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American Morning

Interview with Carl Paladino, New York Gubernatorial Candidate; Republican Party Struggles to Get Behind Tea Party Candidates; Breaking Ranks with Obama

Aired September 16, 2010 - 07:00   ET

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

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Money and power with 47 days until Election Day, more Democrats in shaky seats splitting with the president over the Bush tax cuts.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They want to hold these middle class tax cuts hostage until they get an additional tax cut for the wealthiest 2 percent of Americans.

UNIDENTIFIED FEMALE: Is it a fight we can afford right now? Next on the Most News in the Morning.

(END VIDEO CLIP)

KIRAN CHETRY, CNN ANCHOR: And good morning to you. Glad you're with us on this Thursday. It's September 16th. I'm Kiran Chetry.

DREW GRIFFIN, CNN GUEST ANCHOR: I'm Drew Griffin. John Roberts has the morning off. We're going to have the latest on the Democrats and President Obama in a moment, but first the top stories.

Craigslist promising to keep it clean. The website tells a House committee that the "adult services" section is gone for good after immense pressure from authorities and an investigation by our own Amber Lyon. She will join us with the highlights of the hearing.

CHETRY: He said it's mad as hell and he's not going to take it anymore. Tea party candidate Carl Paladino, the Republican nominee for governor of New York, promises to bring it back to Albany if he wins in November.

One politician compared him to Hitler. Others say he's unfit to lead. Well, he's going to join us so we can hear from him. Carl Paladino, 7:15 eastern.

GRIFFIN: Looking forward to that. And Catholic women ordained as priests? Yes, the church calls it a great crime, the same word it uses to describe pedophilia. But some American women aren't waiting for the pope's blessing to pursue a higher calling. Carol Costello is going to join us with an "A.M." original just ahead.

CHETRY: All right, one minute past the hour right now. And first up, your money and your taxes. When it comes to tax cuts, it's getting tough for the president to figure out just who's on his side.

Thirty-one House Democrats have now broken from the ranks, each of them signing a letter to their congressional leaders opposing the president's plan to extend the Bush tax cuts for the middle class only and not for the top-income earners. They want everyone to continue to get tax breaks.

It's your paycheck that's up for grabs. And if Congress does nothing between now and December, Americans earning between $50,000 and $75,000 will get socked by a tax hike of more than $1,100 bucks on average, more than $100,000, and it's $3,600 added to your taxes.

Dan Lothian is live at the White House. So how does the president navigate this defection among these Democrats, many of them up for reelection in tough districts, and say, you know what, this isn't the time to be raising taxes on anyone?

DAN LOTHIAN, CNN SENIOR WHITE CORRESPONDENT: That's right, you know, this does present yet another challenge for the administration because largely, up to now, how this debate has been framed is, this is what Democrats are trying to do and over here, this is what Republicans are trying to block or hold hostage. That's the terminology that we're hearing.

But now the president is having to deal with descent within his own party. You're hearing now from Representative Jim Marshall of Georgia who says, quote, "We should not be raising taxes in the middle of a recession." Representative Travis Childers saying, quote, "It is essential that we keep things as they are in the short term."

You have these moderate and conservative Democrats who are very concerned in the midterm election that if taxes are raised it will only hurt some of the economic progress that we've seen so far.

But, you know, the White House is showing no signs of compromise here. White House spokesman Robert Gibbs pointing out that, listen, this is a big Democratic Party with different views much like Republicans in that the country simply cannot afford to extend these tax breaks for Americans who are making, or couples making more than $250,000, that lawmakers need to move forward on providing relief for the people who need it the most, and those are middle class Americans.

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA: Right now, we could decide to extend tax relief for the middle class. Right now, we could decide that every American household would receive a tax cut on the first $250,000 of their income.

But once again, the leaders across the aisle are saying no. They want to hold these middle class tax cuts hostage until they get an additional tax cut for the wealthiest two percent of Americans.

(END VIDEO CLIP)

LOTHIAN: So, you have these tax cuts, the jobs bill that is expected to be signed today. You hear the president talk about proposals to provide jobs through infrastructure investment. All of this designed for, number one, job creation, number two, to show that this administration is doing everything it can to turn this ailing economy around. Drew, Kiran?

CHETRY: We have just shown on the graphic, what it means come next year, if in fact these are not passed, talking about hikes for various income earners. Where does it stand right now, the actual measure?

LOTHIAN: Well, we still don't know what will happen. I mean, yes, in the House, you have the House leadership saying that they very much support what the president is doing. In the Senate, it does appear that they're also supporting what the president is pushing, which is providing relief for middle class Americans, not for those couples making more than $250,000.

