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EARLY START WITH ASHLEIGH BANFIELD AND ZORAIDA SAMBOLIN

Romney To Release Tax Returns; Gingrich Pulls Even With Romney; Romney On The Offensive, Alabama Battered By Storm; Arkansas Democrat's Cat Killed; Interview with Dick Armey; Romney's Taxes; U.S.-Iran Tensions Rising

Aired January 24, 2012 - 06:00   ET

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


(COMMERCIAL BREAK)

ASHLEIGH BANFIELD, CNN ANCHOR: It is good to have you all here with us. Good morning, everyone. It's EARLY START. I'm Ashleigh Banfield.

ZORAIDA SAMBOLIN, CNN ANCHOR: Every time you use the you all.

BANFIELD: This girl's from Texas.

SAMBOLIN: I'm Zoraida Sambolin. We are bringing you the news from A to Z. It is 6 a.m. in the east so let's get started.

BANFIELD: Nothing gets your blood flowing like good tax returns. Not yours, Romney's. Everybody has been waiting to find out what this guy makes.

We all know he's wealthy, but EARLY START can tell you with this early look, he's loaded. Here's what's more important, it's not what he makes, but what he paid in taxes and, also, what Gingrich and Obama pay in taxes, too. We got all of it for you.

SAMBOLIN: And did you watch the Florida debate? It got really personal. Are we seeing a new Romney? He's going after Gingrich with the gloves off now.

BANFIELD: And the president is hard at work today going over and over making changes, practicing the third "State of the Union" address tonight. Are you thinking, wait a minute, three? This would be four.

It would be if his first one was the "State of the Union," and it wasn't. It was an address to Congress. We're going to preview what this message is going to be tonight, is it going to be a campaign message or a true blueprint for the economy as we hear that is built to last.

SAMBOLIN: And yesterday this was breaking news. Alabama battered by three tornadoes. We have the pictures. Two people are dead. Hundreds of homes have been destroyed. They are still recovering from the twisters in last April. A lot of people died then.

BANFIELD: Let's switch gears and talk money, shall we? Because it's the big headline today and it's going to continue to be a big headline today with Mitt Romney's taxes scheduled to be released in a couple of hours.

But you know something. We already got a sneak peek because "The Washington Post" got some details that gave us some serious, serious dough. It's not only coming in but also going out.

SAMBOLIN: So they are reporting that he made $21.6 million in 2010. He paid just over $3 million in taxes, the effective tax rate there, 13.9 percent.

BANFIELD: That stuck in my craw, but I get it. I do understand.

SAMBOLIN: See, it's kind of an education, really.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: On taxes. Usually we think about taxes, man, I've got to get my forms together, but this is a different kind of tax chart.

BANFIELD: No, I actually don't think that. I think that 30 percent. That's what I think when I think taxes, 30 percent.

ROMANS: But, you know, when you look at IRS data, you know, we pay tax rates all over the map. There are some middle class earners who also are paying more like 15 percent, 13 percent, even single digits if you have mortgage deduction, if you have a couple of kids.

So look, the tax code is very big and it's very complicated. There's nothing simple about taxes. There's nothing simple really about Mitt Romney's tax returns either. It's 550 pages over two years including three blind family trusts and other some stuff in there.

So let's dive into what we've got here. We know we had a tax bill of something like $6 million over the past couple of years. Let's look at just at 2010 because 2011 income, he's pretty much, I guess, estimated that, but 2010 we know for sure.

It's $12 million in capital gains, about $5 million in ordinary dividends, $3.3 million in taxable interest. Why is this interesting because he's making most of this, according to the campaign, from a blind trust?

Meaning he's paying a 15 percent tax rate on all of that income. Not like you or I who are paying a higher tax rate on our work. In this economy, in this tax code that we live under, we pay a higher rate for our work than we do for making money with money.

That's how rich people like Mitt Romney make an awful lot of money. I want to look really quickly, a couple things here. We've got profit dividends. Interest from investments that's the campaign says most of his income, $7 million in charitable contributions over a couple of years. A lot of that is to the Mormon Church.

SAMBOLIN: Tithing. ROMANS: You get $42 million in earnings over two years. He gave $7 million to charity. We also find from this, he did have a Swiss bank account, also an account in the Cayman Islands.

That Swiss bank account according to Reuters who got a sneak peak of all this, that Swiss bank account was closed because an advisers told Reuters they realized at some point it could be politically a liability. They also stressed, according to Reuters, that none of this was used to evade taxes.

BANFIELD: He can't.

ROMANS: This was a big, you know, he's very rich, got an awful lot of vehicles and the blind trust in particular, they're blind. He doesn't manage those.

BANFIELD: You go to pay the rates here even if you put your money overseas. That's the law.

