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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

House Passes Fiscal Cliff Deal; Clinton's Close Call

Aired January 2, 2013 - 05:00   ET

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


(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: On this vote, the yeas are 257, the nays are 167.

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ZORAIDA SAMBOLIN, CNN ANCHOR: Better than late than never. Congress finally comes together and passes a late night fiscal cliff deal. This morning, we have the winners and losers for you.

CHRISTINE ROMANS, CNN ANCHOR: Delicate condition. That's the word on Hugo Chavez's health this morning. The Venezuelan people told to pray for their president.

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UNIDENTIFIED MALE: One, two, three, go.

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SAMBOLIN: Sure, why not? Thousands across the nation take an icy plunge. This is all for a good cause. Have you ever done that, Christine?

ROMANS: Never.

SAMBOLIN: I've considered it. I've considered this.

ROMANS: Really?

SAMBOLIN: I sure have.

ROMANS: It's on the list of things I will never do.

SAMBOLIN: All right. Good morning, everyone. Welcome to EARLY START. I'm Zoraida Sambolin.

ROMANS: And I'm Christine Romans. John Berman, he's going to stop by a little later. He'll be anchoring "STARTING POINT" for Soledad this morning.

It is 5:00 a.m. in the east.

SAMBOLIN: And up first, back from the bottom of the fiscal cliff, at least for now, millions of taxpayers and small business owners can exhale this morning, kind of, sort of, because late last night, the House passed a Senate bill that temporarily brings you us back from the brink. The final tally: 257 for, 167 against.

And it's interesting to note that while some top House Republicans voted no, Speaker John Boehner voted yes.

And here's what the deal means for you. No tax hikes for couples earning less than $450,000 a year. Itemized deductions capped for couples making over $300,000 a year. Unemployment benefits extended for a year for 2 million Americans. And that irritating alternative minimum tax permanently adjusted for inflation.

ROMANS: All right. But don't spike the football just yet because this fight is far from over. The deal doesn't address spending. Drastic cuts have been deferred now for two months and you can be sure the battle is going to get messy.

And then there's 800-pound gorilla in the room, the $16.4 trillion debt ceiling. We just hit it according to the treasury secretary and the president already drawing the line in the sand for that fight.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic, far worse than the impact of a fiscal cliff.

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SAMBOLIN: White House correspondent Brianna Keilar is live from Washington, working triple, quadruple duty for us.

So, Brianna, tell us more about what is not included in this deal and what battles are now looming in Congress.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, let's say first what is in the deal that I think is important to note. And that is that when you're talking about these tax cuts that have been extended for people making $450,000 or less, as a couple $400,000 or less as an individual, they're permanently extended. So that's pretty significant because that isn't just some stopgap one year, two year measure. They are permanently extended.

The issues that aren't tackled are what the fiscal cliff was supposed to serve as an incentive to do and that is dealing with the fiscal health, the long-term fiscal health of the country, entitlement reform, tax reform. So, Social Security, Medicare, trying to figure out how to make those things cost less over time, that's not dealt with. And also, of course, the debt ceiling isn't dealt with and that means that we're going to have a really messy couple of months, Zoraida.

SAMBOLIN: And we have an added element here. New Congress is taking on these battles -- more Democrats in the House and Senate.

How might the incoming crew affect the next negotiations that are going to happen?

KEILAR: I don't think it actually is going to affect it. Even though there are more Democratic seats, Republicans still control the House. Even though there are more Democratic seats, there is not a filibuster-proof majority in the Senate for Democrats.

It was a status quo election. So, if this whole process irritated you, I think you should be prepared for a little more of that here in the near term.

SAMBOLIN: All right. And there's a lot of talk about who won here, who lost here in this fiscal cliff fight.

KEILAR: Sure, and you may not realize that there are some sort of lesser winners. Obviously, the losers I guess you could say are the folks wealthy paying more in taxes. So that would be the wealthy. Those who if they itemize their deductions will see them capped, so that's actually the $300,000 level. For tax cuts, again, $450,000 for couples, $400,000 for individuals.

