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ERIN BURNETT OUTFRONT

Interview with Dick Cheney; Newt Gingrich and Jon Huntsman Hold Debate; NBA Owner to Run for Russian Presidency; Interview with Sen. Kay Bailey Hutchison

Aired December 12, 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: Thanks, John. Tonight on "OUTFRONT," my exclusive interview with Dick Cheney. The former vice president's candid comments on Iraq, the White House race, and the top secret drone in Iranian hands. He's out of office, but also as fiery as ever.

Also on camera and under fire, a man uses his cell phone to record his mother-in-law shooting him. The story and the unbelievable video.

And Newt is numero uno today. Mitt admitted it on tape. Let's go "OUTFRONT."

I'm Erin Burnett. "OUTFRONT" tonight, the U.S. pullout of Iraq and its final hours. In exactly 19 days all troops will be out. Iraqi Prime Minister Nouri al Maliki traveled to Washington to meet President Obama today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: This is a historic moment. A war is ending. A new day is upon us. And let us never forget those who gave us this chance, the untold number of Iraqis who have given their lives, more than 1 million Americans, military and civilian, who have served in Iraq, nearly 4,500 fallen Americans who gave their last full measure of devotion. We have a moral obligation to all of them to build a future worthy of their sacrifice.

(END VIDEO CLIP)

BURNETT: The two leaders laid a wreath at Arlington National Cemetery for the close to 4,500 troops who did lose their lives in Iraq. But with 16,000 Americans slated to remain, none of whom will be military, some are worried that America has made the wrong call in pulling troops out. One of those concerned is former vice president Dick Cheney. I asked him earlier about the president's decision to pull all troops out of Iraq this year.

(BEGIN VIDEO CLIP)

DICK CHENEY, (R) FORMER U.S. VICE PRESIDENT: If you look at the broader area out there, we're now in a situation where we're pulling all of our troops out of Iraq, period no, stay-behind force. He's trying also to accelerate the withdrawal from Afghanistan, he's -- after he put forces in on a surge basis, he's taking them out early.

BURNETT: Right.

CHENEY: It generally looks like a U.S. withdrawal from the region. And add to that the fact that the Iranians are actively pursuing nuclear weapons, and I think it diminishes the U.S. presence, it reduces our leverage, it in effect is going to significantly alter our position in that part of the world, and I think that's a mistake.

(END VIDEO CLIP)

BURNETT: The vice president did give some credit to the war in Iraq for influencing the Arab spring. But I asked him if he had any regrets about his decision to invade Iraq, a sort of be careful what you wish for if extremists end up in charge.

(BEGIN VIDEO CLIP)

BURNETT: Does it make you worry, though, maybe a case of looking back, gosh, I didn't know what I was wishing for in the sense that democracy in that region may end up putting extremists in power? People may choose something that a lot of the world would say I can't believe you're choosing. If they choose it in a democratic fashion, they choose Muslim brotherhood or extremists, we have to accept it, don't we?

CHENEY: That's not the way I look at it. The way I look at is in Saddam Hussein you had a terrible dictatorial operation that cost thousands and thousands of lives. And you got rid of the worst offender. And having done that, and we obviously were part of that, we helped lead the effort, then it was important to help the Iraqis establish something better to replace it.

They had a constitutional convention. They wrote a constitution. They held three national elections, four now, I believe. They opted for democracy. And that's good. That's a positive benefit. I think when somebody does that, the United States needs to do -- stand up and support it, especially when we had a hand in getting rid of the old regime. We had an obligation.

BURNETT: Let me play for you what the president said today about the drone, which is one of the most recent incidents with Iran, our highly sophisticated -- RQ-170 sentinel which went down intact with its crucial radar-evading technology. Here's what the president had to say about it today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: With respect to the drone inside of Iran, I'm not going to comment on intelligence matters that are classified. As has already been indicated, we have asked for it back. We'll see how the Iranians respond.

(END VIDEO CLIP)

BURNETT: They're going to respond by not giving it back to us, I would assume?

CHENEY: I would assume that's the case. Or they'll send it back in pieces after they've gotten all the intelligence they can out of it.

The right response to that would have been to go in immediately after it had gone down and destroy it. You can do that from the air. You can do that with a quick airstrike, and in effect make it impossible for them to benefit from having captured that drone. I was told that the president had three options on his desk. He rejected all of them.

BURNETT: And they all involved removing the drone immediately?

CHENEY: They all involved sending somebody in to try to recover it, or if you can't do that, admittedly that would be a difficult operation, you certainly could have gone in and destroyed it on the ground with an airstrike. But he didn't take any of the options. He asked for them to return it. And they aren't going to do that.

BURNETT: Should the United States now be intervening in Syria?

