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Interview With Wisconsin Senator Ron Johnson; Trump Ads; ISIS Killer; New Gun Control. Aired 18-19:00p ET

Aired January 4, 2016 - 18:00   ET

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


[18:00:04]

WOLF BLITZER, CNN ANCHOR: 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?

Trump ad buy, Donald Trump releasing his first TV campaign ad just four weeks before the next phase of the race begins with the Iowa caucuses. How much of his personal fortune will the GOP front-runner spend on advertising?

And gun plan. President Obama huddles with the attorney general as he prepares to bypass Congress and enact new gun control measures by executive order -- his announcement coming tomorrow. Will his unilateral action stand up in court?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We're following the escalating sectarian tensions spreading across the Middle East tonight. Saudi Arabia and a growing number of its Shiite Muslim allies severing diplomatic ties with Shiite Muslim Iran. Violent protests erupted after the Saudi government executed a top Shiite cleric who was an outspoken critic of the Saudi royal family, the killing igniting a bitter new feud between two of the biggest powers in the Middle East.

We're also following political feuds unfolding on the campaign trail. Tonight, the Republican front-runner, Donald Trump, ramping up criticism of President Obama, and former President Bill Clinton, who made his solo debut campaigning for his wife today.

We're covering that and much more this hour with our guests, including the chairman of the Senate Homeland Security Committee, Ron Johnson of Wisconsin. And our political reporters, they are fanned out across the country with the candidates tonight with in-depth coverage of all the latest twists and turns in the race for the White House.

We have our correspondents and expert analysts standing by.

Let's begin with a sudden and growing crisis in the Middle East pitting Iran, Saudi Arabia and many of their allies against each other right now. The ramifications are enormous.

Our global affairs correspondent, Elise Labott, is working the story for us.

Elise, this potentially significantly, damaging impact for the United States.

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: That's right, Wolf.

Tonight, Saudi Arabia canceled al fights to and from Iran after cutting diplomatic ties over the attack on its embassy. As the region's two biggest powerhouses ramp up their diplomatic standoff, tonight, fears in Washington the fallout could set the entire region on a collision course.

(BEGIN VIDEOTAPE)

LABOTT (voice-over): In Baghdad today, protesters chanted "No to Sau" -- as they stormed the Saudi ambassador's residence.

A similar scene in Tehran, where protesters there returned to the Saudi Embassy after ransacking and torching it over the weekend, what is quickly becoming a crisis that could pull America further into a centuries-old Middle East conflict. Tonight, one of America's most entrenched foes is in a showdown with one of its staunchest allies.

Iran is promising vengeance after the Saudi government beheaded this cleric, Nimr al-Nimr, who it called a terrorist. He, like much of Iran's population, was a Shiite Muslim. And his killing inflamed that country, leading to protests and the brutal attack on the Saudi Embassy.

ADEL AL-JUBEIR, SAUDI ARABIAN FOREIGN MINISTER: We will not allow Iran to destabilize our region.

LABOTT: Tonight, the backlash against Iran is growing. Saudi Arabia cut diplomatic relations with Tehran. And, today, three Sunni- Arab countries, Bahrain, Sudan and the United Arab Emirates, joined them, severing or downgrading ties with Tehran and recalling their ambassadors.

AL-JUBEIR: The cutting off of diplomatic ties with Iran is in reaction to Iran's aggressive policies over the years and in particular over the past few months.

LABOTT: Since the American-led nuclear deal with Iran this spring, tensions between the countries have boiled over, each backing opposite factions in conflicts throughout the region, from Yemen to the bloody civil war in Syria, where Iran's support for Syrian President Assad has fueled Saudi anger.

UNIDENTIFIED MALE: If they grow further apart, if they're not talking, if they're fighting through proxies in places like Syria and Yemen, and they are, it means, unfortunately, that in the next several months, we should expect to see more violence, more dead, more refugees coming out of Syria.

LABOTT: Tonight, Secretary of State John Kerry is trying to get the countries to talk in an attempt to stave off war between two of the most heavily armed countries in the Middle East.

JOHN KIRBY, STATE DEPARTMENT SPOKESMAN: What we want to see is the tensions reduced. We want to see dialogue restored and try to get a resolution to these things peacefully, diplomatically and without violence.

(END VIDEOTAPE)

LABOTT: Now, U.S. officials tell me they did voice concern with the Saudis even before the cleric's execution that such a move would inflame tensions in the region.

[18:05:05]

Now, the White House pointedly not criticizing the move, only saying it was unhelpful to security and stability in the region. Tonight, officials say they are trying to avoid owning this feed, making it clear to Saudi Arabia and Iran it is up to them to resolve their differences, Wolf.

BLITZER: I wouldn't expect that to happen any time soon, a very, very worrisome situation. Thanks very much for that, Elise.

We're also following a disturbing new video that's just emerged from ISIS marking the apparent debut of a new executioner from the West hurling insults and threats at the British prime minister, David Cameron, before a mass hostage murder.

CNN's Brian Todd is digging deeper for us.

Brian, you have been talking to experts about this new ISIS video. What have you learned?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we have been talking to analysts, experts, as well as U.S. and British officials about this video and about this man.

