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Republicans Make Counteroffer in Fiscal Cliff Negotiations; Syrian Government Warned by U.S. not to Use Chemical Weapons in Civil War; Interview with Tony Blair

Aired December 4, 2012 - 07:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. Our "Starting Point" this morning: the counteroffer from the GOP. How Republicans want to solve Washington's fiscal cliff dilemma and what the Democrats are saying about it. We'll talk about that and much more with our special guest this morning. The former British prime minister Tony Blair is with us.

Plus, bold claims from Iran. Revolutionary guards showing off what they are claiming to be is a captured American drone. Coming up, we'll tell you why the Pentagon says don't believe it.

ZORAIDA SAMBOLIN, CNN ANCHOR, "EARLY START": And baby makes three at Buckingham Palace. The royal couple, Will and Kate, creating a media frenzy on both sides of the pond with word that they are expecting. We're going to go live to London.

O'BRIEN: A lot to talk about this morning. In addition to Tony Blair, we're talking to Democratic Congressman Xavier Becerra of California, Republican Senator Ron Johnson from the state of Wisconsin, also Pat Houston, Whitney Houston's sister-in-law and manager, and Jeopardy! champion Ken Jennings who has written a new book. It's Tuesday, December 4th, STARTING POINT begins right now.

Welcome everybody, you're watching STARTING POINT. We're very honored this morning to have the former British prime minister Tony Blair with us as our guest. He's going to be weighing in as a number of topics. We're going to talk about the fiscal cliff. We're going to talk about the global economy. We're going to talk about the civil war in Syria. We'll talk about the royal baby coming soon. First we want to get right to Zoraida Sambolin for an update on the day's top stories.

SAMBOLIN: Soledad, the fiscal cliff debacle, with 28 days remaining before drastic tax hikes and spending cuts take effect. A Republican spending plan has been rejected by the White House. Brianna Keilar is live from Washington. What now, Brianna?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, right now it's about the pressure building and the clock kicking, Zoraida, as house Republicans in the White House try to ultimately broker a deal between two very different plans.

House Speaker John Boehner's counteroffer, if you take a look at the headlines from this, $800 billion in what would be savings from tax reform. So that is new tax revenue, but not done by increasing income tax rate on the wealthiest but instead by closing tax loopholes, eliminating tax credits, and also $600 billion in health savings. That's what you'd get from entitlement reform, from reforming Medicare, and doing some cuts there under this plan.

But compare it to the White House plan, very different than what's on the table there -- $1.6 trillion in new taxes. That is two times the amount in the Boehner plan, and also, of course, includes increasing those income tax rates for the wealthy, $400 billion to Medicare and other entitlements, that's $200 billion less than in the speaker's counteroffer and this would force Congress to give up its debt limit vote which is a nonstarter for house Republicans.

The White House saying that Boehner counteroffer is nothing new, that it lacks specifics. But I will tell you, Zoraida, that one House Democratic aid telling CNN that it passed the laugh test. So certainly I guess it could have been worse in some estimations by Democrats.

SAMBOLIN: I suspect some people were laughing. Brianna Keilar live at the White House for us, thank you.

In the next half hour, we'll talk about the prospect for a fiscal cliff deal with California's Democratic Congressman Xavier Becerra.

The rain and flooding are relentless in northern California. Four storms in less than a week left at least one death now attributed to those storms. And more rain is expected today. Let's get right to meteorologist Rob Marciano. He is following it all from the CNN Weather Center in Atlanta. Good morning.

ROB MARCIANO, METEOROLOGIST: Good morning, Zoraida. This is the worst stretch of storms that northern California has seen really in about two years. Another punch today, and then we'll set up for a dry trend. The good news is that it has been dry so the ground, even though we've seen a lot of major flooding, the ground has absorbed a fair amount of it.

Seattle to Portland, we see rain right now, snow at the highest elevations, and the rain will eventually push down into San Francisco and Sacramento later on today. This system is actually messing up the atmosphere and creating a lot of warmth across much of the country. If you live anywhere east of the Rockies, actually anywhere east of the Cascades and Sierras, you're feeling it, temperatures, record breaking yesterday, into the 60s and 70s across parts of the Midwest, 20 and 30 degrees above average. That would be the case again today, and then a little bit of a cool-down as we go through time.

But watching the rain closely across San Francisco as mentioned, somewhat drier for at least California, not so much the pacific northwest, but California will be drier as we get towards the beginning of next week. Zoraida?

SAMBOLIN: All right, Rob Marciano live in Atlanta for us, thank you.

Iran has made a bold claim this morning that it has captured an unmanned U.S. drone. Iranian state television broadcast what it claims is the drone, and says the aircraft was collecting data in Iranian air space. But a U.S. defense official tells CNN that the Navy has accounted for all of its drones, and that whatever Iran claims to have it is not an actively operating American drone.

