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Obama Appoints Consumer Watchdog, Defying Senate Republicans; Analysis of Iowa Caucuses; South Carolina: We Pick Winners; No Perfect GOP Candidate

Aired January 4, 2012 - 17:00   ET

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


BLITZER: Let me start with Edith.

Edith, thank you so much. On behalf of all of us, on behalf of the American people, we want to thank you for clearing up this mystery.

Tell us how you feel right now, Edith.

EDITH PFEIFFER: I am just overwhelmed with all of this.

(END VIDEO TAPE)

SYLVESTER: And I spoke to the Iowa GOP office today. You know, they are still trying to figure out exactly how the snafu happened. Edith Pfeiffer (ph) says, you know, her people called in the numbers. She thought everything was OK, so, of course, she headed off to bed. And we all know what happened next -- Wolf, and, by the way, it looked like you guys were having a fantastic time there yesterday.

WOLF BLITZER, HOST: Two wonderful women, indeed. And I want to thank them once again.

Thank you, Lisa, to you, as well.

And to our viewers, you're in THE SITUATION ROOM.

Happening now, Mitt Romney admits his first win was a squeaker, but a big endorsement by his party's previous nominee may give him a boost in New Hampshire and beyond.

Rick Santorum wrote his family values theme to an extraordinary finish in Iowa. We're taking a closer look at his own very compelling and controversial family story. We'll hear directly from his brother.

And the Republican candidates have been pounding away at President Obama. This hour, the White House gets a chance to answer back.

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.

The stunning Iowa cliff-hanger is already in the candidates' rearview mirrors. One GOP hopeful has fallen by the wayside and the leaders are now in New Hampshire. They are scrambling for an edge in next week's first in the nation primary.

After the narrowest of victories -- yes, only eight votes -- Mitt Romney picked up a big endorsement from the 2008 Republican presidential nominee, Senator John McCain.

Let's go straight to CNN's Jim Acosta.

He's in New Hampshire getting ready for next Tuesday's primary.

What's the latest, over there -- Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, it was one spot that a Mitt Romney win in Iowa would make him almost impossible to beat for the GOP nomination. But an eight vote squeaker was not what Mitt Romney had in mind. So it just might be game on here in New Hampshire after all.

(BEGIN VIDEOTAPE)

(music)

ACOSTA (voice-over): After a shaky win in the Iowa caucuses, it's right into the danger zone for Mitt Romney.

So who better to have at his side at this New Hampshire town hall than maverick, John McCain?

It was hard to tell who was having more fun with Romney's slim victory, Romney...

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My goodness, what a squeaker. But it sure is nice to have a fun a win, I'll tell you. And the question I have for you is, can we do better here in New Hampshire?

(APPLAUSE)

ROMNEY: Can we -- yes, yes.

(APPLAUSE)

ACOSTA: Or his old rival...

SEN. JOHN MCCAIN (R), ARIZONA: We forgot to congratulate him on his landslide victory last night.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Governor Romney, in the end, has a very limited appeal in a conservative party. ACOSTA: The rest of the field appears to smell blood in the water. With millions to spend and nothing to lose, Newt Gingrich aims to tear Romney apart, taking out this full page ad in the "New Hampshire Union Leader." And a pro-Gingrich super PAC recycled this old McCain attack ad from '08, called, "A Tale of Two Mitts."

(BEGIN VIDEO CLIP)

GINGRICH: And I find it amazing the news media continues to say he's the most electable Republican, when he can't even break out in his own party.

(END VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: Game on.

(APPLAUSE)

ACOSTA: The man who nearly won Iowa, Rick Santorum, blew off McCain's endorsement of Romney as a moderate match made in heaven.

R. SANTORUM: I would have expected that. In fact, I'm surprised that he hasn't done it earlier.

ACOSTA: Then there's Jon Huntsman, who skipped Iowa to build up a volunteer force that he thinks can stop Romney in New Hampshire.

JON HUNTSMAN (R), PRESIDENTIAL CANDIDATE: I'm excited. I feel a sense of energy based on the grassroots work that we have done around the state.

ACOSTA: All of that explains why Romney brought in McCain, whose victory in New Hampshire in '08 catapulted him to the nomination, but only after a bitter battle with Romney over gun control and immigration.

(BEGIN AUDIO CLIP FROM MAY 2007, COURTESY "NEW YORK SUN")

MCCAIN: Maybe his solution will be to get out his small varmint gun and drive those Guatemalans off his lawn. I don't know.

ACOSTA: Romney was on the receiving end of some pot shots at his first big event in New Hampshire since Iowa.

UNIDENTIFIED MALE: Would you refine your earlier statement from "corporations are people" to corporations are abusive people?

ROMNEY: When a business has profit, it can do good things.

ACOSTA: Romney needs no reminder now that every vote counts.

ALEX CASTELLANOS, REPUBLICAN CONSULTANT, CNN POLITICAL CONTRIBUTOR: I've got a question for you.

ROMNEY: Hi, Alex.

CASTELLANOS: You won by eight votes last night.

Are you going to call them and thank them?

