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Search for Inmates Pardoned by Haley Barbour; U.S.-Iran Tension Spikes; President Obama Asking to shrink Government

Aired January 13, 2012 - 11:00   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: Live from Studio 7, I'm Suzanne Malveaux.

Want to get you up to speed for this Friday, January 13th.

Happening this hour, President Obama rolling out his plan to make the federal government leaner and meaner. The president is going to ask Congress for the power to shrink the government by merging six federal agencies.

Now, he's expected to speak around 11:20 Eastern. We're going to bring you those remarks live.

And just a week and a day until the South Carolina primaries. Several of the candidates have campaign stops in the state over the next couple of hour, while one of them is going to be in Florida. Newt Gingrich attends the opening of his campaign headquarters in Orlando. That is happening this hour.

Mitt Romney speaks in Aiken, South Carolina, in the next hour. And Rick Santorum campaigns in York, South Carolina. Rick Perry is going to be in Bluffton.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": I'm doing it!

(END VIDEO CLIP)

MALVEAUX: He has made a career out of poking fun at the political process, but now comedian Stephen Colbert actually talking about running for president himself. Yes, in the state of South Carolina. It sounds like a joke. Well, according to the Comedy Central comedian, it's no laughing matter.

(BEGIN VIDEO CLIP)

COLBERT: I am proud to announce that I am forming an exploratory committee to lay the groundwork for my possible candidacy for the president of the United States of South Carolina. Now, clearly, my fellow South Carolaniacs (ph) see me as the only viable Mitt- ternative.

(END VIDEO CLIP) MALVEAUX: Happening right now in Peru -- you're taking a look at live pictures here -- Joran van der Sloot waiting to find out how many years he's going to send behind bars. A panel of judges is sentencing the confessed killer of a Peruvian woman right now.

This week he pleaded guilty to murdering Stephany Flores back in 2010. Van der Sloot remains the main suspect in the disappearance of the Alabama teenager Natalee Holloway almost seven years ago.

The U.S. military is issuing a strong warning to Iran: don't mess with the shipping routes in the Strait of Hormuz. That is the only passage from the Persian Gulf to the open sea. Now, Iranian officials are threatening to close the strait, essentially choking off most of the world's oil supply.

Defense Secretary Leon Panetta told U.S. troops at Fort Bliss yesterday disrupting oil traffic would be crossing what he calls a red line.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY : We cannot allow them to develop a nuclear weapon. That's a red line.

Number two, we cannot tolerate Iran blocking the Strait of Hormuz. And that's a red line.

(END VIDEO CLIP)

MALVEAUX: Iran blames the United States and Israel for killing a nuclear scientist in Tehran this week. It happened at the time when the West and Japan are all strongly pressuring Iran to end its nuclear program.

So check this out. This is madness.

Crowds getting violent lining up to get the newest version of the Apple iPhone in Beijing. They had been camping out all night in sub- freezing temperatures when the store announced in the morning they didn't have any of the new phones.

Fists thrown. One person even threw eggs into the store. Apple said today the stores in China have already sold out.

Four convicted murderers in Mississippi took their newfound freedom and disappeared. They were pardoned on Sunday by outgoing governor Haley Barbour and essentially set free. Now state officials, they want to know where they are.

(BEGIN VIDEO CLIP)

JIM HOOD, MISSISSIPPI ATTORNEY GENERAL: There's going to be a national search for some of them. We will catch them. It's just a matter of time.

MARTIN SAVIDGE, CNN CORRESPONDENT: Do you know where they are? HOOD: No. We know where their family -- we're in contact with their family, local law enforcement. There's a search going on out there for them and we'll lay hands on them at some point.

(END VIDEO CLIP)

MALVEAUX: Our own Ed Lavandera, he is following what could turn into a nationwide manhunt for these guys.

Ed, this is a little confusing to people, right? Because, at first, they are behind bars, they're convicted murders, then they are pardoned, set free. And now there's a manhunt trying to get them back.

How does this even work?

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: Well, I think the legal minds in Mississippi are trying to figure this all out. And they're trying to do whatever they can to figure out a way of slowing this pardon process down. So that's why the attorney general, a Democrat there in Mississippi, asked the judge to make a temporary injunction, which the judge granted.

So, there are some 21 other people who were scheduled to be pardoned and then going through the process of being released. All of that is on hold, but five others had made it out, including these pictures you're seeing of the four convicted murderers.

Those people had already been released. And as the attorney general said, they hit the road running.

