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ERIN BURNETT OUTFRONT

Markets Tank: Dow's Worst Day In A Year; Pressure On Obama to Avert Fiscal Cliff; Soul Searching in the GOP; Nor'easter Slams Sandy Storm Victims

Aired November 7, 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, the Dow dive, are investors really panicking over four more years of President Obama or is there something else that's causing the fear?

And the GOP licks its wounds and starts pointing fingers. Here with us tonight, one of the rising GOP stars and a possible 2016 candidate.

And another nor'easter bearing down on the region still recovering from superstorm Sandy. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, markets tanked. The day after President Obama wins a second term, the Dow has its worst day in a year. The Dow finished the day down nearly 313 points.

For the first time in three months, it closed below 13,000 and when you look at the broader markets, the S&P 500, the Nasdaq, all were down 2.5 percent for both of those.

So is the election really to blame? OUTFRONT tonight, Michael Farr, author of "Restoring Our American Dream, The Best Investment." Michael, great to see you, always good to see you.

Now I know there were a lot of -- markets often go down on the day after an election and they're worried about the fiscal cliff and they're worried about Europe. But how much of this had to do with the re-election itself.

MICHAEL FARR, AUTHOR, "RESTORING OUR AMERICAN DREAM": You really can't tell. Certainly, we had a couple of point run-up prior to the election and then of course, this morning, I think without the distraction of all of the political punditry and bluster, we see markets all of a sudden come back down.

Perhaps investors confronted the fiscal cliff and what's going on in Greece. They need another $40 billion. China's slowing and of course, we've got 2 percent GDP growth, fairly tepid --

BURNETT: You know, the credit rating agencies, the ones that downgraded this country and we couldn't make a deal last time around. Fitch was one of them just hours after the president was re-elected. Fitch said, look, if they don't avoid the fiscal cliff, we're going to face another downgrade. Now I know some people are complacent. They say look, the first downgrade, it still hasn't caused interest rates to surge. Why should we worry about it, but should we be?

FARR: I think we have to be. I mean, we saw the rates actually rally and go lower after the last debt downgrade and today, even though things look worrisome, we saw the 10-year treasury bond go even lower like 1.62 percent, absolutely amazing.

The Federal Reserve is targeting inflation close to 2 percent and the government saying the government's willing to pay 1.62 percent for a 10-year piece of debt. So investors are very skittish and looking for a return of capital rather than the return on capital.

So, yes, I think it continues to be a big deal and we have to stay focused. And these problems have to be addressed with Congress showing real leadership. Time's running out and perhaps markets were reacting more than that.

You know, all the polls and sort of in trade still showed President Obama ahead. We don't have a whole lot of change day-to- day. Shouldn't have been a lot of reason for shock from where I sat.

BURNETT: All right, Michael Farr, thank you very much. He points something out, but I think it is important to remind everyone watching. The market expected the president to win. It doesn't drop on something it expects to happen, so maybe it was just a realization that fiscal cliff price is really upon us.

Just moments ago, President Obama arrived back at the White House for the first time since -- with his wife and his two daughters. Earlier today, aides were quick to point out that the president had already called key congressional leaders in both parties to talk about his agenda and finding ways to work together to avert the so-called fiscal cliff.

House Speaker John Boehner responded this afternoon.

(BEGIN VIDEO CLIP)

REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: And for this to work, we need to plan for a serious process. Focus on substance, not on the theatrics. It will require week of work rather than a weekend of photo ops.

It won't happen around a campfire at Camp David or in a secret room of some Air Force base or as much I'd like over 18 holes of golf. I think this is going to take time, but if we're all striving for a solution, I'm confident we can get there.

(END VIDEO CLIP)

BURNETT: Representative Chris Van Hollen, a Democrat from Maryland. He is a ranking member of the House Budget Committee. He was a member of the Super Committee on Deficit Reduction. He knows a lot perhaps more than anybody with the president in terms of the president's plan. Good to see you. It's really nice to see you in person.

REPRESENTATIVE CHRIS VAN HOLLEN (D), MARYLAND: It's great to be here.

BURNETT: We're all running on fumes and now, we have to get on those fumes and solve this problem because the market is right. It is a crisis that has to be dealt with. What I don't understand is, a little change in the Senate, but essentially this is the same thing that we had before. So deal failed then why is it going to happen now?

VAN HOLLEN: Well, there are a couple of things. First of all, a lot of the Republicans in Congress have been focused primarily on trying to defeat the president. Well, the president was just re-elected so maybe we can move beyond that objective.

The second is the structure of the situation. I mean, the fiscal cliff creates big risks. It also creates opportunities. Because not resolving the fiscal cliff will create problems for the country.

We need to focus on two things. We need to accelerate the recovery and we need to act now to come up with a balanced, long-term plan to reduce the deficit.

BURNETT: All right, obviously, those are -- how we do that is the big question. Now, John Boehner had something to say today about revenue. By revenue, everybody, we're talking about, well, that's the whole point. There are different things we could be talking about. Here's John Boehner.

