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President Obama Talks Payroll Tax Cut; Newt Gingrich Holds a Press Conference; Does Iran Have A U.S. Drone?; Obama's Consumer Watchdog
Aired December 05, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: He clearly has a very concerted message he wants to give the American public, which is that he is for extending tax cuts for the middle classes, and the Republicans, if they oppose it, do not want to do that, but they want to extend the tax cuts for the wealthy. It's a pretty simple message.
Now, he may take a question or two, but it's clear they want to control this very much. They don't want the president to be asked questions, for example, about Newt Gingrich doing well in the upcoming primaries potentially. So I think they want to -- when you want to control your message, you put the president out there, you have him talk about it, and maybe take a couple of questions, but then leave and have your press secretary do the rest of the work.
WOLF BLITZER, CNN HOST: Yes. It's always a sensitive issue when with the president -- but you know what? If he's in the Briefing Room, as opposed to a Rose Garden setting or an East Room of the White House, a formal setting, if you will, if he goes into the Press Briefing Room and there are dozens of reporters sitting there, as a former White House correspondent, I always felt frustrated --
BORGER: You would get in a question, Wolf. I know you would.
BLITZER: I would shout a question, and the president could ignore me or not ignore me.
BORGER: But it would depend what the question is. If he liked it, he'd probably answer it --
BLITZER: Some presidents did that. Other presidents --
BORGER: -- if it was about what he wanted to talk about.
BLITZER: But you know what? You go into the Briefing Room, you should answer reporters' questions. If you go into the East Room of the White House, maybe not. You go into the Rose Garden, maybe not, as a formal setting. That's just me speaking as a former White House correspondent.
BORGER: I'm with you.
BLITZER: I covered presidents for a long time. Kate Bolduan is waiting.
Obviously, that two-minute warning has turned out to be a little erroneous, Kate.
Kate's our congressional correspondent.
I may interrupt you in the middle of your answer if the president does walk into the Briefing Room, Kate.
KATE BOLDUAN, CNN CORRESPONDENT: No problem.
BLITZER: But what's the latest you're hearing about this Harry Reid proposal, this compromise proposal that he says could win over enough votes to pass an extension of the middle class payroll tax cut?
BOLDUAN: I assure you that Democrats hope that it would be received as a compromise offer on the part of their Republican colleagues in the Senate, but it doesn't sound like it's receiving the kind of reaction that would indicate that it is the kind of compromise that will be the final product. I know you and Gloria and others have discussed the elements of this new compromise offer that has been put on the table, but just to reiterate, it includes some of the details from the original Senate Democratic offer.
They want to extend and expand actually the tax cut for employees, the payroll tax cut. Currently, employees are being taxed at 4.2 percent. They want to extend that and expand it and cut it even further to 3.1 percent. But to bring down the overall cost of the package, Wolf, they are not including -- they're dropping the provision that would extend the payroll tax cut to employers.
So the cost of the package is about a third of the cost, it's about $180 billion. This of course would be paid for over 10 years.
And the pay-for has been a big issue, not the only issue that Republicans have had with the concept of extending the payroll tax cut, but to pay for it, Democrats are still including -- albeit they call it a much scaled-down version of the millionaire surtax.
They're including a millionaire surtax in this to pay for at least part of this proposal. No details yet on how much more scaled down it is quite yet. They also will be including some spending cuts, as well as a provision that the Senate Republicans had actually included in their plan that would bring in a small -- they acknowledge a small at of money, but would actually prevent millionaires from being able to claim unemployment, look to try to get unemployment assistance or try to get food stamps if they were ever if the position of being unemployed.
But this is the next offer, I think we can call it, kind of the next step in this back-and-forth volley that often happens up here on very political issues and very important issues. We are hearing some quick reaction, Wolf, from Republicans.
Right away, I heard from two top Republicans, saying -- when I asked for the reaction to this bill, they kind of fired back really quickly that Republicans do not support paying for this. They do not support paying for really any measure by including a tax hike on job creators.
I did also receive a statement from the a House Republican leadership aide. Of course, House Republicans themselves are facing their own set of issues amongst conservative members of their party trying to push forth a tax extension here.
From House Republican leadership, Wolf, I was told that this proposal does move in the right direction, according to this aide. But the inclusion of this small business tax hike is "a poison pill that makes it look like Senate Democrats are aiming to fail, so" -- in this person's view -- "so President Obama can attack Republicans."
So, you can see the political messaging continues here as we wait to hear from the president as well -- Wolf.
BLITZER: And very quickly, Kate, how divided -- in all your reporting in the House and Senate that you've done over the past several days, how divided are Republicans on this issue?
BOLDUAN: It seems over time we've seen that there are real divisions among Republicans. It kind of runs the gamut of where Republicans fall in terms of what issue they have with extending the payroll tax cut.
For some, it has to do with paying for it, how this would be paid for. Republicans say if they're going to extend this "temporary tax cut," "it needs to be paid for. That's one issue. But on top of that, as we started to learn late last week, it's not just how to pay for it, it's also, amongst some Republicans, whether to extend it at all.
