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CIA Director Petraeus Resigns

Aired November 9, 2012 - 21:00   ET


PIERS MORGAN, HOST: Good evening.

We start with breaking news tonight. We're looking live at the White House where a massive scandal is rocking the Obama administration three days after the election. CIA Director David Petraeus, the married former military commander, steps down after admitting to cheating on his wife. Tonight, new information on his stunning resignation.

We have the latest developments, including details on the woman who may be at the center of it all, Petraeus biographer. Her name is Paula Broadwell. She's an author and an expert on counterterrorism. She's also married herself. Broadwell has spent a year in Afghanistan with Petraeus. This is a picture from their Web site of the couple together.

Right now, the CIA is investigating a tip that she is the other woman. CNN can only at this stage that she is the woman named in that FBI tape.

As for Petraeus, he's not admitted an affair directly with her. But Petraeus sent out a letter today to his staff that says, "Yesterday afternoon, I went to the White House and asked the president to be allowed, for personal reasons, to resign from my position as director of the CIA. After being married for over 37 years, I showed extreme poorly judgment by engaging in an extramarital affair. Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours. This afternoon, the president graciously accepted my resignation."

And joining me now, Pentagon correspondent Barbara Starr, intelligence correspondent Suzanne Kelly, CNN contributor and former CIA operative Bob Baer. And on the phone, Ronald Kessler, the chief Washington correspondent for "Newsmax" and author of "The Secrets of the FBI". And Lisa DePaulo, who wrote a fascinating article for "GQ" on General Petraeus.

Let me start with you, Suzanne Kelly.

This is a massive blow to everybody, really -- the White House, to General Petraeus, obviously himself, to his wife and to the country. The country has lost one of its great military men in scandalous circumstances.

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: You know, Piers, that's absolutely right. To say it was a shock wave that hit Washington today I think might even be an understatement.

I mean, there were two shock waves really. The first was that he admitted to having an affair. This is someone with a stellar reputation in Washington, very well respected. War hero in many ways who was appointed by President Obama a little over a year ago to head the CIA. Now he comes out in his own words, as you just read, and admits to having an extramarital affair was one shock.

The second shock, that he's stepping down from his job over something like that. I mean, let's be real. You know, this is Washington. This stuff happens a lot. A lot more than it should, but it doesn't always bring people's careers down.

So it does make you wonder whether there's going to be more information that comes out in the next few days that may cast some light as to why something like this would lead to his resignation.

MORGAN: Let me turn to Barbara Starr.

Barbara, you knew General Petraeus and his wife Holly for a long time. It's obviously a huge shock to everyone that knows him by the sounds of it. But there's also little conspiracy theories, not least of which that in some way this some kind of smokescreen for the Benghazi Congress hearings next week in which General Petraeus was due to appear.

Is there any credence talking about this stage, do you think?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, right now, I don't think that there is. You're right, though, Piers, there have been a lot of rumors that he was going to be pitched over the side, if you will -- as if the fall man for the Benghazi situation and whether the CIA acknowledged the intelligence it had.

I think it's unlikely that that is really what's going on here. Petraeus is a very proud man. He has a family at stake here, a wife of 37 years, 38 years. He would not put that at risk for something like this.

I mean, I think it is really worth noting his wife is a military wife who for 37 years ran the family, held the family together while he continued to deploy overseas, especially at the last decade.

So he owes a lot to Mrs. Holly Petraeus. She has really been the stalwart of that family. I don't think he would risk the Benghazi situation and risk his family over that.

MORGAN: Let me turn to Ronald Kessler.

Mr. Kessler, you have got lots of good FBI contacts and you posted tonight a story about this, which contains some fascinating detail. We've been unable to corroborate it.

But give me in broad brush strokes what you believe to be the circumstances behind what has happened to David Petraeus. RONALD KESSLER, AUTHOR (via telephone): What happened is last spring, the fact that he was communicating with this woman on his military e-mail account was uncovered by the FBI because of a general filtering system of government e-mails which uncovered a reference to something going on under a desk. Well, it actually meant he was having sex with her under the desk, but the FBI thought it might refer to corruption -- in other words, doing something under the table. And that's how this investigation started.

