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American Morning

Dictator's Death Triggers New Fears; Hillary Clinton Offers Prayers To North Korean People; Your Tax Cut In Jeopardy; Romney, Gingrich In Dead Heat; Snowstorm Slams West, Midwest; Does New Orleans Need National Guard?; Who is North Korean's Next Dictator?; CNN/ORC Poll: Gingrich's Lead Gone; Tax Cut Extension In Doubt; Storm Kills 1,000 In Philippines

Aired December 20, 2011 - 06:00   ET


ALINA CHO, CNN ANCHOR: The dear leader on display. Images of Kim Jong-il's body in a glass coffin. The U.S. still trying to work out whether North Korea will be more dangerous without him.

ALI VELSHI, CNN ANCHOR: Blizzard conditions. Biting wind chills. Travel standstills. A major winter storm is wreaking havoc across parts of eight states.

CHO: And back down to earth. A brand new poll showing Newt Gingrich's lead is gone, on this AMERICAN MORNING.

VELSHI: Good morning to you. It is Tuesday, December the 20th. I'm Ali Velshi joined again by Alina Cho this morning. Good morning.

CHO: Good morning to you. So glad you're with us and up first, the U.S. keeping an eye out for advancing troops and any other threatening moves after the death of a dictator in North Korea.

North Korean media showed images of Kim Jong-il's body laid out in a glass coffin. His third son and successor, Kim Jong-un, paying respects.

Anna Coren is live for us in Seoul, South Korea this morning. Anna, good morning. You know, the South Korean government sending its condolences along with a dose of what some are calling Christmas tree diplomacy. What's that all about?

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: That is right, Alina. The sense of condolence, that is the official wording from the South Korean government. Now this is a real thorn in relations because relations between the two countries really hit rock bottom of late.

It's probably the worst of what these relationships have been for years, but offering sympathies certainly seems to be an act of South Korea reaching out. Reaching out to its northern neighbors, and uses this is an opportunity to perhaps put in place some changes.

So that is what we are hearing. That is what we are getting from the South Korean government. As for the Christmas tree diplomacy that you mentioned, they have decided not to light Christmas trees along the DMZ, the demilitarized zone, which is about an hour and a half drive from where we are here in Seoul.

This is a way of showing respect to the North Koreans following the death of Kim Jong-il -- Alina.

CHO: We have been reporting yesterday that the world really was caught by surprise by the death of Kim Jong-il and the South Korean government getting a little bit of heat for not sort of detecting that this might be coming, right?

COREN: That's exactly right. They were in the dark, just as everybody else was. We've just finished speaking to the head of South Korean intelligence here in South Korea and he said that he grilled the members of the national intelligence service today in an inquiry.

He wanted to find out why South Korea was so in the dark, why there was this lack of intelligence, and what these members told this inquiry was that there was nothing unusual about the way that Kim Jong-il was behaving or that North Korea was behaving.

In fact, they intelligence on him two days before his official death, that he was traveling around the country on these field trip, and that is where they had him. So there was nothing unusual about this travel.

Nothing unusual about his health at that time and then obviously we've now found out that Kim Jong-il suffered that heart attack on Saturday while on a train, but there was nothing different to the way that the government behaved.

To the way that the leadership behave behaved, to the way that the military behaved. So I guess there were no signals. No warning signs that something was actually taking place.

But they also said that no other country, no other countries, like the U.S., Russia, or China, had any idea that Kim Jong-il had died, but obviously, there are a lot of people copping a lot of flak -- Alina.

CHO: Anna Coren live for us in Seoul. Anna, thank you very much.

Secretary of State Hillary Clinton carefully offered her condolences not to any regime or family or political party, but to the North Korean people saying, quote, "it is our hope that the new leadership of the Democratic People's Republic of Korea will choose to guide their nation onto the path of peace by honoring North Korea's commitments, improving relations with its neighbors and respecting the rights of its people."

Her husband, Bill Clinton, was president when Kim Jong-il came into power back in 1994. This is what he had to say.


BILL CLINTON, FORMER U.S. PRESIDENT: What we want is stability, what we want is peace, what we want is for all the children to grow up and do well. And then we need to go back to work and try to reach an understanding with them and I think it can be done.

I've always thought so, but we have to recognize the way the system works over there and try to figure out how they can change it and open up without being considered by the changes.


CHO: President Clinton posed for this photo op with Kim Jong-il when he traveled to North Korea to bring back American journalist Laura Ling and Euna Lee. That was two years ago.

VELSHI: Well, the hopeless dysfunction in Washington means that your taxes might go up in just 11 days. Overnight, a House vote on extending the payroll tax holiday was postponed until this morning.

And now Minority House Leader Nancy Pelosi tells CNN that vote may not take place, because Republicans don't want to have to oppose a tax break for working Americans.

