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ANDERSON COOPER 360 DEGREES

Obama Agrees to Extend Bush Tax Cuts; Elizabeth Edwards Ends Cancer Treatment; Arizona Budget cuts Hit Transplant Patients; Teenage Hit Man Says, "I Slit Their Throats"

Aired December 6, 2010 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Thanks for watching everyone.

Tonight breaking news: President Obama laying out a deal with Republicans on taxes and jobless benefits and takes heat from fellow Democrats. Will they go along with him in the end and which will Americans care more about? That he gave up on a campaign pledge to roll back tax cuts for the rich? Or is he just trying to keep his other promise to reach across the aisle. We're "Keeping Them Honest."

Breaking news as well on Elizabeth Edwards: She's stopping her treatment for advanced breast cancer. Her shocking announcement tonight, the latest on that and how she's coping. Her estranged husband John Edwards now at her side. We'll talk to 360 MD Sanjay Gupta about the latest.

And later "Crime and Punishment," you'll meet a 14-year-old boy who says he's killed four people; a hit man he says for a Mexican drug cartel. We'll show you how he was recruited at age 12. How the cartel used drugs to turn boys into killers until the boys say the killing itself becomes a high.

We begin though with the breaking news on your taxes or if you've been laid off your jobless benefits. With the deal President Obama struck with Republicans on both and the backlash to it inside his party. Mr. Obama agreeing to extend the Bush era tax cuts for all Americans, even the wealthiest, which he vowed in the campaign not to. In return, getting a payroll tax cut and 13 more months of jobless benefits both helping the working and middle class.

The President tonight signaling he was reluctantly trading one pillar of his campaign, the one on taxes to preserve another, his pledge to get beyond partisan squabbling.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know there are some people in my own party and in the other party who would rather prolong this battle even if we can't reach a compromise. But I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession.

I'm not willing to see two million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home, or their car, or suffer some additional economic catastrophe.

So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do.

(END VIDEO CLIP)

COOPER: President Obama tonight clearly trying to put his move in best possible light. "Keeping Them Honest," though, this is a complete abandonment of his campaign promise on taxes. A promise he made over and over again. Watch.

(BEGIN VIDEO CLIP)

OBAMA: I end the Bush tax cuts for the wealthiest Americans.

And it means letting the Bush tax cuts for the wealthiest Americans expire.

And rolling back the Bush back cuts to the top one percent.

We have to roll back.

I'm want to roll back --

We're going to roll back.

I'm going to roll back the Bush tax cuts for the very wealthiest Americans.

For the wealthiest Americans.

For the wealthiest Americans.

For the wealthiest Americans.

It is true that I want to roll back the Bush tax cuts on the very wealthiest Americans and go back to the rate that they paid under Bill Clinton.

(END VIDEO CLIP)

COOPER: Well, that was then. These days though, the fact is, that President Obama simply does not have the support of conservative Senate Democrats for doing what he promised. And now in cutting a deal he's also alienating some liberal Democrats.

(BEGIN VIDEO CLIP)

SEN. SHERROD BROWN (D), OHIO: I'm very unhappy about it. You're right. In essence, it takes $700 billion -- borrows $700 billion from China, charges it and puts it on our children and grandchildren's credit cards and gives it to the wealthiest two percent of taxpayers. I mean I -- people say Washington doesn't listen enough. It's clear what the public was saying is -- give the tax -- keep the tax cuts going for the middle class. Extend, maintain unemployment benefits for those in my state, 85,000 Ohio families lost their unemployment benefits last week.

The Republicans continue to filibuster that. We should just keep going on that and worry and continue to fight for the middle-class tax break. I -- I'm not at all happy with this. I want to see all the details before I make any kind of commitment.

(END VIDEO CLIP)

COOPER: Ohio Senator Sherrod Brown tonight on "JOHN KING USA"; and New York Congressman Anthony Weiner tonight not any happier.

(BEGIN VIDEO CLIP)

REP. ANTHONY WEINER (D), NEW YORK: Compromise is an advice I mean, I have no problem -- I mean, we often have to do that that's why we -- we go to Washington and govern about it. But it seems almost as if I missed the part of the fight, like, where was the fight where he said what he believed in. I think that to some degree he underplays his hand. And as I -- as I said today it's almost as if he wants to punt sometime on third down.

(END VIDEO CLIP)

COOPER: Congressman Anthony Weiner, a Democrat on "PARKER/SPITZER".

The President meeting with Congressional Democrats earlier today behind closed doors urging them to support a deal underscoring the message on camera tonight.

(BEGIN VIDEO CLIP)

OBAMA: We cannot play politics at a time when the American people are looking for us to solve problems. And so I look forward to engaging the House and the Senate, members of both parties, as well as the media, in this debate but I'm confident that this needs to get done and I'm confident ultimately Congress is going to do the right thing.

(END VIDEO CLIP)

COOPER: Well, late reaction tonight from the Republican side, the spokesman for House Speaker-to-be John Boehner releasing the following the statement. Quote, "It is encouraging that the White House is now willing to stop all the job-killing tax hikes scheduled for January 1. We look forward to discussing this proposal with the House Republican members and the American people."

