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Obama Speech: Ready to Move Alone; Obama's Approval Low before Big Speech; Interview With Rep. Michele Bachmann and Sen. Bernie Sanders; "They're Killing Us"; Can Immigration Reform Pass the House?; Interview With Rep. Steve King

Aired January 27, 2014 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much. Happening now, new details of what President Obama will say in his "State of the Union" address and what he's ready to do alone, if necessary, in the year ahead.

Also, are the rich getting richer while everyone else is left behind? The hot topic in the president's speech is a hot button issue across the country, income inequality. And we'll have a debate with Senator Bernie sanders and Congresswoman Michele Bachmann. They are both here live this hour to debate in THE SITUATION ROOM.

And another CNN exclusive -- our own Jim Sciutto is inside Iran, where tough rhetoric is going on right now and many ordinary people view sanctions relief as a life or death matter.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

President Obama is fine tuning his all important State of the Union Address right now. We're getting new details of what he will say.

The president will go before Congress and the nation, indeed, the world, tomorrow night, determined to put his agenda back on track.

He'll make it clear that he views 2014 as a year of action and will make it also clear to Congress he's prepared to act on his own, if necessary.

Let's go straight to our senior White House correspondent, Jim Acosta -- Jim.

JIM ACOSTA, CNN CORRESPONDENT: Wolf, aides to the president say he is frustrated with Congress and will be talking about using his phone and his pen in tomorrow night's speech. That is a reference to his promise that he has repeated over the last several weeks that he is going to use some executive authority power to get action in the coming year, when Congress won't act.

And it is also a risky path ahead.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): It was the shortest of sneak previews in a six second video using social media.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tomorrow night, it's time to restore opportunity for all.

ACOSTA: Despite that optimistic tone, White House officials say President Obama will announce in his State of the Union that he's ready to get tough and bypass Congress when necessary.

(on camera): It sounds like he's frustrated and maybe a little bit flustered.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Well, he's an American citizen and it stands to reason that he might be frustrated with Congress, since most American citizens are.

ACOSTA: So in Tuesday's speech, aides say the president plans to highlight new executive actions, some aimed at job training and retirement security programs.

But White House officials caution he'll still call for legislation when needed on immigration reform and the minimum wage.

CARNEY: The president's view is that he should use every tool available to him to move the country forward.

ACOSTA: There's no mistaking the message.

OBAMA: I've got a pen and I've got a phone. And that's all I need.

ACOSTA: The president's vow to use executive authority to achieve a year of action...

DAN PFEIFFER, WHITE HOUSE SENIOR ADVISER: And we're putting an extra emphasis on it in 2014.

ACOSTA: -- has Republicans on edge.

(BEGIN VIDEO CLIP FROM "STATE OF THE UNION WITH CANDY CROWLEY")

SEN. RAND PAUL (R), KENTUCKY: It sounds vaguely like a threat. And I think it also has a certain amount of arrogance in the sense that one of the fundamental principles of our country were the checks and balances.

ACOSTA: The White House says there's a reason for the new approach.

Remember these bills?

OBAMA: The time has come to pass comprehensive immigration reform.

Raise the federal minimum wage to $9 an hour.

The families of Newtown deserve a vote.

ACOSTA: They all stalled. DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: He likes to talk about, oh, yes, well, I still have my pen and executive power. Then use it. Do it, one after the other. Take them on.

ACOSTA: But presidential historian Douglas Brinkley says there's a big problem with promising a year of action.

What if there isn't any?

BRINKLEY: But when you say you're going to do a lot of executive action, it's the year of action and it becomes May and the record doesn't show that, then you truly become a lame duck.

(END VIDEO TAPE)

ACOSTA: As for the State of the Union speech, officials here at the White House say it is almost ready. But the president will stay busy well after Tuesday night. He's going to be hitting the road to sell his message.

First, he'll be in Maryland, before heading over to a steel mill in Pittsburgh and then on to Wisconsin, and Tennessee after that. It is going to be a tough message, though, after this State of the Union speech, and increasingly more so given the fact that this is an election year. The midterms will be coming up quickly -- Wolf.

BLITZER: They certainly will.

All right, Jim Acosta at the White House. Thanks very much.

Let's dig a little bit deeper right now with our chief political analyst, Gloria Borger; our CNN political commentators, the former Bush White House speechwriter, David Frum, and Ryan Lizza, the Washington correspondent for the "New Yorker" magazine -- Gloria, look at these poll numbers. Right now, as he enters the sixth year of his presidency, Obama has got a 44 percent approval number. That's like Bush was at his sixth year, 43 percent. Bill Clinton was at 59 percent. Ronald Reagan, back in '86, was at 64 percent.

GLORIA BORGER, CNN POLITICAL ANALYST: Ah, restoring economies.

BLITZER: Yes.

BORGER: You know, think about the economic numbers for 1990...

BLITZER: So that -- so basically, that's what your analysis is?

BORGER: Yes. I think I -- look, I mean -- and don't forget that Bill Clinton's State of the Union was right around the time the Lewinsky story broke.

UNIDENTIFIED MALE: Yes.

BORGER: And then, of course, his numbers started plummeting. But the economy was doing well, both for Bill Clinton and for Ronald Reagan. And that's what makes you a popular president. Right now, people don't think that Obama has handled the economy very well. And they felt that same way about -- about George Bush.

