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STARTING POINT WITH SOLEDAD O'BRIEN

Interview with Representative Tom Rooney of Florida; Severe Weather from Indiana to Arkansas; Convicts Back To Prison?; Severe Weather In The South?; White House in Settlement Negotiation with Large Banks: President to Give State of the Union Speech; Date Night Part 2; Newt Gingrich and Saul Alinsky

Aired January 23, 2012 - 08:00   ET

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


(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: And good morning and welcome to STARTING POINT. Our second hour begins right now.

Breaking news: some dangerous storms and tornado sightings to tell you about. Hard hit is Tuscaloosa, still rebuilding from that storm last April. And also Joplin in the path.

And already, thousands of people are without power. We'll update you on what's happening on the eye of that storm.

Plus, after stumbling in South Carolina, Mitt Romney is in attack mode in Florida. Listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: He was a leader for four years, as speaker of the House. And at the end of four years, it was proven that he was a failed leader. And he had to resign in disgrace.

(END VIDEO CLIP)

O'BRIEN: Yes, he's talking about his competitor, Newt Gingrich. We'll talk about that straight ahead.

Plus, Mississippi pardons issue is in court today. No more prisoners can be released. And the big question now, what exactly happens to those other pardoned prisoners? Will they head back to prison?

STARTING POINT begins right now.

(MUSIC)

O'BRIEN: Welcome back, everybody.

Our STARTING POINT this morning is Mitt Romney on the attack. You heard him just a moment ago, going after Newt Gingrich -- who also has finally said he is going to release tax returns. That's going to happen tomorrow. Listen.

(BEGIN VIDEO CLIP)

ROMNEY: This I think we just made a mistake in holding off as long as we did. This was a distraction.

(END VIDEO CLIP)

O'BRIEN: That a distraction.

Well, Newt Gingrich's supporters are firing back. We heard from a couple this morning tearing down Mitt Romney's record. We heard from Rick Tyler, who's a senior adviser for the Gingrich PAC earlier today on STARTING POINT.

Listen to what he said.

(BEGIN VIDEO CLIP)

RICK TYLER, SR. ADVISOR, GINGRICH'S "WINNING OUR FUTURE" PAC: Well, what we know about Mitt Romney is that he was a supporter of Roe v. Wade. He let judges overrule parents in terms of getting an abortion for their minor children. He did not -- he enforced the most restrict gun laws in the United States, in Massachusetts. He raised taxes on business and gave us Romneycare. That's his record.

He doesn't want to you know his record. He doesn't want you to know Newt's record.

(END VIDEO CLIP)

O'BRIEN: They are coming out fighting.

All right. Joining us this morning from Washington, D.C., is Representative Tom Rooney. He's the honorary co-chair of the Romney campaign Florida team.

And back here in our newsroom is the former Democratic Congressman Tom Perriello, who's helping us out on the panel. We also have political analyst Ron Bronstein. Will Cain is back with us. He's with "The Blaze." And CNN political analyst Roland Martin joins us.

Welcome, welcome, welcome.

Congressman Rooney, let's start with the numbers. Can you guys throw that up on the screen?

If you look at the results in South Carolina, here's how it went. Newt Gingrich at 40 percent, Mitt Romney at 28 percent --12- point gap.

What happened?

REP. TOM ROONEY (R), FLORIDA: Well, I think that, you know, there were a couple of really good debates. And certainly with the whole tax issue and releasing the tax returns, you know, when you're in these campaigns, as my friend there Tom know, you never really want to be dictated what to do by your opponent.

And so, I assume that Mitt Romney was planning on releasing his taxes when everybody else does in April, and all of a sudden, Gingrich latched onto this. There must be something in there that we need to know about in South Carolina, and if you don't release them, then everybody just has to assume the worst.

Well, he opened that can of worms and now we're going to play that same record in Florida. The Florida voters need to know who he represented as a lobbyist in Washington, D.C., for all those years after he was speaker. We want to know what issues that he was peddling on Capitol Hill, and we want to know all the clients' names.

O'BRIEN: In all fairness -- let me stop you, I'll stop you there for one second. In all fairness, it certainly wasn't just the former Speaker Newt Gingrich who was asking are if those tax returns. It was sort of a lot of people over a lot of time before finally we heard Mitt Romney say he was going to release them.

Here is what Jeb Bush said about what is happening in the campaign right now. Listen. Oh, there it is.

I have to read it to you because it's not hearing from him. It's what he said in print.

"Candidates are making lasting impressions on voters, not just primary voters, in how they campaign. We're sort of in the circular firing squad right now."

And anybody knows anything about firing squads knows that's a bad thing. How do you avoid the damage that comes with a circular firing squad? You just said we are teeing up to go after Newt Gingrich in a big way.

ROONEY: Well, you know, this is full contact sport at this point. The gloves are going to come off. We're not going to leave anything in the locker room in Florida.

