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CNN SATURDAY MORNING NEWS

Fiscal Cliff Deadline Looms; Teen Shot In Florida; North Korea Scheduled Rocket Launch; Pro-Morsi Rally In Egypt; Interview with Former Romney Adviser Carlos Gutierrez; Murder Case In Belize Involving Internet Mogul; STEM Immigration Bill; Robot Helping Autistic Children; Suing the Pentagon to Fight in Combat; America's First Dog Makes Christmas Rounds

Aired December 1, 2012 - 08:00   ET

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


RANDI KAYE, CNN ANCHOR: Good morning, everyone. I'm Randi Kaye.

VICTOR BLACKWELL, CNN ANCHOR: And I'm Victor Blackwell. It's 8:00 now on the East Coast, 5:00 out west. Thanks for starting your day with us.

We're starting this hour with the wrangling on Capitol Hill over the fiscal cliff. We're just 31 days until the deadline which could potentially trigger $7 trillion in automatic spending cuts and tax increases. Both Republicans and Democrats are at a standoff. They are each blaming the other side for holding up the process, but Republican Congressman Terry Lee says that by going over the cliff, the president may have an ulterior motive.

(BEGIN VIDEO CLIP)

REP. LEE TERRY (R) OKLAHOMA: Many of us fear that the president's real plan here was to let us go over the cliff and blame the Republicans and that's what we look like we're being set up to do. And then if you go over the cliff, then two months later, a month later, the president can come back with a bill and say, hey, we're going to now since the Republicans let everyone's taxes go up, I'm going to ride in here now and be the -- the knight in shining armor and lower the taxes on the lower two brackets.

(END VIDEO CLIP)

KAYE: It is a case that is sparking painful reminders of Trayvon Martin, another Florida teenager shot to death in an incident that has racial overtones. I'm talking about Jordan Davis. The 17-year-old will be buried today after a disagreement at a Florida gas station ended in his death. Forty-five-year-old Michael Dunn has been charged with murder, but his attorney says comparisons to Trayvon are not accurate, that he acted in self-defense, that his client did. Our George Howell talked with Jordan's father.

(BEGIN VIDEO CLIP)

RON DAVIS, JORDAN DAVIS' FATHER: I believe it was strictly anger. You know, people try to associate that whenever people of color are different from someone else and I believe, still believe to this day, unless the gentleman tells me different, that it was anger that was involved and having the accessibility of the guns.

GEORGE HOWELL, CNN CORRESPONDENT: So your focus is on these guns.

DAVIS: Yes.

HOWELL: Your T-shirt even.

DAVIS: Kill guns, not kids. Kill guns, not kids. So we have to kill these gun laws and allow law enforcement has been trained and they are the only ones I feel that should have guns in public.

(END VIDEO CLIP)

BLACKWELL: Two Pakistani brothers living in Florida are accused of plotting to use a weapon of mass destruction against Americans. They were arrested on Thursday, indicted yesterday. The Federal indictment says the plot started in 2011, but investigators are now being pretty tight-lipped about specifics. They are trying to determine if the two were acting on their own or if they were receiving directions from overseas.

KAYE: And overseas now, North Korea is upping the ante with the U.S. and South Korea. Its state-run media says a rocket carrying a satellite into orbit will lift off within the next two to three weeks. South Korea warns if Pyongyang does go ahead with this, it can expect a strong response. This would be North Korea's second attempt at a rocket launch. The first was the rocket launch it hyped in April. That failed. Both Washington and Seoul suspect the rocket launches are really a cover for ballistic missile tests.

And all week long we have been seeing protests in Egypt, some of which have turned violent and there are more mass demonstrations happening right now. Protesters are holding dueling rallies for and against President Mohamed Morsi, so let's get straight to CNN's Reza Sayah. He's in Cairo for us. He's joining us now by phone. Reza, the Muslim Brotherhood has called for not one, but two million man marches in support of Morsi. What do you know about those?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Randi, we are at one of them and this is a very large gathering. Obviously for more than a week now, we've seen hundreds of thousands of Egyptian protests against President Morsi and the Muslim Brotherhood and now the president's supporters and the brotherhood are saying it is our turn.

Tens of thousands of Egyptians have showed up outside Cairo University where we are to say we support President Morsi and they're saying just like the anti-president protests, we can put on a mass demonstration, too.

Again, this is a large turnout. There are a few thousand women here, but the gathering overwhelmingly men and it's energized, chanting slogans, again, some of the opposition leaders and in support of the president.

