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THE SITUATION ROOM

Gunmen Seize Federal Building, Refuse to Leave; Masked ISIS Killer Dubbed 'New Jihadi John'; Trump's First Ad: His Most Controversial Promises; Rubio Hitting Rivals Over National Security; Christie Pushing 'Leadership' Over 'Showmanship'; Ignoring Trump, Bill Clinton Campaigns for Hillary; Obama to Announce New Executive Action on Guns. Aired 5-6p ET

Aired January 4, 2016 - 17:00   ET

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


(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: Happening now, militia takeover. Armed protesters seize a federal building in a remote wildlife refuge in Oregon and vow to hold out until their grievances over land use are settled. Can bloodshed be avoided?

[17:00:29] Jihadi junior. A new ISIS video shows the murder of hostages as a masked killer with a British accent and an English- speaking child both deliver chilling threats aimed at the west.

Trump stumps. We're standing by for a rally by the GOP frontrunner and his first Iowa campaign ad as Donald Trump steps up attacks on Bill and Hillary Clinton.

And the Comeback Kid. Bill Clinton back on the campaign trail with first big campaign event. Will he be an asset or will he be an anchor that will weigh down his wife's White House hopes?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The armed protesters who've seized a federal building in Oregon now have given themselves a name: Citizens for Constitutional Freedom. They say they're prepared to hold out at the remote wildlife refuge and defend themselves until a dispute over land rights is settled.

But the local ranchers at the core of that dispute, they are set to begin prison sentences for arson. And they say they don't want any help from these out-of-state gunmen. Law enforcement authorities, for now they're keeping their distance.

And there's a chilling new propaganda video from ISIS. It shows the murder of five hostages and features a mass killer with a British accent. Dubbed the new Jihadi John, he directs insults and threats to the British prime minister, David Cameron, while an English-speaking child vows death to nonbelievers in the West. I'll speak live with Republican congressman Darrell Issa. He's a member of the Judiciary and Foreign Affairs Committee.

And our correspondents, analysts and guests, they'll have full coverage of all the day's top stories. Let's begin with the armed occupation of federal property on a remote

wildlife refuge in Oregon.

CNN's Paul Vercammen is there for us.

Paul, what do these people want?

PAUL VERCAMMEN, CNN CORRESPONDENT: Wolf, here in remote part of Oregon, we now have a situation where there are no law enforcement officers here of any stripe. Not a sheriff's deputy or a state employee or a federal government official. And they are now inside this compound -- that is these demonstrators -- basically spending the night in what was an unoccupied cluster of buildings.

Let's take a listen to what they're up to.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Let's take a look at all the wasted taxpayer dollars.

VERCAMMEN (voice-over): The media allowed to go where law enforcement has not: inside the Malheur Refuge cluster of one-story buildings occupied by an armed group that now has a name, Citizens for Constitutional Reform.

UNIDENTIFIED MALE: How long do you plan to be here? And have you in a sense already made a statement?

AMMON BUNDY, PROTESTOR: We definitely have made a statement, but statements are not good enough. We intend on going to work and assisting the people of Harney County.

VERCAMMEN: Ammon Bundy, once involved with his father, Cliven, and their own standoff with federal officers in Nevada, says he came here in support of Oregon ranchers Dwight and Steven Hammond. The father and son were sentenced to five years in prison for arson after a supposed controlled burn on their property spread to U.S. government land.

But Bundy calls the Hammonds' case the result of a failed land grab by the government.

BUNDY: Because of that refusal to sell their ranch, these federal agencies began an attack on this family.

VERCAMMEN: On a tour, we saw no weapons, just a dozen or so people who took over unoccupied buildings. The group charges the federal government as aggressively swallowed a branch land, harassed farmers, hurt the economy in places just like this, wide-open Harney County.

LAVOY FINCUTTI, PROTESTOR: We've come here to work. We have not come here to sit as children and stamp our feet and demand certain things are met. We're going to go to work. We're going to try to help restore these ranchers that have lost their ranches. VERCAMMEN: While many in town echo the support for the Hammonds and

other ranchers, some are upset the occupation led to schools being shut down for the week. And one man called this takeover just plain weird.

(END VIDEOTAPE)

VERCAMMEN: Now, so far, it has all been peaceful, and the organizers point out that they did so, they picked this place because it is so rural. Harney County, the largest in Oregon, it is larger than six states. And the population, Wolf, is only 7,000.

BLITZER: Paul Vercammen on the scene for us. Thank you.

The FBI is investigating the seizure of that federal building and says it's looking for a peaceful resolution of the Oregon situation.

[17:05:05] Let's bring in our justice reporter, Evan Perez.

What's the latest you're hearing? What is law enforcement about to do based on all the information you're getting, Evan?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, Wolf, one of the things that they're trying to do is to ensure that there is not a confrontation, because it looks, from the looks of this, this group that has taken control of that federal wildlife refuge, what they want is a confrontation. And so what -- the FBI does have a jurisdiction here. This is a federal building -- these are federal buildings that have been taken over by groups that say that they're armed and that they want to have the federal government come in and try to force them out.

