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ERIN BURNETT OUTFRONT

Tax Cuts; Interview with Obama Campaign Press Secretary Ben LaBolt; Interview with Rep. Elijah Cummings; Libyan Attack; Arctic Sea Drilling

Aired October 9, 2012 - 19:00   ET

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


ERIN BURNETT, HOST: OUTFRONT next game on, new polls released just hours ago show a post-debate surge for Mitt Romney, but does he have enough momentum to win the whole thing?

Plus, breaking news. The State Department now says there was no protest over a controversial film on the night the ambassador to Libya was murdered. No protest outside the Benghazi Consulate.

And the U.S. military says it doesn't need to refurbish hundreds of M1 Abrams (ph) tanks, so then why is $3 billion being spent right now to update those tanks? It's an OUTFRONT investigation.

Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. And OUTFRONT tonight, Romney dodges, Obama spins. It's sort of a new dance move -- dodge and spin. Well the Republican candidate just spoke with our Wolf Blitzer and when Wolf asked him to get specific on tax cuts, here's what happened.

(BEGIN VIDEO CLIP)

WOLF BLITZER, HOST, "THE SITUATION ROOM": And even though you're going to lower the income tax rates for people making let's say more than $250,000 a year, but you're going to eliminate some loopholes and deductions, exemptions, tax credits, is that what I'm hearing?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: That's right. I'll bring the rate down across the board. But eliminate or limit, rather, deductions or credits and exemptions and so forth, particularly for people at the high end, because you have to do that to make sure that distributionally (ph) we continue to have the high-income people still pay the same share, the high share that they pay today.

BLITZER: Would that add up to the 4.8 or $5 trillion that's been estimated -- your tax -- your comprehensive tax reductions would cost?

ROMNEY: Well, actually, the president's charge of a $5 trillion tax cut is obviously inaccurate and wrong, because what he says is let's look at all the rates you're lowering, and then he ignores the fact that I say we're also going to limit deductions and credits and exemptions. He ignores that part. Obviously, that was corrected by his deputy campaign manager who said that she stipulated that in fact the $5 trillion number was wrong. (END VIDEO CLIP)

BURNETT: She did use the word stipulate and that deputy campaign manager said that on this show.

(BEGIN VIDEO CLIP)

STEPHANIE CUTTER, DEPUTY CAMPAIGN MANAGER, OBAMA CAMPAIGN: OK, stipulated. It won't be near $5 trillion. But it's also not going to be the sum of $5 trillion and the loopholes that he's going to close.

(END VIDEO CLIP)

BURNETT: All right. The campaign later proved that point in the press release. They did the math, OK? And here's the math that the Obama administration has done. They found a way to make up four trillion of their $5 trillion number, and they conclude, there's a missing $1 trillion. Not $5 trillion, $1 trillion. All right. So they've got the math all laid out here. I'm looking at the e-mail myself. Now if we take those numbers at face value, it still doesn't match their rhetoric on the campaign trail this week. In fact, here's the president and his campaign's press secretary, both today.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The centerpiece of Governor Romney's economic plan is a new $5 trillion tax cut that favors the wealthiest Americans.

BEN LABOLT, OBAMA CAMPAIGN PRESS SECRETARY: The fact is that Mitt Romney's got $5 trillion tax cuts for millionaires and billionaires that he would make seniors and the middle class pay for.

(END VIDEO CLIP)

BURNETT: Well, the voice you just heard there, Ben LaBolt. OUTFRONT tonight, you're going to talk to Ben. He is Obama's campaign press secretary. And Ben, good to talk to you. Appreciate your taking the time. All right, this $5 trillion number --

BEN LABOLT, OBAMA CAMPAIGN PRESS SECRETARY: Thanks for having me --

BURNETT: -- I want to have you on -- obviously, you've gone through the math according -- as your campaign gets it in terms of how you get to five trillion in cuts or nearly so. And also the eliminating the deductions, loopholes, which you say leave a $1 trillion hole. So why focus on the five trillion when by your own math you're saying it's a $1 trillion number?

LABOLT: Well, that's the proposal that Mitt Romney laid out. We can talk about the math specifically. I brought you the different pieces of his tax plan that he listed, but the fact is in a debate on CNN --

BURNETT: I like your version, all scribbled in a Sharpie there, huh?

LABOLT: We don't have the sharp graphics here at the campaign that you guys -- at CNN. But the fact is, in a debate in February, on your network, Mitt Romney said that all Americans are going to get a 20 percent across the board tax cut, including the top one percent. It was like going on an episode of "Oprah's Favorite Things," except instead of getting a car if you were one of the wealthiest Americans, you were going to get that 20 percent across the board tax cut. And even on the program a little bit ago, he wouldn't specify how he's going to pay for it. He won't specify those deductions. So we can't put him on this chart until he specifies how he's going to pay for that plan.

BURNETT: All right. But to be fair, he has made it clear that his tax policy is for a 20 percent cut and elimination of deductions and loopholes. Now you're right, he hasn't said which ones, but it is very clear that his tax proposal includes both.

