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Republicans Offer Budget Proposal; Syria's Chemical Weapons

Aired December 3, 2012 - 15:00   ET

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


BROOKE BALDWIN, CNN ANCHOR: We will have much more with Hala Gorani here on Syria momentarily, but we're at the top of the hour. I'm Brooke Baldwin.

More breaking news here, this time from Capitol Hill, 29 days until the fiscal cliff hits, and we're now hearing it sounds like from Republicans.

Dana Bash, our senior congressional correspondent, live for me right now on Capitol Hill.

Dana, what have you learned?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right, Brooke. We do have breaking news. That is, the House Republicans have sent at this time a letter to the president with what they're calling a bold counterproposal.

We will leave it to others to decide whether or not that is the case. But the speaker himself came in to talk to a group of reporters who were gathered to get some details on this, and the speaker said that he thinks that this is, in his words, a credible offer, one that he hopes the White House takes seriously, and one that the White House responds to quickly.

Now, what is the offer? We have some specifics so we can give our viewers and I'm sure there are people out there watching this very, very closely, because the fiscal cliff is so close. First of all, they claim that what their plan would do would save $2.2 trillion.

The key here, though, is we know that the big divide has been over those Bush era tax rates. The White House wanting to extend -- excuse me -- extend only for the middle class, the Republicans saying all of them, and they're still sticking with that, the Republicans saying they still want to extend all Bush era tax cuts, so right there, we have a -- still have a divide.

But let me keep going on what some of the other proposals are here, $800 billion in savings from what they call tax reform, closing loopholes, changing deductions, things like that, about $600 billion in spending cuts, mandatory and discretionary spending, and also health savings. I call it health savings, $600 billion for that.

That includes Medicare savings. They didn't have a lot of specifics, but certainly reminded us that Republican proposals in the past had been to increase the eligibility age, to means-test Medicare, things like that. And then also something that is a little bit controversial, but certainly has been discussed up here, saving $200 billion to revise the Consumer Price Index. It is technical, but it definitely affects people's lives because it could change the amount of money that Social Security recipients in particular will get every year because it depends on inflation.

So those are some of the keys. The interesting political move here, there are many of them, but one key thing is that this is something that was proposed initially by a Democrat, Erskine Bowles. We know his name because we have heard Bowles/Simpson so often. This is not part of the official Bowles/Simpson plan, but it's something that Erskine Bowles who again was the Democratic chief of staff for the Democratic President Bill Clinton, which is why the Republicans wanted to put this forward, he proposed this back in November of last year.

He testified before a committee here. And he said that this is generally the plan that should go in place. So what these Republicans aides who briefed us on this are saying is they decided not to go ahead and respond to the White House offer, which they brought up here last week and, remember, Republicans said just was not serious. Instead of responding to that with what Republicans have long pushed, for example, the Paul Ryan budget, they decided to go with this, which is in the words of one staffer, a plan that everybody detests.

So they want to start with a framework that nobody likes because that way they each side will maybe be able to give a little bit more. This is definitely a big move, because the Republicans are -- Democrats said the ball was in their court. They obviously agreed. They're sending a proposal back to the president right now.

BALDWIN: Yes. Message received. Let me give you a moment, Dana, to just catch your breath and thank you so much here as we're hearing. Stand by. We're getting now this counterproposal, if you will, from Republicans and as Dana points out, initially it was an idea from a Democrat, from Erskine Bowles who recently actually met with the president. So we now have the plan from the White House.

We now have the counterplan from the Republicans and perhaps in a matter of days they will continue to meet in the middle. But the really big sticking point it sounded like when it comes to your tax and my taxes is the Republicans want to extend the Bush era tax cuts to everyone, not just the middle class, but the top 2 percent.

Let's get reaction on this and keep this conversation going, as we are, again, 29 days away from all of this hitting each and every one of us. The president, he's been getting advice, counsel from some of the country's CEOs in this whole battle over the fiscal cliff.

And Alan Mulally is among the business leaders here who certainly has the president's ear. He's the president and CEO of Ford.

So, welcome, Mr. Mulally. It's nice to have you on. And I promise we will talk about the new Lincoln, that we will call the Lincoln 2.0, in just a second.

But I don't know if you could hear our correspondent there on Capitol Hill. We now have this sort of counterproposal from the Republicans. I know you have, you know, met with the president. What do you make of the sticking point when it comes to the Bush era tax cuts and the fiscal cliff? Who should be paying taxes?

ALAN MULALLY, CEO, FORD MOTOR COMPANY: Well, I wasn't able to hear your previous report, but I sure can tell you from, you know, being with the president recently, that I'm very encouraged by how comprehensive everybody is and how they're trying to work together to address both the revenue side, but also in addition to the spending side.

