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STARTING POINT WITH SOLEDAD O'BRIEN

House Fails to Pass Plan B; Interview with Debbie Wasserman Schultz; Weather Threatens to Delay Holiday Travel; Guns Stores Selling out of Merchandise

Aired December 21, 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 to STARTING POINT. I'm Soledad O'Brien. Extreme weather this morning. Feet of snow, snapping power lines, thousands of people in the dark, and thousands more stuck at airports. The latest on this blizzard that's now ruining holiday plans nationwide.

Plus, the House goes home for the holidays without a fiscal cliff deal and after dealing a huge blow to House Speaker John Boehner. Has he lost his party and what's that going to cost taxpayers?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And what's that going to cost your 401(k)? The stock market tumbles as investors lose faith in Washington. It could be a rough Friday before Christmas and markets. Is the fiscal cliff already here?

JOHN BERMAN, CNN ANCHOR: Church bells will ring 26 times this morning for the victims of the terrible massacre in Sandy Hook, Connecticut, one week after that terrible tragedy.

O'BRIEN: It's Friday, December 21st, and STARTING POINT begins right now.

(MUSIC PLAYING)

O'BRIEN: Good morning, welcome everybody. It was a major political blow for House Speaker John Boehner, one that will surely affect his position in the negotiations to try to avoid this fiscal cliff that is now just 11 days away. In a stunning turn House Republicans abandoned him, and it forced the speaker to cancel a vote on Plan B, which would have extended Bush tax cuts on incomes below $1 million. Congressional correspondent Dana Bash there was and watched it unfold. Walk us through what happened.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It really was stunning. That is the perfect word, Soledad. I was watching all day, talking to Republicans to try and figure out if the speaker had the votes. Really hard to imagine he was so far out because he was so far out on this being a strategy. Republicans want to prove that they won't let things go up for people, 99 percent of Americans.

I was watching earlier votes, watching the speaker's team on the floor, trying to twist arms and trying to get Republican votes. And it was clear from the expressions on their faces it was not going well at all. And all of a sudden they put the House in recess, which is effectively a pause button, and I saw members of the leadership run into the Speaker's officer, and not long after that, we heard that he was actually pulling the bill from the floor.

And there was a lot of emotion among Republicans, especially those who are big supporters of the speaker. Listen to Steve LaTourette, his fellow Republican from Ohio.

(BEGIN VIDEO CLIP)

REP. STEVE LATOURETTE, (R) OHIO: This weakens the entire Republican Party and the Republican majority. It's the continuing dumbing down of the Republican Party. And we are going to be seen more and more as a bunch of extremists that can't even get a majority of our peen people to support causes we're putting forward. If you're not a governing majority, you won't be a majority.

(END VIDEO CLIP)

BASH: Now, just by way of background, LaTourette is very close with the speaker, and he also retiring in part because of he is fed up with the way things go in Washington. I was outside a meeting, and you could hear the boos inside, you could hear some cheers as well. There was certainly a lot of tension and very bad for the speaker with regard to his own leadership.

O'BRIEN: Let's talk about that for a second, Dana. I was going to ask you, what happens next? What happens next with the fiscal cliff and next for Speaker Boehner if he can't rally his own party for his leadership position and ability to negotiate?

BASH: Let's start with that. That's a big question mark. A lot of answers to that will lie in what happens next with regard to any kind of big deal, as we approach December 1st, which is of course just around the corner. Will there be a deal that is kind of done outside of him, maybe with the Republican leader in the Senate, and so he can step back and let things happen? Something comes to the House, a majority of Democrats could vote for it, and maybe enough Republicans to get it over the top? But even that could hurt his leadership.

It's an open question, what going to happen to the speaker. And it isn't surprising given the fact that he has had a very, very difficult time, leading a very fractious caucus, particularly in 2010. A lot of people elected who simply came for one reason and one reason only, to cut spending. They didn't care about getting re-elected, they didn't care about following leadership. And he knows how to legislate, know where is the votes are, and he just miscalculated this.

It's a big question mark, where do we go from here? He'll talk to the president and Congress for the most part is gone until after Christmas. We'll have to rely on those negotiators and hope they can come up with something Congress can vote on between Christmas and New Year's.

O'BRIEN: Dana Bash this morning, appreciate it. Our other top story this morning is the travel nightmare before Christmas. Nasty weather in the upper Midwest has made it very difficult to get around and dangerous in some cases. Later today, New England is expected to get slammed. Right now, northeastern Ohio is feeling the effects of winter's first major storm there.

Victor Blackwell in the thick of it in Cleveland this morning. Good morning, Victor. How is it?

VICTOR BLACKWELL, CNN CORRESPONDENT: Good morning, Soledad. Not so thick yet, but thickening. If you come here and speak with a person who is Cleveland native, they would look around and say snow? What snow? The ground is wet. It's just a dusting on the ground.

