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U.S. Ambassador To U.N. Faces More Criticism; Nearing The Fiscal Cliff; New Violence Over Power Grab; The Help Desk; Holder Suit On Hold; Mexico's New Leader Visits White House

Aired November 27, 2012 - 13:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: I'm Suzanne Malveaux. An attempt to calm the fear over the attacks in Benghazi, Libya has seemed -- backfired. The woman at center of the firestorm facing more questions now. Today, U.S. ambassador to the U.N., Susan Rice, met with Republican senators who harshly criticized her initial explanation about the September attack that killed four Americans including ambassador Chris Stevens. Well, afterward, the senators said they were even more troubled over statements that the attack was triggered by protests. Listen.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: And if you don't know what happened, just say you don't flow what happened. People can push you to give explanations and you can say I don't want to give bad information. Here's what I can tell you. The American people got bad information on the 16th of September. They got bad information from President Obama days after, and the question is, should they have been giving the information at all?

(END VIDEO CLIP)

MALVEAUX: So, a new CNN poll finds that most Americans are actually not satisfied with the way the Obama administration handled the Benghazi investigation. Only 40 percent say that they are satisfied compared to 54 percent say they are dissatisfied.

So, I want to bring in Dana Bash following all of this on Capitol Hill. And, Dana, first of all, explain to us how did this happen, right? Because you had, initially, people like Senator McCain who seemed to be softening their criticism of ambassador Rice before she went before them and explained what had happened. And now, we're hearing them come out and there's even more criticism.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right, because they insist that what they heard -- the answers that they got troubled them more than they were troubled before and they still have answers that they haven't gotten. And, of course, the answers and the questions we're talking about all surround what the ambassador knew and didn't know before she went on five Sunday talk shows in the days after that attack in Benghazi, and, ultimately, did not give the American people right information. She was reading from unclassified talk points. And on that note, we have a new statement from Susan Rice herself about the meeting this morning talking about those infamous talking points that she read from or she referred to, and I'll read you the statement. She said about the meeting, the initial assessment upon which they were based, meaning the talking points, were incorrect in a key respect. There was no protest or demonstration in Benghazi. While we certainly wish we had perfect information just days after the terrorist attack, as is often the case, the intelligence assessment has evolved. We stress that neither I nor anyone else in the administration intended to mislead the American people at any stage in this process and the administration updated Congress and the American people as our assessments involved.

Now, you saw and you heard from the senators. They clearly were not happy after this -- after this meeting. But talking to Democrats, they think that what is still going on here is a political divide. And they think that Republicans are bent on making clear that they believe that the talking points she used were politicized in order to keep up the idea that the Obama administration had been -- he had been very successful in getting rid of Al Qaeda, and, of course, as you heard from that statement just now, Susan Rice denies that.

MALVEAUX: Yes. And, Dana, I have a question here because -- why is it that these senators believe that she should have come out with the full story to the American people? Why is it that they don't believe or understand that perhaps she was trying to not give all that information out because they were dealing with perhaps terrorist organization, that they didn't want to really tip their hand, if you will, fully in disclosing everything that they knew at that time?

BASH: That's a great question. The -- and it's one that I talked to some of the senators about afterwards who were in that meeting. The crux of it is, they feel that even if she was unable to say a lot publicly because that -- there was only limited amount unclassified, she should have had classified information that could have -- should have directed her public comments to be maybe more conservative in talking publicly about Al Qaeda. Specifically, Suzanne, she said -- Susan Rice said, on one of the shows, that Al Qaeda had been decimated. Well, I'm told in this meeting with those three Republican senators, she tried to explain herself and say, well, what I was talking about was the core of Al Qaeda, from Osama Bin Laden on down, that's what the Obama administration had been -- had done successfully but it's not what she said. And so, that's where the Republicans really feel that she -- or at least say, --

MALVEAUX: OK.

BASH: -- that she was being political.

MALVEAUX: Right. And the -- there are still investigations that will continue as well as more questions unfold. Dana, thank you very much, really appreciate it.

The other big story, of course, falling off the edge of the fiscal cliff. It could happen in just 35 days if Congress and the president fail to reach a budget deal. Now, it's up to them to stop more than $500 billion in automatic spending cuts as well as the tax hikes that would take effect.

Our Chief Business Correspondent Ali Velshi, he is joining us. And first of all, the president today met with small business owners instead of members of Congress.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Right.

MALVEAUX: So, explain what is at stake for them if we go off the fiscal cliff?

VELSHI: Well -- so, the president, you know, he's been meeting with different groups of people.

MALVEAUX: Yes.

VELSHI: When he met with those CEOs right after the election, he got a lot of criticism from small business owners. So, he's doing that today. Tomorrow, he's meeting with middle class taxpayers. Here's the thing, and these are the companies, by the way, you won't have heard many of them. These are not the tax -- these are not the small business owners who run their income through their personal tax.