Tonight, we're told British counterterror officials are combing through the execution video. Analysts say this is clearly an attempt by ISIS to threaten the West with a new version of Jihadi John.

(BEGIN VIDEOTAPE)

TODD (voice-over): In a familiar black mask and menacing tone, he stands behind five hostages who are on their knees. With a British accent, he aims his wrath at Britain's Prime Minister David Cameron, saying Cameron is arrogant and foolish like his predecessors.

UNIDENTIFIED MALE: In fact, David, you are more of an imbecile. Only an imbecile would dare to wage war against a land where the law of Allah reigns supreme.

TODD: Seconds later, this militant and others appear to shoot the hostages in the back of the head. The men had been accused of spying on the British. This is ISIS' latest propaganda video. And if this man bears a

chilling resemblance to Jihadi John, analysts say there is good reason.

AKI PERITZ, FORMER CIA OFFICER: Jihadi John created a boogeyman for the West. And now this person, whoever he is, is trying to replicate that scary behavior of his predecessor.

TODD: Jihadi John, the British ISIS militant identified by Western intelligence as Mohammed Emwazi, terrified Western audiences as he presided over the beheading of American James Foley and other hostages.

UNIDENTIFIED MALE: It's only right we continue to strike the necks of your people.

TODD: Jihad John was killed in November in a drone strike in the ISIS stronghold of Raqqa, Syria. Analysts say ISIS is trying to recapture his gravitas, but the group also tends to post these videos when it's on the ropes.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: I think the timing of the video clearly has to do with recent battlefield losses. They lost Ramadi. Their territory is being pushed back. Their ability to make money from oil in particular is being constrained like it hadn't been before.

TODD: A U.S. intelligence official tells CNN ISIS' use of murderers as spokesmen only reflects the group's true nature.

From David Cameron, a defiant response.

DAVID CAMERON, BRITISH PRIME MINISTER: Well, it's desperate stuff from an organization that really does the most utterly despicable and dastardly acts, and people can see that again today.

TODD: CNN is told British counterterror officials are combing through the video. British officials won't comment on who this militant might be, but experts say he's likely on their kill list.

PERITZ: They are absolutely looking for this person right now. If you're willing to make a high-resolution video executing hostages, the United States, Britain and other folks are looking for you.

(END VIDEOTAPE)

TODD: But this masked jihadist isn't the only person in this video generating significant interest in Great Britain. At the end of the video, a young boy who looks to be only about 4 or 5 years old appears unmasked in fatigues and speaks in a British accent threatening to kill nonbelievers in the West.

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

BLITZER: Brian, what does this man say about his daughter, the boy's mother?

TODD: He told Channel 4, Wolf, that his daughter brought shame to the family. He wants her to come back to Britain to face the music, he says. And he says he warned the British police several times before his granddaughter -- or his daughter -- excuse me -- left for Syria.

BLITZER: And as our viewers can see, we have blurred the picture of that little boy.

Brian, thank you.

Let's dig deeper into all of this.

Joining us, Republican Senator Ron Johnson of Wisconsin. He's the chairman of the Homeland Security Committee, also a member of the Foreign Relations Committee.

Senator, thanks very much for joining us.

I want to discuss Brian Todd's report about this new ISIS video in a moment. But let's talk about this very worrisome situation developing between Iran and Saudi Arabia. How concerned are you that this could escalate into some sort of real war between those two powers?

SEN. RON JOHNSON (R), WISCONSIN: Well, hello, Wolf. Happy new year. Not a real promising start.

[18:10:00]

I'm highly concerned. I mean, what I think, unfortunately, we're witnessing right now is a strategic realignment within the Middle East. And I think it really talks about the folly of the Iranian nuclear agreement that has actually emboldened Iran, has not modified -- he has modified the behavior for the worse.

And so we need to be incredibly concerned. Let's face it. For both Iran and Russia, a destabilized Saudi Arabia would be a good thing. It could spike or increase oil prices, which is harming both of their economies right now. This is something that we really need to be concerned about.

BLITZER: Because the Russians have been working closely with the Iranians, as you correctly pointed out.

The State Department spokesman here in Washington, John Kirby, says the U.S. at least for now doesn't plan on being a mediator in all of this, but given the stakes involved, is that wise?

JOHNSON: Wolf, the reason things have spun so out of control is, again, the historic blunder of not leaving a stabilizing force behind in Iraq. And so now the situation is spinning out of control. The region

is destabilized. Listen, I don't think America can be the world's policeman, but when it's in our national interests -- and I think a stable Middle East is in our national interests -- we need to stabilize.

We need to be a stabilizing force. And, so, whether we like it or not, the events in the Middle East are going to be spilling over. We see the refugee flow into Europe. You see the destabilization now with Shia going after Sunni in a very open manner here because of the split now between Saudi Arabia and Iran.

Again, you have always had the tensions there, but it's gotten far, you know, way out of control and a lot of that has to do with the fact that Saudi Arabia no longer looks at the United States as a reliable ally.

BLITZER: We know they didn't like that Iranian nuclear deal. The United Arab Emirates didn't like it either. And, of course, the Israelis didn't like it as well.

