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ERIN BURNETT OUTFRONT

Super Rich Surtax; U.S. Raid; Google Data

Aired January 25, 2012 - 19:00   ET

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


ERIN BURNETT, HOST: Thanks, John.

President Obama tells millionaires they need to pay up. But will the super tax or is the surtax on the super rich be enough? We crunch the numbers.

And the latest polls from the GOP race less than a week until the Florida primary and it's a virtual dead heat between Newt and Mitt. Absentee voters may make the difference. There's a "Bottom Line" there. We've got it.

And Navy SEALs rescuing American citizens from Somali pirates, sounds like the plot of a movie, but it's real life. We go there tonight.

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, the super rich surtax. OK, I keep stumbling on that one. But President Obama today went on the road to press a theme from his State of the Union address telling millionaires they need to pay up.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: If you make more than $1 million a year you should pay a tax rate of at least 30 percent.

(END VIDEO CLIP)

BURNETT: All right, the president's proposal would affect about 240,000 tax filers across the country. An expert from the Tax Foundation tells OUTFRONT it would effectively raise the top marginal rate to about 44 percent for millionaires. Now, that's the highest it's been since the middle of this guy's administration when he was cutting taxes.

Now, putting aside the debate over whether a super rich surtax is fair, here's the math. Taxing this group would bring in $41 billion in revenue a year. That adds up, according to the Tax Foundation, when you adjust it to about 380 billion over 10 years. (INAUDIBLE) thanks to David Logan (ph) for running those numbers for us.

All right, that sounds like a lot of money, right, $380 billion? But here is an interesting thing. Compare it to our debt and you'll see it is only a teeny, tiny, minute sliver, about 2.5 percent. The bottom line is that President Obama's plan whether you like it or not, won't be enough to fix the debt problem. To fix the debt problem in this country we're going to need (INAUDIBLE) a lot bigger numbers.

For example, the Bush tax cuts are set to expire at the end of the year. Letting them expire for people who make over $250,000 will raise 678 billion over 10 years, but if you let them expire for everyone, you're looking in the eye of $2.8 trillion and that math works. That cuts the debt, if you used it all for that, by 18 percent immediately.

All right, big problems need much bigger solutions. Adam Davidson is economics columnist for "The New York Times". John Avlon is CNN contributor and Jamal Simmons is a Democratic strategist. Great to have all of you with us and Adam, let me start with you. You've looked into the numbers and done some really incredible breakdowns on this. Actually, you looked at if you taxed all millionaires at 100 percent it still doesn't do what increasing taxes on everybody, on the middle class would do.

ADAM DAVIDSON, ECONOMICS COLUMNIST, NYT MAGAZINE: Yes. We don't tax wealth in this country. We tax new income. And if you look at all the millionaires in America, they make around $700 billion a year in income and they pay about $200 billion a year in taxes. The two bipartisan commissions, the Simpson-Bowles and the Domenici-Rivlin commissions they both came to similar numbers.

We need about $400 billion either in more taxes or less spending. And so, you'd have to tax all the millionaires at pretty -- much close to 100 percent to break that nut. Now, I'm not saying we shouldn't tax the rich more. I think for equity reasons, for fairness reasons, sure. Maybe it's a good idea. But it's just the math doesn't add up that that solves our financial problems.

BURNETT: And what about when you look at middle class? When you look at the Bush tax cuts going away for everyone, you actually had looked at what it would take to make a big difference. What kind of tax increases would you be talking about?

DAVIDSON: Well and again I don't want to say boy the middle class really must bear the burden, but the thing about the one percent is there's only one percent of them. And if you add up the entire one percent, it's about $1.7 trillion and they already pay -- I'm doing the math in my head -- something like 400 billion already. So there's -- they can pay more. They definitely can pay more. That's probably a reasonable thing to propose, but there's just not a reasonable amount that they can pay that really solves our problem. I saw and I'm not proposing this, but I saw that since the middle class makes around $5 trillion a year --

BURNETT: Right.

DAVIDSON: -- that's what, three times more than the one percent does, you can tax -- increase their taxes by eight percent and it has the impact of taxing the very rich at 100 percent, so clearly, the middle class will have to share some of the burden. BURNETT: And there's -- so that's on the tax side, which goes to show you it's complicated and then there's the spending side, John Avlon, which is a big way you can get rid of the debt. There's taxes and there's spending.

JOHN AVLON, CNN CONTRIBUTOR: That's right. You've got to deal with both sides of the ledger and here's what's important to note. Yes, we have a spending problem in this country, but just like we can't tax our way out of the deficit and debt we face, we can't cut our spending out of this problem alone. Discretionary domestic spending only makes around 12 percent of the federal budget. So what needs to be done is an all of the above approach.

