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Interview with Representative James Clyburn; Low Voter Turnout; Voter ID Laws

Avlon, John; King, John; Salam, Reihan; Watson, Ivan; Lah, Kyung. Erin Burnett Outfront; New York  New York: CQ Roll Call. (Jul 25, 2012)

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The Senate passes a tax plan that is expected to fail in the House. Can Barack Obama depend on 2008-level support from black voters in November? The Pennsylvania voter ID law is being challenged in court.








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19:00

End: 20:00

JOHN AVLON, CNN CONTRIBUTOR: OUTFRONT next, playing chicken with

the fiscal cliff. Today, the Senate hit the gas and headed towards

the edge and the U.S. and Russia at odds over whether officials have

the right to confront some Americans in their own homes. And new

details are coming about the young man who police say shot and killed

12 people inside a Colorado movie theater, plus, one of the victims

who was shot three times has just been released from the hospital and

he's OUTFRONT tonight.

I'm John Avlon in for Erin Burnett. OUTFRONT tonight, playing

chicken with the fiscal cliff. Today the Senate appeared to take

action on extending the Bush era tax cuts, appeared being the keyword.

Senator Majority Leader Mitch McConnell announced he would not

filibuster the measure. That's the reflexive maneuver that makes 60

votes the bar to get anything done in the Senate.

Instead he allowed a straight up-or-down majority wins vote on

the two-party's dueling plans. The Republican plan, extend the tax

cuts for everyone and President Obama's plan, extend the cuts for 98

percent of Americans. That's households making under $250,000 a year.

But why would Senator McConnell do such a thing?

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The only way to

force people to take a stand is to make sure that today's votes truly

count, by setting these votes at a 50-vote threshold, nobody on the

other side can hide behind a procedural vote while leaving their views

on the actual bill itself a mystery, a simple mystery to the people

who sent them here.

(END VIDEO CLIP)

AVLON: And tonight, we now know where everyone stands. The

Democrats' bill narrowly passed, 51 to 48 with two Democrats, Joe

Lieberman and Jim Webb opposing. The Republicans' plan failed. And

just to give you an idea of how big Democrats thought today's vote was

the vice president himself was there in the big chair in case he

needed to break a tie. Now on the surface, this may look like a big

win for the president and his party.

But before you break out the champagne, here's a reality check.

This is all just political theater. No real legislation that will

affect you or me came out of Capitol Hill today. And every member of

this kabuki Congress knew it. Instead, we're still playing chicken

with the fiscal cliff, which includes payroll taxes going up,

emergency unemployment benefits ending, 1.2 trillion in so-called

sequestration cuts and tax cuts expiring for everyone automatically.

Now, the CBO says if Congress lets this happen, economic growth

could contract by 1.3 percent during the first half of 2013. The

agency says would probably be judged a recession. Now keep in mind

our economy is only projected to grow between 2.2 and 2.8 percent next

year. Here's what is even worse.

Not only are we speeding towards that fiscal cliff, we're wasting

money with all this mindless bickering. This week, we actually

learned the cost of all this sandbox politics, $1.3 billion. The

Government Accountability Office calculated the cost of last summer's

debt ceiling debate. A fight in the name of fiscal responsibility

that essentially held the full faith and credit of the United States

hostage actually ended up costing taxpayers an additional $1.3

billion.

And as you hear it on this show every day, it's been almost a

year since we lost our AAA credit rating. And it's all because of

Washington's inability to work together. OUTFRONT tonight, one man

who's a leader in the House and a member of the Super Committee which

couldn't ultimately make a deal, Democratic Congressman James Clyburn.

It is good to see you sir.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: Thank you. Thanks for

having me.

AVLON: You've been in Congress for over three decades, so my

first question is has it ever been this bad and who could you make a

deal with on the other side of the aisle?

CLYBURN: Well I've been here a little short of two decades. I

came here in 1993. But from afar, I have seen it this bad, maybe not

over the deficit and over the budget. But I can remember the hustles

and tussles back in the '50s and the '60s. I'm just old enough to

remember all of those things and had a great interest in it. So I

would say to all of the viewing public, the only thing that's

different today than from 30, 35 years ago is the fact that there's

instant news now. Everything is done in real time. And

communications are so much better, and people are a little more tuned

in. But these kinds of things are not all that strange to the

Congress.

AVLON: Well, then give us some assurance. Tell us that behind

the scenes at least there's some constructive conversation going on

about how to deal with this fiscal cliff before we go over it.

CLYBURN: Well, I believe that the budget priorities committee,

the committee on budget priorities and policies, they have said to us

that this is not really a cliff in the common sense of the word, but

more like a slope because I do believe that even after the elections,

there is plenty enough time for us to come back here in a lame duck

and do what is necessary to extend budgetary considerations for at

least a year while we'll have time to really work on things we need to

do. And that is to have the massive overhaul of our tax code. I

think that we're in the trouble we're in today not so much because of

people's priorities but because we have a problem with our tax code

that needs to be fixed. I think that's what's important about that

vote today.

