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Interview with Representative Terri Sewell, Representative Michael Grimm; Making Congress Work; Governor Recall; Iranian Trouble; Interview with Wikipedia Founder Jimmy Wales

Aired January 17, 2012 - 19:00   ET


ERIN BURNETT, HOST: Thanks, John. Well the countdown of the Wikipedia blackout on at midnight. The site goes dark, the co-founder of Wikipedia, Jimmy Wales exclusive OUTFRONT tonight.

And under pressure to release his tax returns, Mitt Romney backs down and reveals his tax rate, fair or unfair? We crunch the numbers.

And the "Bottom Line" on Congress, it's back after a month long vacation. Are they refreshed, ready to go, make a difference, change the world?

Let's go OUTFRONT.

Well, good evening, everyone. I'm Erin Burnett and OUTFRONT tonight, welcome back, Congress. We missed you. We really did. After four years -- four weeks away from Washington -- that might have been a very bizarre, but appropriate slip of the tongue -- the House is returning to work today, hopefully rested and ready to make up for frankly abysmal 2011.

Look at the track record. It is full of failures. They didn't agree on raising the debt ceiling until the last minute, which caused America's credit rating to be cut. That hurts all of us. They didn't agree on a budget, causing several near government shutdowns. They didn't cut the deficit for the super committee. They didn't figure out a way to pay for a year-long payroll tax cut.

(INAUDIBLE) all that, it's really not a surprise that the newest CNN poll shows only 11 percent of Americans approve of how Congress is handling its job. That is an all-time low. More people approved of how BP handled the Gulf Coast oil spill. In the month that Congress has been off, some members have taken taxpayer funded work trips abroad.

Speaker John Boehner went to Mexico and South America. Majority Leader Eric cantor led a delegation to the Middle East and France. Other delegations of both parties went to West Africa, India and the Philippines. Well all of this could be something Americans could deal with if next session was productive. Certainly not like 2011, right now though some real challenges.

The battles ahead seem eerily similar to last year. First up, raising the debt ceiling limit, paying for that payroll tax because by the way that expires on February 29th, and the super committee, super committee our hopes so reside on you. Bush tax cuts obviously in 2013, in January; we've got to figure out that out before the end of the year. Major challenges, but we are hopeful.

We've had divided governments in the past. Everyone said it has never been worse, but yet they fixed it, they got better. That was the American can-do way. All right, so we want Congress to feel the heat, but see the light. Let's make Congress work.

Congressman Michael Grimm joins us, Republican from New York and Congresswoman Terri Sewell, the Democrat from Alabama, and good to have both of you with us. And I'm glad you are smiling after that intro. (INAUDIBLE) but you all know it is what it is and you're sitting here a Democrat and a Republican. Are you going to work together?

REP. TERRI SEWELL (D), ALABAMA: I think that one thing I have learned as a freshman is that it is really important to collaborate. Collaboration is really important. You know I have hope because in Alabama my delegation had to come together after the April tornadoes, Republicans and Democrats, in order to provide for disaster assistance for our constituents so I think that that hope springs eternal.

REP. MICHAEL GRIMM (R), NEW YORK: And there's no question I can tell you right now I am standing next to one of my favorite freshmen colleagues regardless of what side of the aisle I may be standing on at the time. She is great. We have had many conversations on the floor and it is the process that needs to happen.

Listen, we're a polarized nation right now. No one can deny that and it's our job to get this country back together. I'm willing to do it. I know that my colleague is and this is a new year. It's an opportunity for us to overcome our challenges and put our country first and I'm very excited to get to work to do that.

SEWELL: I am, too.

BURNETT: I love it. Just keep that sound bite. Now I feel elated and happy, but in all seriousness, is this going to be a tough year? It's an election year. And Representative Grimm, a lot of people from your party have come out recently, you know last week the president said hey, you know what, I want to get rid of six agencies and make them one, and some people in your party said well you know what, we want to do a whole lot more than that, and so we're not even going to give you that. We're not going to give you anything. And that really came off as well more of the same and bad spirited. What are you going to do about that?

GRIMM: Well, first of all, I think that part of the frustration, at least on the Republican side is that we've put a lot of these initiatives on the table already and if you look at many of the bills that have passed the House a lot of it deal with these things. There's a lot of duplicative redundant things that we said we should consolidate, you know going back to the beginning of last year, so it's a little frustrating that it at least feels like the president is taking some of those initiatives, dusting them of and now saying they are his own and we are supposed to support it, but why didn't we support that all year long? So that's a little bit of frustration, but at the end of the day, I think we're going to work together and I think we're going to get it done.

BURNETT: So you will get it done. All right, so let me ask you about this debt ceiling issue, Representative Grimm, you again. So obviously as part of the deal last summer the debt ceiling is going to go up, but you have a chance to cast the ceremonial vote disapproving of it and you're going to cast it disapproving, right, in your case?


