i'm monica novotny, live in new york. tamron has the day off. the justice department has just announced indictment for the largest data breach in u.s. history. 130 million credit and debit numbers were stolen from three companies. officials are charging a miami man and two russians in the case. it's the largest hacking and identity theft case ever prosecuted by the justice department. and now, david, the big picture. is the white house sending mixed messages? here's what kathleen sebelius said about negotiations in the senate. >> they've been more focused on a co-op, not for profit co-op, as a competitor as opposed to a straight, government-run program. i'm convinced the plan will have both, but that is not the

essential element. >> but the white house says president obama still wants a public option. when the douglas communications director for the health reform office says nothing has changed -- this weekend, president obama said the public option is just a sliver of the plan, but didn't bring up the topic during his speech just a short time ago. >> and since there's been so much misinformation out there about health insurance reform, let me say this. one thing that reform won't change is veterans health care. >> and once again, the president was greeted by protesters in phoenix, arizona today. some with guns strapped to their

legs. police say there is no cause for serious concern. joining us now, politico. >> i think the house secretary, kathleen sebelius, kind of said out loud what folks inside the white house have been saying, that there's a lot of thinking that you can get 80% of what you want out of a health reform bill without having a public option. given that has drawn so much fire from the right especially, who use it to say this is a big government takeover of health care, that why not just leave it out and still get 80%. i think it's a case where a little of the private conversation slipped into the public. >> and we just have to ask, we got that video in and you saw the shot of the gun strapped to the person's leg.

once again, not the first time we've seen this and of course, we know that they can do this legally. >> right. in fact, apparently, that gentleman told some reporters that he did it to show that he still has a right to bear arms in arizona. i suspect the secret service will be paying some attention to him for some time now. >> still unsettling. thanks so much. monica, now, the bigger picture. the fallback position for many democrats is the idea of a co-op instead of a public option. so, what's the difference? a public option is a government-offered insurance plan. it would provide coverage to uninsured americans and compete directly with private insurers, but the fees would likely be lower because the government-run plan would not be for profit. now, a co-op is also non-profit,

but that would be operated regionally and owned by consu consume consumers. it would be in competition, but state by state instead of nationally. the federal government could provide billions for the start-up, then it would be independently run. former governor howard dean says they're too small to reform the health care system. >> public option is really the only way to inject the things the president wants. i think the secretary was wrong when she said it was not essential. you don't have reform without a public option. >> charles grassley made his case for a co-op type of system this morning on msnbc. >> certain for the benefit of the members and total benefit goes to members themselves and when it comes to health care, for those that say, we ought to

have more competition than what we are, it would provide that competition. >> ezra klein writes a blog for "the washington post." this argument between a co-op and public option, explain the key concern for people who support the public option, the concern they have about co-ops and is their concern valid. >> the current insurance is for profit. for the government, the idea is it wouldn't have that problem. it has experience at running insurance. it would have the sort of size to bargain, to effectively create its own networks, to get good prices. of course, insurers are a little bit less enamored with that plan. i really don't think, i'm not, i think the co-op option is recommended, but not an answer to these questions.

when you have senator grassley on, arguing for it, this is not a guy that's been worried about it over the years. it's somebody who opposed the public option and saw this as a viable alternative essentially to kill that, right? so i think an argument how important it is or isn't, it is a way to undermine it, not to restore its integrity. >> and the economics would only work if the co-op has 500,000 people a part of it. that's the kind of size you need in order to be able to essentially have a counter to the insurance companies. these co-ops are too small. >> there's no reason to believe you'd get 500,000. and not that much reason 500,000 would be a viable alternative.

well point has 59% of that market. or 52. i looked it up before i came on. a public plan that could partner with medicare and medicare would have preexisting networks and payment rates to fall back on. when you have two in a ring, you don't want a lightweight in with a heavyweight. >> and without a public option, is it really health care reform? >> i believe it is. i don't agree with governor dean on some of that. if you look back to 2004, he had a good health care plan, but not a good option. at the end of the day, when you're spending $1.2 trillion to bring health care coverage to millions of people, i think it's a step forward even if it's not everything you might want. >> a controversial view there. thank you so much. monica, it does, you get back to what kathleen sebelius said, if

they can lower cost, i think most people won't care whether it's a co-op or public option. >> we're going to hear those buzz words, choice and competition in the coming days. the first hurricane of the atlantic storm season may have its sights set near the east coast. hurricane bill strengthening as it moves west. right now, it's packing maximum sustained winds of 90 miles per hour, but is expected to become a major storm over the next couple of days. and in its path right now, bermuda. meanwhile, claudette has been downgraded. kevin robinson joins us live. first, let's talk about claudette. are you still worried about flooding and major rainfall? >> there's always a concern when you have a landfalling tropical

