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ERIN BURNETT OUTFRONT

Middle East Turmoil; The Closer; Interview with Rob Portman

Aired September 11, 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, an American Consulate storm, a flag destroyed at an American Embassy and a massive protest in a surprising location. We have breaking news tonight.

Bill Clinton also hitting the stump tonight for President Obama going after a very specific type of voter, and a new warning about our economy that puts the United States really sort of in a Greek myth, between the ultimate rock and a hard place.

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett and OUTFRONT tonight, we have breaking news. An American we can confirm now has been killed in Libya tonight at the Consulate, according to a Libyan interior ministry official. This is a horrible result of a day of violence against America in the Middle East. Armed men stormed the American Consulate in Benghazi Libya, tonight, setting it on fire after a protest against an American-produced movie that they say insults the prophet, Mohammed. This was just hours after Egyptian protesters scaled the walls of the American Embassy in Cairo, tearing down the American flag.

The protesters there tried to raise a black flag, with the words "There is no god, but Allah and Mohammed is his messenger." Ian Lee is in Cairo tonight with the latest on the situation. And Ian, obviously, we're sad to be able to confirm that breaking news on an American who has been killed in the violence in Libya. But the outburst that you saw in Cairo sounds like it got ugly pretty quickly. What exactly happened?

IAN LEE, CNN CORRESPONDENT: Well, Erin, I was on the ground, and I saw hundreds if not a couple of thousand protesters in front of the U.S. Embassy, chanting against America. A handful of protesters were able to reach the perimeter of the Embassy and tear down the American flag, and then set it on fire. These protesters are angry about that video you mentioned earlier. And this video, I watched this video, and it's really pretty much incoherent, a mishmash of clips. But what it does show is it shows the prophet Mohammed, the Muslim prophet, as being someone who is a homosexual, who is someone who is a womanizer, someone who molest children, basically everything possible that Muslims would find offensive and really, things that have no historical credibility, either -- Erin.

BURNETT: Certainly those sound like awful things. You can understand why that would upset people, although translating into burning the country's flag maybe obviously feels very different. We obviously as we were just able to confirm the breaking news, Ian that an American was killed in violence related to this in Libya just moments ago. Were there any Americans in the Embassy in Cairo who were at risk?

LEE: Yes, there are Americans in the Embassy, the ambassador lives at the Embassy. There's also a large detachment of Marines that live at the Embassy, one of the largest attachments of any Embassy in the world. But this Embassy, I've been to it many times, it is a well-fortified Embassy despite the protesters able to make it into the courtyard, it would be very, very unlikely that they would be able to actually penetrate or enter the buildings that consist of the Embassy -- Erin.

BURNETT: And Ian, has the Egyptian government or President Morsi, obviously the leader of the Muslim Brotherhood, a conservative, Islamic government. Has he said anything about the incident? Has he apologized or no?

LEE: The foreign ministry actually came out and said they regret what happened and that they're going to look into it. They're talking to every ministry that's involved in security to talk about how they would allow this to happen. We did see security forces show up later. They were able to block the protesters from the Embassy. But Erin, this is something we have seen before, we saw earlier the Israeli Embassy being breached and the Syrian Embassy, so this is the third Embassy being breached, albeit under -- the first one under President Mohammed Morsi, but it's definitely a security concern that Egyptian officials are going to have to bring up.

BURNETT: All right, Ian, thank you very much. Reporting live from Cairo where he was on the ground as the American flag was burnt there at the Embassy. The incidents in Cairo and Benghazi, just the latest examples of anti-American sentiment in the Middle East. But what do they mean for this country going forward?

Phil Mudd is former director of the CIA Counterterrorist Center and he is OUTFRONT tonight. Phil, when we talk about this today, I'll just go ahead and mention what feels like the elephant in the room. Obviously, today is September 11th, a very somber day in this country. These incidents happened in both Cairo and in Libya today. Both have been linked to the movie that allegedly mocks the prophet Mohammed and of course as you just heard Ian say it seems like -- what it did say was some pretty horrible things, but is it coincidence or intentional that these protests happened today on September 11th?

PHIL MUDD, FORMER DEPUTY DIR., CIA COUNTERTERRORIST CENTER: No, my guess is that this is coincidence. It looks to me more like what we saw with those cartoons a few years ago out of Denmark --

BURNETT: Right.

MUDD: -- where you had unrest (INAUDIBLE) like Afghanistan and Pakistan. I think the coincidence of the date is just that, coincidence.

BURNETT: All right, let me bring in Ed Husain, as well into this conversation, senior fellow of Middle Eastern Studies at the Council on Foreign Relations and Ed, thanks for taking the time to be with us, as well. What does this mean for the United States? I mean, obviously, tension is high. But what is the significance of this happening in two places on the same day against the U.S.?

ED HUSAIN, SR. FELLOW, COUNCIL ON FOREIGN RELATIONS: Well, I think I'm in agreement with Phil. This is not a coincidence. This is by design. But I think several things stand out. One, that the narrative that the Arab Spring was all led by liberal secularists and somehow the Middle East is now warm and friendly towards America and American ideals, that narrative no longer holds true, if it ever did.

