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CNN NEWSROOM

The Road To The "Fiscal Cliff"; High Stakes Meeting at White House; Newtown Charity Scam; Ignoring Windows 8's Best Feature; Shuttle Atlantis' New Home; Dow Down on Fiscal Fears; Deadly Dose

Aired December 28, 2012 - 10:00   ET

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


VICTOR BLACKWELL, CNN ANCHOR: Next hour of CNN NEWSROOM begins right now.

Happening now in the NEWSROOM, you know the fiscal cliff is fast approaching, but do you know how the U.S. got into this latest economic crisis? We have the answer.

Chicago suffers a grim milestone, 500 homicides this year alone. Later this hour, we'll talk to Reverend Jesse Jackson about the problem and the solutions.

Space shuttle "Atlantis" gets ready for its big reveal. We'll take you to the Kennedy Space Center for an inside look at the museum "Atlantis" will call home.

And reviewers are raving about Microsoft's latest updates, but chances are you aren't even using it. We'll explain this tech disconnect.

NEWSROOM starts right now.

(MUSIC PLAYING)

BLACKWELL: Good morning. I'm Victor Blackwell. Carol Costello has the morning off. We're starting with you, your money and your taxes and that cliff. We're just four days from the fiscal cliff.

This afternoon in the 11th hour, this is when it always happens, there's a high-stakes meeting at the White House, at the table, President Obama and congressional leaders. The goal is to reach an agreement.

But the roots of this current crisis can be traced back to the previous administration. CNN's chief business correspondent, Ali Velshi, has a look at how we got here.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH (R), FMR. U.S. PRESIDENT: Now we have passed a bold package of tax relief for America's families and businesses.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT (voice-over): It starts more than a decade ago when then President George W. Bush initiated a series of tax cuts for all Americans, but it's a deal with the devil. The cuts which are politically expedient, but costly to government expire in ten years time.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Both houses of Congress now have passed a package of tax relief that will protect the middle class.

VELSHI: When it came time for the cuts to expire, the U.S. is just emerging from the worst recession since the great depression. So President Obama agreed to extend the tax cuts for two more years in exchange for Congress extending federal emergency unemployment benefits.

Those cuts are expensive. If they are extended by 2020, the Bush era tax cuts will be responsible for more than half the total national debt. Democrats insist that taxes go up for the wealthy, but stay in place permanently for those earning less than $250,000 a year.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: We need to stop the job- killing tax hikes and we need to start it cutting spending now.

VELSHI: Republicans refuse to play ball. They say no higher rates on the rich, no tax hikes on anyone based on an ideology that calls on government to be as small as possible. Its roots are as old as American politics, but today the philosophy's main spokesman is this man, Grover Norquist, president of "Americans for Tax Reform.

Norquist's pledge signed by almost all Republicans in Congress forbids them from raising taxes ever under any circumstances. Things come to a head in the summer of 2011. Republicans demand the government reduce its deficit as a condition for raising the nation's debt ceiling.

Without a deal, the U.S. would lose its ability to borrow money. Both Democrats and Republicans deploy scorched earth tactics that nearly shut down the government and ultimately cost America its AAA credit rating for the first time in history.

But in a last-minute compromise, both sides agree to a trillion dollars in spending cuts up front and another $1.2 trillion in cuts to be decided by a special congressional super committee. But a poison pill was attached.

If the super committee can't reach a deal, automatic across the board cuts known as "The Sequester" would go into effect January 2013 at the exact moment when those Bush tax cuts extended for two years if you remember would expire.

So the point is we could have all seen this coming. Some of us did. We yelled at the top of our lungs about it, but we were drown out by the election. It seems common sense and good governance often gets drown out by seemingly endless and continuous elections in America. This time there may be a serious price to pay for it.

(END VIDEOTAPE)

BLACKWELL: And Ali Velshi joins me now. I want to pick up on that point, Ali. You said people were screaming at the tops of their lungs. You were one of them. Drown out by an election. It seems like those voices may already been drown out by the next election, kicking the can down the road. Now it's a barrel. What happens now?

VELSHI: Yes, this is a problem. If I had hair I'd pull it out with yesterday hearing Harry Reid saying we may not have enough time to get this done by the deadline. This is the most anticipated thing we have ever seen. We all knew this was coming.

At this point, the politics, you know, there are real problems here, Victor. The bright spots in this economy have been housing and consumer confidence. Despite these indicators that things aren't terrific, the American consumer has stayed steadfast.

It started to come apart during the holiday shopping season. It will come out weaker than we expected. This week, we got consumer confidence numbers, Victor, that are lower than we have seen in the past months. Bottom line is everybody is getting spooked by this.

