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Payroll Tax Cut Extension Fight; Explosions Kill Dozens in Iraq; Inside the DMZ; D.C. Central Kitchen Feeds Community; Severe Storms Hit The Southeast; Tax Fight Divides Republicans
Aired December 22, 2011 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUZANNE MALVEAUX, CNN ANCHOR: It's the top of the hour. I'm Suzanne Malveaux.
I want to get you up to speed.
President Obama is upping the ante in the high-stakes political fight affecting your paycheck. He was supposed to go before the cameras, the mikes, in just a few minutes to call on Congress to extend the payroll tax cut. Well, that's been pushed back a little bit to the next hour. We'll be following that live.
House Republicans have refused to go along with a temporary two-month extension that was approved by the Senate. Well, today, Speaker John Boehner made another push for negotiations on a one-year extension.
The clock is ticking. The payroll tax cut expires December 31st.
What does this means? It means higher taxes for 160 million Americans if there's no extension. So, for a family making $50,000 a year, it means about $40 less in each paycheck, a figure the administration is trying to hammer home.
Our team is standing by to talk about what is at stake for you, your finances, as well as the political players involved. Wolf Blitzer in Washington; Dan Lothian at the White House; Kate Bolduan on Capitol Hill; and Alison Kosik at the New York Stock Exchange.
Want to start off with my colleague Wolf on the political stakes of the showdown.
Let's talk about this, Wolf. This is less than two weeks away from the Iowa caucuses. This is a president who has to win on the state of the economy going into the 2012 re-election.
What does he need to say when he goes before the cameras?
WOLF BLITZER, CNN ANCHOR: He has to make point that he's trying to do the best he can for the middle class, 160 million Americans who are working right now who would get a tax increase automatically on January 1st if Congress -- that just doesn't mean the Senate, but the House of Representatives as well -- doesn't approve an extension of the payroll tax cut. So he's got to make the point, he's going to try to put a lot more pressure on House Republicans. The problem from the White House perspective is not the Senate Republicans. Mitch McConnell, the Senate minority leader, most of the other Republicans in the Senate, they're on board on this compromise two-month extension during which they'd be able to continue negotiations to keep that tax cut going for the rest of the year. The problem is with the Speaker and with the Republican leadership of the House of Representatives.
They don't want a two-month deal. They say that's too complicated, wouldn't really work, would set matters back. They want a one-year extension -- that's what they're working on -- and they say there is a formula to do it. Just get members of the House, members of the Senate, so-called conferees, together this week and next week, work out a new compromise, get the president to support it. They'll get a one-year extension, and that will be that.
MALVEAUX: All right, Wolf. Stand by.
The White House says that a two-month extension of the payroll tax cut is going to keep middle class Americans from getting hit with these smaller paychecks nine days from now. So we're going to wait for the president's remarks.
But I want to bring in Dan Lothian.
Because, Dan, you and I, we're used to seeing this kind of stagecraft during a campaign. But the White House now is taking this argument to a whole other level.
You've got that tax countdown clock. You've got the Twitter campaign. He's rolling out these families who potentially are going to be hurt by this tax increase.
What do we expect to see and why is this so important to the president?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, it's very important for the president because he believes that middle class Americans have been hurt very much by the downturn in the economy, and he wants to provide some relief. He also believes that in addition to just helping individual Americans, it could potentially hurt the economy, which is shaky already. It could set back some of the gains that have been made if in fact this two-month extension is not agreed to.
So, as you pointed out, the president trying to apply more pressure on House Republicans by bringing in those who are directly or say they'll be directly impacted by losing $40 in each paycheck. And I can tell you, we saw a shot from that room. There are a lot of families, individuals, inside that room.
Some of them have actually sent in to the White House blog or even tweeted about what they could use that $40 for, whether it's to pay for school lunch, whether it's to buy medicine, whatever it might be. They've been tweeting about it. The White House saying that they've gotten more than 30,000 tweets with that hashtag of "$40," and the president will be highlighting that today, in addition to putting pressure publicly on House Republicans.
MALVEAUX: All right, Dan. Stand by.
It's not just a battle between the White House and the House Speaker, it is really turning into a fight within the Republican Party. Senator John McCain says Republicans now are paying the price.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: It is harming the Republican Party. It is harming the view, if it's possible anymore, of the American people about Congress. And we've got to get this thing resolved, and with the realization that the payroll tax cut must remain in effect.
(END VIDEO CLIP)
MALVEAUX: I want to bring in our congressional correspondent, Kate Bolduan, from Capitol Hill.
And Kate, as the senator noted, this is Republican versus Republican now. And Senate Republicans who are pushing to pass this tax cut extension as is, and then you've got the House Republicans. They want to continue the negotiations.
What are they doing now? Are they talking to each other, past each other? Do they think they can get this resolved?