BLITZER: I assume, Ryan, if the economy improves, job numbers, job -- unemployment goes down, his approval numbers will go up, because, after all, the economy still is issue number one.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: They will, absolutely. But remember, in Bush's last couple of years, those numbers kept going down because of the Social Security plan failed and then Katrina and just -- and then the war in Iraq...

BLITZER: He tried to get comprehensive immigration reform.

(CROSSTALK)

BLITZER: That failed for Bush, as well.

UNIDENTIFIED MALE: Right.

BLITZER: So it's a -- the president has got a -- in other words, tomorrow night -- and you're a former speechwriter, David -- he's got a full agenda ahead of him. He's got a lot of issues he's got to deal with.

DAVID FRUM, CNN POLITICAL COMMENTATOR: He's got a one point agenda tomorrow night. We're heading into our seventh year of disappointing economic results and the president's agenda tomorrow night is to mobilize his core supporters and give them a reason to come out to vote for him, despite the fact that they have seen very little material benefit from his presidency.

So he's there. He's going to hit immigration reform. Come out and vote for me and I'll get you one more time that immigration reform I promised and promised. He'll hit the minimum wage for the same reason. This is about mobilizing -- a desperate, hopeful attempt to mobilize a desperate -- the Democratic base...

BORGER: Well...

FRUM: -- for November 2014.

BORGER: And, you know, as unpopular as President Obama might be now, Congress is a lot less popular. They've been in single digits not -- not too long ago. So by saying, look, I could not change the way Washington worked, which is, of course, what he intended to do when he came here...

BLITZER: Yes.

BORGER: -- now he's saying I can work around Washington and that's what I'm going to do. And, you know, he believes -- and the folks at the White House believe that the American public will be on their side, because Congress is so dysfunctional.

UNIDENTIFIED MALE: Congress does not have... LIZZA: Don't you think that -- do you really think that his message right now is for the base and to...

FRUM: Yes.

LIZZA: -- he's thinking about the mid-terms?

BORGER: Sure.

LIZZA: You don't think he's trying to squeeze a couple of things out of this Congress...

(CROSSTALK)

LIZZA: -- before?

I mean isn't that the tension, though?

BORGER: Well...

LIZZA: That's the tension. He's got to figure out a way...

FRUM: Presidential States of the Union do not squeeze things out of hostile Congresses.

(CROSSTALK)

LIZZA: -- for the rest of the year, though.

(CROSSTALK)

FRUM: He...

BORGER: I think there are things they can do.

FRUM: I -- I doubt it. I think he's going to discover a lot of resi -- continuing resistance from Congress. Immigration reform has long since ceased to be an issue that the president is trying to enact. It's an issue that he is using...

BLITZER: All right...

FRUM: -- to try to get...

(CROSSTALK)

BLITZER: Hold on. Hold on a second...

(CROSSTALK)

BLITZER: -- because...

BORGER: But he can get pieces...

BLITZER: -- the...

BORGER: -- a little piece of it here and there, I think.

(CROSSTALK)

BLITZER: A little piece is not good enough.

(CROSSTALK)

BORGER: Right.

BLITZER: He's got to do a significant comprehensive immigration reform, because there will be a lot of Democrats who won't be happy unless there's a pathway to citizenship. We're going to have a lot more on this coming up.

So if you just do a piecemeal here, a piecemeal there...

(CROSSTALK)

FRUM: He is relaxing enforcement.

BLITZER: Yes.

FRUM: He's relaxed enforcement in various ways, but he has not yet delivered the big exciting thing that persuades people despite...

(CROSSTALK)

FRUM: -- bad -- bad news for me personally, I will still vote for the president.

BORGER: But Democrats can then use it to run against Republicans in the midterm elections.

BLITZER: He says he's got a pen, he's got a phone, he can do things on his own, Ryan.

UNIDENTIFIED MALE: Yes.

BLITZER: Here's what John Boehner said about that.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Instead of work -- of looking to work together, the president, this week, reminded people that he has, quote, "a pen and a phone."

I would remind the president he also has a constitution and an oath of office that he took where he swore to faithfully execute the laws of our country.

(END VIDEO CLIP)

BLITZER: Now, he can sign executive orders...

UNIDENTIFIED MALE: Yes.

BLITZER: -- that are totally within the realm of "The Constitution." There's not a problem as far as that's concerned, as far as I know.

LIZZA: Yes, look, he's the president. He's the top banana in our system. He can sign executive orders. That is legal.

Boehner there is suggesting that it's somehow inappropriate for the president to use executive orders, which has become something on the right. There is this sort of name on the right that the president has been going around...

(CROSSTALK)

LIZZA: -- "The Constitution."..

BLITZER: But Republican presidents have signed executive orders, David, as well.

(CROSSTALK)

FRUM: Well, it depends what's in the executive order. There are executive orders and there are executive orders.

But if the president thinks that he is going to be able to govern effectively in a way that is going to make a difference for hard- pressed voters with executive orders, he's wrong, because the places where the president can make a difference are through...

(CROSSTALK)

LIZZA: This is all very deceiving...

(CROSSTALK)

BORGER: He can...

(CROSSTALK)

LIZZA: -- but this is all very deceiving, this idea with a pen and the -- and the sword (INAUDIBLE)...

BORGER: Pen, phone.

