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ERIN BURNETT OUTFRONT

Obama: "Modestly Optimistic" About Deal; Gun Control In America; Alleged Abuse At Army Child Care Center

Aired December 28, 2012 - 19:00   ET

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


JOHN AVLON, CNN ANCHOR: Breaking news, the president holds a last-minute press conference and calls on the Senate to act on the fiscal cliff. But with just four days to go, will his push make a difference?

Plus, politicians promised that the Newtown shooting would change our national debate on guns. But are those just empty promises?

And we count down the top five political rivalries. Who won, who lost, and what it means for 2013. Let's go OUTFRONT.

I'm John Avlon, in for Erin Burnett. OUTFRONT tonight, breaking news, the president makes an 11th hour announcement tonight putting the pressure squarely on the Senate to broker a deal on the fiscal cliff.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Senators Reid and McConnell are working on such an agreement as we speak. But if an agreement isn't reached in time between Senator Reid and Senator McConnell, then I will urge Senator Reid to bring to the floor a basic package for an up or down vote.

One that protects the middle class from an income tax hike, extends the vital life line of unemployment insurance to 2 million Americans looking for a job, and lays the groundwork for future cooperation on more economic growth and deficit reduction.

(END VIDEO CLIP)

AVLON: And just moments ago, Senator Harry Reid says he's readying a bill for a vote by Monday. All this follows a rare face to face-closed-door meeting at the White House today between all the key players, the president, the vice president, the treasury secretary, and all four congressional leaders, huddled together with just four days to go before we all go over the fiscal cliff.

That meeting lasted for an hour and 5 minutes. Now on a story where every second and every maneuver counts, let's get right to chief White House correspondent Jessica Yellin.

Jessica, the president says he's modestly optimistic, but he also presented a backup plan. So does the president really think it will come to that? JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: At this point, no. They don't, John, because the White House is hopeful, first of all, that the agreement that the senators are working on can actually move forward after the meeting here.

There is a modest uptick in enthusiasm about that possibility. But as for the backup plan, there's no real likelihood that would ever come to a vote. Because Republicans would likely block it in both the Senate and it would likely not come to a vote in the House.

So that's really more rhetoric than it is reality and we have to hope for option "A," getting an agreement in the Senate, if we're going to avoid going over the cliff.

AVLON: Rhetoric versus reality, that's always a tricky place to be in Washington. Listen, this is serious high-stakes political poker here, what can you tell us about the meeting at the White House today?

YELLIN: Well, you know, we've heard different takes, you hear everybody has a different perspective on what happened depending on which party they're in. The big takeaway is that everybody left agreeing on the next step which is that the Senate will confer, the two leaders will confer and try to hammer out an agreement that Democrats and Republicans can both get on board with.

That is what they'll spend their day doing tomorrow, so we're not going to hear or see a lot of public action tomorrow. And then we could -- they'll try to sell it to each of their respective parties on Sunday, as you said, they'll try to bring to it a vote maybe Sunday night or sometime Monday morning in the Senate. And at least there's agreement on the next steps, John. It's better than nothing.

AVLON: Thank you, Jessica. It will be a working weekend.

The Republican majority in the House of Representatives will, of course, be key to getting any deal across the finish line. So OUTFRONT tonight, Republican Congressman Steve Latourette of Ohio, a member of the Appropriations Committee.

Congressman, thanks for coming OUTFRONT. With this plan that the president's put forward, the scaled-down plan, which would simply keep taxes low for 98 percent of Americans, raising them for folks over 250, extending unemployment benefits. If it came to that, would you vote for that as an alternative to going over the fiscal cliff?

REP. STEVEN LATOURETTE (R), OHIO: Well, I would have voted just to extend the tax cuts for 99.8 percent or whatever it was of Americans that was John Boehner's Plan "B." But a couple of things are either being misreported or inaccurately reported because what gets in the way of the president's plan is the constitution of the United States.

And the good thing about this meeting is that the focus is now firmly on the United States Senate where it should have been all these months. The House acted a long time ago to extend all the tax cuts and take care of sequestration. The Senate has given speeches. AVLON: Well, and you're referring to the fact that revenue issues are supposed to generate in the House. But of course, right now, both Speaker Boehner and the president say it's really between Reid and McConnell, which does raise the question, whatever procedural and constitutional issues, which are profound.

Are you concerned as a Republican, as someone who is close to Speaker Boehner, if we go over the fiscal cliff, that Republicans will get the blame?

LATOURETTE: Well, of course they will because Republicans get blamed if it rains in Washington. So that shouldn't be the test here, it shouldn't be the consideration.

But Senator Reid has had it within his power since spring to amend the House bill and send it back with whatever changes he wanted. That's what the constitution says. Sadly, they've given speeches instead of getting the job done.

But nobody, nobody wants taxes to go up on middle class Americans. And I hope that everybody works real hard over the weekend. A lot of Americans have to work on the weekend. I don't think it's a big deal that we have to work this weekend.

AVLON: It's not a big deal and you should all be working this weekend. Listen, a few weeks ago it looked like Speaker Boehner and President Obama were pretty close on a grand bargain. Maybe not as big as some would hope, but it looked like the president was saying, we'll raise that top rate and offer some entitlement reform.

