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Republicans Breaking with No Tax Lobbyist; Senate Convenes in Lame Duck Session; Sandy Damage Tops $19 Billion in New York City; Biggest Online Shopping Day of the Year; Mobile Apps to Compare Deals; Activists: Syrian Bomb Kills 10 Children; FBI Top 10 Fugitive Captured; Egyptians Protest President Power Grab; Israeli Defense Minister Quitting; New Job for Jenna Bush Hager

Aired November 26, 2012 - 14:00   ET


BROOKE BALDWIN, CNN ANCHOR: Good to see you all of you. I'm Brooke Baldwin and let's get right to it, shall we?

The United States Senate is just about to convene post election lame duck session, and talk about lame: if the Senate doesn't act here, if the House doesn't act, if the president doesn't act, in unison, your taxes are going up come January 1st to help raise revenue to pay down the national debt.

Stay with me here for a moment because we'll show you exactly, you know, how much your taxes will be rising. But here's the thing, it doesn't have to happen, this predetermined jump in income taxes.

And the new parlor game on Capitol Hill is to pick the next Republican, follow me here, who is willing to break a no tax pledge made to a very powerful lobbyist in order to cut a deal with the Democrats to focus the pain of new taxes on the wealthy.

You see this picture? You see these three guys. Well, here is yet another Republican speaking just this morning.


SENATOR BOB CORKER (R), TENNESSEE: I'm not obligated on the pledge. I made Tennesseans aware I was just elected that the only thing I'm honoring is the oath that I take when I serve when I'm sworn in this January.


BALDWIN: So Republican Senator Bob Corker is saying his oath of office trumps any no tax pledge made to Washington lobbyist Grover Norquist. Republican Saxby Chambliss is saying he cares more about America and the fiscal mess we're in than he does his pledge to Grover Norquist.

So he too is ready to deal with Democrats who want to raise the tax rate of the richest 2 percent, but keep everyone else pretty much the same. Again, the deadline is January 1st. No deal in Washington and we'll all be looking at increased taxes, just as holiday expenses come due. Let me bring in my guest here to talk us through all these possible scenarios, Bob Cusack, good to have you back on the show, managing editor of the D.C. Journal, "The Hill."

Bob, let's do a little refresher. Remind us all who is Grover Norquist, talk to me about this pledge because it is not just about raising taxes, is it not?

BOB CUSACK, MANAGING EDITOR, "THE HILL": Right. It is not just about raising taxes. Basically, this is a pledge that is spearheaded by conservative activist, Grover Norquist, who is a popular figure on the right.

And he basically is -- most members but not all members of Congress on the Republican side to sign this pledge, where basically it says they're not going to increase tax rates and also if they close deductions they would use that money to lower taxes in another area.

And that's where you're seeing the Republicans break, where they're saying, listen, we're willing to close tax loopholes to reduce the deficit, now we haven't yet seen that from congressional Republican leaders, but we obviously are seeing it from prominent Republicans that you showed including Senator Graham and Senator Bob Corker.

BALDWIN: Yes, I have this question about two of those gentlemen here in a moment. But, you know, CNN actually this morning talked to Grover Norquist about doing something he's done in the past and that is to throw money into elections to then defeat incumbents who, you know, dare to break this pledge, dare to vote to raise taxes. The question was will he do it again? Here's Norquist.


GROVER NORQUIST, PRESIDENT, "AMERICANS FOR TAX REFORM": We would certainly highlight who has kept their commitment and who hasn't, but the point is historically the people who lose do so because the people in their state have figured that out.


BALDWIN: Back to, I think, where you were going a moment ago, Bob, it is interesting that when you look at the top two, two of the top Republican senators who we're talking about, who are basically flirting to break this pledge, break with Grover Norquist and consider raising taxes on the wealthy they both face re-election in 2014.

I'm talking about Saxby Chambliss and South Carolina's Lindsey Graham. Does that say to you that the political winds could be shifting a bit here?

