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Gingrich Takes Lead in Latest Iowa Poll; Democrats' Payroll Plan; S&P Threatens Eurozone Downgrade; Blasts Rock Afghanistan; Blagojevich Sentencing Hearing; Queen's Salary Frozen; Nervousness on Wall Street; S&P Threatens Eurozone Downgrade; Obama-Clinton 2012

Aired December 06, 2011 - 08:59   ET

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

KYRA PHILLIPS, CNN ANCHOR: Well, it seems like just yesterday that Newt Gingrich's campaign was in serious trouble. And this morning he's on the top of the latest Iowa poll but his excesses made him a target of Republican rivals and a top House Democrat.

CNN's deputy political director Paul Steinhauser covering all the angles for us.

Paul, let's go ahead and start with this news out of Iowa.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, Newt Gingrich, it seems, Kyra, surging at the right time. Today is four weeks until those Iowa caucuses. That's the first contest in primary caucus calendar.

Look at this brand new poll out of Iowa this morning. ABC News/"Washington Post." Look who's right at the top there. Newt Gingrich far ahead of everybody else in this brand new survey of likely Iowa GOP caucus goers, 33 percent.

Mitt Romney, the former Massachusetts governor, and Ron Paul, the congressman from Texas, just tied for a distant second at 18 percent.

But another poll in Iowa today, CBS/"New York Times" shows it much closer.

Let's go to South Carolina, as well. South Carolina, of course, the first southern state to vote, it goes number three in the calendar, it votes on the 21st of January. Take a look at this from Winthrop. And this is also, again, showing Newt Gingrich on top. Far ahead of Mitt Romney. Romney at 23 percent. Gingrich 18 points ahead, Rick Perry at 9 percent.

So, Kyra, I guess Newt Gingrich is -- his job now is to take all these surging poll numbers in these early voting states and his national poll numbers s well, and translate it into an operation, make sure he gets the teams in place in these early states to get those voters to the caucuses and primary sites -- Kyra.

PHILLIPS: All right. Well, let me ask you about this. Nancy Pelosi is saying that she has some information on Gingrich and Newt is sending her a warning.

What the heck is going on here?

STEINHAUSER: Yes, this started yesterday and, remember, this goes back to the late 1990s when Gingrich was House speaker, and he was facing 84 ethics investigations, and Pelosi says that she maybe, maybe will unearth some of the stuff that was never made public.

Here's what she said. "I know a lot about him. I served on the investigative committee that investigated him. Four of us locked in a room in an undisclosed location for a year. A thousand pages of his stuff."

So that's what Nancy Pelosi said. Here's what Newt Gingrich said to our Jim Acosta yesterday in New York after the story broke. Take a listen.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I want to thank Speaker Pelosi for what I regard as an early Christmas gift.

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Are you concerned about that information reemerging?

GINGRICH: We turned 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 letter written by a lawyer that I didn't read carefully.

(END VIDEO CLIP)

STEINHAUSER: In all, it was just a couple of years ago that Pelosi and Gingrich made that commercial together for global warming. Then I guess the times have changed between the two. The story far from over -- Kyra.

PHILLIPS: Well, it's going to be interesting to see what this 1,000 pages of stuff, Paul, that you -- that you described. We'll track it.

For all the latest political news, you can go to our Web site, of course, to CNNPolitics.com 24/7.

Well, time is running out to extend the payroll tax cut. If there's no deal by the end of the year, you could pay higher taxes next year. Senate Democrats are floating a new proposal.

And our congressional correspondent Kate Bolduan has all the details for us.

So what's in the plan exactly, Kate, and what are the chances that it will succeed?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Yes, the very important question of what are the chances it will succeed, Kyra. Democrats, they're calling it -- this a compromise offer but Republicans probably not a surprise do not see it that way. We'll get to that in a second. But first, what's in this new proposal from Senate Democrats. Like the original offer to extend the payroll tax cut the Democrats put on the table last week, but it failed in the Senate last week.

This new plan would extend and expand the employee payroll tax taking the tax from a 4.2 percent tax cut to a -- down to 3.1 percent tax cut. Also, a major difference that Democrats say in this new proposal is that Democrats are scaling back the so-called millionaire surtax. A surtax on income over $1 million.

Now they're changing the tax to be just under 2 percent tax down from just over a 3 percent tax. They are also making the millionaire surtax temporary, which they say they've done as a concession to Republicans because Republicans were opposed to this. They say, in part, because they do not support imposing a permanent tax to pay for a temporary economic stimulus policy. That's not the only reason, of course, that Republicans oppose this millionaire surtax.

Another major difference just to point out is that this new plan does not provide a tax cut to employers and Democrats have done that in order to bring down the overall cost of the package and to try to win over more Republican support.

