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ERIN BURNETT OUTFRONT

Mitt Romney's Tax Plan; Amtrak Advertisement; Covert Operations in Syria?; Interview with Senator Toomey

Aired August 1, 2012 - 19:00   ET

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


ERIN BURNETT, HOST: OUTFRONT next a report tonight says Mitt Romney's tax plan would raise taxes for 95 percent of Americans. Does it add up?

And as Chick-fil-A faces outrage over its stance on gay marriage from some quarters, Amtrak unveils new ads, "ride the pride". We'll explain.

And TSA agents spot and rescue a kidnapped woman going through security, let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, ouch. A report today from the Tax Policy Center says that Mitt Romney's tax plan would raise taxes on 95 percent of Americans. Now, Mitt has promised a 20 percent tax cut to everyone. So whose math adds up -- Mitt's or the Tax Policy Center's? It's sort of like an Olympic boxing match.

Today, the Romney camp threw a punch fast and early, pointing out that one of the authors was a former aide to President Obama. As the Romney campaign wrote to us, that is, quote, "hardly objective".

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BURNETT: True, one round to Mitt. But alas for the Romney campaign, we checked the other two names on the report, and one author was a former aide to George H.W. Bush, the final one worked for both Bush and Obama.

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BURNETT: Round two to Barack. So let's lay out the substantive charge, the report which I've got right here says that if Mitt Romney's plan becomes reality, tax revenue, because he's going to be cutting marginal tax rates, will drop by $360 billion in the first year alone. That means if it's revenue-neutral, someone must pay $360 billion more. Again, that's if it's revenue-neutral which is something Mitt Romney specifically promised in February.

Romney's economic honcho, Columbia Business School Dean Glenn Hubbard tells OUTFRONT today that the money will come from an economy that is growing more quickly than it would under Barack Obama. Specifically, four percent a year under Mitt Romney. That is nearly triple the rate of President Obama's most recent quarter. And just to make it very clear, everyone, the last year in which this economy grew four percent or more was the year 2000.

That's an aggressive number and the Tax Policy Center, again, this report, says, no way. I wanted to get to the bottom of it, so we enlisted our "Economic and Tax Strike Team" and we got five very long and detailed replies from some of the top tax attorneys, professors and economists in this country. On the key question of whether the tax cuts Mitt Romney promises will get the economy growing fast enough to generate all that revenue, New York University's Daniel Shaviro (ph) told us that quote, "there really is no conceivable way that GDP growth can make a significant short-term difference to the study's finding."

Now, Conrad Dequadros (ph) of RDQ Economics was a bit more sanguine. He wrote "The Romney's plan is a far more efficient tax plan than our current one and cutting marginal rates and eliminating deductions would boost economic growth and raise tax revenue." Now our experts by and large said look we can quibble with some of the specifics in this report, but overall, they were not able to dismiss its conclusions.

The bottom line is this -- we need more detail from Mitt and we tried to get it. Dean Hubbard was very helpful on e-mail. The Romney campaign, though, was not able to make anyone available to go through these crucial numbers OUTFRONT and just get the bottom-line facts and resolve this. For example, they could have explained that, yes, everybody, some people are going to pay more in taxes under our plan because right now, half of Americans pay no federal incomes taxes at all.

So if we broaden the base, that means some people who are paying nothing will pay something, sure, that's a tax increase, at least in the first year. So, yes, the Tax Policy Center analysis is incomplete. It's imperfect. But to score a knockout, like Sylvester Stallone in "Rocky III" in that great scene --

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BURNETT: That would be a knockout. Romney needs to lay out where he gets the $360 billion without raising effective taxes on a whole lot of people. So he could be the victorious one because here's the math on votes. If you're actually raising the tax burdens on 95 percent of Americans, you are not likely to win the job of president of the United States of America.

Joining us now is Stephen Moore of "The Wall Street Journal" Editorial Board and Matt Bennett, cofounder of Third Way and former aide to President Bill Clinton -- great to see both of you tonight.

UNIDENTIFIED MALE: Hi, Erin.

BURNETT: Stephen Moore, let me start with you. President Obama saw this today. Obviously it played to exactly what he wanted to hear. Here's what he had to say at a campaign stop.

(BEGIN VIDEO CLIP) BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Just today an independent, nonpartisan organization, they crunched all the numbers. They looked at his plan. They found that if Governor Romney wants to keep his word and pay for this plan of -- this $5 trillion tax cut, the only way to do it is to cut tax breaks that you, middle class families, depend on.

(END VIDEO CLIP)

BURNETT: Stephen Moore, he needs to fight back, don't you agree to just lay it out more clearly? How can he do that?

