Return to Transcripts main page


New Details On Fiscal Cliff Deal; Palestinians Win Small Step To Statehood; Bradley Manning Testifies; Interview with Congressman DeFazio; Interview with Congressman Kevin Yoder

Aired November 29, 2012 - 19:00   ET


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, breaking news, we are finding out what this hour what the White House put on the table to avoid the fiscal cliff and the GOP's reaction.

Plus, the U.S. votes no, but Palestine gains new status in the U.N., a country. The legal ramifications for Israel are not insignificant.

And a month ago, a woman dies after doctors refused to perform her abortion. The woman's husband makes a major announcement today. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, we have breaking news. New details on the fiscal cliff deal that Treasury Secretary Timothy Geithner put on the table today during his meeting with congressional leaders on the Hill.

These details just coming in. Jessica Yellin, our chief White House correspondent, has them and Jessica, what have you learned about what Geithner took, you know, listed out with the numbers and put on the table?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Erin. Well, here are some of the details I'm getting from senior officials on both sides. The headline is that he put out a number of $1.6 trillion in new taxes. That was at according to Republican officials, a surprise.

They expected a much smaller number and that has some Republicans crying foul. He proposes extending unemployment insurance, continuing the dock fix. As you know, that's approving additional spending on Medicare to pay doctors.

The AMT patch protecting middle income Americans from a huge tax hike, home mortgage refinancing, $50 billion in stimulus next year and in return, the administration would offer $400 billion in additional Medicare and other entitlement savings next year to be spelled out as they negotiate.

There would also be an agreed mechanism for allowing a vote on a debt ceiling increase for perpetuity. Now as I said, Republicans not at all pleased with this, already publicly crying foul. The White House says, look, the president has already signed into law $1 trillion in tax cuts last year. They're willing to compromise on more. Bottom line, it's an opening gambit, but right now, both sides seem more dug in than they did before -- Erin.

BURNETT: It's certainly a day that was pretty grim on that front. Jessica Yellin, thanks very much. And that $1.6 trillion, everyone, as she said, surprising Republicans and a crucial number especially when contrasted with the $400 billion entitlement cuts, kind of shocking. I'll explain why in a moment.

But I want to tell you the Republican response as Jessica indicated. They didn't want anything to do with Geithner's plan. Yesterday, House Speaker John Boehner, you may remember moved the markets higher.

He had this joyful talk about a possible deal, but today, it was like a break-up over tax. He went from love to disgust. Here he is right after Tim Geithner put that deal on the table.


REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: No substantive in progress has been made in the talks between the White House and the House over the last two weeks.


BURNETT: All right, that's pretty grim. Stocks lost early gains on that news and the day went downhill. Senate Majority Leader Harry Reid slapped back.


SENATOR HARRY REID (D), MAJORITY LEADER: We're still waiting for a serious offer from the Republicans.


BURNETT: All right, so, they agree on something. No progress, but then it actually went beyond that. Reid actually got a little personal.


REID: I don't understand his brain so you should ask him, OK?


BURNETT: Funny, but really not so funny. So what happens when the men in charge start throwing sand in the sand box? We just go over the cliff like some are now suggesting? Recall what Erskine Bowles of the now famous Simpson-Bowles Commission said on OUTFRONT two and a half weeks ago.

(BEGIN VIDEO CLIP) ERSKINE BOWLES, CO-CHAIR, NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM: I think that's crazy. You know, why would you bet the country? Really bet the country by going over this fiscal cliff.


BURNETT: It's crazy? Betting the country? Well, according to the Congressional Budget Office, Bowles has a good reason for saying what he did. If we don't pause the cliff, the economy would go back into a recession, according to the CBO.

Economic output would drop by half a percent and unemployment rate would go back up to 9.1 percent by the end of next year. Now, the clock is ticking. John and Harry, get out of the sand box.

Thirty three days are left. Democratic Congressman Peter Defazio of Oregon is OUTFRONT tonight. Sir, really appreciate your taking the time. First, let me just get a response from you about Timothy Geithner's plan that he put on the table.

A $1.6 trillion in revenue, $400 billion in cuts, I'm a little confused because the president said he will give $2.50 in spending cuts for every dollar in revenue. This is -- this is the opposite.

REPRESENTATIVE PETER DEFAZIO (D), OREGON: Well, finally, the White House has learned not to negotiate with itself, but with the opposition, which is the Republicans. Remember, there is no real cliff. On January 1st, the only thing that goes away is the Social Security tax holiday and nobody is seriously talking about continuing that.

All the other tax increases don't take place until sometime around March. Gives Congress plenty of time to revisit them, but that's $4 trillion of additional revenues. So OK, we're going to cut that more than in half, $1.6 trillion. That will probably mean Reagan era rates on capital gains.

