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STARTING POINT WITH SOLEDAD O'BRIEN

Benghazi Report Released; Interview with Congressman Tom Cole of Oklahoma; Obama Named "Time" Person of the Year; G.M. to Buy Back Stock from Treasury

Aired December 19, 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: Still ahead this hour, we'll be talking to Oklahoma Congressman Tom Cole, South Carolina Congressman Tim Scott, now Oklahoma Senator almost. Actor Brad Garrett joining us as well.

We'll have the writer from "TIME" magazine behind the new Person of the Year, which is President Obama for the second time.

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

(MUSIC PLAYING0

Welcome back, everybody. Our team today is attitude by Jim Frederick. He's international editor for "TIME" magazine. A little announcement a moment ago about the "TIME" magazine's Person of the Year.

ROLAND MARTIN, CNN POLITICAL ANALYST: Just a little bit.

O'BRIEN: Roland Martin is with us as well, CNN political analyst, host of "Washington Watch with Roland Martin" on TV One. Will Cain is a CNN contributor, columnist for TheBlaze.com. John Berman sticks around. He's "EARLY START" co-anchor.

Our STARTING POINT is the State Department.

Have you read this report? Did you read this report on Benghazi? Oh, my goodness. It is absolutely devastating, slamming the State Department for the September 11th terror attacks at the U.S. consulate in Benghazi. An independent panel released this report.

They find this: "Systemic failures" at the State Department led to the attack that killed the Ambassador Chris Stevens and three other Americans.

The panel is also calling security in Benghazi "grossly inadequate". Requests to beef up security at the consulate were ignored by leaders in Washington.

And then, in the aftermath of the tragedy, there was a lack of transparency, responsiveness and leadership at the senior levels in Washington and Libya.

We go right to our foreign affairs reporter Elise Labott. She's in D.C. this morning. So, what do you think is the most stunning thing to come out of this report?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: I think -- I've read a lot of reports over the years, Soledad. And while it doesn't name specific names, it's pretty tough, I would say scathing, on the leadership of the State Department, particularly the diplomatic security personnel that's in charge of security for diplomatic posts overseas and the Near East Affairs Bureau, saying basically they missed all the warning signs. There were a lot of attacks leading up to 9/11. And they were basically not taking into account the deteriorating security situation on the ground.

O'BRIEN: So, what happens in the wake of this report, then?

LABOTT: Well, the report comes out with 29 recommendations, that they want the State Department to start working on.

The first thing -- let me give you a few. First is to strengthen security personnel for these high threat posts. One of the problems is that the consulate relied on this temporarily inexperienced staff. And also local militias that were not up to the task.

The panel also called for tighter security standards, for facilities and security upgrades if necessary, and a review of fire safety procedures. If you remember, it was smoke inhalation that killed Ambassador Stevens and Sean Smith when that safe house was set on fire. And the State Department, the report said, needs to plan for fire as a weapon these days.

Also, in-depth checks of the threat environment -- as I said, a big criticism is that the state department failed to recognize the really tanking security situation even in the face of these attacks on other Western targets.

And, lastly, Soledad, congressional support for resources. Shrinking budgets for security was cited as a major problem. And security -- Secretary Clinton said the State Department will do its part, Congress has to support them with the money.

O'BRIEN: Elise, if I have to tell you, anybody who wants to read this report, it's so worth taking a look at. It just -- it really spells out from sort of top-to-bottom exactly what went wrong. And it's a devastating report.

Elise Labott this morning --

(CROSSTALK)

O'BRIEN: Oh, my goodness. Elise, thank you.

Let's get right to Congressman Tom Cole. He's a Republican from Oklahoma. Thanks for being with us, sir.

Lots to talk about, but we'll start with this report that Elise was just saying. What do you make of it? I mean, the read to me is just -- it's crazy, the failures on a lot of levels. REP. TOM COLE (R), OKLAHOMA: It's a very damning indictment of State Department performance. Obviously, that's an administration responsibility.

