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Possible Breakthrough in Debt Talks; Bachmann's Campaign Headaches; Murdoch is Sorry

Aired July 19, 2011 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone.

Tonight what you might call Rupert Murdoch's Pontius Pilate moment, he tells Parliament he's humbled and sorry about (INAUDIBLE) and illegal reporting tactics by his tabloids, but the man known for his hands-on role and building a global media empire washes his hands when asked if he is ultimately responsible.



UNIDENTIFIED MALE: You're not responsible? Who is responsible?

RUPERT MURDOCH: The people that I trusted to run it and then maybe the people they trusted.


KING: Plus, Michele Bachmann responds to former aides who anonymously allege this rising force in the Republican presidential field suffers from migraines so debilitating they could undermine her ability to lead.


REP. MICHELE BACHMANN (R), MINNESOTA: I've prescribed medication that I take on occasion whenever symptoms arise and they keep my migraines under control. But I'd like to be abundantly clear. My ability to function effectively will not affect my ability to serve as commander in chief.


KING: Dr. Sanjay Gupta will join us here for a reality check.

But up first tonight, live action in the House of Representatives and how it impacts the search for a deal to keep the government from a default most economists say could derail the already fragile recovery. This hour you see right there live debate.

The House is expected by the end of this hour to pass the Republican majority's cut, cap and balance plan. It would cut federal spending, then cap that spending and the House Republicans also want a constitutional amendment requiring Washington to balance its budget every year.

As we watch the debate and the vote, this important footnote, this plan has absolutely zero chance of taking effect. So, why are you watching you might ask? This is for better or worse part of an important Washington ritual; House Republicans want their vote on their plan. The Senate in the days ahead will also take votes on spending ideas that have no chance of taking effect.

It may appear to you at home a waste of time. But in this town, it's a way to help make clear what is and what isn't possible, which is why the president today said, fine. Take a few votes if you insist, but quickly, please.


BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: If we continue to go through a lot of political posturing, if both sides continue to be dug in, if we don't have a basic spirit of cooperation that allows us to rise above immediate election-year politics and actually solve problems, then I think markets here, the American people, and the international community are going to start reacting adversely fairly quickly.


KING: Down a bit yesterday, but the markets bounced back today, apparently convinced something will be worked out in Washington before the August 2nd debt ceiling deadline, adding to the confidence perhaps a new Senate plan. It is bipartisan. It includes a mix of spending cuts and new tax revenues and it has the president's general blessing. But it also has a lot of critics on both the left and the right.

So, let's watch the House vote and assess where we stand in the broader debt and deficit debate with our chief White House correspondent Jessica Yellin, our congressional correspondent Kate Bolduan and our chief political analyst Gloria Borger. Kate, I want to go to the Hill first because we're watching this play out.

The House Republicans say this has absolutely no chance to pass, but the House Majority Leader Eric Cantor today saying the new Republican majority wants to make an important point. Let's listen.


REP. ERIC CANTOR (R), MAJORITY LEADER: Today, the House has the opportunity to show the people that sent us here that we are serious about turning the page on the failed fiscal policies that this town has been about over the last several decades, and begin to get the fiscal House in order.


KING: Seems to be no question, Kate, by the end of this hour they're likely to pass this plan, but then what on the House side?

KATE BOLDUAN, CNN CORRESPONDENT: Then what on the House side is a good question. I think Eric Cantor -- and you summed it up really well -- that this is going to end up being a very symbolic vote for House Republicans. It's allowing them to show their constituents very importantly as well as throw their support behind very much deeper spending cuts and stricter spending controls than realistically is going to be part of any kind of compromise deal to raise the debt ceiling.

But what next, it is a big question. House Speaker John Boehner, John, earlier today even before this vote, he acknowledged that while he has high hopes for cut, cap and balance that he says they're still considering other options, a plan "b" if you will, but he's not tipping his hand on what plan "b" might be, but everyone continues to point to the McConnell/Reid plan, as the fallout -- fallback plan, but it doesn't seem that members think they're at that point quite yet.

KING: Not quite yet, we've got a little time for finger-pointing and debate and the likes --


KING: So Jess, at the White House the president comes into the briefing room again today. That's becoming part of this ritual. The president every couple of days decides he has to come in and make clear where he stands. The conversation in town though is almost to the degree that the president has been pushed to the sidelines. Even Speaker Boehner a bit pushed to the sidelines and that at least the beginning of a deal will be crafted in the Senate. Do they accept that at the White House?

JESSICA YELLIN, CNN NATIONAL CORRESPONDENT: No. I mean the White House is hopeful that after this vote that maybe there will be a new understanding by the House leadership that they have to come off this rigid position that there has to be a dollar in spending cuts for every dollar that the debt ceiling is raised or that there can be no revenue increases and that maybe there can still be a deal found. There's still a glimmer of hope for that. There's also an awareness that the McConnell/Reid plan is still the likely other option, but there still -- there always is in the Obama world, hope.