Republican Senator Scott Brown released a statement blasting his colleagues in the House for rejecting the Senate's two- month extension. Here's what he said.

"The House Republicans plan to scuttle the deal to help middle- class families, is irresponsible and wrong. I appreciate their effort to extend these measures for a full year, but a two-month extension is a good deal when it means we avoid jeopardizing the livelihoods of millions of American families."

That's the end of his quote. Republican Congressman Eric Cantor fired back. He said the Senate should return to Washington to hammer out a new deal.


REP. ERIC CANTOR (R), MAJORITY LEADER: Nobody wants those taxes to go into effect. That's what we're here and talking about right now. No one does. I'll tell you, if the Senate doesn't come back into town, they're going to have a lot of answering to do to the taxpayers of this country.


VELSHI: Now, here is what all of this in-fighting could cost you right when you're getting close to those holiday bills. If Congress cannot reach a deal, Americans earning $50,000 a year would be hit with $1,000 tax hike in 2012.

Kate Bolduan is live in Washington. Good morning, Kate. What is happening? We were hearing that there would be a bipartisan deal. It kept getting later and later into the night. What's the situation now?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Well, that bipartisan deal was passed in the Senate that we've kind of been debating this two-month extension, is still out there. But I'll tell you it's unlikely that the House will directly vote on it today.

Instead, the House Republicans have moved to use a procedural maneuver where members would actually vote to reject the Senate measure rather than have to vote to accept or not accept the Senate measure. Why, you ask?

That's clearly a little complex, and appears to be a way to protect House Republicans from having to vote against extending the payroll tax cut and be seen as voting for a tax increase which, of course, Democrats would jump on and try to use to their political advantage, especially in an election year.

So the House -- one vote expecting today and we're also expecting the House to vote and send this whole issue of the payroll tax cut to a conference committee. Another wonderful legislative kind of procedure in Washington where Republicans hope to hash out the differences between, on this issue with Democrats and extending the payroll tax cut -- Ali.

VELSHI: Let's talk about the Democrats now. We know what the Republicans' issue on this. What are Democrats say about it?

BOLDUAN: Well, Democrats are pushing for up or down vote basically on the Senate measure. In Senate Democrats especially they are blasting House Republicans for in their view, they say holding up this bipartisan agreement, which it did get broad bipartisan support in the Senate over the weekend, the vote was 89-10.

Senate Majority Leader Harry Reid issued a statement late last night in part saying it would be unconscionable for Speaker Boehner to block a bipartisan agreement that would protect middle- class families from the $1,000 tax increase looming on January 1st and has said he will not reopen.

He is not willing to reopen negotiations towards this one year extension that they had been trying to negotiate last week until the House passes this two-month extension. So it seems the standoff continues.

You know how we've been talking all along, Ali, there's a general view that something in the end would get done? I'd say there's less of a general view now. Things seem to be really gotten to a point of a staring contest. It's unclear how it's going to turn out.

VELSHI: You've covered this, I mean, you've covered it as long as I have. It's kind of fascinating to watch this. That things seem like they're going -- gets completely derailed. It seems that's the norm now. All right, Kate, thanks very much. I know you'll stay on top. If there's any developments this morning, please bring them back to us because I know our viewers are very concerned about whether they're going to see this money or not next year.

Kate Bolduan in Washington. This is about your paycheck or is it about political leverage? Coming up live at 7:00 a.m. Eastern, Republican Jeb Hensarling will joins us. He is the chairman of the House Republican Conference.

CHO: Politics now, a new momentum had shifted again in the GOP presidential race. Mitt Romney now in a dead heat with Newt Gingrich.

According to a new CNN/ORC International poll, Romney and Gingrich are tied as the Republican's choice for presidential nominee. Both have 28 percent.

Ron Paul, as you see in there, surging a bit with 14 percent, Michele Bachmann, Rick Perry, Rick Santorum and Jon Huntsman, all in the single digits.

I want to bring in CNN deputy political director Paul Steinhauser now. He's live in Washington. Paul, good morning. You know, as you dig deeper into these poll numbers, you know, what are the smart minds saying about why Gingrich is losing support?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Exactly that. Take a look at fine flint our brand new CNN/ORC poll and you can get some answers there.

We asked Republicans and independents leaning towards the GOP, which candidate is more likable? The most likable, well, take a look at this, by about a two to one margin, they say Romney over Gingrich.

What about most trustworthy, again, by a two to one margin, 24 percent to 12 percent, most trustworthy, there are two reasons why maybe Romney's starting to move up and Gingrich sliding down.

Strongest leader, well, they still feel Newt Gingrich is the strongest leader, 42 percent to 26 percent. Now on the campaign trail yesterday in Iowa, Gingrich was asked by our own Gloria Borger, our chief political analyst why his numbers are slipping nationally and in that crucial state of Iowa. Take a listen.


GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Your numbers have been heading in the wrong direction here in the state of Iowa. Can you tell us why?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Watch TV here for two days. You've had all sorts of people and all sorts of these super PACs who have consistently been running negative ads. Well, you get enough negative ads before you start answering them. Your numbers go down for a while.


STEINHAUSER: Well, 14 days left. Two weeks now to those Iowa caucuses, which kick off the primary and caucus calendar, but Alina, can people change their minds?

Yes. Take a look at this from our CNN poll, 56 percent of the people said, you know what, I'm supporting a candidate, but I could change my mind. The 9 percent at the bottom, they're still totally unsure who they're backing. I guess, anything could happen with just two weeks to go until the start of the process -- Alina.

CHO: Well, as Paul Begala likes to say, we're still only in the third inning. It is still early. So going to give people a little bit of a break.

Meanwhile, there's another big endorsement coming out today. Maybe not so big. So who is it? How important is it, Paul?

STEINHAUSER: The group is called the family leader. They're one of the leading social conservative groups in Iowa. You know, in Iowa, social conservative voters on the Republican side are very influential.

This group says they've narrowed it down to four candidates, Bachmann, Santorum, Perry and Gingrich. So stay tuned. We'll see who they back. In a close contest, this kind of endorsement can hurt. No doubt about that. It may help -- Alina.

CHO: Well, always great to get support. All right, Paul Steinhauser live from Washington. Paul, thank you very much.

And later on this morning, GOP presidential hopeful Ron Paul is going to join us to talk strategy and the latest poll numbers. Some people say he could have an upset win in Iowa. That is coming up at 8:10 Eastern Time.

VELSHI: All right, a massive snowstorm slams the west and Midwest. Look at this mess, the storm unleashing heavy snow and fierce winds turning roads into sheets of ice.

Driving conditions are so dangerous. Some areas are forced to shut down major highways. Blizzard warnings remain in effect for five states. Rob Marciano is in the Extreme Weather Center.

Good morning, Rob. You warned us a about this yesterday.

ROB MARCIANO, AMS METEOROLOGIST: It's a big one and in the early season. One as you mentioned highways shut down in New Mexico, Oklahoma, South Eastern Colorado and Kansas. This video out of Garden City, Kansas, since noon yesterday, winds sustained 30 miles an hour with gust it's over 40 at times, that doesn't include the snow.

So they're getting the worst of it and still blasting them right now. Blizzard warnings remain up to noontime for that state. Across New Mexico, we had winds gusting over 60 miles an hour, 70 miles an hour in Clayton, New Mexico. Snow piling up as well two feet in Pie Town, New Mexico

And Oklahoma, ten inches, still coming down. Blizzard warnings to noon for Oklahoma and parts of Kansas, New Mexico and Colorado will see the warnings begin to drop. It's beginning to stretch out some of the moisture getting into the lower great lakes.

Mostly in the form of rain from St. Louis, up to Chicago, but from Chicago over to, say, Cleveland and Pittsburgh, some of it mixes in with wintry precipitation.

But in general as this thing begins to unwind, it will become more of a warm system as we get into the more populated areas in the Midwest and eventually the northeast as well.

We stay on the warm side of the system, 49 in D.C. It will be 46 in New York City and 40 degrees, no major problem expected in Chicago. Guys, back up to you.

CHO: All right. Thank you, Rob, very much. See you later.

It's 15 minutes after the hour. Also making news this morning, AT&T announcing it is abandoning its $39 billion bid to takeover T-Mobile. That abandon bid comes after the U.S. government tried to block it over concerns it would eliminate competition

And ultimately lead to higher phone bills for consumers. AT&T must pay a $4 billion breakup fee. The merger would have made AT&T the largest mobile phone company. It is now second behind Verizon.

VELSHI: CNN's Piers Morgan will testify today at an inquiry into the "News of the World" phone hacking scandal. His appearance before the British High Court will be via video link. And Morgan is the former "Daily Mirror" and "News of the World" editor. Morgan has said he never hacked a phone, told anyone to hack a phone or to his knowledge published a story obtained from a hacking of a phone.

CHO: Candlestick blowout. The lights went out twice during Monday Night Football in Candlestick Park in San Francisco. There you can see it a transformer blow on the left side of the screen there. The huge stadium goes dark in the view from the blimp. The first blackout delayed the start of the game by just a couple of minutes. Then it happened again in the second quarter.

Pittsburgh Steelers also suffered a power outage. Quarterback Ben Roethlisberger played hurt. The 49ers won 20 to 3.

VELSHI: Well coming up next on AMERICAN MORNING, a suspected kidnapper takes off with a young girl. Police finally surround the suspect. We'll show you how it ends. You got a hint right there.

