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What if Ron Paul Wins Iowa?; Closer Look at North Korea; Food Stamp Demand Grows Among Affluent; Captive's Family: He's No Spy; Man Sentenced For MLK Parade Bomb Plot

Aired December 20, 2011 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thank you.

And you're SITUATION ROOM.

Happening now, members of Congress heading home for the holiday leaving millions of Americans on track to get a New Year's tax hike. One Democrat accusing House Republicans of a middle class mugging. This hour, the standoff, the strategy and what it's costing the nation.

Also, President Obama is warning Republicans this showdown over the payroll tax cut "is not a game," he says. We have new evidence that the finger-pointing is working -- at least for now -- to the president's advantage.

And a new snapshot of the economic pain in America -- we're seeing a dramatic rise in the demand for food stamps in one of the nation's wealthier communities.

We want to welcome our viewers in the United States and around the world.

Breaking news, political headlines and Jeanne Moos all straight ahead.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Right now, the clock the is ticking toward a tax hike for 160 million Americans and partisan gridlock and public frustration are zooming off the charts.

House Republicans refused today to agree to a Senate plan to extend the payroll tax cut for two months. The speaker, John Boehner, leading House Republicans into a two front battle -- against the Senate and against President Obama.

Our senior Congressional correspondent, Dana Bash, is covering all the latest developments in this newest crisis here in Washington.

What is the latest -- Dana?

DANA BASH, CNN CORRESPONDENT: Well, you know, this is really a sad, but, unfortunately, fitting chaotic end to a year that has been marked by one partisan stalemate after another. But, Wolf, this stalemate -- this -- this standoff that we're seeing is -- really, it has more of an impact on people's pocketbooks than any we've seen in the past year.

(BEGIN VIDEOTAPE)

BASH (voice-over): A stark illustration of this high stakes standoff -- a House Republican payroll tax press conference suddenly competing with a surprise presidential appearance.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Right now, the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1st. It's the only one. We know this is good for the economy and we went ahead and did the right thing. I need the speaker and House Republicans to do the same.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I need the president to help out, all right?

(CHEERING)

BOEHNER: This two month extension will create more uncertainty for job creators in our country when millions of Americans are out of work.

BASH: That's the central House GOP argument against a bipartisan Senate compromise to extend the payroll tax cut for two months, one that most Republican senators voted for last weekend.

REP. TOM REED (R), NEW YORK: Enough is enough. The arrogance of this place is outstanding. It's unbelievable. You have to look at what we're talking about from the eyes of our constituents and the people back home.

Two months of certainty for people when it comes to their payroll -- to their paychecks?

BASH: But House Republicans, wary of casting a vote to effectively raise taxes, carefully crafted legislation to avoid that and instead appointed negotiators to work out a compromise with the Senate.

REP. PAT TIBERI (R), NEW YORK: I learned in Civics 101 that the House is a coequal branch to the Senate. Members of the other side say. This is a compromise. It's a compromise in the Senate, not the House.

BASH: But time is running out. No deal by January 1st means that Americans making $35,000 a year will see a $700 tax increase and those making $50,000 a year will lose $1,000 from their paychecks. Democratic sources insist they've got the political upper hand.

REP. JOHN LEWIS (R), GEORGIA: If we fail today, how will you face your neighbor?

Family will suffering.

Where is your compassion?

Where is your heart?

Where is your soul?

BASH: Democrats are dug in, too, refusing to appoint their negotiators until the House passes a two month extension.

So what did House GOP leaders do?

They sent lawmakers home for Christmas while the stalemate continues.

(END VIDEO TAPE)

BASH: And, Wolf, House Republican leaders have advised lawmakers that they should be ready to come back to Washington at any moment if they can work out some kind of compromise. The question being asked in every corner of this capital right now is who will blink first? Democrats, they admit, Wolf, that throughout this year of standoffs with the House Republicans, they have certainly caved many, many times. But they insist this time, they are not going to do so.

One of the top Democrats I talked to earlier today, he said that in this case, he believes they don't just have the high ground, he said we believe that we're on a mountaintop politically and, they believe, in terms of policy -- Wolf.

BLITZER: Dana Bash joining us.

Dana just back from maternity leave.

Good to have you back on Capitol Hill.

BASH: Thanks, Wolf.

BLITZER: Thanks very, very much.

Enjoy that baby, of course, as well.

BASH: Thank you.

BLITZER: This is one of the more paralyzing games of political chicken we've seen in Washington this year. And it now appears that President Obama is, in fact, getting something out of it, at least politically.

Our chief White House correspondent, Jessica Yellin, is joining us now with some new poll numbers -- Jessica, what are they showing?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Hi, Wolf.

