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STARTING POINT WITH SOLEDAD O'BRIEN

Fiscal Cliff Countdown: 22 Days; Interview with Congresswoman Judy Chu of California; "Scholar Strong and Rockaway Resilient"

Aired December 10, 2012 - 08:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Our STARTING POINT this morning: meeting face to face. Finally, President Obama goes behind closed doors with House Speaker John Boehner. They're trying to hash out a deal before we go over the fiscal cliff. Can they come to an agreement?

Those Australian deejays who pranked the hospital where Duchess Catherine was staying now speaking out for the first time after the apparent suicide of a nurse who took their call. They had an emotional message straight ahead.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Cheap colleges charge tuition based on your major. One state is now considering doing just that, but is it fair?

JOHN BERMAN, CNN ANCHOR, "EARLY START": A fallen hero. A Navy SEAL dies while helping rescue an American doctor held hostage by kidnappers. Details on this gripping rescue straight ahead.

O'BRIEN: Plus, we talk about this morning, California Congresswoman Judy Chu will join us. Congressmembers Connie and Mary Bono Mack, politics to the Macks. Get it? They'll be talking with us. And singer Adam Lambert is our guest.

It's Monday, December 10th, and STARTING POINT begins right now.

(MUSIC PLAYING)

O'BRIEN: You can come in, John. You just have to dance in, because we've got the music going.

Our panelists this morning -- no, have a seat. Our panelists this morning, Congressman Joseph Crowley is with us. He's a Democrat from the state of New York -- the great state of New York. Margaret Hoover is with us, CNN political contributor. Ron Brownstein is the editorial director of "The National Journal." John Berman has made his way to his seat.

BERMAN: No music.

O'BRIEN: No music. Yes, that is your music.

(CROSSTALK)

MARGARET HOOVER, CNN POLITICAL CONTRIBUTOR: I heard you singing it earlier.

O'BRIEN: You don't like Adam Lambert, his new theme song? I kind of like that.

Our STARTING POINT this morning is the President and the House Speaker finally getting face to face to discuss the fiscal cliff.

Until yesterday's unscheduled meeting at the White House, John Boehner and President Obama had gone 23 days without sitting down to discuss the fiscal cliff. It's a significant development because in 22 days we go off over the cliff -- although some people have described it as a gentle slide down a little slippy mountain. But that would be a time when we face severe tax hikes and severe spending cuts unless a compromise can be reached.

Congress is scheduled to take a break for the holidays later this week. After yesterday's White House meeting, a spokesman for the President said, quote, "The lines of communication remain open," which isn't saying much really.

Dan Lothian is at the White House this morning. So, Dan, what the heck does that mean? The lines of communication remain open -- that sounds like nothing.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, remember, it was about a week ago that we were talking about when aides up on the Hill were telling us that nothing was happening behind the scenes, that no one was talking. You could see this or you could say that this was some progress because the lines of communication are open.

I've been communicating this morning with a senior administration official here to get a sense of whether or not that will continue, whether they will either meet face to face again, or whether they will have some kind of discussion over the phone, and I was told by this official that they would not be previewing anything. I also tried to get more information about this meeting and asked whether we would hear more later in the day and was told highly unlikely that that will happen.

But, nonetheless, one of the things that we have noticed is that both the President and Speaker Boehner are on the same page when it comes to the press releases that they put out. We have never really seen this, where the White House and Speaker Boehner put out identical releases. Essentially very short, where they said, you know, that they met at the White House, discussed the fiscal cliff, they're not going to read out any of the details of the conversation. And then as you pointed out, "the lines of communication remain open." So, again, some people see this as positive.

One other positive indicator is some Republicans are starting to warm up to this idea of raising tax rates for upper income Americans. One of those lawmakers, Senator Corker of Tennessee. Take a listen to what he had to say about that.

(BEGIN VIDEO CLIP) SEN. BOB CORKER (R), TENNESSEE: There is a growing group of folks that are looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end. 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 he's talking about, the rate increase on the top 2 percent, and all of a sudden, the shift goes back to entitlements.

