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Geithner: White House Prepared to Go Over Cliff; Same Sex Marriages, Marijuana Limbo in Washington State; Colorado Still Waiting on Pot Laws; McAfee May Be Returned to Belize Today; Typhoon Kills 330 In Philippines; Lighting Up The Night Sky; Public Theater, Private Talks

Aired December 6, 2012 - 10:00   ET


CAROL COSTELLO, CNN ANCHOR: The most laid back new year's celebration ever? No. a celebration of Washington State's brand new pot law. And yes, those people are smoking joints.

Facing deportation. Guatemala may send an eccentric millionaire back to Belize. Is John McAfee's run from the law over?

Syria, chemical weapons and now possibly asylum for the man who has power to gas his own people.

And hands out, New Jersey Governor Chris Christie asking the feds to pay 100 percent for the damage left by Sandy. NEWSROOM starts now.

Good morning. Thank you so much for being with us. I'm Carol Costello. We begin this morning in Washington where the halls of Congress are a little quieter now that House members have gone home for the weekend.

That break comes with 26 days to go until the fiscal cliff deadline and after President Obama and House Speaker John Boehner spoke again by phone, but failed to reach a deal.

Boehner says revenues can be on the table just not in the form of tax hikes on the rich. Treasury Secretary Timothy Geithner says that just won't work.


TIMOTHY GEITHNER, TREASURY SECRETARY: There's no point to an agreement that doesn't involve those rates going up on the top 2 percent of the wealthy. It's only 2 percent.


COSTELLO: Geithner went on to say that he's fully prepared. The Obama administration is fully prepared to go off that fiscal cliff if Republicans don't agree to tax hikes on the wealthiest Americans.

So let's bring in congressional correspondent Kate Bolduan. So the White House won't budge on taxes. The Republican-led House takes a break. Can you make sense of this for us? KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: I think that's a little above any of our pay grade trying to make sense of it all other than it seems that it's one more fight that we've seen over and over again and we are seeing once again it play out almost as it appears slow motion, Carol.

You mention the call between Speaker Boehner and President Obama. They may have talked. No read out of the call per se. But we are still a long way away from a deal that is for sure. Why, because at its most basic neither side is giving on their primary position.

President Obama continues to insist over and over again any deal must include a tax rate increase on the top 2 percent of wage earners, which Republicans just as firmly insist is a nonstarter.

Today, the President is going to continue his public pressure campaign according to the White House, he's meeting with a middle class family in Northern Virginia to discuss as they put it the importance of extending the tax cut for the middle class.

They have not extended it for the wealthy. This kind of public pressure no surprise to you, Carol, has not set well with Republican lawmakers, Republican leaders on the Hill.

And so we are still watching this really stare down between the two sides even though we see Republican lawmakers and senators coming out and hinting they could accept a tax rate increase if it is part of a broader deal, but Boehner right now appears to have still strong support among his rank and file.

And the negotiations really come down to Speaker Boehner and President Obama. So we all wait, watch and listen to see if there are hints of progress, but none so far.

COSTELLO: Kate Bolduan reporting live from Washington.

In Washington State, love is in the air, same-sex marriage now legal there. At midnight couples lined up to get a license and the very first couple to tie the knot in Seattle, you're looking at them, two women together for 35 years. Right now same-sex marriage is legal in nine states and the nation's capital while civil unions are available in five other states.

Smoke them if you got them. Today recreational marijuana is officially legal Washington State. It was, shall we say, a rather mellow celebration. It's Seattle (inaudible) pot smokers lit up though like it was New Year's Eve.

The new voter approved initiative went into effect at midnight. Now technically this party is illegal. Washington's law bans smoking pot in public places, but for now the Seattle Police Department is turning a blind eye.

Last night, this notice was sent out to al officers. Quote "Until further notice, officers shall not take any enforcement action other than a verbal warning for Violation of Initiative 502." Miguel Marquez is in Seattle. He was there for the big midnight party. So what was it like?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, it was certainly interesting. Something different -- more different than anything I've been to before. It's a first step in a long implementation process of Initiative 502 here in Washington State.

By the end of the year, there will be pot shops on the streets throughout Washington State. There will be legal pot growers. There will be pot processors. They will make everything from cigarettes and cigars to cookies and brownies if they can sell them, if they want to sell them.

But the one thing with these shops is you can buy the stuff there, but you wouldn't be able to consume it there like you can in Amsterdam and coffee houses and cafes. You would have to take it home and do it in private places.

Unlike booze, you couldn't do it in restaurants and bars and clubs. Now at midnight there were parties across the state here and I can tell you that the one here is pretty interesting. Here's a taste of what it was like.


