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STARTING POINT WITH SOLEDAD O'BRIEN

Susan Rice to be Interviewed by Senatorial Critics; Fiscal Cliff Looms for American Economy; Interview with Senator Pat Toomey

Aired November 27, 2012 - 07:00   ET

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


JOHN BERMAN, CNN ANCHOR: Good morning, everyone. I'm John Berman.

CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans. Soledad is off today. Our "Starting Point:" high level negotiations under way in Washington to avoid going over the fiscal cliff, but are they any closer to an agreement?

BERMAN: U.N. Ambassador Susan Rice faces three of her main Republican critics today, trying to explain her comments about the attack in Benghazi. Will she get their support if she's nominated as Secretary of State?

ROMANS: Then, she's queen of the racetrack. Now, she's taken on Sonic. Danica Patrick is here, live, with a preview of her new racing video game.

BERMAN: We have lots coming up in the next two hours. Pennsylvania Senator Pat Toomey, Maryland Congressman Chris Van Hollen, Utah Senator Mike Lee, and actress Lucy Hale from "Pretty Little Liars."

ROMANS: That's quite a two hours. It's Tuesday, November 27, and STARTING POINT begins right now.

BERMAN: Good morning, everyone. Our starting point today, more Republicans seeming to break their no tax pledge but still bickering with Democrats over the so-called fiscal cliff. In just under 35 days now America falls off that cliff. You've heard the menacing sound right there. This triggers drastic spending cuts and tax hikes.

Now there are some signs of compromise on Capitol Hill. Several top Republicans saying they're willing to at least consider raising tax revenues to get a spending plan passed within the next five weeks. However when the lame duck Senate returned to work yesterday, it sure sounded like the same old stalemate.

(BEGIN VIDEO CLIP)

HARRY REID, (D-NV) SENATE MAJORITY LEADER: The Senate has spoken and president Obama has spoken. He's promised he will not sign any bill that mortgages our future to pay for handouts to the wealthiest two percent of Americans. I only hope house Republicans have been listening.

MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: We've been responsible, even as we've remained firm on this point, no tax increases now for promised spending cuts that won't materialize later.

(END VIDEO CLIP)

BERMAN: Hardly a political plug there. CNN political director Mark Preston is live from Washington this morning. Mark, so far there are no formal fiscal cliff talks scheduled at the highest levels. But the White House just announced that president Obama is going to be going to Pennsylvania on Friday to try to sell his version of the tax plan to the American people. Is that going to help things?

MARK PRESTON, CNN POLITICAL DIRECTOR: Well, John, you know, it's a dual strategy right now that we're seeing develop in these negotiations over the fiscal cliff. The first strategy, of course, and the first bullet point is when President Obama gets together with Congressional leaders and they try to get some kind of resolution. The second bullet point, though, is to try to pressure the Republican Party, and that's what we're seeing from president Obama by going out to Pennsylvania to this manufacturing facility that makes toys, including Tinker Toys and the Connects building set. So we'll be doing that on Friday.

In addition, today it actually starts. Pressure campaign begins today. They'll be meeting with small business owners at the White House. Tomorrow it will be meeting with middle class Americans who say that they will be impacted if Congress doesn't fix the fiscal cliff. They'll also be meeting with business leaders this week. So we're seeing a two-prong strategy right now out of the White House.

BERMAN: When it starts moving in the realm of tinker toys you know it's getting very, very serious.

We've seen some Republicans, major Republicans, come out the last few days saying they don't feel bound anymore by that Americans for tax reform pledge that Grover Norquist pledge. Most recently house majority leader Eric Cantor seemed to have a little wiggle room there. Do you expect to see more Republicans coming out here?

PRESTON: The floodgates have certainly opened, and I suspect we'll see more Republicans talk about the need for resolution. But we have a new CNN poll in the last 24 hours that show that if this is not resolved, that Republicans will take a majority of the blame and not President Obama. So I think we will see more Republicans start to break away from that pledge.

But, on the other side, though, Democrats are also going to have to come to the table, and do some compromise. We saw Senate Minority Keader Mitch McConnell talk about it yesterday on the Senate floor. See what he has to say.

(BEGIN VIDEO CLIP)

MCCONNELL: 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 have it, the Senate Minority Leader Mitch McConnell talking about how Republicans are trying to come to the table but they haven't seen that from Democrats yet. John?