I mean, clearly, the administration believing this is something that can't be afforded right now -- $700 billion would have to be borrowed. That's what the White House says, if you provide tax relief for these wealthier Americans.

So the president is hoping that Congress will move forward and provide the relief for the people who need it the most.

CHETRY: All right, Dan Lothian for us this morning at the White House. Thanks so much.

And doming up in the next half hour of "AMERICAN MORNING," we're going to be joined by one of the 31 house Democrats we've been talking about, those who want the Bush tax cuts to be extended for everyone. Congressman Gary Peters of Michigan will tell us why at 7:40 eastern.

GRIFFIN: In other news, we have an "A.M." follow up. Craigslist now coming clean about the epidemic of child sex trafficking on the web. An official with craigslist told a House panel that it's "adult services" gone and won't come back. But of course there's fear that the ads will and already have migrated to other websites.

(BEGIN VIDEO CLIP)

TINA FRUNDT, FOUNDER COURTNEY'S HOUSE: The Internet has played a big part in sex traffic of every client, both boys and girls. Not only Craigslist, every child we have has been sold on Craigslist, averaging ages of 11 to 17.

(END VIDEO CLIP)

GRIFFIN: Amber Lyon joins us who investigated Craigslist. And Amber, what about the concern it's going to just migrate to other sites. It's almost impossible to monitor the internet, isn't it?

AMBER LYON, CNN CORRESPONDENT: Yes, that was another point brought up in the meeting yesterday, Drew was that these sex sites have moved to other sites, one of those sites being Backpage.com. We talked to several sources in the business who said we're not going to go on another section of Craigslist, we're just going to move to another site altogether.

And that's another question that Craigslist brought up at the meeting, which was a good point, that while people have been criticizing them for not working with the advocates and law enforcement, attorneys generals, some of these other sites like Backpage.com really have not had any involvement in working to solve this problem, Drew.

GRIFFIN: So is Congress looking to do anything regulation-wise in terms of, I don't know, put something kind of restraints on some of these websites?

LYON: They didn't bring anything up about that. But what they really talked about doing was giving more money to law enforcement so that they can have more officers screening the sites, looking for these ads, code words that it could be a minor, and really going after the demand here, the Johns and the pimps.

GRIFFIN: All right, Amber Lyon joining us from Washington. Thanks, Amber.

CHETRY: Other stories new this morning -- two more bodies have been found buried in the wrong graves at Arlington National Cemetery, the army making this discovery after following up on its investigation of mismanagement at the burial ground. A report issued back in June said that thousands of military graves could be affected.

GRIFFIN: Just minutes ago, Pope Benedict getting a royal welcome from Queen Elizabeth after arriving for a four day visit to Britain, the first stop in Scotland. The Pope's going to celebrate mass at a public park in Glasgow later today. It's the first Papal trip to Britain in 28 years, the first ever state visit by a Pope.

CHETRY: Well, do you bank with Chase or do you bank online? Well, there's more trouble this morning. Chase's website is down again after crashed earlier this week. ATMs and telephone banking services are not affected, according to the company. The company also saying it will work with Chase customers who had bill payment deadlines they couldn't meet because of the Internet outage.

GRIFFIN: Americans like their discount airlines the best, not because of low fares. A new survey said passengers consistently ranked those carriers higher in quality and service. "USA Today" ranked the best for quality and service, JetBlue topped by Hawaiian Air.

CHETRY: Because they're going to Hawaii.

GRIFFIN: Who's sad about that? Southwest, Frontier Airlines, and AirTran all on the top spots.

CHETRY: If you're JetBlue, you never know what's going to happen on your flight.

It's nine minutes after the hour.

(WEATHER BREAK)

CHETRY: Well, he says he's mad as hell, and he's bringing a baseball bat with him to Albany, the state capital of New York, if he becomes the next governor. It's tea party candidate Carl Paladino. He's offending some, apologizing to no one, and he's joining us live.

It's ten minutes past the hour.

(COMMERCIAL BREAK)

GRIFFIN: Welcome back to the Most News in the Morning. Carl Paladino says he's bringing his baseball bat to Albany next year if he's elected as governor of New York. And he sounds like he has plans to use it.

CHETRY: He's a millionaire developer, anything but subtle, and he once proposed using privileges to house people on welfare. He's the Republican candidate for governor of New York after crushing Rick Lazio Tuesday night in the gubernatorial primary. Let's hear a little bit from him.