The latest CNN/ORC polling shows this gridlock in Washington may actually be helping President Obama, at least politically. According to the latest CNN/Opinion Research Corporation Poll, President Obama's approval rating is now at 49 percent. That's up 5 points since last month and his highest polling since Osama bin Laden was killed back in May.

Now take a look at -- take a look at this. The latest polling also shows that when you ask Americans, do you have confidence in President Obama to solve the major issues facing this country?, a majority of Americans say they do. But only 31 percent say they have a same confidence of the Republicans in Congress.

Now, the president's aides see that as a validation of the president's recent strategy, which has been to repeat the jobs theme like a mantra and then to hit Congress for failing to take action on his jobs package.

But I should point out that it is a little too soon for a ticker tape parade here at the White House over his numbers, because an incumbent president, to win reelection, should want that number -- that approval number -- to be at least 50 percent or higher. And he is not there -- Wolf.

BLITZER: We'll see what happens.

Is there anything in the polling to give us a clue, Jessica, about what the political fallout will be from this latest payroll tax kite -- tax cut battle?

YELLIN: Right. We didn't ask about the payroll explicitly. But take a look at this number. We asked about sort of the Democratic and the Republican brands, if you will. And the Democrats -- the Democratic Party has held the same favorable -- favorability view since June, before the debt ceiling crisis. But the favorability view or Americans' view of the Republican Party has taken a hit since June. It's fallen 6 points.

Now top Democrats attribute that to the gridlock in Washington. They believe that Republicans are taking more of the blame for the gridlock over the debt ceiling and for failing to pass elements of the jobs package. So if you follow that logic out, Wolf, then it would compute that Republicans would take more of the blame if the payroll tax cut is not extended.

However, you have to keep in mind that economists are saying that if the payroll tax cut isn't extended, it will really hurt the economy and Americans will take a real hit. If the economy is hurt, not only are Americans hurt, but the president is hurt politically, as well, because he has the final responsibility for the economy. So no one wins in that case -- Wolf.

BLITZER: And I'm sure...

YELLIN: Everybody here has (INAUDIBLE)...

BLITZER: I'm sure you noticed, Jessica, like I did, when the president was in the Briefing Room today, he showed some anger. He showed some fire in his belly. I write about this on our blog post, THE SITUATION ROOM blog post today. This is what his -- his base, his liberal base wants. They want to see some passion from him. I suspect some Independents want to see it, as well. And that may explain, at least in part, why his job approval number has gone up to 49 percent.

YELLIN: That's right. He's shown a lot more emotion lately and -- and they do respond to that. You're right, Wolf.

BLITZER: Jessica, thanks very, very much.

Let's go to Jack right now.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: President Obama's Watergate is how some critics are describing the growing controversy over the Fast and Furious gun walking program.

House Oversight Committee chairman, Daniel Issa -- or Darrell Issa, I'm sorry -- wants Attorney General Eric Holder to appear before his committee early next year. Issa says that hearing will focus on what Justice Department officials should have done to stop the program.

Operation Fast and Furious began in 2009 and allowed illegally purchased guns to walk from Arizona gun stores over the border to the Mexican drug cartels. The program was meant to monitor the flow of weapons, but it went very badly haywire.

Hundreds -- perhaps thousands -- of guns still missing. They've been linked to the deaths of hundreds of Mexicans along the U.S. border and, also, the death of a U.S. Border Patrol agent, Brian Terry.

In light of the botched operation and what some see as the Justice Department's botched response, dozens of leaders are calling for Eric Holder to resign. More than 75 members of the House have signed a resolution expressing no confidence in his leadership. "Washington Times" columnist Jeffrey Kuhner suggests the scandal is President Obama's Watergate. He writes: "There's been systematic cover-up and that Eric Holder and his aides are guilty of high crimes, including perjury, obstruction of justice and abuse of power."

Kuhner believes that that is worse than Watergate, because nobody died during the scandal that brought down President Nixon.

For his part, Eric Holder says he's not going anywhere. In testimony before the Judiciary Committee earlier this month, Holder acknowledged that mistakes were made, but said he's not going to resign. He also said he doesn't think any of his top aides ought to step down.

Holder played the race card in an interview with the "New York Times." He said some of his critics are motivated by racism because he and President Obama are black. Here's the question -- could Fast and Furious eventually become President Obama's Watergate?

Go to CNN.com/caffertyfile and post a comment on my blog or go to our post on THE SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: You're going to get a lot of e-mail on this one, Jack.

Thanks very, very much.

Iowa Republicans are bracing for a possible game-changer.

What if -- what if Ron Paul wins the caucuses two weeks from today?

It could put Iowa's Republican governor in a difficult position. We're going to hear from him.

And a blunt new admission about Iran's nuclear defiance and what the U.S. is doing about it. Stand by for an exclusive CNN interview with America's top military officer.

