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ERIN BURNETT OUTFRONT

Passing the Buck on Libya; Excuse the Interruption; Secret Service Agent Busted in Miami

Aired October 12, 2012 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, the evolving story of who knew what and when about the deadly terrorist attack in Libya. A day after we heard testimony that the State Department denied requests for additional security, we heard this from the vice president.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT: Well, we weren't told they wanted more security. We did not know they wanted more security again.

(END VIDEO CLIP)

BURNETT: Doesn't add up. Plus, new problems for the Secret Service after an agent is found passed out, allegedly drunk, just hours after the president left a campaign rally. And the iPad may be getting smaller, but will its price tag be small enough?

Let's go OUTFRONT.

Good evening, everyone, I'm Erin Burnett. OUTFRONT, tonight, under the bus. Did the vice president throw the State Department under a campaign bus last night when he was asked about requests from American diplomats for additional security in Libya? Here's what he said.

(BEGIN VIDEO CLIP)

MARTHA RADDATZ, MODERATOR: They wanted more security there.

BIDEN: Well, we weren't told wanted more security. We did not know they wanted more security again. And by the way, at the time, we were told exactly we said exactly what the intelligence community told us that they knew. That was the assessment.

(END VIDEO CLIP)

BURNETT: That was also where Joe Biden got the most negative ratings of the entire debate among the undecided voters I was with last night.

Now why was this comment so controversial? Well, because those voters were still wondering why the request for more security in Libya was turned down. Senior -- a security officer in Libya Eric Nordstrom was actually questioned about this very issue on Capitol Hill this week.

(BEGIN VIDEO CLIP)

REP. JASON CHAFFETZ (R), UTAH: You were asking for more a assets, more resources, more personnel. That was denied, but the State Department went back and reclassified it as more dangerous, the danger pay therefore increased. They didn't tell you that we didn't have resources, hey, the Congress just cut your budget. They gave you an increase because the danger was rising, correct?

ERIC NORDSTROM, STATE REGIONAL SECURITY OFFICER: That's correct. We received a danger pay increase.

CHAFFETZ: Thank you.

(END VIDEO CLIP)

BURNETT: So when Joe Biden said we knew nothing about this request for security, who is the we?

Well, Jay Carney, the White House spokesman in a White House briefing, today cleared that up.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: He was speaking directly for himself and for the president. He meant the White House.

(END VIDEO CLIP)

BURNETT: So if the president and the vice president, the White House, didn't know about the security request, then who is to blame for the security lapse in Libya on September 11th? Jay Carney again.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: I just want to be clear. It was never in the presidential daily brief or anything like that?

CARNEY: I'm not going to sit and talk to you about this --

UNIDENTIFIED REPORTER: The detail.

CARNEY: No, I'm not. I'm saying that matters of how many personnel are assigned to embassies and consulates and other diplomatic facilities are not decided at the White House.

UNIDENTIFIED REPORTER: OK.

CARNEY: They're decided at the State Department.

UNIDENTIFIED REPORTER: OK.

(END VIDEO CLIP)

BURNETT: They are decided at the State Department. Is it possible that the president and vice president did not know about the request for more security prior to the attack in Benghazi? The answer to that question is yes. But passing the buck may not add up. For two reasons. First, in a press release on September 10th, the White House said, and I'll quote them, "The president heard from key national security principles on our preparedness and our security posture on the eve of the 11th anniversary of September 11th, to protect the American people both at home and abroad."

Now maybe consulates don't make the cut for this kind of briefing, but maybe if they're in a Middle Eastern country in chaos where security officers have detailed 230 separate security incidents in the past 15 months, they should.

The second reason, though, is this. See that? That was Harry Truman's desk. His desk. The buck stops here. It was a sign that sat on his desk at the Oval Office.

The State Department in in the same administration, with the same boss as the White House, so where does the buck stop?

P.J. Crowley is a former State Department spokesman and Peter Brookes is a former deputy assistant secretary of defense.

Gentlemen, really appreciate both of your taking the time.

P.J., I wanted to start with you on this whole issue of Joe Biden saying we and then Jay Carney specifying that that meant himself and the president. And saying that it was the State Department that would have made that call.

What do you think about the vice president separating himself from the State Department and the fourth person in line to the presidency?

P.J. CROWLEY, FORMER STATE DEPARTMENT SPOKESMAN: Well, I think Jay Carney also said that ultimately the responsibility for everything that happened in government, you know, starts with the commander in chief and works its way down. So Barack Obama's responsible, Joe Biden's responsible, Hillary Clinton's responsible and so forth.

As to the decision itself, you know, the vice president was stating a fact. That normal routine matters in terms of how you balance the level of security at 100-plus diplomatic posts around the world, those decisions are made day-to-day, week-to-week at the State Department. So I don't see a contradiction between, you know, what you've said and what the vice president said.

BURNETT: You didn't -- you didn't think it at all strange last night when asked that he basically said, well, I didn't know anything about it?

