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Erin Burnett Outfront

House May Reject Senate Payroll Tax Cut Extension; Newt Gingrich Loses Lead in Polls in Iowa; North Korean Leader Kim Jong-il Dies

Aired December 19, 2011 - 19:00   ET

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

ERIN BURNETT, CNN HOST: Thanks, John. Breaking news tonight. We are this Washington for the House vote of the Senate payroll tax cut bill. Will our elected officials finally get the job done or are we headed for another federal failure? Take a look right now. We're getting ready for Republican leaders to speak in just a couple of moments as we count down. We should see John Boehner, Eric Cantor, Jeff Hensarling appearing there in just a couple of moments.

The latest developments then from Asia following the death of North Korea's Kim Jong-il. What do we know about Kim Jong-un, the new leader, and what does it mean to America?

And another toddler goes missing. Ayla Reynolds father says he tucked her into bed on Friday and the morning she was gone. What are they doing to find her? Let's go out front.

We are waiting for the House to waiting for the House to vote on the Senate's payroll tax cut bill. This is a true down to the wire. The vote too should take place later tonight. You're going to see the House Republican leadership come out in a few moments, we anticipate, to make a statement. John Boehner, speaker, will be there, and we will also hear from Eric Cantor and Jeb Hensarling, who was, of course the co-chair for super-committee which failed in its task to cut $1.2 trillion from the deficit.

As we count down to that, let's tell where you we stand at this moment. The version of the bill under consideration tonight is the Senate version. It extends the payroll tax cut and unemployment benefits for two months. Now, they're paying for this by having Fannie Mae and Freddie Mac charge higher fees on new mortgages, so it is paid for. What's the holdup? Well, the bill only extends the tax break for two months. That is, as we have talked about, a real kick the can down the road solution and it frustrate as lot of people on both sides of the aisle, but enough so for the GOP leadership in the House that they may put the whole thing off entirely.

The Senate has already gone on recess for the holidays, which means they would have to be recalled back to Washington in order to vote on any new bill the House creates. Dana Bash, CNN's senior Congressional correspondent, joins us. You come back to a real nail biter. This is real brinkmanship.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. I've been gone on maternity leave for six months, and I was just saying before the specifics certainly have changed, but the chaos here hasn't. It is brinkmanship. You just showed a picture outside the Republican meeting right now. House Republicans are discussing the way forward now. And unless something dramatic changes which according to sources I've talked to in that meeting didn't look like it will being the Republicans will vote down the two month extension of the payroll tax.

And this is because there is virtually a revolt going on, Eric, inside the Republican conference right now because in the House they're saying it's simply not enough and that it will hurt businesses to just do this temporary fix.

But it means there is absolute chaos here. And it also means 160 Americans will likely see their taxes go up. Unemployed Americans will lose their benefits. And what's really scary in talking to Democrats and Republicans all day today, Eric, there's not end game right now. They really don't know how this will end up because the Senate, which is right down the hall behind me, they're gone. They passed over the weekend this two month extension. And the Senate Democratic leaders are saying the vast majority of Republicans in the Senate said this is a OK and we're not coming back.

BURNETT: So you think they mean it, right? They're not coming back. If this doesn't happen, then we're going into the New Year.

BASH: You ask a very good question, because the Republicans are sort of banking on the idea that Democrats in general and the president specifically, they don't want to have this increase in taxes for many, many Americans because it will really hurt the economy potentially, and that's the last thing President Obama needs going into this 2012 election year.

However, the Senate Democrats, if you look back through the year that they've been working with house Republicans, the Republicans in charge in the House, we've seen this brinkmanship over and over again. Democrats generally have blinked. They have caved, as they said. And I've talked to several Democrats today who insist you won't recognize us. You've been gone for six months. We're not going to blink this time, we're not going to cave. But we'll see what happens at the 11th hour. It's anyone's guess right now, Erin.

BURNETT: Well, thank you right now, Dana, we appreciate it.

Let's find out exactly what's happening here. Representative Debbie Wasserman Schultz joins us from Florida also of the Democratic National Committee. Thanks so much for being with us. We appreciate it. So just give me your -- how do you feel tonight?

DEBBIE WASSERMAN SCHULTZ, (D) FLORIDA: Well, really outraged, I have to tell you, outraged on behalf of my constituents, on behalf of the single mom and single dad who I stood with a couple weeks ago in an ice cream parlor in my district who would face $1,000 coming out of their paycheck if this payroll tax cut extension doesn't pass.

Erin, the legislation passed the Senate 89-10. The Senate is not exactly known in recent times as a very functional institution. If they were able to pass a bill 89-10 with overwhelming bipartisan support, how could the House Republicans -- this is how extreme they are, that the house Republicans would refuse to take up the two month extension so that we could sit down at the table and work out how we would extend it for a year just so that they could insist on their way.

