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ERIN BURNETT OUTFRONT

Interview with Senator Chris Coons; Tax Cut Extension; Voter ID Law in Court; Romney's Offshore Investments

Aired July 9, 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: OUTFRONT next the president holds a news conference today calling for an extension of the Bush tax cuts for anyone or any family making under $250,000 a year. Would that help our economy? Does it add up?

And the state of Texas tries to enforce a voter ID law that could affect a million voters. Does the plan add up?

And "Fifty Shades of Grey" said to pass a pretty incredible milestone. It dominates an entire sector of our economy, whether you love that or find it terrifying.

Let's go OUTFRONT.

Well good evening, everyone. I'm Erin Burnett. And OUTFRONT tonight, the president's math doesn't add up. In a Rose Garden announcement today, President Obama called for a one-year extension of the Bush tax cuts for families who make up to $250,000. So, for those families who make $250,000 or more, their taxes will go up in January.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I believe our prosperity has always come from an economy that's built on a strong and growing middle class. So my message to Congress is this, pass a bill extending the tax cuts for the middle class. I will sign it tomorrow. Pass it next week. I'll sign it next week. Pass it next -- well, you get the idea.

(END VIDEO CLIP)

BURNETT: But how much would extending the tax cuts for the families making under $250,000 help our economy? Bear with me here if you will because I want to start by showing you something that the president and most Democrats and Republicans agree on, and that is that letting all the tax cuts expire would hurt the economy. So if we let all the Bush tax cuts expire, the rates go up for everybody as they are set to do by law on December 31st. We would increase tax revenue by $221 billion in a single year. That's a good thing, right?

Well, sure, it could help the deficit but not necessarily because it of course means less money for families to spend. When they spend less companies don't make as many things. They don't hire as many people and the economy takes a hit. So now let's take the president's plan, extending the Bush tax cuts only for those making less than $250,000. That will cost the government $150 billion next year. Put another way, that's how much tax revenue the government will not get from those people and will need to borrow.

Now Washington will get $71 billion in additional money from people who earn more than $250,000. But obviously that $71 billion was, of course, counted in federal revenue already because the tax cuts are set by law to expire. And that 71 billion is a lot less than the $150 billion tax cut. And the people who earn more who are now paying more in taxes have a little less to spend. Obviously it doesn't hit them anywhere near as much as it would as someone who earns less, but it does hit the economy a bit.

Michael Farole (ph) the chief economist for JPMorgan tells OUTFRONT that it would shave about one percent off of GDP. Keep in mind that our economy is only projected to grow between 2.2 and 2.8 percent next year, according to the fed. So the president's plan would hurt growth, not by as much as if he ended tax cuts for everyone. If he continued them for everyone, but still a hit. But forget whether you think the tax cuts should be extended for everybody, no one or something in between.

Because even if you agree with the president 100 percent, the numbers show that today's announcement was a lot about politics. You say, all right, all right, he's a politician, of course. But this is a big play because he's kicking the can down the road, avoiding talking about or paying for other taxes that will go away next year, ones that will hurt the middle class, like the payroll tax cut extension, like unemployment benefit, keeping those everybody will cost another $121 billion on top of the $150 billion tax cut for people earning under $250,000. It's a lot of numbers.

I said try to stay with us. And of course then there's the $1.2 trillion and those automatic sequestration cuts to defense and social services. If implemented, that will slash growth by another six tenths of one percent. You can see that growth number getting smaller and smaller and smaller and smaller. So why is the president doing this piecemeal?

OUTFRONT tonight Senator Chris Coons Democrat from Delaware. Good to see you sir. Appreciate your taking the time. I know we sort of going through that there very carefully, but I'm curious as to what you think about the fact that he makes an announcement about the Bush tax cuts without dealing with all of these other taxes which are very important for the middle class.

SEN. CHRIS COONS (D-DE), BUDGET COMMITTEE: Well Erin, thanks for a chance to be on. As a member of the Budget Committee, I have to agree that what we need to get to is the much bigger, much harder problem of solving all the different changes whether it's sequestration or changes in tax rates that are scheduled to kick in, in January. What I like about the president's announcement today is that he simply said let's move forward on what we can all agree on, everybody, Republicans and Democrats, House and Senate, agree that we should not allow these Bush tax cuts to expire on the middle class, on the 98 percent of Americans who make less than $250,000. And as he said in his extended comments, we'll let the question of what the tax rate should be for millionaires and billionaires be decided by the election. I do think it's important for us to start giving some tax certainty to small business owners and families.

BURNETT: Right.

COONS: And if we could start by just solving this one small piece of it, at least that would show some forward progress towards the much bigger fiscal cliff facing families, companies and our economy in January.