CROWLEY: I understood completely that this would not be a operational detail that would necessarily come to the White House or to the National Security Council unless there was a very significant policy issue or policy dispute.

BURNETT: But, Peter, with the -- first ambassador killed in 33 years in his line of duty in this country. Where does the buck stop?

PETER BROOKES, SENIOR FELLOW, NATIONAL SECURITY AFFAIRS: It should stop in the Oval Office. I mean I agree with P.J. in the sense that they may not have been briefed with it, but it sure would have been nice if the vice president had said last night, I understand that this may have been -- this decision may have been made at a lower level, but I'm the vice president of the United States and I take responsibility for what happened in Libya.

That would have been the right thing to do.

BURNETT: And P.J., is the White House backed in a corner here? I mean, I'm just curious, because if they keep saying the State Department's responsible, and to your point, the State Department is responsible for these choices, but if you keep saying that and it keeps turning out that they -- maybe they made the wrong decision, then don't they need to hold someone accountable for that mistake? That somebody needs to go.

CROWLEY: Well, Erin, in fairness, you know, this is something that we are still investigating even after we say that this was a terrorist attack and by a group that was organized and obviously had planned -- been planning this for some time. We still don't know, for example, whether this was group in Libya that acted on its on accord or acting with support from the outside.

I think that the contemporaneous that people don't understand that we have suffered the deaths of four diplomats in Libya relatively contemporaneously to the fact that we have suffered 2,000 casualties in Afghanistan. Should approve that we -- there was a link to the consulate bombing in Libya and, obviously, we've seen and understand the link between the Taliban and al Qaeda core in Afghanistan. This is part of the same struggle.

Now at some point in time once this is fully investigated by the FBI and within the State Department, you know, should judgments had proven to be, you know, misguided, for example, I think we can say that the security was inadequate based on the threat that we ultimately saw emerge on September 11th, then there may well be accountability in terms of decisions made within the State Department that put our diplomats at increased risk. But it's not there yet.

BURNETT: Peter, it seemed to me, though, you know, we're talking to undecided voters, they seem pretty shocked by this. They say that -- this was actually in Virginia where a lot of people have friends or themselves have served in tough places including places like in the Middle East. They say how is it possible that on September 11th in a country like Libya, the ambassador, you know, went to a consulate, but didn't have security? When there have been -- how the heck did this happen?

BROOKES: Yes, I tell you what, I don't understand how it happened either. It needs to be investigated, but the administration's slow rolling this. We're almost five weeks since this happened and there are more questions than there are answers. It's my sense, Erin, that the last thing this administration wanted to say in the aftermath of this terrible tragedy in Benghazi, that American sovereign territory in the form of a consulate in Libya had been attacked by an al Qaeda affiliated group on the 11th anniversary of 9/11. That's the bottom line here and I think they're going to do everything they can including throwing the State Department under the bus, the intelligence committee -- committee under the bus to prevent that from being said.

And the only time they're coming forward with these things is when it -- when Congress investigates it. The only time they really started calling it a terrorist attack was after the director of the National Counterterrorism Center was questioned at a Senate hearing and he called it a terrorist attack. I think it was Joe Lieberman of Connecticut who asked him. And then the night before the big hearing in this -- in the House, the State Department comes out and says oh, by the way, five -- almost five weeks later, we realize that it wasn't a -- at a demonstration, but it was just an attack.

BURNETT: And I want to just -- speaking of the politics of this, Mitt Romney brought up the issue on the campaign trail about what Joe Biden said last night. Here he is.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: Because the vice president directly contradicted the sworn testimony of State Department officials. He's doubling down on denial. And we need to understand exactly what happened. As opposed to just having people brush this aside.

(END VIDEO CLIP)

BURNETT: P.J., the secretary of state, the first time since October 3rd, came out and spoke today. Why the silence?

CROWLEY: Look, I'm trying to -- I'm struggling with what Peter just said here. These things are being investigated and the fact that you have the head of the National Counterterrorism Center come forward within five days of the attack and clarify that this was in the judgment of the administration and intelligence professionals an (INAUDIBLE) attack, I mean that is being as forthcoming as you can be based on your understanding of the facts at the time.

I mean we're now only 30 days after the attack. I can remember back to the previous administration, it took them more than a year before the analysis was completed that said, you know, our intelligence judgment regarding weapons of mass destruction in Iraq turned out to be wrong.

So I think you've got to give this process a little bit of time, you know, to emerge to where you have a full understanding of what happened, who is responsible, why they did it and then we can let the chips fall where they may.

BURNETT: All right, well thank you very much, both of you. We appreciate it.

And our focus on that issue will continue as well.

Still OUTFRONT, Biden the interruptor? Well, so during last night's debate, you probably noticed the vice president, you know, he's a very -- he certainly does look like he's had Botox. All right? He made faces, he laughed, he interrupted, he was very, very visibly (INAUDIBLE). So did the tactic work?

Plus, Paul Ryan claims Mitt Romney's tax plan adds up. And even says it's been done before. JFK anybody? An OUTFRONT fact check coming up.