Some talk of raising the Medicare eligibility age. Now because of where we're at, do you feel the folks on the far right of your own party by not supporting the speaker have ended up undercutting their position and ultimately will get less a good deal on issues they care about than they might have otherwise.

LATOURETTE: Well, what I think is that the country has missed a huge opportunity to solve the nation's problem and instead whatever comes out of the Senate in the next couple of days is going to be small ball, kick the can down the road.

I think that's unfortunate because this is a big problem. I don't think the president and speaker were real close so I don't think my conservative colleagues have screwed anything up because the president, if you look at his call for a balanced proposal, it was never balanced.

Because he was asking for $900 billion of tax increases and chain CPI, which was the super piece is $300 billion. When you talk three to one spending cuts to tax increases he had it lopsided.

AVLON: Fair enough. But I want to bring in a third party here, S&P. Today, they released a statement, keeping America at its downgraded credit rating. Here's what they said. I want to read it to you and get your take. They said on August 5, 2011, Standard & Poor's lowered its rating for the U.S. citing among other factors the political brinksmanship of recent months that highlights America's governance and policy making becoming less stable, less effective, and less predictable.

We believe this characterization still holds. So do you believe that this Congress, your Congress, has done more harm than good? Do you feel embarrassed being part of a Congress that ranks up there with the do-nothing congresses of all time?

LATOURETTE: Well, I think America should be embarrassed by its leadership in Washington, D.C., but that extends to the White House, the Senate, and the House of Representatives.

This has been the most predictable disaster coming at us for a number of years, and certainly months. And the fact that we have been unable to do things and instead worried about our next elections instead of the next generation of Americans, I think it's sinful and I hope that people turn out those who have been responsible for it.

AVLON: Congressman, you're a straight shooter. We always appreciate you coming OUTFRONT.

LATOURETTE: Thank you.

AVLON: OUTFRONT next, mixed feelings about gun control. Most Americans support a ban on assault weapons, but also support the NRA.

Plus, allegations of child abuse at a U.S. military base, two workers in custody and 30 more taken off the job, what their background checks revealed.

Horror in the nation's largest subway system. For the second time in one month, a man is pushed to his death in front of a New York City subway train.

(COMMERCIAL BREAK)

AVLON: Our second story, OUTFRONT tonight, guns in America. Politicians promised that the Newtown massacre would change everything. But since it happened just two weeks ago today, 277 people in this country are dead because of gun violence according to a tally compiled by "Slate."

Americans are sending mixed messages about where they stand on the issue. A new Gallup poll shows that 54 percent still have a favorable opinion of the National Rifle Association, which is adamant that new gun laws are not the answer to stemming violence. That's down slightly from a year ago.

On the other hand, a poll by "The Washington Post" and ABC shows that 52 percent of Americans favor banning semiautomatic weapons and 59 percent support a ban on high-capacity clips.

OUTFRONT tonight, Roland Martin and Margaret Hoover. Full disclosure my bride -- good to see you guys. Margaret, let me start with you. I know that you grew up hunting. Your dad took you hunting in Colorado.

One of the sea changes we've seen in the wake of this shooting is senators like Joe Manchin, Mike Warner, these folks A rating from the NRA, saying, look, I've changed my mind, I've changed my heart.

Joe Manchin saying, I've never hunted with more than three shells in a clip so why isn't this a conversation that we can be having more broadly and getting Republican senators on board?

MARGARET HOOVER, CNN POLITICAL CONTRIBUTOR: Well, what I would also point you to is the Democratic governor of Colorado in the wake of the Aurora shootings also said, I'm not sure if an assault weapons ban would have stopped James Holmes in this massacre in Colorado.

In fact, an assault weapons ban wouldn't have stopped him. It's not just a Republican or Democratic issue. In fact, as you know, in 1994, the Democrats took a huge political walloping -- do you like that word? For instituting the assault weapons ban and the House of Representatives, as we all know, went back to Republicans for the first time in four years --

AVLON: I'm not sure that's why they took a whooping.

ROLAND MARTIN, CNN CONTRIBUTOR: Here's a primary reason why we have had a frankly a fake conversation. That is any time you talk about guns or gun violence in this country, it goes to, if we do this, it would not have prevented this certain act. The issue is not what just took place in Newtown.

The issue that is we have an epidemic in America when it comes to gun violence. So with this conversation, it has become one- dimensional, it's only about guns, it's about a magazine.

It hasn't been broadened to deal with poverty, economics, to deal with mental illness. So you can look at Newtown, Chicago, stand your ground laws in Florida, it's a broader gun issue.

AVLON: Now, you're talking about a comprehensive reform. You're talking about a larger conversation. Now, Margaret, I want to read you a quote by Senator Marco Rubio on this subject because he did seem to indicate a change of sentiment in the wake of Newtown.

He said through a supporter, Senator Rubio supports a serious and comprehensive study of our laws to find a new and better ways to prevent any more mass shootings. Now that is one of the few Republican senators who did send that kind of a signal in the immediate wake.