BURNETT: Now why is that? Why not just say you know what, we all know we have to do this? That could be a really good way to make a goodwill gesture.

GRIMM: Well, I think that because the negotiations up to this point have not been completely in goodwill. The other thing is I think that most of Republicans and I think a lot of my colleagues on the other side realize that we are facing an out-of-control debt crisis, and we have not been able to really get that under control. We still have not put a plan forward that the rest of the world deems credible let alone the United States.

SEWELL: But I agree with you, Erin. You know I think that they are playing political games. I think at the end of the day we have to raise the debt ceiling, because America pays its bills. You know that. I know that and I think that you know and having a resolution on the floor just to vote no about raising the debt ceiling when you know that we have to work together to do so is to me just brinkmanship.

GRIMM: And I respect that. I respect that opinion, I really do, but at the same time America pays its bills, but America has been living way above its means for so long that if we continue on that, we are about three years away from Italy, so --

BURNETT: Right, but don't you think --

GRIMM: We know what is happening in Europe. Let's get a handle on it --

BURNETT: Don't you think you've made that point, Representative Grimm, before? I mean I think we all know that and frankly that, you know the Tea Party contributes to that awareness of the debt problem. For sure they deserve credit for that --


BURNETT: But we know it --

GRIMM: But if we know it why aren't we dealing with it?

BURNETT: -- and this is going to pass anyway. OK.

GRIMM: But if we know it why aren't we dealing with it? So this is another step to say you know what, we've been fighting all year long to really control the debt and to put a plan in place that deals with it, but we have yet to do that. So I think it's not just ceremonial. It's a reminder to America. It's a reminder to the president that we are living above our means. We are spending money we don't have and we're borrowing from nations like China and we're putting ourselves in a debt crisis that we might not be able to get out of and we have to continue to ring that bell to say wake up America. We've got to get a handle on this, so I think that's what it's about.

BURNETT: OK, the super committee though was charged with doing just that and failed. What will each of you agree to that might upset your party that you would agree to deal with that problem. Right, we know there is a problem?

GRIMM: If you want, I will take it first.

SEWELL: Go for it.

GRIMM: One of the things I did was join "Go Big" (ph). That's a group that is bipartisan, bicameral that is working you know day and night on the policy and the procedure to do a real, you know something tangible, something the world is going to say OK that makes sense, whether it is four billion -- four trillion, five trillion, I don't know the exact number, but it's a big number and what I promise and I will promise my colleague right now on TV is that anything you put on the table I agree not to demonize or just shoot down.

It doesn't mean I'll agree with it, but I'm not going to you know make fun or you or in any way put you down because of your ideas and that's what I would hope we can do this year is at least listen to each other, and I know I can with you, but we need to do it as parties and conferences that we're not going to demonize each other's ideas. We're at least going to listen to them and work together even if we disagree.

SEWELL: I agree with you. Listen, I think that we agree on this issue which is collaboration and working together for a common cause. I think that for me I have joined a bipartisan caucus as well, the "Common Cause" is a group of freshmen both Republican and Democrat and we're going to -- we're committed to working together to solving some of our nation's biggest problems and so I look forward to working with you, Michael, and I'll take you up on that offer about working together.

GRIMM: If there were more members like you, we'd have all the problems worked out --

BURNETT: I mean are you guys getting married or something? You've got the matching outfits. This is a love fest. I just --


GRIMM: I asked, but she said no.


SEWELL: My mom is watching.

BURNETT: All right. Thanks to both of you. We appreciate it. As we said, we'll hold you to it and have you back.

GRIMM: Thank you.

SEWELL: Thank you.

BURNETT: All right. Wisconsin Democrats and unions have collected more than a million signatures demanding the recall of Governor Scott Walker, posturing or the end of Walker's days?

And Iran says they are finally giving back America's super secret spy drone, sort of -- sort of. We have the drone. Really, I have the drone.

And we have obtained the tapes from the downed cruise ship in Italy. They reveal the Coast Guard had to shout at the captain to return to the ship. We're going to play that for you.


BURNETT: All right. See that box. That is just one of several that hold more than a million signatures from voters in Wisconsin. They all want Republican Governor Scott Walker gone. Why the outrage? Well, it stems from the governor's push last year to cut the collective bargaining rights of state workers. He and his Republican legislature argued it was necessary in order to cut the state deficit without raising taxes.

You remember this -- remember these images? It is sort of -- it riveted the country, riveted us -- protests from unions literally shutting down the state legislature for weeks last year. In the end, the Republican bill to cut union workers rights passed. Democrats are still angry, and they are not going quietly.

We asked the man leading the charge to get rid of Governor Walker, Wisconsin Democratic Party Chairman Mike Tate whether it's worth the $9 million of taxpayer money that it will cost to have a recall election right now, and here's what he told me.