Many Republicans do not see that this tax cut has helped to stimulate the economy enough to continue it. At the same time, there are concerns that it is draining money from Social Security, where the revenue from this tax goes to, goes to the Social Security -- to fund Social Security. So there are those issues.
Late last week, there was a meeting of House Republicans where Republican leaders were talking about how they were going to position themselves and move on this issue of extending the payroll tax cut, and conservative members came out firing, Wolf, saying that they could not support extending the payroll tax cut, they said, because honestly, they say it was meant to be temporary, and they are frustrated with what they call budgetary gimmicks. In their view, they don't think it's worthwhile paying for a one-year tax extension over a period of 10 years. They say that's a budgetary gimmick that they can't support.
And I heard from conservative Republicans that they said it's time to take on serious tax reform and it's time to look very seriously at entitlement reform instead of continuing these piece-by-piece one-year extensions that they say are not helping to stimulate the economy -- Wolf.
BLITZER: All right. Stand by, Kate, because we're going to come back to you. BOLDUAN: Of course.
BLITZER: You're going to have a busy afternoon the next several days.
The clock is clearly ticking, because if Congress does not pass legislation in the House and in the Senate, that legislation that the president would have to sign into law, the tax rates for those middle class families would go back, that payroll tax cut, would go back to where it was, and that would be at least about $1,000-a-year tax increase. Net tax increase, $1,500-a-year net tax increase for tens of millions of American families, middle class working families. So the stakes right now, clearly enormous.
Brianna Keilar is our White House correspondent over there. She's already in her seat getting ready for the president of the United States.
Brianna, a lot of viewers are just tuning in right now near the top of the hour. Set the scene for us. What do we expect to see and hear from the president?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: We're expecting the president to put forward a message that says taxes should not be increased on middle class Americans, and obviously supporting this idea of paying for this payroll tax cut extension by taxing the wealthiest Americans. This is an idea that he's been pushing of course for some time now.
And, Wolf, you're obviously well aware -- we've been waiting for some time. I have to tell you, last time we spoke, the president's binder, the binder for his remarks, had just been put out. We were given a two-minute warning. And then the binder was taken away, presumably for some changes.
And here, at two minutes, the two-minute warning again, Wolf, as we await the president and his new remarks being put out there. Unclear exactly what the change is at this point.
But I wanted to mention to you that I had spoken with a Democratic source who said that it was really the White House who had pushed for some of the changes that we heard our congressional correspondent, Kate Bolduan, talk about that had been added to this so-called compromise plan, which of course Republicans take issue with that label. But some of the ideas of pay-fors that were included in the super committee process, obviously the idea here is that congressional Democrats and the White House wanting to push this forward as having some Republican ideas in it, although, obviously, Wolf, we're expecting Republican opposition and are already starting to see that.
BLITZER: And you can see that Harry Reid, the Senate Majority Leader, he is on the floor of the Senate. He's announcing what he had said earlier would be his so-called compromise proposal on extending the payroll tax cut.
As we await the president, let's just listen in briefly to Harry Reid.
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SEN. HARRY REID (D-NV), MAJORITY LEADER: -- introduced last week.
Like our previous proposal, this scaled-back version will cut taxes for 160 million American workers. That is 160 million, Mr. President, workers, including 1.2 million Nevadans. This proposal will allow the average family to keep an extra $1,500 to spend on necessities next year.
And like our previous proposal, it won't add a penny to the deficit. It will be fully paid for with a mixture of spending cuts Republicans have already agreed to and a tiny, tiny surtax on the top two-tenths of one percent of American taxpayers.
Every spending reduction in the proposal was agreed to by a bicameral group of Republicans on the super committee, so we know they support these cuts, or they should support these cuts. And in an effort to make our proposal more palatable to Republicans, we've conceded significantly to cut the tax on income above $1 million and make it temporary.
Democrats know how important extending and expanding the payroll tax cut is to working families. It's also important to our economy.
Economists of every political persuasion agree -
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BLITZER: All right. Here's the president.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- going to provide more security for middle class families and those trying to get into the middle class. And at this moment, that means making sure that 160 hardworking Americans don't see an increase in their taxes on January 1st.
A year ago at this time, both parties came together to cut payroll taxes for the typical American family by about $1,000, but as soon as this year ends, so does that tax cut. If Congress fails to renew this tax cut before then, that same family will see a tax hike of about $1,000 a year.
There aren't many folks either in the middle class or those trying to get into the middle class who can afford to give up $1,000. Not right now. That's why Congress must act.
Although the unemployment rate went down last month, our recovery is still fragile, and the situation in Europe has added to that uncertainty. And that's why the majority of economists believe it's important to extend the payroll tax cut. And those same economists would lower their growth estimates for our economy if it doesn't happen.
Not only is extending the payroll tax cut important for the economy as a whole, it's obviously important for individual families. It's important insurance for them against the unexpected. It will help families pay their bills. It will spur spending. It will spur hiring. And it's the right thing to do.
