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All Talk In Washington; War Forces Syrian Family Underground; Fire At Muslim Brotherhood Headquarters

Aired December 5, 2012 - 14:00   ET

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


BROOKE BALDWIN, CNN ANCHOR: I'm Brooke Baldwin. Top of the hour here.

We're getting some breaking news out of Egypt. We're going to take you there live. But basically over the last couple of hours, we've been watching some of the clashes that have been taking place. Take a look at some of the pictures.

We have now learned there's a group of masked men, let me be careful, let me qualify this. This is state run TV in Egypt that are reporting these masked men setting fire to the Muslim Brotherhood headquarters. This is in eastern Egypt. We're going to take you there live here momentarily with that.

I want to begin, though, with this political stalemate on the minds of so many of you here. Twenty-seven days until the fiscal cliff. And I know you know that already, but guess what, folks, the deadline for Congress and the White House to act, to stop the tax increase and punishing spending cuts, that deadline is actually coming up quicker than you may realize because did you know Congress plans to end its current session on December 21st? Check your calendar, as we did today. That's two weeks from Friday. That means that under congressional rules any agreement, any legislation to fix this whole mess would have to be filed here by December 28th.

Here's the kicker. The president currently plans to leave town the day before that, on the 17th of this month. So the yearly Obama trip to Hawaii is set to start a week from next Monday. You feel me here? You see where I'm going? The window closing faster than a lot of folks think.

So, what are our decision makers doing right now? Among other things, they are apparently sending signals through the media. Republicans saying time to get moving. The president saying there's a deal to be had fairly quickly if the Republicans come around to raising taxes on the wealthy. Let me give you the president first.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Good faith offer to avert the fiscal crisis. And that offer included significant spending cuts and reforms, and it included additional revenue. And, frankly, it was the balanced approach that the president's been asking for.

Now we need a response from the White House. We can't sit here and negotiate with ourselves. Our targets and framework are things that we can all agree on. And it's exactly how we approached our discussions in the Biden group, my discussions at the White House a year and a half ago, and, for that matter, in the joint select committee. And if the president doesn't agree with our proposal, and our outline, I think he's got an obligation to send one to the Congress.

(END VIDEO CLIP)

BALDWIN: So that was Speaker Boehner obviously flanked by Republicans. We're going to get you that sound bite from the president because I want to make sure you hear both sides.

But here's the question I'm hearing people ask. If we go off the cliff here, how big of a hit will we take on taxes? Stand by because I'm about to give you the closest answer I possibly can.

So to help me with that is Lori Montgomery. She is the fiscal policy reporter for "The Washington Post."

So, Lori, welcome to you here. In your paper this morning, you ran through a couple of tax scenarios, which were pretty palatable, so we wanted to be able to show our view what you guys ran through with, of course, the help from the Tax Policy Center. So let me run through two.

We're going to look at this first one. So everybody take a look at this graphic. This is scenario number one. Married couple, two kids, one in college, combined income of $137,000. You see the numbers here first under the Democrats' plan, passed by the Senate, not by the House, they would see their taxes rise $2,500 -- just about $2,500 a year. Just below that, the Republican plan, passed by the House in August, would raise the couple's taxes by $4,000. And if we go off the cliff, this is this third scenario here, the middle class couple sees their taxes go up by $8,000. Laurie, is the viewers see -- the couple, this couple here, this middle class couple, gets its best deal from the Democrats' plan, correct?

LORI MONTGOMERY, "THE WASHINGTON POST": That's right. I mean most people are going to get a better deal from the Democratic plan if you're under $250,000 because the two -- the Republican and Democratic plans are essentially the same on income, but the Democrats also want to extend some of the tax cuts that were enacted as part of Obama's 2009 stimulus plan. So that's where you get that little bump up for like college tuition and extra child credits and that sort of thing.

BALDWIN: OK. So that was middle class scenario. Just -- I want to show one other scenario. So we have another graphic I want to throw up, and this is pretty much, you know, your upper middle class couple. Combined yearly income, $940,000. Under the Democrats' plan, you see the numbers, taxes going up about $37,000. Much less when you see the Republican plan numbers. About $17,000. And then if we go of the cliff, this couple gets hammered because their taxes go up close to $50,000. Their best deal, Lori Montgomery, coming from the Republicans.

