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THE SITUATION ROOM

Why Did Republicans Lose?; President Obama's Agenda; Interview with Jason Chaffetz, Steve LaTourette

Aired November 8, 2012 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now. New details are emerging of President Obama's ambitious second-term agenda.

The Republican postmortem. Did they lose because of their candidate or because of their policies?

A dramatic courtroom confrontation, the former Congresswoman Gabrielle Giffords face-to-face with the man who tried to assassinate her.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

A dire new report predicts another recession next year and 9 percent unemployment if Congress and the president can't come up with a way to stop the automatic spending cuts and tax increases scheduled to take effect at the end of this year, a situation Washington insiders have dubbed the fiscal cliff.

The nonpartisan Congressional Budget Office has just warned of a possible recession before. But today's new report gets specific about five things the president and the Congress need to deal with. They have to decide about allowing draconian cuts in both defense and non- defense spending, letting the Bush tax cuts expire, ending the so- called payroll tax holiday, which would raise Social Security deductions from your paycheck, and end extended unemployment benefits, as well as allow cuts of reimbursements to doctors who treat Medicare patients.

All of that scheduled to take effect. Stopping any one of these things means letting the other cuts go potentially even deeper and the tax increases go even higher.

Let's get some more on this troubling story.

Our chief White House correspondent, Jessica Yellin, is standing by.

What is the reaction you're getting from the Obama administration, Jessica?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Wolf.

I just spoke to senior administration officials who tell me that they believe this report simply underscores what everybody already knows, that falling off the fiscal cliff would be dangerous for the economy. And in their view, it's even more reason that House Republicans should do what Senate Democrats have already agreed to do, which is raise tax rates for the wealthiest Americans in an effort to bring down the debt for everybody and avoid falling off the fiscal cliff.

Wolf, I also have some news. Tomorrow, I am told by senior administration officials, President Obama will make a statement on the U.S. economy. This will be President Obama's first statement from the White House since his reelection and no doubt will be an opportunity for him to address some of these pressing issues that are raised by the CBO report, by the fiscal cliff, by our economic conditions right now, Wolf.

BLITZER: We will, of course, have live coverage of the president's statement on the economy. You're also finding out, Jessica, some new information about the president's agenda for his second term.

YELLIN: That's right, Wolf. You know, during this election, pundits criticized President Obama for offering too few specifics during his campaign about what a second term would hold. But the truth is, he did lay out a plan for his second term. You might criticize it as too light on the details, but there was an agenda and here's some of it.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): While the details may be sparse, President Obama did outline a second term agenda. The first big challenge, deficit reduction.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My plan will cut the deficit by $4 trillion over the next 10 years. I'm going to cut out spending that we don't need. We have already cut $1 trillion.

YELLIN: Specifically, he proposed filling the nation's coffers by reforming Medicare and Medicaid and changing personal income tax rates when the Bush tax cuts expire at year's end.

OBAMA: I'm going to lower taxes for middle class folks. Let's also make sure the wealthiest households pay a little bit more.

YELLIN: The White House has pledged to veto any bill that extends the current Bush tax rates for families making $250,000 a year or more. The president also hopes to accomplish corporate tax reform in his second term. One part of that:

OBAMA: I want to reward small businesses and manufacturers who are creating jobs right here in the United States of America.

YELLIN: The election result could only strengthen the president's resolve to accomplish the next item, immigration reform. He told "Rolling Stone" magazine if he won reelection, the GOP would come on board because they will start recognizing that alienating the fastest growing segment of our society is probably not good politics for them. He won 71 percent of the Latino vote Tuesday. Senior Democrats tell CNN he's likely to push for comprehensive immigration reform.

The overall message Democrats take from the election?

DAVID AXELROD, SENIOR OBAMA CAMPAIGN STRATEGIST: I think people expect everyone to live up to their responsibilities. And one thing that is clear as I have moved around the country with the president is they're hungry for that kind of cooperation. I hope that coming out of this election people will come with a renewed sense of cooperation because it will take that to solve problems.

(END VIDEOTAPE)

YELLIN: Wolf, two other items on the president's agenda include energy reform and education reform.

Given the current politics with Congress, it might be easier for him to achieve education reform, but energy reform is something he could probably push through with executive actions of his own.

I should also add, Wolf, about that statement on the economy, I'm told that will happen at 1:00 tomorrow in the East Room -- Wolf.

BLITZER: In the East Room. That means it's not going to be a formal news conference or is it going to be part of a formal news conference?

YELLIN: Not a news conference, just a statement by the president.

