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THE SITUATION ROOM

Whitney Houston Investigation Continues; Santorum Tied With Romney; Sources: Deal Near on Payroll Tax Cut; Romney, Santorum Set Sights On Michigan; Ad War Heats Up In Michigan; Voters Not Enthusiastic About Romney; How Will Gas Prices Effect Obama's Reelection Chances?

Aired February 14, 2012 - 16:00   ET

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


JESSICA YELLIN, CNN ANCHOR: Happening now: new poll numbers are just coming in. And they reveal a dramatically altered Republican race.

Also, the high-stakes meeting that could set the tone for U.S. relations with China for years to come.

Plus, details released about Whitney Houston's funeral, as ex- husband Bobby Brown speaks out about her sudden shocking death.

Wolf Blitzer is off today. I'm Jessica Yellin. You're in THE SITUATION ROOM.

Just into THE SITUATION ROOM, brand-new poll numbers confirming a new lineup in the fight for the GOP presidential nomination. The CNN/ORC survey has just been released and it shows a two-man contest at this point between Rick Santorum and Mitt Romney. The poll shows 34 percent of Republicans asked say Santorum is their choice for nominee, 32 percent say Romney. With a sampling error, that means it's a statistical tie. Ron Paul and Newt Gingrich are far behind at 16 and 15 percent.

Let's dig deeper into these numbers with CNN senior political analyst Ron Brownstein, who is editorial director of "The National Journal."

First, big picture, Ron, what do you make of Santorum's rise?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I think the first in terms of the big picture is this continues the extraordinary, even unprecedented volatility of this Republican race.

Jessica, if you look back to your CNN/ORC polling starting in January 2011, Rick Santorum is the sixth different candidate to be ahead in the national polling, and he's the seventh different candidate to be leading among people who identify with the Tea Parties. That is a level of volatility that is simply unprecedented in the modern era in a Republican race.

He is up 19 points since January alone in the survey and it just really underscores how unsettled this Republican race is, probably the most unformed of any at this point this deep in the contest since 1940, when Wendell Willkie emerged at the end to be nominee.

YELLIN: You're always good with the historical data, Ron. This one that actually takes you to my next question. Because this number jumped out at me. When we asked do you strongly support your candidate, the poll came out with 55 percent said yes for Santorum; only 38 percent of Romney supporters said they feel strongly in support of Romney.

How dangerous is that for Romney and what does it portend if he should start to lose more states?

BROWNSTEIN: Our cover in "National Journal" after Iowa was heart vs head. This seems to take us right back to where we were in January.

On two other questions in this poll, Romney did much better. Most Republicans still think he will win the nomination and most Republicans still think he's a better bet against President Obama in November. But there's a clear enthusiasm gap on that question, and another one. When you ask, would be enthusiastic if this person is the nominee, many more people, about a third said Santorum, and only a fifth said Romney.

He does face an enthusiasm gap in this race and it's part of the problem that he is confronting. If he loses in Michigan in two weeks, a state he won in 2008 and state where has a home court advantage, I think you will see an earthquake in this Republican race beyond anything we have seen so far even with all this volatility.

YELLIN: And this next question plays into Michigan. When we ask blue-collar vs. white collar voters, blue-collar voters, 36 percent of them say they support Santorum for nominee, 31 percent of white-collar voters go to Santorum, but Romney has the edge among white-collar voters.

What does that tell you? It sort of plays into a narrative we have been hearing lately.

BROWNSTEIN: Absolutely.

The modern Republican electorate is very different than it was 20 or 30 years ago. There are two wings in the party, an upscale, managerial, white-collar socially somewhat more moderate, less religious wing. And Romney does pretty well with those voters. He's done well with college educated voters in all the primaries and caucuses, primaries at least so far, well with upper income voters.

And he struggles much more in the blue-collar populist half of the party that is more Tea Party oriented, more evangelical Christian, more socially conservative. And you see that again in these numbers here today. In Michigan in 2008, almost 60 percent of the Republicans voters did not have a college degree, again a reflection of the changing nature of the party.

That's why that's terrain that could be responsive to Santorum, but it's worth noting as you say that although Romney has struggled downscale, Santorum really hasn't made the sale there, even though his background and his agenda would seem to make him a stronger candidate with those voters. He has yet to really prove it where the rubber meets the road.

YELLIN: Michigan could be the state where we see how this all shakes out or not, because this one always surprises all of us. OK. Thanks, Ron, so much for being with us, Ron Brownstein with "The National Journal."