(CROSSTALK)

AVLON: Well but, Congressman, you know that approach of, we'll

all get together and work together after the election never -- someday

never seems to come. You know you were on the Super Committee.

CLYBURN: Yes.

AVLON: And Republicans say that there was never a serious

proposal from Democrats to deal with entitlement reform. So just help

clear that up tonight. What specific concessions on entitlement

reform did you and your fellow Democrats put forward on the Super

Committee?

CLYBURN: There were a lot of considerations given and I think

the -- you remember Senator Baucus brought an issue to the table that

had massive entitlement controls. The last time I checked, he is, in

fact, a Democrat. I would ask you to ask those Republicans, what kind

of tax cuts, what kind of revenue (INAUDIBLE) did they ever bring into

serous discussion? They never did bring any.

AVLON: OK.

CLYBURN: And so that's where the problem was. We're supposed to

have the people living on fixed income, people getting Medicare,

Social Security, Medicaid, they're supposed to make all the sacrifices

while wealthy people continue to pump their earnings off shore and not

even pay taxes on them. So this is the kind of stuff -- there's

another report out today about the trillions of dollars that are being

hidden in offshore accounts by very wealthy people while we're talking

about making poor people suffer entitlement cuts.

AVLON: Well, Congressman, thank you for coming OUTFRONT. Let's

hope a deal can get made before we go off that fiscal cliff.

(CROSSTALK)

AVLON: Still OUTFRONT tonight President Obama is hoping to

secure reelection with the help of black voters, but do those votes

add up?

And the mother of baseball legend Cal Ripken, Jr. abducted at

gunpoint but released, what we're learning about the kidnapping and

the suspect, and new details about the suspected gunman in the

Colorado movie theater shooting.

(COMMERCIAL BREAK)

AVLON: Our second story OUTFRONT tonight, can Barack Obama

depend on 2008-level support from black voters in November? A new

report by the National Urban League says African-American voters could

tip the election this year by staying home and costing the president

crucial votes in battleground states. And minutes from now, the

president is taking his message straight to the Urban League. So how

concerned should the Obama campaign be? Well John King has been

breaking down the numbers. John, what states could be affected here?

JOHN KING, CNN SENIOR POLITICAL CORRESPONDENT: In a word, John,

they should be very concerned and let's go through the states. In the

end, politics is about math, addition and subtraction. That Urban

League study says about 65 percent of African-Americans turned out in

2008 and they say if it dropped back to 2004 levels that would be

about 60 percent. If it dropped back, the Urban League study says,

good-bye, North Carolina.

That's a state the president carried last time. About 25 percent

of the vote this year in North Carolina will be African-Americans. If

numbers drop, if that percentage drops and turnout drops, well then

the president it says, the Urban League says will lose North Carolina.

In Virginia, 50 percent of the vote just in Richmond, the capital

city, is African-Americans, 20 percent of the votes statewide in

Virginia, again if turnout drops, the Urban League says probably that

one gone from the president's column.

It also says Ohio, John -- we know Ohio was always the mother of

all battlegrounds. About 50 percent of the vote in Cleveland is

African-Americans. Democrats need that cushion. You see how big of a

cushion the president got there four years ago. Democrats need that

cushion from African-Americans in Cleveland to win statewide. Again

if that turnout is down, the president would be at risk. The report

also says Michigan would be at risk.

Another state, this might surprise you, Florida could be at risk,

only about 12, 13 percent of the vote statewide in Florida African-

American, but about 20 percent of the vote down in the Miami area,

African-American. That is another state that could be at risk. And

John, even Pennsylvania, people will say, what are you talking about,

a nine-point victory for the president last time. But if African-

American turnout is down significantly, even Pennsylvania could be at

risk.

AVLON: So let's do a deep dive on the "Keystone State" here.

Really walk us through how Pennsylvania could be in play if African-

American vote doesn't reach those levels.

KING: Let's come west to east. Most of the African-American

vote is in the east in Philadelphia. But most people believe that

Mitt Romney will do better than John McCain. You see all this red in

the western part of the state, but a lot of these counties were closer

in 2008 than they were in 2004 and 2000. People think Mitt Romney

will do better than John McCain.

Then you come over here, Scranton, Allentown, Redding, these are

places that Barack Obama struggled in the Democratic primaries. If

Mitt Romney can do a little bit better again against blue-collar white

workers, people who work with their hands, he can do better, then we

come right in here to Philadelphia and the suburbs. This is where the

state is always decided, John.

