[Erin Burnett:] Thanks, John. We're on the "Front Line" with Bernie Madoff's wife. Ruth Madoff says she and her husband were so distraught by the exposing of the Ponzi scheme they attempted suicide. And then Italian Prime Minister Silvio Berlusconi on his intimate "bunga bunga" parties, we can't resist giving you all the details and we have some truly lurid information. And the "Bottom Line" on today's super committee hearing, if they don't cut 1.2 trillion, we could all get hit with a big interest rate hike. Let's go OUTFRONT. I'm Erin Burnett. OUTFRONT tonight countdown to another downgrade of America? The super committee held a rare public hearing today. They're the group of 12 charged with cutting the deficit by at least $1.2 trillion. If they don't do it, we could end up on a rate to higher interest rates and a lower standard of living. Here are the dates we need to watch. November 1st, that's when the CBO says the super committee must submit their plan for review. That is five days from now. November 23rd, that is the deadline for the final submission. And then December 23rd, the final deadline when Congress must up or down vote that plan. The committee must come to an agreement, and Congress has to pass it or automatic across the board cuts will be made, half of them coming from our defense budget. The problem is those cuts don't come until 2013. They are too small to prevent more downgrades. Yes, thanks to Congress, America's economic standing in the world is on the verge of another downgrade. Economist Ethan Harris at Bank of America-Merrill Lynch says he expects at least one more credit downgrade this fall quote, "when the super committee crashes." Note he writes when, not if. OUTFRONT spoke with a lot of major investors today, and they all were in the when, not if, camp. None expected the super committee to save America from more downgrades. Today, Republicans on the committee shot down a Democratic plan to cut up to three trillion. But note the word cut is a little bit misleading as you can cut the deficit by either cutting spending or raising taxes. So who are the people charged with coming up with a plan? The team of 12 politicians, six from each side of the aisle, and one of them is OUTFRONT tonight. Representative Dave Camp, Republican from Michigan, and Representative Camp, really appreciate your joining us. And I'm going to talk about your tax plan out today in just a moment. But first, given this whole debate this afternoon, the Dems apparently offering a proposal, obviously some details of that have leaked out of cuts up to three trillion; they say half spending cuts, half tax increases. Republicans shot it down. What happened?
[Rep. Dave Camp , Michigan:] Well Erin, I'm not going to go into all the details that happened within the super committee but let me just say we've had lots of back and forth, lots of discussions. We all think I think take our responsibility very seriously to try to come to a solution of at least 1.2 trillion, which is our statutory obligation if you laid out as you laid out, before the deadline. And we're continuing to work as hard as we can. But I think these discussions are best left to the meetings, and not to try to characterize them in the press.
[Burnett:] Well I would agree with that because I think every time there are characterizations the other side gets angry, so I appreciate that on this show. I think others in the media do as well. But let me just ask you this. Is it fair to say that you are acknowledged that to get a deal done, there will have to be some sort of revenue increase? Is that fair to say?
[Camp:] I think it's important that we not try to box people in or out; that we continue to have discussions. Obviously that's something that many people on the committee think is important to do. Obviously I'm going to look at everything the committee does through the prism of, what is the best thing to grow our private sector economy, to create jobs in the U.S., and whatever policy it is I think that's the analysis we need to take. And ultimately, I think you're right, we need to get a package or I think there will be an overarching issue of can America deal with the problems that are facing it? Can we address our long-term debt deficit problems? And I hope we can do that.
[Burnett:] Because I heard someone recently say something that was pretty disturbing because it doesn't jive with what I hear from people in the markets, the people who control the interest rates we all pay on our mortgages, credit cards and our whole country pays. Someone had said well look, you know if the super committee doesn't do its job these cuts will happen in a couple of years. They can kick the can down the road. You know Bill Gross from PIMCO, the biggest investor in U.S. treasury debt in the world said to me today the U.S. is kicking the deficit can down the road
[Camp:] Oh I think we all feel how important this issue is. And frankly the country spent more than it's had for 50 years. This is just not a new thing. But we're at a crisis point and I think the preview is what we're seeing in Greece and Europe and we don't want to go in that direction, because if we don't manage this issue now, as you point out, in many ways it could be an issue that manages us. And the decisions then that would be made under a crisis situation would not be appropriate. And now we can address some of these issues in an orderly way, in a way that isn't going to cause tremendous dislocation or discomfort. And we need to do it now. So I think we all feel very strongly about that.