The FBI then went back and traced all of his e-mails and ascertained that he was having this affair with this woman, and, of course, that is a total violation of top secret security rules. You are not supposed to compromise yourself in any way where you could be blackmailed, especially the CIA director. There is almost nobody in the government who knows as many secrets as he does, and people are routinely fired for putting themselves in this position when they have a top secret security clearance.

What was even worse is that the FBI found that she broke up with him several months ago, and he continued to pursue her, sending thousands of e-mails to her. And again, this raises even more questions about his judgment.

The FBI thought that he would be immediately asked to resign. That's what would normally happen with a government employee. But, in fact, the White House said, no, we want to wait until after the election. So, agents were furious.

I've been given insight to the actual agents that were doing the case, and they think it's inexcusable that this was allowed to continue for months without firing him.

MORGAN: Let me -- let me just jump in there, Ronald. Obviously, this is all your independent claims and reporting. We've been unable to corroborate this in the time scale we've had tonight but you do have very good FBI sources.

I want to turn now to Bob Baer. He's the CNN contributor.

Bob, from everything you just heard there from Ronald Kessler, does this make sense to you that this could be the sequence of events?

BOB BAIER, CNN CONTRIBUTOR: Oh, I think absolutely. But I tend to attribute more significance to the FBI of getting into his emails -- into Petraeus' e-mails.

The FBI, as a matter of course, doesn't look at affairs, doesn't read military officers' e-mails or CIA officers. They have to be alerted to some sort of crime or counterintelligence problem. I can only speculate what that would be. Maybe it was something in the book that Broadwell wrote. There was some classified information.

It could have been other leaks to the press they looked into, and then once they opened a relationship like this, they found the rest of it, and that they're able to get a warrant to continue to read his e- mails or hers. But something sparked this, something that we don't know about so far.

KESSLER: What started it was a general filtering system not by the FBI, but probably by NSA, which looks for any abuse or problem with use of government e-mails.

MORGAN: Right. I mean --


MORGAN: I think the situation as we stand from everything I've read this evening, maybe I'll bring Barbara Starr in her, she could help me with this, is that the FBI clearly were investigating Petraeus. How that started has not being confirmed, although Ronald obviously has his theory there. What we then know happened is they had this information presumably for quite some time.

To me, one of the key questions here is when did the White House get ahold of this investigation, and did they make a conscious decision for this not to be released to the media until after the election?

KESSLER: Yes, that exactly what happened.

MORGAN: Ronald, if I may just turn to Barbara Starr, if I may.

STARR: Well, you know, Piers, I think this is the key question in front of everybody. How extraordinary would it be that you have this type of FBI investigation into your CIA director and the president is not informed about it? This seems to really beg belief at the moment.

The word is circulating that the president was not aware, that, you know, only once Petraeus came to him, but it really seems to beg belief that someone in the White House didn't know that the FBI didn't inform the White House in some fashion.

And the other question is, of course, Capitol Hill, the congressional intelligence committees, as Suzanne would tell you, are to be informed immediately when there is something of this stature that would affect the CIA director. These are key national security questions. However it all sorts out at the end of the day, your CIA director is under investigation and the president doesn't know -- maybe not.

MORGAN: Suzanne Kelly, I mean, it really does almost beg belief that we simply all just woke up this morning to find that the White House were told yesterday, and David Petraeus who had been investigated by the FBI for a length of time that we don't quite know yet how long that was, this all just happened yesterday. It doesn't ring true, does it?

KELLY: Well, a lot of things don't ring true, and that's why, you know, we're going to need some time, although we'd love to have all the answers right now because that's how we are. I think we really need some time to figure out what happened when and who knew what, once again. But, you know, we do know that this affair had been going on for some time and that all of a sudden, you know, the general has this crisis of conscience and decides he needs to come clean with it and stepped down. It is curious it happened a few days after the election.