CHO: And he's leaving the sports world for a tryout for Congress. The ESPN sportscaster who says Washington needs someone from the real street.

VELSHI: Like father, like son. We'll take a serious look at North Korea's new dictator. Is he too green to be handling a nuclear power? We'll discuss that.

It's 16 minutes after the hour.


VELSHI: Welcome back.

A young girl is safe this morning after police say she was kidnapped. Now the suspect led police on a slow-speed chase near Los Angeles before pulling over and stepping outside of his car with the 4-year-old girl. That's, of course, you're watching it here. Police snatched the child, wrestled the man to the ground. He was arrested. The young girl was taken to the hospital. She did have minor injuries. We don't know what the motivation was behind this.

CHO: And we'll be watching that.

Meanwhile, a horrific crime spree in New Orleans. A little girl, just shy of her second birthday, shot to death in a drive-by over the weekend. Police say the gunman open fire on a man who ran through a courtyard crowded with children.

Now, one state representative says enough is enough, demanding the National Guards start patrolling the streets. But the governor, Bobby Jindal, says that request is not that simple.


AUSTIN BADON, JR. (D), LOUISIANA STATE REPRESENTATIVE: Crime is spiraling out of control. Everybody's afraid. You know, you can't walk down the street without crimes happening and occurring. The bad guys are running the city right now. We've got to take this city back.

GOV. BOBBY JINDAL (R), LOUISIANA: Again, talk to the mayor at the point he made those comments. We recommend that he actually talk to the mayor to - to coordinate with the mayor, so there's one voice coming out of the city of New Orleans.


CHO: Now, the last time the Guard was called in to patrol the streets was back after Hurricane Katrina in 2005.

VELSHI: Well, for sportscaster, the Texas Senate candidate, ESPN analyst and former NFL player Craig James made a late entry into the crowded race for the seat that is soon to be vacated by Senator Kay Bailey Hutchinson. He's running in the GOP primary this spring as a so-called Conservative outsider. James said he's a self-made businessman from, quote, "the real street." Texas Lieutenant Governor David Dewhurst, Tea Party favorite Ted Cruise and former Dallas Mayor Tom Leopard are also vying for the same seat.

CHO: Still to come on AMERICAN MORNING, the U.S. government is now reacting to a shocking video that allegedly shows an American captured by the Iranians. We'll tell what you the State Department is now saying about that.

VELSHI: And you don't think - you think we don't manufacture in this country anymore. You're wrong. We'll take you to perhaps the most iconic company town in America.

It's 21 minutes after the hour.


VELSHI: Twenty-five minutes after the hour. Welcome back. We're "Minding Your Business" this morning.

Europe's debt concerns and steep losses in the banking sector pushed U.S. markets lower yesterday. The Dow lost 0.8 percent. The NASDAQ and S&P 500 both lost more than one percent to start the week.

Bank of America stock dropped below the $5 mark. That is the lowest level since the low point of the financial crisis. Pushing the banking sector lower, reports that the Federal Reserve is expected to propose new rules this week for how much cash the banks need to keep on hand. The goal is to overt future taxpayer bailouts like we saw during the financial crisis. Critics say the new rules could negatively affect big banks ability to affect loans. Sources tell CNNMoney the proposed rules would apply to about 30 of the nation's largest banks.

In Europe, the eurozone ministers have agreed to lend the International Monetary Fund $195 billion to help with the debt crisis there. There's still uncertainty surrounding the loan because Britain refused to contribute to the bailout fund. And that ejection of cash is less than the $260 billion charge the E.U. leaders were aiming for.

A new partnership may turn up the heat on Wall Street. Firms who get accused of mortgage fraud. New York's Attorney General and the Federal Housing Agency announced that they're joining forces. This will allow them to share documents and findings related to the investigation of the mortgage bubble back in 2008.

Apple claiming its minor victory in its battle against Google Android operating system. The U.S. International Trade Commission ruling the technology behind features like being able to tap a phone number in a text and have it automatically dial belong to Apple. Now, the case was against phone maker HTC which uses the Android operating system. HTC could face a limited ban on some phones starting in April.

And the "New York Times" announcing in advance talk to sell 16 regional newspapers. The deal is reportedly $145 million. The "Times" has been selling some of its assets to focus on its main paper the "New York Times," the "Boston Globe" and the "International Herald Tribune."

AMERICAN MORNING will be right back after the break.


CHO (voice-over): Like father, like son. The 20-something who's inheriting a nuclear arsenal in North Korea, what we know about Kim Jong-un and what we don't on this AMERICAN MORNING.


VELSHI: Welcome back to AMERICAN MORNING. It's 30 minutes after the hour, time for this morning's top stories.

As Alina was saying, the body of North Korea's longtime dictator Kim Jong Il laid out in a glass coffin as weeping mourners filed by. Kim Jong Un, the third son and successor also visited the coffin, along with military officials. Secretary of State Clinton offered her condolences to the North Korean people with a message of hope that they can now have a more peaceful future.

