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CNN NEWSROOM

No Vote On Superstorm Sandy Aid; Representative King Blasts GOP; "Fiscal Cliff" Deal Benefits Businesses

Aired January 2, 2013 - 10:00   ET

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


(COMMERCIAL BREAK)

VICTOR BLACKWELL, CNN ANCHOR: Happening now in the NEWSROOM, dodging the fiscal cliff crisis at least for now. But with all this talk about spending less, why are lawmakers giving millions of dollars to businesses that are already thriving. We'll show you who is cashing in.

Another winner from last night's deal, Wall Street, markets today are soaring in celebration as Washington finally makes a deal.

And they told us to basically drop dead. That's how one New Yorker is reportedly characterizing the House after it ended the session without sending any Sandy relief to the northeast.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: Everybody played by the rules except tonight and the rug has been pulled out from under us. Absolutely inexcusable, absolutely indefensible.

(END VIDEO CLIP)

BLACKWELL: We'll talk to New York Congressman Peter King. NEWSROOM starts right now.

Good morning. I'm Victor Blackwell sitting in for Carol Costello.

Congress manages to dodge a crisis and avert the fiscal cliff, but millions of other Americans say they're paying a horrible price for all that consuming drama on Capitol Hill. They're the victims of Superstorm Sandy and they were blindsided when the House Republican leaders wrapped up the session of Congress without voting on billions of dollars of aid. Lawmakers from those hard-hit areas of northeast were quick to condemn the GOP decision.

(BEGIN VIDEO CLIP)

KING: Everybody played by the rules, except tonight when the rug was pulled out from under us. Absolutely inexcusable. Absolutely indefensible. We have a moral obligation to hold this vote. The people who out of their homes, the people who are cold, the people who are without food, the people who lost their jobs -- they don't have the time to wait. REP. NITA LOWEY (D), NEW YORK: Disaster knows no boundaries. This body has acted with speed and compassion to help Americans throughout the country in disaster after disaster. Dysfunction, Mr. Speaker, in this Congress shouldn't result in punishing victims of Sandy in New York, New Jersey, Connecticut and Pennsylvania. This is a sad day.

(END VIDEO CLIP)

BLACKWELL: We just heard from Peter King and the Republican Congressman joins us now from Capitol Hill.

Sir, you represent part of Long Island that was really hit hard by the storm. I was there after Sandy hit. And people lost their homes, their businesses; they lost friends and relatives. Tell us how significant this delay is for the people you represent.

KING: It's absolutely devastating, and what was most galling about this is that within ten days of Katrina, we gladly voted $60 billion and went over $1 billion ultimately. It's now nine weeks since Sandy struck Long Island, New York, New Jersey, and we have not gotten a penny from the United States Congress.

And we played by the rules, as I said in my speech last night. Governor Christie, Governor Cuomo, Mayor Bloomberg, Congressman LoBiondo, Congressman Grimm and I met with the majority leader, Eric Cantor, who by the way kept his word throughout this, and the bill was drawn. It was going to come up either yesterday or this morning. We were promised that. We were guaranteed that. We provided every penny of documentation that they needed.

And last night the Speaker of the House of Representatives walked off the floor, didn't even give us the courtesy of a notice. He told an aide to the majority leader who told us. And we end ended up telling up the majority leader, I believe, so there's some dysfunction in the Republican leadership. The speaker, for some reason, is taking it out on New York, and Long Island, and New Jersey. It's a disgrace and I would just say, as a Republican --

BLACKWELL: Mr. King, I just want to jump in here for a second. We want to continue this conversation, but I want to go to the House floor right now. Congressman Steny Hoyer is speaking about Sandy relief.

Let's listen.

(BEGIN LIVE FEED)

REP. STENY HOYER (D), MARYLAND: We would have had to borrow that money, yes, just as if the furnace went out and the temperature was at zero, you would immediately replace the furnace to keep the family safe and borrow the money to do so. Yes, we would have had to repay it, and we would.

This bill would have allocated $6 million dollars in emergency aid for food banks - food banks to make sure that people in the richest country on the face of the earth have some sustenance for them and their children. I saw an area at Breezy Point where more than 100 homes were devastated by fire when an electric transformer malfunctioned. The many firefighters who lived in that neighborhood could not get additional help from surrounding boroughs due to severe flooding. They battled mightily, saved many lives.

