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Fiscal Cliff Meeting; Homicide is Chicago's 500th This Year; Eva Longoria Gives Back

Aired December 28, 2012 - 14:00   ET

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


DON LEMON, CNN ANCHOR: Hi, Suzanne. And thank you very much. I'm Don Lemon. Brooke is off today.

The eyes of the world are focusing now on the White House. Within the next hour, congressional leaders will begin to arrive for what is likely to be a very tense meeting with the president. This is perhaps the final effort to avert the new year's tax increase that's expected to cost the average family several thousand dollars a year. Four days remain to reach an agreement, get it passed by the House and the Senate, and signed into law by the president. We're talking a long shot here.

Now, I want to show you the players. President, there in the middle, Democrats Nancy Pelosi and Harry Reid. Republicans Mitch McConnell and John Boehner. Those four members of Congress are expected to make the drive from the Capitol, which you see on the right, down Pennsylvania Avenue, to the White House, there on the left. And we expect them to enter through a side door on the west side of the mansion. That's the entrance right there.

And they'll meet with the president in the Oval Office beginning, we are told, at 3:00 p.m., less than one hour from now. And just four days ahead of the so-called fiscal cliff. So a very big moment in the nation's capital.

And to walk us through what might happen, we turn now to our Jessica Yellin. She's a chief White House correspondent.

So, Jessica, we said up front, it is a long shot. Give us a best case scenario.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Don.

Well, the best case scenario would be that all the leaders walk out of this meeting and say they have a deal, the two senators say they can bring it to a vote, and none of their members will filibuster it, House Speaker John Boehner says he will bring it to the House floor for a vote before New Year's Eve and House Minority Leader Nancy Pelosi says she can wrangle all the Democratic votes it needs to pass because you would expect a lot of House Republicans to vote no, so you need almost all the House Democrats to vote yes. If that sounds almost too good to be true, it probably is.

LEMON: And, yes, and then they sing "Kumbaya."

YELLIN: Right.

LEMON: Never, ever going to happen. And if it does --

YELLIN: And they braid each other's hair.

LEMON: Yes. You got it. We're more likely to see that.

OK, so tell us about the role in this meeting of Senate Republican Leader Mitch McConnell. Why might his role be key -- be a key role to this?

YELLIN: Because this has all now been moved over to the Senate. And the House has said it has to get through there before any action happens on the House side. And Senate Minority Leader McConnell, the Republican, who has been an enormously effective dealmaker, is the one who helped forge the debt ceiling compromise in the final hours before -- as the nation was ticking down to possibly defaulting. And the question is, does he want to play the same role this time?

Now, he will be looked to, to assure everybody that he can get all the Republicans to agree not to filibuster a measure because I've reminded -- I pointed out, it just takes one senator to filibuster a bill and it goes down. And there is no time for that. We're rushing to this deadline. They cannot waste a moment.

But Senator McConnell would argue that, you know, he can't assure that. He hasn't seen the details. And it all depends on what happens in this meeting. So I can't emphasize enough how important this meeting is to finding out if we could actually get something done before new year's.

LEMON: Jess, every time we get to something like this or, you know, something similar, we always hear that the Oval Office is the world's greatest home field advantage. Is there anything at this point that the president can say to these four leaders to get them to act?

YELLIN: Well, I'd have to say that the Oval Office is probably less impressive to each of these people than it is to others because they've all spent plenty of time in there. So -- and they're also locked into their positions. It's going to be tough.

That said, maybe there is some significance. You know, they usually meet when they're all in a group in the Roosevelt Room or in the Cabinet Room. It's a more casual environment. They're sitting probably on couches or chairs near each other. But the problem, Don, is that if the president tries to sweeten the deal to woo more Republican votes, then he risks losing lots of Democratic votes and vice versa. This is really an issue about the fundamental differences between the two parties, the role of government in American life. That's why it's so hard to get to a deal.