(COMMERCIAL BREAK)

BLITZER: A stern new warning to Iran about its nuclear intentions and defiance. America's top military officer talks frankly about the Iranian threat in an exclusive CNN interview, opening and acknowledging that the United States is spying on Iran.

Our Pentagon correspondent, Barbara Starr, is traveling with the chairman of the Joint Chiefs of Staff.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, we came here, to Saudi Arabia, with General Martin Dempsey, the chairman of the Joint Chiefs of Staff.

In his talks here with Saudi officials, front and center, Iran.

(BEGIN VIDEOTAPE)

STARR (voice-over): General Martin Dempsey, the chairman of the Joint Chiefs of Staff, began his Middle East in tour in Kuwait. Everywhere, even in Afghanistan, Iran's nuclear intentions are a growing worry.

In an exclusive interview with CNN, the plain-spoken general has a blunt message for the Iranian regime.

GEN. MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN: My biggest worry is they'll miscalculate our resolve. Any miscalculation could mean that we're drawn into conflict. And that would be a -- that would be a tragedy for the region and the world.

STARR: Behind-the-scenes, Dempsey is quietly leading the ongoing military planning for an attack against Iran's nuclear weapons if the president gives the order. DEMPSEY: We are examining a range of options.

STARR: Are you satisfied that, if asked, the U.S. military would be able to execute an option against Iran?

DEMPSEY: I'm satisfied that we are, that the options that we're developing are evolving to a point that they would be executable if necessary.

STARR: Dempsey has no guarantees Israel will give the U.S. warning if it decides to attack Iran, but he acknowledges the U.S. is sharing intelligence with Israel.

DEMPSEY: We're trying to establish some confidence on the part of the Israelis that we recognize their concerns and are collaborating with them on addressing them.

STARR: And the loss of the U.S. spy drone over Iran exposed the U.S. espionage effort, which is critical for any military option.

DEMPSEY: If you're asking are we gathering intelligence against Iran in a variety of means, the answer's of course, wouldn't it be rather imprudent of us not to try to understand what a nation who has declared itself to be an adversary of the United States is doing.

(END VIDEOTAPE)

STARR (on-camera): The Saudis are making clear if Iran gets a nuclear weapon, they, too, the Saudis, will pursue this same capability. General Dempsey is here to tell the Saudis a nuclear arms race in the Middle East would a disaster for everyone --Wolf.

WOLF BLITZER, CNN ANCHOR: Barbara Starr traveling with the chairman of the joint chiefs in Saudi Arabia right now.

Let's move on to the case of an Iranian-American, a man held captive in Iran since August. His family is denying allegations he's a CIA spy. Brian Todd is following the story for us. Brian, you've had a chance to speak to the family?

BRIAN TODD, CNN CORRESPONDENT: That's right. We did, Wolf. No one in the family would go on camera with us, but they did tell us they are very worried about him, that he's being held in a prison notorious for holding political prisoners and not treating them very well. And as relative say, they are shocked at a video of him shown recently on Iranian state TV airing what they say is a false confession from him.

(BEGIN VIDEOTAPE)

TODD (voice-over): According to Iranian authorities, this is the taped confession of an American spy. On Iranian state TV, former U.S. marine, Amir Mirzaei Hekmati, is shown being interviewed. Iranian officials say he's a CIA analyst who's worked with Iraqi officers. The U.S. state department confirms his name, acknowledges Hekmati has been detained in Iran and says the Iranians have a history of falsely accusing people of spying.

Contacted by CNN, Hekmati's family in Michigan would not go on camera, but they told us it's been 100 days since they last heard from Amir. They say he went to Iran to visit elderly relatives in August and has been detained since then in Tehran's notorious Evin prison, the same place the Iranians held three American hikers.

In a statement, the family says Amir has never had any affiliation with the CIA, and these allegations are untrue.

(on-camera) Hekmati's family tells us that before his trip, he got permission to enter Iran from the Iranian intersection here in Washington. They say he was upfront about who he was, about his U.S. military service, everything, and that he was told here that it would be no problem. We want to talk to people at the intersection to see what the problem is now. We haven't been able to reach them by phone yet.

I'm going to knock on the door, see if anybody can talk to us. Hi. I'm Brian Todd with CNN. We're rolling tape on this. I wanted to see if someone could come and talk to us about Amir Hekmati's case? There's no one who could come and talk to us.

(voice-over) We were told to keep calling and try e-mail. We did, but never heard back. Amir Hekmati's detention is the latest incident in what many are calling a spy war between the U.S. and Iran. Coming on the heels of Iran's capture of a U.S. drone, Iran's claimed to have arrested a dozen CIA spies, and Iran's alleged plot to kill the Saudi ambassador in Washington.

