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ERIN BURNETT OUTFRONT

Obama Warns Syria's President; Boehner Offers Fiscal Cliff Deal; Rice Attacked for Role During Rwandan Genocide

Aired December 3, 2012 - 19:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: OUTFRONT tonight, breaking news. New evidence that Syrian president Bashar al-Assad's regime has started mixing deadly sarin gas. How that changes President Obama's stance on a possible intervention.

The speaker of the House, John Boehner, offered up his own plan to avoid the fiscal cliff today. Does it add up?

And the U.S. ambassador to the United Nations, Susan Rice, comes under fire again. This time, it's over Rwanda.

Let's go OUTFRONT.

Evening, welcome, everybody. I'm Soledad O'Brien and I'm in for Erin Burnett tonight.

OUTFRONT tonight, breaking news. President Obama puts the Syrian president Bashar al-Assad on notice. The president is reacting to new notice that Assad's regime has started mixing with chemicals to make deadly sarin gas, adding to its massive stockpile of chemical weapons.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And today, I want to make it absolutely clear to Assad and those under his command, the world is watching. The use of chemical weapons is and would be totally unacceptable. And if you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable.

(END VIDEO CLIP)

O'BRIEN: Assad is on the edge of President Obama's so-called red line against Syria. The president said the summer that Syria's use or movement of chemical weapons could mean U.S. intervention, so OUTFRONT tonight, Pentagon correspondent, Barbara Starr.

How exactly -- how clear is the evidence, in fact, that they are now moving in a new step in the direction with chemical weapons?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Soledad, what our sources are telling us, it was just over the weekend that the last few days that the intelligence began coming in showing that the Assad regime was mixing agents, mixing chemicals to make the sarin gas. They're not telling us exactly what the evidence is, but what they are saying is they have multiple sources of intelligence.

This is just possibly some satellite imagery, some phone intercepts, maybe even some human sources on the ground giving them this information.

O'BRIEN: So then, at this point, what kind of military action might the United States be considering?

STARR: What do you do about it?

O'BRIEN: Yes

STARR: Right. I mean, when the president of the United States goes out there and makes as strong a statement as he did today --

O'BRIEN: That's a commitment.

STARR: That's a commitment. You have to follow it up. You have to do something. They're going to watch obviously very carefully when they see this move, they have to determine very rapidly what are Assad's intentions. They're not even sure about that right now. Get other countries in the region involved.

Don't forget, Israel lies right over the border. The Israelis may not be so patient and wait to see if the chemical weapons are used.

O'BRIEN: Yes. It's got to make everybody in that area nervous. How deadly is sarin gas?

STARR: Sarin gas, 500 times more lethal than cyanide. Without an antidote -- and certainly there would be none available to the Syrian people -- can kill you in minutes. Paralyze your respiratory system. Nasty, nasty business.

O'BRIEN: Barbara Starr. Thanks, Barbara. Appreciate that.

So those troubling developments out of Syria come as the Secretary of State Hillary Clinton made repeated -- repeated, in fact, the United States' position that it will not tolerate the use of chemical weapons.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: We have made our views very clear. This is a red line for the United States.

(END VIDEO CLIP)

O'BRIEN: So is the United States about to get involved in Syria's 20-month-old conflict?

OUTFRONT tonight, Bob Baer, a former CIA operative and CNN contributor, Peter Brookes was a deputy assistant secretary of state under President George W. Bush.

Nice to have both of you gentlemen with us.

PETER BROOKES, FORMER DEPUTY ASSISTANT SECRETARY OF STATE: Good to be with you.

O'BRIEN: Bob, I'm going to start with you if I can. So at what point do you think the administration actually gets involved? Is what we've seen now, this sense that they're creating weapons, is that enough?

ROBERT BAER, CNN CONTRIBUTOR: It's not enough. I think the fact they're mixing it is highly alarming, of course. If they start deploying this, if they start putting it on artillery shells, if it looks like they're going to really fire this stuff, you know, I don't see any choice but we're going to have to go in. The West is completely -- what I'd also like to say is that with the Alawites, that the minority regime that runs Syria, would they use it? Absolutely.

If they're back is against the wall and they think they're going to go down, they will use sarin, VX, any of these binary gases that would stop the revolt. It would -- they are that desperate. I don't know that they're at that point, but if they do, we really have to think about going in.

O'BRIEN: So, Peter, you've long been critical of how the administration has been handling this. Do you think they should already be intervening?

BROOKES: Well, I think there's a lot more we could have done. I mean this red line which I think is a good idea and also they could be -- they're certainly signaling to the Bashar Assad regime, but it basically says anything before that is OK.

You know, we're 20 months into this. It's almost two years. Forty thousand people dead, so as long as they don't use chemical weapons, it's OK what's going on there. Yes, I'm really concerned about what's going on there. If you believe Syria's important, I think we should have been more activists. I'm not calling for American boots on the ground. But I think there are things that could have been done to try and get at Syria.

