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Staying Afloat in a Tough Economy; Obama Urges Congress to Raise Debt Ceiling; 2012 U.S. Tax Code More than 70,000 Pages; Report Says Half of World's Food is Wasted.

Aired January 14, 2013 - 13:30   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: Suze, we'll talk about a couple of things here because you've talked a lot about the fact that the middle class is shrinking, particularly over the last few years.

We want to put up some graphics. We know the median family income is only about $50,000 a year. It's either a couple making $25,000 each or a single person making $50,000. It's not much, especially if you've got kids. Then you've got the government, coming out with a shocking report that one in six Americans is poor today, 45 million Americans. How do people get out of poverty when you look at those kinds of statistics and the economic environment that we're in today?

SUZE ORMAN, HOST, THE SUZE ORMAN SHOW: Now, I wish I had an answer to that one. You know, I've said before that there is a highway into poverty today, and there's not even a sidewalk out. And there's very little, once you get there, and you are so there, that can be done to help you at this point in time. Because there aren't the jobs, there aren't the resources, there aren't the credit limits that there used to be.

So the real key here is, what can you do out there right now to prevent yourself from going into poverty? And I always say that there are three things, three things that if we could just learn to ask ourselves, before we spend a penny. Number one, is it a need or a want? Obviously, if it's a need, you have to buy it. If it's a want, can you just walk away? You have to get as much pleasure in saving as you do spending. This era of spending, spending, spending has got to go. And last, but not least, we all have to get as much pleasure in saving as we do spending. So, you know, it's very interesting.

MALVEAUX: Suze, what if you're one of those people who's unemployed? You just can't find work. What should you do? How can you improve your life if you don't have a job?

ORMAN: Yes, that's -- you know, I wish I had a magic wand there. So it's -- if you don't have a job and you need to make money, there's got to be something that you can do. I don't care if that means you become a dog walker, you babysit, I don't know what it is that you do. But there's got to be something that you can do to bring in money.

But the key here is, that's why I've been saying to all of you for so long, please have an eight-month emergency fund. Please make sure you're out of credit card debt. Because in case you lose your job, it might take you eight months to one year to find another one. And once you've lost your job, don't keep living like you were living. Cut back on everything.

So once you're in trouble, just like the government is right now, once you're in trouble big-time, and there's nothing left for you to cut, it's very difficult for you to get out. So the key is not to let yourself get into that situation to begin with.

MALVEAUX: Is there any reason why people who have jobs and who are doing fairly well should be worried?

ORMAN: Yes, I have to tell you, when you watch what's going on in Washington, when you watch that our future is in the hands of people who literally cannot agree on anything, you have to worry in the sense of anything can happen. And it's not just, do you get to keep your job or not? Do you stay well? Do you get ill? Does somebody else in your family have an accident and then you have to take care of them? So you have to prepare for the what-ifs of tomorrow, today, and people just don't do that. They don't have a will, they don't have a trust. They don't have a savings account. They just don't think anything will ever happen to them, until it does.

MALVEAUX: And finally, Suze, you have so many of these jobs in the economy that have gone away. You have machines that do a lot of the things that people once used to do themselves, or on themselves. And now you have these manufacturing jobs that require much higher skills. Do people just need to invest in training? Do they need to focus on a different area, like perhaps where the jobs are?

ORMAN: Well, you know, you can invest where the jobs are, and then maybe those jobs won't be there when you get there. I think it's important for all of you, number one, do something that your job doesn't become obsolete, whether that's a nurse or a caretaker, or do something where you can be OK.

By the way, there is a company by the name of care.com. So if you don't have a job, go to care.com, and they will connect you with people who need care, to those who want to provide care, whether it's a babysitter, a dog walker, something like that.

MALVEAUX: All right. Suze Orman, always great to see you. Thank you so much. Really appreciate it.

Colin Powell is becoming more critical now of the Republican Party. Listen to this.

(BEGIN VIDEO CLIP)

GEN. COLIN POWELL, FORMER SECRETARY OF STATE: There's also a dark -- a dark vein of intolerance in some parts of the party. What do I mean by that? What I mean by that is they still sort of look down on minorities.

(END VIDEO CLIP)

MALVEAUX: Is he right? And if so, what does it mean for the Republican Party? We're going to take a look at the GOP's relationship when it comes to minorities. (COMMERCIAL BREAK)

MALVEAUX: President Obama and congressional Republicans appear to be on a collision course over the debt ceiling. A news conference today, earlier, the president told lawmakers not to use the debt ceiling and the debate as a bargaining chip.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It's absurd. As the speaker said two years ago, it would be -- and I'm quoting Speaker Boehner now, "a financial disaster not only for us, but for the worldwide economy."