ROMANS: That Swiss bank account is closed. Apparently, there are some investments in the Cayman Islands and the Bermudas as well. But at 8:30, we're going to get a real good look at all of this so --

BANFIELD: I can't wait for you to go ever all 150 pages of it.

ROMANS: I'm going to look at his foundation and I'm looking at those three blind trusts very closely and then also examining those tax rates. Looks like the tax rates for 2010, 13.9 percent, for 2011, about 15 percent.

BANFIELD: I had a vision with you at 8:31 at Ali Velshi in a conference room with takeout for seven hours.

ROMANS: I know. We're going to get one of those like little banker's lamps and the accountant visor.

SAMBOLIN: I would love to be a fly on the wall during that.

All right, so with a week to go before the Florida primary, the latest national polls show Newt Gingrich has caught up with Mitt Romney making the race for the Republican nomination a virtual dead heat right now and making it even more important that Romney overcomes some criticism that he's getting over this big tax issue.

So let's talk to our political panel, shall we, from Washington, CNN political editor, Paul Steinhauser, from Chicago, conservative commentator, Lenny McAllister, and from Washington, Democratic strategist, Maria Cardona. Thanks for joining us again.

So I'm going to start with you, again, Paul, because we're talking numbers here. We just saw Christine Romans go over all of those numbers. I don't know that anybody is surprised by these numbers. Do we have to wait until everybody takes a closer look like Christine is going to do and perhaps you're going to do to see if this is really an issue for Mitt Romney? PAUL STEINHAUSER, CNN POLITICAL EDITOR: Exactly because we've known for quite some time that Mitt Romney was wealthy. Remember, he ran for president four years ago, we know that. He put out his financial disclosure form this time around.

We knew he had assets up to $250 million. We even knew about the tax rate that's been out there for a couple weeks now. But Romney has had a problem talking about this for quite some time. We saw him stumble last week in both those debates in South Carolina.

That's why you want to get it out of the way now sooner rather than later. It's going to be a huge topic today. It's going to be a topic of conversation in our debate on Thursday night. But Romney needs to get this out of the way now. Will it hurt him?

Probably less than the Republican primary. It could come back to hurt him if he's the nominee because of the disparity between him and President Obama if it's a two-person race between those two guys in the general.

SAMBOLIN: All right, Lenny, let's talk about last night's debate. It looks like Romney is back on track finally. Listen to what he said to Brian Williams and then we'll talk about it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Pledge to spend your time going after the incumbent president, yet here we are again.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'll tell you why, which is I learned something from that last contest in South Carolina, and that was, I had incoming from all directions. Was overwhelmed with a lot of the attacks and I'm not going to sit back and get attacked day in and day out without returning fire.

(END VIDEO CLIP)

SAMBOLIN: We're used to seeing Gingrich on the attack and really fired up. This is new for Mitt Romney. Do you think it will work or will it wear thin?

LENNY MCALLISTER, CONSERVATIVE COMMENTATOR: Well, it worked last night. We'll see how the polls look going into Thursday. If he has to continue this methodology, he'll do so. Because before South Carolina, he was the presumed nominee, now he's become the assumed nominee.

We all know about that word assumed. What it does to most folks. He knows that he cannot just focus on President Obama. He has to make sure that he's taking out the Republican competition before he goes one-on-one with President Obama.

Because so far he hasn't done that and people have nipped that as heels and now it's tripped him up, two out of the first three states. He has to secure Florida and get that mantel back for being the presumed nominee and try to coalesce more of the Republican base and Republican establishment behind him for his nomination.

SAMBOLIN: All right, Maria, let's talk about whether Gingrich or Romney would be more suited to fight President Obama. The anti- Gingrich argument has been that he is an easy target for President Obama.

Now Republican sources are telling CNN if he is the nominee, it is a disaster. Another says we are not a def-con 5 yet, but we'll see what happens in Florida.

They feel like maybe his baggage is bringing him down, his political history as speaker of the House, his alleged affairs, his work with Freddie Mac. As a Democrat, who is a better candidate for President Obama to face, Romney or Gingrich?

MARIA CARDONA, CNN CONTRIBUTOR: Well, first I'll say this that President Obama will be ready to face whoever comes out toss nominee of the Republican Party. And the focus of the general election will be about a choice between a party who is only wants to look out for the rich like Romney and President Obama who looks out for the middle class.

But let me say this about Romney and Gingrich. Gingrich actually did a very, very good thing in South Carolina, which was he went against not just the Republican establishment, but he showed Republican voters who are angry, who are hurting, that he is the one who is ready to fight for them.

Which is something that Romney had not been able to do and those voters in South Carolina were able to look past all of the baggage and, frankly, I think the fact that the establishment is against Gingrich is going to help them with all of those voters, Republican voters who are disenchanted and disconnected from the party establishment.