We discussed it tonight in all dimensions with former McCain and Palin senior campaign adviser, Nicolle Wallace; GOP strategist Ed Rollins; political analyst, Roland Martin; and CNN's Ed Henry.

Ed, key Democrats were summoned to the White House to be briefed on this deal. What do we know about what happened at the meeting and is it a sign the White House is worried about the anger -- the anger on base on the left?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They're very worried about it, Anderson. I talked to some senior Democrats tonight; they said it was a very tense meeting at the White House. You had some of the Democratic leaders telling the President in private they don't understand how he could give up such a bedrock principle dating back, as you catalogued there to the 2008 campaign. And they also don't -- don't understand as Sherrod Brown told John King, how when the public polls show that many Americans believe the rich should be paying more in taxes why the President with all his rhetorical gifts could not engage the public and make a convincing case here?

The flip side of course, though, when you talk to senior White House aides here tonight, they say look, the President was staring at the cold political reality, that he doesn't have the votes, particularly in the Senate to get what he wants done which is just passing the middle class tax cuts.

And number two, he's staring at 9.8 percent unemployment an unprecedented strength of -- of unemployment in terms of consecutive months, over nine percent. We're close to double digits now and if he -- the only other viable option here was to do nothing. Let Congress go home. Let the Bush tax rates expire and then come January 1st, basically, every American would get a tax increase. That was the only other viable option he had.

They had all these other symbolic votes on Capitol Hill last week and it went nowhere --

COOPER: Right.

HENRY: -- it was time to move forward in this debate and that's their bottom line.

COOPER: Roland, in your blog today, you wrote and I quote, "Frankly, the Republicans are going to play chicken with the Democrats and force them to blink because they know Dems and President Obama don't have the stomach to fight. Is that really fair to say he doesn't have the stomach to fight? Isn't he the guy who got elected saying he wanted to bring all sides together and get people in the room and come up with compromises?

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Ok, every president says that. I remember my fellow Texan George W. Bush said the exact same thing, when he ran for president. And I was sitting here reading a tweet from a journalist, friend of mine David D.; he said the New England Patriots are whipping up on the New York Jets like the GOP whipped up on the Democrats today when it came to tax cuts.

And -- and when -- when Ed just laid out what -- what they felt they didn't have much room, that's because the GOP as I wrote, like I say, look, you're going to blink.

What they didn't do is tell the GOP, wait a minute are you going to allow 95 percent of Americans not to get tax relief? Are you willing to sacrifice the middle class to get tax cuts in order for you to extend it for the top two percent of the wage earners? That was never on the table.

Not only that, Anderson. Look what happened, you extended the Bush tax cuts for the top tier for the next two years but you only extended unemployment benefits for 13 months? Why did the White House even say, fine, two years for them? Two years for the unemployed.

COOPER: Right. Nicolle did -- did the President blink?

NICOLLE WALLACE, FORMER MCCAIN CAMPAIGN SENIOR ADVISER: I actually don't think the politics on this are that bad for Barack Obama. With the voters that -- that made the deciding set -- over the deciding factor in his election. I think independents will be heartened to see him keep one of his other campaign pledge which was what you alluded to getting everyone in a room and working on a compromise.

I think that the disillusionment with Barack Obama, the reason these numbers have plunged from 80 percent the week he was inaugurated to, I think they hover somewhere below George W. Bush's these days is because what people thought they were getting was a guy who could work with the other side and -- and -- you know pass reasonable, sometimes moderate, compromises.

COOPER: Do you think, though, Ed, that Republicans see this as a sign of weakness? That basically this is a victory for them?

ED ROLLINS, REPUBLICAN STRATEGIST: No, I think what they see it as is getting this economy moving again. And I think they basically now see a president, unlike Speaker Pelosi earlier this week, who's willing to work. Has read the tea leaves from the election where they lost 63 House seats and six U.S. Senate races. And basically, he has to deal now not with the weak and the lame, he has to deal with the leadership of the Republican Party and if -- if he wants to have any government cutting taxes or doing whatever in the future -- cutting spending they basically have to work together.

MARTIN: And Anderson, one second. First of all, we keep talking about the election that took place on November 2nd. Haven't we heard for the past month from Republicans as well as Democrats, deficit, deficit, deficit. So what happened to the deficit conversation as it relates to this -- this particular tax break?

The deficit will increase not only for unemployment benefits but also for extending the tax cuts. So it seems that easily the deficit argument sort of moves sort of like the wind blowing.

COOPER: Roland I understand.

ROLLINS: Just one quick point. Why, if rich people keep their money and spend it in the economy, it's a bad thing? And if the government takes it away from -- and spends it on run-away spending programs it's a good thing?

MARTIN: Actually you never answered my question.

ROLLINS: You've never been able to make that argument to me.

MARTIN: No, no, no. No. Answer my question.

