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Senate Passes Fiscal Cliff Deal; Hillary Clinton's Blood Clot; Senate Passes Fiscal Cliff Deal; Interview with Congressman Lloyd Doggett of Texas; Interview with Former FDIC Chair Sheila Bair; Fighting Cancer and Winning

Aired January 1, 2013 - 08:00   ET


JOHN BERMAN, CNN ANCHOR: Our STARTING POINT, a new year and a new agreement on the fiscal cliff.


UNIDENTIFIED MALE: The bill as amended is passed.


BERMAN: Just hours ago the Senate reaches a deal to avoid major tax hikes and spending cuts after some serious back and forth on Capitol Hill.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I'm interested in getting a result here.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I'm disappointed that we weren't able to make the grand bargain as we tried to do for so long, but we tried.

UNIDENTIFIED MALE: No deal is better than a bad deal and this looks like a very bad deal.


BERMAN: And with the deal now headed to the House floor for a vote, will it survive? This morning, what's in this agreement and what it means for you and your taxes.

Happy New Year, I'm John Berman. Soledad O'Brien is off today.

CHRISTINE ROMANS, CNN ANCHOR: And good morning. I'm Christine Romans.


It is Tuesday, January 1st, a special fiscal cliff edition of STARTING POINT begins right now.

ANNOUNCER: This is CNN breaking news.

BERMAN: And our starting point in the special fiscal cliff edition of STARTING POINT is breaking news, a fiscal cliff deal struck in the Senate overnight. Now our paycheck and the U.S. economy are in the hands of the House of Representatives.

This is the latest: a bill crafted by Vice President Joe Biden and Minority Leader Mitch McConnell passed the Senate overwhelmingly by an 89-8 margin just after 2:00 in the morning.

The Republican-controlled House has agreed to consider it later this morning, but it really is anyone's guess how that will go. If the House votes yes, the measure would generate about $600 billion in new revenues over the next 10 years. That is a big if -- if you listen to what Republican Congressman Phil Gingrey said this morning on CNN's "EARLY START."


REP. PHIL GINGREY (R), GEORGIA: At one point, this business of living to fight another day, you have to dig in your heels and say, by golly, I'm going to die over this today because it's important to the people of my district and this country.


BERMAN: So, there is a question of: are there enough votes in the House to pass this? It will take a combination of Democratic and Republican votes.

But if the Senate measure does get through the House, here is what the plan means: Bush era tax cuts would stay in place for individuals earning less than $400,000 a year and couples less than earning $45,000. They would go up if you make more than that.

Unemployment benefits for 2 million Americans would be extended for a year, and the alternative minute tax would be permanently adjusted for inflation.

But when it comes to spending cuts, lawmakers deferred for two more months, kicking the can down the road as they say, so we can expect more finger-pointing, more fighting in 2013.

Happy new year, everyone.

White House correspondent Brianna Keilar joins us live from Washington. She'll be watching over the next few months. But more importantly, watching what is happening today in Washington because this is not over yet -- Brianna.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: No, and happy New Year to you, John, as well.

It looks like it's going to go one or two directions, it starts with House Speaker John Boehner meeting with his Republican members and seeing what they think about this deal that was struck in the Senate. If there is enough support among Republicans and there may be some more than even say we would have seen for the cutoff being $1 million that failed because now, the tax hikes have gone into effect and they're just voting for tax cuts.

If there is enough support, he could take up the Senate measure put it on the floor and pass it, we would expect with Democratic and Republican support, or House Republicans may say this isn't enough to our liking, we want to change some things and they could propose to amend some things and succeed to do so and send it back over to the Senate, John.

BERMAN: If it is amended, then it gets messy, Brianna, correct?

KEILAR: Then it just takes more time and it would depend exactly what was changed. If something is fundamentally changed, then it could obviously put at risk the agreement in the Senate. If it's just a little tweak or something to make House Republicans feel like they got a little bit better of a deal, then it might be something that the Senate could swallow. That would really depend, and this is kind of I think what we're going to be seeing today.

Where are House Republicans or where are the majority of House Republicans, or a big chunk of House Republicans? Are they OK with this? What kind of changes might they want? And we'll see the path forward I think today.

BERMAN: Brianna Keilar in Washington, we'll be watching that as Speaker Boehner begins to talk to his Republican caucus before noon today and, of course, stay with CNN all day. We'll keep you up to date on the latest negotiations and deal-making. Thanks, Brianna.

VELSHI: Let's go back -- let's go to Capitol right now. Let's go to Capitol Hill. Jonathan Allen is there. He's a senior congressional correspondent for "Politico".

