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President Obama to Deliver State of the Union Address; Mitt Romney Releases Tax Returns; Interview With Nancy-Ann Deparle, Obama's Deputy Chief Of Staff; Small Business Owner, One Year Later; Father Turns in Son

Aired January 24, 2012 - 15:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: Top of the hour here, I'm Brooke Baldwin. Couple of stories we're watching for you.

First, big news today, Mitt Romney did finally release his tax records. Also, people in Alabama are sifting through the rubble. And a solar radiation storm is headed Earth (ph). Time to play "Reporter Roulette."

Want to begin with Jim Acosta in Tampa. And Jim, before we talk about Mitt Romney and certainly his prebuttal to tonight's State of the Union, I have to ask about the release of the tax income records, a release from 2010 and the estimate for 2011. We thought it was going to be April.

What changed?

JIM ACOSTA, CNN CORRESPONDENT: Well, what changed is that Mitt Romney was under mounting pressure not only from his adversaries in this race, but from his surrogates.

People like Chris Christie were saying, hey, Mitt Romney, you have got to get this out of the way as soon as possible. And so that's what the Romney campaign did. Now, getting to what is happening today with the former Massachusetts governor, he's trying to move beyond all of this, obviously.

He's been sort of giving his prebuttal, if you will, to the president's State of the Union address tonight. And they have sort of been showing us these postcards from the edge of the housing crisis and financial crisis in this country.

Earlier today, Mitt Romney gave his prebuttal speech inside an abandoned warehouse that used to be an old drywall factory and here we are now standing in front of a house that's been foreclosed on in southwest Florida. So this is sort of what the Romney campaign feels like has been working well for him.

They feel like he's more effective on the campaign trail when he's talking about the president and not focusing so much on his rivals. That's what we're seeing today, Brooke.

BALDWIN: What do we expect to hear from Mitt Romney once he speaks there in Tampa again? ACOSTA: Well, I think it's going to be more of the same.

You know, it's been interesting because, you know, he has been going after the president today. In the last few days, yes, he's been going after Newt Gingrich, a marked departure from that approach all day today.

He went after President Obama earlier this morning, talking about, you know, the way that he feels the president has failed on the economy. There's an interesting little back and forth that was going on between the Romney campaign and the White House over the release of these tax returns.

As you know, Mitt Romney released those tax returns. They showed he paid roughly a 14 percent effective tax rate. That's roughly what Warren Buffett pays, so the White House almost going tit for tat announced earlier today that they were going to have the secretary to Warren Buffett sit in the first lady's box at the president's State of the Union address tonight.

The Romney campaign already had a line in a speech earlier this morning that was sort of tailored to that potential response from the White House. Mitt Romney saying in his remarks earlier this morning, well, the unemployed don't get to sit in the first lady's box.

So it's been going back and forth all day long. I suspect what's the Romney campaign wants is they want to have him going after the president and not spending as much time going after Newt Gingrich.

BALDWIN: Yes. You're right. We looked at the list today sitting in the first lady's box and the secretary is there and no one out of work is.

Jim Acosta, thank you so much for us from Tampa.

Next on "Reporter Roulette," Bob Van Dillen in Clay, Alabama, where people there today are just trying to salvage what they can from their homes after that powerful tornado hit near Clay.

And, Bob, this is the first time. Yesterday, Chad and I were talking and we sort of assumed given the track that this thing took that it was a tornado. Now we can definitively say it was. How powerful was it?

BOB VAN DILLEN, CNN CORRESPONDENT: Well, this was a strong one. This one was an EF-3 tornado. That's about 150 miles per hour.

And when it went down to subdivision that was in Clay, it was the Georgebrook subdivision, that subdivision had about 100 houses. And 20 to 30 of them are just completely demolished where you cannot rebuild and there's no way you can. It was absolutely amazing that anybody survived.

BALDWIN: We know that one 16-year-old girl, she died. She was found right still on her mattress. But beyond her tragic story, people were able to survive it, yes? VAN DILLEN: Yes. That was in a different subdivision than where we were. That was immediately after it. Where I was standing, it looked like the path itself was probably about 100 yards wide. All the people I talked to that rode it out and survived, there are no basements where these people were. It's just the water table is too high, they can't just dig in there.

So they all went to interior rooms, either in a closet where they huddled up or they went into a bathroom and just hunkered down into the shower. And they survived. There were a couple of injuries. One was severe. A guy got thrown out of his house and landed pretty hard on the ground. Immediately next door a lady got thrown out of her house. She was still sleeping in bed.