STEPHEN MOORE, WSJ EDITORIAL BOARD: First of all he can't allow the liberal groups like the Brookings Institute, which may be nonpartisan, but it is a liberal group, to say that this is a tax increase on anyone. In fact as you know, the centerpiece of the plan is to cut the tax rates across the board by some 10 or 15 percent --

BURNETT: Yes, on the marginal rates.

MOORE: That's a tax cut -- (INAUDIBLE) the marginal rates. Look and I do think that grows the economy. And Erin, you know this. I'm a supply sider. I think lower rates do provide more growth for the economy and I don't think it's unreasonable to think with this and other growth policies we could have a four percent growth rate which does generate a whole heck of a lot of revenue over the next -- maybe not in the very short term, Erin, but over but the next decade or so, you get a lot of windfall revenues from that kind of growth rate.

Where I will fault Mitt Romney is I agree with you and I don't think he's done a good enough job of explaining, look, we're going to have to close some of these loopholes. We're going to have to get rid of some of these big (INAUDIBLE) and special interest deductions in the tax code. By the way, about half of those revenue lost from all those tax deductions, those are taken by the people in the top three percent, so you can do it in a fair way --

BURNETT: Fair point.

MOORE: Yes.

BURNETT: Yes, that's right. You know it's interesting when you look at the joint economic committee numbers, Matt, I'll throw them up here, one of our -- Marty Sullivan (ph), one of our top tax attorneys pointed this out as well. If you get rid of the mortgage interest deduction, charitable deduction, state and local taxes, now obviously this will upset some middle class families, but they do disproportionately help the wealthy in this country, you more than make up for the 360 billion. In fact, you get $431 billion. He has money to spare.

MATT BENNETT, SVP, THIRD WAY: The problem, though, is that Mitt Romney treats taxes, his own taxes and his tax plan like they're some sort of state secret. He won't release his own income taxes and he won't release details on the tax plan. So your experts and the folks at Brookings had to make assumptions that they're not sure about as it relates to Mitt Romney's tax plan because he hasn't made clear what he intends to do.

But the assumptions that they used in the study that you cite are very fair ones. He said he wants to stay revenue-neutral, as you point out. He said he wants to lower the marginal tax rate. He said he wants to get rid of certain deductions. And so they conclude and your experts back them up that what that means is the rich get a pretty big tax cut and the middle class and lower income folks get a pretty big increase in taxes.

BURNETT: Yes, Stephen Moore, I'm also curious where you get the confidence -- and I'm glad to se it. I think everyone's glad to hear it. But the last time this economy grew at four percent annually, which is what Glenn Hubbard (ph) said they're expecting in year one of the Mitt Romney tax plan, we're coming off 1.5 percent last quarter, was the year 2000. I mean I know that --

MOORE: Yes. OK.

BURNETT: -- you're hopeful that we there, but that seems rather aggressive.

MOORE: Well it is, but you know what? This has been an extremely deep recession, one of the deepest recessions since the great depression. And we've had no recovery to speak of. And usually when you lose you know 10 percent of GDP like we did you boom out of these things and we just haven't had that boom yet. I do think when you take into account -- I mean look under Reagan at this stage of the expansion rate, we didn't have four percent growth. Erin, as you know, we had eight percent growth. So I think we can aspire to those high rates of growth.

I do think fixing the taxes and the other point I think that the two of you leave out is if Republicans win this election, in fact, they're going to have a vote on this tomorrow about expedited procedures to move next year right to tax reform, to fix -- to blow up the whole tax code and start over, with some of those eliminations and deductions you talked about, with getting the rates down. And I think everybody and all sides -- I think that everybody agrees that we can do much better than the current tax code we have now that I think exports jobs.

BURNETT: That is true. Final word to you Matt, politically can anyone make the point that yes I am going to raise taxes on a lot of people because a lot of people are not paying taxes at all right now or is it that a political non-starter?

BENNETT: No, of course they couldn't and that's why he isn't and that's why he's been very secretive about exactly what his plan would do. And it's why Glenn Hubbard had to be fairly circumspect about what the plan would do. He can't say what the details are because the details are politically devastating for Romney.

BURNETT: All right, thanks very much to both of you. We appreciate it. Everybody check out the report yourself. Go ahead and let us know what you think and what you think Mitt Romney should do next. Well OUTFRONT after this, as Chick-fil-A faces backlash over its gay marriage -- coming out on gay marriage, Amtrak rolls out ads featuring gay couples "ride the pride", they say.

Plus new details coming out about the American role in Syria, we've got an exclusive report the president could be supporting the rebels.

And Penn State says it's not going to use state funds to pay a $60 million fine related to the Jerry Sandusky scandal. Does that add up? We follow the money.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT on the day when Chick-fil-A is back in the news, crowds of people showing their support for Chick- fil-A's President Dan Cathy in his stand against same-sex marriage. They were all out and about today. The other side is having a kiss-in later in the week, so Chick-fil-A will be the center of lots of argument this week.

