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Obama to Sign Fiscal Cliff Bill; No Vote on Superstorm Sandy Aid; U.S. Deal Boosts International Markets; Iran Fires Long-Range Missiles; Chavez in Post-Surgery Recovery; Islamist Militants Targeting Christians in South Africa

Aired January 2, 2013 - 12:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: The world in 60 minutes. Here's what's going on right now.

The nation, of course, pulling back from the brink of economic chaos after a late night vote in the House. Now, President Obama back on vacation in Hawaii. He is prepared to sign this new bill preventing the widespread tax increases and those deep spending cuts.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans, while preventing a middle class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America.

(END VIDEO CLIP)

MALVEAUX: So here are some of the specifics on the bill. No income tax increases for couples making less than $450,000 a year. Itemized deductions will be capped for those making $300,000. And taxes on inherited estates are going to go up from 35 percent to 40 percent. The unemployment insurance will be extended for a year for 2 million people as well, but the deal does not address the automatic federal spending cuts or the nation's $16.4 trillion debt deficit. So, the debt ceiling, rather.

There is much more drama to come, we imagine. Our Dan Lothian is aboard Air Force One on to Hawaii with the president. And, Dan, joining us from Honolulu. We have Lisa Desjardins, she's on Capitol Hill.

First of all, Dan, I want to start off with you. Ten hours. Back in Hawaii. Is there a sense that this is vacation? Does the president feel relieved? Or is this just a matter of getting ready for the next battle?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, I think it's all of the above. Certainly there is relief. The president feels relief. The White House feels relief here. And, in fact, perhaps to blow off some steam, the president, as we speak, is now at a gym working out. But in addition to that relief, they also feel some frustration. The White House saying that it didn't have to come to this. They're pointing the figure at Republicans, saying that they're responsible for this kind of gridlock in Washington. They realize that the American people are frustrated by inaction in Washington. So they're pointing the finger at Republicans. Republicans, of course, pointing the finger at the White House, saying that they're also to blame.

And then there's also this question being asked, how will the president be able to carry out his second term agenda? He's talked about making immigration reform a top priority, dealing with gun violence. How will he be able to deal with those issues when he's still facing these impending fiscal matters.

MALVEAUX: So, Dan, do we have any sense of whether or not the president is actually going to take a little time off here? We know that he's got all the tools at his disposal to get stuff done while he's in Hawaii, but do we have a sense of how long he's going to be there, when he's going to sign the bill, or if he's going to take a little break?

LOTHIAN: Well, he will certainly taking a little break. And for those who may not have been paying attention, this is part two. Take two for the president. He was here and then went home right after Christmas. And so he's trying to get -- to have a little bit of fun.

I was talking to Jay Carney earlier this morning and he did not have any specifics as to how and when the bill would be signed. It could be auto pen. We've seen the White House do that before. The bill could actually be brought here. But nothing yet nailed down.

And as to when the president will be leaving, we know that the first daughters have to be back in school at the beginning of next week. So we expect the president will be leaving sometime at the end of the week, perhaps during the weekend.

MALVEAUX: All right. I have to say, a little jealous of those waves, hearing those waves crash behind you there, Dan.

LOTHIAN: It's very nice.

MALVEAUX: But, obviously, a little bit of a break for the president and perhaps for you. We don't know yet. We'll see. We'll see how it goes. Good to see you, Dan.

Want to bring in Lisa Desjardins to talk a little bit about what we have seen.

Obviously, you know, I mean, over the holidays, really quite extraordinary. Up to the last minute. You know, a nail-biter, if you will. And a lot of people very frustrated to see how Congress and they were all behaving. But there are -- there's now another controversy that has come out of this. And this is because House Speaker John Boehner did not bring forward this vote on Hurricane Sandy disaster aid for New Jersey and New York. And it's got a lot of people who are scratching their heads and they're very angry that this did not happen. I want you to hear -- this is what one of the fellow Republicans said against Boehner.