BLITZER: That's where he should make it, in the East Room, as opposed to the Briefing Room. If he goes to the Briefing Room, we want to see questions. If he goes to the East Room, he can make his formal statement.

That's just from me as a former White House correspondent.

Jessica, thanks very much for that.

Kate Bolduan is here with us. She's got more on what is going on in the world of politics.

KATE BOLDUAN, CNN ANCHOR: That's absolutely right, Wolf.

We want to put the election in context, because if you look carefully at the numbers, the finish to the race for the White House was actually much closer than it seems and I actually even kept thinking Electoral College wise, but it was closer...

(CROSSTALK)

BLITZER: It was pretty close.

Let's talk a little more about that with our senior political analyst, Ron Brownstein, the editorial director of "The National Journal."

Ron, thanks very much for coming. You have a fascinating piece, your new piece that just showing how close this election really was.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: This election was looking like a crystal. It looks very different depending on what angle you hold it up at.

On the one hand, Democrats have now won the popular vote in five of the past six presidential elections, which is as much as Republicans did from '68 to '88, when they were seen as so dominating the White House. WE talked about an Electoral College.

(CROSSTALK)

BLITZER: In 2000, Al Gore, he had more popular votes, not enough electoral votes.

(CROSSTALK)

BROWNSTEIN: Right. Right. But five out of six times, they have now won the police vote. Obama is the first Democratic president to win 50 percent of the popular vote two times in a row since Franklin Roosevelt.

And as you note, he also had a pretty solid college Electoral College victory which may be as high as 332. On the other hand, he's the first reelected president since Andrew Jackson in 1832 to win a smaller share of the popular vote in that first reelection than he did initially.

If you look at it as the margin between him and Mitt Romney right now is at 2.4 percentage points, which would tie George W. Bush in 2004 as the narrowest margin of victory in the popular vote ever for a successfully reelected president, which says something about the stability, durability of the divisions in our country at the time.

BOLDUAN: How divided our country really is.

I want to show our viewers a map, real quick. So, this is something that you coined back in 2009, if I'm correct. You call it the blue wall. Tell us what you mean by that and what does it show and tell us?

BROWNSTEIN: This is another big part of the story.

There are now 18 states. The 18 states of the blue wall have voted Democratic in every presidential election since 1992, six straight times. That is the most states Democrats have won that often ever, since the formation of the modern party system in 1828.

What that means is that unless Republicans can break into this, can kind of breach the blue wall, Democrats start with 242 Electoral College votes.

BOLDUAN: So right out of the gate come Election Day, they're at 242.

BROWNSTEIN: Right, and leaving Republicans with a very narrow pathway. It's the complete reversal of that period from '68 to '88 when I started covering politics and people talked about the Electoral College lock.

They were preponderant favorites in so many states that Democrats could only get to 270 with what was called an inside straight. Now the shoe is on the other foot. Only three of these blue wall states were contested to varying degrees, Pennsylvania, Wisconsin most primarily. But in the end, Obama held all of them and that left Romney almost having to run the table on the remaining swing states, which is very different.

East Coast, from Maryland to Maine, except New Hampshire, the three West Coast states, plus Hawaii, four in the Upper Midwest, six straight times, 18 states have voted Democratic.

BLITZER: Let me read you a line that jumped out at me from "New York Times"' sort of ticktock on what happened. You read this piece, how a race in the balance went to Obama.

"It was 11:30 p.m. and Romney field teams in Ohio, Virginia and Florida called in saying the race was too close for the candidate to give up. At least four planes were ready to go and aides had bags packed for recount battles in narrowly divided states."

Now, at 11:30 p.m. Eastern, I was anchoring our coverage. As you remember, we had already projected at 11:18 p.m. Eastern that he would win Ohio and, as a result, win the presidency, the president of the United States.

But at that point, 11:30, Obama had 50 percent to 49 percent in Virginia. It was very close right there. Look at that. In Ohio, 50- 49, Obama, Romney, very close, 74 percent of the vote in. In Florida, it was 50-49, 91 percent.

Did they have a case for calling for, asking for recounts or should he have done what he did, Romney conceded?

BROWNSTEIN: I heard that Ohio call was somewhat controversial on another network.

BLITZER: Another network. We did it at 11:18 p.m. Eastern.

(CROSSTALK)

BROWNSTEIN: Look, in 2000, you learned that you should not concede too fast, when Al Gore, you know, was convinced not to concede.

And, in this, I think you learned that you should not contest too fast because in the end these states did move. You know, the states were very close at that point, but particularly in Ohio and Florida both, if you looked at the remaining vote, what was out, it was Democratic-leaning and, certainly, it was a better decision not to leap in and say I was going to contest before you had all the votes in.