So the FBI's standing back. What you're not going to see, for now at least, is anything like what happened in -- with the Bundy family when they had the FBI, the ATF, the Marshal Service, all surrounded their property doing a standoff. And in the end, the federal government backed down. What the FBI doesn't want is to create the same picture again.

Right now we're dealing with an unoccupied building. Very few people there, nobody in danger. No federal employees were harmed in taking over this building. So they're going to see if they can just wait these people out.

BLITZER: These people supposedly do have weapons, right? So what's the worst-case scenario that FBI officials fear?

PEREZ: Well, they fear an armed standoff or some kind of confrontation in which people get hurt, Wolf. And we know that people here in Washington at FBI headquarters are monitoring the situation. They know that the last such standoff really just emboldened these groups. And so what they don't want is the same images of federal law enforcement standing down again.

They'll see these people maybe just get tired of waiting there and go away. And eventually, they do believe that that will happen. BLITZER: But they're breaking federal law. I assume they're going to

be charged with a crime once this thing is resolved.

PEREZ: They are breaking federal law. And we'll see whether or not they can bring any charges. If you remember in the Bundy standoff, really you only had a couple people who got charged with having weapons, people who were prohibited from having weapons and who showed up at that property. So we'll see.

That's what's encouraged these groups. You've got dozens of these groups that have spun up during the Obama presidency, Wolf, and they really want a confrontation with the federal government.

BLITZER: Evan Perez reporting for us, thanks very much.

Joining us now is Republican Congressman Darrell Issa of California. He's a member of both the Judiciary and Foreign Affairs Committee.

Congressman, thanks very much for joining us.

REP. DARRELL ISSA (R), CALIFORNIA: Thank you, Wolf.

BLITZER: Should these members of this armed militia, some are calling them, should they be arrested and charged?

ISSA: Look, these tactics can't be tolerated. So ultimately, they're trespassing. There's an appropriate charge for it. There is a question, though, and a question of is this administration using its ability to expand private land into public use? And is it wrong?

And that's an area in which Congress has a responsibility, and we need to live up to it.

BLITZER: But that should be done legally through the judicial process, the legislative process. It shouldn't be done by armed gunmen going into a federal building and taking control.

ISSA: Armed or disarmed, when you commit civil disobedience, you absolutely have to be willing to pay the price. If they want to be considered civil disobedience, even if they're not armed, they're going to have to recognize they broke laws; and they have to take the punishment.

Are they bringing awareness to the misconduct perhaps of the administration? Maybe. And if they are, then Congress needs to step up to the plate and do its job, something that I think we haven't done enough of.

BLITZER: It seems to be a consensus emerging, not just Democrats but Republicans that what these individuals are doing is wrong. Listen to Senator Ted Cruz. He's a Republican presidential candidate.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: Well, listen, our prayers right now are with everyone involved in what's happening with Oregon. And especially those in law enforcement that are risking their lives.

Every one of us has a constitutional right to protest, to speak our minds. But we don't have a constitutional right to use force and violence and to threaten force and violence on others.

(END VIDEO CLIP)

BLITZER: I assume you agree with Senator Cruz.

ISSA: Absolutely. Senator Cruz said it extremely well. There is a right to protest. And there's some protesting going on behind the scenes, but breaking the law is crossing a line.

And I think Senator Cruz is a good example of why, on the campaign trail, we're talking about a change the American people can believe in. Getting back to constitutional law, intent of laws. You know, as we speak today the president meets with Attorney General Lynch for the specific purpose of figuring out a way to do that which was not intended in the law when it comes to his view of the Second Amendment.

BLITZER: We'll see what the president announces tomorrow when he makes this big announcement on executive orders affecting gun policy here in the United States.

Put on your hat as a member of the Foreign Affairs Committee. Saudi Arabia and Iran now, they've got a huge escalating amount of tension going on. The ramifications for the U.S. are enormous right now, especially involving the war against ISIS. How do you see it?

ISSA: Well, first of all, I think that this is sort of a precursor to a war between Iran and Sunni states. I think they've lost faith in America to be a fair arbitrator. They've certainly lost faith...

BLITZER: Who's lost faith?

ISSA: Certainly Saudi Arabia, as it was said earlier, ever since the fall of Mubarak, has had a question of will the United States be there for them? They're making massive weapons purchases. They're fighting in Yemen. Yemen is simply a war between Iran and Iraq that's a proxy war right now, but it's a real war.

So are these two nations in the process of a war? They really are. The only question is, will it come directly to their soil or will it be primarily fought in Syria and in Yemen and other proxy states within the Arab world?

BLITZER: Because I know there's also concern the Saudis, as you well know, a Sunni state, the kingdom of Saudi Arabia, they didn't like this Iran nuclear deal, as you well know.

And there's been concern that, if the Saudis see what's going on in Iran, if they suspect Iran is going to be working towards some sort of nuclear weapon, the Saudis might try to do the same thing. That would really escalate nuclear proliferation in the region. How concerned are you about that ugly scenario? ISSA: Well, I think it's inevitability that if Iran gets a bomb,

Saudi Arabia will buy bombs. They have will have an ability to retaliate. If it's not our weapons protecting them, then it will be their own weapons purchased from Pakistan or some other friendly nation.

