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ERIN BURNETT OUTFRONT

Interview with Herman Cain

Aired October 13, 2011 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ERIN BURNETT, HOST: Well tonight international legal news, DSK gets off again. The GOP primary is getting hairy. We cannot resist asking Herman Cain about it. And the "Bottom Line" on Cain, he's leading in the polls, but is he for real? We find out during our interview with him tonight.

Let's go OUTFRONT.

Hello, I'm Erin Burnett. OUTFRONT tonight presidential candidate, Herman Cain, another good day for the former Godfather's pizza CEO. In a poll this afternoon, he now leads in key swing and must win Florida -- Cain beating Romney there, 34-28. This comes on the heels of a national poll yesterday which put Cain in the lead.

Now, CNN's Polls of Polls show that Cain is still behind Romney. Not just in that margin of error there, 23-20. Whatever the case, it is no question that Herman Cain's popularity is surging.

The national poll has you at number one. Now the poll has you leading in South Carolina and Florida. What's your family thinking, and why do you think this happened, that you've surged to the top?

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Well, my family, they are not surprised because they know me from my business career, because I've always done some challenging things. But I believe that this happened for two reasons. And it was first evident with that Florida straw poll.

First, it demonstrates that the voice of the people is more important than the voice of the media, with all due respect. Because for a while, as you know, some people in the media tried to paint this as a two-man governor-on-governor race. The second key message is message is more powerful than money. I have not spent, nor have I been able to raise the kind of money that my major competitors have. But yet we have been competitive because of the strength of my message, and the specificity of the solution that I put on table.

BURNETT: So let's talk about 9-9-9. Obviously --

CAIN: All right.

BURNETT: Yes, I know, you're ready for this one. OK. So I have a "Strike Team" on this show, sir, where we have 20 CEOs, entrepreneurs and investors and they're voting on all sorts of things about the economy, but they voted on which Republican candidate would be best for the economy the day -- just yesterday.

They had some BlackBerry issues, so we didn't get full votes, but close to it, 15. Twelve of them said Mitt Romney. Two said Jon Huntsman. One said Rick Perry. None voted for you. And then I asked about the 9-9-9 plan. But this was interesting.

Nine of them said it was a gimmick. Six of them said your plan is serious. I wanted to ask you this; 9-9-9 is a goal, right? I mean you're not going to just wake up to it -- how long does it take in your vision to have 9-9-9 in full effect?

CAIN: The first 90 days of my administration as president of the United States of America, because this economy, which is on life support, can't -- it can't wait. Let me address those who thought it was a gimmick and tell -- and explain very quickly how we came up with this.

This economy is on life support. We took five revenue sources that are currently being collected through taxes that cost us $430 billion a year collectively for filing and compliance. So we looked at corporate income taxes, personal income taxes, capital gains taxes, payroll taxes and the death tax. Then we said we want a structure where we can expand the base.

But the only way to expand the base was to bring in retail sales. And what is the lowest rate that would be simple, fair, efficient, transparent and revenue-neutral? This is how we came up with the nine percent rate on corporate tax, a flat rate, personal income tax, a flat rate, and a nine percent retail sales tax.

So we derived this by using existing revenue numbers. So it is not a gimmick. And we have also had it scored, and it will boost this economy and create six million new jobs.

BURNETT: And I know you're going to be coming out with that scoring report soon, right? Can you tell us when?

CAIN: Yes. We've already had the scoring done. We are just trying to clean it up such that when we present it to the public it won't raise a lot of questions. So we'll have that done within the next week. And we'll make it available.

BURNETT: All right. So let me ask you this because we just talked about the poll that came out this afternoon where you're leading in Florida with a significant margin over Governor Romney and by just a point, so within the margin of error, but still in an early voting state, South Carolina. So I just took a few of the early states, New Hampshire, Iowa, South Carolina, Florida.

If you look at the current sales tax in those states, New Hampshire is at zero. The others primarily at six percent, so voters in those states watching tonight see that and let's look at New Hampshire. They go on paying zero now, even though Mr. Cain gives me a cut on my payroll tax, I'm getting a nine percent sales tax and I'm getting a nine percent income tax rate. A lot of people say that will result in an increase in people at the bottom of the income level in this country.

CAIN: Here's how I respond. This is something new to the public to say that you're going to pay a sales tax on retail sales of nine percent. But at least you know what it is. The problem with our current system is that there are embedded taxes and sneak taxes in the current tax code.

BURNETT: All right, so the fundamental question of regressivity, that a sales tax that applies to clothes and to food as I believe yours would, hits the people who spend the majority of their income on food and clothes, that being the poorest people in America.

CAIN: It's not regressive. Take an actual example. The reason some people say it's regressive is because that's the way they think, relative to the current paradigm, and the current tax code. If I can, very quickly, let's take a median income family of $50,000 a year. If you want to use $25,000 a year, just cut these numbers in half.

