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Interview with Senator Joe Lieberman; New Super Committee; Payroll Tax Cut; Newt's Fame; Legalize Pot

Aired December 1, 2011 - 19:00   ET


ERIN BURNETT, HOST: Thanks, John. Newt Gingrich flying so high he is about to touch the sun. Is he going to pull an Icarus?

Legalizing pot, two big moves across America, is it about to happen? And super committee two, oh, that's going to be a hit this holiday season. At least we hope so. We are optimists here, so let's go OUTFRONT.

I'm Erin Burnett. OUTFRONT tonight a big showdown in Washington. The reason, a tax cut America might be about to lose. Over the past year you have probably had about $1,000 extra thanks to the payroll tax cut. And you will save at least that much next year, if Democrats and Republicans extend it. Two bills are up for vote to do just that.

The Democrat bill taxes millionaires to pay for the extension. The Republican one freezes federal pay and cuts millionaires off from some benefits like unemployment. Both bills will likely fail because surprise, surprise, the parties haven't compromised. Now Congress has 30 days to pass the payroll tax extension. If they don't people with a salary of $35,000 will pay $700 more in taxes next year.

If you make 50,000 you pay $1,000 more, $75,000 in salary, $1,500 more. You get how this works on and on. Economists warn that if it is not extended the U.S. could tip back into a recession. Now the bottom line is this, the American people want it. The economy needs it. And the two major parties agree on it. So, why can't politicians get it done?

At least the super failing super committee was taking on big issues like Medicare and tax overhaul. But there could be room for optimism, because there may be a super committee two. It may not be a mega Hollywood hit, but, it would sure change this country. Is it too late for a grand bargain for America? Senator Joe Lieberman is the Independent from Connecticut.

He is spearheading a super committee two late charge and he's OUTFRONT tonight. Senator thanks so much for being with us and let me just start with that. You have come up with an idea, right, to create basically we could have another super committee if you just get six Democrats and six Republicans on board. They could go ahead and put a bill forward, simple majority and get it through, through without a filibuster right?

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Yes, exactly. So, I mean my main point here is that the fiscal crisis facing the country is too serious for us to give up because the super committee didn't reach an agreement. And what I am saying is that -- incidentally this is the first year anniversary of the report of the so-called Simpson- Bowles Commission bipartisan, appointed by the president, came up with a $4 trillion debt reduction over 10 years --

BURNETT: Which is a grand bargain, right? I mean just to be clear that's real money.

LIEBERMAN: That is the grand bargain, so what I am focused on is drafting that legislation -- and the first instance submitting an amendment to something in the next couple of weeks to guarantee that debt legislation can get a vote sometime in the first quarter of next year or opening up the possibility that any group of 12 who can come up with a proposal that will equal the $4 trillion in debt reduction over the next years will be guaranteed a vote, no filibuster, no amendments, just an up-or-down vote and hopefully to do something good for the country. So you know I know we are fighting uphill on this. But the consequences of not -- keeping at trying to come up with a bipartisan agreement to cut our national debt are really terrible. And I think if we can do it, it's the best thing we could do to stimulate investment, economic growth and more jobs in this country.

BURNETT: It would be amazing, the possibility or what it could do for the way the world views America, for investing, for people's pensions, 401(ks, but how do you think that you can get beyond what seems to be stalling Washington and making America so angry with Washington which is, you know what, we'll just put all this off until after the election and we'll get re-elected by blaming the other side for our inability to compromise, whichever side you are on, right, that's the argument?

LIEBERMAN: Yes, you know I hate to -- and I grew up in a political system where believe it or not you not only came to office to try to get some things done and solve problems which I think most people get elected to Washington to office here want to do, but, when an election was coming, you tried to get more things done so you could go back and say, hey, look, constituents, this is what we accomplished for you. Today as you just said, Erin, the default position seems to be that each side wants to go through the campaign blaming the other side for the fact that there is not a solution. And in some sense they're both right because both parties are at fault for the fact that the country is not dealing with its biggest problems.

BURNETT: Another thing that some are trying to do is even, is even more frustrating frankly and that is super committee didn't do its job. And we don't like the $1.2 trillion in automatic cuts, so let's roll those back, too, which forget what that would do to America's rating and regular people's mortgage rates. But it's frustrating and wanted to ask you about something Eric Cantor did.


BURNETT: I know he called you with a plan to get around some of those automatic cuts on the defense side. What did he say and do you support it? LIEBERMAN: Yes. I mean I was called on Thanksgiving Day before it was time to eat the turkey so it did not affect my digestion at all. Actually it was a good call. I know Eric for a long time. We haven't talked in a while, but he said I want to run something by you. And apparently he called five or six other senators and basically said I'm thinking about a bipartisan agreement.

Democrats want to extend the payroll tax cuts which you talked about earlier, Erin, and I agree with you and unemployment compensation for people who have been out of work. And a lot of Republicans are concerned about the impact of the so-called trigger sequester on defense spending. Maybe we could put those together and get something bipartisan done. So I said look, I am encouraged Eric that you are thinking in this way.

