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Fiscal Cliff: 35 Days and Counting; The End of the Pledge?; Truce Holds Between Israel, Hamas

Aired November 26, 2012 - 08:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Our team this morning: Roland Martin is CNN's political analyst, host of "Washington Watch with Roland Martin" on TV One. Chrystia Freeland is with us. She's a digital editor for "Thomson Reuters", author of "Plutocrats." Republican pollster Kellyanne Conway is with us.

You were so right in all your polling, when a lot of others weren't quite right.

KELLYANNE CONWAY, REPUBLICAN POLLSTER: I think I'm the only Republican pollster that said Obama would win, that they'd win those Senate seats. I didn't make any friends, but I have a lot of clients now.


CONWAY: Not really. Their modeling is going to improve.

O'BRIEN: Yes, I would imagine.

"EARLY START" co-anchor John Berman is with us. Christine Romans sticks around as well.

Let's talk about lame duck lawmakers who are heading back to work today. They have 35 days to figure out how to keep the country from falling off the fiscal cliff. A couple of key Republican senators, Saxby Chambliss and Lindsey Graham, now on record saying they'd be willing to break their no tax pledge to get a deal done.

According to a brand-new CNN/ORC poll, that's what the American people would like to hear. Sixty-eight percent of those polled say the fiscal cliff could create major problems for this country or even a crisis because of the massive spending cuts and tax hikes that it would trigger.

We begin with Dan Lothian. He's at the White House this morning.

So, the Senate first goes back to work. House returns tomorrow. What do you realistically expect -- I know, I know. But take a guess for me. What do you expect from this kind of lame duck Congress?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, you know, Soledad, the hope is there can be compromise and there can be agreement because, as you pointed out, the Americans out there believe that there could be a crisis here if an agreement is not reached. And so, you're seeing as you pointed out as well, that Republicans are softening this -- their approach when it comes to tax hikes. This is a no tax hike pledge that they made back in 1986.

First, it was Senator Saxby Chambliss who backed away from that. Now, you have Senator Lindsey Graham as well who weighed in it over the weekend. Take a listen.


SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: I want to buy down debt and cut rates to create jobs. But I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform.


LOTHIAN: Of course, entitlement, that is the key. President Obama has indicated in the past willingness to put entitlements on the table. But those on the left of his party, his base, do not want entitlements to be part of this.

Americans believe that there should be a mix of both not only spending cuts but also tax increase according to a CNN/ORC poll, 67 percent say that, 29 percent say only spending cuts. As for who will get the blame if we, in fact, do go off that fiscal cliff, 45 percent say the GOP, 34 percent say President Obama, 15 percent say both.

Now, as Congress returns to Washington, the White House coming out with a new report saying that if taxes go up on those middle class families, those making $250,000 a year, that consumer spending will drop next year by nearly $200 billion. That's a continuing effort by this White House to show that middle-class families need relief. Wealthier Americans need to pay more -- Soledad.

O'BRIEN: Dan Lothian for us this morning. Thank you, Dan. Appreciate the update.

I want to turn now to Grover Norquist. He's the author of "Debacle: Obama's War on Jobs and Growth and What We Can Now Do to Regain our Future." Talk a little more about the impact of what stepping away from this tax pledge would be.

Nice to see you, Grover. Thank you for joining us. As always, we appreciate it.

You heard Lindsey Graham --


O'BRIEN: Thank you. Appreciate that.

You heard Lindsey Graham just a moment ago. Peter King talked about -- Saxby Chambliss as well. Here's what he said.


REP. PETER KING, (R) NEW YORK: I agree entirely with Saxby Chambliss. A pledge you signed 20 years ago, 18 years ago, is for that Congress. For instance, if I were in Congress in 1941, I would have signed -- supported a declaration of war against Japan. I'm not going to attack Japan today. The world has changed.


O'BRIEN: Senator John McCain weighed in as well. Here's what he said.