MONTGOMERY: Right, exactly, because the Republicans don't want to raise their rates, where as if we go over the cliff, they lose everything. Everyone loses everything if we go over the cliff. And the Democrats want those folks to lose their income tax rates anyhow. So they get a better deal from the Republicans because the Republicans are saying, no, no, we want to extend the tax cuts for you too.

BALDWIN: OK. And I want to pick up what you said about everyone losing everything, you know, if we go over the cliff because there are some folks, including your own paper, there was a write (ph) this morning saying maybe not. But I want you to stand by for that, because I do want to cue up the president speaking today. Here he is, the president of the United States.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And the numbers actually aren't that far apart. Another way of putting this is, we can probably solve this in about a week. It's not that tough.

(END VIDEO CLIP)

BALDWIN: So that was the president. Lori, let me bring you back in. Because we've been looking at the Dow today and the markets aren't really reacting yet. In fact, the last time I looked, just about half an hour ago, the markets were up about 150 points. You know, some economists say, hey, if we go over this cliff or this spiral or this staircase, whatever you want to call it, not too big of a deal. And when you look at the totals for either family, if we go over the cliff though, the numbers don't lie, do they?

MONTGOMERY: Yes, but here's the thing though that you have to remember.

BALDWIN: Yes.

MONTGOMERY: The only tax that people are going to have to pay right away if we go over the cliff is the alternative minimum tax. That's the only part of this whole mess that actually affects your 2012 taxes. It's a big problem, and it would hit like 30 million families who don't know it's coming, but most of this increase affects your 2013 taxes. So you wouldn't actually -- I mean you would feel it in withholding, you would feel it in your paycheck, but they actually have some time to fix this before you file your 2013 taxes to give you back some of that money.

BALDWIN: Time to fix this, Lori Montgomery, thank you.

I want to start there with Dana Bash here in a moment because the fiscal cliff debate is starting to sound like, you know, a high stakes game of chicken. There's all kinds of tough talk. No action. Right now Democrats and Republicans are refusing to compromise on this key sticking point, how to get more money from wealthy people. President Obama, you know the deal, he wants to raise tax rates for the wealthy. House Speaker John Boehner wants to close tax loopholes, limit deductions for the wealthy. Let's stay on The Hill here. Let's talk to senior congressional correspondent Dana Bash.

And, you know, Dana, we know the speaker -- we know Speaker Boehner met with conservative Republicans today. Did he get any backlash today from his plan?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know what, interestingly, it doesn't seem like he did.

BALDWIN: Huh.

BASH: We know that conservatives are not happy with the idea that their own House Republican leadership proposed a plan that includes $800 billion in new revenue. We've seen -- we reported on it extensively yesterday and the day before about the e-mail alerts that conservative groups have put out. Republican Senator Jim DeMint was very up-front about the fact that he's not happy about it.

However, when it comes to Speaker Boehner's own Republican conference, as it's called, we're told that they met for an hour and there wasn't backlash. That they were pretty much united behind him. It seems as though, Brooke, that the speaker has, for now, emphasize for now, been able to turn the frustration within his caucus against the president and not -- and keep it away from himself. And that's why you're hearing over and over the speaker say that the Republicans are trying to be reasonable, the Republicans are trying to move the process forward and it is up to the president, at least at this point in time, to even respond because it's been two days since the president has gotten their counterproposal and they haven't even heard from the president.

BALDWIN: Well, we know -- how about this, the Congress is done for at least this week. Some lawmakers have already left town. And you asked Speaker Boehner point blank, is he willing to stick around to work on the fiscal cliff problems. What was his response to you?

BASH: Well, he's staying here. He says he's not going anywhere. He says he's ready, willing and able to meet with the president, to talk to the president, to negotiate any time the president is going to respond. But the issue is still that, I mean, from where I'm standing, I can look at the House floor and I can see the dark doors closed. They're not here. They're not voting for the next two days. And it's only Wednesday. So the House of Representatives is gone.

And what I asked the speaker is whether the optics of that looks kind -- look kind of bad since the fiscal cliff is just a couple of -- a couple of weeks away and they're not in town.