But some of the other lesser known winners in all of this, and I guess they would have been losers if something hadn't been done, and they're winners because they get to keep some of the tax breaks that they had. You have milk, peanut and sugar producers.

SAMBOLIN: Yes.

KEILAR: You have unemployed, of course. They'll see a long term unemployed an extension of their benefits. And also, the alternative minimum tax has been permanently fixed for inflation.

And, Zoraida, this is something that as someone who covered Congress and now covered the White House, I thought I would have to be talking about the AMT fix for years to come and it's now been permanently adjusted.

And, of course, doctors, as well, they would have seen over time a decrease in the amount of money they were receiving in Medicare payments. That was fixed. We call it the doc fix. So, right now, they're also winners.

SAMBOLIN: And also considered a big winner was Joe Biden, right?

KEILAR: Sure. I mean, he's someone who really cemented his position as serving as the president's proxy when it comes to dealing with Congress. Things had really stalled. He came in and between him and Mitch McConnell, things really moved along.

And for a lot of criticism that Joe Biden gets, certainly for some of his gaffes, I think in this case, he showed his worth as the vice president.

SAMBOLIN: All right. Brianna Keilar, live in Washington for us, thank you.

ROMANS: All right. No matter how you fared in the fiscal cliff deal, your taxes are still going up. And let me explain. This is going to start with your next paycheck.

Let's be very clear here. Tax rates for almost everyone, 98 percent of the country, are not going to rise. But the payroll tax holiday is going to go away. A 2-year-old payroll tax holiday expires as the passage of this bill.

So, the rate you pay for payroll taxes is going up from 4.2 percent back up to 6.2 percent. And here is how it will affect your take home pay. If you're earning $30,000 a year, you'll lose about $50 more a month in taxes. If you make more than $113,000, you're going to lose an additional $189 a month in taxes.

This is real money, folks, so you've got to prepare. You're going to be able to spend a little less money from every paycheck, on your bills, on your wants and needs. So everyone should be budgeting for this because it is real money out of the paycheck.

Let's bring in Chris Frates, a reporter for "The National Journal." He's been following this closely. He's in our Washington bureau.

Chris, you know, what happened behind the scenes? Tell us -- take us behind the scenes about how we got this fiscal cliff deal done.

CHRIS FRATES, REPORTER, NATIONAL JOURNAL: Well, it started this weekend when Mitch McConnell was dealing with his Democratic counterpart Harry Reid and he felt like at one point on Saturday and Sunday afternoon, that he was not getting a real fair deal out of the majority leader. He felt like perhaps that the Democrat was slow walking him toward the fiscal cliff and maybe that he wasn't going to get the kinds of concessions that he hoped to out of the Senate majority leader.

And so, he called Joe Biden and those guys have a history. They went back, they helped cut a debt deal in 2011, and they helped extend the payroll tax cut that you were just talking about back in 2010. And he was able to start negotiations with the White House.

Joe Biden had been sidelined by President Obama for most of these talks. And he was able to kind of get things going and get a better deal out of the White House than he was going to be able to out of Senate Democrats.

ROMANS: Tell me a little bit about the division between the Republicans here. Speaker Boehner in favor of the bill, Eric Cantor did not.

Are we seeing a fundamental split in the leadership of the Republican Party?

FRATES: You know, that was a very interesting vote to watch and I think part of what the speaker was doing, because I think it's important for your viewers to know, the speaker rarely votes in most of the mundane matters of the House. The speaker doesn't vote. So, to take a vote is largely symbolic and I think this was I think the speaker saying that while I don't love everything about this deal, I stand with the Republicans in the bipartisanship of this deal and will do it.

A lot of folks looked at that and said, oh, is there a rift? Is this Eric Cantor, you know, positioning himself for a coup?

I think that's fairly unlikely. The House Speaker Boehner certainly has plenty of support going into his election tomorrow where he's expected to be reelected the speaker of the House when the 113th Congress convenes. And so, I think folks are reading a little into that.