It would mean Clinton era rates on dividend taxation. Clinton era rates on higher income people and you're getting close to $1.6 trillion. So I don't think it's that unreasonable and the key thing he put forward today and I'm pleased because I've been raising this for more than a month.

A third of our deficit is due to high unemployment. We need to put people back to work in this country and if we funded a robust transportation infrastructure bill as part of this package and put a couple of million people back to work, a lot of the deficit goes away.

BURNETT: But didn't they say that last time we put some of that?

DEFAZIO: I didn't vote for that and this word stimulus is totally discredited. It did not -- 7 percent of that bill was investment and infrastructure, 42 percent was tax cuts. We've been trying tax cuts for more than a decade. They don't put people back to work. Real investment does. We have report after report, economist after economist, real investment will put millions of people back to work.

BURNETT: Right. Those were tax cuts though of the vast middle in this country. Exactly what you want to extend and so did the Republicans want to extend, right? I'm still though, sir, a little confused. If the president wants $1.6 trillion in revenue and he is going to do his math of two and a half, that's $3 trillion in cuts. Why is he only putting 400 billion out?

DEFAZIO: Well, he's probably leaving himself a little room to negotiate.

BURNETT: A little.

DEFAZIO: -- is reasonable on Medicare. If he just started negotiating lower drug prices that saves Medicare $230 billion over 10 years and then you deal with some of these high cost private insurance plans under Medicare. And a couple of other minor changes that won't hurt average American, won't make them wait until 67 to get Medicare, we could get the 400 billion there.

BURNETT: Now, let me follow up on that one point though. Because when the president earlier had talked about Medicare, not today via Tim Geithner, but before, he has said, yes, I support raising the age on Medicare from 65 to 67.

You know, Simpson-Bowles talked about raising the age. I mean, most people do and say that's really going to be the only way to get out of this. Medicare is going to be insolvent in the year 2024. You really think we don't have to make real changes or is that just, I understand your constituents don't want you to say anything.

DEFAZIO: That doesn't deal with the cost of prescription drugs.


DEFAZIO: It doesn't deal with overpriced and unnecessary medical care and finally, if we did extend the age to 67, guess what? Everybody between 65 and 67 can't buy private insurance. They'd have to go to the Obama exchanges with low incomes.

And they would all get subsidies there to buy private insurance which probably in the end would be more expensive than Medicare, so actually, you would just move from here to here and you might even increase the deficit.

BURNETT: All right, interesting point, but I still find it a little bit hard to believe. I know no one wants changes in Medicare. It's not popular, but when you say we don't have to make substantive changes to a program that's going to consume all of our federal spending if we keep going the way we're going over the next decade or so, we do need to make substantial changes. It's going to hurt.

DEFAZIO: I didn't say that, Erin. I mean, I'm part of the quality health care coalition. We want to move to outcomes space medicine. We want every state to be as efficient as my state and 16 other states who are low cost providers who provide care at about a third of the cost of Florida for the same procedures.

A quarter of the cost of New York for the same procedures, we need to rationalize the system across the country and go to those states that are wasting a bunch of money and make them more efficient providers.

We need to negotiate the prescription drug prices saving a quarter of a trillion dollars and you know, we need to reign in these private health insurance plans that are living off Medicare. Those are real changes.

BURNETT: All right, let me ask you this though. You said there is no cliff. CBO says there's a cliff. Erskine Bowles passionately believes there's a cliff. I get your point. It doesn't all hit on day one.

But the fact of this country and you guys in Washington not being able to get a deal done just the atmosphere, the frustration and the fear that could create, how can you say that's not a cliff?

DEFAZIO: Well, a lot of hysteria out there, but again, the fact is only the Social Security tax holiday goes away. The withholding tables don't change. No one's taxes go up in their first month or their first two weeks paycheck in January.

The cuts through sequestration, which is a stupid way to cut the budget, by the way, across the board don't go into effect immediately and I would hope Congress would revisit those and make discreet cuts instead of stupid across the board cut, which hit good programs as much as they hit unnecessarily programs.

So we would have time to get to work on January 3rd and deal with restoring tax benefits to middle income and working families and deal with a more discreet way of reducing spending.

BURNETT: And you'd be willing to take it if the market reacted incredibly negatively. You had sharp selloffs. Companies were afraid to hire, you think all that's manageable?

DEFAZIO: I'm not sure why that would happen because you know, Wall Street's very good at manufacturing hysteria. I opposed the TARP bailout. I remember how they crashed the markets 600 points the next day and they got a bunch of my colleagues to come back and change their votes. They can only manipulate it so far and then there's real value there that will come back.

BURNETT: I wish that we could talk about TARP. Let's do it another time because I think that would be a fascinating conversation. Thanks very much, sir.