(END VIDEO CLIP)

MALVEAUX: I want to bring in Republican strategist, CNN contributor, Ana Navarro, and Tara Wall, a senior advisor of the Romney campaign.

First of all, your reaction, both of you, to the president's hard line. He basically laid down the red line here and said, he's not willing to discuss raising the debt limit here, as part of spending the bills and the deficit reduction talks. That's just not going to happen -- Tara?

TARA WALL, DEMOCRATIC STRATEGIST: I didn't get a chance to see a lot of it, but my first reaction is, I think most Republicans expect the president, not just to put it at the feet of the Republicans, but I think the argument that's been made, and the Republicans have made is to say that there needs to be a backup plan. What is the Plan "B" when you do this? And I think he does owe Americans an opportunity to explain what his Plan "B" is.

And I think many of us, many of those who work in politics and media last week were stunned when some liberals, even moderates, suggested that spending is not the problem, there is no problem with spending. I think it's delusional to believe we don't have a spend problem in this country.

(CROSSTALK)

MALVEAUX: And, Ana, I want to ask, you because the White House has made it very clear, and the president as well, there's not a Plan "B." The plan is to put it on the Republicans and members of Congress to allow a government shutdown to take place. That doesn't seem to be something your party would be interested in.

ANA NAVARRO, REPUBLICAN STRATEGIST & CNN CONTRIBUTOR: I don't think the American people are interested in that. And I did watch the press conference, and I watched all of it. And I have to say to you, Suzanne, I finished watching that conference feeling very worried. I'm a Republican, but I'm an American first. And I actually believe that we should have a government that does bipartisan compromises and that addresses the issues that are facing us. And what I heard from President Obama today was very harsh words. They were not constructive words, leading us, setting the stage for a negotiation. You don't begin negotiation by saying I'm not going to negotiate. He had very harsh words. He said that Republicans were holding guns to the American peoples' heads, taking hostages, just fighting words.

So, by the way, I know that the Republican Party, and I know that the Republicans in Congress have not made it easy for him. I know it takes two to tango. But nobody's got the bully pulpit that the president of the United States has. And I would expect from him to be much more of a uniter come this second term. Because he's got as much skin in the game as Republicans do, if he wants to build the legacy.

MALVEAUX: So, Tara, would you recommend -- I mean, is this possible, to take back to Republican leadership, to say, look, why not actually separate the two and go along with the president's plan, put the debt ceiling argument aside, move forward, pay the bills, as he suggests, and then have a debate that he says would be more balanced when you talk about raising revenues and also spending cuts as well. Is that a possibility?

(CROSSTALK)

WALL: The country just had a huge set of tax increases, right? I think that, at the end of the day, you know, what Americans expect, too, is a measured approach to this. And, again, addressing -- you know, spending has to be on the table. The issue of spending has to be on the table. I think that has to be addressed. I think that's a valid argument to be made. And I think, at the end of the day, what will probably likely happen is that some of this will have to be delayed. We'll have to wait until some of the tax revenues do come in to be able to pay for it. But, at the end of the day, you can't just assert that Republicans alone are being disingenuous. I think, at the end of the day, Americans are frustrated with Congress in general over this whole issue that we're even at this point, that it's taken us this long, that we've faced a fiscal cliff. Nobody wants to see us face another fiscal disaster.

At the end of the day, it is to Ana's point, the president is the president. He's in charge. He's the leader. And you have to start, I think, discussions in an honest bipartisan way and not lobbying --

MALVEAUX: All right.

WALL: -- you know, throwing -- you know, throwing out this notion that it's just at the feet of Republicans.

(CROSSTALK)

MALVEAUX: I want to bring in another point here, talk about one more issue before I let you guys go. We heard from Colin Paul over the weekend, on one of the Sunday shows, saying that there was a dark screen in the Republican Party, that there was racial division. I want you to respond to that.

Ana, do you think that Colin Powell is seeing this accurately, that there is some real work to be done? NAVARRO: I think there's still work to be done in America, period, Suzanne. You know, all three of us are minorities. We know that racism still exists in America. It exists whether you're a Democrat or a Republican. It exists in the United States of America, period.

But I'd also like to point out that, right now, we have a black U.S. Senator who's Republican and we've got two Hispanic U.S. Senators that are Republican. And so, I think that while there's still work to be done amongst all of America, we have made some strides in the Republican Party and some of those need to be recognized. It can't just be about chastising.

