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Survival on Unemployment; Secret Mission Launch Today; How to Achieve a Balanced Budget; China and the Middle Class to Rule in 2030; New Developments for George Zimmerman

Aired December 11, 2012 - 11:30   ET

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

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT: Averaging 15 applications a day, at age 54, this is the first time she's ever been on unemployment. She's emptied out her 401(k), her savings, and now the last resort, the emergency federal jobless program has kept De Bats in her townhome, giving her $450 a week. But on December 29th, unless Congress and the White House act, the money stops.

LIS DE BATS, UNEMPLOYED WORKER: We're not trying to live off the system. We're trying to survive. It's not a luxury to be on unemployment, it's a means to keep us going.

LAH: The fear of the fiscal cliff isn't just here in De Bats' suburban neighborhood, in the states with the highest unemployment from the west to the north to the south, they will be hit the hardest. Some 2 million Americans will see those federal unemployment benefits disappear all at once. Economist Chris Thornberg says these Americans are the unfortunate pawns in the tough game of politics and budget balancing.

CHRIS THORNBERG, BEACON ECONOMICS: So, ultimately, this is a trade- off, and the trade-off, of course, has to be that while in some ways some people are going to be hit painfully by a reduction in federal benefits, at the same time, we have to appreciate that this deficit has to be closed.

LAH: But at what human cost, asks De Bats.

DE BATS: There's my refrigerator.

LAH: She's down to condiments until the next unemployment check arrives. But while we're here talking to her about the fickle cliff, she gets an e-mail.

DE BATS: Yay! I got an interview! Whoo! Okay! That was good news.

LAH: A third interview for a sales job. If Washington can't do it, maybe this job will pull her back from the cliff.

DE BATS: Oh, my God. I can't believe how excited I am right now.

LAH: Kyung Lah, CNN, Los Angeles.

(END VIDEOTAPE)

ASHLEIGH BANFIELD, CNN ANCHOR: The fiscal cliff is a confusing personal topic for a lot of people, so we're giving you the chance to ask our expert money team, Ali Velshi and Christine Romans, specific questions about how the fiscal cliff could impact you, your family, or your business. So just send me your questions on Twitter @CNNashleigh and all this week, Christine and Ali will join me right here to give you the information that you need. Once again, tweet me @CNNashleigh.

(COMMERCIAL BREAK)

BANFIELD: All right. This is the cool part of the show. We're going to countdown to a super secret space plane launch at Cape Canaveral, Florida. I am not kidding. This is actually like a mini version of the space shuttle. Too big to be a secret space drone, but too small to be able to carry people into space to do experiments. So that kind of leaves you with the question, what exactly is the X-37B and why won't the government cough up its mission? CNN's John Zarrella has been digging into that. You're smiling, but I don't think you have the answer, do you?

JOHN ZARRELLA, CNN CORRESPONDENT: No, I was going to say, those are great questions. I wish I could help you. But I think there's only a few people in the government that have the answers to them. And that's probably a very, very few. But you're right, about an hour and a half from now, on top of an atlas rocket, if the weather cooperated, and it's not great up at the Kennedy Space Center today, as this front moves through, but this X-37B is expected to liftoff, some time after 1:00 eastern time. The launch window is five hours. That's because the Air Force doesn't want to tell anybody exactly what the launch time is.

And this thing, Ashleigh, has caused all kinds of speculation, as to what it does. It flies up at about 200 miles and orbits the earth, just like a space shuttle did, but it is much, much smaller. In fact, originally, it was designed to be carried inside the shuttle's cargo bay. A lot of the speculation is that this thing is a spy, is a satellite killer. Other speculation has been that it is itself a reconnaissance satellite, a rapid deployment reconnaissance satellite, that could be moved into areas quickly when needed. The Air Force says, look, it's none of that. That's all just wild speculation. That this is a testbed. A platform in space for the Air Force to test new technologies, avionics, command and control, thermal protection, high heat protection, seals, all the kinds of things for, you know, the development of new technologies in the Air Force and in the military. So that's what they're saying it is.

BANFIELD: But the conspiracy theories are fun, Zarrella. And the reason I say that --

ZARRELLA: Absolutely.