I want to play a bit of a conversation I had last March with the Saudi minister of foreign affairs. He was then the ambassador here in Washington, Adel Al-Jubeir. I want to get your reaction. Listen to this exchange I had with the foreign minister.

(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: This is not something that we would discuss publicly, Wolf. This is not something that I can comment on, and nor would I comment on.

But the kingdom of Saudi Arabia will take whatever measures are necessary in order to protect its security. There are two things, Wolf, over which we don't negotiate, our faith and our security.

(END VIDEO CLIP)

BLITZER: Given the tensions right now, Senator, between Iran and Saudi Arabia, there is concern. I know it from sources that I have spoken to. The Saudis may, when all is said and done, simply go out, not necessarily even develop or build a nuclear bomb, but just buy one maybe from Pakistan. They certainly have the cash to do so.

Is that really credible?

JOHNSON: It certainly was a concern of many of us that opposed the Iran nuclear agreement, was that this could actually produce a proliferation of a nuclear arms race within the Middle East. And I think that is certainly a real risk that we have to take into account.

Saudi has good relationships with Pakistan. They could just buy a weapon and again further destabilize the Middle East.

BLITZER: Yes. This is a real worrisome situation.

Senator, I would like you to stand by. We have more to discuss. We will take a quick break. We will be right back. We're following several breaking developments.

(COMMERCIAL BREAK)

[18:17:07]

BLITZER: More on the escalating sectarian tensions sparked by the execution of a top Shiite cleric by the Sunni government of Saudi Arabia. It's now cut ties with the Shiite-led Iran after protesters in Tehran burned the Saudi Embassy.

We're back with the chairman of the Senate Homeland Security Committee, Ron Johnson. He's a Republican of Wisconsin. He's also a member of the Foreign Relations Committee.

Senator, what's your fear right now, the worst that could happen, especially the impact of this escalating tensions between Iran and Saudi Arabia on the broader fight against ISIS?

JOHNSON: Well, I really do fear a really big push to destabilize the Saudi regime.

Now, let's face it, Wolf. The judicial systems of Iran and Saudi Arabia, neither of these things are my cup of tea. But I think we're really noticing that Sharia law is not particularly compatible with Western democracy. So, at least the Saudis are -- want to be our friends and our allies. Iran is a self-proclaimed enemy.

And so I'm highly concerned about the lifting of the sanctions will be pumping tens, eventually hundreds of billions of dollars into the economy and military of our self-proclaimed enemy in Iran. And we know Iran and Russia, quite honestly, would like to see the House of Saud fall and be destabilized. That would be horrible for the region, would not be good for the United States.

BLITZER: Could this escalating tension between these two countries dramatically impact, weaken the effort to destroy ISIS?

JOHNSON: Absolutely.

If events spin out of control there -- let's face it, Saudi and Arabia are already fighting a proxy war in Yemen. And so this is just going to fuel those flames and could further destabilize the region. And, again, if you don't have a stabilized Middle East, no telling what happens to oil prices, and, of course, higher oil prices is good for Putin, it's good for Iran.

BLITZER: As you know, there are these reports out there that the Saudi government knew this mass execution, including of the top Shiite leader, the beheadings of some of those individuals would spark this kind of backlash. So why do you think they did this? JOHNSON: I can't psychoanalyze the Saudis, but if you really

want to talk about a brutal regime that executes a lot of people, look at Iran.

It really is the pot calling the kettle black. I don't think you really need a whole lot of justification for these two nations to hate each other. And, again, without America's stabilizing presence there, things are spinning out of control. And it's very concerning.

BLITZER: You saw the Brian Todd report on this new jihadist video that ISIS just released, the new so-called junior Jihadi John. What do you make of it?

JOHNSON: It's chilling.

I have reports of the training by ISIS of very young children, that they're privately captured, obviously forced to join their military, but now they're going to be brainwashed. These are very young people that are going to be growing up within the system and they're going to get desensitized to this barbarity. It really shows why we have to defeat ISIS, before this training, this continuation of this caliphate continues.

[18:20:13]

BLITZER: The concern I have been told by U.S. officials, this kind of propaganda video, actually as sick as it sounds, actually does work in terms of recruiting new ISIS terrorists. Do you buy that?

JOHNSON: Well, just take a look at your earlier report where a British father is concerned about his daughter who was drawn and actually emigrated to the caliphate and now it's his 4-year-old grandson that's in the video.

So, yes, this unfortunately does inspire people. That's why ISIS has to be defeated. And it's not just going to inspire people just in England or Europe. It's obviously inspired people here in the United States. It's a real and growing threat, Wolf.

BLITZER: It certainly is.

All right, Senator, thanks very much for joining us.

JOHNSON: Have a good night.

BLITZER: Thank you.

Just ahead, Donald Trump's first TV campaign ad hits the air with what appears to be a glaring mistake, but was it intentional, as the Trump campaign is insisting?

Plus, a first for Hillary Clinton's campaign. The former President Bill Clinton, he goes out solo on the campaign stump, but will Trump's attacks on him weigh down her campaign?