(BEGIN VIDEO CLIP)

CARL PALADINO, (R) NEW YORK GOVERNOR CANDIDATE: If we've learned anything tonight, it's that New Yorkers are as mad as hell.

(APPLAUSE)

And we're not going to take it anymore.

(APPLAUSE)

(END VIDEO CLIP)

CHETRY: Carl Paladino, the Republican candidate of New York joins us from buffalo this morning. Good to see you, thanks for coming in.

PALADINO: Good morning, thank you.

CHETRY: You promised to take the baseball bat to Albany. If you become governor, within the confines of your office, how do you propose as governor to actually get anything done up there?

PALADINO: Well, the baseball bat is a metaphor for the people. And by use of transparency, a spotlight, and the executive strong constitution of the state of New York, we will do it.

GRIFFIN: Mr. Paladino, you're being criticized from the left, as you might expect. But this is a left-leaning state. I know it's a different kind of a political year this year.

But you're vehemently against abortion, right? Even in cases of incest or rape. You've been labeled with sending around some racist jokes in your past. And you proposed this prison for welfare recipients.

I mean, you can really get elected in New York State with those kind of -- I wouldn't even call them conservative views -- they're far right viewpoints.

PALADINO: Well, first of all, the remarks that they make are way out of bounds. I never proposed putting welfare people in prisons. I proposed using an old facility, an old tuberculosis facility, and restoring and taking down the barbed wire, and it's nothing more or less like a dormitory-style of campus --

GRIFFIN: But would you be housing welfare recipients?

PALADINO: Absolutely. Yes, we would be housing them, when they're in our rural program under our Dignity Corps. The Dignity Corps is very similar to the Civilian Conservation Corps that FDR had proposed or that FDR implemented many, many years ago. That Dignity Corps would have a rural section, those that want to work out in the forests and in the rural areas would have to be housed.

And we -- and I propose, instead of building new facilities, that we have facilities, and one in particular, up near Plattsburgh, New York, that's an old tuberculosis center that could be converted by just simply taking down the barbed wire and has got all the facilities from feeding, for sports. It has a ton of facilities. That's all I said.

The girl picked it up there and she made -- she made a -- she linked up the word "welfare" and "prison" and she put that into a story that made it sound like I'm sending welfare people to prison. How ridiculous is that -- the best way the left does.

CHETRY: All right. So, you're also making a little bit of heat from the right as well, at least some former Republican leaders, including Senator Alfonse D'Amato. He penned an open letter to you and in it he said you're a divisive figure simply not fit to leave. He said that anger overcame reason and enabled a, quote, "fringe element" to choose the Republican nominee. What do say to people who --

PALADINO: Is that right?

CHETRY: -- you're divisive, you're fringe?

PALADINO: Al D'Amato is a disgrace. He left the Republican Party a couple of years back when he became a lobbyist. It's all about money right now. He has access with Andrew Cuomo. It's very -- it's a very simple story, and I'm sad that the Republican Party hasn't called him out on this.

The same goes for McCall and Koch. These people are lobbyists now. They have access.

I'm the one that's talking about getting ready of the pay-to- play clubs. And, obviously, I'm a threat to them, and that's why you're hearing that nonsense out of a guy like D'Amato. He is no great grandfather of the Republican Party. He's acting just as a money-grabbing, money-hungry lobbyist.

GRIFFIN: Old school politics would say, hey, you know, you won the Republican primary by going conservative. Now, you should be moving back to the center if you want a chance to have that state. Sounds like you're not moving anywhere.

PALADINO: I think you made a remark earlier that, you know, Carl Paladino was maybe appealing to just a part of our -- the people here and just to the right of the Republican. There are no longer parties in people's minds.

The people of today, as illustrated in many cases by the out- flowing of emotion on this -- on this election, this primary, the people have come out and they've spoken. And they've said enough of the ruling parties. We want to be individually vetted to all the candidates. We'll make up our own minds. Stop telling us who we're going to vote for. Stop telling us who's going to be our elected officials because you've disappointed us time and time again.

A $15 billion budget in the state of New York -- excuse me, $15 billion in tax increases in the state of New York over the last two years, and they couldn't find one state employee to lay off out of 298,341 employees. This is a -- this is a culture that's off the page. They should not be in power. They should not be trying to lead people who want the state of New York tax dollars to go for their benefit and not every Tom, Dick and Harry from anywhere else.

CHETRY: You know, in some cases, it is easier said than done. You've proposed or promised that at least that you could cut the budget in New York by 20 percent, but at the same time, also cut taxes by 10 percent. How would you do that?