This regime is a real problem for us. Its alliance with Iran. Its possession of chemicals -- chemical weapons. Weapons of mass destruction. It's human rights record. Its support of terrorism. You know, this is a regime we'd like to get out of the way, but we don't want to see it replaced with people we don't support either.

O'BRIEN: Well, then what do you --

BROOKES: So I think something should have been done over the last 20 months.

O'BRIEN: OK, so the now and the president has said that moving the weapons in any kind of threatening way would be that red line. If it's not boots on the ground, then what is it? BROOKES: Well, I mean, there are real -- unfortunately, there aren't real good military options, but the president has a lot of options short of that. And that's what I'm wondering. You know, little bit of strategic ambiguity does serve the administration. In other words, if you cross this line, something bad is going to happen to you. But we're not saying what that is.

Doesn't mean it's going to be military intervention. Maybe it's just going back to the U.N. for more sanctions. We're not quite sure exactly. Now, once again, the clarity is important, but at the same time that ambiguity that the president laid out there that something bad is going to happen if you do this may also signal to Assad that he shouldn't do what he's thinking about doing.

The other question I have out there , Soledad, is was -- is the regime thinking about using chemical weapons or did we catch a local commander doing this? And we want to tell the regime that it's possible that one of your local commanders is going to use chemical weapons, so there's a lot of things we still don't know. The reporting's been great, but there's a lot of things we still don't know about this on the outside of the government.

O'BRIEN: So, Peter, let's say the regime were in fact to fall. There have been many people who have said this creates a sort of black hole that could --

BROOKES: Yes.

O'BRIEN: -- have disastrous consequences of its own. I mean, obviously, there have been problems figuring out, like, exactly who the rebels are and who to support. They're not a completely coalesced group. What are the challenges there?

BROOKES: Well, there are a lot of challenges. I mean if you look at what's going on in Libya, you know, the regime fell, the weapons weren't gathered up. The militias haven't disarmed. We saw what happened with Benghazi. You know, Islamists are pouring into Syria. Al Qaeda in Iraq is very active there.

You're right. We could have a real power vacuum. The question is you have to make a decision, where does this fit on your national interest and what sort of resources and risks are you willing to take to have an effect in a place like Syria.

O'BRIEN: And in fact, Bob, is the president backed into a corner? If he said here's the red line and we see everybody marching to the red line, puts him in kind of a tough position, doesn't it?

BAER: Yes, I mean it's -- look, Syria is at the center of the Middle East. If this thing is -- becomes a failed state with gases like sarin, if al Qaeda like groups take it over, it will be a source of instability for the next couple of decades. Something has to be done now. It's late. But this is -- you can't play around with this anymore.

O'BRIEN: Bob Baer and Peter Brookes, thank you, gentlemen. Nice to have you with us this evening.

OUTFRONT next, just 29 days and counting from the fiscal cliff. The speaker of the House, John Boehner, offers up his own plan today. And the White House has already offered up their response.

Then a little bit later, a photo in the Trayvon Martin case has been released in color. We'll show it to you and a new heir to the British throne is on its way. It's a baby bonanza. That's ahead.

(COMMERCIAL BREAK)

O'BRIEN: Our second story OUTFRONT, a decent proposal? After laughing off the president's proposal last week to avoid the fiscal cliff, House Speaker John Boehner today put out his own terms for a deal which he says adds up to $2.2 trillion in savings. Boehner's deal includes $800 billion in savings from tax reform, from closing special interest loopholes and deductions. $600 billion in so-called health savings, which includes changes to Medicare, $300 billion other mandatory savings. $300 billion in further discretionary savings.

The White House swiftly shut it down with a statement, saying this, "Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won't be able to achieve a significant balanced approach to reduce our deficit."

OUTFRONT tonight, Republican Senator Tom Coburn of Oklahoma, a man who's been called one of the keys to reaching a real deal.

It's nice to see you, sir. Thank you for your time this evening. We appreciate it.

SEN. TOM COBURN (R), OKLAHOMA: I'm glad to be with you, Soledad.

O'BRIEN: Thank you. Let's begin with this letter that comes -- is addressed to the president and comes from the majority leader, Boehner. And in this letter, he sort of lays out part of his plan. What do you think of his plan as we've laid out so far and in the specific this letter?

COBURN: Well, I think the first thing that I heard you say is the White House is already reacted negatively to it, which is really concerning to me.

Look, what he offered was what Erskine Bowles offered to the select committee as a compromise between the Democrats and the Republicans. I'm certain that if this is not good enough for the White House, we will go over the fiscal cliff.

O'BRIEN: So --

COBURN: Because this is a compromise on taxes. This is a compromise on mandatory spending and it's a compromise on discretionary spending over what the select committee had debated.

O'BRIEN: OK, let's get to some of the details, if we can. COBURN: And it's very much in the middle.