The fact is, though, that Iran is going to get a bomb. They opposed the program. The administration not only pushed it through over the objection of Republicans and Democrats, but as it turns out spied on members of Congress and Prime Minister Netanyahu in the process.

So there's a war here, too, between an administration that didn't listen to the American people on the Iran deal.

BLITZER: Last March I spoke to the then-Saudi ambassador to the United States, Adel al-Jubeir.

ISSA: Now the foreign minister.

BLITZER: He's the foreign minister right now. This was as the negotiations were continuing for that Iran nuclear deal.

Listen to this exchange I had with now-foreign minister Adel al- Jubeir.

(BEGIN VIDEO CLIP)

BLITZER: Under what circumstances would the kingdom, Saudi Arabia, build a nuclear bomb to try to counterbalance an Iranian nuclear bomb?

ADEL AL-JUBEIR, SAUDI ARABIAN FOREIGN MINISTER: Well, this is not something that we would discuss publicly, Wolf. This is not something that I can comment on, nor would I comment on, that the kingdom of Saudi Arabia would take whatever measures are necessary in order to protect its security. There are two things, Wolf, over which we do not negotiate: our faith and our security.

(END VIDEO CLIP)

BLITZER: Now, when you say the Saudis could buy a bomb, I assume you're saying buying a bomb, let's say, from Pakistan or some other nuclear power, is that what you're talking about?

ISSA: That's the -- most people's assumptions. They'd either buy all the technology with some precursors. In other words they would fast- track their ability to do it.

Iran has been going the other way. They've been slowly building up the capability to be a nuclear developer and producer in a similar way to North Korea. I doubt that Saudi Arabia would use the same technique.

Saudi Arabia, though, historically has relied on the United States to be its backup. And it's allowed it to buy weapons but not necessarily use it. Today they are using massive amounts of weapons in Yemen. They are in a real war. And they see that Mecca, Medina and their own capitals are actually threatened by this expansion from Iran.

BLITZER: I want to move on, but very quickly, Adel al-Jubeir, the foreign minister now, you know this is very personal for him, this whole relationship, because of what the U.S. government says an Iranian-backed assassination attempt against Adel al-Jubeir when he was the ambassador to the United States at a prominent restaurant in Georgetown here in Washington, Cafe Milano. So it gets personal for these individuals, as well, you agree?

ISSA: It gets personal. And it's an example of a long history. From '79, when they pretended the taking of our embassy was just students, to the latest one, the taking down of the Saudi embassy in the same way. Not respecting the most fundamental requirement between two nations, that you protect each other's sovereign soil you've allowed to be within your country.

Iran has not learned from the past, because Iran has not been forced to learn from the past. And that's why more than 30 years on, we're in a situation in which Iran is continuing to be emboldened in its activities and, to a great extent, it's spawned some of what ISIS views as its legitimacy.

If we want to confront ISIS, we have to do it by attacking them. But we also have to stop Iranian expansion or we're never going to defeat either one of them.

BLITZER: We're going to talk about ISIS right now. There's a new video coming from a man now dubbed the new Jihadi John.

Congressman, stay with us. We have much more to assess. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: We're talking with Congressman Darrell Issa. We're going to get back to him in a moment.

First, a chilling new ISIS video has just surfaced that shows the murder of hostages and features a masked English-speaking killer who's now been dubbed the new Jihadi John. Brian Todd has been looking into the story for us.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight this video has caught the attention of U.S. and British intelligence officials. A U.S. official tells us ISIS is continuing its use of murderers as spokesmen. And we're told British counterterror agencies are combing through the video for clues.

Now, in this video a masked militant speaking perfect English in a British accent threatens to invade Britain. He calls David Cameron an imbecile, and he has other taunts for the British prime minister.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: How strange it is that a leader of a small island threatens us with a handful of planes. One would have thought you'd have learned the lessons of your pathetic master in Washington.

(END VIDEO CLIP)

TODD: Now, seconds later this militant and others appear to shoot five hostages in the back of the head. The men had been accused of spying for the British.

Now, clearly this video resembles several others made by the masked ISIS militant known as Jihadi John. He was the British man identified by intelligence agencies as Mohamed Emwazi, who presided over the beheadings of American James Foley and other western hostages. Jihadi John was killed in a drone strike in November in the ISIS stronghold of Raqqah, Syria.

Analysts say with this new video, ISIS is clearly trying to recapture the gravitas of Jihadi John, but they say so far this militant just doesn't appear to have the same charisma that Jihadi John had. British officials are not commenting to us on who this man might be, but experts tell us he is likely on the kill lists of U.S. and British intelligence tonight, Wolf.

BLITZER: I'm sure he is. There's another person in that video whose appearance is very disturbing, as well. Tell us about that.

TODD: That's right, Wolf. Near the very end of the video a very young boy who looks to be only about 4 or 5 years old appears unmasked. He's wearing fatigues. The boy says, in a British accent, quote, "We will kill the Kufar over there." That refers to nonbelievers.

A British man identifying himself as Henry Dare spoke to Britain's Channel 4 and said that is his grandson. Dare says his daughter, the boy's mother, was a Nigerian Christian who converted to Islam, moved to Syria and married a jihadist who's now believed to have been killed. The grandfather says ISIS is using the boy as propaganda, as a shield, and adds, quote, "I can't disown him. He's my grandson."

