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Evacuation Lifted after Fiery Train Crash; Massive Anti-Terror Sweep after Russian Blasts; Awaiting Air Rescue of Ice-Bound Ship; Obama's 2014 Agenda & Challenges; Horse-Drawn Carriages to be No More; Ringing in the New Year on CNN

Aired December 31, 2013 - 17:00   ET

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


DANA BASH, CNN GUEST ANCHOR: Thanks, Jake. Happening now, red-hot danger, new information about a fiery train crash that's driving home growing fears about railroad safety.

Plus, ready for rescue, will dozens of researchers trapped in the Antarctic be airlifted soon?

And New Year's fireworks, we'll show you a celebration of 2014 unlike any other.

Wolf Blitzer is off. I'm Dana Bash. You're in THE SITUATION ROOM.

Right now, residents are being allowed to return to a small North Dakota town where an oil train crash triggered explosions and a huge fireball. Hundreds of people were evacuated after warnings that the fumes might be dangerous.

Chris Lawrence is here with an update on that and growing concerns about railroad accidents across the country -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Yes, Dana, we just confirmed that the evacuation order has been lifted, so that's a good thing. People are allowed now to go back into their homes. And the fact that no one was hurt or killed in this crash is a terrific thing.

But that alone is not going to make some people rest easy. And they're wondering just how safe are America's rails?

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): This oil train derailment near Fargo, North Dakota triggered a massive fireball. It spewed thick black smoke over families' homes.

JESSICA KWEELA, CASSELTON RESIDENT: It's scary. I've got two kids. You don't know if it's going to affect them and make them sick.

LAWRENCE: Officials evacuated nearly the entire town of Casselton as they tested the air.

NTSB investigators have now arrived on the ground.

ROBERT SUMWALT, NTSB: I think our biggest challenge right now is that the fire is still burning and we're not able to get up close and personal to the wreckage.

LAWRENCE: Crashes like this are calling attention to overall rail safety. Seventy-nine people died this summer when a passenger train slammed into a concrete wall in Spain.

And in early December, New York's Metro North train derailed, killing four.

In North Dakota, some of the rail cars may be the type the NTSB has sounded the alarm over, saying they are more vulnerable to being breached in a crash.

SUMWALT: But there are different types of DOT 111 cars, so we will want to be confirming that.

LAWRENCE: Critics say oil companies have been slow to upgrade the cars, the kind that derailed in Quebec this summer, killing 47 people.

Tank cars can withstand impacts at 18 miles an hour. But some say even improvements wouldn't protect them going 60, 70, 80.

GARY WOLF, RETIRED SAFETY CONSULTANT: You just can't physically build a tank that can withstand that kind of impact speed.

LAWRENCE: Gary Wolf says trains are far safer than trucks, right now the only alternative to shipping crude oil across the country.

WOLF: I don't think the average person wants to be driving next to a 75 mile an hour rig carrying crude oil down the highway 12 feet away from your automobile.

(END VIDEO TAPE)

LAWRENCE: And some oil companies are using new technology, like taking a laser snapshot of each wheel as it goes over each section of the track. They then compare that shape to federal standards to make sure it doesn't have too much wear and tear. That has contributed to about a 50 percent drop in accidents since, say, 2005-2006. And, Dana, the interesting thing is six, seven years ago, there were about 50,000 oil shipments a year. That number is now up to over 400,000.

So the number of shipments going up, accidents actually going down.

BASH: Very interesting.

Chris Lawrence, thank you very much for that report.

LAWRENCE: Sure.

BASH: And a massive anti-terrorism operation is going on in Russia right now, after a pair of deadly bomb attacks.

Dozens of people have been detained, but that's doing little to ease fears that terrorists may strike the Winter Olympics in Russia in just a matter of weeks.

Our foreign affairs correspondent, Jill Dougherty, is here -- and, Jill, Russia is promising a pretty tough response here.

JILL DOUGHERTY, CNN CORRESPONDENT: Oh, they definitely are. In fact, the Russian police are carrying out a massive anti-terror operation in Volgograd with 5,000 officers. They have already questioned 1,000 people.

But will that prevent future possible attacks in other locations?

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): A suicide bomber detonates himself at a Russian train station, a security camera capturing the seconds before the explosion. Russia is reeling after two terrorist attacks in Volgograd killed 32 people and injured 72.

President Vladimir Putin, in his New Year's address, rallying his fellow Russians.

(VIDEO CLIP COURTESY REUTERS)

PRES. VLADIMIR PUTIN, RUSSIA (through translator): We will fiercely and consistently continue the fight against terrorists until their complete annihilation.

(END VIDEO CLIP)

DOUGHERTY: And with his $50 billion Olympics in Sochi, Southern Russia, a little over a month away, he pledged to hold the Games at a very high level.

But this man, Doku Umarov, who some call Russia's Osama bin Laden, plans to destroy those Olympics, calling them "Satanic dances on the bones of our ancestors."

Some athletes, like American speed skater Jilleanne Rookard, are worried. She told the Associated Press, "I don't know if I necessarily trust their" -- the Russians' -- "security forces, but they don't want a national embarrassment, either."

