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THE SITUATION ROOM

Mitt Romney Taking Heat From Conservatives; Pork in Santorum's Past?; Sweeping Changes To U.S. War Plans; Romney And McCain: Then And Now; GOP Wannabes Haul In Campaign Dollars; Cuba: Twitter User Started Castro Death Rumor

Aired January 5, 2012 - 16:00   ET

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


WOLF BLITZER, HOST, CNN'S THE SITUATION ROOM: Happening now: Mitt Romney takes some heat from conservatives in New Hampshire and gets the cold shoulder from the Tea Party movement in South Carolina -- why he says they will learn to like him.

Rick Santorum's future may look brighter after his success in Iowa, but his rivals are slamming him for the pork barrel spending in his past. We're talking a closer look.

And the shocking cost of the slaughter in Syria. A government defector says the regime is spending so much money on its own brutal crackdown, that's it's running out of money. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It can get a bit lonely being the front-runner, especially when you're way out front in New Hampshire, as Mitt Romney is in New Hampshire right now. The first in the nation primary is only five days away. That makes Romney the prime target of his Republican rivals, but they're also squabbling among themselves and while Romney can afford to look ahead to South Carolina, some of the other candidates can't afford to fall further behind.

Let's go live to CNN's John King. He's joining us from Bedford in New Hampshire right now.

John, you're on the scene for us. Give us a lay of the land right now. The big picture, what's going on?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Five days out, Wolf, you would have to say New Hampshire is Romney country. Just like in Iowa, you have the campaigns now gearing up for their final push.

We see more lawn signs, more signs on the street corners here in New Hampshire than we did in Iowa, but nowhere near the level of past campaigns. One reason for that, people here are pretty well considered already to believe that Romney will win. The question is how big will the margin be? He won by eight votes in Iowa. He's up by 30 points in the latest poll here, 48 percent for Romney, 18 percent for Congressman Ron Paul running second.

The question is, can Rick Santorum build on his Iowa momentum? He's third now, Wolf, with 8 percent support. Speaker Gingrich and the former Utah Governor Jon Huntsman just behind him at 7 percent. What do you see? Go by the Romney campaign headquarters here and you see a very careful effort to protect that lead. Volunteers not identifying themselves, calling around to Republican voters essentially polling them, going down their list, saying, who are you going to vote for, trying to make sure people they have already identified as Romney supporters stay that way.

That's to protect that lead. The most activity after Romney you would find at the Huntsman headquarters here, and yet he's still struggling in the polls, Wolf. Jon Huntsman needs to win, place or show here or else most believe he will be gone from the race and today, you saw what you just talked about. Romney is drawing most of the fire.

But Gingrich and Santorum, knowing how important it is in New Hampshire to prove they have what it takes to stay in the race to South Carolina, Florida and beyond, Gingrich and Santorum actually going back and forth at each other. The speaker essentially saying Senator Santorum was a bit player in the Congress, he didn't have much influence, and Senator Santorum returning fire.

So, Wolf, with five days out, there's no question here, no question Governor Romney is the heavy favorite and even though the Iowa win was only eight votes, there's absolutely no evidence that his big lead here at least on this day is slipping.

BLITZER: As you know, John, the Republican presidential debates have been so important over these many months. You did one of the first ones in New Hampshire. I think that was way back in June if I recall, but there are going to be two Republican debates this weekend. Those could still even at this late moment in New Hampshire shake things up a bit.

KING: The candidates know, especially if you're Romney or Santorum, to bring your battle armor. There's no question that Speaker Gingrich, Senator Santorum, Governor Huntsman are going to turn their attention on Romney, trying to bring him down.

Most think they can't beat him here but they want to bring him down. They want to get him under 40 percent so they could say that the man who was at 40 percent or higher in the polls for months struggled in the final week here in New Hampshire. That's the main goal. Romney will be target number one.

But make no mistake about it. Speaker Gingrich fourth in Iowa. He knows he probably needs to win South Carolina to prove his viability. If he comes in behind Romney, behind Ron Paul and behind Rick Santorum again, it's hard for him to make the case that he's a strong national candidate for the Republicans, so look for Speaker Gingrich to be aggressive, focusing on Romney, number one. There's a lot of bad blood brewing there, but Speaker Gingrich also realizes now out of Iowa Rick Santorum is a threat as well.

BLITZER: He certainly is.

What's coming up at "JOHN KING, USA" at 6:00 p.m. Eastern right after us?

KING: We're going to have Governor Huntsman right here. He ignored Iowa. He insulted Iowa.

He said, Iowa picks corn, not presidents. He's going to be here, and we're going to ask him, if you look at that latest polling, it looks like his New Hampshire first strategy might not have been such a great idea. We will also get some insights from the former governor, the former White House chief of staff, the former state Republican Party chairman here. That's John Sununu. He's a big Romney guy here. He's a longtime conservative. We will ask him what he thinks of Newt Gingrich's criticism of Mitt Romney as that timid Massachusetts moderate and we will get his assessment on the state of the play here with just five days out.

