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THE SITUATION ROOM

Payroll Tax Cut Battle Ends; Biden Attacks Romney; Obama In Hawaii; Ten Million Dollar Reward for Alleged Terror Sponsor; Suicide Bombings In Syria; Ron Paul Mailer Predicted Race War

Aired December 23, 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 ANCHOR: Happening now: The battle over extending the payroll tax cut ends with House Republicans abruptly giving into Democrats, but the fallout may just be beginning.

Also, Vice President Joe Biden goes on the attack against Mitt Romney, sparking a war of words with the Republican presidential candidates.

And North Korea in transition, but veiled in mystery. I was there on assignment exactly one year ago. I will share with you what I saw in the world's most isolated country during my six days in North Korea.

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

The showdown over extending the payroll tax cut lasted for weeks, but the stalemate ended in a matter of minutes today after House Republican leaders bowed to overwhelming pressure and gave into the Democrats.

Today, the House approved a bill that got almost 90 percent of support in the U.S. Senate. President Obama signed it into law and the threat of a New Year's Day hike hire for 160 million working Americans is over.

Let's go straight to our senior congressional correspondent, Dana Bash. She's watching all of this up on Capitol Hill.

It must be pretty empty right now, Dana. They got out of town pretty quickly, but it was exciting for a few minutes today.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: A few minutes. Underline the word minutes.

Look, there is a lot of relief here that this battle that consumed Congress in these final days is over, especially for House Republicans.

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The House will be in order.

BASH (voice-over): It was John Boehner's decision to back down and he backed it up by presiding over passage of a short-term tax cut that many GOP rank and file call a gimmick.

BOEHNER: The clerk will report the title.

UNIDENTIFIED MALE: HR-3765, a bill to extend the payroll tax holiday.

BASH: After taking a bruising political beating for a week over opposing a two-month extension to the payroll tax cut, the House approved it in under five minutes.

BOEHNER: Without objection, the bill is engrossed, read for a third time and passed.

BASH: Across the Capitol...

UNIDENTIFIED MALE: The Senate will come to order.

BASH: ... an even shorter session in the Senate.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I now ask unanimous consent that the House pass the Senate bill.

BASH: Sixty-five seconds to keep its end of the bargain, appoint negotiator to start work on a yearlong extension of the payroll tax cut.

UNIDENTIFIED MALE: The Senate will now stand adjourned.

BOEHNER: The House stands adjourned until 1:00 p.m. on Tuesday, December 27.

BASH: The "if you blinked you missed it" end to a rough-and- tumble year was good news for Americans hoping Congress would finally come together and prevent a tax increase, but left the speaker facing questions about his leadership.

REP. TIM HUELSKAMP (R), KANSAS: Well, I'm disappointed in our entire leadership team.

BASH: Many House GOP freshmen who were against the short-term tax cut extension feel sold out by Boehner, who announced he was relenting to the Democrats on a conference call with House Republicans, without allowing questions or criticism.

HUELSKAMP: I'm frustrated, but more importantly, I think most Americans are frustrated, the ones that elected a conservative majority in the House, like, well, what difference did it make? We have got a long ways to go.

BASH: It's been a recurring pickle for Boehner, a political pragmatist trying to please a caucus of new lawmakers who don't care about political consequences.

REP. ROB WOODALL (R), GEORGIA: What's hard in this town is doing the right thing when the politics are against you. It's easy to do the right thing when the politics are with you. The question is, what do you do when the politics are against you? The conference asked Mr. Boehner to take this stand and he took it. That is exactly the kind of leadership that he provides. It's not a one-man show here.

BASH: As the speaker walked off the House floor, a bipartisan moment, a handshake and kind words from a Democrat.

REP. STEVE COHEN (D), TENNESSEE: I feel sorry for John Boehner. Obviously, I'm a Democrat of the other party and support Nancy Pelosi for speaker, but I think he's a decent human being and he's got a caucus that's gone south on him.

(END VIDEOTAPE)

BASH: Now, the chaos that marked this final battle of the year may end up looking tame and orderly by next year, Wolf, because, of course, next year is an election year and the intraparty squabbles that we have seen, the partisan bickering, it is bound to escalate because of the fact that 2012 is very important to every single one of those House members, not to mention the guy living down Pennsylvania Avenue.

BLITZER: And one of the stories you're going to have to cover is this fight, the disappointment within Republican ranks itself as far as speaker is concerned because that disappointment -- you saw some of it in your piece -- is very significant.

BASH: Oh, there's no question about it. It has been very hard for him to kind of walk that tightrope, keeping people happy inside his caucus. And, you know, there certainly was a lot of grumbling as the year went on and it spilled over as this year ended. And it will be very interesting to see how that plays out next year when everybody comes back.

BLITZER: Dana, thanks very much.

After signing the bill, President Obama appeared in the White House Briefing Room rather briefly saying -- and I'm quoting him now -- "This is some good news just in the nick of time."

