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American Morning

House Rejects Senate Bill to Extend Payroll Tax Cuts; Presidents Polls Numbers Improve; Insider Trading in Washington; Obama Slams GOP For Rejecting Payroll Tax Plan; Holiday Travel Whiteout; Joint Chiefs To Iran: Don't Push It; Campaign: Family Group Wanted Bachmann Out; Bachmann Barnstorms Iowa; U.S.: Iran Playing Dangerous Game; 46 Percent of November Home Sales Were Distressed; Worst Deliveries Caught on Tape

Aired December 21, 2011 - 06:59   ET



BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not poker. This is not a game. This shouldn't be politics as usual.

JOHN BOEHNER, (R-OH) HOUSE SPEAKER: Now, it's up to the president to show real leadership.

ALI VELSHI, CNN ANCHOR (voice-over): Tax cuts left in limbo. President Obama and the House Speaker going back and forth as Congress skips town. Your paycheck in line take a hit when those holiday bills come around.

CHRISTINE ROMANS, CNN ANCHOR (voice-over): And deadly whiteouts. Snow drifts ten feet high, holiday travel totally halted, a blinding winter storm moving out, but guess what? Another one's moving in.

VELSHI: And a warning for Iran. A top U.S. general says Iran is playing a dangerous game that could force the U.S. into another nuclear arms race. We've got his exclusive interview.

ROMANS: And Congresswoman Michele Bachmann is here. She says she's the only consistent conservative in this race. So, why does the leader of one faith group allegedly want her out? We're going to ask her on this AMERICAN MORNING.


VELSHI: Good morning. It is Wednesday, December the 21st. I am reminded it's the first day of winter.

ROMANS: It is the first day of winter, that is true. But it's been snowing in the northeast since Halloween. So there you go.

VELSHI: Good morning.

ROMANS: Good morning. First, House Republicans and the president are playing the blame game this morning. Right now Your money and paycheck caught in the middle of all of this. We're just 10 days away from the payroll holiday tax expiring. That means your taxes could go up by about $1,000 next year. Yesterday President Obama slammed Republicans for not accepting the Senate's bipartisan two-month extension. The House speaker, John Boehner, hit back, suggesting the president convince senators to return from their Christmas vacation to hammer out a new deal.


BOEHNER: Now it's up to the president to show real leadership. He said that he won't leave town for the holidays until this bill is done. The next step is clear. I think President Obama needs to call on Senate Democrats to go back into session, move to go to conference, and to sit down and resolve this bill as quickly as possible.

OBAMA: The clock is ticking. Time is running out. If the House Republicans refuse to vote for the Senate Bill or even allow it to come up way vote, taxes will go up in 11 days.


ROMANS: All right, so let's go straight to Washington, where our Kate Bolduan is standing by live. Kate, good morning. Taxes will go up for millions of workers who might not even have felt the extra money in their paycheck this year. That was kind of the point, to get it in the paycheck and out into the economy. But they but would certainly feel it if it comes out?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Especially with all this attention on it right now you can be sure they'll feel it come January 1st. Christine, the House used a procedural maneuver to reject the Senate's two month extension yesterday. And Senate Majority leader Harry Reid says he won't reopen talks until the House passes that short term extension, though.

As one top Democratic source said, "We handed the football to the House, and House Republicans fumbled it." So the staring contest really continues.

And while it's quite unclear how this is going to play out, here are some of the more obvious options, of course. House Republicans could decide to accept a short-term extension like the one passed in the Senate, extending the payroll tax cut for two months. Most House members left town, as has the Senate and House Republican leaders taken a pretty hard stance on that as we now know.

So the other option, the House and Senate could somehow break the log jam and find common ground to extend the tax cut one year. Leaders on both sides say they prefer that be in conference, though that's unlikely. Or some other negotiation, you pointed out, Christine, they could just fail to agree and the tax code expires January 1st and the tax increase two percent.

ROMANS: Senate John McCain is saying the pay roll tax dispute, the entire debacle, is hurting the Republican party. Listen.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN, (R) ARIZONA: It is harming the Republican Party. It is harming the view, if it's possible anymore, of the American people about Congress. And we've got to get this thing resolved.


ROMANS: Do you know, are Republicans in Congress worried about damaging their own party, especially, you know, an election year coming up?

BOLDUAN: Yes. Good to point that part out, the election year aspect of all this. House Republicans are definitely taking the heat from both sides, not only the expected pressure from the White House and Senate and House Democrats, but also from Senate Republicans. And John McCain is not alone. Other Senate Republicans are calling the House move yesterday irresponsible, quite frankly.