And the neighbors came out, and picked her up and put her on a door and got her out of there. And she will be OK. But some of the tales of survival are just absolutely gut-wrenching. I couldn't believe my eyes when I walked down in there.

BALDWIN: It's gut-wrenching, but when you're there on the ground and you're covering these stories it's amazing how these neighborhoods, these communities come together right during the cleanup process. How's the cleanup going?

VAN DILLEN: When I got there, there was hardly anybody around. But once that first daylight hit, all the people around came in.

I didn't just see them at one house. I saw people walking around handing out water bottles. I saw all kinds of things like that. I was talking to one guy, Matt, and he rode it out with his wife. And as soon as he found out that his family was fine, he walks outside, he goes, babe, I have got to go. She's like, where are you going? I have got to make sure all my neighbors are fine.

BALDWIN: Oh.

VAN DILLEN: So he's walking around and helping everybody out. It was absolutely amazing. This was the same guy that after I was done interviewing him, he's walking away and he says, hey, if there's anything I can do for you, just my house is down there. I have got water. I have got this. He's asking me if there's anything he can do for me.

BALDWIN: That's amazing.

VAN DILLEN: I'm like, man, your house was almost destroyed. It's just a testament of the people that I interviewed today. It was absolutely amazing.

BALDWIN: You're like, no, how can I help you?

VAN DILLEN: Yes. Exactly.

(CROSSTALK)

BALDWIN: It's amazing. Thank you. Thank you for sharing those stories.

(WEATHER UPDATE)

BALDWIN: That is today's "Reporter Roulette."

You have heard Mitt Romney is in the same tax bracket as 80 percent of us. That means a lot of you watching may have something in common with a multimillionaire who would love to become president, and you may not have even realized this.

And then stick around for this. This is so cool, behind the scenes for Capitol Hill's big event tonight. Dana Bash had breakfast with the House speaker. There's so much more to dish on, like who's already saving their seats. We know who. We're naming names.

Later, how a family's cat became a victim in a political showdown. This is -- it is sick. It is twisted.

Also, in today's "On the Case," a dad's decision to turn his own son in for a relentless beat-down recorded on camera.

Be right back.

(COMMERCIAL BREAK)

BALDWIN: Checking my clock here, State of the Union less than six hours away.

Joining me now live from the White House, Nancy DeParle, the president's deputy chief of staff.

Nancy, nice to see you.

NANCY-ANN DEPARLE, DEPUTY CHIEF OF STAFF TO PRESIDENT OBAMA: Thanks.

BALDWIN: Right out of the gate here, tell me is this a campaign speech or is this State of the Union?

DEPARLE: This is State of the Union, Brooke.

Tonight, the president is looking forward to speaking to the American people about his vision for an American economy that's built to last.

And he will be talking about how do we rebuild our manufacturing sector and American energy and skills for American workers, and he will be talking about a renewal of American values. He's really looking forward to this, because he believes this is a make-or-break moment for the American people, that it's really what's at stake is the survival of our basic American promise, that if you work hard and you play by the rules and you pay your fair share, that you have a fair stake in this economy.

And remember that we have come from the brink, the precipice of a huge economic disaster. When the president took office in 2008, the house of cards that was built on derivatives and things like that had collapsed.

BALDWIN: Yes.

DEPARLE: And he took office and we moved forward, and in the last 22 months, we have added more than three million jobs to the economy. But we have to keep that momentum going. And that's what he's going to be talking about tonight.

(CROSSTALK)

BALDWIN: Let me jump in. We're going to get to the economy in a minute and a little bit more on those numbers.

And I don't want to get you in trouble with your boss, Nancy, but give us a little surprise if you can. Can you just give me something, one little nugget that we will see tonight that might not otherwise -- we may not expect? A little something?

DEPARLE: Well, what if he's watching, Brooke? I really think I need to let him give the details of his speech tonight.

BALDWIN: Well, we hope he's watching.

(LAUGHTER)

DEPARLE: And he's looking forward to really sharing that with the American people.

But I can tell you that he will be talking about some ideas that really Republicans and Democrats alike have supported in the past. He will be talking about problems that we're facing as a country and his vision for how we solve those problems. And the good news is there are things that we can do, we can work together to get them done. That's what he will be talking about.