OUTFRONT next, the dramatic decision by the U.N. and this was incredible. It could open the door for Palestine to charge Israel with war crimes.

And former President George H.W. Bush is still not out of the hospital. He's been there nearly a week. We're going to update you on his condition.

And the FBI today made an announcement in the pursuit of the killers of the American ambassador in Libya. One of our guests says it's completely ridiculous.


BURNETT: Our second story, OUTFRONT, victory for Palestinians. The U.N. General Assembly voted in favor of Palestinian state hood. We want to show you the wild celebrations going on right now. This is the West Bank.

After the U.N. overwhelmingly gave the Palestinians something they have wanted for years and the vote was pretty overwhelming, 138 countries in favor. It was a shellacking for those against it.

The resolution passed against the will of the United States, Israel, Canada and six other nations. Here's U.N. Ambassador Susan Rice after the vote.


SUSAN RICE, U.S. AMBASSADOR TO U.N.: Today's unfortunate and counterproductive resolution places further obstacles in the path to peace. That is why the United States voted against it.


BURNETT: Now, the vote gives the Palestinians a higher profile at the U.N. and more important, it also means they can join organizations like the International Criminal Court. That is important because it could allow the Palestinians to pursue war crime charges against Israel.

OUTFRONT tonight, Israeli Vice Prime Minister Silvan Shalom. Good to see you again, Mr. Shalom. So, what does this vote mean for Israel?

SILVAN SHALOM, ISRAELI VICE PRIME MINISTER: It doesn't mean anything. I think it means resolution because if you'd like to get the state, it should be on negotiations. They've got a very big support, but they need the support of one country, Israel. And they would get it only if they will resume the negotiations.

What's happened today is that the international community gave them a mandate to violate agreements that were signed between Israel and the Palestinians because according to the OSLO, it says they're very clear that no one can take a unilateral move.

And they took the unilateral move against the will of Israel and I think that if you don't respect their signature or agreement, they would keep the agreement, it would be made be given and that's what we can't stand.

BURNETT: Now their view is though they've wanted decades. They wanted to have a two-state solution and Israel, you say you want one, but keep saying there's negotiations, but don't get one, so they feel this is their only way.

SHALOM: No, because they can get any resolution at the U.N. I want to mention and to remind you, in 1988, in 2008, that very similar. What does it mean? They got the state. They can get the state from negotiations.

They did everything to prevent negotiations. Turn to Netanyahu and ask him to accept the idea of two-state resolution. He made a speech about it in Barlan University.

Then they put a new demand in front of him that was not put in front of any other prime minister before, to freeze the settlements for 10 months. Still didn't show up, but not only us, our predecessors negotiated with them for a very long time, offered them 98.5 percent of territories and still didn't get an agreement.

BURNETT: All right, all this may be true, but the countries in the Middle East that recognize you all voted for this. It was only nine countries, the United States was alone. Italy, France, they voted for Palestine. Does today's vote worry you that OK, it's you and the U.S., but the U.S. has lost power and influence. Israel's losing power and influence.

SHALOM: Most in Arab countries and those from the third world without always against Israel.

BURNETT: Italy, France, I mean, big --

SHALOM: OK, so Italy, France and others joined in because they filled it after the declaration is very poor -- to helping, encouraging to strength. The only way to do it is slow negotiations and negotiations means to give and take. Not willing to take any kind of -- if they were glad to come, they can find us willing.

BURNETT: And one final question, you talk about Gaza and that was how why some of the European countries might have voted for this, but you know, everyone said that Hamas gained a lot of power. Hamas doesn't recognize your right to exist. The PLO does, Abbas who wanted this, this statehood resolution. Is it possible the win today gives him a boost? That this is something that is good for you?

SHALOM: First, it raised the question if he represents the whole Palestinians or only half of them. Only the West Bank as you have just mentioned. Hamas don't recognize the right of Israel to exist, so what we are dealing with here is the Palestinian people. That's first.

The second thing is more important. They are violating their signature with Israel. It makes those that are opposing the peace process in Israel and in the Arab world much more powerful because they always tell us, don't believe the Palestinians.

They will never, never implement their commitments and they show us once again that we are committed not to make a lateral move. We'll negotiate for the final start agreement. Unfortunately, those that oppose the idea to them the Palestinians become more powerful and the community helped them to accept or to convince the Israel public opinion that there is no one for us.

BURNETT: All right, Minister Shalom, thank you very much. We appreciate your coming on. It was a big day today on that vote.

And OUTFRONT next, the day after I spoke with Wikileaks founder, Julian Assange, the man charged with leaking thousands of military documents, was in court today, Army Private Bradley Manning made his case.

More than two months after the deadly attack on the Benghazi consulate, the FBI today asked the public for help with the investigation. Does it add up?


