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Obama Makes Remarks on Tax Breaks; Afghan Execution Sparks Outrage; New Approach to Ending Syria Crisis; Mystery Illness Kills 64 Children; Fighting The Drug War Next Door

Aired July 09, 2012 - 12:00   ET

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

WOLF BLITZER, CNN ANCHOR: He's going to make the case that he wants to see tax rates remain the same for middle class families; for individuals making $200,000 and less, for families making $250,000 a year or less, he wants the taxes to go up -- back to the Clinton administration rates for everyone else making more than that.

The Republicans are arguing they're going to reject any tax increases right now whatsoever. We've got all of our reporters standing by. Jessica Yellin, Dana Bash, Christine Romans, Gloria Borger.

Christine, let me bring you in to this conversation because a lot of the economists say that the economic recovery is still fragile and it would be a mistake to raise taxes during a period of economic weakness right now, because it could further undermine the economic recovery and that is not just coming from Republican economists, but it's coming from independent and Democratic economists as well

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes, and look, you know, this is why you are supposed to handle things like this when the times are better. You're supposed to make sure that you're running the kinds of books and the kinds of budgets that are sustainable.

You know, we've got this not only the tax part of this equation, but you have talked about the fiscal cliff, these huge spending cuts that are triggered as well. The two things at the same time that the Congressional Budget Office says will push the economy into another recession at the beginning of next year. So we know that, you know, we know that -- you can pick the metaphor and the Mac truck, fiscal cliff, whatever you want to call it, we've got some serious things that Congress has got to address here.

The economy is growing too slowly really to be able to handle the families who are spending the money, you know, based on what they are getting out of the paychecks to be able to handle a tax increase for that.

And what would that tax increase look like? If you had a married, joint -- filing jointly couple making maybe $80,000 a year, you know, their tax rate would go up, and they would pay, you know, another $1,300 or $1,500 depending on their deductions and stuff a year. That's real money out of middle class households quite frankly.

So, this is why it's so incredibly important right now, especially after the jobs report from Friday and some cynically would say the president is trying to turn the page only the bad jobs report and focus on something that maybe he can try to control, which is what -- you know, what your tax rate is, because the jobs rate just has not been, not been robust at all, and this recovery has been too slow for anyone's liking, but the combination of the tax cuts, Wolf, and that -- or tax increases and the big spending cuts at the same time really is something that's keeping economists and people in the market up at night about.

BLITZER: And, Gloria Borger, the Republicans are already throwing the president's own words back at him, and the last time this came up back in 2009 when the president agreed to extend the Bush tax rates for everyone -- rich, poor, middle-class, whatever -- the president, himself, acknowledged that he did not want to raise taxes, because at the time he said -- and I'll read it directly.

This is the president of the United States in 2009: "The last thing you want to do is to raise the taxes in the middle of a recession, because that would just suck up, take more demand out of the economy and put businesses in a further hole."

Now, the country is not in a recession right now, but it is not great recovery either. Those words that the president said back in 2009 are already being thrown back at him and the folks saying you don't want the raise the taxes on anyone right now, because it could undermine the economic recovery.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, and you could make the argument that the growth rate now is less than it was in 2009-2010, and so why would the president be doing this now? I mean, the Republicans obviously pick up the argument which says that if you do what the president wants to do, that's a tax increase on small businesses.

And you see what's happening here, Wolf. I mean, the House is going to vote to repeal the president's health care reform bill. That's not going the go anywhere, but they now call that a large tax increase -- thanks to the Supreme Court decision. They are now talking about this as a tax increase, and so they are going to continue to call the president the largest tax hiker, you know, in history, and it's their hyperbole.

And so, the arguments are just being played out here. Sometimes I think that you ought to just send Congress home when you get close to the election, because nothing is ever going to be done except this kind of rhetoric. That's what we're -- that's what we are seeing play out today. It's just more framing of the debate, and the Republicans -- as Dana Bash has been saying -- this morning, the Republicans are welcoming this, because it helps them define their argument for Mitt Romney and the Democrats are saying, OK, we are the ones who want to be fair and care more about the middle-class.

And by the way, the polling, I should add, is with the president on this, that almost half of the public says, you know, we want to keep the tax cuts for those earning under $250,000, only a quarter of the public says to keep it for the wealthy.

BLITZER: Good point.