(BEGIN VIDEO CLIP)

REP. FRANK LOBIONDO (R), NEW JERSEY: When Katrina hit, 10 days later, $60 billion. $100 billion altogether. Now we have to hear from people in Florida, Louisiana, and Texas and Alabama and, yes, some people from California and the Midwest, when they have a disaster, and we were there for them, that the rules are going to change for us, and it is now not an emergency and the federal government doesn't have a role in this? Absurd. Absolutely absurd! We demand nothing less than we have given the rest of the country. An emergency and disaster means emergency and disaster.

REP. PETER KING (R), NEW YORK: Nobody wants a special favor. Nobody is looking for any ear mark or a gift or anything else. But when your people are literally 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.

(END VIDEO CLIP)

MALVEAUX: So, Lisa, what's the fallout from all of this? Because clearly there's a lot of people who are frustrated, but you do have a new Congress that's going to be sworn in as early as tomorrow.

LISA DESJARDINS, CNN RADIO CAPITOL HILL CORRESPONDENT: Right. And Congress will be sworn in tomorrow at noon. They're getting organized even today. To be honest, I think, Suzanne, that there are two things happening. There's the fiscal cliff fallout. A lot of Republicans were not happy about the spending in that bill. But behind the scenes they told our producer Deirdre Walsh that they understood what Speaker Boehner had to do and that they weren't holding it against him.

Then we've got now this Hurricane Sandy relief bill, and to be honest, it seems the speaker's office is quickly trying to fix that situation if they can and they're meeting with members from New York and New Jersey today at 3:00, again coming from our producer Deirdre Walsh. So I think they realized it would be hard for them not to. That they've angered many of their members. They're trying to figure out what they can do.

And they've said that Speaker Boehner's first priority in the next Congress will be this Hurricane Sandy aid. But, obviously, there are a lot of very unhappy members and perhaps even more unhappy voters that they're going to have to speak to you. I understand we're going to be hearing from New Jersey governor, Republican Chris Christie in the next hour as well. So I think that's all going to have an effect on sort of the lay of land for Speaker Boehner.

MALVEAUX: Do we know -- has Boehner released a statement? We know he's meeting with his fellow Republicans. Has he said anything publicly about -- is he surprised that all this is coming about today? DESJARDINS: We haven't gotten anything like that, but we have heard from one of his aids that they intend to make this their very first priority. That's the message they're putting out right now. But I would expect that we're going to get more material from them as the day wears on. I have a feeling that want they want to do first is meet with these members who are outraged over this, talk to them, and then see if they can come out with a statement after that. Now, that's just my guess. But I think that we will learn a lot more about what happened and hopefully why they didn't take this vote last night in the coming hours.

MALVEAUX: Sure. All right, Lisa, thank you so much.

The president is already weighing in on this. The Superstorm Sandy relief bill controversy. He released a statement this morning. He says, "when tragedy strikes, Americans come together to support those in need. I urge Republicans in the House of Representatives to do the same, bring this important request to a vote today and pass it without delay for our fellow Americans."

International markets reacting positively to the fiscal cliff deal. Both Asian and European markets made gains today. I want to bring in our Richard Quest from London to talk a little bit about the boost that we're seeing in the international markets.

Richard, you and I, we've been talking about the fear, the chaos. Now it seems like we're over this and there's some good news here, yes?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Yes. I'm just looking at the numbers at the moment. The Dow up 1.6 percent. In Europe, we see the FTSE closed up 2.2, the DAX in Frankfurt up 2 percent. So, yes, you're seeing a very strong rally on European and U.S. markets on the back of this.

I would say this is classic relief. It is no more. It is no less. They are breathing a sigh of relief that the worst excesses of the cliff were not realized. But -- and you knew there was one coming -- but, of course, nobody is fooled for one moment about the -- just the dog's breakfast of a deal that was put together.

MALVEAUX: Tell us about that.

QUEST: And I say that -- that --

MALVEAUX: Tell us about that.

QUEST: Go on.

MALVEAUX: I understand -- how are the newspapers -- what are the headlines in the newspapers on this? What did you call it, the dog's what?

QUEST: It's call a dog's breakfast.