CHENEY: Well, I think Bashar Assad is a bad actor without question. I think what we ought to do is try and support the efforts that are under way bit Arab League. One of the intriguing developments there has been that a lot of the nations in the region have turned on Assad. So that Saudis as well as a lot of the Gulf States have gotten much, much tougher with the Syrians, called on them to stop killing their people. I think we ought to work through that effort and try to support and channel those efforts to see if we can't get rid of Assad.

BURNETT: But not some sort of a no-fly zone or some other kind of a --

CHENEY: I'm not in the loop these days on what's going on in the intelligence arena out there. But I think we definitely ought to come down on the side of replacing Assad, of supporting those who want to change the regime. And clearly an awful lot of Syrians do because they've been in the streets.

BURNETT: That's right. In your book, you talk about you knew Newt Gingrich, know Newt Gingrich.

CHENEY: Newt's an old friend.

BURNETT: Is he your guy? Does he have your vote?

CHENEY: I have not endorsed anybody. I've stayed religiously out of the fray on our side this year. I've been trying to sell books. And that's where my effort's been focused.

BURNETT: There's a conventional wisdom, though, that Newt Gingrich will cut his own legs off at some point, and that while he may sweep through the primary season, Mitt Romney's the guy you have that's actually electable versus Barack Obama. Is that a load of -- something, manure?

BURNETT: I have not endorsed anybody on either side. The thing I remember about Newt, we came to Congress together at the same time, '78.

BURNETT: Right.

CHENEY: And when Newt showed up, he said we can become the majority, we can take back the House of Representatives. We hadn't had the house since the 1940s. And initially, none of us believed it. But he was persistent and he was tenacious. He kept it up, kept it up, kept it up. And finally by '94 he's the newly elected speaker of the House of Representatives with a Republican majority. So I wouldn't underestimate him.

BURNETT: All right, good luck with your book sales and thank you so much. Appreciate it, Mr. Vice president.

CHENEY: Good luck with the show.

(END VIDEO CLIP)

BURNETT: Dick Cheney's new back is called "In my Time," obviously on bookshelves now.

And next you're going to hear him weigh in on whether Barack Obama should replace Biden with one of the Clintons, and see if you can guess which one, as his VP.

Also ahead, the fight over the payroll tax cut. Again, Washington unable to act.

Also, one man who says, quote, "The Iranian thing is very simple." That's Newt's view.

Plus, "Power Play." Look on the, Putin. The owner of the New Jersey Nets says he will be the next Russian president. What the playboy billionaire's bid means for the Kremlin and the capital.

(COMMERCIAL BREAK)

BURNETT: The Dow closed down 162 points today amid concerns that last week's Eurozone deal won't do enough to actually do anything for Europe. It's a fair concern. Standard & Poor's put 15 Eurozone countries on watch for potential downgrades. Moody's says it's going to review ratings for all EU nations.

That's bad for Americans and American companies because we do a lot of business over there. It's disastrous, though, for Europe's leaders when it comes to their reelection, which brings us to tonight's number -- 26. That's the percent that Nicolas Sarkozy is currently polling at in France going into next year's presidential election. Here he is with his beautiful half, Carla Bruni.

According to a French newspaper, Sarkozy has told friends he's put all his eggs in this one basket, and if France's economy is downgraded he's politically dead. Right now he's 5.5 points behind front-runner Francois Fillon, who has said if he wins the reelection he'll definitely renegotiate the EU deal. That's something the French prime minister thinks will cause even more instability because the markets won't take the deal seriously if they don't think it will last. The market's very, very jittery about that. But interesting to see that Sarkozy is not in the lead.

The front-runner here in the United States facing off with the guy in the back of the pack. Republican presidential candidates Newt Gingrich and Jon Huntsman wrapping up a Lincoln/Douglas style debate less than two hours ago. The format really different from what we've seen before. Maybe it doesn't lead for sound bites but more substance. Five minute answers, no buzzers, no whistles, no lightning rounds of 20 seconds or whatever it is. The debate touched on a few topics, but the subject of Iran got them worked up the most.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: I think the Iranian thing is very simple. Are you willing to accept them having nuclear weapons or not willing to accept them with nuclear weapons? Everything else becomes second.

JON HUNTSMAN, (R) PRESIDENTIAL CANDIDATE: The United States is going to have to be ready to confront the reality of what to do. And in this case, you then have to say, as the speaker mentioned, the question for all of us in this country is, can we live with a nuclear Iran?

(END VIDEO CLIP)

BURNETT: It's a big question. It's one we may not control the answer to anymore. And despite their very different standing in the polls, the former speaker and the former Utah governor actually showed a lot of common ground today.

But really when it comes to Jon Huntsman, does this move him up? I mean, he's one of the guys who hasn't yet been at the top. John Avlon is a contributor for us, Jamal Simmons is a Democratic strategist, Nancy Pfotenhauer is a Republican strategist. John Avlon, you just wrote a piece saying it's time for the GOP to take another look at Jon Huntsman. Did that debate help him? Does he have a shot?