Keep trying to do it. Obviously we have got to come up with a way to pay for that. Part of the problem here is that -- sometimes the agreements that are made are not to touch each party's sacred cows and -- like tax increases on one side and entitlement spending on the other or defense spending on the other.


LIEBERMAN: And the net effect of that of course is that the national debt gets bigger and bigger and harder and harder for our kids and grandkids to face.

BURNETT: All right, Senator Lieberman, thank you so much for being with us. I really appreciate your taking the time.

LIEBERMAN: Thank you, Erin. I enjoyed it. Have a good evening.

BURNETT: All right, you too and the whole super committee two, a fascinating concept. Let's bring in John Avlon. And John, let me -- you know it's interesting when he said there what happens when you avoid the sacred cows.


BURNETT: Well you know what happens if the cows get really, really fat and they get -- they get -- arteries get clogged and you know what? That just ends very badly for the farm.

AVLON: Yes, it's time for some steak. I mean this is the problem we have been having.

BURNETT: It's juicy and full of fat --


AVLON: Oh, everyone likes a good steak so think about it that way. (INAUDIBLE) make it more appealing to people in Washington. What we need is a good steak dinner. Here is the problem. I mean good for the Independent senator for trying to put forward a way to redeem the lost promise of the super committee, a mechanism that would allow that brack (ph) style up-or-down vote, no amendments, no filibustering, just an honest chance to make a major dent in the deficit and the debt.

The problem is, is that we've seen this movie over and over again and they keep failing and failing and failing. One year ago we had Bowles-Simpson, the president's plan --




AVLON: The president probably is really regretting that he didn't back that harder at the time, would have been smart politics and good policy. But you know what Republicans are to blame, too. Jeb Hensarling, head of the super committee, was on the Bowles-Simpson committee and voted against it. So everyone makes a lot of talk about deficit and debt. Whether they're talking about payroll tax or dealing with the generational theft of deficit and debt it's got to be paid for. We need to get this country back on full (ph) fiscal footing.

BURNETT: Right and you know just to make a point about this payroll tax. (INAUDIBLE) we don't extend it --


BURNETT: -- economists say it could cut growth in half. By the way we're talking everybody about pretty meager pathetic growth to begin with. So OK, everybody likes it. But John, you raise this point of paying for it. It also -- payroll tax cut seems good but that means money that's not going to Social Security, which is making another problem worse down the line.

AVLON: That's right, so maybe -- payroll tax cut, keeping it low with entitlement reform. Let's adjust some of those formulas that would then reduce that long-term burden. There is a lot of different ways to come up with a bipartisan solution. My problem is when Eric Cantor allegedly called about -- in that call suggesting, he said look give us -- you know we're going to keep all the defense money, but then we'll take a tax cut we don't pay for. And that's our compromise. That's fundamentally imbalanced (ph). Both sides keep wanting to get -- you know the definition of negotiation in Washington today is I get everything. You get nothing and we'll somehow say it is a compromise. Everyone has got to feel some pain. We need that steak dinner.

BURNETT: We all -- we're supposed to if we want --


BURNETT: -- well raised (ph), kind of grow out of that way of thinking, maybe around (INAUDIBLE) two, three --


BURNETT: Five if it's a stretch -- AVLON: Every day at work. That's why they're so furious at Washington.

BURNETT: All right. Thanks so much to John Avlon who is going to be back and ahead on OUTFRONT we have breaking news, we've obtained a 911-call placed from a suspected hazing related death that involved a college band member and Newt widening his lead in the polls, flying close to the sun. Is it temporary, can he hold on and be the GOP nominee and 10 states currently considering legalizing medicinal marijuana? What do you think about that? We've got the "inside scoop."


BURNETT: There are a lot of crimes that pay really well. But when criminals like drug gangsters and Wall Street Ponzi schemers get caught taxpayers can benefit. It's called forfeiture, when the government seizes assets like fancy cars, homes and cash from criminals. Sometimes you see you know that $2 Bentley advertised in the newspaper. That's what that is.

CNN's Deb Feyerick spoke to Preet Bharara. He's a U.S. attorney for the southern district of New York and he told her what he seizes.


PREET BHARARA, U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: Like a bank account, like stocks, like bonds. Sometimes it's personal property. Sometimes it's things like buildings. Sometimes it's airplanes, works of art, pretty much anything. If you can touch it or if you can spend it and it's the product or fruit of crime we'll go after it through the courts.


BURNETT: And Mr. Bharara is good at going after that stuff. Our number tonight 800, that's how many millions of dollars worth of assets the southern district of New York seized in fiscal 2011. Now I don't know whether that sounds like a lot to you, but it is. It accounts for about half of all asset forfeitures in the United States.

Time now for our "Political Play" of the day with none other than the one and only John Avlon; he is back -- John.