A family making $50,000 a year, which is around median income, under the current system, they're going to pay $10,200 in taxes under the 9-9-9 plan, they're going to pay $4,500 for that middle nine. And that leaves them 5,200 -- $5,700 to apply to sales taxes that they would pay on that third nine on food and shelter and then if they buy goods, no taxes on used goods.

So the actual purchase behavior, we can't predict. But it is not regressive. In fact, it empowers those that make the least amount of money because you don't pay the sales tax on used goods.

BURNETT: All right, so the payroll tax that you would get rid of, fund Social Security now, if you got rid of it, are you getting rid of Social Security? What's your goal for Social Security?

CAIN: No, we're just collecting the Social Security FICA dollars a different way. Social Security, I have another solution for that. It's called an optional personal retirement account. So we are still going to collect the revenue for those programs. But then we're going to solve that problem totally different, because that's a totally different problem that we need to work on.

BURNETT: All right, so individual retirement accounts. Let me ask you this.

CAIN: Yes.

BURNETT: You've been giving what some say is a tough love, others say is insensitive message to the unemployed, telling them you know don't blame banks, blame yourselves. What is the message here?

CAIN: First of all, the message was directed at the people demonstrating on Wall Street. It wasn't directed at the 14 million people that are unemployed or the millions of people that are underemployed. One of the reasons I'm fighting so hard for this 9-9-9 plan, I want to put people back to work. And according to the scoring from my 9-9-9 plan, this economy would grow at approximately a five percent rate and will create six million new jobs. I'm out here fighting for the unemployed.

But what I'm saying is those people that are protesting Wall Street I don't feel any sympathy for you because Wall Street did not create these bad economic policies. This administration did. This administration spent $1 trillion, and it didn't work. This administration wants to spend another $450 billion, and it will not work. So my comment was directed at the Wall Street demonstrators. What are they looking for -- another entitlement program? Well, I can tell you in a Cain administration there will not be a new entitlement program. Our programs will all be designed to empower people to help themselves. That was the intent of my message.

BURNETT: Do you believe, sir, that the bailout of the banks was successful?

CAIN: I believe that the bailout of the banks was partially successful. What I didn't like about the bailout is that it was administered in a discretionary fashion. Those dollars were never intended to bail out a car company. It wasn't intended -- the American people weren't told that the administration was going to pick and choose who the winners and the losers were going to be.

That was the problem I had with the program, even though some banks may have benefited. Government's role is not to pick winners and losers. That was the biggest problem I had with the whole bailout program.

BURNETT: All right. OUTFRONT next what does Herman Cain think of China?

(BEGIN VIDEO CLIP)

CAIN: We won't have to look back at China. We will leave them in the dust.

(END VIDEO CLIP)

BURNETT: And then Michael Jackson's death trial. Doctors and sleep experts say his care was beyond comprehension today in court. And we talk to Steve Mann (ph), a comedian diagnosed with cancer (INAUDIBLE) to perform on "Letterman".

OUTFRONT returns.

(COMMERCIAL BREAK)

BURNETT: The number tonight, 28. That's roughly how many employees Google added every day during the third quarter. Worldwide that was 2,585 workers. Internet search giant reported a profit of $2.7 billion earlier today. Good to see someone hiring, but obviously doesn't put a dent in the 14 million unemployed in this country.

Well Herman Cain is rising in the polls and the 9-9-9 plan obviously getting pretty much all of the attention. But if he's going to win, he cannot just run on a tax plan. Let me ask you about a social question that links into the unemployment. Bob Johnson was on CNN this morning, obviously the founder of BET. And he was talking about African-American unemployment which is nearly twice as high as the rest of the country. And he has a plan that he says is going to fix high unemployment among African-Americans in America. Here he is.

(BEGIN VIDEO CLIP)

ROBERT L. JOHNSON, BLACK ENTERTAINMENT TELEVISION: Companies who are seeking to hire VPs and above or to issue contracts to businesses would voluntarily, and I stress voluntarily, agree to interview at least two African-American qualified candidates.

(END VIDEO CLIP)

BURNETT: Does America still need affirmative action?

CAIN: Well, let's talk about how I would address that same problem. I believe in empowerment zones. Most of the unemployed black Americans in this country are in these mostly economically depressed areas. It could be, and I'm only using this as an example, because we haven't finished establishing the parameters yet. Instead of in a designated empowerment zone, it being 9-9-9, it could be, as an example only, 3-3-3.

What this does, because you have a lot of African-Americans located in cities like Detroit, disproportionately, it would encourage businesses to stay in business there or to move there. It would encourage people to work there, because if you live in the empowerment zone, you're going to pay a smaller percentage in taxes.

BURNETT: As an overall concept, though, outside those zones, do you think there is still a place for an ideal like that, that you would make sure that you interview two African-American candidates for every higher level position as a form of affirmative action?