CUSACK: I think so. I mean, to have these two senators who, you know, for the last year or so, even before the 2012 election, people were talking about a possible primary challenge, and to have Chambliss and Graham both go out front.

And say listen, the pledge isn't that important to me, that is -- that could, number one, trigger a primary contest and, remember, Republicans have eaten -- Dick Lugar lost an election -- a primary election. Senator Snowe retired because she was fearing one.

BALDWIN: Let me pause on my thought. Let's listen to a little bit more of Grover Norquist.


NORQUIST: No pledge taker has voted for a tax increase. They have 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 to 1 ratios on entitlement reform. I had long conversations with Lindsey Graham and he said I would raise taxes if -- and he lists this incredible list of reforms and entitlement that the Democrats would never give to him.

And as I suggested to him, I said, Senator, you're offering to trade a tax increase for a pink unicorn that doesn't exist.


BALDWIN: OK, pink unicorns? Can you -- you want to take a shot at translating that for me, Bob, please?

CUSACK: Well, I do think that Grover has a point in that Republicans are just not going to go along with increased taxes, unless they get something in return. And they want significant entitlement reform.

And this is something that I -- especially on Social Security, we have seen Senate Majority Leader Harry Reid said let's not mess with Social Security, signals from the White House indicating they're not going to touchdown Social Security, maybe Medicare, Medicaid, but not Social Security and Republicans will say, wait a minute, you're not serious.

We're giving ground on revenue, you got to give ground on spending and, Brooke, I think the biggest thing here is that this bill, if they get a bill, is going to be so unpopular because it is going to raise taxes and it is going to cut benefits and getting the votes to pass this is going to be enormously difficult.

BALDWIN: You bring up the benefits issue. Let me run through this, because it brings us back to the possibility of no deal whatsoever. Again, on the automatic tax increases come January 1. We're talking about a lot of stuff here.

The Bush era tax cuts expire. As does the president's so-called payroll tax holiday on Social Security deductions, follow along with me, the so-called marriage penalty returns full force. You also have extended unemployment set to expire here.

And the child tax credit drops by half. Capital gains go up. Bob, today, you know, the White House is warning that this could have a crushing impact on the U.S. economy. What are they saying about this? CUSACK: Well, that's the problem for policymakers. I do think both Republicans and Democrats they want a deal. Leaders want a deal because this really could be an economic catastrophe. I mean, that's what something that Ben Bernanke warned repeatedly.

Put politics aside at least for a little bit and try to get a deal. But both sides want to get the best deal possible and you're not, Brooke, you're not going to see any deal anytime soon because we have until January 1st.

BALDWIN: So you're saying they're going to wait until the last second?

CUSACK: Last second, right up until Christmas, if not New Year's. I mean, right now or this week when Congress comes back and into next week, you see jockeying for leverage. That's what's going to happen. No major deal is going to reach -- be reached much before Christmas if there is a deal.

BALDWIN: So no plan for Bob Cusack celebrating the New Year. In fact, you'll be at the Hill waiting in the 11th hour for hopefully a deal is what I'm hearing. Bob, thank you so much. We'll continue the conversation. I appreciate it.

Switching gears, just into us here at CNN, new damage estimates from Superstorm Sandy. I want to go to Alison Kosik who is live for us in New York at the stock exchange. What are you learning?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: What are we learning? Gosh, you know, what we learned that Sandy did quite a number on New York City, and now the damage estimates are tallied up and New York City's Mayor Michael Bloomberg is asking the federal government for $9.8 billion, with a B, $9.8 billion to help in the recovery.

Follow me here. That's after starting with the city's total public and private losses, which were estimated at $19 billion, and then you break that out, so about $4 billion was covered by private insurers, about $5 billion expected to come from FEMA.

And then come up with the $9.8 billion figure, which actually is just part of the $30 billion aid package that New York Governor Andrew Cuomo has requested.

