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Congress Passes Tax Cut Extension; Holiday Travel Headaches; Mortgage Rates Hit Another Low; Romney Gets H.W. Bush Endorsement; Protesters Fill Tahrir Square; Bombings Rock Syria

Aired December 23, 2011 - 11:00   ET

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

T.J. HOLMES, CNN ANCHOR: All right. We're at the top of the hour. Doesn't that just make you feel all good inside now?

Get you up to speed on some other stuff now.

Here we are, two days before Christmas, on this December 23rd. The deal is done, we think, after a Republican revolt and then a Republican retreat.

The House today approved a two-month extension of the payroll tax cut. The Senate also signed off on that deal. Now it heads to the president for his signature. All this means that your taxes will not go up January 1st.

Well, the top Senate Democrat says it didn't really have to be this way. And in the end, House Speaker John Boehner, he caved in and he gave in to political pressure but, still, he defends the stand that he took.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: We have fought the fight, the good fight, but I talked to enough members over the last 24 hours who believe that, hey, listen, we don't like this two-month extension, we don't like this reporting problem in the Senate bill, and if you can get this fixed, why not do the right thing for the American people even though it's not exactly what we want?

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: It seems that everything we've done this last year has been a knockdown, drag-out fight. There is no reason to do that. And if there were a message received from this last thing we've been through, I would hope, especially, I repeat, the new members of the House will understand that legislation is the art of compromise.

(END VIDEO CLIP)

HOLMES: Now, the tax cut deal is a win for the president. He pushed back pretty hard against House Republicans who opposed the short-term extension. The White House did issue a statement saying, and I quote, "This is the right thing to do to strengthen our families, grow our economy, and create new jobs. This is real money that will make a real difference in people's lives."

Now, that's the statement we got a little earlier. We are going to get another statement. We are going to hear from the president in just a bit, just over an hour from now, about 12:15 Eastern Time. We're expecting the president to come out and make some remarks certainly about what has happened with this two-month extension.

Then the president is going to head to meet up with his family in Hawaii. His wife and his two daughters went ahead. He stayed behind to finish up this work. He will be heading to Hawaii to start his holiday vacation.

But still, before that, he will make some comments to the American people about what just happened with this tax cut deal. 12:15 Eastern, you will see it right here.

Also, let's go to Syria, where two suicide car bombs ripped through the capital there. Look.

Yes, these bombs exploded back to back outside heavily-guarded intelligence buildings. The blasts came one day after an Arab League team arrived in Damascus to monitor the government's promise to end its crackdown on protesters. The government blames the bombings on terrorists, but opposition forces say Bashar al-Assad's regime was behind these attacks. No confirmation on fatalities just yet.

Also, dueling demonstrations under way in Egypt. The scene in Tahrir Square, you're seeing there. Protesters are demanding that the ruling military council now transfer power to civilians. The crowd is outraged over this week's brutal crackdown when more than a dozen protesters were killed and many more wounded. Elsewhere, in Cairo, hundreds of pro-military demonstrators gathered to voice their support for the ruling body.

And a reversal today from North Korea as it prepares for the funeral of its so-called "Dear Leader," Kim Jong-il. The North Korean government now says it will accept private condolence delegations from South Korea. The two countries technically are still at war. Earlier in the week, the secretive government announced that it would not accept foreign delegations.

Kim's funeral set for Wednesday.

And in New Zealand, a city there already pretty spooked by a deadly earthquake earlier this year getting another jolt. You see that shaking going on. You see people ducking for cover.

A series of tremors hit near Christchurch today. It's the same area hit by a powerful quake back in February. A hundred eighty people were killed in that disaster.

No wonder there people are still a bit jumpy.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It's pretty freaky.

UNIDENTIFIED FEMALE: It's quite scary, yes, just watching the ceiling, making sure nothing is going to come down.

(END VIDEO CLIP)

HOLMES: Now, the city's airport was closed. At least two people were injured.

Also, the FDA and the Centers for Disease Control are investigating the death of a newborn baby in Missouri that could be linked to infant formula. The child died of a rare bacterial infection. Another baby also in Missouri was infected but survived.

The formula is the milk powder base Enfamil Newborn. On Wednesday, Wal-Mart pulled all cans of the formula with the same lot number.