You know, Jessica Yellin, I don't know if the White House is reacting already to what the president, himself, said back in 2009 saying, during an economic recovery -- in his words -- in the middle of a recession, it's not a good time to raise taxes. That's why he extended the Bush tax rates two years ago. But at that time, he said, you know what? He is not going to do it anymore and doubling down on the strategy.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: No, they are not in the habit of preempting his own comments generally, Wolf, as you might guess. But I -- you know, they point out that they are -- have been consistent on the logic that he believes in not extending the tax cuts for the very wealthiest. In fact, another Republican office at the same time also sent out a series of times that the president has also argued that he does not believe in extending the tax cuts for the very wealthiest.

So, he will no doubt make the case that this is the best position for giving security and confidence to middle-class Americans, knowing that they will have this tax cut for another year, will enable them to go out to spend more and know that they have the certainty that they'll have this money in their pocket, and so, in a way stimulate spending. If he doesn't make that case, you could point to some economists who have. And so, that could be one argument that we could hear from the Democrats in the future.

And the larger case they will make is that this is exactly the kind of, you know, message that he has been driving home for the last few months on the campaign trail that he's most concerned about the middle class who is being squeezed by an economy in their kind of framing that an economy that helps the people who are already doing well and is not helping the folks in the middle, and he is concerned most about the folks in the middle.

And so, this is a way to reinforce that message, and draw contrast with the Republicans who again are going to insist on extending the tax cuts for everybody, and then that means that they will, and the Democrats will say really for the very wealthy -- the very wealthy are the reason that everybody is not getting the tax cut.

The one point I'd add, Wolf, is that what both sides agree on is that that they want a one-year overall tax extension for some portion of the population and they do overall broad tax reform. That is a huge leap forward. There have been many years in which no one has agreed that this nation is ready to take on the tax code. So, whichever man is elected president next year, we will see Congress most likely try to delve into our sticky complicated tax code and really try to get at these loopholes and the subsidies and try to get some real reform next year, Wolf.

BLITZER: All right. I guess that some of the president's guests are walking in right now. We can see them walking in on those little risers over there -- they're going to be standing behind the president. The president will tell us who these folks are, no doubt about that, and then the president will make his remarks.

These are middle-class families, and small business owners and others invited guests by the White House. The president will walk in shortly after they come to their position positions there. He will be introduced, and he will make his remarks.

One of the things that we will be looking forward to assessing maybe in our discussion after we hear from the president is if Congress goes ahead.

ANNOUNCER: Ladies and gentlemen, the president of the United States.

BLITZER: Well, here is the president. Let's just listen to the president right now as he walks in and delivers his prepared remarks. He will make a speech, and this is not a news conference. He won't be answering the reporters' questions.

(BEGIN LIVE FEED)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Thank you. Thank you. Thank you very much. Thank you. Everybody have a seat. Have a seat.

Well, good afternoon, everybody. AUDIENCE: Good afternoon.

OBAMA: I'm glad things have cooled off a little bit. I know folks were hot.

(LAUGHTER)

OBAMA: You know, we're here today to talk about taxes, something that everybody obviously cares deeply about. And I've often said that our biggest challenge right now isn't just to reclaim all the jobs that we lost to the recession. It's to reclaim the security that so many middle-class Americans have lost over the past decade.

Our core mission as an administration and as a country has to be, yes, putting people back to work, but also rebuilding an economy where that work pays off, an economy in which everybody can have the confidence that if you work hard you can get ahead.

Now, what's holding us back from meeting these challenges, it's not a lack of plans, it's not a lack of ideas. It is a stalemate in this town, in Washington, between two very different views about which direction we should go in as a country.

And nowhere is that stalemate more pronounced than on the issue of taxes.

OBAMA: Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.

I disagree. I think they're wrong.

I believe our prosperity has always come from an economy that's built on a strong and growing middle class, one that can afford to buy the products that our businesses sell; a middle class that can own homes and send their kids to college and save enough to retire on.

That's why I cut middle-class taxes every year that I've been president; by $3,600 for the typical middle-class family. Let me repeat. Since I've been in office, we've cut taxes for the typical middle-class family by $3,600.

(APPLAUSE)

OBAMA: I wanted to repeat that because sometimes there's a little misinformation out there...

(LAUGHTER)

OBAMA: ... and folks get confused about it.

Moreover, we've tried it their way. It didn't work.

