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Coburn Backs Tax Hike on Wealthy; Economists Say Debt Deal Comes with Risks; Senator Jim DeMint to Leave the Senate; Families Struggle to Rebuild After Sandy; Medical Marijuana Stops Seizures in Boy; Same-Sex Marriage Starts in Washington State.
Aired December 6, 2012 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUZANNE MALVEAUX, CNN ANCHOR: Americans nervously watching the calendar, knowing just 26 days away, their taxes are going to go up if Congress and the White House don't reach a debt deal. And now a new development in the standoff. We have Republican Senator Tom Coburn breaking ranks with leaders supporting an increase in tax rates for the wealthiest 2 percent of Americans. Coburn is known for his hard line on the deficit. He says he would rather bring down the debt by raising tax rates than just closing the loopholes and capping deductions. Here's how he explained it.
(BEGIN VIDEO CLIP)
SEN. TOM COBURN, (R), OKLAHOMA: Personally, I know we have to raise revenue. I don't really care which way we do it. Actually, I would rather see the rates go up than do it the other way because it gives us a greater chance to reform the tax code and broaden the base in the future.
(END VIDEO CLIP)
MALVEAUX: Two Republican Senators from Maine are joining Coburn in backing a tax hike on the wealthiest Americans, but Senator Susan Collins and Olympia Snowe say they would like to include some protection as well for small business owners.
Well, no debt talks scheduled between Republicans and the White House, but the president is pushing ahead with the fiscal cliff P.R. campaign. He is meeting with a middle class family in northern Virginia, and the White House says the president is going to talk about his efforts to extend tax cuts for the middle class as part of this debt deal.
Well, some economists are predicting that the country will go into another recession if this debt deal is not reached, and any deal that the lawmakers and White House come up with is also going to have a major impact.
So joining us to talk a little bit about it, Peter Morici, an international business professor at the University of Maryland; and in New York, our own chief business correspondent, Ali Velshi.
Peter, I want to start with you.
You wrote something, an article here, predicting that these tax hikes, the spending cuts likely in the debt deal, could push unemployment, you believe, from 7.9 percent all the way to 10 percent. How so?
PETER MORICI, INTERNATIONAL BUSINESS PROFESSOR, UNIVERSITY OF MARYLAND: Well, simply it will cut spending in the economy. The wealthy will have less money to spend, but the government will likely be spending a lot less money as well because the Republicans are going to want spending cuts. You combine, say, about $250 billion in spending and tax cuts. That will probably cut GDP with the usual multiplier efforts of two percentage points. That's enough to raise unemployment by a couple of percentage points. It's serious business.
MALVEAUX: Ali, what do you think?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Well, look, I think Peter is right that the spending cuts that would be imposed by the fiscal cliff would be devastating. It would send unemployment higher. It would cost jobs. The Republicans, as Peter says, are going to insist on some cuts anyway, so bottom line is we are going to see a weaker economy into the beginning of next year, probably, one way or the other.
Now, the counter to that, Peter, is that there are forces in the economy that are strengthening it. This energy boom that we've got, the natural gas, the amount of fracturing that we're doing, the fact that housing has been doing tremendously well, and interest rates remain very low with prices, so there's some sense that there's a bit of a renaissance on the horizon, and if the government doesn't mess that up too much, 2013 could end up being as good as 2012 if not a little better. I don't know if you completely disagree with that, Peter, but I think there's enough good going on that it could offset the bad.
MALVEAUX: Ali, do you think it could go up to 10 percent unemployment. Do you agree with Peter on that?
VELSHI: I don't know. I don't know if it will go up to 10 percent. There are two scenarios. One, Suzanne and Peter, is if we really go fully of the cliff, nobody does anything, and nobody fixes anything, I don't think that will ultimately happen. I think we're going to go sort of partially off this cliff, and there will be some cuts, and there will be some tax increases.
Probably the net result is that it will soften whatever was happening in the economy, but there are other forces that are strengthening it. I don't know if 10 percent is in the cards.
MALVEAUX: Peter, what do you think it means if we go off the fiscal cliff?
