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CNN Saturday Morning News

President Obama to Name New Chief at Pentagon; Will Lance Armstrong Admit to Doping?; Gabby Giffords Visits Newtown; Upcoming Budget Battle

Aired January 05, 2013 - 09:00   ET

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

RANDI KAYE, CNN ANCHOR: Good morning, everyone. I'm Randi Kaye.

VICTOR BLACKWELL, CNN ANCHOR: And I'm Victor Blackwell. It's the top of the hour and it's a pleasure to be with you this morning.

KAYE: President Obama may be ready to name a new chief at the Pentagon. Sources tell CNN that the president is likely to nominate Republican Chuck Hagel as defense secretary next week. Hagel is a former senator from Nebraska who retired in 2009. The president has called Hagel a patriot who is doing an outstanding job as a member of the White House intelligence advisory board. But some critics have blasted Hagel over a lack of support for sanctions against Iran and for opposing the surge of troops in Iraq under the Bush administration.

BLACKWELL: And now to a possible mea culpa from Lance Armstrong. "The New York Times" is reporting that he is contemplating publicly admitting that he used illegal performance-enhancing drugs. "The Times'" sources unnamed associates and doping officials in its report. But Armstrong's attorney tells CNN that his client is not in talks with the U.S. or any other doping agencies. Throughout the years, Armstrong has repeatedly denied that he used banned drugs.

The FDA wants your input on two new rules it says should drastically cut down the cases of food poisoning by as many as a million cases a year. The proposed rules focus on how farms here and abroad process produce. They also set standards on how food is handled. Now the CDC says one out of six Americans get sick from a food-borne illness every year, leading to about 128,000 hospitalizations and about 3,000 deaths. The public has until spring to comment.

KAYE: And this just in. Reuters news agency reporting that famed Italian designer, Vittorio Missoni and his wife were aboard a small plane that has disappeared off the coast of Venezuela. Italian media say the plane went missing Friday morning shortly after takeoff. Officials say the Missoni family has been informed. CNN is working to confirm the details. So we'll keep watching that for you.

Newtown, Connecticut, got a special visitor yesterday. Former Congresswoman Gabby Giffords. She went with her husband, Mark Kelly, speaking with local officials about gun control and mental health issues. Giffords was shot in the head two years ago this month by a man who had been diagnosed as schizophrenic. She left her position in Congress last year to focus on her recovery. BLACKWELL: President Obama has one temporary battle down, but the problems keep stacking up. Now Congress is getting warmed up to battle it out over the budget and how to solve the debt ceiling crisis. Well, one congressman thinks minting a $1 trillion coin can save the day. Here is Brian Todd with that.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): The president says he won't negotiate with Congress over lifting the debt ceiling.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I will not play that game.

TODD: Republicans say -

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The president may not want to have this debate but it's the one he's going to have because the country needs it.

TODD: So while they debate over the debate and race headlong into the debt ceiling, is there a magic bullet to solve the crisis? Try a magic coin. Some economists, legal scholars and now even a congressman are suggesting a $1 trillion platinum coin could be minted and the government could use that to pay the debt, avoid default and preempt the debt ceiling crisis.

Democratic Congressman Gerald Nadler of New York says "I'm being absolutely serious. It sounds silly but it's absolutely legal." I spoke to economist Joe Ganiong.

(on camera): Why do you think it's a good idea right now?

JOE GAGNON, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Well, I think it's better than government shutdown. It's better than defaulting on the debt. I mean it's better than the bad alternatives.

TODD (voice-over): And technically, it does appear to be legal. Here's how.

(on camera): The U.S. government can print new money but under law there's a limit to how much paper money can be in circulation at any one time. There are also rules that at least limit the denominations that gold, silver and copper coins can be, but there is no limit on platinum coins. The president can issue a platinum coin in any denomination. Treasury can mint it and then just print on it $1 trillion. The president can then order that coin to be deposited at the Federal Reserve.