CAIN: I don't think you need to make it mandated or anything like that. The problem with things that start out voluntary is that you get some overzealous liberal who will later on say it ought to be required. I served on the board of directors for several well known corporations for nearly 20 years of my career. I know that corporations are already voluntarily making sure that they feel fill the pipeline with people from all ethnic groups.

BURNETT: All right, so no mandatory affirmative action.

CAIN: No.

BURNETT: Well now you're number one in the polls, it can't be all 9-9-9, even though of course it's catching up. Spirit Airlines launched a campaign today with the -- I know you saw that. You said you didn't actually endorse it. But we know where they got the idea. Let's put it that way.

CAIN: Right. BURNETT: But foreign policy matters, too, for the front-runner. Two wars, this week's alleged terror plot by Iran in the United States. What is the Cain doctrine?

CAIN: I'm glad you asked. The Cain doctrine is an extension of the Reagan doctrine. Reagan's doctrine was peace through strength. The Cain doctrine is peace through strength and clarity. We need to clarify who our friends are, clarify who our enemies are, stop giving money to our enemies and let the world know who our friends are. I happen to believe that this attempted assassination that Iran has its fingerprints all over, based upon the reports that we have seen was because this president is perceived as weak.

And this president is perceived as not standing with its friends in the world. This is why we want to clarify it. For example, I have been very outspoken about -- under a Cain presidency that we will stand with Israel. I have said, if you mess with Israel, you're messing with the United States of America. Secondly, I believe that there are some things that we can do that this administration is not doing in order to show strength instead of weakness. As far as upgrading some of our ballistic missile defense systems that we have, which we have a great advantage in the world, I think we ought to make that advantage bigger.

BURNETT: What is the biggest foreign threat to America? What country or region right now?

CAIN: The biggest threat to the United States of America is the unknown. Not what we know. But what we don't know. In terms of a specific country, I would have to say Iran and North Korea. They're very volatile and very unpredictable, which gets back to the unknown. And relative to Iran, what I would do, we already know that Iran is not going to do what we want them to do. So my approach is quite simple. These ballistic missile defense systems that I talked about earlier, I believe we need to invest in upgrading those systems so that they can detect ballistic missiles from launch to impact, and that gives us more time to be able to detect and destroy them, if they fire at our friends like Israel, and if they fire at the United States of America.

BURNETT: Modern "Star Wars"?

CAIN: That's not as far as -- that's not totally modern "Star Wars". That's enhancing capabilities that we already have. Phase two would be to have "Star Wars" type missile defense capabilities that are located in outer space, which is one of the reasons that I want to relaunch our space program and get away from this dependent upon Russia in order to be able to get into outer space.

BURNETT: And what about China? I know you've recently visited there. You spoke about it. Do you think China is on balance a friend of America or a foe?

CAIN: I think they are between being a friend and a foe. They want to keep a relationship with the United States for economic reasons. They want to learn as much as they can from us militarily. Here's how I plan to deal with China, outgrow China. Once again, we're not going to be able to dictate to China what they do about currency. We're not going to be able to convince them not to develop their nuclear weapons program or their military. Let's outgrow China. Here's how we do it. When this economy is growing with my 9-9-9 plan, we will be growing at a robust rate rather than this anemic rate that we are growing at today while China is growing at nine, 10, sometimes 11 percent.

Once we are growing at that rate on a $14 trillion base, even though they're growing at 10 percent on a $6 trillion base, we don't have to look back. Here's another sweetener in my 9-9-9 plan. I know you'll get tired of me coming back to it, Erin, but guess what, there's some sweetness in here. On the first nine percent of corporate profits, you are allowed as a corporation to deduct purchases, as long as you purchase those ingredients or components from U.S. companies. So if we are growing at a robust rate and our products are more competitive, we won't have to look back at China. We will leave them in the dust.

BURNETT: And still OUTFRONT, the one question I could not resist asking Herman Cain and trust me, this one wasn't easy.

(BEGIN VIDEO CLIP)

(LAUGHTER)

BURNETT: Yesterday --

CAIN: Erin --

BURNETT: Yesterday we spoke -- I've got to get through the question, all right.

(END VIDEO CLIP)

BURNETT: And the Republican response to the bill, Obama jobs bill. Will it be more successful or will the president win out (ph)?

(COMMERCIAL BREAK)

BURNETT: Now a story we can't resist. Now on Monday you may remember we ran a story about Herman Cain's rise in the polls.

(BEGIN VIDEO CLIP)

Herman Cain won the Florida straw poll and is leading in a number of other states. And yet, a recent "Washington Post" headline called him the Republican flavor of the month. "TIME" magazine asked, "Herman Cain: Flash in the Pan or Serious Candidate".

(END VIDEO CLIP)

BURNETT: We couldn't resist asking the question. What is it about Herman Cain that some people seem to not like? That's when we realized, unlike the other candidates, Herman Cain has a mustache. If elected, Mr. Cain would be the first president with facial hair since William Howard Taft. And when we spoke with Herman Cain today, we couldn't resist asking him about it.