We're talking about House Republicans who oppose the payroll tax cut extension to begin with, had all year to take it up and pass it, and only new at the last minute are scrambling and insisting that they really want a year extension. What they want is their way, and they're trying to jam the middle class. And it's not going to work will time this time.

BURNETT: And I think people on both sides are incredibly frustrated that something that a lot of people agreed on you could only get done for two months. And I know your view is it's better than nothing. But the National Payroll Commission came out -- National Payroll Reporting Consortium, I'm sorry, came out today and said, look, it's too late, anyway. We can't implement a two month extension. Two-thirds of the nation's employers wouldn't even be able to do it, they would have such confusion at this point. Does that make the cause for just wait and get right?

SCHULTZ: That doesn't even make any sense. This is a payroll tax cut that has already been implemented, and they would simply continue to implement it. We have to make sure that 160 million people don't lose their payroll tax cut. We have to make sure that 2.2 million people also in this bill don't lose their unemployment compensation benefits.

And Mark Zandi, John McCain's former economic adviser, has said and have others, that the economy would being remarkably damaged and that we would really jeopardize the continued recovery if we don't pass this tax cut extension and the unemployment benefits extension. It's two months. We need to get it done so it doesn't happen to the middle class over the holidays. The Republicans need to stop listening to the Tea Party extremists and do what's right for the middle class.

BURNETT: One final question. I guess the point was that it's scheduled to expire so I guess they have it programmed into their systems and they say it takes longer. But I hear you. You think you could do it at the stroke of a key stroke.

But in terms of this overall economic growth, most numbers out there, half a percent. Obviously that's not something anybody wants to take and we can find ways to pay for this, but are you fully sold this being a make or break for the economy, recession or not a recession just based upon this one tax?

SCHULTZ: This is a critical component of the president's American Jobs Acts. One of the key things that he proposed was to extend the payroll tax cut for employees, add a payroll tax cut for employers, which the Republicans have refused to take up, make sure we made short term investments in infrastructure, keep teachers and first responders working on the job. There's a package that we need to move forward with. One of the linchpins is this payroll tax cut extension. Without it, it pulls a lot of money out of the economy, a lot of money out of middle class pay checks right at the holidays at a critical point when we'll make ultimately impacting the amount of money that folks can spend right in the hearts of the holiday season. Unbelievable.

BURNETT: Thanks very much. We appreciate your time.

SCHULTZ: Thanks, Erin.

And let's bring in John Avlon now, senior columnist for "Newsweek" and "The Daily Beast," James Carville, Democratic strategist, and David Frum, former speech writer for George W. Bush. All right, good to have all three of you.

John Avlon, this is an interesting situation, because you and I talked extensively last week starting Thursday night that we were incredibly frustrated that Democrats and Republicans could agree on a tax cut and only get it done for two months. It was pretty pathetic. But now this happens and the whole thing gets even messier and even worse.

JOHN AVLON, CNN CONTRIBUTOR: That's right. But the only thing worse than kicking the can down the road two months on payroll tax is failing to keep the payroll tax cut in place at all. And yet that's what we're playing with. It just underscores how addicted these folks are to partisan brinksmanship. They can't stop themselves from playing poker even when the middle class tax cut is at stake. And it just increases that frustration and understandable anger at Congress that exists out there in America right now.

BURNETT: David Frum. Do you think that there is there any way that John Boehner can win this battle politically, or no, it's a lost cause?

DAVID FRUM, FROMFORUM.COM: I think let's step back. That whole question is the wrong question. I don't mean to say that it's the wrong way. It's the wrong way to think, this brinksmanship. And I agree with John Avlon.

We have here the gigantic tragedy of the failure of the American political system to respond in an intelligent way to an economic crisis that is not only worse than the 1930s, but in many ways is similar to the 1930s. We've been here before, so we have no excuse for not knowing what to do.

And there are a whole series of tragedies. There's the tragedy that the payroll tax, which is not a bad idea, but it has not had results we want in the time that we've been experimenting with it. So this is the one at this point countercyclical policy that there still is, and it's not a very good countercyclical policy.

Second, we have the crazy idea that at a time with the world will lend the United States money at less than two percent it has to be quote/unquote "paid for" by immediately coming up with the spending cuts that we should be thinking about in a time prosperity in order to fund the aid the people need in this time of recession and even depression.

And the idea that we're playing games with unemployment insurance, that's the part that worries me even more than the payroll tax cut, because we can question how much good the payroll tax cut does. We know that the unemployment insurance money is desperately needed in a country where now the average unemployed worker is out of work for over 40 weeks.

