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Erin Burnett Outfront
Mitt Romney and Jobs; Warning Signs; Texting and Driving
Aired May 22, 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: OUTFRONT next the truth about Mitt Romney's work at Bain Capital. Does it add up? Answers.
And a mid flight scare, U.S. fighter jets scrambled. A flight diverted en route from Paris to Charlotte.
And could George Zimmerman walk free? One expert says so, says there's no case. Tonight he's OUTFRONT to make that case.
Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, is Mitt Romney Richard Gere? With all this talk about Bain Capital I had a flashback today to a scene in "Pretty Woman" when Gere who plays a private equity titan takes Julia Roberts, the prostitute he's hired for the week, to dinner with the CEO of a company he's planning to buy out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If you were to get control, and I don't think you will, but if you did, what do you plan to do with the company?
UNIDENTIFIED MALE: Break it up and sell off the pieces.
UNIDENTIFIED MALE: I'm sure you'll understand I'm not thrilled at the idea of your turning 40 years of my work into your garage sale.
UNIDENTIFIED MALE: At the price I'm paying for this stock, Mr. Morris, you are going to be a very rich man.
UNIDENTIFIED MALE: I'm rich enough. I just want to have my shipyard.
(END VIDEO CLIP)
BURNETT: Julia Roberts then says slippery little suckers. All right the image is the one President Obama though is hoping sticks about Mitt Romney. Here are clips from two ads supporting the president running right now.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE, POLITICAL AD: Having a good paying job that you can support and raise a family on is hugely important.
UNIDENTIFIED MALE, POLITICAL AD: That stopped with the sale of the plant to Bain Capital.
UNIDENTIFIED FEMALE, POLITICAL AD: I thought that I was going to retire from there. I had about 2.5 years to go. I was suddenly 60 years old. I had no health care.
(END VIDEO CLIP)
BURNETT: Those stories are wrenching, and they call into question Mitt Romney's claim that he created 100,000 jobs.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: In the business I had we invested in over 100 different businesses and net-net taking out the ones where we lost jobs and those that we added, those businesses have now added over 100,000 jobs. I have a record of learning how to create jobs.
(END VIDEO CLIP)
BURNETT: Is the number real? OK. When pressed on whether that 100,000 job number included the number of jobs lost during his tenure, now, he said net-net, OK? But here is how he responded.
(BEGIN VIDEO CLIP)
ROMNEY: It includes the net of both. I'm a good enough numbers guy to make sure I got both sides of that.
(END VIDEO CLIP)
BURNETT: OK. But Bain's own numbers don't actually seem to support it. We got the numbers from Bain, and they say that Mitt Romney created a net -- I actually did the math here -- 120,336 jobs at 24 companies. Now, Bain actually lays out every company and every number. They pull it from press reports. You have got to give them credit. And they got 40 jobs here, 294 jobs, very specific. The problem is though that Bain invested, as Mitt Romney said, in 100 companies while Romney was the boss, and we don't know what happened at the other 76.
OK, so I went somewhere else. We looked at studies of private equity firms' impact on jobs. There have been several done over the years and a study by the National Bureau of Economic Research evaluating 3,200 buyouts found that companies bought out by private equity firms lose about one percent of their workforce. Now that seems to support the more positive view of private equity which is at firms like Bain take over weak or faltering companies where everyone might lose their jobs, build a stronger company where the remaining jobs are more stable. Maybe that's what Cory Booker, the unfairly maligned mayor of Newark, was saying when he appeared on "MEET THE PRESS" Sunday.
(BEGIN VIDEO CLIP)
CORY BOOKER, MAYOR OF NEWARK: I have to just say from a very personal level, I'm not about to sit here and indict private equity. To me we're getting to a ridiculous point in America.
(END VIDEO CLIP)
BURNETT: Personal, maybe because Booker was referring to Newark- based Thibaut. It's America's oldest continually operating wallpaper company. Private equity firm Riverside bought it in 2006, something that CEO Bob Senior told me today saved the company from liquidation during the financial crisis and he says created jobs. That's the image Mitt Romney wants voters to have. Romney wants voters to see him as this Richard Gere, the one who builds companies. Thanks to Julia Roberts' influence.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mr. Lewis and I are going to build ships together, great big ships.
(END VIDEO CLIP)
BURNETT: So which is the truth? Ed Conard is former manager director of Bain Capital and author of "Unintended Consequences" and John Avlon joins me as well. Thanks to both of you. I really love the Richard Gere thing. You've got to get "Pretty Woman" references in, you know --
UNIDENTIFIED MALE: It's always a win.
BURNETT: Always a win. Ed, let me start with you. You spent a long time at Bain. You are an unapologetic defender of free market capitalism. Obviously your book takes aim at that, but can you just answer the fundamental question here. Mitt Romney is trying to say he created jobs, but let's just be clear here, his number one goal had nothing to do with creating jobs, right?