AVLON: Hey, Erin. Our "Political Play" of the day tonight is the excessive celebration penalty. Now last night we showed you how Newt Gingrich is soaring in polls across the country. A new poll out tonight in Florida shows that is a real trend with substance behind it. Newt Gingrich, 50 percent in that pivotal swing state compared to 19 percent to Mitt Romney.

The question now is though is all this new-found success going to Newt's head? Well there are some signs it may be. Take a listen to this sound from a FOX interview where he's predicting he's got the nomination and slices the field a little bit in an unusual way.


NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Whereas I would have thought originally it was going to be Mitt and not Mitt. I think it may turn out to be Newt and not Newt.


AVLON: Well this Newt-centric universe brought to mind a play from this past weekend's football, Jets versus Bills. Wide receiver Stevie Johnson (ph) catching a touchdown, doing a little touchdown dance there. Here's the thing. Then (INAUDIBLE) but Jets player Plaxico Burress, he got a penalty for excessive celebration and was fined $10,000 reportedly. The point is that there's a cost to this kind of premature behavior. And the more Newt starts to shoot from the lip, the more he runs the risk of reminding people why they fell out of love with him in the first place. For example, his exaggerated sense of his place in history. Take a listen.


GINGRICH: I helped lead the effort to defeat communism in the Congress.


AVLON: And then, there is his healthy sense of financial and celebrity self-worth in South Carolina.


GINGRICH: I was charging $60,000 a speech and the numbers of speeches was going up, not down. Normally celebrities leave and they gradually sell fewer speeches every year. We were selling more.


AVLON: Already his opponents are taking shots at the new front- runner and the question is whether this will be a cautionary tale. Is there a cost to getting ahead of yourself and celebrating when you rise in the polls? Look, remember, this past weekend, the Jets ended up beating the Bills. So, it is just a reminder in politics today you celebrate too quickly, you get ahead of yourself, you can end up alienating more people than you attract.

BURNETT: I love that. (INAUDIBLE) Al Gore invented the Internet. Why not defeat --

AVLON: You know Reagan, Thatcher, Pope John Paul and me.

BURNETT: All right. Let's add into this conversation Republican strategist Doug Heye, Democratic strategist Timothy Punke. Good to see you. Doug, what do you think? It's Newt and not Newt, says Newt, interesting to talk about one's self in the third person always.

DOUG HEYE, REPUBLICAN STRATEGIST: Well you know I take this whole excessive celebration thing a little personally because I went to the University of North Carolina, wearing my UNC tie. We were ranked number one, a bit over-hyped at the beginning of the basketball season. We lost to UNLV last week. We're now number five.

So we know that when you celebrate excessively there are consequences that come with that. You tend to lose. Newt Gingrich has been doing a little of that. But part of it is because he has been so disciplined and so focused in these debates, the knock on Newt has always been that he's been an undisciplined candidate, an undisciplined speaker, an undisciplined messenger, but when it's come to debates, which is really where we've seen these candidates he has been on point and that's why you're seeing him in this position.

BURNETT: Tim Punke, how does Barack Obama feel about running against Newt Gingrich?

TIM PUNKE, DEMOCRATIC STRATEGIST: Oh you know I think first of all it is not clear at all that Barack Obama is going to be running against Newt Gingrich. I think one of the important things to remember is that Gingrich is actually if you take Palin and Trump, he is the sixth Republican now to surge to number one in the polls ahead of Romney. And we've seen what's happened to Bachmann and to Perry and to Cain. So you know first of all, I think it's far from clear that Gingrich is actually going to be the candidate.

And I think it's also important to remember, you know he was last in office about 15 years ago. And the views that were popular then are very different from the views that are popular today. And I think that's exactly, you talked about the Ron Paul ad at the beginning of the show. I think that's exactly the point of the Ron Paul ad. I think after voters start studying Gingrich versus Romney are they really going to find a lot of differences and that's what we're going to find out in the next week or so.

BURNETT: How quickly does it happen, though? I mean at some point you've been making this point. You're running -- it's a race with the clock. Whoever is at the top when that -- those key first two contests happen in January --

AVLON: That's right.

BURNETT: -- is the guy.

AVLON: We're just 30 odd days out from the caucus.


AVLON: So the question is, is there time for someone else to rise? There may be time for Newt to fall and I appreciate Tim's point about sort of caveman candidate, Newt stuck in 1997. But the reality is and these polls are pretty broad based and the Romney camp has got a lot to worry about, but also let's be real. You look at the DNC's ads. They don't want to run against Mitt Romney. That's why they have been running ads talking abut his flip-flopping. They'd probably love to run against Newt Gingrich.

BURNETT: And Doug, where do you think the -- when Herman Cain, if Herman Cain steps out of the race and by the way, he's speaking at the Editorial Board of the "Union Leader" in New Hampshire right now. What -- all the rest of that continue to go to Newt Gingrich like we have already seen in Florida, or no?