The terrorist leader Umarov is based in the Russian republic of Dagestan, now the epicenter of terrorism in Russia, just 300 miles east of the site of the Games in Sochi, the same region where the men implicated in the Boston Marathon bombing, Tamerlan and Dzhokhar Tsarnaev, lived before moving to the United States.

The Russian government is responsible for overall security at the Games. The State Department, as it does with all large events, will send diplomatic security agents to liaise with Russian security and law enforcement officials.

MARIE HARF, STATE DEPARTMENT DEPUTY SPOKESWOMAN: Our diplomatic security personnel have been working with the Russians for many months on security. They obviously work with our team, with high level officials. Also, we provide U.S. citizen services to folks that will be traveling there. So we're ready to support any way we can to help with the security situation. DOUGHERTY: The Sochi Olympics are one of Vladimir Putin's highest priorities right now -- Russia's chance to shine on the international stage, but a high stakes gamble if he can't keep the Games and Russia secure.

(END VIDEO TAPE)

DOUGHERTY: And protecting Russia may be the more difficult challenge. Mr. Putin is promising the Sochi Olympics will be safe and security forces have moved to basically lock down the site. But protecting the rest of Russia, all of its nine time zones, is an overwhelming job -- Dana.

BASH: Absolutely. And certainly Vladimir Putin has staked so much on this, not only security, but, you know, Russia's legendary idea on what he wants Russia to be...

DOUGHERTY: Absolutely.

BASH: And you know this more than anybody.

DOUGHERTY: Its image, it's the most important thing right now.

BASH: Absolutely.

Jill, thank you so much.

Appreciate it.

A dramatic air rescue operation could begin at any time in the frigid waters off Antarctica.

Dozens of people are trapped on board a research ship that's been stuck in the ice for more than a week. The timing of the airlift depends on the weather.

Our senior international correspondent, Matthew Chance, is following the story for us -- Matthew, what's the latest?

MATTHEW CHANCE, CNN CORRESPONDENT: Well, the latest is that this is a new plan that has been developed because the old plan, trying to get to that research vessel, the Akademik Shokalskiy, which is marooned in a very remote part of Antarctica, by sea using ice breakers has failed. There's been three attempts to do it with three different ice breakers. They all can't manage to cut through the thick ice there.

The only way now, they say, is to airlift the majority of the 74 passengers and crew off that ship with a helicopter. But they can't do that unless the weather gets better.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): This morning, new video -- dozens of passengers walking arm in arm, doing what they can to speed their rescue.

CHRIS TURNEY, EXPEDITION LEADER: We've just learned the Aurora can't reach us, so (INAUDIBLE) is preparing the helipad by getting the team to stomp down on this snow and ice so the Chinese helicopter from Snow Dragon can reach us when the weather improves.

CHANCE: The weather conditions are not expected to get better until at least one more day. In the meantime, the crew has marked the spot in the ice where the chopper can land. Once it does, it will transport 12 people at a time to a Chinese ice breaker. Then a barge will ferry them from the ice breaker to another ship, from Australia. The stranded research ship, the Akademik Shokalskiy, had set out to study climate change in Antarctica and retrace the steps of explorer Douglas Mawson, who studied life on the frozen continent a century ago. But they got stuck in thick ice.

UNIDENTIFIED MALE: And this was big chunks of ice, really thick, lots of years' worth of growth. And you just looked for all (INAUDIBLE) this is not going to be easy to get through.

CHANCE: Since Christmas, three separate ice breaker ships have tried and failed to cut a path to the research vessel. Once the rescue does happen, a skeleton crew will be left behind. But for most of the 74 people marooned, this Antarctic ordeal may soon be coming to an end.

(END VIDEO TAPE)

CHANCE: We're watching this situation very closely at the moment. The weather conditions are still too poor for the helicopters to operate safely and so those 74 people on board are going to stay marooned for some time to come -- Dana.

BASH: It's certainly not a way to ring in the new year.

Thank you, Matthew.

I know you'll keep us updated on what's going on there.

And up next, while the president is on vacation, the administration makes a big announcement about ObamaCare. I'll ask a senior White House official if there could be a catch.

Plus, an eye-popping New Year's light show in a city that likes to do things big.

(COMMERCIAL BREAK)

BASH: Just in to CNN, a new record for a new year. We just learned that this amazing fireworks display made it into the "Guinness Book of World Records." The City of Dubai -- that was their goal, in the United Arab Emirates -- to set off 400,000 fireworks over a six minute period. That beat the old record for the largest fireworks display by quite a lot. It was set last year, when Kuwait exploded 77,000 fireworks over an hour.

And in these final hours of 2013, we have updated numbers on ObamaCare enrollment. The administration says more than two million people will have insurance -- excuse me, health insurance under the program at the start of the new year, through federal and through state exchanges. But we don't know yet how many of those actually have paid for their premiums.

The president and his signature health care law both face many, many challenges in 2014.

CNN's Athena Jones is with the president in the enviable assignment of Hawaii -- Athena, looking beautiful out there.

Let us know what the latest is, particularly with the president's legacy, ObamaCare.

ATHENA JONES, CNN CORRESPONDENT: Good afternoon, Dana.

Well, the president and his family are spending today snorkeling, ending the year on a fun note.

But almost everyone agrees that 2013 was not a good year for President Obama. And with 2014 right around the corner, the question is whether it will be any better.