(BEGIN VIDEO CLIP)

BOEHNER: There will be many who will say that with the election over, we should confront the first of these challenges by letting the top two tax rates expire and pushing the sequester off. It won't get us out of the problem and it will also hurt our economy. Because the American people expect us to find common ground, we're willing to accept some additional revenues via tax reform.

(END VIDEO CLIP)

BURNETT: All right, via tax reform. Now, when I hear that and I hear John Boehner say it, I don't hear I'm OK letting taxes go up on some people. I hear I'm OK closing loopholes and deductions where some high income earners may pay more than others. Is that a deal you could work with?

VAN HOLLEN: You just put your finger on the key issue. The question is, what is Speaker Boehner saying? Is he really talking about a balanced approach or is he talking about what he used to talk about and Republicans have claimed, which is another round of tax breaks for very wealthy people will somehow trickle down, magically boost the economy so much that it will pay for itself and not increase the deficit. We know that doesn't work. And if that's what Speaker Boehner's talking about, then really, it's not going anywhere. It's not a balanced approach. Now, if he's talking about what we call genuine congressional budget revenue, that's a different story and if that's the case, I'd love to see his proposal.

The president has put his proposal on the table for revenue. Let's see Speaker Boehner's revenue proposal. He talks about wanted to do this in the open. Let's do it. Let's see it.

BURNETT: Right, well, of course, he and the president had a deal and you know, fingers can point all kinds of ways, but that deal failed. So I mean, let's hope they can. But let me ask you this, who's going to take the lead in negotiations on your side? Is it going to be somebody who has been rather polarizing like Nancy Pelosi or someone else?

VAN HOLLEN: Well, I should say and I think this has been well reported that during the talks between the speaker and the president, Leader Pelosi was willing to support whatever compromise they came up with.

But I think that remains to be seen exactly who is going to be the negotiator or negotiators. Obviously, the White House has to be engaged and I think the president will make clear as he already has in his acceptance speech last night that we need to compromise.

We need to come together on these issues. It is important to know the president does have a plan on this issue. It's been sitting in front of the Congress for a year. Republicans keep saying he doesn't have one. It's just they don't like the president's plan he's put forward. It does take the balanced approach.

BURNETT: Which plan is this?

VAN HOLLEN: This is the plan to reduce the deficit and eliminate the sequester over a 10-year period by $4 trillion through a combination of cuts and revenue. And he's very clear on how he generates --

BURNETT: But he didn't back Simpson-Bowles, which had the same plan.

VAN HOLLEN: He did not back all the specific recommendations to Simpson-Bowles, but the framework of his proposal, which is a mix of cuts and revenue, is much closer to Simpson-Bowles than anything the Republicans have put on the table.

BURNETT: So, will the president negotiate this himself? That's the question because -- I mean, part of the reason that a lot of people were upset with him, part of the reason that the country was not split in half, but was split on this election was because it seems other people got the job of doing that actual nitty-gritty during the negotiation. Is that going to change this time?

VAN HOLLEN: I think the president will be directly involved. He was in the conversations with Speaker Boehner and I would say that while this was a kind of close election, the reality is the president had the decisive victory and the president is very clear on this point that this was a choice election.

That's the one thing he and Mitt Romney agreed on, right? You can be sure that if Mitt Romney and Paul Ryan had won, they'd say they have a mandate for imposing the Ryan/Romney budget. The president talked about this issue.

He says we need to ask higher income individuals to pay more to generate revenue, as part of the solution, part of the solution along with cuts, to reducing the deficit. So it's not as if this hasn't been an important part of the campaign argument. So we'll have to see how this goes.

BURNETT: All right, well, I'll look forward to talking to you a lot more about it because you know what investors are telling me, you got to go about four times bigger than you're even thinking of going.

VAN HOLLEN: I think the framework of the bipartisan commission is exactly right and it would be great if our Republican colleagues would adopt that. As you know, people like Grover Norquist have said that's just a subterfuge to raise taxes on the American people when in fact, it's a balanced approach to getting the job done.

BURNETT: All right, well, good to see you as always. Appreciate it.

Still to come, the keys to victory, how the president won and the voters who turned against the Republican Party. Tonight, there are warning signs for both sides. John King is at the magic wall. The man does not sleep. He is back.

Plus, after last night, what is next for the Republican Party? The rising star in the party, Virginia Governor Bob McDonnell is OUTFRONT next.

And round two, a nor'easter packing strong winds, rain even snow slamming the battered northeast. People who just got power back after a week have lost it again.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT, the GOP in disarray. Republicans didn't only lose the White House. They did lose three Senate seats last night also.

Senator John Cornyn, the chair of the group responsible for getting Republicans elected to the Senate admitted early this morning that his party needs to reassess and quote, he said, "while some will want to blame one wing of the party over the other, the reality is candidates from all corners of our GOP lost tonight. Clearly, we have work to do in the weeks and months ahead."

