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Early Start with John Berman and Zoraida Sambolin
American Rescued in Somalia; Reviving the American Dream; Hostages Rescued In Somalia; Obama "Economic Fairness" Defining Issue
Aired January 25, 2012 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ASHLEIGH BANFIELD, CNN ANCHOR: Good morning, everyone. Nice to have you with us. This is an EARLY START. I'm Ashleigh Banfield.
ZORAIDA SAMBOLIN, CNN ANCHOR: And I'm Zoraida Sambolin. We are bringing you the news from A to Z. It's 5:00 in the East. So, let's get started here.
BANFIELD: Very busy night overnight.
We've got some breaking news coming from overseas. These two pictures, happy, happy faces. Freedom -- they are two foreign aid workers, one of them American, and they've been held for three months by pirates in Somalia. They are free. We'll tell you how and how the rescue went down.
SAMBOLIN: And did you watch the State of the Union address? President Obama's challenging Republicans to get on board or get out of his way. And he says preserving the American Dream is the defining issue of our time. We have lots of highlights, lots of reaction. Our panelists are going to weigh in.
BANFIELD: Don't know if you're having a green apple for breakfast this morning, but I'll tell you what, the soon to be biggest technology firm in the world is feasting on green apples. Apple just reporting historic profits -- and I know we say that sometimes, but wait until you hear how much that company made.
SAMBOLIN: Folks probably known because we're contributing to it.
So, Ashleigh, did I tell you that charged plasma particles are hurdling toward us, how would you feel about that?
BANFIELD: I'd say aurora borealis.
SAMBOLIN: And what if I told you they're full of radiation?
BANFIELD: Oh, I'd say run for the hills.
SAMBOLIN: And if I told you Delta Airlines has cancelled flights because of this? Would you be a little concerned?
BANFIELD: I would. And I'm more concerned about those pictures, frankly, when you're saying all this. It's started to get panicky about those incredible shots you're showing.
SAMBOLIN: We're going to tell you how that impacts you.
But, first, we are going to tell you what breaking news this morning. Two aid workers kidnapped in Somalia three months ago are now free. One, as Ashleigh said, is an American, 32-year-Jessica Buchanan.
NBC is reporting that two teams of Navy SEALs stormed the compound by helicopter. There was a lot of gunfire, but the hostages, we understand, are OK, relatively in good condition is what they're saying.
And CNN is working to confirm this report.
BANFIELD: Just remarkable reports coming out of there about the pitched battle, in fact, Zoraida. And with the Navy SEALs operation, according to NBC News, doing what they did.
Perfect to bring our CNN correspondent who's in that area, Nkepile Mabuse, who's in Johannesburg, South Africa.
And, Nkepile, perhaps just get me up to speed on this operation. All of this is a big surprise to us. Many of us didn't even know this American was being held, and now, we're hearing that, in fact, the locals OK'ed this raid.
NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT: Exactly. It seems like there was a lot of support for this American intervention, we're now being told by the Danish Rescue Council. I just got off the phone, Ashleigh, with the general secretary of the Danish Rescue Council. This is the NGO that these two were working for in central Somalia.
Of course, they were kidnapped in central Somalia in October and held. The Danish Rescue Council has refused to pay any ransom for these two, and now we're hearing that Tuesday evening, an American intervention resulted in these two being rescued.
We understand that there was gunfire, that nine people were killed. We don't know how many were pirates, and five were taken prisoner.
Of course, CNN bureaus across the world are working to confirm details of the story. It's still breaking news. Details coming in thick and fast but still many of them very sketchy, Ashleigh.
BANFIELD: We'll keep an eye on that, Nkepile. And we'll continue to tap in throughout the program to find out more about it. At least, Jessica Buchanan, the American who I didn't think many knew was missing -- and sometimes that's what families do, keep things very, very quiet, perhaps --
SAMBOLIN: hoping they can work it out, yes.
BANFIELD: But great news for that family, both of those families overseas and here.
And if you were up late last night, which you --
SAMBOLIN: I watched it in the morning.
BANFIELD: We go to bed very early, folks. But lots of people didn't go to bed. They watched the reviving the American Dream speech, or at least that's what President Obama was calling it, saying the defining issue of our time is, in fact, that.
And last night, this could be, folks, his final State of the Union address if the Republicans have their way. Basically, here's how it cracked down -- cracking down on China, playing by the rules. That's what the president was asking about. Challenging the Republicans also to end their obstructionist ways, and he called for a 30 percent tax on the very wealthy, the millionaires among us.
And the overriding theme, if there was one, though, perhaps restoring fairness.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let's never forget, millions of Americans who play by the rules and work hard every day deserve a government and financial system that do the same. It's time to apply the same rules from top to bottom -- no bailouts, no handouts and no cop-outs. An America built to last insists on responsibility from everybody.
(END VIDEO CLIP)
SAMBOLIN: So much to talk about.
So, live in Washington this morning, we have White House correspondent Brianna Keilar and congressional correspondent Kate Bolduan.
First, we're going to start with you, Brianna.
The president challenged Congress on an issue that would affect nearly every working American, payroll taxes. Listen to this.
(BEGIN VIDEO CLIP)
OBAMA: Right now, our most immediate priority is stopping the tax hike on 160 million working Americans while the recovery is still fragile. So, let's agree right here, right now, no side issues, no drama. Pass the payroll tax cut without delay.