So Senator John McCain may just be saying publicly what more Republicans are saying privately. And not surprisingly, there's a political calculation for both sides in this standoff. No matter how it ends up, neither side wants to be seen as blamed for this gridlock or holding up a tax break. So no matter how it plays out, definite political positions as we get closer to January 1.

ROMANS: Kate Bolduan in Washington, thanks.

VELSHI: I'm already getting tweets saying it was the first day of winter. We always get into this on the 21st, 22nd. People say the 22 is really the first day of winter, because it happens today or something? I'll ask Rob about this.

First, there's winter weather out there. Whether or not you think it's the first day or not, a deadly and blinding storm winding its way through the Midwest. Forecasters are saying the pre-holiday travel may still be close to impossible in many areas. The storm has left a sheet of ice and two feet of snow in some areas. Take a look at Kansas here. Highways are closed, cars stranded across five states. This is highway 50 in Kansas yesterday. Winter storm warnings up against today as another storm moves in.


ROMANS: It's tough being on top. Just ask Newt Gingrich. He watched his lead evaporate last week and on the campaign trail on Iowa. And in a town called Mt. Pleasant, of all places, a guy cursed him on camera. Take a look.


NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: It's a free country. That's your opinion.


VELSHI: And in another blow to Gingrich, Rick Santorum, who's placed all his chips on winning the Iowa caucuses, has just won the backing of leaders of an influential conservative group in the state. The president of the Family Leader throwing his support behind the Senate for the nomination. The group reportedly had been torn between supporting Gingrich or Santorum. And there's a little controversy in there we'll talk to the leader of the group about.

ROMANS: That's right, because Santorum's backing coming with a backstory after the "Des Moines Register" reported the Family Leader asked for money in return for its influential backing or in conjunction with its influential backing. A Santorum spokesman said his campaign made no deal with the group. Bob Vander Plaats said the Family Leader only asked for cash so it could help promote the candidate and its endorsement, not because it was trying to sell its support.

Basically Meantime, Congresswoman Michele Bachmann's campaign said the family leader asked her to consider getting out of the race. But the Bachmann race said they didn't even consider it.

ROMANS: We'll talk to Congresswoman Michele Bachmann about her campaign's claim the Family Leader wanted her out and about her chances in Iowa in two weeks. She had a very strong showing in the summer. She'll join us live at 7:30 eastern. And at 10:00 eastern, Bob Vander Plaats, president of the family leader, a lot to talk about, what happened with Michele Bachmann? Was there cash asked for in exchange for support? Why Rick Santorum? It's all about an hour away.

VELSHI: And new poll numbers are bringing some Christmas cheer to the president. His approval ratings are on the rebound flirting with 50 percent, which means his reelection chances are getting better. A brand new CNN/ORC poll showing 49 percent approve of the job he's doing at president. That is a five-point boost in a month.

CNN deputy political director Paul Steinhauser is live in Washington. He's been studying the numbers. Paul, the news gets even better for the president in matchups against some of the potential GOP opponents that he may have to face.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: You're absolutely right, Ali. So let's get right to the numbers. This is the CNN/ORC national poll. Hypothetical matchup with the president against possible Republicans who may be the nominees, look at this, the president in the new poll, seven-point lead over former Massachusetts governor Mitt Romney. Last no on our poll, Romney actually had a four-point margin over the president.

What about the president versus Newt Gingrich, the former House speaker? Look at this. Actually, this is Ron Paul. Let's do this one instead first. The congressman from Texas, a seven-point advantage, lead, for the president. Last month, the president only had a four-point advantage over Paul.

And what about Gingrich, that's next -- a 16-point lead. That's a big one for the president over the former House speaker. Last month he only an eight-point lead over Gingrich. So what's behind the rise in the numbers and approval rating numbers you were talking about a moment ago, Ali? I think, Kate Bolduan was talking about it a few minutes ago, this battle over extending the payroll tax cut. Democrats have been very successful in trying to taint Republicans as maybe beholden to the wealthy and not the middle class. That may be a contributing factor to this rise in the numbers.

Ali, remember, people change their minds. Polls change. The general election is 11 months away.

VELSHI: At what point do these polls start reflecting the view of Americans who are really thinking about voting in that election? In other words, you can ask anybody anything in December before the election. When do they start to match up to election results?

STEINHAUSER: A lot closer to the election, a lot closer. I'm not discarding these numbers at all, but you have got to get closer to the caucus. Anything can happen between now and then.

VELSHI: The numbers are relevant for now. The question asks, if the election were held today.


VELSHI: So they're definitely informative. Good to see you, my friend.


ROMANS: New this morning, the family of an accused U.S. spy captured in Iran says these allegations are simply untrue. Amir Hekmati is a former U.S. marine. This week Iranian officials aired video of him confessing to being a trained CIA spy. But Hekmati's family says that confession is obviously false and is likely coerced. They say he was in Iran visiting his grandmother.

