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ERIN BURNETT OUTFRONT

Fiscal Cliff; President Obama Big Spender?; International Custody Battle; Interview with Jon Huntsman

Aired May 24, 2012 - 19:00   ET

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


ERIN BURNETT, HOST: OUTFRONT next, in search of someone to save us from the approaching fiscal cliff. Tonight, we found two heroes you will just not believe and Mitt Romney calling President Obama big spender. Does it add up?

And a 6-year-old boy stuck in the middle of an international tug- of-war, we're doing an investigative report on this, an amazing custody battle. An OUTFRONT investigation. Let's go OUTFRONT.

OUTFRONT tonight, two heroes on the prowl.

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BURNETT: Yes, Bonnie Tyler (ph) holding out for a hero. And yes, we think we found them. First stop, Senate Majority Leader Harry Reid. Today in an interview with "Politico" he said the $1.2 trillion in automatic spending cuts set to begin on January 2nd should go as is come hell or high water. Quote "I am not going to back off the sequestration. That's the law we passed. We did it because it wouldn't make things easy for us. It made it so we would have to do something."

Of course we're in this position because Democrats and Republicans failed in the super fail super committee to reach a grand bargain and deal with our country's debt crisis. But still what Reid said was absolutely right. And he follows another hero on this front. His buddy ole pal House Speaker John Boehner, who told me he doesn't want to wait for the election and put all talk of debt off to be solved in a lame duck six-week window.

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REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: It took me eight months to get people interested in actually talking about fixing the problem. So --

BURNETT: So you're going early now?

BOEHNER: Let's start now. Why are we going to wait until after the election?

(END VIDEO CLIP)

BURNETT: Boehner is dead right and so is Harry Reid. We need to do this before the election and not mess around with shifting money from one side of the sequestration ledger to the other because that's a waste of time. Now, of course the problem is that Boehner and Reid could end up a little bit like "Thelma and Louise", so stubborn on certain principles that they end up choosing death over compromise.

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UNIDENTIFIED FEMALE: You sure?

UNIDENTIFIED FEMALE: Yes. Yes.

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BURNETT: For "Thelma and Louise" that was going out in a blaze of glory. Of course, it ended in a fiery pit on the ground. Harry and John are heading at high speed to America's great fiscal cliff. And the problem is, is that we, the people, are in the backseat.

OUTFRONT tonight, a man who has made this the cause of his life, David Walker, CEO of Comeback America Initiative and John Avlon, good to have both of you with us. David Walker, let me just -- let me start with you. You have some really terrifying numbers here.

First of all, you have a number for our overall debt obligations which makes the 15.7 trillion formal debt number look like peanuts, and you note that our financial hole in this country is growing at the mere rate of $10 million a minute.

DAVID WALKER, CEO, COMEBACK AMERICA INITIATIVE: That's correct, Erin. If you look at the financial statements, the U.S. government for September 30, 2011, our total liabilities of unfunded promises for Social Security, Medicare, et cetera, were 65.5 trillion. In addition, if you look at the latest trustees' report which came out two or three weeks ago, I expect that's going to rise to about 70 trillion by September 30, 2012. And when you do the numbers, the federal financial hole is growing by over $10 million a minute, 365 days a year.

BURNETT: John Avlon, is this something that they can do as John Boehner heroically said before the election? Is there any hope because by the way, lame duck six weeks after between then and the end of the year, come on.

JOHN AVLON, CNN CONTRIBUTOR: Well the whole reason they're kicking the can in a lame duck is they're essentially saying there's no way we're going to be able to do our jobs until election day. And think how absurd that is. That's basically an admission of failure, of impotence in the face of the political you know contest this fall. Look what's been failing us is a failure of political will. Everybody knows what needs to be done. The problem is there are a bunch of gutless wonders in Washington who are happy to demagogue deficits and debt before an election, but they're scared to death to deal with it. The problem is they have to deal with it. We all depend on them.

BURNETT: David Walker, why are they so afraid? When it is true that we can argue around the margin of well, how much tax cuts do you want in there? How much spending cuts? Everybody knows some of the major changes that need to be made to some of the entitlement programs in this country, right? I mean they don't need now until election day. They don't even need the six-week lame duck session, right? I mean they could do it in a day if they decided they wanted to do it.

WALKER: Here's the problem, Erin, our politics today are dominated by career politicians who may or may not have had a job before they came to Washington, but once they come to Washington, they don't have a real job and they want to keep it for life. Special interest groups have too much power. In addition to that, you know, you've got a situation where people think -- the politicians think that people can't handle the truth. They're wrong. The people are ahead of the politicians, they're tired of partisanship. They're tired of stalemate. They want progress. You know, people don't like change, but they love progress. And in order to get progress, we're going to have to have change.

