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John McCain Interview; President Obama Pushes for Tax Deal; President Obama's Reelection Chances?; Allegations Against Iraqi VP; Fear of Civil War in Iraq; GOP Candidates Trail Obama

Aired December 20, 2011 - 16:00   ET

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


WOLF BLITZER, CNN HOST: Happening now: the race for the White House in the big picture. How does President Obama fare against each of the Republican hopefuls? We have some surprising new poll numbers just coming in. We're releasing them.

Also, shocking charges against Iraq's vice president sparking fears of a civil war in Iraq. We're going to talk about that and a whole lot more with Senator John McCain. He's blaming President Obama.

Plus, the impasse over extending the payroll tax cut becomes a full-fledged congressional showdown with a tax hike for millions of Americans hanging in the balance.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

But this just coming into THE SITUATION ROOM, our brand-new poll numbers pitting President Obama against the Republican presidential candidates. The CNN/ORC survey puts each of them toe to toe with the president and even though the election is still almost 11 months away, the results potentially troubling for the GOP.

Let's go inside the numbers with our CNN politically analyst Ron Brownstein of "The National Journal." He's a columnist there.

Ron, thanks very much for coming in.

And these numbers, hot, they're fresh right now. Hypothetical matchups between the president and the Republican challengers out there. Look at this. In a hypothetical matchup between President Obama and Mitt Romney, right now, President Obama would win 52 to 45 percent, margin of error, 3 percent, but he would still win nationally.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Yes. Those are some of the best numbers we have seen for President Obama in any of the head- to-heads recently. To be seven points ahead of Mitt Romney is wider than it's been in most recent polling.

A couple significant things here, first that President Obama is over 50 percent. Always look for that in an incumbent. It probably reflects two things, the fact that he seems to be winning this argument with Republicans and shaping the debate over extending the payroll tax, also some growing, a little bit of an upswing in optimism about the economy over the next year, more people beginning to think that it might improve.

But the big caveat here, Wolf, is that when you have a reelection race involving an incumbent president, the fundamentals, his approval rating, the sense of right track/wrong track are probably more revealing this far out than head-to-heads. And those are more equivocal for the president.

BLITZER: So, he beats Romney relatively narrowly, but he would still win hypothetically. President Obama vs. Newt Gingrich. Look at this, President Obama 56 percent, Newt Gingrich 40 percent. That's a 16-point split.

BROWNSTEIN: Right. Unlikely when we get to 2012, actually if the race is structured between Gingrich and Obama, that he would truly win by that much. But it is kind of a signal to Republicans that while Gingrich does have a strong following within the Republican Party, he could face more challenges than Romney at reaching out beyond the core Republican base.

BLITZER: Well, 56 to 40 percent.

BROWNSTEIN: Yes.

BLITZER: Ron Paul by the way does a lot better than Newt Gingrich hypothetically. He's like Mitt Romney, 52-45.

BROWNSTEIN: Right. You feel like that's almost the generic right now in the ballot, but again I think you have to look at some other numbers that you guys have put out in the last day or so.

If you look at Obama's approval rating, I think that is probably the single best indicator of where he actually stands this far out from the vote and you have had an upswing there, too, which is reflected in these numbers to him at around 49 percent. But that points toward a much closer race for the president.

If you throw in the sense of wrong track, probably about two- thirds or more of the country saying we're on the wrong track, historically, that's been a big headwind for an incumbent president. So while these head-to-heads are encouraging for the president, the fundamentals are probably more revealing. And they point toward a much more competitive race.

BLITZER: And two more numbers, I will just put them up quickly. President Obama would crush Michele Bachmann 57 to 38 percent, similarly with Rick Perry, 57-39 percent.

We're only two weeks away today from the Iowa caucuses, three weeks from New Hampshire. Electability for Republican voters out there, they see these numbers. They want to beat the president. They want him to be a one-term president. How important are these numbers in terms of electability going into a caucus or a primary?

BROWNSTEIN: I think they do matter.

James Carville famous said many years ago that voters are not but political consultants, but, increasingly, they are. Electability does matter to voters in both parties. Certainly the Republican base is enormously hopeful of beating President Obama. And there's enormous passion towards doing that.

I think a candidate who can argue they have a better shot at winning certainly gets an advantage in the primary. For people like Bachmann and Perry and Gingrich, the challenge is that while they motivate the Republican base, their persona and their agenda so far is putting off independents, more moderate, less ideological voters more than Mitt Romney, who looks better right now among the suburban upper- middle-class swing voters who might decide this thing.

(CROSSTALK)

BLITZER: Even though Romney would still lose to the president, he would use these numbers to show he's more electable as the Republican nominee than Newt Gingrich.