O'BRIEN: And I should mention that Erskine Bowles has put out a statement himself, and he's says this. "While I'm flattered the speaker would call something 'the Bowles plan,' the approach outline in the letter that Speaker Boehner sent to the president does not represent the Bowles-Simpson plan, nor is it the Bowles plan. In my testimony before the Joint Select Committee on Deficit Reduction, I simply took the midpoint of the public offers put forward during the negotiations to demonstrate where I thought a deal could be reached at the time."

He's very much backing away from Speaker Boehner's letter, but the question I wanted to ask you, sir, is some of the details, and as you know, it's all in --

COBURN: Can we spend one more point on that?

O'BRIEN: Of course.

COBURN: What did he say? That was the midpoint of a compromise from the two. So here's Speaker Boehner who is taking a midpoint on the compromise between the two sides and offered it and it's already flatly rejected?

O'BRIEN: Well, I think what he might be rejecting, sir, if I may --

COBURN: No, I'm not talking about Simpson -- Erskine Bowles. I'm talking about the White House's response to it.

O'BRIEN: Well, let's get to that, too.

COBURN: Erskine Bowles --

O'BRIEN: I think what Erskine Bowles is saying in his statement, that this letter from Speaker Boehner is -- does not represent his theory, number one, but I think the line that the White House is having problems with -- and I believe I found it in page two of the speaker's letter, I'll read it to you if I can.

He says this. "Notably, the new revenue in the Bowles plan," what he's calling the Bowles plan, "would not be achieved through higher taxes, which we continue to oppose and will not agree to in order to protect small businesses and our economy.

Instead, new revenue would be generated through pro-growth tax reform that closes special interest loopholes and deductions while lowering rates."

So I'm going to guess that that is the very line, in fact, that the White House is going to say no deal to, right?

COBURN: So let me understand. If in fact we want $800 billion in new revenues and we could do that through closing loopholes, limiting deductions for the very wealthy in this country and we're going to not have a deal because it's not a rate increase, but rather taking a same amount of money from the same people and we're going to say no to that?

O'BRIEN: Well, there are people who said the math doesn't work out. That closing the loopholes --

(CROSSTALK)

COBURN: Well, I -- but --

O'BRIEN: Doesn't actually get you enough money so --

COBURN: Soledad, I've been studying this for seven years. That's baloney. There's -- it's easy to get $800 billion out of the wealthy in this country by limiting deductions and taking away options that are specifically benefit only the well-off in this country.

O'BRIEN: OK, but --

COBURN: Now all you -- all you have to do is, for example, people making more than $250,000 a year, should we give them a mortgage deduction on their vacation home? Should we? In other words, they won't even consider any of that because it offends too many constituencies. And --

O'BRIEN: Well, you have said, sir, and I'll read you your own words, if I may. You said, "I'm all for the -- the very wealthy paying more taxes."

COBURN: I am.

O'BRIEN: So I'm curious, since you've said that, why the reluctance to just raise the tax rate on the wealthy.

COBURN: Because it destroys growth of the very people who are going to create additional revenues in the future.

O'BRIEN: Then why say you would be all for it?

COBURN: I didn't -- never said, not one time, did I say I was for raising tax rates on the wealthy. I said I was for increasing the taxes that the wealthy pay. How you do it will have a major impact on economic fortunes of this country. And if you take the vast majority of small businessmen who will be hit with an increased tax rate, you're going to markedly decrease the job creation and the capital formation in this country.

O'BRIEN: So let me ask you another question. Because one of the things we've talked about really on both sides, I think it's fair to say, is a lack of details and Secretary Geithner was out trying to defend some of the details in his plan over the weekend. This letter also has very few details.

I'm curious to know exactly what loopholes, what loopholes, what deductions would you kill? I think for a lot of people who worry about the childcare credit or the mortgage deduction would like to know specifically what's on the line and at what rate.

COBURN: Whoa, I put out a report called "Subsidies for the Rich and Famous" about a year ago that listed $30 billion a year we could take from the very wealthy on things that only they get a significant advantage from. So, it's not that we can't do it. It was we can.

What I -- you know, all this jockeying in public, we need real leadership right now. There shouldn't be anything offered in public. What it should be is a president and Speaker Boehner in a room and nobody come out until of the room until this is solved.

Because the long-term were playing gotcha politics and that has nothing to do with the long-term best interest of this country. And what we ought to be is, I'm OK to compromise, even on some of my issues, if in fact we'll solve the problem, but what we have is a game being played for political, for the extreme right wing and the extreme left wing in this country rather than coming together and leading and solving the problem.

O'BRIEN: Thank you, sir. We appreciate your time.

COBURN: You're welcome. Good to see you, Soledad.

O'BRIEN: Thank you. Likewise.

OUTFRONT next, the U.S. ambassador the U.N. Susan Rice comes under fire again. This time, it's over comments she allegedly made during the 1994 Rwanda genocide

And weeks after losing the biggest race of his life, Mitt Romney has found a new job. That's ahead.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back. Our third story OUTFRONT tonight, Ambassador Susan Rice's role in Rwanda. A group of religious leaders have opened a new line of attack on the woman believed to be the leading candidate for secretary of state by questioning Rice's role in the Clinton administration during the 1994 Rwanda genocide.