LABOLT: But listen, he hasn't identified them, so we can't add that to these calculations at this point. It's a $5 trillion tax cut. If you include the AMT, the tax cuts for the wealthiest, go down the list of what he's proposed, and the economists that his campaign have pointed to said that means raising taxes on the middle class. Because it would involve things like cutting the mortgage interest deduction. You know when Mitt Romney was behind closed doors at a high-dollar fund-raiser not too long ago, he talked about some of the cuts and deductions that he might make and he said they'd come from areas like housing and education.

BURNETT: Right.

LABOLT: And that means a tax increase on middle class families. And so he brought a big old etch-a-sketch to the debate. He brought it on Wolf's program tonight. But ultimately, this means a tax increase on the middle class to pay for tax cuts weighted towards the wealthiest.

BURNETT: It's interesting. I have to admit, I was shocked myself, recently talking to one of the CEOs of the largest home builders in the country on the phone, and he told me he actually thinks we could get rid of that mortgage interest deduction and it wouldn't affect housing prices, which is a totally different conversation but a fascinating one. I wanted to ask you though about this study --

LABOLT: It would affect middle class families, sure.

BURNETT: Well it would affect -- it would affect all Americans. But his point was it wouldn't distort housing prices which actually may mean that we would be able to handle that more than we thought. But again I want to get to this issue of the study because you do cite a specific study which it has been favorable to the Romney campaign. It's by Harvey Rosen (ph), a Princeton economist. You cite it in your release when you detail the breakdown in the Romney tax plan. And so we called Professor Rosen (ph) to ask him whether we thought your characterization was fair, in which you say that it adds up to raising middle class taxes. And he said, "the Obama campaign can say I've done the math incorrectly or I don't know what I'm talking about, but the figures in my study do not support their characterization of my work." What is your response to that?

LABOLT: Well, there was a Bloomberg study -- there was a Bloomberg piece written by economists that the Romney campaign directed reporters to that said that this is going to impact people who make between 100,000 and $250,000 a year. Now, the president believes that if you make $250,000 a year or less your taxes shouldn't go up. And Mitt Romney obviously hasn't drawn that same benchmark, because under his plan, if you're an average middle class family with kids, your taxes would go up $2,000 a year. So ultimately, the same economist that the Romney campaign is pointing people towards say you can't do this without eliminating things like the mortgage interest deduction. We know that's going to have an impact on middle class families.

BURNETT: Now, what's interesting, though, in middle class -- I want to get to the bottom of this because in your release, when you talk about the breakdown, you say even studies that Romney has cited to claim his plan adds up still show he would need to raise middle class taxes. You go on to cite two of them, one of them being Harvey Rosen's saying this would require large tax increases on families making between 100,000 to $200,000 a year. now according to the latest report by the Joint Committee on Taxation for the year 2010 tax year, only 14.5 percent of Americans earn between 100 and $200,000 in their IRS filings. So that's a pretty elite group for you to define as the middle class, isn't it?

LABOLT: Well, the president has driven -- has set the bar at $250,000. He believes that if you make $250,000 or less, your taxes shouldn't go up. Look, Mitt Romney has got a different plan. If you're a millionaire, you get a $250,000 tax cut under that plan --

BURNETT: OK before closing of loopholes --

(CROSSTALK)

BURNETT: I feel to be fair one only needs to say that.

LABOLT: The president believes this is a time to make tough choices and to reduce the deficit and we need revenue in order to get that done. And we're going to have to ask millionaires and billionaires to do their fair share in order to get that done. But he refuses to saddle seniors and the middle class with that entire burden and that's something that Mitt Romney is obviously comfortable doing.

BURNETT: But you're defining middle class in this press release -- OK, but you're defining middle class in this press release as people earning between 100 and $200,000 a year.

LABOLT: Well, that's not where we established the baseline. The president has said that if you make $250,000 or less that your taxes shouldn't go up. That's where we've set the bar.

BURNETT: All right. Well, we will leave it there. Thank you very much, Ben LaBolt, appreciate your taking the time. I would like to get that little Sharpie version of your press release.

All right. Well, you may think we're obsessing over a number, this $5 trillion versus $1 trillion. But the reason we're doing it is because we don't think it's just a number. It goes to the heart of whether President Obama stays in the White House. And that is because of what Ben LaBolt was saying. That number is about whether you're for the middle class or not. And the fight over middle class tax cuts is one the Obama campaign knows it cannot lose.

Now I saw this firsthand watching the debate last week with a group of undecided voters in Colorado. When Romney talked about not raising taxes on the middle class, the reaction was overwhelmingly positive. They had these little chart, these little styluses (ph) things, and they shot it off the chart. It earned him one of his highest marks of the night from that focus group. So this fight over the middle class comes at a time when the president is on the defensive and he has lost some ground in key areas. Let's show you the latest polls, CNN ORC poll tonight shows the race in Ohio is up for grabs again. The president's lead is half a point outside the margin of error. Last month he was leading with nine points. Now we told you last night of course about a Pew poll which shows Romney leading Obama nationally by four points among likely voters.