(CROSSTALK)

YELLIN: Over at the White House today, very different game, a high-stakes game being played with high-level diplomacy as President Obama welcomed China's heir apparent.

The meeting comes at a time of tension between Washington and Beijing over multiple issues.

CNN White House correspondent Brianna Keilar has the details.

Briefing, it was a series of important meetings there today, wasn't it?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: A series of important meetings and this entire visit is hugely important, because the vice president of China, Xi Jinping, is expected to take over the reins from President Hu Jintao very soon and be in control for really the next decade. This is the expectation.

This is a very complicated relationship. Getting along is a must. But there's a lot of tensions as you mentioned from everything from trade from the military -- or U.S. military presence in Asia I should say as well as human rights.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Outside the White House and on a bridge not far appear, protesters gave Chinese Vice President Xi Jinping a not- so-warm welcome to Washington.

Inside the White House, a very different scene.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: I welcome your entire delegation.

KEILAR: As Vice President Biden welcomed Xi, and President Obama met in the Oval Office with the man widely expected to become president of China later this year.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is obviously a great opportunity for us to build on the U.S./China relationship.

KEILAR: But both men are walking a line, two rival powers stress cooperation, but also sizing each other up.

OBAMA: We have tried to emphasize that because of China's extraordinary development over the last two decades, that with expanding power and prosperity also comes increased responsibilities.

XI JINPING, CHINESE VICE PRESIDENT (through translator): And I hope to engage with a broad cross-section of American society during my current visit, so as to deepen mutual understanding, expand consensus, strengthen cooperation, and deepen the friendship between the Chinese and American people.

KEILAR (on camera): Is that the biggest objective here, to establish a rapport and an open a line of communication?

BONNIE GLASER, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Yes, the biggest objective for this visit is an investment in the future of our relationship with China, and a getting to know you for President Obama and Xi Jinping.

KEILAR (voice-over): Xi is expected to head up China for the next decade and U.S. interests in the country are wide-ranging. A trade imbalance and China's undervalued currency are sticky issues, and so is this.

OBAMA: Some of our Marines will be rotating through these parts to train and exercise with you.

KEILAR: This past fall, President Obama announced a new U.S. military presence in northern Australia. And China, a growing military power, is watching the move right in its neighborhood with suspicion. As the U.S. tries to weaken Iran economically in an effort to stop it from getting a nuclear weapon, China is Iran's largest oil customer.

GLASER: I think President Obama and Vice President Biden will be sending a message that whatever China does with Iran, it shouldn't be undercutting these sanctions. As other countries like Japan, South Korea and some of the European countries, reduce their imports of oil from Iran, we do not want the Chinese to backfill.

(END VIDEOTAPE)

KEILAR: Next stop for Vice President Xi, Iowa, where he will go and talk agriculture. He visited Iowa in '80s as a local official and then he will head next at the end of the week to Los Angeles where President Obama sort of let it slip today he may take in a Lakers game. Maybe some fun. We will see.

YELLIN: I love that. And there's some Iowa jokes over at the White House today too I heard.

China's leader, he has an interesting personal biography. Tell us a little bit about what you know of him.

KEILAR: It's really fascinating. He's sort of like communist royalty.

He was born to a Mao era revolutionary hero, but in his teens he got sent out into essentially the countryside to work in a very poor environment when his family sort of fell out of favor. Ultimately, though, worked his way back. He ended up marrying a very famous Chinese folk singer. Xi's daughter goes to Harvard, which of course you went to as well, Jessica.

And there's a question. And I think the big outstanding question when it comes to Xi is in the '80s he started China's economic zone, so there's these questions whether he will move China to modernize, and it may be years before we really know the answer to that question.

YELLIN: Fascinating. We will be watching his trip while he is in the U.S. through all stops. Thank so much, Brianna, for the report.

On Capitol Hill, the talk about China was less diplomatic as the chairman of the Joint Chiefs of Staff testified before the Senate Armed Services Committee.

Listen to this remarkable exchange between General Martin Dempsey and Republican Senator Lindsey Graham of South Carolina.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Well, let's say, if we could find that the People's Liberation Army was involved in hacking into our defense infrastructure, would you consider that a hostile act by the Chinese?

GEN. MARTIN DEMPSEY, JOINT CHIEFS OF STAFF CHAIRMAN: I would consider it to be a crime. I think there are other measures that could be taken in cyber that would rise to the level of a hostile act.

GRAHAM: What would they be?

DEMPSEY: Attacking our critical infrastructure.

GRAHAM: And that could be a hostile act?

DEMPSEY: I think so.

GRAHAM: Allowing us to respond in kind?