BURNETT: James Carville, what's your take on how this ends? Obviously I think everyone would agree we should have had it done last week and it should have been done for a year. But we're not, so here we are. How does it end?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: With an election. I think we'll just keep seeing this on and on. I agree with 90 respect about of what David Frum just said. We've been in this situation before. We know what we're supposed to do. We're just not doing it.

In terms of this payroll tax is the Democrats want to for with a millionaires tax increase and the Republicans insist that they have the pipeline in it. So they took out the millionaires tax increase and kept the pipeline in. They got something most all of the Republicans except for 10 in the Senate to vote for it because Speaker Boehner said he wanted something out of the Senate. And this thing is so bipartisan it's unbelievable.

Then it gets over to there and it's stunning how much good it would do. We could argue, but it will do some good. It's $1,000 a year to somebody, which a lot of money during this. And the fact that the Democrats give in on the tax, they give in on the pipeline, they go in and get 89 votes in the Senate, and then all of a sudden Boehner, who is a likeable guy who has no control over his caucus, says I can't do this. But they do some wacky things over there, so I'll just have to wait and see.

BURNETT: We'll take a pause, gentlemen. Thank you very much.

As we said, we are counting down. In just a couple months we'll hear from the House leadership. John Boehner going to be coming as you can see there, we keep showing you, a lot of staffers behind them, but John Boehner, Eric Cantor, Jeb Hensarling, Representative McCarthy, the majority whip will also be there. They're going to be making a statement. Right now our anticipation that we'll have some procedural votes and this could extend into the wee hours of the morning.

But we're also counting down the GOP side outside the House to the presidential election. And, wow, a big shift in the polls today. We'll give you the very latest on Newt Gingrich, and a big endorsement for Mitt Romney, coming up after this.

And then a shocking video from Iran which allegedly shows an American spy captured. Former assistant secretary of state James Rubin comes out front with information about exactly what happened and what he knows about what the CIA is doing in Iran. And the "OUTFRONT" five, AT&T, dropping that doomed bid for T-Mobile. What does it mean for your dropped calls?

(COMMERCIAL BREAK)

BURNETT: Prince Al-Waleed bin Talal of Saudi Arabia has taken a $300 million stake in the social media site Twitter. The site has more than 100 million active users and it is becoming increasingly popular in the Arab world where it was credited with playing a role in the Arab spring. But now Arab language messaging is the fastest growing segment on Twitter, which brings us to tonight's number -- 10,000. That's the dollar amount many top celebrities are paid per tweet when they endorse products on Twitter -- seriously.

According to the site sponsored tweets.com, advertisers are willing to play celebrities like Kim Kardshian, her sister Chloe, and rapper Snoop Don tens of thousands of dollars to mention their products and services on Twitter. If you're interested in the really big names, like Kardashian or Nick Cannon or Lindsay Lohan, you actually have to call for a quote. I will say by the way our writer, Chris Maloney, called for a quote on himself and he gets 63 cents a tweet. That is a star that will surge.

Maybe he was the latest flavor of the week. The Newt Gingrich story pretty stupendous. We've got 15 days until the Iowa caucuses and Newt Gingrich just lost his lead in the polls. This was -- all right. A new CNN-ORC poll shows Newt Gingrich now tied with Mitt Romney for first place. They each have 28 percent of the vote.

And why do I make that poof sound noise? Because a week ago an NBC News-"Wall Street Journal" poll showed Newt was ahead by 17 points. OK, that it's pretty stupendous. But it is anybody's race.

And joining us how, vice president editor of the "Des Moines Register" Rick Green, and Tea Party Patriots co-founder Jenny Beth Martin. All right, I want to talk about the poll number, but Rick, I also want to know that your paper endorsed Mitt Romney this weekend. Jenny, your organization held a straw poll that Newt Gingrich won, but I know you're not going to endorse anyone. Let me just ask you, Rick, why do you think that Mitt Romney is the right guy? It's been Newt Gingrich who has been getting a lot of momentum lately. Why do you go for Mitt?

RICK GREEN, VICE PRESIDENT OF NEWS, "DES MOINES REGISTER": Well, it's interesting sitting here in this Des Moines which is the front lines much the big political war that's going on right now. To listen to the show that you just had on and your guests talking about what all is unfolding in Washington right now, it's no surprise to you, to your viewers and certainly to everyone here in Iowa, Washington is broken. We have not seen any sense at all of any kind of willingness to collaborate and to cooperate from a bipartisan standpoint.

We've had a unique perspective with being able to spend time with each of these candidates in the past 12 or 15 months, in the case of both Dr. Paul and Governor Romney for the past five years or so as they pursued the White House. And we've been impressed with Governor Romney's vision for this country and the fact that he's focused in on job creation, turning around the economy, but doing so in a way that hopefully will build bridges in Washington as opposed to this incredible political divide that exists there right now.