Florida is too important to not make sure that your campaign is running on all cylinders or to get tripped up by something like releasing your tax forms. Which just to respond a little bit, rick Santorum hasn't released his. Ron Paul says he's not going to. And Newt just did last week.

O'BRIEN: But (INAUDIBLE) which I thought was very interesting, he said and I think it was on "Meet the Press," he said it wasn't even so much about the taxes. He didn't care about the taxes. What he said was it was about not being definitive, that the drip, drip, drip started making people question, versus just saying -- I mean, we heard from Santorum in the debate. He said when I stop traveling, I'm going to release them. We heard from Ron Paul basically said, my taxes have no --

(CROSSTALK)

O'BRIEN: It sounds like he was on his computer still. So, really what he said is the issue is about being definitive, which is really about a style of campaigning, I suppose, right?

ROONEY: Yes. You know, last week, as Chris Christie said, wasn't a good week. And so, you know, we're getting that behind us tomorrow. And we're going to -- he's going to release his records. And we would have liked to have seen something more definitive like, yes, sure.

But what happens, as in any campaign as you know, you don't want your opponent to sort of dictate what you're doing. And I think that that's what happened.

But I assure you that the Romney campaign will not be doing that anymore.

WILL CAIN, CNN CONTRIBUTOR: Congressman, I think you might have just answered my question. But you got a fundamental problem here. Newt Gingrich just won the week after attacking Mitt Romney for Bain Capital, essentially attacking him for capital and over his tax records.

Your problem isn't substance. Your problem is personality. Mitt Romney has to fight. It seems to me you just answered that your antidote to that is Chris Christie. Am I right?

ROONEY: No. I think that Chris Christie was just on the Sunday shows yesterday, and he basically said that, you know, as a commentary, last week wasn't a great week for the campaign. And I think that he was right. But I think that we learned from South Carolina -- South Carolina isn't the end of the election. I kind of like to think that Florida has more to do with who the eventual nominee is going to be than South Carolina.

O'BRIEN: Let's talk about Florida -- let's talk about Florida for a second. Florida is bigger, more diverse, 22 percent Hispanic population. Mitt Romney has said if the DREAM Act comes to his desk, he would veto it, especially in the United States.

Is that going to be a problem? Because again, another thing that Jeb Bush said was that candidates need to adjust their tune on immigration in the state of Florida. Is this a big problem?

ROONEY: Well, it certainly is more of an issue than I think in any of the other states that we have gone through so far. But, you know, these candidates have to go with what they believe in. And certainly it came before the House, as Tom knows, and it went through the House but didn't go through the Senate.

I think that if that's where they are, that's where they are. Certainly, Jeb Bush, who lives in Miami, might have a different opinion. But, you know, as far as I've heard from the candidates on the DREAM Act, I doubt that they are going to change just because they are getting to Florida. To get the Hispanic vote in the bigger picture, you know, maybe that's a discussion for later on down the road.

But I don't think you're going to see them change their stance on that.

O'BRIEN: On that front, he has been very definitive. So, it will be interesting to see if that's something he's going to back away from that in the future, if he decided to.

Representative Tom Rooney is joining us this morning. Thanks for your time. We appreciate it.

ROONEY: Thank you.

O'BRIEN: Other headlines making news, Christine Romans has that.

Hey, Christine. Good morning again.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning, Soledad.

We start with headlines and dangerous severe weather to tell you about. Reports of tornadoes and damage in several states this morning. Thousands of people waking up without power, and the threat now ranges from Illinois all the way down to Alabama.

Meteorologist Rob Marciano is tracking the storms for us.

Good morning, Rob.

ROB MARCIANO, AMS METEOROLOGIST: Good morning, Christine.

Damage especially just north of Birmingham, damage widespread in some areas, injuries, potentially fatalities -- trying to get confirmation of that. This is a storm that rolled through just north of Tuscaloosa as well. No injuries there, but damage as the storm rolled across the state. It has weakened, but there are other tornado warnings that are posted right now. There you can see some of the video coming in to the CNN newsroom as the sun comes up.

And some subdivisions especially north of Birmingham, near Center Point, Pleasantville, multiple homes if not entire subdivisions wiped out from this storm.

Right now, a tornado warning is in effect just south of Clanton, heading towards Alexander City. This has an indication of tornado within the circulation. But these storms for the most part once they get to the Georgia border are weakening, much cooler, more stable air here.

Up to the north, this is a big storm. This is the same storm system that came onboard across the Pacific Northwest bringing that wind and rain. So, it's got a lot of moisture with it. It's heading into the Ohio River Valley. Eventually into the Northeast, where there are some cool pockets of air up here.

For the next hour or two, some spots especially north of New York City will be slick in the way of freezing rain, but then temperatures will warm up.

So, just be aware of that. There's your storm out west. Another one coming into San Francisco with rain and heavy mountain snow -- Christine.

ROMANS: All right. Thank you, Rob.

