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Whitney Houston's Funeral Plans Announced; Jeremy Lin's Sudden NBA Stardom Continues; China's Next Leader Visits the Heartland; Cafeteria Cop Inspects 4-Year-Old's Lunch; Pipeline Blast Kills Four In Syria; UVA Trial Prosecution Nears End; Prosecutors Appeal Amanda Knox Acquittal; Rolex Thief Caught On Camera; Bad Boss? You're Not Alone!; Defending Cuts To Defense Budget; Iran Makes Major Nuclear Announcement; Police Say Prescription Drugs Likely Played Part in Whitney Houston's Death

Aired February 15, 2012 - 06:59   ET


SOLEDAD O'BRIEN, CNN HOST: Our STARTING POINT this morning is the tax cut deal that's now being sent up the ladder. It means more money for all of us to keep in our pockets, but some Republicans are saying it's going to cost us later. We're going to talk about that this morning.

Plus, whose music is going off? Is that you, Nancy?


O'BRIEN: Oh, my goodness. Also this morning, we're talking about Whitney Houston, of course. New information about her death. Investigation is now reportedly focused on the drugs that were found at the scene.

And Jeremy Lin, the legend, the legend. The Lin-sanity continues. Did you see that -- oh, that was so great. You know, the Knicks really need him. It's such a great story. We're going to talk about what's happening with him straight ahead. STARTING POINT begins right now.

Joey Bell in the control room playing Marvin Gaye with me. You know, Joey, that is the way to get promoted in this company.


O'BRIEN: Just kidding. Welcome, everybody. I'm going to introduce you to our panel who is joining us this morning. Don Peebles is back. He said I'll come back any time. So we're like, OK, we're going to have you back. It's nice to have you. Of course he's the chairman and CEO of the Peebles Corporation. Will Cain is with us as well and Nancy Dowden whose phone was going off just a moment ago.


O'BRIEN: It's very nice to have you.

Lots to get to. First, we're going to start on what's happening on Capitol Hill this morning. Congress has reached a tentative deal to extend the payroll tax cut for the rest of the year. The average savings is roughly $1,000 a year. No plan, though, on exactly how to pay for it. And some Republicans are saying today that it's just stealing from the future. Listen.


REP. DENNIS ROSS, (R) FLORIDA: Why are we arguing over a middle class tax cut that has been given to us for -- by name, to reduce the amount that we're paying into Social Security? What we should be talking about the real tax reform. We should be talking about what it's going to take to increase our revenues by broadening our economic base, by growing our economy. We're not doing that. We need to be talking about what the American people want to hear. And that's where the jobs are going to come from.


O'BRIEN: That would be Congressman Dennis Ross speaking there. Christine Romans is in Atlanta this morning breaking down the details on this. Good morning.

CHRISTINE ROMANS, CNN ANCHOR: Good morning. I think, Soledad, in an election year this is a no brainer for Republicans and Democrats. You've got 160 million people who are getting a little bit of a tax benefit every paycheck that they get. And that tax benefit is $1,000 over the course of a year, about $40 per paycheck. That's if you make $50,000 a year or so. So this was something in an election year you just, you know, the feeling in Washington you just can't be raising taxes on people, on working people in an election year.

There's a couple of other components to this. It's the jobless benefits extension, and that so-called dock fix. They're going to try to find a way to pay for that, we're told. Those two things, doctors getting reimbursed for their Medicare patients and how they're being reimbursed, and an extension of jobless benefits, those have to be paid for. So the fighting that's still happening right now is how you're going to pay for that.

There are some people in the GOP, quite frankly, who want drug testing maybe or other kinds of testing for eligibility for jobless benefits going forward here. And I think we know for sure that those days of 9 weeks of jobless benefits, those days are over. You're not going to be able to find agreement on that at this point, Soledad.

O'BRIEN: Talk about a political hot potato in an election year, $40 per paycheck, which is basically what it works out to be, you say you advocate for taking that away. You might be on the losing side of that battle. Thank you, Christine, appreciate it.

Some new details to get to this morning into the investigation into Whitney Houston's death. "The L.A. Times" is reporting that doctors who prescribed her drugs could be slapped with subpoenas over the next few days. Not a surprise there really because investigators want to question doctors in the pharmacies as well as medications found in the singer's hotel room. Meanwhile, a private funeral will take place on Saturday at Houston's childhood church, the New Hope Baptist church. Erin Burnett spoke to the church's pastor last night, and here's what he said about how Whitney's mother is doing.


PASTOR JOE E. CARTER, THE NEW HOPE BAPTIST CHURCH: She's hurting. She's grieving, of course. But Cissy Houston is a woman of strong faith. She actually was testifying about how god had been so good to her to this point, and how she said he's not going to leave her now. And I was there to lift her spirits, and she ended uplifting mine. It's just an amazing testimony of the grace of god.


O'BRIEN: We know that the eulogy will be given by gospel singer and Pastor Marvin Winans. He's presided over Whitney Houston's wedding to Bobby Brown back in 1992.