(CROSSTALK)

BALDWIN: How do you mean -- if I may, how you to mean comprehensive?

MULALLY: Meaning that it has got to cover all the different pieces on both the revenue and on the spending side.

And the other piece about comprehensive to me is the fact it is not just about the fiscal cliff now, but everything in that package needs to address the further development of the business environment that allows economic development to occur. And so I'm very encouraged by that. I think we're going to come together for the good of economic development of our country.

BALDWIN: Let me try to pin you down a little bit more specifically, Alan, because another CEO, Lloyd Blankfein, head of Goldman Sachs, he met with the president. He was part of the group just last week meeting with the president, and he said this: "I think if that's what it took to make the math work, when you look at the entitlement side and when you look at revenue side, I would not preclude that."

How would you feel if, when you hear from the White House that they just want to extend the Bush era tax cuts to the middle class, and tax the top 2 percent, how does that sit with you?

MULALLY: Well, I think the tax cuts and what we do with taxes and whether it's deductions or the tax code, that clearly has got to be one -- be part of the solution.

I think what is encouraging about what you just have shared is the fact that everything is on the table, because clearly our real goal here is to come up with a plan that moves us to reduce the budget deficit and also moves us to reduce the debt. We need to deal both on the revenue side, and there are many vehicles there to use, and we also need to deal with the expense side.

I think it is crafting a solution on both of those that is going to allow us to find a solution.

BALDWIN: It's all on the table and hopefully they will work and sort of meet in the middle and find that compromise.

(CROSSTALK)

MULALLY: Absolutely, because this is the enabler for economic development in the United States. This is absolutely important we do this.

BALDWIN: Right. I want to ask you about that in just a moment.

But let's talk cars. I know you are relaunching the Lincoln...

MULALLY: Please.

BALDWIN: Yes, we will right now. The Lincoln brand, you're making it part of the Lincoln Motor Company. You're buying a Super Bowl ad, and you're even putting Abraham Lincoln in the commercials.

When you look at this new car, I have to be honest, this is not my grandfather's Lincoln.

MULALLY: There you go.

BALDWIN: This is a new Lincoln. Was that sort of the point?

MULALLY: Absolutely.

And it is just -- it is absolutely the main point because, you know, the Lincoln Motor Company has been associated with the Ford Motor Company for over 90 years. And it is known for elegant design, both interior and external, also the enabling technology, the innovation, the surprise and delight, the ride and the feel.

And, of course, in Ford's case, we had purchased Aston Martin and Jaguar and Land Rover and Volvo. So over the recent years, we have invested less in the wonderful Lincoln brand. Well, now we have divested all of those. Our brand promise is not only a complete family of best in class Fords, but also a complete family of luxury vehicles under the Lincoln Motor Company brand.

And the MKZ that you're seeing here today, this is our first one, and we will be revealing four more over the next few years, and the response to this vehicle has been just tremendous.

BALDWIN: What is your favorite part about it? You have to pick one thing. What is the one?

MULALLY: I love -- I love the styling, the external styling. It just looks so good. It is so simple. The inside, simple, easy to use, but the sunroof, a complete -- the largest sunroof ever in a vehicle, is just absolutely smart design.

BALDWIN: Alan Mulally, quickly on China, I know you're going to make a big push to sell Lincolns in China, setting up this sort of all dealers network.

MULALLY: Yes.

BALDWIN: Does China loom larger for you just because of what we have seen economically speaking in Europe and what we're witnessing now with the fiscal cliff?

MULALLY: Well, absolutely, because if you look at the markets worldwide and the economies and the auto industry, nearly a third of the market will be North and South America. About a third will be Europe and Russia and Africa. And about a third of the market will be Asia Pacific.

And in China's case, to your point, China now has replaced the United States as the largest auto market. The Chinese have a tremendous respect for history. They know all about Henry Ford and they know all about Lincoln. So we will be bringing the first Lincoln vehicles to China in 2014.

BALDWIN: Alan Mulally, Ford president and CEO, sir, thank you so much for coming on. We appreciate it.

MULALLY: Thank you.

BALDWIN: Now this.

(BEGIN VIDEOTAPE)

BALDWIN: An infant left without her parents after an NFL player just snaps. And now as a city mourns, sportscaster Bob Costas goes off on gun control. I'm Brooke Baldwin. The news is now.

(voice-over): If Syria's chemical weapons are on the move, who's watching them? And where do they end up?

Plus, as eight more people die in Chicago...

