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Obama's Opening Pitch On Fiscal Cliff; Economy Grew Faster Than Estimated; Another Debt Limit Battle On Horizon; Should U.S. Provide Arms To Syrian Rebels?; Strauss Kahn Reportedly Settles Lawsuit; Out Of Nowhere, The Earth Collapsed; Biden Bulks Up; Powerball Winner Caught On Camera; Missouri Powerball Winner Identified; Los Angeles Auto Show; Bringing Visual Arts To All

Aired November 30, 2012 - 07:30   ET



BROOKE BALDWIN, CNN ANCHOR: Welcome back to STARTING POINT. Soledad is off today on this Friday.

It's called the fiscal split or the fiscal tiff as Christine Romans just did because President Obama's plan to avoid the fiscal cliff is not exactly flying with Republicans.

Thirty two days now count with me 32, tax rates soar, spending cuts automatically kick in and keep in mind there is a date that we're watching also before this, Congress, they break for the holidays in all of 14 days.

JOHN BERMAN, CNN ANCHOR: So to review the president's plan calls for $1.6 trillion in tax hikes, $50 billion in new stimulus spending, and $400 billion in unspecified cuts.

The president for himself he's heading to a manufacturing plant in Pennsylvania today to try to sell that idea. House Speaker John Boehner's reaction was essentially, get serious.

So we want to talk about the numbers behind this, the economics. We're going to bring in Ken Rogoff, he is a professor of Economics and Public Policy at Harvard University.

So, Professor, you heard the specifics of the plan, $1.6 trillion in new taxes, $400 billion in unspecified cuts, $50 billion in new stimulus. How does this sound to you?

KEN ROGOFF, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, HARVARD UNIVERSITY: Well, it certainly sounds like a plan. And I do think we have to see some mix of higher revenues starting now and frankly going on into the future, and some mix of spending cuts.

But at the same time there are things like infrastructure investment that we need. Things like, you know, doing things for the states that are in trouble. So, it's, you know, it's very tax -- it's tactics, obviously, that they're gaming for what they want.

BERMAN: Are you OK with the mix here? I mean, a lot of Republicans are saying the spending cuts are not structural to Medicare. They want to see structural cuts to entitlements here.

ROGOFF: No, clearly entitlement is the big, looming problem. It is a long-term problem every year. It's likely to get worse as we age. Medical care costs go up. That's the big problem.

So it would be nice to start a conversation about entitlements here, to see something, and frankly, even the middle class is going to end up paying more taxes over time.

And I think the Republicans would like to see a conversation at least starting, no entitlements, we can't touch entitlements, that's just absurd. That has to come.

BALDWIN: Obviously Republicans like to point out that it's four times as much revenue as spending cuts in this plan. We'll call it the starting point plan here. Do you think that's fair?

ROGOFF: The starting point plan, I mean, I think any piece of this has to have the wealthy pay more in taxes, there's no doubt about that. That's not the end of the rope. That's just going to be a little piece of clothing things.

But until you do that you can't get to the big part whereas eventually we do need to see the middle class paying more. We need to see entitlements cut. And until people feel it's fair, and they're nowhere near feeling it's fair, that's not going to happen.

BERMAN: I would say to you good luck, sir, if you're going to try to sell a middle-class tax increase to the American people. I don't think that's going --

BALDWIN: The middle-class is already paying higher taxes. If you live in a state, for example, where budget cuts have really hurt you're paying more for the things you usually use. You know, you're paying more for your garbage service.

You're paying more for your property taxes. I mean, the bottom line here is that America can't afford itself the way we're going. The middle class, everyone, will pay more in taxes and everyone will get fewer services. Is that -- that's the only way it's going to happen?

ROGOFF: If we don't have growth magically somehow and not just the kind of growth that a temporary tax cut is going to produce, but organic growth that just makes us boom for 20 years. We don't have that.

Energy is great. We have a lot of good things and there are things that can help us. It's hard to predict. We can product if that doesn't happen, growth of entitlements just gets worse and worse and something has to give.

BALDWIN: So here you are, you know, perched as professor in beautiful Cambridge, Massachusetts --

ROGOFF: It's dark at the moment. BALDWIN: Because of the power outages. Nonetheless you're watching this dance, we were just talking to Congressman Hoyer and he himself said let's get real. There are very real consequences here.