The American Mustache Institute has officially endorsed your campaign. I don't know if you noticed, but they told us you're actually up for the Robert Goulet Memorial award. Yesterday --

CAIN: Erin --

BURNETT: Yesterday we spoke -- I've got to get through the question -- all right -- with Dr. Aaron Perlut, with the chairman of the American Mustache Institute and he had this to say to you, sir.

(BEGIN VIDEO CLIP)

DR. AARON PERLUT, CHAIRMAN, AMERICAN MUSTACHE INSTITUTE: Without question we've seen an uptick in his popularity and that has no doubt been related to the support of the mustached American people. So you know I recommend of course that Mr. Cain continue to reach out to the mustached American community and I think also to define how his 9-9-9 plan would encompass the proposed $250 tax deferral that the American Mustache Institute has been seeking from the U.S. Congress and the IRS.

(END VIDEO CLIP)

BURNETT: What do you say?

CAIN: Let me -- let me answer the second question first. No deferrals, no loopholes, no special credits. That's the beauty -- that's the beauty of the 9-9-9 plan. So I have bad news for them. We're not going to use the old tax code so they won't need that deferral. Now relative to the mustache, I've had this mustache so long I don't even remember when I started wearing this mustache. And so I can assure them that I am going to continue with my mustache because just like the glasses on my face, it is a part of who -- what makes me look like who I look like, so I'm sticking with the mustache.

BURNETT: Sorry, we just couldn't resist. FYI, the American Mustache Institute did not stop there. They also threw their support behind somebody else.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's no question that all of the mustached American people always have their mustaches out front, particularly the American Mustache Institute.

(END VIDEO CLIP)

BURNETT: Thanks for your support, guys. We have a stash of stories about facial hair ready to go.

All right, coming up, the GOP jobs bill does it spell the end of Obama's health care bill and of financial reform?

And then more from our interview with Herman Cain, he's leading in the polls, tells us he's for real. We bring in our experts James Carville, Gloria Borger, David Frum, John Avlon, and the latest from the Conrad Murray trial. Medical experts shocked by what they heard about Michael Jackson's care today.

OUTFRONT returns.

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show. Stories we care about. We focus on our own reporting, find the OUTFRONT 5.

First up, Joshua Komisarjevsky will face the death penalty for the 2007 deadly home invasion in New Haven, Connecticut. Our producer in the court says Komisarjevsky showed no emotion while staring up the jury. He's found guilty of all 17 counts. Steven Hayes has been sentenced for the deaths of Jennifer Hawke-Petit and her daughters, Hayley and Michaela.

The only survivor, Dr. William Petit, called the verdict a relief.

Number two: an 11-year-old Maryland boy still missing tonight, his stepfather has been charged with first degree murder. The boy's murder was found dead in her home Wednesday night.

OUTFRONT has been in contact with Maryland authorities all day. They tell us Curtis Lopez, who is estranged from his wife, was arrested in Charlotte, North Carolina after he gave inconsistent statements to police. The 11-year-old William McQuain has not been seen since September 30th. Police are asking anyone with information to come forward.

Number three: Research in Motion, maker of the BlackBerry, says service has been fully restored after its largest outage ever. Executives say the outage was caused by a hardware failure followed by the failure of a back-up system. The result: a three-day outage that spread around the world like a terrible bubonic plague.

Investors have this shrugged of the news. The stock only down 18 cents over the past week -- and our BlackBerrys are working again. Thank God.

Number four: Senators John McCain and Rand Paul laid out the Republican alternative to the President Obama's jobs plan. Senator McCain's press secretary told OUTFRONT the plan would simplify the tax code by eliminating loopholes and deductions and also reduce the overall rate -- something the president has sort of seemed in line with before.

The Republican plan includes the repeal of President Obama's health care bill and the Dodd-Frank Financial Reform Act, something obviously he will not go along with.

And it has been 69 days since the U.S. lost its top credit rating. What are doing to get it back?

Ratings agency Fitch not helping today, placing Bank of America, Morgan Stanley and Goldman Sachs on a review for a downgrade.

When I talked to Herman Cain earlier, of course, I asked about his plan for getting back to a healthy economy, the 9-9-9 plan. But I also asked him about whether or not he could go the distance in this race. Take a listen.

(BEGIN VIDEO CLIP)

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I am for real. People who know me -- and this is what people will learn in this book, "This is Herman Cain." They will know that I am in this to win it. I am not in this to try to raise my profile or get a TV show.

(END VIDEO CLIP)

BURNETT: All right. Here's what two new state polls tell us.

In Florida, the crucial state to win for the nomination, Herman Cain ahead of Mitt Romney, 34 percent to 28 percent, in a poll by the American Research Group.

In South Carolina, an early primary test for conservative Christians, Cain a tick ahead with 26 versus 25 for Romney.

I'm joined here in studio by John Avlon, senior columnist for "Newsweek" and "Daily Beast." And in Washington, our chief political analyst, Gloria Borger.