BROWNSTEIN: Generally in polling, that has been the case. There have been some where Gingrich has been as strong as Romney.

But Romney I think because of his economic background -- again Democrats would forcefully challenge this in a general election. One thing we should say all of this is before any of the choice has really been framed in the general election, but Romney I think does start off with a better assumption among less ideological voters that he has credibility on the economy because of his background than say someone like Gingrich who comes out of a Washington culture that many Americans are really down on.

BLITZER: All right, Ron, thanks very much, Ron Brownstein joining us.

BROWNSTEIN: Thanks, Wolf.

BLITZER: Newt Gingrich's campaign is taking a series of blows as you probably know by now. He's still in front of the Republican race, but staying there appears to be getting harder and harder for him, especially in Iowa.

CNN's Jim Acosta is following Newt Gingrich's campaign out there.

What's the latest? What is going on, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, perhaps more than any other candidate, Newt Gingrich is playing defense. That is never a good sign this close to an election. Consider what happened to the former speaker at an Iowa grocery store earlier today.

Politically speaking, it was a it was a cleanup on aisle four.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): It's been that kind of week for Newt Gingrich, dressed down by a voter at this Iowa grocery store.

UNIDENTIFIED MALE: I, as an individual, am going to endorse Rick Santorum.

ACOSTA: And passed over in a major endorsement from influential social conservative Bob Vander Plaats, a big boost for Rick Santorum. But it's another clear signal some evangelical Christians are having trouble getting over Gingrich's past marital problems, something the former speaker's own pastoral defenders acknowledge.

REV. JIM GARLOW, GINGRICH SUPPORTER: Reservations are understandable, but can a person actually receive forgiveness? Can they move to rehabilitation? Can they move to restoration? And I think the answer to that, based upon the Scripture, is yes.

ACOSTA: Because Gingrich is counting on values voters to put him over the top in Iowa, his campaign quickly sent out a statement touting an endorsement from another Christian conservative group.

But the former speaker didn't hide his disappointment.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Obviously, you would like to have everything.

ACOSTA: Gingrich's chief rival, Mitt Romney, isn't having the same trouble in Iowa because he's not spending as much time in the state.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The Mi-double tizzle.

ACOSTA: The Mi-double tizzle was on "Letterman."

ROMNEY: Newt Gingrich, really?

DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": Yes. Yes, that's right.

ACOSTA: Letting a pro-Romney PAC do all of the work for him, slamming the former speaker with a barrage of negative attacks. Gingrich is vowing to stay positive. That may win over some voters, but it may be confusing others, who wonder, where is Gingrich the fighter?

DENNIS GOLDFORD, DRAKE UNIVERSITY: Gingrich has tried to remain positive, but in a way, there's a disconnect. The first ad he came out with had him very soft-spoken and gentle and avuncular. People I know looked and said that's not Newt Gingrich. Somebody kidnapped him and they replaced him with somebody else.

ACOSTA: But part of Gingrich's appeal to voters is that he's a changed man. When one voter told Gingrich she was disappointed in him for predicting he would be the nominee in a recent interview...

GINGRICH: I am assertive.

UNIDENTIFIED FEMALE: I like assertive. Go get them.

GINGRICH: And, sometimes, when I get a little bit too assertive, it's not too smart. (END VIDEOTAPE)

ACOSTA: It's hard to do humility when you're under attack. Four years ago, Mike Huckabee won Iowa by rallying social conservatives behind his campaign. This time, that vote could be splintered among four or five different candidates, a dynamic that could allow Ron Paul or Mitt Romney to walk away with a surprise victory -- Wolf.

BLITZER: And at the top of your piece, I didn't exactly hear what that guy in the grocery store, the supermarket said to Newt Gingrich. And I know he used a bad word. But paraphrase a little bit what he said to the Republican candidate.

ACOSTA: Well, Wolf, it's not the kind of language that I would use on a family program such as this, but there was an F-word involved and another word that I don't even think I even want to try to rhyme.

But it was a very ugly moment for the former speaker. It is something that he will admit himself. He arouses passions in people that sometimes can really vent themselves out on the campaign trail and add up to some very ugly moments and that was one of them.

BLITZER: It certainly was. Jim Acosta, thanks very much.

Meanwhile, a notorious group of computer hackers may be targeting the Iowa caucuses two weeks from today. The alleged threat to derail the vote count has some state Republican officials in Iowa very worried.

CNN's Brian Todd is working this part of the story for us.

Brian, what's going on here?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we know there's a video out now from a group claiming to be the well-known hackers who call themselves Anonymous. A law enforcement official in Iowa tells me this video was apparently dropped off with Occupy Des Moines protesters. Then one of them posted this on YouTube.

