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President Pushes Congress; Wall Street Reacts; Biden Leading Talks With Senate Republicans; Clinton Hospitalized For Blood Clot
Aired December 31, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DEBORAH FEYERICK, CNN ANCHOR: Top of the hour. Good afternoon, everyone. I'm Deborah Feyerick, live from CNN's world headquarters in Atlanta. And as I speak, in deal yet on the fiscal cliff, but -- it's a big but -- it appears lawmakers may be getting just a bit closer.
JOE JOHNS, CNN ANCHOR: And I'm Joe Johns live from Washington, where just moments ago the president encouraged lawmakers to cross the finish line.
It was a compromise U.S. lawmakers signed into law in 2011 that contributed to the pending manmade catastrophe that they've been warning about for more than a year. Now, as the New Year's deadline approaches, the fiscal cliff may be moving to a later date in 2013. It's part of a possible deal that is forming at this hour. This, of course, represents the $3.6 trillion the U.S. government spent last year unless Congress reaches a deal when the new year hits, so too will the fiscal cliff. $600 billion worth of tax increases and spending cuts. It's supposed to be automatic. But now, Republicans are suggesting a delay. The president just spoke trying to add pressure to Congress to avoid going over the fiscal cliff. Listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it, that solves our deficit problems in a balanced and responsible way that doesn't just deal with the taxes, but deals with the spending in a balanced way so that we can put all this behind us and just focusing on growing our economy. But with this Congress, that was obviously a little too much to hope for at this time.
(END VIDEO CLIP)
JOHNS: Let's turn now to chief White House correspondent Jessica Yellin.
Jessica, let's talk a little bit about the outlines of the deal, the fact that the president came out to make his case and try to push this thing over the finish line. What does the White House have to do to gain the backing it needs?
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, what we heard from the president today, just now, was really an emphasis that there are a lot of components here for Democrats to like because their focus especially is on making sure that -- because I should say Democrats really need to come out in force for this to get across the finish line.
What you asked is also what is in this measure. A tax increase or taxes to -- would go back to the Clinton levels for people who make $400,000 a year, or households that make $450,000 a year. And there would be an extension of unemployment benefits for some 2 million Americans. We would see an increase in the estate tax, but not an absolute increase to what it was going to be. And they're still working out whether or not there will be a delay in these jump -- these big spending cuts.
Now, this is -- a lot of this is a big Democratic win. And the reason we're seeing such a Democratic win is because they do need so many Democratic votes, especially in the House of Representatives, for this to succeed. There are spending cuts in this that would still be included in order to get Republicans on their -- on the team. And that hasn't been detailed. Why? Because it was the president talking to Democrats. We have to hear from the Republican side, Joe, to get the Republican spin on what's in the package.
There's a lot more to talk about from the president's perspective. A lot of people are asking me who was behind him, but I'll let you ask me the questions.
JOHNS: Absolutely. Great. Well, what we want to do now is go over to Capitol Hill and talk to Dana Bash just a little bit because, as we know, when these big deals among leadership get announced, there's still the active job of selling it to the rank and file, both the Democrats and the Republicans. And, Dana, I'll just ask you directly, are you hearing from anyone who's saying anything about whether this thing will fly in the House and the Senate?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, obviously, it's going to start in the Senate, so that's where we're going to first see if the votes are there. But as I was saying to Wolf before, it is very hard to imagine at this late day and this late hour that Harry Reid and Mitch McConnell will agree to anything that won't get a majority of the votes in both of their caucuses.
But then the next move is obviously going to be the House, which is where I am right now. And I'm with a Republican member of the House, Darrell Issa.
Thank you very much for joining us. First, can you react to what the president said?
REP. DARRELL ISSA (R), CALIFORNIA: Well, I certainly think I'm pleased that there may be a deal, bring some certainty to the American people. I'm disappointed that the president took the eve of what might be a bipartisan deal to take a swipe at Congress once again. I think the president fails to understand what Senator Barrasso said repeatedly, which is, it's a failure of leadership that we're in this boat. It's a failure of the president to engage all the way back in August, or even in the budget process. But having said that, I think all of us would like to have certainty for the American people come January 1st. BASH: And, obviously, it goes without saying, excuse me, that the president, in your words, took a swipe, because there is a lot of frustration among Democrats with House Republicans. They think that House Republicans held this up for a long time in demanding more spending cuts than could pass.