BALDWIN: Let me bring you back to the numbers you just mentioned and I want to tie this into really the global economy. So you have obviously the good news. That's three million jobs, as you mentioned, in the last 22 months. Unemployment, that number has slowly been decreasing, and now it's at 8.5 percent. That's a heck of a lot better than it once was.

But how do you expect to win an election 10 months from now if this report out today by the IMF, the International Monetary Fund, if it proves correct and the global economy does not grow as earlier predicted? What then?

DEPARLE: Well, what we're focused on is growing the economy. We're not focused on winning an election. We're focused on doing the things that need to be done to really move this country in the right direction.

And that's why the president is going to be talking about rebuilding American manufacturing. We're bringing jobs back. And he will talk about some of the companies that have done that. And you heard him talking about that in the last couple of weeks. (CROSSTALK)

BALDWIN: But that's certainly all interconnected with the global economy.

DEPARLE: Well, he will be talking about building the skills of American workers. And that's something that is something that will help our economy move forward and be more durable than it's been in the past.

So those are the things he's focused on right now. He's not focused on the election.

BALDWIN: Would you say that we're here, that we would totally be out of the mess here we're in if Republicans in Congress hadn't watered down the stimulus, didn't water down health care reform, hadn't resisted various job plans, and hadn't resisted raising the debt limit as they did? Is that your contention, that we would perhaps be looking a little better now?

Nancy, did you lose me?

Oh, we lost her. It happens.

Nancy DeParle, at the White House, thanks anyway.

Mitt Romney's taxes are out today, and he's around the 15 percent rate, like a lot of us. So what is he doing with his millions to keep his tax rate so low? And better yet here, is it something the rest of us could be doing as well, even if we're not multimillionaires? We will get to the bottom of this whole tax issue next.

(COMMERCIAL BREAK)

BALDWIN: Surprise, surprise, Mitt Romney has released his tax returns, his return for 2010, plus an estimate for 2011. And no surprise, Mitt Romney is rich, perhaps like a lot of you would like to be.

We're going to get to the numbers here in a minute, but first politics with chief political analyst Gloria Borger.

Gloria, help me out here, because we know Romney had said he was going to wait until April to release these tax returns. The presumption seemed to be that perhaps he'd have the nomination sewn up by then. Lo and behold this morning, boom, here they are. What happened?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, he got a lot of pressure. He got an awful lot of pressure from Newt Gingrich, who happened to win South Carolina.

And I think the more pressure he got, there was a feeling inside the campaign that, look, we have nothing to hide. You heard Mitt Romney before he released his taxes say that he paid an effective rate of 15 percent. It turns out to be 14 percent. We also know that he tithes his income to the Mormon Church, so you saw that he's given $4 million to the Mormon Church.

So once those -- they dribbled out those details, then they were ready to kind of release his taxes and to sort of just stop the -- you know, the challenge from Newt Gingrich.

One of the rules of politics is, if you don't have something to hide, don't hide it.

BALDWIN: Be transparent.

BORGER: Yes. So they did.

BALDWIN: So here we go. We have his numbers. We will take a closer look there in a minute. But as we said off the top, look, being honest, a lot of people want to be successful, a lot of people want to be rich.

That said, does the extent of Romney's wealth hurt him at all, especially given the fact that he's not even drawing a salary? I don't think a lot of people realize that. He's not even drawing a salary like a lot of Americans certainly do. His income comes from investments and comes from dividends and interest.

BORGER: Right.

Look, first of all, everybody has known as you pointed out earlier, Mitt Romney is wealthy. We probably didn't know the extent of his wealth until we got these recent tax returns. We know that he doesn't have -- he doesn't earn his income. He lives off of capital gains, and so that's why his rate is at 15 percent.

The question and the problem Mitt Romney has is, he seems to be so uncomfortable in talking about his own wealth. The question I have is now that this is all out there, will he be able to talk to it in a way that says to people, you know, I'm rich, but I still understand what the middle class is going through and how the middle class is suffering?

You know, he's had some moments in this campaign where he has said, you know, I know what it's like to be worried about a pink slip or he made a $10,000 bet with Rick Perry. That didn't work out so well for him. So if this makes him more comfortable, then it's a good thing. In the general election, that's a different story.

BALDWIN: Well, you mentioned the middle class and perhaps the issue of relating and also timing here, because, you know, obviously tonight is the State of the Union, the release of the tax returns happening as the president has signaled he's going back tonight -- as we have been hearing time and time again, he's going to bat for the middle class in his State of the Union address.