CHO: House Republicans set to block the two-month extension of the payroll tax holiday. That's $1,000 in the pocket of the average American families. A vote now scheduled for today after lawmakers scrapped one in the middle of the night. House Speaker John Boehner expects that bill will fail.

Snow and ice and heavy winds pounding West and the Midwest. The storm causing whiteout conditions, forcing to shut down roads and even major highways. Up to a foot of snow is expected in some areas. Blizzard warnings remain in effect for five states.

North Korea is now in its third generation of dictators. The latest is Kim Jong Un, and he is being called the "great successor" by North Korean news agency. He's only in his 20s and inheriting a nuclear arsenal.

His grandfather was the so-called great leader, Kim Il Sung, eternal president and founder of communist North Korea. Kim Jong Il took over when his father died of a heart attack in 1994. Now, we have his three sons. The youngest, Kim Jong Un, was chosen above his two older brothers, Kim Jong Nam and Kim Jong Chol.

Now, very little is known about North Korea's heir apparent or his ability to lead. What we do know is that he has no military experience.

Brian Todd has more on what may have been his accidental rise to the top.


BRIAN TODD, CNN CORRESPONDENT (voice-over): Kim Jong Il had tried to prepare his son and his country for this day. The elder Kim had elevated profile of his youngest son, Kim Jong-un last year and gave him a rather drastic promotion in the army.

(on camera): He spent no time in the military before his promotion last year?

VICTOR CHA, SENIOR ADVISER, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: As far as we know, he has not spent a day in the Korean People's Army. And yet in September of 2010, he was promoted to the rank of four-star general.

TODD (voice-over): But Victor Cha, who dealt with Kim Jong Il's regime while on President Bush's National Security Council, says what Kim didn't do was prepare everyone for his own sudden death. Now, Cha says, we are left with very little to go on with Kim Jong Un.

(on camera): That's partly because Kim Jung Un is in only his late 20s, but it's also because he's had such a short apprenticeship for this position, compared the 20-something years his father spent preparing for the job.

(voice-over): There are widespread reports that Kim Jong-un went to boarding school in Switzerland and can speak English and German.

He is said to have an affinity for James Bond and Michael Jordan, but that's not going to help him among North Korea's military elite, which may not want to accept orders from someone who is not even 30.

There apparently weren't many options for the dynasty. I asked Cha why Kim Jong Il didn't tap his oldest son, Kim Jong Nam.

CHA: The reports are he came into great disfavor with the leadership because of his lifestyle. He tends to be a bit of a playboy and likes to gamble, keeps a condo in Macau.

TODD: According to analysts quoted on diplomatic cables posted on WikiLeaks, the second oldest son, Kim Jong Chol, was considered too effeminate to be a strong leader, so it fell to the youngest son.

Analysts say the plan was for the late leader's brother-in-law, Kim Jong-un's uncle, Chang Sung Taek to be a key player behind the scenes while the younger Kim solidifies his leadership. Chang Sung Taek is married to Kim Jong Il's sister, Kim Kyong Hui, who is a general in the army.

But analysts say there are rumblings that she is sick.

(on camera): Are we seeing the beginning of the end of the Kim dynasty?

CHA: I think we are. You know, I think that this regime is really on its last legs. I could not imagine a more difficult scenario to affect a leadership transition than what we are seeing today.

TODD: What worries Cha right now: the possibility of so-called loose nukes. With so much uncertainty at the top, he says, some rogue elements of the military might take control of the country's fast developing nuclear weapons capability.

Brian Todd, CNN, Washington.


VELSHI: Lots to learn about North Korea. I mean, the hermit kingdom that it may be, there are these disparate things that we need to be concerned about. It's never clear. Do we think that the ascension of his son is a good thing that will continue this relative calm that might be developing into a detente and peace with the West or like he said, rogue elements or competitors --

CHO: I think the biggest problem is we just don't know anything about him. You know?


CHO: And so, we'll have to wait and see if more trickles out of the country. The information is so regulated. You never know what will happen with that. So, we'll be watching that.

Meanwhile, violent clashes in Egypt to tell you about.

VELSHI: Police and military troops faced off with protesters in Tahrir Square again yesterday. At least two protesters were killed, and this brings the death toll to 14 since Friday. Live ammunition injuring hundreds of others and images of a woman getting stomped on by military officers over the weekend fueling outrage among the pro- democracy protesters.

CHO: Syria says it will execute anyone who participates in terrorist acts or distributes weapons. That announcement made on state TV just this morning. The government blasted numerous protests since the start of the so-called Arab Spring. The United Nations estimated some 5,000 demonstrators have been killed in those uprising. Just yesterday, 70 defectors from the Syrian army were gunned down as they ran from their posts.

