she shun the media spotlight or will she try to capitalize on her supposed fame? i'm wolf blitzer. you're in "the situation room." >> president obama back at the bully pulpit for the second time this week to make sure ameripay bill. he went before reporters to keep pushing raising the debt ceiling limit before the august 2 deadline. he seems to be softening his terms somewhat. let's go to the white house. our correspondent dan lothian has the very latest. >> he said it' time for law makers from both parties to make tough choices. he says he's been willing to put entitlement programs on the table, but even so, there's no deal tonight. and some republicans are saying it's time for the president to put his own plan on the table, not make another speech. president obama still thinks the so-called big deal option is the right deal. >> what's important is that even as we raise the debt ceiling, we also solve the problem of underlying debts and deficits. i'm glad congressional leaders don't want to default, but i think the american people expect more than that. they expect us to solve this problem and get our fiscal house in order. >> but after five straight days of talks with congressional leaders, reality appears to be lowering the president's expectations. >> it is hard to do a big package. >> with credit agencies issuing urgent warnings about the consequence kbenss of default and republicans on capitol hill talking about backup options, president obama ipd b kated he isn't shutting the door on their ideas. >> if they show me a serious plan, i'm ready to move. even if it requires some tough decisions on my part. >> even if it may only raise the debt ceiling but not tackle the debt ceiling problem in a significant way. >> if washington operates as usual and can't get anything done, let'sat least avert armageddon. >> he says that includes higher interest rates on things like credit cards or loans which would hit all americans like a tax hike, exactly what republicans refuse to make part of any deal. the president still remains optimistic that ongoing talks are optimistic. >> i always have hope. don't you remember my campaign? even after being here for 2 1/2 years, i continue to have hope. >> he said the american people don't care for the reality tv act of these negotiations. that's why he says the big deal is best thing to make the markets happy but to show the american people that they can get things done. >> but there's no chance the republicans will vote for tax increases, even the closing of loopholes that he wants that would justify the big deal. so he's obviously scaling back his ambition right now. making a smaller deal, but even more likely, he might get that compromise with mitch mcconnell, a temporary stop gap measure, if you will, to avert what he called financial armageddon. is that the sense you're getting as well? >> that's certainly the sense. as you point out, republicans still pushing back on tax increases because they believe that's not the way to get at the revenue, that the way to do that is to improve the overall economy and job creation, but not raise taxes even on the wealthiest americans. >> and the president will be in town in case there's more negotiations necessary. i suspect there will be. dan, thanks very much. congress has scheduled a series of test votes next week on alternative approaches to raising the debt limit. that includes a popular conservative plan to cut and cap federal spending and balance the budget. >> we're going to bring a bill forward next week, otherwise known as the cut, cap and balance bill to provide a balanced approach. so that we can demonstrate that we are getting things under control and that the people that put us here can gain some confidence that we're going to begin to live like they do around their kitchen tables and in their businesses. >> republican leaders also signaled they're now open to a backup plan, offered by the senate minority leader mitch mcconnell. it would allow three short-term increases in the debt ceiling between now and the end of next year by giving lawmakers a chance to cast votes, showing they disapprove. >> i am not prepared at this point to pick winners or losers. >> senator mcconnell pointed out his plan was being put on the table as a last ditch effort. we're far from the time for a last-ditch effort. a new loss for rupert murdoch's media empire as a scandal engulfs media outlets on two continents. we just received word that one of murdoch's top executives here in the united states is now resigning. another top executive going down, susan, what's the latest? >> yes. his name is les hin ton. and he's worked for rupert murdoch in various capacity, wolf, for more than 50 years. and we are told by a number of reporters who have been tweeting when they heard about his resignation that there was a loud gasp in the news room of the dow jones business unit that he headed up. when the resignation was announced. les hinton headed up the international division back in the late '90s through 2007 during a time when the hacking scandal really started to break wide open. in fact, he even testified before parliament at times saying that he didn't think that the news corporation was doing anything wrong, and then acknowledging in uncovering, he said only one person that he had eliminated a rotten element. at the time and thought that the scandal was over. but now he is saying from his resignation letter that he was ignorant of apparently what was going on with the corruption scandal and is calling this a very, very sad day for him. that he is losing the newspaper. but it's certainly leaving a lot of people wondering what is next, or who might be next, wolf. >> and it comes just as the fbi and the justice department are opening up their own full-scale investigation, or at least their initial investigation into the news corporation's activities here in the united states. susan, we'll check back with you. thank you. rupert murdoch is offering a very public apology today for the phone hacking scandal and acknowledging what he calls serious wrongdoing. just days before he faces angry lawmaker ps . dan rivers has more on the murdoch scandal in london. >> wolf, it's been another day of frantic breaking news. rupert murdoch has taken out ads apologizing for what's gone on under his leadership and in his newspapers. and perhaps incredibly, he met the family of milly dowler whose phone was hacked into by one