So, how does the Republican Party regain its footing? Virginia Governor Bob McDonnell is the chairman of the Republican Governors Association. As we said rising star in the party and we appreciate you taking the time to join us tonight, Governor.

So how does the Republican Party go about recalibrating? I mean, it's fair to say that a couple of days ago, so many of the Republican Party really believed they can win this and when you look at Electoral College, look at your state, it wasn't even close.

GOVERNOR BOB MCDONNELL (R), VIRGINIA: It was a very disappointing night. The president and his team deserve a lot of credit for running a very organized campaign and they did a good job getting their votes out. It was closer this year, two and a half points in Virginia versus seven last time.

But we did win 8 out of the 11 congressional seats and picked up 30 governors now for the Republican team, which is the highest level in 12 years, maybe another in Washington State that is still counting.

So there were some bright spots, but overall, I agree. We've got to do better. It's a combination of tone and message and reaching out to new and minority voters and making sure that we do a better job on the ground and we got beaten last night.

BURNETT: Well, gracious to come out and directly admit it, although you are right on the governor's side. I know it's sort of a record for Republican governors there. That was a positive point.

But one of the wings that Cornyn was referring to within the GOP was the Tea Party and some big name Tea Partiers lost last night. Joe Walsh lost Illinois, Josh Mandel lost in Ohio where I spent the night last night.

Richard Mourdock in Indiana, now obviously Mourdock had a specific situation there with the comments he made on abortion, but I think the question is, is the Tea Party still relevant? I mean, that was part of the reason your party rose, but is it now become an albatross?

MCDONNELL: Well, Erin, what the Tea Party and other conservatives that believe we ought to reform entitlements and get our country out of debt and back to a balance budget, I think that's pretty a mainstream idea.

They helped me immensely to an 18-point victory in Virginia three years ago. I think it is how we organize. It is how we deliver the message. We've got to be a lot more inclusive and open and energetic and wanting people to join our team by expressing why these conservative values are good people of all races, colors and national origin.

We've just got to do a better job with that. So, I think it's a lot of energy that still helps us immensely at the polls and getting people out. We've got to organize on the ground last night.

BURNETT: All right, out organizing the ground is how you described it, but Tea Party Patriots, co-founder, Jenny Beth Martin, had this to say about Mitt Romney. Here she is.

(BEGIN VIDEO CLIP)

JENNY BETH MARTIN, TEA PARTY PATRIOTS NATIONAL COORDINATOR: We wanted a fighter like Ronald Reagan. What we got was a weak, moderate candidate, handpicked by the beltway elites and country club establishment wing of the Republican Party. The presidential loss is unequivocally on them.

(END VIDEO CLIP)

BURNETT: What's your response to that?

MCDONNELL: Well, I respectfully disagree. This is the way the process works. We have lengthy primaries. We have 20 debates and the people chose. This is the way our party works.

Listen, Mitt Romney is an incredibly smart, talented, decent guy who worked very hard and I thought was a good messenger for our fiscal and social conservative cause. Listen, this was a dead heat going into the election.

In fact, two weeks ago, before the hurricane, Erin, we were actually up by three to five points in swing states and we thought we were heading towards a victory, so I'm not going to recriminate.

We've just got to realize what he did right, what we did wrong, improve and do a better job of delivering the message and organizing on the ground. But hand it to the president for running a good closing argument and a good ground game.

BURNETT: So what does someone like you think about 2016? Obviously, you're one of the names that could be running. What are you focusing on then? Is it really focused all the time on reaching out on immigration and to Hispanics?

MCDONNELL: Well, I think it's 24 hours after the polls close, Erin. So I'm not thinking about 2016. I'm thinking about being governor of Virginia with a legislative session coming up, but clearly I think the future of the party is with Republican governors.

Like I said, we have 30 -- we may have 31 when Washington State finishes counting on Friday with Rob McKenna. And I think that the leaders that are in our party that are conservatives that are CEOs of the states that are balancing budgets without raising taxes, not making excuses. Getting jobs created.

This is where the message is going to come on how we can govern better than the way Washington's governing now with Democratic ruling, so I think we're going to see more of those leaders rise up.

BURNETT: Governor McDonnell, thank you so much for your time, sir. We appreciate it.

And still OUTFRONT, the president got re-elected on a coalition that did not count on white men. Is that group's influence gone forever?

And the northeast already reeling from superstorm Sandy. Now, being hit with another powerful storm literally at this moment at its peak. We'll be back. (COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, hit again, a powerful nor'easter as it's called bearing down on the east coast tonight, 60 mile an hour winds, wintry mix, snow in many places, coastal flooding.

It's slamming some of the areas hardest hit by Sandy 600,000 in the New York/New Jersey area have no power and no heat, 8,000 are in shelters after their homes were destroyed after Sandy.

Many today who had just gotten power back lost it again. Last week, I went to see some of the most devastated areas on Staten Island where CNN's Rob Marciano is live tonight with the latest.