ROLLINS: And at the end -- at the end of the day getting this economy moving and the chairman last night, the Federal Reserve on "60 Minutes" said now is not the time to do deficit spending. It's a long term thing. Now is the time to basically get this economy moving that'll benefit the President and benefit them all?

MARTIN: Well, I'm just exposing the fact that this whole deficit discussion has been a fraudulent conversation. It's always a deficit conversation as it relates to the people who are most in need but again, when you talk about the deficit when it comes to those who are making more than $250,000, likely every single person on this panel --

COOPER: Nicolle what --

MARTIN: -- the deficit conversation goes out the window.

COOPER: What about to his point, though --

WALLACE: What?

COOPER: -- obviously, look this will add $700 billion to the deficit by -- by not -- by having tax cuts?

(CROSSTALK)

WALLACE: Right, but I -- I think the political reality, at least for Republican voters is that all deficit spending is not equal. I think Republicans have been engaged in a philosophical debate for the last two years.

We were talking about how Barack Obama has done a great job at expanding the tent on the Republican side and the tax cut discussion, I think for many liberals is about the rates at which you tax people.

(CROSSTALK)

COOPER: Do you argue that this --

(CROSSTALK)

WALLACE: -- to conservatives -- but it's part of the philosophical debate about the role of federal government in American life. So giving back people's money, no matter how much they make, is always a good thing.

COOPER: Roland -- Roland you could also argue that this is the only form or the only new form of -- of -- of stimulus spending that anybody in Washington is going to get this year. I mean, that -- that any kind of big government stimulus thing is not going to be very popular particularly with Republicans coming in and at least with this, as Ed pointed out, maybe you have wealthy people saving some money and also spending some of this money?

MARTIN: And how did that go for the eight years of the Bush tax cut? We keep talking about how we got ourselves into this economy. I'm simply making the argument how has that worked thus far?

When you talk about losing 500,000 jobs a month and all of a sudden now we're scraping by with 30,000 or 40,000? What did it actually get us? It got us higher deficits.

I'm just saying, I think I just it's amazing how the deficit conversation has just magically disappeared a couple weeks after the election.

ROLLINS: Spending, spending got us higher deficits, not higher taxes.

MARTIN: Ok, ok.

ROLLINS: Spending got us higher deficits and we continue to do that.

MARTIN: But even -- even the economists will say, that those same Bush tax cuts contributed to the federal deficit.

ROLLINS: The chairman of the Federal Reserve who really has something to do, not a president, not a Congress, but really the chairman, he basically said last night, if we had not put $3.3 trillion of Federal Reserve money into this economy, it would have been ten times worse. So at the end of the day, there has been spending. There's been plenty of spending.

The whole system is not about the tax cuts. It's about the banking system. It's about bad loans that were made and what we got to do is get the confidence back in the business community where they start hiring people again and putting their money back in.

(CROSSTALK)

COOPER: And -- and --

MARTIN: So you're saying the move by the Obama administration was a good move?

COOPER: Ed Henry, does this allow the White House to try to get some stuff done in this -- in this lame-duck session now with Congress?

HENRY: You're absolutely right. That's a big part of this. It's to not let this drag on for another week, ten days. Try to get the new START Treaty, the arms reduction treaty with Russia through, also try to deal with -- with repealing "don't ask don't tell." Those are big, big things this president wants to get done.

They're going to be hard enough on their own. If the tax fight has been log jamming everything he never would have gotten any of those other things done.

The other point is, long term he has a problem with the fiscal mess in terms of dealing with the debt as Roland is saying.

But short term, as Ed Rollins is just saying you have the Federal Reserve chairman saying, look, five or six years, maybe more of this unemployment. So short term, this president has to do something about jobs. It was a difficult choice but he made it.

COOPER: Ed Rollins, Ed Henry, Nicolle Wallace and Roland Martin, guys thank you very much. It's a good discussion.

MARTIN: Thanks very much.

COOPER: Let us know what you think. The live chat right now at AC360.com, it's up and running. Let us know what you think.

Up next, the very latest on Elizabeth Edwards, maybe not a surprise announcement today but shocking, nonetheless. The country has been following her fight against cancer and now comes word she's discontinuing treatment. We'll tell you what her doctors told her and what family sources are telling us. And we'll talk to 360 MD Sanjay Gupta.

And later "Keeping Them Honest": Arizona cutting state money for life saving organ and bone marrow transplants. Arizona's Governor Jan Brewer blaming President Obama's health care reform; the vote to cut the funding came before the health care reform even became law. Find out what happened when we asked her to come on the program and defend her position tonight.

(COMMERCIAL BREAK)

COOPER: Not surprising but shocking all the same. Word today that Elizabeth Edwards, wife of former presidential candidate John Edwards may be in the final stages of her fight against breast cancer. She and John Edwards are separated, though still married. Her family is saying her doctors have advised her that further treatment would be, in their words, unproductive.

She's been dealing of course with the disease since 2004. Three years later she and her husband revealed the cancer had spread.