Talk to me about the timing, how this could help or hurt Romney.

BORGER: Well, in a way, Romney's tax return becomes the proxy for the larger battle over how to reform the tax code. I think everybody in this country agrees, for one reason or another, both parties, that you ought to reform the tax code. So if you're Republican, you're going to say, you know what, that low rate is good. And Newt Gingrich last night in the debate said we should -- Mitt Romney should pay no taxes on capital gains.

Democrats will say, you know what, we want to make the tax code fairer so that lower rate can be available to more Americans. And you know they're going to talk about the Warren Buffett rule, where he said he paid a lower rate in his taxes than his secretary.

BALDWIN: Than his secretary.

BORGER: And there's an argument in this country. Over 80 percent of Americans, by the way, pay a rate that's lower than the effective 15 percent rate.

So there's a way to use the numbers here in this argument. And you're going to hear that from the president in his State of the Union speech tonight, without mentioning Mitt Romney, I might add.

BALDWIN: Right, of course. And we're going to keep talking taxes. Gloria Borger, thank you.

BORGER: Right. Sure.

BALDWIN: Look, fess up, folks. You do it, I do it. This is the time of year we all do it. We're looking for ways to keep a few more of our hard-earned dollars, in other words, pay a little less tax, of course, legally here.

But we wanted to take a look at exactly how Mitt Romney did it. So I'm going to walk over this way, because what we have done is we have taken a picture of what's been released today, right, so some of his tax returns from -- we have 2010 and we also have an estimate kind of from 2011.

So here you go. We're talking about Romney's taxes. As I swipe this, this is actually a copy of part of his 2010 filing. And as I mentioned, he's going to release an estimate of what he will be paying for this past tax year, 2011.

So Romney's taxes, take a look at this. This is the 2011 estimate. Mitt Romney plans to report some just about $21 million in income for the tax year 2011. He plans to pay a tax rate 15.4 percent. Ultimately, do the math, it's about $3.2 million in tax dollars.

So now to this. This is pretty fascinating. Try to see where you fit in, in this whole graph. So you look at the different federal tax brackets. They run all the way from 10 percent. The highest is a 35 percent rate. So, in other words, if you look way down there, you could be making say between zero and 8,500 bucks a year, your federal tax rate is 10 percent and the rate graduates all the way up to 35 percent. So that affects folks if you're making $379,150 each and every year. So back to Mitt Romney. Romney, he's reporting this $20.9 million in income and therefore he's paying the top tax rate of 35 percent, right? No. I don't know if you can see the X. He's not. Mitt Romney is not paying the 35 percent rate on his $20.9 million. He's actually paying -- let me step out of the way -- 15.4 percent.

Let me bring in Lex Haris.

I want you to help me if you will, Lex Haris, managing editor for CNNMoney.com. I hoped you liked our sort of explanation of how all this works. Obviously we understand write-offs, but there's no way that Mitt Romney has $20 million in write-offs to get his tax rate down to 15.4 percent, does he?

LEX HARIS, MANAGING EDITOR, CNN MONEY: No, that's exactly right.

But it is completely legal and actually no one -- we have spoken to a lot of tax experts today -- and a lot of the tax strategies are very above-board and really what we're going to end up having is a discussion about whether the tax laws as they are written are fair.

But, as Gloria even mentioned, really the reason he's paying a lower rate is because most of his income comes from investments and capital gains.

BALDWIN: Investments.

HARIS: Yes, that's exactly right.

BALDWIN: Now, as we understand it, Lex, he didn't draw anything resembling a paycheck, did he? When we look at this figure, the just about $21 million, this is all investments and you mentioned capital gains. Is that kind of income treated totally differently?

HARIS: That's exactly right.

And there's a good reason for it. The idea is to encourage investment. It's actually a good thing to have an advantage in the tax code to encourage people to invest. Where it gets dicey is you have -- usually it's really rich people that are making the investments, and so you can have someone like Romney, who's not really working, who has all of his money working for him, and it -- just every year -- and he can kind of churn out $20 million in income, and, as you say, without any wages that would be taxed at that higher 35 percent rate.

BALDWIN: OK.

So just for fun -- and I know fun and taxes don't often go in the same sentence, but for fun walk me through this. So you have rich, richer and richest, Obama $1.8 million, Gingrich $3.2 million, Romney $21.7 million. This represents their 2010 returns. Walk me through the pie charts provide by you guys, CNN Money, because there's some other stuff in there as well.

