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ERIN BURNETT OUTFRONT

Romney Doubles Down; Interview with Senator Kent Conrad; Dark Money Shuffle

Aired September 18, 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, Mitt Romney lashes back on camera about the secret fundraiser video. Plus no one yet arrested for killing the American ambassador in Libya. Why? We sent our Arwa Damon searching for answers and breaking news tonight, a deal reached to end the teachers strike in Chicago. Who won?

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, Mitt strikes back. Twenty-four hours after a hidden camera showed him at a private fund-raiser saying that nearly half the nation will not vote for him because those people rely on government handouts. Just hours ago, he doubled down.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm talking about a perspective of individuals who I'm not likely to get to support me. I recognize that those people who are not paying income tax are going to say, gosh, this provision of -- that Mitt keeps talking about, lowering income taxes, that's not going to be real attractive to them and those that are dependent upon government and those that think government's job is to redistribute, I'm not going to get them.

(END VIDEO CLIP)

BURNETT: Now in the interview with Neil Cavuto, Romney also talked about the 47 percent of people who pay no income tax, saying in his opinion that many of them wish they did.

(BEGIN VIDEO CLIP)

ROMNEY: There are a number of retirees, members of the military and so forth who aren't paying taxes, and that's as it should be. But I do believe that we should have enough jobs and enough take-home pay such that people have the privilege of higher incomes that allow them to be paying taxes. I think people would like to be paying taxes.

(END VIDEO CLIP)

BURNETT: The criticism of Romney has been withering. And it has been a rough two weeks in terms of headlines for the Romney campaign. You know he didn't get a convention poll bounce, but the president did. And then Politico reported this week that Romney's senior advisers are fighting and not on the same page. And then there were the two incidents, as I'll call them. First, criticizing the president for supposedly apologizing for the attacks on the American Embassy in Cairo. Romney was criticized by the left, sure, but also from the right by people like John McCain.

And now this sound bite from the fund-raiser. Now this was manna from heaven for the left, of course. But you know some Republicans also disavowed it. Two of them are important, because they're in tight races for the Senate. And their dismissal of Romney could be a bad sign for his standing with independent voters. Linda McMahon in Connecticut told "The Daily Caller," and I'm quoting her, "I couldn't disagree with Governor Romney more. I don't think people choose often to be in the position that they are in. I think by the fact that our economy is where it is and we're not able to have jobs, I think government has failed them in that aspect."

And in Massachusetts, Senator Scott Brown e-mailed "The Hill" saying, quote, "that's not the way I view the world. As someone who grew up in tough circumstances, I know that being on public assistance is not a spot that anyone wants to be in." So does this add up to Romney being done, over, a goner? People were kind of talking about that today. You may have heard it out there in the ether, but the short answer to the question is no. Bear with me. First some of the bad news for the Romney campaign.

A brand new CNN Poll of Polls has him three points behind President Obama nationwide. Now, in swing states like Virginia and it really does come down to the swing states, a new "Washington Post" poll has him falling much farther behind. We'll have more on that in a moment. But history does show there is a path for Mitt Romney, although it may be a hard to find one. All right look at this. You just need to look at the highlighted years here. The year 2000 and the year 1980.

At this point in 2000, Al Gore was leading George W. Bush by three points, the same as President Obama's current lead. Well we all know how that ended up. And way back in 1980, Jimmy Carter was leading Ronald Reagan by one point in early September and he actually lost the election by two. And then there's this. The fact that after the Egypt Embassy statement, which Romney was so widely criticized for, a Gallup poll today showed him gaining back all of what he lost after the Obama convention bounce.

Now, this includes the reaction to Romney's Egypt handling. How he handled that situation. So they're now just one point apart, according to this Gallup poll. In fact an NBC-"Wall Street Journal" poll just released tonight actually shows the president's approval rating on foreign policy fell 12 points among independents after the Egypt and Libya attacks. So if Romney keeps pandering to his base, will it be his undoing or his salvation?

We're joined tonight by CNN contributor David Frum, our chief political analyst Gloria Borger who did the definitive documentary on Mitt Romney, Republican strategist Alex Castellanos, who worked for Mitt Romney's last presidential campaign and presidential historian Douglas Brinkley. And I appreciate all of you taking the time. Gloria, you are on our independent political "Strike Team". Is this a fatal move for Romney, or when you look at some of these polls, do you say this could actually help him with his base, a base, by the way, until he got picked on seemed to be very unmotivated in support of Mitt Romney.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. It's not a fatal move for Romney. I think what this does on the down side for them, and really on the down side, is that it plays into the whole White House narrative about Mitt Romney. That he's somebody who is out of touch, he doesn't understand people like me. He doesn't care about the middle class. You know, when you call 47 percent of voters people who consider themselves victims, that's not a good thing to do. It also plays into the narrative that he doesn't believe anything. Will he say the same thing privately or allegedly privately to a group of fund-raisers that he would out in public? But, you know, nothing is a fatal blow these days in politics. Hardly anything and as you point out, these polls can gyrate. The president has come down from his post convention bounce, and so you know, we have got a bunch of time left to go.

