Deal Reached on Tax Cuts; WikiLeaks Founder Facing Heat
BLITZER: A deal has apparently been reached between the president of the United States and the Republican leadership on extending the Bush era tax cuts for another two years, also extending unemployment benefits. You're looking at a live picture inside the Old Executive Office Building. It's called now the Eisenhower Executive Office Building next door to the White House. The president will be walking up to that microphone shortly, addressing all of us. We will have live coverage coming up here in THE SITUATION ROOM, breaking news that we're following. In the meantime, WikiLeaks says a Swiss bank has decided to end its business relationship with the online whistle-blower because the founder, Julian Assange, did not provide proper proof of residence. That puts WikiLeaks in a further financial bind, even as authorities in the U.S. and Britain are stepping up legal pressure. But WikiLeaks may have a doomsday plan to be activated as a very last resort. Brian Todd is looking into this for us. What do we know, Brian?</s>BRIAN TODD, CNN CORRESPONDENT: Wolf, all sorts of pressure on Julian Assange right now. The political pressure over him is white- hot at the moment, some congressional leaders calling Assange a terrorist. Newt Gingrich says he should be treated as an enemy combatant. But right now, the fight Julian Assange is a legal one. And he apparently has an option at his disposal that has a lot of people very nervous.</s>TODD (voice-over): The legal wrangling intensifies over WikiLeaks founder Julian Assange. His lawyer tells the BBC Assange is making arrangements to meet with British police regarding the Swedish arrest warrant for him. Assange is wanted for questioning by Swedish authorities over sex crime allegations. He's denied them. But his lawyer says he's meeting by consent with British police to simply answer questions. U.S. officials, furious over continued leaks of sensitive information, want a piece of this.</s>ERIC HOLDER, U.S. ATTORNEY GENERAL: The American people themselves have been put at risk by these actions that are, I believe, arrogant, misguided and ultimately not helpful in -- in any way. We're doing everything that we can. We have a very serious, active, ongoing investigation that is criminal in nature.</s>TODD: But Assange has a countermeasure. Some call it a doomsday file, a poison pill. Assange's own attorney calls it a thermonuclear device. He calls it an insurance file. It's to be opened in the event that he is captured, killed, or WikiLeaks is taken down. And here to look at it, I'm with Ira Winkler. He's the author of a book called "Spies Among Us." He is a cyber security expert and a former analyst at the National Security Agency. Ira, we just kind of got into this file. Show us what it looks like, with the encryption.</s>IRA WINKLER, CYBER SECURITY EXPERT: With the encryption, basically, open it up. And if the average person was to look at it, all they would see is a bunch of garbage.</s>TODD (on camera): How tough is it to de-encrypt this?</s>WINKLER: If you don't have the password, there are trillions of potential options of recovering the data. You have to go through trillions of trillions of trillions of options to actually get the right sequence of characters back. So that's why the password is so important.</s>TODD (voice-over): Apparently, only Assange or those very close to him have that password. When we got into the file, we saw huge reams of characters in what looked like an exotic language. But if something game-changing happens to Assange or WikiLeaks, he'll blast out the password. Assange says more than 100,000 people who have been able to download the archive will get the decrypted information, and the documents could hit the Internet instantaneously. The file is massive. It's not clear what's in it. (on camera) His side says this is simply for the historical record. It's to preserve history. What do you call it?</s>WINKLER: Well, when you have your own lawyer calling it a thermonuclear device, that kind of says you intend to cause damage. He's trying to...</s>BLITZER: We're going to have to interrupt that report. The president of the United States now getting ready to speak.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: ... between the two parties. Around kitchen tables, Americans are asking just one question. Are we going to allow their taxes to go up on January 1, or will we meet our responsibilities to resolve our differences and do what's necessary to speed up the recovery and get people back to work? There's no doubt that the differences between the parties are real, and they are profound. Ever since I started running for this office, I've said that we should only extend the tax cuts for the middle class. These are the Americans who have taken the biggest hit, not only from this recession, but from nearly a decade of costs that have gone up while their paychecks have not. It would be a grave injustice to let taxes increase for these Americans right now. It would deal a serious blow to our economic recovery. Now, the Republicans have a different view. They believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans. I completely disagree with this. A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit. Economists from all across the political spectrum agree that giving tax cuts to millionaires and billionaires does very little to actually grow our economy. This is where the debate has stood for the last couple of weeks. And what is abundantly clear to everyone in this town is that Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans, regardless of the cost or impact on the deficit. We saw that in two different votes in the Senate that were taken this weekend. Without a willingness to give on both sides, there's no reason to believe that this stalemate won't continue well into next year. This would be a chilling prospect for the American people, whose taxes are currently scheduled to go up on January 1 because of arrangements that were made back in 2001 and 2003 under the Bush tax cuts. I am not willing to let that happen. I know there's 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. 