The U.S. talks with North Korea for the first time since the death of leader Kim Jong-il. A State Department spokesman says it was technical discussion about how the U.S. could provide food aid to North Korea. Officials say further discussions will mostly likely be put on hold because the period for mourning for Kim Jong-il runs through next week.

ROMANS: Bird flu research may be censored. Researchers agreed not to publish a study that describes the genetic changes needed to spread the virus easily. U.S. officials wanted to keep it secret for security reasons. Meantime, a chicken carcass tested positive for the avian flu in a market in Hong Kong. The market was declared an infected place. The government is working to trace that chicken's origin.

VELSHI: Still to come this morning, members of Congress accused of insider trading, getting rich doing the same thing that would send you to jail. How prevalent is this and is anything being done to stop it? ROMANS: A top U.S. general has a blunt warning for Iran, and he's talking exclusively to CNN. General Martin Dempsey is saying Iran is playing a very dangerous game. That exclusive interview is ahead.

VELSHI: And Congresswoman Michele Bachmann joins us live. We'll talk about whether she can still win in Iowa. You're watching AMERICAN MORNING. It's 13 minutes after the hour.


ROMANS: All right. Welcome back.

Some in Washington are accused of getting rich by doing things that might get you in some serious trouble otherwise. Hedge funds reportedly setting up meetings with lawmakers to discuss legislation. They're then trading on information that you don't have access to, and they're making money from the outside it certainly looks like something that's called insider trading.

VELSHI: Or it may not be.

Joining us now is Henry Blodget. He's a former top stock analyst who is banned from Wall Street --

ROMANS: We always have to say that, Henry.

VELSHI: We have to say it (ph). Henry's used to it. He's heard it before. To be named in an SEC complaint about conflicts of interests a few years ago. He's now the founder and editor-in-chief of "Business Insider." Henry, good to see you.


VELSHI: So this is that little gray area, which may not be great to some people. What is it we're talking about here? What are these hedge funds doing that some people think might feel or look or smell like insider trading?

ROMANS: With the people who are working for us. That's what kills me. This information called by the people working for us that other people are making money off it.

BLODGET: There are two things. Both have come out over the last (INAUDIBLE). One is actual Congress people trading on information --

VELSHI: Right.

BLODGET: -- that they're getting in the course of their jobs, during the financial crisis, running back to their office, doing trades on the market base and private briefing.

ROMANS: And this is what's happening.

BLODGET: This is certainly what appears to have been happening based on a book that came out about a month ago.

Then the second that "Wall Street Journal" wrote about yesterday is hedge funds meeting with senators and Congress people to figure out what they're going to do then they go trade based on what they learn, which both of those are things that --

ROMANS: So we know what hedge funds get out of these private meetings, right? Hedge funds, their job is to go out and get as much information as possible --

BLODGET: Absolutely.

ROMANS: -- and they're very clear about it. But what do the Congress people get out of it? They're not getting paid for taking these meetings. So why are they --

BLODGET: I would say two things.

ROMANS: -- why are they giving this information freely to hedge fund investors?

BLODGET: What they would say is we want to know what these powerful people in our society think. And, of course, we're trying to come up with legislation that works for everybody. These are important constituents. We have to know what they're thinking.

I assume that they're also thinking -- and by the way, these are rich folks, have a lot of money to donate to campaigns --


BLODGET: -- everything else. So it's money and information.

VELSHI: So the -- but the idea here is that if everybody has access to the same information, we can all make our choices as to whether or not we invest in them. The concept of insider trading is trading knowing something ahead of everybody else, and it's -- it's relatively narrowly defined. So are these things that are happening, do you think they're illegal?

BLODGET: I think they're probably outside the current definition of insider trading law, which usually has to do with inside information at companies.

VELSHI: Right.

BLODGET: And yet you don't need a Ph.D. to say, when a huge piece of health care legislation is being voted on --

VELSHI: Right.

BLODGET: -- it's going to affect every company in the industry. If you have an advanced tip --

ROMANS: Yes. BLODGET: -- on what that decision is going to be, you know what's going to happen with the companies and you can trade on that. And any reasonable investor would want to know that.


BLODGET: So I think that at the very least it has to be looked at.

ROMANS: So let's look at a study performed by business professors that shows just how well members of the House beat the market by six percent annually. Senators beat the market by 10 percent annually. So are they just lucky? Are they smarter than the rest of us?

VELSHI: They have good financial advisers.

ROMANS: Or is all of this sort of part of this machine of information that helps these -- these members and senators out?