So now they're trying to figure out -- part of this injunction includes a phrase that would require these people to check in while they're out and while this legal fight continues. But they've already been let go. Their records have been completely cleared. And until they actually get the paperwork and are served with this notice, they don't have to comply.

But since they don't know where they are, they haven't been able to give them that paperwork. And it's not clear that they would have to comply since they're not considered criminals anymore.

MALVEAUX: Yes, that's a little confusing, Ed. Can the attorney general or judge send them back to prison if they actually capture and find these guys?

LAVANDERA: Well, that's going to be the million-dollar question in the situation, whether or not these pardons would essentially be revoked. So that's why you're seeing the attorney general. They're trying to find any kind of case law or any kind of legal argument that would support that case.

There's a hearing scheduled on January 23rd. And you can bet that that will be much of what is discussed on that day.

MALVEAUX: And Ed, do we know, are there other states, other authorities that are involved in trying to help Mississippi track these guys down?

LAVANDERA: Not that we've heard of yet. We do know that, as you heard the attorney general there mention, that if they feel like they need more help, or more time drags on, that they will cast out searches and help from across the country. So it will be interesting to see what kind of help these pardoned murderers are getting from family members, or if these family members are helping authorities kind of keep tabs on where they are while this legal process plays out.

MALVEAUX: All right.

Ed Lavandera.

Thank you, Ed.

(WEATHER REPORT)

MALVEAUX: Here's a rundown of some of the stories that we are covering.

First, tensions rising between the U.S. and Iran over this week's killing of a nuclear scientist and threats to cut off a key oil route. How concerned should we be about a possible military confrontation?

And President Obama announcing how he wants to shrink the size of government. It's set to happen in just a few minutes. We're going to bring that to you live.

And then Syrians giving a hero's welcome to Arab League monitors. They are trying to stop the government violence against its citizens.

Also, Newt Gingrich making a huge jump in our newest poll from South Carolina.

And Apple has egg on its face, or at least in its stores, after an iPhone launched in China.

(COMMERCIAL BREAK)

MALVEAUX: All right. These images sparked an international scandal. Now the Marine Corps says they have interviewed two of the four Marines shown urinating on the enemy corpse on an online video. Now, so far, the military is not releasing their names, but Defense Secretary Leon Panetta says the video troubles him deeply, and he is offering a full investigation.

Iran threatens to choke off the world's oil supply and the U.S. military sends a strong warning against that. This is what we're talking about, the narrow shipping passage called the Strait of Hormuz.

Iranian officials, under rising pressure from the West and Japan, say they're going to close it off, blocking all ships into and out of the Persian Gulf.

Fred Townsend, CNN's national security contributor, member of the CIA External Advisory Committee.

Fran, when you look at this situation here, and you hear the defense secretary issuing a warning saying there's a red line with Iran, don't cross it, are we on the brink of a military confrontation?

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Suzanne, there's no question that there are increasing tensions between the United States -- and it's not just over the Strait of Hormuz. Of course, we learned this week that the fourth Iranian scientist was murdered on Iranian soil. We learned that the Iranian courts have convicted and sentenced to death an American former Marine accused of spying. Remember there was the retired FBI agent taken into custody.

MALVEAUX: Sure.

TOWNSEND: And there, of course, lastly, was the plot against the Saudi ambassador to assassinate him in Washington, alleged by Iran.

So there have been a whole increasingly acerbic set of actions that have been taken. Not clear all of these -- who they're being taken by, right? But you add to this the threatening to close the Strait of Hormuz, and you could see these increasing tensions. There's an action and a reaction in each of these instances, and it could result in a military confrontation.

MALVEAUX: Do we think that there's an opportunity now for the U.S. to step back and deescalate the situation?

TOWNSEND: Absolutely. And it's clear that the U.S. is trying to do that.

Twice in the last 10 days or so, U.S. Navy ships have rescued Iranian sailors in the Persian Gulf. And that's all by way of an attempt to try to deescalate, diffuse the situation. But you need a partner on the other side. And so the Iranians would have to be willing to act in a reasonable way, for example, in the case of the Marine who has been convicted and sentenced to death.

MALVEAUX: Fran, let's talk about that partner there, because there are reports now in "The New York Times" that say that the U.S. is already in secret talks with Iran's supreme leader. So, is it possible? Is it advisable? Can the U.S. actually talk to Iran and work this out diplomatically?

TOWNSEND: Suzanne, as you'll recall, during the Bush administration there were similar attempts through what we call the Swiss channel. They've not been productive thus far.

