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Erin Burnett Outfront
Republican Presidential Debate in Florida
Aired January 26, 2012 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ERIN BURNETT, HOST: Thanks so much, John. Well we're just one hour away from the last debate before the crucial Florida primary. Candidates are arriving right now. What do they need to do to win tonight? Mitt Romney and Newt Gingrich in a virtual dead heat. No love lost between those two if you haven't been watching in recent weeks.
The question is, will one of them get the knockout punch tonight and one of the big issues in this state, housing. Some bad news today and we've got the CEO of one of the largest homebuilders in America here tonight.
Let's go OUTFRONT.
Good evening, everyone. I'm Erin Burnett and OUTFRONT tonight we are live from Jacksonville, Florida, site of the CNN Republican Debate, which is just an hour away. The race between Mitt Romney and Newt Gingrich is really essentially tied here and Tuesday's primary could make or break either candidate. It's a big night. And issue number one for voters here, the housing crisis.
No doubt Florida residents felt the sting of this headline today, new home sales down 2.2 percent in December. Now what that meant is that 2011 was the worse sales year on record, may surprise you. You would have thought it would have been 2008 or 2009, but no, and Florida is one of the worst hit states in the country when it comes to housing. One in every 360 homes in this state received a foreclosure notice last month and almost half of mortgages are under water.
Housing prices have plummeted since their peak. If you look at Orlando, down 60 percent. They have fallen by more than half in Miami and in Tampa. In most cases, where there's a housing problem, there is an unemployment problem. And no place more so than right here in Florida. Construction drives everything here and the jobless rate is at 9.9 percent, well above the national average of 8.5 percent. All of this playing out in the campaign here, Romney and Gingrich attacking each other for profiting from the housing crisis.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE, POLITICAL AD: While Florida families lost everything in the housing crisis, Newt Gingrich cashed in. Gingrich was paid over $1.6 million by the (INAUDIBLE) agency that helped create the crisis.
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: This guy owns Freddie Mac and Fannie Mae stock. This guy owns Goldman Sachs stock, which is foreclosing on -- literally foreclosing on Floridians. This guy is surrounded by Fannie Mae and Freddie Mac lobbyists and he's running an ad?
(END VIDEO CLIP)
BURNETT: Stuart Miller is the CEO of one of the largest homebuilders in the United States, the Lennar Corporation based in Miami. His company has a major presence here, in California and Nevada. Those are the top three states hit hardest by the housing crisis. And he's also on our OUTFRONT "Strike Team", a group of business leaders, entrepreneurs and investors that we check in with regularly and you can check that out on our blog as well. But let's -- Stuart thank you so much for coming here and I know obviously you're based in Miami, coming up here to Jacksonville.
We get the data today. The south part of the reason we saw the pain in the housing market. Is it over? Is it going to start to improve? I mean you're in a state here where the average home is down 50 percent in price.
STUART MILLER, CEO, LENNAR: Well you've recited a lot of the really bad data relative to housing and it's all historical. But what we're starting to see in the field out in our communities, not only in Florida, but across the country is we're starting to see a fundamental recovery. Fundamentally strong and driven primarily by free market forces and what we're starting to see is stabilization that we think ultimately leads to recovery.
And the fundamentals driving it are the fact that home prices are low. Interest rates are low and rental rates are starting to move upward. So the comparison between the two is favorable for for-sale (ph) housing. Demand is just starting --
(CROSSTALK)
MILLER: -- just starting to come back.
BURNETT: And obviously we've had some federal programs to help here, but you mentioned the free market starting to work, so let me just play a sound bite from Mitt Romney back in October, what he had to say. Here he is.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Don't try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up.
(END VIDEO CLIP)
BURNETT: So, Mitt Romney saying don't stop the foreclosure process. Let it go ahead. Do you think -- and obviously he's hit a lot of people for that. People have said that's at the least not understanding of the pain regular people have gone through. Is it your view though that it is really starting to work, we're going to start to see prices go up?
MILLER: Well I think the most important thing is that we start to see stabilization because prices have been cascading downward for so long. Stabilization is what we're starting to see in our markets. As far as Mitt Romney's statement, we clearly have to see the past foreclosures, the defaults, make their way through the marketplace and ultimately we need to clear the inventory that's out there. So he's right in that regard and whether it's by letting foreclosures take place or turning some of these defaulted loans into rental homes, we need to get that inventory off the market so that we can stabilize --
BURNETT: The question is do we need more help? Now your industry was -- you know you wanted help. During the past few years you guys were lobbying, you wanted help. But now you got some help, but my question is do you need more -- do you need more from the government or have you had enough? Do we need another program from the president or do we need to hear another program from the GOP candidate?
MILLER: I think the most important thing for stabilizing housing right now is to let market forces work and do no harm. But do no harm means look we've got low interest rates right now, but people aren't able to take advantage of them. We have to enable them to get appraisals that matter and to get mortgage approvals. Right now, the pendulum for mortgage approval has swung way too far. We can't take Fannie, Freddie, FHA out of the market at the time that we need them the most.
BURNETT: Let me just jump in on that Fannie and Freddie issue, because obviously, this has become a center of a lot of the fighting we're seeing between Newt Gingrich and Mitt Romney. Newt Gingrich oh, well, you were paid by Fannie and Freddie and that sort of has become shorthand for you were a bad guy. Fannie and Freddie --
MILLER: Right.
