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Fiscal Cliff Talks Stall as Clock Runs Out; Northwest Braces for 4th Storm; Port Strike Could Hit Retailers; Judge Temporarily Halts Ban on Conversion Therapy.

Aired December 04, 2012 - 11:30   ET

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

ASHLEIGH BANFIELD, CNN ANCHOR: it is not my job. But it is your job to talk about it, Howie Kurtz. And I assume that on "Reliable Sources," Sunday morning, at 11:00 eastern, this will be one of your topics.

HOWARD KURTZ, HOST, RELIABLE SOURCES: Yes. That was a non-denial denial. I want to talk more about that. And if people want to check us out Sunday morning, that will be one of our topics, indeed.

BANFIELD: And I will be one of your viewers.

Howie Kurtz, thanks so much.

KURTZ: Sure.

BANFIELD: Appreciate it.

(COMMERCIAL BREAK)

BANFIELD: 28 days and counting until, you guessed it, that thing like "Thelma and Louise" we're all supposed to be headed over. Yesterday, House Speaker John Boehner unveiled the details of the Republican plan to avoid that calamity, but it was quickly rejected by the White House.

You might remember it wasn't so long ago, like last week, that just as quickly, the speaker himself rejected the Democrats' deal. So at the center of the dispute -- tax rates for the rich.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER LABOR SECRETARY: You don't have to really be a rocket scientist to understand that the rich do have to pay more. Taxes do have to be raised on the rich. I think that's why over 60 percent of the public in these polls are not only supportive of a tax increase on the rich but also will blame the Republicans if we go over the fiscal cliff. And this gives -- frankly, this gives the White House and this gives the Obama administration much more bargaining leverage.

(END VIDEO CLIP)

BANFIELD: Well, the former treasury secretary has one thing to say, but many other voices are a virtual cacophony in the place where Wolf Blitzer has to sit every day and listen to it.

Wolf, let's talk about who has the most leverage right now, if there is anyone with the most leverage.

WOLF BLITZER, HOST, THE SITUATION ROOM: In the short term, the president has more leverage, right now, because if they do nothing, let's say they avoid any legislation between now and the end of the year, starting January 1st, we go over that so-called fiscal cliff. Tax rates go up, not just for the rich but for the middle class, for everyone. All those cuts in domestic spending and national security spending, they go into effect. People aren't going to be happy about that. And the president will be able to say, look, I begged them, I repeatedly said 98 percent of the American public, they wouldn't get a tax increase if we just took them out of the equation, let's pass legislation extending the Bush tax cuts for everyone earning under $250,000 a year. They didn't do it. So, you know, he'll have some leverage on that in terms of the politics. Because, politically, you know, the polls all are very consistent, the election results are pretty consistent, the American public is ready for a modest increase in taxes for the upper 2 percent of taxpayers.

Having said that, there's another issue that's coming up in February or March, and that's raising the debt ceiling once again. The Republicans have a lot of leverage on that right now because the White House, the administration will desperately want to raise that debt ceiling so the U.S. doesn't go into default. That could undermine U.S. creditworthiness, U.S. interest rates, all that kind of stuff. And the Republicans will have some serious leverage there down the road.

So both sides have leverage. My bottom line, in the short run, the Democrats have some more.

BANFIELD: So it sounds -- and before we even get to that very valuable piece of leverage, the debt ceiling discussions, it's odd that it would seem as though the Democrats would benefit from heading over the fiscal cliff because then it's the marketing message of "who was to blame for it." All the while though, Wolf, there are all those calamitous cuts that would go into effect, and that could hurt the Democrats terribly, no?

BLITZER: It potentially could hurt in this regard -- where is the president's leadership? Why couldn't he put a deal together --

BANFIELD: Right.