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 2 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 as 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. The American people didn't send us here to wage symbolic battles or win symbolic victories. They would much rather have the comfort of knowing that when they open their first paycheck on January of 2011, it won't be smaller than it was before, all because Washington decided they preferred to have a fight and failed to act. Make no mistake: allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family. That could cost our economy well over a million jobs. At the same time, I'm not about to add $700 billion to our deficit by allowing a permanent extension of the tax cuts for the wealthiest Americans. I won't allow any extension of these tax cuts for the wealthy, even a temporary one, without also extending unemployment insurance for Americans who have lost their jobs or additional tax cuts for working families and small businesses. Because if Republicans truly believe we shouldn't raise taxes on anyone while our economy is still recovering from the recession, then surely we shouldn't cut taxes for wealthy people while letting them rise on parents and students and small businesses. As a result, we have arrived at a framework for a bipartisan agreement. For the next two years, every American family will keep their tax cuts. Not just the Bush tax cuts, but those that have been put in place over the last couple of years that are helping parents and students and other folks manage their bills. In exchange for a temporary extension of the tax cuts for the wealthiest Americans, we will be able to protect key tax cuts for working families. The earned income tax credit that helps families climb out of poverty, the child tax credit that makes sure families don't see their taxes jump up to $1,000 for every child, and the American Opportunity Tax Credit that ensures over 8 million students and their families don't suddenly see the cost of college shooting up. These are the tax cuts for some of the folks who have been hit hardest by this recession. And it would be simply unacceptable if their taxes went up while everybody else's stayed the same. Under this agreement, unemployment insurance will also be extended for another 13 months, which will be welcome relief for 2 million Americans who are facing the prospect of having this lifeline yanked away from them right in the middle of the holiday season. This agreement would also mean a 2 percent employee payroll tax cut for workers next year. The tax cut that economists across the political spectrum agree is one of the most powerful things we can do to create jobs and boost economic growth. And we will prevent -- we will provide incentives for businesses to invest and create jobs by allowing them to completely write off their investments next year. This is something I identified back in September as a way to help American businesses create jobs. Thanks to this compromise, it's finally going to get done. In exchange, the Republicans have asked for more generous treatment of the estate tax than I think is wise or warranted. But we have insisted that that will be temporary. I have no doubt that everyone will find something in this compromise that they don't like. In fact, there are things in here that I don't like. Namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years. And I'm confident that, as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we're going to have to make to secure our future and our children's future, and our grandchildren's future, it will become apparent that we cannot afford to extend those tax cuts any longer. As for now, I believe this bipartisan plan is the right thing to do. It's the right thing to do for jobs. It's the right thing to do for the middle class. It is the right thing to do for business, and it's the right thing to do for our economy. It offers us an opportunity that we need to seize. It's not perfect. But this compromise is an essential step on the road to recovery. It will stop middle-class taxes from going up. It will spur our private sector to create millions of new jobs and add momentum that our economy badly needs. Building on that momentum is what I'm focused on. It's what members of Congress should be focused on. I'm looking forward to working with members of both parties in the coming days to see to it that we get this done before everyone leaves town for the holiday season. We cannot allow this moment to pass. And let me just end with this. There's been a lot of debate in Washington about how this would ultimately get resolved. I just want everybody to remember over the course of the coming days, both Democrats and Republicans, that these are not abstract fights for the families that are impacted. Two million people will lose their unemployment insurance at the end of this month if we don't get this resolved. Millions more of Americans will see their taxes go up at a time when they can least afford it. And my singular focus over the next year is going to be on how do we continue the momentum of the recovery? How do we make sure that we grow this economy and we create more jobs. 