BLITZER: Sounds like a good show as usual. John, thanks very much.

As his conservative rivals pound away at him in New Hampshire, Mitt Romney just arrived in South Carolina, but critics on the right haven't exactly rolled out the red carpet for him.

Let's go to CNN's Joe Johns. He's joining us in South Carolina right now.

What's the latest there, John?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, Mitt Romney has the endorsement of the state's Tea Party-backed governor, Nikki Haley. He's certainly got money. He's got a very good organization, but hey, this is South Carolina, where the people like their politics raw and we have already gotten some examples of that.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Welcome to South Carolina, Mitt Romney. Tea Partiers here despise you. That was the message a Spartanburg Tea Party organizer, Karen Martin, was sending to the candidate when he took a day off from campaigning in New Hampshire to swing by the Palmetto State, which will hold the first primary in the South later this month.

Martin said in a telephone interview that except for the people who have already signed on for Romney, almost no one she knows in the state is supporting him.

KAREN MARTIN, TEA PARTY ORGANIZER: We don't really think too much of Mitt Romney down here in South Carolina as a presidential candidate. I don't know any Tea Party people in the state, save one I talked to this morning, who is supporting him in his presidential bid.

JOHNS: Like many Tea Partiers who say they don't like Romney, Martin cited among other things the public health plan Romney set up in Massachusetts, which is very similar to President Obama's plan.

MARTIN: The Republican Party didn't like him in 2008. Not much has changed about him between then and now in 2012, but the electorate has changed a lot. We're more conservative. We're taking a deeper look at the Constitution. We're more focused on smaller government and fiscal responsibility and we just don't think Mitt Romney brings those values to the table.

JOHNS: Of course, that's not good news for Romney since 57 percent of South Carolina respondents in the last CNN poll said they were active members or supporters of the Tea Party movement, which generally stands for smaller government and lower taxes.

By the way, Romney has said that Tea Partiers nationwide would eventually come around when they got to know him better.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: As they get to know me better and understand how it is, I'm devoted to shrinking the size of government and encouraging the growth of the free economy. I think I will get great support from the Tea Party.

JOHNS: According to entrance polls of people on their way into the Iowa caucuses, Romney got decent Tea Party support there. Rick Santorum had the best showing with 29 percent. Romney actually tied with Ron Paul with 19 percent of the Tea Party vote. And Romney has a strong organization, backing from people like Republican Utah Congressman Jason Chaffetz.

A Tea Party darling himself, Chaffetz has recruited dozens of members of Congress to the Romney campaign.

REP. JASON CHAFFETZ (R), UTAH: This election is going to come down to jobs and the economy. We need somebody from the outside who's going to turn around the economy and put us on the strong financial footing. We have to beat Barack Obama and Mitt Romney is clearly in the best position to do that.

(END VIDEOTAPE)

JOHNS: Meanwhile, Senator John McCain, who won this state last time around and is now supporting Romney, is actually traveling the state as well as reaching out to some of his own contacts in this state, not so much pitching them , we're told, as just saying hello, because this is an election year -- Wolf, back to you.

BLITZER: That's the way it happens. All right, Joe, thank you.

Newt Gingrich left Iowa with a chip on his shoulder, stunned by all the negative ads. He's made it clear he will go after Mitt Romney. He's keeping up the pressure today.

Listen to this.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: We have a difference of opinion, you know, about which will be the last conservative standing. But I think eventually, you will get down to one conservative in Governor Romney and he will continue to get 25 percent. Now, by definition, at some point in that game, somebody else is going to start getting a lot more votes than Governor Romney. If he wins at 25 percent, this would be the weakest front-runner in history.

(END VIDEO CLIP)

BLITZER: Let's bring in our chief political analyst, Gloria Borger.

Is Newt Gingrich right? How vulnerable is Mitt Romney?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, Newt Gingrich is hitting him right where he is vulnerable. That's the question Joe Johns was getting out earlier, which is just how conservative is Mitt Romney?

When we looked at those entrance polls that we took in Iowa, only 14 percent of the voters, the caucus-goers in Iowa who self-identified as very conservative were for Mitt Romney, 14 percent. As Joe was saying before, Santorum won with the Tea Partiers. Santorum won with a very conservative voters.

What Newt Gingrich is really trying to do is chip away at the notion that Romney is a conservative. Now, that may work in South Carolina. The question is whether that will work in New Hampshire, where independent voters also can vote in a Republican primary and they might like somebody who's moderate, but those independents could also go for Ron Paul.

So what these folks are trying to do is chip away at that 40 percent number, get him back down to where he normally is and then they can claim a victory even if they don't win in New Hampshire.