BURNETT: You know, it's funny, John Avlon, one thing Bill Clinton said at the fiscal summit last week, which was sponsored by another hero of the debt crisis, Pete Peterson. He said look, people, generally when they get elected they do what the people who elected them want them to do. And that's sort of what's happened here. That's why you're seeing all these people say my way or the highway. That's what they were elected to do, so in a sense, Bill Clinton said, look, this is the American people's fault that it's so polemic in Washington.

AVLON: Well it is a part of the problem. I mean the polarization of the parties reflects the base of each party being deeply divided. But the reality is to deal with this problem, we need principled compromise. People who approach it all or nothing have to understand that they are part of the problem.

BURNETT: Right.

AVLON: And principled compromise is the way Washington has worked in the past. We can get this done if they rediscover that concept. If they insist on all or nothing, we're going over that cliff.

BURNETT: David Walker, your number -- the total hold right now growing at $10 million, unfortunately, a minute, is $66 trillion, just about. But you know, Robert Kessler (ph), a major investor, you and I both know him. He's done the math saying look when you add up all the wealth in this country, you take out the debt that we have, including all the public debt, you have $66 trillion in assets, slightly bigger than your sense of our obligation. Is that something -- that optimism something that we should at least say take a step back and realize look, it's still a great country. We've got a lot of wealth. WALKER: Look it's a great country, and our future can be better than our past, but you can't spend a lot more money than you make, charge it to the credit card and pass it on to our kids and grandkids --

BURNETT: Right.

WALKER: -- self-deal in your own debt and expect that there's not going to be a day of reckoning. The only way we're going to solve this problem after the crisis is committed, inspired presidential leadership and the first three words of the Constitution, we, the people, coming alive to be able to force members of Congress to do what's in the interest of the country rather than their personal or party's interest. That's the only way, and it must happen in 2013.

BURNETT: All right. Final word.

AVLON: One more thing. No pledges. No pledges but the Pledge of Allegiance. This whole pledge (INAUDIBLE) to Grover Norquist, that's part of the problem, big time.

BURNETT: All right thanks very much to both of you. Well John Boehner and Harry Reid our heroes tonight. They go on the list with Tom Coburn and Mark Warner. Come on, more heroes come in and then we can get a deal.

OUTFRONT next President Obama called out for being a big spender. Do Mitt Romney's attacks add up?

And new video tonight of George Zimmerman inside the Sanford police station. What the video actually shows when he turns away from the camera. This is an angle that everybody has been looking for. We've got it. And an auction involving an item of Ronald Reagan's, an item is an interesting word, which sparked so much controversy that his family demanded it be called off. We get it. This is the most bizarre thing that's ever been auctioned. We know what it is.

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BURNETT: Our second story OUTFRONT Mitt Romney out with a new ad hitting one of the core themes of his campaign. That is President Obama is an out of control spender.

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UNIDENTIFIED MALE, POLITICAL AD: What would a Romney presidency be like? Day one, President Romney announces deficit reductions ending the Obama era of big government.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Can't keep buying and spending and passing on debts to our kids, and I'll stop it.

I'm in favor of cutting spending.

It's high time to bring those principles of fiscal responsibility to Washington, D.C. I'm Mitt Romney and I approve this message.

(END VIDEO CLIP)

BURNETT: Now calling the president a big spender is popular with the GOP. Polls show the label is sticking with Independent voters too. But does it add up? Reihan Salam and Jamal Simmons are here and obviously there was an interesting article getting a lot of conversation that was pushed out by the Obama campaign, but it was done independently by CBS Market Watch did reporting, saying that the president's spending record is, well, it's grown the least of any president in the past 60 years, Reihan.

And in a lot of ways, this really does seem to add up. Some other ways, debt is still growing at 14.6 percent a year versus spending at 1.4. So it doesn't -- there are some real issues here. One thing in there I thought very interesting, though, a lot of what the president wanted to push through failed because Tea Party Republicans shot down his efforts to increase the spending in Washington. So ironically he gets the benefit of being the least spending guy in 60 years thanks to the Tea Party in a sense.

REIHAN SALAM, CNN CONTRIBUTOR: There's definitely that, and there's also the fact that in 2009 much depends on who you credit 2009's fiscal year to. President Bush passed -- he approved a continuing resolution that said we're going to keep spending at 2008. We're going to basically keep it on autopilot and then President Obama signed a fiscal year 2009 budget in 2009.

So there was a big gap of $3.1 trillion in President Bush's proposed budget for fiscal year 2009 and 3.5 trillion in the budget that we eventually got. So I think that that report from CBS Market Watch tries to kind of glide over that distinction a little bit. And there's also the fact that the CBO assumed that from 2009 to 2010 spending would go down considerably. And in fact, it actually stayed level, so that was actually a pretty big change.