Jonathan, it doesn't need all Republicans or all Democrats to get the deal done. It requires John Boehner to actually take this vote to the floor. He's going to get some pressure from the conservative side of his caucus not to do that.

Any chance that this doesn't come to a vote? That the House scuttles this without even talking about it?

JONATHAN ALLEN, SR. CONGRESSIONAL CORRESPONDENT, POLITICO: The message that Speaker Boehner has put out is that it will come to a vote, whether it's that bill the Senate passed or perhaps some slightly amended version that could be sent back to the Senate. He is not giving the option of doing nothing to his conference.

So you've heard from Phil Gingrey of Georgia this morning on CNN, Tim Huelskamp of Kansas as well this morning on CNN. There are some guys who don't like this deal, who will vote against it. But I think the odds of them standing in the way of an ultimate deal are very small right now.

VELSHI: But we talked about this an hour ago -- the idea of not voting for it versus actively campaigning against it. In other words, some of these guys might not vote for it so they can say to their constituents I didn't support this. But that's not going to be the same as getting a whole movement against it.

ALLEN: I think that's exactly right. You will not, I don't think, see very many people trying to whip against this. I think if they tried to, they would be unsuccessful and in terms of folks who go back and talk to their constituents about having voted no, we have two interesting examples last night in the Senate, Marco Rubio of Florida and Rand Paul of Kentucky, two people who are talked about as potential presidential candidates among the eight who voted no. Two of the others who voted no, the Iowa Senators Harkin and Grassley from that first in the nation caucus state.

So --

VELSHI: Interesting.

ALLEN: At least Marco Rubio and Rand Paul looking at what those guys are doing.

VELSHI: And, of course, in the House, you're going to see Paul Ryan voting against this.

ALLEN: Well, I haven't talked to Congressman Ryan and I'm not necessarily sure how he's going to vote. I haven't seen anything from him on this.

I wouldn't be surprised either way he voted on it. There's political advantage in voting no but he's also been somebody who has been looked at as a leader in the House of Representatives, a guy who will take tough votes when he needs to.

But, you know, one thing that's happened in the last 24 hours, is everyone's gotten a day older and we are looking at being $4 trillion deeper in debt --

VELSHI: Right.

ALLEN: -- as a result of this deal, it's not really a deficit reduction package.

VELSHI: Yes, it is not at all. Jonathan, thank you for that. You bring up a good point this may become the albatross around people's neck who decide to run for the presidency. So there are people who are not thinking about it as today's deal but about the deal for their political future.

Jonathan Allen at the "Politico", at the Capitol -- Christine.

ALLEN: My pleasure. Happy New Year.

ROMANS: It's a really good point when you're talking about deficit reduction and debt reduction, we're not there yet. It's all about slowing the growth of the national debt if you can, or adding to the national debt more slowly.

BERMAN: There's two other things. It may not be debt reduction but it may be deficit reduction. ROMANS: Right, right. You had one before you can get the other, you know?

VELSHI: Right.

ROMANS: So, here we go.

All right. Let's break down what's in this deal. We've been telling you about the dairy cliff. Well, addition to dealing with the fiscal crisis, the Senate deal would extend federal farm policies through September. That means milk prices will not double.

The deal also nixed a set pay raise for members of Congress.

The White House scored an agreement to raise the tax rates on larger estates from 34 percent to 40 percent. But Republicans said it should be adjusted annually for inflation, a provision that would increase the exemption, the estate exemption to $7.5 million for individuals, $15 million for couples by the year 2020.

VELSHI: All right. We're going to stay right there on the Hill where later today, we expect the House to take up the Senate bill or some kind of bill.

Lloyd Doggett is a Democrat congressman from Texas. He's a member of the Budget Committee. He's been arguing to end the Bush era tax cuts for the wealthy.

Congressman, good morning and happy New Year to you.


VELSHI: And I take that means you're likely a yes vote.

DOGGETT: Well, I'd like to be but like to see the fine print in this agreement that I doubt very many members of the Senate were able to study carefully at 2:00 in the morning and to evaluate the tradeoffs that were made here. Clearly, there are some good features of it. I'm pleased they reached a last-minute agreement but that agreement presented on midnight eve instead of turning to a pumpkin at midnight became landmark legislation, and we need to evaluate it very closely.

VELSHI: What's your sense of -- so you want to evaluate it and we've talked to a lot of congressmen this morning, some of whom have said they're likely no's, they're likely yeses. But all of them has said, I want to see it to make that determination.

What is your guess as to how this is going to go in t end? If it is put to a vote, it will likely pass?

DOGGETT: I think it will pass in some form. There's still a question as to whether amendments are offered here. And, of course, as you've also noted big question here that having circumvented the dangers of the cliff here at New Year's, that we soon face the Valentine Day cliff and perhaps the April Fool's day cliff because of all the things that are not in this agreement.