And a teenage girl bullied relentlessly, posted a desperate cry for help on the Internet. Just a month later, she's dead.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT, excuse the interruption. Republicans -- I mean it started last night. They were up in arms over what they say was a rude Vice President Joe Biden at last night's debate.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), VICE PRESIDENTIAL CANDIDATE: It's a plan I put together with a prominent Democrat senator from Oregon --

BIDEN: There's not one Democrat who endorses --

RYAN: It's a plan --

BIDEN: Not one Democrat who sponsored the plan.

RYAN: Our partner is a Democrat from Oregon.

BIDEN: And he said he does no longer support it.

RYAN: We put it -- that's how it's going all around America. Look --

BIDEN: You don't read this --

RYAN: Look --

BIDEN: That's not how it's going. It's going down.

RADDATZ: Just two-minute answers.

(LAUGHTER)

RYAN: It is mathematically possible. It's been done before. It's what we're proposing.

BIDEN: It has never been done before.

RYAN: It's been done a couple of times before.

BIDEN: It has never --

RYAN: Jack Kennedy lowered tax rates to increase growth. Ronald Reagan --

BIDEN: Oh, now, you're Jack Kennedy. Nobody is --

RYAN: Mr. Vice president -- I know --

BIDEN: No, this amount --

(CROSSTALK)

RYAN: I know you're under a lot of duress to make up for the lost ground.

(LAUGHTER)

RYAN: But I think people will be better served if we don't keep interrupting each other.

(END VIDEO CLIP)

BURNETT: The RNC says the score was 82 interruptions from Biden and just a handful from Ryan.

Reihan Salam joins me now along with Maria Cardona.

OK, good to see both of you. I like the way that you played together.

You too, Erin.

BURNETT: I think it sort of captured a part of it.

Maria, Republicans were pouncing on this. They said it was -- that it showed that Joe Biden was unhinged, unsteady. I will tell you that in our focus group, it also did not go over very well. But Democrats seemed to be pretty happy about the Joe Biden they saw.

CARDONA: Yes. Yes. That's exactly right, Erin. And you know clearly judging, coming out of last week, Democrats, let's just say it, were completely demoralized from the first presidential debate. So I think what Joe Biden was doing was really channeling the extra frustration that Democrats felt every time that President Obama did not take advantage of all of the wonderful opportunities and Joe Biden was making sure that he was going to take advantage and probably overly take advantage of every single opportunity that came his way.

And I got to say, it was exactly -- judging from the reaction, it was exactly what the doctor for the Democratic base ordered and he delivered.

BURNETT: And they wanted a guy to go into a bar fight, and --

CARDONA: Yes.

BURNETT: As Reihan said, Joe Biden is not afraid of any kind of a bar fight. All right, Reihan, it was not just the interruptions that people -- that the GOP didn't like, but also frankly, that the focus group responded to. Many took issue with Biden's very expressive face. Let me show you.

(BEGIN VIDEO CLIP)

RYAN: It makes us more week. It projects weakness and when we look weak, our adversaries are much more willing to test us. They say the military option is on the table but it's not being viewed as credible. Was it a good idea to borrow all this money from countries like China? Try to scare people from voting for you. Different than this administration, we actually want to have big bipartisan agreements.

(CROSSTALK)

RYAN: We had these sanctions in place. It's in spite of their opposition.

BIDEN: Oh god.

RYAN: They've given --

(END VIDEO CLIP)

BURNETT: He has a beautiful smile.

(LAUGHTER)

REIHAN SALAM, CNN CONTRIBUTOR: Certainly true. Erin, I think that this debate was the gift that keeps on giving to both Democrats and Republicans. Maria made a lot of great points. There are a lot of folks who said we want a feistier Obama. But they said Obama is boxed in. It's got to be a town hall and he doesn't want to seem obnoxious. Whereas this was a debate watched by fewer people, frankly, than the presidential debates.

BURNETT: Yes. Fair.

SALAM: It's something where Biden was able to be feisty without damaging the Obama brand as someone with a cool temperament and Republicans were able to say this guy, during a time that the national mood is very somber and serious, looks like he's having an absolutely spectacular time while the foreign policy is in a tailspin of this administration.

BURNETT: Yes.

SALAM: And there are a lot of other problems going on. So, again, for Republicans, it seems hey, this guy is having the ride of his life, but is he having it at our expense? That's why I think that it works for both Democrats and Republicans. BURNETT: Maria, I'm curious, some also made references to another infamous debate. You know, the last time we were counting things that happened in a debate, I believe, was Al Gore and the -- OK.

CARDONA: Right.

BURNETT: Obviously, the former Bush White House press secretary Ari Fleischer, he tweeted last night, "Biden is at risk of having his laugh come across like Gore's sighs. He should knock it off." Do you think that Ari has a point?

