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Senators Release Scathing Report on Benghazi Attack; Final Hours of Fiscal Cliff Negotiations; Obama Pushes Forward on Gun Control; Another Cliff: Milk Prices Could Rise

Aired December 31, 2012 - 10:30   ET

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


(COMMERCIAL BREAK)

JOE JOHNS, CNN ANCHOR: Happening now on Capitol Hill, senators are releasing a special report on the terrorist attack that killed the U.S. ambassador to Libya and three other Americans. The investigation, we've learned, offers another scathing assessment of the State Department and its failure to protect the U.S. consulate in Benghazi.

We're expecting to hear from a number of members of Congress there in just a little while. Our foreign affairs correspondent, Jill Dougherty, is also monitoring that and she'll get back to us with a report as events merit.

You have probably never heard of the Office of Congressional Ethics. It's an office you should be concerned about because it's one of the most important watchdogs in Washington. It investigates possible wrongdoing by members of Congress. But now the Office of Congressional Ethics is in danger of being eliminated.

(BEGIN VIDEOTAPE)

MELANIE SLOAN, DIRECTOR, CREW: What is outrageous about it is that you see members of Congress on both sides saying they have zero tolerance for unethical conduct, but then behind closed doors, they are quietly trying to kill the one body in Congress that's trying to seriously go after unethical members.

JOHNS (voice-over): Melanie Sloan is director of CREW or Citizens for Responsibility and Ethics in Washington. She's talking about the Office of Congressional Ethics or the OCE, the only government body that is outside of the Congress whose sole mandate is to formally investigate members inside Congress. But many of those same members of Congress simply want the OCE gone.

SLOAN: The OCE has forced members of Congress to take ethics more seriously. It has forced the Ethics Committee to act and let all members of Congress know that they are not going to just be able to skate by like they have for so many years with unethical conduct, just going on.

JOHNS (voice-over): CREW is considered by some to be left-leaning and liberal, but they are not the only ones worried about the OCE. JOHNS: One of your counterparts told us members of Congress publicly will go out and say they support the OCE, they support cracking down on ethics, while privately they are trying to kill it.

Do you think that's true?

KEN BOEHM, CHAIRMAN, NATIONAL LEGAL AND POLICY CENTER: Yes.

(LAUGHTER)

BOEHM: No, that is true.

JOHNS (voice-over): Ken Boehm is chairman of the conservative right- leaning National Legal and Policy Center.

JOHNS: If OCE goes away, if the members are not named, if it's not reauthorized, what message does that send to the public?

BOEHM: It sends a message to the public that not only is this system broken, the ethics system broken, but it doesn't even exist anymore.

JOHNS (voice-over): The OCE was formed just four years ago after scandals and corruption had grown so bad the House had to clean up its act. Speaker Nancy Pelosi helped create the OCE as a solution.

In just four years, the OCE has done more than 100 investigations of lawmakers raising serious questions about possible congressional misdeeds. In 37 of those investigations, the OCE referred them on to the actual House Ethics Committee for further review, meaning that in those 37 cases, the OCE found reason to believe that House ethics and sometimes federal laws were likely violated.

So why exactly does Congress want to kill it? Well, actually that's hard to say. Folks like these who have in the past voted to cut the OCE budget or to limit its powers refused to talk to us.

For those who would talk, opinions were mixed.

REP. BRAD MILLER (D), NORTH CAROLINA: I think it's important that there be some way for the public or for someone outside of Congress to raise issues about the conduct of members of Congress. Some of the things that OCE has sent to the Ethics Committee was actually pretty flimsy.

UNIDENTIFIED MALE: I supported it the first time, I'll support it again.

UNIDENTIFIED MALE: I don't think it's working well.

JOHNS: Is there anything OCE has done specifically that might have rubbed the Congress the wrong way to the point where they wouldn't want to get it going again?

SLOAN: Well, in fact, nearly everything the OCE does has rubbed the entire Congress the wrong way. And in large part that's because Congress don't want to hold anybody accountable for ethics violations. JOHNS (voice-over): Former Congressman Lee Hamilton is a respected member from Indiana who served more than 30 years and helped chair the famous 9/11 Commission. He says the getting the new OCE board members appointed is crucial to having ethics enforced in Congress.