FRAN TOWNSEND, CNN NATIONAL SECURITY ANALYST: I think Iran sees themselves in an increasingly favorable position, right? They continue to make provocative steps, provocative moves against the U.S., knowing very well President Obama does not want to get caught in another conflict. He's entering a very difficult presidential re- election year, and so, he's -- Iran is provoking the U.S.

(END VIDEOTAPE)

TODD (on-camera): A former senior U.S. intelligence official finds it inconceivable that Amir Hekmati is a U.S. spy, saying, quote, "It just doesn't seem plausible. The former official said that an -- American, excuse me -- of Iranian descent who's served in the U.S. military would not be the type of cover the CIA would use for somebody going into Iran. A state department official is calling for Hekmati's release, quote, "without delay" -- Wolf.

BLITZER: I think it's fair to say, the Iranians right now, they're feeling a lot of heat.

TODD: That's right. We've talked to a lot of former top officials about this. The former CIA director, Michael Hayden, says, this is a sure sign that they're feeling some pressure both internally and externally, the chest pounding on their part with all these public incidents. He says they're feeling a lot of pressure right now, and it's reflected in a lot of these instances. BLITZER: You say Amir is a marine.

TODD: He's a former U.S. marine. He served from 2001 to 2005 and did serve in Iraq, but his family says no way is he a CIA spy.

BLITZER: Thanks very much for that. Brian Todd reporting.

A thrilling day on Wall Street. Ahead, what prompted the Dow to surge more than 300 points?

Plus, a dramatic new twist in the case of the admitted Christmas Day underwear bomber. We're going to tell you what he now wants the judge to do.

(COMMERCIAL BREAK)

BLITZER: A rousing day on Wall Street. Mary Snow is monitoring that and some of the other top stories in the SITUATION ROOM right now. What's going on, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, today, the Dow jumped more than 337 points a mid new signs of strength in the housing market. In a better than expected report release today, the number of new homes breaking ground rose to an annual rate of 685,000 in November. Investors were also encouraged by positive signs of consumer confidence in Europe, easing concerns over the massive Eurozone debt crisis.

The justice department says a 37-year-old white supremacist has been sentenced to 32 years in prison for placing a bomb-laid backpack along the route of a Martin Luther King Day parade in Spokane, Washington this year. The man pleaded guilty to charges of attempting to use a weapon of mass destruction in September. No one was injured in the incident.

The admitted failed Christmas Day underwear bomber, Umar Farouk Abdulmutallab, is requesting a new legal adviser, preferably of Muslim descent. The Nigerian native has pleaded guilty to attempting to bring down a 2009 flight over the U.S. with a device hidden in his underwear and is facing life in prison. U.S. officials have linked the alleged plot to al Qaeda in the Arabian Peninsula.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I like to report the safe return of the colors of United States forces Iraq to the rightful place in the United States of America.

SNOW (voice-over): And just days after the last U.S. convoy left Iraq, the military flag which flew over Baghdad has returned to U.S. soil. President Obama and Vice President Biden attended the ceremony today at Andrews Air Force Base, marking the formal conclusion of a mission ahead of the end of the year deadline for withdrawal -- Wolf.

(END VIDEO CLIP)

BLITZER: Mary, thank you.

The Republican presidential candidates are narrowing their focus as the first contest gets closer. Speculation growing about Ron Paul's chances of winning the Iowa caucuses two weeks from today. We're going to hear from the state's Republican governor.

And one of the most controlled countries in the world loses control as North Koreans see the body of their dead leader, Kim Jong Il.

(COMMERCIAL BREAK)

BLITZER: Right now, the Republican presidential candidates are zeroing in on the two states where the first 2012 votes will be cast, Newt Gingrich, Michele Bachmann, Rick Perry, Rick Santorum, they're all in Iowa, where their caucuses are exactly two weeks from today. Mitt Romney, Ron Paul, Jon Huntsman, they're in New Hampshire, campaigning for support in the January 10th primary.

Ron Paul, we certainly seen his poll numbers improve in recent weeks. That's fuelling speculation he might be a spoiler in the GOP race, especially in Iowa. Our chief national correspondent, John King, had a chance to interview Ron Paul earlier in the day. What was his basic point right now? Does he smell potential victory in Iowa?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: He won't give me a number. I say, do you think you can win, he says, I don't know. We're doing very well. Do you come in the top three, he thinks probably. It's fascinating to watch, because as you well know, the establishment here in Washington seen (ph) him as this outcast (inaudible). In Iowa, they're worried if Ron Paul wins, suddenly, people will say the caucuses don't matter anymore.

How do they vote for this guy outside the mainstream? The one thing he says, Wolf, is he loves this, that the establishment is mad. He says he's surprised, but he thinks young people in Iowa will propel him a very strong showing.

