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Averting the Fiscal Cliff; Interview With Pennsylvania Congresswoman Allyson Schwartz

Aired November 28, 2012 - 15:00   ET

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


BROOKE BALDWIN, CNN ANCHOR: Hour two here, I'm Brooke Baldwin. Thanks for being with me. Live from New York, the news is popping in Washington though today. Right now, the White House announcing President Obama will host Mitt Romney for lunch tomorrow.

So the president breaking bread tomorrow with his vanquished opponent. We also have this. The president meeting, right now, with his cabinet, perhaps the final cabinet meeting for several administration stall works. Among them, Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner.

Hold the phone, though, because we have potential movement in the talks to avert the troublesome tax increase that is set to take effect January 1. A top House Republican is apparently, today, breaking ranks, essentially siding with the White House here, saying, protect the middle class from higher taxes come January 1, but not the wealthy, not that top 2 percent. Go ahead, raise them, he says.

Here he is, Congressman Tom Cole after a meeting with House Republicans.

(BEGIN VIDEO CLIP)

REP. TOM COLE (R), OKLAHOMA: In my view, we all agree that we're not going to raise taxes on people that make less than $250,000. We should just take them out of this discussion right now.

We're not going to raise taxes on most people, and I think we ought to go ahead and make that abundantly clear to everybody, and take them out of the negotiation. We recognize we don't control the presidency. We don't control the Senate. So, let's get the best deal we possibly can for the American taxpayer. And part of that is making sure that people that make less than $250,000 a year don't face a tax increase.

(END VIDEO CLIP)

BALDWIN: So, Congressman Cole essentially saying to fellow Republicans, we didn't win the White House, we didn't get control of the Senate as we had hoped. Let's cut the best deal we can right now and that is a deal that raises taxes on the wealthy, but no one else.

House Speaker John Boehner now is saying he agrees with that position, but Boehner didn't specifically say it is a nonstarter.

Jessica Yellin, to you we go at the White House, our chief White House correspondent.

What are they saying at the White House about this House Republican Tom Cole, his idea to colleagues that -- an idea that really echoes something the president has been proposing here?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, Brooke, they're not getting overly excited because they know that this is one Republican speaking, saying something they would love to hear, and that they're happy to hear. But it is not what the speaker of the House plans to do.

There is no plan right now for this vote to take place on the House floor. I will point out, though, that this is exactly what President Obama himself said he would like to see House Republicans do. When I asked him about it at the press conference the president had last week, or was it two weeks ago, and he said, look, House Republicans should just -- well, let him say it. Here you go.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The Senate has already passed a law like this. Democrats in the House are ready to pass a law like this. And I hope Republicans in the House come on board too. We should not hold the middle class hostage while we debate tax cuts for the wealthy.

We should at least do what we agree on. And that's to keep middle- class taxes low. And I will bring everyone in to sign it right away so we can give folks some certainty before the holiday season.

(END VIDEO CLIP)

YELLIN: The White House point of view and which they feel is reflected in Representative Cole's position there is that it is very clear that they're not going to -- neither side is going to let taxes go up on all Americans.

And so why not just cut a deal on letting those tax cuts be locked in for lower income Americans and work out what they're going to do about the upper income Americans. House Republicans say, come on, you know where we stand on this, we're not going to change overnight just because you won reelection, Mr. President. We need to negotiate on some of the other big issues before anybody discusses those top tax rates.

BALDWIN: I know you say this is one Republican, you know, and the White House isn't too excited. But here is my big if I want to throw at you. If House Republicans were to begin to go along with this idea, you know, tax relief for everyone, but the wealthiest 2 percent before January 1, what would they want in return? What would Democrats need to pony up?

YELLIN: Great question. What they would need in return is a promise to change, go further on entitlements than the White House already has gone. So the White House has locked in or set in their budget that they will make certain changes and cuts that could rein in the deficit overtime. But the House Republicans and the Republicans in the Senate as well would specifically like to see more changes, more savings found, especially in Medicare and Medicaid, those two big things.

And I asked Jay Carney, the press secretary, whether the president would be willing to find more savings in Medicare and Medicaid if House Republicans would agree to the rate changes for upper income Americans and Carney did not say no, which is a meaningful thing here.

BALDWIN: It is always what they don't say.

YELLIN: Right. When you read the full language, he said the president has said he's flexible. So that's a big thing and also whether the White House would give a little on Social Security. And the president has also said he's flexible.

BALDWIN: OK. Jessica Yellin, we shall see. We shall see. Thank you so much for us at the White House.