JOHN AVLON, CNN CONTRIBUTOR: He's put all his eggs in the state of New Hampshire. That is his whole deal. So this was a good day for him. He's onstage with the front-runner Newt Gingrich in a debate that was civil and substantive, and that also plays to his strengths. He's got a long way to go. But I do think serious conservative should give him a second shot because he's with them on substance nonstop.

BURNETT: What do you think about that, Nancy? Will they?

NANCY PFOTENHAUER, REPUBLICAN STRATEGIST: Oh, they might. I mean, I have to say that this debate was handing Huntsman a real face card in this poker match. I mean, he got on the stage and was treated seriously and was able to discuss very important issues at great length with the front-runner. So that was a huge plus.

It was also a chess move in my opinion against Romney, because really, you've got -- New Hampshire has been Romney's firewall, if you will, against a potential loss in Iowa and a potential loss in South Carolina. If these two can edge his chances out in New Hampshire, I think he could be over.

BURNETT: John, let me ask you, talking about Iowa, Gingrich on top. You know who's been gaining, somebody that a lot of people have counted as out, Rick Perry. What's he gone, from five percent to 13 percent in one month.

AVLON: It's a pretty significant bump and it is some sign evangelicals are coalescing around his candidacy, which is his only play. He's going to be camped out, doing a two-week bus tour. There's some signs of Newt erosion in these polls. He's down slightly. Romney staying steady, slight decline. Ron Paul hanging in there, don't count out Ron Paul. But Rick Perry showing the biggest bump.

BURNETT: Jamal, what do you think about what might happen here? Some people like to say, I know Jon Huntsman obviously is among them, we'll look at Barack Obama last time around. Sure people don't really count me in now, but I could surge. Who do you think the White House is most afraid of in a general election? Is it Jon Huntsman?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Erin, I think every time the White House sees the Republicans sort of get up on the stage they probably become a little less afraid of each one.

The problem for Huntsman is when the lights come on brightly, Newt Gingrich grows in the light, Jon Huntsman wilts a little bit. He just doesn't really have that force of personality that I think Americans are used to seeing in a president. I listen to him, watched some of this debate, most of this debate today. I'm kind of a nerd and I like policy, and so it was very interesting to me.

BURNETT: You needed to be to watch this one, which is a damning indictment of the media.

SIMMONS: I know it. It was sort of interesting to me, but I can't imagine that most Americans would sit through it. If Americans are ready to have the kind of discussion that those two people had today, they're ready to do that for the next 11 months, we could all end up a lot better off. I'm just not sure our media culture is going to get us there.

BURNETT: John, you heard Dick Cheney saying he's known Newt Gingrich since 1978. He says he's a guy who said we could do things we didn't expect, like take over Washington. Don't underestimate the guy.

AVLON: Yes.

BURNETT: Don't be so sure he'll say something silly like he's done before and hurt himself. AVLON: That's the key, is he more mature? He does have that vision. I mean, '78 to say Republicans could retake the house was crazy. This summer, when he was fired by his whole campaign senior staff and he said I'm going to keep doing it.

BURNETT: Look at him now.

AVLON: So you've got to give him credit.

SIMMONS: Jamal, I want to play something else that the vice president, Dick Cheney, said about your guy and who he might pick as his VP. Here he is.

(BEGIN VIDEO CLIP)

CHENEY: And advice I'd give Barack Obama today would be take a look at it, because there are a lot of good people out there. And it's not personal. You go out and find the best candidate you can to run. And maybe if he goes through that process, he'd end up with Joe Biden. On the other hand, there are people like Hillary Clinton, for example, the first woman vice president, that might have a certain appeal. And so --

BURNETT: She's done well the past few years in her job.

CHENEY: I think there's a general view that she's probably the best they've got.

(END VIDEO CLIP)

BURNETT: He went on to joke that him saying that, Jamal, was probably the worst thing that could possibly happen for Hillary Clinton. But do you think the president is seriously thinking about a change like that on his ticket to energize Democrats?

SIMMONS: This is a little bit of deja vu all over again. I can remember in 2004 when Democrats were sitting around wondering if George Bush would dump Dick Cheney and pick Condoleezza Rice to be on his ticket, which they thought would kill the Democratic chance to beat Bush. It turned out Democrats weren't going to beat Bush anyway.

The problem for the president is the president, if he changes horses right now, it looks like a Hail Mary pass. And I think based upon where the Republicans are right now, Barack Obama's not in a position where he has to throw a Hail Mary pass.

AVLON: The conservatives' newfound love of Hillary Clinton is hilarious.

BURNETT: Quick word.

PFOTENHAUER: Wait a second, if you dial back to 2008, I remember when the entire exodus occurred of the Hillary Clinton supporters to John McCain because they felt she had been treated poorly. They have tremendous respect for her. I do think it is an incredibly dicey maneuver for the president. But I think that they would pick up the over 35 female vote that has become pretty much solidified against them. So I have to say it is fun.

