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President Obama: Debt Negotiations 'Far Apart'; Interview With Senator Tom Coburn; 'Strategy Session'; Terror Suspect Linked to Al- Awlaki

Aired July 7, 2011 - 17:00   ET


CANDY CROWLEY, CNN ANCHOR, THE SITUATION ROOM: Happening now: Casey Anthony is less than week away from getting out of jail. This hour, her sentence for lying to police, the financial price she'll pay, and her new look since being found not guilty of murder.

Plus, President Obama says negotiators are still far apart on a deal to raise the debt limit and avoid a possible economic disaster. But he says today's talks are the beginning.

And one of Britain's best-selling tabloid newspapers is shutting down. Rupert Murdoch's media empire now taking drastic action in response to a phone-hacking scandal.

Wolf Blitzer is off. I'm Candy Crowley, and you're in THE SITUATION ROOM.

Casey Anthony's web of lies about the death of her two-year-old daughter will wind up costing her six more days in jail and about $4,600 in fines and court fees. She was sentenced today to four years for lying to police, but with credit for time served and good behavior, the court says Anthony will be freed next Wednesday.

The emotional debate over her acquittal on murder charges is likely to go on a lot longer than that. CNN's David Mattingly is in Orlando-David.

DAVID MATTINGLY, CNN CORRESPONDENT: Candy, Casey Anthony may be getting out of the jail soon, but she may never be free of the scrutiny on her and her acquittal.


MATTINGLY (voice over): Casey Anthony looked surprisingly relaxed, even happy, her hair normally tied up, now hanging down, revealing how long it's grown since she first went to jail over two years ago, but any expectations of her immediate release ended quickly.

JUDGE BELVIN PERRY, ORANGE COUNTY CIRCUIT COURT: I will sentence you to one year in the Orange County jail, imposing a $1,000 fine on each count.

MATTINGLY: With time served and credit for good behavior, Anthony will spend one more week behind bars for lying. A breeze, compared to the death sentence she avoided on charges of murder. Jurors coming forward now reveal an agonizing decision to acquit. Jennifer Ford, juror No. 3, talked to ABC News.

JENNIFER FORD, JUROR, CASEY ANTHONY TRIAL: I mean there were quite a few people when we got back after the verdict was read, we were in tears.

MATTINGLY: Ford said it was a horrible decision to have to make, that not guilty doesn't mean innocent. But ultimately, she said, it was the prosecution's lack of evidence that led to the jury acquitting Casey Anthony.

FORD: If you're going to charge someone with murder don't you have to know how they killed someone, or why they might have killed someone, or have something, where, when, why, how? Those were important questions that were not answered.

MATTINGLY: Speaking anonymously to the "St. Petersburg Times", juror No. 2 agrees, " I just swear to God, I wish we had more evidence to put her away, I truly do. But it wasn't there."

But prosecutor Jeff Ashton, on "AMERICAN MORNING" said he stands by the state's decision to pursue murder charges.

JEFF ASHTON, CRIMINAL PROSECUTOR: You don't prosecute cases you don't believe in. We started this case because we believed in what we thought she did. Though we respect the jury's verdict, it was their decision to make, it doesn't change how we feel about the facts and what they meant.

MATTINGLY: Jose Baez, lead defense attorney, told ABC News the prosecution's mistake was pursuing the death penalty. He also said he's afraid for Anthony's safety once she's free.

JOSE BAEZ, CASEY ANTHONY'S DEFENSE ATTORNEY: I think Casey could have been anything she wanted in this world, and I think there are still plenty of things Casey can do in life, and I think Casey can be a productive member of society.


MATTINGLY: When Casey Anthony leaves jail, there will be some special precautions taken. Officials here say they will not reveal where, when or how she will depart their custody, Candy.

CROWLEY: David Mattingly in Orlando, and in the rain for us today. Thank you.

Most people convicted of misdemeanors don't get prison time, but Casey Anthony isn't most people. I spoke a short while ago with our Senior Legal Analyst Jeffrey Toobin.


CROWLEY: Jeff, thanks for joining us on this. Casey Anthony will get out of jail next week and go free after her not guilty verdict. Can you explain to us how the judge came to, all right, she has to spend another week in jail?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: What happened was she was acquitted of the serious charges, but she was convicted of four misdemeanors, which were involving lying to the police. The judge gave her the maximum, but misdemeanors only come with a maximum of one year each. So he sentenced her to four years in prison, four one-year misdemeanors, to be served consecutively, but she's already been in prison for almost three years. And Florida, like most states, gives prisoners credit if they behave well in prison, as Casey Anthony apparently did. With those credits, she essentially has already served the equivalent of four years, so by next year she will have completed her sentence with the time she served.

CROWLEY: By next week?

TOOBIN: I'm sorry, by next week, yes.

CROWLEY: So he didn't really have any discretion, this was a mathematical equation?