LEMON: How dramatic all of this. Who would have -- who would think talking about money and the fiscal issues would, you know, garner so much drama, Jessica.

YELLIN: Well, it's Washington, and it's a lot at stake. It's about people's taxes, and, you know, the social safety net in America.

LEMON: Yes.

YELLIN: You know, it's the difference between Democrats and Republicans.

LEMON: Yes. We're going to talk more about the money now. Thank you, Jessica Yellin. Appreciate it.

Let's go to New York now. Joining us, Rick Newman, chief business correspondent for "U.S. News & World report."

And before we go anywhere else, I want to ask you about the impending tax increase. If there is no deal and tax rates rise, when would workers begin to see that reflected in their paychecks? When does the pain start?

RICK NEWMAN, "U.S. NEWS & WORLD REPORT": Well, it's worth pointing out, Don, that there are -- this is not one tax hike. This is about nine different sets of taxes. And the one that would go up right away is the payroll tax. That was cut temporarily back in 2009. It was cut by two percentage points and it's scheduled to go back up by two percentage points. And that would start taking money out of workers' paychecks right off the bat. That would add up to about -- oh, something like $60, $70 a month for the typical worker.

When we hear about all these tax rates that are going up, that actually wouldn't involve money that's in people's pockets until they actually pay their taxes or do their tax returns the following year, because that's when they would have to calculate the amount they owe and whether they paid enough taxes in 2013. So the good and bad news about that is, that is not going to affect people right away, but that also means that they can put that one off for a long time and we could go -- we could actually go through much of 2013 without knowing what tax rates are going to be for the year 2013.

LEMON: We haven't -- we haven't yet seen any major retreat of the stock market. The bigger picture, though, how anxious is America's business community about the spectacle that we're seeing in Washington and the repeated inability of the president and the Congress, as a matter of fact, to make fundamental decisions that affect the economy?

NEWMAN: Well, to say that business leaders are anxious I think is an understatement. I think they're thoroughly disgusted because you couldn't run a business like this. And they all know that. It's just kind of driving them crazy.

But business leaders have been watching this for a long time, Don, unlike a lot of consumers who may have just started paying attention over the last couple of weeks. Business leaders have known this is coming for a long time. They know how ugly and dysfunctional it was in 2011 when we went through something similar with the debt ceiling and they, more or less, have been expecting the same thing.

So what we've seen over the last couple of months is that business activity has really slowed down. Businesses have really lowered their spending. They're basically just waiting it out to see what happens. They -- you know, they need to know these things in order to plan for their businesses.

LEMON: Right.

NEWMAN: What are their tax rates going to be? What tax credits are going to be in effect so they know how to spend their money. And without knowing those things, many companies are just spending as little as they can and basically just waiting. We're seeing the economy growing at only about 1 percent right now in the fourth quarter. And that's a big part of the reason. That's very weak. That's almost at recession levels.

LEMON: It's a wait and see game to see what happens. But, you know, Rick, I heard Harry Reid say something on the floor of the Senate and I want to ask you about it. Take a listen, if you would. He's talking about taxes.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER: The 2 percent don't want to be protected. The majority of rich people in this American -- in our great country are willing to pay more. The only people who disagree with that are Republicans who work in this building.

(END VIDEO CLIP)

LEMON: Do you think that's the case, Rick Newman, that Harry Reid seems to be saying that wealthy Americans are willing to take a tax hike -- a tax hit, I should say, for better -- for the better of the country? Is that true?

NEWMAN: I think there are two things going on. I think a lot of wealthy people recognize that their tax burden is actually pretty low by historical standards and they also know they can afford to pay more taxes. But I don't think they're eager to pay more taxes for one important reason, which is that they just don't think the money is going to get used well. People just do not trust Washington to spend their money effectively. And I think if they had greater trust in Washington, there would not be so much resistance to this. So the irony of this, Don, is that this spectacle that we're seeing right now in Washington is contributing to the problem. When people see this, they're even more reluctant to pay taxes or to put up with a tax hike. So it's almost like it's a self-perpetuating problem.

