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The Situation Room

Tax Fight; Syrian Rebels Make Gains; Interview With Senator Max Baucus

Aired November 30, 2012 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOE JOHNS, CNN ANCHOR: I'm Joe Johns. THE SITUATION ROOM continues right now.

KATE BOLDUAN, CNN ANCHOR: Happening now: As President Obama and Republicans fight over taxing the rich, are they really getting a free ride from the tax man? You might be surprised.

Plus, we will take you live to the scene of a derailed train where some tank cars' toxic contents are leaking.

And you may be seeing the moment a Powerball winner found out he won, so what has happened to him?

Wolf Blitzer is off. I'm Kate Bolduan, along with Jim Acosta, and you're in THE SITUATION ROOM.

Republicans and Democrats now have just 32 days to make a deal, or your taxes are going up, period. Not only that, but more than a trillion dollars automatically will be cut from vital federal programs like defense, education, and housing assistance.

It's referred to as the fiscal cliff. And when it comes to doing something to avoid it, House Speaker John Boehner bluntly told reporters today there's a stalemate. For his part, President Obama is trying to break the stalemate by asking voters to put more pressure on Republicans.

For more on this, let's go live to our chief White House correspondent, Jessica Yellin, who has been tracking this today.

What's the latest, Jess?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hey, Kate.

Well, the White House says tax rates have to rise on the wealthiest or there is no deal, but Republicans say, no, spending cuts have to be the place that negotiations begin. This is a case of who budges first.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Just when you thought campaign season was over... BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Congress does nothing, every family in America will see their income taxes automatically go up on January 1.

YELLIN: President Obama is back on the stump pressing Republicans to cut a deal averting the fiscal cliff.

OBAMA: It's sort of like the lump of coal you get for Christmas. That's a Scrooge Christmas.

YELLIN: Republicans say they want their Christmas too and blame the president for the deadlock.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: There's a stalemate. Let's not kid ourselves. I'm not trying to make this more difficult.

YELLIN: Things got tense after Treasury Secretary Geithner visited Capitol Hill Thursday to present what Republicans are calling an unreasonable proposal.

It includes $1.6 trillion in new taxes, in part through raising rates on the top 2 percent and limiting loopholes and deductions, $50 billion in stimulus next year, and $400 billion in Medicare and other entitlement savings to be worked out.

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: I think that the proposal that was delivered here by Secretary Geithner to the speaker and me yesterday was not a serious proposal.

BOEHNER: They want to have this extra spending that's actually greater than the amount they're willing to cut.

YELLIN: But Democrats say it was just a starting point and one Republicans should counter.

OBAMA: There is going to be some prolonged negotiations. And all of us are going to have to get out of our comfort zones to make that happen.

YELLIN: CNN has learned last week the Republicans gave the White House their own starting position, which Democrats consider unbalanced, extending all the Bush era tax rates, including for people making $250,000 and up, raising revenue through tax reform, and cutting Medicare in part by increasing the eligibility age.

(END VIDEOTAPE)

YELLIN: Bottom line here, both Democrats and Republicans are playing for leverage against the clock. And, frankly, Democrats are emboldened by election results that gave them more seats in both the House and the Senate next session, and also won the president a second term in part on a pledge to do what Republicans are still resisting, raising tax rates on the wealthiest Americans, and tonight at the White House, they believe that that is a opponent on which Republicans will eventually relent, Kate? BOLDUAN: Jessica, what's the strategy for the president, behind the president taking the show on the road today, heading to Pennsylvania? What's the strategy there?

YELLIN: Well, you know, the president has seen the poll numbers, and a majority of Americans say they do support raising tax rates on the upper income Americans. When the president was in the payroll tax fight about a year ago and he took that case to the American people, and had the American people lobby Congress to get the payroll tax cut extension passed, it worked very well.

He is trying to do the same thing again, have the American people put pressure on Congress to get them to pass what the president wants. He's taking his case to the people, and letting them exert pressure -- Kate.

BOLDUAN: And not making Republicans happy in the meantime.

(CROSSTALK)

BOLDUAN: But the negotiations continue.

Yes, Jessica Yellin at the White House for us this evening, thanks so much, Jessica.

One thing is for sure, if Congress and the president don't make a deal, everybody's taxes go up next year.

JIM ACOSTA, CNN ANCHOR: That's right, but what you may be surprised by is the country's top wage earners and what they are paying vs. what we used to in years past.