HEYE: Well I think we will see if this happens. We certainly don't know that it will happen.

BURNETT: That's right.

HEYE: So it is a bit speculative. But we'll see -- we'll see support divide all over the place. Some people will go to Michele Bachmann. Some people will go to Newt Gingrich. Certainly Mitt Romney will get some of those voters. These are people who were drawn to Herman Cain's message. Again talking about the debates which is where as Jeff Zeleny wrote in "The New York Times", the candidates are really focusing on these debates in a way much more so than they have in the past. We see less retail politicking and so forth. So Herman Cain being very effective in those debates has been where he's drawn really that support. It's not an anti-Romney thing per se.


HEYE: So as if he is to pull out and we don't know that that's going to happen or if any of these candidates who have done well in the debates pull out. I think we will see support scatter.

BURNETT: All right. Well thanks very much to all three of you, we appreciate it.



BURNETT: Well is America falling to pot? Now we're not actually talking about super committee and things like at this moment. We are actually talking about marijuana, yes, the real deal. The governors of Washington State and Rhode Island are trying to get the Drug Enforcement Agency to reclassify marijuana from a schedule one drug to a schedule two so that states can safely regulate it for medicinal purposes. Now schedule one drugs are those that don't have medicinal use.

Now pot is big business. Legalizing it could generate nearly $9 billion a year in revenue. Currently 16 states and the District of Columbia have legalized marijuana for medical reasons and another 10 other states are considering the same. But is this a good idea for America? Our senior legal analyst Jeffrey Toobin is OUTFRONT tonight to take on the issue.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: But I don't have any cool glasses.

BURNETT: I mean yes --


BURNETT: -- mine are a little cooler than yours.

TOOBIN: I think they are. See, this is why America loves the American legal system. You have 16 states where medical marijuana is legal, but you have 50 states where it is illegal under federal law. So it is completely unclear what the legal status of marijuana is in those 16 states. And that's why these two governors are trying to do something to at least clarify it a little bit.

BURNETT: And it is the biggest cash crop in California, just as one example, right, by far. If it were legal all of a sudden that becomes, well you know hey, a whole lot more taxable, for example, right? I mean you can make money by legalizing it.

TOOBIN: Well that's right and you have the American Medical Association which is hardly a hippie group saying there are legitimate medical uses for marijuana. Californians have had access to medical marijuana for some time now. And of course there are some questions about whether people are getting prescription for legitimate reasons or not or they just want to smoke pot. But in any case this is something that is becoming a much more mainstream cause. This is something that a lot of people -- it's mostly a democratic cause, but also across the political spectrum, and interestingly, this is very popular with voters. These initiatives keep passing, even in conservative states. So, I mean the politics of the situation is changing at least a little bit.

BURNETT: You know maybe one day I can try it out. The closest I've ever come to smoking pot is these glasses, so just for the record --

TOOBIN: That's the difference between you and me.


BURNETT: I'm sorry. I can hear the whole control --


TOOBIN: It was a long time ago.

BURNETT: Thanks for coming OUTFRONT.

TOOBIN: See you.

BURNETT: All right, next there is a program that records the phone numbers you dial and the text messages you send. The really scary thing is it is already on 140 million phones. We find out just how secure your cell phone really is in tonight's "Under Surveillance". And an unusual Christmas promotion in Arizona, you "Seriously?!" don't want to miss this one.


BURNETT: So we do a lot of serious stories on this show. But this one is a little bit more seriously. It is December 1st and we can't help doing our first holiday story of the year. The Scottsdale Gun Club in Arizona is doing something special for Christmas this year. They have invited customers to get their picture taken with Santa. Now according to the club's Web site every day from 10:00 to 3:00 Santa will be available for photos surrounded by Christmas presents and what looks like a Garwood heavy machine gun.

Just $5 for members and $10 for nonmembers, you would be crazy not to have one of these photo packages. And a lot of people are doing it. So let's take a look at a few of the shots. This first one, this one is OK, kind of Christmassy. But you know the girl was by herself and holiday is about being with family and friends, so let's see the next one. All right, this is a little better, not that festive though.

Santa actually looks like he is a little bit bored. Next -- here you go. The hats are a nice touch. But it is all women. I mean all there have been are women. Don't guys like guns too? All right, next. OK, this one is pretty good. The guy in camo for the hunters and a girl in antlers, but the antlers are fake. I mean see this is a problem because really you are at a gun club, you would think that that would be one thing that (INAUDIBLE) could be real (INAUDIBLE) the antlers right.

And would you ever wear a pair of antlers (INAUDIBLE), maybe that's why they're fake. All right, next. All right this one is -- overkill. Yes. Listen, we are being a little critical here. It doesn't really matter if you are wearing a Santa hat or holding a grenade launcher because Christmas isn't really about that. It's only about one thing, the kids. And if we just take a minute to remember that we'd have a seriously good holiday.


BURNETT: Still OUTFRONT, the "OutFront 5": Like a Virgin. How did you pick the name Virgin for all of your businesses?