But I think, you know, you have to go back and tie it to the investigation, too, because if there was an FBI investigation, which we now know they were investigating a tip, OK, and we do also know they weren't really investigating Petraeus for allegations of wrongdoing, but they were looking at whether or not this affair, this tip of an affair could have put him in a very vulnerable position. That's how spy networks work in Washington. They find people who have access to classified information, they try to exploit them in any way they can, sometimes with women.

So, you know, we still don't know for sure, Piers, we here at CNN, who the woman was who he had the affair with. I want to reiterate that one more time. There are lots of reporters giving different tips. We haven't gone on the record with that yet.

But we do know that it was prompted by this FBI tip that the two of them were having an affair, Paula Broadwell and the general.

MORGAN: Right. Let me turn to Lisa DePaulo. She's an author, of course. She did a big biography piece on General Petraeus. She spent a lot of time with him.

Were you surprised by this revelation or did you see something --

LISA DEPAULO, GQ (via telephone): Oh, gosh. I mean, if somebody said to me, of all the people, powerful guys you've interviewed, who would be most likely to be embroiled in some crazy extramarital affair, the last person, besides Joe Biden, would be General Petraeus.

And yet, on the other hand, it's not that shocking. This is a guy who was like a full-time career nerd who has been a rock star for the past five to seven years. So, it's really not that strange. What is strange, and your guests have pointed out so wisely, something precipitated this.

I don't think it was a crisis of conscience. I don't think any guy wakes up and says, I think I'm going to blow up my whole career and my stellar reputation and come forward with an extramarital affair. Something else happened.

MORGAN: Yes, I mean, I met General Petraeus, actually, at the White House Correspondents Dinner at the party afterwards. I had a long chat with him. He seemed extremely dignified, very charming man.

DEPAULO: Totally, totally.

MORGAN: Certainly almost the last person you would think. It often is.

Let me go back to Barbara Starr here. Barbara, what are the -- what are the repercussions politically now here? Because this seems to be a bit of a tinderbox. This is one of the highest ranking military or intelligence people in the American military intelligence I can remember that is being brought down by a sex scandal, and given the timing of the election, this could really be very serious, couldn't it?

STARR: Well, we're starting to ask the question, what were all the secrets that were being kept in Washington in the days before the election? Who knew about General Petraeus? Who knew that the Iranians had shot at a drone? What other sort of national security secrets were being kept locked up until the election was over?

This will have implications. The CIA will go on, the intelligence community will go on, but there will be some scarring about this even here at the Pentagon, the four-star general officer corps reeling from this.

This man was idolized and yet also looked at a bit askance for his personality by the military. He was known to think very highly of himself, and that caused him some problems. So this will begin to have ramifications.

I think one of the fundamental questions here, Piers, is the four-star generals in this country. Petraeus was always a four-star general. These are people who live in rarified atmosphere. They are coddled; they have cadres of aides around him. They live a very sheltered existence.

He continued to live that existence at the CIA, perhaps leading to some fundamental questions. We've sign lot of these scandals --

MORGAN: Let me just -- let me just jump in, Barbara. We're going to take a short break. I want to come back and keep everybody where you are, please. These are fascinating stories breaking with more and more details by the moment. Let's come back after the break and continue to talk about it.

CNN, meanwhile, has reached out to both General Petraeus and Paula Broadwell to come in. I'm so sorry we haven't heard back from either of them.


MORGAN: Tonight with breaking and shocking news of General Petraeus' resignation that an affair has cost him his job as the boss of the CIA.

With me again is Pentagon correspondent Barbara Starr, intelligence correspondent Suzanne Kelly, CNN contributor and former CIA operative Bob Baer and Lisa DePaulo, who wrote a fascinating article with "GQ" on Petraeus.

Bob Baer, let me bring you in here.

Some people would be thinking, what on earth is the FBI doing investigating CIA directors? Is that how it works? I mean, we've known there's been tension between them, but it does seem a bit extraordinary.

BAER: I've never seen it happen. I've seen the CIA think it has a problem and they go to the FBI and file a crime report saying, look, you know, there's something has happened here, look into this, and there is complete cooperation between the FBI and a the CIA in a criminal investigation.

