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CNN NEWSROOM

Tornado Threat for Christmas; Newtown Police Get Christmas Off; The Fiscal Cliff & Your Paycheck; Jack Klugman Dead at 90; Christmas Tree Puzzles Onlookers; 2012's Top 10 Stories in Sports

Aired December 25, 2012 - 09:00   ET

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


CAROL COSTELLO, CNN ANCHOR: Good morning and Merry Christmas.

Stories we're watching right now in the NEWSROOM on this Christmas Day.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): Pope Benedict XVI tells people not to up hope even in some of the world's most troubled reasons. We'll tell you about his appeal for peace.

It's not the Grinch stealing Christmas cheer. It's the weather. Blizzard warnings may turn your White Christmas into a travel nightmare. And tornados threaten the South. We have your forecast coming up.

We're seven days away from going off that fiscal cliff and with Washington in a political gridlock we're getting closer and closer. The question, how will it affect you and your paycheck?

The images, the words, the names, highlights and lowlights of 2012. NEWSROOM starts now.

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(END VIDEO CLIP)

COSTELLO: Good morning to you. I'm Carol Costello, wishing you and yours a Merry Christmas and we begin this morning with Pope Benedict XVI using his annual Christmas message to speak about the hope for peace even in the most difficult times and situations.

(BEGIN VIDEO CLIP)

POPE BENEDICT XVI (through translator): In this world there is a good soil which God has prepared --

COSTELLO (voice-over): Just hours ago the 85-year-old pope spoke to a crowd in St. Peter's Square and to millions of others watching around the world. He says even in Syria, a nation embroiled in a nearly two- year long civil war, peace is possible.

POPE BENEDICT XVI (through translator): Yes, may peace spring up for the people of Syria, deeply wounded and divided by a conflict which does not spare even the defenseless and reaps innocent victims. Once again, I appeal for an end to the bloodshed, easier access for the relief of refugees and the displaced and dialogue in the pursuit of a political solution to the conflict.

COSTELLO: The pope also spoke out against violence against Christians in Nigeria and Mali. He wrapped up his address by delivering Christmas greetings in 65 different languages.

In Bethlehem, worshippers packed the Church of the Nativity for midnight mass. The Palestinian Authority president, Mahmoud Abbas, was among those in the crowd. This is a 1,700-year-old church, by the way.

And here's something you can mark as a first on Christmas Day. Queen Elizabeth's traditional recorded message will be broadcast in 3-D on British television next hour. You see her leaving church earlier this morning. In her address, the Queen is expected to speak about the excitement and pride around hosting the 2012 Olympics and celebrations surrounding her Diamond Jubilee.

(MUSIC PLAYING)

(END VIDEO CLIP)

COSTELLO: Camping inside on Christmas isn't the ideal way to spend your day, but there's some nasty weather already affecting many of us.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): Take a look at this picture out of Oklahoma City, where at least 20 vehicles have been involved in an accident. Freezing rain likely to blame for this pile-up. That's according to the Oklahoma Highway Patrol. I-40 West, shut down for at least two miles. Winter storm have already been issued in Arkansas and Oklahoma and parts of the South could see tornados.

If you are heading to the airport, you're urged to call ahead to make sure your flight has not been cancelled or delayed.

Meteorologist Bonnie Schneider joins us now.

Well, hopefully, Bonnie, most people, well, most people are where they expected to be this Christmas Day.

BONNIE SCHNEIDER, AMS METEOROLOGIST: I hope so, because if they're traveling across the South, dangerous weather is erupting right now. We have a tornado watch that's in effect until 1:00 pm Central time for much of southern Louisiana. This includes Baton Rouge, Hammond, New Orleans, Thibodeaux.

We're looking at dangerous weather with frequent lightning strikes. And I had reports of nickel-sized hail across Texas. Look at the frequent lightning that is just hammering the Dallas area right now. You're seeing that sweeping across Mississippi into Jackson.

This is a very dangerous situation for travel, not just in terms of damaging areas where we're having strong wind but we could likely see tornados. The area in orange indicates a moderate risk for tornados.

What does that mean? It means that we have a 30 percent to 60 percent escalated risk in this region right here for severe weather to break out for today. So the weather is likely to get worse as we go through the afternoon when we're talking about the threat of severe thunderstorms.

If that's not enough, we're also watching for the snowstorm to develop and get worse throughout the day. You saw reports of the accident on I-40 west of Oklahoma City. We've had freezing rain in Oklahoma throughout the night on Christmas Eve, then sleet on top of that. Now we're going to see this all change over to snow. The snow will advance further to the east, especially Christmas night.

This means that as it intensifies and works its way eastward it's likely to bring blizzard conditions, meaning blowing and drifting, heavy, heavy snow to Paducah, Kentucky. We're even going to see snow in places in the South that don't typically don't see it like Little Rock, Arkansas.

How unusual is it to see snow in Little Rock? Well, snow falling on Christmas Day or on the ground maybe once every 10 years but measurable snow, which we're likely to see with this storm, well, that hasn't happened since 1913.