Now, the speaker in the video says both political parties have failed the American people and are only looking out for corporate interests. And as for the key message in the video, it calls on viewers to occupy the candidates' campaign headquarters in Des Moines next week and -- quote -- "peacefully shut down the Iowa caucuses."

Now, there's concern about possible hacking of these results because the video was posted by people claiming to be that group of hackers, Anonymous. But it's not an actual call in and of itself to hack into the results as far as we can see.

In one posting, there's a tab that comes up saying -- quote -- "Anonymous does not tamper with election computer systems and results." it's not clear if the originator of the video posted that tab or if someone else did. You can edit these things when you post them on YouTube. An official with the intelligence division of the Iowa Department of Public Safety told us that department reviewed this video and at the moment does not view it as a threat of criminal activity and the official said they cannot verify if this is really from that group Anonymous. We also called the Iowa State Republican Party. They said they would not comment other any of this, other than to say they are talking precautions, Wolf.

It gives you a sense of how skittish people are going into Iowa two weeks from now, crucial, crucial caucus...

(CROSSTALK)

BLITZER: Having said all that, they have to be cautious right now given the track record of this group.

TODD: This group is notorious. We have been reporting on Anonymous and LulzSec, the group affiliated with it, all year long. They claimed responsibility for disrupting the Web sites of Visa, MasterCard and PayPal this year. They usually do it one of two ways.

It's either a denial of service attack, where they flood this Web site with so many requests that it basically shuts down. Or they can sometimes change the content of a Web site. That's the fear here in Iowa. They may be able to at least give the impression that results are different from what they really are. That's what people are a little bit afraid of right now.

BLITZER: Thanks very much. That's worrisome. Let's hope it doesn't develop into anything serious. thanks very much, Brian.

Little known and seldom seen until now. We will have a first look at North Korea's heir apparent, Kim Jong-un.

Plus, Senator John McCain, he will join us live here in THE SITUATION ROOM this hour. We will talk about North Korea, also deep fears right now a civil war erupting in Iran, and why John McCain is blaming President Obama.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, two weeks from today, we'll know the answer to this, but as of this moment, Ron Paul is the odds- on favorite to win the Iowa caucuses. And that has many mainstream Republicans positively apoplectic.

Despite being largely ignored by the mainstream media, the 76- year-old Texas congressman is at or near the top of virtually all the polls in the state of Iowa as we enter the homestretch in the first 2012 race for the White House.

What's refreshing is that Ron Paul has done it the old-fashioned way, with a consistent message and the best outreach operation in the state of Iowa. Andrew Sullivan writes for The Daily Beast that Ron Paul is generating enthusiasm and support among young voters and Democrats and independents, in other words, voters who could actually help the Republicans beat President Obama next November.

Now, you would think that's just what the Republican Party is looking for, somebody who can beat Obama next November. When it comes to Ron Paul, though, not so fast. Republicans are already set to spin a Ron Paul victory in Iowa by basically ignoring it. Iowa's governor out says they'll focus on who comes in second or third.

A "Washington Examiner" column by Timothy Carney suggests the primary contest will get ugly if Ron Paul wins Iowa. Carney points to Pat Buchanan's New Hampshire victory in 1996 where both the Republican establishment and the mainstream media rallied to crush his campaign. Carney says if Paul wins, his critics will imply that he's a racist or a kook or conspiracy theorist -- his quotes.

Whether the GOP establishment likes it or not, Ron Paul has the power to really shake things up if he wins Iowa. People in Iowa are rallying around someone who for the first in a long time represents real change -- real change. And that has to scare the hell out of both parties.

Here's the question: What will happen to the Republican field if Ron Paul wins the Iowa caucuses?

Go to CNN.com/CaffertyFile, post a comment on my blog, or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: It will shake things up a little bit. There's no doubt about that, Jack.

CAFFERTY: Big time.

BLITZER: All right. Thanks very much.

Mary Snow is monitoring some other top stories in THE SITUATION ROOM right now.

Mary, what else is going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, U.N. war crimes prosecutors are rejecting calls for an immediate investigation into the death of former Libyan leader Moammar Gadhafi. An attorney for Gadhafi's daughter reports that after being captured alive, Gadhafi and one of his sons were, quote, "murdered in the most horrific fashion." But officials at the International Criminal Court say they'll wait to see the results of an investigation by Libyan authorities before deciding whether I'd take any action.

CNN's Piers Morgan testified today in a British government- backed in inquiry into press ethics. Morgan's testimony related to events that took place prior to his coming to CNN when he was the editor of a now defunct British tabloid and later, "The Daily Mirror" newspaper. Speaking by video link from Los Angeles, Morgan refused to reveal his source for a voice message of Paul McCartney speaking to make up with then wife, Heather Mills. And Morgan denied ever ordering phone hacking.

