Return to Transcripts main page


Dangerous Storm Batters Northeast; Senators Back to Work Today; Interview with Senator Richard Blumenthal of Connecticut; Inside The Oracle's Office; Mubarak Transferred to Military Hospital for Treatment

Aired December 27, 2012 - 08:00   ET


ALI VELSHI, CNN ANCHOR: It is Thursday, December 27th. STARTING POINT begins right now.

All right, Roland Martin joins us. He is the host of "Washington Watch", "Washington Watch With Roland Martin," a little hot this morning. Ron Brownstein is the editorial director at "National Journal". Will Cain, in addition to playing the Grinch, as a conservative holding up the fiscal cliff deal, is also an analyst for "The Blaze".

ROLAND MARTIN, CNN POLITICAL ANALYST: He's a ball of fire this morning.

VELSHI: Yes, he is.

Our STARTING POINT -- before we get to all of that is some torture for holiday travelers as a powerful winter storm smothers the Northeast this morning. Six states are under winter storm warnings -- Pennsylvania, New York, Massachusetts, New Hampshire, Vermont and Maine.

By tomorrow, a lot of New Englanders could be buried under 18 inches of snow or more and over 200,000 customers in Alabama and Arkansas are already without power as the storm's violent winds are sure to leave a lot more people in the dark by the end of the day. Over 1,700 flights had to be canceled yesterday. Over 200 have already been taken of the board this morning. Six deaths now being blamed on this system since Tuesday, and the threat is far from over.

Ines Ferre is live in Syracuse, New York, for us this morning -- where it continues to come down, Ines.

INES FERRE, CNN CORRESPONDENT: Yes, that's right, Ali. It's continuing to come down, but it's lighter than what we've seen in the last couple of hours.

And I'm in downtown Syracuse. Plows have come through this area and cars have been coming down through this area. You can see some slush on the roadway, and what you're also seeing is accumulation from some previous storms, and the last four days, Syracuse has gotten 13 inches of snow, and this snowstorm is expected to leave about a foot of snow. So this is what you're seeing on the ground here. Now, officials say that Syracuse is actually used to getting a lot of snow. There are a lot of snow resorts in the area as well. So they actually welcome this type of weather. But for cleaning the streets, that's a different story because it's a lot of snow in a short amount of time.

One thing that is helping them is the fact that this is a holiday week, so this is a nightmare for air travelers, but -- and on the streets as well, but the fact is there's no schools open this week and a lot of offices are naturally closed. So that's certainly alleviates the problem on the streets, Ali.

VELSHI: All right. Ines, we'll stay with you this morning -- Ines Ferre in Syracuse.

Let's go to Washington now, strong of different type. We're just five days away from going over the fiscal cliff. Here's what you might have missed: President Obama left Hawaii early to be back in Washington today. The Senate is also coming back from Christmas vacation to work on a deal.

Sources tell us that Majority Leader Harry Reid will push a scaled back version of the fiscal cliff package that President Obama laid out late last week and no word yet on when the House might come back. Democrats say the only hope we have of something getting through the House, the Senate, and the White House may be a last-minute deal.

CNN Radio's Lisa Desjardins is following developments on Capitol Hill. The big question is how a deal gets done, Lisa?

LISA DESJARDINS, CNN RADIO: Right. It is possible, if folks out there can believe, for a deal to be done before January 1st. It is not easy though for a couple of reasons.

One, the House has a 72-hour rule. They say the legislation needs to be presented to the public for 72 hours before they vote, but you know how that works, Ali, they can get around that. They have in the past voted around that rule.

The Senate has filibuster problems potentially. Sometimes, it can take up to a week to get through the several different votes that are needed to overcome a filibuster. But if there's no filibuster and if the House decides not to deploy that 72-hour rule, they still could get a deal done in these next five days.

One last time line problem, though, Ali, is the House we know has told its members they will have at least 48 hours notice before they come back to Washington. Today's Thursday, they have not given that notice yet, so the soonest that the house could come back to deal with this issue would be Saturday -- Ali.

VELSHI: All right. What happens if we -- if we go over the cliff? There are some logistical issues. I mean, this becomes problematic.