BANFIELD: The Chinese are not happy about this. They've been sending over like official protests. And I do appreciate the opinion they give. I was reading a little while ago about Frank Rose, the Deputy Assistant Secretary of State for arms control, verification, and compliance. It's a mouthful, but what he said was, to avoid conflicts based on misperceptions on mistrust, it's imperative that we promote transparency and other confidence building measures in armaments and threatening technologies in space and elsewhere. That's not very transparent, though, is it?

ZARRELLA: Not at all. In fact, there's one aerospace expert that I've known for years, who in an article recently said, you know what, this entire program may be nothing more than flying this thing in order to keep the Chinese wondering what it's doing.

(LAUGHTER)

BANFIELD: Well, it's a fun parlor game, no matter what.

ZARRELLA: Expensive, though. Expensive. Probably well over $1 billion spent on this thing already.

BANFIELD: And if you want to know what to get me for Christmas, you need to tell me when they're going to make one of these things out of Lego that will actually be able to launch. That's all I see in my house.

ZARRELLA: There you go. I'll make sure that's on your Christmas list.

BANFIELD: Thank you, John Zarrella. Nice to se you. Keep your eyes open for the launch for us, will you?

ZARRELLA: Absolutely.

(COMMERCIAL BREAK)

BANFIELD: You know, everyone at one time or another has had to draw up a budget, and each year, the federal government draws up the grand daddy of them all. How to spend $3.8 trillion or so. To a pretty large extent, it's really what the government brings in, for the most part, in taxes, et cetera, and compare that to what it spends as far as programs and services. And just like your bank account, you need to have enough money to cover it all. But as Tom Foreman shows us, that is just part of the government's problem.

TOM FOREMAN, CNN CORRESPONDENT: What you're looking at in this room is everything the federal government spends money on. And that scoreboard back there shows you the problem. Last year, we spent $3.6 trillion on all this stuff, but we only took in $2.3 trillion in taxes or revenue. Now, Democrats tend to like to talk more in these talks about the revenue side of the equation. They say, if we can find a way to gin up more taxes, lean on the rich harder, that's how we can deal with this deficit. But Republicans, while agreeing that we may need more revenue, want to talk a lot more about all this stuff, and whether or not they can cut some things down.

One of the first things you may notice is that not all spending is equal. You could have dramatic cuts in things like Homeland Security and the Energy Department and the Interior Department. If you cut those programs out entirely, yes, you saved $80 billion, but that's only a small fraction of the deficit. That's why the talk is largely about this back row, where the big-ticket items reside, such as Social Security, health and human services, home to Medicare and Medicaid, and defense. Each one of these accounts for more than $700 billion in spending. So, yes, if you could find a way to somehow chop about 25 percent out of each program here, you'd get real savings, about a half trillion dollars.

But doing that would be unbelievably tough. The simple truth is, some of them are protected from cuts. Social Security is something that Democrats and Republicans alike have been very afraid to go after. The social programs are very much protected by Democrats and the Republicans are equally protective of defense. That's why these talks are so tough. The simple truth is, every program in this room has constituents who will fight tooth and nail to hold on to the funding.

But there is this. If no deal is struck and the fiscal cliff comes, then $600 billion in automatic tax increases and spending cuts will kick in. That could affect a lot of programs in this room, and that will absolutely leave an awful lot of voters, Democratic and Republican, unhappy.

BANFIELD: Tom, you even picked red and green for the season? I'm kidding. Tom Foreman explaining to us in a way that absolutely no one else can. We have got to figure out a way to bottle this guy. He's awesome.

(COMMERCIAL BREAK)

BANFIELD: Being a global superpower certainly has its perks. Economic dominance, plenty of food and water, and certain bragging rights, shall we say? USA! Don't get too comfy. There is a new report that suggests by 2030, not even 20 years from now, the United States is going to have to step aside and let China take the top spot. Christine Romans is here with me to explain what this is all about.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: So this is a report that the 17 different intelligence communities in the United States put together every four years for the incoming administration. The lay of the land for what you're facing leading the world superpower, the United States. And this report finds that 350 years of an ascendant west will be reversed and you will see Asia as the dominant superpower once again, going back to its position that it held in the middle ages. Here's what it found. You're going to have Asia leading by 2030 in size, in terms of GDP, military spending, population size, technology investment. The largest economy will be China. It will have overtaken the United States, even before 2030. You will see global economic crises. You will see the majority of the world's population out of poverty for the first time in world history.