BURNETT: Right.

HUSAIN: There are people on the fringes who are able to impact the center of political debate with this kind of outrageous activity. And now what they will turn around and say to you, the prophet Mohammed is a red light. Islam is a red light. Don't cross that. What they fail to understand is this is not the action of the United States government. They can't distinguish between free citizens and a free country doing whatever they wish to please. And the government of the country, in this case, the U.S. is irresponsible and innocent of anything that happens.

BURNETT: Right.

HUSAIN: But this is part of the problem in the Middle East that they can't distinguish between independent citizens and the role of the governments. That's part of the legacy of living under a dictatorship for so many years.

BURNETT: Right. But Phil, I'm wondering, I mean why were there -- I mean is this just disorganization or looking the other way because the American Embassy was involved. I mean, why were there not more Egyptian security forces there to prevent them scaling the walls and burning the American flag?

MUDD: My guess is that they have a plan to respond to this, but they're just not as efficient as we might expect in the west. I mean as somebody mentioned earlier, you've had attacks on different embassies across Cairo over the past months. The security services have gone through great disarray since the change in government so they might not have been prepared for this. I'm guessing it also happened very quickly.

BURNETT: It seems certainly from what Ian was reporting that that was the case. But Ed, what about what a lot of Americans may ask as a result of this, which is until America really understands who is in charge and what they stand for, given the question marks in Cairo, also in Libya, how does the U.S. go ahead giving $1.5 billion in military, in aid every year to Egypt? Most of that is military aid.

HUSAIN: I think one of the main -- important reasons here that the relations between the Egyptian government and the current government under Mohammed Morsi and the White House and the State Department and the Congress is in good shape is partly to do with that aid. I don't think immediately the question of aid should be put on the table. It's a tiny proportion of the U.S. annual budget that goes out to Egypt. For that we get returns and those returns include, you know, a peace treaty with Israel, better influence over the region, a president thus far that's been friendly towards the U.S., potential trade deals, so for that billion I think --

BURNETT: You really think we get all that from it? I mean when they were attacking the Israeli Embassy recently and now crowds attacking the American, we get goodwill from it?

HUSAIN: Those are headlines, but the reality on the ground is the peace deal with Israel still stands and the Morsi government has gone after terrorists (INAUDIBLE). That's unprecedented for an Islamist president to go after al Qaeda terrorists in Egypt. That's worth something. I don't think we should throw the baby out with the bath water because a few extremists have burnt a flag. That's exactly what they want and we should not succumb to that pressure from the fringes.

BURNETT: Phil, what direction is this going though when you see the headlines and I understand Ed distinguishing between the two, obviously on the ground and in Cairo as we have all experienced there are plenty of wonderful moments, as well. But where is this heading towards?

MUDD: I think this is heading in a direction that's pretty simple to follow if you look at polling data. Look, like through the rest of the Middle East, you've got fewer than 20 percent of Egyptians who have a positive view of the United States. And just about 10 percent of them think that American cultural representation in a place like Cairo is a good thing. So in the midst of that backdrop, you throw a match on this tinder box in the form of this video, and unsurprisingly, people who have seen the Abu Ghraib videos, they've seen reports that we burned Korans in Afghanistan, decide we don't like America. We're going to storm the Embassy, so over the long term we've got a lot of space to make up in terms of people who don't think America represents what we think it represents.

BURNETT: Right. Until those people have jobs and livelihoods of their own, it's hard to break that cycle. Well thanks so much to both of you. We appreciate it.

And ahead, Bill Clinton is on the campaign trail tonight for President Obama, speaking moments ago. Oh, but it is a double-edged sword on the stump. We have the reason. Plus Mark Zuckerberg made his first public comment since the disastrous launch of the Facebook IPO and he has a plan. We're going to tell you about it. He has a plan, a plan, a plan, a plan, a plan -- that's your only hint -- and Israeli Prime Minister Benjamin Netanyahu, is he being snubbed directly by President Obama -- tonight.

(COMMERCIAL BREAK)

BURNETT: And now our second story OUTRONT, Clinton, the closer. Fresh off his star turn at the Democratic Convention the former president hit the campaign trail today for President Obama and the crucial swing state of Florida.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: If you're looking for the future, I think the president's budget plan is better, meets the arithmetic test.

(APPLAUSE)

B. CLINTON: I think the health care plan is better. I know the higher education plan is better. I know the energy plan is better. And I know the economic plan is better. And I know it will not amount to a hill of beans if you don't register and vote and get your friends to. So do it.

(END VIDEO CLIP)

BURNETT: All right. Bill Clinton's popularity is no secret. Talk about the ultimate comeback kid, OK? His approval rating is 69 percent. A new CNN poll puts President Obama's approval at 51 percent. Historically now, September numbers are very telling. So let's just look at this. Oh, look at all these little jolly heads, compared to other presidents -- sorry -- compared to other presidents, Obama is in pretty good shape. George H.W. Bush and Jimmy Carter who both lost had approval ratings in the high 30's at this time of the year so he's way, way above that. But his 51 percent is lower than the presidents who actually went on to win, including Clinton with his high-water mark of 60 percent approval in September, 1996.