TOOBIN: He certainly had discretion to give her less, but he gave her the max that he possibly could, but once he did give the max, those calculations about time served, good time, that's outside of his control. He couldn't sentence her to longer than next week.

CROWLEY: So there was some sort of talk earlier in the day this was his way of trying to protect her. That maybe the hue and cry will die down by then, but you think this was his way of giving her the max he possibly could give her?

TOOBIN: Absolutely. I thought it was very moving the way the judge summarize the false statement that Casey Anthony made, which were so appalling. Imagine. Most people are frantic when they lose sight of their kid in the mall for a minute. Casey Anthony went month after month, deceiving the authorities about the fate of her daughter, and the judge went through that. You could tell in his low-key way how appalled he was. So he did everything he could, but this is what happens when the defense wins a case. Misdemeanors are minor crimes. So he didn't have any more discretion than he exercised to give her any more than he could.

CROWLEY: So what happened next Wednesday? Casey Anthony wakes up in jail, it's her day to be set free. What happens?

TOOBIN: Well, there will undoubtedly be arrangements made between the authorities in Florida, and her lawyers, to try to make it as un-circus-like as possible. Presumably her lawyers will have arranged some sort of hotel room, some sort of friend's place, so that she can go somewhere where she will at least be protected from the surge of attention.

I mean, the ways of the media being the way they are, there would be a huge surge when she gets released. It will die down after a couple days, I think then she'll have to start figuring out what she's going to do with the rest of her life, which I hope involves no contact with children, and somewhere outside the state of Florida, because Florida, you know, is too fixated on the case.

CROWLEY: Quickly, if I could, Jeffrey, the state wants Casey Anthony to pay for the police investigation that resulted in her saying her daughter was missing. Even though we now know that she knew that her daughter was dead. Is that actually going to happen?

TOOBIN: Well, you know, these civil cases are different from criminal cases. Criminal cases really have to be resolved. The civil cases kick around the courts for a long time. At the moment Casey Anthony doesn't have any money at all. There's an IRS audit against her. A judgment against her, the IRS is always first in line for money. So, frankly, I don't think anything will come of the civil lawsuits except the one from Uncle Sam, because Uncle Sam always gets his money.

CROWLEY: That much we know for sure. Jeffrey Toobin, thank you for your time. I appreciate it.

TOOBIN: OK, Candy.

CROWLEY: Now the demise of one of the most widely read English language newspapers on the planet, Britain's "News Of The World" will shut down after Sunday's issue. The tabloid tainted by allegations that reporters hacked the phones of several thousand politicians, celebrities, and even murder victims. CNN's Dan Rivers joins us from London.

Dan, this was amazing the speed in which this-they just made this decision, shut it down.

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT: It was a complete bolt from the blue, Candy. The police think there may be up to 4,000 potential victims in this phone hacking scandal that have had their messages eavesdropped upon by tabloid journalists.

It is without doubt the biggest scandal to have hit ever hit the British press. Media mogul Rupert Murdoch has closed down that paper, but this phone-hacking scandal is not over yet.


RIVERS (voice over): It didn't take long for staff from "News Of The World" to end up in the local pub. In Britain losing your job normally results in drinking a pint, and these now unemployed journalists had a lot to reflect on.

JULES STENSON, FEATURES EDITOR, "NEWS OF THE WORLD": It was completely unexpected, and there was collective devastation right across the newsroom.

RIVERS: The 168-year-old tabloid is a British institution, but the phone hacking scandal had left it in a political vortex, from which it couldn't escape. Its owner, media mogul Rupert Murdoch realized his entire empire was at risk of being tainted. One can only imagine the conversation he had with his son James who runs the U.K. business.

JAMES MURDOCH, CHAIRMAN, NEWS INTERNATIONAL: I feel regret. Clearly the practices of certain individuals did not live up to the standards and quality of journalism that we believe in, and that I believe in.

RIVERS: It was the revelation that murdered school girl, Millie Dowler had been targeted by journalists from the paper, who eavesdropped on her cell phone messages that was the beginning of the end for the paper.

Hacking into cell phone messages is illegal in the U.K. The scandal that the "News Of The World" had been systematically eavesdropping on people for years had been swirling around Westminster, with Murdoch's executives initially telling politicians phone hacking was the work of a rogue report.

LES HINTON, NEWS CORP.: I believe he was the only person, but that investigation under the new editor continues.

RIVERS: There was a lingering suspicion that former editors like Rebekah Brooks, who remains chief executive of the parent company, must have sanctioned the hacking. Something she always denied. She's a close friend with Prime Minister David Cameron, an awkward fact, but that didn't stop him saying this.

DAVID CAMERON, PRIME MINISTER OF BRITAIN: What this government is doing is making sure that the fact the public, and I feel so appalled by what has happened, murder victims, terrorist victims, who have had their phones hacked is quite disgraceful.