Really this turnout puts into focus the conflict here between the opposition factions, the liberals, the moderates, the secularists and the president's supporters, the Islamists, the supporters of the Muslim Brotherhood.

The people here at the Brotherhood demonstration support the president's move. They like the draft of the new constitution. They like that in about 15 days everyone is going to go out, have an opportunity to vote on the constitution and they say this is how democracy should work. However, in Tahrir Square, you have the opposition faction.

Their position is they have been sidelined, squeezed out in the process of the draft of the constitution and they believe the Islamists, the Muslim Brotherhood, President Morsi, they have been sidelined by them and this is a power grab by the Islamists, Randi.

KAYE: And President Morsi, Reza, he's due to receive this new constitution this hour. He has said that he expanded his powers to ensure stability and will back down when the constitution is in place. How likely do you think that is?

SAYAH: Well, he's got momentum behind his position. Essentially he says when he was elected president, he inherited legislative powers because there was no parliament and everyone understood that. He says he's been elected to establish a democratic institution and the parliament and that's what he wants to do and he doesn't want the judiciary that he believes is still filled with old remnants of the Mubarak regime not to impede him. And again, his position is if people don't like the constitution in 15 days they can go vote no.

Now there's going to be a couple of developments potentially in the coming days that can really complicate things. A number of forces (ph) could vote against the constitutionality of his decrees and they could vote to dissolve the panel that wrote the draft to the constitution. If that happens, look for things to get even more complicated -- Randi.

KAYE: Reza Sayah for us, Reza, thank you. Appreciate that.

BLACKWELL: Let's go to Belize now. The central American nation is finding itself at the center of a murder mystery. It's also where Internet mogul John McAfee has now gone into hiding as police there seek to question him in that murder.

Now, in his first sit-down interview, McAfee tells CNN's Martin Savidge about what life has been like on the run.

MARTIN SAVIDGE, CNN CORRESPONDENT: Victor, I have to say it's one of the most bizarre interviews I've ever been a part of and it almost seemed at times like something out of a bad spy movie. There were people that we had to meet and utter the right password to. There were vehicles we jumped into, drove around, then jumped out, switched into another vehicle. There were switchbacks, u-turns, crossing through parking lots.

When we finally got to John McAfee, he's wearing an outlandish disguise, kind of like an old man with a crippled arm, powder in his air to make himself look old and he's walking with a cane.

(BEGIN VIDEO CLIP)

SAVIDGE: When you talk to him, though, this is where the conversation seemed to go from the credible to the crazy and then back to the credible again and I began asking him the questions authorities want to know. Did he have anything to do with the murder of his neighbor? He says no, absolutely not. He doesn't know who did.

I said, why don't you go to the police with that? He says because this is the crazy part, the government is out to get him. It's part of a plot. If they capture him, they will kill him. It's clear that he feels that he's running out of options and the walls are closing in.

How do you see this coming to an end?

JOHN MCAFEE: I don't have a crystal ball. I'm going to continue to fight until something changes.

SAVIDGE: You won't turn yourself in?

MCAFEE: I will not.

SAVIDGE: So it will either be that somehow you get away or the authorities come and get you.

MCAFEE: One of those two or get away doesn't mean leave the country. It means that, number one, they will find the murderer of Mr. Fall (ph). Number two, the people of this country, who are by and large terrified to speak out, will start speaking out and something will change, but I will certainly not turn myself in and I will not quit fighting.

(END VIDEO CLIP)

SAVIDGE: Authorities here in Belize say that any talk that this is a government effort to try to kill him is, well, as crazy as it sounds, that it's not true. This is a democratic nation. It is a nation that has a professional police force and it is only natural when your neighbor shows up dead that authorities would want to talk to you. They make the same request. They would ask that John McAfee turn himself in merely to answer some questions, and that is it. In the mind of John McAfee, that is not it at all. Victor.

BLACKWELL: All right, Martin Savidge and we'll, of course, continue to follow this really bizarre, bizarre story.

KAYE: It's getting more bizarre every day. We have much more ahead this hour for you.

BLACKWELL: Here's a look at what's coming up.

KAYE: Women in war. Only four countries allow women on the battle lines, and now some service women here are suing for that right. Our legal expert weighs in.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think that what we can conclude is that we've got to be better.