(voice-over): Then says Gagnon.

GAGNON: And the Fed would credit the treasury's account. So when the Treasury writes checks to pay people, the fed will cash them.

TODD: And that money would never be in public circulation, so some believe it wouldn't cause inflation, but Gagnon says it will only temporarily pay America's bills, not bring down its massive debt long term. That's also some conservatives argument against it.

STEPHEN MOORE, "WALL STREET JOURNAL" COLUMNIST: I think this is waiving pixie dust over the debt and pretending that the debt is going to go away by this, which I view as just another one of these Washington gimmicks. Minting new coins isn't going to do anything about dealing with that fundamental problem.

TODD: And what if the coin got stolen? Remember this from Dr. Evil?

MIKE MYERS, "DR. EVIL", "AUSTIN POWERS": If you want it back, you're going to have to pay me $1 million.

TODD: Apparently then the government could just mint another one. By the way, none of this requires congressional consent. We've tried to see if this is something the president would actually consider. The White House hasn't gotten back to us.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

KAYE: Well, we've been talking this morning about Hugo Chavez's health. Certainly in failing health right now. How will this all affect the inauguration upcoming? We'll speak with Rafael Romo about it.

(COMMERCIAL BREAK)

BLACKWELL: let's go to Washington now. We have survived the fiscal cliff, yes. But are you ready for the Capitol Hill showdowns that are coming? We're talking within weeks. Let's turn to CNN political editor Paul Steinhauser for what's ahead in Washington. Paul, it seems like we're just hopping from cliff to cliff to cliff. Which cliff is next?

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Victor, if this was a football game, I guess the agreement just in the last couple of days to avert the fiscal cliff, that was just the first quarter. Take a look at the second, third and fourth quarters. You're right, they're coming up really quickly. First up, the debt ceiling. Remember that is still out there. We still have to deal with the debt ceiling probably in late February, early March. So you're going to see negotiations start over the debt ceiling almost instantly.

But wait, there's more. What about the sequester, those budget cuts? That was really kicked down the road from this agreement. They only kind of did a two-month delay. So starting on March 1st, you're going to have the same budget cuts and spending cuts that you're going to have to deal with. And wait, there's more. You want more? Here is the fourth quarter, funding the federal government, funding before the government runs out on March 27th.

There you go. Another fight between Democrats and Republicans, a lot ahead Victor.

BLACKWELL: I was hoping we could stop using the word cliff. It seemed like every seventh word out of my mouth was cliff. So what else is in the spotlight?

STEINHAUSER: Yes, there's a couple of things, a couple of big things on the president's to do list. I guess you could say besides all these financial and budget issues. First up, gun control. Of course after the tragedy in Newtown, Connecticut, the shootings at the elementary schools, Sandy Hook up there, there's now a new push by the president on gun control. You know, the vice president right now is leading a task force. It's supposed to come out with recommendations this month on what to do.

Also, just in the last two days with the new Congress, we saw some new bills being introduced. So expect gun control to be a huge issue right here in Congress - with the White House in the next couple of months. Immigration reform, Victor. You heard the president right after his re-election back in November at his news conference he said he wanted to try to tackle immigration reform. He tried to tackle it in the first term but didn't get very far. But maybe this time will be different. Why? You go back to that November election, the president overwhelmingly won the Latino vote. And I think a lot of Republicans are now saying it's now time to play ball on immigration reform. Victor?

BLACKWELL: So, the presidential election is over. We're a couple of months out from that. There is now more action on the campaign trail. Explain this.

STEINHAUSER: Yes, really, everybody says, the year after presidential election, there's nothing. Well, it won't be the smorgasbord that we had last year but there are a couple of elections that are going to keep people across the country very interested. Let's start up in New Jersey, Chris Christie, the Republican governor up there, the tough- talking guy who everybody looks to. Well, guess what? He is up for re- election this November.

