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IRS E-mails; Mississippi Runoff; Can Clinton Relate to the Middle Class?

Aired June 24, 2014 - 09:30   ET

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

CAROL COSTELLO, CNN ANCHOR: Stand today over those missing IRS e- mails. This as the IRS chief insists there was no cover-up. Athena Jones is following that story for us.

Good morning!

ATHENA JONES, CNN CORRESPONDENT: If last night's more than three and a half hour long hearing is any indication, today's witnesses are in for some heated language and tough questioning in part two of the hearing the Oversight Committee is calling IRS obstruction. Lois Lerner's missing e-mails.

(COMMERCIAL BREAK)

COSTELLO: A hearing is about to get underway on Capitol Hill and it's bound to be pretty intense. Lawmakers want to know how the IRS lost e- mails tied to an investigation that the tax agency targeted the Tea Party and other groups. The hearing is expected to be quite contentious. Last night, the current head of the IRS pushed back on Republican claims that there's a cover-up involved.

(BEGIN VIDEO CLIP)

JOHN KOSKINEN, IRS COMMISSIONER: All the e-mails we have will be provided. I did not say I would provide you e-mails that disappeared. If you have a magical way for me to do that, I'd be happy to know about it.

REP. DARRELL ISSA (R), CHAIRMAN, HOUSE OVERSIGHT COMMITTEE: The American people should believe that if they don't have the resources to pay their taxes, they shouldn't pay their taxes, because if the IRS doesn't have the resources, they won't keep records. That's pretty much what you're telling us here tonight.

KOSKINEN: The I.T. budget has been cut by over $100 million over the last four years. This year's budget for 2014 required $300 million just for the implementation of the Affordable Care Act. But Congress provided us zero. That meant that that $300 million to implement a statutory mandate had to be taken from other I.T. programs.

(END VIDEO CLIP)

COSTELLO: And there you have it. Athena Jones live in Washington.

I would expect there would be more fireworks later today. ATHENA JONES, CNN CORRESPONDENT: Hi, Carol.

Well, we heard a lot of angry words, a lot of accusations being thrown around last night and we can expect a lot of the same kind of tough questioning today when a White House lawyer, a lawyer for the White House counsel's office, Jennifer O'Connor, takes the hot seat today. She'll be testifying. One of the witnesses testifying before the committee.

Now, Committee Chairman - Oversight Committee Chairman Darrell Issa subpoenaed O'Connor to compel her to testify yesterday. This is after the White House declined to make her available. They said their reasoning in part was that they discovered -- the IRS discovered these e-mails had gone missing back in February and that post-dates the brief - the six-month tenure that O'Connor had as a lawyer at the IRS. She was there only until November of 2013.

But Chairman Issa is accusing -- accused the White House of trying to block the committee's first request for what he called voluntary cooperation from the White House. The kind of voluntary cooperation he says the White House had promised him. He said that he wants to hear from O'Connor because before she moved on to the White House, she was in charge of the response at the IRS to the congressional inquiry into the targeting of these conservative groups, in these e-mails. And so she should be able to answer questions about why attorneys at the IRS didn't focus and flag Lerner's lost e-mails sooner. So, we definitely expect to see more tough questioning today.

Carol.

COSTELLO: All right, Athena Jones, we'll check back. Thanks so much.

It is the most costly and most caustic primary race in the country, and it is unfolding right now in Mississippi. Senator Thad Cochran is the veritable poster boy for the Republican establishment, even able to call in John McCain to join him on the stump. Six terms in office and decades since Cochran saw a real challenge. Enter Chris McDaniel, a Tea Party upstart who actually edged Cochran in the primary. McDaniel is riding an upswell of anger that's aimed at Washington and the pork project spending that Cochran delivered and once made him invincible in Mississippi. So let's take a closer look at this race. John Avlon is a CNN political analyst and editor in chief of "The Daily Beast," and Ross Douthat is a CNN political commentator and an op-ed columnist for "The New York Times."

Welcome, gentlemen.

ROSS DOUTHAT, CNN POLITICAL COMMENTATOR: Good morning.

JOHN AVLON, CNN POLITICAL ANALYST: Good morning.

