Obama Agrees to Extend Bush Tax Cuts
ANDERSON COOPER, CNN ANCHOR: Thanks for watching everyone. Tonight breaking news: President Obama laying out a deal with Republicans on taxes and jobless benefits and takes heat from fellow Democrats. Will they go along with him in the end and which will Americans care more about? That he gave up on a campaign pledge to roll back tax cuts for the rich? Or is he just trying to keep his other promise to reach across the aisle. We're "Keeping Them Honest." Breaking news as well on Elizabeth Edwards: She's stopping her treatment for advanced breast cancer. Her shocking announcement tonight, the latest on that and how she's coping. Her estranged husband John Edwards now at her side. We'll talk to 360 MD Sanjay Gupta about the latest. And later "Crime and Punishment," you'll meet a 14-year-old boy who says he's killed four people; a hit man he says for a Mexican drug cartel. We'll show you how he was recruited at age 12. How the cartel used drugs to turn boys into killers until the boys say the killing itself becomes a high. We begin though with the breaking news on your taxes or if you've been laid off your jobless benefits. With the deal President Obama struck with Republicans on both and the backlash to it inside his party. Mr. Obama agreeing to extend the Bush era tax cuts for all Americans, even the wealthiest, which he vowed in the campaign not to. In return, getting a payroll tax cut and 13 more months of jobless benefits both helping the working and middle class. The President tonight signaling he was reluctantly trading one pillar of his campaign, the one on taxes to preserve another, his pledge to get beyond partisan squabbling.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know there are some people in my own party and in the other party who would rather prolong this battle even if we can't reach a compromise. But I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession. I'm not willing to see two million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home, or their car, or suffer some additional economic catastrophe. So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do.</s>COOPER: President Obama tonight clearly trying to put his move in best possible light. "Keeping Them Honest," though, this is a complete abandonment of his campaign promise on taxes. A promise he made over and over again. Watch.</s>OBAMA: I end the Bush tax cuts for the wealthiest Americans. And it means letting the Bush tax cuts for the wealthiest Americans expire. And rolling back the Bush back cuts to the top one percent. We have to roll back. I'm want to roll back -- We're going to roll back. I'm going to roll back the Bush tax cuts for the very wealthiest Americans. For the wealthiest Americans. For the wealthiest Americans. For the wealthiest Americans. It is true that I want to roll back the Bush tax cuts on the very wealthiest Americans and go back to the rate that they paid under Bill Clinton.</s>COOPER: Well, that was then. These days though, the fact is, that President Obama simply does not have the support of conservative Senate Democrats for doing what he promised. And now in cutting a deal he's also alienating some liberal Democrats.</s>SEN. SHERROD BROWN (D), OHIO: I'm very unhappy about it. You're right. In essence, it takes $700 billion -- borrows $700 billion from China, charges it and puts it on our children and grandchildren's credit cards and gives it to the wealthiest two percent of taxpayers. I mean I -- people say Washington doesn't listen enough. It's clear what the public was saying is -- give the tax -- keep the tax cuts going for the middle class. Extend, maintain unemployment benefits for those in my state, 85,000 Ohio families lost their unemployment benefits last week. The Republicans continue to filibuster that. We should just keep going on that and worry and continue to fight for the middle-class tax break. I -- I'm not at all happy with this. I want to see all the details before I make any kind of commitment.</s>COOPER: Ohio Senator Sherrod Brown tonight on "JOHN KING USA"; and New York Congressman Anthony Weiner tonight not any happier.</s>REP. ANTHONY WEINER (D), NEW YORK: Compromise is an advice I mean, I have no problem -- I mean, we often have to do that that's why we -- we go to Washington and govern about it. But it seems almost as if I missed the part of the fight, like, where was the fight where he said what he believed in. I think that to some degree he underplays his hand. And as I -- as I said today it's almost as if he wants to punt sometime on third down.</s>COOPER: Congressman Anthony Weiner, a Democrat on "PARKER/SPITZER". The President meeting with Congressional Democrats earlier today behind closed doors urging them to support a deal underscoring the message on camera tonight.</s>OBAMA: We cannot play politics at a time when the American people are looking for us to solve problems. And so I look forward to engaging the House and the Senate, members of both parties, as well as the media, in this debate but I'm confident that this needs to get done and I'm confident ultimately Congress is going to do the right thing.</s>COOPER: Well, late reaction tonight from the Republican side, the spokesman for House Speaker-to-be John Boehner releasing the following the statement. Quote, "It is encouraging that the White House is now willing to stop all the job-killing tax hikes scheduled for January 1. We look forward to discussing this proposal with the House Republican members and the American people." We discussed it tonight in all dimensions with former McCain and Palin senior campaign adviser, Nicolle Wallace; GOP strategist Ed Rollins; political analyst, Roland Martin; and CNN's Ed Henry. Ed, key Democrats were summoned to the White House to be briefed on this deal. What do we know about what happened at the meeting and is it a sign the White House is worried about the anger -- the anger on base on the left?