BLITZER: Right. That's a good point. Now, we know a lot of money already being thrown, but it's only just beginning. But this year, there's a new twist.

BORGER: Right, there is a new twist, and it's not just the money the campaigns are raising, but it's the money for what we call super PACs.

And these are outside political action committees that are funded by outside contributors who can raise unlimited amounts of money. And what we have been seeing, Wolf, is that they have been doing the dirty work.

Take a look at the names of some of these political action committees. Restore Our Future. Make Us Great Again. Red, White and Blue Fund. Winning Our Future. Our Destiny PAC. Who do they represent? Nobody knows, so when they go on the air with negative ads, nobody will know, but, look, lo and behold, Restore Our Future is for Romney. Make Us Great Again is for Perry and on and on.

Those two PACs, let's take a look at the money here, how much these outside super PACs spent. For Romney, $1.2 million. That's what Newt Gingrich has been so upset about, because those are negative ads. Same thing for Perry, $844,000. Santorum, the Red, White and Blue Fund, only $289,000, but now that he's in the top tier, you can be sure they will be raising more money.

BLITZER: But the pressure's going to be on...

BORGER: Absolutely, his super PAC, his super PAC. There are reports that his super PAC is going up with ads in South Carolina. So what we see here, Wolf, is that these are the attack ads. So you have a situation where the candidates have deniability. You know, Mitt Romney says, I'm running positive ads.

But guess what? The Restore Our Future fund is running the negative ads and Romney can say, you know, I have nothing to do with that. By law, he really isn't supposed to have anything to do with it, but guess what? A lot of his friends are running his super PAC.

BLITZER: I love the names. The names are great.

(CROSSTALK)

BLITZER: I love my mother.

BORGER: Right. They're a little generic, wouldn't you say?

BLITZER: Right. Thank you.

Jack Cafferty is coming up next with "The Cafferty File." He has a question for you about the campaign, the campaign contributions. Are some of those contributions actually being wasted?

And Rick Santorum under attack from his rivals over pork barrel spending. How much cash did he really take? We're checking the facts.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN ANCHOR: All right, Wolf, if you go to the racetrack, do you bet your money on a three-legged horse? Of course not. You bet your money on a four-legged horse, one that actually has a chance of winning the race, right?

So, why is it when it comes to politics, some people insists on betting on horses that have no chance at all of winning? Several of the Republican presidential wannabes making lots of campaign cash, raking it in, despite the fact they have virtually no chance of being the nominee. Rick Santorum who came close to defeating Mitt Romney in Iowa raised more than a million dollars since the caucuses on Tuesday.

And, yes, Santorum placed a very close second in Iowa, but that was largely due to his appeal among social conservatives and evangelicals. And that's not something that's going to translate in a lot of the upcoming races. For example, he stands to lose rather badly in New Hampshire next week.

Meanwhile, Ron Paul raising an impressive $13 million in the last three months. That tops the $8 million he raised in the previous quarter. Ron Paul has a very passionate group of supporters. He, too, ran well in Iowa, but once again, the chances are he's not going to be the Republican nominee.

Newt Gingrich, he raised $10 million in the last quarter, but a lot of that came when he was spiking in the polls and that's way, way long time ago, ancient history now.

Of course, none of these compare to Romney's expected haul of $20 million over the last three months. And that's the thing. You can understand why people might want to plunk their money down on Romney to win. Romney is looking more and more like the party's nominee every day. He's expected to win in a landslide in New Hampshire and it seems unlikely at this point that there's anything or anyone out there who's going to be able to stop him.

So, here's the question. Why do people give money to candidates who have no chance of winning? Go to CNN.com/CaffertyFile, post a comment on my blog or go to our post on THE SITUATION ROOM's Facebook page.

You wouldn't bet on a three-legged horse, would you, Wolf?

BLITZER: No, I wouldn't. But, you know, I did write on my little blog post today about I'm not yet ready to crown Mitt Romney the winner. I think we should let this thing play out. There have been so many ups and downs over these past several months. Who knows what could still happen between now and the end of the game. That's just me though.

CAFFERTY: Well, Romney's going to win, but I don't want to wreck your party.

(LAUGHTER)

BLITZER: All right. Thanks.

CAFFERTY: OK.

BLITZER: Rick Santorum is riding high after his big showing in Iowa, but that's made him a bigger target for his Republican rivals who are now slamming Santorum for spending heavily on pet products when he was in Congress. He was in the House and Senate for 16 years.

Our senior congressional correspondent Dana Bash has been looking into this for us.

Dana, what are you finding out?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, when Rick Santorum was in Congress, as you know, Wolf, it was certainly a very good thing for lawmakers to be able to say they're spending money home on their constituents. Lawmakers begged to be on the appropriations committee in order to be in the best position to get earmarks.