SIMMONS: Nancy, that's an old wives' tale. There's like 47 women --

PFOTENHAUER: Don't call me an old wife. I'm not going to stand for that.

(LAUGHTER)

BURNETT: All right, we'll take this outside.

SIMMONS: There were 47 people in the Democratic Party who left the party because Hillary Clinton didn't win. We have all their names and numbers.

(CROSSTALK)

PFOTENHAUER: I don't agree with you.

BURNETT: I think there's some slight hyperbole on this show, but we're going to have you back, we'll keep talking about it.

PFOTENHAUER: All right, thank you.

BURNETT: Thanks to all three.

The Russian risk on the unrest, the uncertainty and the future of what some say machine a crumbling Kremlin. This weekend an unbelievable show of defiance. Tens of thousands of people took to the streets to contest election results for the parliament, results that many say were fixed to keep Vladimir Putin and his party in power.

Russia is the number one oil exporter in the world. The country has about 18,000 nuclear warheads. And right now it's facing its worst crisis in decades, and that is saying something.

Putin, a man who flexes his muscles for both the camera and his country, is running for president. I thought we'd have a topless shot there, we usually do. And if he thinks he's larger than life he should check out the guy who just announced he's going to challenge him. This Mikhail Prokhorov, third wealthiest man in Russia, a billionaire many times over, a playboy. He also owns the NBA Nets.

Could a basketball mogul run Russia? He's a mogul who wants more than money. He wants power and to take on Putin. High stakes for everyone, and perhaps an exciting race. But is it worth it? And can he really win? I asked Matthew Rojanksy, an expert on Russia.

(BEGIN VIDEO CLIP)

MATTHEW ROJANSKY, RUSSIAN NATIONAL SECURITY EXPERT: I think this is very significant for Putin. This represents the first time that the system he has constructed, the system in which a certain elite set at the top benefit but some of those benefits are shared all the way down, this is fundamentally being shaken. This is one of the guys who has benefited all along from the Putin system. He is coming in and he is seeking to change the system. Whether he does it inside through a deal with Putin or he does it by trying to ride this wave of public protest almost doesn't matter. This is Putin acknowledging or being forced to acknowledge that the system needs to change, and that's very significant.

(END VIDEO CLIP)

BURNETT: Despite an outcry over the election an aide to Putin says the votes will stand. Stay tuned. We're going to continue to follow Russia.

Next on "OUTFRONT," the payroll tax countdown. Washington will get this one done, that's our bet. But will they pay for it or just put us more in debt to China?

Also, we can't resist the winter warfare between South and North Korea. It's definitely making the Christmas season more interesting.

(COMMERCIAL BREAK)

BURNETT: And now a story we can't resist. There are new reports that North Korea has threatened South Korea with military action. Why? For using psychological warfare in their ongoing dispute. According to North Korea's official website, quote, "The enemy warmongers should be aware that they will be held responsible entirely for any unexpected consequences that may be caused by their scheme." That sounds pretty serious.

So just what is this scheme that has the North threatening war? Christmas lights. Yes. South Korea plans to hang more than 100,000 Christmas lights on towers shaped like trees at three points along the North Korean border. The South says they're sharing the Christmas spirit with the North. The North says it's Christian propaganda and a direct violation of an agreement the two sides reached in 2004 which said no psychological warfare. They say they're within their rights to respond with force to the Christmas lights.

We know this is serious. But you have to admit it's kind of amusing that right now this heated conflict is playing out like a Christmas movie, feuding neighbors, out of control holiday displays, and, all right, a rumored nuclear program. But in the spirit of the season, let's all just chill out for a minute and enjoy a classic scene from "National Lampoon's Christmas Vacation."

(BEGIN VIDEO CLIP)

(MUSIC)

UNIDENTIFIED FEMALE: Clark? Clark?

UNIDENTIFIED MALE: I have it. I know what's wrong.

UNIDENTIFIED MALE: I can't see!

(END VIDEO CLIP)

BURNETT: Kim Jong-il, we just couldn't resist.

(BEGIN VIDEO CLIP)

Still "OUTFRONT," the "OUTFRONT Five." Syrian siege.

UNIDENTIFIED MALE: If there is a major assault on the city, it would indeed pay a high price in blood.

BURNETT: Hired guns.

UNIDENTIFIED MALE: We protect those people. That's our mission.

All this "OUTFRONT" in our second half.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

First: Former Vice President Dick Cheney came OUTFRONT. I asked him about the top-secret stealth drone the CIA lost in Iran.

President Obama said today he wants to prevent that technology from getting in the hands of Iran but here's what the vice president told us:

(BEGIN VIDEO CLIP)

DICK CHENEY, FORMER U.S. VICE PRESIDENT: The right response to that would have been to go in immediately after it had gone down and destroy it. You could do that from the air, you could do that with a quick air strike. And in effect make it impossible for them to benefit from having captured that drone. I was told that the president had three options on his desk. He rejected all of them.

