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ERIN BURNETT OUTFRONT

Follow the Money; Egyptian Riots; Interview with Representative Peter King; Interview with Senator Casey

Aired February 1, 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: Tonight, Super PACs unmasked. Who donated and how much? And President Obama unveiling a new housing plan. Why the Republicans blasted it and dozens killed in Egypt over a soccer game, literally throwing rocks at each other. WE go there live.

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett and OUTFRONT tonight, exposed Super PACs drop the fig leaf. After months of being in the dark about whose bankrolling the candidates, we finally have some answers. Now, you know that the Super PACs are groups that can raise unlimited money and you know they're major players this election season, but get ready for this.

The Federal Election Commission tells OUTFRONT that this election might cost $11 billion, twice as much as 2008. And that jump thanks in no small part to Super PACs. There are more than 300 of them already. So, today, we poured through hundreds of pages of Super PAC documents, and that was really only for a few of the Super PACs. And here's what we can tell you.

The pro Romney Super PAC called Restore our Future raised nearly $30 million last year. Now, there were a group of donors that gave a million dollars each and one of them is hedge fund manager Julian Robertson. He's been a Mitt Romney fan since the last election and he told me that Mitt is quote "the smartest guy and extremely decent". OUTFRONT "Strike Team" member Marc Andreessen (ph) was also on Romney's donor list.

The Facebook board member told me today quote, "I think he gets it with respect to the economy in a way that the others don't." The Super PAC for Newt Gingrich, Winning our Future raked in $2 million. Now, because his single biggest donor, casino magnet Sheldon Adelson and his wife didn't give their $10 million until so recently, that money didn't count. And Adelson didn't talk to me today, but I have talked to him about Newt Gingrich.

In October, when he was already identified as a Newt supporter, he told me in this interview in Las Vegas that he liked all the Republican candidates. And here's the scary thing. He may not have changed his mind. He may still like them all because Sheldon Adelson is worth $21.5 billion. We did the math; $10 million to Sheldon Adelson is the same as $45 to the average American family. No joke, just a regular campaign contribution for Sheldon Adelson. President Obama's Super PAC hasn't even really started raising money yet, but it still brought in $4.4 million. One of his biggest donors was Director Steven Spielberg who gave $100,000. And then there's the conservative American Crossroads. It raised about 18 million last year, but it's non-profit ARM, Crossroads GPS, raised a heck of a lot more, 33 million. And here's where a Super PAC loophole comes in.

In theory, Crossroads GPS could give 49 percent of its 33 million to its Super PAC boss, American Crossroads and then never disclose the donors, never. We've been talking about this inappropriately loophole available to any super PAC for weeks. Goes like this. A donor gives to the non-profit ARM. Non-profit ARM in turn usually gives that money to the Super PAC, which spends it on campaign efforts including attack ads.

Now, President Obama's Super PAC has a charitable ARM, too, and we're told Romney's Super PAC can set one up at any time if they choose to. They don't yet have one and today Democratic senators said they're going to hold hearings, forcing donors to testify to try and close the loophole, Chuck Schumer leading that charge. Andy Serwer is with is, the managing editor of "Fortune". Ken Vogel is with "Politico". He's been covering Super PACs all the way through and thanks so much to both of you for being with us.

UNIDENTIFIED MALE: A pleasure.

BURNETT: So Andy Serwer, we found a lot out today --

UNIDENTIFIED MALE: Right.

BURNETT: -- about who likes whom. What stood out to you in terms of these donors and the amounts?

ANDY SERWER, FORTUNE MANAGING EDITOR: Well first of all, if campaign finance reform was supposed to limit the influence anyone can have on an election it has clearly failed. And I thought that was an excellent report. I think it's a very diverse group of people, very, very wealthy. Most of these people are billionaires and we can tick through some of them. They've been involved in politics, often Republican politics, for years and years.

BURNETT: Right. You had some of the people who had given to some of the Swiftboat ads last time around, now giving to Crossroads or to Romney --

SERWER: Right. Harold Simmons may be the richest guy in Texas, a billionaire, runs an industrial group of companies, been giving to Republican candidates for years and years and years. And Rick Perry, he supported him initially.

BURNETT: Ken, what stood out to you in terms of people who are doubling down or new names perhaps that you weren't expecting?

KEN VOGEL, POLITICO: Actually one of the things that stood out to me most, Erin, was the lack of a response on the Democratic side to this type of fundraising that we're hearing about on the Republican side. Democrats have been warning about this for months and saying that if they don't start raising the same amounts of money as the Super PACs and 501C(4) non-profit groups supporting President Obama and House and Senate Democrats, then they're going to get absolutely crushed in 2012.

Well those messages didn't sink in with the big donors who have the ability to write the seven figure checks. We saw only $19 million come into the six Super PACs and 501C(4) set up to support Democrats as kind of an unofficial network. And that compares to the 51 billion that American Crossroads and Crossroads GPS raised combined just last year. That's a real disheartening statistic for Democrats. They were hoping that some of the big, big donors would come off the sidelines like George Soros who only gave $100,000 to one of the Super PACs. Like you said with Harold Simmons that -- or Sheldon Adelson, rather, that's like $40 to him, $100,000 to George Soros is like a few pennies.