(BEGIN VIDEOTAPE)

JONES (voice-over): Golf, basketball, trips to the beach and crowd pleasing dinners out -- a Christmas vacation spent winding down after a government shutdown, surveillance scandals and a rocky HealthCare.gov rollout made 2013 a year the president might like to forget.

There is some good news on the health care front to end the year. More than two million people have enrolled in the federal and state- run insurance exchanges. This as Obama rings in a new year with high hopes of tackling a string of other important issues on his agenda.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I firmly believe that 2014 can be a breakthrough year for America.

JONES: From growing the economy and creating jobs, to raising the minimum wage.

OBAMA: We've got work to do to create more good jobs, to help more Americans earn the skills and education they need to do those jobs, and to make sure that those jobs offer the wages and benefits that let families build a little bit of financial security.

JONES: And pushing an immigration overhaul through a divided Congress.

OBAMA: And we still have the task of finishing the fix on our broken immigration system.

JONES: At home, a raging debate about privacy and a stalled effort on gun control.

On the international front, issues like the war in Syria and negotiations over Iran's nuclear program will continue to consume the president's time.

But just how much can get done in 2014 will depend a great deal on Congress.

OBAMA: It's probably too early to declare an outbreak of bipartisanship, but it's also fair to say that we're not condemned to endless gridlock. There are areas where we can work together.

(END VIDEO TAPE)

JONES: And the first item the president wants Congress to tackle in the new year, extending unemployment benefits to the more than one million people who have lost them. He'll lay out the rest of his 2014 agenda on January 28th in the State of the Union Address -- Dana.

BASH: Athena Jones, thank you very much.

And joining me now from the White House is White House senior adviser, Phil Schiliro.

Now, Phil, the big news today is the two million number, signed up. But I want to talk about the more immediate deadline, and that is tomorrow, on January 1st. That is the day that those who signed up and enrolled by Christmas Eve are expecting to have actual insurance coverage.

Can you guarantee that the people who think that they are going to have coverage will actually have it?

PHIL SCHILIRO, WHITE HOUSE SENIOR ADVISER: I'm going to answer that question, Dana, but we can't gloss over today's number. That -- today is just such an unqualified good day, that 2.1 million Americans have signed onto the exchange, not because they had to. Penalties don't kick in until next year. They signed on because they wanted insurance.

BASH: So just to put a button on this, and I'll get to the two million number...

SCHILIRO: Yes.

BASH: -- I know there's no -- there are no guarantees in life, but given the way that this has gone so far, the rollout, if suddenly tomorrow people wake up and think they have health insurance and they don't, that's going to be a big nightmare scenario for you.

SCHILIRO: It sure would. And I don't think that's going to happen.

So let's take a step back. We have experience with the insurers, with pharmacies, with hospitals dealing with these problems in the past. Over the last few weeks, we've worked intensively with them to be ready for tomorrow.

All the people who think they have insurance and are worried about problems on the back end, we've reached out to at least twice, the insurers have reached out to at least twice.

Could there be some confusion tomorrow?

Possibly. If there is, people should do two things.

First, call their insurer. See if the insurer can clarify whether they have coverage or not, especially if they don't have a card. If that doesn't work, we've set up an 800 number. It's 1-800-318-2596.

If you don't mind, Dana, I'm just going to repeat it one more time, because it's important -- 1-800 318-2596.

We will have operators there 24 hours a day. If you think you have coverage and you're are at a physician's office and they're saying you don't, if you call that number, we will be able to clarify promptly. If there's a complicated problem, we have case workers who can work with you to resolve those issues.

BASH: OK, let me get back to the two million number.

Certainly...

SCHILIRO: OK. I like that number.

BASH: I'm sure you do. Never mind the fact that it is lower than what was anticipated, which was about three million at this point.

But putting sort of the big number aside, what really matters is who are these people?

And can you answer that question?

And when I say who, as you well know, what is needed to make this whole paradigm work is for young, healthy people to sign up.

Are those part -- a big part of the two million?

SCHILIRO: Right.

BASH: Or is it more older people and sicker people who need the insurance?

SCHILIRO: So I've been away from Washington for a little bit and I've forgotten that every piece of good news, people could look for a dark cloud.

BASH: We're just getting a reality check. Not a dark cloud, a reality check.

SCHILIRO: But a reality check is 2.1 million people have signed up voluntarily in the exchange because they want insurance. Another 3.9 have signed up because they want Medicaid. And there are another three million who are on their parents' plan that we don't even count.

BASH: But can you answer the question about this?

SCHILIRO: Yes, yes. I'm going to get to that, Dana.

BASH: OK.

SCHILIRO: You're absolutely right. Long-term, there's a question of what the demographics are, right?

We're not going to have a full answer to that until we're through with this enrollment period, which is going to be late March. At this point, we don't have a breakdown on if it's older people, if it's younger people, if it's 20 percent, if it's 80 percent. As soon as we have that, we'll share it with you. We just don't know it yet.

But the thing that's very encouraging to me -- and you know this because you've covered it so closely -- we had a very slow start, and that's an understatement, in October and November.

The more people see that this is a credible product and this is a place where they can get insurance, more people will want to sign up. And you, at some point, you hit critical mass. That will answer the demographic problem.

BASH: Phil Schiliro, thank you very much.