Pastor Rick Warren tweeted this. "Susan Rice's appalling words when she put election politics ahead of stopping the genocide in Rwanda."

Now before that tweet was deleted Warren linked readers, too, an article by a Rabbi Shmuley Boteach who cites a 2002 article that claims that Rice said this.

"If we use the word genocide and are seen as doing nothing, what will be the effect on the November congressional election?"

Our foreign affairs reporter, Elise Labott, is OUTFRONT tonight.

Elise, does the criticism against Rice add up, do you think?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: I don't think 100 percent, Soledad. Susan Rice was director for U.N. Affairs at the National Security Council at the time of the genocide -- the Rwanda genocide. Now that office dealt more with the United Nations than with Africa, even though the United Nations was dealing with the issue.

At the time, it was a working level staff position. Her first in government. Ambassador Rice could make announcements at that level but wouldn't be involved in making such an important decision about getting involved militarily in Rwanda and President Clinton said he made the decision. It was the greatest mistake of his presidency. And Susan Rice traveled to Rwanda shortly after the genocide and she said that seeing the horrors of Rwanda, the ground littered with hundreds of thousands of bodies, is what actually made her passionate about the issue of preventing genocide in the future.

She realized that this was a wrong decision of the administration. She returned, took a galley, when she became U.N. ambassador, spoke about that experience and there's also a quote from her in this book reference by Rabbi Shmuley in which she swore that if she ever faced a crisis like that again, she would argue for dramatic action and in her words, go down in flames. And --

O'BRIEN: So then why -- why religious leaders, especially these two, speaking out against her? Explain that.

LABOTT: Well, for instance, what -- I spoke with Rabbi Shmuley earlier this morning and he says that this is the guiding principle of religious faith. That any of these people are God's children and so, for the Rwanda genocide, for instance, that would speak to the very heart of everyone is God's children and that every human is -- has indelible value, but at the same time, he was very involved, Rabbi Shmuley, in the Rwanda affair. He traveled to Rwanda, and -- but at the same time, Soledad, he's also a politician.

He just lost a congressional campaign, a Republican campaign, and the Republicans, as you know, are piling on to their concerns about Rice related to the Benghazi issue. Might note that neither Rabbi Shmuley as a citizen nor any of the Republicans raising this raised it during Susan Rice's campaign to be U.S. ambassador to the U.N. She's confirmed by unanimous consent at the time.

O'BRIEN: Elise Labott, for us tonight. Thanks, Elise. Appreciate it.

OUTFRONT tonight, speaker of the House, John Boehner offers up his own plan to avoid the fiscal cliff, the president responds and a new heir to the British throne is on the way. But an unusual condition is keeping the duchess of Cambridge in the hospital. We'll have an update.

(COMMERCIAL BREAK)

O'BRIEN: Hey, welcome back to the second half of OUTFRONT. We start the second half of our show with stories we care about, where we focus on our own reporting from the front lines. Mitt Romney has a new job. The former presidential candidate will join the board of directors at Marriott International. This isn't truly a new job. It's actually his third stint serving on the board. Job doesn't pay as much as Romney's gig at Bain Capital, but not shabby at all. According to the latest filings available, directors at Marriott receive a base pay of $60,000 in 2011, $110,000 in Marriott stock, and $1,300 for every meeting they attend.

We have somewhat new photo of George Zimmerman to show you, the man who's charged with the shooting death of 17-year-old Trayvon Martin. Take a look at this photo George Zimmerman was taken right after the shooting while he was sitting in a police car. You can see his face bloodied, his nose swollen.

We showed you this photo several months ago. But back then, it was a black and white copy. An attorney for the Martin family tells us what they want to see are the x-rays of George Zimmerman's nose which he claims Trayvon Martin broke the night of the shooting.

The head of U.S. Africa Command says al Qaeda in the Islamic Maghreb is al Qaeda's best financed affiliate. We've been telling you about AQIM, they're one of the major groups that have taken over northern Mali.

At an even today, General Carter Ham said AQIM has a lot of money, lots of weapons. That's why international leaders have been working on a plan for military intervention in the region.

Here's what General Ham had to say about that.

(BEGIN VIDEO CLIP)

GEN. CARTER HAM, COMMANDER, U.S. AFRICA COMMAND: If there is to be military intervention, it has to be successful. It cannot be done prematurely.

If there was an undertaking of a military endeavor today, my sense is that from a tactical assessment, it would be unsuccessful and it would set back the conditions even further than they are today.

(END VIDEO CLIP)

O'BRIEN: He also said that negotiations are the best way to deal with the rebels.

Flu season is off to an early start. Officials for the Center for Disease Control and Prevention say this is the earliest regular flu season that they've seen in nearly a decade. They also note that they're seeing a higher than normal number of flu reports in the South. The CDC director, Dr. Thomas Frieden, is urging people to get vaccinated, saying this year's flu vaccine is a good match with the influenza strain that has already been circulating.

