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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Anna Nicole's Daughter In Guess Ads; Facing The Fiscal Cliff

Aired November 27, 2012 - 05:30   ET

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


MARK PRESTON, CNN POLITICAL DIRECTOR: Well, the good thing, Deb, is that two thirds of the American public, according to a new CNN poll, says that they are demanding compromise and that Republicans and Democrats do come together. Although, yesterday, we did see Senate minority leader, Mitch McConnell, on the Senate floor talking about one of the impasses.

Let's hear what he had to say.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, (R) SENATE MINORITY LEADER: Republicans have stepped out of our comfort zone, and yet, we remain at an impasse, leading us to ask why, because a vocal minority on the hard left continues to argue to leaders of their party from the president on down that Democrats in Washington should do absolutely nothing about short-term or long-term spending problems.

(END VIDEO CLIP)

PRESTON: And there, you had Mitch McConnell on the Senate floor yesterday. Again, what we'll probably hear over the next 35 days, certainly coming out of Capitol Hill, will be a lot of strong political hyperbole. Well, the fact of the matter is they do have to reach some sort of a deal, Deb.

DEBORAH FEYERICK, CNN ANCHOR: You know, when he says that they're willing to do nothing, I mean, is it fair to say that if the Republicans have stepped out of their comfort zone that maybe each side is taking sort of teeny-weeny baby steps toward the middle or is that an overstatement?

PRESTON: Well, no. And I think you're right on that. And the fact of the matter is, there's going to have to be compromise on both parts. It's not just one party that can compromise. In fact, yesterday, during the White House briefing, Jay Carney, was asked specifically about what's happening with the fiscal cliff, and this is what he had to say.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Math tells us that you can't get the kind of balanced approach that you need without having rates be part of the equation. It's simply -- we haven't seen a proposal that achieves that, a realistic proposal that achieves that. (END VIDEO CLIP)

PRESTON: And there you had Jay Carney yesterday talking about tax rates there, Deb. Basically, what it comes down to right now, Republicans are going to be forced into a corner on whether or not they raise rates, tax rates, on the wealthy, let the Bush tax cuts expire for those who are making over $250,000.

And Democrats are going to have to come to the table, and perhaps, give in on entitlement reform on Medicare, Medicaid, and some of these other programs that have really been sacrosanct to the Democratic Party.

FEYERICK: And just very quickly, Mark, we're seeing a lot of public rhetoric, but there are talks, there are negotiations going on between the staffs of all these politicians in Washington. Is that pretty much how it works? We get the upfront and behind the scenes is where they do the real work?

PRESTON: So, we'll show the photo-ops when we see President Obama and the Congressional leaders get together like we did on November 16th, but really, the hard work is done by the staff on Capitol Hill and from the White House. We saw that happen over the Thanksgiving week. It was not as productive as some people had hoped.

But, we are getting to the point right now, 35 days until the fiscal cliff, Deb, and they have to reach an agreement. There's still plenty of time left for an agreement to be reached. We're not quite there yet, but we're getting close.

FEYERICK: All right. Mark Preston for us, thanks so much. We'll check in with you a little later on. Thank you.

ZORAIDA SAMBOLIN, CNN ANCHOR: Thirty-two minutes past -- 33 minutes past the hour now. Politicians on both sides saying that a deal to reduce America's debt will improve the economy and it will also create jobs. My next guest says that's not exactly the case, and it's important to know the difference here.

Derek Thompson is senior editor at "The Atlantic," and he joins me now. Thanks for being with us this morning. We appreciate it. So, you compare the deficit to an insurance policy. You say it doesn't make you any richer in the short-term, but in the long-term, it is helpful. I want to actually put your statements up.

You say "let's agree to keep deficits very high for at least another year. And then, let's buy an insurance policy against that debt crisis when we can really afford it." So, lots of Republicans and Democrats out there would disagree greatly with you, say that America's ability to pass its debt or pay its debt is really important. How would you respond to them?

DEREK THOMPSON, SENIOR EDITOR, "THE ATLANTIC": Right. I do think that there's a thing (ph) that's taken hold in Washington. The deficit reduction will stimulate the economy. It will unleash these animal spirits that will -- that will -- that will accelerate us to enormous growth in 2013.

And the fact is that what deficit reduction is, is tax increases and spending cuts, both of which take economic activity out of the economy. So, this really is extremely similar to insurance. If I buy, say, flood insurance, what I'm doing is I'm paying a short premium in the short-term to protect my health in the long-term. That's exactly what deficit reduction is.

We're paying a little bit while we're healthy to protect against the likelihood, the small or great likelihood, that we might have a debt crisis later. But my feeling is that now, that the economy is weak, have been growing at 1.8 percent for the last 24 months, we're not creating that many jobs, unemployment is still around eight percent, the economy is still wheezing faintly.

