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ERIN BURNETT OUTFRONT

Mitt Romney's Taxes; Hate for America; House Ethics Committee Probe; Interview with Tim Kaine

Aired September 21, 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's taxes. Tonight we've got them. Not just his 2011 returns, but some details of what he paid over the past 20 years. Do Romney's taxes add up?

Plus, new and deadly anti-American protests break out around the world. The Obama administration is hoping a television ad will stop the violence. And Congresswoman Maxine Waters was accused of using her position to help her husband. Tonight, her colleagues clear her of any wrongdoing. Does that add up?

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett and OUTFRONT tonight Mitt takes it all off, almost. Today Mitt Romney finally released his 2011 tax return. Now, we knew that was coming, but we didn't know he'd almost give us the full monty, because Mitt gave us a summary of his returns for the past 20 years. Nobody thought that was coming and it was tantalizing what Mitt showed us today. It was just a glimpse.

Last year Mitt paid $1.94 million in taxes on $13.7 million of mostly investment income. His effective federal tax rate was 14.1 percent. All right, we have the proof from Romney's tax preparer, PricewaterhouseCoopers in a notarized letter. Between 1990 and 2009, this is the 20-year summary that nobody knew was coming, the Romneys average annual effective federal tax rate was 20.2 percent. They got that by just taking the average of the rate that they paid every year over that 20-year period.

Their lowest annual effective federal personal tax rate, 13.7, so they gave an average of 13.5 of their adjusted gross income to charity. That is an incredibly large amount of money. Hey, if Mitt Romney had only listened to us sooner we could have avoided some of the heat he's taken on this issue.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He must have calculated that there are higher costs (INAUDIBLE).

UNIDENTIFIED MALE: There's obviously something there because if there was nothing there, he would say have at it.

(END VIDEO CLIP)

BURNETT: All right. (INAUDIBLE) to tell you that we told you so, but we kind of did back in July when we told you to just come clean, Mitt.

(BEGIN VIDEO CLIP)

BURNETT: Here is our decent proposal. Release the returns. If there are a lot of tax shelters and some, frankly, incredibly low tax rates, significantly lower say than your 13.9 percent rate in 2010, Mitt, then say this, my tax rates were too low. I don't believe that passively invested money should be taxed lower than income other people earn by working. I benefited from low rates on investment, that's not great policy and I'm going to change it.

(END VIDEO CLIP)

BURNETT: All right. Well, now he came out with -- well part -- he's part of the way there. First of all, he chose to not take a charitable deduction on $1.75 million last year. He did that in order to keep his tax rate at 13 percent, a promise he had made this summer. And, you know, really to stay consistent with what he had said in August.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I did go back and look at my taxes, and over the past 10 years I never paid less than 13 percent.

(END VIDEO CLIP)

BURNETT: Now, how did he take in the charitable deduction in all of his charity last year his effective tax rate would have been according to one estimate that we obtained, 12.2 percent, not 14.1. All right (INAUDIBLE) something that has benefited him greatly of course, the loophole that allows private equity managers like he was at Bain Capital to be taxed at capital gains rates instead of the tax rates that the rest of us pay on our labor, but he did do something else we've called for. Again, back to our show in July.

(BEGIN VIDEO CLIP)

BURNETT: It is true that Mitt Romney gave $7 million to charity in the two years that I held up, that's 2010 and 2011. Now, that's 16.4 percent of his income. It is more than he paid in federal taxes. Now look -- keep this screen up because I want to show you this. It's not like he sat there and hoarded the money he didn't pay to Uncle Sam. He gave enough away to make his rate, well, 31 percent, greater than the 30 percent that President Barack Obama says should be the minimum rate for wealthy Americans. So if you look at it that way, Mitt's taxes seem to add up just fine. He could make the argument that's why he should seize the narrative.

(END VIDEO CLIP)

BURNETT: OK. Well, today I guess better late than never Mitt did just that. He showed us that he gives to Uncle Sam and charity combined way more than the federal tax rate would require him. According to PricewaterhouseCoopers when you add up the total amount the Romneys paid in federal and state taxes plus the total amount he gave to charity between 1999 and 2009 you get 38.5 percent of his adjusted gross income. That is a pretty stunningly large amount that there are probably few Americans in this country can say that they do.

So this is all good and well, but if you're going to show us this much skin, Mitt, I mean why leave the leaf on? Why leave -- by the way, can I just hold this up. Can we put that back for one second? Only because we got his medical records today and maybe he does look like this, his standing heart rate is 40, 40, all right? I mean it's kind of crazy so maybe we're not exaggerating there. But when it comes to the taxes, he's already getting criticism because of the bullet points we got for the past 20 years.

We didn't get the returns. We've seen headlines like this one already from "The Washington Post". "Expert: Romney may have paid less in taxes over 20 years than it appears." Mitt, your bullet points on the past 20 years were pretty solid. If you're finally going to concede on the point of putting out your taxes after all the pain and suffering you endured from conservatives and liberals when you said you would never put them out, were your bullet points enough?