(END VIDEO CLIP)

LOTHIAN: So, again, they think that Democrats and the President need to embrace entitlements, but some indication here that there could be compromise. But, keep in mind, Senator Corker, he's a senator. The problem really is with House Republicans.

So we will be watching today if any of those House Republicans will be warming up to this idea as well, Soledad.

O'BRIEN: All right. Dan Lothian for us.

That's unusual. Identical releases. That gives me hope because it means they're on the same page, even if it's on the same page in telling the American people nothing, right?

REP. JOSEPH CROWLEY (D), NEW YORK: I don't think those releases said much at all, quite frankly, which is probably a good sign. It means they're under a mutual agreement not to really talk about this until they work things out.

HOOVER: I mean, given their history of cooperation, which has been pretty bad, the President and John Boehner together, this gives me -- you know, I want to be careful, but cautious optimism.

RON BROWNSTEIN, EDITORIAL DIRECTOR, "THE NATIONAL JOURNAL": They came within range of a deal in the summer of 2011, a big budget deal, that there is a deal to be had. The real question is whether you could do it before or after the tax cuts expire.

BERMAN: The deal is going to be between these two people.

BROWNSTEIN: Yes.

CROWLEY: Both in this Congress and the new Congress.

BROWNSTEIN: And Corker said they have limited cards. They have no cards on the rate. The rate is going up at the end of the year, and that's the reality.

O'BRIEN: Right. And the acquiescing is connected to that reality very much.

Judy Chu is a Congresswoman from California. She's a chair of the Congressional Asian Pacific American Caucus, a member of the Small Business Committee. It's nice to have you with us.

What do you think the lines of communication remain open -- which sounds like a whole lot of nothing -- what do you think that means specifically? Does that mean we're close to a deal?

REP. JUDY CHU (D), CALIFORNIA: Well, I was encouraged to see the meeting between Speaker Boehner and President Obama. I really feel a deal has to be made. Look, by the end of the year, either Republicans have to come together with Democrats and have a deal, or else the tax cuts expire. And who doesn't believe that on January 3rd Republicans would not come back and extend the tax increases that would affect 98 percent of Americans in this country.

O'BRIEN: So, "The Wall Street Journal" has an editorial. I think it's kind of an interesting editorial, and I'll read a chunk of it.

"It's a shame that Republicans are playing into Mr. Obama's hands," goes the editorial. "Mr. Obama isn't going to blink on the budget if he thinks Republicans are going to blink first. And so far, the emerging GOP position seems to be to surrender on taxes first and hope Mr. Obama will have mercy on them later on entitlements. But what is the evidence in the last four years or even since the election that Mr. Obama won't pocket that victory and then refuse to offer any but token changes on entitlements."

That's kind of an interesting perspective I think that they had.

BROWNSTEIN: A reversal of what they wrote a few weeks ago --

O'BRIEN: Yes, exactly.

BROWNSTEIN: -- when they said that the Republicans have to accept the tax rates were going up, and it would be a victory to keep them from going up as much as they might have otherwise.

O'BRIEN: Do you think that "The Wall Street Journal" editorial board has a point, which is, if you -- if you take this deal now -- that's been the hesitation. The problem is you have no leverage. If you take the deal now, you really lose everything in being able to negotiate about spending cuts, right?

CHU: Well, I think that a deal is to be made that would benefit the people if it were done earlier. And the incentive is knowing that the scenario that "The Wall Street Journal" put forth could take place. We need a discussion right now, and we need to have a discussion where we could have sensible solutions with regard to the safety net programs as well as the tax cuts.

O'BRIEN: What's on the table for the Democrats?

CROWLEY: I think what Judy is saying is very true. We're going to get to this point anyway. It's just a question of when and how much damage will be done between now and then? If we wait until next year, what impact will that have on the markets? What impact will that have on the economy overall?