But we do have snowflakes blowing sideways. And the fact that you can see this horizontal snow, that means there is strong wind. Gusts are kicking up, and that's the problem.

Let's talk about the airports, because here in Cleveland, we know that there is no major problem, no delays. But in Chicago O'Hare, last night, 350 cancelations. We'll get an update at 8:30 Eastern on what today will look like. As more than 200,000 passengers are expected to travel through that airport, roads are difficult, a crash on Wednesday in Iowa, ended with two deaths, seven deaths across four states in this storm causing problems in the Midwest, and tornadoes in Arkansas and Alabama as well. Soledad.

O'BRIEN: Victor Blackwell in the thick of it, I see the flurries behind you. Good luck. We'll keep checking in.

BLACKWELL: It's coming.

O'BRIEN: And I'm nice and toasty and warm inside today.

BLACKWELL: You are.

O'BRIEN: Let's get to meteorologist Rob Marciano, tracking it all, at the CNN weather center in Atlanta. Hey, Rob, good morning.

ROB MARCIANO, AMS METEOROLOGIST: Good morning, Soledad. What happen yesterday, you will get a feel what's happening today. The totals won't be the same today, a foot and a half Middleton, Wisconsin, Dubuque, Iowa, a foot or more with blowing or drifting snow. And that caused some travel problems yesterday, 67-mile-an-hour wind gusts at the St. Louis airport, right now, de-icing there because of the cold.

Other air traffic delays, ground traffic stops and LaGuardia, two-hour delays, and three-hour delays already at Newark. Those are just going to continue to pile up, a lot of snow behind us. Michigan, parts of Indiana, blowing, drifting snow, wind gusts on the shores much lake Michigan over 50 miles an hour. Imagine the waves.

All rain from Trenton up through Bridgeport, some heavy at times. Sleet mixing in and snow across parts of the Canadian border, winds across a large swath. Wind gusting to 50 miles per hour, enough to do some damage. Here are your snow totals expected in the next 48 hours or so. Along the mountains and across the east side of the Great Lakes, mostly rain today. We're not looking ahead toward next week, but there is a chance of snow after Christmas. Let's get through today.

O'BRIEN: Exactly. My strategy. Let's get through today, worry about it when we're there.

The wind and rain so powerful in Alabama, they uprooted a Mercedes dealership's massive billboard. That's the billboard right there. It sent it crashing into an SUV, 50 cars damaged. Strong winds flipped some of the cars and downed power lines and debris damaged other cars as well.

Other stories to talk about this morning, John Berman has those. Good morning.

BERMAN: Thank you, Soledad. In two-and-a-half hours from now, everything will stop in Connecticut and in states across the country, a moment of silence at 9:30 Eastern. Church bells will toll 26 times in their honor.

CNN's Poppy Harlow is live in Newtown this morning. Good morning, Poppy.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Good morning, John. You know, at 9:30 a.m. Eastern, many people will stop. We'll have a moment of silence in Newtown in cities across America and around the world. As you mentioned, those beautiful church bells will toll for all of the victims of the horrific shooting here.

The governor here has asked for this to be a day of mourning, we can't understand what these families are going through, but we want to stand near them. The president, President Obama will also observe the moment of silence, and governors from at least 28 states have asked all of their residents to do the same. John, of course we'll bring that moment live on CNN.

But the president has shifted to focus additionally on gun control in this country. That debate raging in the wake of this tragedy, the White House releasing a video from the president, just this morning. The president acknowledging that he is a supporter of the Second Amendment, the right to bear arms, saying that most gun owners are indeed responsible, but also making very clear where he draws the line.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: Here is what I think we should do. This week, I called on Congress to take up and pass common sense legislation that has the support of the majority of the American people, including banning the sale of the military style assault weapons and making sure criminals can't take advantage of legal loopholes to get their hands on a gun.

(END VIDEO CLIP) HARLOW: That debate will rage on. We're expecting to hear from the NRA, holding a press conference in Washington later this morning. Today, John and certainly at 9:30, it's about this town and these people and these families.

BERMAN: Poppy, 9:30 a.m., a chance for us all to pause and remember. Poppy Harlow in Newtown.

Meanwhile, First Lady Michelle Obama, writing an open letter published in "The Hartford Courant." She writes "As a mother of two young daughters, my heartaches for you and your families. Like so many Americans, wish there was something, anything, I could to say to ease your anguish."

A major news conference today. The National Rifle Association will share its ideas on how to prevent future gun tragedies in its first statement after the Newtown shootings. They NRA pledged to, quote, "make meaningful contributions" to help make sure it never happens again.