(END VIDEO CLIP)
SAMBOLIN: There's been lots of drama, no agreement. Brianna, the White House is picking up right where we left off last month, what's different this time?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Yes, Zoraida, that sounds familiar. Not a whole lot is different at this point. Last month, of course, the White House and Democrats really seized a victory over the payroll tax cut battle, and I think the White House is expecting, right now with both sides being far apart, that this could be a bit of a 2.0.
But the bottom line here is that that might allow President Obama to paint Republicans as obstructionist, sort of run against a do-nothing Congress. But the big challenge that he's facing is that unemployment number, 8.5 percent in December, expected to remain high in the election.
And so, you heard him last night seizing on the modest improvements that the economy has made, saying that a lot more has to be done, putting out some provisions to create more jobs. But the fact is a lot of them, Republicans, have already said they're opposed to, and a lot of them Republicans are likely to oppose.
And that's why you're hearing this message about fairness that the White House is confident will resonate right up until the election, especially when it comes to taxes. Polls show that it has, especially that sort of line that he drew in the sand, saying that, if you make $1 million or more, you should be paying at least 30 percent in taxes.
Who does that draw a contrast with for President Obama? Of course, Mitt Romney, who the White House is still expecting to be his opponent, who's paying 14 percent in taxes, Zoraida.
SAMBOLIN: All right. Brianna Keilar, live in Washington for us -- thank you.
BANFIELD: And the president was walking a pretty fine line, you could say, last night, promising to, quote, "fight obstruction with action," yet leaving the door open for compromise. Have a listen.
(BEGIN VIDEO CLIP)
OBAMA: With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help because, when we act together, there's nothing the United States of America can't achieve.
(END VIDEO CLIP)
BANFIELD: Our congressional correspondent Kate Bolduan is live in Washington, D.C.
And, Kate, that sure sounded nice. You and I have been having this conversation for several days now, if not weeks, that the president will likely attack the do-nothing Congress, as he calls it, on the campaign trail in the general election.
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: That's absolutely right. And it seems that theme will continue, and that's something the Republicans absolutely have been pouncing on, even -- all day yesterday especially leading up to the president's speech last night. I mean, look, from the perspective of Congress, this was a speech that Democrats loved. A lot of, you know, statements put out afterwards of Democrats applauding the president of laying out a blueprint for future economic success in this country.
But this is a speech that Republicans did not like. We could go even stronger and probably basically hate it. I mean, Republicans really were bashing the president all day, even before he took to the mikes, Ashleigh, saying that this was -- really dismissing the speech, saying it's purely political, purely a campaign speech.
And what they heard in his words during the time he was at the microphone probably did not make them any happier, especially the part about raising taxes on the wealthy. That's something that Republicans fought against for a significant portion of last year.
BANFIELD: Sure.
BOLDUAN: They'll continue fighting. And Republicans were telling me yesterday, that as the president is calling for fairness, they say it's a code word for class warfare. They say the president is trying to divide rather than unite.
Bottom line, it doesn't look like the president and even Republicans have said we're ready to work with the other side, but they're also at the same time pointing the finger at the other side, saying it's the other guy that's holding up this process essentially.
BANFIELD: Well, tell you what? If there was any moment, Kate, about, you know, bipartisanship, maybe it was the Gabby Giffords moment, the Arizona congresswoman, I think expected to resign from Congress today. But this was magic. Look at this moment where she's hugging the president.
BOLDUAN: Seems to be dancing, right?
BANFIELD: Oh, man. Sorry I'm lingering on this. I'm lingering on it, Kate, because it really is an emotional time.
BOLDUAN: You know, you should linger on it.
BANFIELD: I know it's critical. The State of the Union is a critical time, the policy issues that are laid out, but these are the things that people really remember.
BOLDUAN: And also, a stark and honestly fabulous reminder of what -- of where priorities should be. You know, both sides are so partisan right now.
BANFIELD: Yes.
BOLDUAN: And really -- and the president has laid a lot of his central themes on blaming Congress and blaming congressional Republicans for kind of holding up the process.
But this was a real reminder of kind of where everyone should be focused or where Congress and the administration could be -- a rare moment of bipartisanship, a very sweet moment. She's sitting with two members of the Arizona delegation, a Republican and a Democrat, and Gabby Giffords is a Democrat. So, little bipartisan -- part of the bipartisan seating plan that we've seen that started in the last State of the Union.
BANFIELD: Yes.
BOLDUAN: But a great reminder and a fabulous picture. And, of course, everyone wishes her well. She is expected to be on the House floor today and is expected to submit her resignation.
BANFIELD: It makes me wonder, though, that if she returns to politics, how many Republicans would vote for her. It was a great moment to watch.
And thanks for doing all that great work and staying up late and getting up early, Kate Bolduan. Thank you.
SAMBOLIN: All right. So, let's return to that. It's hard to criticize the State of the Union address when the central theme of the speech is fair play, right? But not everyone's buying what the president was selling last night.
So, from Little Rock, Arkansas, we have our panelist here, Alice Stewart, former communications director for Michele Bachmann. From Washington, "Roll Call" political writer Shira Toeplitz. And CNN political contributor Hilary Rosen.
All right. So, Shira, let's start with you this morning. In our last poll, there only 35 percent of Americans approved of how Obama handled the economy. The big focus of the speech was on that, in fact, 46 percent, according to "The Washington Post," was focused on that.
So, listen to what was said, and then we'll talk about it.
(BEGIN VIDEO CLIP)
OBAMA: We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot and everyone does their fair share, and everyone plays by the same set of rules.
(END VIDEO CLIP)
SAMBOLIN: So clearly setting an agenda for election year, drawing a really sharp contrast with Republicans here. But you've got to be careful to not have an over campaign speech. So, do you think he was walking a fine line here?