(COMMERCIAL BREAK) [18:25:15]

BLITZER: He's already the undisputed leader of the Republican presidential pack. Now Donald Trump is out with his first TV campaign ad, while his rivals, they are taking new shots at each other tonight, all of this exactly four weeks to the day before the first contest of 2016, the Iowa caucuses.

Our political reporter, Sara Murray, has details for us.

Sara, Donald Trump touches on his most controversial stances in his new ad. Tell us about it.

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: That's right, Wolf.

These are the kind of comments that would sink any other normal politician, but Donald Trump is not a normal politician. Instead, he's wrapping up some of his most outlandish, controversial statements and putting millions of dollars behind it on the airwaves.

(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I'm Donald Trump and I approve this message.

MURRAY (voice-over): Just four weeks out from Iowa, GOP candidates hitting the hustings, as Donald Trump lights up the airwaves, Trump releasing his first TV ad aimed at Iowa and New Hampshire, not showcasing anything new, but rather doubling down with dollars on his most controversial statements, the Muslim ban, widely criticized as religious discrimination by Republicans from Paul Ryan to Dick Cheney.

TRUMP: He keeps signing executive orders because he doesn't meet with people. I don't know. He doesn't like people, I guess.

MURRAY: Today, Trump showing no sign of slowing, ramping up his criticism of President Obama's upcoming executive action on guns, but perhaps overstating their impact.

TRUMP: Pretty soon, you won't be able to get guns.

MURRAY: And claiming gun-free zones make it harder to keep Americans safe.

TRUMP: Whenever I see gun-free zone, I see that's a flag for the wackos to come in and start shooting people.

MURRAY: Trump betting his tough tone and $2 million a week in paid advertising could push him to a victory as his closest competitor takes a different tack.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: If every one of you gets nine other people to show up at caucus, you have just voted 10 times. That's how we win Iowa. That's how we win the primary. MURRAY: Ted Cruz kicking off a six-day 36-county tour of Iowa,

still playing nice with Trump as his super PAC takes shots at Marco Rubio.

SEN. MARCO RUBIO (R-FL), PRESIDENTIAL CANDIDATE: Yes, I know I have a debate, but I got to get this fantasy football thing right.

MURRAY: Rubio's team defending their lighthearted video and firing back at Cruz over his pop culture proclivities.

CRUZ: Do not say that name. I can't hear you.

MURRAY: Rubio's senior adviser tweeting, "Fantasy football unpresidential? But quoting entire scenes from 'Princess Bride' is, what, Reaganesque?"

The target on Cruz's back growing as Iowa nears, 2012 Iowa caucus winner Rick Santorum mocking Cruz's filibustering in a new TV ad.

CRUZ: I do not like green eggs and ham, I do not like them, Sam I Am.

NARRATOR: 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's your president.

MURRAY: While Rubio takes his own backhanded shots.

RUBIO: Words and political stunts cannot ensure our security. ISIS cannot be filibustered.

MURRAY: The battle for the establishment crowd growing more pitched, as both Rubio and Chris Christie sharpen their tone to cast themselves as the serious alternatives to Trump.

GOV. CHRIS CHRISTIE (R-NJ), PRESIDENTIAL CANDIDATE: These times and these challenges demand a grown-up. Showtime is over, everybody. We are not electing an entertainer in chief.

(END VIDEOTAPE)

MURRAY: Now, while most Republicans are hunkering down in New Hampshire or Iowa, trying to lock in a lead before these voters head out in these early nominating states, Donald Trump is here in Massachusetts tonight.

You can see his campaign making a big play not just in the early states, but also for these states that are going to vote on March 1 -- Wolf.

BLITZER: Sara Murray out there on the campaign trail, thank you.

Let's get some more on Donald -- on Ted Cruz, I should say. He's keeping the gloves on when it comes to Donald Trump, but not for his next closest rival, Senator Marco Rubio. While Cruz focusing in on Iowa, a super PAC supporting him is focusing in on the junior senator from Florida.

CNN's Sunlen Serfaty has part of our campaign coverage on that part of the story tonight.

Sunlen, the battle between these two clearly heating up.

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: That's right, Wolf. It is.

And Senator Ted Cruz today suggesting that he's being targeted so much by his rivals because panic, in his words, is setting in. But, today, it was a group of Ted Cruz super PACs that were really targeting Marco Rubio, using a video clip that was originally put out by the Rubio campaign originally intended to be a humorous video clip.

Well, they used it to portray Marco Rubio as someone who is unprepared to be president and someone that they believe is easily distracted by things like fantasy football.

(BEGIN VIDEO CLIP)

RUBIO: Yes, I know I have a debate, but I got to get this fantasy football thing right. OK.

NARRATOR: Keep the Promise 1 is responsible for the content of this advertising.

(END VIDEO CLIP)

SERFATY: And the Rubio campaign wasting in time to respond to that ad today in putting out a series of snarky tweets. This one from Rubio advisor Todd Harris saying, quote, "Fantasy football equals un- presidential, but quoting entire scenes from 'Princess Bride' is, what, Reagan-esque."

Now, that is a reference to Ted Cruz, who often does impressions from the '80s movie "The Princess Bride" on the campaign trail. So clearly, Wolf, as the campaign enters a new phase, here in Iowa and especially between these two campaigns and candidates, everything is fair game -- Wolf.