LIZZA: And the phone.

BORGER: Pen, phone.

LIZZA: David is absolutely right about that. There's -- you -- if presidents could govern and solve the big problems of the country through executive order, most of our problems would be solved.

BORGER: Right. And I'm...

(CROSSTALK)

BORGER: -- I'm not convinced exactly what...

FRUM: The sequester is going to stay... BORGER: -- he can do because he can do some things...

FRUM: -- the sequester will (INAUDIBLE) the law. Squeezing and squeezing and squeezing the fiscal capacity of the federal government. We are in a hot -- we have got a highly contractionary fiscal policy and that's going to continue regardless of who the president calls on his phone...

BORGER: I -- I -- I'm not convinced...

FRUM: -- and regardless of what he doodles with his pen.

BORGER: -- I'm not -- well, and the point is, what can he do through executive orders?

LIZZA: Right.

BORGER: He can -- I was talking to some people today. OK. He can do some things on climate change, for example.

LIZZA: That is true. Surely, that's...

BORGER: That is...

LIZZA: -- at the realm of regulations and he can do that.

BORGER: He can do that. He's trying to work now with the cabinet, which we haven't seen before...

UNIDENTIFIED MALE: Yes.

BORGER: -- trying to figure out from them what regulations he can sign so he can get something done.

UNIDENTIFIED MALE: Yes.

BORGER: But on the larger issues -- and this goes to the point of legacy...

UNIDENTIFIED MALE: Yes.

BORGER: -- is that immigration reform is something he wants to get done. He wants to get some agreement on NSA surveillance, I would presume, right?

LIZZA: And I -- that's one thing, tomorrow night, I'm going to be listening for.

BORGER: He failed on gun control. Right.

BLITZER: We'll be listening to a lot.

And one thing the Republicans keep saying -- and we're not going to have time to discuss it now -- go ahead, Mr. President, you want to sign something, sign that order allowing the Keystone XL Pipeline to go from Canada... BORGER: Right.

BLITZER: -- through the United States. That would work wonders as far as...

BORGER: And upset your base.

(CROSSTALK)

BLITZER: -- Democrats support that, as well.

LIZZA: The chip he has with Republicans...

BLITZER: He does have that chip.

LIZZA: -- because I don't think Obama -- I don't think Obama cares about keystone XL.

BLITZER: Well ---

FRUM: Unlike his base does.

BORGER: But his Democratic base -- yes.

BLITZER: But he may want something in exchange for that, something maybe like raising the nation's debt ceiling, which a lot of Republicans, like Mitch McConnell, have already thrown out.

All right, guys, a good discussion.

UNIDENTIFIED MALE: Thanks, Wolf.

BLITZER: Thank you.

CNN, by the way, we're going to have extensive live coverage of the president's State of the Union Address starting right here in THE SITUATION ROOM tomorrow. Extensive coverage also continuing, 7:00 p.m. Eastern.

Up next, are the rich getting richer and leaving everyone else behind?

With President Obama ready to talk about income inequality, we're ready for a major debate. Here they are, Congresswoman Michele Bachmann, Senator Bernie Sanders. They are both here -- welcome -- in THE SITUATION ROOM.

Senator, good to have you.

Are you guys ready?

Have you been practicing and ready to go?

(COMMERCIAL BREAK)

BLITZER: One major theme we're expecting President Obama to focus heavily on in the state of the union address tomorrow night, income inequality. The poverty rate has barely budged during his presidency, and right now, nearly 47 million people are living below the official poverty line, about 16 million of them children. And it all comes as the country marks 50 years since President Johnson's famous war on poverty speech. Poppy Harlow has some background.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN CORRESPONDENT: Fifty years ago, this country launched a war on poverty. Has it worked?

ANN VALDEZ, LIVES IN POVERTY: No.

HARLOW (voice-over): We first met Ann Valdez four years ago. She was living with her children in this public housing complex just like her mother and her grandparents had.

VALDEZ: Poverty is really very serious. It's very demoralizing.

HARLOW: Welfare and food stamps got her by, barely, as she looked for work. We came back a year later to see how Ann was doing.

Has the situation gotten better for you?

VALDEZ: No, it actually hasn't changed very much.

HARLOW: When we met Ann's son, Brian, in 2011, he told us this is what he wanted to see.

UNIDENTIFIED KID: Senator, congressman, even the mayor to come down here, see what's going on, see how destroyed these neighborhoods are, the spirits of these people. They are completely gone.

HARLOW: A long struggle with scoliosis, Ann says, means she can't do certain jobs.

VALDEZ: If I get a minimum wage job, it's still going to leave me to have to apply for Medicaid assistance. So, I'm still dependent on the system.

HARLOW: Dependent on the system. Hers is just one of the stories of the nearly 47 million Americans living in poverty, 50 years after President Johnson declared war on it. This cycle of poverty has taken its toll on Ann Valdez.

VALDEZ: I'm 47 years old, trying to raise my family, trying to set an example, and, I tell them how important education is, perseverance, and it's difficult because they look at me and say, well, look at you. Here you are, still fighting and you can't get a job.

HARLOW: Her unemployment benefits ran out years ago. Today, Ann says she gets $290 a month in public aid, $347 in food stamps, and her rent is subsidized, but years of welfare hasn't helped her climb out of poverty.

