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Lawmakers Left Out Of The Loop; Petraeus Resignation; FBI Investigation Uncovered Affair; Life Not Normal After Superstorm Sandy; NY & NJ Facing Commuter Congestion; New Jersey, New York Commuter Congestion; Fiscal Cliff Could Make Your Taxes Go Up; Health Benefits of Marijuana; Scandal on "Sesame Street."

Aired November 12, 2012 - 13:00   ET


SUZANNE MALVEAUX, CNN ANCHOR: I'm Suzanne Malveaux. This is CNN NEWSROOM. New details now on the resignation of former CIA director David Petraeus. Since he admitted to having an extramarital affair, we have learned that the FBI was investigating the general's private e-mails months ago. That probe led to his resignation. It all started when Jill Kelly, a friend of general Petraeus, contacted the FBI about threatening e-mails she said she received from another woman. That woman, seen here, was Paula Broadwell. Now, she wrote Petraeus's biography. She said she used to jog with the general when he was leading the war in Afghanistan and now lawmakers are angry. They want to know why they're just finding out about all of this, including Senator Dianne Feinstein who chairs the Senate Intelligence Committee.


SEN. DIANNE FEINSTEIN (D), CALIFORNIA: We received no advanced notice. It was like a lightning bolt. The way I found out, I came back to Washington Thursday night, Friday morning the staff director told me there was a number of calls to friends about this. I called David Petraeus and I talked to the director twice. This is very hard stuff.


MALVEAUX: Hard stuff. Like many scandals, many different layers as well. Now, there's a video of Paula Broadwell that has gone viral on YouTube. It is revealing where she's revealing information about the CIA's investigation into the attack on the consulate in Benghazi. Check it out.


PAULA BROADWELL, PETRAEUS BIOGRAPHER: I don't know if a lot of you have heard this, but the CIA annex had actually -- had taken a couple of Libyan militia members prisoner, and they think that the attack on the consulate was an effort to try on get these prisoners back. So, that it's still being vetted.

(END VIDEO CLIP) MALVEAUX: Still being vetted. Then there is this. From the general's former spokesman, Steven Boylan, who spoke out about the scandal this morning.


STEVEN BOYLAN: I would say he is embarrassed, but he is keenly aware of the hurt and pain he has caused, and he is concerned that people understand that this one happened after he had retired from the Army. The affair started approximately two months after he was in the CIA, and it ended about four months ago.


MALVEAUX: CNN's got correspondents covering this big story, obviously, including our Intelligence Correspondent Suzanne Kelly covering the Petraeus affair, and its national impact on our security. And White House Correspondent Brianna Keilar, she is covering the shake up in the president's cabinet and the national security team.

Suzanne, I want to start off with you, first of all. Tell us a little bit about this video that we are seeing of Broadwell. We know that the FBI says so far that there's no security element that's been compromised. Was there anything in that video that says she knew something that was classified or she was sharing something that wasn't supposed to be shared?

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: Well, you can almost read into it a little bit by the words she used herself, which were, you know, this is something that hasn't quite yet been vetted. So, you have to look at the information she was sharing on Libya, and the CIA saying they were actually holding prisoners there, and that means that she is sharing something that she heard with a public audience. Now, that's concerning because you have to ask, what's her source? Is the source of all of her information David Petraeus? Given her extraordinary access to the former director of the CIA, it would have been a reasonable assumption, but, again, her access to him was not in any way in an official capacity, though she did tell me this summer that she was working with the general and writing a second book.

Now, a senior intelligence official says that the detention claims are categorically not true. That nobody was ever held at that CIA Annex before, during or after the attack. But with something like this, the damage is really done just by the nature of her putting information like that out there -- Suzanne.

MALVEAUX: How do they conclude now that there's no national security risk?

KELLY: Well, that's why the FBA (ph) steps in. The FBI is charged with an investigation. They've got to go through the e-mails which we've seen, you know, details of this leaking out all over the place, what was in those e-mails. They need to go through those e-mails to determine whether or not there was a security risk. Now, we know that it's not illegal, according to a senior intelligence official, affairs are not automatically considered a security violation, unless, of course, the affair is going on with a person who's from another country and it hasn't been reported. But you can have affairs, actually, and you can report them and it sort of becomes OK.