BURNETT: We do. I mean, when you look at it that way. And Doug, how can Mitt Romney recover from whatever blow he has taken? And certainly, you know among those in the middle, as you can see by Scott Brown and Linda McMahon, those people fighting for independents seem to be the ones distancing themselves from him. So how can he recover with that group, if at all?

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Well, you know, Mitt Romney has got the debates coming up. And the expectations are low, and maybe even lower out of these last few weeks with these mistakes he's making. But if he can hold his own with the president or win in the debates, a lot of this will be forgotten. But there is -- he's made a fatal blunder here. First off, not recognizing that everything is taped. The idea that there are things are going to be held in secret. And I think it's that cloak of secrecy. This was -- is being called by the media a secret tape. And his taxes are secret. And it leads to the point that we're getting near election day, and people really aren't sure who Mitt Romney is, and he's spending his time not courting independents, but trying to reassure his base. So he's a man in trouble right now.

BURNETT: And Alex, let me ask you about this question. What Doug is saying is a man who is trying to court his base. So obviously, he didn't expect this 47 percent comment at the fund-raiser to come out. But now that it has, and we don't have any polls to show how this is going to affect him. Will it help him with his base and does he need that help?

ALEX CASTELLANOUS, CNN POLITICAL CONTRIBUTOR: No. I think I kind of disagree with Douglas on this. The base is hugely motivated, and it's motivated by Barack Obama, who has scared the pants off of Republican voters and frankly independent voters. Look, even Barack Obama is not running on Barack Obama's agenda. He's running on Bill Clinton's agenda. Barack Obama is not running on what he's going to do the next four years. He's running on what Bill Clinton would do the next four years. So this could -- right now, Mitt Romney doesn't need to motivate his base. They are motivated to change it. But what Mitt Romney has not done is say how he would lead. That's what's next. That's what has to happen in these debates.

BURNETT: OK. But when you say that, about the base, let me just put this poll up, David Frum, have you jump in on this, so you can look at the national Gallup poll if you're Mitt Romney and say look, Obama has lost his bounce from the convention and now we're back to within a point of each other, but then I give you Virginia. "The Washington Post" poll 52 percent now for Barack Obama, 44 percent for Mitt Romney. And that's not the only swing state where we started to see the president pull ahead. That's got to be pretty terrifying. If the national numbers don't matter, it's Virginia and the swing states that do, right David?

DAVID FRUM, CNN CONTRIBUTOR: Look, the tragedy of the situation is here is a man who is a competent, capable manager, who has been good at everything, a successful governor. The author of the first universal health care coverage provision in the nation. A person who has demonstrated through his charity and his personal life that he has a good and generous heart. And he has been pushed and he's been pushed by an angry base into sounding not like the person he is, but into sounding like some class warrior in reverse. And that statement he made to that fund-raiser, that was something that expressed not just his personal idiosyncratic view. What he's saying there, that's the daily talk of talk radio and the Washington think tanks and "The Wall Street Journal" editorial page. All of the people who hated him, all the people who tried to stop him from being the nominee. And at this -- he's got the job. He's got the nomination. And he needs to talk to America. He needs to talk for America.

BURNETT: All right --

CASTELLANOS: But David --

BURNETT: OK, go ahead.

CASTELLANOS: No, I was just going to say but you know, here's the shocking, breaking news that Mitt Romney actually said there. He's going after swing voters. That was what he was saying. He wasn't going after his base. He was saying, look, I'm going to concentrate on swing voters. Now, did he say it wrong? Yes, he absolutely did. He shouldn't have said it that way. He shouldn't have said I'm not going to -- you know 47 percent of the people are never going to vote for me if I talk to them about conservative principles and self-reliance. He would have to be president of 100 percent of the people. He should have said what most Republicans say, which is my job is to lift everybody up and make more people successful and taxpayers, especially those in need --

(CROSSTALK)

CASTELLANOS: You're right, David, that's what he has done in real life.

(CROSSTALK)

FRUM: This dopey idea --

CASTELLANOS: I've seen him there.

(CROSSTALK)

FRUM: This dopey idea that the people who are -- who earn too little to pay income taxes are moochers. Sixty percent of the 47 percent pay payroll taxes --

UNIDENTIFIED FEMALE: That's right.

FRUM: -- 15.3 percent --

BURNETT: And they all pay sales taxes.