If this isn't working, what do you need? VALDEZ: If you teach people how to do certain skills, then you're more likely to be able to obtain a position and maintain. I'm not asking for them to raise the check. What I'm asking is for them to make more opportunities.

HARLOW: An opportunity she hopes will come from education. She's still not employed, but she's in school part time and will try to find administrative work once she finishes.

Do you think things are going to change for you?

VALDEZ: I know they're going to change.

HARLOW: As the years go by, though, it's harder to see where that change will come from.

Poppy Harlow, CNN, New York.

(END VIDEOTAPE)

BLITZER: Let's talk about this and more with two guests. The Minnesota Republican congresswoman, Michele Bachmann, and the independent senator from Vermont, Bernie Sanders. Thanks to both of you for coming in.

So, what would do you about this issue of income inequality? It's a poignant story we just told, we just heard, and the president is going to be focusing in on this in the state of the union address.

REP. MICHELE BACHMANN, (R) MINNESOTA: Well, I thought the segment that just ran was excellent. I agreed with Ann. I agreed with what she was saying because what she's saying is that I've been on dependency entitlement programs for years. They haven't changed my life. What I want is a job. And that's what we need.

It isn't income inequality, it's income opportunity. We need growth, we need prosperity, because a job is what she wants. That's the dignity that she needs and the opportunity for a way out.

BLITZER: She wants an education, too, to help her get a job. You don't have a problem with that?

SEN. BERNIE SANDERS, (I) VERMONT: Do I have a problem with that? No. I think it's absurd that we probably have the most dysfunctional early childhood education system in the entire world, that the cost of college is soaring and I believe that we should learn from many countries that understand that education is an investment and that every kid in this country, regardless of income, should have educational opportunity.

BLITZER: What do you want to hear the president say tomorrow night?

SANDERS: Well, what I want to hear him say is quite somewhat what the pope has said is that is that at a time when we have the top one percent in this country owning 38 percent of the financial wealth and the bottom 60 percent owning 2.3 percent of the wealth, that that is at the top of the wealth, that that is obscene, that is unacceptable, and that is not what America is about.

In terms of income in the last few years, 95 percent of all new income generated, Wolf, went to the top one percent. So we need an economy that works for all of the people and not just millionaires and billionaires.

BLITZER: Congresswoman?

BACHMANN: Well, we need to grow the middle class and what the middle class needs are jobs. That's really the problem that the president has to explain. It's tough to blame President Bush for the current economic woes. We have five years of Obama policies and what do we have? We have people who are really suffering because people made more money. If you look at the median income level, people actually made more money seven years ago than they're making now.

People have every right to be upset. So, what we need to do is reject these policies of growing entitlements and dependency and instead embrace policies that will grow jobs for people, because that's the question.

BLITZER: You want less government --

BACHMANN: President Obama, where is the job?

BLITZER: You want less government, but senator you want more government?

SANDERS: The congresswoman kind of forgets to mention is that when Obama became president, we were losing over 700,000 jobs a month because of the greed and the recklessness and illegal behavior on Wall Street (ph). Is the economy good today? No, it is not. Is it a heck of a lot better than when Obama first came? Sure, it is. The real issue that we need right now is, in fact, how do you create jobs, how do you protect working families.

Cutting Social Security, Medicare, Medicaid, abolishing the minimum wage with some of my more conservative friends want to do is it's not going to help Ann and it's not going to help millions of workers. We need a real jobs program. We need to rebuild our crumbling infrastructure, put millions of people back to work. Make states like Minnesota and Vermont more energy-efficient, so people are --

BLITZER: Where are you going to get the money?

SANDERS: You're going to get the money by asking the wealthiest people in this country --

BLITZER: More taxes.

SANDERS: Pardon me?

BLITZER: More taxes on the wealthy people.

SANDERS: Yes, my goodness. Given the fact that one out of four corporations in American doesn't pay a nickel in federal taxes, given the fact that the wealthy are doing phenomenally well, their tax rates are much better lower than they were in the days of that old socialist like (INAUDIBLE). Yes, I do think the wealthy --

BACHMANN: Well, let's talk a little bit about tax rates. I'm a former federal litigation tax attorney. If there's anything that's been proven over time, Wolf, it's this. When you lower the tax burden, that's a cost of doing business, you create more jobs. That's exactly what the piece that preceded our segment said. This woman, Ann, wants a job. And so, we have people all across United States who have an ability to start companies.

Single mothers like Ann want to start a business. We're not talking about mega businesses. We're talking about people who just want to get in on an economic ladder.

BLITZER: So, basically, what's she's saying, senator, if you raise taxes on those big corporations, there won't be enough jobs. They're going to cut back on hiring.

BACHMANN: It's not only that.

(CROSSTALK)

BACHMANN: No. Let me say something. It's not only that. It's also the fact that government is spending too much. The share that government has been spending -- the question is, will people like Ann have money in her pocket to spend or will it be government's big pocket that will be gulping our money? That's a big problem.

SANDERS: The fact of the matter is that those countries around the world, which have virtually eliminated childhood poverty are those countries that have invested heavily in education.

BACHMANN: Now, where is that?

SANDERS: Excuse me.

BACHMANN: Which country has eliminated childhood poverty?