And it's been 487 days since the U.S. lost its top credit rating. So, what are we doing to get it back?

Got some good news from automakers. November was the best month for U.S. auto sales since January 2008.

Our fourth story OUTFRONT: showdown. The House Speaker John Boehner today gave President Obama a taste of his own medicine, putting out his proposal for avoiding the fiscal cliff.

I spoke with Tom Coburn earlier this hour and he said the deal that Boehner's put on the table is the best compromise that's out there. Listen.

(BEGIN VIDEO CLIP)

SEN. TOM COBURN (R), OKLAHOMA: I'm certain that if this is not good enough for the White House, we will go over the fiscal cliff.

(END VIDEO CLIP)

O'BRIEN: If you read though, the Boehner proposal carefully, no tax rate increases, which we know is a nonstarter for the president. So where does that leave us?

John Avlon is here to help us read through the lines of the deal, also crunch some of those numbers as well.

First, we're talking about the $800 billion figure. That's in the letter John Boehner wrote to the president. Break that down for us.

JOHN AVLON, CNN CONTRIBUTOR: That's right.

There is no numbers breaking that down beyond the $800 billion. And this is the problem with this proposal. It's a where's the beef question. Bumper sticker, we have the numbers but no details in this proposal.

Now, Boehner's aides will say, look, that's where the negotiations come in. The devil's in the details. But there's a notable lack of specificity. What they'll say is, look, to achieve these revenue increases by closing deductions and loopholes. In the letter that Boehner sent, he even said they may be able to lower some rates based on comments made previously by Erskine Bowles. But there is no detail. So, we're left to wonder.

Some analysis shows that's possible, but it's really hard to do especially if you lower rates.

O'BRIEN: I think for folks, especially the middle class, they're trying to figure out the math, right?

AVLON: Yes.

O'BREIN: I mean, those deductions and loopholes, do they actually dig into the middle class?

AVLON: That's right, and what the Romney campaign tried to do with a similar style of proposal and in fact, the Democratic group Third Way crunched these numbers as well, saying that if they got a $35,000 cap and excluded charitable deductions, that they might, in fact, be able to reach that $800 billion target. That is however not lowering rates. Keeping them where they are today.

So it gives you a sense that some folks have crunched these numbers, that middle class families could be shielded, but it's tough to reach that. And as you said, this is not dealing with the White House saying, look, we campaigned on this. We want to raise those top rates.

O'BRIEN: Yes, they say nonstarter, which really means it's really not meeting in the middle.

Look at the other parts of this proposal: $600 billion in health saving, which would include changes to Medicare, not specifically laid out; $300 billion and other mandatory savings; $300 billion in further discretionary savings.

What exactly are we talking about there?

AVLON: Again, we have this bumper stick top lines, but left a lot to debate. Now, what aides will say when pressed is, look, we can raise things like the Medicare eligibility age, which the White House has backed as well from 65 to 67. Perhaps means testing in some of those mandatory cuts, discretionary cuts, maybe farm subsidies.

But this is where the give and take will occur. Now, look, Boehner and Obama have met before in the summer of 2011. They put a lot of specifics on paper, which then was walked away from, when Boehner couldn't get backing from his --

O'BRIEN: How close is this to that?

AVLON: Well, it is a broad outline, but there is a lot of negotiation. The sense is, look, even members of the Congress didn't see this in advance. Only the seven members of leaders negotiated this.

So, this was really an opening bid. It is best seen as really a response to pressure, people on the conference saying, where's our plan? You've got to put a plan out there to begin the negotiation.

O'BRIEN: John Avlon, appreciate that. Thank you.

ALVON: Thank you.

O'BRIEN: Deal or no deal then. We're on the edge of our seats, of course. Washington, the fiscal cliff, suspense is killing us, 29 days and counting until our taxes go up and across the board spending cuts will take place and we still don't know actually laying the details. Instead, we're getting lots of mixed messages as to what exactly is going to happen, where things stand.

(BEGIN VIDEO CLIPS)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There has been progress. REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Right now, I would say, we're nowhere.

TIM GEITHNER, TREASURY SECRETARY: I actually think that we're going to get there.

SEN. JOHN CORNYN (R), TEXAS: I'm increasingly pessimistic.

(END VIDEO CLIPS)

O'BRIEN: So, OUTFRONT tonight, two men who have lots of experience dealing with lawmakers. Democratic strategist Paul Begala, former adviser to President Bill Clinton, Republican strategist David Frum, former adviser to President George W. Bush.

Gentlemen, nice to have you both.

David, let's start with you. Defending on who you listen to, it's either going great, or it's not going well at all. They're really optimistic, or they're completely pessimistic, which is it?

DAVID FRUM, CNN CONTRIBUTOR: Well, I feel about this whole process the way as a basketball nonfan, I feel about basketball, which is start it 100-100 and play for five minutes to get it over with.