We looked at the GDP revision yesterday, third quarter was better than anticipated. Housing has been up as Christine's reported. So those are all great signs thus far, but if this thing doesn't work out, it's frightening.

ROGOFF: That's exactly right. I mean, it's already hurting the fourth quarter number, and it's going to look worse. Businesses don't know what's going to happen. If you were thinking of doing an investment, why would you do it now until you see what's going to happen?

There seems like so much positioning here that it's awfully tempting to think, you know, let's just push this to the next year, see what happens. And we get into the next year, it starts, and I worry we're going to hit the debt ceiling eventually again. That's the real catastrophe.

BERMAN: There are two questions on the debt ceiling one of the things the president has proposed is taking the debt ceiling discussion away from Congress. Essentially saying that Congress can no longer say you can't raise the debt ceiling. That's something the executives will do.

ROGOFF: It's pretty tempting. I mean, if we are going to be doing this every year or two we can't run our business that way. This is a fight for power between the House and the president. This isn't just this one-time thing over the spending.

And I don't think they're going to give that in but we have to have a different way of doing business. Maybe not automatic, but not where it's automatic that we have a debt ceiling fight every year.

BALDWIN: Not hitting the debt ceiling and having to raise it over and over again. We do it. I mean, we do it. Would you see a day when we're not fighting over spending more money, where we can get it balanced?

ROGOFF: What's sort of irritating from outside is that they pass these bills, all year long. We're going to spend this. We're going to tax this. And then they want at midnight to re-negotiate everything, make every decision all at once. Once in awhile having a crisis, but it looks like it's become regularly built-into the system and that's just no way to do this. We've got to fix that.

BALDWIN: Ken Rogoff, professor of Economics and Policy at Harvard, dark, Cambridge, forgive me. Sir, thank you so much for joining us.

BERMAN: Thank you, great to see you this morning.

Other top stories we're following, should the United States provide arms to Syrian rebels trying to oust the Assad regime? Secretary of State Hillary Clinton says there's no decision yet, but the question is evaluated every day, depending on the changing situation in Syria.

Meanwhile, reports that nearly all access to the Internet in Syria has been cut off. It could be the latest move by the embattled regime against rebel forces, which have successfully used the Internet to keep the outside world informed of the uprising.

BALDWIN: A settlement reportedly has been reached between Dominique Strauss-Kahn and the New York City hotel maid who sued him alleging sexual assault. Details of the agreement have not been made public. The former head of the International Monetary Fund, the IMF, still faces aggravated pimping charges in France for his alleged role in a prostitution ring.

BERMAN: That's a legal term in France, interesting.

BALDWIN: Apparently so.

BERMAN: Out of nowhere, the earth collapsed, a giant sinkhole has developed near Dover, Ohio. That's south of Cleveland, taking a two- lane highway with it. Take a look at this. Luckily, no one's been hurt.

BALDWIN: Joe Biden, bulking up, at Costco of all places. The vice president was on hand for the grand opening of the first mammoth warehouse store in D.C. A visit meant to promote job growth, checked out a watch, kid's books. Perhaps that's a rose for the wife. Left with a flat screen and ate up a couple of free samples. You could take a spin around Costco and it's full.

BERMAN: My kids love the samples. Apparently the vice president does, too.

All right, a big clue to who bought the winning Powerball ticket in Arizona. This may come from surveillance video out of Maryland. People at this gas station say this man in yellow walked in to check his ticket -- watch closely. That's the dance of a winner. Yes, apparently, he freaked out saying, I won. I won. Also the sign, perhaps, he told them he bought the ticket in Arizona.

BALDWIN: Meantime in Missouri, we know that 52-year-old Mark Hill is the lucky guy. He bought his ticket at this Trex Mart store. Jenna Hanchard of KSHB in the home town here of Dearborn, Missouri, population 500.

JENNA HANCHARD, KSHB: John and Brooke, the Missouri lottery is set to officially announce the winners of this multimillion dollar Powerball jackpot. That's going to happen right here at North Platte High School here at 11:00.

This town, Dearborn, Missouri, it's a small town about 500 people. So word definitely travels fast. We're learning that the winners this morning are Cindy and Mark Hill. They have lived in this community for several years.

They have several kids here in this community. In fact they just adopted a daughter. Now, Dearborn, Missouri, is about an hour north of Kansas City. So it's in between Kansas City and Saint Joseph.

