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STARTING POINT WITH SOLEDAD O'BRIEN

Round 2 of Presidential Debates; Interview with Rudy Giuliani; Interview With Gov. Jack Markell; Girl Shot by Taliban for Promoting Female Education; Classic Christmas Story Rewritten; Remembering Arlen Specter; Bernanke Plays Defense

Aired October 15, 2012 - 08:00   ET

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


(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome, everybody.

Our starting point this morning: ready for the rematch. Mitt Romney, President Obama prepare for their Long Island debate. I like to call it the Strong Island debate as the campaign turns up the heat.

Listen.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, OBAMA CAMPAIGN SENIOR ADVISER: I think you'll see somebody who's very passionate about the choice that our country faces.

ED GILLESPIE, ROMNEY CAMPAIGN SENIOR ADVISER: The president can change his style, he can change his tactics. He can't change his record.

(END VIDEO CLIP)

O'BRIEN: New polls this morning show the candidates are in a statistical dead heat.

Fighting for her life. The Pakistani teenager who was shot in the head by the Taliban is headed out of the country for treatment. We'll bring a live report on how she's doing right now.

And a death-defying stunt. Daredevil Felix "Fearless" Baumgartner breaks the sound barrier as he plunges 24 miles to the ground and lives. The incredible new angles to show you this morning.

Joining us: former New York City Mayor Rudy Giuliani is our guest, Delaware governor Jack Markell, former FDIC chair Sheila Bair, and Pennsylvania Senator Bob Casey will be joining us as well.

It's Monday, October 15th. And STARTING POINT begins right now.

(MUSIC)

O'BRIEN: Good morning. Welcome, everybody. Our team this morning: Chrystia Freeland. She's a digital editor at "Thomson Reuters", author of "Plutocrats," just hold it up. "The Rise of the New Global Super-Rich and the Fall of Nearly Everybody Else."

Margaret Hoover is a former White House appointee in the Bush administration. Richard Socarides is a writer at NewYorker.com. John Berman is sticking around.

MARGARET HOOVER, FMR. WHITE HOUSE APPOINTEE, BUSH ADMINISTRATION: And I wrote for Rudy Giuliani.

O'BRIEN: That's why you got up and ran and gave a big hug when he walked in?

HOOVER: He introduced me to my husband. The reason my husband and I were married.

O'BRIEN: It changes my entire line of questioning for this morning.

This morning, we're talking about round two, of course, in the presidential debate. President Barack Obama, challenger Mitt Romney spending the weekend getting ready to face each other again. At this point, it looks like it's anybody's race. There's a new "Washington Post"/ABC News poll has the president ahead by three points, which is well within the margin of error. New political poll shows that the president's ahead by one point, which would make it a statistical dead heat.

The former Mayor Rudy Giuliani joins us this morning. He's a Romney campaign surrogate. He's also debated Mitt Romney himself in the 2008 campaign. It's nice to have you with us.

FMR. MAYOR RUDY GIULIANI, (R) NEW YORK CITY: It's nice to be with you.

O'BRIEN: So talk to me a little about how you think version 2.0 is going to go? We've heard from the administration's side that - I think the word they've used is more engaged or aggressive. "Passionate" was the word.

GIULIANI: It's a different debate, so it's going to be very interesting to compare them. This is very, very different. This is audience - mostly audience questions, so I don't know how aggressive you can get in a debate like that.

O'BRIEN: Yelling at audience members.

GIULIANI: Hardly think you can see a performance like Joe Biden's. If that had been an audience thing, they'd have wondered what the heck he was laughing at. So I think Mitt Romney will be very, very good. As you said, I debated Mitt 11 times. I've watched him debate another 20 times. He's always good. Sometimes he's great, as he was last time. He's never bad. So we know he's going to have a very steady to a very, very good performance.

The president is more of a question. I mean, the last performance was really troubling. I mean, it's the reason I think these polls have gotten so close. His performance was a shock to me. I expected him to be much better. I thought Biden's performance, on reflection, was very damaging to them. I think all that laughing created questions about what the heck he's you laughing at?

O'BRIEN: The campaign said to me, when I asked about it the next morning, and they said, listen, if all Republicans point out is laughing, clearly they have nothing to criticize on that -

GIULIANI: Oh, there's plenty to criticize. I mean, the cover-up of Benghazi, I mean, is startling. In fact, I think.

JOHN BERMAN, CNN ANCHOR: Well -

GIULIANI: Can I finish my statement before you get all upset? I mean, the reality is, he said, "We didn't know they were asking for more security." Where the heck was he? I mean, they were demanding more security. They were begging for more security.

Susan Rice goes on television four days later -- I was on CNN with her that morning - says, "It was a spontaneous demonstration." I knew it wasn't. I knew it wasn't. I'm not part of the administration; I knew it wasn't the day after. And she had to know it wasn't. They were saying it wasn't, the National Security Adviser said it was a terrorist plot.

O'BRIEN: Right, so the White House now is basically saying the State Department dropped the ball, the State Department is looking and saying - listen, I'm just telling you how it goes - and they're saying there's intel issues. But my question is -

GIULIANI: Who put Susan Rice on? The State Department? Or the political people? It was a political appearance on CNN. So what they're really trying to do is they're trying to run out the car (ph). They're going to have this investigation; the investigation will be after the debate, after the election is over, so what they're trying to do is cover up this scandal as much as possible.