RIVERS: But one thing that went spectacularly wrong for the prime minister was the decision to hire this man as communications guru. Andy Coulson is a former "News Of The World" editor, who has lost his job at No. 10 and who may now be facing criminal charges.

For Rupert Murdoch, the dramatic decision to close the "News Of The World" doesn't mean the scandal is over. There is still a police investigation to be faced. But on Sunday, one thing will end. The "News Of The World" printing presses will stop for the very last time. Dan Rivers, CNN, London.


RIVERS: There is a lot of speculation about what will happens with Rebekah Brooks, the chief executive of the parent company, News International. One headline here put it very well Murdoch sacrifices and entire paper to save one woman.

CROWLEY: Wow. "News Of The World" may be shutting down, but it is still going to make some headlines, I think, in the weeks ahead. Thanks so much, Dan.

Some frank talk at the White House about the federal debt. But will fellow Democrats get in the way of the president's efforts to cut a deal?

And one of America's most wanted Al Qaeda leaders linked to a new and controversial terror suspect.


CROWLEY: Jack Cafferty is here with "The Cafferty File."

Happy Thursday, Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Thank you, Candy; you, too.

In 2008, President Obama promised us over and over again to get all U.S. troops out of the Iraq by the end of this year. After winning the presidency, he vowed to keep that promise. Well, now as the deadline for military withdrawal from Iraq approaches, he is apparently prepared to break that promise.

Gee, what a surprise.

The president announced this week he's offering now to leave 10,000 U.S. troops in Iraq indefinitely, beyond the scheduled December withdrawal date. The White House says it's concerned that the planned pullout of nearly all U.S. troops at the end of the year could spark violence and trigger militant attacks there.

Oh, and don't forget all that oil.

Any extension of U.S. military presence depends on a formal request from the Iraqi government, and so far, no request has been made. But the Pentagon wants to give Prime Minister Prime Minister Nouri al-Maliki and his government time to decide, so if they need the help, there's time to plan.

The Iraqi government is reportedly divided on this, over whether the U.S. should leave additional troops behind, and al-Maliki is facing pressure from hard-line members of his own party to let the U.S. troops leave on schedule.

There are about 46,000 troops in Iraq right now. Only about 200 are supposed to remain in country in advisory roles after the December deadline; they'll be there to train security forces. The White House said yesterday that's still the Pentagon's plan, and that time for the Iraqi government to ask for our troops to stay is running out.

What'll you bet they ask?

Meanwhile, there are discussions in this country about the cutting Social Security, cutting Medicare to deal with a ballooning national debt and deficit caused at least in part by the war in Iraq, which has so far cost American taxpayers an estimated $1 trillion.

Makes a lot of sense.

Here's the question: Should the U.S. Leave troops in Iraq past the deadline for leaving that country? Go to and post a comment on my blog -- Candy.

CROWLEY: Thanks, Jack. We will get back to you with those answers. Thank you.

The president and congressional leaders will return to the bargaining table Sunday as they struggle to reach a deal about raising the federal debt limit. Mr. Obama says today's talks with the Republicans and Democrats were, quote, "very constructive," but it apparently didn't get the two sides any closer to an agreement in hopes of preventing the U.S. from defaulting next month.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to emphasize that nothing is agreed to until everything is agreed to, and the parties are still far apart on a wide range of issues.

But again, I thought all the leaders here came in a spirit of compromise and a spirit of wanting to solve problems on behalf of the American people.


CROWLEY: Let's bring in our congressional correspondent Kate Bolduan.

Kate, we know -- we don't know what they'll agree to, but we certainly are hearing a lot about what they won't agree to.


President Obama today said that he's looking forward to knowing everybody's bottom lines as they go into this next meeting. Well the size and scope of a potential $4 trillion deal that's kind of coming -- emerging has already revealed some pretty serious bottom lines over here, perhaps especially among his own Democrats.


BOLDUAN (voice-over): As congressional leaders try to broker a debt deal at the White House, reaction on Capitol Hill shows just how tough it will be to get a three to $4 trillion agreement through Congress.

The top Democrat in the House, Nancy Pelosi, said any cuts to entitlement benefits are a no-go.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I also want to have full clarity about where House Democrats stand. We do not support cuts in benefits for Social Security and Medicare.

BOLDUAN: While Pelosi did does leave the door open to changes in Social Security and Medicare, rank and file Democrats were unyielding, calling on President Obama to leave entitlements alone.

REP. SHEILA JACKSON LEE (D), TEXAS: Now we are hearing that the most vulnerable will have to be the brunt, potentially, of a deal. And I join with my colleagues in the progressive caucus to say that Medicare, Medicaid and Social Security are off of the table.

BOLDUAN: The top Democrat in the Senate, Harry Reid, has long said changes to Social Security should not be part of a deal.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Social Security has not contributed one dime to the deficit.