And that's why in my jobs bill, I proposed not only extending the tax cut, but expanding it to give a typical working family a tax cut of $1,500 next year. And it was paid for by asking a little more from millionaires and billionaires. A few hundred thousand people paying a little bit more could have not only extended the existing payroll tax cut, but expanded it. Last week, virtually every Senate Republican voted against that tax cut.
Now, I know many Republicans have sworn an oath never to raise taxes as long as they live. How can it be that the only time there's a catch is when it comes to raising taxes on middle class families? How can you fight tooth and nail to protect high-end tax breaks for the wealthiest Americans, and yet barely lift a finger to prevent taxes going up for 160 million Americans who really need the help? It doesn't make sense.
Now, the good news is, I think the American people's voices are starting to get through in this town. I know that last week, Speaker Boehner said this tax cut helps the economy because it allows every working American to keep more of their money. I know that over the weekend, Senate Republican leaders said we shouldn't raise taxes on working people going into next year.
I couldn't agree more, and I hope that the rest of their Republican colleagues come around and join Democrats to pass these tax cuts and put money back into the pockets of working Americans.
Now, some Republicans who have pushed back against the idea of extending this payroll tax cut have said that we've got to pay for these tax cuts. And I'd just point out that they haven't always felt that way.
Over the last decade, they didn't feel the need to pay for massive tax cuts for the wealthiest Americans, which is one of the reasons that we face such large deficits. Indeed, when the Republicans took over the House at the beginning of this year, they explicitly changed the rules to say that tax cuts don't have to be paid for. So, forgive me a little bit of confusion when I hear folks insisting on tax cuts being paid for.
Having said that, we all recognize that we've got to make progress on the deficit, and I'm willing to work with Republicans to extend the payroll tax cut in a responsible way. What I'm not willing to do is to pay for the extension in a way that actually hurts the economy.
As Americans are well aware, this summer I signed into law nearly $1 trillion of spending cuts, with another $1 trillion with cuts in the pipeline. And it would be irresponsible to now make additional deep cuts in areas like education or innovation or our basic safety net that are critical to the economy in order to pay for an extension of the payroll tax cut. We're not going to do that, nor are we going to undo the budget agreement that I signed just a few short months ago.
Finally, with millions of Americans still looking for work, it would be a terrible mistake for Congress to go home for the holidays without extending unemployment insurance. If that happens, then in January they'll be leaving 1.3 million Americans out in the cold.
For a lot of families, this emergency insurance is the last line of defense between hardship and catastrophe. Taking that money out of the economy now would do extraordinary harm to the economy. And if you believe that government shouldn't take money out of people's pockets, I hope members of Congress realize that it's even worse when you take it out of the pockets of people who are unemployed and out there pounding the pavement looking for work.
We are going through what is still an extraordinary time in this country and in this economy. And I get letters every single day, and I talk to people who say to me, "This unemployment insurance is what allowed me to keep my house before I was able to find another job. This is what allowed me to still put gas in the tank to take my kids to school."
We cannot play games with unemployment insurance when we still have an unemployment rate that is way too high. I've put forward a whole range of ideas for reform of the unemployment insurance system, and I'm happy to work with Republicans on those issues, but right now the most important thing is making sure that that gets extended as well.
This isn't just something that I want. This isn't just a political fight. Independent economists, some of whom have in the past worked for Republicans, agree that if we don't extend the payroll tax cut, and we don't extend unemployment insurance, it will hurt our economy.
The economy won't grow as fast, and we won't see hiring improve as quickly. It will take money out of the pockets of Americans just at a time when they need it. It will harm businesses that depend on the spending just at the time when the economy is trying to get some traction in this recovery. It will hurt all of us, and it will be a self-inflicted wound.
So, my message to Congress is this: keep your word to the American people and don't raise taxes on them right now. Now is not the time to slam on the brakes, now is the time to step on the gases.
Now is the time to keep growing the economy, to keep creating jobs, to keep giving working Americans the boost that they need. Now is the time to make a real difference in the lives of the people who sent us here. So let's get to work.
Thank you very much.
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BLITZER: All right. So there he is, the president of the United States, making a statement urging Congress to go ahead and pass, to extend and, in his words, expand the tax cut for middle class families, the tax savings plan.
Gloria Borger, you just watched the president. I didn't hear a lot of compromise there. He was still insisting that there has to be a surtax, an increase in taxes on millionaires and billionaires, in his words, although so many Republicans are saying, if that's the way the Democrats are going to continue to so-call pay for this tax cut, they're not going to vote for it.
BORGER: Right. Well, he made the point that we just had a serious round of deep spending cuts, that he doesn't want to constrict the economy any more than he already has. So he doesn't want to offset these things with more substantial spending cuts, although I will say Harry Reid's bill does have some spending cuts in it.
And then he made the point, of course, Wolf, which is, how can Republicans take the pledge not to raise taxes on Americans when, in fact, if they let this payroll tax cut expire, that is exactly what they will be doing on middle class Americans? So, clearly, a political statement there.
BLITZER: Kate Bolduan is our congressional correspondent.
Kate, what are the Republican saying on this very specific point, that, in effect, if it expires, if it lapses, this payroll tax cut at the end of this year, that effectively would be an increase in the tax rate for millions and millions of middle class working families?