CARDONA: I don't and clearly that is what Republicans are wanting to spin and will continue to spin it that way, and while -- while during it, while I was watching it, I could have done a little bit with less of the smirks and the laughs, but again judging from the reaction of the Democratic base, it is exactly what Democrats needed. And I know that Republicans will continue pouncing on it, and if all they can pounce is his demeanor and his laughs as opposed to the substance, I think that Democrats are in a pretty good place.

But here's how I will describe it, Erin. I think that last night's debate was the political equivalent of the Rorschach inkblot test where both Democrats and Republicans not only saw what they wanted to see, but they saw what they needed to see.

BURNETT: And both sides are a winner.

Reihan, I know she talks about this motivating debates. OK, that's good. And obviously after last week and Maria's point about the base being demoralized, they needed it but what about what you need to win, which is also some of those people who are undecided? I mean it seems to me, as evidenced by the swing we saw after the presidential debate, that a lot of people who said they knew who they were voting for really didn't because the swing was pretty incredible.

SALAM: Yes, it's an interesting question about how soft some of the support for both candidates is right now. And I think that when you're looking at Biden's performance, I think part of the issue is that Martha Raddatz is a foreign policy correspondent who asked a ton of foreign policy heavy questions that got very, very granular. There are lots of issues like housing that impact a ton of people that really weren't touched on at all.

BURNETT: Yes.

SALAM: Yet we touched on a lot about Libya and Syria and other things that a lot of folks at home weren't necessarily following, so on that substance point, I actually do think the affect of the two guys counts for a lot and I think a lot of people saw maybe they would have seen Paul Ryan as an earnest guy, who's trying to engage with Joe Biden, and who is, you know, holding his own more or less, was a bit shaky sometimes, but kept getting interrupted and shut down.

And so I think it's not just Republicans who might see it that way, but there might be some other folks, Midwestern folks, who like Paul Ryan's all-shocks temperament who might see it the same way, too. And those impressions actually count for a lot.

BURNETT: All right, well, thanks very much to both of you. We appreciate your time.

And OUTFRONT next, new trouble in the Secret Service. An agent arrested just hours after the president left a campaign stop. And then Apple. Is Apple afraid? Very afraid.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, the Secret Service has another embarrassment on its hands tonight. Overnight, one of his agents was found by police passed out on the sidewalk in Miami and after an altercation he was arrested. All of this happened just hours after President Obama left town.

Our Dan Lothian is OUTFRONT tonight.

And, Dan, what can you tell us about the agent and what he was doing?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, first of all, his name Aaron Francis Engler. A law enforcement source telling me that in fact he is a member of the Uniformed Division. So this is one of the Secret Service agents that you typically think of in a suit and a tie with that earpiece, but rather the uniformed police officer.

They work perimeter protection for these events. As you pointed out, the president was in Miami for a big rally at the University of Miami. They'll often scan people as they're going into the events, but as you point out, he was found by a police officer on a street corner in Miami. He was arrested for disorderly intoxication, for resisting arrest without violence and according to an affidavit which we obtained, the arresting officer said, quote, "I observed the defendant with bloodshot eyes, slurred speech and a strong odor of alcoholic beverage emitting from his breath."

The officer in that affidavit went on to describe how he tried to get him up on his feet. He couldn't get up. He kept placing his arms around the officer. The officer asked him to stop doing that. And at some point, according to the affidavit, the arresting officer says that he hit my face. He was eventually able to put him in handcuffs.

The U.S. Secret Service says that an interview review is currently underway, but as you pointed out this is getting a lot of attention because of that big scandal that happened back in April. A lot of questions about the culture inside the U.S. Secret Service.

BURNETT: Yes, a blow they certainly don't want to take tonight with this story.

Dan, thank you.

And still OUTFRONT, Paul Ryan compared his campaign's plan to cut taxes to John F. Kennedy. JFK. Does the comparison add up? Plus, she was bullied for months and she cried out for help in a video that she posted on the Web and tonight we learn she couldn't take it anymore.

(COMMERCIAL BREAK)

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

And we begin tonight with the space shuttle Endeavour. It's on the move, on its way to the California Science Center. This is a live picture. As you can see, it's not moving very fast. The tract started from the Los Angeles International Airport. It's only a 12- mile trip, but it's going to take two days to get there. I mean, look at how enormous that thing is.

It's pace is about two miles an hour, which is pretty pathetic for a space shuttle. There are some stop. But even more important, officials had to take down street lights and cut down trees. They had to cut down trees, apparently, a lot of them, to make the move possible.

Well, the Centers for Disease Control reports there are now 184 cases of fungal meningitis link to injections of a contaminated steroid. That's up from only 170 confirmed cases yesterday. The CDC also added Texas to the list of states impacted by the outbreak, 14 have died. Authorities now say as many as 14,000 people could have received contaminated steroid injections.

U.N. Security Council has passed a resolution which gives Mali and other West African countries 45 days to come up with a detailed plan to put troops on the ground of northern Mali to oust Islamic extremists linked to al Qaeda. Once the plan is submitted, the council will still have to pass another to actually get the troops in. This can't happen quickly.