LEE HAMILTON, FORMER HOUSE REP.: Whether or not you appoint the new members to the OCE is a critical point.

JOHNS (voice-over): Congressman Hamilton is now the director of Center on Congress at Indiana University.

HAMILTON: And it is going to tell us whether the leaders of the Congress are serious or whether they are not serious about the enforcement of the standards of conduct within the institution. This is a critical test.

(END VIDEOTAPE)

JOHNS: It's really hard to know exactly who is quietly leading the effort to kill the OCE. In the past, several lawmakers have criticized the agency or voted to slash its budget. House Speaker John Boehner and Minority Leader Nancy Pelosi need to lead the effort to reauthorize the OCE and appoint new board members. So far it hasn't happened.

Forget your waistline. Milk, ice cream, cheese and many other dairy products might soon slim down your wallet if Congress fails to vote on a farm bill extension. The deadline for action is just hours away.

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(COMMERCIAL BREAK)

JOHNS: The price of milk and other dairy products may double if Congress fails to pass a farm bill extension by tomorrow. Suzanne Malveaux spoke with the vice president of communications for the National Milk Producers Federation, who said the biggest losers are not our bank accounts but the farmers.

(BEGIN VIDEOTAPE)

CHRIS GALEN, V.P. COMM., NMPF: What we're asking Congress to do, Suzanne, is actually pass a new farm bill, as you mentioned, because that's going to provide dairy farmers a better safety net than what they have had in the past few years. 2012 was a really rough year for dairy farmers and so they are really hurting right now.

And we don't want to go back to this 1949 law. It's not a sustainable policy solution long-term. However, it may take the prospect of going over the dairy cliff to prompt Congress to do its job here in the next few hours, hopefully, and pass a new farm bill that has a better safety net for dairy farmers going forward.

SUZANNE MALVEAUX, CNN ANCHOR: Yes, Chris, we're all waiting to see what Congress does, if they're going to do anything at all in the next 12 hours or so. What would this mean if you go to the grocery store and you don't have this extension? What kind of prices are we looking at?

GALEN: Well, first of all, Suzanne, the hangover for consumers and some other products tonight won't be affecting consumers of dairy products tomorrow morning. It doesn't happen that quickly.

What would happen, though, if we go back to this 1949 law as your earlier sound bite from Secretary Vilsack indicated, is that the USDA would be required to raise prices to dairy farmers and eventually that would trickle down to consumers of all dairy products.

MALVEAUX: So are we talking about like within days, within weeks, within months that you'd actually see some sort of dramatic change when we go grocery shopping?

GALEN: It won't be in the next few days, but I can't tell you that when we're back in our office on January 2nd, one of the first things we'll do is contact the Department of Agriculture and urge them to move ahead with this permanent law, again, not because we think it's a sustainable solution long-term, but because we need the prospects of that permanent law in order to hold Congress's feet to the fire to get us a new farm bill.

MALVEAUX: And, Chris, we're seeing all these pictures. I imagine we're not just talking about milk, but we're talking about milk by- products, that there are many different things that we would see on our shelves that would be dramatically much more expensive.

Can you give us a sense of the kinds of things? Is it produce, is it cheese and pizza or (inaudible)?

(CROSSTALK)

GALEN: It's everything, Suzanne, that's -- it's everything that's made from milk. And I think the other important point here is that dairy and milk products are not the only commodities affected by Congress' failing to pass a new farm bill.

We're the first one out of the gate because of how dairy production happens, which is every day of the year, including on holidays. But there are some other major commodities, including wheat and corn, that would also be affected by reverting back to this 1949 law that Tom Vilsack mentioned.

So we're the first one to have this happen to our industry, but it certainly won't be the only commodity affected if Congress still doesn't bring us a new farm bill with the new year.

(END VIDEOTAPE)

JOHNS: Congressional leaders have actually agreed to a one-year extension of the farm bill that would keep dairy prices from going through the roof. The House has until tomorrow to vote on it.