entity. what we've been experiencing is heavy rain on the florida panhandle. it's oftentimes inland we're more concerned. i think we dodged a significant bullet with claudette because a lot of the moisture has remained offshore. >> and what about bill? because i'm seeing that satellite shot right behind you. it doesn't look good. >> it doesn't. this system certainly a lot more se met ra cal. it's a category 1 hurricane, 90 mile an hour winds now. we're thinking we're going to see some significant strengthening of this system throughout the next 24 to 48 hours. the upper level winds very favorable for development. right now, it's a 90 mile an hour storm, cat 1, we're

expecting could become a major hurricane. >> thanks so much for keeping us up to speed on that. david, hard to believe, but hurricane season is here obviously, and looks like it's going to be a good one. >> it's always frightening when ever you hear the words warm water, which provides fuel for the hurricanes. it's something we're going to be watching in the days ahead. still ahead, looking for a new strategy in afghanistan. a retired top general and former presidential candidate warns it could be a next vietnam. plus, america's third largest city essentially shutting down today to save money. on this hot, summer afternoon, the garbage will not be picked up. and a ufo sighting sparking new buzz about whether the truth is out there.

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they say imports always get the best mileage. well, do they know this malibu offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord? they're stunned. they can't believe it. they need a minute. i had a feeling they would. there's never been more reasons to look at chevy.

welcome back. this is shut down day in chicago with many services shut off. >> most city offices are closed in an effort to save money and help balance the city's budget. about 18,000 workers are being forced to take the day off without pay. they'll also have to take two more days off this year for a total savings of $8.3 million. furloughed workers say the lost pay hurts. >> i don't like it, but we have to do what we can do.

>> we have the pitch in. because we have to contribute. next year might be a little higher, who knows. >> i'm just grateful i got a job though. that's the main thing. at least i have a job. >> peter alexander's live in chicago and peter, is there an opportunity for people who want to park illegally downtown and maybe they don't have to fear for getting a ticket today? >> the one thing, they can still give you a ticket. unfortunately, the ticket maids are still out there. today, the city still trying to make money. they figure this is fwoing to save them about $8.3 billion. there was one man who showed up to try to get something off his car. 911 still will answer if you call. fire and police are not taking a day off, but the mayor, city hall, libraries and public

health clinics are shut down today. chicago has a mounting deficit and that's their primary concern. while there will be three of these reduce service days, already the 2010 budget is out and at this point, there are 12 furlough days next year. to put that in to some context, imagine going the entire year with one fewer paycheck. that's a significant amount of money. >> indeed it is. thank you very much. monica, it's not such a great thing to be a city employee anymore. >> i know, but i do feel like exactly what we heard, at least the good news is that there aren't layoffs. looking ahead to next year, if they lose a paycheck, that is a big deal, but better to lose one than a year's worth or beyond. sounds like a drop in the bucket, but if this can ultimately help, could be the right thing given the time.

>> meanwhile my relatives don't park illegally. >> they need to make money on those tickets. up next, a big city mayor hailed as a hero after saving a grandmother and baby from an assault. police said they stopped rock leng end bob dylan last month because they saw him wandering around in the rain. they asked who he was and he told them. they thought he had escaped from the local hospital, so the 24-year-old officer said, okay, why don't you get in the car and we'll solve this. they went to the hotel and saw the tour buses out front and he gave him back to his tour manager. police say he was very nice about the whole thing. i never thought i would have a heart attack,

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and the boyfriend reportedly said he heard a struggle. the phone was found by a man mowing his lawn. on the "today" show this morning, her mother appealed for her safe return. >> i want to ask them to have mercy on her, to let her go. to come back to us. she has a 15-year-old son that needs his mother, and to let her go. there has been some progress in the battle against 11

wildfires in california. crews say they are getting control of the largest fire. most of the 2,000 residents evacuated last week have been allowed to return home. and tom barrett is in the hospital. listen to what he did. this happened after a man attacked him with a pipe at the wisconsin fair saturday night. the mayor was walking to his car when he heard a woman calling for help. she was a grandmother with a child. the mayor suffered a broken hand and is going to be all right. the woman and 1-year-old weren't hurt. police say it was a domestic dispute. he's being talked about as a possible democratic candidate in 2010 after jim dole announced he's not seeking a third term.