QUESTION: So it's off the table?

REID: Yes.

BOLDUAN: Setting up a potential awkward moment in Thursday's meeting after it was revealed a deal could include significant changes to the program.

On the other side of the political aisle, House Speaker John Boehner laid down the Republican bottom line on taxes.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Everything is on the table, except raising taxes on American -- the American people.

BOLDUAN: Still, negotiators, including Boehner, are talking about raising potentially $1 trillion in revenue, in part by closing tax loopholes and getting rid of some tax breaks.

BOEHNER: We believe that comprehensive tax reform both on the corporate side and personal side, would make America more competitive, help create jobs in our country, and it's something that's under discussion.


BOLDUAN: Now, the discussion continues. It's worth noting that the president is scheduled to sit down with Nancy Pelosi with a private meeting tomorrow. This was a previously scheduled meetings, but it takes on particularly new significant amid these negotiations. In terms of the next meeting of the larger group Sunday, I'm told by multiple people familiar with the meeting they're expecting that gathering to be a long one as they start talking details.

CROWLEY: I bet it will. Thanks so much, Kate Bolduan.

That oil spill in the Yellowstone River might be worse than first thought.

And a Dutch soccer team is now mourning a tragic event at its home stadium.


CROWLEY: Mary Snow is monitoring some of the other top stories in THE SITUATION ROOM right now, including growing fears in Montana over an oil spill.

Mary, what have you got?


Well, ExxonMobil is facing more criticism over its handling of an oil spill into Montana's Yellowstone River. "Reuters" reports that 40 land owners claimed their properties have been contaminated by crude oil from a ruptured pipeline. Exxon says it has found oil 25 miles downstream, but the feds say they've observed crude at a distance almost 10 times that far.

A roof collapse at a Dutch soccer stadium has left one person dead and 14 injured. Team officials are now pleading with fans to stay away from the wreckage while police search for survivors. The injured are said to be construction workers who were expanding the stadium seating. The club has been growing in popularity after winning the top Dutch league last year.

Dominique Strauss-Kahn is sticking to his guns and won't plead guilty to anything, his lawyer tells CNN. The former International Monetary Fund chief and his defense team met with prosecutors for two hours yesterday. It's not known whether a plea deal was offered.

The Manhattan district attorney says there are problems with the accuser's credibility. This could leave him with no choice but to dismiss the charges.

And you can add cursive writing to the list of things being cut from public school curriculums. Indiana is now the latest state to drop the requirement to teach cursive. The state prefers that schools focus instead on improving students' proficiency with keyboards.

And one criticism of the move -- how will students learn to sign their names if they never learn the letters. It's hard to imagine, Candy, not learning cursive writing at school.

CROWLEY: It is, but there's always home.

SNOW: Exactly.

CROWLEY: And I think this is wild. But you do have, you know, a parent or two at home at any case. Maybe a grandparent with some time to teach cursive. Thanks so much, Mary.

There is new evidence that al Qaeda leaders have their fingerprints on acts of terror in some of the most dangerous hot spots in the world.

And why Republican presidential candidate Mitt Romney is in London? And then the bigger question: do voters care?


CROWLEY: Wolf Blitzer is off today. I'm Canada Crowley.

Stories we're working on for next hour:

Did North Korea's lust for nuclear weapons lead it to Pakistan? A secret letter that might hold some clues is in the hands of a Washington reporter.

A court hearing this hour for Jared Loughner. His doctors argue the accused killer is dangerous even behind bars.

And in Britain, the popular tabloid "News of the World" is done after this Sunday. But the phone-hacking investigation is not over, and journalists aren't the only target of investigators.



CROWLEY: A lot of hard bargaining ahead as the president and congressional leaders try to hammer out a deal on raising the federal debt limit. As the August 2nd deadline looms, both parties are firming up their bottom lines.


CROWLEY: Joining me now, Senator Tom Coburn from Oklahoma.

Senator, I know that you have, today, spoken with Speaker Boehner about the Republican position, or at least his position, going into these debt talks. What can you tell me about where you are now when it comes to the revenue side of this equation?

SEN. TOM COBURN (R), OKLAHOMA: Well, I think Speaker Boehner related that we're -- everything's on the table, and I think it should be. I think that's the only way we solve this problem for our country. And so, I think it'll be a component of anything that we do. But there are some caveats with that, Candy, is reforming the tax code is one of the things we need to do to create jobs to allow the pent-up capital that's sitting on the sideline to go.

So I think the combination of reforming the tax code and stimulating the economy and the revenues enhancements that will come to the federal government form that, as a direct result, but also as an indirect result, is something that should be part of any agreement.

CROWLEY: OK, so if I understand it, you all -- the code for this -- that is code for you all are amenable, at least some Republicans are amenable, to closing the so-called tax loopholes for corporations or millionaires or whoever, if there is a reform in the tax code.