As you can see, just also barely outside the margin of error. In that same poll, the president's 18-point lead among women disappear. He's now running even with Romney. So who is winning this vital war over middle class tax cuts? Reihan Salam joins us, columnist for the conservative magazine "National Review" and John Avlon, senior political columnist at "Newsweek" and "The Daily Beast". So Reihan to me this whole debate over five trillion and what you're trying to do and on the backs of the middle class, this isn't just about a number and who is using a number specifically in what way. It goes to the heart of whether the president is going to win.

REIHAN SALAM, CNN CONTRIBUTOR: Yes, in 2008, Barack Obama did something incredibly brilliant. He actually managed to outflank the Republicans on taxes, which was their biggest, most potent issue for literally decades, by saying, hey you know, if you're middle class, you're going to get a tax cut, and it's only the small number of folks who are going to get anything like a tax increase and that turned out to be a very successful political message. And now Mitt Romney is countering that. One thing that's really fascinating in light of your previous conversation is this. Mitt Romney floated an idea that he would impose a cap on itemized deductions of about $17,000.

BURNETT: Yes.

SALAM: Now, you might recall that when we saw Mitt Romney's own taxes, he took literally millions of dollars, OK? Now, millions of dollars -- let's say a million dollars. That's a lot more than 17,000. That implies that his proposal, if he actually goes with that version of curbing deductions would entail a really, really big tax increase for a guy like Mitt Romney. And I think that it's kind of a funny thing that's been left out of this discussion.

BURNETT: Right. SALAM: He's very serious about curbing those deductions for the ultra wealthy, because again he's talked about revenue neutrality relative to the current --

BURNETT: Right.

SALAM: -- policy baseline.

BURNETT: And John, he said -- he said to Wolf the wealthy in this country should not pay any less than their percent share of the pie than they do now under his plan. So he's being very, very careful to make this point that the wealthy will be the ones who bare the burden.

JOHN AVLON, CNN CONTRIBUTOR: He's being very careful but he hasn't been very clear. And I mean Reihan makes a great point. If you all of a sudden start setting these benchmarks, it adds credibility to his plan. It's about the devil being in the details. This goes to the heart of this show. Does it add up? The problem is, is that to date it has been a relatively policy-free campaign.

BURNETT: Yes.

AVLON: And when you're saying -- when you're trying to refocus it on the middle class, and he's saying it's going to be revenue- neutral --

BURNETT: (INAUDIBLE) over $100,000 a year, mind you.

AVLON: Exactly. No, but all of a sudden it becomes a real question of what deductions are you talking about? It demands that kind of specificity. And it's not a game -- it's not a game of gotcha. The Romney campaign has got -- maybe has a good story to tell if they highlight it as Reihan just said. Look, I'm saying that people like me might even end up paying more and that's a good thing. But, you know, you need to also to view it under the whole rubric. It's not just tax cuts for the middle class. It's deficit reduction. And so when for example he talks about increasing military spending, that comes out of the ledger, as well. We need to have a smarter, more substantive debate across the board with more details.

BURNETT: Right. As opposed to -- I think that's fair -- as opposed to what you're going to do with this line item or that line item (INAUDIBLE).

SALAM: I think that John makes some --

BURNETT: Quickly.

SALAM: -- good and worthwhile points, but here's the thing. In 2008, Barack Obama said I'm going to expand coverage. He did say that he opposed an individual mandate. In the course of legislative horse trading -- but he didn't promise that there would never be an individual mandate. In the course of legislative horse trading you're going to see different things emerge. If you're talking about something as big and important as the tax deductions that lots of folks depend on, that's going to be something --

BURNETT: That's the American tax code --

SALAM: Exactly. You're going to have to do that with Congress and you're going to have to get folks on board. You're going to have to get Democrats as well as Republicans on board.

BURNETT: All right. Thanks to both. We appreciate it. Let us know what you think. We know that a lot of you have very passionate points of view on this particular topic.

Still OUTFRONT the politicization of the Libya ambassador's death, high-ranking Democrat accuses Republicans of just that and tonight some -- well, is it a huge about-face by the State Department? There were no protests outside the consulate in Benghazi?

And first pictures from a controversial oil rig off the coast of Alaska. The first big exploratory drilling plan since the Deepwater Horizon. We'll go to the Arctic.

Plus a black actress tweets her support for Mitt Romney and faced a backlash online. Tonight, Magic Johnson reacts.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Will African-Americans vote for Romney? Probably not. You know it's not going to happen.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT no protests at the Benghazi Consulate. In a major about-face on the attack in Libya, a senior State Department official has confirmed there were no protests outside the U.S. Consulate on the night of September 11th, no protests in general, no protests about the video. Of course, September 11th was the attack in which Ambassador Chris Stevens and three other Americans were killed. Officials say there was no unrest outside the compound walls prior to the attack. That is, of course, a contradiction to the initial version of events that we heard from the U.S. ambassador to the United Nations, Susan Rice.