Reihan Salam with "The National Review" is with me along with Marc Lamont Hill, columnist and editor-at-large at the "Philadelphia Daily News" -- good to see you both. Reihan, did Mitt Romney --

UNIDENTIFIED MALE: Good to be here.

BURNETT: He came out -- he surprised everybody with the 20-year bullet points and I think he probably surprised a lot of people, I will get to Harry Reid in a moment for those of you saying why haven't you picked on Harry yet, just a minute. Did he do enough? Did he just fan the fire of a story that kind of had started to go away?

REIHAN SALAM, CNN CONTRIBUTOR: I think that he may well have fanned the fire but he's going to have a very interesting conversation, right? So let's say people are saying, hey, Mitt you're still not paying enough. Well here's the thing. Had he not given away 30 percent of his income, then he would have paid a federal tax rate of 18 percent.

BURNETT: You're talking about for last year.

SALAM: Right, exactly for 2011. So then the question is, well how do you feel about the fact that he gave this amount to charity? Does that really count as something that's giving to the common wheel, to the public good, or is it only money in taxes that should count as money that you're giving, you know for the greater good? That's a really interesting conceptual question that divides people in interesting ways, and I think that it's actually a better conversation to be having than some of the other conversations that we could be having right now about the Romney campaign.

BURNETT: Like the 47 percent comment or something --

SALAM: Sure -- absolutely -- absolutely.

(CROSSTALK)

BURNETT: So Marc, do you think this was a tactical, hey, look, I know this may not play well for me but it's going to play a heck of a lot better than the other conversations going on this week?

MARC LAMONT HILL, HOST, OUR WORLD WITH BLACK ENTERPRISE: Well, that's exactly right. It's at least a divided argument. There are people who will say Mitt Romney didn't pay enough and that sparks a whole different kind of reaction from people who are against any more tax hikes. So I mean it's at least a divided conversation. When, you know, you have that 47 percent moment or when you just completely bungle the conversation on Egypt and Libya, you're in a situation where almost everyone is against you and you don't want that. So Romney is in a really bad position where this kind of bad news is simply better than the other kind of bad news.

BURNETT: So let me play what Ann Romney had to say back in August, Reihan, when she was being pushed about the tax issue. Here is what she said.

(BEGIN VIDEO CLIP)

ANN ROMNEY, WIFE OF MITT ROMNEY: We have been very transparent to what's legally required of us, but the more we release the more we get attacked.

(END VIDEO CLIP)

BURNETT: So Reihan now that came out with the bullet points for 20 years but not the backup tax returns. Why do that? Why not just put them all out? Why not rip the fig leaf off? You've got a good physique.

(CROSSTALK)

HILL: (INAUDIBLE) see it.

SALAM: Look, I can't say for sure but what I do think that one possibility is this, there's already a ton of conspiracy-mongering about this.

BURNETT: Yes.

SALAM: There are people saying hey he amended those past tax returns, that's what he's been feverishly doing for the last three months and then he can just point to the fact that, look, I have given an enormous amount in charitable contributions and one of the really interesting dividing lines in this election is civil society.

BURNETT: Yes.

SALAM: How do you feel about it? You know statism, these big ideological issues where a guy who is giving a huge amount of money to his church and to private foundations --

BURNETT: Correct. SALAM: -- is on one side of these debates and folks that say hey it's all about taxes, that's what matters. That's the vehicle of you know of what really counts for a rich person to do, to pay.

BURNETT: Yes and look let me play one other thing, Marc. As I promised I would get to this. There is one person tonight who may owe a serious apology. Remember this?

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), NEVADA: So the word is out that he hasn't paid any taxes for 10 years. Let him prove that he has paid taxes because he hasn't.

(END VIDEO CLIP)

BURNETT: All right before -- obviously that was Harry Reid. Marc, before he said he had sources to that effect. He did put out a statement, Harry Reid, today and it was not an apology. It said "the information released today reveals that Mitt Romney manipulated one of only two years of tax returns he's seen fit to show the American people and then only to conform with his public statements. That raises the question what else in those returns has Romney manipulated?" He obviously is referring to not taking the full deduction on charity so the tax rate was above 13 percent.

HILL: Not taking them yet. Not taking them yet. Remember after he loses the election in November he could still file an amended return and get a big check from the U.S. Treasury --

BURNETT: OK.

HILL: -- for the amount that he didn't take right now --

BURNETT: That is a fair point. That is a fair point. Harry Reid though, doesn't he owe an apology?

