Bottle. Thats it for us. Erin Burnett Outfront starts right now. Outfront next, president obama gears up for his next fight with republicans. This time, its over his defense secretary nominee. Plus days after our taxes went up, some democrats said we need more taxes, higher taxes. Yes, were going to get answers. And more details about the aurora theater massacre. For the first time, Police Describe the scene and what they found when they first saw james holmes. Lets go outfront. Good evening, everyone. Im erin burnett. Outfront tonight, saving sergeant hagel. President obama raring for a fight over his defense secretary nominee. You may say why there a fight . On paper, this guy is pretty incredible. Looks like he would be a lock for a job that usually is one with pretty much 100 of the Senate Voting aye. Military experience, check that box. He would be the first enlisted man and first vietnam vet to serve as secretary of defense, he was wounded in combat and he earned two purple hearts. Business and management experience, after all, the pentagon is a huge organization. Check. Hagel cofounded a Company Called van guard cellular systems which made him a multimillionaire. And knowing how to get things done in washington. Check on that. Hagel served two terms as a u. S. Senator from nebraska and served as deputy administrator of the veterans administration. Plus hes a republican nominated by a democrat, so it sounds pretty perfect, right . Today, president obama told the nation why he loved chuck hagel. In the senate, i came to admire his courage and his judgment, his willingness to speak his mind, even if it wasnt popular. Even if it defied the conventional wisdom. His willingness to speak his mind, no, is part of whats getting him in trouble with members of both parties. David frum is with us and also with us doug wilson, form pentagon senior spokesman for president obama. He has been criticized for using the term jewish lobby. He used it in a 2006 interview and here is what he said, quote, the political reality is that the jewish lobby intimidates a lot of people up here. I have always argued against the dumb things they do because i dont think it is in the interest of israel. I just dont think it is smart for israel. Some say chuck hagel owes an apology for that. After all, not all jews support what israel does. There could be an israeli lobby and that could be different from an jewish lobby. Does hagel have to explain himself . Well, i dont want to parse a every phrase a nominee has used. Many people use unfortunate phrases and go on to be excellent nominees. The problem with chuck hagel is not a phrase. The problem with chuck hagel is a consistent attitude. The next secretary of defense will be will likely to have deal with two basic types of issues at the top of the inbox. The first is managing a defense build down, if the sequester goes into effect, a very dramatic defense build down. You need someone with excellent military management experience, which chuck hagel does not have. I think you were too kind to him in the opening presentation. The second challenge will be the challenge of iran. We are probably coming to the extreme Decision Point where iran in the four years ahead. And chuck hagel has shown himself again and again very credulous on what you can achieve by negotiating with iran. At this point, almost everybodys eyes have been opened to the impossibility of arriving at a negotiated solution, and yet chuck hagel has insisted that such solutions are reachable with iran, hamas, and hezbollah. The question arises is he hard headed enough. Is he tough minded enough . It is one thing if he disagrees with everybody. If you disagree with everyone and youre wrong, being wrong by yourself is no improvement over being wrong in a group. Let me ask you about iran. Since david raises that point. Hagel voted against sanctions. He said hes for multilateral sanctions, but he voted against unilateral sanctions. He voted against recognizing the Iranian Revolutionary guard corps as a terrorist organization. That was well outside the mainstream. The senate voted 7622 in favor of that, and in 2006, to davids point, hagel said, and ill quote him in part, i would say a military strike against iran, a military option, is not a viable, feasible, responsible option. I believe a political settlement will be the answer, not a military settlement. Since then, he has tempered his point of view. In an oped as recently as september, he said war with iran is not inevitable. U. S. Security is seriously threatened by a Nuclear Armed iran. Is he really outside the mainstream on iran . I have to say i have served three different periods at the pentagon over the last 15 years. And theres an expression at the pentagon called hair on fire. When people get all excited over essentially little or nothing, and when the dust settles, youre able to deal with the facts. I think people should be very proud of this nomination of senator hagel. He brings to this not only experience as a veteran, as someone who served in uniform, but as somebody who understands the reality of the world. With regard to his position on iran and on sanctions, hes made clear that he supports this president and he supports the toughest multilateral sanctions that have ever been imposed on this country on that country. Should we not care if his personal views run contrary . Especially when it comes to, Benjamin Netanyahu says theres a sixmonth time period, some say it could be longer. There has to be a decision made on iran. It doesnt matter what he personally would do as long as he does what the president has already said he would do which is military options on the table . We ought to respect the fact that the president has chosen him as a nominee because he knows hes going to get his honest views, because he knows hes going to get his complete loyalty, and he knows he has served in uniform and hes been in battle, and he understands war is a last resort and the United States will put all options on the table and will become involved militarily when it needs to become involved, but we have to understand what the implications of that are, and he understands that personally. And i think that he represents the vast