That stuff isn't a light switch. It's not on or off. Once you start losing confidence, once you start losing trust, it's very hard to rebuild it. So we're an economy on a slow and steady move, not as fast or strong as we'd like it to be.

And this nonsense keeps staring back at that. It's going to take many years to improve our economy and get everybody employed and wreck it with the nonsense that continues to go on in Washington, very, very frustrating -- Victor.

BLACKWELL: All right, Ali Velshi, thank you for that. Four days and we'll see what happens.

Still ahead this hour, I'll speak with one of the people who will have to vote on a deal if one is finally reached. He's Democratic Congressman Chris Van Hollin of Maryland. He will join me in about 40 minutes here on CNN.

Here's a story that makes you shake your head. Federal investigators have arrested a New York City woman they say used the school shootings in Newtown, Connecticut, as a way to make money.

The 37-year-old Nouel Alba of the Bronx is accused of posing as a relative of one of the slain children and solicited donations on Facebook for a fake funeral fund for one of the victims, 6-year-old Noah Pozner. Instead the feds say the money went to a Paypal account she controlled.

Last week, CNN sent investigative producer David Fitzpatrick to her door for an explanation. She let us record her voice but not on camera. Here's what happened.

(BEGIN VIDEO CLIP)

VOICE OF NOUEL ALBA: That's not my Paypal account. I mean, I have a Paypal account like that.

DAVID FITZPATRICK, CNN INVESTIGATIVE PRODUCER: But is that your e- mail?

ALBA: Yes. That's one of my Gmail account.

ALBA: My personal account, but I never set up any fund for anybody.

FITZPATRICK: You should know that the Pozner family tells us that they are very support be upset by this.

ALBA: I never did anything.

(END VIDEO CLIP)

BLACKWELL: If convicted, Alba faces up to five years in jail and $250,000 fine.

Tributes are pouring in this morning for General Norman Schwarzkopf. "Stormin' Norman" as he was known died yesterday. He became a household name in the '90s as he led America to victory as commander of coalition forces during the first gulf war. Schwarzkopf was 78.

Secretary of State Hillary Clinton will be back at work next week. She's been at home for three weeks recovering from the stomach flu and you remember she fainted and suffered that concussion. Clinton has promised to testify next month before Congress on the deadly attack on the U.S. Consulate in Libya.

Turning to technology, reviewers say the best part of Microsoft's latest operating system is the touchscreen. The problem is that one research group says hardly anyone is actually buying a touchscreen computer.

Alison Kosik is at the New York Stock Exchange. Alison, people are not taking advantage of this technology. Why not?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: CNN Money's David Goldman, he says this is like throwing out your TV remote and getting up to press the buttons on the TV every time you want to change the channel, so old fashioned. But there are a few good reasons people aren't using this technology.

For one, market research company NPD says only 5 percent of Windows laptops that were sold through December 15th had touchscreens in the first place. That's an extremely low number especially since that's the whole point of this new operating system.

So the big problem here is there just aren't that many touchscreen laptops out there and the ones out there are expensive. They usually go for a couple hundred bucks. Now on top of all that, there seems to be a gap between Microsoft's ads and what consumers understand.

Despite the aggressive marketing of the touch feature, experts say users aren't used to interacting like that. Especially since the market is dominated by smartphones and tablets many of which are touchscreens. All hope is not lost.

It's just going to take a little while to catch on because the system is so different, it will take time for people to adjust. They are hoping that's the case.

BLACKWELL: All right, apparently a great program, just taking some time to catch on. Alison, thanks.

KOSIK: A lot of critics out there.

BLACKWELL: Yes, there are always are. It will still be in the air, but a little closer to ground. Shuttle "Atlantis" soon to go on display above visitors at its permanent home in Florida. John Zarrella is live there.

JOHN ZARRELLA, CNN CORRESPONDENT: I'm John Zarrella at the Kennedy Space Center in Florida. And in just a minute, we're going to bring you here inside the museum that's literally being built around the shuttle "Atlantis."

(COMMERCIAL BREAK)

BLACKWELL: Checking top stories. Russia may be emerging as more of a player in efforts to end the Syrian civil war. Russia's foreign minister held talks on Syria with its Egyptian counterpart today. Russia is also reaching out to Syrian opposition leaders to hold the meeting.

The nation may be shrinking in size or at least growing at a slower rate. That's according to the U.S. Census Bureau, which projects the U.S. population will be a little more than 315 million on New Year's Day. That's up less than 1 percent from the last time the reading was taken. The bureau says our population is slowing due to lower birth rates and lower immigration numbers.