HILL: No, I don't think so. I think if Mitt had released all of the information, then he'd owe him an apology. I suspect that Harry Reid is wrong. I don't think Harry Reid was lying. I think he had a bad source. But I do think that he would owe Harry Reid an -- Harry Reid would owe him an apology if Mitt released all the detailed information. Right now we don't know that Mitt didn't have an amended -- a set of amended returns. We don't know if those bullet points are consistent with what his original returns were. We just don't know. He's giving us more questions than answers --

(CROSSTALK)

BURNETT: Well we could -- all right well I'm sure we can get answers on those things. (INAUDIBLE) there's only a certain period of time you can amend and one quick thing for everyone, just to make sure everyone understands. It would be very standard for someone like Mitt Romney to file his tax returns October 15th would be the deadline because of a lot of the forms that come in, so not a stall --

(CROSSTALK)

SALAM: -- paid more than he owed. I mean that's the thing, right?

BURNETT: Well that's one point of view. I'm merely pointing out that the time of file is all right.

(CROSSTALK)

BURNETT: I got -- I'm sorry, Marc. I got to leave it there, but I look forward to having you both back. You were great.

Still OUTFRONT as new anti-U.S. protests pop up the American government is trying to calm down the crowds with a new television ad. This is a massive blitz. This is like running a Super Bowl ad. Will it work?

Plus, she's known as the "white widow", and she's suspected of helping terrorists linked to al Qaeda but no one can seem to find her. So we sent one of our reporters to track down this woman known as the "white widow".

And who is the Democrat and who is the Republican? In a key Senate race it's a little hard to tell after the recent debate. One of the candidates, Tim Kaine, explains his side ahead.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT, hate for America. The violent protests raging in Pakistan today left at least 15 dead; thousands of demonstrators were burning American flags. The Pakistani government actually declared it a national holiday calling it a day of loving the prophet. The anti-American outrage comes as a new 30- second ad appears on Pakistani television featuring President Obama and Secretary of State Hillary Clinton denouncing the anti-Islamic movie that has sparked protests in more than two dozen countries.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Since our founding the United States has been a nation that respects all faiths. We reject all efforts to denigrate the religious beliefs of others.

HILLARY CLINTON, SECRETARY OF STATE: The United States government had absolutely nothing to do with this video. We absolutely reject its content and message.

(END VIDEO CLIP)

BURNETT: That's exactly how it's airing there and those subtitles that you see below are in urdio (ph). The State Department says the ad cost $70,000 to run on 14 different channels in Pakistan which reach 80 to 90 percent of the country in prime time for five full days. This is a major blitz for the airwaves and to give you some context on how significant of an ad by this is, what a bet the U.S. is making on this, to do the same thing in the United States, to reach 80 to 90 percent -- 80 to 90 percent of the population in prime time would cost millions and millions and millions of dollars. Just one ad on one night in this country costs $135,000 on average.

All in to have that impact in the U.S. would be at least $7 million and could be multiples of that. The bottom line, the Obama administration is all in on convincing Pakistanis that the U.S. government is not bad. It's a complicated relationship and it's one of the major national security issues of this election. Fran Townsend is national security contributor and a member of both the DHS and CIA External Advisory Boards. Fran, always good to see you. So this video, I mean this is a big -- this is a big bet, prime time in Pakistan; you're not going to miss seeing Barack Obama and Hillary Clinton, 150 million people. Is this going to do any good?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I don't think so. I mean it's a little mystifying to me because what you're trying to do is persuade people that you already know don't trust you and don't believe you, and so this is going to be viewed -- why did they -- they don't think this will be viewed as more U.S. propaganda. Of course we didn't support the video that's so offensive, but it's not clear that that's actually what's driving this. And consequently this ad buy, it's not clear it's going to have any effect. The one thing we do know that does have an effect on public opinion in foreign countries, specifically Pakistan, we knew after we provided aid after the Pakistan earthquake, public opinion --

BURNETT: Humanitarian aid.

TOWNSEND: Humanitarian aide -- improved, not for a sustained period of time but we could -- you could at least measure and know it had an impact. It's not clear to me that this is going to do that.

BURNETT: And so in aid the U.S. gave Pakistan about $2 billion in 2012. Today protesters were carrying pictures of President Obama superimposed on a donkey and they were doing even worse things and I found this amazing. According to a Pew Research poll 80 percent of Pakistanis have an unfavorable view of America. It was only 68 percent when President Obama came into office. Is this trend going to keep getting worse? I mean I know from the people I have talked to in Pakistan the Osama bin Laden situation is a big part of this.

TOWNSEND: That's right.

BURNETT: But is it going to keep getting worse?

TOWNSEND: You know look, I think we have to expect it will sustain itself, right? We're in for a protracted period where not only in Pakistan but throughout the Middle East you're going to see this kind of protest, these sorts of problems. But in fairness to the administration, I think you've got to realize whether it's bin Laden or Ray Davis (ph) prior to those things you had gone to the --

BURNETT: The CIA agent who killed a Pakistani.

TOWNSEND: Correct.

BURNETT: Yes.

TOWNSEND: If you had gone to Pakistanis and said what are the 10 things the president can do to improve the relationship, if he had done all 10 of those -- whatever those things are the Pakistanis believe we should do to improve relations and then you had the contractor kill a Pakistani, Ray Davis (ph) --

BURNETT: You would be back to where you were.

