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STARTING POINT WITH SOLEDAD O'BRIEN

Winter Storm Threatens Midwest; Fiscal Cliff Negotiations Continue; Interview with Senator John Barrasso; Tim Tebow Passed Over For Jets Starting Quarterback; Home Values Increase from Previous Year

Aired December 20, 2012 - 07:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. Our STARTING POINT this morning, a winter thrashing. A giant winter storm is threatening holiday getaway plans nationwide. A foot of snow up north and we're watching for a possible tornado down south.

Taking the fall. Four State Department officials facing discipline after the report on the failures leading up to the attack on Benghazi just a few hours before the hearing starts on the Hill.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: President Obama and Speaker Boehner digging in their heels with a dozen days to go before we go over the fiscal cliff.

JOHN BERMAN, CNN ANCHOR, "EARLY START": Another day of painful goodbyes in Newtown, Connecticut. For the fourth straight day, funerals of children gone far too soon.

O'BRIEN: Among our guests this morning, we're going to be talking to Senator Richard Blumenthal, Senator John Barrasso, Senator Johnny Isakson, Congressman Peter King.

It's Thursday, December 20th, and STARTING POINT begins right now.

(MUSIC PLAYIING)

O'BRIEN: Good morning. Welcome, everybody. The first significant winter storm of the season is our STARTING POINT this morning. It threatens to derail some holiday travel plans for maybe millions of Americans along with the snow. There's also a threat of tornadoes in the south.

The governor of Wisconsin has declared a state of emergency even before the storm hits. Six states across the Midwest are under blizzard warnings. The system stretches all the way from the Great Lakes to Colorado. The Rocky Mountain state already taking a big beating, 156-mile stretch of Interstate 70 had to be shut down yesterday because of the snow. It reopened late last night.

And this morning 36,000 people are without power in the state of Iowa. Lots of folks hoping to get a jump on the holiday travel rush, but they might have to turn to another plan. Meteorologist Alexandria Steele has been tracking all of this for us this morning in the weather channel center in Atlanta. Alexandra, good morning.

ALEXANDRA STEELE, AMS METEOROLOGIST: Good morning, Soledad. This storm is armed with so much. There are blizzard warnings in Iowa and tornado warnings in Mississippi. The top of this had the cold section. This is where the blizzard warnings are. Omaha to Des Moines, Des Moines to Green Bay is where we'll see the strongest winds and also a foot of snow.

On the south side of this you can see where the front is. Look at these storms. Some of them have been incredibly powerful, tornado watch in Louisiana, Mississippi and Alabama. A watch means tornado positions, we could see them. Tornado conditions are possible through noon. We've already had a tornado warning for Mobile and we do have reports of minor structural damage there this morning from the last hour.

Just want to show you the forecast wind gusts. Look what we could see in the next six hours. Des Moines, Kansas City, Lincoln, 40 to 50- mile-per-hour wind gusts. This access of the strongest winds moves into green bay, Madison and Chicago tonight. So Chicago at about 7:00 is going to see the snow begin. It's going to change over from rain to snow at about 7:00.

And then notice with this it may be tight, but look at this pressure gradient. This is where these incredibly strong winds are. This is kind of phase two of the storm. We had strong winds and snow. Now more snow, stronger winds. By Thursday night there's the snow tonight in Chicago moving eastward. You can see tomorrow morning right along the 95 corridor, that's where we'll see rain and rain only and it moves out by tomorrow afternoon. Soledad?

O'BRIEN: Alexandra Steele, thank you for the update.

There are only 12 days to go until we hit the fiscal cliff or go over the cliff. Negotiations seem to be at a stalemate. Optimism that was in the air a little bit earlier this week has now vanished. President Obama and the House Speaker John Boehner seem to be butting heads and the rancor could be worse today when the speaker puts his plan b up for a vote in the House that would extend the Bush era tax cuts on incomes up to $1 million. The president has promised to veto the Bill if it comes to that.

Let's turn to CNN political editor Paul Steinhauser in Washington, D.C., this morning. So it seems that everybody is digging in their heels at this point. Do you see any hope on the horizon? We have 12 days.