>> huge political boost when you can defend somebody and their grand kid. next, looking for a new way forward in afghanistan. >> richard engel reporting live for us in kabul. and looking for real life, close encounters. i'm robert shapiro. over a million people have discovered how easy it is to use legalzoom for important legal documents. at legalzoom, we'll help you incorporate your business, file a patent, make a will and more. you can complete our online questions in minutes. then we'll prepare your legal documents and deliver them directly to you. so start your business, protect your family, launch your dreams. at legalzoom.com we put the law on your side. but i've still got room for the internet.

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the first complete women's multivitamin in a drink mix. with more calcium and vitamin d... to support bone and breast health... while helping you hydrate. one a day women's 2o. refreshingly healthy. we're seeing sharp losses. the dow down by about 186 points. the s&p 500 is down by 21 points and nasdaq down by 42. the national association of homebuilders rose 1% in august. that is the highest level in

more than a year. a sign that builders think the worst of the housing slump may be over. elsewhere, the fed is extending a program to allow lending at lower rates. the facility will run through the end of march. and poor weather and weak consumer spending cause ed earnings to be down 9%. back to msnbc. welcome back. i'm david schuster live in washington. >> i'm monica novotny, live in new york. that was john trying to get me to the right camera. >> president obama's war strategy, the president spoke to a convention of veterans this

afternoon. >> this strategy acknowledges that military power alone will not win this war. our new strategy has a clear mission and defined goals. to disrupt, dismantle and defeat al-qaeda and its extremist al alli allies. >> president obama said the insurgency did not happen overnight and will not be def t defeated overnight. u.s. combat deaths have risen since the president ordered a troop build-up in afghanistan and polls show support for the war there has softened. after a record 44 troops were killed in afghanistan last month, a poll found that public support for the war has dropped to 41%. >> what's ahead in the war in

afghanistan? another 6,000 u.s. troops are headed there. that will more than double the number of troops in place since the beginning of 2009, but wesley clark warning president obama. he writes quote -- richard engle joins us live from kabul. he points out that much has been accomplished. as the country faces elections, what are the perceptions on the ground? are the changes being felt yet? >> reporter: no. the u.s. troops are just starting to get into position. there are some military offenses

underway, but what we're seeing is american and nato forces trying to step back, trying to be less overt on the ground and allow an afghan political process to take control. we're seeing political debates on television. the streets here in kabul and across the country have been plastered with campaign signs and posters and a lot of afghans are starting to get excited about this poll. there is been apathy over the last several days, but we just returned from a long trip up in the mountains to some small villages getting their first voting material and people said they were excited to vote. you're seeing less of a focus on the military side and more on the political process, which is key. i spoke to a political analyst who i respect his opinion very much, and he said if the united states is burdened with another government like it's had for the last eight years here in

afghanistan, another government that is so drowning in corruption that has been so terribly inefficient, that no matter how many troops you send into this country, the mission will not succeed. >> we saw a headline here today, i'm wondering if you're seeing it, that there may be thousands of women denied the right to vote because they don't have enough women in place working at the polling stations. >> reporter: tonight, we're doing a story on "nightly news" about women and this election. there are several hundred women candidates running. there are also elections for local councils. what we've had, women in this country will be voting separate from men, so you have polling stations that are divided. in one room, you'll have men voting. in another next door, you'll have women casting their ballots

and because of the traditional nature of the society here, men will be in place guarding the men who are voting and women will be guarding the women and there are not nearly as many women officers in uniform in this country as there are men, but the exact number of women voters and how many people show up on voting day is still something subject to a lot of speculation in this country. >> thanks. again, you can watch richard's report on nbc "nightly news" with brian williams. fascinating to see what they might be able to do here. idealy that those women will be allowed to vote. that's something that for a lot of women here on the team, caught our eye, but will be fascinating to watch. >> and interesting that nobody can figure out what they're going to support or what impact it's going to have. it's such a fascinating aspect

to this in a society like afghanistan. >> absolutely. well, it's time for today's close-up. close encounters are making news again. the new movie, "district 9," was top at the box office this weekend. >> and in great britain, the release of over 4,000 pages of documents about ufo sightings revealed 800. "newsweek" features a story about nasa launching a telescope to take a closer look at over 1,000 stars to see if there may be life on any of them. that got us to wondering if the "twilight zone" had it right all along.