majority of military leaders in that regard. You know, david, one follow on this. In an interview in march of this year, chuck hagel talking about a war, he said they escalate, they always do and they always will. I dont think were necessarily locked into two options. In a sense it was a very wise thing to say. Sometimes we create false choices, war or no war. Is he being nuanced and thoughtful . We all want to avoid war in iran. Everybody wants to avoid that. It is really a bad option. But to what doug just said, secretaries of defense do not merely execute orders from the president. They are conduits they advise the president , and they shape the options that are available to the president. Some information reached the president , other information does not reach the president. If you have a strongly opinionated secretary of defense, which chuck hagel would be, who has strong views on the question of iran, and hes told us what they are, it is a very realistic fear that what the president will hear will be shaped by his secretary of defenses views. And that quote you just read, we dont know, god forbid, if there is a military confrontation with iran, we dont know what that will look like. You can devise scenarios that are very frightening, you can devise scenarios that are less frightening. The secretary of defense may have some interest in putting the most frightening scenarios before the president because they will deter president ial action and holding back the more optimistic scenarios. I want to go to one issue. This isnt about policy, but it is a policy that is relevant to the Defense Department which has been dealing with gays and lesbians in the military, and its also a very important thing in terms of values. Want to bring in gregory angelo. Gregory, the lob cabin republicans put a full page ad out opposing hagel in the Washington Post. In 1998, he called james hormel, who was then president clintons choice for the president of luxembourg openly gay, and he said his sexual orientation, i will quote him again, would prevent him from doing a good job. He recently apologized. He said he thought the apology was insincere and subsequently put out a statement saying the timing appears to be self serving but he believes the words are unequivocal and they are a clear apology. Is there anything hagel can do to change your mind as something out there fighting for gay rights in america . Its unlikely. Its not just a matter of the statements chuck hagel said about hormel. Were looking at his entire record. In the apology he asked everyone to look at the totality of his record when it came to gay and lesbian issues. And what our Washington Post issue looks at is his issues. The defense of samesex marriage, and also his references to dont ask dont tell, saying he would be opposed to repeal because it would be social experimentation, and that has no place in the military. Long cabin republicans has spent a significant amount of time and a significant amount of money working for repeal of dont ask dont tell in 2010, and right now what we need in our next secretary of defense is someone who can smoothly implement dont ask dont tell. Can they call someone openly aggressively gay accidently without being pe jor active . Anything is possible, but he apologized for what he said, so clearly he felt bad about it, if you call it an apology. It is worth noting that that apology was only issued after his name was floated as nominee for secretary of defense. You have to wonder about the timing and when hormel accepted the apology, he said it was a selfserving statement although it was something he did accept. Let me give you a chance to respond about this. You have been open about your sexuality. What do you think about his comment, openly, aggressively gay. He apologized for that comment and a number of groups have accepted that apology, including the human rights campaign. I have to pay tribute to the log cabin republicans who were instrumental in helping get the repeal of dont ask dont tell, but i disagree with them and with the ad. Im the first i was the first openly gay senior official to serve at the pentagon. And i have seen the evolution of views and part of the reason that dont ask dont tell succeeded on the floor of the senate is that there had been an evolution of views and there were votes by members of the senate who had similar records of senator hagel who voted for the repeal. Senator hagel has made clear that he supports fully the full implementation of the repeal of dont ask dont tell and lgtb family members and he will have an opportunity, i hope, if confirmed, to demonstration that with that full support. Thank you so much to all three of you, and everyone, please let us know what you think about chuck hagels views on these three issues and others. Going to be a crucial nomination for this cabinet. Still to come, just days ago the fiscal cliff raised all of our taxes, but some democrats say its not enough, so they want to raise taxes more. How much more and on whom . Yeah, were probably talking about you. Plus, new Jersey Governor Chris Christie gets high marks from voters in his home state. Why that could make him the candidate for 2016. And new details in the sandy hook elementary massacre. Some details about what the shooter was actually wearing that morning. This is 100,000. We asked total strangers to watch it for us. Thank you so much. I appreciate it. Ill be right back. They didnt take a dime. How much in fees does your bank take to watch your money . If your bank takes more money than a stranger, you need an ally. Ally bank. Your money needs an ally. I havent thought about aspirin for years. Aspirin wouldnt really help my headache, i dont think. Aspirin is just old school. People have doubts about taking aspirin for pain. But they havent experienced extra strength bayer advanced aspirin. In fact, in a recent survey, 95 of people who tried it agreed that it relieved their headache fast. Whats different . It has microparticles. Enters the bloodstream fast and rushes relief to the site of pain. Visit fastreliefchallenge. Com today for a special trial offer. Our second story outfront, raising your taxes a lot more. The ink is barely dry on the bill to