Florida was still counting. As John Berman said, we may be counting until 2016, but the other ones ended up I think being pretty solid.

BLITZER: I think you're right. We looked at those counties that had not yet reported and they were pretty Democratic-leaning, Cuyahoga County and others where Cleveland is. And that's why we had our projection when we did.

Good article in "The National Journal."

BROWNSTEIN: Thanks.

(CROSSTALK)

BOLDUAN: You can read your article in "National Journal" that comes out tomorrow. Right?

BROWNSTEIN: Tomorrow and online tonight.

BOLDUAN: Great.

BLITZER: What time?

BROWNSTEIN: I didn't know exactly.

(CROSSTALK)

BROWNSTEIN: There should be a projection of that as well.

BLITZER: Thank you.

BROWNSTEIN: Thank you.

BOLDUAN: Thanks.

BLITZER: Political soul searching as Republicans look at the future of their party in the wake of the presidential loss.

And former Congresswoman Gabrielle Giffords on hand for the sentencing of the man who tried to kill her. We have details of their courtroom confrontation.

(COMMERCIAL BREAK)

BLITZER: Former Congresswoman Gabrielle Giffords confronted her would-be assassin in court today. She was among the victims at the sentencing hearing for Jared Loughner, whose 2011 shooting rampage in Tucson killed six people, wounded 13, including Giffords.

CNN's Casey Wian is in Tucson for us.

Casey, you were inside the courtroom with the victims when all of this went down today. What did they have to say? CASEY WIAN, CNN CORRESPONDENT: Well, one of the most striking examples of testimony from these victims came from a man named Bill Badger, 74 years old at the time of the shooting, a retired Army colonel. He went to that community meeting to talk to Gabrielle Giffords about Obamacare. He survived the shooting.

(BEGIN VIDEO CLIP)

COL. BILL BADGER (RET.), TUCSON MASSACRE VICTIM: He got about 10 feet from me. He pointed at me. And he had reached and grabbed it with this hand. Why, I ducked. And when I ducked, I felt the bullet go right through across the back of my head.

(END VIDEO CLIP)

WIAN: Now, despite those injuries, he was one of the people who helped subdue Jared Loughner after the shooting.

Of course, the testimony that everybody was waiting to hear from, coming from Mark Kelly, the husband of Gabrielle Giffords. They walked up to the podium and she still needs help walking. It's very clear she still is trying to recover from her injuries. She's still partially blind. But her arm is in a sling because it remains paralyzed.

They gave very emotional, an emotional statement. Here's in part what Mark Kelly had to say. They looked directly at Loughner and he said: "You may have put a bullet through her head, but you have not put a dent in her spirit or her ability to do good."

Then he looked directly at Loughner and said, "Gabby and I are done thinking about you."

He will have the rest of his life, Jared Loughner will, seven consecutive life terms, plus 140 years to think about those words, Wolf.

BLITZER: The victims, Casey, they will have to live with this obviously forever. But did you get a sense that there was at least some sense of closure for them today?

WIAN: What was interesting, some of the victims said this is not closure. The judge in fact said he does not like the word closure. He said what this is about is resolution. Many of those victims said that they actually forgive Jared Loughner.

They did stress, though, that they want him to continue taking his medication and the judge ordered that he do so, so he will be aware and remember what he did to these people for the rest of his life, Wolf.

BLITZER: Casey Wian on the scene for us, Casey, thanks for that report.

BOLDUAN: Gabby Giffords' husband, Mark Kelly, will relive that dramatic courtroom encounter that Casey was just talking about on "PIERS MORGAN TONIGHT" 9:00 Eastern, 6:00 Pacific right here on CNN.

First, it was the superstorm and now a nor'easter. It's a cruel and cold one-two punch for thousands of people. We will hear from some of them next.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Deep disappointment as Republicans contemplate their White House loss, so where does the party go from here? Two Republican lawmakers, they will weigh in next.

(COMMERCIAL BREAK)

BLITZER: Kate's here with more of the day's top stories, including that nor'easter that is compounding problems out there for so many folks.

KATE BOLDUAN, CNN ANCHOR: I know. Absolutely, Wolf.

The nor'easter we're talking about. Just when they might have thought things couldn't get any worse, they did for tens of thousands of people still struggling to recover from the superstorm.

CNN's Deborah Feyerick is talking to some of them.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT: When did you get the order to evacuate?

UNIDENTIFIED MALE: We already had about three or four feet of water in the house. Where were you going to go then? You were just running upstairs for your life. This is my house here.

