Obama: GOP Will Not Hold Middle Class Hostage; White House, GOP Make New Fiscal Cliff Offers
ASHLEIGH BANFIELD, CNN ANCHOR: OUTFRONT next, we are just now learning of new offers on the table from both sides to avoid the fiscal cliff. So big question, do they add up? Plus, it has been three months to the day since terrorists attacked the U.S. mission in Benghazi. Secretary of State Hillary Clinton says the administration has done everything possible but still, no one has been brought to justice. Where do we stand? Also, a new Hollywood movie highlights the work of a CIA analyst credited with tracking down Osama Bin Laden, but here's a big but, it also sheds some very serious light on in-fighting in the spy agency. You got to hear it to believe it. Let's go OUTFRONT. Hi, everybody. I'm Ashleigh Banfield in tonight for Erin Burnett. And OUTFRONT tonight, our top developing story, we are just learning now that President Obama and the White House or rather, President Obama and the House speaker have spoken tonight. Good news. This after they each fired another shot in the ongoing fight over how to resolve this fiscal cliff mess. CNN is now getting details about two new offers that were made and previously undisclosed, too. They kept a pretty tight lid on them. One of them by President Obama, that was yesterday, then a counteroffer by the speaker. That was today. All of this as the president tells ABC News tonight that he is confident that Republicans will not hold middle class tax cuts hostage. So there's a lot of news that's all of a sudden coming out after some relative quiet. Our White House correspondent Dan Lothian who is on the case joins me now by telephone. Because you've been working your sources, take me into the conversation. All of this breaking late today and it sounds good. It sounds at least like there's some movement, Dan.</s>DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (via telephone): That's right. That's always been the issue, because as you know, it was just last week we were talking about the fact that there were no talks ongoing, not even behind the scenes. And now these latest developments and as you pointed out, we didn't even know the White House had submitted another offer yesterday but confirmation coming from a senior administration official that in fact, the White House did submit that offer yesterday to House Republicans. Today, there was a counteroffer from House Republicans, still waiting to find out details of that counteroffer then of course, President Obama having that phone conversation with Speaker Boehner this evening. Encouraging sign and as you pointed out, President Obama as well showing some optimism that in fact a deal will get done. The few details we do know, according to sources, is that this new offer from the White House had $1.4 trillion in revenue. That's down from the $1.6 in the original offer and also, according to sources, deals with real entitlement reform. But the one sticking point we're told by Democratic sources, remains and that is they won't budge on upper income Americans paying more in taxes. The president believing that middle class Americans should get relief, but not upper income Americans -- Ashleigh.</s>BANFIELD: OK, Dan Lothian, keep working the sources. Thanks for getting that to us immediately. It's wonderful. I want to bring in John Avlon and Reihan Salam to talk this through a little bit. First guys, immediate reaction to the fact that we -- we have at least some momentum. I don't know if we can call it momentum, serious momentum, especially since we are still getting some rhetoric, too.</s>JOHN AVLON, CNN CONTRIBUTOR: Yes, it's a little sad we get this excited to find out people are actually talking to each other in Washington. But it's a reality check, sign of the times. It's always better when the two top men who got to make the decision ultimately are getting in a room without cameras and moving proposals back and forth. It's a sign of progress. It's a sign progress in the next 48 to 72 hours. That's probably optimistic, but progress is being made because conversations are occurring. That's good news for the American people.</s>BANFIELD: I hate to say this because it's counter intuitive for a TV news person to say I was really thrilled that we weren't getting a whole lot the last two days, which signaled to me at least maybe these guys have decided it's not good to work this out in the court of public opinion, yet now we're starting to hear a little more. Good news, bad news?