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Fiscal Cliff Finger-Pointing; Palestinians Win Historic U.N. Recognition

Aired November 30, 2012 - 05:00   ET


CHRISTINE ROMANS, CNN ANCHOR: Rejected. The GOP snubs the White House's opening offer in fiscal cliff talks.

ZORAIDA SAMBOLIN, CNN ANCHOR: Upgraded. Palestine celebrates a new status at the United Nations despite stiff American opposition.

ROMANS: Rich and now famous. We know the identity of one of those lucky Powerball jackpot winners.

Wow, that's good news.

SAMBOLIN: Can't wait to meet that person. Yes.

ROMANS: Good morning. Welcome to EARLY START. I'm Christine Romans. It's Friday.

SAMBOLIN: Oh, yes. Happy Friday. I'm Zoraida Sambolin. John Berman is hosting "STARTING POINT". That's coming up at 7:00. It is now 5:00 a.m. in the East.

And it's getting ugly. Up first this morning, insult and finger pointing in the fiscal cliff debate. In 32 days, tax rates spike and spending gets slashed. And Congress is breaking for the holidays in two weeks. It is a scenario that could send the economy spinning into a recession.

And here's where things stand right now. The president is pitching a plan that includes $1.6 trillion in tax hikes. He'll travel to Pennsylvania today to sell it to you. Republicans aren't buying it.

Listen to House Speaker John Boehner.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Despite the claims the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts.


SAMBOLIN: Democrats are firing right back at Boehner. Senate Majority Leader Harry Reid getting a little personal.

(BEGIN VIDEO CLIP) SEN. HARRY REID (D-NV), MAJORITY LEADER: I don't understand his brain, so you should ask him. OK?


SAMBOLIN: Ouch. Athena Jones live from Washington.

So, Athena, same old same old. Where do we go from here?

ATHENA JONES, CNN CORRESPONDENT: Well, that's the big question. And, yes, you can see that nice talk immediately after the election is pretty much gone away.

You've already mentioned one of the big sticking points, and that's taxes. Republicans and Democrats can't agree on how to raise the tax revenue? Should they end the Bush tax cuts for the wealthy, close the loopholes and cap deductions, should they raise the capital gains taxes, or all of the above? They can't even, right now, it seems like agree on just how much money should be raised on the revenue side.

Let's listen to a little bit more from Senate Majority Harry Reid about the Democrats stance on this.


REID: We are ready to protect middle class families from the fiscal cliff that they're facing by freezing the tax rates for the first $250,000 of all Americans' income, and letting the rates go to the same level they were during the Clinton administration. The Republicans know where we stand. We've said it, we've said it, we've said it so many times. The president said the same thing.


JONES: And, you know, Reid is right. Republicans know where the Democrats stand. But, you know, Republicans feel that there's been way too much focus on this whole tax issue and not nearly enough of an emphasis on the spending side of things. They want to hear about spending cuts.

Let's listen to House Speaker John Boehner again real quickly.


BOEHNER: Right now, all eyes are on the White House. The country doesn't need a victory lap, it needs leadership. It's time for the president, congressional Democrats to tell the American people what spending cuts they are willing to make.


JONES: And so, you know, the Republicans want to se bigger spending cuts, more spending cuts on the Democratic side. This $400 billion in proposed cuts by the White House, so far unspecified cuts to entitlement programs like Medicare is just not enough. So, that's where we stand with just over a month to go before this big deadline and as you mentioned, the holiday break is coming up, Zoraida.

SAMBOLIN: Very concerned about that. So, the president is taking his pitch to Pennsylvania we know today.

What is he going to say to the American people and how does he plan to sell his approach? Although a lot of people, you know, want a plan to pass.

JONES: Well, certainly, polls show there's support for this combination of tax increases and spending cuts. The president is hitting the road. He's going to this toy manufacturer.

The White House says this is the kind of company that relies heavily on middle class families -- the kind of families that could see their taxes go up if a deal isn't reach. And so, this is all part of the campaign to continue pushing for what he says both sides agree on, which is that tax rates shouldn't go up for the middle class at least.

Of course, Republican Republicans don't want to see them go up for anyone. Earlier this week, though, he talked -- he came out with this idea of my2k. Asking supporters to email their members of Congress and get involved, talk about what $2,000 means to them, which is about the amount they could see their taxes go up the average family next year.

So, this campaigning is not sitting well with Republicans as you can imagine, Zoraida.

SAMBOLIN: No. And we do know that the president says that he actually wants a deal done by Christmas. We'll see whether or not it's possible.

Athena Jones live in Washington for us -- thank you.

JONES: Thanks.

ROMANS: A new chapter opened in a decades-long conflict between Israelis and Palestinians by an overwhelming majority. The United Nations General Assembly voted yesterday to elevate the status of the Palestinian Authority from permanent observer to non-member state. Palestinians danced in the streets of the West Bank.