He's not out of the hospital just yet, but things are looking up for former President George H.W. Bush. We'll have the latest on his condition.

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(COMMERCIAL BREAK)

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JOHNS: Checking top stories now.

The nation is just about 13 hours away from the fiscal cliff. Sources tell us U.S. Vice President Joe Biden and Senate Minority Leader Mitch McConnell talked through the night and vowed to keep negotiations going on today.

Former President George H.W. Bush is still in a Houston hospital, but no longer in intensive care. Bush was moved to a regular patient room Saturday to continue his recovery. The 88-year old was initially hospitalized with bronchitis last month and last week came down with a stubborn fever.

Military-style rifles and high-capacity ammunition are in high demand across the country. And assault weapons are selling out. Public fears of new gun control restrictions are feeding the frenzy. Online retailers, sporting goods stores and manufacturers cannot keep up with the demand.

And while manufacturers in retail stores work hard to meet the public's demand for assault weapons, President Obama is stepping up his campaign for new gun regulation and making it a top priority in 2013.

Brianna Keilar is at the White House.

Brianna, what do you think new gun control regulation is going to be an uphill battle for the president?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: You know, that is the thought. And President Obama addressed this, Joe. He admitted that this is something that is obviously difficult and has been historically to get through Congress, because there are a number of Democrats as well as Republicans who support gun rights.

But he said for him, at least, he felt like what happened in Newtown was different in that it changes things. So that is what he -- he also said that the day of the shooting in Connecticut that it was the worst day of his presidency. He said that something fundamental has to change in America. Here's what else he said on "Meet the Press" about this issue.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So I'm going to be putting forward a package and I'm going to be putting my full weight behind it. And I'm going to be making an argument to the American people about why this is important and why we have to do everything we can to make sure that something like what happened at Sandy Hook Elementary does not happen again.

But, ultimately, the way this is going to happen is because the American people say that's right.

(END VIDEO CLIP)

KEILAR: Joe, as you know, the president has tasked Vice President Joe Biden with leading what's really a task force across agencies, Education, Health and Human Services, Homeland Security, trying to come up with recommendations for a comprehensive way forward on the issue of gun violence.

We do know already President Obama is urging Congress to do a number of things to pass a ban on assault weapons, a ban on high-capacity ammunition clips, as well as to close the gun show loophole so that all gun purchasers would have background checks.

He also has talked about wanting to make sure that mental health is an issue and that people have access to resources, that they have access to deal with mental health issues, he said as much access to mental health care as they would to a gun, Joe.

JOHNS: Brianna, these are just bruising battles on Capitol Hill. The gun lobby is organized. They are motivated.

Is there any reason to think that this White House, this administration really is motivated to take on that kind of a fight?

KEILAR: You know, I think it's something personnel for President Obama. That's really the sense that he's given. When he said this was the worst day of his presidency, I think you could see how much he was affected by this. He has said when it comes to this task force led by Joe Biden -- and he wants recommendations by the New Year -- so this is something he wants Congress to deal with.

I think it's still to be seen whether there's an appetite to really deal with it in Congress, because the rhythm of the stories is that they tend to -- it's a tragedy but that tends to -- the motivation of it goes away over time. I think we have yet to see that. But I think that President Obama is going to at least try to go to battle on this issue.

JOHNS: That's very interesting. Thanks so much for that.

Brianna Keilar at the White House.

JOHNS: Happening now on Capitol Hill, senators are releasing a special report on the terrorist attack that killed the U.S. ambassador to Libya and three other Americans. What they are saying, next.

(COMMERCIAL BREAK)

JOHNS: Happening now, U.S. senators on Capitol Hill are releasing a scathing new report on the attack on the U.S. consulate in Benghazi.

There on the right of your screen is Maine Senator Susan Collins. She's one of the two top members on the Senate Homeland Security Committee.

Let's bring in our own Jill Daugherty, our foreign affairs correspondent, who is monitoring this from the State Department.

Jill, what can you tell us?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Hey, Joe. If you listen to what Senator Collins is saying and also Senator Joe Lieberman, they are coming up with essentially three different things.