FEYERICK (voice-over): Richard Bennett lives in Gerritsen Beach, just across the water from Breezy Point, where 110 houses burned. That is Zone A. This is Zone B; 10 days after Hurricane Sandy hit here, there's no electricity and little official help and people are suffering, their pain compounded by the snow brought by the nor'easter.

UNIDENTIFIED FEMALE: They just want some warmth and some normalcy back in their lives.

FEYERICK: Residents say they have been told Con Edison won't turn on the power until each of the 200 homes is inspected by a licensed electrician, a big expense to people who say they have already lost everything.

UNIDENTIFIED MALE: They want licensed electricians and licensed plumbers to go into each of these homes, 2,000 homes. They won't have lights on until Christmas.

FEYERICK: And it's not just an absence of power and light. The FEMA agents needed to assess the damage so people can begin to tear out walls and floors in their freezing, wet homes, says Wendy Taylor, whose mom has lived here for more than 50 years.

UNIDENTIFIED FEMALE: She is, you know, running on fumes and everybody wants to know what the next step is.

FEYERICK: As for Richard Bennett, he is tearing out his walls anyway, sleeping on the floor and hoping against hope more official help will finally arrive.

UNIDENTIFIED MALE: Maybe, hopefully, I can get the electric back on. I hope. I pray.

(END VIDEOTAPE)

FEYERICK: And a lot of people tonight really just relying on prayer. This is a relief tent that has been set up behind me. We have some residents that have been coming all throughout the day and they're now getting warm meals and they plan on staying in their homes.

And, Kate, Wolf, I just want to show you right down here, OK, the only real light you can see aside from this official light are those that have been set up on generators, but, otherwise, just kind of take a look. It's quite dark and really a little bit eerie. That is the reality for the thousands of people who have chosen to stay -- Kate, Wolf.

BOLDUAN: Really amazing when you see the darkness just there behind you.

Deborah Feyerick, thank you so much.

(NEWS BREAK)

BLITZER: Any party that loses an election certainly has to try to answer the question why.

BOLDUAN: Absolutely.

That's where we find Republicans today in the wake of their second consecutive presidential loss, wondering what they and their candidate should have done a little differently.

BLITZER: CNN's chief national correspondent, John King, is over at the magic wall for us.

John, one theory is that if more white voters had turned out, Republicans would have won the election. You're looking at the numbers.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And, Wolf, a lot of conservatives are pushing that. They are saying they thought the percentage of the white vote would be higher.

This is what it was nationally. Republicans going in said that number, white voters, had to be 74 percent, 75 percent for Mitt Romney to have a chance to win the election. But if they blame this for the loss, think about four years from now, because America is growing more and more diverse, 13 African-Americans. That was consistent with 2008.

But for the first time, Latinos cracked 10 percent of the national electorate and they came up even more in some key swing states. Let's take a closer look at this. Nationally, Governor Romney got 59 percent to 39 percent the president among the white vote. Heading in, Republicans were saying you had to keep the president because of his minority coalition to about 37 percent. So, the president exceeded what the Republicans hoped he would get nationally.

Let's take a look at this, though, through swing states. As Republicans look ahead, especially four years from now, in Florida, the white vote was even smaller, 67 percent. Why? Because of the Latino population, Cubans and otherwise. The non-Cuban population is bigger than the Cuban population. And, look, six in 10 of those votes went to the president. So if you're counting on more white voters in Florida four years from now, you might be making a suicide pact as a political party.

Ohio, the white vote was actually bigger, 79 percent. Governor Romney lost this state, too. African-Americans, a bigger population. The Latino population is tiny, only 3 percent in Ohio. But it will be bigger four years from now, and you can count on that.

And look, this is one of the states where the president cracked 40 in the white vote. A lot of people think that is because of industrial blue-collar workers and the auto bailout.

So again, Ohio one of the least diverse states, but still, the white vote not enough to carry Governor Romney.

In Colorado, the Republicans got the number they wanted, Wolf and Kate: 78 percent of the vote there. But look, the president had 44 percent and, more importantly, four years from now, this number, the Latino population, again, in the state of Colorado will be even bigger and the president there -- let me pop out the pie chart -- 75 percent of the Latino vote in Colorado.

So, if you're just thinking about the white vote. Let me switch for you here. These are the states that, if you look at the census and other demographic data, are getting older and whiter. Look, all but Indiana are blue. So if the Republicans are banking just on more white voters four years from now, that's a risky bet.

BOLDUAN: And John, what about conservatives who say that Mitt Romney should have focused more on social issues?