DEMPSEY: Well, in my view, that's right. Yes, sir.

GRAHAM: So I'm going to have lunch with the vice president of China in about 20 minutes. So what do you want me to tell him?

DEMPSEY: Happy Valentine's Day.

(LAUGHTER)

GRAHAM: OK. All right.

(LAUGHTER)

OK, I will do that.

(END VIDEO CLIP) YELLIN: That lunch took place at the State Department. No word if Senator Graham passed on the message.

And on to a story that we have been following since this weekend's tragic news. Whitney Houston's death remains a mystery, but we're getting new details on how the pop icon's life will be celebrated. Her family and friends will gather this weekend for a private funeral service.

Our Don Lemon is in Los Angeles, following the story since it broke.

Don, tell us the very latest. What do we know now about the arrangements?

DON LEMON, CNN ANCHOR: Hey, Jess, how are you?

I want to tell you we're just getting some information in, and this is the latest information, that New Jersey Governor Chris Christie says he intends to order the state's flags flown at half- staff during Whitney Houston's funeral. That's the very latest and that's just coming into CNN here, so the flags will be flown at half- staff.

What we know is what you said. There will be a private service. Originally it had been reported by a local paper there that the service, the funeral and memorial was going to be at the Prudential Center and it would be public. Not so.

According to the Wingham funeral home, which is handling the body and handling the arrangements, it will be a private service at New Hope Baptist Church, which is Whitney Houston's childhood church, which is where she grew up singing in the choir. Her mom was a choir director there. There will be a motorcade. The route hasn't been established yet. Everything is still in flux, and the burial will be private.

I have to tell you, Jess, I have been online on my social networking pages, on all over, and people are -- a lot of her fans are not happy about it, because they have wanted to say goodbye and pay their respects to Whitney Houston as well. It will be Saturday at noon, by the way.

YELLIN: Saturday at noon, but they won't get a chance to see it publicly. So are there any new developments on the investigation into her death?

LEMON: Well, we did find out -- yesterday, you and I talked, we spoke, and they said an hour before her death, her assistant was in the room and saw her alive and well.

We're finding out who that assistant is. And it's what's CNN has been reporting all along. And others have been saying it was a family member. We said it was an assistant member of the staff. We were right. It was someone they call aunt Mary. She's not really a family member. It's her assistant. It's Mary Jones. We're finding out. I spoke to the coroner not long ago and I asked him about all the things that are going around about the prescription drugs from different pharmacies, and all of that and he said, listen, Don, and I'm paraphrasing, but he said, listen, at this point we're still looking into all of that, we're trying to find her medical records and get all of he medical records, complete medical records and who her doctors were, et cetera.

Then he said, again, Jess, six to eight weeks. I said, come on, it doesn't really take that long. I'm hearing it only takes a couple days. And he said, Don, you're right, we do get preliminary results back one, two, three days, but we still have to go over those because sometimes some things will spike , some medications and some drugs and then we go back and have to retest, so it will take a while. Just be patient, and let the investigation play out and then we will all know.

Right now, and this is according to him and a lot of people, we should be paying respects to Whitney Houston and finding out the details as they come in and as they come in accurately.

YELLIN: So they're asking us to all quiet down on the speculation about whether there was any drinking or drugs in her final days, is the bottom line?

LEMON: Yes. Absolutely. That's what they're saying.

We're talking about drinking and drugs. The drinking part, her friends do confirm that on the evening, Thursday evening when she went to the Tru nightclub and you see the pictures of her on stage and you saw the video of her singing with Kelly Price, they do confirm and they say she had champagne, champagne was flowing.

I just spoke with the young man who shot that videotape, Steve, in the green room here in our Los Angeles bureau, and he said, yes, I say Whitney, she had consumed some champagne. She didn't look out of it, but she was dancing around like I had never seen her before.

Jess, I went to that club yesterday. One of the managers said, hey, this club was filled almost to capacity, 400 people in here, people were clawing, trying to get to Whitney Houston, didn't seem out of the ordinary to him, but most of the people who left the club were pretty sweaty.

YELLIN: All right, Don, thanks so much for your reporting now and throughout the weekend. You have been doing just an amazing job. Thanks so much, Don Lemon.

LEMON: Thank you, Jess.

YELLIN: Gas prices and President Obama's reelection odds. Jack Cafferty is standing by with "The Cafferty File."

Also, breaking news from Capitol Hill -- word of a deal that impacts almost every American who gets a paycheck.

Plus, the battle for Michigan, once thought to be in the bag for Mitt Romney, but no more. James Carville and Rich Galen are standing by for our "Strategy Session."