So New Jersey's gubernatorial election will be interesting for the whole country to enjoy. Virginia is the other state that always had a gubernatorial election the year after a presidential. That should be a fascinating, entertaining fight as well. And finally, remember, Senator John Kerry of Massachusetts probably soon to be secretary of state John Kerry. That means there will be a special election, most likely in June in Massachusetts, to fill his seat.

Well former Senator Scoot Brown run for Senate again? Stay tuned Victor, there will be a special election to fill his senate seat. Stay tuned, Victor. We got a Lot of campaign politics ahead.

BLACKWELL: Congressman Barney frank says that he will possibly be, kind of a sit-in in that in between time. We'll see if that happens.

Paul Steinhauser in Washington. Thank you for that.

STEINHAUSER: Thank you.

KAYE: And just a quick note for those of you heading out the door, you can continue watching CNN from your mobile device. Or if you're heading to the local coffee shop, you can also watch CNN live from your laptop. You don't have to leave us behind. Just go to cnn.com.

BLACKWELL: Just ahead, new details on the health of Venezuelan President Hugo Chavez. We'll have a live report.

Also, with popularity of Washington lawmakers so, so low, does the 113th Congress have a prayer of winning back the American confidence? Our political panel weighs in.

(COMMERCIAL BREAK)

KAYE: Time to talk politics and the new Congress here at 15 minutes past the hour. There is hope with nearly 100 new congressmen coming to Washington that things may be different this time around. We are focusing on the broken system this morning and the hopes of a fix.

Joining me now as they do every week, CNN contributor Maria Cardona and Amy Holmes, anchor of "Real News" on the blaze. All right. Let's start with something that hasn't change. First of all, happy new year to both of you.

MARIA CARDONA, CNN CONTRIBUTOR: Happy new year to you, Randi.

KAYE: One thing that hasn't changed is John Boehner, still speaker of the House. He won the vote this week. But it wasn't a slam dunk. So Maria, big mistake by Republicans, leaving Boehner in charge or what?

CARDONA: Well, I actually think that they kind of like having somebody that they can control, Randi. He's clearly a weakened speaker. And we saw that during the fiscal cliff negotiations. There were several Republicans who voted, basically a protest vote, who voted even for Allen West, whose not even there, and several others.

But I think at the end of the day, no one really thought that his speakership was threatened. Mainly because I think two things. The first one is no one is lining up for that job, Randi. It's probably one of the worst jobs to have in the country. And, secondly, I really do think that they like having somebody that, frankly, they can control. It's sort of a wag the dog situation, I think. And going into some of the really key negotiations that we're going to have to go into in the next couple of months, they want somebody that is probably weaker, that they think they can control.

KAYE: Yes, and Amy, two weeks ago I asked you if Boehner was in jeopardy and you just kind of smiled and you said "No." You were right. But do you agree? I mean has he lost some power? Is he weakened?

AMY HOLMES, ANCHOR "REAL NEWS" ON THE BLAZE: Well, I think John Boehner and his announcement this week that he would no longer be having one on one negotiations with President Obama, that that was a concession to the conservative -- more conservative wing of the Republican Party and Tea Partiers. But lost in all of this fiscal cliff discussion is the fact that John Boehner actually came out of it ahead.

He initially offered President Obama $800 billion in new tax revenue, in closing loopholes. After all the dust was settled, President Obama came away with less. $670 billion, because he was so insistent on raising that top rate. So only in Washington, D.C. is John Boehner the loser in a negotiation where he came out ahead.

KAYE: Well, let's talk about who won and who lost. Maria, what about the fiscal cliff deal? Only part of it was settled, the spending cuts, the sequester, as it's called, being delayed now for a couple of months. So who do you think won? Who do you think came out ahead?

CARDONA: Well, I actually think the American people came out ahead. And all of those American families, 98 percent of Americans and 97 percent of small businesses, whose taxes are not going to go up, thanks to that last-minute deal. Let's remember that this president and Democrats have never walked away from a negotiation, have never walked away from the prospect of a grand bargain. Speaker Boehner has now done that twice.