Can you -- first of all, is that correct? And second of all, is that something you can get done between now and August 2nd?

COBURN: No, but you could certainly put a provision that you'd have a clawback in any debt limit if it didn't get done. So I think --

CROWLEY: Explain that to me just a little. COBURN: Well, what you say is you have a tentative debt limit agreement that gets canceled if this doesn't happen by a certain time. But I'd be careful in terms of reaching too far.

You know, just like cutting back spending too quickly can have a negative influence in terms of stimulus in the economy, so can raising taxes. So the big thing is, is how do we do this in a way that actually stimulates the economy and enhances the revenues to the government? And that will take some time to work out. But you can put steps in any agreement that would make that time happen by a time certain, otherwise the debt limit gets held up again.

So I don't think implementing that will be as difficult in terms of agreement on that as the actual implementation and meeting the deadline at a later time.

CROWLEY: And so, as I understand what you're saying, yes, you and other Republicans might agree to closing some of those loopholes if it were part of tax reform, the process for which you would write into a debt ceiling deal.

COBURN: Right, but remember what tax reform means. It means not only eliminating tax expenditures, but also lowering the rates markedly --


COBURN: -- both in terms of corporate rates and individual rates.

CROWLEY: OK. And let me ask you, because now, as we understand it, the president also wants to put Social Security reform and Medicare reform, something you've been involved in, on the table.

If you were to ask Medicare recipients, for instance, to pay more for their co-pays, is that a tax hike to you?

COBURN: No, it's not. When the law was passed, they were supposed to be paying 50 percent of Part B, and we --

CROWLEY: Prescription drug plan, Part D.

COBURN: No, Part B. Part B, not Part D. Part B, which is your outpatient.

You know, they're paying one quarter of it. And so having some implementation, especially like Senator Lieberman and I have sponsored, is bringing them to 35 percent, but for the wealthy in this country, making them pay 100 percent. In other words, mean-testing Medicare, but still protecting those that are on the low end.

CROWLEY: And does the same then go for Social Security? Some kind of means testing is not to you a tax hike?

COBURN: No. But I think it's important to note the reason you have to fix Social Security is because we're going to have to borrow $2.6 trillion to fund it. So what you can do is put means-testing into Social Security and slowly increase its age. Not anybody now, in the next 10 years, would have any true impact on them, but do that in such a way where you can make it viable for 75 years.

CROWLEY: Can Speaker Boehner and Minority Leader McConnell please the Tea Party side of the Republican Party as well as get a deal? Is that possible?

COBURN: Sure, because not getting an agreement, regardless of what your principles are, hurts everybody in America, including the Tea Party. And so, it is important that we, number one, send a signal to the international financial community that we have understood our problem, that we're going to get a large change in terms of what's going to be on the table in terms of total dollars, $4 trillion to $4.5 trillion dollars -- and that, by the way, is the minimum to send a signal to the international financial community.

But if in fact you don't do that, and you don't pass a debt extension with that, then everybody in this country loses, plus the economy loses. So it's not just about borrowing more money. There's no question we could do all of this without enhanced revenues. We could do that, but changing the tax code actually causes the economy can grow.

So we can do both, and we can satisfy the demands of the diverse group of people that are in the "Tea Party" by solving the problem and also making large strides so we're towards downsizing the federal government.

CROWLEY: So, as I understand your message today, you do believe that some overall -- a deal that would result in an increase in the debt ceiling could include some revenue enhancements or tax hikes, depending on how you want to parse those words, as long as it was accompanied by a deal to later fix tax rates and an overall tax reform. Is that correct? Is that where you are?

COBURN: Well, I would -- not quite. What I would say is an agreement could be had that at a certain within the future, that the tax rates would be lowered but a large number of tax expenditures would be eliminated. And what we saw -- we actually have some good history from the middle '80s, when Speaker O'Neill and President Reagan did this. We actually saw four years of greater than -- on average, 4.9 percent economic growth.

And that's what we need right now. We need the economic growth to put people back to work.

CROWLEY: Senator Coburn, if I can get you to answer this in one sentence or less.

The chances that we're going to get a deal before August 2nd are?

COBURN: I don't know. I really don't know.

CROWLEY: OK. That's fair.

Thank you so much for joining us, Senator Coburn.

COBURN: You're welcome, Candy.

CROWLEY: I appreciate it.

COBURN: Bye-bye.


CROWLEY: The only woman in the Republican presidential race is advertising in Iowa. Michele Bachmann hopes that will pay off very soon.

And one of Casey Anthony's defense attorneys admits he was surprised his client was found not guilty of murder.


CROWLEY: Republican presidential candidate Michele Bachmann's primary strategy can be summed up in two words: win Iowa. To do that, she has just released a new ad to try to win over conservative voters. Will it work?

Joining us from our "Strategy Session," Donna Brazile is a CNN contributor and a Democratic strategist. And Rich Galen is a Republican strategist and the publisher of, one of my must reads.