But this is a very different world, especially running for the Republican nomination. And Santorum's opponents are using earmarks that he got to paint him as a typical Washington politician.

(BEGIN VIDEOTAPE)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: We're in a financial crisis right now.

BASH (voice-over): Stumping in New Hampshire, Rick Santorum gives his prescription for reducing the deficit.

SANTORUM: We have to do it in the areas where the deficit has been created and that is spending.

BASH: But the former senator's opponents say he was part of the problem.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: He's very liberal.

BASH (on camera): What makes him liberal?

PAUL: He spends too much money.

BASH (voice-over): They really hit him for taking earmarks -- a dirty word in Tea Party lexicon.

ANNOUNCER: Who personally demanded more than $1 million in earmarks? Jay from Ames.

UNIDENTIFIED MALE: Rick Santorum.

ANNOUNCER: Right.

SANTORUM: I have had a lot of earmarks. In fact, I'm very proud of all the earmarks I put in bills.

BASH: The reality is, it's hard to know if Santorum really got a billion dollars in earmarks because he was defeated in 2006, before lawmakers were required to disclose their earmarks.

But Steve Ellis with the nonpartisan Taxpayers for Common Sense says --

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: I think it's pretty clear if you look at the anecdotal evidence that he got at least a billion dollars and probably much, much more.

BASH: In 2005 alone, Pennsylvania received $483 million in earmarks for 872 projects and during his years in Congress, Santorum issued press release after press release, bragging about bringing home the bacon. Like an expansion project for WyoTech job training center, and $50,000 for Gateway Fasteners, a career development program in Export, Pennsylvania.

And Santorum voted for the infamous bridge to nowhere in Alaska.

ELLIS: To go against the bridge to nowhere was to go against one of the most powerful senators, Senator Stevens, who is a very senior appropriator.

BASH (on camera): Right. If he would have voted against the bridge to nowhere, bye-bye money for Pennsylvania.

ELLIS: Absolutely. Bye-bye money for Pennsylvania.

BASH (voice-over): Santorum still defends his pork barrel projects.

SANTORUM: When you go to Congress, you make sure that when taxes go from your state to Washington, D.C., you fight to make sure you get your fair share back.

BASH: And to be sure, he was hardly alone. Until recent years, even for Republicans, spending federal funds on folks back home was a path to re-election. But now in a GOP primary, it's fodder for opponents.

SEN. JOHN MCCAIN (R), ARIZONA: I believe that earmarking is a gateway drug to corruption, and Senator Santorum supported it and engaged in it as much as he possibly could.

(END VIDEOTAPE)

BASH: Now, to be clear, there is no evidence that Santorum's earmarking led to corruption and he now says he supports the Senate earmarking ban, which, of course, went into effect long after he was defeated from the Senate and Santorum also points out, this is important, Wolf, you know this, that earmarking when it existed, it was less than 1 percent of the budget. He says the real issue should be entitlements and other big areas of the budget that he says he wants to slash and some of his opponents don't.

BLITZER: And just be precise, for people who don't follow earmarks like you and me, this is not money in his pocket. This is money that went to various projects in the state of Pennsylvania.

BASH: Exactly. It's bringing home the bacon to your constituents to say I'm in Washington, working for you. Look, I got you this highway. Look, I got this project. Look, I got you this bridge.

BLITZER: Nothing illegal about that. That's the way business was always done.

BASH: And now, it doesn't exist anymore.

BLITZER: That's correct. Dana, thank you.

Important changes in the job market, details of a new report on hiring. What's inside caught a lot of experts by surprise.

And chilling allegations by a Syrian defector. He says the government of al Assad spent so much money slaughtering its citizens. It was forced to make huge budget cuts.

(COMMERCIAL BREAK)

BLITZER: A former president now on trial for his life.

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

What's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Yes, that's right, Wolf.

Hosni Mubarak could face death by hanging. Today, prosecutors formally requested the death penalty for the deposed Egyptian president, along with the country's former interior minister and four aides. Mubarak is accused of ordering protesters killed during the uprising that ousted him last year. He denies the charges.

And the private sector went on a hiring spree in December. The payroll processing company ADP reports 325,000 were added last month, the biggest gain of its kind in a year. The government's jobs report will be out tomorrow.

The news, though, have little impact on Wall Street. The Dow Jones was down just under three points at the closing bell just a few minutes ago.

And Casey Anthony's attorney is confirming that a video circulating on the Internet is in fact the Florida mother who was acquitted last July of murdering her daughter, Caylee. The video diary marks the first time the world has heard from her since then and it reveals a different look. Anthony doesn't say where she is, but doesn't mention her daughter.

(BEGIN VIDEO CLIP)

CASEY ANTHONY, ACQUITTED OF MURDER: Just a little surreal of how much things have changed since July and how many things haven't changed. The good thing is that things are starting to look up and things are starting to change in a good way.