I mean, that doesn't mean the current administration shouldn't try. But if that's what they're doing, and they're attempting to open up a dialogue, they do so mindful of the fact that others have tried before them. It has been unsuccessful. But in an effort to avoid over- confrontation, one can see why they might want to try and open a dialogue.

MALVEAUX: All right. Fran Townsend.

Thank you, Fran.

Here's your chance to "Talk Back" on one of the big stories of the day. What does the growing class conflict mean for America?

Carol Costello, I haven't seen you in forever, Carol. You're out of D.C. It's very nice to see you. Where've you been?

CAROL COSTELLO, CNN CORRESPONDENT: I know. Well, I've been working on a special project. And as you know, I've been in New York for a while. But I'm back home in D.C. And I'm with my husband, and things are good.

MALVEAUX: Oh, that's great. That's good. You look happy, Carol. That's all we want.

COSTELLO: I like that.

MALVEAUX: Tell us about the question today.

COSTELLO: OK. Well, here goes.

It's going to be an "us versus them" kind of election, as in rich versus poor. Because who really believes there's much of a middle class anymore? Many Americans don't, and that has created quite a rift between the haves and the have-nots.

According to a new Pew Research poll, in 2011, 66 percent of Americans said there were very strong or strong conflicts between rich and poor. Just two years ago, only 47 percent felt that way. We all know middle class wages have stagnated while the rich have enjoyed bigger paychecks. And if we didn't know, Democrats remind us all the time.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Times are especially tough right now. And they've been tough for a while. For the better part of a decade, we've seen the rich get richer, the poor get poorer, the middle class gets squeezed.

(END VIDEO CLIP)

COSTELLO: Republican Mitt Romney knows the middle class is hurting, but says the president is adding to the rift between rich and poor by promoting the politics of envy. That's exactly what he's doing, although Romney's Republican opponents seem to be adding fuel to Obama's fire by ripping on wealthy big business types. You know, venture capitalists like Mitt Romney.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: They're just vultures. They're vultures that are sitting out there on the tree limb, waiting for the company to get sick. And then they swoop in. They eat the carcass. They leave with that and they leave the skeleton.

(END VIDEO CLIP)

COSTELLO: Rhetoric aside, there's no doubt bitterness between the classes in America exist. The question is, will that really solve our problems or will it make them worse?

So, the "Talk Back" question today: What does growing class conflict mean for America?

Facebook.com/CarolCNN. I'll read your responses later this hour.

MALVEAUX: All right. We'll have to see what our viewers think.

Thank you, Carol. Great to see you.

COSTELLO: Sure.

MALVEAUX: Republicans call President Obama a supporter of big government and big spending. Right? Well, now the president says he wants to shrink the government. Live coverage of his remarks and a look at what it means for politics and our economy.

(COMMERCIAL BREAK)

MALVEAUX: We're waiting to hear from President Obama about his plan to shrink the federal government. We're going to bring that to you live as soon as he starts speaking.

The president is asking Congress for authority to merge federal agencies, starting with commerce and trade agencies.

Well, for a preview of what to expect from the president, what it means, want to bring in my friends Wolf Blitzer -- he's in Washington -- Alison Kosik of our Money team.

Wolf, want to start off with you.

So we know the president is going to ask Congress for greater power to shrink the federal government, combining six different trade and commerce agencies. The last time a president had that kind of power it was under Reagan.

So, the goal, the White House says, to save $3 billion over the next 10 years, getting rid of waste, that kind of thing. But no mistake here, right, that it's happening now during this 2012 campaign season? Talk about the politics.

WOLF BLITZER, CNN HOST: Well, the president has been unveiling, almost sometimes on a daily basis, usually on a weekly basis, a whole bunch of new initiatives designed to see what he can do without necessarily getting formal congressional authorization. It's sort of out of the Bill Clinton playbook back in -- I remember covering him in '96, when he had all sorts of what were considered relatively modest initiatives. But if you add them all up, it clearly shows that you're doing something. In this particular case, as you and I know, Suzanne, there is enormous waste in the federal government. There's enormous duplication. There are agencies that are working on exactly the same issue, they're competing for limited amounts of funds. They have got some people working there who basically do nothing.

A lot of the federal government is very, very critical, really important. But there's enormous waste.

And this is an initial, relatively modest, but important step designed to eliminate some of that waste, because you've got so many different international trade organizations working out of the department of government. Go ahead, try to consolidate, get the U.S. to increase exports, promote trade. But at the same time, you don't need five different agencies doing it. Have one agency.