BURNETT: I mean, look, there's all kinds of ways Jamal you can cut it. But I mean it does seem when you add those things in, the president has -- you know some real things he can point to on this front. I'm curious why the campaign hadn't made a big deal about this to try to push this themselves instead of waiting until someone else did it for them.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Well, I think the Democrats recognize that the campaign is not really going to be about spending. The campaign is really about -- you look at every poll. The campaign is about jobs and the economy. The spending and the deficit argument is far, far, far down in second place when it comes down to it. But when you look at these numbers, "PolitiFact" actually looked at some of these numbers and what "PolitiFact" found, independent organization, media organization, what they found is that the president's spending went up about 1.4 percent every year under President Obama -- had gone up over 10 percent under President Bush. And that means it was basically flat. Now you do have the problem of the deficit going up. That's because tax revenues went down because of the recession.

BURNETT: Right.

SIMMONS: So it's not -- so you've got to like really play with these numbers to see. What we do see, though, there hasn't been the explosion in spending that Romney has been saying.

BURNETT: No, and I don't want to get into all the details of the numbers, but you know they also found federal spending under Obama as a percent of GDP is higher than most of the past 60 years and for example, the Obama health care plan isn't even included in any of these numbers. So I understand numbers can be made to look a lot of different ways. But I think, Reihan, one thing to take away from this is the president's story on this is much better than a lot of the American people give him credit for. I just don't understand why he wouldn't make more of a stink about it. I mean instead of talking about war on women or gay marriage --

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BURNETT: This is something he can tout.

SALAM: There is one really important reason. So I will push back against Jamal a little bit. When you look at the spending issue and the deficit issue, it's not necessarily the big issue in most of the battleground states --

BURNETT: Right.

SALAM: -- but in a state like New Hampshire, a state like -- and also Iowa and Virginia. These are states where the unemployment rate is relatively low, yet you have a ton of voters who are actually very concerned about the size of the deficit. So the thing is that Mitt Romney has to make an appeal based on jobs, but he also has to make an appeal based on spending and deficits because that really does resonate with a lot of voters who are concerned about the future fiscal trajectory of the country.

BURNETT: It's going to be interesting. I'm curious Jamal, in the debates this is going to be great how it plays out. I mean because you know people do have a perception and it's not backed up necessarily by reality. You get a good conversation. As we're heading into Memorial Day weekend, though, Jamal, Michelle Obama today said that if she were able to trade places with anybody in the world she picks Beyonce. That's what she told "People" magazine. What do you think?

SIMMONS: I guess I could understand it. I mean look, Beyonce has got a lot of money. She's got a great family it looks like. So, you know, why not have a little fun and be Beyonce and have -- you know and have a good time.

BURNETT: I guess I ask that question -- man I put you in an awkward position Jamal --

(CROSSTALK) SIMMONS: What am I supposed to say? I mean Beyonce, are you kidding me?

(LAUGHTER)

SALAM: Oh good lord.

BURNETT: Now, Reihan --

SALAM: Yes.

BURNETT: -- what I like about this though is the fun that the Obamas have. Why can't Mitt Romney come out and pick somebody cool and fun or something that he wants to be like so people --

SALAM: You and I both know the answer to that question, Erin. No one would believe him. If he said that he wanted to wake up tomorrow morning and be Beyonce, you would be confused, possibly alarmed. Now granted in a kind of beautiful weave, it could actually suit him. It could bring some of the kind of highlights in his eyes --

BURNETT: He would be able to compete in Miss Universe --

SALAM: But I think that that would be -- that's a very, very good point particularly if you were Canadian. But I think that, you know and that would be a whole other revelation. Is he actually an American citizen or is he in fact a secret transsexual Canadian, Erin? I think the answer is no, but that remains to be seen.

BURNETT: Wow --

SIMMONS: I'm going for George Clooney.

BURNETT: Yes, yes, that would be -- he could get away with that. Transsexual Canadian, OK. I didn't know this was going there. Thank you.

OK ahead, an international custody battle though that is gaining the attention of another person a lot of people would like to wake up and be, Angelina Jolie, and a major development in the search for Michele Parker, the Florida mom who disappeared six months ago and hasn't been seen since.

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BURNETT: Our third story OUTFRONT -- a dramatic and heartbreaking international custody battle, Lura Calder and her 6- year-old son Leo both American citizens are just eight days away from being forced to return to Italy where Leo's father lives. Calder fled Italy with her son in 2010 because she said she felt threatened by her ex-husband. The case has gotten the attention of celebrities like Angelina Jolie and organizations including the Bill and Melinda Gates Foundation. Our Miguel Marquez went OUTFRONT to investigate the story.

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UNIDENTIFIED FEMALE: This is my worst nightmare coming true.

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Lura Calder, an American fighting for her 6-year-old son Leo. Two years ago she fled Parma, Italy and an Italian husband she grew to fear.

(on camera): You feared for your life?

UNIDENTIFIED FEMALE: I feared for my life and I feared for my son's life.

MARQUEZ: Neither parent wanted to show Leo's face. When Calder left Italy with Leo who was born there and then filed for legal separation here in California, her Italian husband filed charges of his own, kidnapping.

LURA CALDER, LEO'S MOM: I'm not a bad mom. I didn't damage my child. I was protecting him. I was protecting him. And all I did was come to my family. You know -- I don't have a right to come to my own family for help?