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Well, in terms of House Republicans and Senate Democrats, the main people involved, they're still talking past each other, but a couple important developments today, so far, I'll tell you.
We know that House Speaker John Boehner, he came out in another media availability to say -- really kind of saying what he has said all along, kind of staking his position still that this two-month extension, they are opposed to a two-month extension, and that Senate Democrats should come to the table and start negotiating a one-year deal, which they believe they can still pull off if everyone could find agreement by the end of the year. But importantly, the top Republican in the Senate, Mitch McConnell, who has really been largely silent, really, as the standoff has really unfolded in the past few days, he released a statement this afternoon, a very telling statement, I will say.
He's proposing a compromise in this statement, saying that Senate Democrats should come to the table, appointee to appointee, so they can go to conference. House Republicans though should pass this short-term extension.
I'll read you the statement in part. It says that, "The House should pass an extension that locks in the thousands of Keystone XL pipeline jobs, prevents any disruption in the payroll tax holiday, or other expiring provisions, and allow Congress to work on a solution for the longer extensions."
Now, not only is this -- is Senator McConnell trying to offer a compromise here, I'm told by top Republican aides that this is also a way to -- can be seen as also a way to try to offer House Speaker John Boehner a way out of this impasse, as House Republicans have come under increasing scrutiny not only from Democrats, but also Senate Republicans themselves. And I'll tell you, the fact that Senate Minority Leader McConnell is coming out to say that the House should give in here on their opposition to a short-term extension is very telling and very noteworthy. And I'll say it does not help House Speaker John Boehner's argument that they're not going to budge.
So this could be a very significant development today.
MALVEAUX: It could be a breakthrough. All right. Kate, thank you very much.
Obviously, we're going to get back to everybody who is weighing in and watching for the president to make his statement, to make his case on this issue -- Wolf Blitzer out of Washington; Dan Lothian at the White House; and of course Kate Bolduan on the Hill; as well as Alison Kosik at the New York Stock Exchange to talk about the economy, because the economy is really fragile.
So what would actually happen if the payroll tax cut extension does not go through? Big-picture look at the possible ripple effect, that up next.
(COMMERCIAL BREAK)
MALVEAUX: The political fighting over whether to extend payroll tax cuts is intensifying by the hour in Washington. But right now, we want to cut to the chase, how ending the tax cut will affect your family and all American families.
Alison Kosik, she joins us from the New York Stock Exchange.
And Alison, what does this mean in terms of people's paychecks?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK. In terms of dollars and cents, for one, I just want to point this out, that the payroll tax for Social Security, it would go from 4.2 percent, back up to 6.2 percent. And just a reminder, before January 1 of this year, everybody who got a paycheck was paying 6.2 percent. So it's going back up to the original amount that everybody was paying.
But just to break it down for you per year, let's say that you earn $35,000 a year. If this payroll tax cut is not extended, it means that you're going to pay an extra $700 beginning next year. And then you go through the salaries there, $50,000, you pay an extra $1,000, and so on. You see that in the graphic there.
Now I want to switch to individual. I want to break it down to your individual paycheck if this increase -- if the payroll tax break is not extended.
So let's say you earn $35,000 a year. You would pay $27 more per paycheck, and so on. Fifty thousand dollars a year, you would pay $38 per paycheck. So you see how it impacts you. Every little bit matters.
MALVEAUX: Sure.
KOSIK: For many people who are getting a paycheck, it's certainly been very noticeable that the paycheck has been at least a little bit fatter. So, yes, if this extension is not passed, it will definitely be noticeable when payday comes -- Suzanne.
MALVEAUX: So, Alison, is this going to lead to people spending less -- they're going to have less money to spend -- and potentially throw us into another recession?
KOSIK: Well, and what's interesting about this whole issue, it's very controversial. So you can talk to one group, they'll say one thing. And another, they'll say a totally different thing. But one thing that many people can agree on is that it is possible that it could tip the U.S. back into recession because it's terrible timing.
Look how the economy is sort of plodding along right now. Just today we got a report on how the economic growth in this country has been for the months July -- for the third quarter. So GDP growth came in at just at 1.8 percent annual pace. That is pretty anemic.
You know, growth, it slowed this year, compared to what it looked like last year. There you go. You see it right there, how much it slowed.
Just to give you an idea, in a healthy economy, the economy needs to grow at 3 percent, 3 5 percent. So you see that the fear here is that the growth may slow if the payroll tax isn't extended because of what you said, because people are going to wind up spending less because they're going to be getting less in their paychecks -- Suzanne.
MALVEAUX: All right. Alison, thanks for the explainer.
Obviously, we're going to be keeping our eye on the White House. Just a reminder, President Obama is holding a news conference concerning the payroll tax cut. He's expected to speak at 1:00 Eastern now. We're going to bring you his remarks live.
Well, it is the most heavily-armed border in the world. And tensions are especially high right now. We're going to take you to the demilitarized zone between North and South Korea.