EDWARD CONARD, FORMER MANAGING DIR., BAIN CAPITAL: I think that's just a cartoonish portrayal of business. People want to forget. They want to pretend that the only thing business is doing is working for investors but what's left out of that, the half truth of it is businesses are working for customers. Customers decide what businesses are going to be successful, whether businesses grow or don't grow. And in the end if you satisfy the customer, you will end up satisfying the investor. But you can't jump straight to the investor without first working for the customer.
BURNETT: OK. All of that is true, but still the way you do that is try to come up with something people want. That's your goal.
CONARD: Absolutely.
BURNETT: Right? As a private investor your goal is to do that and make money doing that.
CONARD: Sure.
BURNETT: Jobs theoretically flow out of that --
CONARD: Yes --
BURNETT: -- but it's not definitional and it's not part of the evaluation process.
CONARD: Well I think they flow out of the success of that, let's put it that way.
BURNETT: So overall though, one percent less -- the studies -- at least the study we looked at which is not the only one out there, but does show that they do net-net slightly fewer jobs --
CONARD: Yes, I think you have to look -- if you look at the big picture, don't forget in the 1800's the Luddites were breaking down the machines because they thought productivity was going to reduce employment, but you know 100-year look shows us that it was completely the opposite. Productivity gains have increased employment. I mean if you compare the United States to Europe and Japan, we have added 40 million employees on a base of 100 million employees in the 1980's. Europe and Japan grew combined about 20 percent, half the rate of the U.S. Why is that? U.S. productivity has been higher than Europe and Japan and our employment growth has been faster than Europe and Japan. We put 20 million immigrants, the families, we gave them homes, we gave their families jobs. We educated their children --
BURNETT: And you're saying that's because we allow people to fire people, turnover quickly. It's free market capitalism --
CONARD: That's because we made businesses stronger and then as a result were able to grow them faster. But none of us investors are being successful if we don't make the businesses that we invest in successful.
BURNETT: John Avlon, the problem in all of this for Mitt Romney is, and it seems to me I mean why aren't they coming out with Thibaut.
JOHN AVLON, CNN CONTRIBUTOR: Right.
BURNETT: Right. Why did I go find Thibaut? I mean I can see why Cory Booker who is an ardent Democrat and believes in President Obama also has plenty of positive things to say about private equity. The two things are not mutually exclusive, right?
AVLON: Mutually exclusive. No, they're not at all, especially if you're trying to turn around a city or a state and you need investors in companies that are in danger of going bankrupt, especially if they have been struggling in your city for a long time. The point of this line of argument the president is making drawing a very clear line in the sand saying this is what the election is going to be about isn't simply about trashing private equity. It's about appealing to middle class voters who have been feeling squeezed for decades now. They feel squeezed by the pressures of big business, by big government and they see high finance coming in and possibly precipitating a massive economic downturn and being the first ones to come out of it smelling like a rose while they (INAUDIBLE) frustrated and squeezed. So it's about whether or not Mitt Romney as a former head of Bain Capital can connect with those folks who have been struggling since way before this recession began.
BURNETT: Right. Whether he can become that second Richard Gere --
CONARD: (INAUDIBLE) what he said. They want to make it an argument about employers versus employees or employees versus employers. And they think that's a winning strategy, but the truth is these commercials vilify all of business because there's not really a difference between what private equity is doing and what business is doing generally. They have to deliver more and more value to customers and they do have to do it at lower and lower costs and they have to do it more successfully than competitors. So are there tough decisions that have to be made along the way? There are tough decisions that have to be made.
AVLON: But, look, when you're shining (ph) a light, when Mitt Romney says he's not running on his record as governor of Massachusetts, he's running on his record at Bain and so therefore, the Obama campaign essentially accepting that term of the debate and say let's take a closer look. Saying that criticizing specific instances is tantamount to a general attack on free markets --
BURNETT: Right.
AVLON: -- doesn't hold up.
UNIDENTIFIED MALE: Well --
AVLON: It just doesn't hold up because all free market -- free enterprise doesn't amount to private equity --
(CROSSTALK)
AVLON: They're different sides of the equation as you acknowledged, right. There's manufacturing. There's the fact that when private equity comes in, they try to take care of debt. They try to make efficiencies. In the long run that may grow jobs, but in the short run it may cost a few.
BURNETT: Right.
CONARD: If you step back and look at the big picture, Bain invested in 350 companies. A small minority of those companies were unsuccessful. The rest of them grew 2.5 times faster than the S&P 500, created almost I think close to $100 billion of increased revenues in the companies. So are they cherry picking off examples of difficult situations where we weren't successful? Yes, they're picking off examples where businesses aren't successful as if businesses could be successful without also having some failures along the way. It's a cartoonish portrayal of business. It's actually very anti-business. It goes way beyond LBOs (ph). I don't think they realize that, but what they're doing right now is they're test marketing commercials for later in the campaign season to see what's effective.