SHIRA TOEPLITZ, ROLL CALL: Oh, absolutely, he was doing a fine line there and maybe he even crossed over a little bit on that line into a campaign speech. I thought, especially in terms of the content, dealing with the economy, the president's rhetoric was very populist, more so than I think we've ever heard him before, especially when he started going through the names of several states where he wanted to improve economic activity, including Ohio, Cleveland, Pittsburgh, Pennsylvania, my hometown. These are obviously swing states and states that had been hard hit by the economy.
SAMBOLIN: All right. Hillary, I know you're dying to weigh in here. So, last night, famously, Obama said no bailouts, no handouts, no copouts. He talked about taking the money we're saving on the war in Iraq and using it on the foreclosure crisis, an investigation into Wall Street headed by New York state's attorney general, Eric Schneiderman, not a popular guy on Wall Street.
Do you think he was trying to rally the base? Do you think independents are waking up excited this morning?
HILARY ROSEN, DEMOCRATIC STRATEGIST: Yes, because I don't think this was -- you know, look, home foreclosures is not a partisan issue. Republicans, Democrats, and independents are feeling their home underwater and banks on Wall Street not only refusing to partake of refinancing, but still fighting the consumer protection finance board to make sure that consumers get a fair deal from their bank.
So, you know, I think the president's focus on financial institutions, doing the right thing by their borrowers, doing the right thing by consumers, and needing strong watchdogs -- I think that's going to resonate everywhere.
SAMBOLIN: All right. And, Alice, President Obama did not talk about Romney directly, but he set up a sharp contrast there. He said he wants all millionaires to pay at least 30 percent in taxes. Romney's returns, we now know, about 15 percent in taxes there.
Was President Obama here choosing his opponent?
ALICE STEWART, FORMER NATIONAL PRESS SECRETARY, HUCKABEE FOR PRESIDENT: Well, no doubt, Zoraida. He clearly was not focusing on the issues that people are concerned with, which is jobs and the economy, and he's it turning this into a class warfare argument. This was clearly a campaign speech.
The two big issues he has hung his hat on, Obamacare and the stimulus, he didn't even reference last night. And also, two other big issues that are earmarks of his campaign -- the unemployment rate, GDP, and the outlandish debt -- those weren't discussed because he wants to focus on what he calls, and the Democrats will go forward calling -- class warfare, attacking people who work hard, the job creators of this country.
And his plan to tax millionaires, 30 percent, that's going to do very little to actually cut down the debt and deficit. We don't need to tax more. We need to spend less. And that's the way we get out of this economic mess that President Obama has gotten us into.
And it's not about taxing the wealthy. It's about spending less and allowing people that create jobs to invest in their businesses, create more jobs, put more people back to work. That will turn our economy around.
SAMBOLIN: All right.
ROSEN: It's really important, though, that we not think of the president's economic plan as a tax plan. That's what the Republicans have done for years. They've always said, just lower taxes, and the economy will get better. We saw in the Bush years that was not the case.
Central to the president's economic plan to get this country moving again is education, investment in education, and give our workers skills to get jobs that actually do exist, investment in new energy, investment in manufacturing. Those are the things that Republicans have de-invested in, have ignored, all in favor of just a tax plan.
So, the president is saying, look, all of these things are going to go together to create an economic plan. We're not just going to go back to past policies that only focus on tax cuts.
SAMBOLIN: Well, you know, taxes are front and center right now. So, we're actually going to talk to a tax expert about that 30 percent a little later in the show.
In the meantime, Shira, Hillary and Alice, thank you for joining us this morning. We'll see you again later.
And you can keep it on CNN for the best political coverage on television.
At 7:00 a.m. Eastern, on "STARTING POINT," Soledad O'Brien gets reaction to the State of the Union address when she goes one on one with Republican Steny Hoyer of Maryland and Republican Jeb Hensarling of Texas.
BANFIELD: Minding your business now, which is what we like to do about this time everyday.
U.S. markets closing a little bit, mixed yesterday. Dow and the S&P in the red, and the NASDAQ up just a wee bit. I don't think anyone is even going to know anything about this, or remember anything about this day other than the bigger news, bigger market news.
SAMBOLIN: Biting into Apple, is that what we're talking about?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Apple. A blowout quarter for Apple. You guys, I've been covering corporate earnings for a long time, not to sound like an old lady, but I have never seen a tech quarter like this. I've never seen a quarter like this.
And this is a company that today, when it opens for trading, could actually be the largest publicly traded company in the world. It will surpass ExxonMobil.
They sold, for the iPhones, 411,000 iPhones a day in the third quarter. They sold 181,000 iPads every day in the fourth quarter. Christmas came for Apple. I mean, people ran out and bought these things.
SAMBOLIN: We saw those pictures coming in from China, right?
BANFIELD: People really wanting this product.
ROMANS: Unbelievable. You know, its sales up 73 percent from a year ago. Wouldn't you love to have an investment or your business go up 73 percent in one quarter? I mean, there is no recession in Apple land, and these numbers show that Apple has had just a phenomenal, phenomenal quarter.
BANFIELD: Did we know -- I mean, it was good. Did we know it was this good?
ROMANS: No, and we knew it was going to be good. I mean, the company had been guiding, look, they're selling a lot of these products. I mean, if you just anecdotally look around you, people got the first iPad and are now looking at the second iPad, and they're talking about there being a third iPad in March.