And, you know, really, quite frankly, if these tax cuts expire for everyone, it means the middle class will see an enormous tax increase upwards of $2,200 per family on average. And that's unacceptable either. So, I do think that -- my sense is that, having been around for 14 years, that we will get to some point of an agreement. The real question will be whether John Boehner will rely on Democratic votes to get this passed.

O'BRIEN: So I guess the question is -- and everybody would agree on the tax thing. Taxing the middle class, there's nobody who's standing up and saying, yes, taxes should go up on the middle class. Let's put that in one category.

The next category, which "The Wall Street Journal" points out, is the spending issue. What gets cut? If we have a spending deficit of $1.3 trillions, right? We're over on our budget $1.3 trillion. What's going to get -- what aggressively will Democrats bring to the table for cuts realistically once the tax issue is passed?

CHU: Well, I can think of something that should have been done a while ago, which is that there should be a change to Medicare in which we can actually negotiate for drug prices. After all, we do it for Medicaid. Why can't we do it for Medicare? That would be a big savings to the Medicare program.

O'BRIEN: Big savings to that program, not a ton of money, though, to knock down your $1.3 trillion debt.

Margaret?

HOOVER: Helpful though that you're hearing Democrats talk about, you know, are there ways of adjusting these entitlement programs? You're talking about Medicare eligibility, negotiating with drug companies. That's honestly going to come up either now or later -- either in the debt ceiling negotiations in February or now. So, better to take care of it now rather than have another fight when you're trying to do immigration in the New York.

O'BRIEN: Congresswoman Judy Chu, my apologies. Nice to have you with us. We always appreciate when you come to talk with us. Thank you.

CHU: Thank you.

O'BRIEN: At the bottom of the hour, we're going to be talking with Republican Congress members, Connie and Mary Bono Mack. We like to call it the politics to the Macks, get it? That's going to be ahead this morning.

First, though, a look at the day's top stories and John has got that.

BERMAN: Thanks, Soledad.

You know, we may learn as early as today the identity of the elite Navy SEAL who died rescuing an American doctor abducted and held hostage in Afghanistan. We do know he was a member of SEAL Team Six. That's the same group that took down Osama bin Laden. We do not know if he was part of that raid. Pentagon correspondent Barbara Starr will have the latest on this story in the next half hour. Fans of banda music are mourning the death of Mexican-American superstar Jenni Rivera. Her Learjet crashed early Sunday morning in the northern state of Nuevo Leon while en route from Monterrey, Mexico, to an airport Mexico City. Singer Gloria Estefan took to Twitter her condolences. Estefan tweeted, "Our deepest sympathy to the family and fans of Jenni Rivera and those that accompanied her on what was to be her last voyage. Rest in peace."

Right now, some live pictures of European leaders receiving a Nobel Peace Prize. That's happening in Oslo, in Norway. In announcing the award, the Nobel committee credited E.U. leaders with helping turn military rivals into political and economic partners.

I do not believe that's E.U. leaders singing right now. Or else they'd be up for all kinds of awards, not just the Peace Prize. But I do believe that's the ceremony where they're getting the award. Very well.

Moving on now, a powerful winter storm packing high winds and heavy snow is pounding the Upper Midwest and Northern Plains this morning. The worst of it is hitting eastern South Dakota and southern Minnesota. They are getting up to 16 inches of snow in the hardest hit areas. Dozens of flights have been cancelled, and people being urged to stay off the roads, probably a good idea.

After taking a lot of heat for a hateful rap against U.S. soldiers, the Korean pop star Psy, you know him as the man with the viral hit "Gangnam Style", which is the most watched video in the history of planet Earth, and YouTube, he was spotted shaking hands with President Obama over the weekend to perform at a White House Christmas charity even this weekend.

Psy apologized after a video surfaced of him taking part in a protest concert against the U.S. that happened a decade ago. In that concert, he rapped about slowly and painfully killing U.S. military members and their families. Again, that was a protest concert a decade ago in Korea.

O'BRIEN: Surprising, huh?

BROWNSTEIN: If you had to pick a year to give the Nobel Peace Prize to the E.U., would you pick this year?