MIKE TATE, CHAIRMAN, WISCONSIN DEMOCRATIC PARTY: It is certainly extraordinary step to go outside of the regular political process, but I think it is absolutely necessary one in this case, and one million of my fellow Wisconsinites agree with me. You know when Governor Walker ran for office he didn't talk about how he was going to govern. He didn't talk about taking collective bargaining rights away from public employees. He didn't talk about the largest cut to public education in the country.

He didn't talk about you know defunding the University of Wisconsin system and many other things. So while it is going to cost a little bit of money to have these elections, I think it is going to be the best down payment we can make on our state's future and in the future of our families.


BURNETT: So, are recalls the new way to hold elected officials accountable and is this really worth the people's time and money? It will really end up that you are running for election all of time? It already feels that I was. OUTFRONT now Reihan Salam, columnist at "The Daily", co-author of "The Grand New Party" and Jen Psaki, a Democratic strategist, former deputy communications director for President Obama. Good to have both of you with us.

UNIDENTIFIED FEMALE: Hi, Erin, great to be here.

BURNETT: Good to see you, Jen and Reihan, let me start with you. Only two governors in U.S. history have been successfully recalled, so is this a good example of the people's frustration? They got the signatures they needed. This is the way the political process fairly should work.

REIHAN SALAM, COLUMNIST, "THE DAILY": Well, I've got to say I think that it reflects the depth of frustration and also how intensely our ideological divides are shaping the electorate. The last time around this happened in California it was a Democratic governor who was recalled and this time it is a Republican governor getting recalled and my fear is that we're just going to see this become a back and forth again and again, a tit-for-tat, and I think that the underlying issues are actually much more scrambled than people understand.

BURNETT: Jen, what is your point of view here? I mean you know the people who are recalling him say well he didn't say he was going to do all of these things, but a lot of people get elected to office including presidents who come in and they don't say everything they are going to do and then they do it, so is this enough of a grounds in your view for a recall?

JEN PSAKI, DEMOCRATIC STRATEGIST: Well, Erin, as you touched on, recalls are rare and there is a high bar to jump over to recall someone, but you're talking about a million people who have signed petitions in Wisconsin. That is an almost 25 percent of the people who are eligible to vote in the state who are so dissatisfied and so unhappy with the governor that they have the right through the democratic process, through the process allowed by law to take action. So I don't think this is the start of a trend. I think it is more a case where people in the state are so dissatisfied with the governor's attack on worker's rights and they are taking action.

SALAM: I think it absolutely is the start of a trend. If you look at the last time we had a recall, Arnold Schwarzenegger came into office and he tried to curb the power of public sector unions with a huge series of referendum campaigns in 2005. He lost because these folks have extraordinary resources at their disposal. They spent $20 million the last time around to defeat a group of state senators and this time they're going to spend way more than that because they recognize part of the law said that you know dues, which could be up to $1,100 per worker, they should no longer be mandatory. You should be able to choose whether or not to pour your salary into what are essentially political campaigns and so they know that if you actually drain that money away, they're not going to able to choose who their bosses are. And choosing who your boss is, is a great way of seeing to it that you're constantly getting paid more regardless of what happens to your productivity. Walker is not the best messenger unfortunately, but this is fundamentally a purple proposal, not a red proposal, because it gave Democratic as well as Republican mayors the opportunity to come to common sense bargains with public workers in the state.

BURNETT: Even Chris Christie who has obviously had tussles very vocally and is in the midst of them, Jen, with the unions in the state of New Jersey have said maybe Governor Walker didn't go about this politically the best way.

PSAKI: Well here is what I know about Governor Walker. Today, nearly a million people -- petitions are being turned in nearly a million people signed trying to oust their governor and he is in New York doing a fund raiser with the former CEO of AIG, so I think it is clear he is pretty disconnected from the challenges going on with the workers and the families in his state, but at the same time, budget cutting has become an attack, and a weapon by Republicans across the board, not just Governor Walker, but you know, you look at "Cut, Cap and Balance" that's been something Republican candidates including Mitt Romney and many in Congress have touted. And there are some concerning issues I think people are going to take a closer look at over the next couple of months --


BURNETT: I mean I guess you could argue that was a national thing that we've seen improvement there, but they have, Jen.

PSAKI: Wisconsin -- I'm sorry I didn't hear --

BURNETT: Wisconsin among others?

PSAKI: Well, that's true, but at the same time, I think people are concerned, also, about making sure they have the rights. Making sure they have you know, the ability to stand up for workers in their state, and workers, you know, across the country and this is an example of somebody who is overreached and trying to cut down on rights for workers, and I think people will take a close look at that.

