[Brooke Baldwin, Cnn Anchor:] Here we go, full table this morning. Our panel today: we have Mr. Richard Socarides, writer for the NewYorker.com and former senior adviser to President Clinton. Also, Chrystia Freeland, digital editor, "Thomson Reuters". Welcome. And Will Cain with a tie.
[Will Cain, Cnn Contributor:] That's right.
[Baldwin:] We've all been talking about it at the commercial.
[Cain:] New Year.
[Baldwin:] Dressing for us this New York.
[Unidentified Female:] He's got a court date.
[Baldwin:] Yes. We'll talk about the speeding ticket later, just kidding. Christine Romans joining us here at the table as well. Welcome, everyone.
[John Berman, Cnn Anchor:] Welcome, everyone. Our STARTING POINT this morning: we are back from the fiscal cliff abyss. We are in detox from our fiscal cliff addiction, as the case may be. Tens of millions of taxpayers and small business owners exhaling this morning because late last night, the House passed that Senate bill that temporarily brings us back from the depths of that cliff. The final vote: 257 for, 167 against. And you might be interested to know this, House Speaker John Boehner voted yes. So did Paul Ryan, by the way. Here's what the deal means for you and your family: couples earning less than $450,000 a year are spared an income tax hike. Itemized deductions are capped for couples making more than $300,000 a year. Unemployment benefits are extended a year for 2 million Americans. And that awful, thorny alternative minimum tax gets a permanent adjustment for inflation.
[Baldwin:] There are all kinds of battles ahead. We can think of three that we know of that are sort of on the docket. You know, the biggie, raising the debt ceiling. That happens in February. So, of course, the U.S. doesn't default on its debt. And billions of dollars in domestic and defense cuts have only now been deferred. This is the so-called sequestration that happens now two months ahead of us. Two thank you. So Democrats and Republicans are forced to dare we say it, compromise again.
[Barack Obama, President Of The United States:] We can settle this debate, or at the very least not allow it to be so all-consuming all the time that it stops us from meeting a host of other challenges that we face. The one thing that, I think, hopefully we'll focus on in the New Year is putting a package like this together with a little bit less drama, a little less brinksmanship, not scare the heck out of folks quite as much.
[Baldwin:] I want to bring in White House correspondent Brianna Keilar live this morning from Washington. And, you know, Berman kinds of ran through what's in the bill. I want you, Brianna Keilar, to talk about what's not the biggies that are not included in this deal.
[Brianna Keilar, Cnn White House Correspondent:] The biggies and the things that Congress will have to deal with. Well, let's break it down. Some of these things Congress absolutely has to deal with. You've got the debt ceiling, which technically, we've already hit, but the Treasury Department was able to move some money around. So, the U.S. can pay its debts. And the ability to do that expires late February, maybe early March. Congress has to increase the debt ceiling or we will default, the U.S. will default on its obligations. That can't happen, obviously. The other thing is the spending cuts that you mentioned. They're only now averted for two months. So, Congress has to deal with that. And then the other thing is there's sort of a chunk of things that Congress wants to deal with that the president wants to deal with that they'll attach to the things that have these hard and fast deadlines. And that is dealing with long term, the long-term fiscal health of the country through entitlement reform, Social Security and Medicare, and tax reform. It is a lot to accomplish in the next couple of months.
[Baldwin:] OK. So, as we look toward, down that long road, tell me, Brianna, just some of the winners and losers from this whole thing.
[Keilar:] Well, this is obvious. Some of the losers are obvious here, Brooke. If you are earning as a couple, $450,000, or more than that, then you'll be seeing your taxes take a hit, $400,000 for individuals. If you itemize deductions and you're making as a couple $300,000 or more, or as an individual, $250,000 or more, you will see your tax you will see you pay take or your income take a hit there. You'll see that. But there are also some winners that maybe you didn't know about. For instance, the milk, sugar and peanut producers, they have a tax break that they will get to hold onto. Also, unemployed Americans, long- term will see their benefits extended, very key. And doctors who were set to see Medicare payments reduced to them, that won't affect them anymore. And then also, the alternative minimum tax. Brooke, when you cover Washington, you're always talking about the AMT fix, a tax that was supposed to hit the wealthy but because it wasn't indexed for inflation, it would always start creeping up on the middle class, people who didn't make a lot of money. And so, Congress would have to be constantly fixing it. Well, they permanently indexed it for inflation, so I don't have to talk about it anymore and middle class Americans don't have to worry it.
[Baldwin:] Hallelujah for you.
[Berman:] That's the Brianna Keilar carve-out.