(END VIDEO CLIP)

SYLVESTER: Definitely a different look there.

Well, Anthony's attorney says the video diary is part of her counseling, but she didn't authorize its release, Wolf.

BLITZER: Lisa, thanks very much.

The Pentagon is ordered to tighten its belt as the U.S. prepares to make major changes in overall military strategy.

We'll also hear from a Syrian defector, a former government official, who offers a chilling insider's view of the slaughter that's underway on the streets of Syria.

(COMMERCIAL BREAK)

BLITZER: A major shift in military strategy. President Obama announcing sweeping plans today that will change a lot about the way the United States wages war.

Our Pentagon correspondent Chris Lawrence is joining us with details.

Chris, what's in store?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, more investment in technology like unmanned submarines and fewer boots on the ground, to such an extent that the U.S. will no longer pursue the ability to wage two full ground wars at the same time.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): In a rare appearance at the Pentagon, the president promised to increase U.S. military presence in Asia.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Budget reductions will not come at the expense of that critical region.

LAWRENCE: The cuts come elsewhere. Sources say an entire brigade could be brought home from Europe. There would be 40,000 fewer soldiers and Marines minimum, with more reductions likely.

The Obama administration and Congress are cutting the Pentagon's budget by half a trillion to potentially a full trillion dollars.

LEON PANETTA, SECRETARY OF DEFENSE: Fiscal crisis has forced us to face the strategic shift that's taking place now.

LAWRENCE: Perhaps most controversial, the military will no longer prepare to fight two ground wars at once. Critics say that could alarm U.S. allies to embolden enemies in a world where crisis points could explode at the same time.

Iran recently ordered U.S. Navy ships out of the region. There's been rising tension with Pakistan, which has nuclear weapons and an increasingly radicalized population. And for now, no one knows what to make of the new leader of North Korea.

PANETTA: Reality is, you could face a land war in Korea and at the same time, face threats in the Straits of Hormuz.

LAWRENCE: Or vice versa. The Pentagon says it would still be able to spoil the tensions of hypothetically North Korea while in full combat with Iran.

ANDREW KREPINEVICH, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS: As we began to wear down the Iranians, we could begin the shift forces toward Korea.

And again, even though we wouldn't bring full combat power to that North Korean contingency from the outset of the conflict as much as we would think is needed, over time, we would certainly have that ability.

LAWRENCE: But the Pentagon provided no details on dealing with the elephant in the room. The spiralling cost of pay and benefits for troops and their families.

(on camera): If personal costs keep rising at the rate they have been, where's the military going to be in the future?

TODD HARRISON, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS: What will happen is by the year 2039, the entire defense budget would be consumed by pay and benefits for military personnel and retirees. Of course, we can't let that happen.

(END VIDEOTAPE)

LAWRENCE: And Secretary Panetta says nothing is off the table when it comes to reducing personal costs. Now an official told me that current troops likely will see no change to the retirement package they were promised when they got in.

But Wolf, troops who come in later down the road could see a very different benefits package when it comes to retirement health care, things like that.

BLITZER: Chris, I just want to be precise. When they say they're going to cut a half a trillion or a trillion dollars over the next 10 years, shall we say.

What they're saying they're going to be -- these are going to be cuts of projected increases. There's going to be an annual increase in defense spending every single year.

In other words, the U.S. is going to be spending more next year and the year after than it does right now, but it won't be spending as much as some planners originally wanted.

LAWRENCE: That's right, Wolf. If you're just talking dollar for dollar, the dollars are going up, but again, from what was projected, that number is going to come down.

It could come down even more if Congress does that whole sequestration thing and takes the full, you know, $500 billion or $600 billion on top of what's already been done.

BLITZER: Let's keep it in perspective as the president himself said today. The United States spends more on defense than the next top ten countries combined. The U.S. is still outspending everybody else on earth when it comes to military expenditures. The president made that point, right?

LAWRENCE: Exactly, Wolf. I mean, you talk about China. Everybody makes a really big deal about the increases that China has been showing in their military expenditures, but about a year ago, there were reported spending about $90 billion where the U.S. budget that year was $690 billion, so still a wide, wide gap.

BLITZER: It was good to see the president in the Pentagon briefing room. I spent a lot of time there personally during the first Gulf War as a lot of our viewers probably remember. Chris, thanks very much.

Now that U.S. troops are out of Iraq, the lid is off and a ferocious wave of sectarian violence is exploding. Attackers killed at least 60 people today. The worst bloodshed came in a suicide bombing targeting Shiite pilgrims.

And Arwa Damon is joining us once again from Beirut. Arwa, you just go there from Iraq a few days ago. It looks like the situation is going from bad to worse. This country is teetering on a civil war. What's going on?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: And Wolf, what's going on is very much most Iraqis worst nightmare. The violence seems to be absolutely endless. The targets of today's attacks were the Shia population, by and large, civilians and the pilgrims.