O'BRIEN: Calling something a cover up kind of takes it a further step, don't you think?

GIULIANI: No, wait a second. There was - a statement was made, including by the President of the United States, that this was due to this terrible movie about Mohammed.

O'BRIEN: But he actually didn't say it. The verbatim, the actual verbatim of what he said, he did not say it was something other than that, but it was mentioned. But he did not succinctly say, "This was due to a movie."

GIULIANI: He mentioned -

O'BRIEN: Miguel, why don't you pull all these transcripts for me? We have them all in the back room, we can just pull them out. Because I think the specifics --

GIULIANI: Man, am I debating with the president's campaign? I mean, the defense of the president is overwhelming.

O'BRIEN: No, I just like to stick - hold on a second, hold on a second.

GIULIANI: Susan Rice goes out there four days after, says this was a spontaneous demonstration; it clearly wasn't. There was information both in the State Department and the White House that it wasn't. There was no protest in advance.

O'BRIEN: But my question to you, and what I'm saying -

GIULIANI: This sounds like a cover up. I mean, if this weren't a Democratic president, I think all of you people would be crazy.

(CROSSTALK)

O'BRIEN: The one thing I'm debating with you is just specifics. So when you quote someone or you paraphrase them, the only thing I ask is that you get that accurate. That's all I ask. So we're going to pull those because you're not; you're a little off as you describe it. That's the only thing I'm debating with you, number one, and I'm asking you -

GIULIANI: But we're also entitled to interpret what the president is saying.

O'BRIEN: Of course you are. I'm just also -

GIULIANI: Without this, like, massive defense of everything he said.

(CROSSTALK)

CHRYSTIA FREELAND, DIGITAL EDITOR, THOMSON REUTERS: Just to sort of pivot off to the next subject, if I may, do you think foreign policy, including Benghazi, is going to play a significant role in the election? Because I would say, my bias is to think actually it's really interesting for us to talk about, but I think people essentially are going to vote on the economy.

GIULIANI: You're right so far. I think it's moving a little. And I think if in fact this becomes a question of the president's lack of leadership, then it cuts into the economy as well. And it's beginning to become like that. The White House -

FREELAND: And do Republicans want to debate on foreign policy or on the economy?

GIULIANI: The White House has been remarkably - the White House has fumbled this, whether it's a deliberate cover up or they're making it look like a cover up, they have fumbled the ball four or five times here.

(CROSSTALK)

GIULIANI: Several contradictions. So, excuse me, if, being the fact that I'm Republican, I don't give them, as you do, all the benefit of the doubt.

RICHARD SOCARIDES, WRITER, NEWYORKER.COM: Mr. Mayor, can I just ask you this, though? It seems to me that every time an American is killed in the line of duty that it represents some kind of failure of intelligence. So what, though, do you think they're trying to cover up here? I mean, I think they've admitted that they didn't - that the intelligence originally was not correct. But now to say that's an intentional cover-up, I think, is really stretching. I mean, why would they try to cover up? What would they be trying to cover up?

GIULIANI: But that's not actually accurate. The intelligence was correct. The next morning, they had information that this was a terrorist attack.

SOCARIDES: But we don't know that.

HOOVER: We do. We do know that. They've essentially said that.

GIULIANI: You guys, you guys got the journal. We may never have found out unless you took the journal. The White House said -

(CROSSTALK)

GIULIANI: You guys had to go get the journal. The White House kind of accused you of stealing the journal. But you got the journal of the ambassador that showed that the ambassador was very, very concerned about security. I'm not sure they ever would've put that fact out until after the election was over. You've had to squeeze these facts - you, CBS, and FOX - had to squeeze these facts out.

This is supposed to be the most transparent administration in history? Come on, give me a break. Something funny's going on here. Something's rotten in the state of Denmark.

O'BRIEN: I would completely agree with you that there's been lots of dancing around this issue. My question to you was, when you say something is a cover-up, I think that's a next step forward. That was my only question.

But let's move on. I want to play a little bit of what you said back in February on CBS's "Face the Nation." You were talking about Mitt Romney. Listen.

(BEGIN VIDEO CLIP)

GIULIANI: He has changed his position on virtually everything. He was a traditional moderate Republican, strong on fiscal matters, conservative; strong on foreign policy; but basically socially moderate. And he changed all that.

I am a moderate Republican. That's what I am. So I'd be inclined to support like Mitt Romney, but all those changes in positions give me pause.

(END VIDEO CLIP)

O'BRIEN: Still give you pause?

GIULIANI: No. I resolved it. I looked at President Obama. I said, four more years of President Obama? A disaster for our economy; a confused foreign policy; a Middle East that's falling apart. My goodness, Mitt Romney'd be a lot better than that.

O'BRIEN: Do you think he's been changing positions?