KING: Hope, hope in the Obama world. I want you to listen, Gloria, Senator Lamar Alexander -- he's in the Republican leadership. He's the former governor of Tennessee. He came out today and embraced and essentially made it at least briefly the gang of seven. We're going to break down the gang of six plan a little bit later. We're going to talk to two of the key members, one Democratic and one Republican. But here's a plan that would cut a lot of spending. It would raise some taxes by doing overall tax reform and listen to Lamar Alexander -- again, he's a conservative Republican. He's from Tennessee and he's saying look at these people right here who are saying, I get it, we have to do some revenue increases.


SEN. LAMAR ALEXANDER (R), TENNESSEE: I mean, Senators Crapo, Coburn and Chambliss are three of the most conservative members of the Republican caucus and if they study something for six months, tell me it's good for the country. That means a lot to me, so as one senator, I support it.

KING: Means a lot to the former governor, now the senator in the leadership from Tennessee. However, that's the Senate, Gloria.


KING: Do -- can the Senate Republicans --


KING: -- sell that to the House Republicans?

BORGER: Well you know that's the big question. I think what we saw today both from President Obama and someone like Lamar Alexander is this isolation that's going on of the House Republicans, kind of saying, well look, the gang of six got a deal, that's why President Obama went out there to say it. Mitch McConnell's got a backup plan. John Boehner and I were kind of working together and, well, who's out of that picture -- the House Republicans. And the polls are increasingly showing that the House Republican point of view is not popular with the American public. I mean there's a "Washington Post" out -- poll out tonight that says that more than three-quarters of Americans see the Republican leadership as being too resistant.

KING: However, however, and let's listen as we go back to Kate Bolduan on the Hill, the Democrats are reading those polls. Listen to John Larson here, a member of the Democratic leadership, going to the floor essentially saying, Republicans, why are you wasting our time?


REP. JOHN LARSON (D), CONNECTICUT: The public has had it with this theater of the absurd that's going on. They want Congress to come together as our president has suggested and do the most important thing that we can, create jobs for the American people.


KING: So, Kate, the Democrats clearly see the national poll trends, but I think what gets lost sometimes even in this town, and especially across the country, is people say well if the polls are showing that, why aren't the House Republicans moving. Well more than 200 of them have signed a pledge saying they won't raise taxes. Many of them just ran in campaigns where they said this was the defining fight, and many of them despite any national polls -- Kate, am I right -- feel they can go home to their district where they have to run for reelection and say I did exactly what you asked me to do?

BOLDUAN: That's absolutely spot-on and to further the point just today we're now hearing of a concerted effort of House Republicans in light of the more discussion about the McConnell/Reid plan, a concerted effort of some 20 House Republicans, possibly more, led by a Tea Party freshman, Joe Walsh. Walsh, who sent a letter to House Speaker John Boehner and Eric Cantor saying not only do we not support the McConnell/Reid fallback plan, which is now -- you know we're talking more and more about, but they don't even want the House speaker or Eric Cantor to bring it to the floor because they are -- they do not want any compromise.

They do not see a reason to budge, and simply put, they are not accepting any kind of -- anything to be -- can -- could be construed as a tax increase, albeit that's probably not part of the McConnell/Reid plan at this point. So, they don't see the advantage in compromise, some of them, at this point, because that's what they ran on, John.

KING: And so where do we go now? Let this play out on Capitol Hill? Does the president plan to try to bring them all back around the cabinet room table?

YELLIN: I expect it'll be more -- yes, there will be more meetings in the White House. I don't expect the big, big meeting. The president will try to get involved again and nudge a little bit more to get his revenues involved and his balanced approached. The McConnell/Reid plan is the likely outcome, we all know that.


YELLIN: They just don't know how this is going to end in the end. Nobody knows how it's going to end.


BORGER: So John, a senior Republican today described it to me as the break-glass kit. That you have it there behind the glass and in the emergency you break it and you pull it out, and, you know, he said this cut, cap and balance plan is a way for these House Republicans to let off steam.

KING: Let off some steam --


KING: -- but we'll talk about it later in the hour, Jess, Gloria, Kate all with us as the House continues to debate tonight on their plan. We'll watch the vote.

When we come back though we move to presidential politics and an allegation today from former aides to Michele Bachmann anonymously suggesting she has a condition that could keep her from serving effectively as president -- our Dr. Sanjay Gupta after the break.


KING: When a presidential candidate moves up in the polls as far and as fast as the Republican Congresswoman Michele Bachmann, well you know the attacks and the questions will soon follow. Today Bachmann responded to a report in the "Daily Caller" quoting anonymous former staffers who say she suffers from headaches so incapacitating they've sent her before to the hospital. Here's what the congresswoman told reporters today in South Carolina.