HARIS: Yes. So the story here is that they're all really very wealthy, and it's just a matter of degree at this point. And in the case of -- you hear about the 1 percent. In the case of Romney, I think it's the 0.0006 percent.

In the case of Gingrich, he's paying a much higher tax rate. He's at a 31 percent rate, I think. And the reason is because most of his money is coming from business investments. He had some capital gains and some investments, but not nearly as much as Romney did.

In the case of Obama, in addition to the $400,000 salary that comes with being president, he had a very lucrative book deal. I think it was about $1.5 million. So that's where the difference in the rates come.

BALDWIN: But back to Mitt Romney and his newly released tax returns. As we all sit and marinate over doing our own taxes for 2011, is there anything we can learn from how Mitt Romney did it?

HARIS: Oh, man, that's a tough one. You have got to start by getting really, really rich.

(CROSSTALK)

BALDWIN: What if we're not really, really rich, Lex? What if we're not really, really rich? How can we use what he did?

(CROSSTALK)

HARIS: Well, it's -- you know, there are some very simple personal finance strategies. In other words, take advantage of all your tax shelters. I mean, he has a lot of money in an IRA, for example, that shelters, where your money grows tax-free each year.

He took advantage of gifts to his kids each year. And that money can be made tax-free. So it's little stuff like that. It doesn't -- this stuff doesn't even scratch at what Romney ultimately was able to accumulate. But those are the kinds of things that ordinary folks have to do if they want to work down their tax rate.

BALDWIN: Yes, the little stuff can go a long way.

Lex Haris, CNNMoney.com, thank you so much. Appreciate it.

BALDWIN: And as we have been mentioning, we are a couple of hours away from the State of the Union. And, as always, there will be regular folks sitting with the first lady. Coming up, we are going to catch up on one of the guys who sat with her last year. I'm talking about a man by the name of Jim Houser from Portland, Oregon.

He became the face of health care reform. And we just wanted to check in. How is he doing one year later? We are going to ask him next.

(COMMERCIAL BREAK)

BALDWIN: Presidents make a lot of promises during their State of the Union speeches, so today we're holding President Obama accountable. And the concept is simple. CNN correspondent Tom foreman takes a fine-tooth comb through the issues and tells us is this a promise kept? Is this a promise broken, compromised, a work in progress or stalled. Here now we talk about the promise about earmarks.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: The president drew a few lines in the sand in his last State of the Union, and this was one of them about spending.

(BEGIN VIDEOCLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If a bill comes to my desk with earmarks inside, I will veto it. I will veto it.

(END VIDEOCLIP)

FOREMAN: True to his word, he has not signed any bills containing earmarks, at least none that we can find. He didn't veto any either, however, because they never came his way. The Senate Appropriations Committee declared an earmark moratorium not just because of the veto threat but also because the House said it would not approve any bills with earmarks. We should know that the president has often straddled this fence. He's been a sharp critic of earmarks but he's also signed bills containing multiple pet projects, including a spending bill in 2009 that had almost $8 billion worth. Not his fault, but we'll have to say circumstances left this pledge a promise kept, though only on a technicality.

(END VIDEOTAPE)

BALDWIN: Tom Foreman, thank you. And we want to rewind, took you back one year, President Obama's State of the Union speech and health care reform. Huge hot button issue in Washington. And sitting with First Lady Michelle Obama were 21 regular Americans, including small business owner Jim Houser. And on that night last January, Houser, really became the face for health care reform.

(BEGIN VIDEOCLIP)

OBAMA: I'm not willing to tell Jim Houser, a small businessman from Oregon, that he has to go back to paying $5,000 more to cover his employees.

(END VIDEOCLIP)

BALDWIN: Houser and his wife own an auto repair shop in Portland, Oregon, and they qualified for the small business health care tax credit, something that falls under the Affordable Care Act. But a lot has changed in the last year so we want it to talk to Jim Houser. We want to bring him back and see how his small business is doing.

Jim Houser, nice to have you on. Nice to meet you.

Let me just first ask in terms of money here, how has that tax credit translated for you in terms of dollars and cents?

JIM HOUSER, SMALL BUSINESS OWNER: Well, I can tell you that at that time the president was being very conservative in estimating. We had estimated between $5,000 and $10,000, and actually it came out to $12,903 was our tax credit for our health insurance that we paid for our ten full-time employees and their families. So it was actually quite a bit better than we had even expected. Our accountant had made an estimation, but in fact he underestimated. So it was actually pretty wonderful.