(COMMERCIAL BREAK)
MALVEAUX: So U.S. troops leave Iraq, and now this -- nine car bombs, six roadside bombs and a mortar round rocked the capital, killing more than 60 people, wounding at least 185 others.
CNN's Arwa Damon, she is joining us live from Baghdad.
And Arwa, this is the worst violence that we've seen in Baghdad in quite some time, and it comes just days after U.S. troops pull out. What is the state of Iraq now?
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, I can tell you that just a few moments ago, we heard yet another explosion that shook the building that we're in. So it seems as if the violence is continuing well into the night. Still waiting to hear details on what that target was.
But for many Iraqis, Suzanne, I mean, this is just their worst nightmare come true, increased violence on the heels of the U.S. withdrawal, and they're watching their government appear to crumble apart like a deck of cards. It's so horrific for many Iraqis. They're expressing their anger, their outrage.
These explosions, 16 of them this morning, came within two hours of one another. And when they turn to their politicians, to their government, looking for some sort of a solution, all they're finding is this intense fighting along sectarian lines.
There is an arrest warrant out for the Sunni vice president on charges of terrorism. He is up North seeking sanctuary in the semiautonomous region of Kurdistan. The prime minister, a Shia, in a Shia-dominated government, are saying they're simply implementing the rule of law and they want the vice president brought to Baghdad.
All of this is really causing great concern, because even though the violence might not directly be linked to the politics that we're seeing take place right now, it most certainly opens up space. And by that, I mean that the political instability opens up, creates space for terrorism to then exist.
MALVEAUX: Right. And Arwa, do we know who is responsible for all these bombings that are taking place?
DAMON: Well, there's been no claim as of yet, but they do bare the hallmarks of al Qaeda-style attacks, the sophistication, the level of coordination as well.
The U.S. military, prior to withdrawing, had said that it would be highly likely that al Qaeda and maybe some of the other insurgent groups would try to carry out some of these coordinated spectacular attacks, just simply if only to send the message that, look, we're still here and we can still carry out these acts of violence. For the Iraqi public, this puts a huge question mark on the capabilities of the Iraqi security forces. Sixteen explosions in the capital when you have a checkpoint on every single road just about? It does not cause for a lot of confidence in those abilities.
MALVEAUX: All right. Arwa Damon, thank you very much, from Baghdad.
Tension has always been high on the North Korean/South Korean border, right? But following the death of North Korean leader Kim Jong-il, the DMZ is now getting even more attention. It stretches across the Korean Peninsula and considered the most heavily-armed border in the world.
CNN's Paula Hancocks is there.
(BEGIN VIDEOTAPE) PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: You're joining me at the DMZ. This is the demilitarized zone between North and South Korea.
Now, this border is very tense at the best of times, but obviously since the death of Kim Jong-il, monitoring has been increased. Now, we understand that the South Korean military has increased its level of alerts, but the U.S. military is saying that it is business as usual.
COL. JONATHAN WITHINGTON, U.S. FORCES KOREA SPOKESMAN: Now, we're maintaining a level of readiness that is expected of us on any given day here in the Republic of Korea.
HANCOCKS: Now, here on the DMZ, you can see a North Korean soldier just across the border. They often come out of that area to see what is happening on this side, the South Korean border.
This is a joint security area. It's basically where all the negotiations have taken place between the North and the South since 1953.
Now, the blue huts behind me are half in North Korea, half in South Korea. And the border itself is obviously very tense.
You can see the South Korean soldiers facing off against the North Korean soldiers, and a very inauspicious border. The concrete slab that you can see in the middle there, just a few inches above the ground, is effectively the border between North and South Korea.
This is the conference room where the negotiations actually take place when there are negotiations between the North and South. This table here is effectively along the border, so they want to make sure that it is completely equal. Half of the hut's exactly in the North, half in the South. And there have been many negotiations over the years that have happened here.
This is called Checkpoint 3 along the DMZ. And you can see how closely we are to the demarcation line here.
These white stakes that you can see is effectively the border between North and South Korea. So, just beyond that, beyond those trees, you can see a building there. This is one of the buildings that obviously the North Koreans could well be using to monitor South Korea, just as here, on the South Korean side, they are monitoring the North Korean side.
So, at this point, a very intense border, but both sides watching things very closely, hoping that as each day goes by, situation will ease.
Paula Hancocks, CNN, on the DMZ between North and South Korea.
(END VIDEOTAPE)
MALVEAUX: Experts say that college student Robert Champion was beaten so badly in an alleged hazing, his muscle tissue was almost destroyed. We look further into the investigation.
(COMMERCIAL BREAK)
MALVEAUX: More disturbing details from the autopsy of Florida A&M drum major Robert Champion. A pathology expert says his muscle damage was so severe, it is more commonly seen after car accidents, prolonged seizures or torture. Champion was beaten in an alleged hazing incident, and so far no one has been charged in his death.
