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ERIN BURNETT OUTFRONT

Edging Toward The Fiscal Cliff; $6 Billion Later And No Progress; Iran Fires On U.S. Drone; The Growing Pot Business

Aired November 8, 2012 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, the silence is deafening. With the $6 billion election behind us, the fiscal cliff is job number one, right? So why are our leaders right back to stone walling.

Israel's leaders challenge the president to be tougher on Iran now that he's re-elected, are they changing their tune?

The first U.S. TV interview with the sister of slain Ambassador Christopher Stevens. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight. Nothing has changed. After $6 billion spent on the election, hundreds and hundreds of thousands of miles traveled by the candidates and millions and millions of pizzas consumed by hard-working campaign volunteers we seem to be back where we started on the edge of a fiscal cliff.

President Obama and House Speaker John Boehner haven't budged a millimeter. Yesterday we heard of talk of olive branches and reaching across the aisle, but this evening Speaker Boehner said this to ABC News.

(BEGIN VIDEO CLIP)

REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: Raising tax rates is unacceptable and frankly, it couldn't even pass the House. I'm not sure it can pass the Senate.

(END VIDEO CLIP)

BURNETT: He could be right about that. He's talking about raising tax rates. CNN's Jessica Yellin reminded us today that the White House has vowed to veto any bill that doesn't extend the Bush tax cuts for families making $250,000, less than $250,000 a year.

He's been very explicit. Tax rates will be raised for people who make more than that amount of money. So how did the president respond to John Boehner's line in the sand? Well, we haven't heard from him since he returned to Washington yesterday.

We were told though by the White House this evening that he will make a statement on the fiscal cliff tomorrow, but as far as what we know right now the administration says the president has already laid out his plan.

It's a plan he says would cut the deficit by $4 trillion over the next 10 years. It's also a plan those, that we've told you before doesn't add up. So something has to give. And someone needs to take the helm.

Last night here on OUTFRONT, we tried to find out from Representative Chris Van Hollen exactly what the president's role would be in negotiations on the fiscal cliff.

(BEGIN VIDEO CLIP)

REPRESENTATIVE CHRIS VAN HOLLEN (D), MARYLAND: I think that remains to be seen exactly who will be the negotiator or negotiators. Obviously, the White House has to be engaged. I think the president will make clear as he already has in his acceptance speech last night that we need to compromise. I think the president will be directly involved.

(END VIDEO CLIP)

BURNETT: Directly involved, but not clear what his role would be. Will the president take the lead? Here's the thing. Americans want answers soon. Today, I overheard a major Democratic fundraiser and lobbyist, Ben Barnes saying this to a high ranking member of Senate leadership.

I'll quote him. "I'll tell you we better be in a hurry. I don't think the American people have the patience. And it doesn't look like business has the patience either."

American Express actually wrote in its latest quarterly report in the absence of legislative action, there continues to be growing concerns about potential impact of fiscal cliff arising from scheduled federal spending cuts and tax increases set for the end of 2012.

Well, they better hurry up because in just nine days President Obama is going to go overseas to Asia with stops in Thailand, Myanmar and Cambodia.

Steve Rattner is the steering committee for "Fix the Debt" campaign. He is also the former car czar for President Obama and Stephen Moore. He is the senior economics writer for the "Wall Street Journal" editorial page.

All right, I really appreciate both of you taking the time. This is a tough time for the country and hopefully one where everyone is going to rise to the occasion and we're going to have a happy ending.

Stephen Moore, John Boehner also said today in that interview with Diane Sawyer on ABC News that he is, quote, "the most reasonable responsible person here in Washington." Does that sound reasonable?

STEPHEN MOORE, SENIOR ECONOMICS WRITER, "WALL STREET JOURNAL" EDITORIAL PAGE: Well, you know, Erin, I've been doing a lot of interviewing people the last couple of days on the Republican side of the aisle.

And I would agree with your assessment that right now it appears to me both sides are exactly where they were back a year ago August when we were up against that debt ceiling. Not a lot has changed.

President Obama is going make the case that look I won the election and I ran on raising the tax rates on the rich. But the Republicans in the House said wait we won our elections too and we won on not raising those tax rates.

So there is a bit of a Mexican standoff right now and Erin, right now, I think they are right back where they started, but do I think there's a good chance. Given the fact that fiscal cliff is going to hit in a number of weeks that there is going to be some kind of a deal struck.

BURNETT: Let me ask you, Steve Rattner, the exit polls from Tuesday night, when voters were asked whether tax rates should be raised, here's what they said, 13 percent increased them for everyone, 47 percent increase for over $250,000.