Everybody knows this is true. Yes, you need to raise revenues. You need to cut spending and you need to bend the cost curve on entitlements. All three things need to be done, but every time we've had a chance to do it, as you know, the super committee super failed because they couldn't find the political will to do the tough thing that they knew was the right thing in the long run. That's the problem we're facing. (INAUDIBLE) fiscal problems and political --

BURNETT: Right. Now, Jamal, obviously the whole concept of raising taxes on millionaires is popular. It always has been. It still is and from a political point of view, that seems to be what the president you know thinks he can get some benefit from, right?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Yes. What the president said last night was everybody needs a fair shot in this country and everybody has to do their fair share. And I think there's a certain -- sentiment in the country that you know we had bank bailouts, we had auto bailouts, but we didn't have homeowner bailouts. We didn't have taxpayer bailouts.

And so the president said no more bailouts, no more handouts and no more copouts. Everybody's got to participate. And I think that's exactly right politically. On the economic side, John is absolutely right. We've got to do all of it. There's one piece that he left out though. We've also got to grow. We've got to grow this economy. If we don't grow this economy, all the rest of this stuff is still not going to get us all the way to a closed up deficit.

BURNETT: All right and on that issue, Jamal, let me just play something Newt Gingrich had to say talking about what the effect of focusing this taxation on this one group of people might do to growth.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I just want to comment on one thing in the State of the Union last night, which I'm not sure the president understood, but if he actually meant what he said, it would be a disaster of the first order.

(END VIDEO CLIP)

BURNETT: Now, obviously, I don't think, Jamal, the president's not trying to say he can solve this all by taxing millionaires, is he? SIMMONS: No, I don't think he said that at all. I think he said you need a fair shot and he needed a fair -- everybody's got to do their fair share. And I think that's the part of this that with a millionaire tax increase comes from. But he also he's going to cut off the Bush tax cuts for people who make over $250,000 at the end of this year, so that's going to close another part of this. And let's not remember -- let's not forget --

BURNETT: Right.

SIMMONS: -- last summer he did sit at the table with John Boehner and say he was willing to go somewhere on entitlement cuts, but Boehner couldn't cut the deal at the end.

BURNETT: Right. Now it's politically, I guess, John, impossible for him to say certain things last night. It's easy to talk about taxing millionaires. OK, everyone likes that.

UNIDENTIFIED MALE: Right.

BURNETT: But some of the other things that would get us there. Simpson-Bowles, get rid of the mortgage interest tax deduction, by the way this proportionately helps the wealthy --

UNIDENTIFIED MALE: Ouch.

BURNETT: -- but not something that other people want to hear. He didn't want to touch the things that are kryptonite that all of the commissions under President Bush and President Obama had said we need to do.

AVLON: That's right and that's the failure of political will that's behind this problem. Remember, the goal here isn't just to, you know equity or fairness. The goal is to deal with our deficit and our debt because that's becoming a geostrategic problem for the United States. The question is how you get there.

And it's going to take pain. And that's what -- you know politicians are so pain averse. You know they're willing to demagogue the debt every election season, but then when it comes time to deal with it they run away in the other direction, especially on Social Security and Medicare reform and Medicaid --

SIMMONS: But John, let's remember though, let's remember the president did intimate to John Boehner last summer, he was willing to do some entitlement cuts. Boehner couldn't cut the deal with his caucus.

AVLON: I hear you, Jamal, but intimation isn't enough. You need actually specific plans on the table. And that's where we seem stalled. So everyone recognizes we have a problem. The question is whether they're going to find the political will to deal with it. If you take a look at everything that's going on right now is a great opportunity for tax reform.

BURNETT: Right. AVLON: From the Romney tax returns to this proposal tonight --

BURNETT: Yes.

AVLON: -- let's get a fair, flatter tax system in place that makes the distinctions between the super rich and the working wealthy.

BURNETT: And Adam, to your point, you look at the math, right, and you say, OK, look, five trillion a year in the middle class and 700 billion for the millionaires, but all this kind of masks the overall point, which is if you went to a flatter system, and you added a lot of progressivity (ph) to it, you could get rid a lot of these loopholes. You would end up probably with the wealthier paying more.

UNIDENTIFIED MALE: Right.

BURNETT: At least most of the analysis I've seen. Does that jive with what you've seen?

DAVIDSON: Yes -- absolutely. There's yes, I mean I think that the -- at least the intellectuals of both parties of both sides are much closer than people realize on corporate tax. They're all within five points at 20 percent, that we should just eliminate corporate loopholes, make the tax 20 percent instead of 35 percent, which no one ever pays. Have a simpler two or three level system for us regular citizens.

BURNETT: Right.

DAVIDSON: Yes, make the rich pay a little bit more, but at a lower rate.

BURNETT: So Jamal why doesn't the president talk about closing loopholes? Why does he choose instead to put out a number that sounds like you know I'm punching him?

SIMMONS: Well I think he spent last summer and into the fall talking about tax -- comprehensive tax reform, closing loopholes, having a simpler system. He couldn't get the Republicans to sit down because John Boehner doesn't control that part of the caucus and the Tea Party folks to actually say we're going to have some tax revenue increases along with these entitlement cuts because everybody knows you've got to do it. But he needs a partner who's going to be willing and able to cut the deal.