BURNETT: OK, but here's my question. You said that the president said the election will decide about the millionaires and billionaires but what about the 3.7 million Americans who don't -- are not millionaires but earn more than $250,000 as a family? I mean he's made that clear --

COONS: Well there is a gap there between 250,000 and a million. That's the position the president is taking and in my view, it helps sort of set the table for the general public. Most folks would agree that 98 percent of Americans represents a broad range, more than the middle class, up into the upper middle class. So the number that I think the president chose today was designed to strike a balance. In the end, our tax policy, Erin, as you mentioned, is going to be about figuring out which tax breaks, which tax expenditures we can afford to continue. And what we have to do to restore some tax fairness that allows the broad run, 98 percent of Americans to accept the cuts in federal spending --

BURNETT: Right.

COONS: -- that will almost inevitably have to come next year.

BURNETT: Right and I think most people know that and accept that. I mean everyone -- all of us as a nation are dealing with that. But what about this you know the JPMorgan analysis was saying look if you -- if this went away for everybody you get $221 billion in revenue. Extending the tax cuts for the under 250 is you get -- it cost 150 billion. You're only getting 71 billion from the wealthiest Americans and I get to this point only sir because I'm trying to understand the reality of it is, is you can't pay for this problem by taxing the wealthy. You can pay for a little bit of it. But you can't pay for all of it. That's the math.

COONS: That's right, Erin. It's not possible for us to either tax our way or spend our way or cut spending to solve the current problem we have. We have record low federal revenues and record high federal spending post-World War II and we're in our 28th month of private sector job growth. To strengthen that job growth we have to continue to make some smart investments. We have to invest in innovation and infrastructure and education. But we also have to allow some tax expenditures, some loopholes to be closed or to expire --

BURNETT: Right. COONS: -- so the broad run of Americans believe that this system is getting fairer. It just doesn't --

BURNETT: Why wouldn't you go for that, then?

COONS: -- pass the common sense test.

BURNETT: Right. But what about that then? Why not just go for that and do a deal where you close the loopholes, lower rates but the wealthier end up paying more, you deal with this fairness issue instead of taking the politically easy path of raising taxes on some people and not others and not dealing with the loopholes at all because this thing he said today doesn't do anything with that, nothing.

COONS: Well Erin my real hope is that we will move forward from this proposal to the broader and more challenging work of trying to engage in comprehensive tax reform that broadens the base, lowers rates and raises revenue. I'm someone who generally supports the Bowles/Simpson framework and there are dozens of senators, Republicans and Democrats working together now to try and work out a framework that we can reduce to legislation that would deal with all of these very tough questions --

BURNETT: So you're for lowering rates --

COONS: (INAUDIBLE) value tax loopholes and expenditures we need to deal with.

BURNETT: Right. But you would be for lowering --

COONS: As long as we close loopholes to pay for it.

BURNETT: Right. So --

COONS: Yes.

BURNETT: OK, so I mean I understand. You're saying you can't get there right now so do this, but once you extend these tax cuts that makes it almost more difficult, doesn't it, for some people rather than others?

COONS: It pushes it into next year the question of what the tax rate will be for the middle class. That's right. But Erin, I also think we have to show that in the Congress we can come together and solve some of these problems. Just last week, we managed to finally pass a bipartisan highway bill, something that invests in putting people to work that invests in strengthening our infrastructure. It took months longer than it should have.

But I think it's important that we are still passing legislation that the president is signing into law so that as folks who aren't worried about the election, they're worried about job creation and about our economy, get some positive signals from what we're doing in Washington. That's what I hear from the state of Delaware. Folks want us to make principled compromise, to find a way forward to improve the fairness of our tax code and strengthen the competitiveness of our economy.

BURNETT: All right. Thank you very much. Appreciate it Senator Coons for your taking the time. And now let's bring in John Avlon and of course he was honest there. This just pushes it into next year. Translation kicks the can down the road. I mean he was very direct about what this does.

JOHN AVLON, CNN CONTRIBUTOR: Absolutely and you asked why is the president adopting a piecemeal approach? And the answer is presidential campaign politics.

BURNETT: Politics, right.

AVLON: This is first of all no grand bargain is going to get done. I'm as optimistic as anyone that there are things Congress can agree upon. But in election year, the grand bargain ain't going to get done. The president's trying to draw a contrast that's politically beneficial to him. He's trying to say look -- he's trying to campaign as the defender of the middle class. So he's saying look, can we agree at least to extend the Bush tax cuts for the middle class. And if not, why not? Why does that two percent -- remaining two percent have to put a giant question mark over the rest of the economy?

BURNETT: Right.

AVLON: But it opens him up to the Republicans' attack that (INAUDIBLE) segmenting (ph) off that two percent that that's class warfare. That's the debate --

BURNETT: Well and also looking at these numbers, and again these are the numbers we got from various economists. The exact number came from JPMorgan's chief economist that extending them for the middle class Americans under 250 and not for everyone else takes a full percent off GDP. (INAUDIBLE) get an economy that's lucky to grow between two and three percent everybody, so you're looking at a third to a half of your GDP could go away --

AVLON: Yes.

BURNETT: -- by not extending them for everyone.