GIULIANI: Look, how is a choice between - neither one of the two men, including me when I ran, none of us are perfect. Pluses, minuses. You talk Romney's pluses and minuses against Obama's pluses and minuses - we got a chance for an economy that could really recover. We got a chance for a Middle East policy that will make some sense. Maybe we won't be having this confusion of first where we want to keep Mubarak in power, and then we change our position on Mubarak. Now it turns out in "The New York Times" we're arming some of the jihadists in Syria. Maybe that's what we did in Libya. We've got a confusing approach to foreign policy.

So I think President Romney would be a lot more focused.

FREELAND: To go back to your sound bite, have you in your own mind come to a conclusion on who is the real Mitt Romney? The moderate guy or the more conservative.

HOOVER: Come on. But I want to hear from the mayor.

FREELAND: Margaret, I love you, but I want to hear from the mayor.

HOOVER: And I'd like him to actually -

O'BRIEN: No, let him answer the question, then you can have a follow- up.

GIULIANI: OK, I'll answer the question. I've come to the conclusion that Mitt Romney is informed by ideology. He's a center right, but he's basically a practical businessperson. And maybe some of my judgment of him comes from my own background. I came into politics in a different way than he did. I came into politics from government service; he came into politics from being a businessperson. I think this is a practical problem-solver. I don't think we're going to see an extreme ideologue in the White House if he becomes President of the United States. Look at his background. Everything else suggests he's going to be a problem-solver.

O'BRIEN: You had a final point you wanted to make. Hang on, John. Go ahead. I feel like I'm -

(CROSSTALK)

HOOVER: OK, it's all right. I think the mayor said it very well and I agree with exactly how he portrayed Mitt Romney.

O'BRIEN: And we will leave it there. Mr. Mayor, nice to have you this morning.

GIULIANI: Always a pleasure.

O'BRIEN: We certainly appreciate it.

We got to take a short break.

CNN's Candy Crowley, I should mention, is going to be moderating that presidential town hall style debate tomorrow night. Special coverage begins at 7:00 p.m. Eastern right here on CNN.

John Berman, got a look at some of the other stories making news today. Good morning.

BERMAN: Thanks, Soledad. We've been following this story all morning.

The Pakistani teen shot in the head by the Taliban should be landing in Britain soon. Fourteen-year-old Malala Yousufzai was airlifted out of Pakistan overnight. Her wounds are severe. She'll be treated at Queen Elizabeth Hospital in Birmingham. The Taliban tried to silence her for good because she defied them. Malala refused to stop promoting the right of Pakistani girls to get an education.

Coming up on STARTING POINT, we'll hear from CNN's Reza Sayah in Islamabad. He has been covering this story right from the very beginning.

Authorities have suspended the search for the body of a 19-year-old University of New Hampshire student just her suspected killer is about to appear in court. Searches have been looking for Elizabeth Marriott's body on the ground and in the water surrounding Peirce Island in Portsmouth. Although no body has been found, today, 29- year-old Seth Mazzaglia, a martial arts instructor, will be arraigned on second degree murder charges.

Pretrial hearing is under way in Italy for the company of ill fated Costa Concordia. Thirty people were killed when the cruise ship ran aground off the coast of Italy in January. Italian authorities have charged the captain with manslaughter. He is also accused of abandoning ship. Surviving passengers will be in the courtroom. Black box data from the ship's bridge is expected to be introduced this week.

Fearless Felix Baumgartner is going out on top -- on top of the world, that is. Look at this, just stunning video of the Austrian daredevil who rose to the edge of space 24 miles up and jumped. He plotted 830- plus miles per hour, faster than the speed of sound. That has never been done outside a jet or spacecraft because it's crazy.

Earlier on STARTING POINT, fellow daredevil Nik Wallenda said Baumgartner was always prepared.

(BEGIN VIDEO CLIP)

NIK WALLENDA, HIGH WIRE ARTIST: You can only trust science and technology to take you so far. At that point, they didn't know what to expect. There are a lot of unknowns. You kind of just have to wing it. That's where that adrenaline and all that training and experience kicked in.

You know, he'd done over 2,500 jumps leading up to that. His military background helped him a lot, I'm sure. As you saw as soon, as he hit the right altitude he did regain control, and all that comes with experience.

(END VIDEO CLIP)

BERMAN: Baumgartner says this was his last jump. Quit while he's ahead.

Ahead like the Detroit Tigers -- feeling pretty good right now about World Series chances. They are halfway there after beating the Yankees at the Bronx, three-zip, to go up two games to none in the American League Championship Series, an embarrassing loss for the Bombers. Game three tomorrow night in Detroit with Tiger ace Justin Verlander on the mound. Man, he's good. That will be tough for the Yankees.

In the NLCS, the defending World Series champ St. Louis Cardinals, they drew first blood against the Giants in the 6-4 win in game one. Game two tonight in San Francisco. Cardinals always so tough in the playoffs. Right now playing so well.

O'BRIEN: John, thank you.

Ahead on STARTING POINT this morning President Obama in intense debate prep mode, only taking a half hour break yesterday apparently. There are all indications, at least if you listen to his staff, he's going to come out swinging tomorrow night. What can we expect? We'll talk about that with Obama supporter, Delaware Governor Jack Markell. He's joining us up next.