Look, we lost four great Americans here. We had adequate warning. We clearly didn't do anything to respond to the warning. I don't think we did a good job, you know, during the incident itself. And I think we've been less than honest up to this point with the American people. But this report is at least a step in the right direction. It's putting the facts on the table. There's obviously some things that ought to be done.

But at the end, look, this is on the president and Secretary Clinton's watch. They bear a measure of responsibility here.

O'BRIEN: The figure is absolutely clearly pointed at the State Department. Also pointed in some ways, sir, at Congress. They reference the spending cuts that Congress has approved and sometimes championed as being part of the problem.

There's a sort of context of nobody wants to spend money. So, you have this mission that is at the bottom of the totem pole. So, they're not going to get funded at the end of the day --

COLE: Well, when you're running trillion dollar deficits, I understand people looking for money. But, look, you're right about that in terms of where you prioritize it.

Now, there's usually a lot of latitude within the State Department budget about where they put resources. So, giving the State Department less money doesn't mean there's less money for security. It means maybe they should reprioritize where they're putting some of their dollars. And I suspect that's what should have happened in this case.

But, look, there's clearly a lot of blame to go around here. But, at the end of the day, you know, if there was insistence, if there was a recognition of the danger, there clearly wasn't. If there was a specific request for Libya, it probably would have been entertained. No such request came to Congress.

You know, the administration is responsible here. That's what the executive branch does is run these departments. And in this case, frankly, they failed and it had tragic consequences.

O'BRIEN: Here's the report also says there was no misconduct, no one willfully ignored their duty. I read a little bit of it. The board did not find any individual U.S. government employee engaged in misconduct, willfully ignored his or her responsibilities and therefore did not find reasonable cause an individual breached his or her duty."

I know it's kind of wordy. Bottom line is they're saying, there was sort of no intentional -- it's more incompetence I guess than intentionally trying to undermine the duty of that particular mission. COLE: Well, I have no doubt nobody intended for this to happen. But to say nobody is responsible is something else. It's negligent. And, look, nobody sat down and said, how can we rig things so something like this terrible thing would happen? Of course, they didn't do that.

But I think when you don't say somebody was responsible, there were all these failures. It was a terrible situation, but nobody was responsible. That doesn't square with the facts. Somebody's responsible. Somebody didn't get the job done or didn't send the word up the chain of command or what-have-you. And you got to accept that.

Look, this was --

O'BRIEN: The report kind of says everybody's responsible. I'm sure you know it like the back of your hand.

COLE: That means nobody's responsible. Come on. At the end of the day, somebody has line item responsibility for security in the State Department. And they, by the way, are responsible to somebody above them either at the deputy secretary or secretary level. They just didn't get their job done in this case.

And so, it's not like we have a whistleblower out there that was saying, my gosh, we're in a terrible situation. They were ignored. They just didn't do the job.

So, somebody is responsible. And I don't think it does -- it's not very helpful to say we had a terrible thing happen. We had plenty of warning. We should have avoided it. But in the end nobody was responsible. How can that possibly be the case?

O'BRIEN: I got to tell you, this report is just stunning.

Let me turn for a moment if I can, sir, to the fiscal cliff. A couple proposals now and counterproposals on the table. The president upping his number to $400,000 as the threshold to raise taxes. We also know that, technically, Social Security would be changed by what they're, you know, sort of putting on the table on that front as well.

What do you make of these proposals at this point?

COLE: You know, I think the two sides are still a ways apart. We're going to have some legislative action to help define the differences. But I think at the end of the day, if you look at where both sides were Friday and where they were yesterday morning, the differences are narrower in the last 72 hours.

Now, that doesn't mean we've got a solution. We don't. It doesn't mean that we're imminent. But I would actually say that they're moving toward one another. You know, there's been concessions on each side. Obviously, we want to extend all the Bush tax cuts if we possibly could. But there's a recognition we're not going to be able to do that. That's in the speaker's proposal.

There's also revenue on the table. That certainly wasn't the case earlier. More revenue now than there was in the initial Republican proposal. Frankly, you know, an extension of the Bush tax rates for more people by the administration.