KING: There are a lot of people saying he was not Republican enough, not conservative enough on social issues, if you will. Again, not saying the Republican Party should abandon its principles on these issues, whether it be abortion or same-sex marriage, but they have to be very careful in thinking that making those the priority are going to win them the next presidential election.

Look at nationally. Forty-one percent of the electorate this time described themselves as moderate. A lot of people are tired of the partisanship, tired of both -- both ideological extremes, if you will. Forty-one percent of the electorate describe themselves as moderate. Let's pull out the pie chart. The president getting nearly six in ten of those votes. Again, that's how you win a presidential election.

And let's go through the battleground states. You slide it over, 43 -- whoops, I slide it over too far. Stop that. Forty-three percent of the voters in battleground Florida describe themselves as moderate. Again, you have to be careful there, if you want to win that state four years from now. In Ohio, it's 42 percent; 35 percent conservatives there. If you come over to Colorado, 39 percent describe themselves as moderate.

So again, let's come back to the map and let's look at some of these issues. If you start here, on the abortion issue, you see the clear generational divide. Republicans tend to get the older vote: 54 percent in our exit poll said abortion should be legal; 64 percent of younger voters. So, a divide there. If you're trying to get to younger voters in the next election, you better be careful about emphasizing social issues. That was abortion.

Let's come over here and look at the issue of same-sex marriage. Again, a lot of conservatives saying that Governor Romney should express these issues, he would have done more to gin up conservative turnout. If you're thinking ahead four years from now, look at this: among older voters, they don't favor same-sex marriage. They oppose it. But among younger voters, they're more tolerant, 18 to 29, even the next group.

So Kate and Wolf, going forward, if you're looking at the growing population and the demographic changes, again, asking for worldwide culture, thinking you should emphasize social issues, that's a risky bet.

BLITZER: Good point. All right, John, thanks very much. Good stuff to discuss with our guests right now.

Joining us, Republican Congressman Jason Chaffetz of Utah and Republican Congressman Steve LaTourette of Ohio. Thanks to both of you. Two Republicans.

Let's start with you, Congressman Chaffetz. Why -- you were a huge, obviously, Romney surrogate and appeared on our program many times. Why do you think Romney lost?

REP. JASON CHAFFETZ (R), UTAH: Well, as much as anything, I think President Obama won. He did a good job and better job, I think, of communicating. I think Mitt Romney was a wonderful candidate. He worked hard. He raised all the money that he needed to raise. I mean, he had the network in place.

But the ground game and the communication, I think, was tipped in favor of the president, and we, as Republicans, better get our act together in how we're communicating.

BLITZER: CBS News reported that -- quoted one adviser to Romney as saying he was shell-shocked. They were shell-shocked by the loss. Have you spoken to Governor Romney?

CHAFFETZ: I have not since this, and we were a bit shell- shocked. I thought we had much more of an enthusiasm gap that did not seem to materialize. I know John King was talking about a lot of percentages. But I just thought the sheer number would be larger of people showing up at the polls, because they wanted to get rid of Barack Obama, and they were in favor of Mitt Romney. They realized we were off track, but that -- that did not materialize, and I still don't fully understand why it did not.

BLITZER: Congressman LaTourette, when you look at all the data, all the information coming in, in your own political sense -- and you know politics -- was it campaign error that resulted in his loss? Was it a sense of the party's economic policies, for example, or was it a brilliant campaign by the Democrats?

REP. STEVEN LATOURETTE (R), OHIO: Well, it was all of those things combined. And it's not just my political sense, because we knew this day was coming. We actually had Republican Main Street commissioned Frank Luntz to do a poll on election night of people who had actually voted. And those numbers were clear that, in both parties, while they voted for gridlock. Again, it's not gridlock to have gridlock, but vote and expect people to get things done.

What happened in Ohio -- and we're glad the election is over because we don't have to watch those stupid ads any more -- but what happened in Ohio is that the president's campaign, the brilliant part was that they recognized that this was going to come down to eight states, and so they really ignored 42 states. And they defined Mitt Romney in August.

Now, by the time the new Mitt Romney showed up at the first Denver debate, and that's when he surged all over the country, we couldn't take the scab off for socially moderate, fiscally conservative women. They had Mitt Romney defined in their head, and even though he did a brilliant job in Denver and he ran a good campaign thereafter, it was too late.

BOLDUAN: Well, let's talk about kind of the social issues. And there's been a lot of post-mortem, Monday morning quarterbacking about what Mitt Romney did wrong. Some conservatives saying that it was a lack of conservatism. He wasn't the right candidate; he was too moderate.

You're retiring from Congress. You are probably -- you're one of a dying breed. You are a moderate. Was it a lack of conservatism?