John Avlon, Roland Martin, and Reihan Salam join me now. OK, good to see all of you. So Reihan, let's start with you. Are you -- the Republicans should be afraid, very, very afraid of the silver- haired fox.

REIHAN SALAM, CNN CONTRIBUTOR: I think the key thing is when you're looking at the states where he's campaigning, it's very shrewd. He's campaigning in Florida and he's also campaigning in Ohio. When you're looking at a lot of the swing states, they actually have unemployment rates that are below the national average. And actually, even though the job creation has been sluggish, it has been moving on an upward trend, whereas in the 18 months before the 2010 midterm elections, they were really stuck. So I think that even though the economy is not doing great, it's doing well enough that President Obama is still in the fight, and, yes, Bill Clinton is more popular than ever, partly because a lot of the folks who hated him most are now dead. And a lot of people who were kids when he was a popular president are now voting.

(CROSSTALK)

BURNETT: OK --

(CROSSTALK)

ROLAND MARTIN, CNN CONTRIBUTOR: Look what's going on. You look at Congress and Paul Ryan, Newt Gingrich, they praise President Bill Clinton. It's like oh if we could go back --

BURNETT: Oh he's the guy who reached across the aisle and balanced the budget.

(CROSSTALK)

MARTIN: But the reality is this here and that is Bill Clinton is so smooth, he is able to seduce folks. And remember, you heard when he was president people said he could walk into a room, and you can hate the guy, and he'll flip you in a minute because he is that kind of guy --

BURNETT: The seducer?

MARTIN: Yes. Yes. Susan McDougall even said that, but she was in prison and she wouldn't talk for the guy. She said that's the kind of guy he was.

(CROSSTALK)

MARTIN: Did you all forget the Clinton years?

UNIDENTIFIED MALE: Oh no --

BURNETT: No, no, I remember and I remember the good and the bad.

UNIDENTIFIED MALE: Right.

JOHN AVLON, CNN CONTRIBUTOR: That's what I love about this, right? I mean the fact that Bill Clinton is now the Republicans' favorite Democrat is funny. I mean that is really --

BURNETT: Didn't they try to impeach this guy --

UNIDENTIFIED MALE: Oh yes --

BURNETT: Yes.

UNIDENTIFIED MALE: Right.

BURNETT: OK, I'm just making sure we're talking about the same guy --

MARTIN: And here's the deal. Republicans wish -- there is something special when you have a former president out on the stump. Look, President George --

BURNETT: Well I don't see them bringing their guy out.

MARTIN: Here's the deal. President George H.W. Bush, he is ill. President George W. Bush is toxic and Republicans can get mad all they want to, the bloggers can, but President Bush he can't go out there and do it.

AVLON: Let's be real about this. You know you're in a swing state, you see an ad for the Obama campaign that begins with Bill Clinton, right? Think about it. Is there a precedent for that? I mean you know people aren't using "W" this time around. Everyone invokes Reagan but it's not like Clinton used Carter in '96 --

(CROSSTALK)

BURNETT: -- used down the line. I mean --

AVLON: Maybe --

BURNETT: -- Clinton took a while to rehabilitate --

MARTIN: No --

BURNETT: This wasn't instantaneous --

MARTIN: No --

BURNETT: You never know --

UNIDENTIFIED MALE: Erin is right.

(CROSSTALK)

SALAM: It took a while. He was not very popular when he left office.

BURNETT: Right.

SALAM: A lot of people are forgetting the down sides of the Clinton years. I personally think that he was very overrated but he was not overrated as a politician. And the key thing is that President Obama needs to slightly close that gap that he has with white voters. And Bill Clinton is quite popular with a large number of those working-class white voters where you need to close that gap, just a little bit. You're still going to have a big deficit but if you close it just a little bit then suddenly Mitt Romney is in real trouble.

UNIDENTIFIED MALE: That's right.

AVLON: Right. There's a reason they call him Bubba. Bubba connects with Bubba and this is very important --

(CROSSTALK)

AVLON: You've got 69 percent --

(CROSSTALK)

BURNETT: I'm glad we're three for three (INAUDIBLE) inappropriate remarks --

(CROSSTALK)

AVLON: Sixty-nine percent approval that's not just being beloved by the Democratic base. UNIDENTIFIED MALE: That's right.

AVLON: That's being beloved by independents, by swing centrists and even some Republicans. You've got to win Ohio. You've got to win Florida. And he's the last Democrat to get re-elected. He's a powerhouse on the stump --

MARTIN: Let's remind everybody though in 2008, we had this exact same conversation. President then Senator Obama not doing well with white, blue collar voters during the primary, Senator Hillary Clinton doing well. Remember, President Bill Clinton spoke on Wednesday in 2008. He spoke on Wednesday in 2012 and so we're having the exact same conversation.