(LAUGHTER)

ROMNEY: I've got to find those -- those guys one by one and thank them for that landslide, huh?

(LAUGHTER)

(END VIDEO TAPE)

ACOSTA: Polls show Mitt Romney has a commanding lead in -- here in New Hampshire. But that was before Iowa. So he'll -- he may have to reassure voters, Wolf, that he deserves more than just a squeaker in the state. And it doesn't hurt to have John McCain on the stage behind me, in just a few moments, to make that case to voters here in New Hampshire -- Wolf.

BLITZER: I don't think it does.

All right, Jim, thank you.

Rick Santorum made a -- family values theme -- a key theme, I should say, as he doggedly campaigned for months in Iowa. And it was a key theme, as well, as he enjoyed the rewards of his hard work after the caucus votes were counted.

R. SANTORUM: Six of my kids are up here -- Elizabeth, John, Daniel, Sarah Maria, Peter and Patrick. They have not seen much of their dad over the past several months. Yet, they've stood by me every step of the way, encouraged me and loved me unconditionally.

There's another little girl who's not here tonight, She is with a little button. She's our little angel. That's Isabella Maria. Isabella Maria, we don't take her out in crowds. She has a disability.

(END VIDEO CLIP)

BLITZER: Brian Todd has been looking into Santorum's very compelling family story -- Brian, what are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, Rick Santorum's family story has now become a huge part of the campaign narrative. It's the story of a family that has drawn controversy in recent days, but also a real volume of compassion, especially when they speak of their youngest member.

(BEGIN VIDEOTAPE)

TODD: (voice-over): In the glow of his dazzling performance in Iowa, Rick Santorum speaks of the strength he's gotten from his family, the six children with him and one absent, who he calls their little angel. R. SANTORUM: She has a disability that has a, according to the records, the statistics, has a 1 percent chance of survival after one year. She is three-and-a-half years old.

(APPLAUSE)

TODD: That's Bella, Isabella Maria Santorum, born with a genetic disorder called Trisomy 18. It's a chromosomal defect that causes brain damage. The odds have been against her from the start. And sometimes with his wife Karen weeping alongside him, Rick Santorum has spoken of fighting for Bella and children like her, who he says are on the margins of life.

R. SANTORUM: But she is the most abled of all my children, because she is pure love. She is a little girl who shouldn't be here.

TODD: Dan Santorum, Rick's younger brother, says the family often has to leave Bella at home when they're on campaign travel, a painful ordeal.

(on camera): How challenging has it been for them to care for Bella during the rigors of the campaign?

DAN SANTORUM, RICK SANTORUM'S BROTHER: As difficult as it is when -- when Bella is healthy. But when she develops pneumonia, which she's susceptible to, it's very difficult, because to see your child just gasping for air is -- is not pleasant. It -- it's heartbreaking.

TODD: Dan says Karen Santorum, a former neonatal intensive care nurse, often has to treat Bella with a nebulizer, an inhalant device.

(on camera): While they've spoken passionately about their daughter Bella on the campaign trail, the Santorums, who are devout Catholics, have also had to defend their actions regarding another child they had in the mid-'90s, a boy named Gabriel, who died only two hours after he was born.

Karen Santorum wrote in a book that she and her husband took the deceased child home, slept with him and showed him to their other children, who were then very young.

Liberal pundit, Alan Colmes, said on Fox News channel, voters wouldn't respond well to that.

(BEGIN VIDEO CLIP, COURTESY FOX NEWS)

ALAN COLMES: Once they get a load of some of the crazy things he's said and done, like taking his two hour old baby who died right after childbirth home and played with it for a couple of hours so his other children would know that the child was real.

(END VIDEO CLIP)

TODD: Rick Santorum addressed why they brought the child home.

R. SANTORUM: It was so important to recognize for the family, to recognize the life of that child, and for all the children to know they had a brother and sister. And...

TODD: Colmes later apologized.

I asked Dan Santorum if that episode traumatized Rick's other children.

D. SANTORUM: No, no, I -- not at all. I mean if you know Rick's family, being as close as they are, a very loving family. They needed that. And Rick and Karen did the right thing.

(END VIDEO TAPE)

TODD: Others who know Rick Santorum say those episodes have given him strength on the trail and that they'll help him with Evangelicals and other conservatives, so crucial in these GOP primaries. As one friend of his told me, he genuinely walks the walk of what he calls his pro-life convictions. And that will earn him the voters' respect -- Wolf.

BLITZER: What do we know about Rick Santorum's other children -- Brian?

TODD: Well, as we mentioned, there are six others. The oldest, Elizabeth, is 20. The next oldest, John, is 19. They're both taking time off from college to help their father's campaign. The others range from 16 to the young child, Bella, who we mentioned, who's three. With the exception of Bella, they've all been on the campaign trial. They've all been home schooled, with Karen Santorum doing much of the teaching. A very, very close and large family unit -- Wolf.

BLITZER: It certainly is.

All right, thanks very much, Brian.

A good report.

Michelle Bachmann was supposed to go to South Carolina today. But after her dismal sixth place finish in Iowa, she called off the trip and her presidential bid.