</s>ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They're very worried about it, Anderson. I talked to some senior Democrats tonight; they said it was a very tense meeting at the White House. You had some of the Democratic leaders telling the President in private they don't understand how he could give up such a bedrock principle dating back, as you catalogued there to the 2008 campaign. And they also don't -- don't understand as Sherrod Brown told John King, how when the public polls show that many Americans believe the rich should be paying more in taxes why the President with all his rhetorical gifts could not engage the public and make a convincing case here? The flip side of course, though, when you talk to senior White House aides here tonight, they say look, the President was staring at the cold political reality, that he doesn't have the votes, particularly in the Senate to get what he wants done which is just passing the middle class tax cuts. And number two, he's staring at 9.8 percent unemployment an unprecedented strength of -- of unemployment in terms of consecutive months, over nine percent. We're close to double digits now and if he -- the only other viable option here was to do nothing. Let Congress go home. Let the Bush tax rates expire and then come January 1st, basically, every American would get a tax increase. That was the only other viable option he had. They had all these other symbolic votes on Capitol Hill last week and it went nowhere --</s>COOPER: Right.</s>HENRY: -- it was time to move forward in this debate and that's their bottom line.</s>COOPER: Roland, in your blog today, you wrote and I quote, "Frankly, the Republicans are going to play chicken with the Democrats and force them to blink because they know Dems and President Obama don't have the stomach to fight. Is that really fair to say he doesn't have the stomach to fight? Isn't he the guy who got elected saying he wanted to bring all sides together and get people in the room and come up with compromises?</s>ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Ok, every president says that. I remember my fellow Texan George W. Bush said the exact same thing, when he ran for president. And I was sitting here reading a tweet from a journalist, friend of mine David D.; he said the New England Patriots are whipping up on the New York Jets like the GOP whipped up on the Democrats today when it came to tax cuts. And -- and when -- when Ed just laid out what -- what they felt they didn't have much room, that's because the GOP as I wrote, like I say, look, you're going to blink. What they didn't do is tell the GOP, wait a minute are you going to allow 95 percent of Americans not to get tax relief? Are you willing to sacrifice the middle class to get tax cuts in order for you to extend it for the top two percent of the wage earners? That was never on the table. Not only that, Anderson. Look what happened, you extended the Bush tax cuts for the top tier for the next two years but you only extended unemployment benefits for 13 months? Why did the White House even say, fine, two years for them? Two years for the unemployed.</s>COOPER: Right. Nicolle did -- did the President blink?</s>NICOLLE WALLACE, FORMER MCCAIN CAMPAIGN SENIOR ADVISER: I actually don't think the politics on this are that bad for Barack Obama. With the voters that -- that made the deciding set -- over the deciding factor in his election. I think independents will be heartened to see him keep one of his other campaign pledge which was what you alluded to getting everyone in a room and working on a compromise. I think that the disillusionment with Barack Obama, the reason these numbers have plunged from 80 percent the week he was inaugurated to, I think they hover somewhere below George W. Bush's these days is because what people thought they were getting was a guy who could work with the other side and -- and -- you know pass reasonable, sometimes moderate, compromises.</s>COOPER: Do you think, though, Ed, that Republicans see this as a sign of weakness? That basically this is a victory for them?</s>ED ROLLINS, REPUBLICAN STRATEGIST: No, I think what they see it as is getting this economy moving again. And I think they basically now see a president, unlike Speaker Pelosi earlier this week, who's willing to work. Has read the tea leaves from the election where they lost 63 House seats and six U.S. Senate races. And basically, he has to deal now not with the weak and the lame, he has to deal with the leadership of the Republican Party and if -- if he wants to have any government cutting taxes or doing whatever in the future -- cutting spending they basically have to work together.</s>MARTIN: And Anderson, one second. First of all, we keep talking about the election that took place on November 2nd. Haven't we heard for the past month from Republicans as well as Democrats, deficit, deficit, deficit. So what happened to the deficit conversation as it relates to this -- this particular tax break? The deficit will increase not only for unemployment benefits but also for extending the tax cuts. So it seems that easily the deficit argument sort of moves sort of like the wind blowing.</s>COOPER: Roland I understand.</s>ROLLINS: Just one quick point. Why, if rich people keep their money and spend it in the economy, it's a bad thing? And if the government takes it away from -- and spends it on run-away spending programs it's a good thing?