Thanks to both of you.

Gloria, the polls seem to say he's for real. Is he?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, he's for real now. I think the question, Erin, is how long is he going to be for real? Because Herman Cain, and you showed it in the interview tonight, really is going to undergo an awful lot of scrutiny. Not only on the 9-9-9 plan, which we've heard enough about, but also on everything related to his career and his life. I mean, this is what happens to presidential candidates.

He has to start backing things up. You know, he's done a bunch of interviews in which he said things like, "I don't have the facts to back this up." Well, he can't say that anymore. He needs a campaign infrastructure.

He needs to start raising money. He raised only about $2.5 million in the last quarter. He says he's going to raise more this quarter. But we have to see.

And he has to convince people that he's the person to beat Barack Obama. So, to be continued.

BURNETT: John Avlon, what's your take?

JOHN AVLON, CNN CONTRIBUTOR: Erin, there's no question that Herman Cain has got the big mo right. He's got momentum, jumping 20 points in one month in a poll, the exact same time Rick Perry drops 20 points.

But there is another big mo that matters in presidential politics: money. And Herman Cain doesn't have a lot. One of the most revealing things in your interview was he only had a couple $100,000 cash on hand right now.

CAIN: Right. He did.

All right. Here he is actually on that on that front, in our interview about how much money he had.

(BEGIN VIDEO CLIP)

CAIN: For the quarter, we will report, first of all, no debt. You see, I run this very tight, like a start-up business, because that's my nature as a businessman. And we are going to have -- we will report at the end of the quarter several hundred thousand dollars in cash on handled.

Within the last week or so, our fund-raising has really picked up a lot, because of the response of the public. And so, I don't know what that number is. I just know that it is going to be very, very respectable.

(END VIDEO CLIP)

BURNETT: So basically, John, what he is saying was -- well, since the quarter ended, and I popped in the polls, I've got a lot more money, I'm going put out a separate press release, because the third quarter isn't going to look so good.

AVLON: That's right. Look, I mean, in the third quarter, Rick Perry raised $17 million. Mitt Romney, $14 million. President Obama raises $40 million.

Look, money is not determinative. It can't compensate for a lack of message. In 2004, Howard Dean had the most money. Last time around, it was Rudy Giuliani and Mitt Romney. They didn't win the nomination.

But money matters in the long marathon to get the nomination, especially on Super Tuesday.

BURNETT: Gloria, you wrote in your column about the purity problem in politics. It was really interesting, because you were talking about the Tea Party. And whether they could ever get behind, let's just say Mitt Romney.

BORGER: Right. Well, they -- so far, they haven't. I mean, he's stuck at 25 percent. They have been looking for someone else to date, and maybe marry, because they don't want this arranged marriage with Mitt Romney. But the problem is that it's difficult when you're a purist to find a candidate pure enough to carry your torch. And I think that's -- that's really the issue here for them.

So, this is going to be a test of the maturity, really, of the Tea Party. Will you remain pure, or will you in the end decide to support someone who you believe can beat Barack Obama? And that's really the test for the longevity of this party.

You know, they have given issues in this campaign. They've given a lot of energy in the midterm elections in particular. But will they hang in with the Republican Party, or will they go off on their own, remains to be seen.

AVLON: That's the big question. Does ideology trump electability? That is the biggest question confronting the Republican Party right now. Right now, Cain is betting from the ideology. Romney seems stuck at 25, as Gloria said, but all of that alternative Romney energy right now is circling around Herman Cain, and it shows that Romney has got a big problem connecting with his base.

BORGER: And I'm going to predict one other thing. This is going to go up and down, up and down, again and again. I mean, I don't think, you know Rick Perry -- you can't count Rick Perry out here. You know, Herman Cain is going to be around.

So I think this race is going to continue to be reflective of a very fickle Republican electorate right now.

BURNETT: Well, that's fun for us if it's true.

All right. Thanks to both.

All right. Will Republicans put a jobs proposal on the table today? The GOP plan calls for tax reform, and they included a balanced budget amendment. Also called for the repeal of President Obama's health care law and the financial regulatory reform bill known as Dodd-Frank.

Republican strategist David Frum joins us from Washington. James Carville, Democratic strategist, he's coming from New Orleans.

Thanks to both of you.

But, David, let me start with you.

The Democratic plan, the president's plan, had that really popular millionaire tax. It pulled very, very well among Republicans and Democrats. What part of the Republican plan today could rival that?

DAVID FRUM, REPUBLICAN STRATEGIST: I think the boost to energy exploration will be popular. It makes a lot of sense. It may not produce the job pop that people would like to see. But it's a good idea, as a number of the things in the plan of the good idea.

President's millionaire tax, by the way, is completely irrelevant to job creation. He inserted that into the plan as a way of getting to know. Because the president doesn't want his plan to pass. He wants his plan to fail in ways that will allow him to blame the failure on Republicans. BURNETT: Well, I have to say, he would pay for his plan with the tax, which did include a payroll tax cut. I mean, that was the argument, right -- that it would create jobs.