Mark Hill, he works at Saint Joe's during the night and his wife actually had a job interview yesterday that she ditched out on understandably because she won the lottery.

And just to put this in perspective for you guys. The town of Dearborn, Missouri, their annual budget is about $800,000 to $900,000. So that means essentially with this money they could pay the town's bills for the next century. That's a lot of money. Reporting here in Dearborn, Missouri, I'm Jenna Hanchard.

BERMAN: They could even rent the town for like 100 years.

BALDWIN: Job interview? No need for that anymore. Still ahead on STARTING POINT, a first glimpse of next year's hot new cars, new electrics, and hybrids, and favorites getting a makeover. We'll take you live to the L.A. Auto Show next.

BERMAN: And the album that changed the music business and made Michael Jackson a superstar. "Thriller" released on this date 30 years ago, of course, the highest selling album ever.


BERMAN: It is our first glimpse of the latest in cars. The Los Angeles Auto Show kicks off today. We're going to see some familiar models like the Toyota Rav-4 and the Ford Fiesta. They get a makeover. There's also a new crop of electric and hybrids. They're going to be highlighted there.

BALDWIN: OK, the Rav-4. Casey Wian is live in Los Angeles for a preview this morning. Casey, take us on a spin around.

CASEY WIAN, CNN CORRESPONDENT: Well, you were talking about that Rav- 4. They're introducing it at the Los Angeles Auto Show, the redesigned Rav-4. I'm standing right here in front of one. You can see it's got slick, new styling.

It's also got a new suspension system that allows the driver when it's in an all-wheel drive version of this car to select what kind of driving they are doing, whether up hills or sharp cornering and adjust the suspension that way.

One of the other things we're seeing a lot at the auto show this year, downloadable apps for your car. This Toyota E-2 System allows you to use your wireless phone connection to download applications in your car.

All this new technology, you might wonder, what about the upcoming fiscal cliff that people are talking about? What about the danger of another recession, an economic slowdown?

Automakers are saying that they are prepared for that because they've got a better mix of cars this time. And they are pushing full bore ahead with new technology. We spoke with Sprint, which is introducing a package to automakers that will actually turn your car into a wireless hot spot enabling passengers to surf the Internet.

Enabling you if your teenager is driving the car to make sure no one is texting while they're driving. They're going full steam ahead. Let's listen to what Sprint had to say.


WAYNE WARD, VP, EMERGING SOLUTIONS/SPRINT: So imagine, if you will, you're driving the family to the summer vacation home, right? Your wife could be paying bills via her laptop or tablet in the front seat. Your kids could be YouTubing or Facebooking in the back seat, downloading a movie off Netflix.

Everyone is happy including the driver not having to stop every 15 minutes to go to the bathroom. The kids are focused on what they want to do so the entire consumer experience in the vehicle is enhanced.


WIAN: And it's not all about practicality, new technology. There's some old favorites that are being updated right here. You see the brand-new convertible VW Beetle. It's been redesigned over the years, this one, new for 2013.

BALDWIN: I like that. I like that Casey Wian. Thank you so much. I can see you in that Rav-4 with the twins.

BERMAN: It's got new suspension.

BALDWIN: Casey, thank you so much. Still ahead here this morning on STARTING POINT, bringing art to urban youth. Why brothers Russell and Danny Simmons are so passionate about the case. They will be here in studio with us next.


BERMAN: It is the hottest, hippest art show in the country. It means I'm not invited and 20 artists will compete in Miami for a chance to show their art in New York. It's all part of a larger organization bringing art to urban youth, run by --

BALDWIN: The man we're about to introduce you to, who co-founded this foundation back in '95 with a bunch of his brothers. Rush Philanthropic Arts Foundation co-founded by Russell and Danny Simmons. Danny will join us in a moment. He is running a little late. So we're thrilled that we have you though. Good morning. It's nice to meet you.

UNIDENTIFIED MALE: It's my pleasure to be here.

BALDWIN: Let's just first talk about the foundation. I mean, it's been a while that this thing has been going -- RUSSELL SIMMONS, AUTHOR, "SUPER RICH": My brothers are Danny Simmons and Joseph Reverend Ron Simmons. They and I got together and started the foundation (inaudible) art education in the city school kids because we saw that the schools -- maybe 15 years now.