There are no prohibitions, also interestingly, on private e-mail accounts. So, we've heard that there was this private e-mail account, possibly Gmail account, could be something else that the FBI was looking into where a lot of the exchanges went back and forth. No rules that say, you're not allowed, as director of the CIA or any other government position, to not have a private e-mail account. That's another interesting tidbit in all of this -- Suzanne.

MALVEAUX: And, Suzanne, do we know that if Petraeus -- is he going to be testifying before members of the Senate Intelligence Committee? Do we know if he will actually go before them?

KELLY: Well, you know, a few of them are really pressing for that to happen. It's not going to happen this Thursday at these closed hearings that we're having on Benghazi and Libya. The guy who's going to be sitting in that hot seat that day is going to be Michael Morell. He was asked by the president last Friday when general Petraeus offered his resignation to step up and become the acting director. He is a career veteran. He has been on this Benghazi investigation since day one and feels very passionately about it. I'm sure that he will be able to answer questions just as David Petraeus could.

MALVEAUX: All right, Suzanne Kelly. Thank you, Suzanne, appreciate it.

Even before David Petraeus dropped the bombshell and resigned, it was well known that there were several senior officials in the Obama administration looking to leave for the second term. Secretary of state, Hillary Clinton and defense secretary, Leon Panetta both expected to depart. Likewise, the president might have to find replacements for treasury secretary Timothy Geithner and attorney general Eric Holder if they decide that they, too, would like to leave.

I want to bring in our White House Correspondent Brianna Keilar to talk about just more on the president's plate here. How does this add to what he needs to get done starting in the next year?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: It really adds to it. I mean, you've got this issue, obviously, that comes after any re- election, the turnover of the cabinet, Suzanne, but just think of the big plate that this is being added to. First off, the fiscal cliff. That is obviously the biggest issue that President Obama has to deal with. You're looking at tax cuts that expire at the very end of December, and then those spending cuts that are set to kick in on January 2nd.

As he works, obviously, figuring out the new faces on his cabinet. He's got his inauguration on January 20th, and February is a big month as well. He needs to summit a budget at the beginning of the month. It's possible the debt -- the debt ceiling, the treasury department says, could be hit that month -- that month. And you know how difficult that is for the White House to work out with Congress. And then, in March, the funding for the federal government is set to expire so that could mean a possible government shut down if that -- if agreement on that isn't found.

MALVEAUX: That's a lot. We're going to take a look at the schedule there, a very busy calendar. Possible replacements for Petraeus. This is, obviously, one of those positions he is going to want to fill rather quickly.

KEILAR: That's right. You heard Suzanne talking about Michael Morell. He is the acting now CIA director. He was the number two to David Petraeus. He is someone who really has the president's trust. He is also well liked on the Hill so that helps as well. And then John Brennan, the president's top advisor for counterterrorism and homeland security, is also a name that you're hearing a lot of. Now, he's been in the administration for four years. You know, he's pretty -- probably pretty tired at this point, but he is definitely being discussed as someone who might throw his hat in the ring for this. And then also former Congresswoman Jane Harmon got out of Congress recently. She was the ranking member of the House Intelligence Committee. But really, especially those first two names, these are really the names that are the most distinguished on what's a rather long list of possible replacements for Petraeus.

MALVEAUX: And Brianna, real quickly, tell us about this gang of eight that's going to start to sit down and try to work on avoiding this big fiscal cliff.

KEILAR: They are going to try to work on this for Democrats, for Republican senators. What our senior Congressional correspondent Dana Bash has been reporting, though, is that if you talk to leaders, you talk to the White House, I think it's seen more likely that this is a leadership level issue now hashing out a deal. Obviously, the gang of eight trying to work on something, but I think a lot of folks downplaying the expectation that that's really where the solution for the fiscal cliff comes from.

You do know, of course, that the top Republican and the top Democrat, in both the House and the Senate, are going to be at the White House on Friday. Congress is back in tomorrow. There's a lot of details to work out. This is really just the beginning of it. Whether, you know, Democrats want to increase taxes on wealthy Americans, the White House wants to do that as well, Suzanne. Republicans are talking about finding a way to increase tax revenue, maybe through closing loopholes. But the fact is all of these details need to be worked out and this is the really tough stuff to work out.