PALADINO: The 20 percent represents getting rid of a number of agencies which are unnecessary in the 21st century. For sure, bringing down the Medicaid optional benefits which make us the highest cost by 100 percent over the next highest, which is California.

CHETRY: But how do you run on that figure, you're going to cut services, you're going to cut Medicaid? I mean, that -- those are wining strategies in a blue state.

PALADINO: No, it's not cutting core services. It's cutting the nonsense. It's cutting a lot of waste fraud and abuse. Take, for instance, an elderly person, putting them in a nursing home costs $75,000 a year. But housing them in a home where a family member is paid to maintain him could cost as low as $25,000 a year. Why aren't we moving in that direction?

GRIFFIN: All right.

PALADINO: That's an example of some of the things.

GRIFFIN: Carl Paladino, we thank you for joining us. Good luck in the election coming up. I'm sure we'll be talking to you more as this election really kicks into high gear. Thanks again.

PALADINO: I appreciate it. Thank you.

CHETRY: Thanks so much.

Well, still ahead: seeking federal help for San Bruno. California Governor Arnold Schwarzenegger sent a letter to President Obama, requesting a disaster declaration after that deadly gas explosion and inferno that killed four people. Three are still missing, and destroyed close to 40 homes last week. The governor toured the disaster zone and saw the massive crater and incinerated homes for the first time yesterday.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If it was a fault of somebody or problem or something that has not been maintained or whatever it may be, you will know. There is no hiding of information, I can guarantee you that.

(END VIDEO CLIP)

GRIFFIN: To Louisiana now: thousands of dead fish being found in Plaquemines Parish. Look at these pictures. Wow. It didn't take long for people to start pointing fingers at BP. But hold on -- state wildlife officials say it looks like low levels of oxygen during low tide caused this.

CHETRY: Wow.

Shaq on the attack. Shaquille O'Neal fighting a lawsuit from a personal computer assistant, accusing him of stealing personal information and racketeering. The suit claims that Shaq hacked in to voice mails and use law enforcement contacts to frame the worker for a possession of child porn because he had proof that Shaq cheated on his wife with several different women. O'Neal's attorney says the claims are complete and utter fabrication.

GRIFFIN: Personal computer assistant, a different work.

And the Greenville Drive and the Lakewood Blue Claws slugged it out, literally. This is the South Atlantic League Championship in Greenville, South Carolina, started with a collision at the plate. Then a Greenville runner was out and started jawing with that guy, the pitcher. Uh-oh -- fist to cuffs and the bench is clear. In the end, the Blue Claws win, six-to-one. They'll play again. Tickets online.

CHETRY: Congrats, Blue Claws.

Well, coming up: New York is debating whether or not it's a good idea to ban smoking altogether in the city outside. Details of the anti-smoking crusade just ahead.

It's 23 minutes past the hour.

(COMMERCIAL BREAK)

(MUSIC)

GRIFFIN: It's hot in here.

CHETRY: Do we need to see that already? It's September.

GRIFFIN: It's time. It's time.

CHETRY: You bought all your Christmas presents all wrapped up, ready? Ready to go?

GRIFFIN: Yes.

CHETRY: Welcome back to the Most News in the Morning.

Have yourself a boring little Christmas. The head of the largest retail chain in the world says socks and underwear are the hot items this year.

GRIFFIN: Underwear is always hot.

The new president and CEO of Wal-Mart says his stores are focusing on more practical every day gifts this holiday season like socks and undies, with employment still high and the economy still on shaky ground.

CHETRY: There you go.

GRIFFIN: "Minding Your Business" now, more than 1 million toys from Chuck E. Cheese are being recalled. There are concerns that plastic on the light up rings and eyeglasses can break and the child could swallow the small battery inside. The Consumer Product Safety Commission says no injuries have been reported so far, but one kid did put a battery up his nose.

CHETRY: Why kids do that? Why do they do that?

GRIFFIN: Starbucks is listening, America. The company says it's putting tall-size drinks back on its menus at its drive-thru locations, responding to feedback from mad customers. Last month, they nixed the 12 oz. tall drinks.

CHETRY: Tall means small there, right?

GRIFFIN: Yes. But left the larger, Grande (INAUDIBLE) on the list. About a third of Starbucks locations in the U.S. have drive- thrus.

CHETRY: I saw you coming in slurping Starbucks this morning.

GRIFFIN: A tall.