BLITZER: -- the way Ronald Reagan worked with Tip O'Neill back in the '80s? Presidential leadership. He's just fresh off of an impressive re-election win. And so the argument will be, he's not a leader. He couldn't put together the coalition that would avoid going over the fiscal cliff. So that's certainly something that the Republicans have as leverage on the president right now.

Having said that, though, remember, back in the '90s when the government shut down, eyeball-to-eyeball negotiations were going on between Bill Clinton and then-Speaker Newt Gingrich and the government did shut down. The president emerged on both occasions, two shutdowns, in a stronger political position because the American public blamed the conservatives, the Republicans in Congress more than they blamed the White House. So that is the one area where the White House right now is saying, look, they have some leverage on that.

BANFIELD: Let me ask you this, Wolf. You have been at this game a long time. This intractability sounds and feels like nothing we have ever seen before. Do you have any sort of, I don't know, light on the horizon that you see? Are we going to be this polarized, and literally make the country pay for what's now become just sheer ugly politics?

BLITZER: My own gut tells me that between now and the end of the year, they will reach a deal. And it will be a compromise. And both sides won't be thrilled by it, but it will be better than the alternative. And it will probably go down to the last minute. It usually does.

BANFIELD: Yes.

BLITZER: Maybe ruin some Christmas vacations and stuff like that. But the stakes really are enormous right now. So I f you take a look at -- the two key issues, the Republicans are going to have to bite the bullet on more tax revenue and maybe raising that upper income rate a little bit. The Democrats are going to have to find entitlement cuts, Medicare, Medicaid cuts that they really hate and the liberal base will vote against. The conservative base will vote against some tax increases. But maybe the moderates on both sides, Democrats and Republicans, will get maybe 218 votes in the House of Representatives. That will be enough to pass the legislation. I think they have the votes in the Senate. There are a lot of moderates Democrats and Republicans who can forge a coalition in the Senate.

So my sense is they'll probably get close to a deal. They'll probably get a deal. But it will be touch and go, and it will look like they're going to go over the cliff, and at the last minute --

BANFIELD: And you know what?

BLITZER: -- but they probably won't.

BANFIELD: I bet it looks a whole lot like the three plans that we have already tried to hammer out and they failed at, and all this while, it's cost us everything in the uncertainty, which has been such -- I'll just use a term -- a bummer.

Wolf Blitzer, thank you very much.

BLITZER: No. Remember, a year and a half ago, Boehner and the president, they were pretty close to a deal. They thought they had a deal and, in the end, they --

(CROSSTALK)

BANFIELD: Yes. And they will probably end up at the same exact plan -- BLITZER: I suspect you're right.

BANFIELD: -- grand plan, grand bargain.

BLITZER: Yes.

BANFIELD: Again, they could have saved us all that time.

BLITZER: Thanks.

BANFIELD: Blitzer, thank you, sir.

You can tune into Wolf's program. It begins at 4:00 p.m. eastern every day. He's terrific on this stuff and everything else.

Back in a moment.

(COMMERCIAL BREAK)

BANFIELD: Northern California, Oregon and Washington State are getting just pummeled with rain, and it's the fourth storm in a row since last Wednesday, which means there's been no time to recover each time these places get hit. And flooding damage -- well, just look at your screen. It's an absolute mess.

We have crews covering every angle of this storm.

Dan Simon is in Lafayette, California, which is in the northeast part of Oakland. There's a massive sinkhole there.

Chad Myers is in the CNN Weather Center, watching these storms as they develop.

Dan, let me start with you. What's the story on the sinkhole?

DAN SIMON, CNN CORRESPONDENT: Well, as you said, Ashleigh, it is a real mess out here. Let me show you what's going on. You can see crews here removing some of the debris. This is a massive sinkhole. This is 80 feet long, 15 feet deep, 40 feet wide.

Let me explain how this happened. There's a creek that runs beneath the concrete, and it got clogged up and it just washed away all the dirt, and with that, the road. You got the whole street closed. It's going to be closed for several months.