SALAM: Well look, here is something very straightforward, Illinois is a state right next door to Wisconsin. It is a state where they tried to balance the budget with huge tax increases and it's a state where they laid off a huge number of public workers whereas Wisconsin is a state where they said look, let's have a common sense agreement on these labor agreements, on health care costs, et cetera, and they fired way fewer workers. It was actually better for public workers who wanted to keep their jobs in Wisconsin than in Illinois. So if you want to go down the road of Illinois and see tons of public workers get laid off, if you want to see services deteriorate go that route. If you want to have a situation where Democratic and the Republican mayors can come to common sense agreements that's what Walker's proposal really did.

BURNETT: All right, two different world views and thanks to both of you for coming on sharing --

PSAKI: Thank you, Erin.

BURNETT: All of you, let us know what you think on Twitter.

SALAM: Thank you very much.

BURNETT: Security today is tighter in Teheran. The country taking quote "remarkable measures to protect its nuclear scientists" after last week's murder of a leading scientist. Now we're not sure exactly what that entails for security, but the government has arrested several suspects linked to the assassination. Now we're trying to find out if the arrested were Iranian, American or other nationalities. Iran is keeping their identities secret for now. Iran also today again blaming Israel and the United States for the murder. We asked former Department of Homeland Security and CIA official Chad Sweet about the significance of the arrest.


CHAD SWEET, CHERTOFF GROUP CO-FOUNDER: They are significant if in fact the Iranians have been able to identify agents of either Israel or another foreign power such as Saudi Arabia. If they can produce any kind of evidence that connects them with a foreign power, we could be looking at a major international incident. So this is something we need to watch.


BURNETT: Also today Egypt sent a letter to the United Nations signed by 140 countries including China saying that they quote "condemn America for violating Iran's air space with the Sentinel drone." Now, Iran still has the top secret drone, you see it there. They put it on display and there is a big development on the return of the drone. Remember President Obama saying this.


BARACK OBAMA (D-IL), 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 will see how the Iranians respond.


BURNETT: All right, well Iran responded today saying it is sending a toy replica of the drone, yes, and they are going to inscribe on the belly, I suppose here on the Star Wars you could put it here, we will trample the U.S. They offered to send it to the United States in pink. Yes.

Presidential candidate Mitt Romney, a multimillionaire pays a lower tax rate than you. We are going to talk about that.

And the U.S. government says America is overrun with giant snakes. They're planning to do a number of things about it.

And which of these beers comes from America's largest brewery. Place your bet on Twitter and Facebook now. For those of you wondering, yes, these beers are chilled and ready for our staff to drink after the show -- the answer OUTFRONT next.


BURNETT: So the U.S. Fish and Wildlife Service announced today it is banning the import and interstate transport of four non-native constrictor snakes. The decision that takes -- oh, all right -- the decision takes effect in two months. It lists the Burmese python, the Yellow anaconda, anaconda don't (ph) and the Northern and Southern African pythons as injurious wildlife that's threatened the Everglades and other sensitive ecosystems by killing highly endangered species like wood rats and wood storks.

According to the director of the Fish and Wildlife Services quote, "Burmese pythons have already caused substantial harm in Florida. By taking this action today, we will help prevent further harm from these large constrictor snakes to native wildlife", which brings us to tonight's number, 100 million. That is the dollar amount the U.S. Interior Department spends every single year to control pythons and other invasive species.

Now the figure covers expenses including the hiring of adorable snake-sniffing dogs like Thomas. We met Thomas. He is supposed to help find and eradicate pythons and other large constrictor snakes. We met a lot of these dogs when we visited the Homeland Security Training Center, and considering the pythons have been known to devour animals as large as 76-pound deer, this has got to be the worst job ever for dogs that weigh 20-25 pounds.


BURNETT: Still OUTFRONT -- the "OutFront 5". Abandon ship.


UNIDENTIFIED MALE: And with 100 people on board you abandon the ship?

BURNETT: Wikipedia takes a stand.

UNIDENTIFIED MALE: This bill is very badly written. This bill will damage the Internet.

BURNETT: All this OUTFRONT in our second half.


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

Up first -- welcome back, Congress. The House is back in session after a month-long break. Hopefully rested and ready to make up for 2011.

Unfortunately for us the battles ahead are not different from last year. The first likely fight will be raising the debt ceiling limit, starts tomorrow, coming to a place near you. And then paying the payroll tax cut that expires next month, remember that two-month deal -- kind of super committee, we hold out hope for that.

And the Bush tax cuts, they are going to expire at the end of the year. That is going to be one hell of a ticket.

Two Congress freshmen came OUTFRONT tonight, Democrat Terri Sewell from Alabama, and Republican Michael Grimm from New York. They promised they wouldn't fight each other, we'll be watching.

Number two, a convicted murder pardoned by Mississippi Governor Haley Barbour, ignoring an order to check in with the state. His family refusing to cooperate. That's what the state attorney general, Jim Hood, told CNN.

Joe Ozment was sent free a week ago, but the judge ruled Ozment and four others would not -- shouldn't have been released. So, everyone but Ozment has contacted the state. He was convicted of murdering a store clerk and sentence to life in prison.

