Transcripts For FOXNEWS Happening Now 20110103

ing commentes made in which he called president obama, quote, one of the most corrupt presidents in modern time. >> in saying that this is one of the most corrupt administrations, which is what i meant to say there, when you hand out a trillion dollars in t.a.r.p. just before this president came in, most of it unspent, a trillion dollars nearly in stimulus that this president had asked for, plus this huge expansion in health care and government, it has a corrupting effect. jon steve centanni is live for us in washington. that was a pretty bombshell allegation, steve. what else can we expect from congressman issa in the years ahead? >> well, he did of course back off from that, first saying to rush limbaugh the president was the most corrupt in history, then saying the administration was the most corrupt, but with republicans in control of the house you can expect a variety of investigations, with california's darrell issa in charge of the house oversight and government reform committee. he says his main goal will be to cut the waste. do we have this? >> i'm going to try and make a real difference in washington spending patterns. you know t. doesn't take a genious in the private sector to know that you can save literally hundreds of billions of dollars in federal spending if you can make it more responsive. that's the main job. >> reporter: issa says medicare fraud will be a major focus and some of the investigations he could launch include listening to the impact of government regulation on job creation, fannie mae, freddie mac and the foreclosure crisis, impacting corruption in afghanistan, wickileaks, and the fda and food and drug safety. so it could be a very busy new 112th congress, jon. jon: so the possibility of these new investigations into a republican-led house, what are democrats saying about this? >> reporter: well, there certainly will be investigations and there isn't much they can do about it, even though they don't like it very much. the same thing happened when they took control of congress in 1994, republicans, that is, and eventually impeached president clinton but here's the response from the ranking democrat on issa's committee, i lie gentleman cummings of maryland. >> issa will have power powers of anyone he wants to and that's the problem when you come to the conclusions before people come in. we can't have witch hunts, we can't have these fishing expeditions. we've got to work together. >> reporter: he wants them to work together? we'll see what happens. cummings says the gop has been on the sidelines saying no, now they've actually got to do something. that's the democratic take. jon: sounds like a recipe for some anguish in the congress ahead. thanks, steve centanni. juliet: speaking of anguish, republican chair michael steele is preparing for a battle to keep his job, today he's going to debate three challengers as the rnc prepares to vote on a new leader for the new election cycle, steele threatening to, quote, make it personal and name names. james rosen, a lot at stake for michael steele in the debate. >> reporter: that's true, this could be steele's last chance to impress favorably the 168 voting members of the republican national committee who will decide who the next chairman will be, but a number of analysts from our own power play editor cries stierwalt, folks at politico and others who crunch the numbers and perform the whip counts say it is if current endorsements mathematical impossible for steele to win the 85 votes he needs. steele has been embatsed for some time but this debate occurs amidst reports about a $120 million decifit at the rnc, an issue sure to figure prominently this other. steele face -- this afternoon. steel faces republican party con ryan previs, former republican party chair ann wagner, anuzis and maria cino. keep an eye today at this debate at the national press club, 1:30 on the interplay between steele and piebus who some conservatives will want to distance themselves from his former ally, michael steele. juliet: the rnc is an institution with high profile departures in the last 24 hours. >> century collins, former rnc political director who went seepingly overnight from being one of steele's closest adviser to one of his critics announced he is leaving the race for chairman, he sees the field as possessing enough qualified candidates, also the rnc communications director, a well known and well liked figure in politics and on capitol hill announced he is leaving, doug hyy -- heye, his ties go back to the race of 2006 which steele lost to ben cardin. juliet: doug is going to be joining us next hour and we'll be talking to him. thanks, james. as always, we want to hear from you, who would you like to see as chair of the national republican committee? log on, click on the you decide link and make your choice and leave your comment if you'd like. you also see how other vote by clicking the view results tab. jon: a fox news weather alert for you. queensland, australia is facing a flood emergency. you will not believe the scope of this thing. rescue crews, rushing to help the city of rock hampton before rushing water cut it off, a military cargo plane is carrying food and medical supplies while three black hawk helicopters are standing by to help. rivers overflowing, forcing the airport to close, shutting down the main highway. this drenching rain started before christmas, and it affects an area the size of france and germany, combined juliet: another fox weather alert from floods to freezing weather in russia, more than 30,000 people near moscow are without power, freezing rain knocking down power lines for hundreds of villages there, heavy snow falling in some areas as well, the delays in restoring electricity also causing a political scandal. russia's prime minister publicly criticizing the energy minister and high ranking official from moscow and there's no relief from the rain and snow in california. some neighborhoods along the sacramento river are already beginning to flood. residents in other areas are working to protect their homes as the river nears flood stage and police say it's unclear when they will be able to clear a section of i nf five, that's a major artery there, the main north-south corridor in california there, blocked by snow, stranding thousands of motorists trying to return from the holidays. we understand that here on the east coast. tow trucks were called for to rescue stranded drivers, it caused delays for 12 hours in some areas. jon: is there relief on the way for californians who have been getting hammered this winter? maria molina, live in the fox news weather center. how are we looking? >> it's going to get better but definitely additional activity out there, all because of this low pressure system, sitting here and spinning here and that's basically been the case over the past month and a half. we've seen these storms bring in that moisture and the ground is already so saturated. we've had flooding, we've had mudslides, and guys, again, additional light rain across parts of los angeles. the good news is that this will be moving on out -- on south and -- on out and tomorrow will be a sunny day in california. until we get there, we have additional snow fall, you saw interstate 5 closed because of that snow and we're going to pick up an additional half a foot out there before the day is over. otherwise, good news. i'm so happy to bring good news. we have high pressure in places across the central plains, and the southeast, so things are looking good, clear skies out there, you'll get lots of sunshine throughout the start to your work week. so i'm glad that we're starting off 2011 on a much quieter note. the upper midwest, we do have light snow falling out there, and chilly temperatures, north dakota, looking at temperatures in the single digits, and then some lake effect snow off of lake ontario, that's where we're looking at the heaviest accumulation throughout the day, between three and 6 inches there, that's generally north of syracuse and an area that's used to seeing the snow and you guys are under lake effect snow warning there, through 6:00 p.m. this evening because of all that snow, and there's a quarter or mile or less, so watch out for dangerous driving conditions. looking ahead as we look into wednesday things remain quiet across the southeast, the central plains will stay dry and that storm out of california, we'll see that area of low pressure across the upper midwest, kind of intensify as we head through mid week. we'll see some additional lake effect snow, jon. jon: what a mess for parts of the country but like you said, getting that high pressure over the south, that's good news. >> yes, sunshine. onjon maria molina, thank you. >> thank you. jon: what about that snow and rain in california? in a few minutes, a live report from one of the hardest hit areas of the state. we want to see that. juliet: well, the economy is struggling to get out from under the housing crisis. banks, including fannie mae and freddie mac, could end up taking back some of those bad mortgage loans. why that is not good news for taxpayers. the sea shepherd crew attack japanese cargo ships. thanks to wickileaks we learn the japanese government is going after them. we tell you how, coming up. juliet: welcome back. wickileaks releasing its first round of state department cables, the u.s. embassy in tokyo, they show japan asking washington to strip an antiwhaling activist group of its tax exempt status, the government there shaping the sea shepherd conservation society for causing a political embarrassment. japan also raised concerns it could lose negotiating power with the international whaling commission, japanese sailors get around the ban by using a loophole for allowing whale research. jon: now a fox news business alert. this one is a good one for a change. there are new signs the economy is picking up steam. construction spenng rose in november, according to the commerce department. it's the third straight month of gains, and the highest level of construction spending in five months. factories also seem to be picking up the