MALVEAUX: Do you think it will be devastating as many are predicting? MORICI: Well, if we go off the cliff, it will certainly be devastating. I think it's very hard to argue that subtracting $50 billion to $600 billion from spending overall would not cause something in the neighborhood of $800 billion to $900 billion of loss to GDP, and that would put us in a recession. The energy boom, housing is contributing to growth, also, the auto sector. However, if we look at consumer spending, it has begun to slow. It has slowed down. There's no reason to belief it's going to grow rather dramatically faster in the first half of next year.
My view is without any action, the U.S. economy would grow at 2 percent to 3 percent, maybe a little less.
MORICI: With some action, say, $30 billion in cuts, then I have to subtract something for that, and I start to get close to zero. When you get close to zero, there's always the problem that the economy can't grow to slowly because it just loses momentum, and it's like a man on a bicycle and falls off.
MALVEAUX: Ali, what is the prescription here? What is the right balance between cutting these programs and the expenditures and also bringing revenue?
VELSHI: Look at it at a micro level. Peter talks about consumer spending, and you can put business spending into that. The bottom line is if everything that was bad in the fiscal cliff happened, there are some estimates it might take, you know, $2,500 out of the average family's spending. For a regular family, that will take a lot out of their budget. If you have a new job and we are gaining jobs, it has less of a bite because now you've got new money.
The bottom line is we need to not go off the cliff. We need to not see massive spending cuts. We're going to have to have longer-term cuts, and in my opinion probably longer term tax increases on everybody. Not just the top 2 percent. It would be best not to do it at this sort of dangerous time in the economy in a way that would be so -- have such a forceful impact on the economy. But that is a political decision more than it's an economic discussion right now.
MALVEAUX: Peter, I'm going to give you the last word.
MORICI: It's really a political issue. This is not the right time to be cutting. We probably should wait another six months. However, the president sees this as an opportunity to get the cuts in ways that he likes best because he won the election. Fair enough. So the president sees a political opportunity. I think there's some danger here by not just renewing all these tax cuts and sitting down and talking about tax reform and spending cuts by midyear, that there's a real danger that we could tumble the economy.
MALVEAUX: All right. Peter, Ali, thank you so much. We'll be waiting. Obviously, days away to see what's going to happen here. Thank you. One of the most staunchly conservative members of the U.S. Senate calling it quits. Senator Jim DeMint, a Republican from South Carolina, announced today he will resign from Congress at the end of the month. He is leaving to take over as the head of the conservative think tank, the Heritage Foundation. He told CNN this morning he can be more effective outside the Senate than inside.
(BEGIN VIDEO CLIP)
SEN. JIM DEMINT, (R), SOUTH CAROLINA: I'm convinced that we need to take a positive optimistic message to the American people. A lot of my role in the Senate has been stopping bad things and saying no to bad things, but we need to do more than that, and tell Americans what we're for. One of the mistakes I think the Republican Party made the last two years is trying to make Obama the issue without sharing with America bold reform ideas that get people inspired to get behind us.
(END VIDEO CLIP)
MALVEAUX: Following the rules of the Senate, South Carolina's governor will name with an immediate successor to fill DeMint's seat, and then the state will hold a special election for the voters to choose a permanent replacement. We'll have more at the top of the hour.
And also, this story. A brave young boy, who lost his home and his school in Hurricane Sandy, well, he is now talking about coping with life.
(BEGIN VIDEO CLIP)
RYAN PANETTA, COPES WITH LIFE AFTER HURRICANE SANDY: When something brings you down, you got to get up.
POPPY HARLOW, CNN CORRESPONDENT: You OK, buddy?
(END VIDEO CLIP)
MALVEAUX: One family is doing more than a lot after the tragedy that destroyed tens of thousands of homes on the east coast.
MALVEAUX: This is an amazing story of survival. A New York family who lost everything after Superstorm Sandy are struggling to make a new life. And one of the biggest challenges is for this 13-year-old star student in the family to just get to school.
Poppy Harlow has the story.
HARLOW (voice-over): The sun isn't up for breakfast time for the Panettas.
