Return to Transcripts main page


House Passes Fiscal Cliff Deal; U.S. Markets Poised For Rally; 2012: A Very Good Year For Stocks; A Done Deal; No Evidence Of A Spill Yet; Itheft; Storm Back At Work After Grill Incident; Orange Bowl; Rose Bowl; Fired For Refusing Flu Shot; New Jersey District Puts Cops In All Schools; Chaotic Ice Rescue At Lake

Aired January 2, 2013 - 07:30   ET



JOHN BERMAN, CNN ANCHOR: Welcome back to STARTING POINT, everyone. It is 7:30 on the east coast. We are back from the brink. The House finally passed the Senate's fiscal cliff bill last night. Meaning millions of taxpayers and small business owners can take a deep breath because the Bush-era tax cuts are now permanently on the books for most people.

The final vote in the House last night, 257 for, 167 against and you maybe interested to know this, John Boehner, the House speaker was among the yes votes. House speakers don't always vote unless it's a big deal, unless they want to get on the record with something.


BERMAN: I.e., last night, he clearly did. It will be interesting to find out why. Here is what is in the deal so you all know. No tax hikes for couples earning less than $450,000 a year and couples making over $300,000 a year get their itemized deductions capped. It means they are going to pay more.

Two million Americans will see their unemployment benefits extended for a year and that frustrating costly alternative minimum tax gets adjusted permanently for inflation.

BALDWIN: Now the measure doesn't deal with the divisive issue of spending cuts. We're going to be talking about that because lawmakers decided to kick that on down the road for the next two months.

And then there is this. We talked a lot about this. What was that, last year, two years ago, debt ceiling, $16.4 trillion, blown through it again. It has to be raised so we can pay our bills, and the president doesn't want another one of these bruising debates. Here he was.

Apologies -- basically saying we need to negotiate, we need a balanced approach, don't need to be doing this again and again. Let's talk to Brianna Keilar. She is our White House correspondent joining us this morning in Washington. And just run through, Brianna, what is not in this deal? BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, the big things that are not in this deal and that you can say really the can was kicked down the road on were the spending cuts, because we now have two months where the spending cuts are now not an issue. That's been delayed.

But come two months, they come calling again, and they absolutely have to be dealt with if Congress doesn't want to see them go into place, and the other thing, what you mentioned, Brooke, the debt ceiling. We have gone past it. That said, the Treasury Department is able to kind of move money around so we don't hit the debt ceiling.

As for right now, the U.S. is making good on the debts that it owes, but at a certain point, the ability to do that runs out that will be late February, early March, and Congress will absolutely have to deal with that or the U.S. defaults.

Now, the things that Congress and the White House want to do include dealing with long-term deficit reduction, entitlement reforms and Social Security and Medicare and tax reform, those are big things and they will be attached to those other things that have the hard and fast deadlines.

BALDWIN: OK, Brianna Keilar, thank you. And the president headed to Hawaii eventually will be signing this. I want to talk about the markets because obviously this is going to reverberate here in the states when the markets open in an hour and a half, but also already globally.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It will be a good day. Stock futures are up sharply. Dow futures are up 175 points. They have been up as much as 200 points so they are off their highs, but still very strong.

And European markets and Asian marks rallying strongly here right now too. So the rest of the world is telling us they like this resolution from the U.S. and the fiscal cliff deal. Keep in mind, an awful lot to deal do from here on out. That's where the perils lie for stock investors.

So your 401(k) is probably going to have a good morning. Sometimes we see these rallies fade. I'm not predicting that. I'm just saying, you know, there an awful lot ahead of us to get in store.

Also in 2013, the CNN Money survey of money managers finds a more defensive year. A grind higher, maybe 4.5 percent is the return you will see on stock investments for the next year because of all of these budget fights that we have ahead.

The S&P 500 gained a nearly 13.5 percent last year so 4.5 percent run this year, we'll take it, but it wouldn't be something like double digits that you saw last year.

BERMAN: I want to bring people back to yesterday. When it looked like this deal might fall apart late yesterday afternoon, there are a lot of people saying today was going to be a disaster on the markets. You're looking at those TARP level drops of 600, 700 points.

ROMANS: When we talk about TARP level drops, remember, there was a bank bailout. Put together, Congress didn't take it, and the stock market reacted wildly. Huge declines and we've talked to members of Congress and said that memory is fresh in their minds.

They didn't want to hurt people again with having their 401(k) get slammed by uncertainty in Congress. We have a lot of things to get through though. I mean, I feel like there are going to be many more morning in the first half of the year where we'll talk about what are futures doing. The Congress is it the 11th hour again.