BERMAN: So, heading into those cliffs, which I will not name again, although you named them quite aptly, where does your party stand? Where does the White House stand in its ability to negotiate heading into the debt ceiling discussion? There are critics who say the president has shown that he is willing to budge -- to come off his sticking points when push comes to shove.

So, is he likely to cave when it comes to the debt ceiling?

DOGGETT: Well, I think the president has tried to provide leadership for the entire country and I applaud that. I think that Republicans have taken away a message in the past. I voted against the late night agreement that was reached in 2010 as being very unbalanced.

Republicans took away from that experience that if they are hard enough, difficult enough, extreme enough and just keep pushing, that eventually they'll get major concessions from the president. They certainly did not get as many concessions this time as they did in 2010. The president has said no negotiations over the debt ceiling, but he also said that $250,000 was the level at which we would see a return to the Clinton level tax levels.

I believe that $450,000 is hardly middle income in America. It may be the median income of Republican campaign contributors but it's certainly not the medium income of a family in central Texas.

BERMAN: No, it definitely isn't --

DOGGETT: Now, that's enshrined permanently in the law and that's a very troubling feature.

VELSHI: It is a very troubling feature that we defined the middle class starting at $450,000, $400,000 a year. That's another battle for another day.

Is the president -- I mean, is it wise for the president to come out and say no negotiations on the debt ceiling? That's a real problem. This was a real problem as well, but the debt ceiling could shut American government down.

DOGGETT: Well, we have to stand behind the full faith and credit of the United States. Also, the related question of how we handle the across-the-board spending cuts or sequestration, it is encouraging in that regard that there was a precedent set and insistence that was not all coming out of health care research and educational opportunity, that half of it was revenued for this postponement. But that looms very largely as we go forward.

VELSHI: Congressman, thank you very much for joining us.

DOGGETT: Thank you.

VELSHI: We appreciate your insight into this, and we wish you the best of the New Year.

ROMANS: The median income is $55,000 a year, you know?


ROMANS: When we talk about setting the new label of rich is $450,000 and above.

BERMAN: As we are talking to members all morning, we've talked to a number of them, which seems to be shaking down is this -- Democrats are likely to vote for this measure in near unanimity. Lloyd Doggett right there is a fairly liberal member of Congress from Texas who voted against the debt deal two years ago. So if he voted against that and is willing to vote for this, you're getting almost all the Democrats.

So this really does become an issue of how many votes the Republicans will deliver and that is something to be watching very closely.

VELSHI: They don't need a lot.

BERMAN: But if they don't get close to a majority, it puts Speaker Boehner in a really, really tough behind.

VELSHI: Though it does change the dynamic when you put it forth as everybody vote up or down based on your conscience. In other words, it doesn't speak so much to his leadership and his ability to whip, if you go out there and say this is the equivalent of a free vote. This is a do what you got to do for your constituents.

BERMAN: But again, another reason to stay with us all morning, to see how this does shake down.

Meanwhile, while the fiscal cliff was being haggled in Washington, Americans celebrated the arrival of the New Year. Some people managed to celebrate despite the fiscal cliff talks. An estimated 1 million people from around the world jammed into Times Square here in New York City to ring in 2013 in traditional fashion.

Three hours later, on the other side of the country, 2013 arrived in Seattle, and a spectacular fireworks display illuminated the sky with the Space Needle at the center of it all.

Now, back here in New York, after all the revelers have left, an army of sanitation workers moved in to begin the monumental task of cleaning it up. They do it so fast, you know, you even wouldn't know that anything happened around here at this point.

Meanwhile, it is 2013 and same-sex couples in Maryland really have something to celebrate. Same sex marriage is now legal in that state. Seven couples took advantage of the new law, getting hitched just after midnight at city hall in Baltimore with the mayor officiating.

Ahead on STARTING POINT, Secretary of State Hillary Clinton, she is still in the hospital this morning being treated for a blood clot. We'll have details straight ahead.

VELSHI: And whether this gets new fiscal cliff deal gets approved or rejected by the House of Representatives, it's going to have an impact on the global economy. We'll look at what to expect, just ahead.

ROMANS: So how about we leave now with a look at how Berlin rang in --

VELSHI: I was just thinking that.

ROMANS: I was up all night wondering how Berlin was going to ring in the New Year. And now, you get to see there. We'll be back in just a minute.

BERMAN: It's beautiful.


ROMANS: Well, it sounds a lot scarier than it is thankfully. Secretary of State Hillary Clinton is being treated in a New York hospital for a blood clot in her head. Her doctors say they're confident she will make a full recovery.

CNN's Jill Dougherty is live at the State Department.

