money and influence. how deep does that run? take a look. the television empire, fox with its news programming is part of his world. 20th century fox was huge, hit films. in publishing, "new york post," "wall street journal," what he has in print, along with harpercollins publishers limited, books like sarah palins, all part of the empire of rupert murdoch. we will dig much deeper into the rupert scandal and one of the senators calling for an investigation. first, one of the other stories we're following tonight. the other barack obama. a new book reveals astonishing information about the father of the president. it opens a new window into the heart and mind of his son, and -- who is thaddeus? a conservative who plays an electric guitar, quotes l.e.d. zeppelin on the house floor and running for president in a crowded field. can he rock out? then, think the debt ceiling debate is a joke, so does paul. >> you're speaking like a conspiracy theorist. >> it's not conspiracy, reality today. >> with both sides talking at each other, maybe it takes a comedie comediene -- come median to get serious. we start with breaking news, showdown or meltdown, we're not sure, at the white house in the middle of those talks. president obama walk out of the debt talks with house republicans saying he has reached his limit. it happened not long ago. cnn's chief white house correspondent joins me now from washington for the latest on the thoughts on tonight's meeting. jessica yellin, tell us what's going on there. >> reporter: that's at least how republicans are accounting today for these debt talks, certainly a political tit for tat going on in these tense negotiations. after today's meetings, both sides came out telling very different stories. what we do know is according to republicans, president obama in the meeting ended it abruptly after lecturing them and then walking out. democratic officials, i'm told by democratic officials a very different story, president obama got frustrated when republicans changed their position in these negotiations. at the very end of the meeting after hearing the republicans now endorsing a short term deal, the very kind of deal president obama has said he will not accept c the kind of deal he said he would veto, he gave a speech. democratic officials say he told the group that this is this kind of political posturing that americans have a great distaste for, the kind of thing they always expect from washington, where politicians take political positions and cater to their bases rather than take hard stands on tough issues. that is when the meeting broke up. no matter which side of the story you believe, tom, the one truth we know is that it is certainly the most tension we've heard come from any of these meetings to date. the bottom line is republicans are now agreeing openly, house republicans, at least, that they do like this idea of a short term debt extension, which requires multiple votes between now and next year's election, which makes it quite a political issue and changes the entire dynamic of these negotiations and, tom, i'll tell you, the president again today repeated he would veto any kind of short term deal, which means if that's what house republicans are pushing for, there is no deal. >> jessica, what about this explosive moment. does this seem to be true where the president in particular confronted republican eric cantor? >> reporter: what i'm told about that moment, a bit of rorschach test, everybody sees it in a different light, this is where the president said to the group, everybody is -- this confirms the worst suspicion everyone has of washington. that the president was frustrated, eric cantor had now endorsed the short term deal idea and was frustrated he had changed off of his prior position where he wanted to go for a real deficit reduction and you know the words of democratic officials into this short term idea. tom, i should point out that, you know, some republicans would argue at this late stage, that's all some people think can get done. so there's different ways to look at it. if i can dial out for a minute and give you a big picture perspective, despite this tit for tat and all this political spinning going on, there is still a meeting scheduled at the white house tomorrow, as far as we san antonknow, all sides are planning to come here and they will be discussing detailed spending cuts and for the first time, this discussion of tax changes. will there be revenue on the table, a major controversial issue. despite all this, there could still be potential progress towards one of these deals tomorrow. we'll see. >> you answered my last question. we'll check back with you later on. they might want to start with decaf tomorrow. >> let's go to our top story now. this is an important thing for all of us to be aware of. this in-depth look at the rupert murdoch scandal as it begins to reverberate in america. we thought it might and indeed it has. murdoch withdrew his bid for bskyb amid the most disturbing allegations that emerged. according to a british paper, journalists from the news of the world approached a new york private investigator to buy phone records of victims from the 9/11 attacks, families of the victims are outraged by these allegations and four senators have now requested a justice department investigation of murdoch's company. i spoke with one of them. senator frank lautenberg, moments ago. senator lautenberg, thanks for joining me here. let me start with the most important question in all this. do you have reason to believe some sort of criminal activity has taken place in this country connected to rupert murdoch's enterprises? >> the one thing i know, not that i just believe, that is an american corporation cannot use bribery. it's a felony. it's against the law and should not be used. >> at this point, you're not talking about these things happening in this country that you know of, although you're curious about that, you're focusing on what's happening over there and the possible repercussions here. what are the possible repercussions. let's say we did find out this? what could happen? >> they could be fined. there could be severe punishment if the corporation has