BURNETT: Our third story, OUTFRONT, allegations of abuse. Army Private Bradley Manning took the stand in his own defense for the first time today. The former intelligence analyst is charged in the largest leak of classified material in American history.

He's accused of spilling thousands of military and State Department documents, which ended up on Wikileaks. Manning says he suffered abuse when he was confined to a Marine Corps brig for nine months.

Last night on OUTFRONT, I spoke to Wikileaks founder, Julian Assange, about Manning.


JULIAN ASSANGE, WIKILEAKS FOUNDER: The case is about the abuse of Bradley Manning. Over a nine-month period, Bradley Manning was abused. Why was he treated that way? His lawyer argues and many others who have followed the case argue he was ordered to coerce him into a confession that would bring down me or bring down Wikileaks.


BURNETT: The Pentagon has maintained Manning was held in accordance with rules governing all maximum custody detainees. Obviously if convicted, they could go for life in prison.

OUTFRONT tonight, Chris Lawrence is at the Pentagon. Chris, let me just ask you, Manning and his defense team, they have been claiming that the private was held in harsh conditions.

Here's a quote from what he said today. He said, quote, I'm going to die. I'm stuck inside this cage and he also said I have pretty much given up. My world had just shrunk. So what else was in his testimony?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, he was very calm. He was very composed. Manning was dressed in his dress blues and he described what it felt like in that first prison back in Kuwait, which he described as a black and lonely hole. He said that's where he thought about suicide.

He said I thought I was going to die in that cage then he was transferred to Quantico, where he spent about five months in solitary confinement and he said that really brought him back to Kuwait. He said I felt like I was being dragged back into that hole. So we heard a lot of description about what it was like for him under that sort of confinement -- Erin.

BURNETT: Now, the military argues that keeping Manning in a maximum security in prison, in Quantico, was proper treatment giving the circumstances. This is espionage. This is giving away secrets of the United States. This is something that could get the death penalty even though they're not going for that. Are they making that case?

LAWRENCE: They are. They say, look, at the time, he was a maximum security detainee who posed a threat to himself and others, but today, what we heard on the stand was Manning giving some different perspective to some of those incidents.

He said the guards looked at him and there was some concern because he was playing peekaboo with himself in the mirror or dancing to music when there was no music playing. He said it was out of sheer boredom. He said he wasn't allowed to lay down during the day.

There was nothing to do in that cell for 24 hours, so he used himself to keep himself occupied. We heard of some chinks in the government's case because the Marine commander of that base has testified that he was telling his higher ups back here at the Pentagon right from the get go that Quantico was no place to keep Manning for a long time.

In fact, he said he had recommended that Manning stay there no longer than 90 days. Manning ended up there about three times that long and we heard from a Navy doctor who said he was repeatedly advising the base commanders that Manning should be taken of suicide watch when Manning was kept on for quite some time.

BURNETT: Thank you very much. Appreciate it. Chris Lawrence and the government will be questioning Manning tomorrow. We'll have the latest.

Three days away from the fiscal cliff though and another Republican defies Grover Norquist and his tax pledge. Republican Congressman Kevin Yoder of Kansas OUTFRONT to explain why he did it.

And a month ago, a woman died when doctors failed to perform an abortion. Her husband is now stepping out.


BURNETT: We start the second half of our show with stories we care about, where we focus on our reporting from the front lines. And we begin with some new photos obtained by the Institute for Science and International Security. They say they show more activity at an Iranian military site, a site that nuclear inspectors have been repeatedly been denied access to.

Here's what the Parchin site looked like in September. The roofs of the buildings are covered with tarps. Some are not covered at all. So, just take a look. Now, we're going to fast forward it. Switch the picture to November 7th.

Get your eyes oriented again here. What you'll see now is that the buildings have blue roofs and there's new equipment on site. Again, this is according to the analysis from ISIS. The think tank says the images indicate additional changes are being made to the site, making international inspection more difficult.

Well, a Russian judge says video performances by the punk band Pussy Riot should be removed from the Internet, citing elements of extremism. Their most notorious video is the performance that landed two of the band members in prison at the time the charge of hooliganism. In it, the band sings an anti-Putin song in a Moscow cathedral.

The judge today alleges that video includes words and actions which humiliate various social groups based on their religion. The ruling also restricts the band's Web site and blog.

And former President George H.W. Bush has been in a Houston area hospital now for six days. A spokesman tonight says Bush has been treated and cured of bronchitis, but remains at the hospital because of a lingering cough. His office says he's in stable condition and is expected to be released in the next 72 hours. Bush is 88 years old and he is the oldest living former president of the United States.