CNN's Tom Foreman joins us now with a reality check.

Tom, what are you finding?

TOM FOREMAN, CNN CORRESPONDENT: You know, Jim, the simple truth is the White House really pushed this notion that not only do the wealthy not pay what they call their fair share, but that they have been given much bigger breaks than everybody else over the year.

Let's go back in time to 1980 and get a sense of this looking at numbers from the National Bureau of Economic Research. This is roughly, if you added up all of the taxes, state, local, and federal that people were paying back then, this is what you had. Below $25,000, about 20 percent of income went this, $75,000 to $100,000, about 33 percent of income, $150,000 to $200,000, 38 percent of income.

And look at this, over $350,000, back in 1980, about half of the income these families were making back then went to taxes in one form of another. Now let's bring it's forward to where we are today and you can see what's happened with tax cuts over time.

Yes, there has been a reduction, down here in the lowest level, only a 1 percent reduction. Up here, only a 3 percent reduction. Up here, a 4 percent reduction. But when you get to the top level, there is a 7 percent reduction.

Now, this is all in your interpretation. The White House wants to say look at this massive advantage that the rich people are getting that other people didn't get. Republicans and others point and say, yes, but they're still paying much more than anybody else is in the system in sheer dollars and in a percentage, and that should also be taken into account.

Jim, Kate, that's really -- that's the nexus of this argument. Each side is correct in a way in saying, yes, the rich have benefited from tax cuts as a percentage more, but it's also correct to say they're still paying much more than anyone else.

ACOSTA: Tom, that brings us to another phrase that's been tossed around a fair bit lately, fair share. What about that?

FOREMAN: That's purely a matter of interpretation.

The president has used the word fair over and over and over again. The thing is it means wildly deferent things to different people. And it just depends on how you look at it. Here is one interesting way of looking at this that people may not consider a whole lot. If you look at the course of a calendar year, and you say let's break down how much we're paying in taxes, if you could pay all of your taxes first, so everything you earn went to taxes, and then you kept the rest of the money, look at what would happen for some of the lowest earners out there, people who make zero to $25,000.

If they paid every piece of tax, state, local, sales, everything, for about two and two and a third months, something like that, all of their money would go to the government. The remainder of the year would be all for them to keep.

But if you go to the upper tax brackets, look what happens now. These people are working the better part of an entire half-year for the government alone. They get none of this money. And actually where it was in 1980, they would have been very, very close to a half- year to get no money, all of that money going to the government.

So the question is, where is fair in this equation? That's really what this fight is about. The White House is saying it's not fair that these people aren't paying more, and the Republicans are looking at things like this and saying, come on, how much more do you want?

Jim, Kate.

ACOSTA: Yes. But somebody has to pay, right, Tom? It might be all of us. Tom Foreman, thanks very much.

BOLDUAN: Yes, especially if we go over the cliff.

ACOSTA: That's right.

So the way things stand tonight, Republicans say there's no deal unless the president gets specific about spending cuts. BOLDUAN: And Democrats say there is no deal without higher tax rates on the rich. So how do we get past the stalemate?

CNN's chief political correspondent Candy Crowley is joining us now.

Candy, if you had the answer to that right now, we could all just go home...

(CROSSTALK)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I could tell you when to schedule your vacations, all that.

BOLDUAN: Absolutely.

But the question is, we're a month out, but they're negotiating and they're really playing tough right now. Do you think that we're pushing the panic button a little too soon? You know Congress does love a deadline and to go right up to it.

CROWLEY: Yes, they expand to the amount of time they're given. So I suspect we will be here on the 30th hammering things out.

I don't think it's time for panic because there is a rhythm to these things, and first, especially post-election, it's like OK, we will all get along now because the American people don't like us to fight. And now this is the staking out your hard positions. This is really, really what I want and must have.

Both sides have now pretty much done this at least to each other, and now it will gradually get harder and harder. But again it's just so hard to believe that these guys, meaning the White House and Congress, are going to let this thing go over the cliff.

I just -- I really think the intensity of the deadline, and the intensity of what would happen, as we have outlined so often, will make them come to a deal. We just don't know what is yet.

(CROSSTALK)

ACOSTA: And if you look at the proposals coming from the president and from Mitch McConnell today, the Senate minority leader, they both basically come from their entrenched positions. You have to wonder at this point is this just some chest thumping that is going on from both sides of the aisle? Do they have to put on a show for their members before they can get serious?

CROWLEY: They do. I tried. I tried. I tried.