George Howell reports, finding out who took part in this beating is not so easy.
(BEGIN VIDEOTAPE)
GEORGE HOWELL, CNN CORRESPONDENT (voice-over): It happened on a tour bus parked outside an Orlando hotel November 19th. Florida A&M drum major Robert Champion died after a vicious beating. Investigators say it was a homicide that resulted from hazing.
MIKE BROOKS, HLN LAW ENFORCEMENT ANALYST: You look at a bus like this, the narrow aisles, the seats so close together, the ceiling it's just such tight confines in here. And to have to walk from the front to the back of the bus with people just beating the hell out of you, what must he have gone through?
HOWELL: We turn to HLN law enforcement analyst Mike Brooks to take us into the minds of investigators trying to piece together what happened to the 26-year-old victim before someone placed this 911 call --
911 OPERATOR: Is he breathing?
UNIDENTIFIED MALE: We don't know if he's breathing or not, but we need to get an ambulance ASAP!
911 OPERATOR: I have help on the way already.
HOWELL (on camera): How do you determine the level of culpability, who did what?
BROOKS: That's a great question. And as a law enforcement officer, I want to know, who were the ones who were delivering the blows, the serious blows? Was there one person who delivered the most blows that may have caused his death? We don't know. Were there other people who might not have been involved at all?
HOWELL (voice-over): Band members who spoke to CNN say it may have been the result of a hazing ritual called "Crossing Bus C," where the victim walks backwards from the front of the bus to the back while being beaten repeatedly by fellow band members.
BROOKS: Investigators have their work cut out for them because they've got to interview everyone, but this bus is a crime scene. What happened? Where did it happen on this bus when he was being beaten with fists, maybe with musical instruments? Those are things law enforcement has to find out exactly what happened. HOWELL: Robert Champion died of significant rapid blood loss due to blunt force trauma. According to the autopsy report, the victim of a severe beating.
And with so many possible witnesses on the bus --
BROOKS: Because I find it hard to believe that if that much was going on inside the bus, if they were beating him so viciously inside that bus, that somebody on the outside didn't hear something, didn't see something.
HOWELL: Brooks says it's a complicated investigation to determine exactly what happened in the moments leading up to Robert Champion's death.
BROOKS: Did anybody try to stop this? Did anybody say, hey, he's had enough, he's had enough, knock it off? Did that happen? Only the people on that bus know.
(END VIDEOTAPE)
MALVEAUX: Earlier this week I talked with Robert Champion's mother about what happened to her son, and she says that Florida A&M has not gone far enough to stop hazing.
(BEGIN VIDEO CLIP)
PAM CHAMPION, ROBERT CHAMPION'S MOTHER: I haven't talked to the university, so the university hasn't explained anything about what they're doing. What I'd like to do is to see what things they are going to put in place to ensure that this does not happen again.
It's clearly a cruel and a hateful thing to have anybody to go through. So I'd like to see what kind of things they are planning on putting into place. Obviously, what they had in place was not working.
(END VIDEO CLIP)
MALVEAUX: Last week, Florida's governor asked that the president of Florida A&M step aside while the investigation takes place, but students protested and the president refused.
We are getting word now of intense severe storms hitting the Southeast right now. Chad is going to pinpoint where, up next.
(COMMERCIAL BREAK)
MALVEAUX: Five thousand healthy meals are delivered every day in some of Washington, D.C.'s lowest income areas by a reformed ex-convict with a desire to give something back. It's our "Giving in Focus" segment today.
(BEGIN VIDEOTAPE)
BO SIMS, D.C. CENTRAL KITCHEN: I shall return. This should be enough. Early on in my life, I guess I was watching too many gangster movies. Robbing banks. That was a thrill. Running from the feds.
We just robbed whatever bank we could. Finally, they caught up with us. They gave me 20 years, but when I did get out, things were different. I just didn't feel as though I was a part of society.
Thanks to D.C. Central Kitchen and the opportunity that they gave me. They actually changed my life to begin my transformation.
UNIDENTIFIED MALE: The thing that's unique about D.C. Central Kitchen, it is a community kitchen. We make 5,000 meals every day and they go out to breakfast meals on the street, all the city shelters.
BRIAN MACNAIR, D.C. CENTRAL KITCHEN: All right, we in business. And with that meal goes the message that back at home in our kitchen there is a 14-week program that will get men and women back on their feet with a culinary job training program and they leave with jobs.
SIMS: I come in, I get my route sheet.
MACNAIR: Healthy Corners is an interesting program. Last five years it's been a healthier focus on meals.
SIMS: I'm giving significantly to the community by providing these items.
UNIDENTIFIED MALE: There's been an interest in getting this healthy product into the corner stores that are in the food dessert all around D.C. Food dessert is an area where they do not have access to good local products.