BURNETT: Well it seems to me from a political point of view the Romney campaign should fight back by finding other examples I mean because it is on the table. He did he make it the center so he has got to defend the record and make the case.
AVLON: That's right and the strongest argument he can make is to say, look, I'm a problem solver. I'm a turn around expert. I took companies that were once competitive, then lost their competitive edge and then turn them into competitors again just like I'll do for the American economy. That's the best argument he can make playing offense on this.
BURNETT: Are you going to vote for Mitt Romney?
CONARD: I think everybody knows I'm a major contributor to Mitt so yes, absolutely.
BURNETT: All right, I'm just making sure. Sometimes you know people make an argument that their heart is in a different place.
(LAUGHTER)
BURNETT: All right, well thanks very much to both of you. Appreciate it.
Well ahead new warning signs for President Obama. We have a brand new poll and then this. So you text a friend who's driving, your friend gets into an accident, and you could get sued. This could be a major turning point. There's a case going on right now. And a new and alarming warning about what could happen to the economy if the do-nothing Congress continues to do nothing.
(COMMERCIAL BREAK)
BURNETT: Our second story OUTFRONT two major polls out today showing a tight race for the White House. All right, an ABC/"Washington Post" poll has Obama and Romney statistically tied. An NBC/"Wall Street Journal" has the president up by one point outside the margin of error, but the true story lies under the surface where we find warning signs for both candidates. Oh, and we did find them.
Reihan Salam joins me here and Jamal Simmons joins me from Washington. OK, so I wanted to lay out for each of you, first, the warning signs for President Obama. Talk about those, and then we'll get to Mitt. Warning sign number one, 30 percent of people polled say they are not as well off as when the president took office. That is on par with Bush "41" at 32 percent. The gender gap is narrowing.
President Obama is now up seven percent among women compared to last month when he was up 19 percent and in 2008 he won them by 13 percent. And the third problem, it's a statistical tie on who handles the economy better, 46 percent Obama, 47 percent Romney. Jamal, let me start there. Considering Mitt Romney is trying to run as a business guy it would seem like this is a good thing for the president but you're not so sure in terms of the economic one?
JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Yes, I don't think so. I think the president has got to be a little more ahead of Mitt Romney on this question. Ultimately this is going to be an election that's about the economy and which one they trust the most to be able to handle the economy and all the issues that they face, and so that 46/47 number is a little troubling. The one piece of good news here is it's May and not October, and so he's got a lot of time to fix that and get that number up a little bit.
BURNETT: Reihan, I want to ask you about the gender gap narrowing. Now, the president gave a commencement address at Barnard, a women's college. He did the ABC show "The View" with all women. He was sitting sandwiched between the lovely ladies. His proxies including Nancy Pelosi have been talking now for months about a Republican war on women. If all of that was working, you would think this gap would be getting wider, not narrower.
REIHAN SALAM, CNN CONTRIBUTOR: I think that's absolutely right, and I also think that Republicans just have a structural advantage among men that Democrats have to overcome by having a fairly wide gender gap with women and that's just not happening now so that really is a concern. Another concern in that "Washington Post"/ABC poll --
BURNETT: Right.
SALAM: -- is that that poll sampled Democrats way more heavily than Republicans in a way that might not pan out come Election Day and let's not forget it's a poll of registered voters rather than likely voters. Republicans tend to be older. They tend to be more reliable voters when crunch time comes and so that's another thing that might be a liability. Some of those older married women might actually wind up turning out for Mitt Romney where as some of the younger single women if they're disappointed with the economy, they might not turn out this time around.
BURNETT: Right. All right let's get to --
SIMMONS: Reihan --
BURNETT: Yes, go ahead Jamal.
SIMMONS: One point on that. I think Reihan is right that he has to be a little bit nervous about how the poll is conducted, but also remember it's not just younger single women. It's also older divorced women who are part of that Democratic coalition.
BURNETT: All right, let me get to the warning signs for Mitt Romney. There's one here I really want to get both of you to weigh in on. Number one, among people who say the economy is not so good, they vote for President Obama 58 percent over Romney 36 percent, obviously not a good thing for Mitt Romney. Enthusiasm gap a quarter of Romney voters are not enthusiastic. Only nine percent of Obama voters say the same thing. And when asked the question who better understands economic problems people are having, 48 percent to the president, 40 percent to Mitt Romney.
Reihan, enthusiasm gap, this is obviously hugely significant for Mitt Romney. A quarter of the people who say they'll vote for him aren't enthusiastic. They might not even turn out. SALAM: Absolutely. I think that's a huge issue. But I would actually throw out that the number about who understands your economic problems is a really, really big one. McCain got blown away on that number in 2008. And the thing is if you don't believe a candidate understands where you're coming from economically --
BURNETT: Right.
SALAM: -- you're not going to support that candidate.
BURNETT: Jamal, there's some good news in the economy here though for President Obama.