I want to say that you did come back after two years in New Mexico. Your family is still there. I bet you didn't think you'd be sitting in the White House Briefing Room two years ago.

SCHILIRO: I didn't, Dana. But it's a pleasure talking with you.

A Happy New Year.

BASH: Thank you. And you, too.

And coming up, 2013 was one of the worst years for Congress in the history of our country.

So why are some senators telling me next year will be a whole different story?

And right now, pot sellers in Colorado are prepping their stores for what they hope will be a huge rush tomorrow.

The pot demand appears to be there, but will the sellers be ready?

(COMMERCIAL BREAK)

BASH: For Congress, 2013 is a forgettable year. Fewer bills signed into law than any other Congress in modern history, important must- pass items that are usually no-brainers to pass, like the farm bill, are stuck in legislative limbo. It's no wonder Americans' opinions of Congress is lower than car salesman and cockroaches.

But I'm here to give you a little hope for 2014.

I talked to some senators on their way out of town who actually speak to each other across party lines. And they're optimistic about what the new year will bring, even Republican Susan Collins, one of the few remaining GOP moderates.

(BEGIN VIDEOTAPE)

BASH: Is it better, overall, than you've seen it in a long time?

SEN. SUSAN COLLINS (R), MAINE: First of all, compromise is not a dirty word. It doesn't mean giving up your principles. It means respecting the views of those on the other side of an issue and trying to work together to find common ground.

I'm convinced that's what the American people want out of Washington. And it would be helpful if we had more people in the center to bring that about.

BASH: But I've seen you pretty frustrated in years past. You seem less frustrated now with regard to the concept of compromise.

COLLINS: I think the pendulum is starting to swing back toward the center.

BASH (voice-over): Susan Collins worked with 14 senators as the year came to a close, including these two freshmen, Independent Angus King and Democrat Joe Donnelly.

(on camera): The public approval of Congress is still pretty low.

Does that surprise you?

SEN. JOE DONNELLY (D), INDIANA: No, because what they see every day on television is deadlock, in-fights and screaming. What you don't see every day is large groups of both Democrats and Republicans coming together saying how can we work through this process?

You know, I always say, when folks back home talk about all they see is the screaming, then I say, well, on a lot of these shows, the screamers get all the attention. The people who are doing the work are back in the rooms doing the work.

SEN. ANGUS KING (D), MAINE: I've had people in the last few weeks come up to me and say, thank you for being reasonable. And I thought -- first I thought well, that's a nice compliment. And then I thought, man, that's a pretty low bar.

BASH (voice-over): Senator Ron Johnson came in on the 2010 Tea Party wave, but bucked conservatives by voting for budget compromise.

SEN. RON JOHNSON (R), WISCONSIN: From my standpoint, I'm willing to work with anybody that's willing to acknowledge a problem and work with me in good faith to solve it. That's certainly my resolution. But that's been my resolution since I came here.

BASH: Agriculture Chairman Debbie Stabenow tried and failed to pass a farm bill, but sounds hopeful for 2014.

SEN. DEBBIE STABENOW (D), MICHIGAN: I think people understand that the public expects us to work together and get things done.

BASH: But it's these two freshmen who sound most optimistic.

DONNELLY: Because, you know what, I'm the hired help. I work for everybody back home. And that's how everybody here should be.

KING: We've got to get together in January and talk about how to deal with some of these issues that are dividing us. And I'm -- I'm hopeful.

(END VIDEO TAPE)

BASH: Joining me now are three reporters who know well the gridlock in Congress. CNN political commentator and Washington correspondent for the "New Yorker," Ryan Lizza; Jennifer Steinhauer of the "New York Times;" and BuzzFeed's Washington bureau chief, John Stanton.

Easy for me to say, John.

All right, you know, maybe I'm a sucker, but I actually want to believe what those senators said, that things are going to get better in 2014. You guys are Hill rats. You cover Congress. You walk around and, you know, the halls like I do.

Jen, let me start with you.

What do you think?

(CROSSTALK)

BASH: Are you going to poke a hole in our optimistic bubble?

JENNIFER STEINHAUER, "THE NEW YORK TIMES": Rat number one. Well, I thought one of the most interesting things that happened at the end of the year, and, really, one of the most interesting things that's happened since Republicans took the House in 2010, was John Boehner standing up, as you remember, Dana, you were there, and denouncing some of the right leaning outside groups...

BASH: Yes.

STEINHAUER: -- that have been pressuring members to vote certain ways, to bring down bills, to bring down compromise bills that a lot of people even in the party had been supporting. I think that could presage a different era.

On the other hand, at that same time, we saw over at the Senate, the right leaning senators, particularly those who are up for re-election, really pushing back against, for example, the budget deal.

So I think that will be the interesting dynamic to watch.

JOHN STANTON, BUZZFEED.COM WASHINGTON BUREAU CHIEF: I think the deal -- the budget deal allows them a little bit of space to do some things that there is bipartisan agreement. If you look at sexual assault in the military, Kirsten Gillibrand, on one side, was able to put together a very bipartisan group, while Claire McCaskill, on the other side, was able to put together her own. On immigration, there's a potential for that. And there -- you know, there are a number of issues, whether it's drones, things like that, where there are possibilities for this. Getting these big budget issues out of the way, I think, does make it possible...