I mean, people are frugal in this country because they were really scarred by the recession, but people are very focused on their frugality. On tech, people are willing to spend money, they really, really are. You see it in the kinds of tech that they're buying. So, you know, this is putting apple in sales right neck and neck with Hewlett-Packard for the biggest tech company in the world.
BANFIELD: Unbelievable.
ROMANS: You know, Apple is bigger than the size of Greece. And Apple has almost $100 billion in cash. Apple has more cash than most companies have in the entire value of their company. It's just got money in the bank. We all can't wait to see what it does with that money.
The company, Tim Cook, the new CEO, of course, saying things were very, very good. We'll see how well the stock does today. It was up after hours about seven percent.
BANFIELD: Yes, keep an eye on that. And also Apple makes great pies. That's all I'm saying. The new America.
ROMANS: There's nothing more American than apple pie.
BANFIELD: I'm going to go back to my Canadian.
ROMANS: These products are made in China.
BANFIELD: There's that.
I'd say the American things, I want to go back to my Canadian roots. I grew up watching the northern lights all the time -- totally normal for me.
SAMBOLIN: Do you love this story coming up now?
BANFIELD: Look at this. Like, it's not raining men, it's raining radiation. And I know it's an awful thing to say, but, man, does it make for a pretty picture. Look at the solar flares. Those are the northern lights, folks. That's what I have seen on a regular basis.
(CROSSTALK)
BANFIELD: Solar storm burnt your homework.
This is the strongest one, by the way, since 2003. And, of course, it does make the stunning light show. This light show all the way -- it can be seen as far as Norway. But it is a bit freakish in terms of just the bombardment because it can send waves of energy all the way to earth, and it can also impact our satellite transmissions, which is not good, have an effect on power grids, and some of the flights earlier.
SAMBOLIN: Delta rerouted some of their flights.
BANFIELD: Over the North Pole.
SAMBOLIN: Yes, specifically.
BANFIELD: Well, it's pretty, but that's the headline.
SAMBOLIN: It affects astronauts the most, I hear. So --
BANFIELD: Oh.
SAMBOLIN: Yes. That's who's most affected by it.
BANFIELD: Fascinating.
SAMBOLIN: Yes.
Still ahead -- four East Haven, Connecticut police officers arrested for allegedly terrorizing Latinos in the city. This is an incredible story. You will not believe the mayor's reaction to the arrest. Wait until you hear this.
You're watching EARLY START.
(COMMERCIAL BREAK)
SAMBOLIN: Buenos dias, Miami. Seventy-five degrees right now. Do you just love that? A little bit later, sunny and 81. Doesn't that bring a smile to your face?
BANFIELD: Boy, does it ever? But if that brings a smile to your face, the next story is going to wipe it smile right off. I'm sorry, Miami.
And I'm sorry to bring this story to you. Welcome back, everyone.
The FBI coming out with some extraordinarily strong language about some police officers, calling them bullies with badges. And the mayor of East Haven, where these police officers work, in Connecticut, is defending those police officers even though they're charged with racial profiling and even though some of the accusations are unbelievable.
The indictment has just a laundry list of accusations against four police officers in East Haven, Connecticut, and I'll tell you what? It's not just excessive force, it's also obstructing justice, and it's infractions that go back years. And you will not believe what the reaction to these arrests of these four police officers in East Haven has been from the mayor, Joseph Maturo, of East Haven.
I'm going to tell you what that mayor said in just a moment. But, first, I want to bring on from the television here David Altimari, who's an investigative reporter for the paper there, "The Hartford Courant" there.
David, can you hear me OK?
DAVID ALTIMARI, "THE HARTFORD COURANT" (via telephone): Yes, I do.
BANFIELD: I feel like I read this story wrong because I absolutely could not believe what I was reading. Let me just give a tiny example for everybody who's listening who hasn't heard this before. One of the officers in the indictment apparently, when discussing Latinos in the area -- and that's really what the accusations here stem from, harsh treatment of the Latino community -- said this. That he likes harassing motorists and referred to persons who have drifted to this country on rafts made of chicken wings.
And there was a picture of the raft apparently posted in the police officer's area of the bulletin board saying, you know what we do with snitches regarding the investigation of this. This is something that's been going on for a long time. And the FBI has some very damning stuff on these officers.
ALTIMARI: Well, three years that the investigation actually started because of the arrest of a priest who most of his -- a lot of his parishioners are Latinos. They had been getting arrested or stopped on motor vehicle stops by the East Haven Police Department, and one day he went to a store in East Haven to film an arrest, and officers took his camera away and arrested him and charged him with all kinds of crazy charges.
BANFIELD: Well, Dave, these charges were discussed in the local media there. In fact, there's an affiliate reporter who was talking with the mayor, who I named earlier, Mayor Joseph Maturo of East Haven, and the reporters asked of the mayor, sort of giving him the background on the details here.
Over 10 percent of the population of East Haven is Latino. There are no Latino police officer in the force, and only one police officer in that community speaks Spanish at all.
ALTIMARI: Yes.
BANFIELD: This was what went back and forth between the reporter and the mayor on that very issue. Have a listen.
(BEGIN VIDEO CLIP)
REPORTER: There was such tension in the Latino community with a force of 50 officers, still no police officer of Latino ancestry.
MAYOR JOSEPH MATURO, EAST HAVEN, CONNECTICUT: And your point being?
REPORTER: What are you doing for the Latino community today?
MATURO: I might have tacos when I go home. I'm not quite sure yet.