[Keilar:] I'm a winner.
[Baldwin:] Brianna, thank you so much.
[Berman:] Obviously, there was so much political drama late last night twists and turns in this whole thing. It looked like the whole thing was going to fall apart. And, finally, it didn't. So why didn't it? We're joined now by Chris Frates. He's a reporter for "The National Journal." He's in our Washington bureau. And, Chris, "The Journal" has put the other tic tac of what was going on behind the scenes during this whole thing. Walk us through it.
[Chris Frates, Reporter, "national Journal":] Well, John, what we're going to report a little bit later this morning is a really fun anecdote. We saw the talks fall apart in the Senate between Harry Reid and his Republican counterpart Mitch McConnell. Mitch McConnell felt the Democratic leader was slow-walking him towards the cliff, to try to get more political leverage. And we learned that when the Republican leader called the vice president, he left them a message and got on to the Senate floor to vote and got a note he had a phone call waiting for him. He walked into the Senate cloak room off the Senate floor, sat down at the phone booth and made a pitch to Vice President Biden to work with him. He said, I'm frustrated, I need a dance partner here. And he essentially said, look, Joe, you know the trip wires here. I'm working with smart people but they don't know how to negotiate and have your experience. Will you help me? Biden said to him, let me get back to you with an offer. That was the first offer that kicked off the back and forth that 30 hours later led to the deal that we have today.
[Berman:] So fiscal political history being made in a phone booth. Crazy. So that's where the late deal actually started. It ended last night with the House vote in that meeting behind closed doors with house Republicans. What one of the Republicans that ended voting for this I think surprise a lot of people. That's Paul Ryan, who was a Republican choice for vice president. Any intelligence on what put Paul Ryan on the yes side of this ledger?
[Frates:] Well, I think, you know, for both, it was interesting that Paul Ryan yes, and Marco Rubio no split. We had, you know, two folks who looked like they might be running for president in 2016 take different tacks on this plan. So, that's something they'll sell to primary voters. And I think for a lot of conservatives in the House, a majority of the House Republicans voted against this thing, and I think there was a frustration that there weren't the spending cuts that they were looking for and Boehner had and relied on the Democrats to put this over the edge.
[Berman:] All right. Chris Frates of "The National Journal", we have the first talking point of the 2016 campaign. Thanks very much for joining us this morning.
[Frates:] Thank you.
[Baldwin:] Thank you.
[Berman:] I want to turn to Christine Romans now to talk about what this means for paychecks.
[Christine Romans, Cnn Business Correspondent:] Well, for most people, the vast majority of Americans your tax rates will not rise but your paychecks will be a little smaller anyway. Here's why: For two years, you've had a break on how much you pay into Social Security, to fund Social Security. That payroll tax holiday is over now. Here's how the increase affects your paycheck. If you're earning $30,000 a year, you'll surrender $50 more a month in those taxes, those payroll taxes. If you're earning $50,000 a year, you'll contribute about $83 more a month towards Social Security, funding Social Security. And if you earn more than $113,000 a year, you'll pay an additional $189 a month in payroll taxes. Now, this was I never thought this was going to survive, last summer, we started talking about we don't think the payroll tax holiday is going to survive the fiscal cliff and it didn't. It was a focus on the rates, the rates you pay, it was the focus on investment taxes, the payroll tax holiday, two years stimulus for the economy, it's over now.
[Berman:] Party's over.
[Romans:] The party is over. Plan accordingly. I hope you have a budget because you're going to two fewer lattes a month, Ms. Baldwin.
[Baldwin:] Christine, thank you very much.
[Berman:] Wow.
[Baldwin:] Moments after the House passed a bill to avert a fiscal cliff, President Obama looked ahead to the next fiscal fight here on the horizon, this congressional vote, as we've been talking to raise the country's debt ceiling. And Jen Psaki served as a traveling press secretary for President Obama's reelection campaign. Jen, good morning. Good to see you.
[Jen Psaki, Traveling Press Secretary, Obama 2012 Campaign:] Good morning. How are you guys?
[Baldwin:] We're well and I think you're well as well with the White House and this thing going through.
[Psaki:] I am.
[Baldwin:] Let me just ask you, because we were sort of asking on the House side, you know, take me behind the closed doors, what the question to you is what happened in the White House? You know, last night, they're hearing, you know, that this vote was going to happen one hour, then another hour, might they amend it, might they pitch it. What was happening?