DESJARDINS: Yes, let's get down to what people want to know, because we are getting close to the cliff and a lot of people in Washington think we may go over it.

So, here's what we know will happen. January 1st, tax rates go up for most every American. But, logistically, that's a problem for payroll companies because they have to decide are they going to change what they withhold from our paychecks starting January 1st or they're going to keep with the old rates. For now, it looks like they will keep with the old rates. That's what my colleague Jeanne Sahadi is reporting. But, of course, it's a tough decision. It will be a scramble for those payroll companies.

Also, Medicare a pay cut could go into effect in the middle of January for Medicare doctors, unemployment starting December 29th, Ali.


DESJARDINS: That's when we will see those benefits start to be cut.

VELSHI: Most benefits are 26 weeks. There was a federal emergency extension that took it to 79 or 99 weeks, that stops immediately if that's not fixed.

Lisa, thanks very much. Lisa Desjardins covering this for us in Washington.

Piling on the concerns, Treasury Secretary Tim Geithner has warned Congress that the U.S. will reach its debt ceiling on Monday. That's when the government reaches its legal borrowing limit and further payments cannot be made.

Now, Treasury can keep the government operating for a few weeks using emergency measures but Congress needs to act on this, too, to avoid a full blown debt crisis -- the sort of which we almost saw in August of 2011.

In a couple of minutes, we'll talk to Connecticut Senator Richard Blumenthal about this big mess in D.C.

But, first, Alina has got the rest of today's top stories. Good morning.

ALINA CHO, CNN ANCHOR: Good morning. We have this just in to CNN, Alina. We're re getting word of a plane skidding off a runway. It happened at MacArthur Airport in Islip, New York. That's in Long Island. In fact, News 12 Long Island reports it's a Southwest flight 4695 headed to Tampa, Florida. One hundred twenty-nine passengers and five crew members on board, no injuries reported. Passengers are being bussed back to the terminal presumably and hopefully getting on another flight soon.

Growing concern this morning about the health of former President George H.W. Bush. He was moved into the intensive care unit of his Houston hospital on Sunday because of an elevated fever and apparently it is not breaking. The nation's 41st president is on a liquid diet and his condition is listed as guarded.

Toyota has agreed to pay a $1.1 billion settlement to settle a class action suit over sudden acceleration issues. Under the deal, Toyota will install a brake override system in affected cars. It will also set up a fund of $250 million to compensate former owners for their car's reduced value due to all of that bad publicity.

Late Senator Daniel Inouye's successor will be sworn in later today. Hawaii Governor Neil Abercrombie appointed his Lieutenant Governor Brian Schatz to fill the seat. That announcement came last night. And a White House official says he's flying to D.C. with President Obama.

Abercrombie was widely expected to appoint someone else, Congressman Colleen Hanabusa to take over. Before he died, Inouye named her as his successor.

We've been telling you about the brutal weather delays at airports all over the country. It is so bad now that the pilots are getting fed up, including one who was caught on tape throwing his co-workers under the proverbial fuselage in Dallas. CNN affiliate WFAA reports one American Airlines flight stranded at the gate for nearly five hours prompting this unusual apology from the pilot to his passengers.


PILOT: It's beyond reproach. I have no words to tell you how sorry I am for all of this. Decisions are being made way above our heads and by people that obviously, in my humble opinion, don't have a clue what they're doing.


MARTIN: Such honesty.

VELSHI: Love it.

CHO: American Airlines, by the way, saying operating safely is their chief focus. Naturally, they're saying that but good for the pilot.

RON BROWNSTEIN, CNN POLITICAL ANALYST: With all due respect he was throwing not his co-workers but his bosses under the bus, which is a very different thing.


VELSHI: Potential safety hazard of pulling that plane back to the gate or not.

CHO: Right.

VELSHI: It's nonsense when airlines say stuff like this. Good on this guy, I hope he gets not an ounce of discipline. If you do, let us know at CNN. And that's ridiculous. Good for him.

All right.

MARTIN: Tell them how you really feel, Ali. VELSHI: No, they used to waste everybody's time and they put the fines in. And the airlines said it would mess everything up. Guess what? It messed nothing up, and planes take off on time. All right.