BURNETT: That was one of the most bizarre things actually was running those numbers on Sheldon Adelson.

SERWER: You know it's interesting because I think business people love Mitt Romney, especially big business people. I have here an invitation to a fund-raiser Mitt did on Wall Street about two weeks ago and you can see here, Woody Johnson from the New York Jets, Jimmy Lee from JPMorgan Chase, Julian Robertson you mentioned, Steve Schwarzman from Blackstone.

Some business people especially on Wall Street, Erin, are switching over from Obama to Mitt Romney. Stephen Ross, who is the CEO of Related Companies, a big New York City real estate concern was characterized as an independent. Now, he's saying he's supporting Mitt Romney. He also owns the Miami Dolphins, so big money there as well.

BURNETT: That's very interesting that you're seeing the switch. I mean Ken, is that something that is concerning or should be concerning the president? That a lot of the big money donors who gave to Obama last time -- I mean they don't like to talk about how they need big money donors, but they do and they get them that they may not get them this time?

VOGEL: Yes, absolutely and it's really concerning to Democrats who for years have tried to build a relationship with the business community. This is something that Bill Clinton did very well, sort of donor maintenance is what they call it. They would go up, they would hear out the concerns of some of these folks. (INAUDIBLE) Bill Clinton would invite some of these people into the White House. That of course drew some criticism, but a lot of the Democratic fund- raisers say Obama has done more to burn the bridges that Bill Clinton built in just two years than Bill Clinton did to build these bridges in eight years, so they are very worried about it. And it's forcing them to rely more on Hollywood money, which we see them courting in the form of Steven Spielberg --

BURNETT: Right. VOGEL: -- Steve Bing who also did not give a lot of money to the Super PACs in the most recent reports and that was disappointing and to a lesser extent, some of the new blood on Wall Street as well as some of the Silicon Valley +money that you see Democrats really relying on because a lot of these Wall Street types who had given to Democrats in the past just aren't enamored with President Obama and aren't responding to the pitches from these Democratic Super PACs.

SERWER: Right. They do see him, these wealthy Democrats, as being -- business people, as being divisive and engaging in class warfare. You're hearing this now. He does have some supporters. Democrats can always go back to one of their favorite groups of wealthy people which is trial lawyers. Those people remain resolutely Democrats for the most part.

BURNETT: No tort reform.

SERWER: Yes, that's right.

BURNETT: Right. Ken, what about this loophole though? Is this going to be closed? Because this is one of those things I could see could benefit both sides, but it truly just seems ridiculous.

VOGEL: That's right. And for the first time we actually saw the Democrats who have complained most loudly about this, take advantage of that loophole. They transferred $215,000 from Priorities USA, which is a 501C(4) non-disclosing secret donor group that is backing President Obama to Priorities USA Action, which is a Super PAC supporting President Obama. I talked to the folks there. They said this was just for administration -- administrative expenses. Nonetheless, it shows how this type of loophole could work and practice. As to whether it's going to be shut down, I just don't see any political will on Capitol Hill for any type of significant campaign finance reform, certainly none that would be in effect in time to influence the type of money flooding into the 2012 presidential election.

BURNETT: All right. Thanks very much to both of you. We appreciate it.

(CROSSTALK)

BURNETT: And Matt, I think -- Ken bottom line is why Americans are so frustrated with Congress. This is just something that just makes no sense and perhaps should change.

BURNETT: OK, next, what to make of reports that Iran is planning an attack on American soil. Peter King is chairman of the Homeland Security Committee and he's OUTFRONT next.

And then who strangled the woman in Michigan found dead in the back of her Mercedes? Her husband speaks for the first time tonight. And will Congress get its act together, close a loophole and make a deal on the payroll tax? We've got a new word to introduce for you in Washington.

(COMMERCIAL BREAK)

BURNETT: Tonight in Egypt, at least 73 people are dead, 1,000 injured after fans of rival soccer teams rioted in the stadium in what is described as one of the worst incidents of sports violence in Egypt's history. Witnesses say protesters bashed each other to death with rocks and chairs. A fire also broke out as authorities were responding to the violence. It's hard to imagine this. Ben Wedeman has been following the story for us from Cairo. Ben can you tell us exactly what happened and what caused this? These images are barbarian and brutal.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: What we understand is when the game ended and the Port Said was -- team was victorious over the Cairo team, the Port Said fans poured into the field and started to attack the Cairo players as well as the fans. And what we see from the video is that there was a very inadequate security presence at this game. Normally, there are lots of riot police, lots of security at these games to prevent this exact kind of eventuality.