A U.S. citizen has reportedly been arrested in North Korea. It's unclear what his crime may be. State media reports that the man entered North Korea as a tourist on November 3rd. They said he was detained and they discovered evidence of some crime that he allegedly admitted to. Officials from the Swedish embassy, which looks after U.S. interests there, did visit him today.

So, could there be another Senator Ted Kennedy from Massachusetts. A family friend says Ted Kennedy Jr. is seriously considering running if John Kerry becomes secretary of state. Some Democrats think Kennedy's name not to mention his money could help him beat Scott Brown in a special election. Brown lost his race for re-election, but many suspect he could get in the race to replace Senator Kerry if he heads to the state department.

So the pro hockey season is wasting away before our very eyes. The NFL canceled games through January 14th because labor negotiations have frozen over. More than 600 games gone. Players may claim the lockout is illegal and sue the owners. It just doesn't matter, half the season gone.

O'BRIEN: Fans just left.

BERMAN: What fans at this point? We have all given up on these guys.

O'BRIEN: John, thank you.

Christine, what do you have in business?

ROMANS: U.S. stock futures down 150 point right now, a big sell-off expected in the stock market. Stock futures down sharply, more than one percentage for all three major indices. World markets are down as well. They're disappointed by the impasse in the fiscal cliff talks in Washington.

And the run on guns following the Newtown shooting is intensifying. Gun shops nationwide are selling out of military style rifles like the one used in the school shooting, including in Newtown, Connecticut. Listen to what one shop owner told CNN affiliate WTIC.

(BEGIN VIDEO CLIP)

RON RANDO, RON'S GUNS STORE OWNER: I could sell more if I had them. I sold all I had. A kid come in here he yesterday, grabbed an AR-15 off the shelf, walked over, laid it down. I mean, that thing costs $1,200.

(END VIDEO CLIP)

ROMANS: One gun analyst I spoke to said there has been a spike in the semiautomatic military style rifles.

(BEGIN VIDEO CLIP)

ROMMEL DIONISIO, SENIOR VP OF EQUITY RESEARCH AT WEDBUSH SECURITIES: There has been a sharp consumer preference shift in the last several years to tactical rifles, modern sporting rifles, over the traditional bolt action rifles.

(END VIDEO CLIP)

ROMANS: He says it's because they are easy to shoot, have a high magazine capacity. It's the reason why the military uses these types of firearms, the reason why consumers like them as well. By the way, they are the second most preferred gun on of Mexican drug cartels as well. Gun owners expect tougher gun laws on what has been the very fast growing part of the market. Some of the major retailers that have taken them off the Web site aren't advertising them anymore, they are also selling out.

O'BRIEN: They're taking them off the Web site.

ROMANS: They've taken the advertising off, but they are still selling them in the store. But gun enthusiasts are going and buying them up.

O'BRIEN: Thank you, Christine.

Still ahead on STARTING POINT, the GOP implodes over Plan B. And there are just days until we go over the fiscal cliff. DNC chair Debbie Wasserman Schultz will join us to talk about whether it's possible if Democrats and Republicans can get together and negotiate.

And a potential terror alert because of the movie "Zero Dark Thirty," why some worry it will spark extremists to act. That's ahead.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. John Boehner's Plan B has imploded. House Republicans didn't even get to vote on it because they realized there wasn't enough support. Instead, the whole thing was called off and then the House went on recess for the holidays.

Here's what the speaker said: "The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it's up to the president to work with Senator Reid on legislation to avert the fiscal cliff."

Let's get right to Florida Congresswoman Debbie Wasserman Schultz. She's the chairwoman of the Democratic National Committee. It's nice to have you with us. Great to see you again.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: ThankS, Soledad. Good to see you, too.

O'BRIEN: All right, so let's start with your reaction to what happened last night.

WASSERMAN SCHULTZ: Well, you know, it's frustrating, it's baffling. We've been at the negotiating table for weeks. President Obama has moved really in a mountainous direction towards the Republican position, saying that, no, we're not going to go with $250,000 in terms of raising the tax rates, we'll go with $400,000, $1.2 trillion in spending cuts. And last night, even on the spending cuts plan of Speaker Boehner's Plan B, he only was able to pass it through a lot of arm twisting by six votes. On the spending cuts portion. And we know what happened with the tax rates of people making more than $1 million, which, to be honest with you, was actually a tax break of an average of $50,000 for people who make more than $1 million.

So this is baffling and frustrating. I've don't know --it's unfathomable to understand. I've had conservative Republicans stop me at home in my district and say, "Look, I don't agree with you on everything, Debbie, but you have to come together." And they are right, we do.

O'BRIEN: So then what's the path to that? Because what you heard in the statement from Speaker Boehner was that now it goes to Senator Harry Reid.