We could see a test vote on this latest measure, Kyra, as early as Friday, but it's not likely to move very far as Republicans do not support it. Just listen here to -- I'll read you a statement from Senator Orrin Hatch, Republican from Utah.

He said in response to this latest package, "It's hard for the majority to call this a compromise when the other side hasn't been involved." He also went on to call it a political show vote and that it is going no where and a lot of this has to do with this millionaire surtax that is -- that is given many proposals in the past -- Kyra?

PHILLIPS: All right, Kate Bolduan on the hill for us, Kate, thanks.

So there's a grim warning for eurozone countries today. Standard & Poor's says it may downgrade the credit ratings of 15 of the 17 eurozone nations unless there's strong action to end the European debt crisis. European leaders are scheduled to meet on Friday.

Now German chancellor Angela Merkel and French president Nicolas Sarkozy want amendments to European treaties to deal with the financial crisis.

Our Zain Verjee is in London and she's got a look at what European newspapers are saying about all this.

Good morning, Zain.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Good morning to you, Kyra. Great to see you. Let's go straight to the papers and see what the headlines are.

"The Scotsman" says this. "Kiss of life for Europe." It goes on to say, "Implementing treaty changes could take months but a commitment to tighter coordination could open the way for further emergency aid from the European Central Bank and the International Monetary Fund or some combination of the two."

"The Wall Street Journal," the Europe edition says, "What's Berlin and Paris Wrought." It says, "As the new proposal heads to the European council for its consideration, we'll get a good look at whether the continent's two largest economies have truly found common ground or if they have merely diluted their principals into meaninglessness.

Finally, Le Figaro says, "The scenario of a multi-speed Europe says, too. And under pressure Sarkozy cannot allow his partners from the Eurozone a choice on what to do about the single currency. He wants to set them on a force march to save the common currency."

The bottom line is by Friday, Kyra, they need to get it done. There's a danger that they'll have to kiss the euro good-bye. And, obviously, they don't want that to happen. The U.S. can't have that happen either. So there's a big push to make sure that they're able to deliver.

Kyra, I've missed you.

(LAUGHTER)

PHILLIPS: I've missed you, too. I'm glad you're back. Let's have a good week, Zain, thanks so much.

All right. We're going to move on to Afghanistan now. We have two explosions in two different cities to tell you about. They hit on the Shiite holy day of Ashura.

Fifty-eight people, we're told, were killed, dozens more were injured.

CNN's Nick Paton Walsh is actually live in Kabul for us this morning.

Nick, we just saw the video there of the explosion and you are actually there. Tell us exactly what happened.

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: Well, we arrived after the blast and the image you're just seeing was shot by a photographer John Wendell who was there as it actually happened. But I can tell you from his experience there, we're talking about a tensely packed crowd there.

Shia worshippers moving to this location in central Kabul to a shrine there to celebrate -- sorry, to pass the morning of this day, Ashura. Clearly (INAUDIBLE) looking to cause as many casualties as possible. Fifty-four at least in that one blast alone. A gentleman describing what he saw eyewitness to the attacks saying that actually bodies found out in an almost fan-like direction around the location of the explosion.

So intense was the blast and so tightly packed together were they, people fleeing across the nearby river and very dirty river, indeed, just to escape the scenes of carnage, actually. Absolute terror in the center of Kabul, and another element to today's horrific scenes. People not quite sure why Shia Muslims were targeted on this vitally important day.

I know the phrase Shia and Sunni conflict is something which we are very familiar with from Iraq but it has not been an element thus far, really, in the decade of war here in Afghanistan. People can see themselves as Tajik or Pashtun in the south, but not really. The sectarian violence between Muslims and deep concerns here today when the Taliban come out and deny anything to do with this attack and, in fact, condemn it.

Question as to who was really behind it. Are we embarking on some new element, the sectarian conflict here in Afghanistan and really can the Afghan people take anymore.

PHILLIPS: All right. Appreciate it, Nick. We'll continue to follow what's happening there.

Well, he was convicted of trying to sell the president's old Senate seat, now Rod Blagojevich is back in court for sentencing. We're going to talk to the reporter of "Chicago Sun-Times" who's been following the story from the very beginning.

And Queen Elizabeth's picture is on Britain's money, but that doesn't mean she has an unlimited supply herself. Cost-cutting at Buckingham palace just ahead.

(COMMERCIAL BREAK)

PHILLIPS: And here's a quick look at news from across the country.

BP has filed a lawsuit against its drilling partner, Halliburton. This is related to the oil rig explosion last year in the Gulf of Mexico. Now BP claims Halliburton destroyed evidence of problems with cement in the wall. The explosion killed 11 people and set off that massive oil leak.