(END VIDEO CLIP)

KAYE: An extreme makeover, that's what some Republicans say the party needs after losing the presidency and seats in Congress. All morning we'll look at how the grand old party might be looking for a bold new image.

Talking points. "Two and a Half Men" and turkey chili, just some of the highlights from the week that was.

(COMMERCIAL BREAK)

BLACKWELL: It's been almost a month since the election and Republicans are trying to put their finger on the problem. We've heard a lot of talk from Republicans about what went wrong during the election. Republicans lost in their bid for the White House. They also lost seats in the House and in the Senate. But there seems to be no shortage of ideas on how to fix things, like their image and that's our focus this morning, the future of the Republican Party.

Joining me now is Carlos Gutierrez, former Commerce secretary under George W. Bush and adviser to Mitt Romney.

Secretary Gutierrez, thanks for joining us this morning.

CARLOS GUTIERREZ, FORMER COMMERCE SECRETARY AND ROMNEY ADVISER: Pleasure, thank you.

BLACKWELL: We've heard from Republicans about what needs to change. We're talking immigration and taxes, abortion. They talk about needing to reach out to voters, but I need you to put some meat on that bone for me. What does reaching out mean? Does that mean a softening of a position? Does that mean a changing of position, abandonment? What's there?

GUTIERREZ: Well, it needs to start with articulating a position and, you know, we have been and we need to strengthen our position as the party of individual empowerment, of growth, of prosperity, of individual opportunity, of small business, of less intrusive government, lower taxes, let people keep more of their money so they can continue to grow.

BLACKWELL: So you think the problem is that during the election that the -- the points were not articulated properly? I mean, some would say that they heard the points but just disagree.

GUTIERREZ: There were some things that perhaps aren't consistent with that strategy and one thing that I am very focused on is immigration. We can't be the party of opportunity, growth, prosperity, entrepreneurship, small businesses, upward mobility if we are not the party of immigration and that means that we have to lead immigration. Yesterday, the STEM act passed the House. That was an initiative by Republicans and it will be very interesting to see how Democrats react to that. BLACKWELL: And let's clarify the STEM bill for people who don't know, 55,000 diversity visas now will go to foreign nationals with advanced degrees in science, technology, engineering and math. That's the STEM acronym. Now there are some critics who say that it's a piecemeal approach and that comprehensive is the way to go. What do you think about that?

GUTIERREZ: I think it's a great question and that is the question. We started out with a comprehensive approach. That didn't work the first time. A piecemeal approach is what is being led right now by Republicans. Mario Diaz Balart (ph) and Labrador, Congressman Labrador in the House and what this does, for example, is allow us to increase the number of scientists, mathematicians, PhDs, who come into the country to stay here and work in the U.S. who have studied here instead of kicking them out, have them come in and work for us.

We don't have enough people helping us with innovation, and what's happening is some companies are building R&D centers in Canada because they can't find the people here.

BLACKWELL: I want to go to something that a member of Congress said. Representative Louis Gutierrez, a Democrat and he said if you support this bill, you're saying that one group of immigrants is better than another and one type of educated degree-holding person and that their work is more important to others, harkening back to help wanted but Irish need not apply. I mean, if you pick out those four sections and don't go to people with other professions, then aren't you creating a bit of a deficit in other areas?

GUTIERREZ: Remember, as you -- as you said, and your very good question about piecemeal versus comprehensive, this is a piecemeal approach and as long as we agree on the end game and where we're going, we need, you know, a path to legalization for people who have been here, who don't have a criminal background, who have been working, who have been contributing, who have really been trying to access the American dream and our immigration laws don't allow them to do that.

BLACKWELL: Mr. Secretary --

GUTIERREZ: We also need -- we also need a future vision for immigration. How do we manage immigration in the future? We have 75 categories. We need to change our laws, but the Republican Party needs to be the party of immigration and by the way, the Democrats haven't proven yet that they are the party of immigration. We'll see how they deal with the STEM Act in the Senate.

BLACKWELL: Let's talk about the party of immigration you say the Republicans have to be. What you just articulated, my question is how does that get through a Republican primary? Mitt Romney felt the need to go far right, closer to the far right than even Newt Gingrich when he brought up the term of self-deportation and Newt Gingrich said it was heartless to ask a grandmother who has been here for 25 years and goes to church every Sunday to have to leave the country. Mitt Romney said that the people who are here illegally have to leave and they'll leave on their own. How does someone with your views get to the nomination?