At the beginning of the last decade, Congress passed trillions of dollars in tax cuts that benefited the wealthiest Americans more than anybody else. And we were told that it would lead to more jobs and higher incomes for everybody and that prosperity would start at the top, but then trickle down.

And what happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth in half a century.

OBAMA: Instead of widespread prosperity, the typical family saw its income fall.

And in just a few years we went from record surpluses under Bill Clinton, to record deficits that we are now still struggling to pay off today.

So we don't need more top-down economics, we've tried that theory. We've seen what happens. We can't afford to go back to it.

We need policies that grow and strengthen the middle class, policies that help create jobs, that make education and training more affordable, that encourage businesses to start up and create jobs right here in the United States.

So, that's why I believe it's time to let the tax cuts for the wealthiest Americans, folks like myself, to expire.

That -- the...

(APPLAUSE) OBAMA: And by the way, I might feel differently -- because it's not like I like to pay taxes.

(LAUGHTER)

OBAMA: I might feel differently if we were still in surplus. But we've got these huge deficits. And everybodies (sic) agrees that we need to do something about these deficits and these debts. So the money we're spending on these tax cuts for the wealthy is a major driver of our deficit, a major contributor to our deficit, costing us a trillion dollars over the next decade.

By the way, these tax cuts for the wealthiest Americans are also the tax cuts that are least likely to promote growth. So we can't afford to keep that up; not right now.

OBAMA: So I'm not proposing anything radical here. I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under Bill Clinton; back when our economy created nearly 23 million new jobs, the biggest budget surplus in history, and plenty of millionaires to boot.

And this is not just my opinion. The American people are with me on this. Poll after poll shows that's the case.

And there are plenty of patriotic and very successful, very wealthy Americans who also agree, because they know that by making that kind of contribution they're making the country as a whole stronger.

At the same time, most people agree that we should not raise taxes on middle-class families or small businesses, not when so many folks are just trying to get by, not when so many folks are still digging themselves out of the hole that was created by this great recession that we had and at a time when the recovery is still fragile.

That's why I'm calling on Congress to extend the tax cuts for the 98 percent of Americans who make less than $250,000 for another year.

(APPLAUSE)

OBAMA: If Congress doesn't do this, millions of American families -- including these good-looking people behind me...

(LAUGHTER)

OBAMA: ... could see their taxes go up by $2,200 starting on January 1st of next year. That'd be a big blow to working families and it would be a drag on the entire economy.

Now, we can already anticipate -- we know what those who are opposed to letting the high-end tax cuts expire will say. They'll say that we can't tax job creators, and they'll try to explain how this would be bad for small businesses.

Let me tell you, the folks who create most new jobs in America are America's small-business owners, and I've cut taxes for small- business owners 18 times since I've been in office.

(APPLAUSE)

OBAMA: I've also asked Congress repeatedly to pass new tax cuts for entrepreneurs who hire new workers and raise their workers' wages.

But here's the thing that you have to remember: The proposal I make today would extend these tax cuts for 97 percent of all small- business owners in America. In other words, 97 percent of small businesses fall under the $250,000 threshold.

(APPLAUSE)

OBAMA: So -- so, this isn't about taxing job creators. This is about helping job creators. I want to give them relief. I want to give those 97 percent a sense of permanence.

I believe we should be able to come together and get this done.

While I disagree on extending tax cuts for the wealthy because we just can't afford them, I recognize that not everybody agrees with me on this. On the other hand, we all say we agree that we should extend the tax cuts for 98 percent of the American people. Everybody says that. The Republicans say they don't want to raise taxes on the middle class. I don't want to raise taxes on the middle class.

So we should all agree to extend the tax cuts for the middle class. Let's agree to do what we agree on, right?

(APPLAUSE)

OBAMA: That's what compromise is all about.

Let's not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy.

We can have that debate.

(APPLAUSE)

OBAMA: We can have that debate, but let's not hold up working on the thing that we already agree on.

In many ways, the fate of the tax cut for the wealthiest Americans will be decided by the outcome of the next election. My opponent will fight to keep them in place. I will fight to end them.

But that argument shouldn't threaten you. It shouldn't threaten the 98 percent of Americans who just want to know that their taxes won't go up next year.

Middle-class families and small-business owners, they deserve that guarantee. They deserve that certainty. It will be good for the economy, and it will be good for you.

And we should give you that certainty now. We should do it now. It will be good for you. It will be good for the economy as a whole.