And when you're wheezing faintly, you need the strong medicine that high deficits offer.

SAMBOLIN: There's a lot of talk of the fear of the U.S. falling into the same hardships as Europe, specifically Greece. I want to play what Senator Lindsey Graham has said about this.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece.

(END VIDEO CLIP)

SAMBOLIN: OK. Here's what you said in your article. "Deficit reduction takes economic activity out of the economy. If you want to see what austerity does to a weak private sector, just look at Europe." Which policies do you think would turn us into Europe? How would that happen to us?

THOMPSON: Well, we're not going to become Europe if we run a high deficit in the next year. That we know. The economy is weak, inflation is low, we're one of the best bets in the world, and we borrow in our own currency unlike Greece. For all of these reasons, we're not going to become Greece because of a debt crisis.

But we can slip into a recession, the same way that Greece and Italy and other peripheral European states have slipped into recessions, because they've had to -- because austerity has been forced on them. They've had to see tax increases and spending cuts, and we're seeing across Europe what happens when you take economic activity out of an already weak economy.

It's as if you lost your job and suddenly had to pay extra in health insurance, pay extra in medicine. What you would see is less income and more spending coming out of your pocket, and that would weaken your position. That's exactly what's happened to these European countries. And that's the real risk, austerity, not a debt crisis in the short-term. SAMBOLIN: There are some analysts that are saying, you know, just let us fall off that fiscal cliff, that the Congress is actually overhyping that threat, that the cuts are going to take quite a bit of time to actually settle in. How do you feel about that?

THOMPSON: Right. I think the best way to think of the fiscal cliff is not as a cliff or a slope or anything topographical. I would think of it like a fast, like a diet, like a flash diet. If you've been bingeing on deficits, the same way that we have been, I think for good reason for some time because the economy has been weak, if you've been bingeing, at some point, you need to get on a diet.

And what the fiscal cliff is essentially is it's a flash diet. All of a sudden, taxes go way up and spending goes way down. But what happens when you enter a serious diet, you don't announce that you're going to stop eating lunch and then fall on your face immediately, rather the nourishment that you're depriving yourself of slowly weakens you to a point where you grind to a halt.

That, I think, is what will likely happen and that's what the CBO has said will happen in the first half of next year is that we slowly enter rescission and then come out of it. I don't think we need to enter a recession. I think we can make a deal in the short-term that preserves deficit reduction for the medium-term so that we'll be healthy in the next ten years.

SAMBOLIN: And do you think that big compromise is going to come from the Republicans?

THOMPSON: I'm not going to make a big prediction. My hope is that the Democrats, Republicans, will come together. My sense is that Congress doesn't do anything until they absolutely have to, and this is a situation where I think both sides do feel like they absolutely do have to come to a deal before January 2nd.

SAMBOLIN: All right. Derek Thompson, senior editor of "The Atlantic." Thank you for your time this morning. Appreciate it.

And in the next hour of EARLY START, we'll get an update on the chances of a fiscal cliff deal when we are joined by California Democratic congresswoman, Maxine Waters.

FEYERICK: It's interesting to see what she has to say.

And a dangerous scene today in downtown Sydney, Australia. The cabin of a giant crane at a construction site burst into flames and the top part of the crane collapsed onto a nearby roof. Well, incredibly, there were no reports or injuries, according to Australian news organization.

SAMBOLIN: The Empire State Building is showing off its new look. New Yorkers are used to seeing the Empire State Building illuminated in various colors for special occasions. But now, the building has upgraded its lighting system. Gone are the old flood lights. They've been replaced by a state-of-the-art computerized system that can deliver all kinds of colors and effects. Look at that. The new lights went on display for the first time last night for your viewing pleasure there.

FEYERICK: I'm a little bit of a traditionalist.

(CROSSTALK)

(LAUGHTER)

FEYERICK: I already got overstimulated just now. OK. Well, Hollywood is buzzing today about Anna Nicole Smith's six-year-old daughter's new modeling campaign. Like mother like daughter or daughter like mother.

And the young star of TV's "Two and a Half Men" who says fans should stop watching his show. Both stories coming up.

(COMMERCIAL BREAK)

FEYERICK: Anna Nicole Smith's daughter is following in her late mother's footsteps, modeling in an ad campaign for Guess. Dannielynn Birkhead is all of six years old now and she's working for the same label that put her mom on the map. Nischelle Turner is following big entertainment headlines from Los Angeles. Hi, Nischelle. So, is this the beginning of a big modeling career?

NISCHELLE TURNER, HLN CORRESPONDENT: You know, Deb, it very well could be. But you know, at this stage, people seem to just be more concerned about six-year-old Dannielynn Birkhead more than anything else. You know, Guess has put her in some ads, which her father, Larry, is saying was an homage to her mother.