>> i hope so. >> this is flight number 914 from earth to our planet. >> to serve man -- >> look! >> sorry about that. we just couldn't resist. dawna friesen is live in london. the british government is looking at these documents and they raise more questions than they can answer? >> in a way, yes. this is the fourth batch of ufo files to be released here. the national archives began releasing them in 2001. they don't think there's any point in keeping it secret anymore. one goes back to the days of winston churchill. there's a handwritten note from him saying, what can it mean, what is the truth.

as a result, the flying saucer working party was set up to try and deliver some answers and found that most sightings could be explained by natural events or aircraft. the ministry of defense says there are many strange things to be seen in the sky. these reports from all over the country, the vast majority did have an explanation. aircraft, lights or satellite in orb orbit. even those people who believe in ufos admit the majority of sightings can be explained, but they admit that the small percent defy explanation. the one thing that's really interesting though, perhaps that surprising, is that every time there's one of those alien

movies released like in 1996 when independence day was released, they were more sightings. i guess there's some correlation there. >> especially -- when you see government documents and you see that government officials actually sketched out the flying saucers, clearly somebody had enough of an impression to be able to dictate to somebody else, here's what it looked like. >> and the people who report the sightings are very passionate about it. they have no doubt they saw something alien. a lot of the stuff had to be explored and investigated and was, and usually, there's a pretty simple explanation for it. what's interesting is the

ministry of defense said while there's no evidence to suggest that intelligent life from outer space have landed on our planet, they do say they're always willing to keep an open mind, so the truth could still be out there. >> dawna friesen in london. it's interesting that while the british government is releasing their files, president obama, who promised to do the same during the campaign, he still has not. so -- >> i'm just going to add that one explanation, a lot of people saw a ufo in the sky and it was just an air ship advertising the launch of a new car. >> that's explainable. >> i know you believe. but i'm not buying it. >> i just want transparency. >> i know. let's take a turn here. later in the show, we're going to be talk about michael vick.

he's ready to play after 18 months served for dog fighting. and a man gets ready to dance with the stars. who knew that tom delay had any moves? when i was seventeen

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here to make their case, ryan grim, senior congressional cory respondent for "the washington post." you've still got people believing that saddam hussein was involved in 9/11. >> it might be -- let's go with uninformed and ignorant people won't be bothered by that. let's call them uninformed. is it a problem that people are uninformed about policy in history?

absolutely. look what happened as he makes the point about the iraq war. we invaded a country that had nothing to do with september 11th partly because the american people were persuaded that iraq did in fact have something to do with 9/11. i can't think of a more obvious problem than that. >> matt lewis, here it is, 2007, a gallup poll found 37% of americans think saddam hussein was involved in 9/11. when you transfer that to health care and you have a certain percentage of americans thinking medicare is a private insurance plan, that makes it more difficult to have an honest debate. >> well, i mean, i must confess to being sympathetic to mahr. i myself questioned the american

public, but at the end of the day, i think i agree with william f. buckly who said i would rather be governed by the first five names in the phonebook. he's saying, yes, i am an eli elitist. >> explain the logic, the first 400 people in the phone book. why do you think that would be better than people who have an advanced degree? >> that's a great question. i would give you two quick answers. number one, look at jimmy carter. he was arguably the most intelligent president in modern times. he was graduate of the naval academy, yet, a disaster as a president. then ronald reagan -- >> george w. bush, who many would argue was the most

uninformed and he did create a mess. took us to war against the country that had nothing to do with 9/11. you can make the argument both ways. >> my point is that when we look at this dangerous idea of entrusting the best and brightest, people that got us into vietnam, i think the american public and anyone who's seen jay leno do one of those man on the street things, the average american may not be up to speed on foreign policy or domestic policy or health care policy, but at the end of the day, i think they ultdly get it right. >> all right, here's my issue in that most americans don't know there are three bramof governme. most can't name a single supreme court justice. it's everybody's right to be as

uninformed and carefree as they want, but it complicates things, i would argue, when you try to have a complex debate in health insurance. >> it's not just the public. it stretches into congress, too. congress is an elite institution in so far it is elevated. but not in terms of its membership. i quoted ben nelson on the senate floor talking about private health insurance and a member of the senate came to him and said because he was an insurance commissioner and worked in the industry back in nebraska, came to him and said, what's private insurance. and nelson said to him, well, that's what you have. do you have blue cross, blue shield? and the senator said yes. well, you currently have private health insurance. there's a very basic level of