BURNETT: -- are they bad?
MILLER: Fannie and Freddie, whether they're good or they're bad, they're an integral part of our housing system right now.
BURNETT: You can't shoot them dead now.
MILLER: You can't shoot them dead now because you take demand out of the system when we need it the most. Most importantly, if we believe that we've got to get the government out of financing, let's do it on a transitional basis, slowly, methodically and only when we have a private mortgage market ready to take the helm in the wake of a government walkway (ph).
BURNETT: Rick Santorum was just arriving a moment ago. The candidates are, everyone, as we know arriving over the next few minutes to get the final preparations. Final question about here in Florida, though. We talk about 350,000 construction jobs lost in the state since the peak. It's a state where it relies on property tax because you don't have an income tax, so the state's running a deficit.
Governor wants to try to cut another close to 7,000 jobs I believe. Are you going to start to see that improve? Are you going to start to see hiring at all in construction in Florida over the next six months? It might be the most important question to see whether Barack Obama or the Republican nominee wins the state.
MILLER: Well at the end of the day, it's not just about Florida; it's about the whole country. If we want the economy to stabilize and recover, we're going to have to see housing come back, start to stabilize and ultimately recover. Remember, pricing in housing drives consumer confidence and building in housing drives jobs. Not just in Florida, but across the country. Watch for housing recovery and we'll see stabilization in the economy.
BURNETT: And your bottom line is we are starting to see it.
MILLER: We're starting to see stabilization as long as we don't pull the rug out from under it.
BURNETT: All right. Well Stuart Miller is going to stay with us. Let me bring in John Avlon, who is also here. Interesting, John, more optimistic I think than some people would expect especially when you look at those overall drops in housing prices from a peak (ph) in this state.
JOHN AVLON, CNN CONTRIBUTOR: Absolutely and that's good news for the state. It's new goods for the country. If that trend continues, it could be good news for the president. But here's the short-term problem. Saying that things have hit their bottom doesn't give people a lot of confidence when they're feeling that pain and that frustration that comes from seeing the value of your home cut in more than half. You know yes, the state saw its unemployment rate go from five percent in January 2008, to 12 percent in the summer of 2010. Now it's gone down as well, so there's some sign of recovery, but the people in pain, the people who feel under water, people who have taken loans out against their mortgages, that frustration ain't going away and as that voter anger (ph). That distrust of the establishment we see again and again.
BURNETT: Mitt Romney is arriving right now. You'll see him walking in along with Ann and his son Tag (ph), who's been so instrumental in his campaign. So it sounds like what you're saying though is that there is no magic bullet. There is no like hey, this administration got it wrong. If they did X we would suddenly you know --
UNIDENTIFIED MALE: Right.
BURNETT: -- to John's point see things start to fix quickly.
MILLER: As we sit here today there's no magic bullet that's going to turn things around immediately.
BURNETT: Right.
MILLER: But at the end of the day we've gotten into a downward spiral in housing that has been extreme.
BURNETT: Yes.
MILLER: In order for us to get back to stabilization and recovery, it's going to take time and it's going to take a little while before we all start to feel good. Let's be patient and let the free market forces correct themselves and let's not do anything to pull the rug out from under it.
BURNETT: Stabilization may be enough, though, John, for President Obama.
AVLON: Maybe in the fall. The question right now especially about this primary, this pivotal primary just days away, the relentless negative attack ads all centering on Fannie and Freddie.
BURNETT: Right.
AVLON: Trying to exploit that anger and that frustration, but not offering solutions. We're not at the solutions stage. We're at the attack ad stage. (INAUDIBLE) only stokes the fire and frustration that people feel.
BURNETT: All right, well thanks so much, John Avlon and Stuart Miller, great to see you. And everyone please go to our Web site, check out the OUTFRONT "Strike Team", Stuart and his comrades.
Well President Obama did win Florida in 2008. So, four years later, how is this swing state going to go? And watching TV in Florida today, you heard John mention it, it's a really, really negative place to watch television, Super PACs doing a lot of vile things. And those great airline deals that you see advertised are usually a bunch of you know, a bunch of BS. We're going to explain.
(COMMERCIAL BREAK)
BURNETT: The fight for Florida reaching a boiling point for the Republican Party is an exciting night to be here in Jacksonville with a lot of excited and involved college students behind us. President Obama though knows just how important this state is to his re- election, the first lady in Tampa, Sarasota and Palm Beach today. In the last three presidential races, the margin of victory between the winner and the loser here in Florida has been an average of just 2.6 percentage points.
And then there was the whole hanging Chad incident. Florida is not a sure win for anyone. Take a look at the latest polls that we have. The president and Mitt Romney in a dead heat here in Florida both with 45 percent of the likely vote. Compared to Newt Gingrich, the president holds a 50 to 39 percent lead. All right, who's going to walk away with a Florida win?
Let's bring in James Carville and Ari Fleischer. Good to see you both. James Carville, let me start with you, sir. Florida high unemployment, we just heard the largest homebuilder in the state, one of the largest in the country say we're starting to see a fledgling recovery. That obviously could mean jobs, which could be great for the president, but what does the president do to win this state?
JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Well I mean it's a very, very competitive state as Ari can attest to and as you point out, the margin has been, you know, razor thin here of late. You know he needs the economy to be moving in the right direction. I think if he does that, I honestly believe only events can beat President Obama. I don't think Romney can, but you know we're still susceptible to you know a double dip or something else happening and to slow that momentum down and if that were to happen, Florida would be very, very tough state for the president.
BURNETT: Ari, would you agree with that? I mean we look at the polls, more Floridians, 50 to 41 percent think Mitt Romney would do a better job handling the economy than President Obama, but there is this fact that housing may be bottoming. We are adding jobs in America and that might be much more important than anything else for this president.
ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: In American politics, the most important factor is the economy going into an election year. And if the economy starts to show serious signs of improvement on a sustained basis is of course going to be a huge advantage for Barack Obama. The question is nobody really knows and the economy right now still is terrible. But there's also a debt that's going on no matter what happens to the economy, in my judgment, the next president's going to have to be somebody who shows a real willingness to do the big things to tackle the debt and that's where I think the president's going to be in trouble no matter who -- no matter how the economy is going.
BURNETT: Well that is certainly an important issue and you can hear it from the Ron Paul (INAUDIBLE) who are here cheering tonight. All right, Latinos, 22 percent of the population -- and you know you heard them James -- 30 percent of them are registered Democrats. You only have 11 percent in the Republican Party, so can Republicans win Latino voters?
(CROSSTALK)
FLEISCHER: I'm sort of a little bit of a Ron Paul guy.
(CROSSTALK)
BURNETT: Yes.
FLEISCHER: The most important thing to say to somebody is not what's your ethnicity but what can this country do to help you and that's economics. That's growth. That's values. That's foreign policy. I don't know that people necessarily slice themselves up. I'm not looking for a Hungarian candidate, but I do think it's important for Republicans to have an inclusive --
BURNETT: Had some problems over there in Vienna the other day --
(CROSSTALK)
FLEISCHER: Hungary -- Hungary (INAUDIBLE) Budapest (ph).
BURNETT: Oh yes.
BURNETT: Budapest (ph) -- Buda and pest (ph).
FLEISCHER: Budapest (ph). (INAUDIBLE) but it's -- the interesting factor for Republicans is they've got to show an inclusive side.
BURNETT: Yes.
FLEISCHER: If Republicans give a signal that they only care about older white voters --
BURNETT: Right.
FLEISCHER: -- it's going to be harmful to the party and especially its future.
BURNETT: (INAUDIBLE) and let me just ask you, James, in an interview on Wednesday, the president was asked whether Mitt Romney or Newt Gingrich would be a tougher opponent. Just listen to how he answered the question.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I don't really think about that. What I can say is this. That whoever their nominee is they represent ideas that I think are wrong for America.
(END VIDEO CLIP)
CARVILLE: Well --
(CROSSTALK)
CARVILLE: I think -- well I think he does think about it. I know I think about it and I'm not even running for re-election, so I'm sure he thinks about it. And in terms of the Hispanic vote, Mitt Romney's position on immigration is just out and out -- way out there. And Ari Fleischer, the Bushes have always had a very good immigration policy. I think that was one of the reasons Governor Bush didn't -- probably didn't endorse Mitt Romney because he wanted 13 million people here to go back (INAUDIBLE) to come back. That's completely unworkable. I'd use the word advisory. It's about idiotic is what it is. And he doesn't mention it in Florida, but they're going to mention it to him all over the country when he's running in a general election.
BURNETT: You know what's amazing, "The Washington Post" front page did a great story today on Super PACs and it was on a million dollars in this state spent in this primary by Democratic Super PACs against Mitt Romney. I mean this is like, you know they just want -- it seems pretty clear they want to take the guy out. They don't want to run against him. They view him as a more difficult opponent. How else do you interpret that? FLEISCHER: No, there's no question. The Democrats are having a lot of fun with the Republicans are right now, especially James.
BURNETT: James has been laughing a lot more than usual --
(CROSSTALK)
FLEISCHER: -- love to run against Newt Gingrich.
BURNETT: -- he likes to laugh.
FLEISCHER: And you know when it comes to the money, both sides are going to have plenty. All this focus isn't that terrible, all this money is, Democrats will have a lot. Republicans will have a lot. Remember, it was campaign finance reform that gave us this situation. Not Citizens United (ph), the court case, campaign finance reform stopped the parties, Democrat and Republican who used to spend the money and have the biggest say. Now, it's gone out to the individuals.
BURNETT: What's going to happen when we get -- we're supposed to get soon a report from the Super PACs, you know but they have that loophole.
FLEISCHER: Right, January 31st.
BURNETT: Just in general anti (ph) loophole, they generally (INAUDIBLE) good, but there's a loophole right where if you have a little charitable ARM (ph) in your Super PAC, you don't have to disclose your donors. So how many donors are we really going to find out about?
FLEISCHER: Well I don't know enough about campaign law, but if you're giving money that's used for the purpose of running a political ad, they're going to be disclosed and we're going to learn their names.
BURNETT: (INAUDIBLE) we're going to find out who --
FLEISCHER: Yes, now if they're doing something charitable, you know charities can't run ads advocating for the (INAUDIBLE) so you'd have a very different type of ads going on. So, we'll see. But again, the point is there's a Sheldon Neildesen (ph) on the right; there's a George Soros on the left. Both sides have it.
