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ERIN BURNETT OUTFRONT

Slope To The Fiscal Grand Canyon; Interview with Bill Gross; Syrian Rebel Group Declared Terrorist Organization; U.S. Post Office In Peril; Interview with Congressman McKeon

Aired December 10, 2012 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, President Obama in Michigan today, selling Americans on his plan for taxes. We are 22 days away from the cliff. Does the plan add up?

And a daring rescue in Afghanistan claimed the life of an American Navy SEAL as we prepare to go to Afghanistan, we take a closer look at the American troop presence and how many Americans will stay.

And off-field violence leads to the death of two NFL players. Why the violence on the field, though, is a much more important issue. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, cliff, slope, grand canyon, I don't know, Martian cave, Jupiter like storm. Is the fiscal cliff really a fiscal slope, a downward spiral to something much worse?

The possibility of going off the cliff is now just 22 days away, and it sounds pretty ominous, but it could be a walk in the park compared with what could happen if lawmakers don't take a closer look at our bigger debt picture and soon.

Because what they're talking about is peanuts. President Obama was in Michigan today pushing his fiscal cliff plan. You know what? He made the solution sound so simple.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: when you put it all together, what you need is a package that keeps taxes where they are for middle class families, we make some tough spending cuts on things we don't need, and then we ask the wealthiest Americans to pay a slightly higher tax rate.

(END VIDEO CLIP)

BURNETT: But not so fast, Mr. President. We need a little more than you're talking about. President Obama says his plan reduces the deficit by $4 trillion over 10 years. Forget the fact it counts war savings, which shouldn't count. Let's go with the $4 trillion.

House Speaker John Boehner said his plan cuts $2.2 trillion over 10 years. But you shouldn't be comparing those two numbers. What we need to think about is this number, $16 trillion. That's how much debt this country has.

According to Bill Gross, the man who runs the biggest fund, i.e., the guy who decides to lend money to the United States and how much we could pay to borrow says, we have to cut spending or raise taxes by 11 percent of GDP over the next 10 years.

And according to Gross that's $1.6 trillion a year. That is, let's just make this clear, $1.2 trillion a year more than the president proposes. And $1.38 trillion a year more than John Boehner has offered.

Yes, peanuts. I recently spoke with Erskine Bowles, the Bowles in Simpson-Bowles, and he even agreed that Bill Gross is right.

(BEGIN VIDEO CLIP)

ERSKINE BOWLES, CO-CHAIR, NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM: Absolutely. He's 100 percent right. I don't know if 16 is the number, but you know, I would be a lot happier if at $5 trillion or $6 trillion because I think that's what we really need in order to solve this problem long term.

(END VIDEO CLIP)

BURNETT: Those are big numbers. Bill Gross will be with us in a moment, but I want to bring in John Avlon right now.

John, I mean, this is what I find so incredible about this is we get so focused on is there going to be a deal and the politics of a deal and going off the cliff and if the cliff is a slope that we're missing the bigger picture, which is that we have a bigger crisis than anybody is actually even talking about.

JOHN AVLON, CNN CONTRIBUTOR: It's a great point and it's exactly right. That's what Bowles-Simpson and people like Bill Gross have been warning about. Look, politics, is the art of the possible and in the near term, that focus on $4 trillion, $2 trillion, look how hard it is to get to.

But as you pointed out, it doesn't begin to solve the larger problem. We are going to need to get on (inaudible) to do that. We're also going to need to make some serious cuts and long term bending of the cost conserve in ways this Congress can't even contemplate.

BURNETT: All right, John Avlon, thank you. Now let's bring in Bill Gross, the founder and co-CEO of investment firm, PIMCO. Bill, great to see you. So, you know, John Boehner and the president said look, we're talking again now.

We're going to get a deal done. They're all focused on this, whatever it's going to be, $4 trillion, $2.2 trillion, somewhere in there. But as you pointed out, we could need $16 trillion, Erskine Bowles said you were absolutely right. What happens if we settle on what Washington thinks is a big win, let's call it $3 trillion?

BILL GROSS, FOUNDER, PIMCO: I think $3 trillion, $4 trillion will be a sufficient number, Erin, to sort of calm investment markets and to produce a real economy that is growth positive as opposed to growth negative.

You know, the real problem going forward is, you know, that we're going over the cliff no matter what. It just depends on whether we go over like wile coyote, which you know, go straight down or the road runner with a parachute.

And so, you know, $3 trillion to $4 trillion over 10 years, that's the road runner with a parachute. But still, that cliff is like the Grand Canyon. There are more entitlements to cut and more taxes to raise over the ensuing years.

BURNETT: And that, I guess, is the problem. I mean, all right, I prefer to be road runner with a parachute than Wiley Coyote. I'll give you that, but as you said, we still go off the cliff.

