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President Obama's Remarks Expected Soon; Thousands Remain Without Power, More Severe Weather Expected; Election-Year Fight Over Tax Cuts.
Aired July 09, 2012 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ASHLEIGH BANFIELD, ANCHOR, "CNN NEWSROOM": All right. thanks so much, Carol. Nice to see you. And hello, everyone. I'm Ashleigh Banfield. It is 11:00 on the East Coast; it's 8:00 on the West Coast. Let's get started.
At the White House it is T-minus 50 minutes, T for tax cuts, which President Obama is about to make; the defining theme of his 2012 campaign. At 11:50 this morning Eastern Time, he is expected to propose a one-year extension of the Bush era tax cuts, but tax cuts only for households earning less than $250,000 a year.
So, that is a not a new position, make no mistake, but it is a new offensive. Less than four months out now from election day and we've got this thing covered this hour like nobody else.
Just look at all the A-listers - Wolf Blitzer, for starters, standing by in Washington, D.C.; Dan Lothian also at his post at the White House; and Christine Romans is following the dollars and cents of it all in New York; Dana Bash following all the fallout on Capitol Hill.
Wolf Blitzer, let me start with you. This is something that a lot of critics have said is a subject changer because we had real bad jobs news on Friday and that just - it riveted people throughout the weekend. Is this an effort to change the narrative?
WOLF BLITZER, ANCHOR, "THE SITUATION ROOM": It may be, in part, because the White House clearly believes this is a winning political issue for the president. He is going to make the point that for 98 percent of the American people there will be no increase in their taxes. Individuals making $200,000 or less a year, families making $250,000 or less, they will see no increase whatsoever.
If nothing is done, everyone's taxes go up, starting January 1st 2013, that's the so-called "fiscal cliff." For two-percent making more than that, they will go back to the tax rates that occurred during the Clinton administration before the Bush tax rates went into effect, 2001 and 2003. They will go back up to 39.6 percent from 35 or 36 percent right now.
So, he will say these people can afford it. They will pay a little bit more. But it's not going to necessarily undermine the economic recovery. Republicans will say something very, very different, as you know, Ashleigh. They'll make the point that a lot of small business owners, they will be penalized for this and, during an economic recovery, as we have right now, this is the worst time to raise taxes on anyone.
The Republicans say let's renew the Bush tax cuts for another year and then, starting in the course of this year, let's work to achieve broad tax reform. That's the way to do it.
So this is an opening gambit in the battle is going to be rather intense, not only over the next four months but then in the lame duck session before the end of the year that follows.
BANFIELD: And often, Wolf, as you know well, in a campaign season, you get buzz lines and bumper sticker sayings and a lot of that has been class warfare. Do we expect to hear that invoked today after the president say what is he has to say?
BLITZER: Well, even - there's a, you know, a "pre-buttal", if you will, the Republicans already saying this is part of the narrative, this is part of what the Obama administration wants to do, have this class warfare.
You keep hearing - they say - you keep hearing the president and his supporters talking about millionaires and billionaires. They will argue that a lot of non-millionaires and non-billionaires are going to be directly affected by this, as I said, the small business owners who file as individuals, even though they may employ 10 or 12 or 30 or 40 people. They files as individuals. Their tax rates will go up if the president get what is he wants.
So, this is going to be an intense battle and you are absolutely right. The words "class warfare" will be argued intensively.
BANFIELD: OK, I'll throw in my own lingo then. Is it possible this is something the president will be essentially like a speed bump toward the fiscal cliff?
BLITZTER: To a certain degree, but remember, he doesn't have the votes to get what he wants. In the House, there is an overwhelming Republican majority. They will vote against any tax increases.
But even in the Senate, where the Democrats have a slight majority right now, there are still about half a dozen or so Democratic senators, especially some of them who are up for re- election - Joe Manchin in West Virginia; Tester, for example, John Tester; Claire McCaskill. They may declare they are not going to vote for any tax increases which can be used against them in their own re-election bids. They're in very, very tight, close races right now.
So he doesn't necessarily even have the votes in the Senate if he is trying to pass new legislation to get what he wants through. So it is not going to be that easy for the president to get what he wants, certainly not in the House of Representatives, but maybe not even in the Senate. And that explains, I think, to a certain degree, why he may be on a different page. The former House Speaker Nancy Pelosi and Chuck Schumer, the influential senior senator from New York, they both said, instead of the $250,000 threshold, make it $1 million. Don't increase tax on anyone making under $1 million, but do the million-dollar level.
And I think that's, in part. to make it more enticing for some of those Democrats, for example, who are in tough re-election battles.
BANFIELD: Yeah, I think that's something our Dana Bash is going to be able to cover in a moment. If you wouldn't mind standing by for a second, Wolf, I want to skip over to our White House correspondent, Dan Lothian, who's standing by, too.