Obviously most voters are not in that category so maybe it's easy to say that. No increase at all, 35 percent so also a significant number there. Should the GOP start to negotiate for increased taxes on people who make over $250,000 because that's what the voters want?

STEVE RATTNER, FIX THE DEBT CAMPAIGN: I don't think you can solve this problem without more revenues therefore I don't think you can solve this problem without changing the tax structure to produce more revenues.

Whether you do it on tax rates on those making over $250,000 or you do it by limiting their deduction or eliminating some deductions that wealthy people get. I think there are a lot of roads that can lead to Rome.

We need to produce revenue. Speaker Boehner has acknowledged that, but I think there are a number ways to get there.

BURNETT: All right, let me ask you a follow up on that point though, and then I get you back in, Stephen Moore. But Steve Rattner, so there are other ways to get there and one of the ways to get increased revenues is closing loopholes and deductions.

You get more revenue that way from wealthy people, but that deal might make complete sense. But the president said he would veto the deal if it didn't come along with increased tax rates on those people. In additional to raising revenue from them from closing loopholes so maybe his point of view doesn't quite make sense.

RATTNER: As you said we're in a bit -- and Stephen Moore said we're in a bit of a Mexican standoff at the moment with both sides taking positions that seem to be inconsistent with each other. We do have divided government.

The president won the election, but the Republicans control the House. I think everyone needs to recognize that we need a negotiation. We need compromises to reach a resolution. I believe there needs to be more revenues.

I believe those revenues need to come from people making over $250,000 a year and beyond that I think you can negotiate this.

BURNETT: Stephen Moore, what's your take on this, this whole issue of raising revenue. You can raise revenue in a lot of ways, some of which include raising tax rates and some of which do not.

MOORE: Yes, I spoke today with the minority leader in the Senate, Mitch McConnell, and he said, look, we're willing to do some of the things that Steve Rattner just mentioned about fix the tax code, close the loopholes, but I don't think they will bargain on raising the rates.

I think they honestly believe and I agree with them that raising tax rates now on capital gains and dividends will hurt the economy. But let's not forget there's another side of this equation we haven't even talked about here, which is the spending side.

And there are some Republicans who say look if the Democrats and President Obama won't negotiate, well, let's just do these automatic across the board spending cuts may be the only way we can get Democrats to agree to cut the budget.

BURNETT: Well, I mean, you know, some out there in the financial markets, you know, Steve Rattner, they say look we need to cut four times more than the president is even proposing under his $4 trillion plan.

Even though there are some issues with the math on that. What though -- Steve, I'm curious your take why the president has been silent. I guess this is strategic. I mean, John Boehner gave an interview today. He is giving a press conference tomorrow.

Today, earlier CNN was told the president wasn't going to say anything about the fiscal cliff, nothing was planned and then tonight, we hear he is going to make a statement tomorrow.

RATTNER: The election was two days ago. Today is Thursday. He is going to make a statement tomorrow. Obviously, markets are volatile and markets are reacting. I'm sure that's why the president wants to say something before he goes to Asia.

But let me say this, we do need to hold down spending. There's no question about that. Nobody is suggesting that this compromise is not going to involve significant limitations on spending.

And much more spending limitation than tax increases, but there has to be revenue component to get this to work both numerically and politically.

MOORE: Steve, I think that will happen actually. The question is whether you can get a broad base deal on reforming the tax system and reforming entitlements. You know, the truth is I don't think they are all that far apart, Erin, I really don't.

BURNETT: Well, I don't think the two of you were all that far apart. I don't know about, you know, the two men named John and Barack, but let's hope they can get a deal done this time. Thanks to the both of you.

OUTFRONT next, the rocky relationship between the United States and Israel gets rockier. If you thought your vote only counts if you live in a swing state, tonight we have statistical proof that you're right.

And terrorists killed her brother during an attack on the American consulate in Libya. Now for the first time since Ambassador Chris Stevens was killed, his sister breaks her silence.

(COMMERCIAL BREAK)

BURNETT: Our second story OUTFRONT, developing story, CNN has learned Iranian fighter jets have fired on an unarmed American drone international airspace. The incident which occurred last week puts new pressure on President Obama to deal with Iran's hostility just days after winning a second term.

The news also comes as the president and prime minister of Israel tried to repair their relationship after a tense few months. OUTFRONT tonight, the Israeli ambassador to the United States, Michael Oren.

Ambassador, always good to see you. I wanted to start with this developing story. We learned that Iranian fighter jets have fired on an American drone. Did your government know about this?

MICHAEL OREN, ISRAELI AMBASSADOR TO THE U.S.: Well, I won't get into sensitive intelligence issues with you on television, Erin, but what I can say is that the United States and Israel together view Iran as a threat not just Israel and the Middle East but the entire world.