And snatching away Santa's pipe. PC Police a little too far in the rewrite and I guess also the illustration redo of "The Night Before Christmas." It's our tough call and it's coming up.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. President Obama left his golf clubs at home when he went to a posh resort in Williamsburg, Virginia this weekend. He was there for only one reason, which is preparing for the second debate against Mitt Romney. The president took a half an hour break only, delivered pizzas to his local campaign field office.

Surprise, surprise. There were cameras rolling.

UNIDENTIFIED MALE: That was kind of cute.

O'BRIEN: Oh, it's a photo op.

UNIDENTIFIED MALE: Oh, it's so cute. So authentic.

(LAUGHTER) O'BRIEN: Authentic. Anyway, all indications if you listen to the staff members are that he's going to come out swinging or at least come out more aggressively than he did after he admitted he had a bad night in the first debate.

Let's get right to Delaware Governor Jack Markell. He's an Obama campaign supporter, Chairman of the National Governors Association. Nice to have you with us this morning. Thank you for being with us.

I'm going to play, I'm going to throw up --

GOV. JACK MARKELL, (D) DELAWARE: Good morning.

O'BRIEN: Good morning to you. Throw up on the screen this new poll, comes to us from our friends at Politico. And it is George Washington University as well. Battleground states, of the 10 battleground states, which are Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, North Carolina, Ohio, Virginia, and Wisconsin. You have Mitt Romney leading 50 percent and President Obama at 48 percent.

When you see a poll like that, how much bad news is that for you?

MARKELL: I've been in two of those states in the last 10 days. I was in Ohio about 10 days ago. I was in Florida yesterday. I can tell you the enthusiasm on the part of the Obama people was incredible and the ground game was just really, really impressive.

In Ohio, I visited a couple college campuses. These young students doing an amazing job registering people to vote, getting people to vote early. Yesterday in Florida, at a couple field offices, at a house party, people raring to go. I mean, literally dozens and dozens and dozens at these offices making phone calls, going on campuses. A lot of enthusiasm. And I think, to me, that's the most important issue right now.

O'BRIEN: What change do you see in this debate, the second - version 2.0? Will he be, will the president be aggressive?

MARKELL: I think the real question - I'm sure he will be, and I think the real question is which Mitt Romney shows up. I mean, is he going to be one who said he was, he governed as a severe conservative in Massachusetts? Or will he be the Etch-A-Sketch guy that he the last time? And I think obviously part of what the president will do is drive that home. And to the extent he is the severe conservative, I'm sure the president will reveal exactly how that's not consistent with mainstream American values. And to the extent he's the Etch-A-Sketch guy, the president will show how that's inconsistent with who Mitt Romney's been before.

SOCARIDES: Well, you know, I think we should discuss what we just heard from Mayor Giuliani, who made some rather striking allegations this morning about an alleged cover-up. I mean, I for one think that the mayor stretched that, but I'd like to hear what the governor has to say.

Did you hear Mayor Giuliani's comments on Benghazi? MARKELL: I did. I also believe firmly that the administration will do everything they can to get to the bottom of it. I also heard what Mayor Giuliani said back in February, where he said Mitt Romney has changed his positions on everything, and I think that is - that's really the issue at hand here. You know, again, is he going to be the real conservative Mitt Romney that he says he is or is it now going to be the guy who is moderate in all of his position? And I think that will really be the issue here.

BERMAN: Governor, how can you convince the American people that the administration really is doing everything it can to get to the bottom of what happened in Benghazi when the story has changed so consistently from the very, very beginning?

MARKELL: I think the American people understand that these are very complex situations. As you go on with the investigation day by day, additional information becomes available. And as the information becomes available, they'll share it. I mean, I think, again, these are - it's really complicated. People want to get to the bottom of it and I think nobody wants to get to the bottom of it more than the president and the vice president.

FREELAND: Will we learn something about Benghazi from the president tomorrow? I mean, is he - does he have a prepared statement to clear things up?

MARKELL: That I don't know. I just haven't had any conversations with him or his team as part of the debate preparation. I'm sure as information becomes available, they'll share it. But I think the real point of the debate tomorrow, it's a town hall format, is make sure the president answers the questions but also, in addition to answering the questions that are posed to him, make sure that as Mitt Romney answers the questions, let's talk - let's figure out which Mitt Romney it actually is.

O'BRIEN: Andrew Sullivan has written "The Daily Beast", he was so upset the other day in the last article we read and he really was completely over the top. Here's what he wrote about what he needs to see from President Obama, personally.

He said this: "Obama threw it all back in his supporters' faces, reacting to their enthusiasm and record donations with a performance so excreable" - excreable? This is a word I don't know how to say. Excuse me, we'll just move on from that word. "Lazy, feckless, so vain, it was almost a dare not to vote for him. What he has to do now is so nail these next two debates, so obliterate Romney in both, that he can claw his way back to victory."

Is the format of this debate even possible to do that? It's a town hall. How do you obliterate somebody in a town hall?

MARKELL: Look, I'm not sure obliteration is the key goal here. People make up their minds based on a whole set of observations during the campaign. This debate is certainly important and it's a great opportunity, not only for the president but for the president to focus the American people in on Mitt Romney and, again, what is it that Mitt Romney is saying today? How does that compare to what Mitt Romney said during the primary? These are two entirely different candidates and I think whether it's a town hall format, whether it's just a moderator format, it's a great opportunity for the president to dive into that.