But today, this is what we saw two ads from Amtrak. The theme of the ads is "Ride with Pride". It is the name of Amtrak's new quarter million dollar advertising campaign aimed at gay and lesbian families. You can see the ads here. As you can you've got two dads and a child and then you have others with two moms and a child they feature same- sex couples with children. And the ads say that children ages 2 to 15 get a 50 percent discount when traveling with an adult.

Now what's interesting about this timing is it is the first time Amtrak has included gay families in its advertising material. Amtrak is a government subsidized company. It received $1.4 billion this year from taxpayers. So are they using your tax dollars to push what some may believe is a hot button social issue. I think it's fair to say it is a hot button social issue. You know some people may agree with their point of view, other people may not.

OUTFRONT tonight John Avlon, Michael Waldman, former senior adviser and speechwriter for Bill Clinton and Hogan Gidley, Republican strategist. All right, Hogan, let me start with you. Amtrak says these ads are not politically motivated.

HOGAN GIDLEY, REPUBLICAN STRATEGIST: Of course. Of course --

BURNETT: Of course I'm starting with you on this one. Do you buy it?

GIDLEY: That's right. That's right. I wouldn't say that. I think you know people advertise for different reasons. Obviously places like Target and Starbucks have been using homosexual couples in their advertising for years. So there's really no departure from where a lot of these companies are going and we'll let the market decide.

I mean I think the big problem here is using taxpayer dollars to do it and to make some type of political statement. Obviously that's what is going to turn people on to this topic and make people a little bit angry and come out against it, I would imagine, from the right. And I imagine it will happen pretty soon. You know but Chick-fil-A is a private business.

They can do what they want to do. Amtrak obviously using some taxpayer dollars here, that's going to be a serious issue for the right and I imagine Amtrak will become somewhat of a rallying cry, a whipping boy, if you will, for our side and we'll come out and try to you know show people that we disagree with that type of advertising and that type of use of taxpayer dollars.

BURNETT: John?

JOHN AVLON, CNN CONTRIBUTOR: There's a fundamental difference. Chick-fil-A is a private company, as Hogan put out and frankly people can protest the beliefs of the individual of running that company. But it's a private company. Fundamentally, it's different with Amtrak because you could argue they're trying to push a social agenda or you could say they're taking a stand against discrimination. That is a role entirely consistent with a government subsidized entity. It is consistent to say -- send a message of inclusion and support for civil rights, so this is a lot bigger than politics and social issues. So it's not an apples-to-apples comparison at all.

MICHAEL WALDMAN, BRENNAN CENTER FOR JUSTICE, NYU: In fact, conservatives for years have urged Amtrak to behave more like a private business. Now Amtrak is behaving like a private business, marketing its services to consumers. And when private businesses began including African-Americans in ads in the early 1960's that was considered shocking. Now of course we would say, well of course they will. This is -- this marks a real tectonic shift in kind of American social thinking and business is often ahead of the curve on this.

BURNETT: Which I mean you could say that's something to celebrate. The timing, though, does seem -- I mean you know the president comes out -- how long does it take to get an ad and put it together? Probably a few weeks, a month, whatever, so about six weeks ago he comes out and says I'm for gay marriage. Now the taxpayer's funded Amtrak comes out with "Ride with Pride".

WALDMAN: You know -- well you never know. You never know. I don't think anyone has ever -- I don't think anyone has ever accused Amtrak of moving so quickly --

(LAUGHTER)

BURNETT: Oh, that is a fair point.

UNIDENTIFIED MALE: Wow.

BURNETT: That is a fair point. I mean Hogan, what do you think about the point that John Avlon made, which is it would be consistent with a government agency to be pushing something that is civil rights and nondiscrimination targeted which you know some people feel this issue very much is? GIDLEY: Right. I understand the point. I just think you know in this politically charged environment we live in, this is kind of a gift for the right in a sense that we can come out after this hard. We can come out after this is an abuse of taxpayer dollars and I imagine people will do that as we move into the fall and as people start paying attention to these types of things.

BURNETT: John and Michael are both champing at the bit.

AVLON: Hogan -- Hogan, do you think they should as a political strategist --

GIDLEY: I don't think that -- no, I don't think it's necessarily a good thing for them to come out and waste time and energy talking about stuff like this at this point. I do think, though, there will be a sect on the right who will be very excited about coming out after -- I use that -- excuse the phrase -- but coming out after this advertising plan that they've put out. But you know I don't think it's necessarily all that important at this point.

I think that this has been going on for a long time with other companies. Obviously they've used some taxpayer dollars here so people can use it as a whipping boy. But for the most part we're going to be trying to focus on the economy and not these side issues heading into the fall.

