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Flat Tax: Good Or Bad Idea?; An Equal Opportunity Piggy Bank; Hezbollah: U.S. Spies In Mideast Exposed; Jailed Rape Victim Freed; Towers Evoke 9/11 Memories; Romney Launches Attacks Campaign on Gingrich in Iowa

Aired December 17, 2011 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Mitt Romney zeroes in on line of attack against Newt Gingrich in the final days before the Iowa caucuses.

This hour, the frontrunners and underdogs and the last big push before the voting begins.

Ron Paul could be a spoiler in Iowa. He is willing to predict victory? Stand by for my interview with the Republican wild card.

And Hezbollah militants claim they exposed CIA officers naming names and causing a security nightmare.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM

The first Republican presidential contest is a little more than two weeks away and a top Obama adviser says the Democrats are counting on a long primary season slugfest between Newt Gingrich and Mitt Romney. With 2012 almost here, every move, every word from the candidates could make a difference. CNN's Jim Acosta is covering the final sprint of the caucuses.

Jim, we're seeing a possible shift in the Romney campaign strategy. What are you seeing? What are you hearing?

JIM ACOSTA, CNN CORRESPONDENT: Well, there may be a big momentum shift for Mitt Romney out here in Iowa, Wolf. He had a pretty good debate on Thursday night against the GOP field. He emerged pretty much unscathed. He was not the subject of the attacks from the other candidates. That was really Newt Gingrich's role. He was beat up pretty good during that contest. And so Mitt Romney came into a Sioux City steel factory on Friday and talked to the voters here about his outsider message that he plans to take to voters over the coming weeks. Here's what he had to say.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: What concerns me is that we have in Washington a class of people who spent their whole time in Washington, and they don't understand what you do.

(END VIDEO CLIP) ACOSTA: And for Mitt Romney, that message right there, that anti- Washington message really gels with the message coming from the latest Tea Party favored to endorse this campaign. Nicky Haley, the governor of South Carolina, when she came out and endorsed Mitt Romney she was saying the same thing. She would like to see a candidate winning the GOP nomination who would really fix what she called a broken Washington, Wolf.

BLITZER: Jim, what else are the candidates going to get ready for the January 3rd caucuses, what, two and a half weeks away?

ACOSTA: That's right. I think we're going to see a lot more of Newt Gingrich in Iowa. This state is becoming very critical for his campaign. His campaign spokesman, R.C. Hammonds, says he will be putting on a bus over the next couple of weeks, sort of like John McCain's Straight Talk Express that worked so well in New Hampshire back in 2008.

Gingrich really almost needs to win Iowa at this point to keep his campaign momentum going. It seemed for so long that his campaign was really the front-runner now. But Mitt Romney's campaign has come on strong in the last couple of days. The negative attacks seem to be working on Newt Gingrich.

And if Mitt Romney wins the state of Iowa, which is possible, and then goes to New Hampshire and captures that state and heads into South Carolina with the endorsement of that state's governor, his campaign is looking very good. So Newt Gingrich definitely wants to win Iowa at this point, Wolf.

BLITZER: That will be a dream come true for Newt Gingrich, for any of the candidates for that matter going into New Hampshire and South Carolina. Jim Acosta, thanks very much.

Let's dig a little bit deeper right now with our cheap political analysts Gloria Borger and John King of "JOHN KING USA". He's the host of that show. He is on the campaign trail in Cherokee, Iowa.

Guys, listen to this exchange at the Thursday night debate between Michelle Bachmann and Newt Gingrich. It got pretty intense on Newt Gingrich's involvement with Freddie Mac years ago.

(BEGIN VIDEO CLIP)

MICHELLE BACHMANN, (R) PRESIDENTIAL CANDIDATE: I was trying to see these two entities put into bankruptcy because they frankly need to go away when the speaker had his hand out and taking $1.6 million to influence senior Republicans to keep the scam going in Washington, D.C. That's absolutely wrong. We can't have this as our nominee for the Republican Party. Someone who continues to stand for Freddie Mac and Fannie Mae. They need to be shut down not built up.

(APPLAUSE)

UNIDENTIFIED MALE: Speaker Gingrich? NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: Well, the easy answer is that's just not true. What she said is factually not true. I never lobbied under any circumstance.

(END VIDEO CLIP)

BLITZER: All right. John, you're in Iowa right now. How is that playing out there?

JOHN KING, CNN ANCHOR, "JOHN KING USA": There is no question, Wolf, no question from a week in Iowa you get the sense that Gingrich momentum has stalled. The question is will it slip or just plateau? He's down a few points if you look at the polling data. He's down in energy and enthusiasm, if you talk to the activists.

The big question is who benefits from that if the Newt momentum, as they like to call it, stalls? Who benefits. Congresswoman Bachmann hopes it is here. That is one of the most fascinating subplots here. I'm in Cherokee, a tiny town, evangelical voters, conservatives. When you talk to people here, I just had a conversation with an evangelical voter she says she is torn between Santorum, Bachmann and Governor Rick Perry of Texas. She says leaning fairly a bit after the last debate.