BURNETT: Interesting. Reihan, you think though that President Clinton could swing the whole election, right?

SALAM: Well that's a little strong, but I think he's a lot more important in this cycle than he was in 2008. In 2008, you had massive political and economic headwinds --

BURNETT: Yes.

SALAM: -- working against the Republican candidate. This time around, Bill Clinton is the star who came out of the Democratic National Convention that represented a really big significant bounce for President Obama. President Obama's speech was not the speech that made a difference with a lot of swing voters, with a lot of leaners. It is President Clinton's speech, and this is really, really bizarre and interesting and I think it means a lot for 2016.

(CROSSTALK)

MARTIN: Already we're at 2016 --

(CROSSTALK)

BURNETT: Whoa --

(CROSSTALK)

UNIDENTIFIED MALE: (INAUDIBLE) November --

(CROSSTALK)

UNIDENTIFIED MALE: Barack Obama --

BURNETT: I (INAUDIBLE) Joe Scarborough (INAUDIBLE) 2016, but I don't know --

(CROSSTALK)

BURNETT: He could change -- he could change his mind. All right thanks to all three of you. We appreciate it.

UNIDENTIFIED MALE: (INAUDIBLE) BURNETT: All right, next Mark Zuckerberg has talked for the first time about Facebook's flop as an IPO but he says he has a plan to get it back on track. And what the campaigns know about you, oh, they know what you do online.

(COMMERCIAL BREAK)

BURNETT: Almost four months after the company's IPO, things have been pretty crummy for Facebook. Currently it is trading at just half its initial offering price of $38 a share. So investors obviously have a lot of questions for Mark Zuckerberg, the 28-year-old founder and CEO. So this was a big deal, today he publicly spoke for the first time since the IPO. In fact he didn't even speak on the day of the IPO. It's been a really long time since he talked. He sat down for an interview at a tech conference in San Francisco.

It was a standing-room-only conversation. He called the stock's performance disappointing and admitted Facebook has made some mistakes. But it wasn't all doom and gloom because during the talk, he also explained how he hopes to turn the company around over the next few years, which brings us to tonight's number, 37. That's the number of times Mark Zuckerberg said the word "mobile" during today's 25-minute interview.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, CEO OF FACEBOOK: It's really going to be how well we do with mobile. Mobile -- mobile -- mobile is for us. Mobile -- and mobile for our Facebook mobile users -- mobile users -- mobile is -- mobile users -- on mobile engagement -- mobile -- on mobile -- mobile -- mobile -- on mobile web Facebook to mobile development -- mobile experience -- mobile app installed. We have more usage on our mobile website.

(END VIDEO CLIP)

BURNETT: Mobile. He averaged more than one mobile mention per minute. And that is a lot. A lot of the time we weren't sure if he was trying to convince Wall Street or himself. Because just because you say something a lot doesn't mean it's actually, you know, going to happen. But at least Mark Zuckerberg recognizes that investors think Facebook has some serious challenges in terms of mobile and he's trying to fix it. And a lot of people are going to applaud that.

All right next, there's a new warning tonight about the consequences of Congress doing nothing. But doing nothing might not be the worst option. And why the Israeli government is feeling snubbed tonight by President Obama.

(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 and we begin tonight in Chicago where 30,000 teachers and staff, it appears, are not close to ending their strike. The Chicago Teachers Union put out a statement this afternoon saying they've agreed to only six of the 49 terms in the contract. One major holdup is the way the city wants to evaluate teachers. They want more emphasis on standardized test scores and more merit pay. Already Mayor Rahm Emanuel has reformed education by extending the school year, cutting the school budget and extending the school day. Chicago is the nation's third biggest school district with more than 350,000 students.

Well Florida A&M University says it's not responsible for the hazing death of drum major Robert Champion. The school has filed to have a wrongful death lawsuit dismissed, saying the 26-year-old should have refused to take part in the hazing. In court documents obtained by CNN, the school said "Florida's taxpayers should not be held financially liable to Mr. Champion's estate for the ultimate result of his own imprudent, avoidable and tragic decision and death."

Champion collapsed and died shortly after a ritual in which pledges would run down the aisle of the bus while being punched. Fourteen have been charged in connection with his death.

Well, the brother of al Qaeda leader Ayman al Zawahiri says he wants to negotiate a peace deal between the West and Islamists. Mohamed al Zawahiri spoke exclusively to CNN's Nic Robertson and he submitted a six-page plan calling for a 10-year truce with Islamists, promising to stop provoking and attacking the U.S. if the U.S. ends the war on Islam and releases all Islamist prisoners.

As Nic points out, those demands are similar to a 2004 proposal by Osama bin Laden.

(BEGIN VIDEO CLIP)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It wasn't accepted and then after 2004, then came the attack in London in 2005. Is your proposal like this? If it isn't accepted, then there's more attacks?