And even for Oklahoma City, Carol, it's really only once a decade that we on average see so much snow. So this is unusual this time of year. Please use caution. The snowstorm's going to impact millions of people and don't forget the tornado threat in Louisiana today.

COSTELLO: All right. Thank you, Bonnie.

First lady Michelle Obama is in the Christmas spirit. The White House just released this picture of the first lady answering calls from children who called NORAD Santa Tracker Control Center to ask about Old Saint Nick's big trip around the globe.

Ms. Obama watched Santa's progress along with children nationwide last night.

With the Obama family home for the holidays in Hawaii we couldn't help but wish everyone a Hawaiian Merry Christmas this morning. So "Mele Kalikimaka."

(BEGIN VIDEO CLIP)

CROSBY: Here we know that Christmas will be green and bright, sun to shine by day and all the stars at night, Mele Kalikimaka --

COSTELLO (voice-over): You know what's next, don't you? I love this movie.

Brianna Keilar is in Hawaii right now, traveling with the Obama family. So Mele Kalikimaka, Brianna. What are the Obamas doing today, I wonder? BRIANNA KEILAR, CNN CORRESPONDENT: Mele Kalikimaka to you as well, Carol. You know, there's nothing on the president's public schedule so we don't know exactly what they're doing but presumably they're doing what most -- what many Americans will be doing on this Christmas.

It's still very early, of course, here on Oahu. It's about 4:00 am local time. So they will be presumably waking up in the home that they're renting, about 45 minutes from where we are in Kahlua, and celebrating.

So you saw the first lady did get in the spirit yesterday, talking to kids who were watching NORAD track Santa, the president spending his Christmas Eve a little differently, playing some golf. So not quite as festive as what the first lady was doing and, also, going to the beach with the first family.

We do know that the White House chef, Sam Kass, is here, Carol. So he will be cooking the meal for the first family and we're hoping to get some details on what they'll be eating today.

COSTELLO: Yes. I'm not going to ask you about the fiscal cliff because it's Christmas and I want to forget about it for at least one day. So I'm going to ask you a total nonsensical question. Is the first dog traveling with the Obamas?

KEILAR: The first dog is traveling with the Obamas. This happened last year as well. Bo is here and he's really quite the hit, you know? He's a big part of Christmas decorations at the White House. All of the Christmas trees have a lot of Bo flakes, as they're called, on it, snowflakes with Bo in the middle. So he factors very big into the holidays, holiday cookies shaped like Bo at the Christmas party.

So, you know, Christmas isn't really complete without the White House dog. And he, also, I wanted to show you some video that we have just released yesterday by the White House. And this was the first lady from earlier this month, visiting the Children's National Medical Center in Washington, D.C., reading "'Twas the Night before Christmas" to kids and getting a little help from Bo. Check it out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Good afternoon. I'm --

(CROSSTALK)

UNIDENTIFIED MALE: -- (inaudible), president and CEO of Children's National.

(LAUGHTER)

MICHELLE OBAMA, FIRST LADY: This is exactly what he does at home. He tries to beat Malia and Sasha to my lap. This is one of my favorite things to do during the holidays is coming to the children's hospital to see all of you. And I want to thank my escorts. Gordon and A.J. You guys are awesome.

KEILAR: It was really -- isn't he cute? He's a little big to be in the first lady's lap but don't tell that to Bo. He doesn't think so.

COSTELLO: Although her daughters are, too, you could argue, but she's Mom. You do that.

(LAUGHTER)

KEILAR: Yes. He's adorable and, also, that's a really cute video clip. He also tried to help -- it almost was like he was trying to help turn the page at one point and I think that the kids there were pretty excited the first lady was there, but, honestly I think they were more excited that Bo was there.

COSTELLO: I'm sure they were. Thank you so much, Brianna. We appreciate it.

The Newtown tragedy has dominated our coverage over the last week and a half, but the year will also be remembered for other major news stories. Here's a look back.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Touchdown (inaudible).

(APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you so much.

UNIDENTIFIED FEMALE: A massive crowd has gathered here.

UNIDENTIFIED MALE: We want to be freedom. We want to be free people.

(MUSIC PLAYING)

UNIDENTIFIED FEMALE: The Italian cruise ship capsized.

UNIDENTIFIED MALE: Nearly 23 percent unemployment.

UNIDENTIFIED MALE: Joseph Kony --

KRISTIE LU STOUT, CNN ANCHOR: Joseph Kony, viral on social media sites.

UNIDENTIFIED FEMALE: Outrage stirs social media.

SANDRA FLUKE, WOMEN'S RIGHTS ACTIVIST: My name is Sandra Fluke.

OBAMA: The Affordable Care Act.

UNIDENTIFIED FEMALE: Legitimate rape.

UNIDENTIFIED MALE: This is a very massive play by Facebook.

UNIDENTIFIED FEMALE: The largest IPO in tech history.

UNIDENTIFIED FEMALE: Yes, she's really breastfeeding in the picture.