But I think we also need to take a step back and realize just how lunatic this whole process is. What the United States does not need right now is either spending cuts or tax increases. We have an exceeding slow and weak recovery from the worse economic collapse since the 1930s.

What we should be thinking about is how to get growth. Instead of the mishandling of the debt ceiling deal in the summer of 2011, we have to pretend that we have what is the most urgent thing right now is to balance the budget, to do it immediately and to come up with a 10-year plan and in less than a month, under the most unfavorable conditions possible, using the income tax system, which is the last place we should be looking for revenues.

We should be looking from different kinds of taxes, from taxes on consumption and carbon emissions.

The whole thing is crazy and what we really ought as citizens and consumers of information to be demanding is let us out of this mess. Do not cooperate with the fiscal cliff idea. Rebel against it and say, just extend everything and come back later when the economy is at full employment.

O'BRIEN: So, how do you rebel against the fiscal cliff idea? Paul, if you listen to Boehner and his plan, he sort of says it's Erskine Bowles plan. Erskine Bowles said not my plan. You know, is it possible to rebel against an idea that is marching along, we're on day 29, heading into day 28?

PAUL BEGALA, CNN CONTRIBUTOR: You know, I think -- you know, I get excited when I hear David say things so far outside the box, but this is Washington. I guess it's not a box. It's a beltway here.

And we are this debt mania -- there is a long-term crisis and I think David would agree with that. If you actually go back and read what my old boss Erskine Bowles and his partner Alan Simpson wrote almost two years ago now, they said these things, these cuts in tax increases should be back loaded so that we don't damage the economy. In fact, in the president's proposal, he does have a small, $50 billion infrastructure bank program to try to jump-start some growth in jobs. So I think it's a good idea.

Here's the sticking point -- raising tax rates on the rich. I saw your interview with Senator Coburn, who is committed to debt reduction. He has really put in the time here and I admired his work on this. But even a guy like Senator Coburn who was on the Simpson- Bowles commission and supported its report can't state the obvious.

We're going to -- we need to go back to the Clinton era rates for the most well off Americans. It's not going to kill us. The line freedom of tyranny is not the 35 we pay now and the 39 that the rich will pay as we did under comrade Clinton when America was a communist paradise.

It's just silly now. That's the opening bid. You've got to be for a tax rate increase or we will go over this fiscal cliff.

O'BRIEN: So, then --

FRUM: No, you don't. No, you don't.

You could raise from a carbon tax of $20 a ton, which will deal with -- we are having the biggest record carbon levels. You could raise from a carbon tax of $20 a ton, which is not exorbitant, rising it 4 percent a year over the next 10 years, twice as much as you could from allowing the Bush tax rates to lapse.

Why the income tax system is overburdened in the United States. We use it too much. We should be looking at other taxes. We can't do it in 29 days. Why are we doing it in 29 days?

O'BRIEN: But the president ran on raises taxes, right? And if you look at the polls, we can throw a poll up there -- 60 percent of people support raising taxes on people who make over $250,000 a year. How much of a problem is it, David, if the Republicans -- you know, Tom Coburn said he just does not want to raise that tax number?

FRUM: The president ran on his first term on opposing a health care mandate. He was against that.

Presidents change their minds. And the idea that you would do a revenue measure with an eye to basically doing something punitive, when there are much more important policy goals you can achieve and when it's not going to be good for the economy and when this is a terrible time to do it -- I think cooler heads should prevail, even over a presidential commitment.

O'BRIEN: So then, Paul, what does a compromise look like? And I get it, you're a Democratic strategist. So try to be down the middle on this if you can.

What does it really look like when both sides are giving? Let's take David's proposal about the carbon tax off the table for the moment and let's take a look at taxes and spending. What is an -- what is an agreement that both sides can say, yes, we each gave a little?

BEGALA: The Republicans must agree to higher tax rates on well- off Americans.

O'BRIEN: OK, and the Dems?

BEGALA: But it's all the way to the 39.6 that the president, OK, they have to. That's the ticket for admission because the president won the election and campaigned on that.

The Democrats are going to have to agree -- they'll use euphemisms -- but agree to cutting Medicare and Medicaid. And, by the way, means health care for seniors and poor people and special needs kids. That is not an easy thing to ask anybody to do, let alone the Democratic Party, which really created these programs.

This is going to be awful and gruesome, but we can't even get -- you know, 70 percent or 60 percent I guess in your poll, 60 percent of Americans want to raise taxes on well-off Americans. Seventy percent don't want to cut, or 80 percent, don't want to cut Medicare or Medicaid.

So the hard stuff is coming. This is the easy stuff we can't even get the Republicans to agree to that.

O'BRIEN: Paul Begala and David Frum, we're out of time, guys. Nice to talk to you. As always, I appreciate it.

OUTFRONT next, violent clashes along the Turkey/Syria border. Now, the Russian president, Vladimir Putin, is stepping in.