Here's a New Year's resolution for drivers in Chicago. Use the L. Starting January 1st, the city will have the most expensive parking meter rates in North America, $6.50 for one hour in the loop. It will be the fifth year in the row the cities' rates have gone up.

Here it was on its final mission in July of last year. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: All three engines up and burning. 2, 1, 0, and lift off, the final lift off of "Atlantis" on the shoulders of the space shuttle.

(END VIDEO CLIP)

BLACKWELL: Now the retired space shuttle "Atlantis" will still be in the air, but not as high, elevated off the ground in its permanent home at Kennedy Space Center. The new museum is set to open this summer, but we're getting a sneak preview from our own John Zarrella.

John, I can tell by the hard hat and vest that it's still being built, a lot of work to be done, right?

ZARRELLA: Yes, Victor, this is an active construction site we're at. This is the museum facility. When it's done, 90,000 square feet, $100 million project and when "Atlantis" was towed over here on November 2nd, one of the walls was left off to get the vehicle in.

So everybody is asking out there, where's "Atlantis?" Here let's take a look. That's it in shrink wrap, 16,000 square feet of shrink wrap has been used to protect it from debris that might fall, from dust and dirt as they are literally building this entire facility around the shuttle "Atlantis."

And I've got Tim Macy here with me, the director of development. Tim, I wanted to ask you. You have been involved in a lot of projects, Centennial Park for the Olympic Games in Atlanta. You're working with a national treasure here. This is different, isn't it?

TIM MACY, PROJECT DEVELOPMENT AND CONSTRUCTION MANAGER: This is different. I don't think of you John Zarrella as a national treasure, but Atlantis is really something special.

ZARRELLA: Did it make it more difficult to plan this? I mean, you have to be so careful.

MACY: Well, you know, there are a lot of people that did a lot of work on this. We have taken a lot of extra time to make sure we present had this in a way that respects the work they have done.

ZARRELLA: Yes, I know a lot of people are asking, can I touch the vehicle?

MACY: No, no, it's a national treasure. It's a one-of-a-kind artifact. It's irreplaceable. So we've got close enough where you feel like you can and over the course of the time that you're in here, you'll be able to experience a lot of the things you would normally experience inside the orbiter itself. But for our purposes here it's a display and we'll keep you away from it just a little bit.

ZARRELLA: So nobody can touch it? That's the way with all of them on display because they are, as we say, national treasures.

MACY: Absolutely. They are a lot more fragile than you'd think actually. I'm not a big space geek, but I learned a lot about it this over the course of the last three years. One of it is, it's a little more fragile than you think.

ZARRELLA: Tim, thanks so much. We'll be checking in with you later. So, you know, again, 90,000 square feet when it's done, $100 million facility opening next July as the timeframe for it, Victor, so going to be a spectacular grand opening. I can't get over seeing this thing and just shrink wrap strange.

BLACKWELL: Yes, it is strange. You know, it will be good for the community to get the tourist dollars coming in again after the end of the program. People will get a closer look at the shuttle. John Zarrella, thank you.

One of the nation's biggest craft stores "Hobby Lobby" is facing a fine up to $1 million per day for refusing to follow some of the rules laid out by the affordable health care law. That story is coming up.

(COMMERCIAL BREAK)

BLACKWELL: The Dow is down almost 100 points and we're 50 minutes into the trading day. Alison Kosik is live at the New York Stock Exchange. Alison, what's going on?

KOSIK: It's all about the fiscal cliff. Stocks are lower for the fifth session in a row. This slide actually began all the way since last Thursday. That was when House Speaker John Boehner failed to bring his Plan B for avoiding the fiscal cliff. He failed to bring that to a vote.

So since then the market has been selling off a bit every single day because nothing has happened to make investors feel like a deal is going to be reached. Now interestingly enough news of the meeting today, happening at the White House this afternoon, that did help stocks make a comeback late yesterday.

But they are selling off once again. It's funny you how things can change so quickly. Again, you know, it's just -- there's just not that much confidence that a deal is going to get done. At this point, the market doesn't want a Band-Aid. One trader told me yesterday, you know what? It's too late for that. What the market is looking for at this point, it wants a full deal.

BLACKWELL: All right, Alison Kosik at the New York Stock Exchange. Thank you for that.

Every 19 minutes someone dies of a drug overdose. Most are not from illicit drugs, but perfectly legal, FDA-approved drugs prescribed to millions of Americans. CNN's chief medical correspondent Dr. Sanjay Gupta reports.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): I rode along with Lieutenant Craig Ammon. He's been on the job for 30 years. He will tell you when he takes an overdose call, the usual suspect is a painkiller.