And what we're hearing from what many of the Cairo fans is that the security just stood back, did very little if anything at all to prevent this violence from happening. And what's important to keep in mind, Erin, is that many of the Cairo fans are members of what are known as the Ultras (ph), a group of hard core fans who follow the team around everywhere, but who traditionally have a very hostile relationship with the police. Now these fans are saying that what happened was this was the revenge of the police.

They just stood back and let the Port Said fans go after them with rocks, with sticks and stones. And in some cases, we're told there were also some firearms being used against these fans. Which tells you that law and order situation in Egypt is not very good at the moment and it's played out in the stadium in Port Said this evening -- Erin.

BURNETT: The images of the rocks and what happens to a country with no government, horrible to just imagine. Thanks so much to Ben Wedeman covering that story from Cairo, obviously just down the road from Port Said.

Well the Obama administration's top intelligence official has a warning for America. That senior Iranian leaders perhaps as high up as the supreme leader, Ali Khamenei, are now more willing to carry out attacks on U.S. soil. The director of National Intelligence, James Clapper, says that Iranian officials are reacting to perceived American threats against their country.

His comments come as tensions between the U.S. and Iran are higher than it seems like they have been in decades. Joining us now chairman of the Homeland Security Committee, Congressman Peter King. Congressman King thanks, always good to talk to you.

REP. PETER KING (R), NEW YORK: Erin, thank you.

BURNETT: Let me just ask you what you read into this. Obviously, of course, this comes on the heels of the U.S. government saying last fall that certain people in the Iranian government were trying to kill the ambassador of Saudi Arabia to the United States and American civilians in Washington, D.C.

KING: Well General Clapper is saying that the plot to kill the Saudi ambassador, to blow up the restaurant in Washington, that signaled an intention by Iran to cross what we call the red line and not carry out attacks in the United States. Since then, there's been other analysis by the CIA and other intelligence agencies which caused General Clapper to believe that now the Iranians consider an attack upon the United States is something that's possible, that's plausible.

In the past it was something we believed they would not consider. Now, they do have forces, if not in place, certainly they have forces around the world with Hezbollah, Quds force, others which we thought would be used in the event of a war. We didn't think they would launch an attack here first. But based on again the observation, the intelligence, that's being picked up, General Clapper believes and I agree with him, that Iran is now willing to consider launching an attack against the U.S. and would have the capability.

BURNETT: What kind of attack? I mean is there any knowledge of what sorts of attacks they're considering? I mean are these terrorist attacks, bombing on a subway, blowing up airplanes or is this just sort of a feeling that they might do something, but there's no sense of what or when?

KING: My understanding is that the belief is that Iran has made the decision that it would consider making attacks in the United States. I'm not aware of any specific attacks they have in mind, but I think we would have to look upon the standard type of terrorist attacks. Attacking mass transit, which would be primarily subways, commuter lines, shopping centers, icons, you know buildings that have symbolic value to the United States. So again, the fact that they're willing to try to kill the Saudi ambassador, try to kill the Saudi ambassador and blow up an American restaurant where you could have had hundreds of Americans there, shows that they are willing to cross that line.

BURNETT: I'm just curious does it though? I mean so much of these situations seem to be rhetoric and you can talk yourself into a frenzy and then all of a sudden end up in a war. Are you worried that that might be what's happening here? I mean certainly Iran would know if they did that. The repercussions would be absolutely horrendous for the country of Iran.

KING: Yes and that's why we believed up until now that Iran would not try that. The fact is they were willing to attempt it with the Saudi ambassador and as far as it getting out of control, I certainly don't think the people like General Petraeus and General Clapper remember, this is the Obama administration, so I have no reason to be defending them (INAUDIBLE) perspective, but I strongly believe that people such as General Clapper, General Petraeus, FBI Director Mueller, they would not be put into any kind of a frenzy. They will act very logically and rationally. BURNETT: There's also a leaked NATO report today that I wanted to ask you about, sir, saying Pakistan has been helping the Taliban kill American troops. Obviously, this comes on the heels of the United States saying that there are members of the Pakistani government who have been assisting the Taliban for quite some time. But this is a very explicit thing. Helping to kill American troops. Should we end the relationship with Pakistan? Is it really something that the United States must stick with?

KING: Well first of all, I think the report is not a conclusion. What it does is it states what currently has been learned from interviews and interrogations, so it may be accurate, it may not be. But let's assume that it is. I think there has been a really a market decline over the last 18 months or two years in our relationship with Pakistan especially the ISI and --

BURNETT: Their intelligence services, yes.

KING: Right. (INAUDIBLE) originally that was being cleaned out. That he was attempting to root out Islamists. Instead, it seems that it's filled with Islamists, and so we have to assume right now, not assume, we know that Pakistan in a number of ways is working against us. As far as severing the relationship, it's still to some extent an important relationship. They are a nuclear power. it does provide us the opportunity to go after the Taliban, but it's a very mixed blessing and I would say in the past it was 70-30 in our favor for the last year or so, I would say it's 40 or 60 against us and we're going to have to keep putting pressure on Pakistan and ultimately make the decision whether or not it's a relationship worth keeping.