Let's bring in our senior Congressional correspondent, Dana Bash.

She's watching this part of the story for us -- Dana.

DANA BASH, CNN CORRESPONDENT: Well, Wolf, every Republican candidate has been on a roller coaster ride of ups and downs this election year so far. But no one was higher and then sunk lower than the congresswoman from Minnesota.

(BEGIN VIDEOTAPE)

BASH (voice-over): Stepping onto her stage still set up from the night before, an emotional Michelle Bachmann bowed out.

MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: The last night the people of Iowa spoke with a very clear voice. And so I have decided to stand aside.

BASH: Bachmann's failure to catch fire in Iowa is a stunner if you flash back four-and-a-half months, when she won the Ames straw poll.

(BEGIN VIDEO CLIP FROM JANUARY 14, 2011)

BACHMANN: This is a wonderful down payment on taking the country back. And it started in Iowa.

(END VIDEO CLIP)

BASH: But that was her high water mark. Became, who was born in Iowa, rapidly lost popularity as she got closer to the caucuses, beset with staff shakeups and gaffes on the stump.

(BEGIN VIDEO CLIP)

BACHMANN: Let's all say happy birthday to Elvis Presley today.

(END VIDEO CLIP)

BASH: That was actually the day Elvis died.

A more serious misstep, her discredited attempt to sideline fellow conservative, Rick Perry, by attacking him for supporting the HPV vaccine, then telling this voter story.

(BEGIN VIDEO CLIP FROM "THE TODAY SHOW," COURTESY YOUTUBE/NBC)

BACHMANN: She told me that her little daughter took that -- took that vaccine, that injection, and she suffered from mental retardation thereafter.

(END VIDEO CLIP)

BASH: Privately, became supporters say her mistakes got more attention than others. Regardless, conservatives she was appealing to flocked to other candidates. Bachmann was an early darling of the Tea Party movement, co-founder of the House Tea Party Caucus. Yet entrance polls show only 6 percent of Iowa voters who support the Tea Party voted for her.

She is also an Evangelical.

BACHMANN: I'll fight for this country and the American people every day in the way that God allows me to.

BASH: Yet her campaign revealed that Iowa Christian leaders tried to get her out of the race, to coalesce around another candidate.

ALICE STEWART, BACHMANN CAMPAIGN SPOKESWOMAN: Requests were made a few times, but she felt as though it wasn't up to a faith leader or even a faith organization to decide who should be on the ticket. She felt that was the voice of the people to decide that. BASH: In the end, people decided they liked five others better.

BACHMANN: While I will not be continuing in this race for the presidency, my faith in the Lord God almighty, this country, in our republic, is unshakable.

BASH: With that, the Bachmann campaign bus pulled off the campaign trial.

(END VIDEO TAPE)

BASH: Now Bachmann was gracious in defeat. She said that she called all of the other candidates who came in ahead of her and she congratulated them on doing well in the Iowa caucuses. She has said she that will support whomever the Republican nominee will be, Wolf.

The question now is whether or not she will endorse somebody before that. Her aides say that she is just going to decompress for now.

But I can tell you, I understand that she has gotten at least two calls from some of her former competitors asking for her endorsement -- Wolf.

BLITZER: I'm sure she has.

Dana, thanks very much.

For a while, it looked like Rick Perry might also drop out of the race. The Texas governor said he was headed home to reassess his candidacy after a fifth place disappointing finish in Iowa. But now, sources say Perry will continue his campaign, saying we're back in -- at least those sources are saying that.

Perry went one step further. He sent out a Tweet. Let me quote it. "The next leg of the marathon is the Palmetto State." That's South Carolina. And then he said, "Here we come, South Carolina."

I assume that means he's in.

A controversial move by President Obama today that's angered many, many Republicans. One Republican leader calling it "arrogant." We're talking live with one of the president's top advisers. That's coming up next.

Plus, Mitt Romney is way ahead in the -- in most New Hampshire polls.

Can the other candidates catch up?

Stand by.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN CONTRIBUTOR: While some of us obsess over the latest polls, maybe there's a better way. In Ireland, there's an online betting parlor which boasts stunning accuracy in predicting the outcome of elections. In trade is a website that allows users to swap contracts on events, and its users are amazingly good at getting election results right.

In the 2004 U.S. presidential election, in betters correctly picked the winner of every single state. In 2008, they missed only two. And not to discourage the gaggle of GOP wannabes this year, but according to Intrade, unless your name is Romney, you have no shot. None. Intrade pegs Romney at 80 percent chance winning the nomination.

The next closest candidate is Newt Gingrich, six percent. That means the crop of Republican hopefuls can probably go home now and dream of what might have been. Granted some of them will now that Iowa's over. See Michele Bachmann, and especially after New Hampshire's over where Romney is expected to win in a landslide.

But there will likely be a few who refuse to recognize reality, and instead, stumble forward into South Carolina and beyond. See Rick Perry. Spending other people's money, banging their jaws together in a never ending quest to avoid one in their heart of hearts they know is going to happen any way, they're going to lose.