BURNETT: And they all involved removing the drone immediately?

CHENEY: They involved sending somebody in to try to recover it or, if you can't do that, and admittedly that would be a difficult operation, he certainly could have gone in and destroyed it on the ground with an air strike.

But he didn't take any of the options. He asked nicely for them to return it. And they aren't going to do that.

(END VIDEO CLIP)

BURNETT: Number two, the Supreme Court announced it will rule on whether Arizona should be allowed to enforce its controversial immigration law. The law put on hold by the Obama administration requires police officers to check a person's immigration status. Justice Elena Kagan, who was involved in the administration's opposition before joining the court, will not hear the case. That set up a potential for a 4-4 split, meaning the law would not go into effect but the decision would not settle constitutional questions, i.e., lose-lose.

Number three, we've learned the Memphis police have not been contacted by anyone accusing former AAU CEO Bobby Dodd of sexual abuse. Two men told ESPN's "Outside the Lines" that Dodd sexually abused them during the 1980s, when he was a basketball coach at the Memphis YMCA. Memphis police said the case will only take baby steps if an accuser does not actually contact them.

Number four, the proposed merger between AT&T and T-Mobile all but dead. That's what a self phone industry analyst told OUTFRONT tonight. This came after AT&T requested a federal judge put on hold an antitrust lawsuit. It's a suit AT&T has to win for the deal to go through. The Justice Department sued to block it said it would hurt customers by raising prices on your cell phone bills.

The proposed $39 billion deal would make AT&T by far the largest carrier in the United States.

Well, it has been 129 days since the U.S. lost its top credit rating. What are we doing to get it back?

We may be about to borrow more money, which won't help. Nineteen days until a tax hike and no agreement in sight. Democrats and Republicans are still fighting over the payroll tax cut.

And this is a cut that would put about $1,000 in the pocket of every average American next year. It does mean, though, less money goes to your Social Security in the future.

Both parties want to pass the extension of this tax cut but they cannot agree how to pay for it. Republicans, in addition to wanting to freeze federal salaries, they want to throw in that pipeline that goes from Canada to the Gulf of Mexico.

Democrats say that pipeline as total nonstarter. Democrats want to pay for it with a millionaire surtax. Republicans say that's a nonstarter.

OK. That's the log jam. Senator Lindsey Graham still has faith, though. Here he is with David Gregory this weekend.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: At the end of the day, the payroll tax will get extend as it is now. It won't get expanded, it will get extended and we'll find a way to pay for it in a bipartisan fashion.

(END VIDEO CLIP)

BURNETT: Really? I hope he's right. We can't let Congress weasel out of this and throw the almost $200 billion bill to China. They already owned about 25 percent of our own debt.

Senator Kay Bailey Hutchison is a Republican from Texas, comes OUTFRONT tonight.

And, Senator, good to see you again.

You just heard Lindsey Graham. Is this going to pass?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Erin, I think it will. I do think we'll come together. I don't think anyone wants to stop this tax cut that people are expecting. And at this point in time, I think we will pass it but we will pay for it. We're not going to let the Social Security system go further into a deficit position. And that's, of course, where the problem is right now.

BURNETT: But let me ask you, how we're going to pay for it? The Democrats have put forth that millionaire surtax idea which is very popular among voters. Republicans say no way. And instead the Republicans have said they want to freeze federal salaries. Democrats have not been open to that.

So, here we are with a few days left to go. How are you going to pay for it?

HUTCHISON: Well, certainly, I don't think we should be taxing people that we're trying to get to hire more people and so many of our small businesses pay on the individual tax return. So what we're trying to do is freeze federal salaries, including members of Congress. We think that is absolutely the way we ought to pay for this.

In addition, we would be giving the states more flexibility on the unemployment insurance and get them to be able to make more efficiencies. We're going to take millionaires off food stamps and unemployment insurance, which --

BURNETT: Needs testing.

HUTCHISON: -- amazingly would save $20 million. That means people are double-dipping. They have $1 million in assets, yet they're getting unemployment compensation?

So we're stopping those things and trying to cut out some of that waste and, really, abuse.

BURNETT: Yes. I'm curious, though. I mean, I think everyone would agree with you on rich people getting food stamps. But $20 million to an individual is a lot. But when I'm looking at the $160 billion, $200 billion price tag of this deal, that doesn't pay for it.

HUTCHISON: Well, if you add in the freezes in the federal salaries across board for civilians, not military personnel but civilians, and members of Congress, of course. BURNETT: Right.

HUTCHISON: And you add in the flexibility to cut down on the cost of unemployment insurance. We also begin to phase down the limits on unemployment insurance so that instead of over two years as a limit on unemployment insurance, it would be phasing down to 59 weeks which is about a year and three months.