VELSHI: U.S. State Department now confirming the identity and asking that a man in Iranian custody be released. Over the weekend, he appeared in a video on Iranian TV claimed to be a Marine, but Iran says he's a spy. He was captured carrying out an intelligence operation.

U.S. officials say Iran has a history of falsely accusing people of being spies.

CHO: Coming up, a new poll shows that Newt Gingrich's lead in the GOP presidential race is already evaporating. So, what's going on? Our political expert will weigh in, next.


CHO: Welcome back to AMERICAN MORNING.

The Iowa caucuses now only two weeks away. And the latest polling shows Newt Gingrich's status as the GOP presidential front- runner already slipping.

In a new CNN/ORC international poll, Gingrich and Mitt Romney are now tied with 28 percent. Ron Paul on the rise with 14 percent. And trailing behind in single digits, Michele Bachmann, Rick Perry, Rick Santorum and Jon Huntsman.

Here to weigh this morning is Ron Brownstein. He's the CNN senior political analyst and editorial director of "The National Journal."

Ron, good morning. Glad you're with us.


CHO: You know, there's a very important number in that poll. We want to show it to you.

Fifty-six percent, if you look there -- 56 percent, more than half, say they still might change their minds. Now, I know people like to say we're still in the third inning -- Paul Begala being one of them.

But we have had 13 debates. The candidates have been out there. The Iowa caucuses are now exactly two weeks away. I mean, what does that say to you, that people, so many, are still undecided?

BROWNSTEIN: Well, this is extraordinary. I mean, you haven't had anything like this since at least 1964. You go back to 1964 to find a Republican race where this many candidates were ahead at one time or another in the polling in the year before the vote.

And it really says above all that no candidate has truly captured the imagination of the GOP, particularly crossing the basic divide between the more conservative, ideological and populist wing of the party and the more managerial, pragmatic, economically-focused wing of the party.

In your CNN polling, until this new poll actually, Newt Gingrich has a slight lead among both wings. Basically no one has been ahead on both sides of the party at the same time, except Rick Perry for a few weeks in late summer.

CHO: I mean, if you're the GOP establishment, I mean, aren't you concerned? Is there still a possibility that -- I mean, people got really excited for a while about Governor Chris Christie, for instance.


CHO: I mean, is it possible something else could jump at this point?

BROWNSTEIN: Well, you know, we really haven't seen anything like that in the long time, but it doesn't seem impossible. Unlikely, yes. Impossible, no.

As I said, I mean, if anything, the race seems a little more in some ways, fragmented now than it did a year ago. The GOP race this year has been very volatile. If it makes sense, it's been volatile in a structured way, in that if you look that more moderate, pragmatic side of the party, they have been moving towards Mitt Romney. And the volatility had been that the more conservative part of the party, it cycled through a whole series of alternatives, Michele Bachmann, Rick Perry, Herman Cain, trying to find an alternative to Romney.

Now, you have a race between Mitt Romney and Newt Gingrich and superficially, you've seen the right consolidating around Gingrich, in the same they are around those other candidates earlier. But he's not an easy fit for the voters either.

And ideological consistency is very much breaking down in your new poll. It's the best showing for Romney among the Tea Party since last June, for example, in the poll you put out yesterday.

CHO: Well, and this probably will come as no surprise, but I think part of the reason we're seeing, according to our poll, that split, is people tend to like Mitt Romney more but they see Newt Gingrich as a stronger president.

And there's one more poll I want to look at. I know this jumped out at you, too. This is how much Gingrich and Romney support comes from the Tea Party. You have a look here -- 32 percent for Gingrich, 28 percent for Romney.

Now, you know, I think when you really drill down and look at that number, what's interesting about that is the Tea Party has always been so firm in their ideas, so emphatic in their support of candidates. I mean, what does it say to you that even the Tea Party can't decide?

BROWNSTEIN: Well, I think that is really striking. As I said, if you look through the year, the Tea Party, which is roughly half the party, has been looking for an alternative to Romney. He has not previously, Alina, in your polling, been about 19 percent with the Tea Party folks since last June. The fact he's up to 28 percent in a new poll I think is the single most significant number in your survey and it shows the ideological confusion in the race.

The Tea Party has been left with Newt Gingrich as its last alternative to Romney. But as I said, he's not an easy fit for those voters either. I mean, he's voted for amnesty for illegal immigrants in the 1980s. He supported an individual mandate on health care in the 1990s, and he talked about action on climate change in this decade.

So, you see those voters kind of casting around, maybe in Iowa and New Hampshire where they're being exposed more directly to argument. You could see more of them go back towards Michele Bachmann or Rick Perry. But at the national level, the choice is less clear for them, I think, with Gingrich/Romney race than it was in earlier points in this contest. And all of that confusion is making this an extraordinarily volatile Republican race as we head into the voting, maybe even less defined than it was six or eight months ago.