And the new heir to the British throne is on the way. Our Piers Morgan will explain the fuss. That's coming up next.

(COMMERCIAL BREAK)

O'BRIEN: And we're back with tonight's "Outer Circle," where we reach out to our sources around the world.

As Russia's president made a rare appearance in Turkey today to meet with the country's prime minister, NATO pulled nonessential staff from Syria, clashes continue along the border of those two countries.

Ivan Watson is in Istanbul and I asked him how close the latest Syrian air strikes were to the Turkish border.

(BEGIN VIDEO CLIP)

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT: The Syrian airstrikes hit within site of the Turkish border, killing at least 20 people, opposition activists say, and sending panicked civilians fleeing to the nearby Turkish border, also sending Turkish warplanes into the air, scrambling them in response to these close airstrikes. All of this happening just hours before one of the biggest traditional supporters of the Syrian government, the Russian President Vladimir Putin sat down here in Istanbul for talks with the Turkish prime minister who's been one of the biggest enemies of the Syrian regime.

Both leaders trying to down play their differences, play up their huge trade, but they do disagree on Turkey's request to deploy Patriot missile batteries along the border, the Russians don't want it, and this is supposed to be discussed at NATO headquarters starting on Tuesday.

(END VIDEO CLIP)

O'BRIEN: Ivan Watson.

Let's check in now with John King, he's filling in for Anderson Cooper with a look at what's ahead on "A.C. 360" tonight.

Hey, John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Hello to you, Soledad.

Breaking news ahead on "360". The United Nations now reacting to the story you're also been covering this past hour. Syria may be preparing to unleash chemical weapons on its own people. It sounds unthinkable, but the United States has obtained an intelligence report that the regime have started mixing the ingredients to make sarin gas. We'll have a report from CNN's Arwa Damon, one of the few Western journalists inside that dangerous country.

Also ahead, a CNN exclusive. Bizarre tale of internet security millionaire John McAfee wanted for questioning in Belize of the death of his neighbor. Martin Savidge tracked him down, which is almost as interesting as the interview itself. We'll bring you both.

Also, Soledad, I'm sure it will be the first of nine months of stories about the time, the royal pregnancy -- the royal pregnancy of Kate Middleton. We'll go live to London for that.

It's all ahead at the top of the hour -- Soledad.

O'BRIEN: Yes, nine months and counting. All right. John King -- thanks, John.

Our fifth story OUTFRONT tonight: those rumors of the royal baby. Now true, the palace confirmed that today. After 19 months of marriage, the duchess of Cambridge and her husband, Prince William, are expecting their first child. The announcement came after Catherine was admitted to a London hospital this afternoon. She had acute morning sickness.

Prince William who was at his wife's bed side was seen leaving the King Edward VII Hospital later in the day. And OUTFRONT tonight, Max Foster, who is outside that hospital for us -- Max.

MAX FOSTER, CNN ROYAL CORRESPONDENT: Yes. So a good sign I think that Prince William left the hospital, because it meant he wasn't overly concerned about his wife's condition. But having said that, she's still not 12 weeks pregnant. You normally wouldn't announce a pregnancy until 12 weeks. They were forced into an early announcement because Kate was coming to the hospital here and it would have leaked.

The queen and even Prince Charles weren't even told about the pregnancy until today, not even the British prime minister. So they haven't had time to be terribly concerned, but certainly, it's one of the best hospitals in Britain and we'll wait and see.

She's expected to be in for several days, Soledad. She's getting various treatments, being given nutrients and being told to rest. It's about making sure that she can look out to her body, perhaps eat enough food, if she doesn't feel well to eat, making her strong enough to get through this early stage of the pregnancy.

But she'll be worried that the information is out already. It is very early on in the process.

O'BRIEN: So then what do you think the implications are economically speaking? One has to imagine a little baby royal is going to bring even more visitors, more tourists, more interest all on the royal family.

FOSTER: Well, I'm always amazed -- I have to say, Soledad -- about the story that is the British royals because it's a truly global story and it's a great picture of Kate that it will make magazines pretty much in every country in the world a truly global story.

Certainly, this is going to be a huge boon for the media industry. You'll see a lot of merchandising. You saw, Soledad, over the royal wedding, all this huge amounts of merchandising. I know you were over here for that.

And it's really for Britain a branding story. The royal wedding was one of the biggest media events in history. It did huge favors for the tourism industry. Buckingham Palace remains the most popular tourist destination in London and this plays into that story.

Kate and William are the most popular royals ever and this is the next part in their story. They've had the wedding and then the baby. Some concerns, will she get through it, all plays into a narrative here. It's a big U.K. branding story, U.K. TLC.

O'BRIEN: Only you could spin it as a U.K. branding story, as birth of a baby.

That's Max Foster, who's outside the hospital for us tonight.

So, there have been tweets about the next heir to the throne. They've been coming in from all around the world. Some of them from Piers Morgan himself. Earlier he wrote this, "Hearing rumors that William and Kate are considering Piers as a name for their child. Humbling."