AVLON: But let's be honest. This is about getting a populist appeal to get his base fired up. That's why he framed it this way last night. When you look at what even Mitch Daniels said in his Republican response, he talked about closing loopholes on the super rich, so we should be able to find is the opportunity for an agreement here --

BURNETT: Yes. That would result in them paying more and so theoretically --

(CROSSTALK) BURNETT: -- everybody would be happy.

UNIDENTIFIED MALE: There's a deal to be made.

BURNETT: And I know very few people at least who will ever speak publicly are wealthy would not say they were happy to pay more, especially in the current situation. All right, thanks to all of you, appreciate it.

UNIDENTIFIED MALE: Take care.

BURNETT: Well Navy SEALs rescue an American aide worker from Somali pirates. The man who wrote the book on the subject spent time with the pirates under the protection of a certain clan comes OUTFRONT from Africa tonight.

"Under Surveillance" Google, they've been collecting a lot of information about you over the years. You're probably aware of it. They said that they you know weren't going to do anything with it, but.

And was it a murder or tragic accident? Three Afghans suspected of committing a horrific honor killing in Canada, this OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: Tonight new details about the daring U.S. raid that freed an American and another hostage held by Somali pirates. The elite commandos including members of the Navy SEAL team that killed Osama bin Laden parachuted in and entered the compound. They killed at least nine pirates. They all escaped unharmed by helicopter. American aid worker Jessica Buchanan (ph) and Poul Hagen Thisted (ph) from Denmark were kidnapped last October. Now, Somali pirates have been a constant threat. You've heard about them on sea, but now there are a lot of land kidnappings. They've been terrorizing their captives and the whole point is to get ransom money.

Now while we hear a lot about them in headlines, very few people have spent time with them, in part because kidnapping and death are very real and present risks for anyone in Somalia. Jay Bahadur knows all about them. He spent time with them. His book, "The Pirates of Somalia" chronicles his time with these gangs. He went in there. He lived with them, had protection of a clan. He's in Nairobi right now where he edits "The Somalia Report" and I spoke to him right before the show and asked him about the pirates behind this kidnapping.

(BEGIN VIDEOTAPE)

JAY BAHADUR, AUTHOR, "PIRATES OF SOMALIA": Well, it was gang based in central Somalia. Based -- I was there two years ago and now you're seeing a much more brutal gang and also gangs that are turning inwards. And so these two hostages that were freed, they were from the Danish Demining Group (ph). They were actually kidnapped on land, so oddly enough pirates, because it's becoming more and more difficult for them to hijack ships at sea due to increased security measures, armed guards, they're actually as I said, turning inland and I guess you can't call it piracy anymore.

You can call it straight up kidnapping. But you also find that much like as kidnapping groups of all over time they become much more brutal. And so the Somali pirates aren't yet at the level of say the FARC in Colombia or the Taliban or whatnot, but it's getting to that -- getting to that point.

BURNETT: The groups that we're talking about here and some of these pirates obviously part of larger criminal groups. They have access to financing, got issues with al Shabaab, which some call sort of an ex al Qaeda. How big is the network?

BAHADUR: I would say pirate groups are a lot less organized than people think. Now, they're becoming more organized, more like standing militias. But especially back when I was there, it was more loose business organizations that coalesced around people who had money. And you'll find that the people with the money who are generally financiers, who have funded operations in the past will get their friends and relatives, put together a gang and basically engage in (INAUDIBLE) kidnapping. There are some links to al Shabaab, very tenuous, but it's not like you can't speak of pirates as a singular organization not even now.

BURNETT: Right. What about, Jay, where does the money for the ransom go? I mean what do they use it for? You know it's interesting down in Rio I found that gangs there, you know they want to have gold plated guns and things like that. You have other gangs that have much broader goals and more religious goals. I mean where does the money go from these kidnappings and ransoms now in Somalia?

BAHADUR: Well I would say it comes down to two things, cars and cots (ph). And cot (ph) is -- cot (ph) being the narcotic drug that pirates are almost universally addicted to and cars being land cruisers or what I call the pirate company car, which is the Toyota Surf (ph). It's a baby land cruiser that let's say less affluent pirates can afford. And that's honestly where most of the money goes.

BURNETT: What do you think it was like or could you tell us it was like for these two hostages while they were in captivity? How do you think they were treated or what can you tell us about what they might have gone through? We're looking at them now, Jessica Buchanan (ph) and Poul Hagen Thisted (ph).

BAHADUR: Yes, I don't know too much about their particular circumstances, but I can imagine they were probably treated better than your average hostage. I know they were moved around constantly, so the pirates are so paranoid of an attack on land. Actually at one point, what Somalia report found out was that they were taken on board a hijacked ship just because the pirates are so paranoid of exactly what happened essentially, so I guess hindsight's 20/20. But they were actually kicked off that ship after there was a disagreement among the various stakeholders and they were forced back on land and that's when this rescue happened and what spawned the exact timing of this rescue is that Jessica was experiencing a serious kidney ailment. They brought a Somalia doctor in to look at her, but obviously the resources and the experience he had were not sufficient given the circumstances and that's what I think determined the exact timing of this commando raid.