BLITZER: Reporting for us. Sunlen, thank you very much.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get to the breaking news. We're just getting new details of the new gun restrictions President Obama will announce tomorrow morning to be enacted by executive order, bypassing Congress.

Let's go live to our White House correspondent, Michelle Kosinski. Michelle, you have new information on what the president will announce. Tell us what you've learned.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: I mean, these are executive actions. This is not the action of Congress. So you see the administration trying in a number of areas to make

some significant changes, but they're in the form of guidance and recommendations and proposals. So you really see the limits within.

I think the biggest issue on the background checks, they're now going to put out guidance from the ATF that it doesn't matter if you sell one gun or 500,000 guns. If you are in the business of selling guns -- and they're going to clarify what that means -- you have to get a license and you have to have the buyer go through a background check.

The question in that, though, is how do you enforce this? Is this going to be somewhat voluntarily in the sellers coming forward and saying, "OK, according to this guidance, I am in the business of selling guns"? Although we do know now there will be penalties, including possible prison terms and big fines.

Other areas they're going to try to work on, the White House sent a letter to every state encouraging them to give more information to the background check system. People who would be disqualified because of mental illness or domestic violence.

Again, that's an encouragement. How it's going to be enforceable is another question.

I think one way that we will see changes is that the White House wants to really beef up and rebuild the background check system itself. They plan to do a lot more hiring and a lot more funding, Wolf.

BLITZER: So very quickly, Michelle, in other words, if there are individuals whose business is to go to gun shows and sell guns at gun shows, the president's executive order will force them to require background checks for individuals who go to those gun shows, is that right?

KOSINSKI: Yes, and it's not just gun shows. It's wherever you're selling guns. If it's online they included the dark web. If you're in a store, if you're in your home, they're going to clarify what actually constitutes being a seller.

And what's interesting, they said the number doesn't matter. Again, if you're selling two guns, if it's for profit, if it's a repetitive practice, as they put it, you can't hid behind the title of just being a collector. They could determine that you're a seller, but how is the federal government going to find everybody out there that's doing this? That's a question that remains to be answered, Wolf.

BLITZER: We'll see what the president says about that. All right, Michelle. Thanks very much.

CNN will, of course, carry President Obama's remarks live tomorrow morning around 11:30 a.m. Eastern. We'll have the president's statement in the East Room of the White House tomorrow morning. And the president will also join CNN's Anderson Cooper and a live

audience for a CNN primetime event, "Guns in America." That will take place Thursday night, 8 p.m. Eastern, only here on CNN.

Let's talk about all of this and more with CNN politics senior digital correspondent Chris Moody; our "Washington Post" assistant editor David Swerdlick; and CNN's political director, David Chalian.

Guys, thanks very much for coming in.

Let's, first of all, David, talk about the $2 million ad buy that the Trump campaign has now done. This is really the first time. He's been campaigning for six months. A month to go, four weeks to go, all of a sudden he purchased $2 million in commercials. They didn't have to do this until now. Why did they do it now?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, because Donald Trump, I think, wanted to do -- accomplish two things.

One, show he's very serious about wanting this job. I think that he wants to dispel any notion in any voter's mind that this is a lark for him or he sees it as a reality show. No, he's putting the money where his mouth is.

Two, remember, he has gotten a free ride for -- in terms of campaign finances all year long. He's gotten so much free media pick- up. He said he's some $35 million under budget from what he anticipated spending in 2015.

So much like we saw when he first got into the race, he said, "Hey, I'm going to show you how much I'm worth. Hey, I'm going to file all the appropriate paperwork." And everyone was skeptical. And he did so, and he checked those boxes. People were skeptical if he was going to actually start dipping into his wallet and spending his money on this campaign, and now he's starting, $2 million this week. He says $2 million per week as we're going forward.

BLITZER: Does it mean, does it suggest to you, David, that he's a little nervous about Iowa and maybe even New Hampshire?

DAVID SWERDLICK, ASSISTANT EDITOR, "WASHINGTON POST": Well, I don't know if he's nervous. They're trying to sound nonchalant about the fact that they're doing this buy, because they say they have so much money on hand.

I think the thing with Trump is that so much of his appeal, Wolf, with voters has been that he's a winner, that he wins, that he's leading every poll. He starts every speech by talking about the fact that he's winning. So if he doesn't win in Iowa or doesn't win in New Hampshire or at least come in a strong second in those states, that's going to change his whole narrative. And for that reason, I think they're not taking any chances by doing...

BLITZER: He wants to be a winner. Winning in Iowa, winning in New Hampshire. And his theory has been if he wins in Iowa, wins in New Hampshire, he's going to win in South Carolina. He's going to win in Nevada, and it's all but over. That's his theory.

CHRIS MOODY, CNN POLITICS SENIOR DIGITAL CORRESPONDENT: Well, then you're off to the races. The purpose of the Iowa caucus and is because it's about momentum.

And for Donald Trump, he has benefited so much, as you both has said, from being on media. He's accepted almost every interview with networks all over the country.