(on camera): What sort of impact have you seen here in Seattle?

UNIDENTIFIED MALE: I think if you pull a group of people together from this community, someone in that group is going to have had a friend or loved one that's had difficulty with a prescription drug or potentially died from that.

GUPTA (voice-over): The unit responds to 45 calls a month of overdoses involving these types of medications. This is important. It can be difficult to tell whether it's a painkiller or heroin because they come from the same ingredient and do the same sort of thing to your body.

(on camera): Aside from needle tracks in the arms, someone who has had an overdose or heroin they could look the same.

UNIDENTIFIED MALE: Absolutely. They could be unconscious from a medication that they think is relatively safe for them because instead of getting it on the street they get it from a pharmacist.

Possible drug overdose, people these are suffering from chronic pain. They know that a little bit of pain medication helps so maybe a lot would help.

GUPTA (voice-over): When we arrive, another medic is on the scene.

(on camera): Somewhere in that parking garage, there was a call about someone having a drug overdose.

(voice-over): The overdose victim came to and walked away. While we're there, another call and it's been just a few minutes.

(END VIDEOTAPE)

BLACKWELL: Dr. Sanjay Gupta's medical investigation reveals startling truths about prescription drug abuse and how easy it is to take that deadly dose. That and more on "SANJAY GUPTA M.D." Saturday afternoon at 4:30 Eastern and Sunday morning at 7:30 here on CNN.

Up next, we're going to talk to the Reverend Jesse Jackson in Chicago. The city just saw its 500th homicide of the year. It happened last night. We'll talk to the reverend about the ongoing problem of gun violence in the city and ways to solve it.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): For 13 years in D.C. traffic, Robert Harrison has made a sometimes difficult living as a limousine driver. But a surge of new riders now has him for the first time heading into the holidays with real optimism about his job.

ROBERT HARRISON, CAPITAL STYLE LIMOUSINE AND TOURS: They have saved the day for us as independent limo drivers.

FOREMAN (on camera): That's the impact?

HARRISON: That's the impact absolutely.

FOREMAN (voice-over): He owes it to Uber, a relatively new service that allows limo drivers to connect electronically with people nearby who need a car right now.

(on camera): Your smartphone knows where you are. You put in a request for a car and in a matter of moments --

UNIDENTIFIED MALE: I have a hit.

FOREMAN: That allows drivers who have hours to kill between prearranged rides to turn the waiting time into money-making time. Uber gets 20 percent of each fare, the driver gets the rest. The idea was born five years ago and has spread to a dozen cities here and abroad. TRAVIS KALANICK, UBER FOUNDER/CEO: If you can fill that time out for those guys, help them get business during their dead time, they can do a far better job making ends, meet making a living wage.

FOREMAN: Uber's rapid rise is not without controversy. In a number of cities, taxi operators and local officials have questioned whether Uber and other similar ventures are dodging laws that controls taxi rates and protect consumers.

To be sure an Uber car is more expensive than a taxi, but the service is proving so popular with customers who like the comfort and convenience some cities are already pushing aside the reservations and Harrison says that's great news.

HARRISON: No Uber driver will tell you they are not making any money. If they are, they are trying to discourage other drivers.

FOREMAN: Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLACKWELL: Checking top stories now, finally some relief from that winter storm that crossed the country this week bringing all the snow and record-breaking snow even. High winds and tornadoes. The storm is blamed for ten deaths and some lingering snow is falling in the northeast today. People from Arkansas to Tennessee are seeing freezing rain.

Tributes are pouring in this morning for Retired General Norman Schwarzkopf. "Stormin' Norman" that's how he was called, he died yesterday. He became a household name in the '90s as he led America to victory as commander of coalition forces during the first gulf war. He was 78.

Crafts store giant, "Hobby Lobby" is bracing for a $1.3 million a day fine starting January 1st for bucking some of the rules laid out in the affordable health care law. The company opposes providing some contraceptives to employees on religious grounds. They say some contraceptive products like the morning after pill equate to abortion.

With the nation reeling from the tragedy in Newtown, Connecticut, and engaged in a national debate on gun control, Chicago suffered a grim milestone of its own last night. A man was killed in a shooting on Chicago's dangerous west side and the scene marked Chicago's 500th homicide this year alone.

That's up more than 50 from last year. When we were researching this story this morning, one statistic jumped out and it's this one. In the past five years, 270 children have been killed by gun violence in Chicago.

On top of that, you have dozens of other injuries. Don Lemon joins me now. Don, thanks for coming in. You spent some time there during another period where these gun murders were spiking.