The council warned the Malian rebel groups to cut off ties to terrorist organizations, particularly al Qaeda or else they'll face sanctions. An influx of extremists following the military coup in Mali in March has driven half a million Malians from their homes. The extremists are armed in large part by weapons from Libya.

We noticed a couple of pieces, though, of good news today on the U.S. economy. The preliminary read on consumer sentiment was a big jump and this is worth mentioning. Hitting a level we haven't seen since September of 2007, before the financial crisis.

And also, JPMorgan. The biggest bank released its quarterly results that beat expectations, but it was this comment from CEO Jaime Dimon that caught out attention. He said, "We believe the housing market has turned the corner."

Now, bank CEOs have said this several times over the past few years and been wrong. But I haven't heard it from Jamie Dimon before. And the comments from Mr. Dimon could be significant. Housing obviously could drive our whole recovery. It's been 435 days since this country lost its top credit rating. What are we doing to get it back?

Well, unfortunately, four of the fiscal year, U.S. deficit totaled $1.1 trillion, the fourth year running it exceed the trillion dollar mark.

And now, our fourth story OUTFRONT: Jack Kennedy and Paul Ryan, perfect together? Maybe there are some things that are similar, right? They're both young, energetic, vibrant.

Paul Ryan seems to think they have something this common, Joe Biden though, not so sure. In what you could say is now a V.P. debate tradition, the Republican candidate invoked the Camelot era comparison. This time, the issue was taxes.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), VICE PRESIDENTIAL NOMINEE: You can cut tax rates by 20 percent and still preserve these important preferences for middle class taxpayers --

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Not mathematically possible.

RYAN: It is mathematically possible. It's been done before. It's what proposing.

BIDEN: It has never been done before.

RYAN: It's been done a couple of times.

BIDEN: It has never been done before.

RYAN: Jack Kennedy lowered tax rates and increased growth. Ronald Reagan --

BIDEN: Oh, now, you're Jack Kennedy.

RYAN: -- Ronald Reagan --

(END VIDEO CLIP)

BURNETT: Twitter was all a Twitter about that. That Jack Kennedy line generated 58, 275 tweets a minute. That's kind of crazy.

There's a noticeable reaction from the group of Virginia undecided voters that I watched during the debate. You can see it blown up there at the bottom of the screen.

But here's the problem. Both Kennedy and Reagan were working in a different time and place. So to start with, when both Kennedy and Reagan took office, individual tax rates were not even in the ballpark of what we're dealing with now. In fact, they even make France look like a low tax regime. Kennedy's plan, which was inactive after his death, took the top marginal tax rate from 91 percent to 70 percent over a two-year period. Now, hey, there were lots of loopholes, I mean, let's just be real. But the growth argument, GDP rose by barely a percent during that time, which isn't much when the economy was growing at a rate like China's, which the U.S. was at the time.

As for Ronald Reagan, his first big tax cut went into effect in 1981 and reduced the top rate from 70 percent to 50 percent, and he did that over three years. Over the first two years of the tax cut, the economy did surge. Economic growth went from 4.9 percent to north of 8 percent. That's impressive. Year three though, not so impressive. If you look at the quarters some drop.

For perspective, today, the top marginal tax rate is 35 percent. It's not like you're at 70 or 90, where you think a cut could make a big difference. But can it? Can a reduction in rates really spur the Romney-Ryan growth?

Let's bring in our guests to find out whether it's true.

Doug Holtz-Eakin is president of American Action Forum, and Mark Zandi is chief economist at Moody's Analytics.

All right. Great to see both of you.

Doug, the Romney-Ryan plan would reduce rates across the board by 20 percent. Let's forget the loophole part of it for a moment. That's what they're going to do. So, you would see the top rate go down from 35 percent to 28 percent.

DOUG HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: Right.

BURNETT: That's not really -- that's certainly not a drop like JFK did or Ronald Reagan did. Can 35 to 28 really spark real GDP growth?

HOLTZ-EAKIN: Well, I would agree with you that we are in a very different world, and a better world, quite frankly, with lower marginal tax rates. The feature that they have in common that I think is often not appreciated is that these are permanent tax reforms. Permanent changes have a much bigger impact than do temporary and targeted changes.

It makes sense. You get a tax cut per day, you wouldn't much. The tax cut (INAUDIBLE) change a lot of things.

So, the research also forced that notion. So, an important part about this, it's a tax reform, a permanent change that illuminates uncertainties about the taxes.

The second piece that's very important is, it reduces complexity. And that complexity causes people to: (a), waste money with tax planning, tax lawyers. It leads you to waste business decisions on the base of taxes, not business fundamentals. It erodes the faith in the tax system. I think the combination of the permanence and getting businesses to focus the bottom line instead of their own tax liability are very big emphasis for growth.

BURNETT: All right. I understand your point and it's about more than just cutting the marginal rates and I think that's a fair point.