directed people to violate the law. it also, since we've heard that hacking has been taking place and directed at families who suffered as a result of 9/11, loss of a loved one or injury to a loved one. we want to make sure that this practice doesn't escape. we don't know that absolutely, that it has taken place, but it is alleged or suggested that it's taken place. we don't want to permit that. >> you and the other folks who have -- in elected office called for investigation into this right now are all democrats. fox news is widely seen as being very pro republican. you know full well many people are going to say, this is just politics, you guys are going after them because they're a republican vehicle and they're in trouble right now. >> i think it's fair to say that i view it as a responsibility to investigate. it has nothing to do with politics, i'll tell you that. they have no right to break the law if they're an american corporation. it wouldn't matter if they were selling tires or selling news or what have you. those are the rules, those are the laws and we have to obey them. >> one thing i have to ask you about in all of this, one of the issues over in britain was that the politicians were very much involved in this, in that they were afraid of making the media very angry. do you fear any of that here? the simple truth you talk about politicians criticizing the media, you're criticizing people who buy ink by the barrel. >> i'm accustomed to being in this boxing ring here. i served three years in the army. i'm not afraid of repercussions. i know that i'm on the right side of the question. it's going to be asked. i don't think about repercussions. if i think i'm on the right track, that's where i'm going to stay. >> how soon do you want this to move and how soon do you expect it to move, if at all, in this investigation? >> asap. it has to be done in an orderly fashion. i would urge hayes from the justice department because this now lingers over us in a very unpleasant unfair way. >> senator lautenberg, thanks for joining us tonight. >> glad to be here, thanks. >> this, as you can tell is getting ugly here, getting uglier over there. prime minister david cameron was grilled in parliament why he hired a former murdoch editor, a man now under arrest in this hacking scandal despite warnings not to. watch this amazing bit of political theater. >> he just doesn't get it! he just doesn't get it. i say this to the prime minister. he was warned by the deputy prime minister about hiring andy colson. he was warned by lord ashdown about hiring andy colson. he has now admitted in the house of commons today that this is chief of staff was given complete evidence, which contradicted andy colson's previous accounts. the prime minister must now publish the fullest account of all the information provided and what he did and why those warnings went unheeded. >> the decision to employ a tabloid editor meant there were a number of people who said this was not a good idea, particularly when that tabloid editor had been at the "news of the world" when bad things happened. what i did was accept assurances given made to a select committee of the police and law. if i was lied to, that would be a matter of deep regret. i can't be clear about that. we must make sure we ajudge people innocent until proven guilty. >> can the prime minister assure that all activity will be investigated now and this will include the criminal conspiracy between the highest levels in that last government with parts of the murdoch empire including bribing a bank account of lord ashcroft to undermine him and his positions as laid out in dirty politics, dirty times? >> in public life we all are subject to huge amounts of extra scrutiny. that's fair. it's not fair when laws are broken. we've all suffered from this and the fact is we've all been too silent about it. that is part of the problem. your bins are gone through by some media organization but you hold back from dealing with it because you want good relations with the media. we need honesty on this issue on a cross party basis to take on this problem. >> you can see what an earthquake this is causing in their government. that phrase, dirty politics, dirty times. unbelievable. let's consider what this means about the all too cozy relationship between the british government and british press. oliver campbell was the former press secretary for tony blair. i spoke with him today from london. >> thanks for joining us. ire contention is this too cozy relationship between the media and government has been around quite some time and a lot of people knew about it? >> yes. it's not in dispute at all. you go back to margaret thatcher's time as prime minister. i think i'm right in recording she gave five knighthoods to editors who supported her. when we came into office in 1997, that was something we put a stop to by saying no serving entity should get an honor from the queen. what i said in a piece i wrote in the "financial times" the other day, i think there were points we compromised principles we should have adopted to press regulation in this country has been a complete joke against the continuing support we were getting from many sections of the media. i wish that we had done more. >> how do you hit the proper balance here, you're talking about press regulation, you know over here in america, people immediately perk up when they hear that because they say we don't like the media much but we've never liked restrictions on the press. how do you do that? >> i accept that and i instinctively despite the criminality and venamilty and amorality we have seen in recent days, i instinctively am still a believer in self-regulation. however, i'm not sure the generation running the media in britain at the moment can be trusted with it. it's not just about media international exposed for total rottenness, one of the most powerful groups is the mail group. i think they're just as bad and in some ways even worse although let me say the criminality element has not been, as it were, proven. i do think the riots since the '80s, the british press drinking in the last chance saloon. they've been drinking in there heavily ever since. i do