UNIDENTIFIED MALE: Wait -- wait a minute --

UNIDENTIFIED MALE: That wasn't what this was about, guys.

UNIDENTIFIED FEMALE: Right.

UNIDENTIFIED MALE: That --

UNIDENTIFIED MALE: That's a higher rate --

(CROSSTALK)

CASTELLANOS: You're misinterpreting the whole thing.

BURNETT: Let David -- let David finish --

FRUM: That's a higher rate than Mitt Romney pays. Sixty percent of the 47 percent pay more in tax than Mitt Romney pays --

CASTELLANOS: So you're supporting higher capital gains taxes. Good for you David --

(CROSSTALK)

CASTELLANOS: But that has nothing to do with this.

FRUM: The question is if not paying income tax means that you don't take responsibility for your life, Mitt Romney doesn't pay income tax. Why did he feel the need to say that --

BORGER: Because -- I'll tell you why. I'll tell you why, David. Because above all else, Mitt Romney looks at politics like a businessman looks at business. He says what do I need to do to close the deal? So I'm before a bunch of fund-raisers, and I'm saying this because they're going to take out their checkbooks and they're going to write their checks. When you're running for the governor of Massachusetts, you have to be a little bit more moderate. When you're running for the presidency, you're going to go be more conservative. And what do I need to do to close the deal? Because the deal he wants to close is to win. So he sounded like a businessman, and by the way, a political analyst, saying OK, I need these independent voters. These are the people I'm going to go after. They may -- my tax message may have more resonance with them. The bottom line here is, though that people then don't know who you are or what you believe, so at some point --

BURNETT: Right. The whole issue of principles --

BORGER: -- at some point, maybe in the debates, he's going to -- or before the debates he's going to have to lay out his vision.

BURNETT: Right. And let me -- and let me just -- because all of you have raised this point about you have to be president for everyone. And see, this is where the president came back with a real punch. I mean if you're going to say Mitt Romney went on FOX, here's the president. He chose "Letterman". But this is not a funny line. Here's what he had to say about Mitt Romney, Doug.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I don't know what he was referring to. But I can tell you this. When I won in 2008, 47 percent of the American people voted for John McCain. They didn't vote for me. And what I said on election night was even though you didn't vote for me, I hear your voices, and I'm going to work as hard as I can to be your president. And one of the things I've learned as president is you represent the entire country.

(END VIDEO CLIP)

BURNETT: Doug, as a presidential historian, I'll give you the final word. Can Mitt Romney still win this?

BRINKLEY: Well I think Barack Obama is correct, and I think Mitt Romney's problem is, the clip you played, Erin, at the beginning, he was very defensive. On a Monday, beginning a new cycle of the week, you don't want to be in a defensive crouch he was in last week in one. And you're starting to see him have zero offense and constantly trying to defend Mitt Romneyisms (ph) and he -- the Romney campaign is starting to get in disarray over it. They can't control the candidate. When David Brooks and "The New York Times" slams Mitt Romney, begging for the guy he knows that's so good at business and politics to step forward people aren't seeing that person. And Barack Obama is a lot more popular than Mitt Romney, so it's not a good day, and it doesn't look like it's a good week for Mitt Romney.

BURNETT: All right. Well we shall see. And everyone, please hit to Twitter -- take to Twitter -- sorry -- and let us know what you think, whether Mitt Romney can close the deal or not.

All right, well ahead Congress is trying to delay more than $1 trillion in cuts set to take effect. This is all happening sort of on the back burner, but does this plan add up? Plus an OUTFRONT investigation. Tonight we're following the record amount of money being spent to get your vote. And it has been one week since the American ambassador was killed in an attack in Libya, so why has no one been arrested for his murder?

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT pay and punt. Really a bad combination of things, isn't it? Well, a bipartisan group of senators known as the "Gang of Eight" are trying to hammer out a deal to avoid the $1.2 trillion in sequester money and to extend the Bush tax cuts for as many as possible. But it's really a stall, and they admit it. I think they do. You'll hear in a second if they're going to take issue with me on it, but they're really trying to just delay the tax increases and sequester for six months to buy time to make a grand bargain. Now if you're confused because you thought the whole idea of the sequester was to give Congress 17 months to make a grand bargain and now that they failed another six months ain't worth a hill of beans, you're not alone. So let's find out if this "Gang of Eight" adds up. Democratic Senator Kent Conrad, member of the "Gang of Eight", chairman of the Senate Budget Committee is OUTFRONT -- good to see you, sir.

SEN. KENT CONRAD (D), NORTH DAKOTA: Good to see you.

BURNETT: OK, so am I being fair here? You guys are trying to stall this six months because you don't think you can get it done this year.