GUTIERREZ: Well, that's a very good question as well. I think we need to start with the party platform. What do we believe in? Who are we and, again, if we are prosperity, growth, individual opportunity, we celebrate success, we want upward mobility. We're not the party of the rich. We want everyone to be rich. That's -- that's the dream of the Republican Party. We cannot achieve that. We can't grow without immigration.

Our population is not growing, as you may have seen recently in an article. We cannot grow without a larger labor force. Immigration is key in countries like Canada, Australia, New Zealand, are doing it so much better than we are. Republicans have to lead it because immigration is about growing the economy.

BLACKWELL: Secretary Gutierrez, we know that you started that new super PAC, Republicans for Immigration Reform. We'll see how these ideas are accepted as we move into 2014 and to 2016. Thank you for speaking with us this morning.

GUTIERREZ: Thank you very much, sir.

BLACKWELL: We got much more on our focus ahead. What about the women? The GOP misses the mark with voters and candidates and we'll check in on that in the 10:00 hour.

KAYE: Israel wants to build more settlements in disputed territory. Plus, how this little robot is making big strides in helping children with learning disabilities.

(COMMERCIAL BREAK)

KAYE: This just in to CNN, as we take a look here at the protests taking place around Egypt today, both in favor and against Mohamed Morsi, the president there. Egypt's constitutional assembly has just handed the new draft constitution over to President Morsi in Cairo. Egypt state TV is reporting this and take a look here again at these live pictures from Giza, Egypt where this is a rally by Morsi supporters. There's also a rally against Egypt's new president in Tahrir Square.

The outcome of this whole thing will be really, really interesting because it will be a reflection of Morsi's government there. Some have said that his push for this new constitution is a power grab that really echoes Egypt's past and Hosni Mubarak so we'll be watching this throughout day and throughout the next couple of weeks when the vote is expected to take place.

Hillary Clinton is urging Israel to reconsider plans to build thousands of new settlement homes. The secretary of State was just in Israel next month, to help bring about its truce with Hamas over Gaza. Her comments follow reports that Israeli Prime Minister Benjamin Netanyahu has authorized the construction of 3,000 new homes. Critics say the move is in retaliation after the Palestinians won a U.N. bid to be recognized as a non-member observer state. Syria may have no working Internet right now, but the fighting is raging on. The country's civil war is focusing right new on Damascus international airport on the outskirts of the capital there. Rebels say they have surrounded it on one side. They are trying to keep the government's war jets grounded and stop its flow of weapons. Syrian state-run TV insists the airport is functioning normally.

BLACKWELL: Mexico will swear in a new president in just a few hours when Enrique Pena Nieto takes the oath. It will mark the return of the ERI party which actually ruled Mexico for most of the past century. Pena Nieto named his new cabinet yesterday, you see him here. He also took control of the armed forces in a traditional midnight ceremony.

KAYE: Teaching children with autism isn't always easy, but help may be on the way from an unexpected place, an iPad app and a green robot named Popchilla. Joe Carter has more in today's "Start Small, Think Big."

(BEGIN VIDEOTAPE)

JOE CARTER, CNN CORRESPONDENT: Children with autism are getting help from a friendly creature.

SEEMA PATEL, CEO, INTERBOTS: Popchilla is a robotic therapy system designed to help children with autism learn and practice skills in a fun way.

CARTER: Like making their bed or brushing their teeth. Students at children's institute of Pittsburgh are testing the system. They can play with Popchilla using an iPad app and interact with the robot in the real world.

STACY PORTER SMITH, CHILDREN'S INSTITUTE THERAPIST: Children with autism, you want to present things in as many formats as possible until you find what really works for that child.

CARTER: Interbot created the system. Originally specializing in entertainment robotics they realized they could help kids with autism by chance.

PATEL: We were at a kids' fair and we had one of our high-end animatronics robots there and these parents came up to us and they explained our son has autism and he never talks to strangers and he rarely talks to us and he's been having a conversation with your robot for 15 minutes. And that's when we realized that there was something interesting going on here. So our hope is that by leveraging technology, we can help them learn daily routines and social interaction skills through play.

CARTER: The app, which can be used on its own, will be available in January. The robot could be released as early as 2014 and the app will control what the robot says and does.

(END VIDEOTAPE)

BLACKWELL: A popular vehicle, a couple of them actually, are being recalled because of a possible engine fire hazard. Plus, in the week that was, why some GOP senators are not letting up just yet on their criticism of U.N. Ambassador Susan Rice.