Also, Denver is beginning to dig out of a major snowstorm. Look at that. Ten inches fell around the city in 24 hours. Almost 30 inches in some of the outlying areas.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Is there a car under there?

UNIDENTIFIED MALE: I didn't recognize the car when we first walked out.

UNIDENTIFIED FEMALE: My ice scraper is, like, this big. And so I couldn't even -- I just had to start using my arms to shovel my car out.

(END VIDEO CLIP)

HOLMES: You do what you've got to do.

Coming up, a look at the weather. These storms could affect your holiday travel plans.

Also, Russia's Soyuz spacecraft just docked at the International Space Station. A NASA official says the Soyuz carried a Christmas present for the space station crew -- reinforcements. The three-member crew from the Soyuz will fill out the six-person capacity on that space station.

Well, six minutes past the hour now. More on that approval of the payroll tax cut extension.

After another political showdown, Congress signed off on the two-month extension last hour after House Republicans backed down. So what exactly does this legislation do?

Well, most notably, as you've been hearing about, it keeps payroll taxes at the current rate of 4.2 percent. That means taxes will not go up for millions of Americans starting January 1st. It also extends emergency unemployment benefits, and it includes the so-called "doc fix" that delays cuts in Medicare payments to doctors.

Our congressional correspondent Kate Bolduan on Capitol Hill.

Kate, I told you, nothing to worry about.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Never. Never anything to worry about. You knew I never had any question in my mind.

HOLMES: Yes. We say that now, and we can joke about it now, but we just had to go through this exercise, and a lot of Americans aren't going to appreciate that. And I'm sure Congress may be lucky that a lot of people are worried about their holiday plans right now and weren't paying so close attention. But this is the last taste in their mouth for 2011 from this Congress.

BOLDUAN: That's right. And I think what a lot of these members were hearing when they went home is that constituents are frustrated with a dysfunctional Congress. And there seems to be no wonder after this drawn-out battle why Congress's approval rating is basically at historic lows at this moment.

What happened today, T.J., this morning, a very quick ending to a very long, drawn-out battle up here over extending this payroll tax cut. After yesterday, House Republican leaders, House Republicans backed off their opposition to this two-month short-term extension of the payroll tax cut.

It was very brief this morning. And in two brief moments on the House and Senate floor, it was a done deal. Both passing this slightly tweaked version of this two-month extension that the Senate basically -- it's effectively what the Senate had approved last weekend with some tweaks that are seen -- that House leaders hope that are seen as concessions to House Republicans so they can win over, or at least quiet opposition to the short-term extension.

And with that, it heads to the president, to the White House desk -- to the White House, to the president's desk. And don't be fooled. We'll be right back at this soon enough as this extension only gets Congress through February.

HOLMES: OK. And Kate, were these real concessions, or they just finally realized there was a political reality here?

BOLDUAN: A little bit of both, I would say. House Speaker John Boehner yesterday said that there was concern over a technical problem, a technical, complex reporting, accounting element to the Senate bill that made it -- would make it very difficult for businesses to handle dealing in reporting this tax cut extension. We don't need to get into the weeds in that, though Senate Democratic aides say that was the first time they had raised this issue yesterday.

But that being said, this had a lot to do with political pressure, as we well know and we've been talking about it. House Republicans were getting heat -- were taking heat from across the board, basically. And in the significant moment I think that really kind of broke the impasse, one being yesterday, when the top Republican in the Senate came out calling on the House Republicans --breaking his silence, Mitch McConnell, to say it's time to back off from this opposition and kind of cut your losses and push the short-term extension through. As well as -- you mentioned at the very top, T.J., House Republicans were reporting to their leaders, we hear, that when they were home only for a couple days, they were hearing it from constituents.

A lot of frustration that Congress is so dysfunctional. And so while House Speaker John Boehner stands firm that they don't like the two- month extension, and we know that they still don't like the two-month extension, he also says that it might have been -- the opposition that they had might have not been so smart politically. And they just want to not at least be facing potential blame, or at least being able to be seen as being willing to allow a tax increase at this time in the economy -- T.J.

HOLMES: Not so smart politically. That's one way to put it, Kate.

Kate Bolduan for us up on Capitol Hill.

Thank you, as always.

And again, to our viewers, we're just about an hour away. We will hear from the president. He is scheduled to make remarks on this payroll tax cut extension and the deal that was made at 12:15 Eastern Time. We will bring that to you live.