What Mayor Bloomberg has done, Brooke, he sent a letter to the members of the New York state congressional delegation asking for this money, saying, New York City will struggle to recover in the long-term unless this money -- this federal funding is given.

BALDWIN: Was he being specific as far as where in the city the money needs to go the most?

KOSIK: Yes, you look at the letter, what Bloomberg is essentially saying is that, look, tens of thousands of people in New York City were displaced. The city of New York suffered extensive damage. New York City needs the money to repair damage and take care of expenses from city agencies. He says, listen to this, $800 million is needed just for street reconstruction, $800 million in damage. He says the money would also go toward getting small businesses that were damaged up and running again.

He said, you know what, Sandy caused a loss of $6 billion in business that just wasn't done in New York City during the storm and during the recovery. So he's trying to get help for the small businesses as well.

He also talked about significant local expenses that aren't covered by FEMA including new housing and upgrades that would restore and protect the shore so asking for a lot of money, but apparently a lot of money that is needed.

BALDWIN: It is so sad how many people are still reeling from that disaster.

KOSIK: It is. It is amazing.

BALDWIN: Alison Kosik, thank you.

And it is not just any money, Monday, it is Cyber Monday. And I know it seems obsolete, you know, since so much of us shop online, so much of the time, but go with me here because you get to avoid this.

Maybe you were in the midst of this, something like this that played out across stores across the country Friday on to the weekend, ugliness of the holiday rush, some of the worst of which we saw over the weekend when 247 million people went shopping, 247 million.

That's according to the National Retail Federation, but there are incredible deals to be had, all yours with the click of a mouse. Projections are there will be a colossal amount of clicking.

Industry analyst calm score predicts Cyber Monday scores will run as high as $1.5 billion, the highest online spending day of the entire year. Let's go to CNN Money's tech reporter, Laurie Segall.

Laurie, I just have to ask, I mean, we're talking about that this morning in our editorial meeting is Cyber Monday really obsolete or will today bring in so much money that it really does affect the overall economy?

LAURIE SEGALL, TECH REPORTER, CNN MONEY: Sure. Brooke, I asked myself the same question. We shop all the time online. So why is today really that different? But, you know, I spoke with one analyst and he said, Laurie, today, Cyber Monday, is just the Super Bowl of online shopping.

It really is the day. He said that, you know, all signs point to that being the case today. That being said, you know, the nature of the holiday has changed. Cyber Monday used to be where we came into our office, first time we had access to high speed internet, and that's completely changed. Now we have smartphones. We have tablets. We have high speed internet at home. So the deals are coming a little bit earlier. But the number of people that are actually going to use their smartphones to shop today, that's a pretty eye opening number.

We take a look at these numbers, Brooke, the shoppers planning to use their smartphones today, 20.4 million people planning to use their smartphones, that's up 14.4 percent from 2011 where the number was at 17.8 million.

And 2009, it's a huge leap from there with 3.6 million people using their smartphones to shop. I think it is safe to say that people are still going to spend a lot of money online today, but they might do it in a way that is not completely traditional at their computer.

They might be using their smartphones, but will this affect the economy? That number, that $1.5 billion, that dollar projection, that's definitely a significant number. I think we're going to have to wait and see.

You know, stores, they say they can make up to 40 percent of their annual sales in November and December. So I think it will be kind of number that is significant, but we're going to have to wait for the holiday season to roll out and see if people are spending money online.

BALDWIN: So what about though and I know you have the apps on the phone to hunt down the best deals. Which are the apps we have to have?

SEGALL: I do. You know me well. I have plenty of these. We actually went out in New York City and we tested them. You're looking right now on one called "Red Laser." I looked for a Furby using this. Essentially, it showed me all the Furbys nearby in the area.

That's Black Friday, it takes all the major retailers, they put out their deals there and you can use it, you can purchase online, you can go in the store and buy -- there is several different apps that are allowing you to combine this online/offline experience.

