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White House Makes Fiscal Cliff Offer; Bloody Week in Iraq

Aired November 30, 2012 - 15:00   ET

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

DON LEMON, CNN ANCHOR: The president's proposal calls for $1.6 trillion in new tax revenue, $50 billion for new stimulus spending, and about $400 billion in entitlement cuts.

Republicans say the president's opening bid is nothing but a political stunt. So where does that leave us? After months of hearing about the fiscal cliff, there are no signs of a compromise plan.

Let's bring in now senior congressional correspondent Ms. Dana Bash.

Dana, Republicans say President Obama's opening offer is, you know, all take and no give here. Do they feel like the president is wasting their time?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes. They do.

And, you know, a lot of times when we see this kind of to-ing and fro- ing in public, Don, it kind of masks what is really going on behind the scenes, which is real negotiating. So I asked that question of John Boehner, who has been through this kind of negotiating many, many times over many years, if that's what we're seeing or if we're at a stalemate. Listen to this.

(BEGIN VIDEO CLIP)

QUESTION: Be candid here about where we are right now. The past 24 hours, is this the necessary public posturing that needs to go on to get an endgame or is there serious stalemate right now?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: No, there is a stalemate. Let's not kid ourselves. I'm not trying to make this more difficult. If you watched me over the last three weeks, I have been very guarded in what I have to say because I don't want to make it harder for me or the president or members of both parties to be able to find common ground.

But when I come out the day after the election, and make it clear that Republicans will put revenue on the table, I took a great risk. And then the White House spends three weeks trying to develop a proposal and they send one up here. They want to have this extra spending that is actually greater than the amount they're willing to cut. I mean, it is -- it was not a serious proposal. And so right now we're almost nowhere.

(END VIDEO CLIP) BASH: Don, we're also told that when the treasury secretary went into the office of the Senate minority leader, Mitch McConnell, he got the proposal and he laughed. He literally laughed and he said this is just not a serious proposal.

Let me just tell you quickly what is going on behind the scenes that has given this so much anxiousness to both sides, particularly the Republican side. Our Deirdre Walsh has been doing some great reporting and it is not so much the big issue that divides them, which is whether taxes for the wealthy should go up or not, but it's the fact that Democrats put in the proposal things that they know that Republicans will be very difficult for them to go for, $50 billion in stimulus.

You mentioned that coming in, and even giving the president the authority to raise the debt limit automatically and giving Congress' role or making their role a lot more minimal when it comes to that. Those are the kinds of things that really irked Republicans.

LEMON: Dana, you're going to be posted there for a while, through the holidays. Let's hope not, but probably. Thank you very much. Thank you, Dana Bash.

(CROSSTALK)

LEMON: We just got word the CEO of that toy factory President Obama toured today is going to speak with us. The president likened Republicans to Scrooge today in his news conference while touring the Pennsylvania factory.

I want to bring in Michael Araten. He's the CEO and the president of K'NEX Brands.

Mr. Araten, thanks for taking the time to meet with us.

The president is really drawing a line in the sand over the fiscal cliff talks. He said Republicans must first cut a deal on middle- class taxes. Then they can wrestle over spending cuts. So, as a businessman, do you agree with this strategy?

MICHAEL ARATEN, CEO AND PRESIDENT, K'NEX BRANDS: Well, Don, great to talk to you today.

I have to say it was a unique day here at K'NEX Brands to have Marine One landing in our front yard.

LEMON: I will bet.

ARATEN: And I couldn't ask for a better endorsement for the holidays than having the president of the United States so go buy some K'NEX this year.

But to answer your question directly, I think what the president actually said was what he said on the campaign trail, which was we're going to have -- both sides are going to have to give, and we're going to get to a compromise here and get a solution. And when I see the public skirmishing back and forth, frankly, as a businessman, I'm frustrated that Congress and leaders in Congress don't seem to be able to understand the American people are watching and what they want is a solution, not more bickering.

LEMON: What they want is a compromise. And even as a small business person, everyone talks about what the fiscal cliff could do to small business, what Obamacare can do for small business, but you said we shouldn't worry about that so much, that we should get some sort of compromise in order to keep moving and keep talking and keep moving forward?

ARATEN: Well, I think that it was pretty clear during the course of the election and since and even in the president's speech today where he said he's willing to give on some revenue and some spending cuts, he's proposed some, he's already passed some into law.

And beyond that, just from my perspective, what I see is that we know that we're a confidence-based economy, where 70 percent of the economy is driven by consumer spending. And anything that puts a crimp in consumer spending is not good for the economy. So to put a tax rise, a tax rate increase for the middle class makes no sense to me.

Someone who makes $50,000, $60,000, $70,000 a year will lose $2,000 or $3,000 or $4,000. That will take away a lot of discretionary purchases from folks like me and from travel and a whole host of other areas. I hope that our leaders in Washington are listening and that they take the steps necessary to get to a compromise before the end of the year.