MOHAMED AL ZAWAHIRI, BROTHER OF AL QAEDA LEADER (through translator): I am sorry to say that those who caused the London attacks were the West, because the oppression continues. Either you stop the oppression or accept the reconciliation. Or then how are we supposed to convince the people? How do I convince others to stop if the oppression and violence continues?

(END VIDEO CLIP)

BURNETT: Well, Mohamed al Zawahiri says his brother will listen to him but he admits that they have not talked in more than a decade.

Well, it's been 404 days since the United States lost its top credit rating. What are we doing to get it back?

Sadly, not much today, which brings us to our third story OUTFRONT: danger at the cliff. Credit ratings agency Moody's warned today that it could follow in the footsteps of Standard & Poor's and downgrade America's credit rating if Congress doesn't start dealing with the nation's debt problem. But how? Today, leaders couldn't even agree on whether a deal is possible to avoid the fiscal cliff to begin with.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Well, I'm not confident at all.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I'm confident that we will reach some kind of arrangement.

(END VIDEO CLIP)

BURNETT: OK. We can't even agree on whether we're confident. And it's not funny, OK?

If there is no action from Congress, going over the fiscal cliff means spending gets cut, that's for sure, all right? The Bush tax cuts will go away, $1.2 trillion in automatic spending cuts will take effect. Payroll taxes will go up. And emergency unemployment benefits will end.

Now, this will all hit in January. And the economists we spoke with all have said that this will lead to a recession. The Congressional Budget Office says it could mean unemployment surges to 9 percent next year.

Now, if we avoid the cliff by extending some of the tax cuts or delaying or completely dodging the sequester, we sure don't address the debt problem, because we're spending a lot of borrowed money to pay for those things. So we're sort of left with a choice between two evils, which the next president will have to address.

OUTFRONT tonight is part of CNN's in depth look at the issues of 2012 elections, Senator Rob Portman, Republican of the swing state of Ohio, Romney adviser, also a member of the super committee that, of course, failed to reach an agreement, oh, that led us to the whole sequester to begin with, Senator.

All right. But let me start with this. So, obviously, today, pretty frustrating when you here one side confident, the other side not -- and I'm sure they'll flip on that many times.

But Mitt Romney blamed the president and Republicans in Congress for the deal that created the automatic budget cuts. I wanted to play what he said and get your response. Here he is.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I thought it was a mistake on the part of the White House to propose it. I think it was a mistake for Republicans to go along with it.

(END VIDEO CLIP)

BURNETT: Now, you voted in favor of the Budget Control Act that said, look, if the super committee failed, we need to have the sequester in motion. You said it was the first step to restore fiscal sanity, those are your words.

Is Mitt Romney right to place the blame on you?

SEN. ROB PORTMAN (R), OHIO: I don't think he's placing the blame on anyone. What he's saying is it's time for leadership. And what he's offering is real leadership to not just get our spending under control but put in place the pro-growth controls to get the economy moving, which is what we need to do to get revenues up.

So, I personally think, Erin, that there is a solution here and I think it makes a lot of sense. One is to go ahead and put in place for the first year the spending reductions that are part of this longer 10-year spending reduction. After we can do that, there is a proposal out to do it. It's roughly $100 billion of spending reductions out of a $3 trillion budget that would occur immediately.

And then with regard to the tax relief, for a short extension, in order to move to tax reform, we would avoid this fiscal cliff that's being talked about.

So I think there is a way to do this. I'm not sure if it can be done before the election. I certainly think it should be. But it certainly could be done right after the election, regardless of what happens during the election, during what they call the lame duck session of Congress.

And let's avoid this fiscal cliff. There's no reason to go over the cliff as some suggest we ought to do. There are some Democrats in the leadership, as you know, saying this would be good for the country somehow. It would be terrible for the economy and the bad for the country.

BURNETT: Well, one thing I'm wondering. I mean, the whole point, you have the super committee and you all couldn't come to an agreement. And the failure of that was supposed to lead to something awful, right? The sequester.

So that's kind of -- that was the whole point. I mean, now people are trying to say let's switch the way the sequester was set up, and I mean -- if you're a ratings agency or someone around the world, it kind of looks like we don't know where we're going.

PORTMAN: Well, I -- as you may have heard me say before, I don't think the sequester worked and therefore I don't think it was a good idea. And I was in those meetings and I can tell you Republicans looked at this and said gee, there are no tax increases and we get the savings we were asked to find. Democrats said, well, gosh, we're getting these defense cuts, we wanted to do for decades. This may not be such a bad deal for us.

So I think not having the sequester in place would have made it more likely we could have come up with an agreement. So, I don't think it was very effective.

BURNETT: But you voted for it at the time.

PORTMAN: Well, you know, there were a lot of different aspects to that agreement. I thought it was a good idea for us to deal with the deficit and debt in order to raise the debt limit, which is what this was all about.

I think it was -- it's much more important we deal with these long-term problems, including the mandatory spending side, which as you know, Erin, is about two-thirds of our spending now. And it's the fastest-growing part of our spending.

BURNETT: Right.

PORTMAN: And that wasn't dealt with at all with this sequester.