BOLDUAN: A couple things on that actually, Wolf.
We have heard from some Republicans that they do not believe extending this payroll tax cut has helped to stimulate the economy to this point. They do not think that it needs to be extended, and especially, if extended, it should not be paid for by, in their view, a permanent tax hike on job creators to pay for temporary stimulus.
But I will tell you there is acknowledgement here amongst Republicans that Democrats seem to have a winning message here. Politically, if we could talk politically, as things often are up here, they do seem to have the upper hand.
I mean, when you hear the president be able to say that Congress should keep your word to the American people and don't raise their taxes, for a Democratic president to be targeting that message to congressional Republicans is quite a change of fortune, if you will. After a closed-door meeting of House Republicans late last week, I spoke with several Republicans, one of them being Congressman Peter King, a well-known Republican from New York. And I asked him, "If you do not vote to extend the payroll tax cut, what does that say?"
And he acknowledged that if Republicans in both the House and Senate do not push forward to extend this tax cut, that Democrats have a winning message here. And that's what he said, at least -- that's what he believes at this time, in this economy, where people are still hurting. And, of course, knowing the politics at play, he thinks that the payroll tax cut does need to be extended. And I'll tell you, amongst Republican leadership, they do agree that this payroll tax needs to be extended. How that's going to happen and what the details are going to look like, Wolf, of course is really where they're fighting about now. And it's a bit of a mess. They're getting out their political messages right now, but in the end, there seems to be agreement that it should be extended, at least amongst leadership -- Wolf.
BLITZER: That Christmas/New Year's congressional recesses hovering over all of these members, Kate, as you well know. And that will put enormous pressure on them to get the job done between now and then. We'll see what happens.
Kate Bolduan, thanks very much.
All right. So, there it is. The president of the United States made his statement. You saw Harry Reid there, the Democratic Leader in the Senate, make his statement.
Lots of news happening. I want to throw things back to Brooke Baldwin at the CNN Center in Atlanta.
Brooke, you're going to have a busy couple hours right now, because on top of all of this, Newt Gingrich, a Republican presidential front- runner, he's talking to reporters right now himself.
BROOKE BALDWIN, CNN ANCHOR: Right. And you can see it at the bottom right side of the screen.
We've been watching as it's sort of been dueling people speaking. You took live Senate Majority Leader Harry Reid. Now we see former House Speaker and now the man who is hoping to be standing at that precise podium where we saw President Obama speaking moments ago to reporters there at the White House, Newt Gingrich.
This is a man you know, Wolf. When you were Chief White House Correspondent you covered him under the Clinton administration.
We're going to take this live in just a moment. He began this news conference.
Wolf Blitzer, you stand by.
We'll be right back with more on Newt Gingrich.
(COMMERCIAL BREAK)
BALDWIN: And welcome back. I'm Brooke Baldwin.
So, as we were listening to the president speaking live from the White House daily briefing, what was also happening simultaneously from New York at the Union League was Newt Gingrich speaking to a crowd there. Let's play that from moments ago.
(BEGIN VIDEO TAPE) NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Let me say, some of you look familiar, some of you look different from the last -- as I said earlier today, we were partially coming to New York to make the case that, if I do become the nominee, that we will run a 50-state strategy, because I believe the (INAUDIBLE) choice can be so wide in the gap between the most effective (INAUDIBLE) president in American history and a candidate who wants to create jobs and paychecks will be so wide, that we really will have an opportunity to have a dialogue in every single state in the country.
In addition, I was invited this morning to meet with Donald Trump. And let me set the stage.
I've been talking a little bit about the importance of work, particularly as it relates to people who are in areas where there is public housing, et cetera, where there are relatively few people who go to work. And this has been interestingly distorted by some people who suggest that the working poor, by definition, know how to work, which his true. That's why they're called the working poor.
I was talking about people who come out of areas of neighborhoods where they may not have that experience. And I'm curious. How many of you earned some money doing something by the time you were 10 years old? For some of you, it might have been babysitting or cutting grass or doing something.
The reason I ask that question is that it's fascinating to me when with I go out and talk with very successful people that it might have been their parents or their grandparents, it might be the neighborhood, in a variety of ways that (INAUDIBLE) began to learn something about the relationship between work and income, and they pretty rapidly accelerated to understanding those.
And so we're looking for methods to help the poorest children in America have, if you will, a bridge to learning to work, learning their jobs. And I was delighted this morning. I suggested to Donald Trump that he adopt a program of apprentices and take one of the poorest schools in New York City and create 10 apprenticeships that would be paid for part-time work. And he liked the idea a lot, he understood exactly what I was getting at.
It fit his own past, his own childhood, his own experiences. And so he said he would be glad to do that.
And I hope over the next few weeks to convince a number of other major businesses and small businesses that may only have one person. But to be able to create a model that says, we really don't want to create a pathway to work for people -- when you have 43 percent black teenage unemployment, there's a very, very serious challenge of making sure the people get the work habit and learn the skills and the requirements of being successful. So I thought that was a positive step forward, and I'm delighted to be here, and glad to take your questions.