And New York City mayor, Michael Bloomberg, is pushing a new ban on smoking. He wants to basically ban smoking everywhere, including outdoors. A new bill would ban smoking in beaches, parks, pedestrian, plazas, anywhere you would smoke. Violators will be fined $50,000. The measure is expected to be introduced in New York City Council today and it is expected to pass.

CHETRY: Pass?

GRIFFIN: Yes.

CHETRY: All right. Well, a lot of people will be happy about that. Some people will not be.

Twenty-seven minutes past the hour. Over the controversy -- a priest sex abuse scandal following the Pope on his visit to Britain. Women in the country are challenging the church on another controversial issue. Carol Costello with an "A.M. Original" -- just ahead.

(COMMERCIAL BREAK)

GRIFFIN: Yes. Yes, Mr. Mayor. I got it. I'm sorry. OK. So I inadvertently said that the fine for smoking in New York City was going to be proposed at $50,000. Maybe I exaggerated that just a little bit.

CHETRY: Just a little.

GRIFFIN: It's $50.

UNIDENTIFIED MALE: Oh.

GRIFFIN: Yes, I know.

CHETRY: So roughly for about the price of a pack of cigarettes in New York City.

GRIFFIN: So I apologized to Mayor Bloomberg and the council expected to pass the ordinance today. $50 for every time you smoke.

Well, we got that cleared up. Thank you. It's 30 minutes past the hour. That means it's time for this morning's top stories.

Craigslist, cleaning it up. The web site telling a House panel the adult services section is gone for good. But the problem of child sex trafficking run deeper than any one web site.

CHETRY: More met, marijuana and ecstasy. The government saying that illegal drug use is at the highest they've seen in a decade, thanks to a surge in use of those three drugs. The report found that marijuana use rose by eight percent, remaining the most commonly used drug. The director of the Office of National Drug Control Policy says the rise in medicinal marijuana use is sending the wrong message to young people.

GRIFFIN: And Pope Benedict getting a royal welcome on his arrival this morning in Edinburgh, Scotland. The pope was greeted by Queen Elizabeth. It is the first ever state visit to Britain by a Pope. On the flight from Rome, Benedict told reporters that the Catholic Church was too slow in dealing with pedophile priests, calling it "a great sadness." CHETRY: Well, controversy over the scandal is following the Pope on his visit to Britain. The Church calls pedophilia a grave crime but that's the same words used to describe ordaining women priests. Just the association has sparked outraged in this country. Carol Costello was live in Washington now with an "AM Original."

Good morning, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Good morning, Kiran. You know, you guys, mentioned that Pope Benedict is in Britain this morning, but as you said, his visit is not without controversy. Many tickets remain unsold there which suggests many of Britain's Catholics are indifferent to his presence. You could argue many American-Catholics feel the same way because of the way the Vatican handled the sex abuse scandal. Some say it's time for a change in leadership. A big change. That includes women.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): For most Catholics this is curious. Women in priestly robes.

UNIDENTIFIED FEMALE: Mary is a part of that trinity.

COSTELLO: Preaching from the altar.

UNIDENTIFIED FEMALE: This is the lamb of God.

COSTELLO: Consecrating the bread and wine, something considered a serious crime by the Catholic Church.

Gloria Carpeneto considers herself a Catholic priest. Ordained thanks to an unnamed male bishop who is secretly ordained the first female priests and bishops in 2002.

(on camera): Have you ever met the secret bishop?

GLORIA CARPENETO, ROMAN CATHOLIC WOMEN PRIESTS: The secret bishop? No, I have not met the secret bishop.

COSTELLO: Because if anyone ever found out who this secret bishop was, he would be done.

CARPENETO: It would be a tremendous personal risk for this bishop to come out.

COSTELLO (voice-over): According to Canon lawyers, though, the secret bishop has automatically been excommunicated or banned from participating in the church because he knowingly violated Church law. And certainly, the Vatican made that clear when it restated recently that ordaining women as priests was a grave offense, on the same level as pedophilia.

(on camera): When you saw that, what went through your mind?

CARPENETO: I was horrified. I was horrified. I thought, for myself, I didn't like that notion of suddenly I'm in the swimming pool with people who had been accused of sexual abuse, crimes against children.

COSTELLO (voice-over): Father Joseph Tobin appointed by the Vatican to oversee religious work worldwide said though the Vatican quickly said the comparison was inadvertent and wrong, the ordination of women is still a serious crime.

REV. FATHER JOSEPH TOBIN, "CONGREGATION FOR RELIGIOUS": The Catholic Church has traditionally not arrived at a point where it believes that it is the will of god. Now, I think I have to accept that.