(BEGIN VIDEO CLIP)

REP. RON PAUL, (R) PRESIDENTIAL CANDIDATE: I'm surprised on how well I have done over this past year, because I believe that some of the position I've held were taking on, you know, the establishment at its very roots, but to me, it's very encouraging that the country is chancing. They're sick and tired of Washington.

(END VIDEO CLIP)

KING: You know this from moderating our national security debate, Ron Paul four years ago was way out there when it came to his foreign policy views, but he's not as far out there now. When he says bring the troops home, a lot of people are worry of the wars. When he says let Iran build a nuclear weapon, it's not our business. That's what -- conservatives do get that.

In Iowa where I was on last week, a libertarian base, a lot of young people, he's a lot like Barack Obama. It's more about the person and the party, on the college camps and say they're for Ron Paul. He will have a strong showing in Iowa. If he wins, we'll see two weeks from now, but he will be an impact player in the race and that gives the establishment fits.

BLITZER: But this year, you know, the Republicans have changed the rules. It's not winner take all anymore in a state like Iowa or New Hampshire or South Carolina. They're proportionate. So, you could get, let's say, 30 percent or 25 percent or 20 percent in Iowa with the top three and still say, you know, that's not bad. We'll move on to the next state.

KING: Which is why the establishment is cringing, because that means if Ron Paul gets 25 here, 30 there, 15 there, that means he amasses a lot of delegates. He has a broad network of support, he can raise a lot of money, so he can stay in the race, even if he's placing second, third and fourth.

What's that mean? We get to the convention, he's got a bunch of people on the floor who are for Ron Paul when it comes to the platform, when it comes to speaking. You have to deal with him. That's what gives the Republican establishment fix.

BLITZER: He'll have a base, there's no doubt about that.

KING: He's a player.

BLITZER: As all of us know, he's got some passionate supporters.

KING: His supporters you have to say you can win the nomination. I'm still skeptical about that. We'll see if he can grow. But he is a player without a doubt.

BLITZER: There's no doubt about that.

All right, John.

A lot more coming up on "JOHN KING USA" at the top of the hour. That's for our Northern American viewers.

And let's go to Iowa right now, where a lot of people believe Ron Paul could in fact win the caucuses two weeks from today.

Let's bring in our chief political analyst, Gloria Borger. She's joining us from Des Moines, the state capital.

Gloria, you had a chance to speak about that prospect with Iowa's Republican governor, Terry Branstad. What did he say?

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Well, actually, Wolf, the governor beliefs that Ron Paul does have a clear possibility of winning the Iowa caucuses, but as you might expect, he doesn't agree with the establishment because he thinks it would not affect the importance of Iowa.

Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

BORGER: If Ron Paul wins, some Republicans are going to say, who cares about Iowa?

GOV. TERRY BRANSTAD (R), IOWA: Well, it's still the first test, and it's --

BORGER: Test of what?

BRANSTAD: It's the test of strength and who is best -- first of all, we've always said Iowa winnows the field. So you want to be in the top three.

So, you know, it's not only about who wins Iowa -- Huckabee won Iowa last time -- but, you know, it's also about -- and obviously this is where Obama got his start. So we want to be the state that not only launched Obama, but sunk him. So that's what our goal is.

(END VIDEO CLIP)

BORGER: So, Wolf, you can tell he's spinning here a little bit, as you might expect, saying that it's not only about winning, but also about who comes in second and third. And he does have a point here, because he might surprise us, could have some momentum, but again, he's not having any of it that Iowa isn't important.

BLITZER: You've been speaking to a lot of Republicans in Iowa right now. Why do they think Ron Paul is doing so well?

BORGER: Well, there are a couple of reasons.

First of all, they believe the governor said that, and I was talking to some senior Republicans in the state. They believe that Ron Paul has a great issue set for the state of Iowa.

He's anti-government. He's anti-Washington. And he thinks that resonates.

He doesn't want to spend a lot of money. He's always been a budget cutter. And that's what people here care about.

But there's a second reason, and this is really crucial for Ron Paul. He's actually running a kind of Barack Obama old-fashioned Iowa caucus race here.

He's identifying new voters, younger voters, students in college, for example, who are anti-establishment, may identify with the Occupy Wall Street movement. He's identifying them. He's getting them -- going to get them to the polls. And they say, you know what? His organization may be what drives him if not to the top, then to the top tier.

BLITZER: What does a victory in Iowa, Gloria, really come down to?

BORGER: It is about that organization, Wolf. It's about 1,774 precincts. Somebody just told me that today.