BASH: Gosh, this is such an optimistic group.

(CROSSTALK)

BASH: Ryan?

RYAN LIZZA, CNN POLITICAL COMMENTATOR: Well, I'm going to throw some pessimism out.

BASH: Oh, don't be a downer.

Here he is.

LIZZA: I think that, you know, the Senate, it started on a pretty good note, right, during the lame duck in 2012. They -- Biden and McConnell came to an agreement. They passed bipartisan immigration reform by a huge majority.

But as the year wore on and as a lot of the Republican senators started to draw primary opponents and really started to worry about their 2014 races, the Senate descended into a lot more...

BASH: Yes.

LIZZA: -- to look like -- a lot more like the House and ended with this big sort of ugly fight over the so-called nuclear option.

So I think it's very tough to see what's going to come out of the Senate on a bipartisan basis next year, given all the primary challenges.

(CROSSTALK)

LIZZA: On the House...

(CROSSTALK)

LIZZA: -- the House side, it looks like Boehner sort of broke the back of that opposition in his own party by the end of the year. And maybe there's a chance for some stuff to come out of the House.

BASH: Well, let's drill down on some of the big things that we're going to all be covering in a week, I guess, when Congress comes back.

First of all, a minimum wage increase. That's the number one agenda item in the Senate. And then, longer term, February, a debt ceiling increase.

And then you mentioned immigration reform passed the Senate, but the House, if you believe John Boehner, is going to take up this in some way, shape or form, probably in small or bite sized chunks.

Do you think -- I mean you mentioned John Boehner, Jen.

Do you think that the fact that he pushed back against these conservative groups is going to make it easier for him to get immigration passed, which is something that Republicans in the quote/unquote, "establishment," think that they need to do to pull back Latinos into the fold?

STEINHAUER: I think that it is possible but I don't think that translates into an aggressive legislative agenda.

And I do think they continue to fight over ObamaCare, it continues to be a wild card in this dynamic.

Now that we have 2 million people registered, do Republicans continue to push for repeal or do they continue to push this agenda of oversight, does that agenda sort of put in the shadows any other legislative agenda, particularly at a time when people are trying to get re-elected? I don't know that that's necessarily the case.

BASH: Ryan, that is a wild card. ObamaCare, that is basically the entire Republican playbook.

LIZZA: That's not going to go away. The Republicans have to make a decision about that. If the technical issues on the website get better, they have to decide are they still the party of repeal or are they just the party of trying to tweak it and fix the law? So fix it or repeal it.

On immigration reform, the one Republican in the House that proved to have credibility with the Right and the ability to sort of unlock a bipartisan deal was Paul Ryan. He seems to be the one guy on the House side and the Republican side that could perhaps put together a bipartisan deal on immigration reform in the House.

STANTON: I think he's the guy that you have to watch on that issue. Minimum wage is going to be for Democrats what ObamaCare is for Republicans. There's no chance the House will do anything on that issue.

But Democrats are going to use this to sort of demagogue and beat them up just as Republicans use ObamaCare as a great political rallying cry.

Immigration is that one spot, if Paul Ryan is able to duplicate what he did with the budget deal, you could actually see a substantial change to immigration laws in this country. I think that Boehner is trying to find a way to give them some space to do that.

LIZZA: Like all these issues on the Republican Party, he has to be willing to lose quite a few Republican votes and bring in Democrats. That's the difficulty.

BASH: Which he wasn't before but now looks like he is.

Real quick, obviously 2014 is an election year. You mentioned the Senate. That's where all of our eyes are going to be, because Republicans need six seats. They need to bring back six seats in order to take control of the Senate. Such a fascinating story, because the dynamic, just like it was the past two years, first and foremost is, will some of these Republicans get beaten from within their own party and will they hold on to their seats?

What are the races you will be watching, Jen?

STEINHAUER: It's just so interesting because when I start to do the math, you get one, two, three, four seats. You can come up with those off the bat where Republicans look to have a place to move.

But it's always the fifth and sixth seat, right, that is in question. You look at -- it's very hard for me to understand sitting here with you today on New Year's Eve how Democrats, for example, succeed in Georgia. But then you start to look back on the McCaskill race and you wonder if that's a possibility. There are strange races that you are loath to try and predict right now.

BASH: In the past two election cycles, Republicans felt really confident and Democrats were really worried, and it turned out Republicans couldn't seal the deal.

STANTON: They have a couple problems right now on the primary side, Kansas, Mississippi, a couple places where they have members who are being primaried and they have very serious challenges.

These are older members, they have not had to run a real race in some cases decades and they are now looking at somebody who is really coming at them. That will be a fascinating thing, at least in the short term, in this election.

LIZZA: The thing I will look for is the Obama years have been basically a tale of two electorates. In the presidential years, '08 and 2012, big outpouring of new voters, nonwhite voters, new voters that Obama brought into the system. Those voters did not show up in 2010.

Can the Obama machine that helped him win re-election, can he overcome the normal advantage that Republicans will have in a midterm and get some of the new voters out and help the Democrats keep the Senate?

BASH: That will be fascinating to watch. And I just want to say for the record I'm glad to see you all on New Year's Eve but I'm also glad that we are not in Congress as we were last year and the year before and the year before that. There are no cliffs, there are no deadlines, nothing.