(BEGIN VIDEO CLIP) BACHMANN: Like nearly 30 million other Americans I experience migraines that are easily controllable with medication. Since entering this campaign for the presidency, I have maintained a full schedule between my duties as a congresswoman and as a presidential candidate traveling across the nation to meet with voters in the key all-important states, early states, of South Carolina, Iowa, and New Hampshire.


KING: CNN chief medical correspondent Dr. Sanjay Gupta is with us now. Doctor, tell us, first, stress-induced migraines, what are we talking about?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well when you talk about migraines, people are typically talking about the migraine headaches, although migraine is more strictly defined -- it's usually a bunch of neurological things that are associated with it. People can be nauseated. They can have vomiting. They can have real sensitivity to light, but it's usually the headache that you know really characterizes these types of things.

They occur typically on just one side of the head, which is a way to characterize or differentiate it from other headaches. Stress- induced, John, as you might imagine, you know there's all sorts of different triggers for these sorts of headaches. Stress can be one of them and it's one of the more common ones.

So people who have a lot of stress, lack of sleep associated with that that can bring on one of these migraine headaches. A lot of people will have some sort of aura, so to speak. They'll have some idea that this headache is about to come on and they get an hour or so notice, but if it comes on and is not treated in some way, it can be very painful. It can last from four hours to three days, so it can be a pretty big deal, John.

KING: Could it incapacitate a president?

GUPTA: Well, you know, if someone is untreated it can be, you know debilitating to the point where someone needs to be in a darkened room just to get away from light, and take pain medications to try and control the headache, but it -- when I talk about treatment, it can be treated very easily. You know Ms. Bachmann said that 30 million people roughly in the country have these migraine headaches. That's about right. So this is obviously a common ailment and something that neurologists have gotten a pretty good handle on if patients seek out treatment.

KING: And you mentioned patients usually feel it, especially patients who have this chronically. They have the aura. They feel it coming. What kind of medications are we talking about and are there side effects to worry about?

GUPTA: Well there's sort of -- divide the medications in two broad categories; one is sort of the abortive medication. This is not something you take daily, but as you say, John, if you feel the aura coming on, you take this abortive medication to try and stop the headache from ever taking full hold.

And I think that that's what she was referring to in terms of what she takes. She takes the medication if she needs it. The other types of medication are more preventive or prophylactic medications. You would take these daily to try and prevent the headaches from ever coming on or ever developing the aura even, and if you've taken those about 80 percent to 90 percent of people have pretty good results with this, with pretty low side effect profile. There are a couple of medications that have been studied that may cause some impact on the heart, but overall you know again tolerated by tens of millions of people.

KING: We've asked the campaign we should make clear specifically which medications she takes, and they have not responded (INAUDIBLE) and we hope they will. But on that scale, if I have pain someone could tell me to take Tylenol, someone could tell me to take Ibuprofen or somebody could give me Percocet or the Tylenol with codeine. There's a different scale of drugs for simple pain -- same here?

GUPTA: Yes. I think that's very fair to say. And I will disclose to you, I mean I suffer from migraines as well and you know the simple sort of Tylenol or, you know, an Ibuprofen or something like that for most people just isn't going to cut it if the headache has come on full bore. So the -- when you talk about the types of medications you're describing, especially the narcotics, that is what some people are forced to take, again if they are not taking the abortive medication, the preventive medications and a headache comes on full untreated then, you know, analgesics strong ones at that are sometimes the only option.

KING: Dr. Gupta, appreciate your help and your insights tonight.

GUPTA: Thanks, John.

KING: Thank you.

Next the FBI goes after cyber criminals and a mysterious group of hackers. Later Rupert Murdoch says he's the best person to clean up the bribery and hacking scandal engulfing his British newspapers.


KING: Welcome back. Here's the latest news you need to know right now. The FBI's arrested at least 16 people for alleged cyber attacks, most thought to be connected with the hacker group Anonymous, which attacked credit card Web sites last December to show support for WikiLeaks.

Late his afternoon Apple reported a record quarterly profit, $7.3 billion -- that's "b" in billion, thanks to sales of iPhones and iPads.

Democratic Senator Dianne Feinstein is sponsoring a bill to repeal the Defense of Marriage Act. That's the federal law defining marriage exclusively as a union between a man and a woman. New York City is holding a lottery to pick 764 couples to get married this Sunday the first day same-sex marriage is legal in the state of New York.

A U.S. spacecraft has sent back the first close-up since orbiting the solar system's third largest asteroid. That's Vesta (ph) and it's never been seen this clearly.

Still to come here, the media mogul Rupert Murdoch answers parliament's questions about the tabloid hacking scandal in Great Britain. No, he's not responsible, he says. And, no, he's not quitting.