And according to Intrade, if your name isn't Romney, it's a wrap. You've already lost. So, wouldn't it be better if they just went away? Yes, it would be, for all of us. We're one week into the election year, and I'm already tired of it. I remember the national root canal that was Barack Obama versus Hillary Clinton, the two of them lurching from one primary to the next in a vicious knife fight for delegates that I thought would never end.

And when it did finally end, the country had a clear case of political fatigue. If you believe in Intrade, we could avoid all that.

Here's the question, how much faith do you have in an online betting site to pick the winner of the Republican primary? Go to CNN.com/caffertyfile and post comment on my blog or go to our post on the SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: Unlike you, Jack, as you well know, I love this kind of political thing.

CAFFERTY: I know you do.

BLITZER: I know. I hope it keeps on going and going --

CAFFERTY: And going and going. OK.

BLITZER: Hope so. All right, Jack. Thank you.

President Obama, meanwhile, is defying Republicans with the recess appointment of a consumer protection chief. The president nominated Richard Cordray to be the first director of the Consumer Financial Protection Bureau last summer. The Senate Republicans have blocked confirmation because they want changes in how the bureau is structured.

The Senate minority leader, the top Republican, Mitch McConnell, calls the president's appointment an unprecedented circumvention of the American people, but President Obama has no apologies.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When Congress refuses to act and as a result, hurts our economy and puts our people at risk, then I have an obligation as president to do what I can without them.

(CHEERING AND APPLAUSE)

OBAMA: I've got an obligation to act on behalf of the American people. And I'm not going to stand by while a minority in the Senate puts party ideology ahead of the people that we were elected to serve, not with so much at stake, not at this make or break moment for middle class America. We're not going to let that happen.

(END VIDEO CLIP)

BLITZER: The Republican leaders are attacking the president's tactic, and they're challenging the legality of Cordray's appointment since the Senate has technically remained in session. Gene Sperling is the director of the White House Economic Council, and he's joining us now to respond.

Mitch McConnell, the Senate Republican leader, says although the Senate is not in recess, President Obama, in an unprecedented move, has arrogantly circumvented the American people by recess appointing Richard Cordray.

Breaking from this (INAUDIBLE) as the appointee and uncertain legal territory threatens the confirmation process and fundamentally endangers the Congress's role in providing a check on the excesses of the executive branch. He has a point, obviously, since the Senate technically is not in recess, doesn't he?

GENE SPERLING, DIRECTOR, WHITE HOUSE ECONOMIC COUNCIL: No, not at all. The constitution expressly authorizes the president of the United States to make appointments when Congress is in recess. That's an expressed constitutional authority. Everybody knows that this meaning session, this pro forma mean session, actually starts with a resolution that no business shall take place.

You can't use a gimmick or a technicality to override the express authority in the constitution of the president of the United States to make a recess appointment and listen, Wolf. All this president was trying to do was implement a law.

A law that was passed recently that created an independent consumer watchdog who could do things like ensure that the credit cards had plain language, that students taking loans from private lenders knew their fees and their interest rates or that we could have what was announced today, a hotline for those gets mortgages, making that huge final decision, have someone independent they trust to call to make sure they're not victims of abuse.

All the president was trying to do was implement this law that Congress passed, and he signed just recently.

BLITZER: It's never happened before even when Congress is technically not in recess. They have some senator from Maryland or Virginia who shows up every few days, calls the Senate into session for a few seconds, and then leaves. Technically not. It's never been done before. This is the first time a president has done this to the Senate. Is that right?

SPERLING: You know, I just disagree. Congress, as the president's lawyers and counselors found, is in recess. They are in recess. They have been in recess and they'll remain in recess, and it's -- you can't begin use the technicality or gimmick to override express authority of the president. And let's remember, this president has done plenty of recess appointments, so far.

At the same point in his term, President Bush had done more than twice as many, 61. So, this president is actually resorted to the recess appointment much less than past presidents, and he's done so only in a situation where a minority of senators, Republican senators, are actually using the blockage of an appointee not based on objections to their credential or the qualifications of the nominee, but actually, as a way of nullifying a law that was passed by Congress.

They don't want the law to operate as it's been implemented. And this is someone who was endorsed by Republican and Democratic attorney generals as having impeccable qualifications and credentials to be our first independent consumer watchdog.

BLITZER: But I think you'll agree that the 60 plus times that a Republican president, President Bush, had a recess appointment, Democrats, they didn't have this technical continuation in session. They were really in recess. There wasn't a senator every few days calling them to action within a few seconds. This is very different, isn't it?

SPERLING: You know again, I disagree. You know, it is the opinion of the president's counselors that the Senate is in recess. Again, let's understand. When they go into this pro forma recess, they actually start by saying no business shall be conducted.

So, I mean, this is really a means of seeking to use a technicality to override the president's ability to implement a law that Congress passed to address the abuse millions of average American families suffered from in this great financial crisis, great financial recession that we just went through.