But, Mark Zandi, let me ask you, is it fair for Paul Ryan to compare what he's proposing to what Ronald Reagan and JFK?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: For the reasons you gave. I mean, the top marginal rates were a lot higher under Kennedy, close to 90 percent and 70 percent under Reagan. So, the cut in the marginal rate was a lot bigger.

And we were in a different fiscal world. I mean, back in the early '60s, we were running budget surpluses. Even in the early '80s, when we had a very tough economy, the budget deficit was a lot smaller than it is today.

So, that's the key reason I'd be concerned about the Romney plan. I think tax reform is a good idea. Doug is right. That's the way to go. We need to have tax reform, but we need tax reform that raises enough revenue to lower tax rates.

And also it goes to reducing future budget deficit because if we don't get the deficits down, lower tax rates aren't going help us. It's not going to get the economy going.

BURNETT: And, Doug, do you think it's fair to say? I mean, Romney-Ryan have been saying they think a 3 percent growth is reasonable. I know, obviously, you're sympathetic to their plan. But do you think it is? Because for any of this math to work out and this whole argument that everybody's having about whether they can cut taxes and close enough loopholes to make up for the difference, they are counting on economic growth on being part of making up that difference. Will it?

HOLTZ-EAKIN: You can't say for sure because good tax policy does matter and it can improve economy growth. But it's not the only thing going on out there and you would have to have a disciplined economic policy.

I would concur with Mark. We have a serious threat to the economy from existing and a projected debt. It is different from the era of Reagan in that debt is not being driven by annual decisions made by Congress, which are easy to change. It is driven by the large entitlement spending programs.

And so, if you want to have a successful road package, you can't just do it with taxes. You have to pair it with entitlement reform.

BURNETT: OK, let me --

HOLTZ-EAKIN: But honestly, Erin, just one more thing. Little changes matter here, if people don't appreciate it. First 200 years of U.S. existence, it grew faster than the United Kingdom by .3 or .4 of a percentage point in per capita income. That's it. We all grew faster each year.

And in that time, we went from 13 colonies to the largest, most powerful economy on the planet and the United Kingdom went from the largest power to something much smaller, so focusing on growth is really important and you don't have to have big changes as long as they last.

BURNETT: All right. Let me play something here because it does all come down to the middle class, when it comes to taxes and both sides have been trying to make that argument, right? Whose tax plan is going to help the middle class or kill the middle class? Here's the argument.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: There's been a study done recently that shows with all the spending he's planning and with all the interest on the debt that's associated with all that spending, that he's going to have to raise taxes on middle income Americans again.

BIDEN: The bipartisan group called the Tax Policy Center made up of former Bush and Clinton economic experts, that's why they said that the Romney /Ryan tax plan would in fact raise taxes on middle class families with a child an average of $2,000 a year.

(END VIDEO CLIP)

BURNETT: Mark Zandi, I'm getting a little tired of hearing all the studies being referenced, running the wall down talking to the professors. Everyone has --

ZANDI: I write those studies. I'm all for them.

(CROSSTALK)

BURNETT: Do we really know which side is right when everybody can cite a study?

ZANDI: Well, you know, I think the Tax Policy Center is very definitive. It's not partisan. It's very well-respected. I think they do fabulous work. I think we can trust them. I think it's fair to say that under the Romney plan as currently proposed, it will be very difficult to be deficit neutral and get away with not raising taxes on middle income household households.

Now, having said that, I'm sure Governor Romney would adjust his plan to make sure that doesn't happen. So, when pushed came to shove, he probably scaled back his tax cuts just to make sure that the tax bill for middle income households wouldn't go up. But, finally, let me say, at the end of the day, the main beneficiaries of the tax cuts by definition are going to be high income households. They paid the taxes. They're going to get the tax break.

BURNETT: Well, unless loopholes get closed. Right?

ZANDI: Well, even if the -- depends on how they close them.

BURNETT: Right. Well, that's the question.

ZANDI: Because we're depending so much on loopholes here and it's a lot that have to be cut because it's a lot of revenue. We don't have any clarity with respect to exactly what that means and if we're going to focus on that, we need a little bit more clarity on that as well.

BURNETT: All right. Well, thanks very much to both of you. We appreciate it.

We'll have more on all the dueling studies out there.

Still to come, Biden's beef with Paul Ryan's mention of green pork. It was sort of a strange little thing. If you weren't watching closely, you may have missed it. And we'll make sure you hear it.

And tonight, the internet is buzzing over Apple news that could set the market on fire, but it seems that Apple might be very afraid.

(COMMERCIAL BREAK)

BURNETT: And we're back with tonight's "Outer Circle", where we reach out to our sources around the world.

And tonight, we go Canada where police are looking into the tragic death of a young girl who police say killed herself after posting an online confessional about being bullied at school.

Duncan McCue at Canadian Broadcasting Corporation filed the story.

(BEGIN VIDEOTAPE)

DUNCAN MCCUE, CANADIAN BROADCASTING CORPORATION: The video is heartbreaking. A 15-year-old named Amanda. She never speaks, but recounts how she descended into depression and self-harm after taunts online, harassed to attacks at school. She uploaded it to YouTube last month. Yesterday, she took her own life.