So I don't think it was a very effective tool. I think at this point, though, we are who we are, let's look at the year-end fiscal cliff and the problems that will result. And let's deal with it.

Let's come up with some of the spending reductions that are the necessary for this first year to meet the requirements of the sequestration. There are ways we can do that. Again, over $3 trillion budget, we can come up with roughly the $100 billion that's needed.

And then let's also put in place a short-term extension of the existing tax code. And for me, that would be until July 4th. I like that date, because it's Independence Day, and during that time, let's force Congress to get its job done. Let's go to work right after the first of the year.

BURNETT: And do a grand bargain. One final question, though. Because I know you're going to be playing on Barack Obama getting ready with Mitt Romney for the debates. And one question that hopefully will come up, is asking Mitt Romney this -- he didn't agree on a sequester, as he just said. He wants to increase defense spending to 4 percent of GDP.

Now, one estimate says that would be another $100 billion. We're not spending now extra in 2013. He wants to keep some of the benefits of the health care reform. He said the other day, including people staying on, their parents' insurance and preexisting conditions. But he wants to get rid of the individual mandate, which obviously pays for it. He wants to cut taxes by 20 percent.

I could add all that up and say, my gosh, this guy is not a fiscal conservative. He's going spend a whole lot more money.

PORTMAN: Well, Erin, I think there has been some misunderstanding about some of his plans and the biggest one is the tax relief you talked about. He's not talking about tax of 20 percent, he's talking about reducing the marginal rate to 20 percent, by doing it in a revenue-neutral way. Meaning, it's not a tax cut, it's tax reform.

And economists across the spectrum, right, left or center, will tell you that's going to grow the economy and create jobs. As a result, his tax reform has been analyzed, increase economic growth to the point that 7 million new jobs will be created over the next 10 years. So it is responsible. Why? Because it's --

BURNETT: What about defense spending and what about the health care? Those are extra spends. Obviously, the tax thing is a separate debate. But what about those things? How do we pay for that?

PORTMAN: Well, regard to the defense spending, the 4 percent is roughly the historic average so he's talking about keeping defense roughly where it is. Not having the wars in Iraq and Afghanistan help, but you'd still have an underlying defense budget of about 4 percent. I think we're 3.8 percent now, without the extra costs for the wars.

And then finally, with regard to health care, huge savings there. Obviously, if you don't do the Obamacare proposal, you save hundreds of billions of dollars.

BURNETT: But he's keeping some of the expensive benefits, isn't he? Preexisting conditions and young people staying on their parents' plans.

PORTMAN: Yes, the biggest cost is setting up exchanges and huge subsidies and the number of people likely to join the exchanges, and frankly, lose their own private insurance to come to them and the utilization there and the expansions of the government programs, including the huge expansion of Medicaid. So that's where the big numbers are.

And what Governor Romney has said from the start is that he thinks we should not go there, and therefore we'll have some big savings there.

So the key is really very simple to me. One, you've got to reduce spending and Governor Romney is committed to do that. But, two, you've got to grow the economy. The fiscal hole that Washington has got itself in is so deep, Erin, you can't get out it just with spending cuts alone or growth alone. You need to do both.

And that growth has to come from pro-growth policies. He's not talking tax cuts. He's talking tax reform, because it will create more jobs, more growth and therefore more revenue.

BURNETT: Closing loopholes.

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

Obviously what you heard from him, everyone is what you should expect to hear from Mitt Romney in some of these debates when these questions get put to him. So, this is going to be an interesting next month.

Well, our fourth story OUTFRONT: big question tonight, United States versus Israel. Now, I put a question mark on it, but Israeli sources telling our Wolf Blitzer today, at least for now, the White House has rejected a request from Prime Minister Benjamin Netanyahu meet with President Obama this month.

Now, the Israeli leader wanted to discuss Iran's disputed nuclear program while he is in the United States for the key U.N. annual meeting. And Netanyahu is getting increasingly frustrated with the United States for not drawing a so-called red line when it comes to Iran's nuclear program, saying the U.S. hazard no, quote, "moral right to restrain Israel from taking military action on its own.:"

OUTFRONT tonight, CNN's foreign affairs reporter Elise Labott.

Elise, tell me what the very latest is on this. I mean, this just seems like it's wrapped up more and more from the Israeli side, they want the world to know the U.S. is not standing where they think it should be standing.

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: Well, I think, Erin, a couple things are going on. You know, Prime Minister Netanyahu asked for this meeting with President Obama on the same day that he was making some very tough comments about what he conceives as foot- dragging by the Obama administration when it comes to Iran. Secretary of State Hillary Clinton made some comments to a news reporter earlier over the weekend, saying that the U.S. is not going to impose any deadlines on Iran. And so Prime Minister Netanyahu didn't like that. He started talking yesterday in some other interviews and today.

And so on the same day he asked for the interview, U.S. kind of looks like the White House was trying to put him in his place by saying, we don't know what the schedule will allow. But, you know, there's no love lost between these two leaders. Every time they're scheduled to meet, there's a lot of tension about whether there should be a meeting. So, this is really no surprise that the White House would kind of shy away from giving Prime Minister Netanyahu a firm date for a meeting right now. They're pretty pissed off.