Yes? QUESTION: You said earlier relatively few people go to work, speaking of those in housing projects. (INAUDIBLE) are you using to say that? Have you been to a housing project and know that, actually, a number of them actually do work there?
GINGRICH: Yes. Fist of all, I used to run a program called Earning by Learning (INAUDIBLE) in the summertime, and I paid poor children $2 a book for every book they read in the summer. We did it all through the 1980s.
One of our first experiments, we had a young lady in Georgia who was 8 or 9 years old, and she read 83 books that summer and got $166. And so I've been to a fair number of housing projects over the years. But if you look at the largest urban housing projects, you'll find areas that have remarkably few people who have work experience.
Yes?
QUESTION: (INAUDIBLE) Romney the other day. What are two areas of issues (INAUDIBLE) importance of others making the choice?
GINGRICH: Well, I think that the way I'm proving Social Security, which is to create a younger American's right to choose a personal Social Security savings account which includes basically the Chilean experience and the Galveston, Texas, experience, is I believe, based on what little I've seen of Mitt's program, dramatically bolder and more oriented towards individuals empowerment and individual choice than what he was doing if I read correctly his program.
Second, I would say that the paper we have issued on rebalancing the judicial branch and the fact that I'm prepared to call for abolishing the office of Judge Berry in San Antonio because he is sufficient a bigoted anti-religious judge that he violates the American tradition and the American system, I think that's probably the bolder position than Romney would take.
But I think -- I think you'll find our platforms different. Another example, I am for abolishing capital gains tax. I think he caps his cut at $200,000, which I think would be a lower cap than Obama has, which I thought was unusual.
QUESTION: You said there were -- differences between you and Mitt Romney. Do you think --
GINGRICH: Well, I don't know that you ought to count running for the Senate in 1994, running for governor then running for president for six years. I don't know if that makes had him a career politician or not. I'll let you decide.
It's also fair to say I've been a successful candidate a number of times. It's also fair to say as a citizen I've been very clear and proud of the fact that I started working as a citizen at 15 years of age because I think citizenship is very important. I would hope that Governor Romney would think of himself as a citizen.
QUESTION: -- talking about an attack on the wealthy as far as this month. They're talking about raising the tax on the wealthy as well as lowering the tax on others, maybe not as high as the rate is now, but it would be a tax increase on high income earners. Would you comment on that?
GINGRICH: Sure. If I were on the floor in Chamber of Commerce, I would encourage him to do it. Somebody didn't say --
QUESTION: What does the -- your campaign is sort of an unusual barebones operation, apparently one of your advisers told the "New York Times" you're running by the seat of your pants.
Do you feel like your campaign has the wherewithal to go into a long, drawn-out campaign, go through a number of primaries -- that's necessary to run that kind of campaign?
GINGRICH: I find it fascinating. We have all of these articles about how businesses are getting leaner, how they're flattening their hierarchies, doing all sorts of things, people now work from home, you have virtual organizations, all of these cutting-edge ideas.
Then you have a group of consultants that who -- expenses. If you were the consultants you'd feel that way, too, because that's your money. We run a very decentralized campaign. The two top people in our finance operation have not seen each other for 11 months.
We actually got together the other day in New York. Didn't affect them at all because they know what -- look like. They're able to call each other as often as they want. They e-mail each other 400 times a day and the system works.
I run offices -- in the operations I ran in recent years before I decided to run for president, we had extended offices in it Atlanta, Miami, Charlotte, St. Louis, and Washington, and one time also in California. And it didn't bother us at all. We just kept moving forward.
So I'm used to running very extended operations. I don't know -- we're certainly -- by the seat of our pants by the sense that when we saw the American ambassador of Belgium had give be an anti-Semitic speech in Israel, we immediately shifted and talked about that.
When I saw this morning Mr. Trump to be generous and help us make the point about work, we shifted and moved to that topic. But I think in other areas, for example, much confusion about what we're doing in Missouri, which is not a mistake. We have never participated in beauty contests.
We didn't participate in Ames. We didn't participate in presidency five and the Missouri primary doesn't have any delegates attached to it. So we had lead this was conscious decisions. This was not an oversight.
QUSTION: Mr. Speaker, earlier today Nancy Pelosi said she relished the idea of dredging up ethics investigations when you were speaker of the House. What would you say to Americans who don't want to go back to that time? GINGRICH: First of all, I want to thank Speaker Pelosi for what I regard as an early Christmas gift.
QUESTION: In what sense?
GINGRICH: Well, she's suggesting -- she's been using the terms of what she developed on the ethics committee. That is a fundamental violation of the rules of the House and someone should file charges against her the second she does it. I think it tells you how -- be political that was. It tells you how tainted the outcome was that she was on it.
And I think what she said today should explain a great deal about what happened in the ethics process when Nancy Pelosi is at the heart of it and is prepared to totally abuse the House process.
It will be useful education to the American people to see what a tainted political ethics operation Nancy Pelosi was engaged and I hope the House condemns her if she uses any material while she was on the ethics committee.