I mean, how can Washington do a deal as big as the numbers you say that we need that will prevent this country from, you know, just to give people a sense of what the outcomes could be, it could be your borrowing costs sky rocket overtime. It could be your standards of living plunges. I mean, the costs are very serious in the long term, right?

GROSS: Well, I think they are. It involved what is known as fiscal drag to economists. Basically, that means when you raise taxes and lower entitlements, lower federal spending that that reduces economic growth and it will. It just depends on how slowly or how quickly you do it.

If you do it quickly then it's a cliff. If you do it slowly then you sort of drift down as in a parachute. But you know, it seems to me in terms of the $16 trillion number as opposed to the $4 trillion, that our entitlements are so significant, Medicare, Medicaid, Social Security going forward.

Based upon the aging of the boomers, primarily, that number is so significant that at some point two or three or four years down the road, we'll be back at it in terms of cutting entitlements and raising taxes. We really have a significant Grand Canyon here.

BURNETT: So this, if we do $4 trillion, which again is very optimistic right now. That's a little band aid or a small down payment?

GROSS: Yes, I think so. There's no doubt that that will calm markets, that, you know, positive enthusiasts will look to that in terms of higher stock prices and higher economic growth in the short term.

But ultimately, you know, this drag, this fiscal drag is a significant force based upon reducing entitlements over the next 10, 15, 20 years, and we're going to have to address it at some point beyond the $4 trillion number that I think is coming.

BURNETT: All right, so we have to go four times bigger, which is one sobering take-away here, but let me ask you about something else. The American people as you know, Bill, they all say no problem, go ahead.

The majority of them, vast majority, say raise taxes on families making $250,000 or more a year. In fact, when you ask them, as George Washington University and "Politico" did today.

Whether there would be a negative economic effect from doing so, 38 percent of them said yes there will be a negative impact, 58 percent said no, no impact at all from raising taxes on the wealthy. What do you think?

GROSS: I think it's a minor impact. It depends on how you make assumptions in terms on what the wealthy will do with the money that they lose. You know, to my way of thinking, those who are making $1 million, $2 million, $5 million a year, basically have a lot of that in cash.

And are simply investing it in treasury bills and treasury bonds to the extent that you take some of that away, does it reduce economic growth? I don't think so. Does it raise interest rates? I don't think it does that either because the fed is in there with a check book. So I simply think the effect will be minimal.

BURNETT: One way to get closer to the $16 trillion, I'm not even saying that, but marginally a little bit closer to $16 trillion would be raising taxes. Bill Clinton said it at an event I was at recently, Howard Dean said it last week.

Here's the argument, tax rates need to go up, not just on other people, i.e. wealthy people, but on everyone. Here's Bill Clinton.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER U.S. PRESIDENT: I think you could tax me at 100 percent and you wouldn't balance the budget. We are all going to have to contribute to this. And if middle-class people's wages were growing up again and we had some growth in the economy, I don't think they would object to going back to the tax rates that I obtained when I was president.

(END VIDEO CLIP)

BURNETT: Do Americans need to realize that taxes are going to go up and on everyone?

GROSS: Well, I think they do, but let's be honest and faithful to an economic theory that says it's basically the lower and middle- income groups that basically spend most of the money. So if you do raise taxes on middle-income Americans, you're going to see some economic effect in terms of slower growth.

So do I disagree with Bill Clinton to some extent? Yes, I think I do. I think the bulk of the taxation has to come through capital gains taxes, has to come through dividend taxes in terms of increasing and certainly in terms of increasing the marginal income tax rate from a minimal 36 percent to a compromise 38 percent level.

BURNETT: All right, thank you very much with a proposal there of 38 percent from Bill Gross and a sobering warning that a $4 trillion cut of deficit right now would be just a small down payment on our problem.

OUTFRONT next, the American government is working closely with rebel groups in Syria, but now one of the groups is going to be designated a terrorist group with ties to al Qaeda.

Plus, the U.S. Postal Service loses $25 million every single day. Could this holiday season be the last for the USPS?

And Mexican-American singer, Jenni Rivera, confirmed to be one of those killed in a plane crash. We'll look at her final moments and her legacy, OUTFRONT.

(COMMERCIAL BREAK)

BURNETT: Our second story, OUTFRONT, Syria's al Qaeda connection. The U.S. government is declaring a key Syrian rebel group known as (inaudible), a terrorist organization with ties to al Qaeda in Iraq.

Here's what we know about this group, which the United States estimates is about 9 percent of rebel forces in Syria. We know this, the group is credited with many military successes for the rebels and they have claimed responsibility for suicide attacks in Damascus and Aleppo.