You've got to know where your voters are and you have to get them to those caucuses. And that's one of the problems that Newt Gingrich can't really capitalize on his surge, Wolf, because he may have some newfound popularity in this state, but he doesn't have the money to run the advertising on television and he doesn't have the organization to figure out where his supporters are and make sure they come out on what could be a very cold and maybe snowy night, although we don't have any snow here now, and get them out there to support him.

It's all about the ground game.

BLITZER: We'll check back with you tomorrow, Gloria. Thanks very much.

A reversal of fortune. The wealthiest county in one state now seeing a growing demand for food stamps.

And the body of Kim Jong-il on display amid growing concerns about the future direction of North Korea's iron-fisted communist regime.

(COMMERCIAL BREAK)

BLITZER: To North Korea now, where the body of the notorious leader Kim Jong-il is on display for the world to see just days of his death. Kim's son and successor, Kim Jong-un, appeared on state television in front of his father's glass coffin for what was called a solemn ceremony to express deep condolences.

All this amid increasing global concern about the future leadership of the nuclear nation.

CNN's Anna Coren is in Seoul, South Korea, with a closer look at the reclusive country.

(BEGIN VIDEOTAPE)

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT (voice-over): One hundred and fifty thousand North Koreans crowd into the world's largest stadium for the spectacular mass games. Is it propaganda or a genuine display of devotion?

Either way, this annual event honors the "Dear Leader," Kim Jong-il, and his father, founder Kim Il-sung. This level of dedication was illustrated again on the streets of the capital, Pyongyang, this time as they mourned their leader's death.

BRIAN MYERS, EXPERT ON NORTH KOREAN IDEOLOGY AND PROPAGANDA: Everything in the North Korean media is really staged. Even the most innocuous photographs are staged. So I have no doubt that the people we see crying in these videos have been carefully selected and prepped on how to behave. But having said that, I really don't think that we should assume that the average North Korean is not really sad about Kim Jong-il's passing.

COREN: Kim Jong-il demanded unwavering loyalty from his nation of 24 million people. Propaganda, isolation and force were his tolls to achieve it. His presence is felt everywhere in North Korea. On television, viewers are bombarded with images of the Kim family, and in every home, office, and on each lapel, there's a portrait of their "Dear Leader."

LISA LING, CORRESPONDENT, "E! INVESTIGATES": When I was staying there, every single book on my bookshelf in the guest house was written by the "Dear Leader" or the "Great Leader," and when you're born indoctrinated into believing that this is the only way of life, it's hard to even be curious about what the rest of the world is like.

COREN: In school, they are continually fed a diet of nationalism and told they will be looked after by the state. The reality, however, is far bleaker.

This 23-year-old defected from North Korea five years ago. She said conditions were dire and food was scarce. And for many, starvation became a part of life.

UNIDENTIFIED FEMALE (through translator): You can see dead people everywhere on the streets. There were also people laying on the street due to hunger, but nobody cared.

COREN: For those who dare to criticize the system, punishment is harsh. Human rights groups say the regime runs a network of prisons and forced labor camps. Public executions are common.

But complete control of the state is starting to crack. Access to smuggled DVDs and a limited cell phone networks have exposed North Koreans to more of the outside world. And while there is a growing awareness of what lies beyond their borders, it's highly unlikely North Koreans will rise up against the regime.

Analysts believe the Arab Spring that spread across the world won't be taking hold of this reclusive, controlled state anytime soon.

Anna Coren, CNN, Seoul.

(END VIDEOTAPE)

BLITZER: It was exactly one year ago that I got the rare opportunity to report from inside North Korea, an extraordinary experience truly unlike any other.

Take a look at this very small sliver of life we got to see up close.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): We land in North Korea late in the afternoon on Thursday, December 16th. I have no idea this is going to be the strangest journey of my life.

The North Koreans take us into a room and confiscate our passports and cell phones. On the trip with me, Governor Bill Richardson and four aides, including Tony Namkung, his senior adviser on North Korean affairs, who's visited the communist country some 40 times going back to 1990.

TONY NAMKUNG, RICHARDSON ADVISER: I was born in China to Korean parents, and raised in Japan going to American school. So I'm quadrilingual, I guess.

BLITZER: Also on board, Richardson's energy adviser, Gay Dillingham. We head toward the city center in minivans and get our first glimpse of a huge but strangely empty city.

GAY DILLINGHAM, RICHARDSON ADVISER: It's a big city with very wide roads. We were one of the few cars on the roads. We were there in the wintertime and it just snowed the night we got there, and so that actually made a beautiful landscape with all this fresh snow.

BLITZER: We see people, men and women, shoveling snow by hand. Not just the sidewalks, but the streets as well.

GOV. BILL RICHARDSON (D), NEW MEXICO: It's an eerie feeling. It's like you're stepping into the '50s, into a city with old cars, very cold. It's like "Dr. Strangelove." You -- the buildings are not lit because there's little electricity, a lot of military around, a lot of people marching.