He also noted the pressure House Republicans were facing.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I promise you, the American people, your voices made a difference on this debate. Whether you tweeted or called or wrote, you reminded people in this town what this debate and what all of our debates should be about. It's about you. it's about your lives. It's about your families.

(END VIDEO CLIP)

BLITZER: Our chief White House correspondent, Jessica Yellin, is joining us now with more.

Jessica, a short-term victory certainly for the president, but he's going to try to build on it. JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: I think, yes, Wolf, this is more than a short-term victory for the president, because the way that this tax fight unfolded was almost a real-life enactment of the campaign narrative his team has been trying to build since September.

Let's remember the message the president has been delivering since he delivered his jobs speech in September. One, he has been arguing that he is a fighter for the working class, for the middle class, defending working Americans. And he repeated that message in his remarks today. Listen again briefly.

(BEGIN VIDEO CLIP)

OBAMA: We have a lot more work to do. This continues to be a make-or-break moment for the middle class in this country. And we're going to have to roll up our sleeves together, Democrats and Republicans, to make sure that the economy is growing and to make sure that more jobs are created.

(END VIDEO CLIP)

YELLIN: So, one, fighter for the working class. Two, he's argued that Congress is dysfunctional, standing in the way of policies that could improve the economy.

The challenge with that message is, he has been locked in battles with Congress in which both sides have been to blame. Well, that changed this week because House Republicans handed him a fight in which, clearly, there was a gridlocked Congress on one side and he clearly was standing with working Americans against the gridlocked Congress.

So they gave him an opportunity to turn his campaign narrative into a real-life drama. It is more than the White House could have hoped for, Wolf.

BLITZER: So, he wins this round, but in the aftermath of this fight, Jessica, what do we expect from the White House going into the new year?

YELLIN: Next year, expect more of this "we can't wait" events where he enacts executive actions, things that the White House can do on its own without Congress.

Expect them to engage in the fight to figure out how to extend the payroll tax cut for a full year and pay for it in a way that the White House thinks is responsible. And expect them also to push for more elements of that jobs package to pass.

Keep in mind, Wolf, the White House and president knows that he will ultimately be judged on how well the economy is doing and that, to some extent, is out of the president's control. And, for Republicans, that also is what they think is the final -- is what he finally also will be judged. On and for them, that is in their view, good news. BLITZER: Yes. And a lot of economists say keeping this tax cut going for another year and the unemployment benefits, that will help the economy, which politically will be important for the president as well. Jessica, thanks very much.

With the deal wrapped up, the president heading to Hawaii right now to join the first family for a little Christmas vacation.

Our White House correspondent, Brianna Keilar, is already in Honolulu. She's getting ready to receive the president.

What awaits President Obama once he gets there, Brianna?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Wolf, of course he's going to be having some fun, but he will also be doing some work.

And I have to say pardon the interruption. The University of Nevada marching band is actually playing on the beach behind me because there are sporting events here over Christmas and the football team is going to be playing on Christmas Eve.

So, of course, this is a working vacation for President Obama. One of the big concerns always would be some sort of terrorist threat or some sort of attack. That became a very real possibility in 2009 with the attempted bombing on that airliner going into Detroit, the so-called underwear bomber.

And of course that means that President Obama is always vigilant, as he is when he is in D.C. He will be receiving his national security briefing every day, either in person from a member of his national security team, or he will get it in writing. But, also, there's this issue of recess appointments, something that the White House seemed to be considering, but now we know that Congress is in pro forma sessions.

And that means that he won't be able to do that, Wolf, but we also know that President Obama has said in particular for the appointment or his nomination of Richard Cordray to that Consumer Financial Protection Bureau that was recently created, an appointment the president considers very important, because this agency cannot regulate some of those financial products that were very much at the heart of the financial meltdown, can't do that without a director.

President Obama has said that all options are on the table. And some have raised the possibility that maybe as Congress goes from its last session into the next, that there would be a way to do some sort of appointment. That is something that may also be on the president's mind during his vacation, Wolf.

BLITZER: Love the music. Brianna, can photographer over there get a shot -- that's the University of Nevada marching band, you said?

KEILAR: I don't know.

Peter, can you get a shot of the band or is it too far down? I don't know that you can, Wolf. Actually, I think we're in a place where we're kind of locked down, but, yes, a lot of people are here. They're on vacation, and they're having a lot of fun. And, of course, President Obama, Wolf, is going to be having some fun as well. He's come out here now for several years, always doing some of the really typical vacation things.

He's gone out in the past for a shave ice with his daughters, a traditional Hawaiian treat. And, you know, of course, that he will be golfing. This is Oahu, where he grew up and actually learned to golf. And he will be reconnecting, no doubt, with some old friends and playing some golf, although, at this point, there aren't any public events on his schedule. We expect to be seeing him doing some of those typical vacation activities.

BLITZER: We will check in with you every single day, Brianna. Thanks very much, Brianna Keilar, on assignment in Honolulu for CNN.

Let's bring in our chief political correspondent, the host of "STATE OF THE UNION," Candy Crowley, who is working.