Jill, how serious is this?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You know, potentially, Christine, it's serious because after all it is in her head but as doctors explain, it's not in her brain, and that's the most important thing.

This is a blood clot that's located in kind of an area that is between the brain and the skull. It's a vein, and between those two areas, but it's not as I said in -- inside the brain and that is one of the reasons that they say she didn't have any neurological problems, she didn't have a stroke. Things that really could be serious.

That said, she is in the hospital, she's getting the treatment, which is essentially giving her blood thinners and what they're trying to do is shrink the blood clot and then when they figure out how much medication she should have, then potentially she can be released from the hospital.

So it's quite a bout for her. Don't forget, you know, this started way back in December, I remember being on the trip, you know, to Europe with her, coming back and the next trip was canceled and that's when all of this began, getting the flu, hitting her head, having the concussion and now this.

ROMANS: She has certainly been an Energizer Bunny over the past couple of years. I mean, look, she has been around the world logging millions of miles. It's rare to see her -- it's rare to see her laid up like this.

DOUGHERTY: It is. You know, I was thinking that sitting here in the quiet State Department today on a holiday and thinking, you know, this was a woman who was really made of iron and she is very strong. I mean this is extraordinary, the flu set in motion a lot of stuff. That said, it is the end of her term in office, and we all know Secretary Clinton has said she wants to retire and we just have a few more weeks but they're all questions, remember she was going to testify on Benghazi. We'll have to see how that goes and then also her travel was on hold.

ROMANS: All right. Jill Dougherty, thank you so much. Happy new year, Jill.

DOUGHERTY: Yes. Same to you.

VELSHI: All right. Ahead on STARTING POINT the whole world is watching what Congress does with this new fiscal cliff deal, what it could do to global markets next, with Richard Quest.


ROMANS: "Minding Your Business" this morning. Markets are closed today, waiting to see how the fiscal cliff could affect your 401(k) in the early part of the new year.

Of course, U.S. markets all finished 2012 on a high note. The Dow gained more than a percent yesterday to finish the year above the 13000 mark.

And Ali, as you know, it was a good year for the stock market.

VELSHI: It was a better year until the fiscal cliff messed it up, though. The -- the S&P 500 which looks like people's 401(k)s was up 15 percent, ends up, what, 12.5?

ROMANS: One of the 10 best years -- one of the 10 best years ever.

VELSHI: I would say 12. Well, I know. It's not bad. It's not bad. I mean, despite Europe and despite the fiscal cliff, markets did OK. And actually markets around the world are closed for New Year's Day, which is why Congress actually has itself today to get this thing done, otherwise you'd see some reaction.

ROMANS: You can only be over the cliff when markets are closed and have a little bit of breathing space.

VELSHI: That is correct, that is exactly right. But global investors will react. Markets around the world will open around eight -- about 12 hours from now actually.

Let's check in with CNN's Richard Quest who joins from us London.

Poor guy, Richard, you have had to deal with all of the stuff in Europe for the last two years and then this. So you have some remarkable experience at how the world's investors who tend to be enforcers of politics sometimes will respond to this deal and I know you've been studying the deal all morning.

RICHARD QUEST, HOST, CNN'S QUEST MEANS BUSINESS: I have, well as much as anybody can on the first day of a new year. And if you look at what Europe has been through in 2012, the European stability mechanism, the banking union debacle, the third bailout for Greece, constantly with the fiscal comeback, you see similarities between what happened in Europe and what now the United States has just been through and is going to go through in 2013.

Now obviously the facts are different, but the substance remains the same and it is basically this, pushing as far and as hard as you can without actually tipping over the edge, until the markets eventually say oh, enough. You've got to do a deal.

And, Ali and Christine, one of the things that is quite clear is that in 2013, yes, the fiscal cliff deal has been done but these other problems of appropriations of debt ceiling, they are the ones that are going to come back to bite again and again, and that's very similar to the sort of problems and issues they've seen in Europe.

VELSHI: More difficult problems. By the way, John Berman is now completely out of sorts that you didn't refer to him. So he'd like to get in on the conversation.


BERMAN: I was going to say, it is not the full deal and it's not the grand bargain that President Obama and Speaker Boehner were talking about two months ago.

But, Richard, from your perspective in Europe, you've seen a lot of problems here over there. You know, growth is not what it is in the U.S. Isn't the U.S. doing some things right, right now?

QUEST: Yes, it didn't go for the grinding austerity that everybody else did, because it didn't need to. It has large, liquid, deep financial markets, and so yes, it is doing a lot right, but that 2 percent, 2.5 percent growth that you're talking about, John, is very wafer thin. It wouldn't take much for investor confidence to evaporate and it wouldn't take much for that growth to -- I wouldn't say go negative but at least to go stagnant and that's the big fear in all of this.