SIMS: Instead always go in and getting chips and cookies and things of that nature, we're trying to provide them with alternative ways of eating.
MACNAIR: Bo's been a friend of mine for a long time. I remember him coming through as a student. He's been through every aspect in the kitchen, Bo worked in catering. Bo worked in the production life. We thought he was the perfect candidate to take on Healthy Corners because he knows the community.
SIMS: These are fresh product.
MACNAIR: When you're around someone to see the change in their life and they're becoming a better person, it makes you want to do the same in your life.
(END VIDEOTAPE)
MALVEAUX: Good for him! Be sure to watch CNN's "Giving in Focus" special on 4:30 Eastern, Christmas Day hosted by Tom Foreman.
Severe storms are battering the southeast right now. Chad Myers for all the details here. I guess travel is going to be pretty tough.
CHAD MYERS, AMS METEOROLOGIST: It will. Atlanta airport may be even closed later on today, airplanes may not be able to fly in or out as these storms get so close, as these tornadic storms like we're seeing right now get closer to Atlanta so that could be a big problem later tonight.
Let's get right to it. Chatham, Alabama, you are under the gun with a tornado warning for you. The storm is right there, very, very big storm. This thing has been on ground. I think there's been a tornado on the ground south of probably state line into Mississippi. This is just one of many.
See these big red boxes here. Those big red boxes are watch boxes that goes until 5:00 Central Time in Alabama. That means something could spin. The bigger ones that spin could put down a tornado. I know there's a lot of coulds and woulds in there so that's why they do that. That's why it is a watch.
When you see a purple box here, you know that's a warning -- something is going on right there. This storm did go right just to the south of state line, Mississippi, and now right into close to Millery, Alabama with a lot of rotation here.
Well, this is going to take you on the tour because there is going to be weather into Birmingham. There's going to be weather into (inaudible) and the thing is. You always expect severe weather in the spring.
You don't expect it on the first day of winter. What happens in spring is that the warm air wants to push the cold air away. That's spring. It's December. Right now, the cold air is trying to push the warm air away.
That's still a clash. It's still clashing worm and cold and that warm and cold caused the thunderstorms, whether in the spring or whether it's in the fall or today, winter.
Denver, your delays are going down, 35 minutes. Newark at 15 minutes right now. Not all so bad, but you are looking though at flight explorer 5,700 planes in the sky. There's Atlanta right there.
All the planes coming in from Florida and here are the weather cells, the line of cells, some planes trying to fly around it. Some planes trying to go over to the north of it and it's this cell line gets closer to this airport, you're going to have to get ready for some long delays today.
MALVEAUX: Then, Chad, they're going to be even be more planes, right, in the next couple days?
MYERS: Yes, tomorrow for sure. It slows down a little bit on Saturday, but the big story is, if you start to lose planes because of cancellations, all of a sudden 160 people don't have an airplane, they are looking for flights someplace else. Those seats are full. That's the problem at this time of year.
MALVEAUX: All right, Chad, thank you. Trying to make our way through this. Just a reminder, President Obama is holding an event concerning the payroll tax cut. He's expected to speak at 1:00 Eastern Time. We are keeping an eye on the White House. Going to have live coverage from Washington, D.C. next bringing you his remarks live.
But first here's some free money advice from the "CNN Help Desk."
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Time for the "Help Desk" where we get answers to your financial questions. Joining me this hour, Gary Schatsky, a financial planner and president of objectiveadvice.com. Gail Cunningham is with the National Foundation for Credit Counseling.
Thank you both for being here. Gail, first question to you. This comes from Chris in Florida. Chris writes, my wife has approximately $45,000 in student debt spread out over 10 loans. She is a teacher and a low-income school and could possibly receive repayment help. What's the best way to simplify and reduce that debt?
GAIL CUNNINGHAM, NATIONAL FOUNDATION FOR CREDIT COUNSELING: Wow, $45,000 spreads over ten months, that's a bit complicated for them to keep up with. I do think there may be help available to them through income based repayment plans.
Now we are speaking here of federal loans. So if their loans are private, that may be a different animal to deal with. But income based repayment apply for that, they are going to ask for documentation of course, such things as previous tax returns, et cetera.
But that's OK. It's going to be well worth it. She may also require some forgiveness along the way and she would probably qualify for that having been in the type of job she is in the teaching profession.
HARLOW: That's a good thing to look into.
CUNNINGHAM: Consolidate those loans. Get the payment started.
HARLOW: And Gary, your question comes from Jonathan in San Diego. Jonathan wrote, I'm considering rolling over several 401(k) plans from former employers into an IRA. How do the legal protections from the two differ?
GARY SCHATSKY, FINANCIAL PLANNER: That's a really good question. First of all, from the legal protection standpoint you're normally talking about creditor protection or bankruptcy.