(COMMERCIAL BREAK)

YELLIN: Well, gas prices and President Obama's reelection odds. Jack Cafferty is standing by with "The Cafferty File."

Also, breaking news from Capitol Hill. Word of a deal that impacts almost every American who gets a paycheck.

Plus, the battle for Michigan, once thought to be in the bag for Mitt Romney, but no more. James Carville and Rich Galen are standing by for our strategy session.

(COMMERCIAL BREAK)

YELLIN: Jack Cafferty is here now with "The Cafferty File."

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Jess, Americans paying at the gas pump could mean paying in the voting booth for President Obama come November. The national average for regular unleaded gasoline is $3.52 a gallon right now, according to the Energy Department. That's up more than 4 cents from a week ago.

But experts are saying that this summer, gas prices could go higher, much higher, record highs. Gasoline could top $4 a gallon by June. In some places, they say, it could be near 5 bucks, $5 a gallon. Big cities like Chicago and San Francisco could be especially hard hit.

According to AAA, the all-time high was $4.11 a gallon in the summer of 2008. We could easily hit a new record high as summer driving season kicks into high gear and President Obama gets ready to face reelection. Consider that when President Obama took office in January 2009, gasoline averaged $1.79 a gallon. Gas has almost doubled since President Obama took office, and they're headed higher from here.

There are several reasons for all of this. Mainly the possibility of war in the Middle East, but there's also the closing of refineries, the increased demand for gasoline as summertime approaches, and the government requiring a switchover from cheaper winter gas formulations to more expensive summer ones.

But all those reasons aside, and whether it's fair or not, traditionally, the American motoring public tends to blame the guy in the White House for high gas prices. It's just the way it is.

So here's the question: if gasoline hits record prices by this summer, how much will it hurt President Obama's reelection chances?

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

YELLIN: OK. We'll check back in with you for those emails a little later, Jack. Thanks.

This just into THE SITUATION ROOM: there is word of a possible deal to extend the payroll tax cut as well as unemployment benefits.

CNN congressional correspondent Kate Bolduan is working that story.

Kate, hi. What do you know?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Hey there, Jess.

Well, just late this afternoon, we're getting really good indications, strong indications from top aides on both sides of the aisle in both the House and the Senate that key negotiators on this payroll tax fight that has been bruising and going on for months, the key negotiators are close to an agreement. Not only an agreement on extending the payroll cuts -- extending the payroll tax cut, but also on a package that would include the payroll tax cut extension extending unemployment benefits for the long term unemployed, as well as preventing a scheduled cut to the reimbursement rate that Medicare doctors receive.

These are three issues that have kind of been tied together in this long-fought battle, but this all comes just one day -- just to remind our viewers -- after House Republican leaders went -- reversed on their position, they dropped their demand, insisting that any extension of the payroll tax cut must be paid for by cutting spending elsewhere in the budget. After that surprising and sharp reversal by House Republican leaders, we're seeing this movement and potential progress, as is being told to me, on all three of these issues.

The payroll tax cut issue was the real stumbling block, holding up, moving forward on this full package. While aides caution, Jess, as they always do up here, that they're not there yet, we're getting strong indications that they're moving in the direction of a deal.

YELLIN: And any indication that -- you're saying that the Republicans would agree to all three without paying for any of it?

BOLDUAN: The indications I'm getting is that payroll tax cut would not be paid for. However, the other two elements, unemployment benefits, unemployment assistance, as well as the doc fix as it's called, those would be paid for by cutting spending elsewhere in the budget. The details on that are not yet released.

Why I'm standing in this unusual location for many of our viewers to CNN is House Republican leaders are actually scheduled to be meeting in the speaker's office behind me right now to discuss kind of the state of play. In two hours, they'll be meeting with all rank- and-file Republican members where this clearly is going to be a big issue, where they're going to be gauging where House Republicans stand. As you know, it can be a very tough sell with many conservative members on some of those Tea Party backed freshman members. So, we'll have to see the opinion of their members they had that meeting tonight, Jess.

YELLIN: It sure can. Great reporting, Kate. Keep us posted if you learn new details.

BOLDUAN: Of course.

YELLIN: Thanks so much.

And Syrians tell our Arwa Damon they're bracing now for full- blown war. Snipers on rooftops are terrorizing residents in one city under siege. Stand by for dramatic video of a man chasing after a young boy while bullets fly nearby.

And Rick Santorum is surging where Mitt Romney was raised. James Carville and Rich Galen weigh in as the ad war in Michigan heats up.