LEMON: Very quickly and very simply, are you optimistic or pessimistic?

ARATEN: I'm an optimistic -- I'm very optimistic. I'm 1000 percent confident they will get this solved by the end of the year.

LEMON: All right, wanted to know that as a business owner what you thought.

Thank you, Michael Araten. And we appreciate it.

ARATEN: Thank you, Don.

LEMON: So what was meant to be a discussion on recovery efforts in the wake of superstorm Sandy erupted into tears and outbursts of anger. It was standing room only at the town hall meeting on Staten Island as people who lost everything begged for help from FEMA.

WABC's Carolina Leid was there.

(BEGIN VIDEOTAPE)

CAROLINA LEID, WABC REPORTER (voice-over): More than 700 people packed the (INAUDIBLE) auditorium for a town hall meeting for superstorm Sandy victims on Staten Island.

It was a time to discuss business and a chance to lay out their emotions.

UNIDENTIFIED FEMALE: We are extremely, extremely frustrated. This is what you need to understand. We go from one to another. We go from FEMA to our homeowners. My homeowners insurance offered me $150. What can I do with that?

LEID: More than 100 people were left out in the lobby when the auditorium reached capacity.

UNIDENTIFIED MALE: I don't know if I want to go in there now after what I'm hearing from the people.

LEID: Borough President James Molinaro organized this meeting for FEMA representatives and other city officials to answer questions.

JAMES MOLINARO, STATEN ISLAND BOROUGH PRESIDENT: Whoa, whoa. Shh. Shh. Shh. You wanted me to get up. Do I have the right to speak? Do I have the right to speak?

LEID: Some questions were answered

UNIDENTIFIED MALE: The outdoor air quality in New York City, based on our testing, is fine, OK? The quality of air...

LEID: While others took the opportunity to vent their frustrations.

UNIDENTIFIED FEMALE: It is not safe for us to live there. The next storm that hits, everybody is going to be vulnerable.

LEID: And some just gave up.

UNIDENTIFIED MALE: You think it's a joke? You really think it's a joke? You go home for the holidays. I don't. But you sit there with don't smile. You know what? I wish it was an election, because you would do better this year.

(END VIDEOTAPE)

LEMON: A very contentious meeting.

Want to bring in Mike Byrne, federal coordinating officer at FEMA.

And 700 people were there, Mr. Byrne. And these are people who say Staten Island looks the same now as it did a few days after Sandy. What is FEMA doing right there now? Where is the money going?

MIKE BYRNE, FEMA: We have a lot of people on the ground in Staten Island.

And, first and foremost, you know, people -- you know, this storm hurt a lot of people. They have a right to be angry about that. But the important thing is to realize that we're there, and we're not leaving until we get it done. We have put into the community, into the New York community over $718 million in 30 days.

We're getting the money to the people. But it's not enough. We have got to do more. We have got to continue to work with them.

LEMON: Well, I think absolutely. I think most people would agree with that. The people at these meetings, at this meeting, they jeered when promised that air quality is safe. You heard it in the story there. And we're hearing reports of breathing problems and skin irritations. How is FEMA addressing the health concerns?

BYRNE: Well, we work with the local officials, with the city health department, the state department of health and we will also bring in teams of our experts to help, either from HHS or the Environmental Protection Agency.

But, you know, look, we're going to do everything we can. We're going to bring whatever teams we need to do get in there to, you know, make sure that it is a safe place. But some of these places are not safe. And for that, we're providing other places for them to go.

We have over 3,000 families that are in our temporary shelter -- transitional shelter program. We provided rental assistance to, you know, thousands of people. We're going to keep doing those things so that they can be in a safe place, while they're trying to rebuild their neighborhoods.

LEMON: Then where is the disconnect here? You seem to be saying you think you're doing a fairly good job and that, but you can do better. The people there don't seem to think so. Where is the disconnect here, Mr. Byrne?

BYRNE: I'm never satisfied with the job I'm doing as long as I see people suffering. So I continue to push my forces, push my team, push all of the capabilities that we can and to help empower, not just FEMA, because it is not just FEMA.

It's to empower volunteer agencies that are out there, the private sector, the private companies, the insurance companies that are also helping and plugging money into it. But it is our responsibility to work together, and we have got a good team working together, but none of us is satisfied with the progress we're making.

LEMON: Let's talk about housing now. FEMA has just extended temporary hotel accommodations, but the announcement came on the day victims were to supposed to check out. Many had already left and so why not give them earlier notice?

BYRNE: We will work at that. What we're doing is we have to make sure that we have the available space, that we have the ability to do it, and it is a pretty automatic program.