WALDMAN: I think that will be difficult because this isn't saying pro-marriage or anti-marriage. This is normal American family life, something to celebrate.

BURNETT: Right.

WALDMAN: And you have to kind of really ramp up the negativity and hatred to attack these ads.

AVLON: And what they're advertising is kids ride --

UNIDENTIFIED MALE: No, no, no, no, no --

AVLON: Kids ride half off when they're traveling with a parent.

BURNETT: Right. They're not saying --

UNIDENTIFIED MALE: This is not a special promotion --

BURNETT: I mean they are saying "Ride with Pride", though. I mean --

AVLON: Yes, but it's not a special discount for same-sex couples --

(CROSSTALK)

BURNETT: No, no, it's for any adult with any child.

AVLON: That's right. That's right. GIDLEY: Right, but negative and hatred are two different things. I mean if I want to come out against it that's one thing, but it's the same thing. You call Dan Cathy homophobic because he believes in marriage between one man and one woman. That's ridiculous. He's not scared of people, of homosexual people. He doesn't not serve homosexual people or not hire homosexual people.

BURNETT: That's fair.

GIDLEY: He just comes out and says I'm for marriage between one man and one woman. What's the big deal with that? That's not hatred.

AVLON: Hogan, that's absolutely fair and frankly I think you know this is nothing that should be legislated in the case of Chick- fil-A and various cities, but sometimes negative and hatred do overlap, you do agree?

GIDLEY: Oh of course, of course.

AVLON: OK. That's a big concession when it comes to some of these organized protests against pro-marriage equality organizations or institutions --

GIDLEY: Well hatred is negative.

(AUDIO GAP)

AVLON: Yes, it is.

GIDLEY: Marriage between one man and one woman -- Rick Santorum did the same thing. That doesn't mean he hates gay people.

BURNETT: Right.

GIDLEY: It just means he doesn't believe marriage is between two men or two women. It's one man and one woman. That's you know thousands of years belief.

BURNETT: All right, well thanks to all three of you. I must say I gave Amtrak too much credit and you were correct. Amtrak sent us a statement -- I'm sorry, Amtrak, but you asked for this. "This is not a social agenda. The current ads are part of a spring/summer campaign that Amtrak has executed to target the LGBT community since 2010." So it took them two years. OK, maybe that's why they lost half a billion dollars, OK.

Sorry guys -- next, breaking news on the U.S. role in Syria and President Obama supporting the rebels. And the U.S. Post Office has until midnight to pay a $5 billion tab, so what is going to happen when they fail to pay it?

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT breaking news, CNN has learned that President Obama is authorizing covert American support for the rebels in Syria. This comes as at least 170 people were killed in the streets today, according to an opposition group. It's important to always add that caveat. CNN's Elise Labott is OUTFRONT tonight. She broke that news and Elise what kind of support has the president authorized?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Erin, we understand what it's called is a covert finding, an intelligence finding, which basically allows the CIA and other U.S. intelligence agencies to provide support for the rebels. We have to be careful to note this is not military assistance in the traditional sense of weapons. The U.S. not ready to arm the rebels, leaving that to allies like Saudi Arabia and Qatar. But what it means is that the U.S. could provide clandestine assistance, intelligence, and as you see it you know we understand this could have been in place for several months already.

And we understand that the U.S. has been helping Saudi Arabia and Qatar vet some of these groups because one of the complaints is that the U.S. doesn't know who it would be arming. So they're trying to find how to get the weapons into the right hands so countries like Saudi Arabia, like Qatar can do stuff like that. And also providing intelligence on what kind of troop movement Syrian troops are making so that opposition rebels are not found in a difficult situation -- Erin.

BURNETT: All right, well Elise, thank you very much. Elise breaking that story for us tonight and obviously touching on the crucial points. There have been so many reports that al Qaeda has infiltrated perhaps some of those groups. That arming the rebels in Syria is not a simple and clear-cut thing.

Next the Federal Reverse says it's not going to give us any more. No more drugs from Ben and no No's (ph) who can come to the rescue, but will they? They come OUTFRONT.

And how specially trained TSA officers rescued a kidnapped woman who was passing through an airport.

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about, where we focus on our reporting from the front lines. First a Maryland man allegedly who made threats against his workplace has been charged. State officials tell us that Neil Prescott has been charged with misuse of a telephone, which is a misdemeanor. According to local police, Prescott allegedly told a supervisor over the phone, "I'm a Joker, I'm going to load my guns and blow everybody off."

You may recall that the police chief came on this show and said that the man had 25 guns, and arsenal, thousands of rounds of ammunition. He said he intended to make formal charges. Some may be disappointed that had there were this few.