BURNETT: And there are a couple interesting things you say in the paper, but Jenny Beth, let me ask you first, I know you said you won't make an endorsement. But let me ask you about another thing that stood out in this poll and that is that 56 percent of likely GOP voters still say they might change their mind, which is pretty stunning considering that they have known Mitt Romney for eight years, that they have known Newt Gingrich for 28 or more years. The point is this is a known field. It's been a very covered race. And 56 percent say they'll still change their mind.

JENNY BETH MARTIN, CO-FOUNDER, TEA PARTY PATRIOTS: I'm not surprised by it. Exactly as the other man is saying, there are huge problems in Washington, D.C. And they're evaluating the candidates and trying to determine who is going to best be in the position to solve the problems that our nation faces. They don't want to see us go the way of Greece, and it will take a lot of bold thinking and a lot of decisive decision-making on the next president's part.

BURNETT: Rick, let me ask and you a quote on -- I just have to read and I think this gave me a smile. In your endorsement of Mitt Romney on his reputation as a flip-flopper, you said, quote, "Voters will have to decide for themselves whether such subtly nuanced statements express Romney's true beliefs or if he's trying to have it both ways." Many people might want to punch you by hearing you say "subtly nuanced," others will say that it's a beautiful way of putting it. You came to terms with that.

GREEN: We did. Erin, it's no big surprise politicians change their positions. Some of them own up to it, some of them want to run away from it. What impressed the editorial board of "The Des Moines Register" is that you had a politician in Governor Romney who acknowledged it. He didn't try to dodge it. He acknowledged that he has changed his position on some things.

What we wrote is exactly how we feel, and that it's up to the voters on decide if he was trying to have it both ways or did he express some kind of maturity which frankly was a breath of fresh air for us. Here was a politician who said I've changed my career in certain ways in which I look at some of the issues. I stand by who I am and what I believe in, but perhaps I could have done it in a different way. That was mature, that was fresh thinking for us.

BURNETT: Jenny Beth, would you be comfortable with Mitt Romney? I know you won't endorse anyone, but with half the Republican Party identifying itself as Tea Party friendly or Tea Party devoted, and the Tea Party really not warming up to Mitt Romney, would you be comfortable with him if he became the nominee?

MARTIN: What I can say rather than what I would be comfortable with is that what we're hearing from Mitt Romney is what we've been fighting for the past nearly three years. He's talking about bringing fiscal responsibility to Washington, D.C. And that's what we need right now in our country. And so when you weigh that versus what we have currently in the White House, I think that there are people who would be much more in favor of Mitt Romney than they would of President Obama.

BURNETT: All right, well, thanks very much to both of you. We appreciate it.

MARTIN: Thank you.

BURNETT: In Iran tonight, a video has been made public that allegedly shows a confession of an American spy. According to the semi-official Fars News Agency, this is the man accused of carrying out the intelligence operation. In the video in which he appears to be very calm and collected, he says is name is Amir Mirza Hekmati, and he claims to be a U.S. marine.

CNN has not been able to confirm the authenticity of the report, and the man's father is quoted as saying the allegations are, quote, "a bunch of lies." But today OUTFRONT spoke with former U.S. assistant secretary of state James Rubin, and we asked him how extensive CIA operations actually are in Iran.

(BEGIN VIDEO CLIP)

JAMES RUBIN, FORMER U.S. ASSISTANT SECRETARY OF STATE: I suspect the CIA is operating both in human intelligence, satellite intelligence, and recognizance information and shared intelligence information with other services like the Israelis, like the British, the French. It's an all source effort right now in Iran.

(END VIDEO CLIP)

BURNETT: The U.S. State Department has not responded to our request for further comment.

South Korea, meantime, is on high alert following the death of North Korea's Kim Jong-il. And we'll tell you what we know about his son. It's amazing that this is the modern times and we're not 100 percent sure whether his son is age 27 or 28. But we do know a lot about Kim Jong-un. We're going to tell you about that and the nuclear threat now from North Korea.

Plus the latest in the case of Maine's missing toddler Ayla Reynolds. She vanished from her bed this weekend. Where is she? We'll be back.

(COMMERCIAL BREAK)

BURNETT: We are awaiting in just a couple moments -- as we said, we have been counting down to John Boehner and the other House GOP leadership talking about what's going on in that room. For those of you not aware of the full situation, the Senate obviously passed a two-month extension of the payroll tax and the House seemed to be ready to do so. John Boehner said no. Two months is not good enough. He wants to do it for a year or not at all. Dana Bash is there, our senior Congressional correspondent. And Dana, I know you've been getting e-mails from people inside that room. What are you hearing?

BASH: They seem to be, according to several Republicans who have been, as you said, I've been e-mailing, with pretty united on the idea of voting against this two month extension, saying that it's a year or nothing. The question now is the political tactics and strategy going forward, because this is really brinksmanship with Democrats, particularly Senate Democrats and the White House and who gets the best political upper hand here, and, more importantly, how they work their way out of the whole concept of allowing taxes to go up for 160 million Americans.