And they don't think that the party establishment speaks for them. And that is, I think, where Romney is having a problem and why he came out attacking last night because up until last night you didn't see that Romney had the fight in him that Republican voters are looking for.

SAMBOLIN: Could he shift that now -- could he shift that now that we are seeing a fight?

CARDONA: Well, it's going to be interesting to see what happens at the CNN debate on Thursday because what I also saw last night, which is so interesting, is though Romney was attacking he seemed incredibly uncomfortable doing it.

It is not a role that he likes. It is not a role that he is good at. And frankly, Gingrich, again, in another role reversal, did not seem comfortable, not being the attack dog. So it's going to be interesting the dynamic we're going to see in the CNN debate on Thursday.

STEINHAUSER: Zoraida, one thing you noticed also last night the audience was extremely quiet. We didn't see that into South Carolina --

SAMBOLIN: Were they told to be quiet?

STEINHAUSER: Brian Williams was scolding them, but it really hurt Gingrich. Gingrich plays to the crowd. The crowd last night was not involved.

SAMBOLIN: That's a very good point. Thank you all for plugging the CNN debate. I think the only one that didn't plug it was Lenny.

STEINHAUSER: Come on, Lenny.

MCALLISTER: I promise you next time.

SAMBOLIN: All right, Paul, Lenny, Maria, thanks for joining us.

BANFIELD: Lenny might not be on the panel tomorrow. I'm kidding, Lenny McAllister. I love you. President Obama is easy. You think we're busy. I bet he was up at 4:00 hopefully watching us. Putting the I's and T's.

SAMBOLIN: Watching us?

BANFIELD: You never know, but if you are, hello. This is his third "State of the Union." If you're doing the math it's because the first "State of the Union" was actually an address to Congress. It was not an actual "State of the Union."

Political stakes are high obviously at this time. Sources are telling CNN that the president is going to sort of put forth a blueprint for the economy, quote, "built to last." Here's what with know about the proposals he's going to be running down.

Tax reform so the wealthier Americans will pay more of their share, those Bush tax cuts for the wealthy looking at getting rid of those as well and more refinancing for all you homeowners out there who struggle with high rates and having a tough time getting that re- fi.

Some additional tax breaks, too, for people who have companies that bring jobs back into this country instead of exporting them and more clean energy initiatives as well as enhanced education and job training initiatives.

The president said he knew back in 2009 when he delivered that first address that this was not going to be easy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I will be held accountable. You know, I've got four years.

UNIDENTIFIED MALE: You know quickly how people feel about what's happening.

PRESIDENT OBAMA: That's exactly right. You know, a year from now, I think people are going to see that we're starting to make some progress, but there's still going to be some pain out there. If I don't have this done in three years then there's going to be a one- term proposition.

(END VIDEO CLIP)

BANFIELD: CNN's Brianna Keilar live in Washington for us with a preview of tonight's big speech. OK, so the Republicans, Brianna, are already attacking this.

I can tell you that Ryan Priebus, Chairman of the Republican National Committee, has said this, "Winning the election will likely be this year's unspoken theme. As usual, Tuesday's speech will be a campaign speech." Is he so off the mark though?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Republicans actually are expecting this to be political and I think obviously they're going for that argument because, of course, it's going to be political.

I think White House officials are trying to say, you know, what's good for governing is good for politics. So they're trying to say that the point is moot. But, you know, this is something they try to fight.

Politicking is not always sort of presidential. So the idea that it's political might put a little ding in that sort of presidential armor, but of course, this is going to be political. It always is when a president is giving a "State of the Union" address in a year where he's facing re-election.

And I think one of the things you can look to say no doubt this is going to be political, is also the all important selling of the "State of the union." The president will be traveling Wednesday, Thursday, and Friday to sell these things that he's talking about before Congress tonight and where is he going?

He's going to Iowa, Nevada, Colorado, Arizona, and Michigan. Many of these states playing into that strategy of states that his campaign feels he needs to win if he loses Ohio and if he wins those states that he could still clinch re-election.

So he will be sort of putting forward this message of, you know, the Republicans are protecting the wealthy, fighting for the middle class. You mentioned the tax cuts for Bush tax cuts expiring, calling for tax reform, paying for more. These are things that will be hitting.

Congress will also in a way without necessarily naming the Republican field and really Mitt Romney because that's who is in his sights, he will be hitting them on those trying to draw a contrast.

BANFIELD: Have to read between the lines, shall we? Brianna, thank you for that. Appreciate that. I'm also looking forward to seeing Gabrielle Giffords who is going to be a guest of the first lady as well. We should tell you also later on STARTING POINT with our pal, Soledad. She's going to be talking to Obama's senior adviser Valerie Jarrett about the State of the Union address tonight. Maybe she will be able to squeeze a few more details out of Ms. Jarrett. But that's coming up later on after this program.

SAMBOLIN: It is 15 minutes past the hour.