pace, manufacturing more goods and taking in more orders in customers. doving right now, banks in a financial hole over bad mortgages issued during the housing bubble, now they're under pressure to take back bad loans from mortgage giants fannie mae and freddie mac. peter barnes is live in the d.c. bureau. how big a problem is this for the banking industry is this peter and are we potentially looking at another bank bailout here? >> jon, it's a $50 billion problem for the banks, trillions of dollars in mortgages, but it's not expected to sink them or require another government bank bailout. a big part of this involves mortgage giants fannie mae and freddie mac, which you just mentioned, which are returning bad mortgages they don't want to save taxpayers billions on potential losses. now, these are loans that the banks underwrote back in the housing bubble, when nobody cared if the homeowner did not put money down, did not verify income, did not have a good credit score. remember, housing prices were going to keep going up forever, assuring the loans were going to be repaid, right? well, wrong. a lot of these loans are now in foreclosure, fannie and freddie have the legal right to force a bank to take them back if they did not meet their standards, all of this to limit the taxpayer bailout of fannie and freddie which have gotten $150 billion from the government so far. >> every penny you can get back on fannie and freddie is good for taxpayers. two years ago, people were questioning whether there would be anything left. and now, we're seeing substantial recoveries. >> reporter: one government oversight panel estimated this would be a $52 billion potential loss for the banks, but the banks are expected to be able to handle the losses, jon. jon: so exactly what did bank of america do? >> well, bank of america is just the latest bank to take back these bad loans, tens of thousands of them. last week, allied bank, the old gmac, also settled with fannie and freddie, allied and b of a have repaid $3.3 billion to fannie and freddie and they are seeking settlements from other banks as well, jon. jon: peter barnes, live in washington for us, peter, thanks. juliet: jon, the decifit and fears it's spiralling out of control, what the gop-controlled house plans to do and why it could be one of the big battles ahead for party. mother nature not about to give cali a break, winter weather stranding motorists along i-5, now more snow is on the way, we're live with the story, coming up. juliet: welcome back. what a mess in california, snow and rain falling nearly nonstop river, -- nonstop there, and it's snow causing chaos from the main north-south highway in southern california, snow and ice stranding drivers along interstate 5 and there is a lot more snow in the forecast. kttv bob castal is live. >> many of these drivers are going nowhere fast. we are in castaic, the chp essentially is not letting anyone go further on the nivment-5 freeway. it is about a 100-mile stretch from here to the county line. it's completely shut down because of the snow, the black ice conditions, the wind conditions that they've had overnight, plus 95 miles an hour. we've been making friends fast because we're not going anywhere, right, sir? how long have you been here? >> 14 hours. >> you're a trucker so you're sort of used to this stuff. >> we try to stay ahead of the storms but we missed this one. >> what do you think about this, you're trying to get from where to where? >> we've got a load going to tacoma, washington, got to be there 5:00 in the morning, so we might be a bit late. >> what do you think of the grapevine, this area, how treacherous who you think -- do you think this can be. >> it can be real treacherous. i've seen many accidents, many fires, many trucks overheat with their brakes. it's a nationally recognized hill. >> that's why they have it shut down, the chp telling me they are doing some asyments now, they hope with the break in the clouds here they can let the cars through. they're telling me they won't start that until at least two hours from now but they're trying to get as many cars out of the grapevine area before the next storm potentially comes through. juliet: unbelievable, 14 hours, stranded in the same spot. bob, thank you for that, we appreciate it. jon: a parking lot there. a battle brewing in congress over the decifit and whether lawmakers should vote to raise the debt ceiling, allowing the country to borrow even more than the $14 trillion limit set just last year. the tea party has been coming out against the idea, but the white house now issues this dire warning: >> this is not a game, you know, the debt ceiling is not something to toy with. if we hit the debt ceiling, that's thesention -- that's essentially defaulting on our obligation, which is totally unprecedented in american history, the impact on the economy would be catastrophic. i mean, that would be the worst financial economic crisis than anything we saw in 2008. jon: he also went on to say it would be the first default in history, caused purely by insanity. joining us, art laffer, former economic adviser to president reagan. what do you think of what austan goolsbee there had to say? >> i think he's being dramatic to be honest with you but i understand his point, it's not the right place to control spending. you shouldn't let the -- for goodness sake he was part of the administration that pushed this spending on everyone, they could have had for the debt ceiling rate to be raised to allow this spending to go through. they didn't do that. they put themselves into this predicament and frankly they deserve to northbound the bad predicament, they behaved badly over the last it years and by the way bush did while in the last two years in office as well. it's a catastrophe going on, the spending is not the problem. -- spending is the problem. it's not the taxes, the debt, it's spending. they are the ones that caused it all. frankly, i don't feel sorry for him, and i hope we don't use the debt ceiling as a tool. frankly, austan goolsbee should know better. jon: as you well know there are a lot of candidates coming to washington now as members of congress who ran on a pledge to not increase the debt ceiling. a lot of them with tea party support. >> i know. jon: what kind of predicament are they going to northbound when they find they have to cast this vote? >> you know, i don't think they should have run on a campaign of not raising the debt ceiling. i mean, the debt ceiling is not the right place to control this problem. they should vote against spending. they should appeal the obamacare, they should repeal the financial format, they should not fund those programs. that's the correct place to start solving this problem. don't raise taxes, and i would let the debt ceiling go up, but frankly, cut spending now. jon: you don't have a quote in -- a vote in congress, do new. >> i don't, but i have a vote for them, too. jon what about this idea? there are a number of them, michelle bachmann that leads the tea party caulk nous the house, she is saying i might consider voting for it if we get spending cuts. >> well, that's right. i think she's the best one of the bunch. i mean, she's tehrik. if we can use the debt ceiling as a tool for getting them to cut spending and bring things back under control, that would be just wonder. i know you had steve moore on earlier and steve was completely correct, use this as leverage. these people cannot afford to push things through this congress any long and not accept the consequences of their action, it's time they got the budget under control. op jon -- jon you said repeal health care, you think that is one of the things that this congress should vote for. i can't imagine that this president who made it his signature issue wouldn't fight back tooth and nail. >> well, let him fight it. i mean, that's something that the people have a right to make a decision on. i think the health care bill is one of the most atrocious bills from the standpoint of the overall budget and the provision of health care services to people. but frankly, this president wants to base his reputation on that bill, goodness knows he'll be up for election in 2012 and we'll see whether he wins or not. people deserve the governments they get, jon and if they want a bloated government spending with the high unemployment rates and what i think is a very poor economy, they have a right to have it, but i surely don't think this is the way to go. jon: art laffer, one of the economic advisers for president reagan, thank you. >> thank you very much. it's a pleasure being with you. juliet: speaking of health care recommend, a new chapter in the battle over health care reform pitting the president against the gop-controlled house. what republicans plan to do about the new health care law. also a major development in the war on drugs, why one of the most violent drug cartels in mexico is now calling a truce. we'll be live with the story coming up. jon: new next hour, fasnatessing stories ahead and you don't want what could be a breakthrough in the fight against cancer, a new blood test, why doctors are excited about it. a teenager dice after overdosing an ecstasy after party in the los angeles coliseum. her family is suing the city. do they have a case? >> why the housing market could be in for more trouble this year and what it means for you. juliet: right now president obama is getting ready to head back to washington, this as he wraps up the first family's vacation in hawaii. when he gets home to the white house he's going to be facing a new fight as we've' telling you on health care as the gop plans to target the new law. >> i'm actually going to have the fight across the board in the house and senate to de fund obamacare and start over. one of the things i'm going to do have senator barrasso is stop the mandates and florida mandates and the extension of medicaid. juliet: mike emanuel is live in han lu lu. first let's talk about the challenge to the health care law. >> it sounds like juliet when the house gets into session this week one of the first orders of business is going to be going after the health care law. congressman