SANDERS: -- Denmark virtually eliminated. We are at 22 percent. They are less than five percent. Those countries guarantee health care to all people as a right -- and you know what, let me finish, please. And you know what, they spend about 50 percent per capita on health care than what we do. So, those countries that have strong -- that's not socialism.

(CROSSTALK)

BACHMANN: -- like Norway, let me add. The reason why Norway has so much wealth is because they tap into the natural resource called energy. We could be energy independent in this country. Create millions of high-paying jobs if we only open up and legalize American energy production.

(CROSSTALK) BACHMANN: It totally matters. We've got huge natural resources. In fact, we're the number one country in the world in energy resources and we say no to it.

SANDERS: Yes. But the fact of the matter is --

(CROSSTALK)

BACHMANN: People like Ann could have good, high paying jobs.

BLITZER: Go ahead, senator.

SANDERS: The fact of the matter is we've had an energy boom in recent years, but 95 percent of whole new income -- excuse me -- 95 percent of all new income went to the top one percent. Now, what I think Ann was talking about -- excuse me -- I think what Ann was talking about is the desire for education. My version (ph) is she'll have a whole lot of money.

BACHMANN: She wants a job. Ann wants a job.

SANDERS: I heard her say --

BACHMANN: She wants a job and she wants to be able to support her family.

SANDERS: I think she also said she needs education in order to get the job. And if you don't have any money, it's hard to get education.

(CROSSTALK)

SANDERS: In America, we have the highest --

BACHMANN: -- education, we've got a great educational system. She needs access to that.

SANDERS: Excuse me.

(CROSSTALK)

SANDERS: In America, you have a college education system where costs are soaring, where kids leaving school 25, $50,000 in debt, and hundreds and thousands of young people have given up on college.

BACHMANN: And what's an American policy when it comes to hire education? It's been less but more federal government --

(CROSSTALK)

BACHMANN: You look at the correlation, the federal government has actually increased the cost of education. So, now, there's a trillion dollars of debt outstanding from American kids.

SANDERS: You've got it a little bit backwards and I think the idea that solving the very serious problem of declining middle class and the growing gap between the wealthy and everybody else is to do what some of Miss Bachmann's colleagues, perhaps, yourself. You want to cut Social Security. You want to transform --

BACHMANN: That's absolutely a lie.

(CROSSTALK)

BACHMANN: -- brought out all the time --

(CROSSTALK)

BACHMANN: Well, it's a lie. Let's face is, Senator Sanders.

(CROSSTALK)

BACHMANN: You shouldn't be lying about what our position is.

SANDERS: I'm not lying.

BACHMANN: Ask me. Ask me. Do I want to cut Social Security? No. I'm not cutting Social Security. That is not what I'm doing.

SANDERS: You support a change --

(CROSSTALK)

SANDERS: Do you support a change CPI?

(CROSSTALK)

SANDERS: You're not answering the question, do you support a change CPI?

BACHMANN: It is a joke for the Democrat Party to lie about what our position is.

(CROSSTALK)

SANDERS: I asked you a question. You didn't give me an answer.

BACHMANN: Well, calm down.

SANDERS: Do you support a change CPI?

BACHMANN: Calm down. The reality is, we want Ann's life to be better because President Obama has created an economic war on women so that women are saying, I can't even buy propane to heat my house, and now, my health insurance premiums have quadrupled because of Obamacare. That's an economic war on women. We want women --

(CROSSTALK)

BLITZER: On the social security issue, even the president of the United States has indicated, correct me if I'm wrong, he's willing to take the position you strongly disagree.

SANDERS: I sure do. And I believe that virtually every Republican in the United States Congress believes in cutting Social Security. BACHMANN: That's absolutely a lie.

SANDERS: The Ryan budget --

(CROSSTALK)

SANDERS: The Ryan budget called for the transformation of Medicare into a voucher program, massive cuts in Medicaid and many Republicans --

(CROSSTALK)

SANDERS: Can I finish my point? Can I finish my point?

BACHMANN: But when you say something that isn't true, I have to correct it. It's not true.

SANDERS: Do you believe in raising minimum wage?

BACHMANN: What I'm saying is --

SANDERS: Do you believe in raising --

BACHMANN: -- economic opportunity. Let me tell you what happened in Australia. The minimum wage in Australia is $20 an hour. They're losing the Ford (ph) plant. They're losing the GM plant.

(CROSSTALK)

SANDERS: She doesn't want to talk about that.

BACHMANN: No. I want job growth. I want opportunity and I want people's wages to go up.

SANDERS: Yes, I know. We all do. But --

(CROSSTALK)

SANDERS: Most republicans, by the way --

(CROSSTALK)

SANDERS: Excuse me.

BACHMANN: People's wages have gone down eight percent in seven years. Not just stayed the same.

SANDERS: Wolf, may I --

BACHMANN: They've gone down eight percent for median --

BLITZER: Go ahead. Respond to --

SANDERS: Most Republicans and Ms. Bachmann to tell us her view believe in abolishing the concept of the minimum wage so that employers in America can pay workers $3 or $4 an hour. BACHMANN: You know, all of this is --

BLITZER: I don't know if it's most. I know there are plenty --

SANDERS: In the Senate, by the way --

BACHMANN: All we've heard are these broad-brushed generalized statements. What we haven't heard is how one job is going to be created for Ann. Ann wants a check. Those poor kids sitting in the kitchen, that woman needs to be able to be able to buy a home, own a car, move up, help her kids.