BLODGET: Given that there are lots of smart people in lots of professions in addition to Congress, I think you would have to conclude that there is some edge there that they have.

And it's no mystery based on the book that came out a couple months ago about how you trade, and Representative Spencer Bachus, for example, who are talking about going into a private briefing with the Treasury Secretary. What's happening to the economy? Immediately running out and making trades. And his excuse was, a fool could have seen that the economy was headed into doldrums.

What I would ask as a citizen is do we really want our senators and representatives rushing back to their offices to trade on their private accounts based on what they're hearing in private meetings.

VELSHI: What do you do, though, to remedy that? In other words, either you have a rule or you don't. And then if you're -- if there is no rule and you're doing something, then you're outside of having committed some sort of a crime.

How do you -- whether it's journalists in private briefings with people or congressmen, how do you --

ROMANS: We don't rush out and trade on something.


BLODGET: In fact, I'm sure there is a policy that --

ROMANS: No way.

BLODGET: -- you cannot trade in companies that you talk about. It certainly can't short them, which is why we (INAUDIBLE).

ROMANS: Well, you can have an overall opinion of where the market is going but you -- VELSHI: But, Christine, if you got private -- if you got information at a briefing and you did trade on it, it wasn't coming from a company, it was about a policy thing, that's not actually against the law.

ROMANS: No. Right. But you'd go write a story about it is what you'll do. That's the difference.

VELSHI: We don't trade (INAUDIBLE).

BLODGET: I would make two points. One, if this happened in a corporation, Washington would be --

VELSHI: It will be very clear. Right.

BLODGET: -- screaming bloody murder about how deep the corruption is --

ROMANS: Oh, yes, yes.

BLODGET: -- have to change the law, and everything else. Two, what a corporation would say is it's the appearance of wrongdoing.


BLODGET: And, boy, is there an appearance of wrongdoing here. It's just amazing to me that people feel that that's OK, that you can have a private briefing with the Treasury Secretary and then run off and make trades and then defend it by saying, oh, anybody would have known.

VELSHI: Is there some remedy out there? Is there something that somebody is saying we should do to fix this? In other words, if you're a legislator and you're in a room or you work for a legislator and you're in a room with somebody and you get information that is not publicly disseminated, you should not be allowed to trade on it?

BLODGET: I think quick public disclosure of any trading would help --

VELSHI: Right.

BLODGET: -- and the fact that there's any lightening shined on it right now will help. And --

ROMANS: Right.

BLODGET: -- the SEC has to look at this as to whether a hedge fund can meet with a legislator right up ahead of a vote --

VELSHI: Right.

BLODGET: -- and whether that should be considered inside trading.

ROMANS: And just like insiders in companies have to every quarter, maybe -- maybe these guys and women should have to say what they're doing every quarter, although since they can't agree on any legislation right now --

VELSHI: Right.

ROMANS: -- maybe -- maybe they're not making --

VELSHI: I don't know what the --

ROMANS: -- they're not making any trades, because they can't get anything to add (ph).

VELSHI: The bet is right now -- the bet is no one's going to vote on anything and nothing's going to get done.

Henry, great conversation. Good to see you.

BLODGET: Great. Thank you very much.

ROMANS: Thanks, Henry.

VELSHI: Henry Blodget is founder and editor-in-chief of "Business Insider," a former Wall Street analyst.

All right. Still to come this morning, Congresswoman Michele Bachmann joins us live from the campaign trail. She said she's the only consistent conservative in the race. And her campaigns say the leader of a key faith group wants her out of the race. We'll talk to her about it.

ROMANS: All right. It is the season for mailing packages. And if you got yours intact, be thankful. Did that guy just throw it over the fence?


ROMANS: We have the worst deliveries ever caught on tape.

VELSHI: Whoa! That's your TV set.

ROMANS: Buy the insurance.

It's 22 minutes after the hour.


ROMANS: Good morning. Welcome back. "Minding Your Business" this morning.

U.S. stock futures are up again after a promising housing report yesterday sent the Dow up 337 points. New home construction jumped more than nine percent in November. Much higher than expected showing a pull (ph) in the housing market. Housing permits as a gauge of future construction also climbed nearly six percent.

Positive news from Europe also helping to lift stocks. Today, struggling banks there can begin placing orders for unlimited three- year loans from the European Central Bank. It's an attempt to stabilize the banking sector and get credit flowing during the debt crisis there. The banking sector stocks catching a breather after this ECB measure.

A Bank of America stock which is down more than, wow, 60 percent since the beginning of the year is up nearly one percent in pre-market trading this morning. It's at $5.21 a share right now, BofA still down a lot, very low, but back up above that key $5 mark. Bank of America, one of those stocks in a lot of people's 401(k)s.