This is tormenting those fears that a civil war could break out once again. Let's remember that al Qaeda is still active and you have extremists on both sides of the spectrum, Sunni and Shia, who believe that the way of power is through violence.

When this happens against this backdrop of this political crisis the country is going through, it creates an utterly desperate situation for the population.

The bottom line, Wolf, is that when it comes to Iraq, violence is not going to be revolved unless the politics are. The politics, right now the government are in utter shambles.

BLITZER: It looks like total disarray. All right, Arwa, from Iraq to Syria, you filed just a little while ago, an amazing report about a high level Syrian government military defector. I want to play your report. Listen to this.

(BEGIN VIDEOTAPE)

DAMON (voice-over): In the Syrian capital, the Defense Ministry is the nerve center of the regime's efforts to stamp out unrest.

MOHAMED SULEIMAN AL-HAMAD, SYRIAN GOVERNMENT DEFECTOR (through translator): My office is on the 12th floor of the Ministry of Defense.

DAMON: Mohamed Suleiman Al-Hamad worked at the ministry for years. His official I.D. describes him as a financial inspector. Not part of the regime's inner circle, but in a position to see the wheels of repression at work. AL-HAMAD: During protests in Damascus, armed gangs filled the green public transport buses and dispatched from our offices flanked by four-wheel drive vehicles, filled with weapons.

DAMON: And those they didn't kill, they brought back.

AL-HAMAD: On a daily basis, I used to see them bringing in blindfolded and handcuffed detainees on buses. They were kept in underground prisons. Some even built under streets.

DAMON: And he makes this chilling allegation.

AL-HAMAD: What's more horrific is the intelligence vans carrying the red insignificant labeled Red Crescent drive through the protests as ambulances and fire at the protesters.

DAMON: Hamad said he oversaw spending at the Defense Ministry. He tells CNN that the regime hired hitmen paying them $100 a day. It spent so much on the security crackdown that the budgets of other ministries had to be cut by a third. Hamad said for a while he hoped there would be compromise.

AL-HAMAD: We were hoping the killing would stop and the regime would understand that the revolution will win and maybe find a way to appease the people. There was no hope.

DAMON: As a climate of fear took hold, he decided to get out.

AL-HAMAD: So I traveled to Egypt through the airport normally with the excuse of registering my son in college in Egypt. When the rest of my family followed me, I announced my defection in protest of what is happening in Syria.

DAMON: Much of the carnage he blames on the intelligence services and armed gangs, not regular troops.

AL-HAMAD: Bashar Al-Assad is no longer able to control these human monsters.

DAMON: Two weeks after he fled Syria, Al-Hamad has this message for the outside world.

AL-HAMAD: We have received a phase of genocide and this can't be tolerated under any circumstances.

(END VIDEOTAPE)

BLITZER: Genocide. Arwa still with us. Arwa, he uses that word, it's a powerful word, genocide. We know of at least 5,000 or 5,500 according to the United Nations, civilians, innocent people protesting have been killed.

But tens of thousands have either been arrested or disappeared. Genocide, is that what's going on right now?

DAMON: Well, that's at least what he's describing it at and that's what activists are warning of saying that this is genocide just happening at a very slow phase.

But if nothing is done, it most certainly is going to be by the time the regime is done quite simply because the activists say that the regime is not going to stop until every one of them has been killed and they are just as determined to keep going to the streets.

The situation, Wolf, is so dire. It's incredibly difficult to put into words, but when you speak to these activists, when you hear the desperation in their voices as they're crying out for help from anyone who's willing to listen.

And their determination in taking to the streets, every day, their bravery has to be commended, but there has been to be some sort of action taken to end the violence.

BLITZER: These Arab League observers, is this a total joke or is there anything serious there?

DAMON: Well, the commander of the Free Syrian Army, that is the army -- opposition army that is largely made up of defectors called the Arab League mission a mockery. Said we could be anticipating large scale attacks by the Free Syrian Army against Syrian government interest.

Activists have been so disappointed to a certain degree, disgusted with the Arab League. They had hoped that they would somehow be able to bring about an end to the killings or at least reduce them.

But the numbers have not really gone down and many of them who have come across the Arab League observers say at best, they'll nod their heads, very few of them actually taking notes.

Many of them brushing them off, one activist said that he felt as if the Arab League observers were tourists and they, the activists, were forced to run after them like beggars, Wolf.

BLITZER: Terrible situation. Arwa Damon watching it all for us unfold. Arwa, thanks very much.

And we're going to get a lot more on Syria and Iraq and Iran and North Korea for that matter. Coming up in our next hour, the British Defense Secretary Phillip Hamid is here in Washington and will join us in THE SITUATION ROOM.