But more than that, this is the kind of circling one another stage. And they try to figure out which way the adversary is going. They have to do this. The negotiations don't take place at press conferences and don't they don't take place in interviews.

(CROSSTALK) BOLDUAN: ... things aren't going well when that happens.

CROWLEY: That's right. Exactly. Exactly. They take place. The staff does it, and then when you start to hear about the principals meeting, or phone calls, that's when they're beginning to get serious.

BOLDUAN: And you have a big interview with one of the key principals in these negotiations. Give us a preview of "STATE OF THE UNION."

CROWLEY: Timothy Geithner, who, as we know, is secretary of the treasury, and leading the negotiations. We will sit down with him and he will be out lead guest. And then we will have some folks from Capitol Hill, including Senator Warner and Senator Ayotte, to sort of listen to what he said and see where we go next.

BOLDUAN: Make them strike a deal. That would be a great interview.

(CROSSTALK)

BOLDUAN: Right on the show. It will be great.

"STATE OF THE UNION," Candy Crowley 9:00 Sunday, we will be there.

ACOSTA: We will be watching. Thanks, Candy.

BOLDUAN: Thanks, Candy.

ACOSTA: A key senator at the center of the talks also says both sides should take a deep breath, but why wait to make a deal? We will ask the Senate Finance Committee chairman, Max Baucus.

Plus, as bombs fall in Syria, one of the country's neighbors is nervous it could get much worse. We will have an exclusive interview next.

(COMMERCIAL BREAK)

ACOSTA: Fighting raged on in Syria today. Rebels are making gains around the northern city of Aleppo. This video is said to show rebels targeting regime loyalists.

BOLDUAN: I the capital of Damascus, violence erupts near the airport, forcing flights to be canceled. Syria's neighbors flooded with refugees are especially concerned.

Jordan's foreign minister, Nasser Judeh, spoke exclusively with our correspondent, Barbara Starr.

Barbara joins us now.

Barbara, what is Jordan's biggest concern looking at that situation right now? BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, we talked to the foreign minister extensively about this situation in next-door Syria, just across Jordan's northern border.

He said looking at the rising violence in Damascus in the last few days, he has some very fresh concerns. Listen to a bit of what we talked about.

(BEGIN VIDEO CLIP)

NASSER JUDEH, JORDANIAN FOREIGN MINISTER: Today, I think what we're seeing is effectively a civil war that is political in nature.

Our main worry, our main concern is for this political civil war to slide, God forbid, gradually into an ethnic and sectarian civil war. The ethnic and religious composition is Syrian society is a major source of worry for all of us.

STARR: The question, I suppose, is if it turns to ethnic civil war, what does this mean for Jordan?

JUDEH: We have to ensure that a political solution kicks in before it slides into becoming an ethnic and sectarian civil war. I'm not saying that this is the case now, but the elements of it are there on the ground.

(END VIDEOTAPE)

STARR: What the minister made very clear is if this does become ethnic sectarian civil war, the fear is that it spreads across borders and it begins to engulf the region.

Why is all of this so important? One of the key reasons is that Syria has a significant stockpile of chemical and biological weapons that threaten the region possibly if they're not under control, and we know that very quietly and very privately, Jordan, one of the U.S.' most important allies, is working with the Pentagon on how to secure those weapons if it were to come to that.

BOLDUAN: Clearly a huge concern.

But, Barbara, does Jordan think the U.S. is doing enough here?

STARR: Well, right now, what Jordan needs the most from the U.S., officials tell us, is basically cash. They need the money to help support these refugees.

They have something on the order of a quarter of a million Syrian refugees in their country, tens of thousands in a refugee camp in northern Jordan, hundreds of arriving every single night across the border. Jordan is a very poor country. They have a lot of economic stress already, and they need the money to build these camps, even just to basically feed these people, provide medical care for them.

And they want more pressure for a political solution in Syria, get Assad out of there, so they can send these people back to their homes.

BOLDUAN: Barbara Starr at the Pentagon for us, thanks so much, Barbara. Great interview.

ACOSTA: A scary scene between Philadelphia and New York. A train packed with highly toxic chemicals derails on a bridge. Evacuations were ordered. We will take you live to the scene.

(COMMERCIAL BREAK)

ACOSTA: All day, we kept our eyes on the eerie pictures coming in from a train derailment in New Jersey.

BOLDUAN: A bridge failed and some of the derailed tank cars went into a creek and at least one started leaking toxic chemicals.