SANDERS: We've had the trickle-down economic -

(CROSSTALK)

BACHMANN: Not these economic war on women that the president has been putting forth for the last five years. It's embarrassing. It's a shame.

BLITZER: Go ahead, senator.

SANDERS: You know, many of Miss Bachmann's ideas have already taken place. That was George Bush's tenure which was the worst economic performance in the private sector in the modern history.

(CROSSTALK)

SANDERS: Excuse me. Excuse me.

BLITZER: One at a time.

SANDERS: We lowered taxes for the rich. And you know what, under Bush, we lost a whole lot of jobs. Now, the truth of the matter is --

BACHMANN: We need to is lower taxes on the ability to be able to create jobs.

(CROSSTALK)

SANDERS: -- in American today pays nothing in taxes. We're losing about $100 billion --

(CROSSTALK)

BLITZER: Hold on one second. I just want to clarify. Do you believe that the minimum wage should be increased?

BACHMANN: What I think is that we need to create jobs and I think we need to look at the example of Australia. You want to talk about raising the minimum wage --

BLITZER: That's going to be a major issue in the president's speech tomorrow night. He's going to call on Congress to raise minimum wage.

(CROSSTALK) BACHMANN: So, do you think it should be raised to $20 an hour?

BLITZER: I'm just asking if you --

(CROSSTALK)

BACHMANN: No, I don't.

(CROSSTALK)

BACHMANN: And -- but what I do believe...

BLITZER: All right. BACHMANN: But do you believe that taxes should be cut for the average job creator and the average American?

BLITZER: Well, go ahead...

BACHMANN: I think they should.

BLITZER: -- and answer the question.

SANDERS: I think we need a good tax...

BACHMANN: And I also think the federal government should restrain its spending.

SANDERS: Excuse me -

BACHMANN: That's where you need austerity.

SANDERS: We have, once again, one out of four corporations not paying a nickel in federal taxes. They are keeping...

BACHMANN: So they should be paying.

SANDERS: They should be creating jobs. But what they are doing is they're sit -- putting the money in the Cayman Islands and they are shutting down factories in the United States and investing in China, in Mexico, in Vietnam.

So I think what we need...

BACHMANN: So where should the jobs come from, Bernie?

SANDERS: I think what we need is a demand...

BACHMANN: Should they be...

SANDERS: -- that their corporate -- excuse me.

May I have just one second?

BLITZER: Yes.

BACHMANN: Should... SANDERS: One second?

Just one tiny little second.

BLITZER: Go ahead.

SANDERS: I think what we need to do is tell corporate America, the time is now to invest not in China, not in Mexico, but in the United States of America. I (INAUDIBLE)...

BACHMANN: That's why you redesigned...

SANDERS: Excuse me.

BACHMANN: -- our tax policy...

SANDERS: I think we need to rebuild...

BACHMANN: -- and our tax reform...

BLITZER: -- our crumbling...

BACHMANN: -- so that jobs could be started in...

SANDERS: You know, this is...

BACHMANN: We have the highest...

BLITZER: All right...

BACHMANN: -- corporate tax rate...

BLITZER: (INAUDIBLE).

BACHMANN: -- in the world.

SANDERS: No, we do not.

BACHMANN: End of story.

SANDERS: Not in terms of an effective...

BACHMANN: The highest corporate tax rate in the world.

SANDERS: Nominal but effective.

BACHMANN: You want to know why people are leaving the United States, investing elsewhere?

Because President Obama has the highest corporate tax rate in the world.

SANDERS: Well, that happens to be (INAUDIBLE)...

BACHMANN: And that's hurting Ann...

SANDERS: In terms of an effective tax rate...

BACHMANN: -- that's hurting Ann...

SANDERS: -- that is not true.

BACHMANN: -- and that's causing her to not...

BLITZER: This was an excellent...

BACHMANN: -- be able to to get a job.

BLITZER: -- an excellent discussion.

You know what I'd like to do?

I'd like to continue the conversation...

BACHMANN: Absolutely.

BLITZER: -- in the days and weeks to come...

BACHMANN: Yes.

BLITZER: -- because you bring -- you both bring good arguments to the table.

Senator, thanks very much for coming in.

SANDERS: My pleasure.

BLITZER: Congresswoman, thanks to you, as well.

BACHMANN: Thank you.

BLITZER: At least we know you don't want to raise the (INAUDIBLE) -- cost of living increases on Social Security...

BACHMANN: And Bernie doesn't want to cut the taxes on corporations so that we can have new jobs created.

(CROSSTALK)

BLITZER: He wants to increase the taxes on those big corporations...

BACHMANN: He wants to increase taxes. Right.

BLITZER: -- so that they can pay for education and other infrastructure development and other...

BACHMAN: Well, we're going to have fewer jobs.

BLITZER: So there's a good debate...

BACHMANN: That's Australia's experience.

BLITZER: -- and you both reflect those good positions. And we'll continue the conversation.

BACHMANN: Thank you.

BLITZER: Thanks to both of you for coming in.

SANDERS: Thank you.

BACHMANN: Thank you.

BLITZER: Coming up, why everyday Iranians say sanctions relief is a matter of life and death.

Jim Sciutto is inside Iran with a CNN exclusive. There he is. He'll join us live in a moment.