fred upton from fox news sunday: >> it's part of our pledge, we said that we would bring up a vote to repeal health care early. that will happen before the president's state of the union address. we have 242 republicans, they willo there will be a significant number of democrats, i think, that will join us. >> reporter: it's not clear that they will have the votes in the united states senate to overturn the health care law where obviously the democrats are still in control, but the house republicans feel like they can certainly put a lot of pressure on the senate to act and they feel emboldened by the midterm election, and also by some of the polling suggesting that the the health care law is not very popular with a lot of the public juliet. juliet: what about the white house, mike, are officials there worried? >> publicly, this he are not, but look, they are under attack from two fronts now. they've got the house republicans going after this law, if they cannot get it overturned then obviously they're planning to go after specific pieces of the health care law. they're also dealing with this fighting in the courts on this issue, so it's clear over the next couple of years they're going to be defending one of the key mesh -- measures of president obama's presidency in the courts and also against the republicans in the house, and so they've got a fight on their hands over the next couple of years, juliet. juliet: mike emanuel in a beautiful but dark han lu lu -- honolulu. thanks mike. >> mu. jon: health care is just one of the battles ahead for the white house and the new gop-controlled house. for more on some of the others, we're joined by peter mirijaniean, also matt sphlapp, former political director was george w. bush. give me what you think the first job ought to be under the incoming congress. >> the first job for the incoming congress is to make a commitment to the american people that they won't agree to any legislation that hurts the ability of the economy to create jobs. everything has got to be about jobs, and getting our government's overspending under control. jon: peter? >> well, obviously, the number one priority, jon, is the economy and jobs. you'll have a different perspective from the republicans and democrats on how to get there. in the last congress, the democrats extended unemployment benefits, they also provided a tax benefit for small businesses which got very little publicity by the waivment there are different things that i think both parties will argue as to what is the remedy to fix the economy but that is the number one priority. jon: matt, here's a question from william medically, one of our bloggers, one of our chatters on the blog today, he says how does it work to borrow money to pay off debt? that seems to be what this congress is inclined to do with the impending in march raise of the debt ceiling. is that ever going to come to an end? >> yeah, this is the really tough vote for the republican leadership in the house, and certainly for all members of congress. i mean, how do you tell the american people you're going to increase the ability of the government to borrow when after the elections in november, the message from the voters were start to cut spending? the problem is that people have to understand that we have to get on a glide path towards a balanced budget. we can't do this in one year. we've got to make sure we don't do anything irresponsible that spirals us back into an economic downturn, because that will mean we'll lose millions of more jobs. jon: peter, you suggest that one of harry reid's first priorities, he's going to be the most powerful democrat on capitol hill now with control of the senate, you suggest one of his first priorities is going to be immigration reform? >> no, i didn't say it would be one of his first priorities. he think that that is something the president and harry reid care deeply about and i think they'll try to find a way to resurrect that. i want to go back to one point. the fact of the matter is you come out of a election where everything is a slogan and bumper stick e. whether it's repealing health care or cutting spending and now you have the reality of the situation like the debt ceiling and whether or not that's raised or not is a fairly bipartisan consensus among economists that you need to do that. what the republicans are going to be faced with is governing and when they go in and they want to do a vote on health care reform, repealing health cape doontd guess it passed what's going to happen to the tea party advocates around the country who said well, you said you were going to do this? they'll have to come back and say we tried but the democrats stopped us. there's going to beo it will be very interesting to see how this plays out in terms of the congressmen, the new republicans and what their agenda is going to be jon: matt, there have been times when divided government has worked pretty well in washington, when things have gotten done. witness what happened after president clinton took that pounding after his first two years in office. passed welfare reform and some other big issues. >> that's right. this is really a moment for president obama. i disagree a little bit that this notion that somehow republicans need to govern. republicans were able to get a majority in the house of representatives. there is still president obama to deal with and he looms large over every policy discussion and the democrats in the senate as well, and he has a real decision to make, does he reach out, like president bill clinton did, to the new republicans in the house and try to find some common ground? so far, i haven't heard that type of language coming from the president, but i -- >> right before the lame duck session, there were a lot of things passed in a bipartisan way. >> if the president wants to get reelected, he's got to recapture these voters in the middle, he's got to recapture independent voters. it's in his hands. if he decides to work with republicans i think it's going to be a-- to acue to his political benefit. >> i agree he has to reach to the middle. i think republicans have to reach to the middle as well. you have a caucus and a republican house that is much more to the right of the american public. >> untruvment that's not true. they were just elected by the american people! >> they were elected by the american people, but the fact of the matter is their agenda in k. matt, and you know as well as i do, is a tea party agenda, whether it's repealing health care reform, whether it's cutting spending. you have michelle bachmann equivocating on whether or not to raise the debt ceiling. so the reality of governing is going to set in quick levment i think john boehner has done a smart thing and think the language coming out of the speaker-elect's office and his folks is very promising. i mean, there are areas where they can cooperate n. education reform and elsewhere. so i think boehner gets it. i think the problem is the rest of the cawks and who they're beholding. jon: what about the question that i just asked art laffer? it appears that spending is out of control. what if republicans use this debt ceiling as leverage to get votes to cut spending in other areas? wouldn't most voters be satisfied with that? >> well, it's an interesting proposition, jon. i mean, to do that. the fact of the matter is, that holding the -- using spending as leverage, whether or not to raise the debt ceiling, is going to -- you have to look at the broader implications on our economy and what that's going to mean for the broader markets and the signal it sends. all the signals is the economy is coming out of the recession and moving in the right direction, so i don't think you want to do anything that would jeopardize that, to score political points on cutting spending here or there. the fact is the entitlement programs are the key. as with the bipartisan debt commission, decifit commission, that's what they said, and cutting spending may more political points but there are hard decisions both parties need to make if they want to reduce the decifit. jon: matt, what about that? >> i'll give you a short answer. yes. they definitely should do whatever it takes to reign in spending, especially entitlement spending. if we don't do that we're never going to recover and it's time for republicans and -- both parties, and i think the republicans get it and the american people get it, it's time to make the tough decisions. if that's what it takes to get the debt ceiling passed that we actually have intiement reform and real cuts, long term, that we can actually use the capital in our economy to grow businesses, then i'm all for it. >> matt, that's a great sound bite. the fact is the bipartisan commission, democrats and republicans, came up with something that the administration supported that would do exactly that. jon: matt schlapp, peter mirijinian, thank you both. >> thanks jon. jon: as always our "happening now" live chat is happening and it's on fire today. i checked it out. tell us what you think about what you just heard and what you would like to see out of the new congress. go to foxnews.com home page, click on our live chat link, lots going on there right now. we may read some of your comments later on in the hour. juliet: one of mexico's most violent drug cartel social security calling for a truce. the announcement came in a letter purportedly from la familia, saying the cartel is suspending activities to prove their members are not to blame for all the violence in the region. last month police killed king pen nazario morena gonzalez, triggering a rage. what comact me is -- william la jeunesse, what exactly is this cartel offering? >> there are five cartels, la familia is based on the pacific coast. the letter was delivered by e-mail to reporters but also door to door in the state capitol. it says that the cartel will halt violence for 30 days to prove that it is not responsible for the criminal acts, the kidnappings and decapitations,ate set remarks that authorities are reporting to the media. sources believe the letter is authentic and may be a sign that felipe calderon's four-year war is