way. today's cry for outrage go to democrats. of maryland who here's a surprise, doesn't like the proposed cuts in social programs. >> once again, the radical right is more worried about protecting their next election than protecting the greatest generation or investing in the next generation. what a sham. what a scam. i'd be tempted to just blow it off if it were not so cruel, stupid, and dangerous. >> and now tonight after all of these accusations and whining, we're hearing the whole mess may end not with a bang but with a whimper. you absolutely will not believe it. i'll talk to two of the smartest people i know in a moment. but first a look at the other stories tonight. fireworks in the house of commons. first it was the murdochs, today it was britain's prime minister. david cameron faced his critics but will he keep his address? and in somalia, millions of children facing starvation. will help reach them in time? a look at the face of famine. then after months of name calling and finger pointing, where's the deal? no, not the debt ceiling, the other deal americans care about. are you ready for some football? we have a lot going on tonight. emergency meetings at the white house appear to have fallen flat. the president today met separately with democratic and republican leaders, part of the seemingly endless effort to raise the debt ceiling before the clock runs out. the republican leadership left the white house a short time ago and our own white house correspondent is there. jessica, what on earth is going on? >> what's going on is meetings, process, discussion. so far no action. we are now less than two days away from the white house's own self-imposed time for a deal. and now they are saying it's time to stop pushing for a major deficit reduction package and find the easiest path forward to raise the ceiling and push for the rest another time. >> isn't this the very thing that just a few days ago depending on which side you were talking to says that's not what we need to do. this seems to be the thing they said we can't do. >> it's still the case that there are not enough votes to simply raise the debt ceiling. so there is a political reality that in the house of representatives it is probably likely -- the thinking is it is likely you may need something else to be added in. the political reality is you have to negotiate a package that does something like add in spending cuts. that's why they're here talking about it. there's also the political truth that the white house is in the war over public perception losing less. because they keep talking about doing the big deal. so the public is blaming the white house less and blaming republicans and congress. but that doesn't get anybody anywhere. they still have to figure out a package. we're no closer at this moment. >> are all the problems we had last week, week before, yesterday, four hours ago, we still have all those problems? we're just talking about another maneuver and push it down to road. >> what's fascinating is i continue to hear these outsiders who don't work in washington describe this as washington as it works. there's always a mess in washington and they come together at the end. it's a normal washington process. and i'm talking to a lot of old washington hands who have been here for decades and they are calling this one as abnormal washington process. the difference with this one is that there are these new freshmen in the house of representatives that don't care about getting re-elected. you cannot sweeten this deal. you cannot win them over by adding something to the vote, really. and they don't know how this is going to end in the end. it's a bit of a cliff-hanger for everybody. there's just a lot of baited breath hoping that with the clock ticking they'll find the votes at the last minute. but that's part of the reason here. >> abnormal for washington, you said a mouthful there. thank you. it didn't take long to reach this point of course. yesterday's thoughts for a breakthrough were dashed on this party lines and so we're still waiting. even a quick walk down memory lane, shows bumps ahead. remember the grand bargain? well, that cannot pass the house. last night house republicans passed their cut cap and balance bill but that cannot pass the senate. and then there's the gang of six solution as it's called. so what if the clock ticks down and we still don't have a deal? david durgan joins me now from san francisco. and from berkeley, california, robert rishe. david talk to me about this gang of six solution. hours ago people were saying maybe this is the key. now people are acting it is truly yesterday's news. why? >> well, the fizz has gone out of that bottle, i'm afraid. it remains a three or four page outline. when people get into it to explore the details, they came up with very different interpretations of it. and opposition has sprung up from both sides. labor unions have been attacking it but so has the hard right. the house republicans came out with their report last night saying it's going to raise taxes by $2 trillion. not what democrats believe but that's what they're arguing. of course that tanks it on the right. here's where i think we are. the danger now is that if the gang of six is out, the grand bargain is out. we're down to the reed mcconnell plan. i worry a lot that we're on a boat floating somewhere above niagra falls and we're getting closer to the edge. i think prospects have risen to over 50% that we could have a default. >> do you agree? >> i think david is being a little bit dire. we have a little bit to go. we seem to have people in congress who knows that the cost of no deal on raising the debt ceiling would be apocalyptic in terms of the economy and interest rates that what soar. the fact creditors would not get paid. there could be worldwide repercussions. i think you are going to see the light, either side. jessica reported before on this group of highly rigid republicans, tea party based, who were saying we only came to washington for one reason and one reason only. i think the real question is where are they going to go? are they going to see the light? and how many votes do they represent? >> that is a critical question, robert. david, address