(CROSSTALK)
BURNETT: James, James, can you tell me what really goes on at the White House? Yes, go ahead.
CARVILLE: No. I mean I -- I just think -- I just think that this money in politics is just awful. And I think people give money to politicians because they think they can (INAUDIBLE) do make money off of government and -- that's not in every instance. There are some well motivated people I'm sure that do, but I think the connection between money and politics in this country is corrosive and I think it's getting worse, but we'll agree to disagree on that one.
FLEISCHER: But you know the other side of that is unions are going to be able to give almost unlimited or spend unlimited.
BURNETT: Right.
(CROSSTALK)
FLEISCHER: Whatever the Super PACs give is going to be a penitence compared to what unions spend.
(CROSSTALK)
BURNETT: They're the ones behind those millions --
CARVILLE: Yes.
BURNETT: Million Super PAC ads in this state. Go ahead, final word, James.
CARVILLE: We need a lot of things in this country. One we don't need is more money in politics but that's (INAUDIBLE). But you know, we'll have to -- at some point, we'll have to look at that. But it's not going to happen anytime soon.
BURNETT: All right. Well thanks to both of you. I got to admit on that one --
CARVILLE: Appreciate it.
BURNETT: -- I got to go with James. Kill the Super PACs --
(CROSSTALK)
FLEISCHER: As we break for a commercial.
BURNETT: As we break for a commercial. All right, Newt Gingrich calls out what he calls the elite liberal media, but some of the harshest criticism comes from his own party. And there are a number of things you're paying way too much for. We'll tell you what and why and it goes right actually to money in politics right here in the state of Florida.
(COMMERCIAL BREAK)
BURNETT: All right. You are looking at a picture of Newt Gingrich just arriving tonight for the CNN Presidential Debate here in Jacksonville at the University of North Florida. He is with his wife, Callista as you can see. Mitt Romney is here. Rick Santorum is here. We'll continue to watch as all the candidates come in, get their makeup on and go onstage with Wolf Blitzer.
Well the Fanjul brothers, Alfy, Pepe, Alexandra and Andres operate a vast sugar and real estate business in the United States and the Dominican Republic. Now you've probably seen their products on the shelves at the grocery store. Well they're the guys behind Domino, Florida Crystals, C&H and Redpath and life with these sugar barons is pretty darn sweet.
The Fanjuls are the largest landowners and private employers in the Dominican Republic, a nation of about 9.5 million people. Here in Florida, the family owns 155,000 acres in Palm Beach County alone, which brings us to tonight's number, 4.5 billion. That is the dollar amount that big sugar, like the Fanjuls apparently costs American consumers every year. According to Mark Perry (ph), professor at the University of Michigan, by pushing for protectionist trade policies, sugar producers have forced Americans to pay an average of 53.3 cents per pound for sugar grown in America.
That is double the average world price. That is pretty darn incredible and it means that you feel it every time you buy a Reese Pieces (ph), a Snickers bar, a Coke, cereal, cookies, you pay more than you would if the Fanjuls weren't there. And the Fanjuls' influence doesn't end there. They also have a taste for politics. Over the past few decades, the family has donated to local, state and federal campaigns Democratic and Republican.
They gave big to George W. Bush and earlier this month, the Fanjuls co-hosted an event for Mitt Romney in Palm Beach that brought in about $2 million for his campaigning. That would be a heck of a lot of chocolate bars. All right, we're going to take a brief break. We're 30 minutes away from CNN's Republican Debate. What do the candidates need to do to win over Florida's voters? Look, we're here in a college campus. The passion for Ron Paul is audible and you hear it, Ron Paul revolution. Rand Paul, meantime, describes his irate for authorities refusing a TSA pat-down. Now we've got the video. We'll be back.
(COMMERCIAL BREAK)
BURNETT: We start the second half of our show with stories we care about, where we focus on our own reporting, we do the work and we find the "OutFront 5". We've got a rowdy crowd here tonight getting ready for the Republican debate in Florida. Counting down to CNN's GOP debate, we're 30 minutes away.
One issue bound to come up tonight is housing. Florida one of the worst hit states in the entire country. Half of mortgage within the state are under water. Housing prices are off 60 percent. In Orlando, more than half, in Tampa and in Miami.
Major homebuilder CEO Stuart Miller of Lennar came OUTFRONT earlier.
(BEGIN VIDEO CLIP)
STUART MILLER, CEO, LENNAR: The fundamentals driving it are the fact home prices are low, interest rates are low, and rental rates are starting to move up. So, the comparison is favorable for for-sale housing. Demand is just starting -- is just starting to come back.
(END VIDEO CLIP)
BURNETT: All right. Number two, say good-bye to eye grabbing, but misleading low price air fares. Under federal rules that took effect today, advertised air fares must include all taxes and fees. Other rules taking effect prominently include disclosing baggage fees and allowing passengers to cancel or change their reservation within 24 hours without charging a penalty. The Department of Transportation told OUTFRONT it will monitor and fine airlines Web sites that break the rules.
Number three, what a perfect timing for this. I don't know if you can hear what they're saying behind me. They're saying, "End the TSA." This is a lot of support for Ron Paul. They love Ron Raul. They want to end the Fed.