MALVEAUX: Ah, the dog's breakfast. OK. QUEST: Yes. I mean, and that's not necessarily my view. But let's put it this way, "The Telegraph," "The British Daily Telegraph" says "the most depressing aspect is that if Americans cannot display more maturity, how will things ever get done?" They called it a cobbled- together face-saver. "The Guardian" newspaper in the U.K. says, "America's government cannot continue to live with a system that spends so much." A depressing start to the year. Even the Chinese got in on the act. "Economics and common sense do not lie. People in governments can overspend, but they cannot live like that forever."

So, look, the reality is as follows, he said shuffling suitably (ph), the reality is as follows. They did a deal to affect the worst of the fiscal cliff. But in doing so, there are now three very clear time bombs waiting to go off. Firstly, the spending cuts at the end of two months.

MALVEAUX: Right.

QUEST: Secondly, you have the budget process itself that is waiting too (ph). And, thirdly, you have, of course, the debt ceiling, $16.4 trillion. Any one of those, probably all of them at some point, is going to cause dislocation and disturbances in the political process (INAUDIBLE).

MALVEAUX: That's very true. That's very true. That's very likely, Richard. But talk a little bit about the other thing that we think is going to happen, and that is what is happening in Europe and throughout the world. You have Portugal going over its own fiscal cliff, right? Folks getting hit with a 30 percent tax increase. And then you still have the impacts of Greece.

QUEST: You do. You do. And that's why this is all so dangerous and risky. But you -- Portugal going over its own fiscal cliff, or fiscal earthquake as it's being called with a 30 percent rise. Now, the president of Portugal has referred that to the constitutional court to get a ruling because it's so austere and it will be so dramatic.

MALVEAUX: OK.

QUEST: So, Portugal, which is -- which is -- to one side. Greece, we've still got to worry about bailing it out throughout the course of 2013. Spain has very high unemployment and, of course, may or may not go for a further bailout. Ireland is still in some trouble. You have bank bailouts, you have the European stability mechanism and you have banking unions.

MALVEAUX: Yes.

QUEST: I am not for a moment -- I am not for a moment suggesting that it's plain sailing on this side of the Atlantic. All I'm saying is that this afternoon everything looks a lot more complicated and I wish I was in Dan Lothian's shoes in Hawaii.

MALVEAUX: Don't we all. It's still pretty much a hot mess. All right, Richard, thank you very much. We appreciate it. New York celebrating with a new year, the ball drop, of course, but Iran, how did they ring in 2013? By launching warships, helicopters and a long-range missile into international waters.

And later, Islamist fundamentalists burst into a church, gun down the people inside just for being Christian. We're going to tell you about a dangerous group in Africa with ties to al Qaeda.

(COMMERCIAL BREAK)

MALVEAUX: Iran has long defied international pressure to give up its nuclear program. And now Iranian officials have announced that they have successfully test fired two long-range missiles. Well, our Chris Lawrence explains the possible fallout and the danger from these events.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): Iran started the new year showing off some new technology, including an upgraded missile designed to destroy warships. Iran has been test firing a range of weapons near the Strait of Hormuz, including an air defense system designed to confront fighter jets, helicopters and drones.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: This tells me more about their willingness to, you know, keep the pressure up, stay in a somewhat inflamed and confrontational mode.

LAWRENCE: Analyst Michael O'Hanlon says the test didn't dramatically move the ball for Iran's technology, but it sends a warning to the U.S. and nations in the region regarding any attempted strike on Iran's nuclear facilities.

O'HANLON: In the short term, they may actually like the idea of telling us they can escalate, to make us think of this as not just a pin-prick surgical strike, but the beginning of a war. And they may feel they can intimidate certain participant countries into rethinking, whether it's the United States or one of the Gulf states like Qatar, or UAE or Kuwait.

LAWRENCE: A Pentagon report this past summer found that Iran's ballistic missiles were becoming more accurate, more versatile and more deadly than ever. But for years, U.S. intelligence officials circled the year 2015. They believe by then Iran could test an intercontinental ballistic missile with a range of 3,500 miles.

JOHN PIKE, GLOBALSECURITY.ORG: This would give them the ability to attack a number of European countries, which would give them a degree of political influence in a crisis that they might not otherwise have.