Oh, I'm sorry. Let me read to you what he said. "Fewer and fewer people are signing this, quote, 'pledge'."

Do you worry that this pledge is losing its grip on lawmakers?

NORQUIST: Look, Soledad, as you know, the people making this case, the three -- the two senators and the congressman that were put forward, they all said that two years ago when we were arguing over the debt ceiling limit. So, their position hasn't changed. And during the debt ceiling limit, we cut spending, we didn't raise taxes.

So other Republicans did not listen to Peter King or these others and say, oh, let's go raise taxes. They're speaking for themselves.

I do want to correct one thing. Peter King knows -- Congressman Peter King of New York -- knows full well that the pledge that he signed and others have, it's for while you're in Congress. It's not for a two- year period. And it's the commitment not to raise taxes.

O'BRIEN: I'm going to explain that actually, if you don't mind. Because, right, it sounded to me he was sort of saying you have to re- up it for it to be legal or whatever the right word is.

NORQUIST: First of all, it's explained to everyone when they sign, it's in writing with them when they sign. That it's a commitment while you're in -- you know, while you're in the House or while you're in the Senate. If you run for a different office, you take it again.

And so, LaTourette, the congressman from Ohio, who's leaving partly because of this, I think, once tried to make that case. But it doesn't pass the laugh test. So that's an odd position.

If you want to go to your voters and say, I promised you this and I'm breaking my promise, you can have that conversation with them. But you don't have an argument with me. You've made a commitment to your voters.

O'BRIEN: Right. But it is, to some degree, I know you like to sort of step back and act as if that you don't really have that much to do with the pledge. But the pledge does come from you.

I mean, I've read a lot. Last week when we were talking, too, you sort of said the same thing. This -- you know, we've shown this a million times. This pledge comes, right, Americans for Tax Reform. You're the founder. You're the president.

This is really your pledge, right? And they mail it in to you in Washington, D.C., right?

NORQUIST: We share it. It's on our Web site. We share it with voters. The role of Americans for Tax Reform has is we encourage candidates to make a commitment to say, look, when you come to Washington, you have one of two choices. You can either reform government so that it spends less and works better or, you can raise taxes to keep doing all the things we've been doing that haven't worked very well.

We do need spending restraint. And it would also be nice to have more revenue.

O'BRIEN: So --

NORQUIST: If we had Reagan levels of growth in this country for the recovery instead of Obama's recovery, Reagan's recovery versus Obama's recovery, 10 million Americans who are today out of work would have jobs.

O'BRIEN: So do you worry, though --

NORQUIST: And taxes would be -- revenue would be higher.

O'BRIEN: -- with negotiation in the air, do you worry that people are going to turn and basically rip up their pledges? Because as much as you say the three we've heard from is sort of old news, I think there's a lot of sense that they could inspire other Republicans who have signed this pledge that gets mailed back to you, you know, to do the same thing. Do you worry about that, that your pledge becomes kind of moot?

NORQUIST: You talked about mailing it to me. Chambliss had a blow-up of it four feet by five feet on his campaign headquarters when he ran his campaign.

O'BRIEN: Not anymore.

NORQUIST: So, he didn't send it to me. His signature didn't go away. And his commitment didn't go away.

O'BRIEN: Do you worry though? OK, I got you on that.


O'BRIEN: So, is there -- do you have a concern that if, in fact, as -- if more Republicans say, listen, we've got to compromise. This is now going to be on the table. And the pledge starts to lose its grip -- one, are you concerned about that? Two, what do you do about that?

I mean, do you now target the Republicans who are changing their mind with the money your organization raises and puts to elections?

NORQUIST: First of all, no pledge taker has voted for a tax increase. You'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 only -- he says I would raise taxes if -- and then he lists this incredible list of reforms and entitlements that the Democrats would never give 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.

