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Rick Santorum Pushing Himself Big Time in Iowa with TV Ad; Only 28 Days Away From Iowa Caucuses; Saudi Arabia Canceled All Flights to Iran, Kicked out Iranian Diplomats; Dow Closing Down Only 280 Points. Aired 3:30-4p ET

Aired January 04, 2016 - 15:30   ET

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

(COMMERCIAL BREAK)

[15:31:00] BROOKE BALDWIN, CNN HOST: Twenty-eight days, four weeks from right now we will get the poll that really blows every other poll you have heard of so far. I'm talking about the Iowa caucuses. They are your first official tally showing which presidential candidates are leading in the race for nominations.

Rick Santorum is pushing himself big time in the state with this new TV ad. But take note of who you see in the first ten seconds.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), PRESIDENTIAL CANDIDATE: I like green eggs and ham.

UNIDENTIFIED MALE: Ted Cruz is wonderful at reading children's fairytales on the Senate floor. Rick Santorum spent his time in the Senate a little differently. Eight years on the Senate armed services committee, helping to modernize today's army to better be prepared for today's threats. Santorum also wrote in passed tough laws putting harsh sanctions on Iran. And for more than a decade Rick Santorum has been a leader taking on radical Islam.

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: Not all Muslims are jihadists and no one could say, that but the reality a jihadists are Muslims.

UNIDENTIFIED MALE: You want someone to read one hell of a bedtime story, Ted Cruz is your guy. If you want to protect America and defeat ISIS, Rick Santorum is your president because serious times need serious people.

SANTORUM: I'm Rick Santorum and I approve this message.

(END VIDEO CLIP)

BALDWIN: All right. Here he is, Republican presidential candidate Rick Santorum.

Senator, great to see you. Welcome back.

SANTORUM: Happy to be here.

BALDWIN: All right, so everyone you could have chosen to hit in this ad you chose the Texas senator there. Tell me why.

SANTORUM: Well, I think the contrast is the greatest. I mean, there's someone who really has a couple of years of Senate experience before he announced he ran for president. And you know, I think the race right now is really coming down to who is going to keep us safe, who is the president that you can trust, number one, to take on the radicals that we are fighting up against.

But number two, just as importantly as Republicans, who can take on a former secretary of state, former first lady, someone who is really experienced in this area and has the bona fides to get up there and go toe to toe so we can win this election.

So, it is not just what you can do as president but how you get to be president and experience is an important thing.

BALDWIN: You point out the experience word multiple times and you pointed out in this ad and all your years in the Senate working for the people, but it seems in this particular race experience is backfiring.

SANTORUM: I know.

BALDWIN: You look at how well the Trumps and even Senator Cruz is doing.

SANTORUM: For now.

BALDWIN: But it's been going on that way for months and months.

SANTORUM: It has, and I keep coming back to four years ago, 75 percent of Iowans made up their mind the last month, 50 percent in the last week. And I think a lot of that when I look at it from four years ago, a lot of that was just people going through the process of really analyzing all the candidates and they get serious about it at the end.

I mean, now, you even heard some of the other candidates today talk about entertainer-in-chief and it is more of an entertainment phase of the campaign.

BALDWIN: Referencing Donald Trump.

SANTORUM: Well, not -- all the other candidates. I mean, who is sort of the interesting personality, who is the interesting character. I mean, we saw a lot of people already in this campaign rise and fall and sort of have their moment. But I think in the end, what Iowans have proven to do over the past is really get serious about who is the right person on the issue? Who has the experience? Who is someone we can trust? Who is someone who is authentic? And I think that's where - that's why we put the ad up because it's time to get serious about who you want your presidential candidate to be. It's time to look about who is the right person to be president, not just who potentially is entertaining.

BALDWIN: On that, you bring up the entertainer-in-chief, that was both Marco Rubio and Chris Christie who happen to use the same term or phrase referring to trump as entertainer-in-chief. Would you agree with them? And is that - could he be the next person you take on in an ad, would you go there?

SANTORUM: I would say that you look at who is being rewarded in the early phases of the campaign. It's the interesting personalities.

BALDWIN: You don't want to say his name, do you?