(APPLAUSE)

OBAMA: So, my message to Congress is this: Pass a bill extending the tax cuts for the middle class; I will sign it tomorrow. Pass it next week; I'll sign it next week. Pass it next -- next -- you get the idea.

(LAUGHTER)

OBAMA: As soon as that gets done, we can continue to have a debate about whether it's a good idea to also extend the tax cuts for the wealthiest Americans. I'll have one position, the other side'll have another, and we'll have that debate.

And the American people can listen to that debate.

And then next year, once the election's over, things have calmed down a little bit, you know, based on what the American people have said and how they've spoken during that election, we'll be in a good position to decide how to reform our entire tax code in -- in a simple way that lowers rates and helps our economy grow and brings down our deficit, 'cause that's something that we're going to have to do for the long term.

But right now our top priority has to be giving middle-class families and small businesses the security they deserve.

You're the ones who are driving this recovery forward.

(APPLAUSE)

OBAMA: You're the ones who are driving this recovery forward, and I think it's time to widen the circle of opportunity and help more Americans who work hard to get ahead. It's time that we learn the lessons of our past and lay the foundation for a better future. That's what I'm focused on every day, and I hope that Congress will join me in doing the right thing.

So, thank you very much all for being here. Thank you.

(APPLAUSE) (END LIVE FEED)

BLITZER: So there he is the president of the United States wrapping up, what, about 12, 13-minute speech of why he wants to extend the Bush era tax cuts for another year for those families making $250,000 a year or less and individuals making $200,000 a year or less, and saying that he doesn't want to extend the Bush tax cuts for folks making more than that, arguing they don't really need those continued tax rates.

If nothing is done, everyone's taxes will go up at the end of this year. That's when the Bush era tax rates expire. So, this is a sensitive issue right now.

By the way, even before the president spoke, the Romney campaign issued a statement. Let me put it up on the screen and I read it to you. This is from Andrea Saul, Romney campaign spokesperson:

"President Obama's response to even more economic bad 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 president's latest bad idea is to raise taxes on families, job creators and small businesses, almost half a million fewer workers are working today than the day Barack Obama took office. And we've just come through the worst job creation quarter in two years.

Unlike President Obama, Governor Romney understands that the last thing we need to do in this economy is raise taxes on anyone. He has a plan to permanently lower marginal rates, help middle-class Americans save and invest, and jumpstart economic growth and job creation."

That's statement released even before the president made his formal remarks.

Jessica Yellin is our chief White House correspondent. Christine Romans is our business correspondent.

Jessica, let me bring you in to this conversation first. What I didn't hear the president say is that if the Republicans in the House, and in the Senate, they manage to cobble together a majority in the Senate, pass legislation that would extend the Bush tax rates for everyone and not just the middle-class, but for everyone, I didn't hear him say he would veto that legislation.

I know it is a sensitive subject for the White House officials. But what are you hearing?

YELLIN: I would be fairly confident that he would, Wolf. I mean, this is something he's drawn a bright line on before, during the debt talks last summer, and he's made it clear this is a position that he absolutely rejects.

And this is where -- what he staked his re-election on, that he is fighting to protect the middle-class in essence against what he believes are the privileges that the very wealthy have gotten under our tax code, under our sort of the regulations, sort of the privileges that Wall Street has go gotten for some time.

And he's gone out of his way to say, you know, he's giving $3,600 tax cuts. I've broken it down, I think over three and a half years through on both health care reform, stimulus and payroll tax cuts. So, though he hasn't said it, I'm quite confident that the White House would not accept a full extension of the Bush era tax cut for everyone, Wolf.

BLITZER: And, Christine Romans, the Bush era tax cuts for the wealthiest would go up, and those currently paying 33 percent, their tax rate would be 36 percent, which is what it was in the Clinton administration. Those currently paying 35 percent which is the maximum tax rate, their tax rate would go up to 39.6 percent.

And the Democrats argue and the president argues, and the president's supporters argue, you know what? These people were doing just fine during the '90s, during the Clinton administration when they were paying those higher tax rates. They'll pay a little bit more. That's not necessarily going to undermine the economy.

ROMANS: Well, and they are talking about those golden days -- of the 1990s when you had a budget surplus, you had 23 million, 24 million jobs created and an economy that was firing on all cylinders. And quite frankly, there was work for anybody who wanted it almost.