MARTIN: Speak, Ali. Speak.

VELSHI: I'm going to speak about the fiscal cliff. The other thing is kind of annoying. Just five days left until we hit the fiscal cliff. What happens to your bottom line if you do?

Well, here you go -- on January 1st, all the Bush tax cuts will expire, all of them, with taxes going up an average of 1,600 bucks per household. There are a lot of ways to calculate that but that's what we've come up with.

The payroll tax holiday also expires. That means the tax burden will rise an average of $700 per household. Extended unemployment benefits, the ones we were talking about with Lisa expire. So collection of unemployment benefits will shrink from 79 or 99 weeks back to 26 weeks in six months.

The Medicare doc fix expires. That means a 27 percent cut in physician payments. And the alternative minimum tax will expand to 27 million more Americans for whom it was not intended.

Obamacare taxes hit. That means a 0.9 percent jump in Medicare payroll taxes for those earning $200,000 or more. That is likely to happen regardless of whether or not there's any fix.

But I want to bring in Senator Richard Blumenthal, a Democrat from Connecticut. Senator, thanks for joining us. We've got five days to go. You think we're going to get a deal?

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: I'm really hopeful. I think there's still sufficient time to reach a deal if we use the common ground that we have and that common ground is that nobody wants to go over the fiscal cliff. Nobody wants the 98 percent of Americans who will see their taxes rise hugely -- those people earning less than $250,000.

And we can avoid that kind of tax increase if we seek that common ground, and come together around the concept. In fact, the Senate bill that was sent to the House some time ago, all the House has to do is come back to Washington, as we are doing today, and vote on that bill. It could be done by a bipartisan majority.

VELSHI: Look, that's the big question: can it? You know, we keep talking about the meetings between Obama and Boehner. One of which hasn't happened in a few days, but it really isn't a deal between Obama and Boehner, because those two guys say what they want, and then Boehner goes back to his caucus and can't get a deal.

BLUMENTHAL: That's why a bipartisan majority is absolutely necessary. If the Senate bill is brought to a vote on the House floor, it will be passed by a majority of Democrats and some Republicans. But the speaker wasted last week on a bill that had no prospect of success -- in fact never even was brought to a vote -- and now we're down to the last few days. The deal to extend these tax cuts on everyone's first $250,000 of income -- remember it's benefits people who earn more than $250,000 because it extends tax cuts on their first $250,000. So, somebody earning $300,000 or $350,000 in Connecticut will benefit from it.

VELSHI: Senator, Ron Brownstein wants to ask a question.

BROWNSTEIN: Senator, let me play devil's advocate here and ask you, when those tax cuts originally passed in 2001, virtually every Democrat in the House and Senate voted against them. Why do you think it is appropriate to permanently extend the Bush tax cuts for families under $250,000? In the long run, do you believe at a time when the number of seniors is going to double over the next 30 years, with all the budget pressures that implies that the government can be funded by making the Bush tax cuts permanent on people making $250,000 or less?

BLUMENTHAL: Key question. The answer is we're in an economy now that is fragile, still recovering all too slowly. These tax cuts must be extended for the middle class. We need to protect the middle class from that huge --

BROWNSTEIN: Permanently? Will you permanently extend them?

BLUMENTHAL: I would extend them permanently because I think that they will in effect restore the Clinton tax levels.

BROWNSTEIN: Only for people at the top, only for the top. Restore the Clinton tax levels only at the top, right? You're making permanent the bush tax cuts that virtually all Democrats opposed in the first place.

BLUMENTHAL: And there are other ways that we need to explore that would involve raising revenue, which I think is the other part of your question.


BLUMENTHAL: Closing those loopholes, for example, the tax breaks for companies that send jobs overseas, closing some of the other tax breaks and credits is again common ground that we need to explore in the longer run, but right now, what needs to happen is to extend those tax cuts for households earning less than $250,000 a year. Or to put it more accurately, to extend those tax cuts on the first $250,000 that everybody makes.

WILL CAIN, CNN CONTRIBUTOR: So if I could, Ron -- Ron, I'm clear the president still has a deal sitting out there that he's offered that would extend the tax rates for anyone making under $400,000 and make adjustments for Social Security.