A victory for Apple in its intellectual property against Android smartphone maker HTC. A federal trade panel ruled today that HTC had infringed on an Apple software patent and banned their import to the U.S. beginning in April. Analysts say the ruling is not as broad as Apple had hoped, but could bolster similar cases other Android smartphone manufacturers -- Wolf.

BLITZER: Mary, thanks very much.

Senator John McCain says he's glad Kim Jong-il has, quote. "joined the likes of Gadhafi, bin Laden and Hitler." I'll ask him about those comments and how he thinks the administration should be handling North Korea. My interview with John McCain live coming up this hour.

Also, in the wake of the pullout of U.S. troops to Iraq, is the country's government in Baghdad unraveling already? Our own Arwa Damon is standing by live with details of some truly stunning developments.

(COMMERCIAL BREAK)

BLITZER: The world got a first look at North Korea's heir apparent today for the first time since his father's sudden death on Saturday. Kim Jong-un viewed the glass coffin of Kim Jong-il who's lying in state and took part in a solemn ceremony with the government and military officials.

The outpouring of grief at the elder Kim's death is overwhelming. At least as we're seeing on North Korean television. Even soldiers openly weeping.

It's far different from what I saw while in North Korea one year ago this week.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): We had North Korean officials with us all the time -- and I mean all the time.

UNIDENTIFIED MALE: Thank you, Wolf.

BLITZER (on camera): Thanks.

(voice-over): They spoke English well and were very intelligent, polite and even nice. I never felt threatened. Let's not forget, this is a communist totalitarian regime.

We were restricted where we could go. They want to showcase the best and keep us away from the worst. We constantly pressed for more access and they sometimes relented.

We saw a lot of the North Korean capital, but did manage to get into the country side to see a huge apple and fruit tree orchard where thousands of farmers work what the orchard director said where some 2.2 million trees. That number seemed exaggerated, but whatever it was, it was impressive.

(on camera): We left Pyongyang probably after a half an hour ago. We drove out to the countryside and we're here overlooking these fruit trees. It's like row after row after row. Obviously, it's snowy out there and you can't see any fruit. But eventually, once the time is right, you'll see a lot of apples and other fruit growing right behind me. We're overlooking this ridge looking over all of this area that is literally acre after acre after acre.

(END VIDEOTAPE)

BLITZER: We're going to have a lot more on what's going on in North Korea right now. We're going to talk about it with Senator John McCain. He's got some strong views -- a marked contrast from what we're hearing from Secretary of State Hillary Clinton over at the State Department. Stand by for my interview with Senator McCain.

Also, Iraq's president accused of organizing death squads. It has sectarian tensions near the boiling point in Iraq. It's sparking fears of an all-out civil war between Shiites and Sunni. We're going to talk about that as well with Senator McCain.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer in Washington.

Here are some of the stories we're working on for our next hour:

Public frustration with Washington gridlocked skyrocketing right now as House Republicans are blocking a plan to extend the payroll tax cut for two months.

Also, Kim Jong-il is mourning in Pyongyang -- but people are mourning for Kim Jong-il in Pyongyang. But what does the transition of power mean for a nuclear North Korea.

And Brian Todd looks for the truth about marine captured in Iran and accused of spying.

Stand by. Those stories and a lot more. You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: Just days since the last U.S. troops left Iraq, there's fear already of bloody new sectarian violence, even potentially civil war.

CNN's Arwa Damon reports from Baghdad on the arrest warrant for the vice president and that has the country reeling.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT (voice-over): Stunning allegations that Iraq's top Sunni politician was involved in acts of terror, sending shock waves through the country and threatening to once again polarize it along bloody sectarian lines.

This man identifies himself as being a member of Vice President Tariq al-Hashimi's security detail and claims that he received direct orders from the vice president himself to carry out bomb attacks and assassinations.

This one of three confessions that aired on Iraqi state TV on Monday, along with a warrant for the vice president's arrest.

In his first public comments since the allegations were made, a defiant vice president declared his innocence and claimed the allegations were politically motivated.

"I have said there is a purpose behind this and there is political assassination," al-Hashimi stated. "Let the whole world see the disaster that has hit Iraq."

"I am puzzled by the statement made by U.S. President Obama when he said we left a democratic Iraq. What did the president mean by those remarks? Is this the reality Iraqis are living?"

Al-Hashimi speaking from the semiautonomous region of Iraq Kurdistan said he's ready to stand trial, but only if due process is insured. He said that won't happen in Baghdad where the judiciary is mired in politics, asking that the case be moved to the Kurdish north.

The vice president's Al-Iraqiya bloc has long accused Prime Minister Nouri al-Maliki of consolidating power and saying that the U.S. brokered power-sharing deal between Iraqiya and the prime minister's predominantly Shia state of law coalition was a sham.