(CROSSTALK)

BALDWIN: Let's keep talking about this.

Joining me now from Washington is Representative Allyson Schwartz, Democrat from Pennsylvania.

Congresswoman, nice to have you on.

REP. ALLYSON SCHWARTZ (D), PENNSYLVANIA: Good to be with you.

BALDWIN: What do you make of Congressman Tom Cole apparently coming to your side, saying to his Republican colleagues, go ahead and let the taxes go up on the wealthy come the 1st of the year, but keep everyone else's the same? Is this politically significant?

SCHWARTZ: Well, I think every time a Republican stands up and says we ought to be serious about, one, making sure that middle-class taxes don't go up, that we actually keep the breaks for middle-class Americans, that's a top priority for the president and for Democrats, so whenever we have a Republican agree on that, it helps move things forward.

And he is a respected member of the conference. And so I think it does help to have that kind of conversation. There is no question that...

(CROSSTALK)

BALDWIN: Let me just say -- go ahead, Congresswoman.

(CROSSTALK)

SCHWARTZ: Yes, the other thing he said that was also -- is that the election mattered. What the American voters did on Election Day is to reelect the president and to elect more Democrats to the Senate and more Democrats to the House.

And they said, protect Medicare. They said protect our middle-class tax cuts, and make sure that we do some deficit reduction and work it out. That's what they told us to do. So...

(CROSSTALK)

BALDWIN: Let me jump in.

At the same time, though, you have House Speaker John Boehner, you have the Senate Republican leader here, Mitch McConnell, they're accusing the president of holding up the talks or talking about the president's strategy. McConnell specifically criticizing President Obama for taking his case straight to the public.

Let's listen, first Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The election is over. He won. Congratulations. We have got a hard deadline here, however, and it is still -- he's still out on the campaign trail, kind of celebrating.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Going over the fiscal cliff will hurt our economy and hurt job creation in our country. This is not good for our country. It's as simple as that and the president understands it.

(END VIDEO CLIP)

BALDWIN: So, they're saying president needs to get in there, needs to directly negotiate, whip Democrats into line if necessary. Is that not happening? Are you hearing, Congresswoman Schwartz, from the president at all?

SCHWARTZ: Well, first, let me say that the administration is keenly interested in working with the Senate and the House to get this done.

The fact that the president is out and actually in my district on Friday morning talking to people what about is at stake in this country, at stake for their families and for our nation is something very important for him to be doing. Always engaging our voters, our public is an important thing to do.

And of course at the same time we should be and are having these broad discussions about how we move forward. What we really need is we need Republican leadership, you just quoted them, Mitch McConnell and John Boehner, to actually be sitting down and saying, look, there are places where we do agree. Let's start where we agree. Let's begin to have that discussion.

It would make a world of difference for either of them to actually say we're going to move ahead on both some revenues. We're going to protect the middle class, we're going to protect Medicare. We might need to make changes, but that's where we go. (CROSSTALK)

BALDWIN: What about this? Because this is possibly, you know, the most dire prediction I have heard today, and this comes from Erskine Bowles. In fact, we have some video of him walking into the White House just yesterday.

He co-chaired the president's debt commission. He is talking to both sides, talking to the president yesterday, talking today to House Speaker John Boehner, and I want you to listen to what Erskine Bowles says will happen if, if the government drives over the so-called fiscal cliff.

(BEGIN VIDEO CLIP)

ERSKINE BOWLES, FORMER CO-CHAIRMAN, NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM: If we go over the cliff, you're going to have, you know, a slowdown in economic growth of at least 4 percent. That puts us back into recession. That means two million people lose their jobs. That means unemployment goes to 9 percent.

You're going to see these businesses are all talking. Look, they're not waiting to see this happen. They are already slowing their -- their hiring. I think if you go over the cliff and we don't have a deal, you would see the markets really contract. You contract severely. I think you see Moody's and Fitch raise our debt rating -- excuse me -- lower our debt rating. And over a long period of time, that is going to lead to higher interest costs.

(END VIDEO CLIP)

BALDWIN: Congresswoman Schwartz, 20 seconds. Do you agree that that is what could happen?

SCHWARTZ: Well, what I agree with is that the American people, American businesses, families, our economy, the deficit we're experiencing all require us to take action now before the end of the year to protect the middle class and to protect Medicare and to strengthen this economy.

We should take action before the end of the year and we should make some decisions and we should set ourselves on a path to serious deficit reduction. And we can do that. We need to just be able to work together to make that happen.