UNIDENTIFIED FEMALE: The first women bishops to be ordained in the United States of America.

COSTELLO: Even the threat of excommunication isn't stopping Catholic women from what they consider the priesthood. Carpeneto says there are now five bishops, 47 priests, 10 deacons and 16 candidates in formation in the United States. All of them illegitimate in the eyes of the Catholic Church.

ANDREA JOHNSON, ROMAN CATHOLIC WOMEN PRIESTS: What many people say to us is, well, why don't you go somewhere else where you're accepted?

COSTELLO (on camera): I was just going to ask you that. I mean, why stick with Catholicism, when Catholicism obviously isn't supportive of you.

JOHNSON: It's Catholicism that needs us.

May god be with you.

COSTELLO: And so they hold masses where they can, in their own homes or in non Catholic churches, ministering to small mostly female congregations who say the traditional Catholic Church is not meeting their needs.

(on camera): Is it up to god?

CARPENETO: I think it is up to god and I think god has said to me you can be ordained.

(END VIDEOTAPE)

COSTELLO: So how important is this movement, I asked our Vatican analyst John Allen, and this is what he told me. He said, you look at poll numbers, large numbers of Catholics support the ordination of women priests. At the same time, most Catholics are not willing to follow these women before the Church gives its blessing.

Kiran, I asked these women who consider themselves Catholic priests if the church will ever accept them in their lifetime. All of them said empathically and sadly, no.

CHETRY: They described themselves instead as rebels, right?

COSTELLO: Yes, they say they're rebels. They're trying to force the issue. They have to do something because as you know, the Vatican moves at a glacial pace.

CHETRY: That's right.

Well, Carol, thanks so much for that story. We appreciate it.

GRIFFIN: There could be rebels in the Democratic Party, 31 of them, House Democrats breaking ranks for the president, demanding tax cuts be extended for all Americans, not just the middle class. It's a setback for the White House. Michigan's Congressman Gary Peters, one of the 31 holdouts. He's going to join us next.

It is now 36 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: 39 minutes past the hour. Welcome back to the most news in the morning.

President Obama says that he needs Republicans to support his plan to extend the Bush tax cuts for Americans making less than 250,000 a year. He's accused the GOP of holding the middle class hostage to get tax cuts extended for the wealthiest income earners as well. But there is real resistance. And it's not from the GOP. It's coming from his own party.

Here's a look at the 31 House Democrats who are breaking ranks, signing a letter demanding that the Bush tax cuts be extended for everyone. Michigan Congressman Gary Peters is one of them.

He joins us live from Capitol Hill this morning. Thanks for being with us, congressman.

REP. GARY PETERS (D), MICHIGAN: Great to be with you

CHETRY: So I know it's a tough time. There's a lot of decision to be made. One of them has to do with this tax cut issue. Why did you decide to sign on to this letter, as well as 30 of your other Democratic colleagues saying, you know what we need to extend them for everybody at this point?

PETERS: Well, I think it's important to also clarify that the letter says it's a temporary extension for everybody. We all believe that the middle class tax cuts for people $250,000 or less should be extended. And that should be done permanently, but given the still fragile state of the company, although we've seen eight months of positive job growth, it's still fairly fragile.

We believe there should be at least a short-term extension of all tax cuts looking the a year or two. Hopefully, it's going to be a compromise position, between what we've seen, kind of entrenched positions on both sides. I think it's important that we make sure that we have tax cuts for middle class Americans from $250,000 or less. But that goes forward but we certainly believe that we could have a short term extension of the other tax cuts until we see signs that the economy is definitely getting much healthier. We're seeing signs now. It needs to go further. CHETRY: Is it one year? Is it two years, when you talk about temporarily extending it for everybody, what would be the years?

PETERS: Well, we're looking at one to two years. We also believe that it needs to be paid for. That whenever you're talking about any of these kinds of tax cuts, we need to pay for it. We do have paid for identified in the letter. But it would be a short term extension, one to two years.

CHETRY: So bottom line, is it an election year move. I mean, nobody wants to be in a campaign ad from their opponent saying, hey, I voted to raise taxes.

PETERS: Well, I think this is just good sound policy, as the economy is slowly recovering, this is not the time to be raising taxes on anybody. And I think you'll find an agreement from most economists and that makes sense not to do that. Folks in the higher income brackets account for a large percentage of consumer spending.