And I can tell you, Randi, I'm sure Republicans are kicking themselves when a year and a half ago they could have taken a deal that would have included $3 of spending cuts for every dollar of revenue increases. And what they got in this fiscal cliff is certainly not something that they're happy about. It is a very good deal for the American people. And I think President Obama and the Democrats and Biden, and I think Mitch McConnell also deserves a lot of credit, as do senate republicans who overwhelmingly voted for this deal.

KAYE: Yes, well, I think a lot of people, though, certainly didn't like how it played out and all the bickering going on in Washington.

CARDONA: No question about that.

KAYE: Can we really hope that this time around, with the 113th Congress, it's going to be any different? The last Congress, the worse ever. So will anything get done with the fresh new faces in the mix?

HOLMES: Well, I think that depends on all of the parties involved. And after the midterm election, President Obama unlike President Clinton did not tack to the center to try to craft legislation and compromise with the other side.

So I think moving forward, you know, a lot of it depends on the president of the United States, his leadership, his agenda, a democratic-controlled Senate and how they're going to move forward. Let's remember the Senate never even passed a budget. So are they going to be able to come to the table and sort of put their cards on the table on how they want to move forward for the American people?

The president promised immigration reform in his first year in office and he kicked that can down the road. Is he going to try to, you know, let Republicans, dangled on that issue to try and get as much political, you know, benefit out of it or is he really going to try to tackle the problem. I think that these are questions that the American people really want to have answers.

KAYE: And if you look at the face of Congress, Maria, in terms of the women in congress, 98 now. 78 in the House. 20 in the senate. Still not an accurate correlation, of course, with the American public but it's getting better. Does it give you hope?

CARDONA: It does give me hope, Randy. Because I think as we continue to see a Congress that has more representatives of what America now looks like and we saw for certain, what those changes in America, the effect they have on American politics this last election, with the record number of women being elected to Congress, a record number of Latinos being elected to Congress, I think the more that our leadership and our leaders as they craft the laws that affect this country, the more they actually represent what the country looks like, the better it is for this country because the more they understand what this country is going through.

KAYE: Let me give Amy the last 30 seconds here to respond.

HOLMES: Well, I certainly celebrate diversity and having a Congress that reflects the wishes and goals of the American people but frankly I'm much more interested on what goes on in their cranium than other parts of their anatomy or skin color. I think that's what's really important.

KAYE: All right. We're going to leave it there. Amy Holmes, Maria Cardona, I like it. I like it a lot. You came out to play today. Thank you both very much.

CARDONA: Thanks, Randi.

KAYE: Coming up, next hour. More on the house of cards? We'll talk to a pair of House veterans to get their take on the current state of affairs and a hope for a more civil future.

BLACKWELL: Up next, Hugo Chavez suffering new health complications. Will it affect his ability to take the oath of office next week and a special surprise from a sergeant/super hero, home from war.

We'll explain.

(COMMERCIAL BREAK)

KAYE: Welcome back, everyone. And a big good morning to Washington, D.C. beautiful shot there of the White House. Little activity. Looks pretty windy, judging from those flags. And the lights are on. If you see there, right to the left of the front door there. So they're doing business at the White House this morning.

Sources tell CNN that President Obama is likely to nominate Republican Chuck Hagel as defense secretary next week. Hagel is a former Republican senator from Nebraska, who retired in 2009 who now sits on the president's intelligence advisory board. Hagel is facing opponents who say he has been against sanctions to weaken Iran and that he is not supportive enough of Israel. Fellow Republicans have also criticized him for anti-gay comments he has made in the past. He has since apologized for those.

The coastline of Alaska had a rude wakeup call early 7.5 magnitude earthquake that hit off the southern coast of Alaska. Officials sent tsunami warnings shortly after the quake but they have now they've been canceled. There has been no damage reported.

