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Report on Benghazi Attack Released; Fiscal Cliff Negotiations Continue; Interview with Representative Chris Van Hollen; More Victims of Sandy Hook School Shooting Buried

Aired December 19, 2012 - 07:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Our STARTING POINT this morning, systemic failures. A new review into the attack on the U.S. consulate in Benghazi shows inadequate security and management problems at the state department. Four Americans were killed that day. So, what changes now?

And a teacher who tried to save her students and three first graders will be buried in Newtown today as President Obama prepares to tackle gun control with a new announcement.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Gun sales up, gun stocks way down. More investors turning away from them in the aftermath of the Newtown shootings. It is a sign there is growing support, maybe, for stricter gun laws.

JOHN BERMAN, CNN ANCHOR, "EARLY START": A huge winter storm hits the middle part of the country, then heads east. We're talking snow, we're talking big winds. We're going to track the storm for you, coming up.

O'BRIEN: Our guests this morning include the Maryland Congressman Chris Van Hollen; an exclusive interview with the Florida Governor Rick Scott; CNN International host, Christiane Amanpour. Oklahoma Congressman Tom Cole will join us; South Carolina Congressman but newly named Senator Tim Scott will be our guest; and the actor Brad Garrett is going to join us.

It's Wednesday, December 19th, and STARTING POINT begins right now.

Welcome back, everybody. Our STARTING POINT this morning is the State Department now blasted for systemic failures that led to the deadly September 11th attack on the U.S. consulate in Benghazi. An independent review board determining that security at the facility was grossly inadequate, that leaders in Washington ignored repeated requests to add personnel there, and that after the tragedy that claimed four American lives, there was a lack of transparency, responsiveness, and leadership at the senior levels in Libya and in Washington, D.C.

Our foreign affairs reporter Elise Labbot is live in Washington this morning. So what happens next after this report?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: Well, Soledad, the panel made about 29 recommendations for the State Department to get working on. Let me go over a few of them quickly. First of them is to strengthen security personnel for the high-threat post. One problem, the consulate relied on temporary, inexperienced staff and local militias not up to the task. They called for tighter securities at facilities and upgrades, a review of fire safety procedures. Smoke inhalation killed ambassador Stevens and Sean smith.

And in-depth checks of the threat environment, a big criticism here, the State Department failed to recognize the deteriorating security situation, even in the face of other attacks leading up to 9/11. And congressional support for resources, shrinking budgets for security was cited here as a major problem.

Secretary of state Hillary Clinton sent a letter to Congress with the report, saying the department will do its part to implement some of these recommendations and is already working on them. Congress has to support them, Soledad.

O'BRIEN: Lots of questions in the wake of this horrible thing that there was a cover-up, and people pointing different fingers at different people, but looking at the White House specifically. Does the report go into that at all?

LABOTT: Not really at all. I mean, basically I think one of the things that happened, there has been so much politicization of this attack and these so-called talking points and Ambassador Susan Rice and whether she said there was a protest or not. The report found no protest leading up to the attack, but it really kind of is the first kind of sober look at what happened, the breakdowns in security and intelligence that led to an attack, and it goes through in excruciating detail what happened that night, but really nothing about the aftermath and the politicization of it.

O'BRIEN: So there will be a hearing now. What happens then?

LABOTT: Well, closed door briefings start today, classified briefings by Ambassador Tom Pickering and Admiral Mike Mullen who led the report, they will have a briefing with members of Congress about the classified findings. And then tomorrow, Secretary of State Clinton's deputies, Secretary Bill burns will testify in her stead, she is out for a few weeks because of illness. But I think they will get very tough questions about the poor leadership that some of these bureaus at the State Department were exercising.

O'BRIEN: It looks ridiculous, I mean, awful, and terrible, terrible fallout from that. Elise Labott for this morning, thanks, appreciate that.

Let's turn back to the tragedy in Newtown, Connecticut. Four more funerals scheduled today. Vicky Soto, a teacher who was by many considered to be a hero in protecting her students will be laid to rest, and three Sandy Hook children, Daniel Barden, Caroline Previdi, and Charlotte Bacon will all be buried today. Most of the schools in Newtown are reopen for the first time since the shooting. We were talking about that yesterday. But Sandy Hook Elementary School students will not return until after winter break. They were talking about bringing them back, and it's not possible to do. Many parents supported that as well. They will be moving when they open the school to a completely different area, different school. Sandra Endo has that for us this morning. Sandra, good morning.