having an effect. in the last 30 days mxican forces arrests almost a dozen la familia leaders. >> it's a sign of la familia's desperation, again, they're coming apart at the seams and they have become very, very weakened by mexico's security forces. >> now, braun believes they will step up pressure to stop competitors from filling the vacuum. interesting, the last three months ago a poll of mexican residents found that 70 percent believe the government is losing the war but 72 percent it has no choice but to continue. juliet. juliet: one of our chatters wrote, truce? you meantime to reload? so obviously that person doesn't think this is a good sign. but you said some people actually do think it's a good sign, so surely the mebzan government isn't out of the moods in their war on the cartels. >> yeah, well, a truce connotes it's two parts but mexico is not suddenly going to go we're not going to do anything. this is the bloodiest year on record in 2010, 34 -- 3000. mexico argues this is a suck section 96 percent of the victims are the bad guys, number two, the violence is concentrated in five of the 19 states but it's more sophisticated. they're seeing car balls and i.e.d.s, rp gsms, and 50 caliber machine guns and they're more intimidating. they are running around in suv convoys and taking over cities and blocking roads. the argument here is that mexico is in a very long war. the cartels have had six decades to do this, calderon has been in office for four years. so if we look at colombia being the model this is something you got to go through and if they keep up the pressure and there are metrics that i know the intelligence sources are using. if so, mexico may be nearing a corner but nobody is declaring victory as of yet. juliet: we will check in a month from now. good to see you william. jon: now a slightly happier story out of mexico, bakers there trying to make the world's largest version of a traditional sweet bread to mark the end of the holiday season. this loaf, more than 2300 feet long. it weighs almost 12,000 pounds. workers from 40 bakeries took seven hours to create this thing. the ingredients include almost 12,000 pounds of flour, 30,000 eggs and lots of people lined up for a piece of it. how do they get something like that in the oven? >> you took the joke! that's my joke. that's about as much as i ate this weekend. seriously. not kidding. thirty-two thousand eggs! all right, coming up, the u.s. may be getting much needed help in afghanistan. what one tribal leader and a taliban strong hold is offering to do. >> and a wildlife mystery in arkansas, after thousands of dead birds rain down on a small town, shocked residents were at a loss. >> called the police and told them i'm not drunk, not on drugs, and she immediately said you're calling about the birds and i was like uh, yeah! jon: some positive developments to tell you about the war nav, a u.s. marine general says the leaders of the largest flieb a taliban strong hold are pledging to stop insurgent attacks and excel foreign fighters. the governor in helmand province also signing off on the deal, but it's not clear that all members of the taliban are on board. helmand province in the south has seen some of the deadliest fighting in the war in afghanistan thus far. juliet: a small arkansas town just finished cleaning up the remains of some 2000 dead birds. wildlife experts are trying to figure out exactly what caused the red wing black bird, just one specific type of bird, to fall from the sky over the weekend, literally falling from the sky. the dead birds covered streets, sidewalks and lawns, no explanation of what killed them. residents are actually kind of frightened. >> my kids are out here playing and you don't know what to say, because they're walking around ino they come up with gas masks and everything. juliet: keith stevens is spokesman for the arkansas fish and game commission and joins us live on the phone. thank you very much for joining us today. you look at this video, you see people walking around in the white suits, it looks like something out of a hitchcock movie. tell us what you've seen out there. >> there were a lot of birds on the ground. this was about a one square mile area, so it's a pretty large area and actually, we've been up in the helicopter, we've counted probably 4-5000 birds now. juliet: and it's a specific type of bird, one species, the black bird, right? >> the red winged black bird. juliet: they follow one specific area. what's the theory here? there have actually been several theories, fireworks trying to spook them, hail, high altitude hail, lightning strike. what do you think thatst? >> that's what we're trying to find out. we have the birds that we collected over at a lab here in little rock, and we hope to hear something if not today, then maybe by tomorrow. juliet: have you ever seen something like this before? >> not of this magnitude. we've had actually ducks fall oust of the sky after a lightning strike, but that's the only thing that i can remember in my tenure here. juliet: but black birds aren't the only victims. i understand about 100 miles away fish in the arkansas river have turned up dead. is this a specific -- this is a specific type of fish, drum fish. >> freshwater drum. we estimate 18,000 fish on a stretch of the arkansas river near the ozarks. we don't see any indication that they're related. they happened probably 200 miles apart on separate days. but you know, we want to find out what happened. juliet: it is unusual. let us know when you find out. >> i'll do that. juliet: keith stevens, appreciate it. >> you bet. jon: that sound you hear is the wheels turning in washington, congress getting back to business with a new house majority leader. what changes might john boehner bring? we'll take a closer look in a live report. also, get ready to fork over more money for gas. have you seen the prices at the pump lately? they are on their way up and the sticker shock will spread way beyond gas prices plus -- >> ♪ >> ♪ >> ♪ >> jon: saving a part of rock and roll history, the campaign to save the birth place of one of the beatles, next. jon: you have looked at the sign at your gas station lately? the new year is bringing a surge in oil and gasoline prices. a barrel of oil, headed for a price spike, possibly up to 100 bucks a barrel, and the average price for a gallon of gas? it climbed to 3.07. just one year ago, the price was 2.66. but this pain is going to spread beyond the pump to just about everything you buy. sandra smith of the fox business network is live with us in the new york newsroom and this is going to ripple out throughout the economy, isn't it? >> we're already seeing that happen. while the national average is 3.07, in your town or city you might already see gas prices at the pump exceeding 3.50 a gallon. so what happens is there's an immediate trickle down effect, whether you're a shipper, a lot of people over the holidays buy online, you're likely to see the shipping costs go higher, you order a pizza, these companies are going to have to pay more to get that pizza to your door, they could add that to the price of your $10 pizza, airplanes, we see a jump-up in travel and jon scott, this could lead to higher airplane ticket prices. the trickle down effect here is endless if these prices go up. jon: and of course, last time airline fuel costs increased they started bringing in things like those baggage fees and things like that, that stuff never seems to go away. >> that never goes away. when we see oil prices now sitting above $90 a barrel, that influences the airlines, they look at whether or not they have to raise ticket prices or like you said, put on additional fees. now we start to talk about $100-barrel oil, this isn't good for the big oil companies, they see this can cut into profits as far as refining oil into gasoline. now we're talking about $120 oil from some analysts. jon: isn't part of the problem the fact that the world economy is coming back so there's more demand? >> it's emerging markets, chinese consumption of oil next year, in 20 -- 2011, it's supposed to be up 5 percent while our consumption is supposed to be up a percent, so a lot of this is the emerging markets, nations consuming more oil on a daily basis, driving more, more first-time car buyers. its just a matter of they're buying cars, driving more and that's spurring them and that's raises prices. jon: you said $4 gas by the end of the summer. >> many experts are calling for four bucks by memorial day. scary thought. jon: beginning of the summer. wow, sandra, thank you. juliet: are awe beatles fan? you can exhale, because ringo starr's birth place will not face the wrecking ball, at leet not yet, the form erm home of the beatles facing demolition in liverpool. that's crazy. starr lived with his parents for three months, now the british housing minister is calling for dellition plans to be postponed while the public is consulted about the plan. you got power when you're a beatle. no surprise, excuse me, that the house has become a tourist attraction, drawing beatles fans far and wide from around the world. jon. jon: it looks like they've got plenty of other empty houses nearby to sell if they are going to make it a tourist attraction. the chairman of the republican national committee fights to keep his job. michael steele facing a huge challenge. he's about to take on his rivals in a debate -- debate and says he will get personal. we'll talk about mr. steele's communications director who has just turned in his resignation. that's coming up. jon: hello and happy monday to you, it is monday, right? juliet: it is, jon. jon: i've lost track over this vacation. juliet: partying too much? >> jon: no, but it's high noon in the east. juliet: i'm juliet huddy in for jenna lee. jon: homeland security secretary janet napolitano is on a bit of a trip, she gets a talking to by israel's president over how the u.s. is handling iran. secretary ja nanapolitano in israel to talk security, catherine herridge, live in jerusalem with the story. israel's president had strong words for her. >> reporter: yes, secretary napolitano, this is the third stop on her week-long