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Flu Season Expected to be Bad This Year; Violence Escalating in Egypt; Interview with Rep. Peter Welch; Your Money Segment; Amputees Helping Train Military

Aired December 4, 2012 - 15:30   ET


BROOKE BALDWIN, CNN: I want to bring in our senior medical correspondent, Elizabeth Cohen, because already there are similarities between this current flu season and the one back some 10 years ago.


So, back 10 years ago, as you said, not only was it early, but it was severe. They really saw severe cases especially among the elderly and children.

And this kind of activity this time of year is really quite unusual. Usually we see this level of activity that you were just describing about a month later.

BALDWIN: So, now, I hear all about this and I'm hearing about it and I'm thinking I haven't had my flu shot yet. Is it too late for us?

COHEN: No, it's not too late at all because we haven't seen the worst of it yet. I mean, the flu is probably going to get worse, so get it now.

It takes about two weeks to kick in. It doesn't work automatically, so the sooner that you get it the better.

And this year it seems to be working particularly well. Some years the shot works better than others. This seems to be a good year for the shot.

BALDWIN: Final question, who should be getting this shot?

COHEN: You know what? Anyone over the age of 6 months. Anyone.

And do it not just for yourself, but also for others. When you go visit grandma, you don't want to give her the flu. If someone is taking care of their children, you don't want to give them the flu.

So, do it for yourself and the people you love.

BALDWIN: Elizabeth Cohen, thank you very much.

And, coming up, I'll talk live to a Democrat who says America should go over the fiscal cliff. I will ask him why, next.


President Obama says read my lips. There will be new taxes.

But first, let's look at the money menu today. It's December, it's gift-buying time and, as you just heard, the stuff you're looking to buy could be stuck at sea.

Two of the largest shipping ports in the United States are mostly closed. The strike now in its eighth day affects us all as nearly 40 percent of imports flowing into the country are bottlenecking.

The ports of Los Angeles and Long Beach, California, bring in a lot of hot ticket items that Americans buy over the holidays, including electronics, clothing and furniture.

The National Retail Federation is urging President Obama to step in and end the strike. In a letter to the president, the NRF says, quote, "the shutdown is already having a significant negative economic impact on retailers trying to bring in merchandise for their final push for the holiday sales and will soon have an impact on consumers."

Now, while I agree the strike will affect consumers eventually, we found that most of the stuff you'll purchase in time to give as gifts for the holiday already passed through the ports between August and October.

So, don't worry about Christmas. Worry about next year if this strike goes on.

As I told you yesterday, the Republican counterproposal for heading off the fiscal cliff was a non-starter. President Obama made clear today that it will not be possible to get a deal to avert the fiscal cliff without raising taxes on the wealthy.

Now, the GOP's plan did promise $2.2 trillion in deficit savings over the next decade. That's about half of what the president promises in his plan.

But the GOP plan does it without any tax hikes on the rich and that is not going to fly with Democrats.

Republicans for their part are unhappy that the president's proposal calls for $200 billion more in stimulus spending over the next year.

Here is how that breaks down -- $95 billion to extend the payroll tax cut for one year, $30 billion to extend jobless benefit for one year, $50 billion to spend on roads and bridges and another $25 billion on short-term stuff like a temporary tax deduction for small businesses.

Now, the argument in favor of the president's plan is this could help people still hurting from years of economic trouble, but you know as well as I do, stimulus is almost as bad a word to Republicans as tax hike. Those are two words, actually. Speaking of potential tax hikes, businesses continue to figure out how to operate amidst uncertainty. You can add Oracle to the list of companies moving up their dividend payments to avoid a potential tax hike on dividends next year.

The software giant says it is going to pay out three-quarters worth of dividend payments ahead of schedule, this month, not in 2013. Other companies hoping to spare their shareholders a higher dividend tax include Walmart, Costco, Las Vegas Sands and a bunch of others you see here.

The biggest single beneficiary of Oracle's decision is Larry Ellison, Oracle's CEO. He'll get almost $190 million in dividend payments. He'll owe $29 million of that to Uncle Sam at today's dividend tax rate of just 15 percent. That will be a big savings for him if the dividend tax does double as it may do next year.