And an update now on Savita Halappanavar, the Indian woman who went to an Irish hospital for back pain and was told she was having a miscarriage. Now, despite the circumstances, her husband Praveen says doctors refused to abort the fetus because of Ireland's strict abortion laws. Savita ended up dying of blood poisoning. Now, Praveen has decided to take the case to the European Court of Human Rights. His lawyer tells OUTFRONT he is taking the case to court because Irish officials failed to adequately investigate.

And a bankruptcy judge has approved the bonus plan for top executives of Hostess Brands, the maker of Twinkies. The $1.75 million plan gives 19 executives bonuses ranging from $7,400 to $130,005 if they meet benchmarks during the liquidation process. The plan was opposed by union reps.

And it has been 483 days since this country lost its top credit rating. What are we doing to get it back?

From July through September, the U.S. economy grew by 2.7 percent. It's much higher than the previous estimate of 2 percent. But it was in line with expectations. And our fourth story OUTFRONT: Tim Geithner putting a deal on the table. We told you the details at the top of the show: $1.6 trillion in taxes, extend unemployment and put the AMT patch, home mortgage refinancing, $50 billion in stimulus.

Now, in return, Tim Geithner offered $400 billion in entitlement savings and he also said, if you do all this, we also have to agree on a debt limit.

OK. So you might say there's no way Republicans are going to accept this. But let's see.

Congressman Kevin Yoder is a Republican of Kansas. He's OUTFRONT, and a member of the Appropriations Committee.

What do you say to Secretary Geithner's bid?

REP. KEVIN YODER (R), KANSAS: Well, I don't think it's a serious proposal. It', Erin. First of all, thanks for having me on the show.

I don't think it's a serious proposal. It's not the type of balanced approach the president's spoken about over the past couple of years and I don't think it's the type of thing that's going to get our economy going again. It's certainly not going to affect the deficit very much. And it's just the type of balance that the American people are looking for, way too high on taxes. Not nearly enough on spending reductions.

BURNETT: And I'm wondering. You know, the president has said -- he said all the way along, he said in debates with Mitt Romney, if I give you a dollar of revenue, if you guys give me a dollar of revenue, I'll give you $2.50 of spending cuts. With this $1.6 in revenue, that's $3 trillion in spending cuts. He's coming in with $400 billion.

So, would you try to get him to $3 trillion here or would you try to bring down the revenue number?

YODER: Well, I think you absolutely have to bring down the revenue number. We are not going to tax and spend our way back into economic prosperity in this country. We are going to have to work together.

I think most Americans are tired of seeing the partisanship and the debates. I'm frankly very pleased the speaker's up at the White House working to find a solution. Most people want certainty. They want long-term predictability in the economy. And raising taxes for this amount I think would put us back into a recession and ultimately be counterproductive to getting our economy going on.

BURNETT: Now, John Boehner clearly, he's the key negotiator for your side. There's no question about that. Are you going to agree to whatever deal he brings you? If he come and says, hey, Representative Yoder, it's $1.4 trillion in revenue. I know you don't want $1.6 trillion, I know you want -- it's $1.4 trillion. Do you say all right, I trust John Boehner, I'm going with it? YODER: No, the speaker still has to sell it to Congress. He's still going to have to sell it to both Republicans and Democrats. I'm expecting whatever bill comes through is going to be partisan. That means you're going to have to have a lot of input and a lot of effort to put together a bill that brings in a lot of party's ideas.

So certainly, whatever they come up with at the White House is going to have some public discussions. I'm going to talk to my constituents about it at home. We're going to have an opportunity to do that. And so, the speaker's going to have to sell it still.

But I think we're confident that the speaker has an attitude of finding a solution. He knows that a long-term solution is critical to getting this economy back on track and waiting until the end, the very last minute is not our goal. We're trying to get this done soon.

BURNETT: All right. Let me ask you something about revenue, because, you know, everyone's talked about this pledge, right, to not raise taxes -- championed by Grover Norquist. He has become a household name in this country. Love by some and loathe by some.

You though are one of six House Republicans plus seven in the Senate who didn't sign the pledge to never vote for a tax increase. So, you're willing to vote for a tax increase. What made you, when you were given that opportunity and so many of your fellow elected officials signed it, what made you say no?

YODER: Well, it's not because I think we should raise taxes. It's because I believe my obligation to the Constitution, to the constituents of my district, and they want an informed congressman that's trying to find a solution. And if you forego every option before you even get into negotiation, you're not really trying to work with the other side.

So, I'm not sitting here telling you I think raising taxes is the answer. I do know the president has said he'll veto, you know, any legislation that doesn't find additional revenue. So we've got to find a solution. Going off the cliff at the end of the month is not an option. It would put us back into recession.

And so, I just think a lot of these pledges and all these things, that ultimately it restricts our ability to work together and find solutions that will save the country. You can't foresee every solution. So, I didn't think signing the pledge made sense. And yet, I still don't think raising taxes is the answer. But it may ultimately some type of revenue may be the ultimate end of the bargain.