BROWNSTEIN: He's backed away from that.

CAIN: Right. Well, I'm wondering if the senator is backing away from that as well. Are you and the Democrats in the Senate suggesting that is not something you're interested in. You're only interested in the bill you've already passed in the Senate that extends tax rates for those under $250,000?

BLUMENTHAL: I'm not going to speculate on what all the parameters and permutations and other kinds of details might be on a deal that we haven't even seen yet. Right now, what we know for sure is this fiscal cliff can be avoided. Everybody wants to avoid it, by extending those tax cuts on the first $250,000 that every household makes. That's the Senate bill with a couple additional benefits that's before the House of Representatives. John Boehner should bring it to the floor for a vote.

VELSHI: Senator Blumenthal, thank you very much for being with us -- Senator Richard Blumenthal of Connecticut.

Ron, you make an interesting point. If you project the U.S. budget out to 2020, the biggest single part of it will be the Bush tax cuts so I'm not sure this business of making it permanent will make sense.

BROWNSTEIN: In the long run, it is hard to believe the Democrats can fund the kind of government activism they want, at the time when the number of seniors is going from 40 million to 80 million over the next 30 years, while extending the Bush tax cuts for everyone under $250,000. It's an extraordinary victory for Republicans that that is the framework of debate now whether you're extending it for everybody or just $250,000 and below when virtually every Democrat voted against it a decade ago.

VELSHI: We have to give serious thought to the fact that maybe taxes are going up for a short time.

CAIN: They don't want to consider spending (INAUDIBLE), but I understand.


MARTIN: The problem is democracy. You're arguing with democracy, more than a reality.

VELSHI: That part I think the Democrats deserve some blame for, that you got to get some specifics. All the low-hanging fruit is gone on this. It's going to hurt.

BROWNSTEIN: It's really hard to reduce spending overall when the number of seniors is doubling in the next 30 years. That's tough.

VELSHI: Well, it's a big discussion. If we were left to solve it, we actually, probably could.

Coming up on STARTING POINT: a day -- we could -- a day at the office with the Oracle of Omaha. Why Warren Buffett doesn't use e-mail ever, and how he takes action when everyone else is in panic mode. You're going to want to see this.

(COMMERCIAL BREAK) VELSHI: The Oracle of Omaha is arguably one of the best investors of all-time and one of the richest men in the world, but you wouldn't necessarily know that by the looks of Warren Buffett's office. Poppy Harlow got to take a tour of the place. He is just a low key fellow.

POPPY HARLOW, CNNMONEY.COM: He is in all respects. I mean, you know, this was a very neat experience to tour around his office. This is after we had a long interview with him a few weeks ago and what we found and actually what we didn't find might surprise you.


WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: Well, I've been in this building 50 years. They've moved me around a little bit.

HARLOW (voice-over): History on the walls of legendary investor, Warren Buffett's, office.

BUFFETT: I formed my first partnership in May of 1956. So, this was the year end balance sheet which I typed myself, in fact, probably by a few typos, and these were my partners I had at the time. And this was my father-in-law. That was my roommate in college. That was his mother. That's my Aunt Alice. That's my sister, Doris, and that's her husband, Truman and that was the gang.

HARLOW: And you.

BUFFETT: Yes. If they kept the $10,000 investment, and then when I liquidated the partnership, reinvested that in Berkshire Hathaway, they would now have about $500 million. I did very well with small amounts of money back in 1964, and when the panic happens with a really good company, I like to buy.

HARLOW: Buffett's M.O. for investing. This 1901 "New York Times" article reminds him daily of an important lesson.

BUFFETT: We never get out of (INAUDIBLE). We always have lots of money and we never borrow a lot of money. First campaign, I got really active in was when I was 10 years old in 1940 and Wilke was running against Roosevelt. My dad thought that if Roosevelt got elected, that there'd never be another election.


HARLOW: A vocal Republican in his earlier years, Buffett now leans left and is a big Obama supporter.

BUFFETT: -- about the economy, and I brought along some figures that I thought would be of interest to him that was when I got the presidential medal of freedom.

HARLOW: But he's never had political ambitions like his father.