He'll make those comments. Then he's expected to take off earlier this afternoon, about 1:20, I think, is the time we're given, headed to Hawaii to join his wife and his kids for the vacation. They got an early start. He of course had a little work to do back in Washington.

We'll have that for you live when it happens.

So, who are the big winners and the losers of the payroll tax debate? We'll ask an expert how this political posturing will impact Congress and even the presidential race.

Also, a lot of people concerned about the weather right now. Bad weather could cause some long delays for millions of you heading out for the holidays. We've got that forecast for you.

Also, celebrities behaving -- well, badly. The biggest names from a scandalous year in Hollywood.

Also, sharing the wealth from pilgrims in Bethlehem. Israelis and Palestinians in a struggle over tourism money.

Also, an activist in Egypt almost beaten to death now telling her story to CNN.

(COMMERCIAL BREAK)

(WEATHER REPORT)

HOLMES: Let's go on now since we are talking about travel here, our Holly Firfer at Atlanta's Hartfield-Jackson International Airport, the busiest that we have.

Is it living up to that billing so far?

HOLLY FIRFER, CNN CORRESPONDENT: Not today, T.J. I mean, if you look behind me, it's kind of empty.

It's actually business as usual here. They were expecting heavy holiday travel, but they're used to getting about 243,000 passengers through Atlanta's airport every day. And so today is really no different. Only the scenery has been changed.

Instead of business travelers, we're seeing more families with packages going on holiday vacations. So maybe a few more smiles than normal. But as Chad mentioned, what a difference a day makes.

Yesterday was kind of a nightmare for a lot of people. People were stranded, missed connections. Some people couldn't even get into the airport because of the heavy thunderstorms we had.

And so a lot of people today in Atlanta were concerned that the airport might be a mess, so they got here early. We talked to a couple of those people this morning.

(BEGIN VIDEO CLIP)

MICHAEL LAMPERT, HOLIDAY TRAVELER: It's been fine so far. We got in fine. It's been good so far.

RONALD WHITFIELD, HOLIDAY TRAVEL: I expected it, but I also heard in the news that air flights are down, like, 10 percent. People are not flying as much this holiday season. So I expected it to be crowded, and it's not crowded at all, so it's great.

(END VIDEO CLIP)

FIRFER: So it's been pretty good for a lot of people.

I mean, one guy we met about 4:30 this morning, I was chatting with him. And I said, "So what time is your flight?" He said, "10:15." I said, "What are you doing here so early?" He said, "I didn't know. I just wanted to be safe."

So I would imagine that he's well on his way to his destination, and, T.J., probably very caffeinated at this point.

HOLMES: Yes, at this point. But so far, so good. We're going to be checking in with you more. And we'll see if things continue to look like that.

Holly, thank you, as always.

We're about eight minutes past the hour. Talking about the holiday here. And you're going to get gifts, you're giving gifts. It's just the thought that counts, right? But if it comes with a gift receipt, all the better.

The National Retail Federation says Americans will set a record this year for the value of gifts they'll return after the holidays.

How much money do you think we're talking about here: $26 billion in returns, $36 billion, $46 billion? I'm going to tell you in a moment. Stay with me.

(COMMERCIAL BREAK)

HOLMES: Twenty minutes past the hour now.

A lot of people return gifts after the holidays. So we were asking, how much do you think Americans will be returning this year: $26 billion, $36 billion, or $46 billion? Would you believe it's C?

It's expected that we'll return a record-breaking $46 billion worth of gifts this year. Why even go through all that trouble shopping for you for?

Well, some Best Buy shoppers may find some coal in their Christmas stocking instead of electronics, because the retailer -- listen to this -- is canceling some holiday online orders just days before Christmas. The company says it has run out of some of its hottest items because of the overwhelming demand at BestBuy.com.

Alison Kosik at the New York Stock Exchange.

That's why your gift might not arrive. Best Buy canceled it on me, so it might not show up. so I apologize. We'll get something else to you.

But how are you doing on the New York Stock Exchange?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes. Talk about major disappointment.

HOLMES: Yes.

KOSIK: That would be a major disappointment.

HOLMES: It would.

KOSIK: How is it looking here?

HOLMES: Yes.

KOSIK: Sorry. We're talking over each other. That delay is a little funky, isn't it? I'll just go ahead.