In July of this year Elizabeth Edwards sat down with Larry King. He asked her what would happen if she didn't get to finish raising her kids.

(BEGIN VIDEO CLIP)

ELIZABETH EDWARDS, JOHN EDWARDS WIFE: I would be sad for me and sad for them. I'd like to -- I'd like to be -- I'd like for them to -- to see me -- seeing them off into their new life.

(END VIDEO CLIP)

COOPER: It's such a sad prospect. Tonight a source close to the family says her prognosis was described in terms of weeks, that same source telling us she's not in pain and quote, "has prepared for this". Her family is with her including as we said, her estranged husband, John.

With us now: 360 MD Sanjay Gupta and also Jessica Yellin who has been covering this story extensively over the years. Sanjay, what happens at this stage of the disease? I mean, when the doctors say it's -- it's no longer productive? What does that mean?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, when they say that -- the treatment is no longer productive I mean, it's a risk- benefit analysis. Like most things in medicine, they're trying to figure out is there some benefit to still giving the medicine to try and treat this cancer. And -- there's no absolute right answer to this. Every breast cancer, the way that the breast cancer as a disease behaves is going to be individualized from patient to patient.

But at some point, as you know Anderson back in 2004 the original diagnosis, she was very open about talking about that. In 2007, three years later she had spread of this breast cancer to her bones and now most recently to her liver.

At some point they say look, the medicines, we've gone from the civility to try and thinking about curing someone of the breast cancer to simply trying to treat it. And at this point the treatments even we think could do more harm than good.

So that's what they are really basically saying by -- by unproductive. Best to focus on just keeping her comfortable and free of symptoms at this time.

COOPER: And Jessica, I should know the answer to this and I apologize to our viewers for not. I know they have a daughter who is in her 20s. They've sons. How -- do we -- how old are the kids?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: They have two younger children. I actually can't remember their ages right now but I think they're their early teenage years and, perhaps, very -- with many more years at home to go before they go to college. And of course, Anderson she lost a teenage son, Wade, many years ago.

COOPER: Right.

And -- she obviously played a very strong role in the Edwards' campaign. I mean, some often said she was a driving force behind him and maybe wanted it more than he did in some points. And there was that moment now famous when they say her during the campaign that -- that she announced that the illness had returned.

I just want to play that for our viewers.

YELLIN: Yes.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: The net result of all the tests is that she has -- her cancer is back. It's largely confined in bone.

(END VIDEO CLIP)

COOPER: What -- what sort of an impact has she had on her husband's career?

YELLIN: Well, you know, he was the candidate but often times it seemed that she was the star. I covered them through so many events and she was always the sort of the popular public figure. And her struggle with cancer was the central part of -- in a way both of their appeal. Remember, she was admired for her strength after losing her son, Wade.

Then when she got the cancer, she first noticed a lump towards the end of the 2004 campaign as her husband was still running for vice president. And because she didn't want to upset anyone she kept it quiet until the campaign ended.

That won her a lot of affection. And -- and so did her grace in fighting it. She first seemed to beat the cancer but as you'll recall she -- when it recurred in 2007, right as her husband was launching his presidential campaign, she was the one who insisted he stay in the race and her struggle with the disease and their bond together became a central part of his 2008 campaign.

I attended more Edwards' campaign events than I can remember and every single time he talked about her and her fight with this disease -- Anderson.

COOPER: Yes, I should point out, four children. As you said, Wade who passed away, Catherine and Emma Claire and Jack are 10 and 12 I'm told.

When -- Sanjay, at this point, I mean, what -- what sort of -- what does a patient do?

GUPTA: Well, you know, there's been a lot of studies on this exact question, Anderson. And you have varying schools of thoughts. But one thing that she has talked about is she's going to be at home -- she'll be at home with her family as opposed to being in a hospital for example. And studies have shown that -- in terms of the overall anxiety levels for the patient and the family, and the even quality of care, can all be better, in fact, at home as opposed to in a hospital as long as the care is available at home.

So she says she's going to be at home. I mean, a lot of it is going to be focused on what is known as palliative care and not to sound too clinical but basically, the concerns about pain, the concerns about nausea or vomiting. The concerns about what will happen to her heart and lungs, all of that can be addressed so that she can be comfortable and be able to be interactive with her family but that's really got to be the focus from what I heard from her statement and also, looking at studies of patients in this condition. It's -- it's focused on treating these -- these types of symptoms.

COOPER: Yes, I mean, to think about her kids, 10 and 12 -- I lost my dad at age 10 -- I mean it's a devastating impact on a child particularly at that age. Jessica, the relation -- I mean, I think some people would be surprised to hear that -- that John Edwards is by her side.

YELLIN: Yes.

COOPER: They are obviously estranged. Do we know much about their relationship today?

YELLIN: Well, look, they're separated and not divorced and that is meaningful. Anderson, the facts still are pretty painful. The last three years, she learned that she had a terminal illness. That her husband had a relationship with another woman that he'd lied to her about it. And that he was the father of this other woman's child.