HOOVER: Governor, Margaret Hoover here. Is it the president's strategy only to keep the focus on Mitt Romney and Mitt Romney's history or does he have plans to actually be specific about his own second agenda, second-term agenda plans, and to talk, like my colleague John Berman said, about Benghazi? To give the American people confidence that there is something new and something different coming from what would be a second Obama term?

MARKELL: The president, to his credit, throughout this campaign, has been specific. And for people who wonder what those plans might be, if you haven't had a chance to hear him talk about it, they can go to barackobama.com/plans. I mean, he's laid it all out there.

I really hope, and I think it's a good question, it's one of the things I hope he has the chance to do, because I think the more that people dig in to his plans to promote more exports, to make sure there's more foreign direct investment here, to focus on the jobs act -- I mean he has been focused as focused can be on putting more people back to work. And I think you started to see some of that with 31 straight months of job growth, 5 million jobs, so on and so forth. But he's the first to know that we've got more to do and he's laid out specific plans for us to get there and I'm excited to hear more about that during the debate as well.

O'BRIEN: Governor Jack Markell joining us this morning. Nice to you see you, sir. Thank you for talking with us.

MARKELL: Thanks a lot.

O'BRIEN: You bet. We got to take a short break. Back in a moment.

(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Welcome back to STARTING POINT. I'm Christine Romans with this week's "Smart Is The New Rich."

Taxamageddon is what will happen if Congress doesn't act in scheduled tax hikes and spending cuts going into effect January 1st. It's also called the fiscal cliff. There are several key tax hikes that mattered (ph) everyday Americans, parents, working people, students, these could revert back to previous smaller levels.

OK. For parents, the child tax credit, lower income parents claim as much as $1,000 for each kid under 17. There's the child and dependent care tax credit. Any working parents or people who are trying to find work, they can report up to $3,000 and child care related expenses up to six grand per family.

There's the earned income tax credit. The government estimates it lifts millions of Americans out of poverty each year. And there's a college tax credit for lower income families that can claim up to $3,500 in college expenses each year for four years. Now, these tax hikes like this will hit 88 percent of Americans according to the Tax Policy Center, raising their taxes on average $3,500.

Senators have begun to talk about beginning to talk about a framework for fixing this. Deficit negotiators expect a frenzy in the lame duck session of Congress.

O'BRIEN: They've begun to talk about beginning to talk about it?

ROMANS: About the framework.

(CROSSTALK)

HOOVER: The principles they would agree on before they came to talk about it. Interesting.

ROMANS: So, we'll hope that all of that talking will eventually lead to something actually being done, because when you look at all of those tax credits, you can see it's a lot of people. Eighty-eight percent of Americans would be affected by what happens on January 1st.

HOOVER: And the CBO says it would throw the country back into recession affirmatively.

ROMANS: But it would certainly help our deficit and debt position. It really would.

HOOVER: It certainly would if you pay it off. At the cost of paying it off, at what cost?

O'BRIEN: Good news, bad news. All right. Christine, thank you.

Still ahead this morning on STARTING POINT, more than 200 people are now infected with that deadly meningitis outbreak. The latest details straight ahead on that.

Also, "Saturday Night Live" feasting on the fodder from the VP debate. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: A bunch of malarkey?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: What does that mean?

UNIDENTIFIED MALE: It's Irish.

UNIDENTIFIED MALE: No, no, no. Irish is I come over there and smack that dumb look off your face.

(LAUGHTER)

(END VIDEO CLIP) O'BRIEN: More highlights of that coming up.

Also, a new version of the iconic story "Twas The Night Before Christmas." But it's been rewritten. And in this one, Santa's not smoking. Hmmm. We're going to talk about whether or not you can even do that. We're back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Morning, welcome. You're watching STARTING POINT. Let's get right to John Berman for a look at some of the stories making news.

BERMAN: This is a story we've been following all morning. The 14- year-old Pakistani girl shot in the head by the Taliban should be landing in Britain soon. Malala Yousafzai's wounds are severe. The Taliban tried to kill her because she publicly defied them by promoting education for girls. Pakistanis, many of them outraged by the attack.

CNN's Reza Sayah has been covering this story from the beginning. He's in Islamabad this morning. Good morning, Reza.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Good morning, John. When an air ambulance landed here in Islamabad last night we thought there would be a possibility for Malala to be air lifted out of here. I don't think a lot of people expected it to happen this weekend. It did this morning, 9:00 a.m.

Malala Yousafzai took off from Islamabad, made a quick stop in Abu Dhabi. There, Pakistan's ambassador to the UAE briefly saw her, described her as still unconscious. This is a roughly 11, 12-hour trip. I think with that stopover in Abu Dhabi you can expect her to land in England, Birmingham, England, sometime in the next two or four hours.

The military was overseeing her care here while she was in Pakistan. They described this as a window of opportunity to get her to this facility that specializes in treating children with severe injuries. Of course, she's got damage to her skull, possibly neurological damage. Her mother is with her. Her father and little brother and many, many people at this hour praying for her all over the world, John.