that for a minute here. because this does seem -- when jessica talks about abnormal for washington, i've heard people in d.c. say the same thing. they say we have this group of newcomers who say very directly i don't care if i'm re-elected. i was elected to do this one thing and i'll go down in flames doing it before i back away. how much does that effect this process? >> it effects it a lot. but the truth is this is what they were sent to washington by angry voters. the tea party did not start from the top. it was a grass roots movement that sent people to washington with this in mind. understand this is a very, very divided country still. i would like to believe that bob reich is right. i've been in the optimist camp for some time. i'm not sure the votes are there in the house for mcconnell. the answer, if there is going to be an answer, is to add spending cuts. a significant amount. maybe up to a trillion dollars, maybe a trillion and a half. if they add those cuts with no tax increases, can you get the democrats to vote for it? and would you get enough republicans to go along with the democrats to get a majority? i'm not sure the votes are there at this hour. >> one of the things i'm concerned about here is when i watch all of these plans, they're all coming out on this half-formed nature. i called it adjustable rate legislation. that's the problem. nobody seems to want to speak up because they're not sure what deal they're possibly agreeing to. is that also part of this? people aren't specifically saying this is what i will do. >> that's part of it, i think. you've got two sides that are irreconcilable. you are getting out of that. if anybody wants an increase, you're going to have a theater of the absurd in which you have so many procedural votes and faints this way and that way that republicans can say to their constituents i voted against lifting the debt ceiling. i voted against raising taxes. and democrats can say to their constituencies i voted to save medicare and social security and to be responsible in the budget. somehow everybody can say what they need to say to their own constituencies and the can can get kicked doup the road through the election of 2012 and the debt ceiling could be raised. but that dance, nobody knows what it will entail. i think it will partly be some sort of set of symbolic, maybe halfway real but mostly symbolic gestures. >> one more quick question, david. are there going to be any winners in this? i cannot see how anybody in washington really comes out better in this. >> at this point, no big winners. there's no question that jessica reported of the game. if there's any winner so far it's been the president. or she said he's not getting blamed as much as republicans are being blamed. at the end of the day, if they do have simply a bridge, they don't really solve the underlying problems, there is a strong risk -- and bob can speak to this better than i can -- that moody's if you come up with a small deal, they'll downgrade our credit rating. if they do that, i think everybody in washington gets hurt. if all of this leads to a whimp whimper, i think that's a defeat to everybody in washington. >> interest rates -- >> something about the -- i know that this has been raised before, but you touched in your blog today about the death of financial reform. you're concerned about in the midst of all this, this is all going on. this notion that really all this is not working. tell us about that before we go. >> tomorrow is the first year birthday of the enactment of don frank. that completely revolutionized wall street so we would see no repeat of the debacle a few years ago. unfortunately that act has been defamed. it's one of the first times i heard of a first birthday where the child has lost the teeth before he even got the teeth. as a result, the problem there quite seriously the problem is that right now there is no real change on wall street. the lobbyists for wall street have succeeded in doing what they set out to do initially and that is to make sure there were loopholes big enough to drive their ferraris through. and there are. >> unbelievable. >> tom, i wish that the president had fought for elizabeth warren. i have come to know, like, and respect her. that would have been a fight worth having. >> i'm afraid that discussion passes by. but it's a shame we haven't talked more about her. i wish we had more time to talk tonight. always great to have you with us. i'm sure we'll talk to you again soon. coming up, the murdoch phone hacking scandal reached the very top today. prime minister david cameron faced the music. it was great theater for the audience, anyway. but how did he do? 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[ male announcer ] think, type, go. with just type. only on the new hp touchpad with webos. energy is being produced to power our lives. while energy developement comes with some risk, north america's natural gas producers are committed to safely and responsibly providing decades of cleaner burning energy for our country, drilling thousands of feet below fresh water sources within self contained well systems and using state of the art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment we are america's natural gas. our in depth report tonight, what else? the murdoch hacking scandal trend els on. david cameron was pummelled in parliament today. cameron as you may recall hired a top murdoch man to be his communications director. today he indicated he wouldn't have done that had he known what was going on at the news of the world. this is emerging as the choice of this scandal. delay action and in effect say don't blame me. the question is will it work? we're joined by nicolas wopshat has an inside take on the key players. thanks for being here. let's crank through the crowd here. rupert and james murdoch, the father and son team in this. after their testimony yesterday no matter what we thought of it, news corp. stock rose almost 60%. did they dodge a bullet? >> not necessarily. a number of reasons stock may go up. one may be that you think rupert looked so unwell, so old that even a page said age of the issue. actually the cooperate governance may get better. >> he didn't look very strong there. there were these weird contractions that happened. in one breath he said i couldn't know what was going on with me employees. then someone else said could it happen 9/11? then he said no that couldn't. how did you know? >> we didn't know bin laden was there or we knew and didn't do anything about it. you can't have it both ways. >> exactly. let's turn to david cameron. is the worst behind him? >> certainly not. because we've got a whole year's worth of judicial inquiry. all of which will keep this alive. then we've also got the police investigation. 