BURNETT: All right. Well thank you very much, Jay. Appreciate your taking the time.

BAHADUR: Thank you, my pleasure.

(END VIDEOTAPE)

BURNETT: From pirates to privacy. Tonight's "Under Surveillance" takes on Google's big new push. Google announced today it will merge all the information it collects about you through your searches, Android phones, g-mail, YouTube, Google+, to give you a quote "more intuitive Google experience". Are these changes an invasion of privacy?

Our legal expert Paul Callan is here to tell us if Google has gone too far. You know interesting, Paul, I talked to Eric Schmidt at Google headquarters. He's obviously the chairman of the company and I asked him about his policy on tracking personal information -- this was just about a month ago. Here's what he said.

(BEGIN VIDEO CLIP)

ERIC SCHMIDT, EXECUTIVE CHAIRMAN & FORMER CEO, GOOGLE: Our strategy is to make sure that anything we know about you, you opt in for, so if there's any kind of information about your location, you choose to share that.

(END VIDEO CLIP)

BURNETT: All right my understanding is there is no opting.

PAUL CALLAN, CRIMINAL DEFENSE ATTORNEY: You should have been accompanied by your lawyer on that little tour of Google because you know they've changed their policy completely. It's -- you have to opt out in order to evade these -- the collection of this material and the only thing that's voluntary about Google is signing up for Google in the first place. Once you're into their system, they collect so much information about you it's really staggering and I think the public would be shocked to know.

BURNETT: OK. So how does this work though from a perspective of where our rights will be? What is the difference between opting in and opting out? I mean everybody wants opt out -- forces you to opt out, right, like, hey, when I go online and I order from a catalog, I have to uncheck the box that says I'm going to get more e-mails. Isn't this essentially the same thing?

CALLAN: It's very similar to that, yes it is, but the opt-out provision with Google is very, very difficult because they collect so many items of information in so many different services.

BURNETT: You can't just opt out altogether.

CALLAN: No you can't.

(CROSSTALK)

CALLAN: There's not -- there's not one box that says unsubscribe, so when you search Google they're getting the information. If you have Google mail, they get information there. If you are in Picasso (ph), where your photos are they get information there. They track where you travel to. They know all of this stuff. They know more than you can possibly imagine.

BURNETT: And I have to trust their benevolence and do no evil (INAUDIBLE) they won't do anything with it. Now, but in all seriousness, is this going to be challenged?

CALLAN: Well I think it's being investigated now. It's being looked at by federal authorities. It's being looked at by European authorities who are very, very sensitive to privacy, but mixed bag. We get so much information as a result of having this service. They pay for it by using this generic information about us to advertise. So you know, it's a mixed bag as to whether we want give the information or not.

BURNETT: All right, Paul Callan thank you and let us know what you think. Next, we've got the polls out of Florida. It is a dead heat we can promise you that. Plus, what's the healthiest place in America? That's next.

(COMMERCIAL BREAK)

BURNETT: So, Loma Linda, California, if you're watching there tonight, listen up. It's the healthiest town in America. Home to a medical center that attracts 600,000 patients a year. Loma Linda does not have any liquor stores and it has been tobacco free for almost 30 years. Wow, you say? Well, it is certainly different than other places in this country. "National Geographic" called it one of the healthiest four cities in the planet, which brings us to tonight's number, one.

That is the number of McDonald's restaurants Loma Linda will have. In a controversial move today, the Town Council voted to approve Loma Linda's first McDonald's. A decision that has divided the community, half of the town's population is Seventh Day Adventists and some parishioners called the vote an affront to the faith's teachings of holistic wellness. But the town's mayor, an Adventist who supports the McDonalds says it's a political not a religious decision saying quote, "My perspective as a conservative libertarian is that government's role should be minimalized. We should keep people from harming one another, but government doesn't have a strong need to keep people from harming themselves."

Now because we just got curious here we decided to check out what else is in Loma Linda. Interesting Loma Linda already has a Carl's Jr. franchise, so I wanted to check "The Big Carl", yes, so see "The Big Carl" is actually even worse than the double quarter pounder with cheese. Yes. So maybe the mayor's right. This is more about what the Golden Arches represent than what they serve.

(BEGIN VIDEO CLIP) BURNETT: Still OUTFRONT, the ""OutFront 5", a murder mystery.

UNIDENTIFIED MALE: You don't know where. You don't know why. You don't know how.

BURNETT: All this OUTFRONT in our second half.

(COMMERCIAL BREAK)

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

And tonight, the super rich surtax. President Obama on the road today pushing a 30 percent minimum tax on incomes over $1 million. Here's the math.

Taxing that group would bring in $41 billion in revenue a year, $380 billion over 10 years. You compare that to our current debt. You'll see that it's about 2.5 percent of the total.