I want to show you this right here. Of the president's big

margin statewide, much of it, the overwhelming bulk of it came from

this whopping size victory in the city of Philadelphia. We went to

Philadelphia today to look at the turnout operation. I was there

several times back in 2008. The campaign got an early start because,

why? African-American unemployment is high. It knows that could have

some people discouraged saying, hey, he's been president for 3.5,

almost four years now, why should I vote?

They also think there could be complacency. The margin was so

big last time they think a lot of African-Americans will say, my vote

doesn't matter. The president is going to win in Philadelphia area.

They also, John, think this is an important factor. History had

volunteers pounding on the doors of Obama campaign officers four years

ago.

African-Americans wanted to be part of making history. I was

there today at one campaign office. It was very, very busy, but even

people there concede the point that it's harder the second time

around. He's an incumbent president. You're not making history.

You've got a tough economy especially among younger African-Americans,

so the Obama campaign has this advantage.

There was no primary challenge. They had been working at this

for months and we saw that activity today, but that activity is part

of the worry. They know if the numbers are down here in Philadelphia

and Mitt Romney can do a little better out in the suburbs, then you've

got a battleground state.

AVLON: John King, fascinating analysis. As we know, every vote

counts. Thank you.

Also in Pennsylvania, a shocking revelation from the state about

its controversial new voter ID law, which is being challenged in court

today that a law requires all voters to show photo ID, something say

critics will depress turnout and unfairly target minorities and

Democrat-leaning voters. Supporters argue it's necessary to prevent

voter fraud, but this legal document, in this document, the state

admits that it is quote, "not aware of any incidents of in-person

voter fraud in Pennsylvania." In addition, the state says it has no

evidence to prove that, quote, "in-person voter fraud is likely to

occur in December 2012 in the absence of the photo ID law."

Reihan Salam and Jamal Simmons join me. Welcome. Good to have

you both on set.

UNIDENTIFIED MALE: (INAUDIBLE)

AVLON: Reihan, if the state is admitting that photo -- this

photo ID law could not -- is not going to have an effect, that this is

not a problem, what's the fight about? What are we talking about?

Why is this necessary?

REIHAN SALAM, CNN CONTRIBUTOR: Well I think that you might be

misinterpreting what was said. Here's the thing. Prosecutors are

very stretched and they have limited resources in terms of what they

can investigate and what they can prosecute. And voter ID fraud,

voter fraud that is, is something that hits a relatively low priority

issue partly because it's very fraught (ph), so you don't go after

those things.

You don't investigate them. You don't prosecute them. That

doesn't mean that you don't try to take the necessary steps to prevent

voter fraud from happening in the first place. There's a lot of

financial fraud that happens, John that doesn't actually get

investigated and doesn't actually get prosecuted. That doesn't mean

it's not there. That doesn't mean you don't take prudential (ph)

steps to prevent it.

AVLON: I just think you know if this was a real problem, they'd

be saying they have some credible case, a single credible case to make

in court and they haven't. Let me ask -- just go to Jamal for a

second because right now as many as 758,000 people in Pennsylvania

don't have the required photo ID. So that's larger than Obama's

victory over John McCain in the state in 2008. So right now, CNN, we

have Pennsylvania leaning Obama. But is this a real problem for the

Obama campaign?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: This is a problem. I've

got to say first of all, I must have the worst timing in the history

of television because this is my virgin (ph) experience here in the

OUTFRONT studio and you are my first. Where's Erin?

(LAUGHTER)

AVLON: I'm sorry to disappoint you, Jamal.

SIMMONS: Back to serious. You know this is a really big problem

and as the attorney general said recently, this is almost like a poll

tax because for many people who do not have photo ID, who have to go

in and register for photo ID, get their driver's license or get their

birth certificate, it's going to cost them money to get those

documents before they go in to see the secretary of state, so that's

going to cause people a problem. And if you're a poor or elderly

person who doesn't have a hold of your documents, this could be a

really huge impediment to you showing up and voting.

AVLON: It certainly could potentially. Reihan, we had a very

heated animated discussion a little while ago featuring a member of

the GOP leadership in Pennsylvania making a claim in front of cameras

about the impact of this voter ID law. Let's have a quick listen.

(BEGIN VIDEO CLIP)

REP. MIKE TURZAI (R), PENNSYLVANIA STATE HOUSE MAJORITY LEADER:

Voter ID, which is going to allow Governor Romney to win the state of

Pennsylvania, done.

(APPLAUSE)

(END VIDEO CLIP)

AVLON: So this on-camera statement plus this letter from the

governor's office, how can the Republican Party fight this perception

-- let's say it's just a perception -- that this is not simply about

politics?