The new details come on the eve of a congressional hearing on Capitol Hill, which is looking into the so-called security failures, which preceded the attack in Benghazi. But will politics get in the way of the investigation? This has become an incredibly political topic and of course it should not be. Elijah Cummings is the ranking member of the House Committee on Oversight and Government Reform and he is OUTFRONT tonight.

Good to see you, sir. We really appreciate your taking the time. Obviously, there is this hearing tomorrow, but I would be remiss if I didn't start by asking you about what the State Department has confirmed, saying that there were no protests, no protests certainly about a video. They do say that they didn't have any warning in advance of what happened there on September the 11th. But how concerned are you about the fact that the storyline has changed so completely?

REP. ELIJAH CUMMINGS (D), MARYLAND: First of all, Erin, I believe that this is an investigation that deserves a thorough investigation. I mean we need to get to the bottom of every single allegation. And I do not believe that this is an appropriate time for this thing to be politicized. Now, to your question. Keep in mind that Secretary Rice -- and I watched her testimony over and over again on the various networks that particular Sunday. She constantly said -- gave a caveat that this was the information that she had at the moment. And she gave that information and the intelligence community backed her up.

She was just basing it upon what she was told. Then the intelligence community came back a few days later and said -- and gave a different story based upon what they had learned at the moment. And so I think anybody who knows the situation with regard to intelligence gathering knows that they are sometimes very slow to come to conclusions, because they want to get it right. But the fact is, is that there was apparently not the protest, but the fact still -- and that's even more reason why we have to carefully proceed with looking into this matter.

BURNETT: So I'm curious about -- you sent a memo today to Democratic members of your committee and in that there was some criticism of Darrell Issa, the chairman of the committee. Of course he was on this show talking about in his hearing last week. You said that he and his staff have declined to give the full information that they have access to in terms of interviews, in terms of information about the attacks to Democratic members. Could you tell me what information exactly they've been withholding?

CUMMINGS: Well, keep in mind that there's a witness who will be testifying tomorrow who we have not been -- had any access to. His name is Colonel Woods (ph) and so we don't know exactly what he'll be saying. Our rules of the committee and of the Congress says that when there is a person about to testify before the committee, Democrats and Republicans should have access to that person to ask questions. We have not had access to him, although we have been asking for access for the last several days. Another thing that we have not been given is various documents that they have gathered. And we are, again, the rules say we have an opportunity to have those. But we have not had those.

And then finally, there was a trip to the country, to Libya, and we were told about that trip 24 hours before it was to take place (INAUDIBLE) given no information whatsoever about what we would be doing if we got a chance to go. Of course, none of our members given 24 hours notice could make a trip to Libya in that short a period of time. And so -- but let me say this, Erin. You know, those things are petty as far as I'm concerned. The bigger question is what actually happened here. I had a lengthy discussion with Secretary Clinton today and she reiterated that we want to make sure -- and I agree with her -- that we get to the bottom of this. The family of Ambassador Stevens deserve more. The three other public servants who were killed deserve more.

BURNETT: Yes.

CUMMINGS: And we're going to get to the bottom of it, no matter how petty it may get on -- with regard to our colleagues.

BURNETT: You know last week I pressed Chairman Issa on why he was holding the hearings now. And I said is it political, why would you do it before the election? And he made the argument back to me that if we don't get this right and we don't know what happened, this could happen again somewhere else. And that if we were caught flat- footed as the United States of America, that that's unacceptable. And there's no reason to put a hearing off. And it seemed a fair argument. Are you all right with him holding a hearing now? Do you buy that argument? I mean why put it off until after the election?

CUMMINGS: Yes. No, I don't buy that argument. Look at what the Senate has done. First of all they have acted in a bipartisan way. They have not scheduled any hearings. They sent a joint letter of all of the Democrats and all of the Republicans to Secretary Clinton inquiring about this because -- and they realize it's going to take a while to resolve this. Keep in mind, there are two investigations, at least we know of, going on right now. Secretary Clinton has appointed a board, accountability board, five members who are looking into this. The FBI is looking into it.

And, you know, it's one thing to make allegations that are backed by facts. It's another thing to make allegations and then search for the facts. And we've heard a lot of allegations flying around. And Erin, just today in depositions, we've had -- we've heard things that are contradictory to some of the allegations that have already been made by Chairman Issa and Congressman Chaffetz and so I want to see a thorough investigation. The key thing is to make sure that our people are safe and that has to be number one.

BURNETT: Yes. All right. Well, I think we can all agree with that and we'll be talking to you again soon, sir. Obviously, we have the crucial hearings tomorrow.