It's not are things going well now, it's what can the U.S. economy trip over in the first three months, say, for example, of 2013?

I have a question for you, by the way. John, you might like to join in on this, with the S&P and I'm trying to go backwards here fast.

Which do you think was the best performing market globally, percentage wise in 2012?

ROMANS: I know.

VELSHI: OK, wait --

ROMANS: Greece, Greece, Greece, was it Greece?

VELSHI: OK. Hold on. Now hold on. Everybody gets a guess. You say Greece.


BERMAN: What do I say? Stop & Shop. Which market? (LAUGHTER)

VELSHI: Stock market. Country.

BERMAN: Stock market.


BERMAN: I'm going to go with Greece.

VELSHI: You both go with Greece. I am going to go -- I'm going to pull a Richard Quest here. I'm going to go with Nigeria.

QUEST: Ali, you're in the right lines but the wrong part of the world, Venezuela's general index rose some 300 percent.



BERMAN: Totally my second choice, Richard.

QUEST: There was a currency risk, it was a political problem but eh, who's worried about that.

ROMANS: Greece is up 33 percent.

VELSHI: There you go.

Quest, good to see you, my friend as always. I'll see you through the course of the day. We'll be talking more with Richard Quest, host of CNN International's "QUEST MEANS BUSINESS," whenever you're traveling Quest is must-see TV right after "WORLD BUSINESS TODAY" which is the show that I do on CNN International.

Quest, have a good and busy day.

You know, one thing we're going to ask our next guest is this whole business when Quest and I an hour ago said the reason the U.S. will never be Greece is because Greece can't print its own money, bonds, in other words, we can, and I said the U.S. will always be able to print enough money and you know I've awakened the beasts, I mean, Twitter has just gone nuts with people who say I'm going to devalue the U.S. currency.

I'm not saying we should but I'm saying there is a reason we will never get into a pickle that Greece is in.

BERMAN: And that is a great segue to our next guest, because ahead on STARTING POINT, she is the former head of the FDIC. Does Sheila Bair thinks this fiscal cliff deal is the right solution or are we just playing another game of Washington kick the can?

And these guys really, really wanted to get into this safe. They used a blowtorch and it's all on camera. That is just ahead, stay with us. You're watching STARTING POINT.


BERMAN: And it is all up to the House of Representatives now to bring us back from the bottom of the fiscal cliff this morning. Technically, we are over the cliff this morning. Still early this morning the Senate passed a deal crafted by Vice President Biden and the Senate Minority Leader Mitch McConnell. The vote overwhelming 89-8, but because the Republican controlled House left well before midnight, the House has to take up the measure later this morning. This is how Senate leaders from both parties summed up their early morning accomplishments.


REID: I've said all along that our most important priority was protecting middle class families. This legislation does this.

MCCONNELL: This shouldn't be the model of how we do things around here. But I think we can say we've done some good for the country.


BERMAN: Here is how the Senate plan will work if it passes the House. Bush era tax cuts extended for individuals earning less than $400,000 and couples earning less than $450,000. If you make more than that your taxes are going up. Unemployment benefits extended for a year for 2 million Americans, and a permanent adjustment for inflation to the alternative minimum tax.

If you're wondering about spending cuts, keep wondering. Lawmakers deferred and they will fight that fight over the next two months.

Despite the progress overnight in the Senate, the House must still follow suit, and based on this comment earlier this morning from Tim Huelskamp of Kansas, it's no slam dunk.


REP. TIM HUELSKAMP (R), KANSAS: I'm a no vote, but until we actually see the details, I'll say most folks might presume a member of Congress has those details. We haven't seen anything. This deal will increase spending, and it does nothing for our fundamental overspending problem and our lack of entitlement reform. And three strikes looks like what is in the Bill for my view, and I don't know if it will pass the House. We'll find out obviously later today.


ROMANS: What if the deal runs into trouble? That's possible. Many house Republicans have long opposed any tax increase, many even signed that no tax pledge. Lawmakers likely have a grace period of maybe a couple of weeks to pass a bill to avoid the bulk of the scheduled tax increases and spending cuts without causing too much damage.

But it might be up to the markets, quite frankly. The markets are closed today, the House has breathing space today to do something. How long they drag this out, what kind of signal that sends the stock market.

VELSHI: And the international market gives up a clue, and they'll open in about 12 hours from now. By the way, I was so consumed by the deal yesterday I didn't recalculate yesterday was a strong day on the U.S. markets. The S&P gained 1.7 percent yesterday to end the year at 13.4 percent. That's a good gain.

BERMAN: Don't stiff the S&P.