SANDRA ENDO, CNN CORRESPONDENT: Good morning, Soledad. A lot of students and parents we spoke to say the first day of school was anything but a regular day despite the goal no make sure these students in Newtown return to a sense of normalcy. A lot of parents say there were somber moments in the classrooms yesterday, as well as emotions running high.

And a lot of kids said police officers, grief counselors and comfort dogs to help kids adjust. They say that most of the day was spent by faculty talking to the kids about what happened and also dealing with their feelings.

Of course, again, the grief is just gripping this community. Four more funerals today, three first graders and one heroic teacher will be laid to rest. As you mentioned, six-year-old Caroline Preividi, six-year-old Charlotte Bacon, seven-year-old Daniel Barden, 27-year- old teacher Vickie Soto will be laid to rest.

And later tonight there will be a tribute to Newtown by a neighboring community. Neighboring residents will be coming together with elected officials, they say, in honor of the victims of this tragedy, and they say it will be an uplifting event to try and raise the spirits of this town. Soledad>

O'BRIEN: Sandra Endo for us, thank you, Sandra. I don't know how people bury children. How do you bury a six-year-old, seven-year-old? It breaks your heart.

The tragedy has the White House taking some of its first steps toward tougher gun laws, and it comes as the NRA is speaking out for the first time since the tragedy. Dan Lothian is at the White House this morning. Let's start with the White House before we get to what the NRA is saying. What's the latest there?

DAN LOTHIAN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, the latest development is later this morning, the president will announce he's tapping Vice President Biden to head up an interagency effort to try and come up with policies in order to address gun violence. The president will be making announcement in the White House briefing room. He will be joined by Vice President Biden. We are told by White House aides that this will be more about the process rather than laying out any policies.

But nonetheless this comes one day after the White House started getting a bit more specific about what the president would support, such as Senator Feinstein's effort to reinstate that ban on assault weapons, also measures that would address the issue of mental health. All of this coming as the White House has been getting a lot more pressure to come up with some action points in the wake of the massive shooting.

O'BRIEN: It seems to me that the NRA is also feeling the pressure to come up with some action points in the wake of the shooting as well. Haven't been clear on what they will do. But they have promised an announcement, right?

LOTHIAN: That's right. First of all, they have been relatively silent throughout the debate and came out with a statement yesterday, saying their membership was shocked and horrified by what took place, and they are also planning this press conference, which will take place on Friday. They are calling this a major press conference, so we'll wait to find out what the details are as they roll out what potentially they could add to this debate to prevent another mass shooting.

O'BRIEN: Dan Lothian for us this morning, thank you. Appreciate the update.

John Berman with a look at stories making news today. Good morning.

BERMAN: Good morning. We have some weather to worry about right now. Holiday travelers, beware. A massive winter storm from Colorado to upper great lakes, expected to cause dangerous blizzard or near- blizzard conditions. It's also cold and stormy in the northwest.


O'BRIEN: It's just 13 days now until we reach the fiscal cliff. And while there are some signs President Obama and House Speaker John Boehner inching closer to a deal, the speaker is attempting something of an end run around the White House. He's calling it plan b. He's trying to get the Republican-controlled house to pass his plan for tax hikes on families that make $1 million and up it will also add spending cuts to military and domestic programs. The White House rejected this quickly. The president's proposal calls for tax hikes on families earning $400,000 a year and higher. That's a change for him, up from $250,000. The president is calling for slashing $930 billion in spending.

A new Ground Zero health study finds that rescue and recovery workers that labored in the World Trade Center at 9/11 do have a higher risk of prostate and think reside cancers and multiple myeloma, which is a blood cancer. There is no increase in risks in residents near the site. The study was extensive, looking at nearly 56,000 people from 2003 to 2008.

The woman at the center of the sex scandal that brought down CIA director David Petraeus will not face cyber-stalking charges. Paula Broadwell got the news from the feds yesterday. The FBI learned that Petraeus' affair with road well after finding out she sent harassing e-mails to Tampa socialite Jill Kelley warning her to stay away from him. That story feels like so long ago.

O'BRIEN: It sure does.

Let's get to Christine with an update on what's happening businesswise.

ROMANS: Yes, minding your business. Gun sales, you guys, are up, but gun stocks are down. Shares of Smith and Wesson are down 19 percent, and Stern Rugger and company down 15 percent in the same period. Even the retailer Cabela, which sells guns, also down. Look at the stocks from the beginning of the year. Smith and Wesson up 78 percent, Stern and Rugger up 28 percent. The fastest part of the sales? The military style weapons and Bushmaster, maker of the ar-15, a quarter billion in profit for the company last year. So gun sales up, gun stocks are down, investors taking a real hard look at the industry and wondering if there is any new restrictions that could hurt those very rich profit margins.

