Herman Cain Adjusts "9-9-9" Tax Plan in Face of Criticism
BLITZER: We'll get back to Libya in just a few moment. Also the dramatic announcement from the president that the war in Iraq is about to end. But there's some other important political news we're following here in THE SITUATION ROOM, including Herman Cain. He certainly shot to the top of the polls with this 9-9-9 tax plan. It turns out his math might not necessarily add up. The Republican presidential hopeful says he's dropping a nine at least for some Americans. CNN's Joe Johns is here in THE SITUATION ROOM. He's working the story. 9-9-9, all of a sudden, maybe not.</s>JOE JOHNS, CNN SENIOR CORRESPONDENT: That's right. It's very interesting, Wolf. Make no mistake, Herman Cain's announcement today is being called just a tweak, but it represents an enormous change in direction in his so-called tax 9-9-9 policy.</s>JOHNS: One thing to be said about Herman Cain, he makes eating crow look delicious. After fending off furious attacks on the biggest policy idea of his campaign, Cain finally broke down and admitted that his one size fits all idea to throw out the tax code and replace it with income tax, business tax, and sales tax at nine percent was actually not for everybody.</s>HERMAN CAIN, (R) PRESIDENTIAL CANDIDATE: If you at or below the poverty level, your plan isn't 9-9-9. It's nine-zero-nine. Say, amen, y'all -- nine-zero-nine. In other words, if you are at or below the poverty level based on family size because there's a different number for each one, then you don't pay that middle nine tax on your income.</s>JOHNS: Cain also proposed creating economic opportunity zones to help depressed areas and made his announcement using a depressed area in Detroit as a backdrop, all in response to the beating his 9-9-9 plan has taken since he started looking like a top tier candidate in the polls, like at the debate on Tuesday.</s>RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: The facts are, reports are out that 84 percent of Americans would pay more taxes under his plan. That's the analysis.</s>JOHNS: This is one of the guys who did that analysis. Roberton Williams of the non-partisan Tax Policy Center talking to us via Skype, he says Cain's original proposal would have placed a huge tax burdens on poor people, and the latest tweaks make it better but don't solve the problem entirely.</s>ROBERTON WILLIAMS, URBAN INSTITUTE: He was very explicit a number of times, saying there would be no special provisions for people at the bottom, no special provisions for the poor. Everyone should pay some tax. Yet he changed that. He said that the poor would be except from income tax. They still have to pay the sales tax.</s>JOHNS: And that's the other highly controversial piece of the plan, because there's no reason why a national sales tax starting at nine percent couldn't be increased.</s>MICHELE BACHMANN, (R) PRESIDENTIAL CANDIDATE: And anytime the federal government needs revenue, they dial up the rate.</s>JOHNS: The other thing that makes Cain's announcement so important today is that he also rolled out a sweeping view of how to revitalize urban areas and economic zones. He's questioning whether minimum wage laws keep people from getting jobs, proposing more tenant control of HUD properties, reviewing local permitting properties and zoning laws, just a whole range of things that are going to get him a lot of attention and controversy, Wolf.</s>BLITZER: Maybe that's what he's looking for. It certainly hasn't hurt him so far. He's going up in the polls.</s>JOHNS: That's right. And people listen now.</s>BLITZER: Joe Johns, thanks very much. Let's talk about what's going on in our strategy session. Joining us, the Democratic strategist and CNN political contributor James Carville and the Republican strategist, former Michele Bachmann campaign adviser, Ed Rollins. Guys, thanks very much for coming in. Ed, let me start with you. What do you think about a tweak, as they say, in the 9-9-9 plan becoming now the nine-zero-nine plan, at least for poorer Americans?</s>ED ROLLINS, REPUBLICAN STRATEGIST: It doesn't matter because it's not going anywhere. I think it go so battered and bruised in the debate the other night, there wasn't one other Republican on stage that supported it, and they certainly won't support it now that it's a zero. I think it was a plan that was more of a gimmick than it was really thought through as an economy policy, and it's not time for gimmicks. We've had too many gimmicks in the past, some from this administration, some from the Congress. We now need a stable overhaul of our tax system and one that makes sense.</s>BLITZER: How do you explain, James, that he has do so well, not only in the national polls, but you look at some of the most recent polls in Iowa and South Carolina, he seems to be atop.</s>JAMES CARVILLE, DEMOCRATIC STRATEGIST: The guy's not changing plans, just area codes. That's one way to look at it. He's goes from 9-9-9 to nine-zero-nine. This happened with Trump. He shot to the top. Then he didn't go. Then the next thing you know Bachmann shot to the top. Then she didn't go. Then Perry shot to the top. He didn't go. Then we got Herman Cain shooting to the top and he's not going to go either. But it shows the level of dissatisfaction you have with the frontrunner Mitt Romney. That's what this entire thing is indicative of.</s>BLITZER: Let's talk about the major news of the day right now, the president's dramatic announcement. He shows up in the White House briefing room and says the war in Iraq will be over at the end of this year when he brings home all U.S. troops. Is it wise, though, and I'll start with you, Ed, for the president to open remarks by saying I promised when I was running for president during the campaign I'd bring the troops home from Iraq. Was that simply smart, because he's getting a lot of heat for opening up his remarks with those words?