[15:35:01] SANTORUM: Well, I mean -- because it's not just Trump. I mean, I think others - I mean, Ben Carson was rewarded, Carly Fiorina. There are others who have had their moment and not proven to be able to hold onto that moment. I give Trump credit the fact he has been able to hold onto a lot of the votes. But again I don't think we are at the - we have gone through the phase of the campaign where people have gotten to the brass tacks. And that's why we decided to run this ad now, just to get people, OK, it is serious time. It is time to get serious who the candidate is going to be and who is really prepared to do this job.

BALDWIN: Bill Clinton today out solo on the trail in New Hampshire, obviously stumping for his wife. I'm sure you have seen all of this Donald Trump said about him, and bringing up past improprieties in saying absolutely, it is fair game on the trail from what happened, some moons ago. Do you think it is fair game to go there and bring up Monica Lewinsky and everything else?

SANTORUM: I think in his circumstance -- he thinks it is because he's being attacked as a sexist, and the like. And so he is saying well, you know, pot calling the kettle black.

BALDWIN: Is it pertinent in the 2016 race?

SANTORUM: Well, I don't think either attack is a relevant attack. That's why, you know, I ran on national security and talked about, you know, what the president of the United States' job really is to keep us safe. And that is the first and foremost thing that we need to be worried about. And we need someone who the enemy fears and our allies trust and the American people can rely upon. And all of these other peripheral things, that's what you get into when you are can't having serious discussions about serious issues.

BALDWIN: OK, speaking of serious issue, you have been watching what's happening in Oregon.

SANTORUM: Yes.

BALDWIN: The armed militia, these protesters hunkering down in this federal building in an issue that goes back for years over federal land. What do you think of the militia members?

SANTORUM: I certainly don't like the tactics they are using. But then I didn't like the tactics that occupy Wall Street was using, and they were taking over land, city land and some government land and occupying that for quite some period of time.

BALDWIN: These guys are armed.

SANTORUM: Well, armed or not armed, I don't -- no one is firing any shots, no one is threatening to shoot anybody. This is a situation that has to be handled just like unfortunately they had to handle the occupy Wall Street is, which is you sit down, negotiate, you don't want to spark a confrontation. We have no idea what the occupy people had and what they were willing to do to hurt and confront police. It could have been a volatile situation and it was avoided by patience.

BALDWIN: If you were president how would you handle it?

SANTORUM: I think patience is the appropriate way. These are folks who have legitimate grievances with the government. Just like you can make the argument that the occupy Wall Street had grievances about income inequality. And we have room for protesters, we have room for people exercising their rights. At the same time there are consequences that have to be paid for people who do break the law and that's where the negotiation process is. But going through a situation where someone is going to get hurt because of their protesting their government and the government's activity, that's not a good solution.

BALDWIN: OK. Senator, thank you.

SANTORUM: All right, Brooke. You bet.

BALDWIN: Thank you. Thank you. I appreciate it.

A quick reminder, President Obama will be joining Anderson Cooper this Thursday for a live town hall on violence in America, that is Thursday night, 8:00 eastern here on CNN.

Coming up next, could he be the new face of ISIS? This possible successor to the terrorists known as jihadi John in what counter- terror analysts are saying about this militant and his message specifically to the west.

And we are watching the breaking news and the Dow really truly plunging down 389 points, bell ringing in just about 20 minutes from now. Stay with us. We'll find out what has investors so jittery on this first Monday of the New Year.

(COMMERCIAL BREAK)

[15:42:19] BALDWIN: All right. It is the first Monday of the New Year. We are precisely 28 days away from those Iowa caucuses. And so you have to know that every single word, every single phrase, even every single frame of video coming from these candidates will be put under a microscope, including this latest campaign video from the Donald Trump campaign. We are going to play it for you. And I want to you pay particular attention to the video, the frames of video as he is talking about immigration. Roll it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The politicians can pretend it is something else, but Donald Trump calls it radical Islamic terrorism. That's why he is calling for a temporary shutdown of Muslims entering the United States until we can figure out what's going on. He will quickly cut the head off ISIS, and take their oil, and he will stop illegal immigration by building a wall on our southern border that Mexico will pay for.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: We will make America great again.