They're, again, not objecting to this nominee's credentials. They're trying to block the nominee to block a law that Congress passed with the support of the American people to protect consumers from mortgage abuse, credit card abuse, student loan abuse, veterans from being taken advantage and targeted by installment lenders.

No one should be afraid of this law being implemented by having an independent director, highly qualified, like Richard Cordray, take the job.

BLITZER: I'm sure, and you probably recognize, I'm sure the president's lawyers recognize this will go to the courts. We'll see what they decide. We'll see what they decide whether the president's action is constitutional or not constitutional given the separation of powers between the Senate, between the executive branch, and the legislative branch.

There'll be, I'm sure, a huge legal fight. You know, the other action the president did with the NLRB, the National Labor Relations Board, he used the same procedure today to name some members in the U.S. Chamber of Commerce says this is horrible. Let me read to you what their statement is, Gene.

"The NLRB's credibility has suffered greatly during this administration due to an aggressive agenda favoring the unions. The president could have chosen to work with the Senate and stakeholders to see if a package of nominees could be confirmed that would help restore the agency's independence and credibility. Instead, today's steps will simply further poison the well with regard to labor management issues pending in front of the board and on capitol hill."

What do you say to the Chamber of Commerce?

SPERLING: What I say to my friends at the Chamber of Commerce is that they know that at this point, the NLRB did not even have a form to conduct the nation's business. They only had two appointees when they're supposed to be five. The president put two Democrats and a Republican so that the NLRB can do its basic business related to protecting collective bargaining, the rights of workers.

We know, there's always been traditional tension between the Chamber of Commerce and NLRB, but what the president did today was making sure that, again, blocking appointments is not being used as a way of nullifying laws or keeping government from dealing with its core responsibilities. That's all we're doing.

Of course, the president would rather have Republicans in the United States Senate willing to work with him in a more cooperative way. He did this because there was no other way to ensure that our government was functioning as it's designed, and that there was a form for the NLRB to do its basic business, and he appointed both Republican and Democrats to this appointment to make sure that the NLRB can function as it should.

BLITZER: Clearly, a much more assertive president of the United States challenging the Republicans in the Senate. Only just beginning, I suspect, between now and November. Gene Sperling, thanks very much for coming in. SPERLING: Thanks, Wolf.

BLITZER: The only presidential candidate not to campaign in Iowa, Jon Huntsman. He's only focused on New Hampshire. So, is it his turn to surge? Stand by.

And who will Michele Bachmann supporters start backing now? We're discussing those two questions. That's coming up, guys.

(COMMERCIAL BREAK)

BLITZER: Congresswoman Michele Bachmann has vowed to reality and bowed out of the 2012 presidential race. Joining us now, our CNN contributor, Will Cain, and the Iowa Republican Party chairman, Matt Strawn.

First to you, Matt. Who is likely to gain? Put on your analyst hat for a moment. By Michele Bachmann's dropping out, which of the other candidates will presumably get the most support as a result of her leaving?

MATT STRAWN, IOWA REPUBLICAN PARTY CHAIRMAN: Well, speaking from what I saw on the ground here in Iowa over the last couple of weeks, seeing those candidate -- those voters who are torn between two candidates. Usually, it was Rick Santorum and Michele Bachmann were the two that they had difficult time deciding between.

So, I would say Senator Santorum would have the opportunity to benefit the most for Michele Bachmann dropping out of the race.

BLITZER: I agree. What about you, Will?

WILL CAIN, CNN CONTRIBUTOR: Yes, absolutely. Two candidacies defined by their commitment to social conservatism, family values. It's hard to see how they both could coexist with each other, actually.

It's a natural fit for Michele Bachmann supporters to flow over to Santorum.

BLITZER: Now, Rick Perry, when he left Iowa -- or at least last night, he said he was going back to Texas, reassess what was going on. All of us simply assumed that was the first step in his decision to drop out of the race, or at least suspend his campaign but, all of a sudden, today, he says he's on to South Carolina.

And a lot of folks, Matt, think that potentially could help Mitt Romney in South Carolina by dividing up that conservative vote. What do you think?

STRAWN: Well, I think that mirrors what we saw on the ground here in Iowa with the divided and social conservative electorate. Obviously, Rick Perry, Michele Bachmann, Rick Santorum were fighting over the same electorate over the last couple of weeks. Of course, Rick Santorum garnered the larger share of that. But going into South Carolina at a time when Rick Santorum is going to be up in New Hampshire competing there this week, I think it's an interesting strategy for Rick Perry to stay in the race, and I think there's an opening for him to do well in a place like South Carolina.

BLITZER: What do you think, Will? Is there a way, do you see a way -- maybe he can do well in South Carolina, but realistically for Rick Perry, the Texas governor, to be the nominee?

CAIN: No, I don't see a way for Perry to be nominee. I mean, you have to answer that question with any kind of caveat, because the polls change from week to week.

I mean, Rick Santorum was polling at just north of five percent a little over a week ago, so I guess we have to say anything could happen, but I can't anticipate what that anything would be to actually make Rick Perry a viable candidate. No, I don't see him doing well in South Carolina or moving anywhere near the nomination.