UNIDENTIFIED MALE: I love Washington. I love Seattle. I love Seattle. I'm going to write a rap song about Seattle.

JEREMY GEORGE, MARIJUANA SUPPORTER: It's amazing. I'm not a criminal anymore. I can't go to jail for small amounts of marijuana. I'm free to be free.


MARQUEZ: Now, where we go from here is that the Washington State's Liquor Board will have to implement the rules for how this thing plays out and over the next 12 months or so they will be doing that. It is one step at a time.

At the moment, you aren't supposed to be smoking pot on the streets here, but as you said they are turning a blind eye. By the end of the year everything will be regulated and taxed very heavily here, 25 percent tax.

Proponents say that they will be raising as much a half billion dollars, $500 million a year from the sale of marijuana and marijuana products in Washington State once this gets going -- Carol.

COSTELLO: Miguel Marquez live in Seattle this morning. While many there are celebrating, Colorado isn't ready to spark up just yet. Voters cast votes to legalize marijuana as well, but marijuana won't officially be legal for another month. Jim Spellman is in Denver, Colorado. So Jim, what's the holdup?

JIM SPELLMAN, CNN CORRESPONDENT: Well, the governor here still has to sort to cross T's and dot I's here to make this official. But like in Washington State, there's still a lot of uncertainty about what the federal government is going to do before we can really have fully implemented legalized marijuana here. Take a look.


SPELLMAN (voice-over): On Election Day, Colorado voted to legalize marijuana and by early January, the governor will make it official. But don't expect the streets of Denver to look like this. Smoking pot in public will remain illegal, but behind closed doors the times are a changing.

BRIAN VICENTE, CAMPAIGN TO REGULATE MARIJUANA LIKE ALCOHOL: Adults 21 and over can possess small amounts of marijuana and grow small amounts of marijuana privately. It really is a fundamental shift from the 80 odd years of marijuana prohibition.

SPELLMAN: Brian Vicente is a co-author of Amendment 64 that legalized marijuana. Built into the amendment is a yearlong waiting period for the state to come into a system to regulate pot like alcohol and ultimately set up marijuana stores by early 2014.

VICENTE: We want to be a model for the rest of the states on how to treat this policy issue correctly.

SPELLMAN: The effects of the amendment are already being felt. In several jurisdictions pending marijuana cases have been dropped but not everywhere. Ken Buck is the Weld County D.A.

KEN BUCK, WELD COUNTY, COLORADO DISTRICT ATTORNEY: The law is that it is still illegal to possession marijuana and we're still prosecuting marijuana cases.

SPELLMAN: Buck opposed Amendment 64. He says of the 121 pending marijuana cases, three-quarters involve other crimes. He relies on marijuana charges to divert users into drug treatment programs, which he says helps reduce crime.

BUCK: We'll see an increased crime rate. We'll see de-motivation among high school students and others who end up smoking this. I think we're going to see the impact for years to come as a result of this experiment.

SPELLMAN: Marijuana is still against federal law and regulators worry the administration could block legalization.

MARK COUCH, COLORADO DEPARTMENT OF REVENUE: It's the will of the voters of Colorado that these actions and Amendment 64 take place. That said, the federal government has a very strong interest here and so we need to know what they plan to do.

SPELLMAN: If the federal government does attempt to block Amendment 64, advocates say they are ready to fight.

VICENTE: I'm an attorney. We have a team of attorneys in Colorado and nationally. We're prepared to defend the will of these voters. (END VIDEOTAPE)

SPELLMAN: Now keep in mind here in Colorado medical marijuana is already legal and there are over 500 medical marijuana stores here. Over 100,000 people on the medical marijuana registry.

We sort of already have a model, a peek into the future of what this is going to look like if the federal government lets it go forward and the state can get over those hurdles and enact this amendment -- Carol.

COSTELLO: OK, so I admit it, I'm curious. How much for an ounce of marijuana if you want to smoke it recreationally as is legal in Colorado right now?

SPELLMAN: Well, most of the time that I spent reporting in medical marijuana dispensaries, a joint costs $5. An eighth of an ounce is a pretty common amount. That's about $40. Most of the people I see are buying that kind of quantity and not whole ounces at a time.

People do, of course, but that's it. A lot of people in the medical marijuana dispensaries stop by and pick up one or two pre-rolled joints and go on their way. It's almost become the new normal here already, Carol.

They're in every neighborhood. They're in my neighborhood. They're around the corner from the TV studio where I am right now. I'm not sure we'll have quite a dramatic shift here that they have in Washington State. I don't think we'll see big celebrations breaking out because honestly most people here who want marijuana can already get it -- Carol.