LEMON: Rick Newman. Thank you, sir.

NEWMAN: Sure thing, Don.

LEMON: In other news, he's remembered as a liberator, not a conqueror. Tributes pouring in today for General Norman Schwarzkopf. "Stormin' Norman," as he was known, died yesterday in Tampa, Florida. He became a household name in the '90s when he led coalition forces during the first Gulf War. But he once told Larry King he hated war. President Obama called Schwarzkopf's death the loss of an American original. General Colin Powell says his leadership inspired a nation. Norman Schwarzkopf was 78.

Secretary of State Hillary Clinton will be back in the office next week. Clinton has been recuperating at home from a stomach flu and a concussion suffered when she fainted and fell. Her doctors have told her not to travel overseas for the next few weeks, but she is expected to testify before Congress on the September attack on the U.S. consulate in Benghazi, Libya.

Put the harps back in the closet. That's the word from former President George H.W. Bush's chief of staff. She says the condition of the 88-year-old former president is not dire. His family also is expressing confidence that he will soon be released from an intensive care unit. He's being treated for a high fever at a Houston hospital.

With the nation reeling from the tragedy in Newtown, Connecticut, and engaged in a national debate on gun control, Chicago reaches a deadly milestone despite some of the toughest laws when it comes to owning firearms.

And federal investigators have arrested a New York City woman. They say she used the school's shooting in Newtown as a way to make money.

(COMMERCIAL BREAK)

LEMON: A domestic violence suspect grabbed a gun and opened fire inside a New Jersey police station early today, hitting three officers. One officer was hit below his bulletproof vest and is in stable condition at a Camden hospital. Two other officers suffered minor injuries. Police returned fire and killed that gunman.

And while the nation grieves for Newtown, Connecticut, and grapples with the issue of gun violence, Chicago has reached a chilling milestone. A shooting on the city's west side yesterday resulted in the city's 500th murder of the year. That's up by more than 50 from last year and it's the first time Chicago has hit 500 murders since 2008. Another very troubling number, 270 children have been killed by gun violence in Chicago in the past five years.

Joining me now, "Chicago Tribune" columnist John Kass.

John, before we talk, I want you to listen to this interview I did in Chicago just a few years ago.

(BEGIN VIDEO CLIP)

LEMON: What's the violence for? What's the whole reason for shooting? Why do so many people get shot?

"DAVE": They've gotten mad. Wipe his (EXPLETIVE DELETED) out and then that traffic will flow my way. You see it's all about the mighty dollar.

LEMON: So if you kill somebody, you get rid of them, that's more money for you?

"DAVE": (INAUDIBLE). LEMON: I don't mean you specifically.

"DAVE": Not me specifically, but some people.

LEMON: Explain it to me, what do you mean by that?

"DAVE": (EXPLETIVE DELETED) you're just cutting the middle man out. Some (EXPLETIVE DELETED) in the way. Some people got to die for the next man to -- (INAUDIBLE) get on top.

(END VIDEO CLIP)

LEMON: He was an admitted gang banger, as he said, John. Has anything changed in Chicago since I did that interview in 2009?

JOHN KASS, "CHICAGO TRIBUNE" COLUMNIST: By the way, that was a fantastic interview and I think you get to the heart of the problem. There's a gang war in Chicago on the west and south sides. The police are outmanned, undermanned and outgunned. And the criminals are killing each other to climb up, you know, the next rung on the ladder.

Now, I don't know what this 500th homicide, the motivation was. The fellow -- the victim had been in and out of prison and served time for armed robbery. Comes out of prison, was shot before he comes out and is shot in the back of the head. This is Chicago. Nobody saw a thing.

LEMON: Yes. So let's talk about --

KASS: But there's news. But there's news.

