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36 Days Till Fiscal Cliff; GDP May Slow Next Year; Warren Buffett Weighs In; Americans Want Compromise; Republicans Break with Norquist; Less Heat on Susan Rice; Generic Lipitor Recalled
Aired November 26, 2012 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, ANCHOR, "CNN NEWSROOM": So, if you were a key decision- maker in a company that faced a $5 billion hit in a little over a month, you probably wouldn't take 10 days off for Thanksgiving, but that's how Congress rolls.
And now with just 36 days remaining to avoid the so-called "fiscal cliff," senators are coming back to work. The House returns tomorrow
The White House is working both sides of the Beltway to maintain Bush-era tax rates for the poor and middle class, while letting those lower rates expire for higher earners.
This morning, the White House put out numbers claiming, if we fall off the cliff, consumers will be spending less money next year. How much less, exactly? $200 billion in fiscal 2013 alone. That would be a huge, huge hit on retailers.
Now, tax hikes are the biggest part, but not the only part of the fiscal cliff, seen here as a fiscal cliff.
The new year will also bring more than $100 billion in spending cuts, if -- if Congress and the president can't agree on some other course.
All of this brings me to my friend, CNN's Christine Romans, with more details on the toll on consumer spending. We threw out that number, $200 billion. What does that mean?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That comes straight from the White House, the White House really trying to ride the coattails of Black Friday weekend when we're throwing around how much money consumers spent over the past four days.
The White House is saying, if these tax cuts go away for the middle class and taxes rise and the AMT patch goes away and taxes rise on the middle class, it would dramatically slow growth in GDP next year and would mean $200 billion less in consumers' pockets.
What is this right out of the White House report? This reduction of $200 billion is approximately four times the total amount of the 226 million shoppers that they spent on Black Friday weekend last year.
So, they're trying to show you just how important all that money is in the economy if you have those taxes rise on the middle class. It's really, John, the latest salvo from the White House. It comes on the same day you have Warren Buffett writing in "The New York Times" in an op-ed saying rich is $500,000 a year and let's tax them. Let's have a 30-percent minimum tax for the income above $1 million of rich people.
Look what he said here. The "Forbes 400," the wealthiest individuals in America hit a new group record for wealth this year, $1.7 trillion. That's more than five times the $300 billion total in 1992.
He says, you know, my gang has done pretty well, so leave the middle class alone.
And so these two kind of the 1-2 punch from the White House perspective, at least, today on what we should be doing in debt talks.
BERMAN: You know, Buffett is interesting. Buffett has said he doesn't think it will be that big a deal if we go off the cliff on January 1st.
ROMANS: He says don't worry about raising taxes on investments and on income from investments. He said, I will do a good deal because it's a good deal, not because my taxes are going to be a certain rate.
So, he has pounded this -- beat this drum for some time, but this is the White House, the latest from the White House on the fiscal cliff and how it would hurt the middle class.
BERMAN: All right, Christine Romans, great to see you yet again today. Can't get enough Romans in my day.
All right, the White House election shows where the people stand on the economy, the budget, the fiscal cliff, but today we have some very specific answers to very interesting questions.
CNN's political editor Paul Steinhauser joins me live now from Washington with some of those questions and answers.
First of all, Paul, are people even paying attention to the fiscal cliff?
PAUL STEINHAUSER, CNN POLITICAL EDITOR: It seems they are and they realize that there's some serious things at stake here, John.
Look at this, a CNN/ORC national poll just out this morning and we asked, what will the effect be on the country if it goes over the fiscal cliff?
Nearly 7-in-10 say major problems for the country, maybe even a crisis, with only about 3-in-10 saying minor and no problems.
And John, personally, about three-quarters tell us they think their pocketbooks will be affected if the country falls off the fiscal cliff.
John? BERMAN: We've heard both sides fighting about the fiscal cliff, what they want to see in the deal, what they don't want to see in the deal.
What do Americans say they want to see in the deal?
STEINHAUSER: They want compromise and what do they specifically want in the deal? Well, take a look at these numbers.
About two-thirds say they want spending cuts and some tax increases combined.
Only about 3-in-10 say just spending cuts.
And John, it's interesting. When we asked just Republicans that same question, a slight majority said, yes, spending cuts and tax increases.
BERMAN: Interesting. Do people think there is going to be a deal?
STEINHAUSER: Not so optimistic. Look at this question. I love it.
This was asked by Keating Holland, our polling director. He asked, do you think Washington officials, people doing these negotiations, will act like responsible adults, or spoiled children?