Generally, and it depends state by state, 401(k)'s have greater protections that IRAs, but not all states. But more importantly when you roll over to an IRA, there are great advantages.
You have tremendous flexibility on your investments and you can get cheaper funds. So unless you're really concerned about credit risk, rolling to an IRA often makes a lot of sense. HARLOW: All right, guys, thank you so much for your advice. Folks, if you have a question you want answered, just send us an e-mail any time to cnnhelpdesk@cnn.com.
(COMMERCIAL BREAK)
MALVEAUX: Stories making news cross-country. A dramatic violent crash ended a 40-minute police chase in downtown Orlando. When you see the impact, the fact that everybody survived is absolutely remarkable. Six people were injured, including the two burglary suspects that police were chasing.
In Arizona, where Tempe police say they have dealt a huge blow to a notorious drug cartel. They arrested more than 200 people and seized almost $8 million along with $12 million worth of drugs. They say it all began 15 months ago when a drug user was pulled over in a ordinary traffic stop.
Police forced to play reindeer games in Norton, Ohio. Drivers have to avoid this reindeer as it stroll downs the middle of the road. 911 calls were pouring in. An officer came out and guided it to safety.
Well, they are movers, shakers, agents of change. Don't forget to tune in to CNN's new show called "The New List" this Sunday to see the magic behind the amazing illusions of Marco Tempest.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: My name is Marco Tempest. I'm a cyber illusionist, which means I combine magic and science to create illusions. It is science, technology, gadgets.
Calling myself a magician evokes a certain image like if you're magician, you immediately know what that is. It is a guy that does a magic trick.
A cyber illusion is that it requires a little bit of explanation, it is a conversation starter and that's really what my work is all about.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
MALVEAUX: President Obama turning up the pressure on House Republicans in the tax cut standoff. The president is holding an event shortly to push for extending the payroll tax cut. We're going to bring it to you live.
House Republicans have refused to go along with a temporary two-month extension that was approved by the Senate. Well, today, Speaker John Boehner made another push for negotiations on a one-year extension. But the clock is ticking. The payroll tax cut expires December 31st. It means that higher taxes for 160 million Americans if there's no extension. Now, for a family making $50,000 a year, it means about $40 less in each paycheck. A figure the administration is trying to hammer home.
Our team is standing by to talk about what's at stake for you, your finances, as well as the political players involved. Wolf Blitzer, John King, they're in Washington, Dan Lothian's at the White House, Kate Bolduan on Capitol Hill, and also Alison Kosik at the New York Stock Exchange.
So, I want to start off with you, Wolf. Clearly the political stakes are very high in this showdown. Less than two weeks away from the Iowa caucuses. This president has to win 2012 on the state of the economy. What does he need to say today?
WOLF BLITZER, CNN: Well, he's got to get a deal going. He's got to get this tax cut for 160 million Americans approved because a lot of the economists out there are suggesting that if it's not improved, that would have a negative effect overall in the economy next year. And if the economy is moving in the wrong direction, it's not going to help President Obama get re-elected if things look like they're going from bad to worse.
So the immediate need is between this week and next week, where the president and the Republicans, especially in the House of Republicans, the Democrats obviously in the Senate, they all need to get together and they need to work out some sort of deal that allows it to go forward, the tax cut, whether for two months or for the entire year.
I suspect they'll be able to get an agreement because now and the end of the year because the stakes are simply so enormous, not only for the American people, but political for the Republicans. They all suffer big-time if the American people get a tax increase. But the stakes are also enormous for the Democrats right now. And I think the pressure on the president is that if there's no deal, the economy, in the process, could suffer. A lot of Americans could suffer. And, you know, if the economy isn't moving in the right direction, they potentially could blame the president, in addition to blaming the Republicans.
MALVEAUX: And how does the president fare going up against Republicans in convincing them that he's this populous president, that he actually gets it? Who looks like -- who looks bad in this struggle right now?
BLITZER: Right now he's doing well politically. He's got the upper hand. He's showing some fire in his belly. He did earlier in the week. He's getting passionate. That's certainly what his base wants to see, a more assertive, a more dynamic president making the case for millions and millions of working Americans. And this is a very, very dramatic opportunity for him to do so.
Even a lot of Republicans, and you pointed out, like John McCain, Bob Corker of Tennessee, a whole bunch of Republicans out there are saying, this is playing into the president's hands politically for his re-election. Sort of remind me -- and, Suzanne, you'll remember -- it reminds me of how President Clinton got himself re-elected back in '96 after the Republicans went -- you know, in a brinksmanship battle in shutting down the government with him at that time. They did shut down the government. Newt Gingrich was the speaker of the House. But the American public, by and large, blamed the Republicans, not the president and the Democrats, and President Clinton in '96 beat Bob Dole and was re-elected. There's a potential for a similar scenario to unfold right now if they don't get their act together, both sides. I suspect there will be some blinking before new year's.