But the United States and Israel opposed the resolution. Palestine, as an individual state, still does not exist.

CNN foreign affairs reporter Elise Labott joins now from Washington.

Good morning, Elise.


ROMANS: This vote did not grant Palestinians statehood. But it was important to the U.S. and Israel, both countries are now withdrawing from the West Bank. Meanwhile, vast majorities of countries, 138 in total, backed Palestinians on this.

So, what does this new status grant them?

LABOTT: Well, the vote is really a global endorsement of the Palestinian position, a Palestinian state. It certainly, you know, bolsters Abbas and the Palestinian Authority who were weakened during the violence in Gaza. And, Christine, it gives the Palestinians hope and a bit of dignity that after so many decades of occupation that a state is possible.

Let's listen to President Mahmoud Abbas after the vote yesterday.


MAHMOUD ABBAS, PRESIDENT, PALESTINE (through translator): We did not come here seeking to delegitimize a state established years ago. And that is Israel. Rather, we came to affirm the legitimacy of a state that must now achieve its independence, and that is Palestine.


LABOTT: But as you said, Christine, it doesn't give the Palestinians anything tangible. And the U.S. feels this is really a false sense of accomplishment because on the ground, things are going to be exactly the same.

U.N. Ambassador Susan Rice spoke to this a little bit when explaining why the U.S. voted against the measure. Let's take a listen.


SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: The United States agrees, strongly, today's grand pronouncement will soon fade and the Palestinian people will wake up tomorrow and find that little about their lives has changed.


LABOTT: So, everyone is looking to see what President Abbas does now. Does he go to the table?

What the U.S. is really worried about is the Palestinians have more tools now to challenge Israel on the international stage at the International Criminal Court for instance over things like settlement activity. This is going to further marginalize Israel and really lead to restrictions on the Palestinians, including from U.S. Congress.

ROMANS: Only seven other countries oppose this resolution, the U.S., Israel and seven other countries. Could it affect our standing within the U.N., our relationships with other countries?

LABOTT: Well, I think it is a little bit of a bruiser for the United States at the United Nations. I mean, certainly, the U.S. is the primary backer of Israel. This vote is really a message to the United States that its blind support of Israel isn't going to be tolerated at the United Nations. I think it also puts a lot of pressure on the United States to get these parties back to the table and hammer out a deal as the main mediator in the peace process.

ROMANS: All right. Elise Labott -- thank you so much, Elise.

SAMBOLIN: It is eight minutes past the hour.

Egypt's constitutional assembly has passed a new rushed draft constitution. The 85-member mostly Muslim Brotherhood assembly passed 234 articles. The draft will be presented to Mohamed Morsy today, the president, and needs to be approved by the Egyptian people.

Critics say that the language in some of the articles is open to interpretation and may allow conservative Islamists to impose a rigid version of law. Human rights groups say it is full of holes. It is full of ambiguities. The proposed constitution hasn't eased public anger against Morsy's expanded presidential powers either.

ROMANS: The Supreme Court may decide as early as today whether to tackle same-sex marriage. They'll consider requests to review cases that challenge DOMA, the Defense of Marriage Act. It's a violation of the Constitution's Equal Protection provisions. DOMA only recognize marriages between a man and woman. It's also considering a challenge to Prop 8, that's California's ban on same-sex marriage which voters very narrowly approved back in 2008.

SAMBOLIN: Listen up. We now know the identity of one of the two Powerball jackpot winners. Fifty-two-year-old Mark Hill shares his staggering $294 million. So, he bought his winning ticket at this convenience store near Dearborn, Missouri.

Local media reporting he confirmed the news on Facebook with the post that read, quote, "We are truly blessed. We are lucky winners of the Powerball."

His son talked about the moment his dad broke the good news.


JASON HILL, SON OF POWERBALL JACKPOT WINNER: I keep thinking I'm going to wake up and think man, I had the craziest dream.

I just got a phone call this morning. He was stoic sounding. He was like it was us.

I'm very happy for him. He worked very hard in his life. He won't have to anymore.


SAMBOLIN: Very happy for him? Very happy for us, dude. You're his son.

The other jackpot winner in Arizona has yet to come forward. But this surveillance video may show that winner. People at this Maryland gas station say a man walked in to check his ticket and started freaking out. They say he told them he bought the ticket in Arizona.

Cops in Columbus, Ohio, feel like a million bucks because they believe they won a million bucks. They bought their winning ticket at this gas station. Once the ticket is validated, 22 officers -- I love this, will take home about $32,000 each, that's after taxes. Isn't that great?

ROMANS: It is really great.

All right. Ten minutes after the hour.

He's an accused murder and he's signing autographs. The latest bizarre twist in the Trayvon Martin case, that's coming up.