</s>REIHAN SALAM, CNN CONTRIBUTOR: I think it's encouraging. I think that among House Republicans there's an emerging view that was earlier on championed by Representative Cole of Oklahoma, wait a second, what we can do very straight forwardly is pass one law that extends all the middle income tax cuts. And another one that extends the whole package including the high income rate reductions and then let the president veto one, let the other go through and we shield a large majority of American households from tax increases. Now, then you have a fight early next year that involves increasing the debt limit where Republicans will have far more leverage in which to make the case for structural entitlement reform. I think there are a lot of people including Senator Bob Corker this past weekend and others who have come to embrace that view. I think that it makes a lot of sense for Republicans partly because I think if we do wind up going over the fiscal cliff as they say, it's psychologically likely to have a big impact.</s>BANFIELD: Are you getting sources to tell you that's what's in the offers, great philosophy, it's great view, but on paper?</s>SALAM: Well, the thing is that mechanically would be the easiest thing to do because the trouble is if you do not take that approach, one thing we've heard, for example, is that President Obama might embrace a tax rate lower than 39.6 percent, 37 percent, 36 percent, 38 percent. But if you do that, then actually Republicans will have to put their stamp on such a deal, whereas if they actually just allow that part to expire, then they're saying you know what, we did our part. But we didn't actually embrace that increase, which to me makes a lot of sense.</s>BANFIELD: Let me throw out the speaker. He made comments earlier today. Since they came in so late we want to play what he had to say about the latest rounds of offers.</s>REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: We're still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach that he promised the American people.</s>BANFIELD: All right, so John Avlon, sounds like more posturing, but I wonder if while in quiet they negotiate, the political posturing goes on as part of the theatre to make sure that they quell all the frustration from their bases. So really, we were way closer to a deal than you or I or anybody else in the media knows.</s>AVLON: Look, there is certainly a lot of partisan kabuki here. The strategy that Reihan just laid out really is in part about making sure people can't get attacked from the right for saying, for example, they violated the pledge. No one voted for proactive tax increase. But John Boehner is very much the man in the middle here. He's a deal maker at heart. He's not an ideologue. So I think a lot of his statements are about nullifying the base of the Republican Party, but the question is where is that common ground? Look, his statement that the president hasn't put forward spending cuts or entitlement reform doesn't pass the credibility test because we know even in 2011, negotiations for the grand bargain that unfortunately for the country fell short. There were offers of significant spending cuts and entitlement reform, notably raising the Medicare eligibility age.</s>BANFIELD: So you are saying from past discussions?</s>AVLON: This negotiation, the president is offering raising the Medicare eligibility age. That is not nothing. That is a big deal, taking on some Democrat special cows. I think the president wants a grand bargain because part of Reihan the fact that we go into another debt ceiling debacle potentially early next year, that's what led to the downgrading of the credit rating. We do not need that again as country.</s>BANFIELD: Despite the fact he says I'm willing to let us go over the fiscal cliff. Just quickly, this is dovetailing what you said before. If the Republicans have to sort of take it on the chin with their base for talking about taxing the rich, could they be now discussing in broad terms how to at least say the Democrats, you're going to take the hit for Medicare, then? We're not going take that.</s>SALAM: Well, the deeper structural issue is this. This is not the first fiscal cliff. We have a fiscal cliff every year with renewing the AMT, with fixing the Medicare payment rate, the so-called doc fix. We make policy in a crazy way in this country. What I think Republicans are trying to do is say let's look at structural solutions that can lower the cost of these programs over the long term rather than doing a patch at the last minute every darn year. That's the way we make policy and it is absolutely crazy.</s>AVLON: Amen.</s>BANFIELD: Don't go out tonight. We could have further details breaking as we speak. Thanks to both of you, Reihan Salam and John Avlon for joining us. Coming up next, on OUTFRONT it's been exactly three months, three months, since terrorists attacked our U.S. mission in Benghazi and yes, you haven't seen a headline about an arrest and any justice in any form. Also, new information about that Navy SEAL who died during a daring rescue mission in Afghanistan. We will go to his hometown, meet the people who knew him best, hear more about him. Also, the nurse who committed suicide after falling for a radio prank, what the radio station is now planning to do to help her family.