BURNETT: Under surveillance.

UNIDENTIFIED MALE: The software is absolutely tracking everything that's going on, on the device.

BURNETT: All this "OUTFRONT" in our second half.


BURNETT: We start the second half of our show with stories we care about. We focus on our own reporting, do the work and find the OUTFRONT 5.

Up first is another super committee in the works. The deficit panel may have failed, but Senator Joe Lieberman from Connecticut is not giving up. The Connecticut independent came OUTFRONT earlier and told us about his new plan to tackle the deficit.

His legislation, he's working on it, is going to allow any bipartisan group of 12 from the House and Senate to come together if they devise a plan to cut $4 trillion from the deficit, just like the super committee, they go to a simple majority vote and it's protected from any filibuster. We'll see.

Number two, Billy Graham is again being treated for pneumonia his doctors announced tonight. They issued a statement saying, "He is responding well to antibiotic treatment and in stable condition." The 93-year-old evangelist was admitted yesterday to an Asheville, North Carolina hospital.

In May, Graham underwent successful treatment for pneumonia.

Number four, 10 percent of apple and grape juices have higher arsenic levels than are allowed in drinking water. That's according to a study by "Consumer Reports," which echoes an earlier study by Dr. Oz that the FDA called flawed and irresponsible.

Dr. Oz gave a statement to OUTFRONT saying, "I stand by our call to action for the FDA to regulate the amount of arsenic in juice from the current level of concern, to be equal or less than the limit they set for bottled water."

And this is number four, sorry -- General Motors conceded tonight it won't sell the 10,000 Chevy Volts it hoped to this year. G.M. said it sold roughly 6,000 Volts through November. It's averaging about 1,000 volts a month.

The Detroit carmaker said a federal investigation into possible post-crash fires, started by Volt's battery, hasn't hurt sales. We learned G.M. will buy back the Volt from any driver concerned about his or her safety.

Well, it has been 118 days since the U.S. lost its top credit rating. What are we doing to get it back? Hopefully, tomorrow's jobs numbers are going to help out. Economists polled by CNN Money predicted 110,000 jobs were added in November.

Well, the young son of county singer Mindy McCready is now officially a missing person. Take a look at the scene right now outside of her Tennessee home. Looks quiet and peaceful. But what is going on inside and on the phones is anything but.

McCready missed the deadline this afternoon on a court order to return her 5-year-old son Xander to his grandmother. That's who has legal custody of him and lives in Florida.

Now, we told you yesterday that McCready is in the middle of a battle to get full custody back. She says her child is in danger. Her publicist says the boy was never, you know, technically missing because he's been living with his mother. His mother apparently has been struggling with rehab and other problems.

We did invite McCready to come out front. She declined.

But CNN legal analyst Paul Callan is here again. And, Paul, McCready took her son across state lines as part of this whole battle. So, what does that mean in terms of criminal charges and what might happen next?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, it's escalated the potential seriousness of this. She doesn't have the right to have Xander with her now. A Florida court has said that the grandmother has custody. The father apparently had temporary custody, and she showed up at the father's house, and Xander was taken any cross state lines into Tennessee.

Now, you could charge her with a crime. I mean, it is a crime, she is as guilty as some one who takes a stranger. Now, whether the FBI gets involved with it or federal authorities, I have my doubts. I think they'll probably --

BURNETT: Because they know it's a family matter.

CALLAN: Yes, it's a very severe family -- you know, she has substance abuse problems. The grandmother got custody for a while. The father doesn't have custody.

So I think you are going to see Tennessee courts and Florida courts looking at this trying to decide what's in the best interest of the child.

BURNETT: And then, obviously, they have to, they would have to get her. How would they if they find her, they find him. They forcibly remove. I mean --


BURNETT: Those kinds of things are also very disturbing and upsetting for the child.

CALLAN: Oh, it's going to be a horrible situation for Xander, because the house is being staked out not only by the press. But I have to think Tennessee police must be looking for the child. They're going to have to take him away from the mother. They're going to have to bring him back to Florida.

And then the Florida court is going to haul the mother, the father, and McCready into court and decide what's in the best interest for the child. So, this poor kid is going to be put through the ringer.

BURNETT: What role does substance abuse play in courts? I mean, obviously, I know this is a state issue. But in deciding when a parent can have custody of a child back. I mean, people struggle with it. They try to overcome it. They want their children back.

How does that usually go down?

CALLAN: Well, you know, this goes on every day in family courts around the country. And substance abuse problems are really one of the chief reasons that kids get take any way from their parents. But there is a presumption that we want to reunite children with their parents. Some times, you know, to an extent that some people might have a problem. You have a substance abuser, they get the kid back.

But if some one is genuine low in control of the problem, is off drugs, and is ready to re-enter society, courts are eager to reunite a mother and child.