So, we're beginning to make the adjustments that are going to make more efficiencies and stop a lot of the waste that is in the system today.

BURNETT: All right, Senator Hutchison, thank you very much. Appreciate your taking the time. Good to see you.

HUTCHISON: Thank you, Erin.

BURNETT: John Avlon is here with us.

All right, what do you make of this? I mean, will Democrats go along with federal freeze, congressional salary freeze? If they can throw the pipeline out of the deal, is that the deal we'll get, or no?

JOHN AVLON, CNN CONTRIBUTOR: I think that may be what it looks like, when the pipeline, attaching the pipeline, this makes no sense at all.

(CROSSTALK)

BURNETT: I knew you were going to give it up, right?

AVLON: Unless it's just some clever poker there by Speaker Boehner. But it's a strategic move. It has nothing to do with that tax.

Look, everyone is against waste, fraud and abuse. I mean, the president backed that initial freeze on civilian federal workers. Extending that makes sense. Obviously, if we see the thin edge of means-testing, I think that's very popular as well and can help deal with some of the entitlement costs that we have.

But here's the crazy thing -- you know, Republicans have always backed tax cuts. Now they're saying it needs to be paid for, that's great. The fact that this is being motivated by their desire to go on vacation is what's driving me crazy, I mean -- and so many folks. I mean, this is --

BURNETT: That's what it takes, John, to get them to do something.

AVLON: I mean, seriously. That will focus their mind. They want that two-week break in.

This is something they agree in principle and they should be able to forge an agreement. But they're still playing this brinkmanship. They're still playing political poker, and that just means playing politics with people's futures.

Thousands of dollars that could see out of their paychecks next year if they don't find a way to reason with this.

BURNETT: All right. John Avlon, thank you.

AVLON: Thank you.

BURNETT: All right. Coming OUTFRONT: Face to face, the Penn State scandal takes a dramatic turn. Jerry Sandusky meeting his alleged victims.

Also, armed and reporting. A woman allegedly opens fire on her son-in-law and the entire incident is caught on iPhone. We'll show it to you.

(COMMERCIAL BREAK)

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

And tonight, we begin in Syria where the opposition says Syrian security forces threatened a violent siege in the flashpoint city of Homs.

Jim Clancy is following the story from Beirut.

And, Jim, what are you hearing from people there?

JIM CLANCY, CNN CORRESPONDENT: Erin, opposition leaders in the city of Homs, Syria, are telling us of a population on edge tonight. We talked to a member of the revolutionary council there who said they will not lay down their arms or turn over members of the free Syrian army. He says, if we want freedom, we will have to sacrifice. And he predicted that if there is a major assault on the city, they would indeed pay a high price in blood -- Erin.

BURNETT: Jim, thank you.

And now to Pakistan where U.S. forces have met that country's deadline to vacate a drone air base. Following last month's NATO air strike that killed 24 Pakistani soldiers.

Reza Sayah is in Islamabad tonight.

And, Reza, can the U.S. regain access to Shamsi air base?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Erin, it doesn't appear the U.S. is desperate to get back into Shamsi air base. U.S. officials say they have air bases in Afghanistan they can use to launch drones. Even if they did want to get back, doubt it's going to happen any time soon and won't happen until Pakistan gets something in return.

This is all part of the ugly fallout after last month's NATO air strike that killed 24 Pakistani soldiers. An angry Pakistan also shutting down two NATO supply routes here.

Despite the messy situation, these are two countries who say they want to work things out because they know they need one another but it's certainly going to take some intense diplomacy in the coming weeks -- Erin.

BURNETT: Reza, thanks.

And now to England where British Prime Minister David Cameron faced critics in parliament after returning home from the E.U. debt summit in Brussels.

Jim Boulden is in London.

And, Jim, what did Cameron say?

JIM BOULDEN, CNN CORRESPONDENT: Erin, it's always wonderful political theater when the prime minister has to go to parliament and explain himself. And on Monday, David Cameron explained why last week he vetoed Europe's push toward a big new treaty to create tighter fiscal union. Cameron said it would be bad for Britain's huge financial sector. The German-Franco plan wants to have a new EUY treaty to try and keep on the eurozone from getting into another fiscal mess.

And the opposition here in Britain said, of course, that Cameron came back from Brussels with less power for Britain -- Erin.

BURNETT: Jim, thank you.

And no plea deal talks. That's what Jerry Sandusky's attorney says about the child sex abuse case against the former Penn State assistant football coach.

Now, tomorrow, Sandusky will be forced to sit in court and listen to several of his alleged victims testify against him in the preliminary hearing. Ten boys so far have formally accused Sandusky of sexually abusing them while they were participating in his charity, the Second Mile. Sandusky denies the allegations. He is currently free on $250,000 cash bail.

Sara Ganim is in State College. She has the latest on the case.

Sarah, good to see you again. And who's expected to testify tomorrow?