COSTELLO: Good morning.

So, John, Mississippi lags in many economic and social areas. Can the state really afford to give up the federal money for things like, you know, building highways and airports and such that Cochran brings in? AVLON: Well, Carol, it's a really interesting dynamic that's sometimes

called red state socialism. Mississippi actually gets $3 from the federal government for every $1 it gives. And that, in the past, has made people who bring home the bacon, like Thad Cochran, very popular. But in the Republican primary, which is intensely ideological and really along these sort of ideological debates, it's a vulnerability.

Now, the impact of it, the practical impact, you know, people want their cake and they want to eat it, too. You know, the conservative populists want to rail against deficit spending but get those dollars in to keep local tax rates low. Does it compute? No. Does that matter emotionally on a primary? Not in a way that benefits Thad Cochran, necessarily.

COSTELLO: So, Ross, does that mean voters don't realize how federal money helps their own state?

DOUTHAT: Well, in fairness to the voters, it's not always clear that federal money does help those states in the long run. I mean Mississippi, as John says, has been getting much more money from the federal government than it takes in, and yet it's still an underdeveloped and, you know, low -- high-poverty, low-education, all the rest state. And there are actually some interest research suggesting that these kind of pork barrel projects do, in fact, as conservatives would argue, tend to crowd out private investment and ultimately depress growth rates, at least in some cases. So that's - that's, I think, what you'd say in defense of the ideological consistency of those voters.

The other thing you'd say is, just that this is a case where, look, it's obvious that, you know, McDaniel is being cast as an extremist by Cochran and his supporters and McDaniel is a bit of an extremist. He is -- you know, he is a talk radio host with all the - all the baggage that comes with that. But at the same time, this is a case study in why the Republican establishment has problems in these races, because Thad Cochran is, I'm sure, a very nice guy, but also kind of a time server. And he clearly, in certain ways, doesn't want to actually be out on the trail for this race. He is 106 years old. Excuse me, he's in his early 80s and there's -- you can understand why he would be having trouble - excuse me, trouble winning re-election.

COSTELLO: OK. And I have to bring in Larry Sabato. We were having some trouble with your signal. Larry Sabato is the Center for Politics director at the University of Virginia.

So I'll throw this question at you, Larry. So, we talked about, you know, federal dollars pouring into Mississippi and voters not so much concerned about that in this primary race, except for African-American voters who are actively campaigning for Cochran because they benefit from the jobs created from these federal dollars. So it's just kind of strange that they're actively campaigning for Thad Cochran and they're going to vote for him.

LARRY SABATO, CENTER FOR POLITICS, UNIV. OF VIRGINIA: Well, it's lesser of evils, Carol, with the - we have a lot of elections that are that way. And in Mississippi, Democrats vote in the Republican primary and vice versa. Look, if Cochran scores an upset tonight -- and it will be an upset. Most people expect McDaniel to win because he got more votes than Cochran in the first primary. Historically, when you do that to an incumbent, the incumbent loses in the runoff.

But the Cochran people have come alive. Their campaign has come alive. And they've decided to bet everything on a bipartisan coalition of moderate conservative Republicans who do like the pork, plus, Democrats, not just African-Americans, also moderate, white Democrats. They're trying to get them to the polls. We'll see whether it works tonight.

COSTELLO: That is so strange.

So, John, if the Tea Party candidate pulls it out, will it really be a victory for the Tea Party, or is the establishment candidate just so old and tired that the team -- it wouldn't matter who ran against him?

AVLON: No, look, I do think it matters. There are two dynamics going on here. Patricia Murphy has a great piece in "The Beast" today about how committee chairmans are actually more vulnerable for losing election than members of Congress who are under investigation. Incumbency can be a real vulnerability, particularly in these narrow primaries, as Eric Cantor saw.