70 percent of the economy is consumer spending. Right now, demand is still very soft on the consumer side. We want to make sure consumers are still out there spending, creating demand. Also from the investment side, and there are parts of the tax cuts that are important, that I believe for capital gains, and dividends, dividend rates shouldn't be going up. And this is a discussion that needs to be a part of an overall deficit reduction strategy that needs to be laid out over the next year.

We've got a deficit reduction commission that's going to be coming back later this year with a plan in order to reduce the deficit. Revenue may be part of it. This should be part of that discussion in a very comprehensive way next year. That is the best way to receive it.

CHETRY: I just want to ask you about this, because some of the polling show that a lot of people think that it's a good idea, more than 50 percent in some of the latest polling say it's a good idea to let taxes expire for the wealthiest income earners. So if I'm sitting at home right now, you know, I'm struggling to make ends meet, struggling to put my kids through college.

What is your rational if you're speaking to me, to say it's a good idea to extend tax cuts for everyone, including the wealthiest income earners?

PETERS: Right. Well, first off, let's make it absolutely that definitely we need to have tax cuts for middle-class Americans, middle-income Americans. We cannot hold that hostage. That has to happen and it has to happen very quickly. But in order to help families, we also have to make sure this economy is growing.

We've had eight months of positive job growth. We need to continue that. We need to create jobs and when we're still in this fragile environment, it's best, in my belief and other colleagues of mine, it's best not to raise any taxes until we start getting on a much sounder footing in the economy. That's going to help everybody in the economy.

But let me be perfectly clear, we definitely have to make sure we extend those tax cuts for folks making 250 or less.

CHETRY: Right.

PETERS: And I just hope Congress -

CHETRY: And that's the worry right now.

PETERS: Right now, we've got gridlock here in Congress. We've got sides digging their heels in. I think it is wrong. I think what the American people really want to see is Congress coming together, and having a compromise, making sure we're helping middle class Americans and also making sure that we're helping the economy. This should not be about partisan politics on both sides.

CHETRY: I'm sorry to talk over you. I just want to make sure people understand, if something is not introduced, if legislation is not introduced, if there is not some agreement, the bottom line is it's the equivalent of a tax hike, right? Because these Bush cuts are set to expire, so that means they're about to expire for the middle class as well if you guys don't take action?

PETERS: That's right. That's why we need to take action because the rates will go up if we do not take action. That's why we cannot let partisan gridlock politics prevent that from happening for middle class Americans. I think that's why it's important to stake out some compromised positions that we can do what's important for the economy, but most importantly, do what's good for middle class Americans and that's to make sure that these tax rates continues in the future and are not raised.

CHETRY: So you've got any indication from House Speaker Pelosi that she's going to listen to you, guys, that some introduction of legislation talking about an expansion of these tax cuts for everybody will happen?

PETERS: Well, right now, what I'm hearing from both sides, both sides aren't really willing to negotiate one way or the other. And that has me very nervous that we won't do anything by the year-end. We're going to have gridlock politics. That is very frustrating. We can't let partisan politics on both sides stymie what is very important to middle class Americans. And that's to make sure that they don't see their taxes go up.

That's why I think it's very important for us to stake out some middle position, to try to be a centrist here, find some sort of common ground where we can bring both sides together in order to solve a problem to make sure middle class Americans get the tax cut that they deserve, but also, make sure that the economy continues to get healthier every single month as we've seen in the last eight months. But it has to continue going forward.

So I think we are staking out that middle position and hoping we don't have gridlock and we can accomplish something that's so important for the American people.

CHETRY: We'll see if your party leaders are listening to you.

Congressman Gary Peters, thanks so much for joining us this morning.

PETERS: Thank you.

CHETRY: We've been talking about the anger within the voters. A lot of these protest votes, almost, taking place in these primaries across the country. This is what frustrates people so much. That if nobody can give a little bit on their position, nothing's going to happen and everyone's going to see a hike.

GRIFFIN: Right. And this is two years ago or three years ago, they stacked the deck. They made this bill so that it would expire. If the tax rate was good back then, why didn't they pass lower tax rates? On and on we go.

Christine O'Donnell, maybe she's got the answer. She shelves a Republican machine in one. Boy, that's causing a meltdown among conservatives, or I should say the traditional conservatives, right?

Jim Acosta in Washington.

JIM ACOSTA, CNN CORRESPONDENT: That's right, Drew. After some initial rumblings to the contrary, national GOP leaders are lining up to say, we think we like Christine O'Donnell's brand of tea. I'll explain coming up on the Most Politics in the Morning.