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: We walked through a front door that was wide open. You can see the equipment is here. This was defunded by the program because they couldn't figure out what they had done with the money.

BALDWIN: ... CNN investigates the program getting cash to stop the violence.

And he's on the run. But John McAfee talks to CNN after Martin Savidge goes on this bizarre adventure to try to reach him.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BALDWIN: Big developments today here in Syria. Secretary of State Hillary Clinton again warned Syria against using chemical weapons. The Syrian Foreign Ministry responding just hours later on state TV saying it would not use chemical weapons against its people if it had any.

But now we're hearing Syrian forces have begun combining. They're mixing these chemicals here, a U.S. official telling us a deadly mixture of sarin gas and may be used in weapons to attack rebel and civilian populations.

This announcement as Turkey is sending warplanes into its border with Syria, after the Syrian military bombed a nearby border town. The attack on this rebel stronghold fueling fears that more of Syria's violence will then spill into its neighbor to the north. The opposition says at least 90 people have been killed in fighting there today.

The security concerns prompting the U.N. to announce it's pulling nonessential personnel now out of Syria.

CNN International's Hala Gorani joins me now here.

The news, it is frightening because we have talked about the fear, the White House has talked about the fear of the chemical weapons. But now tell me what we're learning as far as the mixture of these gases is concerned.

HALA GORANI, CNN CORRESPONDENT: Well, the U.S. official who spoke to our Barbara Starr was saying this goes beyond moving around chemicals, but if we have intelligence that Syria is indeed combining chemicals to produce sarin gas, it is a step further from what we thought was going on. So essentially the question is why would you start mixing chemicals if you had absolutely no intention of using it?

So this is making many people nervous, not just the United States, but as you mentioned, Turkey as well, which is asking NATO to deploy Patriot missiles to defend itself from warheads potential loaded with chemical weapons, because conventional bombardment creates certainly its own brand of absolutely horrible destruction and death. But the chemical weapon bombing, potential bombing of areas could be a lot more lethal. Turkey wants to make sure NATO helps it protect itself against a potential chemical attack, and these chemicals could be loaded into artillery shells and when they land, then you have the potential for wide-scale death and destruction.

BALDWIN: When I hear this, it sounds increasingly frightening, it sounds like another step.

And when you hear from -- and I want to get exactly what she said -- Secretary of State Hillary Clinton warning the U.S. was prepared to act if Syria used chemical weapons, if they're using them, so then what -- run through possible scenarios for me?

GORANI: Right. Well, the U.S. always said its red line is the use of chemical weapons. And, of course, you can imagine that people at the State Department and other agencies in Washington are very much looking into whether or not Syria is simply moving stockpiles around, or preparing for some sort of use.

If Syria indeed, which it is saying it's not going to do, uses these weapons out of desperation, because here you have some rebel strongholds like that beleaguered city of Ras al-Ayn near Turkey, that is not bowing to the Syrian regime, despite the fact that it is repeatedly conventionally bombed.

When you reach a level where there is desperation for a regime that feels everything around it is crumbling, then the question is what will it use in order to try in some desperate last-ditch measure to protect itself? That is the concern. The U.S. has always said this is a concern because it is not just within the borders of Syria that it is a problem, but regionally as well.

BALDWIN: So those are multiple concerns. Then you the news today about the defection. Who defected?

GORANI: Well, we don't know that he defected. Here is a man I have spoken to over the last 18-plus months since the beginning of this crisis in Syria.

His name is Jihad Makdissi. I believe we have pictures of him. He is the former Foreign Ministry spokesperson. This would constitute a high-level defection within the sort of higher ranks of the Syrian government.

BALDWIN: Which would be very significant.

GORANI: Which would be very significant. But here is why there is a bit of confusion. A spokesman for the National Coalition has told CNN: We can confirm that Jihad Makdissi left Syria. So we know that.

BALDWIN: OK.

GORANI: Where he's going, we don't know. They don't consider him a defector. There are reports that...

(CROSSTALK)

GORANI: No, but this would be the opposition saying we don't consider him a defector, because, you know, we still think he's somehow aligned the regime.

But we will know soon enough because the reports are that he traveled to London through Beirut. So we don't know. Did he leave via a road from Damascus to Beirut and then take a flight to London? He was in the London Syrian Embassy, so he has some connections there. We're going to see.

But it would be a pretty significant defection if indeed it is one and I think we will know soon enough.

BALDWIN: Hala Gorani, thank you.

GORANI: Sure.

BALDWIN: And this just in. We're hearing what Mitt Romney will be doing in the future. We will tell you about his new gig.