MALVEAUX: It is the tough stuff. I notice, too, no females in that gang of eight there, Brianna. Interesting.

KEILAR: I know.

MALVEAUX: All right. Thank you. You've got your work cut out for you.

Former FBI deputy director and CNN Contributor Tom Fuentes on the security concerns around Petraeus's affair, that up next. Here's what we're also working on for the hour.

(voice-over): Thirteen days after Superstorm Sandy slammed the east coast. The commute is New York is still a mess. A look at the recovery effort that has people still struggling to get to work.

Plus, 18 states offer medical marijuana. Now, two states have legalized recreational pot. The health benefits of weed.

And scandal on "Sesame Street." This man, the voice of Elmo, is accused of having an inappropriate relationship with a teenage boy. He denies it. This is CNN, and it's happening now.


MALVEAUX: Before Friday, you might have never heard of her, but today a lot of folks talking about her. We are talking about Paula Broadwell, the woman who had an extramarital affair with now former CIA director David Petraeus.

This we know about her, she's a married mother of two, an honors graduate of West Point, and retired Army Reserve major who served for 15 years. We have also learned more about her from media appearances, including an interview she did in February with our Brooke Baldwin. In it, she described her extraordinary access to the general.


PAULA BROADWELL, PETRAEUS BIOGRAPHER: And at some point, I think he realized I was taking this research very seriously. I was sharing hardship with the troops and risk and so forth and decided to open up a little bit more access. but we had a relationship before I went there as far as this dissertation was concerned, so it just took it to another level.


MALVEAUX: Paula Broadwell also talked about interviewing General Petraeus while running with him on a visit. There is what she said on "The Daily Show" in January.


JON STEWART, HOST, "THE DAILY SHOW": You're a runner and he -- to get to know him, he wanted to run with you. So, you ran together.

BROADWELL: This is a typical mechanism he uses to get to know young people. He's done it throughout his life. So, it was an opportunity for me to interview him on a run and I think it was -- I was -- I thought I'd test him, but he was going to test me.


MALVEAUX: There are now complaints from Congress that members of the Intelligence Committees, they were kept in the dark about the FBI's investigation, and it also includes Senate Intelligence Committee chairwoman Dianne Feinstein. Here's what she said over the weekend.


FEINSTEIN: I actually wish we had been briefed a little bit earlier. All of this, obviously, comes as a big shock and we are very much able to keep things in a classified setting. At least if you know, you can begin to think and then to plan. And, of course, we have not had that opportunity.


MALVEAUX: Feinstein says she was not informed until Friday. I want to bring in our CNN Contributor Tom Fuentes, he is a former FBI assistant director. And, Tom, does she have a point? Does the senator have a point? Should they have been informed earlier?


No, I don't think so, because the protocols are very strict, and those protocols protect members of Congress, as well as any other high official in terms of when notifications are made. Now, the expectation turns out really to be when those kind of notifications are made, they're going to become public. And the senator may say or try to claim that it's going to remain confidential. Historically we've seen that that usually is not the case. And that's why the protocols are in place.

She would have and key members of Congress and at the White House would have been made aware of the investigation earlier if evidence of criminal activity or a security breach had, in fact, been discovered. If that had been discovered by the FBI, they would have made the notifications. But they haven't. And so at that point there's really not a requirement. Protocols are very strict to have the confidentiality of the investigation maintained until the FBI and the Department of Justice are very sure that there's not going to be a criminal prosecution and there has not been a breach of security.

MALVEAUX: So why would the FBI be investigating this in the first place? I mean, she has a buddy or somebody in the FBI. They decide to do a little reconnaissance mission of their own. I mean, is that typical here? I mean, there must have been something pretty damning in those emails for the FBI to continue this march through this investigation.

FUENTES: No, it's not the result of a buddy talking to a buddy. The protocols to open an investigation like that are based on the FBI has jurisdiction if someone uses the Internet or the interstate phone system to make threats against another person. Then it's just a question of how serious do the threats look? Do they really (ph) -- does it look like it could be dangerous? So they begin the investigation.