SIMMONS: Absolutely and I think Reihan is right about targeting -- thinking about that number. This goes back to that issue of trust that we were talking about and ultimately the president has got to be able to convince people, Mitt Romney may have done some things in business but can you really count on him to understand where you are and who you are and what you need? I'm really the one who understands that and that can make the case. If he can get people to buy that he's the one they can trust here he'll be OK.
BURNETT: All right, thanks to both of you. And OUTFRONT next, texting a friend who is driving to meet you. Well, you could get sued.
And an American bound flight diverted. Fighter jets scrambled for a U.S. Airways plane. A passenger comes OUTFRONT ahead.
(COMMERCIAL BREAK)
BURNETT: Our third story OUTFRONT the texting while driving case that could be a game-changer for the whole country. A New Jersey judge is expected to decide this week whether a woman who sent text messages to her boyfriend, who she knew was driving at the time, can be sued for contributing to the crash while he texted her back. The two motorcyclists that he hit in that crash each lost a leg.
Now, texting while driving is illegal in 34 states, including New Jersey. And people who text while driving are 23 times more likely to be involved in a crash according to a Virginia Tech study. Deborah Feyerick spoke to the victims of the crash and she's OUTFRONT with the story.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): The accident happened in New Jersey along this winding country road. Motorcycle buffs David and Linda Kubert were out for a Sunday drive.
DAVID KUBERT, INJURED BIKER SUING TEXTERS: Went around a curve, and I saw a pickup truck coming right for us with -- I saw the young man with his elbows steering, his head down, and he was texting. Next thing I know, he hit us.
FEYERICK: Both David and his wife lost a leg in the head-on collision. Cell phone records show the driver, 19-year-old Kyle Best, was texting a girlfriend Shannon Colonna, virtually at the moment of impact. In a potentially precedent-setting case, the Kuberts are suing them both saying the girl knew her friend was likely driving home especially since the two texted each other almost every day.
D. KUBERT: If Shannon Colonna knew that Kyle Best was leaving work, and I believe she did, and she was texting him, then I believe she's just as responsible.
FEYERICK: Although not physically in the car, the Kuberts' lawyer argues Colonna's texting put her in the car electronically, saying she helped trigger the disastrous crash.
STEPHEN "SKIPPY" WEINSTEIN, KUBERTS' ATTORNEY: It is as if you are putting your hands over the eyes of the driver, preventing that driver from seeing ahead of him.
FEYERICK: Kyle Best pleaded guilty to careless driving, failure to stay in the lane, and improper use of a cell phone. The couple is suing for an unspecified amount in damages. During a deposition, Colonna testified in her words she may have known her friend was driving, but her lawyer argues the suit should be dismissed because quote "a message sender has no way to control when, where, or how a message receiver acts after the message is transmitted." David Kubert lost not only his leg but his job and insurance after the crash.
UNIDENTIFIED FEMALE: It could have been prevented. It was not an accident.
FEYERICK: A judge is set to rule Friday whether the Kuberts can move forward and sue both texters.
(END VIDEOTAPE)
BURNETT: All right and Deb is here with me now. This is a pretty incredible story. What is the reason that they decided to do this, to go ahead and sue both the man who was driving and the woman texting him?
FEYERICK: In part it is an issue of money, unspecified damages, but also the bigger issue is, is they say that the woman who texted knew that the guy was in the car, and by doing so she willingly was a participant to the distraction. And I think it's really to send a message to teens and to people texting out there that if you know you are sending a text to somebody who is driving there are consequences and that is fundamentally what is the heart of their message.
BURNETT: Our Paul Callan was saying this is something that there could be a precedent for this sort of thing in terms of you know if you sell alcohol to a minor and they then drive and someone is hurt or killed --
FEYERICK: Right.
BURNETT: -- you can be sued as the person who sold the alcohol or a parent who a party is in your home, you can be sued for the damage those kids so, so there is precedent.
FEYERICK: Absolutely and think about how many accidents there are every year because of people who are texting. Well if you're driving and you're texting and if you're going to send one, you will maybe think twice. And I think that that's part of the psychology behind this as well.
BURNETT: That's good. I think people who text while driving should go to jail, 10 years minimum (INAUDIBLE) and I'm really only kind of partially kidding. That would stop it.
Still OUTFRONT the do-nothing Congress, tonight a frightening warning about what could happen to the U.S. economy if Congress fails to act and George Zimmerman, will he even go to trial for the killing of Trayvon Martin? One expert says Zimmerman won't go to trial, will go completely free. He's OUTFRONT coming up.
(COMMERCIAL BREAK)
BURNETT: All right. Welcome back to the second half of OUTFRONT.
We start the second half of our show with stories we care about, where we focus on our own reporting from the front lines.
The head of the IAEA says he's reached a tentative agreement with Iranian leaders to allow inspectors greater access to sites where there could be nuclear testing. Now, they didn't specifically that that meant Parchin, this place we have been reporting extensively on. But if it does, that would be a break through.