The flip side of the president's plan for the middle class is his apparent insistence on letting those rates go up for the wealthy, so let's play a quick clip from his former spokesperson and current campaign adviser on CNN's "State of the Union."\
(BEGIN VIDEO CLIP)
CANDY CROWLEY, HOST, "STATE OF THE UNION": Sp the president's totally committed to getting rid of the tax cut for those making $250,000 and above?
ROBERT GIBBS, SENIOR ADVISER, OBAMA CAMPAIGN: Let's make some progress on our spending by doing away with tax cuts for people that, quite frankly, don't need them, tax cuts that haven't worked, and have them pay their fair share.
CROWLEY: So is that a yes or no? The president is completely committed to this? He won't allow it to happen?
GIBBS: He is 100 percent committed to it.
(END VIDEO CLIP)
BANFIELD: That a girl, Candy. Way to go. Get it on the record.
So, Dan, this really looks as though the president is daring Republicans to oppose the tax cuts for the many while insisting on the tax cuts for the few. Real politicking.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And, as Wolf was pointing out, does the president have the votes to get this passed in the Senate? It is unclear at this point.
But what the president is able to do and the reason that they do relish this is fight is because it plays into this narrative that we've been hearing out there on the campaign trail. Do voters want to be with the party and with the president who is trying to help those who need the help the most, the middle class?
Or are Americans willing to go with the other side, the opponent, Mitt Romney, who the president paints as only looking out for the very wealthy? And they relish that fight because they think they are on the winning end of the debate. And you hear that.
We heard that last week in the battleground states of Ohio and Pennsylvania. That's the message that the president has been pushing and he will continue to do that heading out on the road to Iowa tomorrow. Other surrogates will be in key battleground states as well. The reason they are pushing so hard is because they think it really sells well out there.
BANFIELD: So that really leads to what my next question is. This is not necessarily going to be a small or short one-day blitz, is it?
LOTHIAN: You know, we just have to look back to 2010 when the president was standing very firm in his position, but in the end, agreed to extend those - the Bush tax cuts for two years because he had to get a deal done.
And so some are saying, look, the president doesn't have the votes now. What's his position going to be once this battle really heats up? I think we'll have to wait and see but certainly, they believe that the message of this is very clear, pointing to the president's narrative that he is looking out for the folks who need it most.
BANFIELD: All right. Since Wolf mentioned the "pre-buttal", I want to move on what we are talking about to this that exact fact. So, Dan Lothian, stand by for a moment. The Romney campaign already going on the offensive, that "pre-buttal," so to speak, even before President Obama makes his remarks in the East Room.
Mitt Romney's spokesman released a statement today, saying, quote, "President Obama's response to even more bad economic news is a massive tax increase. It just proves again that the president doesn't have a clue how to get America working again and help middle class."
The spokesperson goes on to say, "The president's latest bad idea to raise taxes on families, job creators and small businesses. Unlike President Obama, Governor Romney understands that the last thing we need do in this economy is raise taxes on anyone."
So that is the prepared statement that went out. You can bet your bottom dollar the surrogates will be touting that particular line today and throughout the day all over cable and anywhere else you can find a mike.
It's hard to find a Republican who doesn't like tax cuts, so you would assume the president's proposal would just sail through Congress, right? At least, the House anyway. Maybe not so fast.
CNN's Dana Bash is on the Hill. There is reaction to this and it is kind of unusual. Can you explain?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, that's right. It is that Republicans are not only opposed to the way the president is doing this and have been for some time, but they're actually relishing this political fight. From the House speaker to the Senate minority leader to Republicans who I talked to who help run Republican campaigns for Senate, especially around the country, they are saying, you know what? Have at it. Why is that? Because, yes, they agree with the president that people who make $250,000 and less should keep their tax cuts, but of course, they also want people who make above that to keep their tax cuts. They argue that is what is critical to keep the economy going.
And I just, as you were talking to Wolf and others, got an e-mail from a senior Republican strategist who is saying that they not only welcome this debate, but whether they have a vote or not in the Senate - which I will get to in a minute - they are going to hammer this issue and tie every Democratic candidate to the president's speech today.
Republican Senate candidates around the country are gonna really hit Democrats, saying effectively what their message is, which is that they believe that the president wants to raise taxes on - not all Americans, but some Americans and the Americans that Republicans believe are engines for economic growth.
BANFIELD: So, now the - the Republican leader in the Senate, he's got - he's got his own deal. He's got his own plan that he wants to outline and make sure Americans know about it.
BASH: That's right. In fact ...
BANFIELD: Dana, can you hear me?
BASH: Yes, I do. I thought you were throwing to the sound bite, but I'll do it. I apologize. Let's listen to Mitch McConnell. He is the minority leader. This is what he told Candy Crowley yesterday about the idea of extending tax cuts.
(BEGIN VIDEO CLIP)
SENATOR MITCH MCCONNELL (R), MINORITY LEADER: You know, what we ought to be doing is extend the current tax rates for another year with a hard requirement to get through comprehensive tax reform, one more time.