Well, I think it's pretty clear what the answer is there. Two-thirds said spoiled children.
And if there is no deal, the blame game, John, who will get blamed more? Well, look at this number, 45 percent say Republicans in Congress will get blamed.
Only 34 percent said President Obama will get the blame and 15 percent said, you know what? Everybody is going to get the blame if there is no deal.
BERMAN: These spoiled children in the capitol. All right, Paul Steinhauser, always great talking to you.
And in just a minute, we're going to look at the new apparent willingness of some Republican senators to raise taxes. It's interesting.
BERMAN: So with the fiscal cliff fast approaching, it seems some Republicans are starting to break ranks, mot necessarily with fellow elected officials, but with someone who in the past sometimes held even more power.
His name is Grover Norquist. He's the head of the group called Americans for Tax Reform and 279 members of the current Congress signed that group's pledge not to raise taxes ever. But a few of the signers are now saying the pledge is standing in the way of getting a deal done, Georgia Senator Saxby Chambliss, South Carolina Senator Lindsey Graham and New York Congressman Peter King.
Today, Senator Bob Corker of Tennessee joined this growing chorus. And here's how Grover -- this is how Grover Norquist responded this morning on CNN's "Starting Point."
(BEGIN VIDEO CLIP)
GROVER NORQUIST, AMERICANS FOR TAX REFORM: No pledge-taker has voted for a tax increase.
They've had some people discussing impure thoughts on national television. However, even Lindsey Graham, if you listen to him, he would support higher taxes if it was used to pay down the debt.
Of course, it won't be. It would be spent.
If he got, you know, 10-1 ratios on entitlement reform.
I've had long conversations with Lindsey Graham and he would -- he says, I would raise taxes if, and then lists this incredible list of reforms in entitlements that the Democrats would never give him.
And as I suggested, I said, Senator, you're offering to trade a tax increase for a pink unicorn.
(END VIDEO CLIP)
BERMAN: All right. Pink unicorns, part of the fiscal cliff discussions now.
Let me bring in CNN contributor Ana Navarro who claims she has never seen me during the daylight.
It's great to see you during the daylight, Ana.
My question for you is ...
ANA NAVARRO, CNN REPUBLICAN ANALYST: How are you, John?
BERMAN: Good. I'm doing well. Thank you.
Is this overture, these statements from the people like Saxby Chambliss, Lindsey Graham, Peter King -- is this the break that people were hoping to see in terms of reaching a deal?
NAVARRO: Look, I think it's an important moment.
I think what people are saying is, this is not about pledges. Let's not allow for the tail to wag the dog.
This is not about a pledge. This is about finding a solution.
Let's not be boxed in. Let's have the ability to be creative, think outside the box and come up with a solution that works for America.
And I think they're getting sick of being held to pledge here, pledge there. You know, it's almost like read my lips. No new pledges.
BERMAN: Let me just read the pledge, so people know what we're talking about here.
It says, number one, oppose all efforts to increase the marginal tax rates for individuals and/or businesses.
And, number two, and this can be a doozy, oppose any net reduction or eliminations of deductions unless evenly matched by reducing tax rates.
So, Ana, what do you think the consequence is going to be?
You've been around politics a long time. What if there are Republicans, especially, who do break ranks and vote to raise taxes or raise revenue?
NAVARRO: Look, I think it depends, John.
There are some Republicans who I know who have never signed a pledge. I can tell you Jeb Bush got elected twice as governor of Florida without signing the pledge and, if you ask him about that pledge, he'll say to you and has said it in public, you do not outsource your convictions.
And there's congressmen and congress people here in Florida who have never signed the pledge and they are good congress people who get elected, year after year, and they're not vulnerable.
Now, if you are in a vulnerable seat like a Saxby Chambliss or a Lindsey Graham are, who could be vulnerable in a primary, you are taking some risks, because you're going now against -- it's not a pledge. You're going against basically a Washington organization that takes reprisals against people who, you know, don't tow the line.
But I commend Saxby and Lindsey Graham for taking this step. I think they have -- they owe their -- I think they owe their loyalty and their allegiance to their constituents, to their country.
I think they need to pledge to -- you know, like Lindsey said, we're not going to go broke. It doesn't mean that you don't sign a pledge or you don't live up to a pledge, doesn't mean you're not against raising taxes.
It just means you're not up to signing a pledge.