Here's the question. If we agree it's comprehensive and part of this is obviously mental health issues and you spoken out about that, why can't high-capacity magazine clips or assault weapons, which have no purpose other than to kill as many people as quickly as possible, be part of a comprehensive conversation?

HOOVER: In my view and in the view of many reasonable people, everything should be on the table if you can prove that it will work or if there's a sense it will work. Roland is laughing at me.

But the truth is, Roland, if you can -- agreed with you the other night. You said, if you can take 8 percent here, 8 percent here, 8 percent here, you should do it. I think that is a reasonable approach.

MARTIN: The reason I'm smiling is because we're trying to have inverted conversation. Newtown was a moment. Aurora was a moment. John, what you're really asking for is where is the movement?

AVLON: That's right.

MARTIN: And so with a movement, there has to be a starting point. If you look at the civil rights movement that started with Emmitt Till, three months later Montgomery. Montgomery was supposed to be a one day boycott.

You have to have people on the ground who then begin to drive this issue. The conversation can't start in Washington. Washington is an after effect. It has to start with the people in various places driving them to move. If that doesn't happen, they will not move.

AVLON: You're absolutely right. That is the history of movements in America. But there is going to be a bill, we know for a fact that Senator Dianne Feinstein is going to introduce a bill on assault weapons and high capacity magazine clips on the first day of the new Congress.

Why shouldn't more folks get behind that, Margaret, including some Republicans? Because I'd like to remind you of one thing, Justice Scalia said in the Heller decision, like most rights the second amendment is not unlimited.

He said, it is not a right to keep and carry any weapon whatsoever in any manner whatsoever for whatever purpose from the high priest of the Supreme Court of conservatism himself. Why doesn't that create some room for current conservatives like Ronald Reagan did in 1994 to back an assault weapons ban?

HOOVER: The issue is, are you going to be punishing law-abiding gun owners with these kinds of regulations? I mean, there are plenty of people who own these guns who have a right to own these guns who are not part of the problem.

Are you punishing those people who have a right to own those guns because there are crazies out there that you are not affecting with an assault guns weapon? There is nothing about this that touches mental health --

MARTIN: But Margaret, do I really need so shoot 30 bullets at one time? Is 10 OK?

HOOVER: Who is presumptuous enough to determine what that number is for law-abiding gun owners?

MARTIN: Again, this is part of its own issue. Even when you say high-capacity magazines, you've got people who are law-abiding, of course, you do. Guess what? If the people who are law-abiding say, I can hunt. But first of all, that means you're a bad shot if you need 30 bullets.

OK, again, you have to have those folks step up. John, she can introduce the bill all she wants to. Unless you have massive public pressure, which is why I got in trouble last week when I said, if one of those mothers did what Emmett Till says.

And said show my baby in an open casket, versus the photos, it causes people to change on this issue because we're confronted with it. We don't want to look at that.

AVLON: That's why we're continuing the conversation. That's a great point about Emmett Till.

Two daycare workers at a U.S. Army base in police custody tonight over allegations of abusing children. Barbara Starr has the exclusive OUTFRONT investigation.

And a second person has been pushed in front of a train in New York City. Poppy Harlow asks city officials what it says about the safety of America's largest subway system.

(COMMERCIAL BREAK)

AVLON: Our third story, OUTFRONT tonight, allegations of child abuse at a U.S. military base. Two caregivers at an Army daycare center in Virginia are charged with assaulting children.

At least 30 other workers have been taken of the job after background checks found criminal records including sexual assault and drug use. Military families are shocked and asking a lot of questions tonight. Barbara Starr has this exclusive OUTFRONT investigation.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): This little boy was supposed to be safe at an Army daycare center.

UNIDENTIFIED FEMALE: This happened to military families a stone's throw away from the Pentagon. If it could happen here, it could happen any high where.

STARR: This military wife and mother of two doesn't want her face shown. CNN has also agreed not to show her children's faces or identify them by age.

UNIDENTIFIED FEMALE: Obviously, Barbara, I am concerned about the privacy of my children and then there's always the possibility of retaliation against my husband.

STARR: It's every parent's nightmare. Finding out her toddler was physically assaulted by child care workers at the Fort Myer Army Daycare Center. The scandal grew to the point President Obama made an unprecedented phone call to Army Secretary John Macue to express his concern.

According to this FBI affidavit, this little boy and others were punched and slapped. One child was dragged across the floor.

UNIDENTIFIED FEMALE: We thought, of all the different options, putting them in a child care facility during the day that was on a military base. That was pretty well-staffed, would be the safest, most secure environment for them.

STARR: It all began back on September 26th, when a parent reported misconduct. The Army quickly reviewed surveillance video and found several young children, all under the age of 5, were physically abused.

Charges of simple assault were filed, but parents were still in the dark. Two days later, on September 28th, they are handed a letter saying only that there is a report of alleged mistreatment and inappropriate behavior by staff.

UNIDENTIFIED FEMALE: All along, this first week when we were being sort of given piecemeal information, denied access to the videotapes, we were also being asked if we wanted to seek medical care for our child.

STARR (on camera): Medical care for what?