Rob, I know you've spent the day there. What are the current conditions? It doesn't look good.

ROB MARCIANO, AMS METEOROLOGIST: No, it doesn't. Can you believe this? I mean, this is a week after a tropical system or nearly tropical system moved through this area and crushed it as you know from Jersey through Staten Island area across Queens, Manhattan and Long Island and Connecticut.

Now, it's coming down almost blizzard conditions. We've had wind gusts on eastern Long Island and Buzzard's Bay across Massachusetts of 76 miles an hour. We've got over a half of foot of snow in some places.

We've got probably three inch, maybe even four inches snow on the ground. You know this time of year, if it's sticking on the ground. It's coming down pretty hard because the ground is so warm so one thing that is good is that we don't have a surge like we were afraid of.

So this is an area that had water up and over my shoulders when Sandy came through, devastating floods to this community. Certainly, without power and heat, cold and snow and wind tonight is not boding well for these folks.

BURNETT: And Rob, how are people coping? Because I know so many of them -- they didn't have anywhere to go and when they were given an alternative, they didn't want to leave because they were worried about looting or worried about their belongings. So where are people going?

MARCIANO: Well, a lot of people are hanging tough. There's Diane, Vincent and Anthony making the best of a bad situation. Nice looking snowman there guys. Let's go inside and show what their -- sadly what the inside of their house looks like.

They've got -- inside of the house out here to dry it out. That's how this entire neighborhood looks like. People just pulled everything out of the inside to dry things out.

They've ripped off the floor. They've ripped off the sheet rack. They only have lights in here because they're plugged into our satellite. They've been without power now and heat for over seven or eight days now.

Finally, cranked up the indoor heater there, we have carbon monoxide monitors going just in case. They're a little bit nervous about that, they're hanging tough. They're sleeping upstairs on the same bedroom. And this -- there's a lot of people in this neighborhood doing the same thing -- Erin.

BURNETT: All right, well, images -- great powerful images. Thanks so much, Rob Marciano.

OUTFRONT next, was Jeb Bush right? President Obama won the overwhelming support of Latinos, the fastest growing segment of the American population. Is the GOP doomed without them?

Plus, pot, how marijuana helped the president win.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT. We start with stories we care about, where we focus on our reporting from the front lines and we begin tonight with the director of a controversial anti- Islam film who has been sentenced to a year in prison for probation violations.

He admitted to charges which accuse him of using an alias that violated the terms of his probation from a 2010 bank fraud case. Yousef is the filmmaker behind "Innocence of Muslims," the movie that was blamed by some for sparking riots throughout the Muslim world and was initially blamed for the attack in Libya.

The Greek parliament has approved a new set of austerity measures. Greek leaders needed to pass $17.2 billion program to try to get more bailout money. The package cut spending and pensions. It raises taxes and the retirement age.

As many as 70,000 people took to the streets of Athens to protest the measures. Some threw Molotov cocktails which forced the police to fight back with tear gas. One analyst tells us Greece is being asked to take on a lot of fiscal pain, he says we'll see a lot more stress in the region over the next couple of weeks. Keep in mind -- round after round of austerity and it still seems getting worse in Greece.

Former Penn State University President Graham Spanier was arraigned today on charges he tried to cover up allegations that Jerry Sandusky was sexually abusing boys on the school campus. Among the charges Spanier faces: obstruction of justice, endangering the welfare of children and perjury.

CNN contributor Sara Ganim reports Spanier's bail is set at $125,000. But it is unsecured, so that means he doesn't have to pay it unless he actually fails to show up for a court date. He will not be allowed to travel outside the state without the court's permission.

Well, after meeting with the president of Burkina Faso, one militant group in Mali is urging other rebels to start a political dialogue and it's an important group, at least from our understanding when we were covering the story on the border. The armed group Ansar al-Dine is one of many to have taken over the northern part of Mali and now, representatives from that group are calling for a halt of hostilities in the region.

What does that mean, though? Here in the U.S., State Department spokesman Victoria Nuland today welcomed the announcement that says the group has only talked the talk and need to walk the work and work on a deal.

Well, it's been 461 days since the U.S. lost its top credit rating. It is time to ask what are we going to do to get it back because the election is over. Congress and Mr. President, the next seven weeks, you better do something.

And now, our fourth story OUTFRONT: President Obama won re- election last night despite only getting 39 percent of the white vote, 20 percentage points behind Romney. Other crucial voting blocks carried the president to victory and that's raising major red flags for the Republican Party today.

John King is breaking down the numbers.

And, John, I know, you know, Democrats made major gains among Latinos, women, suburban voters, all of those things. I want to break each of those down. Let's start with Latinos because I know there was it was double digit in terms of Latino vote.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Giant. This is a generational problem for the Republican Party if they don't figure it out. You mentioned the white vote, giant slice of the electorate, 72 percent. Let's call it red because Romney won it.