BLITZER: But as depressing as that sounds, it used to be much worse.

NAMKUNG: Clearly, they don't have sufficient energy, but compared to, say, eight years ago, when in a typical day you would experience four to five blackouts, and sometimes you'd be sitting in the dark for two or three hours at a time, clearly they've made some headway in recovering their energy supplies.

(END VIDEOTAPE)

BLITZER: Let's not forget how tense the situation could become on the Korean Peninsula. You have a million North Korean troops facing off against nearly a million South Korean troops, nearly 30,000 American troops, right along the DMZ. And let's also not forget, North Korea, a nuclear power.

We're watching this story very closely in the coming days for our viewers.

Meanwhile, almost 50 million people now on food stamps right here in the United States. Why some of the country's wealthier Americans are being hit hardest by this dramatic new surge.

Stand by.

And Jack Cafferty is asking, could Fast & Furious eventually become President Obama's Watergate? Your e-mail and Jack, that's coming up as well.

(COMMERCIAL BREAK)

BLITZER: In these tough economic times, food stamps aren't just for the poorest Americans anymore. No, this isn't about millionaires getting food stamps, but the demand for help is growing among Americans in traditionally affluent areas.

Our Mary Snow went to one community like that.

What did you find out, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we went to the wealthiest county in New Jersey. It is small, but there's been a dramatic rise in people turning to food stamps. And it underscores that across the country, few places are spared of the need for help.

(BEGIN VIDEOTAPE)

SNOW (voice-over): From the outside, these streets in Flemington, New Jersey, might be described as quaint and comfortable, but not far from these homes exists a very different reality. These people are lined up at a food bank in Flemington which serves Huntington County. The county has the wealthiest population in the state, with a median household income of nearly $98,000 a year. But Bloomberg News found Hunterdon has the highest increase of people now turning to food stamps among counties in the U.S. with more 65,000 people.

Janice Conlon is among these getting federal aid. She is also eligible to come to this pantry twice a month.

UNIDENTIFIED FEMALE: Who is the other adult?

UNIDENTIFIED FEMALE: My husband and we have a daughter.

SNOW: Janice works part time. Her husband is trying to set up a business after losing his job, but she never pictured herself coming here.

JANICE CONLON, FOOD PANTRY PATRON: It was the furthest thing from my mind. Like, five years ago, we adopted our daughter. You know, and then now, it's like I would never had thought I would be here. Never thought I would be here.

SNOW: The pantry's director says 30 new people come each month, replacing others who can no longer afford to live in the county.

MARYANN ISHAM, EXEC. DIRECTOR, FLEMINGTON AREA FOOD PANTRY: We're seeing a lot of people who never thought they would be here.

SNOW (on camera): Such as?

ISHAM: They've worked all their lives. They've retired. And now they find that they can't make ends meet. And there are people who used to donate to the pantry who now are coming to the pantry.

SNOW (voice-over): As of September, 46 million people were receiving food stamps. At the start of the recession in 2007, it was 27 million.

Stacy Lynn Dean of the liberal-leaning Center on Budget and Policy Priorities says this is the highest number in years past. STACY LYNN DEAN, CENTER ON BUDGET AND POLICY PRIORITIES: Another way to frame how many people are using the program is that in half the states, one in three children are participating in this program.

SNOW: Because this pantry is in New Jersey's wealthiest county, it also gets generous donations to keep it going. For that, Maryann Isham is grateful.

ISHAM: Here in America, there are people that are going hungry. And how can that be?

(END VIDEOTAPE)

SNOW: I should point out, New Jersey's the second wealthiest state in terms of income, and the number of people getting food stamps more than doubled there since the start of the recession, with a 24 percent increase in the last year alone -- Wolf.

BLITZER: Mary, are these numbers expected to rise?

SNOW: They're pretty staggering numbers. We talked to the Center on Budget and Policy Priorities, who keeps track of this. They said the rate of growth has slowed over the past two years, but this year, with 46 million Americans as of September on food stamps with some of the states like New Jersey, North Carolina, now seeing a rise -- you know, a significant rise in the past year or so.

BLITZER: It's hard to believe in this, the United States, the richest country on earth, nearly 50 million Americans need food stamps.

All right, Mary. Thanks very much.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: It's disgraceful.

The question this hour is: Could Fast & Furious eventually become President Obama's Watergate?

Rose writes in Arizona, "I think there's a good chance it could be Obama's Watergate. People have lost their lives because of this Fast and Furious escapade. It's serious, and it's not going to go away anytime soon. I think if it comes down to Obama taking any of the blame though, he'll throw Holder under the bus to protect himself."