And Bank of America also could be close to settling an investigation with the Justice Department. At issue, whether the Countrywide Financial unit violated fair lending practices by encouraging those risky sub-prime mortgage loans at the heart of the financial crisis and the ensuing recession. According to Bloomberg, under the deal which could be announced maybe this week, Countrywide customers could be compensated. Bank of America bought that sub-prime lender at the height of the financial crisis in 2008.

Honda, the Japanese automaker, now reportedly shipping cars made in China to North America. This is significant, because companies import a lot of products from China, of course, to keep costs down, but that manufacturing edge. The cars, right now there seems to be a lot of those imported from China into the United States. It would be showing another in-road in the American manufacturing from the Chinese manufacturing juggernaut.

AMERICAN MORNING will be right back after this break.


ROMANS: Welcome back. It's about 31 minutes past the hour.

VELSHI: It is not the first day of winter.

ROMANS: OK. We sorted this out. Tomorrow is the first day of winter.

Time for this morning's top stories -- President Obama slamming House Republicans for not accepting the bipartisan Senate deal for a two-month extension of the payroll tax holiday.

With just 10 days to go before time runs out, House Republicans have so far only passed a measure calling for more negotiations in hopes of a one-year extension.

VELSHI: A deadly and blinding winter storm is winding its way through the Midwest this morning. The storm left a sheet of ice and two feet of snow in some areas of the plains. Highways are closed. Cars stranded across five states. Winter storm warnings are up again today as another storm moves in.

ROMANS: A top U.S. general has a blunt warning for Iran. He says the country is playing a dangerous game. General Martin Dempsey says that Iran continues its nuclear ambitions it could force the U.S. into another arms race and spark a major conflict in the Middle East.

The general made those comments in an exclusive interview with CNN's Barbara Starr. We're going to hear more from that discussion when Barbara joins us live later in the program.

VELSHI: Presidential candidate Michele Bachmann is on a bus tour of all 99 counties in Iowa hoping for a late comeback with two weeks to go.

Her campaign claims that the leader of a very influential conservative group asked her to consider getting out of the race, but she is all in the race as she has been since the beginning.

Congresswoman Bachmann joins us now from the trail in Davenport, Iowa. Congresswoman Bachmann, good to see you again.

REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: Good to see you, Ali. Pleasure to be with you on CNN.

VELSHI: We always have to fight over you because you're an Iowan and Christine's an Iowan, but I won today. Listen, let's talk a little bit about the caucus coming up 13 days to go in Iowa, your home state. You say your birth.

Most polls have you in around fourth place. These are very fluid polls right now. That is a far cry where you were in August where really you were thought of as the frontrunner in Iowa. What do you think about where you stand right now?

BACHMANN: Well, that's because I won the Iowa's straw poll, most important election we've had so far in this race. Now what we're seeing is that after the last debate that was held in Sioux City, we are bullet racing up the charts.

The momentum has switched. We are in the middle of our 99- county tour. We're just about at our 50th county. We're doing about 10 counties a day and it's been overwhelming, the response we're getting from people. We feel very confident about the results on January 3rd.

VELSHI: What are you hearing when out there? We always wonder. As you know I like to travel. I like to get on our CNN bus. I think you learn more from people when you're actually out in their communities.

What you're trying to get to 99 counties, Rick Santorum's been to 99 counties in Iowa. What are you hearing from people that's different or that you otherwise wouldn't be hearing when you're out on the ground?

BACHMANN: Well, people were very happy that in the last debate that I took it to Ron Paul on the area of national security. Of all the candidates in the race, I have the most national security experience that is current.

I sit on the House Intelligence Committee. And this issue dealing with Iran and Iran obtaining a nuclear weapon is one that is a center point we have to address, and people were grateful that I took that issue on.

As a matter of fact, there's an article in the "Huffington Post" this morning that said of all the candidates, I am the one best prepared to take on Barack Obama in the debates and to be able to defeat him.

VELSHI: There was a big endorsement that was up for grabs in Iowa this week from the family leader. They didn't end up actually endorsing anyone. You know, there are reports out there that they did.

The family leader didn't, but the leader, the guy that runs it, Bob Vander Plaats, we're going to talk to him in about half an hour, did end up endorsing Rick Santorum.

And there are these reports I just want to hear it from you, that he phoned you and asked you to get out of the race?

BACHMANN: Well, that's true, and there would be no reason for us to do that, because we've always polled above Rick Santorum. Plus, the momentum shifted tremendously this last week after the last debate.

I also have the endorsement of the former leader of the Family Leader Council, and I have the endorsement of the head of Concerned Women for America here in Iowa as well as over 100 pastors.