(COMMERCIAL BREAK)

BLITZER: One of the accomplishments President Obama will cite in the State of the Union Address is the nuclear agreement with Iran. Many in Congress, though, are skeptical because the deal eases tough sanctions against Iran. And some Iranians say that's a matter of life and death.

In a CNN exclusive, our chief national security correspondent, Jim Sciutto, is inside Tehran right now.

He's joining us with more.

What are you seeing, what are you hearing -- Jim?

JIM SCIUTTO, CNN CORRESPONDENT: Well, Wolf, I'll tell you, when the president speaks tomorrow, his words resonate here. Iranians are listening.

And speaking to Iranians, more than discussion of the country's right to enrich or the country's sovereignty, what they talk about is relief from economic sanctions.

You know, the economy is shrinking here. Prices are jumping. Unemployment is up. The currency is down.

And it's relief from that economic pain -- the effect of the sanctions -- that Iranians really are hoping for, as there's this new push for diplomacy.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): One day before President Obama's State of the Union Address, international diplomacy comes to Iran. Former U.N. Secretary-General Kofi Annan is leading a delegation of world leaders here in Tehran to discuss peace efforts, including the new nuclear agreement with the U.S. and the West.

KOFI ANNAN, FORMER U.N. SECRETARY-GENERAL: This is not an easy task. It will need patience and perseverance. SCIUTTO: But even as President Obama touts the new diplomacy with Iran Tuesday night, the old fiery rhetoric continues. Secretary of State John Kerry's recent comments saying a military strike against Iran is still on the table...

JOHN KERRY, SECRETARY OF STATE: The military option that is available to the United States is ready.

SCIUTTO: -- sparked this combative response from the head of Iran's Revolutionary Guards, who said, quote, "Islamic leaders have prepared us for many years for a massive and destiny making battle."

Iranians we have met, however, are focused on what an agreement with the West means for them, a point we saw with painful clarity as patients crowded a cancer clinic in Tehran.

Economic sanctions have blocked access to the best chemotherapy drugs, since most are made in Europe and the US.

(on camera): Have you lost any patients, do you think, because of this?

UNIDENTIFIED MALE: Yes. Yes.

SCIUTTO: Patients who died early?

UNIDENTIFIED MALE: Who died, yes. Yes.

SCIUTTO: Yes, that's -- I can tell that's upsetting for you.

UNIDENTIFIED MALE: Yes, so much.

SCIUTTO (voice-over): Shala (ph) was diagnosed with ovarian cancer more than a year ago.

SHALA: This (INAUDIBLE) comes from America.

SCIUTTO: She now buys expired drugs on the black market.

SHALA: I think those who did sanctions on this country, they was kind of, I don't know, participants for killing the people.

SCIUTTO: Under the interim nuclear deal, these patients' crucial medicine will now be allowed back in. For them, the new Iran diplomacy can't move forward quickly enough.

(END VIDEO TAPE)

SCIUTTO: The original sanctions regime was intended to have exemptions for humanitarian supplies such as medicine. The difficulty was sending those payments abroad, restrictions. So this new interim nuclear agreement is meant to solve those problems. And that's one change that Iranians here are hoping to see take effect very quickly. And they hope it continues as the longer term negotiations go forward -- Wolf. BLITZER: Lots going on right now. And we'll be anxious to get reaction from the Iranians to the president's State of the Union Address tomorrow night.

And Jim will be joining us for our live coverage.

Jim Sciutto in Tehran, thanks very much.

Jim, by the way, also has been sharing images from his exclusive reporting in Tehran on Instagram. You can follow him on Instagram and Twitter, User name, Jimsciutto.

Up next, President Obama will make it clear in his State of the Union speech that he's ready to go it alone, if necessary.

But Is there room for compromise, on immigration, for example?

I'll speak with one House Republican who says not so fast. Representative Steve King has been very controversial on immigration reform, even disagreeing with a whole bunch of Republicans.

He's standing by.

(COMMERCIAL BREAK)

BLITZER: While the president is prepared to bypass Congress when he can, he'll need to work with Congress on the issue of immigration reform. And that's one area where there may actually be some room for compromise.

The House speaker, John Boehner, has been working to push the GOP on a set of principles for immigration reform. And he's determined to do it this year.

Our chief correspondent, Dana Bash, is up on Capitol Hill -- Dana, what do we know about the immigration principles the speaker is working on?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, we know that he's got at least most of them down and that he's going to discuss them later this week when house Republicans go on a retreat in Maryland. We also know because Republicans have said it so many times that this would be done in a piecemeal approach, not a comprehensive bill like the Senate passed last year.

What are we talking about? The key point is, of course, what to do with the 11 million or so illegal immigrants. What John Boehner is going to discuss is giving many of them the ability to get legal status. Not citizenship but legal status if the U.S. but only after the border is secure. And there will be various metrics to determine that, that will go into the principles. That's the key. The other issues are things like new visas for foreign workers and also stepped- up enforcement in the interior of the country, Wolf.

BLITZER: So, basically, legal status he's willing to give these illegal immigrants but not necessarily a pathway to citizenship. Is that right?