BERMAN: But, you know, we do live in the real world and you can't imagine political ads coming out in 2014 that says something like, you know, Saxby Chambliss promised not to vote to raise taxes then he did. That could happen.
NAVARRO: Well, yeah, but here's the thing. You're talking about guys, you know, in Saxby Chambliss, Peter King, Corker, Lindsey Graham, who have been fiscal conservatives their entire lives, so it's very hard, I think, to make the argument.
I think it's silly, also, to have this circular fire squad against good Republicans who have been getting elected, and, you know, in order -- I think it's silly to take a circular fire squad and take him out during a primary because of some piece of paper that got signed or not signed, lived up to or not lived up to, if, in fact, they are fiscal conservatives, which is the entire point of this discussion.
We are losing the point of it because we're getting so hung up on this, you know, piece of paper. I just -- I really find it somewhat silly, the entire thing.
BERMAN: Some people have suggested there is an interesting procedural solution to this idea and that would be to actually let everything go of the cliff, even just for a day.
What would happen then is the tax rates would automatically go up on everyone. Again, even just a day.
Then on January 2nd or on January 3rd or January 4th, everyone could come back together. They could vote for tax cuts for the middle classes and lower classes, not touch, you know, the people making $250,000 or higher.
But then no one would have to actually vote to raise taxes. It would happen automatically. Follow what I'm saying?
NAVARRO: I follow what you're saying. I'm not sure it's easy to follow, though.
What Americans need is certainty. Certainly, as we head into the holidays, and it's the time for holiday spending, certainty becomes that much more important if we're going to continue the wheels of the economy churning.
And, you know, all these types of contortions that Washington can come up with seem somewhat difficult to follow for the average American. I think.
You know, nothing should be off the table, John, when it comes to let's fix the issue, let's address the problem.
Let's have a responsible solution that tackles taxes, that tackles entitlements, that tackles the deficit.
Let's have a comprehensive approach here that is a serious approach, no more kicking the can down the road.
Let's do it for real this time.
BERMAN: Fewer contortions, usually better. I think we can all agree on that.
Ana Navarro, great to see you any time of day.
All right, guys, here's the score card for the no-tax pledge. Two- hundred-thirty-eight House members and 41 senators have signed the pledge.
Of those, only three are actually Democrats and two of those three Democrats will be out of office in January.
BERMAN: So the heated debate over the possible elimination of Susan Rice as Secretary of State appears to be cooling off.
You'll recall that rice was the target of heated criticism from Senators John McCain and Lindsey Graham and other Republicans after saying the assault on the U.S. consulate in Benghazi Libya was triggered by an anti-Islam video which killed Chris Stevens and three American colleagues.
Rice says it was based on unclassified talking points provided by the CIA. The CIA said the assault was, in fact, a terrorist attack.
Rice, the U.S. ambassador to the United Nations, is viewed as President Obama's top pick to replace Secretary of State Hillary Clinton, who plans to step down early next year.
Both Senators McCain and Lindsey Graham previously vowed to block her possible nomination.
I'm joined now by Dan Lothian at the White House for us. And Dan, what do we hear from McCain and graham this weekend? It seems maybe they provided a little bit of wiggle-room now.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It certainly does appear that way
What we're seeing is a change in tone. There had been sort of this harsh rhetoric they wanted to block this nomination, said they would block this nomination and now there seems to be this tone where they want to give Susan Rice a chance to explain herself, that they're willing to sit down and talk over these issues with her.
Have listen to what Senator McCain had to say about this over the weekend.
(BEGIN VIDEO CLIP)
SENATOR JOHN MCCAIN (R), ARIZONA: I think she deserves the ability and the opportunity to explain herself and her position, just as she said.
But she is not the problem. The problem is the President of the United States.
(END VIDEO CLIP)
LOTHIAN: Now, again, we should point out that she has not been nominated for this post, but there's a lot of speculation that she is the top choice from this White House to replace Secretary Clinton when she departs. Also, another name, John Kerry, on that list, but again, nothing definite on that.
But nonetheless, this is something that has been getting a lot of attention, pushback from Senator McCain and other Republicans, and now that apparent change in tone, John.
BERMAN: Any sense on why we're seeing that change in tone? Because the comments really do appear quite different than what they were saying.
LOTHIAN: They do. And you know, we've reached out to Senator McCain and others and so far we don't have a clear explanation for what's behind this change.
I mean, there's speculation that perhaps this is not a fight, that the senator and other Republicans wanted to take on right now, but again, have not been able to nail down why that shift.