avert the fiscal cliff. It raised dividends and Capital Gains and limited the amt that affected many americans, not just those at the top and already some democrats are pushing for tax revenues up up to a trillion dollars to be part of the upcoming debate. Joining us, robert reich and richard moore. Robert reich, let me start with you because all of the tax revenue from the fiscal cliff deal adds up to about 600 billion over ten years. Relative to our debt problem, thats not even a drop in the proverbial bucket. But here we are with the democrats after taxes went up on a whole list of things, they want as much as twice as much money in taxes. For real, they think theyre going to get it . Theyre going to try to gets it. I dont know any republicans or democrats who want to raise taxes for the sake of more taxes. This is all in anticipation of a very, very large budget deficit in the out years. If we dont get more revenues, were going to have to cut more into military spending, social security, infrastructure, all of the public investments we have in this country. The whole purpose of trying to get more tax revenue and hopefully trying to get more tax revenue from wealthiest americans rather than from middle class and poor americans is so government can do a lots of things americans want government to do. I want to ask you where that money is going to come, but first, steven, let me come to you. Here is the president and House Minority leader nancy pelosi. This week on this issue. The wealthiest individuals and biggest corporations shouldnt be able to take advantage of loopholes that arent available to most americans. Are you then saying to the upper classes, get ready, youre going to have to pay some more . This is not the end of it . Im saying thats not off the table. So, can the republicans stop this or not . Theyre going to push for more. Erin, i think you read the book, called republicans are from venus, democrats are from mars. What is happening is the two parties are completely talking past each other. The republicans. Mitch mcconnell this weekend and obviously other key republicans including john boehner, the speaker, said the democrats have had their tax increase, theyre done. As you said, the democrats are saying we want another bite of that apple. Honestly, i dont think theyre going to get it in the next two years. I think the republicans are pretty almost universally unified theyre not going to go for any more taxes. Let me just make one other quick point. I was struck by what the president said, you played the clip of saying there are all these loopholes in the tax code and we could raise money if we got rid of them, and all i could think of is who put all of these loopholes in the tax bill that just passed. The wind subsidy, the biggest loophole in the tax bill, which was the enormous subsidy for the wind industry. Its interesting people are saying we have to get rid of the loopholes are the ones who put them in. I think we can all agree everybody hates a loophole unless its their own. Interest rates went up, dividends went up, there was a medicare surtax on both of those things. The estate tax was adjusted. Payroll tax affected all people in this country. Medicare surcharge on income affected the wealthy and a limiting of deductions which means some wealthy lose up to 80 of their deductions. I know you can always find ways to raise taxes on people but what else can democrats touch . That was an exhaustive list. It was an exhaustive list, but the revenue raised was only 600 billion. And 600 billion as you said at the top of the segment is really a drop in the bucket in regards to what we need to do in getting the deficit down. So were going to have to search for other sources. What are the other sources . For example, mortgage Interest Deductions, suppose you buy youre wealthy enough, you buy a 20 million house. You have a mortgage Interest Deduction of something in the order of 30,000 or 40,000 or 50,000 a year. Well, should that be limited . I think that is a very important question. Or take, for example, something we talked about a lot during the election. That is private Equity Managers and many hedge funds managers who can treat their income as Capital Gains, and even the new deal bob, here is the problem with what youre saying steve, youll agree with me on this, im sure. Here is the problem, we agree we should get rid of all of these loopholes. This is interesting, erin, that when mitt romney talked about this in the campaign of putting a cap on these deductions, it was the democrats, people like robert reich, maybe not you personally, but people of your philosophy who said we cant do that. Heres the point we actually do believe what . I dont know why democrats arent in favor of putting a cap on those deductions. Im saying if were going to get something done on this, erin, what is going to have to happen is democrats are going to have to agree to reduce the tax rates in exchange for getting rid of the loopholes. Or were going to have to raise taxes on everyone, as npr ran the numbers. If you raise the numbers on 8 of the middle class, you raise more money than by taxes millionaires. There the question is how do you define the beginning and middle of the middle class. Is it 75,000 or 110,000 a year . Some places around the country, people consider like in the city of san francisco, where i live pretty close to san francisco, people say, well, middle class is probably 120,000 to 140,000 a year. Were going to have to do that kind of calculations, make those kinds of judgments, because undoubtedly, people do not want to cut the military as drastically as even chuck hagel may want to cut it. We are not going to want to cut medicare and social security, and were not going to want to cut education and roads and bridges. Very, very quick final point because we have to leave it there. This is exactly what we have been saying on the wall street Journal Editorial Board for the last six months. You cant get the money you need to fund all these programs by just taxing the rich. And we have only had this tax increase on the rich for what, 72 hours, and already people like nancy pelosi are saying we have to tax the middle class, and by the way, thats where the