It is a violation. We turn over a million pages of material. We had a huge report. The total -- 83 charges were repudiated as false. The one mistake we made was a lawyer written by a lawyer.
That is the only mistake in the entire process. Every other charge against me was found false in the long run. The course was totally legal. The work we did was totally legal, but, as you know corrections are here on page 17.
UNIDENTIFIED FEMALE: Last question -
(END VIDEO TAPE)
BALDWIN: GOP White House hopeful and former House Speaker Newt Gingrich speaking there in New York moments ago. I want to bring in our chief political analyst, Gloria Borger.
Gloria, I have a number of questions for you. If I may just begin with these comments he was making with regard to Leader Pelosi. I was trying to make out the question.
I know it's tough to hear with the flashes, et cetera, in that small room. But pretty damning comments it sounded like toward her, it sounded like, and toward the House Ethics Committee. Can you put that in context for us?
BORGER: Well, you know, he did go up before the House Ethics Committee when with he was a member, and it had something to do with a book he wrote and the royalties he got for the book.
He clearly -- what he was saying today was, OK, Nancy Pelosi, you put a shot across my bow today that saying you have an awful lot to say about those ethics charges, I'm going to give it right back to you.
And if you want to raise that, I'm going to make you the issue. And I think what Newt Gingrich is gambling on here, quite frankly, is that if it's a race in the Republican Party between Newt Gingrich's word and Nancy Pelosi's word that he's going to win that.
And that, in fact, it would benefit him and the Republican Party, as we saw in the primaries, to be running against Nancy Pelosi. So he is all too happy to engage with her.
BALDWIN: OK. I want to also ask about something you've written quite a bit about, you know, the crop of candidates and which candidate the establishment Republicans like, right?
So you have these Republicans. They're struggling with the notion of Gingrich getting the party's nomination, if that happens, and we talked last week -- I was talking last week actually to Candy Crowley about former Congressman Guy Molinary.
And I know this goes back to a grudge, but who was actually calling Gingrich evil, and then also Senator Tom Coburn expressing down to -- over the weekend about Gingrich.
And I have one more for you. I want to read this. This is from conservative columnist George Will writing in the "Washington Post."
Here's the quote, Gingrich embodies the vanity and rapacity that make modern Washington repulsive. There's the quote. How deep, Gloria Borger, is this anger, this opposition to Gingrich among the establishment?
BORGER: Newt Gingrich is one of the most interesting political figures I've ever covered because, of course, he brought about the revolution of Republicans finally taking back control of the house from the Democrats after more than 50 years in the '90s, and he was a hero to Republicans.
Within, you know, a handful of years, Newt Gingrich left the House in shame. Having failed to lead the Republican Party to what he said was going to be a real transformational shift in the party to Republican domination in this country and left the House because they had lost congressional seats.
He was up on ethics charges. So, you know, here's a man who was at the very height of sort of political popularity who went to a very low depth and didn't even run for re-election. So, you know, he is somebody who is so controversial, whose leadership really disappointed Republicans.
And the rap on Newt Gingrich is he is somebody who calls himself publicly a transformational figure, that Newt Gingrich is in fact too in love with himself.
And, when you talk to other politicians who say that, that's saying something because generally politicians like to hear themselves, so when you hear it from other politicians you really have to kind of listen, and they worry about how he would be as a political leader in this country. You know, it's -- he's a controversial guy.
BALDWIN: They're wondering how he'll be, but then we're hearing from some of the potential caucus goers in Iowa, they so far seem to be a fan. You know, the Des Moines Register now showing him as a solid number one lead there.
How does that square with the fact that his rifles have been slugging for months and here's Gingrich with a sudden burst of momentum?
BORGER: Well, here is the interesting thing. I went to a focus group in suburban Virginia last week with 12 Republican primary voters. A couple of things are really interesting to me.
First of all, there's not a lot of affection for Mitt Romney. They respect him, but they don't really love him. Newt Gingrich, they don't really know that much about him.
There's an awful lot of history to Newt Gingrich, but for a lot of voters, including Iowa caucus goers, he's very new in the scene. He's put up an ad in Iowa now spent about $250,000 --
BALDWIN: First ad.
BORGER: -- introducing himself very positive to the Iowa voters. What the Romney campaign is telling me is, there's not a lot of time here. We need to educate people just about the negatives of Newt Gingrich, but we're not sure we have enough time to do it before the Iowa caucuses.
BALDWIN: It's 26 days.
BORGER: Well, and we're going to have to see whether Romney starts getting really negative, more and more, about Newt Gingrich or whether are surrogates will do that to take on Gingrich before those caucuses.
BALDWIN: Right. Romney has been focusing so much on President Obama, but perhaps we'll hear a little bit more on Gingrich specifically. Gloria Borger, thank you very so much.
BORGER: Sure.
BALDWIN: I really appreciate your perspective.
Still to come here, it's something that affects just about any working American, and this time, time is running out for Congress to extend the payroll tax cut.