(COMMERCIAL BREAK)

KAYE: Bottom of the hour now. Welcome back, everyone. I'm Randi Kaye.

BLACKWELL: I'm Victor Blackwell. Thanks for starting your morning with us. Here's a look at some of the stories that we're watching this morning.

KAYE: In Washington, the calendar is coming ever closer to the fiscal cliff. Republicans and Democrats, however, are no closer to a deal. Treasury Secretary Timothy Geithner presented the President's plan to Republicans on Thursday and Senate Minority Leader Mitch McConnell said he literally laughed out loud when hearing the details. The President wants wealthier Americans to pay higher taxes. Republicans say that is a non-starter.

BLACKWELL: And in New Jersey three people are in a hospital, they're in stable condition. A train derailed and it leaked a chemical in the town of Paulsboro. The chemical, vinyl chloride, is highly toxic and flammable. But a state environmental official says a lot of the chemical has dissipated. The derailment is being blamed on a bridge failure. This sent four train cars tumbling into the creek and near the Delaware River.

Ford is issuing a voluntary recall of its 2013 Escape and Fusion models today after reports of engines overheating followed by vehicle fires when the engine is running. No injuries have been report, but if you own one of these models, Ford advises you to contact your deal immediately for alternative transportation which will be provided at no cost. Repair procedures not yet known.

BLACKWELL: And portions of Coastal Washington, Oregon, California, they will all face some sort of flood watch or warning or advisory this weekend. Forecasters say a heavy mix of wind and rain and snow will pummel that region, at least through Sunday. And some areas will be drenched by more than 15 inches of rain. Others will be buried by a foot, maybe up to three feet of snow.

U.S. servicewomen are ready to fight in court so that they can fight and be recognized on the battlefield like men. They are suing the Defense Department over its long-standing policy against women in ground combat. They've all have done tours in Iraq and Afghanistan, two even received their Purple Heart.

Let's bring in our CNN legal contributor Paul Callan. Paul, good morning. Let's talk about this.

It's getting a whole lot of attention. The reality is though, that service women are already facing combat in many instances. They are involved, well involved. This lawsuit is about career growth and leveling the playing field with their male counterparts.

What do you think are the chances of seeing change as a result of this case?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, it's very interesting. You know, the courts have been very reluctant to tamper with the military. You know, if the Pentagon thinks they want men in combat and not women in combat to win wars, the courts are very hesitant to get in and tell the generals how they should be running the battle field.

But on the other hand what we found is that the distinction between combat and non-combat is blurred in places like Afghanistan. You send a woman over there in a non-combat role and you know what? She's in combat all of a sudden when there are attacks because there's no front line. She, however, is not getting paid the same amount of money and she's not getting the same ability to get promotions as the men.

So this lawsuit is saying something different than prior lawsuits, which is basically the roles have been blurred and these women really are in combat and they are not being paid for it. So I think there are some interesting arguments here -- Randi.

KAYE: And this certainly is not the first time, the no women in combat policy has been challenged and come into play. I mean this is -- this is very different, you're saying, but how have the challenges fared in the past?

CALLAN: Well they haven't fared very well in the past and I think number one the reason originally was, you know, that women were considered to be too delicate and tender and feminine to be out fighting with rifles and that was kind of society 20, 30, 40 years ago. Everything is changed now though and weaponry has changed.

I mean, women -- you put a weapon in a woman's hand and she becomes the equal of a physically stronger male. So I think our societal attitudes have changed and I think the attitude even in the military about women has changed. They are flying C-130 jets. They are very, very actively involved.

KAYE: Yes.

CALLAN: In the end though, I don't think they will win this lawsuit, but I do think the military will make this change internally. I think they are -- they are allowing women to advance, and I think you'll see it coming from the generals, not the judges.

KAYE: Yes in terms of the pressure. Let's talk about that because the Pentagon says it won't comment on an ongoing lawsuit. But how much pressure do you think there is on the department to put women in ground wars on the front lines?

CALLAN: Well, I think there's substantial pressure now, and I think that the generals probably are going to respond. You know, the military was the first to eliminate racial discrimination, and they are very pragmatic about building a fighting force that works. And women have proven to be very, very effective warriors.