BERMAN: All right, really is interesting to try to guess when the first democrat will come forward and show a little bit of leg on the idea of compromise. Mark Preston in Washington, thanks very much.

ROMANS: Indeed, Tinker toys. I got the joke, it was funny.

The other big story we're following, U.N. Ambassador Susan Rice is going to meet with three Republican senators who criticized her over comments she made in the aftermath of the attack on the U.S. consulate in Benghazi. This as a CNN/ORC new poll shows the Obama administration's overall response to that attack does not get high marks as 54 percent of Americans say they are dissatisfied with how the attack was handled. Foreign affairs correspondent Jill Dougherty is at the State Department this morning. Hi, Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Hey, Christine.

The bottom line, as I look through this poll, I think it says Americans do not see a cover-up. That's the one thing. But there is a lot of confusion in this poll, I think, in terms of what Americans think, you know, happened, didn't happen. Don't forget this has been -- it is confusing. And, it has been highly politicized.

So when you look at some of the parts of this poll, for example, you know, thinking it could have been prevented, 48 percent. And 42 percent think it could not have been prevented. And it's very hard, I think, for Americans, to figure that out. Who knows unless you have the intelligence information, and all of that has not come out yet.

The other thing, though, is that Americans are really split, 44-44 over how the administration handled it. You know, did they handle it appropriately? Or did they not? And that's, I think, where the nub comes in. If people are confused, chances are it wasn't handled correctly in terms of explaining it.

ROMANS: So what does she expect from this meeting that she's having today? It seems as though John McCain, Senator McCain, has reformed a little bit from his initial criticism. But what can we expect on this meeting on the hill today?

DOUGHERTY: Essentially what she's going to do, and she will be with the acting CIA director Michael Morrell, they're going to be answering questions, at least it's expected, answering questions about why she said what she said when she did. In other words, when she went on those Sunday talk shows, how much did she know? What were the talking points? Did she really know more than the talking points? Did she just stick to the talking points? Was there more that she could have looked into?

And this, again, I think reflects some of the confusion. Don't forget, you know, there are three investigations, Congressional, FBI, and state. And until those are completed all of the facts aren't going to be known.

ROMANS: Jill Dougherty, thank you so much, Jill.

BERMAN: A lot of people here in the northeast looking towards the sky this morning. Winter storm we hear headed our way.

(WEATHER BREAK)

ROMANS: Other top stories we're following, Egyptian people voicing their opposition to President Mohamed Morsi and the Muslim Brotherhood and wondering if they replaced one dictator with another this morning. This iReporter showing protesters as they carry the 16-year-old's casket through Tahrir Square yesterday. Intense protests expected again today. Morsi declaring Egypt's courts cannot overturn decisions he's made since coming into office in June or over the next six months. One opponent says that can only lead to a dictatorship. Morsi insists he's trying to protect Egypt's fragile Arab spring revolution. He's not trying to accumulate unchecked power.

BERMAN: The body of former Palestinian leader Yasser Arafat was exhumed this morning from a mausoleum in the West Bank. A team of international scientists will analyze tissue samples in an attempt to determine if he was poisoned to death in 2004 with a radioactive substance. The actual cause of Arafat's death was never actually determined.

ROMANS: The current head of the Palestinian Authority travels to the United Nations this week for what he hopes will be a vote with a historic outcome. Mahmoud Abbas will be present Thursday as the General Assembly votes on a resolution that would upgrade Palestinians to the status of a non-member state.

Meanwhile, only one week since the cease-fire between Israel and Hamas, and a U.S. official tells CNN that Iran is already figuring out how to resupply Hamas with missiles and other weapons.

A flight from Fort Lauderdale to San Juan, Puerto Rico, forced to circle back and land just after takeoff because of a bird strike. An inspection confirmed a bird hit the right engine of that JetBlue flight yesterday. Passengers were put on a different flight and arrived in San Juan after a two-and-a-half hour delay.

BERMAN: Monday night football action in Philadelphia, kind of like a loser bowl. Not a marquee match-up, the Eagles and Panthers, two of the worst teams in the NFL. But it was a big night for Panthers QB cam Newton. He threw for two touchdown passes, and he ran for two touchdowns himself. There he goes. That wasn't him. Way to go, man. 30-22. Eagle quarterback Michael Vick had to sit out of the game because he's still recovering from a recent concussion.