SALAM: John, there are two things to keep in mind. One is that

in Pennsylvania, there are a lot of raw feelings from earlier

elections. For example, in 1999, the Philadelphia mayoral election in

which a candidate named Sam Katz (ph) narrowly lost to another

candidate, John Street. There is a lot of concern about fraud but it

wasn't rigorously investigated partly because that would lead to a lot

of raw feelings in the community, but that's one reason why

Pennsylvania folks are concerned about that issue.

Another thing to keep in mind is that there are about 30 states

that have passed voter ID laws. These laws range dramatically. For

example, in Rhode Island, you have certain provisions that are going

to be kicking in, in 2014 rather than in 2012, whereas Texas and

Pennsylvania have particularly rigorous laws. They're trying to bring

online perhaps faster that they can realistically accomplish.

Virtually all of these states have provisions for free IDs. And

they're actually trying to address some of those concerns that you

have about indigent voters. But, again, it's all about does the

system, does that bureaucracy move quickly enough to accommodate that.

And that's a legitimate concern.

AVLON: We've got 11 new states with these laws in place, some

(INAUDIBLE) battleground. This is going to be a debate we're going to

continue to have, but --

SIMMONS: (INAUDIBLE) Democrats are really focused on it. I

don't think that it's going to be -- we're not going to sit around and

wait for this to happen --

SALAM: It's important --

(CROSSTALK)

SALAM: -- the facts (INAUDIBLE) particular laws.

AVLON: It is. This is a very damning document. I think we'll

be hearing more about it. Thank you both for joining us, Reihan and

Jamal.

UNIDENTIFIED MALE: (INAUDIBLE)

AVLON: All right, ahead, do Russian officials have the right to

come into the homes of children adopted in the U.S.? Why Russia and

the State Department (ph) don't agree.

And Mitt Romney and President Obama are exchanging some strong

jabs in new ads, but do their attack lines add up?

(COMMERCIAL BREAK)

AVLON: Are we seeing the rise of an AC/DC cyber virus? I'm

talking about the rock band. Bear with me. A Finnish tech company

(INAUDIBLE) says it received an e-mail from a scientist at the Atomic

Energy Organization of Iran that claimed Iran's nuclear program has

been compromised by a new cyber virus, one that randomly causes

computers to play AC/DC's "Thunder Struck" at loud volumes. And the

company can't verify the e-mail's claims are true, but it can verify

the e-mail was sent from a researcher within the Atomic Energy

Organization. So why should you care? Well cyber security is a big

issue that Congress is finally trying to tackle.

Tonight, the Senate is starting to debate a bipartisan bill that

would require both government and private companies to do more to

protect their networks from the threat of cyber attacks. The number

tonight $1 trillion, that's how much computer crime costs companies,

according to a study by McAfee and SAIC (ph). And that was back in

2008. Chances are that number is much higher now. We shouldn't have

to wait for a digital Pearl Harbor to take the cyber security threat

seriously.

Still OUTFRONT in our second half, a controversial adoption

agreement with Russia. Would it sell out some American parents? And

a miraculous recovery, he was shot three times during the movie

theater shooting, but tonight he walked out of the hospital and he's

OUTFRONT ahead.

(COMMERCIAL BREAK)

AVLON: Welcome back to the second half of OUTFRONT. We start

the second half of our show with stories we care about, folks who are

reporting from the front lines. The USDA said food prices could rise

as much as three to four percent next year. It's all because right

now the U.S. is experiencing the worst drought in 50 years and it's

taking a real toll on corn crops. Take a look at this chart from RBC

Capital Markets. It shows the average percent of corn crops rated

excellent or good from 2007 to 2011 and compares it to this year. And

you can see the steep falloff. The decline has caused corn prices to

rise to nearly a record high, which means ultimately other food prices

will rise.

Treasury Secretary Timothy Geithner testified on Capitol Hill

today about the ongoing LIBOR scandal. We monitored the hearing. It

was occasionally heated with members of both parties expressing

outrage over the rate manipulation. Geithner defended the New York

Fed's actions.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: I felt that we did the

important and fully appropriate thing which is to bring the attention

not just to the people in Washington --

(CROSSTALK)

GEITHNER: -- but to the British of the -- not just the reports

and the concerns that were broadly available in the market in the

public domain but also of the range of problems in the way this rate

was designed to create that vulnerability. And so, we gave -- we

brought those concerns to their attention.

UNIDENTIFIED MALE: Sure.

GEITHNER: And we felt, and I still believe this, that it was

really going to be on them to take responsibility for fixing this.

(END VIDEO CLIP)

AVLON: LIBOR will almost certainly come up again when Geithner

testifies tomorrow in front of the Senate Banking Committee.

Legendary baseball player Cal Ripken's mother is saved today

after being abducted at her home yesterday. Police in Aberdeen,

Maryland, say Ripken's mother was forced in her vehicle by a man with

a gun yesterday morning. She was found in the backseat of her car

this morning with her hands bound but otherwise unharmed.