(CROSSTALK)

BURNETT: The math does not -- growth does not support, at least on that specific analysis --

(CROSSTALK)

AVLON: Exactly and that's why this is ultimately about campaign narratives and campaign contrasts. Look I mean if the focus is growth and at the end of the day everyone agrees there needs to be growth this isn't about reducing the deficit and the debt. This is about drawing a clear contrast. And the real question for Democrats is this may poll well. But isn't the real issue if it's a household making $250,000, that's not rich in many parts of this country. And so it becomes the question, it's not just a question about the growing gap between the super rich and the middle class but really the super rich and the working wealthy and families that get caught in that grey area and whether that may alienate ultimately some very influential (INAUDIBLE).

BURNETT: That's right. A lot of independents in the --

AVLON: Absolutely.

BURNETT: -- wealthy suburbs in this country. Thanks very much to John Avlon.

And now Texas fought for its voter ID law in court today which could keep more than a million people from voting and we're going to tell you why it actually may hold up in court.

And a mysterious illness has killed dozens of children in Cambodia. We first brought you that report last week and tonight on the scene live, what that deadly illness might be.

And George Zimmerman is in a safe house and we're going to tell you tonight who's actually paying the bill.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT, the state of Texas tries to enforce an ID law that could keep more than a million people from voting in the presidential election. It's one of 11 states with new laws requiring voters to show a photo ID. A Justice Department lawyer says that 1.4 million people in Texas don't have a photo ID. States with a history of voting rights violations, which include Texas, need permission from the Justice Department before they can change election rules.

So today, the two sides took the issue to federal court. Roland Martin is here, CNN contributor and Alice Stewart, Republican strategist -- great to see you both. Roland, let me just start off with you. Explain the basics here. People with a driver's license they have a voter, a picture, they may be saying, I don't understand this. How could 1.4 million people not have a photo ID? Tell me who these people are.

ROLAND MARTIN, CNN CONTRIBUTOR: Well, a lot of people don't have it because you're not necessarily required, so you're talking about senior citizens. You're also talking about any number of minorities because if you're not necessarily having a checking account, you're not actually showing it. What's interesting about the Texas law -- I'm a native of Texas -- I'm in Houston right now -- is they also don't allow a student ID, Erin.

Now, the Georgia law allowed for the Texas -- for the public university students to use their student ID but not private schools. But in Texas, you can use your gun permit ID to be able to vote but not a student ID. That's what's so crazy. But also the legislature in passing this bill bypassed the normal procedure of two-thirds voting to approve the bill. They bypassed that to get this in and so it raises the question, why would you do that -- why would you go against your normal procedure to pass this bill compared to others?

BURNETT: Alice, let me ask you a question because obviously I don't need to be a genius to recognize what Roland was saying. Gun permit pictures are OK and student IDs aren't. That will skew (ph) Republican.

ALICE STEWART, REPUBLICAN STRATEGIST: Well first of all, the whole purpose for this is to prevent voter fraud and to combat a culture of election fraud and to bring about free and fair and lawful elections. And the good thing about the law in Texas that these voter IDs they are free of charge and also when you go to the polls, there's also a provision where you can go -- if you go to the polls that day and you don't have your ID, you can cast a provisional ballot and you have, depending on what state, you have six to 10 days to (INAUDIBLE) ID so -- exactly -- so no one's turned away from voting. You can vote. You just have to get your proper ID. Look voting is a privilege in this country and there are certain you know requirements that we all have, all three of us here --

MARTIN: You know what --

STEWART: We have certain requirement that we need in order to cast a ballot.

BURNETT: Alice --

MARTIN: What she just -- what she just said Erin is shameful.

BURNETT: OK.

MARTIN: When you say voting is a privilege these are the same people when we talk about our troops overseas fighting for the American way, democracy, our power and our vote, now all of a sudden now it's a privilege? No. Any Republican, any Democrat, any independent should be saying voting is a fundamental right in this country. Now Erin, what also is troubling about this is that the American Legislative Exchange Council, ALEC, this shadowy group out of Washington, DC. There are lots of corporate funders, Change.org will expose them they begin to lead these efforts.

The reality is it's a partisan issue because we've seen these laws all of a sudden crop up since 2010 when many statehouses flip to the GOP. What's also interesting in terms of what they're pushing and talking about is a privilege is that when you deny a million people and then you're saying the corruption of voter fraud, the National Republican Lawyers only found 340 cases of voter fraud over a 10-year period in all of America. So you're saying --

BURNETT: Let's give Alice a chance to respond to that.

MARTIN: -- let's deny a million people for what percentage?

BURNETT: Alice -- right -- Alice he has a fair point here.

STEWART: Well Just to make sure we get all the facts out there, Texas itself has already tried 50 cases and currently in Texas alone, there are almost 250 cases pending that are to be investigated that involve dead people casting ballots. And keep in mind we're not talking about huge presidential elections that are decided by tens of thousands of votes. Many of these races come down to just a handful of votes. We're talking about statehouse races that are critical, so if you're a candidate on either side of the aisle, you want to make sure that these elections are fair and lawful.