The group also includes fighters who were involved in the Iraqi insurgency. Now, as the U.S. steps up its cooperation with Syrian rebels, how significant is the move by the United States to call a crucial group of rebels a terrorist organization?

Fareed Zakaria joins me tonight, host of "FAREED ZAKARIA GPS." Fareed, I mean, first of all, the U.S. estimates this group makes up 9 percent of rebels. In a country where we don't really know who is who and what group is what, at least that's what we're told, how do we know it's about 9 percent of rebels?

FAREED ZAKARIA, HOST, CNN'S "FAREED ZAKARIA GPS": Well, I think that claim is almost certainly wrong. I think the one thing we should have learned from Iraq, from what we know about Iran's nuclear weapon capacity, from Afghanistan, is that you know, these are black boxes, we have very few people in Syria.

The idea that we could estimate 9 percent of the rebels are anyone group is ludicrous. I think we will be surprised in Syria as we've been surprised in Iraq, surprised in Afghanistan.

What is significant is we have figured out there is a group that is fighting very well. These guys are real good fighters. That it's very dangerous and this will complicate the effort to help the Syrian rebels enormously.

BURNETT: How big of an influence then is al Qaeda in the rebels? So we don't know exactly how many, but when you think about it and you hear about it, how significant is al Qaeda?

ZAKARIA: I think it's very important to understand again we don't know whether this is al Qaeda-inspired, al Qaeda-directed, or al Qaeda-inspected. Those are three different phenomena. My guess is this is al Qaeda inspired.

That is this is a local Jihadi group perhaps there's some Saudi money and Saudi volunteers, perhaps some Qatari money, but these guys are really fanatical Islamists. But they're not getting their military orders from Zawahiri.

What it does do though it makes it very difficult for the United States to give any kind of blanket support to the Syrian rebels because we're always going to be worried, well, what if the weapons get to these guys?

What if some measures we take empower these guys? We don't want these weapons to be used against an American aircraft carrier, you know, or a port or a subway five years from now.

BURNETT: And this is another thing I'm curious about because it seems that there's -- it sort of reaching a critical mass in the United States, this move to arm and help the rebels in some way. Now I could be wrong, but it feels we're hearing more and more about it.

I still don't understand because we go in and we intervene in Libya and we weren't able to procure weapons there. Now those weapons are being used in Gaza and of course, now apparently being used in Syria. So if we intervene, does it do more good than harm?

ZAKARIA: I think it's a very complicated situation. If we don't know who we are intervening for, I do think there's a potential for consequences we don't understand. You know, what's going on in Syria is -- at one level, it's a simple morality play, which is Assad and his regime are just awful.

They are brutal dictators. They have been oppressing their people. But on another level, it's very complicated. There are a lot of people who are against the government who are also bad guys.

There are a lot of people who are supporting the government. A lot of the Kurds and Christians and the Syrians in Syria are supporting the government, not because they like the government --

BURNETT: Well, and you have Assad fighting an Al-Qaeda linked group so maybe we should be helping Assad, right, I mean, according to logic.

ZAKARIA: All of which tells you we need to learn more about what's going on. We need to support the good guys. I think we should do that and can do that, but let's make sure there really are good guys. BURNETT: Right, and that brings me to the talk of chemical weapons. There's been all this talk that Syria has a lot of them, right, helped by Russia in prior years and that Assad may now use them. That's coming out of the U.S. government.

Do you believe any of that? Do we really know, I guess, when you think back to Iraq, do we really know what chemical weapons Syria has and whether Assad would use them or perhaps if they could come into the hands of one of these al Qaeda-linked groups or other rebels that could use them?

ZAKARIA: My guess is they do have some. Historically, this has always been the view. Who knows how many and how effective they are. The most important thing to remember about chemical weapons is they're not actually that effective.

So part of what -- the reason regimes like Assad and Saddam Hussein stockpile them is because it scared people. It made them think, you know, we can poison whole villages. The truth is the gas disperses very fast.

It's not very effective. So I would guess my gut is the Syrian regime will not use it. I think that President Obama's very stern warning to them probably helped in that regard. I think that while we should be cautious, it's not clear they're going to use them.

BURNETT: And a final question, Senator John McCain apparently going to get on or trying to get on the Senate Foreign Relations Committee, which would put him in the captain's seat in grilling possibly Susan Rice or who may come up for secretary of state.

A lot of conservatives have said, you know, they don't like Susan Rice. But when you look at say John Kerry versus Susan Rice, Fareed, who is the hawk and who is the dove?

ZAKARIA: I think the truth is in this administration, the president is his own chief strategist. The secretary of state implements the president's policy. Hillary Clinton has been a superb secretary of state because she has recognized that.

Policy making is done in the White House by the president. She gets to be the global ambassador at large for the United States so neither of them is going to be making policy. Barack Obama is going to be making policy.