I welcome General Powell's criticism. I think we should have a big tent where his criticism and self-introspection is part of looking at where we go as a party. But I also think we need to recognize some of the steps that have been made.

MALVEAUX: All right, Ana, Tara, thank you very much. Appreciate both of you weighing in. It's a good discussion and we'll continue it. Sorry we've run out of time.

We have breaking news. Former President George H.W. Bush being discharged today. This is from the Methodist Hospital in Houston. This is after being treated for bronchitis. It's a bacterial infection, a persistent cough. He says, "I am deeply grateful for the wonderful doctors and nurses at Methodist who took such good care of me." That coming from the former president. It comes nearly two months after the treatment of that bronchitis-related cough and some other health issues. The former president, now 88 years old. We wish him all the best in his recovery and his good health.

We'll have more after the break.

(COMMERCIAL BREAK)

MALVEAUX: President Obama just spent an hour laying out some of the key challenges of the next term, including the fight to raise the debt ceiling. This is something the president says there is really no room to compromise on.

But even a tougher fiscal challenge could be tax reform. We're not just talking about whether or not to raise taxes, but actually looking at the tax code itself, all 70,000 pages of it.

Christine Romans explains.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): The challenge, tax reform. For the first time in 20 years, taxes are going up for the rich. They'll pay a higher top marginal income tax rate, higher taxes on dividends and capital gains, and a higher estate tax rate. But it could have been worse.

BOB HERBERT, SENIOR FELLOW, DEMOS: I think that the wealthy got off pretty easily here. There's a modest tax increase for the very wealthiest in this society, a very tiny percentage. I, frankly, think that there are more taxes coming and they're going to bite deeply into the middle class.

ROMANS: In fact, two-thirds of American will pay more taxes in 2013 according to the Tax Policy Center. The tax bite for the middle class comes from the end of the payroll tax cut, a temporary tax goodie that wasn't renewed in the fiscal cliff deal. But whatever happened to comprehensive tax reform?

REP. DAVE CAMP, (R), MICHIGAN: The IRS tax code is still a nightmare. It's too complex, too costly, and to unfair.

ROMANS: Both sides say they're open to simplifying the tax code, more than 70,000 pages in 2012. The U.S. government gives away more than $1 trillion a year in tax breaks, but Republicans say reform isn't about squeezing more money out of taxpayers.

SEN. MITCH MCCONNELL, (R-KY), SENATE MINORITY LEADER: I think tax reform is a good idea, but now that we have resolved the revenue issue, tax reform ought to be revenue neutral, as it was back during the Reagan administration.

ROMANS: The president and congressional Democrats disagree.

OBAMA: But spending cuts must be balanced with more reforms to our tax code. The wealthiest individuals and the biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most Americans.

SEN. DICK DURBIN, (D), ILLINOIS: Trust me. There are plenty of things within that tax code, these loopholes, where people can park their money on some island offshore and not pay taxes. These are things that need to be closed.

(APPLAUSE)

ROMANS: A major overhaul of the tax code hasn't happened since 1986, when the political system was much less polarized. But deficit hawks insist a big deal, a so-called grand bargain is critical for jump starting U.S. economic growth.

MAYA MACGUINEAS, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: We've got to reform the tax code and raise more revenues than we have. And importantly, we have to focus on controlling spending and reforming our entitlements, which are right now unsustainable. Delaying all of this is irresponsible.

ROMANS: Hard choices ahead. Whether the Congress and the president can come together remains to be unseen.

Christine Romans, CNN, New York.

(END VIDEOTAPE)

MALVEAUX: A new report says as much as half of the world's food is wasted. Self-acclaimed dumpster diver, Jane Velez-Mitchell, she's up next.

(COMMERCIAL BREAK)

MALVEAUX: So just how much food do you actually throw away? A new report finds a staggering amount of food wasted around the globe. Here is the breakdown. Britain's Institution of Mechanical Engineers says that about 4.4 billion tons of food is produced annually, roughly half of it never eaten. Some of it is lost in inefficient harvesting, storage, transportation. The rest wasted by markets or consumers.

Well, none of this comes as a surprise for my next guest, Jane Velez- Mitchell. She's been preaching about food being wasted while people go hungry on her show, Jane Velez-Mitchell, which airs on our sister network, HLN. Joining us from New York.

Jane, very nice to see you here.

This is a pet peeve of mine as well. People make fun of me, we go out to eat, and there is one little piece of meat left, I'll take that, put it in a doggy bag and bring it home. People laugh. They think it is funny. You're very passionate about this. Tell us --

JANE VELEZ-MITCHELL, HOST, JANE VELEZ-MITCHELL SHOW: Good for you.