(on camera): How tired are you? RYAN PANETTA: Very.
HARLOW: Tim, Ryan, Christian and Carly are now living in a borrowed one bedroom apartment with their parents.
(on camera): How long is your commute to school now?
RYAN PANETTA: It feels almost like two hours.
HARLOW: What did it used to be?
RYAN PANETTA: 15 minutes.
(voice-over): 6:30 a.m., and they're out the door. A long car ride --
KAREN PANETTA, RYAN'S MOTHER: Have a good day.
HARLOW: -- then a bus to Ryan's temporary school, PS 13.
KAREN PANETTA: It's unreal how much our life has changed, and we're trying to make the best of it.
HARLOW: He is an eighth grade honor student, one of 5,400 New York students still in different schools because of Sandy.
CARRIE JAMES, TEACHER: he is the one that I think was probably impacted the most, and yet, he has the strongest will to be here every day.
RYAN PANETTA: When something brings you down, you got to get up.
HARLOW (on camera): You OK, buddy? What makes you so sad?
RYAN PANETTA: I honestly don't know.
RYAN PANETTA: Yes. It's everything.
UNIDENTIFIED MALE: Stop at the VFW for hot meals.
KAREN PANETTA: Have a good day, Ryan.
HARLOW (voice-over): Every day after school, Ryan returns to Broad Channel to help his dad try to put their home back together.
JOE PANETTA, FATHER OF RYAN: Everything I owned, everything I worked hard for, everything that was there, and it's gone. There's nothing.
HARLOW: Joe was working overnights and Karen was home with their four children when Sandy hit.
KAREN PANETTA: It was unbelievable how quick it came out. HARLOW: The water rushed into their one story house. Ryan swam to a neighbor for help.
RYAN PANETTA: I jumped out.
HARLOW (on camera): You jumped out here in the water?
RYAN PANETTA: Yes. I wasn't even thinking that, like, a log would hit me or anything.
HARLOW: Or the electrical power lines?
RYAN PANETTA: Yes.
HARLOW: You swam to this house?
RYAN PANETTA: Yes, right here.
And they took us into their second floor.
HARLOW (voice-over): The neighbor helped bring the rest of the family over, and they watched as the water engulfed the only home they had known.
(on camera): What did you think when your 13-year-old son jumped in the water?
KAREN PANETTA: You know, I was panicking. I was panicking.
HARLOW: Did Ryan help save your family?
KAREN PANETTA: Absolutely.
HARLOW: No question?
KAREN PANETTA: Absolutely.
CHRISTIAN PANETTA, RYAN'S BROTHER: I was thinking that the rain is going to come.
HARLOW: Do you feel like your brother helped save you?
CHRISTIAN PANETTA: Yes.
HARLOW (voice-over): Now all the Panettas are working to rebuild their home, and erase the bad memories.
RYAN PANETTA: After what I have just been through, like, I don't hope I have to see anything that terrifying again.
HARLOW: Poppy Harlow, CNN, Broad Channel, New York.
MALVEAUX: We wish them the best.
Medical marijuana doctors don't recommend it for children, but for one 6-year-old boy it brings new meaning to life.
MALVEAUX: California, one of a handful of states that permit the use of medical marijuana. And one father sees it really as a life-saving remedy.
Kyung Lah has the story.
KYUNG LAH, CNN CORRESPONDENT (voice-over): The video is hard to watch, 6-year-old Jayden in an epileptic seizure.
(on camera): When you hold your son and he is screaming like that, what is that like?
JASON DAVID, FATHER OF JAYDEN: I would say hell. There's nothing you can do to make him feel better.
LAH (voice-over): But there is something. Jason David administers an unorthodox drug for his son's catastrophic epilepsy, a disease that can be fatal for children.
(on camera): It stopped the seizure?
DAVID: Stopped the seizure, and he is in pain and suffering.
LAH: Calms him down?
LAH: It stops the seizure.
DAVID: Stops the seizure. He's in pain and suffering, we have to do whatever it takes to save their life.
LAH (voice-over): Pharmaceutical drugs have failed the Modesto, California, family.
