a democratic source telling it differently, saying the president challenged mr. cantor for what the source called" talk out of both sides of his mouth". they'll be back at the table tomorrow. the stakes could not be higher. moody's today put america's credit rating on review hinting at a possible rating drop. ben bernanke says defaulting on the debt would be catastrophic. jessica yellin is at the white house with what her sources are telling her. what have you heard from these differing accounts? >> reporter: democratic sources say that bottom line is that the president was schooling the crowd in the room when eric cantor changed his position. all along eric cantor as you have said, the house majority leader, had endorsed doing a deal that did reduce the deficit and that had some of these various components we talked about. but when he supported the short-term deal which as you've pointed out the president has made clear he opposes, the president sort of told the entire group that this is exactly what americans think of as washington at its worst, washington catering to the base, catering to politics, putting their own political future ahead of doing important things and taking on the big issues. and that he called on the group to take on this challenge and then called the meeting to an end. no matter how you read that, it's clearly an increase in tensions on day three of these debt negotiations with no sign of real progress with the clock ticking. and i do have it confirmed that this president really did say with my presidency at stake i will not yield on this issue. >> you know, there have been some reports and i think the "wall street journal" did an editorial about this suggesting this has all been kind of part of president obama's plan, that he's been very kind of calculating in the way he's gone about these talks, intimating or letting the republicans talk about spending cuts and then only later on really being aggressive and pressing for revenue razors, for tax increases down the road. how does the white house respond to that? is there any truth to that from the white house perspective? >> reporter: if this were part of a plan he'd have a deal by now. no president wants this kind of debt threat hanging over their head. he cannot benefit from having any kind of default at this point in his presidency. so you could accuse the white house of playing tactics instead of having a strategy. you could accuse the president of going out and using this for his own political advantage to the extent he can. but laying this entire scenario out as some sort of grand plan is nothing that anyone would do, i'd argue, for their own political advantage. the problem is at this point what we see is instead of progress, each side sort of digging in and taking a step backward at the very point when they need to be making -- locking in deals and moving forward. >> and no sign of that. jessica yellin, appreciate the reporting tonight on a fast-moving story. joining us now is former mccain and palin advisor -- a novelist, the author of "18 acres". senior political analyst david gergen is with us as well, on the phone democratic straejt paul vegala. paul, what do you make of what happened in this meeting and signs of potential progress? >> what we thought was no drama obama sounds like a pretty dramatic meeting. i do think the only way you can get to a deal is if both sides want to deal. and the only way you get that is if the republicans believe that president would walk away if they don't meet him halfway or at least part of the way. it does seem to me untenable for one side to say, well, we'll even put social security on the table which apparently what the president has done and the other side says we won't put a nickel of revenue even from corporate loopholes on the table. it does seem like it's a pretty unfair negotiating strategy for the republicans, and it looks like maybe it's blown up in their face. >> david gergen, your take on this and especially on this day where moody's is talking about reviewing a potential downgrade of our credit rating. >> anderson, i think the fact that meeting broke up in the way it did is extremely unfortunate, not only for trying to solve the debt ceiling but trying to solve the underlying problem of the mounting debts, the debt crisis that we're approaching. and i don't want to aportion blame here. i don't agree with paul's analysis but i don't want to get into the blame sort of situation. what it does seem to me is this. that the president and the leaders all have to come out of their corners and arrive at some sort of deal in the immediate future that averts a default on the national debt. that's the single most important thing. and whatever that deal is. the president says he does not want a short-term deal. i know personally that he feels very intensely about that. but his own top economic advisor, larry summers, wrote today in his financial times, he's got to get any deal is better than no deal. we have to get past the default crisis and then we can deal. unfortunately we have to postpone this but then we can deal with the underlying issues of the mounting debts. >> nicole, you were in the bush white house where the debt ceiling was raised a number of times. now that you're in new york and you've got some distance on d.c. how do you see this? >> i'm glad i write fiction now. but look, i don't know that we've ever seen a negotiation go from such highs where just days ago they were talking about a historic deal that would have a generational benefit and impact to bullying each other and cramming peas down each other's throat, pushing back from tables and digging in. so i think this deteriorated much more dramatically and much more quickly than anything else. and i think when you get out of washington, i think it's a cumulative thing with the public. the public is so beyond disgust with the leaders in washington. and i think even republican voices like shawn hannity understand and are arguing in favor of making sure that country does not default on its debt. but i think what republicans feel like they've contributed if you will or what their part of the compromise was agreeing to let this country get deeper into debt. >> but from a republican perspective, nicole, where do you see the possibility for compromise? is compromise possible? i mean, if republicans are saying the line in the sand is absolutely no tax raising, how do you increase revenues? >> well, i think republicans are against raising taxes for some pretty good reasons. one, we're