KING: A normally obscure committee in the British parliament today was the stage for a global media event. News Corporation International CEO Rupert Murdoch, his son James Murdoch, and another deputy were questioned for hours about the British tabloid hacking scandal. Murdoch repeatedly said -- Rupert Murdoch I'm talking about -- said he was sorry, repeatedly said he had no knowledge of illegal cell phone hacking and police bribes that helped his "News of the World" tabloid break stories about the Royal Family, celebrities, even British crime victims.


UNIDENTIFIED MALE: Mr. Murdoch, do you accept that ultimately you are responsible for this whole fiasco?


UNIDENTIFIED MALE: You are not responsible? Who is responsible?

RUPERT MURDOCH: The people that I trusted to run it and then maybe the people they trusted.

UNIDENTIFIED FEMALE: This total thing happened on your watch. Mr. Murdoch, have you considered resigning?



RUPERT MURDOCH: Because I feel that people I trusted, I'm not saying who, I don't know what level, they let me down, and I think they behaved disgracefully, betrayed the company and me, and it's a debt to pay. I think that frankly I'm the best person to clean this up.


KING: Both Murdoch's said they had no evidence, no evidence, that American victims of the 9/11 attacks were subjected to the sleazy tactics and Rupert Murdoch spoke of his personal apology to the family of Millie Dowler, a British schoolgirl who was murdered back in 2002 and whose cell phone messages were hacked by the "News of the World."

(BEGIN VIDEO CLIP) RUPERT MURDOCH: At no time do I remember being as sickened as when I heard what the Dowler family had to endure, which I think was last Monday week. Nor do I recall being as angry as when I was told that the "News of the World" could have compounded their distress. I want to thank the Dowlers for graciously giving me the opportunity to apologize in person.


KING: Let's check in with CNN's Richard Quest in London who was watching these proceedings throughout the day. And, Richard, here you have Rupert Murdoch who built this global media empire, he says he's humbled. He says he's sorry but he also says he's not responsible. How is that going to fly in the wake of this blossoming scandal?

RICHARD QUEST, CNN CORRESPONDENT: Yes, his line that he wasn't responsible was a wonderful bit of sophistry when taken into its full context. He said I'm not responsible, but because I put my trust in other people and they have let me down. Now, Americans may find that to be a little disingenuous, a little difficult, because the American responsibility idea of the buck stops here, right, the way to the president's desk, and even if you didn't make the decision, you carry the can. He was basically saying I'm going to clean up the mess that other people who I trusted and other people have let me down and misled me. It's a -- it's a -- it's a nice argument, if you like, but I'm not sure it was the argument that needed to be made today.

KING: You say the buck stops here is one of the way we say things here. We also sometimes say -- this might actually come from your side of the pond -- the captain goes down with the ship. Mr. Murdoch made very clear he's not going anywhere, not considering that. In fact he said he needs to stay. He needs to be the one that cleans this up. But listen to him admitting, yes, yes, his company, his tabloids did do some really heinous things.


RUPERT MURDOCH: Invading people's privacy by listening to their voice mail is wrong. Paying police officers for information is wrong. They are inconsistent with our codes of conduct and neither has any place in any part of the company that I run. But saying sorry is not enough. Things must be put right. No excuses.


KING: That's a pretty straightforward statement, no excuses, things must be put right. I guess my question is it is at odds somewhat with this man's reputation as a guy who to his credit built a very wealthy, huge media conglomerate and most people would say through a lot of hands-on management.

QUEST: And the interesting thing about this was the difference in the answers between Rupert Murdoch and his son James. When Rupert Murdoch answered, yes, there were some very long pauses and you wondered whether perhaps he'd forgotten the question, but then would come the definitive answer, no, yes. We will do it. I haven't thought about it.

I wasn't informed about it. It's not my responsibility. And then you get James Murdoch, when he answered long, rambling answers that seemed to -- it just go round in circles, circumlocution of the worst sort. And the difference between the two was quite -- I found was quite noticeable. What we got from Rupert Murdoch I think today was a -- was a man who has been fairly shocked by what is being discovered. After all, as he said, he's been doing it for five decades. He's got more than -- had more than 200 papers. He was brought up in a newspaper newsroom since he was knee high to a grasshopper.

So, for him to have to witness what he called unacceptable, deplorable activities, one can see how this is.

Now, where does this all take us from where we heard today? Frankly not much further. Because what we didn't get was an account of how these men and Rebekah Brooks allowed or warned or created or allowed to exist a culture that these things could happen and they didn't know about it.

KING: And it was profound theater to begin with, and as you mentioned, a lot of questions we would still like answered. We'll see how that plays out. But in the middle of this theater, a subplot, if you will -- somebody tries to pie Rupert Murdoch.

Describe the scene as you recall it and especially I would say a rather feisty defense of Mr. Murdoch by his wife.

QUEST: Oh, I mean, well, we're watching from the back. The picture -- all of a sudden, the noise -- you see this woman in pink launch herself, going to give somebody a right hook. You then see James Murdoch get out the chair like this.