Well next, for the first time since the Deepwater Horizon disaster, a major exploratory drilling is going on off the coast of Alaska. Our Miguel Marquez is actually on that oil rig 70 miles off the coast in the middle of nowhere with an exclusive report. And the frightening story not going away of new deaths from the meningitis outbreak.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT for the fourth day running, gas prices on the West Coast in California were a record high. The national average is $3.80. In California it's almost $1 higher. One way to bring down costs of course would be more drilling and that is a highly political topic. Today Shell is trying to do that drilling in the Arctic Sea floor for the first time in two decades. They say they could find enough oil there to meet a fifth of our country's energy needs. It's the first major exploratory drilling plan in the United States since the Deepwater Horizon explosion in 2010.

And environmental groups are fighting it hard, saying the unpredictable climate means another oil spill is likely and could be catastrophic and the Arctic Green Peace (ph) says an oil spill like the Deepwater could take two years to stop because of the thick winter ice. That's a terrifying thought. So is this new round of drilling worth the risk and is Shell taking enough precautions to prevent a deep water disaster on steroids? Miguel Marquez is OUTFRONT live aboard one of Shell's oil rigs in the Alaskan Chukchi Sea. And Miguel obviously you can see there the weather already looks pretty grim. Winger is approaching. What is Shell doing?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Winter is approaching. They have about 15 more days to drill out here. They're going to be able to drill until the end of October. Shell, this is where all of the controversy is. Those people out there are drilling down 1,500 feet into the Chukchi Sea, into the sea floor of the Chukchi Sea (ph). That's what Shell has achieved so far this year. They need to drill 8,000 feet down into the water here in order to get into hydrocarbon zone. That's not going to happen this year because they've had some major setbacks. The biggest setback was with the Arctic Challenger, the clean-up barge that Shell wanted to use in order to be on hand here in case of a spill. They had problems with that. They couldn't get it qualified to come up here. And then they had ice flows come in when they did start work here and it slowed everything down. Basically, this has been a $5 billion dress rehearsal, but Shell says next year they'll be able to find this exact hole where these individuals are drilling this year and they'll be able to continue that work and next year they say they're not going (INAUDIBLE) be exploratory wells. They'll be drilling for oil -- Erin.

BURNETT: And Miguel, GreenPeace, obviously, along with other environmental groups, say that this could be terrible. That if there were to be a leak, it could be much, much worse than the deep water because of the ice. Do they have a point?

MARQUEZ: Well, it's because of the ice. It's also because unlike other places where oil companies drill, you don't have the sort of infrastructure. Wainwright, Alaska is 70 miles over there. Point Hope, Alaska, where you guys sent me earlier this summer, about 150 miles south of where we are. There is just -- there's really not a lot around here, so Shell has had to go through the extraordinary length of creating its own model (ph) of clean-up vessels and about 23 vessels right now around where we are 25 miles away from here so that they can keep a safe distance back so that their emissions don't exceed certain limits that Shell has to live by. But Shell has spent a heck of a lot of money to be here to make sure that those disasters don't happen, but you know as environmentalists say and the people who live in this area say all it takes is one.

The other concern is that Shell is the first, and if it continues, there's going to be countries, there's going to be other companies that are going to be rushing up here to exploit the natural resources of the Arctic. And at some point, there will be a disaster, and the ecosystem here is so fragile, it could turn it upside down, Erin. BURNETT: All right. Miguel, thanks very much, reporting live for us tonight from about 70 miles off the coast of Alaska.

Well, new polls show an improving trend for Mitt Romney. But is it enough to win the White House? That really is the only question that matters. And the man who knows everything about it, John King, is next.

Plus, Magic Johnson comes OUTFRONT. We'll talk about his fight with HIV, politics, and paying more taxes on his plane.

(BEGIN VIDEO CLIP)

EARVIN "MAGIC" JOHNSON, NBA HALL OF FAMER: I know he's talking about taxing the wealthy, and he's talking about taxing planes. I own a plane.

BURNETT: That's you.

JOHNSON: I know, I was like, oh, OK. Thanks a lot, President Obama.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about, where we focus on our reporting from the front lines.

First, an outbreak of a rare form of meningitis has now killed 11 and sickened 119 people across the United States. The outbreak has been linked to contaminated steroid injections made by the New England Compounding Center. Drugs manufactured by compound pharmacies are not regulated by the FDA, but actually by state health pharmacy boards.

Today, the president of the Massachusetts Pharmacy Board apologized to patients and their families.

(BEGIN VIDEO CLIP)

JAMES DEVITA, MASSACHUSETTS PHARMACY BOARD PRESIDENT: On behalf of the board, I want to express our deepest sympathy for the patients and their families who have been impacted by this tragedy. NECC voluntarily surrendered its license and recalled all implicated products.

(END VIDEO CLIP)

BURNETT: The risk here could be severe. The CDC estimates as many as 13,000 people could have received the contaminated medicine.

Well, it has been 432 days since the U.S. lost its top credit rating. What are we doing to get it back?

Today, a group of bipartisan senators in a sign of hope met to discuss ways to avoid the fiscal cliff. It's perfect timing, because the International Monetary Fund has warned that going of the fiscal cliff would not only put the United States back into recession, but could damage the entire world.

Now our fourth story OUTFRONT.