MARQUEZ (voice-over): Calder claims her husband physically and emotionally abused her, sexually abused their son and may have hired a hit man. She won her first case, but a California appeals court in December found only the claim of emotional abuse credible and ordered that she return Leo to Italy and let the courts there sort it out.

CALDER: I don't see myself as a child abductor. I see myself as a person who saved her child.

MARQUEZ: Calder's husband, Maurizio Rigamonti, used international law, the Hague Convention, to compel his son's return. He claims the abuse came from her and in taking their son to California, she went too far.

MAURIZIO RIGAMONTI, LEO'S DAD: Lura broke the law. She did bad things. She claimed a lot of stuff that they weren't true, you know.

MARQUEZ: But Calder has support from high-powered celebrities like Angelina Jolie whose children's foundation believes Hague Convention rules are being abused by vindictive spouses.

CALDER: All of it has been taken away from him for what, to go back to an abusive man?

RIGAMONTI: I'm ready to care about his needs, you know, and I will -- with all my patience, all my love, I want the best for Leo, you know --

MARQUEZ: Calder and Leo will return to Italy June 1st. Upon landing in Rome, Leo will go home with his father until a full custody hearing two days later. Calder fears that separation could be devastating.

CALDER: My son, he's never spent a single night ever alone with his father in his entire life.

MARQUEZ: A bitter custody fight, a 6-year-old boy at its heart, Leo's fate soon in the hands of an Italian court.

(END VIDEOTAPE)

BURNETT: Miguel, a powerful story. I mean could Lura be arrested, tried for kidnapping? She talked about potentially that happening when she arrives. Could it?

MARQUEZ: It is possible. Her husband -- her husband has dropped the kidnapping charges, but the prosecutor there just like the American system says that he can bring those charges back if he wants. But talking to her lawyers in Parma, they say she stands a pretty good chance of getting him back. It's just going to take time and a lot of patience -- Erin.

BURNETT: And Miguel, what about this abuse claim? That was -- I mean she's claiming that he sexually abused the son. Obviously no one is sure if that's true or not. But if she was abused, how could this happen?

MARQUEZ: Well, the Hague Convention has two parts to it, two tests. One, they have to prove that there's an extreme reason that she can't go back to that country. That the abuse has to be completely proved and then it also has to be the case that they're being sent back to a country that doesn't have the ability to deal with it. In this case, Italy has a child care service; they have prosecutors in courts and specialists there that can help deal with this. So in the case of Italy, she doesn't meet both of those tests.

BURNETT: And, Miguel, I mean obviously we've all seen the high- profile cases, a difference between U.S. and Italian law. But when do you think that this will be resolved? I know she's planning on staying there until it is. How long could that be?

MARQUEZ: She's going to have to get an apartment there. She's going to have to try to prove to the courts that she can support Leo. If she has to stay there, her work visa there may have expired at this point. She may need some help from the U.S. Consulate there. It's going to be a very long difficult time. It could take months before this is all sorted out.

BURNETT: All right, Miguel, thank you very much.

And still OUTFRONT in our second half, new video of George Zimmerman, what it shows when you're actually going to see the back of his head. Plus, Mitt Romney says he'll make China play by the rules. Well you know what? We'll ask his former opponent and ambassador to China, Jon Huntsman whether that's smart or stupid.

(COMMERCIAL BREAK)

BURNETT: Just in the trainer of Kentucky Derby winner and Preakness winner "I'll Have Another" trying to go for the Triple Crown has been suspended for 45 days in California for a violation with another one of his horses. Ed Lavandera is on the phone. You know he's been covering this story and Ed, how does this affect his bid for the Triple Crown?

ED LAVANDERA, CNN CORRESPONDENT (via phone): Well, the quick headline is is that it will have no effect. And -- because not only will Doug O'Neil, the trainer of I'll Have Another, he will just pay fully in the Belmont stakes and go for the Triple Crown. But his horse I'll Have Another will also participate. So that's the quick headline.

And what this California Racing Board has decided here today is that Doug O'Neil, dating back to a violation that they were investigating dating back to 2010, will be suspended for 45 days starting no sooner than July 4th. Well -- July 1st, well passed the date of the Belmont. And this all has to do with the accusations in a violation of suspected milk shake in which we've talked about. And this is this kind of concoction that is apparently used in horse racing that --

BURNETT: Right.

LAVANDERA: It's a concoction that is injected through the nose of a horse to help them build up stamina and keep them -- keep horses from getting tired.

What's interesting, Erin, in this ruling is that the California Racing Board says that they had found no evidence, and agreed with Doug O'Neil, no evidence in this particular that the horse in question had been milk shakes. So kind of a mixed ruling for Doug O'Neil, kind of vindicated on the milk shaking charges. But it's clear the big headline is here that Doug O'Neil won't be able to participate in the Belmont.

BURNETT: All right. Well, thank you very much to Ed Lavandera.