</s>ROLLINS: I always believe a president who lives up to his promises is doing well.</s>BLITZER: I asked the question because it makes it sound political as opposed to a substantive national security decision.</s>ROLLINS: He's going to be charged as politics, but at the end of the day, here's the bottom line. All of us Americans, James, me, anybody else, we want our troops home. We're tired of this war. The critical thing here is, is it going to work? We've now basically held their hands and rebuilt their country and we've turned their government over to themselves. If the Iraqis can't swim, we're not going back to save them. And I think the bottom line here is as long as this decision works and there's no chaos in the six months after our troops are out of there, it's a good decision. If there's chaos and three months after we're out of there, there's a big request for us to come back, then it's controversial.</s>BLITZER: James, weigh in.</s>ROLLINS: I for one applaud the decision.</s>BLITZER: James?</s>CARVILLE: He kept the campaign promise. I guess there nothing wrong with pointing that out. If it's chaos, we're not going back. We're leaving. I don't know why we're waiting to the end of the year. They're in there with Iran helping Syria. This thing is just a big mess. And hopefully they turn into some Garden of Eden democracy in the Middle East, but even if that fails, we're not going back to Iraq. Bob Gates we'll never get involved in another land war in the Middle East. And I think -- he's the Republican secretary of defense. I suspect he knows more than me. But we're done. We're out of there.</s>BLITZER: Because the nightmare scenario, James, as you know, forget about politics right now. The nightmare scenario is that this enormous sacrifice that America made in Iraq in terms of blood and treasure could be for naught if the Iraqi government of Prime Minister Nouri al Maliki totally aligns itself with Mahmoud Ahmadinejad in Iran and Bashar al Assad in Syria.</s>CARVILLE: Aren't they doing that now? It's my understanding that they're helping Iran help Assad stay in power.</s>BLITZER: They certainly aligned themselves on the Syrian issue. It's, I mean, people are saying, why did the United States spend almost nine years in Iraq if this is going to be the end result?</s>ROLLINS: Well, this may be the end result if we stay there another six months or a year. I think the tragedy of this whole thing is it was ill thought through when we first started it. A lot of Americans have paid a heavy price. I think our military has been superb through it all. It's been Republican and Democrat, both administrations have stayed there. We didn't have necessarily good partners. I think at the end of the day if it becomes chaotic and not a good place, Iraqis, it's their fault, not our fault.</s>BLITZER: Let me change subjects, because this really caught my attention. A new book coming out from a "Washington Post" reporter entitled "Ten Letters." let me read an excerpt from the book, and they we'll discuss. "A few times during his presidency Obama admitted he had written a personal check or made a phone call on the writer's behalf, believing that it was his only way to ensure a fast result. "It's not something I should advertise, but it has happened." Many other times he had forwarded letters to government agencies or cabinet secretaries after attaching a standard handwritten note that read "Can you please take care of this?" This reporter referring to 10 letters the president reads every night from individuals who write the White House with their own personal stories, their own personal appeals. What do you make of this, James, this revelation that on occasion he has written a personal check to an individual that seems in great need?</s>CARVILLE: He's a human being. I mean, he's a terrific father, by anybody's definition. And I think it's nice that he reads these letters and I guess he's overcome with tragedy that's happening to people out here. I'm sure to some extent he wishes he'd do more and it's probably somewhat of a human reaction to do something like that. In a huge sense, I guess it's not going to make much difference, but at least to the person who gets the letter back, a small check, it might make a little difference and maybe helps them feel better. I'm sure that he's not the most emotive guy in public ever, but I'm sure that he feels this and he understands the pain that people are going through. And it's sort of nice to know that me spends time reading these 10 letters.</s>BLITZER: It certainly is. What do you think, Ed?</s>ROLLINS: Ronald Reagan, the president I worked for, he did the same, similar. He read a lot of letters. He sometimes made personal contributions. I think this guy used to be a community organizer. He took care of people. I think it's one of the nicer things I've heard about him, and this is one time I won't take issue with any of his policies. This is a nice gesture.</s>CARVILLE: I'm glad to know that President Reagan read those letters, too. Like President Bush would write a letter to parents of fallen soldiers. I applaud all of that.</s>BLITZER: We are showing a picture to the viewers of the president reading some of those letters. He has made that point. He reads 10 letters a day from individuals, and he's moved by what he reads, and you can clearly see that on his face right there. All right, guys, thanks very much.</s>CARVILLE: Thank you.</s>BLITZER: Moammar Gadhafi's final moments caught by amateur video. Was the dictator executed? We're examining the brand new tapes. Stay with us.