BURNETT: Alice, you know --

(CROSSTALK)

BURNETT: (INAUDIBLE) I remember a time, Alice, when I was 17 years old and a guy that I'd known my whole life, Richard, he was almost 60, he was African-American, he'd never voted, and he was intimidated and intimidated about reading the ballot. So we spent all summer working on it, getting to vote and he actually voted that time. He voted for President Clinton. And I always remember that when I hear these stories because people are afraid and it shouldn't be that way. And don't you think that some of these laws make people more afraid?

STEWART: No, I think -- and that's great that he was able to cast his ballot. That's fantastic. But it's very important -- no one's turned away. Anyone can go get a free ID. Anyone can go to the polls and vote. You just have to get your ID and this is to help make elections for everyone, whether you're a Republican candidate or a Democrat candidate, you want to make sure that every vote is fair and it's lawful --

MARTIN: Hey Erin, what she's not --

STEWART: (INAUDIBLE) come and follow all the laws that are on the books in every state.

MARTIN: What she's --

BURNETT: Quick, final word Roland.

MARTIN: What she's not saying Erin is that many counties -- there are a number of counties in Texas don't even have a Department of Public Safety office to get your ID and so where do they get it? Well the other deal is here. People who are illegal immigrants can get a driver's license in Texas. So how can you pass that law but then say you can have a driver's license to vote but you pass that law, but then you say voter fraud -- well, that makes no sense.

BURNETT: OK, we'll leave it on that note. Thanks to both of you, appreciate it. And please let us know everybody what you think on Twitter.

Well there's a number of reasons "Fifty Shades of Grey" has become an economic powerhouse and Mitt Romney although he doesn't have anything to do with "Fifty Shades of Grey" or maybe he could have been a young Christian (ph) -- what's his name -- anyway Mitt Romney is under fire for his offshore bank accounts, so why does he have them? We'll be back. (COMMERCIAL BREAK)

BURNETT: So more than a year after it is released America is still hot for "Fifty Shades of Grey". Now I have not read the book, but I'm not as bad as OUTFRONT's Chris Maloney who thought that this book was about senior citizens' love lives until this morning -- yes, until this morning. But now we both know that the trilogy which is set in the Pacific Northwest is about the relationship between the barely college grad Anastasia Steele and the too young to be a real billionaire Christian Grey, unless of course he's Mark Zuckerberg.

OK, but here's the bottom line. This trilogy, this is the best- seller list, is expected to sell its 20 millionth copy this week. The top three books on "The New York Times" best-seller list are these three. One out of every five novels sold this year has been one of those three books. And we know that no matter where you've been you've seen people reading this book, planes, trains, subways, the street.

Some reports say author E.L. James is raking in $200,000 a day, but she's not the only making money off of this series, which brings us to tonight's number, which is 2,700. That's the price of the Charlie Tango No Limits Package (ph). I guess she got it out of the book. Authored by the (INAUDIBLE) in Portland. For that price the hotel made famous in the books will recreate the main character's birthday party, which includes dinner for six, roses for the women and a limo ride and a helicopter's tour of the lovely city of Portland, which is awesome.

Now if that's too pricey for you there are less expensive options including three hotels in San Francisco which offer a "Shades of Women" package for just $369 -- for just $369 -- pretty pricey -- you get deluxe accommodations and this special package. (INAUDIBLE) now Maloney knows what the books are about.

Well George Zimmerman is living in a safe house. Who's paying for it and does it add up? We called the local authorities.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT.

We start with stories we care about, where we focus on our reporting from the front lines.

Well, reaction pouring in to President Obama's call for Congress to extend the Bush tax cuts for the middle class. But end them for families making more than $250,000 a year. The Romney campaign says the proposal amounts to a massive tax increase.

Senator Chris Coons, a member of the Senate Budget Committee, said earlier on OUTFRONT, it's not a solution but it's a start.

(BEGIN VIDEO CLIP)

SEN. CHRIS COONS (D), DELAWARE: Most folks would agree that 98 percent of Americans represents a broad range, more than the middle class, up into the upper middle class. So the number that I think the president chose today was designed to strike a balance.

(END VIDEO CLIP)

BURNETT: Senator Coons said he's for people overall paying lower rates if loopholes were closed.

Well, the top Bank of England official testified before a parliamentary committee investigating the rates scandal that caused the top of executives of Barclays their jobs. And we monitor the hearing today. It was British style, I'll tell you why in a second.

Deputy Governor Paul Tucker denied suggestions that government officials pressured him to encourage banks to manipulate the rate that American mortgages are pegged to. It's a rate called LIBOR. When asked if LIBOR manipulation is stopped, Tucker said, quote, "I can't be confident about anything after learning about this cesspit."

That's what I love about the British. You've got to (INAUDIBLE) go on C-Span and just watch it. It's great.

Barclays has paid $450 million to settle charges that its traders manipulated LIBOR. I want to emphasize they manipulated it to be lower that it otherwise would have been.

Well, Palestinian Authority President Mahmoud Abbas has given the approval to have the body of former leader's Yasser Arafat exhumed and tested for radiation poisoning. Last week, a Swiss doctor said investigators have found high levels of polonium 210 on some of Arafat's belongings, including his toothbrush.