Plus, more on our breaking news from Capitol Hill now getting that counteroffer from Republicans to the White House, their initial starting point plan when it comes to the fiscal cliff.

(COMMERCIAL BREAK)

BALDWIN: Quick update for you on former Republican presidential hopeful Mitt Romney. We are now learning it looks like he's getting back to business. We just got word just last hour that Mitt Romney will be rejoining the board of directors at hotel chain Marriott. He's been on the board two times before, stepping aside to make his runs for Massachusetts governor and for the presidency.

We also got some breaking news, courtesy of our senior congressional correspondent Dana Bash here. We know that the White House, I believe it was last Thursday, presented their initial offering on the solution here to the fiscal cliff. We now know that we're 29 days away before the massive spending cuts and tax increases go into effect automatically the beginning of the year. The White House presented their plan and now just today we're getting news on the side of the Republicans.

Ali Velshi, chief business correspondent, let me bring you in, because the first major difference, and I want you to just -- let's be crystal clear and run through this proposition, the fact that they want to extend the Bush era tax cuts for everybody.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Right, yes, something that some 67 percent of Americans said that they don't agree with, something the White House says is a nonstarter.

However, they have put a proposal forward. I suppose if you're negotiating, Brooke, you don't put first proposal forward which is the one you're going to end up with. This is from House Speaker John Boehner in a two-and-a-half page letter to the president, and it proposes $2.2 trillion in cuts. And let me show you how they get there, $800 billion in tax reform.

That is closing loopholes and credits, $600 billion in health care and Medicare changes, $300 billion in other mandatory savings, $300 billion in discretionary savings. That's things that are not mandatory. These are the big birds and the Amtraks and the mortgage credits, whatever, things like that, and $200 billion in revised requirements for federal programs. That's the CPI. That's the idea that a number of federal programs are tied to inflation.

Now, here's the thing, Brooke. They get to $2.2 trillion. They do not include those tax cuts, as you said. And the good news is there are two proposals now. There are competing proposals so they can try and hash it out. They will not do that in the media.

The bad news is, Brooke, you and me, you and I could have come up with this $2.2. trillion. The issue is not the numbers. We can find $2.2 trillion or $1.6 trillion or whatever you need. It is what's in those cuts, because all the low-hanging fruit is gone. Right? There's no more easy cuts to make. Now it is going to hurt. It is going to be Amtrak or public television or it is going to be the mortgage tax deduction or it's going to be 401(k)s.

So where it is going to -- where the rubber hits the road is when we can say, look, the $30 billion in discretionary savings what savings are those? If they can get down to the fact that they will sit around the table and actually discuss these things, it's not going to end up the way it looks on the screen, it's not going to end up going ahead without tax increases for the rich.

That's for all intents and purposes a done deal at this point. There may be some basis for a framework for discussions. At least they're having -- at least they have got two proposals on the table, Brooke.

BALDWIN: That is the silver lining, I suppose. You make a great point. You don't just walk up to bat, right, ready to give your best possible proposals.

So one side is here, one side is here and hopefully they inch toward the middle. Ali Velshi, thank you very much. Appreciate it.

VELSHI: See you in a few minutes.

BALDWIN: Tens of millions of that dollars poured into Chicago communities specifically to reduce crime as part of this program launched by the state's governor here. So why are the murders on the rise? What happened to those millions of dollars? That is where we sent Drew Griffin, sent him to Chicago on a number of trips here. He's got the troubling findings from a four-month-long investigation. That's next.

(COMMERCIAL BREAK)

BALDWIN: Eight more people were killed in Chicago just over this past weekend, bringing the total number of murders there this year to 484. That is more than the number of coalition troops killed while serving in Afghanistan during the exact same period.

Chicago is in a very real sense a war zone. Two years ago, the governor there, Governor Pat Quinn, launched this ambition anti- violence program. He called it the Neighborhood Recovery Initiative. On paper, sounded like a great idea.

But a CNN investigation has found serious questions about whether this was about crime prevention or politics.

Here is CNN investigative correspondent Drew Griffin.

(BEGIN VIDEOTAPE)

GRIFFIN: Hello? Hello? Anybody here?

(voice-over): This is one of the community organizing groups hired to help reduce violence in Chicago, part of a $54.5 million initiative, Governor Pat Quinn's Neighborhood Recovery Initiative, or NRI, rolled out just before his contentious 2010 election.

This group, called the Woodlawn Organization, got $1.2 million.

(on camera): So this is all that's left of the Woodlawn Organization. We walked through a front door that was wide open. You can see the equipment is here. This was defunded by the program because they couldn't figure out what they had done