And take a look at what people in New Mexico are dealing with. Icy, snowy storm had hit the state yesterday. It's been so bad that some parts of Interstate 10 and 25 are closed. There is a winter storm warning in effect until late this afternoon. Some places just could get more than a foot of snow.

And if you have a Christmas tree, better check it for snakes. The family in Idaho found one slithering around the branches and called the fire department to get it out.

All right. Former Illinois Governor Rod Blagojevich soon will find out his fate. His sentencing hearing on corruption charges begins today in federal court. One of the crimes he was convicted of, trying to sell or trade the Senate seat vacated by President Obama.

Joining us now Natasha Korecki at "Chicago Sun-Times." She's been following Blago for years. She is there.

Natasha, how much do people really want to hear him apologize and do you think he actually will?

NATASHA KORECKI, FEDERAL COURTS REPORTER, "CHICAGO SUN-TIMES": You know, I think the people of Illinois have been living with this saga since 2008. This spectacular arrests back then. The investigation went on years before that into his underlings. I think the people of Illinois really do want to hear an apology from him and, you know, lots of experts are saying, that's what he needs to do.

He needs to step up to the plate today and actually one of his chief lawyers Shelly Sorosky told "The Sun-Times" today that he will step up to the plate, going to make a statement in court, as you may expect, and he will step up to the plate and say something. So, we'll see how that apology goes, but he definitely needs to do that, if he wants to get any leniency from the judge today.

PHILLIPS: Well, we've all seen his live interviews since all of this has gone down. And I think it's pretty fair to say he's got quite the ego. But do you think he's freaking out a little bit about how much time he could spend in the pen since Tony Rezko got 10 1/2.

KORECKI: I think that probably shook his world. If he had any illusion that he was going to get off with a light sentence, after Tony Rezko was of course one of his chief advisers and fundraisers, she got 10 1/2 years. That is an incredible sentence for public corruption.

And he is not a public official -- Rezko is not a public official as Blagojevich was and he's not considered as the head of the conspiracy as Blagojevich was, so a lot of experts are seeing that as starting point.

PHILLIPS: All right.

KORECKI: Now, Zagel can do what he wants. He doesn't have to see it that way, but a lot of people are saying that would only be fair.

PHILLIPS: Well, what's your gut on sentencing and how do you think this is going to play out?

KORECKI: You know, I think it's going to come down to a lot of factors. This is a very methodical judge. He's -- I don't think he is going to be driven by emotion and trying to just send a message. I think he's going to go through the law.

And in federal court, it's a complicated system. We have to make a lot of, a lot of decisions and he's going to go through each factor. I wouldn't be surprised if there were overtime (ph).

PHILLIPS: Wow. All right, Natasha, you know better than anyone else. You have been following this from the very start for the "Chicago Sun-Times."

Natasha Korecki, thanks for calling in. I appreciate it.

KORECKI: Thank you.

PHILLIPS: You bet.

The holiday shopping season started out strong with record Black Friday and Cyber Monday sales, but it could be fizzling out. A new study says that many Americans are pretty much finish with the spending. We're going to go to the New York Stock Exchange for a few more details.

And it seems like everyone is trying to make do with less these days, even Britain's Queen Elizabeth. We'll tell you how she's actually tightening her royal belt.

(COMMERCIAL BREAK)

PHILLIPS: Well, living like a king or even a queen isn't just what it used to be, folks. Hard times caught up with Britain's Queen Elizabeth.

It's irresistible stuff for Conan O'Brien, of course, on TBS.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, COMEDIAN: Because of new austerity measures, in Britain, Queen Elizabeth is taking a pay cut. That's a true story, yes. She's also looking for a roommate on Craigslist.

(LAUGHTER)

O'BRIEN: No fatties.

(LAUGHTER)

(END VIDEO CLIP)

PHILLIPS: Not quite that bad. But the Queen is facing a salary freeze.

Let's get straight to Zain Verjee in London.

Zain, what is this? Down and out at Buckingham Palace?

ZAIN VERJEE, CNN INTERNATIONAL CORRESPONDENT: Kyra, you could be the queen's roommate, you know? Things are pretty tough over there these days.

PHILLIPS: Oh, good, you're saying I'm not fat. Thank you very much. I appreciate that.

VERJEE: I could see you in St. James Palace there and a little room there.

PHILLIPS: I might get on her nerves, Zain. Let's just lay it out.

VERJEE: Well, here's the deal, right? She needs to share the pain and what's been decided is she's going to be taking a pay freeze over the next couple of years or at least until 2015 is what a lot of people are saying. That means her pay is now only $50 million.

Now, there has been a reduction of what she gets paid. I think at one point, she was getting paid a $120 million a year. But part of the problem is that now, they're not going to be able to repair a lot of the things that need repairing at these really old palaces. And she can't have as many lavish parties or state affairs as she's been used to.