Walt Kane of CNN affiliate News 12 New Jersey is joining us now from Paulsboro, New Jersey, with more on this.

Walt, the pictures we have been watching throughout the day are absolutely amazing. What's the latest you're learning?

WALT KANE, NEWS 12 NEW JERSEY REPORTER: Well, Kate, right now, it's dark, and I'm not sure how well you can see it, but over my shoulder, you may be able to see that crews are pouring water on some of those trains -- cars that derailed.

That is, in part, to try to disperse what is left of the vinyl chloride, the chemical that was in one of those tankers. That is a chemical that is potentially dangerous and it can cause respiratory problems. Several dozen people, perhaps as many as 70, were taken to area hospitals complaining about things like dizziness, nausea.

But the word is that nobody was seriously affected. The all- clear was given. There was an evacuation of sorts. It really was sort of a lockdown. People were told stay in your homes, close all the windows. But early this afternoon, that was cleared. The air quality tests are OK, and I can tell you throughout the day from time to time, you could get this really sickly sweet odor in the air. Officials say that is sort of a telltale sign of vinyl chloride. Haven't smelled anything like that in several hours.

ACOSTA: That was the question I was going to ask you, Walt, is whether or not you have been able to smell or taste this yourself.

What have those folks been saying when they have experienced that, and what do you know about whether or not this has happened before? So many of these trains carrying these kinds of chemicals go up and down the East Coast. Has that area experienced something like this before?

KANE: Well, not only has this area experienced something like this before, but this very bridge right here experienced a derailment and a collapse just three years ago.

And that is something that the NTSB will be investigating. There is serious questions about that. How did a bridge that was repaired so recently fail again so soon? The NTSB did not get involved in the investigation three years ago, because there was no hazmat spill at that point. There was nobody hurt. It was just sort of a garden variety derailment, if you will.

But the NTSB says they're absolutely going to be looking at the repair reports from three years ago, as well as inspection reports since then. This is a Conrail bridge. Conrail owns it. Conrail is responsible for maintaining it. But the National Transportation Safety Board wants to know what those inspection reports and maintenance reports show and why a bridge that was repaired just three years ago failed again so soon.

BOLDUAN: Walt Kane of our affiliate News 12 New Jersey, thanks so much.

Only imagine the noise and the sounds of the people living around there heard today.

ACOSTA: Absolutely. And the thought that this has happened before, something like this in that area...

BOLDUAN: Clearly, they are going to be looking, investigating this more further.

ACOSTA: Absolutely.

BOLDUAN: Still ahead, lines drawn in the sand on both sides of the fiscal cliff fight, but why not solve the problem sooner, like right now, rather than later? I'm asking one of the key senators at the center of the negotiations.

(COMMERCIAL BREAK)

BOLDUAN: Stalemate, that's how House Speaker John Boehner describes the fiscal cliff negotiations right now.

ACOSTA: Here's where things stand. House Republicans dismissed President Obama's initial debt reduction proposal after meeting with Treasury Secretary Tim Geithner on Thursday.

BOLDUAN: For his part, the president traveled to Pennsylvania today arguing Congress should pass the middle-class tax cuts right now which are set to expire on January 1, along with many other tax provisions.

But Republicans say that's a no go, claiming any deal needs to include tax cuts for everyone.

I talked about the standoff earlier with a powerful Democratic senator who has been weighing in behind the scenes.

(BEGIN VIDEOTAPE)

BOLDUAN: Joining me now is Senator Max Baucus, the chairman of the Senate Finance Committee, the very important tax-writing committee in the Senate.

Senator, a very busy week, not a lot of progress to show for it. As you well know now, Republicans have soundly rejected the offer coming from the White House, even calling it absurd.

This offer, do you view it as a serious offer?

SEN. MAX BAUCUS (D-MT), FINANCE COMMITTEE CHAIRMAN: I do.

I think we're in the initial stages. There are about 30 days left before the so-called cliff hits us. I think, in about a week, we will get down to serious negotiations.

BOLDUAN: Why does it take a week? Why not now? Many would say that we're way beyond opening bids, that we have already time since the Thanksgiving break.

BAUCUS: Well, I agree with you, frankly. I think we should start talking right now, and both the president and the speaker should do so.

But for whatever reasons, it's a little slower. I think it's part on the speaker's side. His people are not quite certain what to do about rates, as opposed to capping deductions as they're going to get revenue, if at all, and how much. And I think the Democratic side is, gee, how much in spending cuts and entitlement cuts can there be, and they're trying to figure that out.