The other dynamic, though, that's gone with these Tea Party insurgencies is they tend to elevate candidates who are less credible general election candidates. Thad Cochran is effectively trying to put together a general election coalition in a Republican primary, possible because there's no voter registration in the state of Mississippi. And the best hope the Democrats have, the only prayer they could have of picking up a seat in Mississippi is if folks make the case in the general that a guy like McDaniel isn't just too extreme, as Ross said, but a potential embarrassment for the state of Mississippi. And that's one of the dynamics we've seen play out over the last few congressional cycles, whether it's, you know, Sharon Engel, Christine O'Donnell or now this challenge from McDaniel. But it's interesting to watch.

DOUTHAT: But I think the fact that you have Democrats rallying around Cochran at this point suggests that they don't have a lot of confidence in their ability to put together a general election coalition and defeat McDaniel. Often, you'll get Democrats crossing over into Republican primary or vice versa to try and elect the more extreme candidate. And you saw this, Todd Akin in Missouri was deliberately boosted by Claire McCaskill in her re-election effort. But in this case, the fact that they're going for the candidate who would obviously be tougher to beat in the general election tells you that Democrats don't think they're going to win a general election even against someone as vulnerable, potentially, as McDaniel.

COSTELLO: Interesting. I've got to wrap it up here. John Avlon, Larry Sabato, Ross Douthat, thanks to all of you.

DOUTHAT: Thank you, Carol.

COSTELLO: Still to come in the NEWSROOM, can you stay grounded if you're a bazillionaire, or was Cyndi Lauper right, does money change everything? We'll talk about that, next.

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COSTELLO: Thirty years ago, with a hit song for Cyndi Lauper, but this next tune seems to sum up a current controversy for Hillary Clinton.

Maybe she's right. Cyndi Lauper is right, money does change you, or perhaps if you're Hillary Clinton, it really depends on how you make your millions.

In an interview with "The Guardian" newspaper, Clinton said despite her enormous wealth, she is not part of the problem when it comes to income inequality. Clinton said, quote, "But they don't see me as part of the problem because we pay ordinary income tax, unlike a lot of people who are truly well off, not to name names, and we've done it through the dint of hard work."

Now this comment comes on the heels of another head-scratcher. It wasn't long ago Clinton told ABC she and Bill Clinton were dead broke when they left the White House.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, FORMER SECRETARY OF STATE: We came out of the White House not only dead broke but in debt. We had no money when we got there and we struggled to, you know, piece together the resources for mortgages, for houses, for Chelsea's education.

(END VIDEO CLIP)

COSTELLO: A thought from my op-ed on this subject, on CNN.com, quote, "Wouldn't it have been grand if Clinton had simply said I worked hard, yes, but I've been blessed for so many years. I can't say I totally understand your life, but having been there once, I promise you, I'll try."

Wouldn't that have been simple and much more honest? Because let's face it, money does change everything.

Let's talk about that. Salim Purth is a senior policy analyst and macroeconomist for the Heritage Foundation, Jason Johnson is contributor for HLN and political science professor at Hiram College.

Welcome to both of you.

JASON JOHNSON, HLN CONTRIBUTOR: Good morning.

SALIM PURTH, SENIOR POLICY ANALYST, HERITAGE FOUNDATION: Thank you. Good morning.

COSTELLO: Good morning. OK, so, Salim, I'm going to -- I'm going to ask you the big question, does money change everything? PURTH: So, people in power are always going to be able to find people

with money who are willing to make a deal, and that's why power is dangerous. So as long as we have an executive who can regulate the entire economy at will they're always going to find somebody who's rich --

(CROSSTALK)

COSTELLO: No, that's not what I'm asking you. I'm asking you that if you become wealthy, does it change you? Does money change you as a person?

PURTH: I don't know. I've never been rich, but I do think the comments that you read at the beginning of the segment are really frightening window into this idea that income inequality is a problem but not my income. It's always there's someone richer than me and they're the one who's the problem. That's frightening when that's coming from a person who's been in a position of a great deal of power as secretary of state.

COSTELLO: OK, so Salim is coming at this from a purely political angle, and that's fine. It's fine. I just want to get to the root of this question, so, Jason, I will ask you this question, does money change you, even if you come from a humble background?

JOHNSON: Yes --

COSTELLO: If you become wealthy, does it change you?