In markets U.S. stock futures up. A big rally yesterday. The Dow was up triple digits. The Dow is now on track for one of its best years ever. Washington inching closer to a solution to the fiscal cliff. Fitch warns this morning it could downgrade America's credit rating if the fiscal cliff, Soledad, is not resolved. It says the biggest risk to the world economy is the fiscal cliff.

O'BRIEN: I'm not going to say what I was going to say about my fine elected leaders in Washington. They need to get their act together and pronto.

O'BRIEN: Still ahead, we're going to talk about the president and raising taxes on people making $250,000 or more. Remember that was originally what was on the table. The number up to $400,000, maybe to make a deal on the fiscal cliff, but it's not what he campaigned on. We'll talk to Congress Chris Van Hollen, a member of the budget committee, coming up next.

Then, her six-year-old son was inside the school when a gunman started firing on children. We'll talk to a woman whose best friend's son didn't survive. He was a playmate of her son. We'll tell you what happened ahead.


O'BRIEN: Welcome back, everybody. With the nation's attention focused elsewhere the past few days, you should know that our country's skid towards the fiscal cliff, if you haven't been paying attention, it has not stopped. Speaker John Boehner offering a plan b that would raise taxes on people making more than $1 million. The president raised his threshold from incomes of $250,000 to incomes of $400,000. We want to get this morning to Congressman Chris Van Hollen, a Democrat from the state of Maryland. He is also ranking member of the House budget committee. It's nice to see you, thank you for talking with us.

REP. CHRIS VAN HOLLEN, (D) MARYLAND: Soledad, good to see you.

O'BRIEN: Thank you. So there are two things I want to talk about today. There is the $400,000 number, an increase of what the president had on the table and I want to talk about the chained CPI. Walk me through in layman's terms. What is chained CPI?

VAN HOLLEN: Chained CPI is a change in the way you calculate the cost of living index for people on Social Security. There are lots of economists who say that it's not currently an accurate measure and they have proposed going to chained CPI which takes into account when the price of beef goes up, people may switch to chicken. In technical terms, that's what it is, Soledad. It would mean people on Social Security get less of an increase as a result of this each year. And it has a particularly bad effect on people as they get older on Social Security, which is why I have serious reservations about this proposal.

At the very least, we need to correct these kinds of effects it has on low-income people. But it's a sign that the president is willing to accept some of the demands from House Republicans. Again, I don't like it, I'm reserving judgment on the final package, but this was one of the demands that Speaker Boehner made.

O'BRIEN: People have said Social Security would not be on the table. So it's kind of creative math in my estimation, but it is changing Social Security. It looks like somebody who is 65-year-old woman would over time, by age 90, lose eight percent of her benefits. So she is losing money from Social Security benefits. It can't be read any other way than that, correct?

VAN HOLLEN: That's right. It's a reduction in the currently projected benefit would be. And as you indicated, it gets especially hurtful for very old people, which is why it would be absolutely necessary to include a bump-up to correct for that effect for people who are older if you decided to go down this road at all, which is one that, again, Republicans have demanded of the president.

O'BRIEN: And if the president caves on it, then the president will be putting on the table, right? Not necessarily demanded of the president. The president is coming up with this part of the plan.

VAN HOLLEN: As you indicated in the lead in, Soledad, what we're trying to do is avoid the fiscal cliff. And the president is bending over backward to do it. He obviously adjusted his number in terms of taxes from 250,000 and up to $400,000 and up. This is a chained CPI is something Speaker Boehner and the Republicans demanded. So everybody says let's avoid going over the fiscal cliff. This is one of the demands that the Republicans have made. I don't like it. I don't think the president prefers it. I know he doesn't. But everyone is trying to find a way to get to it except our Republican colleagues, who even after the president put this on the table, they decided to walk away with plan b.

O'BRIEN: So walk me though plan b. The Republicans say they may have a vote on plan b on Thursday. It would raise taxes for those making $1 million and above. What does this mean?

VAN HOLLEN: Plan b is another effort by Speaker Boehner to minimize the impact on high-income earners. Even his plan b would give millionaires a $24,000 tax break relative to what the president is proposing now at $400,000. So it's still another way to provide benefits and relief to very high-income individuals. And by leaving the cuts in place, it would mean that working Americans, our kids' education, programs for nutrition for moms and kids, would take a big hit even as they continue to protect the tax breaks for high-income individuals.

And so, as the president has indicated, it's not the way we're going to go. In the Senate, they have been clear that that's not happening, not going to adopt a Republican plan designed to, again, protect very wealthy people at the expense of the rest of the country.