That's a tough assignment to be out in Hawaii for a week covering the president.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: But you know I and know that everybody says, big deal, they're out in Hawaii, but you're always calling because you're thinking that something's going to happen and you will be sitting on the beach. So you get a lot less beach time than you think you might.

BLITZER: I have been there and done it. I was in Hawaii with President Clinton. And I worked hard even though everybody was always making fun of me: You're in Honolulu. You're surfing. You're having a good time.

I worked pretty hard.

CROWLEY: Right.

BLITZER: All right, let's talk a little bit about what's happening in Washington. You saw that headline there, and I'm going to put it up behind you in "The Washington Post" this morning.

"House GOP Surrenders on Payroll Tax Cut." That's the lead headline in "The Washington Post" today. You don't often see a headline like that.

CROWLEY: No, it's not always as clear-cut as it was.

And one of the things that the speaker, John Boehner, said in that press conference when he came out and said, OK, it's done, we have got an agreement, was it probably wasn't good politics. And you know what? He was right. It was not good politics.

(CROSSTALK)

BLITZER: That was an understatement, yes.

CROWLEY: This was a loser for them. It really was.

And, you know, the question is do these headlines follow the GOP into next year?

BLITZER: Do they?

CROWLEY: They have got to change the storyline here. They're going to have another fight about this very same issue. Can they turn it on its head somehow?

BLITZER: But, politically, it's hard to tell 160 million working Americans, you know what? We're going to raise your taxes. Even though the economy is in bad shape, we're going to raise your taxes right now.

(CROSSTALK)

CROWLEY: And even though we have been saying all along we're not going to raise taxes, and it's the worst thing to do when the economy's in bad shape. So, no, I don't think the bottom line is in doubt. The question is, what's attached to it?

One of the ways they got Republicans on the Senate side on board for this two-month deal was putting on the pipeline deal that so many of the Midwestern senators want.

BLITZER: From Canada to Texas.

CROWLEY: From Canada to Texas. And forcing the president to make a decision. We will see how wise a move that was by Republicans.

But, nonetheless, the big battle is going to be how are they going to pay for this, and that's where Republicans hope to make some inroads into cutting spending.

BLITZER: How much damage has there been to the speaker, John Boehner's reputation, shall we say, leadership right now?

CROWLEY: Listen, one of the things we have known about John Boehner ever since this new Congress was sworn in was that he has a caucus that doesn't listen to him. This is not your grandfather's politics anymore.

This is a bunch of people in the -- who have been elected by Tea Party supporters, most of whom, the freshmen anyway, had previous lives with jobs and they don't -- as I think somebody earlier said, they don't follow the regular political pattern such as your speaker -- take this one for the speaker. They don't do that.

But he also has a lot -- he's made friends up there. He has been up there a long time. He knows how to play this game and he does have friends in that Republican Caucus. It's damaging. They are angry at him, but the fact of the matter is, what they don't get, and this is what's so frustrating to other Republicans who knew they were getting bashed, is that what they don't get is that you can't win with 40 freshman Tea Party members. You need more than that on Capitol Hill.

BLITZER: I remember when Tip O'Neill was speaker. Can you imagine a freshman Democrat going on television and criticizing? Any earmarks that he would have been looking for or she would have been looking for gone.

CROWLEY: That's right.

BLITZER: Candy, see you Sunday morning, "STATE OF THE UNION," 9:00 a.m. Eastern, a special "STATE OF THE UNION" this Sunday.

CROWLEY: Yes.

BLITZER: Thanks very, very much.

A prediction of a race war in an old solicitation with Ron Paul's apparent signature on it -- details of a new controversy confronting his campaign.

Also, the growing role of candidates' wives in the race for the Republican presidential nomination. Can they help win votes for their husbands?

Plus, details of the huge reward the U.S. is offering in the hunt for a terrorist financier hiding in Iran.

(COMMERCIAL BREAK)

BLITZER: American authorities are stepping up efforts to catch a Syrian man they say is one of the top financiers of international terrorism.

Our Pentagon correspondent Barbara Starr has been digging the story for us. She's joining us now.

Barbara, what's the latest on the efforts to track down and capture this man?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, the administration is going after this new link between al Qaeda, Iran and this Syrian born financier. It's a network that the U.S. is making new moves to bust up.

(BEGIN VIDEOTAPE)

STARR (voice-over): Twenty-nine-year-old Syrian born Yasin al- Suri hiding out in Iran now has a $10 million bounty on his head. For the first time, a terrorist financier is in the U.S. crosshairs.

ROBERT A. HARTLING, STATE DEPARTMENT: Locating al-Suri and shutting down his operations would eliminate a significant financial resource for al Qaeda.

STARR: Suri is accused of operating a major network inside Iran. The U.S. says he's moving cash from Middle East donors through Iran and into the hands of al Qaeda in Afghanistan and Iraq.

The U.S. also alleges he transports al Qaeda operatives from the Middle East into Afghanistan and Pakistan. The U.S. believes Iran has sheltered al-Suri since 2005 and knows exactly what he's up to.