LATOURETTE: No, and the numbers don't show that. The Republicans who showed up voted for Mitt Romney. The Democrats who showed up voted for President Obama. And actually, more Democrats voted for Mitt Romney than the Republicans voting for Barack Obama. It's not a matter of being -- and where Jason's from, I think -- I think Mitt Romney won Utah. He didn't win Ohio, and he didn't win Ohio because...

BLITZER: Utah was not close.

LATOURETTE: Well, I'm sure it wasn't. And the reds were reds, and the blues were blues. And that's why the president focused on eight states. And I will tell you that he didn't win Ohio because every time we got these socially moderate fiscally conservative women close to us, some chucklehead in Indiana or Missouri would say that being pregnant after being raped is a gift from God. And so, you took the women who were interested, on the cusp, and drove them right back to the Democratic Party.

BLITZER: You make -- told the story about your wife, who's a Democrat.

LATOURETTE: Sure.

BLITZER: She was going to vote for Mitt Romney.

LATOURETTE: Well, she was. And she yelled at me for disclosing how she was voting this morning. But the fact of the matter is, I grew up in the suburbs of Cleveland, and 97 percent of my graduating class is Jewish. And so those friends said to me, you know we're not crazy about what the president is doing with Israel, to be honest with you. We're thinking about voting for Mitt Romney.

But when someone makes the Akin/Mourdock statements and drives them back, they think the Democrats can take money out of their wallet, but the Republican extreme can actually get into their bedroom and mess up their lives.

BLITZER: Let's let Congressman Chaffetz respond to that. What do you think about that, Congressman?

CHAFFETZ: Well, again, I think that communication has got to be stepped up. And when somebody does say something on the national stage that's stupid, we have to collectively do a much better job and swifter job of knocking that down.

We also have to come to grips that how we communicate is changing in this world. My family, we don't have a land line in our home. When we watch television, there is a DVR that fast forwards through the commercials. And so, how do you communicate with that younger generation? We can't keep playing as if we can just spend hundreds of millions of dollars on these TV ads and -- when the other side is doing the same -- and that you're going to break through.

So, particularly for the younger generation and then certainly into those other, you know, the Hispanic population, those types. I just don't think we're cutting it there. We have the right message. I think we're right on principle. We don't do a very good job of communicating. BLITZER: All right. I want both of you to hold on for a moment. We have much more to talk about, including fears of 9.1 percent unemployment. It's 7.9 percent right now. A dire warning about the so-called fiscal cliff just out today. We'll talk about that with our guests when we come back.

(COMMERCIAL BREAK)

BLITZER: We're back with our guests, Republican Jason Chaffetz of Utah and Republican Congressman Steve LaTourette of Ohio.

We're watching what's going on. Congressman Chaffetz, the Congressional Budget Office today came out with this dire report that, if you go over the fiscal cliff, that there's nothing resolved by the Democrats and the Republicans and the president before December 31, they say unemployment could jump up to 9.1 percent and we could be facing another serious recession.

There's the question for you. If it comes down to an increase in taxes for the wealthiest Americans, a modest increase of 35 percent to 39.6 percent, where it was during the Clinton administration for people if they're making over $1 million a year, everyone else's taxes stay the same, and there's significant spending cuts, would you be willing to go along?

CHAFFETZ: Well, the tax increase, as you talk about, is not going to solve our problems.

BLITZER: I know.

CHAFFETZ: We're not a tax increase away from solving the problem.

BLITZER: As a matter of principle to help the process, to get the Democrats on board, for people making a million dollars a year and more, increase their taxes a little bit in order to get a deal and avoid this dire scenario that the Congressional Budget Office laid out today.

CHAFFETZ: Well, Wolf, again, I don't think that will ultimately solve the problem. I'm with Speaker Boehner on what he said. And that is, I think there's common ground in getting rid of some of the deductions and loopholes. They think we can come together. Republicans and Democrats on that, but I'm not interested in raising the actual rates.

I, too, was elected. These are principles that I stand on and that are important to me. So let's find the common ground. And I do like what you said as you framed it. We need to cut spending. We've got to stop spending money that we don't have.

And so if we can come together on those types of things, I think both parties want to do it. I think Speaker Boehner put out an olive branch, does want to work together, and I think that's the direction we've got to go. BOLDUAN: I'd like to get your kind of raw, political assessment of this. Because you came into office the same time as John Boehner. You know him very well. You served a long time with him. You are retiring. And one of the reasons you cited for retiring is the debt debacle and the inability for Washington to act and do something important.

Are they going to -- are they going to be able to do it this time? Because we're dealing with the same deck of cards and the same balance of power.