New Jersey governor Chris Christie is also ordering flags to be flown at half-staff on Saturday. Danyel Smith is an editor at "Billboard" magazine. You interviewed Whitney Houston in 19 --


O'BRIEN: Are you surprised this funeral is private? We heard Thursday and then Friday and then 12,000 people would be at the prudential center and all of a sudden it was like, no, what happened?

SMITH: I'm not surprised. It's just -- it's such a tragedy. I'm sure her family wants some intimacy so they can grieve comfortably.

O'BRIEN: At the same time, you know, a lot of people gave a lot of flak to Clive Davis for going on with his Grammy party. Nancy Giles was like --

GILES: My god, she was -- her body was still in the hotel. I just think that's tasteless. I'm sure everybody was in shock. I don't know how I would have reacted. But have it somewhere else if you have to have it. You know what I mean?

O'BRIEN: There are people who today say, you know, how could you possibly go on with a party when a massive tragedy has just happened and the death was a Whitney Houston who was the mentee of the person throwing the party?

SMITH: It was an awkward situation. My mother always says people don't know how to act when people die. But I wasn't near the hotel, but it was awkward to be in Los Angeles period. I was at a different party that same night and I felt like the deejay was playing all this music and no one knew whether to dance or not or no one knew how to act.

O'BRIEN: We heard from the Pastor Joe Carter about what's going to happen. I want to play a little chunk because it's sort of the same thing. It's like you have entertainers perform or do you have a memorial service and people mourn or is it a combination of the two. Here's what he said.


CARTER: We're hearing a lot of entertainers are going to be here, and we're excited. The family really has put together a program that's going to be musical, be happy, be joyful, and really give the kind of feel to the congregation and those there that, I think, Whitney would want to be remembered by.


O'BRIEN: That's a tough spot to be in?

DON PEEBLES, CHAIRMAN AND CEO, THE PEEBLES CORPORATION: You know, I first met Whitney in 1994. After President Clinton's first year in office he had a presidential dinner and Whitney performed. She had just given birth to her daughter and there were allegations of rumors then of drug use and her taking medication to lose weight. And she gave a great performance. But even back then she was a bit troubled. Then I remember the last time I saw her was at the BET honors two years ago when she got a wonderful award and, again, she was on her way to a comeback. I would think just from the personality that I saw that I think she would want people to remember her in an upbeat, positive way.

O'BRIEN: People have been talking about the drug use. As you say, right, everyone says, oh, my god, what an amazing voice and what a struggle she had. A lot of people connected that struggle to her husband, to Bobby Brown. But then some people say it really predated their marriage.

PEEBLES: I think people who abuse drugs generally have, you know, many instances it's within. I think we all have to be accountable for our own problems and I think that sometimes we connect up with people who have similar personalities or similar issues with us. But I think she certainly, you know, battled through some difficult times and was immensely successful and talented and giving throughout her life.

O'BRIEN: And coming back and coming back and coming back.

SMITH: I think she was on her way back, that's the sad part about it. I think with this movie "Sparkle" that's going to be released in August. The idea of her singing gospel music which is going directly back to her roots, it seems like it was going to be a rebirth.

O'BRIEN: Some people say it was finally a real opportunity to turn the corner as a maturing artist and do something else. We're going to take a short break and back and keep talking about Whitney Houston today and some of the plans that will happen with her funeral and her memorial as well.

First though, let's get to other headlines. Christine has that for us. Good morning, again.

ROMANS: Good morning, Soledad. Iran flaunting its nuclear advancements this morning. President Mahmoud Ahmadinejad claiming Iran has made advances in the nuclear program building homemade nuclear rods. Meantime Israeli and American security officials in the U.S. are reportedly on high alert. Israeli officials say security for high-ranking embassy officials is at the highest level it has been in five years. So far no specific intelligence of any threat to Israeli interests in the U.S.

Meanwhile, Israel this morning is vowing to settle the score with Iran after a bombing attempt in Bangkok. Israeli Defense Minister Ehud Barak says the Tuesday's blast that wounded four civilians was an attempted terrorist attack by the Iranian.

China's vice president Xi Jinping will meet with congressional leaders on Capitol Hill today and then give a speech at the Chamber of Commerce. It's part of his five-day tour in U.S. in it meetings. Yesterday President Obama told Xi that China that has a responsibility to ensure fair and balanced trade policies. After Washington Xi head to Iowa for a reunion with farm families he met more than 25 years ago. You're going to meet one of those families coming up in just a few minutes.

A fake version of a popular cancer drug circulating in the U.S. The company that makes Avastin is warning hospitals, doctors, and patients about this counterfeit product. It's not clear how much of the fake stuff is out there or whether anyone has been harmed. The Food and Drug Administration is investigating.

"Minding your Business" this morning, stock futures for the DOW, NASDAQ, S&P 500 are all trading higher after gains in European markets on strong economic reports from France and Germany. Also China pledging support for the EU and its debt problems.

All right, the top dog announced at the Westminster Dog Show.