(COMMERCIAL BREAK)

YELLIN: Violence broke out across Iraq today, and a high- ranking official is among the dead.

Mary Snow is monitoring that and other top stories in THE SITUATION ROOM.

Mary, hi. Good to see you. What do you have?

MARY SNOW, CNN CORRESPONDENT: Hi there, Jessica.

An Iraqi army general was assassinated in Baghdad today. He is just one of at least four people killed alongside dozens injured in a string of attacks. Two roadside bombs also exploded in the capital and a car bomb that went off outside of popular restaurant Mosul was the deadliest incident. And despite the attacks, officials say violence has dropped dramatically in the last few years.

At least 40 people were killed across Syria today and that's according to opposition forces. Activists say the government began shelling the city of Homs at dawn and that is the heaviest attack the city has faced in days. Residents say snipers are keeping them from moving around and getting basic supplies.

And take a look at this.

(VIDEO CLIP PLAYS)

YELLIN: This is amateur video shows a man chasing after a child running down the street. You can hear the gunfire nearby.

CNN's Arwa Damon is in Syria. She says many people she's spoken to believe the country is heading toward or is already in a full-blown war.

And on Wall Street today, the markets end the day mixed. The Dow rebounded late in the trading day after falling early because of the worries about the Greek debt crisis and disappointing retail sales number. Americans were shopping more in January than December but by less than half a percent -- Jessica.

YELLIN: All right. Thank you, Mary.

The Michigan ad war is heating up with just two weeks to go before the primaries there. Will Mitt Romney try to crush Rick Santorum over the airwaves? We'll talk about that and more with James Carville and Rich Galen. That's next in our strategy session.

(COMMERCIAL BREAK)

YELLIN: Mitt Romney versus Rick Santorum. The latest polls show it's the latest incarnation of the tumultuous battle for the Republican presidential nomination.

A new lineup has formed as the candidates prepare for their next big skirmish, Michigan, which holds its primary just two weeks from today.

CNN's senior correspondent, Joe Johns, is following the Romney/Santorum rivalry for us, and it sure is a rivalry -- Joe.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Yes, and it's starting to look like a different race than just a few weeks ago, you know. The question of the moment though is whether Rick Santorum can find a way to hang on to build on his momentum despite the fact that Mitt Romney has a lot of money and a powerful organization.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): For Rick Santorum, this is what it looked like at the top, tied for the lead in the national polls in the race for the Republican nomination with "Occupy" protesters in Tacoma, Washington repeatedly interrupting a speech by the former senator.

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: We appreciate the opportunity to be out here, we appreciate all the voices that are here.

JOHNS: With no way to quiet the crowd, Santorum took them on.

SANTORUM: I think it's important for you to understand what this radical element represents. What it represents is true intolerance.

JOHNS: Though in this nomination race, the voices Santorum needs to be most worried about are from within the party, especially Mitt Romney who is refining how he describes his political leanings after calling himself a severely conservative governor didn't go over so well.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Conservative values were also part of my business experience because in business you don't have a choice about balancing your budget. You either balance your budget or you go bankrupt.

JOHNS: He also began his advertising argument to Michigan voters with a biographical ad in which he's seen driving his car explaining his roots in the state.

ROMNEY: I grew up in Michigan. It was exciting to be here.

JOHNS: Romney also put out an op-ed in the Detroit news where he explained his opposition to the government bailout of the auto industry pointing out that she supported managed bankruptcy, which is what he said ended up happening.

Now, though, he writes the government should dump the shares it holds in GM. The Romney op-ed riled up congressional Democrats and the state's Democratic governor who unloaded in a conference call.

JENNIFER GRANHOLM (D), MICHIGAN (via telephone): Mitt Romney turned his back on Michigan. I would say he stabbed us in the back during our darkest hour.

JOHNS: Polling of Republicans shows Romney is slightly behind Santorum in Michigan. Economist Peter Morici says Romney hasn't sold his message.

PETER MORICI, ECONOMIST: In Michigan where they somewhat sympathetic to activist government, a moderate conservative so to speak would serve well, but Mr. Romney simply is not the communicator he needs to be to be president.

JOHNS: The big unknown was whether Romney or his friends at the pro- Romney "Super PAC, Restore Our Future," would launch a barrage of anti-Santorum TV commercials to try to bury him the former senator in Michigan the way they buried the Newt Gingrich campaign in Florida. "Restore Our Future" has targeted Santorum before with this ad.

UNIDENTIFIED FEMALE: He's called the ultimate Washington insider.