So, if Gingrich stalls, the question is who benefits? And a subplot of that is a very fierce and split competition right now for the critical evangelical voters who helped the last winner here four years ago, that, of course, Mike Huckabee, Wolf.

BLITZER: He's trying to be restrained, Gloria, in hitting back. He's trying to take the high road. Is that a smart strategy, not so smart, because John is absolutely right. His numbers slowly have been going down in Iowa in recent days.

GLORIA BORGER, CNN POLITICAL ANALYST: Right. He's got a barrage of negative ads running against him. He did he fight back with Bachmann last night. As he said, he reserves the right to fight back during a debate. But the question is how long is he going to be able to keep this up? Look, the notion of crony capitalism and Washington insiderism is not good in a Republican primary. And he's been attacked by both Bachmann and Rick Perry for being -- and Mitt Romney, for that matter -- for being a career politician.

So he seems to be getting it from all quarters. At some point it's not good enough to say I wasn't actually registered to lobby. I wasn't a lobbyist. I mean how do you define that? I think that's going to have a lot of resonance in the Republican race. They don't want to nominate an insider this time around.

BLITZER: And listen to Rick Santorum. He was not shy in going directly, directly against Mitt Romney. Listen to this exchange.

(BEGIN VIDEO CLIP)

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: He personally, as governor, issued gay marriage licenses. I don't think that is an accurate representation of his position of saying tolerance, versus substantively chaining to the laws. I have a strong, consistent track record of standing up for the values of this country. Not discriminating, I had a no discrimination policy in my office. We're not talking about discrimination. We are talking about changing the basic values of our country.

ROMNEY: I want to make it very clear. I have been a champion of protecting traditional marriage. That continues to be my view. If I somehow missed somewhere, I'm happy to get corrected. But that is something I feel very deeply.

(END VIDEO CLIP)

BLITZER: John, you're reporting out there, the social issues like abortion, gay marriage, how important are they right now at a time of economic distress? Everyone says the economy and jobs certainly issue number one.

KING: They are issue number one. However, there is a core constituency in this state that in the caucuses, next year in the general election, make no mistake about it, the economy will be issue number one. But in choosing a Republican nominee, what Senator Santorum is getting at there, he tries to make the case that neither Mitt Romney or Newt Gingrich are true conservatives. That conservatives can't trust them. That if they become the nominee, they can't trust them on those social issues like same sex marriage, like abortion rights, for example.

And there aren't any huge differences between these Republican candidates. They're not huge differences on the big economic issues. So sometimes that niche marketing, if you will, Senator Santorum, Wolf, is fighting for survival here. Governor Romney has a decent level of support in Iowa, and some people think if Gingrich comes down, maybe Romney can sneak in late and do business here.

So Santorum is fighting. There are three or four tickets out of Iowa. First, second and third winners and maybe the fourth place winner if that person is a surprise coming up. Santorum desperately wants to be that person. So he's going at Romney trying to peel away the conservative voters, especially those who backed Romney in 2008 here, who wished he campaigned a lot more this time around.

BLITZER: Santorum is being tough and Michelle Bachmann is being tough.

BORGER: Right.

BLITZER: Ron Paul. Rick Perry, a little bit less. Still, the fighting continues, Gloria.

BORGER: It does. I think quite frankly I don't think either Newt Gingrich or Mit Romney are candidate number one for evangelical voters. And so these people are really fighting for the people who went for Mike Huckabee last time around.

And Rick Santorum does have, as John points out, kind of a niche market there for evangelicals. He spent more time in the state than any other candidate. And I think that's why you saw him attacking Mitt Romney on the gay marriage issue. He needs to remind those evangelical voters that of all the people standing up there, he's the person they can depend on, on those cultural and social issues.

BLITZER: And I'll leave you with this little exchange between Newt Gingrich and Mitt Romney. Let me play this clip from the Thursday night debate.

(BEGIN VIDEO CLIP)

GINGRICH: I think Governor Romney deserves some of the credit for having helped figure out a way to make this thing work a little. So I think it's a nice thing to actually have a bipartisan plan in Washington that we can look at in a positive way, and hope would help save Medicare.

UNIDENTIFIED MALE: Governor Romney, do you want to respond to that compliment?

ROMNEY: Yes, thank you.

(END VIDEO CLIP)

BLITZER: A nice little exchange. It's going to get tougher though, I suspect in the coming days. Gloria and John, guys, thanks very much.

In Iowa, a victory not out of the question for Ron Paul if he goes the distance. Would he pick Newt Gingrich or Mitt Romney as a running mate? I'll ask him.

Plus, growth on steroids or a budget buster. Newt Gingrich's tax plan gets put to the test.