Parts of Alabama resemble a war zone this morning. Debris as far as the eye can see. Three tornadoes touched down in Jefferson and Tuscaloosa Counties. Two people were killed, 100 injured. More than 200 homes have been destroyed. And that region, as you very well know, is still recovering from the twisters that killed 20 people last spring.

CNN's Reynolds Wolf is getting an up close look at all the damage. He is live in Clay, Alabama. We understand that there are two deaths there. And it was a 16-year-old girl and 82-year-old man.

REYNOLDS WOLF, AMS METEOROLOGIST: That's correct. You know, I don't want to sound callous when I say that but we're very fortunate that that number wasn't even higher. I got to tell you, when this tornado came through it struck very quickly, especially hit this community of Graybrooke (ph), which is just outside of Clay, Alabama.

I'm going to step out of the way. Mike Callaway is our shooter. Mike, let's give them a shot of what happens if you were to take a walk right up this walkway into this home. This home was just over 24 hours ago was in great shape, now rubble everywhere. You can see the installation. You see part of a travel trailer that was just a few streets over that crashed up against the side of this house.

It is hard to believe that you had a family in here that was enjoying a night of watching the NFC and AFC Championship on Sunday night and then sure enough early in the morning you had all this happen. What's amazing about it is that much of this happened in a span of about 35 -- 35 seconds or so.

Some of the good news, the reason why we didn't have more fatalities in this area, plain and simple, is because they did have plenty of advance warning. Storm Prediction Center out of Norman, Oklahoma -- easy for me to say -- basically told people throughout much of the region that this was going to be a possibility. A lot of people say in this community that they are really watching the weather, keeping a very sharp eye on the forecast. They knew that there was going to be a chance of rough weather.

Now, as this was happening, as this tornado was coming close, there were some sirens that were going off within, say, 20 minutes or so. Maybe it was that they had advance warning of up to an hour before the tornado came through here. But when it did come through, obviously you can see tremendous damage.

One person seriously injured now in the hospital but expected to fully recover. But thankfully everyone else who happened to be in their homes did exactly as we always tell them. Get into the innermost rooms away from the outside walls, away from windows. Everyone else has made it through for the most part unscathed.

SAMBOLIN: All right, Reynolds. Thank you very much. I think, you know, Reynolds is right when he says that those numbers not being higher is kind of surprising, right, when you see all of those pictures they're showing us.

BANFIELD: Remarkable, remarkable. The power that brings an entire house off its foundation or takes it away entirely, it's just earth shattering.

Our Rob Marciano was reporting on a lot of this system coming through for us yesterday. There's always a calm after the storm. But how was the rest of the country fairing now that the system is somewhat gone?

ROB MARCIANO, AMS METEOROLOGIST: Much more quiet, guys, thankfully. And let's not forget about Mississippi, Kentucky, Arkansas, they also saw their fair share of the storms yesterday.

Let's look at the radar from yesterday and then compare it to today. Let's take a look at it. There you go. Actually, let's skip right through that and show you this. Much more quiet across the eastern half of the country. We'll take this, wouldn't won't we? How about that?

A couple of showers across parts of Eastern, South and North Carolina, but that is about it, maybe across the Panhandle of Florida. Much more stable air moving in at least for the eastern half of the country, at least a third of the country.

We do have fog issues this morning. Some cooler and moist air kind of damps up across the Eastern Slopes of the Appalachian. So from places like the Myrtle Beach through Atlanta back through Southeastern Alabama, we've got visibilities as low as a quarter mile right now. And that may slow down some travel at the Atlanta Airport as Charlotte as well if you're traveling through there.

Seattle, rain and wind, another storm coming your way. Some snow in Denver. And Los Angeles, some fog as well. The atmosphere is recharging just a little bit. Strong dip in the jet stream bringing snow to the Colorado Rockies. They'll take that. But as it exits into Texas, this one is going to be a lot lower further south than the last one. We do have a severe threat today across parts of the Texas including San Antonio, Austin and Corpus Christi. This will traverse its way across the Northern Gulf as we go on through the next couple of days.

Temperatures still mild, even with that cold front coming through; 47 degrees for a high temperature in Boston; 64 degrees in Atlanta; and 33 degrees in Chicago, middle of January, it's typically the coldest time of the year, 33 in Chicago, Zoraida, you can attest to this?

BANFIELD: It could be worse.

SAMBOLIN: Thank you. Yes, it could be much worse. Thank you, Rob.

MARCIANO: All right.

BANFIELD: He is the godfather of the Tea Party and he is the former House Majority Leader and he is a legendary in Congress smiling away for us. Dick Armey is going to be live with us in just a moment to talk, oh, I don't know, politics? That's coming up next.

(COMMERCIAL BREAK)

BANFIELD: Welcome back to EARLY START. It's 22 minutes past 6:00.