But the money that she does have, the $50 million, she'll be able to run the palaces, travel the world and just be the queen. But she's going to make some of these sacrifices.

And one of the things they're thinking about doing is rent out rooms at St. James' Palace or other places -- as the Olympics come up, but people need a place to stay. But you have to be vetted on this list, Kyra.

PHILLIPS: I could just imagine.

VERJEE: So, that's it.

Well, you definitely don't have to be vetted, you know, the royals like you -- the rest of us. But the queen actually gets 15 percent from what's called the profits of the crown state. So, that's something like $10 billion from Regent Street, half the U.K. coastline, as well as Great Windsor Park. So, the money's coming. I wouldn't worry too much.

PHILLIPS: Well, I'm also told Prince Charles will be affected by these cuts, as well.

VERJEE: Yes, poor guy. He is going to be affected, too. But the one thing it's going to impact is Will and Kate. They're emerging as big superstars around the world and Prince Charles has been told that he has got to use his money to pay for their expenses and underwrite everything that Will and Kate need or the duke and duchess of Cambridge. So, that's one of the ways it is going to hit him, Kyra.

PHILLIPS: All right, it shall continue. The economy is impacting everybody, even the royals.

Zain Verjee, thanks for the scoop.

VERJEE: All right.

(MUSIC)

PHILLIPS: Eurozone lingers are holding a flurry of meetings to try and deal with this debt crisis. Well, talking of downgrade and recession, that's heating up, of course.

Alison Kosik is at New York Stock Exchange.

So, Alison, let's talk about how it's all affecting U.S. stocks today.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know what, Kyra? Surprise, surprise. At this point, not seeing the reaction that you'd think, you know, we're looking for stocks to open slightly higher in eight minutes when the opening bell rings. Those gains are going to be limited today after Standard & Poor's warned after the closing bell yesterday, it may downgrade the ratings on 15 eurozone countries, including Germany and France. Those are the richest countries in the eurozone.

But as I said, the reaction is pretty subdued at this point. Analysts say, you know what, this shows that investors they were not too surprised about this move. Also, you've got Wall Street holding out hope that the debt crisis sort of has this light at the end of the tunnel because what's happening now is eurozone leaders are holding these make or break meetings this week and some say the summit of euro leaders at the end of the week is really the last chance to stop the crisis from spiraling out of control.

So, you're seeing a little bit of optimism today that things may actually sort of be stemmed a little bit, Kyra.

PHILLIPS: All right. Well, tell me if this is a good thing or bad thing. It's only December 6th. But we're hearing a lot of people are already finished with their holiday spending.

How is that going to impact the economy? We wanted people to spend, spend, spend all the way until the end, right?

KOSIK: Exactly. But if you're the one out there going through all the crowds and spending all that money, you're sort of relieved at this point.

But if you look at the economy, it's kind of bad timing because of what you said. You know, economic growth in this country is still very sluggish. It needs people to get out there and continue spending, spending, spending.

But guess what? "Reuters" says 32 percent of Americans, they've already finished most of their shopping in November.

Analysts say retailers may have to wind up offering more sales to lure people back in, because people surveyed are worried about Europe. They're worried about political gridlock in Washington, the rising cost of living and unemployment.

So, you've got lots of people out there looking for discounts or focusing their shopping on discount stores.

Also, they took advantage of Black Friday. Many people went out there and spent everything they had on that Black Friday frenzy and they're saying, that's it, I'm done. I'm not going to go back.

But, of course, that doesn't help the economy as much -- Kyra.

PHILLIPS: All right. Alison, thanks, opening bell in just about six minutes. We'll be there. Appreciate it.

All right. We'll talk more about Europe's possible credit downgrade and what that means for the U.S. Our Ali Velshi and Christine Romans joining us live in studio.

Hi, guys. Great to have you here.

And, of course, we're not pimping the new book, of course not.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: No, not this book.

PHILLIPS: No, not that book. No.

(LAUGHTER) Plus, life after death for Larry King, maybe. Our former colleague says he wants to be frozen when he dies. Find out why in today's "showbiz headlines."

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories now.

Nearly 60 people are dead after two suicide bombings in Afghanistan. One of them at a Shiite shrine in Kabul. Taliban spokesperson condemned these attacks coming on the Shiite holy day of Ashura.

Well, President Obama travels to Kansas for a speech on the economy this afternoon. He plans to talk about this make or break time for the middle class and the need for equal opportunity for all.

And Occupy movement members are taking their protest to Capitol Hill today. The group plans to march to Capitol, meet with representatives and occupy congressional offices for the entire day.

All right. U.S. markets open this hour with new uncertainty about the euro. Standard & Poor's warns that it may downgrade 15 eurozone nations unless there's stronger action on the European financial crisis.