(END VIDEO CLIP)
BANFIELD: Dave, I don't know if the mayor thought he was being funny, but certainly when that plays out over national television, it's not funny. And clearly with an indictment alleging extraordinarily serious charges of violence that includes bashing people's heads in on concrete walls in the precinct if they're Latino -- what is going on in that community? And what is the reaction to what the mayor said to that reporter?
ALTIMARI: Well, I think he -- clearly, it was a foolish thing to say. I believe what he said basically is like the 13th interview of the day that he had done, and he was trying to make a flippant remark that he obviously shouldn't have made.
BANFIELD: Has he apologized for it?
ALTIMARI: Kind of. I mean, he put a statement out later that, you know, he didn't mean it as -- he was trying to make a joke that obviously came off poorly. It was clearly a stupid thing to say.
BANFIELD: I think you're right.
ALTIMARI: Poor choice of words.
BANFIELD: I think you're right, David. It's a poor choice, and I think once it gets that traction in the media it becomes an even poorer choice. I have to wrap it up there.
But, Dave, thanks for keeping an eye on that for us and thanks for getting up early with us.
SAMBOLIN: That's incredible.
BANFIELD: I knew you were going to be outraged.
SAMBOLIN: That is incredible. They need lots of training in that town.
BANFIELD: I know that this is -- Latino issues are near and dear to your heart. But you don't need to be Latino --
SAMBOLIN: Discrimination across the board.
BANFIELD: You don't need to be Latino, you don't need to be black, you don't need to be white to be offended by that kind of reaction from a leader.
SAMBOLIN: And when the people in your community, who live in your community, such a large percentage, how do you not do some sensitivity training? That is outrageous.
All right -- 5:27 here in the East. Ahead on EARLY START: we are separating fact from fiction. Are you ever watching something and wondering, is that the truth? We're going to tell you.
Christine Romans is breaking down the State of the Union address. Fact checks coming up
And Romney's riches. We all know the guy is uber rich, right? But what about the millions in the offshore accounts? Are there any smoking guns there? We're going to talk to a tax expert about that and so much more.
You are watching EARLY START.
(COMMERCIAL BREAK)
BANFIELD: Welcome back to EARLY START. It is 30 minutes past the hour. So, it's good time to get you caught up on headlines before you head out the door. Breaking news overnight, an unbelievable raid.
(BEGIN VIDEOTAPE)
BANFIELD (voice-over): Two foreign workers are free after being held hostage in Somalia for the last three months. U.S. officials telling NBC News that two teams of navy SEALs rescued the American woman and the Danish man from suspected pirates during a daring raid. They were working with a Danish aide, a demining group. Both said to be in good condition and in a safe location.
SAMBOLIN: And President Obama calling on Congress to help him level the playing field for all Americans. In the "State of the Union," the president said economic fairness is the defining issue of our time. This morning, he hits the road to kick of his re-election campaign.
BANFIELD: And the owner of that wrecked cruise ship, the Costa Concordia, is denying offering discounts on future cruises to passengers who were on board the Concordia when it ran aground. The statement is in response to news reports that the cruise line was offering 30 percent off on your next trip somewhere to the survivors of that disaster.
(END VIDEOTAPE) SAMBOLIN (on-camera): All right. So, the president's "State of the Union" address focused mostly on the economy. Christine Romans has been looking back over the president's record on the economy. I love this. She is doing a fact check for us this morning.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, the president's right when he says the economy is growing again, and companies are starting to go hire. You know, last year 1.6 million jobs were added, and that was the best job growth, I think, since 2005. I mean, it's been pretty rough, but it's been slow -- excuse me -- slow growth.
And so, the president's opponents are going to zero in on how much the national debt has grown under his tenure and say, look, for meager jobs growth, for slow jobs growth, we've added on to a deficit to levels we have never seen that will certainly, certainly will take years and years to try to pay of and it will mean tightening belts.
So, both sides are right on that. You're also going to hear a lot, and I heard it from Gingrich surrogates on this show earlier this week that under the president, gas prices are up significantly, and they are. They're up from $1.84 when he took office to more than $3 a gallon right now. That is true. In part, that's also because the economy is growing a little bit better and because the things that have been happening around the world.
But, guys, I want to talk about what I call this JFK moment last night, when I heard the president appeal to companies. He appealed to companies almost toward their patriotism. Listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My message to business leaders is simple. Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.
(APPLAUSE)
(END VIDEO CLIP)
ROMANS: Now, the funny thing about appealing to their patriotism is that companies serve shareholders, and these are, in many cases, multinational companies that have operations around the world. And, some of the biggest companies that we think of as American companies, their growth, their best growth is coming far outside American borders.
So, asking companies to bring jobs back here, something that the prior administration tried to do too and gave a huge -- and Congress gave a huge tax break to do, and we're still down jobs.
BANFIELD: Why don't those tax breaks work? I mean, look, you're not appealing to a goodwill if you're giving someone a tax break. You're saying, I'll make it worth your while. ROMANS: Well, it's interesting, because the president in his jobs council, he has said to them, you know, look, what are you going to do to create jobs? And the jobs council has basically said, what are you going to do to give us better workers? We need more innovation. We need a better work force. We need education.
No one is really addressing what could be a structural problem in the near term of the long term unemployed, millions of people who need a job right now, not when they're retrained in four years or two years or three years or not their kids who maybe have to start learning more about science and technology right now.
There's still this middle ground where companies are chasing profits and chasing investments around the world, and we have a president who's talking about bringing those jobs back here. Other administrations have tried to bring jobs home, and we've only seen jobs leaving.
SAMBOLIN: We're getting more details on how he would do that, right?