I mean, there were companies who are doing everything they could to try to hire and train workers. There were companies who were investing a lot of money in training workers, because they had, with the labor market I can remember then, Wolf, talking about running out of workers, that we were going to have maybe less than 5 percent unemployment rate and what would that mean for America. And now, you know, just 20 years later, how times have changed.

But what they are saying is that, hey, look, we had higher tax rates then and as the president says plenty of millionaires at the time. He is also taking a stab from what you are hearing from Republican talking point sheet about how this would hurt small business owners, and that there are small business owners whose taxes, who make more than $250,000 a year, and their businesses are in those income taxes.

But it's only 3 percent of small businesses that -- it's only 3 percent of the small businesses, it's not very many of them, a big chunk of them. So, the president is saying, look, we are talking about lowering taxes and keeping them lower rates for 97 percent of the country and raising them for the top 3 percent. The White House says that's just fair.

BLITZER: And the Republicans come back and argue that yes, maybe 3 percent of the small businesses would be affected, but they are the ones, the biggest of the small businesses employing the most individuals in their small businesses. So it would have a disproportionately significant impact, Christine, on the small businesses who are the largest and the most productive small businesses, if you will.

ROMANS: And the White House would say, they were doing fine with higher tax rates in the 1990s. That is where you go back and forth.

Also, I would point out, too, that taxes are a part of a very big picture. It's not like there's a scientific formula about how to create a job, you know, that we know exactly -- there is no periodic table of the elements to figure out how to create jobs. In some cases, it's s much more nuanced and there's so many different levels -- there's also confidence. There is a confidence question here.

And one thing that's interesting about what you hear about the lack of confidence among the business owners, they are worried about -- they're worried about the economy. They're worried about the demand. They're worried about certainty -- certainty of the tax code, certainty of health care reform, all of these other things.

But there is not a lot of confidence right now and that's something -- that's something that's more difficult to figure out how to create out nothing.

BLITZER: Christine, thanks very much.

Jessica Yellin, thanks to you as well.

Stay with us, because we are about to go around the world with Suzanne Malveaux in the CNN NEWSROOM -- CNN NEWSROOM INTERNATIONAL. News from Afghanistan, Syria, Egypt, Austria -- only two minutes ago.

I'm Wolf Blitzer in Washington. I'll see you back 4:00 Eastern in "THE SITUATION ROOM."

(COMMERCIAL BREAK)

SUZANNE MALVEAUX, CNN ANCHOR: Welcome to the NEWSROOM INTERNATIONAL. I'm Suzanne Malveaux. We are taking you around the world this half hour.

Here is what's going on now:

A manhunt is under way in Afghanistan for Taliban militants who participated in the public execution of a young woman. It happened last month in Parwan province. This is just north of Kabul.

The video is just coming to light. I have to warn you, it is very disturbing to watch. We are showing you this, because it is an important story to see.

Now, the woman, she is sitting there on the ground covered head to toe in the burqa. Her executioner takes aim from close range and firing nine bullets into her.

(VIDEO CLIP PLAYS)

MALVEAUX: As the shots ring out, men can be heard cheering. We are not going the show you the moment of her death.

I want to bring in Mohammed Jamjoom. He joins us from Abu Dhabi.

Mohammed, tell us what the circumstances were around this? What kind of accusations were hurled at this woman? How did this happen?

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Well, Suzanne, Afghan officials are telling us that they believe that two members of the Taliban had been involved in some sort of a relationship with this woman. That they had been involved in a dispute over the woman, and that in order to save face, they decided that they would accuse the woman of adultery, and by doing that, they would then be able to be judge, jury, and executioner.

That within an hour of hurling that accusation against the woman that she was -- that she had been involved in adultery that they had executed her. Now, President Karzai of Afghanistan is promising there will be a manhunt and that the men involved, the Taliban members involved in this incident, this atrocious, horrific incident that they will be brought to justice.

But women's rights activists we've been speaking with are not really taking that as a reassurance. They've said in the past and they continue to say now that when there are these horrific episodes of brutality against women like the one that you are seeing in the video today, that oftentimes these men escape justice in Afghanistan -- Suzanne.

MALVEAUX: Mohammed, talk a little bit about this, because a year ago as in Afghanistan, and seems that at least things are improving for the women there. This -- when you look at this, it looks like the back to the days when the Taliban ruled from 2006-2011, when you had these kind of public executions, they were advertised in the radio and people packed the stands in the stadium just to watch some thing like this.