UNIDENTIFIED FEMALE: Best in show at the 136th annual Westminster Kennel Club, America's dog show, is the Pekingese.



ROMANS: That best in show Pekingese is named Malachi. The little guy beat out a Dalmatian, German shepherd, a Doberman pincher, and wild haired dachshund, capturing the coveted silver bowl.

O'BRIEN: "Best in Show" is the best movie ever. Every year I need to watch that movie again.

GILES: I can't watch the Westminster dog show without thinking of that movie of what's going on backstage.

O'BRIEN: Of course. Of course.

Now I'm r we're going to talk about my favorite topic, Lin- sanity. You know it's a big deal when it's on the front page of "The Post," "thrill-Lin." Everyone is trying so hard. And it's on the back page, "Amaze-Lin." It's like, OK, everybody, go back to work on that.


O'BRIEN: Put a little bit more work on that. In the "Daily News," "Lin and a prayer." A little weak. "Just Lin time." It's all a surprise, right?

GILES: "The Post" has the headlines. They know how to do it.

PEEBLES: It reminds me of Tom Brady. Tom Brady was sitting on the bench for the New England Patriots, and the starting quarterback got injured. And Tom Brady came off the bench and he never sat down again, and he's been one of the best quarterbacks in NFL history. This guy is an amazing point guard.

O'BRIEN: Last night, the New York Knicks, star player now, now he's the star player. He wasn't the star player two weeks ago, but now he's the star player. He extended the team's winning streak. The Knicks really needed it. Beat Toronto in a dramatic fashion. See that three-pointer that he hit with half a second left on the clock?

GILES: And he waited it out.

O'BRIEN: I love it. The score was, I think, 90-87. Here's what he said.


PEEBLES: It's a miracle from god, is the way I would describe it, just because obviously I don't think anybody expected this to happen.


O'BRIEN: Why do I love it when athletes are like, I just want to send a shout out to the lord. I love it. I really do. I do. It's like I've ray rapper who receives an award, I want to thank Jesus Christ.


GILES: The songs are filled -- it's god's work.

O'BRIEN: In this case, I love that. Will, why is that?

WILL CAIN, CNN POLITICAL CONTRIBUTOR: This is awesome. TV ratings, the Knicks are up 70 percent since he started.

O'BRIEN: And they have a team now. CAIN: Six-game winning streak. He scored 20 points in every one of these games, scored over 20 points. The difference between he and the Tom Brady story is Lin literally came out of nowhere. He was not drafted. He was released by two teams and days from being released on the Knicks. They were putting him on the floor to see if he can play. The answer is quite obviously yes.

O'BRIEN: The interesting thing of course for a Chinese journalist trying to figure out how to cover the story, he's Taiwanese, which is this rebel province. So they keep saying, many will say he's ethnically Chinese. No, he's actually Taiwanese, which is problematic.

GILES: There's something called ethnically Chinese?

O'BRIEN: I think they made it up. Kind of sort of Chinese because he's Taiwanese.

CAIN: He's been doing this while the stars Amare Stoudemire and Carmelo Anthony are out. They come back very soon. We'll see if Lin- sanity continues.

PEEBLES: Number three of the big three. He didn't come out of nowhere. He was a top player in Palo Alto in high school, Ivy League scoring record.


O'BRIEN: In the NBA. We're going to be doing a story. What's his first name?


O'BRIEN: Don Jr.


O'BRIEN: We love it.

Still ahead this morning on STARTING POINT, we're going to talk about China pouring money into the heartland of America. The man in line of becoming the leader of the largest country in the world is visiting a farm in Iowa today. We're going to chat with one of his hosts up next.

Also, that's not his tray. Have you seen this? This is a guy caught on tape through airport security. Glances over, oh, look, there's a Rolex that's been left in the bin next to mine. But you know what is interesting? Look at the high quality of that videotape. They haven't caught him yet, but they will.

Also this morning, our "Get Real." The food police inspect a little girl's lunch her mom made for her and then they make her get a new lunch. Needless to say, mom's a little angry this morning. We're going to talk about that straight ahead on STARTING POINT. We're back in a moment. (COMMERCIAL BREAK)

O'BRIEN: That's U2, "Beautiful Day." And that's Don Peebles' choice. His son is going to be in the NBA All Star one of these days.

PEEBLES: Hopefully an entrepreneur.

O'BRIEN: No pressure, John III. No pressure, entrepreneur. He is such a businessman. He's, like, no I would like him to be an entrepreneur.

This morning, we're talking about China. China's Vice President Xi Jinping is making a stop at the Heartland today. He's going to be in Muscatine, Iowa, as part of his five-day -- five-day trip across the United States. The population of Muscatine, 23,000.

And why Iowa? Well, China is the biggest foreign buyer of U.S. agricultural goods and Iowa is the nation's biggest grower of the top export which is soy beans. Xi has been to Iowa before. He visited back in 1985. It was part of a sister state program between Iowa and the province where he was a regional official at the time.

So today Xi is going to meet with some of the same people he met 27 years ago including Sarah Lande. And she is our guest this morning. It's nice to see you. Thanks for talking with us.