BLITZER: In New Hampshire right now, next Tuesday, the New Hampshire primary, the first primary in the nation, Matt, Mitt Romney, who almost lives there -- he's from neighboring Massachusetts. There's the Suffolk poll, 43 percent, very similar to our CNN poll. Ron Paul, 16; Huntsman, 10; Gingrich, 9; Santorum, 5. It looks like he's got this lopsided lead.

Here's the question. I know the candidates are all going to be there over the weekend for a couple of debates, but does it make sense for any of these Republican candidates, with the exception of Jon Huntsman, to really aggressively campaign in New Hampshire, or should they simply skip New Hampshire and go to South Carolina?

Matt?

STRAWN: Well, you know, Wolf, one thing that's interesting when you look at who turned out last night here in Iowa, we had a record turnout for a Republican caucus, and some of that was fueled by a large group of Independents who had the opportunity to caucus as Republicans. And given that Independents can participate in the New Hampshire primary, I think it does provide an opportunity for Ron Paul, of course for Jon Huntsman, who's been living there, to really grow that vote. And the more they target those Independent voters, it does provide an opening for Rick Santorum to build on that hard, conservative, ideological vote that also exists in New Hampshire.

So it makes sense for Senator Santorum to be in New Hampshire and try and build on that momentum and take advantage of that earned media bounce that he's getting out of his strong second place finish yesterday.

BLITZER: Yes, I think I agree with you on that, too.

But Will, Jon Huntsman, he spent all of his time in New Hampshire. Here's the question to you. Can he do in New Hampshire over these next six days to Mitt Romney what Rick Santorum did in Iowa?

CAIN: That's the game plan, strategically, right? He's been there, he's camped there. Rick Santorum went to all 99 counties in Iowa. Jon Huntsman is visiting all 10 counties in New Hampshire. But let's just set aside strategy for one minute, Wolf.

Jon Huntsman is going to bring to this debate over the next week one of the most conservative economic records in the field. Will that be sold?

The whole selling point thing is getting to be big, because now it's being sold to us that Rick Santorum is the vote for a principled, conservative ideologue, while Mitt Romney is this huge compromise. Rick Santorum, who advocates for a corporate tax rate on the manufacturing rate of zero and 17 percent on everybody else, that's picking winners and losers. That's not economic liberty.

My point is, all of these candidates are compromised candidates, and Jon Huntsman so far has sold his campaign very poorly. Can he sell it better in New Hampshire? We'll see.

BLITZER: Will Cain, thanks very much.

Matt, thanks to you as well.

Let me just say, I was in Iowa last week. You guys did an excellent job organizing the caucuses, with the tiny little glitch at the end thanks to those two ladies from Clinton County saving the day for all of us.

You want to say a word to them, Matt?

STRAWN: Edith is a long time county chair, and both her and Carolyn (ph), I'm hoping their enjoying their time in the spotlight, because it's the very best that is Iowa. It's volunteers trying to make a difference.

BLITZER: Good point. Lovely, lovely ladies. Want to thank them once again.

Guys, thanks for coming in.

Some of the days other top stories are next, including the L.A. arson suspect investigated in another country.

Also, this.

(BEGIN VIDEO CLIP)

BLITZER: Get ready. Come over here to the stage, Anderson, please. I want you to join in this conversation, because guess what? Joining us now on the phone, Edith and Carolyn (ph). Let's give them a big round of applause.

(END VIDEO CLIP)

BLITZER: Jeanne Moos on two surprising stars of the Iowa caucuses coverage.

(COMMERCIAL BREAK)

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

Lisa, another twist in the story of that Hollywood area arson spree.

SYLVESTER: Yes, Wolf. It turns out the German man who was charged today with multiple counts of arson in Los Angeles, Harry Burkhart, is also accused of burning down a family home, as well as fraud, back in his home country. The damage in the L.A. fires is likely to reach $3 million.

And a bitter week of fighting may be ahead in Syria. Rebel forces vowed to unleash "huge operations" against President Bashar al-Assad's regime around the country. The Free Syrian Army says because peaceful demonstrations didn't work, they'll use arms to force them out.

And Yemeni president Ali Abdullah Saleh won't come to the U.S. for medical treatment after all. He says government leaders have asked him to stay in Yemen, where protests over the last year left the country in utter turmoil. U.S. officials have asked Saleh to make good on his promise to resign and clear the way for presidential elections in February.

And something big is brewing at Dunkin' Donuts. Plans are in the works to double the nearly 7,000 U.S. locations over the next 20 years. The chain holds about 23 percent of the coffee and snack shop market, with Starbucks as its biggest competitor.

So, it certainly sounds like great news whenever you have a private company expanding, hopefully hiring more jobs, Wolf. Hiring more people, rather.

BLITZER: Excellent point. I agree with you. Thank you.

Some Republican presidential candidates are already focusing in on South Carolina. Why it could be make or break for at least two of them.

Plus, some voters still say there's no perfect candidate among the Republican field.