BURNETT: All right, Congressman King, thank you very much. As always appreciate your being with us.

KING: Erin, thank you. It's always great. Thank you very much.

BURNETT: (INAUDIBLE) viewers there's one thing that surprised me, encroaching me was some young, ambitious men that they said it wasn't worth staying in Pakistan anymore. That they would want to leave, so the people who can most change it not wanting to even stay.

President Obama's plan to solve the housing crisis, Republicans don't like it. Does it add up? And then Facebook, it's a real beast. OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: All right Facebook finally did it. They filed the paperwork to go public. And what that means is you can get your own share of the world's biggest social network company. Well, you might if you're really lucky because you're going to have to compete with a whole lot of people who want that share but you get the point. And the documents gave the first look ever at Facebook's numbers and there are a lot of them.

You know 800 million people use Facebook as we know. The game company Zynga accounted for 12 percent of Facebook's revenue. In 2013, Mark Zuckerberg's salary will be just $1, but a stake in Facebook worth more than $16 billion. Now a lot of that money probably should go to pet products especially once it goes public and he has all the money in hand because last time I saw Mark, his dog Beast, that's its name, went number two all over his condo, so there's all ,you know, spend money, clean up after Beast.

Facebook hopes to raise $5 billion with the IPO. Now that is a lot more than the 1.7 billion that Google raised when it went public in 2004. And that brings us to tonight's number, 380 million. That is the dollar amount that 16 Google investors paid the state of California in taxes two years after Google went public. That money paid for roads, classrooms and the salaries of more than 3,000 state workers, but before California's lawmakers get too excited, it should be noted that even after a company goes public, you don't sell the shares right away. So California, don't spend it yet. You might not see any extra Facebook tax money for a couple of years, but money, there will be from those investors.

And next, can Congress finally do a deal to extend the payroll tax cut? The day is upon us. It's happening again.

And a Michigan mother found strangled in the back of her Mercedes. Now a man coming forward and saying he was involved in the crime.

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about, where we focus on our own reporting, do the work and find the "OutFront 5". First tonight, Super PAC donors revealed. The fig leaf is gone and after months of being in the dark, we can see everything. We went through the hundreds of pages of documents and we can tell you pro Romney Super PAC, $130 million. There were several donations of a million dollars, three of those from hedge fund operators.

Some of those are former Obama donors. The pro Obama Super PAC, meantime, hasn't fully gone into fundraising money, but it $4.4 million. One major donor there, Steven Spielberg. The director gave $100,000. And just today Senate Democrats announced a plan to hold hearings on Super PACs.

Number two, a teenage girl injured in a crash that killed her family has a zero chance of being deported. That's what an immigration official told CNN. Fifteen-year-old Lidiane Carmo who was born in Brazil is in the country illegally, according to her extended family. Parents and sister died during this weekend's pile of crash on I-75 in which 11 people died.

Lidiane's family also told us that Florida's Governor Rick Scott has offered to take care of her medical expenses.

Number three: American Airlines today announcing he's going to layoff 13,000 employees as he comes out of bankruptcy. The airline also said it lost $1 billion in December alone. That's more than it lost in the first nine month of last year and that's terrible because December is a huge travel month.

American believes it will save $2 billion through layoffs, restructures and grounding planes. And that's a bad economic headline when you look at layoffs.

We have more mixed news on the U.S. economy. There is some good news. Manufacturing and construction expanded.

But the not so good was on hiring. Private sector hiring only had 170,000 jobs added in January and, obviously, you're going to see things like American now hitting the numbers all ahead of Friday's important monthly job report. Economists tell OUTFRONT they're looking for the unemployment rate to inch up to 8.6 percent.

Well, it has been 180 days since America lost its top credit rating. What are we doing to get it back?

Some people believe you've got to spend to get the economy to grow, to get it back. Others think you can only cut.

But there's one thing that we're not doing a lot of and that is paying for things. There's a new word. It's called pay-for. Yes, pay-for is a new word in Washington. Maybe they needed a new word because we don't usually pay for anymore down there. I don't know. But it is all the rage.

And as the clock runs down on Congress to extend the payroll tax cut, both parties agreed to extend the cuts. They all agree on that, just like they did back in December actually. But they can't agree on the pay-for.

Sound familiar? Yes, this is exactly what we saw in December and we got that bizarre little thing that ended with two-month deal. So, the can was kicked down the road, but guess what? We're almost there again.

So, we're going to be talking about this and figuring out if they can get it done. What does it meant to us?

It means a lot to a lot of people, the average American can save between $700 to $2,300 a year with the current payroll tax cuts. That money will go back to the government if the deal isn't reached. And a payroll tax cut actually funds Social Security. So, it doesn't go to nothing.

Senator Bob Casey is in the middle of the negotiations over the tax cut and he's OUTFRONT with us tonight.

Senator Casey, good to see you. I appreciate it.