I do not like to bring you this story but it is a story, nonetheless, the campaign manager for an Arkansas Democrat who's running for Congress says he found something very disturbing. His family pet, a cat, mutilated on the front steps of his home.

SAMBOLIN: Yes, indeed. The word "liberal" was painted on its body as well. The image is so disturbing that we are not going to show it to you this morning. So the cat belonged the Jacob Burriss. He's the manager for the candidate Ken Aden. Burris says his five- year-old son found the cat.

Aden's campaign released a statement saying in part, quote, "to kill a child's pet is just unconscionable. Whoever did this is definitely the worst part of humanity."

So Ken Aden is joining us now. Your campaign director was with his four children at the time. It was a 5-year-old who found it. I cannot imagine this happening to my children. How is he dealing with this?

KEN ADEN, RUNNING FOR U.S. CONGRESS IN ARKANSAS: I spoke with Mr. Burris early this morning and, you know, he's taking time to spend with his family and obviously, you know, work through this with his kids.

And it's just very disheartening any way you look at it because, you know, politics should be about a good, you know, political conversation, a good discourse. And, you know, whoever did this is just wrong, plain and simple.

SAMBOLIN: I have to ask you, has this been a contentious race?

ADEN: Since we announced September 1st, we have had good, you know, political discourse with our opponent. And I do not believe that -- you know, I believe this -- this action is not related to the Republican that we're running against. I do not believe that he, you know, has anything to do with it.

I just believe that it was someone just, you know, just -- you know, I don't know. It's just crazy, to be honest with you.

SAMBOLIN: You know, I have to release here part of a statement that Congressman Steve Womack has in response to this. "The thought of brutalizing any animal to make a political statement, no matter what that statement is, is beyond any standard of decency. There should be no tolerance in our political discussion here in this nation for this kind of behavior."

How are the authorities handling this? Because, you know, I would imagine that folks that are working on your campaign feel threatened.

ADEN: Well, right now the authorities are currently doing an investigation into it and it's our hope that, y, we have been this contact with the FBI, it's our hope that this will continue to move forward. And obviously whoever is behind it will be, you know, caught and, you know, brought to the full justice of the law.

It's just -- it's disheartening and it's very, you know, upsetting. But, you know, we as a campaign, we're going to continue to move forward, you know, and do our job here in the Third Congressional District of Arkansas.

SAMBOLIN: Well, we certainly wish that family well. Ken Aden running for U.S. Congress in Arkansas. Thank you for joining us this morning.

ADEN: Thank you so much for having me.

BANFIELD: Coming up, they call him the Godfather of the Tea Party, but before the Tea Party, he was kind of like a Godfather of Congress. His name is Dick Armey, and what does he think about all this business that's been going on on the debate stages? Well, he's here live to tell us.

Congressman, I can't wait to talk to you.

(COMMERCIAL BREAK)

BANFIELD: And welcome back to EARLY START. It's 28 minutes past the hour, which is a very good time to get you caught up on headlines if you're just about to make it out the door.

Mitt Romney's campaign will formally release his tax returns at 8:30 Eastern Time this morning. "The Washington Post" got some good information overnight. They report that Romney earned a total of just over $45 million in the last two years. Chump change. He paid a total of $6.2 million in taxes.

Romney's income tax then, if you're doing the math, was at about 13.9 percent in 2010 and he's projected to be paying about 15.4 percent for last year's return.

SAMBOLIN: Two more bodies have been recovered from the wreckage of the cruise ship Costa Concordia off the Coast of Italy. That brings the number of confirmed victims to 15. Seventeen people are still unaccounted for, including the two Americans. Italian officials say salvage workers are pumping fuel out of the cruise liner right now. BANFIELD: And the two top Republican candidates went at it in last night's Florida debate. If you didn't see it, Mitt Romney, wow, what a change, going after Newt Gingrich's leadership credentials and accusing him of, quote, "influence peddling," after he left Congress.

Mr. Gingrich denied the charges, accusing Mr. Romney of the worst kind of trivial politics.

All four candidates are going to debate again Thursday night. You can see it live right here on CNN at 8:00 Eastern.

And one of the many political conundrums for this race for the White House is where the Tea Party candidates stand and whether they'll vote in an actual block. The man who's considered the godfather of the Tea Party is here with us. He also happened to have served with Newt Gingrich in Congress.

Congressman Dick Armey, it's excellent to see you live and in person. Thanks for coming in.

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: Well, thanks for having me.

BANFIELD: How are you doing, my friend from Texas?

ARMEY: We're happy. We love Texas and we love our grandkids. So, we're happy and still we're busy.

BANFIELD: Now that we got the fun stuff out of the way, let's talk business, OK?

ARMEY: OK.

BANFIELD: I'm sure you're watching these debates and I'm sure you're watching these commercials and I'm sure you're noticing it is a nasty, nasty fight. Where do you fit into this?