BLITZER: And we've blurred the image, the picture of that little boy, as well. Brian, thanks very much.

We're back with Republican Congressman Darrell Issa of California.

Your analysis of this latest video, the so-called Junior Jihadi John.

ISSA: Well, it's bad news, because a spokesperson like this and these assassinations were part of the recruiting tools that were very successful for ISIS.

It's good news in a way, because I think there's a desperation. There have been real advances, taking of towns, taking of -- killing of key leaders.

So I think ISIS to a certain extent is trying to rebound. And in fact, this is part of their strategy. If it's allowed to work, if they get more westerners, if they really expand again and we don't take Mosul, it could be a very different analysis from where we are today, where they're losing ground in Syria for the first time and they're clearly losing ground in Iraq.

BLITZER: Mosul is the second largest city in Iraq. And now, for more than a year, almost two years, the ISIS forces there, they've been able to control. The Iraqi army simply ran away.

ISSA: Exactly. And getting the Sunnis rallied up along with the Kurds to do this, the American support that's going to be essential, the British support, it's going to be a big milestone.

BLITZER: But I suspect this rift that has developed, the confrontation between Saudi Arabia, the Sunni leader in the Arab world and Iran, a Shiite leader in the Muslim world, that's going to undermine the U.S. efforts to destroy ISIS.

ISSA: You know, it might. It might be a place in which two countries who hate either other, Iran now and Saudi Arabia, find that they have to work together in Iraq, in Mosul. That doesn't mean they're going to work together in Syria.

And that's one of the complex things about really defeating ISIS, is that the Russia and Iran will not help in Syria. Well, in fact, to protect their own Shia organization in Iraq they have to help. So this is a war that has friends in one neighborhood that are enemies in another. And it's what makes it so tough, Wolf.

BLITZER: Yes. I hope you're right about them cooperating in Iraq. I'm not very confident myself, but let's hope that they do. Thanks very much. The stakes are enormous, indeed.

Congressman Darrell Issa, appreciate it.

ISSA: Thanks, Wolf.

BLITZER: Coming up, targeting Trump. His Republican rivals sharpen their attacks. The GOP frontrunner fires his first shot in the political ad wars.

Plus, the return of the Comeback Kid. Bill Clinton makes his long- awaited debut on the campaign trail. Will it help or hurt his wife's chances to become the president of the United States?

(COMMERCIAL BREAK)

[17:26:00] BLITZER: Presidential candidates, they're going all out. Today Donald Trump is attacking the Clintons. On the same day Bill Clinton is out on the campaign trail for the first time in support of his wife during this cycle.

It's just 28 days to go until the Iowa caucuses, four weeks exactly from today. CNN is using its vast political resources to cover the 2016 election like no other network, traveling with the campaigns. We'll talk to our teams in the field in just a moment, but let's begin with our chief political correspondent Dana Bash.

Dana, tell us about Donald Trump's long-awaited first campaign commercial which was unveiled today.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, you know, Donald Trump went six months into his campaign and became the frontrunner without spending a dime on paid advertising. This week he purchased about $2 million worth of TV and radio time in the first contest states of Iowa and New Hampshire.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: He's calling for a temporary shutdown of Muslims entering the United States.

BASH (voice-over): Donald Trump's first paid television ad is vintage Trump, blunt and provocative.

UNIDENTIFIED MALE: He'll quickly cut the head off ISIS and take their oil. And he'll stop illegal immigration by building a wall on our southern border that Mexico will pay for.

BASH: And not without controversy. It turns out that footage of people flooding the border is not Mexico and the U.S. but Morocco and Spain. After the website Politifact uncovered the discrepancy, the Trump campaign insisted it was intentional to show the, quote, "severe impact of an open border."

And on the forum the reality star used to become the frontrunner, free media, Trump started 2016 as he ended 2015, going after both Clintons on CNN's "NEW DAY."

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: She used the word sexist, I'm sexist. And she was using very sort of derogatory terms. I said, "How the hell can she do that when she's got one of the great women abusers of all time sitting at her house?"

BASH: With the current president preparing executive measures aimed at curbing gun violence, Trump criticized him with the kind of simple yet pointed overstatement that has been working well for him in politics.

TRUMP: Pretty soon you won't be able to get guns. I mean, it's another step in the way of not getting guns.

BASH: Trump rallied a huge crowd this weekend in Mississippi.

TRUMP: Outside we have thousands of people trying to get in.

BASH: But it is Iowa, just four weeks away, where Trump's fiercest competitor in the caucuses is spending his week.

CRUZ: This is now the time that the men and women of Iowa step up.

BASH: Ted Cruz, on a 28-stop, six-day bus tour, is trying to turn his Iowa lead in the polls into an actual win next month, appealing to Evangelicals by quoting scripture.

CRUZ: Pray and lift up this country. We stand on the promise of second Chronicle 7:14, "If my people, which are called by my name, shall humble themselves and pray and turn from their wicked ways and see my face, then I will hear their prayers."

BASH: And throwing down his best Clint Eastwood imitation.

CRUZ: When you hang a man, make sure to hang him high.