SEN. BOB CASEY (D), PENNSYLVANIA: Erin, thank you.

BURNETT: All right. Let's start with the good news. You guys all agree you want to extend this, right?

CASEY: Right. Yes, we do. And I think there's great consensus on that because I think people on both parties know what's at stake. This is a tax cut that will affect 160 million Americans. We've got to get it done. We're not there yet, but we're all working hard to get this done.

BURNETT: OK. So, you know, we try to be light hearted sometimes about things that depress us all, like this new pay-for word. This was the problem in December. Everybody agrees this is a good thing. I mean, there are few who will argue against the payroll tax cut extension, but you only get two months because nobody could agree how to pay for it.

Is that going to change?

CASEY: Sure, that was difficult then. It will still be a difficult task to get a bipartisan agreement, but we've got to do it. But this is one of the ways and there aren't many, as you know. This is one of the ways to jump-start the economy, to keep the recovery moving, so we're creating private sector jobs and giving people the opportunity to have just a couple more bucks in their pocket. For the whole year, it's about 1,000 bucks.

But even for the next 10 months, in a state like Pennsylvania, it's hundreds of dollars that people are depending up.

So we've got to come together and work together to get a bipartisan agreement. I think we can.

BURNETT: It costs $160 billion. Do you believe that it has to be paid for?

CASEY: Well, I think that would be preferable because we know that just to pay for the rest of the 10 months, it will be about -- it's about a $10 billion per month pay-for. So, there's about a hundred billion dollars we have to come up with.

Now, you know some of the history here. Way back in December, I had two different versions of the payroll tax cut bill. One of them, or both of them, I should say, had a surcharge on incomes above a million. That would have paid for part of it. But the Republicans rejected that.

I think there are going to be a lot of options on the table. We've got to keep working together to try to find the pay-for because one of the reasons we're at this point right now is because everyone believes and this is bipartisan, that this is -- this is a good way to keep the economy moving.

BURNETT: What other pay-fors are there? Because -- I'm sorry, I keep laughing at the word. Now, I'm using it like it's a normal word. I think there's something a little ridiculous about it.

But nonetheless, the millionaire surtax. You bring that up. A lot of people like it. It might be a great idea.

But every time I hear it, everyone's using a millionaire's surtax to pay for something else, and there'd be like 20 surtaxes paying for 20 different things. So, I mean, I'm just getting at the point, is that just a political thing to say or is that realistic? And if not, what's another pay-for?

CASEY: No. Here's why I think it's a reasonable way to pay for at least a portion of it.

Number one is it's very focused and specific. This isn't just getting revenue and putting it in some agency or some program. It's having a small number of Americans by comparison pay for, or help pay for a tax cut for 160 million Americans, 6.5 million of those in Pennsylvania. That's why I think it's reasonable.

But if that doesn't work, if we can't get an agreement on that, we have to figure out other ways to do this. But I think we can.

BURNETT: Would you cut spending?

CASEY: Well, look, as part of this, we've got to also do -- we've got to reach an agreement on unemployment insurance. We've got to reach an agreement on a fixed, the so-called doctor's fix, so that doctors don't have a huge increase in their Medicare rates that will affect access to current patients.

So, we've got three or four big assignments here and part of that's going to be making sure we're doing everything possible to stay focused on what's best for families. And I think that you know from covering the last year, we did a lot of cutting in 2011. We can cut some more.

I'm not sure in this particular, on this particular agreement for these three items whether there will be cuts, but we should consider everything to reach a point where we can get a bipartisan agreement.

BURNETT: We cut a lot of defense, but there's a lot more we could do.

All right. Well, thank you very much, Senator. Appreciate you taking the time.

CASEY: Thank you, Erin.

BURNETT: And, viewers, please let us know. Pay-fors, suggest them. We want to hear some pay-fors, and not little piddly pay-fors, big pay-fors.

OK. Middle class Americans are most affected by this payroll tax cut extension. That's why economists think it worked. That's why it could be a really great thing and there's pretty much no one who would say we shouldn't do it.

Middle class family has a median household income of about $49,000 according to the U.S. Census Bureau. And the middle class makes up about 50 percent of the American population.

But this is really amazing: 90 percent of Americans identify themselves as middle class even though they technically don't fall into that income range -- whether it's perception, whether it's a sense of middle class values that so defines this country, the middle class vote is the ones that all the candidates are courting.

(BEGIN VIDEO CLIPS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a make or break moment for the middle class.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Are the dealing being cut on behalf of huge institutions and very rich people at the expense of the American middle class?

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: That's just unfortunately a situation where we see the middle of America, middle income Americans, you know, that center, if you will, of America is hallowing out.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: We have a government of special interests now. They run things. Middle class is shrinking.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My campaign is focused on middle income Americans.

(END VIDEO CLIPS)

BURNETT: They all agree on that.

OUTFRONT now: John Avlon, Reihan Salam and Jamal Simmons.

Hey, guys, you all agree.