(COMMERCIAL BREAK)

BLITZER: The National Transportation Safety Board is calling for a nationwide ban on the use of cell phones and text messaging devices while driving. It includes hands free and hand held devices, but systems installed by the manufacturer would be allowed. The recommendation is drawing fire from civil libertarians, including the Republican presidential candidate Congressman Ron Paul.

(BEGIN VIDEOTAPE)

BLITZER: Should the federal government have a role in recommending when you can use your cell phone while driving?

REP. RON PAUL, (R) PRESIDENTIAL CANDIDATE: No. No way. I looked at Article 1, Section 8, they don't even say anything about telephones there. So, no. They shouldn't be doing that. That is really nitpicking away and if some state decides you shouldn't do it, they certainly have the authority to do that. But what if I came up with a statistic and could prove that eating in a car causes more accidents than using your cell phone? I tell you it goes on and on. Reckless driving, people who cause accidents, they're libel and responsible and should be punished for this. But this idea that the federal government's going to write a rule about whether we're going to use cell phones. And then force them maybe to buy certain type cell phone that is already in your car? That is more government than we need and one of the reasons why we're in such a mess.

BLITZER: We got a lot of questions for you. Because I asked our viewers on Twitter, Facebook if you have a question for Ron Paul. Here's one. "Would you consider Mitt Romney or Newt Gingrich as your vice president?"

PAUL: Probably not, not unless they change their ways, and change their beliefs and convince me of it.

BLITZER: You're doing amazingly well in Iowa right now. You're not surprised. A lot of the so-called pundits are pretty surprised. Can you tell us right now, do you think you will win the Iowa caucuses?

PAUL: I think I have a good chance. I'm not saying that -- I'm not working on a daily basis. I'm assuming I'm going to win this thing, no. I'm not at that point. But I'm assuming we're going to do very, very well and have a much better showing than anybody has given us credit for, for the past year.

BLITZER: Because if you do win Iowa, shakes up the situation going into New Hampshire, South Carolina, Florida pretty dramatically. You want to give us a name or two of someone you would consider as a possible vice president?

PAUL: Probably not today. I haven't thought it through. There are so many people that I know that would qualify. I would hate to pick one or two name out right now. But time will tell later on maybe.

BLITZER: One final question, Congressman before I let you go. The past I've called you an isolationist, but I get hammered by your supporters out there.

PAUL: Good.

BLITZER: They write to me and they say Ron Paul is not an isolationist. He's a noninterventionist. Tell our viewers right now, once and for all, the difference between an isolationist and a noninterventionist.

PAUL: An isolationist is a protectionist that builds walls around the country. They don't like to trade, they don't like to travel about the world. And they like to put sanctions on different countries. So some of the people who call me that, are actually much more in favor of sanctions and limited trade. They're the ones who don't want to trade with Cuba and they want to put sanctions on anybody who blinks their eye at them.

And, yet, the office is what we believe in. We believe Nixon did the right thing by opening up trade doors with China because that is when we quit killing each other. And that we are more at peace with them because we better be because they become our banker. So nonintervention is quite a bit different. It's what the founders advised to get along with people, trade with people, and to have -- practice diplomacy, rather than having this militancy of telling people what to do, and how to run the world, and building walls around our own country. That is -- that is isolationism. It's a far cry from what we believe in.

BLITZER: Just to be precise, you want to bring all U.S. troops home, not just from Iraq and Afghanistan, but from Germany, Japan, South Korea, every place else around the world. Is that right?

PAUL: Yeah. Because I believe in national defense and our first responsibility of the federal government is a national defense. And fighting these wars is not helping us. Getting bogged down in Afghanistan brought the Soviet Union to its knees. It's bringing us to our knees, too. We've been there 10 years. It's contributing to this huge deficit that we have.

Those wars over there have contributed $4 trillion worth of debt in the last 10 years. So, yeah, I want to bring them home. I think we'll be stronger for it. I think we'll have a stronger national defense and we will have a lot stronger economy. If we're serious about straightening up this mess, we have to deal with foreign policy, as well as monetary policy and fiscal policy and tax policy.

Ron Paul, running for the Republican presidential nomination. Congressman, good luck.

PAUL: Thanks a lot.

(END VIDEOTAPE)

BLITZER: Newt Gingrich comes out with a tax plan that is raising some eyebrows. We're keeping him honest with two top economists from both sides of the political spectrum.

Plus, the former New Jersey governor at the center of a billion-dollar scandal. He gets an earful from victims who lost all their savings.

(COMMERCIAL BREAK)

BLITZER: A new attempt this week by members of Congress to hold former senator, former governor, Jon Corzine accountable for more than $1 billion that are missing. This time lawmakers heard from customers from Corzine's failed brokerage firm MF Global. They had horror stories to share with all of us. Our own Lisa Sylvester has been following the story from day one.

It's heartbreaking to hear some of these stories.