(END VIDEOTAPE)

JOHNS: The pro-Romney "Super PAC" has spent considerable money on ads in Michigan as well as a number of other states as we move towards "Super Tuesday," March 6th.

I talked with that organization today. They won't say whether they're targeting Santorum with negative advertising. Also important to point out that Santorum has a couple state-wide ads in Michigan of his own.

Kind of introducing himself and talking about how he sees himself as having the best chances of the other candidates.

YELLIN: We're going to take a look at them right now in the "Strategy Session," but interesting piece.

JOHNS: All right, thanks.

YELLIN: And joining me today for that "Strategy Session," our CNN contributor and Democratic strategist, James Carville, really needs no introduction and Republican strategist, Rich Galen.

RICH GALEN, REPUBLICAN STRATEGIST: Who needs a long introduction. YELLIN: You need no introduction here, Rich. Rich was Newt Gingrich's press secretary when he was House speaker so we do have a little one for you.

OK, James and Rich, let's start with a little bit of sound from those ads we were talking about. First, let's frame it by saying that the Michigan primary is a little under two weeks away and these are the new ads for Romney and Santorum that are just going up to define them to Michigan voters. Look --

(BEGIN VIDEO CLIP)

ROMNEY: I grew up in Michigan. It was exciting to be here. I remember going to the Detroit auto show with my dad. It was a big deal. People here in Detroit are stressed. I want to make Michigan stronger. Michigan has been my home and this is personal.

UNIDENTIFIED MALE: Who has the best chance to beat Obama? Rick Santorum, a full spectrum conservative. Rick Santorum is rock solid on various issues. Rick Santorum, a trusted conservative what gives us the best chance to take back America.

(END VIDEO CLIP)

YELLIN: Rich, in a way the Santorum ad slightly takes a dig at Romney indirectly, and is a little more negative in that sense than the Romney ad.

GALEN: That's also unsupported. I mean, just to say you have the best chance because you're the most conservative, whatever a full- spectrum conservative is, I'm not sure.

But it seems to me that the Romney campaign, James, is following a more classic course, starting out with an ad identifying him in the way he wants to be identified to Michigan voters, reminding them that he is of Michigan.

And the Santorum campaign probably has less money. I'm sure it has less money and they think they need to come out swinging a little more dramatically.

YELLIN: James, you think they're going to stick with this positive tone, the Romney campaign?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: No, 92 percent negative in Florida, of course not. But I thought Santorum's spot was actually a better spot. I think it wasn't substantiated, but most people already have doubts about Mitt Romney being conservative enough.

And he was talking about beating Obama and taking America back, and you know, Romney's spot was executed and well done, but I think my gut is that Santorum's spot connect a little bit better with the people in Michigan.

YELLIN: But doesn't Romney need to hit a positive message because of these numbers with independent voters that have shown his popularity among independents has been falling as he's been negative? James?

CARVILLE: If he doesn't win the nomination, it doesn't matter what independents think. Right now, they have a fight of their life. They could care less. They had to win.

GALEN: Yes, Ron Brownstein made a great point in earlier segment Jes, when he said that there have been six or seven lead changes nationally among Republicans. That's like a 24 hour Le Mans.

I mean, this is going to go for a long time, and I think what we're seeing, at least these new ads, I suspect this is like, to change sports, this is like the first round of a 12-round heavyweight fight.

We'll see what happens as they feel each other out and the polls begin to take a little more shape as we get closer.

YELLIN: OK, as voters feel them out, let's look at the poll numbers. This is from CNN's brand new poll. When you look at enthusiasm in the Republican field, when we asked, are voters enthusiastic for their own nominee, for the person they back.

Only, if the GOP nominee is Santorum, 32 percent say they're enthusiastic, 21 percent say they're enthusiastic if it's Romney. And yet, look at this poll.

When you ask who has the best chance of defeating Obama, 55 percent say Mitt Romney. So it seems they're stuck between a rock and a hard place, Rich. Do you think the party wants Mitt Romney or how troubling are these numbers for Romney?

GALEN: Well, if he had the enthusiasm that he was looking for, from the conservative lean of the Republican Party, this would be over. If there's a reason this is going on, it's because 1 out of 5 at least in that poll say that they're enthusiastic about them. That's the crux of the problem.

YELLIN: And James, how much hay can the Democrats make with that number, with the enthusiasm problem that Romney has if he's the ultimate nominee?

CARVILLE: Well, look, I enjoyed that chart. All the numbers on all these candidates look pretty tepid to me. Remember we got slaughtered in 2010 with a huge enthusiasm gap. Most of the poll -- or maybe it might be trending a little bit in Democrats favor.