We're not going to put people at risk, but we're also trying to find a better solution for them. We're trying to find rental places where they can rent for longer term while they're working on their homes and also we're doing it an extraordinary new program called STEP, where we're getting in there, we're providing assistance to temporarily get their homes themselves so they can get back in the neighborhoods, to be able to get minimum repairs so that they can move back into their houses. LEMON: But my question was, why not give them earlier notice?

BYRNE: Well, you know, the program, you know, requires us to do an evaluation. We will work harder to try to give them earlier notice, but it is only every 14 days. So we have to keep evaluating as to whether or not it is something that we can continue to support.

LEMON: You put first-responders on luxury cruise ships but not victims. Now you're considering housing victims on small boats. Do you think that they would be happy with that?

BYRNE: We're not -- we're not considering boats for victims. In fact, the teams I have right now, I have over 800 DHS surge capacity working with FEMA that are doing street-by-street community relations. They're staying not on luxury ships, but on training vessels with three bunks to there. There are people that -- you know, these ships were designed to have younger people on them.

We're putting people on there and they're willingly -- they're proud to be part of the effort and they volunteered to do it and we have got them on the three training vessels. And in fact, two of them are on Staten Island.

LEMON: So the thing about housing people on boats, not true?

BYRNE: Not true.

LEMON: OK, Mike Byrne, thank you.

BYRNE: You're welcome.

LEMON: Up next, polygamist leader Warren Jeffs may be in prison, but he still controls his massive ranch in Texas. And prosecutors are trying to change that using his secret journals. The brand-new developments next.

(COMMERCIAL BREAK)

LEMON: "On the Case" now: The polygamist leader serving life in prison for child sex abuse is back in the news. Warren Jeffs still commands his followers from prison.

Now the Texas attorney general is moving to seize Jeff's once secret compound. The Yearning for Zion Ranch in West Texas is what we're talking about. That's where prosecutors say Jeffs and his followers abused children and prosecutors are using Jeffs' own words against him.

Criminal defense attorney and former prosecutor Anne Bremner "On the Case" for us right now.

Anne, prosecutors are quoting parts of Warren Jeffs' diaries seized in a 2008 raid in which more than 400 children were removed from the compound. So how do the diaries' entries bolster their case to seize control of the ranch? ANNE BREMNER, DEFENSE ATTORNEY: They have to show that there's a connection with money laundering and other crimes with this particular property.

And what that basically means is, is you take money to take things that are illegal to make them look legal. So what he's talking about in his diaries is a lot of illegal activity at the Yearning for Zion $33 million compound that was built for pedophilia, bigamy, polygamy and he was housed there as a fugitive. That's what they need to do. And he's probably the biggest help that they have because he went into great detail about his intentions for the use of that property.

LEMON: Anne, will this be an easy process, seizing property used in a crime?

BREMNER: It is one of the easiest things the government can do in a criminal case and one of the hardest to defend. They simply have to show connection with the crime and then they simply have to have a low burden, which is preponderance of the evidence, more likely than not, 51 percent, and they take the property.

And then they can sell it. They can do whatever they want with that property. And the owner is the one that has a right to notice in a hearing, but they have got a real uphill battle and that owner would be Warren Jeffs himself to keep that property.

LEMON: And it always surprises me, because Jeffs is not the only criminal who continues to run their operation from prison. How is it possible and is there any way to stop it?

BREMNER: Isn't it amazing when you see that he sends edicts to the people, his followers, saying, hey, if they come to the property, take appropriate action, whether that's violence, et cetera?

He's definitely communicating with them to make this like a Branch Davidian maybe, arguably. But they have certain rights in prison. You don't give up all your rights. And one of the rights is the First Amendment right to communicate. But that can be tempered by virtue of your communication because if you're out there telling people to commit crimes, or you're saying I want to escape, or that kind of a thing, then they can monitor the information.

Maybe here they were waiting for him to hang himself and maybe here to put the final chapter in this ugly, ugly story by seizing this property and ending his empire once and for all, they wanted him to say some more things. I don't know. They could have stopped him now, but running a criminal enterprise from prison, you know, who would have thunk, ever, especially in this case.

LEMON: Absolutely.

Anne, thank you. Appreciate it.

It is a game that everyone wanted to win, this week's Powerball that was worth a whopping half a billion dollars. I'm still here, which means I did not win. Up next, find out what one of the winners did immediately after finding out they were a winner.

(COMMERCIAL BREAK)

LEMON: We have an update now on the New Jersey train derailment where authorities say most of the danger has passed. But just look at this wreckage. A freight train carrying toxic chemicals derailed in southern New Jersey in the town of Paulsboro. Hopefully, we will get that up for you soon.

At least one of the train cars leaked toxins into the creek near the Delaware River after crashing off a bridge. There it is -- 28 people in the surrounding area sought treatment for respiratory issues.