ERIN BURNETT, CNN HOST: One article has the entire country talking.

WOLF BLITZER, CNN HOST: The president says he now believes that same- sex marriage should be legal.

FREDRICKA WHITFIELD, CNN ANCHOR: We now know the name of the suspect blamed for the movie theatre shooting spree.

DON LEMON, CNN ANCHOR: Shooting at the Sikh temple in Wisconsin.

UNIDENTIFIED FEMALE: People now tell CNN people have been shot in front of the Empire State Building.

UNIDENTIFIED MALE: Bath salts.

UNIDENTIFIED MALE: Bath salts.

LEMON: Bath salts.

UNIDENTIFIED MALE: Jerry Sandusky sentenced to a minimum of 30 years in prison.

WHITFIELD: An iconic statue honoring the late Penn State football coach, Joe Paterno, is gone.

(APPLAUSE)

BROOKE BALDWIN, CNN ANCHOR: (voice-over): The British people are going gaga for the Diamond Jubilee.

UNIDENTIFIED FEMALE (voice-over): Flying squirrel.

UNIDENTIFIED FEMALE (voice-over): Fierce five.

UNIDENTIFIED MALE: Brine lobster (ph).

ANDERSON COOPER, CNN HOST: Someone sold photographs of Britain's Prince Harry naked during a strip billiards game.

UNIDENTIFIED FEMALE: It's one of the hottest novels around.

UNIDENTIFIED MALE: What went wrong? Why now?

CANDY CROWLEY, CNN HOST: Isaac is forcing some changes at the Republican convention.

UNIDENTIFIED FEMALE: What do you mean, shut up?

(LAUGHTER)

OBAMA: Thank you.

BALDWIN (voice-over): Christopher Stevens and three other embassy staff, they are dead.

HILLARY CLINTON, SECRETARY OF STATE: We will bring those to justice who committed these murders. UNIDENTIFIED FEMALE: All of the effects of Hurricane Sandy already.

COOPER: Sandy's carved a path of destruction across all along the Eastern Seaboard.

UNIDENTIFIED MALE: We can't fully secure the crane until the wind dies down.

UNIDENTIFIED FEMALE: Oh, my God. Is there another story on this? Gangnam style.

UNIDENTIFIED MALE: Call me maybe.

UNIDENTIFIED MALE: Tan mom.

UNIDENTIFIED FEMALE: Honey Boo Boo.

UNIDENTIFIED FEMALE: Live picture in Los Angeles from Endeavour, the shuttle rolling down the streets of L.A.

BURNETT: Let's take a look at the man at the center of this scandal, General David Petraeus.

BLITZER: Israel responded to fresh rocket attacks from Gaza.

WHITFIELD: Despair in Syria has gone on for 20 --

BURNETT: Are these red line warnings talk?

BLITZER: CNN projects that Barack Obama will be re-elected President of the United States.

(APPLAUSE)

BLITZER: Terror at an elementary school in Connecticut.

UNIDENTIFIED FEMALE: Twenty children dead. Six adults are also dead.

OBAMA: So our hearts are broken today for the parents and grandparents, sisters and brothers of these little children. May God bless the memory of the victims. And in the words of Scripture, heal the broken-hearted and bind up their wounds.

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(COMMERCIAL BREAK)

COSTELLO: It is 15 minutes past the hour.

Checking our top stories now:

Webster, New York, mourning two firefighters today after they were shot and killed while responding to a fire on Christmas Eve. Mike Chiapperini has just been named firefighter of the year, and was also a police lieutenant. Tom Kaczowka, had joined the department about a year ago, and two other volunteer firefighters were wounded in one of the attack. One of them called for help as you can hear in this chaotic 911 recording.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Multiple firemen down, multiple firemen shot. I am shot.

UNIDENTIFIED MALE: The fire is on the south side of the road. He's shooting from the north side with what I believe was an assault rifle or a hunting rifle. I am stuck in the lower back and lower leg. So I need EMS.

(END AUDIO CLIP)

COSTELLO: The shooter, William Spangler, was convicted of the killing his grandmother decades ago. He was found dead at the scene.

Nelson Mandela spending Christmas Day in the hospital. The 94-year-old former South African president has been battling a lung infection and also had gallstones removed. The President Jacob Zuma said Mandela looks better and the doctors are happy with his progress.

In money news, Instagram still feeling the sting from user outrage after the photo-sharing app changed its terms of service. Instagram has been hit with a class-action lawsuit filed in San Francisco federal court. The lawsuit was filed on Friday despite Instagram saying it was modifying parts of the new policy and would not sell user's photos to advertisers.

And take a look at these pictures. It would not be Christmas without a surfing Santa in Sydney, Australia. It is not every day you see Santa enjoying a white Christmas on the beach with a little sand and without his sleigh. But after a night of delivering all those presents, he certainly deserves it.

Christmas just isn't Christmas for one Kansas teenager without lights and lots of them. To say he goes all out might be an understatement.