JOHNSON: Yes, I'm less Cyndi Lauper, I'm more Didi, more money, more problems. OK. When you make a lot of money, of course it's going to change you. There are things you can do. There is the amount of money you have where you don't have to worry about working. There's the amount of money you can have where you can tell everybody to leave you alone. It fundamentally changes you as a person.

Now whether that makes you qualified or changes how well you can do your job as a politician is completely different. The thing about Hillary Clinton is, she's been rich for so long and we're so used to her being rich for so long, I'm not surprised she's going to make comments like this. I'm waiting for her to say something similar to Mitt Romney's 47 percent. So money changes you, but it doesn't mean you can't be elected president.

(LAUGHTER)

COSTELLO: No. We have many wealthy politicians in this country. So, Salim, I'm going to torture you with another question about whether money can change you. Let's say you won the lottery tomorrow and you became a millionaire, do you think that the money would change you instantly? Would it take some time? Would your friends treat you differently?

PURTH: I do think your friends would treat you differently. And sadly what we see from lottery winners is they end up no happier and five or 10 years later no wealthier than they started. I honestly think you need to take a humble attitude when you have been blessed. I think your op-ed comment was correct.

If you acknowledge that you are rich, that you have been blessed, you are more likely to take a sober view, and if you don't let it change you, if you don't say well, my circumstances have changed and I need to treat the world differently and I need to acknowledge that I'm not dealing with the struggles that ordinary people are dealing with, you are going to make comments like Romney's comments or Clinton's comments.

And that is unfortunate. I don't want to see our politicians of either party coming at power with the attitude that oh, I'm poor, I need to somehow make this work for me, when they are really not by any reasonable standard that we have.

COSTELLO: Salim, I could not agree more.

So, Jason, a question for you. If politicians, wealthy politicians really wanted to prove that they understood the middle class, perhaps they should do what Senator Robert Graham did years ago in 1977, to be exact. For 100 days Senator Graham works a different jobs, everything from driving a truck to changing bed pans, to teaching a class. I think that would be a great idea, don't you?

JOHNSON: I think it's great. That sort of Morgan Spurloch thing where you take the regular job of regular people. But here's what politicians could really do, and Republicans and Democrats could do to really show that they care about regular middle class people. They could listen. They could actually listen to what regular people tell them all the time, which is we want more affordable health care. And we want improvements in minimum wage. And we want greater job protection.

I don't care if you come out of billions of dollars. Americans have never had a problem with rich people. We love Mark Cuban, we love Bill Gates, we love John Schnatter who won Papa John's. The only time we have a problem with your wealth is when you stop listening and there have been plenty of very wealthy politicians and very wealthy people who've been able to demonstrate that despite being born with a silver spoon in their mouth, they were still able to connect with regular people. And there were politicians who came from nothing who didn't listen to a darn thing that regular voters once they got into office. So you can take the job, but really I'd rather you just listen.

COSTELLO: Jason Johnson, Salim Purth, thanks for the discussion. I appreciate it.

And if all of you would like to read my op-ed, "Money Changes Everything," go to CNN.com and scroll down to the opinion section. I'll be right back.

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COSTELLO: Checking some top stories for you at 56 minutes past.

Right now the NTSB is holding a hearing to determine what caused the Asiana Airlines Flight 214 crashed last summer in San Francisco. Three people killed there, nearly 200 others injured after the jet hit a seawall while trying to land on the runway. Officials are expected to weigh whether the plane manufacturer Boeing created a system too complicated for pilots to understand.

The CDC lab director linked to an accidental anthrax exposure has now been reassigned. That's according to a report by Reuters. More than 80 employees may have been exposed to the deadly chemical earlier this month after workers failed to adequately inactivate samples. The CDC says workers are being monitored and there is no risk to the public.

A new report warning parents that popular cereals including Wheaties Fuel, Coco Krispies and Smart Start may pose a risk to millions of children. The report says the cereals are loaded with vitamin and mineral amounts calculated for adults. Experts say overconsumption of ingredients like vitamin A and zinc could lead to potential health risks including hair loss and liver damage.

The report blames part of the problem on outdated nutrition labeling rules and misleading marketing tactics by food companies.

The next hour of CNN NEWSROOM after a break.

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