BURNETT: All right, thanks very much, Fareed. Appreciate it as always. This Sunday, don't miss "Tough Decisions," a "FAREED ZAKARIA GPS" special where Fareed is going to talk to U.S. leaders about the tough decisions they had to make around the world. This Sunday at 8:00 and 11:00 p.m. Eastern here on CNN.

OUTFRONT next, the U.S. Postal Service, $20 million, that's how much they lose every single day. Could this be the post office's last Christmas?

And an elite Navy SEAL was killed in Afghanistan this weekend. The country will be visiting this week. Tonight, I ask the chairman of the Armed Services Committee about Afghanistan's future.

(COMMERCIAL BREAK)

BURNETT: Our third story, OUTFRONT, post office in peril, it's the season to head to the post office, right? People, I know you think it's OK to send online greeting cards. It isn't. You're supposed to send things in the mail. It always matters more than anything else.

But it's part of the scene of the season, long lines, package presents, letters to Santa, but the postal service could be in danger. The organization is losing $25 million every single day and is going to run out of cash next year.

The Senate passed the bipartisan bill to save it in April, but the House has just days to get it done so it's about to die. OUTFRONT tonight, John Avlon. All right, so like -- I made my point here, they're still very important to send real letters, but the House didn't pass the bill. That means there's no law. Why not?

AVLON: This is the oldest problem. The Senate passed the bipartisan bill. It wasn't perfect, but they got a bill done. That was back in April. Since then, crickets, nothing, nada, the House has tried to put forward its own bill, hasn't been able to pass it.

So now here we are left in the last days of the year and they're trying to cobble together a deal. Here's the problem. Partisan politics stopped it moving forward in the past. All of that ideological good, that's the good news, the bad news, two defaults hasn't woken up this Congress.

BURNETT: Well, I mean, yes, OK, they're losing $25 million a day. And the problem is Democrats and Republicans both agree on one thing. They want votes. A lot of things you have to do to save the post office involve costing a lot. They're one of the largest employers in the country. They're losing jobs.

AVLON: These are tough choices. Again, you know, the Senate was a bipartisan bill at around $20 billion in savings. It would have cut about 100,000 head count by early retirement, but it would have kept, for example, Saturday delivery, encourage entrepreneurialism. Look, the postmaster general wasn't happy with it --

BURNETT: We could get rid of Saturday delivery.

AVLON: Well, this is actually one of the big debates going on right now because the postmaster general said that he wanted to go further. That's what Darryl Issa out of this House Oversight Committee wants to go further.

And that's one of the big negotiations that's going on right now and conversations I had with folks up on the Hill. This actually might, might be part of the fiscal cliff negotiation. It's a question of how much more money could be saved by making packages happen on Saturday but not necessarily all mail delivery? It's a tough negotiation. BURNETT: And now you're adding another thing to the fiscal cliff deal, a deal that I'm pretty sure is going to be pretty bad whatever it is.

AVLON: But every little bit helps. Here's the point, you know, the post office defaulted twice in the last couple months, Erin, August, defaulted $5.5 billion for the first time. Congress did nothing, fiddled.

Now, same thing happened in September. Overall last year, they lost $15.9 billion. So something has got to be done. The question, is, can they kick the can to next year or do they get a deal done before the year end?

BURNETT: That's pretty sad, defaulting on billions and billions of dollars and we all seemed to think nothing is going to happen. One day, America, something terrible is going to happen.

All right, OUTFRONT next, just 22 days away from the fiscal cliff, the president is taking his plan on the road. But one of our guests says Mr. Obama is overplaying his hand.

And a radio prank is blamed for a suicide. Two deejays behind the hoax speak out for the first time.

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about, where we focus on our reporting from the front lines.

We begin tonight with an Australian radio station which has canceled a show responsible for a hoax targeting Prince William's pregnant wife. Just days after last Tuesday's prank call, the nurse who first answered the phone, Jacintha Saldanha, was found dead of an apparent suicide. The radio deejays who pretended to be Queen Elizabeth and Prince Charles apologized today for the prank, saying they're deeply sorry.

(BEGIN VIDEO CLIP)

MEL GREIG, DJ, AUSTRALIAN RADIO STATION 2DAYFM: There's not a minute goes by that we don't think about the family and what they must be going through, and the thought that we may have played a part in that is gut-wrenching.

(END VIDEO CLIP)

BURNETT: The radio station says the deejays will not return to air until further notice.

Iran is hoping to establish a long-term presence in the Red Sea. Right now, two Iranian warships are docked in Sudan. That's their second visit there in less than two months. Now, there's been no official word yet on how long the destroyer and helicopter carrier will stay, but Sudanese government sources tell us over the next few days, it's going to be decided if it's a long-term deal. The decision could be problematic for the United States if it turns out Iran is trying to expand its presence near the crucial Suez Canal.