Michael Schwanke with our affiliate KWCH shows us how the 13-year-old boy's passion agrees with each passing year.

(BEGIN VIDEOTAPE)

MICHAEL SCHWANKE, KWCH REPORTER (voice-over): This is what Cody Hanna lives for. Not presents.

CODY HANNA, CHRISTMAS LIGHT ENTHUSIAST: It started when I was 7.

SCHWANKE: Not the food.

C. HANNA: I just started liking lights.

SCHWANKE: For Cody, it's all about the lights.

C. HANNA: This is it.

SCHWANKE: And each year, he has a goal. C. HANNA: Get bigger. More lights. Way more lights.

UNIDENTIFIED FEMALE: He has liked lights ever since he was probably a baby.

SCHWANKE: For Cody, it wasn't that long ago. He's only 13.

UNIDENTIFIED FEMALE: When he was about 7, he decided that he was going to start decorating his room.

SCHWANKE: From a few lights in his room to this.

What else can you say?

C. HANNA: Yes. It's cool! Very cool! This is my new thing this year.

SCHWANKE: This 13-year-old's efforts go beyond just a few extension cords.

C. HANNA: It runs through your FM radio. I'll have a sign out there that says which channel to turn to and you'll just turn to that and you'll be able to listen to it.

SCHWANKE: The light display has programmed music run by special software on a laptop Cody saved up to buy. A show meant for all to enjoy.

C. HANNA: My neighbors came out and clapped for me at the end of the song so -- support from the neighbors helps.

MICHELLE HANNA, CODY'S MOM: Since he's 13 and he's already putting it to music I'm pretty sure he's a Clark Griswold in the making.

SCHWANKE: A compliment to a boy like Cody, who takes the Christmas spirit --

C. HANNA: It will only get bigger from here.

SCHWANKE: -- to a whole new level.

(END VIDEOTAPE)

COSTELLO: That was Michael Schwanke with our affiliate KWCH reporting.

Talk-back question for you today: what's your favorite Christmas memory? There has to be one that sticks out, right? But it might not be as memorable as this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED GIRL: Oh, my God, thank you.

(SCREAMING)

(END VIDEO CLIP)

COSTELLO: Oh, the memories. That clip went viral on YouTube. You remember? Talk-back, next.

(COMMERCIAL BREAK)

COSTELLO: Now is your chance to talk back on one of the stories of the day. The question for you this morning: of course, what is your favorite Christmas memory? It has been an emotionally exhausting year. I won't review it because there are too many painful moments. But, still, on this Christmas Day out of darkness, there's hope, kindness, giving, compassion, Jesus would say -- love.

In Newtown, Connecticut, exhausted police officers received a rare gift. Time off. Police from nearby communities are working in Newtown today to give the police the holiday with their families. And from around the nation and the world, tens of thousands of toys have poured into Newtown.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: In this country, we take care of each other. And in this season of giving, it's inspiring to see so many people all across America taking the time to help those most in need.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That's part of what makes us such a compassionate nation. And this year, I know many of you are extending that kindness to the families who are still picking up the pieces from hurricane Sandy, and extending your prayers to the people of Newtown, Connecticut.

(END VIDEO CLIP)

COSTELLO: My favorite memory as a child wasn't the cowgirl outfit that I got at age 4, although it was pretty darn awesome. My favorite memory culminated in this moment. That's many in front at age 6, with my mom, brothers and sisters and, yes, mom is exhausted, which is understandable.

We always went to midnight mass on Christmas Eve and looked for Santa flying year head as we left. We set out milk and cookies when we got home and on Christmas Day, the cookies were gone but the milk was still half full. Those mornings were magic. And not because I got Barbie's less attractive sister, Skipper. It's how it felt on that day. I can't even put that feeling into words to this day.

So, please, share this morning. What's your favorite Christmas memory? Facebook.com/CarolCNN, Facebook.com/CarolCNN. Or you can tweet me @carolCNN.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hey, it's Specialist (INAUDIBLE). You know me as Carl. Hey, mom. I'm still stationed in Germany, sent a shout-out to all my family in Trenton, New Jersey. I miss y'all, I love y'all.

If you missed it, trip off. Sorry, I did my part. You should have watched it. Bye-bye.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COSTELLO: Snow, fog and blizzards are in the forecast for this Christmas Day. Freezing rain likely to blame for this massive pile-up in Oklahoma City. A two-mile stretch of I-40 back opened after being shut down for a couple of hours while the wreckage was cleaned up. Winter storm warnings have already been issued and parts of the South could see tornados.

Meteorologist Bonnie Schneider is here to tell us more.

Good morning.

BONNIE SCHNEIDER, AMS METEOROLOGIST: Good morning, Carol.

We are tracking severe weather across the South and if that's not enough, a big snowstorm emerging through the Southern Plains that's working its way into the Midwest. Let's take a look at what's happening now and we can talk about the winter threat. We're looking at the potential for blizzard conditions. Blizzard warnings are in place and this will get worse later on today into tonight and certainly for tomorrow as well.