O'BRIEN: No, this would not be the year.

BROWNSTEIN: Has this been their finest hour? They've had great moments. The past year has not been the best.

O'BRIEN: No, maybe wait until next year. Not this year, I agree.

Still ahead on STARTING POINT, it took seven years to build up scholars academy and only minutes for Superstorm Sandy to destroy it. We'll take a look at a school trying to recover and rebuild. That's up next.

You're STARTING POINT. Short break, and we're back in just a moment. (COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody.

Last week, Poppy Harlow was with us to tell us the story of Ryan Panetta, eighth grade student who lost his home to Hurricane Sandy. Well, Ryan went to a school called Scholars Academy, one of 56 in New York, still closed because of the damage to Superstorm Sandy. Poppy Harlow has his story. Take a look.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNNMONEY.COM (voice-over): You can still smell the destruction Sandy wrought at Scholar's Academy.

BRIAN O'CONNELL, PRINCIPAL, SCHOLARS ACADEMY: You still get the little bit of the fish tank smell in here.

HARLOW: The New York public school is wedged between the Atlantic Ocean, Jamaica Bay, and a sewage treatment plant.

O'CONNELL: Right about here, you start to see water first come under the door.

HARLOW: When Sandy hit, it all gushed in. Surveillance cameras captured the ocean pouring into the basement and climbing the stairs of principal Brian O'Connell's beloved school.

O'CONNELL: About a half foot and a half of sewage and water throughout the first floor of the building, which houses our eighth grade classrooms, our two art rooms. our supplies took a big hit. Our three technology rooms, our musical technology rooms.

HARLOW: Devastated in minutes. He had spent seven years converting a low performing school into this "A" rated academy.

O'CONNELL: This used to be our band room.

HARLOW (on-camera): And if you look down here, I mean, you're already seeing mold growing.

(voice-over): Scholars is one of hundreds of New York schools damaged by Superstorm Sandy. Gone are the plays in this auditorium.

(CHILDREN SINGING)

O'CONNELL: This is our grand piano, or was our grand piano. These were brand new curtains that we fought for years to get. And, they're still wet.

HARLOW: The Sea Wolves marching band and the winning teams silent for now. The instruments and uniforms flooded in sewage. The gym now a construction zone.

O'CONNELL: Hey, guys, thank you for your hard work.

HARLOW: The school's 1,100 students are being bussed to temporary schools like P.S. 13.

SABRINA FLEMING, PRINCIPAL, P.S. 13: We have students on the stage. They have the conference rooms, everything. We're using every single space in the room. We had little nooks. They're in nooks everywhere.

HARLOW: Honor student Ryan Panetta lost his home to Sandy and his school. He told us what Scholars means to him.

RYAN PANETTA, 8TH GRADER, SCHOLAR'S ACADEMY: It was just fun to be there, like, made kids actually like want to learn.

HARLOW: Fred Dawo is working to fix the school where his father worked and where he studied. He dreams his son will go there one day, too.

FRED DAWO, SCHOLARS' ACADEMY: It's the best high school on the peninsula, you know? They have to have it for the kids.

HARLOW: That's exactly the kind of place O'Connell hopes to rebuild.

O'CONNELL: We keep saying "Scholars strong and Rockaway resilient". It's starting to sound cliche, we're using it to so much, but it's the reality.

They're just so on task, so attentive, so kind, and they're being so patient.

(END VIDEOTAPE)

HARLOW (on-camera): These are, indeed, resilient kids. You know, about 50 percent of the students at the school lost their home or had their home very damaged to Sandy. About 30 percent of the teachers there also had damage to their home from the storm. They're estimating the repairs will cost somewhere in the neighborhood of half a million dollars. And what really troubles me is that when we were there, we found out that this school was also looted.

So, after the storm, iPads, iMacs, all these things they built up were also taken. A lot of people have been asking how they can help the Panetta family or the school. So, for the school, you can go to scholarsnyc.com/rebuild. We're going to put it on your screen. Again, scholarsnyc.com/rebuild. And also, for the Panetta Family, if you want to donate to them, you can go to CNN.com/Impact.