O'BRIEN: You're saying this is never going to happen -- because if a Republican says, you know what, I am actually not going to go with the pledge that I have signed and I'm going to, you know, do this compromise and vote for that, would you then target that lawmaker? Would you say: you know, you're lying, you changed your mind from the pledge, now I'm going to put the substantial weight and efforts of your organization to try to unseat that Republican candidate?

NORQUIST: Look, George Herbert Walker Bush broke his commitment to the American people. I don't think the Americans for Tax Reform even put out a press release. Somehow the American people figured out that he'd broken his commitment to them and he couldn't get 38 percent of the vote when he ran in a general. He didn't lose in a primary. He lost in a general election.

Raising taxes is bad for the economy. We ought to be growing the economy. If we grew at 4 percent instead of 2 percent, the government would net --

O'BRIEN: You're wearing me out today, Grover. I hear you. Would you target someone?

NORQUIST: Well, 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.

Look, two quick things. We ought to have these negotiations in front of C-Span cameras --

O'BRIEN: I support that.

NORQUIST: -- so that not just you have me on here saying shouldn't you raise taxes, you should ask the Obama administration for four years, you've done no entitlement reform. Put something on the table for four years --

O'BRIEN: I'd like to see how all the negotiations are done. I support that. What's your second thing?

NORQUIST: On C-Span -- CNN can be there, too.

But, secondly, when it's finished, when it's decided, write it down. Put it online for seven days. So the American people can read it.

Don't TARP us again. Don't rush us and say, sign this, sign this. It's really good. Let the American people read it.

If we do those two things Lindsey Graham will not be voting for tax increase because he'll be able to find out exactly what's in it and no one will get tricked into thinking there are real spending cuts when there aren't or the tax changes are de minimis when they're not. Let's have it open.

Why do the taxpayers want it open and the spending interest want it hidden? There's a reason for that.

O'BRIEN: I would like to see it on CNN and C-SPAN for sure.


O'BRIEN: We always like talking to you about this.

Grover Norquist is going to be talking to Piers Morgan more time tonight. That's obviously at 9:00 p.m. Eastern Time here on CNN.

NORQUIST: Soledad?

O'BRIEN: Yes, Grover?

NORQUIST: Get a picture of me with a smile.

O'BRIEN: Why, do we not have you smiling?

NORQUIST: You have a grumpy picture of me.

ROLAND MARTIN, CNN CONTRIBUTOR: You rarely smile, Grover. Come on.

O'BRIEN: You know what? I really don't like when they use grumpy pictures of people. I hate that.

So I'm going to fix that. I'm going to personally handle that for you.

MARTIN: Freeze that right there.

O'BRIEN: Let's right to John Berman, update the rest of the top stories making news.

JOHN BERMAN, CNN ANCHOR: You made some big news right there. You saw Grover Norquist's teeth.

All right. 11 minutes after the hour here.

Big announcement in Israel this morning, the fragile ceasefire with Hamas. Defense Minister Ehud Barak is resigning his post and quitting politics he says effective in January.


EHUD BARAK, ISRAELI DEFENSE MINISTER (through translator): I feel it is important that other people should take leading positions in Israel. Changes 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.


BERMAN: Meanwhile, in Egypt today, President Mohamed Morsi meets with judges to explain his edict that bars them from overturning any decision he makes or law he imposes until a new parliament is formed. Critics say it puts way too much power in Morsi's hands.

With brick and mortar stores basking in the afterglow of Black Friday, online retailers are hoping the magic extends through today, Cyber Monday, of course. Black Friday web sales broke the $1 billion mark for the first time this year. Online retailers typically offer deals after the four-day weekend. But this year is different. Online deals started almost a full week earlier.

Officials have finally figured out what caused a massive gas explosion last week in western Massachusetts. They say it's human error. The blast leveled a Springfield strip club. You see the blast right there.

At least 21 people were injured, including 12 firefighters and two police officers. Gas company officials say a utility worker inadvertently punctured a hole in a high pressured gas line while responding to a call about a gas odor.

