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Upset Pilot Apologizes to Passengers; U.S. to Hit Debt Ceiling Monday; Pagano Back at Practice; The "Fiscal Cliff" and Your Taxes; Top Crime Stories of 2012
Aired December 27, 2012 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The NRA's president David Keene will join me in THE NEWSROOM just about 30 minutes from now.
It is 30 minutes past the hour. Here are stories we're watching right now in THE NEWSROOM:
Just seconds ago, Wall Street opened for business. Investors worried about the impending fiscal cliff now have other issues to consider. The weekly jobless rate is in and nearly -- and it's at its lowest level in four and a half years. Economic reports on housing markets, consumer confidence and manufacturing also due out this morning.
Some advice for air travelers, check your flight status before you leave home today. Winter storm now pounding the Northeast has forced the cancellation of more than 360 flights today. That's in addition to the more than 1,700 cancellations yesterday.
Unbelievable video out of Shanghai, China, where a 33-ton aquarium full of sharks exploded, sending sharks flying everywhere and terrified shoppers running for their lives. Sixteen people suffered cuts and bruises. No one was seriously hurt. Three lemon sharks were killed in the incident, though.
Just five days left until the United States crosses over the so-called fiscal cliff, and just in case Washington doesn't make a deal, we're going to get you ready. Every day this week, we're looking at how it will affect you and your pocketbook. Today, we're focusing on that potentially higher tax bill.
Ryan Mack is president of Optimum Capital Management. He joins me via Skype from Detroit.
Good morning again, Ryan.
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Good morning. How are you doing?
COSTELLO: I'm doing pretty good, but we have to talk about tax rates. And after that, I don't know how I'll be doing. So tell me --
MACK: I understand. I understand.
COSTELLO: How much higher could tax rates go? MACK: Well, we're looking at the top tax rate going to as high as 39.6 percent from 35 percent, there were discussions of maybe compromising a level of 37 percent. Capital gains taxes increasing from 15 percent to 20 percent pre-Bush tax levels. Then, even estate taxes going as high as 55 percent with the $1 million exemption, and currently, the 35 percent with a $5 million exemption.
So we're definitely going to see a big change coming forward.
COSTELLO: So when will we feel it?
MACK: Well, we won't feel it until 2014, when the majority of it, when the individuals file their 2013 taxes. The payroll tax cut was for individuals earning $50,000 a year, might fill a $85 bump or less in their total check as far -- as soon as the end of January. But again, the majority of it not until 2014.
COSTELLO: So is there any way you can avoid higher taxes, any tricks?
MACK: Well, essentially what individuals are doing is almost like a reverse philosophy, where previously individuals wanted to take as many deductions as they are right now to reduce their taxable base but individuals what they're realizing is that income levels, if they can figure out how to accelerate their income now and then take the deductions next year, for instance, using -- making their charitable deductions, if you haven't made them already, make them next year and take that deduction next year.
Or essentially, if you are due for a bonus next year, see if you can get the bonus this year and make your income a little bit higher this year and take advantage of the lower taxable rates.
Or capital gains taxes, if those go up, you want to -- if you have an appreciated stock in your portfolio, you want to make a sale, make it this year as opposed to next year and consequently losses -- take those losses in 2013 so you can write that off against an income level that's going to be taxed at a higher rate.
COSTELLO: OK. I'm going to ask you this final question because there's a new idea floating around out there. Our Dana Bash talking to her sources on Capitol Hill. She says there's kind of a push for us to go over the fiscal cliff and then taxes will rise, right? But then, Congress will reconvene on January 3rd and vote to cut taxes. Is that a viable solution in your mind?
MACK: You know, it kind of is, and that's pretty much what I feel is going to happen. But the simple fact that when it does is that they have a little bit of wiggle room. Again, the majority of this is not going to be felt until 2014 for the majority of the income tax rise. So that causes Congress to force them to make a deal knowing that we actually are operating under a higher tax rate right now, even though Americans won't feel it.
So it's almost like an additional leverage for those who actually want to make a deal and get something done. I just want somebody -- like Starbucks, we all just need to come together. COSTELLO: And quit kicking the can down the road, darn it.
COSTELLO: Ryan, thanks so much for being with us this morning.
MACK: Thank you.