We could see up to a foot of snow in Paducah, Kentucky -- very unusual to see so much snow in areas of the South especially on Christmas Day. We're also tracking the storm on Wednesday at it advances to Ohio likely to bring substantial snowfall for this region as well.

And finally, we're also tracking fog. So, if it's not enough that you have strong thunderstorms and the threat for tornados, you're also looking at low visibility due to foggy conditions across much of the region.

Let's just zoom in here. I want to show you Atlanta. What we're looking at now is we have the fog that is just about a mile visibility. Earlier this morning, it was only a quarter of a mile. So visibility is improving a bit as we go through the day. That's important to note.

The threat for severe storms in terms of tornado watches -- well, that's right here in Louisiana and, Carol, that severe weather watch into Texas continues as well. So, we'll be looking at damaging winds and isolated tornadoes possibly breaking up this afternoon through areas into Louisiana, Mississippi, and maybe so far east as Georgia.

COSTELLO: Wow! OK, so be careful. Thank you, Bonnie.

SCHNEIDER: Sure.

COSTELLO: Just about 30 minutes past the hour. Time to look at the top stories.

In Newtown, Connecticut, the entire police force gets the day off. They've been working nonstop since the school shooting and officers from neighboring towns step in to give them a break today. The volunteers donating their overtime pay to Newtown and Sandy Hook Elementary School charities.

Hundreds of NATO troops in Afghanistan celebrated the holiday early, singing festive songs and lighting candles last night during a church service and, of course, filling up with a special Christmas dinner.

And President Obama spending Christmas with his family in Hawaii. He even played a rounds of golf with friends. It will be a short vacation for the president, though. He is expected back in Washington later this week, just before the fiscal cliff deadline.

Congress also home for the holidays and that means there's not a lot going on with the fiscal cliff negotiations. If no deal is reached in one week, the tax cuts enacted under President Bush will expire and $1.2 trillion in spending cuts will automatically go into effect.

If we do go over the fiscal cliff, how is it going to affect you from your paycheck to your retirement accounts? We're going to give you all the tips you need to protect yourself.

Here to do that this morning is Ryan Mack, president of Optimum Capital Management.

Good morning and merry Christmas, Ryan.

RYAN MACK, OPTIMUM CAPITAL MANAGEMENT: Merry Christmas, happy holidays to you. Thank you.

Kudos for being able to pronounce that Honolulu merry Christmas saying.

COSTELLO: I don't think I can do it again. Mele Kalikimaka, I did it. Aha!

MACK: There you go.

COSTELLO: Let's start with your paycheck as it applies to the fiscal cliff.

MACK: Yes.

COSTELLO: If we go of the fiscal live how will my and everybody's paycheck be affected?

MACK: Well, the majority of the paycheck is really not going to be affected until 2014 when people file for 2013 taxes.

But there are certain things that are impacted right away, such as the payroll tax cut. For individuals earning about $50,000 a year, they'll be having to pay about $85 less because of the payroll tax cut will be expiring. So that will be, again, almost $90 a month that will mere live come into play, but the majority of the individuals when 2014, when they file their taxes, they might be in for a surprise if we don't get to a deal quickly.

COSTELLO: So what do people need to do to prepare themselves? MACK: Well, essentially what we have to understand is that let Congress deal with this fiscal cliff stuff. We have to worry about our fiscal houses.

We can't control. We can vote. We can lobby. But we can't control what they do in the long run.

What we can control is our own fiscal house. I mean, you can't control what the deal does but you can control your gym membership that you've been paying for, for the past year, but you haven't gone to the gym. You can control that premium cable that you're paying for, but you haven't watched television that much. You know, you can control the fact that you have coupon clippings that go unused in your Sunday paper that you can still save hundreds of dollars on your cable bill, on your grocery bill every single month.

So these are the things that we can start to do. Have you negotiated you're interest rates on your credit cards? Have you make sure you that go to annualreport.com and improve your credit rating, to make sure you have the better ability to negotiate your interest rates.

These are things that we can start to do right now that are in our control and we have to worry about our fiscal houses and less about the fiscal cliff.

COSTELLO: And those are simple things to do but they take time. But it's good advice.

MACK: Exactly.

COSTELLO: OK. We hear a lot about the AMT --

MACK: Yes.

COSTELLO: -- and how Congress may put a patch on that. Can you explain it in a simple way so everyone can understand?

MACK: Well, back in '69, they came out with this thing called the minimum tax. And then, in '82, they came out with the alternative minimum tax. So, essentially, this was a way to make sure the wealthy Americans pay their fair share. As individuals make more money, they get more deductions, they get more exemptions. But this is the way to try to level the playing field a little bit.

The alternative minimum tax simply says that now, it's around $74,500. If -- it will go down to about $45,000 if the fiscal cliff goes off and nothing is done to adjust it. So, individuals now, again, $45,000 back in '82 when first enacted was a lot different than $45,000 today. So if individuals earning $45,000 today might be impacted by additional taxes by this AMT if something's not done.