Meanwhile, Iranian state media reports that scientists have inserted a nuclear fuel rod into a reactor.
We also have new satellite pictures from North Korea's nuclear test site. I'll show them to you. According to defense publication "IHS Janes," the activity is a sign that the country is preparing for a test. The images from April show mining equipment removing earth and debris from a tunnel. More recent tunnels this month show new road networks.
Yesterday, Glyn Davies is a top American envoy to North Korea, told reporters that it would be a serious miscalculation and mistake if North Korea works to engage in a nuclear test. Of course, the U.S. has not said what supplication might be.
JPMorgan's $3 billion trading loss front and center in Washington today. There was a Senate Banking Committee meeting that's kicked off. The Securities and Exchange Commission Chairman Mary Schapiro appeared, along with man you see there, Commodities Futures Trading Commission Chairman Gary Gensler. You saw him right there.
Both told the panel that they're investigating loss.
Also on Capitol Hill, three senators announce their plan to introduce legislation that would remove bankers from Fed boards. Of course, that came up in this whole situation because Jamie Dimon is on the New York Federal Reserve board of directors. The Senators Bernie Sanders, Barbara Boxer and Mark Begich say the current structure poses a conflict of interests.
Well, sales of existing homes rose in April. This is good news, 3 percent to 4 percent higher. The median home price, $177,400. That's up 10 percent from a year ago.
So, where are they going up the fastest? According to data compiled by Fiserv for CNN, here is where you should be looking. They're all in the western part of the country. Madera, California, number one. Oregon has three cities in the top five. These are some of the places that were hit the hardest.
It has been 292 days since we lost our credit rating. We ask every night, what are we doing to get it back?
I'll tell you this, if housing gets better, that will do it. It's the single biggest reason this country fell into what could have been a Great Depression. If housing prices go up, it will mean a miracle.
Which brings us to our fourth story OUTFRONT: members of Congress, consider yourselves warned again. The Congressional Budget Office announcing about an hour ago that unless you take action to prevent the Bush tax cuts from expiring at the end of the year, we'll likely be in a recession early next year.
Now, the end of the year is also when automatic spending cuts start to take affect. That's the whole super committee super fail that we're a little obsessed with.
Beginning of the year $109 billion of those will hit. In other words, the fiscal cliff that we Americans are rushing towards. We've been passionately warning about it for ages, so have many economists.
So, will Washington heed the warning now that the CBO has finally stated the obvious?
On typical Washington fashion, Senate Majority Leader Harry Reid responded to it immediately saying, quote, "We could avoid the so- called fiscal cliff tomorrow if Republicans would agree to extend the middle class tax cuts."
OK. What we need from our leaders is leadership. That statement tells me we're going to be seeing more gridlock ahead.
Doug Holtz-Eakin, former Congressional Budget Office director and McCain adviser. Robert Reich is former labor secretary for Bill Clinton and author of the new e-book "Beyond Outrage" -- that's how I feel when we start talking about Congress and how it deals with some of our problems these days.
OK. So is Congress finally going to wake up because of this, Bob Reich? Does it mean -- we've been saying this for months. Everybody has been saying it for months, years. Is this going to do it for Congress?
ROBERT REICH, FORMER LABOR SECRETARY: Hi, Erin.
Officially, I don't think there's going to be any wake-up. I think one has to be beyond optimistic to think in an election year Congress is going to actually compromise on anything. Now, the hope is that with this warning shot by the CBO, at least behind the scenes staffers and maybe some moderate Republicans to the extent there are any left and maybe some moderate Democrats will get together and begin planning some way of avoiding this fiscal cliff.
BURNETT: Doug, do you think this will be a wake-up call? Because I see that statement from Harry Reid and want to throw my hands up in the air. Obviously, he wants to get rid of the tax cuts for middle class Americans and raise them for everybody else. That's his point of view, but it would seem when the CBO comes out with something like this, the first thing that you want out of your leader isn't just to go out with the line in the sand that you've drawn that hasn't worked so far.
DOUG HOLTZ-EAKIN, FORMER CBO DIRECTOR: It is disappointing. I think there are really three things to take away from this. First, it's a very big deal. I cannot remember the last time the Congressional Budget Office predicted a recession. For them to do so is really quite an extraordinary moment.
The second thing is that they said two things. They said it would be a good idea to avoid the fiscal cliff and a recession, but they also said it would be good to avoid the cliff and take care of our long-term debt problems.
And then that leaves us with number three which is the state of play and the House has, in fact, passed legislation to substitute the sequester and they will pass an extension of the Bush tax cuts and they've passed a budget which takes care of the debt. But on the Democratic side in the Senate, there's zip, zero, nada, and so far, the president has been silent as well.