Mitt Romney and the now infamous 47 percent comment. Just moments, in an interview with Wolf Blitzer here on CNN, Romney tried to clarify his hidden camera remarks about the 47 percent of Americans who he has said rely on the government for support.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: My whole campaign is about helping the middle class have rising incomes and more jobs, and helping get people out of poverty into the middle class. That's what this whole campaign is about.

The wealthy are doing fine right now. And they'll do fine most likely regardless of who is elected president. It's the middle class that's having a hard time under President Obama. And my campaign is about 100 percent of the American people.

And so, that's -- that describes why, you know, what was stated in the tape was not referring to what kind of president I'd be or who I would be fighting for. It instead was talking about politics and it just didn't come out the way I meant it.

(END VIDEO CLIP)

BURNETT: Walking away from those remarks after a strong debate performance may be helping Mitt Romney. As new polls now show him drawing closer to President Obama in the crucial battleground state of Ohio.

That's, of course, where John King is. He's in Columbus tonight.

John, good to see you.

I guess the big question would be, what are the latest polls saying? How close is it getting?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Erin, it is very close in Ohio. We've seen national polls showing Romney pulling into a tie, some of them even show him a point or two ahead. What matters most is the battleground. So, it's important.

This is our first post-debate big battle ground state and in the biggest of the battlegrounds. Romney can't win without winning Ohio. Look at the horse race numbers. The president up 51 percent to 47 percent among likely voters, but that's within the margin of error. So, essentially, that's a statistical tie. And remember, Romney was down seven, eight, nine points in some pre-debate polls. So, clearly, he's made some progress.

And wow, is there a wild gender split here in the state of Ohio. Look at this. Romney up 56 to 42 percent among men statewide. The president up 60 percent to 38 percent among women statewide.

But, Erin, if you just look at white women, here's where the 47 percent matters. White women, the president is now getting 52 percent of the vote. If he holds that, Romney can't win the state. It is those white women, middle class women, many of them work -- their husbands unemployed. We talked to them especially in the suburbs around this very important city of Columbus, they say they were offended by that remark.

Now, they're happy. They're encouraged to hear that Romney is walking away from it, almost apologizing for it.

BURNETT: Right.

KING: But he's got some explaining to do, because to them, it means he doesn't get their struggle. So progress for Governor Romney. He needs more.

BURNETT: In a word, John, literally, can Romney now win the presidency? Is it within reach?

KING: Yes.

BURNETT: And the answer is yes. There you have it. You give the man a word, and he delivers.

Thanks to John King. The question so many are asking.

Well, this man cried the night President Obama was elected. But does Magic Johnson still feel the same sense of hope and change as he did in 2008? I spoke to him earlier today. And I asked him that very question.

(BEGIN VIDEOTAPE)

JOHNSON: Yes, nothing has changed. I'm still a big supporter of President Obama. I think that he inherited a mess. It took him a long time to really wrap his arms around the mess. And he's doing a good job of trying to brain the economy back, trying to get us jobs.

Could he have done a better job? Of course. Of course. Will he do a better job? I think if he gets four more years, I think he will.

BURNETT: You know, it's interesting, when people look at you, I don't know what they think. They think a lot of things, OK?

(LAUGHTER)

BURNETT: Because you've got -- you bought the Dodgers for a couple billion dollars, theatres, you name it, sports team, TV networks, everything.

But a lot of those things and a lot of the wealth you have accumulated by your own hard work would lead a lot of people to say, look, this guy has got to be a Republican.

JOHNSON: I know, I know.

BURNETT: But you're not.

JOHNSON: But I'm not. I know. He's talking about taxing the wealthy, and he's talking about taxing planes. I own a plane.

BURNETT: That's you.

JOHNSON: I know, I was like, oh, OK. Thanks a lot, President Obama.

But I'm still supporting him.

BURNETT: I don't know if you heard about the Stacey Dash incident yet? Have you heard about this?

JOHNSON: No, no.

BURNETT: So, obviously those of you familiar with her, you are. But obviously she's in the movie "Clueless", and also with "CSI."

JOHNSON: That's right. That's right.

BURNETT: Very successful actress. So, she tweeted out -- I'll read you her tweet.

JOHNSON: OK.

BURNETT: "Vote for Romney, the only choice for your future," and then she put all of the hashtags and she put it on her Twitter page and a photo of herself with the American flag. So, there she is.

JOHNSON: Right.

BURNETT: She got lambasted. Some people feel if you're black, you have to vote for the president, because he's black.

JOHNSON: It's a shame that Stacey is getting attacked like this, you know, because she has a right to vote for Romney if that's her choice.

BURNETT: Yes.

JOHNSON: But at the same time, I know President Obama being the first African-American to get into the White House, it's a big -- it's big for all of us. Things are changing. Will African-Americans vote for Romney? Probably not.

BURNETT: Right.

JOHNSON: You know, it's not going to happen. Very few. He'll probably get 5 percent, 2 percent, something like that.

One thing African-Americans are going to do, they're either going to vote for President Obama or they're going to stay home and vote for nobody. BURNETT: I guess something like what happened with Stacey Dash shows that race still is an issue.