But there is little left, indeed none, of their homes. I saw local businesses, Mr. Speaker, which had been there for years.

(END LIVE FEED)

BLACKWELL: So we've been listening to the Democratic whip, Steny Hoyer, on the House floor talking about the need for funding for people who were affected by Superstorm Sandy.

Let's go back to New York Congressman Peter King and talk about the GOP leadership because, as you were answering the first question, you said that Representative Cantor and others members of the GOP leadership held up their end of the bargain. One person you did not mention was Speaker Boehner. Do you blame him outright?

KING: I do. Speaker Boehner is the one. He walked off the floor. He refused to tell us why, refused to give us any indication of warning whatsoever. Eric Cantor, he met with us through the week. He's the one who devised the strategy as to how we would bring it to the floor to make it acceptable, to let Republicans who wanted to vote against certain parts of the bill, they could do that, but the bill was going to pass with $60 billion. But listen, the bottom line is here, the Republican speaker walked off the floor without allowing a vote.

And I'm just saying, these people have no problem finding New York, these Republicans, when they're trying to raise money. They raised millions of dollars in New York City and New Jersey. They sent Governor Christie around the country raising millions of dollars for them. I'm saying anyone from New York or New Jersey who contributes one penny to the Republican Congressional Campaign Committee should have their head examined. I would not give one penny to these people based on what they did to us last night.

And I'm talking about the people in the neighborhood that I see: people out of the homes, people living in devastated homes, people who that have jobs, people who have lost their business, people who've lost their automobiles, their clothing, all their lifelong possessions. It's absolutely disgraceful. And I have to go back now. This weekend I'll be telling these people why the Congress of the United States refused to give them the food and shelter that every other region has gotten.

I gladly voted for when it came to any other state in the country when they had a natural disaster. That is a responsibility of the federal government. And people in my party, they wonder why they're becoming a minority party. They're writing off New York; they're writing off New Jersey. Well, they've written me off and they're going to have a hard time getting my vote, I can tell you that.

BLACKWELL: You say that they've written you off and you say that this is even worse because you're a Republican. Is this enough to make you leave the party or switch parties?

KING: No, I'm going to do what I have to do. I'm going to be independent minded. Sometimes, as John Kennedy said, party loyalty demands too much. And I would, as all of us do, often you give the benefit of doubt to your party -- we are a two-party system. But I'm over that. Because at the very least, you're expected to be treated fairly. Nobody wants a special favor. Nobody's looking for an earmark or a gift or anything else. But when your people are freezing in the winter, and they're without food, they're without shelter and they're without clothing, and my own party refuses to help them, then why should I help the Republican Party?

I will stand on the values and principles that I believe are true Republican principles, but turning your back on people who are starving and freezing is not a Republican value.

BLACKWELL: Let me read you something that a fellow Republican, fellow member of the House, said. This is from House Appropriations Chairman Hal Rogers of Kentucky.

He said, quote, "FEMA has plenty of money. There's no immediate need." He says that FEMA has enough money to last until at least late February or March, anyway.

What's your response to that?

KING: Hal Rogers - first, he doesn't know what he's talking about, and besides that, Hal Rogers has no problem coming to New York and raising money, put money in his pocket when he wants to raise it from New Yorkers.

Secondly, the FEMA money is limited to $31,000. That's not going to rebuild businesses; that's not going to provide food and shelter. That's not going to reimburse the local governments like my county government, Nassau County -- $6.5 billion they had to expend. That's the damage to Nassau County. That is not paid for by FEMA. That is why you need the special type of community development block grant money that Governor Christie wanted so much in New Jersey, that Governor Cuomo wanted in New York, that county executive Mangano and Bellone needed on Long Island. That's the money you need, not the FEMA money. Not the flood insurance money. Yes, that's needed, but that's not only what you need in time of disaster. That's not what we did for Katrina. And that's why in the bill, it was $33 billion which was documented down to the last penny.

So Hal Rogers can play his game. He can suck up to the Republican speaker if he wants to, but stay out of New York, Hal. Stay out of New York. Raise your money down in Kentucky.