CROWLEY: So let me move first to this ad and just show our viewers a little bit of what we're talking about.


REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: As a descendant of generations of Iowans, I was born and raised in Waterloo. As a mom of five, a foster parent, and a former tax lawyer, and now a small business job creator, I know that we can't keep spending money that we don't have. That's why I fought against the wasteful bailout, against the stimulus. I will not vote to increase the debt ceiling.

I'm Michele Bachmann, and I approved this message.


CROWLEY: You ran a campaign in Iowa. Is that going to work?

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Well, look, she's trying to introduce herself to the voters who might not know her outside of her home county. But on the other hand, I think her statement about refusing to raise the debt limit, that's irresponsible.

Look, she said we shouldn't raise it because it's money we didn't have to spend. Well, you know what? We spent the money, we owe. And this will endanger our economy at a time when it's very fragile. It will cause perhaps 500,000 people to lose their jobs.

This is ridiculous. We should raise the debt limit and stop playing these games.

GALEN: Well, I don't know how you all know that, because you're no more an economist than I am, but I'll take your word for it. But here's the thing about that kind of an ad that -- we've all see these ads. It is an introductory ad, although --

CROWLEY: Sort of the soft cause (ph), "Hi, here's who I am."

GALEN: Yes. And it's --

CROWLEY: But isn't the debt ceiling kind of a winning -- I mean, to me --

GALEN: For her it is.

CROWLEY: Right, for who she's trying to appeal to.

GALEN: I mean, this is her message, and she's going to stick with it as long as it's playing. And as of right now, I think she probably is leading in Iowa. And until and unless Rick Perry gets in, my guess is she will win Iowa.

BRAZILE: She's a strong candidate in the type of caucuses that you'll see in Iowa, but I don't think she has a winning message for the general election. You want to know where I got my facts from? Well, the U.S. Chamber of Commerce.

GALEN: Well, probably from the White House.

BRAZILE: No, no, it's the U.S. Chamber of Commerce. This is Martin Regala, the chief economist for the U.S. Chamber of Commerce.

Look, there are people on both sides of the political divide now lobbying lawmakers to raise the debt ceiling. They understand what's at stake.

GALEN: Oh, they're going to get it. Stop. They're going to get it.

BRAZILE: Really? Really.


BRAZILE: Can you convince me of that so I can go home and have myself a summer Kool-Aid?

GALEN: You're not having Kool-Aid because you're on a diet, so stop.

BRAZILE: No, I'm not on a diet.


CROWLEY: Looking great.

BRAZILE: Well, I'm trying.

CROWLEY: Let me move you to Mitt Romney, just because he went over to London to do some fund-raising -- among Americans, we should add. He met with Prime Minister Cameron.

I'm always kind of amazed, because candidate Obama did this as well. We went overseas with him, went to Israel, went to France. And it's interesting to me, because they're always sold as, this is to kind of buff up their foreign policy credentials. And I always think, really? Because is anyone sitting out there going Mitt Romney's in London, now I think that --

GALEN: That was the last piece of that puzzle.

CROWLEY: Right. Right.

GALEN: But I think what they do -- but, A, it makes the candidates feel good, because they get treated like rock stars if they're a major candidate, and they always do and that's a good thing. And it does generate a day or two of publicity. It did for the president when he was a candidate, it is for Romney.

And that's good for him. It means all the other ones have to go in behind him.

I think for Romney, though, I would have to go back and look, but I'll bet that, as governor of Massachusetts, he went on a bunch of these foreign trips for trade missions. So it's not new to them, but it is part of the dance that you do early in the cycle when you don't have to be in living rooms every single day. You go overseas and you make a couple of days worth of news.

BRAZILE: Well, look, he was over there to raise money. Let's be clear.

He fell short of his goal of raising $50 million for the first quarter. So he went over there to try to generate some buzz so he can raise a little bit of money.

The truth be told, there's nothing wrong with going overseas. I was overseas. I've been to Israel, I've been to Cuba, and God knows I'll take another trip if one comes my way.

But it's an opportunity for him to polish up his foreign policy credentials, get to meet some of the leaders outside the country. So it's a win/win for the country if he becomes the Republican nominee.

CROWLEY: Let me move you to the debt ceiling, just because I think we'll be talking about it from now until at least August 2nd. And we've already seen from the left a letter to the president going, hey, wait a second, no Medicare on the table, not Social Security on the table. We want to know what it is you're doing. This is, to me, seems to be a high-wire act for the president of the United States and the Speaker of the House.

Would you like at it that way?

BRAZILE: Well, look, I'm one of those Democrats who believe that we have put a lot on the table. We've put a lot. We've put things --

CROWLEY: But do you mind these other things on the table?