That has got to be good news, but you know, right now, to be fair to them, they're in the middle a real, real squabble here, and you know, they're getting to where they don't kind of like each other.

I suspect, I hope not, but legitimate possibility that they give the nominee and he goes to Tampa and the party unifies around them that could very well happen.

But I still think that Democratic enthusiasm come Election Day might if anything be a tad bit Republican. I don't know that for sure, but I suspect it.

YELLIN: OK, well, we'll keep talking about this. Will you both stick around for more "Strategy Session" on the other side of the break?

Mitt Romney, we know he is fighting for a win in Michigan, but he's reminding voters that he thinks government should have let the car makers go bankrupt. Is that the way to pick up support in Michigan?

And President Obama has a word of warning for men today. Hear his Valentine's Day advice ahead.

(COMMERCIAL BREAK)

YELLIN: We're back with more of our "Strategy Session: with Democratic strategist, James Carville and Republican strategist, Rich Galen.

So guys, I thought we would continue the conversation about Mitt Romney with an op-ed he wrote in today's "The Detroit News." In part he wrote that, quote, "The Obama administration needs to act now to divest itself of its ownership position in GM. The shares need to be sold in a responsible fashion and the proceeds turned over to the nation's taxpayers."

Well, CNN looked into this and found that taxpayers are already in line to get proceeds from a government sale of GM and in fact, if the government dumped GM shares that it owns now, taxpayers would be guaranteed a loss.

So he already set let Detroit go bankrupt when they were being bailed out. I guess, James, first to you. How do you think this one is going to play in Michigan?

CARVILLE: Not very well. It would really -- obviously it's popular if you work for GM now, and they're making very good -- and their share prices are off a bit. They're trading on the highs, and I they from the taxpayers' standpoint, I'm sure this would not be like the smartest thing to do, dumping a bunch of shares now.

But I don't know about that, but I do know this. It looks like if Obama was for it, then Romney has to be against it, and I think that might be not the real track to take, as opposed I'm glad it's working to the extent it is. Whatever he said he was for would have worked better then would have been a better approach.

YELLIN: Rich, we know the Romney people are smart. Mitt Romney has been an investor. This has to be about something more than --

GALEN: GM did go bankrupt and so did Ford went bankrupt. That's how we ended up -- we still own $25 billion worth of GM, the three of us. I hope you're enjoying it, but when you go bankrupt, people get hurt.

The unions didn't get hurt, and I think that's what's at the bottom of this dichotomy between what Romney is saying and what the president's people have done.

The bond holders were completely wiped out. Stockholders were completely wiped out. This isn't -- this isn't just a free shot. You don't say, OK, everything is going to be hunky-dory. Somebody lost a ton of money. A lot of people lost a lot.

YELLIN: What's the strategic point of saying this right before the Michigan primary for Romney, Rich?

GALEN: Well, because not everybody works at GM in Michigan. I mean, it's a pretty big state. Even people who do work at GM, a lot of them are not union employees.

So I think this may be some -- and I haven't talked to the Romney people about this, but it appears this may be an attempt to divide the union workers from the non-union workers.

CARVILLE: I think there are two things. Number one, I know you didn't mean to, but Ford never went bankrupt. It was Chrysler.

GALEN: Chrysler.

CARVILLE: Second thing is the union people took a big haircut. That's just not the case. I mean, a really, really big haircut, the whole thing and, you know, they -- they're doing better.

It actually looks like there are certain people mad that GM and Chrysler are doing better. I mean, you saw the big thing with Clint Eastwood and Karl Rove.

It looks like to people that the Republicans are pulling against Michigan are pulling against GM and Chrysler, and actually it was Ford that wanted them to do this because it would mess up the entire supply chain. This is why the Republicans -- they look angry that the car companies are doing OK now.

YELLIN: I have a feeling this will play in the general election in a big way if Mitt Romney is the nominee. Thanks to both you gentlemen. James Carville, Rich Galen, always a pleasure to talk to you.

GALEN: Thank you.

YELLIN: Bombs explode in Thailand and two men are arrested. Why Israel says Iran is behind it all. Also Texas Governor Rick Perry talks candidly about his political future in the wake of his failed presidential bid.

Plus the growing buzz about the iPad 3. It may be here sooner than you think.

(COMMERCIAL BREAK)

YELLIN: Israel is blaming Iran for more attacks today, this time in Thailand. Mary Snow is monitoring that and some of the other top stories in THE SITUATION ROOM. Hi, Mary, what do you have?