What crews had to do, they actually had to set up a temporary sewer line. You can see it right here, because when the street gave way, it actually ruptured the line. This is the temporary line. Also a temporary water line.

Now, Lafayette, where we are, it's about 20 miles east of San Francisco, and the whole Bay Area has been impacted by a series of storms. The storm that's coming tonight, this will be the fourth storm in about a week. And we've seen, you know, downed power lines and trees and that kind of thing. At one point, 340,000 people were without power. So with the storm coming tonight, this is the last thing this community needs -- Ashleigh?

BANFIELD: My lord. Dan, it's a good thing no one ended up in that as they were driving. So I guess that's the light at the end of that tunnel.

Dan Simon, thank you.

Chad, I want you to jump in here. I was reading through some of your information, Chad. I could not believe it when I saw that some of these location where is Dan is and other people on the west coast got one year's worth of rain in just a few days.

CHAD MYERS, AMS METEOROLOGIST: In seven days. Unbelievable. Even Mt. Shasta, a pretty wet place, picked up 25 inches of rainfall in three separate storms. You add them all up. So now all of a sudden, that's like nine months' of rain in one location. And other sports we know picked up almost a year's worth of rain in one week. And now it's running off.

There is rain coming back in San Francisco. Dan was just talking about it. It's raining farther to the north and it's up into Washington and Oregon. But the rain for the Bay Area only a couple hours away. Raining here in Portland, Seattle. You would expect that. But here is the next event that would affect the bay area here in the coming hours. It's raining up the I-5. Raining just about into Napa and also into Sonoma. But the rain just off shore there westward.

Here's the storm for today. It moves on by.

Now, there is good news for northern California. The storm will taper off for you. Not good news for Washington, Oregon and British Columbia. The storms are going to be sliding up farther to the north, and four more storms are on the way for this area in the next 16 days. I know people love to go skiing up there. But just to give you some perspective, Whistler has picked up 133 inches of snow on top of their mountain. This is just incredible amounts.

BANFIELD: Wow. Wow. Wow.

MYERS: That snow that's going to melt will eventually be their great water to drink in the summer. California, too. The Sierra is getting a lot of snow as well.

BANFIELD: I hate to say this. I'm going to Whistler over Christmas. So that's good news for me. But I hope the best for them. When I saw that sinkhole, I thought, they do not need another storm they're getting.

BANFIELD: Chad Myers, thank you.

Also thanks to Dan Simon, too, for bringing that you story.

We're back right after this.

(COMMERCIAL BREAK) BANFIELD: Have you been searching the store shelves for that hot holiday toy, the video game or electronic item you're dying to get and it's just not there? You may not be able to find it at the store because it might be just out there floating, believe it or not, in the oceans and the waters off the coast of California. Those big carriers can't dock. They can't unload because there's a labor strike going on at the ports of Los Angeles and Long Beach. And that strike has been going on eight days.

Joining us is CNN's Miguel Marquez. He's live for us in San Pedro, California.

This thing is costing the U.S. economy about $1 billion. What is wrong?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, what's wrong is the Clerical Union, the folks striking there behind me, blocked several terminals here at the ports of Los Angeles and Long Beach. It is a massive operation here. Nearly a half trillion in goods come through every year. It's huge. Some 35, almost 40 ships have been affected. Let me show you. This is one of them here. Several are berthed here. Some have been turned away. Others are waiting in the ocean.

But we understand there is a press conference with the mayor. Some pretty dramatic negotiations finally going on on this. They hadn't been talking for some time. Mayor Villaraigosa coming in from an overseas trip last night around 10:30, 11:00 pacific time. He went straight to negotiations. It's not that far away from here. He's been there all night long, on their backs. And we understand he's doing a press conference in 25 minutes or so. That probably means there is a deal at hand -- Ashleigh?

BANFIELD: At a billion dollars a day, I sure hope they're bringing out all of the stops at this point.