From where I sit, we really need presidential leadership on this, and the truth is all hands may get forced because if investors start looking and seeing their tax rates go from 15 percent to 44 percent on dividends, they're not going to wait for January to declare a problem. We're going it start to see it in the economy quickly, and that's bad for all incumbents -- House, Senate, and presidents.
BURNETT: Bob Reich, I was talking to John Boehner last week and he said to me -- he had come out with sort of a similar thing to Harry Reid but it was on the debt ceiling. I'm not going to raise it if you don't give me a cut for every dollar I raise it. You know, the Republican line in the sand that they draw.
But he was right when he said one thing, which is I don't see why we should wait until the election. And he got me thinking about something because you're going to have November is the election an then this all happens by the end of December and all of a sudden, we're going to get a grand bargain that solves the sequester and the Bush tax cuts and Social Security, and Medicare and debt ceiling.
REICH: No.
BURNETT: Yes?
REICH: It's a lame duck Congress after the election, and lame duck Congresses are not known historically to do very magnificent things. I mean, it's pretty clear John Boehner and Harry Reid are drawing lines in the sand mainly for bargaining advantage.
The hope is that with regard to taxes and letting the bush tax cuts maybe go on a little bit longer, particularly for the middle class and that's what the president has wanted and he's stated very specifically, but also avoiding that sequestration, avoiding those major cuts that even the Congressional Budget Office says are very dangerous when the economy is still in the gravitational pull of the great recession.
In order to do that, we've got to make sure that at least some people in Congress, some members of Congress and their staff, are working behind the scenes so that after election day there can be a bipartisan proposal. I know it seems very unlikely, but otherwise we're going to be in a recession.
HOLTZ-EAKIN: Erin, I just want to point out, we may not have to until after the election. For the sequestration, agencies are going to start right now to put aside funds so they can meet those cuts and the economy is going to start to suffer from the prospect of those tax increases.
So, it would be wise, as the speaker said, to move in advance of the election if only to cement in place for a short time current policy so that the victors could sort out how they want to lead the nation afterwards.
BURNETT: All right. Well, thanks very much for both of you. We're cheering for people like Tom Coburn, Republican of Oklahoma, Mark Warner, Democrat of Virginia -- those are the guys right now working across the aisle to get something done, reasonable people, and we hope that they succeed.
Well, there was a scare over the Atlantic today. A woman claiming she had a device surgically implanted inside her forced a U.S.-bound flight a U.S. Airways flight, to make an emergency landing.
U.S. Airways flight 787 was headed from Paris to Charlotte this morning. Now, it didn't get there. It diverted to Bangor, Maine.
Now, federal law enforcement officials say a woman on board gave the flight crew a note saying she had a device implanted inside her. Fighter jets were scrambled, escorted the flight in Maine.
Doctors were actually onboard that flight. They examined the woman. She's from Cameroon.
They were able to determine she did not have a bomb because she didn't seem to have any scars. If it were implanted they would have seen that. She is being held by federal authorities tonight. They don't believe at this time it's terror related. Passengers were loaded onto another flight, just got into Charlotte a little bit ago.
But OUTFRONT tonight, one of those passengers, Andrew Kobayashi.
And, Andrew, thanks very much for taking the time to be with us. Tell me what happened and what you saw? How did this go down?
ANDREW KOBAYASHI, PASSENGER: Well, initially they made a call to see if there was a doctor on the plane. I was asleep at that time, but shortly -- I mean, I want to say maybe five or six hours into the flight they made an announcement that there were unprecedented head winds and they would have to make an unscheduled fuel stop in -- they didn't say where, just an undisclosed place and that they would be landing shortly.
And within, 10 minutes of the announcement they had landed. And as soon as we landed customs and border parole came on board and handcuffed a woman and led her off the back of the plane.
BURNETT: Wow. It's interesting from what you said, just a couple things as someone who flies. They didn't tell you what it was. You didn't know it was a security incident. And also, that sounds like a really quick landing, right? Was it that you noticed that, a sharp descent? Ten minutes is fast.
KOBAYASHI: Yes. It was a little strange. Nobody either the crew or any of the passengers seemed to be kind of unduly worried about it. I think everybody was like, oh, this is a strange thing. My girlfriend turned to me and said should we be worried they didn't put enough fuel in the plane.
But nobody seemed too concerned about it outside of it being just kind of minimally a strange thing to have happened.
BURNETT: When the woman was escorted off, did you -- I'm not sure how close Are you sitting and were you able to -- did you observe her at all during the flight? Notice anything about her? How was she acting?
KOBAYASHI: She was probably about six rows behind me. I noticed -- I had gone to the restroom earlier in the flight and I noticed that she had been sitting alone in the back of the plane and seemed kind of sweaty and nervous, seemed on edge, but no more so than anybody who is nervous about flying.
I saw her -- when they led her off the plane, I saw her, she seemed to be a woman in her mid-20s, mid-30s. There wasn't any sort of scuffle when they led her off the plane or anything. It was all done very quickly and very quietly.