And in Italy, the man in charge of the operation, the rescue operation on the Costa Concordia, weighing this morning the decision when to stop searching and start offloading thousands of tons of oil from that wrecked cruise liner. The mayor of the island where the ship ran aground describes the situation as an ecological time bomb because the ship could slip into deeper waters. Thirteen people are known dead, 19 are still unaccounted for.

A suspected U.S. drone attack in Pakistan killed at least four suspected militants. Pakistan intelligence officials say that drone fired two missiles at a vehicle in the tribal region near the border with Afghanistan. It's the third drone attack in Pakistan already this year.

Tensions, of course, between the U.S. and Pakistan were heightened back in November after that deadly attack by NATO mistakenly killed 24 Pakistani soldiers.

Mitt Romney bowing to pressure from his campaign rivals, finally agreeing to release his 2010 tax returns tomorrow. Romney said the issue had become a distraction.

A real dust-up in Texas -- a dust-up that had nothing to do with politics and everything to do with Mother Nature. Powerful winds whipped up dust and dirt during a dust storm in Lubbock, Texas. The winds were so powerful they uprooted some trees.

And the NFL's Final Four is a tale of two field goals. One that was good, the New York Giants' Lawrence Tynes, connecting in overtime to beat the San Francisco 49ers 20-17. And one that was not. The Ravens' Billy Cundiff missing in the game's final seconds, giving the New England Patriots the 23-20 victory.

The Giants and Patriot will meet in a Super Bowl rematch on February 5th in Indianapolis.

All right. Minding your business right now. A busy week ahead -- corporate earnings, Greece's debt talks, the Fed meeting, housing data, the latest read on gross domestic products -- all of that coming at us this week. Right now, U.S. stock futures are trading higher ahead of the opening bell. You know, markets gained about 2 percent last week.

Also, we are watching oil this morning. Sweet crude prices are up $1. European Union foreign members are meeting in Brussels today to talk about putting more pressure on Iran by banning oil exports from there -- Soledad.

O'BRIEN: All right. Christine Romans for us -- thank you, Christine.

Still ahead this morning: a hearing on those Mississippi pardons. We're going to find out if some of those prisoners who were released will be heading back to prison.

Plus, President Obama trying to take the lead when it comes to the economy. So what will he say during tomorrow's State of the Union Address? What should he say? We'll examine that.

And speaking of State of the Union, date night again. Remember that? Members on both sides.

UNIDENTIFIED MALE: No, no, no.

ROLAND MARTIN, CNN POLITICAL ANALYST: I'm not going with you, Will.

(CROSSTALK)

O'BRIEN: Stop. Yes. Our happy couple right here, Will Cain and Roland Martin will be attending the State of the Union together.

Did anything happen from that last time around? Will anything come from it this time around? We're going to talk this morning to Senator Mark Udall and Senator Rob Portman just ahead.

BROWSTEIN: No one was caned on the Senate floor.

O'BRIEN: And that's your bar.

(CROSSTALK)

O'BRIEN: That's the standard?

MARTIN: And they should have been.

O'BRIEN: That's the standard.

UNIDENTIFIED MALE: Going back to the Civil War.

(CROSSTALK)

O'BRIEN: That's just sad. That's just sad.

We're going to take a break. We're back on the other side with more STARTING POINT.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to STARTING POINT, everybody. Today, a court is going to review those controversial pardons that were made by the outgoing Mississippi governor, Haley Barbour. Several of those released were convicted murderers.

In fact, there they are. They worked in the governor's mansion as part of a special trustee program for convicts. Haley Barbour was on CBS's "Face the Nation" yesterday and justified those pardons. Listen.

(BEGIN VIDEO CLIP)

GOV. HALEY BARBOUR, (R) MISSISSIPPI: Direct 26 out of penitentiary. As you mentioned, half of them for health reasons. A 189 people have been out, most of them out for years and years and years. They're no more threat to the people of Mississippi than they were the week before they got their pardon.

(END VIDEO CLIP)

O'BRIEN: Ed Lavandera is live for us in Jackson, Mississippi. It's interesting, Ed. He talks about that 189 people, but really, a lot of people are not focused on those 189, many who have been out for years. It's the convicted murderers that have been the focus and the controversial part of this release, right?

ED LAVANDERA, CNN CORRESPONDENT: Oh, there's no question, Soledad. Four of those convicted murderers worked in the governor's grounds in the trustee program, which has since been done away with the current governor of Mississippi. Those four murderers have been told they need to present themselves here today at this court hearing later on this afternoon. They expect to see three of those.

The attorney general here in Mississippi says that one of them, a guy by the name of Joseph Osmeant (ph), is they believe to be on the run. They're not getting much help from his family. So, they don't expect him to show up here today.

And what exactly the attorney general of Mississippi who is the lone Democrat here in this state, political opponent of the former Republican governor Haley Barbour, and what he is going to hang his hat on here is that these pardons were not properly notified throughout the state.