Now, two of our top financial experts here with us in Atlanta, in studio this morning. Ali Velshi, Christine Romans.

So great to have you guys here.

VELSHI: Good seeing you.

PHILLIPS: You actually got a book signing, right? Is that the deal?

All right. We'll talk about the book in just a minute. But let's talk about the U.S. markets and how they're going to relate to this credit warning.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Everything matters. You know, what's happening in Europe really matters here. We've said it over and over again. But is the biggest destination for U.S. goods.

So, if there is a recession or worse in Europe and it doesn't get its mess together, Kyra, that means American factories will close. So, that's why it's so important.

S&P is saying they're worried about recession. They're also worried about political will in this area to get things fixed there. It's going to mean treaties and a lot of compromise by people right now who preferably don't agree.

(CROSSTALK)

PHILLIPS: That's the last thing we want to hear, is American companies closing.

VELSHI: These are people who buy what few goods and services we put out.

The S&P warning, I would tell you, that anybody who's been reading a paper or watching the news from several months will know that there are problems in Europe. So, the fact that S&P says it's going to downgrade some people, I would be surprised if the market reaction is so exaggerated to that.

ROMANS: It doesn't change anything today. It's S&P putting into writing what we all know and that is that Europe is in a big mess, and it doesn't have a lot of time to come up with some cohesion about how to fix it.

PHILLIPS: Yes, but how much time do they have and what does it mean for us right now? You say it doesn't impact us today.

ROMANS: Well, everything is impacting us today, I would say. Uncertainty about Europe is impacting business leaders, decision- making right now, it's affecting our own Congress as it tries to figure out -- look, we can't even decide on a payroll tax holiday how to get that done, right? And you look at the decisions they're trying to make in Europe and I think it's important cautionary tale.

VELSHI: I think we know the S&P downgrade if it happens doesn't change anything today, because it's just a reflection of what we already know is going on. But it's -- as you and I discussed, how many times we discussed this over the years? It's all psychological.

If that European consumer decides it's over, things are going to be really bad, they will stop buying. It's not a deadline kind of thing. It's a sentiment thing.

PHILLIPS: But here, I was just talking with Alison Kosik, right, that black or Cyber Monday was incredible and everybody was spending, spending, spending just a couple weeks ago and now all of a sudden, it's kind of slowed down.

VELSHI: Right. Because things feel a little better here. We've seen slightly better jobless numbers, job creation in fact, lower unemployment rate. We've seen things happening here.

But one thing, if we learned anything from 2007 and 2008, is that it really does matter what happens else where in the world. So, that's why we're worried.

ROMANS: I would also say that our reliance on the American consumer to fix the problems is also so 2005.

VELSHI: Right.

ROMANS: I mean, the whole hype about, look, Black Friday, all this -- the problems was Americans spent too much on borrowed money and the rest -- the Chinese saved too much and Europe didn't invest enough. Those global imbalances, they still exist.

VELSHI: Right.

ROMANS: And so when we cheerlead the American consumer trying to dig us out, we need an economy that doesn't rely so much on just the American consumer and more diversified economy, we're not there yet.

PHILLIPS: This summit on Friday.

VELSHI: Yes.

PHILLIPS: Why should we pay close attention to this?

VELSHI: Well, you know, why is it different from the five other, six other meetings we've looked at?

PHILLIPS: Right. How many times have I talked to you via the summit?

VELSHI: Because they're running out of options. The fact is, they really have to do something.

So, they are -- we're tinkering on the edges here in the United States about economic things. They're making major, major decisions about whether they'll have balanced budgets and some changes they're going to make structurally to the economy. We have to watch this because they risk not getting money from some of these countries that need bailouts, not getting those bailouts and then really getting into more serious problems.

So, again, this is -- it's important for our viewers to know, this is all incremental. Europe's got to start fixing things. So, it's not just this one summit that matters, it's the idea that they're running out of options.

ROMANS: It matters to us right now because Europe is our ally. And they're our friends. And when our friends are weakened, it makes us weak. And we want -- we want economies to grow because it's good for everyone, and we want politicians to be able to have smart ideas and consensus about how to do that. They don't have that. Guess what, we don't have that here either.

So, we're seeing our friends around the world, you know, hobbled and that's something that bears watching.

PHILLIPS: Speaking of friends, gee, if you're looking for a Christmas gift possibly, a stocking stuffer, oh, look, "How to Speak Money," Ali Velshi and Christine Romans. "The Language and Knowledge You Need to Know."

ROMANS: How did it get in there?

PHILLIPS: How did that happen?

VELSHI: We're signing our book here at CNN Center.