Law enforcement officials tell CNN that the man appears to have

used her credit cards and had no knowledge of a ransom being demanded

or paid. Police are still searching for the suspect.

Now, it's been 356 days since the U.S. lost its top credit

rating. What are we doing to get it back?

Well, the Dow finally snapped its losing streak today, closing

higher by nearly 59 points. The S&P and NASDAQ closed lower.

Our third story OUTFRONT tonight: Russia in a tug of war with the

United States over adoptions. The two countries are hammering out a

controversial deal that regulates adoptions from Russia by Americans.

The pact comes after the bizarre high-profile case of a Tennessee

woman who sent her adopted son back to Russia alone on a plane. The

boy carried a letter that said his adoptive mother didn't want him

anymore.

Now Americans are worried this treaty could be far-reaching, even

allowing Russians into their homes.

Kyung Lah went OUTFRONT to see if those concerns add up.

(BEGINV VIDEO CLIP)

UNIDENTIFIED MALE: Why wouldn't you come just to talk?

KYUNG LAH, CNN CORRESPONDENT (voice-over): Arriving in a caravan

wearing dark suits and carrying cameras, Russian government officials

demanding entry on to a private ranch in the small town of Eureka,

Montana, both sides recorded the confrontation. The Russians demanded

to see children adopted from Russia and sent to this remote ranch by

their American parents.

This is Pavel Astakhov, the Russian children's rights

commissioner in Moscow.

"There are so many lies regarding the well-being of our kids,"

says Astakhov to the Russian TV crew. And he's here to see the

children for himself.

He claims the Russian children are abandoned by their parents at

this ranch and then neglected here.

That's a lie, says Joyce Sterkel, she runs the unlicensed

facility called the Ranch for Kids, a church mission for adopted

children whose problems like fetal alcohol syndrome were detected only

after the adoptive parents brought them back to the U.S.

JOYCE STERKEL, RANCH FOR KIDS: This is the United States of

America. This is the sovereign state of Montana. And a foreign

government cannot come in here and push your way into a private

residence and a private program. That is completely uncalled for.

LAH (on camera): But that's what he tried to do?

STERKEL: That's what he tried to do.

LAH (voice-over): Two sides deeply suspicious of each other, a

suspicion fueled by a bilateral agreement on adoptions between Russia

and the U.S. which aims to better protect both children and American

parents.

Astakhov says key to the agreement, it fundamentally gives his

country more authority to check an adopted children like at the Ranch

for Kids. Astakhov spoke to CNN via Skype from Russia.

PAVEL ASTAKHOV, RUSSIAN CHILDREN'S RIGHTS COMMISSIONER: We have

a right to ask the permission from State Department to visit Russian

children which we are interested and which we want to see and to

control the situation. Basically we have a chance and we have a

right.

LAH: Astakhov stresses only cases of suspected neglect will be

targeted. But American families are asking, how much power does a

foreign government have in an American home?

(on camera): The fear goes beyond what happened here at the gate

with the Russians. This ranch and adoptive parents believe it's a

signal about the bilateral agreement and what they'll lose as their

rights as adoptive parents.

Which boy is Sean?

SHAROIN HOULIHAN, ADOPTIVE MOTHER: Sean is in the brown.

LAH (voice-over): Sharon Houlihan adopted her son, Sean, when he

was 19 months old. She says he flies into fits of violent rage caused

by fetal alcohol syndrome. The ranch has helped dramatically says

Houlihan and no foreign government should tell her what's best for her

son.

HOULIHAN: When you make that commitment, they're yours. To have

a foreign government have the ability to come in to question my child

and make those determinations about his well-being, I find that just

not acceptable.

LAH: The State Department says it supports appropriate access

for concerned foreign officials to children who have both U.S. and

foreign citizenship, consistent with privacy rights and only with

consent of parents or legal guardians.

Bottom line, the State Department says parents will never be

forced to let anyone see their children under the new agreement. But

the ranch owner who's already seen Russians on her doorstep doesn't

believe the deal will actually protect American parents.

(on camera): What do you tell the State Department when they

tell us? This isn't going to happen?

STERKEL: It just did. It happened.

(END VIDEOTAPE)

AVLON: Kyung, it's fascinating story. Why are the Russians so

interested in this particular ranch?

LAH: Because there are so many Russian children who are there.

There are about 10 at this facility. And the Russians say that this

is just a depository for unwanted children because the parents aren't

there. But the ranch says this is a place where they get real help.

Having spoken to the American parents, they say these are kids

with serious problems, fetal alcohol syndrome, and the ranch is making

a difference with these kids.