I negotiated with Vice President Biden the two-year extension of the current tax rates we are in now. The president signed it because he argued that to let taxes go up would make the economy worse. We have a slower growth rate today than we had then. That would settle at least part of the problem.
(END VIDEO CLIP)
BASH: So, here's the bottom line. House Republicans can and likely will pass yet another piece of legislation that extends all Bush tax cuts. It won't go anywhere in the Senate.
Senate Democrats, who run the senate, a top aide told me today that they do intend to hold a vote, despite the political perils for some Democratic candidates, to hold a vote to just extend those tax cuts up to $250,000 and less and we expect to see that likely in the next month or two.
BANFIELD: since we are talking about acrimony or at least people who don't always get along or see the same thing, let's talk about some of the Democrats. Because the president is at odds with some of his Democratic leadership on just exactly what this tax cut proposal should read and we are talking numbers here.
BASH: That's a really good point, Ashleigh. And I think what you are alluding to is the fact that Nancy Pelosi, the top Democrat in the House, Chuck Schumer, who is a leader in the Senate, they are all advocating passing a tax cut extension for people making $1 million and less.
For people, like Chuck Schumer, who represents New York, which includes Wall Street, part of the thinking there is that one of the goals of having this debate isn't just to appeal to the middle class. It is also to say that they want to jump start the economy.
Part of the issue, economists will tell you, is that the economy is having trouble getting going because of the uncertainty in the tax code and that's another reason why the Democrats on Capitol Hill, some of them say, well, let's just extend it up to $1 million.
When it comes down to it, because, frankly, at this point, this is, you know, these are debates and these are votes that are going to be had without the likelihood of actually getting to the president's desk. It is a difference but not that big of a difference when it comes to what really matters.
BANFIELD: All right, Dana Bash on Capitol Hill. Stand by, if you will, for a moment.
Let's get right down to the money. What does it mean for your money? The bottom line, we like to say. Our CNN business correspondent, Christine Romans live in New York now.
So you and Ali Velshi have been busy all week long, hammering away on your shows, your business shows, about how Congress needs to act now or the economy will be in even worse shape. I think you like to say this is the "fiscal cliff" coming at you like a - well ...
CHRISTINE ROMANS, ANCHOR, "YOUR BOTTOM LINE": A Mack truck?. To mix our metaphors.
BANFIELD: Sure.
ROMANS: No, look, this is something, if Congress can't decide what to do with these expiring, you know, tax goodies and all these looming spending cuts, you're going to have a huge shock to the economy in the beginning of the year.
The Congressional Budget Office has said that would result in a recession, another recession at the beginning part of next year. So these Bush tax cut are a very big part of this thing we are calling you the "fiscal cliff." So what does it mean? OK, here are the tax brackets. The president wants to keep these tax brackets of 10 percent 15 percent, and 25 percent right where they are and this is how much you have to earn to qualify for those.
So you see 10 percent? That's people who earn less than $17,000 and change. Fifteen percent tax bracket, those are people who earn less than $70,000, married, filing jointly. Twenty-five percent, that's people under $142,700, and so on.
So, where the president wants to allow them to expire, the 33- percent tax bracket, your taxes would jump up to 36 percent. That's an extra $17,000 or $18,000 in taxes for people who make $388,000 and the GOP will say that is a lot of small business owners.
Thirty-five percent, people who make over $388,000, their tax rate would jump up to 39 percent, those pre-Bush tax cuts levels. That means for the very rich, and you can try to define, just as you were talking about with Dana, what is the very rich, their taxes would be going up.
BANFIELD: Well, I think that one of the things that's key in this conversation, because that's a lot of numbers and a lot of math ...
ROMANS: Yes.
BANFIELD: The president wants to go out - I think it's Iowa tomorrow to tout a couple making $82,000 together per year. If he gets what he wants, if the president gets what he is calling for today, it would be a savings of $2,000 a year for them.
ROMANS: Well, their taxes would stay the same because they're already getting that $2,000 savings, right?
BANFIELD: It would be the savings of not having to pay the additional $2,000.
ROMANS: The risk is they would have to have another $2,000 tax bill on top of that going back to those pre-Bush tax cuts.
Now, some have actually called, budget hawks, people who study the budget, some of them, for a while, were calling these the Bush- Obama tax cuts for the rich because they were so mad at him for extending this the first time.
In 2010, the president said, I only want to extend tax cuts, the Bush tax cuts, for people who are in the middle class and then, in the end, remember, he had to extend them for everyone to get it done.
BANFIELD: A bigger package and a bigger deal.
ROMANS: With unemployment benefits and some other things as well. So, but this time, Robert Gibbs says he is 100 percent committed. It will be just the middle class, not people who make more than $250,000. BANFIELD: The Pelosi/Schumer compromise sounds fascinating whether they end up getting towards the million dollars or $250,000 ...