Look, we're very proud of this book because the bottom line is, it's the conversations that the two of us have and the disagreements that we have, which we think mirror the same conversations that people have at their kitchen tables, every day -- education, buying or renting a house, dealing with the budget, investing, careers, what your kids should learn. And we tackle al those things and we don't really agree on a lot of them. So, if people want to meet us and talk to us and tell us about their husband feels or their wife feels, we'll be right here at CNN Center.

PHILLIPS: But, see, you're not married, so that's why this all works.

VELSHI: We are. We are -- just not married to each other.

ROMANS: Yes, we're married to other people.

VELSHI: We're married to other people.

ROMANS: But it's interesting because as friends and for 10 years, we have been reporting all this stuff together, and we come at all these stories from a different angle, Kyra, and it was fun to write about it together and the things that we talk about in the hallway that we don't get to say on the air, put them in a book so people can try to learn how to speak this language because there's no room for -- there's no margin for error any more, you know?

PHILLIPS: That's right. The few of the folks that read the love languages. Now, they can read your book.

VELSHI: Right, exactly.

PHILLIPS: It's just the same type of therapeutic self-help book. But it's about our money and it could save your marriage.

Great to see you guys. Stay here.

VELSHI: You, took, Kyra.

PHILLIPS: OK. And speaking of money problems, well, the IRS is telling a supermodel to pay up. Christie Brinkley owes the government more than half a million dollars. Find out why in today's showbiz headlines.

(COMMERCIAL BREAK)

PHILLIPS: Christy Brinkley's stunning beauty made her famous. Now, her stunning bill from the IRS has put her back in the news.

A.J. Hammer is joining us from New York with all the details.

Uh-oh!

A.J. HAMMER, HOST, HLN'S "SHOWBIZ TONIGHT": Yes. I don't think Christie is all that happy about this being news, by the way. A $500,000 tax lien, of course, Kyra, would be a huge problem for most people. But Christie Brinkley does say, you know what? This is just a simple error. I'm going to have the bill paid by tomorrow.

The IRS placed a $520,000 lien on one of Brinkley's homes, a 20- acre estate, out in the Hamptons. While Brinkley responded to the news on her Facebook page, here's what she's saying: "I never had an issue with the IRS. I have never intended for my tax returns to be filed late. And I was surprised to learn that online on Friday, December 2. I immediately instructed my accountants to remedy the situation, which for most people is a private matter. I regret not paying more attention to accounting, but I have been and remained focused on my whole family as both my parents navigate serious health issues."

I can tell you, Kyra, 20 acres in the Hamptons, that's worth a lot of money, millions of dollars. Brinkley is actually a bit of a real estate mogul. She used two other properties in the beach front community and they were on the market over the summer for more than 20 million bucks combined.

With all of that, Kyra, you would hope the people you hire to keep track of these things are actually doing their job. Apparently, they weren't.

PHILLIPS: So, got my attention is I'll have it paid by tomorrow. That's a lot of money to be able to just cut a check.

All right. What's this about Larry King saying he wants to be frozen after death?

HAMMER: Yes, of course, Larry never wants to leave a party early, Kyra. You know that. He told his plan for life after death to a crowd of celebrities during his fantastic special called "Dinner with the Kings." It aired on Sunday night on CNN. He said that he hopes if he freezes himself, doctors can fix whatever killed him and they can bring him back to life.

And when he told everybody his plan, Conan O'Brien chimed in and said, why Larry, why? Larry said he was hedging a bet.

So, Kyra, hopefully this isn't something that we'll have to worry about for a while, but Larry, quite frankly, could be interviewing fascinating people well into the 23rd century if his plan goes well.

PHILLIPS: You know what, it would be Larry King to do it for sure.

A.J., thanks so much. We'll see you next hour.

He's going to -- A.J. is going to join us for more showbiz headlines. We're going to find out why Johnny Depp's Christmas song is not very popular with some Christians. A.J. is going to tell us about that.

All right. Also coming up, she's an influential adviser to President Obama and a popular secretary of state. So, could Hillary Clinton be bumped up to running mate? New op-ed said she's Obama's ace in the hole.

And survivors of the Japanese attack on Pearl Harbor gathering in Hawaii to make a significant anniversary. Cross country is right after the break.

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PHILLIPS: All right. Live pictures from one of our affiliates KTVK out of Phoenix, Arizona, right now. This is a transformer that's been burning in an APS substation, apparently since last night. It's not clear what started the massive fire, but we're told it began about 10:00 p.m. last night.

You can see those flames. They've been shooting 20 to 30 feet in the air, according to recent reports.

And the burning, they're saying is right now, there we go. We got a wide shot there from our affiliate. It's about half of the football field looking at the entire area there.

And while no power outages have been reported so far, we're told that they are expected to try to get this out or at least contained within the next two hours. All right. We'll follow it.