LATOURETTE: I'll tell you, I'm hopeful. I just talked to the speaker today and showed him the results of this poll that I was telling you about. And I think, if left to their own devices, the president and the speaker would have reached a big deal a year ago on this.

But what happened is both of them were way out over their skis in terms of -- it's a little bit like John Belushi in "Animal House." "Who's with me?" And you turn around, and there's nobody behind him. And -- but Jason is right. I mean, as a Republican, the last resort should be to raise taxes.

BLITZER: On anyone.

LATOURETTE: On anybody. But you can get there from here. I mean, I put, with Jim Cooper of Tennessee, Simpson-Bowles on the floor and during the Ryan budget discussion. We got 38 votes. And -- but you can get there from here by cleaning out the underbrush and creating $1 trillion of new revenue, not tax increases, new revenue and...

BLITZER: By eliminating deductions and stuff like that.

LATOURETTE: Well, sure. But you know, the president said it's fairy dust or whatever. I was here for the '97 budget act, and I will tell you that we balanced the budget back with President Clinton much faster than we thought, because we did see that economic growth as a result of getting your fiscal house in order.

So, you know, this is going to be a step-by-step process. I think raising taxes should be the last resort. Again, in this survey, Republicans, 69 percent of Republicans said, we'll consider that as long as you don't just take the money and blow it. If you make the big deal. That's what people want.

BLITZER: Congressman, we've got to leave it there. Thanks for coming. Good luck with your next adventure.

LATOURETTE: I'm looking for a job. Call me.

BLITZER: There is life after Congress. Jason Chaffetz, as usual, thanks very much for joining us, as well. Now they're getting ready for some snow there in Salt Lake. Enjoy it. Have fun, go skiing, do whatever you do out there.

BOLDUAN: You're skiing and I'm chasing it. Thank you so much.

Still ahead, voters this week didn't just choose the next president and decide who to send to Congress, but in two states they also made it legal to smoke pot without a prescription. But do the voters have the final say?

(COMMERCIAL BREAK)

BOLDUAN: It was a special delivery of snack food to the Colorado governor's office. On Tuesday voters approved a measure legalizing marijuana in the state for recreational use. But before the munchies could set in, the governor warned against premature celebrations, since marijuana is still banned by federal law.

As CNN's Ed Lavandera reports, that puts the state and the feds in a pretty awkward position.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): It's the kind of story that makes headline writers salivate.

GOV. JOHN HICKENLOOPER (D), COLORADO: I can only imagine, you know, what Jay Leno and company are going to be saying over the next week or two. There will be lots of jokes, and I'm sure there will be plenty of snack foods discussed.

LAVANDERA: After Colorado voters approved legalizing marijuana, the state's governor, John Hickenlooper, could only warn everyone not to break out the Cheetos and Goldfish just yet. The fact is no one knows what will happen next.

HICKENLOOPER: It's hard to imagine the chaos that would result if state by state you had, you know, one state legalizing it and one state not legalizing it.

LAVANDERA: But that's exactly what's happening. Seventeen states have already legalized marijuana for medicinal use, and Colorado and Washington state are the first to approve selling the drug like alcohol. The vote has put these states on a collision course with the federal government, which still says possessing marijuana is a crime.

SAM KAMIN, LAW PROFESSOR, UNIVERSITY OF DENVER: It simply can't go on the way it is. It can't be a big industry and a federal crime at the same time.

LAVANDERA: Sam Kamin is a University of Denver law professor. He says as more and more states legalize marijuana for medical purposes, the federal government looked the other way.

KAMIN: Every store that sells marijuana here is violating federal law. The federal government could come in. They could seize assets. They could charge people criminally. They could send people to jail for scores of years. They have chosen so far not to do that. LAVANDERA (on camera): Colorado has a lot of experience regulating marijuana. There are more than 500 licensed medicinal marijuana clinics across the state, and then there is the cultivation room, where all of this marijuana is grown. Hundreds of different strains and flavors. All of this happening right in the heart of the city of Denver.

(voice-over) The Colorado amendment would allow anyone over 21 to possess up to an ounce of pot. It would allow license production, and weed sales would be taxed up to 15 percent. The profits they slated to help pay for the construction of public schools.

Federal prosecutors and law enforcement aren't saying much, only that they're reviewing the ballot initiatives.

MASON TVERT, AMENDMENT 64 SUPPORTER: I think Colorado voters are clearly just fed up with marijuana prohibition.

LAVANDERA: Mason Tvert was part of the group that pushed to legalized pot in Colorado. He says it could generate nearly $50 million a year for the state.