The main thing is that there was a rising crescendo, as Lieberman says, of evidence from the intelligence community and even open sources that Benghazi was increasingly dangerous and that attacks there were more and more likely, but that the reaction was woefully inadequate.

They say the system, as they quote one official, "was flashing red," but the State Department, they say, did not adequately respond to that.

Another key point is they talk about security. You know, security in other countries for embassies and consulates, et cetera, is the responsibility of that local government.

But in Libya, they say the Libyan government was not at all adequate to the task, and so the State Department turned to local guards, militias, et cetera, who also were dubious and that was one of the key problems.

Senator Lieberman -- and let's listen to what he says -- he essentially believes that if you can't provide security, you should close it.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (I), CONNECTICUT: The State Department failed to take adequate steps to fill those security gaps, failed to adequately support security requests from its own personnel in Benghazi and failed to make the one remaining decision that cries out to me, as I look at the evidence here, which was to simply say we've got to close this facility because we can't protect American personnel in Benghazi.

(END VIDEO CLIP)

DOUGHERTY: Yes, and that's one of the key issues all along. The State Department has made it clear they have to work in dangerous places. But what these senators -- and it's a bipartisan committee -- are saying is that if you cannot do it realistically, you shouldn't put people in such harm's way.

Couple of other points, Joe, Department of Defense and the State Department were not adequately coordinated in terms of potential for attack, so that the DOD, when the -- this attack happened, was not able to muster people to get in there and provide some type of rescue.

And then finally, inconsistent statements by the Obama administration during a political campaign, these senators are saying, led to a lot of confusion and it should never, they say, the intelligence community should never be agreeing to provide talking points in such an environment, especially political campaign as happened during that political campaign.

Joe?

JOHNS: Starting to get some answers there on Benghazi. Thanks so much for that, Jill Dougherty at the State Department.

We'll be back in a moment.

(COMMERCIAL BREAK)

JOHNS: What those folks on Capitol Hill do about the fiscal cliff may have investors on edge, but it's actually been a really good year for stocks in general.

Alison Kosik at the New York Stock Exchange with more on the Dow's best performers this year. Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You're right about that, Joe. It's interesting because you look at all the heartburn that lawmakers have caused investors in this market, and you're right, it hasn't been too bad of a year for stocks. You look at the Dow; it's up 6 percent since the beginning of the year. So, of course, the question is which stocks in the Dow have done the best?

So as of Friday's close, Bank of America, that has doubled its stock price. Part of that has to do with how low they began the year, but it's also been streamlining things. It's been getting further away from the housing crisis that took such a toll on the company profits.

The company's also been cutting its workforce, and getting rid of nonessential assets as part of its project new BAC movement.

Meantime, shares of Home Depot, they are up 44 percent this year because Home Depot has benefitted from the rebound in the housing market along with a boost in East Coast sales before and after Hurricane Sandy.

And rounding out the top five best performers in the Dow, Walt Disney, JPMorgan Chase and Travelers, Joe.

JOHNS: All right. Let's talk about the weakest performers. We got to throw them in, too.

KOSIK: Yes, we do. So the weakest, the worst performer on the Dow has been Hewlett-Packard, poor Hewlett-Packard, down 47 percent this year. You know, this company just hasn't been able to get a break. It's struggled -- it's really struggled with its slowing PC sales. More recently, it had to take a $9 billion charge related to alleged accounting fraud in its autonomy unit.

It's really been a tough year as well for Intel, Intel down 17 percent this year. Like HP, Intel has been hit, as most people are shifting away from buying personal computers. They are putting their money into tablets.

McDonald's: McDonald's lost 13 percent this year to become the third worst performer. And Caterpillar and DuPont, those dipped as well.

But you'll notice, Joe, the theme here with the ones that are the weakest, a lot of these companies have big international exposure. So you can see how the global economic crisis has hit us here at home.

Joe?

JOHNS: Absolutely. Thanks so much for that. Alison Kosik, Happy New Year to you, by the way.

KOSIK: Same to you. Thank you.

JOHNS: You bet.

I'm Joe Johns. Thanks for joining us today. CNN NEWSROOM continues right now with Christine Romans.