But the idea the FBI is investigating a CIA director for an extramarital affair is just extraordinary. I have never seen it happen, and it smacks of George Orwell, really. You know --

MORGAN: It does. And also, I mean, put me right on this, because you're much more informed than I am on how this stuff works inside the CIA. But it just seems -- yes, he was having an affair but it wasn't with anybody in the agency, it wasn't anybody in the military. This was a biographer who had written a book about him.

Ostensibly, how big a security risk would that be if that was, indeed, what it was? I mean, it's hard to construct a massive security breach, isn't it?

BAER: It's virtually not. I mean, I could -- you know, I'm not going to, but there are four or five CIA directors I know carrying on extramarital affairs while they were director. The FBI was never brought in. The Office of Security was never brought in. It was ignored, it went away quietly, we'll never know about them.

So, this is absolutely extraordinary. I'm telling you, there's more to do than with sex. There's something going on here which I can't explain, and I think we're going to find out very soon.

KELLY: Hey, Piers.


KELLY: It's Suzanne, I'm sorry.

I just -- I hate to be so aggressive against Bob, but that was spoken like a true man. I mean, if there were other people who had security clearances at the level of David Petraeus who were sleeping with people outside of their marriage, I would want to know who they were. I would want to make sure they weren't trying to exploit that relationship in any way or that national security secrets were going to make that person vulnerable.

I feel like -- to think that's just an affair and pass it off is a little bit --


KELLY: I mean, Suzanne, is it one of those jobs like being the president when particularly in this modern era, you just cannot go there. You cannot have an affair if you are the director of the CIA or the president of the United States because of the quite obvious risk of blackmail or like being the president when particularly in this modern era, you just cannot go there. You cannot have an affair if you are the director of the CIA or the president of the United States because of the quite obvious risk of blackmail or just being held to ransom in some manner by whoever it may be.

BAER: No. No, it's an American citizen. It's different.


KELLY: I know Bob is going to disagree with me on this.

MORGAN: Let Suzanne go first. I'll come back to you, Bob.



MORGAN: Bob, let Suzanne say something first. I'll come back to you.

KELLY: If somebody has a level of national security like that, they are trusted by the American people to do what's right. That doesn't mean, of course, they're not going to make mistakes in their life, no.

But if they're carrying on an affair for an extended period of time and they're using their government's addresses and things like that, which are all accusations at this point, but if any of that turns out to be true, the FBI would have to look into that, right? Wouldn't you want someone to look into that and see if that person were being exploited? The American deserve it.

MORGAN: Bob, if you don't agree, why?

BAER: No, no, no. It's the way it works is when it's found out that the CIA director or whoever it is goes to the president and says, listen, this is going on, it's done very quietly. It never ends up in a political resignation like this. It's all done very quietly.

The CIA director would say, all right, I made a mistake. I'll go ahead and here's my resignation. The president accepts it, but it's never made public. Somebody like this doesn't come out and blow his career up unless something else is going on.

MORGAN: Bob, let me --

BAER: Additionally --

MORGAN: Sorry, Bob. Go.

BAER: But, additionally, it's an American citizen. This isn't like dealing with a foreigner. This is a benign journalist who has no record of being hostile to the government. It's not on the face of it, a counterintelligence threat, and it's not something that turns into a political scandal. It just never has. Something is going on. MORGAN: Barbara Starr, it does seem murky, this. Do you think we're going to be facing some quite big, new revelations over the next couple days?

STARR: You know, one question is, was there only one relationship involved? Is it possible there were multiple relationships? But knowing Petraeus, I'm going to go out on a limb here. I think it's the simple explanation that may be the most likely.

David Petraeus for decades likes to control the circumstances around him. Clearly, this was a character lapse in which he slipped out of control of his circumstances. This is a way he could bring it back. He could limit the damage, not have the Washington drip-drip of stories every day, try and do everything he could not to humiliate his wife any further, cause any further embarrassment to his grown children, one who is an Afghanistan veteran.

This, I think, is classic Petraeus trying to control what is going on around him.