He will be formally arrested once he's released from the hospital. He's undergoing mental evaluation now. If convicted, the maximum sentence for that charge is three years in jail, a fine of $500, or both. It's pretty frightening. Secretary of Defense Leon Panetta is in Israel tonight. Today, he visited the, quote, "Iron Dome". It's basically a missile defense shield and he also had meetings with Prime Minister Benjamin Netanyahu. A big topic of discussion was Iran.

But here's what Benjamin Netanyahu had to say about the need to do something about Iran soon.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAEL PRIME MINISTER: Right now, the Iranian regime believes that the international community does not have the will to stop its nuclear program. This must change and it must change quickly because time to resolve this issue peacefully is running out.

(END VIDEO CLIP)

BURNETT: As a response, Panetta says the United States, quote, "will not allow Iran to develop a nuclear weapon, period."

Meanwhile, the secretary of state, Hillary Clinton, has started a major tour of a crucial continent, Africa. She's going to be visiting many countries. She starts in Senegal. She's going to be talking about economic growth, also talking about democracy. Democracy is a crucial issue, especially in Mali, where al Qaeda is rising.

The secretary address that had during a speech today:

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: By some estimates, this could set back Mali's economic progress by nearly a decade. It certainly created a vacuum in the north in which rebellion and extremism have spread, threatening not only people's lives and the treasures of the past but the stability of the region.

(END VIDEO CLIP)

BURNETT: It's a fair assessment.

Other stops on the secretary's trip include South Sudan, Uganda and Kenya.

Well, the biggest bankruptcy since Lehman Brothers may end up actually breaking even with customers. Customers of MF Global who lost their money will likely get most of it back, at least that's what trustees who are overseeing the process told the Senate Agriculture Committee today. They actually said that customers in this country have already gotten 80 percent back of what they lost.

And sure, that's good news but we watched the hearing. And there was outrage that no one from MF Global has been charged with anything yet, including its famous CEO, Jon Corzine, who is formerly a senator, governor of New Jersey, and CEO of Goldman Sachs.

Well, it's been 360 days since the U.S. lost its top credit rating. What are we doing to get it back?

That brings me to our fourth story OUTFRONT -- your move, Congress. The Fed today announced it won't take any further action to stimulate the economy, which puts the ball back in Congress' court to do something about the fiscal cliff and the debt crisis in this country.

And yet, just two days before lawmakers take a month-long vacation, our elected officials spent the day holding dueling and symbolic votes on the Bush era tax cuts, knowing full well that if you want to extend them in full, that won't pass with Democrats, and if you want to just extend them for people who make less than $250,000, that won't pass with Republicans. So they spent a lot of time voting on nothing.

Fed Chairman Ben Bernanke has made a point of saying he can do only so much and Congress needs to act.

(BEGIN VIDEO CLIP)

BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: The most effective way that the congress could help to support the economy right now would be to work to address the nation's fiscal challenges. I think it's important that in the short term that Congress work effectively to address the debt limit and the fiscal cliff.

Just delaying everything, just saying we're not going to do it, put it off a year, I think that would be a very bad outcome.

(END VIDEO CLIP)

BURNETT: OUTFRONT tonight, Republican Senator Pat Toomey of Pennsylvania, a member of the super committee, which obviously failed to come up with a deal last summer to save us from this crisis.

I spoke to him just moments ago and started by asking him to respond to Ben Bernanke's very clear statement that Congress is who must act.

SEN. PAT TOOMEY (R), PENNSYLVANIA: I think the problems that affect our economy are not fundamentally monetary in nature. So I'm not in favor of the Fed going through yet another round of what they call quantitative easing, which really is a way of printing money. The Fed's already bought two-thirds of the deficit that we were in last year. I think that's a dangerous policy.

I think the problems are fiscal. That means -- that is to say the government's spending too much money. I think it's a threat of a huge tax increase, that's a real problem that we should address.

And I think it's regulatory. We have an avalanche of new regulations that are preventing job growth.

So I would prefer Congress act. Unfortunately, as you know, we appear to be locked in this gridlock. BURNETT: Definitely, appear to be locked. Just looking at the past couple of weeks, a lot of time has been spent in the House and in the Senate. With each party voting on its tax policy, a tax policy that they know is dead on arrival with the other party, the president's Democrats saying, we're going to vote a plan where everyone who makes over $250,000, the tax rates go back up. Republicans voting for a plan that will keep tax rates lower for everyone.

That's a lot of time wasted, though, isn't it? Because neither one of those blanket points of view are going to prevail?

TOOMEY: Well, that appears to be the case now. But of course, as you know, 44 Democratic senators and the Democratic president of the United States less than two years ago voted to extend all the current tax rates because the president argued at the time, the last thing you want to do is raise taxes in a weak economy.

Well, today we have a still weaker economy. And so, the logic still prevails. And I'm disappointed that the Democrats have done this complete reversal for apparently political motivation, frankly.