I know you're going to be hosting -- hosting a dinner. The pressure is on, though, of course, because the world will be watching and it's now 27 years later from the first time that you met him. Tell me a little bit about that 27 years ago. What was that meeting like?

SARAH LANDE, HOSTING CHINESE V.P. ON WEDNESDAY: Well, it was a wonderful meeting. Iowa had just signed a sister state relationship with Habay Province. So one of the first exchanges requested by Habay was an agricultural exchange to Iowa.

So we brought this delegation was headed by -- headed by Mr. Xi. And we invited him to our community of Muscatine to have him see the agricultural businesses that he wanted to fulfill his goals.

O'BRIEN: He was 32 years old. What was he like then? I mean, because at the time, he was kind of a relatively speaking, a low-level official. Was he friendly? Was he excited about being in the United States?

LANDE: You know, I think you just hit it right there. One, I think at that time in particular, not many people from China or delegations had come to our state and sort of from our side, our side had not seen many Chinese people. So it was very -- it was exciting for all of us. We wanted to learn more about each other.

Mr. Xi has headed the delegations. He was very organized. He knew what he wanted to learn. He said he wanted to learn more about our agricultural technology so he could feed his people better, the growing population, and help their standard of living. And I think he was eager to see how we lived in the Heartland of Iowa. O'BRIEN: you know, what's interesting now, when there are conversations certainly in this political year about China, often the tone is sometimes hostile, I think is a fair way to put it. Let me play a little clip of what some of the candidates have been saying about China.


MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: I've indicated day one I will issue an Executive Order identifying China as a currency manipulator. We'll bring an action against them in front of the WTO for manipulating their currency and we will go after them.

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: I already put forward a plan, you know, Mitt, I don't want to go to a trade war. I want to beat China. I want to go to war with China and make America the most attractive place in the world to do business.


O'BRIEN: We hope that he means metaphorical war, not actual war with China.

So in light of sort of this tone of conversation, how are you looking forward to the meeting that's going to happen today and the dinner tonight?

LANDE: Well, I'm looking forward to work on a very positive relationship with China. I do not think those comments reflect America and I do not think they reflect statesmanship and foreign policy.

China is a growing country in the world and it's to our benefit and our possibilities to work with them, trade with them, have them buy our products. So I -- we are going to have a tone of friendship. We're going to have a tone of looking at how we can build on the bridges of the past, how we can have a line of communication, so we can find a way to sell our products, find a way to work with China. When there are difference, we'll talk and work them out.

O'BRIEN: You are hosting the dinner tonight. What are you serving? I mean, is there pressure in that?

LANDE: It's a tea at my home. And we are -- Mr. Xi -- Vice President Xi is only going to be with us for an hour. So all of the old friends get to talk and present a memory and introduce themselves. Then we are going to have some spring rolls, a little crostini with filet of beef. We're going to have a scallop and bacon and --

O'BRIEN: I like that.

LANDE: -- a chance for a toast of friendship from our governor to Vice President Xi. He will get the key to our city, and we want to be an example, a positive ways to work for mutually beneficial relationships. O'BRIEN: Sarah Lande joining us this morning. It's nice to talk to you. That menu sounds awesome. And the eyes of the world will be watching, so I hope it's a big success. Thanks for talking with us this morning.

Still ahead on STARTING POINT, troops overseas, military towns here at home, lots of questions, though, about those severe cuts to the defense budget that had been proposed. We're going to talk to key members of the Armed Services Committee about whether the Pentagon is thinking about cutting too deep.

Plus, a lunch room -- this is my favorite story of the day -- inspects a little girl -- she's four. Inspects her lunch. She has a turkey sandwich. Decides that, in fact, it's inappropriate and makes her buy the school plan meal, which is chicken nuggets.

GILES: What?

O'BRIEN: America is in decline. All right. We're going to talk about that in our "Get Real" this morning, straight ahead. Stay with us. Yes, what?


O'BRIEN: That's Bill Withers, "Lovely Day." Nancy Giles, nice choice this morning.

GILES: Yes (ph).

O'BRIEN: Great to have you.

OK, our "Get Real" this morning may be my favorite story of the day. You know, back in the day when you would trade your lunch with somebody else's to get a better lunch?

Well, one preschooler in North Carolina -- what school is she at? She's at the West Hoke Elementary School, and this story comes to us, I should say, by the "Carolina News Journal." A four-year-old was forced to eat a lunch that was provided by her school after an inspector searched her lunch and then deemed it not nutritious enough.

Her mother said that she sent her four-year-old -- four-year- old -- daughter to school with this -- a turkey and cheese sandwich, a banana, potato chips and apple juice. The inspector ruled that in fact she needed a vegetable -- it's part of a program -- to comply with Department of Agriculture guidelines. So, along with her homemade lunch, she also had to eat a plate of chicken nuggets, milk, fruit, and vegetable. That was the lunch of the day.

But the mom says, of course, the kid was freaked out. Reference back to she's four. And so she ate a couple of chicken nuggets, you know, because that's what they eat, nothing else. The whole thing backfired.