So, yes, it's looking a lot like Christmas here on Wall Street, and I'll tell you why. Because few people are trading at this point.

I think everybody's out Christmas shopping for gifts. And they're certainly not buying stocks in mass still.

We did get some economic reports here on Wall Street today. They are keeping stocks in the green right now. And just so you know, if you're keeping track, T.J., we have got another five days left for trading here on Wall Street. And the S&P 500 is virtually unchanged from the beginning of the year. Remember, our 401(k)s track the S&P 500, which means all those ups, all those downs, all those roller-coaster rides, it's like they never happened -- T.J.

HOLMES: And you got good news on the home front to wrap up the year as well?

KOSIK: Yes. Happy holidays, homebuyers or refinancers.

Mortgage rates, they hit a record low. Check out where they are -- 3.91 percent for a 30-year fixed.

I'm going to show you what it means in dollars and cents. If you have got a $200,000 mortgage, so at the beginning of the year let's say you were paying 4.81 percent, and you're able to get that 3.91, if you refinance now, that means you're going to save $100 a month. That comes out to $1,200 a year.

And more good news. These low rates are expected to stay low for a while because those mortgage rates, they're tied to 10-year treasuries. And that yield on that treasury bond is low because more people are parking their money into treasury bonds, because treasury bonds are seen as a safe haven in these uncertain times. They're certainly not parking their money in stocks these days, although once again we are in the green right now -- T.J.

HOLMES: All right. Alison Kosik, thank you, as always.

And at 23 minutes past the hour, we're now under an hour away from hearing from President Obama. He's going to be making some remarks from the White House about that payroll tax cut extension, the deal that was just struck, and the House and the Senate acting today, passing that measure.

Now the president's going to sign it so your taxes will not go up at the beginning of the year. But this fight has to happen again in 60 days. It's only a two-month extension. But still, for the time being that's what we've got.

So we'll have the president for you live when he does step out here in just under an hour.

This was -- this whole fight back and forth, this was a political gamble by House Republicans. Will they pay the price though for this fight? We're talking about the winners and the losers.

Stay with me.

(COMMERCIAL BREAK)

HOLMES: As we get close to the bottom of the hour, now here's a rundown of some of the stories we are working on.

Next, the battle of the payroll tax cut, it is over. But the political fallout is going to be felt through November.

Also, a brave woman who was beaten when she came to the rescue of another Egyptian protester, she talks to us from her hospital bed.

And then a little later, thousands head to Bethlehem for the holidays, but behind the scenes there's a fight brewing over their tourist dollars.

Meanwhile, something else keeping an eye on -- the White House. Expecting to hear from the president in just over 45 minutes from now, making comments before he heads off to be with his family in Hawaii for their Christmas break.

The president is going to be certainly speaking on what we saw happen today, the House and Senate approving that two-month payroll tax cut extension. You've been seeing that showdown over the past days and weeks. It appears to be finally over. The president is going to sign that before he heads out of town.

We'll have those comments for you when he does step out.

Also, you're going to hear from that Egyptian protester. Have you heard this story yet? And some of the video is just incredible and tough to watch.

She was viciously beaten by military police on the streets of Cairo. She is talking to our Mohammed Jamjoom from her hospital bed. Hear her story.

Stay with us.

(COMMERCIAL BREAK)

HOLMES: All right. Took a bit of political wrangling, but Congress today approved a two-month extension of the payroll tax cut. The action came after House Speaker John Boehner backed off his opposition to a short-term deal approved by the Senate. That cleared the way for the House and Senate to approve the deal by a procedure known as unanimous consent, since a lot of the lawmakers have gone home for the holidays. It means taxes won't go up for 160 million of us come January.

The fight over the payroll tax cut extension was the latest political standoff in Washington. Who are the winners and losers in this battle?

House Speaker John Boehner admits his political calculations might have been a little bit off here.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R-OH), SPEAKER OF THE HOUSE: May have not been the smartest thing in the world. But I'm going to tell you what, I think our members waged a good fight. We were able to come to an agreement. We were able to fix what came out of the Senate.

(END VIDEO CLIP)

HOLMES: Let's talk about this now. Who gets benefits here? Who gets hurt by all of this in the showdown?

Larry Sabato is director of the Center for Politics at the University of Virginia.