Former CIA agent Bob Baer told us that investigators will still be able to find polonium in Arafat's body if he was poisoned. He died in 2004 after suffering what at the time was diagnosed as a brain hemorrhage.

We've gotten more information on Aimee Copeland. The 24-year-old Georgia woman recovering from the effects of flesh-eating bacteria. In a message to OUTFRONT, Aimee's father Andy said she is now feeding herself. She ate in Aimee's kitchen broccoli and cheddar bake.

Aimee left the hospital a week ago and is now in rehab. She lost her hands, leg and her other foot in her fight against the flesh- eating bacteria. She is on her road to recovery.

Well, it's been 340 days since the U.S. lost its top credit rating. What are we doing to get it back?

Well, borrowing more. Consumer credit rose by $17 billion in May, more than economists thought. Revolving credit includes your credit card, rose by $8 billion, the most since November 2007.

And our third story OUTFRONT: Democrats hammering Mitt Romney for holding offshore bank accounts.

(BEGIN VIDEO CLIPS)

SEN. DICK DURBIN (D), ILLINOIS: (AUDIO GAP) United States with a Swiss bank account.

ROBERT GIBBS, OBAMA CAMPAIGN: This is a guy whose slogan is "believe in America," when it should be "business in Bermuda."

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Americans need to ask themselves, why does an American businessman need a Swiss bank account and secretive investments like that?

(END VIDEO CLIPS)

BURNETT: So, why does an American businessmen or anyone for that matter need a Swiss bank account?

So, we asked Daniel Shaviro, a professor of tax at New York University. He said the reasons could range from tax fraud to simply having easy access to money abroad. But he says in Mitt Romney's cases, the benefits are more likely. And we should emphasize, nobody's alleging anything illegal at all here. But secrecy and confidentiality are the main reason, avoiding tax deduction limits. And the Professor Shaviro said also avoiding tax on investment income.

In this case, this could be money that his IRA has invested in bonds. He has a $100 million IRA. So, this could mean significant savings.

William Cohan worked on Wall Street as senior M&A banker for 15 years. Doug Holtz-Eakin is a former director of the CBO, and John Avlon joins me as well.

So, Doug Holtz-Eakin, it's safe to say this is why Mitt Romney has offshore bank accounts, right, to save money?

DOUG HOLTZ-EAKIN, FORMER CBO DIRECTOR: My presume is to make money. I'd be actually quite surprised --

BUIRNETT: That's an interesting way to put my words back at me. Well done.

HOLTZ-EAKIN: No, this is -- this is real simple, I think. And note for the average person whose only account is in a bank down the street, this seems quite mysterious. And it's obviously very easy to demagogue. We've seen that as the White House and others have tried to change the tone (ph).

But all that could be going on here is that Mr. Romney's investment investor who makes his investments for him, he doesn't get to do it, has chosen to invest in some overseas entities. It could be as simple as buying a share of British stock. And when the dividends got paid, he paid taxes on it like everyone else.

Or he could invest in, as you say, something in the Bahamas or the Caymans, an entity organized there, those entities are usually organized there because they want to attract investors from many countries.

BURNETT: Right.

HOLTZ-EAKIN: European, Americans.

BURNETT: But they give you benefits -- for example, we're talking about that debt tax benefit. I mean, if that were the case and we don't know that it is, but if it were to be, a $100 million IRA could be saving a huge amount of tax dollars?

HOLTZ-EAKIN: And IRA invested in the United States isn't taxable until it's taken out for anyone, Mitt Romney or otherwise. So, it has nothing to do with whether it's overseas or not. That's simply IRA. Those are entities that are typically in the Caymans or the Bahamas because the Europeans don't want to put it into the United States.

I mean, look, we are an economy where the president threatens to raise tax every two days. So, they want it on a third-party neutral site. If you want to make some money and do something, you've got to invest there.

BURNETT: All right. William, what do you make of Doug's arguing here? He made a good case.

WILLIAM COHAN, FORMER WALL STREET BANKER: Well, he's articulate. I'll give him that.

But you have to point out here first of all that this was not just Mitt Romney's investment adviser making this decision recently or even in the last four years. These were funds that Mitt Romney were invested in when he was at Bain for, you know, 15 years and that were domiciled like many hedge funds, like many private equity funds in the Cayman Islands, and other offshore areas in order to frankly avoid paying taxes, if they can.

Now, the point of the matter is that if you're an honest person, which let's presume Mitt Romney is, the federal government will fine him and make him pay his taxes no matter where he makes that money on a worldwide basis. But if he were disinclined to report that himself because none of these entities file IRS forms, if you were disinclined to do this himself, then he could easily evade taxes. That's what goes on here repeatedly.

And no one's saying that Mitt Romney is doing that.

BURNETT: Right.

COHAN: But I think the point of the matter is he could do it if he wanted to.