The one problem they've had though and I've got to tell you, the Marine Corps for instance has been running some of the top females in the Marine Corps through their, one of their though boot camps for officer training. None of the women have been able to pass some of the physical tests and in the end opponents of this, Randi, say, you know the Marine Corps says leave no man behind. You have to drag a man off the battlefield. Can a 135-pound woman drag a 225-pound Marine fully clothed in armor and what not off the battlefield? She can't pass the test and that's what it comes down to in the end I think that a lot of people worry about.

KAYE: Yes, Paul Callan interesting discussion, no doubt. Thank you very much for your time this morning.

CALLAN: Nice being with you, Randi.

KAYE: Thank you.

BLACKWELL: The U.N. Ambassador gets grilled on the Hill. We get a little closer to peeking over that fiscal cliff. And two very lucky Americans -- they got a whole lot richer.

A look back now at the week that was.

(BEGIN VIDEO CLIP)

CAROL COSTELLO, CNN ANCHOR: The fiscal cliff, now just 34 days away.

SEN. HARRY REID (D), NEVADA: We only have a couple weeks to get something done.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Listen, this is not a game.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'll sign this bill as soon as Congress sends it my way.

UNIDENTIFIED FEMALE: Susan Rice faces more backlash.

UNIDENTIFIED FEMALE: I still have many questions that remain unanswered.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There are no unanswered questions.

UNIDENTIFIED FEMALE: Somebody somewhere is waking up filthy stinking rich.

UNIDENTIFIED FEMALE: Lottery mascot doing "Gangnam Style" for us this morning.

BLACKWELL: Money, politics and the mix dominated this week that was. The week centered on a big worry.

OBAMA: This fiscal cliff.

BOEHNER: Fiscal cliff.

UNIDENTIFIED MALE: Fiscal cliff. UNIDENTIFIED FEMALE: We could actually go off the fiscal cliff.

UNIDENTIFIED MALE: We're facing a fiscal Grand Canyon.

BLACKWELL: Ok. So it's a big deal. Question is can these guys strike a deal?

OBAMA: I've got to repeat. I've got a pen.

BLACKWELL: Meantime, damage control for U.N. Ambassador Susan Rice out to smooth things over with this week with Republicans after those Benghazi talking points.

SUSAN RICE, U.S. AMBASSADOR TO U.N.: Extremist elements came to the consulate as this was unfolding.

BLACKWELL: It didn't work, now, their talking points.

SEN. JOHN MCCAIN (R), ARIZONA: We are significantly troubled.

SEN. KELLY AYOTTE (R): I want to say that I'm more troubled today.

BLACKWELL: Democrats shot back.

UNIDENTIFIED MALE: They are not only blaming her for this intelligence report, they are trying to blame her for the actual tragic event.

UNIDENTIFIED MALE: I've seen so much crazy stuff in this house I could write a book.

BLACKWELL: Or make an Internet video.

ANGUS T. JONES, ACTOR: To not be a true God-fearing person and be on a television show like that.

BLACKWELL: That's actor Angus T. Jones, the "Two and a Half Men" star caught slamming his own TV show.

JONES: If you watch "Two and a Half Men," please don't watch "Two and a Half Men." I'm on "Two and a Half Men," and I don't want to be on it.

BLACKWELL: He apologized, but still he may get his wish.

Now to just two men -- these two men, mano-a-mano in the White House Thursday. Former rivals on a private lunch date.

CONAN O'BRIEN, TALK SHOW HOST: There was an awkward moment when Romney looked around and said, so, how much do you want for the place?

BLACKWELL: On the menu, white turkey chili with some southwestern grilled chicken salad.

UNIDENTIFIED MALE: Good luck.

UNIDENTIFIED FEMALE: Thank you very much. BLACKWELL: And all that build-up.

UNIDENTIFIED MALE: These are actually going to be the winners tonight.

UNIDENTIFIED FEMALE: I feel like today is the day.

UNIDENTIFIED MALE: $580 million jackpot for you.

BLACKWELL: Or the big letdown.

UNIDENTIFIED FEMALE: Two winning Powerball tickets were sold in last night's drawing and will split the record winnings.

BLACKWELL: Oh, well, there's always next time.

And that's the week that was.

(END VIDEO CLIP)

KAYE: Well, that fiscal cliff is looming. Still, we'll wade through the differences between the lawmakers and see what sticking points are threatening to stall our economy.

BLACKWELL: But first, last year we introduced our top ten CNN hero Bruno Sirato. He's a West Coast chef, honored to serving free meals to hundreds of kids in southern California.

KAYE: And since then Chef Sirato has taken his generosity to a whole other level. Anderson Cooper has more.