Everybody's looking at John Boehner and saying, hey, this did not go well for him. Do you see any group out there that might have looked at Speaker Boehner and thought he was doing the right thing and he won some favor with?

LARRY SABATO, CENTER FOR POLITICS, UNIVERSITY OF VIRGINIA: Well, I think Speaker Boehner knew better. Remember, his original instinct was to do what Senate leader -- Republican Leader Mitch McConnell already knew was the only thing to do, which was to accept this two- month extension as the best possible outcome in this pre-holiday period. Boehner took that back to the House caucus and he had a rebellion among these first-term, very rambunctious Tea Party freshmen. They forced him into this, to a certain degree and, of course, now as the leader of the caucus, he has to bear some of the blame. I do think he knew better.

HOLMES: It sounds like he even admitted that to an extent yesterday. But down the road, are Americans going to remember this come election season or are Democrats going to make sure they remind voters of this whole fiasco?

SABATO: Well, the Democrats certainly will remind people of it. Look, the president had, yes, a short-term victory, a tactical victory, but it was also a near-complete victory. He hasn't had many of those with respect to the Republican House over the last year. If he wants to crow at 12:15, he's entitled to it.

But what really matters is what happens with the extension in February. This agreement only lasts until February. And then it's already obvious that, unless the Republicans want to commit suicide politically, they will agree some way or another to a full-year extension of the payroll tax cut. How they do it, how quickly they do it, whether they whine while doing it, whether there's another big political fight that makes the headlines that gives Obama and the Democrats opportunities to bash their brains in again, that's what matters.

HOLMES: President Obama played this pretty well?

SABATO: He played it very well. He was given a gift by the House Republicans, at least these freshmen. One wonders whether those House freshmen have learned anything. We'll find out in February.

HOLMES: We'll find out in February. It sounds like if all goes well in February, people might forget about this exercise we just went through here at the end of the year. So what was the point of the exercise anyway? This was between Boehner and Republicans. It sounds like there's no real winner, no real loser here. We put ourselves through this for what? SABATO: Well, we'll have to see, again, what happens in February. There could be long-term winners and losers from it. In terms of the optics of the situation, in terms of the election-year positioning, Democrats got a real boost out of it. President Obama got a real boost out of it.

It means that if this same difficulty arises when the extension comes up in two months, people are going to automatically instinctively blame the Republicans, especially the House Republicans. That's not a good position to be in as you approach negotiations.

HOLMES: All right. Larry, sounds like you're saying it all depends on what happens after this 60 days, in the beginning of the year. This gets us through the holidays at least.

You enjoy your holidays. Thanks so much. Good to see you as always, Larry.

SABATO: You, too. Thank you, T.J.

HOLMES: All right, 35 minutes past the hour. And we're just about 40 minutes away from hearing from President Obama, expected to make comments at 12:15 eastern time, live from the White House. You will be able to see those here. He is speaking about this payroll tax cut extension before he heads off to meet up with his family in Hawaii for the holiday.

It is that time of year, many Americans reflect on things they have in their lives despite the obstacles. In this week's "Human Factor," Dr. Sanjay Gupta introduces us to a guy who's an inspiring reminder that despite challenges we can achieve remarkable things.

(HUMAN FACTOR)

HOLMES: Well, she has been brutally beaten but not silenced. The woman in red there, being kicked and beaten, she's been beaten by Egyptian military police. Now she is telling her story to CNN.

(COMMERCIAL BREAK)

HOLMES: Well, Egypt's Tahrir Square, again packed with protesters. They're unrelenting in their demand for the country's military leaders to hand power to civilian rule.

Mohammed Jamjoom is live for us in Cairo.

Mohammed, hello to you. Give us the update about what we are seeing right now in the square.

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Hello, T.J. Actually, just right behind me, there's Tahrir Square, the epicenter of the revolution. Thousands of people are gathered there. These are pro- democracy activist that have come out today in part because of the outrage that they're expressing towards the military council here, the ruling military council, for all of the abuse and beatings that have been suffered by demonstrators in the past week at the hands of riot police and security forces. A lot of these beatings have been captured on tape.

The people that came out today have been chanting a very common refrain that you hear in Tahrir Square, "Down with military rule." They want to see a civilian government put into place here leading this country as soon as possible. They want the Supreme Council of the Armed Forces -- this is the government that stepped in when Hosni Mubarak was ousted -- they want them out. They are frustrated with them.