CONRAD: No. You know, I think this all flows from a story that really mixed two different initiatives. One that Senator McCain and Senator Levin are working on to delay the sequester. Another effort, separate and apart from that, that is the group of eight, four Democrats, four Republicans, that were asked about a year-and-a-half ago by 30 of our colleagues to see if we couldn't come up with a plan that would be the grand bargain, that would follow pretty closely what the Bowles/Simpson Commission came up with. So I think there's some confusion here as to what the group of eight is trying to do and what McCain/Levin are trying to accomplish.

BURNETT: OK, so if you --

CONRAD: The group of eight --

BURNETT: If you succeed then --

CONRAD: Yes.

BURNETT: -- are we going to get a grand bargain that prevents the sequester and we're going to get the grand bargain now, not six months from now.

CONRAD: Yes. Look, I can't say what the group of eight will conclude, because we're still negotiating. I can tell you -- I would be happy to tell you what I am pushing for, which is to in the lame duck session, after the election, reach the grand bargain, and that that would be a framework that the committees of jurisdiction would then have six months to meet. In other words, they would be given instructions, how much to cut, from what programs, how to reform the entitlements, how to reform the tax system, how much money to raise. All of that would be agreed upon right after the election. The committees of jurisdiction would fill in the details, how those goals were to be met, and there would also be a down payment that is hundreds of billions of dollars of cuts and revenue agreed to in the lame duck that would take immediate effect. And on top of the framework there would be penalties if the committees of jurisdiction did not meet their assignments. So that's what we're working on.

BURNETT: OK, now I think that makes sense, although here's the thing. These penalties, right, we're supposed to be facing these penalties with the sequester now, but nobody likes the sequester, so if you all get what you want, the sequester gets put off or whatever you're going to call if then for another six months in case they fail and we still don't have anything happen.

(CROSSTALK)

BURNETT: I mean it just is a frustration. I'm sure you share it, right --

CONRAD: Yes.

BURNETT: -- that we can't actually get something done, signed and it's going to happen.

CONRAD: Well that wouldn't be my intention. I'm really not interested in anymore kicking the can down the road. Look, I started on this effort five years ago with Judd Gregg, the ranking Republican on the Budget Committee, first of all to have a commission that would be totally enforceable in law and we got 53 votes in the Senate for that proposition. Seven of our original Republican co-sponsors, original co-sponsors, voted no against their own proposal. So then we had no choice but to go to a presidentially (ph) ordered commission that did not have the force and effect of law. That put us in a weaker negotiating position with less leverage. But, look, we still have an opportunity here to do what needs to be done for the country --

BURNETT: Right.

CONRAD: -- which is to agree on a plan that will save at least $4 trillion off deficits and debt over the next 10 years. I'm actually pushing for five trillion, because I'd like to actually balance the budget.

BURNETT: All right. Well, Senator, thank you very much. We appreciate your taking the time and look, we're rooting for you to get this done and get it done right. He just ended there with a key number. He wants to cut $4 trillion. That's the same as Simpson/Bowles.

UNIDENTIFIED MALE: Yes.

BURNETT: Simpson/Bowles came around last time, didn't pass, debt ceiling crisis, sequester.

JOHN AVLON, CNN CONTRIBUTOR: Four trillion --

BURNETT: It feels like they're kicking the can. I know they don't want -- he doesn't want it to be, but that's --

AVLON: No he doesn't and look, I mean God bless, he's at least trying to do the hard work -- BURNETT: He's trying, yes --

AVLON: -- and you know he's someone who is going to be -- he's been fighting this fight for a long time. And sure, there are going to be people who say, look, this will buy us a little bit of time. We can move the (INAUDIBLE) fiscal cliff just a little bit. But Kent Conrad really has been a leader, but he is leaving, and so that adds to part of the problem here.

BURNETT: Right.

AVLON: So he can do all the good work there, but at least he's focused on the lame duck. There are too many members of Congress that you and I have spoken to are in totally denial about the fiscal cliff --

BURNETT: Who are in total denial. And of course my thing is, all right if you get this passed and I hope you do, I know it takes time to implement it, but I see this, hey in six months, guess what, we don't like all the cuts that you said we had to make. We want to do it again.

AVLON: That's right.

BURNETT: And it's just frustrating. OK, all right, well at least he is fighting the good fight. And that brings me to our third story OUTFRONT, which is big money, little transparency. A federal appeals court today overturned a ruling that would have tightened disclosure rules for political donations that finance all those campaign commercials. So the decision could make it even harder to follow the money trail in an election year when as we've been telling you it's a record in terms of the amount of money that is going into campaigns, through groups including super PACs. John Avlon has been continuing his series on the Super PAC economy. It's sort of --

AVLON: Yes.

BURNETT: But it's not a game, the Super PAC economy, this is real life. And you're focusing tonight on dark money.