(BEGIN VIDEO CLIP)

BRUNO SIRATO, CNN HERO: Who liked the pasta?

UNIDENTIFIED FEMALE: Me.

ANDERSON COOPER, ANCHOR, CNN'S "ANDERSON COOPER 360" (voice-over): Every night Chef Bruno Sirato serves free meals to 300 motel kids in Anaheim, California. It's work that he was honored for last week as a top ten CNN Hero.

SIRATO: One of the most amazing moments in my life. After the CNN show a lot of people call me, what can we do for you?

COOPER: But it was Bruno who wanted to do more to help families living in area motels.

SIRATO: When I send the kids back to the motel, all of a sudden there's a sad moment because I know where they go back.

UNIDENTIFIED FEMALE: No you guys can all share those markers. Sit right here and color.

COOPER: It's a hard life to escape. Just ask the Gutierrez family who lived in a motel with their five children for more than a year. UNIDENTIFIED FEMALE: This is our living room/bedroom. Me and my husband sleep in here and then the rest of them sleep sardine-style on this bed.

He got laid off. I started working just a month ago. It's really hard for us to save up to get into an actual home.

SIRATO: I came over to say let's pay the first and last month.

COOPER: By providing rent and a deposit Bruno now helps families leave the motel life behind for good. Working with a local non-profit, 22 families have now gotten into a fresh start in a home of their own.

UNIDENTIFIED MALE: What do you think?

UNIDENTIFIED FEMALE: I love it.

UNIDENTIFIED FEMALE: The kids just ran around and explored and found their room.

UNIDENTIFIED MALE: This is yours.

UNIDENTIFIED FEMALE: This is yours.

SIRATO: Congratulations.

UNIDENTIFIED FEMALE: Thank you.

SIRATO: And my heart is very full of joy.

We're putting back people to their own home.

COOPER: And Bruno hopes to move 70 more families by the end of next year. CNN Hero with a new recipe for helping others.

(END VIDEO CLIP)

KAYE: And on Sunday watch the CNN Heroes pre-show special, sharing the spot late at 8:00 p.m. Eastern. The main event, "CNN HEROES, AN ALL- STAR TRIBUTE" airs at 9:00 p.m. Eastern Time. It should be a great show. Be sure to join us here on CNN.

(COMMERCIAL BREAK)

KAYE: Welcome back to CNN SATURDAY MORNING.

Just 31 days until the U.S. goes over the so-called "fiscal cliff", and in Washington it is a standoff between the Democrats and the Republicans, each side arguing it's the other guys holding up the process.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Congress does nothing, every family in America will see their income taxes go automatically go up on January 1st. REP. LEE TERRY (R), OKLAHOMA: Many of us feared the president's real plan here was to let us go over the cliff and blame the Republicans, and that's what we look like we're being set up to do. And then if you go over the cliff, then two months later or a month later the President can come back with a bill and say, hey, we're going to now, since the Republicans let everyone's taxes go up, I'm going to ride in here now and be the knight shining armor and lower taxes on the lower two brackets.

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KAYE: But no matter who's to blame there will be an impact on every American. Whether it's tax increases or cuts to government programs, come January 1st the situation in Washington and in your wallet won't be the same. Here to help us sort it all out is Bloomberg TV anchor Trish Regan.

TRISH REGAN, BLOOMBERG TV ANCHOR: Good morning.

KAYE: So, the President has drawn a line, no tax increases on the wealthy means no deal from the White House. Do you think this is an insurmountable challenge for the Republicans?

REGAN: It's a pretty tough one, Randi. In other words, he won the election and as the former Treasury Secretary Larry Summers told me just this week, he won the election based on this, that there should be higher taxes on the wealthy. So he's really dug in his heels, and he has, as he would say, the public support behind him.

He's taken this message on the campaign trail. He's continuing to speak all around America right now about this very issue. And so unless the Republicans are willing to allow tax rates to go up on the wealthy, it could be very difficult to get a deal done.

KAYE: Yes. It is certainly a campaign-style push going out there with his pen in hand ready to go telling people he's ready to sign it.

But let's take it down to the household level. I mean in, a sense, what do these tax increases mean for families? There's been some confusion about which parts of income will be taxed at a higher level and certainly not all of it, right? So can you just clear that up.