BLACKWELL: Will you vote to have John Boehner as Speaker of the House for the next session?

KING: I'm going to -- every vote that I cast from now on is going to be -- I'm going to wait until the last minute to decide how I should vote, not because of me but how it's going to affect my region. My obligation is to my constituents, not to any individual, not to any party. It's to my country and my constituents.

BLACKWELL: So would it be fair to interpret that as you have not yet decided if you will vote to elect John Boehner as speaker in the 113th Congress?

KING: As far as I'm concerned, my world turned upside down last night, so I am right now holding every vote in abeyance.

BLACKWELL: Have you spoken to the speaker's office to find out why this did not come up for a vote?

KING: I was chasing the speaker all over the House floor last night trying to talk to him and his staff, and he kept telling me wait until the vote is over. Wait until the fiscal cliff vote is over. Everything will be taken care of. And then he was gone. And he refused to meet with us; he actually yelled at Congressman LoBiono, said, "I'm not meeting with you people." So he wouldn't tell us why. He decided to sneak off in the dark of night.

BLACKWELL: He yelled at -- you're saying that he yelled at a fellow Congressman saying, "I'm not going to speak with you people."

KING: Right. Absolutely.

BLACKWELL: What would you say to the people who are sitting at home or sitting at some place they are now calling home because they lost their homes -- what would you tell them about the House body and about your party, the party you've been a member of for many, many years and how they have been, I guess, let down, in your view, this session?

KING: I would say the Republican Party has said it's the party of family values. Last night, it turned its back on the most essential value of all, and that's to provide food, shelter, clothing and relief for people that have been hit by a natural disaster. And I would say the Republican Party has turned its back on those people, and it's very hard for me to ask any of those people to vote for the national Republican Party. Certainly, I hope they vote for me, because I'm doing the job that I do, but I don't blame them for being thoroughly disgusted.

And I'm telling you, there are seats, there are Republican seats in the northeast, I think, were lost last night, to put this in purely political terms. There are a number of Republicans who maybe can kiss their seat good-bye, because of what was done to them. Not because of what they did, but what was done to them. Because the issue is, if you can't provide the most basic assistance to your district, who needs you in Congress? Why have a Republican? Why not go to a Democrat? We have to explain that when we go home. So Republican Party, they talk about an image problem? This is a reality problem they have.

BLACKWELL: We're talking with Congressman Peter King of New York, representing an area that was devastated by Superstorm Sandy.

Sir, I want to continue this conversation, but we're going to take a quick break and come back and talk a little more. (COMMERCIAL BREAK)

BLACKWELL: This is the House floor. Jerry Nadler on the floor right now talking about the need for relief for people in the Northeast affected by Superstorm Sandy.

And we're continuing our conversation with New York Congressman Peter King about his just outrage that a bill was not put on the floor for a vote to get $60 billion to the people who need it most. And you talked a bit about the discussion of how this would come to the floor, that you had already talked about this with Eric Canotr. Was Speaker Boehner a part of this plan leading up to the final days of the session?

KING: When you meet with the majority leader, it's like meeting with the speaker. I mean, he is the agent of the speaker. He said he's spoken to the speaker and we met with him in his office. I think Eric was totally honest with us. The legislation was drawn. It was done in such a way there would be two parts to it. The legislation actually was on the committee Web site. It was scheduled to come up either yesterday and then they said it was going to come on today.

And as far as all my meetings with the speaker -- I met with the speaker with Governor Cuomo when he came down here. And the speaker said, "Don't worry, when the bill comes over from the Senate, we'll take care of it. There will be no offsets. We have to get this through. We have to take care of the disaster relief."

I know we met with Governor Christie. He was telling him the same thing. And whenever I would go to the speaker, he would say, "Everything's fine. Don't worry about it." Even last night. I said, "John, there's rumors going on this isn't even going to come to a vote." He goes, "No, let's get the fiscal cliff behind us. We'll take care of it. I'll talk to you then. Don't worry about it. Everything will be fine."

BLACKWELL: When did you have that conversation in which he told you everything would be fine? And when did you start to hear these rumors that it wasn't or would not come up for a vote?