It has been 494 days since the U.S. lost its top credit rating. What are we doing to try to get it back?

Well, a new report says that by 2030, China will be the largest economic power on the planet, surpassing the United States. The National Intelligence Council's Global Trends report bases this on the size of the economy, the population, military spending, and investment in technology.

Our fourth story OUTFRONT: selling a fix.

With just 22 days until the fiscal cliff kicks in and we all go sailing off. We're hearing a lot of talk about talks between the president and the House speaker. Now, apparently, these are behind closed doors because they're talking over or at or something not good at each other.

Here is President Obama in Detroit on his plan to raise taxes on families making more than $250,000 a year.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And that's a principle I won't compromise on, because I'm not going to have a situation where the wealthiest among us, including folks like me, get to keep all our tax breaks.

(END VIDEO CLIP)

BURNETT: Is the tough talk road show working for the president?

OUTFRONT tonight, Democratic strategist Ben LaBolt. He's also a former press secretary for the Obama campaign. He hopefully just had a vacation, that's why he actually looks healthy now. You're getting a little peak and tired.

And Republican strategist Terry Holt.

All right. Good to see both of you.

Terry, I want to start with you, though, because -- you know, the recent --

TERRY HOLT, REPUBLICAN STRATEGIST: Sure.

BURNETT: -- most recent poll that we have, "Washington Post"/Pew says that by a margin of about two to one, Americans say Republicans in Congress will be to blame if there's not a deal on the fiscal cliff. So, is the speaker losing the fiscal cliff P.R. battle? American people are blaming him.

HOLT: Well, the speaker's trying to have a conversation with the president about how to solve the nation's problems. And the president is out on the campaign trail. The president prefers to campaign trail to the hard and rough true leadership in Washington, D.C.

I kind of think the president may have overplayed his hand a little bit here. If he were smart, the American people would be a little more expecting of him to be in Washington to fix this before Christmas. We're all a little bit tired of this campaign drama.

You know, I was looking at those pictures today of the president out in Michigan. I thought, wait a minute, I thought the election was over.

People are going to see through this. You cannot sell them short. They'll figure it out.

BURNETT: Now, Ben, to Terry's point, we know Americans support raising taxes on people who make over $250,000. That's not very many people and most people support other people paying more taxes.

So most people support it, why is he out talking about it and not talking to John Boehner?

BEN LABOLT, DEMOCRATIC STRATEGIST: Well, you might remember there was a bit of a scuffle during the campaign when the president said that you can't change Washington from the inside. He's long believed that, and not only was he out in Michigan today, but he engaged his organization, those Obama supporters across the country. We sent out -- the campaign sent out an e-mail asking them to call their member of Congress.

The fact that the public has supported for two years now, 60 percent of Americans have supported higher rates. Yet Republicans haven't moved. But you're seeing an increasing number of Republican members of Congress dropping off and agreeing with the president that we need to raise rates, but we need to see a proposal on the table to get that done.

BURNETT: Well, I mean, both sides --

HOLT: You know, Erin --

BURNETT: The president and John Boehner have proposals on the table. Both have been non-starters for the other side.

Sorry. Terry, go ahead.

HOLT: Yes, I was going to say, the day after the election while the president was doing his victory lap, Speaker Boehner held a press conference and said, OK, great, you won the election. Congratulations. My we need to raise revenues, but hey let's do the right thing here. Let's talk about entitlement reform, let's talk about comprehensive tax reform, not so that we're just taxing the rich like the Democrats want to do, but so that we have a comprehensive approach for growing this economy, for creating jobs.

You don't do one or two things in isolation. It all fits together into a compromise that addresses a comprehensive economic need.

BURNETT: Now, Ben, one thing Terry said, this is obviously, more than just raising taxes. And the president has acknowledged that, right? He's acknowledged entitlement reform has to be a part of it.

I'm wondering on this whole tax issue, though, if you have a fear as a strategist that he's sort of going to win the battle, because he looks like he is, on taxes but lose the war. In terms of whether Americans approve or disapprove of the job the president is doing, in reducing the federal budget deficit, right, of which raising taxes is one part, 59 percent disapprove. That's almost the same number who agree with him on raising taxes on the wealthy.

LABOLT: Well, I think that the president here is the one who has laid out the package that would get us to that $4 trillion in deficit reduction.

BURNETT: You count war savings in that which is -- come on.

LABOLT: Well, the fact is that what Speaker Boehner has proposed in terms of revenue doesn't get us to where every bipartisan deficit commission has said we need. And the president is the only one who's outlined the specifics to get us to the $4 trillion deficit reduction.