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. Thank you very much, everybody.</s>UNIDENTIFIED MALE: ... Democrats behind this plan?</s>BLITZER: All right. So the president of the United States speaking, what, for about nine minutes to the American people, announcing what he calls a framework agreement that will allow the tax rates that were implemented during the Bush administration to continue for another two years, including for the wealthiest Americans, those making more than $250,000 a year. The president says he hates that part of it, but under the circumstances, he had no choice. He didn't have the political power to push back. The Republicans were holding firm. They wanted to continue the tax rates for everyone. They would have voted against continuing the tax rates only for those making less than $250,000 a year. And in two votes in the House and the Senate in recent days, they did just that. Let's assess what's going on. We have members of the best political team on television standing by. I want to go to our White House correspondent, Dan Lothian first. I know you've had some briefings on this, Dan. Is it a done deal now? Do they -- are they 100 percent convinced they have the votes in the House and the Senate to get this through?</s>DAN LOTHIAN, CNN CORRESPONDENT: Well, no one is saying that it's a done deal yet. They are optimistic that they have the votes to get this through. But Wolf, I think what you heard from the president tonight is sort of making a case to justify why he and others were willing to compromise on deeply-held positions. The president believing that this is the right time and the best time to get this done, that this fight should not be prolonged. You heard the president talk about how he did not want Americans to become collateral damage in political warfare. Really believing that this is the best deal that they have. And so, while it may not be perfect -- you heard the president ending his remarks, saying that it may not be perfect -- he believes this is what is needed to help Americans who are hurting, especially during these difficult economic times.</s>BLITZER: Brianna Keilar is on Capitol Hill. Brianna, do you get the sense that a lot of the Republicans are going to be happier with this deal than a lot of the Democrats?</s>BRIANNA KEILAR, CNN CORRESPONDENT: Yes, you certainly do get that sense. Even some, you know, talking to a Senate Republican source, they weren't -- they were emphasizing that the ink isn't dry here and things could still change. But there are going to be a lot of unhappy Democrats as they come to the Hill tomorrow, Wolf. In fact, the White House has a long way to go with making some of them happy. We heard from a Senate Democratic leadership aide that Joe Biden is going to be coming up here to the Hill tomorrow to talk with Senate Democrats, trying to defend this deal. And you heard the president talk specifically about that estate tax. I'm told by one Democratic aide that this is going to be something very difficult for liberal Democrats in the House to swallow. It's going to be a very bitter pill. Because the way they see it with these tax cuts being extended for all Americans, including the wealthiest, when you add on that estate tax, even though it's been zeroed out under the Bush tax cuts, you're talking about $5 million in inheritance. The first $5 million in inheritance that taxes wouldn't have to be paid on. Very tough for liberal Democrats.</s>BLITZER: But Gloria Borger, from what I understand, this is a package deal, and there's not going to be any room for amendments. The members, Democrats and Republicans in the House and the Senate, they're going to have to take it or leave it.</s>GLORIA BORGER, CNN POLITICAL ANALYST: Right. That's why you've got the vice president going up to the Hill tomorrow. It's why you've got -- I've been just BlackBerrying with some House Democrats who are upset. And I think what -- you know, you see what they tried to do here. They tried to give a little something for everybody. Protect the earned investment tax credit, the child tax credit, give 2 percent employee payroll tax cut, taking care of the wealthy, taking care of the middle class. But, you know, the bottom line is what are they going to do next, Wolf? This is -- this is very expensive here. And while it's going to make people happy in the short-term to a certain degree, and liberal Democrats will not be happy at all, by the way, because of the extension of the tax cuts on the wealthy, you're just kicking the can down the road.</s>BLITZER: All right. Ed Rollins, Republican strategist, it looks like none of this is paid for. In other words, there's no spending cuts as far as I can see to pay for any of these things.