TOWNSEND: Exactly right. So in some respects a national leader can't win if he takes risks and acts in his own national interests.

BURNETT: So, but the question though some people have then is why bother at all. I mean right now we need Pakistan because our trucks are transiting (ph) over Pakistani territory into Afghanistan. But then some say why bother? Why not cut off aid? I mean George W. Bush, of course, was all in on Pakistan too giving $1 billion a year. Obviously that's gone up --

TOWNSEND: That's right.

BURNETT: -- subsequently, but he was all in and 74 percent of the country now sees America as an enemy. Sixty percent have no confidence in our president. Some people say well then just get the heck out.

TOWNSEND: Right. And there will be -- in these -- especially in these tragic times with what happened in Benghazi, there is a natural reaction of Americans to say let's pull back. But we know what happens when we take an isolationist policy. Things only get worse. There's no protecting yourself in a world that is so global and, by the way, let's remember Pakistan has nuclear weapons, and so completely disengaging and leaving them and abandoning sort of any form of relationship is very, very dangerous.

BURNETT: All right. Well thanks very much to Fran Townsend.

And next, a member of Congress cleared of ethics violations after a three-year investigation and a pretty amazing tax -- price tag for taxpayers. So does that add up?

And later, members of a jailed Russian punk band have gained the support of Yoko Ono ahead of a court hearing that could set them free. The husband of one of the band members and his little daughter comes OUTFRONT tonight.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, Congresswoman Maxine Waters not guilty. After three years of an investigation and what could be a $1.3 million tab to taxpayers, the House Ethics Committee has dropped its case against the California Democrat. The alleged wrongdoing stems from a September 2008 meeting that she set up between a group of minority owned banks and the Treasury Department. The problem is her husband had a financial interest in one of the banks, One United. Now this was back around September of 2008, the height of the financial crisis when treasury officials had a lot of things on their plates, things like the possible implosion of the American economy and the failure of the banks that dominate our nation.

OUTFRONT tonight, Manu Raju, the senior congressional reporter for "Politico". Manu good to see you, appreciate your taking the time. So this situation with Maxine Waters, I mean a lot of people have been watching this for a long time, three years, $1.3 million in a possible taxpayer tab. What did the Ethics Committee come up with after all that?

MANU RAJU, SENIOR CONGRESSIONAL REPORTER AT POLITICO: Not a whole lot. I mean, Maxine Waters, as you mentioned, was cleared of any wrongdoing. Her chief of staff Mckale Moore (ph) was hit with three violations but they are coming in a form it's called a letter of reproval (ph), which is essentially the lowest form of punishment that can be given to someone, and he's going to be back on her staff on Monday, and Maxine Waters, she's in line to become the top Democrat in the House Financial Services Committee potentially the chairman, a very powerful position in Congress. They denied any wrongdoing all along and the committee essentially wasn't able to prove its case.

BURNETT: And so she could be about to get a major promotion, as you point out, one of it not the most important committee in the country right now with the economy as the top issue. What happened to the Republicans on the Ethics Committee?

RAJU: All five of them recused themselves in addition to one of the Democrats -- this all happened in order to break a really bitter partisan deadlock over how to move forward. That came after a bunch of internal documents were leaked to my "Politico" colleague John Bresenhan (ph), who really revealed that there was a lot of potential mishandling at the staff level and the member level on this case and in order to move forward, they took this unprecedented action, something that has never been done on the committee's 45-year history --

BURNETT: Right.

RAJU: -- and the Republicans, they all recused themselves, including the Democrat as well.

BURNETT: So -- all right so the bottom line is Democrats decided that a Democrat wasn't guilty and maybe that was the right decision, maybe it wasn't, but people are going to wonder about that. Does the House Ethics Committee have teeth, I mean, passed this Congress, four people cleared, only one reprimanded. Who do they censor?

RAJU: Well the Republicans -- the replacement Republicans who did come on that committee was a decision that was reached on a bipartisan level today, but that that is a fair criticism because this has been nothing short of a disastrous episode for the Ethics Committee. It's been a big problem and it shows just the fact that you mentioned, that members have a hard time policing themselves.

BURNETT: All right, thanks very much, Manu Raju, a story a lot of people were talking about today. Well still to come, she is wanted around the world for taking part in terror attacks linked to al Qaeda, but so far no one has been able to track down the woman known as the "white widow". So we sent our David McKenzie (ph) looking for her. An OUTFRONT investigation is next, and a role reversal in Virginia, the two Senate candidates are sounding like they're from the opposing party. We're going to ask one of them, Tim Kaine, about it next.

(COMMERCIAL BREAK)

BURNETT: Breaking news now. Pro-democracy protesters in Benghazi, Libya, have just stormed and taken over the headquarters of a radical Islamist group tied to the attack on the American consulate in which four Americans were killed.

We want to go straight to Arwa Damon who is on the phone from Benghazi.