Well, Senator Rand Paul, Ron Paul's son incident with the TSA on Monday, you may recall, he came on our program that night. The Kentucky senator refused a pat-down at a security checkpoint at the Nashville airport. According to an incident report, which is obtained by OUTFRONT, Paul is described as being rate, however, the video shows a rather calm Senator Paul, talking on his cell phone while being held in glass cubicle.
We talked to the senator on the day of the incident and here's what he told OUTFRONT.
(BEGIN VIDEO CLIP)
SEN. RAND PAUL (R), KENTUCKY: You know what they did in the end? They said, if you'll go through the screener again, we'll just pretend like it didn't happen. I said, that's fine with me. That's all I've ever wanted was to walk to the screener again and you know what? The screener didn't pick up anything. So, either the screeners aren't working well or I was being subjected to a random pat-down, which I don't think is helping any of our safety.
(END VIDEO CLIP)
BURNETT: Number four, initial jobless claims rose to 21,000 to 377,000 last week. That comes off the lowest level for that in four years. Jane Brownhouse of BPIG (ph) tells OUTFRONT that despite the fluctuations we've been seeing, the labor market is healing, and the trend is toward improvement.
What will that do for our debt situation? It has been 174 days since America lost its top credit rating. What are we doing to get it back?
Today, Defense Secretary Leon Panetta announced his plan to trim nearly half a trillion dollars from the defense budget. We'll see if that's enough. This crowd here, though, of students at University of North Florida, young people passionate, have a solution and a say.
All right. Well, there's no shortage of attacks between the candidates on the campaign trail. You see them here. Just take a look. We'll their shout-out again.
They're very passionate. They've been cheering, "End the Fed," "End the TSA." Ron Paul?
(CHEERS)
BURNETT: I think it's worth giving you a chance -- and they love Anderson Cooper -- giving them a chance to just reflect what I have seen in New Hampshire and I've seen it in South Carolina and I see it in Florida tonight. And that is that young people are very passionate about Ron Paul and they want passionately to vote for him. They care.
And seeing young people this involved and passionate is a pretty neat thing regardless of what you think about the candidate they choose.
All right. Let's talk about the super PACs. These groups can raise unlimited money. You heard James and Ari talking about it a moment ago.
The whole theory is they can do it as long as they don't wink, wink, nod, nod, at any contact directly with the candidates.
The super PACs supporting Mitt Romney, Restore Our Future, has already spent at least $10 million in Florida alone. The one supporting Newt Gingrich, Winning Our Future, says it plans to spend 6 million by next Tuesday, primary day. Most of that is being spent on negative ads overwhelmingly.
Here's a new one from the pro-Romney super PAC.
(BEGIN VIDEO CLIP)
NARRATOR: From debates, you'd think Newt Gingrich was Reagan's vice president.
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I worked with President Ronald Reagan, worked with Ronald Reagan, President Reagan, Reagan, Reagan.
NARRATOR: Gingrich exaggerates dropping Reagan's name 50 times. But in his diaries, Reagan mentioned Gingrich only once.
(END VIDEO CLIP)
BURNETT: So, just how influential are these ads?
OUTFRONT now, John Avlon, Gloria Borger and former White House press secretary Ari Fleischer.
I've got to yell very loud for Ari to hear me because the Paulites are very loud as well.
ARI FLEISCHER, CNN CONTRIBUTOR: Right. Some of what you're saying is being drowned out.
BURNETT: You got the Paulites, you got the 99 percent. It's great. Gloria, let me start with you. The super PACs supporting Newt Gingrich had not spent a dollar in Florida before this week. Only Mitt Romney's ads were visible. This week, Newt tied with Mitt. Do ads work?
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, without these super PACs, I don't think Newt Gingrich would be able to continue his campaign, period. He'd be dead in the water. He's got Sheldon Adelson giving him an awful lot of money, $10 million, the big casino magnate.
BURNETT: Right.
BORGER: And you need this money to continue because Newt Gingrich was unable to raise this kind of money. So, what these super PACs have done is essentially extend the life of this campaign and it could go on after Florida, because you're competitive when you can go up on the air.
BURNETT: What's interesting, arriving here in Jacksonville was very different than arriving in Manchester or South Carolina. You saw lots of signs on the road in front of people's houses there and really not as much here in Jacksonville. It's a different sort of election here.
So, do ads matter more?
JOHN AVLON, CNN CONTRIBUTOR: Ads really do matter here. You've got 10 media markets in Florida. It's an expensive place to run.
And significantly, Mitt Romney and his super PAC have been up with negative ads since almost before Iowa. There's been an avalanche of negative ads and it has shown some ability to really stop momentum.
In many ways, Florida's a fight between money and momentum. So, this is a real test. And this primary and all primaries aren't created equal, the Florida primary matters most. If Newt can pull off a win here, it would dig the bottom out of Romney's campaign because it will move his rationale as the electable candidate, the inevitable candidate.
But if Mitt Romney can win, it's back in the saddle, he wins Florida as expected. The tiebreaker after January (INAUDIBLE).
BURNETT: Ari, I was going to play a sound bite from Jeb Bush, but I won't because we won't hear it. John King talked to Jeb Bush tonight, and Jeb Bush basically said, look, if you'd just drown all this in negativity, you'd take away the connection people have with their candidates, do yourself more harm in the long run. What do you think?