And remember, much of that soap opera was unfolding during the campaign while she was keeping up this brave public face. So plenty has been written and said about the private tension behind the scenes. Truthfully, as devastating as all of that must be, it's -- we should remember they still live in the same area.

And part of the reason that he's been by her side as things took a turn for the worse is -- we're told she generally thinks it's important that he has a strong relationship with his children. She knows she's not going to be around for long and she does not want to come between her children and their father.

COOPER: It's just so sad. Jessica, I appreciate you being on. Sanjay as well, thanks.

Just ahead, some people waiting for life-saving transplants in Arizona are actually being turned down. Not for lack of donors but because of a lack of money. We're "Keeping Them Honest".

And next the confession of a murder that rocked a picture-postcard town of Celebration, Florida; white picket fences and for the first time, yellow crime scene tape.

(COMMERCIAL BREAK)

COOPER: Tonight we're hearing from an accused Mexican drug cartel hit man who isn't a man at all. He's a 14-year-old boy. We're going to have that story coming up.

But first, Joe Johns has a "360 Bulletin" -- Joe.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Anderson, the attorney for WikiLeaks founder, Julian Assange, says his client is planning to meet with police in Britain, not because of his online posting of classified U.S. papers but an unrelated warrant involving a rape case in Sweden which Assange calls "a smear campaign". Meanwhile, Attorney General Eric Holder says he's authorizing significant actions to investigate the document dump.

Police say a homeless man has admitted carrying out the first-ever homicide in Celebration, Florida, the town created by the Disney company not far from Disney World. The transient was receiving counseling from the victim. Investigators believe the suspect bludgeoned the man to death with an axe.

The hunt is on for a shark that killed a 70-year-old woman off the southern coast of Egypt on Sunday. Two other sharks have been captured and killed but tourists are being ordered to stay out of the water until the shark believed responsible for this latest attack is found.

Defense Secretary Robert Gates says he is not optimistic that the ban on openly gay and lesbian troops in the military will be repealed by Congress any time soon. Democrats are hoping to end the "don't ask, don't tell" policy before the lame-duck session wraps up.

And Alicia Keys is back from the dead, digitally speaking. Keys led a celebrity campaign to stage a digital death by staying off Twitter, Facebook and other social media until they could raise $1 million to fight AIDS in Africa and India. E Online is reporting they met their goal after raising half a million from their fans and other stars. The rest came from a billionaire from the pharmaceutical industry which is one way to get people thinking the drug companies are good.

COOPER: Joe thanks you very much.

Time for tonight's "Shot". All right. It's hard to think of anything funny about WikiLeaks until the cast of "Saturday Night Live" got on the case. Imagine what it would be like if Julian Assange and his team were like Harvey Levin and the squad over at TMZ. Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, our guys caught up with President Hamid Karzai leaving Ton last night.

UNIDENTIFIED MALE: So your boy Obama was in Afghanistan. Did you get to see him?

UNIDENTIFIED MALE: I did.

UNIDENTIFIED MALE: Did he ask you about all the bribery in your administration?

UNIDENTIFIED MALE: Sir, you forgot your briefcase.

UNIDENTIFIED MALE: I do not take bribes --

(END VIDEO CLIP)

COOPER: I wish we saw the guy who was Harvey Levin. It's very funny.

All right. The governor of Arizona tonight cut costs by cutting people from the chance of getting life-saving transplants. Is the data she used to make the decision faulty? We're "Keeping Them Honest".

And later, actor Josh Duhamel speaking out about getting escorted off a plane for breaking a rule everybody has to follow; you'll hear why he's cleared for landing tonight on our "RidicuList".

(COMMERCIAL BREAK) COOPER: Tonight, cutting budgets and blaming Obama care with the lives of low-income transplant patients hanging in the balance. As of October 1st, Arizona stopped financing certain transplant operations under the state's version of Medicaid.

Arizona governor, Jan Brewer, who's a Republican, has reportedly blamed President Obama's health care overhaul. But there's one problem. The vote on cutting transplant funding came before the President signed that bill into law.

Now, for people waiting for transplants, this is a life or death matter. This man, for instance, Francisco Felix, a 32-year-old father of four; his wife told us he needs a liver transplant. A friend whose wife had died recently called and said he wanted to give him her live liver. It ended up being a match.

But when Felix checked into the hospital, according to his wife, he was told the transplant would no longer be covered and he needed to come up with $200,000 within two hours as a down payment on the $500,000 surgery. He couldn't come up with the money. The liver went to somebody else. And Felix is now at home. Doctors say without the transplant he has about two years to live.

Then there's Mark Price, the 34-year-old father of six. He needed a bone marrow transplant. Doctors found a match but it happened to be on the same day that Arizona's Medicaid program stopped covering them. An anonymous donor stepped in offering to cover the cost of the transplant of hundreds of thousands of dollars, but price died on November 28th before that operation could be done.

Now, Governor Brewer has said her heart went out to the Price family but that the cuts were necessary.