JOHN AVLON, CNN CONTRIBUTOR: Yes.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Good morning.

BURNETT: OK. All right. So, let me start with you, John Avlon, on this issue though that I think actually is an amazing thing, and perhaps a good thing. Ninety percent of Americans feel they're middle class, which I guess on some level hopefully speaks to the feeling of hard work and dedication and equal opportunity that people think defines America.

AVLON: I think that's exactly right. It's about middle class values. It's about the sense that we're all in this together and there's essentially a sort of modesty and meritocracy that mobilizes America.

BURNETT: Well said.

AVLON: And here's -- I mean, the big thing politically. I mean, elections are won in America by the candidate who connects with moderates and the middle class. And what was fascinating about Mitt Romney today, for all his stumbles about how he allegedly doesn't care about the very poor, what he was really doing us unveiling the fact that his strategy is going to be all about the middle class. Guess what? Just like Barack Obama. He has accepted essentially Barack Obama's terms of debate. That's what this election is going to be about, a war for the middle class.

SIMMONS: It's up, John Avlon. It's up.

BURNETT: Go ahead.

SIMMONS: What the president always says, which is that old Mario Cuomo line, I don't care about the middle class and those who are trying desperately to get into the middle class. And I think that's the part that Americans who are compassionate people want to hear from their president. They think people who are being left behind ought to be given a ladder up.

BURNETT: Let's listen to what you're both, I believe, referring to, which was Mitt Romney with Soledad O'Brien here on CNN this morning.

(BEGIN VIDEO CLIP)

ROMNEY: I'm not concerned about the very poor. We have a safety net there. If it needs repair, I'll fix it.

I'm not concerned about the very rich. They're doing just fine.

I'm concerned about the very heart of America, the 90 percent, 95 percent of Americans who right now are struggling and I'll continue to take that message across the nation.

(END VIDEO CLIP)

REIHAN SALAM, THE DAILY: Had he just not said the first part, "I'm not worried about the rich, they're doing just fine. I care about the middle class." That would have been a home run. It would have made a ton of sense.

What Mitt Romney has to do, attacks some business or senseless. We care about wage growth and income growth for everyone in this country. And I have the strategy for how we achieve that again.

That actually makes sense. It connects with his record. It's something he could talk about in a compelling way.

Instead, he begun by -- I don't care -- I'll fix the safety net for them if I must because I'm a robot, and I'm going to fix, but I do not care about them, in -- it's ridiculous. It's a distraction.

(CROSSTALK)

AVLON: The Romney robot has reappeared. And this is a real problem. This is a significant gaffe, and it's a gaffe because it deepens established narratives, the sense that he is the Mr. 1 percent or Mr. 0.1 percent.

SALAM: Exactly. AVLON: And problem is also, there's a credibility gap across the board with politicians. You know, middle class Americans have been squeezed for decades. They haven't been seeing real income growth at a time the super rich growing. They have been squeezed and squeezed and squeezed, they feel like they're working harder for less and that's why they're in play. That's why President Obama is trying to position himself as defender of the middle class of this election.

BURNETT: And interesting, Jamal, middle class Americans can look and frankly say, under different administration, different parties, they haven't seen that wage growth. So, in a sense, they should be open to either side to win, right?

SIMMONS: Well, middle class is certainly going to be open, but look at what happened in the 1990s. I think we did see wage growth, we did see employment growth. All that was under a Democratic president.

And the way the Republicans mark the Obama administration, they try to count from January 20th when he was inaugurated until today. But the reality is, the first amount of his program didn't get implemented for about two or three months after he got into office. You can't really start looking at who lost their job and the housing problems that occurred in the first three months because those are still part of the Bush economic program.

(CROSSTALK)

SIMMONS: It's a tough argument to make politically, but it actually is right on a policy basis.

BURNETT: OK. I know that there are, you know, depending on how you stand politically, one can talk about the numbers and start the dates and you have a fair point, Jamal. But I don't want to go there.

I want to go there on the wage growth issue because that is something we haven't seen under anybody. You really can't debate that. So, that is a real issue in this county that frankly has a whole lot to do with the rise of China and not very much to do with who's in the White House.

SALAM: The big part of it is also the job growth that we saw over the last decade was coming in the public sector. It was coming in health care jobs, jobs that are subsidized by taxpayers. That is a huge structural problem that Romney can speak to because he understands private sector.

AVLON: That's an important element of what's happened in the past decade, but the real issue is this. This is why it feels like such an existential crisis for America, because when the middle class is strong, our country's strong. When the middle class is weak, our country's weak.

And what the question really, where the big debate right now is whether government has a role in strengthening the middle class, or whether or not that's about private sector economic growth. That's one of the big debates playing out right now between the two things.

BURNETT: I want to play one more sound bite. Hold on, Jamal, one second because I want to get this in. I want to give you a chance to react to it. Talking about winning over the middle class has a lot to do with the biggest issue in this country still -- housing.

President has a new plan, rolled it out, grand deal for housing today. Here he is.