[Psaki:] Well, look, I think there's no question that everyone in the White House, the president included, is happy to have this vote in the rearview mirror. As you've mentioned this morning, there are a number of other obstacles they have that they also want to get behind them because, you know, avoiding the fiscal cliff, you know, making sure that the country votes, that Congress votes to increase the debt limit is not the president and the White House's idea of a second term agenda. So, you know, I think they were watching closely, they were optimistic. They've been very careful in how they've handled this because they want the will of the American people to remain behind them as they emerge from these obstacles they have to go through over the next couple of months.
[Berman:] So, Jen, John Berman here. One of the things the president said yesterday and he said repeatedly over the last several weeks, that he's not willing to negotiate on the debt ceiling. Explain to me what that means. So, if Republicans then say we're not going to vote for it unless you give us spending cuts he's going to say, "Sorry, we're going to default"?
[Psaki:] Well, look, there are a couple of opportunities, which you have mentioned, over the next couple of months, and Republicans believe they have a couple different bites at the apple. Of course there's the debt limit. They've made no secret of the fact they want to use that as a negotiating tool for spending cuts. But there's also the funding of the government, there's the two-month extension of the sequester. What the president was saying was: I'm not going to play chicken with the debt limit. I've learned my lesson in 2011. This is something that impacts businesses. It impacts markets. It impacts the view of the world of the United States' economy and this isn't something we should be fooling with. And again, he has been very tough in negotiating and making clear to the American people this is what the stakes are, this is what's happening. And right now, he still has them behind him and that's a very powerful thing.
[Berman:] You say he's been very tough. There are people on the left, though, who say he has not been tough. Let me read you a quote from Adam Green, who is particularly angry with the president. He's from the Progressive Change Campaign Committee. He wrote this, he said, "The president remains clueless about how to use leverage in a negotiation. Republicans publicly admitted that they lost the tax debate and would be forced to cave, yet the president just kept giving stuff away." Your response?
[Psaki:] Well, unfortunately, for Adam Green, laws are not made by simply waving a wand, and making it so. It involves compromise. It involves negotiation. And that's what happened here. There's a lot that progressive Democrats, including Adam Green, should be excited about in this package. You know, it's the extension of unemployment insurance, college tax credit, child tax credit, making the middle class tax cut permanent. Of course, it wasn't perfect. But, you know, Democrats have to be careful about not letting perfect be the enemy of the good. And this package is good.
[Baldwin:] Quickly, Jen, do we know we know the president is back in Hawaii with the family after this whole debacle.
[Psaki:] Yes.
[Baldwin:] Do we know when he might be signing this?
[Psaki:] I don't have an update on that. I'm sure he'll want to get it signed as quickly as possible, given how hard they fought, and they'll move on to the next fight.
[Baldwin:] All right. Jen Psaki, thank you so much. We appreciate it.
[Psaki:] Thank you.
[Berman:] Happy New Year.
[Psaki:] Happy New Year.
[Berman:] Checking other top stories right now. Doctors say Secretary of State Hillary Clinton's blood clot could have been fatal, caused a stroke or may be even led to seizures or epilepsy. She's being treated with blood thinners. She should make a full recovery. Former President Bill Clinton and daughter Chelsea, they were both seen visiting her at New York Presbyterian Hospital yesterday.
[Baldwin:] Also, the governor of Pennsylvania going after the NCAA here. Later this morning, he'll be announcing this lawsuit over the stiff sanctions it imposed on Penn State University, of course, in the wake of the Jerry Sandusky scandal. He's the former assistant football coach convicted of sexually abusing all those boys. The NCAA fined Penn State some $60 million, stripped the football program of 14 seasons of its victories under its late head coach, the legendary Joe Paterno.
[Berman:] A sad story of Los Angeles this morning. A photographer was killed last night trying to get a shot, a photo of Justin Bieber. Police say the man snapped pictures of a parked sports car he thought was the pop star. He thought Justin Bieber was sitting in it. The photographer was struck and killed while crossing a freeway to return to his own car. In a statement, Bieber said he was not in the sports vehicle but he sends his condolences to the victim's family. Police have not yet released the photographer's name. Did you guys hear about this? The fact that this guy was killed crossing the street and again, we were sort of talking before the show, it's like here's a member of the paparazzi. But at the same time, so many people, they buy the magazines, right?
[Cain:] That's exactly right. It's like anything like panning for gold or oil, people are going to go where the market is and there's a market for these photographs. They're going to take the risks for the payoff. There's a big payoff for these photos.
[Berman:] We'll talk about that more in a bit.
[Baldwin:] Still ahead this morning here on
[Starting Point:] the lawyer who planned on suing Connecticut over the Sandy Hook school shooting has withdrawn his suit at least for now. He's going to join us next with why he filed it in the first place.