trip that began last week in. yesterday we were in qatar and later this week we'll be in europe. the focus here in israel primarily from the homeland security standpoint is on airline security and whether some of the techniques used here in israel may be brought to the united states. and secondly, they're also going to be focusing on cyber security. a short time ago, secretary napolitano had a meeting with israel's president shimon perez and it's worth noting in the 10-minute meeting he mentioned the threat posed by iran, mahmoud ahmadinejad and the nuclear program no less than half a dozen times. let's listen: >> the iranian ambition, it's an ambition, religious, military attack for building their empire, to control the middle east and they are aware of it, so we have to assure the maximum defense that we have for long range and short range missiles. >> it's worth noting several points, perhaps first and foremost, that iran does not fall within the portfolio of secretary napolitano who does homeland security. second it's worth noting that since he's taken office president obama has yet to visit israel and thirdly, after that event, i spoke with a spokesperson for the israeli president and asked why the special emphasis on iran. what he told me is that mr. peres, when he faced foreign dignitaries, he put that emphasis on iran but he says this was especially so with u.s. dignitaries. jon: catherine herridge, thank you. meantime in washington, d.c., republican congressman john boehner is preparing to take over as speaker of the house. it will happen wednesday. we're getting early hints of what changes are in store once he is in charge of the "special report" anchor bret baier joins us now. bret, the talk in washington is that he is not going to exactly follow in the pattern of his republican predecessors dennis hathert and before him, newt gingrich. >> right. it will be a different tone, we're hearing from aides up on capitol hill, and the incoming speaker, boehner, will launch really a lot of bills that deal with spending cuts and also, the promise that a lot of republican members really got elected on, and that is to repeal obamacare. the health care law. so there will be albeit a symbolic vote early on, according to lawmakers, that there will be a vote to repeal health care as it stands now. that, of course, has a good chance of passing with significant numbers in the house, but not in the democratic controlled senate and of course, even if it got past that, you have an administration and a president who would veto that. but the symbolic vote will be one that will happen pretty early on, as well as spending cuts, bills, that will likely come out of this republican house in the first week or two. jon: what do you know about relations between the incoming speaker and the president? mr. obama took on john boehner during the campaign pretty directly for a while, was pretty critical of him, now you've got john boehner as second in line behind the vice president to the presidency. >> sure, and there will have to be a different relationship between the twovment you mentioned president obama on the campaign trail mentioned incoming speaker boehner, then minority lead boehner many times, and in derogatory terms, and there was a lot of question about why he did that, raising the elevation of boehner at the time as you headed into the november election. now, it's a different dynamic, and he, boehner, controls the republican house and which this president will have to deal with on a number of different issues. there will be some common ground, trade deals, south korea's trade deal, perhaps colombia, there will be some spending cuts decisions that will be appealing to the administration as this president tries to reach out to independents ahead of a reelection run, of course, in 2012. jon: you mentioned that he is not dennis hastert, he's not news gingrich, but he's not nancy pelosi, either. what kind of changes can we expect from the previous speaker of the house? >> well, nancy pelosi is going to have to unify her democratic caucus which is as you know much more liberal than it was the last congress. she had a lot of moderate members, blue dog democrats in the last congress, now she controls a caucus that is much more like her, much more liberal. the question is how far they will go on compromising on some of these issues that come to the forefront, how far on spending cuts will some of those democrats vote. we'll see a lot more democrats, i believe, in the senate come to the middle as they face reelection coming up in 2012. jon: bret baier in washington for us, keeping an eye on things, bret, thank you. >> all right. i don't know jon you can watch "special report" with bret baier, every night, 6:00 p.m. eastern time, only on fox. a bird tells me there's a bit of an anniversary coming up in a couple of days for bret. juliet: a nice little tease there, jon! already now the u.s. navy is investigating some racy home videos shown aboard the u.s.s. enterprise several years ago, starring the current commander of the nuclear-powered aircraft carrier back when he was second in command. national security correspondent jennifer griffin is live at the pentagon. this is getting a lot of play. what exactly is in the vid snow. >> it's a lot of humor, a lot of gay bashing, homophobic jokes and simulated sex acts. the captain was the number two in command, the executive officer at the time, he starred in much of the videos. take a look: >> there are several complaints about this during these videos, never they personally but gutlessly through other channels. this evening, all of you bleeding hearts and you -- slow boy, let me go ahead and hug yourselves for the next 20 minutes or so because there's a really good chance you're going to be offended. >> this evening, we're going to go through some racy topics. >> the videos were shown over and over on the in house television system on board the u.s.s. enterprise back in 2006 and 2007. we are told that an investigation has begun and it's not clear whether the captain will be captaining the u.s.s. ser price when it leaves later this month. juliet: it's surprising with all those people on board who saw it multiple times that this is coming out now. why do you think that is? >> there are some in the navy who i've spoken to who think it has to do with the repeal of don't ask don't tell. it's clearly a vendetta that it was leaked to the virginian pilot, the newspaper that published the video and an article about it over the weekend, that's what got the attention of the superior officers. we're also told by the navy that he was vshly reprimanded back in 2006 and 2007 but it also was played repeatedly and it's not clear why this didn't go up the chain of command, why more wasn't done to stop the playing of the video at the time. we spoke to one woman who was on board the u.s.s. enterprise back in 2007. she was a nuclear engineer on board the ship, her name is jamesie philips, an she says she supports captain honors and that he was just trying to entertain the sailors at the time, and they have been on a long deployment, and that's why it was shown. so juliet, back to you. juliet: very charlesing. let us know what you think, twitter me at juliet huddy, let me know what you think. thank you for that report. appreciate it. jon: some new developments in a mystery we've been talking about for a while now, a search for a woman who disappeared after a car crash in the snow. ton tanya shannon's husband died in that crash last month. most of the snow is gone now, and that could make a new search benefit fcial. details straight ahead. one of the most violent drug gangs in mexico wants to show they are really the good guys. why they are calling for a one-month truce, and what it really means. during the break, you can log on to find the hottest stories on foxnews.com, just click on the most read tab to see what's burning up the web. juliet: welcome back, breaking news out of illinois now, serve crews have found a body while looking for a 40-year-old missing mom. police officers don't yet know if the body is that of tanya shannon, shannon disappeared after late night car crash that left her husband dead back in early december this, is new video from searchers, patty ann brown is in the newsroom and has the latest. >> reporter: it is a potentially tragic end to go this missing person's case. tanand her husband dale attended a party back on december 5th and after leaving that party their car crashed, leaving dale dead behind the wheel, with a blood alcohol level more than three times the legal limit. but when the car was found, 20 feet off the road after hitting a pole, tanya was not in it. there were footprints in the snow that led back to the the road, there was a slipper in the snow, police speculated she was picked up by a passerby or fell somewhere in the snow. they searched for just three days and then suspended the search until the snow cleared and today, 29 days after the crash, they started searching again, on foot, on horseback, and with a helicopter. it didn't take long at all before the helicopter spotted a body. this is about a mile and a half from the crash site, it was half a mile from the nearest road. the body was removed from the scene a short time ago. we still have no confirmation that it is 40-year-old tanya shannon, but she was wearing a red ball gown and hooded jacket when she left that party and witnesses say the body appeared to have red clothing. obviously this would be a tragic development in this case. tanya has four children, she and her deceased husband live in a small town of an some, 50 miles west. we'll let you know when police have a positive i.d. on the victim. juliet: patti ann, thank you very much. jon: some new information as a mexican drug cartel calls for a one-month truce, the gang, la familia, behind a reign of terror, including kidnappings, extortion, hundreds of murders and gu some beheadings but the head of that cartel was recently killed in a shootout with mexico can police, others have been arrested. let's talk about it with jason ahern, border protection and principal with the chertoff group. what do you