of his papers. i'm sure incredibly emotional, that solicitor mark lewis spoke about how contrite rupert murdoch appeared. >> it was a private meeting called for by rupert murdoch. and he was humbled and gave a full and sincere apology. >> rupert and james murdoch and rebecca brooks will be forced to appear here in a committee and grill eed closelily politicians who want answers as to how all of this activity went on. one of the people who will be interrogating rebecca brooks had some tough words for her. >> i think he was inevitable. rebecca brooks has given the resignation message she should have given on day one of this scandal when nick davis of the uk "guardian" revealed milly's phone had been hacked. >> but the political dimensions continue to evolve as well. downing street has been forced to put out a list of guests that the prime minister david cameron welcomed to his country residents checkers. mo among them was the now disgraced former editor of "the news of the world." a man hired as director of communications. he visited the prime minister three months after he was forced to step down from that high profile political role. wolf? >> dan rivers in london, much more on this story coming up later. meanwhi meanwhile, libyan rebels locked in heated battle while gadhafi's forces get a new show of support from the obama administration. what the united states did today. and when planes collide. what caused the fear and the damage on the runway in boston. stay with us. stay with us. [ m you' you're in "the situation room." you're in "the situation room." t to those always searching for what's pure and what's real from we who believe we know just how you feel. haagen-dazs. [ 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? the united states government today delivering a new diplomatic blow to moammar gadhafi's regime. the secretary of state hillary clinton says the united states will now recognize libya's group as the legitimate governing authority in the country. the secretary is taking part in international series of talks on the libyan crisis. a pretty dramatic development from the u.s. expected at some point. came as a little bit of a surprise to me today. but update our viewers on what's going on in istanbul, because the future of libya is at stake. >> well, that's right, wolf. as you mentioned, it was a major d diplomatic development when secretary of state hillary clinton delivered a message that the united states for the first time was recognizing the libyan national transitional council as the legitimate governing authority in libya, at least until an interim government is created. here's more of what secretary of state clinton had to say today. >> until an interim authority is in place, the united states will recognize the tng has the authority inform libya. and the gadhafi regime no longer has legitimate authority in libya. we still have to work through legal issue, but we expect this step on recognitiognition will the tnc to access additional sources of funding. >> and wolf, as you mentioned, this did come as a bit of a surprise today. when secretary of state clinton made that announcement, applause broke out in the room where she was speaking. also good to mention that the final communique of the meeting today, all the participants basically said that gadhafi had lost legitimacy and that right now this libyan national transitional council needed to be recognized as the legitimate governing authority and that also a cease-fire needed to be created and implemented in libya at this time. wolf? >> the opposition, as you well know, they're certainly happy with increased funding. they're happy with increased political support, but there's something else they desperately ne need. can you tell the viewers? >> that's right, wolf. we ran into the spokesperson for the libyan transitional national council at the conference today. and he was expressing quite a bit of frustration at the fact that even though so many hundreds of millions have been pledged in support, they have not received any of that money yet. he told us that at least $700 million to $800 million have been pledged in aid from many donor nations. he said they're in urgent need of those funds and more. he said they need as much as $3 billion in u.s. right now so they can implement dramatic reform to make sure these democratic institutions get created and that the political crisis there is solved as soon as possible. >> the united states has frozen $33 billion in libyan asset, gadhafi's assets here in the united states. now that the u.s. has recognized the opposition as the legitimate governing authority of the libya, they could transfer -- start transferring some of that money to the opposition. is there any indication you're getting there at the summit meeting in istanbul that the u.s. is about to do that? >> wolf, at the end of the meeting, there was hope at that possibility. the fact that the u.s. is recognizing this libyan national transitional council as the legitimate governing authority there led many to believe that possibly these assets could be unfrozen. they could start be transferred to this group. but that's not a certainty yet. and one of the things that's led to a lot of frustration among donor nations, among members, participating delegation members at these meetings, the past four meetings that have been held. even though there's a lot of goodwill gestures towards libya, the fact of the matter is that money is not yet being transferred. people are wondering when this funding is going to be received by the interim authority there and how that's going to happen. there's a lot of talk about assets being unfrozen, credit lines being established by these countries and yet it hasn't happened yet. money hasn't been transferred an the rebels say they're in desperate need of these funds as soon as possible. >> that money could certainly buy a lot of weapons. the secretary of state is participating in these talks in istanbul, turkey. i suspect that money will start flowing to the rebels fairly soon. they should not anticipate any u.s. funds coming to libya right now, but releasing some of those frozen libyan assets iblg is going to be happening fairly soon. meanwhile after round of deadly violence in syria today. lisa sylvester sr. monitoring that situation. some of the other stories making news here in "the situation room." >> a human rights group says government security forces