BANFIELD: And a huge middle class, all of a sudden, right?

ROMANS: Middle classes around the world, and they will be the driving political factor. Technology, the freedom of individuals, that can be expressed through technology, and the middle classes. Middle classes wanting more. And you're going to see India, its growth by 2030, will be like China is today. That will be that big, huge democracy growing. BANFIELD: Before anybody's freaking out and transferring their children into all Mandarin-speaking schools, we are not going to be in dire straits. We are still going to be a big influence in the global landscape, right?

ROMANS: Absolutely. You're going -- absolutely, no question. But it's going to be, well, one of the quotes from the story is basically that the Pax Americana is going be over and you're going to see not this one power dominating everything. It's going to be middle classes around the world and more of a balanced power around the world. One thing that's interesting about this is you're going to have competition for jobs that will create middle classes. It will be pressure on western countries and their middle classes. Because around the world, you've got hundreds of millions of people who will be coming up out of poverty, who will want to be in the middle class, and they're going to want middle class jobs, and have the technology to do those jobs that are we're doing now.

BANFIELD: There's a great read in the "New York Times" about this, and one of the things I found super interesting is this tectonic shift of how we actually define who's the powerhouse too, because a lot of this suggests that countries won't really be the defining, it will be more like coalitions and organizations will be the defining powers.

ROMANS: And tectonic shift is exactly what they call it, the tectonic shifts. They also talk about demand for resources, food and water, demand for food and water should soar like 35 percent in this period. That's going to mean strife and competition for natural resources, which is why sort of the national politics of this gets so interesting too.

BANFIELD: And a lot of people have talked about this before, but this underscores the importance, and that is water. There will be wars fought over water. Not oil.

ROMANS: I know. And a lot of people this morning were saying, well, aren't we already sort of -- aren't all wars sort of have natural resources at their source.

BANFIELD: And religion.

ROMANS: I always think about Canada and the United States. Water issues between Canada and the United States. Some of the things you take for granted. Also when talking about sort of food security in this country and subsidies for farming, we like policies as part of the once-ascendant west. You have to think carefully what you're doing in Washington when you want to make sure that you are going to be, you know, protecting and providing opportunities for your middle class here.

BANFIELD: Exactly. That was one of the reasons I wanted to ask, how are we going to fare, how are we going to shake down in all of this? There were 15 countries the "New York Times" listed out that are going to be failing and deem them as failing and they're not small countries, Afghanistan, Pakistan, Burundi, Rwanda, Somalia, Uganda, Yemen among them. ROMANS: I think what happens for the United States here is how we manage this. For 15 years we've been talking about 19th century belonged to Britain, 20th belonged to the United States, 21st century will belong to China, and Asia more broadly. How our politicians manage that is critical.

BANFIELD: That was my last question for you. Is this a fait accompli or can we fiscal cliff ourselves off of this position that's coming at us?

ROMANS: It makes the fiscal cliff look small, doesn't it? Makes politics look petty. Our nation's leaders know all of this. They get these reports. They read the Quadrennial Defense Review and all of the reports from Congress about the Chinese security and economic and security commission and all of this stuff. They know all of this. What we do in the country and our policies in this country are in a world that's changing quite rapidly. More quickly than the French revolution, industrial revolution, these are the seismic shifts but it's happening quickly.

BANFIELD: Is this just because of technology?

ROMANS: Yes.

BANFIELD: The world is flat, as Tom Friedman said and we can do things quicker and that's why so many can be educated and be part of the middle class like they couldn't before, perhaps. Oh, man, well Happy holidays to you.

ROMANS: It's cool stuff. I think --

(CROSSTALK)

BANFIELD: It's very cool. I was depressed about the fiscal cliff and then you bring this on. Christine Romans, thank you sweetie, appreciate it. We're back after this.