He says that according to the Mississippi's constitution, that these pardons must be announced for 30 days leading up to the pardon, and the attorney general here in Mississippi says that specifically in the case of these four murderers, they were only done for 28 days. So, he's saying that because of that, these pardons should be null and voided and those murderers should be sent back to prison.

(BEGIN VIDEO CLIP)

JIM HOOD, MISSISSIPPI ATTORNEY GENERAL: There's no law there. We have never had a situation in Mississippi or any other states that I can find yet that provides us with guidance as to how you put out a kind of warrant for someone who got some papers that on his face any case that they're a free man.

(END VIDEO CLIP) O'BRIEN: And it sounds like three of them might actually be remanded back into the court -- back into prison. Maybe. But the fourth is now on the run. What do you know about that guy?

LAVANDERA: Well, that's one that the attorney general's office says they've been trying to get in touch with his family, trying to get help from his family. They believe that he knows everything that is going on, but they have no idea where he is at this point. And what this judge can and will do is very much up in the air. Is this judge going to send back these prisoners, put them back in jail?

There's 168 people that the attorney general here in Mississippi says did not provide sufficient notice leading up to these pardons. So, what will happen with these dozens and dozens of cases is still very much up in the air.

TED ROWLANDS, CNN CORRESPONDENT: Ted Rowlands here, are we seeing Mississippi lawmakers already propose laws to actually clarify this and actually change this kind of procedure or even take away the ability of a governor to pardon folks and lead up to a parole board?

LAVANDERA: You know, Roland, there's all sorts of talk here in Mississippi about trying to limit the governor's ability to do this in the future or have some sort of say in how these pardons are doled out. It's not only happening here in Mississippi, but it's spread throughout the country as well.

A lawmaker in Oklahoma has been trying to do the same thing as well. So, the anger and the frustration with the way these pardons were handled here in Mississippi, you get the sense it's really starting to spread throughout the country.

O'BRIEN: Right. Ed Lavandera for us. Thank you for the update, Ed. We're going to keep watching that story. It's really fascinating what's happening there.

Still ahead on STARTING POINT this morning, there are now two people confirmed dead in those dangerous storms that we've been talking about in Tuscaloosa, Alabama, and that storm system is not done yet. We'll update you on what's happening there straight ahead. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

O'BRIEN: Welcome back, everybody. Breaking news this morning to tell you about. Severe weather that we've been talking about in the south has turned deadly. Two fatalities are now confirmed in Jefferson County, Alabama. There is high wind damage in some other areas. We've got David Hartin on the phone. He's with the Tuscaloosa Emergency Management joining us now.

Thanks for being with us. I know you're really, really swamped. So, first, tell me a little bit about Tuscaloosa. Any fatalities to report? What kind of damage DAVID HARTIN, TUSCALOOSA EMERGENCY MANAGEMENT (on the phone): We are not aware of any injuries whatsoever in Tuscaloosa County. We had three reports of some minor structural damage. The vast majority of the damage reports we've had are trees blown down and a few power lines down.

And that's basically in areas north of the city of and cities of north port off highway 171 in the area of Patton Road, upper Columbus Road, and such as that.

O'BRIEN: All right. So, we're looking at pictures that I believe are coming to us from Jefferson County, Alabama, and the damage is much more severe than you're experiencing in Tuscaloosa County, because we've seen homes that are completely collapsed and debris just across roadways.

What are you hearing about what's happening there and what kind of concerns you have for these storms that keep coming at you?

HARTIN: The storms that went through Jefferson County, actually, came through Northern Tuscaloosa County. We had a tornado warning as it entered Tuscaloosa from Pickens. And then, we had an extension of that as it went from East Tuscaloosa into Jefferson.

So, you know, we can't overemphasize enough particular storms that come through this time of morning that people need a way of being alerted to that, an all hazard radio, so that when something comes through in the hours of the morning when you normally are not up you have that ability to be awakened and go to your safe place.

O'BRIEN: You know, I was in Tuscaloosa not very long ago, and you could still see the damage from last April's storm that really didn't look like they made a lot of headway. I guess, the cleanup had been done, but the rebuilding had not been done. What's the status of that, and are you worried that these new storms are going to push all of that back?

HARTIN: I don't see why we'd push that back. There is a lot of building going o. A lot of citizens have obtained permits to start rebuilding. It takes time to get architectural drawings and other things. So, I think, if you were here now and went down through some of these neighborhoods, you would see a lot of new homes. A lot of new businesses.

O'BRIEN: That's good to heart. David Hartin us with the Tuscaloosa Emergency Management. Thanks for being with us. We appreciate your time this morning.

Let's get right to Rob Marciano because he's tracking the storm. So, Rob, how does it look for those folks? It sounds like at least in Tuscaloosa, they've been able to avoid some of the damage, maybe not so much in Jefferson County.

ROB MARCIANO, AMS METEOROLOGIST: That's right. And he's right in that it was the same cell. Extreme northern parts of Tuscaloosa County moved to the east rapidly this morning. The storms move very quickly this time of year, and hit hard just north of Birmingham and through clay in the center point or the Paradise Valley Area.

