hacking scandal. david cameron minutes away from a show down. two major proposals in the trillion dollar showdown over the nations debt. the first is called a possible break through. the second plan is under attack by democrats. all this next on "american morning". thanks for being with us, it's wednesday, july 20th, this "american morning". i'm kiran chetry. >> i'm ali velshi. do we have a lot going on today. british prime minister david cameron is about to get grilled by parliament. the newscorp phone hacking hearing begins in 30 minutes. cameron is expected to face tough questions about what some are calling a cozy relationship with rupert murdoch's media empire. >> go to used of parliament this morning. fireworks yesterday. the consensus, though, is david cameron is not likely to lose his job over this but that he's under enormous pressure right now. >> reporter: he's definitely is. he's got a lot to defend himself today. basically, this is a special day in parliament. they were supposed to go into summer recess but instead they are having this special address by the prime minister here. he's really going to try to prove a point here, that he's is going to underline the phone hacking scandal, say this is how i dealt with it and now we need to move on. here is how he put it when he was in africa for a trip. >> i don't underestimate the problem. parts of the immediate okay dreadful, illegal acts. police have questionses to answer about corruption and a failed investigation. politicians have been too close to media onus. these are big proximate but we're a big country and we'll solve it. >> reporter: now, the main issue he's going to have to teal with is why he decided to hire andy colson who was later arrested as part of the investigation into the phone hacking. this is something that was brought up yesterday in the hearings and it turns out that his chief of staff actually warned the british police not to brief the prime minister on these phone hacking issues. lawmakers today are clearly going to try to get to the bottom of this as you can imagine from the opposition labor party. >> david cameron said he didn't know about this either. thanks so much. >> it's going to be hard to top the intensity of what happened yesterday. the theater of yesterday's phone hacking hearings. two hours after telling parliament it was the most hufble day of his life, rupert murdoch took a pie in the face. a 26-year-old man armed with a pie full of shaving cream nails rupert murdoch from behind saying you greedy billionaire and it didn't take long for murdoch's wife there, leapt to her husband's defense. she tried to clock the guy. you see him slapping him. >> she landed a hit. it didn't actually hit rupert murdoch in the face. people were running. he did have to take off his coat. >> police took the 32-year-old jonathan bowles away. before the attack he tweeted it's a far better thing i do now than i've ever done before. >> it's interesting because we had shots of him, of the guy who did that who is now in trouble for doing that. he had shaving cream all over his face. clearly shows how quickly people jumped to rupert murdoch's defense. anyway he said he was humbled, but rupert murdoch is not apologizing or accepting a shred of blame for the corruption scandal that's rocking the media empire. murdoch and his son james faced hours of grueling testimony. >> do you accept that ultimately you are responsible for this whole fiasco. >> no. >> you're not responsible. who is responsible? >> the people i trusted and then maybe the people they trusted. >> murdoch's heir apparent, his son james it was suggested that james turned his back when victims were hacked. >> are you familiar with the term woeful blindness? >> would you care elaborate? >> it is a term that came up in the enron scandal, and willfuled blindness is a legal term. it states if there's knowledge you could have had and should have had but chose not to have, you are still responsible. >> do you have a question? >> the question was whether you were aware -- >> i'm not aware of that particular phrase. >> rebekah brooks, murdoch's former new york chief as appeared. she resigned on friday. brooks denies responsibility for the alleged hack being at the newspaper she once ran and insists she was shocked and disgusted when she heard reports about murdered school girls' phone being tapped. >> of course i have regrets. the idea that millie's phone was accessed by someone being paid by "news of the world" is abhorrent to me as it is to everyone in this room. and this is an ultimate regret that the speed in which we have found out and tried to find out the bottom of this investigation has been too slow. >> it's not clear if rupert murdoch helped or hurt his cause with his testimony. many observers felt that he looked old even foggy at times. this tweet from howard kurtz, quote, every detail of scandal that rupert says he's not familiar with makes him look more disengaged as a ceo. >> murdoch looked out of it. he looked like a ceo whose not in touch with what's is going on in his own company even as the evidence began to mount of wrongdoing at "news of the world" and overseen by people he had put in place. >> shareholders, ironically seem to like what went down inside parliament. newscorp stock price rebounded by nearly 6% after multibillion dollars worth of losses in the days leading up to the hearing. on another topic that's important to you. duelling proposals to keep the government from defaulting on his obligations, 14 days to go before the u.s. can't cover its bills. the house passed the cut, cap and balance plan. it cuts spending, caps the spending and calls for a constitutional amendment for washington to balance its budget every year. this plan has no chance of passing the senate. even if it did president obama repeatedly said he would veto it. >> as a symbolic measure to get the tea party people in congress cover. the president is praising a different proposal and this is the one from a bipartisan grouch senators called the gang of six. mix of spending cuts and tax changes along with upbeat earnings went well with investors. the dow posting its biggest gain the year up more than 200 points. the nasdaq and s&p 500 were also up. let's go to the white house now. what's the sense at the white house about these two sort of things that have developed, the cut cap and balance but more importantly the gang of six proposal. >> reporter: that cut, cap, balance plan that was passed yesterday by the house, very conservative plan. that's something that the white