In this case, a complaint had been made. So you have someone, reported to be Kelly, saying that she's in fear having received these emails. It's reported to the FBI. They begin the investigation. Now, initially, they don't know who's spending the messages, so they have to subpoena Internet records and have cyber experts look at the messaging to see whose computer is that coming from, is the person who owns that computer actually the sender or is somebody else using the computer or hacking into the system? During the course of subpoenaing those records and then discovering that a number of messages are going to and from another person --


FUENTES: Would later determined to be Director Petraeus, then they have to subpoena those records and learn, you know, what's the nature of this. And, of course, in the investigation of the sender, they're trying to determine, is the sender acting alone? Is the sender part of a militia group or domestic or international terrorist organization? That all has to be run to ground. And, is the sender threatening other people? Is the victim that's making the complaint the only person that's being threatened. And in terms of the messaging to and from Director Petraeus, is he aware of it? Has his system been hacked into? Again, these are all on their public Internet accounts. None of this is going back and forth over classified government systems.

MALVEAUX: So this could happen to any normal citizen. I mean, this is not -- this did not go to this level because it was General Petraeus, head of the CIA? Is that correct? Am I understanding that correct --

FUENTES: That's correct. They could open -- they could open an investigation. This matter was opened in the cap (ph) division of the FBI. And until they start seeing what the messages are, the nature of the threat and who's sending them and what level the victim's at in terms of a high government position where there is additional sensitivity, then it kind of takes a step by step methodical approach that leads it -- leads the investigators eventually to determine that messages are going back and forth between the sender and Director Petraeus.

MALVEAUX: Right. Talk a little bit about the relationship between the FBI and the CIA. It's well-known in Washington these two agencies aren't exactly buddies here. Do you think that there was anything involved --

FUENTES: No, Suzanne, that's --

MALVEAUX: That they were --

FUENTES: That's ancient history. That's pre-9/11 stuff, when there were legal restriction on what could be shared in the relationship. When I was an executive in the FBI, before my retirement, I had high CIA officials assigned to work with me at FBI headquarters. FBI has senior officials embedded throughout CIA headquarters and working together in the field.

The CIA is well aware that if an allegation is made against anybody, whether it's -- they're in the CIA or they're somewhere else in the government, that -- you know, that's the FBI's responsibility and they have the jurisdiction to look at the matter, to investigate the matter. So this is not based on -- you know, and, again, the FBI begins its investigation. They have no clue that it's going to lead to someone at the CIA. So this is -- the thing about animosity with the CIA is, in this matter, particularly ridiculous.

MALVEAUX: All right, Tom Fuentes, thank you so much. Appreciate your insights.

FUENTES: Thank you.

MALVEAUX: For more on the scandal surrounding former General Petraeus visit "Security Clearance" on for more information.

Thirteen days, still thousands of folks without power across 10 states. Recovering from Superstorm Sandy taking longer, much longer, then people had hoped.


UNIDENTIFIED FEMALE: God is with us and, you know, we're going to have help soon. You know, I trust in our government, you know, we're going to have help soon. And everything's going to be all right.



MALVEAUX: It's been almost two weeks since Superstorm Sandy devastated the northeast. For many life is anything but normal at this point. The deaths of two more people now linked to the superstorm. It brings the number of those killed across the region to 113. There are still thousands of folks who are without power. Our Victor Blackwell, he is in Far (ph) Rockaway, a neighborhood of Queens, New York.

You've been talking to people. Obviously this must be pretty frustrating here. Two weeks now and it is really hard to get around and to even cope.

VICTOR BLACKWELL, CNN CORRESPONDENT: Very hard get around. And it's just as difficult to stay at home because the people who live in this building behind me, the ocean village community, this is building three. It's about fourteen floors. We walked up to the 14th floor to speak with Mrs. Doris Hood (ph). She has no running water, no heat, no electricity. She does have gas. So she lights up her stove and leaves the oven open to heat her small apartment.

We've seen a lot of trucks come through here recently. We've seen the Red Cross. We've seen the National Guard. We've been told that Doctors Without Borders came and knocked on the doors. We've seen Occupy Sandy in the community room here of this building. Even the ASPCA is here handing out dog food to the dog owners here and to the pet owners.

What we have not seen is anyone here to hook up the generators on property. There are three of them that are not connected to the building. So we're going into the third week here and we're told that the conditions inside the building are deplorable. Let's go to what one resident told us. (BEGIN VIDEO CLIP)

STACY LAWRENCE, RESIDENT: The smell is horrendous. The staircase is dark. It's just scary. Everything I think -- I'm coming down the steps, I might see a dead body somewhere. It's horrendous.