I have probably the strongest level of support of any of the candidates here among the Evangelical community in Iowa and we had a caravan of pastors traveling across Iowa last week letting people know I am the best candidate on these issues.

So we have a very widespread level of support and plus Glenn Beck said he would be voting for me. So we have a lot of support all across Iowa.

VELSHI: All right, what do you think the point was of that discussion to do something that makes sure Mitt Romney doesn't win in Iowa? What's the concern of those conservative voters who would suggest that you should step out in favor of Rick Santorum?

BACHMANN: Well, I think those would the people who are on his campaign, but, again, that's not where we're coming from. I am the only candidate that's won here in Iowa, and I'm the one who has the momentum that's shooting up the chart right now.

So what we're focused on is getting our positive message out all across Iowa, which we're doing, and we are thrilled with the residents that we're getting.

Iowans are making their choices right now. About 60 percent of the people are undecided and we're seeing a tremendous shift, over 1,500 people have come our way just over the last few days. We see tremendous shift and momentum. We think a lot of people will be surprised on January 3rd.

VELSHI: Congresswoman, you and I talked many times. We've been on the road together. I know you have a great grasp of issues, but you struggle a little bit with folks wondering whether you're getting things accurately or not.

It came up last week and you brought it up in the Fox debate when Newt Gingrich said you needed to get your facts straight. Let's just listen to what your response was.


BACHMANN: After the debate that we had last week, "Politifact" came out and said that everything that I said was true. I think it's outrageous to continue to say over and over through the debates that I don't have my facts right, when as a matter of fact, I do. I'm a serious candidate for president of the United States, and my facts are accurate.


VELSHI: No question you're a serious candidate, although "Politifact" actually had said they rated one thing as mostly true and one pants on fire. I like that rating. It's a fun one, because it's a fun name for it.

But that meant that they thought it was inaccurate. Do you feel like you're not -- you know, still feel like you're not being treated like a serious candidate and do you think this might be a contributor to it?

BACHMANN: Well, I think that the problem is, is that Newt Gingrich came across as very condescending in the way that he spoke to me. I am not his student. I am a serious candidate for president of the United States, and I think it's important that we treat each other that way.

And I think, again, I have a long history. I am a federal tax lawyer. I started my own successful company. I employed scores of people. I've raised 23 foster children, five biological children.

I started the first K-12 charter school in the United States. I have a series of accomplishments and I have a lot to offer, and I firmly believe that we will win here in Iowa and are looking forward to prevailing on January 3rd.

VELSHI: I want to ask you about the payroll tax cut, but I do want to ask you whether you think and you answer any way you want. I'm totally fine with whatever you say about us and the mainstream media. Do you think the mainstream media takes you seriously as a candidate and has treated you fairly?

BACHMANN: You know, I don't have any quarrel with the media. I haven't during this entire campaign. The media is what the media is and it's up to me to be able to communicate through the media. So I'm grateful for the response that we've had. VELSHI: Let's talk about the payroll tax cut. You talked about it just this weekend on "Meet the Press." I want to play for our viewers what you said.


BACHMANN: I didn't support it a year ago when it was first proposed and the reason why I didn't is because it denied $111 billion to the Social Security trust fund. I didn't think that that was a good thing to do last year. I don't think it's a good thing to do this year.

And remember the reason why President Obama proposed it in the first place, was to create jobs. There isn't one shred of evidence that that created jobs.


VELSHI: So says that the money comes from the general fund, not the fund that you said it did and they said it does create jobs. Do you still maintain your position that you don't think it does and that's why you're holding out on it?

BACHMANN: Well, the payroll tax cut deprives the Social Security trust fund of $111 billion. That's significant because senior citizens are dependent upon their checks that they're looking forward to from the federal government.

Those checks have to be paid, and when the money is not available in the Social Security Trust Fund, then Social Security has to go to the general treasury to take more money to send those checks out.

So the bottom line is that we are adding to the debt, and adding to the deficit. That's what's wrong with Washington. That's why we need a new president. We need a president who will stop adding to the debt and the deficit and live within our means.

This is a president who's been a spendaholic for his entire presidency. He has no concept about add revenue by growing the economy. That's my forte. I know how to do that. I know how to get our economy back in balance, and that's what I intend to do as president.

VELSHI: All right, so you're not -- you will not vote for either two-month extension or the one-year extension? You're staying solid about not wanting --

BACHMANN: I won't vote for either one because you're right. I won't vote for either one, Ali, because they're both temporary gimmicks. And I would tell you as a businesswoman myself what we need are permanent solutions.

This is not a permanent solution, and I will tell you business people all across America tell me, I'm not making a hiring decision based upon this tax payroll extension. It's not going to happen.