UNIDENTIFIED FEMALE: For what? Obviously, we wanted to understand and see with our own eyes, since that evidence was available.

STARR: She was horrified when she finally saw the surveillance tape of her child.

UNIDENTIFIED FEMALE: Obviously, you don't ever want to see your child subjected to that kind of assault. These were the caregivers we entrusted them to every morning.

STARR: On November 7, the Army started checking other employee records and found backgrounds including charges of sexual abuse of a minor, assault, and drug charges. On December 14th, 30 workers are suspended. But parents are still not told about those faulty background checks. This mother says she moved her children out of the Fort Myer Center.

UNIDENTIFIED FEMALE: We believe the military families deserve better than this.

(END VIDEOTAPE)

AVLON: Barbara, it's a fascinating and disturbing report. One element is that Secretary Panetta wasn't told about this significant breach of trust, just outside the Pentagon, an Army facility, for almost two months. What happened with that?

STARR: Well, that's right, John. Secretary Panetta was not told. We are told the Army Secretary John McHugh also wasn't informed until the very end. Officials are telling us they had procedures, that they were going through personnel procedures to look at all these people.

And there was this criminal investigation that they had to finish that up. I have to tell you, aides, close aides to both men are very disturbed about all of this. They say that both secretaries want this fixed.

AVLON: Of course they do, Barbara. One other question is, how could these background checks fail so close to the Pentagon, people working with children, when their backgrounds show allegations of sexual abuse and drug use in their past?

STARR: Well, that's what they're trying to figure out. There is now a full investigation into the procedures of background checks. Were these people running into legal trouble while they were already working and it wasn't reported?

Were the background checks never done properly in the first place? They're trying to figure all of these out, and at the same time, Defense Secretary Panetta has told all of the military services to look at the same question at all of their facilities -- John.

AVLON: Thank you, Barbara Starr at the Pentagon.

OUTFRONT next, worries about the fiscal cliff wreaking havoc on our economy. Stocks down for the fifth straight day, what lawmakers must do to stop the bleeding.

We count down our top political rivalries. You can find out how many of your favorite politicians made this list.

(COMMERCIAL BREAK)

AVLON: I'm John Avlon, in for Erin Burnett.

We start the second half of our show with other stories we're following tonight.

Russian President Vladimir Putin has signed a bill into law that bans U.S. families from adopting Russian children. The U.S. State Department calls the move politically motivated and the law is seen largely as retaliation for an act signed by President Obama that restricts Russian human rights abusers from traveling into the U.S.

Two military officials tell CNN that the Syrian government is now using more accurate Iranian-made missiles. Just this week, the sources say, the regime fired at least two of those short-range ballistic missiles in an attempt to hit Syrian rebel targets more accurately. The regime's use of these weapons has prompted NATO to send patriot missile systems to protect Turkey. They're expected to be in place by the end of January.

Now, a 24-year-old woman has been arrested in connection with the gunman who ambushed and killed two firefighters when they were called to a house fire in Upstate New York. Police announced today, Dawn Nguyen, purchased the rifle and shotgun used by William Spengler in the Christmas Eve attack. They say she told the sporting goods store where she bought the guns that she would be the true owner of the weapons. But in actuality, she purchased the guns for Spengler, a convicted felon who is not allowed to legally possess guns.

And tonight, Chicago police have confirmed the city's 500th homicide after a death of a 40-year-old man on Wednesday. Since January, there have been more people murdered on the streets of Chicago than American soldiers killed in Afghanistan. In Chicago, homicides are up 17 percent and shootings up 11 percent over the last year alone. Chicago hadn't reached the 500 homicide mark since 2008.

And it has been 512 days since the U.S. lost its top credit rating. What are we doing to get it back? Not enough.

And that gets me to other fourth story OUTFRONT tonight: bracing for impact.

Fears of falling off the fiscal cliff are taking a big toll on the financial market. Stocks close lower for the fifth straight day, ending the week down nearly 2 percent. The Dow suffered its steepest loss since November 14th and tonight, the president warned of the economic consequences of this partisan gridlock.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Economists, business leaders, all think that we're poised to grow in 2013, as long as politics in Washington don't get in the way of America's progress. So we've got to get this done.

(END VIDEO CLIP)

AVLON: OUTFRONT tonight, Daniel Altman, adjunct professor of economics at NYU Stern School of Business, and Stephen Moore, senior economics writer for the "Wall Street Journal" editorial page.

Good to have you both here.

STEPHEN MOORE, WALL STREET JOURNAL: Hi, John.

AVLON: Stephen, let me start with you. Do you share the president's modest optimism?

MOORE: You know, my opinion of this changes every couple of hours, John, because, you know, there's these negotiations going on. And this morning, I felt pretty positive the president was flying back from his Hawaii vacation, Republicans seemed to be in the mood to try to get this done, and they could bridge this gap.

But, you know, my conversations with some of the Republican leaders is that not much was accomplished today. And as you know, John, the clock is ticking. What are we, 72 hours away from going over that cliff?

So I'm not sure this is going to get resolved right new. It looks like we may go into January without a deal.

AVLON: So Stephen Moore saying we're going off the cliff.