BURNETT: William, would you acknowledge, though, that with the tax code being some 60,000-plus pages or something like that, right, it is that long because people have put loopholes in there. And if you have the time or wherewithal, that it is -- that's where it's there for. You should be using those loopholes. But if he's doing that, what's he doing wrong? COHAN: Well, Erin, he's more than likely playing by the rules. I mean, this is not exactly a transparent situation here. Let's give him the credit -- yes, he is playing by the rules.

But I think to Douglas' question or your question about the IRA that he has, he has $102 million in that IRA, I don't know he did that putting in $15,000 to $17,000 a year. I would like to know what kind of investments he had making that kind of return. That is a big question --

(CROSSTALK)

BURNETT: I think everyone in America would want to know.

John Avlon, but the bottom line here is, why is he doing it? He's been running for president for eight years.

JOHN AVLON, CNN CONTRIBUTOR: He's running for office for Pete's sake.

BURNETT: He knows this doesn't play well. So, why not just close them down?

AVLON: Well, he did close down some accounts but obviously because he gets a tax advantage. He gets some sort of advantage by -- I mean, let's be real about it.

BURNETT: Sometimes when the answer is obvious, the answer is obvious.

AVLON: That's exactly right. So, let's assume the answer is obvious. But why this resonates politically is a matter of relatability.

The Democrats keep returning to this is because they're trying to -- and Mitt Romney is in danger of losing one of the basic rules of politics, define yourself before your opponent does. And this was something we heard back during the Republican primaries. Newt Gingrich said I don't know of a single American president who's ever had a Swiss bank account. So, that's where this narrative start.

Fairly or not, it's about relatability. Can he relate to you if he is a member of the super rich with a Swiss bank accounts? Cayman Islands accounts, Bermuda, et cetera. And that's not to say he's done anything wrong or illegal at all.

BURNETT: Doug, let me just -- final question to you, wouldn't -- this point of why wouldn't he have closed some of this stuff down or even perhaps taken a different stance on the carried interest tax. He could have done things to mitigate this. Do you think he make a political mistake? You advise campaigns.

HOLTZ-EAKIN: Well, I certainly, as I said at the outset, think this is very easy to demagogue, very easy to mislead. I mean, I saw Robert Gibbs on your colleague's show, Candy Crowley, on Sunday and it was borderline character assassination. It's very easy to do. So, there's a real political risk there.

BURNETT: But do you think he made a mistake?

HOLTZ-EAKIN: I want to emphasize -- I want to emphasize that if you put things in a blind trust, you no longer control those investments. His investment adviser may very well have made investments in his overseas entities without him knowing and he's now paying a political price. But that hurts.

BURNETT: But I think we all know, any of the three of us running for president, I'd be like what the -- is in that blind trust? You know, I mean, that's all I'm saying.

All right. I'll leave it there. Thanks to all three of you. Appreciate it.

All right. Our fourth story OUTFRONT: tonight George Zimmerman living in a safe house guarded by a private security team. The volunteer neighborhood man has been out on bond since Friday. He's charged with second-degree murder in the shooting death of Trayvon Martin.

So, why does Zimmerman need this enhanced security and who's paying for it?

Paul Callan is OUTFRONT.

Paul, safe house -- what does this mean?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Good question.

You know, the first time I've ever heard the use of this word in a criminal case was the Casey Anthony case after she was released. You don't hear it normally in criminal cases.

You know what a safe house is? A safe house is where a spy goes. They have encrypted communications. This makes it sound like George Zimmerman thinks he's Jason Bourne and he needs a safe house.

So, I find it to be an odd selection of terminology to describe security.

BURNETT: So who -- why would he need to hire personal security? I mean, the question is here, too, does this terminology have anything to do with who's actually paying for it?

CALLAN: Well, I think it does. I think that by using a term like safe house, it elevates George Zimmerman to the point where he maybe can claim to be representing some national idea or a cause. I don't know what it is, self-defense, if he acted in self-defense, he acted in self-defense. That will be up to a jury someday.

But certainly for fund-raising purposes, there's a certain glamour, I supposed, to have your own private security team guarding you in your safe house which is what his Web site now says. In most criminal cases, and I've been involved in a lot of them, if there's a legitimate, credible threat made against somebody, including a defendant, the local police provide security. You don't need a safe house. And you don't need a private security force.

BURNETT: So, Paul, we called the sheriff's department and asked to try to find out what was happening here. They said George Zimmerman never had a personal request for protection. So, then, who made the decision?

CALLAN: Well, obviously a decision has been made either by Zimmerman or by his defense team that they need security.

Now, what I'm betting is that what he really needs protection against is the paparazzi. His house would be surrounded by photographers and they would be taking his picture and asking him unpleasant questions as he leaves every day. I think that's a greater threat to George Zimmerman probably than some hitman who's going to kill him.

I mean, frankly, Trayvon Martin's family has said that they'll rely on the court system. And the local demonstrations have really died down in Seminole County relating to this case. There are always crackpots saying things on the Internet. But a credible threat that would require a private security force, I have my doubts that it's necessary, Erin.

BURNETT: All right. Thanks very much to you, Paul Callan.