COSTELLO: Fascinating. It's just so -- I don't know -- so difficult to believe with the history of marijuana in this country. Jim Spellman reporting live from Denver, Colorado, this morning.

Other stories making news, holiday sales expected to jump back to pre- recession levels this year. A research group says the average shopper will spend about $850 on gifts, about a 32 percent jump from last year. And more people say they're willing to pay full price for a gift instead of waiting for it to go on sale.

Gay men and women earn more money and have less debt than the average American. That's according to a new survey from Prudential of more than 1,000 gay, lesbian, bisexual and transgender people. They say gay people earn about $10,000 more a year, have about $4,000 less in debt and are more likely to be employed.

Prince William's wife is out of the hospital after spending three days for a severe case of morning sickness. Katherine and Prince William left this morning. Royal officials say she's not yet 12 weeks pregnant so they're not announcing the due date of the baby.

He made his mark with an anti-virus software, but later John McAfee has been known as the millionaire on the run. Well, now that run from the law appears to be over. (COMMERCIAL BREAK)

COSTELLO: It's 14 minutes after the hour. The saga of John McAfee has been playing out like a movie and it looks like the next scene will be back in Belize. McAfee is being detained in Guatemala after officials there say he entered the country illegally.

The foreign minister says he doesn't know how McAfee got in. The millionaire founder of the McAfee anti-virus software has been on the run for weeks. McAfee may be returned to Belize as early as today where authorities want to question him about the death of U.S. businessman Gregory Fall.

The two were neighbors in Belize and not always on friendly terms because of McAfee's dogs. Fall was found dead in his home from a gunshot wound last month. McAfee maintains he had nothing to do with it. He spoke with CNN Espanol.


JOHN MCAFEE, U.S. CITIZEN SEEKING ASYLUM: No one has blamed me for the murder. I have not been charged. I am not a suspect. They merely want to question me about the murder. I am not concerned. I have not been charged with a crime. There is no basis for extradition.


COSTELLO: Martin Savidge has been covering this story. He's actually at the airport now on his way to Belize. He'll be filing a story with us with the latest developments very soon.

Other stories we're following this morning. Secretary of State Hillary Clinton meeting today with the U.N. special envoy and Russia's foreign minister. Sources say the focus of the talks is formulating a plan on how to move forward with the crisis in Syria. Clinton noted growing concerns that the President may use chemical weapons on his own people.

Thousands of homes in the Philippines have been destroyed as survivors try to recover from a typhoon. More than 330 people are dead, hundreds others are missing. The storm wiped down entire towns, washed out major roads and bridges and disrupted evacuations across the country.

Proof that we can sure light up the night sky, new video released by NASA. You can see the city lights from around the globe. It's so awesome. It took nine days for a satellite to capture these images. It needed 312 trips around the earth to take all of the pictures. They were mapped over existing imagery of the earth to make this one impressive view. Wow.

Zynga, the game company that makes Farmville wants to dabble in real money, online gambling. It filed an application for a gaming license in Nevada, the only state that currently allows it. The gambling biz could help Zynga make up for lost revenue from other games. It will take years for New Jersey to recover from Sandy and its financial toll and now the governor is asking Washington to help pay for all of the recovery, all of it.


COSTELLO: Now is your chance to talk back on one of the big stories of the day. Are you prepared if the nation goes off the fiscal cliff? The ultimate game of chicken, who will brink first on blink first on the fiscal cliff?

As Treasury Secretary Timothy Geithner told CNBC, bring it on.


UNIDENTIFIED MALE: Is the administration prepared to go over the fiscal cliff?

TIMOTHY GEITHNER, TREASURY SECRETARY: Absolutely. There's no prospect to an agreement that doesn't involve rates going up on the top 2 percent of the wealthy.


COSTELLO: Well, taxpayers may think that's easy for Geithner to say. What about all those middle class families whose taxes will go up more than $2,000 if as Geithner suggests we dive off that cliff? Even though President Obama and John Boehner chatted by phone, there's no deal. Republicans are not amused.


SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: Incredibly many top Democrats including the President seem perfectly happy to go off the cliff. That's why the President has been more interested in campaign rallies than actually negotiating a deal.


COSTELLO: Many Americans don't have much hope the two sides will make a deal and have moved to plan B. A retired teacher in Utah has put off plans to get a new car. Brian Chandler, a data manager in Atlanta is delaying buying a house despite needing space for a second kid due any day now.

And several families are shrinking the gift pile beneath the Christmas tree this year. How about you? Are you prepared if the nation goes off the fiscal cliff? Your responses later this hour.