KING: I first heard the rumor about 6:30 last night when Eric Cantor said to me - I said, "Eric, what time is the supplemental bill coming up?" And he said, "Well, it's up to the speaker." And I said, "But Eric, you said it was coming up." And then he said, "Well, the speaker hasn't given the green light yet."

I go to the speaker, he goes, "No, it's up to the majority leader." And that's when I started to realize there was ping-pong going on.

And then Eric Cantor, who I believe said the speaker wouldn't give the green light, so finally, later about 9:00, or 9:30, I saw the speaker on the House floor and I said, "John, we're hearing that it's not coming up." And that's when he told me, "Everything will be fine after this vote."

But then later when Congressman LoBiondo wanted more assurance, he wanted a meeting, I was told by -- not by Congressman LoBiondo but people who observed it -- that the speaker yelled at us, said, "I'm not meeting with you." And then he just left.

BLACKWELL: Do you think the discussions up to the point where you say that Speaker Boehner shouted, "I'm not meeting with you people," and left and the days and weeks up to what would happen when this was presented, do you think those negotiations and those discussions were in good faith on the part of the speaker?

KING: Now I have to wonder. I have to wonder. I mean, again, the first inkling we had was yesterday. I know over the weekend, the speaker expressed some reservations about the bill, and then he met with majority leader. And the majority leader said that it'd all been resolved, and that's why this legislation was drawn. We took out anything in there that they felt was not directly related to Hurricane Sandy. It was full compliance with everything they were asking for.

And so all I can say is maybe -- again, there is a bias in the Republican Party against New York and New Jersey, and with all the pressure of the fiscal cliff, that was just felt that why have extra pressure? They would rather throw New York and New Jersey overboard and keep of rest of the party together.

It makes no sense. I've been in politics 35 years, and I've been in pretty rough politics in New York and I can play as hard as anyone else. But what I saw in the last day, if somebody wants to throw me out of something, want to remove me from something, that's fine. That's part of the game. I can take care of myself. But I can't stand seeing thousands of my constituents being treated the way they were, and not just my constituents, all the whole northeast. I mean, it's devastation. This is like -- when you go to those areas, I mean, you're talking about Breezy Point, you're talking about Massapequa, (INAUDIBLE), Lindenhurst, Jersey, Jersey Shore, Staten Island -- Congressman Grimm's district.

And again, Congressman Grimm, Congressman LoBiondo, myself, Congressman Frelinghuysen, Republicans working all week with the leadership, saying what do we have to do? And we were told everything was on board, everything was ready. We had all the papers ready to go. We had lined up the votes. We had the committed votes where this bill would have passed on the House floor with no problem at all. We had gone around, spoken to people. We had done everything we were asked to do and, again, the knife in the back.

And that's all it is, because they're saying they're going to vote on it in January, that's nonsense. First of all, we're not in session next week. Second week after that, we're in session for two days. The week after that is inauguration. The week after the State of the Union. We're going to be into February, and even then, if they wouldn't give us the $60 billion last night, what makes us more confident we're going to get it in February or March or April? And meanwhile, these people are freezing and starving. And that's the reality.

BLACKWELL: So, two parts here. Is there any recourse with the few hours left of this session, anything that can be done to get money to people in the northeast? And if you say February, March, April until you get something, do you believe that money is coming?

KING: I think some money will come, but not enough. They're talking about the $27 billion in FEMA and flood insurance money, which you're entitled to anyway. It's the money that's needed for rebuilding, needed to reimburse the local governments for the massive costs they incurred. That's what's not going to be coming and that could up bankrupting governments in New York, on Long Island. Governor Cuomo's budget just can't handle it. I know Nassau County budget cannot handle it. Governor Christie, I don't know what he's going to do in New Jersey. And there's an angry man, if you want to talk to Governor Christie, after what he did for the Republican Party.

And I don't even want to be talking about words like "Republican". This should not be a Republican or Democratic issue. But if these guys want to use New York and New Jersey as cash cows for themselves, then they should realize that those days could be over.

BLACKWELL: Representative Peter King representing a part of New York devastated by Superstorm Sandy, using the term "knife in the back" when the speaker walked away from Congressmen saying, "I'm not going to talk to you people," as it relates to Superstorm Sandy funding.

Thank you, sir, for speaking with us. And we of course will follow this.