And, again, this is just a way to try to -- the problem with the AMT was that it was not adjusted for inflation, so as time went on and prices have gone up and people have made more money and inflation has gone into place, things have not adjusted for what the AMT is now currently. So this is going to be a big piece and those in the finance world are really looking at making sure that this thing doesn't come into play, because again, come 2014, people are going to have a big surprise if they file their taxes and this AMT is not adjusted.

COSTELLO: OK. Ryan, I want to look into the future which is 10 days.

MACK: Yes.

COSTELLO: Do you think a deal will be done?

MACK: What we're going to have -- we're going to have a short-term deal. I mean, bottom line is, if these spending cuts are way too extensive. The Medicare cuts, way too extensive to try to put together in 10 days. They haven't done enough to get that far.

We're probably going to get an extension on unemployment insurance. We're probably going to get reduction in terms of tax rates for those -- and stability for those under $250,000 a year. And again, if December 31st comes and nothing happens, there's still a little bit of wiggle room and a couple weeks after that for them to come into play. So, I do think a short-term patch will be made in order to make sure they can work out a long-term deal. So, let's just hope and pray they're able to do that.

But in the meanwhile, let's work on what we can do at home.

COSTELLO: Well, good advice and we will take it. Ryan Mack, thank you so much.

And, by the way, Ryan will be joining us all week long. We'll be back tomorrow with advice on how to protect your portfolio, how the fiscal cliff could affect it, and what you should do to prepare.

The good, the bad and the bizarre when it comes to decorating Christmas trees. Some people -- well, some people take it to extremes. We'll show you.

(COMMERCIAL BREAK)

COSTELLO: A homeless man is demanding an apology and a face-to-face meeting with singer Justin Timberlake. Apparently a video produced by Timberlake's friend for a wedding celebration, actually, it was Timberlake's wedding celebration, mocked the man only identified to us as Eddie. That man is now represented by lawyer Gloria Allred and he's asking for Justin Timberlake to come visit him on Skid Row.

For his part, Timberlake has apologized for the, quote, "silly, unsavory video that a knucklehead friend made."

Also, said news this Christmas Day. Actor Jack Klugman has died. And you probably remember him best for his roles in TV shows like "The Odd Couple" and "Quincy."

Alina Cho looks back at the life of the beloved star of stage and screen.

(BEGIN VIDEOTAPE) ALINA CHO, CNN CORRESPONDENT (voice-over): For millions of television viewers, Jack Klugman will always be sports writer Oscar Madison, the cigar-smoking, beer guzzling slow who played opposite Tony Randall in "The Odd Couple."

UNIDENTIFIED MALE: Will you stop it? I will lose in here.

UNIDENTIFIED MALE: Come on, let get us together.

CHO: Surprisingly, "The Odd Couple" wasn't Klugman's most successful series, at least not at first. Starting in the 1970s, it ran for five years on ABC and never ranked higher than 36th in the ratings. But reruns on local stations and on Nick at Night turned the sitcom into a cult classic, making it far more popular than Klugman's other TV series "Quincy."

Klugman was a wily medical examiner for seven seasons. The show premiered in 1976 as part of NBC's mystery movie. It quickly became a weekly series. When it ended, Klugman made brief appearances but stayed mainly on his ranch raising horses. He also continued to smoke cigarettes and eventually lost a vocal cord to cancer.

JACK KLUGMAN, ACTOR: When it first happened, of course, I hid from it because I was sure I was going to get better, and I didn't want to let them know I couldn't talk because then I wouldn't get a job.

CHO: One of his most memorable film roles was opposite Jack Lemon in "Days of Wine and Roses." Klugman played a counselor for Alcoholics Anonymous.

KLUGMAN: Which is the one that gives you the hives? Alcoholism is an illness. It's pretty hard to diagnose an illness until you've got it.

CHO: He joined another distinguished cast in the 1957 teleplay "12 Angry Men."

KLUGMAN: (INAUDIBLE) came in the neighborhood where I lived. I never thought of it before. I guess you try to forget those things.

CHO: Klugman grew up in south Philadelphia. He married twice and had two sons. He earned two Emmy awards for his role on "The Odd Couple."

It was Klugman's longtime friend and co-star Tony Randall who helped him through his throat cancer treatment and persuaded him to resume his acting in the 1990s. With just one vocal cord doing the work of two, Klugman returned for a stage version and TV version of "The Odd Couple."

While the two continued to reprise their Felix and Oscar roles on stage and television, Klugman admitted they were probably too old for the parts, but he added, "Who knows them better than us? I am Oscar Madison."

When Randall died in 2004, Klugman said this to CNN's Larry King.

KLUGMAN: It's amazing. You know guys are going to die. You know it. But you can't prepare for that finality.

I don't care if he's 110 and they tell you he's gone. It knocks me out. I can't accept the finality of it. As I say a world without Tony Randall is a world I cannot recognize.

CHO: Jack Klugman died at his home in Northridge, California, with his wife Peggy by his side. He was 90 years old.