LISA SYLVESTER, CNN CORRESPONDENT: That's right, Wolf. These were every-day folks impacted by MF Global's collapse, particularly farmers who used the brokerage firm to park money until they need it to buy seed for planting season. And when they put the money there, they weren't investing it or loaning it. It is like putting money in a bank account and they thought that money was untouchable. (BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: The truth, the whole truth, and nothing but the truth so help you God.

SYLVESTER (voice over): Dean Tofteland bought a new suit to come to Washington. He is a hog farmer from Minnesota. More accustomed to getting his hands dirty in the fields.

UNIDENTIFIED FEMALE: Mr. Tofteland, welcome.

SYLVESTER: Instead of hanging around Congress, but he's here testifying how MF Global's downfall has cost him big money.

DEAN TOFTELAND, FARMER, LUVERNE, MINNESOTA: Comingling money is stealing money, especially when it disappears.

SYLVESTER: Tofteland had about $250,000 with MF Global. $200,000 of that money is still missing. Part of about $1.2 billion in customer funds that are unaccounted for.

UNIDENTIFIED FEMALE: We will ask -

SYLVESTER: Senators on the Agriculture Committee hammered the top three executives at the now bankrupt MF Global including former CEO and former Senator Jon Corzine.

SEN. PAT ROBERTS, (R) KANSAS: Funds don't simply disappear. Someone took action, whether legal or illegal to move that money. And the effect of that decision is being felt across the countryside.

SYLVESTER: For the 38,000 MF Global customers who want answers, they never came.

SEN. DEBBIE STABENOW, (D) AGRICULTURE CHAIRWOMAN: Mr. St. Campus, as CFO, where's the where's the money?

HENRI STEENKAMP, CFO, MF GLOBAL: Senator, unfortunately, I do not know where the money is.

STABENOW: Who does?

STEENKAMP: Well, Senator, I wasn't, you know, part of my job was not to approve transfers of client funds.

STABENOW: Where's the money?

BRADLEY ABELOW, PRESIDENT, COO, MF GLOBAL: Senator, as I said in my statement, I do not know where the money is.

JON CORZINE, FORMER CHAIRMAN/CEO, MF GLOBAL: Um, it's clear that something was amiss and that needs to be discovered what that was.

SYLVESTER: All three MF Global executives said they did not knowingly OK the use of customer funds. CORZINE: I never directed anyone at MF Global to misuse customer funds. I never intended to, as far as I'm concerned, I never gave instructions that anybody could misconstrue.

SYLVESTER: Those answers were not satisfactory to MF Global's customers like David Rosen who had about $150,000 with MF global. He says the buck stops with Corzine.

DAVID ROSEN, ROSE TRADING: I would say that if he broke the law, he deserves to go to jail.

SYLVESTER: And farmer Dean Tofteland fears this could have a ripple effect throughout the farming community.

TOFTELAND: There are also a lot of people, a lot of mom and pops out there, that probably have their whole life savings tied up and lost and tied up here. So it is important we realize this affects a lot more people across the whole country.

(END VIDEOTAPE)

SYLVESTER: A commissioner with the CFTC, the regulator overseeing the case says the agency has tracked down most of the money and they know that the money was taken out of customer accounts and transferred to a subsidiary of MF Global. And now their investigation is focusing on whether the transactions were unlawful, Wolf.

BLITZER: What a pitiful, pitiful story. It's amazing, this fall for Corzine, too.

SYLVESTER: Yeah, you're talking he was a governor of New Jersey. He was a senator. He was the head of Goldman Sachs at one point. And now he's here testifying in front of Congress and having to answer these questions.

BLITZER: And I suspect there will be a lot more fallout from this. Lisa, thank you very much.

We've all heard of Herman Cain's 9-9-9 plan. Newt Gingrich has his own flat tax proposal. How will it impact you? We are asking tow top economists.

Plus, Pizza Hut, McDonald's and claims from a terrorist organization. What's going on here? Stay with us. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A new analysis of Newt Gingrich's tax plan is out. Gingrich wants people to be able to choose from the current tax code or a 50 percent flat tax. He also wants to cut the corporate tax rate 35 percent to 12.5 percent. The Tax Policy Center says about 70 percent of households would get a tax cut under Gingrich's plan with the lion's share going to the wealthiest Americans.

(BEGIN VIDEOTAPE) And joining us now, Robert Reich, professor at the University of California Berkeley, the former Labor secretary during the Bill Clinton administration. Also joining us, Stephen Moore of "The Wall Street Journal," senior economy writer.

Guys, thanks very much. Let's get right to the Newt Gingrich tax plans. You tell me good ideas, bad ideas? Let me start with you, Steve, first of all. He says he wants to cut the highest individual tax rate from 35 percent down to a flat 15 percent rate. Good idea or bad idea?