Thank you all. Enjoy your New Year's Eve like real human beings. Appreciate it.

(CROSSTALK)

BASH: Thank you, guys.

Up next, anticipation grows for recreational pot to hit the shelves in Colorado tomorrow. But will retailers have enough pot to go around? And they are a popular tourist attraction but will horse-drawn carriages go the way of large sodas and get banned in New York City?

(MUSIC PLAYING)

(COMMERCIAL BREAK)

BASH: With the new year comes an historic new law. Recreational pot is going on sale in Colorado stores but the demand could be so high that pot sellers worry they might run out after the first day. CNN's Casey Wian is in Colorado with the latest.

Casey?

CASEY WIAN, CNN CORRESPONDENT: Dana, I'm at the 3-D Cannabis Center in Denver, Colorado, where in less than 18 hours, retail sales of recreational marijuana will begin. Even though it's just a few hours away from now, there's still a lot of work to do.

You can see what's happening here. These employees are actually putting what are known as RFID tags on each of these plants. They've got 1,200 of these plants to tag overnight. It's a state requirement where all of these retail marijuana sellers are going to have to keep very, very close control over their inventory.

The tags were supposed to get here yesterday. The UPS situation that delayed so many people's Christmas presents, it also delayed some of the tags arriving at marijuana retailers, so the state has given sort of a grace period to some of these retailers to allow them to open tomorrow morning.

We can see if you look at our other camera shot that there are shelves here where the marijuana will be stocked. Marijuana is actually still in a safe, it is not out on the shelves yet. They're waiting until late tonight to do it.

There is obviously a lot of work that remains to be done overnight. Retailers say that they are expecting a long line beginning at 8 o'clock tomorrow morning and they expect that in the not-too-distant future because of the demand and the limited supply for this recreational marijuana, which is a whole different inventory stream than the medical marijuana, they are expecting shortages and higher prices to emerge.

So they're expecting lines outside the door on New Year's Day.

Dana?

BASH: Casey, thanks.

Though recreational marijuana may be illegal for anyone under 21, there are fears it will be much easier for teens to get their hands on it. As CNN's Ana Cabrera reports, Colorado already has a teenage pot problem.

(BEGIN VIDEOTAPE) ANA CABRERA, CNN CORRESPONDENT: How many people around your age do you know who have smoked marijuana?

MARCUS CARRASCO, HIGH SCHOOL SR.: I want to say nine out of 10 students.

CABRERA: It's that prevalent?

CARRASCO: Yes, definitely.

CABRERA (voice-over): Colorado schools have a pot problem.

CABRERA: Where do people get it?

SHAWN BAILEY, HIGH SCHOOL SR.: I don't know exactly, but just like I know that kids smoke it a lot.

MELIK ELLISTON, HIGH SCHOOL SR.: Now that it's legal, everybody's just getting it.

CABRERA (voice-over): While still illegal for anyone under the age of 21, younger people are finding ways to get their hands on marijuana, and we found they don't shy away from talking about it.

ELLISTON: I see people selling it and I think it's easy for people to get now.

CABRERA: Even for somebody who is underaged?

ELLISTON: Yes.

TAYLOR MCCORMICK, HIGH SCHOOL SR.: I know lots of people, most of my friends use it.

CABRERA: : Why do they want to use it?

MCCORMICK: I feel like that it's not typically classified as like a harmful drug, like as meth or whatever.

CABRERA: Do you know of anybody who comes to school high or gets high during lunch break, for example?

CARRASCO: Oh, yes. This is -- yes, definitely.

CABRERA: Not that uncommon?

CARRASCO: Yes, it's not uncommon at all. There's a bunch of people that come to school high.

CABRERA (voice-over): While some teens seem to think using marijuana is OK, schools are trying to send a message that it's not.

Pot is now the number one reason students are kicked out of Colorado public schools, 230 expelled last year because of marijuana, according to the Colorado Department of Education. Pot proving to be a bigger problem than alcohol, disobedience or weapons violations. CHRISTINE HARMS, COLORADO SCHOOL SAFETY RESOURCE CENTER: The message we would like to get out from the School Safety Resource Center is we really need parents to be talking to their children about the risks.

CHRIS COLLINS, RECOVERING ADDICT: That's where all my problems started with weed, I guess.

CABRERA (voice-over): Eighteen-year-old Chris Collins knows about the risks all too well. He says he began experimenting with marijuana when he was just 10 years old. By age 14, he was hooked.

CABRERA: What did you get out of it?

COLLINS: Bad grades and trouble, pretty much.

CABRERA (voice-over): Kicked out of school, he's been in and out of jail 10 times in the past four years.

COLLINS: When I was 14, that was the first time I got my first drug paraphernalia ticket. I had possession of under an ounce. And I had like six drug paraphernalia tickets, five possession (INAUDIBLE) tickets. And it slowly got worse.

CABRERA (voice-over): Collins warns marijuana isn't as harmless as some may think.

CABRERA: Did you ever think you were going to become addicted to it? Did you really realize even what was happening?

COLLINS: Like I didn't think it was possible to like become addicted to marijuana, I guess.

DR. PAULA RIGGS, ADDICTION SPECIALIST: The evidence is very clear that it's addictive.