The head of the CDC warns that all the signs are pointing to a bad flu season this year. CDC director Dr. Thomas Friedan is advising all Americans over the age of 6 months to get vaccinated. He says the flu arrived early this year, but the vaccine is an excellent tool to fight it. Soledad, I did not, and I never do, but I may this year.

O'BRIEN: Really?

SAMBOLIN: I don't.

O'BRIEN: Why not?

SAMBOLIN: Because I get sick every year, so I don't bother.

O'BRIEN: Think about that for a moment. It's so easy.

SAMBOLIN: I got it one year and I got sick and so I thought, well --

O'BRIEN: That's very scientific.

SAMBOLIN: I think everybody in my little world, get a flu shot.

O'BRIEN: Listen to them.

Let's talk about Prince William. He's back at a London hospital this morning with his wife Catherine. They are expecting their first child, and Catherine is being treated for symptoms of very severe morning sickness. Britain all abuzz with news of the pregnancy. Richard Quest is live in London this morning. Hey, Richard.

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Good morning to you. Indeed, the prince is now back at the hospital. The duchess is being treated for this very severe form of morning sickness. Depending on the number, this affects one in 50 or two in 50 women. But when it does hit apparently it's very bad. Although it doesn't necessarily pose a threat to the life of the mother or baby, it is considered to be so debilitating that you do go into hospital for this infusion of fluids, which I'm told by experts make things a great deal better.

This is the way the morning papers in the U.K. are reporting the story, just simply a wealth of puns, jokes, and the like. "Kate expectations," says "The Daily Sun." "The Mirror," "Pregnant Kate in Hospital for Days." And the "Daily Mail" has it has "A Nation's Joy, a Husband's Nerves." So whichever way you cut this, Kate, everybody seems to be delighted. I mean there's just -- there's just tons of tons of papers by the yard.

O'BRIEN: Can I go out on a limb and say it's just the beginning. You have nine months, and then the kid is born, and you have years of the same exact thing. Richard Quest for us this morning, thanks, Richard, appreciate it. We've heard from Brianna Keilar just a few moments ago, both the White House and congressional Republicans have laid their plans on the table to deal with a looming fiscal cliff which is now 28 days away. Both proposals have been flat-out rejected by the other side. Former British prime minister Tony Blair is with me this morning to talk a little bit about what the standstill means not just for the United States, but really, the international community, as well. It's nice to have you, sir.


O'BRIEN: We know here in the United States as we talk about this step toward the fiscal cliff, unemployment, 9.1 percent, millions of people would lose their jobs, the country would go back into a recession. What are the global implications, if, in fact, we do go over the fiscal cliff?

BLAIR: Very bad if it happens. So everyone hopes it doesn't. I mean I think right now you would expect people to be flatly rejecting the other side's proposal. I mean, there's going to be --

O'BRIEN: With 29 days?

BLAIR: Yes, but it's going to be a really tough negotiation. The expectation, by the way, in the world is that you will sort it out. And if you do, I think the American economy, I would be probably more optimistic about the American economy right now than certainly any part of the rest of the western world. So if you can get this sorted out, you can really move forward.

And therefore, I think now that your elections are out of the way, I'm just speaking as an outsider, now your election is out of the way, there's going to be all this bargaining and positioning, but my expectations, I hope, and the desire of the world, is sort it out, and we can move on, and then sort our own problems out.

O'BRIEN: For those of us in the United States, we see sort of what seems to be two intractable issues. Republicans saying we will not raise taxes on the top two percent of earners. The Democrats say we're certainly not going to have cuts that hurt spending cuts that hurt the middle class. And as the proposals go on the table they seem intractable on it.

BLAIR: They do. But you would expect the Republicans to be more on the tax side and Democrats to be more on the "we're not cutting spending side." This is pretty routine type of argument. The question is, you know, are they so far apart they can't bridge the gap? I think they could bridge the gap. You know, there have been proposals put forward on a cross-party basis before that very nearly resulted, you know, we've just got to hope that after all the tough bargaining, if everyone just came together and said we've got an agreement, then that would be rather unlikely.

So, I mean, I hope it doesn't run on too long because the world really is watching. And the single thing that would give the biggest boost to global confidence right now would be to resolve the fiscal cliff position and then see the American economy, you know, what a fantastic natural advantage is in this huge game change you've got in energy policy with the shale and so on, to see that economy really take its proper place again. And if that happens, I think that will also, by the way, have an impact on say the Eurozone, which is still very, very fragile.