LEMON: Yes, go ahead.

KASS: The news is that now -- now the city, I was just told by Jeremy Goraner (ph), the police reporter from "The Chicago Tribune," that the police department is now saying, wait a minute, when we told you 500 yesterday, or last night, now we're going to take the number down to 499 because they found the fellow named Eddie Phelps (ph), who was beaten to death on December 22nd, and now they're reclassifying it, saying it's not a homicide pending further investigation.

LEMON: Well --

KASS: I don't know, maybe he beat himself to death with a blunt object.

LEMON: John, come on. I mean it's still -- listen --

KASS: I know.

LEMON: Not to make light of this. It's 499 people, right?

KASS: Yes. Right. (INAUDIBLE).

LEMON: Look, I want to talk to you -- I want to talk to you about gangs a little bit more and then I want to talk about guns. Sixty percent of the homicide, gangs. You said in that interview, it gets to the heart of the problem. When I spoke to that young man, he said sometimes -- he goes, why would I want to go work at McDonald's. I can make $6,000, $7,000 in a couple of hours. And in a night, he said some people make $20,000, $30,000, $40,000. And he said, as you heard in the interview, you got to -- in order to get on top, you've got to knock the people out on the bottom. It's that, but it's also the proliferation of guns that are coming in through that corridor, even from Indiana and below.

KASS: There have been guns in Chicago since the 19 -- early 19th -- part of the last century. And we've had gang wars before. The out -- Chicago outfit gang wars, other groups gang wars. We have Mexican cartels gang wars. So we've always had guns in Chicago and every city in the country.

What you're seeing now is, because there's no resources, OK, they have spent all the money. In Chicago, the new -- the mayor currently, Mayor Rahm Emanuel comes in, the previous mayor spent all the money. There's no money. Illinois, there are $100 billion in the hole in terms of the deficit. Nationally, you got all these people in your earlier segment playing blame game in Washington. Guess what? When you're spending more money than you pull in, eventually the money runs out and then you can blame all you want, but there's no money for basic services, like police, like good education, all that stuff.

LEMON: Yes.

KASS: They don't care about that. They spend the money on what they want to get elected.

LEMON: When you're saying that the previous mayor spent all the money, you're talking about Mayor Daly. And now Rahm Emanuel, Mayor Emanuel, is in place now.

KASS: Correct.

LEMON: One, what do you -- he spent all the money on what? And then, two, what's some realistic proposal here to reverse this violence?

KASS: Well, over 20 years, I can give you a laundry list of corruption and cronyism, but you know it well because you were here as well and you saw it. There was a reporter once for "Time" doing a CNN profile, comparing Richard Daly to Andy of Maybury and said he presides over Chicago like Andy of Maybury. And now that reporter is the press secretary for President Obama. So there had been -- not you, obviously, but there had been people who were papering over and smooching up and making things look nice when they weren't nice. The city is broke. We're a thousand police officers down, at least, right? And now the city is creating this news flap, a public relations issue, saying there's -- now we're going to take one off the 500 and make it 499. You're right, Don, the kids are killing each other to climb up to make a few bucks. What's the answer? I don't know. Do you have an answer? I don't.

LEMON: No, I don't. but we should try to --

KASS: You know, I do -- LEMON: We should try to figure it out, John. We should try to figure it out, whatever it is.

John, I like that you don't mince words. You promise to come back and we can talk more about this? This is an issue that's very close to my heart.

KASS: I love being on with you. I love being on with you. One last thing. We take a bit -- we make the Sandy Hook, which was a tragedy, a big deal. Why don't the politicians come to the funerals of the dead African-American and Latino kids who get killed by the hundreds and hundreds and hundreds. The media has ghettoized these children, these homicide victims, pushed them to the side. I'm not diminishing the others, I'm just saying President Obama, show up at a funeral here in Chicago once in a while too.

LEMON: John Kass, thank you, sir. We'll see you soon.