ISSA: Well, you know, the amazing thing is that we're not going to get -- we weren't asking for that many spending cuts. We're not going to get that many spending cuts. Even if we were to go back to the Clinton taxes, and essentially let us go over the cliff, we still have about $500 billion worth of deficit due to this 100 percent growth in spending under President Bush and President Obama. And I think Republicans ask for less than they should have. We're going to have to ask for more in the way of spending cuts, because once we do this very small, large increase on the wealthy, but small amount of revenue, we're going to have to come back again. And I think the middle class have to understand that you can only get so much from the rich when they're already going to be paying over 55 percent on their ordinary income come next year, at least in my state of California. There's going to be a limit to how much you can do. Ultimately, all taxes end up being paid disproportionately by the middle class.
BASH: Are you going to vote for this?
ISSA: I haven't seen the bill yet.
BASH: But, you know, would you vote for tax increases or tax cuts up to $450,000?
ISSA: I've said repeatedly that ultimately I'll find a way to support something that brings certainly to the American people. But I think that this likely bill is going to have too few cuts and it's going to depend on a relatively small amount of people that candidly don't represent enough money to bring a real fix to our trillion dollar deficit.
BASH: All right, thank you very much for joining us. Appreciate it.
ISSA: Thank you, Dana.
BASH: And back to you.
JOHNS: Dana Bash there with Chairman Issa. Thanks so much for that.
Now we're going to throw back to Deb in Atlanta.
FEYERICK: Thanks so much, John.
We do want to go to the -- to the floor there. The senator from Tennessee, Bob Corker, ribbing the president and chastising him for what he just called his press conference. Let's take a listen for just a moment.
(BEGIN LIVE FEED) UNIDENTIFIED MALE: Senator Mikulski.
UNIDENTIFIED MALE: Without objection.
SEN. BARBARA MIKULSKI (D), MARYLAND: Mr. President --
UNIDENTIFIED MALE: The senator from Maryland.
MIKULSKI: Mr. President, I rise to speak in behalf of what's going on here today as the new chair of the -
(END LIVE FEED)
FEYERICK: OK. So, tax hikes, it looks like tax hikes instead of affecting 98 percent of all Americans will affect only the 5 percent of top earners. Does that mean everybody's free and clear? Not exactly. Because tomorrow, your paycheck will likely shrink. And that's with or without the fiscal cliff. And that's because the payroll tax cut expires at midnight. And right now, it does not look as if Congress plans to extend it.
The 4.2 percent you pay into Social Security will now go up to 6.2 percent of your salary. Lawmakers have been so consumed by the fiscal cliff that it appears little was done to extend the 2010 payroll tax cuts, put in place by President Obama two years ago in order to boost the economy.
So what does it mean to your wallet? Well, here's how much less you'll bring home if it expires. Paychecks shrink $50 a month for those earning $30,000 a year. It shrinks $83 a month for those earning $50,000 a year. And $167 a month for those earning $100,000 a year.
Now, let's switch to the fiscal cliff and what that is going to cost you. Without a deal, you'll be paying lots more in taxes. The potential impact? OK. So, say you're single and working hard. You don't have kids. You earn about $80,000 a year. Think about what you pay now. If that fiscal cliff -- if it does not go into effect, you're going to pay an additional $3,000. That's right, $3,000 more than what you already pay in taxes every year. If you're married with kids, well, then, if this deal is not approved, it gets worse because the middle class families will get hit harder. Let's say you've got two kids, both parents work. Together you earn $80,000 a year. Well, guess what, if there's no deal, although it seems close, you would owe almost $6,000 more in taxes next year.
So, with so much uncertainty and so many variables the question is, how was Wall Street reacting? The stock market dipped every day last week. The question is, what's next? Alison Kosik is there for us at the New York Stock Exchange.
And, Alison, business leaders fed up with the lack of progress. But now that they say a deal is in sight, which I guess is a good thing, how are investors reacting to Congress', well, ineffectiveness, let's say?