BALDWIN: Let's talk to a member of Congress. Christine Romans, thank you. Someone who is at the capital very, very late last night, he was up in the wee hours with us this morning, Congresswoman Marsha Blackburn. She is a Republican from Tennessee. She voted against the bill.

Congresswoman, good morning. Good to see you again.


BALDWIN: Before we get to why the no vote, take us behind those closed doors and give me some details that have not come out yet. I mean, what was the room like?

BLACKBURN: We had a very spirited debate, as you can well imagine, but it was healthy, it was good and members of the House, Republican members of the House decided was we are done with kicking this can down the road. It will happen no more.

We grabbed that can, and that can is called spending cuts, it is what our constituents want to see. It's what the people in this country are demanding and as we move forward, we are going to be ready to make those cuts.

Are you going to -- you know, we think every agency in the federal government should do what house Republicans voted to do and that was to cut our budgets 11 percent --

BALDWIN: Let me jump in. I want to get to the can here in a moment. Because others are saying, heck, yes, the can has been kicked down the road because we're talking about this again and again and again. I want to talk to you about spirited debate. Was there pounding of fists? Shouting? What did Speaker Boehner ultimately say for this thing to get done?

BLACKBURN: It was an incredibly respectful debate and what the speaker and the House leadership did was to let the House work its will. As you saw from the vote totals, there were Democrats and Republicans for and against it.

The same that had happened when we passed the tax extenders bill, passing tax cuts for everybody on August 1st. Bear in mind, whether it was reconciliation on May 10th. Tax extenders on the 1st, the pathway for tax reform on August 2nd or on September 19th, the defense sequester. We have taken these actions.

All that was on Harry Reid's desk, this was a crisis of Harry Reid's making. It was because of the inaction in the Senate that we found ourselves here on New Year's Eve and New Year's Day taking these actions, so the House is saying no more.

BERMAN: One last question.

BLACKBURN: We are not going to put up with this.

BERMAN: One last question about the raw politics of this because as you, recent tradition in the Republican caucus has been on something called the Hastert Rule, which means that the speaker wouldn't take something to the floor unless it had majority of the majority. This bill did not.

A majority of House Republicans voted against this bill, which is awfully perilous for a House speaker. So I'll ask you this, before Christmas, you told us you didn't think Speaker Boehner was in jeopardy.

You do not think there was any chance he would lose his speakership. Has that position changed? Is he in a worse position in the caucus now than he was yesterday?

BLACKBURN: No, I think that people appreciated the fact that he allowed the House to work is will and he allowed members to vote. Look, we're all elected by the 660,000 people in our district overwhelmingly. People have said, all right, you are to get the spending under control.

You are to put this nation back on the pathway to fiscal health and I think that's why so many members of the House, Democrats and Republicans, have said the spending has to stop.

House Republicans, so many of us that are the conservatives in the House have said we're grabbing that can. It is called deficit and debt reduction, and it is going to be a component of every single battle that we have.

BALDWIN: Back to that can, Congresswoman. Let me jump in and ask you this. We have debt ceiling last week of February. We have sequester March 2nd. Continuing budget resolution March 27th, the president coming out last night basically saying, look, we have to get along. We need to negotiate. Take a listen here.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they have already racked up through the laws they already passed.

Let me repeat, we can't pay bills we've already incurred. If Congress refuses to give the United States government the ability the pay these bills on time, the consequences for the entire global economy would be catastrophic, far worse than the impact of a fiscal cliff.


BALDWIN: Are the days, Congresswoman, of grand bargains and then compromise -- is that a thing of the past? I mean, is this sort of the harbinger of things we will see in upcoming weeks here? Is compromise really a dirty word?

BLACKBURN: Compromise is not a dirty word, but what is, is back room deals. The era of back room deals are over. This administration needs to realize they cannot continue to spend money they've already spent. Those sequester dollars are already spent.

That was the last debt ceiling hike, so, yes, we are going to have very spirited, very thoughtful debates on cutting what this government spends and right sizes this government. We have a government.

We have bureaucracies. We have programs that have outlived their usefulness. We have trust funds that need to be stabilized in Medicare and Social Security. You know, we got to get the job done.

BERMAN: Congresswoman, you did just hear the president say he was not going to negotiate, not trade, not barter on the debt ceiling vote. Are you willing to give him the debt ceiling and fight about the other issues later on?

BLACKBURN: We're going to continue to fight about the spending and I hope it's going to be a very respectful debate. The people of this country have elected us to protect the purse. Taxpayers are sick and tired of having money spent, money that they don't have.