So, again --

O'BRIEN: Do you feel --

COLE: -- I'm not going to tell you it's done. I think there's been movement in the right direction by both sides.

O'BRIEN: How do you feel about the chained CPI proposal that's now on the table?

COLE: I'm very much in favor of that. To save these programs, there's simply not enough revenue. If the president got all the revenue he asked for, we would still have terrific problems with Medicare, Medicaid and long term Social Security.

So, these are minor adjustments. They're things people will hardly notice. But they add up over a decade to a lot of money. So, will he take some political heat? Sure. I think everybody's going to take political heat on all sides of this.

I'm frankly to see that idea on the table. Happy to see the administration entertaining it.

O'BRIEN: Congressman Cole, talking with us this morning. Thank you, sir, for your time. We appreciate it.

COLE: Thank you.

O'BRIEN: You bet.

John Berman's got a look at other stories making news today.

JOHN BERMAN, CNN ANCHOR, "EARLY START": Thanks so much, Soledad. Another day of grief filled goodbyes in Newtown, Connecticut. Sandy Hook schoolteacher Vicki Soto is being laid to rest, along with three of the littlest victims, Daniel Barden, Caroline Previdi and Charlotte Bacon.

Meantime, the family of 6-year-old Jack Pinto who was killed in the school shooting met with their son's idol, Giants wide receiver Victor Cruz. Jack was buried wearing Cruz's number 80 jersey. Very nice of Victor Cruz.

The Newtown tragedy sparking a gun control push from the White House. President Obama has tapped Vice President Biden to head the interagency effort addressing gun violence. He will deliver a state, the president will, later this morning, at 11:45 a.m. Eastern Time at the White House.

Meantime, the NRA is breaking its silence on the school shooting. The gun lobby says it will remain quiet out of respect for families. It is now pledging to make what it calls meaningful contributions to put a stop to mass shootings. And with just 13 days left before we go over the fiscal cliff, House Speaker John Boehner, they're inching closer with President Obama to reaching a possible deal. You heard Tom Cole say it a moment ago.

Though at the same time, Speaker Boehner is sort of proposing an end run around the White House. He's calling it Plan B. He's pitching to the house a tax increase on families earning $1 million and up. His plan would not stop the sweeping spending cuts to defense and domestic programs. The White House is already shooting it down saying it has no chance of passing the Senate.

The president for his part, he wants to raise taxes on families earning $400,000 a year and higher. That's a change for him up from $250,000. He is right now proposing $930 billion in spending cuts.

A massive winter storm stretching from Colorado, all the way to the upper Great Lakes expected to cause dangerous blizzard or near blizzard conditions today. Going to look live right now at Denver where snow is falling pretty hard. You can't even see it. snow is falling so hard it's blurry.

Blizzard warnings in effect in the Central Plains. Visibility at times will drop to less than a quarter mile. Forecasters expecting six to 12 inches of snow in some places. The real problem may be the winds, 50 mile an hour winds in some areas.

He won the election. That wasn't enough. President Obama is "TIME" magazine's Person of the Year. The reasons, "TIME" cited that he won despite higher unemployment than anyone's faced in 70 years and that he is the first Democrat in a long, long time to win two consecutive terms with more than 50 percent of the vote. The last guy to do that was FDR.

The president was also named "TIME's" Person of the Year in 2008. Other possibilities, "TIME" says, Malala Yousufzai, the young Pakistani education crusader who was shot in the head by the Taliban. She was the first runner up.

Coming up in a few minutes, we'll talk to Michael Scherer who wrote the cover story for "TIME" about why they chose the president as the Person of the Year.

Big year for the president. Wins the White House and he gets, you know, the whole "TIME" thing.

O'BRIEN: And on the cover of "TIME" magazine. It's been a good year for him.

Still ahead on STARTING POINT, South Carolina Congressman Tim Scott has been selected to replace the outgoing Senator Jim DeMint. Tell you how he's making history when we talk to him ahead this morning.

And Brad Garrett of "Everybody Loves Raymond" fame is here to talk about his new movie called "Not Fade Away." "Soprano" fans should love this movie. We'll talk about that, too.