Now, at first, I couldn't tell whether Mr. Murdoch Sr. had been hit. You can then -- in later pictures, if you look close, you can see the foam. More than one person suggested that, you know, this could have been a brick, it could have been, you know, nails, it could have been much more serious.

You have to bear in mind if it had been anything like that, it wouldn't have got into the room. We don't know how he got in with some shaving foam. He could have said he was just been home doing the weekly shopping. Who knows?

It was serious, but not because it could have been a much more vicious attack. It was serious because it was a disgrace, because anybody coming to give evidence in the mother of parliaments has a right to do so with dignity and in courtesy.

KING: Amen to that. And that is -- those disruptions something we se many times in the U.S. Congress as well.

Richard Quest, thanks for your remarkable reporting today on this remarkable story. Thank you.

QUEST: Thank you.

KING: Let's dig deeper now and continue on this story. Joanne Lipman is a columnist for "Newsweek" and "The Daily Beast"; and CNN senior legal analyst, Jeffrey Toobin, also with us.

Joanne, you've met Rupert Murdoch several times. I want you to listen here briefly how he acknowledges pretty clearly here that this is not his best day.


RUPERT MURDOCH, CEO, NEWS CORPORATION: I would like to say, in one sentence: this is the most humble day of my life.


KING: The most humble day of his life. As someone who has met him and as someone who understands his empire, what to you is the most significant thing that he said or that happened today?

JOANNE LIPMAN, COLUMNIST, NEWSWEEK & DAILY BEAST: Well, the most interesting thing I think today the Rupert Murdoch who we saw testifying was as you pointed out really at odds with the Rupert Murdoch who I and many, many other people have experienced over the years, and that is that he generally is very charismatic and funny, and he's always the most powerful person in the room.

This is a man who when you go to the Davos World Economic Forum which is a forum for world leaders and executives, when he walks into the room, they all turn and watch him.

So, to see this man physically looking depleted, just not even looking like himself, and then for him to be saying, you know, I didn't know. I have 52,000 people working for me. I just really -- how could I possibly know?

It was really very much at odds with this guy.

The other thing, you know, Murdoch is legendary for his command of the details, particularly in his newspaper empire. He pretty famously said when he bought "The Wall Street Journal," one of the first things he said is -- this newspaper has too many editors and I know because I calculated that every piece of copy is touched by 8.3 editors.

Now, that man with that command of detail is not at all the man we saw today on the stand.

KING: And so, you have that, you make that case quite passionately.

Jeff, I want you to comment on why it would matter. But first I want you to listen to a different take from our Piers Morgan, who also knows Rupert Murdoch.

(BEGIN VIDEO CLIP) PIERS MORGAN, HOST, PIERS MORGAN TONIGHT: When he says that he didn't have much day-to-day contact with these papers, that's true. I spoke to an editor of "News of the World" maybe once a week, maybe once every two weeks. He never asked me about methodology of stories, he didn't have time. He would say what's going on and you'd tell him what stories you had, and he would be, I'm sure, in a position where he thought I have editors, I have managers, I have lawyers, I have accountants, they do all the box ticking here -- my job is to get an overview what's going on.

And I think when you run a company of 50,000 people, it is a bit ridiculous to expect Rupert Murdoch to be all over the micro detail of how each individual part of these companies gets run.


KING: So, Jeff, you have Piers' perspective. You have Joanne's perspective, which was quite different and she cites the example, the very specific comments Mr. Murdoch made about "The Wall Street Journal." Why might it matter where if this committee or if a court finds out the exact truth here? Why might it matter legally?

JEFFREY TOOBIN, CNN SENOR LEGAL ANALYST: Well, because under British law, if you authorize hacking, you are guilty of a crime. Remember, Rebekah Brooks, the -- who supervised "The News of the World," she is currently under arrest. So, Rupert Murdoch couldn't be in the business of acknowledging what seemed fairly obvious with all due respect to our colleague, Piers.

I mean, this wasn't just a question of not supervising the newspaper, this was not reading the newspaper. I mean, it was obvious if you read "News of the World" that they were in people's email -- in people's voice mail. I mean, so, the idea that Murdoch Sr., Murdoch Jr., didn't know that they were reading people's voice mails, much less Rebekah Brooks, seems pretty preposterous to me.

KING: Joanne, where do you see this heading? Obviously, you have the parliamentary inquiry. We're going to have legal inquiry, so we can't answer some questions about where this heads.

But in terms of the legacy of a very proud man, you mentioned his appearances at Davos. He has built this empire overseas and here in the United States. He takes great pride in his empire -- what has it done to the legacy of Rupert Murdoch?

LIPMAN: You know what? I think one of the most key things he said the entire day was when he said, no, I will not resign because I'm the one who is best prepared to clean this up. And I think that he really feels he did build this company, his father left him a small newspaper, he built it over 57 years into this massive empire.