So those watching for I'll Have Another will get their chance at the Belmont.

And now to other stories we care about where we're focusing on our own reporting from the frontline.

And we do have breaking news in the case of Etan Patz. Police have made an arrest. Etan is the New York boy who was the first missing child to have his face on a milk carton. Police have arrested Pedro Hernandez for Etan's murder. New York Police Commissioner Ray Kelly detailed Hernandez's confession in a press conference just a couple of moments ago.

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RAY KELLY, NEW YORK CITY POLICE COMMISSIONER: Hernandez described to the detectives how he lured young Etan from the school bus stop at West Broadway and Prince Street with the promise of a soda. He then led him into the basement of the bodega, choked him there and disposed of the body by putting it into a plastic bag and placing it into the trash. (END VIDEO CLIP)

BURNETT: Etan disappeared 33 years ago tomorrow.

The State Department is battling al Qaeda on the Internet. There's a case al Qaeda had posted anti-American ads on Yemeni tribal Web sites. So the U.S. decided to replace them.

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HILLARY CLINTON, SECRETARY OF STATE: Within 48 hours our team plastered the same sites with altered versions of the ads that showed the toll al Qaeda attacks have taken on the Yemeni people.

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BURNETT: Juan Zarate of CSIS tells us that the cyber domain offer some opportunities to be a new platform of action and attack for al Qaeda.

Nuclear talks with Iran ended today. And nothing happened except for there'll be another meeting. In an interview with CNN Iran's top negotiator said the negotiations show both sides are serious. The meeting between Iran and five other Western countries. The next meeting will be held in Moscow.

Art Keller is a former CIA spy, tells us that the location is important because it's in the territory of the one member of the U.N. Security Council that's most consistently in Iran's corner on the nuclear issue.

We have new video tonight of George Zimmerman in the days following the shooting death of Trayvon Martin. It shows Zimmerman at the Stanford Police Department three days after the shooting . Watch is carefully. The arrow shows where he is. In the video it appears that the back of Zimmerman's head -- that it right there. The back of his head was bandaged.

Now we also have a follow-up to a story we brought you last night about the e-mail that Zimmerman sent to the Stanford police chief last year. Chief Lee's spokesperson says he has never met Zimmerman and that the e-mail Zimmerman sent was not unique, adding, that, "based on comments that Mr. Zimmerman is reported to have made in a public forum before Chief Lee was hired, it is not likely that Mr. Zimmerman would have endeared himself to members of the police department."

Well, it's been 294 days since America lost its top credit rating. What are we doing to get it back? Well, you know what, even though we don't have it, rates are still cheap. That isn't reason to be complacent people, but rates for 30-year mortgage hit another record-low, 3.78 percent.

Housing is important to the economic recovery. Crucial but number one reason we can get out of this mess and (INAUDIBLE) rates helps. Our four story OUTFRONT, Mitt Romney ready to take on China. Now according to its new campaign ad he's going to do it. He's got this new thing from day one. From day one. From day one, here's what he's going to do on day one.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What would a Romney presidency be like? Day one, President Romney stands up to China on trade and demands they play by the rules. That's what a Romney presidency will be like.

(END VIDEO CLIP)

BURNETT: All right. China obviously is an economic challenge to the U.S. But there are serious diplomatic issues. Blind Chinese dissident Chen Guangcheng who sough refuge in the U.S. embassy last month causing a huge rift between the two countries. He's now in New York City. Today he told Anderson Cooper his suffering at the hands of the Chinese government was beyond imagination and he detailed the abuse inflicted right now on his nephew who remains in China.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, ANCHOR, ANDERSON COOPER 360: Do you worry about what will happen to them now?

CHEN GUANGCHENG, CHINESE ACTIVIST (Through Translator): They injured his head and made him bleed for three hours. His clothes were shattered and the sticks they used to beat him were bent.

(END VIDEO CLIP)

BURNETT: Former governor of Utah Jon Huntsman spent two years as the ambassador to China and we're lucky to have him OUTFRONT tonight.

Great to see you, Ambassador.

JON HUNTSMAN, FORMER UTAH GOVERNOR: Thanks, Erin.

BURNETT: You heard Chen Guangcheng talking about his nephew now in a situation where he's been beaten so much. That the sticks used to beat him were bent. Is this the sort of thing that happens to Chinese dissidents? How they treat them?

HUNTSMAN: There are stories like this in many parts of China. I think the good news with Chen Guangcheng, number one, he's here, and he'll be studying at NYU for the next year or two. I think that's a very, very good outcome.

Second is people are learning about his journey and about the challenges he faced and what it was like dealing with a brutal regime. Problem with all of this is he still has family behind. He has his brother Chen Guangfu who made his way from the Shandong Province all the way to Beijing in a very similar fashion to Chen Guangcheng.

They've got family members, I believe, three or four other brothers in the family.

BURNETT: Right.