BURNETT: And Ambassador, here is what Pentagon Press Secretary George Little had to say about the drones. I want to play it for you.

(BEGIN VIDEO CLIP)

GEORGE LITTLE, PENTAGON PRESS SECRETARY: We believe this is the first time that an unmanned aircraft has been shot at over international waters in the Arabian Gulf.

UNIDENTIFIED MALE: Is that an act of war?

LITTLE: I'm not going to get into legal labels. The reality is we have a wide range of options as I said before to protect our assets and our forces in the region and will do so when necessary.

(END VIDEO CLIP)

BURNETT: Ambassador, could it have been an Israeli drone shot down would you consider it an act of war? OREN: Well, we have the Iranians firing at us through their proxies whether it's Hamas or Islamic Jihad in Gaza virtually every day. This year alone we've had 700 rocket attacks from Gaza on our population in Southern Israel.

BURNETT: So, I mean, I guess the question of an act of war you kind of agree with what the U.S. is doing. You're mad but wouldn't do anything.

OREN: I think this is an act of naked aggression, Erin, and I think it falls -- it's one of a series of acts of aggression perpetrated by this irrational Iranian regime that's conducted and plotted terrorist attacks across five continents around the world in 25 countries.

In 25 cities including this city in Washington, D.C. again, that's not a regime that you want to have, to have access to military nuclear capabilities.

BURNETT: And all of this talk about what to do with Iran, of course, comes down to the relationship between your country and the United States. President Obama and Prime Minister Netanyahu talked today and I know the president called the prime minister to thank him for his congratulations on re-election.

But I wanted to share with you some of the headlines the day after the election. These were, you know, around the world, "Washington Post, New York Times, Daily Beast," Netanyahu rushes to repair damage with Obama. That was one.

After, perceived tilt towards Romney, Israeli leader must mend ties with Obama and a third, Obama and Bibi's rocky road ahead. Obviously in Israel the prime minister is also taking some heat for a perceived support of Romney. I guess the big question is can the relationship be mended?

OREN: There was nothing to mend, Erin. President Obama has said that he has spent more hours in conversation with Prime Minister Netanyahu than with any other foreign leader. They've had about ten meetings. I've been present at all those meetings.

They've been friendly and open and very constructive. We have a lot of common challenges facing us in the Middle East whether getting the Palestinians back to the negotiating table or again preventing that Iranian regime from getting military nuclear capabilities.

The prime minister of Israel and president of the United States are committed together to meeting those challenges, to strengthening their already very strong historic alliance between Israel and the United States.

BURNETT: If that's so, I mean, I just want to ask you about a report today in the Israel. The Israeli newspaper they reported that you in private were worried that President Obama would want to quote, "settle scores" if he was re-elected. OREN: The report is completely without foundation. Nothing I ever remotely said and, again, I've been present at all these meetings between Prime Minister Netanyahu and President Obama and I can say, again, these are friendly meeting, open meetings.

There was another phone call several weeks ago between prime minister and the president. It was exceedingly friendly. Prime Minister Netanyahu met with Secretary of State Hillary Clinton and again very friendly and constructive meetings.

We're allies. Allies can disagree some of the times. The great test of lions is not whether we can agree on everything, but how we move ahead of our disagreements and today whether it be on the Palestinian issue, the Iranian issue, a dozen other --

BURNETT: -- so you're still married.

OREN: We're quite married. We're historically married and we're going to stay that way.

BURNETT: All right, but what does the re-election of President Obama mean for action on this Iran issue? Just a couple of things here, the speaker of the Knesset, Danny Danon, said today, Obama's victory brings home the fact that the state of Israel must take care of its own interests. We cannot rely on anyone but ourselves.

And an interview on Channel 2 in Israel, which aired on the eve of the presidential election, here's what Prime Minister Netanyahu said.

He said, if someone sits here as prime minister of Israel and he can't take action matters that are cardinal to the existence of this country, its future and security, and so totally dependent on receiving approval from others, then he is not worth of leading. I can make these decisions.

So it sounds like another four years of Obama could mean Israel is alone. You're going to have to take action alone.

OREN: We, of course, Israel as a sovereign state has to defend itself and President Obama has said publicly that only Israel as a sovereign state can best decide how to defend its citizens.

BURNETT: Has anything changed on the timing obviously at the U.N. and very widely seen speech that Prime Minister Netanyahu gave. He gave a timeline of the spring or summer in terms of Iran reaching the point where it would have capability for a nuclear weapon. Is that still the timeline?

OREN: Well, more specifically prime minister in his speech at the United Nations was pointing out the point at which we can no longer prevent Iran from acquiring military nuclear capability, nuclear weapons and yes, he gave a timeline that mentioned the spring or early summer.