But certainly it was Eric Cantor and being a little more conservative.

ROMANS: I mean, but the conservatives are angry. Many of them are very angry about this deal. We saw this tweet from Amy Kremer from the Tea Party Express. "I'm extremely -- sorry -- disgusted with what happened in the House last night. There will be consequences."

What will the blow back be, do you think?

FRATES: Well, in the short term, I don't think there's much at all. And certainly many folks believe that the Tea Party may be losing steam if anything under this new deal.

But remember, as Brianna pointed out just a few minutes ago, we're going to be back here again in March. You have the debt limit. The government maxed out its credit card December 31st. Treasury is now taking extraordinary measures for the government to pay its bills.

You have the continuing resolution which funds government. It also expires in March.

And you have the sequester delay, the across-the-board spending cuts that were supposed to take today, also expiring in March. We bought a two month pause on that just with this deal.

So there's a lot of negotiation going to happen again. Republicans believe that they have the upper hand and more leverage here than they might have otherwise.

ROMANS: Congressman Doggett yesterday told us it was the Valentine's Day live cliff and then the April Fool's cliff, you name it, every holiday coming up is going to have -- it's going to be your hallmark cliff holiday for the next year or so.

FRATES: The Easter cliff is coming.

ROMANS: Chris Frates, thanks for being buzz kill this morning.

(CROSSTALK)

ROMANS: Thanks, Chris.

FRATES: Thank you.

SAMBOLIN: It is 10 minutes past the hour.

One thing the House failed to do was vote on funding for victims of superstorm Sandy. Republican leaders wrapped up the session without voting on billions of dollars in aid for states that were ravaged by Sandy. So, guess what? It drew an angry response from New York area lawmakers.

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REP. CHARLIE RANGEL (D), NEW YORK: The leadership just walked away without the courtesy of saying it didn't have time to deal with the millions of people whose lives have been affected. But maybe, Mr. Speaker, if you could remind Americans that are just watching that maybe they should call and ask the Congress and ask the speaker, please reconsider.

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SAMBOLIN: New York Republican Congressman Peter King called the decision indefensible and a betrayal of trust. The Senate last week approved more than $60 billion in Sandy relief.

So, now, to the latest on Secretary of State Hillary Clinton's close call. Doctors are saying the blood clot could have been fatal, it could have caused a stroke or it could have led to seizures or epilepsy. She's being treated with blood thinners now and should make a full recovery.

Former President Bill Clinton and daughter Chelsea both seen visiting her at the New York Presbyterian Hospital. That was yesterday. The clot was found in the vein between the brain and the skull.

Chief medical correspondent and neurosurgeon, Dr. Sanjay Gupta, shows us exactly where.

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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: We know in Secretary Clinton's case, it is actually on the right side of the head, somewhere in this area. It's called the right transverse sinus.

Let me show you in this model here, I'll show you the left side, just for sake of demonstration here. If I remove the hemisphere of the brain here, you can actually see where the veins are. You see that blue area right in there, that is the area that is draining blood away from the brain and one of these veins in this area, that's where that clot actually has occurred.

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ROMANS: All right. Three weeks after cancer surgery, Venezuelan President Hugo Chavez's health said to be in a, quote, "delicate state". His vice president and successor Nicolas Maduro telling Spanish-language network Telesur complications have emerged from a respiratory infection and recovery is slow going.

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NICOLAS MADURO, VENEZUELAN VICE PRES. & HUGO CHAVEZ SUCCESSOR (via translator): We are facing a situation where the president is being attended to. He has had treatments, but it's a complicated situation. We're constantly hoping for positive progress. Sometimes he has slight improvements, and sometimes he has remained stable.

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ROMANS: Venezuelan leaders canceled a huge New Year's concert and asked the Venezuelan people to ring in the New Year by praying for Chavez.

No sign of leaking fuel yet from a barge that ran aground during a severe storm off of Alaska's coast. The Coast Guard saying there is no indication in the haul of the 256-foot-long Kulluk that it was breached and there's no evidence of a spill. The oil drilling rig was being towed back to its winter home in Seattle when the storm hit. The Coast Guard evacuated the 18-man crew Saturday night, the barge carrying 143,000 gallons of diesel fuel, 12,000 gallons of lube oil and hydraulic fuel.