Is this going back to those days?

JAMJOOM: Well, it certainly seems that way, Suzanne. And even though there have been steps that have been made in Afghanistan for the advancement of women's rights there, and they are no longer under the rule of the Taliban, this really is reminiscent of those days.

It's important to remember that just this year Human Rights Watch released a report in which they said that in Afghanistan, nearly nine of 10 women suffer physical, sexual or psychological violence or forced marriage at least once in their lifetime. That's staggering to imagine when you think of the fact that the coalition forces have been in there for 11 years now, that billions of dollars have been poured into that country to try to improve the lot not just of Afghans, but of women in particular who suffer under such harsh conditions.

I'll give you one example. I was in Afghanistan about a month and a half ago. We did a story about the maternal mortality rates lowering in Afghanistan, that it was getting better for mothers there now, for pregnant women.

But let's expand on that. In fact, what happened was, in their most recent survey of Save the Children, Afghanistan went from being the worst place in the world to be a mother to being only the second worst place in the world to being a mother. And that's what you have to measure against in Afghanistan when you talk about improvements

So much money put in there and yet the women there facing such horrible circumstances and such horrible violence on a daily basis -- Suzanne.

MALVEAUX: We have heard from the NATO forces commander there in Afghanistan. We've also heard from the Secretary of the State Hillary Clinton, both of them condemning what is taking place there.

Mohammed, thank you. I really appreciate it.

New plan for peace in Syria. U.S. envoy Kofi Annan says that the Syria's president has now agreed on a new approach to ending the violence.

(COMMERCIAL BREAK)

MALVEAUX: To the crisis in Syria now.

There are at least 30 people were killed today while the U.N. and Arab League's special envoy Kofi Annan met with Syrian President Bashar al Assad. Well, after their meeting in Damascus, Annan said that he agreed to a new approach in peace.

Hala Gorani, she is joining us from Washington.

And, Hala, you know, we've heard this before from Annan, that there is going to be some sort of agreement and it falls apart. Do we any sense of more confidence this go around in what they discussed?

HALA GORANI, CNN INTERNATIONAL ANCHOR & CORRESPONDENT: Not among observers certainly who listened to Kofi Annan and the lobby of a Damascus hotel, saying, without giving much detail by the way, that Kofi Annan and Bashar al Assad, the president of Syria, had agreed on a new approach to solving the crisis and ending the violence.

The Syrian government once again is pledging again to abide by the Kofi Annan six-point peace plan. But since then that plan was announced, violence has only gotten worse and the sectarian conflict in that country has only spread, turning some parts of Syria into a full blown civil war.

So, is there confidence, Suzanne, out there? Not really. There was really no confidence after the Geneva Action Group meeting to which Iran was not invited at the request of the United States.

And interestingly now, Kofi Annan is in Tehran. He is going to be talking to the Iranian officials to try -- this is sort of a last throw of the dice, Suzanne, as far as Kofi Annan is concerned, to try to get some regional cooperation to solve this situation in Syria.

MALVEAUX: Hala, why do they keep trying this? Why do they keep trying this -- it seems, over and over -- they try, it doesn't work, they try, it doesn't work -- is this really the only thing that they figured they can do?

GORANI: It's the only thing that's out there. There's really no other solution offered. There's no other plan. There's no plan B -- we've heard that many times from officials as well.

But everybody is having to acknowledge now -- and by the way, you are seeing the images here of the meeting between Kofi Annan and -- there he is -- Bashar al Assad. You have this senior presidential adviser to Bashar al-Assad who I just spotted, Bouthaina Shaaban, as well as high level officials from the Ministry of Foreign Affairs.

So, the question is, what else can you do? I mean, you at this point have the Kofi Annan plan and nothing else. So, you keep trying over and over again. But in the backdrop as you mentioned in your introduction, Suzanne, violence continues -- what started as a democracy movement has morphed into a armed rebellion against the regime of President Assad, and this is becoming harder and harder to solve.

MALVEAUX: And, Hala, one of the things we heard from the Syrian president today, he is accusing the United States of destabilizing the country. He says that the U.S. is partnering with terrorists. Is there anybody who actually thinks that what he is saying is true?