ARMEY: Well, first of all, my personally find politics to be boorishly childish all my life, I've thought that. So, I've tried to avoid that.

We in our movement -- certainly I can speak for FreedomWorks, our organization, but I think the movement broadly has forsaken the possibility of having a reliable, innovative small government conservative emerge through the Republican Party's process. So, we put our focus on --

BANFIELD: What do you mean? I thought that was Ron Paul, Congressman.

ARMEY: Well, Ron Paul, we don't believe he will emerge as the candidate through this process.

BANFIELD: So, why aren't you backing him and all your very strong Tea Partiers? I mean, the numbers are in the hundreds of thousands if not millions?

ARMEY: One of things you have to understand about small government activists is we all -- each and every one of us individually march to our own drummer. So, there are many people in our movement that are backing Ron Paul and there are some that are backing some of the others as well.

BANFIELD: But then that means that you don't have sort of a bloc of power if what I'm hearing is accurate.

ARMEY: Well, you see, we're not about power. That's one of the things that's confusing to a lot of people who are used to analyzing the behavior of real politicians that are in business for themselves. We're about what's good for the nation, individual liberty, personal freedom and everybody being free to do their own thing.

BANFIELD: Yes.

ARMEY: But we're also understanding that, one, is very unlikely that any of these candidates that are on the field today will emerge with 51 percent of the delegates because of the way it's structured and that they're going to have to resolve this thing and that will be an inside game among the people in the Republican Party.

BANFIELD: Like a brokered convention? Are you telling me, Congressman, that I have to cover this at pace until the convention?

ARMEY: I wouldn't be surprised.

BANFIELD: Really?

ARMEY: Also the fact that given the fact that it seems right now to be headed in that direction, you still have an opportunity that somebody like a Mitch Daniels could make himself -- declare himself available.

BANFIELD: Again?

ARMEY: The person -- I've said this for some time -- the person who may very well end up being the Republican Party's nominee may not be on the field at this moment. And I don't think anybody that's on the field can emerge in this process with 51 percent of the delegates.

BANFIELD: All right. Well, let me jump into something that's been going on and that is, you know, the business between these two front-runners, Romney and Gingrich. And I just want to play one piece of last night's debate for those who maybe didn't see it, so that we can sort of talk about the tenor and how Mitt Romney may have changed.

Have a listen to Mitt Romney as he talks about his fellow contender, Newt Gingrich.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The speaker was given an opportunity to be the leader of our party in 1994. And at the end of four years, he had to resign in disgrace. In the 15 years after he left the speakership, the speaker has been working as an influence peddler in Washington.

(END VIDEO CLIP)

BANFIELD: Congressman Armey, you worked with him. You were right there alongside all of it. There were all sorts of whisper rumors that there was a coup and I think you were accused at one point of being part of it, and I know that you vehemently denied it.

But could you please weigh in? Was this a disgraceful period of time as Mitt Romney charges for your former colleague Newt Gingrich?

ARMEY: I think there were -- Newt had problems but I don't think it's accurate to say he resigned in disgrace. There was a coup attempt. It was an ill-advised, probably the dumbest and the most dishonorable thing I ever saw while I was in Washington. I put a stop to it personally myself, but Newt survived that.

He also, by the time he left his speakership, had resolved all the ethical allegations that had been alleged and formally charged against him. The fact of the matter is, for the last two years of his speakership, Bob Livingston, had spent -- he and his allies had spent the entire two years on the floor of the House making deal for vote by vote by vote to get the votes for Livingston to be elected speaker and Bob Livingston in that manner had the votes and Newt recognized that and left.

BANFIELD: These details that you're giving are so terrific but these sometimes get lost in the bumper sticker tendencies of the electorate.

ARMEY: Right.

BANFIELD: And here's what I want to ask you. As I watch Newt Gingrich tear into our colleague John King and then I watch Mitt Romney tear into Newt Gingrich, I sometimes wonder -- and their popularity soars afterwards -- I sometimes wonder if the Republicans are trying to elect a cable news host.

ARMEY: That distresses me, too. And again, the pundits tell me, the big shot professionals that are in the political rackets, tell me that negative campaign works and apparently it does. But it is so damned undignified they ought to be a little bit embarrassed about it. Don't they have a plan for America they'd like to talk about rather than bellyaching about each other's personal difficulties?

BANFIELD: Yes, well --

ARMEY: I frankly get a little disappointed in Washington. I wish they'd all grow up and get busy focusing on this country.

BANFIELD: Perhaps you need to run. Perhaps that's the answer.

Congressman, always good to talk to you. And give my love to all those folks back in Texas.

ARMEY: Thank you, ma'am.

BANFIELD: Nice to you see.

And, by the way, for the best political coverage, make sure you keep it here on CNN.