Those are the communities that we're now beginning to see as the sun comes up severe damage, and in some cases, the complete subdivisions seeing substantial damage if not wiped out. Two fatalities, I can mention, both of those just north of Birmingham. The storms have moved to the east. We'll show you those.

There is still one tornado warning out for east central Alabama right now, and the threat will continue for the next couple of hours with this tornado watch where you see Birmingham, Tuscaloosa, even Aniston. Those storms have moved down to the south and east. And as they enter into Georgia, this is cooler, more stable air here.

So, the storms for the most part are weakening, but still some strong storms in eastern parts of Alabama, North Birmingham the hardest hit. Search and rescue operations underway as we speak.

O'BRIEN: Rob Marciano with that update. All right. Rob, thank you very much.

Still ahead this morning, President Obama is trying to get out in front of this economic debate. He's pitching his blueprint with economy as tomorrow "State of the Union" address. What's he going to say?

Plus, remember back when it was date night in Congress? Well, Republicans and Democrats once again are pairing up for the "State of the Union" address as couples. How's that going to go?

Plus, Warren Buffett sings a tune. I'll tell you what that means straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: You're a brave man, Roland, if you can dance to this music in the morning.

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: No, I'm directing. My days in the band.

O'BRIEN: Clearly. Welcome back, everybody. You're watching STARTING POINT. Let's get right to the headlines with CNN's Christine Romans. Good morning, Christine.

ROMANS: Good morning there, Soledad. Syria rejecting an Arab League proposal to end the 10-month-old uprising that's reportedly claimed thousands of lives. The plan calls President Bashar al Assad to turn over power to his vice president and establish a new unity government within two months. Syrian officials, though, they say they consider it a violation of its sovereignty and a flagrant interference in Syria's internal affairs.

Egypt's parliament meeting today for the first time since former president Hosni Mubarak was ousted last year. Lawmakers are expected to vote on a new speaker of the House and two deputies. The jailed founder of the file sharing site Megaupload appearing in court in New Zealand this morning asking for bail. The U.S. government is trying to extradite company officials on criminal charges. The site was shut down last week. U.S. authorities claim it was part of a $175 copyright infringement scheme.

"Minding Your Business" this morning, a lot going on this week. The health of the U.S. economy in focus with new reports on housing, growth of the overall economy, corporate earnings, the Federal Reserve's meeting on interest rates too, all happening this week. Check on the markets right now, U.S. stocks are up. The markets gained about two percent last week.

On the 39th anniversary much the roe versus wade division, Republican Presidential candidate Rick Santorum wants to make one thing perfectly clear -- he's the real anti-abortion candidate. In a "Wall Street Journal" editorial today, Santorum says, quote, "My opponents whisper they are pro-life, but I fight the battle in the trenches and will continue to do so until every innocent human life in this country is protected."

"30 Rock" star Tracy Morgan reportedly collapsed last night during an event at the Sundance festival in Utah and had to be rushed to the hospital. A spokesman for Morgan says Tracy was suffering from a combination of exhaustion and altitude.

It's the first day of the Chinese new year. Guess who is celebrating the year of the dragon? Warren Buffett.

(BEGIN VIDEO CLIP)

(SINGING)

(END VIDEO CLIP)

ROMANS: He is not just working on the railroad, he owns a big railroad. The billion is strumming and singing "I've been working on the railroad," part of an annual new year's gala on China's state-run TV. Hundreds of millions of people saw the "Oracle of Omaha" and his little performance.

O'BRIEN: I look at that, and I just think, it's good to be rich. You've got a ukulele. You can see what you want and upload it to YouTube and wear whatever you want. It is good to be rich.

RON BROWNSTEIN, CNN POLITICAL CONTRIBUTOR: I want to hear the rest of that story. China state-run TV?

MARTIN: Dude probably owns it.

O'BRIEN: I want to talk about the state of the union. Tomorrow of course the president will be addressing the country with the State of the Union address and lay out some big economic plans. The president says we have learned they are going to focus on the middle class, on the haves versus the have-nots. He also says it's the government's job to make sure there's a healthy balance between the haves and have-nots. And that's a stack contrast from the Republicans' free enterprise ideals, right, Will Cain?

WILL CAIN, CNN CONTRIBUTOR: That's right.

O'BRIEN: The president gave a preview of tomorrow's speech over the weekend. Here's what he said.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can go in two directions. One is towards less opportunity and less fairness, or we can fight for where I think we need to go -- building an economy that works for everyone, not just the wealthy few. On Tuesday night I'm going to talk about how we'll get there. I'm going to lay out a blueprint for an economy that's built to last.

(END VIDEO CLIP)

O'BRIEN: A part of fixing the economy of course is taking a look at the banks. There's a $25 billion settlement with five banks. This morning we are joined by Simon Johnson, a former chief economist at IMF. We're going to bring Christine Romans back in, who is our business guru as well.