BRAZILE: I understand he's trying to put as many sweeteners as possible to get the Republicans just to come into the room. They are just as responsible as Democrats in trying to solve this debt problem. We know what the games are.

It's time for people to really get serious about finding commonsense solutions. The middle class, the poor, they have really taken a brunt of these cuts at both the state level, as well as the federal level. The president has to put it on the table, but I would hope he doesn't give away all of the cookies.

GALEN: Yes, that's very Paul Krugman of you, but the reality is it seems to me, just as having been around this, sort of feeling the kind of disturbances and the force, that Boehner, the Speaker, and the president are on to something. And what they're trying to do is figure out how to get enough votes --


CROWLEY: They had a private meeting over the weekend that we know very little about.

GALEN: Yes. So that tells me -- I mean, I think they've got a path that they think they can walk through to get us through the next six, eight, 12, 15 months.

BRAZILE: But they still have to bring their conferences along.

GALEN: But that what I mean.

CROWLEY: They do.

BRAZILE: And that is tough. That is tough.

CROWLEY: They do.

So, a quick yes-or-no question for you. And that is, if Speaker Boehner goes for some revenue enhancements, can he bring along his Tea Party, that part of the Republican Caucus that's Tea Party?

GALEN: The conversation is, does he need them if Nancy Pelosi gets enough Democrats?

CROWLEY: And can the president bring along Democrats if he puts in there some maybe hikes in Medicare, co-pays, or in Social Security, saying listen, wealthier people will have to -- GALEN: Means testing.

CROWLEY: Means testing, either Medicare or he loses left?

BRAZILE: Well, let's see what the details are. I don't want to play hypotheticals, because you know what? We're talking about people's lives.

GALEN: We live with hypotheticals.

BRAZILE: No, no.

GALEN: That's what we go to lunch on, is hypotheticals.

BRAZILE: You know, why don't we put prescription drug benefits on there? We've got a lot of things we can put on the table. And as Mr. Reid talked about corporate jets, we've got a lot of things coming to us.

GALEN: I think they'll get a deal, and it will be a bipartisan deal. The edges of both parties will say no.

CROWLEY: It would have to be, right.

GALEN: And the middle will say yes.

CROWLEY: Rich Galen, Donna Brazile --

BRAZILE: Kumbaya.


CROWLEY: Hold hands now.

BRAZILE: Shalom.

CROWLEY: It is one of the most controversial questions surrounding the end of the Iraq War. Should the U.S. leave troops in Iraq past the deadline for leaving the country?

Jack Cafferty has your thoughts ahead.

And journalists in Pakistan are learning to watch their backs. But it isn't militants or the Mafia they're worried about. We'll tell you who could be persecuting them.


CROWLEY: Jack joins us again with "The Cafferty File."

We had the question last time. Now you've got some answers, Jack.

CAFFERTY: Well, we have some thoughts. I don't know if they're answers, but they're thoughts. The question of the hour is: Should the U.S. leave troops in Iraq past the deadline which is coming up at the end of the year? President Obama is saying he's offering to leave 10,000 troops there if the Iraqi government requests it.

Tom writes, "Aren't you tired of the U.S. providing the world's security? The United States should have left Iraq some time ago. This country should cease protecting the world unilaterally. It's time for other nations to participate with manpower and funds."

"The U.S. and Britain, the principal nations that are opposing tyrants. Why does the U.N. continually ignore their role to provide for a secure world?"

Marvin in Missouri writes, "Definitely not. The Iraqis are quite willing and capable of killing each other without our troops, money and weaponry. Wish them good luck and bid them farewell."

Patricia writes, "It may be necessary to leave some troops, but the majority will be brought home. This is no big deal."

Unless you're one of those who's staying, I suppose.

"Circumstances control what Obama does, and for me he has made good decisions about the war."

Mel writes from Texas, "No, unless the leader of Iraq, Nouri al- Maliki, gets on television and makes a public request for the U.S. to stay for a longer period of time. Possibly a speech to the parliament so that the citizens of Iraq could see that the U.S. is not an occupier."

Donald writes, "Please don't leave any troops in Iraq. Let the region's history unfold as it will. Ditto with Afghanistan. Get on with governing an America that puts its own citizens first and concentrates solely on bettering the home country for everybody who lives here. In case you hadn't noticed, while you were wasting trillions on useless wars, America has fallen in a deep pit of overspending, foreclosure and unemployment."

Shawne writes, "I feel the USA needs to get most of the troops out of Iraq as soon as possible. What's the president thinking?"

"This huge budget mess that we're facing in this country is largely due to the wars in Iraq and Afghanistan. How can they think of cutting Social Security or Medicare for our seniors and disabled citizens at the cost of these wars? I'm 60 years old, and I feel my future is very uncertain."

And finally, Terry writes from Arizona, "How many ways do I need to respond with 'no' in order for my reply to be read on the air?"

You just got it done.