HUNTSMAN: They have kids. And it seems that many of them are in harm's way. That the challenges going forward. And I would say the chapter has not been finally written in this whole saga until we know that they're all out of harm's way.

BURNETT: And one thing about this that's so fascinating is that if they're doing all of these things and he talks about the way he was treated himself as unimaginable. Didn't even -- he didn't go into detail. He didn't want to talk about some of the details.

Would the Chinese government really have let him go if they thought he was that much of a threat and lose face in that regard? That's one thing I still don't understand.

HUNTSMAN: Well, I think they had to do the analysis in real time. And that is by keeping him in Beijing in the middle of the Marine House --

BURNETT: Right.

HUNTSMAN: -- in the U.S. embassy. How does that play out in terms of the way you're seen internationally? How does it at affect foreign investment and trade? How are you seen in the eye of --

BURNETT: Right.

HUNTSMAN: -- of the international community? That's a tough thing to endure. So they wanted to get him out. They figure out a way while saving face to send him over here with a student visa.

BURNETT: Right.

HUNTSMAN: Knowing full well that once he was here, he was likely going to talk about these issues.

BURNETT: Right. Right.

HUNTSMAN: And I think it's a healthy thing. What we're seeing in China is unlike what I've seen in any other year and that is that the airing of all of these cases, whether --

(CROSSTALK)

BURNETT: There's a lot of dirty laundry out there right now.

HUNTSMAN: And all in the run-up to leadership changes in October. So it's spelling out the inadequacies of the communist parties, what it's doing. And I think this is a conversation worth having for the Chinese people.

BURNETT: We just played Mitt Romney saying he would go tough on China. And his "From Day One" series of ads. He said he called them a currency manipulator on day one, he said that in the past. But here's what you said about Mitt Romney on China at the ABC debate in January.

(BEGIN VIDEO CLIP)

HUNTSMAN: It's important to note as they would say in China that (speaking in foreign language). He doesn't --

(CROSSTALK)

HUNTSMAN: He doesn't quite understand the situation. What he is calling for would lead to a trade war. It makes for easy talk and a nice applause line but it's far different from the reality in the U.S.-China relationship.

(END VIDEO CLIP)

BURNETT: Do you still feel that way?

HUNTSMAN: Well, it's a complicated relationship. It's no surprise during a campaign season you're going to have people use China as an issue. Bill Clinton did it when he talked about the butchers of Beijing. Ronald Reagan did it in 1980. I traveled as part of Ronald Reagan's delegation in the early 1980s. What did he do? He expanded trade. He brought a hopeful message to the Chinese people after a barely brutal campaign of 1980.

See, what I'm trying to --

BURNETT: So you think Mitt Romney is being negative?

HUNTSMAN: Well, I think you're going to see it on both sides.

(CROSSTALK)

BURNETT: So the campaign, not that he would be irresponsible as a president?

HUNTSMAN: I think -- this is a -- this is a typical trajectory where during a campaign season you're going to talk about China in ways that you're hearing today. We've seen that election cycles gone by. They you get in office and I think Mitt Romney has the prospects of doing that which his most important for the U.S.-China relationship. Strengthening our own domestic economy and giving life and confidence to our creative class so we can get back on our feet.

If you want a strong U.S.-China relationship it starts right here at home and it starts with a stronger economy.

BURNETT: One of the things China seems to be doing, though, and because of its stress over the U.S. relationship and how it might go is dramatically building up its military. More than 11 percent increase in defense spending last year. We talk about that J-20 stripe fighter. Reports that they have the U.S. drone that went down over Iran which had this special paint so you can't see it, that China may be copying that technology.

How serious is the defense build-up in China? Have they ever threat to this country?

HUNTSMAN: We need to take it seriously. They're spending probably $100 billion a year. We're spending about $650 billion a year. They're focused laser like on their maritime projection capability. Submarines, for example.

BURNETT: Right.

HUNTSMAN: And their missile systems are getting very, very sophisticated. That means the United States should do what we've always done well. We should track the development of their systems. We should always stay a step ahead in terms of counter measures.

BURNETT: Yes.

HUNTSMAN: And ways that we can deal with that. And we should remember that the 21st Century, Erin, is going to be about the Pacific theater.

BURNETT: Right.

HUNTSMAN: Not Afghanistan, not Iraq. It's going to be about trade and commerce and security in the Pacific region.

BURNETT: Before we go, I was reaching behind me just to -- did you know you and George Clooney have something in common?

HUNTSMAN: I can't imagine what.

BURNETT: Yes, well, apparently you were both voted one of the sexiest men alive. Did you know that?

HUNTSMAN: Well, I'll take --

(LAUGHTER)

BURNETT: This is -- I'm just watching face.

HUNTSMAN: That's --

BURNETT: One of the sexiest men alive older than 50 according to AARP. Robert F. Kennedy, Jr. is on it, Brian Williams, Les Moonves, and you.

HUNTSMAN: I was shocked to know that I even qualified. And I did find about it this morning and the first thing that came to mind was I've now got new leverage over my kids.