Daniel, let me go to you.

We've got new details on the plan, the president's scaled-down proposal. Here's what's on the table. Extend the current tax rates for 98 percent of Americans, incomes up to $250,000. It would extend unemployment benefits, that's an important point, not being talk about enough. Extending the alternative minimum tax patch and prevents cuts in payments to doctors who treat Medicare payments.

Now, will this scaled-down proposal, in your opinion, save us from economic disaster?

DANIEL ALTMAN, NYU STERN SCHOOL OF BUSINESS: Well, we've already done a tremendous amount of damage to ourselves, embarrassing ourselves in front of the whole world. We are assuring investors that we are as risky a place as Standard & Poor's thought we were when they reduced our credit rating. But it would be great if we could avoid some of these sharp tax increases because that is money that would be taken away from consumers, that they could spend in the future.

And restoring the unemployment insurance benefits is really important because you have millions of people who are depending on this for income. And they're going to spend that money if you give it to them, and that's what the economy needs.

AVLON: Absolutely right. Now --

MOORE: Wait, hold on. Let me say something about this.

AVLON: Go ahead.

MOORE: That outlines that deal that you just put on the table, not on the screen, that's not -- no different than what the president's been saying for six weeks. This was the problem. This is why there was no progress today because the president didn't really budge an inch.

I mean, look, I totally disagree. I think extending unemployment insurance is a big negative for the economy. I don't see why Republicans would want to do that and, of course, they don't.

What's sort of in this deal for the Republicans? There's no real spending cuts here. In fact, there's a spending increase in exchange for a tax increase.

I just see Republicans walking away from the table on that. We need real serious spending cuts and they're just not being presented here.

AVLON: Well, that's part of the tragic aspect of this whole kabuki, Stephen, because when working towards a deal, the president was offering some entitlement reform --

MOORE: What entitlement reform?

ALVON: Chained CPI on Social Security, talked about raising the Medicare eligibility age. That's not nothing from a Democratic president.

MOORE: You know what? Wait a minute, John, the Democrats never put raising the eligibility age of Medicare on the table, that was one of the reasons the negotiations broke down.

ALTMAN: Yes, Steve, there's a reason for that, and the reason is very simple. You can't do this in a two-day period. We need a deal which is going to get us over the tax cliff so we don't have the increase in tax rates.

But an entitlement reform, a comprehensive tax reform, these things are going to take more time.

MOORE: That's absolutely true but that's the reason -- why not just extend all these tax rates as we did two years ago for a year, then we can do tax reform and entitlement reform in 2013, we don't go over the cliff.

AVLON: Stephen, we'll get to the possibility of a comprehensive reform next year in a second. But let me ask you this -- if we agree, just reality check, if we all agree on 98 percent of the taxes at stake, why not just take that deal and then we can focus on the other 2 percent later.

As a card-carrying fiscal conservative, one of the leading ones in the country, do you feel a bad deal is worse than no deal? I mean, would you rather say, if it's not perfect, let's go over the cliff?

MOORE: John, I think raising the capital gains tax, raising the dividend tax, raising the estate tax, raising taxes on small businesses, right now, is a disaster for the economy, it's too fragile. So, I think --

ALTMAN: That's not true at all, though, Steve. I mean, all the research shows that actually the economic activity is not that sensitive to tax rates at the top of the income distribution --

MOORE: That's not true, it's the opposite.

ALTMAN: I'm sorry --

MOORE: It shows that the economy is highly sensitive to what the tax rates are, that's why countries around the world have been cutting their tax rates.

(CROSSTALK)

ALTMAN: We grew faster when we had higher tax rates.

AVLON: Let's just do it another reality check on this, which is that, whether we go over the cliff or have a scaled-down deal, we've got two things looming in the future, we've got a debt ceiling in probably two months, which Republicans will no doubt use as leverage. And we still don't have a grand bargain that deals with the long-term problem of deficit and debt by taking on tax reform and entitlement reform.

What rational reason -- Stephen, first to you, and then to Dan -- what rational reason should we have that that other kick the can to another situation we're about to go off a cliff would produce any different result from a new Congress?

MOORE: I'm not sure it will. I mean, John, what we're talking about here is very deep ideological divisions in terms of what causes economic growth and what causes prosperity for the country. I mean, you can see it in the two of us arguing about this. I think raising tax rates is a disaster for the economy, I think it will -- it will be very harmful, a lot of liberals believe it doesn't do too much harm at all.

So, we have some deep philosophical differences here.

(CROSSTALK)

ALTMAN: -- much more important. And the problem is not only are we embarrassing ourselves in front of people from around the world and making it seem a lot riskier to invest in this country, but we're also manufacturing this crisis which is essentially going to mean government loses the trust of voters, and that's going to make it much harder to collect taxes in the future and spend in the future and do anything.

MOORE: Well, I agree. I think we should get this done. I think we should extend the tax cuts, go into 2013 without going over the cliff, and then dealing with some of these issues. I mean, look, you're right, it will be an embarrassment to the American economy if we go over this cliff. I think it would be very problematic for us.

But you can't blame the Republicans on this. I think both parties share equally in the blame.