And Larry's been quoted in a few different places saying that he doesn't see her stepping into her mother's shoes just yet. With this family, you know, at the very least, a lot of people are raising their eyebrows over this. The ads themselves, they're very innocent. But what's a little unnerving is just how much she's starting to look like her mother, especially when she poses.

Now, Guess says this is the first for them. They say that they're having a legacy model for them. And it's good traction, good marketing, because, I mean, Deb, we're talking about it this morning, right?

FEYERICK: What's amazing, she really does look like her mom. It's unbelievable.

TURNER: Yes.

FEYERICK: Wow, wow. Listen, she got good genes there. And you're also following, and this is amazing, this "Two and a Half Men" controversy. And this time, it doesn't involve Charlie Sheen.

TURNER: Imagine that, right? No Charlie Sheen when we're talking about a controversy with "Two and a Half Men." This one, though, is all about Angus T. Jones. He grew up playing Jake Harper on the show. He's now telling people not to watch "Two and a Half Men." Now, he is apparently discovered religion in a very big way and he appeared in this video where he denounces the show that actually made him famous. Listen to this. It is amazing.

(BEGIN VIDEO CLIP)

ANGUS T. JONES, ACTOR: Man, please stop watching "Two and a Half Men." I'm on "Two and a Half Men." I don't want to be on it. Please stop watching it. Please stop filling your head with filth.

(END VIDEO CLIP)

TURNER: Surprising for fans of the show to see him talking about his faith, first of all, and that's so different from his character. Now, Jones says in the video that he's actually still under contract with the show. We reached out to CBS for reaction to this and maybe a hint as to what the show's going to do now, and, of course, they're being tight-lipped.

They don't have any comment about this. The last time there was a controversy with the show, it led to Charlie Sheen's departure, but it didn't hurt the ratings because Ashton Kutcher took over, and then, everything seemed to go on as fine. But, you know, this morning, I have to think that Jon Cryer just has to be wondering what next? Am I going to be the last man standing on this show?

FEYERICK: That's right. Is he the only one who sees the value in a day jobagent? Oh, my goodness. Well, Angus T. --

(CROSSTALK)

FEYERICK: He's probably actually going to college next season.

TURNER: You know, and he looks -- if you watch the show over the years, you see him now, and you remember that little boy that started on the show, and you just say, wow!

FEYERICK: Yes.

TURNER: Goodness.

FEYERICK: How they change. How they grow up. All right. Well Nischelle Turner, always great to see you. Thanks so much.

TURNER: You, too.

SAMBOLIN: How much does he make per episode?

FEYERICK: Yes. You know, I don't even want to think about it, actually.

SAMBOLIN: Unbelievable.

FEYERICK: Well, that money is going to send his kids to college when he has kids.

SAMBOLIN: Yes. True.

All right. Too early for Christmas but just in time to probably mess with your travel plans today. Coming up, cold, wet weather moves into the northeast.

Hey, folks, if you're leaving the house right now, you can watch us any time on your desktop, on your mobile phone, just go to CNN.com/TV.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back. Forty-nine minutes past the hour. Time for your top stories this morning.

(BEGIN VIDEOTAPE)

SAMBOLIN (voice-over): The House returns for its lame duck session today, and with 35 days left until we reach the fiscal cliff, several top Republicans say they're willing to break their no-tax pledge to get a spending plan passed in time. But House leaders still have no talks scheduled with the White House.

FEYERICK (voice-over): U.N. ambassador, Susan Rice, facing her critics on Capitol Hill today. She's meeting with three Republican senators, and they're going to discuss comments she made about the deadly attack in Benghazi in the immediate aftermath of the incident. Rice maintained she made it aftermath of the incident. Rice maintained she made it clear the information she had at that time was only preliminary.

SAMBOLIN: And tragedy in Northern California. Police say three members of a family drowned while trying to save their dog, which got caught in rough surf. A 16-year-old boy was pulled under by all the powerful waves. His parents tried to save him, but did not survive, either. The dog eventually made it back to shore on its own. Can you believe that story?

FEYERICK: Heartbreaking. Just heartbreaking.

Well, Monday night football action in Philadelphia, Eagles and Panthers, two of the worst teams in the NFL. It was a big night for Carolina Panthers quarterback, Cam Newton. He threw for two touchdowns and ran two touchdowns in himself as he led the Panthers to a 30-22 win over Philly.

Eagles quarterback, Michael Vick, he sat out the game. He is still recovering from a recent concussion.

(END VIDEOTAPE)

SAMBOLIN (on-camera): So, do you live in the northeast? Umbrellas, hats, gloves, later today for you. Meteorologist, Alexandra Steele, in for Rob Marciano today. Kind of cold.