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Soledad, at least publicly both the president and house speaker John Boehner are talking very tough. Behind the scenes we're not sure what is happening. Yesterday the president came before cameras and talked about the fiscal cliff after making an announcement on gun control. Two hours later, the House speaker went in front of cameras and talked for 56 seconds before quickly taking off. Here's what both men said.

(BEGIN VIDEO CLIP) REP. JOHN BOEHNER, (R) HOUSE SPEAKER: Tomorrow the House will pass legislation to make permanent tax relief for nearly every American. 99.81 percent of the American people. Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: And at some point they have got to take me out of it and think about their voters and think about what's best for the country. And if they do that, if they're not worried about who's winning and who's losing, I think we can get this done.

(END VIDEO CLIP)

STEINHAUSER: The big question today, Soledad, does House Speaker Boehner have enough support from his party to pass plan b. And if it passes will that derail bigger talks to try to avert the fiscal cliff. Take a look at this, brand new numbers from a national poll, who should compromise more, which party should compromise more for bipartisan solutions? More Americans say the Republicans than the Democrats. And who would be blamed -- who would get the blame if there are no deals struck? More people would blame the Republicans in Congress than President Obama. About one in 10 would blame both sides.

O'BRIEN: So what do you think the expectations are? Do you think he has the votes in the House?

STEINHAUSER: He says he has the votes. We'll see for sure a little later today. It's not sure if all those Tea Party Republicans or on board with plan b.

O'BRIEN: Paul Steinhauser for us this morning, thanks Paul. John Berman has a look at some of the other news this morning.

JOHN BERMAN, CNN ANCHOR: Good morning, Soledad. The ripple effect of the attack on Benghazi consulate hits Capitol Hill this morning. Two State Department officials are expected to testify in about an hour. This has caused a staff shake-up at the State Department. So far there's been one resignation and three people on administrative leave. The review blamed systemic failures and leadership and management deficiencies. U.S. ambassador to Libya Christopher Stevens and three other Americans were killed in that attack. I'm joined now by foreign affairs correspondent Elise Labott. She's in Washington this morning. Elise, what's the latest?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, the latest is this morning Secretary Clinton's deputies will be testifying, John, Deputy Secretary Tom Nides and William burns. As you know, Secretary Clinton is still suffering from a concussion.

What I think is really interesting this morning is who's going to be chairing the morning session with the Senate Foreign Relations Committee. That's the chairman, John Kerry, who is tapped to be the next secretary of state. Now, of course there's a lot of questions in this panel report about the leadership at the State Department, but there's also a lot of criticism of Congress for not supporting resources for the State Department security. Let's take a listen to the fine balance that John Kerry is trying to walk between trying to be tough on the State Department but also trying to show a little support.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY, (D) MASSACHUSETTS: The report specifically calls on resources. There's a need to put about $2.5 billion a year over a number of years into efforts to strengthen our security status in various critical places.

(END VIDEO CLIP)

LABOTT: So, John, if it's John Kerry as we expect, in a couple of weeks he could be back before Congress asking for money instead of being asked for money, as he goes for his confirmation hearings. We could also hear from Secretary Clinton early next year. She said she'll testify. We also could hear today a little bit more about whether other officials should be held accountable. We had the top security official, Assistant Secretary Eric Boswell and some of his deputies resign. We'll see if the Congress is calling for more heads to roll.

BERMAN: It's interesting to see if there is more fallout. Elise Labott in Washington, thanks very much.

In Newtown, Connecticut, three more children killed in the massacre will be laid to rest today along with two teachers, final goodbyes to six-year-olds Catherine Hubbard, Benjamin Wheeler. Investigators say a complete report will take months because they want to sit down with each victim's family and survivors.

Investigators also getting a clearer picture of the days leading up to the Newtown massacre. Friends of Nancy Lanza, the shooter's mother, saying she was in New Hampshire taking a short getaway at a hotel, about a four-hour drive from Newtown in the days before the attack. They say she felt comfortable to leave Adam home alone for three days. Her soon shot and killed her the morning after she returned.

Six days after the Newtown tragedy President Obama is declaring gun control a central issue of his second term. He's promising his team headed by Vice President John Biden will have sweeping proposals by next month and planned to use all the powers of his office to persuade the opposition.