You looked at one called "Snap Tell." You can take different pictures of DVDs and this is in-store and will show you nearby if you can get a cheaper deal or go online and get a cheaper deal.

So this is a huge trend we're seeing this year, combination of offline and online. This one is a great one, Brooke. It's called "Lemon." It's actually a way to store all your receipts.

You're definitely going to have a lot of receipts if you're shopping during the holidays, so this digitally stores all of them. You can use it as a second wallet.

BALDWIN: That's smart. It's tough to keep them all together. I'm horrible at keeping together -- Laurie Segall, thank you very much for us in New York on all things shopping.

Still ahead, NASA sending an astronaut to space for an entire year. You're probably going to recognize the guy who is making history.

Plus, images of unspeakable horror, children killed by a bomb while just playing outside. You'll hear CNN's reporting as the crisis continues in Syria.


BALDWIN: The next story is a tough one to tell, but it needs to be told. It comes from Syria, contains photos of absolute unspeakable horror that were posted on YouTube by opposition activists. Those activists say these pictures show a Syrian government air strike that killed 10 children as they were just out playing outdoors.

We have the story here from CNN's Nick Paton Walsh. Please, quick warning, it shows graphic video of the aftermath of that air raid on a village just outside of Damascus.


NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT (voice-over): These disturbing images show what happens after a children's playground is hit, according to activists by a cluster bomb. Refugees with nowhere else to hide, apparently hit by a single deadly device dropped by a jet.

Some cluster bombs released smaller explosives to cause maximum devastation against softer targets. What do these children have to do with anything, Bashar, yells one man? At least 10 children killed according to activists who said they found the remains of the bomb around the tiny village.

CNN can't verify these pictures or claims cluster bombs were used, though human rights watch say activists images from the scene show cluster munitions. But activists say civilians have been hit before like the capture Sunday of this important air base not far away.

UNIDENTIFIED FEMALE: There is actually no logic at all attacking such a small village. This is what you got from us? Look what we're going to do?

WALSH: The injuries to these children horrific, no matter what the device used. The toll on the youngest and easiest to kill is constant and unspeakable. Nick Paton Walsh, CNN, Beirut.


BALDWIN: I know it is tough to look at, but Jim Clancy, CNN International, we have to talk about it. When I read about that yesterday, ten children, all under the age of 15, is this just the height of desperation?

JIM CLANCY, CNN INTERNATIONAL: You know, it's -- it draws mixed questions, what is happening in Syria? I knew -- I went to Syria a lot. This is a remarkable civilization. We call it that, the people of Syria were wonderful. And above all, like all, you know, enclaves of humanity, they cared about their children more than anything else. And here we have got 20 months of conflict and the regime, yes, it has been bombing.

The rebels, its own people, there have been no negotiation and now an incident where so many people were killed, all at one time. Children were targeted throughout this whole mess. They died.

We don't know the particulars in this case, but it shows how desperate the regime is to preserve its own power and how that is going to be reflected in the equal desperation and determination of the rebels to oust this regime.

BALDWIN: You mentioned the rebels, I feel like a lot of Americans have been sort of turned and paying more attention in the last week to what has been happening between gauze why and Israel and playing out in Egypt. Bring us up to speed. Are the rebels made some advancements?

CLANCY: Well, the rebels have scored some successes. They have captured a couple of rather small, but still significant military installations, one little air base, they got a tank out of it.

They destroyed a couple of helicopters, destroyed another couple of tanks that was seen -- because it was very close to Damascus, seen as a major victory for them. But moreover, moreover they changed their strategy, their strategy of trying to go into a major city, take it, and hold it.

And they get pulverized in bombing campaigns that took so much of a toll on the civilian population. Going right after the military, the military centers in and doing so, they're gaining arms and expertise.

There are more people that are joining them. The Syrian military still a formidable force and the rebels probably not a match for them toe to toe but gaining strength.

BALDWIN: We know the geography, Turkey to the north, Turkey considering putting missiles on the border now?