SARA GANIM, CNN CONTRIBUTOR: Well, Erin, we know that several of the victims, alleged victims, are expected to be here. Some of them may take the stand. We don't know how many.

We do also expect to hear from police officers, possibly witnesses. But, you know, you have to remember that this is not a trial. This is a basic evidentiary hearing. And you know, we're not expecting it to really be a mini trial.

Jerry Sandusky's attorney Joe Amendola told CNN on Friday that anyone expecting a bombshell here tomorrow is going to be disappointed. But, you know, he's probably not going to put up much of a defense. This is a point for him to gather information, to see what witnesses are going to say, and then to prepare for trial, which is of course down the line.

BURNETT: All right. Sara, let me ask you a quick question, though. Mike McQueary, who testified in front of the grand jury, this is the assistant coach who had witnessed Sandusky, he said, raping a boy in the shower. But another witness may contradict that, you're hearing.

What are we going to learn about that?

GANIM: Well, it's not clear if we're going to learn about it tomorrow. I do think this is going to be a key piece of evidence on Friday, when two Penn State officials are having the same preliminary hearing on perjury and failure to report charges.

Now, what we know is that the very first time that Mike McQueary told that story about what he saw in that shower in 2002, he didn't mention anything about seeing anything sexual. What he said to this doctor, who did testify before the grand jury, was that he asked Mike McQueary, what did you see, several times. And Mike McQueary said he only heard things.

And he also said, some of the details of his story are different than some of the details he provided to that grand jury, and to police, in his written statement. So, you know, we'll have to see what happens Friday. But I'm not sure that that's as big of a deal tomorrow when there is 10 different cases against Jerry Sandusky, 10 different alleged victims, and that's only one of them.

BURNETT: All right, thank you very much. We'll be talking with you tomorrow.

Now, a story out of Broward County, Florida. Dramatic footage of a bitter divorce and custody battle gone wrong.

It all began when 39-year-old Salvatore Miglino tried to pick up his son for visitation. He was shot twice by his 66-year-old mother- in-law, Cheryl Hepner. What's more is Miglino captured it all on his own iPhone.

Now, we want to make sure you know, Mr. Miglino survived this today. You're about to see what happened. He is recuperating in the hospital tonight.

But he began the recording because something told him there would be trouble tonight.

(BEGIN VIDEO CLIP)

(GUN FIRE)

SALVATORE MIGLINO: I can't believe you did that. I can't believe you did that. What, are you crazy? (EXPLETIVE DELETED)

MIGLINO: You shot me.

CHERYL HEPNER: Get off me.

(EXPLETIVE DELETED)

MIGLINO: You're crazy. You shot me.

(END VIDEO CLIP)

BURNETT: The story gets even more bizarre. The victim and shooter called 911 but with two very different scenarios. Here's the mother-in-law, Hepner's call.

(BEGIN AUDIO CLIP)

HEPNER: Yes.

911: Listen to me. Did he pull the gun on you or did you pull the gun on him?

HEPNER: No, he pulled it on me and he's got it, he drove away.

(END AUDIO CLIP)

BURNETT: And here's Miglino's.

(BEGIN AUDIO CLIP)

911: You said the mother-in-law shot you?

MIGLINO: Yes, my mother-in-law. Oh my God.

911: Oh, OK.

MIGLINO: I can't believe this is happening.

(END AUDIO CLIP)

BURNETT: But it's the iPhone video that told the truth in the end. Hepner is under arrest, and Miglino, as we said, is recuperating in the hospital tonight.

Paul Callan is with us.

Paul, this is the kind of case -- well, who knows how it would have gone down a few years ago before cell phone video.

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Radically different outcome. Mother-in-law would have called 911, said he shot me or I wrestled the gun away from him in self-defense. Now, she's got the iPhone running, wow, technology changes everything.

I mean, that's why juries want to see this stuff. They want to see tape. They want to see scientific evidence.

In this case, it may have saved him from going to prison.

BURNETT: Except for he's the one with the gun.

CALLAN: Well -- true enough. True enough. But, you know, the other thing we can talk about, too, I suppose is with respect to this incident, if there was no gun, just an angry mother-in-law, you know, would someone have been shot? I think opponents of gun -- liberal gun laws would say this is the kind of case that demonstrates that we should be very restrictive about who gets to carry a gun and who not.

BURNETT: And Florida gun law, we looked into this, is pretty liberal, correct>

CALLAN: Yes, it's very liberal. You can pretty much get a gun as long as you're not a criminal, or insane or a drunkard under Florida law. And you can also use a gun in defense of property, pretty liberal.

Now, other places like New York, New Jersey, it's possible to get a gun. And even defending your home there's severe restrictions on it. But Florida is pretty liberal about the use of guns.

BURNETT: What sort of punishment might come out of this? Domestic dispute, guns freely allowed. He's injured. But what could happen to her?

CALLAN: Well, she's facing severe punishment. I mean, this could be viewed as attempted murder and she could be facing serious jail.