So, they're not concerned about the increase in the tax on people making more than $250,000. These are people who are going to lose business if Americans are poorer. So, their general view -- or have to pay higher taxes. So, their general view is they want -- they don't want, they are enjoying a bit of a recovery right now. They do not want Congress and Washington to do something that's going to affect their customer base, either who are retail clients, retail customers themselves or who are other small businesses who depend on customers.

MALVEAUX: So, Ali, who's -- who stands to lose the most if we go off the fiscal cliff?

VELSHI: Well, a lot of different things. Spending cuts, of course, disproportionately applied to the defense sector. So, defense contractors will lose. It's not just the big companies, the Boeings and Lockheeds, it's the fact that most defense work now in the United States is done by independent companies. So, there are small companies, software companies, companies that provide to the defense industry, small businesses that will get hit. There's an estimate that the average family will pay up to $3,500 more in taxes. Now, that's if the worst of it happens. So, bottom line is what it will do is -- what it will do, Suzanne, is it will -- it will reduce GDP, economic growth.

MALVEAUX: Right.

VELSHI: That's the stuff that creates jobs and it will slow the economy down at a point where we're a little too sensitive to being slowed down.

MALVEAUX: And, finally, Ali, explain to us here how the debt ceiling plays into all these talks. VELSHI: Well, the debt ceiling is going to run out sometime in January, maybe early February, depending on how the treasury, you know, moves things around. You remember last time they were able to move some payments around so they didn't miss anything. That's also part of this. It's not part of the fiscal cliff, per say, but it is an area that the Republicans feel very strongly about. They're going use it as leverage. John Boehner has said as much to the president.

You know, there are a lot of people who say this debt ceiling thing is just an albatross. Most countries don't have a debt limit. They deal with it in a different way. But that debt ceiling debate which really started this -- you know, this issue of Congress not being able to make any decisions on financial matters, will come to a sometime between December 31st and about February 1st. So, that is another set of things that we're going to have to deal with if they get the fiscal cliff dealt with.

MALVEAUX: All right, 35 days. We're counting them and we're going to see if we can get anything done. Thank you, Ali, appreciate it.

VELSHI: OK.

MALVEAUX: Here is what we're also working on this hour.

(voice-over): Egyptian president Mohamed Morsi's power grab is challenged but will it be enough to preserve democracy?

And medical marijuana, a seven-year-old patient in Oregon is taking the drug. Is it right treatment for kids with cancer? Dr. Sanjay Gupta reports.

Plus, Scott Kelly, the identical twin brother of NASA astronaut Mark Kelly, the husband of former Congresswoman Gabrielle Giffords, takes on a historic mission. He heads to space for a year. We'll take a look at what it will be like living in space for 365 days. This is CNN NEWSROOM and it's happening now.

(COMMERCIAL BREAK)

MALVEAUX: This just in, Venezuela president Hugo Chavez going now back to Cuba for cancer treatment. That is according to the state run AVN news agency. It's not the first time that he has actually made this trip. Chavez has visited Cuba several times in the past year for surgery as well as medical treatments.

Protesters standing their ground, another night in Egypt. This is Cairo's Tahrir Square. This is live that you can see there. It is dark. It is packed with protesters. We are told about a thousand more protesters now marching in the Square right now. Let's listen in.

Now, that was earlier today. The demonstrators saying they're not letting up until the president, Mohamed Morsi, withdraws some of the sweeping powers that he granted himself last week. Egyptian commentator, Mona Eltahawy, she is joining us New York. So, Mona, as always, good to see you here. We see these live pictures. We've got folks who are, again, in the streets in Tahrir Square. What do they hope? What do they want now that they have a democratically elected president? They can't get rid of him, at this point. What do they do?

MONA ELTAHAWY, EGYPTIAN COMMENTATOR: Well, all those people you are seeing in the various squares, not just in Cairo but across Egypt, Suzanne, across many cities, they're basically on the street to tell President Morsi, we are your checks and balances. We are the people who will keep you honest. Right after you grabbed all of this power for yourself that has made you even more powerful than Mubarak who we got rid of last year. So, the people are there to say, we might have elected you as president, but we did not elect a new dictator.

MALVEAUX: So, if that's the message, Mona, that's what folks are saying, how do they turn that into a reality? How do they effect or change his behavior?

ELTAHAWY: Well, that's exactly our biggest dilemma in Egypt. Because after 60 years of military rule, 30 of which were spent under Mubarak who consistently filled institutions with his own people, that's our dilemma. What Morsi claimed he was doing was getting rid of a corrupt judiciary. And, yes, the judiciary is corrupt because it was installed by Mubarak. He got rid of, again, a corrupt (INAUDIBLE) general. Yes, that is correct as well. But the way to help Egypt towards freedom is not by paving it with dictatorship. And so, we need to rebuild those institutions. We need to cleanse those institutions of that corruption, and the way to do that is not through dictatorship.