And it was almost poignant today when he spoke about his father and his father was not a rich man. But he was a great journalist. And then he spoke about how he wanted to be able to then leave the company to his own children, to his daughters and his sons should they want to be involved. And I think that that's foremost in his mind. It's interesting while everyone in the room was focused very narrowly on the hacking and on the wrongdoing at the newspapers -- I think that Rupert Murdoch was most likely focused on the much bigger, longer-term picture, which is what will be his legacy and protecting that legacy.

He did pull his company back from the brink. Twenty years ago, he came very, very close to the edge financially. He overextended. He was deeply in debt. And he actually -- he renegotiated with his bankers. With his characteristic tenacity, he dug in there, he sold publications.

He was tremendously successful in bringing it back from the brink. But that was 20 years ago and he's now an 80-year-old man who really wants to make sure that his legacy is preserved and that he can pass that along to his children.

KING: And as we watch it play out, Rupert Murdoch saying he's going to stay. Jeff Toobin is the guy with the former prosecutor's instincts. You still have those instincts. What was your take on today, and I guess what would you be looking for based on what you heard today?

TOOBIN: Well, I think, just for starters, there is virtually no evidence that suggests Rupert Murdoch or anyone in this company violated U.S. criminal law. I think it is farfetched to think there was any sort of criminal violation inside the United States. So, I think we can sort of cross this off the list.

I do think that lots of people involved in this company are going to be prosecuted in Great Britain, and that is a big, big problem. And not so much because I think Murdoch is going to be criminally prosecuted.

But the question: is the very docile board of directors of News Corporation, which is so dominated by the Murdoch family, are the outside directors going to say, look, this is too much of a distraction, too much of a humiliation, to have these Murdochs who were at best asleep at the switch, still in charge of the company? And that's the real peril at this point, it's will Murdoch be in charge, will the Murdoch family keep control, not will they be prosecuted, not will they go to jail.

The issue is will they keep control of Rupert Murdoch's life's work.

KING: Excellent points.

Jeff Toobin, Joanne Lipman, thanks for your time tonight. We'll keep track of this one.

Next, two members of the Senate's "gang of six" who might or at least they hope have a plan. It could be the breakthrough Washington needs to start getting out of the debt crisis.

And as we go to break, remember, we're watching a live vote in the House of Representatives on a House Republican plan that they say is key to dealing with the budget and the debt crisis. We'll keep track this vote. Suffice to say the president disagrees.


KING: Live pictures there of the House of Representatives. The House Budget Committee Chairman Paul Ryan right there is giving his view of why Washington has a debt and deficit crisis. The House to vote in just a few minutes on a significant House Republican plan -- that's on the House side.

On the Senate side today, these guys right here, a bipartisan group known of the "gang of six," three Democrats and three Republicans, they've put out their proposals that they believe could help Washington out of the debt and deficit crisis.

Let's look at some of the details. It would cut the deficit by nearly $4 trillion over 10 years.

Here are some the immediate cuts, $500 billion. It would adjust how Social Security recipients get inflation adjustments, freeze congressional pay -- also sell a lot of unused federal property. That would start to get you to cuts of about $500 billion.

And it would make nearly $300 billion in Medicaid savings, they are called reforms and others will call them cuts. Also, changes to growth rate in Medicare over the years, reimbursements to doctors. Again, that's always controversial.

Here's the big part, you have three Republicans saying, yes, the federal government needs more money in tax revenues. They'd get about $1 trillion. They would do it not by raising rates, but actually cut rates. Simplify the tax code, three tax brackets, repeal the alternative minimum tax and have a single corporate tax rate. They say by getting rid of the loopholes makes it simpler.

For most people, taxes would go down and Washington would get more money and then would tell the key committees in Congress, you have to come up with budget savings -- the military, $80 billion; health and education programs, $70 billion. You see the list going down here.

These are the cuts. They have tax revenues as well. They touch entitlement programs. They want to move pretty quickly to get to nearly $4 trillion.

The challenge now for these three Democrat and three Republican senators now that their plan is out -- selling it.

So, let's go up to Capitol Hill to check in with two members of this so-called "gang of six": Senator Kent Conrad of North Dakota is a Democrat. Saxby Chambliss of Georgia is a Republican.

Gentlemen, I want to start. I've just explained some of the details in the plan. But I want to start by listening to the president today. He came into the White House briefing room. He didn't say he loved everything, but he did offer some high praise.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And so, for us to see Democratic senators acknowledge that we've got to deal with the long-term debt problems that arise out of our various e entitlement programs and for Republican senators to acknowledge that revenues will have to be part of a balanced package that makes sure that nobody is disproportionately hurt from us making progress on the debt and deficits, I think is a very significant step.


KING: And yet, Senator Conrad, let me start with you first, the Democrats control the Senate. The number two, Dick Durbin, says this plan, while he might like parts of it is, quote, "not ready for primetime" and can't be considered as part of the train we're on right now that's approaching this August 2nd deadline for possible default.