Seven p.m. on "STARTING POINT," Mitt Romney's campaign Adam Putnam is going to join Soledad O'Brien. We're going to ask him if his candidate can recapture all that momentum that seemingly slipped away.

At 8:00 a.m. on "STARTING POINT" as well, Soledad is going to go one-on-one with Newt Gingrich supporter Trent Frank. She's going to ask the Arizona congressman how his candidate plans to close the deal in Florida, and then rally the party behind him moving forward.

SAMBOLIN: Thirty-six minutes past the hour.

Coming up on EARLY START, Mitt Romney's vast riches about to release his tax returns a little bit later, but we have the early numbers on EARLY START.

We'll be right back.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. I'm Zoraida Sambolin, along with Ashleigh Banfield.

You're waving this morning.

BANFIELD: I'm just waving. That's it.

SAMBOLIN: Thirty-nine minutes past the hour here.

So, in less than two hours, the Romney camp plans to release their candidate's most recent tax returns. A failure to do it sooner may have cost Romney South Carolina.

Well, today's release and the controversy perhaps stir up some more?

Live from Rochester, New York, David Cay Johnston, tax and accounting columnist for "Reuters".

Thanks for being with us this morning.

DAVID CAY JOHNSTON, TAX & ACCOUNTING COLUMNIST, REUTERS: Thank you.

SAMBOLIN: So, as we wait for this official press conference to release tax returns, a few organizations to get a preview, "The Washington Post" and yours, and it shows that Mitt and Ann Romney had an adjusted gross income of over $21.6 million. We have it up there again in case anyone missed it.

The adjusted gross income is a total income minus a few specific expenses and fees. The effective tax rate, 13.9 percent. This is not the full extent of his net assets. It excludes an IRA and a blind trust for his wife, hundreds of pages and forms here. I think it was 550 pages that Christine Romans told us.

What would you be looking for in these pages?

JOHNSTON: Well, these pages show that Romney is, in fact, in compliance with the law and the funds that he has in the Cayman Islands and elsewhere are perfectly legal. Nothing is being hidden.

On the other hand, here's what they show that everyone else but "Reuters" has missed. The Romneys gave $100 million to their sons and paid not one penny of gift tax. They were able to take assets they have that are producing enormous income and, under the law, give that money to their children and not pay any taxes on it.

SAMBOLIN: And is that something that you specifically found in what has been released to you?

JOHNSTON: Yes. I have suspected this and written about in my column that this is what happened. Last night, Brad Malt (ph), the attorney for the Romneys, confirmed to "Reuters" that we were correct. They have not paid a penny of gift tax. That's because Congress allows a very tiny group of people, the Romneys by their income are in the top 1 percent of the top 1 percent, to not count as having any value the real source of their income -- something called carried interest -- if they give it to their children.

SAMBOLIN: And so, that's perfectly legal.

JOHNSTON: Absolutely. It's absolutely legal.

The scandal here is not the Romneys who have comply with the law in every way. It is the law that requires you and me to be taxed differently and much more heavily than a very small group of people, those who run funds of the kind find that Mr. Romney did.

SAMBOLIN: So, it's kind of tax law that you're talking about.

JOHNSTON: Absolutely. And, you know, the hedge fund managers and the private equity managers are the highest paid people in the world. Some of them make over $1 billion a year and don't have to pay income tax on that money. They only have to pay tax on the money that grows out of it. And the Romneys' return shows this.

Now, Romney's returns only go back one year. So, what he did from 1982 to 1999, the returns that really matter --

SAMBOLIN: Well, yes, you actually say --

JOHNSTON: -- those have not been released and the Romney campaign has indicated they are not going to at least as of today.

SAMBOLIN: I'm sorry to interrupt you here. But you say that built his fortune of more than $200 million while he was working at Bain but also you go on to say that he's done nothing illegal. So, why do you think she needs to release the Bain years?

JOHNSTON: Well, because, one of the things in run for president is it allows us to examine how the tax system distributes the burden of supporting government. And the fact is that an individual worker who makes $54,000 a year bears a heavier tax burden than the Romneys and when it comes to gifts, most Americans on a gift of $100 million to their children would pay a $35 million gift tax. The Romneys paid zero.

We need to have a debate about how the tax system is not as it appears on the surface and how we have special rules for hedge fund and private equity managers that treat them much more lightly than all the rest of us.

SAMBOLIN: So, perhaps something that's become an issue later on, but not necessarily for Romney right now?

JOHNSTON: I don't know. I mean, I'm hoping that this leads to a serious discussion about it. The Republicans -- the leading Republicans are the ones who brought this issue to the fore. Newt Gingrich and others who did complaining about Mr. Romney, about the businesses that he's been in, about how he's conducted his business. They're the ones that put the issue on the table.