SAMBOLIN: Thirteen minutes past the hour.

Refusing a flu shot could put you at risk of getting sick. We all know this. But for some Indiana nurses and hospital staff, it could cost them their jobs. We're going to tell you why, coming up next.

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SAMBOLIN: Welcome back to EARLY START. It is 16 minutes past the hour. Let's get you up-to-date.

It went down to the wire. The House voted last night to avoid going over the fiscal cliff. It approved the bill passed in the Senate, just hours before, raising taxes on the wealthiest 2 percent of Americans, but maintaining tax cuts for most people.

President Obama spoke shortly after the House voted.

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OBAMA: Today's agreement enshrines I think a principle into law that will remain in president as long as I'm president -- the deficit needs to be reduced in a way that's balanced. Everyone pays their fair share. Everyone does their part. That's how the economy works best. That's how we grow.

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SAMBOLIN: So, right after that, you're seeing the president there, he boarded Air Force One to fly to Hawaii, he wanted to finish his vacation. ROMANS: All right. Today, the governor of Pennsylvania will announce a lawsuit over the NCAA over the stiff sanctions it imposed on Penn State University in the wake of the Jerry Sandusky scandal. He's the former assistant football coach convicted of sexually abusing boys. The NCAA fined Penn State $60 million, stripped the football program of 14 seasons of victories under the legendary late head coach Joe Paterno.

SAMBOLIN: It's a retreat for the Connecticut attorney who sought to sue the state for $100 million over the school massacre in Newtown. The outcry against the potential lawsuit was so strong, Irving Pinsky has withdrawn it.

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IRVING PINSKY, WRONGFUL DEATH ATTORNEY: This is a horrible tragedy and if I offended anyone, I deeply apologize.

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SAMBOLIN: Offended a lot of people. Pinsky represents the parents of a 6-year-old student who survived the massacre. He may seek to file the suit at a later date. Pinsky will join us later this morning on "STARTING POINT", at 8:00.

ROMANS: Some rescuers found themselves in trouble on an icy lake outside Los Angeles. A sledder slid out of control and into the water. Several other people tried to pull him out, but many of them fell into water, too, and needed help. Thankfully everyone got out OK within about 10 minutes.

SAMBOLIN: Wow. And, of course, this is almost as much a part of New Year's Day as football and, of course, the Black Eyed Peas. About 800 people kicked off 2013 by jumping into Lake Minnetonka in Minnesota. The air temperature with the wind chill was around 17 below. So you can imagine the thrill those ice divers were feeling.

The 28th annual polar bear plunge in Decatur, Alabama, wasn't as chilly as Minnetonka. The air temperature was in the 50s there. But it wasn't exactly a steam bath, either. About 100 people jumped in this year.

ROMANS: Not in my list. If I had to do it, it would be Alabama, not Lake Minnetonka.

SAMBOLIN: You know, I considered that and I'm going to do it one day. Can you imagine?

ROMANS: You're a brave woman.

All right, 5:19 in the East. Time for your "Early Reads" -- your local news making national headlines.

First from "Denver Post" this morning, in Colorado, the champagne toast is so 2012. A group of New Year's Eve revelers were lighting up instead at a new marijuana club in Denver, Club 64, the first of its kind to open in Colorado since voters approved a ballot measure in November legalizing recreational use of pot. It's a private club open only to members who pay a 30 fee. You can't buy pot there, but you can bring it and pass it around.

And then there's this, from "The Elkhart Truth" from Elkhart, Indiana, get a flu shot or get fired. Eight employees at a hospital in Indiana face that choice and refuse to get vaccinated. One of the pink slip workers, oncology nurse Joyce Gingrich says getting the flu shot would have gone against her religious belief. But the hospital rejected her request from an exemption form. It's a new policy there. The hospital says it is intended to protect patients from potentially deadly illnesses. You get fired.