BLACKWELL: We saw a member of the management team here on property, Mr. Michael Prush (ph), and told us very quickly that he would have to decline comment. He'd get back to us. He did not. We've put in a message through e-mail and a call to try to get a response to our questions about why the generators have not been hooked up. Now going into the third week without power here.


MALVEAUX: So they have no explanation about why these generators aren't being hooked up yet?

BLACKWELL: No. They told -- the residents here and the president of the tenants board dropped it here. He said that they came here on Saturday night. Just were not connected. Still haven't been connected. I just heard the president of the board, Bryant Pearson (ph), right here yelled that there is someone going to come out and make a statement. When we get that, hopefully it's coming, we'll, of course, bring it to all the viewers.


MALVEAUX: Yes, Victor, you let us know when there's something going on over there. Obviously they have to be held accountable. Thank you, Victor.

If you actually want to help the storm victims in the northeast, it's not hard to do. Just log on to You're going to find all kinds of information on how you can contribute to the relief effort.

Delays, delays and even more delays. We're talking about mass transportation returning to normal, but commuting into New York City, still very much a nightmare for a lot of folks who struggle just to get to work after Superstorm Sandy.


MALVEAUX: A lot of people were hit by Sandy in New York and New Jersey. Once again, they got gas for their cars. That's good. The power's back on. Time to get back into the routine and go back to work, right? The problem is getting there. Commuting, still pretty much a nightmare for some folks. Chad Myers, he's watching the transportation situation.

Chad, most of these tunnels in and out of New York, are they open? How are people getting through? CHAD MYERS, AMS METEOROLOGIST: Well, you know, they're getting-- they're slow but they're getting. And we have even some problems with LaGuardia still because of the flooded equipment that it had. So LaGuardia, you know, getting out of there. There was a ground stop earlier.

CHAD MYERS, AMS METEOROLOGIST: They're getting. They're slow, but they're getting. We have even some problems with LaGuardia still because of the flooded equipment that it has. LaGuardia, you know, to getting out of there, there was a ground stop earlier. Getting better now. Still people are laying on the floor. I saw lines to get in the TSA lines. That's how bad it's been.

Now, let's get down to the ground a little bit because this has changed significantly since I've been talking to you last. The Brooklyn Battery Tunnel opened for at least some bus service. The A- train, though, back to the Rockaway, still not open, and probably won't be for quite some time. This bridge system, right through here, kind of the causeway bridge to get the A-train to the Rockaways, was just a mess, and it still is going to be that way for a while. South of, let's say, about, I don't know, maybe just Soho, all the way down to South Ferry, these lines are still not working and won't be working for some time. The bus service, though, is good. Bus service is back, Brooklyn, Battery Tunnel

Now, this happened just this morning. PATH trains are back working now from New Jersey back over to Penn Station. That's a huge, huge benefit for the people trying to get to New Jersey, back and forth to Manhattan. What I saw at least, they are going to work until at least 10:00 tonight, and then maybe it's shut down for some more work. I don't know why, but they did put a 10:00 p.m. stop on it. So keep that in mind if you have to get back to Jersey or the other way tonight. Everything to the north, obviously this didn't get hit quite as hard, but even back up here, the one all going north very nicely.

Here's LaGuardia's issue. I want to take you back to this. We're just not getting enough planes on the ground and enough planes out because of this very low visibility this morning. And we are not even running at low visibility or VFR conditions. We're running very much less than that. If you take a look at some of the planes here -- we'll go here. I'm going to hit status and we'll figure out how many are delayed. Here's United Air. As I go down, it starts to get really ugly when it comes to canceled. We have had hundreds really of scheduled flights canceled in and out of JFK and LaGuardia and Newark. Even if you're in Memphis and trying to get to New York City, and your plane gets canceled, you go no problem. I can get to White Plains, I can get to JFK, I can get to somewhere else -- it's been tough. These flights are very, very full.

MALVEAUX: Tough going still.


MALVEAUX: Thank you, Chad.

MYERS: You're welcome. MALVEAUX: Appreciate it.