hope parliament, once this inquiry is under way and once parliament debates any proposals that come from it, i hope we do start from the standpoint of thinking self-regulation is prefable. i think the public are beginning to wonder whether the people who run our newspapers are capable of self-regulation. the other thing to point out here, we have the broadcast media regulated here. i think most of the broadcast media think the system just about works. >> one of your real concerns here is the way it's working now. i think this is going to resonate with a lot of people here, is such that the media makes it almost impossible for the government to govern because they're so worried about public opinion and then that becomes a convenient excuse for government not doing difficult things because after all we'll get crucified in the media. i reached a point. i worked from 1994 to 2003 and went back for the 2000 election and 2010 election as well. i reached a point. this is myself now, kind of the end of the last millennium really, it didn't really matter what they said about you, what you got to do in government is actually try to do the right thing, make the big long term strategic decisions and try to see them through. those politicians around the world who try to manage their policy making to suit what they think is going to be a media reaction, i think is a complete waste of time. i think what this has done, i hope, is liberated the political class from feeling they have to worry too much about what the media say about them. they should worry about the decisions they take, strategic course they set and they should try to see it through. >> when you look back on the events of that time, do you think you should have been louder and more forceful in saying, this is a poisonous dangerous relationship for the governance of this country? >> well, i probably should. you have to remember, i was -- i was a spokesman. i wasn't an elected politician who went out there and made big speeches and so forth. it's really interesting to watch the british press at the moment. the line they're running on us at the moment, you were so close to murdoch, the line they're running at the time we showed the media complete contempt. they want to have it any way that suits the prevailing mood at the moment. i can remember used to have discussions with president clinton and his team and also with george bush and his team what i think elected politicians around the world now see is a real problem of a many conation of a driving culture of negativity, which is most dominant, i think, in our newspapers and if you like, the frenzy driven reality of news reporting 24-7 on a proliferation of channels and online revolution and so forth is making it more difficult to govern. i think the media has to accept some responsibility, not just for getting viewers, not just for selling papers but for the role it plays within that. i hope we can have a sensible debate about that where the politicians have said they have to change their ways but the journalists accept they have to change, too. >> thanks so much for joining us. >> thank you. this may all sound like something that's happening over there. you can bet your house we're getting more of it coming here to debate we will stay with on this show. coming up, washington as we said at the top is playing hot potato with the debt ceiling. you've got it, no, you've got it, back and forth they go. robert reich sice says enough a. we'll see how he might pull it off. goes into every one. like variable valve timing and turbocharging, active front grille shutters that close at high speeds, and friction reducing -- oh, man, that is complicated. how about this -- cruze eco offers 42 miles per gallon. cool? 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(sigh) whaa. tasty. that's, that's a complete dramatization of course, but you get my point. vo: geico 15 minutes could save you 15% or more on car insurance. tonight's tension at the white house with republicans and the president apparently storming away from the bargaining table comes as there is new pressure on both sides to reach a new deal. the credit agency, moody, says it's thinking of down grading the u.s. credit rating, meaning a possibility even if congress raises the debt ceiling, they may not do it in time. joining me to talk about it labor secretary under former president clinton, robert reich. why does it matter to the government if the credit record is downgraded and why does it matter to me? >> it matters to everybody else for a simple reason, if the credit rating of the united states is downgraded, that means all the borrowing the united states needs to do and wants to do in the future is going to cost more. everybody who lends money to the government is going to demand higher interest rates. those higher interest rates with make the budget deficit even worse. the down grading is very very serious. a potential down grading is very serious. what this amounts to, i'm going beyond my seven seconds, i want to put the politics into this, what this amounts to is essentially more political pressure on democrats and republicans to come up with a deal. >> you've actually opened the door to the next question here. when you look at what's going on right now, you've written a column that has suggested is one of the problems is politically everyone wants to move this down the road and not deal with it because they have painted themselves into corners they can't get out of but practically, we shouldn't let that happen. explain that. >> it's a giant game of chicken. obviously, republicans are saying if you do not go along with our plan, and we refuse to raise taxes on the wealthy, we are going to vote against raising the debt limit. democrats are saying you have to raise taxes, particularly on the wealthy, with regard to the budget agreement or there's no deal at all. both sides in washington right now are at complete loggerheads. in washington, it's a very strange place. i've worked there for many years, i can tell you, it's its own planet. in washington, if you have that kind of situation, the only way out that provides kind of face-saving device for both sides is someth