In the last few months, hundreds of people, mostly Sunnis and supporters of Iraqiya, the party claims, have been detained under the umbrella of terrorism. Simply put, going after the vice president is viewed as a lethal blow by a Shia-dominated government against its Sunni opponents.

Nada Ibrahim, a member of Iraqiya, says al-Maliki was paranoid about a coup against him, as soon as U.S. forces withdrew.

Many expected the government would eventually fall apart, but few predicted it would be unraveling this fast.

NADA IBRAHIM, IRAQI BLOC MEMBER OF PARLIAMENT: The whole political process, it might collapse completely. And there will be chaos. The government already have problems, many problems, and still terrorism inside the country. It could be transferred also from other country to inside. And it will be civil war.

DAMON: The situation many here point out could not be more serious. It's not about saving a person or government. It's about saving the country.

(END VIDEOTAPE)

BLITZER: And Arwa's joining us now live from background.

Arwa, it was only last week you had an interview with the deputy prime minister who accused the prime minister, Nouri al-Maliki, of being what he called a mini-Saddam Hussein and refusing to name an interior minister, a defense minister, consolidating power, arresting Sunnis.

Elaborate a little bit on what the latest is because this arrest warrant for the vice president is pretty alarming.

DAMON: Yes, there's that arrest warrant. The prime minister is also asking parliament for a no confidence vote against the deputy prime minister who made those statements about Al-Maliki, effectively calling him a dictator.

There's great concern here, Wolf. All parties need to somehow find a political solution to all of this. Now the Kurds are trying to set up a round table discussion to bring all the political blocks together.

Because the fear is that if this current path is the one that the government continues to go on, that eventually is going to lead the country into a very treacherous area. In fact, some senior diplomats are warning that unless this is somehow dialed back, it could end up being the beginning of the end -- Wolf.

BLITZER: This is what so many people feared at one point. Iraq splitting up into a Kurdish area in the north, a Shiite area, a Sunni area if you will and it's only been a few days, since Saturday night, when the last U.S. troops formally left Iraq. Does it already seem to be getting that bad?

DAMON: You know, Wolf, many people were saying that they predicted the government would begin to unravel, but few predicted that would be happening this fast. That has really caught many by surprise.

And the concern is that the government is now not going able to hold itself together and that is going to translate into violence. Many politicians are warning that if the country does end up dividing, it is going to be incredibly bloody.

Some people are going so far as to say that what Iraq has been through is going to pale in comparison so what it's potentially going to go through. So the gravity of this situation at this junction that's critical historic junction for the nation is incredible.

BLITZER: Arwa Damon on the scene for us as she's been from day one, since March 2003 when the U.S. invaded Iraq. Let's dig a little bit deeper right now in the situation in Iraq and a whole lot more with Senator John McCain.

He's the ranking member of the Armed Services when he was the Republican presidential nominee. See these reports, Senator, must be so frustrating. Here's the bottom line question. Do you have confidence in Nouri Al-Maliki, the prime minister of Iraq, that he's doing the right thing?

SENATOR JOHN MCCAIN (R), ARIZONA: I do not and it's ironic that the president and vice president taking victory laps while the government in Iraq unravels more rapidly than I thought.

But I thought it would unravel and simply because we did not maintain a residual force of some 20,000 troops, which we should have, which the Obama administration would never agree to a specific number.

And now, the president's re-election campaign is already putting out propaganda, saying promises kept. It's really a low point in my view in the history of American involvement in national security affairs.

BLITZER: You know, the other argument, Senator McCain, and this is the one the Obama administration makes. That Nouri Al-Maliki's government would never accept immunity for those 20,000 or whatever residual troops, that were going to remain in Iraq and the U.S., the Pentagon, was not going to let U.S. troops stay there unless they had immunity from prosecution on the part of the Iraqi government.

MCCAIN: Here's the following facts, after seeing President (inaudible) and in meeting Prime Minister Maliki, Senator Graham and I, Maliki said, yes, he would accept American troops and would work with other parties to make it happen and they asked ambassador generals and how many troops do you want?

He said, we don't know. We're still working on that. That was last May. We never gave them a number and the president's campaign promise was he'd get everybody out of Iraq. He got everybody out of Iraq.

It could have been entirely different and any close observers such as General Keen and many other who knew what was going on in Iraq knows that the United States was never serious about keeping a residual force in Iraq and in keeping with president's campaign promise.

BLITZER: The president did make a campaign promise when running against you. He wanted to get all U.S. troops out of Iraq and he says he was living up to that campaign promise.

But here's another factor that concerns me, there's still about 17,000 Americans in Iraq right now. Half a sort of diplomatic personnel, support staff, and the other half, formal contractors.