make of this truce call? what's their motivation here? >> it's hard to figure exactly what might be their motivation. it could be just pure propaganda as well. they called for this truce early in december and just recently over the weekend they called for an extension. what i find amazing, they're trying to do some type of psychology, getting into the heads of the individuals who live in those communities, even to the point of wishing them a happy new year. it's hard to figure out exactly what's going on. jon: is it the robin hood approach, pretend you're one of the good guys? >> that's certainly if you look at it, it does point to it as the government doing the wrongdoing in mexico and they're the ones not accountable for everything that's happening wrongly in that area, but certainly they take accountability for those things for which they have been responsible which is a considerable amount of killings but we've seen this going back to the '80s and '90s with the colombian cartel, so there is a certain psychology and trying to engender the good will and support of people in those communities. jon: nazar -- lazario gon galez was killed by mexican police. maybe they need trial to -- time to figure out goz -- who's going to run the show. >> there's been a tremendous amount of chaos. when you look at what the mexican government has done, obviously they don't have it perfected b. there has been disruption in the cartels. they taken out the cartel leaders and certainly there's been killing that goes on between the cartelses that operate in mexico, killing amongst themselves fighting for supremacy and control. jon: president calderon obviously did launch that antigang, anticartel pledge since 2006, he's pledged to keep it up. he's got another 18 month necessary office. what happens then? >> that's the big question. certainly you do need to give a lot of credit to president calderon for taking the fight to the cartels in efforts and means that have never been done before by the government in mexico but the big question is going forward. eighteen months will run out quickly and it's going to be interesting to see which party wins the election in july 2012. jon: meantime, you've got those 30,000 people who have died in drug-fueled violence. that's mostly cartel on cartel kind of violence, right? that doesn't so much include, you know, people involved in gun battles, involving the military and the police. >> well, it's hard to break some of the numbers down. there are a lot of different methods of statistics that are gathered by the government in mexico. the numbers range between 28 and 32,000 but let's settle on 30,000. obviously there's been a lot of killing of the cartel leadership and some of the members in the cartel. there's been a lot of deaths by mexican law enforcement and mexican military. there's also been a lot of innocent bystanders who have been killed as well but the breakdown of the numbers are hard to get into the details because of the record keeping in mexico but the bottom line is 30,000 in the last four years, since december 2006 is the highest level of violence of anyone in theo any globe in the world. jon: steve, thank you. >> thank you very much, jon. juliet: back to the nut in california, jerry brown will be sworn in for a third term as governor today. but brown has changed a lot since he left office back in '83 and so that is california. the serious challenges he's going to be facing coming up straight ahead. and another tough year ahead for real estate. will we finally hit bottom in 2011? what's it going to take for the market to recover? we'll talk about that, coming up. jon: breaking news out of the golden state. we are awaiting the swearing in of california governor jerry brown this afternoon. brown won a solid victory in the november election but he's taking over a state that is on very shaky financial ground. claudia cowen, live in sacramento for us. familiar territory for jerry brown, but this situation in california now that he's taking over is a whole lot different from what he's seeing before, right? >> it -- >> it sure is. this is familiarterter for engineer oh brown. he's worn many hats and today he'll be sworn into office to begin his third term as governor, 28 years after wrapping up his second term and what a different california he inherits, jon. back when he was governor in the '70s and '80s it was a time of budget surpluses and ontime spending plans. this time, california is in a financial abyss, facing a 25-$28 billion shortfall by june of next year, a 12 percent jobless rate, and soaring pension costs for state workers. add to that highly partisan politics at the state capitol and it's been hard to find a compromise on budget issues. analysts say jerry brown will need his lifetime of political experience to address and solve these issues effectively. jon. jon: i was just looking on the chat, a number of our viewers remember when he was known as governor moon democrats beam. he's been a career politician all his life, and he's been known for some pretty wacky ideas, right? >> reporter: you're right, jon. back when he was governor in the '70s he did raise a lot of eyebrows by foregoing a number of perks of the top job, for instance, he didn't want to live in the governor's mansion or use the limit oarks instead, he slept on a mattress on the floor of an old downtown sacramento apartment and drove himself in a plymouth satellite sedan, he launched a communitycations satellite and space agency, his celebrity girlfriend at the time, singer linda ronstadt called him moon beam in ale ring stones article and the moniker stuck. he focuses on alternative energy, carpool lanes, and other areas that seemed unorthodox back then but which are fairly commonplace now, at his inauguration at the memorial auditorium, it gets underway in less than two hours, it's going to be a simple arrest, not cost a whole lot, less than $100,000 in keeping with the state's bleak financial picture and jerry brown's emphasis on frugality, after the ceremony he's stopping at a cookout for a hot dog. jon: and everybody has to carpool if they want to attend, right? >> reporter: perhaps, or walk! jon: claudia cowen, live for us, thank ou. juliet: unfortunately it looks like real estate is in for a bumpy ride, there's a huge backlog of homes. prices are falling, foreclosures are set to resume as banks get faulty paperwork in order. real estate analyst danny babbitt joins us to talk about this. i've been wait to go sell my condo for like four or five years now. i've been waiting and waiting and waiting. it seems like millions others out there that there's no end in sight. >> it's probably true for the move-up buyers, probably like yourselves or your condo is. the first-time buyer, we're starting so see prices stabilize, not improve but become stable. when that happens we'll see some of the buyers starting to move in as long as interest rates stay low and credit requirements don't become additionally tight. i think we're going to see a lot of struggles in areas that were overbuilt, florida, california, arizona, nevada in particular. juliet: i was going to say, when you have -- there's so much development there, several years ago, when the housing market was booming, and all of the sudden you have all of these places, as we're looking the at tv now, so many places where there was too much supply and not muff demand. >> absolutely. and you know, one area we're going to see some continued weak necessary think is in the high end markets. we haven't even begun to see the beginning of these loans that are resetting, a large portion of luxury homes in thenates, above $640,000, we're finding something called negative amortization loans, so buyers have been adding to the principal balance month after month and beginning the first wave of these mortgages will actually hit middle of this year and that goes out for three years. now, when that happens suddenly you can buy a mcmahon shun for $600,000, instead of a million dollars and the market takes a downward trend and that will be an interesting problem. i think we'll see more strategic short sales where buyers are saying i can afford to pay this but i'm not going to because i'm 100 grand upside down and don't want to be in that position for the next ten years. >> explain what a short sale is. people are foggy on that. >> when you sell the home with an agreement with the bank for less than what the value of the mortgage is, if the home is worth 600, you sell it for 500 the mortar forgives the debt. >> what does that do to the person selling? >> it takes six month necessary general, it hurts your credit but it's not nearly as disruptive as a foreclosure. usually a two-year recovery point to your credit. juliet: thank you, danny. jon: i don't like banks. can i just say that? >> i'm with you. unless they're giving me free money and that never happens. jon: we'll get your condo sold. it's something that folks in california deal with every day. thousands of travelers, stranded after a snowstorm shuts down a major freeway. kind of an unusual situation there. plus he's the chairman of the republican party but michael steele is facing a real battle to try to hold on to that job. and now a member of his inner circle is stepping down. we'll talk with him. republican national committee communication director doug heye joins us on the future of the republican party. for pain? oh, bayer aspirin? oh, no, no, no... i'm not having a heart attack. it's my back. trust me. it works great for pain. [ male announcer ] nothing's proven to relieve pain better than extra strength bayer aspirin. it rushes relief to the site of pain. no matter where you're hurting. thanks for the tip. [ male announcer ] for powerful pain relief, use bayer aspirin. and to fight pain and fatigue in t morning, try bayer a.m., the morning pain reliever. progresso. oh yes hi. can you please put my grandma on the phone please? thanks. excuse me a sec. anotr person calling for her grandmother. she thinks it's her soup huh? i'm told she's in the garden picking herbs. she is so cute. okay i'll hold. she's holding. wha? (announcer) progresso. you gotta taste this soup. juliet: it is a mess in the west. a winter storm stranding drivers on the main north-south highway in california, i-5. shut down between los angeles because of snow and ice. they're having fun and a lot of other people are not. it will stay shut for the next several hours until plows can clear the road. maria molina in is the weather center. a trucker was out there for 14 hours. and you look down the road, endless cars not going anywhere. >> they're not going anywhere. julia, we'll start to see improvement luckily as we head into tomorrow. seems like it is the same story over and over. typically get a lot of sunshine in the golden state but right now not looking too good for the past month and a half. so we do have some winter storm warnings out in effect up there. that is the area in pink. it includes the southern sierra, the grapevine, part of the 5 and parts of the kern county mountains. that is being impacted with a lot of heavy snow. as you head into higher elevations of 4,000 feet, feet of snow. lower down you get a little bit less, just a couple inches. that is any of to cause major problems out there. otherwise the wind is also a problem. wind gusts up to 35 miles an hour in this area because of the storm system just sitting here bringing in that moisture and also bringing in concerns for some localized flooding. juliet: maria, thanks for that report. we appreciate it. good luck to them out there. jon: a fox news alert. a majority of republican national committee members indicating they will not vote to reelect michael steele as chairman. that according to the website, poll lit co. he will chase his challengers in a debate as he tries to fight to keep his job. two of his top aides are heading out the door. steele's chief of staff, michael leavitt and his communications director doug heye just announced their resignations. joining me rnc communications director doug heye. you will be on the job two more weeks. why are you leaving, doug? >> as you mentioned we have these elections come up, come every two years when the party is out of power doesn't control the white house. so, we're going to elect a chair. maybe a new chair, may not be a new chair. i wanted to make sure whoever emerges from this election is able to start with a clean slate and pick the team they want to hit the ground running. go ahead? jon: is your departure a vote of no confidence in michael steele? >> no, not at all. i had a tremendous time over this past year working with the chairman. working with committee members and i'll tell you what i told him yesterday when i informed him that i was planning on leaving after the elections. i told him thank you because this is, i think really one of the great jobs in washington d.c. it's been a great honor to have it. it allowed me to come on with your audience and other audiences on fox from time to time. so i said thank you because i really enjoyed it. it's a real honor to be able to try to move that message forward and participate in such historic elections we had in november. jon: that is spoken like a true communications director. it is part of your job to shape the message of the republican party. michael steele, the chairman, has been known to say some things that didn't put necessarily the party in the most positive light. i'm reminded referring to the afghan war as president obama's war for instance. did that make your job tough? >> there are a lot of things make the job tough. if somebody speaks out of turn, lord knows if i speak out of turn i make my job tough. what people call gaffs and talk to reporters and flaks on the hill, republicans or democrats they will tell you what were perceived of gaffs really dropped after myself and mike leavitt to came on board to fix some of the problems we saw at the rnc. it also means that you have to keep on your toes. one thing i learned when challenges come up you have to confront them directly. you have to explain to viewers and voters exactly what the problems are. so that you can move on and talk about important issues. voters in my home state of north carolina or, pick the state throughout the country, they don't really care about the inner-workings of a party committee. they do care about jobs in their community. jon: let's talk about some important issues. republicans seems to me are on a very short leash in washington. voters sent them there, especially to the house, to try to change things around but how much time do you give it? i mean how much opportunity are republicans going to have to try to change some things in washington before voters, you know, get fed up? >> it is unclear but the good news that republicans have received that message. if you look how speaker designate boehner, can't wait to call him speaker boehner, finally, how he is really gone into the speakership. real austerity, real change. pledging to cut budgets in capitol hill. i can tell you having worked in the house and the senate you want to change how things are done on capitol hill, you start with congressional budgets. jon: one of the things republicans talked about doing is trying to do undo obamacare they call it, the president's health care plan. isn't that largely a symbolic move and if so isn't it a waste of time? >> i don't think it is a waste of time. it is something voters want happened. we may not get it all the way through with the president certainly not committed to changes in the health care plan. we saw it in town halls in the summer of 2009. certainly when the health care bill passed the house we unleashed something we called fire pelosi.com. it came a message that really drove politics throughout the country for the entire year and throughout the election. also why we think it is quite interesting to see the democrats haven't made any changes. obama hasn't changed personnel. nancy pelosi is still in charge of house democrats. we turned our fire pelosi message to hire pelosi, because we think that is good thing for republicans. we made course corrections. we don't know why the democrats haven't. tim kane will remain at the dnc it appears. we've gotten the message. it is a message or voters or democrats think they received from voters is keep on trucking and that is not the case. jon: doug heye, the outgoing communications leader for the republican national committee. if you wind up taking a job in new york, juliet has a condo she wants to sell you, okay? >> that is good to know. one lesson i learned if you're going on tv and debate with megyn kelly you better know what you're talking about or you're a goner. jon: doug, ohio, thank you. >> thank you. jon: rett's get more on this. chris stirewalt, fox news digital politics editor. let's talk about the boss at the republican national committee, michael steele, he is making interesting promises today about the debate. >> i heard from steele insiders this would be a rock em, sock em affair that steele was going to name names and going to go after people against the people who are looking to unseat him as rnc chairman. this is going to be a really contentious affair, jon. jon: why can't republicans just get along? they did pretty well in the house elections. they came close to taking over the senate. is all of this invite infighting seen as a good thing for the party? >> look, i think steele is feels like an agrief party. i think steele feels he has been treated poorly by his fellow republicans. that he has been held to unfair standard and that he has, he is the victim in all of this. i think what we can expect from him today is for him to lash out at what the steele camp believes are the entrenched establishment interests inside the republican party that have thwarted his abilities to be successful as rnc chairman. so he is, if he is going out, he wants to go out swinging. jon: but he has got plenty of critics who point to things like the amount of debt that the republican national committee is holding onto right now. >> well, the problem, jon, for steele, no matter what the financial picture is sort of irreduceable. this is the largest debt we're looking at probably $20 million for the rnc, the largest debt that the committee has ever been carrying forward. their best-case scenario is probably have $10 million in debt when they start the 2012 cycle. that is not where anybody wants to be. steele's expenditures have been a cause of great consternation for members. they have not liked it. they have pushed back against him through the his tenure. he can land a lot of jabs and probably do some damage to his opponents but whether or not he can get enough of the 168 members of this committee to vote for him give the committee's financial picture right now, that seems unlikely. jon: chris stirewalt. thank you. >> thank you. jon: you can get powered up every day. chris has his power play. go to foxnews.com, click on politics and you can read some very interesting stuff chris puts out just about every day there. julia? juliet: jon, many cash strapped cities are coming up with ways to fill budget holes and creating new taxes that could be coming to cities near you, coming up. you might also want to try lifting one of these. a unique sea salt added to over 40 campbell's condensed soups. helps us reduce sodium, but not flavor. so do a few lifts. campbell's.® it's amazing what soup can do.™ but my doctor told me that most calcium supplements... aren't absorbed properly unless taken with food. he recommended citracal. it's different -- it's calcium citrate, so it can be absorbed with or without food. citracal. as a part time sales associate with walmar when william came in i knew he had everything he needed to be a leader in this company. 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[ fele announcer ] lipitor is not for everyone, including peoe 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 ifou have any muscle pain or weakness. this may be a sign of a rare but serious side effect. let's go, boy, go! whoo-whee! 