But look down here, 13 percent African-Americans. That's stable from 2008. The president kept that part of his coalition intact. He won more than nine in 10 African-American votes.

As you know, Erin, for the first time nationally, Latinos hit double digits. And look at this, 71 percent, even higher than his number four years ago, 71 percent of the Latino vote nationally goes to President Obama. That's nationally.

Now, let's swing this over and look at it by states.

In Nevada, the white vote was down because why? In Nevada, the Latino is 19 percent. Nevada used to be a swing state. Look at this, 71 percent again in the state of Nevada, one of the key battlegrounds.

Let me just slide this over and give you one more example. The state of Colorado, once a red state, now a purple state. The Latino vote now double digits and again, when you bring it up, 75 percent -- 75 percent.

Let's look over here and I'll just show how this plays out. The president wins Nevada. Once a swing state. Wins Colorado, once a Republican state. Wins New Mexico, we didn't talk about that last night. This used to be one of the classic swing states in American politics. We don't even think about it anymore, right? And he's probably going to win Florida. They're still counting there.

Why do I circle those? Watch this. I'm going to slide this little barrier. Here come across, the darker the colors, the higher the Latino population. Look at these states, not even California, that's been a Democrat state forever.

But Nevada, Colorado, New Mexico, Florida, you can find other places as well up into the Midwest. If the Republicans don't solve this problem, it's not just four more years of Barack Obama, this is a crisis for the Republican Party.

BURNETT: It certainly is. We're going to talk much more about Texas in a bit because obviously I see that orange there.

What about women? Because I know this war on women fight, a lot of people wondered whether it would be effective, but when poll -- when it actually happened --

KING: In a word, yes.

BURNETT: Romney did not make up that gap again.

KING: It was effective. Come back over here, we'll play the exit polls. We'll move this over. Let me slide this and went out of the way.

Nationally, less than half the electorate is men. Governor Romney wins it. But look, this is not rocket science -- 53 percent of the electorate are women. You see it's blue. They're going for President Obama.

If you're getting 55 percent among the biggest chunk of the electorate, guess what? You are well on your path to victory. Just there.

And again, let's play it out. Let's just not talk nationally. Let's move it over. You go through the battleground states. A closer split here, but the president won both men and women in Colorado. But you start getting here, 51 percent.

Again, it used to be a classic swing states. You say that's not much. He's winning in states Republicans used to dominate and then you come over here. This is the mother of all battlegrounds, welcome back from Columbus -- 52 percent of the electorate in Ohio are women and again, the president gets 55 percent.

And so, the combination of the diversity of the Obama coalition, college educated women particularly, Africans and Latinos, you add it up, simple math. As Bill Clinton said at the Democratic Convention, sometimes it's just arithmetic.

BURNETT: In that speech that was lauded by all. Now, there was another area, though, that is traditionally Republican, the suburbs, always been seen that way. But that also shifted.

KING: It shifted and let's go back over this map and let me turn off the Latino demographic that we'll do a little here and turn this up. If you look at this close presidential election, if you go back to when George won in 2000, when George Bush won in 2004, close presidential elections in American politics won the suburbs.

You see, this is the 2000 election. You see George Bush, a little back in time here, winning in the Denver suburbs, right? You see there, the president wins, the Democrats win in downtown. That's Senator Kerry in that year.

But now, let's come forward to 2012. Look at all this area. It's blue. In the key swing states, the Democrats dominate in the suburbs.

Let's come back over here, you come up to Ohio. And let's make sure, now Mitt Romney did a good job. He won Lake County, which is a trouble spot, but that's a big suburb just outside of Cleveland, he won there. But look down here around Columbus. Oops, sorry. Let me hold this down.

Outside of the Columbus City where you were in, the president wins in the suburbs. Down here in Cincinnati and around here, this has to be for the -- look at this election. Let's go back to 2004. See Hamilton County, that's Cincinnati and suburbs around it.

When it's red, Republicans win the state. When it's blue as it was in 2012 and as it was in 2008, the Democrats carry it. Why? Because of the suburbs.

And the suburbs is one of reasons that Pennsylvania, Romney made a play there in the end, look down here around Philadelphia. Let's put the telestrator back on, look down here on Philadelphia, all the close in suburbs there.

You have to go way back in time. That used to be Republican territory, but, look, in 2012, Obama wins it. Four years ago, he won it. In 2004, he carried it as well. This is why this has been a Democratic state for so long.

You have to go back and back and back. You have to go back to George H.W. Bush to when Republicans were competitive in the moderate suburbs around Philadelphia. Again, Latinos, African-Americans, it's been a long time crisis. Suburbs, especially suburban women, in big states like this, where the suburbs are key, the Republicans, Erin, have a problem.

BURNETT: All right. John King, thank you very much.

Well, if Democrats making such major gains among Latinos, among women, among suburban voters, what can the GOP do to make up ground? OUTFRONT tonight, former White House deputy press secretary Bill Burton, also a senior strategist with Priorities USA, the super PAC that supported President Obama. I'm sure you're going to be glad not to raise money for a while.