Number three, a shakeup in the beer world. America's largest brewer is now Yuengling. Where did it go? You took my beer away.

I'm supposed to -- I had a cold beer here.

Anyway, the (INAUDIBLE) from beer marketer insight -- someone stole it. I mean, is it open over there?

D.G. Yuengling and Sons passed Boston Beer, the maker of Sam Adams, as the largest American-based brewer in 2011.

What about Bud and Miller, say you? Those were also stolen. Budweiser owned by Anheuser-Busch, InBev, the Belgian Brazilian company. Miller and Coors owned by a British and Canadian conglomerate. Meaning, none are truly American beers anymore.

I want to know who has it. Surratt (ph)?

Number four: Kraft Foods announced today 1,600 layoffs in North America. Forty percent of the cuts are coming from its sales units. And we are told the layoffs came after the maker of Ritz Crackers and Maxwell House decided last year to split into grocery foods and snack foods.

In a statement given to OUTFRONT, Kraft Foods President Tony Vernon said, quote, "Making these tough choices is never easy. Our plan for a more nimble company combined with the current economic and competitive pressures, led us to this point."

Well, it has been 165 days since the U.S. lost its top crediting, what are we doing to get it back? Americans are cutting their credit card debt, for one. New data from shows that the average credit card balance in 2011 was $6,576, down 11 percent from a year ago.

OK. Well, Mitt Romney has come under intense pressure to release his tax returns, and today, he showed us a little leg.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: What is the effective rate I've been paying? It's probably closer to the 15 percent rate than anything, because the last 10 years, I have -- my income comes overwhelmingly from investments made in the past rather than ordinary income or rather than earned annual income. I get a little bit of income from my book, but I gave all of that away. And then I get speaker's fees from time to time, but not very much.


BURNETT: All right. The comment got a lot of reaction -- mostly from the people who thought it was unfair that they were paying a higher rate than Mitt Romney. So, we went to look at the numbers and actually found out something surprising.

Thanks to help from the Tax Foundation, a nonpartisan group, we learned that there are 138 million tax returns in 2009 and the latest year available. Look at this -- 75 percent of those taxpayers paid a rate lower than Mitt Romney, only 25 percent paid more.

We've got two of our favorite people here to tell us what they think. Contributors David Frum and, of course, John Avlon. Someone handed me the (INAUDIBLE) to prove I guess that's enough.

The win of this segment --


BURNETT: A cold one.


BURNETT: All right. So, he showed a little leg today and he said he's going to release his tax returns in April.


BURNETT: That was important, right?

AVLON: In April, though, after the primaries are probably going to be over, and now we know why he's been resisting to release the tax returns. I mean, this is what frustrates some of these folks. We're having a fight about the Bush tax cuts, people saying that raising the rate from 35 to 39, where it was under Clinton, is akin to socialism. And then we find out that, you know, a lot of folks who are in the super rich category are paying 15. Now, we also know why he doesn't -- why he doesn't support the Buffett Rule. What we're learning is, and this is an election liability, it's not that Mitt Romney is the 1 percent, he's the 0.001 percent and this is what frustrates folks and makes a lot of people want, even on the center right, a flatter, fairer tax cut, with closed loop holes.

BURNETT: All fair points, although fascinating that 75 percent of Americans pay 15 percent or less, the very wealthy.

FRUM: They are the active workforce earning income. If you earn income, you pay at income tax rates. Mitt Romney is largely retired from the earning income part of his life. He's living on investments. Therefore, he's paying capital gains rate.

And there is a strong case for a lower capital gains rate and an earned income rate. And the way I advise people to think about this is we have a market control for assets, whether it's land, whether it's corporate governance, we want to make sure those transactions happen as seamlessly as possible.

If you own a piece of land and somebody has a better idea of what to do with it, we don't want to make a 50 percent barrier between flipping over the piece of property from the lower-valued user to the higher-valued owner. Remember, the asset pays tax whoever owns it, whether it's a company paying corporate income tax or they're piece of ground paying property tax.

BURNETT: Like someone selling their home.

FRUM: We want to make it seamless and quick. We don't want to put artificial barriers in the way, and that's why we have low capital gains taxes.

BURNETT: Interesting that a lot of people benefit from this in one way, shape or form. You got homeowners, right? I mean, obviously now, you have capital losses for a while. And you also have older Americans who have a lot of dividend income and pay a much lower rate, that if you were to change the rate, you would be hurting those people, too?

AVLON: That's right. And, look, I think the rate should be low for, you know, people who are living on widows and orphan kind of stocks, where they're living off their dividends. What we're clearly talking about is different here. We're not talking barriers to sell property, we're talking about someone living off very smart investments, good for him, but therefore paying a lower rate than many average --

BURNETT: You are even to the left of the president on this one actually. He is not trying to get the rate up here.