Let's do what works. Let's not pretend, dance around and try and be politicians. I'm not a politician. I have no interest in being a politician. I'm a real person in the business world.

Let's do what works to create jobs, not to make ourselves look good. What we need to do is have a permanent solution. That's what I would do at president of the United States.

VELSHI: Michele Bachmann always a pleasure to talk to you. Watch the voice. You got a lot of campaigning to do over the next few weeks.

BACHMANN: Thanks, Ali.

VELSHI: Good to see you. Michele Bachmann, of course, is a Republican Minnesota and a presidential candidate.

ROMANS: All right, the Egyptian military reacting this morning to a massive women's protest. Demonstrators organized a million woman march to protest military violence against women. This movement sparked by the video you're seeing right here.

The video of a woman being beaten by security forces. Military officials expressing great regret over attacks on women. CNN's Mohammed Jamjoom is in Cairo with the very latest. That video, I'm going to be honest with you. It's hard to watch, Mohammed.

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: That's right, Christine. It's extremely hard to watch. That video is one of the key things that drove women out into the streets yesterday, about 2,000 of them, by our estimation.

They came out because they were angry at the abuse being suffered by female protesters in Egypt at the hands of the Supreme Council of the Armed Forces and the security forces here the past week.

That video particularly showing a woman who was veiled being dragged, being kicked, being beaten, being clubbed, being stripped partially of her clothing and even being stomped upon by the riot police has caused so much outreach here in Egypt.

It's one of the big reasons that women were out yesterday. They had placards calling the armed forces here liars saying they should step aside. For their part, the Supreme Council of the Armed Forces, as you mentioned, they put out statement of regret that read.

The Supreme Council expresses its great regret to the great women of Egypt for the violations that took place and reassure its respect and appreciation for Egyptian women and their right in protesting and their active, positive, participation in the political life -- Christine.

ROMANS: All right, Mohammed Jamjoom, thank you so much for that.

VELSHI: All right, still to come this morning, a dangerous game. A top U.S. general has a warning for Iran. He's telling it exclusively to CNN. We'll have that live report up next.

ROMANS: All right, ever wonder what happens to packages after you mail them out?

VELSHI: No, no. Don't do that.

ROMANS: It might make you cringe. We have the worst deliveries ever caught on tape. You're watching AMERICAN MORNING. It's 43 minutes after the hour.


ROMANS: All right. Welcome back. The U.S. has a blunt message for Iran -- stop your nuclear weapons program. The chairman of the Joint Chiefs of Staff says Iran is playing a dangerous game that could hurt the Middle East and force the U.S. into a nuclear arms race.

General Martin Dempsey spoke exclusively with CNN Pentagon correspondent, Barbara Starr. Barbara joins us now live.

Strong words, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Strong words indeed, Christine. General Martin Dempsey is President Obama's chief military adviser. We traveled with him. CNN was the only news team with him as he traveled throughout the Middle East. And he made clear Iran is a growing worry.


STARR (voice-over): General Martin Dempsey, the chairman of the Joint Chiefs of Staff, began his Middle East tour in Kuwait. Everywhere, even in Afghanistan, Iran's nuclear intentions are a growing worry.

In an exclusive interview with CNN, the plain-spoken general has a blunt message for the Iranian regime.

GEN. MARTIN DEMPSEY, CHAIRMAN, JOINT CHIEFS OF STAFF: I think they'll miscalculate our resolve.

STARR: What could that mean?

DEMPSEY: I don't know. Any miscalculation, we're drawn into a conflict. And that would be -- that would be a tragedy and the world.

STARR (voice-over): Behind the scenes, Dempsey is quietly leading the ongoing military for an attack against Iran's nuclear weapons if the president gives the order.

DEMPSEY: We're examining a range of options.

STARR (on camera): Are you satisfied, if asked, the U.S. Military would be able to execute and option against Iran?

DEMPSEY: I'm satisfied that we are -- that the options that we're developing are evolving to a point that they would be executable if necessary.

STARR (voice-over): Dempsey has no guarantees Israel will give the U.S. warning if it decides to attack Iran. But he acknowledges the U.S. is sharing intelligence with Israel.

DEMPSEY: We're trying to establish confidence on the part of the Israelis that we recognize their concerns and are collaborating with them on addressing them.

STARR: And the loss of the U.S. spy drone over Iran exposed the U.S. espionage effort, which is critical for any military option.

DEMPSEY: If you're asking, are we gathering intelligence against Iran, in a variety of means, the answer is, of course. Wouldn't it be -- it would be rather imprudent of us not to try to understand what a nation, who has declared itself to be an adversary of the United States, is doing.