CLANCY: They're asking NATO to consider it. They're sending an advance team to look at the situation, saying it would only be used defensively. But I see this conflict in some ways migrating towards Turkey. Today, we had thousands of people --

BALDWIN: It's the last thing Turkey wants.

CLANCY: Well, know, it is what is happening because some of the aid for the rebels is coming through there. They now have bases with these patriot missile batteries used to protect the rebel bases there inside Syria, but on the border with Turkey.

Got the Russians with a warship in the Mediterranean, the U.S. has warships in the Mediterranean. All of this says to us that this situation is coming to a peak or least our military and intelligence leaders think it is coming to a peak. You have two task forces there and both of them are saying, the Americans are saying we are doing this in case we have to evacuate our civilians and the Russians are saying exactly the same thing.

BALDWIN: Something has to happen. Jim Clancy, thank you.

He was on the run for 14 years until now. How the feds just caught one of America's most wanted fugitives.

Plus, not even a week after the ceasefire with Hamas, one of Israel's leaders calling it quits now. Why Ehud Barak is stepping down.


BALDWIN: You may not recognize his name, but Jose Luis Saenz is accused of some pretty horrible crimes. Right now, Saenz is finally behind bars after eluding arrest since 1998. He is the suspect in four murders in L.A. and he made it to the FBI's ten most wanted list.

He was nabbed Thanksgiving Day in Guadalajara, Mexico. The arrest was a big enough deal. A couple of hours ago, federal authorities held a news conference. Take a listen.


BILL LEWIS, FBI ASSISTANT DIRECTOR IN CHARGE: Catching a top ten fugitive in the FBI is a big deal. That's something that all of our FBI agents aspire to do, so for the folks back behind me to have the opportunity to be involved in that is really a big thing and I told them I wanted them to share in this press conference.


BALDWIN: Here's one of the crimes Saenz is accused of, the kidnapping, rape and murder of his own child's mother. FBI says she threatened to turn Saenz in for two murders he's accused of committing in 1998. The fed says his latest job was as a hired gun for the drug cartels.

In the streets of Egypt today, scenes just like this one, two sides clashing over President Mohamed Morsi's decision to grant himself sweeping new powers. The violent protests played out behind closed doors, Morsi met with Egypt's top judges to explain his move. These are the same judges who are now banned from overturning any decision he makes until a new constitution is finalized.

Israel, a country in the midst of very fragile ceasefire with Hamas, and now also its own political upheaval, long time Israeli Defense Minister Ehud Barak making the surprise announcement he's quitting. He says he wants to spend more time with his family and make room for new political figures. Here he was.


EHUD BARAK, ISRAELI DEFENSE MINISTER (through translator): I feel it is important that other people should take leading positions in Israel. Change is in the positions of power is a good thing. There are many ways to contribute to society and the country and not necessarily through politics.


BALDWIN: Barak says he will see out his term, staying on as defense minister until a new cabinet is formed next January. Barak played a crucial role as a key opponent to Iran's nuclear program.

And forget George, forget Jeb or W. The next Bush to watch may be Jenna. The daughter of former President George W. Bush and former First Lady Laura Bush, Jenna Bush Hager seen here with her mom has a new job as editor at large for "Southern Living" magazine.

She's already a busy gal, contributing correspondent for NBC's "Today" show. You can catch her work in March. "Southern Living" is owned by Time Warner, which is our parent company at CNN.

In case you missed the signs, perhaps you're trying to avoid the signs that Christmas is coming. Here is another one for you, the arrival of the U.S. Christmas tree. This year's tree stands 65 feet tall, it is a spruce.

And it comes to Washington, D.C. from the White River National Forest in Colorado. Once the tree is decorated, it will display 5,000 ornaments, all of them hand crafted by Coloradans.

Question for you, have you bought your ticket for this week's record $425 million lottery jackpot? Find out what your chances are of winning that Powerball drawing.