But I agree with you. I think that we should start -- they should start speaking and negotiating right now.

BOLDUAN: And to that point, in this White House offer, the White House is calling for -- is offering about some $400 billion in Medicare and entitlement savings, but when you take that on balance with the revenue and the tax increases that they're looking for, that doesn't sound like a whole lot of pain on the part of Democrats. So where is the compromise?

BAUCUS: Well, if you look at the president's budget, there is more than what the numbers you just suggested by a couple hundred billion.

So, that's a start. And don't forget, these are negotiations. That is, they're starting points. One side is going to probably go up a little, the other side is going to go down a little bit, if we have to, to get to the middle. And that's the way you have to be.

I was home in my state of Montana a couple weekends ago at a great big football game, the biggest event we called the brawl in the wild, Montana State verses the University of Montana. Everybody there that I saw walked up and said, "Max, just solve that fiscal cliff. Get it done." There were no special pleaders. Nobody said, "Protect my income or don't cut my Medicare." They said, "Get it done. We need a solution, get it done." And that's, I think, what has to be done, and I think it will be done before we reach the end of the year. BOLDUAN: Now I have to ask you, as the chairman of the Senate Finance Committee, you will play a major role in any changes to tax policies. The last time any really major tax reform effort happened was back in 1986. Do you think any substantial tax reform is possible in this partisan Congress?

BAUCUS: I do. I think so. I hope so, and I also think so. And that's because, probably since 1986, it's become so much more complicated. Something like 15,000 new additions to the code since 1986. It's getting weighted down. It's got to be cleaned up. Lower some rates and broaden the base. Get rid of some of those deductions and credits. Make it cleaner, simpler.

Same on the corporate side. We're not that competitive worldwide. We can lower the top corporate rate down in a revenue- neutral way. And that's also, I think, very important for American credit in this and to get more American jobs.

BOLDUAN: In the terms of getting to that point of averting the fiscal cliff, almost every major negotiation and battle today has really come down to President Obama and House Speaker John Boehner, the Republican House speaker. Do you think it helps or hurts that key lawmakers like yourself seem to be left out of this deal making?

BAUCUS: Well, I'm in constant consultation with -- with Secretary Geithner, with the White House, just a few minutes ago came back from meeting with Congress, and Dave Camp, the chairman of the House Ways and Means, meet with Reid very often. So there are a lot of conversations going on where I gave my views, and learn, and so it's -- there are more people involved.

BOLDUAN: Now this is really coming down to, as is no surprise, the issue of tax rates. Will Republicans agree to raising tax rates on the wealthy as President Obama has made clear he is standing firm on? Are you willing to go over the fiscal cliff if Republicans do not agree to that?

BAUCUS: I think if there's no agreement whatsoever, that the other side is completely intransigent, that the president has probably no choice but to say, "OK, we're going to go over the cliff."

That would not be my first preference. My first preference is that, as we get closer to the cliff, that we find an agreement that makes some sense, so we don't have to go over it. Because if we don't go over the cliff, then we're entering very uncharted waters. Who knows what the markets will -- how they will react, what other positions people would take, what will happen -- I hope we don't have to go over.

BOLDUAN: And it -- and it could hit almost every single American, which is why, when people are watching this, they are so frustrated why Congress can't do what they want -- the American people want them to do, which is compromise. So are you telling me that, as you know, Congress needs a deadline often and very much likes to go right up against the deadline. Is all of this high drama just posturing? BAUCUS: No, no, it's not posturing. Just the world is run by deadlines, you know. It's kind of human nature sometimes not to do when you know you should do until you get closer to that deadline. It would be better if we did not push by a deadline. It'd be better if we work right now, and we are working now, but the deadlines help.

BOLDUAN: We're all watching in the process. Senator Max Baucus, the chairman of the Senate Finance Committee, we are -- we thank you for your time, and we're all counting on you guys getting deals done. Thanks so much.

BAUCUS: We're all counting on each other. This is -- takes teamwork. Thank you very much, Kate.

BOLDUAN: Thank you.

ACOSTA: Up next, a new twist to the massive protests in Egypt. Thousands of women hit the streets of Cairo. The message they want Washington to hear. Just three minutes away.

(COMMERCIAL BREAK)

BOLDUAN: Women take a key role in the latest protests against Egypt's new president and the Muslim Brotherhood. Jim has more on that and more of the other today's stuff -- more of today's top stories -- Jim.