CHO: And fun for us to watch in the media, of course.

BROWNSTEIN: Yes, incredible really.

CHO: You know, let's talk bottom line here because, you know, ultimately, when you look at all of the polling that we've done, who benefits the most from it? Is it ultimately Romney, who sort of has had a slow but steady campaign --


CHO: -- and now it seems to be working? Or is it someone like Ron Paul who we saw surge in this latest poll? Let's say he has an upset win in Iowa, you know, does Gingrich lose because he's knocked -- suddenly knocked out of the top tier?


CHO: I mean, drill it down for us.

BROWNSTEIN: Well, look, I think the beneficiary of the chaos, if there is one, is clearly Mitt Romney. He faces the reality that he has not been able to persuade -- he's been the front-runner initially. There's not a majority in the party that wants to nominate him.

But the core story of the whole year has been that majority skeptical of Romney has not been able to lastingly consolidate around another candidate. We've gone through as I said Bachmann, Perry, Cain. Gingrich had a moment where he seemed to be consolidating that vote and also reaching out into the middle.

But, now, you have the question of whether a national poll like this is a lagging indicator, because in a state like Iowa where they're being exposed to more direct anti-Gingrich arguments, questions about his work with Freddie Mac, for example, his numbers seem to be declining.

If no one emerges and consolidates the more conservative part of the party, which is entirely possible. For example, as you suggest, if Ron Paul wins Iowa or for Gingrich to consolidate those conservatives, then the beneficiary could be Romney who could become in effect a plurality nominee. The winner, even if he never gets a majority of the party to say, yes, that's my guy.

CHO: Ron, at a certain point, voters are going to start thinking about the general election and who they believe is more electable. And so, anyway, watching it all for us, Ron Brownstein, CNN senior political analyst, editorial director of "National Journal." Ron, thanks.

BROWNSTEIN: Thank you.

VELSHI: Good discussion, Ron, as always.

Forty-six minutes after the hour. Caterpillar, the leader in heavy equipment, it's made all -- it's all made in the United States, providing Americans thousands of jobs. Poppy Harlow takes us inside the manufacturing power house straight ahead. It's 46 minutes after the hour.


RICHARD BLAIS, CHEF: Hi. I'm Richard Blais, and I'm chef here based out of Atlanta. I probably clock around 130 miles just this year. I'm a chef with many restaurants here in the southeast and might know me from "Top Chef." So, this is a day in the life, Richard Blais, traveling. One of the things that I have to pack is knives. It's like my lifesaver, if you will.

These are great headphones. Even if I'm not listening to music, I can pretend that I'm listening to music. No one usually, usually will bother you. I like to drink carbonated water. That's my thing. This is a gadget that carbonates your own water. If you're a modern chef like myself, I travel with many miscellaneous white powders. It's important that their labeled, so that everyone kind of understand what they are.

The most important thing for me is hair product. Of course, this is the magic maker right here. I have a wife and two young daughters. The way we state in touch is face time on iPhones, usually, and that's kind of neat.

What did you think about the hair?

It really enables us to feel like we're together, even though we're thousands of miles apart. So, thanks for hanging out with me and spending some time. I'll see you at one of my restaurants soon or at an airport near you.



VELSHI: Forty-nine minutes after the hour. Here's what you need to know to start your day.


VELSHI (voice-over): The body of North Korea's long-time dictator, Kim Jong Il, laid out in a glass coffin as weeping mourners filed by. Kim Jong Un, Kim's third son and successor, also visited the coffin along with top military officials.

House Republicans are set to block a two-month extension of the payroll tax holiday, the $1,000 in the pocket of the average American family over the course of a year. A vote now scheduled for today after lawmakers scrapped one in the middle of the night.

Newt Gingrich's lead is gone. A new CNN/ORC international poll shows Gingrich and Mitt Romney are tied as the Republicans choice for presidential nominee. Both have 28 percent. Gingrich had led by as much as four percent last month. Only two weeks to go before the Iowa caucuses.

The Philippines declares a state of national calamity after tropical storm, Washi, kills nearly a thousand people. Washi swept through over the weekend destroying property and leaving tens of thousands of people homeless. President Obama has offered deep condolences and pledged humanitarian support.

A wild snowstorm reaping through the West and the Midwest. The storm unleashing snow and strong winds, dangerous ice causing some areas to shut down roads and major highways like Interstate 40 in Mexico. Blizzard warnings remain in effect for parts of New Mexico, Colorado, Kansas, Oklahoma, and Texas.


VELSHI (on-camera): That's the news you need to start your day. AMERICAN MORNING is back right after this.


CHO: Fifty-two minutes after the hour. Welcome back to AMERICAN MORNING. While we see the stamp all the time made in China, and that has a lot of folks asking, is there anything made in America anymore?