ROMANS: Well, they have Democrat constituents who are screaming at them, I'm sure.
BANFIELD: Sure, sure. All this math? Really fascinating.
ROMANS: It's your tax bill. It is your tax bill.
BANFIELD: And it does make a big difference because we are talking in the thousands for a lot of people. Hold that thought for a second, Christine Romans, if you will.
Just a reminder, as well, people, President Obama is scheduled to make those remarks about the tax cut proposal that he is putting forward. Scheduled to be 11:50 Eastern time. So, we are going to make sure we bring those to you.
Earlier this morning we told you they would be in the Rose Garden. Apparently, inclement weather has forced that news conference, so to speak, inside to the East Room, so we have our live cameras shifting gears and moving inside, but you're certainly going to get the news no matter what time it happens and we are back right after this.
(COMMERCIAL BREAK)
BANFIELD: A mysterious illness in Cambodia is so deadly it's killing children at an extraordinary rate. Nearly all those infected of it die within a day or two of being hospitalized. At least 64 children have died in just the past three months.
(BEGIN VIDEO CLIP)
DR. TA VANTHA, PEDIATRICIAN: (INAUDIBLE).
(END VIDEO CLIP)
BANFIELD: Right now, health experts and doctors have been scrambling to figure out the cause of this disease, the possible treatments for it. Our chief medical correspondent, Dr. Sanjay Gupta, has flown to Phnom Penh in Cambodia. He joins me now live.
Sanjay, over the weekend, it seems as though there was a bit of a breakthrough, just in terms of identifying what the problem is, but how helpful has that been?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you, Ashleigh, the way that it works - you know, obviously, in a lot of medical centers, you want to try to exclude a lot of things first.
And in this case, there's different pathogens, viruses, such as H5N1, which causes avian flu; the nipah virus; SARS. That's what they have been testing for the past several weeks. What they found over the weekend was something known as something known as enterovirus-71.
And out of the 66 patients you mentioned, 64 of whom died, they tested this in 24 patients. That's the number of samples they still had and they found this enterovirus in 15, so it's by no means conclusive, but it's the biggest break that they've had.
And I should add, as well, one of the points you made, Ashleigh, that patients died within 24 hours, typically, of admission. They would often come in with mild fever, but then quickly develop encephalitis, which is inflammation of the brain, and what was strange about this and still has doctors sort of wondering, is that their lungs would then be profoundly affected after that, to the point where doctors described to me that their lungs were completely destroyed.
Not all of that fits with enterovirus-71, so they found this enterovirus, but there's still a lot of questions that remain to be answered.
BANFIELD: So I have two questions for you and, because we are on a delay, I'm just going to give you both - I'm going to give you both of the questions at once. Can you tell me about how contagious, if it's contagious at all, this is? And also how difficult is it to separate this disease from anything else that a child or an adult may come in with like dengue fever?
GUPTA: With regard to how contagious it is, this is again one of the puzzles here. Because you'd expect enterovirus-71 to be contagious. If children live in the same household, you would expect more than one child to get it. That isn't happening here.
And the doctors and the folks from the World Health Organization aren't exactly sure why. It is good news, but it still remains a puzzle.
As far as separating it out, that is a challenging thing, Ashleigh. You know, you look at some of the video - I don't know if you can see it - of the hospitals. The main hospital here in Phnom Penh, which is so busy, they see some 4,000, 5,000 patients a week, many of them with things like dengue fever and other tropical diseases, it takes some time to try and separate this out.
In this case, they simply had to exclude, as I mentioned earlier, everything else and then sort of settle in on these mystery illnesses, trying to better define them.
BANFIELD: All right, Dr. Sanjay Gupta live for us in Phnom Penh, Cambodia. Thanks so much.
Also, I want to give a reminder to our viewers that we are keeping an eye on the clock for you, keeping an eye on the White House. The president is scheduled to make live remarks on tax cuts and extending them, but only for certain people. That is supposed to get underway at 11:50 Eastern time, about 30 minutes from now.
So, as we watch the cameras and the live mikes for you, we will bring you his statements live. (COMMERCIAL BREAK)
BANFIELD: Are you having trouble this morning checking out CNN.com or any other dot-com, for that matter? It's not us. It's you. In fact, it's really you.
You may be one of the many hundreds of thousands of people who've lost their Internet access. And it's true. It wasn't a joke when someone sent you information saying you've got to do something about this. You had to do something about it.
Because cybercriminals got to you and the FBI tried to protect you, but now they're not going to protect you any longer. Which means Internet blackout.
CNN's Dan Simon joins me now live from San Francisco. I gave the quick version of what this means and why somebody can't get online today, but maybe you could go a little deeper into it and explain to them what they can do to get back online.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT: Well, first of all, Ashleigh, I think this has been a pretty successful public awareness campaign. We haven't gotten any reports yet that this has really been a significant issue for a large number of people.