Mr. Johnson, thanks for being with us. Let's talk about this settlement with the five banks. I want to first throw up the list of the banks involved. Bank of America, JP Morgan Chase, Wells Fargo, Citibank, and Allied Financial. The talks have been going on for more than a year. What do you think is the likely outcome here?

SIMON JOHNSON, FORMER CHIEF ECONOMIST, IMF: Well, I think the meeting this week in Chicago, meeting today, will yield very little. But there does seem to be a move on the part of the Obama administration towards the position that's been taken by key attorney generals, including most prominently Eric Schneiderman of New York, towards wanting a full investigation and a much more comprehensive settlement for everything that the banks are alleged to have done wrong.

O'BRIEN: This is something you have been arguing for. You say that there's got to be an investigation, and also more funding for those who need it more, people whose mortgage principle is underwater. Why those two parts? In any case, it's not clear that's going to happen.

JOHNSON: Well, first and most important principle is that we should investigate. We should find out who broke the law, and to what extent they caused actual real damage, for example, to people who bought homes with mortgages sold under false pretenses were handled badly, and of course to investors who bought securities about which there were some misrepresentation.

If we don't know the facts, we don't have a full investigation, how can we determine whether the $20 billion or $50 billion or $200 billion is an appropriate settlement? And with regard to principle reductions, that comes down the road. Once you have established who broke the law and on what basis, then you can talk about sensible ways to structure a potential settlement or perhaps you go to court. Perhaps the banks would rather it go to court. That's fine with me. But if they want to do a settlement, it makes sense to structure that with principle reductions for homeowners who were damaged by the actions of banks if that is what you establish.

O'BRIEN: Ok. So there are states like California, New York, I think Delaware, Nevada, Massachusetts, who don't want the settlement to be able to preclude any kind of civil action that could follow. Do you think that's likely?

JOHNSON: Yes. I think the latest signs are that the discussions this week which are pretty much focused around the so-called "robo- signing" scandal, that they will be limited to that and there will not be any broader, more blanket type immunity extended to the banks. The Obama administration was leaning on the side of a blanket immunity. That was a bad idea, terrible legal strategy, awful economics, really not a sensible policy at all.

Under the pressure from the attorney generals but also Occupy Wall Street and all the grassroots activists on this and all the people that the president wants to vote for him in November have been pointing out this is just not a sensible strategy. I think the administration has shifted away from that, and that is a very positive development.

O'BRIEN: But there is definitely a case of history repeating itself. Christine, I want to bring you in on this. It was back in 2008, I think it was bank of America, right, for the countrywide loans.

ROMANS: Yes.

O'BRIEN: I think we have a graphic up here of what happened. The bank of America raised interest rates, didn't modify the loans and foreclosed while some of the modification requests were still pending. So what's different this time around?

ROMANS: And that's according to the Nevada attorney general, who has said they want out of their deal they did back in 2008. They actually did it in 2009. They said, look, you had all of these promises made, people who were in the midst of loan modifications who were foreclosed on, people who didn't get enough time.

And there are concerns overall that in this new deal, for example, what would banks say that they were doing as part of this settlement that they should have or were in the process of doing anyway?

And to the point of writing down the principle, I mean that's the thing that gets housing advocates -- starts to get them excited. If you have a million people and you are writing down the principle, that's something that people can get their heads around.

But they are suspicious of the banks. They are worried about how slow it has been to find the silver bullet for the housing industry. In fact, there isn't a silver bullet. It would have been fired. How many programs have we seen that haven't worked?

So excitement tempered by a lot of caution all at the same time. But if it's done right, some are saying, Soledad, it could mark the bottom of the subprime mess, if done properly.

O'BRIEN: I'm going to ask you a mortgage question in a second, Christine. But first, thank you to Simon Johnson, the former chief economist at IMF. Thank you for updating us on this litigation here. We appreciate it.

Christine, for you, mortgages. We know they are at record lows, but not everybody is taking advantage. Why not?

ROMANS: You look at these refinancing rates. A 30-year fixed rate, 3.88 percent. A 15-year fixed is a really popular refinancing instrument right now. It's 3.17 percent. You're talking about hundreds of dollars a month that people could be saving in their budgets because of refinancing. And that should be a good thing for the economy.

But so many people are underwater. They can't do it. People are saying that they can't get through on the phone to their banks to get it done. My advice is it takes hours and hours and hours. But if you are not underwater on your loan, this is probably the smartest personal finance decision you can make in 2012 is getting hold of these very low mortgage rates. Not everybody can do it.

And that's the problem with fixing the housing mess in general. There are people who want these lower financing rates but they can't get them because they are so messed up on the bad mortgage they got in the first place.

O'BRIEN: Christine Romans, thank you.

Straight ahead this morning, the Senate is back to work today with record low approval ratings for Congress. So what are lawmakers planning to do differently? You're watching STARTING POINT. We're back right after this short break.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. On Tuesday night President Obama is going to give the state of the union address. It is also date night near Congress, Democrats and Republicans crossing the aisles, so to speak, sitting together as a show of bipartisan. But is it real?