President Obama's plan may be a good idea, but it won't be enough to fix the debt problem. We need a lot bigger solutions than that.

Number two, the Federal Reserve announced it plans to keep interest rates near zero through late 2014. About 18 months longer than first planned.

The depressed housing market and global financial worries are just a couple of reasons why the Fed decided to say it's going to be low, low, low for a long time.

But they lowered their expectation for unemployment rate between 8.2 percent and 8.5 percent by the end of the year. Right now, we're 8.5. If it drops to 8.2, that might be enough to get the president re-elected.

Number three, USDA announcing new rules for school lunches. This is trying to fight childhood obesity. The levels of sodium and fat are going to be cut. The amount of fruit and vegetables increased.

Trade groups, like the National Potato Council, lobbied against the measure, because of its attempt to reduce starchy foods like the potato.

The CEO of the National Potato Council tells us, "final rules fall short of giving schools flexibility in the breakfast program to meet nutritional goals within their constrained budgets."

Number four, Netflix is showing signs of a comeback, following last year's exodus of subscribers. It says its revenue went up to $876 million, better than expected at the end of the year. We looked at the fourth quarter report and said the video rental Web site actually got 600,000 new U.S. subscribers. It's pretty interesting. The screening services, they had lost a million subscribers last summer when they increased prices. All right. It's been 173 days since the U.S. lost its top credit rating. What are we doing to get it back?

Well, it was a good day for stocks. I guess take it where you can get it. The Fed's announcement sent the Dow higher by 81 points, not (INAUDIBLE) but something.

Well, fresh off the State of the Union address, President Obama is hitting the road, not wasting any time, taking his message to key swing states. Here's the road trip. He's traveling to Iowa, Nevada, Michigan, Colorado and Arizona. Yes, those are all battleground election states.

Over the next three days, those states have a total of 46 electoral votes. He landed in Arizona earlier today.

Jessica Yellin is there, just outside of Phoenix.

Jessica, good to see you. So, this is -- it seems an awful lot like a campaign trip.

Is that the goal?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, it's not officially a campaign trip, but it does feel that way. This gets him on the local news in five key states that he has to win in November, hopes to win, with a total of 48 electoral votes.

And I know you like numbers, so let me give you the math. The Obama team figures that they will win the Kerry states, the states that John Kerry already won back when he ran in 2004. So, that's 251 electoral votes. They just need to pick up 19 more votes to get to 270 and so, they're game is where can they get those extra 19 votes and these five battleground states, a combination of these five battleground states could get them over that hump. That's why he's visiting these states.

BURNETT: All right. And obviously a lot of talk about the super rich surtax proposal, the 30 percent for millionaires, he talked about last night. We had run the numbers on this. And where ever you come out politically, it doesn't raise a ton of money.

Do you get the feeling he's going to have more specific proposals on taxes or on loopholes to raise significantly more money?

YELLIN: He'll have more specific proposals so that he can talk detail, but not because they expect to raise more money, because the bottom line is they know, we know nothing's likely to get done on taxes this year in Congress.

This is fodder for the campaign. And the millionaire's tax is something that plays incredibly well with his audience and it plays to his message, which is that he has a vision for the middle class for the future that he wants to contrast with what the Republicans are proposing, which he argues provides less opportunity for the middle class and it's really about framing that message, Erin. BURNETT: All right. Well, Jessica, thank you very much. Appreciate it.

She'll be with the president this week.

Well, Mitt Romney and Newt Gingrich meantime in a dead heat in Florida for the Republican win there. They got less than a week until the primary.

Look at the new numbers. This is our poll tonight. And I mean, that's within the margin of error, as you can tell. Thirty-six percent for Mitt Romney, 34 percent for Newt Gingrich, Rick Santorum and Ron Paul rounding it up obviously, significantly lower.

Every vote matters in a race like this and this is amazing. In Florida, almost one in 10 registered Republicans has already cast a ballot. How? Well, early and absentee voting. Half the votes were cast before Gingrich won the South Carolina primary, in such a landslide, and before the debate.

So, how do these votes affect the race and who's going to have the momentum? This really could be the make or break.

John Avlon and Gloria Borger are OUTFRONT. Alfonso Aguilar is also with us, a conservative host on Univision Radio.

Good to see all of you. We appreciate it.

OK. Gloria, let me start with you. This is the numbers we got -- 179,000 absentee votes were cast last week. Romney was ahead of Newt in Florida by 25 points in the polls at that time. So, does that mean that's now the absentee votes went, that it's good for Romney? And is the enough to make a big difference in the final outcome?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, it's important and when you think Romney was ahead tremendously in the polls at the time that absentee ballots started being cast, and you think that Romney's got the money and organization to tell people to return their ballots, you've got to think that's good for Romney.

But early voting started the day of the South Carolina primary and you know that after Newt Gingrich won that and really whomped Romney, the momentum sort of swung the other way to Gingrich. So when people are early voting in a lot of counties around this state after South Carolina, they might think, oh, gee, Newt Gingrich is more electable than Romney and after all, that's what Republicans want. They want somebody who can beat Barack Obama.