MORGAN: What is extraordinary is on November the 25th, Paula Broadwell, who's a woman at the center of this, wrote a piece for the "Daily Beast" Web site, with "Newsweek", obviously, listing General Petraeus' rules for life.

Number five, we will all make mistakes. The key is to recognize them and admit them, to learn from them and take off the rearview mirrors, drive on and avoid making them again.

Quite extraordinary, given that was just written a few days ago.

Thank you all very much, indeed.

But we're going to story. Now, a man who worked closely with General Petraeus in Iraq, Ambassador Paul Bremer joins me to talk about the shocking resignation.


MORGAN: With each hour, we're learning new details about the shocking affair that forced David Petraeus to resign as CIA director. Before becoming the CIA chief, Petraeus was the top commander in Iraq. He was on the ground there at the same time as former Ambassador Paul Bremer was the U.S. administrator in Iraq. And Ambassador Bremer joins me now.


MORGAN: Welcome to you, Ambassador.


MORGAN: Are you shocked, as everybody else, by these revelations today? BREMER: Yes, of course, I am. It's a sad day particularly for Mrs. Petraeus and for their children, and for the men and women in the military and now the CIA, whom he's let down.

MORGAN: I mean, he's been one of America's greatest military heroes in the last few decades, no question about that. It's an extraordinary ending of one of the great careers. You know him better than many people who will be talking about him today.

What do you think would have caused him to behave like this given he's always stood for the complete opposite?

BREMER: Well, I don't think you can ever know in an affair like this how it came about. In fact, I think one of the key questions now is when and how did the FBI counterintelligence unit find out about this affair and was there any damage done to our security through this affair? And I think it's very important to get to the bottom of that rather quickly.

MORGAN: And if it turns out that the FBI investigation was kept quiet by the White House until after the election, what would be the political ramifications of that?

BREMER: Well, that would be serious, but I would be surprised if that were the case. I've worked with the FBI for 30 years on various matters, most of them dealing with terrorism, and they are very professional. I would be very surprised if they would be susceptible to political pressure of that kind.

MORGAN: Right, but obviously the FBI has confirmed or it's been reported that they've confirmed that they were investigating General Petraeus today after his own admission and the fact he had gone to see the president. It does stretch credulity, some would argue, that this already wasn't made aware or known of at the White House before the election.

BREMER: Well, that's possible that they knew about it. I was addressing the question as to whether or not the FBI itself would keep it quiet because of the election. That's -- in my view, that's very unlikely. They're extremely professional about these things, and they obviously wanted the investigation to run its course before it became public.

MORGAN: Right, I wasn't actually talking about the FBI. I was talking about the White Housekeeping it quiet. They would be informed of the investigation given who was being investigated. I would be staggered if they weren't.

And the suggestion is they deliberately kept this quiet until the election was done and dusted.

BREMER: Well, I don't know. It's quite possible. I agree that I'm sure somebody would have informed the White House that the investigation was ongoing, but if an investigation is ongoing, the normal thing to do is to let it go on. It would not -- why would the White House decide to make it public, which would have then ended the investigation, or anyway potentially compromised it.

MORGAN: What are the consequences for the CIA? What are repercussions here? How do we get the CIA back on track?

BREMER: It could be quite serious, I agree. That's why I said it's a sad day for the men and women at the CIA to see the man who was leading them exercise such bad judgment, as he himself put it. One hopes that they can recover. There is the ongoing investigation about what happened in Benghazi during the actual attack on our embassy there, on the consulate. And that may also have repercussions for the CIA or for someone in the CIA. That remains to be seen.

But I'm a very strong believer that we need a strong and effective covert action capability and intelligence capability. And it's a sad thing if it, in any way, diminishes those capabilities.

MORGAN: There is a conspiracy theory, no more than that the moment, that this may all be linked to the fact that General Petraeus was due to appear before Congress and testify about the attack in Benghazi in the next few days. There is an AP report that came out today, which said it was 14 hours before any American military arrived on the scene, which seems, in this day and age, absolutely astonishing.

Could it be that he's fallen on his sword over an affair to protect a wider scandal?