We still expect the vote to happen later, and I think it's important to underscore something you touched on several times which is that everybody says that they want a year-long extension for the payroll tax, the White House, the president, Democrats, everybody. The question has been all along how do you do that and pay for it so it doesn't add to the debt and deficit. And they couldn't come up with a solution in the senate. That's why they did this two month extension. But House Republicans are saying that's not good enough. We've got to find a way to do it for a year before we leave for the year.

BURNETT: We'll be checking in with Dana in a couple moments as John Boehner comes out. David Frum, former speech writer for George W. Bush, was the one who said just borrow the money. It's really cheap. It's a little ironic there.

We start this second half of our show with stories you care about. We have been working pretty hard today. The reason I'm in D.C. tonight is I spent the day with Janet Napolitano, the secretary of Homeland Security. In my explicit interview I asked her about drones, specifically this whole issue of whether drones, predators that currently control the border, will be much more widely used inside the United States.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: I think we have to be very careful here. What we're talking about is the domestic United States. And we want to make sure the things we do have also respectful of people's privacy and civil liberties, the constitutional values that we're protecting as well as protecting safety. So I think any discussion of using that kind device within the United States, that would require a serious policy discussion. And I'm not prepared to make an announcement on that.

(END VIDEO CLIP)

ERIN BURNETT, HOST: All right. Well, there were explosions, there were guns, there were knives, and there were drugs. Much more of my exclusive interview with the secretary on OUTFRONT. We can promise you some heroin.

Next, AT&T announced late this afternoon it's abandoning its $39 billion bid to take over T-Mobile. It's a move analysts predicted to OUTFRONT last week. The abandoned bid comes after the U.S. government tried to block it. They were worried it would eliminate competition and ultimately cause all of us to pay higher bills.

AT&T must pay $4 billion to break up the merger. It would have made the company the largest mobile phone company. It's now number two behind Verizon.

Number three, a memory card found of Bradley Manning's aunt's home contained information to how to contact WikiLeaks -- this testimony according to our producer in today's court hearing. An expert also testified that he found more than 100,000 State Department cables on a computer that the Army private used. However, the investigator found no evidence that the cables were actually sent to anyone.

Now, Manning faces 22 charges, including aiding the enemy for allegedly distributing secret documents to WikiLeaks. If he is convicted, he could spend the rest of his life in prison.

Number four, bad news for Bank of America. The bank stock closed tonight below the $5 mark, $4.99. It is the lowest level since the worst of the financial crisis in March of 2009.

Now, this could lead to an even bigger selloff. That's because a lot of mutual funds aren't allowed to hold stocks that trade under $5. So, once it goes below that, they have a little bit of margin. But once they go below that, they may be forced to sell to satisfy their fund requirements.

It's actually important for a lot of people watching since about 40 percent of 401(k) and retirement plans actually own shares of Bank of America.

It has been 136 day since America lost its top credit rating. What are we doing to get it back?

Well, South Korea on high alert after the death of Kim Jong Il, North Korea's infamous leader since 1994. Now, Kim Jong Il died of a heart attack. He was 69 years old.

When it was announced on North Korean television, the announcer wept.

In control now, Kim Jong's youngest son, Kim Jong Un who most of the world knows almost nothing about.

Here's what we know -- he's in his late 20s, 27 or 28. He was educated in Switzerland and last year was named a four star general. This power shift threatens the stability of the entire region because North Korea has nuclear weapons and there are concerns that are very you are against about the safety and stability of those nuclear weapons.

Joining me now from New York to talk about this is Gordon Chang, author of "Nuclear Showdown: North Korea Takes on the World." And in Washington, Ambassador Jack Pritchard. He was special envoy for negotiations with North Korea when he met Kim in person back in the year 2000.

So, let me start with you, Ambassador. You met -- you met him. What stood out to you at that time and what stands out to you now about the son?

AMBASSADOR CHARLES "JACK" PRITCHARD, FORMER SPECIAL ENVOY FOR NEGOTIATIONS WITH NORTH KOREA: Well, I accompanied Secretary of State Albright in October of 2000. And one of the things that struck me then is how confident Kim at least tried to convey to us in the meeting there was just his principal foreign policy adviser, his first vice minister, and then an interpreter. That was it.

When the questions came up, he seemed to be able to answer them. If there was something difficult at all, he would turn, ask a partial question to Kung Suk Chu (ph) who started to give him something and he would say, oh, yes, I know.

I was also struck by his attempt to convey to Secretary Albright his mastery of subject. Secretary Albright had suggested to him that we had a list of some technical questions about missiles that we wanted to negotiate and perhaps someone could answer those at one of his specialists. And he took them and flipped through those and said I can answer these. Now, of course he couldn't answer them all, but that's what he tried to convey.