8,000 people were hacked. all of those are -- >> we've only heard about 100. >> 170 have been hacked so far. we don't know yet. so this is a running sore. rather like rupert murdoch, someone who didn't know what was going on. >> the people at the top always say i want all the credit for everything that goes right in my company, when something goes wrong i don't know what the little people were doing. >> imagine if the president of the united states hired a disgraced newspaper tabloid editor to be his press spokesman. that's what he did. that shows someone who's got very poor judgment when it comes to personalities. which makes you wonder all the cabinet people he appointed. how good were they? >> so he's got a lot of hurdles in front of him, you think. >> i think actually the labor leader could have if he wanted stay and he didn't do it. i just wonder whether they think the labor party is better off having cameron there and weak and damaged goods to finish him off. >> rebekah brooks, her testimony yesterday said the company acted quickly and concisely in the hacking scandal. but she's been arrested by police. how did she do? >> she looked pretty shifty to me at all of the commons hearing evidence yesterday. i didn't quite believe a word she said. once more, what said was plainly not true because she didn't cure it early. as we know, news executives who could it be aside from rebekah brooks stood in way of the investigation. did everything to make sure it was killed off early. >> what about andy coulson? we talk about the impact on cameron, did cameron throw him under the bus? >> he tried to, but i suspect coulson is in a position to dump on all the news corp. people if he wants to. he can strie to implicate other people. >> what about john yates? he's criticized for shutting down the original phone hacking investigation. i'm reminded of that show "star trek" that every time an officer was at the party he was going to get killed. >> i guess he's the most obvious fall guy. on the other hand i think he was a roughly honest cop. the reason he closed down was the fact that the news corp. executives prevented him from doing it. instead he and his boss who are employed by the london times decided they'd rather give up the fight. on the other hand i think on the whole, the top cops who've gone have done it for the honorable reasons. is another means of getting david cameron. if a top cop goes because of something on his watch, you would wonder if cameron should do the same thing. >> yesterday i was saying from over here it's hard to tell. is the heat on this story still rising? or do you think it's at an apex right now? because if i'm rupert murdoch on david cameron, i'm saying let's see if we can hold on until it cools a bit. >> we are in that area of summer before people go, so there is going to be a bit of a lull in this story. i don't really see it going away. there's been a market readjustment today. that might be just one day. it's no nobody's interest really to allow this story to go away. the fact is rupert murdoch is on the run now. and the great german word that explains what's been going on is that the british public really likes seeing somebody like rupert get his comeuppance. >> i was hoping that schadenfreud would come up tonight. thank you for joining us tonight. up next, in this world-shaking murdoch scandal, what if in the end all the major players walk away essentially untouched. if you think it can't happen, think again. we'll be right back. to make science as exciting as a video game. i need to reach peter, who's falling behind. and push janet who's 6 chapters ahead. ♪ [ male announcer ] with interactive learning solutions from dell, mrs. davis can make education a little more personal. so every student feels like her only student. dell. the power to do more. i find investments with e-trade's top 5 lists and use pre-defined screeners to work smarter. not harder. i depend on myself to take charge of my financial future. 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[ female announcer ] lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant or may become pregnant. you need simple blood tests to check for liver problems. tell your doctor if you are taking other medications or if you have any muscle pain or weakness. this may be a sign of a rare but serious side effect. great ride down. if you have high cholesterol, you may be at increased risk of heart attack and stroke. don't kid yourself. talk to your doctor about your risk and about lipitor. more on our in-depth report on the murdoch phone hacking scandal. we just got video in a minute ago. look at this. this is rupert murdoch, there he is returning to where we are right now. back to new york with his wife wendi. so he's back home here in manhattan after his trials overseas. not trial as such but difficult times. that's what it looks like him coming in. british opposition leader miliband expressed concern today that this scandal not turn into an event quote, where the whirlwind blows through and nothing really changes. how many times have you seen that happen in these stories? but with david cameron pushing back on his critics scene news corp. stock climbing, it's possible it could play out without anything. jeremy, welcome. thanks for being here. you reported that the analysts consider hearing the big success for rupert and james murdoch. let's look at some of the footage from him yesterday compared to minutes ago. he's at the table there. a lot of people said he looked like a guy who is almost nodding off, a little out of touch. some of his questions didn't seem with it. doesn't t