(on camera) This law is just going to cause chaos. What do you say to that?

TVERT: I think that's just absurd. Take marijuana out of the underground market. Let's stop giving all of our -- the profits to cartels and gangs. Start putting those profits towards Colorado business, and let's start generating hundreds of millions of dollars in tax revenue that could be benefiting our state as opposed to going overseas or going towards criminal activity.

LAVANDERA (voice-over): It's an awkward time. Voters have essentially passed a smoky bong to the federal government, and it needs to figure out what to do with it next.

Ed Lavandera, CNN, Denver, Colorado.

(END VIDEOTAPE)

BOLDUAN: More than -- more than half the people ages 18 to 25 have smoked marijuana. That's from a national survey on drugs and mental health from the CDC back in 2010. Compare that, though, to more than 60 percent who have smoked cigarettes and more than 80 percent of people who have had an alcoholic beverage.

BLITZER: Let's check in quickly with Erin Burnett to see what's coming up "OUTFRONT" at the top of the hour.

What's going on, Erin?

ERIN BURNETT, CNN ANCHOR: I just have to say, you see this front of this sports section for "USA Today." Yes. That is a pot leaf. It's got everybody talking. We've got something on that, of course, Wolf. Plus the fiscal cliff. You know, this is sort of a showdown. John Boehner came out today and spoke. I overheard a lobbyist today on the train back from Washington to New York, saying, "The American people don't have patience. We have to get this done right away" to a very senior Democratic leader of the Senate. And that really seems to be case. We're going to talk about that and why the president so far has been silent on that issue.

Plus tonight, Wolf and Kate, Ann Stevens is going to receive an award for her brother, the Common Ground Award, from the secretary of state. She also met with the president today and his national security adviser. Ann Stevens will be our guest tonight in her first U.S. television interview.

And all that's coming up, top of the hour.

BLITZER: The sister of the slain U.S. ambassador to Libya.

All right. Good idea. I'm looking forward to that. Thanks, Erin.

Thieves carry out a dramatic heist, rolling up to a jewelry store inside a London mall -- get this -- on motor bikes, and it's all caught on tape.

(COMMERCIAL BREAK)

BLITZER: All right, Kate, watch this. Robbery by motor bike. Thieves carried out a daring heist at a mall. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): If you think only Batman would go crashing indoors on his bat cycle, well, holy heist, look at this.

Three motorcycles were captured on a surveillance camera as they roared up the walkway in a London shopping mall called Brent Cross shortly after the mall opened that day. Watch the security guy back off as six men riding two to a bike, dismount, armed with axes and baseball bats. Half the men go into the jewelry store, while one of the guys standing guard outside smashes a glass barrier. Shoppers below scatter.

Rick Treaster (ph) was in a nearby store.

RICK TREASTER (PH), WITNESS (VIA PHONE): People running around; the sales assistant seemed to be screaming. She was quite hysterical.

MOOS: The men inside were shoveling jewelry -- Cartier and Rolex watches -- into bags.

(on camera) This kind of heist is called a smash and grab, and motorcycle smash and grabs aren't all that unusual in London. What's unusual is for it to happen inside a shopping mall. TREASTER (PH): It's exactly like something out of a James Bond film. It didn't seem real. It was just like a dream.

MOOS: While the robbers were grabbing loot inside the store, a clueless couple strolling below was hustled out of the walkway. In less than two minutes the bad guys were getting back on their bikes.

A shopper across the way took this video. Rick Treaster (ph), a commercial photographer, was also able to take one shot as the robbers zoomed by.

TREASTER (PH): He was like definitely looking at me, and he shouted something.

MOOS: Rick couldn't make out what.

During outdoor smash and grabs bystanders have tried to kick the bikers, but at the mall...

TREASTER (PH): It didn't occur to me to try and stop them.

MOOS: ... they left the way they came. Police discovered the abandoned bikes a few miles away, near a golf course. No robbers. They did drop some of their booty as they roared away, a return without a receipt. Hey, give that back.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BOLDUAN: That looks scary.

BLITZER: In London, they've got video cameras, closed-circuit cameras every place to take these kind of pictures.

BOLDUAN: Speaking of Bond...

BLITZER: The new James Bond film.

BOLDUAN: Yes. You're going to see it?

BLITZER: I'm in it.

BOLDUAN: You already saw it. You don't even need to see it.

BLITZER: I haven't seen it, but I'm in it. I play Wolf Blitzer.

BOLDUAN: Shameless Wolf Blitzer plug.

BLITZER: That's it for us. Thanks for joining us. "ERIN BURNETT OUTFRONT" starts right now.