Checking other news making news across country now.

Amanda Knox one step closer to telling the world about her ordeal inside the Italian justice system. She's hired celebrity attorney Robert Barnett to represent her and a possible new book deal, as well.

The state of Vermont is standing by an artist in his struggle with Chick-fil-A. The fast food giant says his "eat more kale" t- shirts violate their trademark slogan "eat more chicken." Vermont's governor helped set up a campaign to help that artist with legal costs.

And survivors of the Japanese attack on Pearl Harbor are gathering in Hawaii to mark a milestone. Tomorrow is the 70th anniversary of the date that will live in infamy.

Well, independents and moderates put Barack Obama in the White House. And to stay there, he needs to hang on to them next November. But polls show their support is slipping a bit. So, clearly, president needs a plan.

KYRA PHILLIPS, CNN ANHCOR: Well, Independents and moderates put Barack Obama in the White House and to stay there, he needs to hang on to them next November, but polls show their support is slipping a bit, so clearly, the President needs a plan.

L.Z. Granderson says a plan should be Hillary Clinton. He stumps for an Obama-Clinton ticket in his new op-ed on CNN.com as he shakes his head. L.Z. you actually write quote, "Obama's one-time foe is his ace in the hole". Explain.

L.Z. GRANDERSON, CNN.COM CONTRIBUTOR: Absolutely. I don't think as an incumbent it will be beneficial to try and run and saying I'm not the other guy, right. So he needs to get people excited about both his record, as well as his ticket.

Well, the record lukewarm at best right, because of the economy. However, there are things he can do to invigorate his ticket. And one of the things could be to supplant Joe Biden with Hillary Clinton. I think that if Hillary Clinton is on that ticket he invigorates his base and it gives something that Independents like myself will have to think about. Because she is a very formal politician, a very proven politician, a competent woman.

PHILLIPS: Now, how do you know this partnership would be accepted?

GRANDERSON: Well, you know there's -- if this hadn't happened in 2008 I don't think it would have been accepted because they had such a bitter primary. The difference is that she's had an opportunity to work with him over these last two and a half, three years as Secretary of State.

I don't think people will be as cynical to think it was strictly a political move. Because she has been in his executive office, she has been working with him very closely. And they've been working hand-in-hand and there hasn't been any reports of them actually fighting.

So I think this go-around in 2012, Hillary-Obama on the same ticket makes a lot more sense than it would have in 2008.

PHILLIPS: So what do you say to those who think that Obama could actually feel threatened by Clinton? You know she's got this growing fan base and there are a lot of people out there that say, hey, in hindsight, she would have been a better president.

GRANDERSON: Yes, absolutely; 34 percent I believe it was the Harris poll that said that the country would be better if she was in office. But President Obama does not strike me as the individual who is threatened by credible people. He doesn't strike me as someone who would be threatened because he -- the reason why people love him so much is because of his confidence. And he's very confident. I think he will see her as an added bonus to his own strength not as a challenge to his.

PHILLIPS: L.Z., always good to see you every Tuesday. And you can read L.Z.'s piece at CNN.com/opinion. If you like, join the conversation, leave a comment for him. He loves that.

25,000 stuffed animals hit the ice. The teddy bear toss is a holiday tradition for hockey fans. We'll tell you about it in sports. Seven minutes from now.

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PHILLIPS: Well checking stories making news later today.

President Obama traveling to Kansas to deliver to deliver what's being billed as a major speech on the economy. That begins at 2:05 Eastern Time.

At 3:15 Eastern, former Vice President Dan Quayle holding a news conference to endorse Mitt Romney for president.

And at 5:18 Eastern, House Speaker John Boehner flips the switch to light the Capitol Hill Christmas tree.

Well, we're following lots of developments in the next hour of the CNN NEWSROOM. Let's go ahead and check in first with CNN deputy political director, Paul Steinhauser -- Paul.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Hey Kyra two brand news polls out this morning in the battle for the GOP nomination show Newt Gingrich is surging and some bad blood I guess you could say or a war of words between Gingrich and another former House Speaker Nancy Pelosi. Details at the top of the hour.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: And I'm Kate Bolduan on Capitol Hill. Senate Democrats are pushing a new proposal to extend the employee payroll tax cut. Republicans, though, say it's not going anywhere. So what is this fight over your money and your tax dollars all about? I'll have more at the top of the hour.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Hey there. I'm Zain Verjee in London. And I'm going to tell what you newspaper editorials around the world are saying about what European leaders need to do to just deal with the debt crisis -- Kyra.

PHILLIPS: All right, guys, thanks so much. Plus a history of college hazing exposed.

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UNIDENTIFIED MALE: You have to walk from the front to the back of the bus backwards and while the bus is full with other band members and you get beat until you get to the back.