(CROSSTALK)

ALEXANDRA STEELE, AMS METEOROLOGIST: Yes. That's right. We've got a quick storm moving through, kind of a one-two punch. It will be an affair today but not tomorrow. Hi, everyone. Waking up? Maybe just the snow begins to come down, seeing some observations right now in the Poconos. So, if you're there kind of cuddling up, you're seeing some snow begin to fall.

Here's a look at the radar, of course, the white delineating where the snow is. That little pink showing you a mix of rain and snow. And of course, the green is where the rain is. But Boston, New York, Philadelphia, Washington, all will see a mix of rain and snow today. But, not much in the way of accumulation in the big cities. It's really north and west.

This is where kind of the stripe of the big snow will be. Big snow, relative, one to three inches of snow. Harrisburg, Allentown and then right here through about Morristown, New Jersey, that's where we'll see the snow throughout the day, again, accumulating to about one to three inches. We do have winter weather advisories.

Even west as Western Washington, Garrett County, Maryland, high elevations there, picking up about two to four inches. But also in the south side of this storm, we do have some severe weather. We do have showers and thunderstorms, Birmingham, a loud morning. You don't need your alarm clock this morning.

All that moving toward Atlanta and New Orleans, as well. So, one line of storms is snow to the north, it's rain and some thunder to the south, and it will all move through today -- Guys.

SAMBOLIN: All right. Thank you, Alexandra.

Fifty-two minutes past the hour. A packed hour ahead on EARLY START, including 35 days left before we hit that fiscal cliff, and it's already weighing heavy on holiday shoppers' minds. We're going to chat with Democratic congresswoman, Maxine Waters, from California. She serves on the Financial Services Committee.

FEYERICK: And a poison pen. That's right. A poison pen. Details of a new weapon found on a failed North Korean assassin.

SAMBOLIN: And getting a text that says "your wife has just left the country." Outrage over reports that Saudi Arabia is electronically tracking women.

FEYERICK (on-camera): But first, after 100 years, have we found the smoking gun? Is this a photo of the iceberg that sunk the unsinkable "Titanic"? Take a look at that.

(COMMERCIAL BREAK)

FEYERICK: And welcome back. It is 56 minutes after the hour. Deb Feyerick here along with Zoraida Sambolin taking a look at the top CNN trends on the web this morning.

SAMBOLIN: And that Facebook privacy thing that's been clogging up your news feed. Yes, well, guess what, it's worthless, and you should all stop posting it. Many Facebook users have started posing a notice that their content is copyrighted.

The post says, quote, "In response to the new Facebook guidelines, I hereby declare that my copyright is attached to all of my personal details, illustrations, comics, paintings, professional photos, and videos."

The message is a hoax, just like the last time that's happened. Facebook still owns you. This was all in reaction to Facebook's announcement that it would no longer allow users to vote on changes to its privacy policies. So, there you have it, folks.

FEYERICK: That's exactly right. You're going to give it away. You're giving it away for free.

SAMBOLIN: You are giving it away.

FEYERICK: But is this the iceberg that doomed the "Titanic"? A rare original photo of the iceberg suspected of sinking the "Titanic" in the icy North Atlantic in 1912 is going to be auctioned off next month. The auction house in New Hampshire says the iceberg is eerily similar to the one that two "Titanic" crew members drew in sketches.

Experts claim the photo was taken on April 12th, 1912, just two days before the unsinkable ship went down, killing 1,500 people.

SAMBOLIN: Late night comedians are back on the air following the long holiday weekend. Take a look.

(BEGIN VIDEOTAPE)

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": It's been a rough week for the White House turkey. As you know, President Obama pardoned the White House turkey last week. Well, now, Republicans want to know what it knows about Benghazi.

(LAUGHTER)

LENO: A little dicey there. What else? Americans spent $59 billion shopping over Thanksgiving weekend. $59 billion. Oh, yes.

(APPLAUSE)

LENO: Now, China's going hey, we thought you were broke. Where's our money? Hey, we thought --

(LAUGHTER)

LENO: What is that all about? And today, of course, is Cyber Monday. This is the biggest online shopping day of the year, which of course, makes tomorrow identity theft Tuesday, OK?

(LAUGHTER)

LENO: It will be identity theft Tuesday. Big, big holiday.

(LAUGHTER) CONAN O'BRIEN, HOST, "CONAN": Can you believe this? A Christian college is suing the Obama administration over its health care law. Yes. They're citing the part in the Bible where Jesus refuses to heal a leper because it's a pre-existing condition.

(LAUGHTER)

O'BRIEN: Remember that part? The movie "Lincoln" came in third at the box office this weekend. Yes. However, experts agree it's still not Lincoln's worst time at the theater.

(LAUGHTER)

(END VIDEOTAPE)

SAMBOLIN: That's terrible to laugh at that.

FEYERICK: That's definitely a movie we have to see. That is quite funny. Well, EARLY START continues right now.