I think what we should do is at least one year extension of current rates with instructions to the committees to enact pro-growth tax reform.

BURNETT: Now, the president has, to be fair, he's cut agencies. He has put a lot of things forth on that front. But just assume for a second that the president wins. You end up in the same sort of gridlock that you're in right now. Are you then going to accept that an increase in revenue, i.e., some people paying more taxes than they're paying now, is just inevitable?

You're willing to make that deal as part of a grand bargain?

TOOMEY: You know, I'm not going to negotiate now on the deal for a hypothetical outcome of the election. But if you recall back on the super committee, I was the one that did put revenue on the table, not because revenue is economically or fiscally or mathematically necessary. But it was a huge concession I was willing to make because I know it was politically necessary because the other side is so insistent on raising somebody's taxes.

I hope we can avoid that because it will do damage to the economy. What's broken, what needs to be fixed, our entitlement programs that are out of control. You know, in the last 10 years, federal spending has doubled. We can't continue spending at this pace. That's the problem.

You know, you could double all income taxes overnight and you'd still be running a budget deficit. So, we can't tax our way out of this, we've got to restructure the programs that are broken.

BURNETT: It's a fair point but it does seem to fly in the face of something else you said before, which is you don't want the defense cuts. But that's an area where federal spending has surged, thanks to the wars in Iraq and Afghanistan. We're at record levels for defense spending. It's an area that seems ripe for the cutting. And even with the sequestration, we're not cutting as much as George H.W. Bush and about the same as Ronald Reagan did.

How can you say you want cuts in spending and try to fight against the defense cuts?

TOOMEY: First of all, I've supported the premise that the Pentagon budget has to be on the sable. Can't be sacrosanct.

However, but providing for national security is arguably the number one obligation of the federal government. Actually, I think it is.

So what we ought to ask ourselves is what does it cost to execute that mission of providing national security? And whatever that is, that's what we have to pay.

BURNETT: As a matter of principle, when you look at the fiscal 2012 actual spending by the OMB in this country, we spent more on defense than we spent on health care, Medicare and Medicaid. Is that something sort of as a moral question that you think is fair? It would seem that economic security and health security is an important part of what makes a country strong enough to have the defense that we have.

TOOMEY: I kind of would look at it the other way around. Erin, you know, for most of the history of this country, we had a defense budget. We didn't spend anything on those things. They didn't exist because it was always acknowledged from the formation of the country that the first obligation of the federal government is to defend the American people.

BURNETT: Right. But I mean, in terms of the concept that if your economy isn't growing and people aren't better off than their parents were, that you don't have a fundamentally strong homeland economically, what do you have to defend?

TOOMEY: Well, that's a valid point. I mean, ultimately, our national security rests on our economic security.

BURNETT: Senator Toomey, final question, do you have night where you wake up in a cold sweat, worried about your vote on that super committee? Because it was your committee hat has put us in this position.

TOOMEY: And as you know, Erin, I was the one person who put together a comprehensive proposal that included new revenue, which was excruciatingly difficult for me to do, met the Democratic demand for revenue halfway, asked for the most modest spending cut, would have reached our goal of the $1.2 trillion, which was the statutory goal. All the Republicans agreed to support my proposal, despite how difficult that was. And the Democrats walked away from the table.

So I have a clear conscience about the work that I put into the super committee. BURNETT: All right. Senator, thanks very much. Good to see you.

TOOMEY: Thanks for having me.

(END VIDEOTAPE)

BURNETT: All right. Well, now, two TSA agents at Miami airport rescued a woman from two kidnappers as she was checking in for her flight.

Let's show you the surveillance video. This happened on July 5th. Basically as you can see, we're zoning in on what you should watch. There were behavior detection officers for the TSA. They spot add 25-year-old woman who was trembling. Apparently she was trying to hide facial injuries at a ticket counter.

After separating her from her travel companions, they learned that she had been beaten. She said she was being held against her will.

OUTFRONT tonight, Mark Hatfield. He's TSA federal security director for Miami International Airport.

Mark, thanks for coming OUTFRONT and appreciate your taking the time.

So, who are these behavior detection agents? How did they pick this woman out? There's a lot of people who look upset, disturbed, nervous, going through security.

MARK HATFIELD, TSA FEDERAL SECURITY DIR. FOR MIAMI INTL. AIRPORT: Well, one could argue that the stressful environment of an airport can cause that in a lot of people. But what they're trained to do and they do receive a very rigorous training protocol before they get certified to do this job is they look for indicators, both voluntary action, involuntary actions, facial gesture, facial motions, and a wide variety of body language, if you will, as they practice this behavior detection science.

And in this case, there was a rather overt initial indicator, the woman was, as you said, trying to hide her face, which seemed that they watched her a little bit longer. As it progressed, the point value of her situation increased pretty rapidly. And it wasn't long before they called in local law enforcement and the rest is in the police report.