YODER: And I think the Republicans and the speaker are being very reasonable in saying, OK, you said three to one, four to one, I heard in the debate, the presidential debate, 10-1. OK, here's our one, where's your three, where's your four?

So, the conversation is really now in the Capitol moving back from the revenue and back towards where the spending reductions, where are the entitlement reforms that the president promised he would do. So, in the sense, the speaker's trying to call the president's bluff. And we're going to see if he comes through with something.

BURNETT: I think the Republicans, they said they wouldn't even accept 10-1. But, all right, thank you very much, Representative Yoder. Good to see you.

You know, as we said, Kevin Yoder there explaining why he's against the anti-tax pledge. And it wasn't that he was for raising taxes. It was more complicated than that. But he's one of the few and this issue of Grover Norquist tax pledge is pitting Republican versus Republican.

Just this week, CNN contributor Erick Erickson, founder of the conservative blog, threatened a run against Georgia Senator Saxby Chambliss, because Chambliss denounced the Norquist tax pledge.

Erick Erickson is OUTFRONT, along with John Avlon.

Now, you just heard Kevin Yoder, Erick, make this case for -- look, I'm a Republican, I don't want to raise taxes, but my duty is to the Constitution. I want to do what's right, so I'm not going to sign that pledge.

And it sounds like people like you, I'm going to run against you, you got to be tougher.

ERICK ERICKSON, CNN CONTRIBUTOR: You know, I would go back to the Clinton tax rates in a heart beat, but they'd have to give me the Clinton spending rates as well in terms of GDP, and they're not doing that, and no one's ever put that on the table.

What we've got in Washington right now are Republicans and Democrats both trying to pivot to be the more reasonable party in front of the American people. The Republicans are going to get blamed no matter what they do. That's political environment right now. They might as well embrace the fiscal cliff.

BURNETT: Well, I mean, you heard Peter DeFazio say earlier in the program, Democrat, go off the cliff, there is no cliff. No problem.

JOHN AVLON, CNN CONTRIBUTOR: Folks on both sides drinking the Kool-Aid, and saying, look, there's not a clip there and they're going to play chicken and go off. This is what happens --

BURNETT: They're going to go off, and you when that happens, you're road kill at the bottom.

AVLON: That's exactly right. Most folks who are sitting at home right now and saying since the economy's improving, Congress, don't screw it up. And you get some folks on the far left and far right saying there's no cliff, don't worry about this. But the economy is hanging in. We're after the election. This isn't an ideological debating society. This is about getting something done.

Let's make a short-term deal and work on a real grand bargain with things like tax reform, something that's needed.


ERICKSON: John, you're obfuscating on this because the deal that's there, we're in this situation because Congress came up with what they're calling the fiscal cliff now and they're calling it the fiscal cliff because they don't want to e embrace either the tax increases or the spending cuts and I think it's foolish to think that this Congress can come up with a better deal than the deal that got us in this place in the first place.

BURNETT: You know what's interesting, John, to Erick's point, though, there is a great irony in this, right? That the Democrats are saying we've got to raise some taxes and the Republicans are saying we've got to some spending, the fiscal cliff does both. Just not in the way anybody wants it.

So if they can't do that, how are they going to find a way they can all agree on?

AVLON: Well, we got in the situation because of the super failed committee. You know this, Erin.

BURNETT: Oh, yes.

AVLON: This is a giant hatchet as opposed to a scalpel.

ERICKSON: It was designed to fail.

AVLON: I agree with designed to fail, Erick, but the real solution and real irony is going to be the ultimate deal's going to look like the Obama/Boehner grand bargain that was negotiated and almost done in the summer of 2011. It will have entitlement reform, spending cuts and revenue increases.

The fact that we couldn't make that deal then I think is a tragedy for the country. One of the thing's it did was lead to that AAA downgrading. That was unnecessary.

BURNETT: So, Erick, let me just follow up on this point, though, of what Republicans should accept. You said you'd go back to the Clinton era tax rates, no problem, if you could get the spending that went with it. But, you know, there are some in the Republican Party like Congressman Tom Cole among them, saying let's just go ahead and do that. Let the rates go up for people at the top, do that now in the lame duck and then wait and negotiate.

Is there anything about that that you think could make sense?

ERICKSON: That's not a negotiation. The president's not going to then lower those rates later. BURNETT: That just might be a capitulation.

ERICKSON: The president right now thinks -- yes, it is a capitulation. The president thinks he's got all the cards. Well, he doesn't have the one card of going over the fiscal cliff. The Republicans position improves at the first of the year and frankly, there are a number of people who aren't coming back, people who contributed to this mess.