GORANI: Well, I don't think anybody who knows the situation in Syria believes that the armed opposition is constituted of foreign terrorists. These are in many cases defectors from the regular Syrian army. They have formed groups, such as the Free Syria Army and they have become armed. It's very different from how it started.

As far as the United States and other countries that are its allies in the region, such as Saudi Arabia and Qatar, they are not openly saying that in any way they are arming, militarizing the conflict, but Saudi Arabia and Qatar have made no secret of the fact they think the rebels should be armed against the regime.

MALVEAUX: Hala Gorani -- thank you, Hala.

A mysterious illness kills 60 children in Cambodia. Well, now, investigators say they have found a clue that could help them fight for the lives of dozens of more sick children.

(COMMERCIAL BREAK)

MALVEAUX: Welcome back to NEWSROOM INTERNATIONAL. I'm Suzanne Malveaux. We are taking you around the world in 60 minutes.

A mystery illness has killed dozens of children in Cambodia. It hits them so fast that they die within days. 64 have died since April.

Now, officials, they are scrambling to find out what it is before it spreads even further.

(BEGIN VIDEO CLIP)

PIETER VAN MAARAN, CAMBODIAN WHO REPRESENTATIVE: Well, our concern is really to get the diagnosis sorted out as quickly as possible, because then it will be much easier for us to assess how dangerous or not dangerous it is for neighboring countries.

(END VIDEO CLIP)

MALVEAUX: Now, they say they might have some clues. I want to bring in our own Dr. Sanjay Gupta who is in Cambodia.

And, Sanjay, what have we learned about this illness, first of all?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, what they have sort of zeroed in on, Suzanne, to some extent is a particular virus known as the enterovirus 71. The doctors here have been trying to exclude things like SARS and Avian Flu and H5N1. And after they excluded those things, they started looking for things that were less common. And in 15 samples of 24 patients that they studied, they found this enterovirus 71.

Now, keep, as just mentioned, Suzanne, there have been 66 patients, 64 of whom have died. So, this is the partial explanation, but not the full explanation yet.

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Now, keep in mind, as you just mentioned, Suzanne, there have been 66 patients, 64 of whom have died. So this is a partial explanation, but not the full explanation yet, which is why you just heard from that doctor they're obviously still investigating.

SUZANNE MALVEAUX, CNN ANCHOR: And, Sanjay, is there any sense of whether or not this is contagious, how this is spread?

GUPTA: Well, this is one of the sort of pieces of the puzzle here to put together. In some ways you'd expect Enterovirus 71 to be contagious. So if a child, for example, had it in their home, you'd expect siblings to have it or other people living in the household. But that just doesn't seem to be the case here. Doesn't appear to be very contagious. It doesn't appear to be clustering within homes or within communities. So that part of it doesn't fit either.

What I can tell you is that if you look at what happens to these children, they unfortunately die very quickly, within 24 hours of admission typically. Oftentimes it starts with a mild fever, but then quickly progresses to inflammation to the brain and then to a very, very profound deterioration in the lungs. The lungs are completely destroyed, as one of the doctors put it to me. And again, that doesn't all fit with Enterovirus 71 either. So they're trying to figure out, is Enterovirus part of the equation and something else happening as well? That's what literally where the investigation stands right now.

MALVEAUX: And, Sanjay, you spent a lot of time today at a Cambodian hospital. Explain to us, describe for us what you saw. And I understand that there are other children who are very sick in that hospital as well.

GUPTA: Yes, you know, look, Suzanne, this part of the world, and in Phnom Penh in particular, I mean it's tough for just medical care in general. This is a place that has dengue fever, for example, is an endemic here. Tuberculosis is endemic here. People have malaria. So I don't know if you're looking at images now, but, you know, 4,000 or so children a week come into this hospital. And many of them have these, you know, very serious problems. So, first of all, they have to treat those types of illnesses with fewer resources and then also try and parse out who of these children have these -- this sort of mysterious illness and what best can be done for them. So there's a few different challenges that are ongoing here. And again, not a definitive diagnosis as to what's killing so many of the Cambodian children.

MALVEAUX: It is -- it is just heartbreaking to see.

Sanjay, thank you, as always, for your excellent work.

More than 47,000 lives have been lost in Mexico's war on drugs. Well, now the country's presumptive president-elect wants to do -- have a new dialogue on what to do about this, as well as what kind of role the United States should play.

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MALVEAUX: Welcome back to NEWSROOM INTERNATIONAL, where we take you around the world in 60 minutes.