EYTAN FISCH, TREASURY DEPARTMENT: Al-Suri works with the Iranian government to secure the release of al Qaeda operatives held in Iranian prisons. Once released, the Iranian government transfers the prisoners to al-Suri, who then helps them transit to Pakistan.

STARR: The $10 million reward matches what the U.S. is offering for Mullah Omar, the head of the Afghan Taliban. Only Ayman al- Zawahiri, the man who replaced Osama bin Laden as the leader of al Qaeda has a bigger price on his head.

For $10 million, the U.S. wants al Suri's location inside Iran.

HARTLING: Once we receive information to handle that information and decide how to act.

STARR: The reward is just the latest example of U.S. concerns about Iran's interference in Pakistan and Afghanistan.

At a recent breakfast meeting, the U.S. ambassador to Afghanistan made clear he's closely watching growing Iranian influence.

RYAN CROCKER, U.S. AMBASSADOR TO AFGHANISTAN: The message they're sending to the Afghans is watch out. Little muscle flexing, but we can do worse.

STARR: Crocker again warns Iran not to cause trouble.

CROCKER: They're wise not to do that because I think they'd get a pretty punishing response.

(END VIDEOTAPE)

STARR: Now, the hope here is by exposing this al Suri network, they cannot only bus it up, but again, end Iran's -- or at least try and control Iran's meddling in both Pakistan and Afghanistan. But, Wolf, they have tried this before and it hasn't worked -- Wolf.

BLITZER: Thanks very much, Barbara Starr, at the Pentagon.

After a series of violent protests, thousands more Egyptians are taking to the streets. We're going to take you there for an update.

Also, the vice president, Joe Biden, moves into his role as Obama campaign attack dog. We're going to tell you what he's doing in Iowa.

And several spouses of Republican presidential candidates are featured in brand new campaign ads. We're taking a closer look at what they're saying and the unspoken message.

(BEGIN VIDEO CLIP)

ANITA PERRY, GOV. PERRY'S WIFE: We grew up in small towns, raised with Christian values -- values we still believe in. And we know Washington, D.C., could use some of that.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I'm Rick Perry and I really approve this message.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Mary Snow is monitoring some of the other top stories in THE SITUATION ROOM right now.

Mary, deadly suicide bombings in Syria turning into another flash point between various sides there. What's the latest?

MARY SNOW, CNN CORRESPONDENT: Wolf, U.S. officials are concerned the attacks will distract Arab League observers. Both car bombs hit outside security branches in Syria's capital, Damascus, killing 44 people. The government says the attacks had all the markings of al Qaeda. Now, opposition forces say they were the work of the Assad regime, which wants the Arab League to believe it's fighting terrorists.

Thousands of demonstrators in Cairo are demanding that the Egyptian army give up power to its civilian government. The move comes on the heels of terrible clashes with Egyptian authorities that left 16 people dead.

Prince Phillip, the husband of British's Queen Elizabeth, is in a hospital after suffering from chest pains. The duke of Edinburgh who turned 90 in June is undergoing precautionary tests at Papworth Hospital in Cambridge. That's according to Buckingham Palace -- Wolf.

BLITZER: Let's hope he's OK. Mary, thanks very much.

The vice president, Joe Biden, on the attack today. He's targeting Mitt Romney in a stinging op-ed. And now, Romney is firing right back.

Plus, a woman's touch in this presidential. Some candidate's wives are taking on a bigger role.

(BEGIN VIDEO CLIP)

CALLISTA GINGRICH, NEWT GINGRICH'S WIFE: From our family to yours, merry Christmas and happy New Year. I'm Callista Gingrich.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: His official title is vice president of the United States. But Joe Biden also President Obama's campaign attack dog, at least on this day. And now, the White House is putting him on the candidate they believe is the president's strongest Republican challenger, Mitt Romney.

CNN's Joe Johns is working the story for us.

All right. What's going on here -- this fight today between Joe Biden and Mitt Romney?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Very sharp words. You can tell we're getting pretty close to the Iowa caucuses. Mitt Romney had a few hard knocks lately, Wolf, as the lead has changed hands every couple of weeks or so. But as the Christmas holidays slowdown approaches, he's still a huge factor in the race while some of the others have lost traction.

(BEGIN VIDEOTAPE)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: We have to grow --

JOHNS (voice-over): Now that the Newt Gingrich boomlet has started showing signs of fading, Mitt Romney is thrust back into the spotlight. He's getting pressure from all sides. A lot of it thanks to some powerful newspapers. New Hampshire's "Union Leader" slammed Romney for what it called an arm's length style of campaigning, doing events with seemingly scripted questions to which he gives well- rehearsed answers, taunting him to debate Gingrich, who happens to be the guy the "Union Leader" has already endorsed.

And in Iowa, where some of the latest polling suggests Romney, Gingrich and Ron Paul are statistically tied for the lead, it was Romney who was being singled out for special attention from the Democrats.