And if still in the race, what is Rick Perry doing back in Texas? Today and tomorrow are critical days, instead of out there on the campaign trail? Donna Brazile and Mary Matalin, they are both standing by live. We'll discuss in our "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: Let's get to our "Strategy Session." Joining us now are CNN political contributors, the Democratic strategist, Donna Brazile and the Republican strategist, Mary Matalin.

All right, guys, I want you to listen to this ad. It really blisters Mitt Romney for flip-flopping. Listen to this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I believe that abortion should be safe and legal in this country. I will preserve and protect a woman's right to choose and devoted and dedicated to honoring my word in that regard.

I am pro-life, in favor of that legislation. You will not see me waivering on that or be a multiple choice, thank you very much.

You can go back to YouTube and look at what I said in 1994. I never said I was pro-choice, but my position was effectively pro- choice. I've said that time and time again.

We do have tough gun laws in Massachusetts. I support them. I support the second amendment. I purchased a gun when I was a young man.

Small, small environments, if you will. Look, I was an independent during the time of Reagan-Bush. It's time for Republicans to start acting like Republicans. I'm not trying to return to Reagan- Bush.

(END VIDEO CLIP)

BLITZER: Masterpiece theatre. All right, Mary, do you know who's behind that ad?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: No, I do not. I was going to ask you, Wolf. You do all the best reporting. It doesn't really matter because they're all going to make the same arguments.

BLITZER: You know, Donna, do you have any idea who's behind that ad?

DONNA BRAZILE: No, I don't, Wolf, but we've known for a long time that Governor Romney's words would come back to bite him. The question now is can he explain exactly where he stands today on these issues?

BLITZER: Let me play the end of that ad for both of you. I want to discuss this. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm John McCain and I approve this message.

(END VIDEO CLIP)

BLITZER: Mary, you got a smile coming up on your face. That was from the 2008 campaign. The Newt Gingrich folks are circulating that ad right now. But that was a John McCain attack on Mitt Romney. The same man he endorsed yesterday in New Hampshire. How do you explain that?

MATALIN: Explain that the 75 percent ABM, anybody but Mitt, still think the way to knock him out is by his previous infidelities to come conservative litmus test.

Romney has had plenty of practice, which is evidence by this being an old spot in explaining away his previous positions on those litmus test, but at the end of the day, whatever his hypothesis are going backwards going forward, he still and elections are always about the future.

He still has a big case to go forward and he's got plenty of practice explaining away backwards and the bottom line is this is not going to be a social issues campaign. That's not the say the activism and the fidelity to those issues goes away, but it's an economic issues campaign.

So we're in the primary and that's what's going to be unfolding in front of us, but I don't think that changes the dynamic of the race.

BLITZER: Here's how John McCain, Donna, explained himself earlier today. Listen to this.

(BEGIN VIDEO CLIP)

SENATOR JOHN MCCAIN (R), ARIZONA: We had a very tough primary in 2008 and that's politics, but as soon as that campaign was over, nobody worked harder or supported me more than Mitt Romney did.

I have watched him grow and accomplishment as a campaigner and I agree with him on issues. I think he is best suited to run this country and frankly, the best chance we have against president Obama in the general election.

(END VIDEO CLIP)

BLITZER: Do you agree with John McCain? He's the best chance the Republicans have to beat President Obama?

BRAZILE: Well, look, John McCain was a gracious loser in 2008 and right now, he's trying to work hard to help Mitt Romney. The problem with Mitt Romney is that it will come back to haunt him and even his own economic record is suspect with 47 out of 50 states when he was governor in job creation.

He still can't explain the jobs he created while serving at Bane Capital. I think Mitt Romney will have a lot of challenges next week. One, of course, is that he cannot eke out a small victory. He has to win big in New Hampshire and hope that the conservatives split the vote in South Carolina.

BLITZER: Speaking of South Carolina, those are live pictures of Mitt Romney with John McCain. They're campaigning together in South Carolina. Goes to show you how a tough campaign for the Republican nomination in 2008 all of a sudden, they're working together to help Mitt Romney right now.

But let me ask you this about Rick Perry, Mary, right now. He says he's still in this race, yet he's hanging around Texas today and tomorrow he's not going in New Hampshire for those debates until the weekend, then he's going to go to South Carolina. If he's really serious, why is he in Texas instead of campaigning?

MATALIN: Because Rick Perry has, there's still a path for him, but he has a very reduced minimal margin of error. He has to do well in the debates. He's not going to do anything in New Hampshire. There's infrastructure on the ground for him in South Carolina.

There is support. It's not a Romney state. He did not get Nikki Haley, which he was expecting to, so that was a blow to him. But there's still a very, very stout resistant to letting this, letting Romney waltz into this and Perry has, and Bachmann got out, which advantages Perry as well.