house, obviously, president obama has issued a veto threat. it's not expected to get anywhere. this was the big development yesterday. shortly before that vote in the house on the cut, cap, balance plan, president obama came out, made this unscheduled appearance in the briefing room and really kind of threw his weight behind this gang of six plan. the gang of six being that bipartisan grouch senators that for months had been working on a deficit reduction plan but had floundered as one of the republicans stepped away from that group. that republican, senator coburn has rejoined the group and the group presented their bill for deficit reduction yesterday to a few dozen senators. this is a pretty big plan, $3.7 trillion in deficit reduction or deficit savings often years. that's pretty close to the number of the $4 trillion that president obama was pushing. so president obama saying generally speaking he likes the idea here, but you have to take a look at this plan because it includes tax increases which is you know house republicans have been completely resist search warrant to and entitlement reform which democrats have been resistant to. this is politically very difficult on both sides and the clock is ticking. >> it would be possible for congress to tackle a plan like this before the august 2nd deadline? >> reporter: if you talk to the two top democrats in the senate, harry reid and dick durbin the answer is no. dick durbin said this isn't ready for prime time. congress especially the senate doesn't turn on a dime it takes a lot of time. this would create a further problem here. if you can't get something a big deal together or some sort of compromise in time for hitting that debt ceiling how can you go for this big plan because there are republicans who are not going to want to increase the debt ceiling and some republican votes are definitely needed in the house. they don't want to increase that debt ceiling without a deficit reduction plan. all eyes on this fall back plan, a more modest deal with smaller use that senator reid and senator mcconnell are working out in the senate. the president said that's still the fall back, the bare minimum that needs to be done. >> it's just strange because you got some people saying can't get this deal done, not hopeful. other people say there's stuff going on behind-the-scenes. then there's this gang of six. leaders saying it can't be done in time. hard to keep track. we're that you feel you are there helping us to do that. >> reporter: it's difficult. another budget fight this time kids are caught in the middle. the memphis school board voted to delay the school year until the district gets $55 million that it says the city owes it. the only board member who voted no said you can't ask the city for money it doesn't have. here's both sides. >> someone has to assume responsibility for the education of the children in the city of memphis and i don't think the city council can be exempt. >> i'm in support of having assurances and moynihan in the back. but i think 55 was an unreasonable amount to be expect at this particular time. >> now the school district doesn't get the money by august 1st when teachers are supposed to report network it says it can't cover their paychecks. they also said they already laid off about 1500 people. >> and the kids are caught in the middle. more trouble for air traffic controllers. the faa says it removed one from his post earlier this month when he failed an alcohol test during his shift. the controller worked at the denver center which is in charge of high altitude air traffic over several states. there were no problems with operations or any air during the shift but, again, testing positive for alcohol during his shift so relieved from duty. beware of little dog. good thing they were wearing masks. l.a. county police released the video of two robbers one with a rifle who were chased down the street by a chihuahua. they got away with some cash but didn't stick around for the rest. >> that little dog had no idea he weighed 10 pounds. he said, i don't know who you two are but get the heck out of my store. >> the dog is so small. he hardly gets in the picture there. muscling off two guys. one out of every five fast food restaurants may be misleading you when it comes to counting calories. >> what? >> because you go there to eat healthy. a nutritionist went from chain to chain. she found 20% of the menus at those restaurants low balled the calories. more on what she found in our 7:00 hour. we'll break it down for you. i don't know if you want to know this. >> it explains why i'm getting a little fat. >> you are not. >> our question of the day, we want to know what your favorite fast food guilty pleasure is. let us know on facebook. be honest. >> we have some good ones. >> your going to reveal yours right now? >> i can reveal one every time you ask. i'll start with the next one. >> blooming onion. >> that's a good one. >> that's not good for you. probably has two weeks worth of fat. but it's an onion so it's a vegetable. still to come this morning, it's why they call it extreme sports. a motor cross rider flies off his bike in mid-air. what comes up must come down. >> and courtland, new york is usually buzzing waiting for the new york jets to open training. >> hacking allegations this morning. guess who they are claiming they victimized. we'll explain a turning of the tables, so to speak. 15 minutes the hour. it's the android-powered phone that mixes business with pleasure. so let's get our work done, america, so we can all get back to playing "angry birds." the motorola expert from sprint. trouble hearing on the phone? visit sprintrelay.com. vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. auto insurance is often handed down from generation to generation, because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto insurance quote. u.s.a.a. we know what it means to serve. you know, the ones who do such a super job, they're backed by the superguarantee®? only superpages®. wherever you are, wherever you're going, you'll find the super business you need. so next time, let the good guys save the day. get the superguarantee®, only at superpages®. in the book ... on your phone or online. welcome back to "american morning". a potential break in a major hacking investigation that's under way here in the u.s. the fbi arrested at least 16 people for alleged cyber attacks. >> most of them are thought to be connected to this hacking group which you've heard referred to as anonymous. it attacked pay pal and other credit card websites. susan candiotti joins us now. this is sort of an umbrella hacking group? >> didn't they try to claim today they hacked newscorp? >> there's some alleged connection to that too. so, yeah. certainly had they are not so anonymous any more. they had names like reaper and toxic. so by the numbers we're talking about nine states were involved. 