Why not?

SEN. KENT CONRAD (D), NORTH DAKOTA: The point that he's making is to get it scored, to get it in legislative draft language within two weeks. That's a challenge. But he has come up with a number of innovative and creative ideas about how it might be included in what's considered.

So, look, the important thing is Republicans and Democrats have come together around a comprehensive plan that reforms the entitlements, reforms the tax code of the United States, and cuts spending. It reduces the debt by almost $4 trillion over the next 10 years. And, you know, you had 50 senators at a meeting this morning, the vast majority saying, hey, this is headed in the right direction.

KING: The problem is the other side of the Capitol, where as you know the House Republican majority has said flat out, no way. And a lot of those new members, more than 200 of them, have signed pledges say we will not under any circumstances raise taxes.

How would you walk across the Capitol, Senator Chambliss, and say, "Look, I know you don't want to do it, but here's why you have to do it"?

SEN. SAXBY CHAMBLISS (R), GEORGIA: Well, John, what they've said is, the same thing I've said, that they don't like tax increases. This is actually going to be a huge tax rate decrease. And under current law, it's going to be scored as a cut tax, almost $1 trillion dollar tax cut.

But at the same time, when you reform the tax code, just like Kent was just saying, what we've been able to do is to make major reductions in tax rates, by the elimination of tax expenditures and tax credits, lower the corporate rate so that we can take some of this capital that's sitting on the sidelines and have it reinvested in America, create more jobs, energize the economy, that's the way we need to get to raise revenue -- get to raise revenues and that's what our proposal's going to do.

KING: And so, why -- let me stay with the Republican in the group here. Why, then, on the other side won't they have that conversation and say as long as we get that, as long as we get that now, we're willing to go along? You've seen what's happened over the past couple weeks, Senator, everyone is back in their corner.

CHAMBLISS: Well, I think it is incumbent on the House to look at this. And they may not pass exactly the bill that we may pass over here. That's their prerogative.

But this is a foundation. This is a way forward. Not just for the debt ceiling, because we have never been focused on that.

Kent and the other four members and I have always been focused, John, on the long-term issue of trying to figure out a way to not require our children and grandchildren to pay this $14.5 trillion back. It just so happens that we have kind of come to the apex at the same time that the debt ceiling discussions were really reaching their end of the road.

So, whether it's a part of the debt ceiling or not, we are not saying that must be done. The House may still be able to take a different approach and if -- with respect to the debt ceiling itself.

KING:, a statement out this evening, "The gang of six proposal appears to ask seniors and the middle-class and the poor to bear the burden of deficit reduction, with cuts to Social Security benefits, billions in stealth cuts to be named later, no real effort to make corporations and millionaires pay their fair share."

So, you have the very same reaction on the left. Are we ever going to get anything done, whether it's the debt ceiling or this plan, if you have reflexive, ideological reactions on both extremes?

CONRAD: Can I just say -- almost nothing that they said is right about this plan. This plan is balanced. It's comprehensive. All of the Social Security savings go for extending the solvency of Social Security. None of it goes for deficit reduction.

This talk about balancing the budget on the backs of the poor and the disabled and seniors, that is -- they certainly are not reporting our plan because our plan specifically protects the most vulnerable among us. It does it in every program.

Look, at the end of the day both sides are going to have to figure out how we going to change a course in which we borrow 41 cents of every dollar that we spend.

These ideas that we don't have to make any changes, don't need change any entitlement, don't change any revenue program, don't change any spending program, are just wrong and they are leading our country toward the fiscal cliff and a collapse that would damage everyone. No one would be more hurt than the most vulnerable among us.

So, everybody needs to sober up, right, left, center. Let's get together and do what's good for America.

KING: Senator Conrad, to you first. Do you believe the president will broker this deal, dealing ceiling specific at the end? Or is it best for the president to maybe to step back and let, whether it's the McConnell plan, whether it's McConnell plus, whether it's pieces of your plan, something else, let Congress deal with this?

CONRAD: You know, I always believed this would have to start in the United States Senate. It started here today -- six of us, three Democrats, three Republicans, representing the broad cross section of the United States Senate in terms of philosophy and background. We took that plan to 50 members of the United States Senate this morning, about evenly divided, overwhelmingly positive reaction.

So, we intend to keep pushing, to try to make certain that this plan gets before our colleagues.

KING: Senator Chambliss, let me close with you. I've been in this town for a couple decades now. Neither of are you new to this process. There are some people who say they have never seen quite the gulf, not just ideologically, but in how they perceive the temperament and the like between the House and the Senate that we have right now.

Do you agree with that?

CHAMBLISS: Yes. I think there is a pretty significant divide and sometimes that makes for good government, though. So I'm not discouraged by what we're hearing from colleagues on the other side of the capital.

Look, they are smart people. They are elected representatives. And they deserve to be part of the mix. And we're going to do our best to incorporate them into the mix and listen to their ideas.