Now, we'll have to look at the situation here to see what it is. Not a great thing, though, to kidnap your child if you want to convince a judge that you are a responsible parent -- very bad move on her part. But she says that her mother, the grandmother of the child, was abusing the child.


CALLAN: And she had to get the kid out. So, I don't -- you know, I'm glad I am not a family court judge in this situation. These are heartbreaking decisions that these guys have to make. Women have to make. Yes.

BURNETT: Country singer, celebrity involved. People watch.

Well, thanks so much, Paul. Appreciate it.

CALLAN: Nice being with you.


BURNETT: Tonight, we are OUTFRONT with another example of how we are all under surveillance.

Right now, this very second, your smartphone could be watching you. And it is doing it with a program that you probably didn't even know existed. It's called Carrier IQ.

Tech researcher Trevor Eckhart posted this video on YouTube to show the world how the program records just about every key stroke you make. That's right -- not just what you search for on the Web, the numbers you call, what you type in as you text or instant message someone. It's not nearly as private as you thought.

Now the Carrier IQ Web site said the program is installed on over 140 million phones. But that it only designed to collect, quote, unquote, "performance data".

We asked digital lifestyle expert, Mario Armstrong, to break down what it's really doing.


MARIO ARMSTRONG, DIGITAL LIFESTYLE EXPERT: The bottom line is this software is capturing the data. You can clearly see it in the YouTube video. Whenever he presses a button, you can see it right there in the code that it's capturing. Everything from text messages to actual buttons being pressed, apps that are being opened. Web searches that are taking place. Here's the deal. Many are saying what phones is it on? It could be on a lot of phones. RIM says no BlackBerry phones. Microsoft says no Windows phone.

However, AT&T and Sprint say it is on their phones. And iPhones just released a statement not too long saying, look, it's not on iOS5 any longer and we're going to release a future software update that will remove it from all Apple devices.

So, the bottom line is: you can remove this or choose a phone that doesn't have this software on it.


BURNETT: Pretty amazing when you think about it. If not Carrier IQ, then what?

Minnesota Senator Al Franken issued a letter demanding Carrier IQ explain exactly what the software records and why, right? I mean, don't we all want to know why they're doing it? I mean, what do you need this data for?

All right. Let's check in with Anderson Cooper with a look at what's ahead on "A.C. 360." Make sure you watch out for that software, right? Unpleasant.

ANDERSON COOPER, HOST, CNN'S "A.C. 360": I know, crazy.

Erin, keeping them honest tonight on the program -- on Wall Street, you get locked up for things that are perfectly legal on Capitol Hill. Things like insider trading, shady real estate dealing, bribery. We're going to talk with my "360" colleague Steve Kroft whose reporting prompted Congress to hold hearings today.

Also joining us, retired Congressman Brian Baird, who tried years ago to get Congress to police itself more closely, to keep itself honest. And found basically no interest from his increasingly wealthy fellow lawmakers.

We'll talk to Steve Kroft and the former congressman.

Second, keeping them honest item tonight. Also, kids -- some of them even infants, under one years old, being fed, Prozac, Ritalin, Zoloft, powerful mind-altering, psychiatric medication. Some kids taking in as many five different drugs at the same time. These are kids who have been put into the foster care system. They're being medicated at a much higher level than other kids.

Details from a new report by the Congressional Accountability Office. We're going to examine that with our Dr. Sanjay Gupta. Also speak to Michael Piraino, CEO of the national Court Appointed Special Advocates Association.

Those stories and tonight's "Ridiculist," Erin, at the top of the hour.

BURNETT: All right. Anderson, we're looking forward to it.

Four students have been expelled from Florida A&M for their involvement in the suspected hazing death of a 26-year-old colleague.

And billionaire adventurer Richard Branson wearing -- yes. Why? Why? Well, he comes OUTFRONT to tell you.


ANNOUNCER: This is CNN breaking news.

BURNETT: We told you we are waiting for this.

Herman Cain just in talking to "Union Leader" editorial board in New Hampshire, very candid, saying his wife knew nothing about the financial help that he was giving Ginger White. You may recall, she was the woman who came out this week and said she had a 13-year affair with Cain which he has denied.

Here's what Cain said when he was asked why he didn't tell his wife about Ginger White.


HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: It may appear now that why didn't I tell her about this when it was going on, you are absolutely right.

REPORTER: In retrospect?

CAIN: You know, in retrospect. But retrospect, you know, doesn't necessarily change what we are dealing with --

REPORTER: But your wife knew you two were friends anyway.

CAIN: She did not know we were friends.



REPORTER: Until she came out?

CAIN: Until she came with this -- with this story. OK?


BURNETT: All right. Now, Herman Cain was asked at that editorial board meeting on going right now whether he was going to get out of the race. He said, again, getting out is an option.

That's what we have right now. We'll keep monitoring that. But wanted to make sure you have the very latest there.

Well, we do this at the same time every night, our "Outer Circle." We reach out to sources around the world. And tonight, we begin in Iraq where Vice President Biden and the Iraqi Prime Minister Nouri al-Maliki participated in a ceremony to honor service members from both nations.