So, it's really hard to gauge how that's going to turn out in the end, Erin.

BURNETT: Well, 11 percent of the Republican vote here Hispanic and obviously Latino vote always crucial in Florida, but really could be in a tight race.

Let me ask you about this, Alfonso, the vote, both of them, Newt, Mitt out trying to get Hispanics to vote for them. The new ABC/Univision poll shows Romney with the edge among Latino voters.

I mean, edge is the wrong way to describe this, OK? This is a big, big win for Romney, 35 to 20. But is this what you're hearing?

ALFONSO AGUILAR, EXEC. DIR., LATINO PARTNERSHIP FOR CONSERVATIVE PRINCIPLES: No. Not at all. Frankly, I think Gingrich has the edge with Latino voters. It's incredible, the attention that both campaigns, the Romney campaign and the Gingrich campaign, are paying to the Latino vote of registered Republicans, there are about 11 percent, so they could be decisive -- Latino voters can be decisive in a GOP primary. That's incredible.

But I think that Gingrich has the edge because of his rhetoric on immigration, he understand the Cuban and Puerto Rican communities, which are pretty big here in Florida and frankly, he's criticizing Romney for his rhetoric on immigration, which so far, most Latinos think that it's quite negative on immigration.

BURNETT: Interesting, John, because you've got Newt Gingrich and I talked to him last week, saying, yes, I would allow the most difficult and tough immigration laws in America to go ahead in Alabama and Arizona and he's all for that. But rhetorically, I wouldn't deport your grandmother. That's got to be helping him here, right?

JOHN AVLON, CNN CONTRIBUTOR: That's right. Look, I mean, you know, he's taken a political risk to back policies like comprehensive immigration reform, originally a Republican proposal back in Bush and McCain during the debates. Whereas Romney has constantly tacked right on illegal immigration, going back to 2008 when he talked a lot about sanctuary cities, trying to sort of gain points with the base hitting hard on that. That can come back to bite him big time in Florida.

You know, it's a big picture. It's a race between money and momentum. And some of the fault lines are the Hispanic community.

BURNETT: Right.

AVLON: You go back to the 2010 race, between Marco Rubio and Charlie Crist, those are some serious fault lines, and Marco Rubio's campaign manager is running Newt's Florida effort.

BURNETT: Gloria, Newt obviously is trying to capitalize on this, calling Romney anti-immigrant in an ad airing today, Spanish language radio ad. But what's interesting about that, my understanding is Marco Rubio took offense at that and Newt pulled it off the air.

BORGER: He did. I mean, you didn't want to get Marco Rubio upset. You know, he's pretty popular here in the state of Florida, not a good idea. What's happening with Romney's kind of interesting because he's -- sort of after being hard lined in South Carolina, he comes to Florida and he's sort of softening his edge saying for example, it would be fine with him if the DREAM Act applied to the children of people who have served in the military.

Well, that's a change in position and, gee, I wonder why. It's because you're in the state of Florida. But one other thing about Hispanic voters is that it's about the economy, also. And probably most importantly I think, like a lot of voters in this country, most voters in this country, it's about getting jobs and getting back to work and it's about that for them, too, in this state.

BURNETT: Which is interesting. We know obviously you've got tied for three in terms of underwater mortgages in this country, 44 percent. Florida has been crushed.

AVLON: Yes. I mean, it's still economy issue number one, but when you bear down on these fault lines, and you realize the fluidity of this race. You know, Mitt Romney was 25 points up over Newt Gingrich just a week ago.

BURNETT: Right.

AVLON: That is a significant slip. Even though it's a statistical tie right now and Romney's got some organization advantage, this is all very much in play, and you can't piecemeal put it together. It is the economy.

BURNETT: Alfonso, can I just ask you about the question about Mitt Romney and the Mexican link? Does that matter at all?

AGUILAR: Not at all. Not at all, because frankly, his rhetoric on immigration.

And I agree with Gloria that the number issue for Latinos is not immigration. It's unemployment. Let's remember that Latino unemployment right now is at 11.5 percent, which is much higher than the national average, but immigration still matters. The tone you use.

And frankly, the tone that Romney has been using is terrible. I think he's been ill-advised on the issue. He's basically saying that every single undocumented immigrant has to return, has to leave the country or self-deport. That to many is very offensive.

BURNETT: Self-deport is also a practice not really realistic, Gloria.

AGUILAR: Absolutely.

BORGER: Yes. That's right. And, Erin, here's what's interesting. John McCain four years ago beat Mitt Romney in this state with Hispanic voters by like 40 points, OK? Now, John McCain is supporting Mitt Romney, coming here to campaign for Mitt Romney.

But, of course, John McCain's position on immigration has shifted as well over the years, right? He's talking more about border enforcement than a pathway to citizenship. So, it will be interesting to see how McCain plays for Romney here in the state of Florida.