O'BRIEN: A couple of big "ifs" in there. You have written an article, a special to CNN, called "Be bold to escape the economic crisis." That's the headline there. What is the lesson? I mean I think often the big superpowers don't necessarily look to Africa, for example, for good lessons on how to strategize. Many of those countries, those emerging economies are doing, are growing, at a rate faster than the United States, and faster than many others.

BLAIR: Yes, they're moving ahead very fast as economies. But I think for us efficiently, if you take Europe they've got to take some really big decisions now, and as it were, sort out the short-term issues to do with the single currency crisis, and then make the long-term reforms that we're all going to have to make.

I mean, your fiscal cliff -- some of the issues there, around entitlements and welfare and reform, they've got echoes of what we're trying to do in Europe and in the U.K., where, frankly a lot of the systems we've built up in the post-war years, and as a result of technology, as a result of an aging population, you know, as a result of rising costs in health care and elsewhere, you're going to have to make some quite big fundamental changes. So I think the issue is to sort out the short-term problem and then get going on those long-term reforms that will allow us to start being competitive again and taking our places as strongly growing economies.

O'BRIEN: We're going to have to ask British Prime Minister Blair to stick around for just a few moments. We want to get your take on Syria. The president has a very stern warning for President Assad about using chemical weapons on his own people. We'll discuss the latest on that.

Plus, of course, the royal baby, the royal baby in the rule womb of the royal soon-to-be princess one day. We're back in just a moment, stay with us.


O'BRIEN: Welcome back, everybody. We're talking with former British prime minister Tony Blair. He's also a representative with the quartet on the Middle East. It's nice to have you with us.

Let's talk a little bit about Syria. Hillary Clinton had a statement out yesterday. She's in the Czech Republic, and she said this, "I'm not going to telegraph in any specifics what we would do in the event there's credible evidence that the Assad regime has resorted to using chemical weapons against their own people, but suffice it to say we are certainly planning to take action if that eventuality were to occur." First of all, what do you think that means, specifically? And, and what should it mean? BLAIR: I think it means that it's a red line for Americans and the world. If that were to happen then I would expect some form of very tough military response.

O'BRIEN: Which would be what?

BLAIR: I think it would be unlikely to speculate and specify right now and that's why she's being cautious in what she said. But up to now what the west has been doing is giving some political support to the Syrian opposition, obviously trying to resolve the situation as far as is possible, and it's not been possible so far.

O'BRIEN: And every day 100 people die or more.

BLAIR: There are a lot of people dying. Now the death toll probably would be around 40,000 since this began. That's a large number of people. But if there were any sense at all that Assad was going to use chemical weapons or did use chemical weapons against his own people, I would expect a very tough response that would be military.

O'BRIEN: Do you know him? I mean is he the kind of person who, in fact, would, I mean, the foreign ministry in Syria says we confirmed we would never use under any circumstances chemical weapons against its own people, if such weapons exist. There's evidence the weapons do exist. Would he, in fact, do you think?

BLAIR: Look, I do know him, but I don't know the answer to that question, except that you've got to take into account that he is content to have a situation which, as I say, almost 40,000 people have died so far. They're dying every day. And they're dying, by the way, this is why large numbers of civilians are dying, essentially the Assad forces can no longer really combat Syrian opposition hand-to- hand on the ground. So what they're doing is they're just, you know, using their superior air power and fire power just to, you know, wipe out villages and towns. And that means you have an indifference to the loss of civilian life that I'm afraid is not a great character reference for what he might do.

Now, he's got to understand that the consequences of going that step further and using chemical weapons would, as Hillary Clinton has made clear and president Obama made clear that would invoke a completely different response from us. I think, though, we've got to be looking for ways to try to bring this ghastly conflict to an end.

O'BRIEN: But what, you have said that to Piers Morgan, you said we need to ramp up pressure on Assad and I think there are people in the state department who said we've been trying to do that. What needs to be done?

BLAIR: Well, I think we are. But, I think we've also got to look at ways now that we give support to the Syrian opposition, especially around this notion of how you protect certain parts of the territory for them and really just send a signal to Assad that this will only have one outcome. The important thing here is that is to show that in the end it is a matter of time. It's when and not if. Now, there are also, I think, signs that for Russia and China, I think they would be prepared, possibly, to look at a way you could manage an outcome of this, so that you get some form of agreement that --

O'BRIEN: Provide asylum, we're getting him out --

BLAIR: But I think for the rest of the world, such are the consequences of this disintegration are happening, most people look at any reason to get him out, to get a new form of democratic constitution in, and then try and stabilize the situation.

O'BRIEN: I'm going to make a very sharp turn to talk about something much more joyful, which is the news of the oil baby, whose birth is impending. We know that Catherine is in the hospital now. What is the -- what's it like in, in London, in Great Britain, with this kind of news? People must just be going insane.