ACOSTA: Kate, that's right, Egyptians have taken to the streets, protesting what they say is an attempt by Egypt's new leader and Islamic conservatives to hijack their constitution. CNN's Reza Sayah is in Cairo.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT: There doesn't seem to be an end to the demonstrations here in Cairo. Another mass protest here in Tahrir Square. Tens of thousands protesting President Morsi and the draft of this new constitution.

Some of the president's fiercest critics here are women, women's rights activists. They don't like the way this constitution was drafted. They don't believe they were represented in the panel. The draft of the constitution. And here's what else they're saying: "We don't trust the president and the Muslim Brotherhood."

UNIDENTIFIED FEMALE: Look at other countries, they screwed all the countries, and now they want to screw Egypt.

SAYAH: And when you say "they," who is "they"?

UNIDENTIFIED FEMALE: The Muslim Brothers. The Muslim Brothers. The (UNINTELLIGIBLE), all these groups. The Muslim Brothers are...

SAYAH: So you don't...

UNIDENTIFIED FEMALE: They are not Egyptians. They are an international organization.

SAYAH: So you don't trust them at all?

UNIDENTIFIED FEMALE: Of course not.

SAYAH: And what -- you don't -- you don't trust the Muslim Brotherhood?

UNIDENTIFIED FEMALE: No, I don't.

UNIDENTIFIED FEMALE: All of these people, we don't trust them. They use religion to force us to do what they want. They are not really religion (ph).

SAYAH: How much longer are you willing to come out here and protest?

UNIDENTIFIED FEMALE: Every day we protest here.

UNIDENTIFIED FEMALE: I think it just started from zero.

SAYAH: But he says that if you don't like it, go vote. What's wrong with that?

UNIDENTIFIED FEMALE: Well, sure, we will, I mean, but we want him off, and we want all of his people off.

(CHANTING)

SAYAH: Those were chants of "baktel (ph)," "baktel (ph)." It means "cancel" or "annul" an Arabic. Women here, other anti-Morsi protestors, calling on President Morsi to cancel the draft of this constitution. They say they're not going to leave Tahrir Square until he does so.

In the meantime, President Morsi giving no indication that he's going to back away from his position.

Reza Sayah, CNN, Cairo.

(END VIDEOTAPE)

ACOSTA: In eastern Wyoming, the authorities are investigating the deaths of three people, including a Casper College faculty member, and a man they say is the suspect, who died of an apparent suicide.

It began on the Caspar College campus this morning. Police say a sharp-edged weapon was used, and it was over three victims that were there on separate crimes. All reportedly knew each other.

Just a couple of days ago, House Republicans were getting criticized for electing all white men as committee chairman in the next Congress. Today, the speaker changed that. John Boehner named Congressman Candice Miller of Michigan to chair the House Administration Committee. In a statement, Miller said she is both humbled and honored by the appointment. And we should congratulate the new chairwoman.

BOLDUAN: Absolutely. And I look forward to covering her. Likely the only Republican woman to chair a committee in Congress.

ACOSTA: Looks that way.

BOLDUAN: Still ahead, it's one of the biggest mysteries of the day. Does the man caught on camera, celebrating in Maryland, have the winning Powerball ticket, bought in Arizona? We're investigating, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CINDY HILL, POWERBALL WINNER: I went by to see what the numbers were, and I got in my car, and I didn't have my glasses. And I was thinking is that the right numbers? Is that the right numbers? And I was shaking, and I called my husband and I said, "I think I'm having a heart attack."

(END VIDEO CLIP)

ACOSTA: Well, Cindy Hill's heart is fine, and her family's bank account is even better. Her husband, Todd -- excuse me, her husband, her three grown sons, and a 6-year-old daughter won half of this week's $587 million jackpot in the Powerball lottery.

Hill's oldest son says he got a text message saying, "Call me ASAP." And since his mom is, in his words, kind of "the girl who cried wolf," he didn't believe her. He definitely does now.

And the other winning lottery ticket, as many of you heard, was sold in Arizona, but the man who apparently has it and showed it to people, turned up in Maryland. Now he has vanished completely. CNN's Brian Todd spent today trying to unravel the mystery of the missing Powerball jackpot winner. He joins us live now from Maryland.

Any -- any traces of this guy, Brian?