ROMANS: And that's what the whole job council is trying to do. You know, the companies want to cut corporate taxes. They want to cut regulations. They want -- they have a wish list for themselves, and the wish list for Americans is we need more jobs.
BANFIELD: I got to be honest with you. I love the "State of the Union" like everybody else, but I, sometimes, think I'm just sitting there, watching platitude after platitude after platitude.
ROMANS: And that JFK moment was for voters, not for companies.
BANFIELD: She thinks like I think.
(LAUGHTER)
BANFIELD: Christine, you're such -- she's the bomb. The reason I say that is because I want to talk to our political panel about that very issue. Like how much of this is the campaign, is the platitude, is the speaking to voters and how much of this is really our layout of where we are and where we're going? And our panel today is a great one for this.
Alice Stewart, former communications director for Michele Bachmann for president, Shira Toeplitz is the political writer for "Roll Call" magazine, Hilary Rosen, CNN contributor. Hilary, normally, we don't start with a Democrat. We let you come in sort of midway or throw it at the end and wrap it all up, I'm starting with a Democrat today, and I'll tell you why.
And you're going to love this. It's my Jon Stewart effort to looking back over the last couple of years and how the writers -- are they sluggard? Are they lazy, because I hear the same lines over and over again? Just listen to how President Obama talked about immigration in 2010, 2011, and 2012.
(BEGIN VIDEO CLIP)
OBAMA: And we should continue the work of fixing our broken immigration system.
I strongly believe that we should take on, once and for all, the issue of illegal immigration.
I believe as strongly as ever that we should take on illegal immigration.
(END VIDEO CLIP)
BANFIELD: It's not fair to single out the democratic president. I've heard it with every other president as well, and I've seen Jon Stewart do it with every other president. So, why do they do that?
ROSEN: Well, because it hasn't been fixed. And, really, it hasn't been fixed because it's too easy and pat for me to say it's the Republican in Congress' fault that have stopped it. Although, I do think that the Republicans have raised the rhetoric level that have made people, pro-immigration reform folks panicked about a lot of things.
Like, for instance, you know, one thing that the White House and Democrats are kind of afraid to support but makes perfect sense is why are we educating all of these kids our universities and then not stamping a green card to their diploma and getting them to stay here and take some of these high paying jobs we can't fill that would help our housing problem, our housing vacancies?
BANFIELD: I love what you're saying, but I got to be honest with you. I really want to know why they write the same crap over and over every year. It sounds the same.
ROSEN: The reason they keep writing it is because nobody's doing anything about it, and the president is right to call everybody's attention to it because it is a huge problem.
BANFIELD: OK.
ROSEN: And he is going to keep at it until Republicans and Democrats feel compelled to step out of their political boxes.
BANFIELD: Political boxes, exactly where I was going with that, Hillary. Thank you, because the political boxes seem to come down somewhat, if not a little bit, especially with the moment with Gabby Giffords and the bipartisan seating arrangements. I know that the bipartisan seating arrangements started last year, continued this year, maybe not with as much zeal as it could have been.
But it was a great moment to see Gabby Giffords trying to stand up, and her Republican colleague helping her to stand. He might have been the only Republican in the House standing at the times when no other Republican would. Maybe this is just me being Pollyanna, but you know, Alice, don't you think we need a little bit more of this kind of bipartisan representation, at least, if it's a little bit of showmanship to make us feel better about this nation?
STEWART: Absolutely. I agree with you, Ashleigh. Any video we saw of Gabby Giffords was just certainly tugged at your heartstrings. It was warm and refreshing to see her colleagues on both sides of the aisle embrace her and welcome her, and certainly, everyone's heart went out to her.
And, you know, this time last year when the last "State of the Union," it was just a few days after her tragic shooting, where there was a real spirit of bipartisan cooperation.
BANFIELD: Yes.
STEWART: Well, what a difference a year makes. Things have changed. There is no unity in Congress. And, President Obama is mostly to blame for that. He hasn't helped the economy. He hasn't created jobs, and he certainly hasn't brought about unity. He talks about lowering the temperature.
He talks about bringing both sides together. But the fact of the matter is, he is partly to blame for that. He is the one that's stopping a lot of this legislation. And if you look at a lot of the issues he addressed last night, the rhetoric does not meet reality. He just talked about immigration. He talked about how they want to really put in --
(CROSSTALK)
BANFIELD: I think a lot of this stuff is rhetoric, but here's something that wasn't rhetoric. An interview that John King did with Nancy Pelosi, and what she felt about the possibility as John King asked her of a Newt Gingrich presidency. Have a listen to this.
(BEGIN VIDEO CLIP)
REP. NACNY PELOSI, (D-CA) MINORITY LEADER: Let me just say this. That will never happen.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Why?
PELOSI: He's not going to be president of the United States. That's not going to happen. Let me just make my prediction and stand by it. It isn't going to happen.
KING: Why are you so sure?
PELOSI: There's something I know. The Republicans, if they choose to nominate him, that's their prerogative. I don't think that's going to happen.
(END VIDEO CLIP)
BANFIELD: Whoa! I think that was the reaction from a lot of people. Whoa! I can't figure it out, Shira Toeplitz, though. Is that just nasty elitist stuff or is that spot on and calling it like you see it?
SHIRA TOEPLITZ, POLITICS WRITER, ROLL CALL: Well, I think it certainly was a true moment of candor from the former speaker, now House Minority Leader Pelosi on that. I think she meant, first of all, that she doesn't think that, even if he does win the nomination, he'll win the general election. That was pretty obvious from her comments.