BALDWIN: Just about double, it sounds like.

HOUSER: Well, it's one month's -- the equivalent of one month's free health care premiums. It puts us back to probably 2007 is when we last paid that little. Our premiums had doubled from 2001 to 2008. So it's like a time machine for us.

BALDWIN: So with this time machine and this chunk of money, what exactly, Jim, does that money mean for a small business like yours? How did it help things?

HOUSER: Well, it meant we didn't have to cut our wages. It meant we didn't have to ask employees to pay for their health care, which would have had the effect of a pay cut.

I mean everybody -- nobody would want to do that to their employees, to ask them to work for less. And so we didn't have to do that. We've actually hired one more full-time employee in 2010 and then in 2011 just in December, we put on one more full-time employee who also happens to be an Afghanistan vet.

BALDWIN: Wow. I'm just going to go on a limb since you were sitting there last year, that you will be sitting, I'm assuming, at home watching the State of the Union tonight. And if so, what do you want to hear from the president?

HOUSER: Well, what I think has to be the first -- the first thing is jobs, because we need more customers, and we need customers. Right now we have customers, but they are doing the minimum. They're ignoring some of the needed maintenance. They're putting it off. We need more customers who are in a position to take care of their investments, like their car, and so we need a program that puts people back to work. Gives people the income they need. You know, hard- working Americans that can have an income they rely on so that they become my customer and can take care of their investment, which is their automobile.

BALDWIN: As you talk about, though, adding customers and adding jobs, you know, obviously we're covering very closely the Republican presidential race and a lot of these candidates now therefore, they say they have solutions, they can create jobs and they say their plans are better than the president. Any chance you're going to vote for one of those guys instead of Obama? HOUSER: I haven't seen the program. The only program I've seen is that we hate Obama. I haven't seen any programs come out. I mean they talk about cutting regulations. Regulations aren't going to create any jobs. They talk about cutting taxes. That's obviously not created any jobs. We've been cutting taxes since 2001 and meanwhile spending went up through all of those years. That hasn't created any jobs. The stimulus did a pretty good job, at least in the Portland area, of saving teachers and firefighters and health care workers.

BALDWIN: Yes. You sound like a lot of people, though, that I've talked that say enough of this negative campaigning, whether you're slamming one another or the president. Whatever side you fall on, you know, we want to hear specific solutions. And perhaps we'll be hearing that as the months of course continue to creep toward November. We certainly hope so.

Jim Houser, Thank you. Best to you.

And tonight CNN's special coverage of the president's State of the Union address begins 8:00 Eastern, live from Washington, D.C.

Now to this, a Chicago teenager is turned in by his own father. This after his dad saw video of his own son beating up a kid. We're going to go "on the case next.

(COMMERCIAL BREAK)

BALDWIN: Talk about tough. Parents, think about this. One father in Illinois had to make a choice after he saw this video.

(BEGIN VIDEOCLIP)

UNIDENTIFIED MALE: (EXPLETIVE DELETED) (EXPLETIVE DELETED) (EXPLETIVE DELETED).

(END VIDEOCLIP)

BALDWIN: It shows this gang of seven people beating up, pummelling the student. This is in a Chicago neighborhood. Now, the father, who is a sheriff's deputy, by the way, recognized his own son as part of this group throwing some of the punches, so Michael Palomino turned in his 17-year-old boy, Raymond.

(BEGIN VIDEOCLIP)

MICHAEL PALOMINO, FATHER: It's disturbing what they did to the poor (INAUDIBLE), you know. When I asked him why he did it, he said he didn't know why he did it. He knows what he did was wrong, you know. So now I think he's got to suffer the consequences.

(END VIDEOCLIP)

BALDWIN: Sunny Hostin "On the Case."

Sunny, the video is brutal, it's long. Could the father's actions play into how the judge treats this young man, this suspect? SUNNY HOSTIN, CNN LEGAL ANALYST: You know, we want the law to be color blind, status blind, and in this case even though his father turned him in and his father is a law enforcement officer, his son should be treated under the eyes of the law just the way anyone's child should be treated. They should be held accountable for their actions.

So, you know, many people are saying, well, perhaps his son should have been released on his own recognizance because his father did the right thing by, you know, turning him in.

BALDWIN: Yes.