After mostly walking softly on the sidelines of the Republican fight, the incumbents in the White House whipped out their big stick, giving a couple of holiday whacks to the main guy they see now as a potential threat next November. The opinion essay in the Democrat- leaning "Des Moines Register" under the byline of Joe Biden himself ridiculed Romney's vision of a so-called "opportunity society," charging that Romney appears satisfied to settle for an economy in which fewer succeed, while the majority of Americans are left tread water or fall behind.

Romney calling the piece in the newspaper, a Joe Biden gaffe.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Someone had written at op-ed in the "Des Moines Register" attacking me and blaming me for the economy.

And I thought, now who would have the -- the chutzpah, there you go, the delusion to imagine that I was responsible for the decline of this economy over the last three years?

And it was none other than Vice President Joe Biden and -- another gaffe, exactly right. And you wonder in some respects what fantasy land he lives in.

JOHNS: This gift of a photo op was the latest opportunity for Romney to behave before the cameras as if he's the nominee before the first vote is even cast, but he got even better news from none other than former president, George Herbert Walker Bush, who told a newspaper in Texas that Romney's the party's best choice.

(END VIDEO CLIP)

JOHNS: Gingrich and President George Herbert Walker Bush apparently had a disagreement in 1990 over a budget deal the president was supporting while Gingrich was in the congressional minority.

Among other things, this was yet another reminder that some of the Republicans who shared power in Washington with Gingrich in the '90s are not exactly clamoring to jump on his band wagon -- Wolf.

BLITZER: All right, Joe, thanks very much. Let's dig a little bit deeper right now in our "Strategy Session." Joining us, the Democratic strategist and CNN contributor, Maria Cardona, and the Republican strategist, Terry Holt.

Guys, thanks very much for coming in. I was surprised that Joe Biden, the sitting vice president of the United States, has gone ahead and written this tough op-ed in the "Des Moines Register" blasting Romney. Isn't that why God created people like David Axelrod to do that kind of stuff, the vice president?

MARIA CARDONA, CNN CONTRIBUTOR: I actually think it makes total sense, Wolf, because look, the vice president from day one has been the head of the middle class task force for this administration.

He's sort of acting as the spokesperson for the middle class and what this administration is doing and fighting for the middle class and then putting them first.

Actually, that aggressive nature about defining what this next election and what this administration is fighting for has worked for them. The barn storming that the president has done on the American Jobs Act to try to create millions of jobs for Americans.

We saw it in the payroll tax cut and now, they're going to continue that and especially when you have Romney hitting this president over and over on jobs and he's wrong.

BLITZER: I was just surprised. It's happening so early. I would assume the vice president would get into the fray later, but it's a little early to do that, don't you think?

TERRY HOLT, REPUBLICAN STRATEGIST: It is. It reminds me of, you know, all of us have kind of a quirky relative who shows up at Christmas and you're not sure you want them there. It spoils the party.

Well, I mean, I don't get this. This is a strange move by the Democrats and by the White House to put Joe Biden into the Iowa caucuses at this point. Nobody's going to pay attention to what he's saying.

This is a fight among Republicans, about Republican nominations. The race is wide open in Iowa, but I tell you, I don't think Joe Biden has a chance of becoming the Republican nominee.

CARDONA: Those quirky relatives sometimes actually tell the truth and unfortunately, for the Romney and the other GOP candidates that truth is a little uncomfortable when it comes to the middle class.

HOLT: Yes, but to diminish the power of the incumbency of the White House. When the Republicans are having an affair of their own in Iowa to bring the vice president down to that level, I think is a mistake.

BLITZER: It does underscore what Joe Johns just said, that the White House is now once again the Obama campaign coming under assumption that Romney's is most formidable Republican challenger out there and they've got to start beating him right away.

HOLT: I think it is, but you don't attack Romney in the middle of the nomination process. You're helping him because elected by doing that.

CARDONA: Well, what's interesting is that Romney thinks he is going to be the presumptive nominee. He's acting that way by attacking the president. And what we've seen in politics and you know this than anybody, Wolf, is you have to defend your record.

What's interesting about this op-ed, yes, he starts talking about Romney, but the fact is, you can paint a broad brush stroke on any of the GOP candidates and they will all be absolute failures for this middle class.

BLITZER: What this does underscore to me, at least a little bit. I'm anxious to get your sense, the fact that Joe Biden has written this op-ed in the "Des Moines Register" going after Romney even before there is a nominee right now.

It sort of underscores to me, he's going to be on the ticket. All this speculation out there that he's going to be dumped and Hillary Clinton's going to be brought in an active desperation, I don't think that's necessarily going to happen. What do you think?

HOLT: Not a chance. He serves a valuable function. He can get out there on the fringe and say extreme, crazy things. The president can remain presidential. I think he's there for good.

CARDONA: I think that's exactly right and again, you see somebody, Joe Biden, who was so credible when he talks about the middle class. He comes from the middle class. I think what you're going to see is he's going to continue to talk about that.

BLITZER: Did you see the news from Donald Trump today?

HOLT: What was that?