If it does not, pretty good chance your paycheck, taxes will be going up. Just a short time ago, a major development, including a surprise announcement from President Obama. Is a compromise coming? Chief White House correspondent, Jessica Yellin standing by. That's next.
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BALDWIN: Well, we heard it again from the president from the White House daily briefing. He says he cares about you, cares about your money and your family. He thinks Republicans need to get on board.
Minutes ago, he spoke about the fight over whether or not to extend the payroll tax cut, which expires at the end of this year. Now, the president put it in pretty extreme terms. Republicans are willing to give tax cuts to the rich, but not the middle class. Here he was.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Now, I know many Republicans have sworn an oath never to raise taxes as long as they live. How could it be the only time there's a catch is had when it comes to raising taxes on middle class families.
How can you fight tooth and nail to protect high end taxes breaks for the wealthiest Americans and yet barely lift a finger to prevent taxes going up for 160 million Americans who really need the help? It doesn't make sense.
(END VIDEO CLIP)
BALDWIN: Let me go straight to the White House to our chief White House correspondent, Jessica Yellin. As I mentioned, you know, the payroll tax cut, its extension that expires at the end of the year.
So if Congress doesn't act and quickly, this goes away and as the president pointed out, you know, families could see at least $1,000 less in their paychecks. And he said it is the right thing to do.
JESSICA YELLIN, CNN WHITE HOUSE CORRESPONDENT: That's right. And the White House has also maintained all along that it is likely to pass in the end, Brooke, because they believe that Republicans know as well Americans can't afford to get hit with this kind of increase in this economic environment.
Politically it would hurt both parties if the payroll cuts were not to be extended next year. It would hurt the economy too is the assessment of people on both sides. The big question is how will they pay for it?
So we're playing a bit of a game of chicken up to the very end here before Congress goes on recess on the question of how to pay for it. So you're seeing this last-minute fight, each side holding out on how they'll negotiate this.
Big surprise that we would push it to the very end right before Christmas break to figure that one out, Brooke?
BALDWIN: Yes. I'll be talking to Kate Bolduan about this game of chicken that's currently playing out on the Hill. We'll do that a little later.
But Jessica Yellin, do me a favor, just stand by. I want to set this up for our viewers. This is another topic we wanted to tackle with you.
About the other president's other big economic push this week. So the president is making this major effort to get this man confirmed by the Senate. Who is he?
He is Richard Cordray. He is nominated to head up the Consumer Financial Protection Bureau. It's been ready to do business pretty much since last July, but still there's been no one in charge to head it up.
So the Senate votes on Cordray's nomination is coming Thursday. Republicans are vowing not to confirm him. They say he would have too much power over the financial industry and that the agency isn't accountable enough to Congress.
But, without a chief here, without a director, the agency cannot regulate things like payday lenders, mortgage brokers and consumer finance companies, some of the worst offenders in the housing meltdown if you remember.
So who is Richard Cordray, again, I ask? Here is a little bit of background. He was attorney general of Ohio from January of '09 to last January. Before that, Cordray was Ohio state treasurer for two years.
He also served four years as a treasurer of Franklin County and then back in the early '90s, Cordray served in the Ohio State House. The White House says they are taking Cordray's nomination, quote, "directly to the American people" and they are.
Because you're going to see a lot of the president this upcoming week, in fact, tomorrow, he's making a speech in Kansas and he's targeting seven other states as well.
So Jessica back to you in terms of the political stakes for President Obama and this whole nomination fight over Richard Cordray, what does he have to gain in terms of the timing by doing this right now?
YELLIN: This is a fight the White House loves to have because it hits right at the president's sweet spot, going into this election. They are looking to emphasize that the president was trying to work for regular Americans, working Americans, consumers against faceless corporations that would try to rip off regular folk.
And Cordray could be the face of that in a sense, Brooke and so this hits -- this aligns the president with, in their view, those regular Americans and against the evil, dark practices of folks who started, for example, the foreclosure crisis with illegal foreclosure and mortgage kinds of efforts.
So, in a sense, without seeming anti-business, it's a way for the president to align himself with the better elements of sort of the forces behind the "Occupy Wall Street" movement, if you see it that way, without overtly aligning himself with "Occupy Wall Street" or being on the side of consumers without overtly aligning himself with excessively liberal elements of the Democratic Party.
So it's a way for him to be a warrior for the working people without being too excessively fringe or extremist and risk alienating independent voters. I think it's a message you'll see the president carry forward throughout the campaign -- Brooke.
BALDWIN: Yes, and it's a name of someone we wanted to get out ahead of the curve. We're going to be hearing a lot about as we mentioned seven different states, the president speaking -- taking messages to the people.
Over the upcoming week, again, Thursday is the Senate voting on this man's nomination. Jessica Yellin for us at the White House. Jessica, thank you.
Developing right now, the U.S. admits a drone is missing. The Iranians claim they shot it down, but perhaps the most disturbing part of this story?
The possibility that this drone may be revealing American secrets. We'll go live to senior international correspondent Nic Robertson, next.
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BALDWIN: Iran's military still insists it shot down an American spy plane, an unmanned reconnaissance drone. Officials say it's possibly in Iranian hand, but they're disputing how it possibly got there.