FRUM: That's not why it's there. That's the excuse. That's not the reason.

BURNETT: All right, which I get the political --

FRUM: The reason is to get to know.

BURNETT: All right. So, James Carville, what's your view on the Republican plan?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, first of all, it's going to cause an immediate pop in the deficit if it passes. It's not, because it calls for the repeal of health care reform, which according to CBO, is going to save us money.

You know, I've got -- I don't like the plan, but I like the fact that they put one. I like the fact that Romney has something out there. Hopefully, we can have an election, that the real sort of clash and it can bring some clarity to this. And I think that as this comes out as Romney plan come out, as the Republican plan does, the president's plan, anything else -- it's good to get it out there, because we need some kind of a decision here from the voters come November of 2012.

And all of this I think we can interpret as positive. You know, Romney says he's going to balance the budget, increase defense spending and cut corporate taxes. Good luck trying to sell people on that. But at least he's out there saying it.

BURNETT: Let me ask you, David, what do you think about John McCain as being sort of put out as the face of this? Because at least it would seem that was a nod to the fact that people want compromise and someone in the center, which John McCain, relative to a lot of other people that could be put out, is more centrist perceived-wise.

FRUM: Right. This is an attempt to say with Rand Paul and John McCain seen as a Republican consensus here and it's pretty broad. I worry that the idea -- these ideas -- although broad, are not powerful enough, because the country's job crisis is so desperate. And a lot of this does look like rummaging through yesterday's leftovers, rather than coming up with the big response the country needs.

And having Rand Paul there signifies another problem, which is the thing the country needs above all, is the creation of money and credit on an almost unprecedented scale. And especially if we have a euro crisis and to have somebody who is associated with the kind of primitive monetary economics that Rand Paul is associated with tells you it's going to be very hard for this party to get behind what it most needs, which is money and credit creation.

BURNETT: James Carville, you said the Republican field is a dream come true for the president, as it's turning out. We've got Cain number one in the polls. What's your argument?

CARVILLE: My argument is, compared to the 1980 field. If you look at the fact that that -- I was listening to Rush Limbaugh, listening to something on the computer, poor man, he doesn't know what to do. He can't endorse anybody. He almost is contentious of Romney.

And you're seeing that -- I was listening to Gloria and John on the segment before. It's just evident that they're looking for something else and there's no one else there.

One point about both of these plans which I find at least surprising, neither one of them addresses the problem of housing, which strikes me as the kind of amateur sitting out here -- as a pretty big hole in the economy. And nobody has much of an idea what to do about it, it seems like.

BURNETT: David?

FRUM: Choose me, choose me. I know what to do about it.

CARVILLE: OK. Run for president.

BURNETT: G ahead, please then.

FRUM: What we have is an American household sector burdened by more debt than it can pay. And is what we need is a rapid, across the board reduction in the burden of indebtedness on American households and there's a word for that. It's called inflation.

What we need is 4 percent or 5 percent inflation that will make everybody's debts easier to pay. We won't have to have a complex administrative mechanism to say this mortgage gets relief and that mortgage doesn't, this is a speculator, that's a real householder. You know, inflation does not have to be uncontrolled. It does not have to be like the 1970s.

But that is an -- we are in danger of a deflation. Get the burden of debt on the household sector down, and watch the economy take off.

BURNETT: Well, you know what I can make you feel better because Ben Bernanke is trying hard to make that inflation come true. And keep the big inflation genie in the bottle.

CARVILLE: There's no demand -- there's no demand in the economy. I think it's going to be kind of hard. But that's -- yes.

BURNETT: Thanks to both. Appreciate it. See you soon.

CARVILLE: Thank you.

FRUM: Thank you.

BURNETT: And now, let's check in with John King, filling in for Anderson tonight.

Hey, John.

JOHN KING, CNN HOST: Hey, Erin, good to see you.

Ahead on "360," we're going to follow up on Herman Cain. Fascinating. As you know, he's continued his push for his 9-9-9 tax plan. But even some conservative economists were against it. We're keeping them honest.

Plus, the president is touting his jobs plan, slamming Republicans for not having their own vision of how to restart the economy. He also accuses them of not being specific about what they don't like about his plan. Truth is: they have done both. We're keeping him honest, as well.

And a father, a husband, finally gets some justice for the horrible crimes committed against his family. Dr. William Petit talks about the second man found guilty of murdering his wife and daughters and shares how he managed to get through the excruciating trial in his own words tonight.

That and more, Erin, at the top of the hour.

BURNETT: All right. Looking forward to seeing you in just a few minutes.

OUTFRONT next, though, Paris. Prosecutors dropping rape charges against Dominique Strauss-Kahn. We find out why in tonight's "Outer Circle."

And then disturbing testimony about the care Michael Jackson received before his death.