STARR: Dempsey also made a stop in Saudi Arabia on the way home. The Saudis talked about Starting their own nuclear weapons program, if -- if -- Iran was to get a nuclear weapon. That kind of arms race in the Middle East is something Dempsey says would be a disaster for everyone.

Christine and Ali?

ROMANS: All right, Barbara Starr. Thanks, Barbara.

VELSHI: Still to come this morning, kicked, tossed, crushed. We have the worst package delivery orders ever. Oh. I order so much online. All caught on tape. You don't want to see -- or you do want to see this.

ROMANS: Two of my recent packages have been completely in smithereens.

And today's "Romans' Numeral," 46 percent. Here's a hint. It has to do with value of your home. Some surprising signs of strength but, at the same time, the housing market is still taking a hit.

Forty-nine minutes after the hour.


ROMANS: This morning's "Romans' Numeral," a number in the news today. 46 percent, Ali. 46 percent of homes sold in November were what?

VELSHI: Empty?


ROMANS: Distressed. A real estate-owned -- by the bank or they were short sales, meaning people had to get out. When you sell a house distressed, short sale, you sell it for thousands and thousands of dollars less than you probably could if you held on to it.

VELSHI: Right. So you've permanently lost that equity now.

ROMANS: It's just a sign that you still have a lot of back log of trouble in the housing market, even as we've seen new construction of condos and apartment buildings pop up.

VELSHI: Yes, which is funny.

ROMANS: So it's interesting.

VELSHI: Yesterday, we saw this big surge in the stock market because of that new construction and new permits, which is definitely a good sign, but we still have a lot of distressed homes on the market. A lot of underwater homes.

And we're not done with this thing.


VELSHI: It's kind of weird to see these crazy reactions in the stock market because it suggests that, oh, my goodness, some problem has been lifted. It's still there.

ROMANS: It is. And I think it's interesting that condos and apartment buildings is where you see that excitement.

VELSHI: Absolutely.

ROMANS: It isn't necessarily in that distressed home that you see it for a short sale.

VELSHI: That's right.

It's that time of year. Thousands of packages being mailed out every day.

ROMANS: I love this video.

VELSHI: Do you ever wonder what happens? I think they pack my thing really nicely and somebody delivers it really nicely. Not always.

ROMANS: The next story will make you cringe. Jeanne Moos shows you the worst delivery ever caught on tape.


JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): 'Tis the season for packages. And next time you open one intact, be grateful this didn't happen to it. This was a computer monitor, tossed over a gate in southern California by a FedEx delivery man. But then the surveillance camera video was delivered to YouTube and made the news.


MOOS: And now FedEx is saying, we have seen the video and frankly we were all shocked.

But that's not the only drop of memorialized on YouTube.

UNIDENTIFIED MALE: Handle with care. Just like that. Ground service, I get it. Ground.

MOOS: It's not just FedEx.


AD NARRATOR: What can brown do for you?


MOOS: UPS Brown can toss your package underhand. It can toss it overhand.



MOOS: It can toss it like a horse shoe. Fences and gates are the delivery man's nemesis. As a driver posted, from a delivery point of view, gates are hostile. Don't like it, get rid of the gate.

The guys videoing this UPS delivery man compared his technology to loading garbage.

UNIDENTIFIED MALE: Think there is going to be anything damaged in there?

MOOS: Of course, it could be worse. At least they're not Ace Ventura.


MOOS: Of all the special deliveries we saw, none was more special than this by FedEx.


There were sparks coming off the box. And the man who was shooting --

UNIDENTIFIED MALE: This guy has no idea that he's pushing an oven.

MOOS: As for the computer monitor heaved over the gate, the person who posted it said the monitor was broken. And it's sad, because he was home at the time, if the delivery man just rung the bell.

(on camera): I'm sure what you're probably wondering is, does this guy still have a job? FedEx told CNN, "We have I.D.'d the man involved and he is being handled according to our internal disciplinary policies." (BEGIN VIDEO CLIP)

AD NARRATOR: Federal Express, when it absolutely, positively has to be there overnight.


MOOS: They said overnight, not in one piece.

But now that everyone has a camera, it does not pay for the delivery elves to get sloppy.


MOOS: Jeanne Moos, CNN, New York.



ROMANS: Thanks, Jeanne. We needed that.

VELSHI: I get most of my stuff delivered. And I have to say, not a lot of it gets broken. But in New York, there's no throwing and no fences, it's just building to truck.

ROMANS: That's right.

All right, words of wisdom from the world's oldest stockbroker. He's 106, still working on Wall Street. He says his secret to long life is surprisingly simple. We'll tell you what it is, coming up.

You're watching AMERICAN MORNING. It's about 57 minutes past the hour.