COSTELLO: Actually, Ryan has been with us all week tackling the fiscal effects on your pocketbook. Tomorrow, we'll look at what the fiscal cliff means for your retirement.
From the strange case of the technology pioneer John McAfee on the run, to so many tragic shootings, we have the top crime and punishment stories of 2012 next. That's next.
COSTELLO: Sadly, 2012 had its share of crime and punishment. Here's Randi Kaye with the top 10 stories of 2012.
RANDI KAYE, CNN CORRESPONDENT: The year turned out to be one full of some incredible stories, some unfolded and sparked international outrage, and still as others developed, the details were almost too hard to believe.
Crimes were committed and in some cases justice was handed down, but for some victims, they may never know what justice feels like.
Here is our top 10 list of crime and punishment stories of 2012:
COSTELLO: A manhunt is under way for McAfee software founder John McAfee.
ALINA CHO, CNN CORRESPONDENT: The computer whiz and millionaire is wanted for questioning in the murder of an American ex-patriot in Belize.
UNIDENTIFIED MALE: Police are pursuing multiple leads they say and they claim they just want to talk to McAfee as part of their investigation and nobody seems to know where he is.
KAYE (voice-over): Yes, this one was strange, and only got stranger after weeks went by and no one could find him. Well, not no one.
ERIN BURNETT, ANCHOR, CNN'S "ERIN BURNETT OUTFRONT": Breaking news right now, fugitive software tycoon John McAfee wanted for questioning in the murder of his neighbor in Belize has been on the run for three weeks from authorities. But our Martin Savidge found him.
KAYE: McAfee claims he didn't kill his neighbor.
Number nine: the day darkness fell under a crystal clear August sky in Wisconsin. DON LEMON, CNN ANCHOR: The very information that we know, seven people are dead at this point. Three of them, we're told, outside of that temple.
KAYE: The gunman on a rampage at a Sikh temple, U.S. Army veteran, Wade Michael Page.
After shooting one police officer multiple times --
UNIDENTIFIED MALE: Shots fired, shots fired at officer.
KAYE: Page was shot and killed by another officer.
Number eight: the massacre in Kandahar Province.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: The United States takes this as seriously as if it was our own citizens and our own children who were murdered.
KAYE: The accused gunman, Army Staff Sergeant Robert Bales. Military officials say Bales left his Afghanistan outpost on a night back in March and single-handedly attacked two villages. Opening fire and killing 16 Afghan civilians in their homes and wounding six others.
Number seven: striking a deal in the shooting that struck a blow to the nation.
WOLF BLITZER, ANCHOR, CNN'S "THE SITUATION ROOM": The man who shot Gabrielle Giffords and killed six people in a rampage in Tucson last year pleaded guilty to 19 charges.
KAYE: Jared Loughner sentenced to seven consecutive life terms plus 140 years. His guilty plea means he will avoid the death penalty.
Chicago's murder rate surged this year to levels not seen in almost a decade. By December, close to 500 people were killed in the city.
UNIDENTIFIED MALE: It is just not the gang bangers. Right now, innocent kids and women are being shot on a daily basis.
KAYE: Averaging more than a murder a day, most of the crime happened in a few specific areas.
UNIDENTIFIED MALE: The entire city suffers when that violence happens and this idea of not in my backyard is not OK.
DEBORAH FEYERICK, CNN CORRESPONDENT: We start this morning with breaking news from Italy.
KAYE: A massive cruise ship, the Costa Concordia, turned on its side after running aground in January, 32 passengers and crew were killed, the captain says it was an accident, not a crime, but he now faces charges.
The ship's captain is being investigated for manslaughter and abandoning ship. He claims he tripped and fell into a lifeboat. The sentencing of Jerry Sandusky.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Carol, Jerry Sandusky will die in jail.
KAYE: A judge sentenced the 68-year-old former Penn State assistant football coach to at least 30 years in jail after he was convicted of 45 counts of child sex abuse. Despite the mountain of evidence against him, Sandusky continues to proclaim his innocence. He's in the process of appealing his sentence.
Number three: the shooting of unarmed 17-year-old Trayvon Martin.
UNIDENTIFIED MALE: My son left Stanford, Florida, in a body bag, while George Zimmerman went home to go to sleep in his own bed.
KAYE: Accused gunman George Zimmerman claims self-defense in a case that sparked international outrage and ignited racial tensions. Trial is set for June.