ALTMAN: The polls say that everybody's going to blame the Republicans.

AVLON: Well, that's a political matter. I'll tell you one thing -- it's not a philosophical disagreement. It's turning into a crisis of self-government.

MOORE: Well --

AVLON: Now, a disturbing story out of New York tonight, next. Police are looking for a young woman who allegedly pushes a man onto the subway tracks when a train was approaching the station in Queens. Police have just identified the man as 46-year-old Sunando Sen of Queens, New York.

Now, this is the second time in a month a passenger was pushed to his death in front of a train. It's raising some serious questions about the safety of the nation's largest subway system. Poppy Harlow is OUTFRONT tonight with the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: It was -- it was horrible. He fell to the bottom and I never want to hear something like that again.

POPPY HARLOW, CNN CORRESPONDENT (voice-over): This man says he heard the final scream of the victim. James Callanam's train was halted because of the incident.

UNIDENTIFIED MALE: They said this is the last stop, debris fell on the tracks. That's all they were telling people.

HARLOW: Witnesses say the victim was standing on the edge of this subway platform in Queens when a woman who was pacing and talking to herself pushed him on to the tracks.

The victim was a graphic designer who had moved to New York from India.

AR SUMAN, VICTIM'S ROOMMATE: I'm feeling very bad. He has nobody here. And I heard that his parents die before -- long time before.

HARLOW: Surveillance footage captured this woman running from the station. Police are searching for the woman they describe as heavyset, in her 20s, wearing a ski jacket and sneakers.

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: We do live in a world where subway platforms are open and that's not going to change.

HARLOW: At a news conference on Friday, Mayor Bloomberg and New York City Police Commissioner Ray Kelly were inundated with questions about the subway death.

(on camera): Mayor Bloomberg, a second subway pushing death in this city in less than a month, I'm wondering what your reaction is to that. How can it be prevented?

BLOOMBERG: Well, I don't know if there is ways to prevent. There is always going to be somebody, a deranged person.

HARLOW (voice-over): Just this month, a 58-year-old man was killed when a homeless man shoved him onto the tracks in Times Square.

(on camera): Commissioner, would you consider putting more police on the platforms in the wake of what has happened this month?

COMMISSIONER RAY KELLY, NEW YORK POLICE: No, we think that we are properly deployed in the transit system.

HARLOW: So, not something you would consider at this point?

BLOOMBERG: You show me anyplace in this world where you have five and a half million people get together that has the virtually zero crime rate that we do.

HARLOW (voice-over): The MTA which runs New York City subways would not talk to us on camera, but said people should stay away from the platform edges and be aware of their surroundings at all times.

Bill Henderson advises the MTA.

(on camera): What can be done to prevent things like this?

BILL HENDERSON, NYC TRANSIT RIDERS COUNCIL: Well, I mean, not -- you can't eliminate the possibility, but this is a very rare occurrence.

HARLOW: Why not put some sort of barrier here?

HENDERSON: Well, you have different car types running on the tracks in New York City subways and they have doors placed at different points along their length. If you ran a different kind of car, you'd have to move the openings.

HARLOW: Just not practical?

HENDERSON: Just not practical.

HARLOW: Very expensive?

HENDERSON: Very expensive.

HARLOW: Keep in mind, subway deaths like this are very rare here in New York City. Years go by without them happening. And the same is true in other major cities like Washington, D.C. and Boston -- John.

(END VIDEOTAPE)

AVLON: Thank you, Poppy.

Still to come, the battle lines have been drawn. The players have picked their side. Our panel counts down the best political rivalries, next.

(COMMERCIAL BREAK)

AVLON: We're back with tonight's "Outer Circle", where we reach out to our sources around the world.

Tonight, we go to Johannesburg where despite rumors that Nelson Mandela is close to death, his family says he is at home doing well following gallstone surgery.

CNN's Robyn Curnow spoke with Mandela's granddaughter just a short while ago, and I asked Robyn what else she learned about Nelson Mandela's health.

(BEGIN VIDEO CLIP) ROBYN CURNOW, CNN CORRESPONDENT: John, this is the first time we've heard from anybody close to Nelson Mandela since he was hospitalized in early December. There's been secrecy about his condition so no doubt many will be relieved to hear his granddaughter say that he's cheerful and in good spirits.

UNIDENTIFIED FEMALE: He's sitting up and he was waving at the kids, and he was smiling at the kid is. He's very alert.

CURNOW: His granddaughter addressed the rumors particularly on social media that Nelson Mandela was sent home by his doctors to die. She says this was not the case and that the family and Nelson Mandela deserved both privacy and respect -- John.

(END VIDEO CLIP)

AVLON: Thank you.

Our fifth story OUTFRONT tonight: Now, before a big fight, boxer Mohammad Ali used to say, we're going to get it on because we don't get along.

ROLAND MARTIN, CNN POLITICAL ANALYST: One more young man rambling.

AVLON: That's right.

And the same is true in political rivalries today. After a bruising election year, our nation's star politicians are getting ready for some new fights in the 2013. They're dusting off their gloves, they're getting back in the ring. We have a front-row seat and here are an early look at the top five political rivalries that will likely play out in the New Year.