MALVEAUX: And, Mona, you were in Cairo just last week. I know you're going to be returning shortly as well. And all of the folks you talked to, your family and your friends, what's the most important thing that people want right now?

ELTAHAWY: The most important thing that people want right now in Egypt are jobs. They want the economy back on its feet. They want -- the ultimate message or the ultimate goals of the revolution were bread, liberty, social justice. And under all of those is employment, the economy, safety on the streets and an end to police brutality. This is so important. One of the main catalysts of the revolution was police brutality. And up until this morning, we were see tremendously high levels of police brutality. At least three young men, two of them younger than 20 years old, were killed in the past week in clashes with police. So, there were many very clear demands that our president seems to be ignoring for the sake of grabbing power for himself.

MALVEAUX: And, Mona, as a woman in Egypt, you have been attacked, you've been harassed in the past, you've been very vocal about fighting for women's rights. Do you think that there has been any progress in this -- in this new leader?

ELTAHAWY: I think the biggest sign that there is progress in Egypt is that people are speaking out. I've been very vocal about my sexual assault at hands of Egyptian riot police. Many women I know today are very vocal about their sexual -- any kind of sexual violence that they faced, whether it's at the hands of thugs, the police or ordinary protesters. This is the time that Egypt needs its women the most. Egypt needs its women and its men, and I'm seeing a very positive sign today where a lot of people are on social media, like Twitter and Facebook, saying, we will help fight sexual violence.

MALVEAUX: All right, Mona, thank you. Mona Eltahawy.

Labels that read "made in China" could one day actually be replaced by ones that say "Made in Mexico." We're going to tell you what Mexico's newly elected president actually has in mind.

(COMMERCIAL BREAK)

MALVEAUX: Speaking of who's in and who's out. Former Senator Rick Santorum is not counting himself out of the 2016 run for president.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), FORMER PRESIDENTIAL CANDIDATE: Because I'm open to that possibility. But I -- we're a long way. I'm focused right now on trying to stay involve in the fray and make sure that we do the right thing up on Capitol Hill right now and also that this debate in the Republican Party about what the future of the part and where we're going to go, that we're going to be very active and engaged to make sure that we stick to American's founding principles.

(END VIDEO CLIP)

MALVEAUX: So that isn't a yes and it's not a no. that's typical.

One candidate definitely running again, New Jersey Governor Chris Christie. He filled out his paperwork. He is gearing up to campaign for a second term as governor.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: The public needs to know that I'm in this for the long haul. That the person who has helped to lead them through the initial crisis wants to be here to lead them through the rebuilding and restoration of our state. And it would be wrong for me to leave now. I don't want to leave now. We have a job to do.

(END VIDEO CLIP)

MALVEAUX: Polls out in the past 24 hours show Christie's approval rating is skyrocketing thanks to his response to Superstorm Sandy.

Three top cabinet spots up for grabs. Who's in, who's out? Bill Clinton for secretary of state? Well, how about David Petraeus making a return for secretary of defense? Hmm. A look at President Obama's so-called dream team.

Plus, a fast and furious settlement. Who is paying the price for this botched gun running operation? We've got the latest up next.

But first, "The Help Desk" answering your questions about managing student debt.

ALISON KOSIK, CNN CORRESPONDENT: Hi there. Here on "The Help Desk" we're talking about managing your student loans. With me this hour are Greg Olsen and Carmen Wong Ulrich.

Carmen, here's your question.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I was just wondering how I'm going to afford a minimum wage job with all the student loans I have to pay for and I just graduated from college.

(END VIDEO CLIP)

KOSIK: Oh, I feel for her.

CARMEN WONG ULRICH, PRESIDENT & CO-FOUNDER, ALTA WEALTH MANAGEMENT: Oh, wow. Wow, wow, wow. It's a stuff situation. But here's the thing, we've got to know what type of loans does she have. If she's got private loans, unfortunately she's in a real big pickle because here's the thing, low flexibility. But call them right away. If you're proactive about this, you can actually try to work with them before you get into trouble.

If she's got federal loans, though, there's the income based repayment program. And she's got to look into that. So basically it's only a part of your discretionary income that goes to pay it every month. So as her income goes up, her bill will go up. But that's good because it will never be too unmanageable.

KOSIK: Any suggestions?

GREG OLSEN, CERTIFIED FINANCIAL PLANNER: Mom, how's that bedroom doing?

ULRICH: Exactly.

KOSIK: Rely on mom.

ULRICH: There is that.

KOSIK: It's really hard because, you know, you want to go to school, you've got to take out those loans and you have to figure out how to pay them back in a market where it's really hard to find a job that can pay you a decent wage.

ULRICH: What type of loan is absolutely key to any student out there borrowing right now. Go for federal all the time.