The mother then said she also had to pay the $1.25 for the lunch because, you know, they billed her for the lunch. GILES: That they forced her child to eat.

O'BRIEN: Yes. Apparently -- isn't this crazy? -- the Division of Child Development and Early Education at the Department of Health and Human Services requires all lunch served in pre-K programs to meet USDA guidelines, and apparently what her mom had -- first of all, that lunch that her mother packed is so much better than anything I ever sent my kids to school with.

GILES: I never had a piece of fruit. Fruit was a luxury, you know? I had peanut butter and jelly.


O'BRIEN: But you ditched (ph) that anyway.

GILES: Baloney.

PEEBLES: Here's an example of government regulations going a little too far.

O'BRIEN: Yes. Yes.

CAIN: All right. I didn't (ph) even have to say it.


O'BRIEN: Kismet, right here.


PEEBLES: -- preschool.

O'BRIEN: But, you know what --

CAIN: Remember this the next time one of these conversations comes up --

O'BRIEN: Well, that's just crazy.


O'BRIEN: See (ph)? But I think people hear that and they're like, no rational person thinks that that's a good thing to do.

No four -- plus, a four-year-old -- now she has -- she's having chicken nuggets? That's victory?

GILES: Yes. I don't think chicken nuggets -- right.

O'BRIEN: Come on.

GILES: I know.

O'BRIEN: Of course, that's all my kids eat. But I'm speaking hypothetically. Still ahead this morning on STARTING POINT, lawmakers are blasting those deep cuts to defense spending, $500 billion across the board -- air, sea, boots on the ground. Congressman Duncan Hunter's going to join us. You know, he served in Iran and Afghanistan. And we're going to talk about whether he thinks the cost of cutting like that could end up risking lives.

Plus, do you think you're better than your boss? Yes, I do. Kidding, Shannon (ph). You're awesome.

It turns out we're not alone in that. We're going to tell you about that.

You're watching STARTING POINT. We're back in a moment.


O'BRIEN: I kind of like that. That's "Dirty Glass" from Congressman Dunkin Hunter. Who knew he was rocking out? Wow.

We're going to get a chance to talk to him in just a minute. Also this morning, we'll talk to Congressman Adam Smith as well. But first, though, headlines. Christine, got those for us. Good morning.

ROMANS: Good morning again, Soledad. As violence tears apart Syria, President Bashar Al-Assad, announces a referendum on a draft constitution for later this month.

The announcement comes just hours after a deadly pipeline explosion killed four people in the city of Homs. The government blames the blast on terrorists. But opposition leaders say government warplanes set off that blast.

The prosecution is expected to wrap up today in the University of Virginia lacrosse murder trial. George Hughley is charged in the beating death of his ex-girlfriend of Yeardley Love. This week, a brain expert testified Love was hit in the head so hard that the blood vessels in her brain twisted causing hemorrhaging of her brain.

Prosecutors in Italy are fighting to throw Amanda Knox back in prison. They filed an appeal to reinstate her conviction in the murder of British student, Meredith Kercher. The Knox family says they are not concerned, saying Knox' innocence was, quote, "clearly and convincingly proven."

President Obama headed to Milwaukee this morning to speak to employees at the Master Lock Company. He's expected to outline his plan to get U.S. companies to bring jobs back home. The White House says Master Lock brought 100 jobs back to Milwaukee, jobs that were previously outsourced.

Police want to know where this guy is. See him there? Yes, that's a watch. He's caught on camera stealing a $6,500 Rolex. A woman accidentally left in an airport security bin. Stuffed the watch in his bag and then hopped on a plane to North Carolina.

All right, hate your boss? You're not alone. A new study says nearly half of workers think they could do their boss' job better than their boss perhaps because of classic moments like this one.


UNIDENTIFIED MALE: We have sort of a problem here. Yes. You apparently didn't put one of the new cover sheets on your TPS reports.

UNIDENTIFIED MALE: Yes, I'm sorry about that. I forgot.

UNIDENTIFIED MALE: Yes. You see, we're putting the cover sheets on all TPS reports now before they go out. Did you see the memo about this?


ROMANS: The study also revealed one in three says their boss is not effective at all, one in three. And 60 percent say their boss has damaged their self-esteem. Soledad, I say when this economy gets rolling again --

O'BRIEN: Only 60 percent, really? That sounds low to me.

ROMANS: -- as they can.

O'BRIEN: Wow. Wow. There are so many directions I could do go with that, but I won't.

ROMANS: I love my boss.

O'BRIEN: Just kidding. Shannon, you rock. We love you.

All right. Let's turn to a serious topic now, which is Defense Secretary Leon Panetta cautiously defending those big cuts to the defense budget. He testified at Senate Arms Services Committee hearing and said this.


LEON PANETTA, SECRETARY OF DEFENSE: Let me be clear. Let me be clear. You can't take half a trillion dollars out of the defense budget and not incur additional risks. We believe they are acceptable risks, but they are risks.