BURNETT: And it sounds like your specifying -- you're saying that's the last point you could do anything, but you're not saying you will do anything.

OREN: That's the last point beyond which we can prevent Iran from gaining those military nuclear capabilities, yes.

BURNETT: Interesting nuance there in the Israeli stance.

OUTFRONT next, marijuana, it is now legal to use 2009 states. Are we about to see a nationwide trend?

Plus we look into the massive amount of money that could be made of dealing pot.

And later, we talk to the woman who got the call telling her the American ambassador, her brother, was killed in Libya.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, pot. It's everywhere. I mean, the marijuana leaf is showing up all over the place. This was my favorite moment of the day.

"USA today" in the sports section I said to Will, my executive producer, I said what is this? Is that a pot leaf? Yes, it is. In an article about professional sports denying the pot, they said, we're not is going to allow pot. Keeping our pot bans in effect. They put it on front page.

All these pot talk is because, as you have probably heard by now, Washington and Colorado made history this week by voting to legalize recreational marijuana, which is raising some pretty interesting questions.

OUTFRONT tonight, Trish Regan of Bloomberg TV's "Street Smart" and author of "Joint Ventures, Inside America's Almost Legal Marijuana Industry." And today, I guess, a little bit more than it was, but is this the beginning of the future, two states, beginning of a trend?

TRISH REGAN, AUTHOR, "JOINT VENTURES, INSIDE AMERICA'S ALMOST LEGAL MARIJUANA INDUSTRY": It's the beginning of a trend. I mean, the reality is there is some economics behind all of this. States are struggling right now.

They are looking and saying, wow, this could mean something for my tax revenue. This could help me deal with my budget deficit and maybe it could bring in a little bit of tourism besides.

So my expectation, I know, my expectation is you're going to see more and more of this. I mean, California tried it in 2010, was not successful. This is a big deal that Colorado and Washington were able to get it through.

We'll likely see it resurface in California. I wouldn't be surprised to see a lot more states starting to follow.

BURNETT: They can get tax revenue from it. I mean, this is big money, right? REGAN: Big, big money. Let's just go through it. I mean, Colorado and Jeffrey Marin at Harvard University, is estimating that Colorado and Washington will each bring in about $50 million to $60 million in tax revenue and that's not only that.

You got enforcement savings, so $74 million expected just -- you don't have to run down people and throw them in jail anymore so you're going to save a lot of money there.

It's $74 million in Colorado, $99 million being saved in Washington and then as I was saying earlier, there's all this potential tourism. I mean, Denver, Colorado, you have more --

BURNETT: It's the new Amsterdam.

REGAN: In fact there's an area in Denver that I did a lot of reporting from called Ramsterdam where you just have tons and tons of pot dispensaries.

There are in fact more dispensaries in Denver right now than there are Starbucks. And now that it's going to be recreationally legal, you can expect a lot more. I mean, there are legal hurdles that will have to overcome with the federal government, et cetera.

Because let's not forget it's still federal law, but states are going to look at this much as many have looked at gambling and said maybe we can make some money.

BURNETT: More pot than Starbucks, you got me there, Trish. But a lot of what we hear about pot, its small business, these individual farms. But is it possible that we could end up with big pot?

REGAN: You could. I mean, you think about the infrastructure that's already in the place with a lot of big agricultural companies and a lot of big tobacco companies. They could very easily say this is a money making opportunity for us.

Some estimates, the overall national marijuana market peg it at somewhere around $40 million, which is roughly half the size of the tobacco market. If you're a tobacco company you might think this is a good opportunity for me.

This is a way to grow your business so the time when maybe the cigarette business is in quite doing as well. So they may start to look at it. But that's it, Erin, I mean, they have a lot of hurdles they have to overcome in terms of the taboo associated with this.

The cultural, social taboo, a company may not to embark on that just yet, you may see smaller companies start to acquire other little companies, little pot dispensaries acquiring each other and building from the ground up.

BURNETT: All right, Trish Regan, thank you very much. All I got to say is, you know, Trish said it. On the front page of the "USA Today" sports section, I think we're getting somewhere.

REGAN: We could be.

BURNETT: All right, still to come. If you don't live in Florida, Ohio or Virginia chances are your vote really didn't matter. That's how you felt. But guess what, tonight, we're going to tell you why you're absolutely right.

Plus, Gabby Giffords today came face to face with the man who shot her in the head and killed six others. Her husband, Mark Kelly, had some powerful words for the gunman next.

(COMMERCIAL BREAK)

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

Jared Loughner, the Arizona man who killed six and wounded 13 others, including then-Congresswoman Gabrielle Giffords has been sentenced to seven consecutive life terms, plus 140 years without parole. To avoid the death penalty, Loughner plead guilty to 19 charges.