And I'm not sure as a citizen I want the people who caused this mess to be the ones who try to fix it when we've got a new batch of people coming in January.

BURNETT: Aren't they in a stronger position, Democrats in January?

AVLON: Well, progressives in the Senate are certainly strengthened, which is all the more reason to get this done now. And really not look a gift horse in the mouth.

Look, you know, only in Washington, Congress, is an agreement on 98 percent of something not the grounds for common ground in making a deal. I mean, you've got 98 percent agreement on taxes. Take that deal. Don't go over the fiscal cliff. Then live to find another day on a real grand bargain we need which is going to get done on the next three weeks -- tax reform, entitlement reform, something more comprehensive.

ERICKSON: It's all symbolism though.

AVLON: It's not. It's real.

BURNETT: You really think Democrats, they get that tax increase, that they're going to come and give spending cuts later?

AVLON: I think there are ways you can try to make it binding.

ERICKSON: No, they're not.

AVLON: Look, Erick's made a great point historically that things like Gramm-Rudman, the spending cuts never end up happening. Those things need to get strengthened.

Everyone who's realistic at the table right now, who's not ideological, recognizes you've got to have a balanced plan. There needs to be entitlement reform. Serious cuts and revenue increases. You can't --

ERICKSON: We've had 18 debt and deficit commissions since '81. The national debt gone from $900 billion to $16 trillion, the cuts never came.

AVLON: Cynicism isn't a plan though, Eric. We need to put forward a plan. Can't just keep saying they're screwing it up.

ERICKSON: Historically, the plan never comes. BURNETT: If you don't put cuts in though with tax increase, you've got a problem, because it's easy to raise taxes on a few people. Most people will support that. Most people will not support cuts that hurt them.

AVLON: Yes, and that, look --

ERICKSON: You've got to have entitlement reform.

AVLON: You need to have entitlement reform. You can actually -- as Bowles-Simpson showed, you can actually lower rates, loopholes and raise revenue. That's ultimately the win-win that's got to be achieved.

BURNETT: All right. Thanks to both. Appreciate it.

More than two months after the deadly attack in Benghazi consulate, investigators are still looking for answers. And today, the FBI turned to Facebook for help.

And a possible turning point in Syria. The Obama administration tonight weighing whether to take a big step and involve arming the rebels.


BURNETT: We are back with tonight's "Outer Circle" where we reach out to our sources around the world.

And tonight, we go to Syria where the Internet is nearly blacked out, the road to the airport in Damascus is shut down, the rebels are advancing. And the U.S. is still weighing whether to arm them. The U.S. ambassador to Syria today saying, quote, "The president has never taken the provision of arms off the table."

Nick Paton Walsh is in Beirut and I asked him about the deteriorating situation in Syria.


NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: Two dramatic developments today. First, the communications blackout across the country. The Internet down, along with most cell phones, perhaps done by the regime to stop communications with the outside world about their successes, perhaps suggesting a crisis at the heart of Damascus' ruling elite.

But also, key movements on the outskirts of their capital. Damascus International Airport, flights canceled from there, reports of clashes nearby, two Austrian peacekeepers working for the U.N. likely wounded and regime forces moving in the area around there to take on rebels who say their only two kilometers. That vital symbol on the outskirt of the capital clearly under threat at the moment and after months of stalemate, signs of real change and movement on the ground -- Erin.


BURNETT: Thank you, Nick.

And now to Cairo, where President Mohamed Morsi's move to fast track a new constitution is being met with resistance. Some say it's a way to diffuse anger over Morsi's decree to expand his presidential powers and weaken the judiciary. But critics say he's hijacking the constitution.

Reza Sayah is in Cairo and I asked him about it.


REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Erin, today, a special panel voted to approve a draft of Egypt's new constitution. In about 15 days, Egyptians will vote yes or no on the constitution despite objections by opposition factions who say the process was pushed through by Islamists who tried to squeeze out the liberals and moderates.

In a taped interview, President Morsi rejected claims that he was being a dictator.


MOHAMED MORSI, EGYPTIAN PRESIDENT (through translator): There is no room to speak of dictatorship. As an Egyptian, I have suffered a lot of the lack of democracy, absence of democracy, of dictatorship and of corruption in my land. And this is -- and this dictatorship that you are talking about does not exist.


SAYAH: The president says if Egyptians do not like the constitution, they can vote no on the nationwide referendum. We'll see if that calms down his critics -- Erin.


BURNETT: Reza, thank you.

And now, our fifth story OUTFRONT: 80 days since the attack on the Benghazi consulate. In that attack, Ambassador Chris Stevens and three other Americans were killed. So why is the FBI now saying it's going to use Facebook to ask for tips about the September 11th attack?

OUTFRONT tonight, Tim Weiner, author of "Enemies: A History of the FBI."