HOSTIN: But that's just not how the law should work. And so, no, I don't think his father turning him in should have any bearing on this case.

BALDWIN: And, you know, dad says he did the right thing, doesn't regret it, but he's upset for a couple of reasons. First, the fact that his 17-year-old son is being charged as an adult. The other six suspects were all younger, they're facing juvenile charges. Could the judge decide to transfer the 17-year-old's case to juvenile court, is that a possibility?

HOSTIN: You know, sometimes that is a possibility, but he's already been charged as an adult. I don't think that's going to happen here. And that is of some concern, I'm sure, to his father. He was the only child to my understanding on this video without his face covered so many people are saying perhaps he was the ring leader here.

And I've got to tell you, he's looking at significant time because under the robbery charge, that's about three to seven years in Illinois. And even for the aggravated battery charge, that's two to five years on average. And so I can completely understand why his father feels the way he feels. And let's face it, Brooke. I mean, I'm a parent. You know, you hope that when faced with a decision like this, you would do the right thing and turn your child in.

BALDWIN: So he does this, but the thing is, he also -- this father can't afford the bail to get his kid out of jail. Six others have been released, bail for Raymond Palomino set for $100,000. Is that high, Sunny, for charges of robbery and aggravated battery?

HOSTIN: It's not high for the charges. No, it isn't. And it's unfortunate that the others were released, that this child still remains in jail. My understanding is his attorney is trying to raise the money, has a sort of online petition trying to make sure that he does at least get free on bond. But these are very serious accusations. And it's just so very unfortunate that not only has he been charged as an adult, but that he still remains in jail. But that's how the law works.

And again, I have to say as a parent, we would hope that most people would do the right thing and turn their child in. I just -- I don't know that most people would. And so kudos to his father for forcing this child to take responsibility for his actions.

BALDWIN: Kudos to him. By the way, he, Michael Palomino, dad, will be joining me live tomorrow at 3:00 Eastern hour, so we'll continue that discussion. Got a lot of questions for him. We'll see how raising that money, I guess, to get his kid out of jail, how that's going. Sunny Hostin on the case. Thank you, Sunny.

And, you know, Sunny mentioned she's a parent, perhaps a lot of you, you pack your kids' lunch, right? You know those little ice packs that you put in the kids' lunch, maybe your own lunch to try to keep your food cold? Well, some of those packing, little packs, they have anti-freeze ingredients in them. We're going to tell you which ones. Stand by for that.

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POPPY HARLOW, CNN MONEY.COM: Time now for "The Help Desk," where we get answers to your financial questions.

Joining me this hour, Manisha Thakor is a personal finance expert and Lynnette Khalfani-Cox is the founder of the financial advice blog AskTheMoneyCoach.com.

Ladies, thank you for being here. We certainly appreciate.

Manisha, first question to you. This comes from Betty in Milwaukee. Betty wrote us "I have no savings and my student loans will come due in May. Should I cash out my 401(K) and pay off my 28 grand in credit card debt?"

MANISHA THAKOR, PERSONAL FINANCE EXPERT: OK, short answer, no. You have multiple challenges to deal with here. And while it might seem very easy to take that 401(K) money and cash it out, of course, what's going to happen is you're going to have to pay a penalty and taxes. Your student loans aren't coming due in full. It's your first payment. So what I'd rather see her do between now and then is take on some extra work, earn some extra income, tighten that belt and start paying an extra $50 a month on those credit card bills, $100 a month if she can and make sure she can make the minimum payment but don't touch the 401(K) money.

HARLOW: Huge tax implications there.

Lynnette, your question comes from Jeff in Anchorage, Alaska. Jeff wrote, "Although I pay off my credit cards each month, I think I have too many accounts open. How should I close down the cards while avoiding damage to my credit score?"

LYNETTE KHALFANI-COX, FOUNDER, ASKTHEMONEYCOACH.COM: Great question. A couple points that he'll want to keep in mind are that you don't want to close all the accounts at once. That can backfire against you and calls fickle score to decrease.

You also want to make sure that you leave open the account that you've had the longest or the account that has the highest credit line, because part of your credit score is based on the length of your credit history, as well as your credit utilization rate, which just means how much debt you have charged versus how much you have available. So keep those cards open and maybe close one or two, but sequentially over time, not all at once.

HARLOW: And don't get anymore no matter what they offer you.

(CROSSTALK)

KHALFANI-COX: Use them wisely. That's the key.

