several high level gadhafi regime officials lead by the u.s. ambassador who was recalled from tripoli when the uprising began five months ago. the meeting was to deliver this blunt mess rage. gadhafi has no choice but to yield power. these u.s. officials tell me no additional meeting is planned because gadhafi must go was clearly delivered. but a gadhafi spokesman in a conversation with our ivan watson had a different take. >> this is the first step and we welcome any further steps and we are prepared to talk war and explain what is happening in libya. we don't want to be in the community. >> who participate? >> if i may, you know, it's not the time to name people but, you know, it's a first step dialogue, okay. >> but it was direct face-to-face in indonesia on saturday? >> yes. >> ivan watson with us live from the libyan capital. ivan, fascinating reporting there. what was the answer when the united states delegation, as i'm told, he has to go. it's nonnegotiable. he has to go soon. i assume the libyans want to drag this out. >> reporter: well, in that conversation, gadhafi government spokesman said that the libyan side took his time to try to explain their position to deny many of the accusations against gadhafi and the security services claim that they were human rights abuses. so we're hearing two completely different versions here. i didn't hear anything at all about a message being delivered that gadhafi had to step down and that the regime here in tripoli has been vehement about this that if that is going to be a precondition from the u.s. and its allies and nato before negotiations can take place. but this was a three-hour meeting, john, according to the state department. officials have spoken to us. and if they were just giving one clear blunt message, gadhafi had to step down, clearly a bit more than that was discussed at that meeting. >> and ivan, as we watch to see whether it continues, or whether it was one meeting in the u.s. and regime, some developments on the military campaign, including the first-time bombing of one target. tell us about that. >> reporter: that's right. the fighting is grinding on here. we're into four months of nato bombing. earlier this morning before dawn tripoli international airport was hit. a precision attack on a radar station there that nato says was being used to detect nato warplanes and libyans denying that completely saying that it was a sichl general target. the fifth day of fighting now in the eastern strategic oil town of brega where rebel fighters have been trying to attack gadhafi forces. they have run up against mind fields and have suffered casualties and today the government saying that they have killed up to 500 rebels who they say were able to attack in waves in the sea in small boats. that battle appears to be going on from both sides with disputing claims about who is in charge of that key town, the tripoli government, john, they are saying that they will turn braga into hell rather than let it fall into the hands of their enemy. >> more tough rhetoric from the regime. live tonight from tripoli, thank you. today's disclosure from this meeting comes nearly four months into the bombing campaign. fred townsend is a member of the external advisory board in 2010 and the senior fellow at the hoover institution at stanford university. the united states thought it was important to deliver this message r there risks that clearly now think there may be future conversations? >> to your point with ivan, it's in their interest to play this out. by the end of september, the current authorities that permit the nato bombing may expire. they want to play this game as long as they can. it's interesting that they would not name which libyan officials were there because that's very important. >> that's a key point whochlt was there? let's assume the united states was telling us the truth. they were blunt. they said he has to go soon, it's nonnegotiable. dot libyans at the table go back and deliver that same message to gadhafi? >> no. because what the libyans think that s that the bizarre is open. once you get the customer intent, that's the libyan way. that's the gadhafi way. the man has been around for a long time and has committed massive crimes against the ungs and still negotiated with him. he's now a war criminal. the international court has an indictment for crimes against humanity. what exactly do you have to offer this bandit. i don't think this report will mean much. >> so do you think it's a good idea? the idea is that they went to the for the first time represented the transitional counsel and a legitimate government of the libyan people and they decided to relay that face-to-face so they understood essentially, we've moved on, you have no choice, you must go, we must take your money and give it to them. >> john, we didn't have to sit down with gadhafi representatives to do that. we didn't do that in syria. it was very clear in the statement. we're not tied to him. he's not necessary. the fact is, you can make a very clear statement publicly and have it stick without sitting down face-to-face. there's an error of legitimacy that i convey sitting down face-to-face with him while he's still in power. >> do you think it's a mistake? >> i think what is really important is the meeting in istanbul and recognition of the transitional council. we have made it clear that we recognize these people and the question is, are we going to give them access and it would change the terms to gadhafi and the people of ben benghazi. this other stuff is really just vapor, in my opinion. >> but how do you judge -- how would you draw a threshold where you say the united states handled this right when? or how? >> well, the question is going to become, what are the results of it? what are the consequences of it? john, if we were to say that all of a sudden this meeting gadhafi left power, that meeting was a success, it was worth it, i think it's unlikely and i think it's likely to have no effect on gadhafi's thinking or reasoning or whether or not he stays in power. >> fred, thank you so much for coming in. today's disclosure of the meeting comes four months into obama campaign and months after the air rib spring in egypt. we had reports that mubarak was in a coma and then that he was out of coma. a bit earlier i spoke to the middle of the uprising and people on the streets do not trust that these reports anything at all the government tells them or the lawyers tell them at all. >> i think the lawyer's statement was to test the public's