(LAUGHTER)

If you're out there, check one of those carriers and see if perhaps my Ninjago is there for my kid. It's going to drive me crazy if it's there over Christmas, Miguel.

MARQUEZ: Yes. This ship is -- actually, all of your Christmas gifts on that ship.

BANFIELD: Oh.

MARQUEZ: I can see it already. They're waiting for you to be unwrapped and out of there.

BANFIELD: That is cruel.

MARQUEZ: You've been a good girl this year. Who knew?

BANFIELD: Listen, I need to be rewarded, which is just getting those darn things.

Miguel, I know you're getting messages. I'll let you check in.

Let us know if you hear of breaks in this thing. It's quite serious. Appreciate it.

Miguel Marquez, reporting for us, live.

Back in a moment.

(COMMERCIAL BREAK)

BANFIELD: A federal judge in California is issuing a controversial ruling that could send gay kids into the offices of therapists whose work experts have declared as dangerous. That statement made headlines back in October when it banned something called "conversion" or "reparative therapy." It's a controversial practice aimed at reversing homosexuality in minors. The American Psychiatric Association has been very clear on what it thinks of that kind of treatment. Calls it dangerous. And I'll go on to quote, "In the last four decades, reparative therapists have not produced any rigorous scientific research to substantiate their claims of cure. And the potential risks of reparative therapy are great, including depression, anxiety and self-destructive behavior," end quote.

Defense attorney, Joey Jackson, is live in Atlanta to explain why a judge would do this.

Joey, explain. Why would a judge do this?

JOEY JACKSON, DEFENSE ATTORNEY & LAW PROFESSOR: Explain away.

BANFIELD: Yes.

JACKSON: First of all, we have to understand this is an injunction. What does an injunction mean? It means we're going to slow down and there's going to be a hearing, but pending that hearing, the law will not go into effect. Now get this, Ashleigh. With regard to the law not going into effect, it won't go into effect for the three plaintiffs. Everyone else, of course, will not be subject to this ruling because the judge limited that ruling to these three.

So in essence, the judge said, right now, when you have an injunction, it means there's a likelihood of success on the merits to those who sued. We'll have a full-blown hearing later but we're going to allow the plaintiffs to come to court and explain.

BANFIELD: You used that word that's so critical, merit. Here's where I lost the plot. Apparently, this judge is suggesting that these therapists, the three of them who brought this suit, their free speech is somehow at risk if they can't treat these minors. Where on earth does free speech collide with the health of kids? You can't yell "fire" in a theater.

JACKSON: Very well-stated. What happens is, whenever you look at anything -- first of all, it's creative lawyering. But what they're talking about -- that is the plaintiffs -- is they're saying, listen, what you're doing, incidentally, is that you're affecting my conduct and you're affecting my ability to speak with my patients. You're limiting what I could say and what I can't say. If I say the doctors or the psychiatrists think it's appropriate to speak to them about reparative therapy, that is my First Amendment right to do so. You, by doing this, you're infringing upon that, therefore, unconstitutional. That's what they say. Who knows ultimately what a judge will say.

BANFIELD: My lord. I could go on and on with the different crazy kinds of cures out there that just aren't allowed, but I can't because the show's over.

JACKSON: Go on!

(LAUGHTER)

BANFIELD: Joey, I adore you. You're the best.

JACKSON: Thank you, Ashleigh.

BANFIELD: We'll do this again. We'll talk more about this because this isn't over.

Joey Jackson, thank you, sir.

JACKSON: Pleasure.

BANFIELD: Appreciate it.

Don't forget to check out CNN.com for more because we've got a lot of excellent articles online about conversion therapy and the controversies that surround it, as well as, now, the legal case that surrounds it.

Thank you for watching everyone. It's been nice to have you with us. I'll be back in an hour.

In the meantime, NEWSROOM INTERNATIONAL, with Michael Holmes, is coming your way after the break.

(COMMERCIAL BREAK)