We saw that the schools weren't doing a good job. We think the imagination is everything. I mean, the numbers don't mean much if you don't have the creative way to put them to work.

So kids need to exercise their creative muscles. And that's why we founded the foundation and also to serve underserved communities regarding creative artists to give them two galleries to let them show.

BERMAN: In Chelsea and Brooklyn, you have two galleries down there. Do the kids have a chance to link up with the artist downs there?

R. SIMMONS: We have artists that come and mentor and teach in various different subjects, fine art, poetry, whatever it is that allows freedom for children and they need it, you know. Everybody needs it, in fact.

BALDWIN: I was on the foundation website, watching this young woman who is now going off to college who has been with you all for a number of years and she is excited to be in mixed arts or multimedia in college. She was inspired and given this confidence because of this foundation.

R. SIMMONS: Well, the kids range from young people who just need a chance to express themselves and that make them better scholastically in other ways to artists that become great, popular artists, fine artists who are popular, a big star.

There are a number of stars who have come from our foundation because, as I said, emerging artists of color and under-served communities have gotten a chance to show in our galleries and some of them have become quite famous. It's a mixture.

It's something we've been doing, as I told you, for 15 years and something that the more we do it, the more we recognize that our school systems are closing down their art programs, you know. I don't know that they realize that societies need to promote creativity amongst youth if they want to flourish in the future.

BERMAN: Your brother, who is actually walking into the studio right now --

BALDWIN: Here he is.

BERMAN: He is an artist. I'm going to give you a free shot here. What's it like to work with your brother?

R. SIMMONS: It's a pleasure.

BERMAN: Always?

R. SIMMONS: Always. Him being a bit late --

BALDWIN: Danny, have a seat at the table.

DANNY SIMMONS, FOUNDER AND PRESIDENT OF THE RUSH ARTS GALLERY: I can have a seat at this table? I always wanted to have a seat at this table.

BERMAN: We've been talking to your brother, who has been mostly nice.

R. SIMMONS: Soledad is a board member -- not a board member but great supporter. So he was expecting to see Soledad.

D. SIMMONS: I knew they were here.

R. SIMMONS: Did you watch them yesterday?

D. SIMMONS: I watch them every morning.

BERMAN: Thank you for being here.

D. SIMMONS: Thank you.

BERMAN: Tell us about this contest you are running with Bombay Sapphire.

D. SIMMONS: We've been running this since 2010. It's a national contest actually. We canvas nine cities around the country. Each city has a gallery. From that city those people submit and then they are chosen in that city. And then the winners from that city all come back to New York and we have a choosing in New York of the winners. And then all of them go to Art Basil.

BERMAN: What kind of scene is it down there?

D. SIMMONS: God, at Art Basil?

BALDWIN: It's quite the scene, isn't it?

D. SIMMONS: So much art, so many artists. It's amazing. We have a big party where we choose the winner and this year we are going to be filming some films. We added something new this year. We added five films from five cities and I'm one of the filmmakers.

Never made a film before but it's going to be fun. We highlight the artists. We have a big party. There are all these little festivals. You walk from booth to booth. I keep seeing your painting go by as well as one of the artists.

BALDWIN: You're an abstract expressionist.

D. SIMMONS:I don't want to look at myself on camera.

BALDWIN: Just quickly, though, you both grew up -- what was it, your mother painted. Your father wrote poetry. It kind of makes sense. The seeds were sown early on.

D. SIMMONS: Our family is highly creative. My father even wrote lyrics and Russell who understands art and is able to --

R. SIMMONS: Who exploits the art.

D. SIMMONS:I didn't want to say exploits. That's what you say.

BERMAN: That's gracious. That's gracious. Danny, great to have you here. Thank you for coming on and joining us right now. Russell, you're going to stay with us on our panel during the 8:00 hour. A lot to talk about. You got a letter to the president. We'll see you in the next hour.

D. SIMMONS: Thanks for having me on.

BALDWIN: Thanks, gentlemen.

D. SIMMONS: I'll see you in Basil.

BALDWIN: He's ready to go. Kiss on the head. You can hang tight, whatever you want to do.

He is defending Susan Rice as his fellow Republicans hammer away at her, former presidential candidate, Ambassador Jon Huntsman joins us to explain.