BALDWIN: And what did he say?

BASH: And he didn't answer. And he just said that he's going to be here. Other Republican sources that we talked to say, you know, it is what it is. It's the reality. And the reality is, they don't have anything to put on the floor to vote on right now and they're in a waiting game for the president. And so I think actually, at the end of the day, having them go home, having them, you know, sort of stream down the Capitol steps helps illustrate the Republicans' point, which is that they're just kind of waiting for the president to make his next move.

BALDWIN: Time for the White House, so the Republicans say. Dana Bash, thank you very much for us on The Hill.

As I mentioned at the top of the hour, we were talking about Egypt. We are keeping a close eye on this potential powder keg. Take a look. Look at these masses. This is Cairo. Where two groups of protesters have been clashing. This is just outside of the presidential palace. Tossing rocks, lobbing fireworks and Molotov cocktails at one another.

And, again, we have just gotten word from state run television that masked men have set fire to the headquarters of the Muslim Brotherhood. On the one side, of course, you have the anti-government protesters. They're furious about President Mohamed Morsi, his recent power grab and hastily passed draft constitution that they say leaves them, the people, out of the process. The other group called in by the pro-Morsi Islamist group, the Muslim Brotherhood, to show support for the president. And it was the Muslim Brotherhood headquarters that apparently have been set on fire.

A family living underground to avoid bombs in Syria. CNN takes you inside their chilling reality.

I'm Brooke Baldwin. The news is now.

A little girl in the middle of a nasty custody fight that, today, goes to the nation's highest court.

And, they're young, they're popular, they're on the short list for 2016.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: We must speak to the aspirations and the anxieties of every American.

(END VIDEO CLIP)

BALDWIN: So if Paul Ryan and Marco Rubio are the future of the GOP, how do veteran Republicans feel about that?

(COMMERCIAL BREAK)

BALDWIN: Now to this story here out of Syria from CNN's senior international correspondent, Arwa Damon. She takes us to this dark underground world, beneath Aleppo, where she found a family hiding from the bombs overhead. But they're not just hiding, they're living underground as well. Here's Arwa.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Down a steep stone stairway into the darkness, this is where the Kudia (ph) family has been hiding for four months.

"The strikes were all around us. We just ran out with nothing," 20- year-old Fatma (ph) recalls. "We just ran and ran down here and the shrapnel was falling all over." Since then, they've dared occasionally to go back home to collect belongings.

"There would be bombing like that and we'd come running back here," Fatma says.

Their home is just five doors away, but it's right on one of Aleppo's front lines. It's been hit by artillery fire since they fled.

"We go home every two weeks to shower, fearful and terrorized," Fatma's mother tells us. "We have a weak home. It could crumble any moment."

Their makeshift bunker was a workshop. The carpenter's intricately carved furniture still lines the walls. The last time the family ventured out was three weeks ago. Fatma and her younger sister want to leave, anywhere but here, anywhere they can feel the sun and smell fresh air. But their father refuses.

Poor, but proud. He says he doesn't want to be at the mercy of others. Here, he can send his son to scrape money and buy a little food. It's humbling how amidst all they have lost and suffered, they insist on offering us tea.

The girls dream of wounded neighbors. Their mother has nightmares her children are dead and says she feels her heart is going to burst with each explosion.

"I just tell her it's far away and not to be scared," Fatma says.

But sometimes the bombings are so close, the family says they choke on the dust.

"What can we say, we're living in a prison. Prisoners in a prison," Fatma says.

"It's more like a grave," Zahra (ph) adds.

DAMON (on camera): To give you an idea of just how dark it really is, and terrifying with all of the sounds of the gunfire outside, we're going to switch our camera light off. This tiny flame is all the family has.

DAMON (voice-over): As they listen to the sounds of war above.

Arwa Damon, CNN, Aleppo.

(END VIDEOTAPE)

BALDWIN: Single flame. Arwa, thank you.