BURNETT: Gordon, let me ask you what you think about this and what do you know about the son? I mean, we've seen various reports that he is erratic and has temper, which, of course, contributed to concern that there could be unrest, or he may not have full control, because he's young and he hasn't had any experience.

Do you think we're going to see real instability?

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN: NORTH KOREA TAKES ON THE WORLD": I actually think that we will. And the reason is that Kim Jong Un has only two years of on-the-job training. His dad had 20. And that means Kim Jong Un has not had the time to put his supporters into key posts in the regime. He hasn't had the experience of balancing all of these factions. And that means he might try to bolster his legitimacy by doing something horrible, like they did last year with the sinking of the South Korean frigate, the shelling of the South Korean island.

BURNETT: So you think we could see some real ratcheting up soon?

CHANG: Yes, and it could be as early as this year, could be next year. The South Korean elections we would think would prevent them from doing anything because they want to get a friendly government in Seoul. But this is a government that operates only according to its own logic, which is not shared by anybody else. And that really means it's very hard for us to try to figure out what it will do.

But it would seem to me that it will become a little bit more belligerent in the years ahead.

BURNETT: Ambassador Pritchard, I'm curious what your experience was like when you were there. You know, "The New York Times" had reported that Kim Jong Il was one of the biggest or was the biggest buyer in the last 1990s of a certain kind of liquor. There was a lot of partying and living the extremely high life among a very, very tiny group in North Korea, while the rest of the population suffers and many people are starving.

What did you see about how they live?

PRITCHARD: Well, I think my first trip of November of 1997, I was truck by a number of things. There were very few cars on the road. They were usually older models Mercedes. After two or three days, I kept thinking something is amiss here and I started counting the number of people who were wearing eyeglasses and the answer was I found six over a three-day period.

So basically necessities for the people was certainly lacking. That's improved over time. But Kim Jong Il and those around him lead a very privileged life in stark contrast to those of the North Korean people.

BURNETT: Gordon, how big of a threat is the instability that you see to the United States right now? It's a big question given that we have an election, given that our politics are incredibly dysfunctional, and given that Iran has been acting up.

CHANG: Well, North Korea and Iran have been running a joint missile program and also a joint nuclear weapons program for about a decade. And, of course, that's a threat to us. The more immediate threat though is that North Korea will do something against the South like it did last year. We have an obligation to defend South Korea.

I'm worried that China might become entangled in all of this, and so what might be a minor provocation could escalate into something much more serious. I'm just saying it will happen. I'm just saying that the risk of it happening is unacceptably high.

BURNETT: All right. Well, thanks very much to both of you. We appreciate it.

And in tonight's "Outer Circle," we go to Egypt. Two pro- democracy protesters killed in Tahrir Square today. The pictures from this are horrifying.

And the latest from Maine where Ayla Reynolds vanished from her bed this weekend. Why are so many toddlers going missing?

We'll be right back.

(COMMERCIAL BREAK)

BURNETT: Let's check in with Sanjay Gupta. He's in tonight for Anderson Cooper.

What do you have on "A.C. 360" tonight, Sanjay?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, Erin, you've been talking about North Korea. Well, ahead on "360," we've got much more on the death of dictator Kim Jong Il. And keeping them honest, Erin, despite the picture painted by their government propaganda, this is reality. People risking everything even their lives to get out.

Unique perspective tonight from Laura Ling who was held captive for months in North Korea, also her sister Lisa Ling who worked tirelessly to bring her sister home.

Also ahead, this incredible story of a child, baby Pierce, only 4 months old, fighting for his life while his mom takes on the system to try and get him the care he needs.

Those stories and tonight's "Ridiculist" at the top of the hour, Erin.

BURNETT: Sanjay, I have to take advantage because you're a doctor, seeing that picture of baby Pierce, what's he up against?

GUPTA: Yes. He was born with a congenital heart defect. And he needs heart surgery. He lives in Indiana. He gets his health insurance through Medicaid.

But Indiana's Medicaid program said it would pay for the operation little Pierce needs, with a slight catch, Erin. We'll tell you what the catch is and what it means for you, as well, if you were to run up against something like this, Erin.

BURNETT: All right. See you in a few minutes, Sanjay.

GUPTA: All right. Thanks.

BURNETT: We turn now to the search for a missing toddler. The story eerily similar to that of baby Lisa Irwin. You remember baby Lisa. She was last seen in her Kansas City home on the night of October 4th.

Nearly three months later, the case remain as mystery and it is drawing comparisons to what is unfolding in a tight-knit community in Maine, which is where another toddler, Ayla Reynolds, disappeared this weekend.