BURNETT: Interesting, she was young.
Andrew, thank you very much. What an experience. Thanks for taking the time to share it with us. And, of course, we're going to keep following that. Find out really happened on that plane today.
Still OUTFRON, one criminal expert says George Zimmerman will not even go to trial.
And meet the congressional candidate who believes posing topless will win the election.
(COMMERCIAL BREAK)
BURNETT: And now to tonight's "Outer Circle" -- where we reach out to our sources around the world.
And we begin in Egypt where people go to the polls tomorrow to vote for president. It's the first democratic presidential election in history today. Voting will last two days with a runoff in mid-June if no candidate gets more than 50 percent.
Ben Wedeman is in Cairo and I asked him what voters have been telling him have been driving them.
(BEGIN VIDEO CLIP)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, the polls have been all over the place. This is the first time in Egypt's more than 5,000-year history that Egyptians have had the opportunity to choose their head of state. So let's keep those polls aside.
What are people worried about? The economy, stability, security, all of which have taken a hit since the revolution almost a year and a half ago. But this election is critical. Many Egyptians feel the country will decide whether it should go to a new Islamic order or stay closer to the status quo and bring life a bit back to normal -- Erin.
BURNETT: All right, thanks to Ben.
And now to Mexico where Natalia Juarez, a congressional candidate, has breathed new life into her campaign with a revealing new strategy. Juarez posed topless with six other party supporters for a campaign poster. She says it's a wake-up call to energize voters.
Rafael Romo is covering the story and I asked him whether the new campaign is playing well with voters.
(BEGIN VIDEO CLIP)
RAFAEL ROMO, CNN CORRESPONDENT: Erin, we're still 40 days from the actual election. The 34-year-old philosophy professor has become the best-known candidate for Congress in Mexico. When Juarez noticed her bid for Congress was off to a sloe start, she decided she would be more transparent with voters in a way they wouldn't expect. She has been targeted on social media.
"Who needs brains when you have these" reads one comment on Twitter.
She dismisses those comments saying she's a radical candidate with radical ideas for a better Mexico. And Juarez says this billboard is nothing compared with the publicity she will unveil in the next weeks -- Erin.
(END VIDEO CLIP)
BURNETT: Thanks to Rafael.
Now, let's check in with Anderson.
Anderson, what's coming up on "A.C. 360"?
ANDERSON COOPER, HOST, "A.C. 360": Hey, Erin, keeping them honest tonight in the program. Preaching the gospel of hate.
This is Pastor Charles Worley who's laid out a plan to round up gays and lesbians and surround them with an electrified fence until they die. That's his plan he talked about at the pulpit. You're going to hear his words tonight.
You'll also hear members of the congregation say amen during the sermon. It turns out it's not the first time this pastor has preached this kind of message. How is his church responding? They are holding a special prayer service to decide how to handle this. We checked in with Gary Tuchman, who was there. And I spoke with members of the church.
A second keeping them honest tonight, a story we've been following for weeks -- donations made to charities. Money that people think is going to help disabled veterans when, in fact, not one dime has gone directly to them. Tonight, more details on the murky world of these veterans charities or so-called veterans charities and the one company that we found is at the center of all this fund-raising. One source called the company the financial equivalent of heroin addiction for charities.
All that plus tonight's "Ridiculist," the latest on politics and a lot more, Erin, at the top of the hour.
BURNETT: All right, Anderson, see you in a few minutes.
And now, our fifth story OUTFRONT, the case against George Zimmerman, is it in jeopardy? According to defense attorney David Dow, the Florida neighborhood watchman will never be convicted of murdering 17-year-old Trayvon Martin. Zimmerman, of course, shot and killed the Florida teen on February 26th in a gated community in Sanford, Florida. He says it was self-defense. He's charged though with second-degree murder. After ruling newly released evidence including photos, witness statements, and audio tapes, University of Houston law professor David Dow says it's unlikely the case will go to trial and if it does it will be an acquittal.
David Dow is also the founder of the Texas Innocence Network. He's OUTFRONT with former New York City homicide prosecutor Paul Callan.
David, I want to start with you and understand exactly what the argument you're trying to make. I know you have looked through the evidence and we've got about half of it now has been provided through the discovery. You say the charges against George Zimmerman were brought because of public pressure.
That's the only reason? You think that the evidence so far does not back up a charge?
DAVID DOW, DEFESNSE ATTORNEY: I think that the evidence could back up the charge. I just don't think there's any more evidence -- I don't think there was any more evidence in the middle of April than there was in the middle of March. And in the middle of march, prosecutors decided not to decided not to charge Mr. Zimmerman. In the middle April, they decided to go forward and charge Mr. Zimmerman.
And it's true that they had more evidence, but I don't think the evidence they gathered in that month fundamentally changed any of the important aspects of the case. So I think the most likely explanation rather than they got more evidence was that they needed to placate the public which was demanding some sort of action.