BURNETT: That's right. They -- are they proud?

HUNTSMAN: That's right. Of course, yes. They always think their dad is pretty much (INAUDIBLE). And now you can rule out new leverage. That's a good thing.

BURNETT: I'm most sexiest man alive.

HUNTSMAN: That's a good thing, of course.

BURNETT: There you go. All right. Great to see you, sir, as always.

HUNTSMAN: Thanks. Thanks, Erin.

BURNETT: Thank you.

And ahead, Florida police have just made a major announcement involving the search for Michelle Parker. The mom we've been telling you about has been missing now for six months. Her mother, her sister OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: So a lot of Ronald Reagan loyalists go to great lengths to honor the 40th president. They visit his presidential library in Simi Valley, California. They have deli belly jellybeans or maybe watch "A Little Bedtime for Bonzo." Then there are the fanatics who might want a vial of his blood.

The auction for the blood supposedly drawn following the 1981 assassination attempt against the former president was cancelled today after complaints from the late president's family who thought it was morbid and tacky.

But it's not the first time we've seen macabre items like this auctioned. The hearse the carried John F. Kennedy's body to Air Force One sold for $160,000 in an auction earlier this year. And in 2008 there was an auction of Lincoln memorabilia that included Lincoln's blood stained shirt, cuff and collar, a portion of the pillow slip, and a bit of a bandage. It even included the (INAUDIBLE) set used at his death bed which sold for $31,000.

Our number tonight two. This is the second time this particular vial of blood has been up for auction. The person who's actually trying to sell it this time is sort of flipping it. They actually bought it in an auction in February for $3,550. Bidding this time was up to $30,000 before the auction was scrapped. The vial will be donated to the Ronald Reagan Presidential Foundation.

Wow, there are some weird people out there.

And now let's get to our "Outer Source" where we reach out to our sources around the world and we go to Argentina tonight where the body of a man who disappeared 36 years ago has finally been identified using DNA testing solving a mystery for his daughter.

Victoria Montenegro's parents disappeared when she was just a few days old. She never knew anything about her real father until today. And she's not alone. There are thousands of similar cases in Argentina. And I asked Rafael Romo why there are so many unsolved disappearances in that country.

RAFAEL ROMO, CNN SR. LATIN AMERICAN AFFAIRS EDITOR: Erin, this is a case emblematic of the atrocities committed in Argentina during the so-called dirty war which lasted from 1976 to 1983. Just like Roque Montenegro who went missing in early 1976. Thousands of people disappeared during those years. A forensic team finally match Montenegro's daughter's DNA with the remains of her father found 10 years ago in an anonymous grave in neighboring Uruguay.

But she's one of the few lucky ones. Thousands upon thousands of people whose relatives went missing during the dirty war are still waiting for an answer. At least 13,000 people were killed or went missing during Argentina's dictatorship -- Erin.

BURNETT: Thanks to Rafael.

And now let's check in with Anderson with a look at what's coming up on "AC 360."

Hey, Anderson.

COOPER: Hey, Erin, we'll have the breaking news tonight in the program, 33 years ago Etan Patz disappeared on his way to school. Well, tonight police have a man under arrest in connection with the murder of the 6-year-old. That's helped to raise awareness nationwide for missing children all the way back then.

Retired New York City Police officer Lou Palumbo joins me. We'll look at why authorities made this arrest despite a lack of physical evidence. We'll also talk to former federal prosecutor, Jeff Toobin.

Also in tonight's "Keeping Them Honest" report, a troubling question on the story we've been covering for years. Why is a private school in Massachusetts for special needs students, the Judge Rotenberg Center, why are they still open despite its past? We'll speak with a lawmaker trying to it down. They use electric shocks against autistic and really disturbed kids. Those story plus my one- on-one interview, exclusive interview with Chinese dissident Chen Guangcheng who is speaking out I his first in-depth interview since arriving in the United States. That and that the "RidicuList" all at the top of the hour, Erin.

BURNETT: All right. Thanks very much, Anderson.

And now our fifth story OUTFRONT. We have new developments in the disappearance of Florida mother Michelle Parker. A so-called smart panel of 45 experienced investigators is now taking a fresh look at the case. This was announced today. Parker vanished in November after leaving her 3-year-old twins at her former fiance's house in Orlando. That's the same day the couple appeared on the "People's Court" to resolve the dispute over her engagement ring.

That former fiance, Dale Smith, has been labeled someone police are looking at in the investigation but it's been six months and there have been no arrests and no Michelle. Her family has been relentless in its search for answers. And today, made this emotional appeal.

(BEGIN VIDEO CLIP)

YVONNE STEWART, MOTHER OF MICHELLE PARKER: I'm a mother. This is my first born child. And I don't know where she is. And I don't know who did it for sure, I don't know where they put her. I want my baby back. And if somebody never going to see jail, I don't really care. I just want my girl.