What the president has been clear from the beginning that he's not going to get everything he wants. That he's willing to compromise.

And so, the speaker and other Republicans should put on the table their specifics in terms of entitlement reform and spending cuts because the only person who has put forward those specifics so far, his proposal is the president.

BURNETT: And he did in his budget, which is fair, Terry, because John Boehner had overall numbers and no breakdown.

I want to play to you what Senator Bob Corker said yesterday about what he thought John Boehner should do to get what he wants on entitlements. Here's what he said.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER (R), TENNESSEE: A lot of people are putting forth a theory -- and I actually think it has merit -- where you go ahead and give the president the 2 percent increase that he is talking about.

(END VIDEO CLIP)

BURNETT: I mean, he would be so happy, Terry, if he got that, right? That's what he said he's going to get, he's not going to bend on. What if you gave it to him and you said, in exchange, here's my list? Maybe he'd do that deal.

HOLT: I'm not sure that he's looking for a policymaker. I think he's looking for a political victory. He wants to do the dance in the end zone, you know?

And I believe at this point that negotiations that will result in something substantive, what we're going to get is a package that really nobody likes. We're going to have entitlement reform which the Democrats have to swallow. They understand that's the big chunk of the federal debt that's looming over us. And Republicans have already talked about moving revenue numbers so that we raise more money from some people over the long haul.

But let's not kid ourselves. The debt ceiling is going to have to be raised and we're not talking enough about that. At the end of the day, the president also has the debt ceiling hanging over his head. And at that point, his leverage ebbs away pretty fast.

BURNETT: And, Ben, that's a crucial question. This morning, Senator Lindsey Graham said the president will be in for a rude awakening if he wants to raise the debt ceiling after this.

So, he may get what he wants and then have another nightmare scenario with the debt ceiling which got us downgraded as a country the last time.

LABOLT: And, you know, this is a crazy political strategy for Republican because you saw just as a matter of raw politics, their approval rating sank to historic lows after you saw this brinksmanship the last time around. And you know what the implications were for the economy generally.

Terry, I don't think anybody is looking for a political victory here. The political victory already happened. This is one of the main things that the president put on the ballot. He said we have an opportunity to break the economic stalemate in Washington with one of two approaches. And the American people voted for his approach.

And so, now, this is all about getting that balanced package finalized. The president has put forward his specific proposal. He's willing to compromise.

And at this point, we're listing the support of the American people to insure that Republican members of Congress don't drag us over the fiscal cliff, which nobody wants to do.

BURNETT: All right. We'll hit pause there. Terry, since you began, Ben will end. And that is fair and square. Thanks to both.

OUTFRONT next, as we prepare to take our show on the road to Afghanistan this week, the chairman of the Armed Services Committee, Buck McKeon, is OUTFRONT.

And it's confirmed, Mexican-American singer Jenni Rivera was on a plane that went down. More on the fatal flight and her life, next.

(COMMERCIAL BREAK)

BURNETT: And we are back with tonight's "Outer Circle", where we reach out to our sources around the world. And tonight, we go to Cuba where Venezuelan President Hugo Chavez arrived today for his third cancer operation just days actually after he announced the potentially life-threatening cancer had returned. Chavez is igniting a political firestorm after saying for the first time that if he does suffer complications, his vice president, Nicolas Maduro, should be elected as Venezuela's new leader to continue his socialist movement.

Patrick Oppmann is in Havana tonight following the story and I asked about the latest.

(BEGIN VIDEO CLIP)

PATRICK OPPMANN, CNN CORRESPONDENT: Erin, Hugo Chavez has once again returned to Cuba to fight cancer. Chavez had declared himself cured of the disease before winning re-election in October. But on Saturday night, in a stunning announcement, he said he's ill and in considerable pain. For the first time, Chavez is admitting the possibility he might not survive, naming his vice president, Nicolas Maduro, to be his successor.

Maduro, though, would face election if Chavez leaves office, and he would go up against a Venezuelan opposition that is increasingly united and eager to end the era of Hugo Chavez in Venezuela -- Erin.

(EDN VIDEO CLIP)

BURNETT: Thank you very much.

And now, we go to Mexico where authorities have confirmed that 43-year-old Jenni Rivera, an American-born singer, was on board a Learjet that disintegrated on impact on Sunday. Rivera was a household name to many Mexican-Americans. She sold more than 15 million albums and she had a slew of namesake cosmetic and clothing brands and also a hit reality show on Telemundo. She also had five children.

CNN's Rafael Romo is in Mexico today, and I asked him what made Rivera beloved by so many.

(BEGIN VIDEO CLIP)

RAFAEL ROMO, CNN CORRESPONDENT: Erin, they call her diva, and for anyone who ever saw her on stage, it was easy to see why.