She had changed schools a few times, but couldn't escape her tormenters. Now, classmates are in disbelief.

UNIDENTIFIED FEMALE: This has been going on for a very long time. (INAUDIBLE)

MCCUE: School officials who knew about the bullying say they connected her with counselors.

UNIDENTIFIED FEMALE: The district was aware of the video that was posted, was aware of this prior of her death and that supports were in place. MCCUE: Condolences flooded Facebook, where much of Amanda's ordeal played out. Amanda herself recently posted a school project on cyber bullying, yet her online confessional mirrors similar stories of pain.

Tragically, Amanda hoped her video would help others. Now, YouTube has pulled it and counselors grapple with its legacy.

(END VIDEOTAPE)

BURNETT: An awful story.

And now, our fifth story OUTFRONT: green pork.

Well, those two words may sound very strange, but they actually were said last night. They were part of a tense moment, a very tense moment during last night's debate. Congressman Paul Ryan was criticizing the administration for spending stimulus money on green energy, but Vice President Biden hit back on the attack. Here's the exchange.

(BEGIN VIDEO CLIP)

RYAN: The vice president was in charge of overseeing this, $90 billion in green pork, to campaign contributors and special interest groups.

BIDEN: He sent me two letters saying, by the way, can you send me some stimulus money for companies here in the state of Wisconsin. We sent millions of dollars. You know why --

MARTHA RADDATZ, MODERATOR: You did ask for stimulus money.

BIDEN: Sure he did.

RYAN: On two occasions, we advocated for applying for grants. It's what we do. We do that for all constituents.

BIDEN: I love that.

(END VIDEO CLIP)

BURNETT: It turns out Biden was wrong. He made at least four. That's a fact check I'm sure Joe is really upset about.

The rest of them, he probably wants to hear nothing about, but this one, he probably does.

John Avlon is OUTFRONT tonight. He's been looking into this.

Paul Ryan has been criticizing green pork for a while, but had also asked for money to create green jobs. Some might say this is practical, others might say hypocritical.

JOHN AVLON, CNN CONTRIBUTOR: That's right. And that's where the line is. When the green pork has been given out, you know, Paul Ryan went right up to the trough and ask for his.

But this is part of the problem of being a congressman. A part of being a member of Congress is requesting money for your constituents. So, an ideological fiscal conservative like Paul Ryan is kind of double blind.

BURNETT: Right.

AVLON: On the one hand, he's got to provide for his constituents. On the other hand, when he hits the campaign trail and rails against government spending, his open accusations of hypocrisy, not only for this request for green pork, but also because here's a guy who spent his entire adult life working in government, running against government spending. It's a tricky line to walk.

So, how much does this hurt Paul Ryan? Do people understand that distinction? I mean, you might not want the stimulus, but then when it happens, you've got to go fight for your piece of it. Does that sell or not?

AVLON: In general, you know, Erin, I believe that hypocrisy is the unforgivable sin in politics, but this is understandable, because people do get part of your job isn't just to be a policy wonk, to be a budget expert, but to fight for the rights of your constituents. And that's what Paul Ryan did fairly ably.

BURNETT: Now, last night, there was also the exchange about the letters and then Joe Biden said well, you can write me a letter when ever you want. One of those moments that some people hated him for, other people supported him for. But you have some of the letters.

AVLON: Yes. We have four of the letters right here and look, they asked for --

BURNETT: Are they written like you would write a letter to a friend?

AVLON: Oh, no.

BURNETT: Not to a friend?

AVLON: This is not my friend, Joe Biden, give me some green pork. That's over lunch.

No, this is just simply a bureaucratic navigation, but writing a secretary of energy asking for these green jobs and stimulus money. The very stuff he hits on the campaign trail a lot. So, here he is, he's part of that hypocrisy. He's hitting it on the campaign trial, attacking the stimulus, attacking green jobs but in these letters clearly asking for his own share of green pork when he had the opportunity.

BURNETT: And what's your bottom line verdict? You think this is understandable for voters?

AVLON: Look, I think folks need to understand this is part of the congressman's job, but if he's going to go out and railed against government, say it never benefits small businesses, talking about green pork, green jobs, and how the stimulus was a failed boondoggle, he had to know these letters were out there. That opens him up to accusations of hypocrisy or at least ideological inconsistency.

BURNETT: That's right. At least friends can disagree. Thanks very much to John Avlon.

A friend might have been the most annoying word of the debate last night. It's just my take.

All right. OUTFRONT next, he's only 12 years old but he's already caught the eye of Apple. Apple, which by the way tonight seems to be very afraid.

(COMMERCIAL BREAK)

BURNETT: Forget about the iPhone 5, because there could be a new Apple product on the horizon called the iPad mini. Now, the tech world is buzzing about this, that Apple could be unveiling a smaller version of the iPad during an invitation only event, that's how they like to do it, at the end of the month. Rumors has it the iPod mini will have a screen less than eight inches and sell between $200 and $250 which would put it in the range of the Kindle Fire by Amazon.