Spent on programs they don't want, and the president may say this about paying the bills today, but what about my grandchildren? Who the president is putting this on their credit card? Our children now have $50,000 of federal debt.

BALDWIN: OK, I hear spirited often here. Spirited debate upcoming in Washington. We'll watch for it. I'm sure we'll continue talking to you. Congresswoman Marsha Blackburn, we appreciate you this morning.

BLACKBURN: Thank you.

BERMAN: Both members, Steve Israel and Marsha Blackburn, a lot of energy after being up late last night.

All right, ahead on STARTING POINT, she suffered serious burns to her face, hands, and arms, but she is not staying in the shadows. The triumphant return of sportscaster, Hanna Storm coming up next.

BALDWIN: You should think twice the next time are you grilling out.

Also, get a flu shot or get fired? That is a choice that a group of hospital workers faced and they got the ax. Can the hospital get away with that? We want to ask that question. It is 42 minutes past the hour and you are watching STARTING POINT.


BALDWIN: A quarter until the top of the hour. Welcome back to STARTING POINT. Some of the top stories we're looking at this morning. No sign of leaking fuel, yet, from this barge that ran aground during a severe storm off Alaska's coast.

The Coast Guard saying there is no indication the hull of this 266- foot long kulluk was breached. No evidence they say of a spill. This oil drilling rig was being towed back to its winter home in Seattle when the storm hit. The Coast Guard evacuated the rig's 18-man crew on Saturday night. The barge was carrying 143,000 gallons of diesel fuel and 12,000 gallons of lube, oil, and hydraulic fuel.

BERMAN: A brazen million dollar breaking at the Apple store in Paris. London's "Telegraph" reports masked gun wielding suspects forced their way into the store through an employee entrance on New Year's Eve and overpowered a security guard and janitor.

A total of four or five suspects involved loading boxes of loot onto a truck. The heist happened about three hours after the store closed and it happened under the nose of riot police who are patrolling the (inaudible) nearby.

BALDWIN: This is an amazing story. Hanna Storm, she is working again, less than a month after a propane grill at her home exploded. She was working the grill, trying to make dinner for her family, trying to relight the flame. The sportscaster talked to ABC News about this whole thing.


HANNAH STORM, ESPN ANCHOR: I didn't know what to do, other than I'm left-handed, reach and get the shirt off me as quickly as possible. So that's why my hand is so badly damaged. I yelled inside to my 15- year-old daughter in the kitchen, mommy is on fire, you have to call 911.


BALDWIN: Can you imagine? Look at her. Storm suffered serious burns. You saw the bandage on her left hand. She also lost eyebrows, eyelashes, a lot of her hair, but yesterday, take a look. It looked pretty great to me, false eyelashes, hair extensions. She was back at work hosting --

BERMAN: A lot of us grill a lot.

BALDWIN: Just this weekend.

BERMAN: You do things you shouldn't to. Be careful.

BALDWIN: Think twice.

BERMAN: All right, you saw Hannah Storm at the Rose Bowl. Bowl season continues tonight with Louisville battling Florida Gators in the Sugar Bowl. BALDWIN: Huge party in NOLA. I was there yesterday.

BERMAN: Yesterday, the big day to go bowling. Florida State over powering Northern Illinois in the Orange Bowl, no contest there, the final score is 31-10.

In the grand daddy of them all, the Rose Bowl, this was a bruising battle on the ground. Stanford beat Wisconsin 20-14, the first Rose Bowl win in 40 years. It's Wisconsin's third straight Rose Bowl loss.

BALDWIN: Eight hospital workers in Indiana have been fired after they refused to get flu shots. One of the pink slips here, an oncology nurse says getting vaccinated would violate her religious beliefs. The hospital rejected her request. The new policy they say protects patients from potentially deadly illness. I have never heard of something like that.

BERMAN: No, vaccines are controversial subjects for parents, for health care workers all over the country. All right, the Sandy Hook School shooting in Connecticut inspired a security change in New Jersey.

Starting today, there will be armed and uniformed police officers at every school, every school in Marlboro Township. Leaders say this will be the new normal until they come up with a permanent plan for better security. Parents there divided.


UNIDENTIFIED MALE: I think will be a deterrent of some sort, better than we have now and probably work.

UNIDENTIFIED FEMALE: The problem is bigger than just putting somebody at the front door.


BERMAN: Last week, New Jersey Governor Chris Christie said posting armed guards outside classrooms won't make them safer or encourage learning.