She sang heart-wrenching ballads that spoke to the common woman, especially Mexican-Americans.

Jenni Rivera was born in Long Beach, California, to Mexican parents. Their story is out of many immigrants of humble origins.

In an interview with CNN in Espanol in 2010, she spoke about how she sold music records at a Los Angeles flea market and how the family collected cans for the meager income they could bring in selling the metal.

Jenni Rivera sold 15 million records and won two Billboard Music Awards in a career that spanned just over a decade.

She was also a very successful businesswoman who owned several companies. In October, "People in Espanol" named Rivera on its list of the 25 most powerful his Hispanic women -- Erin.

(END VIDEO CLIP)

BURNETT: Thanks.

Our fifth story OUTFRONT: Tragedy in Afghanistan.

A daring rescue to free an American doctor who was kidnapped by the Taliban in Afghanistan has cost the life of a Navy SEAL. Petty Officer First Class Nicolas Checque was killed Saturday during a raid to free Dr. Dilip Joseph. He had been kidnapped by Taliban insurgents last Wednesday.

Now, Checque was part of SEAL Team Six, the same elite unit that took part in the raid that killed Osama bin Laden.

Pentagon correspondent Barbara Starr is out front with the latest.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): It was a brutal firefight between Navy SEALs and insurgents. The SEALs moved into Afghanistan over the weekend to rescue a kidnapped American aid worker.

By the time the firefight ended, 28-year-old Petty Officer first Class Nicholas Checque had been killed. Checque, a 10-year Navy veteran, part of the legendary SEAL Team Six, an elite counterterrorism team trained for hostage rescue.

Dilip Joseph was one of three staffers from relief organization Morning Star Development.

DR. DILIP JOSEPH, AID WORKER: We're really hoping that we can instill hope into a country that has been dealing with conflict over the past 30 years.

STARR: He and the others were kidnapped last Wednesday while returning from a visit to a rural medical clinic in eastern Kabul province. They were stopped by armed men and taken to an area about 50 miles from the Pakistan border.

Special Operations forces will take on more of the burden of combat as the U.S. moves towards withdrawing most troops in the next two years.

Seth Jones, who has advised commando units, calculates 4,000 to 5,000 Special Ops forces could be left behind.

SETH JONES, RAND CORPORATION: The rule of the Special Operations in Afghanistan will be several-fold. One is targeted strikes against insurgent leadership. Second, training Afghan nationals, security forces, both army and police. And then, third, unconventional warfare, which is training local security forces.

STARR: More attacks and perhaps more kidnappings of civilians with less American troops around. It will become even more risky to be in Afghanistan, many say.

It was a risk to get Joseph. One general, John Allen, the top commander in Afghanistan, knew he was taking and ordering the rescue when intelligence showed that Joseph was in imminent danger of injury or death.

Jones says there are several things the SEALs would have known before they went in.

JONES: You need to collect intelligence on the target to see where they're at, who is guarding it, what the terrain is like. Second, you got to look at how you're going to actually insert into that area and then you're going to look at how to get onto the target.

STARR (on camera): According to the State Department, more than three dozen foreigners have been kidnapped and held in Afghanistan at various points since 2007. It continues to be a risky place for civilians and troops alike.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

BURNETT: The death of a Navy SEAL and continuing violence in Afghanistan has a lot of people in this country asking the question as to whether Afghanistan is going to survive when the U.S. leaves or devolve into civil war, and whether the security forces in Afghanistan are actually going to take over when the United States pulls out its troops next year.

I'm going to bring in Congressman Buck McKeon, now chairman of the Armed Services Committee.

And, sir, thank you very much.

We talk about this Navy SEAL, a member of SEAL Team Six, how everyone knows that SEAL team, very brave men.

There have been more than 300 Americans killed in Afghanistan this year. The Taliban is in charge of some parts of the country. Al Qaeda is still present in some parts of the country.

Is the Afghan security force ready?

REP. HOWARD "BUCK" MCKEON (R), CALIFORNIA: I'm not sure they're totally ready yet. There are parts of the country that have been turned over to them, but it's a large country. And remember when we asked for -- when the commander general asked for troops for the surge to finish the mission in the South and then move to the Northeast, he didn't get all the troops he asked for. And they were brought home sooner than they should have been, so we didn't really get to complete -- all of that mission, really didn't get to finish the surge.

So, that left the remaining troops in jeopardy and true off the timetable. Now, the one timetable that probably is still holding is that we are going to pull all the troops out in '14. I don't know if that gives us time to totally continue or complete the mission of training of the Afghan national security forces.

And it's a large number. The last time I was there, I could see we had made a lot of progress. The time before, when I was in the south, I got to Camp Leatherneck, the Marine had just gotten there, were just building up and moving out into the desert. We couldn't go to march out because that was a Taliban capital. Their flag was flying there.