Martin Savidge is in Baghdad.

And, Martin, what did Biden say to the troops?

MARTIN SAVIDGE, CNN CORRESPONDENT: Erin, when you think about it, it was a pretty neat backdrop, that palace, home to a former dictator, now used to salute and celebrate the new democracy of Iraq.

Vice President Joe Biden stood on stage. He noted the loss of life on both side, by Iraqis and by U.S. forces. But he also said because of their sacrifice, the war can finally come to an end -- words that many Iraqis and Americans have waited years to hear -- Erin.

BURNETT: Thank you, Martin.

And now, in Myanmar. Secretary of State Hillary Clinton is there. She met with the country's new president and then with opposition leader Aung San Suu Kyi.

Paula Hancocks is in Rangoon. Paula, what's the reaction on the street to Secretary Clinton's visit there?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Erin, we have been speaking to many people on the streets and the market places here in Myanmar. And interestingly, many people didn't actually know that the U.S. secretary of state was even visiting here.

Now, those that we did speak to said they did have some optimism that things could finally get better for them, and some optimism that the changes that they have seen at the top political level could finally trickle down to them - Erin.

BURNETT: Thank you, Paula.

And now to Egypt where we were expecting results for the first round of parliamentary elections.

Jim Clancy is in Cairo.

Jim, what actually happened today?

JIM CLANCY, CNN CORRESPONDENT: Erin, hundreds of people had gathered here in Cairo's financial district to hear the official election results, but it was not to be. Instead we're told those results will be announced on Friday or even Saturday. The big concern now is that it appears Islamist parties have won an outright majority.

And the question is whether once in a power, they will respect the rights of minorities like women, the secularists and this country's Christians -- Erin.

BURNETT: All right. Well, thank you very much. The whole world wants to know the answer to that.

Four students who are expelled from Florida A&M University to day for their involvement in the suspected hazing death of 26-year-old Robert Champion. Champion, a member of Florida A&M's elite marching band died November 19th, a few hours after performing the Florida Classic.

An unidentified person made this 911 call shortly after finding him on a charter bus.


911 OPERATOR: OK, is he awake?

CALLER: He is not even -- he responded a little, he wasn't responding. We thought he was breathing. He was making noises.


CALLER: But I don't even know if he is breathing now.

911 OPERATOR: OK. Is he awake? Do you know?

CALLER: His eyes are open. He is not responding.

911 OPERATOR: OK, but is he breathing?

CALLER: I have no idea. I cannot tell you that.


BURNETT: The cause of death has not been formally identified. But investigators say they believe hazing is involved.

Monday, Robert Champion's mother called for an end to that.


PAM CHAMPION, VICTIM'S MOTHER: This needs to stop. No one wants to be standing in our shoes. No one wants to hear on a phone call that your son collapsed and died over the phone.


BURNETT: Chris Chestnut is an attorney for Robert Champion's family. He's is OUTFRONT tonight.

And, Chris, obviously hazing an issue and a problem that affects kids across the country, at different ages. And there is nothing at this point that's going to change what happened to Robert Champion. But what is the family's response to the four students that were dismissed today? Is it enough?


BURNETT: All right. Sorry about that. We obviously have some difficulties there with our audio communication. We'll try to get that fixed for you and get it back.

But I don't want to waste any more time because I want to squeeze it all in the show. So, we're going to take a break.

When we come back, billionaire Richard Branson comes OUTFRONT and answers all of our questions, including this one -- why is his company called Virgin?


BURNETT: He's one of the most successful businessmen in the world, Richard Branson, the head of the Virgin Group. I know you've heard of him. He's charismatic and he does all these amazing adventures and exploits.

But did you know this? He actually thinks people should be working less right now. Yes, in this economy, he is proposing scaling back in the amount we work.

Richard Branson has a new book. It's called, quote, "Screw Business as Usual," end quote.

He stopped by the studio earlier today to tell me about it in his maverick style. And I used the opportunity to ask him, what he thinks about American Airlines filing for bankruptcy. The airline blamed unions.


RICHARD BRANSON, ENTREPRENEUR: I think that screwing business as usual is -- should also be rethinking the way that we do business. And at the moment, you know, you're either in a job working ridiculous hours or you're out of a job. There are a lot of people who are in jobs if they had -- if they were run by a good company bosses, they would have the courage to say, "I'd love to job share, I'd love to go part-time." And if they did that, they would make room for, you know shall those people who are desperate for a job.

And so, my own personal feeling is that government should share all the work that is out there around in times of crisis so that there's nobody just sitting at home doing no work. But, you know, maybe it means reducing to a four and a half day workweek or something like that. But make sure that everybody has a job.

And you know, people might actually quite like having a little bit more time at home with slightly less money.