Here to bring them down: Reihan Salam, Roland Martin and Margaret Hoover.

(CROSSTALK)

AVLON: I like that. I like that very much.

(LAUGHTER)

AVLON: Let's start up in the Bay State, because we've got a bitter fight from this election year and you can see these folks serving again in the Senate. Elizabeth Warren and Scott Brown, let's take a look at their sparring this year.

(BEGIN VIDEO CLIP)

SEN. SCOTT BROWN (R), MASSACHUSETTS: I think what you're referring to is the fact that Professor Warren claimed that she was a Native American, a person of color. And as you can see, she's not.

SEN.-ELECT ELIZABETH WARREN (D), MASSACHUSETTS: Senator Brown wants to raise an issue about my character, then I'll lay it out there. You know, when I was growing up, these are the stories I knew about my heritage. I believed my mother and my father and my aunts and my uncles and I never asked anybody for any documentation.

(END VIDEO CLIP)

AVLON: Well, I'll tell you, Scott Brown obviously lost that race. But with John Kerry going to State, Scott Walker's probably going to run the special in June, they could be serving together.

Roland, what do you think about that?

MARTIN: She knocked him out like my man Manny Pacquiao got knocked out, OK? So forget that.

AVLON: You don't think Scott Brown's coming back?

MARTIN: It was way too close. She beat him down this last race, trust me.

REIHAN SALAM, CNN CONTRIBUTOR: Barack Obama dealt the knockout blow. It wasn't -- it wasn't, you know, this candidate. She was a very, very weak candidate by any standard. She's beloved by progressives nationwide. But she won because Barack Obama was at the top of the ticket, let's get real.

MARTIN: She was running against him.

MARGARET HOOVER, CNN CONTRIBUTOR: Scott Brown has a 58 percent favorability rating in Massachusetts. It's very likely he's the Republican nominee. It is very likely he goes back to the Senate. And guess what, all fair in love and war, they're going to be colleagues in the Senate. If that's true, they'll get over it.

(CROSSTALK)

MARTIN: John, when she loses, play that tape of Pacquiao getting knocked down, say that's Scott Brown right there.

AVLON: I'll tell you what? This is going to be a fascinating race, because Margaret's right, Scott Brown's still popular in Massachusetts.

MARTIN: But he lost.

AVLON: Right. That is a Republican.

Let's go to the next one. All right. Number four rivalry: Paul Ryan versus Marco Rubio. Two folks getting a lot of pressure, seen as the next face of the Republican Party, already making jokes about 2016.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: Both parties tend to divide Americans into our voters and their voters. We must speak to the aspirations and anxieties of every American. SEN. MARCO RUBIO (R), FLORIDA: One of the fundamental challenges before us is to find an appropriate and sustainable role for government, and closing that gap between the dreams of millions of Americans and the opportunities for them to realize them.

(END VIDEO CLIP)

AVLON: Now, that was at the Jack Kemp dinner, they were joking about seeing each other at diners in Iowa. But they're both also making very conscious plays to have the GOP reach out to the middle class, reach out beyond their beyond their base, the repudiation of Mitt Romney. Are these two folks, these two rising stars on Capitol Hill, on a collision course, Margaret?

HOOVER: No, this is a rivalry Republicans welcome. We want to see that Republicans duke it out. And, by the way, add Bobby Jindal, add Ted Cruz, add Susana Martinez, add (INAUDIBLE). I mean, bring it on. This is what the Republican Party needs in order to revive itself.

(CROSSTALK)

HOOVER: Absolutely.

MARTIN: The real battle will be Rubio/Ted Cruz, because they want to say I can lock up Latinos. And so, you want to be able to deal with me when it comes to the primary, that's going to be the real fight, because Cruz is -- look, he's a Texan. He's going to come in swinging. He's going to walk in and say, Marco, you're not the only hot Hispanic in the U.S. Senate.

SALAM: Rubio and Cruz are very, very far apart, whereas Rubio and Ryan are saying much the same thing right now. That's why that's an interesting rivalry, they're both trying to craft this middle class message. But they're doing it in subtly different ways, and I think Rubio has the inside track.

AVLON: Let's do something a little even more topical, which is John Boehner and Eric Cantor. I mean, the atmosphere up on Capitol Hill has been like the Roman senate for a long time now. These folks working together in leadership, but even over a year ago, "Politico" was running an article saying Boehner and Eric Cantor call for a truce, talking about a year of bitter, behind the scenes fighting against each other. Their staffs were trying to find a way to work together.

Now, speaker vote is coming up January 3rd. Boehner just had a bad beating in the Plan B vote.

So, you don't think this is going to get better, do you?

SALAM: I think the main thing that Boehner has going for him in this rivalry is he has the worst job in the world. Eric Cantor is actually --

AVLON: Really, the worst job? SALAM: It's certainly the worst job in Congress.

Basically, Speaker Boehner has to sit there and eat a lot of stuff that you wouldn't necessarily want to eat because there are a lot of Republicans who basically want to emote, they want to act up. And Speaker Boehner just has to take it and try to hammer deals. And Eric Cantor goes into his role, suddenly, he has to do the same thing Boehner has to do.