And stand-up comedian Steve Mazan given just five years to live. He made it his goal to perform on "Letterman."

(COMMERCIAL BREAK)

BURNETT: We do this at the same time every evening. Our "Outer Circle," where we reach out to our sources around the world.

First to Libya tonight, where Gadhafi remains on the run. His loyalists still fighting fiercely in Sirte, his hometown. And rebels are capturing prisoners, but there are disturbing reports about abuse and torture.

Dan Rivers is there for us.

And, Dan, have you seen any evidence of this?

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, I haven't seen any evidence of prisoners being badly mistreated in the way Amnesty International has been talking about. But we have seen people being very roughly treated as they're marched away. I think the NTC is very keen to try and improve the way it deals with prisoners. Clearly, this is going to be very bad for its reputation, this Amnesty International report, and something they're going to want to act on immediately -- Erin.

BURNETT: All right. Thank you very much.

Next to Syria, where security forces have raided a northern town amid explosion and gun fires.

Arwa Damon is in Beirut.

And, Arwa, tell us about the clashes.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Erin, CNN spoke to an opposition activist who managed to flee Binnish just as the military was advancing. He said he snuck through the olive groves and reported hearing gunfire, seeing plumes of smoke rising. Now, it appears the cause of this offense even though Binnish had been under attack in the past, was because over the past few months, dozens of defectors were hiding out there. We have been seeing an increase in violence in areas where these defections are concentrated -- Erin.

BURNETT: Arwa, thank you.

And now to Paris, where prosecutors dropped the rape charges against Dominique Strauss-Kahn, saying there wasn't enough evidence to pursue it. But the prosecutor said Strauss-Kahn was guilty of sexual aggression against the journalist who brought the charges.

Becky Anderson is reporting from London.

And, Becky, did the prosecutor elaborate further or explain?

BECKY ANDERSON, CNN INTERNATIONAL: Erin, this all dates back to 2003, when writer Tristan Banon alleged that Dominique Strauss-Kahn tried to rape her when she went to interview him in an apartment in Paris.

Now, the prosecutors say that Dominique Strauss-Kahn admitted sexual aggression at the time, but the problem from Ms. Banon was that the sexual aggression has a three-year statute of eliminations, attempted rape has a 10-year statute of limitations. The prosecutors though said there just wasn't the evidence -- Erin.

BURNETT: All right. Thank you very much, Becky.

Well, behind comprehension and disturbing, that's how one medical expert described the care Michael Jackson received from Dr. Conrad Murray. Prosecutors continued trying to show that Dr. Murray was grossly negligent as witnesses testified that he gave Jackson a combination of drugs that killed him.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think this was the perfect storm that I described, that ultimately culminated in his demise.

(END VIDEO CLIP)

BURNETT: Ted Rowlands has been in the courtroom today and every day of this trial.

Ted, was the testimony as damaging as it appears?

TED ROWLANDS, CNN CORRESPONDENT: Well, the defense would argue that they scored some points on cross examination with these experts. They were able to bring up Demerol and other doctors. But bottom line -- it was a very, very good week, I would say, for prosecutors because of the witnesses.

BURNETT: Well, prosecution -- the prosecution, I know they could be on their last witness. So, any sense of when the jury will actually get this case?

ROWLANDS: Yes, they are on their last witness. We're dark tomorrow because of some scheduling issues.

They'll be back in session on Monday. We'll have the final prosecution witness there. It's expected the jury could get the case at the end of the week, close on Friday. So, it's going faster than they first anticipated.

BURNETT: And what does the defense have to do to save Dr. Murray at this point?

ROWLANDS: Well, they've got to focus the attention on Michael Jackson and focus it away from Dr. Murray. Michael Jackson was the one that delivered the fatal dose. Michael Jackson was the one that set the table for disaster because, right now, Murray is in the hot seat. The prosecution has done a great job of putting Murray at the center of this chaotic environment in that house. They've got to shift the focus to Jackson. It will be a tough road, though.

BURNETT: And final question for you, Ted. We've been reporting exclusively that Jackson's oldest son Prince said that Dr. Murray lied in a police interview when he said he comforted Prince and his sister.

Do you think Prince will take the stand?

ROWLANDS: Well, it's shocking. You know, there's a chance now. The conventional wisdom would be you never put a child on the stand. It puts an uncomfortable feeling for the jurors and it could easily backfire for you.

This is a case where they might consider it because he'll get on the stand and directly refute something that Murray told police. And they'll get him on and off very quickly. We'll wait and see.

If it does happen, it will be in the rebuttal case just before closing argument late next week.

BURNETT: Are there any other people that you think might testify that, you know, at this point, would surprise you or any other surprises? Because I know, look, we are getting close to potentially this going to the jury.

ROWLANDS: Yes. You know, it looks like everything is wrapped up in terms of witnesses. The only potential surprise would be Prince Jackson, his oldest son. The rest of the way, we think the defense will have their own Propofol expert and then some character witnesses.