AVLON: Dark money, so these are the 501(c)(4s). It's a tax name but it's a social welfare organization and so it's very different from Super PACs. It's able -- donors are able to give money without disclosure. And we have seen a dramatic increase in the political spending they're making. Just take a look at this. Before Citizens United, at this point in the election cycle, just around $3 million was spent by these 501(c)(4) organizations. This point at this cycle, 67 million, that is over 200 percent increase in the amount of money the political ads that these 501(c)(4s) are putting forward. That's direct evidence of dark money making an impact on our election and it's just the tip of the iceberg.

BURNETT: And nobody has to disclose, so when you give money to a Super PAC your name -- you know we all see it. I can see John Avlon gave $2 million to whomever. But 501(c)(4)I can give money to at no disclosure and can't the 501(c)(4) actually then give money to Mitt Romney's Super PAC or Barack Obama's?

AVLON: So they can move money around and this is very important. The 501(c)(4)is actually the biggest untold story this election for that very reason. The whole deal behind Citizens United, among its advocates, Justice Kennedy when he wrote the option, he said look, we'll have unprecedented amounts of money, but unprecedented disclosure. That was the grand bargain in effect that Citizens United was supposed to put forward. 501(c)(4)s started popping up and they subvert that whole promise, so just take a look, for example, at the Super PACs that have already had 501 (c)(4s) prop up (INAUDIBLE) sister. Eight of the top 20 Super PACs do, these are just three of them. Priorities USA Action -- I want to associate with President Obama. American Crossroads, that's Karl Rove's group. And Club for Growth Action, those are just three of the eight Super PACs that have 501(c)(4s) put forward and it makes a mockery of that intent because these -- folks can say look if you don't want to give money publicly, do it through our 501(c)(4) --

BURNETT: Right.

AVLON: -- and then all of a sudden the money starts getting moved around.

BURNETT: And then the money shuffles in and there's a way to hide it. So can they spend the money any way they want (INAUDIBLE) 501 (c)(4) -- I mean it sort of sounds like what you're saying, it's not a charitable organization, that's a 501(c)(3), but it's an organization that's designed for social causes, so --

AVLON: That's right, allegedly, but it's -- this is the dark money shuffle. We've an able to find out these folks move money around between different organizations. Crossroads GPS gave for example $4 million to Grover Norquist group, Americans for Tax Reform. They need to keep their political spending below 50 percent, but they can give it to another group who then spends it on political spending, so this whole thing becomes a giant sham and when the curtain gets pulled back, corporation AETNA, $7.8 million they gave to American Action Network and Chamber of Commerce. They misfiled and no one was supposed to ever see that. So that's just an indication of the dark money that's going through this cycle.

BURNETT: When the curtain gets pulled back sometimes you see a very unattractive naked person. Still OUTFRONT, it's been weeks since an American ambassador was killed in a violent attack in Libya, so tonight who are officials focusing their investigation on? Was has there been no arrest, our Arwa Damon investigates, and a new milestone for Apple tonight.

(COMMERCIAL BREAK)

BURNETT: Welcome back. We have breaking news. Yes, the Chicago teachers strike has ended, and right now we are joined by the head of the Chicago's teachers union, Karen Lewis, joining me on the phone on this breaking news. And Ms. Lewis, we appreciate your taking the time. Are you satisfied with the deal that you got? Are you happy? KAREN LEWIS, CHICAGO TEACHERS UNION PRESIDENT (via telephone): Well, I mean, it's the deal we have. It's an austerity contract. The key is that we beat back the ugliest part of the so-called reform agenda and that's important for us and our members.

BURNETT: When you say an austerity contract, what exactly do you mean? I just want to throw something up here for our viewers to see. The average teacher's salary in Chicago, $74,839, more than New York, Los Angeles or private sector workers in Chicago.

Sorry, go ahead.

LEWIS: Right. You know what the problem with that number is? That they also include anybody that has a teaching certificate, which are administrators. So if you push that number up, that's when you get that kind of number. So they've been using that number disingenuously.

But the key is, the average teacher salary in Chicago is not $74,000. Regardless --

BURNETT: What is it?

LEWIS: The issue is, austerity for us, means we have been used to getting 4 percent raises so now we're not. The issue is, it's not about the money. It's about what school looks like for all of our members and for our students.

And the key is that this whole agenda is out of control. And not only is it out of control, we need to move in a different direction, and we need to move into a much more holistic agenda, because if our children don't have music, art, P.E., world languages, we're going to have a -- just a test (INAUDIBLE) factory. And the only people that win out of that are the companies that make testing materials.

So we'd like to see the curriculum be broad and rich and deep for our kids. And we'd also like to see things be more just. So, that's where we are.