And, Arwa, what's happening right now?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Well, Erin, after they took over the headquarters of that extremist group, there was quite the sense of euphoria amongst everyone that we're speaking to, even though they did torch one of the vehicles. They were breaking windows. They said they freed 20 prisoners.

And one sentiment that one would get during the revolution, that the people were really beginning to take charge of their own destiny and they were saying that they were out to take their own city back, the city of Benghazi, from these extremist militias that could effectively operate with a pretty high level of impunity here.

But since then things took something of a sinister turn, but the next location that was targeted was, in fact, the headquarters of a battalion that has been endorsed by the government. We were at that location as well. We were hearing some pretty intense albeit sporadic gunfire, explosions in the distance.

The government itself quickly trying to take to the airwaves here on TV and on the radio, trying to tell people that this battalion that they were targeting was, in fact, endorsed by the government itself. And this goes to underscore just how chaotic and volatile the situation here is and just how easily manipulated the emotions of these crowds can, in fact, be, Erin.

BURNETT: All right. Well, Arwa Damon, thank you very much. On the ground in Benghazi, where the Islamist headquarters was stormed by protesters tonight.

(BEGIN VIDEOTAPE)

BURNETT: Our fourth story OUTFRONT: will the real Republican please stand up?

It's a little hard to tell who was the Republican during the Senate debate yesterday in Virginia. Here is one candidate.

(BEGIN VIDEO CLIP)

TIM KAINE (D), VA SENATE CANDIDATE: I would be open to a proposal that would have some minimum tax level for everyone.

(END VIDEO CLIP)

BURNETT: And now here is what the other candidate said after the debate to reporters. I'll quote him, quote, "I don't think everyone ought to be paying income taxes."

All right. If you used simple logic, conventional wisdom and assume the guy who wants to tax everyone is a Republican and the guy who wants to give some people a pass is a Democrat you would be wrong. Tim Kaine, the man you're going to see on your left, he's the Democrat, the guy on your right, he's the Republican -- left and right on your screen -- but hard to tell from their remarks.

But even the thing is, if you don't live in Virginia, this race is still crucial to you, and here is why. Control of the U.S. Senate could hang in the balance. Republicans need to get four seats to take control. There are only five states considered tossups and Virginia is one of them.

Tim Kaine is a Democratic Senate candidate from Virginia, also former governor of Virginia, and former Democratic National Committee chair.

Good to see you, sir. Appreciate it.

KAINE: Hey, Erin. Good to be back.

BURNETT: We probably -- we probably had some people stumped there. But now, this is interesting because I know you said I'm going to be open to a minimum tax, not that you're trying to go for that or plan for that.

KAINE: Yes.

BURNETT: But you're open to putting that on the negotiating table.

KAINE: Sure, I'd be open to it. Look, I'm going to go into the Senate and I'm going to be open to good faith proposals of all kinds. My opponent took the Grover Norquist pledge where he takes all revenue off the table.

But I pointed out immediately in that clip that you got to remember that there's kind of a lie being perpetrated that 47 percent of the people, you know, don't pay taxes, and it's just not true. The poor pay very high tax rates. I used to be the mayor of Richmond, and if you look at the total tax burden of a middle class or poor family, they're paying a higher tax rate than Mitt Romney is, and I pointed that out very pointedly to the audience.

BURNETT: Well, they --

KAINE: And that is something that would, you know, that really you got to consider.

BURNETT: I guess what I'm curious about is you do believe that broadening the base then as a concept, i.e., more teem to pay federal tax than are paying it now is a good thing.

KAINE: Yes. I think everybody agrees we have to broaden the base. Now, when I was governor because of our economic circumstance during the tough recession, I raised the threshold so that low-income working people, tens of thousands of them, did not have to pay state income tax during a tough time.

But you can look -- you broaden the base because there are small businesses that pay federal corporate income tax and a lot of large businesses that don't. Yesterday I put my own proposal on the table, which is heavily focused on the Bush tax cut --

BURNETT: Right, which I want to ask you about. I want to ask you about.

But I have to say just hearing you, look, you're say something that is sort of -- I'm going to say in the middle. There's plenty of Republicans that would agree with what you're saying, about broadening the base and closing loopholes.

KAINE: Yes.

BURNETT: Actually one of them appears to be Mitt Romney. Hold on that for a second.

This Bush tax cuts going away for people who make over half a million a year.

KAINE: Yes.

BURNETT: That's your proposal.

KAINE: Yes, it is.

BURNETT: The president has said over $250,000 and he'd veto anything else.

KAINE: Yes.

BURNETT: What do you think is the mistake he's making in going -- putting the cutoff half a million dollars lower than you are?

KAINE: Sure. Erin, my position is now a year old. You know, when I was party chair I could see the positions hardening in both parties. Republicans, make them all permanent. Democrats, repeal them over $250,000, and the positions are hardened.

Over the summer, you saw the Senate pass their version. The House passed the Republican version. Each knew that the version was going nowhere when it crossed over.