STEPHEN MOORE, SENIOR ECONOMICS WRITER, WALL STREET JOURNAL: Yes, I love the idea of a flat tax. You know, this is the old Steve Forbes flat tax idea although it's even lower rate. He would also make it an option so that people can stay in the old system or move into the new system.

And he also wants to cut the corporate tax rate to 12.5 percent, which would make, Wolf, the United States go from the highest tax rate country on our corporations to the lowest. I love it. I think it's very pro growth and will create jobs.

BLITZER: Robert Reich, what do you think?

ROBERT REICH, FORMER LABOR SECRETARY: I think it's totally nuts. I mean, already the highest income earners in this country who are getting a higher share of total income than they have in 80 years are already paying the lowest marginal tax rates they've paid in about 40 years.

To take those marginal tax rates down to 15 percent, I mean, you're going to blow a gigantic hole in the federal budget over $1 trillion in one year.

And on top of that, you know, the biggest beneficiaries according to the Independent Nonpartisan Tax Policy Institute, the biggest beneficiary, the lion's share goes to the wealthy of this tax cut.

You know, the people who are at the top 1/10th of 1 percent, earning an average of $8 million a year, get 25 percent of all of these benefits of this tax cut. This is absurd.

BLITZER: Let's get -- hold on, Steve. Answer the question, the Tax Policy Center, this group that did this study, they say it would create $1.3 trillion in additional deficit in one year if it went through.

MOORE: Yes, well, they're not looking, Wolf, at the spending side of the aisle. That's the other part of the fiscal plan that Newt Gingrich has. He wants to cut a lot of spending.

But the other thing that tax policy center doesn't look at, Wolf, is the idea that if you cut these tax rates and you make America the lowest tax rate country in the world, you'll get a lot of capital, a lot of jobs in this country. I think it actually will raise revenue. And Bob, where you are wrong is on the idea of the big tax cut for the rich because remember, the Gingrich plan gets rid of all of the loopholes, gets rid of all carve outs, and all the special interest provisions.

So now Warren Buffett and Bill Gates don't have anywhere to hide their money. Everybody's going to have to pay that 15 percent, no longer will Warren Buffett be able to pay lower than his secretary.

REICH: Well, the point is that nobody is going to have to -- if you're very rich, you don't have to worry about tax shelters anymore or loopholes because you're paying 15 percent.

In other words, you know, this is the same rate that the people who are secretaries and sanitation workers and people who are, you know, who are child care workers are paying.

You know, multimillionaires will be paying, at 15 percent, Steve, this is the most unfair, stupidest tax plan I've ever heard. And it just creates the gigantic hole in the tax budget. Again, this is the independent, nonpartisan tax policy center giving us these data.

I mean, this is -- this is taking supply side economics to a bizarre extreme. And nothing trickled down from the Bush tax cuts, we know that, most people got no benefits at all. And now what is Gingrich doing? Let's take the Bush tax cuts and magnify them 500 percent.

BLITZER: Hold on a second. He goes even further, Newt Gingrich, and says eliminate completely all capital gains taxes, all estate taxes, as well. You love that idea, don't you?

MOORE: Yes, this is a tax cut plan. It's on steroids in terms of economic growth. Imagine what this would mean for America's competitiveness and that's the big issue, competitiveness against other countries.

Let's just take the example of the corporate rate. If you can go from being the lowest corporate tax rate, you're going to bring jobs and businesses back to the United States.

You and I, Bob, talk a lot about the problem of outsourcing jobs. This is going to bring in sourcing jobs back for the United States.

REICH: Steve, look at history, I mean, we've had this gigantic Bush tax cut, we had no increase in competitiveness. Actually the median wage dropped. There was no trickle down. And on top of that, you say we need a corporate tax cut right now?

I mean, big corporations are sitting on $2 trillion of cash. They don't know what to do with the cash. You know, it's the problem is on the aggregate demand side. The problem is consumers are not spending.

I mean, this tax plan just gives more money to people at the top, creates a huge hole in the budget deficit. Creates more unfairness, this is the worst tax plan and believe me, I've seen some bad ones. This is the worst one I've ever seen. MOORE: That's what you said about Reaganomics. You didn't like the Reagan tax cuts and they actually led to more tax payments by the rich. They led to the creation of about 18 million jobs. I think that worked out pretty well. This is the next logical extension of Reaganomics.

REICH: Yes, Reaganomics. We can debate Reaganomics, Steve, but this is taking the Bush tax cuts, which were even worse than the Reagan tax cuts and it is basically -- I mean, look -- any rational person is going to look at this.

And look at the rational nonpartisan analyses both on the corporate side at the individual side in a time in our history when we have giant budget deficits.

At a time in our history when the rich have a higher percentage of total income and total wealth and we've seen in 80 years and they're going to say this is totally absurd! This is beyond absurd.

MOORE: You know what Americans think is totally absurd. Bob, they think the current tax system is totally absurd. They don't think it works for America because it's way too complicated, way too time consuming, and way to anti-jobs.