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PHILLIPS: A former band member talks about a ritual that may have killed a Florida A&M drum major. More on that next hour.

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PHILLIPS: All right, you know I've grown up in San Diego.

JEFF FISCHEL, ANCHOR, HLN SPORTS: I know. I know.

PHILLIPS: And it's been really tough watching those Chargers not do so well. However --

FISCHEL: It's been a tale of two seasons. They started 4-1. Thinking this is the team. This is the year. And then they lose six in a row and it seems like each week they were finding a new way to self-destruct. Last night against the Jaguars the Bolts caught lightning in a bottle and played their best game in two months. The Jags, of course, have also struggled. They fired Coach Jack Del Rio last week. Mel Tucker is in charge for now.

Second quarter Philip Rivers finds Vincent Brown a 22 yard touchdown. San Diego takes its first lead of the game. Never gave it up. Rivers he became an elite QB last year but he's made way too many mistakes this year. Last night he looked great. More of Rivers just before the half to Vincent Jackson for the touchdown, Rivers almost 300 yards passing, three touchdowns. San Diego wins easy. They're still alive in the AFC west.

Well, we know who the five Heisman finalists are. Yes, Andrew Luck is there. He's expected to be the number one pick in the NFL draft but is probably not the Heisman favorite. I'm thinking it's RG3, Baylor's Robert Griffin III is the man to beat. The other finalists, runningback Trent Richardson from Alabama and Wisconsin's Monte Ball and the Honey Badger LSU defensive back Tyron Matthew. He don't care. He just takes what he wants.

The teddy bear toss is a holiday tradition at many hockey arenas. Nobody does it better to fans, one of the top dream teams of Canada, the Calgary Hitmen scored their first goal in Sunday's game, fans threw 25,000 stuffed animals on the ice. The players took them to 50 local charities yesterday. Since 2003 the team has collected more than 186,000 stuffed animals for hospitals and charities.

This is great. Teams, junior teams, minor league teams across the U.S. and Canada do this every year this time of the year. It's a really cool thing.

PHILLIPS: Not only is it fun but what a great way to give to charity. FISCHEL: Absolutely. The kids definitely appreciate it. And, you know, fans, they love that. They love Tim Tebow in Denver. Another fan has jumped on the Tim Tebow bandwagon. Photoshopping the quarterback's head into the music video for "All I Do is Win".

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(MUSIC)

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FISCHEL: So instead of (INAUDIBLE) you are seeing Tebow there and, of course, Broncos fans can't get enough of him. He's now 6-1 as a starter and has led the Broncos to the top of the AFC West. People were -- or should he be even starting now -- they're wondering if he's the MVP of the league, right, in just the matter of a few short weeks. You get that kind of going for you when you are that good that fast.

PHILLIPS: It's so opposite of his character, too. But it's funny. Thanks, Jeff.

FISCHEL: Ok.

PHILLIPS: Well, if Occupy Wall Street has one symbol, it would have to be the protest tent. In fact some occupy protesters have become one with their tents.

Here is Jeanne Moos.

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JEANNE MOOS, CNN CORRESPONDENT: Remember when tents used to be something you used to camp out in the wilderness?

UNIDENTIFIED FEMALE: Occupy the police car.

MOOS: Well, now they're being pitched on police cars. They've become a symbol of the Occupy Movement.

UNIDENTIFIED MALE: Floating tents.

MOOS: But instead of floating, these days they're being dismantled by police, and that's what everyone thought was going to happen.

In Melbourne, Australia, police marched forward. But then what seemed like an oddly random verbal signal rang out. Protesters, it turned out, were wearing their tents. They were dubbed the tent monsters. Occupy Melbourne put their antics to music and uploaded them to YouTube.

Police seemed befuddled. One tent even dropped its pants. One of the officers asked how did they do it, to which a protester replied.

UNIDENTIFIED MALE: Gaffer tape. MOOS: Gaffer tape? And then lo and behold the police turned around and left with the tents in hot pursuit. One Web site labeled it Mock and Awe.

Arguments between police and protesters over tents have at times been intense. For instance at Occupy Toronto.

UNIDENTIFIED MALE: Are you going to touch my stuff, sir? Do you have a warrant, sir? Excuse me, officer. I want a warrant.

Reporter: But the only warrant at Occupy Melbourne should have been from the fashion police.

True, tents may not make the most flattering outfits. As one person posted, "Honey, does this tent make my butt look big?"

Jeanne Moos, CNN, New York.

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PHILLIPS: All right. And there's an update to Jeanne's story this morning. The "Herald Sun" reports that the police are cracking down and won't let the protesters wear their tents anymore. One lady apparently refused to lose the tent when police asked. The cops reportedly stripped it off and she was left there in her underwear.