There was the potential that a few hundred thousand people around the globe could not be getting online today, but so far, the facts have not borne that out yet. But let me just kind of give you a sense in terms of how we got here.
This was a sophisticated online advertising scam that began five years ago, 2007. A half dozen people from Europe launched this and they were able to infect millions of people around the globe.
Malicious software got on machines and the software forced unsuspecting users to fraudulent websites, fraudulent advertising. And the FBI were pretty aggressive and they broke this thing up.
But the problem was is they discovered that, if they just shut down these Internet servers, people would lose their Internet access categorically, so they replaced these bad servers, if you will, and put some good, clean servers up. It was sort of a temporary fix, a Band-Aid, if you will, but now that Band-Aid has been stripped off.
So, if you didn't get it fixed, you lost your Internet.
BANFIELD: And it's painful when the Band-Aid comes off and it's going to be more painful to try to fix this than it would have been before midnight last night to just go and check on it and like do the, you know, do the prophylactic version of getting back online.
All right, Dan Simon, thanks so much. Do appreciate it.
Also, just want to break down the numbers for you because what we are talking about is a fairly small set of people. It seems big, but it's not, 304,000 computers worldwide and that is out of 1.6 billion around the world.
It just doesn't lessen the importance for the thousands of people who are actually blocked out today and, of course, the worry that this could happen again as well.
Back in a moment.
(COMMERCIAL BREAK)
BANFIELD: Just a reminder, we're watching the clock, the president is scheduled to make remarks about tax cuts at 11:50 eastern time, about 20 minutes from now. We are going to keep our live eye on the White House and the East Room where the comments are scheduled to be made. We'll bring them live as they happen.
The tax cuts that he will be talking about and that we are now talking about are the Bush-era tax cuts, extended for two years by President Obama. But now they are set to expire. The president wants to keep them around, maybe for another year, but not for everybody, just for some.
Here's what Robert Gibbs, Obama's former spokesperson and current campaign adviser, said on CNN's "State of the Union."
(BEGIN VIDEO CLIP)
CANDY CROWLEY, HOST, STATE OF THE UNION: So the president is totally committed to getting rid of the tax cut for those making 250,000 and above?
ROBERT GIBBS, OBAMA ADVISOR: Let's make some progress on our spending by doing away with tax cuts for people that, quite frankly, don't need them, taxes that haven't worked, and have them pay their fair share.
CROWLEY: So is that a yes or a no, the president is completely committed to this won't. He allowed it to happen?
GIBBS: He is 100 percent committed to it.
(END VIDEO CLIP)
BANFIELD: To our chief White House correspondent now, Jessica Yellin.
The president seems to have made up his mind on this, but two years ago, he certainly seemed to have waivered. No chance now, right? Seems to be what Robert Gibbs was saying?
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: No chance now. I would say he has always been clear that this is his position, Ashleigh, but negotiated a deal. That's what you do sometimes in politics. You compromise and cut a deal. He allowed them to be extended before. He says -- for the very wealthy as well as for everyone else. This time he says no way. This is about framing a campaign election fight. And for the president, the White House, it's about making the case that the president's fighting for middle class Americans, as they would like to frame it. The Republicans in the House and, no doubt, Romney, will argue that is just silly framing of the issue and that they are really trying to jump start the economy, take care of everybody, and that the president and White House aren't giving a full picture of the Republican position.
BANFIELD: Jessica, a lot of costs involved with this and then there are a lot of revenues involved with this, depending which way the decision is made, whether there is a $250,000 ceiling, whether there's a million dollar ceiling or whether the tax cuts get wiped out completely or whether they are extended for everyone. I know it's pretty tricky but is there a way for you to sort of give us a "Reader's Digest" version of what it means he is?
YELLIN: Yes, so, the bottom line on this is the Bush-era tax cuts are set to expire at the very end of this year. Right now, there's a debate about how -- how -- for whom they should be extended, and how that will impact different categories of people. President Obama is going to argue today they should be extended only for individuals who make less than $200,000 or couples, families who make $250,000 or less. Republicans are going to say they should be extended for everybody because there's so many people who are really middle income earners who fall into those $250,000 category, and will be hit by the president's proposal.
The bottom line on all of it, Ashleigh, nothing is going to happen this year. This is campaign-era rhetoric so they can just frame a fight during the election because nobody expects anything to pass before the election. This will all take place after we have a new president elected in November, so this is all about campaign politics -- Ashleigh?
BANFIELD: Oh, boy, is it ever. The optics, the campaign slogans, the bumper stickers that can come out of this.
Jessica Yellin, thank you so much.