BURNETT: Yes.

(LAUGHTER)

BURNETT: And said the bottom line.

All right. Elise, one more question. We obviously reported the breaking news here on the show about an American being killed in Libya and the consulate today, as there were protests there and in Cairo at the American consulates and embassies. What can you tell us about what you've heard happen there in Libya?

LABOTT: Well, the situation, Erin, is very fluid, and information is still coming in fast and furious. What we understand that several armed gunmen breached the consulate compound and tried to get into the consulate.

What the U.S. is hearing from the Libyan interior ministry is that an American was killed. But, you know, the U.S. very careful to confirm the death of an American until it receives independent confirmation, until, to be crass, it sees the body themselves, they're not going to say an American was killed.

Obviously, it's a very small consulate in Benghazi. They want to notify any next of kin. So there are some reports coming out that a U.S. embassy consulate official was killed and the U.S. is trying to find that out. But still, they're trying to secure the compound.

This came after those protests in Cairo, obviously kind of took everybody by surprise. But it doesn't look like it's 100 percent secure yet.

BURNETT: Wow, certainly shocking and upsetting headline with an American dead tonight in Libya.

Well, ahead, the secret science used by campaigns to get your vote. They know much more than you would ever want them to know about you.

(COMMERCIAL BREAK)

BURNETT: And now our fifth story OUTFRONT: the money ball of politics.

So when you hear the words "money and politics," you probably think of, well, nothing good. But among the things you think of, campaign commercials, there have been nearly a half billion dollars spent so far this presidential campaign alone. It is a stunning number and it is slated to go higher and higher and higher. You also, of course, probably think about those expensive and lavishly planned conventions that brought us moments like these.

(BEGIN VIDSEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: It's the genius of the American free enterprise system to harness the extraordinary creativity and talent and industry of the American people with a system that's dedicated to creating tomorrow's prosperity. Not trying to redistribute today's.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you believe in a country where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules, then I need you to vote this November.

(END VIDEO CLIP)

BURNETT: Every moment of those things is choreographed, the signs they hand out to wave around, just this moment, I mean, everything. They are works of art.

But do they really determine who you vote for?

OUTFRONT tonight, Sasha Issenberg, author of the new book, "The Victory Lab," which uncovers the secret science to winning campaigns.

So, there's some very pretty frightening stuff in here. First of all, they know a lot about us. We've all gotten used to feeling like people are spying on us online.

But how much do they really know, the campaigns, about us?

SASHA ISSENBERG, AUTHOR, "THE VICTORY LAB": Probably thousands of individual data points, and that can be things like your registration record, your name, your gender, your address, things they sort of derive from what the Census tells you about the neighborhood.

And then information from past political campaigns. So if a canvasser came to your door in 1996 and ask what you thought of Bob Dole, that's in a database somewhere and being used this year. And then tons of information from commercial data warehouses, the types of people that put together the information that allow companies to make credit scores or do direct mail targeting for catalogs now is being used to make political productions --

BURNETT: So you buy something from one store and you get 15 other catalogs. You start getting things in your e-mail box and you say, well, gosh -- I mean, sometimes you can kind of trace it back in your own head. But they're able to buy into that databases, so you know what clothes you like and where you shop and all that stuff.

ISSENBERG: If you just fill out a warranty card and say your household income is between $50,000 and $75,000, and if you filled out a survey, it says you took a cruise this year, they know that too.

BURNETT: Wow. So how they use this information?

ISSENBERG: A lot of variables tell us nothing about politics. But when you have thousands of them, you can start to see which actually do predict it. And so they use these algorithms that allow them to basically look for patterns as to which variables are helpful in predicting political behaviors. And it is the same type of thing companies do with credit scores. And so campaigns, instead of predicting when you're going to default on your loan or whether you're going to pay off your bill in a given month or run up several hundred dollars in charges, they're going to predict are you going to cast a ballot, vote for Barack Obama, Mitt Romney, are you likely to be pro- choice?

BURNETT: OK. So they get all these information. They run all these algorithms, so it's very scientist. And then, right now, they're using it as you're reporting on, to get their base out.

So the first use of it is I know Sasha is going to vote, let's just say for the purposes of this conversation, Democrat. He always has. But I'm going to force him to do it. I'm going to guilt him into it?

ISSENBERG: Yes, a lot of the tools that people are using to motivate their base are grounded in sort of ideas of behavioral psychology. The most effective tool ever use that was discovered in an experiment in Michigan in 2006, where they randomly assigned voters different treatments and one of them was they send voters a record of their vote history. It would say -- dear Erin, your vote history is a matter of public record. You voted in 2010, you didn't vote in the school board election. Here are your neighbors' vote histories also. As you know, there's an election coming up and afterwards, we'll send everybody an updated set.

BURNETT: They do the Catholic Jewish mother, or call it whatever your religion is.

ISSENBERG: Yes.