BALDWIN: Congresswoman Allyson Schwartz, thank you very much.

Coming up next: Susan Rice, once again, comes face to face with several Republicans, and one senator in particular said she would make a better politician than a diplomat.

Plus, the economy, not great, but Americans are still buying up their Powerball tickets. Why? Because it is the biggest Powerball jackpot in history and it just got bigger.

(COMMERCIAL BREAK) BALDWIN: Dramatic new video out of war-torn Syria, as rebels claim they have shot down three government aircraft, including two helicopters.

You saw that. This video reportedly shows what rebels say is a newly acquired surface-to-air missile hitting, wait for it again, hitting the helicopter. We slow this down. You can actually see, there it is, the massive flame, the smoke, the moment of impact and the chopper ended up just crashing into a field.

Meanwhile, activists say at least 90 people were killed today in the latest firing -- fighting in Syria.

Today has been round two for U.N. Ambassador Susan Rice facing her critics on Capitol Hill. And so far, it is a replay of yesterday. The meeting that Rice requested with the senators did not go well, apparently bringing her no closer to gaining their support, if and when Rice were to be nominated for secretary of state.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS (R), MAINE: I continue to be troubled by the fact that the U.N. ambassador decided to play what was essentially a political role at the height of a contentious presidential election campaign.

(END VIDEO CLIP)

BALDWIN: Rice has been under intense criticism for publicly repeating CIA talking points that the attack that killed four Americans in Benghazi, in September 11, may have been connected to protests against that anti-Muslim video.

Diplomatic e-mails showed within a matter of hours of this attack the assault was linked to terrorists.

Want to go to senior congressional correspondent Dana Bash, live on the hill.

Is Susan Rice in a worse position now than before the meetings?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, you could argue the answer to that is yes. And I think today is significant because yesterday she was facing three of her toughest critics, Senators Ayotte, Graham and McCain, Republicans who had from the get-go before they talked to her vowed or threatened to block her nomination.

So that was one thing. Today is different because that senator you just played, Susan Collins, is among the last remaining moderate Republicans here. She does have a lot of information about what happened because she is the top Republican on the Homeland Security Committee, and she actually has a history of supporting Susan Rice. She was the one who introduced Susan Rice when she was at her confirmation hearing for the post she's in now as U.N. ambassador. So the fact that Susan Collins even has questions, I asked her point blank if she could support Rice for secretary of state, and her answer was not yet. She has to have other questions answered. That's not a good sign for Rice, but we should underscore a couple of things. One, she hasn't been nominated yet. And, two, she does -- she, Rice, does have a lot of support from Democrats, who still have the majority. The issue is whether or not she will need, if she's nominated, 60 votes to get confirmed.

BALDWIN: What about this? Because yesterday, we know some senators, they got some information from the now acting director of the CIA. Turns out it wasn't accurate. What is the story there?

BASH: I mean, Brooke, this is one of the things that really is stunning, that because part of the reason for these meetings is to try to reassure some of the administration's staunchest critics.

So, yesterday, accompanying Susan Rice was the acting director of the CIA, Michael Morell. And in that meeting, what happened is he told the senators that it was actually the FBI who took al Qaeda references out of those unclassified talking points, only to call back several hours later saying, oops, I was wrong, it wasn't the FBI, it was the CIA. Here is what Lindsey Graham, who was among those senators in those private meetings, said about that.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I can't help but feel incredibly disappointed that we were told something at 10:00 a.m. that couldn't withstand scrutiny for six hours and that is totally inconsistent with what we were told the day before. We now have five different explanations of who changed the talking points to take out Benghazi and four different reasons. This is becoming a joke.

(END VIDEO CLIP)

BASH: So what these meetings, at least this particular issue has done is added fuel to the fire and it is not like you needed to add any more fuel to the fire, especially for senators like Lindsey Graham, who is already -- who is really publicly outraged about a lot of issues dealing with the Benghazi attack.

BALDWIN: This is just one more, one more. Dana Bash, thank you.

After trashing the hit TV show "Two and a Half Men, the actor Angus Jones now backtracking from his controversial comments. That story's next.

(COMMERCIAL BREAK)

BALDWIN: Actor Angus Jones may be denouncing the TV show that is making him millions of dollars, but he says he didn't mean to disrespect the people behind the show. Jones who has just converted to the Seventh Day Adventist Church, called "Two and a Half Men" -- quote -- "filth" in an online video telling people not to watch his own show. Well, now the 19-year-old is saying sorry to the show's creators, to the cast, to the crew. Let me just read you part of his statement -- quote -- "I apologize if my remarks reflect me showing indifference to and disrespect of my colleagues and a lack of appreciation of the extraordinary opportunity of which I have been blessed. I never intended that" -- end quote.