CABRERA (voice-over): Adolescent and addiction specialist Dr. Paula Riggs says one out of six kids who tries marijuana as a teenager will become addicted. She says compared to the 1960s, the marijuana sold today has a higher concentration of THC, a chemical that impacts memory and learning, reaction time and motor skills.

Riggs says a developing brain is most vulnerable.

RIGGS: Daily or near daily use can be associated with six to eight point reduction in their adult IQ. Looks like you don't get that back.

CABRERA (voice-over): Collins has a lot in life he wants to get back. Now drug-free for eight months, he's focusing on small goals.

COLLINS: To graduate, get my license back.

CABRERA (voice-over): And he hopes sharing his story will help prevent others from going down the wrong path by using pot -- Ana Cabrera, CNN, Denver.

(END VIDEOTAPE)

BASH: Just ahead, a controversial move by New York City's mayor- elect. Why he wants to ban one of Central Park's most popular and iconic attractions.

And Kim Jong-un goes skiing -- or at least he takes a ride on the ski lift. The latest and some of the strangest images coming out of North Korea.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

BASH: It's an image you've probably seen before, even if you've never been to the Big Apple. Wide-eyed tourists riding through New York's Central Park on horse drawn carriages, but that soon could be a thing of the past. CNN's Margaret Conley is joining me now from New York's Times Square.

Margaret, say it ain't so. My two year old wants to go see the horsies the minute we get to New York City. Is it possible he won't see them anymore?

MARGARET CONLEY, CNN CORRESPONDENT: It's possible. It's a horse and buggy battle. And as it's playing out, a lot of tourists are heading to New York's other iconic location. They're heading to Central Park to try to see the horses or go for one last carriage ride. This is as Mayor-Elect Bill De Blasio say it's over.

(BEGIN VIDEOTAPE)

CONLEY (voice-over): Horse drawn carriage rides, they're an iconic way for so many visitors to take in New York City's Central Park. But soon they may be a thing of the past. Tomorrow New York Mayor-Elect Bill de Blasio takes the reigns at City Hall from current mayor Mike Bloomberg, and he plans to make good on a campaign promise to pull the carriages off the streets.

BILL DE BLASIO, NEW YORK MAYOR-ELECT: We are going to get rid of the horse carriages, period. It's over.

CONELY: The carriage rides have been offered in Central Park for more than 100 years, they've been celebrated on film, here in "Barefoot in the Park."

UNIDENTIFIED ACTRESS: We just got married!

CONELY: And on TV, including HBO's hit series, "Sex and the City."

SARAH JESSICA PARKER, ACTRESS: And I wasn't going to question any of it, not even how he found a horse-drawn sleigh in the middle of Manhattan.

CONLEY: And they've been at the top of so many tourists' must-do lists.

UNIDENTIFIED FEMALE: That's part of New York City!

UNIDENTIFIED FEMALE: It's one of the things you need to do.

UNIDENTIFIED FEMALE: Don't get rid of the horses or we won't come back.

PROTESTERS: How many horses have to die?

CONLEY: But animal rights groups have long been calling for a ban on the rides, citing accidents like these. And they argue the animals are forced to live in conditions they describe as inhumane.

UNIDENTIFIED FEMALE: No matter what they say, the horses are really not kept in a good condition.

CONLEY: Mayor-Elect De Blasio says he's open to alternatives, including possibly replacing the carriages with antique-style electric cars. But carriage driver Stephen Malone says the move to get rid of the horses just won't work and that he and other drivers plan to fight it in court.

STEPHEN MALONE, CARRIAGE DRIVER: The horses are the star. It's not the car. It's not the carriage. It's not me. He's the star. That's what people come for. You can't create that with an electric car. You'll never create it. Kids can't pet fenders. They pet horses.

(END VIDEOTAPE)

CONLEY: The two sides are going back and forth. The animal rights activists say it's not right for the animals to be in an urban setting, that it's too dangerous for them to be riding around places like here in Times Square. Meanwhile, the carriage drivers are fighting for their jobs. They say that the horses are actually being treated well. Some of them get five weeks of vacation, and up to six months off. But regardless, De Blasio says he's hired legal council to get it done. Dana?

BASH: Margaret, thank you very much.

Now let's take a look at some of the other stories coming into THE SITUATION ROOM. More trouble for Target this holiday season. The retail giant says some customers are having trouble using their Target gift cards in stores. Target says the cards will be honored; customers just need to bring them in to the guest services desk. This comes Target revealed it was the victim of a massive credit card hack affecting 40 million customers and their pin numbers.

Warring sides in South Sudan say they've agreed to peace talks, the cease-fire being at the top of the agenda. The south Sudanese government has been fighting with rebels loyal to the former vice president who the president has accused of trying to launch a coup. At least 122,000 people have been displaced since the crisis began.

North Korean leader Kim Jong-un is known to enjoy luxury, apparently even skiing. North Korea media have released pictures of their leader taking a ride on a ski lift, and recently, at a ski resort that was built in North Korea. Kim Jong-un reportedly grew to love skiing when he studied in Switzerland as a young man, which he did under a fake name.

And Wall Street ended a record-setting year with more record closing highs. The Dow Jones Industrial and S&P 500 both closed at new all time highs. The NSADAQ finished at its highest level in 13 years. It's been a big year for the Dow and the S&P 500; both indexes recorded their biggest annual gains since the late 1990s.