KOSIK: All right. Good advice. And if you have an issue you want our experts to tackle, upload a 30 second video with your "Help Desk" questions to ireport.com.

(COMMERCIAL BREAK) MALVEAUX: And a lawsuit by House Republicans against Attorney General Eric Holder could be on hold now. We understand lawyers have told a federal judge they are trying to settle the lawsuit over what is called "Fast and Furious." As you may recall, that is the controversial gun sting operation that allowed hundreds weapons to reach violent Mexican drug cartels. And some of those guns, they were found at the site were a border patrol agent was killed.

Holder was held in contempt of Congress, of court, and House Republicans sued him after he did not release all the information that they wanted. Now, our justice correspondent, Joe Johns, he's joining us from Washington to explain this new development here.

The attorneys now making the announcement at the federal district court this morning that it looks like there's going to be a settlement. Why?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, I wouldn't say that. I'd say this is the very beginning of the whole thing. The first time, in fact, that we've heard there are any negotiations, Suzanne, to try to settle the legal issues that led to Attorney General Eric Holder being held in contempt of Congress. Republicans wanted to see certain documents. Administration essentially wanted to give them only a few of those documents.

We caught up with the attorney general, Eric Holder, at an event in Connecticut and asked him about this. And listen to what he said.

(BEGIN VIDEO CLIP)

ERIC HOLDER, ATTORNEY GENERAL: I think there is a deal that could -- can be struck. We could have struck this deal many months ago. If we don't have the ability to strike a deal, we'll continue to litigate the case.

(END VIDEO CLIP)

JOHNS: So, Suzanne, that's where it stands. This is just the very beginning of negotiation. It's not clear at all that they are ready to strike a deal, honestly. We talked to a congressional source today who said that the committee's open to a settlement, but neither side's really budged since the original suit was filed. They said they were entering into negotiations because federal rules require the party to try to work through a settlement.

Suzanne.

MALVEAUX: So there were some pretty harsh and angry words coming from House Republicans on the Oversight Committee. They really want to make this into a big investigation. And we heard the chairman, Darrell Issa, seemed pretty angry toward the Justice Department. Is it really realistic that they are going to come to the point where they feel like they can settle this?

JOHNS: I think it is actually. I think it's realistic that they'll get together at some point and try to settle it. The question is when and how much they've got to talk to get to that. The reason why I say that is because history tells us that on issues of executive privilege, neither side really wants to go all the way through litigation, because there's always a loser and the loser essentially weakens the position of the branch down the line for other congresses and other White Houses. So there's a real incentive to try to settle it.

MALVEAUX: And real quickly here, the president, he, you know, he said executive order essentially not to come forward. Does it affect him either way?

JOHNS: I think it does affect him. I think it affects the White House and the president in that they'd like to get this off the plate. It's a real embarrassment. The more the Congress talks about this, the more embarrassing it is. And as you know, from the last election, the Congress didn't change that much. Darrell Issa's still in control of this committee and can push this thing as far as he wants to push it, Suzanne.

MALVEAUX: All right. Thank you, Joe. Appreciate it.

Just days before Mexico's newly elected president takes the oath of office, he meets with President Obama at the White House. That is happening in about two hours or so. He just met a short time ago with congressional leaders on The Hill. And this morning, Enrique Pena Nieto sat down with our own Wolf Blitzer. And Wolf joins us to talk a little bit about the interview.

Wolf, we know we've seen the president before dealing with Felipe Calderon about the drug war and how important that was. Do -- in your conversation with him, did you hear anything different? A different approach?

WOLF BLITZER, CNN ANCHOR, "THE SITUATION ROOM": Well, he wants to go beyond just security, beyond the war on drugs. He wants to dramatically improve U.S./Mexican economic ties. He's got a whole agenda.

But he knows that this war with the drug cartels has been so enormous over these past six, seven years, what, 50,000, maybe 60,000 people have died in this war. Think about that, Suzanne, 60,000 people have died in this war against the drug cartels. He's got some new ideas. And in the past few days, a very prominent Mexican was killed. Listen to this exchange I had with the newly elected president of Mexico.

(BEGIN VIDEO CLIP)

BLITZER: A well-known Mexican mayor, Maria Santos Gorrostieta, was killed, was murdered. Can you give us your reaction to what's going on?

PRES.-ELECT ENRIQUE PENA NIETO, MEXICO (through translator): It is all of the intelligence role and the government's to work towards application of law, that is the same for everyone, is regrettable issue which one can see all over the world, not only in Mexico, not is U.S. an exception. This should take us to do some work that is more efficient in application of justice. (END VIDEO CLIP)

BLITZER: He's got some new ideas on how to fight this war on drugs. He also appreciates the fact that there are fewer Mexicans trying to sneak into the United States right now for a variety of reasons.