As we have all been mentioning, there is prebuttal. The Romney campaign is already going on the defensive, even before President Obama gets a chance to make his remarks in about -- again, looking at the clock -- 25, 26 minutes from now. Mitt Romney's spokesperson releasing a statement today saying this, quote, "President Obama's response to even more bad economic news is a massive tax increase. It just proves again that the president doesn't have a clue how to get America working again and help the middle class." The statement continues, "The president's latest bad idea is to raise taxes on families, job creators and small businesses. Unlike President Obama, Governor Romney understands that the last thing we need to do in this economy is raise taxes on anyone," end quote. Again, the Romney campaign spokesperson releasing that in advance of the president making his proposal for an extension of the Bush-era tax cuts but only for those up to $250,000 a year. So if your salary goes up to $250,000 a year, you will be OK under this plan. Anything over, you don't get that tax holiday anymore if the president gets his way. The president is scheduled to make his remarks about tax cuts shortly. We're doing the countdown clock for you, in our heads anyway. We'll certainly bring you those comments live as we continue to watch the clock.
(COMMERCIAL BREAK)
BANFIELD: So most of us are getting break from the record- breaking heat wave but the searing temperatures killed hundreds across the country, including a baby girl in Indiana. She died this weekend after she was left in a car for an extended period of time. It is unclear how hot it was in that car but temperatures in that area have reached 103 degrees outside. The infant's father was arrested. He has been charged with neglect.
The weather has been relentless in virginal. The state got slammed yet again, but this time, it was extreme winds coming through yesterday, only complicating you the recovery efforts and causing even more damage.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I can't even tell you what we are feeling. I drove up and said it has got to be a dream, this just can't: not be real. We just still are in a state of shock.
(END VIDEO CLIP)
BANFIELD: More than 160,000 customers in nine different states, including Virginia, and also Washington, D.C., still without power today. You can count the number of days you're off the chart in terms of a week. The region could certainly get battered, too, by more severe storms this week. The weather story is not a good story.
Meteorologist Chad Myers is standing by in the Severe Weather Center.
I still can't believe, Chad, you and I are talking about power outages, those poor people, told me they might be getting their power back on, on Saturday, and that was going to be difficult, and yet here we are Monday.
CHAD MYERS, AMS METEOROLOGIST: It's now down to those wires that will only get two or three more people back up on the grid. The power crews did this triage, and they do this all the time. They think, OK what if we put this line up, how many people are we going to get back online. If it is 10,000, that is a priority line. If it's two, it is a lowest priority line. That is what we are doing now, getting one, two and three up at a time. One, two, three, 160,000, that is maybe 60,000 more wires to get back up. The problem is not just wires but broke power poles. They have to re-dig a power pole, put it up.
The highs from last week are gone though. If you haven't been outside in New York City today, today a good day to get out there. might need a sweat. Temperatures in the 60s and 70s, middle 80s. The heat has built back to the west, where the heat is going to be for the rest of the weekend now, in fact for about the next 10 days. Going to be 115 degrees in Vegas today. 111 in Phoenix. Probably 127 in Death Valley.
Here are the highs from yesterday, breaking all-time records in places, Raleigh-Durham, 105; D.C., 102. Today, you will be 20 degrees cooler. How about that? That's the cold front that came through here. But it's also the focus for where those storms were yesterday in Virginia. And there will be more storms today that could make more wind to bring more power lines back down with storms about 4:00, 5:00 today.
BANFIELD: So if I understand you correctly, we have a heat wave that is abating, it is bringing cooler weather but problematic weather, more storms that could double hammer these people.
MYERS: Yes.
BANFIELD: All the while out on the west coast, they are about to get another heat wave?
MYERS: Another one. Yes. And it's -- I know it is a dry heat but 115 is still darn hot.
BANFIELD: Yes, well, especially since they just seemed get a handled on all the fire fighting out there. Hopefully that won't cause problems for them.
All right, Chad Myers, looks like you're not getting days off.
MYERS: Not any time soon.
(LAUGHTER)
BANFIELD: Thank you, my friend. I appreciate it.
It's 41 minutes past 11:00 on the east coast, which means the live eye is on and that room is full. It's the East Wing of the White House. This was supposed to happen in the Rose Garden but, because of inclement weather, it has been moved inside. that microphone is waiting for the president himself.
Coming up, Wolf Blitzer is going to be here to anchor our network coverage of President Obama's remarks on tax cuts, his plan for who should get relief in terms of keeping your tax treats.
Plus, we're going to have live team coverage on what the president is expected to say, how it is going to impact you, and the reverberations for the campaign and Capitol Hill as well.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN "Breaking News."
WOLF BLITZER, HOST, THE SITUATION ROOM: I'm Wolf Blitzer in Washington. We are awaiting the president of the United States. He is about to walk into the East Room of the White House to deliver a major statement on taxes, whether or not to keep taxes where they are right now or to let the entire tax structure lapse by the end of this year. If Congress does nothing, the president does nothing, everyone's taxes are going to go up slightly, going back to the tax rates that occurred during the Clinton administration. If Congress passes legislation, that could change. The president about to announce that he wants the tax rates to remain the same for everyone earning under $250,000 a year, if they are filing as a family, $200,000 a year if they are filing as a single tax returner. The Republicans say that is not acceptable at all so there will be a fight.