BURNETT: So one thing that you said, Ms. Lewis, early on in this, when you were talking about Mayor Rahm Emanuel, you referred to him as a bully and liar.

LEWIS: Yes.

BURNETT: Do you stand by that?

LEWIS: Yes, absolutely. I mean, the key is, he has said certain things, and he took away a 4 percent raise. That enraged members, especially because the money was there, it had been budgeted for by the previous administration.

But the mayor had an education agenda that he wanted to ram down our throats, and he thought he had done it with a Senate bill that, you know, Senate Bill 7, that passed almost unanimously in Illinois. And, you know, the fact is that we were still able to enjoin our members to move as one. And I think that powerful message of when you work together, you accomplish magnificent things. We still want to work with the board of education so that we can accomplish what's really best for our kids.

BURNETT: So one thing that I think a lot people, when I've heard people who are frustrated with your side of things, Ms. Lewis, they said, look, Mayor Emanuel wanted to have a longer school day, Chicago had a shorter one than many other school districts. It's one of the worst high school graduation rates in the country.

You have -- they would go through this list of things, and they will say that teachers there make more than teachers elsewhere and they'll say, look, we need to have more accountability. We need there to be longer days, we need teachers to be paid who are good teachers and teachers who are bad to be laid off and not to be given priority in rehiring and all of that makes sense to a lot of people.

Does it make sense to you?

LEWIS: Well, first of all, that's not the issue, and the way you've described. It's common sense, but it's not what really is.

The problem is principals always (ph) had flexibility. And they have also been short-lived. So we have a problem with a four-year flexibility -- I'm sorry, a four-year tenure for principals for by and large. So, we cannot have instability every time a new principal comes in the building, they want to just tear it up because they want their own people.

And one of the problems is, it is principals' responsibility to evaluate teachers. So the whole so-called bad teacher piece, if you look a little further, it's not people that are incompetent, it's not people that don't know their subject matter. It's predominantly people that have been placed with some principal and protected by the principal. Not the union.

And this is the problem that we have been fighting for years, because the analysis has been that unions protect the teachers. We do not. We protect due process. That's a difference.

BURNETT: All right.

LEWIS: In addition, the whole concept of a longer school day is that our test scores have been trending upwards. Our graduation rates have trended upwards. And yet we did that all without a longer day. And yet there is no fanfare made about it.

If you look at the Jonah Edelman video, he said he made up all of that stuff about the longer school day, and Rahm Emanuel used it as a campaign tool. So the key is, let's be honest, and let's have honest conversations, and that's the beauty of this issue that we brought up, was that we started having honest conversations about what school reform really is.

So we want a better day for our kids. We could have planned this together. But when somebody stands on top of you and tries to ram something down your throat, nobody likes that, Erin. Nobody.

BURNETT: Well, I think everybody can agree with you on that.

All right, thank you very much. Karen Lewis, we appreciate your taking the time.

As we said, the Chicago's teachers union strike has ended. And our understanding is that those teachers say they're going to make up those days that the kids have lost later on in the school year.

Well, now our fourth story OUTFRONT: who killed Chris Stevens? It is one week after the horrific attack in which Ambassador Chris Stevens and three other than Americans were killed at the U.S. consulate in Benghazi. Libyan officials have not arrested anyone directly linked to the attack. The government is focused on members of an Islamist militia that is sympathetic to al Qaeda. But the arrests they have made so far are really of people outside the consulate that night but not accused of having anything to do with the attack.

CNN's Arwa Damon has been fighting for answers. It's been hard. She is in Benghazi, and just a few moments ago, I asked her how the investigation is going.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's been incredibly frustrating to try to get a straight answer from this government, because even within the government itself, we're still continuing to hear these conflicting accounts. How many people have actually been arrested? How many of them were associated with the attack? What sort of leads has the government come across?

At this point in time, you still have the head of Libya's General National Congress effectively the country's president, saying that amongst those detained, there were some foreigners that are believed to have links to al Qaeda. That this was a preplanned attack carried out by these extremist entities. And yet you have other senior officials saying there really is no concrete evidence pointing to any of that. And it's been a week since that horrific attack took place.

BURNETT: And, Arwa, as you say, it's been a week. And people would think we would have answers on something as horrific as this. But there haven't been arrests of anyone directly linked to the attack. I mean, why is that? Do you think that it's ever going to happen, if it hasn't happened yet?

DAMON: Well, a lot of this ties into the very complex situation that is Libya today. Those extremist militias, so many fingers are being pointed to, know fully well that the Libyan government cannot go after them. These groups know fully well that right now, they are the most powerful entity inside Libya. And the government knows that, as well, and it does admit that it cannot take them on right now.