(BEGIN VIDEO CLIP)

GOV. JAN BREWER (R), ARIZONA: The state only has so much money and we could only provide so many optional kinds of care. And those were one of the options that we had taken liberty to discard, to dismiss.

(END VIDEO CLIP)

COOPER: She said "optional kinds of care". The question is, are transplant operations optional? Three national transplant organizations have sent Governor Brewer a letter saying what she's done is a death sentence. Quote, "This baseless exclusion of coverage to Arizona citizens for services that represent the best treatment option for patients with end-stage organ failure, to both improve survival and quality of life respect, represents an actual death sentence for many of these citizens of Arizona."

So, the question is how did Governor Brewer and the Arizona state legislature arrive at the decision? It was after state officials looked at success rates and survival rates for transplant procedures but transplant groups say the data that they looked at was faulty and outdated. The transplant group sent Governor Brewer a letter back in June saying that the proposed changes to one type of heart transplant, for example, were based on inadequate and discriminatory data.

For instance, lung transplants were cut out entirely because Arizona's version of Medicaid said data showed the surgery did not extend life expectancy. According to USTransplants.org, which is the report card for all major organ transplants, 66 percent of patients survive at least three years after having a lung transplant.

Brewer said she would consider restoring the transplant funding if she were provided ideas on where to get the money. Turns out she did get some ideas back in September. Representatives from transplant programs at four Arizona hospitals sent her a letter recommending other cost-cutting measures that they say could have saved at least the same amount if not more than what they save by cutting the transplants. They say they never heard back from her office.

As the local transplant experts, this group of doctors say they're surprised that they were not consulted even in the first place and then no one listened to them.

And what about federal stimulus money, could that be used to cover the transplants? The public information officer for Arizona's House Democratic Caucus told us that there are $30 million in federal stimulus dollars that are unaccounted for of the money that's been spent. $2 million went to fixing the roof at the Coliseum which is apparently a rarely-used venue and $2.4 million went to algae research.

What are the transplant cuts saving the state? Well, if you think it's tens of millions of dollars, it's not. It's $1.4 million a year.

We asked Governor Brewer to come on the program tonight. She said she wasn't available tonight or for the entire rest of the month or through the first half of January. The invitation stands.

Arizona state representative Anna Tovar was available. She feels strongly about this not only politically but personally as a transplant survivor. I talked to her earlier tonight.

(BEGIN VIDEO CLIP)

COOPER: Representative Tovar, you had a bone marrow transplant ten years ago and you say it saved your life. For you, was this what Governor Brewer calls optional type of care?

REP. ANNA TOVAR (D), ARIZONA: Well, definitely this transplant saved my life. I've had two transplants. I had a bone marrow transplant and a stem cell transplant.

And I know for a fact that without the transplants I wouldn't be here today. The transplants saved my life.

The transplants that people here in Arizona need are not optional. These are actually life-threatening diseases that they have and they definitely need a transplant in order to survive so in my eyes transplants are not optional. This is something that they need in order to have a second chance at life. COOPER: You know, to be fair to the governor, no one is happy about these cuts. The argument is that the state's in bad financial shape and difficult cuts have to be made somewhere. Do you buy that?

TOVAR: Well, I mean Arizona is no different than any other state in the nation. We face our deficit cuts. But the fact of the matter is that Governor Brewer and the Republicans have chosen to cut over 400,000 people off health care and one of those, you know, being transplants.

And at that time I mean, we had a choice to make and priorities and we could have chosen to cut tax loopholes for big businesses and for the rich. But, I mean their priority was cutting people's -- what they considered optional care which is not optional care for transplants. So, that I just find totally outrageous.

COOPER: It does seem that the data that was used by the governor and the legislature to make a decision on the cuts, it's been widely criticized by a lot of medical professionals, nationally and even some state Republicans are saying the data is potentially outdated and flawed. How did that happen?

TOVAR: Actually my bone marrow doctor has come forward along with many other physicians across the nation now, and have stated to her and to other Democrats and to Republicans, that the information was flawed. Yes, the information that we received.

But to now, there's been nothing done as far as, you know, Governor Brewer or the Republicans, to push forward in solving the solution. I mean they made the mistake. They admitted to the mistake. But as of yet, no solution has been brought forward, no action.

(CROSSTALK)

COOPER: You're calling for a special session from Governor Brewer to address these budget cuts. Have you heard any -- gotten any response from her?

TOVAR: There's been no response from her regarding the special session. But actually, the easiest solution for her to take is to use some of her discretionary monies. $1.4 million, to be exact, out of her $178 million that she was awarded by the federal government to use wisely, I mean. And that's going to be --

COOPER: You're talking about stimulus funds?

TOVAR: Yes. The stimulus funds, those can be used, you know, for those transplants to save almost a hundred people's lives in Arizona.

(CROSSTALK)

COOPER: She said though that she's used up her stimulus funds.

TOVAR: Well, as to date she's yet to account for the $30 million that she said she spent. So we've requested records. And she's yet to come forward with what she spent this money on. COOPER: Do you think there's hope for those people who are waiting and those people who are on a list and not going to be able to pay for it?