BURNETT: They would. They'd love that. And, actually, I think it's interesting coming from you, because a lot of times, when you hear those ideas, people scoff, and say, OK, well, four and a half days a week, I can't make my mortgage, there's all kinds of negatives that come with that.

But you actually think it could work.

BRANSON: First of all, you'd go, you'd ask people to volunteer for it. You'd be surprised. I mean, we've done market research on it and found 20 percent, 25 percent of people would welcome such a suggestion.

BURNETT: Even in this economy, it's amazing.

BRANSON: They're frightened of actually suggesting it because it will make people think that they're being lazy. But let's share the work around that there is.

If you don't mind, on American Airlines going bust -- I mean, it is incredible that in America, you have something called Chapter 11. I mean, when an oak tree dies, it dies for a good reason. It dies so that new, young oak trees can grow up in its place.

And in America, when a company goes bankrupt, generally because it's become bloated and inefficient and is not offering great quality for the public. It can just screw its competitors, screw its -- you know, anyone that it owes money to and come back into business again.

BURNETT: Go into Chapter 11, wipe out all your contracts, wipe out your labor contracts and come back out.

BRANSON: An then make it very difficult for those people that's competing with -- an incredibly unfair system and numerous American airlines do this. I mean, Continental did it three times. I won't name names.

BURNETT: That was 63 or 64 in the past 20 years. We've done the numbers. It's a lot.

BRANSON: It's a lot.

BURNETT: And it's a lot of the same airlines again and again.

BRANSON: So, if you change the law and you just simply say, you know, if you mess up, you go bankrupt like in Europe. If a company is dead, it's dead and you then just make the room. All the slots, for instance, Virgin America, we can't get slots at JFK. American airlines will most likely be able to hold on to them despite the fact that the company has gone bankrupt.

You know, so for the new young up and coming airlines that have got fresh new ideas, better quality, you know, have not got bogged down with ridiculous overheads -- you know, make room for them. And I would urge the American government to think about that Chapter 11 and see is that really in the interest of the American public?

BURNETT: One final question before you go. I remember the first time I flew Virgin. I was 20 and I was going over my junior year abroad in the U.K. I thought it was so neat. I got to fly Virgin.

And then when I got there, they took us on a bus tour in London. And this very lovely British lady was with all these American, you know, teenagers, 20-year-old kids going around London, first trip. And so, we pass the Virgin Megastore. She said this is the Virgin Megastore. And I think you just launched the Virgin bride or something like that.

So, she made this comment. And she said, oh, this is the Virgin bride. You know, we have it over here. but I understand that they don't have many of those in America anymore.

BRANSON: Well --

BURNETT: And ever since then, I want to know how you picked the name Virgin for all of your businesses?

BRANSON: Well, Virgin brides didn't actually do that well for obvious reasons.


BRANSON: So, I was 16 when I started in business. And so Virgin seemed appropriate. I was a virgin in business. So almost every single venture I've gone into, I knew little about it before I went into it, had to learn about it. Anyway, it was better than slip disk records, which was going to be the name. Slip disk airlines may not have worked very well.

BURNETT: Probably not. Anyway, thank you for satisfying my curiosity for coming in. Nice to see you, Sir Richard.

BURNETT: Thanks for having us.


BURNETT: All right. The man has a great sense of humor. In addition being a charismatic trailblazer.

Here's the picture when he was talking about Virgin brides and why it didn't work, maybe this was why. He provided us with this picture. This is a man of courage. That's when I launched Virgin brides.

OK. Before we go, we talked to Chris Chestnut, the attorney for Florida A&M band member Robert Champion's family.

Robert Champion, of course, died in a hazing incident, alleged hazing incident in November 19th. I asked him the thoughts on the four students who were dismissed and what's next for the family.

Here's what he said.


CHRISTOPHER CHESTNUT, ATTORNEY FOR ROBERT CHAMPION'S FAMILY: The family is disheartened that four students have destroyed their career. They're saddened for the students. However, they do embrace the fact that the school made some action finally regarding the hazing and hazing at FAMU and its band. So, the family is trying to grapple with the loss of their son which was untimely and unfortunate.

(END VIDEO CLIP) BURNETT: All right. Sorry about that technical difficulty that we had earlier.

Also I want to let you know, you're going to hear a lot more from Richard Branson on the show in the next couple of weeks. But two videos we're going to put on our Web site. They're not there yet, but they will be there shortly.

You're going to hear about the new fuel of the future. Richard Branson actually thinks that airlines could be among the cleanest industries in the world. That's right. And he's not just trying to pull smoke over your eyes. He says it's going to happen by to 2020. He's going to tell you what fuel he is putting in his planes right now that he thinks is going to totally surpass jet fuel.

By the way, did you know there's only 1,800 places on earth to fuel airplanes? I was pretty stunned by that. Well, that's among the things you'll see on our Web site from Richard Branson tonight.

Thanks so much for watching. We appreciate as always. Have a really great night.

In the meantime, "ANDERSON COOPER 360" starts in just a couple of seconds.