O'BRIEN: OK, so here are the requested cuts. Tens of thousands of troops, reduces the U.S. fleet of warplanes, and slows down the building of ships. All help the Pentagon reduce the budget by more than $500 billion over 10 years.

So let's talk a little bit a more about those risks. We've got Republican Congressman Duncan Hunter from the state of California joining us this morning.

Also, I should mention he's a member of the Armed Services Committee. He quit his job and joined the Marines after 9/11 and served three tours overseas, two of them in Iraq, one in Afghanistan.

Also joining us this morning on the Democratic side, Congressman Adam Smith from the state of Washington. He's a ranking member on the Armed Services Committee.

It's nice to have you both. Congressman Hunter, let's begin with you if I can. You heard what Leon Panetta said. He said there are risks and those risks are acceptable. Do you agree?

REP. DUNCAN HUNTER (R), CALIFORNIA: To an extent, yes. The secretary makes a good point about -- there are going to be risks with this process. The problem is, the president's strategy and the secretary's strategy doesn't reach out and make the Navy and the Air Force do what they need do to do, basically.

So the biggest problem is this. The Navy and the Air Force need to be able to reach out and touch people. When it comes to the economy, when it comes to world trade, when it comes to be able to get out and actually do their job and make influence in other areas, that's the Navy and the Air Force.

And they're getting cut drastically. You can train more Duncan Hunters. You can train more Marines. You can train more soldiers to go take hills. What you can't do is get our ship building base up again, industrial base.

That affects the American taxpayer because that means at some point we're going to be short on ships. We're going to be on planes --

O'BRIEN: There are plenty of people, sir as you know --

HUNTER: You can train me, but you can't rebuild those ships in a snap.

O'BRIEN: There are people saying, and you're saying that, of course, that's an issue that you and the community that you represent, you know, the reason you care about that is because these are your constituents --

HUNTER: I don't have any constituents that build ships. I don't have a coast at all. I have no ocean on my district. I'm all inland. What I'm talking about I don't care if it's made in Minnesota, Virginia, Wisconsin or San Diego, for that matter.

You have to have ships and you have to have airplanes. Those are the ways that we protect our economy. Over 80 percent of the world's trade is done on the oceans. If you control the oceans you control the world. If you control space, you control the ocean.

That's a very simple statement, that's a fact. If you don't control the oceans, other countries are going to impede upon our territory. They're going to impede upon our trade and we are not going to be the nation that we were.

We're on that decline now. We're going to have as few ships as we had in World War I. Not World War II, World War I. That should pose a problem and an unacceptable risk to the secretary of defense.

O'BRIEN: OK, let me turn to Congressman Smith. People would say, listen, here's the reality. The reality is we cannot afford a military spending that is up 80 percent between 2001 to 2011 from $300 billion to $700 billion.

We know following the campaign we can't afford health care costs, we can't -- there's a long list of what we cannot afford. This is just reality. Do you agree?

REP. ADAM SMITH (D), WASHINGTON STATE: I think the more important point is that we are still spending a lot of money on defense. I think some perspective is important here. We talk about the cuts over the course of the next 10 years.

In those 10 years, every year, except for this one, the budget was $530 billion last year, $525 billion this year. It's going to go up every single year. They're talking about a cut. They're talking about a decrease in the proposed increase.

So this was the proposed increase from a year ago. And the second amount of perspective that I think is important is we could spend $3 trillion a year on defense and we would still have risk. It is in fact a dangerous world.

You can't spend your way out of risk. You have to figure out how to manage it. That's what the president and secretary of defense did here. You know, six months ago they started putting together a strategy.

What do we face now as we come out of Iraq, as we come out of Afghanistan, as we look at Iran and North Korea, as we weigh how China is rising as a power in Asia, what do we need? What do we need to be prepared for that?

They put out a strategy. They put out a plan. They put out a budget. It still spins an enormous amount of money well over $500 billion a year.

O'BRIEN: Let me play what the Vice President Joe Biden had to say in October about sort of changes in strategy. Here's what he said.


JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: In this case, America spent $2 billion total and didn't lose a single life. This is more the prescription for how to deal with the world as we go forward than it has been in the past.

(END VIDEO CLIP) O'BRIEN: So he was speaking specifically about Libya. But if you sort of look over the last couple of years, you see that there's more focus on drone attacks to take out some big names and al Qaeda operatives who are highly ranked, things like that.

Back to Congressman Hunter, isn't, you know, he basically saying it's cheaper to do it differently and the new world order calls for different?

HUNTER: Well, number one, Vice President Biden wants to break up Iraq into three different countries. That was his idea of victory over there. I wouldn't necessarily go with his defensive opinion.

Here's what I would say. Do we need fewer people possibly? Absolutely and I'm not arguing with that. Do we spend a lot on defense? Yes. We spend a lot on defense, but the budget doesn't match the strategy.

If we are going to go to those drones, those drones take Navy ships and take special forces guys to be able to shoot the drones off. That means you have to spend the money on the ships and the planes.