reaction. if people believe the trial is two weeks away and some don't even believe that mubarak is even hospitable anymore. and we've been deceived and lied to for years so now we question everything we hear. we've been extremely letdown by the military. >> if the goal was to generate sympathy in public opinion, forget the trial, then that failed? >> these statements have been met with ridicule, people are fed up with lies, john. >> and do the people trust the new government, the transitional government, the military government, essentially v. to put president mubarak on trial? >> it's been five months and very, very little has happened on the ground. nothing has changed. none of the goals of the revolution have been met. the regime is still very much there. and that's why the protesters have been there since friday the 8th and they have bound to stay foot until there is real change. until the reforms happen. still ahead, governor rick perry will decide if he enters the presidential race. and the markets were nervous today. gold was soaring. why? because concern of the u.s. maxing out on its credit line and could mean economic ar ma ged don. many of you don't buy t the political deficit is next. boy, i'm glad we got aflac huh. aflac! oh, i've just got major medical... major medical. ...but it helps pay the doctors. pays the doctors, boyyy! 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[ pigeons ] heyyy! hooo!!! the markets are getting a bit nervous. the dow industrial, s&p 500 and nasdaq and gold settled at a new high of $2 an ounce because of the uncertainty over a possible default. moodys suggesting that the debt ceiling should be eliminated to avoid "stability and" and the president met with house speaker john boehner and eric cantor but no deal. the house will spend time whether cutting the balance bill and whether it will veto. joining me is mark zandi and. we talked last week that if it got more serious in washington the markets would get skittish. was today a beginning of nervousness? >> yeah, i think so. i think with each passing day that we don't get an agreement, investors will start to grow increasingly nervous. stock prices will continue to grow south, ultimately interest rates will start to rise. and if we don't get an agreement in the next couple of weeks, the markets will be in turmoil. >> americans say yes, it's absolutely essential that we get a deal before we reach august 2nd and 39% of americans say we could pass the deadline and, in their view, not have economic turmoil. why the mixed message? are people just doing this for their political presence? >> we've never been here before. why would we ever want to take the chance of what would happen to interest rates and competence in america if we end up having to decide which bills we're going to pay, which ones we're not going to pay. what the debt bond holders don't have to worry about is the 14th amendment. we're spending $14 billion a day. somebody is not going to get paid on time. >> mark zandi, we can pass august 2nd and it won't be a big deal. i'll give you a few seconds to look them in the eye and say, you're wrong. >> yeah, i think you're wrong. now, of course, i don't know for sure. this is unprecedented but there is a $23 billion social security payment due on august 3rd that is not at all clear that there will be enough cash in the treasury to make that payment. so i think david is right. why would you want to take that chance? tp doesn't make sense. not for the social security recipients or for the economy or entire global financial system. >> david walker, the president meets with speaker boehner over the weekend and they are clearly not making any tangible progress. the house will go forward this week and senate will most likely vote on a balanced budget amendment and some other things that simply, to be honest, can't pass or even if they did pass the president would veto. they will move to the mcconnell plan and convince the republicans that they have your vote. do those votes undermine confidence in the market in a deal that might be reached? >> well, i think the markets know that those are not going to pass. you have to have two-thirds of the house and senate and the state that's not going to happen. it's preconditioned to something more substantive. the leaders have all said that they are going to raise the debt ceiling on it. the president has been calling for that. what kind of substantive dealer are we going to get? are there going to be budget controls for mechanisms and significant cuts that would be viewed as being credible by the rating agencies and by the american people? that's the real question. >> and mark, moodys today is saying, let's get rid of this idea. let's not have a debt ceiling and let the politicians get involved here. i don't see congress getting involved here in the short term. is it just because of this show down that it's necessary or a cumulative effect? >> well, i think that we've had trouble with the debt ceiling vote many times in the past and i don't think it's a very productive process, as we can see. so i'm very sympathetic of the idea to get rid of this debt ceiling debate altogether. having said that, i am hopeful that through all of this pain right now that the policy makers will come together and provide some meaningful deficit reduction. we're not going to solve our problems and at least make a down payment on those problems so there might be something good that comes out of that debate process. >> all right. you say meaningful. how dot markets describe meaningful? >> a ten-year reduction, 1.5, $2 trillion, that is what is expected in the marketplace. if you've got 4 trillion, that's the goal that we set for ourselves and it's the aproop pree ate goal. the markets would be off and running. i think that would be wonderful if we got nothing, that would be a problem because investors wouldn't like it and i'm sure the rating agencies wouldn't either. >> david walker, do you see a reasonable plan, perhaps behind the curtain right now because they are still pointing fingers at each other, is the mcconnell plus as i call it, the power to raise the debt ceiling and then congress names this commission that comes up with a package of cuts and vote up or down s. that a viable alternative, in your view? >> that's not credible in and of itself unless there's some type of trigger and mechanisms based upon deficit reduction and gives us more than the 1 to 1.5 trillion. by the way, the come back america initiative that lays out fiscal frameworks to