Number two --
UNIDENTIFIED MALE: We need rescue inside the auditorium, multiple victims.
UNIDENTIFIED MALE: I've got seven down in theater 9, seven down!
KAYE: July 20th, just past midnight, terror inside Theater 9.
JOHN BERMAN, ANCHOR, CNN'S "EARLY START": Aurora, Colorado, nine miles east of Denver, where there has been a mass shooting at a movie theatre.
KAYE: Prosecutors say James Holmes donned protective gear, threw tear gas and began firing.
In the end, 12 people killed, 58 others wounded. Holmes faces 152 charges. Many victims continue to recover, while others will never recover the loss they suffered that night.
And number one --
BLITZER: Unimaginable horror grips the nation in one of the deadliest school shootings in U.S. history.
KAYE: Tragedy at Sandy Hook Elementary.
LEMON: This is unspeakable what happened in this town.
KAYE: Innocent children shot dead in their classrooms, the victims, sixteen 6-year-olds, four 7-year-olds, along with six adults.
UNIDENTIFIED MALE: Emilie's laughter was infectious and all those who had a pleasure to meet her would agree this world is a better place because she's been in it. KAYE: In Newtown, Connecticut, an outpouring of kindness and compassion, while a nation faced hard questions about mental health and guns, as the president issued an emotional call for action.
OBAMA: For those of us who remain, let us find the strength to carry on and make our country worthy of their memory.
KAYE: Randi Kaye, CNN, Atlanta.
COSTELLO: Forty-six minutes past the hour.
Gifts have been flooding into Newtown, Connecticut in the wake of the Sandy Hook Elementary School shooting and now the town is asking people to please stop. A town official says the outpouring has been heart-warming but they are overwhelmed by the volume of gifts pouring in. They're asking people to express their sympathy by donating items to those in need in other communities.
A grand jury indicted Dallas Cowboys defensive tackle Josh Brent in a crash that killed his teammate Jerry Brown. Brent has been charged with one count of intoxication manslaughter. The charge carries a maximum sentence of 20 years in prison if he's convicted but Brent could be eligible for probation.
Newly-released documents show the FBI viewed the Occupy Wall Street movement as a potential threat and had counterterrorism agents from Alaska to Florida keeping watch. Agents were in touch with police, businesses and universities nationwide, even before demonstrations began in New York City last year.
The winter storm that hit Dallas affected air travel out of DFW airport causing a nightmare scenario for passengers on one flight. CNN affiliate WFAA in Dallas reports the American airlines flight sat at the gate for nearly five hours. One passenger said the airline told them they could get off but also warned them that they could be leaving any minute. The pilot not only apologized to his passengers, but took a shot at those who kept the passengers stuck on the plane.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: It's beyond reproach. I have no, no words to tell you that, how sorry I am for all of this. Decisions are being made way above our -- our heads and that by people that obviously, in my humble opinion, don't have a clue what they're doing.
(END AUDIO CLIP)
COSTELLO: Wow. American Airlines had this statement, "Our -- our hindered ability to de-ice and approach aircraft with ground equipment jetways and ramp stairs created serious delays for aircraft inbound and outbound. Operating safety was our focus." And that's the quote. In Washington, the Senate is about to reconvene and when it does, the Senate Majority Leader Harry Reid is expected to weigh in, in just about ten minutes on the looming fiscal cliff. Reid and his fellow senators are now under intense scrutiny after Republican House Speaker John Boehner said the Democratic-controlled Senate must act first on proposals already passed by his chamber. We will bring you Reid's remarks as they happen.
And as the clock ticks down toward the fiscal cliff, Washington has a new worry -- the debt ceiling; Treasury Secretary Tim Geithner says the United States is going hit its legal borrowing limit on Monday.
Alison Kosik is in New York. I feel like it's Groundhog Day.
ALISON KOSIK, CNN CORRESPONDENT: I know it really is. What's old is new again, right, Carol? So let me kind of back up the bus here. You know we start talking about the debt ceiling and I know people's eyes just glaze over. So let me take a minute and tell you exactly what the debt ceiling is. What it is it's a cap that's set by Congress of the amount of money the federal government can borrow.