BURNETT: All right. Gloria Borger, thank you. Thank you, Alfonso. Thank you, John. Appreciate it. AGUILAR: Thank you.

BURNETT: And OUTFRONT next, four women found dead in a canal in Canada. Was it an accident or an honor killing? There are wiretaps and we have them for you.

And we're in Davos, Switzerland. The movers and shakers of the world are there. Partying probably at this moment, but supposedly, they did some work today and we have a lot more.

(COMMERCIAL BREAK)

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

And we begin tonight in Egypt. It's exactly one year after the start of the revolution that ousted longtime ruler Hosni Mubarak.

Tens of thousands of Egyptians returned to where it all began, Tahrir Square. Some celebrated the anniversary. Others protested the country's military leaders. It does look exactly how it looked a year ago.

David Ottaway spent four years as a bureau chief in Cairo and we asked him what Egyptians are worried about now.

(BEGIN VIDEO CLIP)

DAVID OTTAWAY, SENIOR SCHOLAR, THE WILSON CENTER: Egyptian's biggest concerns are the fast deteriorating economic situation and the continuing presence of the military at the helm of power. They realized their would-be revolution has not produced a better life, economic life for them, and that the new regime is just as repressive and authoritarian as the old one.

(END VIDEO CLIP)

BURNETT: All right. Now to Davos, Switzerland. Opening day of what's called the World Economic Forum. This is where government leaders, business elite from around the world go. It's a quaint town in the Alps, invitation only. Twenty-six hundred people go from 100 different countries. They spend $20,000 a person.

Richard Quest is among them. And I asked him what's going on.

(BEGIN VIDEO CLIP)

RICHARD QUEST, INTERNATIONAL BUSIENSS CORRESPONDENT: Erin, there are two issues here. The immediate crisis: the eurozone and global economic recovery. And then there's the bigger issue: the future of capitalism. Some here say it's dead or needs updating. Others people say there needs to be an entirely new concept for capitalism in the future -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thanks to Richard.

And now to Iran trying to stabilize its central bank and currency because of the increasing sanctions from the U.S. and other countries. Today, Iran said it's going to increase interest rates on deposits, trying to get Iranians to keep their money at home to prevent capital flight. Iran also says it's going to make it a lot harder to sell foreign money.

Karim Sadjadpour is an Iran expert at Carnegie. And we said what's really going on in the Iran economy, is it really bad enough to force them to give up nukes?

(BEGIN VIDEO CLIP)

KARIM SADJADPOUR, ASSOCIATE, THE CARNEGIE ENDOWMENT: The Iranian regime is facing unprecedented international pressure and a downward spiral in currency. Many people in Iran use the word "panic" to describe the current situation in Tehran. But the Iranian leadership has long shown itself willing to subject its population to economic hardship rather than compromise on its political and ideological aims.

(END VIDEO CLIP)

BURNETT: All right. Was it murder or a tragic accident?

Today, there were closing arguments in a case in Ontario, Canada, where prosecutors are accusing three Afghan family members of committing a horrific honor killing.

Here's a story: an Afghan man and one of his wives are accused of killing their three teenage daughters and the man's other wife. The girl's brother is also accused. The three girls and their stepmother were found in their car in a canal in Kingston, Ontario.

At first, it appeared to be an accidental drowning on the way home from vacation. But police were suspicious of the family story. And an investigation led prosecutors to charge the 59-year-old Mohammad Shafia, his wife Tooba Mohamed Yahya and their son Ahmed with first degree murder.

Each year, the United Nations says 5,000 women and girls are killed by members of their own families in honor killings.

Paula Newton has covered a lot of these cases. She is in Ottawa tonight with the story.

And, Paula, good to see you. It is just amazing to see this and hear about this story.

Why did prosecutors come to the conclusion that the girls' father and mother and brother had killed them?

PAULA NEWTON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, from the outside, Erin, it seemed that they just did not believe this family, didn't think they were acting like a family that was grieving, didn't think they called police in time. It just didn't add up. But they really took what was an extraordinary step here and that was to wiretap the family, crucially, in their own minivan. They got them to come back to the scene of the crime while they were looking at some of the details with police, they bugged their minivan. Explosive evidence from this according to the prosecution. They say it incriminates the entire family in terms of how the conversations went on.

Let's give you some of it, Erin. It is really hard to believe if this is what the prosecution is alleging.

But Mohammad Shafia, the patriarch of the family, is said to say, "I say to myself, you did well. Would they come back to life a hundred times, you do the same again."

And then, in alluding to the kind of rebellious act that is he found out about his daughters, they were dating Western boyfriends, they were dressing in a way that he didn't approve of. He said, "May the devil defecate on their graves. This is what a daughter should be? Would a daughter be such a whore?"

And you can imagine if you're the jury sitting in there and listening to this, and believe me there are hours of wiretap conversations, you're looking for explanations.

The other thing that doesn't add up, the damage to the other family car, that Lexus, what the prosecution say they did is that they tipped that family car with those four women inside it over in to an open canal and those women drowned.