But if you look at those polls in Iowa, Ted Cruz is doing incredibly well, and he said when he announced that he was going to do this ad buy, that Donald Trump said he does not want to take any chances. And I see that as a fulfillment of that. You can call it maybe anxiety of that promise that he wants to win that Iowa.

BLITZER: Does his decision, Donald Trump's decision, David, to go after Bill Clinton and his record, the sexual scandals during his administration, does that help him in Iowa? Does that help him in New Hampshire?

CHALIAN: Without a doubt. I mean, that's red meat for the base. Right? The Clintons had been enemy No. 1 for the Republican Party base for decades now.

And remember, there's been a lot of information out there about the Clintons at Donald Trump's wedding and how close he was. He himself this morning said, "Hey, when I was in business, I was getting along with everybody. I did that better than anyone."

Well, he needs to start showing his conservative bona fides, if you will, and speak to the base and say, "Hey, guys, I can take this fight directly to our political combatant, the Clintons, and do it in an effective way." That is what he's hoping to show, and I think it absolutely works for him.

BLITZER: David, you agree, a smart strategy on Trump's part?

SWERDLICK: Yes, I agree with David. It shows Trump as the leader of the Republican Party taking on the presumed leader of the Democratic Party.

I think the Clinton team may have made a mistake with that penchant for sexism comment by sort of letting Trump into the general election discussion with her rather than keeping him bound in with his Republican rivals.

BLITZER: You noticed today both Hillary Clinton and Bill Clinton, Chris, they don't even want to respond to Donald Trump on this issue anymore. They're not taking the bait, if you will.

MOODY: No, I think that's a smart strategy right now, but Donald Trump does not play politics like everyone else does. You can't treat him just like you would any other challenger. And he's proven that to his Republican challengers, who have faltered time and time again, even dropped out of the race when they said, "I just can't handle this kind of campaign" or "I don't want to run in this kind of campaign environment." And the Clinton folks are going to have to adapt their strategy to whatever Donald Trump's form of politics is. It's certainly not something that anyone is used to.

BLITZER: All right, guys. Stand by. We have more to discuss. I want to take a closer look at what Bill Clinton is actually doing and saying on the campaign trail today. Much more when we come back.

(COMMERCIAL BREAK)

[18:42:24] BLITZER: The former president, Bill Clinton, campaigning solo for his wife for the first time in this election season, telling a New Hampshire audience today about the softer side of Hillary Clinton and calling the Republican field of presidential candidates -- and I'm quoting Bill Clinton right now -- "kind of scary."

Our senior Washington correspondent, Jeff Zeleny, is out there on the campaign trail, covering Hillary Clinton tonight.

Jeff, she's on a two-day swing through Iowa. What's the latest?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: She sure is, Wolf. I mean, talk about a one-two punch. As Bill Clinton was in New Hampshire talking about the softer side of Hillary Clinton, how he met her some 45 years ago.

She was here in Iowa traveling across the state, going after Republicans directly and hard. No mention of her Democratic primary opponents, no mention of Bernie Sanders. She was focusing specifically on Republicans, and she told voters that she is the last line of defense among keeping Republicans in -- out of the White House.

So she is trying to make the argument to Democrats who may not be quite supportive of her, may not be quite enthusiastic about her, that she is the strongest candidate.

But Wolf, a very interesting moment happened in the audience when one voter asked her about Donald Trump.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I have an interest in your response to the Donald's comment that you and President Obama created ISIS.

H. CLINTON: I've 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)

ZELENY: So of course, that moment came. The voter was referring to something Donald Trump said over the weekend in Mississippi that President Obama and Hillary Clinton were responsible for creating ISIS.

Now, I'm not sure she lived up entirely to that New Year's resolution. She did talk a lot about Republicans, a lot about what she called extreme policies here.

But Wolf, you can tell that the sense of urgency is creeping into her campaign. She knows full well how tricky these Iowa caucuses can be. It was eight years ago this morning when she woke up to a third- place finish in Iowa, which of course, changed her first presidential campaign.

So she is trying to focus on Republicans here as a way to show Democrats that she is the toughest candidate in the primary and then again, of course, in the general election.

BLITZER: Yes. You're absolutely right. Barack Obama came in first in Iowa eight years ago. Jon Edwards actually came in second. Hillary Clinton came in third.

Jeff Zeleny, thanks very much.

Let's bring back our panel. Chris, what did you think of Hillary Clinton's response to that person who asked her to comment on Donald Trump's assertion that she and President Obama actually created ISIS?

[18:45:08] MOODY: Well, first of all, it was funny that the gentleman who asked the question referred to him as the Donald. I wonder how many people are going to refer to him like that when they ask questions about him.

But the question is for Hillary Clinton, how long can she not respond to Donald Trump? If he goes on to be the nominee, they're going to be nothing but responding to Donald Trump. Perhaps gleefully, she's going to respond to him when it benefits her and not respond to him when it benefits her as well. I think right now, at the throes in the Democratic primary, they are ready to just not focus on him on stuff like --

BLITZER: I assume, David Chalian, you remember this eight years ago, she has learned the lessons of her failure in Iowa from them and she's got a new game plan to actually make sure her supporters show up at those caucuses.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: There is no doubt that she took those lessons from 2008 and applied it to building a very big robust organization in Iowa. The style of which Barack Obama had rather organically they invested hard early and they are building this organization. We'll see on caucus night if indeed all those lessons of organizing were learned.