[Burnett:] You also came out with a tax plan. I want to ask you about it. You're saying that you would cut corporate tax rates 25 percent and eliminate loopholes. I believe that that is something President Obama has also agreed with as long as that was revenue neutral. Are you on the same page with him on this?
[Camp:] We are saying revenue neutral and he has said positive things about corporate tax reform. This is the first step in putting a concrete proposal out there. This changes our rates are the highest in the world. We're the only country basically left with this worldwide system of taxation. We need to do like other countries and go to a territorial system so our worldwide companies doing business around the globe that are American companies aren't double-taxed when they try to bring investment back to the U.S. We want that investment to come back. We want it to come back to the U.S. to create jobs here, not to be stranded overseas where it's invested there and the jobs are created overseas. So this is the first step to doing that and I think is a big step to getting the entire aspect of corporate and ultimately comprehensive tax reform done in the Congress.
[Burnett:] All right, well Representative Camp, thank you very much.
[Camp:] Thanks, Erin.
[Burnett:] Interesting idea that a support on both sides of the aisle in part because frankly it gets rid of what a lot of people in America are frustrated about. If there's no loopholes, lobbying to get more loopholes or to take advantage of them wouldn't benefit you. So getting rid of loopholes for a lower rate could make a lot of sense. Gloria Borger is CNN's chief political analyst. John Avlon is a contributor. Good to have both of you with us. So John, do you think that those 12 members get it?
[John Avlon, Cnn Contributor:] I hope so because we really can't kick the can down the road. We need them to succeed. The question is whether they've been set up to fail, because the leadership put forward some of their most partisan members. Now but it was interesting, Congressman Camp, when you asked, would you be open to some revenue increases? Whether that can be achieved through lowering rates and closing loopholes, he didn't say no. It's obvious what needs to be done. Everybody knows it, tax reform, entitlement reform and like Bowles-Simpson said, you can lower rates, close loopholes and erase revenue to pay down the debt. The question is whether they'll have the political will to do that.
[Burnett:] And Gloria Borger, what do you think? I mean I have to say it was interesting today that the Democrats came out with a plan, sort of leaked it out, Republicans shot it down. That's exactly the kind of politics we don't want because then they become more entrenched. Exactly.
[Gloria Borger, Cnn Chief Political Analyst:] Here we go again. You know it's also interesting to me that congressional leaders on both sides of the aisle have started meeting privately with their proxies, if you will, on the super committee. Because people who serve on the super committee know that they can't make a move without their leaders. So they're now starting to caucus, if you will, privately so they can figure out what is in the realm of the doable. To me, you've got some people on that committee who are key. One person I point to is Rob Portman of Ohio, somebody who's a conservative, who has national political ambition. He's been mentioned as a possible vice presidential candidate with anybody who runs and is somebody the Democrats feel that they can talk to. So I think when Senator McConnell appointed him, it was a very important signal that they do want to get something serious done. But again, the tax question is the big question out there. Will they do anything on taxes?
[Burnett:] Right. That is a big question. And of course, it's also the rhetoric that you use around it If you're going to raise revenue, having it not be in class warfare terms would be positive.
[Avlon:] That would be positive
[Unidentified Female:] Yes.
[Avlon:] but it's a question of what's the goal? Is the goal deficit and debt reduction or is tax cut theology going to take the first level? And
[Borger:] You know there really is no center. There is no center anymore. That's you know that's the problem. There is no center
[Avlon:] Not on this committee.
[Burnett:] On this show we're trying to define it. You get sniped from both sides All right, John and Gloria are going to be back with us after this break. We're going to be talking about the latest from baby Lisa the baby Lisa case and what police think they could find from the interviews going on today, plus surprising information in the latest polls. That's what John and Gloria are going to talk about. Some real shock in terms of who's leading in some crucial early states and from the super committee's 12 members to the 12 Caesars. Silvio Berlusconi is in the news again. We can't resist telling you all the lurid details.