We got the warning about the fiscal cliff. Just 50 days until the tax cuts expire. What this could cost you.


MALVEAUX: In exactly 50 days from today, taxes will go up if Congress doesn't come up with a deal to avoid the so-called fiscal cliff. That's a day that many tax breaks are going to expire. That's when severe budget cuts are going to go into effect if there is no deal. The average middle income family whose family is earning between $40,000 and $65,000 a year will pay merely $2,000 more in taxes next year. The top 20 percent of Americans who make $108,000 or more a year will pay more than $14,000 in additional taxes. Here's why. A bunch of tax breaks are expiring. For example, the payroll tax cuts saved middle income families $672 a year in the past year. Nearly $2,000 for top earners. The capital gains tax cuts, saved top earners $996 a year. And the low-income child and student credits saved both groups $103 a year. Those also set to expire.

Well, they couldn't solve the debt problem last year, but the gang of eight getting back together. Can this bipartisan group of Senators fix the fiscal problems this go round?


MALVEAUX: Obama-care survived the Supreme Court challenge and a presidential election, but what does it mean for you and your wallet?

Christine Romans breaks it down in this week's "Smart is the New Rich."


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The battle over health reform is over, and the president has been re-elected. The centerpiece of the legislation, when everyone has to have health insurance or pay a penalty, it doesn't go into effect until 2014.

If you are a big earner, your taxes are going up. A new Medicare surtax means an individual paying $, will pay more a year into Medicare. A family earning, say, half a million dollars is going to pay $2,250 more. On top of that, the high-income families may also be subject to a new 3.8 percent Medicare tax on investment income. That's high-earning families.

Next, if you contribute to a flexible spending account, the maximum amount you can set aside is $2,500. Many companies used to allow double that, right? If are you in the middle of open enrollment right now, please plan accordingly.

Finally, lots of work is happening to get state health insurance exchanges up and running. This is where you will compare and approximate buy plans if you need insurance. Enrollment is supposed to start next October, less than a year from now. So far, only 14 states and Washington D.C. are planning to establish their own exchange. They're the ones in blue here. Other states have opted to partner with the federal government or just let the government come in and run it altogether. States face a November 16th deadline, this Friday, to say where they stand.

I'm Christine roman with this week's "Smart is the New Rich."



UNIDENTIFIED ACTOR: Mr. President, do you think Republicans will work to find common ground with Democrats?

UNIDENTIFIED ACTOR: I mean, we'll see. Everyone is talking about this fiscal cliff. Well, guess what, the Bush tax cuts are due to expire at the end of the year. Republicans thought they would be extended when Mitt Romney was president.


Well, to quote Wesley Snipes, "Always bet on black."




MALVEAUX: All right. Some Americans probably not going to find the fiscal cliff so funny if they have to pay thousands more a year from expiring tax cuts. Right now, Congress negotiating trying to negotiate to try to get a debt deal to stop the tax cuts from expiring, these massive budget cuts from going into effect.

Dana Bash, who is on Capitol Hill.

Dana, so we know the president is invited congressional leaders from both parties to the White House this Friday to talk about all this. There is the lust there. Senate majority leader, Harry Reid, and Senator minority leader, Mitch McConnell, and Nancy Pelosi, not surprising here. What's the expectation?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, you know, we'll see. Publicly, Suzanne, there has been a much more conciliatory tone that we've seen since the election, whether it's from the president or the House speaker John Boehner, but I can tell you in talking to sources privately on both sides of the aisle, they admit that it's all about positioning and posturing to make sure at the end of the day if we do go off the fiscal cliff that they're not blamed for it. They're the ones who looked reasonable, not unreasonable, and they're preparing for the other side to blame them for the opposite, if that makes sense. That's a lot of what you are saying in public. But the reality is that neither side has a really clear mandate date or clear vote, and no one wants to look at the end of the day like they never gave compromise a chance. Listen to Republican Bob Corker though, because there does seem to be a little bit of a crack on the Republican side on whether or not it's OK to raise some taxes.


SEN. BOB CORKER, (R), TENNESSEE: I think there is a deal. The ying and yang is we know there has to be revenues. And I think -- look, I haven't met a wealthy Republican or Democrat in Tennessee that's not willing to contribute more as long as they know we solve the problem.