Right now the ceiling is at $16.394 trillion and Treasury Secretary Tim Geithner said earlier this week we could hit that debt ceiling on Monday, on New Year's Eve and the Treasury will soon start using what it says are extraordinary measures to keep the government from going over the limit. S just to give you an example if you're a government worker, that can mean that investments that go into your pension could be suspended, but you know, that won't even buy much time.
So then the next question is, what could happen if we do go through the ceiling? Well Treasury -- the Treasury won't be able to pay the country's bills in full or it won't be able to pay them on time and that means that the U.S. could default on some of its obligations. What that would do, it would cause a huge ripple effect that could cripple the economy, it could send the markets into a tail spin. That would hit your retirement accounts and any other money that you have in the marketplace.
Plus it makes a lot more difficult for banks to give out loans for things like cars or student loans. And then on top of all that, government benefits could be disrupted. So if you get a Social Security check or military payments right now, those may not come in.
And who can forget Carol lawmakers most recently raised the debt ceiling last summer but of course not until the last limit that cost a credit downgrade and a huge sell off in the markets. So guess what it looks like it could come down to the wire yet once again. You can thank our elected leaders for that -- Carol.
COSTELLO: Yes I don't think people want to exactly thank them. We can't say what they want to do on television.
KOSIK: I know.
COSTELLO: Alison Kosik, thanks so much.
"Talk Back" question for you today. "Will America ever come together on guns in this country?" Your responses next.
COSTELLO: Our "Talk Back" question of the day. "Will America ever come together on guns?"
This from Anthony, "I don't think so. So many people hold their Second Amendment rights as high as their rights to free speech, freedom of religion and freedom to petition."
This from Abdul, "It will always be split but I believe some type of reform will happen in the coming years. Americans love their guns but I think they love their children more. At least I hope."
This from Joel, "No, we won't. It's hard enough getting people of the same political persuasion to agree on gun issues. I'm very lefty liberal, but I don't think stricter gun controls laws will do anything productive."
This from Mitch, "This like abortion will always be a fight so to speak with each side believing they are right. Absolutely nothing productive will ever be accomplished."
And this from Harold, "I have never owned a gun. I respect the responsible gun owners but we as Americans have to find some common ground and meet in the middle to find a better solution to minimize or possibly diminish the gun violence in our world."
Please keep the conversation going, Facebook.com/CarolCNN or tweet me @CarolCNN. Coming up in just about five minutes I'll talk exclusively with the NRA's president David Kean.
COSTELLO: The New York Knicks rebounded from their Christmas Day loss thanks to late-game heroics from J.R. Smith. The Knicks were playing Phoenix without Carmelo Anthony and Raymond Felton. The Suns have a two-point lead when Smith used a fancy spin move to get free. He hit the jumper from 15 feet away to tie the game at 97. And then with the game still tied and one second to go, Jason Kidd passed to Smith and he hits it. The fade away shot at the buzzer. Knicks win 99-97. They are locked with Miami at the top of the NBA Eastern Conference.
Indianapolis Colts head coach Chuck Pagano was really upbeat after his first practice with the team since returning from leukemia treatment.
(BEGIN VIDEO CLIP)
CHUCK PAGANO, COACH, INDIANAPOLIS COLTS: Awesome, great feeling, a little bit tough getting up. I -- I've been sleeping up late but I'm getting used to that 5:00 wake-up call, but it's so good to be back in the fold. And today coming in and doing a normal Wednesday for myself and having a team meeting and then offense/defense meeting has come out here I have a walk through, it's just been fabulous.
(END VIDEO CLIP) COSTELLO: Pagano hopes to be on the sidelines for the Colts regular season finale on Sunday against Houston.
And check out the reaction of this Alabama football fan to his Christmas gift. He thinks the gift is a hat but the real present is inside the hat.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We're going to the game, pa. We're going to the game.
(END VIDEO CLIP)
COSTELLO: That's right they are going to the BCS national championship game between Alabama and Notre Dame. Dan Buchanan's son really came through for the old man. Those tickets aren't cheap. The game is sold out. If you find something on the resale market you'll pay at least $1,000 for a nosebleed seat. He's one lucky guy.
That's a look at sports this morning.
The next hour of CNN NEWSROOM starts right now.
Stories we're watching in the NEWSROOM. The Second Amendment and public safety -- is it possible to strike a balance between the right to bear arms and keeping Americans safe. The president of the NRA David Kean joins me with his thoughts.
Last week Congress passed a law that --