BRIAN TODD, CNN CORRESPONDENT: Not in the last several hours, Jim. You know, we're obviously a long way away from where that Powerball ticket, that winning ticket was sold, but the winner may very well be from this area, and we may have caught a glimpse of him on surveillance video from this very store.

(BEGIN VIDEOTAPE)

TODD (voice-over): The usual midday buzz at a gas station's convenience store. On surveillance video, the buzz starts really humming. This mystery man, at an Exxon station in Upper Marlboro, Maryland, Thursday, checks a Powerball ticket with manager Negassi Ghebre.

(on camera) And you're saying -- what did you say?

GHEBRE: What are you saying, I said, "You got it." I said, "That's the right number."

TODD: The man may be the Arizona winner of the Powerball drawing, could be holding a ticket worth nearly $200 million. Customer Bill Kilby was right next to him.

BILL KILBY, WITNESS: I asked him -- I said, "The winning ticket from was Arizona," and he said, "I just got back from there." He was in the military.

TODD: The winning ticket was bought at a convenience store near Phoenix. When he found out, back in Maryland, the apparent winner sure made an impression with cashier Kamran Afgan.

KAMRAN AFGAN, CASHIER: He hit really bad the counter, like the counter, and said, "Oh my God!" Really hard. I'm scared. I'm scared that he might have a heart attack.

TODD: Afgan says the man ran out, then came back, realizing he'd forgotten to get his gas. But who is he? So far, we don't have a name.

(on camera) This is the spot where all the excitement took place, the counter, the machine that printed out the ticket where the man checked his numbers.

But it's on the surveillance tape, where you can pick up a couple more clues about the guy and about his behavior here. On the video, we see him, before he finds out, giving some cash to a young man who doesn't have enough for his purchase. We see the man's car pulling out but can't make out his license plate. A witness says he may have had a Virginia Department of Transportation logo on the back of his vest.

We searched for that logo, found a pattern that looks to be similar. A spokeswoman for that agency says it does look like one of their vests, maybe worn by someone in their safety service patrol, but they don't know who this man is. We do know he has a sense of humor.

How did his behavior change once he figured out that he might have won?

KILBY: I don't know. The last comment I heard was that he had enough money to ask Beyonce out. So he seemed pretty happy about it.

(END VIDEOTAPE)

TODD: But again, we can't say for certainty if this was the Arizona winner who came to this store. An Arizona lottery official told me just a short time ago that no one has yet stepped forward to redeem the winning ticket. They have 180 days to do that. And they have to either do it in Arizona, or they have to mail the ticket in. That's probably unlikely. It's a little risky to do that -- Jim.

ACOSTA: And it just goes to show you that there are cameras watching almost all the time, no matter what we do these days, especially if we go into a convenience store. But we do think we will get the name of this winner at some point, right? I mean, he has -- he or she has to come forward, if it's not that man, if it's somebody else, and those officials in Arizona would have to tell us.

TODD: Well, you know, it does depend on the state, but in Arizona, you're right. The person -- we're told by Arizona lottery officials, the person does have the right to, quote, "decline publicity," but they have kind of an open records law that says that if you win this, and the information about your name is requested, that Arizona is forced to essentially give that information out. So you can bet, obviously, that whenever someone comes forward, that information is going to be requested by someone.

ACOSTA: All right, and we'll see if he's still wearing that vest. Brian Todd joining us live from Maryland. Thanks very much, Brian. Good to see you.

BOLDUAN: You know how many people are going through the what ifs today and this week?

ACOSTA: That's right.

BOLDUAN: It's amazing.

ACOSTA: I will say that I went and played the Powerball, because I wanted to play it.

BOLDUAN: Really?

ACOSTA: Yes. And when I went into the gas station to buy the tickets, there are at least three or four other people who did not know how to fill out the Powerball -- you know, the thing that you fill out to get your Powerball ticket, including myself. I was asking somebody, "Now, what do you -- where do you fill in this?"

BOLDUAN: You just do it. I just do the auto play or whatever it's called. I don't even know what it's called.

ACOSTA: The guy behind the counter is giving me one of these things. But anyway. It didn't work out.

BOLDUAN: He's just like, "Give me your money."

ACOSTA: Yes.

BOLDUAN: Exactly.

We've all seen and heard about the aerial drones used in Afghanistan and Pakistan, but what about underwater drones? Erin Burnett is going "OUTFRONT" on this latest technology.

Erin, what are you finding? This sounds fascinating.