The event is also going to be just a few days before Microsoft's tablet comes into the market. It's called the surface.

There are a lot of these things competing which brings me to tonight's number, 13. That's the price of the Texter Beagle. Berlin- based startup Texter says the Beagle is the world's smallest e-reader. It's also lighter, its screen is five inches. The Beagle can only hold five books at a time, though.

So, maybe Apple is not so scared of the Beagle. But you know what it is scared of, perhaps, is the Samsung Galaxy tab. That's been selling like hotcakes and its screen is only seven inches. Maybe Apple felt the need to rush into the smaller screen to try to steal Samsung's business.

So, let us know what you think. Samsung, Apple or Beagle? Let us know your favorite tablet on Twitter or Facebook.

(MUSIC)

BURNETT: So, from Eric Schmidt's Google to Reid Hoffman's LinkedIn, OUTFRONT has taken you behind the scenes of some of the world's most innovative ideas and most successful entrepreneurs. And what sets tonight's idea apart, though, from those we usually profile in our show is what you're looking at right there. That's the young man we had on the show.

He was 11 years old when he came up with his idea. Not only that, but his idea caught the attention of one of the most revolutionary companies on the planet, Apple.

Earlier, I spoke with Charlie Hutchison and asked him how he did it.

(BEGIN VIDEOTAPE)

CHARLIE HUTCHISON, APP DEVELOPER: Well, I've always really been interested in computers and so when I decided to make an app, I was thinking about what I would want to do and I decided I wanted an easy way to be able to follow all of my friends' accounts on Flickr and see their photos. So that was the basic idea and then it kind of evolved from there. Now it has a geo-coded photos and recent photos and things like that. But that was the basic idea.

BURNETT: All right. So I have to be honest with you. A lot of people might say to me I have this idea, I really want to be able to follow my friend's pictures on Flickr, they might have that idea, but I don't know anybody who could actually turn that into an app and get that -- actually make it work.

So, how did you do that part of it?

HUTCHISON: Well, so I just -- I have always been interested in this so I did some -- used research to learn how to write the computer code to it and I just wrote about I think 2,000 lines of code and that made the app.

BURNETT: Wow. You just sat there and wrote the code.

HUTCHISON: Yes.

BURNETT: All right. Then when did you say I want Apple -- I know my app is good enough to be on Apple? How did you figure out how to go through the process? I got to imagine Apple gets tens and thousands and probably more than of people who want to have apps on every day.

HUTCHISON: When I finally finished it and it was to my satisfaction, I thought it was ready, I looked it up and started looking at their developer programs and how you would submit it, and I finally submitted it to the App Store so they could review it and try to approve it for the App Store.

BURNETT: You were how old at that time?

HUTCHISON: I was 11. I was going to turn 12 in a few days.

BURNETT: OK. So some people might say to you hey, here you are, you're 12 1/2 years old now, so this is ancient history, right? Eighteen months ago when you did this app. People might, they look at you and say you're going to be another Bill Gates. You're going to be another Tim Cook.

HUTCHISON: That's a pretty aggressive comparison. I would certainly love to do something great like that and I'll try to do something like that, but that is a pretty big comparison.

BURNETT: What do your friends at school think? HUTCHISON: They think it's really cool. They have been really supportive and they have thought it was really cool and have given me plenty of ideas.

BURNETT: So what are you working on? What's the next app you're coming up with?

HUTCHISON: Well, I'm working on several new projects but I'm not really sure what I'm going to do yet so I'm not really sure of all the details and what my next app is going to be yet.

BURNETT: Are you kind of, you know, you sound like a CEO there sometimes. I ask, are you going to buy a company and they're not really sure. Are you being coy or really not sure?

HUTCHISON: I'm really not sure. I'm working on a few things. I haven't worked out all the details and found out exactly what I'm going to do yet.

BURNETT: But in addition to apps, my understanding is you have a part-time computer consulting service that you do, and you're saving all of the money that you earn to go to the Apple Developer Conference?

HUTCHISON: Yes. I just help a lot of people with their computers, mainly learn how to use them and teach them and get it set up, and so I can go to the worldwide developer conference with Apple hopefully next year.

BURNETT: But there's an age limit, right? Are you going to make the cutoff?

HUTCHISON: Yes. I'll be 13 next year and that is the age limit. Although this is the first year it was 13. It used to be 18. But they finally changed it because they're starting to realize younger people are becoming more interested in computers and apps.

BURNETT: Well, maybe you are part of the reason that changed. Thanks for sharing a little bit of your gift and talent with us, Charlie.

HUTCHISON: Thank you.

(END VIDEOTAPE)

BURNETT: Gifted and talented and also very humble. Maybe a combination that a lot of CEOs could learn a lot from by watching Charlie Hutchison.

Thanks so much for watching. Have a wonderful weekend, as always. We'll see you back here on Monday.

"ANDERSON COOPER 360" starts right now.