VELSHI: A lot of your 401(k)s will look like that if you're in the S&P 500.

Our next guest is an expert about the affect this deal will have on the country's economy and financial system. She predicted a kick-the- can solution just two days ago. Sheila Bair is the former chair of the Federal Deposit Insurance Corporation and she is currently chair of the Systemic Risk Council. She is the author of "Bull by the Horns," an excellent read.

Sheila, good to see you. Thank you for being with us.

SHEILA BAIR, FORMER CHAIR, FDIC: Thanks for having me.

VELSHI: We're having a lot of activity on the conversation that we're having why not dealing with the U.S. debt and deficit situation, which is a serious issue, still doesn't get us into a place like Greece. The U.S. has certain flexibility in its financial and fiscal systems that other countries don't have.

BAIR: Right. Well that's true. We can print our own money so yes if we continue this profligate spending without sufficient money to pay for it, other countries can buy our debt. Third world countries try that and it usually doesn't end well but another potential glitch is Congress has to keep raising the debt limit to allow that kind of mechanism to continue so even though we can print our own currency, which reduces the risk of a credit default, if Congress refuses to raise the debt limit, that could force default and create some substantial problems for us.

BERMAN: Your book is called "Bull by the Horns," and do you think this is our government taking the bull by the horns this deal?

BAIR: No. I wish I could say it really is kicking the can down the road again. They did make some decisions, permanent inflation indexing of the AMT, which is good. That's been going on for a long time. We've got permanent extension of the lower rates for less than $450,000, $400,000 for individuals. They made some decisions that will cost a lot of money over what would have occurred if we let all of the tax cuts expire. So some decisions were made, but nothing in the way of deficit reduction.

And this is going to be the big question in the House. They pretty consistency said they wanted something on the spending side and they're not really getting it. In a couple of months they'll have another bite at the apple as the debt limit comes to a head and the delay of sequestration also comes to a head.

ROMANS: It's a big assumption that this is a turning point, a beginning of a new era in Washington, how do you think they should do entitlement reform and big pay-down and debt and deficit reduction.

BAIR: There is so much broken in this country. The tax system is broken, the entitlement system is broken, and we haven't even gotten to immigration reform, infrastructure. So there are just so many problems that need to be addressed, and we need a functioning government to deal with them. And it takes so long just to get really small deals like this done. It's quite dispiriting.

And I think we need to find a governing coalition in the country. And I think the president with all due respect needs to reach out to Republicans instead of bashing them or heckling them. I go back to the 1980s when I worked with Bob Dole and Ronald Reagan was president. We had a Democrat House with Speaker O'Neill. And there was a governing center because there were a lot of Reagan Democrats who switched over and Tip O'Neill knew that and that's why he worked with President Reagan. This partisanship on both sides really needs to stop. We need to govern from the middle not from the hard liners on either side, but from the middle, and the president needs to reach out to those people and work with them, and that's not happening.

BERMAN: You're referring to the news conference the president gave yesterday afternoon. It raised a lot of eyebrows we talked about a lot over the day yesterday.

BAIR: It did.

BERMAN: It is New Year's, try to be glass half full. This was not a giant deal, it was puny as Ali Velshi has been calling it all morning. But on the plus side all of the measures taken and voted on, they're not counterproductive. They're the steps along the way big picture people like you wanted to see. They need to keep going further.

BAIR: It is. And we may see a series of incremental steps to get us to the point we need to be. But I'm not optimistic based on past experience. We do keep kicking the can down the road and every time we do that the deficits and the debt gets bigger. So I think that the longer this goes on, the harder it is to fix.

So let's take the optimistic view maybe this is the beginning of a governing coalition. I think Vice President Biden's involvement was extremely helpful. If they had done plan b, the chained CPI, if the Republicans supported their speaker the GOP would be in a better position now and have something on the spending side. They didn't. Hopefully some lessons have been learned and we have the beginnings of a governing coalition that we so desperately need.

VELSHI: We'll see that play out today, particularly John Boehner's leadership will be in very tight focus.

BAIR: It will be.

VELSHI: Sheila, thank you for being here. BAIR: Thanks for having me.

BERMAN: Sheila brought up a name we really haven't talked about enough today, which is Vice President Joe Biden, who appeared to be instrumental in this deal. And the smile on his face as he was walking around Capitol Hill, he's like I am in the middle of this. I'm in both feet, a happy man.

VELSHI: Because last week the sniping between Harry Reid and Mitch McConnell was pretty dramatic and at many points downright unhelpful. And to somehow see Joe Biden go in there and -- I don't know what he did. Look at that smile. I don't want fairy dust he's sprinkled all over the place, but it helped.