MALVEAUX: Tell us why. Why does this matter?

VELEZ-MITCHELL: It is obscene when, right now, as we speak, there are children around the world dying of starvation and malnutrition that the United States, people in America throw out approximately 40 percent of all the food that we produce. It is really a moral issue. And it is an exponential problem. It is not just the food itself. It is the water that is used to create that food. It is the animals raised on factory farms in those conditions who sacrifice their lives all for nothing, to be discarded? It is absolutely incredible. It is also creating an environmental crisis. All that discarded food, rotting in land fills, is creating enormous amounts of methane gas.

So however you look at it, if you care about the environment, if you care about world hunger, if you care about the condition of animals, it's an abomination. It has got to stop.

MALVEAUX: This is something everybody can actually do. They can actually control how much food they're wasting. You went a step further. You went what is called dumpster diving in New York. You hit the streets with a group of what is called Freegans to collect food that had been thrown out by the stores, the restaurants. I want our audience to see what you found.

(BEGIN VIDEO CLIP)

VELEZ-MITCHELL: Look at this bread, look.

UNIDENTIFIED FEMALE: It looks like sliced bagels.

VELEZ-MITCHELL: Oh, my gosh, sliced bagels. Look at this.

UNIDENTIFIED FEMALE: We're usually careful to not rip right in, but --

(LAUGHTER)

VELEZ-MITCHELL: Sorry. I made a mistake already. I made a mistake.

UNIDENTIFIED FEMALE: It's not too big a deal because it's in a dumpster.

VELEZ-MITCHELL: But look at this. Look at all this bread. Look at all this bread. Look at all this bread. Oh, my gosh.

(END VIDEO CLIP)

MALVEAUX: Wow, Jane. And not only bread. You also found vegetables. And you managed to cook all of this from the trash and had it for dinner. Tell us what that was like.

VELEZ-MITCHELL: It was tasty. It was wonderful. The Freegans I talked to who, by the way, are highly educated professionals and teachers who consider this a moral issue and who do it because they feel it is an ethical obligation to eat food so it doesn't go to waste, they say they have never gotten sick.

This is a complex problem. Part of it is -- first of all, I got to say, the food I found -- the supermarkets often slice it up so it cannot be easily eaten by people out of the garbage. In other words, we found bagels and they thinly slice them to try to stop people from eating them. To me, that just adds insult to injury here.

But the issue is so complex. It is -- part of it is the expiration dates. Food is often perfectly edible after the expiration date, but just to be on the safe side, supermarkets throw it out anyway. I've actually been attuned to this and now I see people who are hungry -- and there are people in our economy hungry -- are going around and taking food out of the garbage that is perfectly edible.

And part of it is we're spoiled. We have got perfectly good apple here. And I'm going to take my own inventory, Suzanne. I came in with this apple to work today, but guess what was on my desk? This sort of beaten-up apple. Do I want to eat this one? No, because I'm spoiled. But I will eat this one because it is edible.

MALVEAUX: And, Jane, did you find that a lot of the food -- I don't know if it is recommended by health officials or not, whether or not you should be going into the garbage and getting the food. But what did you make of it? Did it seem like it was decent food, good food, that is was something that would not hurt you or harm your health?

VELEZ-MITCHELL: Yes. As a matter of fact, because much of it is just discarded. These Freegans have a method to the madness. They know when to go after the food, right after the store closes. They look at the expiration date and sometimes they find stuff that hasn't hit the expiration date because many supermarkets are now throwing out food before it hits the expiration date. You wouldn't recommend doing this without carefully considering the temperature. That's another factor. They know when to go. And if it is just as cold outside as it would be in the refrigerator inside the store, that's another added protection. There is a science to it. But when you consider that if the alternative is going hungry, it is something people might want to consider. But just don't do it in your neighborhood. Go to the next town over.

(LAUGHTER)

MALVEAUX: Jane Velez-Mitchell, thank you very much. Good to see you as always.

And, of course, it is a fascinating series. Tune into that. And her show airing on our sister network, HLN, Monday through Friday at 7:00 p.m. eastern.

(COMMERCIAL BREAK)

MALVEAUX: It is a new look with an old name for its 60th birthday. General Motors revealing the new Stingray as the most powerful and fuel-efficient base model ever made. The last time the Stingray name was used was back in 1976.

CNN NEWSROOM continues now with Brooke Baldwin.

BROOKE BALDWIN, CNN ANCHOR: Suzanne, thank you.