But clearly, she is not looking beyond Iowa and New Hampshire very much. She knows better than anybody getting tripped up in one of those two early states could be quite damaging to a presidential campaign and so she is supremely focused on making sure that Iowa and New Hampshire, where Bernie Sanders is most competitive against her, are the focus of her operation.

BLITZER: Because in the New Hampshire polls, David, Bernie Sanders does really, really well, less so in Iowa, but it's still four weeks to go. DAVID SWERDLICK, ASSISTANT EDITOR, THE WASHINGTON POST: And as

David said right, Hillary Clinton of all knows how well one slipup can sort of affect the campaign down the road, even though she came first in Iowa -- in New Hampshire, excuse me, in 2008, she had already let President Obama in the door, then-Senator Obama in the door, and we know what happened after that.

I think Senator Sanders because he's from a neighboring state will do well in New Hampshire but it's not clear to me after New Hampshire where he goes to generate support.

BLITZER: David, let's get back to the breaking news we reported. Michelle Kosinski from the White House, the president's executive actions tomorrow morning, he'll announce in the East Room of White House to try to tighten gun control in the United States.

Politically speaking on the campaign trail, how does this play?

CHALIAN: Right. There are two things here. There's -- Barack Obama the president in his last year solidifying a legacy in trying to put an issue front and center that he wants to work. But on the campaign trail, Wolf, this is a gift for both parties, because this is an issue that rallies the base of each party and so Republican presidential candidates out there responding saying Barack Obama is going to try to take your guns, he's going to start violating the Second Amendment, which isn't necessarily true in what he's proposing but nonetheless, they're going to engender a lot of enthusiasm on the Republican base about sort of rallying against this.

On the Democratic side, Hillary Clinton is going to tout this as pleads, ascribing to Barack Obama, what he's doing, this is wonderful, and the liberal base will really be excited about what he's doing tomorrow. It's an issue that means a lot to them as well.

BLITZER: Donald Trump earlier today on CNN, on "NEW DAY" this morning, he told our Chris Cuomo this is just the beginning of President Obama wanting to take away everybody's guns, if you will.

MOODY: Well, Donald Trump says quite a lot of things very glibly that aren't necessarily flesh out policy proposals or prescriptions. Now, of course, what President Obama can put on paper any future president can take off paper because it's only an executive action so I think you're going to see the candidates, once this is really flesh out, once Obama announces everything, trip over themselves to see how they'll be the quickest to repeal it depending on what it is.

BLITZER: Most of these Republican candidates, they all say the same thing. On day one, they're going to change this, this, and they're going to be really busy on day one if they are elected president of the United States.

All right, guys, thanks very much.

Just ahead, the growing crisis involving one of Washington's staunchest allies and one of its entrenched foes. What's at stake for the United States in this escalating feud between Saudi Arabia and Iraq?

(COMMERCIAL BREAK)

[18:52:51] BLITZER: Let's get back to our top story this hour. Saudi Arabia's execution of a Shiite cleric, it's igniting an explosion in the Middle East. The Saudis and key Sunni Muslim allies have cut ties with Shiite Iran after a mob torched the Saudi embassy in Tehran.

Joining us now, our CNN national security analyst Peter Bergen, our CNN contributor Michael Weiss, he's a senior editor at "The Daily Beast", and Vali Nasr, he's the dean of the Johns Hopkins University School of Advanced International Studies here in Washington.

Vali, how big of a deal is this escalating crisis now between Saudi Arabia and Iran?

VALI NASR, JOHNS HOPKINS SCHOOL OF ADVANCED INTL. STUDIES: Well, it is a big deal. These are the two biggest power brokers in the region. They have an escalation of conflict between them. This is happening at a time where Europe and the United States and international community is trying to create regional solutions to ISIS and regional solutions to Syria, and we really cannot do that if these two are at each other's throats and more likely will actually fuel the conflicts in Syria and Yemen through proxy war.

BLITZER: So, these proxy wars have been going on. But the question is this, will the proxies war lead to an actual fighting war between Saudi Arabia and Iran?

NASR: I don't think so. I don't think the military makeup really leads there. Any time they have wanted to fight against one another, they have done it indirectly. Iran doesn't want Saudi Arabia territory. Saudi Arabia doesn't want Iranian territory. What they really want is control over Iraq, Syria, Yemen, Lebanon, and that's where they get along and share their spoils, or they will fight to the knife and this is the scenario that can unfold.

BLITZER: That's a very dangerous situation.

Michael, does the Saudi kingdom really care if they've angered the United States by executing this Shiite cleric and whole bunch of others in Saudi Arabia?

MICHAEL WEISS, CNN CONTRIBUTOR: Frankly, Wolf, I don't think the Saudis have cared what the United States has thought for some time. I mean, you know, the Syria file, the Syria crisis has been a real thorn in their side. They think that the Obama administration has played this disastrously by not underwriting the overthrow of Bashar al- Assad's regime.