ignorance. congress is actually smart, so they know what that word means. there's a lack of information there about health care policy that translates into people not understanding. >> if you follow mahr's point with a logical conclusion, you would have poll tax because the average person might say, you really shouldn't be voting when in fact, he advocates less people voting. he wants it to be harder to vote. which i think is something most liberaling would find appalling. >> people should be more educated. >> we rank worst in terms of industrialized countries and i think the bottom line is that it does cause problems. ryan and matt, thank you both. monica, you know, regardless of whether it's an important political issue or not, it is a

significant development, that americans are far less informed than people in other countries. >> i think it leads to another discussion, about the education system. and also, for their source of information. where are people getting their news? to point the finger in one more direction in that sense because a lot of people may get bad information. >> indeed. >> all right, david. in just a few moments the woman accused of murdering 8-year-old sandra cantu due to appear before a california judge. we'll get an update from the courthouse. you're watching "the big picture" on msnbc. k. my daughter was with me. i took a bayer aspirin out of my purse and chewed it. my doctor said the bayer aspirin saved my life. please talk to your doctor about aspirin and your heart. i'm going to be grandma for a long time.

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we're following developments in a tragic story out of northern california. the kidnapping and murder of 8-year-old sandra cantu. >> monica, a court hearing is about to begin for the former sunday school teacher accused of the killing.

sandra cantu vin initivanished march 27th. her accused killer, melissa huckaby, was sandra's neighbor. huckaby's daughter was sandra's playmate. george lewis is at the courthouse in stockton, california, with the latest on the hearing that is about to begin. >> reporter: just moments from now melissa huckaby is expected to learn whether she has been indicted for the kidnap, rape, and murder of 8-year-old sandra cantu. sources close to huckaby say she is expecting to be indicted, that she will continue to plead not guilty to all the charges. she had been scheduled to appear in court next month, but her court date was moved up to today after a grand jury met, deliberated, heard evidence in secret. now, the prosecutors could have had a preliminary hearing to determine whether there was enough evidence to try melissa

mukby for a huckaby for all these alleged offenses but instead they took these to the grand jury, perhaps out of deference for sandra cantu's family. her killing has had a profound effect on the hometown of tracy. thousands of people turned out for sandra cantu's memorial and continue to visit the mausoleum where she is entombed. she was discovered in a pond a couple of miles north of where she lived hidden -- her body hiddenen side inside a suitcase. melissa huckaby said she owned a similar suitcase but claimed it had been stolen from in front of her home. after hearing that interview, police decided to call huckaby in for questioning and after what they said was probing the inconsistencies in her story placed her under arrest. both huckaby's family and sandra

cantu's family say they plan to be present in court today and if there is a trial, they will be present for that. so we could learn today when and if melissa huckaby will be tried for these alleged offenses. monica and david, back to you. >> nbc's george lewis, thank you for the report. it is almost 4:00 on the east coast, and there is a lot more ahead. in our next hour, the fed called in to investigate a brutal police beating caught on tape. also, much more on president obama and the public option for health care. is the president buckling to critics in the republican party and in his own party. plus jenny sanford speaking out. how the former first lady of south carolina really feels about her husband comparing his obsession with his lover to an obsession with pornography and alcohol. more is just ahead on "the big picture."

they say imports always get the best mileage. well, do they know this malibu offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord? they're stunned. they can't believe it. they need a minute. i had a feeling they would. there's never been more reasons to look at chevy. but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network.

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call or click today. this hour on "the big picture," is the obama administration caving on a key part of health care reform, the public option? >> that is not the essential element. >> white house officials today tried to clarify. house democrats say reform can't get through their chamber without a public option. but a key senator says the votes are not there in his chamber for it. meanwhile, more obama protesters are showing up with pistols strapped to their legs. plus, hurricane season has arrived along the gulf coast. tropical force storms have been battering the florida panhandle. now all eyes are turning to hurricane bill. are the conditions right for another katrina. later, michael vick, a convicted dog killer, has begun practicing nfl football again. fans have been torn apart by his

return. today the starting quarterback for vick's team weighed in. >> you deserve an opportunity to kind of change your life around. >> yes, squirrel videomania has hit the internet. and the other things we thought you should know. who knew the hammer liked to dance. all that and more this hour on msnbc. good afternoon, everybody. good afternoon, monica. good to have you with us this week. i'm david shuster live in washington. >> i'm monica novotny live in new york. tamron has the day off. >> on the issue of health care reform, this has not been a good 36 hours for progressive democrats. in our big picture, the obama white house appears to be backing away from the so-called public option, the idea there should be a government-run health insurance program without profit incentives that can compete against the for-profit insurance industry. most progressives are convinced this is the only way to keep the insurance companies in line and rein in their skyrocketing fees and until this weekend president obama