ALISON KOSIK, CNN CORRESPONDENT: Exactly. So, yes, this has definitely been a market day where it's reacting to all these headlines coming out. We saw the market go up a bit when news came out that the president was going to speak. And then as he walked out, you saw the market jump, talking about the Dow, up almost 100 points. But then he started talking a little more. And then you saw the numbers on the Dow fall back a little more because there's one little sentence that he had in there that kind of spooked investors. He said, we're going to do it in stages. We're going to do this in steps. Meaning a fiscal cliff deal.
So the question for the market at this point is, how much of a deal will come out of this? Will it be a partial going over the cliff or will it be, you know, will it be one of these band-aid measures that Wall Street really wasn't hoping for. Because with one of these sort of half deals or partial deals, what Wall Street winds up getting is more question marks. You know, not really some -- any solid rules of the road that continue getting this uncertainty about where taxes may be.
So, you know, we are seeing the Dow up right now, 47 points. But the Dow is off its highs of the session, simply because it doesn't look like it's going to be a full deal as far as investors feel. That they think it's going to be more of a band-aid measure.
FEYERICK: Yes, it's almost like a series of mood swings and the American public simply wants to know where they stand. That's pretty much the bottom line.
But let me ask, the farm bill, that's another big concern.
FEYERICK: Top congressional leaders say that they have reached a deal, but they've yet to vote on an extension. If Congress fails to act, well, an impact at the grocery store. People are going to be paying more for milk. And now that they're getting more taken out of their paychecks, that's going to hurt too, right?
KOSIK: Right. And what this is being called is the dairy cliff. You know, the agricultural secretary said over the weekend that if Congress fails to do something, consumers will have to face this big spike in what they pay for milk and other dairy products. So I'm talking about $7 or more for a gallon of milk. Your eyes pop out. Because what would happen here is the government's dairy subsidy, it expires in the new year. And if a new bill isn't passed or the most recent one isn't extended, the formula that's used for calculating what the government pays for those products defaults all the way back to a 1949 statute. And what that would wind up doing is forcing the government to buy milk at twice today's prices, which would then be passed on to consumers. Now, most experts, they don't think that's likely to happen, but clearly this vote really needs to happen soon. This is a big worry for consumers, Deb.
FEYERICK: Yes, I think people are holding on pretty tightly to their wallets these days. Alison Kosik, thanks so much. Joe, take it away.
JOHNS: Coming up next, you've heard how Vice President Joe Biden is becoming a major part of these negotiations behind closed doors. We're going to take a closer look at that.
Plus, Hillary Clinton's health scare. Dr. Sanjay Gupta tells us her prognosis and it depends on where the blood clot is. That's coming up.
JOHNS: Joe Johns here in Washington, D.C., where we are following the fiscal cliff negotiations. We just heard from the president of the United States here in Washington saying that a deal is within sight, but it's not done. He urged his supporters to keep the heat on Congress until it's done. He focused on, among other things, the fact that this deal would extend tax credits for families, extend the tuition tax credit and other things. Also expressed concerns about cuts to social spending, which have not yet been worked out. So we're following all of that and waiting to hear more about these outlines of a deal that have started to emerge.
Deb, back to you in Atlanta.
FEYERICK: Yes, Joe, he also said that he would prefer to have done a grand bargain, but he's willing to take, right now, what he can get. And, you know, late last night, when talks seemed to have broken down, Vice President Joe Biden swooped in to help get them restarted. Now, Biden took an urgent call from Mitch McConnell, the Senate Republican leader, and the two agreed to plow forward again today. Keep in mind that this is the same Joe Biden who brokered a deal to avert the debt ceiling crisis in July of 2011. And the deal that emerged then essentially paved the road to today's fiscal crisis.
Joining us now from New York, John Avlon, senior columnist for "Newsweek" and "The Daily Beast."
And, John, would it be accurate to say that Vice President Biden and whatever Senate Republicans he was talking to, that they're essentially scrambling to undo that emergency compromise that Biden helped engineer in 2011?