AVLON: And this whole story gets to the heart of so many

emotions, about family, about sovereignty. Do we know what the text

of this treaty is?

LAH: Right now, we don't. It hasn't officially become public.

We know what the general overview is. That's what the State

Department has shared with the parents. But the parents say they just

don't buy what the State Department says because if the State

Department says that they still maintain all of their rights, well,

why did the Russians show up at the gate?

AVLON: That is the question. I mean, they're scared.

But are they really scared about the potential of a deal here?

Are they worried, looking over their shoulders to see when the

Russians might come next?

LAH: They are, because you may have noticed in our story, the

faces were blurred. The reason why those faces are blurred is because

they're parents are truly, truly afraid.

AVLON: Extraordinary story. Kyung, thank you very much.

Our fourth story OUTFRONT tonight, the Obama and Romney campaigns

at each other's throats over remarks President Obama made about small

business owners almost two weeks ago. The fight started when the

Romney campaign release this ad.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you've been

successful, you didn't get there on your own. If you've got a

business, that -- you didn't build that. Somebody else made that

happen.

(END VIDEO CLIP)

AVLON: The only problem was that wasn't exactly what the

president said. And the Romney campaign came under a lot of fire for

mischaracterizing his remarks. Well, today the RNC released a new ad

without those edits.

(BEGIN VIDEO CLIP)

OBAMA: If you are successful, somebody along the line gave you

some help. There was a great teacher somewhere in your life.

Somebody helped to create this unbelievable American system that we

have that allowed you to thrive. Somebody invested in roads and

bridges. If you've got a business, that -- you didn't build that.

Somebody else made that happen.

(END VIDEO CLIP)

AVLON: So it's time to fact-check the "you didn't build it"

debate.

Glenn Kessler is with us tonight. He's "The Washington Post"

fact-checker.

He gave the first ad three out of four Pinocchios.

So, Glenn, are you satisfied now?

GLENN KESSLER, "THE FACT CHECKER" FOR THE WASHINGTON POST: Well,

the part that the RNC showed there was, you know, it did include the

eight or so sentences that were missing in the Romney ad. It missed

the rest of what he said where the president provided additional

context of what he was trying to say.

AVLON: Let's actually play that rest. We've got it right here.

(BEGIN VIDEO CLIP)

OBAMA: If you've got a business, you didn't build that.

Somebody else made that happen.

The Internet didn't get invented on its own. Government research

created the Internet so that all the companies could make money off

the Internet.

The point is, is that when we succeed, we succeed because of our

individual initiative but also because we do things together.

(END VIDEO CLIP)

AVLON: As you well know, Glenn, I mean, we live in a time where

narratives drive debates even more than facts. And especially if the

president was clumsy with his wording, there's a perception that he

meant what he said. And politics is perception.

So, how damaging is this for the Obama campaign?

KESSLER: Well, this is certainly a problem for the Obama

campaign. When you actually saw this extraordinary thing today where

the president himself made an ad from the West Wing of the White

House, speaking to the camera saying, I'm being misquoted, this is not

what I meant. And the problem with the phrasing that he used here,

which was, you know, clumsy and difficult to completely understand, is

that it buys into a narrative that the Republicans have been trying to

put out there, which is, this president doesn't really care about

individual initiative. He's suspicious of free enterprise. He's just

a big government liberal.

So it's a gaffe but it is a gaffe that sticks because it kind of

fits into preconceived notions that are out there.

AVLON: I think that's exactly right.

Now, the Obama camp is returning fire the an ad of its own.

Let's take a listen.

(BEGIN VIDEO CLIP)

STEPHANIE CUTTER, OBAMA CAMPAIGN: Ironically, Mitt Romney knows

better than anyone, that business can't always do it alone. When Bain

and Company was on the brink of bankruptcy, Romney himself negotiated

a $10 million bailout with the FDIC.

(END VIDEO CLIP)

AVLON: Now, you fact-check that statement. What did you find?

KESSLER: Well, the problem there is the way deputy campaign

manager Stephanie Cutter refers to a bailout, it makes it sound like

it's one of those Wall Street bailouts and they got government money,

what actually happened was that Bain & Company, which is not the

company that Romney was running but the old consulting company he was

brought in to rescue, they restructured a loan they had with a failed

bank and they restructured a loan with the FDIC which insures bank

deposits.

So, the money there was actually not taxpayer money but it was

money that was raised from assessment from banks. So, not really a

bailout, though if you want to use a broad definition of bailout,

rescued from financial distress, the Obama campaign can technically

slide by there. But it's intended to give an image that isn't quite

correct.

AVLON: So, ultimate verdict, one Pinocchio.

KESSLER: That's right.

AVLON: Glenn, thanks for being with us, to help us fact-check

the debate.

KESSLER: You're welcome.

OUTFRONT next: we take you to Syria where violence is spreading.