JOHNSON: Oh, yes.

BURNETT: I mean, it still matters. So he got to the White House, which is an incredible achievement, but color still matters.

JOHNSON: Yes. Is race still an issue in this world? Of course it is. It's always going to be.

And then you'll always have the haves and the have-nots, unfortunately. But I'm hoping that President Obama can help the poor rise to that middle class, and we have a bigger middle class.

BURNETT: We all just have to root for more people like you to overcome poverty, HIV, everything that could possibly be thrown at you. And here you are. You've got your own plane and you're willing to pay more tax.

JOHNSON: Don't say that too loud, Erin.

(LAUGHTER)

JOHNSON: Do I have to pay more -- if he wins, I guess I have to. All right, go, President Obama.

(LAUGHTER)

JOHNSON: And thank you, too. Because this is the first time I've seen you smile. You're so serious on your show. And then at the end --

BURNETT: I'm going to take that then as a mantra.

JOHNSON: No, because you're good. You're good at what you do.

BURNETT: Thank you.

JOHNSON: You're powerful. Can you believe it, America? I'm on Erin's show. This is great!

BURNETT: Thank you. Good to see you.

JOHNSON: You too.

BURNETT: And I'm thinking how cool, I've got Magic Johnson on the show.

And we have more to come from Magic Johnson, something very serious. The story of the moment that he told his wife that he was HIV positive.

And an OUTFRONT special investigation. The military says it can save $3 billion just by letting go of a massive fleet -- we're going to show them to you, it's unbelievable -- of tanks sitting in the desert. So, why isn't it happening?

(COMMERCIAL BREAK)

BURNETT: Our fifth story OUTFRONT: The tank nobody seems to want. Taxpayers are on the hook to refurbish a Cold War era M1 Abrams tank that even the Defense Department admits it doesn't need. It's all part of the fight over defense spending cuts that we've been talking about on this show rather obsessively for the past year.

The $1.2 trillion in so-called sequestration cuts take effect on January 2nd. And about half that sum is going to come from defense, making it a major election year issue.

(BEGIN VIDEO CLIP, CROSSROADS GPS)

AD NARRATOR: They're looming across Virginia, cuts to national defense that threaten nearly 1 million small business jobs. And Tim Kaine supported the Washington budget deal that got us here. A deal that could destroy over 500,000 jobs in the defense industry.

(END VIDEO CLIP)

BURNETT: So if defense spending is such a big issue this year, why are we on the hook for those tanks?

Drew Griffin from our Special Investigations Unit is OUTFRONT with the story.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT (voice-over): It's a remarkable sight parked in the California desert, more than 2,000 of them, row upon row of M1 Abrams tanks, built by General Dynamics beginning in the 1980s. Most of them are still ready to roll.

So when the U.S. Army's budget folks sat down to make some tough decisions about what to cut, they saw a great opportunity. Postpone what they said would be a $3 billion expense, the refurbishing of hundreds of these tanks at this General Dynamics plant in Lima, Ohio.

U.S. Army's chief of staff marched up to Capitol Hill with a great idea.

GENERAL RAYMOND T. ODIERNO, CHIEF OF STAFF, U.S. ARMY: In Lima, it would cost us $2.8 billion just to keep that open. And we -- our tank fleet is in good shape. We don't need to -- because of the great support we've gotten over the last few years --

GRIFFIN: And he had support.

Travis Sharp, who studies defense spending at Center for a New American Security says the proposed cuts of tanks were a no-brainer.

TRAVIS SHARP, CENTER FOR A NEW AMERICAN SECURITY: When you relatively conservative institution like the U.S. military, which does not like to take risks, because risks get people killed, says that it has enough tanks -- I think, generally, civilians should be inclined to believe them.

GRIFFIN: But while the defense bill isn't finished yet, you, the taxpayer, are still likely to be on the hook -- for fixing up tanks the Army doesn't want.

(on camera): So who decided the general was wrong, that he actually does need more tanks? I'll give you one word: Congress.

SHARP: I think that there are better things that they could be doing with that $3 billion. But the fact that the military is having such a hard time getting this relatively small amount of money to be saved, I think is an indication of the huge uphill fight that the military faces when it comes to Congress. Congress is going to fight tooth and nail to protect defense investments that benefit their constituents and the people that live in their states.

GRIFFIN (voice-over): Congressman Buck McKeon is chairman of the House Armed Services Committee.

(on camera): Why refurbish tanks the Army doesn't want?

REP. BUCK MCKEON (R-CA), CHAIRMAN OF THE ARMED SERVICES COMMITTEE: You know, the Army has a job to do and we have a job to do. And they have tough choices because they have been having their budget cut, you know, with the first cuts, the half a trillion dollars and now sequestration on top of that.

But we have to look long range. If somebody could guarantee us that we'll never need tanks in the future, that would be good. I don't see that guarantee.