(END VIDEO CLIP)

BURNETT: Michelle Parker's mother Yvonne Stewart is OUTFRONT tonight along with Michelle's sister, Lauren Erickson, and their attorney, Matt Morgan.

I'm glad you all are here. I wish you weren't back on this show because I wished this has ended before and that we knew where she was.

But Yvonne, let me -- let me start with you. I know that the most important thing is to have her back. You also said there, though, if someone doesn't go to jail, so be it, you just want her back. What has made you feel that way?

STEWART: Because living with this every second of our lives, it's just torment. And it's just disrespectful to our family and to her children. We need to know where she is.

BURNETT: Yvonne, I know the twins turned 4 yesterday, right? Am I --

STEWART: Yes.

BURNETT: And I know they've been living with their father who has been labeled by police as someone they're interesting in this case, obviously no charges. You have visitation rights. Is that -- is that relationship working out? Do you still feel that he wasn't --

STEWART: That's not true. It's not true. I don't have visitation rights. There's no right in the state of Florida for grandparents. Those laws need to be seriously looked at.

BURNETT: Have you -- have you then not been able to see them?

STEWART: Hardly at all. Three times this year and it's almost Jim. And I've had them every day almost since the day they were -- like 13 days old. Yes, it's a difficult situation and I try to walk a good line and you know be grateful for the time that I get. But it's not enough. I didn't get to see them on their birthdays. They didn't get to see their mama on their birthday.

BURNETT: I didn't -- I did not realize that, and Lauren, have you seen them more? I know that when we talked last time you were talking about trying to see them and how they were responding and still asking questions about where their mother was.

LAUREN ERICKSON, SISTER OF MICHELLE PARKER: Whenever we do get to see them, I mean we're all together. We take off work. We shut down whatever we have scheduled, whenever have a day. So whenever she gets to see them is the same time I do. So I've only seen them three times as well this year. But when we do spend time with them, I mean it is -- it is right next to them the whole time and just absorbing every laugh and smile that we can when we're with him.

BURNETT: Right.

Matt, what are you going to be able to do about this visitation situation? I'm frankly shocked to hear that they've only been able to see those twins three times this year.

MATT MORGAN, ATTORNEY FOR PARKER'S FAMILY: Yes. And that's the unfortunate thing in the state of Florida is grandparents don't have visitation rights. So Dale, as the primary caretaker and biological father, can say, you can't see the kids. And so what I've been trying to do is work with his attorneys to work out a peaceful agreement where visitation can go back and forth.

And we've tried it and one event didn't go well. And another. And then, you know, we're trying to get back on course but for the time being all we can do is just play nice and hope that Dale awards some visitation for Yvonne and her family.

BURNETT: Yvonne, what is your view on Dale now? Obviously he's the only person police have referenced to someone that they're looking at. There have been no charges. I mean do you -- is the way he's been treating you about the children change your view about whether he was involved in Michelle's disappearance?

STEWART: I honestly don't want to believe that he's involved, but we've got nowhere else to go.

BURNETT: That's the -- there has been no other leads at this point, anybody?

STEWART: No. No. She disappeared like an hour and a half after that show, and --

ERICKSON: We just don't know.

STEWART: We just don't know.

ERICKSON: There's been nothing else that have come in to lead otherwise, but if something else does come in, I mean the police are all for it. They are all for every tidbit if it's going to lead to Michelle so we are, too.

BURNETT: Well, we hope that that day will come very much here.

Yvonne, Lauren, Matt, thanks to you.

And in tonight's "e-Block", I'm going to remember my mentor and my friend. He died a year ago today. Mark Haines.

(COMMERCIAL BREAK)

BURNETT: So someone very dear to me died a year ago today. And I -- I really debated all day about whether I'd acknowledge it on the air because I'm really uncomfortable marking a person's death because instead I think we should focus on and celebrate our life on our birthday, no their death day.

Specially a person who was larger than life in every way. Like this man. Market. We were co-host together for more than five years and moments like you see there were the moments of our daily life. It was just so much fun. That was our last day together.

Mark gave me my first shot at hosting TV when I came on that set together. His curmudgeonly way he was going on vacation and we had our last read at the end of the show, he said, hey, why don't you give her something to do? Give her something to do there, Sandy. And they did and we became a team, the most unlikely team ever but wow, what a team it was.

And I still see things every day that make me think Mark would have loved this story. Serious stories like the debt crisis where Mark would come in with three 200-page studies and have read them and pulled out some Zingers to nail, two people he liked to nail, Grover Norquist and Barney Frank. And then there were stories we all really want to watch like the one in this week's Smithsonian about how Mark's favorite animal, the chicken, conquered the world. Mark would have loved that story.

Mark showed me that if you're tenacious, keep your humor and go to the beat of your own drum The world is a wonderful place. And on my last day on our set together, Mark told me that coming to work together is a joy. It was a joy for me and I looked forward to seeing him and hearing him come to work every single day. That's something I'll think of for the rest of my life.

Thanks for joining us. Anderson starts now.