We should add also, in another part of town, called Apatia (ph), there were thousands of people out today in support of the military, in support of the Supreme Council of the Armed Forces. They were holding up placards saying "No to destruction." What they meant is they believe the military council is really the only buffer as far as this country not facing destruction. They believe that the protesters are bringing ruin upon Egypt -- T.J.?

HOLMES: Mohammed, also, the video is just so disturbing of that female activist being brutally beaten. You had a chance to talk to her. What is she saying and how is she doing?

JAMJOOM: T.J., the first day we went to see her in the hospital, she was in agony. She was screaming out in pain. She couldn't talk to us. Doctors were really worried about if she would improve.

We went to see her yesterday, had an exclusive interview with her. She's doing a lot better. She's still clearly in agony, still very much in pain. But she wanted to tell her story.

(BEGIN VIDEOTAPE)

JAMJOOM (voice-over): Today, Azza Hilal Suleiman is feeling better, and despite the severe beating she sustained just days ago, she's eager to talk.

AZZA HILAL SULEIMAN, EGYPTIAN ACTIVIST (through translation): There's no justice, she says. I don't know how long we'll go without justice. We didn't ask for anything more than to be free in our own country. We've been oppressed by the military, by the Supreme Council of the Armed Forces, and by the police.

JAMJOOM: Azza has reason to be angry. During a crackdown in Cairo's Tahrir Square the 48-year-old activist was rushed by riot police. Seen her in a red jacket, she was trying to help a wounded woman when she was pushed to the ground. Then began the merciless barrage. She sustained multiple blows to the head, suffered two fractures to the skull.

SULEIMAN (through translation): I don't know how much longer they'll continue to kill us, she says. How much longer will they continue to kill us?

JAMJOOM: Azza isn't sure how long it will take for her to recover, but her condition today is visibly better than a day earlier. Then, she couldn't even talk to us, wailing in agony and crying for help. (SCREAMING)

JAMJOOM: Today, she wonders what will happen to her homeland. And even though her late father was a general in Egypt's Army, she can't fathom the tactics security forces are currently using against protesters.

SULEIMAN (through translation): My family isn't like the men in the military now, she says. My family was very decent and pure. What's happening in the military now is dirty -- humans without conscious or mercy or humanity. What right do they have to do this to people?

JAMJOOM: Despite the pain, she endures and the uncertainty she feels, she remains defiant.

SULEIMAN (through translation): I don't know what will happen tomorrow, she says, but I know that we will not remain silent. We won't abandon our rights. We won't leave this country in the devastated condition it's in.

(END VIDEOTAPE)

JAMJOOM: T.J., the Egyptian military says it isn't aware of her case but will look into it. A military official says, quote, "If she comes from a military family, then she reserved the right to be transferred to a military hospital, even if her father is deceased."

In addition, the Supreme Council of the Armed Forces has expressed its, quote, "great regret to the great women of Egypt for the violations that took place" -- T.J.?

HOLMES: All right, Mohammed Jamjoom for us in Cairo. Thank you as always.

And at a quarter of the top of the hour we'll turn back to presidential politics in this country. Mitt Romney getting a big endorsement from a former president. Yes. It's a big blow to the Gingrich camp. Then a whole lot more in your "Political Ticker."

(COMMERCIAL BREAK)

HOLMES: About 12 minutes to the top of the hour now.

Newt Gingrich worked side by side with George H.W. Bush back in the early '90s. Look at that picture. That doesn't mean the former president wants to see Gingrich in the White House.

Joe Johns, live from the political desk in Washington.

Joe, does this have to hurt a little bit for Newt Gingrich?

I don't think Joe Johns can hear. He lost his IFB. We'll get back to that "Political Ticker."

But the story we've been telling you here is that, in fact, yes, Mitt Romney has picked up that endorsement of former President George Herbert Walker Bush. See what that exactly means for Newt Gingrich. A lot of endorsements being tossed around. This one gets a lot of attention for good reason.

I'm told now Joe Johns is ready now.

Joe, you hear me now? Everything all right there in D.C.?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Hey, yes, my IFB went crazy on me.

(LAUGHTER)

It became completely disconnect. It's supposed to happen, T.J. It's our last ticker on CNN.

HOLMES: Is this it?

JOHNS: Something had to go wrong. I think so.