At the sentencing today, Mark Kelly, Giffords husband, gave a powerful statement, praising his wife and detailing her struggles as she recovered. He ended by saying, "You have decades upon decades to contemplate what you did. But after today, after this moment, here and now, Gabby and I are done thinking about you."

OUTFRONT also received a statement from Daniel Hernandez Jr., the intern who came to Gabby Giffords aide after being shot. He too was looking for closure, saying in part, "Never letting our community be consumed with anger we resolve to make the best of this tragedy. We know we have close this chapter and we must move on the next one where we will be able to do good."

We have new pictures of the Malala Yousufzai, the Pakistani teenager who was shot by the Taliban because she spoke out about the right of girls to get an education. Malala is currently recovering from an attack -- after the attack at a British hospital.

Doctors say she's making satisfactory progress. Her prognosis, though, is excellent. They say she didn't suffer from significant brain-damage. She is able to walk and talk.

In a statement, Malala's father said she stands for human dignity and tolerance and that her voice is the voice of the people of Pakistan.

An estimated 666,000 people in New York and New Jersey are still without power following both Sandy and the nor'easter which hit the region last night. Those power outages are making it very difficult to get gas and New York Mayor Michael Bloomberg has signed an emergency order instituting a gas rationing policy today. He estimates only 25 percent of the city's gas stations are operating and we're finally starting to get some estimates on how much that superstorm will cost. New York Governor Andrew Cuomo said Sandy inflicted $33 billion in New York state alone. And I want to say that to everyone, $33 billion in New York state alone. New jersey was hit harder. These numbers are going to be astronomical.

The family of Robert Champion Jr. has rejected a propose $300,000 settlement from Florida A&M university. Champion Jr. died after being beat on a bus as part of a hazing ritual conducted by the university's marching ban. Fourteen people were charged with criminal hazing in the incident. The attorney for FAMU says $300,000 is the maximum amount allowable by law, but the family's attorney, Chris Chestnut, called the offer an insult.

Well, it has been 462 days since this country lost its top credit rating. What are we doing to get it back?

Well, the fiscal cliff is still there, still weighing on stocks. The Dow fell another 121 points. The NASDAQ and S&P lost more than a percent. What will it take to wake Washington up?

Now, our fourth story OUTFRONT. A country awash in red elects a blue president. Just take a look. I mean, I saw this map today and it just took my breath away. This is the county level election data from Tuesday.

As you can see, most counties in this country, that would be an understatement, I mean look that. They voted Republican. But the cities are where most the people live, they tend to vote demonstrate and that's where you see the blue. And that is how President Obama was re-elected.

Now, we all know the battleground states get a lot of love. In fact, Florida, Ohio and Virginia got almost two-thirds of the recent campaign appearances by the presidential candidates and their running mates. Those states are home to just an eighth of the nation's population. This is pointed out by one of our guests tonight. That affects turnout.

The new numbers came out today. In the battleground states turnout was 62.7 percent, in the non-battleground 54.8. Depending how you look at it, the Electoral College system gets the credit or the blame for this.

Is it time for a change?

OUTFRONT tonight, Adam Liptak of "The New York Times." He wrote a piece about the vanishing battleground.

Let me just start, Adam, by explaining what this means. I mean, you went through all of the numbers as well. This is where the candidate spent their time. This is where the ad money get spent. And these are the people who vote. It doesn't seem fair.

ADAM LIPTAK, NEW YORK TIMES: And you know what? It didn't always used to be this way. In 1960, John F. Kennedy campaigned in 49 states. Richard Nixon in all 50. Now, we're down to 10 -- the number of states that are close, that are not blow-outs. Because what happens is that Democrats live on the coasts and big cities the Republicans live in the interior and many, many states are blow-outs, which means it doesn't make any sense for candidates to spend time there because they don't have any kind of meaningful shot. And the number of states that are close is shrinking really fast.

So, you know, in a series of elections that were similarly close, you know, within 2 percentage points like the current one, in 1976, there were 20 states that were quite close within a 5 percent margin. By 2004, we're down 11 states. By my count in the election a couple of days ago, you're down to five states.

So, you're really running a country in a fairly funny way where a few number of states are doing all the work.

BURNETT: Well, doing all the work -- another way of saying they get all the say in who gets to run the country and that's not fair.

LIPTAK: That's right. I mean, one way to think about it. On the other hand is that they are close states because they are representative of the whole country in a sense. That's why they are close.

But it's a weird system and in turnout numbers you pointed to are very interesting. It means lots of people have sort of checked it out and we leave it to our friends in Ohio and Florida to decide the election.