Steve writes, "Well, I suppose it all gets down to the classic question, what did the president know, and when did he know it? Nixon was involved in the cover-up days after the Watergate break break-in. I doubt the same could be said of Obama."

K. in Oklahoma writes, "What does race have to do with criticizing either Eric Holder or President Obama? Absolutely nothing. Everybody knows Fast and Furious was initiated as a way to go after Second Amendment rights of the citizens to own guns. If you can blame the criminal activity in Mexico on guns bought in the United States, then you can legislate stiffer controls, perhaps even begin to disarm the citizenry. The reason Holder uses the race card is because he certainly can't defend his actions."

Jen in Seattle writes, "I think it could become his Iran-contra, but Watergate was about breaking and entering and cheating on an election."

Pete in Georgia writes, "Not a chance. Unlike past presidents, this current impostor was born with one exceptional talent: the ability to deceive. It's an art form with him. He'll never have to answer to any devious destructive act or agenda."

And Kenneth in California writes, "No. We lose 30,000 American lives a year in our culture of guns. It's no big deal since it's old Wild West, Dodge City all over the country every day of the year."

"Obama better get Fast and Furious on jobs. If not, that could mean his Waterloo, his Watergate, his Little Big Horn. It might even mean the election."

If you want to read more on this, go to my bloc, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: I'm still struck, Jack, by Mary Snow's report. Nearly 50 million Americans, including a lot of people who never in their lives thought they would need help simply to survive, are on food stamps right now. I'm not sure how to digest this, if you will.

CAFFERTY: I don't know either. But, you know, this squabble that's going on in Washington over extending the payroll tax cut, if that goes the wrong way, they could put another million people on food stamps starting in January, when middle class paychecks get -- what is it, a $1,000-a-year cut because these clowns in Washington can't come to an agreement on this stuff?

BLITZER: Yes. That's a good point, Jack. It's $1,000, $1500 for a family making $50,000 a year. That is a lot of money. You've got two or three kids, that is money they need. These members of the House and Senate, they need to get their act together and work out a deal before December 31st.

Jack, thanks very much.

CAFFERTY: Yes. Let's hold our breath.

BLITZER: Thank you.

If you're planning to send or receive a package this holiday season, beware. You're going to want to see Jeanne Moos. She's coming up next.

(COMMERCIAL BREAK)

BLITZER: If you're expecting that special something delivered this week, you're going to want to see this next report.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): 'Tis the season for packages. The next time you open one intact, be grateful this didn't happen to it.

This was a computer monitor tossed over a gate in southern California by a FedEx deliveryman. But then the surveillance camera video was delivered to YouTube. It made the news.

UNIDENTIFIED FEMALE: Oh!

UNIDENTIFIED MALE: Oh, no, no.

MOOS: And now FedEx is saying, "We have seen the video and frankly we were all shocked."

But that's not the only drop-off memorialized on YouTube.

UNIDENTIFIED MALE: Handle with care. Yes, just like that. Ground service. I get it. Ground. Throw the (EXPLETIVE DELETED) on the ground.

MOOS: And it's not just FedEx.

UNIDENTIFIED MALE: What can Brown do for you?

MOOS: UPS Brown can toss your package underhand. It can toss it overhand.

UNIDENTIFIED MALE: It's heavy.

MOOS: It can toss it like a "Hail Mary" touchdown attempt.

Fences and gates are the deliveryman's nemesis. As a driver posted, "From a delivery point of view, gates are hostile. Don't like it? Get rid of the gate."

The guys videoing this UPS deliveryman compared his technique to loading garbage.

UNIDENTIFIED MALE: Think there's anything that can be damaged in there? No.

MOOS: Of course it could be worse. At least they're not "Ace Ventura."

Of all the special deliveries we saw, none was more special than this by FedEx. There were sparks coming off the box, said the man who was shooting.

UNIDENTIFIED MALE: This guy has no idea that he's pushing an oven.

MOOS: As for the computer monitor heaved over the gate, the person who posted it says the monitor was broken, and it's sad, because he was home at the time if the deliveryman had just rung the bell.

(on camera): I'm sure what you're wondering is, does this guy still have a job?

FedEx tells CNN, "We have ID'd the employee involved. He is being handled according to our internal disciplinary policies."

UNIDENTIFIED MALE: Federal Express, when it absolutely positively has to be there overnight.

MOOS: They said overnight, not in one piece. But now that everyone has a camera, it doesn't pay for the delivery elves to get sloppy.

UNIDENTIFIED GROUP (singing): He knows if you've been bad or good, so be good for goodness sake

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: And that's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

To all of our Jewish viewers out there in the United States and around the world, Happy Hanukkah. They lit the National Hanukkah Menorah at the White House just a little while ago.

The news continues next on CNN.