BASH: The Iowa caucuses are February 1. New Hampshire's primary is the 9th. That's where Marco Rubio and Chris Christie started their days making plays to be the alternative to Trump and Cruz.

SEN. MARCO RUBIO (R-FL), PRESIDENTIAL CANDIDATE: The job is not described in the Constitution as entertainer in chief, or commentator in chief, or even, frankly, economist in chief. It is described as commander in chief. If you can't be bothered to offer specifics on how you will perform that job, then quite frankly, you don't deserve that job.

GOV. CHRIS CHRISTIE (R-NJ), PRESIDENTIAL CANDIDATE: But anger is not a strategy. And it won't make our government better. And it won't make our country better. Unless that anger is used to motivate us towards electing someone who actually can do the job.

(END VIDEOTAPE)

BASH: You could really hear the outlines there of closing arguments from candidates like Christie and Rubio, running to be the establishment favorite, especially in New Hampshire. The gist is, "OK, you've had fun with the entertainer, Mr. Trump, with Mr. Filibuster, Ted Cruz," but now they're saying, Wolf, it's time to get serious.

BLITZER: All right. Dana, I want you to stand by. We have more to assess.

But I also want to check in with our correspondents in the field, who are covering all of these candidates. Our senior political reporter, Manu Raju, is out on the trail with Marco Rubio right now.

[17:30:08] Manu, how much of his -- of his focus is on bolstering his own national security and foreign policy credentials?

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Wolf, that is really the centerpiece of Marco Rubio's campaign. He's trying to show himself as the person in line with the conservative base, that espouses a more hawkish view on foreign policy and national security.

He's trying to showcase his knowledge of the issues, too, starting on the Intelligence and Foreign Relations Committee to try to rebut some of the skepticism that a freshman senator can run the nation's sprawling national defense system.

And while he is attacking Donald Trump, he really has his sights more on Ted Cruz. Here's what he had to say earlier today.

(BEGIN VIDEO CLIP)

RUBIO: While some claim that they would destroy ISIS, that they would make the sands of the Middle East glow in the dark, my question is, with what? Because they certainly can't do it with the oldest and the smallest Air Force we have ever had. Or with the smallest Army we've had since World War II. Or with the smallest and oldest Navy that we've had in 100 years.

(END VIDEO CLIP)

RAJU: And that was a veiled shot at Ted Cruz, largely for supporting legislation earlier this year that would overhaul the nation's intelligence system called the USA Freedom Act. He has increasingly criticized Cruz for taking that position and views Ted Cruz as one of his biggest threats to the nomination.

Increasingly, you'll hear Marco Rubio going after Ted Cruz, and Ted Cruz's super PAC responding in kind today, Wolf, going after Rubio on national defense. Clearly, both camps see some gain -- need some gain to be had headed into next month's caucuses.

BLITZER: Good point, Manu, thanks very much.

Iowa certainly isn't the only state getting the candidates' attention right now. The New Hampshire primary's only five weeks from tomorrow.

Let's welcome CNN's newest correspondent here to THE SITUATION ROOM, Phil Mattingly. He's out on the campaign trail with the New Jersey governor, Chris Christie.

Phil, tell us a little bit more about the governor's pitch today that he's actually an outsider who can get things done.

PHIL MATTINGLY, CNN CORRESPONDENT: Well, it's a delicate dance, Wolf, right? Try to harness the anger that's really coursing through the Republican electorate, but redirect it towards somebody who actually knows how government works.

Now, his point is, "Hey, I'm the governor of New Jersey. I'm not from Washington. I'm not the person you hate. The anger, it's OK. But now it's time for a serious candidate." Take a listen to what he said this morning.

(BEGIN VIDEO CLIP)

CHRISTIE: Show time is over, everybody. We are not electing an entertainer in chief. Showmanship is fun, but it's not the kind of leadership that will truly change America.

(END VIDEO CLIP)

MATTINGLY: Now, Wolf, like so many in this race, New Hampshire obviously a crucial state for Chris Christie. Over the last three or four weeks the polling has shown him move firmly into that top tier of candidates not named Donald Trump.

But I asked Chris Christie earlier in a press moment with reporters whether or not -- how he would kind of rank his candidacy. What would be success in New Hampshire? He said, "It's too early. Ask me in a couple weeks." But very clear his campaign has stated that they need to do well here, Wolf, or there's not likely going to be much campaign left afterwards.

BLITZER: All right. Phil Mattingly, once again welcome to CNN. You're going to be busy this year. Thanks very much.

Joining us now in THE SITUATION ROOM, our CNN political commentator, Ryan Lizza. He's the "New Yorker" magazine's Washington correspondent. Our chief political correspondent, Dana Bash, is still with us. And our senior legal analyst, Jeffrey Toobin, is with us, as well.

Jeffrey, Trump has now booked $2 billion in ad buys for this week. Does this show he's really serious about trying to win Iowa and New Hampshire?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I don't think there's any doubt at this point that Donald Trump is serious about being president of the United States. I thought what's interesting about the ad is it is almost word for word taken from his speeches.

He is saying if it ain't broke, don't fix it. He's gone to the clear lead in the polls with this message about immigration and about stopping Muslims from coming to this country. And he's just doubling down on what's been working for him so far.