VELSHI: CNN's Poppy Harlow visited one of the most iconic company towns in the United States. Peoria, Illinois, which is home to Caterpillar. It turns out much of what they produce here in the United States actually goes overseas.


UNIDENTIFIED MALE: We're just some proud Caterpillar workers here.

POPPY HARLOW, CNNMONEY.COM (voice-over): When it comes to company towns -- this just may be the most iconic.

UNIDENTIFIED MALE: You can't come across anybody right here in Central Illinois that doesn't, at least, have a friend or a family member that works for a Caterpillar plant.

UNIDENTIFIED MALE: This job, this money puts food on the table, going to send our kids to college in the future.

HARLOW: Fred Shaw's (ph) parents both worked at Caterpillar, and he hopes his son will one day, too. As the saying goes around here, they bleed yellow.

UNIDENTIFIED MALE: This is a motor grader.

HARLOW (on-camera): I'm almost sick of hearing it. We don't make anything in America.

DOUG OBERHELMAN, CATERPILLAR CEO: Yes, yes. Me, too. People say we can't do it here. We can do it here, and we do a lot here.

HARLOW (voice-over): In March, Cat's CEO, Doug Oberhelman, sent this letter to Illinois governor, Pat Quinn, calling the state unfavorable to business saying he's been courted by governors to move Caterpillar elsewhere.

OBERHELMAN: Illinois has its share of problems. There's no question. When other states in the U.S. don't have a corporate tax rate or lower, it just makes it tougher for us to draw people here.

HARLOW: Deep in the red, Illinois raised its corporate tax rate this year, making it the fourth highest state tax for businesses. One Caterpillar employee told me he's not confident that more plants, new plants, will be built here in Illinois, unless, the environment changes.

OBERHELMAN: I think that's true. I think, you know, given the competitiveness of states around the country, Illinois got to make some really fundamental changes to be competitive, and I think they will.

HARLOW: For now, Cat's staying. And building more demand from abroad.

OBERHELMAN: Seventy percent or so of our sales are non-U.S.

HARLOW (on-camera): From Uruguay to Australia to Egypt, 82 percent of these D-11 tractors are exported outside of the United States for two million bucks a pop.

TANA UTLEY, CTO, CATERPILLAR: It's not a threat. It's an opportunity. Buy that globalization, buy those sales overseas, we are guaranteeing the future of Caterpillar and the future of engineering jobs here and overseas.

UNIDENTIFIED MALE: We're going in China. We're going in -- we're going everywhere. But, we're upgrading facilities in America. We're building new facilities in Texas. We're upgrading our facilities in Illinois. all of that business is helping us here.

HARLOW: Why is it good for America to be creating things over there?

OBERHELMAN: A lot of that engineering, a lot of those components, most of the intellectual property, all come from the United States, because this is where we were born and raised.

UNIDENTIFIED MALE: It's a blessing that we have such a demand for tractors that, you know, our jobs are pretty safe right now.

HARLOW: And do you mind that the demand is coming from overseas?

UNIDENTIFIED MALE: No, I don't mid. Money's money.


HARLOW (on-camera): Money's money, and that money means jobs. Caterpillar's CEO told me, look, we need China as much as they need us. He did say to me, look, though, as demand and business picks up in China and overseas, our production will pick up there. That is the reality. What's interesting, and I think, Ali, you've certainly seen this is, in terms of manufacturing in this country, so much of it has moved to the south.

VELSHI: Right.

HARLOW: It's moved to right-to-work states, non-union shops, which is something that we're seeing also at Caterpillar. You heard him saying unless the environment changes in Illinois, he doesn't --

VELSHI: They've got the wages and they've got the taxes. You know, at some point, when everybody else buys your products, they start to insist that if, you know, China is going to continue to buy Caterpillar products, Caterpillar needs to have facilities there, and this is how it goes around the world.

HARLOW: This is how it goes around the world, but you know, those tractors, we pointed out, the D-11s that are shipped all over the place, they're two million bucks a pop. And that money creates jobs in the United States. We can't forget it. We took a look, and we'll show you this on CNNMoney, how to build the $ 2million tractor, how to build it in just a few days, ship it out, a fun luck (ph) there.

You can see Fred and employer there -- what goes into making these things. We're glad to see those good paying jobs in this country and sick of hearing people say we don't make anything in this country.

VELSHI: Excellent story, Poppy. Thank you.

CHO: Thanks, Poppy.

Ahead in the next hour, the rise of Ron Paul. Have you noticed what's been happening in the polls? We have. The oldest candidate in the race at age 76 connecting with the youngest voters and threatening in Iowa. Could it happen? We'll take a look at the Ron Paul factor and then talk to him in our eight o'clock hour. It's 56 minutes after the hour.