FLEISCHER: This gets to the core issue of what's at stake right now for the Republican Party. Are we doing so much damage to each other that we're going to hand this election to Barack Obama?
We have a real split right down the middle of the party between the establishment wing, the mainstream conservative wing, and he new group, which is really the Tea Party energized grassroots win, which is the power of 2010.
Newt picked up that group and the problem is most people don't think Newt can be elected president. That's what's being tested here. These negative ads are helping drive it in that direction.
BURNETT: Gloria, can Mitt Romney get the nomination if he does not win Florida, two death blows in row?
BORGER: I think he could. I think it goes on and on and on. I think it becomes difficult for Newt Gingrich if he doesn't win Florida. Romney's got the money, he's got the organization in the state.
For example, he's been organizing in this state of Florida with early voters, with absentee ballots. He's been able to do that. That's going to help him.
Newt Gingrich doesn't have that kind of infrastructure. What he's got is a grassroots, anti-establishment movement going and that means something.
BURNETT: John has been looking at the Florida absentee ballot, a third of the ballots in the state could be absentee or early voting. You have a sense of the two people that could have benefitted from that.
AVLON: Absentee votes in particular have a Ron Paul edge because they're largely military votes. Ron Paul has done really well with military votes. And then Romney because he was that conventional wisdom front-runner early. The early voting however might have benefitted from that post-South Carolina surge for Newt Gingrich.
BURNETT: Right.
AVLON: Bottom line, we have an electorate throughout this year that's been angry, frustrated, wanting to send a message to the establishment. That's the certain (INAUDIBLE) the Newt Gingrich if he can have a strong debate tonight. This debate is pivotal for Newt Gingrich. He's got to kind of recapture that momentum and enthusiasm that he did after South Carolina.
BORGER: Pivotal for Mitt Romney, though.
FLEISCHER: Pivotal for both of them.
(CROSSTALK)
FLEISCHER: Tonight, this is the big debate tonight. It's all coming down to the wire.
BORGER: And I guarantee you, they are both going to be ready to fight it out on stage tonight. It's too much at stake. Romney in our poll, started doing better when he went on offense. I think he's going to continue. BURNETT: All right. There's another issue for him, Ari, with apparently the things that you file early on when you come to be a candidate in August. He filed some financial disclosures with the Federal Election Commission. Some things weren't in there that we now found out, like the Swiss bank account.
Obviously, he's disclosed everything now. No one is going to say the guy hasn't. But he didn't want to until he won the nomination. So, they say these are minor things. Are they minor or not?
FLEISCHER: Well, obviously, the Democrats and President Obama's campaign are trying to make them into major things. I think when you release (INAUDIBLE) worth of paper, you're going to have a paper or two that's probably missing. That's what's happened here.
But at least it's not like a treasury secretary didn't pay his taxes.
(CROSSTALK)
FLEISCHER: I mean, these Swiss bank accounts, if they're so secretive, why do we all know about them?
AVLON: In a state where a lot of people are suffering real financial pain, where you've got unemployment high, people under water. You know, the comment of just your average Swiss bank account doesn't fly. And so that's important.
BORGER: These were a blind trust, too, all of his income generating revenue.
(INAUDIBLE)
BURNETT: Fifteen minutes away. I got to tell you, it's pretty invigorating and exciting to be here with these young students who are so excited.
John King moderated the last debate. Who doesn't know that? He's got a preview of what he expects tonight.
And Newt versus the media -- when I talked to Newt Gingrich last week, he complained about the elite media. But now, the conservatives are piling on him.
(COMMERCIAL BREAK)
BURNETT: All right. We are here at the University of North Florida, Jacksonville. You can see the students here with us tonight as we get ready for the GOP final debate before the crucial Florida primary.
This is a young audience. And they love Ron Paul. And there are a couple who love Anderson Cooper. A lot of people who love Anderson Cooper.
But it's a Ron Paul crowd here tonight. Pretty passionate and excited.
All right. Newt Gingrich getting a lashing from fellow conservatives. He's inside, getting ready for the debate right now.
Check out the "Drudge Report" and links to Gingrich in his own words saying some less than flattering things about Ronald Reagan. By the way, the Gingrich camp says they are taking these comments completely out of context.
And Republican icon Bob Dole today wrote a letter published in conservative magazine, "The National Review," saying quote, "Hardly anyone who served with Newt in Congress has endorsed him. That fact speaks for itself. He was a one-man band who rarely took advice. It was his way or the highway."
On the campaign trial today, Gingrich was on the defensive.
(BEGIN VIDEO CLIP)
GINGRICH: I've been running a campaign that's based on large ideas, for example, the speech yesterday in Latin America, the speech yesterday on what we ought to do in space. I get pretty good reaction from the American people on these large ideas, then there's the Washington establishment sitting around in a frenzy, you know, having coffee, lunch and cocktail hours talking about how do we stop Gingrich.
(END VIDEO CLIP)
BURNETT: All right. So, why the push to stop Gingrich and will it work? The man certainly got a lot of momentum in South Carolina.
Joining me now, David Frum, Alex Castellanos, and David Gergen.
OK, great to have all three of you with us.
And, David, let me start with you.