ROMANS: Every minute he's spent in the Senate he used yesterday.

VELSHI: He used all that.

BERMAN: It's truly an interesting thing up on Capitol Hill.

Some other stories we're watching right now, a New Year's Eve celebration turning deadly in Sacramento, California. Police say a fight at a sports bar spilled out onto the street where thousands were gathered for a fireworks show. Two people were killed and at least three other wounded in the gunfire.

The civil rights activists known as the Wilmington Ten have been pardoned by North Carolina's outgoing governor. Nine African-American men and one woman were convicted of firebombing a grocery store in 1972. Their sentences were commuted in 1978. Their convictions were overturned two years later, but now finally a pardon. Governor Bev Perdue saying their convictions were tainted by what she called "naked racism."

Police in Ft. Lauderdale, Florida, are on the hunt for thieves who went to great lengths to rob a jewelry store. The men dressed themselves head to two in white suits and covered their faces. They were armed with blow torches and they used them to cut their way into three safes. No word on how much jewelry they managed to steal.

For a sixth straight year CNN welcomed in New Year's Eve with Anderson Cooper and Kathy Griffin, and here are some of the highlights from last night.


KATHY GRIFFIN, COMEDIAN: Rihanna will be here.

ANDERSON COOPER, CNN ANCHOR: Someone on Twitter said there was going to be a drinking game every time I giggle nervously.


GRIFFIN: Kelvin Harris.

COOPER: Who is Kelvin Harris? GRIFFIN: OK, grandpa, let me take this part.

Name Mitt Romney's sons.

COOPER: Schlep, Tagg, Ben, Matt, Craig.

Do we have the election night? A photo Kathy sent me on election night and told me to show it to David Gergen in the midst of our election coverage.

GRIFFIN: I love Gary Tuchman.

COOPER: He's an amazing reporter.

GRIFFIN: Obviously you are angry with him to send him groundhog day style to --

Ryan, Ryan, screw you! We do a better broadcast because we improvise and we're real!

COOPER: I was doing a live shot with Paula Zahn in Sri Lanka and a dog humped my leg.

Nice to see you. I almost wore this, Psy.

GRIFFIN: This is not awkward at all. This is great.

COOPER: Who was that?

That was M.C. Hammer.

COOPER: No, really?

GRIFFIN: Babe, I got you babe. I got you, babe.

I started sexting George Stephanopolous.

COOPER: I'm not the only one you section? This person says can Anderson get in a word once in a while?

GRIFFIN: You're like Ike Turner.

COOPER: Elizabeth was great.

GRIFFIN: You hardly talk to me anymore, who do you come through the door at the end of the day.

COOPER: Let's check in with Gary Tuchman, please, and we wish you a very happy new year of much success and peace and happiness and love.


ROMANS: That was funny.

Ahead on STARTING POINT, we'll learn more about Secretary Clinton's health scare and her blood clot, what we know about her treatment and prognosis next with Dr. Sanjay Gupta.

And we leave you with Vegas, Las Vegas fireworks as Sin City rings in the New Year. Cool stuff. You're watching STARTING POINT.


BERMAN: All right welcome back to STARTING POINT, everyone.

We are getting more information this morning from Hillary Clinton's doctors concerning the blood clot that landed the Secretary of State in the hospital. It is located in her head between her brain and her skull.

We want to bring in our chief medical correspondent, Dr. Sanjay Gupta; Sanjay, first of all, happy New Year.


BERMAN: And we're very lucky that you apparently had a head with a brain that you carry around in your bag at all times.

GUPTA: I try not to leave home without my brain John.


BERMAN: Tell us about this blood clot, where is it and what it means?

GUPTA: Yes well so -- yes I want to show you on the model here. Because I think it's instructive. First of all we know it's on the right side her head but for the purposes of this we'll show you the left side. This is -- this is you know obviously if you take out the brain there is a particular blood vessel you can see a little bit more clearly here that's in blue right across here. Those are some of the big draining veins -- it takes blood away from the brain.

In her case it's one that in this area back here it's called the transverse sinus, or it's a, you know, a big vein here and that's where that clot is, they say it's related to her concussion, they say it was brought on by that, the doctors say that, but that particular clot is what they're trying to address now with these blood thinning medications.

Let me even make it more simple. You had blood goes to the brain and blood also has to leave the brain. If that blood does not leave the brain, then the brain will start to swell. And it just doesn't -- you know there's no place for the blood to go and that's why it's so important to make those clots go away.

BERMAN: In the exact location inside the vein also crucial because yesterday you were hearing all sorts of debate if it's in the head you can't use blood thinner. You can't use blood thinner explain this.