BLAIR: Well, you know, Britain loves the royal family. So, and people are very happy, very joyful. They're a very popular young couple, and this is great news for them. And you know, also, really actually, when the economy is a little tough, and when times are a little tough, this is news that cheers everyone up.

O'BRIEN: It's nice to be able to talk about the royal bun in the royal oven as opposed to talking about the fiscal cliff, for example. British Prime Minister Tony Blair. It's nice to have you with us this morning. We certainly appreciate your time.

BLAIR: Thank you.

O'BRIEN: Still ahead on STARTING POINT this morning, more fallout over the failed fast and furious operation that cost a federal agent his life. We'll tell you who in Washington now out of a job because of that. And our STARTING POINT team is heading in to talk about that and much more. You're watching STARTING POINT and we're back in just a moment.


SAMBOLIN: It is 22 minutes past the hour. Welcome back to STARTING POINT. Attorney General Eric Holder's chief of staff is stepping down. Gary Grindler has been criticized by House Republicans investigating the failed gun-running operation fast and furious. Grindler's office was in charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives which spearheaded the program that allowed hundreds of illegal weapons to fall into the hands of Mexican drug cartels.

Three finalists for the Heisman trophy have been announced. Texas A&M quarterback Johnny Manziel, also known as "Johnny Football," is the clear favorite, Notre Dame linebacker Mantee Teo, and Kansas State Quarterback Colin Klein also competed for college football's highest honor. The award will be presented Saturday, Soledad.

O'BRIEN: It's going to be Johnny football. I love it, I love it. Our team this morning, Ron Brownstein is CNN's senior political analyst, editorial director at the "National Journal," Bob Shrum is with us, Democratic strategist, Will Cain is a CNN contributor and columnist for Z's sticking around as well.

Let's talk a little bit about fiscal cliff. Depending on who you believe it's going fine, or it's going terribly and we're never, ever going to have any kind of agreement, we're going to go right over the cliff, especially now that the Republicans have but up their counterproposal. What do you think, or is it kabuki theater?

RON BROWNSTEIN, CNN CONTRIBUTOR: I think it's kabuki theater. I think the Republican proposal is a serious proposal. It's not where the deal is going to end. There has been an election. But it does reprise a lot of the arguments from the negotiations between the president and John Boehner in the summer of 2011. It's not something that really should be laughed off the page. I mean, the most difficult thing for Republicans is accepting an increase in the top rate for the top earners in the tax rate, which they don't want to do in this proposal, but which they don't ever have to vote for in order to have it happen. I think somehow that will be a key element.

O'BRIEN: Is it a bad thing that the White House immediately dismissed -- I mean it couldn't have been three hours, four hours maybe?

BOB SHRUM, DEMOCRATIC STRATEGIST: I think the president has decided to take a very different approach than he did in 2011. He's not going to put on the table what he thinks the final deal is. He's going to say no, he's going to negotiate it a tough way. The proposal and I hope Ron is right and I kind of thing that in the end, as with TARP in 2008, when everybody rebelled, and then the markets crashed they got to the right place, I think that we'll probably -- we will get a deal. But, this proposal, fundamentally, is an awful lot like what Mitt Romney was talking about during the campaign. The deductions, for example, if we're going to get the $800 billion from, you can't -- they don't add up. You can't get there with those deductions.

WILL CAIN, CNN CONTRIBUTOR: But it's also a lot like Erskine Bowles proposal before the Simpson-Bowles commission, because in other words it came from Bill Clinton's chief of staff. This is where the proposal --


CAIN: Listen, that's a point. That's how extreme this is, Bob. And --

BROWNSTEIN: In terms of -- does not have the rate reductions, does not convert Medicare and does not convert Medicaid to a voucher. It doesn't have the structural changes that are objectionable to the Democrats. There's a lack of specifics here. But if I'm the president I'm thinking they're putting $800 billion on the table in removing deductions and exemptions. I'm going to pocket that and add some of the additional revenue from rates I can get from allowing rates to expire.

O'BRIEN: We're going to be talking to Senator Johnson this morning also Xavier Becerra about the details or lack of details in the two competing plans at this point and how much Bowles is connected or not connected to this plan.

Still ahead this morning on STARTING POINT, a young cancer patient missing from a hospital and her life depends on finding her. We'll tell you what happened when police found her father. That's coming up. You're watching STARTING POINT, and we're back right after this short break.


O'BRIEN: Good morning. Welcome, everybody. You're watching STARTING POINT. Republicans have come out with their version of what a fiscal cliff solution should look like. In just a few moments we're going to get reaction to that proposal from the Democratic congressman Xavier Becerra of California.

Students at one elementary school in Atlanta will be attending class, have to move to a different building though.