BILL BURTON, FORMER DEPUTY WHITE HOUSE PRESS SECRETARY: I am.

BURNETT: So, that's a terrible job.

And Republican strategist Leslie Sanchez, and our chief political analyst, Gloria Borger.

Leslie, let me start with you because when John started out talking about the Latino vote, I mean, these numbers are pretty shocking and pretty overwhelming. Bush in 2004, 44 percent of the vote, of the Latino vote. McCain, 2008, 31 percent. And now, Mitt Romney at 27 percent.

What happened to the inroads made by George W. Bush?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Well, there's no coat tails. With Hispanics and GOP, they really don't exist. Latinos vote for a candidate, not for a party, because for many in the Latino community, the Republican brand is very tarnished. It's a community that's seen as somebody -- it doesn't care for the Latino community or those interests, which are all these very false stereotypes.

But, Erin, I think you got to look at the fact, over the last 40 years, Republicans earned 30 percent of the Hispanic vote. No more, no less. That's about the average. And we understood if we do not get up into the 37 percent, 38 percent, 39 percent Hispanic support, the Republican Party will fail to win national elections from probably 2012 on.

BURNETT: I mean, that's a pretty incredible thing.

(CROSSTALK)

BURNETT: I don't know if you saw John King putting up that map. It's a densely populated areas by Hispanics. I mean, there's a state that stands out there. That state was Texas. Are we now looking at a point where Texas could be something that you could make a play for as a Democrat?

BURTON: I think Texas is no doubt going to be a purple state, either in 2016 or in 2020. It's just a place where the way the population's changing is just going to be better for Democrats. Now, what Mitt Romney failed to do during this election is make a strong case to Hispanic voters why they shouldn't feel a way about him they suspected watching him run to the right of Rick Perry in the primary.

He got into the general election. He never made a case to Hispanic voters. No real money was spent on Hispanic outlets by the Romney campaign. I think as a result, he really had no place to grow his support. SANCHEZ: There's two things. I think a tremendous amount of money was put into this election for Latinos, by comparison to what they should be doing on both sides, not all where it should be. In Texas, I'd have to argue. Ted Cruz, the first Hispanic senator coming out of Texas, Democrats would like to believe the demography is destined to lean to the Democratic Party as Latinos grow, they're going to naturally move in.

Majority of Latinos will be Democratic, but there are many split ticket voters. Many conservative Democrat Latinos who can't find a place in the Republican Party with the right candidate and right message.

BURNETT: And there's people like Marco Rubio who said earlier this week on this show, before the election even happened, that the Republicans need to reach out more.

Gloria, what about the flip side of this, though? You know, three quarters of the voters still are white in this country and the president does -- you know, really did not do well particularly among white men. Is that a red flag for the Democratic Party or just given the view that demographics maybe destiny, it just doesn't matter?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, you know, it depends on which way you look at it. I mean, they've always known they have a problem with white men, particularly because of the economic issues. But when you look at the question of who cares most about my problems, you know, the president overwhelmingly did very well and a lot of those people are white. Blue collar working men, which is one of the reasons he won in the state of Ohio.

I think the larger problem quite frankly, is for the Republican Party because you see that the percentage of the white electorate shrunk, right, from 74 to 72 and I think you know, that is a problem for Republicans because they need to start reaching out. You're just talking about Latinos.

You know, that's a growing community in this country. And I think you know, if the Republican Party doesn't wake up and say, OK, you know what? We need to figure out a way to do immigration reform because there is no reason we should be alienating minorities who, as Leslie points out, might naturally be with us, right?

(CROSSTALK)

BORGER: -- larger problem on the other side.

BURNETT: Bill, my question on this, when you look at the Hispanic vote, so many ways, it seems it should be natural for some of them to vote GOP.

BURTON: Yes.

BURNETT: Family oriented, I mean, they are conservative values there that might fit with that party.

BURTON: There are ways that Mitt Romney could have made a case, that he could have dovetailed into the Hispanic community.

But, you know, what Gloria said, I actually am concerned as a Democrat that the demographics are not great for us going into 2016, because the next candidate on the ballot is not going to be Barack Obama. We're not going to get the kind of margins we got with the African-American community likely. We're not going to have a Republican candidate who only gets 27 percent with the Hispanic community.

So I actually think that Democrats do find a way to recognize there is an issue with white voters and figure out how to reach out and find the language that works there.

BURNETT: You are the only white male in the conversation.

SANCHEZ: He makes a really interesting point because if you look at the Republican candidates who are winning, especially the ones winning statewide, Marco Rubio, or Susana Martinez or Ted Cruz, they're winning across the board. Not in minority/majority districts. They are winning with all specters of the voting electorate.

That's significant for the Republican Party. It points to the fact we're building a back bench. What our future leaders are going -- Luis Fortuno -- what our leaders are going to look like in the future. That's the bright side.