BREMER: Well, I doubt that. I think we'll get to the bottom of the three questions involved in Benghazi. Why was security not improved in the months leading up to the attack? What actually happened during the attack, including the question you raise about why it took so long for military support to get there? And what to make of the administration's varying stories about what actually happened there.

We will get to the bottom of that with or without General Petraeus. There is no way that that's going to be aborted. We're going to find those answers.

MORGAN: Ambassador Bremer, thank you very much indeed for joining me.

BREMER: Nice to be with you.

MORGAN: Coming next, former presidential candidate Rick Santorum on the Petraeus scandal and what's next for the Republican party.


MORGAN: News of the Petraeus resignation comes on a huge day in Washington, with President Obama speaking out about the fiscal cliff and after the election. Many are wondering if both sides are want to ever reach a deal with each other.

With me now is former presidential candidate, Senator Rick Santorum. Welcome, senator. How are you?

RICK SANTORUM, FORMER SENATOR: I'm doing great. How are you?

MORGAN: I'm doing fine. We'll get to the fiscal cliff in a moment. I want to ask your reaction, though, to this extraordinary breaking news about David Petraeus, the CIA director, one of the great military men certainly of my lifetime and in American modern military history. What do you feel about what's happened?

SANTORUM: Well, it's very disturbing to be in a position like the director of the Central Intelligence Agency. We all have our personal failings, and none of us are perfect. But to put yourself in that type of position and engage in activity which is -- could compromise your ability to do your job, is something that is very, very disturbing and shows incredibly poor judgment, not just, obviously, for breaking his marital vows, but for putting himself in a position that could compromise the agency.

That is really very disturbing -- that's the only way I can put it -- that he would engage in such conduct.

MORGAN: There will be some people watching this, as they always do when these sort of sex scandals break, who say what does it got to do with his ability to do his job? What would you say to that in his particular case?

SANTORUM: Well, I mean, this is a man who has an incredible amount of knowledge and secrets and information that we don't want others to find out about. And if a -- someone who was -- would like to do ill to the United States would find that out or maybe even be involved in the -- in the planning of this extramarital affair, you don't know.

The point is this is not something -- this is not a vulnerability that you want your head intelligence person to be engaged in, and cannot be engaged in such things.

MORGAN: Let's turn to the fiscal cliff. We saw the president earlier today saying he's going to call four top leaders to the White House. He clearly wants to try and use the momentum from his election to get a deal thrashed out. Is there the will amongst senior Republicans to do business, do you think?

SANTORUM: There has to be some sort of agreement worked out. But I don't think Republicans should -- particularly House Republicans should be in a position that they're just going to do whatever the president wants. I think John Boehner was very clear that everything is on the table with respect to revenue reductions -- revenue increases as well as spending reductions. But there are certain things that aren't.

And I think what John Boehner said is right. We should not be increasing tax rates on businesses in America. So I think you're going to look at it from the standpoint of can we tighten the tax code, limit deductions? There are things we can do to simplify the code that will result in more revenue, because it will result in more growth.

I think Republicans absolutely should put those things on the table and revenue certainly should be part of the deal.

MORGAN: Some people are blaming you for Mitt Romney's failure. And I'll explain to you why before you look aghast in horror.

SANTORUM: I wish I had such power, Piers, that I could be blamed for these things.

MORGAN: Allow me to elaborate. What they're saying is if he hadn't been pushed into fairly right wing, quite extreme positions, as many seem them on social issues in his battle against the likes of you early this year for the Republican nominee race, then he wouldn't have gotten himself in this unholy mess of being branded against women, against gay rights, against all the other social issue, hot button topics that you know about. Do you plead guilty?

SANTORUM: No, I don't. Mitt Romney, from what I understand, had the positions that he articulated in this election cycle. He had the same positions four years ago. So the idea that I somehow forced him to change his opinion on anything -- I'm not aware of any position that Mitt Romney took that was changed as a result of the Republican primary.