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. the two trains and a bus rider. the "i'll sleep when it's done" academic. for 80 years, we've been inspireby you. and we've been honored to walk with you to help you get where u want to be. ♪ because your moment is now. let nothing stand in your way. ♪ >> coming up on "america live", a west point grad who raised money to fund the vietnam memorial and served in president reagan and both bush administration has been found dead, dumped in a landfill. we'll have all the breaking news on this shocking story. and states getting together to block the babies of illegal immigrants getting automatic citizenship. we'll debate it. the ftc wants to regulate how you use the internet. lawmakers from both sides of the aisle say we'll block those new rules. we'll see you at the top of the hour. jon: well the weak economy is now taking its to on a lot toll on lot of cities and towns around the country. they can not get help from state and federal governments because they face huge deficits of their own. a lot of municipalities are crediting creative when it comes to getting cash. fox business network rich edson live for us in washington. so what are local governments doing to try to make up for these shortfalls, rich? >> reporter: jon, some might say creative. others are saying they're crazy. they have gone the traditional route, raised taxes cut services. some cities like new york are considering a crash tax which the government would send your insurance company a bill if first-responders help you out if you get into an accident. one local official says governments are getting inventive because these budget problems have no easy or popular solution. >> there are aren't really any silver bullets for local governments. what they can levy and taxes and fees on. what are largely determined by state governments that provide that authority. so there are lots of reasons why trying to look for new revenue sources is difficult. >> reporter: one town in alabama had a novel approach, jon. it just stopped paying its city pensions. there is plenty of opposition here. the insurance companies are against the crash tax. unions oppose cuts to pensions and nonprofits might be taking a hit. some cities are considering taxes tax-exempt organizations. national coin is of nonprofits respond to the idea. before cities and counties look to tax tax-exempt nonprofit organization as golden goose or pot of gold to solve their budget problems, they must recognize who they will hurt taxing the groups that are already committed to serving their communities every day. jon, look at these numbers. overall the budget situation is getting a little bit better for cities and states but still they face millions, sometimes billions in short falls in 2011. jon: the taxman always wants his money. >> that's right. jon: rich edson. thanks, rich. juliet: it could be a major break through in the fight against cancer. johnson & johnson partnering with a major medical center to develop a blood test that can locate a single cancer cell among billions of healthy ones. dr. manny alvarez, senior managing health editor at foxnews.com and a member of our fox news medical a-team. good to see you. they're calling it a liquid biopsy. >> in your intro, there is the biggest cancer research study in last decade. juliet: that was my next question. >> huge, huge. what it is looking at fre free-floating cancer cells in your bloodstream. in reality you're going to be able to do a simple blood test, identify the cancer cells and do something about it. juliet: when you go to the doctor for a physical, get a blood test and now we're treating for cancer? >> i will tell you whoth is going to work. this will be utilized nowadays in multiple cancer centers around the country. in d and der send here in new york, boston with sloane. they will use the iaea tiffness of cancer -- effects tiffness of cancer treatments. they're able to measure the amount of free-floating cells you have. they look whether or not the cancer treatment is being effective and if they find that the cells are sort of disappearing, cancer treatment is going to be great. if they're not disappearing, then they can amend the treatment before it is too late. and this is why this is such an exciting story. >> is there a downside though? is there a chance for false-positives perhaps? >> not necessarily. the technology has been clearly documented as effective. this is reports that have been published in nature prior to this. so the technology, awesome. juliet: give me a headline here to finish this out. >> right now the treatment for cancer might get come the completely altered. the future, yes, you may get a mammogram, a blood test and now doctors will be more effective in picking up early cancers and saving lives. juliet: that is incredible news. >> absolutely. huge. juliet: good seeing you. >> you got it. juliet: we have a lot more on the developing story. it is the lead story on our website. check out all the could have vage, cancer hunter. go to foxnews.com. jon: a teenager dies of an ecstasy overdose at a los angeles rave party. her family wants $5 million. but management says it was out of their control. >> this was not a normal weekend. it wasn't even a normal concert at coliseum. it wasn't even a normal rave concert at the coliseum. jon: does the family have a case in trying to sue the city of l.a.? a legal debate, next. juliet: welcome back. a teenager's family is now seeking $5 million from the los angeles coliseum after at 15-year-old girl, sasha rodriguez, died of an ecstasy overdose. sasha's parents say the coliseum manager should have known the rave she attended would attract drugs and minors. joey jackson is a defense attorney. we have a trial attorney specializes in wrongful death suits. this was called the electric daisy carnival. 105,000 people attended. a lot of the people are on the young side. 118 people had to go to the er. 23 were treated for drug overseas and alchohol over doses. raves this is essentially what they are. it is understood people are doing drugs at these events. her parents say the coliseum would know that the rave would attract promote, facilitate and with widespread illegal activity including drugs is that accurate, joey? >> i say absolutely not. let's talk about the facts first, if you look at the facts 118 people were hospitalized out of 185,000. that is less than 1%. when you talk about liability, the risks is perceived is duty defined. does the municipality have some duty? yes. but we can't make the duty so overbroad and far-reaching to forget about individual responsibility. parental supervision is imperative. so is individual responsibility and choice. juliet: but she was 15 years old. the cuttoff, you had to be 16. so she snuck in there. her parents say they didn't know she was going to a rave. is the coliseum responsible for in part for her deaths. >> they certainly could be. we won't know until the discovery phase and we. if the l.a. coliseum, opening up doors to 15-year-old girls. if the word on street hey you can buy ecstasy and take it there and dance and party all night, come it is like bees to honey. the argument that is personal responsibility doesn't go anywhere when talking about teenagers. there is reason we have drinking age and show i.d. to get into bars. their job to make sure the kids in there are of age and 16, which you could argue is still too young. if they know drugs are being sold and taken there they have to take reasonable steps to prevent the drugs from being sold and used on their property. juliet: go ahead. >> andrew, i hear you. listen when we talk about that if we take for example, that 99% of the people who were there acted responsibly were not hospitalized to what degree should municipality and police there? inn supervise anybody's conduct. it is too over broad and too far-reaching and what time do we hold police department as selling drugs to minors? there has to be parental sup veer vision. juliet: andrew, there was a moratorium on raids but it was lifted couple months ago in november. commissioners in that area said despite that the l.a. coliseum and sports arena there rely on this revenue, about 28% of their revenue, that is not the reason they lifted the moratorium. do you think that we will likely see more raids in the future should this lawsuit actually be successful on the parents part? >> well i think if it is successful it will certainly send a message. as a business decision a lot of these municipalities may close down the raves but they will probably sprout up in other places. it is known there is legislation being suggested i believe by a senator in california that they should, ban all these raves when it is known that you have young children going and taking drugs all night in large quantities, there should be things and steps that can be taken to prevent it. all the they're required to do is take reasonable steps. shouldn't have allowed the 15-year-old in. all they have to do is ask for identification. >> what if she had fake i.d., andrew? what will you do then? there will be teens to have false identification. we don't know that to be factual. people will slip through the cracks. should the municipal be responsible for every 100,000 people that come and have no responsibility whatever and sue for $5 million because someone dies as a result of their own misconduct? juliet: these city officials say they're concerned if they don't let the raves happen at a place city-sponsored and watched over by officials then you're going to have situations where you have these raves in backyard, secret type of things that really then get out of hand. it is going to be interesting to see what happens with this whole -- >> juliet, they have to regulate it and screen things properly and make sure drugs aren't being sold there. they have to take reasonable steps and make sure it is done properly. juliet: 16-year-olds going in there. 15-year-olds and under were not. seems like a pretty young age. thanks for joining us. >> thank you. juliet: we'll watch this for you. jon: coming up the move to try to repeal the 14th amendment which gives automatic citizenship to anyone born on u.s. soil. that includes the children of illegal immigrants. a fair and balanced report on this raging debate straight ahead. or annuity over 10 or even 20 years? 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