Ahead on STARTING POINT, more Republican lawmakers breaking with Grover Norquist on that pledge not to raise taxes. Could there be a political backlash? Next hear from one senator who signed the pledge, Pat Toomey of Pennsylvania. ROMANS: And after a record-breaking holiday shopping weekend, how did retailers fare on cyber Monday? The staggering numbers ahead.

(COMMERCIAL BREAK)

ROMANS: Welcome back to STARTING POINT. Minding your Business this morning, cyber Monday sales rose 28 percent from last year. That's according to the IBM benchmark survey. The most searched for items, amazon's Kindle and Kindle Fire, Uggs, iPads, the iPod Touch, Legos, and the Wii, a snapshot of America's priorities. Estimates of cyber Monday sales reached $1.5 billion.

BERMAN: Billion.

ROMANS: A quick check of the market. Stock futures are flat this morning. A lot of data today, durable goods orders, home prices, consumer confidence, and European markets are higher after officials there agreed on a bailout terms for Greece late last night.

New this morning, a warning on the fiscal cliff and a downgrade of expectations for U.S. economic growth. The Organization for Economic Cooperation and Development cut its forecast for the U.S. economy for this year and next year, and on fiscal cliff negotiations, the OECD said, quote, "decisive policy action is need to ensure that stalemates over fiscal policy in the United States and continuing Euro area instability do not plunge the world back into recession." Plunge back into recession the whole world, a very bad, bad idea.

BERMAN: A lot of menacing terms there. "Fiscal cliff" is a menacing term here. Now we know we are just under 35 days away before we fall off that cliff which could lead to deep spending cuts. Want to bring in Republican Senator Pat Toomey from Pennsylvania. He was a member of the deficit reduction super committee last year that failed to agree on a plan. But he's been talking about this issue for a long, long time. Good morning, senator.

SENATOR PAT TOOMEY, (R) PENNSYLVANIA: Good morning.

BERMAN: We just learned that President Obama will be traveling to your backyard on Friday to talk about the fiscal cliff and spending, and traveling to Pennsylvania right now. Is this a welcome visit as far as you're earned?

TOOMEY: As far as I'm concerned the President of the United States is always welcome in my state of Pennsylvania. We welcome the President and look forward to his message, and I have some questions I'd like to -- I hope he addresses.

BERMAN: What questions?

TOOMEY: First of all the President seems absolutely determined to inflict a tax increase on the American people. Two years ago he signed a Bill that extended the current tax rates for two more years because he said the last thing you want to do is raise taxes in a weak economy. Today the economy is weaker than it was two years ago. Why in the world does he want to inflict that damage now? BERMAN: Senator --

TOOMEY: Second, I've got several others, but go ahead.

BERMAN: One more in, then I'll ask you one.

TOOMEY: Sure. Here's another one. If the President actually gets the tax increase that he says he wants that solves eight percent of the projected deficit over the next ten years. What is the world is the President's plan for the other 92 percent? Is he going to raise taxes on the middle class? Is he going to raise taxes repeatedly? Does he have some -- has he discovered the willingness to rein in spending? We haven't seen any plans.

BERMAN: All right, Senator, let's talk about you, now, because a year ago when you were part of the super committee you did propose your own cut plan and revenue plan.

TOOMEY: Right.

BERMAN: This included closing loopholes. This included reducing deductions in taxes. Do you still support closing loopholes and reducing deductions?

TOOMEY: Look, the concern that I have is that we are now just a few weeks away from a massive tax increase. And I am trying to find a way to avoid inflicting that damage on our economy and going through that. So if we're going to have to have some kind of revenue increase, which this president seems determined to do, I would hope we could at least do it in the way that does the least economic harm. That means lower marginal rates, reform the tax code, offset the lost revenue by reducing the deductions, write-offs, loopholes, that sort of thing. Then, at least, you could hope that you'd have some pro-growth policy in your tax code that would offset the damage done by greater revenue.

BERMAN: So that is a yes, though, just to be clear. You would favor raising revenue by closing loopholes and reducing deductions?

TOOMEY: If we were lowering marginal rates at the same time lower than what we have today, and if we were going to do something meaningful about the actual problem we have, which is spending and which is the entitlement programs.

BERMAN: Right. Agreed the Democrats need to come along on the idea of spending cuts and talk about that in a serious way, we'll stipulate that. But would you be in favor of reducing deductions and closing loopholes without the corresponding rate cuts?