JOHN AVLON, SENIOR COLUMNIST, "NEWSWEEK" AND "THE DAILY BEAST": Well, look, I think the key point here is that it reminds us how much politics is people. It's people in a room. And the rapport between the people makes all the difference in the world. And the fact that Joe Biden, part of the wisdom in his selection and the logic behind it from Barack Obama's point was that here's a guy who's been in Washington for over 30 years and that reservoir of goodwill that he built, even with folks across the aisle like Mitch McConnell, over the two decades that they served together in the Senate, can really bear fruit at times like this. The negotiations between Harry Reid and Mitch McConnell hit an impasse. McConnell called Biden. They were apparently, apparently able to break that impasse by reasoning together. That is the way our democracy works at the end of the day, when it works, it's people being reasonable in a room together based on a reservoir of trust. And that's an asset Biden brings to the table.
FEYERICK: But, you know, John, when you talk about being reasonable, you know, you would think that Congress, it's a room full of lawmakers, that they know how to negotiate, that they know how to take baby steps to get somewhere to the center so that each side at least feels that they're getting a little bit of what they want. Can -- why did they have to call Biden in at the last minute? Why didn't they call him earlier? Why are we here today on the last day of December? Why couldn't this have been done weeks ago?
AVLON: Deb, we're here at the last day of December in the final hours because of a culture of division and dysfunction in Washington, D.C. And it didn't happen overnight. It's been created over a long time because the polarization of the two parties, the system of redistricting that has reduced the number of swing districts to one- third what they were 20 years ago, so the incentive structure that exists for the members of Congress, particularly in the House of Representatives, isn't to reach out across the aisle, to form new coalitions to solve problems.
They're always looking over their shoulder, worried they're going to get primaried in the next election. That makes it more difficult to make a deal. That culture of ideological absolutism, rather than reasoning together, is why we are here in a lame duck session in the final days of the year. It is frustrating. It should infuriate the American people who do better every day at their own job, finding ways to work with people with whom they have differences. But the important thing in these final hours is that we do get some kind of a deal.
It will be a political patch. The important point here is, this is not a grand bargain that's going to solve the issues of deficit and debt. This time bomb that Congress created was originally designed to deal with deficit and the debt. We're not going to get that right now, but we might -- we might get a plan to deal with taxes, to avoid the fiscal cliff. That's a win for the economy and the American people.
JOHNS: John, hey, it's Joe Johns in Washington, D.C.
AVLON: Hey, Joe.
JOHNS: We've heard so much about tax increases and how they're going to handle those and not so much about the spending cuts.
JOHNS: And my question to you is, at the end of the day, are we going to end up essentially with some type of a plan that could add to the federal deficit instead of reduce it?
AVLON: You noticed that, huh? That sequester hasn't really been the topic of much conversation.
AVLON: Look, that is still unclear right now. Obviously, again, you know, the point of all this, the reason that over 500 days ago we set the fiscal cliff with regard to the spending cuts and we knew the Bush tax cuts were expiring 12 years ago on this date, that was allegedly sort of an impetus to create a grand bargain to deal with the long term problems of deficit and debt. That hope for a grand bargain evaporated when you kicked the can to the last hours of the year.
What seems to be coming together now is largely, as you said, a planned focused on taxes. Not just the tough tax rates, but the estate tax, the AMT. Something that actually is semi comprehensive. But as the president said in his press conference just a short while ago, the longer issue to deal with deficits and debt, which is going to require entitlement reform, tax reform, that can is being kicked. It's being kicked probably to February, when the debt ceiling is set to sink in again. So, unfortunately, while we can all be relieved that it appears there are the seeds of a deal on taxes, that it will avoid the fiscal cliff, in terms of the larger problem of deficit and debt, we still have that debt ceiling out in mid February, late February and that's when there's going to be a -- try to be an attempt to create a grand bargain again to really deal with these more difficult problems that are essential to the long term stability of the economy.
JOHNS: John Avlon, thanks so much for that. Always good to hear from you.
We want to go to the Senate floor right now where we're getting the first reactions, apparently, to the president's remarks. That's Senator John McCain there. Let's listen to him.