Now is the time for a compromise. So if you find a compromise and you say, OK, let's let the tax cuts expire over 500k, it's better for small businesses in the sub chapter S class. And, second, it produces $500 billion of revenue over the next 10 years that you can then use to deal with the deficit and avoid the need for the kind of devastating sequester cuts that will hurt Medicare, defense, and other key priorities.

BURNETT: All right. All of that makes sense, but I want to hone in on this issue of you differ with the president on this. He's campaigning in the state.

KAINE: Yes, we --

BURNETT: I know you get along with him but you weren't by his side.

KAINE: Yes.

BURNETT: You're different than he is on some policies.

KAINE: I am. I mean, look, I am a strong supporter of the president. I want him to get re-elected and I do a lot of campaigning with him, but we don't agree on everything. I mean, that's not unusual for Democrats.

And this difference of opinion I wouldn't say it's a theological one. It's kind of a practical one.

BURNETT: And where else do you differ from him? Obviously you differ on the Bush tax cuts. What are the other two areas you mentioned?

KAINE: Sort of the two that have come up in the campaign are right at the beginning of the campaign when the president put the United States behind the military NATO action in Libya, I thought the rationale was a good rationale. But in the Senate, Erin, I'm going to be a stickler about making Congress vote on things like that.

I think if Congress won't go on the board when we put military people and personnel and assets into the field in a war situation, why even have a Congress? And so, I think the president should have gotten a vote in Congress, and I actually think Congress was sort of complicit in it because, frankly, what they like to do is not have a vote --

BURNETT: And then be able to blame the president when it goes wrong.

KAINE: Yes. And when it goes right, of course, we were with you all the time.

But I'm going to really insist Congress vote.

The second one where we differed is earlier in the year when the president announced under the Affordable Care Act that there was mandated contraception coverage, I really support that. I think that's great. That's important preventative health.

But I didn't think the religious employer exemption that the president and his team crafted was broad enough. I thought it was a good faith effort, but I didn't think it was broad enough.

So, I spoke up publicly. I said I think they need to fix it and make it broader. They did to my satisfaction, not to everybody's satisfaction, but the adjustment they made after I publicly spoke out, I didn't mind pointing out where I had a difference and I was glad they fixed it.

(END VIDEO CLIP)

BURNETT: Well, now a manhunt on tonight for a terrorist of the worst kind. She is known as the "White Widow". She's a mysterious woman who is believed to have ties to an East African terror cell with links to al Qaeda.

According to officials, elusive militants that plan terrorist attacks both here in the United States and abroad are the biggest threat to America. The attack at the American consulate in Libya is a stark reminder, and when we traveled to the Mali border in Africa we witnessed it firsthand how intimidating and powerful these militant groups can be.

Now, our David McKenzie has traveled to Mombasa to unravel the mystery of the "White Widow".

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT (voice-over): This British mother is a wanted woman. Samantha Lewthwaite was once cast as a victim, the pregnant wife of one of the suicide bombers who hit London in 2005. She condemned the attack and then vanished.

(on camera): She surfaced here in Mombasa. Intelligence sources say Samantha Lewthwaite was now part of an East African based terror cell. She became known as the "White Widow".

(voice-over): We're here to track her down. In December, Kenyan police helped by British authorities raided these three homes in the dead of night, in pursuit of a complex web of terror.

ERIC KIRAITHE, KENYA POLICE CHIEF SPOKESMAN: Devastating. Devastating.

MCKENZIE: They found enough bomb-making equipment to wreak havoc.

KIRAITHE: The nature and amount of weapons we recovered in that house, the intentions must have been sinister.

MCKENZIE: Kenyan intelligence officials say the cell planned to destroy the Nyali Bridge, the Mombasa ferry, and unspecified Western targets.

Police arrested several Kenyans and a Briton, Jermaine Grant. Grant has been detained before trying to cross the border. But Somali militants raided the border jail where he was being held and freed him.

Kenyan police say grant knew Samantha Lewthwaite who entered on a South African passport and moved among Mombasa's radical Islamists.

One of them, Abubaker Sharif is on a U.S. terror watch list, though he denies any links to terror groups.

ABUBAKER SHARIF: Nobody has seen her. She's a myth. And I'm giving you a challenge. Go all over Mombasa, find somebody who has seen her.

MCKENZIE: So we tried. First heading north out of Mombasa on a tip.

(on camera): Intelligence officials believe that Lewthwaite spent a significant amount of time in this luxury villa north of Mombasa.

(voice-over): The caretaker says an Arabic-looking man paid three months up front, but he never saw a woman.

In another upscale neighborhood, we catch a break.

UNIDENTIFIED MALE (through translator): She did not want to say her name and she used to hide her face.

MCKENZIE: A security guard didn't want to show his face says a white woman moved into the compound with her three young children. She was always in a full hijab.

UNIDENTIFIED MALE (through translator): When she wanted to send me, she would give me money through a hole in the gates. It was very strange.

MCKENZIE: Authorities say Lewthwaite was living with Habib Ghani, a naturalized Britain. They're both accused of planning terror attacks.