MARTIN: This is simple. The starting quarterback hates the number two quarterback. And Boehner, if he was smart, he should have dispatched him a long time ago and he should have said, young man, I'm going to put you out to pasture if you pull that crap on me again. He made the mistake on the debt ceiling.

HOOVER: But the truth is the two of them are working very closely together in these negotiations. Boehner hasn't cut Cantor out. And Boehner --

(CROSSTALK)

HOOVER: You ask any Republican -- the Roman senate. You ask any Republican on the Hill, nobody thinks Boehner is challenged.

AVLON: That does seem to be conventional wisdom. But it only does take 17 votes for that whole thing to fall apart. And I'll tell you, I mean, it does -- he reminds me of "The Godfather", keep your friends close, your enemies closer.

(CROSSTALK)

SALAM: -- Cantor seeks that job, though. He knows him too well to want to take it.

AVLON: That's a fascinating point as well.

Number two, we've got Grover Norquist versus the GOP. And here's what's fascinating. He's been a major player, a huge figure, and yet the push back has been growing. The tide has been swelling.

Take a look at this montage clip of Republicans pushing back on Grover Norquist in the ATR pledge.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER (R), TENNESEE: I'm not obligated on the pledge.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece.

JEB BUSH (R), FORMER FLORIDA GOVERNOR: I've run for office three times. The pledge was presented to me three times. I never signed the pledge.

FMR. SEN. ALAN SIMPSON (R), WYOMING: He's becoming irrelevant. You can see it in his eyes. He knows the game is up.

REP. PETER KING (R), NEW YORK: A pledge you sign 20 years ago, 18 years ago, is for that Congress.

SEN. TOM COBURN (R), OKLAHOMA: But I'm going to be the one to determine what a tax increase is. Grover Norquist is not going to determine what a tax increase.

(END VIDEO CLIP)

AVLON: Message seems clear: don't fear the Grover. That's echoing throughout the upper echelons of the GOP, Margaret.

HOOVER: Boehner just put revenues on the table and we've heard nothing from Grover Norquist. So, I actually don't -- I think this is a false drama. This is manufactured by people like you who can't stand Norquist.

AVLON: People like me?

The emperor is wearing no clothes, and I think it's worth pointing it out.

SALAM: I think the fiscal cliff is a big deal here because it's kind of like a vampire and garlic, because basically, once you go over the fiscal cliff, and suddenly, tax rates go up so much that, you know, anything is a tax cut beyond that. The thing is that if you're actually raising taxes from a current policy based tax line, then you might violate his pledge. But once they go up automatically, then cutting them from there, which could still mean higher taxes than we have now, is not actually a tax hike.

MARTIN: Since he brought up true blood, you mentioned "The Godfather", they need to treat him like Fredo.

AVLON: I always appreciate a good "Godfather" reference.

Number one, it's kind of surprising, it's Hillary versus Hillary. Here is why, because she's got the whole Democratic field frozen up. Here's her denial and then James Carville setting the report straight.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: You know, I've said I don't really believe that that's something I will do again. I am so grateful I had the experience of doing it before. But, you know, I think there are lots of ways to serve. So I will continue to serve.

BILL CLINTON, FORMER U.S. PRESIDENT: She's an extraordinarily able person. I never met anyone I thought was a better public servant. But I have no earthly idea what she'll decide to do.

JAMES CARVILLE, CNN CONTRIBUTOR: Every Democrat I know says, God, I hope she runs. We don't need a primary. Let's just go to post with this thing. We don't want to fight with anybody over anything.

(END VIDEO CLIPS)

AVLON: She's leaving State, but I hate to fast forward into 2016, but the fact is until she makes up her mind what she does, the Democratic presidential field is frozen.

MARTIN: No, it's not.

AVLON: No? Tell me why not.

MARTIN: No, it's not. Compare Hillary Clinton 2012 to Clinton 2008. Everybody said, don't run, she's going to walk away with it. What happened?

Four years is a long time. So, if James and the rest of folks who are begging for her, trust me -- if she runs, she will not be running alone. She will have to fight in a primary.

AVLON: I mean, but, Margaret, are Republicans quaking in their boots at the thought of Martin O'Malley or John Hickenlooper, your governor, or any of the other -- Andy Cuomo?

HOOVER: Look, I actually think Hillary Clinton deserves a year to take a deep breath and not have to worry about it. I mean, she needs to rest.

AVLON: Yes, she does.

HOOVER: Give her 2013. It's not Hillary versus Hillary. But I think she ends up running.

SALAM: I think Roland makes a fascinating point. I mean, who the heck knows what could happen and how things are going to shake up.

AVLON: Well, that's fascinating point. Fascinating conversation for 2013.

We'll be right back.

(COMMERCIAL BREAK)

AVLON: That's all for us at OUTFRONT tonight. Erin is back next week and we'll be following all of the late breaking developments on the fiscal cliff negotiations which are coming down to the wire. It's a working weekend in Washington.

Have a great weekend and a happy New Year.

"ANDERSON COOPER 360" starts right now.