KASS: Thanks for having me.

LEMON: All right.

All this week we have showed you celebrities who are in the spotlight for giving. Well, up next, actress Eva Longoria, who is helping Latino women achieve academic success.

(COMMERCIAL BREAK)

LEMON: Many of you know Eva Longoria as a fiery Hollywood actress. But did you know she's also my Twitter buddy? Some of you even saw her campaigning for President Obama -- she is -- President Obama this year. But today we're going to show you another side to this star. A side she's dedicated her life to, helping Latinas get a college education. Here's CNN's Alina Cho with today's big stars, big giving.

(BEGIN VIDEOTAPE)

EVA LONGORIA, ACTRESS: I've been pulled a million different directions with supporting AIDS in Africa, or, you know, sex trafficking in Thailand, or dolphins in Japan. And you can't do everything. And so in thinking, what do I really want to do, where can I create the most impact?

ALINA CHO, CNN CORRESPONDENT (voice-over): To answer that question, you could say Eva Longoria looked in the mirror.

LONGORIA: I always knew I wanted to be with women and within the Latino community.

CHO: Best known for playing the vixen on "Desperate Housewives."

UNIDENTIFIED MALE: Solise (ph), how are you?

LONGORIA: The best you ever had.

CHO: Longoria had humble beginnings. The youngest of four daughters born in Texas to Mexican-American parents.

LONGORIA: And I wasn't the first to go to college. It was expected.

CHO (on camera): But let's be honest, I mean when you went to college, it wasn't a walk in the park. You had to work.

LONGORIA: Oh, I was flipping burgers. I was an assistant to a dentist. You know, I worked in a car shop changing oil. I was an aerobics instructor. I mean, yes, I had -- I was definitely a work-study.

CHO (voice-over): Seventeen percent of Latinas drop out of high school. Fewer than half of adult Latinas hold college degrees. So in 2010, the actress started a foundation, focusing on helping Latinas get a college education.

LONGORIA: And so I just have to schmooze with them.

CHO: On the day we meet up with her at this high school in Los Angeles, she's the keynote speaker at a graduation for parents.

LONGORIA: Everyone here has taken a stand for their child.

CHO: The program is called Piqe. Longoria's foundation is helping to fund it.

LONGORIA: Well, it's a nine week program that parents can take in order to help them navigate the institution of schools. It is not easy. I've sat with a lot of these parents before the program and they didn't know what a transcript looked like, they didn't know what a GPA was, they didn't know what SAT meant.

CHO: Children of parents who graduate are guaranteed admission to one of several schools in the Cal State University system, provided they meet the basic requirements, like Wanda Martinez (ph).

WANDA MARTINEZ: I only went to the elementary school.

CHO: She graduated from Piqe so her daughter, Alahandra (ph), could have a better future.

LONGORIA: Very good. Make your mother proud.

I don't want the Latino community just be a large community. We need to be an educated community because this is going to be our future workforce.

CHO: Something Longoria has talked about a lot on the campaign trail. And now as a co-chair of President Obama's inaugural committee.

CHO (on camera): Are you nervous?

LONGORIA: I'm very nervous.

CHO: What will you wear?

LONGORIA: Who knows. I don't know. CHO (voice-over): Politics and philanthropy, making a difference in both.

LONGORIA: I'm funding these programs because I believe in them. I think it's important that you, yourself, as a role model, as a philanthropist, an activist, that you, yourself, give out of your back pocket. I would give my shirt off before I would ask you to give yours.

(END VIDEOTAPE)

LEMON: Alina and Eva, thank you very much. And for more on Eva Longoria, how she is helping Latinas get a college education, and how you can help, go to cnn.com/impact.

Shocking child case -- care abuse claims. And what makes this story even more disturbing, the alleged abuse took place on a military base. A CNN exclusive you'll want to hear. Our Barbara Starr talks with one of the moms whose child was allegedly mistreated.

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