(END VIDEO CLIP)

BALDWIN: All right, Dana Bash, let me bring you in, and you get to tell me exactly what's up with that video on immigration.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, Politifact which of course is the organization that tries to keep candidates honest, that's what they do full time, they just published something that the portion that you just talked about of the ad that is supposed to show immigration, it says you see there, just says stop illegal immigration, where the narrator talks about building a wall at the southern border, turns out that particular picture is from Morocco. It is from the beginning of, excuse me, May of 2014, when about 800 people or so tried to get from Morocco in Africa into Spain, and so it is not Mexico. It is morocco, about 5,000 miles away. Now, the Trump campaign has responded saying that it was intentional, that they did it on purpose.

BALDWIN: Why?

BASH: In order to show, they say in order to show what would happen to America if there is an open border without a wall, that they did it on purpose. And of course, in the very next sentence going after the biased mainstream media for not understanding that. But Politifact actually goes through the winding road of this footage, which started out on Italian TV and then it went, resurfaced on a Republica TV video and then it ended up in Donald Trump's ad.

Now, whether they took it from the original source or whether they got it off the Internet, we don't know. But they are saying that they intentionally did this in order to show what it would look like. However, that certainly wasn't mentioned in the ad which is why Politifact brought it up. It is supposed to be at least the viewer looking at it would think that's the border between the U.S. and Mexico.

[15:45:06] BALDWIN: OK. OK, Dana Bash, thank you.

BASH: Thanks, Brooke.

BALDWIN: Coming up next, Iraqi relationship, now hitting a boiling point. Saudi Arabia cutting all ties with Iran after a weekend of heated protests. Other countries taking sides in the high stakes rift. What it means for the U.S. fight against ISIS, oil prices, and a region already on edge. Fareed Zakaria joins me next.

(COMMERCIAL BREAK) [15:48:43] BALDWIN: We are watching an extraordinarily volatile situation in the Middle East right now. You have Saudi Arabia canceling all flights to Iran, kicking out Iranian diplomats, hostility truly reaching a head after Sunni dominated Saudi Arabia executed 47 people in this one single day including a prominent Shiite cleric, a move that infuriated Shia dominated Iran sparking this fiery protest erupting at the Saudi embassy in Tehran.

In the fallout, Bahrain and Sudan have joined Saudi Arabia in severing diplomatic ties with Iran while the United Arab Emirates has also cut some ties as well.

Fareed Zakaria, host of CNN's "FAREED ZAKARIA GPS" is joining me just to help give the perspective, you know, the ground view of the 20,000 foot view and I think it's important as we were just discussing in commercial break to talk about its surface maneuvering, right, as you phrased it, to a real back ground religious war between the Sunni and the Shia. Explain that.

FAREED ZAKARIA, CNN HOST, FAREED ZAKARIA GPS: Right. So if you look at whenever we got involved we invaded Iraq and it seemed like things didn't work out very well. Syria is crumbling. What's happening in Yemen? All these things are really surface maneuvers. The big story in the Middle East is the Shia versus the Sunni.

This is their version of the reformation, the (INAUDIBLE), Protestants, Catholics, call it what you will. But that's really what's happening. So in Iraq it is a Shia dominated government friendly to Iran, and there are Sunni insurgencies against it.

In Syria, you have a so quasi-Shia government supported by Iran and you have had the Sunni militants and insurgencies against it. In Yemen, similarly. Saudi Arabia if you will is spearheading the Sunni side. The Iranians are spearheading the Shia side. They are fighting in all these various places. The wonder is, frankly, it took so long for something direct to happen because they have been indirectly fighting proxy wars now for ten years.

[15:50:40] BALDWIN: So while all of this is going on, and this is a key region I'm also thinking of course with regard to Syria and when you look at Saudi Arabia and Iran and their different interests and backing different groups in Syria, U.S.-led coalition against ISIS, how does what's happening here between Iran and Saudi Arabia factor into what's happening in Syria?

ZAKARIA: So more mess, more chaos, less chance of a solution. Because, you know, Syria is sort of dozens and dozens of different groups all fighting against each other, but the one hope had been that you would be able to get some kind of agreement between if you will a side that is supporting the Assad regime and the side that is supporting many of the Sunni insurgents and with many of these militant groups, well that's Saudi Arabia and Iran. They are now not talking to each other.

Just a week ago for the first time they had begun to talk to each other. So it suggests to me that Syria is going to become more chaotic and less likely for us to find a political solution. You know, John Kerry is out there trying to do something on this front. But if you don't have the Iranians and the Saudis at the table together, very difficult to see how you get any kind of solution.