And he says the threat there isn't over.


STEPHEN H. BRYANT, PRES., COLUMBIA GAS OF MASSACHUSETTS: We found one leak and repaired that leak. I'm not willing to say at this moment there is no other leak in the general area.


BERMAN: Gas lines in the area are still being checked this morning.

All right. Get ready. A record Powerball jackpot up for grabs Wednesday night. There are no grand prize winners for Saturday night's $325 million Powerball drawing. What does that mean? That means Wednesday's jackpot will be worth at least $425. The cash payout if you take the cash option would be a record $278 million.

It could go higher depending on ticket sales which obviously will be very, very high.

O'BRIEN: Wouldn't that be awesome? I want to win that so desperately, but I've said that every year that passed --

MARTIN: We would not see you Thursday.

O'BRIEN: You would not even hear from me ever again as long as you live, all y'all.

(CROSSTALK) O'BRIEN: Still ahead this morning on STARTING POINT: that fragile cease-fire is holding in the Middle East. But will a meeting in Cairo today solidify it? We're going to talk with Hanan Ashrawi with the Palestinian Liberation Organization coming up next.

And he's just a college sophomore. But he's now in the history books. Grenell College's Jack Taylor joins us to explain how he was able to pull off that record setting 138 points in just one game. That's straight ahead.


O'BRIEN: Welcome back, everybody. Overnight, Israeli defense minister, Ehud Barak, has announced his resignation. It's effective in January. This as top Hamas officials resume negotiations in Cairo today. That's over the ceasefire between Israel and Hamas.

And on Thursday, the Palestinian Authority president, Mahmoud Abbas, is expected to appear before the U.N. General Assembly in a renewed bid for Palestinian statehood. It's a move that, despite earlier reports from Abbas offices, does not actually have the support of Hamas as leaders in Gaza.

So, what do all these events mean for lasting peace? Joining us now from the west bank city of Ramallah is Hanan Ashrawi. She is executive committee member for the Palestinian Liberation Organization. It's nice to have you with us. We certainly appreciate it.

Let's begin with negotiations in Cairo today. What kind of progress do you expect to see? Thank you. We appreciate that.

HANAN ASHRAWI, PLO EXECUTIVE COMMITTEE MEMBER: Well, progress is difficult, because the initial step of cessation of violence has taken place. And it ensured that there is quiet. Now, the steps that deal with the substance and with more longer term arrangements such as lifting the siege.

These steps have to take place, lifting the maritime blockade, the sea blockade around Gaza, leaving the territory and waters, also control of air space, but more importantly, all the crossing points by land.

Lifting the blockade would mean that Gaza is resuming some sort of normal life again despite the Israeli occupation. And that the Palestinian people of Gaza would begin a whole new phase. And that would be a very positive step towards not just a conciliation but also towards a peaceful negotiations.

O'BRIEN: The talks this week, the Palestinian Authority president is also hoping, as I mentioned, to resurrect Palestine's bid for statehood. And he has said this -- he said this to supporters on Saturday. "We're on our way to the United Nations. There are lots of states supporting us who support peace and justice. All the factions are with us in going to the United Nations." Do you -- there are some diplomatic snags, though, I think it's fair to say --


O'BRIEN: Abbas' office said that Hamas supports the move. Hamas' spokesperson said in "The Jerusalem Post," in fact, they don't support the move. Explain to me how you're going to be able to navigate this.

ASHRAWI: Yes. No, we are navigating it very easily because the official statement came out today. Yesterday, there was a bit of confusion from different Hamas sources, but Khaled Meshal called the president today and told him that he's fully supportive of this move. And the Hamas Official spokesperson came out and said that Hamas as a whole supports this move and stands behind it.