BASH: So he is saying, you know, maybe we can raise taxes for some of the wealthy. But, you know, it's cliche, Suzanne, but the devil is in the details, because what Republicans so far have not agreed to is raising those tax rates that President Obama ran on, the Bush era tax cuts now at 35 percent, up to 39.6 percent for the wealthiest Americans. What Democrats are saying is that they want to use that money for deficit reduction.

Listen to what Chuck Schumer said about that.


SEN. CHUCK SCHUMER, (D), NEW YORK: The only way mathematically I've seen to do it is go to that 39.6 percent rate. If someone can show another plan that doesn't do that, we could look at it, but no one has shown one because I think it's mathematically impossible.


BASH: So then the question is where do we go from here? You know, really at this point in the game, although we don't have a lot of time, the clock is ticking big-time until December 31st, Democrats definitely feel that they have the leverage. And Republicans are going to see kind of, you know -- it's sort of the "who blinks first" situation right now. And you are sort of seeing from Republicans, Suzanne, some talk, well, maybe we'll take the Democrats up on what some proposed, like two years ago, of redefining wealth, maybe raising taxes for just those making a million dollars a year perhaps.

MALVEAUX: We've seen this before. We've seen this show before. They've tried this before. You had the gang of eight the last go round. This is a bipartisan group that tried to hash out the deal last year. Dana, we did notice not much diversity in that gang of eight. They are bipartisan --


-- but not a single female in that group. Not much diversity. What do we think is going to be different?

BASH: That's why they haven't gotten a deal maybe. They need a woman in the room.


MALVEAUX: Exactly.

BASH: Look, the reality is they are going to meet this coming week, this gang of eight. They did meet during the election season. right before the election. They are hard at work. But I am told by leadership sources on the Republican and Democratic side that at this point of the game that maybe that's not -- it's too late. That the House speaker is really the one having direct conversations with the president and their top aides. Not to say that it's not possible. Anything is possible, particularly since they have been so hard at work. But just doesn't look like it's going to happen in the next few weeks, which is really what needs to be in order to get this done.

MALVEAUX: Keep us posted, Dana. Maybe a woman in the room might help.



BASH: Thanks.


More than a dozen states offer medical marijuana. Now two states just legalized recreational use as well. The health benefits of weed.


MALVEAUX: Washington State, Seattle's King County said it's dismissing all pending marijuana misdemeanors. They are not going to prosecute any of them anymore. That is because soon marijuana is going to be legal in the state of Washington. Colorado as well. 16 other states and D.C. have also approved it for medical use. According to the U.S. Justice Department, it is still a Scheduled One controlled substance. It is the same classification given the things like heroin, LSD, ecstasy.

I want to bring in our senior medical correspondent, Elizabeth Cohen.

People talk about this all the time. They try to figure out is it good for you, bad for you? What do you make of this debate?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I think sometimes there are people that think, wow, good for you, I'm going to smoke. I'm not sick. I'm just going to smoke it because it is good for you.


COHEN: That's not the situation. The situation is smoking marijuana has been shown to be good for specific medical problems.

Let's look at what those are. People who suffer from severe nausea have been helped by smoking marijuana. People who need to have their appetite stimulated, for example. AIDS patients, people on chemotherapy have a tough time eating, this helps them eat. People who suffer neuropathic pain, the pins and needles that people get, marijuana is useful for that.

MALVEAUX: What are the downsides?

COHEN: One of the big downsides is it is smoke that contains carcinogens so you're inhaling it into your lungs, similar to cigarettes. That's a problem right there.

Another problem is, for some people, marijuana is addictive. The National Institute on Drug Abuse cites a study that shows 9 percent of marijuana users get addicted to it. And there are other studies that look at long-term users. When they try to stop using it, they become sleepless, become irritable. It is hard for them to go off of it.

MALVEAUX: Is there a way to separate the two? The good effects, but not the bad effects?

COHEN: Right. There are two drugs that contain cannabinoids in them that makes pot do all the good things medically. You could take the pill, right? It is a prescription. And the drug enforcement agency says, why don't people do that? Why do you need to smoke the drug? So that is possible. There are pills. If you don't want to smoke pot, but you want the advantages and benefits of pot, that's a road to go down.