BURNETT: And, Arwa, it's amazing when you say that. I mean, even in Benghazi, I know that from some of your reporting, that the -- the safety and security of the city, perhaps of the consulate itself, have been in the hands of the very people who may have killed Ambassador Stevens.

DAMON: Well, it's quite an interesting dynamic that does exist here, because on the one hand, one of these extremist mil militias has a base, its emblem is right on it, they do drive their cars around. They also have their extremist militia emblem alongside it.

And on the other hand, other militias much less of a threat to the U.S. yes they might be slightly conservative. These were ones that were, in fact, tasked with security at the embassy. One of these militias, the 17th of February Brigade, they were actually the only unit that responded to the firefight that took place at the embassy.

But what you have is this incredibly complex tapestry of various different militias made up of these former revolutionary brigades that all come together at times with conflicting interests to create this effective security vacuum that we have here right now.

BURNETT: All right. Arwa Damon, thank you very much for her fearless reporting from Libya tonight.

(END VIDEOTAPE)

BURNETT: Well, today, AQIM, which is al Qaeda Islamic Meghrab, an al Qaeda affiliated in Northern Africa, called for the death of American ambassadors and envoys in the region, specifically in Morocco, Algeria, Tunisia and Mauritania.

For months, we have reported on the rise of al Qaeda-linked militant groups in these countries and others in northern Africa. And now, they're calling for attacks on other American embassies.

This map, we like to put it up because it just shows you the spread here -- will these calls for violence lead to more attacks in the United States?

Rudy Atallah is the former director for Africa Counterterrorism at the Defense Department and he is OUTFRONT.

Rudy, it is always good to talk to you.

And, you know, this comes at a moment when we have heard that al Qaeda is on the run. And, obviously, what we see now is groups that are sympathetic to al Qaeda, linked to al Qaeda or not only not on the run but frankly more powerful than the government in places like Libya.

Are these -- should we take this threat of attack seriously?

RUDY ATALLAH, FORMER DEFENSE DEPT. AFRICA COUNTERTERRORISM DIRECTOR: Absolutely, I think we should take these attacks seriously, because although we're making headway in the Af-Pak region, we have not made any headway in the North Africa-Sahelian region.

Right now, we have new governments in Libya, in Tunisia, and Egypt. And frankly some of these governments are sympathetic a little bit more into the cause or the lane of the extremist elements. So when they pose this threat, you also have a collapsed Libya that has been a conduit for arms pushing across the Sahel region. Now, you have weapons and people who are sympathetic. It causes a big concern for me, at least.

BURNETT: And what are the risks that there could be attacks outside that region? When people in America try to say, well, is this going to be something that spreads, there are attacks on Europe, attacks on the United States. Are these groups getting stronger?

ATALLAH: These groups are getting stronger, and they do have a fairly large presence outside of North Africa, the Sahel. A perfect example, approximately 10 percent of the citizens in France are North African. There are some people there that have sympathetic to the cause that carry dual citizenship.

So, not saying that a French-North African is going to attack, but the possibility always lies there. These guys are very creative. They find ways to attack.

9/11 was a surprise to all of us. But they came up with ways to attack us. And so we always have to be on our guard.

BURNETT: Rudy, thank you very much.

ATALLAH: Thank you.

BURNETT: And next, a man who knows about secret tapes and presidents, Bob Woodward. He talks Romney and he talks Obama in his new book. OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: Our fifth story OUTFRONT: a referendum on Mitt Romney.

Mitt Romney's strategy was to make this election a referendum on President Obama, and his record. But because of his own actions, the conversation keeps coming back to Romney and his missteps. For instance, comments made at the private Florida fund-raiser a few months ago.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: There are 47 percent of the people who will vote for the president no matter what. All right? There are 47 people who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they're entitled to health care, to food, to housing, to you-name-it.

(END VIDEO CLIP)

BURNETT: Well, just hours ago, Mitt Romney appeared on FOX News to explain those comments, but it took eight minutes, OK? It took the entire interview until the end of the last question for Mitt Romney to get to talk about the one thing he actually wants to talk about.

(BEGIN VIDEO CLIP)

ROMNEY: If people think they're better off, I would say well take a look at the -- at the numbers when it comes to median household income, which is down every year for the last four years. Look at unemployment stuck above 8 percent now for the last 43 months. Look at what's happened to the number of people on food stamps, going up, up to 47 million now. There are a lot of people hurting in this country, and the presidents policies aren't working.

(END VIDEO CLIP)

BURNETT: OUTFRONT tonight, a journalist and an author who has been covering politics for more than 40 years, Bob Woodward, who was also out with a new book, "The Price of Politics."

Great to see you, sir. We really appreciate it.

BOB WOODWARD, AUTHOR: Thank you.