And just one other thought, you know -- people who favor gun rights would say that guns don't shoot people, mothers-in-law shoot people. But I guess that wasn't a good way to end this, huh? It was supposed to be a joke.

BURNETT: Plenty of jokes we could make, but somehow.

CALLAN: It's a mother-in-law story, we had to end with something like that. In any event, people who say we need stricter gun control legislation would have something to argue here as well. So we see a little argument on both sides.

BURNETT: All right. Paul Callan, thank you very much. Appreciate it.

Next OUTFRONT, back to battle. The man behind Blackwater is now trying to return his security contractors to Baghdad. The interview, next.

(COMMERCIAL BREAK)

BURNETT: So imagine if you were in Iraq or Afghanistan and every day, you got up to go to work and your life was at risk. Well, that's exactly what the employees of the security firm Academy do in foreign countries. Academy is the new name of the company formerly known as Xe, formerly known as Blackwater.

The company obviously has a controversial history. It was evicted from Iraq after its agents killed 17 Iraqi civilians in a 2007 shoot-out.

But now, Academy CEO Ted Wright wants back into Baghdad.

(BEGIN VIDEOTAPE)

TED WRIGHT, CEO, ACADEMY: The reason we want to get back in Iraq is a couple of reasons. Yes, there's a great deal of opportunity there, because that's where our customers are. The Department of State is there. In the future more commercial companies are going to be doing business in Iraq and they're going to need the kinds of services that we provide.

The other part of the holy grail I think you're trying to get to, which is true, is if we can convince the United States government and the government of Iraq that the services we provide, which have always been excellent, have now been provided with good governance and accountability -- and they accept that, then it's proof positive that we've changed this company.

BURNETT: And what about Afghanistan? Are they going to be making another decision on private contractors in March? President Hamid Karzai has called security companies like yours, and I quote, "thieves by day, and terrorists by night." Obviously you're counting on remaining there. Where is the biggest growth for you right now? I mean, is it really just still Iraq and Afghanistan?

WRIGHT: Well, in Afghanistan in particular, the growth really is in training because as a --

BURNETT: Police forces and --

WRIGHT: Police forces because, as you kind of alluded to is he wants to take all of the security forces inside the government. There's no infrastructure, not enough infrastructure and people trained inside the government. So, the biggest opportunity for us is training.

BURNETT: I'm curious in some of these countries when I've traveled there -- there's a lot of skepticism about what you do. And they say, well, look, you guys lobby so well in the United States to get G.E. or CNN, in order to get insurance to travel in these countries, we have to have security. So, it just creates an automatic business for you.

And people say, but it's really not that dangerous there. You really don't need all these convoys and all this private security.

WRIGHT: Yes.

BURNETT: What do you say to that criticism?

WRIGHT: Well, I would say they're wrong. There is a great need for security in that country. You can watch the news or read a newspaper any day of the week and see what's going on for yourself. I don't think we need to lobby for protective services in places like Iraq and Afghanistan.

BURNETT: Anywhere in the country or certain regions?

WRIGHT: Well, some regions are worse than others, obviously.

BURNETT: What about most of your employees former military special forces, SEALs, Rangers, you name it.

WRIGHT: Exactly, correct. Yes.

BURNETT: How much more do you pay them than what they get in the military?

WRIGHT: I don't know the exact numbers, but the difference between ourselves and the military folks is when the government no longer needs our service, they send us home and they no longer have to pay us to do that service. And so, we end up being more cost effective in the long run.

BURNETT: I know you said you never met Eric Prince.

WRIGHT: That's true.

BURNETT: The guy who originally founded Blackwater.

WRIGHT: Yes.

BURNETT: And now, he's in Abu Dhabi training a mercenary force, private guys from around the world to sort of special forces for the American ally United Arab Emirates.

Is this where we're headed, where mercenary forces are going to be who fight the battles around the world? Where it's not a national flag that determines who you are fighting for but who's paying your paycheck?

WRIGHT: I hope not. I know this company Academy is never going to be a mercenary force. We're totally embedded and totally focused on protecting other people and training people to protect other people. We have no mission of our own, we take no ground, we have no offensive capability.

BURNETT: All right. Well, Mr. Wright, thank you so much. Appreciate you coming in.

WRIGHT: I sure appreciate you allowing me to be here today.

(END VIDEOTAPE)

BURNETT: All right. Well, Jon Huntsman, as you know, took on Newt Gingrich today in a one on one. It's something Jon Huntsman hopes will turn around his fortunes going against the front-runner. Jon Huntsman, as we said, put off of his oeufs, eggs, in one basket, that basket being New Hampshire.

He's going to be our guest tomorrow to talk about his strategy and a whole lot more. That's coming up tomorrow, our discussion with Jon Huntsman.

In the meantime, thanks for watching.

"ANDERSON COOPER 360" starts right now.