The doom and gloom of the fiscal cliff hides an important point about our economy. If we play our cards right, America could be headed for another economic renaissance. Short-term indicators are looking good. Jobs are being created, consumer debt is shrinking. The housing market is making a comeback.

Forget silver linings, housing has been the golden lining around the economic cloud hanging over the country. Mortgage rates are expected to stay low through 2014.

Home affordability is as good as it it's been in generations. That's going to attract buyers who spent the last few years waiting for prices to bottom out and that's going to help millions of homeowners who currently owe more on their homes than the home is worth.

Well, with home prices rising, confidence will return and longer-term prospects also have some real hope in America. We're in the midst of a domestic energy boom that will fuel growth for years to come.

Advances in horizontal drilling and hydraulic fracturing, you've heard it as fracking, have changed the economics of natural gas recovery. That sent prices way down.

Lower natural gas, by the way, means lower electricity prices. Plus America's energy boom is fueling a manufacturing resurgence that is already under way and that can create manufacturing jobs.

But the government's got to play its cards right. First, it has to get its fiscal house in order over the long term. That means Washington needs to work now to avoid the threat of a recession, posed by the fiscal cliff.

Longer term, America needs to complement these potential gains with real investment in upgrading its infrastructure. The U.S. today gets a "D" on the state of its roads, its bridges, its transportation and its communication links. That's from the American Society of Civil Engineers.

Infrastructure investment now might meet an immediate need, but in the longer term, an updated and more efficient infrastructure can help promote prosperity for decades to come.

And, finally, we have been hard on Congress, haven't we? But some congratulations are in order. Congress managed not to finish first in a new poll by Gallup which looked at the least trusted professions in country.

Members of Congress came in second, by the way. The least trusted profession in the country are car sales people. Nurses had the highest honesty rating of all.

I'm Ali Velshi. That's "Your Money." Same time tomorrow.


BALDWIN: Twenty-eight days until higher taxes and punishing federal spending cuts unless Congress and the president act on the so-called fiscal cliff.

On the Senate floor just today, top senate Democrat -- here he was, Harry Reid -- said this Republican counteroffer unveiled just yesterday is a serious proposal. Reid called the offer a non-starter -- this was his word -- but a serious proposal, nonetheless.

In an interview just today with Bloomberg TV, President Obama did not reject the GOP offer outright. Unnamed senior administration officials have called it a step backward, not worthy of a counteroffer.

But, you know, bottom line here, you have these two sides. They appear to be pretty far apart with no new negotiations happening at least not to our knowledge.

So, with me now from Capitol Hill is Representative Peter Welch. He is a Democrat from Vermont. Congressman Welch, good to see you. Thanks for coming on.


BALDWIN: So let me just pose this one to you. You just heard Harry Reid.

Would you agree with Harry Reid the plan offered yesterday by that house speaker is, quote/unquote, "a serious plan?"

WELCH: Well, you know, I don't know the details of it. It is $800 billion supposedly in revenues and it's a lot of Medicare cuts, but they're not specified.

So, the details, obviously, are really, really essential, but, you know, the speaker, I think, does in fact want to reach an agreement.

Objectively he's in a very difficult position. He knows revenues have to go up, but the people he represents in the Republican conference ran for election on the promise of lowering taxes, lowering revenues, not increasing them.

BALDWIN: But let me jump in on that point.

Forgive me, congressman, but here is, at least, what some are calling a compromise from some of these Republicans because this is the Boehner plan and it does go counter to the Republicans, you know, long-held position of not raising revenues through the tax system.

Why is that not a compromise?

WELCH: No, it is.

BALDWIN: You do agree?

WELCH: I do agree with that. And I think that my view of the speaker is being -- he wants to get to yes on this if he possibly can.

What I'm saying is that he has got a huge challenge, much more difficult on his side than on our side because his folks ran to lower taxes, not raise them, and he's going to have to persuade them to raise taxes and that's contrary to what they campaigned on.

Secondly, in order for him to be able to do that, he's going to be pushing for Medicare cuts that will be unacceptable to the president.