BURNETT: Yes. Let me ask you about this, though. When people criticize the Electoral College, people who support it come back and say, hey, look, the whole point of the Electoral College it helps the states that don't have a lot of people in them. But when I look at the map, it seems to be doing the opposite. The states with no people of them are saying one thing and the big populous states are saying another and getting what they want.

LIPTAK: Well, you would think Romney would have a better shot in some of the interior, more rural states. But my colleague Nate Silver just ran some numbers today and said that for him to win the Electoral College in the last election, he would have had to be up 3 percent in the popular vote. He would have had to swing from down 2 percent to up 3 percent.

So, in the current structure, it seems to hurt Republicans.

BURNETT: Right, in the current structure. But is there a way to reform this? Because, I mean, I know I keep harping on this. I don't think -- it doesn't seem right to me that Ohio, Virginia and Florida matter when New York, Texas and California don't.

LIPTAK: Well, some of it is hardwired into the Constitution. The Constitution assigns a number of electoral votes to each state. But there's something that could be done which is not hardwired into the Constitution, which is almost all states with two exceptions Maine and Nebraska assign all of their electoral votes winner take all. That's not required by the Constitution. If the only votes were assigned differently by congressional district or to some kind of deal to follow the popular vote, you would have a very different system.

BURNETT: Right. And perhaps one that would make more scene. Adam, thank you very much.

Everyone, if you haven't read Adam's article, go check it out on NewYorkTimes.com. It really lays this out fantastically.

John Avlon is a senior political contributor for "Newsweek/The Daily Beast", Reihan Salam is writer for "The National Review", and bring the funk Roland Martin is here as well.

All right. Good to see all of you.

John, let me start with you. Is the system broken?

JOHN AVLON, CNN CONTRIBUTOR: Yes. This is a lousy way to pick a president. You know, I've got a family spread out New York, South Carolina, Idaho, Illinois. The only person in our family whose vote counts is my grandmother in Ohio. And states, the three most populous states in the country -- New York, California, New York and Texas are basically just ATMs for presidential candidates. They go there to raise money and it fundamentally disenfranchises folks who live in very popular states.

So, this is a ridiculous way to do it. There is a better way. National popular vote is one option. That's been take on some popularity in places. Maybe congressional districts.

But I would have thought after 2000, we would have gotten a real ahead of steam about this dealing with this problem, and we still haven't. Election reform is important, just as urgent now and it was then. Maybe more so.

BURNETT: I mean, you know, Roland we talk so much about, you know, voter ID and photo ID and all these things that are important and need to be talked about. But yet this seems to be really serious issue.

MARTIN: Well, it's a serious issue especially when certain folks lose. I mean, look, let's just be honest here. OK?

I'll say, you look at African-Americans. Fifty percent of all- black folks live in the South. Trust me, if you're a Democrat, you have no shot of winning Mississippi, Alabama --

BURNETT: That's right.

MARTIN: -- Georgia. So, you can say, well, that can benefit one party over the other. The other problem that you have to deal with, though, is we look at congressional districts, who is in charge of drawing congressional districts?

BURNETT: Right. MARTIN: That is the politicians. And so, you saw in Texas, where Latinos drove the population increase in Texas, they got five new seats -- what do Republicans do? They created five Republican districts. And so, there's no way in the world I would say consider a congressional district system because the politicians who are in charge of that state will draw the congressional districts to benefit their party.

And so maybe the popular vote is really the best shot. That way it's the great equalizer because it doesn't matter who lives in a particular place.

BURNETT: Right. Reihan, what about what Adam pointed out. You don't have to change -- changing the Constitution, I mean, I give up. All these absolutist they don't want to do it. It becomes a war, and you don't get it.

But what about allocating the Electoral College based on the popular vote in the state. That would accomplish some of what Roland is suggesting.

REIHAN SALAM, CNN CONTRIBUTOR: Well, yes, there was actually an idea, a group called National Popular Vote and their proposal was to actually have state legislatures assign the electors in their state to the candidate who actually won the national popular vote because again you're allowed to do that at the state level. You're allowed to say how your electors should vote.

BURNETT: Right.

SALAM: My personal view is a little different. I think that to be totally fair about it, if we did move to a national popular vote system, you would see really dramatic changes in how people campaign. So, to Roland's point -- you have African-Americans in Deep South states that are reliably Republican. So, you can see candidates appealing to those guys.

You could almost imagine conservatives like me who live in blue cities like New York City -- maybe they would become more relevant as well, even though, you know, a guy like me, you know, I'm going to be part of a 11 percent minority or something like that in a place like New York City, but there is however another thing to think about.

BURNETT: Eleven percent -- 0.11 percent.