GUPTA: Yes so you know when they talk about clots one of the questions you really want to know is, is the clot actually on top of the brain, outside the blood vessel but on top of the brain pushing on the brain. And if that's the case if you get blood thinners you just going to make the bleeding worse, cause more pressure and you're also going to burn a bridge in terms of doing an operation. You can't operate on someone who is on blood thinners.

So there's two reasons not to do it, in that case if that clot is not actually inside the blood vessel. In this case it is inside the blood vessel so this anti-coagulants or blood thinners are actually you know they are the most effective and most common treatments.

ROMANS: How would they watch to see if they resolved it, is it another MRI to check for it?

GUPTA: Probably another MRI. And I should add that what -- what we're describing is pretty rare. I mean, this is a rare occurrence. It typically doesn't happen that afternoon and it can happen with head trauma but more commonly associated with certain medications that increase your coagulation, but yes, you want to make sure that clot eventually is gone.

Also if she's had any symptoms --


ROMANS: Right.

GUPTA: -- you know if she's had headache or anything else you want to make sure if those are starting to go away and they should if the clot is gone.

ROMANS: She got the flu and a concussion.


GUPTA: That's right. She's had a rough couple of weeks.

BERMAN: So the doctors, you say -- we could say, expect a full complete recovery.

GUPTA: Yes they've been very detailed about this John, no stroke. This can cause stroke, they say that hasn't happened here; no neurological complications as a result of this. So I've read these statements very carefully to make sure that they're saying the things that we need to be hearing.

BERMAN: All right, Dr. Sanjay Gupta thank you especially after you ran your midnight road race in Central Park last night.


BERMAN: Great to see you here this morning.

GUPTA: Trying to stay healthy myself. Thanks for having me. Happy New Year.

ROMANS: All right, you too. Ahead on STARTING POINT, here's a reality TV champ, winning Food Network Show's "Chopped". But more amazingly he survived cancer five times, Eric Levine's incredible story, that's next. You're watching STARTING POINT.


ROMANS: For most people cancer is a scary word for obvious reasons but one five-time cancer survivor who has achieved the level of professional notoriety refuses to be fearful.

Our chief medical correspondent Dr. Sanjay Gupta has his story in this week's "Human Factor."


ERIC LEVINE, CANCER SURVIVOR: I'm the executive chef of Encore Catering in East Hanover, New Jersey.

GUPTA (voice-over): Eric Levine got off to a rocky start on the Food Network's "Chopped" but the fact that he showed up to compete at all defines resilience in the face of adversity.

LEVINE: The night before I had the chemo radiation treatment, I found out that I had six to eight months to go. At that moment it was like a light bulb went off. It was "Wow, look at the opportunities that I have. Most people would give their soul to have what I have."

GUPTA: Eric survived the chopping block and he won $10,000 but more importantly, he's now survived cancer five times. He was first diagnosed when he was just 29 years old.

LEVINE: After I had beaten the cancer for the fifth time I wanted to have something to remind me every day of life so the five on the outside represents the five times I've beaten cancer and the IM to the first power is the Indestructible Master of One theory. I have them for that.

You take responsibility for your happiness and your actions and what you do in life if you pass that on to one person every day.

And then the stems cut it off and we'll use that for the --

GUPTA: Levine shares his culinary and cancer survival experiences at events held at his restaurant as well as when he lends his time to the American Cancer Society.

LEVINE: So for me it's all about paying it forward and paying it through to a good cause, very involved with American Cancer Society.

GUPTA: In the end he says fight the fight, do what you love every day and above all, have some fun.

LEVINE: I think the fun factor is what it's about.

GUPTA: Dr. Sanjay Gupta, CNN, reporting.


BERMAN: I think we can all support the fun factor. ROMANS: I think we can.

BERMAN: All right. Our "End Point" is next.


ROMANS: Happy New Year. We hope you come back tomorrow and join us on "STARTING POINT", because we're talking about a big day with New York Congressman Steve Israel, Tennessee Congressman Marsha Blackburn, Jen Psaki who was President Obama's traveling press secretary for his re- election campaign, and we're going to bring top economist Diane Swonk and we're going to talk about what all of this is going to mean for your paycheck but also for debt and deficits in this country.

BERMAN: Right. And this fiscal cliff deal not done at all.

You're going to want to stay with CNN all day for the developing news on the fiscal cliff. We have a big house vote perhaps as this bill gets to the floor.

But before that, as we say good-bye to 2012 we want to say thank you to everyone here, all the people behind the scenes who helped make "EARLY START" and STARTING POINT possible. It's been an amazing year. I'm thrilled to be here. Happy New Year, everyone.


ROMANS: Happy New Year, John.

BERMAN: Happy New Year to you, too. "CNN NEWSROOM" with Joe Johns begins right now.