And then, third, he's indicated that he will not have the debt ceiling be part of these discussions so that he can use that as leverage to get more cuts down the road.

So, these are the practical challenges that he and the president face in these negotiations and it makes me think that the odds are probably better than 50/50 that what will happen is that we'll postpone action on taxes until the first week of January, when, in fact, there will be a Senate bill on the floor and we can vote to provide tax cuts for 98 percent of the people.

BALDWIN: Is that then the reason? I want to ask you about it. It would be cuts at that point and then, of course, not raising the taxes, but cuts after January 1st.

But, you know, you've said, you made news saying that perhaps that the country needs to go over this fiscal cliff. Why do you say that?

WELCH: Well, it is not -- the preferred action would be for us to get together and reach a deal before January 1st, but I don't think it is going to really be possible, particularly on the Republican side, for the reasons I just mentioned.

Also, I think that it's much more important to get a good durable deal and, if that's on January 5th or January 15th as opposed to December 15th, that's better than a bad deal before the end of the year.

So, time will tell, but I think the cliff is not a cliff. It's a slope.

The most important thing right now, from the president's perspective, is that we get a significant contribution of revenues towards a balanced budget deal. The leverage favors him right now and you're seeing that in these negotiations, but whether they'll be able to close the deal with speaker -- Senator McConnell and Senator Reid and the president remains to be seen.

BALDWIN: But you talk about leverage and I just have to ask. You have said, Congressman, that Democrats have blinked in past negotiations. Do you think the president is a good negotiator?

WELCH: He's doing great on this. You know, everything he's saying and doing is consistent with what he said in the campaign.

You know, what you have now is the president ran on a very explicit platform of having taxes go up on the top 2 percent, above $250,000. He won the election.

Also, the Romney supporters, by better than 50 percent margin and exit polls, supported that policy, so the president knows he's got the American people behind him.

And this is not a debt ceiling situation where we're literally going to default on our debt. We've got this fiscal cliff date, but it is really more of a slope.

So, I am confident that the president is hanging in there because it makes sense for him to do and I think he's really convinced the American people to support him and it is good for the economy.

BALDWIN: OK. Congressman Peter Welch, thank you so much for joining me from the Hill. We'll see, 28 days to go, whether in fact we go over the slope or not.

An up close look at how servicemen and women train for this, the horrors of war. The role amputees are playing to prepare others for life in combat. You don't want to miss this report.


BALDWIN: Roughly 2 million people in the United States are amputees and losing a limb is not only a traumatic experience, it makes finding employment much more difficult.

But as CNN's Poppy Harlow found out, there's a unique opportunity out there, training American men and women in uniform. Just a quick warning for you before we watch this piece, some of the images are tough to look at.


POPPY HARLOW, CNN CORRESPONDENT: On this simulated battlefield, it's hard to determine what's real and what's not.

KIT LAVELL, STRATEGIC OPERATIONS: We call it hyper-realistic.

HARLOW: Kit Lavell served in Vietnam and now runs Strategic Operations, a movie set turned training ground, preparing thousands of U.S. men and women for combat.

LAVELL: Individuals who are going through the training are not expecting to see an amputee, so the shock effect of seeing that happen is priceless.

HARLOW: The action is fake, but the amputees are real. They're actors with a unique perspective on others would consider a disability.

HEATHER MORALES, AMPUTEE ACTOR: It's more of a guilt. I need to share it with people.

HARLOW: You think this is a gift?

MORALES: It is a gift.

HARLOW: Heather Morales lost her right leg to cancer when she was just eight.

Ted and June Distefano both lost their left leg in a tragic accident.

JUNE DISTEFANO, AMPUTEE ACTOR: A car came around the corner too fast and hit us. It's a trauma that's been changed -- that can change other people's lives, as well as my own. It's become an asset.

HARLOW: I went through similar training here recently and it's as real as it gets.

It's preparation that we do as journalists before we go into a hostile environment and, when I was working on these amputee actors, it's what made me really want to tell their story.

TED DISTEFANO, AMPUTEE ACTOR: I've met people that have already gone through the training and gone overseas and come back and they say that the training helped them.