(BEGIN VIDEO CLIP)

OBAMA: And government certainly can't fix the entire problem on its own. But it is wrong for anybody to suggest that the only option for struggling reasonable homeowner is to sit and wait for the housing market to hit bottom. I refuse to accept that and so do the American people.

(END VIDEO CLIP)

BURNETT: Romney has said repeatedly is that he thinks that the market needs to get to this point, work its way through. Interesting, John, CEO of Lennar, these are the big homebuilders, that were asking for government assistance, are now starting to say the same thing.

AVLON: Yes. But it's a question about whether it's good policy and good politics.

BURNETT: Right. What do you think?

AVLON: Look, I mean, I do think the president playing off on this gives people a sense of hope. Remember, Bill Clinton was able to really lead America out of a recession in part by saying he was going to focus like a laser beam on the forgotten American middle class. That was the hallmark of his presidency and his policies. And it turned out to be good politics.

That's what President Obama's trying to tap into here.

BURNETT: All right. Thanks to all three. We appreciate it.

SIMMONS: Thank you.

BURNETT: All right. Let's check in with Anderson.

Anderson, what's coming up on "A.C. 360"?

ANDERSON COOPER, "A.C. 360": We're keeping them honest tonight, digging deeper on a story that we found unthinkable, really from the start -- the pardoning of former Mississippi Governor Haley Barbour of 200 people, including these four convicted killers. Now, Governor Barbour isn't returning our phone call. But tonight, we'll speak with a shooting survivor, a man who now lives in fear.

Also tonight, what is Newt Gingrich need to do to stay in the race? Well, some people he needs help. He may have gotten it today from his opponent. Ari Fleischer and James Carville join me for context to Mitt Romney's comments about not being concerned about the very poor.

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

BURNETT: All right. Anderson, thanks very much. We're looking forward to that.

Next, has there been a break in the case of the woman in Michigan found strangled to death in the back of her car? Today, police question a man who claims he helped commit the crime.

(COMMERCIAL BREAK)

BURNETT: There are allegations of financial troubles, another woman and a hit man for hire now surrounding the death of 56-year-ld Jane Bashara. The Gross Pointe Park woman was found strangled to death on the backseat of her Mercedes on January 25th in Detroit. Investigators say Bashara may have been killed by a paid accomplice. So far, though, no charges have been filed.

Bob Bashara has been questioned in his wife's death. He denies any involvement. And earlier today, for the first time he spoke, he called his wife's death a tragedy and thanked his supporters.

(BEGIN VIDEO CLIP)

BOB BASHARA, HUSBAND: This horrific event, I ask for your continued prayers, your support and respect of our privacy as we deal with this heartbreak and try to cope. Thank you very much.

REPORTER: Bob, what do you have to say about this (INAUDIBLE) guy who says that he was an accomplice --

BASHARA: I have nothing to say.

(END VIDEO CLIP)

BURNETT: And that was literally all that he did say right there.

Paul Callan is a criminal defense attorney who has defended numerous high profile cases, Joanna Greenwald is a former prosecutor and defense attorney. And they're both OUTFRONT tonight.

All right. Great to see both of you.

Joanna, welcome to the show. Great to see you.

So, let's start with this accomplice. I mean, the other day when we talked about this story, all we knew was that this woman was found dead and her husband claimed no involvement. Now, all of a sudden, financial troubles, hitman, an affair, it's gotten a lot more complicated in terms of the allegations.

An accomplice walked in to police headquarters and said he was he was hired by the husband to kill the wife for $2,000. Is he credible? JOANNA GREENWALD, FORMER PROSECUTOR: Well, that's a problem. But he can be credible because what he doesn't have a motive as far as -- he had no relationship. And the only reason he would do it is for money, for the money that he allegedly was paid.

He didn't do anything else. He didn't take anything from any cars. He didn't do anything as far as -- he left the car. He didn't steal anything from the home.

And the interesting thing is, is that you need corroborating evidence to show that someone is an accomplice. And we do corroborating evidence, which are phone calls from Bashara to this gentleman.

BURNETT: So, we got phone calls linking these two individuals.

GREENWALD: Yes, we do.

BURNETT: The accomplice was supposedly sort of a drifter-like character is how he's been described.

GREENWALD: That's correct.

BURNETT: What do you think, Paul? Two thousand dollars to kill someone?

GREENWALD: Hey, it's a lot of money.

BURNETT: Yes.

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, you know, listen, I don't know what we have in the case. I mean, I've read the newspaper accounts, and this case is as shaky as any case I've ever seen.

Let's talk about the hitman --

BURNETT: The case against Bob Bashara and the accomplice as well.

CALLAN: Totally shaky, OK? First of all, this hit -- the so- called hitman, his story is that the murder takes place in the garage of Bashara's home when Bashara is trying to hire him as a hit man.

So, let me get this straight. I'm hiring -- I'm hiring the hitman and my wife shows up. So, I guess, I'll strangle her myself while the hitman watches.