</s>ED ROLLINS, REPUBLICAN STRATEGIST: Well, clearly the president put a budget up shortly. The Republicans then have an opportunity. If they think they can make cuts somewhere else, to offset some of this, they'll do that. At the end of the day, as Chairman Bernanke said last night on "60 Minutes," now is not the time to cut or to basically do deficit reduction. It's a longer strategy. And I think this -- this is what the compromise is all about. And I think, to a certain extent, this is what this election was about. You know, this is the beginning of a long process which both sides are going to have to give up.</s>BLITZER: Paul Begala, what does this compromise say about the president of the United States?</s>PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, it was interesting. I listened carefully to his speech, and he talked about how symbolic victories were unhelpful to Americans who are out of work. By which I guess he means if he had continued fighting for his Democratic principles on this, that this -- I think he felt like this was the time to compromise. I was also struck that the tone in his comments seemed to be more directed to his own party and sort of scolding, sort of suggesting that Democrats who disagree with him on this are somehow posturing or wanting to, I think he said, fight instead of solve problems. I can tell you, the early reviews from his own party are tough. Somewhere between tough and scathing. I don't know that those comments tonight from the president are going to help sell this package with his party. So I don't know. I think he's got a very tough sell from his own party. I think he'll get his deal. The Republicans seem to love it. And there's going to be probably enough Republicans and Democrats who can pass this. But, you know, I think he's -- he's -- Democrats sense that he's caving.</s>BLITZER: Caving. That's a strong word. Jessica Yellin, some of us who covered the Bill Clinton administration and the losses that he and the Democrats sustained in '94, and then Newt Gingrich became speaker in '95, we saw Bill Clinton moving back towards a more moderate, centrist position. Are we seeing that now to the irritation of the liberal wing of the Democratic Party, President Obama moving towards the center?</s>JESSICA YELLIN, CNN CORRESPONDENT: Well, that's exactly what the White House has termed the professional left is trying to protect -- protect from happening now. That's what they think the president is doing. The progressive change campaign committee is one of those groups that's been so critical of the president over his negotiations on the tax cuts. They put out a statement before the deal was done saying this. And it sounds like the president was, in some part, responding to these sentiments. "President Obama has shown a complete refusal to fight Republicans throughout his presidency, even when the public is on his side. And millions of his former supporters are now growing disappointed and infuriated by this refusal to fight. Obama is demobilizing the troops and demoralizing the public right before he seeks reelection." Now Wolf, that sounds like something of a threat from the liberal wing of the president's own party, saying essentially, look, if you don't stick to some of the principles you promised to stand by during your campaign, we might not back you in your reelection. Those are fighting words, but there is a deep, deep, deep resentment and frustration on the liberal wing of the Democratic Party right now that's more than just talk. There's a real sense of disillusionment with the president.</s>BLITZER: Paul Begala, there may be disappointment on the liberal wing of the Democratic Party, but John McCain just tweeted this. He loves it. John McCain, I say -- in his tweet he says, "I applaud the framework agreement just announced by the president. Now we need to make it happen. We shouldn't raise taxes during a recession." So you're hearing his rival for the presidency applauding what he's doing at a time when many liberal Democrats hate it.</s>BEGALA: Yes. You get the sense, I think, that the Republicans -- I watched your interview with Senator Barrasso. You and Gloria both, I think, sort of drew him out to show that there's -- it seems to be -- I think the Republicans, most Democrats believe, got the better part of the deal. Looks like the Republicans believe that, as well. What you're hearing pushing back from the administration, though, is important. They want to shift it away from the focus on the tax cuts for the rich that the president says he still doesn't like and toward this payroll tax cut, which is something that I've been calling for for a long time, a lot of Democrats. It's mostly a Republican idea, I have to say, but a lot of Democrats have said that would create a lot of jobs. And you're hearing a lot now already from the White House and the administration that payroll tax cut that's in here is going to put $2,000 in the pocket of a couple making $50,000 a year, and that will generate a lot of jobs.</s>BLITZER: Paul Begala, thanks very much. I want to thank all of our members of the best political team on television. Historic day here in Washington right now. The president of the United States, you heard him announcing what he calls a framework agreement, a compromise worked out with the Republicans. It still has to be voted on in the House and the Senate. We'll see if it's a done deal or not. We'll have more coverage, obviously, here on CNN. Stand by for that. Also, Wal-Mart, right now at the center of what could be the largest class-action lawsuit in U.S. history, with huge implications for workers and businesses across the country. Stand by.