If you want to cut the people, then let's talk about that. If you want to cut programs that aren't working, let's talk about that. But don't cut the Navy down to the size that it was in World War I.

That's how you spell disaster for this country. So Biden's right in a sense. Panetta is right in a sense. But the president's budget does not match his strategy. It's that simple.

SMITH: I disagree. The budget I think does match the strategy. I do think Duncan is right that we have to be careful to make sure we maintain ship building and plane building capability.

But again, we're still doing a lot of that. This comparison to how many ships we had in World War I, the ships we had now are, gosh, 1,000 times more capable than the ships we had in World War I.

So I don't think that comparison quite works. Yes, we need to make sure we maintain an industrial base and we're spending a lot of money to do that. I will also point out something that doesn't come up in this debate very often.

The budget money for FY 2013 that Secretary Panetta and the president put out is the number that Congress passed in the budget control act and insisted on. The Republican controlled act.

O'BRIEN: And that --

SMITH: Duncan, I voted against it, too.

O'BRIEN: I'm not in D.C. to physically break up this argument, we're going to have to discontinue it, which I would love to do. Thank you for being with us this morning. Congressman Duncan Hunter joining us and Adam Smith as well, we appreciate your time. Got to go to commercial break. Ahead on STARTING POINT, going to talk about Iran set to announce a major step forward in its nuclear program. What does this do to the escalation of threats? We'll take a look.

And then a woman who's with Whitney Houston just two nights before she died. We're going to talk to Nicky Gilbert straight ahead. You're watching STARTING POINT. Short break.


O'BRIEN: Iran making a major nuclear announcement this morning. Flaunting the achievements in their nuclear program. President Ahmadinejad claiming a uranium enrichment facility near the Holy City of Qom is now fully operational.

Reza Sayah is monitoring this. He's live in Islamabad, Pakistan this morning.

What is going on? What is the latest?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, we're monitoring Iranian state TV as President Mahmoud Ahmadinejad is preparing to make some of these announcements. You can be sure Iran is going to use this day, use these announcements to send a message to the West, to Washington and Israel that their pressing forward with a what they're calling a peaceful nuclear program and they've been undeterred by the pressure, by the threats of war and the economic sanctions.

What we should point out is that these announcements coming today are not a surprise. Iran already made these plans months ago. It informed the IAEA, the nuclear watchdog. Some of the steps that Iran has taken have been under the watch of the IAEA.

Let's briefly to tell you about two things they're expect them to announce. One, they're going to announce they're placing nuclear fuel rods in a cancer research facility in Tehran. And we also expect them to announce a uranium facility outside of the Holy City is going to be fully operational, enriching uranium at 20 percent. Again, even though the world was aware that these steps were coming, expect, for the next 24 hours, for the information war between Israel, Iran; Iran and the U.S., to ratchet up, expect Iran to hype this announcement up as an achievement in what they call a peaceful nuclear program on the other side. It's already happening. Expect leaders in Israel and Washington to point to this day as another example of Iran taking a significant step to becoming capable in building a nuclear weapon -- Soledad?

O'BRIEN: Yes, I was going say, we've already seen it. In fact, President Mahmoud Ahmadinejad has been announcing the inauguration ceremony for later today.

Thanks Reza, for us this morning in Islamabad. Appreciate that update. Still ahead this morning on STARTING POINT, Whitney Houston's last days. There was a singer with her just two days before Houston died. Any warning signs? We're going to talk about that.

Plus, Congressman Allen West, he's a Tea Party star. I'm going to ask him if he's going to vote to extend the payroll tax cut, whether he likes it or not. That's straight ahead. Stay with us.


O'BRIEN: Police say that it's likely we could learn in just a couple of weeks if, in fact, prescription drugs did play a role in Whitney Houston's death. The "L.A. Times" is reporting that doctors who prescribed drugs for Houston could be subpoenaed soon. Investigators also want to talk to the pharmacies who actually gave out that medication that was found in Houston's hotel room.

Many of her friends are saying Houston wasn't an addict anymore, that she no longer was using hard drugs. She was taking Xanax for anxiety.

Nicci Gilbert is the lead singer of Brownstone. She was out with Houston just two nights before Houston died. She joins us from Los Angeles this morning.

Nicci, thanks for talking with us. Our condolences. Gosh, honestly, you cannot imagine a more tough time for family members and friends.

Tell me about Thursday night because when I talked to Kelly Price she said she was celebrating. She was happy. She seemed like she was in a great place.


O'BRIEN: Did she seem like she was that way to you?

GILBERT: She was in a great place. We were all celebrating Kelly Price's Grammy nominations. I didn't see anything out of the ordinary. She was with her daughter. You have images of her coming out of the venue sweaty and images of blood, I guess, on her leg or whatever the case may be, and that entire night we saw nothing that looked like any sort of altercation at all. She was sweaty, I think, because we were all having a good time and celebrating and in a very happy, happy place. So I didn't see any of the --


O'BRIEN: So people who saw that, I thought people who had been in the club a long time --


-- because --


GILBERT: Right. Right.


GILBERT: Exactly. She could have been coming out of church sweating like that.