35 search warrants served in those states. at least 16 people have been arrested. more people in europe as well. so this is a huge case. and what happened was this they spread out yesterday executing search warrants, seizing records and computers and making all these arrests in all of these states. a lot of these searches took place in the state of new york but no arrests were made in that particular state. all of this had to do with taking revenge according to the fbi, taking revenge on what had happened to julian assange after the wikileaks scandal, so people who supported him who were unable to make donations to pay pal, because pay pal cut them off, so these hackers are suspected of going into other computer systems and trying to mess them up. it's called denial of service where they overload the system so much -- >> if you're trying toe use pay pal you can't get to it. they did the same thing to visa and mastercard. >> this group got them to support them and overloaded other systems. the feds went after them. so they are charged with conspiracy and in a lot of trouble. does this mean the end? no. cyber security big thing and the feds say the investigation goes on. >> they are never ones to hide the claim of responsibility. they proudly said -- >> that we did this. >> if it is indeed true they hacked newscorp and had emails that they claim they are going to dump like a document dump today. i don't know if it will happen. it will be interesting if it does. >> a lot of people will be watching. they don't like -- they do like to brag about it. post it on other websites. look what we were able to do or tweet about it. it doesn't help their case because you alert authorities about what's going on. >> all right. susan, thank you so much. little more than half an hour we'll break down why the fbi is so concerned about these cyber attacks. we'll be talking to the president of a cyber security group. the big question is are we armed to deal with them? >> let's check on what's going on with the weather. jacqui jeras is in the severe weather center. >> we're watching a couple of storms and keeping our eye on the heat which has been so unbearably brutal. i want to show you, to help put it in perspective. this is from noaa. this shows you how the heat has been building since july 13th. making its way up to the north and building to the east. this is a huge dome of high pressure which has been bringing temperatures in the 90 to 100 degree plus range and there you can see the forecast by tomorrow finally bringing a little relief to parts of the upper midwest. you got to get through today first. one of the big things that's been making this heat so brutal, there's no relief at all. look at the heat index. minneapolis it feels like 88 degrees to wake you up this morning. 76 in cedar rapids. look at chicago being feels like nearly 80 trees. so this heat still fwripg the nation's mid-section with advisories here. great weather up in new york and along the east coast but the excess jeff heat watches have been posted tomorrow it heads into the northeast and mid-atlantic and will stick around into the weekend. back to you. so this motor cross rider hitting the eject button. he went air borne. during a race in minnesota. totally separating from his bike and falling over 30 feet to the ground. apparently he was okay. they are daredevils. they seem to cho how to land. >> he got back on his bike and finished the race. he went from 35th to 14th after that. i don't under that. >> still to come this morning, prime minister david cameron moments away from testifying in the uk phone hacking scandal. he'll have to explain this alleged cozy relationship between members of the government including himself and rupert murdoch's media empire. >> plus the space shuttle "atlantis" on its way home. i spoke with the crew earlier this morning. here are their thoughts in being part of the last shuttle mission of all time. >> we want to know what's your favorite fast food guilty pleasure. we'll get a ton of response. we thought it would be fun to take a break from talking debt ceiling. >> we're getting a remarkable response. we'll share your comments throughout the morning. [ male announcer ] get ready for the left lane. the volkswagen autobahn for all event is back. right now, get a great deal on new volkswagen models, including the jetta, awarded a top safety pick by the iihs. that's the power of german engineering. hurry in and lease the jetta s for just $179 a month. ♪ visit vwdealer.com today. . 27 minutes after the hour, minding your business this morning. the dow jumped 200 points yesterday making at any time best day the year for blue chip stocks. strong housing data and corporate earnings reports pushed stocks higher. apple breaking records with its earnings report. the company announced profits doubled last quarter. the stock also surged over $400 a share in after hours trading. 20 million iphones were sold last quarter. that's a new record. more big earnings report on tap today, altria which owns philip morris, blackrock and united technologies report earnings in the next couple of hours. american express, e-mail and intel announce after the close bill. investors like's rupert murdoch's testimony to parliament yesterday. company shares surged 5%. the murdoch family still lost about $750 million in company stock holdings since the scandal broke. new mexico, tennessee, maryland, virginia, south carolina are under a review for a possible downgrade. moody says these states are most vulnerable when it comes to debt talks in d.c. people employed at government data centers across the united states will lose their jobs. the "new york times" reporting 40% of the federal government's data centers will be shut down in a move towards cloud computing which means storing information remotely through internet providers. don't forget for the very latest news about your money check out the all new cnn money. "american morning" will be back right after this break. [ jerry ] i'm a grandfather, a retired teacher, and i count on social security. here's what i'm not... a pushover. right now, some in washington want to make a deal cutting the social security and medicare benefits we worked for. wi