BLITZER: My God, he's no longer a Republican. He is now un- affiliated, a statement saying he's not sure if he's going to be able to run if he doesn't like the Republican nominee. He is no longer affiliated with the Republican Party. He's an independent.

HOLT: That's just too bad. I'm heartbroken, but I can't follow the Trump ticker 24/7. Every time he makes a statement, it's dramatically different thing from it was the last time. I think that underscores the wisdom of the decision he made not to run.

BLITZER: He's not going to make his mind up until he sees who the Republican nominee if he could support it, but B, until the season of "Celebrity Apprentice" is over with in mid-May. He wants to make sure there's no conflict there because the broadcast rules.

CARDONA: Right, but the speculation I think would just be too good for Democrats. I think it would be way too much to give us yet another gift during this holiday season to think that Trump will run as a third party candidate.

HOLT: I think it's not out of the question. He could join the Democratic Party and challenge Barack Obama for all that we know about his political agenda.

BLITZER: I don't think so. I don't think that's going to happen. All right, guys, stand by for a moment. We got more to discuss.

Next week by the way, I'll be anchoring THE SITUATION ROOM from Iowa. We'll have two major interviews lined up for you. On Tuesday, I'll be speaking with Newt Gingrich. On Wednesday, Mitt Romney, I'll go one on one with both candidates as we count down to the January 3rd Iowa caucuses. We'll be in Iowa next week.

Also, "Six Days In North Korea," a special edition of THE SITUATION ROOM coming up right at the top of the hour. I'm going to share what I saw there on assignment. Standby for that.

But up next, a new controversy facing Ron Paul, an old direct mail solicitation with his signature that talks about a race war and more.

And the women behind the men, what the wives of the Republican presidential candidates are bringing to the campaign.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: From our family to yours, Merry Christmas and Happy New Year. I'm Calista Gingrich.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: A race war, a homosexual cover up, a government conspiracy theory. They're all mentioned in an old direct mail solicitation for Ron Paul's newsletters that just come to life.

Now, his campaign is facing a new series of questions on what is clearly a sore subject for the Republican presidential candidate.

Brian Todd is working the story for us. Brian, what do we know about this old Ron Paul mailer?

BRIAN TODD, CNN CORRESPONDENT: Wolf, it contains some very, very controversial language. As he surges in the polls before Iowa, Ron Paul again, having to defend himself over language in a letter written on his behalf.

We've reported this week and in previous campaigns how Ron Paul has disavowed those newsletters with his name on them. Newsletter from the '80s and '90s with racial insults toward African-Americans and others.

Now with those newsletters, Paul said he didn't write them, didn't know who did, and that he rarely read them. Now we're learning of a solicitation letter for those newsletters not only written on Paul's behalf, but with what appears to be his signature on them and the language is incendiary.

In the direct mail letter, it warns of quote, "the coming race war in our big cities." It mentioned quote, "the federal homosexual cover-up on AIDS."

Then in brackets says, my training as a physician helps me see this one. It references quote, "the Israeli lobby, which plays Congress like a cheap harmonica." The letter is an effort to get people to send in money to subscribe to three newsletters put out by Paul, including one called "Surviving the New Money."

Where they layout what they say is this government conspiracy to track people through new currency. But unlike those newsletters, you've got to take a look at this next item. The solicitation letter has Paul's signature on it, possibly indicating a closer connection to what's written on it.

The Reuters news agency, which reported on this and obtained a copy of the letter says this solicitation was written around 1993. Reuters says it got the letters from James Kurchick, contributing editor of "The New Republic" magazine.

We contacted Ron Paul's campaign. In an e-mail to CNN, campaign chairman, Jessie Benton said quote, "Dr. Paul did not write this solicitation and the signature is an auto pen. It does not reflect his thoughts and is out of step with the message. He has disavows for 40 years."

The campaign says Paul disavows the letter. He implores that kind of content. They say there were multiple ghost writers involved in writing all of these letters and that Paul does not know who wrote the offensive material.

But the campaign says because they appeared under his name, quote, "he should have better policed it and that he assumed responsibility and he has apologized." This is in the context of all those newsletters -- Wolf.

BLITZER: Does the campaign say it will try to find out who wrote that letter? TODD: I e-mailed the campaign back today asking if they will try to find out who it was and if they are going to admonish that person. I have not heard back yet.

In 2008, it's worth noting, when we reported on the newsletters, the campaign at that time said it would not try to find out who wrote them. The campaign said at that time, what's the point, it's time to move on. Maybe they were under a little more pressure this time. Maybe they will try to find out who wrote them. Right now, no indication of that.

BLITZER: Even in his response to the reporting on this latest letter, Ron Paul is going after the news media right now, isn't he?

TODD: That's right. In that e-mail back to us, the campaign says it is legitimate that he answer questions about all this, but it said in its e-mail to me quote, "there is a line that's being crossed by some in the press with the aggressiveness with which they put the story."

They say some in what they call the establishment are timing these attacks in an attempt to stop Ron Paul's momentum. So they are attacking the media and others for going after him on these matters, but clearly questions he's going to have answer, Wolf, in the days ahead.