O'BRIEN: So let me ask you a question. As an elected official, and I know you like to blame the Republicans, but at the end of the day, the president ran on rates $250,000 and up and now he's put $400,000 on. And that's stepping away from something he ran on, and polls support that people support that $250,000. This chained CPI is actually a change to Social Security, which is very upsetting to many Democrats to have a change on that. Some have run on that as well. Are you concerned that the backlash for you will be strong? That's two big promises that seem to be broken by the Democrats?

VAN HOLLEN: Soledad, I don't like these particular changes. As you indicated, the president made clear his preference was asking people with $250,000 of income and up to pay the higher rate. He is now in response to Republican demands moved that. I mean, I would say this is an indication of how far the president is willing to go to meet some of the demands in order to avoid going over the fiscal cliff.

The president has now reduced the amount of revenue he's asked for from $1.6 trillion down to $1.2 trillion. He now has cuts on the table, including interest savings of $1.2 trillion, and that's on top of $1 trillion in cuts that we did as part of the budget control act. What people are seeing is the president willing to compromise in order to get things done, and even as he tries to compromise, you have Speaker Boehner leaving the negotiating table and trying to do this plan b, which, again, is designed to benefit very wealthy Americans at the expense of the rest of the country. Even as the president has been moving --

O'BRIEN: Your Republican colleagues would say, sir, there are spending cuts that could be made that are not being made.

VAN HOLLEN: But, again, the president has significantly increased Soledad, his spending cut number on top of the $1 trillion that has already been made. As you indicated, things like the chained CPI which Republicans have demanded this things that people like me don't want to do and don't like it. And you have to make adjustments if you even went down that road to protect the people you're talking about, seniors and lower income individuals.

But frankly this is an indication of how far the president has been willing to go to try and meet Republicans halfway and then they run away from the negotiating table and try this other thing, because Speaker Boehner is not able to get the very extreme Tea Party members of his caucus to go along. People who are way out of mainstream are running the show and dictating terms in the House of Representatives.

O'BRIEN: It sounds like you are saying we're going over the fiscal cliff.

VAN HOLLEN: Well, we're trying not to.

O'BRIEN: Thank you for being with us this morning. We appreciate it. We have to take a short break. When we come back, we'll tell you the story of Ben Wheeler, one of the six-year-olds whose life was taken during the Newtown shooting. We talk with a family friend who remembers this little boy and talks about whether the town of Newtown will ever be able to fully heal. That's straight ahead.


O'BRIEN: Ben wheeler was one of the 20 children shot and killed in the Sandy Hill school massacre. A family friend who brought the Wheelers out to Newtown because she loved it so much remembers a little boy who played with her son.


SOPHFRONIA SCOTT, FAMILY FRIEND OF YOUNG SANDY HOOK VICTIM: Ben was a funny, funny, irrepressible child. I loved that he and my son and the brother, just so rambunctious. Their laughter rang through this house, absolutely rang through this house.

They would sit here watching TV together and ben would change the voices of what they were listening to on TV and replace it with some appropriate six-year-old term. They are singing follow the flashing light and ben will say something like "follow the flashing butt," six- year-old stuff. You would hear them in here cracking up over things that ben was doing. I loved hearing them laugh. You know, sometimes we say that ben was smarter than all of us. He was smarter than all of us, very aware of what was going on.

O'BRIEN: I cannot imagine how a parent buries a child. Honestly, I can't wrap my head around it. And I read eulogy around there one of the moms, just beautiful, but awful because it was so sad. How will your dear friend do this when she has to bury her son who is 6?

SCOTT: Soledad, you can't ask a how. We won't know. We won't know until that absolute day when these things have to happen. We are just taking it day by day, so if you try to conceive of the how, we aren't going to get there, OK? That's just the way it is.

O'BRIEN: Do you think this town ever heals? When I interview people, they tell me no.

SCOTT: It helps no one if I stay in this house and I can't function. It's important to be there. These children need to feel safe. They have to go to school, so we will find some way. We will.


O'BRIEN: Scott is a writer in Newtown, and the Wheelers moved out to Newtown because she loved it so much. She actually had the family, came out for her and she's thinking about how she's going to as a writer -- sort of what story does she tell out of this eventually? I like that she thinks the town will heal one day. Sometimes when you are there, it's not really clear.

BERMAN: It's hard to see today. O'BRIEN: Still ahead on STARTING POINT, from purged voter rolls to lines that were in some cases six hours long, and then those accusations of voter fraud, Florida has quite a mess on its hands with this year's elections. Coming up we'll talk to Governor Rick Scott who has a plan to fix it, he says.