(LAUGHTER)

SALAM: There's another thing to think about, which is that, look, to change something like this, it will lead to a lot of unpredictable consequences. So, for example, one advantage of the Electoral College is that it sees that whoever is elected president has to be -- win as majority in a variety of different states that are quite different. You have a disperse support which is very valuable.

BURNETT: Roland? MARTIN: Erin, at the end of the day, we can sit here and have this conversation but remember, in order for you to change the system, you're going to have to go through a constitutional change. Where is that going to require? Two-thirds of the state.

And I can tell you right now Wyoming, North Dakota, all of those folks they are going say, uh-uh, don't you touch this system because the next thing you guys are going to do is mess with the U.S. Senate or we all get two each. So you can imagine what that fight is going to be.

AVLON: National popular vote actually is a way to do it without a constitutional amendment. That's one of the reasons it's gotten some attraction. But, fundamentally, the problem is, the politicians -- they have been elected in the current system. So, they see no incentive to try to --

MARTIN: That's right.

AVLON: -- level the playing field or open the process. But that's what we need.

BURNETT: You know what Americans think of politicians?

AVLON: Not so good.

BURNETT: Yes, not very much.

MARTIN: But they are the ones we vote for.

BURNETT: Well, I mean, what is it? Self-loathing?

SALAM: The system worked reasonably well for a very long time.

AVLON: Reasonably.

BURNETT: Reasonably.

AVLON: Redistricting reform, I'm with Roland on that one.

BURNETT: Said by one of the 0.11.

All right. Thanks. See you all three.

OUTFRONT next, the attacks in Libya and those attacks one woman's brother died and tonight, the sister of Ambassador Chris Stevens speaks out for the first time.

And later, why FDR's preoccupation with the holidays matters tonight.

(COMMERCIAL BREAK)

BURNETT: We're back with tonight's "Outer Circle", where we reach out to our sources around the world and we begin tonight in Beijing where China is ushering in a new era, a once in a decade leadership change. But before stepping down, the departing President Hu Jintao issued a stern warning.

Stan Grant is in Beijing and I asked him about it.

(BEGIN VIDEO CLIP)

STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, what a contrast it is after the U.S. presidential elections to see a very secretive Chinese communist party come together at the congress. This is a chance for the party to reflect on where the country is and where they want it to go. And there are very, very stern warnings from President Hu Jintao. He said unless corruption is tackled and tackled properly, it could bring about the downfall of the state and the end of the communist party.

Now, at the same time, the party is convening to select a whole new leadership. Xi Jinping is expected to take over the mantle as the boss of the communist party. He's inheriting a country with a lot of problems right now. As Hu Jintao has pointed out, a lot on the line -- Erin.

(END VIDEO CLIP)

BURNETT: Our fifth story OUTFRONT: honoring Chris Stevens.

The late ambassador to Libya is being honored with a Common Ground Award tonight for his tireless efforts to bridge the divide between the United States and the Middle East. Stevens was killed, along with three other Americans on September 11th after terrorists attacked the U.S. consulate in Benghazi. More than eight weeks later, many are still wondering who is responsible and how it happened.

Ambassador Stevens' younger sister Ann will receive the award on behalf of her brother. And she is OUTFRONT tonight in her first American television interview.

And, Ann, thank you so much and our condolences. I know it's a special night but a really hard night for you.

DR. ANNE STEVENS, SISTER OF AMBASSADOR CHRIS STEVENS: Thank you.

BURNETT: So I know you also met with the president this afternoon, and had a chance to talk with him about your brother. What did he say?

STEVENS: He expressed his condolences, and his admiration for the work that Chris did. And we talked about how important it is to move forward and continue the State Department's really important work in the Middle East, especially in Libya. We agreed on this subject and looking forward to seeing this in the next few years.

BURNETT: And I know you've also had a chance to talk with the secretary of state before. You've met her before. You're going to see her again tonight.

How have those conversations gone? STEVENS: She has been wonderful. She has been at the beginning so supportive. I met her first when Chris was sworn in as the ambassador to Libya. And it was just wonderful to see, to hear the admirable words that she had for Chris and his work and his courage.

And then when we met again after Chris had been killed, she was almost like a family member. She felt so terrible along with us. We really, really mourned together. I know she cares a lot and that State Department is like a big family and she's -- she's really done everything she can to -- to help ease the pain for us.

BURNETT: And I know that you are extremely close to him. We've heard so much about him as a dedicated diplomat and someone who loved the people he lived among. What he was like, though, to you as a brother?

STEVENS: He was a mentor. He was so inspiring. He was always encouraging me and my other brother and sister to travel, to learn languages, to play tennis, to excel in everything we did. He really set a high bar for our family and inspired us.