We're just talking a matter of days between that shift, so something had to have come up. We simply don't know yet why.
BERMAN: Right. Susan Rice did speak for the first time. We heard her voice for the first time last week or for the first time in a while and maybe that shook thing up. Any comments from the White House?
LOTHIAN: Nothing yet from the White House. We've reached out to a number of folks here.
One of the things I should point out, though, is while they're easing up on Susan Rice, they're not easing up on the White House and the president. There's still a lot of criticism at this president about when they decided that this was a terror attack.
And when, you know, this sort of change in the narrative because the White House points back to very early on, the president referring to it as a terror attack.
But then after that, a narrative seemed to be this was something that was sparked by this anti-Muslim video and then finally came around to calling it a terrorist attack.
So there's still a lot of questions from Republicans on this White House and coming from senator McCain and others.
They want to know exactly when the White House knew what the information, when they knew it and why they didn't talk about this as far as being a terrorist attack early on.
BERMAN: It's a great point, Dan. They may be easing up on Susan Rice, but not the White House. Then again, President Obama doesn't need Senate confirmation.
LOTHIAN: That's right. He doesn't. I mean, this is something the president doesn't need at all, but, you know, again, it's not -- there's so many other things on the plate right now.
We're talking about the fiscal cliff. That's been getting a lot of attention today. That's something that many Americans view as a possible crisis, if it's not resolved by the end of the year.
Those are the big issues that this White House and lawmakers up on Capitol Hill will be focusing on this week.
Susan Rice, again, as I should point out, has not been nominated, just a lot of speculation she is the top choice to replace Secretary Clinton.
BERMAN: All right, Dan Lothian, great to talk to you.
BERMAN: We'll be right back.
BERMAN: So millions of Americans take cholesterol-lowering drugs. Now, one of those drugs is being recalled for possibly containing specks of glass.
That's right. specks of glass.
Joining me now is senior medical correspondent Elizabeth Cohen. Elizabeth, has anyone been hurt by this?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Not that we know of, John, but hearing there might possibly be specks of glass in your generic Lipitor or any drug is really pretty startling.
The company that makes this generic version called Ranbaxy say the specks are less than a millimeter in size.
Here's what you need to know. The drug is called Atorvastatin. That's generic Lipitor.
It's made by Ranbaxy Pharmaceuticals and only certain lot numbers of certain dosages are being recalled.
You can find out what they are at CNN.com/empoweredpatient.
BERMAN: you see it's just a little bit of glass, but still, it's glass. Any idea how this happens?
COHEN: You know, it's not entirely clear. It's not clear, actually at all how this happens. We have no idea.
We have been calling the FDA. We have also been calling Ranbaxy for two days now and we haven't gotten any answers. But one thing I think, John, Americans are sort of under a false impression on is sometimes they think the FDA is constantly at each of these plants making sure everything is safe ad that's simply not true.
The FDA inspects manufacturing plants maybe about every other year on average, so there's plenty of time for something to go wrong when the inspectors are not there.
BERMAN: You alluded to it before.
If you are taking one of these drugs, what are you supposed to do now?
COHEN: This is where it gets a little weird. Here's the situation. You would think that this would mean that if you're taking this generic brand of Lipitor, you should go to your medicine cabinet and throw it away.
But we talked to folks at Express Scripts, the mail-order pharmaceutical company, and they said no, if it's your medical cabinet, you can take it.
They said this is a pharmacy level recall, which means pharmacies are supposed to get rid of their stock, but, in fact, you can keep taking it if it's in your medicine cabinet, which I must say doesn't make sense.
We called the FDA. We asked them repeatedly to clarify. They have not gotten back to us with a clarification.
The drug company has not gotten back to us with a clarification. The only thing out there is this statement by Ranbaxy on their website and nowhere does it say that you should throw away what's in your medicine cabinet.
So, I'm afraid I'm in the unfortunate position of saying I'm not really sure what you're supposed to do if this is in your medicine cabinet.
BERMAN: That does seem like a really, really confusing message.
COHEN: It is. Certainly, if I had this in my medicine cabinet, I would be concerned about taking it.
BERMAN: Indeed. Elizabeth Cohen, great talking to you. Thanks very much.
And for more information about which lots have been recalled and for this confusion, go to CNN.com/empoweredpatient.
BERMAN: Outrage against Egyptian president Mohamed Morsi this hour shows no sign of dying down.
Thousands of demonstrators are still in Cairo's Tahrir Square, venting their opposition to Morsi's move granting himself sweeping new powers.