Colorado Democratic Senator Mark Udall joins us this morning, Ohio Republican Senator Rob Portman joins us as well. Gentlemen it's nice to see you. I have to tell you Roland Martin and Will Cain are also trying to have a little bipartisanship next to me. Yes, that's pretty much what it's like.

ROLAND MARTIN, CNN COTRIBUTOR: There you go. There you go.

O'BRIEN: Please gentlemen, I'm trying to have a conversation here. Nice to see you, let's begin with you, Senator Udall.

SEN. MARK UDALL (D), COLORADO: Sure.

O'BRIEN: In fact, does this work? If you look at the space between the last time you've done it and now, the next time you're going to do it, it really hasn't gone that well. Why do the date night? Are you guys dating night tonight? I mean, Tuesday night?

UDALL: Soledad -- Soledad, hey, good morning, Rob. Happy New Year to Senator Portman. Look, just because last year was a tough political year, and it was, doesn't mean we don't keep trying. We are part of a big family, the American family. The State of the Union is a serious evening. We should treat the speech seriously.

And I think particularly in the context of the terrible shooting last year that occurred in Tucson, to honor and support the way in which Gabrielle Giffords works in the Congress. I think we've got to keep at it.

The feeling I have is that it does make a difference. Over time, you get to know the people that you work with. It's hard to demonize a fellow legislator if you know something about his or her background and their family and so on.

So we've to keep at this. I think in the spirit of Tipp O'Neill and Ronald Reagan as well, who fought bitterly during the day but then 6:00 came around and they sat down and had a drink, got to know each other.

O'BRIEN: Well, let me play a little bit of what Gabrielle Giffords -- Congresswoman Giffords said as she also told folks that she was going to be leaving her position. Here's what she said.

(BEGIN VIDEO CLIP)

REP. GABRIELLE GIFFORDS (D), ARIZONA: But I know on the issues we fought for, we can change things for the better. We can do so much more by working together.

(END VIDEO CLIP)

O'BRIEN: Senator Portman, when I look back at the last year, in all seriousness, you have to wonder if what she is proposing is based in reality. It was a very tough year, a very bitterly divided Congress, frankly. How can you get to her vision realistically?

SEN. ROB PORTMAN (R), OHIO: Well, I think it takes both sides realizing that we have huge problems facing our country, and they have to be addressed not as Republicans or Democrats but as Americans. And frankly, we need a little help from the White House.

You know, we'll see what the President says on Tuesday night. But I hope he goes back to his theme in his campaign a few years ago when he talked about bringing people together to solve problems. What I'm hearing about is it will be more about not just dividing himself from Congress and talking about how Congress can't get stuff done, which doesn't help, because we have to work together, but also talking about dividing Americans.

And you know, we have to figure out how to pull together. Unify folks around common problems. We've got the biggest deficit and debt in our history. We've got an economy that continues to sputter along. And not creating the jobs that any of us want to see. It's the weakest recovery we've had since the Great Depression.

So we've got -- we've got big problems, and we have to come together and resolve them. I am taking a date. I am going with Gene Shaheen from New Hampshire. More important than going to the State of the Union together as doing stuff together and we have introduced legislation together on energy efficiency. Mark is the guy I have worked with a lot on different legislative initiatives.

And you know it's time for us -- look, I'm a conservative, I'm proud of that, but I also feel like we need to focus on results. And we can and should.

BROWNSTEIN: Senator Udall, Senator Portman, Ron Brownstein of the National Journal can I ask real quick, can you each identify two or three significant things that you think Congress might actually work -- be able to work together on a bipartisan basis around this year?

UDALL: Hey Ron, Mark Udall here. Let me just add too that Lamar Alexander, Senator Alexander from Tennessee put it well. He said look, the goal isn't bipartisanship. The goal is results. But I do believe we -- you can have too much partisanship, you can never have enough bipartisanship.

A couple of areas I think we've got to continue to focus on. We need a Simpson Bowles grand bargain that combines the cuts in federal spending with fixes to Medicare and Social Security, plus tax reform.

We ought to put in place an infrastructure bill. There are some good news this week about the FAA the Federal Aviation Administration being authorized permanently.

And then we ought to finally look at an overall Comprehensive National Energy Policy. There are some things we can do this year that will help us be more energy self-reliant. And by the way, those create jobs and strengthen our country.

I sit on the Armed Services Committee, as does Rob. And we need to do more on the energy front to give us more geopolitical flexibility. Just think if we had our own oil supplies and our own liquid fuel situation was strong, we wouldn't have to be in this situation where Iran holds a sword over the rest of the world because it has oil.

O'BRIEN: Senator Udall, and Senator Portman, I thank you for joining us this morning on STARTING POINT. We appreciate your time.

Still ahead, Saul Alinsky. Who is that? Former Speaker Gingrich keeps bringing up his name. "The Reveal" is up next. You're watching STARTING POINT. We're back right after the short break.