BURNETT: And I know that you were the first to get the call when he was killed. I can't imagine what that must have been like.

I know, and of course you knew he in a dangerous place but was that a call that you thought ever could come?

STEVENS: Of course it has been in the backs of our minds, ever since he took his first State Department assignment in the Middle East. We knew that it was a dangerous place. But the importance of the work he was doing and the courage that he showed swept us along. And we did not think about it a lot.

BURNETT: Yes. In the months leading up to the attacks and I know this is something that's painful to hear and probably something you don't like to talk about. But, you know, there was an IED that had blown months before. There were other security incidents.

Had he ever talked to you about that? Did he have any fears that he shared with you?

STEVENS: He was a realist. He recognized fully the dangers and not only in Libya but previously in Israel, where he had served. And he was very well-prepared by the State Department to minimize the danger as much as possible.

BURNETT: In the weeks before the attack, one thing that had stood out to me was some of the Libyans guarding the consulate said they had been warned, they had been told by their family members to quit because there was an impending attack. I know that you and your family weren't aware of that at the time.

But when you heard that, how did that make you feel?

STEVENS: I have confidence in the State Department to do what they need to do at the time. They have the most information. They have much more information than I will ever have, and they feel very strongly that they want to protect their own people and they do everything they can to do that. Nothing is 100 percent. You cannot eliminate the danger entirely.

BURNETT: Obviously, your brother's death has become political and that has got to be one of the most awful and frustrating things for you. Do you think anything good can come out of that given that there are all these investigations and all these people who are trying to find the truth, or do you think that's going to hurt the search for the truth?

STEVENS: I don't think all the extra investigations are going to benefit anybody. What's benefiting people are all of the other organizations and individuals who are looking at Chris as a role model and looking at his work and his form of diplomacy as something to strive for, and continuing to do this good work in Libya and other countries. That's the positive that's coming out of this.

BURNETT: Certainly, he's become a hero for so many during this. I know you also met today with the national security advisor Ben Rhodes when you met with President Obama. Did you talk at all about other questions that you, the family, still want answered?

STEVENS: We talked mostly about the importance of continuing on the ground work, especially in Libya and in other countries, and we talked about peace corps volunteers and also return volunteers who want to do something to honor Chris' work and how we may promote educational activities and other activities that will increase cross- cultural understanding and Mr. Rhodes was very supportive of these ideas.

BURNETT: I'm sure he was really appreciative for you taking the time. It sounds like such a wonderful family. Anne, thank you very much.

STEVENS: Thank you.

BURNETT: Well, the Christmas season gets longer and longer every year. It appears to be out of control. So who is to blame? This man, FDR -- OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: So it has only been a week since Halloween, just two days since the election but it's already time to talk about Thanksgiving. Specifically, everyone's favorite shopping day or maybe not so much, Black Friday. Today, Walmart announced that this year's Black Friday will begin on Thursday, November 22nd, when Walmart is going to drop prices at 8:00 at night on Thanksgiving Day to let customers get a jump on the holiday shopping.

So, now, you can start your Christmas shopping as soon as you finish eating Thanksgiving dinner and watching football.

But you know, it's not just Walmart. Sears announced it will offer Black Friday deals five days in advance. OK. I don't know what you want to call that. You know, gray Monday?

Look, I love Christmas. It is my favorite holiday. But really, is nothing sacred anymore?

So, we looked into this and we found out this rush for Christmas is nothing new. And the person to blame, the person who moved Thanksgiving, the one who got this butterball rolling to get more people shopping for Christmas is this man, Franklin Delano Roosevelt.

Prior to FDR's administration, Thanksgiving was always celebrated on the last Thursday in November. But in 1939, that fell on November 30th. The National Retail Dry Goods Association panicked. They said 25 days of shopping is not enough. President, you've got to move Thanksgiving.

Now, FDR loved holidays when they helped him out. Years earlier, he created Columbus Day to win over Italian-American voters. No joking, he made it up. I want votes, I'll give you a day off.

To assuage the retailers, he agreed to move Thanksgiving. That split this country down the middle. People were mad. Half the states celebrated on the 23rd and the other half celebrated on the 30th that year. It was like that until 1942, when Congress actually set Thanksgiving on the fourth Thursday of November permanently, another victory for FDR.

So much for the hope that Thanksgiving was linked to some part of American history or I guess it is, linked to presidential politicking. How about this? Let's let Christmas have all the time it needs and move Thanksgiving again to a time we all need to pick up with family and friends like the end of February.

President Obama, you just got re-elected. Let's get it done. It's peanuts compared to the fiscal cliff.

All right. Thanks for watching, as always. We'll see you again here tomorrow at 7:00.

"ANDERSON COOPER 360" starts right now.