BERMAN: Thank you, Reza. Reza Sayah in Islamabad. We hope this means good things for her treatment.

It's 35 minutes after the hour. Contaminated pain injections have now made 205 people sick -- 203 of them infected with fungal meningitis. The other two have peripheral joint infection. The CDC says the fungal meningitis outbreak has killed 15 people. And 14 states are now reporting cases, with Tennessee, Michigan, and Virginia the hardest hit.

It has been 50 years since the Cuban missile crisis when the U.S. was on the brink of nuclear war with the Soviet Union. Hundreds of private and confidential documents held at the JFK presidential library are going online. They include memos between President Kennedy and his brother then Attorney General Robert F. Kennedy during the height of the crisis.

The Pack is back. Green Bay quarterback Aaron Rodgers tossing a career high six touchdown passes last night to let the Packers pass the Texans 42-24. It was Houston's very first loss of the season. Only one unbeaten team remains. It is the Atlanta Falcons. The beat the Oakland Raiders 23-20 yesterday by a last second 55-yard field goal by Matt Bryant. The Falcons now 6-0.

President Obama and Mitt Romney will be center stage again tomorrow night. "Saturday Night Live" getting the last laugh from the Biden/Romney debate.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: First of all, I want to thank Center College for hosting us this evening.

UNIDENTIFIED MALE: Oh, boy, here we go.

(LAUGHTER)

UNIDENTIFIED MALE: Four years ago President Obama made a promise.

(LAUGHTER)

UNIDENTIFIED MALE: That he would bring down unemployment below six percent.

UNIDENTIFIED MALE: All right, let's go.

(LAUGHTER)

(END VIDEO CLIP)

BERMAN: All right, that's funny. This you may not find so funny. A new smoke-free version of "'Twas the Night Before Christmas" is getting some holiday jeers. A visit from St. Nicholas, the jolly old elf, kicks his pipe habit cold turkey. Author and anti-smoking author edited out two versions about smoking. Some critics say the rewrite is too PC including the president of a bearded Santa group. He responded by saying, quote, "Leave my story alone. This change is not officially sanctioned by the North Pole."

What are those verses, the famous verses?

O'BRIEN: The verses are, "The stump of a pipe he held tight in his teeth, and the smoke encircled his head like a wreath." A rather beautiful image which I think our children should get to hear.

(CROSSTALK)

BERMAN: There was a controversy over Santa's weight. Was Santa too fat? Does a fat Santa send a bad message? SOCARIDES: Is it Christmas already?

O'BRIEN: But it is a thing that exists that someone wrote. It's called "'Twas the Night Before Christmas." How do you edit around it?

HOOVER: "The New York Post" did this article about it sort of tongue in cheek. Here's what they'll do next. A moratorium on elf made toys. It's child labor, the vertically challenged drummer person, and Melty, the global warming slash-man.

O'BRIEN: Still ahead on STARTING POINT. He was a political wild card. He spent decades as a Republican and switched to the Democratic Party. The life and impact of Senator Arlen Specter. That's up next.

(COMMERCIAL BREAK)

O'BRIEN: Senator Arlen Specter will be laid to rest tomorrow. The former senator died yesterday from non-Hodgkin's lymphoma, which is cancer of the white blood cells. He was 82 years old. He came into prominence in the mid-'60s with his involvement in the Warren Commission while he was investigating the assassination of President Kennedy. After his election in 1980 he was involved in contentious Supreme Court hearings, famously switched from the Republican Party to the Democratic Party in 2009.

That brings us to Senator Bob Casey, Democrat from Pennsylvania, Chairman of the Joint Economic Committee, served with Arlen Specter between 2007 and 2010. Nice to see you, sir. Thank you for talking with us.

SEN. BOB CASEY, (D) PENNSYLVANIA: Thanks, Soledad.

O'BRIEN: Why don't you start by telling us a little bit about the Arlen Specter you knew personally as opposed to that we knew sort of by watching what was happening in the Senate?

CASEY: He was great to work with. I came in in 2007, January of 2007, as a Democrat. One of the first things he said to me in the transition right after the election was that it was important for us to try to work together where we could. And he also said -- and this is interesting -- he said, "It's important for people to see us working together."

At the time it didn't mean that much. I thought it was just something he was saying by way of introduction. But all these years later with all the partisanship, it has much greater meaning today.

O'BRIEN: Is it possible to go back to that kind of a collaborative, working across party lines approach in the Senate? Or is American politics just fundamentally changed and broken?

CASEY: No, I think we can. I think you can still establish personal relationships so that you can work together, but we've got a long way to go. We need a lot more of that bipartisanship. But he worked at it his whole life.

SOCARIDES: Senator --

CASEY: I was, when I served with him, was at the end of his life, of course. But he was -- he was a remarkable figure, so capable, but also so willing to work with others in the best interest of our commonwealth and our country.

SOCARIDES: Senator, I was just going to ask you, he really struggled, right, with changing parties and what that meant, and he had a lot of friends in both parties?

CASEY: He did. He had established friendships in both. I think he was particularly frustrated with the partisanship of Washington and he felt he could better serve the state by changing parties. But that was a tough decision. I knew he was doing it because he was thinking how he could best serve Pennsylvania.