We have a team of correspondents standing by to assess what's going on, our White House correspondent, Jessica Yellin, is with us; Dana Bash, our congressional correspondent; Christine Romans is with us as well, Gloria Borger is back from her little vacation and is joining us as well.
Let me start with you, Jessica.
Walk us through why the president has decided today or all days to go into to the East Room -- originally it was going to be in the Rose Garden but the weather is not that great -- and make this announcement?
YELLIN: Wolf, everyone is back from vacation right now and the campaign, in a sense, officially begins. For the president, this is an opportunity to use the bully pulpit and take the fight to the Republicans and try to define the campaign on his terms on the first day of the summer fight.
I can tell you this. the remarks, my guidance, is that he will speak for seven to eight minutes, flanked by working families and other people who would be affected by the kind of tax cut that he is advocating here. And the idea for Democrats, no doubt, is to argue that with the kind of tax cut he is advocating, it, in a sense, would give middle class families the kind of clarity they need to start spending again, to boost consumer confidence and, in a sense, politically, to change the subject, so that everyone is talking about this fight with -- between Democrats and Republicans over who should get a big tax cut instead of talking about, you know, the jobs picture and other topics that are not quite as flattering for the White House right now.
BLITZER: All right. Stand by
Dana Bash is up on Capitol Hill.
Dana, the president certainly doesn't have the votes in the House of Representatives where there's a lopsided Republican majority in the House. I'm not even sure he has the votes in the Senate to pass legislation, what he wants to do, given the fact there are a half a dozen or so Democratic Senators up for re-election, who aren't inclined to vote for raising taxes on anyone.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's exactly right. Still, I talked to a senior Democratic Senate source who said that they do plan to have a vote to match what the president is saying today, at some point, because, unlike the House and the Senate, Democrats still run it and they do have that ability. But you are exactly right.
The very first question that I asked to the strategists who are trying to get Democrats elected, and also to the Republicans who are trying to beat those Democrats, is how are you going to use this, and they said no matter whether there's a vote or not, they already are going to take the president's speech, the minute he gives it, hand it to Republican candidates out there for the Senate and use it to hammer Democrats.
As you said, certainly everybody agrees that the tax cuts for those making $250,000 and less should be extended. The big question is whether those making the higher amount should be extended. And Republicans have already, in the past, and certainly in the future, if there is a vote, use that vote to say, a-ha, these Democrats voted against it, effectively voted to raise people's taxes. And that is, I think history shows, not necessarily the best political move for a Democrat, especially those in battleground states.
BLITZER: I would like to you stand by as well, Dana.
Christine Romans, our business correspondent, is standing by, watching all of this.
What this means, Christine, is if you were making more -- if the president were to get his way, if you're making more than $200,000 a year as an individual, $250,000 filing jointly or as a family, if President Obama gets his way, your taxes will go up from 33 percent, which is the current tax rate, to 36 percent rate for some, but for most of those individuals, from 35 percent, which is the current federal tax rate, up to 39.6 percent, which was the tax rate, of course, during the Clinton administration. So it will be -- for very rich people, it will be a significant increase in taxes.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And it is going to show, like, if you make $388,000 a year or so on paper, just the straight change in the tax rate is going to be another $17,000, $18,000 in taxes. But with everything in taxes, Wolf, there's nothing simple about it, and there are a lot of other things that are packaged up into tax breaks and tax goodies, the AMT, alternative minimum tax. There's corporate tax rate, different deductions in tax credits for having a kid in college, so a lot of different things that go up into the formula for the middle-class families. And what the president and the others like to say, Democrats like to say, if you don't keep it in place for people, couples making less $250,000 or less, if you don't keep them in place, they are going to see $15,000 tax increase next year. And this is something that you won't like to have in a fragile economy.
And it is also raises the big question of what is rich in America. Is it $250,000 or something higher, like Nancy Pelosi says, some people say. Maybe $1 million is a better place in some of the high-tax states, to talk about raising the taxes on the wealthy. And Republicans talk about what it means for the small business owners. But what it means for everyone, Wolf, if we don't handle the temporary taxes, taxes for almost everyone will go up if Congress does not do something at a time when the economic recovery is fragile. And we are not seeing the economy produce jobs.
Tax breaks are very difficult to take back. They really are, especially when you give tax breaks to the middle-class who feel it. And they will feel it in their paychecks more than anybody else. So it is very hard to give somebody a tax goody and bring it back, and that is where we stand right now.
BLITZER: OK.
We will bring in Gloria Borger in a moment. I want to take a quick break as we await the president, who is about to go into the East Room of the White House. He has a lot of invited guests there. He will make a pitch to continue the current tax rates for middle class families, not so much for the wealthy Americans.