GRIFFIN (voice-over): McKeon is a Republican. But in this divided Congress, Democrats and Republicans agree on one thing -- 173 congressmen signed this letter calling for the tanks to keep rolling off the refurbishing line.

REP. SILVESTER REYES (D), TEXAS: Listen, we don't want to play Russian roulette with the national security of this country.

GRIFFIN: Why such bipartisan harmony on what should be an easy spending cut? Is it national security or is it congressional job security? Like almost everything up here on Capitol Hill, what's on the surface may not be the whole story.

AARON MEHTA, THE CENTER FOR PUBLIC INTEGRITY: We're saying there's buying votes. We're saying that it's true in pretty much every aspect of politics, especially in the defense industry. It's almost impossible to separate out the money that is going into elections and the special interests, and what we found was the direct spike in the giving around certain important dates that were tied to these votes.

GRIFFIN: It turns out when the army asked Congress to cut the tanks, the company that has the tank refurbishing contract, General Dynamics, began to spend some cash. Erin Mehta and the Center for Public Integrity began tracking the money, the votes and the lobbyists hired by General Dynamics to try to keep rebuilding the tanks the Army doesn't want.

What they found, campaign contributions given at key times. Congress did cut much of the tank refurbishing but not all, leaving $181 million in the budget for next year.

A spokesman for General Dynamics said there's nothing surprising about the dates the firm gave its money. It's when Congress was in town and fund-raisers were being held.

"Our money is bipartisan," said General Dynamics' Kendell Pease.

Congressman McKeon says he didn't even know General Dynamics had given him $56,000 since becoming chairman of the House Armed Services Committee.

(on camera): Since you've been chairman, people associated with General Dynamics have sent $56,000 into your campaign.

MCKEON: I'm taking your word for that. I don't go to my reports and see that.

GRIFFIN: Well, I'm telling you.

MCKEON: OK.

GRIFFIN: Isn't this corporate welfare year after year after year for General Dynamics?

MCKEON: This isn't about General Dynamics. It's about keeping a work force to provide for the defense of our nation.

GRIFFIN (voice-over): Congressman Reyes, who has received $64,000 from General Dynamics since 2001, says he, too, is worried about the work force.

And we contacted General Dynamics about all of this. The company told us the same thing. It's about the ability in the future to make new tanks when the Army is ready. General Dynamics argues it's cheaper to keep this plant going now than to shut it down entirely and then have to pay for it to come back up in the future. It wants to protect the industrial base -- a theme echoed by McKeon and Reyes, which brings us to one final thought.

The Army does want to upgrade the M1 tank beginning in 2017. Who do you think will get that contract? I asked Buck McKeon.

MCKEON: General Dynamics will probably get the contract for it anyway, because they're kind of the ones that are out there leading the way on this.

GRIFFIN: For General Dynamics, the future in tanks looks pretty good.

Drew Griffin, CNN, Herlong, California.

(END VIDEOTAPE)

BURNETT: It's been an amazing shot there across that desert.

OUTFRONT next, Magic Johnson opens up about his fight with HIV and the moment he told his wife.

(COMMERCIAL BREAK)

BURNETT: Earvin "Magic" Johnson had his career cut short when he was diagnosed with HIV 22 years ago. And at that time, you know, it was a death sentence. And people didn't go public with the virus. The impact of that announcement is huge, and since then, Magic has found a new life since a successful entrepreneur and an advocate.

And his latest project combines both of those things. He's partnered with Orasure (ph) and now is a company spokesperson to find a way for people to confirm whether they have HIV. It's an oral swab you take in your house, costs $40 and find out if you have HIV in 20 minutes. Magic told me about it.

(BEGIN VIDEO CLIP)

JOHNSON: You know, a lot of people don't want to go to the doctor and so, it's really important that OK, if you want to stay home in the privacy of your home, find out your results if you have HIV or not, you can do that now.

And I would say, you know, if you want to have a support system, do it with a friend. You know, you can support each other. So I think that it's important. It's out right now and the thing that makes this great, it's already been used by doctors already. So it's nothing like it just came out.

BURNETT: Right.

JOHNSON: It's being used already before by doctors.

BURNETT: What do you remember about the day when you found out?

JOHNSON: Wow. I think the day I remember and the thing I remember most is that when I had to drive home to tell my wife. I think finding out myself was devastating, but it was more devastating to go tell my wife and then not knowing if she was infected, and the baby. She was pregnant with our son, E.J., at that time, if he was infected as well.

So I could only breathe and feel better when she took the test and they ran the test on the baby, and both of them were not positive.

BURNETT: I remember that time and hearing that. At the time, that was breaking news. I mean, frankly, it was still a death sentence in public perception.

Did you feel that way at that time, that I'm going to die? JOHNSON: I didn't -- I didn't know what was going to happen. I was hoping that I wouldn't die, but everybody told me that, you know, around me, because we were not educated enough about it enough to know if I was going to be here or not.

(END VIDEOTAPE)

BURNETT: And, wow, he has changed the face of that disease.

Thanks as always for watching. "A.C. 360" starts now.