You know, this really all does suggest it is a big, messy civil war taking place in the Middle East. And for all those who think that the United States with a few bombs here or with some special forces there with a no-fly zone is going to be able to change the trajectory of events, just watch this. What you're watching is something like Europe's religious wars play itself out.

BALDWIN: So, you know, geographic perspective they don't border each other, the idea of any sort of, you know, escalation to military conflict you say not possible.

ZAKARIA: Between Saudi Arabia and Iran directly probably unlikely. But remember, they are sort of fighting in Yemen. They are -- there are Saudi-backed militias in Syria that are fighting Iranians. You know, so there are places where there are conflicts, most particularly in Yemen. I don't think there will be a direct confrontation. But, you know, it could get messier and messier in a place like Bahrain. You notice that Bahrain, which is a small gulf state that is very pro- Saudi because it depends on Saudi Arabia for assistance, now Bahrain is majority Shiite. It has a Sunni monarchy that has sided with Saudi Arabia, but it is majority Shiite.

Saudi Arabia itself has 15 percent Shiite within Saudi Arabia there in the eastern province which is where all the oil is in Saudi Arabia. So this could get a lot messier even if you don't have a direct conflict.

BALDWIN: So what does -- I mean, Saudi Arabia's been a long-time ally of the United States. At the same time though you think of the nuclear deal that the U.S. just did with Iran, and again what Iran is doing with regard to Syria. So does the U.S. sit back for a minute? Or does the U.S. jump in?

ZAKARIA: I think that Saudi Arabia has been a steadfast U.S. ally for a long time. In these situations the Saudis are much more likely to support American interests. And so, I think in general the U.S. should be supportive of Saudi Arabia. The problem is this, at the end of the day it is America's support for Saudi Arabia for regimes like general el-Sisi in Egypt for these Arab dictatorships and monarchies that has fueled Islamic fundamentalism and terrorism. Because what these guys say is look at the United States. It's supporting all these regimes that oppress us.

So it's a double edge sword where, you know, we do need to support Saudi Arabia. On the other hand, you know, it has created this long- term problem of placing the United States as target number one, enemy number one for all these Islamic fundamentalists. And remember, Saudi Arabia is no paragon of liberty. Saudi Arabia has some of the most repressive regressive anti-modern laws in the world. It is in many ways of medieval monarchy that functions in the 21st century.

BALDWIN: It is complicated, but it is so important to talk about. Fareed Zakaria, thank you so much. Watch Fareed's "FAREED ZAKARIA

GPS" Sundays at 10:00 in the morning and 1:00 eastern right here on CNN.

We will continue, of course, to monitor the breaking news on Wall Street, an extraordinarily volatile day for the markets down 300 points just shy of that closing bell. We'll take it live coming up next.

(COMMERCIAL BREAK)

[15:58:17] JAKE TAPPER, CNN HOST, THE LEAD: Thanks, Brooke.

Twenty eight days until the first votes are cast, 28, tick tock, people.

"The LEAD" starts right now.

In case you missed any of the -- let's call them outrageous proposals Donald Trump made on the campaign trail in 2015, well, he has compiled a greatest hits album for you in the form of his first able -- first- ever campaign TV commercial.

A showdown between the two Muslim superpowers in the Middle East, Iran and Saudi Arabia. A showdown that could result in an all-out holy war at its very worst. Other nations now taking sides. Where will the U.S. fall? And how much will this complicate the war on is?

Plus, Wild, Wild West. An anti-government gang fully armed seizes control of a federal building and threaten they are ready to use their guns. They call themselves patriots. Their online critics have dubbed them, you all al-Qaeda (ph).

Hello, everyone. Welcome to "the LEAD." Happy New Year. I'm Jake Tapper.

All of that ahead but we are going to begin 2016 with some breaking news in the money lead. Shock waves from China sending global stocks on freefall to begin the year. Dropping more than 460 points earlier today.

Let's go right to CNN's Alison Kosik. She is at the New York stock exchange.

Alison, what happened today?

ALISON KOSIK, CNN MONEY BUSINESS CORRESPONDENT: Jake, you know as bad as the selloff looks as we watch the closing bell ring right now, you can certainly call the Dow the comeback kid because the Dow closing down only 280 points as opposed to 468 that we saw earlier today. Most of this being caused by what happened in China overnight. A blood bath in the markets there.