Alina Cho, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COSTELLO: Forty-three minutes past the hour. Time to check our top stories.

We're exactly one week away from the automatic spending cuts and tax hikes if Congress and the White House cannot reach a deal on the fiscal cliff. Lawmakers and the president left Washington last week for Christmas break. They are expected back in town in Washington before the end of the week.

Call it terrible timing. Netflix is apologizing for its Christmas Eve outage. The popular streaming service sent out a tweet last night saying engineers were working to fix the problem. According to "The Wall Street Journal", Netflix blames the outage on technical problems at Amazon.com which delivers Internet service for many Web sites.

Russia's biggest Christmas tree now on display in the Kremlin's cathedral square in Moscow. Designers decorated the huge fir tree with a patriotic theme symbolizing the Russian flag. Many Russians are Eastern Orthodox Christians. They celebrate Christmas on January 7th.

And nothing says Christmas like a tree, right, whether it's barely there or sticking out your roof.

CNN's Jeanne Moos explains.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): Maybe if this homeowner had measured better, his Christmas tree wouldn't have burst through the roof.

UNIDENTIFIED MALE: That's crazy, right?

MOOS: What's crazy is how crazy everyone is about this Christmas tree stunt that really doesn't stump anyone for more than a few seconds.

UNIDENTIFIED MALE: So, we bought a 14-foot tree and I cut the top, six feet of it off.

MOOS: Then plunked it on to a plywood platform on the roof and artfully arranged shingles around it.

(on camera): It's funny, your house is sort of proof that the price of trees have gone through the roof.

(LAUGHTER)

MOOS (voice-over): Seattle architect Patrick Kruger has always been a huge fan of the movie "Christmas Vacation" in which the main character Clark Griswold is obsessed with a perfect tree.

CHEVY CHASE, ACTOR: There it is.

UNIDENTIFIED FEMALE: Dad that thing wouldn't fit in our yard.

UNIDENTIFIED MALE: It's not going in our yard, Russ. It's going in our living room.

MOOS: That's kind of what Patrick did. His license plate even pays homage to the Christmas-fixated Griswolds.

Actually the first tree Patrick put up on the roof had a problem your average living room tree doesn't. It blew off. The plywood platform it's on had to be bolted down. True, this is not a new concept. In England and Lincolnwood, Illinois, there have been grander versions of the same visual joke with the tree cut in three.

KRUGER: Your saying it's better than this one?

MOOS: Yours has a Charlie Brown aspect to it.

UNIDENTIFIED FEMALE: I think of (inaudible)

MOOS: What Patrick needs and has is a kinky Christmas tree as well as a nice, plump, regular one with a star that grazes the ceiling, rather than pierces it.

Jeanne Moos, CNN, New York.

(END VIDEO CLIP)

CAROL COSTELLO, CNN ANCHOR: I like that tree.

Here's a new holiday memory for you. For better or worse one of 2012's guilty pleasures made its way into Christmas.

(BEGIN VIDEO CLIP)

PSY, SINGER: Gangnam style.

(END VIDEO CLIP)

COSTELLO: Oh you're not seeing things. Hundreds of people in Shanghai dressed as Santa and danced the night away "Gangnam Style" as part of their Christmas Eve celebrations. It looks like a lot of fun. Gangnam style, as a Christmas carol? Ok so that's a stretch.

So which songs are associated with Christmas? A new poll ranked America's top Christmas songs: "Rudolph the Red Nosed Reindeer" was number five; number four, "The Christmas Song"; number three "Little Drummer Boy"; number two "White Christmas" and the number one Christmas song is -- next.

(COMMERCIAL BREAK)

COSTELLO: Before the break, we told you about a new poll that ranked America's top Christmas songs. So what's the number one? "Rudolph the Red Nosed Reindeer" was five. Number four "The Christmas Song". Number three "Little Drummer Boy". Number two "White Christmas". and the number one Christmas song?

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: Silent night holy night, all is calm all is bright --

(END AUDIO CLIP)

COSTELLO: Fifty minutes past the hour time for sports now. The Indianapolis Colts' feel good season is now even better with the coach of their head -- with the return of their head coach rather Chuck Pagano. Pagano left the team in September after being diagnosed with leukemia. Last month doctors announced the leukemia was in remission and yesterday Pagano returned to his coaching duties.

If all goes well this week Pagano will be on the sidelines Sunday for the Colts' regular season finale against Houston. At a news conference Pagano thanked his wife of 23 years. Tina Pagano stayed with him right by his side throughout his hospital stay.

(BEGIN VIDEO CLIP)

CHUCK PAGANO, HEAD COACH, COLTS: I want to thank you. She's a -- she's a soldier, a lawyer, my soul mate.

(END VIDEO CLIP)

COSTELLO: Pagano also thanked his doctor, the community, and of course his team. Many of the Colts shaved their heads last month to honor him. A couple Colts cheerleaders shaved their heads as well for cancer research funding. Pagano's comeback may be the most uplifting story from the sports world for 2012.