BALDWIN: Ahead here on STARTING POINT, caught on camera, this botched rescue as people fall one after another after another off this broken ice, trying to save someone sledding down the hill. One man who was able to get a rope helped save the victims. The whole thing caught on camera thanks to his wife. You are watching STARTING POINT.


BALDWIN: A couple of rescuers actually found themselves in trouble on an icy lake just outside of Los Angeles. Take a look at this video here, how the whole thing started. You can almost hear the cracking, the ice breaking, the sledder slid down this hill out of control, boom, right into the freezing cold water.

Couple of other people walking over trying to pull him out, but then many of them one after another after another falling in, ice breaking, obviously everyone needing help. One person, Mickey Herman and his wife, they were on the shore when they watched all of this happening right in front of their eyes.

Mickey was able to toss a rope into the lake, helped call 911 and after something like 9 minutes everyone got out of the lake and a-OK. Mickey is with me from Los Angeles.

Mickey, good morning. You know, I read that you saw this thin ice and you said I'm not getting anywhere near it. So take me back to Christmas Day and what started this whole thing?

MICKEY HERMAN: Well, what happened, we got a up Christmas morning, decided to take a drive up to Wrightwood, California, and we came up on this lake and there was maybe as many as 500 people on the shore, and you know, partly out on the ice.

And we were watching them sled down the hill and out onto the ice, they kept getting further and further, we pulled over and parked and my wife had gotten a new camera for Christmas and she pulled it out and begin to film, playing with the camera.

Kind of getting used to it and what have you and all of a sudden we saw the guy go across the ice and into the water and as you can see it was obvious he couldn't swim.

BALDWIN: So you just so happen or your wife, just so happened to be rolling on this, how ultimately -- what did you do? I understand you threw a rope to one of the guys in the water?

HERMAN: Yes, we saw him go in the water. I remembered I had about a 25-foot rope under the seat of my car. I ran up to the car, got the rope, ran back down, uncoiled it, threw it out and coming 7 feet short from getting the rope to the guy. At that point other people started running over the cargo straps tying them to the rope and I ran up to the top of the hill and called 911.

BERMAN: Mickey, were there any warning signs, anyone there telling people they shouldn't go on the ice? Looking at this video it looks like a textbook example of what not to do when someone's falling through the ice, people running over to get closer to the thin ice.

HERMAN: They tell me that there are signs posted around the lake. Where we were, we did not see any. Yes, they were, they were coming across the lake toward the thinner ice which there's no way -- as you can see the wrong way to go. They were rescued from the shore.

BALDWIN: It sounds like these people are lucky you happened to have the rope in your car. Mickey Herman, thank you so much. Apparently, the lake has been closed for obvious reasons but everyone's OK.

BERMAN: The good news everyone is OK there. Thank you for being with us, Mickey.

BALDWIN: Thank you. BERMAN: Now that we have a fiscal cliff reprieve, what about those spending cuts? What about the debt ceiling? Can the president avoid another bruising battle with Republicans? We'll ask Jen Psaki, the traveling press secretary for President Obama's re-election campaign.

BALDWIN: Also ahead this morning, a potential multimillion-dollar lawsuit because of the Newtown tragedy. Coming up, we'll talk to the attorney behind this. You won't want to miss this conversation. It is just about 8:00 on the east coast, you're watching STARTING POINT.


BERMAN: Our STARTING POINT, a late night deal to avert the fiscal cliff. The House passes a bill with their backs up against the wall. Many lawmakers say they saw no choice.


UNIDENTIFIED MALE: If we don't pass this tonight, you're looking at a $4 trillion tax increase and you're looking at financial chaos.


BERMAN: The middle class spared from major tax hikes and spending cuts, but there's still the issue of the debt ceiling and the president has a stern warning for Congress.


PRESIDENT OBAMA: I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up.


BERMAN: This morning the political fallout, what this all means for you and what's next.

We have a packed show ahead, we're joined by Jen Psaki who is President Obama's traveling press secretary for re-election campaign, economist Diane Swonk as well as Margaret Hoover who served in the Bush White House, John Avlon with the "Daily Beast," and Connecticut Attorney Irving Pinsky.

BALDWIN: Good morning, I'm Brooke Baldwin. It is Wednesday, January 2nd, a special fiscal cliff addiction, we're over it, STARTING POINT roll it, starts right now.

Here we go, full table this morning, our panel today, we have Mr. Richard Socarides, writer, and former senior adviser to President Clinton. Also Chrystia Freeland, digital editor, Thomson Reuters, welcome and Will Cain --