BLITZER: Dana, what does this mean for his chances in Iowa and New Hampshire? He's always said if he wins Iowa, it's all but over. He's going to go on and win New Hampshire, South Carolina, Nevada, all those March 1 states in the South. He says the key right now is Iowa.

BASH: He's going to win so much we're going to get sick of winning, right? I mean, look, obviously the first thing is Iowa, as we've been reporting. Ted Cruz is ahead in many polls there. He is there for six days on a 28-stop bus tour.

So Donald Trump has to get past him and prove he has some kind of super-secret organization that is going to bring the new voters to the caucuses that, you know, he says he's going to bring.

But I think Jeff is absolutely right. What Donald Trump is trying to do is put a button on where he is right now, trying to cement where he is right now and do it with the very simple, very blunt, sometimes exaggerated language that he uses on the campaign trail, which has worked for him so far, just in free media.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: And isn't this a little -- I mean, obviously everything Trump does is -- but he lost his lead to Ted Cruz in Iowa. Isn't that why he's spending $2 million in ads there, right? He's doing the conventional thing that politicians do. You lose your lead. The free media's not working as much in Iowa. So he's now -- he's got to put some money in the game, put some money

on the air. I think it's one of the first times we've seen Trump do something that just any other politician would do responding to the dynamics of the race.

BLITZER: You heard -- go ahead.

TOOBIN: Well, I was just saying at least so far one of the lessons of this campaign has been the paid media television commercials has done almost nothing. I mean, just ask Jeb Bush, who has thrown millions and millions of dollars into telephone -- into television advertising that has gotten him, you know, to his position at 3 percent to 5 percent in the polls.

I mean, Trump is trying to do something that hasn't worked so far. We'll see whether it works for him.

BLITZER: Dana, why all that tens of millions of dollars Jeb Bush has spent in commercials, why hasn't that worked?

BASH: Because Donald Trump has sucked all the oxygen out of the room. I mean, it's as simple as that. Because Donald Trump is a master marketer. He early on labeled Jeb Bush low-energy. And he took all the attention away while being very clever on how he pushed Jeb Bush to the side.

And combine that with the fact that Jeb Bush isn't, you know, catching the world on fire -- setting the world on fire, I should say, when he's out and about on the campaign trail. How it's perceived on television, that's the reason why.

BLITZER: He also does something, Trump, that a lot of the other candidates don't do. He tries to go on television interviews almost every day, maybe two or three times a day. And the politicians call that free media.

LIZZA: He's flooded the zone, right? I mean, he's on all the time. And he's been on all the time since June 16 when he announced. And that's worth millions and millions of dollars in free advertising.

Look, this ad that he put out today, I mean, you have to wonder if he even needs to run it, because it's being played so much.

BLITZER: We checked. He is definitely spending $2 million. Because originally, Jeffrey, you know this well, sometimes they just put an ad out on YouTube. We play it on television, but it never really gets spent. They never buy commercial time, which in Iowa and New Hampshire right now is relatively expensive.

TOOBIN: It's the political equivalent of vapor wear. That, you know, you say you're going to do something, talk about doing something, you get attention for doing something, and then you don't do anything at all. It doesn't appear that's what's happening here at least.

BLITZER: All right.

LIZZA: With Trump it's always good to check.

BLITZER: Guys, stand by. Stand by. There's a lot more happening, including on the Democratic front, the former president of the United States, Bill Clinton, is out there right now. Stay with us.

(COMMERCIAL BREAK)

[17:41:04] BLITZER: This was supposed to be a huge day for Hillary Clinton's campaign. But thanks to Donald Trump former president Bill Clinton's return to the campaign trail today is filled with controversy. Before we go back to our correspondents and our analysts, let's go to New Hampshire where our senior political correspondent, Brianna Keilar, has been covering the former president of the United States.

I know he's speaking right now, Brianna. What's gone on so far?

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: You'll have to pardon me, Wolf, because it's a very quiet room where President Clinton is speaking, but earlier today he was asked about that controversy with Donald Trump by a reporter. And he basically dodged, he punted and said Republicans will have to decide if that is fair game. He is just here in New Hampshire to tell voters, to tell the country that his wife will make the best president.

But it was pretty interesting, because there was still some thinly veiled jabs at Donald Trump in his remarks.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Bill Clinton finally on the campaign trail making the case for his wife.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I do not believe in my lifetime anybody has run for this job at a moment of great importance who was better qualified by knowledge, experience and temperament to do what needs to be done now.

KEILAR: The former president in New Hampshire as Donald Trump puts his past sex scandals front and center.

TRUMP (via phone): She used the word "sexist," I'm sexist. And she was using very sort of derogatory terms. I said, "How the hell can she do that when she's got one of the great women abusers of all time sitting at her house?"

KEILAR: Clinton didn't directly respond but made veiled references to Trump.

B. CLINTON: Every presidential election people run, and believe it or not, it's kind of scary this year, but believe it or not, most everybody actually tries to do what they say they're going to do when they're running.

KEILAR: Bad blood between old friends. Trump explained his formerly friendly ties with the Clintons. TRUMP: As a businessman, I got along with everybody. I did well.