BURNETT: And let me just ask you, I know they're saying that they were traveling on a family trip together, all of them, in two cars, right? So, that's where they said they would have pushed it.

And I believe, Paula, that also it appears that the daughters and the stepmother were beaten, right? I mean, that it looked like they perhaps had been beaten and unconscious and then put in the car.

NEWTON: Well, look. This is one of the -- this is contentious. A lot of what's going on here is circumstantial evidence. They're asking, where is the evidence that the women -- how these women died? Pathologists testified they had fresh bruises, at least three of the four victims. No way to explain.

And the defense is dismissing that, saying, look, if you were going to have the four women and you were going to try to kill them beforehand, these defendants have no time to do that and, they say, look, were these women just going to stand there being -- in the words of the defense -- like lambs to slaughter? No, that wouldn't have happened.

And yet the jury time and time again is listened to this little dance between prosecution and two of the defendants that took the stand and their stories the prosecution says they just don't ad up.

BURNETT: Paula, what would be the punishment if they are convicted?

NEWTON: Definitely life. We don't have the death penalty here in Canada, but definitely life in prison.

It's an interesting way they prosecuted this. The defense -- the prosecution has had all three defendants up there. The defendants have stayed together. Their stories, while contradictory, they're saying they're innocent. It isn't that one tried to break off from the other pleading to any kind of a lesser charge.

Erin, you can't help but be riveted by the details of this. These girls, beautiful, intelligent girls, and the kind of things they were saying to family members and social workers even beforehand, that they wanted out of this house.

BURNETT: All right. Paula, thank you very much.

And Paula is going to have more of those details on the story on honor killing tonight on "ANDERSON COOPER 360."

And Anderson's got a lot more like -- hello, Anderson.

ANDERSON COOPER, HOST, "A.C. 360": Hey, Erin, how's it going?

BURNETT: Great.

COOPER: Yes, we're following a number of stories tonight.

GOP presidential candidate Newt Gingrich continuing to adamantly deny he was ever a lobbyist for mortgage giant Freddie Mac. Now, a second contract released seems to raise more questions than some answers. Just what was his role at the firm that he got paid $1.7 million to do? We're keeping them honest tonight.

Plus, big promises from the president in his State of the Union speech last night, saying he'll go after mortgage-related fraud and help homeowners facing foreclosure. This isn't the first time we've heard these pledges and the results have been less than stellar. We're keeping them honest as well.

We'll talk with politics with comedian and political commentator Bill Maher. The self described liberal is quick to weigh in on the Republican field of candidates. But he's got plenty to say about the president, as well.

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

BURNETT: All right. Thank you very much. We'll see you in a few minutes, Anderson.

And next, last night, President Obama declared a war on unfair trade practices in China. But is China just too big to beat?

(COMMERCIAL BREAK) BURNETT: So, this week, China began to celebrate the Chinese lunar New Year. It's like Christmas, New Year's, Fourth of July all in one. It's 15 days.

It's celebrated with presents, parades and fireworks and a lantern festival supposedly helps pave the way for good luck and happiness in the New Year.

Now, according to the Chinese zodiac, the year 2012 is the year of the dragon -- which is apparently the luckiest of all the signs.

I was actually born during the year of the dragon so I got in to this year and looked at the numbers. This thing is big.

The lunar New Year in China is the world's largest human migration, bigger than the hajj in mecca. People in China make over 3 billion passenger trips during this lunar New Year holiday. China's trains carried 80.2 million passengers, 84 million people traveled by car on January 21st -- one day. That is a lot of people and there are going to be a lot more.

According to China's state news agency, because the year of the dragon is considered so lucky, China is actually expecting a 5 percent jump of the number of babies born this year. Women are trying to get pregnant before May 2nd. That's the last day to make sure your kid is still born a dragon. China is big and it's getting bigger.

Well, Obama and -- President Obama and the GOP candidates all say that the U.S. has to beat China. They're all allied at that point of view. But it seems like beat might be the wrong word.

Chinese people want cars. They want washing machines. They want what America has, the American Dream.

And we were thinking there might be a different way that might be worth thinking about this. If we focused on growing the world's economic pie, so not just trying to take back things China has -- there was a story today about how in the middle -- we needed more iPads, we wanted more iPads, and they go to the factory in China 2:00 a.m., they get everybody out of bed and they go and they make the iPads. And it doesn't seem like that sort of thing is going to happen here.

But there are other things America can do and make and create that will make America richer and the world economic pie bigger. And that means China can keep having a bigger and bigger and bigger slice. There's just no way to stop it.

But we can also make America's slice bigger and bigger and bigger, too. Maybe there is a way to have two superpowers.

Well, tomorrow, we are in Jacksonville, Florida, ahead of CNN's Republican presidential debate. It's the final debate before the state's crucial primary. A lot on the line tomorrow night. We are excited. We'll be in Jacks tomorrow OUTFRONT.

In the meantime, though, "ANDERSON COOPER 360" starts right now.