Her father said he tucked her into bed on Friday night. In the morning, she was gone. At the time she vanished, she was actually wearing a cast on her left arm from a recent fall. Police are canvassing the area tracking down leads. All while her family said they have no idea where she could have gone.

What happened to her?

Joining us now is Marc Klaas. His daughter Polly was kidnapped and murdered in 1993. The group he founded helps law enforcement in the search for missing children.

And, Marc, thanks for coming back on. It's good to see you again. MARC KLAAS, FATHER OF POLLY KLAAS: Thank you, Erin.

BURNETT: What do you think happened here? Police are treating this as a missing person's case. Do you think that's Ayla was kidnapped?

KLAAS: Well, I think chances of that are very slight only because statistically less than half a percent of all children that are reported missing are victim of a stereotypical stranger abduction. I think that you have to look at a much smaller world of possibilities here. I think the universe of possible suspects is very small and consists of the individuals that were in the house the evening before, any peripheral contacts that they may have had, neighbors, and certainly registered sex offenders in the community.

BURNETT: And police have also reportedly seized two cars that belonged to her family. What are the implications of that? I mean, there are some that seem to come to mind, but what do you see in that?

KLAAS: Well, sure. I think that the police are doing exactly what I said. They are looking inward rather than outward. They're looking number one at the father because statistically again, parents are the most likely suspects in these kinds of situations.

So, they're going to be looking -- I understand they've also been in the attic of the house. They've focused a lot of attention in the garage of the house. They've taken a couple of cars. So they're going through this with a fine-toothed comb.

And they're also depending upon the resources of the FBI, the state police, et cetera, who have much greater experience in these types of situations. So, I think this is all good information.

BURNETT: Do you believe the authorities have a person of interest? I mean, I know we talked during the baby Lisa situation, which is still unresolved and still there have been no arrest certainly in the family or anywhere else.

But in this case, do you think that they have somebody that they already think is responsible?

KLAAS: Well, I think the people that are potentially responsible and the suspects would be the individuals that were in that house the night before. Remember, Erin, supposedly this little girl went to bed at 8:00 and didn't make a peep. She's a 20-month-old child with a broken arm. Didn't cry out, didn't do anything for almost the next 13 hours. I think that that's highly improbable.

I think the authorities are going to segregate the people that were in the house and they're going to interrogate them, and they were going to try to find breaks in the stories.

BURNETT: All right. Well, thank you very much, Marc. Good to see you again. We'll keep the following the story.

KLAAS: Thank you, Erin. BURNETT: And now this -- we do it at the same time every night, our "Outer Circle," where we reach out to our sources around the world.

And tonight we begin in Cairo where at least two pro-democracy protesters died today in clashes with security forces in Tahrir Square.

Mohammed Jamjoom is in Cairo.

And, Mohammed, how tense is the situation? The pictures are terrible.

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Erin, the situation is not only tense, it's volatile, the fourth day of clashes between protesters and security forces. While protesters say they've been systemically targeted by the armed forces here, these supreme council of the armed forces, that's the military council that rules Egypt, they say that it's the protesters that are to blame for the clashes that have been going on.

As of tonight, not a lot of hope the tensions will subside here anytime in the near future -- Erin.

BURNETT: Mohammed, thank you. And now we go to Syria where the government has signed an Arab League agreement to stop the violence and allow international observers into the country.

Rima Maktabi is following the story closely from Abu Dhabi.

Rima, do people really believe that this is true this time? What's been the reaction from people on the ground?

RIMA MAKTABI, CNN CORRESPONDENT: Erin, just as soon as they signed the deal to let in Arab observers into the country, activists inside Syria were reporting at least 25 people killed by the pro- government security forces. Among them, two children.

The Syrian opposition thinks that the Assad regime is maneuvering while more civilians will be killed -- Erin.

BURNETT: Rima, thank you.

And now to Iraq, where an arrest warrant has been issued for one its vice presidents. The Sunni government official is accused of orchestrating bomb attacks.

Arwa Damon is in Baghdad tonight.

And, Arwa, what's behind the charges?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Erin, the charges are based on confessions that aired on state television by three men said to be part of the vice president's personal security detail. The men confessed that at times they had direct orders from the vice president himself to carry out bombings and assassinations, saying that they used their official identification cards to navigate indicate various checkpoints.

Now, his political party and his office both say that these allegations are entirely politically motivated, part of al-Maliki's ploy to gain more power.

The great concern is that this is going to further deepen the sectarian divide here and this is a country that knows all too well that politics and violence tend to go hand in hand -- Erin.

BURNETT: Arwa, thanks as always.

And next, Ken Jennings. In 2000, he was the pop culture phenomenon. Remember, he went on that 74-game winning streak on "Jeopardy". Well, he's gone places since then literally. He's got a book entitled "Maphead: Charting the Wide, Weird World of Geography Wonks." I love that stuff and I do best a little quiz to stump him, next.