LAWRENCE: But the latest intelligence report from Congress was just released in the last few weeks. It reassesses that estimate and concludes Iran is not likely to test an ICBM in the next few years.

(END VIDEOTAPE)

MALVEAUX: We are joined by Chris Lawrence in Washington. Chris, tell us, first of all, why the change? Why is that?

LAWRENCE: Well, Suzanne, basically the report says that economic sanctions are making it harder and harder for Iran to get the necessary components and materials. It also shows that the Iranians are not getting the help they need from Russia and China, whose support has actually been dropping over the past 10 years.

Remember, there's a big difference between having a nuclear weapon and actually having a nuclear missile that deliver it. You've got to be able to miniaturize that weapon to the point that you can put it on the end of a warhead and then you've got to have the technology in that missile to fly very long distances accurately.

It's a very, very tough technology to master. Back when the U.S. was first developing this technology, their own -- our own tests failed about a third of the time.

MALVEAUX: Sure. A very important point that you made there, Chris.

Also, you've got them announcing the long-range missiles. Iran also warned about preparing to shut down the Strait of Hormuz if they impose sanctions, world sanctions, on its oil exports. What does that mean for the rest of us, for the rest of the world? I imagine that that's a very significant economic development.

LAWRENCE: They have threatened that many times before in the past, Suzanne. I've got to say, honestly, those threats have somewhat diminished over the last couple months and the one thing to remember about that is a blockade works both ways. Yes, you'd be keeping oil from going out to all these other countries and literally affecting the oil supply around the world, but at the same time, Iran's economy is very dependent on exporting its oil.

So, it would cripple their economy by stopping the exporting of oil. So, it's not just a one-way street when you talk about mining the strait.

MALVEAUX: Sure. And, Chris, is there anything going on diplomatically when it comes to trying to convince Iran to give up the nuclear program? We hear defiance from Ahmadinejad from time to time. Is there any progress?

LAWRENCE: Nothing public. Of course, you never know about some of the private channels that are being worked through envoys, through third parties.

We know there's no direct contact between the U.S. and Iran, but what some of the other partner nations in the region may be talking about in trying to slow that down, that still remains to be seen because, by all estimates, this is really going to come to a head sometime this year.

MALVEAUX: All right. Chris Lawrence. Thank you, Chris. Appreciate it.

Well, he runs Venezuela with an iron fist. He is also fighting for his life against cancer. We're going to look at what happens if Hugo Chavez can no longer rule.

(COMMERCIAL BREAK)

MALVEAUX: Venezuela's president Hugo Chavez's health is being called delicate now as he's recovering from his fourth cancer surgery in Cuba.

Rafael Romo reports that the public has not seen or heard from him directly in three weeks and his vice president is fighting the rumors that he is near death.

(BEGIN VIDEOTAPE)

RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: A call for all Venezuelans to pray for President Chavez.

ERNESTO VILLEGAS, VENEZUELAN COMMUNICATIONS MINISTER (via translator): We know that our prayers are accompanying Chavez in his battle that he's been fighting and that's precisely what he wants.

He wants joy and optimism to make a reality the transformation he's been fighting for.

ROMO: There were masses held for the Venezuelan president who's recovering from cancer surgery. Government officials also canceled traditional new year's celebrations and concerts to give people an opportunity to join the national call for prayer.

EARLE HERRERA, VENEZUELAN LEGISLATOR (via translator): It's an ecumenical prayer. It's a universal love and a planetary feeling for a good man, for a patriot and somebody who gives of himself to his people.

ROMO: The mood has been somber among Chavez's supporters, especially since Vice President Nicolas Maduro, speaking from Havana Sunday, said Chavez's condition is delicate.

NICOLAS MADURO, VENZUELAN VICE PRESIDENT (via translator): We were informed of new complications arising as a consequence of a respiratory infection that we knew of already.

ROMO: Rumors of his failing health has spread on the social media like wildfire, but Venezuelan science and technology minister, Jorge Arreaza, have sought to put an end to the frenzy.

On his Twitter account, Arreaza wrote, "My fellow patriots, do not believe in ill-intentioned rumors. President Chavez has spent the day calm and stable with his children next to him."