BURNETT: What if you're someone that is very pro-choice cares about fiscal issues passionately. You know, you want to target someone who you think is persuadable because they're theoretically on one side and the other on issues they care about. Is there any example of how someone has bridged that divide?

ISSENBERG: In Nevada in 2010, where Harry Reid was running for reelection, some outside groups working on his behalf went -- they took information from ballot initiatives about marijuana legalization and other social issues in the state, and they were able to find precincts were there were huge concentrations of libertarians, like wealthy upscale libertarians. A lot of them were located from California, near Tahoe.

And while Reid and most of the state was talking about Sharron Angle wanted to get rid of Social Security, (INAUDIBLE) did really targeted not about Social Security, because actually they thought the libertarians would be for that. But about her record on women's issues and abortion where they were able to sort of cross cut and find social issues where the libertarians would be with them and sort of stay away from the fiscal stuff, it would be an issue.

BURNETT: Wow, and they were successfully able to win some of those precincts.

ISSENBERG: Yes, they did much better than he had six years ago there.

BURNETT: So is this more effective than the -- what we're hearing about a billion dollar plus campaign, that's the number that's been thrown out there, just in terms of ads, and these are blast ads going on in cable and broadcast. So you're hitting a wide net.

ISSENBERG: Right.

BURNETT: But what you're talking about, able to target someone based on their specific interest, their predilections. Is that more effective?

ISSENBERG: You know, everything that's happened in the past decade is sort of revolutionary for politics. It's taking these large categories, whether they're geographies and media market, a county, a precinct, or a broad demographic, categories, women, college graduates, and starting to think about individuals.

BURNETT: All right. Next, we remember.

(COMMERCIAL BREAK)

BURNETT: More on the breaking news story we brought you at the top of the hour. A State Department official tells CNN the United States has been notified by the Libyan government that an American consulate official was killed at a consulate in Benghazi today. The State Department doesn't have independent confirmation of the death of the American, but it is the result of a day of violence against Americans in the Middle East.

Protesters also scaled the walls of the U.S. embassy in Cairo. Our Ian Lee reports they burned American flags there. This in response to a video produced by an American mocking the Prophet Muhammad.

CNN's Jomana Karadsheh is in Tripoli and has been in touch with eyewitnesses in Benghazi where the American was killed. She joins me on the phone.

And we have some new video here, Jomana, as we ask what -- I know you've been in touch with people on the ground. We're looking at new video here of the consulate in Benghazi. What can you tell us happened?

JOMANA KARADSHEH, CNN CORRESPONDENT (via telephone): Well, Erin, there are reports of Libyan casualties as a result of these clashes at the consulate. I spoke to eyewitnesses on the scene who described the situation there. Libyan security forces were engaged in heavy clashes with members of an armed group, that's a group called Ansar al-Sharia. That is a radical militant group based in eastern Libya.

Libyan troops were deployed to the scene. Roads to the consulate were blocked. Rocket-propelled grenades were fired at the consulate building.

There are conflicting reports what the situation is there right now. A Libyan government official is telling CNN that the building is being secured by the Libyan military, but we're hearing from eyewitnesses in Benghazi that members of the armed group had taken over the consulate building and were celebrating and looting the consulate.

There's been condemnation here by regular Libyans and officials and also, Erin, there had been calls on social media sites for more protests in Benghazi and here in the capital Tripoli.

BURNETT: All right. Well, Jomana, thank you very much for your reporting -- live from Tripoli tonight.

Well, it is, of course, the 11th anniversary of the September 11th attacks. And as the years passed the attacks which nearly 3,000 people were killed were marked with somber ceremonies across this country, including those held at the World Trade Center, the Pentagon, Pennsylvania, the White House, and Arlington National Cemetery. Even though we're more than a decade removed from those attacks, for many Americans, especially the families of those who died, the emotions will always be as raw as they were at the beginning. But in the newsroom today, we were discussing what September 11th will mean to future generations who don't, just by definition, have a personal connection to our time and that raw emotion. It's hard to think about that, but it will happen.

So today I was thinking of my visit to the USS Arizona, the ship attacked in Pearl Harbor in December 7th, 1941. So, you know, of course, I wasn't alive when Pearl Harbor changed the world, and the life of every American who lived through that time, but I visited the memorial in Hawaii a couple of times and it is a somber and moving event. It made me feel American patriotism in a special way that I have not felt anywhere else. Visiting the USS Arizona lets people, generations removed from a transformative moment in our history, imagine it, connect with it.

The Arizona Memorial helps us remember and also unites us as Americans. They have video of that day. You can imagine what it was like to be someone there in the Navy and out on your day of leave and you go back for your night and it brings it alive in a way that is so important.

One day, Ground Zero will be like Hawaii's Arizona, a part of history that a memorial and museum made poignant to generations to come. That's why I think politicians need to stop dragging their feet and arguing over money when it comes to the national 9/11 Museum. That museum and memorial will be what keeps it alive for this country in a way that is very important.

Thanks so much for watching. "A.C. 360" starts right now.