HOLMES: Oh.

JOHNS: It's me and you.

HOLMES: Me and you. This is it.

It's Washington, d. c., crazy things happen. Yes, even IFBs are susceptible to some of the badness in D.C.

JOHNS: Yes. OK, so let's talk about this endorsement. It's not a formal endorsement, right? You get the message that the first President Bush thinks Romney is the guy that needs to get the nomination. He said in a newspaper interview he thinks that Romney is the best choice.

And it's no surprise that the former president would back someone other than Newt Gingrich. This goes all the way back to 1990. This is, you know, light years ago in politics. When Newt Gingrich was in the House minority, President Bush was trying to get a deal on the budget, even though he had made this famous phrase, "Read my lips -- no new taxes." A lot of us remember that.

Democrats demanded increases on existing taxes. And after a big fight, Bush reluctantly decided he was going to go for it. Bush said he thought Newt Gingrich had signed on to the 1990 budget deal, but when it was time to go out into the Rose Garden with everybody and announce it, Gingrich was not there. So former President Bush said he's not Newt Gingrich's biggest advocate and he is getting behind Mitt Romney.

HOLMES: Payback after all these years sometimes, right?

JOHNS: Yes.

HOLMES: Joe Johns, we have to leave it there, I'm told. But I've been a fan of yours a long time. I'm not done talking to you. We will continue our friendship. But still, always good working with you.

JOHNS: Absolutely. Stay in touch.

HOLMES: Sure will. Thanks so much, Joe.

JOHNS: Stay in touch.

HOLMES: Thanks so much.

Coming up in 25 minutes, from D.C., President Obama, from the White House, going to be talking about that payroll tax cut extension. We will have that for you live when he does step out.

Winning -- you all remember Charlie Sheen's meltdown? Also Kim Kardashian's wedding, and Lindsay Lohan and all her court appearances. 2011 has been a banner year for celebrity scandals.

To get us caught up once again, our entertainment correspondent, Kareen Wynter.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Bye, Charlie. We love you.

CHARLIE SHEEN, ACTOR: Thank you.

(SHOUTING)

SHEEN: Thanks for the gift.

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: No, Charlie, thank you for making 2011 a winning year in celebrity news. He put on his awesome display of erratic behavior --

SHEEN: Keep that in mind, phones were built by trolls.

WYNTER: -- on the web and in interviews, most memorably with "ABC News."

SHEEN: I've got to talk about it, man. It's like winning. Can't is the cancer of happen.

WYNTER: Maggie Furlong of HuffPost TV remembers being stunned.

MAGGIE FURLONG, WEST COAST EDITOR, HUFFPOST TV: He was spewing just this absolute crazy, awesome just nonsense to anyone who would listen.

WYNTER: He insisted he was not addicted to drugs.

SHEEN: And I blinked and it cured my brain.

WYNTER: Sheen's verbal spree came in the midst of an epic feud with his bosses at "Two and a Half Men," a dispute that eventually got him fired.

(SINGING)

WYNTER: By refusing to bow to his employers or convention, he turned himself into something of a folk hero, at least in his own mind.

SHEEN: Every great movement begins with one man, and I guess that's me.

WYNTER: But his act began to wear thin when he brought it on the road.

SHEEN: (INAUDIBLE).

WYNTER: What he called his violent torpedo of truth earned as many boos as cheers.

(BOOING)

WYNTER: In the fall, "Two and a Half Men" officially killed off Sheen's character --

UNIDENTIFIED ACTOR: Charlie lived life to its fullest.

WYNTER: -- rebuilding the show around Ashton Kutcher.

UNIDENTIFIED ACTOR: It can't be that bad.

ASHTON KUTCHER, ACTOR: It could be. You don't know.

WYNTER (on camera): Ashton Kutcher soon found himself in the headlines, but for other reasons. Tabloids declared his marriage to Demi Moore was on the rocks and, sure enough, in November, she revealed it was over.

(voice-over): Photos of Demi seemed to show the toll it was taking on her.

FURLONG: She just seemed so frail, so upset, so heartbroken.

(CROSSTALK)

WYNTER: The losing streak didn't end with Ashton and Demi.

UNIDENTIFIED MALE: Picture perfect.

WYNTER: In August, Kim Kardashian tied the knot with NBA player, Kris Humphreys, in a fairy tale ceremony seen by millions.