AVLON: We should be having a flatter, fairer tax code with fewer loopholes. And this is what frustrates so many people. This is the middle-class squeeze that people have been feeling, or even there is a distinction between the super rich, living off of 15 percent passive income in many cases, and the upper middle-working class that's working everyday and feeling squeezed.

BURNETT: That's a fair point.

FRUM: But let's understand the abuse is. Theoretically, you want to have capital gains as low as possible. But the thing that's made people I think so upset, look, we haven't had a lot of capital gains in the American economy over the past 10 years. Consult the Standard and Poor's, it's not up. Land prices aren't up.

What is happening -- and this is what enraging people and this is a valid complaint, is people investing not their own money, but other people's money, who have persuaded Congress to allow them to treat what looks a lot like income as capital gain. If your own money is not at risk --

BURNETT: Now, this is something that Mitt Romney in the past would have benefited from as a partner of Bain Capital. It sounds esoteric with that, sort of been very significant and --

FRUM: If that's why he's staying with 15 percent, then he's got a problem. But if he actually owns shares in companies and pieces of ground and he is an active investor, with his own money at risk, then for good economic reasons, you want a lower capital gains rate.

AVLON: And this -- the other thing this does is it blows in the argument he's made repeatedly, which is lower tax rates allow people to create jobs, because Mitt Romney on this passive income over the last decade hasn't been creating jobs. He's benefiting from a very low rate based on wise investments.

But if it's a real problem (INAUDIBLE) of things, that's when you start bringing some of these issues to the fore.

FRUM: We don't know that, he may (ph) on the elections.

AVLON: And that's because he's not going to release his rates until the primaries are over.

BURNETT: That's right. Well, hit pause.

All right. Thanks so much.

Well, we've learned more about the questionable behavior of the Costa cruise ship captain. There is the tape of exactly what happened that night. We're going to play for you. And the family that was onboard OUTFRONT.

And in the "Outer Circle," to North Korea, the older brother of Kim Jong-Un is talking out tonight.

And last week, this show, the only cable news outlet talking about SOPA. We're staying OUTFRONT.

On the eve of the Wikipedia blackout, the site's co-founder Jimmy Wales, exclusively OUTFRONT.


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

Tonight, we begin in North Korea. Kim Jong Il's oldest son predicting that the regime led by his half brother Kim Jong Un will fail.

Kim Jong Nam was passed over as leader of the reclusive estate after he enraged his father over a decade of ago by trying to sneak into Japan to visit Disneyland.

Kim Jong Nam, who has been living in semi-exile in China and Macau, says his brother is inexperienced, too young and has not been adequately groomed for the position.

Gordon Chang is author of "Nuclear Showdown: North Korea Takes on the World." And we asked him what's given Kim Jong Nam the confidence to talk now.


GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN: NORTH KOREA TAKES ON THE WORLD": The biggest mystery about North Korea is the how Kim Jong Nam, an obvious assassination target, could walk around Macau without a bodyguards and make all these subversive statements. And I think it's because Beijing was protecting him, because they perhaps saw the ability to surge him into Pyongyang and use him as a puppet in the future if circumstances warranted it.


BURNETT: And now to Afghanistan. The U.S. is inching closer to the peace talks with the Taliban. Special representative for Afghanistan and Pakistan Mark Grossman is in the region to work out details. He's been meeting secretly with Taliban negotiators for more than a year, and this comes on the heels of the Taliban's announcement that it plans to open a political office in the Gulf state of Qatar.

We asked Nick Paton Walsh what U.S. diplomatic officials are negotiating to try to get this done.


NICK PATON WALSH, KABUL, AFGHANISTAN: These are preliminary talks so far between the U.S. officials and the Taliban representatives. Everybody is really agreeing at this point that they have to get the Afghan government onside to come along with this process. That's what the U.S. officials have to do in Kabul in the coming days to convince President Hamid Karzai that it's a process that he and Afghanistan want to be a part of -- Erin.


BURNETT: Thanks, Nick.

Well, five more bodies recovered from the Italian cruise ship, the Costa Concordia, off the coast of Tuscany today. The death toll is now 11. Twenty-four people are still missing, including two Americans, Gerald and Barbara Heil, from Minnesota.

Meanwhile, the ship's captain, Francesco Schettino is under fire for abandoning ship before all the passengers, including children and the disabled, were evacuated.

Listen to the coast guard ordering him to get back on the sinking ship.


PORT AUTHORITY: And you would tell me how many there are in each category. Is that clear? Look, Schettino, you might have been saved from the sea, but I will make sure you go through a very rough time. I will make sure you go through a lot of trouble. Get on board! Damn it!

FRANCESCO SCHETTINO, SHIP'S CAPTAIN: I am going because now there is the other motorboat that has stopped now.

PORT AUTHORITY: You go on board. It is an order! You cannot make any other evaluations. You have declared abandoning ship. Now I'm in charge. You get on board! Is it clear?