open fired on demonstrators today, killing 12 people and leaving dozens of others injured. syrian state tv is reporting that armed groups fired on government horses and citizens in a damascus neighborhood. this is the fifth month of anti-government demonstrations in syria. the man who shot and killed afghan president hamid karzai's half brother had been working as a guard with the international security assistance forces against the taliban. the provencial government received training from the isaf and was one of the most trusted commanders for the karzais. mohammad was shot dead by other guards after he killed ahme ahmed wali karzai on tuesday. hugo chavez is expected to travel to brazil for cancer treatment. chavez said the next phase of his treatment could require radiation and chemotherapy. the type of cancer is that that sha krez is battling is und undisclos undisclosed. he says despite his illness, he's still in charge of his country. >> he got initial treatment in cuba, now he's going to brazil. what's wrong with the doctors in venezuela? >> i think he wants probably the best for his money. and we certainly know he has a lot of money. >> it's a vote of no confidence inform venezuela but a vote of confidence for cuba and brazil. >> we don't know of the kind of cancer he has. >> i guess when his life is at stake, he's willing to go ahead and deal with that kind of situation. thank very much. credit agencies are warning of big trouble if the u.s. government defaults on its debt. but how seriously should their assessment be taken? we're taking a closer look. and michele bachmann decides to break from her church. what's behind the move? will it hurt or help her candidacy? candidacy? we heard dan lothian over at the white house mention that credit agencies are already warning about serious consequences if the united states defaults on its debt. but how much stock should americans put into those agencies and the credit score they actually give the united states. lisa is back. she's got more on the story for us. >>s in tor investors around the put a lot of stock into what agencies say. and if the rating is downgraded from aaa to even aa that could create shock waves around financial markets. the u.s. government has had a stellar aaa rating since 1917 when the ratings agencies began looking at government bonds. only once before has the u.s. triple rating been under review. but now for the first time there's real talk of the u.s. being downgrade pd. that were to happen, it would be dire. >> for the u.s., it would mean high unemployment. it would mean more volatile markets and it would mean high interest rates. and for the rest of the world, it will mean a much more unstable global economy. the reason is simple. both the u.s. and global economy is constructed and operates on the assumption that there is a aaa at the center. >> investors arnold t s around use the ratings of the three agencies to determine whether an investment is risky or relatively safe bet. they base the ratings on the probability of default. in 1975, the federal government officially recognized a handful of raisiting companies. it's a lot like your credit score. the higher the rating, the cheaper it is for the government to borrow money. moody's says it's prepared to drop the united states from a aaa to somewhere around the aa range. on the other hand, s say s&p sa any government that can't pay its debt on time could drop from a aaa all the way down to a d. and it's not just the u.s. government. financial institutions tied to federal government are also on review for downgrade. fannie mae, freddie mac, the fed rald home loan banks and federal farm credit banks. if the debt kreeling is not raised the u.s. could still afford to pay the interest to u.s. creditors, but it would only have enough cash to run about half the government and that would likely also have a negative impact on the rating. >> of there will no way to avoid defaulting on half of our other obligations. we can't sell additional debt because we're up against the debt limit and there won't be enough money to go around. just any of it 100 people and a lifeboat that seats 50. >> now mes financial analysts do not believe we're going to get to that point. the assumption is that something is going to come out of washington. so markets have been relatively tame. they said if you thought the collapse of lehman brothers was something really significant. they said this is going to be nothing by comparison if the debt kreeling is not raised. >> they better do something to avoid that kind of disaster. thanks very much for that report. casey anthony has serious choices to make when she gets out of jail on sunday. she's getting a lot of free advice about lying low and staying safe. and why jobless americans might want to think twice about enlisting in the military. enlisting in the military. this past year alone there was a 93% increase in cyber attacks. in financial transactions... on devices... in social interactions... and applications in the cloud. some companies are worried. some, not so much. thanks to a network that secures it all and knows what to keep in, and what to keep out. outsmart the threats. see how at cisco.com cisco. host: could switching to geico reon car insurance? or more host: do people use smartphones to do dumb things? man 1: send, that is the weekend. app grapgic: yeah dawg! man 2: allow me to crack...the bubbly! man 1: don't mind if i doozy. man 3: is a gentleman with a brostache invited over to this party? man 1: only if he's ready to rock! ♪ sfx: guitar and trumpet jam vo: geico. 15 minutes could save you 15% or more on car insurance. documents recovered from osama bin laden's compound revealed the al qaeda leader set his sets high on tarts including the president of the united states. with deep political divisions in the country, can members of the country actually reach a grand compromise on the nation's debt? and los angeles bracing for the big one. not an earthquake, but a massive traffic jam that's being called carmageddon. i'm wolf blitzer you're in "the situation room." a florida judge today granted casey anthony's motion for a protective order. that means she won't have to face a deaf mission suit filed against her until october. casey anthony is being suzed by a woman named zenaida fernandez. she told investigators that's the name of caylee's nanny and the woman had taken the little girl and disappeared. gonzal