(COMMERCIAL BREAK)

MARTIN: I got 6,000 songs. That isn't one of them.

O'BRIEN: John Mellencamp.

MARTIN: John Mellencamp.

O'BRIEN: No, even I knew that. Even I knew that.

MARTIN: I'm going to the Midwest.

O'BRIEN: Yes, we are.

MARTIN: I've got small town. I got a couple of others. But that one isn't it.

O'BRIEN: Yes we are. It is time for "The Reveal" this morning, and we are taking a look at Newt Gingrich and a name that he keeps mentioning over and over in speeches and interviews. The name is Saul Alinsky. Listen.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: The centerpiece of this campaign I believe is American exceptionalism versus the radicalism of Saul Alinsky. I could debate Obama head-to-head, that I could convey conservative values, and that I could in an articulate way explain what American exceptionalism was all about, and why the values that he believes in, the Saul Alinsky radicalism that is at the heart of Obama.

I am going to represent the Declaration of Independence, the Constitution, the federalist papers, and the great heroes of American history. He will represent Saul Alinsky, European socialism, secular radicalism, and all the ideas he got at Harvard and Columbia.

(END VIDEO CLIP)

O'BRIEN: Ok first of all, nothing wrong with getting ideas at Harvard and Columbia by the way. But also people listening are like, "Huh, who is Saul Alinsky?" Well, the Speaker mentions Saul Alinsky often especially when he is talking about President Obama and what Speaker Gingrich believes to be his radical liberal beliefs.

So we wanted to ask, who's Saul Alinsky? He's a guy who was born in Chicago in 1909. He was a community organizer, just like a young Barack Obama in Chicago as well. Spent his life helping minorities in poor neighborhoods exert their political force by organizing them to get to the polls.

But Alinsky is probably best known for a book that he wrote which is called "Rules for Radicals." And he is referring to Machiavelli's "The Prince" that he wrote this, "The Prince was written by Machiavelli for the haves to hold power." "Rules for Radicals", his book is written for the have-nots on how to take it away.

President Obama has never said that he was influenced by Alinsky. In fact, he was 10 years old when Alinsky passed away. And in doing our research, we found this. Alinsky's organizational tactics haven't only influenced Democrats. In fact, his practices have been linked to some conservatives and his tactics have been used with great success by the Tea Party.

Former House Republican Majority Leader Dick Armey admits he has been influenced by Alinsky saying, quote, "What I think of Alinsky is that he is very good at what he did, but what he did was not good." And in an interview with "The Financial Times, the head of Freedom Works which is aligned with the Tea Party said regarding Alinsky's work, "We don't organize people to turn up at these town hall meetings, but we tell them about the meetings and we suggest good questions they could ask.

Sounds like something Alinsky might do.

The problem, perhaps, that Newt Gingrich has with Alinsky and the reason he is trying to link him to President Obama wasn't really Alinsky's organizational skills but the book outlining how the have- nots could take power from the haves. So we will be sure to ask the former speaker that next time we get a chance to talk to him about that.

Straight ahead this morning -- our "End Point". Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Tom, you get to begin our "End Point Segment". Wrap it all up. You can go your own way -- go ahead.

TOM PERRIELLO, FORMER DEMOCRATIC CONGRESSMAN: Well, I think right now you have Republicans fighting over which one of them is worse for the country while the President is putting out a positive vision for the middle class. I think the question is going to be whether Congress takes that challenge and focuses on fixing the economy or focuses on campaigning.

O'BRIEN: Very well spun from our Democrat on the table here. Go ahead.

BROWNSTEIN: We had some dispute before about whether Newt Gingrich jumped or was pushed when he stepped down as Speaker in 1998. I want to bring in an expert witness. On the night he stepped, Newt Gingrich held a conference call with other Republicans and said, "A handful of members have blackmailed the conference. They are hateful. They are cannibals."

You decide. Was that jumped or did he jump or was he pushed?

MARTIN: He was inched.

BROWNSTEIN: He was inched. CAIN: If we're going to pick a candidate based upon these words, I think we need to define them. What does it mean to be a moderate? What does it mean to be establishment? And we can push this up -- prospect of defining things.

Tom and I can define what it means to be centrist, what it means to be free markets. Or Tom is going to wrestle me into the break.

O'BRIEN: A lot of anger on this panel this morning. Roland Martin, you get the final word, which is terrifying for me to say.

MARTIN: Oh, it's ok. "National Journal" debate tonight. Just do me one favor.

BROWNSTEIN: Yes.

MARTIN: Do not let them lie. Kill the spin. And if they start lying, stop them and say we're not going to have the lies to the American people.

BROWNSTEIN: We do it for pay.

MARTIN: Thank you.

O'BRIEN: That is our "End Point" this morning.

Let's get right to Kyra Phillips.

I'll see you back here for STARTING POINT tomorrow morning everybody.

Hi Kyra.