And tonight, one of our reporters is on the ground witnessing the

violence firsthand.

And new details emerging about the suspect in the movie massacre

in Colorado. Could the shooting spree have been averted?

(COMMERCIAL BREAK)

AVLON: We're back with tonight's "Outer Circle" where we reach

out to our sources around the world.

We start tonight in Syria. The battle of Aleppo is intensifying

as more reports of rebel and regime forces head for Syria's largest

and set the stage for heavy fighting. Ivan Watson is in Syria. I

asked him what condition the rebel forces are in.

(BEGIN VIDEO CLIP)

IVAN WATSON, CNN CORRESPONDENT: John, I'd say the mood of the

rebels is both grim and very determined. After all, these men are

losing their comrades in the battle for Aleppo. We've passed funerals

for men who were killed in the battle just hours beforehand. Nearly

everybody you talk to in Syria has had a loved one who's either been

jailed or tortured or killed or has had to flee into exile.

And these fighters see this as an existential fight. Unless they

defeat the man whose family has ruled this country for more than 40

years, whose military has been destroying villages and rounding up

their loved ones and has killed people in front of their eyes, unless

they defeat him, they know that they and their families will be wiped

out. This is an "us or them" basically.

And they have no choice, they see, but to win against their

government which they see as their mortal enemy -- John.

(END VIDEO CLIP)

AVLON: Our fifth story OUTFRONT tonight, new details just in

about the alleged gunman in the Colorado shooting spree. The

University of Colorado confirms they discovered a suspicious package

sent from James Holmes in a mailroom in their medical campus on

Monday. It was addressed to one of homes' former professors. The

package reportedly includes writings and drawings about killing

people.

OUTFRONT tonight, Ed Lavandera in Aurora, Colorado.

Ed, what else is the university saying about this package?

ED LAVANDERA, CNN CORRESPONDENT: Well, it's been really hard to

get people to speak on the record about these packages we've known

about since Monday. In fact, it caused the evacuation of some of the

buildings on that campus for a short time on Monday. But it was

quickly determined there wasn't any explosives or hazardous materials

to deal with.

Now we're learning what was inside those packages, perhaps much

more frightening to people, that perhaps James Holmes himself mailed

this package to a psychology professor, according to NBC and CBS

reports this evening, and saying that the packages included writings

of killing people and also crude drawings of a gunman and his victims.

So, that package sent, obviously that garnering a great deal of

attention today. But there is a gag order in place that has really

kind of made a lot of the reaction to this very tight-lipped from

official circles here in Aurora today -- John.

AVLON: Disturbing report. Ed, you're also hearing more about

Holmes' academic record. What can you tell us about that?

LAVANDERA: Yes, CNN has learned from a source that in early

June, James Holmes performed poorly on one of his final exams. This

was all about the same time when you go back and look at the time line

of when authorities say that he had been over the last two months

amassing the guns and the ammunition and the explosive material that

was found in his home.

So the question now becomes, this poor performance on this final

exam that he had taken toward the end of his first year in this

neuroscience PhD program at the University of Colorado, what kind of

effect might this exam and this poor performance have on James Holmes?

We don't have the answer to that. But you can imagine that is

something that psychologists and investors are taking a much closer

look at.

AVLON: Ed Lavandera in Aurora, Colorado.

Pierce O'Farrill was one of the lucky ones. He was shot three

times in the left arm and the left foot and was just released from the

hospital hours ago.

O'Farrill is OUFTRONT with me tonight. I started by asking him

about the package that Holmes sent to his professor and what was

reportedly inside.

(BEGIN VIDEOTAPE)

PIERCE O'FARRILL, SHOOTING VICTIM: It confirms obviously

everything that we kind of know, that this man was just disturbed and

that he had a lot of darkness in his heart. It's a shame that that

package never got opened. I guess that seems to be the report right

now.

And, you know, it just -- in my mind, it just makes it

unfortunate that throughout all these years -- I'm sure there's been

warning signs. Maybe there was someone in his life at some point that

could have seen something coming. But more than anything, it just --

it doesn't change a whole lot really for me at this point.

AVLON: That really does beg the question. I mean, do you think

this incident could have been prevented?

O'FARRILL: I mean, gosh, that's just -- I don't know. That's a

tough question to answer. I would think someone that's been living

with this much darkness in their life -- I mean, I would like to think

at some time down his path, maybe someone could have seen this and

reached out to him and gotten him the help that he so desperately

needed.

AVLON: As you just said, James Holmes will be formally charged

on Sunday. What do you think is a just punishment for this man?

O'FARRILL: I think life in prison is a just punishment. I don't

believe in the death penalty. Honestly, I've said it before, I will

pray for James Holmes, and I pray that he does get life in prison and

those 30, 40, 50 years that he's in prison that I pray that the Lord

can find him in some way and change his heart.