And Charlie Sheen, whose exploits you know plagued the same show, said this -- quote -- "It is radically clear to me that the show is cursed" -- Charlie Sheen.

Folks are lining up today in hopes of becoming the very next Powerball winner. The jackpot now upped $500 million. That's up to this new record in the history of Powerball.

(COMMERCIAL BREAK)

BALDWIN: Just getting in some video we want to share with you.

This is the president, really for the first time since his reelection, sitting down with members of his Cabinet. Here you go.

(BEGIN LIVE FEED)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, listen, this is a wonderful opportunity for me to meet with my full Cabinet for the first time since the election took place.

The primary purpose, from my perspective, is to say thank you, because everybody here, in their respective agencies, has done a remarkable job on behalf of the American people across the board on a wide range of issues.

They have always prioritized how do we make sure that we have a strong middle class, how do we grow our economy, how do we put people back to work and how do we keep the American people safe and continue to extend our influence and our ideals around the world.

And I could not have a better collection of people, many of whom have stayed here throughout my first term. I think we have had as little turnover as any president during the course of a first term. And the reason is because everybody has done such a remarkable job.

So my main purpose is to say thank you to them, but also to remind them we have got a lot of work to do. There are going to be a few specific issues that we spend a lot of time on. One in particular that I should note is that the devastating impact of Hurricane Sandy is still being felt by families all across New York, New Jersey, parts of Connecticut.

We are very pleased that under the leadership initially of Janet Napolitano and FEMA, but now Shaun Donovan, who is heading up the task force, we're focusing not only on recovery, but now on rebuilding and making sure those communities come back stronger than ever, people get the help that they need. So that will be an important topic because it is really going to be an interagency concern. The second thing that we will be talking about obviously is what is on the minds of a lot of American families across the country, and that is making sure we get this fiscal cliff dealt with and that middle-class taxes don't go up.

I already spoke extensively about that today. I will just repeat. There is no reason why taxes on middle-class families should go up. It would be bad for the economy, it would be bad for those families. In fact, it would be bad for the world economy. And so I think it is very important that we get that resolved.

And I am very open to a fair and balanced approach to reduce our deficit and provide the kind of certainty that businesses and consumers need so that we can keep this recovery going. And obviously we will be spending some time talking about national security issues as well.

But I just want to say thank you to this extraordinary Cabinet for a job well done. And I will take this opportunity to publicly embarrass two members of the Cabinet whose birthdays are either today or tomorrow.

Ric Shinseki of the Department of Veterans Affairs, happy birthday to you. That is actually today.

(APPLAUSE)

OBAMA: And Janet Napolitano's birthday is tomorrow.

(LAUGHTER)

(APPLAUSE)

OBAMA: All right, guys, thank you. Want to get back to work.

(CROSSTALK)

OBAMA: Thank you so much, guys.

QUESTION: Can you talk about it at all?

OBAMA: Susan Rice is extraordinary. Couldn't be prouder of the job that she's done.

(APPLAUSE)

(END LIVE FEED)

BALDWIN: So there you have it. Susan Rice, he says, is extraordinary, the current ambassador and possibly could be floated as a secretary of state. She's really come under fire. She's been meeting with senators on Capitol Hill, Republican senators, really some of her fiercest critics.

And from what we heard from the likes of Graham and from Susan Collins, and McCain, Ayotte, they're all now -- they have more questions really than answers. Again, the president meeting with the full members of his Cabinet and many of those members perhaps will not be with him in the next couple of months.

Meantime, in the White House today, you saw what the president was doing. What about inside the House? Beginning to look a lot like Christmas. Holiday decorations unveiled today. This year's Blue Room Christmas tree features ornaments decorated by children living on U.S. military bases all over the world. How about that?

First lady Michelle Obama, she used the occasion today to thank military families.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: We're grateful for your sacrifice. We're grateful for your service. And that's really why we wanted to invite all of you here today, to say thank you. This is one big huge thank you. For me to you all, thank you. We have found some wonderful ways to pay tribute to your service and sacrifice as an important part of our holiday decorating efforts here at the White House.

(END VIDEO CLIP)

BALDWIN: After some of the formalities, the first lady sat down with some of the children for some holiday crafts and treats there at the White House.