BURNETT: What do you mean point value? I mean, is that a specific term where you look at certain things and ascribe certain points --

HATFIELD: No, they -- the practice of behavior detection, the officers practice a mental mapping of individual behavior. So if somebody was just covering their face, say, or looking nervous, that in itself wouldn't take them to a police referral. They kind of take it in steps so that they have a way of doing a detailed evaluation. And in this mental process when they get to a certain threshold, then it's time to refer to police.

BURNETT: Have you busted, for lack of a better word, this sort of thing before?

HATFIELD: Well, this is the first kidnapping that has been thwarted in this airport and across the country, as far as I know. But I can tell you that as far as other crime, other criminal activities, it's been sort of a collateral benefit of this program.

Their focus is very narrowly on terror behavior, individual that is may be planning or in the process of conducting a terror attack. But in that practice, they do get sort of a collateral catch, if you will, of other people in this range from money launderers, drug smuggler, even child pornographers, other people involved in criminal behavior.

There is a parallel terrorism as a crime. And so, those indicators that would give away a terrorist plot or have in fact given away other criminal acts.

BURNETT: I understand, I mean exactly what happened here is sort of dispute. People are trying to figure out, whether it was a dispute between the individuals, something with a boyfriend -- I mean, it's unclear exactly what happened. But that's not your group's job, right? If someone's there against their will, it doesn't matter to you what was going on behind the scenes?

HATFIELD: Right. The important part here -- it's the hand-off. The TSA officers, the behavior detection officers, have a very defined job, they have a narrow focus. The way the program is structured, when it gets to a certain level where either a crime is possibly be committed or even worse, if it is an act of terror, we partner very closely with local law enforcement agencies across the country. It's a very successful model we've developed over the last ten years.

So, that handoff is a critical point and element of the program. That's exactly what these officers did here in Miami and to the extent that it helped this woman in distress and may have saved her life, it was a success.

BURNETT: All right. Mark, thanks again. We appreciate it.

HATFIELD: Thanks very much.

ANNOUNCER: This is CNN breaking news.

And we do have breaking news just crossing right now. CNN affiliate KMGH is reporting the psychiatrist who was treating the alleged gunman in the Colorado movie theater shooting was so concerned about his behavior that she notified the University of Colorado behavioral evaluation and threat assessment team.

This is really, really important information because sources are saying that Dr. Lynne Fenton, the woman you're looking at there, she was the one who was treating James Holmes this spring, had concerns in early June that he could be a threat to other people.

To make it clear, that was six weeks before the shooting. She contacted several members of the threat assessment team in separate conversations. Again, according to our affiliate KMGH, sources say officials at the university never contacted Aurora police, though, before the July 20th killing, which, of course, makes this story even more tragic.

OUTFRONT next, following the money in the Penn State sex scandal. The school says it will not use state money to pay a $60 million fine. But the fine could get bigger and bigger and bigger. Does that promise add up?

(COMMERCIAL BREAK)

BURNETT: So, I feel for the U.S. Post Office, it has until midnight to pay the government $5.5 billion or default. Unless Congress magically comes up with a legislation, that's what's going to happen.

Now, the post office says, sure, we're going to miss our payment today and guess what? We're going to miss a $5.6 billion additional payment in September.

Now, for most of us, because of the magic of math, it doesn't matter until the world falls apart. You're still going to get your mail. People will still be paid, for now. But if Congress doesn't act, the Postal Service will run out of money for operations in mid October.

The Senate tried. They passed a bill back in April. It doesn't do much in terms of reform. But it got rid of some of the near-term problems. But again, all it did is kick the can down the road. The House hasn't even acted on that.

But they have acted on another post office bills which is our number tonight: 26. That's how many laws the 112th Congress has passed that rename post offices. Wow.

And now to "Outer Circle," we reach out to sources around the world. And tonight, we begin in Uganda were hospital officials announced that two more people are dead. There's been an Ebola outbreak in the country. The death tool is now 16.

David McKenzie has been following the story in Uganda where fear is rising and I asked him how this is affecting life.

(BEGIN VIDEO CLIP)

DAVID MCKENZIE, CNN CORRESPONDENT: Erin, I'm here in Kigali, in western Uganda. Right behind me is the hospital where they're treating the patients who have the Ebola. There are several layers of protection between where I'm standing and into the isolation wards.

You have to place your boots into a solution to try to disinfect them when you go in and out. Certainly it's affecting the psychology in this region. It was supposed to be market day today, but because the president asked people not to make close contact, that was cancelled to a large degree.