(COMMERCIAL BREAK)

BANFIELD: A setback this morning for George Zimmerman. A judge in Florida has denied a motion to end his 24-hour GPS monitoring while he's out on bond. Of course this is all about that deadly shooting case of Trayvon Martin. The defense lawyers wanted Mr. Zimmerman to be able to live outside of the county where he lives, Seminole County, and they wanted it because they said it was a safety issue for their client. But the judge said too bad. He also denied defense requests for additional evidence in the case, as you probably know, he stands accused of the second-degree murder in the shooting of Trayvon Martin last February following what was described as an altercation. Zimmerman claims self-defense under Florida's stand your ground law. Joining me with his take on the hearing and the developments is Defenst Attorney Joey Jackson. A couple of things on the docket today. You were busy watching this for us. The GPS monitoring, what's -- why did he think he had a shot at that?

JOEY JACKSON, DEFENSE ATTORNEY: Well you know what? A GPS obviously limits you, limits ability to travel and there's arguments may be made by the defense, my client's safety is at issue, he needs to get out of Seminole County. In addition to that he needs to meet with witnesses, prepare for his defense. This judge said no.

BANFIELD: Can't they apply for all of the meetings under the conditions of the GPS monitoring?

JACKSON: That's the issue. There are alternative means available to reach the result that the defense wants in the event you want out, just tell the judge and the judge will make that decision.

BANFIELD: I think the -- perhaps one of the more interesting aspects of today's proceeding was about that recording, the audio recording that the state did when it interviewed Trayvon Martin's girlfriend.

JACKSON: Absolutely.

BANFIELD: A quick reminder, refresher here, she was on the telephone with Trayvon Martin right before this all happened and the phone went dead and there's a critical several seconds, 30, or so seconds, which is a question of what happened. Who went first at the other. So why doesn't the defense have the original recording? Isn't discovery all about discovering?

JACKSON: It really should be. Ultimately what happens, the issue of discovery of course is when the prosecutor has items, right they hand them over to the defense attorney so you can prepare your defense. When you don't have all of that information, it becomes problematic. From the defense point of view, their issue is give me everything, we're entitled to it, let me have the original so I can discern for myself what's on the recording, the judge had no issue with that said hand over the original recording so the defense can evaluate that for themselves.

BANFIELD: Tapes have played a huge part, it's the source of a lawsuit against -- manipulation of tapes, allegations of such (ph). An original recording, you can imagine a defense attorney would want to see anything and everything. Now, the other issue is they wanted bail reduced. Currently it's 1 million?

JACKSON: $1 million bond.

BANFIELD: So they've already been able to post bond?

JACKSON: They have.

BANFIELD: What would the advantage be on reducing it?

JACKSON: Ultimately, what happens is they took a shot and they said, listen, we want -- we feel he's made every court appearance, right, responsible, there have been no issues, he hasn't been in the media other than this case. As a result of that, you know you reduce the bail, reduce the bond, and as a result he'll get some back. But the reality is, it's very difficult for one judge to disturb another judge's rulings and findings. As a result of that this judge said, on the facts before me I'm going to stick with the original ruling which was an amended ruling because as we know, it was raised at some future point. And the judge said, no, we're going to leave bail at $1 million.

BANFIELD: So, big development in the case came over a week ago with the release of that color photograph. It was a photograph we had before seen, but in black and white. When we saw it in color it made a big, big difference to a lot of people. On left what was in discovery originally. The photo copy, almost looks like a mustache. On the right, you can see George Zimmerman took something to the face that night. His nose is swollen and there is blood. We sort of hashed this out at length a week ago but did this issue come up at all today? Anything else that might end up coming out like this? This was huge.

JACKSON: Huge. It came up in this context. What happened was that Mark O'Mara had the photo and said I want you to evaluate the rulings you're making in the context of my client's innocence. And this photograph shows that there was some altercation, there were some issue, some defense of himself by Trayvon Martin against Trayvon Martin and the defense felt it was very important for the judge to look at that photograph and assess whether or not it made a difference in the innocence of, as the defense says, their client. The judge looked at the photograph but kept the rulings as we just talked about.

BANFIELD: All right, so it means you and me have more to talk about next go around when he is back in court. Joey Jackson, always good to see you. Thank you so much. That wraps it up for me. Flat out of time. Stay tuned, because I'm going to pass the baton now to Suzanne Malveaux. Thanks for watching. "NEWSROOM INTERNATIONAL" starts now.