(BEGIN VIDEO CLIP)

OBAMA: The vast majority of responsible law-abiding gun owners would be some of the first to say we should keep an irresponsible, law- breaking few from buying a weapon of war. I'm willing to bet that they don't think that using a gun and using common sense are incompatible ideas.

(END VIDEO CLIP) BERMAN: The president's gun control team consists of officials from the Justice Department, Homeland Security, Health and Human Services and the department of education, again led by Vice President Joe Biden.

So it's tough to tell from these pictures, but this is a 23-vehicle pileup in Texas. One man died in this accident, at least ten others were injured. Near zero visibility, which you can see, triggered the chain reaction crash which included at least one semi. Low visibility also made it tough for the rescue crews to respond.

So today chances are you will see a brown truck somewhere. UPS says today is its peak shipping day as 28 million packages expected to be delivered in the U.S. that's about 300 per second, and UPS says that's a record. Tomorrow is the deadline to make sure your gifts arrive by Christmas Eve.

(LAUGHTER)

O'BRIEN: Another year, missed the deadline yet again. John, thank you.

If you were waiting for not a gift but the day that Tim Tebow would be a starting NFL quarterback, you're going to have to wait a little bit longer, for now at least. Tebow is not the answer for the struggling jets. Listen to coach Rex Ryan.

(BEGIN VIDEO CLIP)

REX RYAN, HEAD COACH, NEW YORK JETS: Tim can play, you know, quarterback, do our traditional things, but to me I was just -- I just kind of made a decision that in my gut I feel that the best thing for our football team is for Greg to be our quarterback now.

(END VIDEO CLIP)

O'BRIEN: That Greg is the third stringer, Greg McElroy, who will start in place of the struggling Mark Sanchez. Tebow obviously not very happy. The "New York Daily News" is reporting he is going to ask to be traded. Jason Gay is a sports columnist for the "Wall Street Journal" joining us this morning. Not exactly a ringing endorsement or anything from Rex Ryan. I mean, wow.

JASON GAY, SPORTS COLUMNIST, "WALL STREET JOURNAL": Nothing. Can we just acknowledge the craziness here? We're talking about a football team that is 6-8 and is not going to go to the playoffs this year for the second consecutive year but the jets are the story and it's because of Tim Tebow who is this intensely polarizing player who electrified the country as a member of the Denver Broncos.

O'BRIEN: Do you think he's asking to be traded?

GAY: I think that's definitely a possibility. I think Mark Sanchez, who is the other jets quarterback being passed over here, he could also be gone. There's a lot of turmoil. O'BRIEN: Why are they not using Tebow? There was this gigantic fanfare when he came in, and I don't think in terms of playing he was a star, but certainly in terms of what he could bring for the team he was. Why is this not the opportunity? They're losing anyway.

GAY: Of course. And you'd think a team like the Jets, which has always been into doing crazy things, would not use Tim Tebow. It's very uncharacteristic to go with a guy like Greg McElroy, who they probably see as more of a future quarterback than Tim Tebow. It's highly unlikely you'll see Tebow in a jets uniform next year I suspect.

O'BRIEN: There's a conspiracy theory where people are saying they won't put him in because they're concerned he'll do well, which makes no sense to me.

GAY: I think things don't look good for anybody anyway as it is. There is this theory that were they to put Tebow in and he does a great job and wins the last two games of the season, people would say, why wasn't he in midseason or from the beginning of the season? I don't know if that's actually true, though.

BERMAN: This is a case of be careful what you wish for. The Jets brought him in and wanted to create this energy and buzz and, boy, do they have buzz right now.

GAY: They have tons of buzz, and it's not the kind of buzz that you want as a football team. The thing that's so unusual is that they're just not even taking the car out for a drive. They're not even really trying it. They're not giving Tebow the chance. That's the strange part of the whole thing.

O'BRIEN: It could end his career, theoretically? Or maybe he goes and plays somewhere else?

GAY: Sure. I think like any quarterback you want an opportunity. He hasn't gotten one in New York and I think he'd like to get one elsewhere.

O'BRIEN: I love Tim Tebow. It just seems unfair. Either play him but why take him away from being a star and letting him be an opportunity. I'm with you, Tim, on this one. All right, thanks, Jason, nice to have you with us this morning. Appreciate it.