SNOW: Hi, there, Jessica. Well, Israel's defense minister says Iran is operating, quote, "In the ways of terror, after three bombings today."

Thai police say the first bomb went off at a house rented by three men. Two fled while a third was injured after he detonated two more bombs. Israel says two Iranian men are in custody.

Israel is on a heightened state of alert after embassy vehicles were targeted in incidents on Monday in India and the country of Georgia.

Here in the U.S., Chrysler is recalling nearly 10,000 police cars because the brakes and headlights could fail. They're the police versions of the 2011 and 2012 models of the Dodge Chargers.

The cars can overheat and caught the brakes and electronics stability system to fail, and a separate wiring issue can cause the head lights to go out.

If you're eager to hear details about the next generation of the iPad, you won't have to wait too long. New reports suggest that Apple will unveil the iPad 3 during the first week of March.

Sources at the next web say Apple is in crunch mode to line up apps that show off the new features. The iPad 3 is expected to have a new high-definition screen.

Herman Cain says he won't compete for the trophy on "Dancing with the Stars" that's according to the "Atlanta Journal Constitution." The spokeswoman for the former Republican presidential hopeful confirmed he was approached by the show, but he turned down the invitation.

Why? His assistant is quoted as saying, "He can't dance in an eight count, but only can dance in the nine count." Still not letting go of the 9-9-9 plan.

YELLIN: I totally missed that story, but wouldn't he have been great on that show?

SNOW: He definitely would be and I think he's going to be approached again, just guessing.

YELLIN: Someone will pick him up for something. That's a great story. Thanks, Mary.

Coming up in the next hour, new details of Whitney Houston's funeral, including a special honor bestowed by New Jersey's governor.

And up next President Obama's Valentine's Day warning. Plus Newt Gingrich's Valentine's Day plans.

(COMMERCIAL BREAK)

YELLIN: Here's a look at some of the other political headlines making news on the CNN Political Ticker.

President Obama has a word of warning for husbands and boyfriends everywhere on this Valentine's Day.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Let me start with a quick public service announcement for all the gentlemen out there. Today is Valentine's Day. Do not forget. I speak from experience here. It is important that you remember this, and go big. That's my advice.

(END VIDEO CLIP)

YELLIN: Go big. Well, Newt Gingrich was asked what he had planned for Valentine's Day. He was a little coy with his answer.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATES: Right after that question, I need something stronger than water. That's a great question. All I can promise is I believe she will be quite happy tomorrow night and we'll have a nice private -- I think the first time in a while we'll have a private dinner and just hopefully exchange gifts and, you know, reconnect a little bit. But I'm not going to -- no more details.

(END VIDEO CLIP)

YELLIN: OK, we're going to Jack Cafferty now with "The Cafferty File." Jack, I'm not sure if that verged on TMI.

CAFFERTY: I'm not sure, either. The question this hour, if gasoline hits record highs this summer, they're saying it could get to $5 in some places, how much would that hurt President Obama's re-election chances?

Susan in Ohio, "It will hurt, but with all turmoil in the GOP, I still think Obama will pull it off in November. I only hope he can get a Congress that will work with him. We really need to get alternative energies going in a serious way or we are literally doomed. More wind farms, solar panels, geothermal and nuclear power plants will do wonders for lessening our addiction to oil."

Mark writes, "It's what the socialist regime wants, to control our everyday lives, including our transportation. Your president has this vision of a European type of transportation society where we all use buses, trains, bicycles and very few cars because of the high price of gas. Remember what he said, we can't drive our SUVs around."

Lisa in Long Island writes, "People with a brain will connect gas prices with what's going on in the Middle East and not the president. What the other 90 percent of Americans will think is anybody's guess."

Abram writes, "If Obama hadn't killed the Keystone pipeline, gas prices would be going down, so Obama lost my vote." James in North Carolina, "Not at all, Jack, the Obama faithful are immune. The smell of gas fumes will not deter them from Obama-mania.

I really don't think the liberals even drive, do they? Obama knows the faithful will never falter over a few more dollars a gallon. What is it the preacher says when you get married? Love is blind."

Joan in New York writes, "Americans have a short memory as long as the price of gas is back down by November, nobody is really going to care."

And Mark writes, "If gasoline hits $5 a gallon this summer, I will walk through the snow and ice next fall to vote against Obama. If it's $2 a gallon, I'll drive over and vote against him anyway."

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 -- Jess.

YELLIN: Nothing gets people outraged like high gas prices. Thank you, Jack.

CAFFERTY: It really does trip their triggers, yes.