ERIN BURNETT, CNN ANCHOR: I mean, it's pretty amazing. Right? We're not just talking about underwater drones, everybody, that are basically invisible and some sort of piece of technology. These are actually drones that can watch you, that can watch submarines that are in the bodies of fish.

So, next time you look at that little innocent-looking fish, it could be a drone. And this is something that could have huge implications for America's defense technology. It's a great story, so we're going to show you exactly how it works and how it looks when you see a fish with a drone inside of it.

Plus, guys, we're also going to be talking about the fiscal cliff. And I have purchased this game of battleship. Can you sink your opponent's fleet before your opponent sinks yours? Barack, John, you know we're talking you. That's coming up top of the hour, guys. Happy Friday.

BOLDUAN: Happy Friday. I will play you in Battleship anytime. I promise you will beat me.

BURNETT: I don't know about that.

ACOSTA: D-6.

BOLDUAN: "ERIN BURNETT OUTFRONT" at the top of the hour. Have a great weekend, Erin. Thanks so much.

You probably don't understand it, and you may or may not know how to dance to it, but Gangnam Style isn't going anywhere. Our Alina Cho sits down with the man in the center of this global craze. Next.

(COMMERCIAL BREAK)

ACOSTA: You've heard the song, but many people don't know the story behind the viral sensation, "Gangnam Style."

BOLDUAN: CNN's Alina Cho got it from the creator himself, Psy -- Alina.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT: Kate and Jim, what's fascinating is that the horse dance made famous by "Gangnam Style" was actually quite popular in Korea back in the 1980s. So recently, Psy and his choreographer thought it might be worth revisiting. They put the dance to music, and the rest, as they say, is YouTube history.

I guess we want to start at the beginning.

PSY, SINGER: OK.

CHO: Gangnam.

PSY: Yes.

CHO: The Beverly Hills of Seoul.

PSY: Yes. So I, you know, it's quite the district, you know, as just that's my point of view and I described it as laconic (ph) in the daytimes and go insane at nighttime. So I compare all the sexy ladies to, you know, the calm at the daytime and going insane at nighttime, especially for me, and that's what the lyrics is about.

CHO: You obviously, though, have a knack for performing and have a knack for dance. But do you think that part of the reason why this has become so successful and went so viral is because this dance is something that almost anyone can do with a little bit of practice?

PSY: It's not that easy, though.

CHO: Some of the moves are really not easy. I've tried them.

PSY: Yes. But when I do the dance, it looks easy.

CHO: It does look easy.

PSY: And I like the horse, because when people see it, it looks like, "Oh, I cannot do that." And they're not going to do it right.

CHO: Right.

PSY: But if the people see it and "Aha! I can do it," and they are trying and people are trying. That means viral.

CHO: They've tried nearly a billion times.

PSY: That's what I'm saying. So, you know, I just saw, like, 20,000 people flash mob in Italy. They got the video off YouTube. And they were doing every moves. And they were saying every Korean words.

CHO: How crazy is that?

PSY: So, you know, I mean, I do performing. It's kind of, I feel kind of, you know, sorry to the audience. Because they don't have any idea what I'm talking about, right?

CHO: I do.

PSY: But when I see their face, they are so happy. But they don't -- they don't have any idea what I'm talking about, but they are so happy and they are waiting all the way until "sexy ladies."

CHO: So, what will Psy do next? Well, it turns out he's already finished his next track. The lyrics are a mix of Korean and English. If I had to guess, probably a little more English than "Gangnam Style." Release date to be announced.

And when I asked him, "Don't you feel the pressure to do better than 'Gangnam Style'? I mean, how do you beat nearly a billion views on YouTube?" He says he doesn't. He calls "Gangnam Style" a phenomenon, that he can't beat it, he doesn't want to and that, Kate and Jim, he's just happy to be on the map.

BOLDUAN: Alina, thank you. You should all have seen it. Jim was absolutely rocking that dance while the piece was running.

ACOSTA: All over the place. Yes. BOLDUAN: Do you want to give us a preview?

ACOSTA: Unfortunately, I think we're out of time.

BOLDUAN: Yes, of course now we're out of time. Wolf, we'll be back on Monday. Until then, please don't forget, as we always say, tweet me, @KateBolduan.

ACOSTA: And tweet me at @JimAcostaCNN. Have a great weekend.

BOLDUAN: Have a great weekend, everybody. "ERIN BURNETT OUTFRONT" starts right now.

ACOSTA: Right now.