What Mitt Romney, in my opinion, didn't do was go out and vigorously defend the beliefs that he said he espoused and didn't go on the offense. And when you're playing defense, which I believe the campaign was doing and Republicans were doing generally throughout the course of this campaign, you're not going to win.

There -- if anybody is an extremist on this issue, it's President Obama, who voted for infanticide. That is extreme. And he voted for it as a member of the Illinois State Senate, and in fact argued for it. Now that's extremism. Defending human life, if that's extreme, guilty. I want to defend all human -- innocent human life. And I will do so. But when the president says you can kill a baby after it's born, that's the extremism. And that's what Mitt Romney and I think others should have made as the case. And we did not.

MORGAN: There is a battle for the heart and soul of the Republican now, with people determined to try and find a new path to victory in 2016. From what you're saying, you think the candidate presumably should be more conservative than Mitt Romney was.

SANTORUM: Well, I ran for president, you know, last year or this year, I guess, with the idea that we should make this election about what it really is, which is big issues. Barack Obama said that he wants to transform America. And he said during the campaign, in the closing weeks, that this is about two fundamentally different visions for America.

I agree with him. But that's not what this election was about. Barack Obama made it about very little things, little small things like the Planned Parenthood funding and contraception. And he didn't make it about those two fundamentally different visions for America. And I don't think we did a very good job, either, as Republicans pointing out those fundamental differences and what type of freedom we're talking about.

MORGAN: Do you intend on running again?

SANTORUM: I don't intend to do anything right now other than spend a little time working to make sure that we don't walk away from the very principles that made our country great, and that there is at least one party that's going to stand by those founding principles. So that's my objective right now. I have an organization called Patriot Voices, which I hope people will join and stand with me in that fight. And I have got a book that just came out called "American Patriots." I have a movie called "Our Sacred Honor," of which are talking about American first principles and how they apply to dealing with the problems we have today.

I think that's what we have to get back to. And hopefully we can start that grassroots movement here to make sure that whoever our candidates are going forward espouse those values.

MORGAN: That's the longest way I've ever heard of avoiding using the word no. Congratulations, senator.

SANTORUM: Thank you very much, Piers, I appreciate that.

MORGAN: Nice talking to you again.

Coming next, will taxing the rich avoid falling off the fiscal cliff? I'll talk to Grover Norquist and Robert Reich, coming next.



OBAMA: If Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will automatically go up on January 1st -- everybody's, including the 98 percent of Americans who make less than 250,000 dollars a year. That makes no sense.


MORGAN: An economic doomsday scenario from President Obama, who is making it quite clear that wealthy Americans must do their part to save the country from falling off the fiscal cliff. He's talking about a tax increase for the rich. But can the Republicans in congress agree on it?

With me now is anti-tax crusader Grover Norquist, the president of Americans for Tax Reform, and former secretary of labor, Robert Reich, who is the author of "Beyond Outrage." Welcome to you both.

Grover Norquist, you just lost an election. The Republican party have gone down. They've been beaten by the better man, Barack Obama, because that is what the American people decided. Isn't it the sensible thing now for you to withdraw this utterly implacable position, no tax increases for the history of America ever again?

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Well, I think the president needs to face the fact that the American people went to the polls and elected a House of Representatives committed to not raising taxes. There are 30 Republican governors and a majority of the state legislators in the country are Republican.

So he did win by two points, first time in American history that somebody has ever gotten reelected president reducing his percentage of the vote. And he won by seven percent four years ago, two percent this time. He has to deal with the fact the American people are not excited about his ideas of tax increases and spending increases. And I don't think they're going to allow him to undo his commitments on spending restraint that he made only last year. And in today's speech, he tried to deny some of the spending cuts that he's already agreed to in law.

MORGAN: But 65 percent of the American public, according to the most recent polls, have no problem at all, in fact would actively encourage the wealthy being taxed a little bit more. What is wrong with that? You have a 16 trillion dollar debt. Shouldn't it be all hands to the pump? And shouldn't the wealthy just bump a few more dollars in?

NORQUIST: Well, of course, as you know, if you take the Buffett rule tax that the president has endorsed, raising taxes on people making a million dollars, that raises 48 billion dollars over a decade, which is less than half of one percent of the president's deficit spending. So it doesn't really do anything to get you to anything to balance.