I want you to take a listen here. What has taken over Brazilian radio stations. Check it out.

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MALVEAUX: Kind of catchy. All right. That was John Lucas and Marcelo singing their up-beat chart-topper (SPEAKING IN FOREIGN LANGUAGE), meaning, "I Choose You, You Choose Me." All right. I like it.

More than 500 million users have an account and 340 million messages sent daily. We're talking about Twitter, of course. The folks over at Frog Design -- this is pretty cool -- created a web based app called World Of Tweets. All right. So this show you where tweets are coming in from around the world live and in real time. The U.S. taking the number one spot when it comes to tweets. But Indonesia, if you take a look at it real time, not far behind. They go back and forth a lot. We've been keeping our eye on that app. Pretty cool.

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MALVEAUX: It has been just days since Mexicans elected a new president. Now the presumptive president-elect, Enrique Pena Nieto, wants a new debate about the drug war. Here's what he told CNN's Fareed Zakaria.

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ENRIQUE PENA NIETO, MEXICAN PRESUMPTIVE PRESIDENT-ELECT (through translator): Yes, I do believe that we should open up a new debate regarding how to wage war on drug trafficking. Personally, I'm not in favor of legalizing drugs. I'm not persuaded by that as an argument. However, let's open up a new debate, a review in which the U.S. plays a fundamental role in conducting this review.

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MALVEAUX: I want to bring in our own Juan Carlos Lopez, who's been covering the election and the drug war.

And, essentially, what is he talking about when he says a new role for the United States?

JUAN CARLOS LOPEZ, CNN CORRESPONDENT: Hello, Suzanne.

Well, it's part of an ongoing debate on how this war on drugs should be fought. Many in the region, not only Mr. Pena Nieto, so President Calderon, President Santos of Colombia and other regional leaders have been asking for a new conversation, for a discussion on legalizing drugs. Not -- they don't believe, as Mr. Pena Nieto says he doesn't, in legalizing drugs per say, but in a change of a dialog of the strategies. They believe what's being done isn't working completely. And many want the U.S. to assume a different role. Not only supporting with financial aid, military equipment and training, but also with more emphasis on consumption in the United States. Remember, this is probably the largest consumer of drugs in the world. And many see a direct link between that consumption and the war taking place in Mexico and other countries. MALVEAUX: And one of the things that was striking, President Obama, as well as Secretary of State Hillary Clinton, in their trips to Mexico that I covered, they did take responsibility saying that Americans are drug users and that we have to take some responsibility and accountability for this problem. They worked very closely with Philippe Calderon. But you still had more than 47,000 people who ended up dying over drug-related violence. Is there a new plan here? A new strategy with this new president?

LOPEZ: From what I heard from this interview, from what I've been reading from after the election, it seems that it's a continuation of what the current government has in place. Now, what we have to put in context here is that Mr. Pena Nieto belongs to the pre (ph) party that was in power for seven decades before a change of party in 2000. And there was this anecdotal conversation where people said, well, before this government came on board, there wasn't this widespread violence. But the cartels weren't as widespread in their involvement in the drug trafficking before that year. Mr. Pena Nieto had a task of telling people, well, I'm going to keep on doing this. I'm going to fight the cartels. There's going to be no cease-fire with them. He hired the former head of the Colombian police, who was one of the -- considered an expert in the war on drugs and he has to convince Mexicans, he has to convince people that he's going to be tough on drugs. But Mexicans are tired of the violence. They're tired of those 40,000 (ph) deaths and the violence that comes with the drug trade.

MALVEAUX: All right, Juan Carlos Lopez, thank you. Appreciate it.

They were wearing only a thin layer of paint. Wait until you see the artwork at this year's body painting festival.

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MALVEAUX: Several stories caught our attention today and the photos, of course, as well. Want you to take a look.

These performers are covered in body paint. Barely anything else. They were at the World Body Painting Festival held in Austria over the weekend. Some 200 artists from more than 40 countries showed off their designs to win prizes.

Now to Italy. These are soccer players from the Parma football club exercising on the beach in their Speedos. They're gearing up for the 2012-2013 season.

And earlier today, Taiwan tested 26 missiles in a live fire military drill. Only two of them missed their targets. An improvement from earlier tests. This is significant because mainland China, about 100 miles away, considers Taiwan a renegade state and has missiles aimed at the island.