If he were in New Hampshire fooling around to no good or he wasn't preparing for the debates or he was in South Carolina just going to events, where he has an infrastructure, he can let that do the work. He's on the air. When he goes out again, he has to go out and be a defcon 1.

BLITZER: I know, Mary and Donna, they're both getting ready to head out to New Hampshire as well. We'll be checking in with both of you from there if not sooner. Guys, thanks very much.

Jack Cafferty is asking why do people give money to candidates who have no chance of winning? Your e-mail coming up next.

And a 14-year-old American girl who doesn't even speak Spanish is deported to Colombia, but there's a truly stunning story behind the story.

(COMMERCIAL BREAK)

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

CAFFERTY: The question this hour, Wolf, is why do people give money to candidates who have virtually no chance of winning the election?

Annie in Atlanta writes, "Stupidity and ignorance and there are certainly people out there who know how to take advantage of a good thing when they see it. How much is Sarah Palin worth now? What a racket."

Richard in Texas writes, "They are wishful thinkers and they believe that if enough people think like they do, then their candidate might have a shot. They surely wouldn't go far without donations now, would they? Poor people don't run for president and usually, the one with the most money wins. Not the best candidate."

T in Oklahoma says, "Because they can. I donate to anyone whose views match mine regardless of the state they live in. It's so they can be given a platform."

Janet in Oregon writes, "I would guess it's the same reason people sit in front of their television sets writing checks to tell Evangelists. They aren't using their brains. They're expecting their donations will create miracles. With just a little use of their available thought process, they'd realize they're merely helping the rich get richer and in no way are they helping themselves."

Brian says, "I'm not entirely sure, but if we look at what's happening with Santorum, people are doing it with a hope he gains on a frontrunner. Additionally, it's a way to feel empowered to fortify your beliefs and support those of like mind."

And Jeffrey in Ohio says, "I've done this myself a few times usually because none of the above wasn't a ballot option."

If you want to read more about this subject, you can find it on my blog, cnn.com/caffertyfile or go to our posts on "THE SITUATION ROOM'S" Facebook page -- Wolf.

BLITZER: Will do, Jack. Thank you.

He's riding high after Iowa. Now, Rick Santorum is taking on Mitt Romney in his on stronghold. Can Santorum pull off another strong showing in New Hampshire?

And up next, a 14-year-old American girl, get this, deported to a country where she doesn't even speak the language. How could this happen? We'll explain.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring other top stories in THE SITUATION ROOM right now. Lisa, what else is going on?

SYLVESTER: Hi, there, Wolf. Well, Cuban state media is blaming a Spanish Twitter user for starting a rumor that Fidel Castro had died.

The user is denying it and his Twitter activity showed that he merely re-tweeted the claim that Castro's death had been confirmed. The tweet began to circulate Monday leading state media to claim the enemies are trying to assassinate Castro in the virtual world.

The researchers have started manufacturing a new vaccine against HIV for human trials after finding success with an experimental vaccine in monkeys.

Two studies published today in the "Journal Nature" detailed the success against an HIV-like virus. The vaccines dramatically reduce not only the chance of infection, but also the amount of virus infected monkeys had in their blood.

And Prince William's wife is stepping up her public role. Katherine, Duchess of Cambridge, has chosen three charities to support as patrons.

They include the National Portrait Gallery, a group that supports fighting addiction and The Children's Art Therapy Program. She'll make public appearances on their behalf and help raise awareness and funds.

And when was the last time you had a roll of film developed? Well, it's probably been a while and Kodak is suffering because of it.

Now its stock is plummeting after a report that it's preparing for bankruptcy. In October, the company warned it could run out of cash if it couldn't sell a number of digital patents. A spokesman says the company doesn't comment on rumors -- Wolf.

BLITZER: It's amazing what's going on Kodak. Who would have thought? Not that long ago, a company like Kodak, Lisa, you've covered the business world for so long and the technology, I guess, simply changed.

SYLVESTER: Yes, there are so many of these key brands, but you look and see everybody takes digital pictures right now. So the old fashion form of going to take a picture with actual film turning that into, say, to the drug store to get it developed. Those days are long gone.

And that's the problem that Kodak has. A number of companies as you mentioned, Wolf, are in that same boat where they're going to have to evolve or change. We see lots of companies, Netflix is another company, under pressure now as there are lots of changes technologically speaking -- Wolf.

BLITZER: Yes, Polaroid, you remember those Polaroid photos. Who would have thought? All right, Lisa, thanks very much.

Let's take a look at this hour's "Hot Shots." In Bangladesh, people look over the scene of a ferry that capsized due to overloading. In the Netherlands, a man peers out his window as flood waters rise.

In Tokyo, contestants compete in an annual New Year calligraphy contest. In Hongkong, African children dance and performed kung-fu as part of a cultural exchange program. "Hot Shots" pictures coming in from around the world.