SAMBOLIN: All right. David Cay Johnston, tax and accounting columnist for "Reuters" -- thank you for joining us this morning.

JOHNSTON: Thank you.

BANFIELD: So you think the Republican contenders have been going hard at it? That is nothing compared to Iran and the rest of the West. Find out exactly what Iran is saying now as they get squeezed tighter and tighter economically.

We got a live report from the Pentagon coming up.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back. 6:48 in the east. Soledad O'Brien joins us now with a look at what is ahead on "STARTING POINT." Good morning.

SOLEDAD O'BRIEN, CNN HOST: Hey, ladies, good morning to you. You've been talking about it all morning. We're going to continue to talk about Mitt Romney and releasing his taxes. We know he's made over $21 million in just 2010 alone. And he paid 13.9 percent tax rate. This morning, we're going to ask Adam Putnam. He's running Romney's Florida campaign if finally releasing these taxes will finally close the issue.

Also, two brand new lawmakers, Terry Sewell is the first African- American woman who elected to Congress from the state of Alabama and the Tea Party's Allen West is going to join us. "State of the Union" tonight. We'll talk about that. We'll talk about some low poll numbers from members of Congress and find out what they think of Washington, D.C. so far. Also, our get real this morning, Boston Bruins were honored at the White House for winning the Stanley Cup, but the goalie snubs the president. We'll tell you why. That's all ahead this morning on "Starting Point." We'll join you here live in just about ten minutes. See you then.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. U.S. and European Union is trying to hit Iran where it hurts, panning (ph) oil shipments, freezing assets, trying to get Iran to the nuclear bargaining table.

BANFIELD: Are they ever? But, you know, this is not going to come as any surprise. Iran is being defiant. What do you know? Issuing a brand new threat. I don't know how many this is now, but it's a repeated threat to shut down the Strait of Hormuz, and it comes after another U.S. aircraft carrier was dispatched to the region.

I don't know if this isn't call (INAUDIBLE) but CNN's Chris Lawrence is certainly following the developments, and he's live at the Pentagon for us. You know, every time I tell this story, I feel like a broken record. Chris Lawrence, am I a broken record or is there something more about it this morning that I need to be worried about?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, I tell you, Ashleigh, these sanctions are in a completely different realm. These are probably the most significant toughening of sanctions to date. I mean, we are talking about the European Union imposing this oil embargo on Iran.

That's 20 percent of Iran's oil exports just gone right off the bat. The U.S. is also now put Iran's third largest bank on the blacklist which really brings it up to about 23 banks now that are on that list. It really cuts off one of Iran's last access points to sort of the international finance world.

A lot of people I've spoken with say this really has the possibility of bringing Iran to its knees economically. The key, though, is going to be looking at some of Iran's biggest partners, China, India, Japan, to make sure they don't just fill that gap and start importing more oil.

BANFIELD: Sure. Yes, because, I mean, they've said right away they've got enough of a demand there that that could possibly, you know, backstop, for them. But I'm always curious to see what those ornaments are up to and how we sort of position and negotiate in that way. But Chris, keep an eye on it for us, and we'll certainly check back in with you to find out what's happening. Chris Lawrence live at the Pentagon for us.

LAWRENCE: Sure.

SAMBOLIN: It is 53 minutes past the hour. We're going to take a quick break, and we'll be right back.

(BEGIN VIDEOTAPE) KATHERINE LEE, DELTA FLIGHT ATTENDANT: Hi. I'm Katherine Lee, and I'm a Delta flight attendant. I'm in the air flying at least 17 days out of the month. The majority of the people will recognize me from the Delta safety video.

Smoking is not allowed.

I am not an actress. I truly am a flight attendant as well as an instructor. I can fly upwards to 17, 18 days a month sometimes. All over the world. You name it, I'm usually flying there. I think in this industry, you have to enjoy travel and enjoy people. Happy passengers make for a happy time on our plane.

Sometimes, on a trip, you only get to stay 10, 12 hours, maybe 24. If it's on pleasure, obviously, I can stay a week if I want to in Vegas and really enjoy myself. I just try to look at the fun of the travel and nostalgia that thanks for flying with me. I hope I get to see you in the air soon.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

SAMBOLIN: We've been talking about this all morning long. Mitt Romney is going to be releasing his tax returns, and on "Starting Point," we will be covering that live at 8:30 a.m. eastern. Soledad O'Brien has quite a list of panelists there.

BANFIELD: Look at that line up. I'm talking experts, serious experts, not only CNN experts but are panelists who weigh in from all different points of view which is terrific. And, she's not only going to do that, but she's going to do this on location in Florida. Can you guess where?

SAMBOLIN: At a diner, probably.

BANFIELD: At a diner.

(LAUGHTER)

BANFIELD: She gets her breakfast. Soledad, what did you order today? I'm just curious. I'm starting to get real jealous of this.