Want to go straight now to London to CNN's senior international correspondent Nic Robertson. Nic, first, what is NATO's side of the story?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, NATO says they were operating a surveillance drone on the border of Afghanistan and Iran on the Afghan side of the border and they say they lost control of it as it was coming in to land.
Based on that, that seems to tally with what the Iranians are saying that they shot one down and brought one down and that they have it intact. The Iranians are saying it's a stealth drone, the RQ-170 Sentinel. They haven't offered any proof. They're not putting out any pictures of the stealth drone aircraft.
So that's where the sort of where the disconnect is at the moment. Do they really have it? How much of it do they have and exactly what aircraft is it? That was NATO's side. They were flying it along the border.
BALDWIN: OK, go with me. If they have it because whether, you know, the drone crashed or whether it was shot down, obviously it's a big deal if Iran has it, but why? I mean, what exactly can one glean from this thing?
ROBERTSON: Well, the great thing about drones is they're cheap to build, cheap to operate, you don't risk losing pilots, but this downing if the Iranians have it, could be really costly and really expensive not just to the United States, but to its allies.
Look, think about Iran. Iran is a known state sponsor of terror. They're believed to supply Hezbollah and Lebanon with weapons. Iran has its own drone technology. They launched earlier this year and demonstrated publicly a bomb carrying drone.
When Hezbollah, believed to be with the help of Iran, fought a short war with Israel in 2006, Hezbollah was using drones. So potentially here you have Iran getting highly sensitive equipment, knowing what sort of lenses, viewing capability, perhaps how to replicate this stuff, and giving it even to Hezbollah.
This puts Israel potentially in the crosshairs as well as many other countries or they could sell this technology on to, say, China. These are the issues, Brooke.
BALDWIN: OK, Nic Robertson in London. Nic, thank you.
Coming up next, we're going to talk about not just one, two celebrity moms both of whom are troubled women. Mindy McCready, we talked about her recently. Police found her hiding in a closet on the run with her 5-year-old.
Also, Brooke Mueller spotted dancing the night away right before police arrested her for drugs and a bar fight. These two women have had their fair share of problems, but they're also mothers. Does that change the way their cases are handled? Back in 90 seconds.
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BALDWIN: Look, no parent is perfect, but how messed up can a mother be before the state steps in to take her children? You know, people are asking the questions after the troubles of these two different celebrity moms -- that's what you're talking about.
It's trending today. So first, I want to talk about this weekend arrest of Charlie Sheen's ex-wife, Brooke Mueller, the mother of twins. Mueller is charged with assault and possession of cocaine with intent to distribute. She had more than four grams of stuff on her according to police.
Now look at this, TMZ got the surveillance video of Mueller dancing in a nightclub in Aspen after she allegedly attacked a woman. Then case number two, country singer, Mindy McCready, she went against court orders and took her 5-year-old son, Zander, from his legal guardian. That's McCready's mother in Florida.
Two days ago, police found Mindy hiding in a closet with this little boy is Arkansas. That boy, by the way, is now headed to Florida to be with his grandmother.
So we're going to bring in doctor of psychology, Wendy Walsh who has done extensive research on both, you know, mother/child bonds, what's at stake here.
Wendy Walsh, want to begin with Brooke Mueller. Reportedly her ex, Charlie Sheen, bailed her out. Do you think she should be able to take care of two twin boys?
WENDY WALSH, HUMAN BEHAVIOR EXPERT: Now we're talking about the world of drug dealing potentially. This is four grams of cocaine and law enforcement has long known this is not a healthy environment for small children because of all the ancillary activities, Brooke, that come along with drug dealing. So it could be dangerous here. She's got an assault charge as well. She could be physically violent. The problem is from a psychological perspective, this would be a terrible attachment injury for 2-year- olds. So what does the court do? They look to protect them physically first.
BALDWIN: OK, so that's Brooke Mueller protecting the physicality of these children. Mindy McCready, they find her and this little boy in this closet. Her mother who has custody of this child obviously wanted the child back. What does Mindy McCready have to do to show a judge she can be a full-time mom? Mind you she is pregnant with twins.
WALSH: Yes, she has to mind her Ps and Qs and do exactly what the court says for a long enough period of time and that would be abstaining from any drugs and alcohol. It would following all the court visitation exactly as it says in the documents.
I fully believe, Brooke, the thing that prompted her to take her child is the fact she's pregnant and the pregnancy hormones make attachment issues come up high in women. So my heart goes out to her, but she has to follow the court if she wants the child back.
BALDWIN: Wendy, do you think in both cases, it's more difficult or more of a challenge to have all these going on in your life and be famous?
WALSH: It's always easier if you're famous. If you have more money and more notoriety, you have more access to better lawyers. I'm telling you. If either of these women have brown or black skin and were low income, those kids would just be removed immediately.
So I don't want anybody saying they're getting special treatment or they're not getting special treatment. They are getting special treatment just because they have the money and the access to people who can help them.
BALDWIN: Just can't help but think about their little ones.
Wendy Walsh, thank you so much.