And I think one of the reasons Newt Gingrich is doing so well, he wants to blow up the tax system and start over and I give him a lot of points for doing that.

REICH: I give him negative points. I tell you. I'll give you a simple tax system that's based on progressivity. People at the top have paid the exact same marginal tax rates they were paying in the 1960s and 1970s when we had very, very good economic growth.

And that is if you're earning over $1 million, 70 percent marginal tax on everybody --

MOORE: Bob, you don't want to go back to 70 percent tax rates.

REICH: -- of over $1 million.

MOORE: No.

REICH: -- money over $1 million. And I'd link the capital gains to the same way. We get rid of the budget deficit. We'd have a fair tax system. We could lower everybody else's taxes. Steve, that's what we ought to do. It's exactly the mirror image. It's the opposite --

MOORE: If you want to go back to the '70s. I want to go back to the '80s and '90s.

BLITZER: Quick political question to wrap it up. First to Steve Moore, politically speaking, getting into an election, let's say Newt Gingrich has his flat tax 15 percent versus President Obama's got his own tax plans. As you know, who wins with the American public on that debate? MOORE: Well, Obama wants to go to 45 percent to 50 percent on the tax rate, Newt Gingrich wants to go to 15 percent. So you're talking about a massive difference in philosophy and governing philosophy, and I will say this. I think Newt wins that fight and I think that's what this election will be about. Do we want growth or do we want envy?

BLITZER: Robert Reich?

REICH: Well, look, and I think the election is going to be about paying their fair share. Are the wealthiest in this country paying their fair share to bring the budget deficit down and make sure that there is enough money left for schools and equal opportunity and investments and infrastructure for everybody else?

Steve Moore and Newt Gingrich want to go back to what we had pre-1930s when we had a very unequal society and a society that did not -- and was not able to invest --

MOORE: Bob, you keep saying rich aren't paying -- the top 1 percent pay 40 percent of the income tax.

REICH: Steve, I think most people understand what's really going on. They know there's no trickle down. They know there's no trickledown economics.

MOORE: They know we can't tax our way back --

REICH: They know the game is rigged in favor of the rich and powerful.

MOORE: That's why we're going to flat tax. We agree. That's why -- people gain the system.

REICH: No.

BLITZER: All right, gentlemen, I think we've -- we --

MOORE: Overall, rejected.

BLITZER: A good debate, a solid debate. I suspect we're going to be hearing a lot more on this debate in the coming weeks and months. Stephen Moore, thanks very much. Robert Reich, thanks to you as well.

Republican Mitt Romney met with Wall Street executives and the left quickly pounced on him, but are they being hypocritical? You're going to find out how much the Democratic president is also getting from big business.

Plus, the list is revealed by a terrorist group Hezbollah and it could put some American lives in real danger.

(COMMERCIAL BREAK)

BLITZER: The Republican presidential candidate Mitt Romney filled his campaign coiffeurs this weekend on Wall Street, which is an equal opportunity piggy bank for Democratic and Republican candidates alike. CNN's Mary Snow takes a closer look at big business's ties to both parties.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): As Republican presidential hopeful, Mitt Romney tapped Wall Street donors for campaign cash, Democrats took to the skies over New York, targeting him.

They paid for an airplane banner to remind everyone of a $10,000 bet Romney made against Rick Perry at the last Republican debate.

As Democrats try to portray Romney as ouch touch, progressives like moveon.org seized on Romney's visit calling him the poster child for Wall Street and the 1 percent.

The Romney camp dismissed it as the White House being scared of facing Romney in the general election. Senior political analyst, David Gergen, says Democrats targeting Romney solely for raising Wall Street contributions is hypocritical.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Barack Obama raised tons of money out of Wall Street the last time around and he's going to raise some money this time. Wall Street has turned more hostile towards the president since he's been at the White House, but it's natural that Mitt Romney will go there.

SNOW (on camera): When it comes to campaign cash from Wall Street, so far, Mitt Romney is leading with $3.8 million to $1.7 million for Barack Obama. And take a look at Goldman Sachs. Back in 2008, Goldman Sachs was one of the top contributors to the Barack Obama campaign. So far, Mitt Romney getting about $367,000 from Goldman Sachs employees to $50,000 for Barack Obama.

(voice-over): Those numbers are compiled by Sheila Krumholz's nonpartisan group, the Center for Responsive Politics. She says in the 2008 election, the finance sector was the fourth largest donor to Barack Obama's campaign.

And while many in the financial world complained about being portrayed as villains, Krumholz says Wall Street donors are not strangers to the Obama campaign this time around.

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: They are also hosting fundraisers and trying to draw in donors from Wall Street. They have a number of Wall Street representatives on their volunteer bundler list.