One day, he watched the woman leave with her three children. That night the police raided. The white widow had vanished.

Her intentions remain a mystery. Some intelligence officials believe she is a committed jihadist involved with an international terror cell. Others say she's little more than a sympathizer. As for where she's gone --

KIRAITHE: I wish I knew exactly where she is. I would love to know.

MCKENZIE: Rumors abound, only the mystery of the "White Widow" remains. David McKenzie, CNN, Mombasa, Kenya.

(END VIDEOTAPE)

BURNETT: A woman the world is looking for.

And next, is it time to just end the euro, give up on that whole experiment?

And then Yoko Ono joins the fight to free Pussy Riot. But will it help ahead of a crucial court date? The husband and the daughter of the one of the jailed members of punk band join me here on set live, next.

(COMMERCIAL BREAK)

BURNETT: So the country of Cyprus which has beautiful beaches and is also known as a rather shady money haven floated the idea of an exit from the euro zone. That was according to Andros Kyprianou, who's AKEL party is the primary backer of the current leftwing government. During an interview today, he said, "I am certainly leaving this possibility open. I'm not prejudging what we will do. What I am saying is these issues must be discussed seriously if we want to serve the interests of the Cypriot people.

Which bring us to tonight's number: $17 trillion. According to the IMF, that's the combined GDP of the European Union which makes it the biggest economy in the world, bigger than China and bigger than the United States.

We hear so much about the bailout of smaller E.U. countries like Spain, and Ireland, Greece, Portugal, hey, even Cyprus. But the biggest beneficiaries of Europe as a state-like concept remain the big guys who aren't getting bailed out, Germany and France, because with the euro, Germany and France -- without it, sorry, they're number four and number five on the list of the world's biggest economies. With it they're number one.

So while it's in the best interest of Germany and France to keep the E.U. together, it might be time for the smaller countries like Cyprus to go their own way.

For more on this subject, check out my column in the current issue of "Fortune" magazine.

And now, our fifth story OUTFRONT, which you may have heard a little bit there. A little person who is going to be with us in just one moment. Yoko Ono is making the case to free Pussy Riot. That's the Russian punk band whose members are behind bars after they were found guilty of hooliganism. Their crime, performing an anti-Putin song in a Moscow church.

Today, Ono honored the band with a Lennon-Ono Grant for Peace Award.

(BEGIN VIDEO CLIP) YOKO ONO: I thank Pussy Riot was standing firmly in their belief for freedom of expression, and making all women of the world proud to be women.

(END VIDEO CLIP)

BURNETT: OUTFRONT tonight, Pyotr Verzilov, the husband of a jailed band member Nadia Tolokonnikova, and their 4-year-old daughter Gera is also with us.

Good to see both of you. We appreciate it.

PYOTR VERZILOV, HUSBAND OF JAILED RUSSIAN PUNK BAND MEMBER: Good to be here.

BURNETT: So let me just ask you how that moment was, winning that award, coming here to the U.S. You have been tirelessly championing for your wife who is in jail in Moscow and you came here to win that award. What was it like?

P. VERZILOV: Well, it was very wonderful obviously for any person who's doing political activism and who is active in fighting for any cause. Yoko Ono is very much of a big symbol and everyone has images of how she was fighting for her own cause in the '70s and '80s. And basically, well, it's an incredible connection that we were just amazed to see her make today.

BURNETT: And tell me about Nadia now. I know you saw her earlier this week. Where is she? How have those visits gone?

P. VERZILOV: So on Monday me and Gera went to prison number six located in the southern part of Moscow and it was very wonderful visit because basically Gera got to see Nadia for the first time in six months. She wasn't able to see mom for all of that time and, well, it was very emotional one and a half hour. Her and Nadia, they talked, they shared their thoughts.

Nadia told about all the games she thought up while sitting in prison, and Gera told about the games that she was playing while missing Nadia at that time.

BURNETT: Yes, that is your mom. Can you ask her -- I know for our viewers, Gera doesn't speak English but what was the visit like? Can you ask her. To see your mom for the first time in six months?

(SPEAKING FOREIGN LANGUAGE)

P. VERZILOV: She said that she loved her. She said that --

(SPEAKING FOREIGN LANGUAGE)

P. VERZILOV: She said she was reminding how she would wash her, put her to bed, to sleep.

BURNETT: That must have been so hard for your wife. How often will she get to see Gera? P. VERZILOV: No one knows because the girls are in a pretrial detention center right now and after the appeal goes through Moscow City court on October 1st, it's a very important date, they might be sent to a colony around 400 or 500 miles from Moscow. No one knows what the conditions will be like down there. How the means of visitation will be there so essentially it's unpredictable how things will happen.

BURNETT: Well, Pyotr, when you say it could be brutal, what we understand from prisons in Moscow, 2,000 prisoners have died in or en route to Russian prisons in the past six months. I mean, it's got to be terrifying to you to imagine she may be transferred.