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CHETRY: Welcome back to the Most Politics in the Morning. The playing field is set for both Republicans and Democrats. The primaries now all of them over and in just 47 days voters will have their say.

GRIFFIN: Yes. The parties plotting their paths to victory. And when we say CNN Equals Politics, we mean it. Every hour we're going to break down the big stories on the political ticker and our Jim Acosta is doing that in Washington.

Jim, big story this morning. The GOP scrambling to get behind Tea Party favorite Christine O'Donnell's victory in Delaware's primary.

ACOSTA: Right. I mean, you know, it seemed, Drew and Kiran, after those results came in this Delaware that, you know, the establishment Republicans in Washington were doing sort of a collective spit take, they didn't like the taste of that tea brewed in Delaware. Now all of a sudden they're lining up and following that upset win in Delaware. They're lining up behind Christine O'Donnell.

But Karl Rove is a Republican who is sticking to his guns. You remember, he publicly criticized her saying she's made, quote, "Some nutty statements in the past." And on FOX News he's made it clear that he thinks she is the wrong choice.

Listen to this.

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KARL ROVE, FORMER WHITE HOUSE ADVISOR: Christine O'Donnell's now going to have to answer in the general election that she didn't have to answer in the primary is her own checkered background. I've met her. I've got to tell you, I wasn't frankly impressed as her abilities as a candidate.

It does conservatives little good to support candidates who, at the end of the day, while they may be conservative in their public statements do not have advance (ph) of rectitude and truthfulness. I'm for the Republican, but I got to tell you, we were looking at eight to nine seats in the Senate. We're now looking at seven to eight.

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A: When Karl Rove's been asked about that again, he still feels the same way about Christine O'Donnell. Other Republicans, they're saying something definitely different about Christine O'Donnell. Take GOP Chairman Michael Steele. He told our John King the naysayers need to stop it.

And consider what Sarah Palin is saying. She had some harsh words for Karl Rove. As you remember, the former governor of Alaska, she endorsed Christine O'Donnell. She says, Mr. Rove needs to buck up. In an interview I saw over FOX News -- we should mention, Sarah Palin contributor to FOX News, like Karl Rove. Sarah Palin basically described Karl Rove as one of these old good ole' boys from Washington, saying she doesn't have anything against Karl Rove, but she says they all need to rally behind Christine O'Donnell in the name of party unity.

CHETRY: Look, you have a state like Delaware. Leans blue. It's going to be an uphill battle. If you have people who -- maybe Karl Rove being realistic about whether or not she has a shot in a blue state.

ACOSTA: Right. Exactly.

CHETRY: But, at the same time, you have other considerations. You want a female candidate and you want all these guys looking like they're against her or somehow questioning her ability and her stature. That's a problem Republicans don't want either.

ACOSTA: And we're watching a political experiment in real-time. For the last 18 months, the Tea Party movement, these were rallies happening all over the country. People who were upset about the bailout, people who were upset about the deficit and the size of the national debt. Now this movement is fielding candidates in political races all over the country and because, you know, most Tea Partiers, the vast majority of them are conservative, they're putting Republican candidates in the races. And so you have establishment Republicans like Karl Rove who's not so sure about this.

One thing that we also want to mention this morning, you know, there's been a lot of buzz generated about Newt Gingrich, who was another one of these establishment Republicans. And there are some in Washington wondering whether or not he's playing footsie with the Tea Party crowd in order to put himself in contention for the 2012 presidential race.

And John King RNC Chairman Michael Steele about some of these comments from Newt Gingrich that the president has had some Kenyan anti- American comments, anti-colonial behavior. And essentially, John King asked Michael Steele about this and Michael Steele said, no, I don't think that Gingrich was out of line.

GRIFFIN: That's interesting, Jim. I did read about that. I guess Democrats trying to make that sound like it was a racist statement. Plays into the whole thing about white people, Tea Parties, racism.

ACOSTA: Right.

GRIFFIN: Far off the track. So it's going to be interesting but I think Karl Rove is maybe second guessing what he said on election night for sure.

ACOSTA: A lot of politics in the Republican Party is being played on the conservative end of the spectrum. And there are some politicians who are comfortable with that and there are some who aren't. What we're going to watch in this political experiment in real-time over the next month and a half is, who's right? Whoever is right is the one who, you know, who wins. Not necessarily the person who's actually right but who wins is often right, right?

GRIFFIN: Tea Party shaking it up, thanks.

Remember, the latest political news, anytime. Check out the political ticker, CNN.com/ticker.

CHETRY: And we'll be right back with your top stories.

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