Vince Cellini takes a look at ten other stories that grabbed headlines some beyond the sports pages.

(BEGIN VIDEO CLIP)

SOLEDAD O'BRIEN, CNN ANCHOR: Today is a new day at Augusta National.

VINCE CELLINI, BLEACHER REPORT: Augusta National, perhaps the most prestigious golf club in America and home of The Masters had excluded women from its membership roles since its opening in 1932. But that changed in August with a highly show cased admission, a former Secretary of State, Condoleezza Rice and Darla Moore, a South Carolina businesswoman.

PEYTON MANNING, NFL PLAYER: I haven't thought yet about where I'll play but I have thought a lot about where I've been.

CELLINI: When quarterback Peyton Manning and the Indianapolis Colts decided to part ways after 14 seasons the coverage of where Manning would land was intense. After Broncos fans learned he would play in Denver they must have felt like they won the lottery which made the trade of Tim Tebow to the New York Jets easier to accept.

The emergence of golf's newest stars took center stage in 2012. Bubba Watson introduced himself by winning the Masters. But it was a humble demeanor and some viral video that quickly endeared him to millions.

Meanwhile, a 23-year-old from Northern Ireland, Rory McIlroy, ended the year as the world's top ranked player. Let the comparisons to Tiger Woods begin.

Ever since he appeared on the cover of "Sports Illustrated" as a 17- year-old it wasn't a question of if but when LeBron James would achieve true greatness. That came this year when he soared to his first championship with the Miami Heat, was voted the NBA's MVP, and won Olympic gold with Team USA.

2012 also had its share of controversy starting with the NFL's battle over money with its referees. The league tried to use replacements from college and high school but after a blown game deciding call on national TV the criticism became untenable and the two sides came to an agreement two days later.

The downfall of Lance Armstrong made headlines across the world. A hero to millions after surviving cancer and winning cycling's most prestigious event a record seven times. That script changed when the U.S. Anti-Doping Agency released a report that accused him of leading the biggest team doping scheme in the history of sports. Armstrong was stripped of his Tour de France titles and resigned from his cancer foundation.

BROOKE BALDWIN, CNN ANCHOR: Two words. Jeremy Lin.

UNIDENTIFIED MALE: Lin-sanity.

UNIDENTIFIED FEMALE: Lin-explicable.

WHOOPI GOLDBERG, TALK SHOW HOST: Lin-sanity.

UNIDENTIFIED MALE: Can you believe this is happening to you?

JEREMY LIN, NBA PLAYER: No.

CELLINI: At the start of the year Jeremy Lin was a Harvard grad trying to make it in the NBA but over the course of ten days in February the Asian-American became a global sensation as he led the New York Knicks on a seven-game win streak and single-handedly reinvigorated a franchise that had fallen on tough times.

PIERS MORGAN, CNN ANCHOR: We're four hours away from the big opening ceremony.

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: You can really feel the buzz in London.

CELLINI: For two weeks this summer the London Olympics took center stage with barrier-breaking performances. Michael Phelps who became the most decorated Olympian of all time, American Gabby Douglas the first black woman to win the gymnastics individual all-around title. South Africa's Oscar Pistorius the first double amputee to compete in the Olympics and the female athletes from Saudi Arabia, Brunei and Qatar who were allowed to compete in the Olympics for the first time.

The New Orleans Saints made news for all the wrong reasons after they were found guilty by the NFL of instituting a bounty program that allegedly rewarded players with cash payments for injuring opponents. Head coach Sean Payton was suspended for the season and although the suspensions against four current a former players were eventually vacated the damage to the season was already done.

UNIDENTIFIED FEMALE: Jerry Sandusky is charged with molesting eight boys.

UNIDENTIFIED MALE: Where were the authorities?

UNIDENTIFIED MALE: This is not a case about football.

CELLINI: But the biggest story of the year occurred at Penn State which was consumed in a child abuse scandal. The year started with the death of coaching icon Joe Paterno. Five months later former assistant coach Jerry Sandusky was found guilty of child sex abuse and sentenced to at least 30 years in prison while the NCAA hit the football program with unprecedented penalties.

Vince Cellini, CNN. Good night.

(END VIDEO CLIP)

COSTELLO: "Talk Back" question this morning, "What is your favorite Christmas memory?" Your responses next.

(COMMERCIAL BREAK)

COSTELLO: Our "Talk Back" question for you today, what's your favorite Christmas memory?

This one from Miles. "He said I asked my mom how I can get my Christmas list to Santa and she told me to let it blow in the wind and God will make sure it gets to him. I'm wondering who picked up my Christmas list. I also stayed up one night wait for him and fell asleep in the living room. My mom was slick. She brought my presents out then."

This from Debbie. I was about 10 years old when I was given a little microscope. I was so in awe of this wonderful gift that I sat behind the tree and just held it."

Please keep the comments coming. Facebook.com/carolCNN or tweet me @CarolCNN.

The next hour of CNN NEWSROOM starts right now.