Military contractors, civilians hired by the U.S. government. I'm worried about their safety. I don't know if I should be, but you've been there on many occasions. How worried should we be about the security of these Americans that are still there?

MCCAIN: I think you should be deeply concerned, especially since Sadr, who you know is part of the outsider who you know is part of the government, said he would view American embassy personnel as quote, "occupiers."

And can we carry out reconstruction projects and do the things we need to do to help the Iraqis if the government is fragmenting and there's a return to sectarian violence, which are there signs of.

I regret to say these all things, Wolf, because the Iraqi people deserve better. The families of 474 young Americans who died there deserve better, but this could have been avoided and should have been avoided.

BLITZER: Let me move on to Afghanistan right now because some controversial comments by the Vice President Joe Biden in the new issue of "Newsweek" magazine on the Taliban.

Let me read to you and our viewers, I'll put it up on the screen, what he said about the Taliban. That the Taliban per se is not our enemy, that's critical. There is not a single statement that the president has ever made in any of our policy assertions that the Taliban is our enemy because it threatened U.S. interest.

The vice president saying, you know what? Go ahead, you've got to negotiate peace with someone, you negotiate peace with your enemy, if you will. Al Qaeda is an enemy, but the Taliban not necessarily. What say you?

MCCAIN: I say that the men and women who are serving, I'm already hearing from them by Twitter and many other means. One of them says, one who's over there in Afghanistan now, quote, "well, if they aren't the enemy, who's been shooting at us all this time."

It's just bizarre. But it's not quite as bizarre as you might think because the administration now is placing their eggs in the basket of some kind of an agreement with the Taliban for a cease fire and some kind of reconciliation.

Well, when one of our friends was in Afghanistan a few weeks ago, said to the president Pakistan, you think we'll get peace with the Taliban and the head, the president of Pakistan said, why should they? You're leaving.

There's even Reuters reports, new report that we are willing to release some al Qaeda -- some Taliban prisoners in Guantanamo as a, quote, "confidence building measure." I mean, this is really, really incredible stuff they're doing. The Taliban would agree to a peace settlement when they believe they are beaten. Not when they believe we are leaving.

BLITZER: Let me move on to North Korea and I'm going to show our viewers your reaction to the death of Kim Jong-il and Secretary of State Hillary Clinton's reaction in a formal statement.

First, what you said in your written statement. You said, I can only express satisfaction that the dear leader is joining the likes of Gadhafi, Bin Laden, Hitler and Stalin in a warm corner of hell. That was your statement, part of your statement at least.

Hillary Clinton, the secretary of state last night, a very different tone among other things. She says we are deeply concerned with the well being of the North Korean people and our thoughts and prayers are with them during these difficult times.

Your reaction to what the secretary of state, would you regard that as a formal statement of condolence to the North Koreans?

MCCAIN: I think I would view it as a formal statement of condolence. But the fact is, that this guy starved, beaten, tortured, his people the largest goo lag on earth is now in North Korea.

That the incredible brutality inflicted on his own people as I said earns him a very warm place in hell. The people who can beneficially affect this situation, which is very tense right now, is China.

China is the country that should be acting mature, as a world power and should be acting, making sure that with this transition period, to by the way, what "The Wall Street Journal" describes as a sadist Kim Jong-un, that things do not erupt into what could be a conflict or increase tensions between North and South Korea.

China should realize that a united Korea poses no threat to China and they should not be propping up a regime of this nature. Finally, we saved the taxpayers food aid we were going to give to North Korea and it turns for them to return to the six-party talks or four-party talks or two-party talks.

And then, of course, they would fail again because the North Koreans are not about to give up their nuclear capability. So we may have been saved some millions of dollars. There should be a reunification of the Korean Peninsula. It should be done gradually with democratic and free people and China can make that happen.

BLITZER: Very quickly on another subject, the payroll tax cut, the extension. You were among the 89 senators who voted to continue it for another two months. Your Republican colleagues in the House, they say they're not going to go along with that. Why are they wrong and you and your Republican colleagues in the Senate right?

MCCAIN: I think we have to recognize reality and that is we are not going to see the payroll tax cut expire on the first of January. And we have to accommodate to that reality. It would not be fair to the American people at this time.

And so, it seems to me that Republican leaders and Harry Reid and the speaker and Congresswoman Pelosi should sit down together with the administration and figure out a way through this. It is harming the Republican Party.

It is harming the view if it's possible anymore, of the American people about Congress and we've got to get this thing resolved and with the realization that the payroll tax cut must remain in effect. Not to mention the dock fix and unemployment insurance, yes. BLITZER: Of course. We're going to have a lot more on this part of the story coming up at the top of the hour. Senator, as usual, thanks very much for coming in.