On the negative side, you have a lot of the young Latinos who consistently believe that the Republican Party doesn't connect with them in any way. That's a whole generation we cannot afford to lose.

BURNETT: Final word, Gloria.

BORGER: Erin, here's the problem. You know, in the end, Mitt Romney did not get through with his economic message and, you know, as you go through this primary season and whole election season -- as you know, Erin, Mitt Romney in the end was sort of starting to do pretty well on who's better able to handle the economy.

BURNETT: Right.

BORGER: As you saw in the exit polls last night, the president was at parity with Mitt Romney on who's better able to handle the economy. But he did so much better on who cares about my problems and who understands the middle class and I think the Republican Party heading into the discussions we got over the fiscal cliff and the question of who's going to solve the debt crisis, who's going to solve the financial crisis, who's going to get us more jobs -- I think that's an issue the Republicans in Congress now have to think of because that's where they failed in the election.

BURNETT: All right. Thanks so much to all three. We appreciate it.

And OUTFRONT next, it wasn't just the minority voters or women who helped the president secure four more years in the White House. Remember Karl Rove's whole thing? Put a little ballot initiative that riles up your base on the far right. Well, they did it on the far left and we'll tell you what it was.

Plus, Iran could become the biggest challenge the president faces in the next four years. What my sources are telling me about Iran's reaction to Obama's victory, OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: We are back with tonight's "Outer Circle" where we reach out to our sources around the world. And we begin with reaction to the president's re-election in the Middle East, focus of a lot of our coverage here on OUTFRONT.

The influential Egyptian blogger Sand Monkey tweeted, "Obama keeps his house and job. Congratulations, B."

You know, we saw this last night during the, as the results were coming in. All of my tweets coming in from that part of the world. There was a lot of excitement.

One of my sources in the region told me the whole Middle East wanted to vote, all excited about Obama. Important to note this is someone who said they would be mostly hit by higher tax rates and happy to pay them for the privilege of living in the United States of America.

But the pressing issues still loom large, perhaps none more than Iran. I asked how our Reza Sayah how the results will affect Iran's nuclear program.

(BEGIN VIDEO CLIP)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Erin, it didn't matter who won these elections. Iran had made it clear that it planned to press forth with its nuclear program, no matter what. Mr. Romney, of course, had attacked Mr. Obama, saying he had failed to stop Iran's nuclear program, but never said how he was going to do things differently.

This nuclear program, a complicated issue, because Iran has tied it to its national pride and identity -- a way to show the world it won't back down to Washington. Sanctions don't appear to be working and no one suggesting attacking Iran anymore other than some Israeli leaders.

Many say what will attack this deadlock is a deal where both sides can say they gain something. But how you do that? Does Washington concede something? If so, what? Important questions Mr. Obama will mull over in his second term -- Erin.

(END VIDEO CLIP)

BURNETT: And thanks to Reza.

And now, our fifth story OUTFRONT: Turning the social tide for the first time in history. Voters in four states voted to legalize same-sex marriage last night. In Colorado and Washington state, voters okayed the legalization of marijuana. Well, that will set the stage for a standoff with the federal government. Maybe the president will go along with it.

All right. But then these ballot measures. That's the crucial question because Colorado was a swing state. We all know that up for grabs. Voters there supported the marijuana measure by 55 to 45 percent, and the president eked out a 4 percent win.

He also won Maryland, Washington and Maine. Now, obviously, not all of those swing state.

OUTFRONT tonight, CNN contributors John Avlon, Erick Erickson and Sasha Issenberg, author of, "The Victory Lab: The Secret Science of Winning Campaigns".

So, Sasha, overall, you know, Karl Rove was credited with this on the Republican side. Put some ballot measure that people care about. It will get them in the poll, it will get your guy elected.

Did it work in Colorado, do you think?

SASHA ISSENBERG, AUTHOR, "THE VICTORY LAB": I don't think there was a sort of organize efforts to put this on the ballot. But we do see from the quick look at the exit polls that there was a slightly higher turnout among 18 to 29-year-olds in Colorado than there was in the rest of the country. You know, campaigns are always, one issue is on election is tends -- campaigns tend to assume that the presidency, the top of the ticket drives turnout.

This is a type of issue where I think you could see that there are people who would be brought to the polls because of their, you know, interest, especially young voters are interested in pot who might not be sort of part of a typical sort of mobilization effort from campaigns. Not people who would get a campaign's attention, but can be motivated to come out nonetheless.

My bet is we'll know a little bit more about what exactly happened there as the numbers come in.

BURNETT: Erick, Karl Rove's strategy was a ban on gay marriage, put it on 11 states. George W. Bush won nine of those 11 states. Now, obviously, here, you know, some of the states we are talking about on the gay marriage issue were not swing states.

I mean, let's talk about Colorado. It wouldn't have turned the whole election but --

ERICK ERICKSON, CNN CONTRIBUTOR: I actually think what's happening when you look at the exits and you break it down --

BURNETT: Yes.