BLITZER: If you'd become frontrunner in the race for the Republican presidential nomination, everything seems to be open for discussion. Brian, thanks very much.

Let's get back to Democratic strategist, Maria Cardona, Republican strategist, Terry Holt. What do you make of this? Because in the last few days, all of a sudden, we reviewed it four years ago, but all of a sudden it's coming back. What do you make of this?

HOLT: Well, it comes back because of a lot of Ron Paul's appeal is coming from new voters. Aggressive, attentive activists that are fairly new to the Republican Party that don't know a lot about the old Ron Paul.

We've known about a lot of this stuff for a long time. As a libertarian candidate back in the '80s and '90s, he was a national figure. He was on the ballot and he had an aggressive fund raising operation. That was why he was able to win a seat in the Congress in 1996.

Because he had big national money and he was able to control that race. I think at this point, it's going to be interesting to see what his supporters do. A lot of times, when attacks like this come, the most aggressive activists actually harden their support for their candidate.

And it might not have that much effect on Ron Paul's support in Iowa, although down the line, I think stuff like this is very damaging.

BLITZER: A lot of Ron Paul supporters have said to me this is opposition research from Republicans because they're scared of him so they're dredging up all this ancient history.

CARDONA: I think Terry's right in that this for Ron Paul supporters is going to make them budge because they're going to see it as a conspiracy from the media or from his rivals on the right.

But I will say that this new newsletter with his signature could be a problem. Will it be a problem in Iowa? Probably not. Not because they're so few days left and it's the holidays, people aren't really paying attention to all of this.

But if he comes out of Iowa as a more, quote/end quote, "credible candidate," this is going to be an issue for him that will hurt him.

BLITZER: But in fairness to Ron Paul, I've interviewed him many times over these recent years, the last four years, eight years. He's never suggested anything as occurred in those newsletters or in that letter.

And all the interviews, he's got his own views on foreign policy and all of that, but conspiratorial theories and race wars, and stuff like that, he's never spoken about that in recent years.

HOLT: Because it doesn't match the profile people see of him or becoming -- and as he becomes well-known. He comes across as a soft figure. He's an older guy.

He isn't the kind of profile that you would expect of that and the fact that this is direct mail fund raising, it's inappropriate. It's language over the line, but it comes from a different time and different era, and he may be able to separate himself.

CARDONA: That he should come out and to completely disavow it because I think you're right, he hasn't said that recently.

BLITZER: All right, Merry Christmas. Happy New Year. We'll be spending a lot of quality time together in the next several weeks. Thank you.

Let's get back to the battle of the candidate's wives right now. Several Republicans spouses are featured in brand new campaign ads. We're looking at the scripted words and unspoken messages to voters.

Mary Snow is joining us right now. She's got more part of the story -- Mary.

SNOW: Wolf, three spouses are taking the spotlight in new campaign ads. All these kinds of ad often aimed to show the softer side of the candidates. There are not so subtle messages behind them.

(BEGIN VIDEOTAPE)

SNOW (voice-over): We're used to seeing them by their husband's sides. Now, the wives of the Republican presidential hopefuls are taking center stage in campaign ads like this one called character for Ann Romney praises her long time spouse, Mitt. ANN ROMNEY, WIFE OF MITT ROMNEY: And if you really want to know how the person will operate, look at how they've lived their life. I think that's why it's so important to understand the character of a person. To me, that makes a huge difference.

SNOW: In the ad, you see the Romneys. But political watchers say it's not just about them. It's really about someone who's not in the ad at all.

PATRICIA MURPHY, CITIZEN JANE POLITICS: Her theme is my husband is trustworthy. Newt Gingrich is not trustworthy. It is a very, very clear play here, that they are contrasting his long time, one-woman marriage with Newt Gingrich's short term three women marriages and also his infidelity in his marriages.

SNOW: Mitt Romney denies the ad is about contrasting anybody. Saying it's about personal background. Long time marriage is also a theme in this ad by Rick Perry's wife, Anita, who speaks glowingly about marrying her high school sweetheart. The ad is seen as targeting the party's conservative base.

ANITA PERRY, WIFE OF RICK PERRY: We grew up in small towns, raised with Christian values, values we still believe in and we know Washington, D.C. could use some of that.

SNOW: Then, there's Newt and Callista's Christmas greeting, in which Callista Gingrich makes her first appearance in an ad.

CALLISTA GINGRICH, WIFE OF NEWT GINGRICH: From our family to yours, Merry Christmas and Happy New Year. I'm Callista Gingrich.

SNOW: Game changers? Maybe not. With the Iowa caucuses less than two weeks away, candidates are scurrying to reach an audience where family makes a difference.

RUTH MANDEL, EAGLETON INSTITUTE, RUTGERS UNIVERSITY: They're targeted to families and certainly, they're targeted to women because reassuring voters in Iowa that he's a good guy and he's a family man has a lot of resonance for women.