</s>MARTIN: Actually you never answered my question.</s>ROLLINS: You've never been able to make that argument to me.</s>MARTIN: No, no, no. No. Answer my question.</s>ROLLINS: And at the end -- at the end of the day getting this economy moving and the chairman last night, the Federal Reserve on "60 Minutes" said now is not the time to do deficit spending. It's a long term thing. Now is the time to basically get this economy moving that'll benefit the President and benefit them all?</s>MARTIN: Well, I'm just exposing the fact that this whole deficit discussion has been a fraudulent conversation. It's always a deficit conversation as it relates to the people who are most in need but again, when you talk about the deficit when it comes to those who are making more than $250,000, likely every single person on this panel --</s>COOPER: Nicolle what --</s>MARTIN: -- the deficit conversation goes out the window.</s>COOPER: What about to his point, though --</s>WALLACE: What?</s>COOPER: -- obviously, look this will add $700 billion to the deficit by -- by not -- by having tax cuts?</s>WALLACE: Right, but I -- I think the political reality, at least for Republican voters is that all deficit spending is not equal. I think Republicans have been engaged in a philosophical debate for the last two years. We were talking about how Barack Obama has done a great job at expanding the tent on the Republican side and the tax cut discussion, I think for many liberals is about the rates at which you tax people.</s>COOPER: Do you argue that this --</s>WALLACE: -- to conservatives -- but it's part of the philosophical debate about the role of federal government in American life. So giving back people's money, no matter how much they make, is always a good thing.</s>COOPER: Roland -- Roland you could also argue that this is the only form or the only new form of -- of -- of stimulus spending that anybody in Washington is going to get this year. I mean, that -- that any kind of big government stimulus thing is not going to be very popular particularly with Republicans coming in and at least with this, as Ed pointed out, maybe you have wealthy people saving some money and also spending some of this money?</s>MARTIN: And how did that go for the eight years of the Bush tax cut? We keep talking about how we got ourselves into this economy. I'm simply making the argument how has that worked thus far? When you talk about losing 500,000 jobs a month and all of a sudden now we're scraping by with 30,000 or 40,000? What did it actually get us? It got us higher deficits. I'm just saying, I think I just it's amazing how the deficit conversation has just magically disappeared a couple weeks after the election.</s>ROLLINS: Spending, spending got us higher deficits, not higher taxes.</s>MARTIN: Ok, ok.</s>ROLLINS: Spending got us higher deficits and we continue to do that.</s>MARTIN: But even -- even the economists will say, that those same Bush tax cuts contributed to the federal deficit.</s>ROLLINS: The chairman of the Federal Reserve who really has something to do, not a president, not a Congress, but really the chairman, he basically said last night, if we had not put $3.3 trillion of Federal Reserve money into this economy, it would have been ten times worse. So at the end of the day, there has been spending. There's been plenty of spending. The whole system is not about the tax cuts. It's about the banking system. It's about bad loans that were made and what we got to do is get the confidence back in the business community where they start hiring people again and putting their money back in.</s>COOPER: And -- and --</s>MARTIN: So you're saying the move by the Obama administration was a good move?</s>COOPER: Ed Henry, does this allow the White House to try to get some stuff done in this -- in this lame-duck session now with Congress?</s>HENRY: You're absolutely right. That's a big part of this. It's to not let this drag on for another week, ten days. Try to get the new START Treaty, the arms reduction treaty with Russia through, also try to deal with -- with repealing "don't ask don't tell." Those are big, big things this president wants to get done. They're going to be hard enough on their own. If the tax fight has been log jamming everything he never would have gotten any of those other things done. The other point is, long term he has a problem with the fiscal mess in terms of dealing with the debt as Roland is saying. But short term, as Ed Rollins is just saying you have the Federal Reserve chairman saying, look, five or six years, maybe more of this unemployment. So short term, this president has to do something about jobs. It was a difficult choice but he made it.</s>COOPER: Ed Rollins, Ed Henry, Nicolle Wallace and Roland Martin, guys thank you very much. It's a good discussion.</s>MARTIN: Thanks very much.</s>COOPER: Let us know what you think. The live chat right now at AC360.com, it's up and running. Let us know what you think. Up next, the very latest on Elizabeth Edwards, maybe not a surprise announcement today but shocking, nonetheless. The country has been following her fight against cancer and now comes word she's discontinuing treatment. We'll tell you what her doctors told her and what family sources are telling us. And we'll talk to 360 MD Sanjay Gupta. And later "Keeping Them Honest": Arizona cutting state money for life saving organ and bone marrow transplants. Arizona's Governor Jan Brewer blaming President Obama's health care reform; the vote to cut the funding came before the health care reform even became law. Find out what happened when we asked her to come on the program and defend her position tonight.