity of james murdoch. this is a 2008 email. now, you know, it clearly was evidence that there was systemic phone hacking. nothing to do with a rogue reporter. there was systemic phone hacking orchestrated by the newsroom at the news desk of the news or of the world. did james murdoch see that? he says he didn't see that.

there are those close to him who said hang on a second this neville email we showed to james murdoch. i think that is why this weekend in britain it's widely regarded that james murdoch is clinging on to his position by his fingernails. if it's shown that he had seen this email then clearly he did not tell the truth to that parliamentary committee. the ramifications of that politically are very obvious. >> michael isikoff, to what extent do you think the credibility is being damaged here on our shores of those related murdoch entities? >> i think there's been a enormous credibility hit to the murdochs and news corp. there was one of the most powerful and feared companies many the world. and certainly in political circles in the united states it's -- you know, it's harr to underestimate the clout of news corp. fox news channel, murdoch himself, $1 p 250,000 to the republican governors association

which news corp. contributed last year. hundreds of thousands of dollars funneled mostly to leading republicans, but not exclusively. this and in new york state politics. hillary clinton, chuck schumer all of them have cultivated the murdochs and i think that there's a taint now over the company and over murdoch himself that's going to be very hard to erase early on. >> you on the wonder if all of a sudden there's more of a willingness by politicians on both sides it have the pond to stand up to him. robert moore, martin besheer told me a story about how murdoch entertains on an annual business. anyone who is anyone in the parliament they're there and they were all scared to death to ever speak out in opposition of a perceived position of murdoch's, the tide has changed in the last three weeks. >> the political culture in britain has been turned on its head. there were politicians from the conservative party and labour

party who were enthralled with rue merit murdoch. -- rupert murdoch. the political currents are opposite. everybody is attacking him. there's a major change there. the political culture has changed not just for the politicians, but for the police and journalists. >> thank you michael isikoff and robert moore. up next no question it's hot outside, to rush limbaugh it's another plot by the government. stick around for the side show. i

welcome back to "hardball." now for the side show. first up, the weather. let's be clear, the fact that most of country in the grips of a record heat wave is not by itself proof of global warming.

it does get hot in the summer. to be sure we don't get the wrong idea, here comes rush limbaugh to tell us what we think is record heat is no more than a government plot. >> we're playing games with us on this heat wave again. going to be 116 in washington. no it's not. it's going to be 100. maybe 99. the heat index, manufactured by the government to tell you what it feels like when you add the humidity in there 116. when's the last time the heat index was reported as an actual temperature? it hasn't been, but it looks like they're trying to get away with doing that now. >> rush, i've got a question by that logic is the windchill factor a government plot to deny global warming? thank you for that one, but all it takes for me is a walk outside here in new york to question the logic. next up, it's no secret that the country is fed one the fact that there's yet to be a deal reached on the debt ceiling.

two union leaders came up with their own solution. they sent the following email to speaker john boehner, quote, in support of your effort to continue millionaires and corporations outrageous tax cuts at the expense of destroying our nation's social security safety net programs, we're planning to reduce the debt of our nation while protection -- to celebrate the 76 at anniversary of the social security act next month, the afl-cio will host a fundraiser in 14 west virginia bv cities. they plan to donate all the proceeds to the bureau of public debt. there's something to consider. i don't think they should hold their breath waiting for speaker boehner. and for our big number. to go back how far our government's debt goes, believe it or not to 1790 when the government bonds were issued to

pay off the revolutionary war. how much is owed to people many the george washington administration? $55,757. i wonder what the fo that one. that is tonight's big number. that's "hardball" for now. chris will be back on monday. up next "your [ male announcer ] we asked real people if they'd help us with an experiment for febreze fabric refresher. they agreed. [ experimenter 1 ] relax, take some nice deep breaths. [ experimenter 2 ] what do you smell? lilac. clean. there's something that's really fresh. a little bit beach-y. like children's blankets. smells like home. [ experimenter 1 ] okay. take your blindfolds off. ♪ hello? [ male announcer ] and now new and improved febreze fabric refresher with up to two times the odor elimination so you can breathe happy, guaranteed.

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