MALVEAUX: You said 9 percent for -- 9 percent of users, it is addictive.

COHEN: That's one study and there are studies that are, you know, find different numbers, but that's one study out there, 9 percent become addicted.

MALVEAUX: It is amazing to see how this is going to be played out because, on one hand, allowed by the state, but not the federal government. There is going to be a lot of --


COHEN: Wait until the feds come in and -- yes.


COHEN: Yes. I see like a Jeffrey Toobin segment in our future, yes.


MALVEAUX: We'll have to sort it all out at another time.


MALVEAUX: Thank you, Elizabeth.

If you'd like to learn more, check out

And the man behind Elmo is accused of inappropriate relationship with a teenage boy but he denies the allegations. The scandal on "Sesame Street."


MALVEAUX: The epic downfall of Lance Armstrong continues as he was quit his Livestrong Foundation entirely. Armstrong chose to resign from the foundation to, quote, "spare the organization any negative effects as a result of controversy surrounding his cycling career." Armstrong previously gave up his position as chairman in the wake of the growing doping scandal but said he would remain involved. Now he still insists he never cheated.

The puppeteer provides the voice of Elmo is on leave of absence from "Sesame Street" today. Kevin Clash denying he had an inappropriate relationship with a teenage boy. He is being allowed to take time off to protect his reputation.

Our Nischelle Turner is following the story from L.A.

And, Nischelle, tell us what -- I guess, "Sesame Street Workshop" is investigating this? What do we know?

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Yes. There is still a lot of information to find out about this, Suzanne. But the accuser, who is now 23 years old, says this relationship began with Kevin Clash when he was only 16. Clash, however, insists that the accuser was not under age at the time of this relationship.

Now, "Sesame Street Workshop" first heard from the accuser back in June. They then conducted their own investigation. Here is what they told us since. They said, quote, "We took the allegation very seriously and took immediate action. We met with the accuser twice, and had repeated communications with him. We met with Kevin, who denied the accusation. We also conducted a thorough investigation and found the allegation of underaged conduct to be unsubstantiated."

During their investigation, the sesame workshop did find that Clash used the company e-mail for personal relationship and determined he, quote, exercised poor judgment and violated company policy regarding internet usage. He was later disciplined because of that -- Suzanne?

MALVEAUX: I think -- do we have a statement from representative from Kevin Clash as well?

TURNER: Yes, yes, we do. You know, he's not denying that there was a relationship, but he is denying strongly there was any wrongdoing. We did just receive a statement from him and here is what he told us. He said, quote, "I am a gay man. I've never been ashamed of this or tried to hide it, but I felt it was a personal and private matter. I had a relationship with the accuser. It was between two consenting adults. And I'm deeply saddened he's trying to characterize it as something other than what it was. I'm taking a break from Sesame Workshop to deal with this false and defamatory allegation."

Now the "Sesame Street" company tells us that Elmo is, quote, "bigger than any one person and will continue to be a part of "Sesame Street"." But we'll have to see how this whole thing plays out, because we also reached out to reported attorneys for the accuser, and what they told us was the reports out there are untrue. Now, they wouldn't clarify if these reports were of what's going on within the story, or if the reports that they are representing him were untrue. We're still trying to sort that out right now.

MALVEAUX: All right. Nischelle, thank you. Appreciate it.

Two Senators are launching a bipartisan plan to reform immigration. Democratic Senator Chuck Schumer and Republican Senator Lindsey Graham are resuming talks, talks that ended two years ago. Well, the plan's got four parts here. First, requiring high-tech fraud proof Social Security cards. Second, creating a process for admitting temporary workers. Also, strengthening border security. And, finally, defining a path to citizenship for immigrants already in the country.

Here's what Senator Schumer had to say on "Meet the Press."


SEN. CHUCK SCHUMER, (D), NEW YORK: Graham and I are talking to our colleagues about this right now. And I think we have a darn good chance, using this blueprint, to get something done this year. The Republican Party has learned that being anti-illegal -- anti-immigrant doesn't work for them politically and they know it.


MALVEAUX: There are an estimated 12 million illegal immigrants here in the United States.

CNN NEWSROOM continues right now with Ted Rowlands.

Hey, Ted.

TED ROWLANDS, CNN ANCHOR: Hey, Suzanne. Thank you.