REGAN: No, you're correct. So, for example, Randi, supposed you make $69,000 a year, well, $59,000 of that would actually taxed at 15 percent, so normal, but it's that extra $10,000, that extra $10,000 that would be taxed at 28 percent. So part of your income would be taxed at a higher rate, but let's not forget, even though it may just be part of your income, that's income that you don't have then to spend on other things.

And so when we're talking about an economy that's in a pretty fragile state as this one is right now, if people don't have as much money to spend, that's going to be hurtful. That's going to be hurtful to retail sales, to restaurants, to movie theaters, to everything that keeps this economy going. KAYE: One thing that has also been discussed is taking away the mortgage interest deduction; certainly that's a big bonus of homeownership for a whole lot of folks. Do you think that's a risky move considering how fragile the housing recovery is right now? I mean would that mean possibly that people won't buy homes?

REGAN: It very well could. I mean, it's fascinating, right, Randi? You think about home ownership, the American dream and part of that is the tax incentive that this country offers. Now you can argue whether that's right or wrong. You look at Canada, for example, they haven't quite had the housing debacle mess that we have, and they don't offer that tax deduction.

But nonetheless it's become part of American psychology. If I buy a home, I'm going to get a break on my taxes and so there's an incentive do that. You take that away, and it would be quite monumental.

As for how it would affect the housing industry, you've got a housing industry that's really on shaky ground still. We have seen some recovery. We need that recovery to continue. If you suddenly stripped away the mortgage tax deductions for everyone, I think that would be very, very problematic. What you might likely see is taking that away for the wealthiest of Americans, where they are hopeful that it wouldn't have as big an impact, but taking it away for everyone, that would be tough for the housing industry.

KAYE: Yes. People are just there just bracing to see what gets decided, if anything at all in Washington waiting for this to happen.

REGAN: You're right.

(CROSSTALK)

KAYE: Trish Regan, nice to see you, and thank you so much for joining us this morning.

REGAN: Thanks, Randi.

BLACKWELL: It's a culinary destination across the pond. We'll show you where to eat like a local when you're far from home.

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BLACKWELL: When traveling to other cities and countries the best way to get a real taste of the place is through the local food. CNN iReport has teamed up with "Travel & Leisure Magazine" to create a global list of 100 places to eat like a local.

Here's Nilou Motamed in London with a sample.

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NILOU MOTAMED, CNN CORRESPONDENT: Hi. I'm Nilou Motamed and when London when I want to eat like a local, I head to St. John Bread & Wine. It is the ultimate local experience right in the East End. Paris has its bistros and brasseries and London has St. John's Bread & Wine. This is the place that I come to and automatically feel at home. It kind of reminds me of my neighborhood in Brooklyn.

But one look at the menu and I know that I'm in London. We've got blood cake, lamb's tongue, this whole crab right here, that's amazing.

This is lamb's tongue, kale and anchovy, very classic English. What I love about it is it does what the restaurant does very well which is all about nose-to-tail eating, which is the whole animal.

There's nothing like a whole Cornish crab to tell that you you're in London. I have the tools of the trade. I'm digging in.

Finally, I get dessert. Eccles cake and you know what; whenever you're in the meal, why not have some cheese?

Now that I've shared my favorite place to eat like a local in London, I know you food lovers out there have your favorites, too. Go to cnn.com and post your iReport about your favorite place to eat like a local in your hometown.

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BLACKWELL: All right. Now, your recommendation will help us create a food lovers' map of the world, so send us a photo of your favorite restaurant and the dish and why it's special and how you discovered that place. The definitive list of "100 Places to Eat Like a Local" will be revealed in March and some of the iReports will be on that list. So keep watching to see if you'll be one of them.

KAYE: The White House is getting ready for the Christmas season and no one has a better perspective of the fun and festivities than Bo, the first dog. Wait until you see the video.

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BLACKWELL: This is by far I think our favorite video of the morning.

KAYE: We should just play it for the next two hours.

BLACKWELL: Yes. Let's just --

KAYE: It's just so great.

BLACKWELL: Make it the new Yule log. It's great. Look.

KAYE: No, that is not one of Santa's little elves, that's the first dog Bo who is I guess is maybe the President's little elf. He has got this down. He is checking out the Christmas decorations, making sure that everything is where it needs to be. And he's got good reason to make sure because 90,000 visitors will be checking out the holiday season at the White House.

BLACKWELL: Ah, it's great video.

KAYE: He's just cute.

BLACKWELL: Next hour of CNN SATURDAY MORNING starting right now.