And the mysterious illness that's killed 64 children in Cambodia. We're going to go there live to see if anybody knows what's happening and why these children are dying.

And then, a shark creeps up on a kayaker in Cape Cod -- his first-ever time on a kayak.

(COMMERCIAL BREAK)

BURNETT: We're back with tonight's "Outer Circle" -- where we reach out to our sources around the world.

We begin tonight in Cambodia where a mysterious illness has killed 64 children since April. Doctors say they may have the first key to solving what is behind the deaths. It's called enterovirus 71, a common childhood disease which was discovered in a number of the children who died.

Chief medical correspondent Sanjay Gupta is live in Phnom Penh.

Sanjay, good to see you. What have we learned about this virus and, I guess, whether it's contagious?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, we've learned that 15 of these 66 children that you just mentioned tested positive for this enterovirus 71. So, it's an important clue, as you mentioned. But as you can tell from the numbers alone, Erin, it doesn't explain everything. More testing is still under way.

It's also -- you know, it can be a pretty common virus. So the fact that this could be so lethal here in Cambodia is a little bit of a puzzle as well. Of those 66 children, 64 have died. This is nearly 100 percent lethal.

What's also interesting, to your second question about how contagious, it doesn't appear to be very contagious. Enterovirus typically is contagious. So that's a little bit of mystery as well.

Typically, you'd see if a child has in it a household, a sibling or another young child may get it or it may cluster in communities. That doesn't seem to be happening here. And that's obviously good news, but still leaves a lot of unanswered questions, Erin.

BURNETT: And, Sanjay, I'm curious. I know you spent a lot of time in the hospitals today seeing these children and their mothers. And I'm curious what you were able to figure out or what you think might be the reason why the fatality rate is so high for a disease that you say is really rather common? I mean, how do you make those two things together work?

GUPTA: Well, you know, there's a lot of people trying to answer that question. But I can tell you a couple of things that seemingly are coming to the surface here. One is that this enterovirus 71 could, in fact, be one infection and there could be another infection that's at play as well, Erin. We don't know. They're trying to test for this.

Or it could be that the enterovirus caused a sort of mild infection and the children were treated with some sort of medication that made it worse. This would be an interaction literally between medication and virus in this case. That's the leading sort of theory by one of the doctors that's treated all 66 of these patients.

So -- but we can't say that for sure as of now. This enterovirus as I said, you know, that's an important clue. But, you know, it's still a mysterious thing. And, obviously, they want to solve it to prevent it from continuing to occur.

BURNETT: All right. Well, Sanjay Gupta, thank you very much. You went all the way to Cambodia to see these children and figure out what was happening -- reporting live from Phnom Penh tonight.

And now we go to Afghanistan, where President Hamid Karzai ordered the arrest today of Taliban members who shot a woman execution-style because she was accused of adultery.

Mohammed Jamjoom is following the story and we asked him why they did it.

(BEGIN VIDEO CLIP)

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Erin, officials in Afghanistan say they believe that the woman was killed because two members of the Taliban in that village had had a dispute over here and that they felt that they needed to save face and that they felt that they could save face by falsely accusing a woman of adultery, which is a crime punishable by death in Afghanistan.

Now, the killing has sparked condemnation and Afghan President Hamid Karzai has vowed a manhunt has started and the perpetrators of this crime will be brought to justice. But it must be remember that in Afghanistan, violence towards women is not just committed by the Taliban. And it's quite frequent. And in a report released just this year by human rights watch, it stated that nearly nine out of 10 Afghan women suffer physical, sexual or psychological violence or forced marriage at least one in their lifetimes -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thanks to Mohammed.

And now, let's check in with Anderson with a look at what's coming up on "A.C. 360."

ANDERSON COOPER, HOST, "A.C. 360": Hey, Erin.

Yes, we're keeping them honest tonight in the program. We have an exclusive report about crime at sea and how much more common it is than you may realize, about how little protection there is for those victimized on an ocean cruise. And in the end, how little justice some people may be getting.

Also, the divorce between Katie Holmes and Tom Cruise is final. It was settled apparently amicably. A former member of the Church of Scientology talks about her own divorce. How that happened in the church and what it did to the family.

Those stories and raw politics, President Obama's election year tax cut proposal today, all that, and the "Ridiculist", at the top of the hour, Erin.

BURNETT: Right. Anderson, see in just a few moments.

And now, our fifth story OUTFRONT: Sharks in the water. And not just any sharks, because we're talking about a great white 12 to 14 feet long that was cruising off the waters of Cape Cod. That's where first-time kayaker Walter Szulc was vacationing when he found himself -- I mean, it's like you can hear the "Jaws" music, face-to-face with a great white on Saturday. It was right out of "Jaws."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You're going to need a bigger boat.

(END VIDEO CLIP)

BURNETT: Szulc could have used a bigger boat. One hundred fifty yards from shore, he was paddling for his life as the shark began following him off the coast of Nauset Beach. So, this is what it was like. Fortunately, he made it safely and he is OUTFRONT tonight.

Good to see you, sir.