We're back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. New this morning, President Barack Obama is "TIME" magazine's 2012 Person of the Year. A little bit of deja vu. You might be thinking, wasn't he person of the year before? Yes, in 2008. Michael Scherer is the White House correspondent for "TIME" magazine.

He wrote that cover story as well. Michael, good morning. Nice to see you. I got to tell you, I thought Malala Yousafzai was going to be it. Why the president? She -- I know she was the first runner up. Why did you think of the president would win the honor finally?

MICHAEL SCHERER, WHITE HOUSE CORRESPONDENT, "TIME": Well, again, I mean, he won in 2008 because of the promise of change and because of the election he'd just run. He wins in -- he is person of the year in 2012 because of the change he has brought to the electorate, changing -- really creating a new governing coalition.

Now that we know it was actually a real thing, it was not just a passing phase in 2008 for changing the way we run campaigns. Campaigns will never be the same. The idea of a grassroots campaign is now very different than when Obama first arrived on the scene and really changing the whole policy direction of the country and the national policy conversation.

There was a real question over whether the American people were happy with what he did in the first four years. It's clear now that a majority of the country was. And clearly, the election has already had a significant impact on the conversations we're having here in Washington. It's now a certainty, for instance, that taxes are going to go up on the wealthiest Americans in some form in the near future. Had he not won, that just wouldn't have been the case.

O'BRIEN: That's so interesting, because it sounds like you're saying he won because of literally the logistics of the election. You know, kind of how that was rolled out versus something, I think, in 2008, it was much more sort of a symbol of where America is at this point.

SCHERER: Yes. I would -- I would just say, there are a lot of logistics involved in that, but the key here is that he was at the center of it. I mean, if you talk to both Democrats and Republicans about how this race unfolded, they will both tell you that the defining fact of this race from the beginning was there weren't that many people, there were a lot of Americans who were unhappy with what had happened over the last four years, were disappointed in the president's performance.

But there weren't that many Americans who didn't trust him. And so, this election ended up being run about him. The grassroots outreach, the people who turned out to the polls, they were turning out for him. A different name at the top of the ballot would have had a different result. So, it's not as if just sort of the math and computer programs did this. And I think, you know, one of the questions going forward is whether the next president or the next nominee for the Democratic Party will be able to continue this coalition. It's really not certain at all right now.

WILL CAIN, CNN CONTRIBUTOR: Michael, this is Will Cain. So, if I could, I'd love to talk for a moment just about your runner-up, because Soledad and I were talking, and tell me --

(CROSSTALK)

CAIN: We both thought Malala was a pretty potentially good pick. Tell me the debate you had. What did you think about her? How did you put that through kind of your analysis?

SCHERER: Well, no, Malala is an excellent pick. A 15-year-old who really has become a symbol and an activist to really change the conversation about women's education in Pakistan. You know, not only was she brutally shot, but after her shooting, she has continued to remain a very public presence, continued to be an activist, has said that she's going to continue on this fight.

I mean, with this sort of selection, we have four or five people in the magazine. You have a wealth of options. You know, the person of the year goes to that person who has -- had the biggest impact on the news, for good or bad, over the previous year and has the potential to have the biggest impact going forward. I don't think anyone should see it as really a competition that takes away from Malala --

O'BRIEN: I know. I kept saying someone wins. I'm saying that in error. I know it's not an election or something. Go ahead, Jim.

JIM FREDERICK, INTERNATIONAL EDITOR, "TIME": Yes. I mean, I can talk a little bit about Malala. Hey, Michael. Jim Frederick here. How you doing? I think one of the issues with Malala is that she's a hero and she's a great pick, but she rocketed to global fame for better or worse because of something that happened to her. A terrible shooting, a terrible tragedy.

She's now in a position where she has ultimate potential. She now has the platform. She has a ton of money coming in. Under the guidance of her father, she can architect real change. But part of the issue of the choice is it has to be somebody who had, you know, real tangible impact in that year and is also a potential choice.

So, we expect big things from Malala. And we're really optimistic about her future and we love her, but that was one of the things holding us back on Malala.