He joins us from Los Angeles tonight.

Piers, what great news, wow. Named after you. That's amazing. You must be so proud.

PIERS MORGAN, HOST, CNN'S "PIERS MORGAN TONIGHT": I'm as surprised as you are, Soledad. Having been the one that started the rumor, I'm not exactly holding my breath there.

O'BRIEN: Oh, yes. Well, one could imagine.

Why do you think everyone around the globe is so interested in the story of the royals? It never really ends. I think a lot of people are rooting for this couple. They really like this healthy, normal, if you can be, marriage.

MORGAN: Look, they're the biggest stars in the world and they really are. I think the wedding cemented Will's and Kate now as the two biggest figures of any type in the whole of the planet Earth. I mean, they replaced really Princess Diana in that respect.

And with that comes enormous media scrutiny. I think the American public loves them because you don't have a royal family here. You have a president who can only last eight years and then they get replaced.

In Britain, the one constant in my life, in my 47 years, like so many others in Britain, has been the royal family. Prime ministers come and go and politicians and footballers and cricketers and whatever you want, but the family that is always there as the bedrock of our society is the royal family. And I think William and Kate have given this whole new energy and dynamism along with the younger royals, Harry, Fergie's girls and so on. And it's just exciting.

I think Max hit the nail on the head. They are an enormous brand, really, in their own right. They bring in billions of pounds every year to the British economy.

And on the global stage, they just stand for something that's very British. They're very well-educated. They're well-spoken. They're charming.

They are great public servants who do great work, which they call public duty for charity and so on. And they stand for kind of quintessential old-fashioned British values.

O'BRIEN: So what does it mean for this baby in the royal hierarchy? Does this mean Prince Harry will never, ever, ever be king and this baby could be king or queen one day?

MORGAN: Well, it doesn't. Actually it's quite complicated at the moment, because the rule has always been in the history of the royal family that the firstborn son, the first boy, would be the heir to the throne. So if an heir had a son, that would be the future king.

But now it's been changed. Parliamentarians in Britain are pushing for a law that would make it legal for the firstborn of Will's and Kate here is a girl, for her to automatically become queen. The complication is, that law hasn't gone through yet. It has to go through before she is born if she's a girl.

Now, I'm guessing that William and Kate probably know the sex of the baby so they probably --

O'BRIEN: You think this early on? Not even 12 weeks, they may not know it. And also, there are many people who say this kind of morning sickness, severe morning sickness, is correlated with twins. So, what happens in the royal hierarchy if it's twins?

MORGAN: That's where it gets really, really good fun, because obviously you could then have a girl and a boy nestling inside the womb and the first one out becomes king or queen. Imagine that race.

I've been involved in sibling rivalries, Soledad, but imagine that. Imagine if you were five seconds ahead of your brother or sister, you got to be the monarch of the British royal family.

O'BRIEN: You know what? I have a set of twins, neither one of them's up to be the monarch of anything and they fight for stuff constantly. So I can't even imagine.

What do you think? I mean, would you imagine Diana's got to be a name, everyone is going to assume that would be one. You already mentioned Piers.

Any other suggestions of names that probably would be up there? I'm sure people are going to be talking about that for the next nine months.

MORGAN: Look, the way that you should think if you're placing a bet is what is the likelihood of a close family relative for whatever particular reason, Diana, her full name is Diana Frances. So, one of those two names I'm sure will figure if she's a girl in the four or five names she's likely to be allocated.

If it's a boy, I would look to history. You know, Britain's not had a King George or King James for quite awhile. We've had quite a few in the past. Similarly with Henry.

What it probably won't be is Edward or Andrew or Charles, because that would be William's dad and uncles. He may feel it's a bit too close to home.

My money would go on a kind of George, possibly, or a Henry or James.

O'BRIEN: Or they could go a whole other direction and go Latina. Go with Soledad. You know? MORGAN: I think that is the least likely thing to happen in the history of the royal family.

O'BRIEN: Really? Less likely than piers? Really? Want to put some money on that?

Piers Morgan for us tonight, nice to see you, Piers.

MORGAN: Listen, wait a minute. I won't let you have the final word on that. Piers is actually a very old-fashioned English name, old English for pizza. There has never been a King Piers.

O'BRIEN: No one's going to name their kid pizza if they're in line for the --

MORGAN: More likely to be King Piers than Queen Soledad, I can tell you.

O'BRIEN: We'll put money on that. We'll see. All right. Piers, thanks.

We got to take a break. We're back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Tomorrow on the show, two of the men at the center of the fiscal cliff negotiations: Republican Representative Tom Cole of Oklahoma and the man behind the anti-tax pledge, Grover Norquist. They'll both be OUTFRONT.

And the new film called "Zero Dark Thirty" sparking controversy. It's based on that raid that killed Osama bin Laden and some charge the Obama administration gave the film's producer certain access. Barbara Starr is going to be with us about that.

Thanks for joining us. "A.C. 360" starts now.