Still ahead on STARTING POINT, House Republicans will vote on plan b today, but are they -- since the president says he's going to veto it anyway, is all this basically political theater as we get very close to the fiscal cliff deadline. We'll talk to the Republican senator from Wyoming, John Barrasso, straight ahead.

CHRISTINE ROMANS, CNN ANCHOR: And in business news, home values, national home values at levels we haven't seen since 2004. How much more is your home worth? We've got the new numbers. I won't tell you how much it's down from the peak but it's worth more now than it was last year. You're watching STARTING POINT.

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O'BRIEN: Welcome back, everybody. We're still arguing about Tim Tebow this morning. But we're going to turn now to also argue about something else, 12 days until the country reaches the fiscal cliff. That is roughly 280 hours -- 280 hours, and then we're over the cliff.

Today the house Republicans will vote on Speaker Boehner's plan b, which would raise taxes -- tax rates, rather, on people making more than $1 million if the two sides can't come to any agreement. We want to start with Senator John Barrasso. He's a Republican from the state of Wyoming. It's nice to have you back.

SEN. JOHN BARRASSO, (R) WYOMING: Thanks for having me. Thank you.

O'BRIEN: Thank you. The House Republicans will vote on plan b. As we mentioned, $1 million would be the threshold. Let's say hypothetically it does in fact pass the house. Would you support it in the Senate?

BARRASSO: Well, you know, 53 Democrats have already voted to support that in the Senate earlier this year, so I think it's wrong for the president to say he's going to veto it, Soledad. It's an opportunity to make permanent the lower tax rates for 99 percent of Americans. So I think the House, as leader Boehner has said, will pass it today. It ought to get a vote in the Senate, an up or down vote, rather than games being played. It's too close to the end of the year. Americans at home want to make sure their taxes don't go up. I don't think we ought to raise taxes on anyone during economic times like these. The president seems fixated on raising taxes, but 53 Democrats are on the record in the Senate supporting this proposal.

O'BRIEN: Yes, but that was like a lifetime ago. I think you might have a hard time with that in the Senate now. Technically if you make a million or more, your tax rate will go up and it's been spun as tax cuts, but is that just wording and really it's raising taxes? I mean that's what it is, like your taxes are going to go up? That's how it's going to feel?

BARRASSO: I view it as over 99 percent of all Americans would make permanent the lower tax rates. I would think that the president should embrace this. I know Americans all across the country, certainly in my home state in Wyoming, would love to have these lower tax rates made permanent for them. So I think it's a responsible way to go. Speaker Boehner has shown real leadership here. The president, all he has proposed so far is his old budget, which failed in the Senate 97-0. Not even any Democrats have voted for what the president has proposed.

O'BRIEN: How is it not a tax increase, though? To me at the end of the day if you're paying more in taxes, that's a tax increase. Isn't this ultimately Republicans are voting for a tax increase, even if it's for the one percent? Some people, as you know, have signed the pledge that says that they won't increase taxes and some other things. So how is that not a tax increase?

BARRASSO: As you know, if nothing is passed, Soledad, taxes go up on everyone on January 1st. The so-called Bush tax cuts expire at the end of this year, so all Americans are looking at their taxes going up on January 1st. And what the House and plan b is doing is saying, no, we want to permanently extend the lower rates for 99 percent of Americans. Otherwise everybody's taxes go up and people will feel those immediately, because withholding is going to go up in their first paycheck in January. So I think the responsible thing to do is what Speaker Boehner has proposed. I think we shouldn't raise taxes on anyone. But if we can make permanent, permanent these lower tax rates for 99 percent of all Americans, I think that's a responsible thing to do, and the president ought to embrace it.

O'BRIEN: There's a poll out this week from CNN/ORC, and the question is who will be more responsible if the fiscal cliff happens, which is in just about 280 hours we go over the cliff. We've kind of turned from talking about days to talking about hours, which always scares me. You know who gets the bulk of the blame? You can see on the screen, the GOP in Congress gets the blame. They are held responsible. President Obama gets 37 percent of the blame, the GOP is 48 percent. For people who think it's both, that's 11 percent. How concerned are you about the backlash from an electorate that is already saying we feel it's the GOP that's going to get a hefty portion of the blame here?