TOVAR: Really, no. I mean if they're unable to raise the funds, they're not going to be able to get the transplant.

But there are solutions. The governor could use her discretionary federal money. We can go into a special session and designate money to go back into these transplants and for people to have a second chance at life. This is a mandatory operation that they must have in order to live.

COOPER: And in terms of how much money we're talking about, what kind of sums are we talking about?

TOVAR: We're talking about $1.4 million out of our state budget which is about approximately $9 billion. So when you look at the scheme of things, $1.4 million to save over 100 people's lives in Arizona, to me that's definitely money well worth it and well spent.

COOPER: Representative Tovar, appreciate you coming on. Thank you.

TOVAR: Thank you.

COOPER: Well, we'll continue to follow that.

Coming up, "Crime and Punishment", a 14-year-old kid, an alleged drug cartel hit man; he says he's executed four people, slitting the throats of his victims. You'll hear from him and also give you an extraordinary look at how Mexico's drug cartels seem to be luring young kids to try to do their dirty work.

And actor Josh Duhamel flies no class and gets himself escorted off a flight. We'll tell you how he earned himself a spot on tonight's "RidicuList".

(COMMERCIAL BREAK)

COOPER: Tonight, frightening new evidence of the war next door. Mexico's exploding drug violence has claimed more than 28,000 lives in just four years. Imagine that. We're now hearing from an alleged assassin who's just been captured. He's not even old enough to drive a car and he claims to have been killing for several years now.

Ed Lavandera tonight shows us why he may not be alone in tonight's "Crime and Punishment" report.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): A teenage boy caught in the middle of a violent man's game. On the street, he's known as "El Ponchis". Mexican authorities say this kid worked as a drug cartel hit man, slitting the throats of his victims.

UNIDENTIFIED MALE: How many people have you executed, friend? EL PONCHIS, 14-YEAR-OLD HIT MAN FOR DRUG CARTEL: Four.

UNIDENTIFIED MALE: How old are you?

EL PONCHIS: Fourteen.

LAVANDERA: In Mexico, criminal suspects are routinely paraded before the news cameras and it was no different for this young boy, captured near Mexico City at the airport with his sister. The teenager told reporters that he was trying to get to San Diego, where he was born. He says a man called "El Negro" forced him into the deadly drug cartel world.

UNIDENTIFIED MALE: Who picked you up?

EL PONCHIS: "El Negro".

UNIDENTIFIED MALE: And he convinced you or he made you join this?

EL PONCHIS: He made me.

UNIDENTIFIED MALE: What did he tell you?

EL PONCHIS: That either work or he'll kill me.

LAVANDERA: The boy said he dropped out of school after the third grade. He says he started killing with the help of drugs.

UNIDENTIFIED MALE: Who gave you the orders to hit them, to execute them?

EL PONCHIS: "El Negro".

UNIDENTIFIED MALE: Where did you learn to execute? To beat?

EL PONCHIS: I got high.

UNIDENTIFIED MALE: Did you get drugged?

EL PONCHIS: "El Negro" drugged me.

UNIDENTIFIED MALE: Since when did "El Negro" drug you?

EL PONCHIS: Since I was 12.

UNIDENTIFIED MALE: You belonged to the gang since you were 12?

EL PONCHIS: Yes.

LAVANDERA: The young boy says he was on the cartel's payroll making $500 a week.

CHARLES BOWDEN, AUTHOR, "MURDER CITY": They use them like Kleenex as they say in the business. You can just throw them away.

LAVANDERA: Charles Bowden has documented the cartel's stranglehold on thousands of young kids. He recently wrote a book called "Murder City" about the violence in Juarez, Mexico.

BOWDEN: You got to imagine getting to 11 or 12 and knowing you have no future. Knowing your life is going to be ruined. Nothing will get better and here's your shot. Go out and kill somebody and make some bucks. Be a big guy for a while, all the while knowing you'll die.

LAVANDERA: Cartels have preyed on teenagers for years. Bowden says they're recruited because they're not punished as severely if arrested and don't know enough to testify against cartel leaders. Authorities say it's not rare for teenagers to reach the level of assassin.

Two American teenagers in Laredo, Texas were convicted of murder a few years ago. Rosalio Reta and Gabriel Cardona were teenagers when they joined the Zetas drug cartel, their faces and bodies marked with sinister-looking tattoos.

Cardona even had eyeballs tattooed on his eyelids. Reta claimed in this videotaped police interrogation that he started killing at age 13.

"I loved doing it. Killing that first person, I loved it. I thought I was superman," said Reta.

And that is the lure, the hope of becoming bigger than life and escaping the squalor around them.

(END VIDEOTAPE)

COOPER: Was this kid's route into the drug cartel or what we know about it, was it different than others who ended up there?

LAVANDERA: Well, what was interesting about what he said and basically what we have to go on is that those statements that he had made to reporters after being arrested is that we know a lot of young kids are brought in to the drug cartel world and they start off as lookouts on street corners. They run small amounts of drugs across the border or sell drugs on a street corner.