But she was kind of a little cagey about it. It seems like she was trying to tell people that she knew something that other people, perhaps, didn't know. Whatever it was, it was rather bullish on her part.
BANFIELD: Was it ever?
TOEPLITZ: She's also been one -- yes -- she's also been one to say or indicate at least that she wants that speaker's gavel once again. She's been bullish on things in the past too, including her own political future.
BANFIELD: And it is an election year.
STEWART: Evidently, she hasn't been seeing the polling results out of Florida, because he's doing quite well. And I can assure you, whether it's Newt Gingrich or Mitt Romney or Rick Santorum, any three of them will do a much better job than the current president.
(CROSSTALK)
(LAUGHTER)
BANFIELD: We got five women going on this TV show right now. It's killing me.
(LAUGHTER)
BANFIELD: Thanks, everybody. Seven o'clock Eastern "STARTING POINT" with our six woman, Soledad O'Brien. She's going to get reaction to the "State of the Union" address when she goes one-on-one with Democratic congressman, Steny Hoyer, of Maryland and Republican congressman, Jeb Hensarling of Texas. It's EARLY START. And we're back right after this.
(COMMERCIAL BREAK)
SAMBOLIN: Welcome back to EARLY START. It is 5:43 in the east. I'm Zoraida Sambolin along with Ms. Ashleigh Banfield this morning.
BANFIELD: Howdy.
SAMBOLIN: Happy. Did you just say happy?
BANFIELD: I said howdy.
SAMBOLIN: Oh, howdy.
(LAUGHTER)
SAMBOLIN: And happy. All right. So, even before Mitt Romney agreed to release his 2010 tax return, we knew that he was super rich, right? Now, we're learning that millions were invested in offshore accounts in the Cayman Islands. The tax rate that he paid, about 15 percent. Are there any smoking guns here?
So, live from Rochester, New York, David Cay Johnson, tax and accounting columnist for Reuters. Nice to see you again. You were super popular yesterday. So, we decided to invite you back again and take a closer look at this. Let's start with those offshore investments in the Caymans.
What is it -- is it just because it's an offshore account that we're talking about this or was he trying to escape taxes by going to those accounts?
DAVID CAY JOHNSON, TAX AND ACCOUNTING COLUMNIST, REUTERS: No, he was not. There are nefarious uses of offshore accounts. The reason he has offshore money is he shares in the profits of the investors in the entities that he ran when he was at Bain. Well, foreign investors go through a Cayman Islands company so they don't have to file a U.S. tax return.
And American nonprofits, college endowments, charitable endowments, pension funds would be taxed on their investments in the properties that Mr. Romney ran, unless, they're run through a foreign corporation as it would rules (ph) on borrowing. So, nothing nefarious at all. Absolutely clean as a whistle.
SAMBOLIN: All right. So, let's talk about Newt Gingrich's returns. Not as wealthy as Romney, but who is. Still, his income was about $3 million. He had an effective tax rate of 31.7 percent. You know, you would think that he could find some tax lawyers like Romney's to help him with this.
But is there a situation where politicians will actually strategically pay more money in taxes? Do you find that that ever happens or that's the advice that they're given by their accountants if they're running for election?
JOHNSON: No. And I've interviewed a lot of lawyers and accountants about this and have not heard anybody recommend that. In Mr. Gingrich's case, let's remember, he released one year tax return. George Romney, back in the 1960s, released 12 because he said one year could be a fluke. And just as I think that Romney should release his returns back to 1984, I think Mr. Gingrich, since he left speaker, should release his returns, too.
He also took advantage of a special deal that's questionable, the same thing John Edwards did. He took a lot of his income as dividends so he didn't have to pay the Medicare tax. If you're the sole owner of a business, that's a dubious tactic.
SAMBOLIN: All right. And then, I want to talk about the Buffett Rule because this is what President Obama proposed last night. Americans who pay more than $1 million a year should not pay less than 30 percent in taxes. Clearly, that was aimed at Romney. He feels like there would be a new fleet of lawyers looking for any loopholes into this.
Would you like to see a Buffett Rule? Do you think that make sense? Could it actually help the American economy and Americans, in particular?
JOHNSON: Well, I think a minimum tax rule for people of very high incomes would be a very good idea, because when you get to the very, very top, we have people who pay -- and we have public record on some of them because of divorce cases and litigation and other things who take in tens and hundreds of millions of dollars and legally pay no taxes. So, having a minimum tax would be, I think, a very good idea to put fairness into the system.
SAMBOLIN: There's one last thing I wanted to ask you about here. We're running out of time, but it was this effective tax rate, the Nonpartisan Tax Policy Center has analyzed effective tax rates. They say that actually 80 percent of Americans have an effective tax rate below 15 percent. A lot was made about, you know, how much Romney paid in taxes. Is it a shock more about his wealth that we're talking about this?
JOHNSON: No. The notion of taxes is the system is designed since the days of ancient Greece when it gave us democracy. That those who attain great increases in income pay the highest rates, bear the heaviest burden. Think about harvesting your successful stock investments and taking care of the losers.
But once you're into the six figures, $100,000 plus, you're paying a lot of money. And the most heavily taxed people in America make between $200,000 and about $1.5 million.
SAMBOLIN: All right. David Cay Johnson, I feel like I get an education with you. So, love having you on the show. We hope you'll join us more often.
JOHNSON: Thank you.
SAMBOLIN: Thank you.
BANFIELD: Yes. It's not every day you win a Pulitzer Prize for writing about taxes, right?
SAMBOLIN: Yes.
(LAUGHTER)
BANFIELD: And good job, David.