Bob Dole coming out today with a big slam on Gingrich. You spoke to Bob Dole. What did he tell you and why did he come out today?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, actually, I went by to see him and paid my respects about three or four weeks ago, we spent an hour together, and we talked about Newt Gingrich. And I think the statement he issued today is very reflective of his deep feelings.
I mean, he hasn't have a love for Newt Gingrich for a long, long time, and he's deeply worried about the future of the Republican Party. He does think Republicans ought to hold the House and maybe win the Senate. He thinks Romney can do that.
He thinks with Gingrich, you're in real danger. The GOP is in real danger of losing that. So he's quite serious about it. You know, he's had differences with Newt that goes way back -- not only with his own campaign, but when they were in Congress. Those differences are deep and a lot involve around George Bush, Sr. He felt that Newt Gingrich had been very unfair and cost George Bush, Sr., maybe cost him the election.
BURNETT: Alex, obviously, one of the conservative establishment has come out against Newt, or for Mitt Romney. Why you're someone who's not a supporter of Newt Gingrich, why? People respond to Newt. People like Newt.
What's wrong with Newt?
ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Well, it's interesting that it's not just the Republican establishment. It's conservatives. Paul Ryan, you know, people in Washington that you would expect possibly to be for the more conservative candidate are not.
And I think a lot of them just know how, have seen or erratic Newt Gingrich is and they're afraid that if that Roman candle burns bright, they know it falls to earth the next day, and it could take the whole party with them.
We've seen this before. 1964, Goldwater against Nelson Rockefeller. The establishment candidate got pushed aside. Goldwater ended up reinvigorating the conservative movement, 20 years again, it's Ronald Reagan. But that election, we lost everything.
And I know Republican congressmen around the country tonight who are peeing in their beds, scared, because they're going to be on a ticket with Newt Gingrich at the top. Independent voters, women, where Newt has a huge gender gap, you know, swing states. If you're a congressman on that ticket and Newt Gingrich in has a huge unfavorable, you're toast.
BURNETT: Peeing in their beds, that's an unusual image.
But let me ask you, Ronald Reagan --
GERGEN: I thought I misheard that.
BURNETT: He could have said something worse.
All right. David Frum, Ronald Reagan saying thou shalt not speak ill of another Republican.
DAVID FRUM, CNN CONTRIBUTOR: Yes.
BURNETT: It is being violated by everybody about everybody.
FRUM: Well, Ronald Reagan coined that saying when he was holding an enormous lead over all the contenders.
BURNETT: He looked forward to be generous.
FRUM: Exactly, because the ill that the Republican is going to be spoken ill of was him. How he would have felt in 1976 when he was running against Gerald Ford, he found it very possible to speak ill of other Republicans.
I think that one of things that needs to be understood here is, look, the Republican establishment has over the past three years, fed this mood of radicalism. They fed it as a tool against President Obama. And now, this mood of radicalism is threatening to leave the party. A lot of people the messengers they got and is now threatening to leave the party that many leaders think are dangerous.
BURNETT: Lost control of the base or the soul of the party?
GERGEN: It's the same thing you're seeing John Boehner trying to do in the House. you know, it is a party that fractured in a lot of different ways.
But I do want to say one thing on behalf of Newt. I do think one of these charges, it is true that, yes, he's erratic, but I do think he was right in saying he was a foot soldier for Ronald Reagan. I am sure there are times in private as a lot of people around Reagan would say they'd be critical of this or that, but the truth is, I think he was very supportive of Reagan. Michael Reagan came out in his defense today. There was Nancy Reagan saying the torch was passed from Barry Goldwater to Ronny, and then I was passed to Newt Gingrich.
So, I think, you can go after him on other grounds. But that one --
(CROSSTALK)
CASTELLANOS: I want to take a little exception. There's this much difference between these two candidates on where they stand on issues, very little.
This is not a fight for the soul of the Republican Party and who is the most conservative. Newt Gingrich went into a debate in South Carolina, he was attacked, he demonstrated strength. Romney went into that debate, he was challenged, he demonstrated weakness.
We want the stronger candidate. That's why Newt got a boost.
In politics, we have a thing called the law of the fireman. When your house is on fire, your economic house, you want somebody to put it out. You don't care where the firemen slept last night.
FRUM: Of course, he got the buzz by telling you an enormous lie. He got the buzz by opening with a big, what we now know, is a big lie. And that gives you pause.
It's not -- I think what people worry about with Gingrich is, that's not strength. That's anger. And yes, it's true that he speaks to the anger in the party in a way that Mitt Romney, who is obviously not such an angry person.
One more thing about the Reagan. One of the reasons that Newt Gingrich talks so much about Reagan is to cause people to forget he's not a man of the '80s. He's a man of the '90s. His important accomplishments happen in those years '94 and '98. And that is a record that, although it's got a lot of good points, welfare reform, balanced budgets. It also features impeachment and his mismanagement of the government shutdown. By talking about what he was doing when he was a foot soldier, he changes the subject from what happened when he was a leader.
BURNETT: All right, well, we got to leave it there. Although, Alex wins the prize here for the best kind of visual metaphor.
(CROSSTALK)
CASTELLANOS: I'm sorry I wet my bed.
(LAUGHTER)
BURNETT: Thanks to all three of you.