SNOW: One of those listed as a bundler fundraiser is Democrat, Jon Corzine, former head of Goldman Sachs, former New Jersey governor and U.S. senator who's now being questioned about an estimated $1.2 billion missing from his former firm, Mf Global Holdings.

(END VIDEOTAPE)

SNOW: An Obama campaign official says Corzine is not currently fundraising for the campaign. And that has been made clear that if Corzine or any other MF Global employees are charged with wrongdoing, their contributions will be returned. Mary Snow, CNN, New York>

BLITZER: After a long and excruciating wait, a rape victim jailed in Afghanistan is now free thanks in part to our efforts here at CNN. She's speaking out about what really happened. We're going to Afghanistan to get the story.

Plus, have you seen this, the new building project that's bringing back memories of 9/11.

(COMMERCIAL BREAK)

BLITZER: A new blow to America's spy operations in the Middle East. The militant group, Hezbollah, claiming it has exposed the identities of 10 CIA officers. Brian Todd has been looking into this story for us. Brian, what you are finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, some experts including a former CIA officer we spoke with believed this is now a full-fledged covert war between the U.S. and Hezbollah and by extension with Iran.

If Hezbollah's latest claims are true, the group which the U.S. calls a terrorist organization may have just made a damaging strike against American intelligence in a very crucial place.

(BEGIN VIDEOTAPE)

TODD (voice-over): With polished graphics, silhouetted images and ominous music, Hezbollah ratchets up the war with the U.S. In a broadcast on the Lebanese Network, Hezbollah reveals the names of 10 people who it says were CIA officers working at the U.S. embassy in Beirut in recent years.

It includes the name and date of birth of someone it says is the CIA station chief. CNN is not airing that name. The CIA would not confirm or deny if the video is accurate. A spokeswoman said the agency does not as a rule address various claims from terrorist groups.

I think it's worth remembering that Hezbollah is a dangerous organization with a propaganda arm. That fact alone should cast some doubt on the credibility of the group's claim.

Bob Baer is a former CIA officer who served in Beirut, was involved in operations targeting Hezbollah. I asked him if he found the claims credible.

ROBERT BAER, FORMER CIA OFFICER: I assume it's correct. I think I understand how Hezbollah compromised the CIA there. They used telephone link analysis. So, you know, once you tie one phone in to another phone, you can pretty well identify a station.

TODD: In the video, Hezbollah even produces animations, re-creating meetings it claims occurred at places like McDonald's and Pizza Hut between CIA agents and their recruits. (on camera): None of that can be verified, but Baer says Hezbollah has eyes and ears all over Beirut from the area near the U.S. embassy to the airport, the defense ministry and to parliament where the group holds seats.

(voice-over): These new claims come after Hezbollah partially unravelled the CIA's operations in Lebanon capturing some informants. Hezbollah has been a bitter enemy of the CIA's since the 1980s, blamed for bombing the U.S. embassy and the kidnap and murder of CIA Officer William Buckley.

U.S. officials say the group gets weapons, training and money from Iran. This is Reuel Gerecht, a former CIA officer who tracked Iran's operations in Europe and the Middle East.

(on camera): Who do you think has the upper hand right now in the covert operations side between the U.S. and Iran?

REUEL GERECHT, FOUNDATION FOR DEFENSE OF DEMOCRACIES: Well, I mean, I think the Iranians really always have the upper hand in any type of covert engagement because they do it all the time. The Iranians have a very active covert paramilitary program. The Quds force or the Revolutionary guard core really does go around the world and kill people.

(END VIDEOTAPE)

TODD: Now, on Hezbollah, one U.S. official who didn't deny Hezbollah's claims to have identified American intelligence officers said, quote, "repeating Hezbollah's claims does nothing, but serve that group's interests, making things harder for Americans in Beirut.

This official said no one is giving up against Hezbollah, pointing out that group has killed more Americans than any other terrorist group except al Qaeda -- Wolf.

BLITZER: What kind of technical capabilities does Hezbollah have in Lebanon?

TODD: Bob Baer who tracked Hezbollah for years in Beirut says incredible technical capabilities. He says they can hack into most computers. They can do wiretapping phones. They can even monitor drones in the sky. They're very impressive. He says they learned, of course, most of it from Iran.

BLITZER: Brian, thanks very much.

It's a story that prompted outrage around the world, a young woman raped and then thrown into prison for adultery. We've been following this story from Afghanistan for weeks as only CNN can do.

CNN's Nick Paton Walsh first brought us this horrific tale and now there are important new developments.

(BEGIN VIDEOTAPE) NICK PATON WALSH, CNN CORRESPONDENT (voice-over): Jailed for adultery because the man who raped her was married, mother to the child of her attacker whom she's been pressured to marry.

Gulnaz's plight highlights just as it is suffered by many Afghan women, but late Tuesday night, after a pardon from Afghan President Hamid Karzai, she was released to a woman's shelter in Kabul.