Well, my bigger concern is for the American people. I think if we go over the cliff, I see an economic disaster over the cliff in terms of a second recession, unemployment rates going up. But it appears to me that the president and Howard Dean as well as one of the leading senators, Patty Murray, has said, no, let's go over the cliff, because they see political victory at the bottom of the cliff, which is one, as you just say, blaming Republicans.

Number two, they get all of the tax increases, all this new revenue they can spend on other new programs. And additionally they get all the cuts to the military that so many Democrats have wanted over the years. So they see kind of a trifecta over the cliff where I see economic problems for our country.

O'BRIEN: There are plenty of people on both sides who have said, hey, let's go over the cliff, which honestly scares me. I want to turn if I can and talk to you for a minute about Benghazi and this really damning report that has come out. The former ambassador to the U.N., John Bolton, says that he believes that Hillary Clinton is basically faking her illness and that's why she won't come in to testify about this report. Here's what he said.

(BEGIN VIDEO CLIP)

JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: Every foreign service officer in every foreign ministry in the world knows the phrase I'm about to use. When you don't want to go to a meeting or a conference or an event, you have a "diplomatic illness." And this is a diplomatic illness to beat the band. I mean I certainly hope it's nothing serious.

(END VIDEO CLIP) O'BRIEN: He both says it's a diplomatic illness, i.e. faked, to beat the band, but then he hopes it's nothing serious. Do you agree with him that she's faking her injury?

BARRASSO: No. She was scheduled to testify today. I understand the situation. I do expect and want to have her as secretary of state testify in public, in person, and on the record. And you know, even "The New York Times" today, Soledad, has called for that in an editorial as soon as she is well, which I hope is very, very soon.

O'BRIEN: Senator Barrasso, Republican from the state of Wyoming, joining us this morning. Nice to see you, sir. Thank you for your time.

BARRASSO: Thanks for having me.

O'BRIEN: Fiscal cliff of course could have a big effect on your tax returns, basically in messing everything up. We'll tell you why you might not get your refund any time soon if Congress doesn't act.

Some good news for homeowners. Your home is worth more than at least last year. Christine has the good news in just a moment.

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ROMANS: It's 25 minutes past the hour. Welcome back to STARTING POINT. I'm Christine Romans minding your business this morning. U.S. markets closed lower yesterday while fiscal cliff talks stalled -- nothing like a 49-second rebuttal to the president to knock stocks down. U.S. futures are up slightly this morning. The fiscal cliff tango continues.

Meanwhile the IRS is warning the fiscal cliff could wreak havoc on the tax system unless Congress acts soon. In particular, this alternative minimum tax patch is a real problem. It's legislation that prevents middle class earners from getting slammed with a higher tax Bill. Every year Congress extends a patch. The AMT patch expires at the ending of this year. So unless Congress acts before December 31st, 30 million taxpayers could pay higher taxes as a result and 100 million tax return filings and refunds could be delayed. Tax season begins in just a couple of weeks and they still haven't figured this out.

Also, here's the big news. Home values grew 2.5 percent over the last year, the biggest annual increase in home prices since 2006. Zillo has these numbers. They say the last time home values stood where they are now, May, 2004. We're going to get existing home sales data at 10:00 a.m. eastern. What I can tell you about home prices in the year, you guys, is if you live in Chicago, Atlanta, Philly or New York, home prices did not rise. Some of the place that had big, big falls had big rises but not for some of those towns like Atlanta, Philly, Chicago, New York, just flat.

O'BRIEN: Christine, thank you.

We're going to talk a little bit about a dangerous storm that's dumping snow and also bringing potential tornados to the south. We'll have a live weather update for you coming up next.

Then it was another day of terrible goodbyes to small children as they were laid to rest. We'll take you back to Newtown, Connecticut, as the community there is honoring the memory of the victims. That's straight ahead.

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O'BRIEN: Welcome back, everybody. Our team this morning, Margaret Hoover is with us, she is a CNN political contributor and appointee in the Bush White House, Richard Socarides is with us as well. He's a writer for New Yorker.com and adviser for Bill Clinton. And Chrystia Freeland is with us. She's a digital editor for Thompson Reuters. Nice to have you all.