And as you know, we're just a few minutes away from tonight's debate here in Jacksonville, Florida, University of North of Florida, hosted by CNN. The last debate before Florida's crucial winner-take- all primary.
John King, OUTFRONT next.
(COMMERCIAL BREAK)
BURNETT: OK, you are looking at the hall here at the University of North Florida, Jacksonville, where the GOP debate, the last one before Florida's primary will begin just a couple of months with Wolf Blitzer.
All right. Well, John King moderated a feisty debate in Charleston last week. John is with me now.
And, John, feisty, I mean, that was amazing.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It was all right.
BURNETT: All right. Let's start with the biggest fireworks of the night, obviously came when you asked Newt Gingrich to respond to allegations that his ex-wife wanting an open marriage. Here's what he said.
(BEGIN VIDEO CLIP)
GINGRICH: The story is false. Every personal friend I have who knew us in that period said the story was false. We offered several of them to ABC to prove it was false. They weren't interested because they would like to attack any Republican.
(END VIDEO CLIP)
BURNETT: All right. John, you and your team did some digging to find out what really happened. And what did you found?
KING: We did some digging. Remember when he said there that we offered several people to ABC, character witness, that he said would rebut his ex-wife's story. We started digging on this and now we had Speaker Gingrich on the show Tuesday night. ABC said it never happened.
Speaker Gingrich Tuesday night said this.
(BEGIN VIDEO CLIP)
GINGRICH: Oh, that is just plain baloney. I mean, I'll check with R.C. Hammond in a minute, if they are saying that, they're not being honest. They said explicitly the opposite. So, I will check with R.C. because he was briefing me on this the whole way through. We had several people prepared to be very clear and very aggressive in their dispute about that and they weren't interested.
(END VIDEO CLIP)
KING: Again, he said several people who would be very clear and aggressive in disputing that. So, it sounds like he has this group of character witnesses. R.C. Hammond is his press secretary.
Finally, after days of questioning by our staff, he conceded there were no such people. The only people they offered to ABC News were the two Gingrich daughters from his first marriage. They are wonderful ladies, they're big supporters of Newt Gingrich. They, of course, have no first-hand knowledge of any conversations he had with his second wife.
So, what he said in the debate, what he said Tuesday night to us and what he said in other interviews simply is not true. They did not offer those character witnesses to ABC.
BURNETT: So, he just came out -- sorry.
Came out, I mean, lied?
KING: He misspoke, anyway. Maybe his staff told him they sent people up there. They didn't want to answer our questions when they came out and they said, this story is over, stop asking. And we said, no, he said this, you need to answer it and persistent digging from our staff, producer, (INAUDIBLE) did most of the work, she gets the credit. What he said was not true.
BURNETT: All right. So, what happens tonight? This is a make or break debate. This is amazing just to see the importance of debates, I mean, your debate, how important that was. How important is tonight?
KING: Tonight, Florida is the biggest prize yet, 55 delegates here. Romney is opening a built of a lead. Speaker Gingrich knows that. He was more laid back, tried to be more front-runner Monday night. Look for more energy and passion, attacks from the Speaker Gingrich tonight.
Governor Romney is trying to find that mix there. He's been trying to find it the whole campaign -- when to be aggressive and assertive to prove to Republicans he's the guy you want up against Obama, but not to do over the top. So, temperature is going to happen.
BURNETT: Right. I mean, obviously, on Monday, you saw Mitt Romney much more aggressive and you have also the whole role of the audience, how that plays in modern media. And there is an audience tonight.
KING: And our crew is just in there talking to the audience, saying applause when you want to applaud. We don't want to shut the audience out. We want them to applaud. We want them to be involved. We also want them to be respectful and we need them to be respectful.
And I'm sure this will be a good audience tonight. Sometimes that does change the tenor of the debate.
BURNETT: Right. It absolutely can. You can see them all file in. One thing that stood out to me was, you know, you do this at a college campus, good to see both ends of the spectrum. Most of the people in that room are older, and then the people who are out there, young students, passionate --
KING: The reception on campus has been great. You were just making a great point during the break. Whether you are for Ron Paul or against Ron Paul, you have a lot of Ron Paul supporters here. And they know all this stuff about the financial system, and the regulatory environment, the Federal Reserve, that I didn't know when I was in college.
So, that part is good. And they are engaged in the campaign. What happens if Ron Paul doesn't win the nomination, do they stay involved, we don't know. But to see the passion no matter who you're for is great.
BURNETT: Yes. I mean, to hear, you know, 18 to 20-year-olds yelling "end the Fed." I mean, that warms my heart. You think you know them -- what happens to the Fed and our economy is so important. They care.
KING: You think Ben Bernanke is sitting at home right now worried about his job?
BURNETT: Well, you know what made me laugh when I thought about that. If you are going to have anybody run the Fed, Ben Bernanke is the guy. You get the feeling he's reading the book.
KING: Why me, right?
BURNETT: Come on, I'm just trying to do my job. A guy comes from South Carolina.
KING: There you go.
BURNETT: Conservative state.
So, you know, we'll see. It's going to be pretty exciting and John King, thank you. John King, of course, moderator of that crucial debate in Charleston, South Carolina.
But now, the most crucial debate here before the Florida primary. It's going to be a big one. The candidates are all ready to come to the stage. Wolf Blitzer and the debate starts now.