The government has yet to inform the Venezuelan people what kind of cancer Chavez is suffering from.

MICHAEL SHIFTER, INTER-AMERICAN DIALOGUE: Chavez has wanted to keep this a secret. He's succeed in that and he's been able to do it because he got treatment in Cuba and the Cubans are very good at keeping secrets and that was, for him, a high priority. ROMO: Chavez has not been seen in public since December 10th when he left for cancer surgery in Cuba. And, unlike prior occasions, the socialist leader has not made any phone calls to state media to let people know about his medical condition.

(END VIDEOTAPE)

MALVEAUX: Rafael Romo joins us. First of all, Rafael, the piece that you did, we see a lot of support for Chavez. Is that real or is that a push, a propaganda effort, if you will?

ROMO: It's a combination of both. You see people who are truly loyal fans of Hugo Chavez because he transformed the poor classes in Venezuela with welfare programs. But you also see and Venezuelans tell me this themselves a lot of people that work for the government and are expected to be fiercely loyal to the government of Hugo Chavez.

MALVEAUX: And what is the timetable here? Because I understand, if he does not show up for his inauguration January 10th, there's the real possibility that he no longer gets to the be the president.

ROMO: That's right. And we spent a lot of time yesterday taking a look at the Venezuelan constitution to see what would happen. If he doesn't show up before January 10th, and that's the key date because he's supposed to be inaugurated then, then the vice president is supposed to take office.

Now, the scenario number two is that if he is sworn in on January 10th, but becomes ill afterwards or incapacitated to serve, then the vice president, who in this case would also be Nicolas Maduro, the current vice president, is supposed to call for a new election.

There's scenario number three. Follow with me. Bear with me because it gets kind of complicated. If he is not sworn in, then the leader of the assembly takes office, and he is supposed to call for an election within 30 days.

And scenario number four is that the national assembly may call President Chavez temporarily absent, open up a period of 90 days in which we have this kind of limbo situation where either the vice president or the leader of the assembly are in charge or in power.

But the bottom line here, Suzanne, is that we may be looking at the beginning of a constitutional crisis because Chavez's loyalists say, we will not accept anybody else but our leader, President Chavez.

MALVEAUX: It's interesting. It's a constitutional crisis, but also it seems as if the thinking is that at least the vice president, if he steps in, not going to see really big changes coming out of Venezuela and how that country operates and its relationships with the rest of the world.

ROMO: That's exactly right. They call it a 21st century socialism. That's what they have been trying to develop in Venezuela. The changes that they have made to the constitution, they're all geared towards that goal. So, not a lot of big changes. MALVEAUX: All right. We'll be watching. Thank you very much, Rafael.

ROMO: Thank you.

MALVEAUX: They are killing Christians, burning churches and have ties to al Qaeda. We're going to take you next to Nigeria and tell you about an Islamist fundamentalist group that has now killed hundreds of innocent people.

(COMMERCIAL BREAK)

MALVEAUX: It's a tragic milestone in Syria. The U.N. now says the death toll from fighting there has now jumped past 60,000.

A Syrian opposition group says at least 151 of those deaths happened today. About half were killed during a government air strike on a fuel station in a suburb of Damascus. Now, in northern Syria, rebel fighters stepped up their offensive to gain control of a key military airbase.

Islamist militants have killed 34 Nigerians since Christmas. Most of them were killed attending church services. Such attacks have been escalating across the northern section of the country. Well, now, Nigeria's military is fighting back at the group known as Boko Haram.

David McKenzie is following the developments from South Africa and, David, first of all, tell us about this organization. What do they do and why are they killing Christians?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, Suzanne, Boko Haram, what they do right now is this reign of terror that's spreading across northern Nigeria, the largely Muslim section of Africa's most populace nation.

In the last few days, since Friday, in fact, Suzanne as you described, more than 50 people killed, the majority of them Christians, most of them attending church services in the wake of a Christmas Day massacre in northern Nigeria where militants from Boko Haram stormed two churches, killing people with guns, slitting some of their throats and burning down some of those churches, according to the Nigerian government.