The last time I went, we were in charge. I was able to walk down the street with -- and see the merchants and see the things the Marines had done and the gains they had made. We opened a school while I was there.

So we had made lots of progress. But it's very fragile. And everybody knows we're leaving. Everybody knows the Taliban's not leaving.

BURNETT: Yes.

MCKEON: It's going to be a tough time between now and when we pull out.

BURNETT: You know, we have been doing some -- got reporting on the ground, talking to local Afghan civilians and they're really worried about civil war. I've actually heard that from many people, they think that's what's going to happen. It's going to be civil war. And it will become a safe haven again for Islamic radicals.

A quote from one, they don't trust our national army because they're not up to the job, and someone said the past 11 years will be a waste if the United States leaves.

Now, the United States isn't going to stay just for a nation building effort at this point. The country has changed.

And -- but I think the question is, is civil war and a haven for Islamic extremism a risk?

MCKEON: I think it's obviously a risk. Is it one that we want to take?

That's up to the commander in chief. He's the one at this point to make the decision. When the troops are coming home, how many we may leave behind to protect our gains and to continue the training of the Afghan forces.

He's supposed to make that decision and announce it in the next couple weeks. I'm waiting to see what his plans are.

BURNETT: And, you know, you're going to be part of making the decision as to whether that's OK or not OK. How many is enough? How many troops is enough, do you think?

MCKEON: Depends on what mission they assign them. We have heard Secretary Panetta, I think, said there would be a three-part mission. That they would continue to fight against counterterrorism, they would continue to train the Afghan security forces, and they would have to have enough of our people there to protect ourselves against further attacks.

Some of these sensational attacks continue as we speak when we have 68,000 troops there.

BURNETT: That's right.

MCKEON: If we're drawn down to 20,000, 10,000, whatever number the president comes up with, I think we're going to have to look carefully. Is that enough to carry out the mission?

BURNETT: And Hamid Karzai has blamed the United States for the insecurity in Afghanistan. He said he won't enter into a security agreement, I'll quote him, "while the United States continues to violate Afghan sovereignty and Afghan loss."

Can we do business with President Karzai?

MCKEON: It's pretty tough, isn't it?

When you figure all of the sacrifice we made to try to help that country, to try to let them have the ability to stand on their own feet and decide their own destiny, and then you get that kind of response. It's a tough -- it's a tough situation.

We pulled out all of the troops from Iraq, and I don't know that that was a wise thing to do. And it's not like everybody comes home now. We have 4,000 contractors. We're still paying, but we don't have the military there in charge to look after our own people.

So these are -- these are tough decisions. I know, given our financial situation, we're having to pull back in a lot of places around the world. These cuts in the military are going to have tremendous impact.

BURNETT: All right, thank you very much. We appreciate your taking the time.

MCKEON: Travel safely.

BURNETT: All right. Thank you.

And on a programming note, this Thursday, I will be live in Afghanistan where we focus on the future of Afghanistan.

And next, off-field violence led to the death of two NFL players. Why violence on the field is more important issue.

(COMMERCIAL BREAK) BURNETT: The National Football League has been hit hard this week, with two of its players involved in violent deaths. Last week, Kansas City Chiefs linebacker Jovan Belcher shot and killed his girlfriend before turning the gun on himself. And two days ago, Cowboys player Josh Brent was charged with manslaughter after a car crash that killed his teammate Jerry Brown. That was a DUI.

And while the recent off-field violence was shocking, it's the violence on the field that is perhaps more pressing issue for the league, because while there is criticism of the violent and reckless behavior away from the game, let's just be honest, America -- we celebrate it on the field. That's what football is all about.

And as players have become bigger and faster than ever before, we have seen a rise in injuries, particularly concussions. These injuries, some of which have caused lives and, frankly, the minds of players, literally, have prompted many to say the game has to change. It has to be a lot less dangerous for players.

And so far, those suggestions have been met with resistance that mot mostly come down to money. The NFL right now is enjoying its highest ratings ever. And the league brings in more than $9 billion a year.

The question is, would a less violent game be less exciting -- meaning, fewer viewers and less money? Or would a less dangerous game actually save the NFL from extinction? Did you know the NFL is facing thousands of lawsuits from former players who suffered concussions and other traumas while playing? And while it may have been cost effective for the league to pay out settlements, it's going to get increasingly expensive as more and more players are filing lawsuits.

So, some argue the NFL can't survive if they don't play more violent football. But the truth is, right now, the numbers show, Americans award the violence and without it, no matter how shocked we seem to be about violence off the field, when it happens on the field, we like it and the league won't survive without it.

Thanks so much for joining us.

"A.C. 360" starts right now.