O'BRIEN: Great stories. Really heartbreaking. Wonderful work. Thanks. Appreciate it.

HARLOW: Sure.

O'BRIEN: All right. Still ahead on STARTING POINT, those radio deejays whose prank phone call seemed to spark international fury are now speaking out. Do they deserve the global outrage they're getting in the wake of an apparent suicide? Our "Tough Call" straight ahead.

(COMMERCIAL BREAK) O'BRIEN: Welcome back. We start with our "Tough Call" this morning. The Aussie deejays that pulled the royal prank on the London hospital during the duchess of Cambridge's stay are now talking. Their show has been shut down after Jacintha Saldano, the nurse who transferred the call to the ward, apparently, committed suicide.

The deejays now say they expected their prank call to be disconnected. They never expected this outcome. Here's what they said.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

O'BRIEN: So, Saldana, who had two kids, was duped into believing the queen was on the phone asking to speak to the duchess. The Duke and Duchess of Cambridge are said to be deeply saddened about the nurse's death. I think there's a lot of questions in this that still need to be answered, right?

HOOVER: Right. Well, first, you know, mental illness is a very serious thing. When people take their own lives, this shows a degree of mental illness and instability, that it's one thing may be that trigger, but isn't the sole cause of the depression. So, if these people made this call, clearly, it's not funny. I agree with John Berman, saying, well, Aussies aren't that funny anyway.

O'BRIEN: You know my dad's Australian, right?

(LAUGHTER)

(CROSSTALK)

HOOVER: Besides your father.

(CROSSTALK)

O'BRIEN: People don't always kill themselves because they have mental illness, right? People can be bullied into taking their own lives. We certainly see that in stories with young kids. I just think that there's a lot of questions about what happened.

BROWNSTEIN: They said on the tape that they never expected the call to go through, but they did air the tape, right? They did play it. They were not so horrified that it went through that they kind of, like, buried it in the drawer.

CROWLEY: I don't know if they were live or not during that time, too. But I do think anything that relates to the royal family in some way or another tends to get blown up to begin with. In this particular case, it's a tragedy. We don't know what was going on in her life as well that this phone call triggered this response in some way. But the pressure, I think, of you know, maybe in some way giving out information about the royal family can be --

O'BRIEN: She actually transferred the call that gave out the information.

CROWLEY: Facilitated it in some way.

(CROSSTALK)

O'BRIEN: Yes. No, I would imagine that everybody knew who had kind of let that happened, and there was a lot of scrutiny, but I still feel like there's so many questions. They're doing an autopsy, I think, as well. So, maybe we'll learn more, but that's a sad story. She was a mom. She had a couple of kids. That's sad.

Still ahead this morning on STARTING POINT, President Obama and Speaker Boehner meeting behind closed doors. They're trying to work out a deal on the fiscal cliff. Does this mean an agreement could be on the way? We're going to talk to Congress members Connie and Mary Bono-Mack. They'll weigh in with our politics to the max.

And NASA finally explaining what those lights over Texas were. Is it worthy of "The X-Files"?

CROWLEY: I love that reference.

(LAUGHTER)

O'BRIEN: You're watching STARTING POINT. We're back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Good morning. Welcome, everybody. You're watching STARTING POINT. In just a few moments, we're going to be talking with Florida Congressman Connie Mack, California Congresswoman Mary Bono-Mack, about the fiscal cliff, the plans after Congress, and much more.

First though, we want to update you on a story about SEAL Team Six. A member was killed during a daring rescue mission, trying to free an American doctor who've been abducted in Afghanistan. Our Pentagon correspondent is Barbara Starr, and she's been following some of those developments. What do we know, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, good morning, Soledad. A risky mission to rescue an American hostage in Afghanistan, Dr. Dilip Joseph is free, but one U.S. Navy SEAL lost his life in this mission over the weekend.