For an expanded look at all of our top stories, head to our blog, CNN.com/EarlyStart. And also follow us on Twitter and on Facebook. Just search EarlyStartCNN.

ROMANS: All right. A check of the first stock market reaction to the U.S. fiscal cliff deal ahead. I'm going to give you a hint --

SAMBOLIN: Thumbs up, thumbs down?

ROMANS: Double thumbs.

SAMBOLIN: Oh, nice.

ROMANS: Double thumbs up this morning.

Plus, four masked men break into Paris' flagship Apple Store. You will not believe -- you will not believe what they got away with.

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SAMBOLIN: Welcome back to EARLY START. Twenty-three minutes past the hour.

A brazen million dollar break-in at an Apple Store, this in Paris. London's "Telegraph" reports masked gun wielding suspects forced their way into the store through an employee entrance. This was in New Year's Eve. They overpowered a security guard and janitor. A total of four or five suspects were involved. They loaded boxes of loot on to a truck.

The heist happened about three hours after the store had closed and it happened under the nose of riot police who were patrolling the Champs- Elysees nearby. Oh my goodness!

All right. Let's mind your business this morning.

World markets are rallying after Congress hammered out the deal on the fiscal cliff late last night. Christine has the details.

And what we can expect from the markets today?

ROMANS: I think you can expect a rally. I think the markets, world markets and stock futures this morning so far like what they've seen from the resolution of that deal. S&P futures up 2.5 percent. European markets, Asian markets are rallying. It's a good way to start 2013, quite frankly, after a very strong 2012 for stocks.

As I told you, the S&P gained 13.5 percent last year. It's the best indicator for the stock part of your 401(k). So, folks, you can open the envelope and look, or click on the email and look at your 401(k).

The Dow gained more than 7 percent last year. Tech heavy NASDAQ up 16 percent. Stock futures up this high will likely see a rally for sure in markets today.

Whether it lasts is another question because as, you know, part of the fiscal cliff was averted, but there are still big issues not addressed in the bill. One was spending cuts, the sequester. That issue delayed by two months. And also, there is nothing about the debt ceiling either. So, we know that we're setting ourselves up for another fight here.

The treasury secretary says the government has officially reached the $16.394 trillion debt limit.

Some analysts are also warning gridlock in Washington could cause more problems. I want to show you what an analysis to the effects has said, quote, "The process was so chaotic that the outcome so unsatisfactory that we're likely to see a further U.S. downgrade at some point."

Also worth mentioning, we don't have a continuing budget resolution. Deadline for that is March 27th.

So, you see these little cliffs all along the way.

Let's put this in perspective, though. We spoke to Ned Riley, CEO of Riley Asset Management. He's very positive for the year. Listen.

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NED RILEY, CHAIRMAN, RILEY ASSET MANAGEMENT: If I put this fiscal cliff in the context of, say, all of the Godzillas of the world or the armageddons of the world that have been portrayed, I would say I'd have to put it in about the 13th position. Clearly, the financial crisis that we had in 2009 and 2010 was so far much bigger than what we are confronted with today in this fiscal cliff.

(END VIDEO CLIP)

ROMANS: So, some perspective from Ned Riley who is very bullish on the market this year and also, Zoraida, bullish on things for today. It looks like it will be a good day for stocks. We'll follow it for you.

We're still four hours away from the opening bell. Things can change. But the indications are markets, investors very pleased that this is out of the way.

SAMBOLIN: I think a lot of people are happy to hear that but with all of this gloom and doom, this impending gloom and doom, you wonder long term what's going to happen.

ROMANS: You know, we have a budget process in this country and a legislative in the country that has set us up for 11th hour conflict one after the other after the other, and I think that's going to be a hallmark of this year.

SAMBOLIN: Too bad.

ROMANS: Yes.

SAMBOLIN: All right. Twenty-seven past the hour.

When public schools in Marlboro, New Jersey, open their doors this morning, there will be a major change, folks -- armed security guards. That's coming up next.

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