(BEGIN LIVE FEED)
SEN. JOHN MCCAIN (R), ARIZONA: Sitting around the table and do the negotiations and the discussions and they are sometimes concessions have to be made, compromises have to be made.
So what did the president of the United States just do? Well, he kind of made fun, he made a couple of jokes, laughed about how people are going to be here for New Year's, sent a message of confrontation to the Republicans. I believe he said, if they think they're going to do that, then they've got another thought coming.
I guess I have to wonder, and I think the American people have to wonder, whether the president really wants this issue resolved or is it to his short term political benefit for us to go over the cliff? I can assure the president of the United States, I can assure him that historians judge presidents by their achievements.
Now, we all read the polls. We all, Republicans, know what is in the polls. And that is the majority of the American people, 50 some percent, support the -- approve of the president of the United States. We also see the approval ratings of Congress. Ten, 11, 12, nine, 15 percent, whatever it is. I haven't seen one that high lately. But historians judge presidents by what happens on their watch. And for the president to go out and make comments, which clearly, which clearly will antagonize members of the House, we are a bicameral government here, and clearly antagonize them, because once we get an agreement, and I appreciate the negotiations that have been going on here in the Senate between the majority leader and Republican leader, the fact is that whatever is done and whatever is agreed to has to be ratified by the House of Representatives. Men and women who were elected on the premise, promising their constituents that they wouldn't raise taxes.
Now, whether they should have made that commitment or not, whether that was the right thing to do, the fact is that that's what they said. So the president basically, in his talk to whoever it is, that group of people that he was talking to who were laughing and cheering and applauding, as we are on the brink of this collapse, of this incredible problem -
(END LIVE FEED)
JOHNS: Senator John McCain of Arizona there. Of course, the former standard bearer for the Republican Party and the election before last, reacting to the president's comments today, indicating that, in his view, the president may have actually clearly antagonized members of the House of Representatives. That, of course, is the place where they'll have to vote on any deal after the Senate gets a first crack on it. So that's Senator John McCain questioning whether the president should have said what he said.
FEYERICK: Yes, certainly the Republicans sounding a lot less optimistic than the president there, who was certainly speaking to a captive audience.
All right. Well, first, a stomach virus. Then a concussion. Now Secretary of State Hillary Clinton is hospitalized with a blood clot. Our Dr. Sanjay Gupta tells us how it's being treated.
FEYERICK: Secretary of State Hillary Clinton is being treated at New York Presbyterian Hospital for a blood clot. The clot was discovered during a follow-up exam for the concussion she suffered last month. There are a few details, but the State Department has said Mrs. Clinton would stay in the hospital for at least 48 hours. Chief medical correspondent, Dr. Sanjay Gupta, has more on the likely causes of her medical setback.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, first off, Deb, we don't know exactly where this blood clot is. They say it's somewhere in her body and related to the concussion. But there's a key point here. And that is that they've decided to treat this with blood thinners, or anti-coagulants. That's important because if this were a blood clot actually sitting on top of the brain, because of a -- because of the brain injury, the concussion, blood thinners would be, in fact, the last thing you'd probably want to do. It could worsen the bleeding and it would also prevent her from having a operation if it's necessary. Again, no one is saying that that's the case here.
But blood clots that are treated with blood thinners, or anti- coagulants, are typically ones that are found in the blood vessels, the veins specifically. You may have heard of a deep vein thrombosis. That's a blood clot that can form in the leg. That can be concerning because it can break off and possibly go to the lung, known as a pulmonary embolism. So that's one of the things they want to prevent using these blood thinners.
We know she's going to be in the hospital for two days, Deb. We know that she's probably going -- she's getting these blood thinning medications. They're going to make sure she's well hydrated. Then they'll make sure she's up, walking around. This is a common thing. And for the secretary of state, it's actually even more so because she's had this before back in 1998.
So we'll keep an eye on things, Deb. If more things to come us, we'll certainly bring them to you.
FEYERICK: All right. Thanks so much, Sanjay.
JOHNS: More on our special coverage of the fast moving negotiations over the fiscal cliff. Up next, hear why one high profile Democrat says going over the cliff would be good for the stock market and your 401(k). Check this out.