HARLOW: Use them wisely. Guys, thank you so much. And if you have a question you want answered, just send us an e-mail anytime to CNNHelpDesk at CNN.com.

(COMMERCIAL BREAK)

BALDWIN: Check your lunch bag. The jell packs keeping your food cold may be part of a recall. Here's what we know. The Consumer Product Safety Commission says a dog reportedly died after biting into a cryo-freeze. This is a gel pack made by California Innovations. This is out of Canada. The gel contains poisonous chemicals used in antifreeze.

California Innovation says the cooler that carries the gel packs were sold under C-sport or Traveling Chef in Costco, Wal-Mart, CostYouLess stores. California Innovation is providing refund if you still have one of these gel packs. So go check them.

In five minutes you have "THE SITUATION ROOM" with Wolf Blitzer coming up. We always get Mr. Blitzer with a little preview. We are hours away from the big State of the Union. And, you know, Wolf, I was talking to someone at the White House earlier and they said, you know, without a doubt this is a State of the Union speech. This is not a campaign speech. What does Wolf Blitzer say?

BALDWIN: Really, there's no doubt this is going to be an important speech and it will set the stage for the campaign, the re- election campaign. A lot of the themes that we'll hear from the president tonight will certainly continue over the weeks and months to come. This is going to heat up dramatically over this period, especially once the Republicans settle on a presidential nominee.

We're going on go in depth on the State of the Union. Right now, Jay Carney, the White House press secretary is standing by to join us live from the White House.

Paul Begala, Mary Matalin, they've worked in Republican and Democratic White Houses. We're going to go through what happens. Also the presidential campaign, Newt Gingrich, he sort of backed down last night in the debate. What happened? Mitt Romney was on the offensive. We got a lot of that as well. Brooke?

BALDWIN: Wolf, we'll see you later and tonight, of course.

Meantime, coming up next, Dana Bash. She is going to go behind the scenes for us of the State of the Union address, give us a little sneak peek inside the house chamber floor. We'll be right back.

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BALDWIN: All right, we're five hours away now from State of the Union. Take a look at this video. You can see the set up. It's been going on today. This is the statutory hall, fast-forwarded. This is a spot step away from the House chamber, where lawmakers will be heading post-speech to give all their interviews, and a special political pop appearance today by Ms. Dana Bash, who had been covering this for years and years. You know how it goes.

First, you know, we talk a lot about who sits where and how long are they saving seats. So who's saving seats already?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I think the people who you might recognize from TV, from years and years and years past. They're there again.

Our intrepid congressional producer Deidra Walsh just took a peek inside the House chamber. We couldn't show a picture, because they're not in session. But she went in. She said that there are about seven members of Congress there.

Right now, some of them, Brooke, have been sitting there since 8:00 this morning.

BALDWIN: Wow.

BASH: Elliott Engle from New York, for example. He -- I talked to him about this many times. He loves to do it. He's been doing it for decades. Republicans in the White House. Democrats in the White House, it doesn't matter. He loves to shake hands. Because he says that is the kind of things that his constituents remember. It doesn't matter what bills he votes for. They say I saw you on State of the Union.

Another is Sheila Jackson-Lee. She likes to wear bright green. She wore it last year. She's wearing it again this year.

BALDWIN: So they get to shake hands with the president and also --

BASH: Those aisle seats are critical.

BALDWIN: Get on television as well.

BASH: Exactly.

BALDWIN: Early this morning you had breakfast with Speaker Boehner. How did that go?

BASH: It was very interesting. It was myself and a few other reporters, including our own Candy Crowley. It was about an hour in his suite. I had some coffee and we had some pastries. And he talked about what he expects from tonight, what he expects from this year, which of course we can't forget is a campaign year. He did say that he hopes that the president gives an olive branch tonight. But he also was pretty tough when it comes to the president. Generally, he says that they're already in full-fledged campaign mode, and although he's said that he's told his members, Brooke, that he wants to get things done, when pressed, it was kind of hard to figure out where that common ground is going to be.

BALDWIN: We will see him obviously tonight. Hear from the many folks. See which members of the cabinet will be in the room. See who will be doing the hand shaking. All of that. It is fascinating. We'll take it live on CNN.

Dana Bash, thank you.

Now to Wolf Blitzer. "THE SITUATION ROOM" starts now.

WOLF BLITZER, CNN CORRESPONDENT: Thanks very much, Brooke.