KING: Gentlemen, appreciate your time tonight.

CHAMBLISS: Good to be with you.

CONRAD: Good to be with you.

KING: Still ahead, on the floor of the House of Representatives, they're nearing a vote on "cut, cap and balance." That's the House Republican plan. Moment as way from the vote.

We'll break it down, just ahead.


KING: The House of Representatives there is beginning one of the procedural votes. They're close now to a final vote on what the Republicans call "cut, cap, and balance." It's one of their spending and deficit reduction plan. Joining us once again: our chief White House correspondent, Jessica Yellin, and chief political analyst, Gloria Borger, and our congressional correspondent, Kate Bolduan.

Kate, we're going to come to you first. You're on the Hill. They are about to have this vote. I assume the majority knows it has the votes to pass this plan. The president just said, if the Senate passes it, which it probably won't, he would veto it.

So, is this is a stepping stone to compromise negotiations, or is this an act of defiance where the House Republicans say, "No, Mr. President, this is the best we're going to give you"?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: To be honest, John, you can look at it from both perspectives, to be honest. Part of this discussion as we're leading into the vote, where people -- everyone knew it wasn't going to go anywhere really in the Senate, many have made the point that maybe allowing this vote and allowing House Republicans to have their say and to make their stand for deeper cuts and stricter controls, maybe that will kind of clear the air, create some room, if you will, for maybe some compromise as the clock ticks down and asks for this vote.

But at the same time, we are hearing from House conservatives continuously that they do not want to compromise, even after this point. So, it's unclear exactly where we're going to go from here.

KING: And it's an important point Kate makes, Gloria, because a lot of these Tea Party members especially are new to politics and they're especially new to the House of Representatives. So, sometimes you have to say, look, OK, so, we passed our plan in the House, then they'll vote on it in the Senate. It won't pass. That's when you say, see, see, now, you can't get your way. You can't get your way. So do you want nothing or do you want to cut some sort of compromise?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They get to be on the record. But they get on the record.

KING: Right.

BORGER: They get to be on the record voting for a balanced budget amendment that requires a supermajority, 2/3, if you want to raise taxes. So, it's a balanced budget amendment, which effectively says you can't balance the budget by raising taxes. So, they like that, and then maybe it's the prerequisite for them to bring up the debt ceiling vote.

You know, the McConnell proposal allows them to vote against the debt ceiling and still have it pass so they can have it all ways, right?

KING: The McConnell proposal would give the president the authority.

BORGER: Right. KING: And a lot of conservatives don't like it because they don't get guaranteed spending cuts. And then McConnell plus would say, we'll add a commission. They come up with cuts. Congress has to vote up-or-down by the end of the year.

So, part of the reason -- the president was relatively nice today, he said, sure, have your votes, and then we need to get back to talking turkey, as he put it.

Is part of that because they think we're going to get a deal or is part of that because they don't want to poke the conservatives anymore?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: They thin k they're going to get a deal. They also know that they have to get something done. And they think that this vote tonight is sort of putting everything aside and they finally have to start negotiating with the Republican House leaders.

And it's time now for the House leaders to say, you know what, these conservatives in our midst aren't going to move and we have to decide as a leadership how far we're willing to walk out on the plank and lose a little bit of face with our Republican base, how far are we willing to go on the compromise and win over some Democratic votes.

They know they're going to have to push the House Republicans to take some risks, those leaders and they want to make nice with them at this moment.

BORGER: You know, I think the White House is also convinced that public opinion is moving in their direction.

YELLIN: It is.

BORGER: And the president has been out there more in the last couple of weeks that I can ever recall and it seems to be doing him some good. So --

KING: Kate, during the week, one of the narratives was, you know, Speaker Boehner and Majority Leader Cantor, his number two, had some differences. They have tried in public. We know there's a rivalry between them. Welcome to politics.

But they've tried in public to say, no, we're pretty much on the same page. Is that case tomorrow when the president maybe starts working his back channels through the speaker saying, "We've got a deal"?

BOLDUAN: And that's a good question and it's a very good question what it's going to look like publicly. I mean, let's be honest -- they're going to come out and say they are on the same page because they don't want a distraction from what their message is at this point.

But Jessica raises a really good point. Going forward, after this vote, the big question is: where do you want to go now, House Republicans? You know, you have the majority. Where do you want to go now? Because this was the big vote leading into what we should be -- you know, the clock ticking down to the compromise.

So, that's a big question leading into tomorrow, and the kind of the answer is, they're going to need some Democrats here.

KING: And we'll watch it. And if you think at home this is Washington gobbledygook, it matters to you. It could be higher interest rates, could be tougher getting credit, could be something on your mortgage, could be hurting the economy.

We'll track the vote in the House. We'll be back tomorrow night right here. Hope to see you then.

"IN THE ARENA" starts right now.