I know a lot of you are still talking about this story, this frantic search for an 11-year-old girl, leukemia patient from Arizona. The girl was last seen leaving the hospital, just walking out the doors with her mother. And now we're hearing that mother is speaking out. Wait until you hear why she says they left. (COMMERCIAL BREAK)

BALDWIN: The father of an 11-year-old cancer patient who was removed from a Phoenix hospital says she is better off in Mexico. The young girl last seen here on hospital surveillance tape just walking out with her mother. After this, a frantic search was launched because of fears that the girl's heart catheter could become infected. Speaking on Mexican television, her father says they took her back to Mexico because she was being given, quote, "bad medical treatment," end quote. Hospital officials say the girl needs treatment and police say the parents here could face negligence charges.

Ships and cargo, they are again moving at the nation's biggest shopping complex as the ports of Los Angeles here and Long Beach. This day long huddle led to a tentative deal today to end this eight-day strike by harbor clerks who feared their jobs would be outsourced.

(BEGIN VIDEO CLIP)

RAY FAMILATHE, VP, INTL. LONGSHORE AND WAREHOUSE UNION: Really pleased to tell all of you that my 10,000 longshore workers in the ports of L.A. and Long Beach are going to start moving cargo on these ships.

(END VIDEO CLIP)

BALDWIN: The deal won't be final until union members actually vote on it.

And 11,000 jobs are vanishing at Citigroup. That's about 4 percent of the company's workforce. All these job cuts are part of this plan to cut costs at the financial giant, which nearly collapsed during the 2008 financial crisis. They are expected to save $900 million next year. And more than $1 billion a year after that. This is the first huge move by Michael Corbat, who became Citigroup's CEO when Vikram Pandit suddenly resigned in October.

And, as we mentioned here, we're just getting word actually now that Reza Sayah, our correspondent in Cairo, he has called in. We are hearing masked men have set fire to an office headquarters of the Muslim Brotherhood. Stand by for that. That's next.

(COMMERCIAL BREAK)

BALDWIN: As promised, we wanted to get you back to Egypt here because we've been reporting on these deadly clashes in Cairo. Thousands of supporters of the Egyptian president, Mohamed Morsi, they're pushing these anti-government protesters from the palace grounds and the president's opponents are pushing back. You have these two sides. They've been throwing rocks, fireworks, Molotov cocktails here in this whole melee against one another. The opposition, you know, firing back as well, trying to gain ground. Egypt's health ministry says two protesters have been killed. CNN's Reza Sayah is live for us in Cairo.

But, Reza, I want to begin here with the reports of these masked men setting fire to the Muslim Brotherhood offices in eastern Egypt. What do you know about that? REZA SAYAH, CNN CORRESPONDENT: Well, we just got that word in a few minutes ago as well. This is an office of the Muslim Brotherhood, their political wing, the freedom and justice party attacked by masked men who apparently torched the place. And this is another sign that this conflict is escalating.

And more tense scenes tonight outside the presidential palace. We've seen a lot of tense nights over the past week and a half, but without question, this was the ugliest night. This was the first night where we saw violence between the two sides, the supporters of the president, and opponents of the presidents. They've both gathered outside the presidential palace tonight, facing off, right in the middle of the street. First it started with exchanges of insults and chants. And then you had pockets of clashes. Rocks being thrown back and forth. Two people killed according to the health minister, dozens injured. And tonight, Brooke, we really saw bitterness among the two sides. And it looks like these two sides are digging in, they're defiant, they're determined, and they're not backing down.

In the meantime, you have the clock ticking towards this referendum. This national vote on this draft constitution. That's what the president wants. That's what his supporters want. The opposition, their supporters, they're determined to derail the president and that's where we stand. What is an incredibly dramatic impasse. A lot of uncertainty in the coming days here in Egypt, Brooke.

BALDWIN: So, Reza, amidst all of this, where is President Morsi right now?

SAYAH: Well, indications are that he is in a safe location and at no point do his aides say was he in any kind of danger. Not yesterday, not today, and we're not seeing any evidence of these protesters trying to infiltrate, break the palace doors open. They're staying outside the palace walls, protesting, taking one another on. And we have word that President Morsi is not in the palace. We're not sure where he is at this hour.

Brooke.

BALDWIN: OK. We'll keep watching. We'll keep watching with you, Reza. We appreciate it. There in Cairo for us.