Do you think that you will be successful in hopefully keeping her in the detention center in Moscow?

P. VERZILOV: Well, the political situation in Russia is really difficult. Basically a week ago, we had Prime Minister Medvedev almost join the Free Pussy Riot cause --

BURNETT: Yes. I was amazed by that.

P. VERZILOV: Yes, he was saying the prison sentence is disproportionate, the girls should not be sent to prison for doing that. And -- but it must be understood that his -- Medvedev's words should be taken very lightly because he does not carry any heavy weight in Russian politics and we still think the girls will be sent to a colony and no one really knows what the conditions down there will be like, because yes, horrible things do happen, violence does happen and the worst could happen there.

So, that's why we're fighting as hard as we can and obviously, we'll be doing everything we can to make sure that the girls will not be sent to this colony. They have filed an appeal not to be sent there. We want them in Moscow. But we think that Russian authorities will not recognize that and still ship them off.

BURNETT: And, Gera, we see the pictures of Nadia. She is saying her mom's name. What is she going to be, is she going to be preparing anything for the next visit? I mean, it's got to be hard for you because you can't tell her when she's going to see her again. Does she understand? I know you said you told her early on the truth.

P. VERZILOV: Gera perfectly understands the political situation in Russia. She constantly tells people that Putin has put Nadia in prison. He's locked her up in a cage and we have to find a smart way to free her.

So, she draws all these plans where she breaks down the prison walls and lets Nadia free. It's very amazing.

BURNETT: Yes, it is very amazing. She's a beautiful little girl.

Thank you so much. Good luck. I know you're going back to Moscow. And thank you.

GERA VERZILOV: Thank you.

P. VERZILOV: Thank you.

BURNETT: Well, now, let's check in with Anderson Cooper with a look at what's coming up on "A.C. 360" -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Hey, Erin. Thanks very much.

Yes, we have breaking news tonight. Exclusive new details you will only see on this program about the attack in Libya that killed four Americans, including Ambassador Christopher Stevens and two former Navy SEALs Glen Doherty and Tyrone Woods. We know they died heroes, but until tonight we had no idea just how far beyond the call of duty these two former SEALs went. CNN contributor and former homeland security advisor Fran Townsend joins us with that exclusive reporting.

Also, CNN's Arwa Damon has been breaking news all week from Benghazi.

Also, ahead, details of an emergency landing in Colorado with Ann Romney aboard. Smoke filled the cabin after an apparent electrical fire. We'll have details on that.

Those stories and, of course, tonight's "Ridiculist" and the latest on Mitt Romney's taxes. Mary Matalin and James Carville square off, and you got to see it to believe it -- Erin.

BURNETT: All right, Anderson , thanks. And see you in a few moments.

All right. Well, Rob Lowe says that I'm a lefty. Is he right?

(COMMERCIAL BREAK)

BURNETT: So every night, we ask do the claims and actions of our political leaders add up. We take our fair share of criticism for this, depending on what we say on any given night and this week it all came on the same day. On Wednesday, "News Busters," a site that claims or that aims, I'm sorry, to expose and combat liberal media bias posted a story entitled "CNN hypes Romney tape as monumental gaffe," manna from heaven from the left.

In the column, the author wrote, CNN, quote, "boosted the Obama campaign spin that Romney is out of touch with ordinary Americans and host Erin Burnett called it manna from heaven for the left on her OUTFRONT show." The column concluded I was helping keep the anti- Romney media firestorm raging.

On the very same day that column ran, the actor Rob Lowe was watching our show and he tweeted Erin Brown carrying some heavy water for President Obama right now on CNN. Now, first of all, I was a little hurt that Rob Lowe got my name wrong. I mean, I know Rob Lowe and I actually thought that we had something special. I mean, when I interviewed him and his business partner Tom Barrett about a new movie venture, there was something special, right off the top.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Erin, before we start, I have to tell you the only time I have ever seen Rob Lowe nervous was live TV with you. Congratulations. This is great.

ROB LOWE, ACTOR: It's true, it's true. We're together at last.

(END VIDEO CLIP)

BURNETT: Together at last, Rob? What happened to that? But hey, it's Burnett, OK? It's Burnett.

Hey, I'm glad to know Rob thinks I'm a lefty, because I wasn't sure, because on the same day Rob Lowe and News Busters were calling me a liberal, I saw this story in a West Coast blog called "The Examiner" which included the line "conservative-leaning CNN host Erin Burnett took on the Republican charge." The article was about our story pointing out that Mitt Romney supports redistribution if you look at his tax policy facts.

My head was literally spinning. Am I a liberal? Am I a conservative? I can't lie. This political schizophrenia is deeply confusing.

So we decided maybe we're going to take the weekend off, decide which side we fall on, decide who we are going to vote for or you know what? Maybe I'll just keep on doing what I've been doing, day in and day out, taking the criticism and the chips where they may fall.

Thanks so much for watching. Have a wonderful weekend.

"A.C. 360" starts right now.