It's going to take massive amount of money to help the northeast recover from Sandy, some $36 billion in New Jersey alone. And now it's Governor Chris is pushing the federal government to pick up 100 percent of that cost

(COMMERCIAL BREAK) COSTELLO: Good morning. Thank you so much for joining us. I'm Carol Costello. It's just about 30 minutes past the hour, time to check our top stories. Tanks and armored personnel carriers line the streets along the presidential palace in Cairo.

Five people have been killed. Close to 450 injured. The unrest settles around the president's recent decree of giving him judicial immunity until a new constitution is approved.

Marking a solemn moment in sports, members of the Kansas City Chiefs attended a funeral for teammate Jovan Belcher. As you know, Belcher committed suicide after killing his girlfriend Kasandra Perkins on Saturday. The couple leaves behind a 3-month-old daughter. Perkins' funeral is today in Texas.

Smoking a joint now legal in Washington State, at midnight pot users celebrated as the voter approved initiative went into effect possessing an ounce of marijuana is OK, but selling and growing the drug is not. It's still against federal law. The Seattle Police Department is telling officers to give out only verbal warnings.

The politics now and ongoing finger pointing over the fiscal cliff, the White House says it's not making a deal unless Republicans agree to raise taxes on the top 2 percent of the nation.

One Republican Congressman Steven Latourette of Ohio tells CNN that approach is just a drop in the bucket when it comes to the deficit offering his thoughts on what it will take to reach a solution.


REP. STEVEN LATOURETTE (R), OHIO: If you look at just what the President is talking about, everybody says the 2 percent and so forth and so on. That generates $900 billion over ten years, which is $90 billion a year. That would operate the government for 11 days.

So we are borrowing $1.6 trillion. I think the President if he wants to take the deal and comes forward with real entitlement reform, there's a deal to be had. This is going to be a negotiation between the President of the United States and House Speaker John Boehner.

And so we have engaged in some charades over the last 16 years where we all pretend to be working in our offices, but we're not doing anything to get this done because there's nothing we can do.

This is going to be a discussion between the top leaders of the House and the White House and when they signal sort of like the pope being elected, when the white smoke comes out of the capitol, we can come back and execute the deal.


COSTELLO: Joining me now is Congressman Steve Israel of New York. He is the chairman of the Democratic Congressional Campaign Committee. Welcome.


COSTELLO: So you heard your colleague from Ohio. He says sometimes negotiations between Congress and the White House are, quote, "charades" and that members are waiting for signals from the Obama administration and people like Speaker John Boehner and Majority Leader Reid before they go forward. Do you see it that way?

ISRAEL: Well, look, it's critical that the leaders of both parties and the White House, the House and Senate come to an agreement fast. Now, we have always said on the Democratic side, House Democrats have said we want deficit reduction that's big, bold and that is balanced.

The President has put forth a variety of ideas and programs. The response consistently from House Republicans has been, no, no and no. Now they did come up with a proposal finally just two days ago. There are elements in that proposal we should talk about.

There are elements in my view that we shouldn't. The bottom line is this. I'm not so sure that we can get agreement on some of the very significant differences that we have such as on Medicare and Social Security where Republicans want to cut Social Security benefits and Medicare benefits.

We disagree with that. Let's do this, Carol. This is common sense. Let's at least pass tax cuts for up to the first $250,000. We can go back to Washington tomorrow and do that.

Give middle class families the certainty they need so they can do their holiday shopping knowing how much is going to be in their paychecks in January. Washington needs to learn to pass what it can agree on and we all agree on tax cuts for the first 250.

COSTELLO: Let's talk about possible tax hikes on middle class Americans because Timothy Geithner in an interview with CNBC says the Obama administration is willing and prepared to go off the fiscal cliff unless Republicans agree to raising taxes on the wealthiest Americans. I'm not sure that many middle class Americans really want to hear that kind of language. Should Timothy Geithner have said that?

ISRAEL: Well, I think Secretary Geithner's point is that any ultimate deal has to be balanced and Republicans continue to say just cut, cut entitlements, cut retirement, cut Social Security, cut investments in infrastructure but protect the wealthiest 2 percent. We say let's do it all.

COSTELLO: Even at the expense of going off the fiscal cliff because if we do that taxes will go up on middle class Americans to the tune of 2,000 plus dollars.

ISRAEL: And my whole point is we can put the brakes on the fiscal cliff. They say let's cut taxes for the first $250,000. Democrats say that. Let's agree and pass what we can agree on and what we can agree we can have those debates later. But we have a responsibility to middle class families and small business to give them certainty.