TOOMEY: No. Why -- you know, I think that what we need to do if we're going to do this -- you know the revenue side isn't where the problem lies in the first place. This is a side show to the real problem, the real problem that the President has refused to address. How are we going to put our entitlement programs on sustainable path? How are we going to live within our means?

If we're going to do something on the revenue side, then by for gosh sake's let's at least not damage the economy any more than we have to. Let's do it by lowering marginal ratings and generating revenue through reducing the value of deductions and write of some loopholes, taxes, the kinds of things that distort economic activity.

BERMAN: Warren Buffett wrote an interesting op-ed. He is a supporter of the President but said he does not favor raising rates on people making more than $250,000, but he said he would support it for people making $500,000. Is there an income level where you support or at least not oppose vehemently the idea of racing rates?

TOOMEY: Again, you know, I don't think that's a constructive direction to go in. We -- you know, we could just keep adding ever more brackets, and ever more burdens on people who are productive or have a couple of good years in their business. I think all of that discourages economic growth and discourages risk taking and discourages entrepreneurship. So I'm in favor of moving in the direction of a flatter tax system of fewer brackets, lower rates, simplicity where we get rid of all the distortions that happen in the tax code rather than speculating about how many different new brackets we should create.

BERMAN: I do want to get to Benghazi, but on taxes you talk about closing loopholes and reducing deductions. Grover Norquist says that would violate his pledge. Are you OK with violating the Grover Norquist pledge?

TOOMEY: I don't intend to violate any pledge. My pledge is not to support higher taxes. What we're faced with in just a few weeks is a massive tax increase. If I can help ensure that we don't have that tax increase, then I believe I've fulfilled my pledge to fight for the lowest possible taxes.

BERMAN: He may have a disagreement there.

But I do want to move on to Benghazi. Today Susan Rice is traveling to Capitol Hill to meet with three of her fiercest critics. Do you think some of her Republican colleagues who said they would block her nomination as Secretary of State, do you think they've been too hard on her?

TOOMEY: Well, I don't want to speak for my colleagues, but I thought what I heard was that they would block it if they didn't hear an adequate explanation for why she went on national television repeatedly, many days after the attacks in which four Americans were murdered, and she told the story that wasn't true.

Now, maybe she has a good explanation for this but we haven't heard it yet. And so I'm glad she's coming to Capitol Hill. Maybe it's possible for her to provide some information that we don't have now that would explain how this could happen, how the American people could have been so misled about the nature of this incident. So, I welcome her visit and hope it's constructive.

BERMAN: If she is nominated can you see yourself supporting that nomination? TOOMEY: Again, it depends on whether we get some very clear and acceptable answers to these questions. How she could have gone on national television and told the American people that this was not a -- this was not related to a terrorist attack when, in fact, senior people in our intelligence community knew almost from the very beginning that it very much was a terrorist attack. That's a disturbing fact pattern that we need to have addressed.

BERMAN: Senator Pat Toomey of Pennsylvania, great to talk to you this morning.

TOOMEY: Thanks for having me.

ROMANS: Ahead on STARTING POINT, the democratic process left to the flip of a coin, the election that was decided by a coin toss. That's next.

BERMAN: Plus, you want to be Danica Patrick? Now is your chance, virtually at least, with a new racing game, and she's here with a live preview.

(COMMERCIAL BREAK)

ROMANS: Good morning and welcome back. President Obama welcomes Mexico's president-elect to the White House this afternoon. Drug related violence, immigration, and trade issues are expected to be on the agenda. The U.S., of course, if Mexico's largest trading partner.

Jill Kelley has been stripped of her honorary consul title by South Korea. The socialite in the middle of the David Petraeus sex scandal held the post for just three months. South Korea's deputy foreign minister accuses her of using the title for personal gain.

ROMANS: Heads or tails? That's what decided a local election in central Illinois. George Wismiller says he didn't want to win the seat for Dewitt County by gambling. So he's refusing to take the nominal pay he gets for the job. The defeated incumbent isn't happy about it either. He's looking into a recount.

BERMAN: It doesn't seem like a very democratic way of settling an election.

We just heard from Republican senator Pat Toomey on hopes for a fiscal cliff deal. Next we're going to hear from the other side. The ranking Democrat on the budget committee, Congressman Chris Van Hollen, is going to join us.

(COMMERCIAL BREAK)

ROMANS: Welcome back to STARTING POINT. The consequences of failure are dire. The hope of cooperation is fragile. Congress is back from holiday break and it must do something before the end of the year or we'll go off this thing called the fiscal cliff.