KING: Thank you.

BLACKWELL: Now the lack of funding aid is not the only thing that's causing anger this morning. There is a ton of pork attached to the fiscal bill, and we're going to go through that, too.

(COMMERCIAL BREAK)

BLACKWELL: Buried in the American taxpayer relief act, that's the fiscal cliff deal of 2012, pork, lots of pork, millions in tax breaks. First off, Hollywood, $430 million in tax breaks to TV for film production companies in the U.S. to foster production projects.

Also cashing in, railroads, $331 million, the tax credit is tied to maintenance of the tracks. Puerto Rico and the Virgin Islands will see more that $220 million federal tax dollars returned. They were collected on rum produced there and imported to the mainland.

And that iconic American sport NASCAR will get a windfall of $70 million. Everything from help for Hollywood to refunds for rum, Christine Romans, we have invited Christine back to speak with us. And Tom Schatz, president of "Citizens Against Government Waste."

I want to start with Tom and then let Christine get in here as well. What in this bill and I know there's a lot of it that just makes you want to scream.

TOM SCHATZ, PRESIDENT, CITIZENS AGAINST GOVERNMENT WASTE: I think the motorsports entertainment complexes get a tax break, cellulosic biofuels production. We haven't produce any cellulosic biofuels that can be used commercially even though there's a requirement to do so. And the TV and film industry, hundreds of millions of dollars in tax breaks, a lot of states already give them a tax break, record profits at the movies, certainly television. These are the kinds of things that should not be in a bill that's addressing a greater need related to tax rates. They just get extended year after year without much thought.

BLACKWELL: We all know how these things get in here. Senator John McCain said for years that these bills are like Christmas trees. You just hang lots of jewels and pretty things on them. The question is, why do we hear about them after the thing has already been passed? That has to be frustrating.

SCHATZ: That's really the big issue. No one gets excited or upset about these provisions until they get extended and that's how they really get hidden. It comes up once a year as an extension, again there's not a lot of discussion, not really open hearings on these provisions that everybody knows about.

So they also get lost in the larger piece of legislation, in this case stopping the fiscal cliff with the tax extensions. So, you know, in Washington what's a few hundred million here and there?

Three provisions, by the way, that were first created or expanded in the stimulus, $134 billion. Those are provisions that were supposed to expire after the stimulus.

BLACKWELL: And Christine, jump on in here.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, you know, there's one thing, a bonus depreciation clause in here, extension of bonus appreciation. You know, one person could say that's corporate welfare. Why are we giving corporations money, but when you talk to people watching Wall Street and corporate America, they say maybe this will get dismiss money off the sidelines and create some jobs.

Some of these things are glaring, and they're ugly, and this is what the political process, a legislative process is like and other ones, you know, I'm asking people about them. They're not as outraged as you would think, because they say, well, maybe it will get money moving.

In terms of the Hollywood films, you know, I mean, there are big tax breaks coming from other countries too to try to move production overseas. You know, we want to keep domestic production of film. You know, when you talk to these industries, they give you these very valid reasons for why it's not pork in their case, but this shows you even when we're talking about a new era, a new era where we'll try to be responsible in our federal budget, we still have the same old games.

BLACKWELL: Tom, the next phase of this, we've done taxes now we're going to tackle spending. Are you confident that there will be serious spending cuts as we move forward over the next two months?

SCHATZ: Well, there have to be because not "enough money," quote/unquote, was included in the tax bill for offset the increase in the deficit. This is where the big issue lies, getting spending under control and by the way, just back on the tax issues briefly.

All of these provisions make it more difficult to reform and simplify the tax code, lower overall rates, which help all businesses. The spending side of this, there are hundreds of billions in duplication and overlap that's been identified by the Government Accountability Office.

We have more than 200 programs for science technology, engineering and math, no one which knows which of those works, and a third of those have been added in the last five years, so Democrats and Republicans alike are responsible. It has to get under control.

BLACKWELL: All right, Tom Schatz, Christine Romans, thank you both. This conversation, of course, will continue.

A lot of congressional Republicans broke ranks with their party values in order to get the fiscal cliff deal done. We'll talk to one of them after the break.

(COMMERCIAL BREAK)