And coming up. They've created some of the most hilarious moments on new year's eve TV. Anderson Cooper and Kathy Griffin are back at it tonight, hosting CNN's coverage. Next, we'll look at some of their funniest moments together.

(COMMERCIAL BREAK)

BASH: Anderson Cooper and Kathy Griffin are back ringing in the new year on CNN tonight. Here's a preview.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR: What are we going to do on new year's eve?

KATHY GRIFFIN, COMEDIAN: I'm going to give you a pot brownie right at nine.

COOPER: No, that's not - we -- that's not going to happen.

GRIFFIN: I also, by the way, have a written statement from my mother, because every year she is embarrassed by my behavior.

COOPER: Yeah, I know.

GRIFFIN: May I read it?

COOPER: Sure.

GRIFFIN: "Dear Mr. Cooper, The Vanderbilts, the Roosevelts, and the entire team at CNN,

I am quite thrilled that my daughter, Kathleen Mary, was asked to join Mr. Anderson Cooper, Taylor Swift and Miley Cyrus for the celebration."

COOPER: They're not going to be on.

GRIFFIN: All right.

"I am also happy that Santa Claus remains now and forever white."

Oh, God. She watches Fox a lot.

"I've already begun toasting to your success by enjoying the finest of boxed wines." That's true. "Please know that I will never forgive myself if my daughter, Kathleen, shames the Griffin name yet again. The only promise I can make is that I will not be sober during your broadcast, love Maggie."

There's your beloved Maggie that you think is so charming

COOPER: I do think she is charming. I think she is lovely, and I find it hard to believe that you come from her.

GRIFFIN: Well, guess what?

COOPER: What.

GRIFFIN: She's here right now.

COOPER: Really? Are you serious?

GRIFFIN: Mom, Mom. Look over there.

COOPER: Hey, maggie, how's it going?

MAGGIE GRIFFIN, MOTHER OF KATHY GRIFFIN: Hi, Anderson, how are you doing?

COOPER: I'm doing all right. Are you going to watch us on new year's eve?

M. GRIFFIN: Oh, definitely, Anderson. Certainly, I'm going to watch her.

K. GRIFFIN: What are you looking forward to with Anderson on new year's eve? Tell him. He's right there.

M. GRIFFIN: There are some things that Kathleen Mary is not going to do.

COOPER: What's she not going to do?

M. GRIFFIN: Well, she's certainly going to be a pillar of elegance. That's for sure. And there will be no transactions.

K. GRIFFIN: Transactions.

M. GRIFFIN: Shenanigans. No shenanigans. Yes.

K. GRIFFIN: But I'm curious about the transactions. What transaction?

M. GRIFFIN: As a mother, I can promise you, that she'll be fully dressed at all times, thank God. And she will also not take The Lord's name in vain.

COOPER: Good.

M. GRIFFIN: Or attempt to disrobe Mr. Anderson, Mr. Cooper.

K. GRIFFIN: You don't have to call him Mr. Anderson, okay?

(CROSSTALK)

COOPER: Is she reading from the CNN contract that you why forced to sign? I hope so.

K. GRIFFIN: Yes, she is. And we had to put it in really big font. And she doesn't normally read contracts.

COOPER: Let me just show Kathy a little bit of what I'm concerned about, as always, given your past behavior.

(BEGIN VIDEO CLIP)

COOPER: I'm here with Kathy Griffin.

K. GRIFFIN: I'm here with not Ryan Seacrest.

Let's throw stuff at the Jonas Brothers! You're frauds! I don't even -

COOPER: You can't do that! You just threw something at the Jonas Brothers!

K. GRIFFIN: Yes, I did.

COOPER: I almost wore this. I was this close to wearing this.

K.. GRIFFIN: This is not awkward at all. Sorry. Hi, everybody. Take your hands off me. Honestly.

COOPER: Kathy was saying it was like the prom she never had.

K. GRIFFIN: That's right.

COOPER: I texted her to say happy Thanksgiving. And you know what she texted back? Are you drunk?

(END VIDEO CLIP)

COOPER: But seriously, I know that's your shtick, and that's what you do, but I am really hoping this year - just like, keep it clean. Don't be tawdry, you know?

K. GRIFFIN: I didn't know it was the roaring '20s. I'll try not to be tawdry at the speakeasy with prohibition and all. First of all, we're on from 9:00 until 12:30. So...

COOPER: That's what concerns me.

K. GRIFFIN: You really think by 12 I'm going to care anymore?

We should pick like a clean block, so maybe it's 9:15 until 9:30. I'm dressed and then the rest it's just go time.

COOPER: Go time.

(END VIDEOTAPE)

BASH: That's 9:00 eastern, Anderson Cooper and Kathy Griffin, they will be ringing in the new year like only they can on CNN. Happening now, new year's eve security. We're watching crowds gather in Times Square along with the police, who are tracking any potential threats on this night of celebration.

Plus, robot screeners. Airports are testing facial scanners and other high-tech security systems. Are they better than old-fashioned human security checks?

And photo bombshell. On-air chatter about Mitt Romney's family Christmas card ignites controversy involving race and a cable TV network.

Wolf Blitzer is off today. I'm Dana Bash. You're in THE SITUATION ROOM.