For the Saudis, they have one priority and that is the expansion of Iranian hegemony throughout the Middle East, what they refer to as the Shia crescent, which goes all the way up even into the occupied territories of Palestine. [18:55:00] For the Iranians, of course, keeping Assad alive is

their number one priority in the Levant and it's no coincidence, Wolf. I mean, look at what's playing out in Syria. Every day, you have some RIGC, revolution guard corps officer, who's sent back to Tehran in a box. He's being killed by a proxy group, a rebel group in northern Syria probably getting weapons and money and some training from the Saudis.

So, this proxy war has been roiling already, and this, in a sense, I think the execution of Sheikh al Nimr was just not even the straw that broke the camel's back. I don't even know the right metaphor for it. I think this was just kind of the technical issue that they're using to escalate what had already been a very dire and growing animosity toward each other.

BLITZER: Peter, why did the Saudi execute this cleric?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, I think --

BLITZER: Because they knew it was going to cause a huge uproar.

BERGEN: You know, I think you have to put into context of the fact, you have a new king, and new crown prince, his youngest son. I think they're making mistakes.

Look at the invasion of Yemen. It's been an unqualified disaster.

BLITZER: For Saudi Arabia.

BERGEN: For Saudi Arabia, I mean, and for Yemen. I mean, it took a bad situation and made it much worse.

BLITZER: Because the Houthi rebels in Yemen, they're backed by Iran and the Saudis are fighting them.

BERGEN: Indeed. So, they seem not to care as Michael indicated. They seem to want to amp up this crisis, and they're doing a form of brinkmanship in the region that they're in.

BLITZER: I've been told, and this is a serious concern, Vali, I want to get your analysis, that there really -- there's real concern now that the Iran nuclear deal is going forward, the Saudis didn't like it. The United Arab Emirates didn't like it, but they went along reluctantly with it, that the Saudis at some point if they have a tense relationship with Iran, they can just go out to Pakistan, shall we say, and buy a nuclear bomb. They've got the cash if they wanted. Nuclear proliferation in the region could explode.

NASR: I don't think the Pakistanis are ready to sell them a bomb.

BLITZER: If they give them a lot of money.

NASR: It has to be a lot, lot more, and they're not doing economically well right now. I don't think the Saudis ever went along with the deal. They had to say certain things in public, but in reality, they had -- their key agenda was that even though there's a deal, Iran should not be allowed back in the region and should not be part of discussions about Syria, Yemen, and the like.

And I think the escalation of sectarian sanctions actually serves that Saudi purpose. What they're saying to us is it's not ISIS that's the priority in this region, it is Iran. And we don't want to talk to them and we don't want to talk to them. And they shouldn't be part of a serious solution, and this break of a diplomatic resolution actually served what was Saudi Arabia's agenda after the nuclear deal.

BLITZER: Michael Weiss, I'm anxious to get your analysis, because it's so intriguing. The new foreign minister of Saudi Arabia, Adel Al Jubeir, used to be the ambassador here in Washington. The U.S. arrested some Iranians here in Washington for allegedly going out there wanting to execute, to assassinate at a prominent restaurant in Georgetown here in Washington, Cafe Milano. He knew about this. He was the one severing diplomatic relations.

Does this kind of personal animosity have an impact?

WEISS: Absolutely. And I'll go one further than that. The current interior minister, the crown prince, who's next in line for the throne, Muhammad bin Nayef, his father, when his passed away, Sheikh al Nimr, who's the Shia cleric they just put to death, issued this huge imprecation on this guy's memory, he said that, you know, I hope worms are feasting on his corpse, he should rot in hell.

Muhammad bin Nayef, of course, has another priority and one of the reasons that he's had reputationally good relationship with the United States on counterterrorism in the mid-20 or late 2000s, al Qaeda in the Arabian Peninsula tried to blow him up. And let's not forget, of the 47 people put to death, the vast majority of them were Sunni militants, including a leading AQAP cleric.

So, bin Nayef's personal calculation and the weight of which he brings to bear of running of the interior ministry can't be discounted in all of this either. Sheikh al Nimr had been sentenced to death many years ago and that the sentence has just not been carried about until now.

BLITZER: It was carried out now.

Peter, very quickly, can the U.S. do anything to calm things down.

BERGEN: I don't really think so.

BLITZER: What do you think, Vali?

NASR: I don't thing there's anything simple we can -- but we have to assess a lot of our objectives in the region and expect our allies and also Iran on the other side, the Russians to basically get around these goals. These are fighting ISIS and ending the war in Syria. BLITZER: It looks like the whole situation in the region is

going from bad to worse to even worse right now. Do you remember a time when it was this explosive?

NASR: No, but also, I don't remember a time in which Saudi Arabia would basically throw a hand grenade and then inform us afterward and we have the play catch up. We actually have to get ahead of this. We don't relations with Iran, we don't have leverage with them. But this is our closest ally there and we shouldn't be this surprised every time it makes a decision.

BLITZER: The Saudis are very angry right now that Iran is about to get $150 billion in cash from these frozen assets that are about to disappear.

All right, guys, it's a bad situation. We'll continue to watch it.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.