AVLON: Now, police say that he had an AR-15 assault rifle, a

shotgun, two Glock pistols when he went into the theatre. We know he

purchased 6,000 rounds of ammunition. While you've been in the

hospital, there's been a whole conversation about what could have been

done, whether this is an appropriate time to start talking about

whether there's certain reasonable restrictions that could have been

put in place, that would have made it more difficult to get his hands

on these weapons.

What do you think of that conversation about gun control? Is

this the right time? Is this too soon?

O'FARRILL: No. I think it's a little premature to get into that

conversation about gun control. I think -- I mean, gosh, it was less

than a week ago. I think right now we need to have our time of

mourning.

And I think more than anything, the conversation has to be about

how do we help the families and the loved ones of every victim in

there? And not just myself, but more importantly the families of

those victims that lost their lives. I mean, my heart just goes out

to them. And I think that -- it's way too early to even start having

that conversation about gun control.

AVLON: What do you want to say to Holmes?

O'FARRILL: I want John to know that I forgive him, but more than

anything, I pray that he can find some regret and that he can find

that place in his where it's time for him to regret and to ask for

forgiveness from the victims of all of this terrible tragedy.

AVLON: That sense of forgiveness is an inspirational act of

grace for us all. What are your plans now that you're out of the

hospital? What's next for you?

O'FARRILL: You know, just recovery. I need to definitely focus

on just recovering. I'm pretty tired. It's been such a long road,

this past week, that I'm looking forward to laying around for a while

recovering.

The recovery just lasts a couple of days because on Sunday we're

going to have a special service at my church and I will be up there

with my pastor and we'll be talking about this and really just talking

about forgiveness and ways to reach out and just talking about the

grace and love of Jesus and how he's been working to shine his light

throughout this horrible tragedy.

AVLON: Pierce, our thoughts and prayers will continue to be you

throughout your recovery. Thank you for coming OUTFRONT.

O'FARRILL: It's my pleasure. Thanks for having me. God bless

you.

(END VIDEOTAPE)

AVLON: Next, shocking comments from the former CEO of Citigroup

today. Will it change the way Wall Street does business forever?

(COMMERCIAL BREAK)

AVLON: I saw something jaw-dropping today.

This is Sandy Weill, the former CEO of Citigroup, the creator of

the first mega monster bank back in 1999 on CNBC this morning.

(BGIN VIDEO CLIP)

SANDY WEILL, FORMER CITIGROUP CEO: I think what we should

probably do is go and split up investment banking from banking.

(END VIDEO CLIP)

AVLON: Now, this is the guy who had a portrait of himself with

the slogan, shatter of Glass-Steagall on the wall of his office.

So, what's Glass-Steagall and how does it matter? Well, here's

how Aaron Sorkin explained during a recent episode of the new HBO

show, "The Newsroom."

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: After the Great Depression, Congress wanted

to put a firewall between the investment banks and the commercial

banks. It passed a law, the Glass Steagall Act. It helps lead the

largest sustain period of economic growth in U.S. history, a 60-year

expansion in the middle class, the largest increase in productivity

and the largest increase in median income.

And you know what happened next? We repealed Glass-Steagall.

(END VIDEO CLIP)

AVLON: So, now, Sandy Weill wants Glass-Steagall back, even

though he was arguably the biggest reason for its demise. "Reuters"

financial blogger Felix Salmon sent me an e-mail that said, "OMG, WTF,

shorter Sandy Weill: it was a great idea to open that stable door, but

it's a pity the horse has bolted. Let's close the door now. Remind

me why we're still taking this clown seriously?"

And "New York" magazine compared to this epic flip-flop to Rick

Santorum announcing he's going to be a GLAD spokesperson.

Now, a cynic would say it's just Sandy Weill's way of saving his

soul and asking for an apology. But maybe he did see the light.

After all, we've now seen a post-Glass Steagall world. We know the

wisdom of some of those earlier restraints on unbridled self interest.

Weill's comments may be hypocritical, but they're also

historical, in an after the fact sad footnote sort of way. But maybe

it will invoke a constructive conversation about restoring it, in

whole or in part. After all, here's Glass Steagall, all 37 pages of

it. And here's Dodd-Frank, 2,319 pages.

Now, we're not out of the fiscal storm yet. And the clarity and

simplicity, something like Glass Steagall, well, might just help

stabilize our collective ship.

Erin is back from Africa tomorrow. She'll be talking about

Facebook. The tech company will release its first quarterly earnings

report since going public. Erin will be breaking down the numbers,

OUTFRONT tomorrow night 7:00 p.m. Eastern.

Thanks for watching. "A.C. 360" starts right now.


Word count: 7503










LEC



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