I don't necessarily think it was bad to indict Mr. Zimmerman, I'm simply saying that the evidence that existed that supported the decision to indict him existed in early March.
BURNETT: Right, some people might say they completely messed up then. And thanks to public pressure, they actually did the right thing, even though it took them longer than it should have. But you think the case won't even go to trial. Why's that?
DOW: I wouldn't disagree with that, by the way, Erin.
BURNETT: Yes.
DOW: I don't necessarily think it's a bad thing for prosecutors to pay attention to what the public thinks but I think it's unlikely it will go to trial. Florida has a very expansive stand your ground law. And the way that it works is that Mr. Zimmerman will have to persuade the judge beyond -- by simply a preponderance of the evidence, which means that it's more likely than not, that he was entitled to exercise self-defense under this Florida statute, and that he can persuade the judge by that very low standard of proof, that he was entitled to exercise self defense under the statute and the judge will the dismiss charges against him.
Now, the prosecutors will have an opportunity to appeal that dismissal, but I think it's quite likely that the judge will dismiss the charges at the early stage of this prosecution.
BURNETT: All right. Now, before we get to the -- if it does go to trial, you say he'll be acquitted. Paul, what do you think about his thought it probably won't go to trial?
PAUL CALLAN, CNN LEGAL CONTRIBUTOR: I have to disagree. You know, I do think the evidence has been coming in George Zimmerman's favor. And I think it's a very hard case to win at trial. But I don't see a judge throwing this out. The reason is that George Zimmerman would have to testify at this hearing and assert his self- defense claim.
We saw him testify for just a bit at trial when he was doing the public apology.
BURNETT: Right.
CALLAN: And he blew it. He ended up saying something that contradicted his 911 call. Remember about how old the kid was.
(CROSSTALK)
CALLAN: That was just a 30-second clip. Now imagine a prosecutor coming at him saying did you really have to shoot a 17- year-old kid who's unarmed? I say he's going to fall apart at an immunity hearing and a jury is going to resolve this some day.
BURNETT: All right. So, David, I obviously don't agree on that. But why are you so sure he will be acquitted? And every time this comes up, I have to throw out there. He had a gun, the other guy didn't. That always seems to be one of the basic problems here.
DOW: First of all, let me say I think Paul could be right. It's possible Zimmerman would do a terrible job behalf of himself at the stand your ground hearing. I think we just don't know how that'll play out.
I think if the case goes to a jury, the burden is on the state beyond a reasonable doubt that he committed a crime. I think there are too many conflicting witness statements that it's unlikely that the state will be able to meet that burden and I think that there's enough physical evidence, including contemporaneous reports of physical evidence that suggests that Mr. Zimmerman was involved in an altercation, that it will be somewhere between difficult and impossible for a jury to find him guilty beyond a reasonable doubt.
BURNETT: Paul, why -- special prosecutor Angela Corey hasn't commented on the newly released evidence, but is confident she has a case. What could be the strategy here in terms of the way it's dribbling out? For lack of a better word. You say most of the evidence is in Zimmerman's favor.
CALLAN: Yes, it has.
BURNETT: What, are they saving what they think is the best for last?
CALLAN: I think they are saving what they have, whatever they have that's strong to the end. That would be common strategy.
But the other thing with prosecutors, there are rules of ethics that prevent prosecutors from aggressively commenting about a case while it's pending. They can be accused of unethical conduct, trying to influence a jury. You can't make the same accusations against defense lawyers.
So, her hands are tied compared to the defense attorneys.
BURNETT: All right. Paul and David, thank you very much -- as always.
We know a lot of you feel strongly on this case. Let us know on Twitter what you think of those arguments.
And next, Facebook faceplant. People saying terrible things about Facebook. But, you know what? We like to go for the underdog. So, we found a group that thinks Facebook is great. We showcase them and their song, OUTFRONT next.
(COMMERCIAL BREAK)
BURNETT: So it's been a tough few days for Facebook. The SEC said today it will examine issues surrounding Facebook's IPO in an effort to insure confidence in public market. The company's stock was priced at $38 a share. It opened at $42. Today, it closed just above $31.
That is a grim thing. And the media has called the failure a flop and face flop, all sorts of things, all kinds of easy names to do. But, you know, all is not lost because Facebook still has a lot of fans. An international group from Singapore, Italy, Australia, the U.K., and right here at home the U.S. has taken to Facebook to show their appreciation for Facebook by holding up thank you signs and recording a music video titled "thank you, Facebook."
(VIDEO CLIP PLAYS)
BURNETT: The video has about 75,000 views on YouTube and about 2,000 likes on Facebook. Reviews for the songs have been -- well, rather similar to the response to the IPO, but nonetheless, hey, you got to love something to do that. So let us know what you think of the song. And let us know on Twitter. We're back tomorrow at 7:00.
"A.C. 360" starts now.