(END VIDEOTAPE)

SNOW: There are some spouses who are seeking a lower profile. In the case of Ron Paul, he leaves it to his son, Senator Rand Paul, to speak for the family in a new ad set to run in Iowa and New Hampshire -- Wolf.

BLITZER: Thanks very much, Mary, for that. Here's a closer look at some of the other political headlines making news on the CNN Political Ticker.

The Republican presidential hopeful, Rick Santorum, is unveiling a new ad that uses text pop-ups to highlight his social conservative credentials. It's fashion like VH1's pop up videos from the 1990s and tells Santorum's personal and professional history through the text pop-ups super imposed over a footage of the candidate and his family.

It begins running in Iowa next week. By the way, here's a preview. Very clever. New polling shows the economy is still the number one issue as we get ready to head into the new presidential election year.

A brand new CNN/ORC poll shows 57 percent of Americans see the economy as the most important issue facing the most important issue facing the country. The deficit came in distant second at 16 percent. Just over half of those polls say unemployment is America's biggest problem.

For complete political coverage, please be sure to go to cnn.com/ticker. Good place for political news.

You probably thought you were safe to talk on the phone while driving as long as you were using a hands free device, but you might be wrong.

We have a report on a growing debate. And then, a special SITUATION ROOM documentary chronicling my extraordinary trip to North Korea, "Six Days In North Korea." That's coming up right at the top of the hour.

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BLITZER: As millions of Americans hit the highways this holiday, many of them with their cell phones, a new debate is unfolding here in Washington over just how dangerous the devices could be even, even when a driver has both hands on the wheel.

Let's bring in CNN's Athena Jones. She's got details. What's going on here, Athena?

ATHENA JONES, CNN CORRESPONDENT: Well, Wolf, as you mentioned, AAA says that almost 92 million people will travel 50 miles or more during the holidays. Many of those people, about 90 percent, will be driving and of course, as we all see when we're driving in cars, many could be talking on cell phones.

The recent NTSB announcement recommending a ban on all cell phone use has raised important questions about new hands free technology and whether it is in fact safer.

Transportation Secretary Ray Lahood says safety efforts should be focused on hand held phones. So we thought we take a closer look at the issue.

(BEGIN VIDEOTAPE)

JONES (voice-over): Cell phones, iPhones, bluetooth, iPads, when it comes to distracted driving, the question is where to begin. Judy Teater's 12-year-old son, Joe, was killed when a young woman talking on her cell phone ran a red light. She shared her story as part of the Transportation Department's campaign again distracted driving. JUDY TEATER, "THE FACES OF DISTRACTED DRIVING" CAMPAIGN: Parents don't understand when they hand their kids a cell phone, they're handing them a lethal weapon.

JONES: Distracted driving of all types killed more 3,000 people in the United States last year, but just how dangerous is hands free technology?

Plenty, says the National Transportation Safety Board. They're calling for a complete ban on the use of devices by drivers both handheld and hands free unless they're built into the car.

DEBORAH HERSMAN, NATIONAL TRANSPORTATION SAFETY BOARD: Many times, the distraction there is not just one that's about manipulation of something or a visual distraction.

It's about a cognitive distraction. It's about not being engaged in the task at hand. We know human beings have a difficult time focusing on one task and maintaining vigilance.

JONES: The Transportation Secretary Ray Lahood says the focus should be on hand held devices.

RAY LAHOOD, TRANSPORTATION SECRETARY: The problem is not hands free. That is not the big problem in America.

JONES (on camera): According to a 2009 study by the Virginia Tech Transportation Institute, drivers who dialed cell phones were nearly three times as likely to have a crash or near crash as non-distracted drivers.

But true hands free use like using voice activated technology is less risky, as long as drivers don't have to take their eyes off the road frequently or for long periods of time.

(voice-over): Some 35 states and Washington, D.C. banned texting messaging while driving while nine states and D.C. banned drivers from using hand held cell phones while driving.

Some states ban hands free devices for certain drivers like young drivers and bus drivers, but no state bans all cell phone use for all drivers. That report is due out late next year.

(END VIDEOTAPE)

JONES: Now, the Virginia Tech Transportation Institute recommends a ban on all hands free, hand held devices and says true hands free devices are OK for everyone, but newly licensed teen drivers. In fact, they recommend a ban on all wireless devices including hands free for drivers who are under 18 -- Wolf.

BLITZER: A lot of these recommendations are in fact just recommendations. There's no indication any of this is going to become federal law.

JONES: Absolutely and there's still a lot of debate. As I mentioned, there's going to be a new study coming out late next year by the NHTSA, so that could come with new recommendations.

The real issue in part of this debate over hands free versus hand held is whether you're just as distracted by a phone conversation with someone who's not in the car as you are with someone who is in the car.

And the NTSB argues that someone who is in the car with you is paying attention to the environment. They know what's going on around you. So that's a lot less dangerous than talking on the phone.

BLITZER: Athena, thanks very much. Merry Christmas to you. Merry Christmas to all of our viewers. Coming up in our next hour, my special documentary "Six Days In North Korea."

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