MALVEAUX: And, Wolf, there are some people, some Republicans at least, who hope that this is really just a blip on the radar screen, that folks are not really going to pay that much attention to the fact that we are really at the point that we're almost at the abyss. That they are going to focus on November and what the economy looks like in November. Do you think that's a fair assessment?
BLITZER: I think they're playing a very dangerous game if they do. And I'm not the only one who believes that. A lot of Republicans are very nervous right now. And that's why I think the speaker, John Boehner, the majority leader, Eric Cantor, in the end, they'll work out, they'll finesse it, they'll find a way to come up with some sort of deal that allows this tax cut to continue, at least for another year, whether it's a two-month or full year, whatever they're going to do, they'll work it out. They've got the time if they're ready to stay in Washington and do it.
And, look, they're all here still. All the leaders are still here, by and large. Not the Senate leaders, but the House leaders and the president. His family is out in Hawaii. He's still at the White House. He's getting ready to work.
If they can work out a deal in the coming days, then I think they'll all be winners in this process. If they don't work out a deal, the American people will certainly suffer because $1,000 or $1,500 a year, that's a lot of money for people making $50,000 or $75,000 a year. They'll blame a lot of folks for this and it just makes Washington look so dysfunctional.
MALVEAUX: Right. Yes, absolutely.
Wolf, stand by.
The White House says this two-month extension of the payroll tax cut is going to keep middle class Americans from getting hit with smaller paychecks. And we're talking about just nine days from now. We want to go ahead and bring in our White House correspondent, Dan Lothian, to talk a little bit about this stagecraft that we're seeing here.
I mean it is taken to a whole nother level. We're used to seeing this kind of thing, Dan, on the campaign trail. But you've got this countdown clock that's happening, a Twitter campaign. What do we expect to see from the president and these families that will appear with him?
LOTHIAN: Right, now he has some real people at his side. As you know, Suzanne, it's one thing to talk about the stories of real Americans, but it's a different thing to actually show them. And the White House believes that there is some power in that. And so that's why they've invited Americans, ordinary Americans, who say they'll be impacted when their taxes go up, when they'll see $40 less in their paychecks each month, to come here to the White House and sort of give a strong showing, adding to the president's pressure on House Republicans to get something done.
The big concern is that if this is allowed to expire, it will not only hurt middle class Americans, but also hurt the overall economy, which the White House believes is getting some traction, and some of those gains could be set back if this does not move forward, this temporary or two-month extension. Again, the White House would much rather have a longer deal, a one-year deal, but they done think that's possible right now.
MALVEAUX: Right. So, Dan, we had heard from Representative Eric Cantor earlier today, who kind of gave the president a little bit of a hard time saying, yes, you know, we saw you shopping with your dog Bo yesterday. You know, here on Capitol Hill, it's pet friendly as well. Why don't you -- why don't you come up and talk to us directly. Do we have any sense that the president would actually go to Capitol Hill and start talking to lawmaker in the next couple of days?
LOTHIAN: We don't. In fact, that is one question that we've asked White House aides now for more than a week whether the president himself was going to go up to Capitol Hill or get more engaged. They believe that the president has been engaged from the very beginning.
But you've heard that from Speaker John Boehner, who has been calling on the president to get more involved, to reach out to him, to go up there and negotiate. But the White House, the bottom line is that they don't feel that there's any more negotiating that has to take place here. That you have a bipartisan deal that was passed, approved in the Senate, and that it's time for House Republicans to get on board with this, get it at least extended for two months, and then everyone can work together to get it extended for a year.
MALVEAUX: All right, thank you, Dan. Stand by.
It's not just a battle between the White House and the House speaker, it is a fight within the Republican Party. Senator John McCain says Republicans, they're paying the price.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: It is harming the Republican Party. It is harming the view, if it's possible anymore, of the American people about Congress. And we've got to get this thing resolved and with the realization that the payroll tax cut must remain in effect.
(END VIDEO CLIP)
MALVEAUX: I want to bring in congressional correspondent Kate Bolduan, who joins us from Capitol Hill.
Kate, we know it's Republican versus Republican, but it was quite significant that there was a statement that came from Senator Mitch McConnell earlier today. Explain to us what he is saying, what he's trying to do when he reaches out directly to Boehner and House Republicans to push and to approve this. BOLDUAN: Senator Mitch McConnell, Suzanne, the top Republican in the Senate, he has been silent really this past week as kind of the standoff has continued and the pressure has really been mounting, specifically on House Republicans.
Today he broke that silence, proposing what he's calling a compromise between the House -- what's being described as a compromise between the House and Senate. And while Mitch McConnell is calling for Democrats to appoint these negotiators to go to conference, really begin negotiations over a longer term one-year deal, importantly and most notably, Mitch McConnell is also calling on House Republicans now to give in on this short-term extension, which we now House Speaker John Boehner has stood opposed to the short-term extension.