SAMBOLIN: Welcome back.

ROMANS: Good morning. Fourteen minutes past the hour, time for your "Early Reads" this morning -- your local news making national headlines.

In the "Miami New Times", reporting on George Zimmerman's latest effort to raise cash to fight his murder charges. The man who gunned down Trayvon Martin is offering a handsome autographed card to anyone who makes a donation to his defense fund. His Web site promises the card will be mailed in an unmarked envelope and the fund will be independently managed with all cash going toward his living expenses, defense costs and lawyers in that order.

SAMBOLIN: And in "The L.A. Times", Becks is saying bye-bye to the L.A. Galaxy as a player. David Beckham will play his last game for the Galaxy tomorrow in Major League Soccer's final against the Houston Dynamo. It is the team's third championship game appearance in four years.

Beckham says he still plans to play next year, it just won't be in MLS. "The L.A. Times" raised an intriguing possibility that Beckham may come back to the Galaxy as some point as an owner.


SAMBOLIN: All right. For an expanded look at all our top stories, just head to our blog,

ROMANS: And you can still see him in his underwear and he makes (INAUDIBLE).

SAMBOLIN: Ain't a bad thing.

ROMANS: All right. Fifteen minutes after the hour. Let's get up to date on the mornings top stories.

Fiscal cliff talks turning ugly. The president hits the road today, selling a plan that includes $1.6 trillion in tax hikes and $50 billion stimulus spending. Republicans are furious. House Speaker John Boehner telling reporters the president needs to get serious.

SAMBOLIN: Former President George H.W. Bush is in stable condition this morning. He's in a Houston hospital.

He was admitted a week ago and is being treated for bronchitis. His office says the former president is expected to be released in the next few days. Mr. Bush is 88 years old. He is the oldest living former president.

ROMANS: An international network of scientists reports the mile thick ice sheets that cover Greenland and most of Antarctica are melting at a rapid phase. Researchers used two decades of satellite readings to conclude we've lost 237 billion metric tons of ice in the past 20 years, raising the average global sea level by 7/16 of an inch.

SAMBOLIN: Thursday night football action. Saints and Falcons in Atlanta. The Falcons got off to a 17-0 lead before the Saints even scored a single point. Atlanta defense had a good night, grabbing five interceptions of Saints' quarterback Drew Brees.

Falcons go on to win it, 23-13. They are now 11-1 on the year. Atlanta could clinch the NFC South if Tampa Bay loses to Denver on Sunday.

ROMANS: All right. She's bruised, but not broken. Coming up, we go inside Lady Liberty for a first look at the damage left behind by Sandy to see what needs to be done to get this American icon back up and running.


SAMBOLIN: Welcome back. Christine Romans is minding our business for us.

ROMANS: Friday stock market check. The week is almost over. Stock futures are flat this morning as worries about the fiscal cliff are back. Markets finished slightly higher yesterday. But they really came off the day's highs after comments from House Speaker John Boehner on ongoing fiscal cliff negotiations, pessimistic comments.

Remember the days when stocks were up 100 points? Because there's optimism about fiscal cliff and they came off their highs because of pessimism. So, this is the way it's going to go folks probably to the end of the year.

Now, a U.S. bankruptcy judge has approved $1.75 million in bonuses yesterday for 19 Hostess executives as long as they meet certain objections as they close down Hostess. Of course, Hostess is the maker of the staples like Twinkies and Wonder Bread, closed its doors earlier this month after its bakers union went on strike over reduced pay and benefits. The company is being liquidated now. Those managers are going to get bonuses to close up the company, something that some union members really, really were angry about. All right. Is the cherished mortgage interest deduction on the table in fiscal cliff budget negotiations? The president wants to raise $1.6 trillion in new revenue. That will come from higher taxes on the rich and from closing loopholes in deductions.

According to the most IRS data, 41 million people claimed the house mortgage interest deduction on their 2010 taxes. Who benefits from it most? Well, for households earning 250 grand a year, the tax saving average is about $5,500. For those families making less than 40 grand, they are getting $91 in tax savings.

So, what will happen to America's favorite tax break? That's the big question in this fiscal cliff talks. We'll have to see how much is on the table.

Now, the Ford Fusion was called green car of the year at this year's L.A. Auto Show, available in four versions, starting at $21,700, expected to get over 100 miles per gallon, equivalent. The judges noted that the automobile's style, its performance and accessible price range are reasons why they really like it -- 100 miles per gallon.

SAMBOLIN: I know, I want one. You were saying and then, oh, I need a new car. So there you have it.

ROMANS: There you go.

SAMBOLIN: All right. Thank you.

OK. So she took the worst of what sandy had to offer and Lady Liberty is still standing. But the superstorm set back her reintroduction to the huddled masses. I went to Liberty Island a month ago to look at the stunning touch up job.