Our coverage continues in a moment.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN "Breaking News."
BLITZER: We moments away from the president of the United States walking into the East Room to make a major announcement saying he wants to keep the tax rates for families, individuals making less than $200,000 a year, families making less than 250,000 a year, exactly where they are, and he wants the tax rates to go up for people making more than that. Tax rates will go up for everyone at the end of the year early next year unless Congress passes new legislation.
As we await the president, let's bring in the chief political analyst, Gloria Borger.
Gloria, as I said to Dana, there is no guarantee that the president has the votes to get done what he wants, and especially not in the House of representatives. We have looked at some of the Democrats, who are up for re-election, a few moderate Democrats, Joe Manchin of West Virginia and Bill Nelson of Nebraska and Bill Nelson, Florida, and Claire McCaskill of Missouri and Jon Tester of Montana and Jim Webb of Virginia, he's retiring. They have in the past indicated they may not go along with the president on his new initiative today, which is really not a new initiative. He has been consistent saying this is what he wants to do for a long time.
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, this is about framing the presidential debate. This is about Barack Obama differentiating himself from Mitt Romney. It is a reprieve of the fairness argument that we have been hearing over and over and over again. This is a time in the presidential campaign when people's perceptions and views start to harden, Wolf. So what the president just had last week was some very bad employment news, and there is a worry in the campaign that those kinds of bad numbers are going to have people's views hardening about the economy staying in a ditch or going into the ditch, so what they are trying to do now is so to switch the subject to say, I'm the president who believes in fairness and I want to repeal the tax cuts for the wealthy and extend them for people earning under $250,000 a year, as opposed to Mitt Romney, who cares more about the wealthy, is wealthy himself, and, you know, hitting him on the record at Bain Capital. So you really see the battle lines being drawn in this campaign. And this is really a part of it. And by the way, Wolf, this is also the way that the president can use the bully pulpit. When you look at this event today, look at where it is, look at the people he has with him to illustrate his proposal. And whether it passes in Congress or not, which it won't, almost is beside the point at this. This is about campaign.
BLITZER: And let me bring back Jessica Yellin.
Jessica, who are the folks that the president invited into the East Room today to watch the speech he is about to deliver?
YELLIN: Well, Wolf, I am told middle-class workers who would benefit from the tax cut that he is proposing. And again, to underscore what Gloria is saying, the point that the White House is trying to illustrate is that he is pushing for a tax cut that would benefit most Americans. And then the case that the White House will plan to make is this would pass and would affect most Americans, which is the White House's point, if only the Republicans would stop insisting that the very rich also get this tax cut. And the only reason that the one-year extension is not going through for everybody is because the House Republicans are insisting the very rich have to get the tax cut, too. That is how the president will ultimately hope this argument plays out.
We know it is going nowhere in the Senate or the House, but it is just campaign-era politics. The bottom line is that it is a rhetorical battle that the White House thinks is very beneficial to them. They think it is really one they can win -- Wolf?
BLITZER: Because -- let me bring in Dana Bash in.
A lot of Republicans, including Mitch McConnell, the Republican leader in the Senate, and others say, you know what, extend the current Bush tax rates for another year right now, Dana, they say. and in the course of the year, let's everyone get together and engage in comprehensive tax reform for the country and get rid of the tax breaks for the big companies that don't necessarily need them and work for the tax reform, if you will. That is a pretty strong argument that these Republicans, Dana, are making.
BASH: That is exactly right. Mitch McConnell made that very point to Candy Crowley on "State of the Union" yesterday. and that is the framework of the legislation of the Republicans that they will push later this month, a full on extension of all of the Bush-era tax breaks but just for one year, with the argument they can use that year to frame some comprehensive tax reform. And the question is, or maybe the "but" I should put in here is that we have heard the promises from both sides of the aisle before. We have heard promises that they will focus on the commission that we saw, the Bowles/Simpson Commission, and that would produce something. Didn't happen. We saw the promise of the so-called Gang of Six in the Senate talking about tax reform, and that didn't produce anything. I mean, let's say it like it is, politics got in the way. And whether or not it can actually happen after, directly after an election when you are a little bit further away from the election, you know, perhaps it is possible, but just seeing the way that things have moved so fast and everything, no matter where you are on the calendar, is so intensely partisan and political I think there's reason for doubt that would happen, and that meaning the compromise and the discussion about the tax reform in that one-year framework.
BLITZER: Yes, it is going to be eyeball to eyeball, and not only for the next four months between now and the election, but it is eyeball to eyeball in the two months after the election, the so-called lame duck session of Congress. Because if Congress does nothing, everyone's taxes, the tax rates will go up for everyone, because that's the law of the land. So there's going to be intense negotiation. My own sense that probably nothing serious will be done between now and November 6th. But during that lame duck session, as they face the fiscal cliff, action will be taken.
We are approaching the top of the hour. Let me set the scene for viewers who are just joining us.