If you want to read more on this, go to the blog, -- Candy. CROWLEY: I hope that makes Terry happy. Thank you, Jack.

CAFFERTY: Well, I don't care if it does or not.


CROWLEY: New evidence of the dangerous links between al Qaeda's leaders and the growing terror threat in Somalia.

And what can Casey Anthony expect when she walks out of jail next week? The security and the spectacle.


CROWLEY: New information about a key al Qaeda leader's apparent connection to a controversial terror suspect.

We want to go to our Pentagon correspondent, Chris Lawrence -- Chris.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, Candy. U.S. officials are now telling us that accused Somali terrorist Ahmed Abdulkadir Warsame has been in direct contact with known al Qaeda leader Anwar al-Awlaki.

First, a name check.

Warsame is that Somali-born man who was picked up and interrogated onboard a U.S. Navy ship for about two months, and just brought to New York to face civil trial. Al-Awlaki is a known American-born cleric who has been with al Qaeda in the Arabian Peninsula, based in Yemen, and is considered one of the biggest threats to the U.S. homeland.

Now, we had learned initially that there was valuable information gained during his interrogation. Now we're learning that not only was he in direct contact, but the two of them may have been in the same place for a period of time.

Now, the way in which he was interrogated onboard a Navy ship for two months, first by military interrogators and then by law enforcement officials, is sort of a new wrinkle in this war on terrorism, and a military official spoke with Congress recently about how this is working.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: So that's the longest we can keep somebody on the ship?

VICE ADM. WILLIAM MCRAVEN, U.S. NAVY: Sir, I think it depends on whether or not we think we can prosecute that individual in a U.S. court or we can return him to a third-party country.

GRAHAM: What if you can't do either one of those? MCRAVEN: Sir, again, if we can't do either one of those, then we'll release that individual. And that becomes the unenviable option, but it is an option.


LAWRENCE: Now, some groups have accused President Obama of walking a fine political line with this on one hand, and doing the military interrogations onboard a Navy ship to placate the right. At the same time, then referring the suspect to a civilian court to placate the left. In doing so, he's made no one happy -- Candy.

CROWLEY: CNN's Chris Lawrence.

Thanks, Chris.

Freedom of the press is a right we sometimes take for granted in America. But in Pakistan, journalists are learning their lives are always in danger.

As CNN's Reza Sayah tells us, the threat isn't from the Taliban, but apparently from their own government .


WAQAR KIANI, ATTACKED JOURNALIST: One of them, he just held me like this.


(voice-over): It happened in seconds.

(on camera): So where did they hit you?

(voice-over): Punches to the gut --

KIANI: Here.

SAYAH (on camera): They were hitting you in the stomach?

KIANI: Here, everywhere.

SAYAH: -- from four attackers. A few baton whacks that dropped him to the ground. Then came the kicks to the body.

KIANI: I was thinking about -- I mean, that I'm going to die today.

SAYAH (on camera): The victim of the attack was Pakistani journalist Waqar Kiani. His attackers weren't muggers or street thugs. They had police uniforms on and they just pulled him over.

After the attack, they had a message.

They said if you want to be a hero, we'll make you a hero?

KIANI: Yes, "We'll make you a hero and we'll make you an example."

SAYAH (voice-over): It's not clear who roughed up Kiani, but his beating has fueled anger in Pakistan over a string of attacks against journalists that's raised a troubling question. Are Pakistan's spy agencies trying to silence the media by threats and violence?

Days before the attack, Kiani told the British paper "The Guardian" that in 2008, he had been kidnapped and beaten after he wrote a report about illegal arrests by Pakistan's intelligence agencies. Whoever beat him a second time didn't like that he made Pakistan spy agencies look bad, he says.

KIANI: The last time, I mean, they threatened to rape my wife.

SAYAH (on camera): They threatened to rape your wife?

KIANI: Yes. So, under these circumstances, what can I do?

SAYAH (voice-over): Kiani's beating came less than three weeks after the still unsolved murder of another Pakistani journalist, Salim Shazad (ph). For years, Shazad (ph) had written stinging reports about links between militants in Pakistan's military.

(on camera): According to a report by "The New York Times," at least three U.S. officials say classified information shows Pakistan's top spy agency, the ISI, ordered Shazad's (ph) killing. The rights group Human Rights Watch say they have proof the ISI was involved, allegations the ISI rejects as unfounded and baseless.

(voice-over): But a growing number of Pakistanis want answers.

MEHER BOKHARI, PAKISTANI TV NEWS ANCHOR: It's been too long that journalists have been targeted, and journalists have had to pay with their lives to speak the truth and in order to do their work.


SAYAH: Kiani admits he's scared for himself and his family. The beating has left him shaken, always watching his back. But he says this is no time to back down.

KIANI: Well, the journalist community, we have to speak. We have to come out now to stop such kind of incidents.

SAYAH: Reza Sayah, CNN, Islamabad.