BASH: Right. And that's for several reasons. First, just on policy. You have too many Republicans in the house who believe that a path to citizenship, getting citizenship is just not fair to have all of these illegal immigrants get that benefit. But legal status is something different. But then there's the raw politics of this and that is that if you look at the trends of how Hispanics have been voting in 2012, Barack Obama got 70 plus percent, there's a political concern among Republicans that if you give 11 million people the ability to vote with citizenship, that the trends are that they would be voting Democratic, not Republican, Wolf.

BLITZER: All right, Dana is up on the hill, thanks very much.

Let's get some reaction to what is going on. Joining us now, (INAUDIBLE) controversial critic of immigration reform, Republican Congressman Steve king of Iowa.

Congressman, thanks very much for coming in.

REP. STEVE KING (R), IOWA: Glad to be here.

BLITZER: I'll play a clip, John Boehner making a case for immigration reform on a piecemeal basis. Listen to what he says.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The American people don't want the government shut down and they don't want Obamacare.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Obviously that's not the right clip. Basically, the right sound bite is immigration reform dead? Absolutely not, he said. I made clear going in the day after the last election 2012 that it was time for Congress to deal with this issue. I believe that Congress needs to deal with this issue. Are you with the speaker?

KING: We disagree on that strategy.

BLITZER: Do you believe that legal status for these illegal status and not -- forget about pathway to citizenship for now but making them legal in the United States?

KING: I don't believe in bleeding with that part. It really comes down to this. And we have a president who has refused to enforce immigration law, made up some of his own along the way, we have a border is clearly not secure which is step number one.

BLITZER: He deported a record number of people, as you know. And he's tightened the border along the U.S.-Mexico border.

KING: But to some of the numbers, I asked people to look at, Wolf, because the administration can give you what they want you to know. But if you look at the numbers of deaths in the desert on those attempting to get into the United States, those numbers are up, not down. And that's a tragedy.

BLITZER: Does the speaker, assuming he's ready to go along with this deal and let's say that the president is ready to accept the compromise he is putting forth, does he have his Republican caucus, you are not on board with him but you have gone some headcounts. How much support will he have?

KING: I don't know that I can give a number for that. But I'll say that there is a fairly large solid core that understands this, that in a promise of enforcement that we would open up a path to legalization. And by the way, we understand that a legalization is a path to citizenship. And Democrats wouldn't wait until the debate is over, that would be part of the debate. They would lament --

BLITZER: What about path to citizenship for the children of these illegal immigrants? They've done nothing wrong. They were here. Many of them were born here in the United States or whatever. Would you be open to letting the kids, the children of the illegal immigrants have this pathway to citizenship?

KING: Wolf, that's the most sympathetic cause in the whole lexicon of immigration discussion. And Republicans should not lead with that, but instead we should say to the president, secure the border, enforce the law, then we'll talk. Once you establish and restore the respect for the rule of law, then we can have that discussion.

BLITZER: But you're going to resist everything that Boehner is now putting forward?

KING: I will. Because there's no pathway that I can see that good immigration legislation can get to the president's desk without amnesty attached, without the aides bill in the Senate being attached in various nefarious forms. So from that standpoint, the leadership in the house tell me how they can get a bill to the president's desk that actually does good things to restore the rule of the law and we need it to design the economic, social, and cultural well-being of America.

BLITZER: Steve King making career there's going to be a split among Republicans on this issue as well.

KING: We shouldn't talk about it, Wolf. There's no reason to have the debate.

BLITZER: No. That debate is going to happen as the president will make a big issue out of it in which Boehner is ready to try to make a deal. We'll see if a piecemeal deal, we will see if they can, despite your opposition.

KING: I watched the president's state of the union address. He will bring up three things, unemployment benefits and increase in the minimum wage and immigration. All of them, Democrats are essentially unanimous on and all of them split the Republican Party right down the middle. That's their attempt. We'll see that coming and Republicans ought to see it coming. It is a pretty obvious play.

BLITZER: Steve King, thanks very much for coming in.

KING: Thank you.

BLITZER: Coming at the top of the hour. Hillary Clinton, it is a major and very candid public appearance. You do want to hear what she's now saying about the possibility of her running for presidency again. She also reveals what she hasn't done since 1996. That's coming up.

And new signs of a major state on the east coast could be one step closer to legalizing medical marijuana. We will tell you what we know straight ahead.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the other stories developing in the SITUATION ROOM.

A royal Caribbean cruise ship is being forced to return two days early to its home port New Jersey after a massive outbreak of gastrointestinal illness on board. A CDC spokeswoman reports more than 600 people, passengers and crew fell ill with stomach-related problems. The cause of the illness was not immediately clear although the cruise line says symptoms are consistent with the highly contagious noro virus.

Florida may be one step closer to legalizing medical marijuana. The state Supreme Court approved language for a ballot issue in November allowing voters to weigh in on the issue during the midterm elections. The use of marijuana for medical reasons is legal in 20 states including the District of Columbia right now according to the national conference of state legislators.

The actor and director behind hits like Pulp Fiction and Django unchained seeking to take the Gossip Web site go through the court. Oscar-winning director Quentin Tarantino is suing the site after the script for his latest film, the Hateful eight (ph) leak online. In a federal court filing, he accusing them of blatant copy right infringement. The company has not responded to requests for a comment.

Coming up at the top of the hour, a very candid appearance from Hillary Clinton today. She's opening up about her plans for 2016, Benghazi and much more. All right, that coming up right at the top of the hour.

(COMMERCIAL BREAK)