These are the first pictures of her a free woman with her daughter who's named Muzcan means smile, a little confused about where they are, but delighted their lives have changed.

GULNAZ, RAPE VICTIM (through translator): I am very happy that President Karzai understood my pain and heard had my voice after I did the TV interview, and he pardoned me.

WALSH (on camera): Her case has brought controversy some conservatives in society questioning whether or not she was raped and there is pressure for her to marry her attacker traditionalists who think it will help absolve her family from the dishonour of her assault. So we asked her if free to talk if she was rape.

GULNAZ (through translator): Yes, he did. Yes.

WALSH (voice-over): And if she had complete choice, would she marry her rapist?

GULNAZ (through translator): No, if I don't have to. I would not even care about him. I hate him. The only thing I want is to go home from are here to my brothers and live with them. That's all I want.

WALSH: But rape still carries stigma. Even her brothers have found it hard to accept her daughter.

GULNAZ (through translator): When my brothers used to visit me, they would ask me to not to bring the child to them because they did not like her.

But I always told them she was my daughter and had nothing to do with the man. I love her like I did at the start. I want her to be well- educated and don't want her to be illiterate. I want her to be a doctor or anything she could become.

WALSH: Her pardon a bold step by President Karzai, setting a precedent for the dozens of others on similar charges her lawyer said.

KIM MOTLEY, GULNAZ LAWYER: I think this is huge. I think this is definitely setting precedent for Afghan women that are in a situation such as Gulnaz. I think the government has definitely recognized that what happened not only outside the justice system was incorrect but what that happened within the justice system was incorrect.

WALSH: The future's unclear. Her brothers may not be that welcoming. She may still face pressure to marry. But she's free in a women's shelter who can help her understand the risks and hurdles ahead, and able to give the baby many more choices for their future. Nick Paton Walsh, CNN, Kabul.

(END VIDEOTAPE)

BLITZER: For the United States, the war in Afghanistan started because of the 9/11 attacks. Now a new building project is reminding people of that terrible day. We'll tell you where you might soon see these towers.

(COMMERCIAL BREAK)

BLITZER: A storm of controversy is building over the design of two skyscrapers in South Korea. Does it mock the events of 9/11? Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): It's not even built yet, but already there's a cloud over this proposed building in South Korea because some say it reminds them of a cloud of smoke.

(on camera): Does this remind you of anything?

UNIDENTIFIED MALE: Yes, 9/11. I think it's in very poor taste.

MOOS (voice-over): In fact, almost every person --

UNIDENTIFIED FEMALE: My gosh.

MOOS: We showed the architect's rendering to --

UNIDENTIFIED MALE: Shivers just went up my spine.

MOOS: -- associated it with 9/11.

UNIDENTIFIED MALE: This is it an outrage. I survived the towers and this actually looks like the explosion of the towers.

MOOS: Ed Walker was walking by the towers when the first plane hit. He ended up wet with jet fuel. A Dutch newspaper fuelled this controversy by plastering the proposed building on its front page with a question, inspired by Twin Towers?

No way, says the Dutch architectural firm MVRDV. We never intended to design a project looking like an exploding building, why on earth would we? This is quite shocking in this discussion that people they we might have done this on purpose. No!

UNIDENTIFIED MALE: I think somebody has this mind when they designed it. I don't think this is an accident.

MOOS (on camera): Really?

UNIDENTIFIED MALE: Do you?

MOOS: But who would do that?

UNIDENTIFIED MALE: PR. You're talking about their building.

MOOS (voice-over): Folks are talking, all right and for once the left --

UNIDENTIFIED MALE: Yes, that's what they want to build.

MOOS: -- Keith Olbermann.

UNIDENTIFIED MALE: Change it, you look like ghouls.

MOOS: And the right, Glenn Beck, sound alike.

UNIDENTIFIED MALE: This is the most offensive building I have ever seen.

MOOS: The so-called cloud would actually connect the two luxury apartment buildings and contain restaurants, a wellness center, pools.

UNIDENTIFIED FEMALE: That's really nice. They should do it.

MOOS: She and an engineer were the only ones who we talked to who defended the project.

UNIDENTIFIED MALE: This is typically what an architect does. They wanted to do something different.

MOOS: An online defender compared comparisons to the Twin Towers to seeing Jesus on a piece of toast.

(on camera): The architects say they envisioned a cloud, a cloud in the sky, a nice, fluffy innocent clouds.

(voice-over): This image represents the inspiration for their design. The architects apologize to anyone be whose feelings we have hurt.

UNIDENTIFIED MALE: I don't know what think were thinking.

MOOS: During the three-month design process, the architects say they did not see the connection. Somebody's head is in the clouds. Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching. I'm Wolf Blitzer. Join us weekdays in THE SITUATION ROOM from 4:00 to 6:00 p.m. Eastern, every Saturday at 6 p.m. Eastern right here on CNN and at this time every weekend on CNN International. The news continues next on CNN.