MCCAIN: Thank you.

BLITZER: New polling shows the Republican frontrunners trailing President Obama among likely voters. Our "Strategy Session" is next.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session." Joining us right now, the Democratic strategist and CNN political contributor, James Carville and Republican strategist, Karen Hanretty. Guys, thanks very much for coming in.

James, I don't know if you probably saw our new poll numbers. Hypothetical match-ups. Obama would beat Romney, 52-45. He would crush Gingrich 56-40.

Electability. Do you think caucus goers, Iowa caucus goers, New Hampshire primary voters, are going to look at these numbers and say they really want to beat President Obama, they got to go with Romney?

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Yes, I never thought much of that argument. I think in this cycle, there's some validity to it. First, these Republicans are paying very close attention.

Somebody pointed out they had eight different frontrunners and one debate performance sort of croaked someone. I wouldn't be surprised if this kind of thing does has some influence on some of these caucus goers.

I'm willing to concede that in the past, I've been kind of skeptical with this kind of thing, but a little less so in this cycle.

BLITZER: What about you, Karen?

KAREN HANRETTY, REPUBLICAN STRATEGIST: I think that's exactly right. Look how many people have been watching these very many debates. We had about 12, 13 debates so far and the ratings are pretty high for them, pretty significant.

What I'm hearing from a lot of Republicans is who can outdebate President Obama. They feel that he got elected not because of experience, but because he's a great speaker.

He's a great campaigner and they're looking for someone who they think can go head to head with him, which is I think is why Newt Gingrich in part really rose in the polls.

Because they thought, well, he can go head to head with Obama in a debate, but of course, there's more to campaigning than just debating. BLITZER: These numbers would explain, James, why you and a lot of other Democrats, including the Obama campaign and people at the White House, they're more worried about Mitt Romney as the president's challenger than Newt Gingrich.

CARVILLE: Well, I don't think it's any secret that Gingrich would have been more preferable to people than Romney. But you know, I used to say the same about Reagan. I don't know.

Another significant thing about this, this is the first poll I've seen where the president has ascended the mount 50. He's at 52, which is probably the single most significant thing about the poll, the top number that the president has. I thought that was more interesting than anything else.

BLITZER: The other interesting thing, his job approval number, Karen, has gone up to 49 percent. It was 44 percent only in November.

So it looks like it's improving on that front, but let me point out to you, Karen, that Ron Paul does a whole lot better in these hypothetical match-ups against the president than Newt Gingrich does.

Ron Paul basically got the same number as Romney, 52-45. How worried are you, Karen, that Ron Paul will win in Iowa?

HANRETTY: Ron Paul victory in Iowa does not worry me. I don't think it worries Republicans. No one is laying awake at night concerned that Ron Paul might win the nomination as opposed to many Republicans laying awake at night worrying that Newt Gingrich might win the nomination.

This is a national poll. Newt Gingrich is well-known. People, I have strong opinions about him one way or another whereas Ron Paul, I think is far less known.

I think people are more likely to give him a chance. They like a lot of his economic ideas than they are Newt Gingrich. It's hard to un-ring the bell and that's what Newt Gingrich would have to do if he were to win the nomination.

BLITZER: James, we showed an exchange. Newt Gingrich was at a grocery store in Iowa, some guy shook his hand, smiled at him and said some really bad words. Let me see if we can play that clip.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: It's a free country.

(END VIDEO CLIP)

BLITZER: You heard Newt Gingrich say it's a free country. You can express your opinion, but he used bad, bad words, including the f- word. This kind of situation, I'm sure it happen to a lot of candidates out there, but what does it say to you about what's going on? CARVILLE: Well, I mean, look, you can't place too much stock in what one guy said, but as Karen pointed out, he's got a rather loud bell to un-ring. And just happened before earlier where somebody was mad about the Iran plan.

But you know, prior to the time we had cameras and everything, it's not unusual for a politician to get someone who's less than we say gracious. That probably happens to him as much anybody else, but I wouldn't make too, too much. Interesting TV. I can tell what he's saying.

BLITZER: We all know what he said, but we're not going to play it -- Karen.

HANRETTY: Listen, you don't want to be a fire storm throughout the media if that same man was caught saying those words to president Obama on the campaign trail. Look, a lot of people don't like these candidates.

A lot of people don't like James and I. I'm sure when we're on TV, I get similar e-mails, too, and I'm not Newt Gingrich. Passion is red hot in these things and that's fine. You know, I don't think Newt has that thin of skin that he doesn't, he can't --

BLITZER: No. I've known him for a long time. We all get that kind of comments from time to time. Thank you.