And yesterday, I went back for an exclusive look.


SAMBOLIN (voice-over): One month after Superstorm Sandy's wrath, Lady Liberty stands tall in New York's harbor. But the beacon of light is littered with debris. Bricks ripped up from the ground, a boat washed up on the shore at nearby Ellis Island, all the result of Sandy.

(on camera): So she survived?

DAVE LUCHSINGER, SUPERINTENDENT, STATUE OF LIBERTY: Yes. Standing there, proud and defiant.

SAMBOLIN (voice-over): While the statue itself is intact, the ground suffered enough damage to force the closure of the park to the public indefinitely. The National Park Service is now in the midst of a massive clean up effort in hopes of reopening both parks sometime early next year.

(on camera): How high did the water go? I mean, this is totally --

LUCHSINGER: Probably up here.

SAMBOLIN (voice-over): Before Sandy hit, I visited the Statue of Liberty for the first time. My return yesterday, very different. As we arrived, emergency crews filing in and not tourists. One month after Sandy devastated the area, there is still plenty of work to do.

(on camera): Now that's destroyed, you would say, right?

LUCHSINGER: Yes, pretty much.

SAMBOLIN: That's got to go.

(voice-over): That's one of the main docks to Liberty Island is now floating.

LUCHSINGER: Currently, our carrying capacity on this island is determined by how we can get people off. So, if we lose this dock, we lose one boat load, which means I have to reduce the number of people that come to visit.

SAMBOLIN: The effects of Sandy aren't just structural. Construction workers and ferry employees were laid off this week due to the extended closure of the both islands.

(on camera): So, did everybody lose their jobs?

LUCHSINGER: No. The concessioners I understand have laid off their folks for the time being. But our folks, we just sent to other parks.

SAMBOLIN (voice-over): David Luchsinger is the superintendent of the Statue of Liberty. He can't help but take his work home with him. He actually lives here.

(on camera): How long did you live here?

LUCHSINGER: Three and a half years.

SAMBOLIN: It's just you and your wife?


SAMBOLIN: And did you lose everything?

LUCHSINGER: We lost most everything.

SAMBOLIN (voice-over): The offices next door a stark reminder of Sandy's toll.

(on camera): When you look around and compare it to your home and what you saw, how does it compare?

LUCHSINGER: It's not close. We are on the far corner. We sustained so much more damage.

To me, to have a job that you love, to have a job that you can come to and be so excited about every day, an honor I couldn't begin to describe.

SAMBOLIN (voice-over): But the Statue of Liberty remains a symbol of home and promise of the days ahead.

LUCHSINGER: As sad as it is to see it in the state it is, I know it's going to be better.


ROMANS: Oh, Zoraida, that -- I mean, it's such a symbol of New York. It's such a symbol for America.

SAMBOLIN: For the world, yes.

ROMANS: It was closed for a year to refurbish, opened for one day and the storm hit.

SAMBOLIN: Well, here's the good news. It was $30 million to do that renovation for a year. And t here was no damage sustained to that renovation. So, that's the good news. Lady Liberty is doing very well also.

However, the problem is the infrastructure. So, they lost it because it's underground. S, they have no lights, they have no water, they have no heat. And they are working on that.

The good news -- and I got to tell you, I was very excited about the good news -- is that in their plan to rebuild, it's going to be sustainable. So, they are taking their time. I asked him, do you think you'll be closed for another year? He said, absolutely not. We are going to reopen stronger and it will be before a year. So, that's the plan.

I want to take a shot of Lady Liberty right now, because this is really incredible. The beacon was something a group of volunteers decided they were going to go and make sure that the beacon was still lit, because you know when Superstorm Sandy hit, everybody lost power.

ROMANS: Right.

SAMBOLIN: So, Lady Liberty was down I think for about three days. But you can still see her beacon shining. But the reason everything else is dark is because of the infrastructure.

ROMANS: Usually the island has all these flood lights. And in New York harbor, you can just see Lady Liberty there, 24/7. Now, it's just a beacon. You know, 12 feet of storm surge down in Lower Manhattan, coming up the batter. Think about what that was with Lady Liberty by her lonesome.

SAMBOLIN: So, I'm going to tell you another really neat thing about what happened was that Lady Liberty basically got sandblasted. So, when you have an opportunity to look at her, her green is different on her belly than on the top of her.

ROMANS: Really? SAMBOLIN: Yes, take a look at that. She got sandblasted and cleaned in the process. So, you know, there are some bright spots.

And the people working on this, they are just -- this is their passion, this is their love. And so, they are going to do a great job. It will be open again.

All right. Twenty-seven minutes after the hour. Mom and pop shops all over the country hanging on Washington's every single move.

Coming up: a closer look at the fiscal cliff and how it could affect small businesses.