HARLOW: Really?

J. DISTEFANO: Yeah. Those are the best. When they come back and say you made a difference, those are amazing.

HARLOW: Having amputee actors, what does that add to this? What does that mean?

CLARENCE CONNOR, U.S. NAVY: Complete realism because it actually is more realistic and it gives them that firsthand knowledge of what to do in case of a casualty.

HARLOW: Most importantly, it takes away the shock.

AGENT ADAM SANCHEZ, SQUAD LEADER, U.S. NAVY: First, we haven't been there and it makes so much a big difference to actual working with these people to actually simulate what real-life combat.

AGENT JUAN SOLIS, U.S. NAVY: Personally I would say thank you. Because they're putting out for the military personnel the experience we need to save lives.

J. DISTEFANO: You can see it in their eyes that it's really affecting them.

HARLOW: Do they cry?

J. DISTEFANO: Oh, yes.

HARLOW: You've had servicemen and women in training cry seeing you?

J. DISTEFANO: Yes, I have.

HARLOW: Do you cry?

J. DISTEFANO: Absolutely.

HARLOW: For the amputees, what could be traumatic is far from it.

What is it for you?

J. DISTEFANO: It's healing.

HARLOW: And it's personal. Ted served in the navy for 21 years.

T. DISTEFANO: I look at the men and women and some of them are sons and daughters and fathers and mothers.

J. DISTEFANO: That's someone's child that's out there

HARLOW: Heather's husband also served and she'll never forget the day a three-star general approached her.

MORALES: So, he came up to me and he was just -- came up and to me and goes, thank you.


HARLOW: Was that the moment when you realized the purpose of what you were doing?

MORALES: Yeah. That's when I realized this isn't just a regular job.

My goal is to make it someone comes home at night to their families.

J. DISTEFANO: When you go home at night and lay your head on the pillow and you know you have the ability to change someone's life, it's priceless.

HARLOW: A dose of perspective for all of us.


HARLOW: It absolutely is. You know, Brooke, these are amazing individuals and they've overcome the odds.

Heather Morales, the young girl you heard from, the amputee, she was told she couldn't do a lot of things, including probably the training she's doing and also having a baby. She was told when she lost her leg she could never do that.

Well, she's now a proud mother. And June Distefano, the other actor, told me, you know, her proudest moment was when Dr. Jill Biden came and watched the training and thanked her for what they're doing.

So, you know, just perspective for all of us when we think our jobs are tough.

BALDWIN: Amazing, amazing, amazing. And it looks so real. It looks so real.

HARLOW: Yeah, that's the point.

BALDWIN: Poppy Harlow, thank you.


BALDWIN: Thanks for sharing your story with us.

We are getting word that protesters are attacking the political headquarters of the Muslim Brotherhood in Egypt. We'll take you live to Cairo, next.


BALDWIN: Just in to us here at CNN, violent protests are escalating right now in Egypt. Protesters have attacked the political headquarters of the Muslim Brotherhood.

Reza Sayah, let's go to you, live in Cairo. What do you know? What's happening?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Brooke, that happened several hours ago, the political offices of the Muslim Brotherhood attacked in the city of Minya which is south of Cairo and, earlier for a brief time, about an hour, some tense moments outside the presidential palace.

That's when protesters clashed with police. Demonstrators started throwing rocks, debris. They breached a barrier security forces had set up and approached the palace.

The question was, were things going to get ugly? Would they escalate? They didn't. Police retreated. They went inside the palace and things calmed down.

Mostly, a peaceful protest from that moment forth. Just a lot of opposition factions, sounding off, chanting anti-government, anti- president slogans.

They've left that area, but the opposition factions still out here, protesting against the president in Tahrir Square, Brooke.

BALDWIN: We'll keep a close eye on that situation to see if it does escalate.

Reza Sayah, thank you so much, in Egypt for us.

I'm Brooke Baldwin at the CNN World Headquarters in Atlanta. Thanks for being with me.

Let's go to Wolf Blitzer. Your "Situation Room" begins right now.

WOLF BLITZER, ANCHOR, "THE SITUATION ROOM": Brooke, thanks very much.