We don't expect any surprises, but, hey, we'll wait and see.

BURNETT: I know you will be there. And I guess enjoy the fact that it went dark tomorrow.

ROWLANDS: Yes, thanks.

BURNETT: All right. Silver lining to everything. Thanks again, Ted.

Well, Steve Mazan was diagnosed with cancer and he was given just five years to live. It was a terrible diagnosis. But there was something that kept him alive. We'll hear from him, next.

(COMMERCIAL BREAK)

BURNETT: Our guest now is a comedian. He was diagnosed with an inoperable liver cancer in 2005 and given five years to live, but he had a plan.

(BEGIN VIDEO CLIP)

STEVE MAZAN, COMEDIAN: I got into comedy for one reason and one reason only, to live a dream I had since I was 12 years old, to perform stand up comedy on David Letterman's show.

(END VIDEO CLIP)

BURNETT: For the next four years, he worked to make that dream come true chronicling his effort in a new book, "Dying to Do Letterman," a documentary by the same name that debuts this weekend.

Steve Mazan is a comedian, author and filmmaker.

Steve, great to have you with us. Really appreciate it.

MAZAN: It sounds like a good resume when you say it all together -- comedian, author, filmmaker.

BURNETT: Since you have this dream since 12, then you received a terrible diagnosis. But how much did the goal of going on Letterman motivate you, keep you alive.

MAZAN: Yes, I think -- listen, it's six years later. I have outlived the worst case scenario. It's only helped.

And having something to look forward to everyday and something to work on really kept my focus away from the diagnosis and -- yes, it was great. It's something I always said would happen. I knew I would be on Letterman some day.

BURNETT: Just believe in yourself.

MAZAN: Yes.

BURNETT: But now I realize, what if I'm not around when some day happens. So, I had to kind of make it happen. I think we are guilty of that a little bit, saying some day, I'm going to do something.

MAZAN: So, you have a bit on the film where you do your own version of Letterman's top 10. Here's a quick look at that. Yes.

(BEGIN VIDEO CLIP)

MAZAN: Tonight's list, the top 10 benefits of catching cancer.

Number 10, only seven Tour de Frances away from just like Lance Armstrong.

Number two: two words -- sympathy sex.

And the number one benefit of catching cancer: convince close friends to do work for free.

(END VIDEO CLIP)

BURNETT: What is it about David letterman you like so much?

MAZAN: You know, I like that he's different. So, you know, he came out -- his old show came out at a time when -- you know, my parents loved Johnny Carson and I did as well, but he was on after Johnny. And then I was like, oh, my God, this guy is really funny. He's doing something different. And he didn't seem like your typical guy you'd see on TV.

He seemed like a guy -- I grew up in the Midwest that you'd see in the Midwest, that would you know, be working at a hardware store or something. He didn't look like a star. So, yes, I related to him.

BURNETT: So, you sent him a letter, tried to tell him your story. And they wrote back and said, they thought you were asking for sympathy or something, right?

MAZAN: They thought I was going to do like a make or wish thing, yes. That I just want to be on because of this diagnosis, where I really just wanted them to look at me a little faster because my time was short. You know, if they didn't think I was good enough to be on, I didn't want to be on.

BURNETT: But you were good enough and you got on.

MAZAN: Yes, it took a long, long, time. But, yes.

BURNETT: 2009.

MAZAN: 2009 is when I finally made it on and it was incredible. I mean, some things don't live up to what you want it to be. And this exceeded it on every level.

BURNETT: And here you and you have exceeded the years you were given and you're doing well, and you just met with your oncologist and you're doing well now?

MAZAN: Doing well now, and my dream was to get on the Erin Burnett show, and now, that's working as well.

BURNETT: Now you make my year.

MAZAN: I have been on your Australian show, too. Erin Burnett Outback, and that was a fun one. So, thanks.

BURNETT: So, what is your goal now? Now, you've achieved the Letterman.

MAZAN: You know, it was a selfish goal in the beginning, to spend whatever time I had and, you know, to make my family and wife sacrifice to allow me to do this dream. But with the nice thing is now with the book and people who have seen the movie so far, people who have been inspired to chasing their own dreams and realized, you know, some day, you got to make it happen rather than wait for it.

So, it's the share the book and movie with as many people as possible and hopefully they'll chase their dream as well.

BURNETT: Well, it's inspiring and motivating. And good luck with it. Obviously, the documentary is debuting this weekend. And the book, "Dying to be on Letterman" on Monday, right?

MAZAN: Yes, "Dying to Do Letterman."

BURNETT: "Dying to Do Letterman." Sorry.

MAZAN: Dyingtodoletterman.com. You'll get all the information where you get the book and the movie. Thank you.

BURNETT: All right. Thank you so much, Steve. Appreciate it. And thank you for coming in. Good luck.

All right. Well, John King is in for Anderson tonight. And "360" is next.