Let me ask you this. So, today, they say, after all this time, they're going to ask for help, for tips via Facebook to help them in this investigation. Is this -- are we reading too much into it, or is this a sign that they don't have much to go on?

TIM WEINER, AUTHOR, "ENEMIES: A HISTORY OF THE FBI": Well, Erin, the FBI has solved cases of political murder and international terrorism before but it can take years, sometimes decades and always takes old-fashioned investigative methods, shoe leather, sweat, time, patience. The idea of trawling for tips on Facebook and Twitter sounds pretty ridiculous.

BURNETT: It does. Why would they be doing that, do you think?

WEINER: Well, let me ask you this. If you knew something about a case of murder or terrorism, and the FBI asked you for information, would you post it on the Internet?

BURNETT: The answer would be no.

WEINER: No. This is a job for the CIA.

BURNETT: So let me ask you about the FBI on this. They are obviously involved because it was a U.S. ambassador so they waited three weeks until they visited the compound on October 4th because of security concerns. They say they weren't going to put agents in harm's way, they were worried.

CNN as you know went to the compound before, found the ambassador's journal. By the time the FBI got there, would all the evidence have been compromised or --

WEINER: Sure. I mean, in an arson, when a building burns down, it's a crime that consumes its own evidence. What the FBI needs to break a case like this is an informant, many informants, OK? But in the old days they would put a wanted poster up in a post office. You can put it on the Internet now.

But what will break a case like this is money. They can't put a suitcase full of cash on the table. CIA could do that.

BURNETT: And we would assume the CIA is doing that, right? I mean, obviously, as we all now are aware, three quarters of the Americans that were in Libya at the time of the attack actually worked for the CIA and not even the State Department, right?

WEINER: One would hope they're on the case. Obviously this is a case of extreme sensitivity. Ambassadors don't get killed every day or every year, and it was a bungle. It was -- you know?

BURNETT: Are they working together, do you think? I mean, so many people have fears, especially now you have Petraeus losing his spot at the CIA, in part because of work by the FBI. Now, that's just a recent case that happened.

But are they going to be working together, the way that they should be?

WEINER: They have been able to work together in the past and they've done great things when they work together. But throughout the 65-year history of the CIA, they have often been at each other's throats and not cooperating.

BURNETT: How much pressure is the FBI under to get this right? WEINER: There's a dead American ambassador and three other dead Americans in a case of murder, possibly terrorism. It can take decades to break a case like this, and they may be working on it decades from now but they will never stop.

BURNETT: They want to get it done quickly. That's part of the reason they're doing things like Facebook, just anything they can do.

All right. Tim Weiner, thanks very much. Appreciate your time.

WEINER: Thank you, Erin.

BURNETT: And a massive, brazen, beautiful con man is OUTFRONT next.


BURNETT: Four years, Kiev and Moscow have been locked in hey bitter dispute over the Russian pipeline that runs through the Ukraine. And this week, the Ukraine decided they have had enough. They are going to climb out from under Russia's thumb and sign a deal with a new gas partner -- Gas Natural Fenosa of Spain.

OK. This deal was a big deal. Over $1 billion and what it was going to do was have Fenosa build a new port terminal on the Black Sea for importing and exporting liquefied natural gas. Now, the signing of the agreement was such a big deal in the Ukraine, it was televised. It was attended by the Ukraine's prime minister and by a man called Jordi Sarda Bonvehi representing Fenosa. Huge step towards energy independence for the Ukraine and a Big Bird to Russia.

There was just one big problem. Gas Natural Fenosa doesn't know anything about it. It turns out that Jordi Sarda Bonvehi doesn't actually work for that company.

He's the bald gentleman in this shot. Take a good look at this guy. We actually don't know what his real name is. It appears he's a con man who was able to get through multiple rounds and rounds and rounds of negotiations and a televised appearance for a $1 billion deal without detection.

I mean, that's kind of incredible. You have got to give the guy that. In fact, on the surface, this seems like a mirror image of one of the most infamous swindles in history, when Victor Lustig posed as a corrupt government official and sold the Eiffel Tower to two different scrap metal companies in 1925.

Back then, Lustig got money. He got the money from sales and additional political bribes. Years later, he even pulled a scam on Al Capone. Yes. He swindled Al Capone out of $5,000 of money, adjust that for inflation.

Now, to quote Bill Clinton, that takes a lot of brass. And a lot of smarts, which is something that our new con man, as smart as he obviously was, apparently didn't have enough of because it seems that the mystery man didn't actually ask for any of the billion dollars or his cut upfront. So sure, the Ukraine loses a lot of face, but Bonvehi leaves with presumably nothing. He didn't even get any cash.

Thanks so much for watching. "A.C. 360" starts now. Wolf Blitzer is in for Anderson Cooper.