ERICKSON: -- what happened is Barack Obama's wave helped to push those issues. In fact, I think it was Minnesota where in 2009, the same issue was on the ballot and it went down. And it's on the ballot this year with Barack Obama's wave, I think you have to be careful analyzing these things. It really looks like in these states, it was a Barack Obama wave that get these passed, not these issues getting Barack Obama nominated.

BURNETT: And what about gay marriage, John Avlon? I mean, this is pretty overwhelming. In Maine, 53 percent said yes, 47 percent said no. In Maryland, 52 percent yes, 48 percent no.

How significant is that?

JOHN AVLON, CNN CONTRIBUTOR: It's very significant. I mean, Maine was the state in 2009 that actually voted this down. So, you got a real bellwether there.

You know, Eric is right to the extent that a presidential election, you are going to have a higher turnout. So, ballot initiatives are more likely to get a representative sample. What we've seen in the last couple of years on same-sex marriage, marriage equality, is it's hitting a tipping point, a narrow majority of Americans supporting it. Really, sort of along those lines 52-48.

So, I think that and also the marijuana legalization in Colorado, what you saw is that older voters not supporting it, younger voters were. So, you're looking at a generational change.

ERICKSON: Stunning.

AVLON: I know, stunning. But, you know, it is significant to this extent. What these ballot initiatives are doing, it is showing where we are going as a country. It could be good news for Republicans if they identify more with the libertarian roots, but there are changes afoot on both marriage equality and marijuana legalization that are going to be more normal down the line.

BURNETT: Erick, what do you do about that? Because these are issues in this campaign that were front and center? I mean, the whole flat party platform on Republican Party on abortion being another issue when most Americans support exceptions. What's the party do?

ERICKSON: I don't know what the party does at this point. I think they have to assess it. I would say this -- it looks like, you know, you said 52-48. The interesting thing about the issues in these states particularly gay marriage, is that it wins at the polls and has failed at the ballot, except this time.

AVLON: Right.

ERICKSON: And what I really think this is, is Barack Obama's voters going out to support it. Were they on the ballot in 2014? Maybe not because the turnout won't be so high.

So, social conservatives though are looking at these and they are saying, at least with gay marriage, this is happening at the polls and not happening by judges.

BURNETT: And, Sasha, you study how campaigns target voters based on these issues. What are the next things or they should be pushing this. You know, Eric is raising the question across more states? Especially coming midterms?

ISSENBERG: Yes, I mean, I think there will be always interest in using sort of out of the box issues. The candidates don't necessarily engage in. But it can change the composition of the electorate. And I think Democrats are particularly interested.

You know, one of the things that Bill mentioned in the last segment is that Democrats are going to have to figure out how to run for office without Barack Obama at the top of their ticket.

BURNETT: Right.

ISSENBERG: And that means they're going to have to find new ways to bring minorities and young people into the process where part of their 2008 coalition, part of their 2012 coalition, but still are not really habitual voters. And my guess is that if they can find social or cultural issues that can help motivate those voters and connect with them, that they'll look at them.

ERICKSON: Democrats in Michigan tried this as well with a union ballot to boost union membership. It turns out that voters rejected it. So, they still have to be careful what they put on the ballot.

BURNETT: Right.

AVLON: People are smart. Direct democracy.

BURNETT: People are smart. All right. Tanks to all three.

And OUTFRONT next: so the campaign is finally over. And you know, we've all been saying, oh, we are so exhausted. We are glad it is over. You know what, we are going to look back at some of the other things that candidates wish you would forget but you won't.

(COMMERCIAL BREAK)

BURNETT: The very long campaign season is finally over. And as happy as we are to see it go, we will miss the ups and downs of the campaign trail, because sometimes it seems both parties would say anything, anything. Other times, it was like they didn't know what they were saying at all.

(BEGIN VIDEO CLIPS)

UNIDENTIFIED FEMALE: You said you had run a two hour and 50 something marathon. It turned out that, of course, it was over four hours.

REP. PAUL RYAN (R), WISCONSIN: I'd just lost perspective on what normal times are.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Folks, I can tell you and I have known eight presidents. Three of them intimately.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Good morning y'all. I like grits. I love Big Bird.

BIDEN: There's never been a day in the last four years I've been proud to be his vice president, not single day.

ROMNEY: I'm not familiar precisely what exactly what I said but I stand by what I said whatever it was.

BIDEN: A three letter word: Jobs -- J-O-B-S, jobs.

ROMNEY: Join me in welcoming the next president of the United States, Paul Ryan.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Stand with three proud words: made in the USA.

(END VIDEO CLIPS)

BURNETT: Hey, you know, that would have an interesting ticket, wouldn't it? Romney/Biden, I haven't thought of it that way.

All right. Thanks so much, everyone. Get some rest. Have a good night.

"ANDERSON COOPER 360" starts now.