FREELAND: Not many senators at the end of their life become stand-up comics.

O'BRIEN: I was going to ask that same exact thing.

HOOVER: Stand-up comic, pretty remarkable. What other anecdotes can you tell us about Arlen Specter?

CASEY: Well, he had a great sense of humor. Sometimes someone who's that capable and that serious and that determined, you can forget the fact that they're -- that they have a sense of humor and he did. Not only as he exhibited as a stand-up comic, but also just in the interactions we would have. We would tell stories about campaigns and politics and he was a delight to be around, especially on the floor when you get a couple minutes to have him tell a war story or two.

O'BRIEN: Senator Bob Casey joining us this morning, remembering Arlen Specter. Nice to see you, sir. Thank you for talking with us and sharing your stories. We appreciate it.

CASEY: Thanks very much.

O'BRIEN: You bet.

Still ahead on STARTING POINT are the policies of the Federal Reserve hurting other nations? Chairman Ben Bernanke on the defensive this morning, the former chair of the FDIC Sheila Bair is going to be our guest. That's coming up next.

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O'BRIEN: Welcome back, everybody.

Federal Reserve Chairman Ben Bernanke is firing back at critics who say U.S. monetary policy is hurting emerging nations like Brazil. In a speech yesterday in Tokyo Bernanke directly addressed detractors and he said this. "This policy not only helps strengthen the U.S. economic recovery but by boosting U.S. spending and growth it has the effect of helping support the global economy as well."

On Friday Brazil's Minister of Finance called the Fed's policy of buying bonds to lower interest rates selfish.

Joining us this morning to talk about that is former chair of the FDIC and author of a new book, which is called "Bull by the Horns", Sheila Bair, nice to have you with us.

SHEILA BAIR, FORMER FDIC CHAIR: Thanks for having me.

O'BRIEN: Walk us through. I mean because -- when he made his response, Bernanke didn't actually name names. He didn't say Brazil. He didn't say China.

BAIR: Right.

O'BRIEN: He didn't say Russia.

BAIR: Right.

O'BRIEN: But those are really those emerging countries --

BAIR: Emerging countries that are having some issues with this. Well look, I've said it before. I think Ben is heroic in trying to help our moribund economic recovery through monetary policy, but I don't think it works. And I think this whole debate underscores the problem.

The money doesn't stay here. The money doesn't go into lending -- domestic lending that helps the economy. It goes overseas where it can get higher returns in these developing countries and that creates problems for them.

So you know I wish I could say that I agree with him, that by another round of quantitative easing is going to help the economy here and then we're going to buy more of their goods. But that's just -- there's just no evidence it's just working anymore.

ROMANS: What about his point that some of these countries are -- China in particular, he didn't say China, but everyone is assuming he meant China.

BAIR: Correct.

ROMANS: That they are artificially --

(CROSSTALK)

BAIR: Keeping appearances --

ROMANS: Right and that's -- and that's making it harder for them.

BAIR: Right. Well look, I would love to see our export market increase. And theoretically if you know we can depreciate our currency against theirs it should help our export market. But they control the value of their appreciation, excuse me, their currency through their own central bank activities.

I would prefer that Congress deal with this problem. Make the tax cut, for one. Get the corporate tax rates down. Clean up the tax code. There are things on the fiscal policy side that will help our manufacturing sector and our export capacity to build more jobs and have a more export driven market that are going to be a lot more effective than monetary policy.

And by continuing to do this I think he's letting Congress off the hook. It's really their job.

HOOVER: Do you think the Fed has overplayed its hands in terms of creating these tools and mechanisms to try it?

BAIR: Yes I do. I think they created an expectation. Look, it's really -- you know income inequality has gotten worse here. And quantitative easing at the end of the day it helps people who own financial assets. It will bump you know your pay for crop in the stock market, you can pay for crop in the bond the market. But the -- you know helping the real economy, creating jobs, the evidence just isn't there anymore.

ROMANS: Is there another alternative, though?

BAIR: Fiscal policy, yes.

FREELAND: They're not doing anything.

BAIR: And that's why he's doing this. But the risks -- the risks of what he's doing are -- are much greater than the small benefit.

O'BRIEN: What are the risks?

BAIR: Well inflation for one thing. I think driving asset bubbles in the -- in the -- in developing countries is another. At some point he's going to have to get out of this. The longer they keep interest rates near zero, the more those low yielding assets build on bank balance sheets. When interest rates do start to rise and banks you know the fund would insure deposits with re-prices as interest rates go left.

So the longer he keeps this up, the more low yielding assets can be on a bank balance sheet. At some point interest rates are going to go up. they're going to have the problems that we had during the S&L crisis where their cost, the costs that the interest rates they have to pay to keep the deposits is going to be much less favorable to the low yielding assets they have on the books.

FREELAND: Can I just go back to the inflation point? Because I can see sort of mathematically how maybe we should be worried about it.

BAIR: Right, right.

FREELAND: But realistically with the U.S. economy so weak.

BAIR: Right, right.

FREELAND: Europe even weaker.

BAIR: Yes.

FREELAND: Emerging markets not really go, go right now.