show our way forward. one is 3 trillion plus in cuts over and 6 trillion plus in cuts over ten years. stay tuned. there's a way forward. >> we'll watch for that way forward. david and mark, appreciate your time tonight. good to be with you. thank you. still ahead, why the upper hand in this debt debate now does not necessarily mean long-term political gain for president obama. first, a key whistle blower in the news of the world phone hacking scandal is found dead. but my data is doubling. my servers are maxed out. i need to think about something else when i run. [ male announcer ] with efficient i.t. solutions from dell, doug can shift up to 50% of his company's technology spend from operating costs to innovation. so his company runs better, and so does doug. dell. the power to do more. so his company runs better, and so does doug. somewhere in america, there's a doctor who can peer into the future. there's a nurse who can access in an instant every patient's past. and because the whole hospital's working together, there's a family who can breathe easy, right now. somewhere in america, we've already answered some of the nation's toughest healthcare questions. and the over 60,000 people of siemens are ready to do it again. siemens. answers. a complete four-course seafood feast for $15. start with soup, then have salad and biscuits followed by 1 of 7 delicious entrees and finish with something sweet. all for just $15. ending soon, at red lobster. welcome back. here's the latest news that you need to know right now. a key whistle blower turned up dead in his home today. police called his death unexplained but not suspicious. murdoch's now defunt newspaper, editor encouraged reporters to hack into voice mails. the son's website is down on the security and taking credit. here in the united states, borders cannot find a buyer for its remaining 399 stores so it will liquidate, costing almost 11,000 jobs. still to come, the washington post and david gergen dissect president obama's handling of the debt crisis. and, next, 40u your confidence level of the economy impacts the president's re-election odds. you name it. i've tried it. but nothing's helped me beat my back pain. then i tried this. it's salonpas. this is the relief i've been looking for. salonpas has 2 powerful pain fighting ingredients that work for up to 12 hours. and my pharmacist told me it's the only otc pain patch approved for sale using the same rigorous clinical testing that's required for prescription pain medications. proven. powerful. safe. salonpas. we inspect your air filter, cabin filter. there's bugs, leaves, lint, crud. you'll be breathing that. i do believe it's part of a locust. make sure your alignments good. your brakes are good. you've got all sorts different things that you check off. your fluid levels. pretty much everything you could need. it gets done. it gets done quickly. and it gets done correctly. the works fuel saver package, just $29.95 or less after rebate. only at your ford dealer. you're a doctor. you're a car doctor. maybe a car doctor. trust and politicians are not words that seem to fit much in the same sentence these days. but when it comes to deficit spending in the country's borrowing limit, the numbers signature that obama has the upper hand. a new poll shows that 71% of americans disapprove of how congressional republicans are handling the debt ceiling negotiation. take a look at the numbers that are more evenly split. combine your current mood and history and what you see is that the president cannot afford for this showdown to end in a way that causes any more pain. i'm going to walk over the wall and show you -- first, it's your move. this is a consumer driven move and this is from the university of michigan. in may the economy has struggled, come back down. this is where we are right now in july. 63.8. remember that number. 63.8. because the average that it takes to win, the incumbent, the election is not until november. the incumbents that have won the average consumer confidence level have been in the 90s and the others below that, this is where we are today. at that number the history would show that president obama would lose. or here is one way to look at it. the incumbents, carter, george w. bush, here they are, they lost. below 80, lost, clinton, close to 100, george w. bush, above 90. where will the president be? right now, remember, he's in the 60s. another way to look at it is the economy is growing. they make the obama reagan comparison. he wanted an easy re-election. however, if you look at this, by the time reagan started to run for re-election, the company was starting to grow the year before the election. look at this. 9.1, 9.3, 8.1% growth, 8% growth, 7.1. a tough recession but as ronald reagan geared up to run the election over here, the economy was booming. president obama cannot be so confident. the only comparison that we have so far, 1.9% so far this year and reagan had -- will the president get growth anywhere like this. there's not an economist that thinks the economy will bounce back like that as the president runs for re-election. one last way to look at it, october, a way out, january the year before the election, president obama actually in slightly better shape than president reagan but because of the economy, president reagan ended up in election day, 2010, that is the key question. republican nicole wallace, veteran of the bush white house and john mccain presidential campaign and the 2008 president obama campaign and key battle ground states and contributor, founding member of the group, no labels. i want to start with the democrat on the table. when you look at that, the very sober economic numbers. so even though the president might now be in the right place the white house thinks, he's the grown up in the middle, if we get to default, unemployment goes up and markets get jittery. this president, even if he has the upper hand in this debate, could lose re-election? >> i think there's no question that the economy is the most important question on the table. the americans say it's the most important issue and even as the news is focused on the budget debate, 7% of the voters are saying that the deficit is the most important issue facing us. but i think that part of the reason that republicans are content to have the budget debate right now, as opposed to the debate in the economy, is because of the proposals in the 2012 election looked like the policies that got us into this mess in the first place. i think if voters understand that it t