SAMBOLIN: And a great way to explain it, right?
BANFIELD: I know. That's a good guy. We'll be back.
The fight over Florida has only just begun. The candidates are preparing to duke it out at the next CNN debate Thursday in Jacksonville. Is that going to affect the polls? Will there be a swing, momentum shift? We're going to talk to Mitt Romney's debate strategist next on EARLY START.
(COMMERCIAL BREAK)
BANFIELD: And a good good morning to you. Fifty minutes past the hour. That's tentu (ph) in other language. Nice to have you here with us. Zoraida Sambolin, Ashleigh Banfield.
Showdown coming in the Sunshine State. GOP frontrunners, Mitt Romney, Newt Gingrich taking the fight on the CNN debate Thursday, Jacksonville, be on the stage. I don't know about the other two candidates if they count anymore even with what's been going on. But, what does happen on the podium does affect the polls, it seems.
We're talking to Brett O'Donnell now who's a long time GOP debate adviser who's helping Mitt Romney. Nice to have you back, Brett.
BRETT O'DONNELL, PRESIDENT, O'DONNELL AND ASSOCIATES: Good to be here.
BANFIELD: OK. So, we were talking to you yesterday, and yet, also, it's a great thing things to say about your work with Mitt Romney and then outcomes Newt Gingrich just a few hours later and says this.
(BEGIN VIDEO CLIP)
NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: I discovered, I guess, that Romney has a new debate coach whose specialty is to say as many untrue things as fast as you can.
(END VIDEO CLIP)
BANFIELD: No. Is that you he's talking about, Brett?
O'DONNELL: I don't know. Maybe it is. But, you know, it's -- this is a typical stock answer that Speaker Gingrich has used. He used it in the debate in Sioux City against Michele Bachmann. When he doesn't have a substantive answer on the charges that he gets attacked on, he comes back with your facts are wrong.
You know, the next thing you know, he'll be attacking Governor Romney's bus driver. But, I mean, you know, it's unfortunate, you know, that the speaker wants to attack me or attack somebody else when he's ignoring the substantive issues that were raised in the debate the other evening.
BANFIELD: OK. And we've been talking substance all morning, but I want to talk with something else with you, because a lot of times, the American public glazes over with the substance and they go for the moments like the Lloyd Bentsen moment. I want to take you back to 1988, Lloyd Bentsen and Dan Quayle, the vice presidential debate. And I want to take you back there because it's what some people call an out of the ballpark moment. Have a look at. (BEGIN VIDEO CLIP)
SEN. LLOYD BENTSEN, (D) TEXAS: I served with Jack Kennedy. I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you're no Jack Kennedy.
(END VIDEO CLIP)
BANFIELD: Bentsen didn't win, but, man, that thing got traction. Brett, do you need a moment like that for your candidate? Do you need an out of the ballpark moment on the stage?
O'DONNELL: Well, I certainly think that debates do turn on moments. We saw that last week, the debates turned on two particular moments in the Monday debate. It was the exchange that Speaker Gingrich had with Juan Williams.
And, on Thursday, it was the opening of the debate when John King lobbed Speaker Gingrich a softball to hit out of the park and use his typical, you know, attack the media strategy. So, debates certainly do turn on moments. And, you know, so, candidates do look for those times where they can create a lasting memory in the minds of the audience.
BANFIELD: That's what I'm getting at. That's what I'm getting at, because a lot of people accuse your candidate of just being a robo candidate. That he doesn't have that zeal and that personality sort of like Reagan did. And I'm going there, because Reagan in 1984 said this to Walter Mondale. Have a listen.
(BEGIN VIDEO CLIP)
RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: I will not make age an issue of this campaign. I am not going to exploit for political purposes my opponent's youth and inexperience.
(END VIDEO CLIP)
BANFIELD: You know, I've got to say, I remember that like it was yesterday, because it made him adorable. Does your candidate need to be a little more adorable?
O'DONNELL: Well, I think Governor Romney showed on Monday evening that he can actually do things like that. I think that his exchange with Speaker Gingrich left the speaker speechless for a moment. And, you know, I think that Governor Romney has actually done pretty well through these debates.
He has described a vision for the country. And so, you know, I think that he has created some of those moments in the debates. The exchange in September at the Reagan debate with Governor Perry was one of those moments.
BANFIELD: Well, I'm putting the pressure on you right now. So, we want to invite you back and talk about some big moments that you taught him. You ready for that? (LAUGHTER)
BANFIELD: Thanks, Brett.
O'DONNELL: Thank you very much. Good to be here.
BANFIELD: Good to have you on. We look forward to talking to you again.
Fifty-four minutes past the hour, and we're back right after this.
(COMMERCIAL BREAK)
SAMBOLIN: We are keeping you in the pop culture loop this morning by taking a look at what's trending on the web and in social media. This morning, it's actress, Demi Moore. She was rushed to the hospital. Apparently, a 911 call from her home on Monday night. The paramedics assessed her. They took her straight to the hospital. A TMZ report said that she is being treated now for substance abuse.
BANFIELD: Yes, but not so fast because her reps came in with a statement and issued this, saying, "Because of the stresses in her life right now, Demi has chosen to seek professional assistance and certainly doesn't talk about it being substance abuse." And you'll probably know that the big story in her life has been this divorce action against Ashton Kutcher, her husband, after he cheated on her. So, who knows what the 911 call was about at this point.
SAMBOLIN: And still to come, President Obama says that he'll take action with or without Congress. But could a State of the Union challenge backfire on him? You're watching EARLY START.
(COMMERCIAL BREAK)