BLACKWELL: And overseas, Venezuelan officials say that President Hugo Chavez has a severe lung infection and is, "fighting for his health." The controversial leader is now in Cuba, where he went for his fourth cancer operation last month. Now his fragile health is casting doubt on whether the 58-year-old will be able to be inaugurated next week.

Senior Latin American affairs editor Rafael Romo, joins me now. So as I said, historically, the Venezuelan government is pretty tight lipped. They are just saying that he's fighting for his health. We haven't seen video of him. If he doesn't take this oath, does he still become president?

RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: He can still become president. What we have seen in the last 24 hours or so, is the vice president Nicolas Maduro, opening the door for the possibility of interpreting the constitution in that respect in a very flexible way. What do I mean by that?

Well, number one possibility is extending the period - supposedly he needs to be sworn in by January 10th, and one possibility is delaying this process for as long as 90 days to give Chavez time to recover. Another possibility is the Constitution says that he can sworn in in front of the Supreme Court of Venezuela. So that's a possibility. What it doesn't say here is if it has to be in Venezuelan soil or whether he can even do that in Cuba.

Now the one thing that has caught my attention in the last, I want to say 48 hours or so is that Venezuelan official are now, in spite of what you said before, that they are very tightlipped about his condition. Now, they're talking about specific medical terms. They're talking about respiratory insufficiency, respiratory failure. They're talking about a lung infection. So that, to me, says that his condition is more serious than previously thought.

BLACKWELL: But previously thought and they've never said what type of cancer the man has and we're not sure how sick he is.

ROMO: Exactly. But if he was in any good condition you can bet your bottom dollar that Mr. Chavez would be in Venezuela right now getting ready for elections. Now today is a crucial day. They are trying to choose a new leader of the national assembly, which may or may not be a Chavez loyalist, by the name of (INAUDIBLE), who currently holds that position. And that's important because if the Chavez loyalists retained power of the national assembly, they can basically set the rules of the game, so to speak. They can decide if they postpone or if they delay the swearing in ceremony to accommodate the timeline by President Chavez.

BLACKWELL: So what, then, will be - if Chavez is not inaugurated or if this turns out to be the worst possible case for him healthwise, what are then the effects for the U.S., for the world, for gas prices, or anything like that?

ROMO: Well, for the average American, Venezuela is an extremely important country because we get about - Venezuela is the fourth largest supplier of oil to the United States.

Now, Canada, Mexico and Saudi Arabia could, if needed, supply what would be lacking from Venezuela. But in any case, instability in Venezuela -- we have seen that in the past -- can make oil prices fluctuate and that would hit directly the pocket of America. So it's not a good scenario in any case for Americans or for Venezuelans.

BLACKWELL: All right. Rafael Romo, thanks. Randi?

KAYE: Well, finally, Sergeant Jason Reynolds of (INAUDIBLE) North Carolina, recently came home from Afghanistan on emergency leave to witness the birth of his daughter. He knew he had to do something to make sure his other child, Noah, would feel important with a new baby around. And, boy, did it work.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Spiderman.

UNIDENTIFIED FEMALE (voice-over):" Three-year-old Noah Reynolds was thrilled when Spiderman jumped into his backyard. But when the masked crusader pulled off the mask, he was stunned.

UNIDENTIFIED MALE: Daddy!

UNIDENTIFIED FEMALE: But not for long. He quickly realized it was his dad, Sergeant Jason Reynold.

UNIDENTIFIED MALE: He surprised me. Daddy, you surprised me.

(END VIDEO CLIP)

KAYE: So cute. That was from CNN affiliate, WTVD. Unfortunately Sergeant Reynolds just missed his daughter's birth. But all was not lost. He said he is pretty sure his son thinks that he's actually Spiderman, which pretty much makes him the coolest dad ever.

Well, thanks so much for watching today. I'll see you back here at the top of the hour.

BLACKWELL: "YOUR BOTTOM LINE" starts right now.