DAVID: Lafinamine (ph), Fenomax (ph), Clobazane (ph). He couldn't chew. He couldn't walk. He couldn't take a bath.
LAH: After a year of taking a liquid form of medical marijuana that doesn't get you high --
DAVID: I love you.
JAYDEN DAVID, TAKES MEDICAL MARIJUANA: Yes, Jayden.
LAH: -- he is playing, running, and climbing. Jayden is eating solid food. From 22 pills a day to a day to treat his epilepsy, down to a pill and a half. 44 ambulance trips before starting on legal medical marijuana. It's now zero trips in the ambulance.
DAVID: Medical marijuana should be called miracle marijuana.
LAH (on camera): Jayden is not the only one. There's no solid national statistics of how many children are using medical marijuana but where in the states where it's legal, from Oregon to Colorado, states report dozens of registered users under the age of 18, some as young as 2.
And this is your vault?
STEVE DEANGELO, EXECUTIVE DIRECTOR, HARBORSIDE HEALTH CENTER: This is our vault.
LAH: A vault full of various types of medicinal marijuana. At Harborside Health Center in Oakland, technicians sort, analyze and distill the plant. It's science here. And they believe it will help children with severe autism, epilepsy, ADHD and cancer.
DEANGELO: We have seen more than one child like Jayden who came to us with very, very serious, severe life threatening illnesses who, as soon as they started using cannabis medicine, saw a dramatic turnaround.
LAH: The medical community says, without better research, which requires federal support, most doctors oppose medical marijuana for children.
DR. SETH AMMERMAN, PEDIATRICIAN: All medications may have side effects, may have long-term consequences and unfortunately we know very little about this.
DAVID: The parent is flying by the seat of their pants in doing this.
You are the world to me
LAH: Call him crazy, call him unethical, this father heard it all except for one phrase.
DAVID: All I want is my son to say I love you, dad.
I love you. Can you say I love you?
That's all I want to hear. I mean, I'm really close.
LAH: Close to finally reaching his son.
Kyung Lah, CNN, Modesto, California.
MALVEAUX: Washington State has a first-in-history moment today with the recreational use of marijuana going in to effect. But the state is also marking another first.
(COMMERCIAL BREAK) MALVEAUX: You're looking at the first same-sex couple for a marriage license in Washington State. C.B. Peterson and Jane Abbott Lightly have been together since 1977. Washington voters approved a referendum legalizing same-sex marriage last month and the first licenses were issued this morning.
(BEGIN VIDEO CLIP)
KELLY MIDDLETON, FIRST IN LINE FOR SAME-SEX MARRIAGE LICENSE: It is something we've been waiting for, for a very long time.
UNIDENTIFIED FEMALE: Yes, beyond belief.
CHRISTOPHER SMITH, FLORIST: It is really exciting. As a gay man myself, it's been something that up until very recently I never even thought could happen.
(END VIDEO CLIP)
MALVEAUX: Voters in Maryland and Maine also approved same-sex marriages last month.
We don't know who will get the awards at the 55th Grammy ceremony in February but we do know who's got a shot at it. The Grammy nominations out. We have the names.
MALVEAUX: The Duchess of Cambridge is home after being hospitalized for acute morning sickness. You can see here Prince William escorted his wife out of the hospital in London. She spent three days there. Officials say she is not yet 12 weeks pregnant and not announcing the due date yet of the baby, but Prince Charles says he is thrilled about becoming a grandfather. Good for them.
And the nominees are -- the Black Keys, Jay-Z and Frank Ocean with six Grammy nominations. The contenders announced last night at a star- studded concert hosted by L Cool J and Taylor Swift. Among the possible picks for album of the year, the Black Keys, for "El Camino" and Frank Ocean, for "Channel Orange. Kelly Clarkston's "Stronger" is up for record of the year along with Taylor Swift's "We're Never Getting Back Together." The Grammy awards will be handed out February 10th.
NEWSROOM continues with Brooke Baldwin.
BROOKE BALDWIN, CNN ANCHOR: Hey, Suzanne. Thank you so much.