SCHETTINO: Commandant.

PORT AUTHORITY: Are you not listening to me?

SCHETTINO: I'm going.

PORT AUTHORITY: Call me immediately when you get on board. Our rescue officer is there.

SCHETTINO: Where is your rescue officer?

PORT AUTHORITY: My rescue officer is at the stem. Go!


PORT AUTHORITY: There are already bodies, Schettino.

SCHETTINO: How many dead bodies are there?

PORT AUTHORITY: I don't know. I know of one. I've heard of one. You are the one to tell me how many there are. Christ!


BURNETT: Schettino could face manslaughter charges and up to 15 years in prison. A judge today placed him under house arrest while the court considers the charges.

The Italian coast guard continues to search for survivors. The divers struggle to move through a labyrinth of debris and furniture.

Joan Fleser and Brian Aho were on the cruise with their daughter Alana (ph), and we're fortunate to escape. They arrived in Albany, New York, this morning in New York State.

Good to have both of you with us. Appreciate your taking the time.

And let me just start by asking you about your reaction. I know you can hear the anger and the frustration of the port authority coast guard there telling Captain Schettino, Christ, it's your job to be there, and him fighting back. What's your reaction when you hear that given that you were there that day?


JOAN FLESER, CONCORDIA CRUISE SHIP SURVIVOR: It is -- it's incredible to believe that the man just left the ship, and with everything that was going on, people dying, and people panicking, with no direction from anywhere, and he just up and left the ship. It's just incomprehensible.

AHO: It's pretty hard to maintain a chain of command when the top man leaves the boat.

BURNETT: Let me ask you, Brian, what happened to you. You know, you were -- you got on the deck as you ran out of dinner and were trying to get life jackets. What happened and how did other people trying to escape treat you? It seemed like a Darwinian moment.

AHO: Well, when we first got up on the deck for where the lifeboats were, my first priority was finding a life jacket. I went to the first few lockers along the gunnell (ph), and there were no life jackets in them at all. Finally the third or the fourth locker, there were three in the bottom of it, and I dove in it. Absolutely dove in it -- took them out and started fighting my way through the crowd back to Joan and Alana.

People were just grabbing at the life jackets trying to pull them out of my hands. Luckily, I was holding them like a football that they could not get them away. I got them to Joan -- first to Alana and then one to Joan, and then a woman tried to pull the life jacket away from Joan and actually tore it in half. So I gave her mine, and then I don't even remember where I found another one.

And so, we all three had the equipment we needed.

BURNETT: Joan, what was your memory of exactly what happened at that time and were there moments of heroism from other passengers or was it really panic and some horrible moments, like people trying to grab your life jacket off your body?

FLESER: Well, there was panic. Every time the lights went out, people would start screaming and there was utter chaos.

As far as heroism, I have to commend my daughter. She saw one little girl with a life vest that was literally as big as she, and Alana who had a smaller life vest, you know, took hers and gave it to the little girl so that she would have something more suitable for herself. She was helping the children -- there were children there being squashed just by the pressings of the crowds. And she was really trying to help the children.

Some people really tried to get control of the crowds. Just by trying to get silence so that people would listen to the announcements, to stop pushing.


FLESER: And every now and then, people would like catch their breath and settle down a little bit, but then if there was another jerking of the ship, the panic would start all over again.

BURNETT: Brian, if you could talk to the Captain Schettino tonight, what would you say to him?

AHO: Boy, that's a tough one. I think I'm going to have to let the courts and take care of that. But it -- he'd have to realize how angry the whole world probably is at him at this point. And certainly, he's ruined the reputation of the professional captains around the world, and he certainly hasn't helped the Costa Lines.

BURNETT: Well, Joan and Brian, thank you so much. And glad that you are back home safe and at home, and your daughter as well. We appreciate you coming on tonight.

And I know Anderson Cooper has a lot more on the cruise ship crisis in Italy.

Anderson, what do you have tonight?

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Yes, we're following that story closely. It's just stunning. We're going to have all the latest obviously on the disaster, the newly released audiotapes really tell the story of what happened, the captain abandoning ships, according to the transcripts before all the passengers were off.

We're going to take you under water with a real life rescuer to see just how dangerous the conditions are that the crews in Italy are facing right now as they continue to search for bodies and hopefully maybe people still alive trapped somewhere aboard that ship.

We're also keeping the candidates honest in South Carolina. Several of them definitely have their own versions of the truth during last night's debate, some from fuzzy math on job creation, to a scuffle over food stamps. We'll take a look at the most important moments of the debate and where the candidates stand heading into this weekend's primary.

Those stories and the "Ridiculist" talking about Brad Pitt and the giggle at the top of the hour -- Erin.

BURNETT: All right. Looking forward to it, Anderson.