WASSERMAN SCHULTZ: That's utterly irresponsible. That is the speaker throwing up his hands and abdicating his responsibility to come to the negotiating table, sit with President Obama, work out the remaining really short-distance they had to go. It's really challenging to understand why instead of continuing to do the hard work of the last few steps that they had to take to get to a deal that the speaker instead decided to jam us and put something on the floor that they couldn't pass out of their own caucus because they're so extreme.

O'BRIEN: The Republicans certainly in the House can't pass what they want, so take away is both sides have to come together. What is it going to take? It's not brain surgery. Something has to happen and really, really soon to bring both sides together. What is the answer to that?

WASSERMAN SCHULTZ: The speaker needs to come back to the table and if the president's last offer was not enough for him, then what happens in the negotiation is he needs to make a counteroffer. What happens in compromise, you get ever closer together and can finally find common ground. But you can't get to common ground if you're not at the table, and jam -- if you're not a negotiator, a person you are not negotiating with, in another way. That's not negotiating in good faith.

O'BRIEN: A lot of what brings this whole thing is who is left holding the bag who gets blamed with --

WASSERMAN SCHULTZ: That's right.

O'BRIEN: If you look who gets more responsibility, a CNN poll, who would be more responsible for the fiscal cliff, GOP in Congress, 48 percent, Obama, 37 percent, both, 11 percent. As much as it looks like by a decent margin Republicans will get the blame, still a massive percentage that blames the president and blames both. Not good for anybody.

WASSERMAN SCHULTZ: This is not about blame. We could go back into session right now and pass the bill the bill the Senate sends us that we could agree on, which cuts taxes for 98 percent of Americans and 97 percent of small businesses.

O'BRIEN: The reason Republicans don't want to do that they feel that solves one part of it and doesn't deal with spending.

WASSERMAN SCHULTZ: But they could --

O'BRIEN: At the end day of the, you know, I'm not an elected official, but even I understand, it's taxes and spending and we have the nation's budget and the math has to work out.

WASSERMAN SCHULTZ: Of course.

O'BRIEN: And the spending, there will be no leverage on the spending part of it if they go ahead and pass the tax part of the.

WASSERMAN SCHULTZ: Last night, Soledad, they had a spending cuts Bill that their own speaker put on the floor that they couldn't pass -- that passed by six votes. It's mind boggling. Last summer I voted for $1 trillion in spending cuts only, to make sure we didn't default to raise the debt ceiling and not jeopardize the full faith and credit of the United States. That's $1 trillion in spending cuts that I spent my career opposing. I had to go home and sell it to my progressive constituents and say we have to be responsible. It can't be my way or the highway. That's what president has been saying, what Democrats have been saying, we're ready to vote for things that are painful for us that we actually would prefer not to do.

The Republicans need to be responsible, come together, realize we're all going to have to give something up so we can make sure we don't go over the fiscal cliff, make sure we have certainty for the middle class, and that all of the burden of the solution can't be balanced on the back of the middle class.

O'BRIEN: You have 11 days to get it together.

WASSERMAN SCHULTZ: We've got to get it done.

O'BRIEN: Debbie Wasserman Schultz, thank you for being with us.

WASSERMAN SCHULTZ: Thank you.

O'BRIEN: Thank you, likewise, and happy holidays.

Speaker Boehner will hold a press conference at 10:00 a.m. this morning. No word exactly on what he's going to cover. We can imagine what some of the questions will be about. We'll get more details on the news conference and bring it to you in the hours ahead.

Still ahead this morning, an Olympic athlete leading a double life. We'll tell you what this all-star runner was charging for. And it wasn't running lessons.

(COMMERCIAL BREAK)

BERMAN: Welcome back to STARTING POINT. A few stories to tell you about, including what a lot of people talking about. Three time Olympian Suzy Favor Hamilton says depression drove her to work as a $600 an hour prostitute. She confirmed on Twitter the story first come out by "Smoking Gun." She says it was a huge mistake.

The U.S. is on alert for Islamic anger with the release of "Zero Dark Thirty," the movie about the hunt for Osama bin Laden. This is according to "The Washington Times". The movie depicts some harsh interrogation tactics the film claims were used on Muslim detainees. A senior defense official tells the times the U.S. doesn't expect violent protests, but forces are always on alert.

President Obama's inaugural will be festive. The president is scaling back the celebration, just holding two inaugural balls after sworn in January 12th. The ceremony on January 21st, and this is the fewest number of official parties in 60 years. The president had 10 in 2009.

O'BRIEN: Thank you, John. Still ahead on STARTING POINT, a massive storm system has blanketed the Midwest, causing lots of damage and a big headache too for holiday travelers, and it's not over yet. We'll give you updates.

Plus Instagram users win. The company does a big about-face on its controversial new policy that would let them sell your pictures. We're back in just a moment.

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