not an undertaxed country. two, raising taxes doesn't actually get at the cause of our deficits. our deficits are in part as large as they are because we haven't had any growth in years now. so i think republicans will make the case, and it will play out if not in washington, then in the presidential campaign in the next year. this debate about how to grow our way out of these deficits. but look, what's at issue at the moment is getting a deal done. and i think as unfortunately so often happens in washington, something small, something temporary and something that both sides are unhappy about is probably what will ensue. >> paul, is a compromise possible? >> well, it's essential. it's absolutely necessary. but you do have what i think the sense planners would call asymmetrical warfare. there's nothing more central to a democrat than protecting entitlements like social security and medicare. the president has apparently put them on the table the. there's no big trump card he has as a democrat to say i'm a democratic president. >> but the republicans have to come with some taxes. >> paul, republicans have been saying in this meeting to the president that he hasn't been specific about what spending cuts he's talking about. >> i'm not in the room but i think we know what social security is, we know what medicare is and we know what no is. the republicans' position is untenable. we have both a spending problem and a revenue problem. it's obvious. several tax revenues now are only 15% of gdp. federal spending is 25% of gdp. both of those lines need to come to meet. you can't do it with spending alone nor with taxes alone. it's actually a very obvious deal. it's just that one side won't give an inch. and that's the republicans. >> david? >> well, that's one way of looking at it. i must say, look, there's some very strong ideological differences on this. the republicans are committed to lean government. they do want a smaller government. they want it much less than 25%. they believe the democrats are addicted to bigger government, and they believe a lot of what's being offered in these talks are gimmicks or are illusory in terms of budget cuts. that's why they're saying let's put, mr. president, put your budget out on the front of the public. let us see what you're proposing. you've never really propose add serious budget. we have. we proposed o'brien budget. where's yours. but that's not the big point right now. the critical point is as moody's is warning, as ben bernanke warned today and congress, the critical point is this country must not go into default on august 2nd. and they need to reach some minimal agreement to avoid that. that should not be hard to do. now, what they can get beyond that is really important, but it's not as urgently necessary as making sure we get this done. then we can move to the more moderate term crisis or the moderate crisis, moderate term crisis which is the huge deficits. we do have to solve those, but not before august 2nd. we have to get a deal to avoid a catastrophe on august 2nd. >> so nicole, for republicans tomorrow, do they need to change strategy, given what happened today? or what do they do going into this meeting tomorrow? >> look, it was barack obama who stood in the rose garden just a few months ago and talked about -- when he signed into law the extension of the bush tax cuts, he seemed to understand that raising taxes is not the right thing to do at this time for our country. so i think republicans, the difference between putting social security reform on the table and tax increases on the table is that social security and our entitlement programs are on a road to disappear. they're not going to be there if we don't do something about them. taxes don't have to increase. most people believe that we pay plenty of taxes, that we are not an undertaxed country. so they're being treated with a moral e equivalent lens because there's an intense negotiation taking place and our legislators have guns to their head to meet this deadline. but i don't think when the dust settles that they'll be treated as comparable items. and i think that where the tea party, the establishment republicans and the independent voters of america are the most closely aligned is in their belief that the size and the costs of the federal government is way too much. >> nicole wallace, david gergen, paul begala,thank you very much. let us know what you think. we're on facebook. on twitter @ anderson cooper up next, a fascinating story, a man who claims to be a former islamic terrorist traveling the country advising law enforcement about terror. there's one catch. cnn's found no evidence he was ever actually a terrorist. and actually there's another catch as well. your tax dollars, our tax dollars, are going into his pocket. find out what happened. our drew griffin confronted him with questioning and later, very close call for cnn's ben wedeman and his crew in libya. about as close as you can get to being caught in the middle of a fire fight. take a look. >> wait. >> wait. wait! >> wait wait wait! >> wait until you see what happens next. this goes on. we'll talk with ben. he was all right and his crew was already all right the at end of it but incredibly tense moments that will get your heart to 1206789 we'll talk to ben and show you the rest of that video. first let's check in with isha sesay. >> reporter: new developments in the halle berry case. her alleged stalker had a court date today. we'll tell you how he pleaded and what the court had to say. that and more when 360 continues. members of the american postal worker's union handle more than 165 billion letters and packages a year. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage. brought to you by the men and women of the american postal worker's union. [ tires squeal ] an accident doesn't have to slow you down. with better car replacement, available only from liberty mutual insurance, if your car's totaled, we give you the money to buy a car that's one model-year newer with 15,000 fewer miles on it. there's no other auto insurance product like it. better car replacement, available only from liberty mutual. it's a better policy that gets you a better car. call... or visit one of our local offices today, and we'll provide the coverage you need at the right price. liberty mutual auto insurance -- responsibility. what's your policy? a fascinating report about your tax dollars going into the pocket of a man who claims to have unique insight on terrorism because he used to be a terrorist. walid shabat claims to have bombed an israeli bank, attacked israeli soldiers and grew up a devout moslem who hated jews. now converting to christianity, he travels heck turg police about the dangers of is islam and gets paid for it. his book like "god's war on terror". "say the tan's foot steps" and why i left jihad". we found him speaking at the south dakota conference on homeland security. he was addressing 300 police officers and first responders. his message was american moslems need to be profiled. all islamic organizations from doctors to engineers to students ought to be investigated and mosques in the u.s. should be considered terror centers, not houses of worship. he says terrorism and islam are inseparable. >> you want them to say that islam was hijacked, it was not hijacked. islam is islam is islam. >> well, full disclosure, at one time or another cnn and other networks have turned to shabat for his perspective on the war in terror, an apparent look from the inside. but keeping them honest tonight, we're discovering has his story doesn't seem to add up. cnn's drew griffin of cnn's special investigations unit. >> i think we are at war with islamic fundamentalism and islamism which stems from islam. no historian can deny that islamists basically invaded kristendom. >> walid shubat's mess eningage is the epitome of good versus evil. he has a pedigree that makes him an expert. islamic terrorist turned ultraconservative christian. a u.s. citizen because his mother is american, he is a darling on the terror circuit, the church and university circuits, and yes, he believes the war on terror is a holy war. he pore trace himself as a man converted and on a mission. once a jew-hating, bomb-throwing terrorist, now a devout christian convert warning the world islam is out to destroy you ♪ >> that's how you recite the koran. i know the koran inside out. english. if you meet the unbelievers, then submit off their next. what part of "submit off their next" do you americans don't understand? >> his message before a largely positive crowd of cops and emergency responders at this south dakota homeland security conference, trust no moslem, especially those who organize. >> know your enemy! know your enemy! all islamist organizations in america should be the number one enemy. all of them. islamist organizations. islamists in north america should be focused on. >> reporter: he is being paid $5,000 plus expenses to speak here with your tax dollars. he was also given a rapid city police guard during his time in the city. a nice day's work. and judging by his web site where he highlights more than three dozen speaking engagements, shubat gets a lot of work. being a terrorism expert has become a cottage industry since 9/11. the department of homeland security has spent nearly $40 million on counterterrorism training just since 2006. dhs doesn't keep records on how much he's spent just on speakers. but some of the so-called experts who go around the country teaching and in some case preaching about terrorism and the dangers of islam are not quite what they seem. people, it turns out, like walid shabut. >> what was the purpose of your talk this morning to these cops and emergency responders here in south dakota? >> well, being an ex-terrorist myself is to understand the mindset of the terrorist number one. >> reporter: an ex-terrorist. it's his claim to fame. a terrorist, a plo member, who bombed a branch of an israeli bank in bethlehem square, throwing a fire bomb on the bank's roof. the problem with the story, with a lot of shubat's stories, there's no evidence for them. and despite cnn's many requests, neither shubat's nor his business partner have provided us with any. >> bombings in bethlehem square, you specifically said you threw. >> the bank was in bethlehem square. >> you threw explosives on top of that bank. >> yes, i did. >> no record. >> reporter: cnn's jerusalem bureau went to great lengths trying to verify shubat's's story, finding the general location with a branch of bank l,mi once stood but not finding anyone who could remember a bombing. we contacted the bank headquarters in tel aviv, asking officials to search records. no records found. and israeli police found no record anyone ever threw a bomb at the branch of the bank. >> why would the bank not have a record? why would the israeli police not have a record? >> the israeli police not have a record? i don't know. i don't know where you checked, dates, all these things. >> reporter: there's another part of his story that doesn't check out. shubat's says he was arrested and spent two weeks in an israeli prison. >> there's no record of you being in prison. i think there would be at least an arrest record. they held you for two weeks. did the united states know you were in prison as a u.s. citizen? >> you go to the prison and exact the records. the records are there. >> would you be willing to do so? >> reporter: we did. and the israeli detention center could find no record of detaining anyone with the name walid shubat's. >> you obviously can see why people are critical of your claims. there's a whole lot of gaps in your story. >> there's no gaps. >> we don't have a bank bombing. >> and we don't have a terrorist. because it turns out walid shubat's even on his own admission was never charged. >> i was in prison four weeks. >> was there a charge? >> no. i was a u.s. citizen, remember? i was born by an american mother. the other conspirators in that ended up in jail. i ended up being released. >> reporter: there's another problem. his family. in the neighborhood where walid shoebat grew up, relatives say he was just a regular kid. and dyud shubat's says he is walid's fourth cousin goes even fumplt>> translator: there were only two banks in bethlehem district, lumi and -- walid never had any connection with those two banks. not a close or a distant connection. i tell you this is out of experience. i am one of the people who are considered a responsible man in bethlehem. i have never heard anything about walid being an mujahid or a terrorist. he claims this for his own personal reasons. >> you're saying he claimed this for his own personal reasons. what personal reasons? >> reporter: there's a big person reason here, it's called money. anderson, classic investigative reporting you follow the money. his background, how walid shoebat is now making that money is about as mysterious as his past. >> the walid shoebat foundation, is that a charity? >> it's part of the ffmu. >> what does ffmu do? >> basically we're in information and