One big winner of the record Powerball jackpot still yet to claim their share. But the other faced the cameras today. A 52-year-old Missouri mechanic and his wife walking away just shy of $294 million. How are they going to live on that? They're the parents of four kids, including a daughter adopted from China.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My husband gave me -- he said, oh, go buy -- he gave me $10. Go buy 10 lottery tickets. I'm like, honey, they're $2 each. So he goes, OK, buy 5. So, that's what I did and happened to be the middle numbers that won, so...

(END VIDEO CLIP)

LEMON: Well, Cindy Hill was on her way to a job interview when she got the news. Guess what? She ditched the interview. Who wouldn't?

Congratulations, by the way.

Coming up, bombings, death, hundreds injured. We're not talking about Syria or Gaza. We're talking about Iraq. The U.S. ended the war there officially nearly a year ago. So why did dozens of people die from explosions in the last three days? Make sure you stay with us for this report.

(COMMERCIAL BREAK)

LEMON: Just in to CNN: news out of the Supreme Court or lack thereof, I should probably say.

Joe Johns on the case for us.

Joe, what is going on?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: No action yet. This is of course the series of appeals over the issue of same-sex marriage, which the court took up and behind closed doors to try to decide whether they would actually hear the case before the full court.

That would have happened some time in March. So far, no decision from the court at all, no explanation as to why they haven't moved on it. What we do know is these are divisive issues, challenging for the court. We also know that the court likes to move slowly on those sweeping social issues. And they have been known to keep issues like this on their desk for years at a time. So, no telling yet when they will pick this thing up and run with it -- back to you.

LEMON: All right, Joe Johns. We will hear more. Joe is anchoring "SIT ROOM" tonight and he will be here at the top of the hour. Thank you, Joe.

So, Joe joins you for "SIT ROOM" at the top of the hour. It is nearing the bottom of the hour now. I'm Don Lemon.

Twenty Iraqi men heading to serve their country are now the victims of a kidnapping. It happened today as the army recruits were traveling from Mosul to Baghdad when they were ambushed by at least a dozen gunmen. That's according to Iraqi police who are now searching for the recruits. The abduction caps a week of violence in Iraq. More than 80 people died since Tuesday, killed in a string of bombings throughout Iraq, including Fallujah and Karbala.

The worst was yesterday, when eight bombs went off in cities and off roadways.

I'm going to turn now to CNN's executive editor, Tim Lister, who is covering the region extensively.

It's all coming back, right, those names?

TIM LISTER, CNN EXECUTIVE EDITOR: Hauntingly familiar, Fallujah, Karbala. All these places are now back in our eyesight.

LEMON: In the news. We're saying these words, these cities and towns again. The U.S. ended the war in Iraq nearly a year ago. Why the violence? Is it getting that bad? Is it picking up?

LISTER: It got particularly bad now, because it is the, first of all, of Ashura, and that's when the Shia majority in Iraq go to the holiest cities.

There are a lot of processions, a lot of people gathered in open space. And they're an easy soft target for a resurgent al Qaeda. And al Qaeda in Iraq is back. For a long time, especially during the end of the U.S. presence, it was very much subordinated by a joint U.S.- Iraqi operation. But it has now reformed. If anything, it is more dangerous and it is certainly devoted to the sectarian attacks against Shia.

LEMON: Does this mean that Iraq is going to disintegrate now?

LISTER: Well, that's the thing with Iraq. You can never tell whether this combination of events could push it over the edge and back into potentially civil war or whether somehow it will muddle through. But the challenges are huge.

On the one side, you have got Iran, which is supporting the prime minister, Maliki, but he in turn has to keep all sorts of internal balances, the Sunni, the Shia, even the Kurds, very, very close in the last couple of weeks coming to blows over the disputed oil territories in the north, the Kurds and the Iraq armed forces. So multiple crises all coming together at the same time.

LEMON: The question comes, additional U.S. troops into Iraq?

LISTER: I think there is more chance of you winning the Powerball, to be honest with you. They got out of Iraq. There was no residual agreement. There was no status of forces agreement. The chances of this administration wanting to go back into Iraq with very little opportunity, frankly, to do very much about what is a growing sectarian fissure between the Shia and Sunni -- and the Sunni are now looking to Syria and thinking, hey, what if we get a Sunni regime, hard-line Sunni regime in Syria, instead of Assad?

Then we have got someone guarding our back. That in turn could lead to the dissolution of Iraq quite easily. So, they're on tenterhooks. They're muddling through. But it has probably been -- it is now the gravest crisis certainly since the U.S. forces left.

LEMON: And something our international unit will keep a close eye on.

LISTER: Absolutely.

LEMON: Thank you, Tim Lister.

LISTER: Pleasure.

LEMON: We appreciate it.