Political gridlock over extending the payroll tax cut. We have details coming up in our next an hour. Also, the secretary of Homeland Security, Janet Napolitano saying there are no quote guarantees about homeland security. Erin Burnett standing by for that.

(COMMERCIAL BREAK)

BLITZER: CNN's Erin Burnett has been spending some time with the Secretary of Homeland Security, Janet Napolitano. Erin is joining us for a little preview. What did you guys talk about there?

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUT FRONT": Well, Wolf, it was really interesting. We spent the day and tried to get a sense for what this whole Department of Homeland Security is.

You know, obviously 10 years ago, it didn't exist. It's now the third biggest department in the United States government, more than 200,000 employees and its budget more than $50 billion a year.

So what do we get for that money was the real question we had? We got to visit the TSA. We got to see the secret service and how they train cybersecurity, all of it, but among the questions I spent a lot of time focusing on with Secretary Napolitano was, what are we really getting for our money?

This whole organization with this whole conversation going on in the GOP over whether it should exists, are we really any safer. I asked her one specific question about whether where there's a will, will there also be a way or not and here's what she said.

(BEGIN VIDEO CLIP)

BURNETT: If someone is willing to kill themselves, suicide bomb, thing that is happen in other places around the world, they're going to find a way to do it. There's no way you can become full proof.

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: Look, this is the Department of Homeland Security not the department of guarantees. There are no guarantees here.

(END VIDEO CLIP)

BURNETT: And you know, Wolf, it's one of those things where it's sobering to hear it. I mean, I think we all know it, but it is still sobering to hear that. The real question seems to be for security, there has been no price.

With all the talk about budget cuts, "Super Committee," all these things, right, we continue to put money into security and are we really getting our money's worth.

We talked about whether for example you know that recent story about someone smuggling 18 cases of plutonium from Moscow to Tehran. Could that happen here? We talked about whether another underwear bomber could happen and looked at how that had gone done.

We tried to have a conversation as to what this department does at a time when a lot of people are traveling and security is in a lot of people's minds and I can promise you, Wolf, that there will be plenty of heroin along with it. This is actually a neat thing that we saw.

BLITZER: Heroin. We'll watch at 7 p.m.

BURNETT: I've never seen heroin before, Wolf.

BLITZER: All right, I've seen it on television.

BURNETT: I've seen it on television, but the first time I had seen it and how someone had tried to smuggle it through.

BLITZER: We'll be watching, 7:00 p.m. later tonight. Erin Burnett Out Front with Janet Napolitano. Thanks very much.

A tax hike for millions of working Americans now. Just 11 days away and Jack Cafferty's coming up next with your thoughts about Ron Paul.

(COMMERCIAL BREAK)

BLITZER: Jack's back with the "Cafferty File" -- Jack.

CAFFERTY: Question this hour, Wolf, is what's going to happen to the Republican field if Ron Paul wins the Iowa caucuses two weeks from today? Larry in Florida writes, "I'm from Lake Mary, Florida. If Dr. Paul wins Iowa, I'll be on a plane the next day to New Hampshire to help him campaign in his final days before the primary there. I never really enjoyed politics before I heard about Ron Paul. I always thought it was an insult to the lesser of two evils, but since he's come around, I feel a sense of appreciation to our country that I haven't felt in quite some time."

Mark in Arizona writes, "Nothing will happen. A win in Iowa doesn't seem to mean much historically and the majority of Republicans say they won't vote for him any way. It's going to be Romney or Gingrich. A lose, lose situation."

BJ in Illinois writes, "Americans will grow stronger in what they used to believe in."

Tom writes, "If Ron Paul wins the Iowa caucuses, it will most likely be portrayed as unimportant by the mainstream media and many Republican officials. Hopefully, the American people will see through this cloud of propaganda and realize that Ron Paul is actually electable."

Dave in Ohio writes, "Republican leaders and political analysts will write off Iowa. The focus will be on Romney or Gingrich in second place. Let's be perfectly clear here. Republican leaders don't want Ron Paul as their nominee.

If Ron Paul is not the nominee, 10 percent of the GOP base won't support the GOP nominee. And if he should run as a third party candidate, they might lose more than 10 percent.

It's beginning to look like the Ron Paul divide in the Republican Party regardless of what the party wants. It will eventually give Obama a second term and the Republicans have nobody to blame but themselves."

And David finally writes in Virginia, "It will all go to New Hampshire where voters don't know who Ron Paul is. Meanwhile back at Republican National Committee headquarters, Valium and Maalox martinis will abound. And the White House will begin picking out the bunting for the inaugural podium."

If you want to read more about this, got a lot of e-mail, we always do when we talk about Ron Paul, go to my blog, cnn.com/caffertyfile or through our post in THE SITUATION ROOM's Facebook page --Wolf.

BLITZER: Alright Jack, thank you.