The hitman turns out to be homeless. He's squatting in an apartment someplace in Michigan. The financial motive is -- guess what? That there is foreclosure.

BURNETT: Two thousand dollars mean a lot to him.

CALLAN: No, no, the motive against Bashara is that he had financial troubles, they are in foreclosure. Guess what? Third largest foreclosure rate in America -- Michigan. A hundred thirty-six thousand filings in Michigan last year foreclosure.

BURNETT: So?

CALLAN: I would say we have 136,000 suspects if that's the reason you kill your wife.

GREENWALD: No, maybe he actually has financial problems, has a girlfriend and says, hey, do we know anything about life insurance? Do we have a problem with that? Maybe we do.

I think that he -- if anyone has a motive, he definitely does. And that he found someone who is an easy target to use. He used him, he had a connection to him because he was a prior tenant. And $2,000, whether someone finds it subjective or not, can be a lot of money.

If he had any other reason to do something, he would have taken it. He would have taken other fees

CALLAN: This guy is the president of Rotary --

GREENWALD: Oh, my gosh. We haven't had people who are presidents of something done anything wrong.

CALLAN: He's active in charities, he's a professional guy. Is he going to go out -- is he going to go out and hire a homeless hitman who -- and then murder his wife in the garage in front of the hitman?

And by the way, the so-called hitman shows up at the police department and what do they do? They let him go.

BURNETT: Now what about that angle? Let me just ask you about that, why would they let him go if they felt he's credible?

GREENWALD: Because they don't have enough evidence yet. They are building, the forensic attorney, they are building their evidence. They don't have just enough. They need more.

They just got the car. And they need to see why he didn't take the pill allegedly that were found on the floor, didn't sell them. Didn't take a Mercedes, a luxury car, have it stripped and sold. They are going through DNA looking for fingerprints, anything under her nails.

CALLAN: The hitman walks into the police station, and he confesses to the police and they let him go. Yes, very alleged.

(CROSSTALK)S

CALLAN: And supposedly, Erin, from what I've read, they say that this guy's story is filled with inconsistencies, that he's got mental problems. Bottom line on this -- maybe the husband is guilty, maybe he's innocent. But right now, there's no case against him.

And I think it's a disgrace that even to accuse him of possibly being guilty of this crime until we see more definitive evidence because, right now, there's no case here or there would be an arrest. GREENWALD: You have a person of interest.

BURNETT: Person of interest.

CALLAN: Person of interest. That's another sour subject.

BURNETT: I know it's a sour subject. I promise we'll talk about suspect versus person of interest -- cop speak or the real deal.

Thanks to both of you, appreciate it.

GREENWALD: Thank you.

BURNETT: All right. Well, it is Wednesday. And, of course, that means it's hump day for those in the middle of a five-day week. That can only mean one thing, right? Or Can it? You know what report is OUTFRONT, next.

(COMMERCIAL BREAK)

BURNETT: So would it be hump day without the camel report when we are allowed to do one.

I'm lucky enough to travel a lot with this job, which I love. But almost everywhere I go, I run into a camel. Is it divine intervention or just great luck? I'm not really sure, but I have watched camel races, tried camel milk where they're actually allowed to make it. That was in Dubai.

I hung out with Alexander and Joshua. That's Alexander and there's Joshua at the Bronx Zoo. And actually at the pyramids, Rose Daisy, a lovely camel with a real attitude, in Egypt.

But earlier this month, when I was in South Carolina covering the GOP primary, I didn't expect to run into a camel, until while on the shoot at Firefly Vodka, off in the distance, glistening in the sun, I saw this. Yes, that's a hump. Where there's a hump, there's a camel, right?

Wrong.

(BEGIN VIDEO CLIP)

BURNETT: So what -- is this a cow, a camel, what is it?

UNIDENTIFIED MALE: It's a miniature Brahman. It's not a bull. It's jus cow. But she still has horns.

And she has a hump just like a camel does, and she can store water and fat for extended periods of time.

BURNETT: Just like a camel?

UNIDENTIFIED MALE: Just like a camel.

(END VIDEO CLIP) BURNETT: Just like a camel, Brahmans have humps, too. I mean, it truly rocked my world. I felt like I limiting myself to this drama, there's a breed of cattle with a hump.

And according to the American Brahman Breeders Association, this is pretty neat. American Brahman cattle rank number one in vigor, efficiency and in heat tolerance. That sure sounds like a camel to me.

Well, I have been very curious about how many other animals actually have humps now that my world has been disrupted. So, right before the show, we went online and we Googled animals and pumps.

And after wading through a ton of sites that were definitely not what we were looking for, we came up empty handed. Can that really be it? Are camels and Brahmans the only animals with humps?

So, I put the question to you, our camel reporters. If you know of other animals with humps, let us. Twitter @ErinBurnett, or Facebook@OutFrontCNN. Surprise us.

We'll see you tomorrow. "ANDERSON COOPER 360" starts now.