UNIDENTIFIED MALE: The groom was pretty dapper himself.

WYNTER: But just 72 days later, Kardashian announced the marriage was over, leaving some of her fans feeling the whole thing had been a publicity stunt.

FURLONG: People are really upset. They really do feel duped. And you can't really blame them. WYNTER: Lindsay Lohan spent most of her year walking in and out of court with occasional side trips to the county jail. In January, she was accused of stealing a necklace from a jewelry store. She compounded her problems by failing to keep up with court-ordered community service.

UNIDENTIFIED JUDGE: You needed to get off the stick --

WYNTER: That earned her a stern rebuke from a judge who ridiculed Lohan from the bench.

UNIDENTIFIED JUDGE: I mean, she is supposed to be an actress, from what I hear.

WYNTER: By year's end, Lohan was back on track with her community service and she'd even landed work in the pages of "Playboy."

SHEEN: Everybody wins.

WYNTER: Between the Charlies, the Lindseys, the Kims and all the rest, it was a banner year for the famous says Maggie Furlong.

FURLONG: Celebrities really brought their "A" game in 2011. Can we get a break in 2012?

SHEEN: (INAUDIBLE)

WYNTER: Kareen Wynter, CNN, Hollywood.

(END VIDEOTAPE)

HOLMES: Well, it all happened in a little town called Bethlehem. As the tourists flood in for the Christmas holiday, it is turning out to be anything but a silent night there.

(COMMERCIAL BREAK)

HOLMES: As we get close to the top of the hour, you know it is the season for tourism in Bethlehem. But for many Palestinian tourism officials, the good cheer's fading pretty fast.

Our Kevin Flower explains why.

(BEGIN VIDEOTAPE)

(SINGING)

KEVIN FLOWER, CNN JERUSALEM BUREAU CHIEF (voice-over): It is not hard to tell it is the holiday season in Bethlehem. A giant tree stands in the center of Manger Square. And all around, the sights and sounds of Christmas can be found in abundance.

At the nearby Church of the Nativity, built at the site where Christians believe Jesus was born, visitors around the world gather for this important stop in their religious pilgrimage. UNIDENTIFIED TOUR GUIDE: (SPEAKING FOREIGN LANGUAGE).

FLOWER: They are among the over one million Christian pilgrims who come to the Holy Land each year, and represent the fastest-growing sector in the tourism industry.

(on camera): While the number of tourists visiting Bethlehem is up compared to last year, Palestinian tourism officials say it is hard to get them to spend their money here, sighting what they say is stiff an unfair competition from Israel.

Kholoud Daibes is the Palestinian minister of tourism. She says Israel uses its control of the Holy Land gateways -- airports, ports and land crossings -- to unfairly direct tourists toward spending more time at religious sites under Israeli control.

KHOLOUD DAIBES: PALESTINIAN MINISTER OF TOURISM: We still have 5 percent of the revenue, 90 percent is spent on the Israeli side. This is a very unfair distribution I believe, even for Israel, unfortunately, because they use us only as a bridge to develop tourism into Israel.

FLOWER: Israeli tourism officials down play that criticism, saying increased tourism benefits both sides, and that locations like Bethlehem are an integral part of a religious experience here, which also includes sites in Israel like Nazareth and the Sea of Galilee.

OREN DRORI, ISRAELI TOURISM MINISTRY: We are certainly highlighting and developing the possibilities within the areas which we have control of, but we have no problem with people will go backwards and forwards between those two or three locations.

FLOWER: Back in Manger Square, olive wood merchant, Nabil Giacaman, says there are enough tourists coming through Bethlehem, but the problem is getting them to stay.

NABIL GIACAMAN, BETHLEHEM SHOP OWNER: Most of the groups they come to Bethlehem five minutes inside the church, then they take them to the big shops where they get the commission. The guys and bus drivers, 40 percent commission.

FLOWER: Giacaman says he and other merchants are deeply discouraged, and that both Israelis and Palestinians need to do more to help Bethlehem live up to its Biblical potential.

GIACAMAN: We can make Bethlehem like to this guide. This is what they should do.

FLOWER: The Christmas wish shared by the residents of this little west bank town.

(MUSIC)

FLOWER: Kevin Flower, CNN, Bethlehem.

(END VIDEOTAPE)