BURNETT: I mean, you've been covering politics since Nixon -- you know all the good, all the bad, and all the ugly. There isn't much good anymore.

But do these missteps for Mitt Romney, are they going to cause voters to walk away? How long will this last?

WOODWARD: Well, we can't tell. It's September, and there's always October surprises. Things may occur.

But what he said is, a president, one of the things you learn is that a president has to be interested in the next stage of good for a majority of all people in the country. And for somebody, even a candidate to say -- well, I'm writing off almost half of the people, they will never vote for me, I think he's just -- he's not clear about what he's talking about, because a lot of those people who are on Social Security and Medicare, the health insurance program for the elderly, are Republicans. And so, to a certain extent, he is dissing some of his own base.

BURNETT: And how does this stack up to past campaign mistakes? I mean, a lot of people have brought up President Obama's comment back in 2008 when he talked about people clinging to their guns and religion. He obviously got past that easily.

Will this be more significant for Mitt Romney than a speed bump like that?

WOODWARD: You know, we obviously don't know. And we try to predict, and I think that's -- there's a lot of folly in that. It may have legs and it may not.

But as you earlier on your show talking about the fiscal cliff and the economic problems this country faces -- I mean, the simple reality that applies to everyone and has immense impact is that we have a federal government whose fiscal financial house is not in order. In fact, it's in total disorder. And in four or five months, we're going to be dealing with what's called the fiscal cliff.

But in English, that means the Congress is going to have to go back and approve in some way borrowing perhaps trillions of dollars more. And whether that can be worked out politically is really in many ways what the campaign should be about. Not to dismiss what Romney has said here. He should be held accountable, and he is.

BURNETT: And it's interesting, because you know as we said, it took the whole interview for him to get to try to say, you know, his point of view on, hey, look at the economy, the way I see it, it's worse than all these ways, so vote for me.

Your book, "The Price of Politics" is about -- and is painful in so many ways, about the failure on so many levels of so many people to actually get a deal done to avert a fiscal crisis, by the biggest economy and greatest nation in the world. It's a tragedy.

Do you think that we are going to be able to get a deal? No matter who wins? If Barack Obama wins re-election, he's not going to have both the House and the Senate. I mean, we're going to be in much the situation we are now, even if -- even if he wins.

WOODWARD: We quite likely are. In the three-and-a-half years I describe in minute detail, the negotiations, the discussions, the emotions, they're big themes in here but they're also very big lessons and it's quite possible that Obama, in my discussion with him for this book a couple months ago, he clearly understands that we have to get some control of the spending binge we're on and we need to do something to reform the entitlement programs. He doesn't want to say that or come up with a plan before the election because he's made the political calculation it would not be popular.

BURNETT: All right. Well, Bob Woodward, thank you very much. We appreciate your taking the time. As you know, we're passionate about this issue of the fiscal cliff and the deal and the price of politics, entire book about who did what, when. And it is really worth checking out.

Well, next, the true power of America, Apple.

(COMMERCIAL BREAK)

BURNETT: So it was yet another big day for Apple. Shares of apple actually closed about $700 for the first time. This is one of those things, a landmark after landmark. After hitting a high of $702.33 earlier today, the stock closed at $701.91.

OK. The stock's rise is all about the iPhone 5 because last week's unveiling got everybody really excited, and the company tallied a record 2 million preorders in the first 24 hours. Now, to give you some context, because that's what it's always all about, that is double the first eight orders recorded last year for the iPhone 4s.

And the company is setting records in both the business and tech worlds, which brings us to tonight's number: 16,611. It's a really important number. According to Bespoke's Paul Hickey, if the Apple was added to the Dow Jones Industrial Average, you know, the average you see every night -- this is basically supposed to be a benchmark of where our country and economy is -- if Apple was put in there in June 2009, that is where the Dow would currently be trading.

And you say how significant is that?

I'm going to tell you. The Dow Jones currently sits at about 13,500. A 16,000 Dow would be 2,000 points higher than the all-time record of 14,100 struck back in October 2007.

So, Apple could save our whole market and make us all feel that we're at records instead of -- well, far from. And Apple's $655 billion market cap, it's also something to be proud of. It is larger than the entire S&P 600, that's a smaller company. You put them all together and you still don't get one Apple and it is nearly equal to the combined market cap, this stuns me, of ExxonMobil and Microsoft, the second and third biggest companies in the U.S.

About two years ago, Exxon was bigger than Apple. So Apple's surge has been incredibly fast. Maybe you think it will keep going or maybe you think it's a bubble, but Apple is a world power right now. Its market cap is larger than the GDP of all but 18 countries. Take that, Switzerland, Saudi Arabia.

Apple is a monster. It is only getting bigger.

Anderson Cooper is next.