(COMMERCIAL BREAK)

BLITZER: South Carolina residents say while Iowa eliminates candidates, their state picks winners. For three decades, every Republican who has won the state's primary has gone on to win the nomination.

Our Mary Snow has been looking ahead to South Carolina's showdown -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, New Hampshire may be next up on the calendar, but candidates are ramping up their campaigns in South Carolina and scheduling stops there, as well as campaigning in New Hampshire. And to hear the chair of South Carolina's GOP party tell it, his state's January 21st primary will prove to be pivotal.

(BEGIN VIDEOTAPE) SNOW (voice-over): Iowa created a top tier of Republican candidates. Michele Bachmann's now out, and others are fighting for momentum heading into New Hampshire.

But the head of South Carolina's Republican Party predicts his state will provide the next real make-or-break moment.

CHAD CONNELLY, SOUTH CAROLINA GOP CHAIRMAN: The Iowa winner hadn't always been the nominee. The New Hampshire winner hadn't always been the nominee. But since 1980, we have picked the eventual nominee. And so I believe this is where the race really starts, and I think this is where it's going to be decided, too.

SNOW: Case and point, the 2008 Republican primary, where Mike Huckabee won Iowa with the help of Evangelicals, but John McCain eventually became the party's nominee. Like Iowa, the Christian right has a heavy influence in South Carolina, but there are some key differences among voters there.

(on camera): In 2008, 60 percent of South Carolina's Republican primary voters were Evangelicals or born-again Christians. Of the 40 percent not in that category, they favored John McCain over Mike Huckabee, leaving McCain to win the state.

(voice-over): Political watchers say social issues are a motivating force for Evangelicals in South Carolina, but not a sole factor.

SCOTT HUFFMON, WINTHROP UNIVERSITY: Simply saying I'm an Evangelical is not enough to win them over. You have to say, I'm the Evangelical candidate, or I'm a moral candidate. I am concerned about the social issues you're concerned with, but I'm also concerned about the debt and the deficit.

SNOW: Along with fiscal conservatives, there's also a large number of active and retired military personnel living in South Carolina, and a win here is seen as key to winning the South.

HUFFMON: If you can appeal to the conservatives in South Carolina, if you can win in the heat and occasional dirty politicking in South Carolina, then you're the type of candidate who has the mettle to move on. It does often provide a firewall.

(END VIDEOTAPE)

SNOW: And Wolf, one other thing we'll be watching in South Carolina is the issue of the economy and jobs. Now, unlike Iowa and New Hampshire, where the jobless rate is below the national average, South Carolina's unemployment rate is 9.9 percent. The national average, 8.6 percent.

BLITZER: Good point, Mary. Thank you.

The Republicans could probably put together a pretty strong composite candidate, but right now each Republican hopeful has plenty of weaknesses.

Our chief political analyst, Gloria Borger, is joining us now.

Voters, Republican voters, Gloria, seem somewhat hesitant.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They are, Wolf. You know, this is supposed to be the year that Republicans had all the enthusiasm because they really want to beat Barack Obama.

If you take a look at our entrance polls from last night, the question was asked, "What is your opinion of your candidate?" The person you picked.

Sixty-three percent strongly favored. That is about the same as it was in 2008, Wolf, when there wasn't a lot of enthusiasm on the Republican side. But a full third said, you know what? We have some reservations. Four percent, they just didn't like the others in the field.

So, if you look at that number, 31 percent had some reservations about their candidate.

Let's take a look over here and we'll just kind of break it down.

Of the folks who have reservations, look at who won that -- Mitt Romney. Twenty-nine percent of the people who had reservations were the ones voting for Mitt Romney, and that's his problem.

Santorum came in second in that category, probably, Wolf, because he's new. People weren't sure whether they kind of knew him well enough. Ron Paul, 16 percent, and down.

But this is a very problematic number for Mitt Romney, because it means even the people who are voting for him might be holding their nose.

BLITZER: So what does this tell us about the Republican Party today?

BORGER: Well, it tells us that they don't have someone they love. Mitt Romney can't get above that kind of 25 percent ceiling. Different voters in the Republican Party have different issues that they care about.

Rick Santorum, for example, is the moral values candidate. Mitt Romney, people who voted for him in our entrance poll said they liked his experience as a businessman. Ron Paul, they liked his deficit issues.

So, Wolf, this is a party who hasn't quite decided what kind of a candidate they really want. And one more important thing to think about when you think about Mitt Romney. He only got 14 percent of the voters who identified themselves as very conservative. That's where the other candidates see an opening.

BLITZER: Yes. All right. Thanks very much, Gloria.

BORGER: Sure.

BLITZER: Good analysis as usual.

Jack Cafferty is asking the question: How much faith do you have in online betting sites to pick the winner of the Republican primary? Your answers, coming up.

And Jeanne Moos on last night's coming out party for two women from Iowa, Edith and Carolyn.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Jack Cafferty -- Jack.

CAFFERTY: The question this hour is: How much faith do you have in an online betting site to pick the winner in the Republican primary?