O'BRIEN: Will and I were talking about that. That sort of like, oh, she's missed her year. But you're saying actually she's positioned herself --

FREDERICK: Yes. She's almost pure potential.

MARTIN: I'll tell you what, also, potentially for a Nobel Peace Prize down the line. I'll tell you one person who potentially could have been person of the year, Chief Justice John Roberts. That decision that he made played a huge role in the Affordable Care Act.

(CROSSTALK)

O'BRIEN: We're completely out of time. I got to go, but does it annoy you when later everybody sits around and armchair quarterbacks for you?

SCHERER: No. This is why we do it.

(LAUGHTER)

(CROSSTALK)

MARTIN: Who's the greatest basketball player of all time? It's the best arguments.

O'BRIEN: Let him answer.

SCHERER: No. Of course, this is going to happen. And I would say for John Roberts also, you know, someone who's definitely there in the conversation. You know, this next year is going to be a huge year for John Roberts. I don't think Roberts' mark will be defined by what he did in 2012.

(CROSSTALK)

O'BRIEN: Michael, thank you very much. I appreciate it.

(CROSSTALK)

O'BRIEN: We got to take a break.

(LAUGHTER)

O'BRIEN: Still ahead this morning, going to talk about gun sales because they're up. Gun stocks, they're down. What does that mean? Does it signal a change in how people feel about weapons after the Newtown massacre? That's straight ahead.

(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Welcome back to STARTING POINT. New this morning, the era of government motors will soon be over. Treasury department says it will be completely out of its investment in GM in the next 12 months. GM is buying 200 million shares of its stock back from the government starting today through the end of the year.

GM shares are up big this morning, up seven percent in premarket trading. Last week, you'll recall, treasury sold the last of its AIG stock. Treasury department trying to unwind those unpopular, but in some cases, profitable bailouts.

On the heels of the tragedy in Newtown, gun sales are up, but gun stocks are down. Shares of Smith & Wesson are down 19 percent over the past three days and Stern Ruger & Co. down 15 percent. The retailer, Cabelas, by the way, which sells guns, also that stock has suffered. But look at this stocks since the beginning of the year, folks.

Smith & Wesson is up about 78 percent. Stern Ruger is up more than 20 percent. It's been ten years of pretty brisk gun sales, and the fastest growing part of the business, military style semi-automatic rifles and high capacity magazines for ammunition. Smith & Wesson sales in the second quarter were a record.

And Bushmaster, the maker of the AR-15 military-style rifle used to kill the children and teachers in Connecticut, it had a quarter billion dollars in profit for its parent company last year. As you know, the big investment firm Cereberus, as it owns the maker of the Bushmaster rifles, is now selling that company, wants to sell its stake in that company.

O'BRIEN: I think it's going to be very interesting to see the number of people who look into where their investment money goes, right? I mean, we talked about the California teachers realizing that they were invested in something that ultimately --

ROMANS: New York does, too. And New York is reviewing its investments. You know, we talked to the comptroller of the state and works the (ph) city yesterday, and they are reviewing those investments. But, those investments are difficult. They also say that there's just a very small part of their overall portfolio.

But you look at like rocket (ph) vanguard, the big 401(k) companies, you could very well have your 401(k) at least partially invested in some of these companies. They are in some of the indexes.

MARTIN: They claim it's a small part, but the reality is those teacher retirement systems are huge players in this industry. I criticize them about rap music as well. I'm saying, don't play about some stuff because your retirement is based upon some other stuff.

O'BRIEN: I think that's so fascinating.

FREDERICK: Index funds by definition.

O'BRIEN: Right.

FREDERICK: Invested and all.

ROMANS: California said yesterday they were hearing from teachers like mad in California who did not like that.

O'BRIEN: -- where is your money invested? You should know.

All right. Still ahead this morning on STARTING POINT, we're going to be talking to South Carolina Congressman Tim Scott. He's taking outgoing Senator Jim DeMint's seat. We'll tell you why his appointment is making history in the Senate and talk to him straight ahead. (COMMERCIAL BREAK)