Let me read to you his statement, in part, from Senator Mitch McConnell. He says, "the House should pass an extension that locks in the thousands of Keystone XL pipeline jobs, prevents any disruption in the payroll tax holiday or other expiring provisions and allows Congress to work on a solution for the longer extensions."
So, important there that Mitch McConnell, a top Republican in the Senate, who has often in the past coordinates, you know, with his House colleagues, the leader in the House, he is here telling -- really telling House Republicans, of course House Speaker John Boehner, to give in on the short-term extension so they can work towards this longer deal.
The top Democrat in the Senate, Harry Reid, he issued a statement very quickly after that, trying to take the opportunity to say that probably one of the rare times that he says I agree with Senator Mitch McConnell. Obviously he supports moving forward (ph) on this short- term extension. But he says though he is insisting in this statement that the House must move first. And in this statement Senator Reid says, "once the House passes the Senate's bipartisan compromise to hold middle class families harmless while we work out our differences, I will be happy to restart the negotiating process to forge a year- long deal."
Now, House Speaker John Boehner, a spokesman for Boehner issued -- gave us a statement afterward saying -- really not indicating that he's on board with this. Not indicating that they're budging at all at this point. Really saying that they all agree on -- that they need to get it to a one-term deal -- a one-year deal, rather. But also say that they need to move to reconcile their differences so they can provide that one-year payroll relief and do so by year's end. So, you don't get an indication there that Speaker Boehner is on board with what his colleague in the House is proposing.
But some possibly very significant developments here as we've seen mounting pressure on House Republicans to give some ground, specifically coming from their Senate colleagues. And we're seeing a little bit more of that here.
MALVEAUX: OK, Kate, thank you.
I want to bring in Wolf. Wolf, I understand you've got a question for Kate as well on how all of this --
BLITZER: Yes, I just wanted to -- I just wanted to follow up, Kate. So the reaction from the speaker to what Mitch McConnell proposed today was not necessarily all that negative. He's leaving open the possibility, is that what you're saying?
BOLDUAN: I don't know if we can read into it too far, but it is notable, Wolf, that in this statement it says essentially that we all agree that we need to get to a deal. And as Mitch McConnell suggests in his statement, that that needs to -- they -- the House and Senate need to reconcile their differences, meaning going to this conference to reconcile their differences.
But, in the end, the statement finished by saying, which I was saying, that they need a provide a full year of payroll tax relief and do it by year's end. By saying do it by year's end, that's been the real hick-up, as you know, Wolf, all along. As Senate Democrats say that they need this assurance of this short-term extension in order to make sure that while they're negotiating that full-year deal, this tax cut does not lapse.
So it's not necessarily that he's completely knocking it down, it's not a full endorsement, obviously, of what Mitch McConnell is proposing, but we'll see how they kind of try to thread the needle from here. And one top Republican aide in the Senate told me that what -- it can be seen what Mitch McConnell's proposing is, he's trying to offer a way out for House Speaker John Boehner out of this logjam as House Republicans have gotten increasing, increasing pressure and are facing increasing criticism for their position on this.
Wolf.
BLITZER: Yes, and you know that there's no doubt that they're getting a lot of pressure, not just from Senate Republicans, but as we've pointed out all day yesterday, even the editorial board of "The Wall Street Journal."
BOLDUAN: Absolutely.
BLITZER: Which has been very critical of the way the House Republican leadership has handled this.
John King is standing by as well.
John, you know, the ramifications for Americans, millions and millions of Americans, are enormous right now.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, let me try to go through the numbers and if the president walks in the room, please stop me and, obviously go to the president. But you might be doing some holiday shopping. That money comes out of your wallet. You might put it on a credit card.
What happens if they don't do anything? Well, if you make about $35,000 a year, you're going to lose $700 next year. Or that's about $27 a paycheck. If you make $50,000 a year, you'll lose $1,000 next year. This is the number the White House talked about. Most average and middle class families lose about $40 a paycheck. If you make $75,000 a year, you'd lose $1,500 next year if they don't fix this, or roughly, if you looked out, about $58 a paycheck. Obviously the more you go up, the more you lose.
It's these numbers here the White House is focusing on. The president trying to get back not only his approval rating, but a narrative heading into the re-election campaign year, Wolf, that he's fighting for the middle class and that the Republicans, because they won't accept this compromise, want to raise your taxes. That's why, as Kate just said, Senator McConnell trying to give the House Republicans a little bit of a lifeline here, a way out.
Now the big question is, you have a little battle. Harry Reid says the House has to go first. If they will pass the extension, I'll name the negotiators. The House wants to see the Senate name the negotiators before they'll pass the extension. So you still have partisan bickering, but with Senator McConnell's statement, at least you see a path forward. Still a lot of questions to be answered, Wolf.