The other piece of this, if you ask the same Americans, if President Obama raises taxes on you or the rich or anyone else, will that go to deficit reduction or will they spend it? Three quarters understand they'll just spend it, So there's not support for raising taxes to spend it. There might be support for raising taxes for deficit reduction, but they don't -- people quite correctly don't believe that will happen.

MORGAN: Robert Reich, what do you make of this? The president and Speaker Boehner both sort of very careful with the language they are using here, not overly committing themselves, leaving a little bit of debating room on both sides. Do you see enough positivity in the rhetoric that a deal can get done here?

ROBERT REICH, FORMER LABOR SECRETARY: I think a deal does have to get done eventually, Piers. Again, we just had a presidential election. The one issue on which Mitt Romney and the president were most apart, that is the biggest issue in the campaign where there was the clearest choice, was on whether taxes should be raised on the wealthy. And the American public obviously, by electing President Obama, had decided that they should.

Now, if nothing is done, if there is absolutely no agreement between Democrats and Republicans, then on January 1st, the Bush tax cuts expire, which means that not only do average working people have a tax increase, but the rich are going to have a very large tax increase, because they were -- they got the lion's share of the benefits of that Bush tax cuts.

Well, Republicans have to choose here. Are they going to allow everybody to suffer? Or do they think that it is appropriate to have the rich bear the lion's share of deficit reduction and the responsibility for reducing deficits by means of generating more revenues?

MORGAN: One of the problems, of course, if you do raise taxes, is a lot of Americans who would then be brought into that bracket are small business owners. And they are concerned, quite naturally, that that may slow down their ability to grow and to create jobs.

REICH: Well, that's simply not the case. I mean, first of all, we're talking about only income in excess of 250,000 dollars. We're only talking, therefore, about two percent of small business owners, and only about their incomes in excess of 250,000 dollars. I mean, if we are going back to the Clinton tax rates, that was not a huge sacrifice. We had a very good economy during the Bill Clinton years.

Small businesses did just fine. In fact, the rising tide lifts all boats, including those groups, small businesses that might be hit by the Clinton era taxes, instead of the current taxes. So there's a more basic issue here, Piers. That is the rich do not generate jobs. They are not the job creators.

The job creators in America are the vast middle class, whose spending generate jobs, because businesses that have more business will generate more jobs. Businesses that have more customers will expand and hire people. If the middle class doesn't have the money, either because their taxes go up or because they simply are on a downward trajectory in an economy that is not -- really has not been good to the middle class since George W. Bush was president, then we are going to be in trouble in terms of the kind of job growth we need.

MORGAN: Final question for you, Grover Norquist. But this is the problem. Most American people -- the average Americans go, of course they should pay a bit more tax. What the hell is the matter with them? The country is in trouble, they are the richest, they're making all the cash. Share a bit of the load.

NORQUIST: When you raise taxes, you discourage things. You discourage investment. You discourage job creation. We have a little test here. Maryland raised taxes on millionaires and then they came back and raised taxes on people making 250,000.

MORGAN: Ronald Reagan raised taxes and actually he had a great economy in his second term.

NORQUIST: Ronald Reagan took the top tax rate from 70 percent to 28 percent. We are a long way from 28 percent. We have gone all the way back up to 35. The president wants to take it up to 44, which would be very problematic.

Reagan's tax cuts, 70 percent rate down to 28, gave you growth. But he also had deregulation and free trade in addition.

MORGAN: Final word?

NORQUIST: Your party lost. You lost. Your philosophy lost.

NORQUIST: Who runs the House? How many governors are there? Thirty Republican governors. And they're busy holding down subpoenaing.

NORQUIST: The public has basically said no to your philosophy.

MORGAN: This is not a kingdom.

NORQUIST: It's time to get over it, Grover.

MORGAN: It could be a kingdom. And I could come and be your king. We're very good at that where I come from, Grover. Anyway, good to talk to you both. I'm sure we'll debate this ad infinitum.



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