O'BRIEN: The right church. Not my church, but the right church. I know what you're talking about.


O'BRIEN: Let me ask you a question because Kelly Price mentioned this, Kelly Price. She said that she was drinking champagne. She didn't have a lot to drink, but she was drinking champagne. I remember thinking, this is a woman who's a recovering addict, and was taking, you know, medications, standard medications that anybody who's prescribed pills for anxiety would take. But, of course, all those things usually a recovering addict shouldn't be drinking alcohol.


O'BRIEN: Was anybody watching for that?

GILBERT: Here's what kind of bothers me about the whole situation. We started talking about warning signs and we started talking about what was happening Thursday night. My question is what was happening 15 years ago. There's so many other people in this industry that -- Whitney obviously is responsible for her choices and her decisions, but I think there are people who have been around her for years and years and years and sort of seen this thing coming. And I think the conversation should really be about solutions --

O'BRIEN: Let's talk about that.

GILBERT: -- and how we prevent this from happening to the next person.

O'BRIEN: You had an interesting tweet. You tweeted this. You said, "The industry has to change and I'll be damn if I'm not about to be part of this. We can't keep losing artists."

GILBERT: Absolutely.

O'BRIEN: So what changed?

GILBERT: Absolutely.

O'BRIEN: Give me some solutions.

GILBERT: The solution to me is very simple. And forgive me, any artist who may have a problem with this idea. But I think that record companies police everything else. If I change the color of my hair, then that might be a problem in certain circumstances. If I gain too much weight, that would be a problem.

I think record companies have to say to artists, you want to be successful, you want to be in this business -- and not just record companies, promoters, even the fans, have to demand that artists take care of themselves. You have to have a situation where maybe there is some sort of program where artists are going in periodically for physicals like you have to do with athletes. There's mandatory drug testing. I think a great support group or great support system --


O'BRIEN: But the culture, as you know -- I'm not telling you anything you don't know, right? You're a successful performer and singer. The culture is, listen, I'm going to give you anything I think you need to be successful. If it keeps you singing and keeps you recording and keeps you going through the night more, I'm going to help you get that.

GILBERT: That's exactly what they do.

O'BRIEN: And sometimes that's drugs. How do you fix that?

GILBERT: Yes. Again, like I said, if you have a contract that says, we go in and we issue a test and there's a problem, then we're going to pull this thing back. We're going to slow it down until you pull yourself together. If somebody stopped Whitney Houston -- we talk about $100 million advance and all of this money that's being given to artists. Did you not know at the time that you issued a $100 million advance to an artist who admitted that she had some issues with drug use? I mean, give me a break. Labels have to be responsible, as responsible as the artists are --


O'BRIEN: Let me ask you a question about --


GILBERT: -- if it's written into your agreement --


O'BRIEN: Yes. Let me ask you a question about Bobbi Kristina. Here's what Bobby Brown said about his daughter. He said, "My daughter did visit with doctors at Cedars Sinai Medical Center in L.A. on Saturday. She's been released, presently with my family, including her siblings. Obviously, the death of her mother is affecting her."

How is she doing? She is so young and she has been -- that's chaos for a teenage girl. That's just chaos.

GILBERT: It really is. It really is. I have a daughter her age. And, in fact, you know, my daughter hung out with Bobbi Kristina when they were younger a few times. That particular night, my daughter was with me as well. Bobbi Kristina was in great spirits. She gave her a hug and a kiss and gave me a hug and a kiss. One of the first things I thought about was I'm so glad I had an opportunity to wrap my arms around that child and give her a hug. Right now, that's what everybody in the industry needs to do. That's what all the executives and all the friends need to do, wrap their arms around Bobbi Kristina and let her know that you can speak against this. You can be an advocate to speak against these things. It's going to take a minute. Obviously, she lost her mother and that's very, very tragic. But this doesn't have to -- this, oh, Bobbi Kristina's mother and her father had an issue. But at the end of the day, if we work with her and we embrace her and we let her know that it's OK and she doesn't have to go down that road, then I think Bobbi Kristina will be just fine.

O'BRIEN: You know what I think would be really nice would be if -- I think the performers like yourself, you don't understand the degree to which your fans really root for you. I think people were rooting for Whitney Houston to be successful, to get her voice back.

GILBERT: Absolutely.

O'BRIEN: And she had such a struggle. But everybody was rooting for her.

Thank you for being with us, Nicci. We appreciate it. I hope it takes off.


GILBERT: Thank you. It will. The action take. We've got to take action.

O'BRIEN: I like that. I like that.

Thanks for being with us and getting up early.

She's on the west coast. That's really early there.


Ahead on STARTING POINT this morning, the payroll tax cut is near. Some people are calling for the Tea Party to fall in line with the deal. Will Congressman Alan West vote for it, whether he likes it or not? He's going to join us live up next.

A musical star you'll want to see, Joe Jonas, heart throb. He's going to be performing down the street on Broadway. But first, he stops by our studio to talk to us.

You're watching STARTING POINT. Back in a moment.