So we really have unanimous total support for going to the U.N., the General Assembly, and for getting the upgrade to state status, enhancing our presence and enhancing, of course, our internal political realities as well as our international standing, and getting the recognition of our boundaries and of the fact that the Palestinian territory, including Jerusalem, is occupied territory and not disputed territory up for grabs by Israel.

So, this is a very significant step. It will enable us to interact with the rest of the world on the basis, at least, the minimal basis of parity and equality. It will also curtail Israeli violations, we hope. And Israel will understand that it cannot continue its subjugation of a whole nation and its total denial of our rights and our freedom and, of course, basically our right to self-determination and to live in dignity and sovereignty of our own land.

O'BRIEN: Final question for about the Egyptian president, Mohamed Morsi. While he is now dealing with some issues within Egypt about his sort of expanding his own personal powers, he's also been brokering the ceasefire and potentially peace. How complicated and challenging is that going to be?

ASHRAWI: Yes. That's complicated for President Morsi for a variety of reasons. Number one, he has to respond to Egyptian public opinion. Number two, Egypt is also a major player in Palestine and is a major ally of Hamas and wants to play the role of reconciliation as well as a mediator between Hamas and Israel and wants to help the Palestinians move ahead in the U.N. and otherwise.

So we think of Egypt as a friend of all of the Palestinians, not just one faction. And at the same time, there are steps that have been taken knowing that also Morsi has to respond to the international community, particularly, on economic issues. And the U.S., in particular, has made it clear that they would like Egypt to play a positive role in the region and if Egypt wants to continue to get its military assistance as per previous agreements.

So the moves to consolidate power in his hands are moves that are not precedented and these haven't been very well received as we see from the Egyptian public. And it seems to me that the last word has to be with the Egyptian people and we hope that Morsi can -- President Morsi can navigate through these turbulent waters in a serious and responsible manner, because Egypt, as a major Arab country, is needed as a peacemaker, as a mediator and as the center of stability. We cannot afford to have Egypt destabilized in the region.

O'BRIEN: Hanan Ashrawi is a PLO executive committee member joining us this morning. It's nice to have you with us. Thank you for being with us.

Got to take a short break. We're back in just a moment.


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Welcome back to STARTING POINT. It's Cyber Monday, a day historically devoted to breathless enthusiasm over the American sort of competitive shopping. But the same America that celebrates doorbusters, the same America that is chronically underprepared for college savings and for retirement.

So, in the spirit of the holiday season a smart is the new rich list. Number one, make a list. You will be bombarded today with online promotions. The retail industry has branded this Cyber Monday. The hope is you'll spend more money today after a weekend of spending money. You're up against millions of dollars in advertising trying to get you to spend more than you want on stuff that you don't need. Resistance is not futile.

Number two, if you can't afford it, put it down. The same America that's arguing now about how to pay for what we've already spent, you don't have to do that at home. If you can't pay for it this month or next month, don't get it. Number three, if it pays to wait, Deal News says better deals for high-end HD TVs, winter clothing, and toys are ahead. It pays to wait.

Number four, if you must, make sure shipping is free. A majority of retailers will be offering free shipping. You might as well go for that. Number five, always save first. The personal savings rate is down to 3.3 percent.

That is not enough to fund the kids' college, to fund your retirement, to fund a rainy day fund, to fund the nest egg from which you grow forward and make sure you're growing well and not spending well. Bah humbug.


O'BRIEN: But you're going to have money at the end. Bah humbug, but she's going to have a savings account.

MARTIN: Those retail sales come in, we're going to say, oh, my God! What happened? We didn't spend like we should spend. We go play that game.

O'BRIEN: Ahead on STARTING POINT, a major prescription drug is being recalled now, because glass was found in some bottles. We'll tell you what you need to know straight ahead.

And a crucial piece of evidence in the Casey Anthony case was missed. Would it have changed the investigation? We'll talk about that.

Plus, he's just 5'10", but his college basketball phenom is already in the history books. We'll talk to Jack Taylor about his record setting 138 points in just one game.