(COMMERCIAL BREAK)

BURNETT: "Jeopardy" champion Ken Jennings won $2.5 million when he won "Jeopardy" 70 games in a row. Well, that was 2004. But this past February, he went on the show again against IBM's machine Watson. And although Jennings lost, he's landed on his feet with the publication of a new book called "Maphead."

He is a nerd but a neat one, and I spoke to him earlier.

(BEGIN VIDEOTAPE)

BURNETT: I know you talk about how you slept with your atlas under your pillow. I brought mine. My mother still has it. I saved my money. First thing I bought with my bake sale money was an atlas. So I know how you feel.

But you write about that, running home to your atlas after school and how special that was for you. I wanted to ask you two things about technology because I've got in this literally my maps from when I was a kid, right? A physical piece of paper, right?

TRIVIA CHAMP KEN JENNINGS, AUTHOR, "MAPHEAD": With crayon coloring on it.

BURNETT: With crayon coloring and lots of inaccuracies which I won't put up for the camera. But let me just ask you this -- what do you think about the GPS? Is GPS killing us? We type in, oh, let's go to the McDonald's around the corner, instead of just rather than knowing where to go even in our own town.

JENNINGS: I have one in my car and I feel terrible every time I use it.

BURNETT: But you use it?

JENNINGS: I do. I do. I'm a slave to the convenience of it. But I feel like it makes us dumber, because, you know, that part of your brain where you're always sort of thinking I'm a little too far west, we better turn here -- I mean, that's what makes us good spatial thinkers.

BURNETT: All right. What about another technology -- thing in technology that's become central to how we live, Google Earth?

JENNINGS: I think Google Earth is -- I mean, my hope is that things like Google Earth will actually, you know, make maps seem sexy to kids. You know, for first time in centuries, maps can do all these new things. You can watch real time traffic or weather. You can se photos of your house. You can actually see on your smartphone where your friends are right now.

You know, these are things that like 10 years ago something where you could see friends on a map, that was so out there, that was like a Harry Potter plot device, you know? And now, everybody has got it in their phone. I mean, I think this thing -- I think it makes maps seem cool to kids.

BURNETT: And so, but Americans, you know, they really don't know where places are. There's a poll that you referred to that we pulled from "National Geographic." It's a few years old. So, a caveat with that.

Btu fewer than three in 10 Americans think it's important to know the locations of countries in the news. Just take for example the outsourcing of jobs to India which a lot of Americans know about and have strong opinions on. Forty-seven percent of Americans couldn't find the Indian subcontinent on the map.

JENNINGS: Wow. It's sort of big. It's not like it's tucked away down there, you know?

BURNETT: It's got an obvious shape.

(LAUGHTER)

JENNINGS: You think we could find India. That's a little bit troubling to me. I mean, Americans have this reputation for being very insular and not caring what goes on outside their borders. And, you know, I don't think that reflects well on us that we can't find India.

BURNETT: Are you in support of something like where Americans would spend -- kids would spend a mandatory year overseas or is there a way to change the way we see the world?

JENNINGS: Obviously, it's got to happen in our schools. I mean, I think we're the only place in a developed world where a kid can get a master's degree, go from kindergarten to advanced degree and never take a geography task.

BURNETT: So, in the book, you talk about the three great challenges of our time, Islamic terrorism, global warming and the rise of China, and you describe them all as problems of geography. How come? JENNINGS: I sort of feel like maybe this is just because of the way my brain works, but I feel like if you don't know where a place is, I mean, how are you ever going to make any kind of decision? I mean -- you know, how can you understand Iraq or Afghanistan or Libya if to you those are places that are all just over there somewhere? I mean, if you can't even point to them on the map, can we trust the voter to make the right call?

I feel like you have to know where things are to make the right decisions.

BURNETT: All right. Well, Ken, thank you so much. Appreciate it.

JENNINGS: It's a pleasure. Thanks for having me, Erin.

(END VIDEOTAPE)

BURNETT: All right. This guy knew everything. But after the interview, I tried to see if I could stump him and I tried really, really hard. Here's the trivia master had a little fun with.

(BEGIN VIDEO CLIP)

BURNETT: What is the largest Iranian island in the Straits of Hormuz?

JENNINGS: Oh, I can't remember the name of the island. It has hyphens in it.

BURNETT: No hyphen. Four letters.

JENNINGS: You got me.

BURNETT: It is the island of Kish.

JENNINGS: Kish. It sounds delicious. I guess real men do not visit Kish.

(END VIDEO CLIP)

BURNETT: All right. Tomorrow exclusive interview with Janet Napolitano. And with it comes 4 1/2 kilos of heroin. Have a great night.