Nobody did it better than me. I got along with everybody. And it was my obligation to my company and my family and myself to get along with Clinton and to get along with every person that I needed to get along with.

KEILAR: As Trump tries to make the former president a liability, Hillary Clinton was even heckled by a Republican legislator about her husband's past while campaigning this weekend.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: You are very rude. And I'm not going to ever call on you. Thank you.

KEILAR: But the Clinton campaign considers him a huge asset with high approval ratings and a long history in the Granite State.

B. CLINTON: New Hampshire tonight has made Bill Clinton the Comeback Kid.

KEILAR: His second-place finish here in 1992 was key as news of an affair with Gennifer Flowers and draft dodging allegations threatened to torpedo his candidacy.

Though in 2008 he hurt his wife's campaign with stinging comments about then-Senator Barack Obama.

B. CLINTON: This whole thing is the biggest fairytale I've ever seen.

KEILAR: With Bernie Sanders making his strongest challenge to Hillary Clinton in New Hampshire, she's banking on the controlled messenger who delivered for President Obama in 2012.

B. CLINTON: Is the president satisfied? Of course not. But are we better off than we were when he took office?

(END VIDEOTAPE)

KEILAR: And as I use my golf commentator's voice in this rather quiet room where President Bill Clinton is speaking, Wolf, it's of note that most Republicans are not approaching Bill Clinton's past infidelities, as in all of them, all of the candidates are not approaching his past infidelities the way Donald Trump is.

That doesn't mean they aren't taking him on. For instance, Chris Christie today pretty much lumping Hillary Clinton in with Bill Clinton, saying, "We've seen this act before. We lived this act for eight years." So really trying to make him and make her seem like something from the past, Wolf.

BLITZER: Brianna, thank you very much. Brianna Keilar traveling with the former president.

Let's bring back our political correspondents and our analysts.

Jeffrey, talk a little bit about Bill Clinton on the campaign trail right now, stumping for Hillary Clinton. Is he a big risk for her, or a big reward?

TOOBIN: I don't see any risk at all. He's very popular. I think those of us...

[17:45:01] WOLF BLITZER CNN ANCHOR: Right now stumping for Hillary Clinton. Is he a big risk for her or a big reward?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I don't see any risk at all. He's very popular. I think those of us in the news media are very interested in his sex scandal, but I don't think voters care about it now that it's 20 years in the past.

I think, you know, that every time that stuff gets mentioned, it only helps Hillary Clinton. That's how she got elected in part to the United States Senate from New York. I just don't think voters care about it at this point, but we do.

BLITZER: Ryan, are you expecting more of these kinds of attacks on Bill Clinton from Donald Trump?

RYAN LIZZA, WASHINGTON CORRESPONDENT, THE NEW YORKER: Without a doubt, right? I mean, I was in Biloxi, Mississippi, at the Trump rally and he was just relishing discussing this. I mean, I do think -- I don't know if I agree with Jeff on this on whether how much it can affect voters. It's never been tried on Hillary Clinton to be honest, right? I mean, I think his indiscretions are sort of baked into the cake, I think. I think people who won't vote for Hillary Clinton because of Bill and some of his past, you know, they're already not going to vote for Hillary. But --

BLITZER: This wasn't an issue in 2008 when she was challenged by Barack Obama.

LIZZA: Wouldn't do it. Because I think Obama knew in a Democratic primary that's not going to get you any points. I don't know in a general election -- because his argument -- Trump's argument if we take him seriously and give him some credit is that she does not have an advantage on women's issues because of Bill's infidelities and how she responded.

I don't think that argument pressed with millions of dollars in advertisements every day has ever been tested against her. Lazio didn't do that when she ran for the Senate. So I don't know, I wouldn't predict one way or another if they were in a general election.

BLITZER: Dana, only a few moments ago at a town hall in -- where was it? Cedar Rapids in Iowa, just a little while ago, Hillary Clinton had this to say about Donald Trump. (BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I have adopted a New Year's resolution. I'm going to let him live in his alternative reality and I'm not going to respond.

(END VIDEO CLIP)

BLITZER: So that's a new strategy because she was responding earlier.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Right. And good luck with that, Hillary Clinton.

BLITZER: Yes, really.

BASH: But the specific question was actually, you know, a substantive issue, which was whether or not she and President Obama contributed or actually created ISIS, which actually is an argument that a lot of people are making not necessarily that they created it. That was kind of Donald Trump's argument all on his own, but obviously the Republican field at large they argue that the whole idea of bringing U.S. troops out of Iraq helped create a vacuum and then allowed ISIS to rise.

So just the way Donald Trump said it might make it easy for Hillary Clinton to say what she said and be a little bit kind of off the cuff like she did. But, you know, these are issues that no matter if it's Donald Trump or anyone else she's probably going -- she is going to have to talk about if she becomes a Democratic nominee.

BLITZER: And Jeffrey, you heard earlier when the former president Bill Clinton was directly asked by a reporter to react to Donald Trump's comments, he wasn't biting. He wasn't going to get into there at all as well. I assume you believe that's a smart strategy.

TOOBIN: Absolutely. I just think there is no percentage in Bill Clinton in particular revisiting these issues. And, you know, I just don't think voters are going to make up their mind about, you know, his personal indiscretions in the mid and late 1990s here in 2016. I just don't think it matters.