This kid said he was forced into it and essentially told that if he didn't do it he would be killed. So that sounds at least from what we know right now to be slightly different from other routes and other ways that other young kids have gotten into it, Anderson.

COOPER: Obviously in the United States you wouldn't parade a 14-year- old suspect in front of the media which is why we're covering the kid's face.

LAVANDERA: Right.

COOPER: Do we know what happens to him now?

LAVANDERA: Well, he's going through the Mexican legal process right now and there's a hearing today in Mexico as to exactly how he'll be tried. He will not face the kind of consequences that we alluded to there in the piece that other adults would have faced for similar crimes. So, from that standpoint it's very possible that he could end up back out on the streets again.

But what is fascinating about this world, Anderson, I've had -- you know, many people tell me about people in the DEA and other federal law enforcement officials here in the U.S. is that they wonder why these kids get into this.

You want to say, do they ever stop and realize that you never meet any old, retired drug cartel members?

COOPER: Yes.

LAVANDERA: This isn't the kind of lifestyle you kickback and retire from one day.

(CROSSTALK)

COOPER: Yes. Well, I mean a 12-year-old or 14-year-old from, you know, a poor background in Mexico is probably not thinking too far about, you know, what happens at age 40.

Ed, appreciate it, fascinating report. Ed Lavandera, thanks so much.

Up next, what's being called the Fed's $110-billion headache; what caused a huge batch of brand new $100 bills to be quarantined? Details on that.

And what did Josh Duhamel do on a plane that landed him on our "RidicuList" tonight?

(COMMERCIAL BREAK)

COOPER: All right. Joe Johns joins us again with a "360 Bulletin" -- Joe.

JOHNS: Anderson, Secretary of State Hillary Clinton met today in Washington with South Korean and Japanese diplomats for talks on how to respond to North Korea's recent attacks in nuclear arms proliferation. The three nations jointly condemned North Korea and rejected the call by China to return to six-party talks to resolve the long-running conflict.

California's long-running battle over same-sex marriage is back in the courtroom. A federal appeals court heard arguments on Proposition 8 which bans such unions. A lower court ruled Prop 8 to be unconstitutional. The case is likely to reach the Supreme Court.

Stocks fell, the Dow losing 26 points after Fed chairman Benjamin Bernanke gave a pessimistic outlook about the nation's economy. Here's what he said in an interview with "60 Minutes".

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: The peak and the end of last year we lost 8.5 million jobs, we've gotten about a million back so far. And that doesn't even account for the new people coming into the labor force. At the rate we're going it could be four or five years before we are back to a more normal unemployment rate somewhere in the vicinity of say, 5 or 6 percent.

(END VIDEO CLIP)

JOHNS: It's being called the Fed's $110 billion headache. More than a billion new $100 bills slated to be released next year have been kept back because of a printing problem that renders some of them useless. The new design was supposed to make them more resistant to counterfeiting.

The ink on Kelsey Grammer's divorce papers isn't dry yet and now the former star of "Frazier" and "Cheers" is engaged yet again, this time to a 29-year-old British woman. Grammer's break up with Camille, who stars on "The Real Housewives of Beverly Hills" has yet to be finalized. I guess that's Hollywood -- Anderson.

COOPER: Well, we certainly wish him the best.

All right. Time now for the "RidicuList" -- our nightly journey through the valley of silly stuff. Tonight, actor Josh Duhamel winds up on the "RidicuList". He got removed from a flight in New York City last week for refusing to return his ego to its upright and locked position and get off his phone.

That's right. Josh was that guy, the one who won't turn off his Blackberry before take-off. He apparently just kept texting away sitting there on the tarmac even after a flight attendant repeatedly asked him to shut it down. So the plane turned back to the gate at LaGuardia and he was escorted off.

Now, Josh told "Access Hollywood" that the experience was quote, "not my favorite moment." I'm sure it wasn't but I'm sure the dozen or so -- the dozens of other passengers also really enjoyed returning to the gate and having their flight delayed because he was texting his agent or his manager or chef or whatever.

Maybe it's just because I fly often but I hate it when people are rude to flight attendants. They work hard and they have to deal with grumpy, surly, smelly passengers, not to mention egotistical actors and anchors all the time. Why make their lives harder.

It's like people who argue with airline personnel at the check-in counter or people who argue with TSA screeners or rental car agents or traffic cops. These folks aren't making the rules. They are just doing their jobs and you know what? These are people that get yelled at all day long.

And if you think you yelling at them is going to make them work harder for you, you're wrong. You know what helps: a smile, being polite, turning offer your stupid Blackberry when you're supposed to.

Josh Duhamel says he learned his lesson and we're certainly glad to hear that. But for a clueless use of a wireless device he's texted himself onto tonight's "RidicuList".

Hey, that's it for 360. Thanks for watching.

"LARRY KING" starts now.

I'll see you tomorrow night.