Doug writes, "You could ask an aboriginal tribesman from the deepest outback in Australia who the Republican nominee is going to be and he would correctly say 'Mitt Romney.' The special interest groups have gotten so powerful, they don't even try to hide it anymore. They just say, here, here's your candidate, so go out and vote."

"Have a nice time, but don't try to rock the boat. It doesn't matter who you pick because the special interest groups own them all."

George in New Hampshire writes, "I have a lot of faith in it. Have you ever watched how well Vegas sets the betting lines on NFL games? Come on, Jack, give me $50 on Mitt."

Andy in Massachusetts says, "Oh, please. I'm still sweating out Punxsutawney Phil's prognosis about six more weeks of winter."

Mark, in Houston, "The best part of your question was, we're one week into the election year and I'm already tired of it. Couldn't agree more."

"As for having faith in a betting system, sure. Why not? It seems to work as well as any of the 24/7 panel of experts and their never- ending dissection of the polls. Why not just skip all that hot air, watch the odds out of Ireland, report them a couple of times a day, and let us watch some news of value?"

Douglas in Connecticut, "An interesting concept, impressive numbers. But I think I'll stick to the more conservative opinion of Wolf Blitzer and just wait for them to count the votes."

And Cheryl in South Carolina writes, "While I believe Intrade is 100 percent correct that Romney will be the candidate, why in the world would you want to end this circus early?"

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

I like they way they did that. You see the way they slide us in and out there?

BLITZER: Yes. Very smooth. CAFFERTY: Very clever.

BLITZER: Jack, stand by. Don't rush off. I want you to watch this next report.

After more than eight hours on the air, some of us got the giggles last night. Just ahead, Jeanne Moos with the not-so-serious moments of the Iowa caucus coverage.

(COMMERCIAL BREAK)

BLITZER: As the evening creeps into the early morning hours, election coverage can take an interesting turn.

CNN's Jeanne Moos has our look.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): We don't usually cover our own coverage this extensively, but you know it was a special night when the anchors are giggling, the pundits are laughing.

ANDERSON COOPER, CNN ANCHOR: We'll be right back.

MOOS: Wolf Blitzer is resorting to Internet shorthand.

BLITZER: I can only say three letters, OMG. Look at this.

UNIDENTIFIED FEMALE: We have lost control.

MOOS: That's the director chiming in. It was a night when the Magic Wall wasn't always magical --

ERIN BURNETT, CNN ANCHOR: That would be the key to his success -- Wolf.

MOOS: -- when it did this --

BURNETT: We will do a little reverse flick.

BLITZER: OK. Let's do that.

MOOS: -- when it was supposed to be doing this --

BLITZER: Yes.

MOOS: By the wee hours of the morning, geography started to look like anatomy of the nether regions.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Governor Romney may still eke this out tonight.

MOOS (on camera): Once an anchor starts getting a little slap happy, he's liable to start slapping even his own network.

COOPER: Have we all just given up? Is this like 1:30 and everyone's like --

MOOS (voice-over): Election night is when networks trot out their latest gizmos.

COOPER: If only we had some new, high-tech thing that had never been seen on television before.

BLITZER: Do you think we should try to do something like that?

COOPER: Oh, look at this, the Weebles.

MOOS (on camera): Weeble? What's a Weeble?

UNIDENTIFIED GROUP (singing): Weebles wobble but they don't fall down.

BLITZER: Imagine their Iowa Republicans --

MOOS (voice-over): CNN used its Weebles to demonstrate how a caucus works.

COOPER: If you miss any of this, you can see it on "The Daily Show" later with Jon Stewart, when he ruthlessly mocks you.

MOOS: Actually, the Weebles reminded us of the cucumber candidates and a psychic snail Stephen Colbert used to try to predict --

STEPHEN COLBERT, "THE COLBERT REPOT": -- who the winner is.

MOOS: CNN actually scooped everyone on caucus night when a couple of Iowa Republican officials named Carolyn and Edith saved the day.

UNIDENTIFIED FEMALE: I added them up -- I added them up a couple times. Oh, man.

MOOS: They explained a glitch that cleared up the mystery of some missing returns that put Mitt Romney over the top.

KING: If these are the final numbers --

UNIDENTIFIED FEMALE: What do you mean these numbers don't match?

BLITZER: Well, I'll explain it.

MOOS: By 3:30 in the morning, caucus coverage was temporarily renamed "CNN After Dark," and unusual news music was replaced by Barry White.

BARRY WHITE, SINGER (singing): We've shared love and made love.

MOOS: Though Anderson wasn't loving this gizmo.

COOPER: The social media screen -- again with the social media screen? My lord --

ALI VELSHI, CNN ANCHOR: This is the future, Anderson.

COOPER: This is the third hit. I still don't understand what the hell this thing does.

MOOS: Anderson had his Weebles in a knot.

Jeanne Moos, CNN --

UNIDENTIFIED GROUP (singing): Weebles wobble, but they don't fall down.

MOOS: -- New York.

(END VIDEOTAPE)

BLITZER: We had a lot of fun. We'll do it again next Tuesday night. We'll see how long that goes.

That does it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

The news continues next on CNN.