BAIR: Right, right.

FREELAND: Is inflation today's problem?

BAIR: Well in the near term, no. But in the longer term we're still pumping all this liquidity in the system. It's just sitting there on the sidelines now. But once it's unleashed we could have an inflation problem.

And so if it's just sitting there why keep piling more and more money into a system that's awash with cash already. It's just when it is unleashed you are going to have a problem. And then you know the typical tool is to raise interest rates. That they're going to have a problem with the banking sector when they do that.

SOCARIDES: Do you think overall things are headed in the right direction? Are things getting better?

O'BRIEN: Housing market, for example?

(CROSSTALK)

BAIR: Well, the housing market, I think -- well, like he said, delinquencies and defaults are still at elevated levels. There was a bit of bump up in delinquency rates in the August Mortgage Bankers Association report. So I'm not so sanguine. It's this marginally -- everything is marginally improving. But there's still so many unknowns. And there's a lot of shadow inventory that hasn't come on to the market yet.

(CROSSTALK)

FREELAND: (INAUDIBLE) -- Fed doing all of this?

BAIR: Well, the Fed is certainly helping the refinancing activity. And so that's giving them fees. And that helps -- that was the main driver for both Chase and Wells Fargo. So that's helping. And it's helping homeowners a bit. Because they can free up some cash by getting lower interest rates.

There's a lot of media outlets have reported, they're not getting the full benefit of these lower rates. The banks are pocketing a lot of it too.

So that is helping. And I will give the Fed that. But again, that's not sustainable. You can only take interest rates so low, you can only have so much refinancing activity. Listen there aren't -- these aren't originations for new home purchases. You know these are re- fis.

O'BRIEN: Can I ask you a question about Jack Welch? Which is I'm totally out -- I'm dying to get your insight on this. You know after the numbers came out the tweet was this. October -- 5th of October. "Unbelievable jobs numbers. These Chicago guys will do anything. Can't debate so change numbers."

BAIR: No. Well, I think, you know, the BLS, Bureau of Labor Statistics, is directed by a pure staff. They're religious about keeping this stuff insulated from the kind political influence. There are clearly flaws in the way that they measure the unemployment rate. And the household survey is the smaller group. It's typically more voluble than the institutional survey. You're going to see that number going -- changing a lot. And over time they align. But you know --

O'BRIEN: I'm asking about Jack Welch, though.

BAIR: Sorry. I think the broader point, he kind of cleaned it up in the "Wall Street Journal". There are flaws in the way this information is reported.

ROMANS Which is not a surprise.

BAIR: It could be misleading, right. There wasn't any kind of intentional manipulation.

SOCARIDES: The President does not know those numbers until the morning of.

BAIR: That's true, yes.

SOCARIDES: I mean I worked at the Labor Department for a while. And there nobody knows those numbers.

BAIR: No, I know. You know, it's so sad that people -- and I think this is a legacy of the bailout as well -- people are so cynical about government. Nobody trusts anybody anymore. But you can trust the BLS. They don't let --

SOCARIDES: The last people in government you can trust absolutely, right? That's it. The Bureau of Labor and Statistics.

O'BRIEN: That's it. All right. Nice to have you with us this morning.

FREELAND: And it's a great book. I just want to plug the book.

O'BRIEN: It's a great book as well.

(CROSSTALK)

BAIR: You are encouraged to read it. It's wonderful.

O'BRIEN: "Bull by the Horns" is the name of the book.

"End Point" is up next. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome everybody. New report -- one person killed, seven hurt in a hostage situation that took place at a mobile home in Greer, South Carolina. Two of the injured are sheriff's deputies. We're told their injuries are not life threatening.

The suspect is in custody. He was also hurt. There are two children as well who have been in the custody. Police have not identified the victim at this point.

We have just enough time to -- obviously we'll continue to update you on this story as the day moves forward. We'll have more information. We have just enough time to get to one final "End Point". Who wants to take it today.

HOOVER: Plutocrats, do it.

FREELAND: OK. Well, thank you Margaret. My book, "Through the Cracks", is published today. It is about rising income inequality in the world, in the United States.

O'BRIEN: Who's to blame for that.

FREELAND: I think it's an important subject.

O'BRIEN: Who's to blame from rising inequality.

FREELAND: Globalization and technology revolution plus a little bit of politics.

BERMAN: If I buy it can I be a plutocrat.

FREELAND: It might help you. There's a how-to chapter. People always ask me that.

SOCARIDES: It sounds like all you have to do is hang out at the lobby of the Four Seasons from your earlier --

FREELAND: It helps to have a Ph.D. in physics and math.

HOOVER: Do you have an airplane in your driveway on the cover of your book?

FREELAND: That's what I want. That's all I want.

HOOVER: That's what I'd like. An airplane in my driveway.

O'BRIEN: Coming up tomorrow on STARTING POINT, debate previews with Congressman Steve Israel. Former moderator Carol Simpson is going to join us and model Tyra Banks. Also Mika, pop star, is going to be with us. Big, big show tomorrow.

BERMAN: Mika's great.

O'BRIEN: CNN NEWSROOM with Carol Costello begins now. Hey Carol, welcome back from vacation.