I have to say, that picture is just -- I can hear the sinister and frightening music. So, can you tell me when you noticed this shark was behind you?

WALTER SZULC, JR., SURVIVES CLOSE CALL WITH GREAT WHITE SHARK: Yes, I noticed the shark when the man on the kayak -- I'm sorry, on the surf board pointed it out with his paddle. Until that point, I had no idea. I was just concerned with landing the kayak without dumping it.

BURNETT: Thank God you didn't dump it. I mean, was this your first time out in a kayak?

SZULC: It was my first time out in the ocean on a kayak. I have been on a kayak when I was younger, but it was on a lake. So --

BURNETT: OK. So, can you tell me what happened to your mind, your heart, your stomach, your body, when you turned around and saw the fin?

SZULC: I was a little freaked out. It was -- it was a quick moment. I had to react. So, I pretty much looked at it, look down, saw the body there. I didn't se the head. I think that was under the kayak. So at that point I just paddled. Fortunately, I had plenty of practice time so --

BURNETT: Wow, so we're looking at the picture now. We can see the fin and your kayak. You're saying that he was -- that was probably 10, 15 feet away, so literally part of the shark was under you?

SZULC: That's what it seemed like when I looked back. I saw the body. I didn't see the head. So, I mean, it was a quick glance and I realized I need to move or the shark's going to do what it's going to do -- which I suppose it could have anyways.

BURNETT: Yes. I mean, I'm just wondering why it didn't. Maybe it was just curious about you. I mean, I have no -- it's just such a miraculous thing.

One of the things I know you talked about recently when your daughter was on Cape Cod had said, hey, don't worry about sharks, no problem, don't worry about them. I guess you kind of have to have a little problem there now.

SZULC: Actually, my daughter was a little concerned with the sharks. My sister had texted us we should watch out for the great whites. We sort of made a little joke of it. I told her what was the chance, you know, of bumping into a shark, the amount of people in the water and the amount of sightings that there were.

So we were kind of mocking the fact we were going to see the shark and I think I called it out.

BURNETT: So, Walter, have you seen the pictures of your shark from the air?

SZULC: No, I have not.

BURNETT: OK. Well, you got to look at them because our viewers are looking at them and it's pretty frightening.

So one final question to you, are you going to go back in, go back into the ocean?

SZULC: I've already been back in.

BURNETT: Already?

SZULC: Went in a little ways that same night.

BURNETT: What? Really?

SZULC: Not far, but we went in a little bit. Yes.

BURNETT: Well, good for you. I have to say.

SZULC: From the way I understand it, I'm assuming I brought the shark in, you know, he followed me from pretty far back so it didn't seem like the people swimming were in danger. I clearly might have been but --

BURNETT: Yes, obviously you were. I have to say I give you credit. I would never go in the water again. But then again, I'm like your daughter, I'm a little nervous about sharks.

All right. Well, thank you so much. Thanks for telling your tale. That was certainly the picture of the day.

SZULC: Thank you. Can I just say hello to my kids, Jacob and Skyler, they're watching right now, and a little shout out to the people and friends and family in New Hampshire.

BURNETT: You got it.

SZULC: And thanks to Hearts Turkey Farm for letting me stay at their place.

BURNETT: Oh, all right. Well, they all heard it, you said it.

All right, thanks so much. We appreciate it.

SZULC: All right.

BURNETT: And still OUTFRONT, a nation celebrates a birthday but there was not a whole lot to celebrate. We're going to look to the bright side. The E-Block is next.

(COMMERCIAL BREAK)

BURNETT: So, the world's youngest officially recognized nation turned one today. The Republic of South Sudan, a country in Africa, has a population of 8 million people who speak -- pause here -- 60 different languages. Unfortunately in its first year of existence, things have been difficult for South Sudan. A dispute with the other Sudan led to a shutdown in oil production, an industry which accounts for 98 percent of the nation's economy. And 200,000 refugees have moved into refugee camps.

South Sudan is not alone. There are refugee crisis tonight in the Democratic Republic of the Congo, and Mali, too. And while problems like these plague many African countries, I wanted to close tonight's show with a thought about another equally real and true story about Africa.

So I visited places in Africa that are just bursting with entrepreneurs. And one of them is Nigeria. Lagos is like little New York teeming with ambition and people.

And hours ago, Nigeria clenched its first Olympic berth in basketball. And they were the underdogs, weren't supposed to win it. It's the perfect example of Nigerian ingenuity.

It was late Otunba Duro Agbetusin. Now, I met him once when I was in Nigeria and I was inspired by him. You see him here. He was the man behind DMT, dignified mobile toilets.

Otunba had a great sense of humor about his business. His business card says blank business is serious business. And so it is.

He told me that, quote, "45 million people in this country wake up every single day and they've got to go do their business." And he was there to give most of them for the first time a better way and he made a great living doing it. He saw his country's problems and found a solution.

And there's a rising new class in Africa and it is worth remembering tonight too.

As always, thanks so much for watching. We'll see you back here.

"ANDERSON COOPER 360" starts right now.