That means some people are going to lose some turf, some power. But it's obviously very, very important.

MALVEAUX: And obviously a challenge to the Republicans and to Congress to do something to get something done during this campaign season.

I want to bring in Alison now.

What could this potentially mean for the economy and the job market? Does it necessarily mean a meaner, leaner government actually make much of a difference to our economy?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It does, because you mentioned jobs. And that's really the crux of where you can really see the impact of this merging of these agencies, because when you translate the word "leaner," that really means job cuts. And what the Obama administration says is that you can expect at least 2,000 jobs to be cut through attrition.

Now, attrition is when workers retire or resign and are not replaced. It's kind of a nice way of saying you're not going to be working here. So it doesn't mean necessarily they're outright layoffs, but the problem here, Suzanne, is what you get is a smaller workforce. And the way the economy is right now, it's kind of bad timing.

Thirteen million Americans are out of work. And those people would normally be vying for those government positions when they opened up.

So these people may not be laid off outright, but there will be fewer jobs available. And you can see an impact on the economy that way.

On the other hand, you have got the positive. You've got at least $3 billion in savings over 10 years. That's money that could be spent that is being saved instead -- Suzanne.

MALVEAUX: All right, Alison. Thank you.

We're keeping an eye on this, waiting to hear from President Obama. You see the room there. His plan is to shrink the federal government by bringing some agencies together. We're going to bring you this live as soon as he starts to speak.

Mitt Romney's business resume, it's under some fire from his rivals, but some Republicans say it's better for him to face these questions now rather than later. Find out why.

(BEGIN LIVE SPEECH)

OBAMA: Good morning, everybody. Please have a seat.

Welcome to the White House.

I see all sorts of small businesspeople here, and I am thrilled to have you here. As small business owners, you know as well as anybody that if we're going to rebuild an economy that lasts, an economy that creates good, middle class jobs, then we're all going to have to up our game.

The other day I met with business leaders who are doing their part by insourcing, by bringing jobs back to the United States. And I told them that if you are willing to keep asking yourselves what you can do to bring jobs back, then I'll make sure that you've got a government that helps you succeed. And that's why we're here today.

I ran for office pledging to make our government leaner and smarter and more consumer-friendly. And from the moment I got here, I saw up close what many of you know to be true. The government we have is not the government that we need.

We live in a 21st century economy, but we've still got a government organized for the 20th century. Our economy has fundamentally changed, as has the world. But our government, our agencies have not.

The needs of our citizens have fundamentally changed, but their government has not. Instead, it's often grown more complicated and sometimes more confusing. I'll give you a few examples.

There are five different entities dealing with housing. There are more than a dozen agencies dealing with food safety. My favorite example which I mentioned in last year's State of the Union Address, as it turns out, the Interior Department is in charge of salmon in fresh water, but the Commerce Department handles them in salt water.

If you're wondering what the genesis of this was, apparently it had something to do with President Nixon being unhappy with his interior secretary for criticizing him about the Vietnam War. And so he decided not to put NOAA (ph) in what would have been a more sensible place.

No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations. You wouldn't do it when you're thinking about your businesses. So why is it OK for our government? It's not. It has to change. Now, what we've tried to do over the first few years of my administration is to do a whole range of steps administratively to start making processes, procedures, agencies more consumer-friendly. But we need to do more and we need authority to do more.

So, today I'm calling on Congress to reinstate the authority that past presidents have had to streamline and reform the executive branch. This is the same sort of authority that every business owner has to make sure his or her company keeps pace with the times. And let me be clear, I will only use this authority for reforms that result in more efficiency, better service, and a leaner government.

Now, a little bit of history here.

Congress first granted this authority to presidents in the midst of the Great Depression so that they could swiftly reorganize the executive branch to respond to the changing needs of the American people and the immediate challenges of the Depression. For the next 52 years, presidents were able to streamline or consolidate the executive branch by submitting a proposal to Congress that was guaranteed a simple up-or-down vote.

In 1984, while Ronald Reagan was president, Congress stopped granting that authority. And when this process was left to follow the usual congressional pace and procedures, not surprisingly it bogged down. So congressional committees fought to protect their turf and lobbyists fought to keep things the way they were because they were the only ones who could navigate the confusion and because it's always easier to add than to subtract in Washington.

Inertia prevented any real reform from happening. Layers kept getting added on and added on and added on.

(BEGIN LIVE SPEECH COVERAGE)