BUFFETT: That's my dad's campaign picture when he was 39 years old running for Congress for the first time in 1942. This is my dad's desk. This sat on his desk when I was a kid, when I was 10 years old. I always admired it.

HARLOW: this is my favorite thing in your office. I need one of this. It's too hard -- it's too hard box.

BUFFETT: Right. There's a lot of things that belong in there. The real problem is if they belong in there and I don't realize it.

HARLOW: And then, there the fun thing like the model mars rover given to him by students at CalTech.

BUFFETT: That beats getting a t shirt.

HARLOW: And the mock "Sports Illustrated" cover.

BUFFETT: I think if they ever bring me out as water boy.

HARLOW: No fancy flat screen TV, just an old, too.

BUFFETT: No computer.

HARLOW: That means no e-mail, perhaps, the secret to Buffett's success.


HARLOW (on-camera): I am convinced that no e-mail is the secret to his success.


BROWNSTEIN: Who's tweeting while you're talking here?

HARLOW: All right: I mean, the amount of time you save and the lack of distraction, but again, look at that office. It was a very modest office, and, you know --

CHO: He's very frugal, isn't he?

HARLOW: Yes. I mean, he gives a lot of money away.


HARLOW: But you know, less than 20 people work in the office. There's the typical water fountain chatter. I walked by his two major investment guys there, you know, wearing casual clothes. There's a soda machine. Of course, it has coke products in it because they're big investors in Coca-Cola, but few cool things I want to show you if we can.

This 1901 "New York Times" article, I asked him about it. I said, why do you look at that every day, and he said, well, you know, this article is about a guy that made a very risky investment, had a margin call and jumped in a hot vat of beer and killed himself. So, I never take big risks, and then, he has this model Wells Fargo stage coach as well. And, they own more than 400 million shares in that bank. And so, he says, I think I'll get a little bit more out of it than a stage coach. And that he has the baseball jersey, A-Rod, Yankee jersey, but I said, are you Yankee fan? He said I'm a Cardinal fan. He really loves (INAUDIBLE) who actually got the presidential Medal of Honor, the same year --


BROWNSTEIN: Is A-Rod does seem kind of in the Buffett kind of --


MARTIN: It's stunning. A-Rod, Lebron, a lot of athletes go to him for advice.

HARLOW: LeBron and Warren e-mail back and forth, and you know, he gives him --


MARTIN: The secretary who tells him --



VELSHI: All right. Good story. Thank you, Poppy.


VELSHI: Just ahead on STARTING POINT, a local paper gets a lot of people angry by publishing the names and addresses of registered gun owners. Now, one blogger strikes back. He joins us when we come back.


CHO: Welcome back. We have this just in to CNN. Egypt's state prosecutor has ordered imprisoned former dictator, Hosni Mubarak, transferred to a military hospital for medical treatment. This after his health, apparently, deteriorated. This news is coming to us via state run Nile TV. The 84-year-old Mubarak is serving a life sentence over the killings of protestors. He has been quite ill for some time. We are following this developing story.

Meanwhile, panic sends people running through a Sacramento mall after police say a 20-person brawl broke out in the food court. Three teens were arrested. No reason why, but stores did go into lockdown just in case. The mall reopened about one hour later.

And D.C. prosecutors are being pretty tight-lipped about whether they will charge NBC's David Gregory for showing off a high capacity ammunition magazine on "Meet The Press." Gregory used that magazine as a prop during an interview with the head of the NRA, Wayne Lapierre, but it's illegal to show them in public in Washington even if they're not attached to a weapon.

D.C. police says NBC actually asked if they could use the magazine on the show. They said no, but Gregory did it anyway.

VELSHI: Interesting.

CHO: Gotten a lot of attention.

VELSHI: Interesting topic.

CHO: Yes.

VELSHI: Quick show of hands, the newspaper that published the name of the addresses of people with gun permits. Thumbs up, yes or no? You think good idea or bad idea?

CAIN: Bad.

BROWNSTEIN: On balance bad.

VELSHI: All right. You probably heard about this --

MARTIN: -- the person been allowed you to do --


VELSHI: A lot of outrage about this. One blogger didn't like it, and he decided to fight back. You wonder whether that's a good or bad idea as well when we come back.