OUTFRONT next: we talked about the Stop Online Piracy Act last week and we're OUTFRONT of the story tonight on the eve of Wikipedia shutting down, blacking out, going away. Cofounder Jimmy Wales, OUTFRONT.


BURNETT: So, today, I was on YouTube and typed in the phrase "Barbie Girl" as is I'm a Barbie Girl.

Anyway, I was able to find a download of perfect audio version of the song. And to spare you my terrible voice, I was going to play it.

And off with the band behind it, it didn't get a cent when I downloaded it. Actually, we have taped this and I was playing it and danced and all that. But Will Surratt (ph), our executive producer, was worried that we get sued. So, we're not playing it.

But the point is, if you know the song, this is part of the giant battle inflaming the passions of millions, including the co-founder of Wikipedia. In fact, if you go to Wikipedia at midnight tonight, the Web site will be dark. You can't go there.

Wikipedia is shutting down in protest of legislation that's working its way through Congress called the Stop Online Piracy Act or SOPA.

You may remember, we were one of the few to report on the story last week. Since then, it's blown up with tech giants Google, Facebook, Yahoo, Twitter, eBay and AOL joining the fight against SOPA and supporters throwing their muscle behind it, including the parent company of this network, Time Warner, which owns HBO.

So, what is SOPA? It's a proposed bill that aims to crack down on copyright infringement, meaning it protects Aqua from people like stealing songs. But SOPA would also restrict to entire Web sites that host even one piece of content that's obtained without permission. Critics say that's unreasonable and it would cost a lot of money.

Earlier, I spoke to the man at the center of this entire story, co-founder Wikipedia, Jimmy Wales.

He joined me from Switzerland, and a U.S. television exclusive, and we asked him about stealing songs by Aqua and "Barbie Girl" and why he's so passionate about this issue.


JIMMY WALES, CO-FOUNDER, WIKIPEDIA: Well, for us, the openness of the Internet, the freedom of speech issues are really paramount. You know, one of the things that we do know is that in the U.S., we have a perfectly reasonable and workable regime for dealing with copyright violations. So, for example, if the group Aqua wants to have that song removed from YouTube, all they have to do is notify YouTube and YouTube has the responsibility to take it down.

That's not really the issue here. The issue is things like DNS blocking, blocking overseas sites that have some infringement content, placing all kinds of burdens on community generated sites like Wikipedia to police everything that our users are doing in an unreasonable way.

I'm a big believer that we should be dealing with issues of piracy and we should deal with them in a serious way, but this bill is not the right bill.

BURNETT: So, let me ask you about something specifically. I mean, you're talking about Wikipedia. And what it appears to be a fair point, right, that how are you supposed to police everything in a site that is created by millions and millions of people around the world?

But there's a Web site we found called Pirate Bay, really exists for the purpose of sharing content that it doesn't own, pirated content. They have a lot of popular shows available on that Pirate Bay. "Glee," "Deadliest Catch," "Lost," a whole lot of others.

Do you support sites like that or does that fall on that's a problem you think needs to be fixed?

WALES: Yes. For me, I think that site is a problem. And I think the right way to fix it is not to place censorship on the Internet, not force Google to stop listing them, not to force Wikipedia to stop talking about them.

The right answer is: follow the money. If you have large scale piracy going on, it's this same as any other trade dispute and I think that's the right approach.

BURNETT: So, for you, give me an example of how this would restrict free speech on something like Wikipedia, if this act passes.

WALES: Well, there's a lot of different versions in the act. In the worst versions of the bill, Wikipedia would be defined an as search engine and would not able to even link to something like the Pirate Bay, even in our encyclopedic description of what Pirate Bay is. I think that's a real problem. That raises really serious First Amendment issues.

BURNETT: So, Rupert Murdoch, obviously News Corp. And on the side of people who like this act because obviously they make a lot of content. But here's what he said. He was angry at President Obama for jumping on your side of this.

He said, quote, "So Obama has thrown in his lot with Silicon Valley paymasters who threaten all software creators with piracy, plain thievery."

Why is he so wrong?

WALES: Yes. It's such a ludicrous statement, I don't even know where to begin.

Certainly for Wikipedia, we're not anybody's paymasters. We're at charity devoted to sharing free knowledge. We're a community that's come together to build an encyclopedia and give it away for free to everyone. We have absolutely no positive interest in encouraging piracy or we have no way of profiting from piracy. It's just completely ludicrous.

BURNETT: All right. Well, Jimmy, thank you very much for taking the time. Appreciate it.

WALES: Yes, thank you for having me on. It's really great.


BURNETT: All right. And let us know what you think about SOPA. But don't try go to Wikipedia tomorrow. Some sites in Europe are already shutting down -- 25 million people a day go to Wikipedia.

All right. Well, thanks so much for watching. Sorry to pain you with singing. But that's what Will Surratt did to our show tonight.

"ANDERSON COOPER 360" starts right now.