There's also a sense, not of panic, but wariness about the hospital behind me, and also about the potential for this Ebola virus, which the outbreak started technically some weeks ago, but it was only recognized a few days ago. It will spread from where I'm standing right now and beyond into western Uganda and beyond that.

So, the next few days are critical in stamping out this outbreak -- Erin.

(END VIDEO CLIP)

BURNETT: And thanks to David.

And now our fifth story OUTFRONT: Is Penn State making promises it's not going to keep? The University faces millions in costs and damages as a result of the Jerry Sandusky scandal, including $60 million in NCAA penalty, more than $10 million in investigative and public relations costs, and who knows how much in damages for the victims of Jerry Sandusky. The school recently issued a statement saying it won't use philanthropic money, taxes or tuition to pay any of those penalties. But does that promise add up?

Sara Ganim is OUTFRONT tonight and she has been covering and breaking this story from day one.

So, you looked into how much this is really going to cost. When you look through the numbers, what do you find?

SARA GANIM, CNN CONTRIBUTOR: Erin, I think this could get higher than $100 million and here's why -- beyond the $60 million to the NCAA, beyond the $7.6 million that they've spent in crisis management, that's just until February.

If you look at that number and multiplied over let's say, five years, that amount of time, that amount of money, you're already at the $100 million mark. That doesn't include $13 million loss in bowl revenue, potential lawsuits.

Let's take just a small chunk. There are 10 victims in that grand jury presentment. Ten that victims that have had convictions. If you multiply that out by the average payout in the Catholic Church sex abuse scandal, which is very similar, you get to a $20 million number automatically. We've got fines, potential loss of aid, federal aid for students who go to Penn State.

BURNETT: Right.

GANIM: So all of this and you're looking at a long-term several years, I think it could get well above $100 million. But really, that's a mark that we're fast approaching.

BURNETT: Fast approaching already. So it could get a lot worse. How much money do they have? When they try to say, hey, look, we're not going to use tuition. We're not going to use tax money. Are they going to be able to keep that promise? I mean, what's the hole that they have?

GANIM: Well, they have a lot of money. They have a $1.8 billion endowment. But the promise is that they're not going to use donation money, tuition money, which comes from students, and the big one is taxpayer dollars.

BURNETT: Right.

GANIM: And the thing about the caveat is we really can't check that, because right to know laws, the open record laws in Pennsylvania, this university isn't subject to them. They're actually immune from them.

And interestingly enough, the reason, the big lobby for that immunity was the former president who's now been accused by the internal investigation --

BURNETT: That's amazing.

GANIM: -- of covering this up.

BURNETT: Well, plus, the endowment itself, there's a lot of people who have given that money over the years, probably alumni who don't want a dollar of that going to this. But that it could, right?

GANIM: Potentially.

Now, the university promised it won't, but when you look at the potential for the expenses to grow, at some point, when does their rainy day fund expire?

BURNETT: Right, can't use taxpayer, tuition, donations.

GANIM: They're going to get to a point where their rainy day fund, the pots of money they're pulling from now, when they run out, where does it go? And, Erin, we don't know where that money was going before. So --

BURNETT: Good point.

GANIM: The money that's being spent on the scandal now, if that was going to certain educational needs before, how do we know that tuition dollars aren't making up for that, or the endowment.

BURNETT: All right. Thanks very much to Sara Ganim. This problem could get a lot worse.

Well, al Qaeda has put a bounty on President Obama's head. But the dollar amount is much more important, though, than you think.

(COMMERCIAL BREAK)

BURNETT: It wouldn't be a hump day without the camel report.

So, it's been reported that a Somalian militant group associated with al Qaeda had offered 10 camels as the bounty on President Obama's head. At the time of the announcement, which also included a 20- chicken bounty for the head of Hillary Clinton, it got a lot of media attention. A lot of people made some jokes.

After all, the average cost of a camel in Somalia is about $700, from what we could see, which is a king's ransom there, but not here. Ten camels for $7,000 is nothing, though, compared to the almost $33 million the American government has offered for information about al Qaeda in Somalia.

This is, though, a very serious story, because what a lot of people may not realize is how valuable and crucial the camel is for Africa. Historically, camels shaped the continent and Asia as the chief form of transportation for the silk route. They were enlisted for battle by Roman, French, Spanish and English armies. So, it was well beyond Africa. And they were vital to the construction of canals and railroads because of their ability to carry thousands and thousands of pounds of weight.

When we were in Mali last week, we saw firsthand how camels continue to help make a difference. They were everywhere. Just looking at them there in the middle of farming. They work really hard. They're used for transportation and farming.

As (INAUDIBLE), a Tuareg told me in poetic simplicity, "I love the desert, I love my camels, I love my life."

The number of charities allow you to donate a camel to a village in need, check that out online or donate directly to the refugees in Mali at CNN.com/OutFront.

Thanks for watching. Anderson starts now.