(CROSSTALK)

BLITZER: Hold on. Ryan, go ahead.

LIZZA: No, it just strikes me that Bill Clinton has now been talking about his indiscretions in the state of New Hampshire -- not his indiscretions in the state, but he's been in New Hampshire talking about these issues for 25 years, right? This started in 1991. And maybe people don't care about it, but the issue for Hillary has always been, do they want to move on, is there another chapter in American politics? Do -- you know, do they want to turn the page? I think that's what this feeds into.

BASH: The other thing is remember the minute Bill Clinton says any word at all about this in any way, shape or form, that's going to be the entire news cycle for days and days and days.

BLITZER: Right.

BASH: So he knows that.

TOOBIN: Good point.

BASH: He's seen this movie before.

BLITZER: He's got to be disciplined.

BASH: Yes.

BLITZER: When he goes through this roadblock.

BASH: Remember that finger wag?

BLITZER: Having covered Bill Clinton when he was president of the United States for several years --

BASH: No. He was the guy who they said -- who Bill Clinton said, I do not have, you know what with that woman, Miss Lewinsky.

BLITZER: I remember.

BASH: That was the Wolf.

BLITZER: I was the pool reporter.

BASH: I remember.

BLITZER: Roosevelt Room, when he uttered those words.

All right, guys, thanks very, very much.

Coming up, President Obama, ready to go around Congress and order new gun control measures. What restrictions is he planning? Will they make a difference?

And after Saudi Arabia executes a Shiite cleric, an Iranian mob torches the Saudi embassy in Tehran. Now the Saudis have cut relations with Iran. Could these two rivals be heading for war?

(COMMERCIAL BREAK)

[17:53:15] BLITZER: President Obama once again ready to go around Congress and use the power of his office to order new gun control measures. He'll announce the new restrictions tomorrow morning.

During a meeting today with the Attorney General Loretta Lynch, he said they are well within his legal authority.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What I asked my team to do is to see what more we can do to strengthen our enforcement and prevent guns from falling into the wrong hands, to make sure that criminals, people who are mentally unstable, those who could pose a danger to themselves or others are less likely to get a gun.

(END VIDEO CLIP)

BLITZER: Let's go live to our White House correspondent Michelle Kosinski.

So what do we know about the president's executive actions tomorrow, Michelle?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hey, Wolf. At this point the White House has not been willing to give away any detail at all, but we do know that this will involve at least some expansion of background checks and that is one area where there is actually broad support among Americans including Republicans, including gun owners.

The president has long wanted to tackle, let's call this gun show loophole where certain smaller time sellers, private sellers are able to do these transactions and there is no background check required. The president, of course, an advocate on this issue, would love to see every gun transaction in America require a background check. But without Congress, the president isn't going to be able to do anything that broad.

And if he listens to certain recommendations from groups, he might put a number on it, say, if you sell more than 50 or some number of guns per year, then there has to be a background check and overall that could involve a large number of people.

The president did say, though, that he's going to unveil this plan over the coming days, plural. It's going to be more than one initiative. So this could involve other areas, as well, as we expect.

[17:55:01] Possibly more funding for agencies to enforce existing laws. Possibly more tracking of lost and stolen guns and maybe some more areas, as well, Wolf.

BLITZER: Michelle, this is coming after Congress failed several attempts at passing stricter gun legislation, so what's been the Republican reaction so far?

KOSINSKI: Well, as you can imagine that reaction came fast and furious especially from 2016 candidates. Jeb Bush saying that this won't really affect security. Chris Christie calling it craziness saying that President Obama is acting like a king. Donald Trump this morning on CNN said soon you won't be able to get guns.

And the new speaker of the House, Paul Ryan, referred to the president's dismissiveness in his opinion toward the Second Amendment and said at the very least, the president is subverting Congress -- Wolf.

BLITZER: We're just reading the White House announcement, Michelle, on the event tomorrow, the president will make his statement in the East Room of the White House and will take steps to reduce gun violence and make our communities, he says, safer. We'll of course have live coverage of all of that.

Michelle Kosinski reporting for us. Thank you very much. Tomorrow morning 11:40 a.m. Eastern, special live coverage coming up here on CNN.

So what should the nation do about gun violence? President Obama joins Anderson Cooper for a live audience to -- and a live audience to talk about guns in America. That will be taking place Thursday night 8:00 p.m. Eastern only here on CNN.

Coming up, an Iranian mob torches the Saudi embassy after Saudi Arabia executes a Shiite cleric. Now the Saudis have cut ties with Iran. Is there a danger of war between these two Middle Eastern powers?

And a new ISIS video shows the murder of hostages as a mass killer with a British accent and an English-speaking child both threaten the West.

(COMMERCIAL BREAK)

BLITZER: Happening now, Mideast meltdown. Fallout from Saudi Arabia's execution of a Shiite cleric. Violent outrage spreading in Iran, prompting Saudi allies to cut ties with Tehran. Will the crisis between one of Washington -- and the most entrenched foes throw off the war against ISIS?

New ISIS hit-man making his debut in a chilling new video. A killer with a British accent hurls insults and threats at a Western leader. Is he now the new Jihadi John?